Overcompensation infecting non-profits

“Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor.”— Thomas Jefferson

When does one’s salary the leader of a company or organization make become distraction or a detriment to that organization’s goals?

Sunday’s Austin American- Statesman had a good story about the salaries of non-profit organizations, and how while many feel their pay is deserved, others think it’s overboard.

Since I have two Scouts, the salary that caught my attention was that of Robert Mazzuca, chief scout executive for Boy Scouts of America. He pulled down a cool $1.2 million from BSA in 2008, while the organization lost $20 million. His retired predecessor has a golden parachute, drawing almost $700,000 in retirement benefits and consulting fees.

I think Scouts is one of the most valuable organizations in the nation—training our next group of leaders, getting kids outdoors, and helping out needy children in the process. Our local scouting volunteers are wonderful, doing meaningful activities that will create memories far more vivid than video games.

So Mr. Mazzuca’s salary seems a bit much, to this obser ver, particularly since there was not a giant increase in enrollment numbers nationwide.

One recent scout fund-raising event here saw $15,000 go from Rockdale to the Austin offices, and not so much as a thank-you note was returned.

One has to wonder how much of the $15K went to Mazzuca. Indeed, how much of the popcorn sales, pledge drives and other fund-raisers head to the national administrative offices? And what does that structure teach our young men?

Locally, the Methodist Men and individual givers pitch in to keep the kids in achievement patches and pins.

Again, I think Scouts is great. But I also think the greedy process of corporate CEO pay — where board-member friends heap lavish benefits upon CEOs in a game of financial “top this” — has slithered its way into our non-profits. CEOs have what amount to agents going to bat for them, convincing the boards of non-profits of their client’s worth, telling them how much more they would be worth in the private sector, and funneling more resources from the organization to the top of the chain.

Certainly, no one is expected to work for free, I’d bet there are plenty of qualified individuals who’d do what Mazzuca does for less.

On Easter Sunday, Christine and I caught the CBS television show “Undercover Boss.” In that episode, the Roto Rooter CEO went around with the rank-andfile workers and did blue-collar work. This man also listened to the struggles of the average Joe worker, and at the end of the show, gave some gifts that showed compassion on his part.

Undoubtedly, most of the CEOs that get media coverage have lots of zeroes on their paycheck. So it was good to see that one company leader made a pledge not to ship jobs overseas, giving his workforce a thumbs up and comfort of living without the fear of having a pink slip waiting on them at any time.

(In the for-profit coporate world, for the record, while we all deal with the fallout of Alcoa shuttering Rockdale Operations, CEO Klaus Kleinfeld made $11.2 million in 2009. His predecessor Alain Belda pulled down $13.9 million in 2008.)

The Japanese CEO pay model says the top boss will make no more than 16 times what an average worker does. No doubt they are more modest and grounded.

While I’d be against mandating what pay can be, there is an unspoken sense of decency that has all but been obliterated by today’s money hungry, Gordon Gekko wannabees. “Greed is good,” was that movie character’s catch phrase.

With the genie out of the salary bottle, doling out big buck wishes, it may be impossible to stop this rising tide of over-compensation. But non-profit executives should heed their calling that, hopefully, means more than a paycheck.

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2010-04-15 digital edition

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