Excess Nonprofit Severance Returned To Constituents – Kinda

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July 7, 2011; Source: Boston Herald | The NPQ newswire has been following the story of Blue Cross in Massachusetts where a former CEO was paid an enormous severance package even after the organization suffered losses and while health care premium rates were rising precipitously. This article from the Boston Herald asserts that Blue Cross has said they will return the $4.2 million to its customers in rebates but will not try to “claw back” the money from the former exec, Cleve Killingsworth, who received $11 million upon leaving. The money instead will be taken out of current profits. Where is the concept of stewardship in this situation?

Meanwhile a bill that would have prohibited compensation to board members of nonprofits – a legislative initiative that flowed out of the same situation – was defeated as part of a budget bill, but will re-emerge as a stand alone bill according to proponents. But it may face some push back from local foundations since eight of the state’s 50 largest foundations compensate their board members and some quite handsomely.

For instance, the Boston Globe reports that the 99-year-old Alden Trust compensates each of its four board members at $130,000 a year and the Ellison Foundation in Lynn pays its trustees $100,000 a year. You can bet NPQ will look further into these situations.—Ruth McCambridge

  • Dave BeBrave

    The BCBS’s former CEO’s last name sums it all up…