President
Obama’s announcement this week that he plans to limit executive pay and
perks at financial companies seeking federal bailout aid should send a
message to nonprofit groups’ leaders and their board members.
The
White House tapped into a growing public concern about the appropriate
levels of compensation for people who benefit in at least some way from
direct or indirect government subsidies.
While policy
makers have yet to seriously suggest ceilings or other restrictions on
compensation for nonprofit groups’ leaders, there is a growing sense
that such pay must be based on common sense and an understanding of the
country’s economic turmoil. Savvy trustees will get the message and and
immediately re-evaluate how their organizations compensate top leaders.
Nonprofit groups’ boards need to both understand the
government’s proposed guidelines on compensation for officials of
companies receiving federal bailout money and think about perceptions
of the standards for executives’ compensation.
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