Backers of an initiative to limit the compensation of health care administrators have received authorization to begin gathering signatures, Secretary of State Alex Padilla.
What backers have dubbed the “Hospital Executive Compensation Act of 2016” would limit the annual compensation of executives, managers, and administrators at hospitals, hospital groups, hospital-affiliated medical foundations and physicians groups, and health care districts — including salary, perks, paid time off, bonuses, stock options– to the salary and expense allowance for the president of the United States, which is currently $450,000.
The initiative would also require annual public disclosure of all executives receiving compensation or severance packages above this amount.
The initiative would also authorize monitoring of the compensation of covered executives and enforcement of the initiative’s provisions by the Attorney General’s Office, along with lawsuits targeting violators by the public.
Penalties for violating terms of the initiative would include fines, revocation of tax-exempt status and the appointment of a representative of the Attorney General to the boards of directors of nonprofit corporations.
If the initiative were to become law, it would result in state administrative costs in the low millions of dollars annually to enforce the measure, with the authority to recover costs through fees assessed on specified hospitals, according to an analysis made by the Legislative Analyst’s Office and Department of Finance. Valid signatures from 365,880 registered voters — 5 percent of the total votes cast for governor in the 2014 general election — must be submitted by July 25 to qualify the measure for the November ballot, Padilla said.
A similar measure was withdrawn from circulation before it could qualify for the November 2014 ballot.
The initiative is backed by the SEIU-United Healthcare Workers West union, which believes it would reduce the cost of hospital care.
—City News Service
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