SullivanCotter Releases Annual Health Care Executive Compensation Survey Results and Offers Insight Into Pandemic-Related Pay Actions

SullivanCotter Releases Annual Health Care Executive Compensation Survey Results and Offers Insight Into Pandemic-Related Pay Actions

SullivanCotter, the nation’s main impartial consulting company withinside the evaluation and improvement of general rewards applications, staff solutions, and generation and records merchandise for the fitness care enterprise and nowno longer-for-earnings sector, lately launched outcomes from its 2020 Manager and Executive Compensation in Hospitals and Health Systems Survey — that’s now in its twenty eighth 12 months.This 12 months’s outcomes encompass statistics from extra than 2,three hundred companies.More importantly, the survey carries the ultimate set of benchmark records compiled previous to the onset of COVID-19 and affords essential pre-pandemic reference factors for assessing government repayment applications.“While pay moves are being impacted through the pandemic, the foundational shape of government repayment applications has normally remained unchanged.The 2020 survey records may be used to evaluate the competitiveness of base salaries, the extent of incentive possibilities and different application layout concerns.In mild of the effect of the pandemic on commercial enterprise operations, now’s the precise time to assess the wider implications of COVID-19 in your expertise approach, repayment philosophyand application layout to make sure they mirror your organization’s new priorities,” stated Tom Pavlik, Managing Principal, SullivanCotter.In latest years, government salaries have been trending upward because of the focal point on recruitment and retention of key management expertise and an an increasing number of complicated fitness care marketplace.When evaluating records suggested through companies that participated in SullivanCotter’s survey in each 2019 and 2020, median base salaries going into 2020 elevated at a charge of 3.4% to5.6% for the maximum senior executives of impartial fitness structures (Vice Presidents, Senior Vice Presidents, CFOs, COOs and CEOs) in place of 0.8% to 4.1% for the ones government positionsHowever, because of the monetary effect of COVID-19, many companies have carried out transient government base profits discounts.According to SullivanCotter’s COVID-19 Executive and Employee Compensation Practices Survey series, which become performed among April 2020 and August 2020 to offer perception into the cutting-edge practices of extrathan one hundred massive fitness structures, handiest 14% of companies have been thinking about or had carried out government base profits discounts as of April.By May, this range had risen to 31%.Through August, carried out profits discounts reached 45%.However, of this 45%, almost 1/2 of had already reinstated the pre-pandemic salaries with the the rest anticipated to achieve this through the stop of the 12 months.An evaluation of the survey records suggests that, previous to COVID-19, median profits growth budgets for fitness care executives have been anticipated to stay constant with latest years at 2.7%for impartial fitness gadget executives and 3.0% for gadget-owned medical institution executives.The pandemic has impacted the monetary circumstance of many companies and is moderating profits growth plans for FY2021.According to SullivanCotter’s proprietary COVID-19 studies, approximately 40% of companies had decided their FY2021 government profits growth budgets through mid-August.The initial median government profits growth price range is 2.5%, with 15% making plans to freeze government salaries.The different 60% of companies had now no longer but decided their profits growth price range, and 20%-25% are delaying the timing of those increases.These figures might also additionally extrade through the years as monetary overall performance will effect the capacity to completely fund deliberate budgets, and it’s far expected that extra companiesmight also additionally don’t forget government profits freezes for FY2021.Executive annual incentive plans (AIPs) are nonetheless the norm as companies are an increasing number of targeted on gadget-huge alignment and pay-for-overall performance.Prior to COVID-19, 89% of impartial fitness structures and 67% of gadget-owned hospitals applied AIPs with award possibilities various through fitness gadget length primarily based totally on internet revenue.According to SullivanCotter’s studies, however, COVID-19 has had a substantial effect on government incentive plans for FY2020.As of mid-August, extra than 1/2 of of the taking part companies had carried out or have been nonetheless thinking about modifications to FY2020 plans.While one-1/3 did now no longer but recognize how they may manage their FY2020 annual incentive payouts, about 20% are doing away with or thinking about doing away withpayouts, almost 30% count on to pay under goal, and handiest approximately 20% count on to pay at goal or above.As hospitals and fitness structures plan for what lies beforehand and appearance to help monetary sustainability and mitigate risk, companies have to don’t forget each marketplace practices and their manor woman monetary occasions whilst figuring out their government repayment and staff-associated moves shifting forward.“SullivanCotter’s 2020 survey displays the maximum latest normative 12 months previous to COVID-19.Due to the cutting-edge pandemic and the extraordinarily dynamic surroundings, the survey records have to be used thoughtfully, with suitable context, and with sound commercial enterprise judgement as you’remaking plans and thinking about your pay choices for FY2020 and beyond,” stated Bruce Greenblatt, Managing Principal, SullivanCotter.There are some of essential government repayment concerns for companies to don’t forget as they circulate forward:Be aware of the way to correctly use 2020 survey records.Understand the timing of the records and don’t forget what you are attempting to evaluate earlier than the use of them.The records may be beneficial in benchmarking the competitiveness of repayment application factors and award possibilities.Rely on sound commercial enterprise judgement and reticence whilst comparing base profits moves and incentives for FY2020.Plan to revisit incentive overall performance desires for FY2021 to make sure they may be tailor-made to the cutting-edge surroundings.

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