KINGSPORT, TN (WJHL) – During her last year of employment with Wellmont Health System, former CEO Denny DeNarvaez collected $2.6 million in total compensation, including bonuses, base compensation and a $1.7 million severance package, according to tax documents.
“Margaret DeNarvaez, former CEO of Wellmont Health System, entered into a Confidential Separation Agreement and General Release as of September 16, 2014,” the tax document said. “The terms of this Agreement included the payment of $1,745,538 for items which are considered ‘severance,’ including payment in lieu of a notice period, early termination clause, release of claims, and reimbursement of health insurance premiums following termination. There were other payments for earned incentive compensation, accrued vacation, and reimbursement of relocation costs that are not considered ‘severance.'”
In September 2014, not long after Wellmont announced plans to consider merging, the health system also announced DeNarvaez was resigning, saying the then-CEO felt the time was right for her to leave. A month later, DeNarvaez told us she left Wellmont to remove herself from the lightning rod position as the organization moved forward with the merger process.
Wellmont Health System Senior Vice President of System Advancement Todd Norris says just because DeNarvaez received severance pay doesn’t mean people should interpret she was fired. Instead, he says most top executives across the industry have similar separation agreements built into their contracts that cover a variety of scenarios when someone leaves. He says it’s an important factor when trying to make a competitive offer.
“The executives that work at Wellmont are well-prepared for the jobs that they have, they bring significant healthcare experience to the table, they’re doing the very best that they can, not only to provide the services that our community needs and to advance our health system into the future, but to the manage the health system very effectively,” Norris said. “I think the key takeaway is that we’re operating with good stewardship, that our board takes our job very seriously, they apply industry standards to all the decisions that they make and that they’re really looking for top talent that can ensure the sustainability of our health system moving forward.”
Norris says separation agreements often take into consideration how much time it might take a person to find a new job. It took DeNarvaez eight months.
She wasn’t the only top executive to walk away with a confidential separation agreement approved by the board. Wellmont’s former chief operating officer Tracey Moffatt left Wellmont just a few weeks after DeNarvaez in 2014. The health system previously said Moffatt wanted to pursue other employment opportunities and called it a personnel matter. Her departure, according to tax documents, came with a $275,000 severance package.
“That is really an industry standard practice for us,” Norris said. “That’s very consistent of what you would see in other health systems of our size. It’s very customary for things like that to be in an executive contract.”Copyright WJHL 2016. All rights reserved.