Court: Voter-Approved Pay Caps for El Camino Hospital Execs Unconstitutional
One of the most closely watched compensation battles in the hospital industry has reached a conclusion, as a local ballot initiative that would have capped the pay of executives at El Camino Hospital in Mountain View, Calif., was ruled unconstitutional.
The Santa Clara County (Calif.) Superior Court issued the judgment on Measure M yesterday, stating that the statutory pay limit does not apply to local healthcare districts (El Camino is a 443-bed nonprofit hospital in a public district). The court also said Measure M does not enact "a statute or ordinance, and therefore is not within initiative power."
In November, 52 percent of people within the hospital's county voted to approve Measure M, which would have capped the compensation of El Camino executives to no more than twice the salary of California's governor. Based on most recent figures, this would have limited hospital executive salaries to no more than $330,000.
El Camino officials filed a lawsuit earlier this year against the measure and the SEIU, the group that pushed for Measure M's approval. The union did not release a statement or comment on the court's ruling.
"We are pleased with the court's decision, which will enable El Camino Hospital to continue to deliver high-quality and compassionate care by recruiting and retaining a strong leadership team," said Neal Cohen, MD, chair of the El Camino Hospital board of directors, in a news release. "As a public community hospital, we have a mission of affordability, a responsibility we take very seriously. Our compensation philosophy enables us to make thoughtful decisions around employee salaries and align them with the hospital's overall strategic goals."
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