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Ethical Dilemmas Facing Non-Profit Hospital Ceo Compensation

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Ethical Dilemmas Facing Non-Profit Hospital Ceo Compensation
Ethical Dilemmas Facing Non-Profit Hospital CEO Compensation

Ethical Dilemmas Facing Non-Profit
Hospital CEO Compensation
Executive Summary

This essay deals with the unethical prevalence of excessive compensation packages granted to nonprofit hospital executives. Nonprofits are highly complex organizations and are vital to the community’s in which they serves. Therefore, it is essential for these organizations to appoint highly motivated individuals knowledgeable of the healthcare industry and capable of managing and leading a hospital during a national recession while health reform is changing the culture of the US healthcare system. However, many nonprofit organization’s tax-exempt statuses should be rescinded for allocating leftover resources to hospital executives in the form of exorbitant salaries, benefits, and other incentives. It is these hefty salaries and benefits that are restricting hospitals from carrying out their priority mission as public charities. These CEO’s exorbitant compensation packages are further straining the hospital’s ability to provide a social benefit, suggestion that these tax-exempt organizations are acting unethically, in that financial gain is taking precedents over social responsibilities.

Ethical Dilemmas Facing Non-Profit
Hospital CEO Compensation Communities across the nation have seen the coarse effects of the delicate financial status of our country and the effects it has on healthcare organization within their community. In a time difficult for nonprofit healthcare organizations to operate at a profit, many organizations are left with no choice but to cut essential departments, programs, and employees, leaving many patients that have relied on these organizations, out in the cold. Recently, because of these financial issues, the ethical principles of nonprofits regarding CEO compensation have been under heavy scrutiny by both the public, and the Internal Revenue Service for excessive salaries and


Cited: Mahar, M. (2011, March 24). Health Beat: High CEO Salaries at Nonprofit Hospitals Under Scrutiny…Once Again. Health Beat. Retrieved November 5, 2011, from http://www.healthbeatblog.com/2011/03/high-ceo-salaries-at- Swiatek, J Gose, B. (2010). Nonprofit CEO Pay Under Scrutiny. Chronicle Of Philanthropy, 22(16), 8. Bogue, R. (1999). An incentive for community health. Linking CEO compensation to community goals. Trustee: The Journal For Hospital Governing Boards, 52(5), 15-19.
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