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November 18, 2020

Executive Compensation at Sentara Healthcare

by Anne Paddock

Sentara Healthcare is a healthcare system with more than 28,000 employees who work at more than 300 sites of care including 12 hospitals and 4 medical groups in Virginia and northeastern North Carolina.  In addition, Sentara includes Optima Health, a health insurance provider for more than 500,000 people in Virginia and Ohio.

Although Sentara Healthcare generally refers to one organization, Sentara Healthcare includes dozens of organizations. For the purpose of this post, the executive compensation at Sentara Healthcare, a non-profit, tax-exempt 501 (c) (3) based in Norfolk, Virginia that employs the CEO and President and supporting staff is addressed.  It is important to note there are other related/affiliated organization (Sentara Hospitals, Sentara Medical Group, Sentara RMH Medical Center, etc) whose executive compensation will be covered in future posts.

Sentara Healthcare (the parent organization) reported total revenue of $228 million, of which $115 million came from support services from related organizations for which they provide management and oversight. In addition, $13 million came from management fees and inter-company interest and deferred gains.  The other primary source of income was from investment income and capital gains, which totaled $54 million.

Expenses totaled $167 million in 2018, most of which included compensation ($91 million), fees for services ($28 million), grants ($12 million), advertising and promotion ($11 million) and office expenses ($ 10 million). 696 employees received $91 million in compensation, which equates to an average compensation of $131,000.  However, only 174 employees received more than $100,000 in compensation which appears to mean there were some very highly compensated employees.

Sentara Healthcare is governed by 18 directors, 17 of whom are independent. On the Form 990 (2018), 19 directors are listed (due to timing differences), of which 16 (84%) are male and 3 (16%) are female.

The 21 most highly compensated employees were reported to be:

  • $6,136,276:  Michael M Dudley, Former Officer (comp from a related org)
  • $5,750,022:  Howard P Kern, President/CEO
  • $1,994,201:  Michael V Gentry, COO
  • $1,588,868:  Robert A Broermann, CFO
  • $1,178,618:  Mary L Blunt, Former Officer (comp from a related org)
  • $  942,956:  Megan R Perry, CVP, Mergers & Acquisitions
  • $  888,190:  Vicky G Gray, SVP, System Development
  • $  876,180:  Grace R Hines, CVP, System Integration
  • $  816,512:  Jeffrey P King, Secretary
  • $  732,710:  Genemarie W McGee, Former Officer (comp from a related org)
  • $  720,231:  Jordan R Asher, SHC SVP and Chief Physician Executive
  • $  700,294:  Terry M Gilliland, SHC SVP and Chief Physician Executive
  • $  646,512:  Becky C Sawyer, SVP/CHRO
  • $  632,636:  Douglas L Chaet, VP Managed Care Contracting
  • $  626,674:  Douglas M Thompson, VP, Decision Support
  • $  583,472:  Lester R Eljaiek, VP, Corporate Finance
  • $  578,800:  Kenneth Krakaur, Former Officer
  • $  476,886:  Vikki Charles, VP Corporate Finance
  • $  451,815:  Michael V Taylor, Former Officer
  • $  386,438:  Bertram S Reese, Former Officer (comp from a related org)
  • $  206,378:  Samuel J Hawley, Former Officer

14 of the 21 (67%) most highly compensated employees are male while 7 (33%) are female. Of the 5 most highly compensated employees, 4 are male while 1 is a female. Of the 10 most highly compensated employees, 5 are male while 5 are female.

Sentara Healthcare paid for first class or charter travel. Specifically, charter travel was used by certain officers for business purposes.

Sentara Healthcare provided housing allowances or a residence for personal use, gross up payments and tax indemnification. Specifically, relocation expenses of executive recruits were paid for, including temporary housing and the additional taxes associated with this benefit, all of which were treated as taxable income.

In 2018, the following employees received vested distributions (included in above comp) from the Sentara Supplemental Executive Retirement Plan:

  • Michael Gentry:  $667,805
  • Howard Kern:  $590,013
  • Kenneth Krakaur:  $578,800
  • Bertram Reese:  $386,438
  • Grace Hines:  $239,635
  • Robert Broermann:  $149,185
  • Mary Blunt:  $116,637
  • Terry Gilliland:  $109,005
  • Vikki Gray:  $107,487
  • Michael Dudley:  $96,921
  • Megan Perry:  $89,768
  • Genemarie McGee:  $58,950
  • Douglas Thompson:  $47,522
  • Jeffrey King:  $46,981

Sentara Healthcare provided a loan in the amount of $116,650 to Michael Dudley, a former officer with the stated purpose being “employment tax advance.”  The current amount due is $118,699.

67 independent contractors received more than $100,000 in compensation. The 5 most highly compensated were:

  • $3,362,166:  PMA Companies, of Philadelphia, PA for commercial insurance underwriting
  • $2,011,094:  Optuminsight, of Eden Prairie, MN for management consulting
  • $1,625,438:  Highland Associates, Inc., of Birmingham, AL for investment management fees
  • $1,603,443:  KPMG, LLC, of Chicago, IL for professional services
  • $1,571,212:  Willis Towers Watson US LLC, of of Norfolk, VA for management consulting

As noted above, Sentara Healthcare, the management non-profit, spent more than $3.5 million on management consulting.

To read the IRS Form 990 (2018), click here.

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