The ED Compensation Debate Continues

A few months ago I wrote: What is too much when it comes to executive compensation?, which highlighted the firing/forced resignation of the Charlotte United Way's Executive Director, Gloria Pace King, because the media caught wind of her compensation package- a decision that I completely disagreed with. Ms. King was a phenomenal fundraiser and increased the capacity of the Charlotte United Way because of her work, which is why she commanded the salary that she did.

Unfortunately, it seems like the Charlotte United Way is realizing their error. Looking at their 2008 fundraising campaign, "the agency's 2008 annual campaign fell $15 million below the previous year's total", Mike at Nonprofit Board Crisis highlighted. Mike's recent post: Firing an ED can have unintended consequences mentions his disagreement with the Charlotte United Way's decision about Ms. King and discusses the results of the Charlotte United Way's 2008 campaign.

This just goes to show you that a good Executive Director is worth their weight- Ms. King only cost the Charlotte United Way about $370,000 per year (not including her pension), which is definitely worth the $15 million shortfall they experienced in 2008- which at least in part is related to her firing/forced resignation.

The issue of ED compensation has been brought back to life with the recent debate over having salary caps on corporate CEOs. Give and Take recently had a post on this topic: A Salary Cap for Nonprofit Executives?, that discussed whether the $500,000 salary cap for CEOs should also be imposed on nonprofit organizations. I'm not sure what I think about this, I guess I think that as long as for-profit businesses are allowed to pay their CEOs whatever they want, nonprofits should be allowed to pay their Executive Directors what they deem appropriate.