Dive Brief:
- Healthcare executives saw pay increases from 2013 to 2014 that brought CEO compensation from $2,552,529 to $3,951,907 and CFO compensation from $1,049,741 to $1,402,621, according to a new report by accounting firm BDO USA.
- Those increases in total direct compensation of 55% for healthcare CEOs and 34% for healthcare CFOs outpaced raises for executives in all the other industries surveyed: Energy, manufacturing, real estate, retail, technology, banking, and non-banking financial services.
- The report finds the pay gap between healthcare CEOs and CFOs to be the widest of the surveyed industries, with CFO pay as a percentage of CEO pay at 35% compared to a range of 36% to 43% for the other industries.
Dive Insight:
The report suggests the high pay increases for healthcare executives may be attributed to pressure faced by healthcare organizations to attract and retain those who can forge a successful path in the consumer-driven healthcare paradigm. "To secure this type of executive talent, healthcare organizations are being forced to offer more competitive compensation packages," the report states.
The study examined companies with annual revenues that ranged from $25 million to $1 billion in eight industries, and included proxy statements filed between May 15, 2014, and May 15, 2015.
"There is clearly a sense of cautious optimism when it comes to the economy given its skittish performance, swinging between extreme peaks and valleys,” Randy Ramirez, a senior director in the Global Employer Practice at BDO, stated about the report. “Because of this, CEO and CFO compensation is rising at a more measured pace when compared to last year.”