Compensation Policy

Compensation
Policy

300 Governance

Policy Reference:
Policy Name:
Original Effective Date:
Revised Effective Date:

GV-305
Chief Executive Compensation Policy
10/13/2017
01/01/2021

303.1 Policy Statement

The executive director is the chief executive of Alfalit, serves as the organization’s principal representative, and is responsible for the overall efficient operation of Alfalit. Accordingly, the board of directors agrees to provide fair and reasonable compensation for this leadership role. Alfalit’s Bylaws, Article VII – Executive Director, assigns this responsibility to the board of directors.

303.2 Policy Detail

a. The board of directors is committed to attracting and maintaining a competent leader through competitive compensation, including benefits.
b. Compensation for the Executive Director is considered separate from other staff compensation.
c. The executive committee is responsible for managing the annual executive director compensation process.
d. Annual increases for the executive director depend on the organization’s financial health and may or may not be awarded each year.
e. All conversations related to the executive director’s performance and compensation deliberations are maintained in confidence.

303.3 Procedures

The annual process for determining the executive director’s compensation includes: a. Annual evaluation The executive committee selects an evaluation tool and shares this with the executive director before the process begins. The executive director completes a self-evaluation form and submits it to the executive committee before the meeting in which the evaluation is discussed. b. Comparability data Salary and benefit compensation studies by independent sources; Written job offers for positions at similar organizations; Documented telephone calls about similar positions at both nonprofit and for-profit organizations; and/or Information was obtained from the IRS Form 990 filings of similar organizations. c. Process documentation – The process, including comparability data, and all related decisions, are documented and included in executive committee executive session minutes. d. Board Approval The executive committee presents the preliminarily agreed-upon compensation proposal at an executive session (only voting board members in attendance). Documentation is provided from the executive committee to inform the board how the decision was determined, including minutes of the executive committee executive session meeting. If the board cannot meet or make a decision before the beginning of the new year, any approved compensation increase will be retroactive to January 1. An executive committee member documents the board approval process, including: A description of the compensation and benefits and the date it was approved. Members of the board who were present during the discussion about compensation and benefits and individual votes. A description of the comparability data relied upon and how the data was obtained. Any actions taken (such as abstaining from discussion and vote) for consideration of the compensation by anyone who is otherwise a member of the board but who had a conflict of interest concerning the decision on the compensation and benefits. e. The executive director will be asked to provide feedback regarding the process, compensation awarded, and performance evaluation without fear of recrimination Independence in Setting Compensation The board chairperson is a volunteer and not compensated by the Alifalit and operates independently without undue influence from the executive director No executive committee member will be a staff member, the relative of a staff member, or have any relationship with staff that could present a conflict of interest.