Understanding Executive Compensation By Larry Gadbaugh

With executive compensation, how much is enough?

My executive compensation was one of the first things the Board Chair talked to me about when I was hired as CEO 20 years ago. As a former pastor, I had never been involved in that negotiation. Our elders had always dealt with such things. I was about to get educated.

Our Board has always treated me better than I would treat myself. The Board Chair, a corporate  HR consultant, drew upon regional compensation surveys for executives in comparative positions.

Temptation

Corporate culture among both for-profit and not-for-profit executive positions views compensation and perks as a measure of our value, potential, performance, and status. While understandable, we are regularly hearing of leaders who have given in to the temptation to supplement our compensation immorally. How much is enough?

Tragically, it has become obvious that even the most highly compensated leaders have behaved as if their salaries, perks and privileges aren’t enough. It scares me to discover leaders had been “compensating” themselves for what they decided was still lacking in what God was providing. And it also concerns me because I know the seeds of these temptations lurk in my own discontentment.

Rationalizing Compensation

I don’t need to name names but, here are paraphrases of their rationalizations.

• Those that I lead owe me this because of everything that I’ve done for them.
• The cost of leading/doing ministry has been very high. I am burdened by the demands of the job/ministry. None of my time is my own, I have no privacy, no personhood left. Yes, I know the Lord understands what I have sacrificed, so meeting my sexual needs are God’s way of rewarding me.
• I need it – I need it. – I need it,  (No, that wasn’t Bob Wiley)

This pattern of supplementing our compensation isn’t always expressed in sensuality, but it is always thinly varnished self-serving. “I serve, so I need to be served…so I can keep serving.”

Stripped of rationalization, it sounds more like this.

• My job emotionally, spiritually drains me. I need these perks to compensate my self-esteem and my life-style. I need to indulge myself to boost my serotonin and dopamine.
• Look at all the sacrifices of my time, talent, treasures I’ve made. God understands my humanity, my desires. I don’t get the affirmation, the salary, the benefits from my spouse, my Board, my church that I deserve. Others recognize how essential I am and are happy to meet my needs.
• I’ve given my life for the “cause.” I am promoting the brand. I embody the brand. When I prosper the mission prospers. When I’m happy, my staff is happy. Without me the mission would suffer. Heck, I am the mission.

Exposed

That sounds pretty ugly when exposed to the light. These horror stories should awaken us to the reality that these seeds lay latent in our own hearts. I remember Chuck Colson saying that he pursued positions of power in politics to serve the common good. He discovered after Watergate that the power he sought for serving others became the power he used to manipulate others for his own agenda. It required exposure, repentance, and the power of the Gospel to liberate him to serve Jesus and others at his own expense through Prison Fellowship.

Most of the people in the Bible stumbled in this matter, from Adam, Eve, Abraham, Achan, Saul, David, Solomon, (the rest of the kings), Judas, Ananias and Sapphira. It’s worth our time to look over their shoulder in the mirror.

Preserve Integrity

To preserve and recover our integrity, it’s essential to ask ourselves some questions regularly.

How healthy is my marriage? What about my finances? Do I have moral integrity? My habits of entertainment, hobbies, spiritual practices, church relationships, mutual accountability with my wife, mentor, Board, church elders, other executive staff? My sense of contentment?

I need to have some things in place, such as:

• Full accountability with my spouse and Board for my contentment with my current “compensation,” and examination of my vulnerability to these temptations. What am I hiding? How and to whom specifically am I accountable?
• The Board and executive staff’s due diligence in establishing and reviewing compensation policies that meet the needs of staff, with a clear plan for addressing gaps (Scripture is clear on compensation for the work we do – I Tim 5:17-18; I Cor 9:4, 7-14). Do I trust my Board to compensate me adequately? Do I trust God to meet my needs when my needs change?
• Regularly asking: Am I thinking I’m more important than God does? Am I considering others’ needs as more important than my own? (Romans 12:3; Philippians 2:3-4).

A Steward’s Perspective

Ultimately, living, working, serving with an eternal perspective, as Christ’s stewards, rather than with an owner mindset, can guard us against such self-serving compensation. After all, none of us want to hear Jesus say, “You’ve already had your reward in full.” Rather, we want to hear, “Well done, good and faithful slave! You have been faithful in a few things. I will put you in charge of many things. Enter into the joy of your master.”

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Larry Gadbaugh has served as CEO of First Image (Pregnancy Resource Centers) in Portland, Oregon for 20 years. He also serves as Executive Director of Oregon Pregnancy Centers Association. A former pastor, he and Diane are married for 44 years, with five adult children.

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