Annual Survey: Executive Compensation Under Fire

• Published in: Hospitals & health networks Vol. 66; no. 17; p. 24
• Main Authors: Lampert, Joan, Bjork, David
• Format: Magazine Article
• Language: English
• Published: Chicago Health Forum Inc 05.09.1992
• Subjects: Certificates of need; Chief executive officers; Compensation plans; Executive compensation; Executives; Health care industry; Health care policy; Hospitals; Incentive plans; New employees; Polls & surveys; Statistical data; Trends; Wages & salaries; United States > US
• ISSN: 1068-8838; 1943-5169

The 1992 Hay Hospital Management/Professional Compensation Survey contains information on compensation practices in 1,268 hospitals. The survey explores compensation's link to organizational performance, the use of cash compensation, benefits and perquisites, and health care compensation trends. A strong correlation was found between hospital performance, executive pay levels, and the use of incentives. The average target incentive opportunity for hospital CEOs was 19.5% of salary in 1991-1992 with a cap of 29%, compared to 50% for industrial CEOs, often with no cap. Pay for hospital employees on all professional levels increased 7.4% in 1991-1992, compared with increases of about 4% in industry. CEO pay rose fastest of all. Geographic differentials are evident in salary levels - CEOs in the mid-Atlantic states are paid approximately 20% more than the national average. The best predictor of pay was a measure of job scope and complexity. About 50% of the variance in executive pay can be attributed to differences in job content. Considering the pressures on the health care field to control costs, the Hay Group predicts salary increases during 1992-1993 of 5.0%-5.5%.