Executive Placement Study

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1 Executive Placement Study Fall 2010 Demand for CEOs, C-suite leaders stays high in health care and education Despite the lagging economy, 21 percent of Witt/Kieffer s overall placements in 2009 were chief executive officers (CEOs). Demand for new presidents/ceos remained high among hospitals, health systems, physician groups and other healthrelated, not-for-profit organizations. Thirty-four (34) percent of the firm s executive placements in colleges, universities, medical schools and not-for-profit organizations were at the president/ceo or other C-suite level in Witt/Kieffer s annual executive placement study looks at executives recruited and placed by the firm for clients including hospitals and health systems, academic medical centers, insurance/managed care organizations, colleges and universities and other not-for-profit organizations. It profiles the firm s 336 health care and higher education placements in 2009 by organization, job type, prior position and compensation and benefits. CEO/president opportunities attract new talent Well over half 56 percent of presidents and CEOs placed on behalf of the firm s clients in 2009 stepped into their roles from non-ceo positions. Of these placements, 22 percent held the COO role prior to assuming the CEO role. Twenty-one (21) percent were vice presidents of operations/administration and another eight percent were responsible for specialty areas in roles such as chief academic officer, chief medical officer, clinical department head or chief development officer, respectively, before transitioning into the chief executive/presidential suite in Other executive transition highlights include: Chief Medical Officer 8% Chief Academic Officer 8% Consultant 15% Executives Transitioning Into CEO Roles Clinical Department Head 5% Other 21% COO 22% VP Ops/Administration 21% Fifty-seven (57) percent of the firm s CEO placements moved to an organization/institution of the same type (e.g. health system to health system); 43 percent moved to a different organization type (e.g. health system to association). Of 2009 health care CEO placements, 52 percent transitioned to smaller organizations (based on net patient revenue), 41 percent went to larger organizations and seven percent moved to same-size organizations. Twenty (20) percent of higher education placements moved into their current role from organizations outside of education, such as a consulting firm and faculty practice plan.

2 Health care, higher education organizations find diversity talent High expectations for diversity talent are also resulting in minority and women leaders in both health care and higher education. Eleven (11) percent of the firm s 2009 executive placements were minorities including African-Americans, Hispanics, Asian Americans and others. Thirty-five (35) percent of leaders placed were women. Forty-seven (47) percent of minority and 53 percent of women placements assumed C-suite roles including CEO, COO, CFO, CNO and others. Eighty-three (83) percent of candidate slates in 2009 included at least one diversity or female candidate. Minority and female executives received two of the top three compensation packages of all Witt/Kieffer placements in 2009: The highest base and total compensation package for a diversity placement belongs to a medical school president. The package includes a base salary of approximately $700,000 and moving expenses. A CEO of an academic medical center earned the highest base and total compensation package for a female leader in Her base salary is close to $1,000,000. Health care leaders dominate; rapid growth in other practices Sixty-nine (69) percent of the firm s 2009 placements at all levels were made on behalf of hospitals, health systems, physician groups, post-acute care organizations, managed care/insurance and other health-related organizations. Thirty-one (31) percent were placed in colleges, universities, medical schools and other not-for-profit organizations. Placements by Client Type Hospital and Health System 192 (57%) College/University/Medical School 84 (25%) Not-For-Profit 18 (5%) Post-Acute Care 13 (4%) Insurance 10 (3%) Physician Group/Clinic 9 (3%) Health-Related 7 (2%) Other 3 (1%) 2

