Museum CEO – Lowest Full-time Staff Salaries: Is the Ratio a Question of Numbers or Ethics?Posted: January 14, 2019
Leadership Matters writes a lot about salaries, and this week a question on Facebook deserves a closer look. Our colleague, Franklin Vagnone, President and CEO of Old Salem Museum and Gardens in Winston Salem, NC, asked a group of museum colleagues if they knew anything about the ratio between nonprofit CEO pay and staff salaries. Because it’s Facebook, Frank got a lot of comments, but no definitive answers.
Considering that salaries in general, and CEO salaries in particular, are not the stuff of social media conversations, Frank’s question was about as transparent as it comes. In short, he wanted to know what the ratio is between a CEO’s salary and the lowest paid staff member. The numbers for the corporate world are available courtesy of Bloomberg, and range from a frightening 1,205 to 1 to a more modest, yet still dynamic, 133 to 1. But Google the same question for nonprofits and you discover a hot mess. Not to mention, again, no real answers. You’ll find the average ED pay for a US nonprofit hovers between $64,999 to 88,000, but nothing about the salary relationship between leader and staff.
Among the 300 million hits from Google, none of the first three pages offered any answers. There are cautionary articles about making sure nonprofits meet their state’s minimum wage laws, and/or using living wage calculators to set salaries. There are also articles about nonprofit CEO pay and how much might be too much. But neither I nor Vagnone could find anything about adjusting a leader’s salary to make the ratio more equitable.
At Old Salem Museum and Gardens Vagnone and his board have spent the last two years in an equity initiative, making sure all staff receive a living wage as determined for Forsyth County, NC. It’s important to note that a living wage in Forsyth County, North Carolina is NOT a living wage in New York City or San Francisco or Allegany County, Maryland. Living wages reflect, among other things, cost of living, thus locations with high rent, taxes, food costs, and transportation by necessity have a higher living wage than places where the cost of living is lower.
“My goal is not to put my thumb on other people, and keep their pay low. It’s the opposite,” Vagnone said. “Nonprofits are collaborative entities, and we all should be able to be equitably compensated based on experience and skill.” Vagnone and his board use various comparables such as the AAM National Museum Salary Survey along with salary information from similar North Carolina sites, but these don’t confront the issue of CEO pay versus the lowest FT employee ratio. “Nonprofit boards are usually populated with corporate executives,” Vagnone said. “They come to nonprofit pay from the for-profit perspective. In some cases, boards are not always in tune with organizations they manage,” Vagnone added.
After talking through the problem, here is a mash-up of Vagnone’s and my take-aways:
- Someone needs to do some research on this for the museum world and make it available.
- Solving this isn’t an entirely numeric issue. It’s also an ethical issue.
- Boards and CEO’s need to make sure they’ve dealt with the living wage/equitable wage problem for all staff.
- CEO’s/ED’s salaries need to have an ethical and reasonable relationship to staff’s. Those numbers will differ based on a huge number of variables including museum location, operating budget, availability and size of endowment(s), number of staff, and museum discipline, but boards and leaders should be intentional about the ratio.
- It’s important that boards and executive directors work staff salaries in an ethical direction.
Has your organization tackled this problem? If so, what was the result?