cmaa compensation & benefits...

Table of Contents Section I – List of Tables and Figures ................................................................................................ 3 Section II – Comments on Survey and Report Methodology ............................................................ 4 Section III – Introduction to Club Benchmarking ............................................................................... 7 Section IV – Executive Summary ........................................................................................................ 8 Section V – Observations Regarding the Head of Club (HOC) ....................................................... 10

Head of Club (HOC) Contract and Evaluation ................................................................................... 12 Compensation Analysis ..................................................................................................................... 13 Drivers of Compensation ................................................................................................................... 13

Section VI – Operational Analysis Regarding Staffing Compensation and Expenses.................. 16 Section VII – Health Insurance Analysis ........................................................................................... 23 Section VIII – Executive Position Data .............................................................................................. 31

Chief Financial Officer ....................................................................................................................... 32 Executive Chef .................................................................................................................................. 33 Golf Course Superintendent .............................................................................................................. 34 Director of Golf .................................................................................................................................. 35 Head Golf Professional ..................................................................................................................... 36 Head Tennis Professional ................................................................................................................. 37 Assistant General Manager ............................................................................................................... 38

Section IX – Salaried Staff Data ......................................................................................................... 39 Clubhouse Manager .......................................................................................................................... 40 Food and Beverage Director ............................................................................................................. 41 Catering Manager ............................................................................................................................. 42 Human Resources Director ............................................................................................................... 43 Controller .......................................................................................................................................... 44 First Assistant Superintendent .......................................................................................................... 45 First Assistant Golf Professional ....................................................................................................... 46 Membership/Marketing Director ........................................................................................................ 47 Head of Building Maintenance .......................................................................................................... 48 Health and Fitness Director ............................................................................................................... 49 Administrative Assistant/Secretary .................................................................................................... 50

Section X – Hourly Staff Data ............................................................................................................ 51 Appendix I – Available Cash White Paper ........................................................................................ 52 Appendix II – Executive Compensation in the Private Club Industry White Paper ....................... 63

Section I – List of Tables and Figures Tables Table 1 – Median Base Salary Data ............................................................................................................ 13 Table 2 – Median Base Salary Data by Revenue Market Segment – Clubs With Golf ................................. 13 Table 3 – Distribution of Base Salary – Clubs Without Golf ......................................................................... 13 Table 4 – Analysis of Head of Club Compensation to Operating Revenue .................................................. 15 Table 5 – Distribution of Total Compensation for HOC as a Percentage of Operating Revenue .................. 15 Table 6 – Analysis of Head of Club Total Compensation Distribution Relative to Level of Certification ........ 15 Table 7 – Hourly Staff Wage Distribution ..................................................................................................... 51 Figures Figure 1 – Contract Duration for Head of Club............................................................................................. 12 Figure 2 – Total Compensation for HOC as a Percentage of Operating Revenue – All Clubs ..................... 14 Figure 3 – Payroll to Operating Revenue Ratio – Clubs With Golf ............................................................... 17 Figure 4 – Payroll to Operating Revenue Ratio – Clubs Without Golf .......................................................... 17 Figure 5 – F&B Payroll to F&B Revenue Ratio – Clubs With Golf ................................................................ 18 Figure 6 – F&B Payroll to F&B Revenue Ratio – Clubs Without Golf ........................................................... 18 Figure 7 – Available Cash to Operating Revenue Ratio (Gross Profit) – Clubs With Golf ............................ 19 Figure 8 – Available Cash to Operating Revenue Ratio (Gross Profit) – Clubs Without Golf ....................... 19 Figure 9 – Cost per FTE – Clubs With Less Than $6 Million in Operating Revenue .................................... 20 Figure 10 – Cost per FTE – Clubs With More Than $6 Million in Operating Revenue .................................. 21 Figure 11 – Payroll to Operating Revenue – Clubs With Less Than $6 Million in Revenue.......................... 21 Figure 12 – Payroll to Operating Revenue – Clubs With More Than $6 Million in Revenue ......................... 22 Figure 13 – Total Health Care Expense as a Percentage of Payroll – 2013 Survey Report ......................... 24 Figure 14 – Total Health Care Expense as a Percentage of Payroll – 2014 Survey Report ......................... 24 Figure 15 – Total Health Care Expense per Full Time Equivalent – 2013 Survey Report ............................ 25 Figure 16 – Total Health Care Expense per Full Time Equivalent – 2014 Survey Report ............................ 25 Figure 17 – Maximum Deductible Family Plan – 2013 Survey ..................................................................... 27 Figure 18 – Maximum Deductible Family Plan – 2014 Survey ..................................................................... 27 Figure 19 – Maximum Deductible Individual Plan – 2013 Survey ................................................................ 28 Figure 20 – Maximum Deductible Individual Plan – 2014 Survey ................................................................ 28 Figure 21 – Maximum Out-of-Pocket Individual Plan – 2013 Survey ........................................................... 29 Figure 22 – Maximum Out-of-Pocket Individual Plan – 2014 Survey ........................................................... 29 Figure 23 – Maximum Out-of-Pocket Family Plan – 2013 Survey ................................................................ 30 Figure 24 – Maximum Out-of-Pocket Family Plan – 2014 Survey ................................................................ 30

Section II – Comments on Survey and Report Methodology This report represents the results of the 2014 Compensation and Benefits Survey conducted in collaboration between Club Benchmarking (CB) and the Club Managers Association of America (CMAA). The questions comprising the Compensation and Benefits survey and the Club Benchmarking Compensation and Benefits benchmark were developed by Club Benchmarking and CMAA national staff. The data was collected from survey participants between January 01, 2014 and August 11, 2014. A total of 318 clubs participated in the 2014 survey. As in the past, every respondent did not reply to every question on the survey. Therefore, the findings in this report are based on the responses received for each individual question. This survey is comprehensive, incorporating data from all positions across the club. The intent is to put Compensation and Benefits into context. The report addresses Total Compensation and Benefits in relation to club size as manifested by total operating revenue, member counts and total dues revenue. There is further payroll analysis for golf, city and yacht clubs. Finally, there is a section on health care costs. Then each position’s individual compensation and benefits are analyzed with a detailed analysis of the Head of the Club. Club Benchmarking and CMAA have exercised best effort in preparation of the information contained herein for accuracy. However, Club Benchmarking and CMAA disclaim all implied warranties, including, without limitation, warranties of merchantability or fitness for a particular purpose. Club Benchmarking and CMAA shall have no liability for any direct, incidental, special or consequential damages or lost profits. The report relies heavily on the concept of percentiles and quartiles. Percentiles and quartiles are easy to understand and offer an excellent view into the statistical distribution of a set of data. Certain percentile points characterize quartiles – namely the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile). Twenty-five percent of all respondents fall in the lower quartile, 25 percent fall between the 25th percentile and the median, 25 percent fall between the median and the 75th percentile and 25 percent of all respondents fall in the upper quartile. The median bisects the distribution – half of the respondents lie below the median while half lie above it. A sample Statistical Icon is shown below using total member count. Half of the responding clubs had a total member count below 634 and half had a member count above. Twenty-five percent of clubs had a member count below 441 while 75 percent had a member count above 441 and finally, 75 percent of clubs had a member count below 980 while 25 percent had a member count above 980.

