The CEO's of non-profit organizations have a mean income of $291,356 per year. Non-profit organizations usually collect money for charity and by IRS regulations are not allowed to make a profit. But, to make sure they don't have any money left over, the organizations simply raise the salaries of the CEOs.
The four top earners surveyed worked at hospitals: Harold Varmus, president of the Memorial Sloan-Kettering Cancer Center in New York, and Floyd D. Loop, chief executive of Cleveland Clinic Foundation, both of whom earned $1.7 million in 2003; Herbert Pardes, chief executive of New York-Presbyterian Hospital, $1,3 million; and Peter G. Traber, president of the Baylor College of Medicine, $1.2 million.
Defendants of the greater than life salaries, are quick to say that the salaries must remain high so that the CEOs feel appropriately compensated. The average American worker makes .05 percent of that amount per year.
The IRS rules governing charities and private foundations say they cannot pay executives more than reasonable compensation. Excessive compensation can be penalized by excise taxes.