The Washington Blade's annual look at compensation paid to, as they term it, "leaders of the LGBT rights movement," is always an interesting read. But the real issue isn't just the level of pay; I agree that, in general, CEOs of nonprofits should earn what the competitive market deems is fair. The broader, and far more important question, is the same one that's being asked of private-sector CEOs these days - does the level of their individual performance this past year still entitle them to receive what would otherwise by deemed fair compensation for their positions? Or should there by some "clawback" (i.e., recouping promised compensation in light of poor performance) for these executives as well?
Given the devastatingly bad leadership shown on the part of some, particularly as regards the debacle of California's Proposition 8, a campaign mismanaged to an extraordinary degree, should Lorri Jean of the LA Center still be getting $327,000? (The Advocate, in its "Anatomy of a Failed Campaign," called her one of "the small clique of California LGBT leaders" who were in charge of directing, or misdirecting, opposition to the initative.) Should Joe Solmonese, under whose management the bulk of HRC's efforts went to getting out the vote for Obama instead of fighting the three statewide anti-gay marriage initiatives that were passed, be receiving $338,400? Or would it be more just to direct their way some of the same outrage over the bonuses being paid to executives who ran their companies into the ground?
18 Comments for “Pay for Performance?”
posted by Bobby on
America is based on rewarding prosperity, that means we should all aspire to be CEO’s.
Why would I want to be the president of HRC if they’re only going to pay me $100,000 a year?
Why be the CEO of a bank for only $500,000?
I hate bailouts, I hate the government telling private industry how to run things. The same with non-profits, if you think their CEO’s are overpaid, stop giving donations!
posted by esurience on
Bobby,
But rather than not giving donations to groups that, although far from perfect, do some good for the cause of gay equality, a more pragmatic approach I think is to name & shame those who are getting paid too much for the services they’re providing.
At least if that works, then the organizations still survive to do good works. If too many people decide not to donate, the cause will be disproportionately hurt, not the executive’s salary.
Personally I’m not too interested in donating to most gay organizations though. I’d rather use my money to support groups that are exclusively focused on the marriage battle (partly because I’m of limited means and I see marriage as a much higher priority than anything else). For example I donated to help defeat Prop8, and I expect to be donating again to support its repeal (I believe they’re trying to get it on the ballot in 2010. I’m worried that’s too early, but that’s another topic).
posted by Jorge on
Call me naive, but I just can’t imagine any talent being worth that much money. Is it really that difficult to find good leaders that you have to pay them three hundred grand a year?
(Hmmmmmm)
Yeah probably.
Okay, you learn something new every day: they’re not in it out of altruism.
posted by Bobby on
“But rather than not giving donations to groups that, although far from perfect, do some good for the cause of gay equality, a more pragmatic approach I think is to name & shame those who are getting paid too much for the services they’re providing.”
—Maybe, personally I like the approach they have in Las Vegas, where some employees get a relatively small salary with huge bonuses based on performance.
My point is we should not limit prosperity, if a high school principal was paid the same as a teacher, why would any teacher work hard to reach that level? It is natural to expect more money and benefits when your job demands more experience and ability.
One Vegas executive started his working life cleaning toilets in a casino. Now he makes a million dollars a year managing The Luxor and doing all kinds of complicated things to increase profitability and keep costs down. Is it unfair for him to make a million dollars after years of working extremely long hours for low wages?
posted by dalea on
Lori Jean runs the Los Angeles Gay & Lesbian Center, the largest gay organization in the world. There are three campuses, senior housing, youth housing, AIDS health care, support groups, a theater, an art gallery and much more. Why she ever got involved with the Noon8 is beyond me. But considering the budget and scope of the organization, plus COL in LA, the salary is not out of line.
posted by Carl on
“Or would it be more just to direct their way some of the same outrage over the bonuses being paid to executives who ran their companies into the ground?”
I think if gays made any type of organized effort to compare anger over poor leadership in the gay community to the awful leadership at AIG, they would face a strong backlash from many in the press and many straight people. They would be seen as shallow and short-sighted to compare what many straight people see as frivolous (gay marriage) to the real poverty and chaos AIG caused.
posted by JimG on
One does not need 325K or even 150K in order to lead a decent life. I don’t think that anyone protesting these salaries is asking these people to use their talents in these organizations and live in poverty at 100K.
This is not some Wall Street Investment Company. These are organizations that exist (supposedly) for a worthy cause and solicit funds from donors and people just like me to help them with their cause.
To pull 300K from such an organization (for one’s personal consumption) based on the worthy cause claim is a disgrace.
I stopped giving to charities long ago and it is for this very reason. I am NOT about to give up my hard earned money (and I make a middle 2 figure) so someone can make the salaries listed here.
Maybe these CEOs should realize that non-profit might apply to them too?!?
posted by Bobby on
“One does not need 325K or even 150K in order to lead a decent life.”
—Spoken like a true socialist, who gives you the right to decide how much I need to live a decent life?
