Support the news

Coakley Calls For More Transparency Of CEO Pay At Charities

This article is more than 7 years old.

Attorney General Martha Coakley called Thursday for greater transparency in the reporting of compensation for top executives of Massachusetts charities after a report from her office found annual pay for the heads of 25 of the state's largest nonprofits ranged from $487,000 to $8.8 million during a three-year period from 2009 to 2011.

Coakley acknowledged some of the not-for-profit organizations are among the state's top employers and have to compete with national for-profit companies for CEO talent. But she said it's important to maintain a balance between luring top talent and staying true to a charitable mission.

Coakley said CEO pay is complex and can include types of compensation not available to others in the workforce.

That can include bonus and incentive compensation, retirement and deferred compensation and other nontaxable benefits. She also said CEO compensation can also vary greatly from year to year, making comparisons difficult.

The report makes a series of recommendations which it said could allow more charitable resources to be devoted to the organization's charitable mission and "decrease the disparity between CEO pay and that of the rest of the workforce."

They include requiring a charity's compensation committee to weigh the reasonableness of compensation for CEOs against the rest of the workforce and to look at the magnitude of a CEO's total compensation package in relation to that of the non-executive workforce.

The report also recommends each charity consider the level of public support it enjoys in the form of exemption from property tax and other forms of taxation when setting compensation.

"Broadening the analysis behind setting CEO compensation to include elements outside the narrow approach of peer comparison may increase public confidence in the fairness or reasonableness of CEO compensation," the report said.

The state's top 25 nonprofit organizations consist of hospitals, health care organizations and universities.

This article was originally published on December 19, 2013.

This program aired on December 19, 2013. The audio for this program is not available.

Support the news