What Is Missing from Your Church's Executive Pay Plan?
Sep 24, 2025Executive leadership is particularly crucial for creating the vision, running the church, and providing spiritual care as churches grow and become more complex, especially those with 2,500 to 10,000 members. You need to do more than just pay your executives well. You also need to protect your church legally, be honest about what you're doing, inspire your leaders, and make sure that their pay is in accordance with your church's mission and principles. Many churches don't pay attention to crucial aspects of a proper CEO pay plan, which could lead to legal issues, conflicts inside the church, and worries from donors. This guide tells you what your church might be missing in its current approach and gives you steps you can take to make it stronger, as outlined in Tier 3: THE PASTOR SUPPORT PLAN.
Why the Strategy for Executive Pay Matters
- Legal Compliance: When churches set up equitable, well-documented pay plans, they have to satisfy IRS guidelines, employment laws, and the rules for running a nonprofit.
- Pastoral Protection: Fair and open remuneration keeps pastors and executives from being accused of being too much or having a conflict of interest.
- Organizational Stability: A clear plan helps keep and motivate the key leaders your church needs to grow and stay healthy.
- Donor Trust: Open pay makes donors, church members, and the community as a whole trust each other more.
What Church Executive Pay Plans Often Don't Include
- Full Compensation Benchmarking: A lot of churches don't compare the compensation of their leaders to that of other churches, which could mean they pay too much or too little. Use polls from other places and information from your own denomination to figure out how much to pay people.
- Written Rules and Policies for Paying Workers: When there aren't any written rules, it can look like pay decisions are haphazard or unjust. Policies should cover things like wages, bonuses, perks, housing allowances, and money for costs.
- Pay Should Be Reviewed and Changed on a Regular Basis: The church should review executive pay every year based on growth, success, and changes in the market. A lot of churches don't do frequent reviews, which could mean that their salary is out of date or not what they require.
- Review and Approval by a Third Party: An unbiased board or compensation committee must look over and approve pay decisions to avoid conflicts of interest. This monitoring protects religious leaders and makes sure the government is honest.
- Clear Communication and Writing: Keep track of pay packages, board approvals, and the reasons for them. Be honest about your compensation policies with important people to build trust.
How THE PASTOR SUPPORT PLAN Can Enhance Your Church's Plan for Paying Its Leaders
The PASTOR SUPPORT PLAN can help churches with 2,500 to 10,000 members:
- Experts can help you with full salary benchmarking tools and analysis.
- Policy writing and governance consulting that is tailored to how your business works.
- Help with setting up independent review processes and pay panels.
- Templates for writing down information and ways to talk to each other.
- Pastoral protection schemes include things like personal wealth planning and checking how much CEOs make.
To sum up, make your executive pay plan stronger so it will have a long-term influence. A good executive pay plan protects your church from legal concerns, assists the pastoral leadership, and maintains the church's health. If your church wants to honor its leaders and mission, it may come up with a new way to pay them that fixes what's wrong with the old one and works with the PASTOR SUPPORT PLAN.
Links Inside
Links to Other Websites
- IRS Guide on Reasonable Compensation
- National Association of Church Business Administration (NACBA)
- BoardSource on Executive Compensation
Notice
This blog article is not legal advice; it is simply meant to give you information. For specific help, talk to a lawyer who is licensed.
