The average compensation for a healthcare board director grew to $137,601 in 2010, up 13.3 percent from $121,743 in 2009, according to a study by accounting and consulting firm BDO USA.
Released last week, the study, "The BDO 600: 2011 Survey of Board Compensation Practices of 600 Mid-Market Public Companies," examined at publicly traded companies with annual revenues of $25 million to $1 billion in various industries. Healthcare board compensation saw the highest gains, followed by other industries in order of median change increases: energy, retail, technology, real estate, manufacturing, banking financial services, and nonbanking financial services.
In larger healthcare companies estimated at $650 million to $1 billion, board directors' annual compensation soared to $205,576, substantially higher than any other industry group.
"The complexity of doing business in the healthcare industry has substantially increased in the last two years," states the press release. "With systemic changes affecting everything from the composition of private practice and integrated system care to regulatory changes, it's no wonder that healthcare companies have significantly increased full-value and stock option grants to both attract and retain the most qualified directors."
In addition, companies are increasingly shifting from cash compensation for equity based on pay for performance, according to BDO Director in the Compensation and Benefits Practice Randy Ramirez in a press release.
With many hospitals across the country facing budget cuts and layoffs, executive pay often comes under fire with the public scrutinizing generous paychecks of board members. In response, executives often contend that finding qualified, experienced leaders requires appropriate compensation.
- read a summary of the results