I have regularly argued that the traditional bias that the public has when discussing the pay of nonprofit executives and employees is misguided. The public argument trends toward saying that doing good also means not being paid well because, well, these jobs are about doing good. The counter argument is that this is not the basis for the argument. Duties, performance and comparability are good rationality for establishing pay rates, not an unrelated principle singularly focused on mission.
As an example to my point, when applying the principles of duties, performance and comparability to the pay rates of the LA Department of Power and Water it is easy and justifiable to be outraged. Here's what I'm talking about (from the LA Times):
As detailed in a recent paper by TransparentCalifornia.com, DWP employee pay is up to three times greater than that of its private-sector counterparts. The average full-time, year-round DWP employee made $114,941 in 2013. This is despite providing a level of service that in 2011 had it ranked the 13th most hated company in the nation in one survey.
Inflated pay at DWP is not new. The L.A. Times, Bloomberg and the Los Angeles Daily News have reported on it for years, the latter going so far as to include a prominent editor's note: “If you read only one story today, I hope it will be this one. The DWP's bloated salaries, poor management and soaring rates are the most glaring example of what's wrong with Los Angeles.” That was in 2007.
DWP custodians made an average $70,893 in total pay in 2013, compared with the Los Angeles market average for janitors and cleaners of $26,810, as reported by the Bureau of Labor and Statistics. DWP plumbers earned an average of $121,450, compared with the BLS average wage for Los Angeles plumbers, pipefitters and steamfitters of $65,350. DWP security officers earned $87,021 — more than triple the $26,640 BLS average for Los Angeles security guards.
Really? So this is indeed data to get riled-up about and should indeed be the target of conversation and action (the DPW wants rate payers to have a huge bump in their rates). But on a higher level, this is also the type of data that the public should use when thinking about nonprofit salaries in general. Rather than getting riled-up over a salary they don't make, consider first what other folks with similar salaries and responsibilities make (in all sectors) and next, consider the job. These should be the basis for having the conversation about nonprofit, particularly CEO, salaries.