Compute your total compensation

• Date: 01 March 2018
• Published date: 01 March 2018
• DOI: http://doi.org/10.1002/ban.30655

8 Board & Administrator Special Report

DOI 10.1002/ban © 2018 Wiley Periodicals, Inc., A Wiley Company All rights reserved

Compensation strategies to boost

your pay and benets

Here are some tips for improving your compen-

sation this year:

1. Get the board to agree on a compensation

philosophy to attract and retain the people the

organization needs to be effective. Your board

should agree to be among the leaders in compen-

sation and benefits to attract top workers.

2. Use Board & Administrator’s annual

compensation report. This gives the board na-

tional comparisons to go along with the state- and

industry-specific comparisons.

3. Use a board committee to make pay recom-

mendations to the board. The committee can dis-

cuss what compensation comparisons make sense.

All compensation needs to be taken into ac-

count by this committee, including overall pay and

benefits, as well as the entire compensation struc-

ture for various pay grades.

4. Don’t be greedy but don’t be too thrifty.

Nonprofit jobs give workers the privilege of serving

a community. You receive an abundance of mean-

ing, value and purpose by doing this work.

Those kinds of rewards, and the compensation

that comes with them, should be spread across

the entire organization in a way that makes good

sense to you, your staff and the board.

Compensation at a nonprofit organization

should always pass the front page of the local

newspaper test.

Excessive thrift, however, can be dangerous to

you and the nonprofit. Find what is fair by using

sound comparisons.

5. Understand that determining compensa-

tion is a fluid process. It all changes with time

and circumstances.

A best practice is to review compensation phi-

losophy in each year’s budgeting process. That

requires asking and answering questions such as:

Where should we be considering this year’s finan-

cial realities? For example, if line staff recruitment

is slowing and hurting services, should the orga-

nization put more resources into those pay grades

than the higher grades?

A board should review your compensation on a

yearly basis in relation to your duties and perfor-

mance. Try to provide them with information on

salaries that other executives in the field and in

your state are paid.

The board should also consider what compensa-

tion is for other nonprofit chief executives in the

same region.

More pay-boosting tips:

• Stay on top of what other executive directors

are being paid for similar work and make sure

your board receives this information.

• Make sure that the executive director’s perfor-

mance meets or exceeds the salary expectations.

• Ensure the agency is performing at a finan-

cial level that justifies paying the salary that is

expected.

• Keep your board informed on how the organi-

zation is performing.

• Openly discuss your compensation with the

executive committee, the finance committee and

the audit committee, and have the data to justify

what your compensation needs to be. ■

Compute your total compensation

Use this chart to gure your total compensation package: ■

Pay: _________________________________________

Benets: ______________________________________

Bonus: _______________________________________

My total compensation: __________________________

Thank you for your subscription to Board & Administrator. If you have any questions about this report, reach me at 515.963.7972

or jeff_stratton@msn.com ■