Massachusetts Bill to Cap Salaries at Charities

Massachusetts will consider a bill, Senate, No. 2559, to cap salaries of nonprofit executives.  The bill will impose a cap of $500,000 on compensation paid to any director, trustee, officer or senior manager of any charity with annual gross revenues of $1 million. The bill defines compensation to include salary, bonuses, deferred compensation, below-market rate loans, vehicle rental, and other sorts of compensation.

The Boston Herald reports that a reason behind this bill is a concern over executive compensation at Bay State hospitals.  Fourteen executives at Bay State hospitals now earn more than $1 million each, and that number has increased significantly in the past few years (the number was one in 2004).  The increase in the amount of compensation has also been significant, with CEOS at Boston hospitals receiving increases of between 13 and 46 percent between 2004 and 2006.

A hearing on Senate, No. 2559 is scheduled for tomorrow.

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