Executive pay skyrockets for 'investment in leadership'

Raking in more than $1 million in combined base pay, two University of Michigan Health System executives received the highest salaries this year out of all U-M employees, according to 2011 pay statistics released yesterday.

Douglas Strong, the CEO of U-M hospitals and health centers saw his base pay jump $12,000 to $612,000 in 2011, according to AnnArbor.com. Meanwhile, Executive Vice President for Medical Affairs Ora Pescovitz saw her compensation rise more than 2 percent in 2010. This year's $739,025 base pay bumped her to the top of the list.

Pescovitz and Strong received $100,000 and $60,000 in annual deferred compensation, respectively.

Both U-M Health System execs guided the academic health system through a $754 million construction project and months of contract disputes with nurses, AnnArbor.com notes.

In light of increased scrutiny on executive paychecks amid escalating healthcare costs, the health system defended its rising compensation as an "investment in our leadership, faculty and staff," Laurita Thomas, associate vice president for human resources, told AnnArbor.com.

But while most top administrators experienced a 2.7 percent bump in salary, the university saw a $54 million drop in state funding and U-M students saw tuition increase 6.7 percent, the article notes.

U-M Health System's hefty pay packages come as no surprise, given the top earner across all industries was in healthcare, according to a report by research group GMI Ratings. The CEO of healthcare company McKesson Corp. earned the No. 1 spot with nearly $145.3 million in compensation in 2010.

To learn more:
- read the AnnArbor.com article