"...the payment was authorized after the board compared Shrage's compensation over the past decade with that of leaders of similar nonprofits and determined he had been consistently underpaid."One "compensation consultant to nonprofits" advised that the IRS "...permits nonprofits to do a 'look back' to determine if their executives have been underpaid, and to make up the possible difference."
OK, then. If CJP leaders don't mind that, as one expert noted, "Shrage's payment 'has very negative optics for the organization,'" and I'm sure they could not care less, and assuming that few believe, as did the Director of Georgetown's Center for Public and Nonprofit Leadership, who told The Forward that this $1.34 million payment was "'ridiculous' and 'above and beyond what is normal,'" what are the potential implications?
- While I don't see this "look back" as creating an avalanche of the same or more by a multitude of federations (after all, whose compensation and benefits numbers did CJP's leaders look at if not those some of the Large City Executives and, of course, the leader of the pack, JFNA), one never knows. I continue to believe that when the Large City Executives meet at some golf resort for their annual "retreat," one of the off-line discussions must always be who is making what and what more in the way of benefits might they enjoy? Who knows.
- For example, Barry also enjoys "chauffeur services" in addition to "an auto allowance or leased vehicle." We know about the City clubs, the Country Clubs, the business or first class air travel, etc. What's next -- a parsonage?
- My personal experience suggests that nothing angers donors within our system more than when CEO compensation numbers are revealed in The Forward or local business journals. No one can possibly quantify the donor and dollar losses attributable to donors disgusted with the compensation and benefits disclosures but system-wide they must be in the millions over time.
- Then there is the reality that in too many instances, not with Shrage whose value to Boston's federation is deemed by that leadership to be beyond measure, where compensation has no relationship to performance. Enter Jerry Silverman. Certainly the Boston compensation consultant entered Jerry's "package" into the mix; and just as certainly, no one noticed that Silverman is and has been among the most egregiously overpaid within the nonprofit world. Were I a federation CEO, I would view Silverman's compensation as the paradigm for which I would strive -- oh, to be overpaid in such an outrageous manner.
Yet, at some point there is certain only the possibility that CJP's action here will become the canary in the coal mine; that federation (and, unlikely, JFNA) lay leaders will look at the totality of what is being paid to their top professional leaders and say: "what the hell are we doing? This has to stop."
OK, so that probably won't happen. But a guy can dream, can't he?
* The newspaper stories revealed that "[O]ver the past decade, (Shrage) has generally earned between $400,000 and $500,000 a year," not exactly chump change, and, arguably, at an appropriate compensation for the years in question