NY Nonprofit CEO Pay May Soon Be Capped

Nonprofit CEOs Face Pay Limits
– Journal News

Manatt's James Lytle, a partner in the firm's Government & Healthcare Practices, was interviewed by Journal News on New York Governor Andrew Cuomo's executive order limiting executive salaries of organizations that contract with one or more of 13 state agencies to $199,000 a year.

As reported by Journal News, the order was issued about 15 months ago, after it came to light that two top executives at a New York City nonprofit earned nearly $1 million each and received other benefits as well. The regulations must be implemented by July 1, and they will apply to groups that provide services on behalf of the state, largely in the health and human services sectors.

The state agency that contracts with the provider and the governor's budget department will identify before July 1 publicly available, acceptable salary surveys. Providers told the publication that they are anxious for the state to release the information.

"You're left very much in the dark as to whether the salary schedules in any given organization are found to be acceptable or not," said Lytle.

Several nonprofit executives told the publication that the executives who received $1 million each were outliers and not the norm for the nonprofit world.

Lytle said that he's not convinced the regulations are the right policy to address the issue of excess compensation. The state should deal with organizations that pay excessive salaries and have high administrative costs on a case-by-case basis, he said. "If there are people whose salaries cannot be justified, I believe currently the (state) attorney general and the Charities Bureau that he oversees have the authority to do something about it," he said.



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