This is an open letter to the gentlemanly Paul Levy, the exceedingly plain-spoken--but come on, doubtlessly Type-A personality that all CEOs are--and head of Beth Israel Deaconess Medical Center.
Paul, as my readers know, you recently asked on your blog whether your million dollar-ish salary and benefits package was too high. Generally speaking, you expressed the question in terms of whether your contributions, such as improved operations and increased income, made sense relative to the number. And you asked readers to tell you what they think, a bold move under just about any reading of the situation, and one for which I congratulate you.
Given my post here at FierceHealthcare, I thought it best that I answer you here, to give our readers yet another chance to discuss the sometimes explosive issue of CEO pay, especially within non-profit organizations.
Here's what I think. In short, by any current definition of CEO performance popular within the business community generally, you're a steal at a $650,000 base, particularly given the scope of the operation you command. And by meeting your numbers, your incentive bonus is a shoo-in as well.
Still, by another standard, your salary gives me pause, in that I can see no way in which the many smart, dedicated people who work for you (other than some other senior executives) are going to get any input into the metrics used to determine whether you deserve the bonuses and salary.
This suggests to me that as an institution, BIDMC still values "deciders" like yourself more than it does the nurses, lab techs, medical records managers and such less than it does executive power. And that ultimately, it sees the success of your hospital from the top down rather than the bottom up.
Now, let me be fair and note that I really do sense that you care about all of your people, to the extent that any human being can care about 8,000 employees(!). I strongly sense, as well, that your blog reveals a genuine interest in acknowledging the contributions of everyone you know to be doing an excellent job. But still...
You see, here's the thing that bothers me, Paul. If I said that your employees, rather than your board, should get to vote on your salary and incentive targets, would that make you uncomfortable (even assuming that they were required to stick to guidelines similar to your existing salary)? If it does, then perhaps it ought to make you and other CEOs question how you determine what results your organization ought to be achieving on the day-to-day level. Sure, I imagine your targets are rolled up from feedback at many mid-manager meetings and the like, but do they reflect the real worker perception? Let's say I doubt it, and leave it at that.
In other words, I'm not just suggesting that it'd be nice if "lower on the totem pole" staff members got more bonuses and higher salaries. I'm saying that I'd be really excited if your salary was determined by the people who can see what's really happening out there, not just clubby board members, however well intended, who live in a cloud of wealth and privilege your average floater nurse will never see. Why not give that nurse a chance to not only suggest what you should be paid, but on what basis? It might be an interesting exercise. - Anne