Looking to Benchmark Pay?
INTERACTIVE EXERCISE
Before we conclude this course, let's look at one way to research competitive cash compensation levels at comparable organizations using ERI's Nonprofit Comparables Assessor.
Problem Statement
Stanley Whiteside is Executive Director of the Community Health Center in Modesto, California. He's been with the organization in this capacity for two years. His current base salary is $180,000.
Stanley is a developing and ambitious Executive Director. The Compensation Committee of the Board of Directors has been reviewing Stanley's compensation. They would like to raise his salary to be competitive, but one of the committee members has suggested that they raise his base pay AND develop a plan whereby Stanley can earn a substantial bonus if the Center does "well" next year. The Board has expressed concern over Center operations for the past few years. It has barely kept to the budget, or has been over budget, requiring the Board to dip into reserves. Annual revenues for the Center have been running around $10 million.
The Board has developed the following basic idea: Stanley will obtain a bonus if he can keep expenses down while keeping revenues even or increasing them for the next year. He will receive a bonus based on how well he does this.
The Compensation Committee would like to answer the following questions before setting up the variable pay plan.
- What increase in base salary is required to bring Stanley up to the average pay for his position?
- What are comparable organizations (both for-profit and nonprofit) in California paying their Executive Directors in direct cash compensation?
Instructions
Please press the Load Step-by-Step button to open the following tutorial. (This will open as a PDF in a new window.) After you have read this PDF, click on the Next button below to try your hand at using this research software to research competitive compensation levels at nonprofits.