Compensation Issues

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6 statistics on health system executive compensation through long-term incentive plans

For-profit health systems and larger nonprofit health systems are increasingly using long-term incentive plans, which give executives and managers stock-based compensation for accomplishing strategic objectives, according to a SullivanCotter report.

SullivanCotter gathered data from more than 2,000 organizations, representing roughly 30,000 executives and managers across 280 jobs.

Here are six statistics on how health systems are using long-term incentive plans.

1. Long-term incentive plans continue to be more prevalent among for-profit and larger nonprofit health systems, with 25 percent of health systems and 9 percent of hospitals implementing these plans.

2. The prevalence of long-term incentive plans is growing at larger organizations, with over half (51 percent) of organizations with net revenues of $3 billion or more and 32 percent of organizations with net revenues of $1 billon or more using these plans.

3. The majority (72 percent) of health systems use two to five performance measures to determine long-term incentive plans per cycle, with an average of three.

4. Eighty-two percent of health systems paid executives and managers a long-term incentive plan reward for the most recently completed cycle.

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