Executive Compensation at the Henry Ford Health System (2017)

The Henry Ford Health System (HFHS) is a 501 (c) (3) non-profit healthcare organization with eight hospitals, numerous medical centers and one of the nation’s largest group practices, the Henry Ford Medical Group with more than 1,200 physicians practicing in over 40 specialties.  With more than 30,000 employees, HFHS is one of the largest employers in the Detroit metro area.

The most recent IRS Form 990 (2017) reports HFHS spends less than the organization receives (in 2017, the organization reported $3 billion in revenue but spent just under $2.9 billion in revenue leaving $100 million added to the fund assets, which had a net fund balance at year-end of $918 million, up from $766 million at the beginning of the year). As with most health care systems, there are numerous non-profits (foundations and other organizations) that are affiliated with HFHS. This post addresses the primary organization, HFHS.

In 2017, HFHS reported having 22,137 employees who were compensated $1.6 billion (about half of total reported revenue), which equates to an average compensation of $73,400.  2,453 employees received more than $100,000 in compensation with the 19 most highly compensated employees listed below:

$8,767,889:  Nancy M Schlichting, Former CEO, President

$3,328,358:  Wright L Lassiter, III, CEO

$2,184,059:  Robert G Riney, Senior VP and COO

$2,043,358:  William A Conway, Physician Trustee

$1,933,369:  William W O’Neill, Physician

$1,842,943:  John Popovich, Jr, CEO – HF Hospital/Physician

$1,687,300:   Edward G Chadwick, Treasurer/CEO (thru 12/3/2017)

$1,387,760:  Steven N Kalkanis, Physician

$1,183,439:  Theodore W Parsons, Physician

$1,139,057:  Teresa Kline, CEO – HAP

$1,131,876:  Muwaffak M Abdulhak, Physician

$1,085,217:  Mokbel K Chedid, Physician

$  949,105:  Adnan R Munkarah, Physician Trustee

$  929,210:  John J Polanski, CEO – Community Care Service

$  890,452:  Lynn M Torossian, CEO – E Blooomfield Hospital

$  772,362:  Joseph E Schmitt, Former SVP/Interim CFO

$  372,270:  Michelle Johnson Tidjani, Secretary (started 6/2017)

$  243,845:  AnnMarie Erickson, Assistant Secretary

$  133,664:  Edith L Eisenmann, Former Secretary

13 of the 19 (68%) most highly compensated employees are male while 6 of the 19 (32%) are female. 8 of the 10 most highly compensated employees are male while 2 are female, including the most highly compensated employee, Nancy M Schlichting who was compensated $8.7 million in 2017.

According to the IRS Form 990 (2017),

It is the organization’s policy to pay or reimburse employees for bonafide business travel based on the most cost effective means available. Generally, when air travel is involved this equates to coach class air fare. Under certain circumstances, such as when coach lass is not available or the trip is of an extensive duration, senior leadership has approved business class, first class or charter travel. Ins such circumstances, the travel is considered to be for a bonafide business purpose; accordingly no taxable income is reported. There were no payments or reimbursements of first class during 2017.

The statement does not state whether payments or reimbursements of business or charter travel were made in 2017.

HFHS provided tax indemnification and gross up payments and paid for a housing allowance or a residence for personal use. See Schedule J, Part III, Supplemental Information on the IRS Form 990 (2017) for more information. Supplemental retirement information is also detailed in this schedule.