Bonuses Can Help Make Up for Spartan Executive Pay Raises

The Chronicle of Philanthropy: Bonuses Can Help Make Up for Spartan Executive Pay Raises

September 25 2013

By Doug Donovan, Sarah Frostenson, Emma Carew Grovum, Sam Speicher, and Marisa López-Rivera
September 22, 2013

Excerpt:

Compensation consultants and executive recruiters say more and more boards are requesting help crafting bonus plans that will not run afoul of state and federal regulators or risk public criticism.

Nonprofit boards are struggling with how to “determine the right compensation metrics” in organizations that lack the type of reporting on sales, profits, and revenue required of for-profit firms, said Sandra Pace, a compensation consultant in New York City.

Even though interest is growing, “bonus” is still “almost a dirty word” among nonprofits, says Steven Hall, a compensation consultant for charities. Part of that perception is spurred by new laws restricting in some states CEO pay at charities.

One thing that hasn’t changed in the downturn: a willingness to provide nonprofit leaders with strong retirement benefits…

“Retirement packages have plunged in the world of for-profits,” says Mr. Hall, the compensation expert. “But in the nonprofit world, where you don’t make a big salary, you hang in there for retirement.”

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