UPDATED: Coakley Urges Pay Reassessment For Non-Profit CEOs
A new report on the compensation of chief executives at large public charities in Massachusetts describes payment arrangements as “complex,” with compensation of CEOs at 25 of the state’s biggest non-profits ranging from $487,000 to $8.8 million over a three-year period: 2009 to 2011.
Two of the organizations that participated were UMass Memorial Health Care (UMMHC) and Fallon Community Health Plan, both based in Worcester.
The report, which covered 92 pages, revealed that John O’Brien, the former CEO of UMMHC, now a professor at Clark University, earned $2.35 million in total compensation in 2011, with base compensation of $924,603. Meanwhile, Fallon CEO W. Patrick Hughes earned $1.03 million in total compensation, which included a base of $531,465, the report said.
Officials at UMMHC did not comment after an email request Friday morning. A similar request on Friday to a spokesperson at Fallon was not answered.
The report by Attorney General Martha Coakley, a candidate for governor, looked at pay at health insurance plans, hospitals and universities, including many of the state’s largest employers. “These organizations must compete with national for-profit companies for CEO talent while also staying true to their charitable mission,” Coakley said in a statement. “In order to continue to make sure this balance is met, we believe there must be greater transparency in fully reporting the amount of compensation and the way that it is set.”
Coakley reported that her office had reviewed extensive data concerning benefits and compensation-setting processes and found that compensation often includes special retirement benefits, isolated payments and vesting events. The report calls for adding data points to the analysis used to determine reasonable compensation, saying the change might moderate increases in compensation. The report also suggests considering executive compensation when setting of the level of tax exemptions that non-profits enjoy under state law.
(Rick Saia of the WBJ staff contributed reporting.)
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