QUESTION

Is pastor's compensation a privacy to the Church members?

Asked on Apr 07th, 2014 on Corporate Law - California
More details to this question:
We are a Christian Church established 3 years ago. We are still in the stage of finalizing some "regulations" of the Church. Some of the board members insists on a "compensation committee" which decided the compensations of pastors et al, and keeps details out of the board. Two questions. 1. is this legal? 2. Does member of the Church have the right to know the details of pastors compensation?
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1 ANSWER

Real Estate Attorney serving Oakland, CA at Sack Rosendin LLP
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If your church is set up as a corporation or limited liability company, then nothing can be hidden from the Board Members. Sounds like a good reason to have a small board with lots of committees, and have the committees include lots of non-board volunteers to get the work done. Put one board member on each committee to communicate back and forth between the board and those committees, excepting the Executive Committee and the Compensation Committee, which might be board members only. If you are not a corporation, then you can do whatever you want. Yes, it is appropriate to keep the pastors' compensation secret and private. On the other hand, the members probably should know which pastors are compensated and which are pure volunteers, even if they aren't told how much. If non-pastor board members are receiving compensation, the general membership probably would like to know that, even if they aren't told how much. I urge your church to establish itself as either a corporation or a limited liability company in order to protect the members of the church against third party claims. Without such a legal entity, a plaintiff's attorney might try to treat all of you as agents or partners for each other and make all of you liable for the mistakes of any member. For example, if someone signed a contract for a lot of money over a long period of time, like health insurance or fire insurance, the other side could come after all of you or any of you and all your assets in order to get paid. Same result if a member using a car, truck or bus to do church business cause substantial damage to property or personal injuires or death. Your personal homes and savings could be seized and sold to satisfy the judgment. We charge $1000.00 plus about $200.00 in expenses paid to others to form a corporation, and $1200.00 plus expenses to set up a limited liability company. Dana Sack 510-286-2200   Dana Sack 510-286-2200
Answered on Apr 07th, 2014 at 2:34 PM

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