In the 1970s, management theorist Peter Drucker suggested that top executive compensation should be 20 times the amount of the average worker’s pay.
Executive pay continues to be a topic of conversation. A July 2017 Economy Policy Institute (EPI) survey reported that CEOs at the largest firms in America made an average of $15.6 million in compensation during 2016, or “271 times more than the annual average pay of the typical worker.” CEO pay continues to be exceedingly high and growing quicker than the pay of a typical worker…meaning less of an organization’s effort is being shared with the ordinary workers.
Executive compensation is a natural concern of many in the non-profit sector. A 2011 report from the Chronicle of Philanthropy highlighted that the median pay of executives in 132 surveyed charities and foundations increased 3.8% over the prior year.