New Chief Executives Offered Less Lucrative Pay Deals

Some charities are paying lower salaries to new chief executives than their predecessors earned, in part because of the weak economy.

The American Heart Association was in final negotiations with its new chief executive, Nancy Brown, last fall, when the stock market began its steep plunge and donations began to dry up.

Gary L. Ellis, who chaired the Dallas charity’s board at the time Ms. Brown was hired, says she is making “a little bit less” than M. Cass Wheeler, who received compensation of $995,424 in 2008 and had led the organization for 11 years. (Mr. Wheeler’s 2008 pay included an amount for retirement just shy of $300,000.)

“We have a lot of confidence that Nancy will be a greater leader,” says Mr. Ellis, who is also the chief financial officer at Medtronic, a company that sells medical devices. “But we also had to take into consideration that at that point in time, the environment was very challenging and contributions were down and what that meant to the whole organization.”

Marine Toys for Tots Foundation, in Triangle, Va., sharply cut what it pays its president when Lt. Gen. Henry P. Osman took over from Lt. Gen. Matthew Cooper, who had led the charity for 15 years, in January 2008. Both salary and bonus were about a third less for the newcomer: General Osman made $206,500 in 2008, compared with $299,200 for General Cooper in 2007.

“It’s kind of the military way of looking at it,” says Major William J. Grein, the charity’s vice president for marketing. “If you’re the new guy, you start out with the new guy’s salary.”

— Noelle Barton, Ben Gose, and Candie Jones