Surging Healthcare Spending a Hot Topic at CEO Summit
Top U.S. chief executives are right in worrying about healthcare costs -- after all, they'll exceed profits next year.
“The average S&P 500 company will have as much expense on healthcare as they have net income,” Safeway CEO Steven Burd told CNBC’s Erin Burnett on Street Signs Thursday. “Worse than that, we’ve seen healthcare as a percentage of GDP grow from 7.5% in 1970 to a projected 22% in 2015.”
“That should worry all business people because that may put our economy in gridlock when we’re spending that much on healthcare,” he added.
Surging healthcare costs are among the hot topics being discussed by 80 top executives at the CEO Summit in Naples, Fla. The CEOs of companies ranging from EliLilly to Corning will also focus on energy costs, a shortage of skilled workers and their own pay.
Shareholders should not be allowed to vote on CEO compensation, said Rockwell Collins CEO Clayton Jones.
“About 80% or more of their pay is tied to incentive performance plans,” Jones said. “Right now when the economy is good, CEOs are making a lot of money, but they’re creating a lot of value and wealth too. I think in the main it’s OK.”
Jones is not alone. Many CEOs agree, saying the incentives are in place to ensure their companies’ success.
A shortage of skilled workers is also a big concern, according to a CEO survey conducted by the Business Council in collaboration with the Conference Board.
“This is only going to get worse over time,” said Sidney Taurel, CEO of Eli Lilly, which like many companies has had to hire more workers overseas.