Abstract
We utilize information only recently disclosed on Form 990 to examine the use and consequences of incentive pay at nonprofit organizations. While not used as frequently as in for-profit firms, bonuses are common in nonprofits, as we observe them in approximately 44 percent of our firm-year observations. We find that bonuses are positively associated with profitability, competition, firm size, available cash, and use of compensation consultants and committees; while negatively related to board oversight and charitable nature. However, our results suggest that donors look unfavorably at the payment of bonuses, as donations are negatively associated with prior year bonuses. Nonetheless, we find evidence consistent with the payment of bonuses incentivizing nonprofit executives as, despite reduced contributions, future performance is positively associated with bonus compensation.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
