CEO Incentive Pay Gets a Makeover

Philip Betbeze, for HealthLeaders Media , September 20, 2013

"This way of evaluating senior leaders allows boards to set long term goals so that if they execute them, they'll have a lot of dollars they don't want to leave [by moving on to a new job]," says Chastain.

With consolidation increasing, he says boards are becoming more and more savvy about evaluating their leadership. They don't just defer to the executive's judgment and perceived expertise anymore.

Chastain relates a story about a health system with about $3 billion in net annual revenue that engaged him in an executive search. The chair of the finance committee, who serves on several other boards, told him there's not a lot of difference in terms of board focus between the health system board and the ones he serves on in other industries.

"I used to be on a hospital board," says Chastain. "Historically, the discussions were around which surgeon was upset about his or her block time," he says. "Now they are having discussions around quality, and whether to buy, sell, build, or merge. This is corporate board stuff."

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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3 comments on "CEO Incentive Pay Gets a Makeover"

Edward Reed (9/20/2013 at 2:13 PM)
The idea of an BONUS is appalling in this health care atmosphere. Everyone is expected to sacrifice (patients and staff) except the ones who can do with less and not sacrifice anything. A simple definition of Bonus is>something in addtion to what is expected. Why should a CEO/CFO expect something is addition to what is expected. They are being payed like everyone else. They simply are doing what they are hired for. Like the RN, LPN, CNA and other health care workers. I know>>they think they deserve it!!!

bettynoyes (9/20/2013 at 1:46 PM)
I see tremendous ramification of this with the managers ability to lead each department. That skill set is often lacking

bob sigmond (9/20/2013 at 1:25 PM)
How about providing other incentives, instead of or beyond financial incentives? Like more time off for further study, support for greater impact and involvement in local, state and national health policy, etc. Some of the financial incentives are becoming embarrassing




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