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In recent years, the National Association of Realtors (NAR) has been plagued by a series of missteps and scandals that have left members questioning the organization’s leadership and integrity. From resolving disastrous lawsuits and costly settlement agreements to enforcing poorly thought-out policies and rules, the organization’s leadership has demonstrated a pattern of neglect and mismanagement.
A recent multi-million dollar settlement resulting from an antitrust lawsuit is one example of how NAR’s actions, or failure to do so, may cost its members both financially and reputationally. It doesn’t work.
Here, yet another glaring problem becomes apparent. That is the exorbitant salaries paid to NAR’s so-called “volunteer” leaders. This issue is not just ethically questionable, but emblematic of a culture of waste and entitlement that is entrenched within NAR’s leadership.
How can an organization justify paying six-figure salaries to “volunteers” while its members endure rising dues and declining trust? This is an example of the corruption that has brought the NAR to this point. Yes, it has an impact that cannot be ignored.
Top 6 Compensated Leaders in 2022: Salaries that ignore volunteerism.
The lack of transparency regarding NAR leadership salaries (ironic for an organization that advocates transparency in real estate commissions) has made it difficult to find compensation details for 2023 or 2024. However, based on NAR’s Form 990 filing, NAR’s 2022 leadership compensation structure is clear. The boundaries between volunteer work and paid professional roles have become blurred.
The top six paid individuals in “volunteer” or leadership positions are:
Leslie Ruda Smith (NAR Chairman): $413,556 Kenny Purcell (President-elect): $265,956 Bill Markassian (Former Board Member): $256,951 Dale Stinton (Former Board Member/Consultant): $250,000 Nancy Lane (NAR Treasurer: $212,356 Tracy Kasper (First Vice President) ):Charles Opler (immediate past president): $162,344
Do these “volunteers” earn more than the real estate industry?
When the high salaries paid to NAR leaders first came to light, NAR spokesperson Mantil Williams said these individuals were “raising their hands in service to the industry.” He defended the compensation, saying it required “significant time commitment, personal sacrifice and significant travel.”
This may sound noble, but it doesn’t address the underlying problem. In other words, are these “volunteers” making more money in their NAR roles than they did through their real estate careers?For many, the answer is yes.
With salaries exceeding hundreds of thousands of dollars per year, it’s hard to argue that these roles match the typical definition of volunteer work. If it’s such a burden to take time away from real estate to serve an association, as Williams says, then perhaps you shouldn’t volunteer in the first place.
With 1.5 million members, there are certainly successful and talented real estate agents who can contribute to the industry without demanding excessive compensation. Moreover, if the real estate business of these leaders is too poor to warrant a temporary withdrawal, it raises serious questions about their qualifications to manage the state apparatus.
The right leaders for NAR are those who demonstrate a true dedication to serving the industry, rather than individuals who treat these roles as opportunities for personal enrichment.
A recent investigation uncovered multiple instances of lavish spending by National Association of Realtors (NAR) leadership, raising concerns about the organization’s financial practices. Confirmed expenditures include:
Broadway Show Tickets: NAR leaders purchased tickets for themselves and their relatives to popular Broadway shows such as “Hamilton” while attending a conference in New York City. First Class Tickets: Executives and high-ranking leaders frequently reserved first class tickets for both themselves and their spouses during official travel. Fancy Dinner: The NAR credit card was used to pay for an expensive dinner that included a $300 wine purchase. Tickets to sporting events: Coaches received complimentary tickets to a Chicago Cubs-Blackhawks game during their stay in Chicago. Spa treatments and golf outings: Business credit cards were used to pay for spa treatments and golf outings during business trips.
These expenditures have drawn severe criticism from nonprofit organizations, raising serious questions about the appropriateness of such expenditures for tax-exempt organizations. Experts have suggested such actions could violate tax laws that prohibit nonprofit employees and leaders from using funds for personal gain.
Once again, NAR leadership is paving the way for another lawsuit, this time with the IRS. As a nonprofit organization under Section 501(c)(6) of the Internal Revenue Code, NAR is strictly prohibited from using members’ dues for personal luxuries such as massages, golf, and Broadway shows.
This blatant misuse of funds not only undermines member trust, but also poses significant legal and financial risks to the organization.
Why is this important?
NAR’s leadership compensation structure is clearly an outlier, raising serious questions about the organization’s priorities and accountability. The stark disparity between NAR and other associations calls into question NAR’s nonprofit mission and whether members’ dues are being used effectively.
When our leaders are paid more than the average real estate agent, it undermines the credibility and integrity of our organization.
To revisit Williams’ point about the sacrifices NAR leaders are making to fill their positions, consider other professional associations. The American Bar Association, American Medical Association, and American Psychological Association all represent highly skilled and busy professionals and have structured their organizations to allow volunteers to serve without pay. If doctors and lawyers can volunteer their time to lead the association without financial compensation, surely NAR leaders can do the same.
Conclusion: The need for reform
As a real estate agent, you need to ask yourself: Are you willing to struggle to pay annual dues, RPAC contributions, and other association fees to pay hundreds of thousands of dollars to our “volunteers” while still enjoying Broadway shows and spa treatments? Your 10 cents?
NAR needs to address these obvious issues. Members are entitled to transparency and accountability in how their dues are allocated. Leader pay should reflect volunteerism and be consistent with nonprofit best practices, as seen in other professional organizations.
At a minimum, NAR should commit to publishing leadership salaries in 2023, 2024, and beyond. This is because these numbers are already known within the company. Compensation transparency is an important first step to rebuilding trust with members.
Just as NAR agreed to increase transparency in agency fees in a recent legal settlement, the organization itself must hold itself to the same principles of openness and honesty. Leaders cannot demand transparency from their members without applying those standards to their own financial practices.
Until these changes are made, NAR’s lavish spending practices will continue to erode trust and raise serious questions about NAR’s commitment to serving its members and the real estate industry rather than enriching its leaders.
The time for reform is now, and the responsibility to put the best interests of our members ahead of NAR’s economic interests lies squarely with NAR’s leadership. Let this article serve as a call to action for NAR leadership, like other associations, to embrace the true spirit of volunteerism and accept compensation at $0.00.
Until we do, all members must demand accountability and relentlessly pressure leaders to make this change. Only by taking this bold step will NAR rebuild trust, restore integrity, and allow the true leaders of the real estate industry to rise to the occasion: those who are willing to serve selflessly. You can get started.
Daryl Davis is the CEO of Daryl Davis Seminars. Connect with him on Facebook and YouTube.
