Tuesday, January 19, 2010
Dan Pallotta, who blogs forthe Harvard Business Review, has an interesting take on the recent up-tick in scandals over executive compensation in the nonprofit sector. In his post, entitled Executive Compensation, Charities, and the Curse of Proximity, he posits that investigative reporters, the IRS and the public generally ignore eye popping salaries in the nonprofit sector and are happy to let the market rule so long as the organizations those highly paid executives work for have no connection to the poor and distressed. In contrast, the same observers and regulators are outraged when an executive whose organization serves the poor collects a private-sector-type salary. I have no idea if it is true, but it is an intriguing observation. Any empiricists out there want to take it on?