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As a Board member of a non-profit organization, how should executive pay be based?

You are a member of the Board of Directors for a non-profit organization. A new executive director has just been hired. The previous executive director received a salary and no variable pay. Several Board members have indicated they would like the new executive director to be paid based in part on the organization's achieving its goals would be a good recommendation?

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Dear Student,

In my opinion, it is a fair recommendation.

It is true that it is a non-profit organisation but it is equally true that the organisation has some goals. The executive director is supposed to achieve the ...

Solution Summary

In a couple of paragraphs, the solution presents the options for how to base executive compensation in a non-profit organization.