Federal tax documents filed by the Global Business Travel Association in November and now posted on the organization's website show a $5 million payment to former CEO Scott Solombrino, paid on his departure from the organization as part of a separation agreement. The revelation was first reported by The Company Dime. Solombrino left the organization after whistleblowers, self-described as "current and former employees," accused the executive of "racist, divisive and derogatory" behaviors in a letter to the board of directors dated June 7, 2020. Solombrino was cleared of wrongdoing via an investigation conducted by law firm Polsinelli.
The tax documents also showed a salary payment of roughly $512,000, which was likely half Solombrino's annual salary judged by his compensation level for the role detailed in 2019 federal tax documents and suggests the organization suspended his salary when placing him on leave. Even if that happened, GBTA did not hold back more than $130,000 in bonus payments to Solombrino for 2020. According to the filing, he was the only executive to receive a bonus in 2020, even as a third of the GBTA staff suffered layoffs.
How the Events Unfolded
Among the organization's longest-running board members and after an 18-year tenure as president of GBTA's Allied Leadership Council, Solombrino was appointed GBTA executive director in 2019. The appointment itself was made under a cloud of controversy as it became clear that the GBTA board at the time had not conducted a full executive search to fill the position. A year later, at the outset of the Covid-19 pandemic, the board unanimously voted to promote Solombrino to CEO, roughly simultaneously with the organizational layoffs.
On June 19, 2020, the GBTA board placed Solombrino on administrative leave as the organization launched an investigation into the matter. GBTA used Polsinelli—a New York-based law firm that long represented the association—to conduct the investigation. Some, including employees at the time, felt the close ties would compromise objectivity. The GBTA leadership team at that time also sent a letter to the board dated June 20 corroborating the whistleblower allegations.
As the investigation wore on, suppliers pulled financial support from the association. To shore up perception and rebuild industry and internal relationships, GBTA drew industry veteran Dave Hilfman out of retirement to act as interim executive director. The organization also hired an outside association consulting firm MCI USA to conduct what GBTA called a "root-and-branch" review of the organization's structure and to advance recommendations about how the organization should move forward—both in terms of internal structure but also in its programming and mission.
As a result of the review, the organization changed the composition of its board, with a focus on globalizing the organization and projecting a more diverse and inclusive leadership mix. It established new roles for regional representation on its board, introducing seats for the Canadian, European and Latin American regions and filling them with interim board members.
In February 2021, GBTA announced Suzanne Neufang as its new executive director. The organization now refers to her as GBTA's CEO.
In the July elections, the Canadian and European seats were up for election. The seats went to LEO Pharma's Jens Liltorp and Rogers Communications' Sharlene Ketwaroo-Nanoo. Many of the board seats, however, stayed with the incumbents, signaling to some industry observers that the appetite for change at the board level was limited.
An Investment in Change Leaves GBTA in the Red?
A statement from the GBTA board of directors precedes the documentation of the association's 2020 tax filing. It acknowledges the Solombrino controversy and underscores the organization's commitment to restructuring and rebuilding its value to the business travel industry.
"As members of the Board said at the time in public statements and conversations with industry leaders, members and staff, the Board was then—and remains today—fully committed to improving every aspect of GBTA, including the association's culture, its governance and operations, and the ways in which GBTA serves the business travel industry and its membership," according to the statement.
The statement outlines several changes already made to the organization's structure, including bylaws changes and added diversity at the board level. It also seeks to reassure members and sponsors that GBTA's financial situation is strong enough to withstand the organizational adversity and the hardships of the ongoing pandemic, despite the large payouts and the cratering gross receipts which fell from $24.6 million in 2019 to $10.1 million in 2020, buoyed partially by insurance claims.
"As 2022 begins, GBTA is financially secure," the board statement reads. "In 2020, the Association broadened its event insurance coverage, including re-establishing insurance in the event of a pandemic. Subsequently in 2020, the Association successfully asserted a claim for insurance funds related to the pandemic. A portion of the proceeds from that multi-million-dollar claim was recorded within GBTA's financials. The majority of the proceeds will be recorded in GBTA's 2021 financials. The resources provided by this insurance coverage in 2020 and last year have kept GBTA financially sustainable through the pandemic and a period of enormous organizational change."
GBTA's net assets or fund balances at the end of 2020 were reported as a deficit of $3.7 million. As the organization indicated in its statement, "the majority" of insurance proceeds will be recorded in its 2021 financials, which suggests the negative balance may have been offset by those claims.