Hospital Executives' Compensation Initiative Fails to Qualify for Ballot

An initiative to limit the compensation of executives of nonprofit hospitals has failed to qualify for the November ballot, the Secretary of State's Office announced Monday.

Valid signatures from 504,760 registered voters -- 5 percent of the total votes cast for governor in the 2010 general election -- had to be submitted by June 2 to qualify the measure for the November ballot, according to the Secretary of State's Office.

Because initiative backers did not submit the minimum number of signatures to county election officials needed to qualify the measure, the number submitted was not announced.

What backers dubbed the Charitable Hospital Executive Compensation Act of 2014 would have limited 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 have required annual public disclosure of the 10 highest-paid executives and five largest severance packages.

Hospitals violating terms of the initiative would have been subject to fines, revocation of tax-exempt status and appointment of a representative of the state attorney general.

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

If the initiative had become law, it would have resulted 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.

The initiative was backed by the SEIU-United Healthcare Workers West union, which claimed it would have reduced the cost of hospital care.

—City News Service