What if I want to adopt children? What if I want to send them to private school? What if I need a yacht? What if I want a second home, an RV, a waverunner, scuba diving equipment, vacations in Aspen or the French Riviera?
What about the college loan debt a bachelors, Masters or Phd in Social Work creates?
A high salary is also likely to attract the best talent. That’s why some CEO’s pay their secretaries $150,000 a year, they know that if you really want the best people, you can’t offer $10 an hour.
Non-profits just call themselves that to avoid paying taxes, the reality is they are just like other for-profit companies, their product is charity, they raise it through advertising, events and by having the very best people. You don’t get those people by offering $100,000!
posted by BobN on
who gives you the right to decide how much I need to live a decent life?
Cool! Bobby supports collective bargaining!
More seriously, the “conservative” defense of high-paying executive salaries has always mystified me. Of course, I understand it when the “conservative” IS a highly paid executive — self interest explains a lot in this world. But on a broader level, it just makes no sense. So-called “executive compensation committees” are just financial circle-jerks, with executives deciding what executives should make. It’s sort of like unions negotiating collective bargaining contracts, except that with the collective bargaining, there’s an opposition.
A high salary is also likely to attract the best talent.
This is one of the lies sold by the right since the 70s. The argument was that government was filled with incompetents and that, by raising the pay, “better people” would be attracted to government. The aim, of course, was to make “public service” more attractive to conservatives. I don’t think anyone will argue that government is more efficient and more competent now than it was. It is, however, much more highly paid.
posted by Bobby on
“More seriously, the “conservative” defense of high-paying executive salaries has always mystified me.”
—Conservatives defend freedom and prosperity. We do not hate the rich, we do not promote class warfare. Even those of us who are poor (like me), aspire to be rich someday. If you get an MBA or have the experience to get a high paying job, then you deserve that and more.
“Of course, I understand it when the “conservative” IS a highly paid executive”
—Then “liberal” means the same thing, you certainly have no problem with the Kennedy fortune or with Bloomberg and Soros keeping their billions. Not to mention ballplayers, Hollywood actors, famous writers, painters, artists. I guess wealth is good as long as it comes from a democrat, right?
“So-called “executive compensation committees” are just financial circle-jerks, with executives deciding what executives should make.”
–Yes, it’s called being well-connected. So what?
“It’s sort of like unions negotiating collective bargaining contracts, except that with the collective bargaining, there’s an opposition.”
—Right, which is why the big 3 are doing so well. Everyone knows a big 3 worker makes more money than a GM worker, yet all across the South people are opposed to labor unions because they kill jobs. That’s why corporations are moving to Texas, Arkansas, Mississippi, and Georgia. The south is business friendly, we have low taxes, less regulation, and generous incentives for anyone that comes here.
“The aim, of course, was to make “public service” more attractive to conservatives.”
—Yet liberals always want teachers to be paid more, liberals always support pensions for state employees, health insurance and all kinds of benefits. So why are you blaming conservatives?
You just don’t get it, nothing is free in this world. Americorps for example pays people to volunteer, which defies logic but I guess they figured out most people don’t want to do something for nothing.
The Peace Corps PAYS for you to serve 2 years, not only with food and housing but $25,000 after your “tour” of duty.
Besides, the two charities in question are liberals. I know liberals like their money, during the presidential inauguration, a runway was reserved for the exclusive use of 500 private jets. Oh, and what was the price of that inauguration? $130 million? Bush’s second inauguration cost $45 million.
If Obama was really about change he would have canceled the inauguration and donated all the money to charity.
I guess when it comes to the left, it’s “do as we say, not as we do.”
posted by Jorge on
Look, capitalism is an amoral institution. The people who earn lotsa lotsa money cannot be called good people. Good people sit in monestaries and convents and abstain from sex and money. In the real world, we need incentives to promote behavior, and capitalism is the simplest, least intrusive way to do it. What the market will bear more often than not turns out to be the smoothest way to run society.
Tinkering with what capitalism will do naturally requires great forethought and planning to avoid sabotaging things by accident, and makes the system more inefficient. The practical harms by far outweigh the symbolic moral benefits in a lot of situations.
Where I think conservatives go wrong is assigning a moral positive or neutrality to the fact that capitalism makes people rich. Rich people do not get in heaven and I personally do not think people become rich by living a virtuous life. Rich people just happen to make things on this world easier for everyone else. All countries owe their success to less than stellar characters.
posted by BobN on
Bobby, you’re so caught up in the us vs. them mentality that there’s little point in discussing anything.
I’m not poor. I grew up lower, lower middle class. My complaints about the executive compensation racket are based on two experiences: 1) having been in it (and having benefited by it) and 2) owning stock in companies run by self-awarded multimillionaires.
posted by JimG on
“Who gives you the right to decide how much I need to live a decent life”
How about when you say your a “non-profit” and DO NOT pay any taxes and tell me that in order to accomplish your worthy goal you REALLY need my hard earned money. And then out of that kitty you take 350K for your own pocket!
