The healthcare industry saw the largest increases in executive pay out of all sectors, according to a Wall Street Journal and Hay Group CEO compensation survey, released yesterday.
Although healthcare CEOs saw the smallest pay increases out of all industries in 2010, the tides shifted last year, as healthcare executive compensation jumped 7.8 percent in 2011. Healthcare companies' net income rose 1.1 percent, while the industry saw a 9.8 percent one-year total shareholder return.
In general, industries across sectors pay their chief executives based on the companies' financial results and share prices with a strong emphasis on pay for performance, The Wall Street Journal reported.
"Our study showed that companies proceeded very carefully on both pay levels and pay design in 2011. Directors are taking proactive steps to ensure that their executive pay plans are aligned with shareholders' desired outcomes," Irv Becker, Hay Group national practice leader for executive compensation, said in a statement yesterday.
Healthcare execs also are seeing fatter checks, as healthcare becomes increasingly complex, the Coloradoan reported. The CEO of Community Health Systems in Tennessee, for example, has a total compensation package of $21.58 million, far above salaries in Northern Colorado.
However, shareholders of the acute care hospital operator yesterday voted against the pay plan. CEO Wayne T. Smith's pay rose 6 percent last year, while net income fell 28 percent and the company's shares lost more than half their value, according to the WSJ.
"[T]he question becomes how much is too much (in salaries)? It's a legitimate question to ask," Denise "DeDe" de Percin, executive director of the Colorado Consumer Health Initiative, told the Coloradoan.
For more information:
- here's the announcement
- see the WSJ article
- read the Coloradoan article
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