Hospitals are no longer regularly giving raises for everyone in top management. Ron Seifert, executive compensation practice leader for the Hay Group in Philadelphia, says hospitals are being very conservative about raises.
Even as times get better, "you're not going to see the floodgates open," he says. For example, it used to be that everyone on the executive team regularly received a raise, but now a few institutions are limiting them to just a few individuals rather than the whole staff. "It is my belief that we'll see more of that," he says.
Results of 2010 salary survey
The 2010 Healthcare Compensation Study by TIAA-CREF shows all executive groups experienced a decrease in both the most recent and next planned salary structure increases from the 2009 report. For instance, 22 percent of CEOs, the lowest level in 10 years, received at least a 6 percent increase in base salary in 2010. In 2008, 89 percent of healthcare CEOs were granted base salary increases of at least 6 percent.
"We are seeing modest raises," Mr. Seifert says. "This mood of caution will continue at some institutions into next year."
Executives, however, are doing better than other groups in the healthcare industry. The survey found executives received average salary increases of 2.5 percent, compared with 2.4 percent for nurses and 2.3 percent for other non-executive employees.
Healthy hospitals can still afford to give raises
David Bjork, senior vice president & senior advisor for Integrated Healthcare Strategies in Kansas City, says hospitals that are doing well financially can still afford to grant raises in the range of 2-4 percent. "This simply keeps up with inflation and the market value of jobs," he says.
Mr. Bjork says hospitals still have to be careful about large payments to executives, which may be unintentionally bloated by such items as long-term incentive plans rewarding performance over several years. Hospitals also have to report on 990 forms to the Internal Revenue Service payments such as money drawn from a 401(k) by an older CEO in advance of retirement.
The IRS can demand fines if payments are too high, but that rarely happens, Mr. Bjork says. More likely, the local newspaper will access 990 filings, report on executive pay and spread some bad publicity for the hospital. When the media reports pay increases of 15-20 percent, they don’t explain ingredients like one-time payments, he says. Therefore, he says it is a good idea to closely manage executive pay levels beyond just making sure they stay within benchmarks set down by the IRS.
Learn more about the Hay Group.
Learn more about Integrated Healthcare Strategies.
Even as times get better, "you're not going to see the floodgates open," he says. For example, it used to be that everyone on the executive team regularly received a raise, but now a few institutions are limiting them to just a few individuals rather than the whole staff. "It is my belief that we'll see more of that," he says.
Results of 2010 salary survey
The 2010 Healthcare Compensation Study by TIAA-CREF shows all executive groups experienced a decrease in both the most recent and next planned salary structure increases from the 2009 report. For instance, 22 percent of CEOs, the lowest level in 10 years, received at least a 6 percent increase in base salary in 2010. In 2008, 89 percent of healthcare CEOs were granted base salary increases of at least 6 percent.
"We are seeing modest raises," Mr. Seifert says. "This mood of caution will continue at some institutions into next year."
Executives, however, are doing better than other groups in the healthcare industry. The survey found executives received average salary increases of 2.5 percent, compared with 2.4 percent for nurses and 2.3 percent for other non-executive employees.
Healthy hospitals can still afford to give raises
David Bjork, senior vice president & senior advisor for Integrated Healthcare Strategies in Kansas City, says hospitals that are doing well financially can still afford to grant raises in the range of 2-4 percent. "This simply keeps up with inflation and the market value of jobs," he says.
Mr. Bjork says hospitals still have to be careful about large payments to executives, which may be unintentionally bloated by such items as long-term incentive plans rewarding performance over several years. Hospitals also have to report on 990 forms to the Internal Revenue Service payments such as money drawn from a 401(k) by an older CEO in advance of retirement.
The IRS can demand fines if payments are too high, but that rarely happens, Mr. Bjork says. More likely, the local newspaper will access 990 filings, report on executive pay and spread some bad publicity for the hospital. When the media reports pay increases of 15-20 percent, they don’t explain ingredients like one-time payments, he says. Therefore, he says it is a good idea to closely manage executive pay levels beyond just making sure they stay within benchmarks set down by the IRS.
Learn more about the Hay Group.
Learn more about Integrated Healthcare Strategies.