If you want to drive a boat go to Wall Street!!
Your high salary/best talent rings false. Isn’t the whole point suppose to be about “altruisim”?
And your “socialist” remark is rubbish!
posted by dalea on
Found a charity rating site for the Gay and Lesbian Center of Los Angeles, the one Lori Jean runs. It has a budget of over 40 million dollars, several hundred employees and spends 82.7% of revenues on programs, 9.7% on administration. This is the organization Lori Jean runs. It is rated at 3 stars which is:
‘Exceeds or meets industry standards and performs as well as or better than most charities in its Cause.’
The center receives over a quarter of a million client visits per year. It sponsors direct HIV research. It operates a home for gay children who have been thrown out. It operates GLBT senior housing. Lori Jean does an excellent job running the Center. Her salary is not out of line. Politics is just not her forte.
http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4016
posted by Bobby on
“How about when you say your a “non-profit” and DO NOT pay any taxes and tell me that in order to accomplish your worthy goal you REALLY need my hard earned money. And then out of that kitty you take 350K for your own pocket!”
—Harvard University is a non-profit, how much do you think their president makes? I’m pretty sure it’s not $350.
The Red Cross, The Humane Society, Habitat for Humanity, the list goes on an on, they all have at least one person making a ton of money.
“Your high salary/best talent rings false. Isn’t the whole point suppose to be about “altruisim”?”
—And Ms. America is supposed to be about inner beauty and talent. Come on! Why do you think charities host galas with fine wine, gourmet cuisine, celebrities, fabulous entertainment? The reason is obvious, charity is boring unless you wear a tuxedo and let the world known you’ve just donated $10,000. Judaism teaches that the highest form of charity is one where the beneficiary doesn’t know the benefactor, in other words, you have to donate anonymously. So when Warren Buffet donated a billion dollars, he was just being a showoff. If he was truly altruistic, he would not have called a press conference. You people really need to be more cynical.
As for you BobN, it seems to me that you feel guilty about being rich, if that’s the case, the income tax form allows you to donate more of your money to the IRS. You can also give more to charity.
What I don’t like is seeing one person who has made it tell someone else “sorry, you can’t make it!” That’s simply not ethical.
Joe Solmonese did not work his ass off to end up with a measly $100,000 salary. Altruism my ass, this is about self-respect. Today I saw a job for a copywriter that pays $35,000, I didn’t even bother to apply because I have 5 years of experience and that’s the kind of salary you pay a fucking junior. I’m not a fucking junior and neither is Joe Solmonese nor the man who will replace him someday.
posted by BobN on
“That’s simply not ethical”
One last try. It is not ethical for top executives to participate in a system which is designed to favor top executives above all others. “All others” includes subordinates AND stock holders.
Having execs set the pay for execs is a SCAM.
You think I’ve got some bleeding-heart problem about the poor. While I confess to a slight case, I’m more concerned about how the executive class has managed to deprive the OWNERS of businesses of their rightful dividends.
Weird, huh?
posted by Bobby on
“One last try. It is not ethical for top executives to participate in a system which is designed to favor top executives above all others.”
—Is it ethical to hire people based on minority status? Is it ethical to outsource jobs? Is it ethical to tell fat employees to lose weight or to fire them for being fat? Is it ethical to fire smokers?
The system was never ethical to begin with, if someday I reach the executive level, I’m going to expect a great salary with lots of perks for all the suffering I had to endure to get there.
“I’m more concerned about how the executive class has managed to deprive the OWNERS of businesses of their rightful dividends.”
—Just because you bought Microsoft stock doesn’t mean you own that company. Bill Gates is the REAL OWNER. He created that business, he makes it succeed, you buying or selling stock does very little. In fact, one of the reasons some owners keep their companies private is to avoid self-righteous stockholders telling them how to run their businesses.
I don’t believe in ethics because everyone does what they want, I believe in doing whatever it takes to succeed in a cutthroat world.
Socialism is not the answer, in Europe you’re still going to find rich people doing whatever they want, executives with outrageous compensation, civil servants with generous packages, and the middle class and poor struggling with high taxes, high prices, long lines at the hospital, and all the crap poor and middle class people have to endure.
Life is like American Airlines, some of us can afford first class, others coach, but the solution is NOT to get rid of the first class section. The solution is to expand that first class section, lower the prices so more people can get there.
Cut regulation, lower corporate taxes, lower capital gains, you do that and lots of poor and middle class people will start their own businesses and pay themselves outrageous salaries if they can afford it.
posted by TomJinBA on
Interesting subject and good discussion. I’ve been working in the non-profit world for 30 years (volunteer board member and paid staff), and I can tell you that in my experience, development directors and executive directors who are motivated by their “need” of a yacht or a place in Aspen are failures at what they do. The best, most competent, most successful non-profit executives are motivated by the mission of their organization. It’s the nature of the biz. High pay attacts the greediest, not the most competent. Donors can smell a fake a mile away. The mission attracts talent in the non-profit realm, not the pay.