Monday, May 16, 2011

Here We Go Again

by Gary Snyder

Here we go… on yet another Blue Cross Blue Shield. This one is in Tennessee. The Chattanooga-based not-for-profit mutual benefit corporation doubled what it pays its directors and chief executive officer in the past five years, boosting the salary for part-time board Chairman Lamar Partridge to $100,000. The Blue Cross board meets about four times a year. One board member said that she spent eight days last year attending to her responsibilities on the Blue Cross board. The 13 board members collectively were paid more than $1.02 million by Blue Cross.

The board raised the compensation package for CEO Vicky Gregg to more than $4.4 million. But in its regulatory filings on salaries paid strictly by Blue Cross Blue Shield of Tennessee Gregg’s salary in 2009 was listed as $1.7 million. Most of the compensation for Blue Cross directors and top officers comes from for-profit businesses that Blue Cross has started or bought over the past three decades. In 2009, her contract activated partial vesting of certain deferred compensation, swelling her total pay package that year to nearly $6.2 million.

Sound familiar? In April, Nonprofit Imperative, brought to the attention of its readers similar practices in Massachusetts at its not-for-profit Blue Cross plan. In Massachusetts, the BCBS dropped its board members’ pay after the state attorney general said the longtime practice of paying directors for a nonprofit group can not be justified. “We can’t think of a good reason why, in a not-for-profit setting, they should compensate their directors,” Massachusetts Attorney General Martha Coakley said. David Spackman, chief of the state office that oversees nonprofit and charitable organizations in Massachusetts, said paying directors not only diverts money from the nonprofit’s mission, but it “has the potential to impair board independence.” One of its executives topped out at $16.4 million at retirement and remained as a paid board member.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, ,, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)
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