Massachusetts bill targets million-dollar salaries of hospital CEOs

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A Massachusetts state bill aiming to cap the salaries of top executives at nonprofit hospitals has taken center stage at the Mass. State House in an attempt to curtail long-standing healthcare cuts and premium increases seen across the state.

Fourteen top executives at nonprofit Bay State hospitals raked in million-dollar-plus pay packages, a sharp increase from just a few years ago, according to the Boston Herald.

The bill, An Act of Capping Non-Profit Executives Compensation, sponsored by state Sen. Mark C. Montigny, would limit compensation to $500,000 for executives working at nonprofit charities, whose annual revenues exceed $1 billion in Massachusetts.

Between 2004 and 2006, the Herald reported that compared to the last year for which data is available, CEOs at Boston hospitals received pay increases between 13 and 46 percent.

The Herald reported some of the million-dollar pay packages, including:

  • $1.3 million for Boston Medical Center CEO Elaine Ullian, whose total pay increased 46 percent between 2004 and 2006;
  • $1.96 million for Partners Healthcare CEO James Mongan, whose pay increased 10.5 percent, to $2.1 million in 2005 before declining slightly in 2006; and
  • $1.48 million for Peter Holden, then-president of Caritas Holy Family Hospital in Methuen.

By comparison, only one hospital CEO made more than $1 million in 2004, the Herald said.

The Herald also said that latest pay packages include six-figure performance bonuses, retirement contributions and expense accounts that seem more in line with compensation policies at for-profit corporations than charitable institutions that receive multimillion-dollar tax breaks.

“I have not seen the details of the proposal, so I can not comment specifically. But I will say that nonprofits are community resources that have obligations to the community, and the leaders of these organizations should be sensitive to the strains that soaring health care costs are putting on the community,” B. Dale Magee, president of the Massachusetts Medical Society, told the Herald. “I would like to think that those who lead these organizations are not simply there to command top dollar.”

“The market for senior health care executives is a national one, and we must provide competitive wages and benefits in order to attract the best individuals,” Petra Langer, a Partners spokeswoman, said in a statement.