CEO Compensation Checklist

Does your organization have a process for establishing chief executive compensation? If not, BoardSource recommends the board create a plan to reflect the IRS rules and leading practices regarding executive compensation, which will also help to recruit and retain the best possible chief executive. This checklist outlines 11 key items to consider when creating a compensation plan, including

• reviewing the chief executive job description
• understanding the marketplace
• identifying negotiation points within the contract
• developing the organization’s compensation philosophy

Board Checklist for Establishing a Chief Executive Compensation Plan

1. Ensure that the board has complete information on current compensation.
2. Review the organization’s mission, goals, and strategy to ensure that the compensation plan will support them.
3. Establish or review the chief executive job description and employment contract.
4. Develop or review the organization’s compensation philosophy.
5. Understand the marketplace; acquire and analyze appropriate market data on compensation
6. Ensure that the compensation level and structure will meet legal requirements; establish a process for documenting the chief executive compensation decision and ensure that the process is followed; retain legal counsel if necessary.
7. Review compensation for purposes of stakeholder and public scrutiny.
8. Establish the compensation level and plan
9. Establish an ongoing process for reviewing chief executive compensation and job performance. The process should include setting annual and long-term goals, conducting annual performance reviews, and adjusting compensation each year based on market and performance.
10. Identify negotiation points with respect to the chief executive contract
11. Ensure the compensation of other disqualified persons is reasonable, meets federal and state legal requirements, and is consistent with organization’s mission and purpose.

101 Resource | Last Updated August 20, 2025