Annual Increase Program July 2010

People Pillar: Compensation Community Survey: Compensation consistency across the organization –Annual Merit Increases –Targeted Market Assessments for Compensation and Benefits –Nationally recognized Human Resources Consulting Firm Engaged to Provide Recommendations

The Message “We care deeply about our people. We are taking proactive and comprehensive measures to make sure everyone working at Vanderbilt is fully compensated.” Jeff Balser, Leadership Assembly Spring 2010

Compensation FY 2011 $40 million annual increase budget for VUMC Conservative – economic indicators remain unclear and health system cash balance modest Same pool and parameters for all faculty and staff – all VU At or above most universities peers 6

Raise pools for at peer universities Emory- 2% Duke- 0% for all faculty above $80,000; $1,000 payment below $80,000 Hopkins- 2% raise with a delay in the onset of the raise for 6 mo Miami- 2% Michigan- 3% (layoffs) Washington Univ- 2.75% Stanford- 2% Cal Tech- 2% Harvard- 2% Chicago- 3% (over 500 layoffs in FY2010) Wake Forest- 2% Penn- 2.5% Cornell- 2% 7 Compensation FY 2011

Average 2010 Projected Merit Increases Summary Source: Compensation Advantage Not Available

10 Annual Increase Program Ratings (Range)% Inc. 5 ( ) = 3.25% 4 ( ) = 2.50% 3 ( ) = 2.00% Annual pay increases this year will be based on individual performance –Applied to individual current rates of pay –May result in partial or full lump sum payment Performance based lump sum payments eligible for retirement contributions and match

Ratings (Range)% Inc. 5 ( ) = 2.75% 4 ( ) = 2.25% 3 ( ) = 2.00% Market pay adjustments based on individual performance Current performance evaluation for 2010 in VPES with at least a “3” rating Opportunity to review employment status and record for these staff PRN Licensed Market Based Performance Licensed PRN

Licensed PRN Jobs Job CodeJob Title 6621Coord, Patient Acc & Tri, PRN 8489EMT Transport - PRN 6714Licensed Pract Nurse - PRN T1 6716Licensed Pract Nurse - PRN T2 6724Licensed Pract Nurse-CC PRN T1 6726Licensed Pract Nurse-CC PRN T2 6677Nurse Practitioner-PRN 3904PRN Licensed 5411Paramedic - PRN 6663Registered Nurse, PRN Tier Registered Nurse, PRN Tier2 6662Registered Nurse-CC, PRN Tier1 6639Registered Nurse-CC, PRN Tier2

Effective & Paycheck Dates PayrollEffective DatePaycheck Date Biweekly7/04/20107/23/2010 Monthly7/1/20107/31/2010

Total Compensation BENEFITS Insurance & Retirement Paid Time Off Tuition Spending Accounts Pay for Performance Success Sharing Performance Evaluation PERFORMANCE DEVELOPMENT Recognition & Rewards

x 2 = $184,338

Creating Organizational Alignment Alignment of goals creates momentum to achieve results… Leader Goals Individual Goals