As city employees in Minneapolis endured a wage freeze this year to keep property taxes down, the head of the taxpayer-funded convention and visitors bureau got a 4 percent raise and a $23,025 bonus.
Meet Minneapolis, a nonprofit corporation under contract with the city, recently rewarded its CEO, Melvin Tennant, with a bonus on top of the raise that increased his base salary to $195,000 -- higher than any city employee. City sales tax dollars pay for about 83 percent of the budget of Meet Minneapolis, an organization whose job it is to attract business to the city's convention center, boosting tourism and filling hotel rooms.
The issue of the nonprofit's executive bonus has irked some City Council members for at least two years, but others who serve on the nonprofit's board defend the compensation. Performance bonuses do not exist at City Hall and the three highest-paid city employees -- the convention center CEO, the city coordinator and the police chief -- make about $150,000.
Meet Minneapolis board members said Tennant's pay is competitive with convention and visitors bureau heads elsewhere and said he earned the bonus by surpassing goals set last year. "If we want to be in the destination marketing arena, our compensation needs to be commensurate," said Lynn Casey, a public relations executive who chaired Meet Minneapolis' board until Jan. 1.
But Council Member Gary Schiff called the payouts "inappropriate."
"It's just not reflective of the fact that this is a public sector job," Schiff said. "These are tax dollars being spent. And he's getting paid more than the police chief."
Documents provided by Meet Minneapolis show Tennant reached or came close to his goals in 2011 for meeting budgets, booking hotel room nights, generating convention center revenue and attracting sponsorship revenue. Minneapolis Convention Center revenue exceeded expectations last year, though its operations still require a heavy hospitality tax subsidy.
"Last year was an extremely good year for the convention industry in Minneapolis. And we're pleased," said City Council President Barb Johnson, one of three council members on Meet Minneapolis' executive board. She voted to approve the bonus in February.
The salary increase was awarded separately by Casey and the new board chair, Peter Mihajlov, said Kristen Montag, Meet Minneapolis' spokeswoman.
Meet Minneapolis spends the largest chunk of its $9 million annual revenue persuading trade associations and other groups to host their conventions in Minneapolis. That includes incentives to woo certain groups, like paying hotels to offer discounts. The group also budgeted about $220,000 last year to develop a new brand for Minneapolis: "City by Nature."
Johnson noted that having convention visitors is a boon to private businesses in the city, because the average convention visitor spends more than $1,000 during a visit.
Tim Giles, the city's director of employee services, said city employees do not receive bonuses. They are also not receiving any salary increases this year, because of a 2010 council decision aimed at reducing property tax hikes.
Tennant's bonus fluctuates from year to year; he got $22,500 in 2010 and in 2011. He wasn't the only Meet Minneapolis employee to land a bonus. Leslie Wright, senior vice president of destination sales and services, took home a $19,603 bonus this year for her work in 2011.
About $7.5 million of Meet Minneapolis' $9 million total revenue last year came from city taxes -- a citywide sales tax, downtown restaurant tax, downtown liquor tax and hotel tax. Those are the same taxes that prop up the city's convention center, which Mayor R.T. Rybak would like to use to fund the city's portion of a new Vikings stadium.
When Tennant took the top job at Meet Minneapolis -- a 25-year-old organization formerly known as the Greater Minneapolis Convention and Visitors Association -- in 2008, he brought with him years of experience from other convention and visitors bureaus. He spent two years leading the convention bureau in Oakland, Calif., 11 years as CEO in Charlotte, N.C., and two years as executive director in San Antonio before coming to Minneapolis.
Casey said the industry is "extraordinarily competitive" and it is important to keep Tennant's pay on par with his peers. "Otherwise there's an opportunity for another market to come in and make a better offer," she said.
Johnson and others pointed out that since Tennant's bonus came under criticism in 2010, his goals have become more measurable. Those bonus metrics, Casey said, "have teeth" -- his maximum is $25,000.
Eric Roper 612-673-1732