When it comes to incentive compensation for C-suite executives, many senior living and care organizations are turning to consultants and other sources to create competitive packages, according to the results of the latest Ziegler CFO Hotline survey.
The specialty investment bank surveyed leaders from more than 240 long-term care organizations last month for insights into how they establish compensation deals for C-suite execs, including company CEOs.
Most respondents (84%) said that their organizations evaluate incentive offerings annually, whereas 12% said they review them bi-annually.
When it comes to leader evaluations and compensation reviews, 93% of organizations indicated that they are handled by a board of directors. Two-thirds (67%) of responding organizations said they only board-review the incentive compensation for the CEO, whereas 23% said they do so for all C-suite positions.
CEOs handle such responsibilities for the rest of the C-suite positions at 63% of organizations, followed by the board executive committee at 49% of organizations — in some organizations more than one entity conducts evaluations and compensation reviews. Less than half (42%) of respondents indicated they have a written plan for assessing C-suite incentive compensation.
Of the 43% of organizations that use a compensation consultant or other professional services firm as part of the CEO/C-suite compensation review, most said they used CliftonLarsonAllen. Most pay less than $10,000 for the consulting services, whereas 41% said they paid between $10,000 and $25,000, 11% paid between $25,000 and $40,000, and 3% said they paid more than $40,000.
Participating organizations identified a variety of sources used to establish compensation benchmarks for leaders. The two most common sources used were the LeadingAge Chief Executives of Multi-site Organizations Compensation Survey and the IRS Form 990 resource. Other sources included CompAnalyst Market Data, the Hospital & Healthcare Compensation Service, outside consultants, the Economic Research Institute and CliftonLarsonAllen.
Some responding organizations indicated that they developed competitive compensation benchmarks for the total cash compensation for their C-suite executives. Most targeted their benchmarks at the median level (39%), or between the median and 75th percentile (35%), whereas 21% said they set their compensation benchmark between the 75th and 90th percentile.
