DOCUMENT: Celebrity

Rev. Al Sharpton Gave Himself A $437,555 "Bonus"

Activist got huge payout from not-for-profit org

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Sharpton Bonus

JUNE 13--The not-for-profit “social justice organization” headed by Rev. Al Sharpton paid the New York activist a whopping $437,555 bonus--on top of his $250,000 salary--according to the group’s most recent tax return submitted to the Internal Revenue Service.

The hefty payment to Sharpton was revealed in a filing by the National Action Network, the Harlem-based group Sharpton founded nearly 25 years ago. The organization’s 2016 tax return, which Sharpton signed in November 2017, disclosed the “one-time bonus” to the 63-year-old civil rights leader.

According to its tax return, the National Action Network “works within the spirit and tradition” of Martin Luther King Jr. and promotes “an agenda that includes an equal standard of justice and decency for all people regardless of race.” Sharpton, who serves as the group’s president and CEO, spends an average of 40 hours a week working for the organization, according to the tax return.

The “Christian activist social justice organization” has 34 employees and 125 volunteers and reported $5.821 million in revenue in 2016 (the most recent year for which financial records have been made public). Expenses for 2016 totaled $5.817 million.

Sharpton’s 2016 “base salary” was $250,000. The bonus payment ballooned his total compensation to $687,555.

In justifying the bonus, the National Action Network--which Sharpton controls--told the IRS that, over the past 25 years,  Sharpton had “periodically declined compensation to ensure that the organization had sufficient operating funds to fulfill its payroll obligations and maintain ongoing operations.” The organization added that it had previously “received the services of the President and CEO without fully compensating for his services.”

Additionally, the group “recognizes that it did not offer any retirement or benefit package to the President and CEO in contrast to most peer organizations that do offer retirement or benefit packages.”

In a move to rectify this purported shorting of Sharpton, the organization provided him with a "one-time bonus" of $437,555. This retroactive payout was meant to address prior “compensation that was declined or not fully compensated.”

The tax return offers no specifics as to how the $437,555 figure was arrived at or whose idea the payment was.

In fact, the organization itself noted that its “Board/Executive Committee recognizes that developing a formal approach to compensating the President and CEO...would be an appropriate action to take at this time.” To that end, the group reported commissioning a “comparability study” with regard to the compensation of Sharpton and Michael Hardy, the Sharpton sidekick who serves as the organization’s $150,000-a-year general counsel.

Until recent years, the National Action Network’s finances were a shambles, thanks to Sharpton’s mismanagement of the group. At one point, the organization owed federal, state, and city tax authorities nearly $2 million for unpaid payroll taxes and related penalties and interest. Subsequent negotiations with the IRS substantially cut the group’s federal debt. In 2015, a payroll tax liability of nearly $800,000 was wiped from the organization’s balance sheet.

The organization’s finances were once so precarious that Sharpton himself lent the National Action Network hundreds of thousands of dollars. According to the 2016 tax return, the group’s debt to its founder is now only $4056.

In addition to his compensation, Sharpton’s hefty expenses--first class air travel, luxury hotels, and a chauffeured car--are covered by the National Action Network. While Sharpton has an office at the group’s leased Harlem headquarters, he often works from a midtown Manhattan office rented by the not-for-profit.

Until his August 2015 demotion, Sharpton hosted a daily show on MSNBC. His “PoliticsNation” program now airs on Sundays at 8 AM. (3 pages)