Balancing Compensation Amid Economic Woes

So, what will the next year bring? Seifert expects that more health systems will turn to long-term incentive plans as a retention tool for top executives. He notes that 24% of survey participants have a long-term incentive plan in place in 2010, up from 19% in 2009.

Of the organizations with LTI plans, performance units are the most commonly used vehicle, with 95% offering such a plan.

Beyond specific tools, Seifert says he anticipates "continued temperance in decision making" and a more focused approach to designing compensation packages.

"We will likely see an uptick, but it's more a demand for talent—not opening the floodgates," he says. "If you want to keep people retained, it's going to be selective, but you are going to need to do something. Boards are going to struggle more with pay decision-making going forward. and it is not going to be across-the-board type of budgeting. It's more likely to be focused on individuals. Going forward, the reality is they will have to think carefully if they want to retain key leaders."