Executive Compensation at Mercyhealth (Wisconsin)

Mercyhealth is a regional healthcare system with 7 hospitals and 85 primary and specialty care locations in southern Wisconsin and northern Illinois. Headquartered in Janesville, Wisconsin, Mercyhealth consists of many non-profit, tax-exempt organizations (9) and also owns several organizations that are taxed as corporations including Mercycare Insurance Company, Rockford Health Insurance (which is domiciled in Bermuda), and Mercycare HMO (which consolidated with Mercycare Insurance Company).

The entire Mercyhealth system (the largest employer in the area) has more than 8,000 employees compensated through the various non-profits and corporations. This post will list the most highly compensated employees as reported by Mercy Health System Corporation (MHSC) on the Form 990 (2016 for the year ending June 30, 2017) submitted to the IRS.  To find the most highly compensated employees at a specific hospital or related organization, see the corresponding Form 990.

MHSC reported total revenue of $574 million, most of which was patient service revenue. Expenses totaled $557 million (including $27 million in depreciation) with compensation ($325 million) and drugs and medical supplies ($102 million) the two largest expenses.

4,077 employees were compensated $325 million, which equates to an average compensation of $80,000.  456 employees received more than $100,000 in compensation. The 21 most highly compensated employees are:

• $8,867,885:  Javon R Bea, President and Director
• $2,042,406:  John Bussa, Physician
• $1,868,370:  Manish Gharia, Physician
• $1,861,079:  David Luellwitz, Physician
• $1,644,224:  Christopher Sturm, Physician
• $1,583,078:  Mark Goelzer, Director/Physician
• $1,580,191:  Kenneth Wolnak, Physician
• $  866,558:  John W Cook, VP/CFO
• $  524,023:  Sue Ripsch, VP
• $  519,011:  Paul T Van Den Heuvel, VP
• $  397,117:  Ruth Yarbrough, VP
• $  379,037:  E Patrick Cranley, VP
• $  352,935:  Joanna Bea Benning, VP
• $  345,561:  Barbara J Bortner, VP
• $  342,348:  Jennifer Hallett, VP
• $  314,797:  Debra A Potempa, VP
• $  313,129:  Daniel Parod, VP (part-year)*
• $  251,734:  Kathleen S Harris, VP
• $  175,912:  Richard H Gruber, VP
• $  171,543:  Thomas R Jensen, VP
• $  143,040:  Daniel M Colby, Former VP

14 of the 21 (67%) most highly compensated employees are male while 7 (33%) are female. 9 out of the 10 most highly compensated employees are male while 1 is a female. A “*” indicates the employee received compensation from an affiliated organization. It is important to note Javon R Be and Joanna Bea Benning are related.

MHSC paid for a residence for personal use. Specifically, the CEO is provided with a residence. The cost of renting the residence is treated as taxable compensation.

MHSC made payments for business use of personal residence. Specifically, the CEO is reimbursed for internet access and communication costs used for business purposes at his personal residence. The reimbursement is treated as taxable compensation.

MHSC paid for health or social club dues or initiation fees. Specifically, the CEO is reimbursed for health club dues, which is treated as taxable compensation.

MHSC paid for personal services. Specifically, the CEO is reimbursed for income tax preparation services, which is treated as taxable compensation.

457 Plan distributions were:

• $1,335,155:  John Bussa
• $1,277,038:  Manish Gharia
• $1,224,948:  David Luellwitz
• $1,036,620:  Mark Goelzer
• $  921,653:  Kenneth Wolnak
• $  300,143:  Christopher Sturm

Javon R Bea received $5,837,389 – an incentive distribution.

50 independent contractors received more than $100,000 in compensation. The five highest were:

• $3.2 million:  Epic Systems of Verona, WI for software, system maintenance
• $2.0 million:  Lab Corp of America Holdings of Burlington, NC for lab services
• $1.8 million:  MaGill Construction Company of Elkhorn, WI for construction
• $1.2 million:  Camelot Radiology Associates of Rockford, IL for physician services/radiologists
• $1.2 million:  Morningstar Media Group of Sycamore, IL for advertising

To read the IRS Form 990 (2016 for the year ending June 30, 2017), click here.