Median 25th Percentile 75th Percentile

441 980

634

Sample Statistical Icon - Total Member Count

Another example of a graphic used to communicate results throughout the report, and throughout Club Benchmarking’s online service, is shown below. The noted graphic is referred to as a scatter plot and shows a curve connecting every single response for the given data point (also referred to as a metric). The 25th, 50th and 75th percentiles are also shown on the curve. In this example, the 25th percentile is $6,116, the 50th percentile (median) is $9,130 and the 75th percentile is $12,772. As you read the report and come across scatter plots such as the one below, you should be focusing on the curve between the 25th and 75th percentiles into which 50 percent of all clubs fall. As in the example, as you reach the ends of the curve, you see what are termed “outliers” – those clubs that for whatever reason form anomalies for the given metric.

Club Benchmarking’s online platform shows you your club’s position on a scatter plot or into exactly which percentile your club falls. You can see this for every data point to which your club responded by joining Club Benchmarking. If you need help in this regard, please see the contacts below. Both the data collection for the survey and the Club Benchmarking platform make every effort to organize financial information in accordance with the Uniform System of Financial Reporting for Clubs, Seventh edition. Copyright® 2014 by Club Managers Association of America. All rights reserved. Printed in the United States. No part of the publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the Club Managers Association of America.

Club Benchmarking www.clubbenchmarking.com

New Castle, NH 03854

http://www.clubbenchmarking.com/

Any questions or comments regarding the survey or the report may be addressed to either Ray Cronin ([email protected]) or Peter Gooding ([email protected]) at Club Benchmarking or to Sarah Bal at CMAA ([email protected]).

mailto:[email protected]



Section III – Introduction to Club Benchmarking The Need General Managers and executives of clubs are often tasked with supplying data comparing their club to peer clubs, hence reports such as this. Given some of the unique attributes of the club industry (revolving boards and committees, member ownership models, correlation to economic conditions) having reliable and readily available comparison data is especially important. Without accurate, standardized data, clubs often endure lengthy board and committee discussions where opinions are treated as fact, and a general lack of alignment on strategy or direction persists. Current Situation For decades, clubs have relied on certain and familiar methods to support the need for comparison data. Industry level surveys resulting in static reports, multiple club-to-club surveys which are typically redundant and lack standardization, and of course picking up the phone and calling fellow general managers and controllers. These methods are highly redundant and reactionary, often driven by questions at the last board meeting, but the data has a very short life span and is not available or useful to the industry at large. The data does not live beyond its reactionary goal. Club Benchmarking Fills the Need

• The club industry will benefit immensely from a centralized, standardized, online data sharing platform containing complete finance, operations and compensation information. Such a platform is accessible to the entire industry, at any time, right from your desktop.

• A single national, standardized (apples-to-apples) database, with user defined peer sets. Click here to see the list of Club Benchmarking subscribers.

• Significant reduction in, or elimination of, the endless stream of surveys • Supports all club types (golf, country, yacht, city, other clubs). • Covering finance and operations, compensation and benefits and policies and procedures. • A dynamic database, constantly growing with historical data always accessible. • Web-based, 24/7 access from anywhere.

http://www.clubbenchmarking.com/member-list

http://www.clubbenchmarking.com/member-list

Section IV – Executive Summary The club industry is in a critical stage of evolution regarding data sharing as this survey is the fourth Compensation and Benefits report to be completed using Dynamic BenchmarkingTM technology. Club Benchmarking’s Dynamic Benchmarking technology allows the data that has been input by survey participants to “live on” beyond the report itself – the data is accessible online 24/7. CB Subscribers can instantly refine the comparison data to their particular region, revenue range, club type, member count, etc. and see their data exactly as it appears in comparison to the user defined background data. This report presents a club-wide view of Compensation and Benefits data. Additionally, there is in depth analysis and reporting on payroll in the context of Operational Key Performance Indicators (KPIs) and Health Insurance expenses and plans which are a key concern for clubs across the country. While there is a wealth of data presented statically in this report, readers of reports such as this often wish to “dig deeper” and to “dynamically” zero-in more closely on their own particular situation. If you have a nagging desire to dig in and understand how all of this data and information pertains specifically to you and your club, it is now possible given the collaboration between CMAA and Club Benchmarking. Compensation and benefits surveys, by their nature, tend to present a micro view mainly centering on position-by-position compensation and benefits details. While this report certainly does that, it also rises above the micro to the macro and strategic view by presenting analysis and data from the club’s perspective, considering key ratios resulting from expenses related to the most important asset in any club – its staff. If you seek a strategic view of staffing expenses, Section VI will be of great interest. Care and effort has been taken throughout this report to make the analysis and data as relevant as possible for every reader. Attempts have been made to break new ground by presenting logical and detailed analysis based on the business results of the club. Every reader should find highly relevant benchmarks in the report, which can be further supplemented by accessing the Club Benchmarking online platform. Significant effort has been made in the data analysis to illuminate variations in results. There is more meaning in understanding what drives the variation in data than in focusing on any one data point. Readers will likely find this report to be more graphical and less textual than prior reports. Conclusions are drawn in many places. In others, the statistical distribution of data is presented and the conclusions are left to the reader. Key Overall Conclusions There is significant variation in the compensation of the Head of the Club. The data clearly indicates the main factor affecting compensation is the size of club. The analysis presented in the 2013 Compensation and Benefits Report shows that geographic location has almost no effect on compensation. This year’s report presents further evidence that Head of Club compensation is tied to the size of the club. One of the most critical Key Performance Indicators (KPI) in a club is the ratio of Total Payroll to Operating Revenue. Significant analysis of this ratio by club type (clubs with and without golf) and size is presented.

