Sibson provides executive compensation and corporate governance services to nonprofit organizations and institutions of higher education, taking into account their tax structure, varying organizational dynamics and culture, and legal and compliance issues. We help clients broaden their focus about pay and governance, resulting in systems and processes designed to balance the interests of all stakeholders.
Section 4958 of the Internal Revenue Code states that 501(c)(3) organizations should not provide excess benefit transactions to board members or key insiders or they will be subject to IRS intermediate sanctions. Excess benefits transactions are defined as "virtually all forms of cash and non-cash compensation, including salaries, fees, bonuses, severance payments, fringe benefits (other than de minimis fringe benefits), insurance premiums, retirement plan contributions, and most other employee benefits, whether or not they are taxable."
We advise organizations on the competitiveness of current total compensation packages for leadership positions to ensure compliance under the IRC. Based on an assessment of the competitive market, we issue an opinion on the reasonableness of compensation, supported by our analytics. We address issues such as: