Report: Healthcare CEO pay balloons to $2.6B, quality of care not a factor in bonuses

May 17, 2019 By Fink Densford Leave a Comment

Healthcare chief execs at 177 top companies collectively saw their compensation grow to $2.6 billion last year while quality of care and improvements to healthcare spending remained at most a marginal factor to their pay, according to an Axios analysis.

Despite a focus on pharmaceutical CEOs, medical device company chief execs were five of the top ten highest paid CEOs on the list, which was calculated by using actual realized gains of stock options and awards listed in annual proxy disclosures filed with the SEC.

“The pay packages reveal the health care system’s real incentives: finding ways to boost revenue and stock value by raising prices, filling more hospital beds, and selling more drugs and devices,” Axios wrote in its report.

And even though the industry as a whole claims to be focused on value-based care, quality of care was either not a factor or a marginal one in all CEO bonuses, according to the report.

The median pay of a healthcare CEO in 2018 was $7.7 million, with 14 chief execs taking home more than $46 million per year, according to Axios.

To compare, the median household income in the U.S. last year as measured in June was $62,175, according to a report from Sentier Research.

Sunnyvale, Calif.-based Intuitive Surgical‘s (NSDQ:ISRG) Gary Guthart came in as the third most highly paid CEO on the list, netting a total of approximately $99.2 million in compensation during 2018, approximately 1,596 times greater than the median household in the U.S. last year.

Even in Sunnyvale, with a median household income of $118,314, as reported for 2017 by DataUsa, Guthart brought in pay approximately 839 times greater than the average worker.

Thermo Fisher Scientific‘s (NYSE:TMO) CEO Marc Casper received approximately $85.5 million sitting in the corner office last year, while Align Technology‘s (NSDQ:ALGN) Joe Hogan collected approximately $69.8 million, according to Axios.

Rounding out the top ten list are Masimo‘s (NSDQ:MASI) Joe Kiani who received approximately $61.3 million and Hill-Rom Holdings (NYSE:HRC) CEO Jon Greisch who took home a meager $59.1 million, 950 times greater than the median household income last year.

Johnson & Johnson (NYSE:JNJ), Edwards Lifesciences (NYSE:EW), PerkinElmer (NYSE:PKI), Abbott (NYSE:ABT) and Danaher‘s (NYSE:DHR) CEOs were also in the top 25 most highly paid chief execs in healthcare, with the lowest paid still making more than 400 times what the average U.S. worker took home last year.

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