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Healthcare Flux Alters Compensation Mix

John Commins, for HealthLeaders Media, September 17, 2012

Another trend Otto notes is the continuing shift away from base pay raises for healthcare CEOs as compensation packages continue to move toward incentive pay and long-term benefits.

"Base salary adjustments are going north compared to prior years but not tremendously. What has really influenced pay at the executive level, especially the cash compensation over the last 10 years, is the increasing level of comfort with using incentive plans," Otto says.

"I don't see that changing in the near future given our work with boards and compensation committees at the executive level dealing with compensation arrangements. They aren't looking to give the kinds of base salary increases that you used to see 10, 15, 20 years ago and they are much more inclined to putting more pay at risk to make sure they get the outcomes they are willing the additional dollars for."

Healthcare executives are also seeing an uptick in benefits and perquisites incentives that are slightly higher than in the general market. At health systems, for example, 74% of the compensation packages offered executive long-term disability benefits, compared to only 33% of the general market.

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