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D’ye see the trick here?

Here’s how to understand the unique methodological trick the researchers applied to uncover this trend. Previous studies would generally look at the salary of a CEO at a given hospital one year, then look at the CEO salary at the same hospital a little later — say, 10 years later — and compare the two, even if a different person who started at a different salary became CEO during that time.

Say the prior CEO had made $2 million in 2010 and then left and a new CEO was hired. By 2021, the new CEO was also making $2 million. It would appear, at first glance, as if executive pay had been essentially unchanged over that period. But that method of evaluating the data could in theory mask an enormous increase in compensation for the new CEO. Let’s say, hypothetically, that the new CEO was hired in 2015, making $1 million, By 2019, they were making $2 million, doubling their salary in five years, a trend you can only detect when tracking the compensation for individual hospital leaders, as the North Carolina researchers did.

The researchers discovered this kind of scenario playing out in the real world. At Duke Health, for example, CEO Eugene Washington was making $1.2 million less in 2021 than his predecessor had been in 2010. But what those topline numbers do not reveal is Washington had doubled his compensation from his initial starting salary within four years. Some of the other examples were even more egregious: Atrium Health CEO Gene Woods more than quadrupled his salary in six years, and Mission Health CEO Ronald Paulus saw his paycheck grow by more than 700 percent in less than a decade.

Those pay increases for hospital leadership dwarfed the average growth nationwide in compensation for clinical staff like doctors and nurses. Family physician wages increased by 23 percent from 2010 to 2019; registered nurses saw their pay rise by just 15 percent over the same period.

They track the pay of individuals, over their careers, then compare that to the average pay of groups – not to the pay of doctors and or nurses as they progress through their careers.

File under fuckwit tosswankery.

4 thoughts on “D’ye see the trick here?”

  1. Good point. Mind you I suspect that CEOs do rip off the shareholders. That’s the shareholders’ business of course, but what they can do about to when the majority (?) of the shares are held indirectly by means of mutual funds and ETFs I don’t know.

    Never mind, the CEOs are probably no more unscrupulous than the journalist.

  2. Four years sounds about right. That’s how long it takes to charm and politick the board into thinking that you’re the best thing since garlic icecream.

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