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Unfortunately this is not just a non-profit issue. This is an everyone issue. One popular trending reason is that boards ask an outside firm what an average CE

Unfortunately this is not just a non-profit issue. This is an everyone issue. One popular trending reason is that boards ask an outside firm what an average CEO makes at a similar size company. Then they decide to pay them slightly above average if they like them. Over 40 years this tends to sky rocket the salary of CEOs to where everyone wants an MBA just so they can get paid crazy amounts of work compared to what they put. Of course the salary of the CEO doesn't even tell the whole story when you bring in tax perks of shares vs W-2 wages. Plus the CEO will probably get many other company "perks".

wpietri 5y ago
Oh, sure, I think it's also terrible in for-profit companies. I think it's a source of vast economic inefficiency. But the usual excuses for it don't apply at nonprofits.
- narraturgy 5y ago
  I disagree. It seems unreasonable to hold not-for-profits to such an extreme ethical standard. They're already doing charitable work, why must they also be expected to lead the charge on unrelated social matters besides the one they chose? I agree that executives are paid too much, but I don't expect a Soup Kitchen to be posting on social media about how they are fighting against discrimination of purple elephantfolk in Norway.
  - username90 5y ago
    If their executives get paid above their level of competence then the nonprofit is no longer nonprofit, it just distributes the profits via executive salaries.
  - wpietri 5y ago
    Because not-for-profits, which have special legal and tax treatment on the theory they're doing good for society, are accountable for how they spend money in ways that for-profit companies aren't. I also think it's hilarious that "don't overpay executives and instead spend the money on the good you're supposed to be doing" is an "extreme ethical standard". How did the Overton Window get moved all the way to the basement?
    - mattferderer 5y ago
      It's not just executives though. It's all staff. It's hard for a lot of people to take rather huge pay cuts to work at a non-profit. Very few people at non-profits are "overpaid" when compared to salaries at a similar for profit company. Non-profits also have less tools available to pay their employees, such as stocks.

wpietri 5y ago

Oh, sure, I think it's also terrible in for-profit companies. I think it's a source of vast economic inefficiency. But the usual excuses for it don't apply at nonprofits.

narraturgy 5y ago
I disagree. It seems unreasonable to hold not-for-profits to such an extreme ethical standard. They're already doing charitable work, why must they also be expected to lead the charge on unrelated social matters besides the one they chose? I agree that executives are paid too much, but I don't expect a Soup Kitchen to be posting on social media about how they are fighting against discrimination of purple elephantfolk in Norway.
- username90 5y ago
  If their executives get paid above their level of competence then the nonprofit is no longer nonprofit, it just distributes the profits via executive salaries.
- wpietri 5y ago
  Because not-for-profits, which have special legal and tax treatment on the theory they're doing good for society, are accountable for how they spend money in ways that for-profit companies aren't. I also think it's hilarious that "don't overpay executives and instead spend the money on the good you're supposed to be doing" is an "extreme ethical standard". How did the Overton Window get moved all the way to the basement?
  - mattferderer 5y ago
    It's not just executives though. It's all staff. It's hard for a lot of people to take rather huge pay cuts to work at a non-profit. Very few people at non-profits are "overpaid" when compared to salaries at a similar for profit company. Non-profits also have less tools available to pay their employees, such as stocks.