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September 7, 2020

Executive Compensation at NorthShore University HealthSystem (Illinois)

by Anne Paddock

NorthShore University HealthSystem (NUH) is a non-profit, tax-exempt 501 (c) (3) healthcare provider with 5 hospitals (although the Form 990 reports only 4 hospitals in 2018), clinics, surgery centers, primary care and specialty medical offices, labs and pharmacies in the Chicago metropolitan area. In addition, NUH is affiliated with the University of Chicago medical school.

Key information taken from the Form 990 (2017 for the year ending September 30, 2018) include the following:

NUH has $2.5 billion in net assets.

Total annual revenue was $1.8 billion, which came primarily from three sources:  patient revenue ($916 million), Medicare and Medicaid ($607 million), and gains from the sale of assets/investment income ($163 million).

Total expenses were $1.6 billion (including $64 million in depreciation) and primarily consisted of compensation ($720 million or about 40% of revenue; note: compensation for most healthcare providers is about 50% of revenue), medical supplies ($342 million), fees for services ($222 million), grants ($93 million and almost all of which went to an affiliate:  NorthShore Faculty Practice Associates for general support), and office-related expenses ($83 million).

12,061 employees received $720 million in compensation which equates to an average compensation of $60,000.  1,011 employees received more than $100,000 in compensation. The 34 most highly compensated employees were reported to be:

  • $4,285,223:  Mark R Neaman, Executive Chairman
  • $2,074,150:  Gerald P Gallagher, President and CEO
  • $1,768,023:  Julian E Bailes, Clinical Chairman ($652,013 is from a related org)
  • $1,622,009:  Jason L Koh, Clinical Chairman ($958,307 is from a related org)
  • $1,572,270:  Sean O’Grady, Chief Clinical Operations Officer
  • $1,559,611:  Gary E Weiss, Board Treasurer and CFO
  • $1,549,844:  Douglas M Silverstein, President, Evanston Hospital
  • $1,442,741:  Mark S Talamonti, Director and Clinical Chairman ($319,044 is from a related org)
  • $1,240,228:  Steven Smith, CIO
  • $1,226,160:  Robert R Edelman, Clinical Chairman ($244,627 is from a related org)
  • $1,094,109:  Kristen Murtos, Chief Admin and Strategy Officer
  • $1,032,405:  Jesse Peterson Hall, President, Glenbrook Park Hospital
  • $1,028,412:  Richard K Silver, Clinical Chairman ($151,456 from a related org)
  • $  996,264:  William R Luehrs, Chief Human Resources Officer
  • $  983,269:  Jeffrey S Vender, Former Clinical Chairman ($693,557 is from a related org)
  • $  960,899:  Joseph Szokol, Clinical Chairman ($504,376 from a related org)
  • $  952,211:  Theodore Mazzone, Director and Clinical Chairman ($113,130 is from a related org)
  • $  881,488:  William D Bloomer, Clinical Chairman ($461,824 is from a related org)
  • $  870,673:  Karen L Kaul, Clinical Chairman ($423,400 is from a related org)
  • $  806,047:  Brian Washa, SVP
  • $  795,539:  Michael S Caplan, Clinical Chairman ($128,020 is from a related org)
  • $  776,604:  Thomas H Hodges, Chief Investment Officer
  • $  737,974:  Samuel M Parnass, Director and Physician ($715,541 is from a related org)
  • $  730,656:  Demetrius (Jim) Maraganore, Clinical Chairman ($172,416 from a related org)
  • $  648,419:  Janardan D Khandekar, Medical Dir, Molecular Med Ctr ($48,640 from a related org)
  • $  601,812:  Mahalakshmi Halasyamani, Chief Quality and Transformation Officer
  • $  576,890:  Bernard G Ewigman, Clinical Chairman
  • $  569,401:  Frederick E Miller, Director and Clinical Chairman ($28,753 is from a related organization)
  • $  547,777:  Pablo Getman, VP, Genomic Research
  • $  526,784:  Jianfeng Xu, VP Translational Research
  • $  513,831:  Morris S Kharasch, Director and Physician ($438,831 is from a related organization)
  • $  506,525:  Mary Keegan, Chief Nursing Officer
  • $  457,067:  Harry L Jones, Chief Compliance Officer
  • $  450,535:  David F Lovinger, Hospitalist ($79,897 is from a related organization)

31 of the 34 (91%) of the most highly compensated employees are male while 3 of the 34 (9%) are female. 

The 34 most highly compensated employees received $36.5 million in compensation.

NUH paid for first class or charter travel. Specifically, first class air travel was provided to the CEO and Executive Chairman for business purpose travel.

The following individuals participated in a supplemental non-qualified retirement plan and accrued the following benefits:

  • Mark R Neaman:  $949,348
  • Sean O’Grady:  $543,162
  • Gerald P Gallagher:  $357,442
  • Douglas M Silverstein:  $240,144
  • Steven Smith:  $150,267
  • Gary Weiss:  $128,676
  • Kristen Murtos:  $58,182

In transactions involving interested persons, it was reported “substantial contributor #50” (no further detail provided) received $3.6 million for property management. In addition, “substantial contributor #66” (no further detail provided) received $4.6 million for medical equipment.

Maureen Kharasch, a family member of Dr Kharasch (listed above) received $202,517 for employment.

260 independent contractors received more than $100,000 in compensation. The five highest compensated independent contractors were reported to be:

  • $59,662,160:  Aramark Management Services of Chicago, IL for facilities/diet management
  • $30,356,508:  Pepper Construction Company of Barrington, IL for construction management
  • $20,054,567:  Power Construction Company LLC of Schaumberg, IL for construction management
  • $18,226,527:  University of Chicago Medical Center of Chicago, IL for medical education
  • $10,757,257:  Bulley & Andrews LLC of Chicago, IL for construction management

To read the IRS Form 990 (2017 for the year ending September 30, 2018), click here.

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