NFP board pay divides sector

Not-for-profit aged care provider Bethanie has set a high benchmark for board remuneration in a sector where many of its peers do not pay any fees to board members.

Bethanie’s 2016 financial statements show its seven board members were paid a total of $489,227 last financial year, with chairman Barry Honey paid $114,591.

Southern Cross Care WA is the only other major NFP aged care provider in Western Australia that pays fees to its board members.

It paid a total of $213,424 to its board members, according to its 2016 financial statements.

The biggest NFP player in the sector, Juniper, does not remunerate its board members.

Chief executive Vaughan Harding said board roles were becoming more onerous and Juniper’s board had discussed whether the payment of fees would widen the talent pool.

“The greatest pushback has been from professional people who have been successful and are looking to give back to their community,” Mr Harding told Business News.

“Being paid would be at odds with their rationale for being on the board.”

Company director Steven Cole, who recently stepped down as chair of Brightwater Care Group, said the issue had been reviewed on several occasions.

“The culture of the place is that it’s a charitable contribution,” he said.

Mr Cole said there was a trend for larger organisations to pay modest fees, but his understanding was that most NFPs across the country did not remunerate their board members.

Bethanie, which is led by chief executive Christopher How, defended the amounts paid to its board members, and the $2.2 million paid to its senior executive group.

“Bethanie has strategically created a skills-based board and has worked on forming an executive team that is commercially astute with the capability to address the complex issues emerging in an environment characterised by significant change,” it said in a statement.

While Bethanie has topped the board payment ranking, Brightwater is ahead of it in terms of executive pay.

The key management personnel at Brightwater were paid $2.76 million in aggregate last year.

Comparisons between the two groups are complicated by several resignations and retirements.

Bethanie’s financial statements show the group reported a $12.2 million profit for the year to June 2016 on revenue of $112 million.

Its accounts were qualified by auditor PwC, mainly because of the treatment of non-refundable entry contributions paid by residents in its units.

The financial statements disclose that PwC’s preferred treatment would have reduced revenue by $9.3 million and increased net equity by $5.7 million.

“The audit qualification arises out of the board and executive’s belief that the financial statements should reflect the legal relationship established in the relevant occupancy agreements and the cash flows that follow,” the group said in a statement.

“The auditor’s interpretation of relevant accounting standards lead to a different reporting treatment.”