Leadership salary: define your goal
You were nominated for your role as board chair because you were good at getting things done. And of all the tasks ahead, there’s one that you don’t want to defer: the compensation negotiation with the ‘one employee of the board’. If you feel some pressure get things tied-up, in-the-bag, signed, sealed, and delivered, you are not alone.
The case study starts with a Wednesday afternoon email from the board vice-chair, about two years after the new leader started in the role.
“This year is off to a terrific start, thanks to our new leader and his team. As I shared with you previously, he is doing a great job, and he’s becoming very valuable to the organization. You may not recall this from the search, but his employment agreement does not include automatic compensation adjustments. So… in our effort to make sure we’re compensating him fairly and wisely, I’m reaching out now with the hope that you can provide some helpful marketplace data that may help inform our situation.
Two questions: (a) How has the market for leadership compensation evolved since we initially contracted him two years ago? (b) What is regarded as the standard practice, or best practice, when it comes to frequency of compensation adjustments for leaders? While we understand and accept that compensation adjustments are both appropriate and necessary, we hope not to get into a cycle of renegotiating annually.”
Outstanding chair.
Like in this case, there is often a sense of urgency when we receive the inevitable question:
“Do you have salary data for comparable roles in peer schools?”
Yes, as recruiters, we often research salaries and provide a benchmarked range required to attract someone new.
But we’re not always privy to the annual increase conversation. We are busy engaging talented professionals on behalf of our search clients with questions like: ‘What would need to be true for you to consider a new role?’ That approach to the conversation expands the field of opportunity beyond just the perquisites of a promotion, title, or cash compensation. Our aim is to elicit what is truly important to a prospective leader.
In that recruiting conversation we often learn why professionals are motivated to leave organizations. A deficient pay package isn’t usually the first factor that comes up. Feeling isolated and under-supported is often the prime motivation to look elsewhere. A statement like ‘People don't know how hard this job is’ can be a precursor to an unexpected departure and a headache for those in governance.
“My board doesn't understand what goes into the work.”
This gap in perception about the degree of difficulty of leadership work that drives talent away isn’t just anecdotal. We discussed some of the findings from the 2023 NAIS State of Independent School Governance survey at a recent Board/Head Forum for a network of schools. Attendees at the conference identified the areas where Heads and Board chairs disagreed most dramatically about how their board actually works.
According to the study, within Head-board leader pairs at the same school, 46% disagreed on their answer to the assertion that “Board members’ own further learning and growth about the school and the board’s work are a high priority”. Does this mean trustees are truly invested in discerning the conditions on the ground and in operating the mechanisms required for good governance? If not, how can they possibly set appropriate goals, or offer support that is sufficient to overcome the school’s challenges?
Your negotiating success might not be defined by reaching the right number; it might be in exercising curiosity around how to deepen the partnership you are forging with the Head, starting with what the goal is.
What was the goal again?
A successful negotiation process attempts to: retain the Head, exercise fiscal discipline, ensure the Head compensation package doesn’t undermine trust with faculty and staff, take the Head’s performance into consideration, and avoid a financial shock when it’s eventually time to pay market rate for a successor. Balancing those trade-offs is not easy.
There’s not one correct path. But the most common mistake is to treat the negotiation as a transactional exercise. Instead, define your broadest outcomes to both (a) ensure the Head feels deeply valued and incentivized to execute on the plan, and (b) position the Board to protect the fiduciary health and cultural morale.
That might mean arranging for a few more steps than you had originally planned, and adjusting your target. Take the time to secure the ‘data’ that resides within your relationship with the Head, not only the published salaries of peer school leaders.
The case study email above turned into a phone call with our former client:
Board chair: “…What I'm hearing is that it's relevant what you want to pay him next year. But the bigger question is: ‘How do you build a runway to a successful 10 years?’ And that is something you don't do on your own. You do that in dialogue and in partnership with the leader.
Vice chair: “I love this widened conversation. If we were to have this conversation with our leader, we would undoubtedly learn. Some of those learnings might be confirmatory, but there might also be some that are shockingly new about what is important to him. I put this under the heading of making sure we gain a lot of clarity first on what we are actually solving for.”
When looking to retain your current Head, take a page from the recruiter’s playbook. Use a framing like ‘What would need to be true?’ to signal your openness, acknowledge the competing forces at work, and invite deeper conversation. Aim for institutional integrity and continuity, not just task completion.
Your board chair checklist:
Look beyond the immediate. Avoid negotiating year-to-year. Where possible, secure a 3-5 year horizon to support bold long-term decisions by the Head.
Separate evaluation from negotiation. To keep feedback focused on growth and support, schedule the annual performance review well before, and independently - with a different set of board representatives - of the contract/salary adjustment conversation.
Communicate alignment. Ensure the Head knows that a generous, structured package reflects the Board’s trust in their vision for the school’s future.
Trust your gut. If you cannot complete the first three steps in good faith because of serious, shared, and ongoing doubts about the leader’s performance, then do not proceed. Pause, take stock, and seek help. It can be difficult or even painful to reset expectations, reinvest in the team, or effect personnel change. But protecting a status quo that you know is not working undermines institutional integrity and makes it harder for the community to eventually recover.
Judging what's 'fair', in our experience, rests not on the final number, or what other schools pay. The process of arriving at a number is stronger when it can be co-designed, when it engages the board and senior leadership teams appropriately, and when it fosters a stronger relationship between the leader and the board chair.
PS. If you are a school leader, we would love to hear from you. What about this resonates? What else do you wish your board chair - or incoming board chair - would know ahead of your next talk about compensation? Send us a confidential note at partners@narwhaltalent.com