Executive compensation in associations and nonprofits is influenced by five major organizational characteristics: size, industry, membership type, activity and location. To benchmark compensation accurately requires identifying similar groups based on those critical, linked characteristics.
CEO Update’s 2022 Salary Guide is the only resource putting powerful benchmarking tools in your own hands by reporting actual salaries of more than 8,000 executives in associations and nonprofits as well as revealing the financial details of organizations, which can help build a list of comparable organizations.
While no two groups are exactly alike, building a list of comparables to benchmark executive compensation requires finding other groups that share similar structural and financial characteristics.
The most accurate dataset will include 15 to 20 organizations of similar size (by revenue), representing similar industries with the same membership type (individual or corporate), that share similar priorities (advocacy, education, meetings, public policy) and are located in the same geographic region.
An explanation of the five organizational characteristics with the greatest influence on executive compensation:
An organization’s size—measured by revenue—is the biggest contributor to executive pay. The larger and more complex the organization, the bigger the paycheck. Comparable organizations should be within +/- 20 percent of your group’s revenue.
For the best benchmarking results, identify organizations representing similar industries or professions in the same sector. If the dataset is too small, look to different industries or professions, if they have similar goals or organizational priorities.
Associations fall into two categories: trade associations and professional societies. Executive pay in standard-setting groups is more closely aligned with those in professional societies. As a general rule, trade groups tend to pay better than professional societies. When benchmarking pay, it’s advisable to compare only similar types of associations.
What does the association do for the industry or profession, such as standard setting, advocacy, continuing education or acting as the public face for the industry? Of course, many associations have multiple activities, but when benchmarking compensation, find organizations involved in similar activities with similar emphasis in those activities.
Cost of living differences across the U.S. do influence pay, but the Washington, D.C. region does have two special circumstances that move compensation even higher. The concentration of associations in the D.C. metro region drives up competition for talented executives. Also, a Capitol-area location usually means the organization is involved in advocacy or public policy in some way, which also significantly influences pay.
Where does your salary fit in with the dataset?
Once a dataset has been created of similar organizations, it’s not enough to find just the median or average in that dataset. Thoughtful consideration should be given to the level at which executive pay should fall in line with the dataset. Should pay be right in the middle? A bit higher than the median? Or at the 75th percentile?
This is a question that can only be answered by the executive and the organization, but there are salient factors to be considered:
— The executive’s contribution toward the association’s goals.
— The organization’s vision for the next five or ten years.
— The importance of continuity and retention of leadership in the organization.
(For instance, if an organization chooses to pay its executive in the middle of a pay range of similar groups, that executive may be lured away for a higher compensation package.
CEO Update can benchmark your pay for you.
CEO Update’s Customized Salary Report can provide you and your organization a detailed report on comparable CEO pay at similar organizations. Please contact Mark Graham at graham@CEOupdate.com for more details.
The Salary Guide is the only resource for association and nonprofit executives that provides actual salary data of thousands of CEOs and senior staffers to put you in control of creating your very own compensation analysis. Order the Salary Guide
CEO Update’s Salary Guide reports the actual pay details for more than 8,000 executives in associations nonprofits, not medians or averages. Learn how to benchmark you salary
Each record of the more than 2,100 organizations in this Guide includes CEO compensation figures and compensation for up to five senior staffers. CEO pay details include take-home pay, base pay, bonuses, and other compensation, which is usually the result of retirement or severance payouts. The Guide also identifies deferred compensation and the value of nontaxable benefits. See a sample page
MORE ANALYSIS, MORE DETAILS, MORE RESEARCH, MORE SALARIES
The top salary guide in the association and nonprofit community is even better for 2020.
- A fourth new salary benchmark is introduced, the combination of base, bonus and deferred compensation, which represented the total annual compensation package.
- Seven-year salary trends
- More analysis on bonus pay by organization type and size.
- Major association activities are now reported to assist in the benchmarking process.
- More accurate data on annual revenue by including revenue from affiliates
- And of course the latest pay details of more than 9,000 executives
The Guide looks at national associations and nonprofits with at least $1.7 million in revenue. See a full list of organizations included in the Guide
Critical to any compensation benchmarking is identifying comparable organizations, based on size, location, type, sector and activity. The 2022 Salary Guide provides all this information so you can easily identify associations and nonprofits that are similiar to your own. The Guide is divided into 12 sectors and provides an analysis of pay trends of each sector. See a sample page
The 2022 Salary Guide is the comprehensive tool to benchmark your own compensation.
Clark, Timmons and Neely share strategies for targeting supporters, leveraging digital tools and when to take a stand on societal issues.
National Association of Manufacturers CEO Jay Timmons (top right) joined American Council of Life Insurers CEO Susan Neely (bottom left) and U.S. Chamber of Commerce CEO Suzanne Clark (bottom right) to discuss association advocacy in today’s politically polarized environment. The panel was moderated by CEO Update Managing Director Mark Graham (top left).
