2023/2024 Health Insurance Executive Compensation Insights Report #2

Using Incentive Compensation to Drive Corporate Results

Executive compensation plans are constantly being evaluated in order to attract and retain high performing talent that possess the right competencies and are empowered to lead the organization. An executive compensation package will typically include both financial and non-financial incentive components to drive individual and organizational performance. This insight article explores executive incentive compensation for health insurers as it relates to driving business results. The findings are based on the recently published 2023 BDO Health Insurance Industry Executive & Management Total Potential Remuneration (TPR) Survey, which is a valuable source of executive compensation information used by boards and management to make well-informed executive compensation decisions.

This summary is the second installment of a two-part series focusing on select high-level insights from the full report. Read the previous installment: Top Executive Pay Matches or Exceeds Revenue Growth.

BDO’s TPR Survey includes hard data, analysis, and insights related to compensation strategies and performance measures that are intended to drive desired business outcomes. The extensive survey results report contains in-depth data and analysis that can help health insurance companies to address critical issues, including:

• Designing pay programs and delivery mechanisms to attract and retain an executive leadership team that will drive the business strategy.
• Ensuring performance metrics support the behaviors that will achieve the goals of the business.
• Determining how much of an executive’s pay should be at risk (e.g., variable pay that is only earned if specific performance metrics are achieved).
• Designing effective supplemental executive retirement plans and change of control agreements.