Friday, August 5, 2011

NY Governor Cuomo To Investigate Nonprofit Executive Pay

Governor Andrew Cuomo
In a blog post on The New York Times, it was reported that New York Governor Andrew Cuomo planned to create a task force to investigate executive compensation at nonprofits that receive taxpayer money.  The task force will consist of: NY inspector general Ellen Biben, Secretary of State Cesar Perales, NY Medicaid inspector general James Cox, and superintendent of the Department of Financial Services, Benjamin Lawsky.

 Cuomo's decision came after a Saturday report in the Times reported on the high salaries and perks executives got at the Young Adult Institute.  Specifically, the article tells the story of Philip and Joel Levy, who had headed the organization since the 1970s before their sudden retirement at the end of June.

In addition to the close to $1 million in annual salaries they made each year, the Levy brothers had some questionable perks.  To name just a few, they were allowed to bill the organization to cover their children's college tuition, and Philip charged the institute $50,400 to pay for his daughter's co-op in Greenwich Village.  The article also detailed other high salaries among nonprofits that relied on state Medicaid funding from the Office of People With Developmental Disabilities (OPWDD).  These salaries were far and away higher than those paid at similarly sized organizations.

According to the NYT blog post, Nonprofits may lobby against regulations to executive compensation, as they had in similar cases that occurred in Massachusetts.  In an era where Americans have a bad taste in their mouths from the bank bailout and stories of corporate greed, any executive compensation that is seen as executive is going to be highly scrutinized.  If there is any update on the findings of the task force, we will be sure to post them here.  In the mean time, head on over to The New York Times to read the full blog post on this topic.

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