Grady Memorial Hospital officials may seal a separation agreement with their embattled CEO as early as Monday, the same day they expect to name a new chief executive.

News that Grady is close to a deal with CEO Pam Stephenson comes days after a top Grady official said negotiations had bogged down, and as pressure mounts on Stephenson to exit gracefully.

Pete Correll, the head of the new Grady nonprofit board, said Wednesday that Stephenson's separation agreement could be announced as early as Monday.

"I think things are going very well," Correll said.

In addition, Correll said, the Grady nonprofit board is expected to vote Monday on a new CEO, who would take the helm by Sept. 1.

"I think it is the most important decision the board will make," Correll said. "Monday could be a big day."

Finalists include Gregory Burfitt, 59, who until recently was CEO of Centura Health system in Colorado, overseeing 12 acute care hospitals; and James Burkhart, 54, president of Shands Jacksonville Medical Center, a large trauma center in Florida.

In addition, Grady officials are considering Michael Young, 52, who for three years has been CEO of the Erie County Medical Center Corp. in upstate New York; and Dr. Michael Keith Butler, 52, who oversees seven hospitals in the Louisiana State University Health Care Services Division.

Controversy continues to grow over Stephenson's two-year, $600,000-a-year contract, which some officials called a secret sweetheart deal.

Several state and local officials have taken exception to the prospect she could receive a severance package worth $750,000. That provision has been a major sticking point in negotiating her departure.

Meanwhile, several members of the Fulton-DeKalb Hospital Authority — the old Grady board, which hired Stephenson in January — said they plan to challenge the contract at their board meeting July 28. Stephenson is also chairwoman of the authority.

Some board members have questioned the contract's validity because the document was not approved by the full body.

An expert who reviewed the contract and the authority resolution to hire Stephenson said he thinks it is not a valid agreement.

"From everything I've heard, the contract is invalid," said Paul Lapides, director of the Corporate Governance Center at Kennesaw State University, who reviewed the documents at the request of the Atlanta Journal-Constitution.

Authority member Thomas Dortch said he hopes the board will declare the contract void at its July 28 meeting.

Dortch believes the contract is not valid. "We didn't vote on it," Dortch said. "We have to do what's right."

Authority member Richard Teters said he believes the contract required a final review by the full board. He said he is calling for a formal legal opinion on the question.

"It appears to have been developed in secrecy without full disclosure," Teters said.

But authority member Geoffrey Heard, the vice chairman who signed the contract, said that the board's public resolution in January to hire Stephenson and offer her a contract was sufficient authorization. The full board did not have to meet again on the issue, he said.

The Jan. 28 resolution that authorizes the contract said the vice chairman, or in his absence the treasurer, would executive the contract "upon consultation and review by the board of trustees."

There also has been a continuing dispute about whether the original action to hire Stephenson was meant to fill the post temporarily, until the new nonprofit board took over.

Lapides, of Kennesaw State, said the contract reflects fairly standard language for a deal struck with a corporate executive, but he said the contract — with its severance clause — does not look like the contract of an interim executive.

The Grady authority board recently handed over control of the hospital to the nonprofit board. The authority remains in place as owners of the Grady property and a check on the nonprofit's performance.

The authority is expected to elect its internal officers, and some members say Stephenson might be ousted as chairwoman.

"Frankly I believe a new slate of officers needs to be brought forward," said member Carl Patton, president of Georgia State University. "It's a matter of credibility."