Executive Compensation Resources for Non-profit Hospitals
Executive compensation practices at non-profit organizations recently have come under increased scrutiny from legislators, regulators, the media and even the general public. This scrutiny has taken the form of congressional hearings, investigative reports and increased Internal Revenue Service (IRS) monitoring. It sometimes has resulted in legal action and has spawned new IRS reporting requirements for executive compensation beginning in tax year 2008.
As a hospital leader, it is imperative that you be prepared to answer questions from your Board, your employees, the media and, most importantly, the community whose health care you hold in trust about your organization’s executive compensation practices and the steps it has taken to ensure they are fair and reasonable.
That is why the American Hospital Association and American College of Healthcare Executives, with the assistance of Hogan & Hartson, L.L.P., have created four new resources to help ensure our members are informed on the latest developments in executive compensation practices. It is our hope that you will find these resources helpful as you examine your organization’s executive compensation practices.
Executive Compensation: A Primer for Establishing Reasonable Compensation – describes in some detail the pressures recently brought to bear on executive compensation practices, including congressional hearings and reports and new IRS reporting requirements. It provides a comprehensive overview of the fiduciary duties of the Board and officers of tax-exempt hospitals and the IRS’ procedures for establishing that executive compensation practices result in fair and reasonable compensation.
Compensation Compliance Checklist: What Steps Should a CEO Take to Assure Compliance with Legal Standards and Reporting Obligations? – lays out the steps that every CEO should take to assure compliance with IRS standards and reporting obligations around executive compensation.
Sample Compensation Committee Charter – provides a sample charter your Board can use to establish a committee to discharge the Board's responsibilities relating to compensation of the executive officers.
Excess Benefit and Reasonable Compensation: An Analysis of the Intermediate Sanctions Rules – provides a detailed legal analysis of the IRS’ intermediate sanctions rules that are the most definitive IRS guidance on executive compensation. This document will be particularly useful for your legal and compliance staffs.