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Subject:Re: Salary Histories From:"Michael L. Wyland" <michael -at- sumptionandwyland -dot- com> To:techwr-l -at- lists -dot- techwr-l -dot- com Date:Fri, 29 Oct 2010 23:10:16 -0500
There are a couple of considerations about nonprofit executive pay
that do not apply to most employment.
First, the IRS has established regulations with which all nonprofits
must comply when setting executive pay. Basically, the nonprofit
must be able to document the appropriateness of the compensation
package using industry standards. As a result, many nonprofit boards
of directors commission salary surveys during the executive search
process. When the time comes to make an offer to the successful
candidate, the board has a documented salary range that the IRS
expects them to hone to pretty closely.
Second, since nonprofit executive pay (at least for the "top
management official" (CEO/ED) and the "top financial official"
(CFO/business manager/etc.) is public record, accessible through the
nonprofit's annual Form 990 filings, any applicant has a good idea
what the nonprofit's expected salary range is likely to be. The
pressure to increase that number to attract the right talent may be
opposed by the regulatory requirement to justify compensation (see
above) and the facts and circumstances of the previous executive's
compensation; e.g., time in service vs. advertised experience
requirements and qualifications of the identified
As a consultant assisting nonprofit boards in the hiring process, I
often find myself on the side of asking boards to consider increasing
an offer to get the right candidate. Many board members are
conservative with money that is not their own, and for which they
feel a fiduciary duty to spend wisely on mission-related
activities. In other words, they're not cheap - they're afraid. My
challenge is to show the nonprofit board that the right executive is
a wise investment that yields mission-related rewards that can be
justified to the IRS and anyone else (media, donors, watchdogs, et.
al.) who reads the Form 990.
Michael L. Wyland
Sumption & Wyland
818 South Hawthorne Avenue
Sioux Falls, SD 57104-4537
(605) 336-0275 (FAX)
(888) 4-SUMPTION (toll-free)
michael -at- sumptionandwyland -dot- com
Strategic Planning * Executive Coaching * Training & Facilitation *
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