Overpaying executives is a hot topic this year, as legislators
and the public fume over salaries in the financial, automotive and
other industries receiving federal bailout dollars. In the
not-for-profit arena, the IRS is also cracking down on salaries it
considers to be unreasonable and is requiring stringent information
about compensation on the new Form 990. To protect yourself from
sanctions, you need to make sure that your board of directors, at
the time it sets an executive salary, arrives at a
"reasonable" amount based on comparables for similar
positions and adequately documents that research. And, if
compensation is above the norm, you need to be ready to justify
it.
Excessive executive compensation is a controversial topic in the
current world of business, in both the for-profit sector and
not-for-profit sector. In the not-for-profit industry, the IRS is
cracking down on salaries it considers to be unreasonable and is
requiring stringent information about