Intense political polarization isn’t making association advocacy easy, but knowing where to focus your efforts, picking which cultural battles to avoid and having a solid communications strategy can help cut through the partisan clutter, according to the leaders of three of the nation’s largest business groups.
CEO Update Live: Associations and Advocacy
The CEOs of the U.S. Chamber of Commerce, National Association of Manufacturers and American Council of Life Insurers joined CEO Update on May 25 for an online panel discussion on advocacy in the current political environment. The CEOs generally agreed that on broad policy issues like infrastructure there was room to find consensus—at least in theory.
“Therein lies the challenge we all have because it is not fashionable to operate in a bipartisan manner,” ACLI CEO Susan Neely said.
Political gridlock resulting from a lack of bipartisanship is only one challenge facing today’s association advocates. The business community is increasingly speaking out—or being pressured to take a stand on—hot-button cultural issues like voting rights and systemic racism. Then there is the COVID-19 pandemic, which accelerated many business and political trends already underway and helped usher in an age of digital advocacy.
The interplay between state, federal and international policy has intensified as well, Neely said. Chamber CEO Suzanne Clark agreed, adding that as a result, “the breadth of the work has really expanded in quite a remarkable way.” The good news is associations have more data than ever before to work with, and that allows them to “hyperfocus” their efforts.
“This past year we were able to do a lot of targeting around, ‘Where did a pro-business, free-enterprise jobs message really work?’ and, ‘Were there voters that we could really turn on to those messages in a big way?’” Clark said.
Clark pointed to the recent special elections in Georgia. The Chamber reached out to about a million people in Georgia suburbs “that really care about free enterprise and jobs” through phone messages and tele-town halls rather than advertising. In a crowded media landscape and highly polarized environment, data is your ally.
“I think the opportunities to lean in to use data to find new tools and to really identify the audiences who care most about your message, and will be there for you, are probably higher and more accessible than ever,” she said.
Data can be a two-edged sword. NAM CEO Jay Timmons said the “weaponization” of public discourse and data has been used to turn association allies into adversaries. He believes the best response lies in having a good story to tell about the real-life impacts of policy decisions. He pointed to the tax reforms passed by Congress in 2017 as an example.
“We can use real examples of investment and job creation and wage growth to be able to make our point when we have to be on the field, defensively or offensively,” Timmons said.
The pandemic has helped associations tell those kinds of stories. The panelists noted that the increased use of teleconferencing has made it easier to reach members of Congress and other decision-makers, given it takes less time to hop on Zoom than to meet in-person. Neely said that when ACLI has a “hot-button” issue before lawmakers, it may bring in 10 to 20 CEOs of member companies “on a moment’s notice.”
“They’ll jump on their planes and they’ll come in and they’ll meet, but it was oddly more powerful on Zoom to be really relevant and timely and not juggling lots of different schedules, and to have the senators’ undivided attention,” Neely said. ACLI will likely continue to use Zoom well into the future, although she added some members still prefer in-person visits.
The Chamber used the pandemic to boost its communications efforts, throwing resources into an interview series featuring guests such as Anthony Fauci and Bill Gates. The “Path Forward” series currently has more than 25 million views.
“Those were numbers that were unheard of for us before,” Clark said. “Some of that was because of the pandemic and virtual (engagement), but some of that was creating that actual franchise.”
Battles over tax policy and regulation are the norm for associations, but increasingly businesses and their advocacy groups are taking stands on cultural issues, sometimes prompting political backlash. The most recent example came when some businesses spoke out against Republican-led voting laws in Georgia and other states that critics labeled race-based voter suppression. As a result, GOP lawmakers threatened to legislatively retaliate against “woke” corporations.
Voting rights is largely an issue business groups have avoided. “The Chamber is not the voting rights expert, and so asking us to go state by state and look at these bills and decide what was good and what was bad … was the wrong answer,” Clark said.
But the Chamber and other associations have weighed in on other cultural touchpoints, throwing support behind diversity initiatives after last year’s Black Lives Matter protests and condemning the Jan. 6 attack on the U.S. Capitol. Sometimes the CEOs themselves have spoken out ahead of the industries they represent. Timmons said he follows the advice of former Vinyl Institute CEO Dick Doyle, who told him, “You should always be one step ahead of your board but not two.”
“You have to understand what their principles and what their values are, but I also think that every single one of us … is blessed to have the platform we have been given,” Timmons said.
“It becomes difficult to try to figure out what you want to speak out on but frankly it’s a gut check. It’s a gut call,” he added. “It’s a good conversation to have with your board chair and with your executive committee. Find out what they want you to stand for, or in some cases stand against, and when your voice will be welcome in the debate.”