Exhibit N-6: Chief Operating Officer Compensation
Summary Explanation of Method and Determining Factors
Determination of compensation for the COO position.
Section 1367(g).
The Plan conducts periodic salary surveys to determine competitive compensation and salary
ranges for key positions within the organization, including the COO position. The salary surveys
are conducted by an outside consultant who uses a variety of resources, including the following
industry recognized surveys that include appropriate benchmark matches.
-Economic Research Institute Survey
-Employers Group Executive Compensation Survey
-Mercer Group Survey
The surveys are used to analyze, identify, and recommend independent and reliable
compensation information for organizations, including health plans who serve Medi-Cal
populations. The 2016-2017 survey results were used to create the table below. The salaries are
based on the recommended “Executive Pay Grade 5” for the COO. The pay grade used takes into
account the executive level position and the COO’s many years of experience in health plan
operations.
Job Classifications
Chief Operating Officer

Payment

Range

Schedule

Minimum

Midpoint

Maximum

Annual

$295,242

$369,052

$442,863

The Plan’s COO is currently paid an annual salary of $572,000. However, it is important to note
the COO does not receive any benefits that are afforded to other executive leaders of the Plan.
Based on information provided by the U.S. Department of Labor, benefits represent in excess of
30 percent* of an employee’s annual salary. Therefore, using the maximum salary of $442,863
reflected in the above survey and including an adjustment for no benefits, it would appear the
COO would be due an additional $132,859., increasing the total to $575,721, which is slightly
more than the COO is currently compensated. Therefore the Plan believes the COO’s current
salary is both fair and competitive.
The Plan believes that it continues to use industry-relevant information upon which to base
executive level salaries and that the current compensation paid to the COO is reasonable. The
Plan asserts that the compensation is founded on valid survey findings and current employer
labor costs related to employee compensation and benefits.

*EMPLOYER COSTS FOR EMPLOYEE COMPENSATION – JUNE 2017, News Release, Bureau of Labor Statistics, U.S.
Department of Labor notes benefits accounted for 30.4 to 31.7 percent of the total compensation paid to employees
in June 2017.