executive compensation

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Nonprofit? Really? Big Salaries For Chiefs At Mass. Charitable Hospitals, Health Plans

A sample chart from the Attorney General's report showing compensation details for the top paid hospital executive in 2011, John O'Brien.

A sample chart from the Attorney General’s report showing compensation details for the top paid hospital executive in 2011, John O’Brien.

Compensation for CEOs of the top 25 nonprofits in the state, including hospitals and health plans, ranged from more than $487,000 to approximately $8.8 million, according to a new report released today by Attorney General Martha Coakley.

“Massachusetts is unique,” Coakley says, “in that many of our largest employers are non-for-profit institutions.”

These hospitals, health plans (and universities included in Coakley’s report) “must compete with national for-profit companies for CEO talent while staying true to their charitable mission.”

So do these CEO salaries achieve that balance?

Coakley suggests these organizations could be more balanced by paying more attention to the difference between executive and non-executive pay and by considering “the level of public support the organization enjoys in the form of exemption from property tax, corporate excise tax, sales tax and other forms of taxation.”

The numbers below, from 2011, look big and they are, just keep in mind they include retirement, bonuses and all other compensation.

HOSPITALS

1) John O’Brien at UMass Memorial Health Care $2,350,992.00 (retired earlier this year)

2) Gary Gottlieb at Partners HealthCare $2,163,199.00

3) Betsy Nabel at Brigham and Women’s Hospital $1,939,479.00

4) Peter Slavin at Massachusetts General Hospital $1,758,691.00

5) Mark Tolosky at Baystate Health $1,636,004.00

6) James Mandell at Children’s Hospital $1,503,885.00

7) Linda Shyavitz at Sturdy Memorial Hospital $1,496, 532.00

8) Edward Benz at Dana-Farber Cancer Institute $1,406, 432.00

9) Kate Walsh at Boston Medical Center $1,378,292.00

10) Howard Grant at Lahey Health $1,045,479.00

11) Dianne Anderson at Lawrence General Hospital $674,042.00

12) Kevin Tabb at Beth Israel Deaconess Medical Center $360,877.00 (partial year)

HEALTH PLANS

1) Jim Roosevelt at Tufts Health Plan $2,116,683.00

2) Eric Schultz at Harvard Pilgrim Health Plan $1,460,982.00

3) Andrew Dreyfus at Blue Cross Blue Shield $ 1,111,075.00 (Dreyfus declined some compensation) Continue reading

Ex-Blue Cross CEO Got $8.6M Pay Package

Bending the cost curve? Sure, but which way?

In a disclosure already generating public outrage, Blue Cross Blue Shield of Massachusetts reports today that its outgoing CEO Cleve Killingsworth received $8.6 million in compensation last year, including $1.4 million in severance pay.

The details of the pay package were part of a state insurance filing by Blue Cross, the state’s largest insurer. Here’s more from The Boston Globe.

And here’s a statement (aka damage control) from former Blue Cross Board Chairman Paul Guzzi about the compensation filing:

Today, Blue Cross Blue Shield of Massachusetts filed its annual compensation report with the Massachusetts Division of Insurance. Included in the report is the compensation paid to former CEO Cleve Killingsworth upon his resignation in March of last year.

Cleve chose to resign his position following discussions with the Board about the direction of the company. He agreed to resign on the condition that he would receive the same severance benefits that were called for if he were terminated under his employment contract. The Board agreed to proceed on that basis. Cleve’s severance and retirement benefits were negotiated as part of the employment contract signed in 2005 when Cleve became CEO.

The Board understands and is sensitive to the community’s interest and concern about executive compensation. With the full support and urging of our new President and CEO Andrew Dreyfus, we have significantly reduced the CEO’s compensation and benefits.

(Guzzi was Chairman of the BCBSMA Board when Killingsworth resigned.)

Outrage-filled comments are already stacking up on The Globe’s website:

“Nonprofit they say? Sounds like plenty of people are profiting. Keep paying those premium[s],” feedbass writes

Rileysdad adds: “As a right leaning, free-market independent, even I am speechless.”

And here’s Dianadot: “OMG This is so disgusting. Why on earth was he receiving that kind of compensation??”

Reached at his home in upstate New York, Killingsworth told The Globe: “The payment I got was consistent with my contract, no more, no less.”

And then comes this irony-rich kicker:

He said he is currently serving on the boards of a half dozen companies and universities and writing about health care issues, including the need for reforms in how doctors and hospitals are paid.

(Italics mine.)

This just in from Attorney General Martha Coakley’s office, also clearly not pleased:

“Today, Blue Cross Blue Shield reported the compensation owed to its former CEO as a result of his employment contract negotiated back in 2005. While Blue Cross may be required to meet its contractual obligations to its former CEO, we continue to be concerned about high levels of executive compensation at health care organizations given current fiscal conditions and efforts to control costs in health care. Blue Cross has assured us that significant changes have been made in its contract with its current CEO to bring it more in line with current fiscal conditions. Every board is primarily responsible for establishing CEO compensation and more transparency is needed to enhance public confidence in our charities.

Two years ago, our office issued new findings regarding our investigation into executive compensation at non-profits and brought additional levels of transparency on these issues. We also are continuing our review of compensation practices at health care organizations as part of our work to help achieve quality, affordable health care in our Commonwealth. Today’s news is yet further evidence of the importance of that work.”