AOPA’s Bad Week

It could be a challenging week at AOPA and it’s kind of weird how it all came together, considering how many smart people have been working so hard to prevent this confluence of bad news. As of this writing, it would appear AOPA will be without a CEO for some time and there’s some financial information about to be made public that is sure to rile some members.

Before I go on I would make this entreaty. I think AOPA is worth keeping but it will need some indulgence from a membership that has shown a remarkable willingness to abandon the organization at the slightest provocation. Hang in there for awhile longer. I think GA needs AOPA but AOPA needs GA’s help to weather some challenges.

You may recall last February that the board of trustees fired President and CEO Darren Pleasance. Pleasance had spent the previous year reacquainting the organization with its members and those members, who renewed every year more out of habit than any real desire to be AOPA members, noticed.

Although Pleasance built a career at the highest levels of business, he has a hopeless flaw. He is absolutely nuts for airplanes and chances are, if you’ve read this far, you are too. Despite a career spent in the rarified air of some of the country’s biggest and most influential companies (Cisco, McKinsey and Company, Google) he’s as down to earth as anyone else drinking stone cold coffee on a folding chair in someone’s hangar bitching about, well, just about anything.

He had just enough time as president and enough accumulated air miles travelling to airplane events for people to get to know him and they liked him. When he was fired it was like losing a friend for many. You know the rest; the uproar, the petitions, the membership revolt and ultimately a lukewarm resolution in the form of some changes to the organization’s bylaws (allowing electronic voting, setting term limits for board members and a few other structural changes that should make the organization stronger and more democratic over the long haul.) More changes along those lines are planned but honestly the basic rules running AOPA were so antiquated that making all the changes required all at once might have been too much for it to sustain.

But as with most things, it boils down to money and that’s where the dichotomy comes in. AOPA is both fabulously wealthy and running on fumes. It has an investment portfolio of almost $150 million that earns a healthy return but the nuts and bolts side of the business is losing millions of dollars a year, particularly its publishing enterprises. In truth, the investment returns are all that have kept AOPA marginally in the black the last few years. Membership is down by almost 50 percent over 20 years ago and it was painfully clear during the dustup over Pleasance’s departure that a lot of members question the value received for that $90 a year.

And that’s where another dichotomy comes up. There are those who view the investments as a pot of gold to help the organization through this rough patch. Others say that drastic cost cutting is in order and the investments should be left alone. The organization also needs to address the rampant apathy among members that turns quickly to anger at the slightest provocation.

A couple of months ago the editorial department announced it was letting its X account go dormant with no explanation or justification. That opened the door to speculation and the socials and forums determined that wokeism and even socialism were at the heart of the decision.

Commenters alleged that AOPA had taken a sudden left term and the backlash was enough for it to hurriedly reverse the decision and explain why they’d done it in the first place. Turns out there must be a lot of lurkers in AOPA’s X realm because it wasn’t producing the clicks needed to make it worthwhile to keep updating it. Anyhow, it’s there now but whether it’s serving any purpose other than keeping a cork on internal conspiracy theories is another question.

Not a great year, I think you’ll agree.

So, how can it get any worse? Well, hold my congealing coffee.

The financial situation is about to become public knowledge because the law says it must. AOPA is a non-profit and that means it’s exempt from federal tax on money that it makes. The tradeoff is that it must prepare detailed financial records, called the Form 990, to prove that the revenues earned go to benefit the organization and, by extension, the members. Those financials have to be made public and the deadline for filing them with the IRS is next Sunday, Nov. 15. They technically become public at that point but it will take some time for the IRS to post the documents.

The paperwork was done months ago and AOPA normally releases its general financial picture in the form of a magazine article in one of the summer issues of AOPA Pilot. This year’s tells the story of an operating arm whose revenues were $41 million against expenses of $46 million and continues the narrative of a failing business being bailed out by the investment fund. But it doesn’t get into the nitty gritty of where all that money goes. The 990 does and I suspect that’s why they’re sitting on it until the last possible moment.

