Human Resources Management for Public and Nonprofit Organizations

Compensation 281

Exercise 9.1: Compensation and Retirement Benefi ts from

the United Way of Metropolitan Atlanta

Mark O ’ Connell was the United Way of Metropolitan Atlanta ’ s chief

executive. Two years prior to his retirement he received $ 1.6 million in

cash to supplement his pension, which will be $ 106,000 a year for life.

O ’ Connell ’ s compensation covered salary, bonus, and unused leave. It

nearly doubled over the last decade. In his fi nal year of employment, he

collected approximately $ 446,700, including a car allowance and $ 70,200

in unused leave. During his last three years in his position, his earnings

approached $ 1.2 million, not counting the lump - sum payment.

In 2003, the United Way of Metropolitan Atlanta laid off twenty - four

workers to save $ 1.4 million after an economic slump hurt fundraising. In

2007, it reduced grants to community nonprofi ts by 30 percent.

Not all United Ways compensate their CEOs in a similar manner.

Some are more generous than others.

Questions

1. If you were a board member on the HRM committee of the United
   Way of Metropolitan Atlanta, what factors would you use to determine
   an equitable level of compensation for O ’ Connell?


2. As a board member, you will need to approve the hiring and salary
   of O ’ Connell ’ s successor. What factors should be considered when
   approving his successor ’ s salary and benefi ts?
   Source: Vogel (2007).