Using fixed financial triggers for incentive plans.

Abstract

Of course, some organizations are making no changes at all, because they don't believe that financial performance will justify paying even small awards. Healthcare organizations with executive incentive compensation plans need to review existing plans with their compensation committees. Merely leaving in place incentive plans developed prior to BBA may be doing a dis-service to the executive teams, the hospital, and the board. Using the incentive plan to focus management's attention on a few key areas is still relevant, maybe more so than ever. A complete review of incentive plans--participation, opportunity levels, financial triggers, performance measures, and other factors--is an important element of total executive compensation, probably now more than ever.