Setting executive compensation – How to attract the best without attracting criticism

Description

Abstract: Nonprofits need to offer enticing executive compensation packages to attract and retain top talent. But the IRS can impose excise taxes if it considers a nonprofit executive’s compensation “excessive.” At the same time, nonprofits must provide adequate incentives to ensure executives are accountable for achieving organizational goals. This article examines how to attract the best candidates without overpaying them or running afoul of the IRS or watchdog groups. A sidebar offers ways besides cash to compensate staff.