Determining CEO Salaries Within Nonprofit Human Services Organizations
Abstract
A lack of standardized organization performance measurement makes it difficult to measure nonprofit organization performance. Some nonprofit organizations measure their performance based on funding received; others measure performance based on strategic plans. This multi-case study explored the guidelines used by the board of directors within nonprofit organizations in determining CEO salaries. The population for this study was the board of directors of nonprofit organizations in Columbia, South Carolina with experience using methods to determine salaries paid to CEOs in the nonprofit sector. Stewardship theory was the conceptual framework for this study. Data collection included semistructured face-to-face interviews with 3 board of directors and an exploration of company archival documents. Using Yin's 5-step data analysis method, along with member checking to ensure the trustworthiness of interpretations, 3 major themes emerged: organizational comparison, similarities, and measurement of performance. Recommendations for action include ensuring the organizational performance is a determining factor for salary determination, surveying for-profit organizations' performance as a comparison measure, and continuing to provide leadership within the nonprofit sector. The findings of this study may educate stakeholders on consideration for salary adjustment within the nonprofit sector. Social implications include providing a better understanding for nonprofit organizations' measurement of performance and increasing knowledge of what influences salary.
