Compensation for Jewish Guild for the Blind CEO Questioned

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March 21, 2012; Source: Village Voice

Should the CEO of a $300 million dollar nonprofit agency largely sailing along on millions of Medicaid dollars earn nearly four times the salary of the President of the United States?

In 2010, the CEO of the Jewish Guild for the Blind, Alan Morse, J.D., Ph.D., earned $880,000. In 2009, the year after the crash heard ‘round the world, the Guild was $5 million in the red, and yet Morse’s compensation peaked at a whopping $1.5 million, an 82 percent hike from the previous year (when he reaped a not-too-shabby $843,502). In all three years, Morse’s pay put him in the top one percent of income earners. To put all of this greenback gobbling in perspective, CharityWatch states that charities with revenues between $200 million and $500 million pay their chief executives an average of $430,000. For instance, Komen for the Cure’s Chief Executive Nancy J. Brinker earned $417,171 in 2010.  

Is Morse worth more than double the average pay for a nonprofit in the Guild’s size range? Consider that while he is reaping his larded wages, essential programs over the last year at the Guild have been cut and low-wage Jewish Guild heroes to the blind were losing their low-five and even four-figure jobs providing rare and much appreciated aid, therapy and solace to the aged denizens of the Guild’s nursing homes.

Professor Bruce Kogut of Columbia Business School notes that nonprofits do have to provide sizeable compensation to their leaders because they are competing for top-notch talent with all sectors of the economy. However, in regard to Morse’s pot of gold, Kogut ads, “There should be transparent reasons for this pay. A president of a university can make $1 million; however, the budget can be several billions of dollars, especially due to hospitals that a university often runs. So $1.5 million [Morse’s peak salary] by this benchmark seems high.” Will Morse’s salary fall as more media light is focused on his compensation? Should it? –Louis Altman

  • Patrick Bell

    In the wake of for-profit accounting scandals, several states enacted some sort of integrity laws, making independent audits a statutory requirement above a certain revenue threshold. In California, the legislature went one step further in requiring that boards justify the total compensation (salary plus any benefits or perks) of the CEO and CFO as reasonable. That means starting compensation as well as increases. This requirement applies to all charities in California, not just those who trigger an audit above the $2,000,000.00 threshold. To my knowledge, there is no case law on this requirement which became effective in 2005. However, boards are on notice that they must be able to justify compensation increases.

  • Lee

    They have been blocking implementation of this union vote by hiring mainly from temp agencies.