Deborah Dugan, the fired president and chief executive of the Recording Academy, the organization that runs the Grammy Awards, walked away with close to a $6 million payday as part of an apparent settlement in 2021.
Though a settlement between the two parties was announced at the time, the details were not made public.
Q has reviewed eye-opening documents that lay bare the financial cost of the saga that engulfed the Recording Academy in 2020 and ended with Dugan being fired by the group’s board following allegations of misconduct and bullying. Dugan responded with allegations of voting irregularities, sexual harassment and conflicts of interest within the Academy.
In a 2021 tax filing submitted to the IRS and exclusively obtained by Q, the Recording Academy detailed how Dugan — who it claimed launched a campaign to “derail” the Grammy Awards during her tenure — was awarded a whopping $5.75 million for the year.
Though the filing does not specify the nature of the payment, it does reveal that Dugan was the Recording Academy’s highest-paid individual for the year, despite averaging 0 hours of work per week. (All other employees listed on the filing who drew a salary reported a standard 40 hours per week.)
After months of back and forth between Dugan and the Recording Academy after her ouster, the two parties reached a settlement in June of 2021, Billboard reported. “The Recording Academy and Deborah Dugan have agreed to resolve their differences and to keep the terms of their agreement private,” the two said in a joint statement at the time.
Dugan was first removed from her position in music’s top post after allegations of bullying — and just 10 days before the 2020 Grammy Awards. She had held the position for approximately five months.
In comparison to Dugan’s $5.75 million pay packet, the next highest paid employee, chief executive Harvey Mason, pocketed $1,369,344 during the same period. He took over from Dugan in the wake of the scandal.
At the time of Dugan’s dismissal in 2020, the Recording Academy insisted it had not paid the ousted boss a settlement, despite her filing a complaint with the Equal Employment Opportunity Commission.
In the complaint, she said her removal was retaliation for speaking up against misconduct within the organization, including sexual harassment, corrupt voting procedures and conflicts of interest among board members.
She also said she was harassed by Joel Katz, a powerful industry lawyer with deep ties to the Academy, according to The New York Times. He vehemently denied the allegations.
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At the time, the Academy said of Dugan’s dismissal: “We placed our trust in her and believed she would effectively lead the organization. Unfortunately, that is not what happened.”
It also noted at the time that it discussed a settlement agreement with Dugan, but ultimately chose not to follow through with one because she was responsible for “consistent management deficiencies and failures.”
“Not removing Ms. Dugan from the organization at this time would have caused us to compromise our values,” a letter to its members said.
“We could not reward her with a lucrative settlement and thereby set a precedent that behavior like hers has no consequence. Our members and employees, and the entire music industry, deserve better than that.”
For her part, at the time Dugan retorted to the Academy: “While I am disappointed by this latest development, I am not surprised given the academy’s pattern of dealing with whistle-blowers. Is anyone surprised that its purported investigations did not include interviewing me or addressing the greater claims of conflicts of interest and voting irregularities?”
But the extraordinary sum paid to the one-time most powerful figure at the Academy — and buried deep inside the IRS filing — is bound to raise more questions in the latest chapter in one of the biggest recent scandals to hit the industry.
The documents also reveal how the Recording Academy spent $25,941,816 in salaries and spent an additional $55,850,692 in expenses. Total expenses for the same period amounted to close to $89 million and the Academy returned a profit just shy of a million dollars. It registered almost $56 million in income for the Grammys telecast and an additional $13 million in sponsorship.
Dugan, who had previously worked as the chief executive of Bono’s Red charity, president of Disney Publishing Worldwide and a lawyer on Wall Street, had been heralded as a fresh start for a group criticized for lagging behind in racial and gender diversity. In the period prior to her hiring, then-Recording Academy president Neil Portnow provoked substantial controversy when he quipped that women artists needed to “step up” when asked about the 2018 Grammy telecast's winners being predominantly male.
But the mess ended with music’s top awards show shrouded in controversy, bitter behind-the-scenes in-fighting and the specter of voting corruption.
This year’s Grammy Awards will take place this Sunday, Feb. 4 – with no doubt renewed interest in the financial affairs of the scandal-hit organization.