The AHA's Umbdenstock, who ranks No. 2, earned just over $3.3 million in 2011. The payout was an increase of 88.4% from the prior year, one of the single largest increases among this year's top-paid executives.
About half that amount—nearly $1.5 million—was a one-time payout under Umbdenstock's retirement plan, AHA spokeswoman Elizabeth Lietz says. His performance bonus accounted for another $90,598. The AHA's revenue increased 4.8% in 2011.
Another hospital association executive also ranked among the highest paid with one of the biggest raises. Kenneth Raske, president and CEO of the Greater New York Hospital Association, earned total compensation of nearly $3.1 million, an increase of 89.9%. That included $662,175 for a yearly bonus and another $671,863 paid under a long-term incentive award, association spokesman Brian Conway says. The group's revenue rose about 3%.
PhRMA's president and CEO, John Castellani, received just over $2.3 million in total compensation to rank No. 4 on the 2011 list, of which nearly two-thirds was salary and $290,000, or roughly 13%, was incentive or bonus payouts.
Castellani's salary more than doubled from $565,456 in 2010. He joined the association that September, succeeding Tauzin. Castellani didn't receive bonus or incentive payments that year. As a result, his total compensation surged 308.9% in 2011. Revenue was largely flat.
“PhRMA complied with IRS requirements and reported the compensation of individual persons as required,” Matthew Bennett, senior vice president, says in a statement.
Chip Kahn, president and CEO of the Federation of American Hospitals, followed Castellani at No. 5 with compensation of $1.9 million.
The amount included a periodic retention bonus reported in Kahn's $545,036 bonus and incentive payouts in 2011, says Jeff Micklos, executive vice president and general counsel.
Kahn's bonus payouts are tied to performance goals, many associated with the organization's lobbying agenda and efforts to meet with members of Congress, Micklos says. The organization's revenue rose almost 6% in 2011.
Performance measures tied to progress on regulatory or legislative goals may be concrete, such as passage of a high-priority state law, Venable's Tenenbaum says. Others are not as easy to quantify but nonetheless important. Some performance incentives may be more operational, such as how closely spending remained within budget, or tied to membership recruitment and retention, he says. Aggressive executives may prefer more performance pay, which allows them to benefit when the organization thrives.
Not all executives enjoyed fast-rising payouts. Indeed, some saw compensation decline, occasionally sharply.
Steve Brenton, chief executive of the Wisconsin Hospital Association, saw his compensation fall 50.9% in 2011 to $609,247. The reason was deferred compensation paid in 2010 boosted the prior year's payout, says Mary Kay Grasmick, spokeswoman for the Wisconsin organization, which saw its revenue dip nearly 3% in 2011.
Lawrence McAndrews, the retired president and CEO of the National Association of Children's Hospitals and Related Institutions, saw his compensation drop 40.3% to $740,418. A spokeswoman says the organization could not comment on his payout.
Meanwhile, Craig Becker, head of the Tennessee Hospital Association, saw his compensation slide 4.7% in 2011. “The board takes into account the incumbent's tenure, experience and accomplishment of the goals as set and approved by the board,” spokeswoman Beth Atwood says in a statement on the association's compensation policy.
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