Health care expense as a percentage of total payroll fluctuated the slightest bit, decreasing to 6.1 percent at the median in 2014. In the 2013 survey, health care expense as a percentage of total payroll was 6.2 percent at the median. In the past three or four years, clubs have begun to shift the cost of health care to the employee through an increase in deductibles and maximum out of pocket. Section VII presents this analysis very clearly. Detailed compensation, benefits and demographic data is presented in a standard comprehensive template for every position for which fifty or more responses were received. This report can become a club-wide resource as a result. See these templates located within the Head of Club, Executive Positions and Salaried Staff sections.

Section V – Observations Regarding the Head of Club (HOC) The Head of Club (HOC) position is defined as the person in the club holding the highest of the three titles: CEO/GM, COO/GM or GM (Club Manager and/or Clubhouse Manager are not included). The percentage of respondents defined as Head of Club hold the following titles:

Title Distribution

CEO/GM 7 percent

COO/GM 40 percent

General Manager 53 percent The survey gathered data for Head of Club positions across the industry by using a standardized template to simplify the data gathering process. Presentation of the resulting responses for the standardized template requires one page, further observations regarding the Head of Club position follow. Please note: In certain sections where bonus and benefits are presented, you will find that the Total Compensation statistics do not total. Statistically, each of the benefits line items is taken as a standalone so the percentile calculations are only for those receiving the given benefit, meaning they do not take into account the “zeros” for those employees not receiving the benefit. Therefore the totals won’t match the sums of the given column. However, the Total Cash Compensation and the Total Compensation line items accurately reflect the statistical distribution of those two metrics.

Head of Club (HOC) 25th Percentile 50th Percentile 75th Percentile

Cash Compensation Base Salary $125,000 $155,000 $200,000 Cash Bonus $10,000 $20,000 $37,909

Total $135,000 $178,000 $237,258 Professional Development

Investment on Behalf of Employee $3,000 $5,000 $8,000

Tenure Years in Profession 13 20 26

Years at Current Club 3 7 11 Years in Current Position 2 5 10

Demographics Age 46 years 52 years 57 years

Gender Male (92%) Female (8%)

Highest Level of Education

Technical/Professional School (2%) High school graduate (4%) One to three years of college (13%) College Graduate two-year degree (5%) College Graduate four-year degree (61%) Graduate work or degree (13%) Other (1%)

Certification

CCM (77%) CCE (21%) MCM (2%) CHAE (1%) CHTP (0%) ACF (chef) (0%) PGA Certified (13%) USPTA/PTR (0%) CGCS (1%) Other (11%)

Which Factors Affect Employee’s Cash Bonus?

No Cash Bonus Offered (5%) Profit (46%) Holiday Bonus Fund (13%) Increased Membership (34%) Member Satisfaction (63%) Budget Goals (72%) Board Discretion (76%) Supervisor Discretion (12%) Other (7%)

Which Expenses Does Club Pay on Behalf of Employee?

Chapter Dues (96%) Annual Conference Expenses (Employee) (91%) Annual Conference Expenses (Spouse) (26%) Workshop Expenses (67%) Business Management Institutes (43%) Other 1-week Education Programs (19%) Chapter Meeting Expenses (Employee) (81%) Chapter Meeting Expenses (Spouse) (17%) CMAA Leadership/Legislative Conference (32%) CMAA Wine Society Dues (19%) Professional Magazines (61%) Trade Show Attendance (41%) Premier Club Services Subscription (36%) CMAA Marketplace Resources (28%) Mid-Management Conferences (6%)

Head of Club (HOC) Contract and Evaluation Forty-six percent of respondents indicated they are under contract with the distribution of contract duration as shown in Figure 1 below. Figure 1 – Contract Duration for Head of Club

Sixty-five percent of HOCs indicated they received a written performance evaluation with the following responses as to who performed the evaluation:

Title Distribution Club President 35 percent Board/Executive Committee 56 percent Management Company 5 percent Other 4 percent

Compensation Analysis The data below delves further into the compensation of the HOC as it relates to several factors. Analysis on the CEO/GM position is not included because too few responses were collected. Table 1 presents median base salary compensation data for the Head of Club. Table 1 – Median Base Salary Data

Title All Respondents COO/GM $170,000

General Manager $140,000 Table 2 illustrates median base salary compensation data by title for clubs with golf for each of the smaller and larger market segments. Table 3 presents the distribution of base salary compensation data for clubs without golf. Further analysis on compensation trends is covered in the following Drivers of Compensation section. Table 2 – Median Base Salary Data by Revenue Market Segment – Clubs With Golf

COO/GM GM Small and Lower Mid- Market Segments Less Than $6 Million $132,500 $120,500

Upper Mid-Market and Large Segments More than $6 Million $207,800 $185,632

Table 3 – Distribution of Base Salary – Clubs Without Golf

COO/GM GM 25th Percentile $136,625 $102,325 Median $164,331 $136,250 75th Percentile $201,250 $173,500

Drivers of Compensation In the 2013 and 2012 reports there was significant analysis of the factors that drive the compensation for the Head of Club. In those two reports data was presented that led to a clear conclusion that compensation has little to do with geographic location and everything to do with the size of a club. Managers are not compensated based on where they are located, but rather they are compensated based on the size of the operation they manage. In simplest terms, the larger the club, the higher the compensation for the manager. For more insight on drivers of compensation, see Club Benchmarking’s Executive Compensation in the Private Club Industry White Paper located at Appendix II.

Figure 2 presents the distribution for Total Compensation as a Percentage of Operating Revenue for all clubs. The distribution shows that approximately 67 percent of reporting clubs allocate between two and four percent of Operating Revenue (operating revenue is exclusive of all capital income) to the Head of Club’s Total Compensation. This is a very “tight” distribution. While there is also a tight correlation in the ratio of Compensation to Available Cash, Operating Revenue seems a more appropriate measure as management efforts relate to activity as opposed to gross profit. Figure 2 – Total Compensation for HOC as a Percentage of Operating Revenue – All Clubs

Analysis of the clubs with Compensation to Operating Revenue Ratio exceeding four percent was undertaken. Certain metrics related to that analysis are presented in Table 4. The clubs with a ratio of Head of Club Compensation to Operating Revenue exceeding four percent tend to be the smaller clubs, which seems quite logical. In the end, there is a baseline or “de minimis” market rate for expected compensation and the smaller clubs must pay it regardless of their level of revenue. Table 4 shows that clubs without golf (yacht and small city clubs) have a higher proportion of operating revenue going to Head of Club compensation. Even smaller clubs with golf are falling close to the four percent ratio.

