Executive Compensation at Spectrum Health System (Michigan)

The Spectrum Health System is a tax-exempt integrated healthcare system based in Grand Rapids, Michigan. With dozens of related and affiliated non-profit organizations that include 15 hospitals, 12 urgent care facilities, 43 labs, physician practices, a health insurer (Priority Health) and more, the Spectrum Health System generally refers to the whole organization. This post addresses the executive compensation reported on the IRS Form 990 (2017 for the year ending June 30, 2018) for the Spectrum Health System Group Return (SHSGR).

SHSGR is managed by a board with 179 voting members/directors/trustees, 100 of whom are independent (which appears to mean there are 79 voting members who are related to at least one other board member). 147 are listed on the Form 990, of which 93 (63%) are male while 54 (37%) are female.

Key information to know about SHSGR include the following:

• SHSGR reported total revenue of $3.3 billion (compared with $3.1 billion the prior year), most of which came from program services (the provision of healthcare and payment).
• Expenses totaled $3 billion (not including $164 million in depreciation) with the 3 largest expenses reported to be compensation ($1.635 billion), medical supplies ($462 million), and shared services/management fees ($448 million). It is unclear who shared services or management fees were paid to.
• At year-end, SHSGR reported total net assets of $1.4 billion (compared to $1.3 billion at the end of the prior year).

24,770 employees received $1.635 billion in compensation which equates to an average compensation of $66,000.  1,717 employees received more than $100,000 in compensation. The 76 most highly compensated employees were reported to be:

• $3,717,268:   Richard Breon, Director, SHF*
• $2,690,026:  Carole Montgomery, VP, Clinical Integrated Pathways SHMG (part year)
• $1,869,655:  Christina Freese-Decker*
• $1,620,239:  Seth Wolk, Former President, SHMG*
• $1,618,750:  Joan A Budden*
• $1,564,074:  Ronald Knaus*
• $1,324,310:  Julie Lepzinski, SVP, COO, SHMG  (part year)
• $1,292,843:  Konstantin Elisevich, VP, Dept Chief, Neurosciences
• $1,274,606:  Darryl Elmouchi
• $1,163,999:  Marcus Haw, Dept Chief, HDVCH, Cardiothorac, SHH
• $1,159,875:  Patrick O’Hare*
• $1,098,086:  Gwen Sandefur
• $1,068,363:  Peter Jebson, VP, Dept Chief, Orthopaedics, SHMG
• $1,016,543:  Todd Vitaz, Division Chief, Neurosurgery, SHMG
• $  906,339:  Steven Heacock*
• $  892,876:  Douglas Apple, Former Interim President, SHMG
• $  886,759:  Robert Connors, President, HDVCH, SHH
• $  875,987:  Mark Chircop
• $  869,623:  Mary Anne Jones, Director, SHU & SHK*
• $  845,905:  Ashraf Mansour, Former Vice Chair, SHMG
• $  809,785:  Thomas McGraw, Former Secretary, SHMG*
• $  791,869:  Douglas Welday
• $  760,044:  Jay Labine, Director, SHCC*
• $  700,753:  Michael Harrison, Director, SHMG
• $  675,393:  Judy Smith, Director, SHU & SHK (part year)
• $  640,465:  William Jewell, Secretary, SHH
• $  609,782:  Jason Slaikeu
• $  591,385:  Matthew Steensma, Director, SHMG
• $  573,125:  Brian Brasser
• $  567,436:  David Ottenbaker
• $  564,253:  David Krhovsky
• $  534,117:  Randall Stasik, President, SHGM
• $  500,401:  Sheryl Lewis-Blake, President, SHP
• $  499,378:  Mathew Denenberg
• $  492,222:  Kenneth Fawcett, Jr.
• $  488,350:  Mary Kay Vandriel, President SHBR & SHRC
• $  483,234:  Thomas Visser, Director, SHZ
• $  472,944:  Robert Fitzgerald, Director, SHMG
• $  470,940:  Melinda Johnson, Director, SHMG
• $  467,163:  Chad Tuttle
• $  451,440:  Ron Lewis, President, SHZ
• $  449,153:  Brett Zimmerman, Director, SHMG
• $  448,388:  Christopher Skinner, Director, SHBR (part year)
• $  443,522:  Randall Kelley, President, SHL
• $  434,112:  Brian Phillips, Treasurer, SHMG
• $  416,885:  Vicki Weaver, President, SHF
• $  413,836:  Lee Begrow, Director, SHMG
• $  412,371:  Leslie Jurecko, Director, SHMG (part year)
• $  406,685:  Lisa Price, Director, SHBR
• $  406,631:  Andrea Leslie, President, SHU & SHK
• $  401,290:  John Schuen, Vice Chair SHMG
• $  395,006:  Gregory Gadbois, Former Chair, SHMG*
• $  346,733:  James Davidson,
• $  339,232:  Martha Boonstra, Secretary, SHMG
• $  321,810:  Simin Beg, Director, SHMG
• $  321,518:  Allan Nelson, Director, SHL
• $  307,738:  Mary O’Callaghan, Director SHMG
• $  282,398:  James Tucci, Former President, SHMG
• $  282,305:  John Sella, Controller, SHGM
• $  278,837:  Patricia Hoepner, Director, SHRC
• $  272,852:  Controller, SHBR & SHRC
• $  266,555:  Zane Knoer, Director, SHL
• $  257,640:  Joseph Scallen,
• $  257,121:  Kevin Smith
• $  253,822:  Karen Pakkala
• $  247,688:  Kerri Nelson, Controller, SHL
• $  243,351:  Carla Neil, COO, SHP
• $  242,977:  Priscilla Mahar, COO, SHU & SHK
• $  235,168:  Ryan Johnson, Controller, SHU & SHK
• $  228,801:  Shelly Johnson, COO, SHGM
• $  214,122:  Ryan Powers, Controller, SHZ
• $  209,342:  Joseph Kiesney, COO, SHZ
• $  193,193:  Pauline Krywanski, Former SVP, Finance, SHMG
• $  191,670:  Catherine Rybicki, COO, SHBR & SHRC (part year)
• $  159,785:  Stephanie Murray
• $  154,307:  Michael King, Controller, SHP

