The Influence of Ownership and Compensation Practices on Charitable Activities

• 成果类型: Article
• 署名作者: Eldenburg, Leslie G.; Gaertner, Fabio B.; Goodman, Theodore H.
• 署名单位: University of Arizona; University of Wisconsin System; University of Wisconsin Madison; Purdue University System; Purdue University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12066
• 发表日期: 2015
• 页码: 169-+
• 关键词: nonprofit hospitals; BONUS SCHEMES; performance; incentives; governance; CONTRACTS; BEHAVIOR; LEVEL

摘要

Recent accounting research provides evidence that similar profit-based compensation incentives are used in for-profit and nonprofit hospitals. Because charity care reduces profits, such incentives should lead for-profit hospital managers to reduce charity care levels. Nonprofit hospital managers, however, may respond differently to the same incentives because they face a different set of institutional pressures and constraints. We compare the association between pay-for-performance incentives and charity care in for-profit and nonprofit hospitals. We find a negative and significant association between charity care and our proxy for profit-based incentives in for-profit hospitals, and no significant association in nonprofit hospitals. These results suggest that linking manager pay to profitability does not appear to discourage charity care in nonprofit hospitals. Apparently, the nonprofit mission, institutional pressures, and ownership constraints moderate the potentially negative effects of profit-based incentives. Because this evidence partially alleviates concerns over nonprofit compensation arrangements that mirror those used in for-profit hospitals, it should be of interest to regulators and policymakers. In addition, this study provides insights into accounting research about institutional and organizational influences that affect managerial responses to financial incentives in compensation contracts.