Table 4 – Analysis of Head of Club Compensation to Operating Revenue

Median

Operating Revenue

% of Clubs Without Golf

Median HOC Comp. to Revenue

Ratio – All Clubs


Ratio – Clubs With Golf


Ratio – Clubs Without Golf

Clubs with Ratio Equal to or Less Than 4%

$7,117,742 11% 2.7% 2.7% 2.6%

Clubs with Ratio More Than 4% $3,791,677 30% 4.8% 4.5% 5.5%

Overall, the “sweet spot” of Head of Club Compensation tends toward Total Compensation including all benefits in the range of two and a half to four percent of Operating Revenue. Generally speaking, clubs that have a ratio under two percent tend to be larger clubs and clubs that have a ratio over four percent tend to be smaller. Another observation is that the ratio has been clearly trending downward over the last four years as shown in Table 5 below. A logical conclusion may be that overall revenue is increasing at a rate greater than Head of Club compensation. Table 5 – Distribution of Total Compensation for HOC as a Percentage of Operating Revenue – Last Four Years

Year 25th Percentile Median 75th Percentile 2011 2.76% 3.40% 4.28% 2012 2.51% 3.20% 4.07% 2013 2.37% 3.06% 3.74% 2014 2.39% 3.02% 3.78%

Also driving Head of Club compensation is level of certification. Table 6 presents the percentile breakouts of HOC total compensation relative to level of certification. As can be seen below, at the median, a CCM certified HOC makes 18 percent more than an HOC with no certification, versus a CCE certified HOC making 38 percent more than an HOC with no certification. Also at the median, a CCE certified HOC makes 17 percent more than a CCM certified HOC. Table 6 – Analysis of Head of Club Total Compensation Distribution Relative to Level of Certification

25th Percentile Median 75th Percentile CCE Certification $165,053 $227,750 $347,913 CCM Certification $157,227 $195,021 $253,494 No Certification $125,227 $164,750 $228,118

Section VI – Operational Analysis Regarding Staffing Compensation and Expenses Understanding compensation must begin with a Key Performance Indicator (KPI) – the ratio of Total Payroll to Operating Revenue. Figure 3 shows the distribution for this KPI for clubs with golf and Figure 4 shows the distribution for clubs without golf. This ratio has been previously shown to be independent of geographic location, the size of the club (meaning revenue) or whether or not a club has union labor. As can be seen from both Figure 3 and 4, the distribution is very “tight” (on the percentile scatter plots used by Club Benchmarking a flatter line without tails at the ends correlates to a tight bell curve with a normal distribution which indicates less statistical variation). The Payroll to Operating Revenue ratio is one of the tighter distributions in the database. The logic is simple yet compelling; payroll is restricted by the amount of money available from operations (including dues revenue). Generally, in locations such as large metropolitan cities where pay is likely higher, so too are prices for operating revenue items such as dues, F&B and guest rooms. The relationship drives a law of proportionality. One variation in the ratio that does exist is between clubs with golf and clubs without golf. Two factors drive the difference in the ratio in the two club types. First, in clubs without golf, the F&B labor to F&B revenue ratio is lower (see Figures 5 and 6). Second, in clubs with golf, the gross profit (as denoted by the ratio of Available Cash to Operating Revenue) is higher (there are a number of reasons for this which are beyond the scope of this analysis). Figures 7 and 8 present the Available Cash to Operating Revenue ratio for clubs with and without golf respectively. The excess gross margin from a higher ratio allows for additional payroll (mainly to maintain the golf course and to operate the golf shop).

Figure 3 – Payroll to Operating Revenue Ratio – Clubs With Golf

Figure 4 – Payroll to Operating Revenue Ratio – Clubs Without Golf

Figure 5 – F&B Payroll to F&B Revenue Ratio – Clubs With Golf

Figure 6 – F&B Payroll to F&B Revenue Ratio – Clubs Without Golf

Figure 7 – Available Cash to Operating Revenue Ratio (Gross Profit) – Clubs With Golf

Figure 8 – Available Cash to Operating Revenue Ratio (Gross Profit) – Clubs Without Golf

Another interesting point of analysis regarding the operational view of compensation and benefits is to take a look at how much people are paid. Club Benchmarking collects the Full Time Equivalents (FTE) across the various club departments as well as for the club overall. FTEs will become a common part of the language over the next several years as it is a key aspect of the Affordable Care Act (ACA) for health care. The ACA uses FTEs as a way to determine which business must adhere to the law. “FTEs” as used in the operational definition in the CMAA/Club Benchmarking Survey does not mean exactly the same thing as in the ACA. Our use of FTE is very simple and focused on operations: one FTE equates to one person working forty hours per week for the entire year (2,080 hours). In any case, Cost per FTE is a relative measure of how much people are paid. Figure 9 and Figure 10 present the Cost per FTE for clubs with less than $6 million and more than $6 million in operating revenue respectively. As can be seen from the two charts, people are paid slightly more in larger clubs. But as Figures 11 and 12 shows, both club segments have nearly identical Payroll to Operating Revenue Ratios. All of these charts can be used to zero in on your own club’s relative pay in terms of Cost per FTE. Figure 9 – Cost per FTE – Clubs With Less Than $6 Million in Operating Revenue

Figure 10 – Cost per FTE – Clubs With More Than $6 Million in Operating Revenue

Figure 11 – Payroll to Operating Revenue – Clubs With Less Than $6 Million in Revenue

Figure 12 – Payroll to Operating Revenue – Clubs With More Than $6 Million in Revenue

There are a number of key takeaways from this section: 1. Given that payroll is the largest operational expense of any club, it requires a deep understanding

and benchmarking is a very strategic and insightful approach to understanding your club in relation to the norms.

2. Generally speaking, as presented in this year and previous years’ reports, people are more highly

compensated at clubs with higher revenue. 3. The Key Performance Indicator “Payroll to Operating Revenue Ratio” is one of, if not the most

critical operational KPIs. The ratio is very consistent across club size and geographic location. There is variation in the metric based on whether the club has golf or not. It is lower in clubs without golf in keeping with the lower Available Cash to Operating Revenue Ratio (Gross Profit) and the lower F&B Labor to F&B Revenue ratio in clubs without golf.

Section VII – Health Insurance Analysis This section analyzes the responses to the Health Insurance section of the survey. Club Benchmarking subscribers can filter the data to precisely produce a health care benchmark report for clubs similar to their own. This year the analysis is directed towards deciphering changes that may be emerging as a result of the Affordable Care Act. It appears a few can be discerned. As a starting point, Figures 13 through 16 are presented.

