Senior living CEO compensation and specialized C-Suite roles will continue to rise, according to an executive compensation analysis of not-for-profits.
LW Consulting, a Harrisburg, PA-based market research and consulting service, analyzed not-for-profit senior living executive compensation in a new report.
The authors noted that executive compensation in the not-for-profit senior living space presents “unique challenges.” They also said not-for-profits are challenged to compete for executives with skill sets that also are in demand at for-profit aging services and hospitals.
The report highlighted a few emerging trends.
CEO, CFO compensation
LWCI predicted CEO compensation will continue to rise, outpacing general market increases.
“With many providers involved in mergers and acquisitions, CEOs are taking on responsibilities for ever expanding portfolios,” the report reads. “Additionally, as the labor market recovers from the pandemic, the demand for skilled and experienced executives will only increase, driving larger compensation packages to attract and retain the best talent.”
CEO responsibilities can vary greatly, the report authors noted. Leaders of large, multi-campus organizations spread out across multiple states, for example, face different challenges than CEOs of small multi-site or single-site operators.
Across all organization types, the report pegged average CEO compensation at $506,802. The average salary of CEOs at large multi-site organizations was $638,013, whereas leaders at smaller organizations averaged $298,740 in pay.
Chief financial officers, often viewed as the “right hand” of a business, must be competent in real estate, dining and housekeeping service areas, the report noted. Those responsibilities, according to the authors, often make CFOs the second-most highly compensated individual at many provider organizations.
Overall, the average salary for not-for-profit CFOs was $301,713. The average salary of CFOs at larger organizations was $397,058, whereas the average salary at smaller organizations was $213,034.
The trend of multiple chief operating officers will continue, the LWCI report said.
“Providers are seeing the wisdom of dividing traditional COO duties across multiple positions,” the authors wrote. “This enables specialization within an area of expertise, providing better accountability and performance within the organization.”
The left hand counterpart of the CFO right hand, COOs keep organizations functioning “with an eye on the quality delivery of services,” the authors said. “Many organizations opt for multiple COO roles to oversee different parts of an organization’s portfolio. This is most common at large, multi-site organizations, where one COO might oversee healthcare operations, while another oversees independent living and the delivery of ancillary services.”
Other models forgo a COO entirely, the report said, instead relying on executive directors who report to the COO.
LWCI reported that, overall, COOs’ average salary was $312,652. COOs at larger organizations averaged $475,785, whereas those at smaller organizations averaged $194,905.
Specialized C-Suite roles
Another trend LWCI sees is the growth of specialized C-Suite roles, most notably that of chief information officer.
“As little as five years ago, many providers did not have a seat on the executive team dedicated to technology issues,” the report reads.
Although many larger providers count a CIO among their senior leadership, even medium- to smaller-sized organizations are elevating the CIO position — a trend LCWI anticipates will accelerate.
LWCI used IRS data from 2017 to present to compile the report.