Summerfest CEO Don Smiley's total payout nearly tripled to $2.3 million in 2017

Summerfest CEO Don Smiley is getting paid like a rock 'n' roll headliner.

And that's not sitting well with city officials trying to get the festival to pay more for policing.

Smiley was paid total compensation of more than $2.3 million in 2017, according to federal tax filings. This sum includes Smiley's salary for that year, a little less than $400,000, a bonus of more than $55,000, plus deferred compensation from the five previous years.

His pay that year was three times more than what he received in total compensation in 2016.

Smiley's increased income is particularly glaring in light of the city's battle to get Summerfest to pay more for security costs. The city has said it spent more than $800,000 to provide policing for the 11-day festival for the fourth consecutive year.

Milwaukee Mayor Tom Barrett said he was "shocked" by Smiley's compensation for 2017, which was first reported by Urban Milwaukee.

"I think there’s some people who have to do some real soul searching about whether they’re doing the right thing when we’re eliminating police positions in Milwaukee and that compensation is going in the other direction," Barrett said. "That’s simply wrong.”

In 2018, however, Smiley's total pay package fell to $743,000, according to a draft of the organization's annual federal filing. He had a base salary of $402,000, a bonus of $76,800 and deferred compensation of more than $230,000, plus other non-taxable benefits.

Summerfest officials defended Smiley's overall compensation, saying his pay is comparable to executives running other private music festivals, such as Ravinia in metropolitan Chicago.

"I believe he's earned it," said Howard Sosoff, chairman of the board of Milwaukee World Festival Inc., the nonprofit group that oversees Summerfest. "I believe the board agrees with that."

Sosoff added that Smiley, formerly an executive with baseball's Miami Marlins, would be paid "much more if he is working in some of the areas he worked in in a prior life."

Smiley's pay jumps significantly every five years because of the way his bonuses are structured. Under his current contract, the board sets aside about $240,000 annually for its CEO but pays out the sum at the end of five years. He would lose this deferred compensation if he quits before the end of the five-year period.

Sosoff said the agreement makes good business sense for the board because it provides a financial incentive for Smiley to stay in Milwaukee.

As for the policing costs, Sosoff said the festival is following terms of its 2009 lease agreement with the City Harbor Commission Board. The festival pays more than $2 million annually plus a $145,000 annual supplement.

"I can't judge as to what they're doing and why they're doing it," Sosoff said of the city's efforts to get more revenue for policing. "I'm sure since they're attempting to balance their budget, they're looking at all resources they can tap into."

City officials contend that policing costs have risen in the wake of several mass shootings at music venues in the United States and overseas.

"The salary increase for Mr. Smiley is very substantial," said Ald. Michael Murphy. "I would say Milwaukee World Festival has the resources to assist us on this effort (to pay more for policing) if they can afford that type of level of compensation."

Finance Committee Chairwoman Milele Coggs called the amount being paid to Smiley "disheartening."

“Seeing how we’re struggling financially, it’s kind of hard to stomach such high payments for staff, when they’re not paying the police anywhere near what it’s costing,” she said.

Relations between city officials and Summerfest grew rocky earlier this week when no one from Milwaukee World Festival showed up for a committee meeting for the City Harbor Commission.

The Harbor Commission serves as the landlord for Summerfest, which leases land at Henry Maier Festival Park.

Ald. Mark Borkowski, who is a member of the Harbor Commission Board, said Summerfest's absence from the meeting shows "tremendous disrespect for the taxpayers."

Borkowski was equally critical of Smiley's pay package.

"Don Smiley has no sense of self-awareness if he believes Milwaukee taxpayers are not insulted by his unwillingness to have Milwaukee World Festival reimburse Milwaukee taxpayers for the cost of providing a safe and secure venue, approximately $700,000, while his pay package is 37 times greater than the average salary in Milwaukee of $63,000," Borkowski said in a statement.

"That’s a tough argument to make to my constituents who are footing the bill to subsidize his bottom-line and salary," he said.

Smiley has overseen more than $165 million in renovations at Maier Festival Park since 2006. By the end of the year, Milwaukee World Festival will have an estimated $30.1 million in debt, although the festival remains profitable.

With one main stage show canceled, there was a 6% decline in attendance in 2019 as Summerfest recorded its lowest number of admissions in more than 30 years.

In 2005, his first year of running the Big Gig, Smiley received a total pay package of $280,864. Between his first year and 2017, his total compensation increased by 734%.

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The first major bump in his paycheck came in 2011 when Smiley received a total outlay of nearly $800,000. Officials at the time said they were simply trying to bring him in line with what he would be paid in the business world.