Figure 13 – Total Health Care Expense as a Percentage of Payroll – 2013 Survey Report

Figure 14 – Total Health Care Expense as a Percentage of Payroll – 2014 Survey Report

Figure 15 – Total Health Care Expense per Full Time Equivalent – 2013 Survey Report

Figure 16 – Total Health Care Expense per Full Time Equivalent – 2014 Survey Report

Review of the charts shows that both health care expense as a percentage of total payroll and health care expense per FTE have remained fairly consistent year-over-year. Whereas last year's report would have indicated salary and other payroll costs increased at a greater rate than the costs associated with health care, these figures flattened out in the current year. Further analysis will provide the clue as to how clubs are responding to changes in the macro health care environment. Figures 17 through 24 present Individual and Family maximum deductibles and maximum out-of-pockets. It is very clear that there has been a fairly significant shift towards higher deductibles and out-of-pockets to the employee and the employee’s family. This shift helps to manage the premiums, which have not changed in any material way over the two years. The conclusion is clear: Clubs are managing premium expense by moving more of the burden to the employee.

Figure 17 – Maximum Deductible Family Plan – 2013 Survey

Figure 18 – Maximum Deductible Family Plan – 2014 Survey

Figure 19 – Maximum Deductible Individual Plan – 2013 Survey

Figure 20 – Maximum Deductible Individual Plan – 2014 Survey

Figure 21 – Maximum Out-of-Pocket Individual Plan – 2013 Survey

Figure 22 – Maximum Out-of-Pocket Individual Plan – 2014 Survey

Figure 23 – Maximum Out-of-Pocket Family Plan – 2013 Survey

Figure 24 – Maximum Out-of-Pocket Family Plan – 2014 Survey

Section VIII – Executive Position Data The survey gathered data for Executive Positions across the club by using a standardized template to simplify the data gathering process. Presentation of the resulting responses for the standardized template requires one page for each position. The Executive Positions for which the data was gathered include: Chief Financial Officer, Executive Chef, Golf Course Superintendent, Director of Golf, Head Golf Professional and Head Tennis Professional. Please note: In certain sections where bonus and benefits are presented, you will find that the Total Compensation statistics do not total. Statistically, each of the benefits line items is taken as a standalone so the percentile calculations are only for those receiving the given benefit, meaning they do not take into account the “zeros” for those employees not receiving the benefit. Therefore the totals won’t match the sums of the given column. However, the Total Cash Compensation and the Total Compensation line items accurately reflect the statistical distribution of those two metrics.

Chief Financial Officer 25th Percentile 50th Percentile 75th Percentile






Demographics Age 46 years 52 years 57 years



Technical/Professional School (1%) High school graduate (1%) One to three years of college (1%) College Graduate, two-year degree (1%) College Graduate, four-year degree (68%) Graduate work or degree (27%) Other (0%)

Certification

CCM (9%) CCE (0%) MCM (0%) CHAE (19%) CHTP (4%) ACF (chef) (0%) PGA Certified (0%) USPTA/PTR (0%) CGCS (0%) AFPA Certified (0%) CPA (89%) Other (15%)




Chapter Dues (85%) Annual Conference Expenses (Employee) (73%) Annual Conference Expenses (Spouse) (10%) Workshop Expenses (37%) Business Management Institutes (12%) Other 1-week Education Programs (9%) Chapter Meeting Expenses (Employee) (58%) Chapter Meeting Expenses (Spouse) (3%) CMAA Leadership/Legislative Conference (6%) CMAA Wine Society Dues (0%) Professional Magazines (28%) Trade Show Attendance (13%) Premier Club Services Subscription (1%) CMAA Marketplace Resources (3%) Mid-Management Conference (3%)

Executive Chef 25th Percentile 50th Percentile 75th Percentile



Investment on Behalf of Employee $750 $2,000 $3,500



Demographics Age 38 45 51




Certification






Golf Course Superintendent 25th Percentile 50th Percentile 75th Percentile










Certification






Director of Golf 25th Percentile 50th Percentile 75th Percentile







Gender

Male (99%) Female (1%)



Certification






Head Golf Professional 25th Percentile 50th Percentile 75th Percentile










Certification






Head Tennis Professional 25th Percentile 50th Percentile 75th Percentile










Certification






Assistant General Manager 25th Percentile 50th Percentile 75th Percentile










Certification






Section IX – Salaried Staff Data The survey gathered data for salaried positions across the club by using a standardized template to simplify the data gathering process. Presentation of the resulting responses for the standardized template requires one page for each position. The salaried positions for which the database contains data include: Assistant General Manager, Clubhouse Manager, Food and Beverage Director, Catering Manager, Director of Technology, Human Resources Director, Membership/Marketing Director, Head of Building Maintenance, Health and Fitness Director, Harbor Master, Boat Yard Manager and Race Director Aquatics/Pool Director, Bar Manager/Head Bartender and Secretary/Administrative Assistant. For the purposes of presenting the most accurate of Salaried Staff Data possible, Club Benchmarking set a minimum response rate of fifty for each individual position. The positions that met that threshold and, therefore, for which data is presented in this year’s report include: Assistant General Manager, Clubhouse Manager, Food and Beverage Director, Catering Manager, Human Resources Director, Controller, First Assistant Superintendent, First Assistant Golf Pro, Membership/Marketing Director, Head of Building Maintenance, Health and Fitness Director and Administrative/Secretary. Please note: In certain sections where bonus and benefits are presented, you will find that the Total Compensation statistics do not total. Statistically, each of the benefits line items is taken as a standalone so the percentile calculations are only for those receiving the given benefit, meaning they do not take into account the “zeros” for those employees not receiving the benefit. Therefore the totals won’t match the sums of the given column. However, the Total Cash Compensation and the Total Compensation line items accurately reflect the statistical distribution of those two metrics.

Clubhouse Manager 25th Percentile 50th Percentile 75th Percentile










Certification






Food and Beverage Director 25th Percentile 50th Percentile 75th Percentile










Certification






Catering Manager 25th Percentile 50th Percentile 75th Percentile







Gender




Certification






Human Resources Director 25th Percentile 50th Percentile 75th Percentile







Gender




Certification






Controller 25th Percentile 50th Percentile 75th Percentile










Certification






First Assistant Superintendent 25th Percentile 50th Percentile 75th Percentile

Cash Compensation Base Salary $40,000 $47,250 $55,000 Cash Bonus $750 $1,500 $2,500









Certification






First Assistant Golf Professional 25th Percentile 50th Percentile 75th Percentile










Certification






Membership/Marketing Director 25th Percentile 50th Percentile 75th Percentile







Gender




Certification






Head of Building Maintenance 25th Percentile 50th Percentile 75th Percentile



Investment on Behalf of Employee $500 $750 $2,000




Gender




Certification






Health and Fitness Director 25th Percentile 50th Percentile 75th Percentile










Certification






Administrative Assistant/Secretary 25th Percentile 50th Percentile 75th Percentile



