Yancopoulos' compensation easily surpassed that of the most richly rewarded executives in healthcare's other sectors. The jackpot increased his total compensation by a multiple of seven compared with the $10 million he received the year before.
Healthcare chief executives at for-profit firms did well across-the-board in 2012. Drugmakers led the parade, garnering 14 of the top 25 spots among highest-paid executives with a median increase in compensation of 16% for 13 executives. These gains came even though the latest reports showed spending on pharmaceuticals declined 3.5% last year to $325.8 billion, the first decline in decades as fewer patients visited doctors and hospitals and a number of patents on best-selling medicines expired, according to the IMS Institute for Healthcare Informatics.
But CEOs and top officials in other segments of the healthcare industry did well, too, even as their firms have been under unprecedented pressures to cut costs and become more efficient. Sluggish demand strained operations at hospitals, in particular, that are grappling with recent and proposed Medicare cuts from healthcare reform and federal budget negotiations. Yet four top hospital chain executives ranked among the nation's top paid executives, with HCA employing three of the four highest-paid hospital executives. The fourth, Community Health Systems' Wayne Smith, was the only one to see his total compensation decline last year.
Hospital giant HCA awarded its chief executive, Richard Bracken, total compensation of $46.4 million, up from $5.7 million in 2011. That made him the top-paid hospital executive in the U.S. Bracken's pay boost largely stemmed from roughly $22 million from distributions paid on vested stock options in 2012 and $11.8 million in stock options and so-called stock appreciation rights, which are payments made for the difference in stock price during a set time period.
Kent Thiry, the chairman and CEO for dialysis provider DaVita HealthCare Partners, took home $26.8 million last year even as Medicare moved to a bundled-payment system designed to cut costs. Thiry saw a roughly 50% increase in compensation, largely driven by about $8 million in restricted stock awards and another $1.25 million incentive payout. DaVita, which operates the nation's largest chain of dialysis clinics, last November acquired HealthCare Partners, a medical group and physician network company. Skip Thurman, a spokesman for DaVita, said in an e-mail that patient outcomes factor into compensation for the company's chief executive.