Executive Compensation at AdventHealth (2017)

AdventHealth (formerly known as Adventist Health System until 2019 when the 501 (c) (3) “rebranded” itself) is one of the largest non-profit health care providers in the United States with nearly 50 hospitals and hundreds of care sites in 9 states. Based in Altamonte Springs, Florida, AdventHealth is a very large system with dozens of separate 501 (c) (3)’s for the hospitals, physician care, patient care, and more.

This post looks at the executive compensation at  Adventist Health System Sunbelt Healthcare Corporation (AHSSHC) and Adventist Health System West (AHSW) because the most recent (2017) IRS Form 990’s are available for these two entities (before the organization was rebranded to AdventHealth). It is important to note there are dozens of other related and affiliated non-profits related to AdventHealth that are not covered in this post.

AHSSHC

AHSSHC provided executive leadership and other professional support services to the subsidiaries and affiliates of its healthcare network.  In 2017, AHSSHC reported having 2,145 employees who were compensated $468 million, which equates to an average compensation of $218,000. However, only 611 employees received more than $100,000 in compensation with the 20 most highly compensated employees listed below:

• $3,538,936:  Terry D Shaw, Director/President/CEO
• $2,760,536:  Lars D Houmann, Director/Chief Operating Officer
• $2,654,661:  Randall Hafner, Director/SEVP/CEO Multi-State Division
• $2,094,614:  Robert D Fulbright, SVP/CEO/CFD North Region
• $1,931,858:  John David Moorhead, SEO/CCO/CFD South Region
• $1,919,025:  Michael Schultz, SEVP/CEO West Division
• $1,576,022:  Paul Rathbun, SEVP/CFO
• $1,573,978:  Daryl Tol, SEVP/CEO Central Division
• $1,572,556:  Eddie Soler, EVP/ Senior Finance Officer
• $1,555,017:  Sandra K Johnson, Director/EVP/Chief Admin Officer
• $1,491,499:  Brent G Snyder, Director/EVP/CIO
• $1,456,589:  Loran D Hauck, EVP/Chief Clinical Officer (end 12/17)
• $1,448,513:  Lynn C Addiscott, VP Senior Tax Officer
• $1,317,278:  David Banks, EVP/Chief Strategy Officer
• $1,246,828:  Kenneth J Bacon, CEO Shawnee Mission Medical Center
• $1,186,313:  Debora H Thomas, SVP/CFO/CFD North Region
• $1,133,449:  Jeffrey Bromme, EVP/Chief Legal Officer
• $1,119,954:  Donald L Jernigan, Former President/CEO
• $  733,724:  Olesea Azevedo, SVP/Chief HR Officer
• $  504,243:  Kathleen Clem, EVP/Chief Clinical Officer (beginning 12/17)

The 20 most highly compensated employees received nearly $33 million, which equates to an average compensation of $1,650,000.  15 of the 20 (75%) most highly compensated employees are male while 5 (25%) are female. 9 out of the 10 most highly compensated employees are male while 1 (the 10th) is a female.

AHSSHC paid for first class or charter travel, travel for companions, health or social club dues or initiation fees, and provided discretionary spending accounts, tax indemnification and gross up payments, and residence for personal use or housing allowances.  To read more about these benefits/perks, see Schedule J, Part III, Supplemental Information Form 990 (2017).

In 2017, a Senior Executive Death Benefit (SEDB) Plan was adopted. The SEDB provides a benefit in an amount equal to the executive’s requirements of the SERP Plan with present value recognizing an early benefit commencement.  The amounts reported are described as “CY Contributions/Distr   Distr   Contrib  Distrib   Payment”

• Randall L Haffner:  $244,687, $159,510, $568,287, $0, $0
• Lars D Houmann:  $246,703, $$217,552, $608,036, $0, $0
• Sandra K Johnson:  $108,591, $61,717, $449,668, $0, $0
• Michael Schultz:  $151,688, $120,092, $369,909, $0, $0
• Terry D Shaw:  $312,231, $210,768, $1,052,610, $0, $0
• Brent G Snyder:  $136,519, $114,063, $149,906, $0, $0
• Daryl Tol:  $190,752, $76,082, $0, $0, $0
• Thomas Werner:  $0, $0, $0, $50,502, $0
• Paul Rathbun:  $171,802, $118,469, $0, $0, $0
• Olesea Azevedo:  $67,762, $0, $0, $0, $0
• David Banks:  $107,582, $89,870, $197,202, $0, $0
• Jeffrey Bromme:  $109,191,  $82,176, $0, $0, $0
• Kathleen Clem:  $49,923, $0, $0, $0, $0
• Edie Soler:  $133,999, $114,569, $303,339, $0, $0
• Loran Hauck:  $118,607, $0, $375,826, $0, $0
• Robert Fulbright:  $67,085, $229,578, $0, $0, $1,054,221
• David Moorehead:  $98,534, $0, $976,174, $0, $0
• Lynn Addiscott:  $48,914, $0, $896,514, $0, $0
• Kenneth Bacon:  $90,297, $55,667, $240,591, $0, $0
• Debora Thomas:  $49,797, $20,019, $578,762, $0, $0
• Donald Jerigan:  $9,220, $0, $0, $0, $0

To read more about who is eligible to participate in the SERP and SEDP Plans, see Schedule J, Part III, Supplemental Information of the Form 990 (2017).

