Brandon Johnson

145 Hope Lane

May 24th, 2022

Members of the East Tennessee Lions Eye Bank and its Board of Directors,

As a newly elected board member, I take my role of being a fiduciary seriously. I believe that I
was elected to this position not only to help the organization grow, but to help steer the
organization to a sustainable future through sound, ethical, and legal governance and financial
management policies.

Before I begin, let me state that my interactions up until recently have been nothing but
pleasurable with the entire staff of the East Tennessee Lions Eye Bank. The Executive Director
(also referred to as the CEO in this letter) had constantly been kind and supportive, and my
analysis is in no way coming from a place of maliciousness. It is my most sincere desire that this
does not, in any way, come off as accusatory. This is intended simply as a data analysis.

When looking at the health of an organization, I start to look at performance via key performance
indicators and begin to ask a simple question: how are we doing?

In my study of the East Tennessee Lions Eye Bank, I began to see one data point that was
concerning: that our CEO's compensation was very high. According to 2019's tax filings, for
example, our CEO's total compensation was $445,020.00. Roughly, this included a base
salary of $170,000, $227,000 in bonuses, and $45,000 in additional compensation (company car,
insurance, etc.).
From there, I received data from the Eye Bank Association of America (EBAA) that backed up
this hunch. After looking at the data, our CEO is the highest compensated CEO of an eye bank
in the country - by a long shot. The EBAA performs a compensation study every two years to
assist its members in determining fair compensation. Invitations to participate are extended to
every eye bank that is a member of the association but the East Tennessee Lions Eye Bank has
opted not to participate for at least the past two surveys. The survey ranks Eye Banks by size in
four different categories: small, medium, large, and very large. These placements are somewhat
variable, and center around three factors: by staff size, by revenue, and by corneas placed. The
East Tennessee Lions Eye Bank, by those brackets, is placed as follows:
Our staff size makes us a medium eye bank.
$2 million in revenue (but not more than $3m), making us a medium eye bank
With 482 domestic corneas placed, making us a small eye bank

With these data points in mind, it could be argued that we are either a small or medium eye bank
but, to err on the side of caution, I will continue under the assumption that we are a medium eye
bank.

The pay range for a CEO of a medium eye bank was a minimum of $95,000 and a maximum of
$250,000. The average for a medium eye bank, however, was roughly $150,000. Bonuses for a
medium size eye bank range from $0 to $43,000, with an average of nearly $15,000. The study
showed that the maximum salary of any eye bank in the entire association regardless of size was
$300,000 and the maximum bonus being $70,000 (both coming from an eye bank who was
rated very large by every metric). Since our eye bank chose not to participate for whatever
reason, our CEO's salary + bonus of over $397,000 was not shown.

To make matters worse, the compensation study does not take into consideration any cost of
living. Our current CEO makes some $450,000 and lives in Knoxville, while the CEO of the
Eye Bank based in Manhattan, for example, makes barely over $268,000. If cost of living was
taken into consideration, our CEO's compensation would be even more of an outlier given
Tennessee is the least taxed per capita state in the country.
With this data in mind, things began not to make sense to me. Why is one of the smallest eye
banks in the country paying the largest salary by quite a significant sum? I was certain there
must be some logical reason, and worked to find that through more data analysis and speaking
with individuals who had knowledge of the Eye Bank’s operations.

In an email to the board, our current CEO justified her salary by stating that she wears many
hats, including: Chief Operating Officer (COO), Chief Financial Officer (CFO), Marketing
Director, and Human Resource Manager. The argument was made that, given all the roles
performed, the Eye Bank actually saves money by having one person perform all these roles. To
back up this statement, the CEO provided tax filings of several other organizations that perform
eye banking functions to show how lean and efficient we were in comparison to
others. However, this argument is completely baseless. I looked at the overall revenue of each
organization and calculated what percentage goes to total employee expenses. I found out that
the leanest organizations spend about 26% of their revenue on payroll expenses, and the average
was roughly 35% (excluding our eye bank so the numbers were not skewed). The most bloated
organization in terms of total payroll expense percentage from the sample was East Tennessee
Lions Eye Bank, with almost 59% of gross income going to payroll expenses. Our eye bank
spends some 20% more than the average on payroll.

This high percentage is very skewed for one simple reason: our CEO's compensation. While the
sample's average percentage (excluding our eye bank) of gross compensation that went to CEO's
pay was 3.14%, our eye bank spends over 21% of every dollar we bring in directly to CEO
compensation. IRS experts have actually weighed in on what percentage of an organization's
overall revenue is "too much" and, typically, that is around 10%. With that in mind, I fear that if
our organization was ever truly investigated by the IRS, we would be severely out of the
acceptable range.

After this analysis, I also noticed that the CEO's daughter is employed by the organization,
too. As a part time employee, working 24 hours a week, she is making over $137,000 a year in
total compensation as the Office Manager. This equates to her making roughly $109.00 per hour
- an astronomical sum for a part time office manager. Per hour worked, the CEO's daughter is
the second highest paid employee of the organization. Allegedly this is a mistake, but I am still
looking for some proof to verify this mistake that has spanned several years.
With this data in mind, I began making confidential phone calls to fellow board members - or so
I thought they were confidential. My intent was, before making this an issue, to privately discuss
my concerns. Despite assuring me that the conversation would stay private, a board member
directly went to the CEO to let them know what was said. At 9:15 PM at night, the CEO called
me and gave me an ultimatum: either I could resign from her board, or she already had the votes
together to lead a vote forcibly removing me from the board. She said that she could no longer
trust me because I was asking these questions, and she wondered where I "got the right" to be
investigating this. She said that I did not have the right to "police" the organization. I firmly
believe that this call was highly inappropriate by every standard.

Despite what was clearly a threat, I remain as resolute as ever to serve on this board. I will not
resign. I do not promise that the questions I ask as a board member - elected by you - will be
easy. They will not always be fun. However, every question will be from a place of love for our
mission.

I implore the board to take this matter incredibly seriously. The stakes for an organization like
ours is incredibly high - ranging from fines to revocation of tax-exempt status. Should we be
found guilty for excessive executive compensation, fines can be levied on both the executive
who received the overpayment and the board members who approved it or who knew about the
excess but did nothing to prevent it.

For example, if the IRS found that an acceptable compensation package for our CEO position
was $250,000 and we compensated our CEO $450,000, the IRS would require our CEO to repay
the $200,000 overpayment back to our Eye Bank - with interest of up to 25%. The IRS can also
require each board member who approved the excess compensation, or any board member who
knew about the overpayment but failed to prevent it, to pay an excise tax equal to 10% of the
excess. That means the board members, who have now all been furnished a copy of this letter,
could be fined $20,000 each in this example.

At the end of the day, we were elected to be good stewards. Monitoring things like
compensation is one of our most important responsibilities. I urge the board to take my
concerns seriously, and act appropriately in this matter.

I want to reiterate and be totally clear that it is my ultimate hope that my concerns are totally
unfounded, and I can find more ways to support our mission going forward. While I do put a
great deal of faith in data, sometimes it does not tell the entire story. The entire staff at the Eye
Bank has been nothing but kind, honest, and respectful to me before this incident occurred. If
these concerns end up proving to be baseless, I hope that everyone involved will understand that
I ask these questions from a place of love and admiration, and in no way was it intended to be
from a place of any type of malice.

Yours in Service,

Brandon Johnson