[Lnc-business] seeking cosponsors for EPCC and Contract Review motion

Fri Oct 23 18:46:55 EDT 2015

Mr. Olsen:

I hope you will change your vote to Yes on this motion.

It is reasonable and usual for Compensation Committees to determine salary
levels and bonus structures for key employees.

   http://www.nolo.com/legal-encyclopedia/nonprofit-board-committees.html

"Nonprofit Board Committees

Compensation committee: The compensation committee's function is to
determine how much directors, officers, and key employees of the nonprofit
should be paid. To avoid any claims by the IRS or others that compensation
is excessive, the compensation committee should research what other
nonprofits pay for similar positions and document how it makes it
decisions."

   Scott Lieberman

  _____  

From: Lnc-business [mailto:lnc-business-bounces at hq.lp.org] On Behalf Of Norm
Olsen
Sent: Friday, October 23, 2015 3:12 PM
To: lnc-business at hq.lp.org
Subject: Re: [Lnc-business] seeking cosponsors for EPCC and ContractReview
motion

I will be voting against this motion.

My experience over the last 5+ years convinces me that the problem addressed
is a real one; an issue that needs to be addressed and I am in favor of
addressing it.  I am not in favor of the currently proposed solution.  There
are just too many hurdles, deadlines, and areas of confusion as to who can
do what and when it can/must be done.  The Chair and prospective employee
should be able to make a deal and feel confident that it is done; rather
than live in limbo for weeks.  If one side has the ability to walk away from
the deal, the other side has an equal opportunity.

May I suggest that we look for solutions involving actions prior to the
start of negotiations.  That is, before the need for negotiations arises,
this committee should have already established some basic guidelines as to
what is acceptable in a contract and what is not.  This guideline (or
perhaps boilerplate) would, of course, have the blessing of counsel and the
EPCC prior to ever being used in a negotiation, and the Chair could/would be
explicitly instructed, generally, as to what kind of modifications are
acceptable and those which are not.

In the contracts which have caused this issue to become a matter of concern,
the problem areas where no so much the numbers involved (i.e. the "how much"
part), but ambiguous language as to when certain criteria are met and when
they are not (severance pay, moving expenses, bonuses, etc).  I believe the
suggestion given above applies to these sorts of things, and leaves the
Chair the flexibility of negotiating the "how much" part, which will always
be limited to a certain degree by budgetary constraints.

Norm

-- 

Norman T Olsen

Regional Representative, Region 1

Libertarian National Committee

7931 South Broadway, PMB 102

Littleton, CO  80122-2710

303-263-4995

From: Lnc-business [mailto:lnc-business-bounces at hq.lp.org] On Behalf Of
Alicia Mattson
Sent: Sunday, October 18, 2015 9:30 PM
To: lnc-business
Subject: [Lnc-business] seeking cosponsors for EPCC and Contract Review
motion

Many of you may recall that in the last LNC meeting, I made a motion to
modify the EPCC's role in director-level contract review.  It received a
majority vote, but due to several abstentions, the vote wasn't sufficient to
adopt it without having given previous notice.

Based on good feedback during and after the meeting, I've made some
additional changes to the proposal, and at this time I'm asking for
co-sponsors for the attached motion.

Our current policy has a number of defects:

*	It requires that a proposed director-level employment contract must
be reviewed by the EPCC, but it doesn't say that any EPCC objections or
concerns have to be fixed.  In theory a chair could say, "They reviewed it
and didn't like it, but I don't have to listen to them, so I signed it."
*	Our policy requires that the contract be circulated to the LNC, but
it doesn't specify that this ought to happen before the contract is signed
so that any problems identified by the LNC can be addressed before
execution.
*	Our policy requires that the general counsel review it, but it
doesn't require that the general counsel's advice be shared with those
conducting the review.  It could be that only the chair knows what the
general counsel's advice was.
*	Compensation is a non-trivial percentage of our expenses.  The
director-level contracts have substantial financial impacts well beyond that
person's base pay rate, and we just need more eyes reviewing those
offerings.  Contracts can offer additional benefits beyond the standard
benefits in the employee manual.  I pointed out recently that the wording of
bonus structures in recent years has been changed such that having a good
quarter at the beginning of a year can create a bonus multiplier effect --
one good quarter can create bonuses in other quarters even if the other
quarters were terrible.  The prior wording did not contain that flaw.  More
eyes reviewing the contract will reduce the chances of missing that kind of
detail.

My proposal would:

*	make it clear that the LNC must see the contract before it is
signed.
*	require that General Counsel advice be shared with the EPCC and LNC.
*	require that a review body approve the contract, not just have a
chance to review it with no power to require changes.  That review body can
either be the EPCC (we did create them to play this sort of role), or if the
EPCC members were cantankerous and played the role of 3-person-roadblock to
hiring person X rather than finding functional contract language, a Chair
could go around the EPCC and have the entire LNC approve it instead.
*	change how the EPCC is appointed.  It is currently appointed by the
LNC Chair, but since the EPCC would have a role of approving the chair's
proposal, that committee should be selected by the LNC rather than be
appointees of the Chair.
*	disallow the LNC Chair from serving on the EPCC, where he would be
one of three votes approving his own proposal.

An additional feature is that because the LNC must see the contract 10 days
before it is signed, if the EPCC were to initially approve a contract but
the LNC had a serious objection to it, there would still be time for the LNC
to use an email ballot to override the decision of the EPCC.

There is a term in this proposal that I want to point out.  If the LNC
approves the contract, it requires "an affirmative vote from a majority of
the fixed membership of the LNC."  If there are no LNC vacancies, and
everyone votes, then this is the same requirement as a majority vote.  The
"fixed membership" clause says that the denominator for calculating a
majority isn't just the number of ballots cast.  The denominator is the
total number of LNC seats including any vacant ones, regardless of how many
might have abstained from the vote.

Co-sponsors?

-Alicia

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