Issue link: https://beckershealthcare.uberflip.com/i/922733
23 23 CEO/STRATEGY Healthcare CEOs See $25M Golden Parachute on Average: 5 Things to Know By Megan Knowles H ealthcare CEOs see an average of $25 million in benefits as a result of being dismissed during a merger or takeover, accord- ing to a recent Alvarez & Marsal and Equilar study. Public companies are required to measure and disclose the size of change-in-control benefits to top executives. e payments include severance, continuation of health and welfare benefits, outplacement services and excise tax protection. Researchers gathered data on the benefits received by CEOs and other named executive officers for the 20 largest public companies in 10 dif- ferent industries, according to market capitalization. Here are five findings on how healthcare CEO benefits compare to other industries: 1. e 2017 average total separation benefit package for healthcare exec- utives was approximately $25 million. e IT industry had the highest average — approximately $38 million — and telecommunications had the lowest value at approximately $20 million. 2. Long-term incentives made up the largest component of change- in-control packages for CEOs in all 10 industries. For healthcare, long-term incentives made up approximately $16 million of the $25 million total. 3. Seventy-six percent of CEOs receive a cash severance payment upon termination in connection with a change in control, according to the study. Severance payments comprised approximately $8 mil- lion for healthcare, which ranked second to highest. e industrials industry averaged the greatest severance payments, at approximately $9 million. 4. CEOs frequently receive continuation of health and welfare ben- efits upon termination of employment in connection with a change in control. In the healthcare, IT, industrials and materials industries, this benefit is provided to other named executive officers more oen than CEOs. 5. Executives receive other benefits, such as outplacement services to help them find suitable employment and enhancement of retirement benefits. In the healthcare industry, 45 percent of executives received outplacement services and 35 percent of executives received enhance- ment of retirement benefits. n Observation Care 18 ' 5 TH ANNUAL NATIONAL OBSER VATION MEDICINE CONFERENCE The Center for Emergency Medical Education designates this live activity for a maximum of 15.00 AMA PRA Category 1 Credits™. Physicians should claim only the credit commensurate with the extent of their participation in the activity. Register at CEME.org/obs ■ Achieve outstanding Triple Aim value-based outcomes ■ Understand the financial impact of observation units on payers, providers, hospitals, and patients ■ Learn how to optimally size your unit, including various models of ownership and strategies around variable staffing models ■ Agenda includes seminars on: - Medicare policy & regulatory issues - Billing & coding - Choosing the right metrics - Developing an effective peer review process LEARN FROM NATIONAL EXPERTS! April 16 – 18, 2018 | New Orleans, LA