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

2019 ◽  
Vol 77 (5) ◽  
pp. 498-506
Author(s):  
Karen Mulligan ◽  
Seema Choksy ◽  
Catherine Ishitani ◽  
John A. Romley
Keyword(s):  
Health Care ◽  
Nonprofit Organizations ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Chief Executive ◽  
The United States ◽  
Nonprofit Hospitals ◽  
Hospital Size ◽  
Publicly Traded Companies ◽  
Executive Officers

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.

scholarly journals Physician versus non-physician CEOs: The effect of a leader’s professional background on the quality of hospital management and health care

2019 ◽  
Vol 8 (5) ◽  
pp. 47
Author(s):  
Amol Gupta
Keyword(s):  
Health Care ◽  
Chief Executive Officers ◽  
Hospital Management ◽  
Chief Executive ◽  
The United States ◽  
Physician Leadership ◽  
Medical Background ◽  
Original Intention ◽  
Executive Officers

Since 1935, the number of hospitals managed by chief executive officers (CEOs) who are also physicians has decreased by 90%. Today, only 5% of hospitals in the United States are run by CEOs with a medical degree. However, higher ranked hospitals are more commonly run by CEOs with physician backgrounds. Additionally, overall quality scores in physician-run hospitals were 25% higher than those run by non-physicians. It is not clear whether this association between physician management and a higher quality of hospital management and health care results from the CEO’s professional (medical) background. Considering this, the following editorial discusses what characteristics of physicians and non-physicians may influence their capacity to lead a hospital and how that may impact the quality of management and health care within a hospital. Ultimately, this article aims to further the debate over physician versus. non-physician leadership, building a foundation for further research that may determine the characteristics of a CEO that are essential to guiding positive change in their hospital, refocusing health care back to its original intention: patient care.

A Trend Analysis of Succession Planning in Health Care as Perceived by Chief Executive Officers in US Hospitals

2016 ◽  
Vol 35 (4) ◽  
pp. 333-339 ◽  
Author(s):  
Sandra K. Collins ◽  
Richard McKinnies ◽  
Cristian Lieneck ◽  
Sandra Watts
Keyword(s):  
Health Care ◽  
Trend Analysis ◽  
Succession Planning ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
Executive Officers

scholarly journals CEO Monitoring and Board Effectiveness: Resolving the CEO Compensation Issue

2018 ◽  
Vol 21 (2) ◽  
pp. 123-134
Author(s):  
Chiraz Ben Ali ◽  
Frédéric Teulon
Keyword(s):  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Board Governance ◽  
Board Effectiveness ◽  
Past Performance ◽  
Compensation Committee ◽  
Ceo Pay ◽  
Executive Officers ◽  
The Impact

This study examines the impact of board governance mechanisms on the pay of Chief Executive Officers (CEOs) using a sample of major French listed companies for the 2009–2011 period. The results show that CEO pay is negatively associated with the presence of a family CEO and positively associated with board size, busy directors, board meetings, and compensation committee independence. We provide further evidence that CEO compensation increases with firm size, and both present and past performance. Our study casts doubt on the effectiveness of formal board attributes in constraining CEO compensation.

scholarly journals CEO Compensation and Firm Performance: The Role of ESG Transparency

2020 ◽  
Vol 4 (2) ◽  
pp. 278
Author(s):  
Chetna Rath ◽  
Florentina Kurniasari ◽  
Malabika Deo
Keyword(s):  
Firm Performance ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Negative Relationship ◽  
Chief Executive ◽  
Long Run ◽  
Ceo Pay ◽  
Executive Officers ◽  
The Impact

Chief executive officers (CEOs) of environmental, social, and governance (ESG) firms are known to take lesser pay and engage themselves in corporate social responsibility activities to achieve the dual objective of the enhancement of firm’s performance as well as benefit for stakeholders in the long run. This study examines the role of ESG transparency in strengthening the impact of firm performance on total CEO pay in ESG firms. A panel of 67 firms for the period of 2014–2019 has been analyzed using the two-step system GMM model, with NSE Nifty 100 ESG Index as the data sample and ESG scores from Bloomberg database as a proxy for transparency. Findings reveal that environmental and governance disclosure scores have the potential to intensify the negative relationship between firm performance and CEO compensation, while social disclosure scores do not. In addition, various firm-specific, board-specific, and CEO-specific attributes have also been considered controls affecting remuneration. This paper contributes to the literature by exploring the effect of exhibiting ESG transparency and its nexus with CEO pay as well as firm performance.

