Financially troubled St. Charles Health System pays board members up to $36k

St. Charles Health System in Bend, Ore., uses nearly $300,000 from its annual budget to pay 11 board members' compensation, despite systemwide financial strain, according to the Bend Bulletin.

Each of the 11 St. Charles directors made between $20,000 and $36,000 last year, reaching a collective $293,000. They agreed to take 10 percent stipend cuts continuing into next year.

In October, the health system announced it was cutting 30 jobs and temporarily lowering salaried worker pay by 5 percent and salaried executive pay by 10 percent.

St. Charles has paid its board directors since 2011, aiming to attract and retain more physicians, Dennis Dempsey, the board's vice chairman, told the Bend Bulletin. In 2013, the board voted to make all directors accept compensation.

"As we've gone from one to two to three to four hospitals … the role has changed, and the expectation of what the board is supposed to do has changed dramatically," Mr. Dempsey added.

Nationally, 9 percent of nonprofit health systems pay their board members, according to the Governance Institute's most recent biennial survey, with most receiving less than $5,000 per year. Approximately 2 percent of nonprofit health systems pay their directors $20,000 or more, with none reporting pay of $30,000 or more, according to the Governance Institute's survey.

The number of nonprofit health systems that pay directors has not increased in recent years, said Kathryn Peisert, managing editor of the Governance Institute. "Everybody hopes and thinks that this is going to be a trend that's increasing, and that's not what we're seeing," Ms. Peisert said.

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