Nonprofits' Executive Pay Should Be More Accessible

John Commins, June 27, 2011

Most nonprofit hospitals don't readily reveal the salaries and compensation packages of their top executives to public scrutiny. That information is not on their Websites, and it's usually not in those glossy – and often irrelevant – community benefit reports that are long on portrait photographs, architectural designs, and colored pie charts, but short on detail.

They're not hiding the compensation, of course. They can't. That information is on the Form 990 filings that nonprofits submit to the Internal Revenue Service, which are easily accessible on GuideStar. But there is always a significant lag time in those filings, and much of the public may not be aware of how to access that data anyway.
Last week, for example, Rhode Island nonprofit Care New England declined news media requests to detail the compensation package for its new CEO Dennis Keefe. CNE spokeswoman May Kernan told a Providence, RI television station and later HealthLeaders Media that it was the three-hospital health system's "policy" to provide executive compensation information through the 990 reports.

I respectfully suggest that the policy be changed.

These are rough times for a lot of people. Unemployment hovers at nearly 10% for many sectors of the economy outside of healthcare and even in hospitals, there appear to be almost daily notices of layoffs. For workers everywhere, salaries are stagnant and healthcare inflation eats away at any marginal salary gains. It is not unreasonable to expect that nonprofit hospitals that receive significant tax breaks would be willing to share the compensation information on their top executives on a real-time basis.

Here's a more practical reason: The issue of executive compensation is not going away, and it's always better to ride the wave than risk the undertow. Executive compensation and the widening prosperity gap between the few at the top and everybody else are hot topics. So hot that the Los Angeles Times won a Pulitzer Prize in April for its coverage of outrageous salaries paid to city officials in Bell, CA.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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