Wednesday, February 09, 2005

UC faulted for paying millions in bonuses

These are private-industry-level bonuses. One can argue that such bonuses are needed to retain top talent, but teaching hospitals do not have the income of, say, A Hewlett-Packard, IBM or Pfizer.

Do teaching hospitals needs to rethink their executive compensation? I'll bet most line clinicians and patients would agree.

-- SS


The University of California gave nearly $2.4 million in bonuses to 65 top executives at its five teaching hospitals in 2004, with 11 administrators receiving more than $50,000 each. The bonuses averaged $36,000 and reached as high as $82,000, according to a report to the UC Board of Regents that was made public Wednesday by an employee union.

... the largest bonus went to UC Davis Medical Center chief executive officer Robert Chason. It totaled $82,000 -- 20 percent of his annual salary of $410, 000. At UC Davis Medical Center, 12 health care executives shared bonuses totaling $526,803.
At UCSF, chief executive Mark Laret received a $79,495 bonus, 18.3 percent of his $434,400 salary. The bonuses for UCSF executives totaled $583, 740.

"At every level of our organization, UCSF Medical Center strives to compensate its employees at the median of the market," Laret said in a statement released Wednesday. "UCSF Medical Center leaders receive their compensation in two parts -- a base salary plus an at-risk incentive based on performance. At this time, including both parts of their compensation, UCSF Medical Center leaders are paid well below the market for comparable academic medical centers."

According to university documents, the bonuses were approved in October by UC President Robert Dynes and were outlined to the Board of Regents last month.

The regents did not discuss the payouts publicly, and one reached Wednesday said he objects to the bonuses.

"I am very disappointed with the bonuses that UC has given its health care executives," said Regent Ward Connerly, whose term on the board expires March 1. "There is a pattern of indifference among some of our more elite people at UC to the plight of our lower-paid employees and to the appearance that some of these bonuses are obscene. This indifference is not confined to health care executives."

... Medical center workers say the bonuses are a slap in the face. Many have gone without raises for several years and are anticipating salary increases of just 3 percent this year. "They keep telling us how little money they have ... but they always seem to have money for people they want to give raises to, and it always seems to be people at the top," said Jeff Cox, a lead building maintenance worker at UCSF. "It says that I don't matter. It is hurtful."

... "We think that the money could have been better spent on patient care and low-wage workers and maintaining the quality of services," said Faith Raider, a union spokeswoman. "We have seen a lot of cutbacks in staffing and services, and we think this money could have gone to that."

Jennifer Lilla, president of the University of California Student Association and a biomedical sciences graduate student at UCSF, said the money also could have been used to offset cuts in student aid.

"That is half of the money we are trying to get returned to the financial aid pool,'' Lilla said. "Yes, it made a difference in a handful of people's lives, but it could have made a difference in literally thousands of students' lives had it been diverted elsewhere.''

1 comment:

Roy M. Poses MD said...

From a Rhode Islander, Scot, you ain't seen nothing yet.
Of course, these compensation packages are above the national median for hospital CEOs (which I believe is less than $300K). And of course the bonuses seem disproportionate to the financial contingencies at the particular hospitals. It's interesting that you often hear of institutions paying CEOs according to some "national standard," even if the institution's financial performance is perhaps less than average.
However, this is almost chump change compared to what hospital CEOs make in RI. Here is a link for an article on the topic:
CEOs at some of our smaller hospitals made upwards of $400K. And the CEO of our large for RI, but not really that huge hospital network made over $2.2M in 2002. Why the CEO of some of our smaller RI hospitals should make more than the CEO of the UCSF hospital is not exactly clear. Housing costs certainly are not the culprit.