TRI-CITIES, TN/VA – Wellmont Health System’s top executive received $520,000 in bonuses and incentives in 2015, according to the organization’s most recent tax filings. In fact, the organization’s tax records show President and CEO Bart Hove made $1.4 million in 2015, which is more than his counterpart at Mountain States Health Alliance.
If the Ballad Health merger is approved, Alan Levine would be Hove’s supervisor. Levine made $1.3 million in 2015, with $134,090 in bonus and incentive pay. He manages significantly more employees, according to tax records.
Wellmont Chairman Roger Leonard praised Hove’s efforts to turn around the system’s performance and improve physician relationships and employee morale.
“He was the kind of guy who was the right person at the right time to come in and lead this system through the merger process,” Leonard said. “Under Bart’s leadership we have done more internal promotion over the last two years than we have in my knowledge in the health system.”
Hove took over in September 2014, just days after Wellmont announced the departure of its previous CEO. Leonard said doctors gave Hove two standing ovations when he returned to guide the organization. The chairman says Hove not only knows the area, but also has a special skillset to help manage in a region with some of the lowest healthcare reimbursements in the country.
“It was very difficult to recruit a CEO into our health system under the circumstances and find the right person who could take and lead the organization at the right time, so there were some special incentives to attract him back into the health system,” Leonard said.
Those incentives and bonuses resulted in a large payout on top of Hove’s almost $800,000 base salary, which is slightly less than Levine’s $874,179 base salary. In addition, Hove received a country club membership in 2015, according to tax records.
“We don’t compare compensation to just our in-market competitors,” Leonard said. “We have to compete on a national level and we’re competing not just with other not-for-profits, but we’re competing with other for-profits as well.”
He says Wellmont’s human resources committee consistently reviews pay and incentives, which are then validated by outside third parties.
Chairwoman Barbara Allen says MSHA uses an executive consulting firm every year to make sure CEO pay is comparable to similarly sized facilities across the country with similar complexities. Allen calls setting the chief executive’s pay one of the most critical things the MSHA board does.
“Not only did we want to attract the best talent when we went to find Alan (Levine) in this case, but we also want to be able to retain him and pay him fairly,” she said. “What we’re looking at is to make certain that we’re paying fairly and that we’re compensating for the job that we’re expecting him to do.”
Levine received a $2,500 bonus, while four other executives each collected a $2,000 bonus in 2015. The board authorized the bonuses “to express the appreciation for the extreme hours they devoted during the year to a significant merger project,” according to tax filings.
The proposed merger with Wellmont Health System is still pending, but efforts first began in 2014 and Allen said the bonuses were a small way of compensating executives for all of the extra time they put in. In addition to the CEO, the chief operating officer, chief financial officer, chief medical officer and chief development officers were included in the bonus plan.
“It was the equivalent of having two full-time jobs for all of these executives,” she said. “It was simply our way of saying ‘Thank you.'”
Overall, MSHA’s top 16 executives made slightly more money in bonuses and incentives in 2015 compared to 2014, while Wellmont’s top 16 received a more substantial bump, according to tax returns. To earn incentive or bonus pay, executives, just like the employees below them, have to hit certain goals.
At both MSHA and Wellmont, those goals were not just related to financial performance, but also involved quality and patient satisfaction metrics too, according to representatives of both organizations. However, Wellmont reports incentive pay for its general employees was based solely on patient satisfaction.
Board members from both systems say when executives succeed, the entire organization succeeds.
“We want them to make their at risk pay, as far as all the executives, because if they’re successful then everybody all the way down to the front line team members are successful as well,” Allen said.
“We want everyone to succeed and when the health system is succeeding, we’re improving the financial stability of our system and we’re able to pass that along to all of our employees,” Leonard said.
Representatives of both health systems say all MSHA and Wellmont employees, from the top down, were eligible for incentive pay in 2015.