In the Wall Street Journal today, there is an article that indicates progress is being made on tying a CEO’s compensation package to the performance of the company s/he is leading. The article states, in part:
“When companies exceed expectations or outpace rivals, CEOs are reaping bigger-than-projected rewards. But when financial results or stock-market returns fall short, executives lose much of their potential pay. In most cases, CEOs have been clearing the hurdles erected by corporate directors: Nearly two-thirds of corporate chiefs met or exceeded performance goals attached to stock grants they were given between 2008 and 2010, according to a study by pay researcher Equilar Inc. and The Wall Street Journal. The goals most commonly are tied to a company’s financial results or stock-market returns over a three-year period.”
This got me to thinking about what the Bible has to say about compensation. The act of connecting one’s compensation to the quality of their performance is illustrated numerous times in the Bible. In the Old Testament, we see examples of those who became rich through the buying, selling and growing of their flocks: Lot, Job and Abraham come to mind. Presumably, their work had enough quality that they were able to create significant wealth. By the same token, the early church was supported by those who were successful in business. Had those early church business owners not been successful, they would not have had the wealth to share with those in need. In the New Testament, the parable of the talents illustrates a clear connection between compensation and job performance. The two servants who earned a profit for the master were given much more in compensation than they ever thought possible, while the one who didn’t produce a profit was punished. In all of these examples, their compensation – what they received in exchange for doing work – was tied to the quality and the positive outcomes of their work.
In American today, segments of our society resist having their compensation tied to performance. This is an unbiblical trend. For example, some unions ensure their members do not have their compensation packages tied to their performance and efforts to make adjustments in this direction have been consistently resisted. When compensation is disconnected from the outcomes of one’s work, everyone suffers. Generally speaking, top performers will prefer to have more control over their compensation by working in an environment where there is a clear connection between the quality of their work and their pay. Under-performing individuals will naturally desire a non-negotiable compensation package so that there is certainty in their paychecks even when they deliver uncertain work quality to their employer.
Within the Christian community, there is a consistent belief that those in full-time vocational ministry should be paid less than others rather than connecting their compensation to their performance. I don’t know where this thinking comes from, frankly. A loaf of bread costs the pastor the same as it does you and I. You have a mortgage? So does he. Do you pay $4/gallon for gas? So does he. It seems to me that this “poverty” thinking for full-time vocational people is inconsistent with giving “double honor”. So, here are some ways to determine a fair compensation package for those in full-time vocational ministry. I offer these for your consideration:
- Find out what a person with similar age, years of education, years of experience and level of responsibility makes in your community and build the compensation package from that data. You can get most, if not all, of this data from the census bureau.
- If it’s a para-church or church organization, you call around to other, similar ministries within a given radius and find out what the candidate’s counterparts earn. Average the numbers and build the compensation package from the average.
- If it’s a church, average the elder’s personal salaries and compensation packages they presently earn and pay the pastor that amount.
If everyone in the church is tithing as commanded by the Lord, compensation for those in full-time vocational work should be able to be met using one or more of the ways I’ve outlined above. Where ministries get into trouble is when they don’t have their members giving as they should and the ministry personnel suffer as a result. However, because doing ministry can be, at times, a rather intangible activity that is difficult to measure, it’s understandable that some compensation packages are not directly tied to performance. For example, I wouldn’t want my pastor’s salary to have a bonus structure in which increased attendance was tied to an increased bonus. So in ministry situations, it’s usually best to use one of the methods I’ve described above and seek the mind of the Lord in the process of building the compensation package.
What is a person’s work worth? That depends on numerous factors. What is important to understand, in this post anyways, is that connecting work to compensation with clear, unambiguous measurements that fairly reflect the quality of work is Biblical in nature and when possible, should be implemented as part of any employee’s compensation package.
Bill English, CEO