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Health Insurance Executive Pay Rises, According to BDO Report

December 19, 2018

CHICAGO--(BUSINESS WIRE)--Dec 19, 2018--Health insurance CEO salaries have increased at an annual rate of 4 percent over the last 10 years, higher than the average budgeted employee salary merit increase of 3 percent, according to a new report from BDO USA, LLP. Total direct compensation for CEOs and COOs increased by an average annualized rate of 13 percent during that period, primarily due to long-term incentive plan payouts.

“As insurance premiums continue to rise, so does scrutiny around executive pay levels. Those overseeing executive compensation strategies must be able to justify pay practices to stakeholders, while keeping packages competitive to attract the right leaders,” said Judy Canavan, managing director and leader of BDO’s Compensation Surveys practice.

The 2018/2019 Health Insurance Executive Total Potential Remuneration Trends Report, which will be available in January, examines total potential remuneration trends for 10 of the top executive positions in health insurance organizations. The report analyzes and summarizes data from the last 10 years of the annual . This survey provides companies with valuable information about the industry, enabling effective benchmarking of compensation and benefits programs. The 2018 survey results were published in August.

Annual incentive (AI) plans were offered to executives at all companies. Net income remains the top performance measure of AI plans, but benefit cost containment and revenue growth have become more popular fiscal measures since 2013. Short-term incentives have also been emphasized more in executive pay plans in recent years.

“The rebalancing of the pay mix toward short-term incentives may be attributed to uncertainty over the direction of healthcare reform from 2013 to 2016, which led to shorter-term time horizons,” said Canavan.

The report highlights key remuneration trends over the last 10 years, including:

*Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.

About BDO’s 2018/2019 Health Insurance Executive Total Potential Remuneration Trends Report

The 2018/2019 Health Insurance Executive Total Potential Remuneration Trends Report highlights notable 10-year trends in total potential remuneration for executives, including salary, incentives, benefits, perquisites, supplemental executive retirement plans, and change of control and severance agreements. The data analyzed in the report represents more than 30 companies.

The Trends Report is based on our annual Executive Total Potential RemunerationTMCompensation, Benefits, and Perquisites Survey. The annual survey (the most recent published in August 2018) provides compensation data for 44 executive-level and board positions, gathered from 16 health insurance organizations.

For those interested in learning more about this report or our surveys, please contact Judy Canavan at 215-636-5635 or jcanavan@bdo.com.

About BDO’s Practice

BDO’s Global Employer Services practice consists of an experienced and dedicated team of professionals who are committed to assisting leadership and boards in developing strategies and compensation programs designed to attract, retain, and reward employee teams. Our services include designing and benchmarking compensation programs, including cash- and equity-based programs, board remuneration, compensation committee development, nonqualified and deferred compensation plans, advice on tax and accounting issues, and other related services. Our services are tailored and scalable and designed to fit the unique needs of public, private, and nonprofit clients of all sizes and across all industries, including multinational Fortune 500 companies.

About BDO

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, and advisory services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 550 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 73,800 people working out of 1,500 offices across 162 countries.

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.

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