November 23, 2011
Charities and foundations are likely to award modest raises to their top executives in 2012 as they keep an eye on the turbulent economy, recruiters and compensation consultants say.
The median increase in pay for leaders of the nation’s largest nonprofit organizations was 2 percent from 2009 to 2010, according to The Chronicle’s latest annual survey of executive compensation and benefits. Executives probably did slightly better this year, and compensation experts say more of the same may be in store for 2012.
“Right now, almost everyone is budgeting a 3-percent increase,” says Brian H. Vogel, a principal of Quatt Associates, a Washington company that advises nonprofit groups and other employers on compensation.
Not every organization is sticking with modest raises. Compensation experts say some charity and foundation boards are eager to begin giving bigger increases to successful executives who have received below-inflation raises since 2008. The boards fear that a top performer with a stagnating salary will begin to look at other offers.
Yet at some groups, executive salaries remain frozen—or even below 2008 levels—and nonprofit leaders are voluntarily declining bonuses or seeing them cut by their boards. At many groups, the move is about public perceptions as much as saving money.
With unemployment remaining persistently high and the economy possibly entering its second recession in three years, charity boards are spending more time weighing how changes in executive salaries will be received by clients, donors, and even state regulators.
“Organizations need to stretch, and will stretch, for exceptional people,” said Susan Egmont, an executive recruiter in Boston. “The micro factors are driving compensation more than the macro factors right now.”
Source: The Chronicle Board Report, November/December 2011
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