SullivanCotter Reports on Rising Healthcare Executive Compensation Amid Talent Competition
SullivanCotter, a leading consulting firm specializing in total rewards programs and workforce solutions for healthcare, has published its 2024 Health Care Management and Executive Compensation Survey. This comprehensive report includes data from nearly 3,300 organizations and over 45,000 executives, making it a key resource for compensation benchmarking in the industry.
Key Findings on Salaries
The survey reveals a 4.6% year-over-year increase in median base salaries for healthcare executives, consistent with the 4.4% growth recorded in 2023. Notably, executives at the system level saw higher median increases (5.2%) compared to those at subsidiary hospitals (3.5%).
Bruce Greenblatt, Executive Workforce Practice Leader at SullivanCotter, highlighted the growing complexity of healthcare operations and a shrinking pool of qualified talent, which is driving up compensation. Key positions experiencing significant salary increases include:
- Top Leadership Roles: CEO, Chief Administrative Officer
- IT and Strategy Roles: Chief Strategy Officer, Top Information Security Executive
- Business Operations: Top Quality Executive, Top Professional Services Executive
- Regulatory/Compliance: Top Compliance Executive, Top Legal Services Executive
Despite some improvements in operating margins, health systems face challenges such as rising labor costs, inflation, and cybersecurity threats, which continue to impact executive talent acquisition.
Incentive Compensation Trends
Incentive awards for 2023 improved compared to 2022, leading to higher total cash compensation (TCC). Median TCC for system-level executives rose by 8.3%, while base salaries increased by 5.2%. Incentive payouts were closer to target for 2023, with no major changes in incentive plan prevalence or award opportunities.
Tom Pavlik, Managing Principal at SullivanCotter, noted that many organizations revised their annual incentive plans for 2024, emphasizing financial sustainability and system-wide performance metrics to adapt to the post-COVID landscape.
Strategic Considerations for the Future
Organizations are advised to prepare for a competitive talent market by:
- Offering competitive compensation packages to attract external recruits and adjust salaries for critical current leaders.
- Reviewing executive compensation programs to align pay with role impact and performance, ensuring relevance to peer groups.
- Prioritizing talent strategies to retain high-risk executives and define clear leadership development processes.
- Optimizing leadership structures to enhance efficiency and align job titles and career pathways with performance and reward systems.
As the healthcare landscape continues to evolve, addressing these considerations will be crucial for organizations aiming to thrive in a competitive environment.
About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.
