Direct-care workers in the state’s contracted human services system have seen their wages stagnate in recent years, but the executives who run the largely nonprofit contractor agencies that employ those workers do not appear to have been feeling that same pain.
We examined compensation to both CEOs and direct-care workers in a sample of 30 service vendors to the Department of Developmental Services, both large and small, from around the state in Fiscal Years 2008 and 2011. This information is available in Uniform Financial Reports, which are submitted to the state Operational Services Division by the vendors and are posted online by the OSD at www.mass.gov/ufr.
The CEO compensation of our sample increased by an average of 16.6 percent during the four year period while the direct-care salaries decreased by an average of 2.17 percent during that time. (See Vendor Compensation Table.)
Among the 30 vendors, the average CEO compensation in FY 08 was $197,068. It increased to an average of $229,872 in FY 11. In FY 08, the average direct care salary for the sample was $33,508. It decreased to $32,780 in FY 11. In FY 11, direct-care workers were earning an average of 14 percent of what the CEOs of those vendors were earning, down from 17 percent in FY 08.
Among the sample, nine CEOs received compensation increases in the four year period reviewed while the direct care workers employed by those same vendors actually saw their wages cut. In two of those cases, the CEOs received increases exceeding 100 percent.
That many CEOs have taken hefty pay increases and the direct-care workers have gotten little or nothing, or in many cases decreases, raises questions about repeated calls from the vendors to add $28 million to a state budget reserve fund to increase those direct care salaries.
If the Association of Developmental Disabilities Providers and its member vendors are really concerned about their direct-care workers’ pay, why have these companies given raises only to their CEOs? Should the state be called upon to bear the entire burden of raising direct-care wages?
“The vendors appear to have it in their own power to give their direct-care workers increases, but they’ve chosen not to,” said Colleen Lutkevich, COFAR executive director. “Instead, they’re looking to the Legislature.”
If the Legislature does step in to fund the direct-care salary reserve account, it will not be at the urging of Governor Patrick. Despite the ADDP’s appeals, the governor’s budget for the coming fiscal year proposes zero for the reserve fund.
Note: We were not able to use data from one of the vendors, Massachusetts Mentor, Inc. Massachusetts Mentor is a subsidiary of NMH Holdings, Inc., a for-profit corporation that provides residential and other services for intellectually disabled persons in 36 states. NMH Holdings was incorported in Delaware, according to its audited financial statements, though it actually appears to be headquartered in Massachusetts. (NMH Holdings appears to be referred to as The Mentor Network on its national website.)
Massachusetts Mentor’s UFR and other reports filed with the state OSD employ what appears to be an unusual method of listing only partial salaries of top executives. The compensation listed is apparently the amounts of the executives’ salaries that are attributed to Massachusetts. For instance, total compensation for Edward Murphy, CEO of both Mass. Mentor and The (national) Mentor Network, was listed as only $14,830 in FY 10, in a filing with OSD). (The company does not appear to have filed a UFR report in Massachusetts for FY 11.) Murphy is a former commissioner of both Mental Health and Youth Services in Massachusetts.
Greg Torres, chairman of the Board of Directors for both Mass. Mentor and The Mentor Network, earned a total of $2,484 in compensation in FY 10, according to the OSD filing. Torres, a former chief of staff of the Massachusetts Senate Ways and Means Committee, is also currently president of MassINC, the nonprofit civic think tank in Massachusetts that publishes CommonWealth magazine. (CommonWealth frequently advocates for more transparency in governmental finances and operations.)
Also working for Mass. Mentor is Gerald Morrissey, a former commissioner of DDS in Massachusetts. Morrissey’s total compensation as a vice president at Mass. Mentor was listed in the FY 10 OSD filing as $5,113. None of these clearly partial compensation listings could be reliably compared with other CEO and direct-care compensation in Massachusetts.
NMH Holdings earned more than $1 billion in revenues in FY 10, according to filings with OSD, while Massachusetts Mentor took in $3.7 million from DDS and $19.4 million from the Department of Social Services in FY 10, according to its UFR report.
Calls and emails to OSD with questions about Mass. Mentor’s and NMH Holdings’ partial compensation listings for their executives were not returned.