Essay on Ethical Dilemmas Facing Non-Profit Hospital Ceo Compensation

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Ethical Dilemmas Facing Non-Profit Hospital CEO Compensation Ethical Dilemmas Facing Non-Profit Hospital CEO Compensation Executive Summary This essay deals with the unethical prevalence of excessive compensation packages granted to nonprofit hospital executives. Nonprofits are highly complex organizations and are vital to the community’s in which they serves. Therefore, it is essential for these organizations to appoint highly motivated individuals knowledgeable of the healthcare industry and capable of managing and leading a hospital during a national recession while health reform is changing the culture of the US healthcare system. However, many nonprofit organization’s tax-exempt statuses should be rescinded for…show more content…
2009). There is a large margin in executive compensation that is dependent on features such as geographical location and size. According to the “Charity Navigator,” in 2008, the median CEO salary in the Northeast was $351,000 for large hospitals, and $120,000 for small hospitals. In the Mountain West region of the US, the median salaries for a large hospital was $194,374, and only $80,790 for small hospitals (Charity Navigator 2010) Seven figure salaries are not a normal occurrence among hospital and health system executives. However, according to the Chronicle of Philanthropy, which does an annual national survey of nonprofit salaries, found that the five top-paid nonprofit chief executives in 2003 all worked for hospitals. On top of these exaggerated salaries are the attractive benefits such as bonuses, deferred income, retirement plans, country club memberships, and countless other perks that are attracting the wrong kind of leaders to these organizations. Hospitals must provide their social responsibility to the community before spending outrageous salaries for chief executives. It is an unethical practice to pay executive teams more than the total spending on the necessitous care of the community. For example, the survey identified 17 hospitals in California where the total compensation to CEO’s alone exceeded the total cost of charity care of their respective organizations. These excessive salaries could have easily

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