There is a structural flaw that quietly undermines some public agencies and special districts: elected boards inserting themselves into the salaries of executives who do not report directly to them.
At first glance, this might sound like responsible oversight. After all, public dollars are involved. But in practice, it creates a dynamic that is politically driven, operationally dysfunctional, and deeply unfair.
The reality is simple: boards should set the compensation of the CEO. The CEO should set the compensation of the executive team.
That division of responsibility exists for a reason.
When boards involve themselves in executive salaries below the CEO level, they blur the line between governance and management. Compensation decisions that should be based on industry benchmarks, geographic labor markets, performance, productivity, and experience instead become vulnerable to something else entirely: politics.
And executives are one of the few populations in society that people seem perfectly comfortable treating as political punching bags.
There is a strange cultural assumption that executives — those responsible for running complex organizations that affect thousands of lives — are somehow uniquely undeserving of fair compensation. Never mind that these individuals often spent decades building their expertise, invested heavily in formal education, often actually work longer hours than most frontline staff, and carry the ultimate accountability when things go wrong.
Somehow, the narrative becomes that executives should simply absorb whatever the political climate dictates. But governance structures should not be designed around public resentment. They should be designed around sound management principles.
When boards override the CEO’s authority to set executive compensation, two predictable outcomes occur:
First, compensation becomes politicized.
Second — and far worse — boards often retain that authority but then fail to exercise it responsibly.
Raises become controversial. Adjustments get delayed. Compensation falls behind industry standards. The easiest political decision is to do nothing.
And doing nothing has consequences.
Now, to be fair, situations like this may not be the norm across every public agency or special district. Many boards understand the difference between governance and management and respect the CEO’s responsibility to lead the executive team. But even if these situations occur in only a handful of organizations, that is still too many. Governance structures that politicize executive compensation or prevent organizations from maintaining competitive leadership pay create long-term harm — not only for the individuals involved, but for the stability and effectiveness of the institutions those boards were elected to oversee.
I know it well because I lived it.
Throughout my career, beginning at age 24 when I made a deliberate decision to accelerate my professional development and education, I consistently received both cost-of-living adjustments and merit increases. In every role I held while climbing the career ladder, my performance reviews resulted in the maximum merit increase available.
Not because I demanded it, but because I delivered results.
That pattern continued until I became an executive at a public healthcare district.
Despite being an essential component in bringing in millions of dollars in new revenue, donations, and support, while also saving millions more through operational improvements, and consistently delivering very high performance, I did not receive a single cost-of-living adjustment or merit increase during six and a half years in that role.
Not one. I made the same amount at the end of six-and-a-half years as I did on day one.
Every other employee in the organization received regular increases. The executive team did not.
Why?
Because the elected board had inserted itself into executive salary decisions and then chose not to act.
When you don’t receive a COLA, you are effectively earning less every year due to inflation. When you also miss merit increases, you fall further behind your professional peers.
The compounding effect is very real.
Had my compensation simply increased by a modest 3 percent cost-of-living adjustment and a 3 percent merit increase each year, my salary progression would have been entirely reasonable by industry standards.
Instead, over six years, that board’s inaction cost me $318,804 in salary alone. To put this into perspective, that is enough money to pay off the mortgage on my house.
And that figure does not include retirement contributions, pension calculations, or the long-term impact on future salary negotiations.
Just salary.
Now, to be fair, some of that responsibility belongs to me. I stayed longer than I should have. If a board insists on maintaining control over executive compensation while simultaneously refusing to adjust it appropriately, the rational response is to leave.
It was one of the principal reasons I eventually left. And that is exactly the advice I now give to others.
If you are a board member engaging in this behavior, it is time for some self-reflection.
Your role is governance, not management.
Set the compensation of the CEO. Hold them accountable for results. Then allow them to run the organization — including setting compensation for their executive team based on performance, market realities, and organizational priorities.
And if you have an attorney advising your board to retain authority over executive compensation below the CEO, or encouraging you to artificially constrain executive salaries based on political optics or arbitrary considerations, you should seriously reconsider that advice.
In fact, you should probably fire that attorney.
That is not good governance counsel. It is bad management advice wrapped in legal caution. Boards should not be designing compensation systems around fear of headlines. They should be designing them around the long-term health and leadership stability of the organization.
While we’re on the subject, boards should also remember something else.
The one salary they absolutely must get right is the CEO’s.
If you are underpaying your CEO relative to their predecessors, their peers, or industry benchmarks — especially while expecting them to navigate financial crises, political scrutiny, and operational complexity — you’re not being fiscally responsible.
Whatever your justification, it doesn’t matter. You’re being shortsighted.
Strong leadership is one of the most valuable assets an organization can have. Governance structures should reinforce that reality, not undermine it. When boards politicize executive compensation, they don’t just hurt individual leaders; they weaken the institutions they were elected to protect.
But there is another audience that needs to hear this message: Executives.
If you find yourself working in an organization where an elected board has inserted itself into the salaries of your leadership team and then refuses to adjust them appropriately, you cannot simply accept it as the cost of doing public service.
Doing so doesn’t make you noble. It simply allows a flawed system to continue.
Executive leadership is already a demanding calling. The hours are long, the stakes are high, and the responsibility is immense. The job requires years of preparation, education, and hard-earned experience.
You should expect to be evaluated based on your performance and compensated based on objective market realities — not the political discomfort of board members who would rather avoid difficult conversations.
If the board insists on controlling executive compensation, then they also carry the responsibility of managing it appropriately.
And if they refuse to do so, executives must be willing to act.
Have the conversation. Bring forward the market benchmarks. Document the results you’ve delivered. Explain the long-term consequences of failing to keep executive compensation competitive.
And if the answer remains the same — if the board continues to cling to authority while refusing to exercise the responsibility that comes with it — then you have another decision to make.
Walk.
No organization benefits from governance structures that quietly erode leadership capacity year after year. And no executive should spend years of their career allowing their compensation, their value, and their professional standing to be slowly diminished because elected officials are afraid of the politics of paying people fairly.
Leadership requires courage.
That applies to boards.
And it definitely applies to executives, too.
Aaron J. Byzak, MBA, is a writer, speaker, and lifelong observer and developer of people and systems. He is the Chief Strategist and Lead Consultant for Galvanized Strategies, a strategic public affairs and leadership consulting firm that specializes in healthcare and non-profit clients, but excels across industries. His work draws on more than 30 years of experience in healthcare, leadership, public affairs, mentoring, and coaching — shaped by personal resilience, a deep sense of purpose, and a passion for driving meaningful change.
Read more insight from Aaron by following him on LinkedIn. He can be reached at aaron@galvanizedstrategies.com or at 760.889.3609.