A “*” indicates compensation was paid from a related/affiliated organization.

50 of the 76 (66%) most highly compensated employees are male while 26 of the 76 (34%) are female.

SPHGR paid for first class and/or charter travel. See the Form 990, Schedule J, Part III, Supplemental Information for more detail.

SPHGR paid for health or social club fees or initiation fees for 17 executive employees.

SPHGR made gross up payments and/or tax indemnification.  See the Form 990, Schedule J, Part III, Supplemental Information for more detail.

Supplemental non qualified retirement plan benefits (See Form 990, Schedule J, Part III, Supplemental Information for more detail) were reported to be:

• $1,020,747:  Carole Montgomery
• $  754,676:  Richard Breon
• $  378,031:  Thomas McGraw
• $  353,456:  Julie Lepzinski
• $  167,996:  Robert Connors
• $  101,870:  Randall Stasik
• $  95,889:  Christina Freese-Decker
• $  77,950:  Joan Budden
• $  73,867:  Ronald Knaus
• $  64,389:  Mary Anne Jones
• $  52,100:  Patrick O’Hare
• $  48,206:  Mark Chircop
• $  44,815:  Douglas Welday
• $  43,329:  Douglas Apple
• $  41,028:  Jay Labine
• $  40,442:  Steven Heacock
• $  36,811:  Pauline Krywanski
• $  32,220:  Sheryl Lewis-Blake
• $  29,510:  William Jewell
• $  28,105:  Brian Brasser
• $  27,894:  Chad Tuttle
• $  27,576:  Mary Kay Vandriel
• $  26,921:  Kenneth Fawcett Jr
• $  16,418:  Gwen Sandefur

For “Loans to and From Interested Persons” see the Form 990, Schedule L, Part II.

For “Business Transactions Involving Interested Persons” see the Form 990, Schedule L, Part III.

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