N.Y. Court Strikes Down Executive Compensation Limits

New York’s effort to cap the compensation of health-care executives suffered a blow when the state’s highest court struck down key parts of a state regulation.

The Court of Appeals, in a divided 4-3 decision, struck down a $199,000 cap on executive compensation for health-care executives, saying the state Health Department exceeded its authority.

The court, however, upheld a related cap on the executive compensation for health-care organizations that receive state funding. The court said it was within the department’s authority to regulate “the manner in which state health care funding is expended.”

The regulations stem from a 2012 executive ...