Of all the well-paid chief executives running big U.S. companies, no industry’s top dogs earned more than the CEOs of health care companies.
According to the The Wall Street Journal CEO Compensation Study, chief executives at health care firms get median pay of $10 million per year. That places the sector’s chiefs at the top of the pay scale, above their peers in consumer goods, telecommunications, and oil and gas, (who, on average, earn $8.9, $8.6 and $8.6 million per year, respectively).
Thermo Fisher Scientific, Boston Scientific and Johnson & Johnson were the three health-care firms paying their CEO’s the largest salaries, each of them appearing among the 20 most generous companies on the list.
The survey comes at a time of wide concern about the rising costs of health care, and the added millions of the top earning executives could be perceived by many as unnecessary, or even unfair.
Others, including Paul Dorf, the managing director of Compensation Resources Inc., a compensation consulting firm in Upper Saddle River, N.J, counter that the high salaries reflect the well-remunerated bosses’ impact on performance. For instance, shareholder returns in fiscal year 2009 for Thermo Fisher Scientific, where CEO Marc Casper earned $33 million, were 40 percent.



Health Care for America Now (2010) a coalition that fights for health reform maintains “…that while America’s families struggled with skyrocketing health insurance costs and the worst economy since the Great Depression, chief executives of the 10 largest for-profit health insurance companies collected total pay of $228.1 million, up from $85.5 million the year before.” The CEOs of UnitedHealth Group, WellPoint, Aetna, CIGNA, Humana, Coventry Health Care, Health Net, Amerigroup, Centene and Universal American took almost a billion dollars in compensation from 2000 through 2009. In 2009 the average compensation for hospital CEOs in America was $1 million.
In 2010 Americans will spend $2.6 trillion on health with 10 percent or $260 billion going for overhead. This accounts for an increase in health care costs of 72 percent between 2000 and 2009 and during the same period the health care industry overhead increased by 95 percent.
Express Scripts is terminating thousands of employees and pushing to take wage cuts, and eliminate health care and pensions. In 2010 it plans to shut down its Bensalem, Pennsylvania facility and lay off 950 workers while its CEO George Paz makes $10.6 million.