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Prosperity Perpetuation® Concepts, Strategy and Management
1215 Superior Ave., Suite 410
Cleveland, Ohio 44114-3289
Tel: (216) 621-4391
Fax: (216) 621-4392
www.calfeefinancial.com
Peter H. Calfee, CFP, CPA, CLU, AEP, MBA
President
Financial expertise for successful people sm
Prosperity Perpetuation® Concepts, Strategy and Management
MOTIVATION
• Pursuit of excellence
• Passion for learning
• Challenge
• Proactive
• Desire to help children
• Love of people
Prosperity Perpetuation® Concepts, Strategy and Management
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
Prosperity Perpetuation® Concepts, Strategy and Management
• 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
RESPONSIBILITIES
Prosperity Perpetuation® Concepts, Strategy and Management
FAIR COMPENSATION
• A “Bridge” between you and the School
Prosperity Perpetuation® Concepts, Strategy and Management
COMPENSATION
• Salary
• Bonus\Other
• Deferred compensation
Prosperity Perpetuation® Concepts, Strategy and Management
SALARY
• Market driven• Negotiated• Comparability issue
Experience School issues Geographic
location
Prosperity Perpetuation® Concepts, Strategy and Management
BONUS - OTHERGUARANTEED OR DISCRETIONARY FOR
PURPOSE OF DISCUSSION & INCLUSION
Insurance coverage
Cars
Financial planning
Tuition remission
Sabbaticals
Clubs
Other
Prosperity Perpetuation® Concepts, Strategy and Management
DEFFERED COMPENSATION
• QUALIFIEDQUALIFIED– 403 B
– 457 Plans
– 401 K for Non-profits
• NON-QUALIFIEDNON-QUALIFIED– Ineligible 457 Plans
– Other plans designed for unique application
Prosperity Perpetuation® Concepts, Strategy and Management
POTENTIAL PURPOSE OF NON-QUALIFIED PLANS
Retention of employees
Performance based or incentive
Or both
Prosperity Perpetuation® Concepts, Strategy and Management
FAIR COMPENSATION
• Eye of the beholder
• Depends on working relationship
• Board views as to compensation
• Self analysis
Prosperity Perpetuation® Concepts, Strategy and Management
FAIR COMPENSATION• First pillar = Salary
• Second pillar = Bonus/other
• Third pillar = Deferred Compensation
Prosperity Perpetuation® Concepts, Strategy and Management
DEFERRED COMPENSATION
• Retention driven• Performance driven
• Or
– Both
Prosperity Perpetuation® Concepts, Strategy and Management
ORIGINS OF DEFERRAL
• For-profit world• Change in retirement laws• Desire of board to reward• Competition for talent• Retention based pay• Incentive based pay
Prosperity Perpetuation® Concepts, Strategy and Management
FOR WHOM?
Exclusive
Discriminatory
Can be complicated
Tax issues drive design
Prosperity Perpetuation® Concepts, Strategy and Management
CRITICAL TAX ISSUES
• Constructive receipt of funds
• Substantial risk of forfeiture
Prosperity Perpetuation® Concepts, Strategy and Management
TYPES OF FUNDING
Similar to government approved retirement plans
Defined “Benefit”
Defined “Contribution”
Prosperity Perpetuation® Concepts, Strategy and Management
METRICS
• Benchmarks
• Goals
• Quantitative
• Qualitative
Prosperity Perpetuation® Concepts, Strategy and Management
METRICS
Achieve capital goalsIncrease endowmentsMaintain operations
Improve administrationElevate school reputation
Annual fundExpand campus
Renovate buildingsMaintain culture
Prosperity Perpetuation® Concepts, Strategy and Management
DEFINE & DESIGN
• Risks ----- Problems:– Encumber future Boards– Clarify actual cash commitment– School wants to keep Head?– Head wants to commit to school?
Prosperity Perpetuation® Concepts, Strategy and Management
Other Considerations
• School Culture
• Financial Resources
• Goals and Missions
• Purpose of Program
Prosperity Perpetuation® Concepts, Strategy and Management
SUMMARYUNDERSTAND
• Compensation Program• School’s Mission & Vision• Inner concepts, desires, goals &
beliefs of Head• What performance means/metrics• Longevity of program
Prosperity Perpetuation® Concepts, Strategy and Management
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”
Prosperity Perpetuation® Concepts, Strategy and Management
FINALLY
• The entire discussion responds to the natural human desire to be treated fairly in a competitive world.