Transactions with interested persons include:

• Terry Owen, a family member of a board member, received $875,091 in compensation for employment.
• Mark Rathbun, a family member of a board member, received $389,054 in compensation for employment.
• Emily Johnson, a family member of a board member, received $69,287 in compensation for employment.
• Adam Johnson, a family member of a board member, received $62,784 in compensation for employment.
• Cynthia Rodgers, a family member of a board member, received $23,328 in compensation for employment.

229 independent contractors received more than $100,000 in compensation with the five highest reported to be:

• $48 million:  Cerner Corporation of St Louis, MO for IT services and S\support fees
• $19 million: Deloitte Consulting of Dallas, TX for consulting services
• $18 million:  AthenaHealth, Inc. of Boston, MA for medical records and billing services
• $10 million:  Advanced ICU Care, Inc of Dallas, TX for consulting services
• $ 6 million:  Cisco System Capital Corp of Los Angeles, CA for IT services and support fees

AHSW

AHSW reported having 1,881 employees who were compensated $173 million which equates to an average compensation of $92,000. However, only 543 employees received more than $100,000 in compensation with the 37 most highly compensated employees listed below:

• $3,581,359:  Beth Zachary, SVP/President SCR
• $2,036,689:  Scott Reiner, Director/CEO
• $1,628,816:  Daniel Gordon, VP Financial Services
• $1,512,937:  Bill Wing, Director/President
• $1,496,188:  Kevin Longo, AVP Compliance
• $1,173,145:  Kendall Fults, Former COO CCR
• $1,110,321:  Mark Ashlock, SVP Physician Strategy
• $1,107,520:  Jack Wagner, Assistant Secretary/CFO/SVP
• $1,082,481:  Jeff Eller, SVP/Pres NCR
• $1,002,251:  Wayne Ferch, SVP/Pres CCR
• $  964,551:  JoAline Olson, SVP/CHPIO
• $  941,715:  Kevin Roberts, President GAMC
• $  939,130:  Arby Nahapetian, Reg Medical Officer SCR
• $  809,409:  John Raffoul, President WMMC
• $  808,671:  Joyce Newmyer, SVP/President PNR
• $  769,040:  Jeffrey Conklin, VP/Pres Managed Care
• $  735,143:  Ronald Wehtje, Reg Financial Officer SCR
• $  703,504:  Gloria Bancarz, VP/CNO
• $  703,084:  Bob Beehler, VP Marketing Development, M&A
• $  696,552:  Meredith Jobe, Sect/VP General Counsel
• $  694,547:  John Beaman, VP Finance/SFO
• $  656,233:  Dag Jakobsen, VP/COO AHPS
• $  593,071:  Keith Doram, Former VP Clinic Effectiveness/CMO
• $  580,526:  Harold Chilton, Former VP, Support Services
• $  553,267:  Hoda Asmar, SVP/CCO
• $  550,520:  Chip Dickinson, VP Business Solutions
• $  549,007:  John Gustin, VP Facilities, Construction, RE
• $  543,039:  Lowell Church, VP Material Management
• $  526,169:  Kathleen Wilson, VP Benefits Admin
• $  522,662:  Kirby McKague, Former VP/CFO AHPN
• $  501,844:  Alan Soderblom, Former VP/CIO
• $  491,366:  Robert Marchuk, VP Ancillary Services
• $  489,707:  Leeanne Patterson, VP/CRO, Risk Management
• $  455,163:  Doris Tetz, VP Talent and Strategy
• $  384,969:  Thomas Russell, Former VP Pop Health Innov
• $  272,726:  Rodney Wehtje, Former Assistant Secretary/VP Treasurer
• $  126,272:  Douglas Rebok, Former Asst Secretary

The 37 executives listed above were compensated $33 million in 2017, which equates to an average compensation of nearly $900,000. 27 of the 37 (73%) most highly compensated employees are male while 10, or 27% are female.  8 of the 10 most highly compensated employees are male while 2 are female, including the most highly compensated, Beth Zachary who received more than $3.5 million in compensation.

The Form 990 reports the organization paid for first class and charter travel, travel for companions, tax indemnification and gross up payments, health or social club dues and/or initiation fees, housing allowance and/or residence for personal use, and discretionary spending accounts. No detail on these expenses is provided on Schedule J, Part III, Supplemental Information of the Form 990.

141 independent contractors received more than $100,000 in compensation with the five highest reported to be:

• $30 million:  Deloitte Consulting of Sacramento, CA for healthcare consulting
• $26 million:  Cerner Corporation of St Louis, MO for IT services and support fees
• $14 million:  OPTUMRX of Eden Prairie, MN for Pharm Ben management
• $ 6 million:  Brown Parker Demarinis of Newport Beach, CA for healthcare marketing
• $4 million:  Quest Media and Supplies of Sacramento, CA for “contr labor cons”

To read the IRS Form 990 (2017) for AHSW, click here.