Executive Compensation at Sutter Health (CA)

Sutter Health generally refers to a healthcare system provider that operates in northern California. With more than 53,000 employees and 12,000 physicians that operate out of 24 hospitals and more than 200 clinics, Sutter Health is one of the largest tax-exempt non-profit integrated healthcare providers in California. But, Sutter Health is not just one organization; there are, in fact, dozens of organizations that make up Sutter Health. This post addresses the executive compensation at one of those organizations (Sutter Health) that employs about 9,000 employees or about 15% of their workforce that manage the overall system.

Governed by 15 directors, 13 of whom are independent, Sutter Health reported having 16 directors on the Form 990 (2018) of which 10 (63%) are male while 6 (37%) are female.

Based in Sacramento, CA, Sutter Health reported total revenue of $1.8 billion in 2018, most of which came from “management services exempt affil” which appears to mean from the related organizations within the system. Expenses totaled $1.8 billion (including $129 million in depreciation) with the largest expense being compensation. 9,225 employees received $910 million which equates to an average compensation of $99,000. 2,421 employees received more than $100,000 with the 21 most highly compensated reported to be:

• $4,786,122: Sarah Krevans, President and CEO, Sutter Health
• $2,088,724: Don L Wreden, SH SVP/Patience Experience
• $1,828,055: Peter Anderson, SH SVP/Chief Strategy Officer
• $1,806,404: James Conforti, SH SVP/COO ($18,087 from related org)
• $1,723,974: Jeff Sprague, SH SVP and CFO
• $1,657,724: Jeff Gerard, SVP, Strategy Services
• $1,509,047: Florence Di Benedetto, SVP and Gen Counsel, Asst Sec
• $1,404,741: Rishi Sikka, President, SH System Enterprise
• $1,396,765: Grant Davies, CEO, Valley Area Hospitals
• $1,276,688: Warren Browner, CEO, CPMC
• $1,270,402: Jonathan Manis, SH SVP, CIO ($49,696 from related org)
• $1,161,787: Jeff Burnich, SVP, SH Medical Network ($9,488 from related org)
• $1,122,267: Ed Berdick, Former SH SVP/Shd Svcs ($471,809 from related org)
• $1,146,768: Julie Petrini, CEO, Bay Area Hospitals
• $1,123,893: Elizabeth Vilardo-Morgan, CEO, SBMF
• $1,112,820: Jill Ragsdale, SVP, Chief People and Culture Officer
• $1,013,593: John Gates, CFO, SH Bay Area
• $ 791,613: Jeremy Eaves, CEO, Sutter Shared Services & SPS
• $ 630,260: Jeffrey Szczesny, SH VP, HR Operations
• $ 605,821: Michael Cohill, Former CEO, SMCS ($603,346 from related org)
• $ 269,712: Ed Erwin, Director, Real Estate Services, Asst Sec

The 21 most highly compensated employees received nearly $30 million in compensation. 16 of the 21 (76%) most highly compensated employees are male while 5 (24%) are female. The most highly compensated employee, Sarah Krevans received nearly $5 million in compensation.

Sutter Health paid for first class or charter travel. Specifically, “certain officers and key employees may upgrade to first class as business needs dictate.” What those business needs are is not explained. In addition, Sutter Health states “Upgrades are considered a necessary business expense.” How is first class travel in a tax-exempt non-profit organization considered a “necessary business expense?” Again, this is not explained.

Sutter Health paid for companion travel. Specifically, “spousal travel for board members , on certain occasions determined by the board chair, a spouse may accompany a board member to a board function.”

460 independent contractors received more than $100,000 in compensation with the 5 highest reported to be:

• $224 million: Herrerroboldt Partners, of San Francisco, CA for construction services
• $137 million: Rightsourcing, Inc., of Los Angeles, CA for contracted services
• $ 76 million: Rudolph and Sletten, of Redwood City, CA for construction services
• $ 48 million: Herrerro Builders, of San Francisco, CA for construction services
• $ 40 million: General Electric, of Waukesha, WI for repairs and maintenance

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