Exorbitant CEO Compensation
Based on a simple revenue-to-compensation ratio, the Big Three standardized testing companies' top officers receive compensation that is many times larger than even the largest American non-profit companies. In fact, the CEOs of the Big 3 receive an average of over 5 times that of the five largest non-profits. Why do they feel it is ethical for them to earn more money than the CEOs of humanitarian organizations? Furthermore, how are they getting away with violating the IRS's "Inurement/Private Benefit" rule?
The Facts
CEO Compensation
(Compensation-to-Revenue Ratio)
Detail: Industry Leaders
| Revenue (million) |
CEO | Compensation | Compensation Statistic* | ||
|---|---|---|---|---|---|
| Mayo Clinic | $7,970 | John H. Noseworthy | $3,801,451 | 0.48 | |
| UPMC Group | $6,630 | Jeffrey A. Romoff | $5,161,334 | 0.78 | |
| YMCA | $5,840 | Neil Nicoll | $432,600 | 0.07 | |
| Catholic Charities USA | $4,270 | Larry Snyder | $167,401 | 0.04 | |
| United Way | $4,130 | Brian A. Gallagher | $864,076 | 0.21 | |
| AVERAGE | $5,768 | $2,085,372 | 0.32 |
Note: Facts and figures are based on tax filings (IRS Form 990) and company statements for 2009, the most recent records available as of Oct 2, 2011.
* The compensation statistic is a simple ratio of compensation to revenue (multiplied by 1000 for easy evaluation).
Detail: "Big 3" Testing Companies
| Revenue (million) |
CEO | Compensation | Compensation Statistic* | Compared to Industry Leader Average of 0.32 | |
|---|---|---|---|---|---|
| ETS | $906 | Kurt M. Landgraf | $741,882 | 0.82 | 256% of Average |
| College Board | $623 | Gaston Caperton | $872,061 | 1.40 | 444% of Average |
| ACT Inc | $238 | Richard L. Ferguson | $734,583 | 3.09 | 978% of Average |
| AVERAGE | $589 | $782,842 | 1.77 | 560% of Average |
Note: Facts and figures are based on tax filings (IRS Form 990) and company statements for 2009, the most recent records available as of Oct 2, 2011.
* The compensation statistic is a simple ratio of compensation to revenue (multiplied by 1000 for easy evaluation).
Summary
- Kurt M Landgraf (ETS) is compensated more than 2 of the top 5 nonprofit CEOs. On a comparative basis, he is paid more than the CEO of the UPMG Group, a $6.6 billion organization that provides charitable hospital services.
- Gaston Caperton (College Board) is paid more than 3 of the top 5 nonprofit CEOs. On a comparative basis, he is paid almost twice as much as the highest-paid, Jeffrey Romoff of the UPMC Group charitable hospital. According to research by Bloomberg, Caperton is paid more than the president of Harvard University.
- Richard L Ferguson (ACT Inc) is paid more than 2 of the top 5 nonprofit CEOs. On a comparative basis he is paid far more than any of the 7 other CEOs discussed here, at a rate nearly 4 times higher than Jeffrey Romoff.
Previous Years
And more...
Visit our pages for each of the Big 3 to learn more about how they are acting unethically:
• ETS
• ACT Inc
