Key Takeaways: Regular executive compensation reviews strengthen governance, support executive retention, and help nonprofits remain competitive in attracting and retaining top leadership talent. Benchmarking provides objective data for informed board decisions, leadership succession planning, and long-term organizational success.

When was the last time your board reviewed executive compensation with independent market data? If it’s been more than three years, it may be time for a fresh look.

For nonprofit organizations, few responsibilities are more important than hiring, supporting, evaluating, and compensating the Executive Director or CEO. 75% of nonprofit executive leaders express they will leave their role in the next 5-10 years. Yet while boards often devote significant attention to executive recruitment and annual performance reviews, executive compensation itself is frequently revisited only when a leader resigns, raises concerns, or another issue forces the conversation.

That approach can create unnecessary risk, especially in a market where over 90% of nonprofit CEO/ED leaders express they feel burned out (May 2026; State of Nonprofits 2026; Center for Effective Philanthropy)

A governance best practice that helps organizations remain competitive, compliant, and positioned to retain strong leadership is to engage an independent advisor, such as KEES, every three years to conduct an Executive Compensation Review.

Read on to gain insights into why reviewing nonprofit CEO/ED compensation should be more than a once in a decade process.

•  •  The Market Changes Faster Than Most Boards Realize
•  •  Boards Need Independent Perspective
•  •  Strong Governance Requires More Than Good Intentions
•  •  Compensation Reviews Are Also Retention Strategies
•  •  Every Organization Requires a Customized Analysis
•  •  Why KEES for an Executive Compensation Review?

The Market Changes Faster Than Most Boards Realize

The workforce, and leadership on nonprofits is undergoing a seismic shift. Inflation, competition for talent, changing benefit expectations, remote work, and increasing leadership demands have altered compensation markets across nearly every sector. With current average executive leadership tenures hovering + / – 5 years, if a Board is not current with the market, when an executive departs, it could necessitate a significant calibration of the budget, which is harder these days given constrained resources.

Compensation decisions that felt appropriate three or four years ago may no longer reflect current realities. Organizations can unintentionally fall behind market rates, creating retention risks for valued leaders and making future nonprofit executive recruitment and executive search efforts more challenging.

A periodic compensation review ensures decisions are based on current data rather than outdated assumptions.

Boards Need Independent Perspective

Most nonprofit board members are volunteers who bring valuable expertise and passion to governance. However, few have access to current executive compensation information across comparable organizations or insights from the broader nonprofit leadership recruitment market.

This often leaves boards relying on anecdotal information, publicly available Form 990 filings, or limited salary survey data.

An independent compensation review provides objective market intelligence tailored to the organization’s size, complexity, geography, budget, staffing structure, and leadership demands. Rather than guessing what is competitive, boards gain a clear understanding of how their executive compensation compares to similar organizations.

The result is a more informed, confident decision-making process.

Strong Governance Requires More Than Good Intentions

Executive compensation is one of a board’s most important fiduciary responsibilities. Donors, regulators, auditors, and stakeholders increasingly expect compensation decisions to be supported by objective evidence and sound governance practices.

An independent review helps boards demonstrate due diligence by documenting that compensation decisions were evaluated thoughtfully and against relevant market benchmarks.

Whether compensation changes are recommended or not, the organization benefits from having a defensible, well-documented process.

Compensation Reviews Are Also Retention Strategies

Replacing an Executive Director or CEO can be expensive and disruptive. Leadership transitions often result in lost momentum, delayed initiatives, fundraising interruptions, and the loss of institutional knowledge.

While compensation is rarely the sole reason leaders leave, it often becomes a contributing factor when organizations fail to periodically assess whether pay and benefits remain competitive.

Regular reviews allow boards to identify potential concerns before they become retention challenges. They also create opportunities for constructive conversations about compensation, benefits, professional development, and long-term leadership sustainability.

A proactive review is far less costly than an unexpected nonprofit CEO search, executive director search, or leadership transition process.

Every Organization Requires a Customized Analysis

One of the most common mistakes boards make is comparing their organization to the wrong peer group, or a singular market. They are competing for talent among peers, but also within a broader market of other sectors who are struggling with executive vacencies.

A nonprofit’s budget alone does not determine executive compensation. Mission focus, staffing levels, geographic market, operational complexity, regulatory requirements, fundraising expectations, and strategic priorities all influence the scope of executive leadership.

An experienced advisor looks beyond surface-level comparisons to identify truly relevant peers and develop recommendations that reflect the realities of the role.

This customized approach produces more meaningful and actionable results than generic salary surveys alone.

Why KEES for an Executive Compensation Review?

KEES executive compensation reviews are informed by our broader work in executive search, organizational effectiveness, leadership consulting, and compensation benchmarking. Because we regularly work with nonprofit, association, healthcare, public-sector, educational, and philanthropic organizations nationwide, we bring current market insight and a practical understanding of leadership trends.

We help boards answer critical questions:

•  •  Is our executive compensated appropriately for the market?
•  •  Are we creating unnecessary retention risks?
•  •  How do our compensation and benefits compare to peer organizations?
•  •  Are our decisions supported by objective data?
•  •  Can we confidently defend our compensation practices?

Most importantly, we provide an independent, confidential perspective that helps boards fulfill their governance responsibilities while supporting and retaining strong executive leadership.

Executive compensation should not be a once-a-decade conversation. For organizations committed to strong governance, executive retention, leadership continuity, and long-term sustainability, a comprehensive compensation review every three years is a simple but powerful investment in leadership, stability, mission success, and future nonprofit executive search readiness.