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Modern Healthcare

HCA Healthcare CEO Made $27 Million in First Year

HCA Healthcare's CEO made almost $27 million in his first year at the helm of the country's second largest hospital provider by revenue.

Sam Hazen made $26.8 million in total compensation last year, mostly from stock awards, bonuses, and increased pension benefits. Hazen's pay was 478 times that of HCA's median employee salary last year: $56,012, according to the company's proxy, up from a ratio of 383 to 1 in 2018.

Across the healthcare industry, the CEO pay ratio was 107 to 1 in 2018, according to a study by Pearl Meyer.

Deborah Lifshey, a managing director with the executive compensation consulting firm Pearl Meyer, said so many variables affect companies' CEO pay ratios that it's not useful to compare them within industries, company by company, or even year over year. For one, companies have different ways of calculating their median employee income. And total compensation includes the fair value of equity, which could change once the executive is ready to realize the equity, she said.

"We would never take that number and use it to drive executive compensation decisions because we do not believe it's part of the strategy of a company," Lifshey said. "The strategy of a company is to tie pay to performance. If a company has a stellar year, we would expect the CEO to be paid more even if the ratio goes up."

A large component of Hazen's 2019 compensation—$9.6 million—was comprised of increased pension value and deferred compensation earnings. Fluctuations in that category are driven by factors like interest rate changes, mortality rates, and the executives' age—things that are beyond the company's control, Lifshey said.

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