Friday, April 23, 2010

Paul Light: What should not- for- profit leaders earn?

The American writer, academic, and author Paul Light has always been a thoughtful analyst of not-for-profit issues.

In a recent piece in the Washington Post Light explores the issue of excessive CEO compensation in the US not-for-profit and charitable sector.

Discussing the controversy over the million dollar salary paid to the CEO of a high profile, national not-for profit Light points to growing public concern over high salaries paid to CEO's and executives of not-for-profits.

The critical point Light makes is that CEO's in not-for-profits are public leaders who should be bound by a commitment to public benefit not self interest. High salaries send a message of largess and self interest inside the sector. Not-for profits, Light argues, must be diligent about maintaining a delicate balance between appropriate compensation and public concern.

In Australia more and more not-for-profit executives have a background in the private sector and government, where salaries levels are much higher. The extent to which this trend is forcing up salaries in the sector open to debate.

In Australia there is limited information available on remuneration levels in non-for profits. (Some information can be found here and here). The recent Enterprise Care Not for Profit Remuneration Report found that for the first time in nine years the average not-for-profit CEO remuneration fell, dropping nearly two per cent on 2008 figures (based on a survey nearly 1,800 positions in the not-for-profit sector during July and August of 2009).

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