WASHINGTON, September 9, 2015 - Life at the top of major nonprofit trade organizations appears to be improving once again – at least when it comes to compensation packages that Agri-Pulse tracks in our annual CEO reports. C-Suite pay trended downward from 2008 to 2010 - after the recession took a hit on many organizations and their funding sources.
But again this year, compensation packages are on the upswing, according to Robert Skelton, vice president of administration for the American Society of Association Executives (ASAE). From 2012 to 2014 (the most recent ASAE survey available), the median base salaries for CEOs at trade associations increased from $152,000 to $181,562. ASAE represents more than 21,000 association executives and industry partners from some 10,000 organizations.
Skelton has seen a lot more retirements and postings for jobs at the CEO level. And depending on the candidate, the salaries won’t likely decline just because an individual is new to a nonprofit association.
“With the number of positions I’m seeing open, I don’t know if there will be as many qualified candidates - which can create some more competition,” Skelton adds. “You might actually see salaries going up to attract new hires.”
Skelton sees more nonprofit boards doing their homework when it comes to CEO compensation and using compensation consultants to help with the analysis – a trend he describes as “healthy.” Board members have heard all the talk in the press about “fiduciary responsibilities” and compensation for CEOs in public companies getting “out of hand,” he explained. “Board members see that. They want to make sure that what they are doing is reasonable for the sector they are in. Boards are really trying to do a good job in making sure that whatever they are paying at the top levels makes sense and is supported by the data.”
Skelton says there is no cut and dried formula for figuring out what to pay, based on benchmarks like annual revenue. Different factors come into play, he explains. “For example, in the D.C. area, where you have a large concentration of association nonprofits and the federal government, the pay scales tend to be higher. The same applies for jobs in Chicago and New York, while you might not pay as high of levels in places like St. Louis.”
Boards also need to consider the types of industries they are representing. “It’s just not going to fit well with business owners earning $50,000 a year and paying a CEO $100,000,” Skelton says.
“The converse of that is also true. If you have an organization of very wealthy businesses, the association is probably paying their CEO a lot more. There’s an expectation that if you want someone who knows the business, they will have to be compensated at a higher level.”
Rather than a big base salary, Skelton sees more nonprofit associations offering bonus packages linked to performance. “Folks don’t want to just give out the big salaries anymore,” he says. “Boards want it to be tied to good metrics. They want strategic thinking about where they want the association to go and how to measure that performance.”
Skelton’s observations coincide with many of the same trends seen in the annual Agri-Pulse 2015 CEO compensation report, which was expanded this year from 89 to 104 nonprofit associations and national checkoff boards dealing with farming, food, energy and environmental issues. The data was collected from either the most recent information posted on www.Guidestar.org, the world’s largest source on nonprofit organizations, or from USDA’s Agricultural Marketing Service (which oversees checkoff boards).
A record 17 CEO slots have changed since last year, due largely to retirements and a handful of job changes. For example, Chris Novak moved from CEO of the National Pork Board to CEO of the National Corn Growers Association, replacing retiring Chief Executive Rick Tolman. But it’s not easy to compare individual salary levels because the data the Internal Revenue Service requires all nonprofits to file – in Form 990 – are sometimes filed up to two years later. Agri-Pulse subscribers can download last year’s CEO report here.
As we broadened our list to include more energy and environmental associations, we gained a new “top gun” in terms of compensation. American Petroleum Institute CEO Jack Gerard tops our list with a base pay of more than $2.5 million plus a bonus of over $1.2 million. When you include other compensation, retirement and other deferred payments, as well as tax free benefits, his total compensation package in 2013 was about $14.1 million at the helm of an association that boasts hefty revenues of almost $225.5 million. In contrast, groups representing ethanol interests and located in Washington, D.C., paid less. Growth Energy CEO Tom Buis, for example, earned $518,269 in base pay. Renewable Fuels Association CEO Bob Dinneen earned a base of $325,000 with a bonus of $125,000 in 2013.
Banking organizations came in second and third in terms of top base pay for the executives we surveyed, with Camden Fine, CEO of the Independent Community Bankers Association, earning $1.4 million and the American Bankers Association Frank Keating II receiving $1.3 million in base pay, both in 2013.
Pamela Bailey, CEO of the Grocery Manufacturers Association – with a base pay of about $1.2 million – now moves to number four on our list of highest paid executives, but she remains our top ranking female CEO. Her total compensation dropped from over $3 million in 2013 to $2.66 million in 2014, largely because bonus and incentive pay dropped from $911,157 in 2013, after she helped her industry fend off state GMO labeling initiatives in California (2012) and Washington state (2013) to $416,680 in 2014 – a year when Vermont successfully passed an initiative to label GMOs – despite her members efforts to defeat the measure. Please see the tables attached for compensation data analyzed by Agri-Pulse for 2015.
Editor’s Note: Dan Martin contributed to this article.
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