OHA proposes voluntary extension of CEO wage freeze

On the day Ontario’s 2011 “sunshine” list is being released the Ontario Hospital Association has called for a voluntary three-year extension of the two-year legislated wage freeze for executives.

The OHA says such a freeze would save $47 million over five years, averaging slightly less than $10 million a year on a health budget approaching $50 billion.

However, this may not necessarily mean all those CEOs and VPs will see their compensation packages unchanged.

The OHA is also calling for compensation to be based on a new formula that is based on a “complex matrix that includes budget size, research and teaching intensity, patient volumes and other factors.”

Using a framework recommended by a review panel chaired by John Manley, President and CEO of the Canadian Council of Chief Executives, the OHA also wants hospital boards to tie 30 per cent of executive compensation to “publicly-articulated provincial and organizational goals.”

The OHA is asking its members to review organization policies regarding car allowances and without-cause severance arrangements.

In the panel report released last November, mid-size hospitals were considered to have the most inconsistent compensation levels compared to small or large hospital corporations.

Today’s release makes no mention of the panel’s recommendation that CEO salaries be tied to private sector executive compensation levels. Private sector executive compensation has been rising quickly following the 2008 recession.

The November panel report also suggested that there were few public sector comparators, the closest being university presidents. The median compensation for a hospital CEO in 2010 was $266,000, the median pay of a university president slightly higher.  The panel did not compare hospital CEOs to Ontario’s deputy ministers.

During the fall election the NDP recommended a cap on hospital CEO salaries set at twice the Premier’s salary, which is presently $209,000. According to the OHA, 33 hospital CEOs make more than $418,000.

Hospitals posted executive contracts on their websites in January after legislative changes made them subject to freedom of information requests.

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