Once unheard of, eight-figure salaries may soon be the "new normal" for senior healthcare executives, according to Crain's New York Business.
In 2012, the year after he retired as president and chairman of Barnabas Health, New Jersey's largest health system, Ronald Del Mauro made nearly $22 million, according to the article, while Atlantic Health President and Chief Executive Joseph Trunfio made $10 million.
These compensation levels--the highest to ever appear on Crain's ranking of highest-paid hospital execs--are part of a trend among large providers: offering long-term incentive plans to executives to encourage them to remain with the system. Only 14 percent of U.S. systems offered such plans in 2006, but the number increased to nearly 40 percent in 2013, according to the 2013 Hay Group Healthcare Compensation Study.
"To survive in this new environment, many health systems are making big investments in the acquisition of physician practices and technologies to support their long-term strategy," Hay Group Vice President Ron Seifert said in a statement last November.
Del Mauro's compensation package included $2 million from vested benefits in a long-term incentive plan, $14 million from his supplemental executive retirement benefits, $4.5 million from a split-dollar life insurance policy and an $870,000 performance bonus, according to the article. The size of Del Mauro's package reflects the length of his tenure, according to a Barnabas Health spokeswoman. "His retirement package is a function of over four decades of service ... and reflects his exceptional legacy," she told Crain's.
Executive salaries are on the rise for smaller providers as well, according to Crain's. The executive pay rankings include leaders at several community hospitals, including Westchester County, New York's Phelps Memorial Hospital, White Plains Hospital and Lawrence Hospital.
The Service Employees International Union is pushing to cap California non-profit hospital CEO compensation at $450,000, the President of the United States' salary, FierceHealthcare previously reported.