The Utilization of Incentive Payments in Executive Compensation
Most organizations now include the opportunity for incentive payments for their CEO. According to a 2018 study, 76% of hospitals pay their CEO a bonus, with the average bonus being equal to 33.2% of the CEO’s base salary.1 In most organizations, the value of the incentive continues to increase, both in real dollar terms and as a percent of base salary.While the metrics and corresponding baselines that ultimately determine a CEO’s bonus should tie to their organization’s individual needs and goals, ACHE reports the metrics that are most frequently linked to CEO incentive payments (see figure below).2
These overarching categories are exceedingly prevalent across the country, with many executives’ incentives based on specific measures that fall within them. The anticipation is that most organizations will continue to utilize incentive payments, and their value will be driven by these factors.
Contact Coker Group today to learn more about adding incentives to your organization's executive compensation plans. To learn more about pay structures for healthcare C-Suite employees, read our latest white paper, written by Coker Group Senior Vice President Aimee Greeter, Top 5 Current Trends in Healthcare Executives' Compensation.
- PR Web Release, “Average Bonus for a Hospital CEO is 33.2% of Base Salary.” April 10, 2018. http://www.prweb.com/releases/2018/04/prweb15398416.htm. July 22, 2019.
- White Paper, “Chief Executive Employment Contracts and Performance Evaluations: Current Practices,” American College of Healthcare Executives. Summer 2017. https://www.ache.org/-/media/ache/learning-center/research/ceosurveys/20170829wpceocontractsfinal.pdf?la=en&hash=3707D7EB80E354C12FDAC200D66EAD4471966D9C. July 22, 2019.
