The Hawaii Medical Service Association and The Queen's Medical Center may have lost money last year, but they still managed to give their CEOs a raise.

Last year, HMSA paid Chief Executive Officer Robert Hiam nearly $1.16 million, a $35,000 increase from his 2006 compensation.

Arthur Ushijima, chief executive officer of Queen's Medical and its parent Queen's Healthcare System, made about $1.15 million last year, a $234,741 pay increase from his 2006 compensation.

Hiam and Ushijima were the highest-paid executives in Hawai'i's nonprofit sector.

An Advertiser study of tax filings from more than 20 of the state's largest healthcare organizations, foundations and charities, social services and large educational organizations found that CEO pay continued to rise last year, despite the slowing of the local economy and sluggish investment returns from Wall Street.

SALARY INCREASES

The study found that 14 of the state's largest and most influential nonprofit organizations gave their top executives a raise while five CEOs took a pay cut.

The findings are largely in line with national trends. A survey by Redmond, Wash.-based executive pay consultants ERI Economic Research Institute found that top executives at nonprofit healthcare, educational and social services organizations around the country are seeing pay increases ranging between 4.2 percent and 4.6 percent this year.

"Their investments may be down and their assets may be declining, but I haven't seen a decrease in (CEO) salaries," said Linda Lampkin, ERI's research director.

To be sure, CEOs in the nonprofit sector make far less money than their for-profit counterparts. An Advertiser study in April found that the average pay for a CEO of a publicly traded company in Hawai'i was about $2.4 million last year, or more that double what HMSA and Queen's paid their top executives.

HMSA and Queen's said their CEO pay is performance based and is competitive with what other similar-sized healthcare companies pay.

HMSA said that Hiam's 2007 compensation — which was set by its board's compensation and human resources committees with input from executive pay consultants Towers Perrin — is less than 0.06 percent of the company's overall revenues.

"The compensation program is designed to be fair, encourage retention of officers for long-term value to the organization," HMSA said in a news release.

HMSA lost $22.6 million last year due to the continued rise in physician and hospital reimbursements. The Queen's Medical Center posted an operating loss of $5.5 million during its 2007 fiscal year, according to Moody's Investors Service.

'EXCESSIVE PAY'

State Sen. Josh Green, D-3rd (Miloli'i, Kailua, Kona), called HMSA's executive pay policies "the worst in the industry."

CEO pay at HMSA has risen steadily over the past decade from $400,000 a year to more than $1 million, while salaries for doctors and nurses have remained flat, contributing to an exodus in the healthcare industry, Green said.

"Excessive pay by the insurance industry is one the primary reasons people don't get healthcare services," Green said.

Hiam and Ushijima were the only Hawai'i nonprofit executives who received more than $1 million last year. But at least five others took home $400,000 or more last year. They included: