September 16, 2012 | Read Time: 1 minute
Joseph Cerrell
Director of the Europe Office
Bill & Melinda Gates Foundation
2010 compensation: $1.2-million
Deploying executives overseas comes with many extra costs to nonprofits.
In addition to paying a salary, nonprofits often must foot the bill for costs such as taxes and living expenses, which can quickly inflate the amount of compensation provided.
When the figures are publicly disclosed on nonprofit tax forms, alarms are often sounded. “Everyone says the same thing: ‘Whoa, what’s this number?’” said Linette Barclay, managing director of international expatriate services at the Grant Thornton accounting company, in Manhattan. “It gets a lot of attention.”
Consider Joseph Cerrell, who became director of the Bill & Melinda Gates Foundation’s Europe office, in London, in January 2010.
That year, Mr. Cerrell earned $1.2-million, the Gates foundation informational return shows, meaning it looks like he made more than the fund’s president, Jeff Raikes. But that number doesn’t reflect what Mr. Cerrell truly earned, said Chris Williams, a foundation spokesman.
Mr. Cerrell earns $361,000 in salary and benefits, the equivalent of the foundation’s other program directors.
But because he worked overseas, he also received $396,000 in 2010 for housing assistance, tuition for his children, and other support. In addition, he received $27,000 in one-time moving costs.
His compensation also included $474,000 for expenses related to “tax equalization”—the amount of taxes the foundation paid to the British government on the full $784,000 in compensation. The $474,000 amount also accounts for U.S. taxes on the tax equalization payment, which is considered a fringe benefit. That’s right, Americans who live overseas must pay taxes on taxes.
