10 Things to Say When Dealing with Reports of Excessive CEO Crap

2006_09_11 003Image by DennisSylvesterHurd via Flickr

Don’t you feel just a tad sorry for those aid group CEOs who have recently been slammed for “excessive” executive compensation by USA TODAY? And whatsup with Senator Leahy?

Sigh! Everybody is a critic these days; don’t you just hate that?

I started reading the online comments and I just had to stop; it was unbearable – oh, the ignorance! Someone said “any nonprofits overhead costs (including salaries) should be no more than 5% of gross. Anything else is unjustified stealing from the charity they are supposed to be serving.” How could anyone say that? Another suggested a salary cut up to 50%. So unbearably cruel. My own neighbor said this type of compensation should be capped at 150K. Capped? Good gracious me! (He’s going to get a $2/bottle of wine the next time he comes over for a drink!).

How can anyone – anyone live on 150K a year?

That reporter Ken — did a good job but he just has no idea how much work a top executive under a USAID grant does and what types of responsibilities and accountability go with it. Truth to tell, folks generally have no idea what it’s like working in the developing world. So we’ve come up with ten things to say if you need help dealing with this crap

(Tips: 1) It might help if you practice this in front of a mirror; 2) don’t mention the USAID paperwork, it’s boring; and 3) do not/not blink).

#1. This is not really as bad as you think.

#2. This is not a bail-out, period.

#3. This is not a dole-out. Trust me.

#4. My personal philosophy is never to talk about compensation issues and just do the job.

#5. Whatever is the amount of my executive compensation, I have nothing to do with it. Honest.

#6. Whatever they give me, I accept. (Well, except for that $1 a year offer; who the heck can live on that?) I have nothing more to add.

#7. While it is true that I have family members working in this cottage industry, we do it because we love what we’re doing. And we have a higher calling to serve the underprivileged (they don’t like being called poor). What have you done for them lately?

#8. We live frugally. My family can’t even afford a vacation to Vail or St. Moritz in winter, or Martha’s Vineyards in summer.

#9. I’ve never thrown $1.2 million birthday parties like Mugabe, and I don’t have a $7K shower curtain. So you’re barking on the wrong tree, pal.

#10. If President Obama had my job running a development operation in a foreign country — where people don’t speak English, don’t have proper toilets or toilet paper (squat toilets and coconut husks!), no safe drinking water … where bugs are salad sprinkles, where mosquitoes are huge as bats, where beds are either hard as rock or moldy as a week old bread and blah, blah, blah – he would want compensation more than $400K, too. Trust me.

Okay — if none of the above work, just zip it, keep your cool and walk away like a real pro. We’ll chat again, ta-ta!


Quickie: USAID as a “check-writing agency?”

337/365: The Big MoneyImage by DavidDMuir via Flickr

Ken Dilanian of USA Today has an interesting piece on the CEO compensations of American aid groups. (h/t to RL for the tip). These aid groups are for-profit companies and tax-exempt groups paid by USG to deliver foreign assistance programs.

USA TODAY reports that it “examined total CEO compensation of the 10 largest recipients of foreign aid grants and contracts that also derive at least 70% of their revenue from U.S. taxpayers. Each one receives a 501(c)3 charitable exemption from federal taxes.”

Number #1 in the USA TODAY list is American Institutes for Research (AIR); its president was paid $1.1 million in 2007, the highest in the group.

Number #2 is the Academy for Educational Development; its president was paid $879,530 in total compensation in 2007, tax records show, a figure that includes “catch-up retirement restoration payments.”

Number #3 is the Research Triangle International whose 2007 chief executive compensation was $658,844.

The report quoted Sen. Patrick Leahy, D-Vt., who chairs the subcommittee that funds foreign aid: “It conflicts with most people’s notion of what a non-profit organization is about when they’re paying themselves salaries that are several times higher than what a U.S. Cabinet secretary would earn.” This leads the senator to conclude that “an understaffed USAID has become “a check-writing agency.”

To put this in context salary-wise, I’d like to note that the President of the United States earns $400,000 a year. The vice president’s annual salary is $221,100. Secretary of State Clinton earns $186,600. So the top aid CEO’s salary is almost three times that of President Obama; almost five times Vice President Biden’s salary and almost six times that of Secretary Clinton. I don’t know at what level the USAID Administrator is paid, but the top level of the executive schedule in 2009 is paid $196,700 a year.

What might be the compensation of a president of a third world country where these aid groups operate? Philippine President Gloria Arroyo earns about $1,333.33 a month or approximately $16,000 a year. Robert Mugabe of Zimbabwe’s salary was reportedly pegged at US$20,800 for 2009. Oh, wait — I’m not sure it’s wise to mention Fruitcake Bob, given that he has a fondness for expensive parties; remember that $1.2 million birthday bash and his shindig earlier this year? [Oh, frack! too late now!]

Read the whole thing here.