The Birth of the Business Roundtable

2013 ◽  
Author(s):  
Benjamin C. Waterhouse
Keyword(s):  
Financial Services ◽  
Chief Executive Officers ◽  
Chief Executive ◽  
The United States ◽  
Business Leaders ◽  
Business Lobbying ◽  
History Of ◽  
Business Roundtable ◽  
Dramatic Shift ◽  
Executive Officers

This chapter demonstrates how the Business Roundtable—a consortium of chief executive officers from approximately one hundred and fifty of America's largest publicly and privately held corporations—holds a unique place in the history of business lobbying. It emerged in direct response to business's crisis of confidence and quickly became a powerful symbol of business leaders' desire to shape politics as well as an expression of their collective power. The first decade of the Roundtable's activism coincided with the dramatic shift of production away from the United States, the permanent decline of both productivity growth and unionization, and the supplanting of manufacturing by financial services as the nation's most important industry. The specific policy threats that drove the leaders of American big business to create the Business Roundtable reflected these shifting dynamics.

scholarly journals Why East Asians but not South Asians are underrepresented in leadership positions in the United States

2020 ◽  
Vol 117 (9) ◽  
pp. 4590-4600 ◽  
Author(s):  
Jackson G. Lu ◽  
Richard E. Nisbett ◽  
Michael W. Morris
Keyword(s):  
United States ◽  
Chief Executive Officers ◽  
South Asians ◽  
Chief Executive ◽  
The United States ◽  
Leadership Positions ◽  
East Asians ◽  
Cultural Fit ◽  
Bamboo Ceiling ◽  
Executive Officers

Well-educated and prosperous, Asians are called the “model minority” in the United States. However, they appear disproportionately underrepresented in leadership positions, a problem known as the “bamboo ceiling.” It remains unclear why this problem exists and whether it applies to all Asians or only particular Asian subgroups. To investigate the mechanisms and scope of the problem, we compared the leadership attainment of the two largest Asian subgroups in the United States: East Asians (e.g., Chinese) and South Asians (e.g., Indians). Across nine studies (n= 11,030) using mixed methods (archival analyses of chief executive officers, field surveys in large US companies, student leader nominations and elections, and experiments), East Asians were less likely than South Asians and whites to attain leadership positions, whereas South Asians were more likely than whites to do so. To understand why the bamboo ceiling exists for East Asians but not South Asians, we examined three categories of mechanisms—prejudice (intergroup), motivation (intrapersonal), and assertiveness (interpersonal)—while controlling for demographics (e.g., birth country, English fluency, education, socioeconomic status). Analyses revealed that East Asians faced less prejudice than South Asians and were equally motivated by work and leadership as South Asians. However, East Asians were lower in assertiveness, which consistently mediated the leadership attainment gap between East Asians and South Asians. These results suggest that East Asians hit the bamboo ceiling because their low assertiveness is incongruent with American norms concerning how leaders should communicate. The bamboo ceiling is not an Asian issue, but an issue of cultural fit.

scholarly journals The relationship between chief executive officer compensation and the size and industry of South African state-owned enterprises

2019 ◽  
Vol 17 ◽  
Author(s):  
Mariette Coetzee ◽  
Magda L. Bezuidenhout
Keyword(s):  
Chief Executive Officers ◽  
Ceo Compensation ◽  
African State ◽  
Chief Executive ◽  
Annual Reports ◽  
Performance Contracts ◽  
Ceo Pay ◽  
Managerial Implications ◽  
Executive Officers ◽  
The Relationship

Orientation: Concerns about exorbitant executive compensation are making headlines, because executives receive lucrative packages despite state-owned enterprises (SOEs) performing poorly. It appears as if chief executive officers (CEOs) are not being held accountable for the performance of the SOEs.Research purpose: The purpose of the study was to determine whether the size and the industry of an SOE had an impact on CEO compensation packages.Motivation for the study: A greater understanding of the relationship between CEO remuneration and the size and type of industry of SOEs would assist with the standardisation of CEO remuneration and linking CEO pay to SOE performance.Research approach/design and method: A multiple regression analysis on a pooled dataset of 162 panel observations was conducted over a 9-year period. Financial data of 18 SOEs were extracted from the McGregor BFA database and the annual reports of SOEs.Main findings: The findings show that the size of an SOE does not influence the total compensation of CEOs. However, larger SOEs pay larger bonuses due to these SOEs being in a stronger financial position to offer lucrative bonuses. CEO’s remuneration was aligned within certain industries.Practical/managerial implications: The findings emphasise the need to link CEO compensation with SOE performance. Standardisation in setting CEO compensation and implementing performance contracts should be considered.Contribution/value-add: The study confirms that CEO pay is not linked to performance and not justified when considering SOE size or industry.