In the last few months another issue has developed that is so dripping with irony that it couldn’t have been written any more perfectly.

Remember that all this was going on in the absence of a CEO who’s first order of business would have been to present the 990s and tell the membership how he or she was going to bring order to the business.

Well the board is the one that created that big pile of money and it’s grown rather attached to it. Given the volatility of the markets and the overall economic malaise I’m guessing that there are board members looking for a fiscal hawk who is unafraid to do what’s necessary to even up those columns on the ledger. AOPA is mainly a service enterprise and that means firing people and lots of them.

One of the big line items on those 990s is executive pay. Although heading up AOPA is kind of seen as a retirement job for someone who’s already made a pile of cash, for whatever reason the board decided that when former CEO Mark Baker came aboard he’d be paid as the head of a good-sized corporation instead of a smallish non-profit. That worked out to $1.8 million in basic salary and $245,000 in “other compensation.”

Baker was let go by mutual agreement and that means he got a substantial severance. It will be on this year’s 990. Pleasance’s salary and severance will also be on there. I’m told Pleasance was paid substantially less than Baker and more in line with non-profit CEOs but he wasn’t in food bank territory by any stretch. Past decisions on the former presidents come home to roost on this 990 and it’s in the millions of dollars.

Meanwhile the search was on for someone to step into this quagmire and start digging them out. By summer there was a short list. One applicant rose to the top and from what I’ve been able to glean he looked like a dream candidate. He started an innovative and ultimately very successful aviation business. He’s also an airplane nut who spends all his time out of the office doing aviation stuff. You might not recognize his name but you’ve likely heard of some of the airplanes he flies in his spare time.

But when it came time for the formalities, the star candidate turned the job down because it didn’t pay enough. I’m a little hazy on the details but what it boiled down to was that he quickly realized that this was not some largely ceremonial position with a lot of perks. His first job was going to be to fire a whole bunch of people and then figure out how to prevent the organization from collapsing under the weight of an already twitchy membership just looking for a reason to quit. Also, several of the senior executives are getting ready to retire so he’d have to find replacements for them and their six figure salaries. It was looking like real work and he wanted real money, a package somewhere north of what Baker got.

Meanwhile, the board, with the millions it shovelled out the door dealing with the previous two presidents fresh in their minds, decided to play hardball with salary and wanted to pay the new guy closer to the Pleasance level. In the end, candidate No. 1 walked away from what most people would consider one of the most plum positions in aviation. I’ve looked him up, though, and I think he’ll be all right.

So, where does that leave the current leadership at AOPA? Well, they’re about to tell their members just how much getting rid of Pleasance and Baker will really cost and they are at Square One again their search for a CEO. Having gone to the vanishingly small well of potential candidates for this highly specialized job twice in the last couple of years, it’s not likely there’s anyone who’s qualified they haven’t already seen. Some of those folks are apparently still in the mix but I’m told the search for a CEO remains active. I do wonder how those who reached the interview stage feel about being someone’s second choice for a job that doesn’t look like that much fun anymore. Also, with the retirement of Ed Bolen, NBAA may be competing in the same talent pool for a new leader if they don’t decide to promote from within.

It all adds up to even more controversy and upheaval for an organization that has had a gut full in the past year. It also has a somewhat polarized board made up of reformists and status quo members so even deciding what to do next could be a challenge. Regardless, it could be months before they can find a CEO to try and pull the threads of the organization back together.

Which is why I will get back to the central point I made at the beginning of this screed. I know. That was a long time ago.

Now is not the time for members to head for the exits. AOPA needs help to weather this rough patch and come out the other side with some positive direction and clarity about its mandate. In that process it can rebuild the trust and maintain the influence that made it the world’s largest aviation organization for a long time.

AOPA is fundamentally a good organization with some very talented people. It’s just in need of some attention to make it more relevant and valuable to its members I think. It’s going to be a lot easier to fix the existing problems than it will be to kick the table over and start again.

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