North Carolina lawmakers are considering legislation that would cap nonprofit hospital executive compensation at 400 times the salary of the lowest-paid worker. Senate Bill 978, sponsored by Sen. Jim Burgin, R-Harnett, seeks to tighten oversight of nonprofit health systems, arguing that tax-exempt status necessitates greater accountability for executive pay packages that can reach tens of millions of dollars.
Why are lawmakers targeting nonprofit executive pay?
State Sen. Jim Burgin contends that because nonprofit hospitals do not pay property, income, or sales taxes, the public essentially acts as a shareholder in these organizations. According to Burgin, this fiscal relationship grants the state a legitimate interest in limiting excessive compensation. Under the proposed bill, if a hospital’s lowest-paid employee earns $35,000 annually, the CEO’s compensation would be capped at $14 million. Burgin argues this creates a necessary standard for “not-for-profit” entities that rely on taxpayer support to remain in business.
Atrium Health CEO Gene Woods earned approximately $25.8 million in 2024. If the proposed 400-to-1 ratio were applied to Advocate Health’s minimum pay of $39,200, Woods’ compensation would face a reduction of roughly $10.1 million.
How does the WakeMed-Atrium merger influence this policy?
The push for pay caps gained momentum during the public rollout of a proposed merger between WakeMed and Atrium Health. Critics of the deal, including State Treasurer Brad Briner, worry that hospital consolidation reduces competition, limits patient choice, and drives up the cost of care. While the Senate Health Care Committee removed language from the bill that would have granted state officials direct power to block the merger, the conversation regarding transparency remains active. According to Burgin, if earlier versions of the bill requiring state auditor and attorney general oversight had been law, the public would have had more information regarding the transition of control.
What are the arguments for and against increased oversight?
The debate highlights a clash between regulatory efforts and hospital operations. Proponents of oversight, such as Gov. Josh Stein, argue that the state Department of Justice needs more “tools in the toolbox” to ensure healthcare transactions are transparent and benefit the public. Conversely, the North Carolina Healthcare Association has suggested that increased disclosure requirements create excessive red tape at a time when hospitals face rising costs and fluctuating federal policy. WakeMed spokeswoman Kristin Kelly stated that the hospital appreciates senators preserving the authority of Wake County commissioners to manage the deal locally.

| Executive/System | 2024 Pay (Approx.) |
|---|---|
| Gene Woods (Atrium/Advocate) | $25.8 Million |
| Donald Gintzig (WakeMed) | $1.9 Million |
Frequently Asked Questions
- Would this bill apply to all hospitals in North Carolina? No, the proposed legislation specifically targets nonprofit hospitals that benefit from tax exemptions.
- What happens to the WakeMed-Atrium merger if this bill passes? The bill does not contain language to retroactively stop the merger, but it signals a shift toward stricter future oversight of hospital consolidation.
- Who is currently reviewing the WakeMed-Atrium deal? The deal is under review by the Federal Trade Commission, the state attorney general, and the Wake County Board of Commissioners.
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