Nonprofit salaries for healthcare executives on the rise

Dive Brief:

  • Salaries for employees of nonprofit organizations, which includes some hospitals and health systems, were up about a third in 2014 from 2011 levels, The Wall Street Journal reported.
  • Nonprofit organizations have adopted salary strategies implemented in the corporate world and often offer packages totaling more than $1 million with eligibility for bonuses and deferred payments.
  • About 75% of nonprofit compensation packages delivering $1 million or more annually in 2014 went to people in healthcare positions.

Dive Insight:

The largest nonprofit compensation package discovered by The Wall Street Journal analysis went to Anthony Tersigni, president and CEO of Ascension, a hospital operator based in Missouri. He received a total of $17.6 million.

Compensation provided by hospitals correlated more with the size of an organization, location, and academic status, according to a 2013 study published in JAMA on salaries for 1,877 CEOs at 2,681 hospitals. The average CEO earned about $600,000 per year, but the average salaries for CEOs of small rural hospitals were just $118,000 while CEOs at top teaching hospitals earned an average of about $1.7 million.

The Wall Street Journal analysis reflect results from the JAMA study. While CEOs of urban teaching hospitals tend to earn more, compensation can vary widely. For instance, the chief executive of Mercy Health System, which had around $1 billion in operating revenue in 2014, earned about $8 million, Meanwhile, Catholic Health Systems collected about 15 times as much in 2015 and paid its CEO half as much.

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