I am sure some people will object to this blog, but so what.
I would like to discuss executive pay at some non-profit institutions.
Higher education has evolved a lot in the last decade,
partly because the makeup of the students is changing. You have folks going
back to school after a 15 year break, some going to school for the first time,
and of course military students using their benefits. That is a lot of money
waiting to flow into an institution.
One of the big ‘selling points’ of working at a non-profit
institution versus a for-profit institution is that “there is not as much pressure to
enroll students” or “the money the school makes is put back into the school”. Please
name me one school that does not want full seats at all times, and is ok with
losing money? The myth of less pressure
is just that, a myth. Remember, not all for-profit schools are bad or
unethical. For-profit schools do tend to be up front about metric goals, and
what rewards you will gain by hitting those goals because they tend to operate more
like a business.
A good number of the larger non-profit institutions (especially
the non-traditional ones) are operating like for profits, using the same training,
expecting the same metrics, but not compensating their frontline employees. Recognition is great, but a real pay
raise tied to recognition goes further. It is not uncommon for non-profit employees
to move to for-profit schools after a only short period of time because of pay
(they have the same training), and then the manager has to scramble to find,
train, and try and retain a new crop of employees. That is stressful for a
manager.
I am getting to my
point in a moment, and I need to clarify that I am simply producing facts based
upon my experience and I am not taking sides, ultimately it is about the
individual institution not the type of institution.
Executive pay
(not middle manager) however, seems to be very good at some of these non-profit
institutions: and guess what? Your frontline employees can read, they know what
the execs are being paid (people talk) and it makes them mad because the frontline
are the revenue generators and they are often not well compensated.
“The Last $5M Payday?”
“Brandeis University paid its former president, Jehuda Reinharz,
$4.9 million on Jan. 2, three weeks before it announced an overhaul of its
executive compensation policies.”
“Reinharz, who quit his post as one of the nation’s highest-paid
college presidents in 2010 on a sour note, gradually won the payout through
deferred compensation over his 17 years as president. This month’s massive
payment — perhaps one of the largest ever by a nonprofit to an individual –
included $4.1 million in deferred compensation and $811,000 for untaken
sabbatical.”
This kind of reading can actually be painful for your
employees to read, especially those who have been struggling for 20 years with
no significant pay raise.
Institutions please say what you are and be what you say you
are. You can be ethical about it.
Dr Flavius A
B Akerele III
The ETeam