A Salary Cap for Nonprofit Executives?

Executives at companies that receive federal bailout money could soon face a $500,000 salary cap under a plan released this week by the Obama administration.

But at least one critic says the federal government shouldn’t stop there.

Paul Streckfus, editor of the subscriber-only newsletter EO Tax Journal, writes today that top officials at nonprofit organizations should be subject to the same pay limits.

“Why not impose a $500,000 salary cap on organizations that get the benefit of tax exemption and tax-deductible contributions?” Mr. Strekfus asks. “A few executives might flee to the for-profit sector, but I foresee no great difficulty in replacing them with equally-qualified individuals.”

Mr. Streckfus does note that such limits would probably hurt colleges and universities that hire big-name football and basketball coaches.

But he quickly dismisses that concern: “Somehow I think Duke could survive without Coach K,” he writes, referring to the Duke University men’s basketball coach Mike Krzyzewski.

Should the federal government impose compensation limits on nonprofit executives? Click on the comments link below this post to share your thoughts.

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