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Executive Compensation In Non-Profit Organizations

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This week, the Dallas Business Journal (September 16-22, 2011) posted a list of the top 25 executive salaries in non-profit businesses in North Texas. The numbers are shocking!

The figures on total compensation come from the most recent fiscal year reported, and they include salary, bonus, benefits, and the ambiguous “other.” Of the top 25, there are thirteen health care organizations, primarily the hospitals and facility networks that fall under the auspices of non-profit status.

Texas Health Resources

The top compensation package belongs to the CEO of Texas Health Resources, a large and growing network of medical facilities, currently owning 24 hospitals in the area. The compensation for the CEO with Texas Health Resources is reported to be $5,716,724, which includes a salary alone of over $5 million, and over one-half million in the category of “other.”

The total revenue for THR in the same time period was $334,944,000. In other words the CEO’s compensation equals about 1.7% of the organization’s total revenue. If you went to a THR hospital last year, and you and your insurance company were billed $10,000 for a short stay, Mr. CEO himself was paid $170 of it. This is a new definition of “obscene.” It also represents one decent paying 8-hour day of wages ($21.25/hr). And, this is just one example of one short-stay billing for one patient.

Texas Health Resources can also tout, if they want to show off their numbers, having positions five and fourteen on the DBJ top 25 list. Together, just among the top 25 executive salaries, THR paid out in total compensation of almost $7.5 million. This is roughly equivalent to the salaries of 43 U.S. Senators or 300 regular jobs at $25,000 annual salary. Swallow hard, and look at this next example!

Baylor Health Care System

Baylor Health Care System is one of the area’s most highly regarded medical operations. It is heard often, “If you ever get really sick, go to Baylor.” The DBJ top 25 list includes six executives within the Baylor system. The total compensation of these six executives is reportedly $4.85 million, roughly equivalent to the salaries of 28 more U.S. Senators.

Other Medical Facilities and Systems

Other top 25 executive salaries within the general category of health care are employed by Children’s Medical Center, Cook Children’s, and Methodist Hospitals of Dallas. Through the organizations of these five entities, including the aforementioned two, one would suppose, is the majority of health care distributed to citizens of North Texas. It is safe to assume, based on the THR statistic cited above, that one dollar out of every one hundred dollars the citizens of North Texas pay in health care goes directly into the wallets of a relative handful of executives.

Dallas-Fort Worth Hospital Council

It should also be mentioned, since we’re focusing on health care, that number 21 on the top 25 list is the President and CEO of the Dallas-Fort Worth Hospital Council whose total compensation is listed as $451,156. Sitting on the ledger beside revenue of $2.99 million, this chief executive receives about 15% of the fees and services they receive from member organizations, such as hospitals and other medical facilities.

The Dallas-Fort Worth Hospital Council describes their mission as (from their website):

• Creating innovative solutions through collaboration and coordination of efforts;
• Serving as advocates for day-to-day issues that affect hospitals, while balancing the demands of the region with state and national issues;
• Providing the most accurate, timely and comprehensive information to our members and other constituents; and,
• Improving the workforce numbers in our region.

About ToddT

I enjoy baseball and writing about it. I pay to see independent league play, the Fort Worth Cats and the Grand Prairie AirHogs, and I follow the Texas Rangers rather passionately. A native of the Dallas area, I am nearing 60 years old, and I have been married to my college sweetheart for 36 years and counting.
  • jamminsue

    Well said

  • Glenn Contrarian

    The compensation they get is a lot higher now, but I first figured out what a scam that non-profit agencies were back in the early nineties, when Elizabeth Dole began drawing a 100K salary for heading up the Red Cross. That’s not a hit on the GOP or the Doles (whom I still like).

    In all honesty, I think that non-profits are a better business strategy anyway – fewer if any taxes, those working for it still draw a decent salary, and all profits beyond operating the charity itself are used to help the business grow.