In its annual review of executive compensation for the top diabetes non-profits published 8 August 2017, JDCA (Juvenile Diabetes Cure Alliance) collected data from the top CEOs, noting that those from JDRF and ADA are in the top 1% of all earners in the US. However, very little executive compensation is tied directly to performance!
Executives are paid the majority of their compensation whether or not they meet their main objectives or make progress toward a cure for T1D. This is very different from most for-profit companies where the majority of executive pay is directly tied to performance. By leaving incentive pay off the table, the JDCA believes the ADA and JDRF are missing out on an effective way to prioritize the central goal of each organization’s mission—finding a cure for T1D.
However, the current JDRF and ADA CEOs are paid more than twice as much per dollar of annual revenue as the CEOs of the American Heart Association and the American Cancer Society, two of the largest non-profits in the world.
Competitive executive compensation is important because it helps to attract and retain top talent. However, the JDCA believes it is also important to hold these highly-compensated executives to a level of accountability and performance commensurate with their salary. As long as compensation remains untied to performance, executives will remain unaligned with donors who want resources allocated to finding a cure over all else.
Executive compensation levels at the largest diabetes non-profits are determined behind closed doors by a committee within the board. The Board of Directors does not publically communicate any aspect of strategy or rationale for compensation levels and the average donor is given no input or transparency into the decision.
I couldn’t agree more! I’d love a job where I get paid A LOT without any consideration of whether I am meeting my goals or achieving my performance standard. Donors raise a lot of money for these organizations. Shouldn’t there be some accountability? What do you think?
Read more: Executive Compensation at Major T1D Non-Profits Still Not Tied to Cure Progress