Many healthcare organizations across the country have reduced executive compensation to help offset financial strain tied to the COVID-19 pandemic.
About half of healthcare organizations have either implemented salary reductions for executives or are considering reducing executive pay, according to a survey of 160 organizations released by Gallagher's Human resources & Compensation Consulting practice.
Five takeaways from the the survey:
1. The executive salary reductions range from 10 percent to 30 percent.
2. The median CEO base salary reduction was 15 percent. A very small number of organizations reduced CEO base salary by as much as 50 percent.
3. The median salary reduction for vice presidents was 15 percent, and the median reduction for directors was 10 percent.
4. Most of the organizations that have cut executive salaries — 90 percent — considered the pay reductions temporary. However, few have said when the reductions will be lifted.
5. Gallagher expects decisions about when to lift salary reductions to be guided by each organization's financial situation. "We do not expect a long-term, permanent reduction in base salaries of healthcare executives," Gallagher said.
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