Hospital CEO pay: High or justified?

A California-wide survey of 118 nonprofit hospitals showed that base salary for CEOs averaged $514,000, according to Payers & Providers, a healthcare business publication. Add bonuses, retirement money, reimbursement for education costs, and expense accounts, and the average total compensation those CEOs raked in was $732,000.

With federal regulations limiting compensation for CEOs of companies bailed out by the government to $500,000, CEO compensation has come under increased scrutiny. Some say similar caps placed on the compensation of nonprofit hospital CEOs could go to caring for uninsured patients. "You're looking at close to $390 million that could be used on uncompensated patient care," Ron Shinkman, who authored the survey on CEO salaries, told the Ventura County (Calif.) Star. "It's a lot of money."

Public records revealed more big numbers at Ventura County's nonprofit, tax-exempt hospital groups, according to the Star. Gary Wilde, who runs Community Memorial Health System hospitals in Ventura and Ojai, was the top paid CEO in 2008 in the county with a base salary of $509,000 and total compensation running $853,500.

The highest compensated CEO in the study was Ken Anderson of the John Muir Health System, which operates hospitals in Walnut Creek and Concord. His base salary was $745,000 and he can expect nearly $7 million in other compensation, which will be deferred for retirement.

Hospital leaders told the Star that the numbers were inflated by retirement plan accumulations that must be included on tax records long before executives may receive the money. They defended the salaries as the only way to compete with for-profit hospitals to recruit and retain the right talent.

Base salaries at for-profit hospitals often are lower than at nonprofits, the Star found, because their paydays rely more heavily on stock options and bonuses tied to the bottom line.

To learn more:
- read the Ventura County Star article
- read an article from the Boston Globe

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