Hospital executives ranked as the five highest-salaried chief executive officers at large not-for-profit organizations in 2003, according to a ranking by the Chronicle of Philanthropy.
Harold Varmus, president and CEO of Memorial Sloan-Kettering Cancer Center, New York, led the list, earning almost $1.69 million in salary. He was one of 309 chief executives in the Chronicle's 12th annual survey, which reviews compensation at not-for-profits it has identified as leaders in raising private donations.
The ranking of salaries, published Sept. 30, was based on information from Internal Revenue Service Forms 990 and supported by surveys of the executives. In general, it does not include benefits and other compensation.
No. 2 was Cleveland Clinic Foundation CEO Floyd Loop at $1.68 million; followed by New York-Presbyterian Hospital CEO Herbert Pardes at $1.26 million; Baylor College of Medicine President Peter Traber at $1.23 million; and Children's Hospital of Boston CEO James Mandell at $823,700.
The median CEO salary at 215 not-for-profits-including healthcare and other industries-which had the same top executive in 2002 and 2003, was $291,356, according to the Chronicle .
Healthcare dominated last year's survey as well. The five highest-paid CEOs in 2002 were from hospitals or health systems, and Varmus and Loop were among them.
Traber's pay includes a one-time, $1 million signing bonus and four-months' annual salary, said Lori Williams, a spokeswoman for Baylor. In addition, Traber's salary, about $800,000, is consistent with similar positions within the Texas Medical Center, a Houston-based affiliation of 42 not-for-profit hospitals and healthcare organizations.
U.S. not-for-profits are facing growing public scrutiny as regulators have begun to question executive compensation at tax-exempt organizations, and how organizations report that compensation. Earlier this year, the Internal Revenue Service began an enforcement initiative directed at collecting and auditing not-for-profit compensation information (May 31, p. 6).
Hospital officials said executives' salaries reflected the complexity of operating large medical centers and the leadership, background and education of their presidents or CEOs.
"The job of running a major healthcare system in a metropolitan area such as New York is one that requires exceptional leadership, skill and talent," as well as a commitment to providing quality care for patients, said Myrna Manners, a spokeswoman for New York-Presbyterian. Manners said the hospital's board of directors reviews and authorizes the chief executive's salary and an outside firm benchmarks the president's salary against peer institutions.
Varmus, a physician, is a Nobel Prize winner and former head of the National Institutes of Health, said Anne Thomas, a Memorial Sloan-Kettering spokeswoman.
Michelle Davis, spokeswoman for Children's Hospital, said Mandell has led a successful effort to turn around the hospital's finances and oversees a hospital-based pediatric research program with $120 million in revenue. The Cleveland Clinic's Loop is a practicing cardiac surgeon. Angela Calman, a spokeswoman for the Ohio system, said in a prepared statement that many of its executives hold dual roles of practicing physician and administrator.