Based on a simple revenue-to-compensation ratio, the Big Three standardized testing companies' top officers receive compensation that is many times larger than even the largest American non-profit companies. In fact, the CEOs of the Big 3 receive an average of over ten times that of the five largest non-profits. Why do they feel it is ethical for them to earn more money than the CEOs of humanitarian organizations? Furthermore, how are they getting away with violating the IRS's "Inurement/Private Benefit" rule?
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CEO Compensation
(Compensation-to-Revenue Ratio)
The Big 3 vs. the Top Five U.S. Non-Profits
|
 |
Americas Five Largest Non-Profits |
| Non-Profit |
Revenue
(million) |
CEO |
Compensation |
Compensation Statistic* |
|
| Mayo Clinic |
$6,898 |
Denis H Cortese |
$1,313,246 |
0.19 |
|
| YMCAs of America |
$6,050 |
Neil Nicoll |
$522,923 |
0.09 |
|
| United Way |
$4,370 |
Brian A Gallagher |
$682,490 |
0.16 |
|
| Salvation Army |
$4,156 |
Israel L Gaither |
$108,088 |
0.03 |
|
| Red Cross |
$3,155 |
John F McGuire |
$1,050,044 |
0.33 |
|
AVERAGE |
$4,926 |
|
$735,358 |
0.16 |
|
|
"Big 3" Testing Companies |
| |
Revenue
(million) |
CEO |
Compensation |
Compensation Statistic* |
Compared to Industry Average Statistic of 0.16 |
| ETS |
$880 |
Kurt M Landgraf |
$997,608 |
1.13 |
Exceeds by 7 times |
| ACT Inc |
$237 |
Richard L Ferguson |
$630,918 |
2.66 |
Exceeds by 16.5 times |
| College Board |
$583 |
Gaston Caperton |
$830,832 |
1.43 |
Exceeds by 8.9 times |
AVERAGE |
$566 |
|
$819,786 |
1.74 |
Exceeds by 10.8 times |
Note: Facts and figures are based on tax filings (IRS Form 990) and company statements for 2007, the most recent records available.
* The compensation statistic is a simple ratio of compensation to revenue (multiplied by 1000 for easy evaluation).
Kurt M Landgraf (ETS) is compensated almost as much as the CEO of the Red Cross, an organization nearly four times larger than ETS. He is paid more than three of the top five nonprofit CEOs, and his compensation-to-revenue measure is seven times the industry average.
Richard L Ferguson (ACT Inc) has a compensation-to-revenue ratio that is sixteen and a half times the average of even the largest American nonprofits, making him by far the most exorbitantly paid CEO in the testing industry on the basis of company revenue.
Gaston Caperton (College Board) is paid close to nine times the industry average based on revenue. His compensation package is larger than the CEOs of three of the five largest American nonprofits.
Visit our pages for each of the Big 3 to learn more about how they are acting unethically:
• ETS
• ACT Inc
• College Board
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