Are CEOs rewarded for managerial ability? Evidence from nonprofit hospitals

Zhang, Huilan

doi:10.1108/jpbafm-09-2021-0141

Cited by 3 publications

(1 citation statement)

References 57 publications

(184 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Additionally, a 2010 study of nonprofit hospitals in Connecticut found that CEOs were driven to increase the number of privately insured patients as opposed to publicly insured ones [ 14 ]. These findings are consistent with the general economics literature, which suggests that CEO pay is closely linked to firm size and the size of the average firm in the economy [ 15 , 16 ].…”

Section: Introductionsupporting

confidence: 91%

The determinants of nonprofit hospital CEO compensation

Jenkins,

Short,

2024

PLoS ONE

View full text Add to dashboard Cite

Hospital CEO salaries have grown quickly over the past two decades. We investigate correlates of rising nonprofit hospital CEO pay between 2012 and 2019 by merging compensation data from Candid’s IRS 990 forms with hospital data from the National Academy for State Health Policy Hospital Cost Tool. Almost half of the measured increase in CEO compensation (44.5%) accrued to a “base case” CEO, who was leading a non-teaching hospital system or independent hospital with fewer than 100 beds that earned 0 profits and provided no charity care. Another 28.5% of the measured salary increase resulted from changes in the generosity with which observable metrics were rewarded, particularly the reward for heading a system with 500 or more beds. The remaining 27% resulted mostly from hospital systems or single hospitals that increased their profits or bed size over time. The increase in CEO compensation associated with leading larger healthcare systems and earning greater profits may explain the increase in healthcare system consolidation which has occurred over the last several years.

show abstract

Section: Introductionsupporting

confidence: 91%

The determinants of nonprofit hospital CEO compensation

Jenkins,

Short,

2024

PLoS ONE

View full text Add to dashboard Cite

show abstract

Benchmarking executive compensations: exploring fresh perspectives on chief executive officer (CEO) compensation drivers in major US corporations

Lee,

Pati

2024

BIJ

View full text Add to dashboard Cite

PurposeThis study aims to contribute to the ongoing assessment of executive compensation by investigating the nexus between managerial entrenchment factors, adopting a multifaceted perspective encompassing both economic and non-economic dimensions.Design/methodology/approachThis research employs pooled cross-sectional Ordinary Least Squares (OLS) regression and Least Squares with Dummy Variables (LSDV) models with fixed effects to examine the determinants of Chief Executive Officer (CEO) compensation.FindingsThis research identifies firm size, performance (via ROA and Tobin’s Q), and CEO characteristics (age, tenure, stock ownership, MBA degree) as significant determinants of executive compensation at the 0.05 level. In contrast, the prestige of educational institutions, doctoral degrees, and the MBA’s relevance to short-term performance, along with CEO tenure, do not significantly affect pay. Additionally, the study highlights the significance of industry type (manufacturing vs technology) in shaping compensation, emphasizing the role of firm metrics and CEO credentials in designing executive pay packages.Originality/valueThis research introduces an innovative approach to controlling unobserved heterogeneity and adjusting for the dynamic nature of CEO compensation attributes across diverse CEO characteristics. By integrating both pooled Ordinary Least Squares (OLS) and Least Squares Dummy Variable (LSDV) models, the study addresses the challenges posed by time-invariant variables and unobservable heterogeneity. Such issues have historically skewed the accuracy of traditional OLS models in identifying the comprehensive array of factors—both economic and non-economic—that influence CEO compensation. This novel methodological framework significantly advances the examination of unobservable variables that may vary not only across the firms selected for analysis but also over time periods, thereby offering a more detailed understanding of the determinants of CEO pay.

show abstract

More Money, More Problems? Implications of Excess Cash in Nonprofit Hospitals

Gupta

2024

Nonprofit and Voluntary Sector Quarterly

View full text Add to dashboard Cite

This study examines the implications of excess cash in nonprofit hospitals. Using a nationally representative sample of hospitals, I benchmark nonprofit cash holdings against for-profit cash holdings, and find that nonprofit hospitals hold significantly more cash. I consider three potential uses of excess cash in nonprofit hospitals: (a) investment in fixed assets, (b) increased charity care provision, and (c) higher executive compensation. I find that excess cash is associated with investments in fixed assets but not with increased charity care provision. Moreover, I find a positive relationship between excess cash and growth in CEO compensation. The results suggest that while nonprofit hospitals may accumulate cash to finance fixed assets, some of the accumulated cash may be diverted toward executive compensation. Overall, concerns regarding agency problems in nonprofit organizations may not be unfounded.

show abstract

Are CEOs rewarded for managerial ability? Evidence from nonprofit hospitals

Cited by 3 publications

References 57 publications

The determinants of nonprofit hospital CEO compensation

The determinants of nonprofit hospital CEO compensation

Benchmarking executive compensations: exploring fresh perspectives on chief executive officer (CEO) compensation drivers in major US corporations

More Money, More Problems? Implications of Excess Cash in Nonprofit Hospitals

Contact Info

Product

Resources

About