Initiative Limiting Hospital Executive Pay

Signature Gathering Approved For Initiative Limiting Hospital Executives Pay

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LOS ANGELES (CNS) - Backers of an initiative to limit the compensation of executives of nonprofit hospitals received permission yesterday to begin gathering signatures from Secretary of State Debra Bowen.

What backers have dubbed Charitable Hospital Executive Compensation Act of 2014 would limit the annual compensation -- salary, perks, bonuses, stock options and more -- to the salary and expense allowance for the president of the United States, which is currently $450,000.

The initiative would also require annual public disclosure of the 10 highest-paid executives and five largest severance packages. Hospitals violating terms of the initiative would be subject to fines, revocation of tax-exempt status and appointment of a representative of the state attorney general.

The limits would also apply to nonprofit hospital groups, hospital-affiliated medical foundations and physician groups.

If the initiative were to become law, it would result in state administrative costs in the low millions of dollars annually to enforce the law, with the authority to recover costs through fees assessed on nonprofit hospitals, according to an analysis prepared by the Legislative Analyst and Department of Finance.

Valid signatures from 504,760 registered voters -- 5 percent of the total votes cast for governor in the 2010 general election -- must be submitted by June 2 to qualify the measure for the November ballot, Bowen said.

The initiative is backed by the SEIU-United Healthcare Workers West union, which is also behind an initiative to limit hospital pricing. The union claims both measures would reduce the cost of hospital care.

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