Approving a budget with salaries

[Moderator Tim]

At our upcoming annual meeting, one of our tasks is the approval of the 2014 budget.  The budget includes salary and benefits for our Executive Director.  Because the salary and benefits are a negotiated agreement between the Executive Director and the Board, can they be amended by the annual meeting by a motion from the floor?  

 

For example, if one wanted to "move to reduce the salary by 50%" would this be allowed?  Or would the proper technique be to vote down the budget and require to bring a new one for approval?

[jstackpo]

The answer, if there is one, probably depends on your bylaws.  Do they give full or exclusive power to the Board in the matter of negotiting saleries?

 

You will have to look closely at your bylaws.   Meanhile take a look ar RONR, p.577 and following.

[Chris Harrison]

You also might want to check with a lawyer.  If the Board and Executive Director had entered into a contract or other formalized agreement regarding his salary and benefits there could be legal implications if the terms are unilaterally changed by the Board or Membership.

[Josh Martin]

At our upcoming annual meeting, one of our tasks is the approval of the 2014 budget.  The budget includes salary and benefits for our Executive Director.  Because the salary and benefits are a negotiated agreement between the Executive Director and the Board, can they be amended by the annual meeting by a motion from the floor?  

 

For example, if one wanted to "move to reduce the salary by 50%" would this be allowed?  Or would the proper technique be to vote down the budget and require to bring a new one for approval?

 

From a parliamentary perspective, I don't see a problem with the membership reducing the salary, unless the board has exclusive authority in that area. See Official Interpretation 2006-13 for more information. There may, however, be legal issues involved. It would be best to consult a lawyer before proceeding.

 

If it is appropriate to for the membership to reduce the salary, then the appropriate course of action would certainly be to amend the budget, not to vote down the budget in its entirety. It's also worth considering that if a motion is adopted to reduce the salary by 50%, I wouldn't be surprised if you need to find a new Executive Director.

[Rev Ed]

 It's also worth considering that if a motion is adopted to reduce the salary by 50%, I wouldn't be surprised if you need to find a new Executive Director.

 

Or more likely you will need to get a good lawyer.

 

I would argue that if the Board has power to hire and fire staff - and more importantly to set their wages/salaries, that the membership cannot change these afterwards.  A lawyer should be consulted before the meeting just to determine the legal ramifications of not accepting the salary portion of the Budget presented.

 

Where paid staff are involved, I normally prefer the Board to control the Budget as this is the type of problem that you can get.  "Let's pay less" sounds great but can make recruitment and retention difficult.

 

On a side note, if the general membership approved the Budget, it would be preferable if the Board dealt with salary issues after the Budget is approved, not before.  At this point I would argue that the motion is null and void with regards to this year's salary, but could be applied to future budgets.  However, I believe a legal point is URGENT if this is more than just a hypothetical situation.

[Josh Martin]

Or more likely you will need to get a good lawyer.

 

There's no reason it can't be both.

 

I would argue that if the Board has power to hire and fire staff - and more importantly to set their wages/salaries, that the membership cannot change these afterwards.  A lawyer should be consulted before the meeting just to determine the legal ramifications of not accepting the salary portion of the Budget presented.

 

Where paid staff are involved, I normally prefer the Board to control the Budget as this is the type of problem that you can get.  "Let's pay less" sounds great but can make recruitment and retention difficult.

 

On a side note, if the general membership approved the Budget, it would be preferable if the Board dealt with salary issues after the Budget is approved, not before.  At this point I would argue that the motion is null and void with regards to this year's salary, but could be applied to future budgets.  However, I believe a legal point is URGENT if this is more than just a hypothetical situation.

 

Unless the bylaws grant the board exclusive authority to set the ED's salary, I still see no parliamentary reason why a motion to reduce the ED's salary would be out of order, let alone null and void if adopted.

 

I am in complete agreement, however, that it would be highly advisable to seek legal advice before proceeding.

[Moderator Tim]

Thanks.  Our annual meeting contains approx. 250 voting members.  I know the group well enough that if a motion like this were to come, it would stand no chance. May even die for lack of a second.  All the same, as parliamentarian, I'd prefer to advise the chair on how to rule it out of order.

 

It appears that our bylaws aren't helpful here--the root of the problem.

 

Anyway, thanks for the input.

[Josh Martin]

All the same, as parliamentarian, I'd prefer to advise the chair on how to rule it out of order.

 

Well, that may be a problem, since it is in order, unless the board has the exclusive authority to set the ED's salary.