Pay for performance for hospital CEOs? BD
At most hospitals, a compensation committee decides how much to give the CEO after evaluating job performance and the going rate at comparable institutions. The board of directors holds the final say.
The head of Middlesex Hospital earned $1.9 million last year, making him the highest-paid hospital administrator in the state. In just three years, CEO Robert Kiely's compensation nearly tripled, part of a trend in soaring compensation packages for hospital leaders.
Last year, Kiely and seven other Connecticut hospital administrators - three of them top managers in the Yale-New Haven Hospital Health System - made more than $1 million.
Compensation at nonprofits is exploding because board members often come from the corporate world, where lavish CEO salaries are accepted, said Pablo Eisenberg, a senior fellow at Georgetown University's Public Policy Institute. Compensation consultants are also driving up pay by referencing corporate salaries in their surveys. As the salary gap widens between top managers and their staff, teamwork and collegiality suffers, he argues.
"Boards are not exercising their fiduciary duty," he said. "No one is questioning these excessive compensations."
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