Here's How Much More Executives of Publicly Traded Hospitals Made Than Average Workers Last Year

FierceHealthcare reviewed U.S. Securities and Exchange Commission filings for public healthcare companies that showed just how much the executives of the largest public health system executives made compared to their average worker, as reported under SEC rules.

Of course, their actual compensation may be much higher. As Axios reporter Bob Herman noted in a look at healthcare executives, including drug company and insurance company chiefs, plenty of them made more than they've reported in their proxies because of the actual value of their stock options and awards.

However, “you can’t look at executive compensation in a bubble because there are many factors that influence the way compensation is delivered,” cautioned Steven Sullivan, managing director in the Houston office of Pearl Meyer, a national executive compensation consulting firm.

In general, executive compensation is driven by the size of the business as measured by their revenue, in addition to their executive compensation philosophy, which is shaped by a comparison of business and performance against a composite of their peer organizations.

“All of those things are factors that get you to this bottom line,” Sullivan said.

Sullivan also pointed to differing approaches between Universal Health Services and HCA Holdings in the way they incentivize their top talent. For example, Johnson’s compensation offers a pretty even split between stock awards and option awards at $5.4 million and $5.2 million, respectively.

“Then look at Universal. They’re putting more of the emphasis on options,” Sullivan said. Miller’s compensation package offers $2 million in stock awards and $16 million in option awards—a much more leveraged package. “Options have zero value on day one. But if Alan Miller and his team are able to continue improving the factors that drive share value, the value of the options is potentially a lot more than the stock awards,” Sullivan said.