Human Resources Compensation Related Challenges Term Paper

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DAV's Chief Executive Officer, Arthur Wilson, last year got $287,000 in compensation plus $72,994 in "other" pay from DAV or related organizations; General Counsel Christopher Clay $198,558, plus $144,331; and J. Marc Burgess, the executive director of the national headquarters, $163,483, plus another $122,532; Vice Chairman Larry Pozin seemed to get best deal, earning $107,240 for an average of just five hours of work a week in 2012 (Crudele, 2013).

There is some debate about whether the compensation is justified. Surely these individuals might earn a higher income in the private market. However, the compensation packages given to the executive staff have outraged some people to the extent that there is now an organized group with a website online that is called Veterans for DAV Reform. This group claims that "currently, the Disabled American Veterans is held captive by an opportunistic gang of charlatans only interested in their own gigantic incomes (Veterans for DAV Reform, N.d.). Other sites rate the organization more favorably and give the organization credit for being transparent but criticize the organization use of its assets (Charity Navigator, 2012). Within this organization, the board of directors is responsible for the compensation packages and the resulting issues that the raises have spun. Although the executive compensation is likely below that of their for-profit peers, they seem excessive to many of the external individual's that are trying to receive benefits from the company.

Figure 1 - City Navigator's DAV Rating (Charity Navigator, 2012)

Discussion

The not-for-profit industry has developed specific organizations, such as the DAV, to help the veterans who represented their country in the military. DAV is considered the industry leader in providing assistance for veterans and has been doing so for a long time with a rich and interesting history.

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However, the organization is currently having a problem with the compensation packages that are paid to the executive team to the extent that is has outraged some individuals who have collective organized to form a group and now there is now a website online that is called Veterans for DAV Reform.

This group claims that "currently, the Disabled American Veterans is held captive by an opportunistic gang of charlatans only interested in their own gigantic incomes" (Veterans for DAV Reform, N.d.). Other sites rate the organization more favorably and give the organization credit for being transparent but criticize the organization use of its assets (Charity Navigator, 2012). Although the executive compensation is likely below that of their for-profit peers, reviewing these policies would help restore confidence in the organization and its effectiveness to help veterans in need.

Not for profit organizations have an interesting challenge with regard to executive compensation. Many of these executives would be paid higher wages if they worked in the private sector. Therefore, some of these individuals are effectively taking pay cuts to work for non-profits. However, this does not seem to be the case with many non-profits who offer their executive teams more than competitive compensation packages. This is clearly evident in less reputable non-profits, but can even be found in the some of the more reputable organizations. This organization was selected because it is in an interesting situation. If the board freezes the wages of the executives then some of them may look for work elsewhere. However, if they continue with the pay raises annually, then they will certainly continue to upset groups of external stakeholders. The organization needs to review their policy and directly engage these groups with justifications for the wages.....

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