21 Percent Excise Tax was Imposed on Nonprofit Employers for Salaries More than $1 Million in 2018
JoTo PR Client, Cowden Associates, was highlighted in an article in Winston-Salem Journal Online called, How much did corporate executives make in 2018?
The executive compensation for many corporate and nonprofit top executives continued on an upward trajectory during 2018. However, there could be a shift downward in 2019, as several corporations with significant Triad ties have had chief executive changes this year. 30 corporate and 12 nonprofit executives made at least $191,000 in total compensation.
Executive-compensation comparisons can be a challenge for most nonprofits because they declare those payments primarily in annual IRS filings. For the 2018 chart, the compensation for the not-for-profit and nonprofit groups typically reflect 2017 totals reported in their Form 990 with the IRS. The federal tax reform bill that went into effect in January 2018 may play a slowing role in not-for-profit and nonprofit executive-compensation increases, said Elliot Dinkin, president and chief executive of Cowden Associates, a Pittsburgh-based specialist in risk management and compensation plans. The law imposes a 21% excise tax on nonprofit employers for salaries of more than $1 million.
Although it was aimed mostly as reining in higher education salaries, such as coaches and university chancellors, it also is projected to have an impact on not-for-profit hospitals nationwide. “In an environment in which every dollar counts, nonprofit boards will need to justify that it is worthwhile to pay the additional excise tax rather than cut back on salary,” Dinkin said.
Cowden Associates, Inc., headquartered in Pittsburgh, PA, was created in 2001 by the merger of Halliwell and Associates and MMC&P Spectrum Benefits, which was founded by Jere Cowden in 1986. Currently led by President & CEO Elliot Dinkin, Cowden Associates specializes in helping corporate clients find the best solutions, both for the enterprise and for its employees, with regard to compensation, healthcare benefits, retirement and pension issues, and Taft-Hartley fund consulting. Winning Workplaces and The Wall Street Journal have recognized Cowden Associates as a “Top Small Workplace,” a lifetime designation awarded to executives for their ability to build and lead savvy organizations. For more information, visit www.cowdenassociates.com
Winston-Salem Journal Online covers financial news and discusses value investing, hedge funds, banks, asset managers and technology.
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