POLICIES AND PROCEDURES

POLICY NUMBER: 09-02

SUBJECT:Officer,Key Employee,and Staff Compensation Policy

EFFECTIVE DATE:April 28, 2009

REVISION DATE:September 21, 2011

SUPERSEDES:

APPROVED BY:CWEA Board of Directors

PURPOSE

The California Water Environment Association (CWEA) is a nonprofit public benefit corporation. CWEA seeks to attain excellence in its governance and its service to members and the public. An essential element of achieving that goal is the attraction and retention of staff to represent and manage CWEA in a manner consistent with its goal of excellence. CWEA is based in Oakland, California.

CWEA recognizes that the market for staff is highly competitive. In addition, the specialty niche of CWEA requires staff who are able to understand highly technical information in an ever-changing environment. The compensation (including salary and benefits) must be competitive with the labor market in which CWEA competes for each staff position. CWEA’s goal is a long-term relationship with its staff based on their functioning at a high level and achieving excellent results on behalf of the association.

This Compensation Policy reflects these understandings of the environment in which CWEA operates.

POLICY

It is the policy of the CWEA Board to follow the philosophy and procedures outlined below to determine compensation for the Association’s Officers, Key Employees and Staff in order to:

  • attract and retain Officers, Key Employees and Staff who are qualified and respected in the association community.
  • attract and retain Officers, Key Employees and Staff who represent the organization to its members and key stakeholders in a manner fitting with its philosophy of excellence and professionalism.
  • remain competitive in the San Francisco Bay Area association employment market or in the local headquarters area should the headquarters move.

Top Financial Official. For purposes of this policy, the Association’s top financial official (the person who has ultimate responsibility for managing the Association’s finances) shall be considered an Officer, regardless of title. If ultimate responsibility resides with two or more individuals, who may exercise such responsibility in concert or individually, then all such individuals shall be treated as Officers.

Executive Director. There is a separate policy for Executive Director compensation.

Key Employees. A Key Employee meets all three of the following factors, applied in the following order:

1.Receives reportable compensation from CWEA and all related organizations in excess of $150,000 for the calendar year ending with or within CWEA’s tax year.

2. Has the following responsibilities:

a.Has responsibilities, powers, or influence over CWEA as a whole that is similar to those of officers or directors;

b.Manages a discrete segment or activity of CWEA that represents ten percent or more of the activities, assets, income, or expenses of CWEA, as compared to CWEA as a whole; or

c.Has or shares authority to control or determine ten percent or more of CWEA’s capital expenditures, operating budget, or compensation for employees.

3.If more than twenty employees satisfy factors 1 and 2 above, then is among the top twenty employees with the highest reportable compensation from CWEA and related organizations for the calendar year ending with or within CWEA’s tax year.

Staff. All employees other than Officers, Board Directors, and Key Employees are considered Staff under this Policy.

PHILOSOPHY
Pay Philosophy:

1.Employee compensation is meant to be one of a number of important means of attracting, keeping, and motivating the individuals who are integrally responsible for CWEA’s success.

2.CWEA intends to pay competitively with the external market, taking into account internal equity and financial resources; targeting the mid-point of the market for a competent employee.

3.CWEA intends to conduct an external market evaluation and internal job comparison, using a compensation specialist, every three years, to establish job value. Job value will be the mid-point of competitive labor market for the job. Midpoint means 50% of employers pay more than the mid-point and 50% pay less than the mid-point. The labor market value of jobs will be adjusted annually based on labor market increase, using input from a compensation specialist. That annual labor market rate increase would determine the pool of dollars that will be budgeted for performance increases. Distribution of that recommended pool would be achieved by individual increases determined by the annual performance evaluations using a salary administration matrix staff will develop with the compensation specialist.

4.Base pay will be between 0.90 and 1.10 of job value (mid-point of competitive labor market for the job). Special Equity Adjustments over time will be made to reach at least 1.0 job value (mid-point of market). New hires who are in a development mode and those employees who need to improve competencies or performance will typically be paid at 0.90 of job value until they are determined to be fully performing.

5.Annual performance evaluation will determine if an annual increase is merited for each employee within total annual labor market increase. It will be applied to individuals based on the salary administration matrix.

6.New jobs and/or job changes will be evaluated and classified in the salary structure, using a compensation specialist as needed.

Benefits Philosophy:

1.Employee benefits are meant to be one of a number of important means of attracting, keeping, and motivating the individuals who are integrally responsible for CWEA’s success.

2.CWEA intends to offer benefits that are competitive with the external market, taking into account financial resources.

3.CWEA intends to provide 100% medical, dental, and vision premium coverage for employees and 60% premium coverage for dependents, unless specified otherwise by a pre-existing written agreement.

PROCEDURES

a)The Executive Director will work with an external compensation specialist to:

-Conduct an external market evaluation and internal job comparison every three years to establish job value for each position, using relevant and valid external survey sources for the labor markets (both for-profit and not-for-profit) in which CWEA competes for each position, including data from the American Society of Association Executives;.

-Establish the annual labor market rate increase, which will be used to determine the pool available for annual performance increases;

-Develop an annual salary administration matrix to guide performance-based increases; and,

-Establish the job value for new and/or revised position descriptions.

-Criteria for selecting data/survey sources:

  • Current
  • Appropriate sample size
  • Statistically valid
  • Specific to:

-CWEA’s size

-CWEA’s not-for-profit / association sector

-Location

b)The Executive Director has discretion to establish compensation adjustments for staff within the policy and budget approved by the EC and/or the Board.

c)Contemporaneous documentation and recordkeeping

  • There shall be contemporaneous documentation and recordkeeping with respect to EC and Board deliberations and decisions regarding compensation for key staff and annual budgets.

d)Conflict of Interest

  • If any member of the Executive Committee has a conflict of interest, as defined in Treasury Regulation 53-4958.6(c)(1)(iii), with respect to the compensation of any key staff, such member of the Executive Committee shall not be involved in the review and approval of that key staff member’s compensation.

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