NEW!November 12, 2018
How much is too much compensation for nonprofit executives? Many nonprofits face the opposite challenge, with below-market pay provided to key leaders who are willing to make financial sacrifices. A new tax law nonetheless aims to curb abuses of Section 501(c)(3) organizations offering either very high salaries or too generous severance pay upon departure. The penalty? A 21% excise tax on the amount deemed to be excessive compensation. Nonprofits thus may continue with such compensation largesse, but only if they pay Uncle Sam too.