Healthcare executive compensation up 8 percent in 2014, study finds

Average healthcare director compensation grew to $176,749 in fiscal year 2014, an 8 percent increase from $163,069 in fiscal year 2013, according to a study released Nov. 17 by the accounting and consulting firm BDO.

Healthcare executives made the third largest percentage gains in compensation across eight different industries, after those leading energy companies and in the retail sector, according to the study.

Energy company directors brought in an average of $192,509, a 14 percent increase; and retail directors received a compensation of $132,123, an 11 percent increase.

[Also: Healthcare CEO, CFO pay gap wider in 2014, though execs see largest raises, report says]

The BDO 600: 2015 Survey of Board Compensation Practices of 600 Mid-Market Public Companies study examined director compensation trends in energy, healthcare, manufacturing, real estate, retail, technology, and the banking and financial services industries through proxy statements filed between May 15, 2014 and May 15, 2015.

The non-banking financial services sector was the only one to see a decline in director compensation, the study found.

The highest paid were in technology, with compensation of $205,294; followed by the energy industry, at $192,509; healthcare at $176,749; real estate at $153,587; manufacturing at $133,696; retail at $132,123; financial services, non-banking at $120,453; and financial services, banking, at $69,092.

Director compensation at smaller companies declined 2 percent in 2014, after an increase of 15 percent from 2012 to 2013. The smaller companies represent those with revenue of $25 to $325 million.

At the mid-sized, companies, those with revenues of $325 to $650 million, and at largest companies, with revenues of $650 million to $1 billion, board compensation increased by 4 and 7 percent, respectively. 

Stock awards continue to make the bulk of the compensation package, making up close to half, 47 percent, of all board compensation packages in 2014, the study said.

The second largest portion was retainers and fees, which made up 39 percent of the compensation package.

The survey found a slight decline in stock options, which decreased to 8 percent of the compensation package from 10 percent in 2013.

"Compensation packages are increasingly reflective of the growing pressure on boards to be more accountable for the performance of the organization as a whole," said Randy Ramirez, a senior director in the Global Employer Services Practice at BDO. "Mid-size companies are also following the trend toward eliminating meeting fees for board members and moving towards an all-retainer approach. This is in an effort to realize the notion of role equalization, versus the prior practice of weighting some roles heavier and compensating them at a premium rate, and communicate that all roles are important and meetings are mandatory."

Twitter: @SusanJMorse