Serving Others at the Expense of Self: The Relationship between Nonprofit CEO Compensation and Performance in Trade and Professional Associations

Authors

  • Marina Saitgalina Old Dominion University http://orcid.org/0000-0001-5431-9314
  • Andrew A. Bennett Old Dominion University
  • Christopher S. Reina Virginia Commonwealth University
  • Joseph E. Coombs Virginia Commonwealth University

DOI:

https://doi.org/10.20899/jpna.4.2.156-180

Keywords:

Nonprofit Organizations, Nonprofit Management, Executive Compensation, CEO Compensation

Abstract

This paper investigates the organizational importance of relative CEO compensation in trade associations and professional societies. It is known that there is variation in how much pay is tied to performance in different subcategories of nonprofit organizations. However, instead of looking at how performance affects pay, we investigate how CEO compensation affects organization performance when CEOs are aware of their peer compensation and are able to influence their own. We hypothesized that CEOs who knowingly earn less will be associated with both greater financial and nonfinancial organizational performance. This altruistic perspective draws on theories from leadership and psychology rather than the more typical agency perspective and focuses on the alignment between CEO and stakeholders in a nonprofit setting. We find strong support for the relationship between lower relative CEO compensation and organization performance, while results for the moderating effect of organizational size are mixed. 

Author Biographies

Marina Saitgalina, Old Dominion University

Marina Saitgalina is an assistant professor of nonprofit management at the School of Public Service at Old Dominion University. She holds ab MPA degree from the Academy of Public Administration in Russia, and Ph.D. in public administration and management from the University of North Texas. She also held a faculty position at Oakland University, Michigan. Her areas of research include professional membership association management, nonprofit government collaborations, nonprofit political engagement, capacity building of nonprofits, and volunteerism. Her work has been published in Administration & Society, Public Management Review, and International Journal of Volunteer Administration among others.

Andrew A. Bennett, Old Dominion University

Andrew A. Bennett is an assistant professor of management at Old Dominion University. He completed a post-doc at the University of Alabama after earning his Ph.D. from Virginia Commonwealth University, M.A. from Gonzaga University, and B.S. from Clemson University. His research focuses on employee well-being, research methods, and management education. He has also been published in several leading journals, including the Journal of Applied Psychology, Journal of Management, Journal of Organizational Behavior, and Organizational Research Methods. In addition, he has worked on projects for multiple Global 2000 companies, the US Army, and national nonprofits as a researcher and consultant.

Christopher S. Reina, Virginia Commonwealth University

Christopher S. Reina is an assistant professor in the Department of Management and Entrepreneurship at Virginia Commonwealth University. His research focuses on the intersection of leadership, mindfulness, and emotions in the workplace and how they facilitate employee engagement and organizational performance and well-being. He is especially interested in understanding the impact of mindful leadership on followers and how this translates to customer and patient outcomes. He received his Ph.D. in business administration (management) from the W. P. Carey School of Business at Arizona State University and has corporate experience in leadership training and development as well as sales and marketing in the healthcare industry. He consults and teaches seminars on mindful leadership, negotiation strategies, and managing the emotional space within organizations. His work has been published in Organization Science, The Leadership Quarterly, Business Ethics Quarterly, and Journal of Leadership and Organizational Studies.

Joseph E. Coombs, Virginia Commonwealth University

Joseph E. Coombs is academic director for entrepreneurship and associate professor of management in the School of Business at Virginia Commonwealth University, where he teaches courses in entrepreneurship and strategic management. He received his Ph.D. from Temple University. He has held faculty positions at Rutgers University, James Madison University, the University of Richmond, and Texas A&M University. His research has been published in premier academic journals, including the Academy of Management Journal, Entrepreneurship Theory and Practice, Journal of Business Venturing, Journal of Engineering and Technology Management, Strategic Entrepreneurship Journal, and Strategic Management Journal.

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Published

2018-08-01

Issue

Section

Research Articles