Ontario Hospital Association Introduces Framework for Hospital Executive Compensation
TORONTO, March 23, 2012 /CNW/ - Today, the Ontario Hospital Association (OHA) introduced a proposed Hospital Executive Compensation Framework (Framework) and associated recommendations intended to strengthen hospitals' executive compensation programs and improve their transparency.
In December 2011, an Independent Expert Panel on Executive Compensation in the Hospital Sector (the Panel) chaired by former Deputy Prime Minister of Canada John Manley made a number of recommendations aimed at helping hospital board of directors ensure their decisions regarding executive compensation were replicable across the sector, and based on evidence and leading human resources practices.
"The Framework and associated recommendations were based on the Panel's work," said Mark Rochon, Interim CEO of the Ontario Hospital Association (OHA). "They were also shaped by Ontario's current economic climate and Premier McGuinty's call for leadership by Ontario's broader public sector leaders."
The OHA's shared the Framework and associated recommendations with hospitals earlier this week, and has made them publicly available at www.oha.com. The OHA recommended that hospital boards:
- Voluntarily implement the Framework, which would see hospital CEO compensation based on a complexity matrix that includes budget size, research and teaching intensity, patient volumes, and other factors.
- Voluntarily implement a pay-for-performance scheme that would see up to 30% of hospital executive compensation tied directly to clearly and publicly-articulated provincial and organizational goals.
- Voluntarily extend executives' compensation freeze to a total of five consecutive years, inclusive of the current freeze period. If fully implemented, this freeze would save approximately $47 million over 5 years.
- Review organizational policies regarding car allowances to ensure they are consistent with the spirit and letter of the Broader Public Sector Accountability Act's Perquisites Directive, and ensure that without-cause severance arrangements adhere to common law principles.
"Ontario's hospital boards and executives have been integral to making our hospitals, through the outstanding work of all employees and staff associated with hospitals, the most efficient in Canada, and making our wait times and patient outcomes some of the best anywhere," said Rochon. "Today, OHA member hospitals are taking a leadership role among the entire broader public sector in ensuring that their executive compensation practices are evidence-based and transparent. We believe this can only enhance public confidence in the leadership of Ontario's hospitals."
The OHA has also recommended that the Government of Ontario review specific perquisites, including Supplementary Executive Retirement Plans (SERPs) and retention bonuses across all broader public sector organizations to determine their appropriateness in today's economic climate.
"Premier McGuinty and others have repeatedly called on all Ontarians to play a role in addressing the province's economic challenges while protecting important public services," Rochon added. "Ontario's hospital leaders are doing their part."
Links to additional information:
Backgrounder
Media Slide Deck
About the OHA: The Ontario Hospital Association (OHA) is the voice of Ontario's public hospitals. Founded in 1924, the OHA uses advocacy, education and partnerships to build a strong, innovative and sustainable health care system for all Ontarians.
Contact: Amy Ouellette, OHA Public Affairs, at [email protected] or 416-205-1433.
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