It will be harder to attract and keep top NHS managers if their pay fails to keep up with the private sector, human resources experts have warned.
Their comments follow a survey of NHS managers' salaries by Capita Health Services Partners.
Median total pay for chief executives has risen by 5 per cent to£135,000 since last year, according to the survey of more than 70 trusts, which did not include primary care, ambulance trusts or strategic health authorities.
Chief executives' salaries ranged from£86,000-£240,000. Medical directors continued to be the highest paid members of trust boards with median total pay of£153,936.
David Evans, head of pay and labour market services at Capita Health Services Partners, said NHS chief executives' salaries were in line with pay across the public sector. "They're less competitive when compared to salaries in the private sector, particularly if you take the total pay and include bonuses," he said.
Chief executives in private companies comparable to NHS trusts earn more than£600,000 on average.
Mr Evans said trusts were upping salaries as more became foundation trusts and increasingly looked to the private sector when setting pay levels. Trusts that failed to offer attractive packages could lose managers to other sectors, he warned.
The Hay Group gave HSJ figures showing that on average chief executives of NHS trusts earn 83 per cent of the basic pay of counterparts in the wider market.
Private sector chiefs could expect bonuses of 20 per cent of their annual salaries with long-term incentives equalling an annual equivalent of a further 20 per cent. But pensions and holiday are better in the NHS.
Hay Group head of healthcare consulting Mike Hay said some chief executives may be lured back to the private sector. He said the service needed to look at how performance was measured at board level and how to incentivise leaders.
Jon Restell, chief executive of union Managers in Partnership, said many managers were not paid as much as they deserved. "We don't think there is proper recognition of what the role at board level requires," he said. "The political and public policy environment is something few private sector managers have to deal with."
He also feared PCT and other NHS managers, whose pay levels are set through very senior managers' pay arrangements, may find their salaries begin to lag behind those offered by foundation and NHS trusts, which have the flexibility to respond to market forces.
Salary scales for senior trust managers
Medical directors remain the highest paid members of trust boards, with median total pay of£153,936
Finance directors are the next highest paid executive directors, with a median salary of£100,064
Salaries are higher for some posts in foundation trusts than other NHS organisations, with foundation trust chiefs earning up to£240,000 a year
Median pay levels for foundation trust chairs (£45,000) and non-executive directors are higher than for other types of NHS organisation
Source: Salary Survey 2008 for NHS Chief Executives and Directors published by Capita Health Service Partners.
This week sees the launch of Board Talk, a new area on hsj.co.uk for the non-executive community. Register for free.