Compensation increased more rapidly among chief executives earning $1 million or more than among CEOs overall on the Modern Healthcare list. The median increase in total compensation for the $1 million-plus earners was 14%. In contrast, there was no increase in median compensation for the entire list from 2011 to 2012.
A number of state hospital association chief executives ranked high on the list, with five earning $1 million or more in 2012, including Parker, Raske, Carolyn Scanlan of the Hospital and Healthsystem Association of Pennsylvania, the California Hospital Association's C. Duane Dauner and the Tennessee Hospital Association's Craig Becker. A little farther down the list, Herb Kuhn of the Missouri Hospital Association, Douglas Leonard of the Indiana Hospital Association and James Castle of the Ohio Hospital Association earned between $750,000 and $1 million.
Raske of the Greater New York Hospital Association received a 41% bump in bonus pay in 2012, to $1.9 million. Of that bonus, $778,483 was a partial award for a long-term incentive plan.
GNYHA spokesman Brian Conway explained Raske's pay by saying the group is “an extraordinarily unique hospital association, with a for-profit business arm that serves tens of thousands of customers nationwide and is involved in billions of dollars in commerce.” Raske's compensation “reflects both the breadth and scope of GNYHA's activities and his decades of leadership and accomplishments.”
Dauner saw his base pay increase 22% to $931,854 and his incentive pay drop 25% to $413,560. Jennifer Newman, chief financial officer of the California Hospital Association, said that was attributable to a change in reporting.
Among those CEOs whose pay dropped in 2012, FAH's Kahn saw his compensation decline 9% to $1.75 million in 2012. That's in part because a retention incentive boosted his 2011 compensation. His 2012 pay also reflected his annual bonus of $334,248, which is a discretionary award based on the board's view of Kahn's performance, said Jeffrey Micklos, the federation's executive vice president of management and compliance and general counsel.
The AHA's Umbdenstock also saw his total pay drop in 2012. His base pay, however, increased 2% in line with the increase awarded all AHA employees, said John Evans, the AHA's senior vice president and CFO. Umbdenstock's bonus, which is tied to performance, climbed 2% to $92,411. Umbdenstock saw his deferred compensation and payouts listed as “other” on the IRS Form 990 decline 61% and 9%, respectively.
Jim Hinton, president and CEO of Presbyterian Healthcare Services in Albuquerque and the AHA chairman, said the AHA's incentive payouts are tied to performance measurements and targets that go beyond the organization's financial health, including its success in achieving legislative and regulatory goals and the satisfaction of its members with AHA's meetings and education.
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(This article has been updated with a correction. The article initially stated incorrectly that the Association of American Medical Colleges did not respond to an interview request. The AAMC did agree to provide an interview.)