Executive Compensation at Ballad Health
In 2018, two regional healthcare providers merged to form Ballad Health, an integrated healthcare system that serves northeast Tennessee, southwest Virginia, northwest North Carolina, and southeast Kentucky.
Based in Johnson City, Tennessee, Ballad Health includes 22 hospitals and numerous inpatient and outpatient medical service centers. The Ballad Health system contains dozens of non-profit organizations and taxable partnerships, trusts, and corporations.
This post addresses the executive compensation reported by one of those organizations: Ballad Health, a non-profit 501 (c) (3) that reports executive compensation. Ballad Health is governed by 11 voting members (directors), 10 of whom are independent, of the governing body (Board of Directors). 9 of the 11 (82%) are male while 2 of the 11 (18%) are female.
In 2020 (for the year ending June 30, 2020), Ballad Health reported total revenue of $56 million (compared to $45 million the prior year), most of which came from investment income and gains ($45 million) and wellness programs ($11 million).
Expenses totaled $110 million (not including $39 million in depreciation) with the 3 largest expenses being maintenance ($39 million), compensation ($22 million), and fees for services ($19 million). Maintenance appears to be high but this is because Ballad Health has significant real estate holdings ($576 million as a cost basis; after depreciation the net is $246 million) on its balance sheet.
2,578 employees received $22 million in compensation, which equates to an average compensation of less than $9,000. 138 employees received more than $100,000 in compensation with the 17 most highly compensated reported to be:
- $2,370,420: Alan Levine, President, CEO, Executive Chair
- $1,140,425: Marvin Eichorn, EVP, CAO
- $1,026,003: Lynn Krutak, EVP, CFO
- $ 980,153: Barton Hove, Former Officer Retired
- $ 867,461: Eric Deaton, EVP, COO
- $ 779,709: Tim Belisle, General Counsel
- $ 751,033: Anthony Keck, EVP, CPHO
- $ 749,886: Steve Kilgore, BHMA SVP
- $ 633,455: Monty McLaurin, CEO, NW Mrkt
- $ 616,951: Clay Runnels, EVP, Chief Pay Exec
- $ 605,377: Shane Hilton, SVP, CFO Market Ops
- $ 591,868: Lisa Smithgall, SVP, Chief Nursing Exec
- $ 569,665: Morris Seligman, Former EVP and CMO
- $ 507,269: Melissa Carr, SVP, Financial Management
- $ 449,719: Shana Tate, SVP
- $ 433,286: Pam Austin, SVP and CIO
- $ 350,377: Todd Dougan, Former Office, Retired
The 17 most highly compensated employees received nearly $14 million in compensation (or 64% of total compensation). That means of the total $22 million in compensation for 2,578 employees, $14 million was to 17 employees, and $8 million compensation was to 2,561 employees (this seems unlikely since $8 million/2561 equals $3,100. So there was either a lot of part time employees or an error in the number of employees reported).
12 of the 17 (71%) most highly compensated employees are male while 5 of the 17 (29%) are female. 9 o the 10 most highly compensated employees are male while 1 is a female.
Ballad Health spent significantly more than revenue and was able to do so because the organization had $663 million in net assets at the beginning of the year, which shrank to $617 million at year-end.
Ballad Health paid for first class travel or charter travel. To read about this expense and the non-qualified deferred compensation plan, see the Form 990, Schedule J, Part III Supplemental Information.
A loan of $2.8 million was made to Marvin Eichorn, the purpose of which was reported to be “split$life” (insurance?). The current balance due is $4.6 million.
43 independent contractors received more than $100,000 in compensation. The five most highly compensated were reported to be:
- $8.1 million: Data Blue, of Brentwood, TN for IT implementation
- $3.9 million: Impact Advisors, of Naperville, IL for IT Professional Adv services
- $2.5 million: MISYS Hlthcr System, LLC, of Raleigh, NC for electronic med records
- $2.3 million: Blood Connection, of Piedmont, SC for blood services
- $2.1 million: Change Healthcare, LLC of Alpharetta, GA for tech management
To read the IRS Form 990 (for the year ending June 30, 2020), click here.