Investment on Behalf of Employee $0 $200 $500







Certification






Section X – Hourly Staff Data The survey gathered limited and simple wage data for a variety of positions across the club. The data gathered for the hourly positions included the lowest hourly rate, the highest hourly rate and the typical hourly rate for each of the positions. The rates include an estimate of tips where applicable. Hourly positions for which wage data was gathered include: Course Maintenance/Grounds Skilled, Course Maintenance/Grounds Laborer, Building Maintenance Staff, Swim Attendant, Bartender, Housekeeping, Wait Staff, Bus Staff and Cooks. The Hourly position data follows in Table 6. Table 7 – Hourly Staff Wage Distribution

Position Median Across Employees For

Lowest Hourly Wage

Typical Hourly Wage

Highest Hourly Wage

Course Maintenance/ Grounds Skilled $11.75 $14.00 $17.50

Course Maintenance/ Grounds Laborer $9.00 $10.50 $13.00

Building Maintenance Staff $12.00 $13.75 $16.75

Lifeguard $8.50 $9.50 $11.42

Bartender $12.00 $14.00 $16.61

Housekeeping Staff $10.00 $11.00 $12.60

Wait Staff $10.00 $13.50 $17.00

Bus Staff $9.00 $10.00 $11.10

Cooks $10.50 $13.50 $16.00

Appendix I – Available Cash White Paper The following is a Club Benchmarking white paper presenting the Available Cash Model. The white paper appears here in its original format with internally consistent Table, Figure and Chart numbering which is distinct from the Compensation and Benefits.

Understanding and Managing Private Clubs Using the Available Cash Model™

Do you have a real grasp of your club’s business model? Every industry has a unique business model and successful enterprises truly understand the prevailing business model and work to refine their own adaptation of it. The private club industry is no different. There is an overarching business model governing our industry and every club in it – the key word being every. Sure, clubs have unique “personalities”, but from a business and operations standpoint every club, regardless of its personality, is subject to the business model of the industry. The following question is a simple test of how well your club grasps the all-important business model. How would you characterize Board level discussion of your Food and Beverage finances?

A. Regularly discussing cost of food, cost of beverage, level of revenue and costs and bottom line in the Board Room.

B. Club budget specifies an annual net income/deficit target for Food and Beverage and monitors progress against that target with minimal F&B financial discussion beyond that in the Board Room.

If you chose “A” there is a major opportunity at your club to more effectively grasp the private club business model and the rest of this white paper will hopefully be a game changer for you and your club. If you chose “B” your club may be acting strategically and the rest of this white paper will serve as further evidence to continue in your ways. Our guess is the vast majority (80 percent+) of clubs, choosing objectively, chose scenario “A”. Unveiling the Private Club Industry Business Model – The Available Cash Model Anybody involved in the club business as a manager, club officer or board member is familiar with the adage “clubs are in the dues business”. This paper moves beyond the slogan to a tangible financial framework that will change the way private clubs are managed. This white paper addresses only the operational business model – we do not investigate capital or balance sheet issues - we will examine those aspects of club finances in the future. Our view of the operational business model excludes initiation fee income which we believe should be considered capital income and separated with great intent from operating monies. Thus, all analysis in this paper excludes consideration of initiation fee income and any capital dues or assessment income.

The key issue in illuminating the operational business model of clubs is – Where does the money to run the club come from and where does it go? No matter how unique your club’s personality is, the sources and uses of cash are common amongst all clubs. Indeed, it is the common sources and uses of cash that frame both the business model and Club Benchmarking’s Available Cash Model. This commonality evolves from “what clubs do” – as opposed to “how they do it”. The “what” is clear – clubs are in business to provide certain amenities to their members. The uniqueness is driven by “how it is done” – some clubs do it with world class service, others with more pedestrian service. Club Benchmarking (CB) has applied the Uniform System of Financial Reporting for Clubs (USFRC) and common sense to develop a logical grouping of functions related to delivering amenities that are common to every club and thus shape the private club business model. As intended in the “clubs are in the dues business” slogan, a key component of the club business model is membership dues revenue. Membership dues revenue is unencumbered cash – there is no cost associated with it. On the other hand, Food and Beverage (F&B) revenue is heavily encumbered by the costs associated with delivering F&B goods and service. The stark distinction between membership dues revenue and F&B revenue serves as a key point in the illumination of the Available Cash Model. In a club, not all revenue is created equally. In fact, a significant share of a club’s revenue contributes nothing to the financial health or the monies required to run the club. The Available Cash Model starts with identifying the sources of operating cash. CB has defined a simple, but standardized, calculation to derive the Available Cash. Table 1 shows the calculation for clubs with and without golf. Table 1 - Available Cash Calculation

Clubs without Golf Clubs with Golf Available Cash Equals Membership Dues Revenue

+ F&B Net = (F&B Revenue – F&B Expenses)

+ Rooms Net = (Rooms Revenue – Rooms Expenses)

+ Other Net = (All Other Operating Revenue – All Other Operating Expenses)

+ Sports Revenue = (Racquet Revenue + Fitness Revenue + Aquatics Revenue)

+ Yachting Net (Yachting Revenue – Yachting Expenses in Yacht Clubs)

Available Cash Equals Membership Dues Revenue

+ F&B Net = (F&B Revenue – F&B Expenses)

+ Rooms Net = (Rooms Revenue – Rooms Expenses)

+ Other Net = (All Other Operating Revenue – All Other Operating Expenses)

+ Sports Revenue = (Racquet Revenue + Fitness Revenue + Aquatics Revenue)

+ Golf Operations Net = (Golf Operations Revenue – Golf Operations Expenses – Golf Operations Labor)

The fundamental concept is to isolate the operating cash available to run the club. The cash emanates mainly from membership dues revenue which is increased or decreased by the bottom-line operational results flowing from each of the main departments in the club. F&B net, Rooms net, Yachting net (for yacht clubs) Other net (Other Operating Revenue less Other Operating Expenses), and Rooms net (for clubs with rooms). Non-Golf Sports revenue is considered unencumbered available cash as the expense of maintaining those facilities is considered fixed regardless of usage. Therefore revenue generated via those facilities is viewed as unencumbered. A few statistics from the CB database will move the analysis from theory to practice. The median for operating revenue across the 674 clubs in the CB database (at the time of writing this report) is $5,200,000 (excluding initiation fee and capital dues income), while the median Available Cash is $3,060,000 or 58 percent of the revenue. F&B provides 27 percent of revenue at the average club accounting for most of the difference between revenue and Available Cash. Operationally, Available Cash is destined to be “used” by only a few departments that are not considered in the net calculations for each of the main departments. These few departments are common to every club. Table 2 shows Club Benchmarking’s standardized uses of cash. Table 2 - Uses of Available Cash

