Compensation Issues

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CEO and CFO pay increases fueled by pressures of consumer-driven healthcare market: 5 findings

Both CFOs and CEOs of U.S. publicly traded companies saw their compensation increase at a slower rate in 2015 than the year prior, with finance chiefs faring slightly better overall than chief executives, according to a study from accounting and consulting organization BDO USA.

The study, in its fifth edition, examines CEO and CFO compensation trends in publicly traded companies with annual revenues ranging from $25 million to $1 billion in eight industries, including healthcare.

Here are five findings from the study:

1. Across all industries, CEO total compensation increased 0.7 percent this year compared to a more robust 12.6 percent last year.

2. Across all industries, CFO total compensation increased 4.9 percent this year, down from growth of 8.2 percent the year prior.

3. "There is clearly a sense of cautious optimism when it comes to the economy given its skittish performance, swinging between extreme peaks and valleys," said Randy Ramirez, a senior director in the Global Employer Practice at BDO. "Because of this, CEO and CFO compensation is rising at a more measured pace when compared to last year."

4. When it comes to change in total direct compensation, healthcare is at the top of all industries surveyed for both CEOs and CFOs. The study revealed compensation for healthcare CEOs increased 55 percent last year, while CFO pay jumped 34 percent.

5. "Spurring this increase could be the pressure healthcare organizations face to retain strong executive leadership who can help them not only survive, but flourish in the new consumer-driven healthcare paradigm," according to the study. "To secure this type of executive talent, healthcare organizations are being forced to offer more competitive compensation packages."

More articles on executive compensation:

Healthcare executive pay: 6 notes
Median CEO pay soared in 2014
14 findings on CFO compensation

 

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