Executive Compensation at Christus Health

Christus Health is a tax-exempt non-profit healthcare system that supports “the healthcare ministries of the sponsoring congregations in extending the healing ministry of Jesus Christ in conformity with the Roman Catholic Church” which includes paying for first class for executives and board members and companion travel (I’m fairly confident Jesus Christ would prefer revenue be spent on helping the sick and the poor than on flying employees first class).

The Christus Healthcare system has more than 600 healthcare centers staffed by 45,000 employees in Texas, New Mexico, Arkansas, Louisiana, Mexico, Chile, and Columbia.

Christus Health is based in Irving, Texas and consists of dozens of non-profit organizations and taxable corporations, trusts, and partnerships.  This post reports the executive compensation of Christus Health (CH) – a tax-exempt non-profit 501 (c) (3) that provides management and oversight to the entire system known as Christus Health. There are 18 voting members of the governing body, 8 of whom are independent.  The Form 990 lists 19 voting members (appears to be due to timing differences, 13 (68%) of whom are male while 6 (32%) are female.

The most recent Form 990 (2018 for the year ending June 30, 2019) reports the following key information:

Total revenue was $737 million with most revenue coming from related/affiliated organizations paying service, management, and capitation fees ($531 million), premium revenue, which is not defined ($98 million) and investment and gains ($62 million).

During the same period, expenses totaled $773 million with the three largest expenses being compensation ($306 million), fees for outside services ($246 million) and office-related expenses ($146 million).

At year-end, CH had $642 million in net assets (compared to $1.1 billion at the beginning of the year. This change was primarily because of an “intracompany equity adjustment.” See the Form 990, Schedule O, Supplemental Information for more detail).

3,503 employees received $306 million in compensation, which equates to an average compensation of $87,000.  582 employees received more than $100,000 in compensation with the 26 most highly compensated reported to be:

• $8,344,473:  Ernie W Sadau, President, CEO
• $4,818,104:  Randolph W Safady, EVP, CFO
• $4,679,167:  Jeffrey M Puckett, EVP, COO
• $3,971,733:  Linda K McClung, EVP, CAO
• $3,509,762:  Paul D Generale, EVP, Chief Strategy Officer
• $3,308,061:  Marty F Margetts, EVP, Corp Services
• $2,532,356:  John A Gillean, EVP, Chief Medical Officer
• $1,981,075:  J Chris Glenney, SVP, Group Operations
• $1,866,677:  Stephen F Wright, Pres/CEO-LA Ministry (till 10/18)
• $1,743,159:  George S Conklin, SVP-CIO
• $1,719,135:  Gerald F Heeley, SVP, Mission and Ethics
• $1,558,865:  Patrick B Carrier, President, Santa Fe Ministry
• $1,526,636:  Christopher Karam, SVP, Group Ops LA
• $1,375,478:  N Todd Hancock, CEO GSHS
• $1,300,153:  Dominic J Dominguez, SVP, Group Operations, S Texas
• $1,246,986:  Alejandro Canavati, CEO, Chili Operations
• $1,232,777:  Sam Bagchi, SVP, Chief Medical Officer
• $1,143,609:  Steven Keuer, TMF CMO
• $1,139,122:  Scott Smith, SVP, Trinity Clinic
• $  941,848:  W Shannon Stansbury, SVP, Population Health
• $  894,278:  Maria Estela Chapa, CCTO SPOHN
• $  858,693:  J Lindsey Bradley Jr, Director (term 6/19)
• $  798,300:  Debra Pasley, SVP, CNO
• $  621,291:  Jeannie Frey, SVP, Chief Legal Officer (off 7/18)
• $  597,147:  Peter J Plantes, CEO, CPG (term 11/2017)
• $  486,078:  Joseph S Barcie, SVP, International Ops (term 10/17)

As listed above, the 26 most highly compensated employees received $54 million in compensation, which equates to an average of more than $2 million each.

22 of the 26 (85%) most highly compensated employees are male while 4 of the 26 (15%) are female.  9 of the 10 most highly compensated employees are male while 1 is a female. 19 of the 20 (95%) most highly compensated employees are male while 1 (5%) is a female.

CHI paid for first class travel, travel for companions and made gross up payments/tax indemnifications.  No detail was provided.

Severance payments were made:

• $843,286:  J Lindsey  Bradley
• $580,426:  Peter J Plantes
• $469,196:  Joseph S Barcie
• $285,061:  Nancy LeGros
• $154,308:  Stephen F Wright
• $ 89,854:  Patrick B Carrier
• $ 59,703:  Alex J Valdez

167 independent contractors received more than $100,000 in compensation. The 5 most highly compensated were reported to be:

• $39.9 million:  HHS Environmental Svcs, of Dripping Springs, TX for enviro services
• $ 6.4 million:  Griffin Capital Corp, of Irvine, CA for rental services
• $ 5.7 million:  De Lage Landon Financial, of Wayne, PA for rental services
• $ 4.8 million:  Dell Financial Services, of Round Rock, TX for rental services
• $ 4.3 million:  Optum360 LLC, of Eden Prairie, MN for mgmnt services

In conclusion, the 26 most highly compensated employees received $54 million in compensation that ranged from a low of a half million to a high of $8 million to Ernie Sadau, the President and CEO. In addition, the organization paid for first class travel, travel for companions, and provided gross up payments/tax indemnification.  All of this from a Christian organization that touts its devotion to Christian principles.  How does that square?

To read the IRS Form 990 (2018 for the year ending June 30, 2019), click here.