Friday, April 11, 2008

Charity Pay: How Much Is Too Much?

On our site, donors are chatting up a storm about CEO Compensation. Donors are expressing their outrage at what they perceive to be excessive CEO pay at charities like the American Cancer Society, USO, American Heart Association, Easter Seals, National Headquarters, Trinity Broadcasting Network, and Wildlife Conservation Society. With the average American earning under $40,000, it is easy to see why nonprofit CEO salaries as low as $133,510 are drawing criticism.

While it is true that some charity executives receive outrageously high salaries, our research shows that the typical charity CEO earns about $145,000 a year. We’re talking about multi-million dollar operations that require leaders that possess both savvy business skills as well as the expertise to meet the institution’s charitable goals. So really, isn’t this level of compensation reasonable?

In fact, $145,000 looks like a bargain when we contrast it with what their corporate counterparts are earning. According to USA Today and Salary.com, corporate CEOs are paid about $1 million annually. Add to that their various stock options and bonuses and corporate leaders are taking home $11 million a year.

3 comments :

Jim said...

The skills required to run a nonprofit and the skills required to navigate a real business are drastically different. A CEO's wages should be tied to the value they bring to their shareholders. If that value represents an extra meal or access to clean water the CEO has done a good job but the real value added to the World market is insignificant. Now if a CEO increases share price and the value of the business significantly this is likly to have a much greater impact on the World market. This CEO not only feeds the employees of the company but provides extra income to the shareholders that can now be injected back into the market. It's the work of the Businessman that allows there to even be a nonprofit whatever it is

koby said...

I don't have any problem with high compensation for executives, if their organizations are indeed successful. That goes for non-profits as well. As far as additional taxes for executive bonuses, I would much prefer to see appropriate tax incentives to contribute a reasonable percentage of those bonuses to charities rather than over taxing it and eliminating the incentive. As a business owner, I would much rather contribute some of my success directly to charities than to "invest" in government bureaucracies.

Ashwell said...

The microsoft pays to its CEO's around $900,000. I think the huge difference is due to the kind of income to the business. I conclude that CEO's salaries are purely based upon the returns in the business. And the same with charities also.

Thanks
Ashwell prince
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