New Jersey's top non-profit CEOs are paid millions

Person offering money
Money in hand.

The highest-paid non-profit hospital chief executives in New Jersey earn well over $1 million a year, with most earning more than $2 million.

That's the results of an annual survey by NJ.com. Despite the ongoing legal battles over non-profit hospital compensation in the Garden State and whether facilities that highly compensate their executives should pay taxes, it doesn't appear to impact compensation trends.

Among the highest paid execs

  • Joseph Trunfio of the Atlantic Health System retired last year but earned $4.7 million in 2014 in salary and bonuses.
  • John K. Lloyd, CEO of Meridian Health came in second with compensation of $3.5 million.
  • Robert Garrett, CEO of Hackensack University Medical Center earned $3.3 million.

But compensation expert J.B. Silver told NJ.com that the Internal Revenue Service has the high salaries on its radar. 

"What holds it down is the IRS. In order to maintain not-for-profit status, you cannot pay excessive compensation," he told the publication. "They can literally lift the not-for-profit status. It has happened."

Atlantic Health System was the center of a property tax dispute involving one of its hospitals, Morristown Medical Center. A state judge threw out its exemption last year, citing Trufino's $12 million in compensation over a three-year period. Morristown had sued over the exemption, claiming it was being unjustly deprived of tax revenue while Atlantic paid its executives salaries that rivaled the for-profit sector. The system settled the lawsuit for $25 million, including $10 million in upfront tax payments.

The decision in the Morristown case has since led to other municipalities appealing or suing not-for-profit hospitals within their boundaries over their exemptions. Among them are the cities and townships of Belleville, Freehold, Long Branch, New Brunswick, Rahway, Raritan Township and Summit. Not-for-profit hospitals in Maine are also coming under similar pressure from state lawmakers.