What Would Fair Media Coverage of Exec Salaries Look Like?

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February 20, 2013; Source: Technician

Last week in North Carolina, The News and Observer reported that the husband and wife team leading the Goodwill Community Foundation brought home a pair of compensation packages that totaled nearly $800,000. President Dennis McLain received more than $430,000 in compensation last year and his wife, Linda, the foundation’s vice president, brought home $365,000. The News and Observer compared these packages to that of North Carolina’s governor, who makes $140,000, and framed the pay packages against the backdrop of need in the eastern North Carolina area.

This editorial in Technician, the official student newspaper of North Carolina State University, cries foul and suggests that it is unfair to compare salaries across sectors, pointing to the fact that, last year, the American Red Cross paid its president, Gail McGovern, $621,779 (though this is also an odd comparison, in NPQ’s opinion, since these are two organizations of very different sizes and purviews).

The Technician editorial talks about salaries as a proportion of financial receipts, which NPQ agrees is a particularly silly measure since it is so sensitive to organizational type (a point not made by this author). Goodwill, which brought in $36 million in receipts, paid 1.19 percent of its revenue last year to the president while the YMCA of the Triangle Area paid CEO Doug McMillan $289,444, which amounts to .5 percent of the organization’s overall revenue. Dana Boole of the Community Affordable Housing Equity Corporation received what amounted to 2.8 percent. All of this, writes Technician Deputy Viewpoint Editor Joseph Harvey, suggests that the story is slanted. Of course it is, but Harvey concludes, “Who cares about how much the McClains made last year?”

The short answer is, “everybody.” People in this country have a strange relationship to salary. Many consider any question about their own pay a rude intrusion. As Kim Klein often says, we feel more free to talk about our sex lives. So it makes discussion of the topic (unless we are talking about issues of low wage workers) exciting.

But the fact is that a nonprofit salary is not just any salary. The salary of an executive running an organization that takes donations from the public and explicitly serves the poor will always be placed against the backdrop of the poverty being addressed and the many donations made. And why not? The fact that you have two people in the same family in leadership positions making relatively high salaries will be an issue for constituents. The News and Observer knows its audience. Many factors figure into the setting of salaries, but if the possibility of negative public perception is not one of them for your organization, perhaps it’s time to take a closer look at the nature of the relationship between your organization and its stakeholders. –Ruth McCambridge

  • Allen Baldwin

    The donor should know through a review of the IRS 990 and know what the Executive Director AND their family earns. Also, they should know WHAT portion of their high earnings are donated back to the charity. An ED and wife earning $800,000 a year (combined) should be donating no less than $80,000 back to the charity. What DO the McLains donate?