Last week, California Assembly member Luis Alejo (D-Salinas) introduced Assembly Bill 130, which would prohibit a California hospital district from dishing out pension benefits to the CEO prior to his or her retirement, but AB 130 is not the only measure he has taken to reform executive compensation in his state.
Gov. Jerry Brown signed AB 2180 and became law Jan. 1, 2013. The legislation requires local hospital and healthcare districts to include specific information regarding compensation, retirement benefits, severance and any other benefit that differs from those available to other full-time employees, and all information must be included in employment agreements.
According to a release from Mr. Alejo's office, AB 2180 was created to increase transparency in the compensation package process for hospital district CEOs and administrators.
AB 130 is still going through California's Assembly, and it aims to go one step further to place restrictions on hospital district CEO pension payouts.
"This year, AB 130 addresses pension double-dipping problems and overly generous retirement benefit promises," says Erika Bustamante, an aid to Mr. Alejo. "Furthermore, this legislation will improve the transparency and accountability for the policies that public entities have to manage the retirement benefits of their top executives."
Mr. Alejo has introduced several healthcare CEO compensation bills after his district's health system, Salinas Valley Memorial Healthcare System, awarded former CEO Sam Downing a $4.9 million retirement package in 2011. In addition, Mr. Downing received a severance package 18 times his average monthly salary and retained his $115,000-per-year pension — a situation cited as abusive by many within the district.
Mr. Alejo is not the only person attempting to reform hospital CEO pay — voters in Santa Clara County, Calif., are also chiming in. In November, 52 percent of people within Mountain View, Calif.-based El Camino Hospital's county voted to approve Measure M, which would cap the compensation of El Camino executives to no more than twice the salary of California's governor. Based on most recent figures, this would mean El Camino executives could earn no more than roughly $330,000.
El Camino officials have since filed a lawsuit to negate the voter-backed initiative.
Gov. Jerry Brown signed AB 2180 and became law Jan. 1, 2013. The legislation requires local hospital and healthcare districts to include specific information regarding compensation, retirement benefits, severance and any other benefit that differs from those available to other full-time employees, and all information must be included in employment agreements.
According to a release from Mr. Alejo's office, AB 2180 was created to increase transparency in the compensation package process for hospital district CEOs and administrators.
AB 130 is still going through California's Assembly, and it aims to go one step further to place restrictions on hospital district CEO pension payouts.
"This year, AB 130 addresses pension double-dipping problems and overly generous retirement benefit promises," says Erika Bustamante, an aid to Mr. Alejo. "Furthermore, this legislation will improve the transparency and accountability for the policies that public entities have to manage the retirement benefits of their top executives."
Mr. Alejo has introduced several healthcare CEO compensation bills after his district's health system, Salinas Valley Memorial Healthcare System, awarded former CEO Sam Downing a $4.9 million retirement package in 2011. In addition, Mr. Downing received a severance package 18 times his average monthly salary and retained his $115,000-per-year pension — a situation cited as abusive by many within the district.
Mr. Alejo is not the only person attempting to reform hospital CEO pay — voters in Santa Clara County, Calif., are also chiming in. In November, 52 percent of people within Mountain View, Calif.-based El Camino Hospital's county voted to approve Measure M, which would cap the compensation of El Camino executives to no more than twice the salary of California's governor. Based on most recent figures, this would mean El Camino executives could earn no more than roughly $330,000.
El Camino officials have since filed a lawsuit to negate the voter-backed initiative.
More Articles on California Hospital Executive Compensation:
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Voters OK Measure to Cap Executive Pay in El Camino Hospital District