The effects of global financial crisis on the relationship between CEO compensation and earnings management

2020 ◽  
Vol 28 (2) ◽  
pp. 389-408 ◽  
Author(s):  
Oheneba Assenso-Okofo ◽  
Muhammad Jahangir Ali ◽  
Kamran Ahmed
Keyword(s):  
Financial Crisis ◽  
Earnings Management ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Global Financial Crisis ◽  
Chief Executive ◽  
Content Type ◽  
Multivariate Tests ◽  
Executive Officers ◽  
The Relationship

Purpose This paper aims to examine the effects of global financial crisis (GFC) on chief executive officers’ (CEO) compensation and earnings management relationship. Specifically, the authors examine whether the recent financial crisis had moderated the relationship between CEO bonus and discretionary accruals. Design/methodology/approach The authors use panel data for 1,800 firm-year observations (over a period of six years from 2005 to 2010) and use univariate and multivariate tests to test their hypothesis. The authors divide the period into pre-crisis, during-crisis and post-crisis periods to examine how the different financial crisis periods affect the relationship between CEO compensation and earnings management. Various alternative tests including endogeneity test suggest that the results are robust. Findings The authors’ multivariate results indicate that the relationship between CEO’ compensation and earnings management changes because of the GFC. Practical implications The findings, therefore, justify more monitoring and scrutiny to limit the existence of opportunistic managerial behaviour and for the appropriate designing of CEO compensation packages during abnormal economic circumstances. Originality/value So far as the authors’ knowledge goes, this is the first study which examines the relationship between CEO compensation and earnings management during GFC.

Limiting Executive Compensation: The Case of CEOs Hired after the Imposition of 162(m)

2007 ◽  
Vol 22 (4) ◽  
pp. 599-621 ◽  
Author(s):  
Steven Balsam ◽  
David H. Ryan
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Chief Executive Officers ◽  
Ceo Compensation ◽  
Chief Executive ◽  
Executive Pay ◽  
Internal Revenue ◽  
Compensation Package ◽  
Bonus Pay ◽  
Executive Officers

This study analyzes the effect of Internal Revenue Code section 162(m) on the compensation package of those chief executive officers (CEOs) hired after the imposition of this code section. Research documents that CEO compensation has increased dramatically since the imposition of section 162(m); yet, this research has not distinguished between the effects on the compensation of CEOs already in place when section 162(m) was imposed from those CEOs hired post-162(m) imposition. We focus our analysis on the compensation of CEOs hired after the imposition of section 162(m), because when firms hire a new CEO, they have a better opportunity to redesign the executive pay package. Consequently, we posit that section 162(m) will have its greatest effect when the affected companies change CEOs. Our analysis provides evidence that the increase in salary normally associated with the hiring of a new CEO has been mitigated and there has been an increase in the sensitivity of firm performance to bonus pay for CEOs appointed after 1994 in affected firms.

A response to global nonprofits’ succession failure

2019 ◽  
Vol 27 (1) ◽  
pp. 7-10
Author(s):  
Joseph C. Santora
Keyword(s):  
Nonprofit Organizations ◽  
Chief Executive Officers ◽  
Boards Of Directors ◽  
Design Methodology ◽  
Chief Executive ◽  
Executive Succession ◽  
Content Type ◽  
Nonprofit Boards ◽  
Succession Plan ◽  
Executive Officers

Purpose This paper aims to raise the level of awareness of the critical need to have a chief executive succession plan in nonprofit organizations. Design/methodology/approach This paper uses a review of survey literature to determine the degree to which nonprofits plan for chief executive succession. Findings The findings reveal a serious lack of planning for successors in nonprofit organizations. Originality/value This paper underscores the need for a three-pronged approach by nonprofit boards of directors, chief executive officers, and HR departments to address planning for successors to prevent potential chaotic organizational situations and create sustainable nonprofits.

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