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NEWS

Understanding this salary survey

By Mark R. Graham

Comprised of salary details from 551 organizations, this presentation of Inside Compensation data analyses is one of the largest reports published by CEO Update.

Nearly two dozen groups were added to this year’s report as their revenue climbed to more than $12 million, the threshold for inclusion, and this also serves as an indication of improving financial circumstances for associations.

CEO Update also identified and captured more organizations that met the report’s parameters, including large standard-setting professional societies like National Board of Medical Examiners and National Registry of Emergency Medical Technicians.

Add to that the 37 groups reporting more than one CEO salary in the latest available tax year (one group reported three CEO salaries) and the total number of salaries reported totals 592.

Instituted last year, the new $12 million threshold—up from $10 million—includes revenue from known tax-exempt affiliates. However, there are some unknown elements of an association’s total revenue.

First, CEO Update relies on the disclosure of affiliates in Schedule R of IRS Form 990, which asks organizations to identify tax-exempt affiliates. Researchers have found some omissions in those disclosures, which can lead to under-reporting of revenue. Also, while associations are required to disclose for-profit affiliates, they are not required to report revenue for those entities.

CEO Update information-gathering focuses on take-home pay—the one-year amount the chief executive received during the tax year—the figure reported in the earnings column. While current IRS disclosure requirements provide more details on compensation than previous iterations, there are still some limitations.

The most common constraint is deferred pay, which appears twice on tax documents: once, when earned but not yet paid; again, when finally paid in some future year. For clarity, this report separates deferred pay in the salary charts in print and online.

As part of CEO Update’s due diligence in salary reporting, researchers sift through additional explanations of CEO compensation buried in Schedule J, the section in the IRS Form 990 where much of this information resides.

When using this report to benchmark compensation, experts tell CEO Update the base-bonus combination should be of primary importance, especially when calculating pay increases.

Deferred and other pay should be considered, but those elements require closer analysis across several years to understand the full terms of the retirement compensation arrangement.

In this print issue, the earnings column includes base and bonus pay as well as executive retirement plan payouts (SERP), deferred bonuses paid in the tax year and severance payments. See the endnotes on page 25 for SERP and other information on 592 CEOs. Online, at CEOupdate.com, all five salary categories are listed separately.

  •   Base pay
  •   Bonus pay
  •   Other pay (severance, deferred salary payouts and awards based on tenure)
  •   Deferred pay (money earned but not yet paid to the CEO)
  •   Nontax (value of nontaxable benefits, such as health insurance premiums)

This is the first of five special CEO Update Inside Compensation reports planned for 2017. Upcoming reports will examine pay of top-earning lobbyists, highest-paid staffers, CEOs at midsize organizations and CEOs at small associations.

In the fall, CEO Update will publish the 2018 Salary Guide, a 450-page volume that includes compensation details on all national associations and nonprofits with more than $1.7 million in revenue, plus salary data for up to five senior staffers.

Data for this report was mined using CEO Update’s database, Association Intelligence, culled from the latest public disclosure documents available from tax years 2015 and 2016. The IRS allows organizations up to 10 months and 15 days to file tax documents, meaning that a group with a tax year ending Dec. 31, 2015 could have filed its Form 990 just a few months ago.