Clubs without Golf Clubs with Golf

General and Administrative Buildings and Maintenance Sports (Racquets, Aquatics, Fitness, Spa) Fixed Expenses (Real Estate Taxes, Property and Liability Insurance, Interest Expense)

General and Administrative Buildings and Maintenance Non-Golf Sports (Racquets, Aquatics, Fitness, Spa) Fixed Expenses (Real Estate Taxes, Property and Liability Insurance, Interest Expense) Course Maintenance Golf Operations Labor (other Golf Ops expenses are netted in Available Cash calculation)

The Common Business Model The business model that unites all clubs is the Available Cash Model. Clubs derive and consume Available Cash in a similar manner regardless of geographic location, type of club, quality of club or size of club. The potential sources and uses of cash are identical. All clubs derive the majority of cash necessary to run the club from dues - the average club in the CB database derives 78 percent of its Available Cash from dues revenue. The great variation that exists from club to club due to banquet revenue or class of service or club personality (high service, marginal service) is “standardized” in the common business model by adding or subtracting the net income or deficit from F&B from the Available Cash bucket.

Every club has a G&A function, buildings and maintenance expenses, fixed expenses (in the form of insurance, real estate taxes and possibly interest expenses) and 97 percent of all clubs in the CB database have some form of non-golf sports. These are the few, standardized uses of Available Cash at all clubs. The key benchmarking concern in comparing your club’s Available Cash to a peer set is the proportional distribution of sources and uses of cash, and the ratio of Available Cash to the total operating revenue of the club. The best way to describe this is to use real data. As a starting point, please refer to Charts 1 – 4. Chart 1 and Chart 2 show the proportionate uses of Available Cash for clubs with golf and less than $6,000,000 in total revenue (Chart 1) and more than $6,000,000 in revenue (Chart 2). A couple of variations worth noting are the percentage of Available Cash used for course maintenance and non-golf sports. The smaller revenue clubs use a slightly higher portion of their Available Cash to maintain the course and expend a slightly lower portion on supporting non-golf sports. As you can see, the remaining uses of cash are almost identical. Chart 3 and 4 show the same distributions for the sources of Available Cash and they also are almost identical.

Chart 1 - Average Proportionate Uses of Cash – Clubs < $6.0 Million Revenue

All charts in this paper were produced directly from Club Benchmarking. Users can produce these charts in the Available Cash report and many others across a range of reports.

Chart 2 - Average Proportionate Uses of Cash – Clubs > $6.0 Million Revenue

Chart 3 - Average Proportionate Sources of Cash – Clubs < $6.0 Million Revenue

Chart 4 - Average Proportionate Sources of Cash – Clubs > $6.0 Million Revenue

Charts 5 – 8 show the same information for clubs without golf. As you can see, the proportionate uses do not vary substantially and the sources vary in that the larger clubs without golf tend to have more rooms and a profit from their rooms operation that contributes to Available Cash. Chart 5 - Average Proportionate Uses of Cash – Clubs < $6.0 Million Revenue (No Golf)

Chart 6 - Average Proportionate Uses of Cash – Clubs > $6.0 Million Revenue (No Golf)

Chart 7 - Average Proportionate Sources of Cash – Clubs < $6.0 Million Revenue (No Golf)

Chart 8 - Average Proportionate Sources of Cash – Clubs > $6.0 Million Revenue (No Golf)

Understanding the business model of the industry at large is the first step in gaining strategic control of your club’s finances. Clubs may have different personalities and different scale, but they all have the same simple, business model properly viewed with Club Benchmarking’s Available Cash Model. Club Benchmarking members successfully use CB’s Available Cash Report to easily identify disproportionate uses and sources of cash pointing to anomalies in their club’s business model relative to their peers and the industry at large. Once an anomaly is indicated in your club’s benchmark, detailed department level metrics can be used to diagnose the root cause (e.g. G&A headcount is too high, Member dues revenue is too low, etc.). This process allows for diagnosis at the business model level and correction at department level where actions can be concrete, rapid, and measurable. The Common Business Model and Geography “Conventional Wisdom” may lead one to believe that the business model for clubs varies based on where a club is located. The factual data points to an opposite conclusion. The data clearly shows the common business model is independent of geography which can have significant, positive implications for strategic benchmarking in that you don’t have to compare your club to a few clubs next door. You can compare your club’s business model to many clubs nationally. Table 3 summarizes certain data from the CB database regarding key attributes of the Available Cash Model – as can be seen there is only marginal variation region to region and it is logical to conclude the data supports the thesis of a common club business model which is represented well by the Available Cash Model.

Table 3 - Regional Analysis – Key Available Cash Metrics

National Northeast So. East Midwest So. West West AC as % of Operating Revenue 58% 57% 60% 56% 58% 58% Net AC as % of AC -2% 2% - 2% 0% -2% -3% Net F&B Income as % of AC -2% 0% -6% 0% -3% -4% Course Maintenance as % of AC 36% 32% 36% 31% 34% 41% Golf Operations as % of AC 10% 10% 10% 10% 11% 11% G&A as % of AC 26% 27% 26% 28% 25% 26% Non Golf Sports as % of AC 8% 6% 10% 6% 8% 5% Buildings and Maintenance as % of AC 15% 16% 14% 16% 13% 15%

Fixed Expense as % of AC 10% 12% 9% 12% 9% 8% Interest Expense as % of AC 3% 4% 3% 5% 3% 2%

The Bottom Line In addition to understanding sources and uses of Available Cash it is necessary your club can quantify both the amount of its Available Cash and its Net Available Cash. Net Available Cash is the difference between your Available Cash and the total Uses of Cash for operations. The total Uses of Cash = G&A + Non-Golf Sports + Fixed Expenses + Buildings and Maintenance + Golf Course Maintenance + Golf Operations Labor (in clubs with Golf). Chart 9, from Club Benchmarking’s Available Cash report, shows the distribution of Available Cash and Net Available Cash across the spectrum of clubs in CB’s database for the year 2010. As you can see, the median club has a Net Cash result of -$31,024 – a small burn into either capital income or reserves. One quarter of the clubs had a significant operating cash burn of more than -$322,731 (the 25th percentile) while one quarter of the clubs generated more than $317,550 (the 75th percentile). The two circular data points on Chart 9 show one particular club’s Available Cash and Net Available Cash. Clearly, this club has a serious problem with their Net Available Cash as indicated by the -$663,478 burn. The club’s capital assessment and initiation fee income had masked the operational problem that was uncovered in minutes using the CB Available Cash Report. This same club had a modest loss of $50,000 in F&B in 2010 and the board was worked into fervor over the loss. Unfortunately, they were focused on the wrong issue.