3 Market drives search for experienced executives Growing complexity of and competition among health care, higher education and not-for-profit organizations prompted CEOs and other C-suite leaders to comprise 21 percent of the firm s total placements in CEOs/presidents and physician leaders topped the list as the firm s first and second most frequent placements. Incentive packages for experienced executives varied widely. The highest total compensation package paid to a CEO placement was in health care. A male CEO of a $650 million, 600+ bed teaching hospital earned the highest overall compensation package. His total compensation of $1.2 million included a 50 percent bonus, $50,000 sign-on bonus, supplemental executive retirement plan (SERP), moving expenses and two-year severance. Placements by Job Type Position Type Highest Bonus Percentage CEO/President 69 (21%) $1,000,000 $110,000 60% 30% MD 60 (18%) 1,000, ,000 50% 7% Academic Medicine 48 (14%) 1,000, ,000 38% 5% CFO 33 (10%) 470, ,000 40% 8% IT 30 (9%) 485, ,000 36% 10% CNO 25 (7%) 250, ,000 30% 10% Development/Foundation 22 (7%) 450, ,000 25% 5% COO 19 (6%) 475, ,000 33% 3% HR/Personnel 12 (4%) 335, ,000 45% 15% Managed Care 12 (4%) 550, ,000 50% 8% Marketing/Corporate Development/Planning 7 (2%) 330, ,000 25% 15% Bonus Lowest Bonus Percentage CEO Placements by Client Type Hospital 24 (35%) $1,000,000 $185,000 College/University/Medical School 10 (14%) 700, ,200 Health System 7 (10%) 700, ,000 Post-Acute Care 7 (10%) 445, ,000 Not-for-Profit 14 (20%) 425, ,000 Other 7 (10%) 550, ,000 3

4 Physician executives taking on new roles Physician alignment and clinical integration are fueling the demand for more physician leaders in hospitals, health systems, physician group practices and other organizations. Among physician executive placements in 2009, 28 percent were chief medical officers, another 28 percent were clinical department heads and 18 percent were CEOs. Most physician leaders 81 percent were recruited by hospitals, health systems and medical schools although they also assumed executive roles in other health-related organizations, as well as in not-for-profits and consulting firms. Physician Placements by Job Type Position Type Chief Medical Officer 17 (28%) $450,000 $175,000 Clinical Department Head 17 (28%) 650, ,000 CEO 11 (18%) 1,000, ,000 IT 7 (12%) 350, ,000 Physician Practice Management 5 (8%) 400, ,000 Other 3 (6%) 295, ,000 Physician Placements by Client Type Hospital 19 (32%) $1,000,000 $218,000 Health System 16 (27%) 700, ,000 College/University/Medical School 13 (22%) 700, ,000 Not-for-Profit 4 (7%) 425, ,000 Physician Group 3 (5%) 410, ,000 Other 5 (8%) 240, ,000 Senior physician executives no longer simply promote hospital or system administration strategy to physicians, according to the results of a national survey conducted by Witt/Kieffer in Today, they serve as a key member of the executive team, set the organization s future direction and shoulder responsibility for what may be the organization s single biggest challenge: physician alignment and integration. Positions largely unimaginable less than a decade ago Chief Medical Informatics Officer, Chief Clinical Integration Officer and President, Employed Physicians Group now supplement still common titles of Medical Director, Chief Medical Officer and Vice President, Medical Affairs. 4

5 New roles taking shape in academic medicine Academic medicine comprised 14 percent of the firm s total placements in 2009, ranking it as the third largest practice. While clinical department physician leaders continue to dominate, roles that include chief medical information officers and CEOs are now among the three most frequent. Placements in hospitals and health systems represented 58 percent of academic medicine placements. Academic Medicine Placements by Job Type Position Type Physician Department Head 10 (21%) $525,000 $225,000 IT 7 (15%) 360, ,000 President 5 (10%) 1,000, ,000 CFO 4 (8%) 470, ,000 COO 4 (8%) 475, ,000 Chief Nursing Officer 3 (6%) 245, ,000 Other 4 (8%) 275, ,000 Academic Medicine Placements by Client Type Hospital 17 (35%) Health System 11 (23%) Medical School 9 (19%) Health Science Center 6 (13%) Faculty Practice Plan 3 (6%) Cancer Center 1 (2%) Children s Hospital 1 (2%) 5

