Excessive Nonprofit CEO Compensation and the Average Nonprofit

While we know that most nonprofit CEOs do not earn exorbitant salaries, some do and how should the rest of us feel?  In a posting today on one of the Chronicle of Philanthropy’s blogs, Rosetta Thurman writes, “Nonprofit CEOs who want for-profit salaries should work for a for-profit.”  She continues to enumerate reasons why excessive nonprofit salaries are problematic for the entire nonprofit community.

In a September 2009 posting on this blog, I pose three potential theories for setting nonprofit CEO salaries, after news of yet another very highly compensated nonprofit executive hit the air. 

With the new IRS 990 requirement that nonprofit boards document the process by which they determined the reasonableness of their CEO’s salaries, will the examples of excessive compensation decrease or are these high salaries justified by market comparisons with for-profit entities of a similar size and complexity?

So what should the rest of the nonprofit sector think about highly compensated executives?