Chart 9 - Available Cash and Net Available Cash – All Clubs

Chart 10 shows the distribution of the ratio of F&B Net to Available Cash for the clubs in CB’s database. As can be instantly discerned, the F&B bottom line across the industry is a very small percentage of the Available Cash required to run the club. While you can’t let F&B run amok, it has little to do with a club’s financial health. Seventy percent of clubs (70 percent) have an F&B bottom line that that contributes less than +/- 10 percent to the club’s Available Cash. Clearly, board meeting dialogue concerning F&B is not in balance with this fact.

Chart 10 - F&B Income/Loss as a Percentage of Available Cash – All Clubs

Shifting the Dialogue The primary issue in embarking on a strategic dialogue of your club’s finances is nailing down your Available Cash Sources, Uses and Net Available Cash and benchmarking each of them to the industry at large and certain peer sets. This task is straightforward and immediate if you subscribe to Club Benchmarking. If you chose Answer A to the question at the beginning of this paper, it is strongly suggested you do an Available Cash Analysis, most simply by using CB and its automated Available Cash modeling. If you find your club’s Net Available Cash in a negative position or you find an imbalance in the proportionate uses of your Available Cash you will have done your club and its members a great service. You will have decisions to make regarding increasing your Available Cash or allocating it in a different manner, but you will have immediately shifted the dialogue from the tactical F&B centric discussion to the strategic Available Cash Sources and Uses discussion. Your club will be on the right track.

Appendix II – Executive Compensation in the Private Club Industry White Paper The following is a Club Benchmarking white paper presenting an analysis on executive compensation in the private club industry, specifically the drivers of executive compensation. The white paper appears here in its original format with internally consistent Table, Figure and Chart numbering which is distinct from the “2014 Compensation and Benefits Report.”

Executive Compensation in the Private Club Industry One of the most firmly held beliefs in the club industry is that executive compensation is directly related to the club’s geographic location. Historically, the general assumption has been that a General Manager in metropolitan New York, for example, would automatically expect to be paid more than a manager employed in a smaller rural area based on higher cost of living in his or her area. This in-depth analysis was undertaken in order to explore that tenet and illuminate what does or does not drive compensation in clubs. The analysis is intended to advance our understanding of the complete club business model and to either verify or challenge conventional wisdom as it relates to benchmarking compensation in private clubs. The Basis In every industry, there are a wide variety of factors which affect compensation, and the club industry in no exception. These factors include:

• Individual characteristics such as experience, education, age, tenure

• Club characteristics regarding scope and scale such as number of employees, amount of revenue, member service and quality expectations and the club’s financial and operating results

• External factors represented mainly by geographic location and cost of living

External Factors As a starting point in our executive compensation research, an analysis of the impact of cost of living on compensation was undertaken. To that end, the Club Benchmarking database of Head of Club compensation from more than 400 clubs was interrogated to isolate the fifty highest and fifty lowest paid General Managers in the data set. A Cost of Living Index (COLI) from the Bureau of Labor Statistics was then assigned to each of the one hundred clubs based on each club’s location. The results of that in-depth analysis are presented in Table 1.

Table 1. Analysis of Variance in General Manager Compensation

Fifty Lowest

Paid GMs Fifty Highest

Paid GMs Variance Average Salary $94,234 $289,435 +207% Median Salary $99,500 $271,814 +173% Average Cost of Living Index 102 119 +17% Median Cost of Living Index 100 112 +12%

# of Managers in COLI Zones <128 50 (100%)

36 (72%)

Average Club Revenue $3,820,000 $16,316,000 327% Median Club Revenue $3,138,000 $12,369,000 294%

Looking at Table 1, we can see that 72 percent of the highest paid General Managers in the country are located in Cost of Living zones equal to or lower than the lowest paid GMs. Additionally, the minor variation in average COLI and median COLI between the 50 highest and lowest paid managers would quickly lead to the conclusion that compensation of GMs is independent of cost of living as related to geographic location. This leads us to further exploration in search of factors that drive compensation in clubs. The next step is to study the effect of characteristics of the individual executive and characteristics of the club on compensation. Club Characteristics

Table 2. Analysis of Variance in Club Characteristics Fifty Lowest Paid GMs Fifty Highest Paid GMs Variance Average Salary $94,234 $289,435 +207% Median Salary $99,500 $271,814 +173% Average Peak Employee Count

82 244 +198%

Median Peak Employee Count

76 223 +193%

Average Full Time Equivalents

37 166 +349%

Median Full Time Equivalents

40 149 +273%

Recruit National Talent for Executive Team

16% 74%

Average Club Revenue $3,820,000 $16,316,000 327% Median Club Revenue $3,138,000 $12,369,000 294%

Individual Characteristics

Table 3. Analysis of Variance in Individual Characteristics Fifty Lowest

Paid GMs Fifty Highest Paid

GMs Variance Average Salary $94,234 $289,435 +207% Median Salary $99,500 $271,814 +173% Average Age 49 55 Median Age 49 55 Average Industry Tenure 18 26 Median Industry Tenure 16 25 % with 4-Year College Degree 64% 81%

Tables 2 and 3 indicate that as a group the 50 highest paid GMs are older, more experienced, better educated and are leading much larger and broader clubs in terms of revenue. The 50 highest paid GMs on average are being paid three times the 50 lowest paid GMs and running operations that are three times the size and complexity. Conclusion: Compensation of GMs correlates directly to the size and complexity of a club while showing very little correlation to geographic location or cost of living. One further indicator of this fact is shown in Figure 1 below. Ultimately, there is a correlation for compensation of the Head of Club in relation to Operating Revenue as the distribution below shows. Clubs that are in the upper quartile – with a ratio higher than 4 percent are analyzed in Table 4. They tend to be clubs that are smaller. There is a base level compensation for a Head of Club, one might refer to it as the “ante” and as a result the smaller clubs have to bear a higher burden.

Table 4.

Median Operating Revenue

% of Clubs Without Golf

Median HOC Comp. to

Revenue for All Clubs

Median HOC Comp. to

Revenue for Clubs with

Golf

Median HOC Comp. to

Revenue for Clubs w/out

Golf Ratio Equal to or Less Than 4% $7,703,572 10% 2.8% 2.8% 2.8%

Ratio More Than 4% $3,815,677 34% 4.9% 4.6% 5.6%

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