Nonprofit Hospital Systems: Survey on Executive Compensation Policies and Practices

As a part of Congress's continuing efforts to oversee the activities of the nonprofit sector, it asked us to review executive compensation issues at selected private, nonprofit hospital systems to gain an understanding of the policies and practices related to the salaries, benefits, travel, gifts, and entertainment expenses paid by these hospital systems. Our study's key questions were as follows: (1) What corporate governance structure do selected hospital systems report as having in place over executive compensation? (2) What is the basis for the compensation and benefits earned by, awarded to, or paid to the executives as reported by selected hospital systems? (3) What internal controls do selected hospital systems report as having in place over the approval, payment, and monitoring of executive travel and entertainment expenses, gifts, and other perquisites? On June 5, 2006, we briefed Congressional staff on the results of our work. This report transmits the briefing provided to Congressional staff, as amended to reflect some additional observations.