Nonprofit Newswire | Executive Compensation in Nonprofit Hospitals—Special Circumstances?

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July 19, 2010; Source: Health Leaders Media | We have heard a lot over the years about the need to set nonprofit executive compensation levels high to attract the right talent and in a lot of cases we are less than convinced. This article, however, lays out a growing quandary at nonprofit hospitals: As competition grows for leaders in this complex field, there is acute sensitivity to salary increases at nonprofit hospitals, so how will hospitals retain talented execs?

The anticipated churn is not yet occurring, however. The article cites the Hays Group’s 2010 compensation study for integrated health care systems and hospitals which shows that turnover at the executive level decreased to 5.2 percent in 2009-2010 from 14 percent in 2008-2009, despite the fact that the proportion of CEOs receiving at least a 6 percent increase in base salary has dropped to 22 percent—its lowest level in 10 years. This caution did not end with the “C” suite. Pay hikes for other positions were at 2.5 percent compared to the previous year’s 4 percent.—Ruth McCambridge