On December 10, in a letter to the board of the Minnesota Orchestra Association, ten Minnesota State legislators called for the resignations of Minnesota Orchestra CEO Michael Henson, board chair Jon Campbell, and past board chair Richard Davis, accusing them of financial mismanagement. They also called for an immediate end to the lockout of the musicians. The letter is excerpted below.
Leadership of the Minnesota Orchestral Association manipulated financial results in a deliberate deception of the public, first to gain public funding for Orchestra Hall, and then to justify locking out the musicians for well over a year.
This intentional deception was spelled out in September 2009, by MOA VP of Finance Bryan Ebensteiner to MOA’s Finance and Executive Committees, “Balances in 2009 and 2010 would support our state bonding aspirations, while the deficits in 2011 and 2012 would demonstrate the need to reset the business model.” This statement was made, not as a prediction, but as a fact—long before Mr. Ebensteiner had any real ability to know what would happen with MOA finances.
MOA achieved exactly the result Mr. Ebensteiner said it would, with balanced budgets in fiscal years 2009 and 2010 and then large and increasing deficits in FY 2011 and 2012.
It is not only the deception that is troubling, but also the apparent fiscal mismanagement:
Since Michael Henson was hired as CEO of the Minnesota Orchestra, from 2008–2012, the Minnesota Orchestra’s revenue from operations has decreased over 15%, contrasted to the Cleveland Orchestra’s increase of over 8%. Likewise, for donor contributions; from 2008–12, the Cleveland Orchestra increased its donor contributions (excluding capital campaigns) by over 25% while the Minnesota Orchestra has shown a decrease of over 15%. The Minnesota Orchestra’s return on its investments did not match that of the Cleveland Orchestra nor of its peer group of similarly-sized endowment funds. We urge you to read the entire comparison at http://www.orchestrateexcellence.org/a-tale-of-two-orchestras/
Despite the subpar financial management of Mr. Henson, and the deliberate deception carried out by his administration, MOA rewarded him with not one, but two, bonuses, totaling over $200,000, bringing his total compensation to over $619,000 during the 2011 calendar year. These bonuses were paid in the midst of the financial crisis that was later used to justify the lockout. The results under Henson’s management have been nothing short of a disaster.
It is clear that MOA management and Board leadership is willing to destroy the orchestra in order to “reset the business model.”
We call for:
- the resignation of CEO Michael Henson, Chairman Jon Campbell, Past Chair Richard Davis and any others in MOA leadership involved in the public deception and the financial mismanagement of the organization. To restore public trust in the Orchestral Association, it is time for new leadership.
- an immediate end to the lockout of the musicians and resumption of negotiations over a new contract. The MOA has locked out the musicians; the MOA is the only one who can end this debacle. In other words, accept the mediator’s proposal.
The Minnesota Orchestral Association Board will need to decide the direction it will pursue. If the board fails to replace MOA leadership and end the lockout, it will force the hands of other stakeholders, including the state, which provided major public funding for the renovation of Orchestra Hall. We believe there are members of your MOA board who truly care about the Minnesota Orchestra, members who question why board leadership and management has been willing to destroy the orchestra that they claim to love. And with the loss of more than one entire season, the departure of Osmo Vänskä and some of the top musicians, the cancellation of Carnegie Hall and BBC Proms performances, they are destroying the Minnesota Orchestra. ￼