An equitable and effective compensation system is essential to the smooth and productive operation of any academic department. While academic departments of emergency medicine must meet clinical, teaching, research, and administrative missions, they are disproportionately reliant on funds derived from clinical activities. The Department of Emergency Medicine at UCSD is a freestanding academic hospital department with responsibility and accountability for its own finances. The compensation system addresses the reliance on clinical income yet recognizes the other, largely underfunded, missions. All salaries are comprised of a base amount tied to the core clinical workload, scaleable stipends for academic rank, years of service, and administrative role, as well as a provision for clinical bonus and additional clinical workload. Faculty have the option of adjusting clinical workload with resultant formulaic modification of departmental salary support. Salary adjustment fosters the core value of clinical service and provides incentive for senior faculty to remain clinically active. The system has been in place for more than six years and has been associated with an excellent record of patient care, teaching, academic productivity, administrative service, faculty stability, and fiscal integrity.