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Long-Term Incentive Plans for Hospital CEOs More Common Since 2001

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From 2001 to 2011, the prevalence of long-term incentive plans for non-profit hospital CEOs increased from 39 percent of organizations to 45 percent, according to a report from healthcare compensation firm Integrated Healthcare Strategies.

James Guthrie, senior consultant of executive compensation and governance at IHS, analyzed 62 non-profit health systems with average net operating revenue of $2.2 billion in 2011. The modest increase of long-term incentive plans over that decade span was due in part to 16 percent of the sample organizations adding a long-term plan and 10 percent eliminating their plan.

Organizations may eliminate a long-term incentive plan for CEOs because they are overly complex and may be ineffective in measuring goals over a multi-year performance cycle, according to the report.

Average long-term incentive opportunities for hospital CEOs in the sample also went from 20 percent of salary to 30 percent in that 10-year span.

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