Periodically, activists and the press engage in challenging the value of executives and their compensation, especially for executives at not-for-profit organizations or non-stock for-profits such as mutual banks and insurance companies.
Whether it is salary or benefits like deferred compensation and supplemental retirement plans, the argument is that somehow the compensation for these folks should not be like that for the same positions at similarly sized organizations in the for-profit sector. These arguments often come from those who see numbers and not the challenges and successes that take place in the trenches on an ongoing basis.
Executive compensation is the responsibility of the Board of Directors of each organization. If they fail, in the not-for-profit sector there are watchdogs with teeth galore – the IRS and state attorneys general. And, don’t forget, donors who voice opinion with their checkbooks. In the private sector there is often a regulatory body involved, but despite that, the final word is available to customers who can go somewhere else.
The Boston Globe recently published an op-ed piece that I wrote on the subject. Click here to view it.
For further information, contact Barry N. Koslow, JD, at bkoslow@mkaplanners.com or 781-939-6050.
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