A California ballot initiative to establish a $450,000 compensation limit for healthcare executives qualified for the 2026 ballot on May 12. The limit would be increased by 3.5% or the annual rate of change in the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W), whichever is lower. The initiative would apply to executives and managers of private hospitals, private physician groups, and public hospitals owned by special districts, and exclude county-operated hospitals and physician groups with fewer than 25 employees. The limit would be effective for the 2027 calendar year.
The limit would apply to total annual compensation and include wages, salary, paid time off, bonuses, incentive payments, cash payments, fair market value of loans, cash value of housing, company cars, use of corporate aircraft, scholarships, fellowships, cash value of dependent care or adoption assistance, cash value of stock options or awards, and severance payments. It would not include organizational contributions toward the cost of health or disability insurance, or health reimbursement and savings accounts.
The attorney general would be authorized to impose a fine for each violation on for-profit organizations or individuals that do not comply with the compensation limit. The maximum fines would range from $100,000 to $200,000, depending on whether the violation was intentional and whether there were repeated violations.
For nonprofit organizations that do not comply with the compensation limit, the state would be authorized to use the following penalties:
- revoke their tax-exempt status,
- appoint a governing board member for a specified time, or
- impose a maximum fine of $100,000-$200,000 per violation.
To qualify an initiated state statute for the ballot in California, sponsors need to submit a petition containing signatures equal to 5% of the votes cast in the prior gubernatorial election. For the 2026 cycle, that is equal to 546,651 valid signatures.
Californians for Responsible Healthcare, sponsored by Service Employees International Union – United Healthcare Workers, is leading the campaign in support of the initiative. It has reported more than $13.9 million in contributions. The campaign submitted more than 1 million signatures for verification. The secretary of state reported that at least 614,350 signatures were valid on May 12.
In a press release, SEIU-UHW said, “At a time when healthcare facilities across the country are facing massive federal budget cuts that threaten critical programs like Medicaid, healthcare workers say it’s more important than ever that every healthcare dollar be invested in providing quality patient care, not in multimillion-dollar executive pay packages. The initiative seeks to address the growing gap between excessive healthcare executive salaries and the realities faced by frontline workers and patients."
Californians Against the Health Care Endangerment Act, sponsored by the California Association of Hospitals and Health Systems, registered in opposition to the initiative. The campaign has reported $384,188.31 in contributions.
Carmela Coyle, president and CEO of the California Hospital Association, said, "[This measure] couldn’t have come at a more precarious time for health care in California. Following the largest cut to health care in our nation’s history, this is a moment when the state should be doing all it can to recruit and retain thoughtful, mission-driven leaders who can develop innovative ways to preserve access to vital health services for patients. Instead, this proposal will only make it difficult — if not impossible — to do so."
This is the fourth initiative to qualify for the ballot in California. Voters will also be deciding on three initiatives and three legislative referrals to:
- Allow the state and local governments to create programs that provide candidates with public funds under spending limits and eligibility rules;
- Eliminate the successor election when a state officer is recalled, thereby leaving the office vacant until it is filled according to state law;
- Establish a second mortgage homebuyer program for qualified homebuyers on qualifying homes and issue $25 billion in bonds to fund the program;
- Require a two-thirds vote by the electorate to enact special local taxes enacted by successful citizen initiative campaigns, and prohibit charter cities from levying real estate transfer taxes;
- Require initiatives that change vote thresholds to supermajority votes to pass by the same vote requirement as is being proposed; and
- Require voters to present government-issued identification when casting ballots and require election officials to use government data to confirm voter citizenship and report verification rates.
Campaigns behind 11 other ballot initiatives in California have filed signatures for the 2026 ballot. The deadline to qualify or withdraw an initiative from the ballot is June 25.
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