Nonprofit organizations are required to disclose compensation paid to its officers, directors, trustees, key employees, highest compensated employees and independent contractors. Often times, the definitions related to this reporting are unclear or are misinterpreted for the purposes of Form 990, Part VII reporting disclosures. So, who are the lucky individuals who get to have their names and compensation amounts disclosed in a document that is open for the whole wide world to view?

Officers
An "officer" is an individual elected or appointed to manage the organization's daily operations, such as a president, vice-president, secretary, or treasurer. For purposes of Form 990 reporting, the organization's top management official and top financial officer are always treated as officers. An officer that served at any time during the organization's tax year is deemed to be a current officer. Because no reportable compensation threshold amount exists for current officers, the compensation of all current officers must be reported. Note that in the case of a compensation earned as a former officer, compensation must be reported if it is greater than $100,000.

Director/Trustee
A "director or trustee" is an individual who is a member of the organization's governing body, but only if he/she has voting rights. A member of an advisory board that does not have any governance authority over the organization is not considered a director or trustee. A director or trustee that served at any time during the organization's tax year is deemed a current director or trustee. Because no reportable compensation threshold amount exists for current directors or trustees, the compensation of all current directors and trustees must be reported. Note that in the case of a compensation earned as a former director or trustee, compensation must be reported if it is greater than $10,000.

Key Employee
A key employee is any of the top 20 highest compensated employees (other than an officer, director, or trustee) of the organization and related organizations who meets both of the following tests:

$150,000 Test:
Individual receives more than $150,000 in reportable compensation from the organization and all related organizations for the calendar year ending with or within the organization's tax year. Special rules apply in determining reportable compensation, especially in the case of compensation paid by related organizations.

Responsibility Test (for any portion of the year):

• Individual has responsibility and power to influence the organization as a whole, OR
• Manages a discrete segment or activity of the organization representing 10 percent or more of its assets, income or expenses, OR
• Has or shares authority for controlling or determining 10 percent or more of the organization's capital expenditures, operating budget, or employee compensation.

Note that in the case of a compensation earned as a former key employee, compensation must be reported if it is greater than $100,000.

Five highest compensated employees
The five highest compensated employees of the reporting organization (or related organization) who are not otherwise officers, directors, trustees, or key employees must be listed to the extent they received more than $100,000 in reportable compensation during calendar year ending with or within the organization's tax year. Note that in the case of a compensation earned as a former highly compensated employee, compensation must be reported if it is greater than $100,000.

Independent Contractors
The five highest independent contractors (includes entities as well as individuals) must also be listed to the extent they received more than $100,000 in compensation for services. Management companies must be included here if the threshold is met.