6 IT leaders continue to capture market s attention Health reform, clinical integration and EMR implementation created fierce demand for information technology executives in 2009, ranking the practice as the firm s fifth largest. Of the firm s CIO placements, 69 percent previously held the role. Those in non-cio roles include directors over clinical applications, enterprise applications and project management. A male CIO of a health system received the highest base compensation package for a Witt/Kieffer IT placement in 2009: $485,000. Adding a 36 percent bonus, moving expenses, a one-year contract and severance brought the total compensation package to approximately $660,000. Information Technology Placements by Job Type Job Type CIO 12 (34%) Applications 6 (29%) Informatics 5 (17%) CMIO 3 (9%) Technology 2 (6%) Business Intelligence 1 (3%) Physician Consultant 1 (3%) Information Technology Placements by Client Type Health System 14 (47%) $485,000 $128,000 Hospital 9 (30%) 360, ,000 Education 4 (13%) 309, ,000 Other 3 (10%) 200, ,000 6

7 Higher education/not-for-profit placements go to C-suite Thirty (30) percent of Witt/Kieffer s placements at all levels were in colleges, universities, medical schools and not-for-profit organizations, ranking the practice as the firm s second largest. C-suite positions including president, chief development officer, chief operating officer and chief financial officer accounted for 38 percent. College/University/Medical School Placements by Job Type Position Type Academic Dean 15 (18%) $275,000 $120,000 President 10 (12%) 700, ,200 Enrollment 10 (12%) 310, ,000 Chief Advancement Officer 9 (11%) 450, ,000 CAO/COO 7 (8%) 265, ,000 Clinical Department Head 7 (8%) 455, ,000 Other Fundraising 7 (8%) 376, ,000 Chief Business Officer 6 (7%) 309, ,000 Administrative Director 5 (6%) 270, ,000 IT 4 (5%) 309, ,000 Other 4 (5%) 300, ,500 Incentives reflect economic reality, moving expenses most common Moving expenses a clear indicator of recession pressures represented the most commonly cited perquisite, reported by 63 percent of Witt/Kieffer placements. Slightly more than half, 52 percent, reported receiving an incentive bonus. One-third, or 33 percent, of placements reported a sign-on bonus; 32 percent indicated they received a severance package. Only 28 percent of placements reported receiving a supplementary executive retirement plan (SERP). Perquisite Yes No Moving expenses 210 (63%) 90 (27%) 36 (11%) Bonus 174 (52%) 42 (13%) 120 (36%) Sign-on Bonus 112 (33%) 167 (50%) 57 (17%) Severance 109 (32%) 124 (37%) 103 (31%) SERP 95 (28%) 162 (48%) 79 (24%) Auto 60 (18%) 216 (64%) 60 (18%) Contract 57 (17%) 193 (57%) 86 (26%) Real Estate 33 (10%) 218 (65%) 85 (25%) Club 16 (5%) 249 (74%) 71 (21%) None Listed 7

8 About Witt/Kieffer Witt/Kieffer is the nation s most experienced executive search firm specializing in presidential, CEO and senior leadership searches in health care and higher education. Witt/Kieffer consultants in 16 nationwide locations conduct executive searches for presidents and CEOs, and well as COOs, CFOs, CIOs, physician executives, provosts, deans, chief development officers, chief enrollment officers and other senior executives. Through specialty practices and consultant expertise, the firm offers leadership solutions to organizations committed to improving quality of life including leading hospitals, health systems, academic medical centers, physician group practices, managed care organizations and insurers, as well as colleges and universities and community service and cultural organizations. For more information, visit. Locations Nationwide: Oak Brook, IL Emeryville, CA Irvine, CA Denver, CO Atlanta, GA Burlington, MA Nantucket, MA Bethesda, MD Minneapolis, MN St. Louis, MO New York, NY Toledo, OH Philadelphia, PA Pittsburgh, PA Houston, TX Seattle, WA 2010, Witt/Kieffer. All rights reserved.

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