Executive Compensation at Scripps Health
Scripps Health is a non-profit, tax-exempt 501 (c) (3) healthcare provider that includes hospitals (5), clinics, medical centers, urgent care facilities, walk-in clinics, hospice care, surgery centers, specialty care centers and health plans. Although “Scripps Health” often refers to an entire healthcare system, it is important to point out that Scripps Health consists of many organizations – both non-profit and for-profit.
The executive compensation reported on the Form 990 (2017 for the year ending September 30, 2018) for “Scripps Health,” the non-profit, tax-exempt 501 (c) (3) – a single entity – is the subject of this post. Governed by 16 voting members (trustees) of a board, 14 of whom are independent, Scripps Health reported board composition being 10 males and 6 females.
Based in San Diego, California, Scripps Health reported $3.2 billion in revenue in 2018 (compared to $2.8 billion in 2017) most of which came from the delivery of healthcare. Expenses totaled $3 billion (including nearly $200 million in depreciation) with the largest expenses being compensation ($1.3 billion), fees for services ($600 million), and medical supplies ($500 million). At year-end, net assets were $4 billion (compared to $3.7 billion at year-end 2017).
17,443 employees received $1.3 billion in compensation in 2018, which equates to an average compensation of $75,000. 3,111 employees received more than $100,000 in compensation with the 22 most highly compensated employees reported to be:
- $9,840,956: Christopher Van Gorder, President and CEO/Trustee
- $5,713,028: June Komar, Corporate EVP, Strategy and Admin
- $3,684,197: Robin Brown, Chief Executive/SVP
- $2,877,330: Richard R Sheridan, Sec/Corp SVP-HR/General Counsel
- $1,958,171: Richard Rothberger, Treasurer/EVP/CFO
- $1,249,196: Gary Fybel, Chief Executive, SVP
- $1,148,300: Shiraz Fagan, Chief Executive, SVP
- $1,143,545: James LaBelle, Corporate SVP, Chief Medical Officer
- $1,139,159: Thomas Gammiere, Chief Executive, SVP
- $ 979,651: Barbara Price, Corporate SVP, Business and Service Line Development
- $ 968,613: Victor V Buzachero, Former Key Employee
- $ 958,692: Carl Etter, Chief Executive, SVP
- $ 828,011: Richard Neale, Corporate EVP, Chief Growth Officer
- $ 798,114: John Engle, Corp SVP, Chief Development
- $ 785,845: Marc A Reynolds, Corporate SVP, Payer Relations
- $ 710,370: James Crowder, Corporate SVP, CIO
- $ 655,428: Robert T Hoff, Corporate VP, Horizontal Ops
- $ 634,313: Bruce Rainey, Corporate VP, Construction/FACS
- $ 626,989: Mary Ellen Doyle, Corp VP/Nursing Ops
- $ 617,979: David Cohn, Corporate VP, Revenue Cycle
- $ 611,529: John Poole, Corporate VP, System Improvement
- $ 574,267: Bradley Ellis, Corporate VP, Asst General Counsel
19 of the 22 (86%) most highly compensated employees are male while 3 of the 22 (14%) are female. 8 of the 10 most highly compensated employees are male while 2 are female. The most highly compensated employee was Christopher Van Gorder who received nearly $10 million in 2018.
Scripps Health pays for the cost of a membership for a business networking club in San Diego for the CEO, which is used for business purposes. The membership fee was $1,466 in 2018.
Certain executives receive an automobile allowance which is included as taxable wages.
Scripps Supplemental Retirement Plan (SERP) provides retirement benefits to certain key employees. It has been closed to new employees since 2001. The following individuals received payments from the SERP plan in 2017:
- Christopher Van Gorder: $3,350,352
- Richard R Sheridan: $820,944
- June Komar: $2,228,895
- Robin Brown: $1,327,005
Effective April 1, 2014, Scripps Health provided deferred compensation arrangements to executives in the form of loans to purchase life insurance products to fund post retirement income. This plan is called the Supplemental Accumulation Retirement Account (SARA). The following individuals received payments from the SARA plan in 2017:
- Christopher Van Gorder: $237,738
- Richard Rothberger: $516,750
- Richard R Sheridan: $25,809
- Victor V Buzachero: $226,456
- Tomas Gammiere: $91,573
- Gary Fybel: $256,194
- Barbara Price: $83,220
- Carl Etter: $68,396
- Robin Brown: $108,219
- Marc A Reynolds: $141,216
- John Engle: $41,486
- Shiraz Fagan: $95.500
- Bruce Rainey: $41,097
- Mary Ellen Doyle: $90,143
- Robert T Hoff: $70,838
- Richard Neale: $44,441
- David Cohn: $34,891
- Bradley Ellis: $26,555
Christopher Van Gorder received a loan of $10,023,866 as deferred compensation. The balance due is $11,610,229.
June Komar received a loan of $2,769,010 as deferred compensation. The balance due is $3,207,229.
Richard Sheridan received a loan of $4,063,606 as deferred compensation. The balance due is $4,706,706.
Robin Brown received a loan of $2,668,899 as deferred compensation. The balance due is $3,091,276.
140 independent contractors received more than $100,000 in compensation. The five most highly compensated independent contractors were reported to be:
- $287,891,979: Scripps Clinic Medical Group, of La Jolla, CA for physician services
- $ 46,992,729: Scripps Coastal Medical Group, of San Diego, CA for physician services
- $ 27,285,099: Medimpact Healthcare Systems, of San Diego, CA for pharmaceutical services
- $ 20,025,677: Scripps Hospital Inpatient Provider, of San Diego, CA for physician services
- $ 14,983,561: Emergency Acute Care Med Corp, of San Diego, CA for physician services
To read the IRS Form 990 (2017 for the year ending September 30, 2018), click here.
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I would agree that it doesn’t make sense for all the perks shown in this report to be absorbed by the donations from the public. For example, when many for profit businesses hire people, they review health insurance and investment programs that you as an employee deduct from your pay and the company matches, up to a certain percentage. Unless this non profit is doing that, they are taking advantage of the donors….
The executive compensation is posted because the non-profit does not report these details on their website, so that the public (who is asked to make contributions to this organization) has access to this information and knows how revenue is spent. People also want to know why their insurance premiums are high and although the answer is more complicated than executive compensation, compensation is certainly part of the equation. There is also dispute regarding first class travel, companion travel, supplemental retirement plans, health and social club dues and initiation fees, and more perks. Should non-profits be using public money for these expenses? I can’t help but think the answer is no.
While I have not read any reviews of this specific non profit health care, I would expect that they have an excellent care rating, based on the compensation that the top tier employees receive. I know that the cost of living is very high in their region, however they are more than compensated for that factor. With the amounts being received they all have access to tax attorneys and experts that can help them minimize their annual state and federal income taxes. Their top person must be very qualified and maybe the key start up, with the amount of compensation shown….