In our final post on non-profits and compensation, we're going to talk about what actions non-profits can take to establish a "rebuttable presumption of reasonableness."
1. Adopt a Conflict of Interest Policy.
2. An examination should be done with regard to what is "normal and reasonable" compensation within the particular industry the commission payment is coming from.
3. Write a written compensation agreement to be approved by the Board of Directors. The employees receiving the compensation package should not be present during the vote and should not vote on the compensation agreement. If a Conflict of Interest Policy is adopted, the Board of Directors should follow the policy and adopt a written resolution demonstrating that the procedures were followed.
Of course, it is always wise to seek legal counsel during this process, so be sure to contact Gross & Romanick before you begin to establish your rebuttable presumption of reasonableness.
