Hospitals furloughed and let go of hundreds of employees during the height of the pandemic in 2020, when forced shutdowns in elective surgeries decimated hospital revenues. But that didn’t stop some hospital executives from receiving compensation increases, new filings show.
The data provide a window into the competitive salaries executives received amid a tight c-suite labor market and as they steered hospitals through the first year of a global pandemic. Overall, pay increases trended more modestly than they had in years past, with fewer hospital executives receiving double-digit pay increases and several reporting reductions.
Steve Sullivan, managing director (retired) at executive compensation consultancy Pearl Meyer, said the leadership labor market is extremely tight. Some estimates are that the cost of replacing a chief executive and the lost business related to that turnover could be three to five times the annual cost of the executive’s pay.
Paying retention bonuses and making discretionary incentive awards “is the cost of doing business,” Sullivan said. “It’s not whether it’s right or wrong. It’s what they have to do.”