Tax Reform Bill May Decrease Executive Compensation Increases
JoTo PR client, Cowden Associates, was featured in a bylined article in Winston-Salem Journal Online article titled, National study finds hospital CEO compensation rates outpacing clinical employees.
Compensation for not-for-profit hospital executives and administrators climbed at a higher rate over a 10-year period than those for surgeons, physicians and nurses, according to a national study released in August. The federal tax reform bill that went into effect in January may play a slowing role in not-for-profit and nonprofit executive compensation increases, said Elliot Dinkin, president and chief executive of Cowden Associates, a Pittsburgh-based specialist in risk management and compensation plans.
The law imposes a 21 percent excise tax on nonprofit employers for salaries of more than $1 million. Although it was aimed mostly as reining in higher education salaries, such as coaches and university chancellors, it also is projected to have an impact on not-for-profit hospitals nationwide. “In an environment in which every dollar counts, nonprofit boards will need to justify that it is worthwhile to pay the additional excise tax rather than cut back on salary,” Dinkin said. Dinkin suggested that nonprofits may want to develop more attractive non-salary related opportunities having to do with time and lifestyle.
“There are effective ways to strike a balance between what’s reasonable and what’s necessary in the competition for talent,” he said.
Cowden Associates, Inc. headquartered in Pittsburgh, PA, was created in 2001 by the merger of Halliwell and Associates and MMC&P Spectrum Benefits, which was founded by Jere Cowden in 1986. Currently led by President & CEO Elliot Dinkin, Cowden Associates specializes in helping corporate clients find the best solutions, both for the enterprise and for its employees, in regard to compensation, healthcare benefits, retirement and pension issues, and Taft-Hartley fund consulting. Winning Workplaces and the Wall Street Journal have recognized Cowden Associates as a “Top Small Workplace,” a lifetime designation awarded to executives for their ability to build and lead savvy organizations. For more information visit www.CowdenAssociates.com
Winston-Salem Journal Online covers financial news and discusses value investing, hedge funds, banks, asset managers and technology.
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