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Executive Compensation Policy

Executive Compensation Policy
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EXECUTIVE COMPENSATION POLICY

The executive committee is responsible for determining the compensation package of top executives of the organization and conducting an annual review to assess the need for adjustments. The committee meets independent of the executive director to discuss performance, internal and external equity, and retention of its executive officers. In the absence of a fully developed executive committee, an employee with HR duties, that is not an officer of the organization or an independent advisor, will take on the responsibilities of the executive committee in the annual process for determining compensation. 

KFG’s primary objective is to provide a reasonable and competitive executive compensation opportunity consistent with market-based practices. In doing so, KFG seeks to ensure that pay is perceived to be fair and equitable and the process for determining compensation aligns with its mission and values. The process is as follows: 

Market Research

The executive committee will obtain research and information to make a recommendation to the full board for the compensation package (salary and benefits) of the Executive Director and other executive officers of the organization. Comparability data obtained through market research should be derived from diverse sources that document compensation levels for similarly qualified individuals holding similar positions. 

to the unique nature of the organization, comparable data should come from both tax-exempt and for-profit organizations that share space and exist within the same industry. KFG understands that the market for executive talent may be broader than the nonprofit sector, and will use both market segments to benchmark pay. 

This data may include: 

  1. Salary and benefit compensation studies by credible, independent sources;

  2. Written job offers for positions at similar organizations or online job postings with listed salary information 

  3. Documented telephone calls about similar positions 

  4. Information obtained from the IRS Form 990 filings of similar organizations

  5. Other published survey data for specific functional competencies such as sales and development

Data that is confined to an individual’s geographic location should not be used to determine compensation. KFG is a remote organization that does not differentiate pay based on an individual’s primary residence. 

Performance Review

The Executive Director and other executive officers of the organization will participate in an annual performance review. These evaluations will be used in concurrence with the data above to determine annual merit-based compensation changes. 

Documentation & Approval 

The executive committee, after review of data collected, will appear before the full board and make a recommendation for the compensation of the executive officers. A quorum must be present to approve the recommendation, and the board must document how it reached its decisions, including the data on which it relied, in the minutes during which the compensation was approved. Documentation will include:

  1. A description of the compensation and benefits and the date it was approved 

  2. The members of the board who were present during the discussion about compensation and benefits, and the results of the vote

  3. A description of the comparability data relied upon and how the data was obtained

  4. Any actions taken (such as abstaining from discussion and vote) with respect to consideration of the compensation by someone who is otherwise a member of the board but who had a conflict of interest with respect to the decision on the compensation and benefits

Resources

Bureau of Labor Statistics, Occupational Outlook Handbook (free) https://www.bls.gov/ooh/

TriNet’s Compensation Benchmarking Tools (fees)

SHRM Benchmarking Tool (membership needed) https://www.shrm.org/ResourcesAndTools/tools-and-samples/Pages/Interactive-Tools.aspx

Linkedin (free) https://www.linkedin.com/salary/







Comments
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Reem Hassan:

may not be necessary to add this…keeping in mind future execs maybe best to keep language general