Executive Compensation Policy
COMPENSATION POLICY FOR OFFICERS, DIRECTORS,
TOP MANAGEMENT OFFICIALS, AND KEY EMPLOYEES
ARTICLE I POLICY AND PURPOSES
This is the policy of the Youth Pride Association (the “organization”) with respect to the review and approval of compensation of its directors, officers, and executive employees.
It is the policy of the organization that all compensation paid by the organization, based upon a review of comparability information, be fair and reasonable and not excessive.
This policy is intended to supplement and/or implement state and federal laws governing executive compensation that are applicable to nonprofit organizations.
ARTICLE II COMPENSATED INDIVIDUALS COVERED BY POLICY
This policy provides a procedure for the review and approval of the compensation of Compensated Individuals.
For the purposes of this policy, Compensated Individuals are (i) the organization’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and Chief Development Officer., (ii) any other disqualified person defined in Internal Revenue Code Section 4958, and (iii) officers, and key employees whose compensation is or would be reportable on the IRS Form 990 or Form 990-EZ.
ARTICLE III PROCEDURE FOR APPROVAL OF COMPENSATION ARRANGEMENT
Section 1. Governing Body. The Executive Compensation Committee ("Governing Body") shall approve the compensation of Compensated Individuals, with final approval by simple majority from the Board of Directors.
Section 2. Approval by Persons without a Conflict of Interest. Compensation of Compensated Individuals shall be approved by the Governing Body, provided that persons with a conflict of interest with respect to the compensation arrangement at issue are not involved. Members of the Governing Body do not have a conflict of interest if they:
(a) Are not benefitting from or participating in the compensation arrangement or a family member of any such person;
(b) Are not in an employment relationship subject to the direction or control of any person benefitting from or participating in the compensation arrangement;
(c) Do not receive compensation or other payments subject to the approval of any person benefitting from or participating in the compensation arrangement;
(d) Have no material financial interest affected by the compensation arrangement; and
(e) Do not approve a transaction providing economic benefits to any person participating in the compensation arrangement, who in turn has or will approve a transaction providing economic benefits to the member.
Section 3. Use of Comparability Data.
(a) In reviewing and approving compensation, the Governing Body shall rely upon comparability data to affirmatively determine that the compensation of the Compensated Individual is reasonable to the organization based upon information sufficient to determine whether the value of services is the amount that would ordinarily be paid for like services by like enterprises, whether taxable or tax exempt, under like circumstances.
(b) Relevant information includes, but is not limited to, compensation levels paid by similarly situated organizations, both taxable and tax exempt, for functionally comparable positions; the availability of similar services in the geographic area of the organization; current compensation surveys compiled by independent firms, and actual written offers from similar organizations competing for the services of the Compensated Individual.
(c) If the organization has average annual gross receipts of less than $1 million for the prior three tax years, the Governing Body will be deemed to have obtained appropriate comparability information if it has information on compensation paid by three comparable organizations in the same or similar communities for similar services.
Section 4. Compensation to be Considered by Governing Body. In determining whether the compensation paid to the Compensated Individual is reasonable, the Governing Body must take into account all benefits paid to the Compensated Individual by the organization including but not limited to base salary, fees, bonuses, severance payments, retirement benefits, fringe benefits, and payments to welfare benefit plans, such as plans providing medical, dental, life insurance, and disability benefits.
Section 5. Remuneration in Excess of $1 Million or Parachute Payments. The Governing Body shall consult with an attorney or tax professional prior to approving (1) any compensation to any individual in excess of $1 million for a taxable year (including compensation paid by entities related to the organization); (2) a payment to a highly compensated employee as defined in Internal Revenue Code section 414(q) which is contingent on the employee’s involuntary separation from the organization and where the present value of the payment is equal or exceeds an amount equal to three times the employee’s average taxable wages; or (3) any compensation to any individual which the Governing Body believes might result in an excise tax under Internal Revenue Code section 4960. The Governing Body may approve any compensation that results in an excise tax under Internal Revenue Code section 4960 only if it determines that it is in the best interests of the organization to do so.
Section 6. Recording Compensation Deliberations. The Governing Body shall contemporaneously document and maintain records with respect to the deliberations and decisions regarding the compensation arrangement. The documentation of the decision shall include:
(a) The terms of the compensation;
(b) The date approved;
(c) The names of the members of the Governing Body who were present during any discussions;
(d) The comparability data obtained and relied upon, and how it was obtained;
(e) Any action taken with respect to consideration of the compensation by a member of the Governing Body who had a conflict of interest with respect to the compensation;
(f) Results of the vote on the compensation arrangement, approvals and rejections by each voting member; and
(g) If the reasonable compensation is higher or lower than the range of comparability data obtained, the basis for the decision.
(h) If the Governing Body was required to consult with an attorney or tax professional pursuant to Section 5 of this policy, the opinion of an attorney or tax professional as to whether an excise tax might be imposed;
(i) If the compensation would result in an excise tax under section 4960 of the Internal Revenue Code, an explanation as to why the compensation is in the best interest of the organization.
Such records of the deliberations and decisions shall be prepared after 90 (“ninety”) days after the decision as to compensation was made. Such records shall be approved by the Governing Body as reasonable, accurate, and complete within a reasonable time period after preparation.
Section 7. Schedule of Compensation Deliberations. The Governing Body’s review and approval of compensation shall occur initially upon hiring, whenever the term of employment, if any, is renewed or extended, and whenever the compensation is modified. Separate review and approval shall not be required if a modification of compensation extends to substantially all employees.
This Executive Compensation Policy was adopted by the Board on October 7th, 2023.