The impending merger of Spokane, Wash.-based Providence Services—which oversees operations of St. Patrick Hospital and Health Sciences Center in Missoula, Benefis Healthcare in Great Falls and St. Joseph Medical Center in Polson—with the much larger Seattle-based Providence Health System, is raising questions about how much money top executives at the nonprofit health care systems are paid.
In a memo delivered to company employees last month, Providence Health System board chair Kay Stepp tried to head off some of those queries by attempting to explain why former president and CEO Hank Walker took home an eyebrow-raising $6.6 million in 2004.
“We recognize that executive compensation can raise questions, and that’s why I wanted to call your attention to the filing, and invite you to review it in detail,” Stepp wrote. According to Stepp, $5.5 million of Walker’s payment was accounted for by the value of his retirement fund, drawn in a lump sum. Broken down over the seven years Walker worked for Providence Health System, the payout amounts to more than $785,000 per year in benefits.
The additional $1.04 million paid in 2004 was Walker’s salary for the year, including a performance award, according to Stepp, even though Walker, who took over as CEO in 1997, was on sabbatical from October of 2003 until his retirement in April 2004, according to a report in Modern Healthcare.
According to Pablo Eisenberg, a senior fellow at the Georgetown University Public Policy Institute and a columnist for the Chronicle of Philanthropy, Walker’s pay should raise questions.
“These days it is not that unusual for the head of a large health system to make more than $1 million per year, but this payout grants nearly an additional $800,000 in retirement for each year worked,” Eisenberg told a reporter for the Business Journal of Portland (Ore.) earlier this week. “It seems excessive.”
The news got us to wondering how executives at some of Missoula’s top revenue-generating nonprofit organizations fare compensation-wise. The following data is based on 2004-2005 Internal Revenue Service form 990 filings.
• St. Patrick Hospital and Health Sciences Center’s outgoing CEO Steve Witz had manned the helm a year when he took home $178,168 in fiscal year 2004, as well as an additional $21,667 in benefits. Missoula’s largest nonprofit organization is also the region’s largest hospital and employer. St. Pat’s reported revenues of more than $151 million in FY 2004.
• Community Medical Center is Missoula’s second-largest nonprofit organization and the county’s second-largest employer. Community generated revenues of more than $104 million in FY 2004. The hospital paid outgoing CEO Grant Winn, a 27-year veteran, $262,154 in wages and $228,840 in benefits in 2003, his last year. Current CEO Tom Moser earned $125,481 without benefits in 2004, his first year at Community.
• Rodney Triepke, chief information officer for the Rocky Mountain Elk Foundation, earned $107,123 in 2004. He was the Missoula-based organization’s highest paid executive in Montana, but earned less than Oklahoma City-based Thomas Stevenson, vice president of business operations. The RMEF took in more than $34 million in revenues in 2004.
• Laura Brehm, president of the University of Montana Foundation, was paid $134,000 in FY 2004 to head the organization, which took in $23.4 million in revenues. Brehm reported working 60 hours per week for her compensation.
• Opportunity Resources Inc., a nonprofit organization that “supports people with disabilities, including assistance with housing, transportation, recreation and jobs,” brought in more than $7 million in FY 2004. The organization paid its executive director, Jack Chambers, $83,746 plus a $3,376 contribution to his benefits package.
• Partnership Health Center, a health clinic providing health care to the uninsured and underinsured in Missoula County and surrounding areas, generated revenues of $3.3 million in FY 2004. Lisa Lovejoy, the center’s medical director, earned $125,599 for 36 hours per week, plus an additional $8,666 toward her benefits plan. Former executive director Ed Mahn took in $65,136 for 40 hours per week plus $4,494 in benefits.
• The Maureen and Mike Mansfield Foundation, created “to promote understanding and cooperation among nations and peoples of Asia and the United States,” paid its top executive, Gordon Flake, of Washington, D.C., $120,000 in 2004, plus $14,520 in benefits. The Foundation’s top Missoula executive, director Terry Weidner, earned $97,351 plus $12,792 in benefits. The Mansfield foundation took in $3.5 million in revenues in 2004.
• Sue Wilkins, administrator of Missoula Correctional Services—which provides residential and nonresidential programs for the care, treatment and supervision of criminal offenders—earned $61,375 for her work in FY 2004. She also took home $5,275 in benefits. Missoula Correctional Services reported $2.8 million in revenues that same period.
• Peggy Grimes, executive director of the Montana Food Bank Network, is the lowest paid executive of Missoula’s top 10 revenue-generating nonprofit organizations. In 2004 Grimes earned $41,044, without benefits. The Montana Food Bank Network—an arm of America’s Second Harvest, the nation’s largest domestic hunger-relief organization—generated revenues of $2.7 million in 2004.
•In his 35th year as head of the Greater Missoula Family YMCA, Executive Director Pat Dodson took home $81,460 in salary and $13,352 in benefits in FY 2004. According to Guidestar.org, YMCAs collectively make up the largest nonprofit community service organization in America. In FY 2004, the Missoula YMCA brought in $2.6 million in revenues.