Top line results announced for the Yaffe & Company, Inc.
2007 Health Care Executive Compensation Survey

Yaffe & Company, Inc. conducted its annual Health Care survey on Executive Compensation in January 2007. Approximately 300 survey responses were received from Hospitals and Systems located in the eastern, northeast and southeast sections of the United States. The top line results are outlined below for the Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO) and the Chief Medical Officer (CMO) positions:

Executive Salary Increases and Supplemental Executive Retirement Programs

Position

% with a base salary increase

Average base salary increase

% with a total pay increase

% with a SERP

CEO

84%

6.75%

78%

46%

COO

82%

4.95%

79%

34%

CFO

83%

5.45%

81%

33%

CMO

75%

5.34%

77%

31%

 

Each of the four (4) Executive positions will now be examined in a little more detail.

Chief Executive Officer

  • 84% of the CEOs received a base salary increase and 11% continued with the same base salary. This is very comparable to last year's results.

  • Almost 50% of the CEO base salary increase was in the 5%-9% range. This is higher than last year and resulted in a slightly higher overall average increase. 8% of the CEOs received an increase of 15% or more.

  • 75% of the CEOs had an opportunity to earn incentives, which is similar to last year.

  • 78% of the CEOs received a total pay increase, with approximately 33% receiving a 5% to 9% total increase and almost 30% receiving a total increase of 10% or more. Over 7% continued with the same total pay.

  • SERP participation remained very similar to last year at 46%.


Chief Operating Officer

  • 82% of the COOs received a base salary increase and 14% continued with the same base salary. This is comparable to last year's results.

  • About 37% of the COO base salary increase was in the 1%-4% range, with another 33% in the 5% - 9% range. 4% of the COOs received an increase of 15% or more.

  • 72% of the COOs had an opportunity to earn incentives, which is similar to last year.

  • 79% of the COOs received a total pay increase, with approximately 1/3 receiving a 5% to 9% total increase and almost 24% receiving a total increase of 10% or more. Only 7% continued with the same total pay.

  • SERP participation remained very similar to last year at 34%.

 

Chief Financial Officer

  • 83% of the CFOs received a base salary increase and 10% continued with the same base salary. This is very comparable to last year's results.

  • 34% of the CFO base salary increase was in the 1%-4% range, with another 31% in the 5% - 9% range. Only 5% received an increase of 15% or more.

  • 69% of the CFOs had an opportunity to earn incentives, which is similar to last year.

  • 81% of the CFOs received a total pay increase with approximately 1/3 receiving a 1% to 4% total increase and over 25% receiving a total increase of 10% or more. Only 8% continued with the same total pay.

  • SERP participation remained very similar to last year at 33%.


Chief Medical Officer

  • 75% of the CMOs received a base salary increase and 18% continued with the same base salary.

  • Over 40% of the CMO base salary increase was in the 1%-4% range. 14% 0f the CMOs received an increase of 10% or more.

  • 72% of the CMOs had an opportunity to earn incentives.

  • 77% of the CMOs received a total pay increase with approximately 1/3 receiving a 1% to 4% total increase and 27% receiving a total increase of 10% or more. Over 13% continued with the same total pay.

  • SERP participation remained very similar to last year at 31%.

It should be noted that for all positions, there were some instances where base salary and total pay declined. Decreases in salary were typically the result of a new individual being assigned to that executive position or the revamping of the compensation structure.

Overall Trends

Both base salary and overall pay are increasing for all executive positions at a pace that is higher than the rate of inflation. The majority of the executives have a variable pay component tied to an incentive or performance plan and the use of a Supplemental Executive Retirement Program continues to be an important benefit for a substantial number of executives. The trustees should continue to review the overall pay and benefit structure for the executives at their institution to ensure it effectively rewards the executive for meeting/exceeding the goals of the organization. Executive compensation needs to be based on appropriate data that helps determine comparability and documents the basis for its structure, thus trustees are conferred a "rebuttable presumption" of the reasonableness of the compensation. Yaffe & Company, Inc. is here is to help trustees with their Executive Compensation needs. Our unique process complies with all IRS requirements for independence, accountability, disclosure and documentation. Consequently, executives are compensated competitively and trustees have a process that meets public scrutiny while feeling secure in knowing that all regulatory requirements have been meet. For more information, or to request the complete report on the 2007 Health Care Executive Compensation survey, please contact Yaffe & Company, Inc. on 410.494.4100.

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