8 Benchmarks on Hospital Executive Annual Incentives

More than 80 percent of health systems and more than 70 percent of independent hospitals use annual incentives, or pay-for-performance bonuses, to reward executives, but not all incentives are the same among different healthcare leadership, according to a chapter from the publication "Governance for Health Care Providers: The Call to Leadership."

Integrated Healthcare Strategies Chairman Kenneth Ackerman wrote the book as a guide for hospital boards and executives as a means for proper governance. The chapter on the hospital's compensation committee covers incentive opportunities and how a hospital should set target and maximum awards.

Here are eight benchmarks on annual incentives as a percentage of the executive's salary.

Health system CEO

Target award: 25 to 40 percent
Maximum award: 35 to 60 percent

Other health system executives
Target award: 20 to 30 percent
Maximum award: 30 to 45 percent

Hospital CEO
Target award: 20 to 30 percent
Maximum award: 30 to 45 percent

Other hospital executives
Target award: 15 to 20 percent
Maximum award: 20 to 30 percent

More Articles on Hospital Executive Compensation:

11 Hospital, Health System Executive Compensation Trends

UHS Compensation Committee Approves $2.7M Bonus for CEO Alan Miller

Report: Annual Incentive Plans Most Prevalent in Government-Owned Hospitals

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