Salaries at the nonprofit college test developer ACT, whose board members include outgoing San Diego Superintendent Carl Cohn, far outstrip those of comparable nonprofits, according to this article published Sunday in the Des Moines Register.
The article states:
ACT, the college-entrance exam developer that has grown increasingly successful in taking on longtime rival SAT, is paying its influential board of directors about $520,000 annually — an amount that experts say surpasses the compensation of about 98 percent of nonprofit boards across the country. In addition, board Chairman and Chief Executive Officer Richard Ferguson earns a base salary of at least $508,000, according to the organization’s 2005 tax return. That amount exceeds the vast majority of Ferguson’s peers who run like-sized for-profit testing or education businesses nationally and nearly all nonprofit executive directors around the country, according to ERI Economic Research Institute, a company that collects national data on for-profit and nonprofit compensation.
Ferguson’s base pay exceeds the base salaries of both President Bush ($400,000) and the head of the United Way of America, the country’s largest nonprofit ($450,000), the Register writes.
“The average CEO salary for a similar company of the same size is $325,106, according to an analysis by Jim Brennan, a senior analyst at ERI Economic Research Institute.” But CEOs at Berlitz International and the Princeton Review make similar salaries, Brennan added.
ACT chief Ferguson said that “his company has few peers in the nonprofit sector.”
Directors were paid $37,000 to $53,000, according to the company’s 2005 tax return, its most recent available filing to the Internal Revenue Service. The pay amounts to as much as $1,000 an hour, according to ACT’s IRS forms, although the company now disputes that calculation.
Cohn joined the board in 2006, four years after ACT boosted its directors’ pay and restructured the board. The new board includes major players in the education world — “former U.S. secretaries of education, heads of some of the country’s largest universities and school districts, a former governor and national education policymakers,” according to the Register. One is D. Robert Graham, a former U.S. senator from Florida.
Board members are paid based on how many meetings they attend annually, Ferguson told the Register. ACT holds four board meetings a year.
The test is widely viewed as an alternative to the rival SAT. ACT has been pushing schools to require the exam. Critics such as the National Center for Fair & Open Testing, or FairTest, quoted in the Register, say ACT makes big money off of the “culture of assessment (that) has blossomed across government, schools and college campuses.” ACT lacks shareholders.