How Arkansas Business Compiled Its List of Highest-paid Nonprofit Employees

by Gwen Moritz  on Monday, Mar. 25, 2013 12:00 am  

Nonprofit organizations — essentially businesses with no shareholders that are engaged in a mission for the public benefit — are exempt from federal income taxes. In exchange for that benefit, the organizations are required to file annual financial reports with the Internal Revenue Service.

Such a report is known as an IRS Form 990, although there are variations in the form depending on the nonprofits’ total revenue and purpose. Unlike individual income tax returns, the 990s are public documents.

The 990s include revenue, expenditures, assets, investments and, most importantly for this week’s list, compensation paid to directors, trustees, officers and key employees. They must include the compensation of the five highest-paid employees who are paid more than $100,000 a year.

Arkansas Business has long reported publicly available salary information in lists of the highest-paid state employees and of executive officers named in the annual proxy statements of publicly traded companies headquartered in Arkansas. The annual lists of electric and gas utilities include the salaries of the top executives as reported to the Arkansas Public Service Commission.

We have also used information from 990 forms in a periodic list of the state’s largest nonprofit organizations, and that list has regularly included the compensation of the CEO or executive director. Our annual list of the state’s largest hospitals has included the salaries of the top administrators of the nonprofit hospitals. Revenue data from 990s has been used in the list of chambers of commerce around the state.

Last fall, Senior Editor Mark Friedman, in his monthly Health Care column, reported the salaries of the highest-paid doctors working for nonprofit hospitals in the state. That was the first time that Arkansas Business had used the 990s for salaries of nonprofit employees beyond the CEO or executive director level, and it inspired this week’s list.

To compile the highest-paid nonprofit executives list, Arkansas Business used, a website operated by a Virginia nonprofit whose mission is “to revolutionize philanthropy and nonprofit practice by providing information that advances transparency, enables users to make better decisions, and encourages charitable giving.” The 990s used were the most recent available from GuideStar.

The fiscal years researched ended between March 30, 2011, and June 30, 2012, and are noted in each entry on the list. Because the data is between nine months and two years old, some of the individuals may no longer be employed by the nonprofit listed or may not have the same title. When Arkansas Business was aware of a change or departure, it was noted.

GuideStar’s database includes more than 20,000 nonprofits in Arkansas. Almost 15,000 of those had annual revenue of less than $100,000 and were not included in Arkansas Business’ research. The 990s of about 600 nonprofits, including all that had annual revenue of $2 million were checked. With the deliberate exception of electric cooperative executives whose salaries have long been reported in the utility lists, we believe we have captured most of the nonprofit employees who received compensation packages of $200,000 or more during those recent fiscal years, but some smaller organizations paying relatively large salaries may have been overlooked. (Omissions may be reported to Editor Gwen Moritz at

The list is ranked by total compensation, which then is broken out into its components: salary and “other compensation.”

With 252 employees listed, the online version of this list is expanded from the 140 names published in Arkansas Business' print edition (and digital edition.) Employees with total compensation of at least $200,000 were counted.

In most cases, the compensation is paid directly by the nonprofit named. Footnotes indicate cases in which the employee is paid by related organizations.

Footnotes also reflect the fact that many of the nonprofits on the list are hospitals with exceptionally complicated accounting issues. When a hospital’s revenue and/or net income reported on the IRS Form 990 differs from that reported in the Medicare cost reports or other data provided to Arkansas Business for the October list of hospitals and medical centers, the earlier information has been retained and the 990 data is included in a footnote. The differences do not suggest that any figure is incorrect in its proper context.

Arkansas Business has used the term “net income/loss” to refer to the line on the Form 990 that represents income during the fiscal year minus expenses for the same fiscal year.



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