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The Forward’s CEO salary survey: Good statistics, questionable economics

Are the salaries of Jewish nonprofit CEOs too high, too low or just right? Is there gender discrimination when it comes to the salaries of female CEOs of Jewish nonprofits?
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December 15, 2015

Are the salaries of Jewish nonprofit CEOs too high, too low or just right? Is there gender discrimination when it comes to the salaries of female CEOs of Jewish nonprofits?

Each year, The Forward newspaper surveys the salaries and gender composition of the CEOs of some of the nation’s largest and most impactful Jewish nonprofit organizations, and when Matt Brooks. Photo by Republican Jewish Coalition

Jay Sanderson of The Jewish Federation of Greater Los Angeles was listed as earning a salary of $460,870, and as being overpaid by 600 percent.

After these numbers had already zinged around the Internet for a few hours and sparked discussion and anger in online comment forums, The Forward corrected the glitch back to its original assessment of overpayment to 125 percent for Brooks and 6 percent for Sanderson. 

The larger and more important issue, however, and separate from the website glitch, is whether The Forward’s two key conclusions are accurate. The report — assembled by Eisner, Forward research editor Maia Efrem and University of Pennsylvania statistician Abraham Wyner — states that many CEOs of Jewish nonprofits are overcompensated (The Forward uses the term “overpaid”), and says many of these nonprofits discriminate against women in terms of position and pay.

These judgments are very serious accusations against the boards of many of the Jewish community’s premier nonprofits. The Forward asserted, for example, that the Simon Wiesenthal Center’s Rabbi Marvin Hier (2014 salary: $784,155) is “overpaid” by 103 percent; that Morton Klein of the Zionist Organization of America ($440,440) is “overpaid” by 53 percent; and that, overall, female CEOs are paid just 80 percent of what their male counterparts make.

Rabbi Marvin Hier. Photo by Michael Kovac/WireImage

“Their analysis looks kosher — very kosher,” said sociologist Steven M. Cohen, a research professor at Hebrew Union College-Jewish Institute of Religion, who has analyzed several other polls and studies for the Journal. The Forward’s formula showing a correlation between CEO salaries and the budget and staff size of a corporation is statistically sound, he said. That the output (salary) correlates with those two inputs (budget and staff size) among The Forward’s sample nonprofits is a mathematical fact.

But the economics, and the inputs and variables used for The Forward’s studies, may not be fair. UCLA economist Lee Ohanian cautioned that CEO salaries of businesses, whether nonprofit or for-profit, depend on a multitude of factors, and to determine what a salary should be based solely on the company’s budget and staff size would be simplistic.

Even Wyner, in a ” target=”_blank”>2005 study.

“Women are indeed concentrated in smaller organizations,” Wyner noted in his 2013 analysis, and “were leading organizations with average expenses of less than half” of large organizations. “Women’s pay seems to be converging with men’s, and will hopefully reach parity in the very near future,” Wyner wrote.

“If you look more broadly at issues like women’s compensation levels or women’s earnings relative to men’s, you get numbers like 80 cents on the dollar. The more adjustments you make, the more those numbers come in line,” Ohanian said in terms of the broad policy debate regarding the wage gap, referring to adjustments such as the number of hours worked, industry and the trade-off between working full time or part time and raising children.

In other words, the statistics and the number-crunching provoke a useful conversation, but the lack of inputs makes the topics of those conversations far from clear-cut.

***

Correction (Dec. 16, 11:40 a.m.): This article previously stated that the formula The Forward used to estimate its judgment of overpayment was flawed, which resulted in a glitch showing percentages of overpayment as 100 times what they should have been. It was in fact a temporary computer coding error — not a formula — that led to the inflated estimation of overpayment.

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