SullivanCotter Research: Growth in Health Care Executive Compensation Continues Amid Heightened Demand for Leadership Talent

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6:35 AM on Wednesday, October 1

The Associated Press

CHICAGO--(BUSINESS WIRE)--Oct 1, 2025--

SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profit organizations, has released results from its 2025 Health Care Management and Executive Compensation Survey.

Now in its 33rd year, this industry-leading benchmarking resource includes compensation data from more than 3,320 health care organizations on nearly 48,000 incumbent managers and executives.

This year’s report found that the median base salary for all health care executives increased by 4.7%, a slight increase from 4.6% the previous year. At the system level, executives saw higher median increases (5.2%) than those at subsidiary hospitals (4.7%), consistent with prior years.

The most significant gains (7.0% or higher) in median base salary were seen in executive roles tied to core business and clinical operations, IT and digital strategy, patient and workforce experience, and regulatory/compliance:

Business/Operating Roles: Chief Operating Officer, Top Ambulatory Care Executive, Top Pharmacy Executive
Information/Digital Technology and Strategy Roles: Chief Information and Digital Officer, Chief Strategy Officer, Top Managed Care Executive
Workforce/Patient Experience Roles: Chief Learning/Organization Development Officer, Chief Patient Experience Officer, Top Quality Executive (MD)
Regulatory/Compliance Roles: Top Legal Services Executive, Top Risk Management Executive

More organizations are also reporting new or expanded leadership roles in areas such as artificial intelligence (AI), analytics, digital innovation, population health, and community access, signaling a shift in strategic priorities and talent requirements.

The current operating environment is also impacting annual incentives, resulting in total direct compensation (TDC, equal to base salary plus annual and long-term incentives) rising faster than base salaries for the second consecutive year. While median TDC rose by 8.4% across all executives, growth is higher for health system leaders (8.9%) than it is for subsidiary hospital executives (5.5%). This reflects a moderately improved operating environment and above-target incentive payouts tied to 2024 performance.

While incentive plan structures and target award opportunities remained stable, a SullivanCotter pulse survey in April found that nearly half (46%) of health systems reported making design changes to their 2025 annual incentive plans. These included recalibrating goals, increasing financial weighting, and placing greater emphasis on system-wide performance.

“Organizations are still navigating uncertainty and volatility,” said Renee Stolis, Managing Principal, SullivanCotter. “Even with moderate performance gains, incentive programs are being adapted to support financial sustainability and long-term transformation goals.”

The executive compensation landscape remains in flux as health systems respond to shifting payer dynamics, federal policy changes, regulatory scrutiny, and ongoing inflation and labor shortages. Against this backdrop, SullivanCotter’s pulse survey found that just 42% of health systems expected improved financial performance in 2025, down from 51% in late 2024. At the same time, nearly 90% of survey respondents indicated that their executive recruiting efforts will hold steady or increase – signaling an extremely competitive talent market.

“The competition for senior leadership talent remains intense, particularly as organizations look ahead to new strategic priorities in areas like digital transformation, workforce strategy, and patient access,” said Bruce Greenblatt, Managing Director and Executive Workforce Practice Leader, SullivanCotter. “As boards and executive teams plan for 2026 and beyond, compensation programs must evolve to reflect these shifting requirements while helping to retain high-performing leaders.”

In response, advisors and leadership teams are focusing on workforce strategy, succession planning, and compensation optimization to support performance, retention, and resilience.

SullivanCotter recommends that organizations:

Align incentive plans with strategy: Revisit goals and performance assumptions regularly. Incorporate appropriate performance expectations given the uncertain environment and ensure incentive metrics balance short- and long-term priorities.
Invest in internal talent: Define succession plans, assess critical roles, and tailor development and retention strategies to secure high-potential and at-risk leaders.
Assess leadership structure and spend: Evaluate spans of control, titles, and leveling to support strategic goals. Consider total leadership cost in relation to performance and efficiency.

For more information on SullivanCotter’s surveys, visit www.sullivancotter.com or contact us at 888.739.7039.

Note to media: Additional data and interviews are available upon request.

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.

View source version on businesswire.com:https://www.businesswire.com/news/home/20251001698665/en/

CONTACT: Becky Lorentz

SullivanCotter

[email protected]

314.414.3719

Jenni Bowring

Padilla

[email protected]

651.226.3858

KEYWORD: ILLINOIS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: HUMAN RESOURCES HOSPITALS CONSULTING BUSINESS PROFESSIONAL SERVICES PRACTICE MANAGEMENT HEALTH DATA ANALYTICS GENERAL HEALTH

SOURCE: SullivanCotter