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Association Bisnow
   
April 29, 2008
 
       
 

NO SLOWDOWN
IN CEO PAY


 

Corporate belts are tightening all over the place, so we had to wonder: What's the effect of the economic downturn on compensation for association CEOs? Not much, says Charlie Quatt, a man in a position to know.  He's a comp expert and head of Quatt Associates, which develops pay packages for trade associations, media companies, and educational institutions

 
 

Charlie doesn't see those rising CEO salaries stopping anytime soon. Beyond the supply and demand issue—it's not easy finding people with the political and other skills to influence public perception of an industry—he says a struggling economy may actually increase the amount that trade groups are willing to pay for CEOs and lobbyists who can produce helpful results on the Hill. Also, he notes that the going price of CEOs is so available through public data that the market is now "driving itself." One of his clients, Guide Star, aggregates such info—two minutes on their website taught us that Dan Glickman of the Motion Picture Association of America earned $1.2 million in wages (not bonuses or other perks, mind you) in 2005. To help associations deal with "sticker shock" over the cost of a CEO, Charlie has at times created scorecards that not only allow a hard measure of a CEO's performance, but educate the board on how much value the CEO's success will bring.

 

 

Performance goals are often tied to incentives (Charlie describes Washington, full of rainmaking lawyers and lobbyists, as a town built on incentive pay), which at large trade associations average about 35% of a CEO's compensation. Just back from a Boston speech on the topic to the Association of Governing Boards of Universities and Colleges, Charlie notes that "group incentives"—bonuses offered to a wide group of employees, based on, for instance, trade show revenue—are a good way of building a sense of community. As for the new 990 (the IRS reporting form for tax-exempt organizations, of course), Charlie doesn't see it impacting salaries: "The difficulty will be with compliance."

 

 

Here's some unexpected compensation: a photo taken by Barry Goldwater, whom Charlie long admired, given him ten years ago by the late Senator's widow. He actually started out in academia, not politics. The former literature and linguistics professor at Harvard and Princeton (who still reads 2-3 books/week), found the contemplative campus life at odds with his "doer" personality. So he did some time at B-School (Harvard again), then into HR at GE and Mobil Corp, where he began honing his skills in compensation.

 
 
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