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Study: 89% of hospital execs receive annual bonuses

Patient Financial Services Weekly Advisor, June 24, 2005

The prevalence of annual incentive plans in acute-care hospitals was 89% in 2005, according to Hay Information Services' 2005 hospital compensation report.

Hay surveyed 511 acute-care hospitals.

Other key findings include:

• Annual incentive plans are the most prevalent in nonprofit hospitals that are religiously sponsored (93%), followed by nonprofit secular hospitals (92%). They are least prevalent in for-profit hospitals (83%).
• Annual incentive plans are less common among hospitals (89%) than in other industries (92%).
• Over a third of all annual incentive plans paid out awards to eligible employees
• Long-term incentive compensation plans were less common that annual incentives.
• Eligibility for long-term plans is generally restricted to executives.

Of the CFOs who responded to the Hay study, 64.4% were eligible for annual bonuses; 90.4% of those executives received them. The low was 0.8% of base salary; the high was 75%. The average was 17.6%.

For heads of patient accounting/business office, 30.1% were eligible for annual bonuses. Of that group, 79% received them. The low was 0.7% of base salary; the high was 20%. The average was 7.8%.

Trends for the long-term include a growing move to link rewards with nonfinancial and quality measures. Hay also reported an increasing formalization of eligibility, performance measures, and award size.

For more information, visit www.haygroup.com.

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