8 Factors that Should Guide Executive Director and CEO Compensation in Nonprofit Organizations
Having been asked about this by clients a few dozen times, and not having a good answer, I finally got the kick in the pants I needed. My wife, who is a Nonprofit CEO (!), was making plans to make a switch in 2007. She was intending to move from her smaller organization in a small town in New Hampshire to a large organization in an urban setting. She asked my opinion: What compensation should she aim for? How can she keep from making a mistake? How can she emerge feeling confident in the fairness of the outcome?
Well, that got my attention!
While exploring it, eight factors emerged. Once defined, the question arose of how to weigh them individually, and in relation to each other. After messing around for a few weeks, a tool emerged to help you with this thinking process.
This tool is a systematic method to organize the conversation of a Board of Directors. It can also be used by the job-searcher to do what my wife did – create a range that seems acceptable. It could even be used as a negotiating platform – if you’ve got the courage to be that transparent with each other.
And it is a thinking process. It isn’t an equation. A good deal of judgment remains. Hence, it does not provide a salary number at the end of the process! It simply provides a process for doing that yourself, perhaps a little better than you would have otherwise. Like most things, success with this rests more with the quality of your dialogue than the precision of the tool.