New Evidence on the Compensation of Chief Executive Officers at Nonprofit U.S. Hospitals

Abstract

Chief executive officer (CEO) compensation is highly scrutinized, with nonprofit organizations often receiving additional attention due to their tax-exempt status. Understanding hospital CEO compensation is of increasing importance as health care costs remain high and strong leadership is required to implement new health policies. This study documents CEO compensation at nonprofit hospitals in the United States for 2010 and 2015. We compare hospital CEO compensation with CEO compensation in other institution types, including nonhospital health care. We also explore changes in hospital CEO compensation over time and differences across states. We find CEOs at hospitals earn substantially less than CEOs of publicly traded companies though more than presidents of nonprofit institutions of higher education. Additionally, we find that the relationship between CEO compensation and hospital size was weaker in 2015 than in 2010, and substantial variation in CEO compensation exists across states.