MOTIVATION

1
Peter H. Calfee, CFP, CPA, CLU, AEP,
MBA President
1215 Superior Ave., Suite 410 Cleveland, Ohio
44114-3289 Tel [phone] Fax (216)
621-4392 www.calfeefinancial.com pcalfee_at_calfeefin
ancial.com
Financial expertise for successful people sm
2
MOTIVATION

• Pursuit of excellence
• Passion for learning
• Challenge
• Proactive
• Desire to help children
• Love of people

3
RESPONSIBILITIES

• CEO of a multi million-dollar operation
• Balance sheet and profit and loss
  responsibilities
• Responsible for personnel
• Government-mandated responsibility for benefits
  and retirement
• Focus on source of raw material (students)
• Responsible for delivery of quality goods to
  market place (matriculation to college or other
  educational pursuit of choice)
• Deal with work place violence and associated
  personnel disputes and employee complaints
• Required to raise equity and handle financing
  issues including Bond issuance and debt service

4
RESPONSIBILITIES

• Responsible for long-range strategic planning
• Responsible for school vision development,
  maintenance or revitalization of school
  vision/mission/and motto
• Responsible for training and guidance of all
  support personnel
• Accessible to all shareholders, stakeholders,
  and interested parties including federal,
  regional, state and local government employees in
  the educational arena
• Available to the student body for whom you
  exist why you sought the job in the first
  place
• Available to your Board at all times

5
FAIR COMPENSATION

• A Bridge between you and the School

6
COMPENSATION

• Salary
• Bonus\Other
• Deferred compensation

7
SALARY

• Market driven
• Negotiated
• Comparability issue
• Experience
• School issues
• Geographic location

8
BONUS - OTHER

• GUARANTEED OR DISCRETIONARY FOR PURPOSE OF
  DISCUSSION INCLUSION
• Insurance coverage
• Cars
• Financial planning
• Tuition remission
• Sabbaticals
• Clubs
• Other

9
DEFFERED COMPENSATION

• QUALIFIED
• 403 B
• 457 Plans
• 401 K for Non-profits
• NON-QUALIFIED
• Ineligible 457 Plans
• Other plans designed for unique application

10
POTENTIAL PURPOSE OF NON-QUALIFIED PLANS

• Retention of employees
• Performance based or incentive
• Or both

11
FAIR COMPENSATION

• Eye of the beholder
• Depends on working relationship
• Board views as to compensation
• Self analysis

12
FAIR COMPENSATION

• First pillar Salary
• Second pillar Bonus/other
• Third pillar Deferred Compensation

13
DEFERRED COMPENSATION

• Retention driven
• Performance driven
• Or
• Both

14
ORIGINS OF DEFERRAL

• For-profit world
• Change in retirement laws
• Desire of board to reward
• Competition for talent
• Retention based pay
• Incentive based pay

15
FOR WHOM?ExclusiveDiscriminatoryCan be
complicatedTax issues drive design
16
CRITICAL TAX ISSUES

• Constructive receipt of funds
• Substantial risk of forfeiture

17
TYPES OF FUNDINGSimilar to government approved
retirement plans Defined BenefitDefined
Contribution
18
METRICS

• Benchmarks
• Goals
• Quantitative
• Qualitative

19
METRICSAchieve capital goalsIncrease
endowmentsMaintain operationsImprove
administrationElevate school reputationAnnual
fundExpand campusRenovate buildingsMaintain
culture
20
DEFINE DESIGN

• Risks ----- Problems
• Encumber future Boards
• Clarify actual cash commitment
• School wants to keep Head?
• Head wants to commit to school?

21

• Other Considerations
• School Culture
• Financial Resources

• Goals and Missions
• Purpose of Program

22
SUMMARYUNDERSTAND

• Compensation Program
• Schools Mission Vision
• Inner concepts, desires, goals beliefs of Head
• What performance means/metrics
• Longevity of program

23
UNDERSTAND

• Financial Accumulation of Funds
• The Board and its inner workings
• That all knowledge learned in this process is
  good you will know where you Stand

24
FINALLY

• The entire discussion responds to the natural
  human desire to be treated fairly in a
  competitive world.