Goals and incentives for Atlanta’s nonprofit hospital CEOs

The Atlanta Journal-Constitution studied CEO bonuses at local nonprofit hospital systems. The AJC is reporting the most up-to-date information it could obtain. Some hospitals provided information for 2013, while others referred the AJC to their most recent public IRS filings. Compensation consultants note that one CEO who meets all targets hasn’t necessarily outperformed a CEO who doesn’t, because each board sets different goals. “An organization where the CEO hits the target year in and year out … that raises a question,” said Jamie Orlikoff, an expert in hospital governance. “How hard are they pushing?”

Children’s Healthcare of Atlanta

• Hospitals: Egleston, Scottish Rite, Hughes Spalding
• CEO: Donna Hyland
• 2012 compensation: $1.5 million (base: $894,603; bonus: $547,278; other and deferred: $57,683)

Incentive plan highlights:

• Children's Healthcare refused to release specific information about its incentive plan.
• Children's said half of CEO incentives are tied to goals related to quality, customer service, financials and staff. It said the other half is based on unspecified individual goals.
• While Children's would not say what its targets were or whether the CEO had met the targets, it said its goals are higher than national benchmarks.

DeKalb Medical

• Hospitals: DeKalb Medical and DeKalb Medical Hillandale
• CEO: John Shelton
• 2013 compensation: $799,086 (base: $615,000; bonus: $74,007; other, including moving expenses: $110,079)

Incentive plan highlights:

• Quality and safety goals: 10 percent. Exceeded targets.
• Financial goal: 40 percent. Target was to reduce budgeted loss by $1 million. Not met.
• Strategic goals: 40 percent. Goals included implementing Lean Six Sigma program for efficiency, adding primary care providers and making key hires. DeKalb said some strategic goals are tied to quality. Partially met.

Emory Healthcare

• Hospitals: Emory University Hospital, Emory Midtown, Emory Johns Creek, Emory Saint Joseph's, Emory Orthopaedics & Spine Hospital
• CEO: John Fox
• 2011 Compensation: $3.4 million (base: $1.1 million; bonus: $492,674; retention payment: $1.1 million; deferred and other: $690,000)

Incentive plan highlights:

• Emory would not release the detailed incentive plan with targets and results. Emory's transparency requirements are limited because its system doesn't include a hospital owned by a public authority.
• Financial: No bonuses are awarded unless a financial target is hit. Actual amount of bonus is set primarily by quality measures, not financial results.
• Quality: Targets include mortality, patient satisfaction, readmissions and adherence to proven protocols.

Grady Health System

• Hospital: Grady Memorial Hospital
• CEO: John Haupert
• 2013 compensation: $1,107,500 (base: $700,000; bonus: $210,000; deferred until 2017 and requires that he remain at Grady: $185,500; other: $12,000)

Incentive plan highlights:

• Quality and safety goals: 20 percent. Met targets to reduce hospital-acquired infections and conditions by 20 percent, exceeded target to reduce 30-day readmission rates.
• Financial: 35 percent.Hit or exceeded financial targets. Also exceeded growth targets, which accounted for another 10 percent of plan.
• Service excellence: 20 percent. Fell short of target for patient satisfaction in the ER and outpatient clinics. Achieved satisfaction target for inpatients.

Gwinnett Medical Center

• Hospitals: Gwinnett Medical Center-Lawrenceville and Gwinnett Medical Center-Duluth
• CEO: Philip Wolfe
• 2011 compensation: $1,011,995 (base: $569,063; bonus: $214,420; deferred and other: $228,512)

Incentive plan highlights:

• Quality: 25 percent. Gwinnett says it exceeded its target for quality and said it tracked 10 quality measures, including following proven protocols, reducing mortality, pressure ulcers, readmissions and infections.
• Financial: 30 percent. Gwinnett doesn't award any bonuses if a financial target isn't hit. It reached this "circuit breaker" in FY 2013.
• Growth: 15 percent. Gwinnett set a target of 27,049 surgical cases, but did not quite meet it in FY 2013.

Northside Hospital

• Hospitals: Northside Hospital-Atlanta, Northside Hospital-Forsyth, Northside Hospital-Cherokee
• CEO: Robert Quattrocchi
• 2011 compensation: $5.3 million (base: $1.3 million; bonus: $1.2 million bonus; retirement payout: $2.8 million)

Incentive plan highlights:

• Quality: Northside says that 30 percent its CEO incentive plan is tied to "quality and operations" but refused to say what measures were included.
• Financial: 25 percent. Northside's 2012 goal for "operating margin" (similar to profit) was 3.8 percent, down from a 4.8 percent goal in 2009. Northside said its CEO hit this target and all the other targets set by the plan.

Piedmont Healthcare

• Hospitals: Piedmont Atlanta, Piedmont Henry, Piedmont Newnan, Piedmont Fayette, Piedmont Mountainside
• CEO: Kevin Brown
• 2011 compensation for former CEO Tim Stack: $2 million (base: $879,270, bonus: $838,838, retirement, deferred and other: $374,000)

Incentive plan highlights:

• Quality: 40 percent. Piedmont released only its incentive plan for the CEO of Piedmont Henry, owned by a public hospital authority. Similar goals apply to the entire Piedmont sytem. The report for 2013 showed Piedmont exceeded quality targets for mortality rates and serious safety events. The 2014 plan adds patient satisfaction in Piedmont's Emergency Department to the priority list.
• Financial: 40 percent. Piedmont didn't reach its financial target in 2013 due to lower reimbursements and bad debt, along with higher expenses, including a spike in supply costs.

WellStar Health System

• Hospitals: WellStar Kennestone, WellStar Cobb, WellStar Paulding, WellStar Douglas, WellStar Windy Hill
• CEO: Reynold Jennings
• Compensation 2013: $1.3 million (base: $975,000; bonus: $380,445; other: $17,400)

Incentive plan highlights: