Unjust compensation is an ethical issue facing us at every socioeconomic rung today, even in nonprofit and religious organizations. The income gap in the U.S. narrowed following the Great Depression and continued to do so into the 1970s, but since then it has widened. In a ten-year period, beginning in 1979, after-tax income for the top 1 percent of households grew 275 percent, while for the bottom fifth it rose only 18 percent. By 2013, the federal government found that the poorer half of U.S. households held 1 percent of the total nation's wealth, while the wealthiest 5 percent held 63 percent.[1] While all income must be received graciously and stewarded generously, we also have a duty as Christians to engage in business ethics when it comes to meting out compensation packages.
In Matthew 6:19-24, Jesus tells the crowd gathered at the mount that where their treasure is, their hearts will be also (v. 21). Jesus is reminding us of a very simple truth: what we invest in is what we value. When the Sadducees, Pharisees, and Herodians gang up to trick Jesus into betraying his allegiances, they use economic ethics (Mt 22:15-22, Mk 12:13-17; Lk 20:20-26). Asked the question, “Is it right to pay taxes to Caesar or not?” Jesus points to a denarius, with the face of the Roman Emperor imprinted on it. He replies, “Whose likeness, whose image is this?” The leaders respond resoundingly, “Caesar's [of course].” Jesus says, “Give to Caesar what is Caesar's;” his second commandment forms the crux, or transforming initiative of the teaching, “give to God what is God's.”
The reality is that we are far more concerned with Caesar's kingdom than God's. But in all infinite wisdom, the Creator formed us in the image of God. We are better than the portrait on a minted coin; we are living, breathing, speaking, active beings who have the Spirit of God poured into us. Our purpose is to live for God and advance the Kingdom's reign on Earth. When we live for these immaterial riches, God is revealed in creation and we live off of God's economy. This scripture is about the source of our identity and the constant human temptation to confuse our worth and purpose with our earthly treasure. Whose image are we bearing by the way we handle finances?
So what does it say about our values when we invest our money in individuals and corporations who hoard wealth and—in some cases—promote harmful and unethical business practices? Or what does it mean that our athletes and entertainers make multi-millions while our social workers, teachers, firefighters, and police officers who save lives make a pittance? A 2013 federal study found that the community and social services sector has one of the lowest paid average annual salaries ($44,710), dropping far below the averages of almost every other industry and lower than the national average ($46,440). Of these, religious workers are some of the lowest paid, making $33,520 ($16.11/hour). The average annual pay for healthcare assistants is $28,300—this is who takes care of our elderly, the mentally ill, the physically and mentally handicapped, and dying.
So should we value and compensate workers based on the skillfulness of their labor alone? This is the ethic that tries to justify exorbitant compensation of our nation's CEOs. The top paid corporate executive in the U.S. makes over $141.9 million annually[2] and the average CEO at big U.S. companies makes between 204 and 357 times the average worker at the same company.[3] Companies like Walmart, Target, Walt Disney, Starbucks, Chipotle, Nike, and JC Penney make more than 600 times their average worker, including their other executives.[4] Data from The Nonprofit Times and Charity Navigator corroborate that the average nonprofit leader makes less than $120,000, compared to the $9.7 million median income for leaders of S&P 500 companies.[5]
In order to provide just compensation, one must take seriously a person's skill and performance, but through the eyes of truth and love. Thus, human resource managers and board members need to determine compensation packages with the needs as well as the work ethic, experience, and performance of the employee in mind. Mott and Sider write that, “Justice demands that every person or family has access to the productive resources (land, money, knowledge) so they have the opportunity to earn a generous sufficiency of material necessities and be dignified, participating member of their community.”[6] Given that God's universal destination of goods to be shared equitably among humankind, every household should have equal access and means to earn and maintain a stable life.
The complexity of this issue is what often deters us from engaging it: there is no one compensation package that fits all. Some individuals have more serious health needs, more dependents, higher education cost and debt, greater job responsibility or stress, etc. Thus, the federal government can hardly be expected to be the sole regulator of ethical compensation. But as individuals and as Christian leaders we can shape the ethical approach to compensation determination. Individuals should be cared for in the way they are paid, both in cash and benefits, with investment toward retirement, rest from their work, and provision for healthcare and well being. Performance should be only one determinant of compensation; workers should be given performance evaluations based on clear, measurable and agreed upon objectives and goals and given feedback and coaching to allow them ample opportunity for success (for guides on performance evaluations see the notes).[7] Personal need should be another factor in compensation; organizations need to show the values of love, justice, and worth of human life and dignity, when determining what is fair pay. Fair pay should not be the least amount acceptable for a service as determined by the government. Organizations should research data and compare salary figures across the field and geographic region. All attempts to close the earning gap between genders and races should be pursued. For profit and nonprofit executive boards alike need to be more diligent and just to carry out their fiduciary responsibilities to the public and the organization by setting less excessive and more responsible compensation packages for top executives.[8]
Christians today can live a Kingdom economic ethic by lobbying for caps on executive compensation and tax reform that prevents corporations from getting exorbitant tax breaks. We can also educate and advocate for ourselves and other workers' rights. Some of us will even need to become board members who can provide ethical oversight to organizations navigating these turbulent financial waters. It all starts by living for God's economy, serving the Lord rather than capital, and loving our neighbors as ourselves.
Kate is the managing editor for Tableaux and an anti-trafficking advocate. She is a third-year MDiv student at McAfee in the nonprofit dual-degree track. In her spare time, Kate loves cooking meals for friends, taking in the outdoors and drinking good joe.
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[1] Esmè Deprez. “Income Inequality.” BloombergView.com.
[2] “2014 Equilar Top 200 Highest Paid CEO Rankings.” Equilar.
[3] Smith, Elliot, and Phil Kuntz. “Disclosed: The Pay Gap Between CEOs and Employees.” Bloomberg Business Week. http://www.businessweek.com/articles/2013-05-02/disclosed-the-pay-gap-between-ceos-and-employees (accessed October 20, 2014). Note: companies complain that Bloomberg's average is skewed due to their inclusion of deferred compensation including benefits, retirement, and stock options, however, the AFL-CIO's average does not include these non-cash benefits and actually reports higher disparate ratios
[4] Bloomberg. “Top CEO Pay Ratios.” Bloomberg.com.
[5] “2014 Nonprofit Salary And Benefits: Operating Budget And CEO Pay.” The NonProfit Times.
“2014 Charity CEO Compensation Study.” Charity Navigator.
[6] Glen Stassen and David Gushee. Kingdom Ethics: Following Jesus in Contemporary Context. (Downers Grove, Ill.: InterVarsity Press, 2003), 421.
[7] Simone Joyaux. “Performance Appraisal Process for the CEO.” Joyaux Associates.
Vincent Hyman. “Evaluating the Executive Director.” First Nonprofit Foundation.
[8] “Executive Compensation Policies.” National Council for Nonprofits.
