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Boards are facing tough choices on executive compensation: Does their compensation package reward the right things? Is it too high or too low? The 2003 annual Hay Compensation Report gives boards the comparative data they need to help make the right choices.

Hospital boards are exercising more scrutiny than ever on executive pay, at a time when the disparity between salaries in health care and general industry has finally disappeared.

Boards are coming to respect how challenging it is to run a hospital, and increasingly view it as too big a job for one person. In our annual compensation survey report, Hay Group analysts assert that lower-level executives, senior managers and even middle managers have seen their stock rise in health care organizations, and that's reflected in the pay structure. Even so, CEOs aren't exactly struggling--but their total compensation still lags behind that of their counterparts in other industries.

As pay trends go, one executive's bonus can be another's bane. Asked what they like about their compensation programs, health care execs and trustees say they're satisfied with the base salaries paid to their top people, but not with their bonus plans, especially for meeting long-term goals like stronger credit ratings and asset positions.

Performance incentives cover a wider--and deeper--swath of health care than ever, according to the latest Hay Group surveys. Yet it's clear that most organizations are homegrowing compensation strategies that blend base and incentive pay into a cohesive package.