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March 17, 2018

Executive Compensation at the Children’s Hospital in Washington DC

by Anne Paddock

The Children’s Hospital (CH) in Washington, DC is one of the leading pediatric hospitals in the country. Established in 1870, CH is a non-profit 501 (c) (3) corporation with 7,850 employees that work in the network of hospitals, outpatient clinics – 19 health centers, outpatient centers, and mobile health units – and emergency rooms that collectively fall under CH.

The Children’s Hospital Foundation (CHF) is the fundraising arm of the Children’s Hospital. Whereas most charitable organizations report revenue and four key expenses (program, management, grants, and fundraising), CH reports revenue, program and management expenses while CHF reports fundraising revenue along with fundraising costs and grants. Therefore, it is necessary to look at both 990’s to fully understand the hospital.

According to the IRS Form 990 (2015) for the year beginning July 1, 2015 and ending June 30, 2016,  CH raised $1 billion (primarily patient revenue) of which $604 million was used for compensation related costs for the 7,850 employees (or, on average $77,000 per individual).  1,657 individuals received more than $100,000 in compensation.

CHF raised $71 million (most of which came from contributions, gifts, and grants) and although the organization reports having zero employees on the 990, $11 million was reported as compensation related expenses so there seems to be an error.

On Schedule J “Compensation Information,” CH listed 28 individuals who received a total of $26.4 million (an average of $942,000 each) while CHF listed 18 individuals who received a total of $16.2 million (an average of $900,000 each) from related organizations.  10 names were on both lists so the 36 individuals listed on both 990’s include:

  • $2,487,282:  Curt D Newman, MD, President
  • $2,147,831:  Richard Jonas, MD Board Member
  • $1,612,506:  Mark L Batshaw, MD, Board Member
  • $1,305,896:  David Wessel, MD Board Member – (CH reported $1,216,962)
  • $1,263,535:  Anthony Sandler, MD Board Member – (CH reported $1,283,036)
  • $1,168,089:  Denice Cora-Bramble, MD Board Member
  • $1,159,229:  Douglas Myers, EVP CFO to 12/2105
  • $1,077,397:  Kathleen Chavanu Gorman, COO
  • $1,074,605:  Elizabeth Flury, Chief Strategic Officer
  • $1,048,842:  Robert Keating, MD, Chief of Neurosurgery
  • $1,032,590:  Timothy Kane, MD, Chief of Pediatric Surgery
  • $1,011,054:  Roger Packer, MD, Board Member
  • $  988,061:  Gerard Martin, MD, Board Member -(CH reported $997,861)
  • $  933,923:  Raymond S Szudlo, Former CLO to 6/2014
  • $   923,955:  Peter Kim, MD, VP Sheik Zayed Institute
  • $  815,077:   Mendel Tuchman, MD, Chief Research Officer
  • $   794,717:  Gil Rushton, MD, Chief of Urology
  • $  782,403: John Myseros, MD, Neurosurgeon
  • $   717,709:  Mary Anne Hilliard, Chief Legal Officer
  • $   698,286  Darryl Varnado, Chief People Officer
  • $   695,379:  Pam King Sams, CDO, Board Member – (CH reported $697,259)
  • $   597,019:  Brian Jacobs, MD, Chief Information Officer
  • $   480,067:  Rahul K Shah, MD, Former Board Member to 6/2014
  • $   408,563:  Judy Graham, VP, COO, Board Member
  • $   393,860:  David Sparks, VP, Finance/Contr to 6/2014
  • $   379,834:  Mary Ottonlini, MD, PhD, Vice Chair Medical Education
  • $   362,558:  Linda Talley, Chief Nursing Officer
  • $   348,620:  Eric Hoffman, PhD, Board Member
  • $   318,196:  Michelle M McGuire, VP and Chief of Staff
  • $   284,616:  Dennis McClellan, AVP, Principal Gifts
  • $   271,013:  Robin Steinhorn, MD, Board Member
  • $  261,057:  Julie Butler, AVP, Corporate and Comm Giving
  • $   253,766:  Thomas Maness, AVP, ANL Major and Planned Giving
  • $   237,899:  Mark Miller, AVP, Marketing and Comm
  • $   228,581:  Shomari White, AVP, Foundation Business Opps
  • $   182,650:  David Stockwell, MD, Board Member to 6/16

Of the 36 individuals listed above, 24 (or 67%) are men, while 12 (or 33%) are women.  Of those who received more than $1 million in compensation (12 individuals), 9 (or 75%) were men while 3 (or 25%) were women. Of those on the list above who received less than $500,000 in total compensation, 7 were men and 7 were women.

CH reports the organization pays for first class or charter travel. Notes indicate the CEO is permitted to fly First Class on trips longer than 4 hours. Hospital policy allows business class travel for international flights.

CH reports the organization pays for companion travel. Notes indicate the CEO may take his spouse up to 7 trips per year and upon the CEO’s approval, companion travel for the wives of executives may be approved.

CH reports that two key employees and one former employee received supplemental retirement benefits which are increased by a tax equalization amount, and are treated as taxable compensation.

CH reports certain executives are reimbursed for health club or social club dues with these costs treated as taxable compensation.

CH reports certain executives are reimbursed for tax, financial, and estate planning and health costs with these costs treated as taxable compensation.

CH reported a severance packaged of $416,822 was provided to Raymond S Szudlo.

CH reports a supplemental non-qualified retirement plan with the following individuals receiving deferred compensation:

  • $285,000 to Kurt Newman
  • $ 250,000 to Mark Batshaw
  • $ 88,551 to Richard Jonas
  • $ 79,501 to Douglas Myers
  • $ 75,697 to Robert Keating
  • $ 60,000 to Anthony Sandler
  • $ 82,502 to David Wessel
  • $ 82,502 to Denice Cora-Bramble
  • $ 48,924 to Gil Rushton
  • $ 39,333 to Gerard Martin
  • $ 75,002 to Elizabeth Flury
  • $ 73,501 to Kathleen Chavanu Gorman
  • $ 51,684 to Roger Packer
  • $ 52,139 to Mendal Tuchman
  • $ 32,461 to Pam King Sams
  • $ 30, 446 to Mary Anne Hilliard
  • $ 20,000 to Brian Jacobs
  • $ 45,003 to Darryl Varnado

To read the IRS Form 990 (2015) for CHF, click here.

To read the IRS Form 990 (2015) for CH, click here.

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