<div dir="ltr">Colleagues,<div><br></div><div>I am attaching a spreadsheet illustrating my proposal for allocating compensation expenses. The numbers are roughly based on the 2015 numbers I was provided; those were historical, showing how compensation was allocated. I made some modifications based on my own thoughts. The point isn't the numbers, though - the point is to have a spreadsheet that makes allocating the budget in this way relatively easy. My intent was to make it easy for the LNC, if it wished to adopt a budget of this form, to see the impacts of changes and proposals. Similarly, the sheet should make it easy for anyone who happens to agree with my view on this overall to come up with hypothetical distributions. I built it quickly, but I believe it is built correctly, and that making changes, either to the total allocation line or to the percentages allocated to each line, should make the other values work out correctly. </div><div><br></div><div>The column "proposed amount" shows what is currently allocated in the proposed budget to that line. The final column shows the percentage of the budget the line will account for once compensation is added. The 1 appearing below the FAE column is a test digit. </div><div><br></div><div>Note that, according to the policy manual, any work that combines two or more lines, or that can reasonably be allocated to two or more lines, goes into Administrative (40). This sheet has that line at 20%, but it may need to be higher. </div><div><br></div><div>I've given most of my arguments for this sort of allocation before, but the highlights are that I believe it will enable the LNC to do more governing and less managing, will give staff broad instructions at the start of the fiscal year and avoid micromanagement later, enables the LNC to adapt to changed goals or aims during the term by amending the budget, and shows anyone looking at the budget what the LNC's priorities are, in a quantitative manner. It is more transparent than a large compensation line, and it would be, in my opinion, a useful tool for the LNC to exercise its governance responsibility.</div><div><br></div><div>To clarify, this proposal has nothing to do with how hard staff works. I think we all agree about that topic. This isn't about checking up on them; it's about the board setting broad priorities. It also imposes no new obligations on staff; the policy manual already calls for timesheets. In fact, it is my hope that a move in this direction would lead the LNC to be less demanding on staff, not more.</div><div><br></div><div>In any case, thank you for your time and consideration. </div><div><br></div><div><div><div class="gmail_signature" data-smartmail="gmail_signature"><div dir="ltr"><div><div dir="ltr">Joshua A. Katz<div><br></div></div></div></div></div></div>
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