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2015-04-06

The REAL Domain Hogs: ICANN Officers, Staff, Lavish Pay, Benefits, Accountability Risks Institutionalized

UPDATE: US Workers with Annual Earnings* over $118,500: 6.19%;
over $250,000: 1.5%
and over $400,000: 0.7% 
*2014 analysis, source: Table 1, Center for Economic and Policy Research

Background: Domain Name Registrants, directly and indirectly, pay for ICANN's lavish excesses--.COM registrants, for example, pay ICANN (the Internet Corporation for Assigned Names and Numbers) a mandatory annual fee of $0.18 for each domain registration, renewal or transfer, and yet have no representation within ICANN, no Registrants stakeholder group , unlike registry operators and registrars who are over-represented, well-resourced, special interest lobbyists-legislators-stakeholders in the ICANN organization. Adding insult to injury, the ICANN CEO earlier this year made a splash by criticizing domain name registrants for "hogging" names. Then late on Good Friday, April 3, 2015, ICANN tried to "bury" its Form 990 announcement--
ICANN FY14 Form 990 Announcement - ICANN: "ICANN filed its Form 990 for the fiscal year ending June 30, 2014 with the Internal Revenue Service (IRS) on March 31, 2015 in compliance with the extended due date of May 15, 2015. The Form 990 is the United States return for organizations exempt from income taxes under section 501(c) of the Internal Revenue Code. ICANN continues to provide accountability and transparency regarding its financial results and the filed Form 990 is available on the "Financial Information for ICANN" page of the ICANN.org site and is also included in this announcement. ICANN's FY14 Form 990 [PDF, 428 KB] is now posted and is available to the community. The Community is invited to review ICANN's Form 990 and to provide commentaries and/or questions."

Forget about the "non-profit" status of ICANN, you really don't have to look far to see who is "profiting" from the ICANN monopoly, from inside the non-profit, non-membership California corporation--but first beware the "fine print" of ICANN FY2014 (thru 6/30/2014)--we are really talking calendar year 2013--[Supplemental Note to ICANN FORM 990, SCHEDULE J, PART I, LINE 1A: AMOUNTS LISTED IN PART VII OF FORM 990 AND SCHEDULE J REPRESENT AMOUNTS FOR THE 2013 CALENDAR YEAR.] (ICANN source: Schedule J (Form 990) 2013 Page 3, Part III Supplemental Information of the ICANN Form 990 for FY2014)

Who knows the total remuneration ICANN paid its Domain Hog officers and staffers in calendar year 2014? Wait another year and you might find out in 2016. **2015?--you may find out in 2017. ICANN accountability in action! In any event, ICANN's FY2014 Form 990 (listing amounts for Calendar Year 2013) shows ICANN's #1 "Domain Hog" is Fadi Chehade (2013 total: $899,080) followed by #2, surprise, surprise, Akram Atallah (2013 total $713,464). Remember it was Akram who got Fadi hired* as ICANN CEO! After becoming CEO, Fadi Chehade then promoted Akram Atallah to the newly created the job of President, Global Domains Division, and now both are feasting at the trough--and this is only 2013 remuneration--add 2014 and 2015, and you see what making real money off a non-profit organization is all about!
*ICANN, ICAN'T, IWON'T: uWHAT? How the internet is actually run • The Register, Nov 3, 2014: "Chehade was himself brought into ICANN by his former co-worker and COO Akram Atallah. Grogan will take over from Maguy Serad, who was hired by Atallah as senior compliance director and then promoted to veep on Chehade's first day as CEO. The choice of Serad wasn't popular with compliance staff, who complained she had little experience in compliance work. Serad is the wife of a former co-worker of both Chehade and Atallah, Roger Serad." (emphasis added)
But wait, the story gets even better--
Internet group picks little-known exec [Fadi Chehade] as CEO – USATODAY.com 6/22/2012 : "Atallah, the No. 2 executive at ICANN, was Chehade's deputy at CoreObjects. They had also known each other as children; both served in the boy scouts in Lebanon."
You can't make this stuff up! LOL!

ICANN claims its remuneration is "market based," but no one really believes that, not even Emily Taylor: "ICANN’s generous pay and reward schemes, coupled with difficulties in finding comparable employed positions elsewhere in the small domain name policy space, can become drivers against transparency. Analysis of ICANN’s audited accounts and filed IRS 990 forms show that from 2011 to 2013, the average salary per person at ICANN was above $170,000. Excluding highest-paid executives (as declared on the form), average pay still exceeded $138,000, and across the staff base, salaries increased by between 11 and 16 percent in fiscal years 2012 and 2013, against US inflation rates of three percent or lower. Employee benefits are exceptionally generous, including full health care, and a pension contribution of up to 15 percent of salary... There are powerful financial and social drivers  for staff to stay in position, and not to place their employment at risk by raising concerns." (source: ICANN: Bridging the Trust Gap, p.10) (emphasis added)

But with no membership having standing to sue ICANN Directors for breach of their fiduciary duties, ICANN is wide open for this kind of "profiteering" (and yes, even some ICANN Directors included). Again, from Ms. Taylor's report:
ICANN as a corporation is a largely unregulated, private sector body with control over critical Internet resources on which global economies depend. It has no natural competitors, is cash-rich (in 2014, its current assets were more than $350 million, with a further $145 million in deferred income), and directly or indirectly supports many of its participants and other Internet governance processes.Without effective accountability and transparency mechanisms, the opportunities for distortion, even corruption, are manifold. In such an environment, it is not sufficient simply to invoke trust.  (emphasis added)
And of course, with all of the activity of the IANA stewardship transition, there's this little gem:
LOBBYING EXPENDITURES - SCHEDULE C PART II-B:
THE ORGANIZATION UTILIZED THE SERVICES OF A STAFF REGISTERED LOBBYIST AND TWO GOVERNMENT AFFAIRS FIRMS DURING THE YEAR ENDED JUNE 30, 2014, FOR A COST OF $576,138." (source: ICANN, Form 990, FY ending June 30, 2014).
So what to make of all this in the midst of the IANA stewardship transition and ICANN accountability processes? Domain Mondo is reminded of the old American saying:

Caveat Emptor!


**ICANN disclosure of Chehade and Atallah compensation (pdf), November 1, 2014: 
President and Chief Executive Officer - Fadi Chehadé was appointed ICANN’s President and Chief Executive Officer, as well as a member of the Board of Directors, effective 14 September 2012. Mr. Chehadé entered into an employment agreement with ICANN effective 14 September 2012 ending 30 June 2015. This agreement has been extended to 30 June 2017. Under the terms of the agreement, Mr. Chehadé is to be paid a base salary of US$630,000 per year, is eligible for additional at-risk compensation of up to US$270,000 per year, and is provided reasonable coverage under vacation, health and welfare plans including medical, dental, vision, life insurance and a 401(k) retirement plan that ICANN makes available to all its U.S. based employees.President, Global Domains Division - Mr. Akram Atallah was appointed as Chief Operating Officer effective 20 September 2010, he also served as President and Chief Executive Officer from 1 July 2012 through 14 September 2012, and was appointed as President, Global Domains Division in June 2013. Since 1 July 2014, Mr. Atallah’s compensation has consisted of a base salary of US$481,390.00 per year, eligibility for additional at-risk compensation of up to 30 percent of base per year, and reasonable coverage under vacation, health and welfare plans including medical, dental, vision, life insurance and a 401(k) retirement plan that ICANN makes available to all its U.S. based employees.