Hospital CEOs net whopping bonuses
Despite a health care system that wails about underfunding, some hospital execs get million-dollar bonuses.
By Jim Woods, InvestorPlace.com
It's bonus time again, both on Wall Street and Main Street, and this year the public is predictably outraged by what it collectively regards as the unfair, outrageous and downright criminal bonuses set to be paid to CEOs.
In the highest-profile cases (financial institutions that received taxpayer bailout money), executive bonuses have come to represent the ultimate slap in the public's face.
But it's not just Wall Street bonuses making news these days. A New York Post article aptly titled, "Sickening Bonuses," told the story of hospital executives who collected huge bonuses even as New York City's health care system wails about being woefully underfunded.
The article described executives receiving perks such as "housing allowances, chauffeurs, first-class air travel, tuition for their kids and country club memberships." Hey, not a bad gig if you can get it.
In fact, finding out what kind of money these guys are being paid got me to thinking that their bonuses are way more egregious than any Wall Street banker ever received. Plus, in Wall Street's case, at least their executives deliver earnings and shareholder value.
Take a look at some of the outrageous largess the following New York City hospital executives received last year.
Dr. Herbert Pardes of New York-Presbyterian Hospital received a $1 million bonus in 2008 on top of his $1.67 million salary. He also received a $93,500 housing allowance and the use of a car and driver, but that's not all. Pardes' total compensation was actually $9.8 million last year if you include his vested retirement plan that will pay him $6.8 million when he leaves his position in 2011.
Miguel Fuentes Jr., CEO of the Bronx-Lebanon Hospital, received a $1.2 million bonus as part of his $4.8 million compensation package.
Alan Kopman, CEO of New York Westchester Square Medical Center, received $558,491 in pay and benefits in 2008, including a $47,803 bonus. The hospital also paid $25,320 for his membership in the prestigious Seawane Golf and Country Club.
Dr. Murray Brennan, surgeon and former head of the surgery department at Memorial Sloan-Kettering Cancer Center, received a retirement payout of $17.5 million on top of his $1.2 million salary last year.
The Post article quoted a top industry source that described these CEO deals as "scandalous." Why? Well, because private hospitals are tax-exempt and rely on state and federal money from Medicaid and Medicare, and other government subsidies.
Ah ha, there's the kicker.
Could this be partly why health care costs are so high? Are there hospital administrators in other big cities receiving these kinds of bonuses and perks largely at taxpayer's expense?
I'm sure the answer is yes. I'm also sure that nobody in Congress is going to make any waves about these bonuses during the health care debate. In fact, it's likely these tax-exempt hospitals will get more government funding in the years ahead, so don't be surprised if you see more outrageous hospital executive bonuses like these in the years to come.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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