Executive Compensation at Mercyhealth (Wisconsin) 2018

Mercyhealth is a regional healthcare system with 7 hospitals and 85 primary and specialty care locations in southern Wisconsin and northern Illinois. Headquartered in Janesville, Wisconsin, Mercyhealth consists of many non-profit, tax-exempt organizations (9) and also owns several organizations that are taxed as corporations including Mercycare Insurance Company, Rockford Health Insurance (which is domiciled in Bermuda), and Mercycare HMO (which consolidated with Mercycare Insurance Company).

The entire Mercyhealth system (the largest employer in the area) has more than 8,000 employees compensated through the various non-profits and corporations. This post will list the most highly compensated employees as reported by Mercy Health System Corporation (MHSC) on the Form 990 (2017 for the year ending June 30, 2018) submitted to the IRS.  To find the most highly compensated employees at a specific hospital or related organization, see the corresponding Form 990.

MHSC is governed  by 8 voting members (directors) of the governing body (board of directors, 6 of whom are independent; 7 of the 8 directors (88%) are male while 1 (12%) is female.

In 2018, MHSC reported total revenue of $624 million (compared to $574 million the prior year), most of which was patient service revenue. Expenses totaled $603 million (including $26 million in depreciation) with compensation ($339 million) and medical supplies ($112 million) the two largest expenses.

4,205 employees were compensated $339 million, which equates to an average compensation of $81,000.  474 employees received more than $100,000 in compensation. The 19 most highly compensated employees are:

• $9,363,980:  Javon R Bea, Director/President
• $1,299,510:  Bradley Fideler, Physician
• $1,202,468:  Merle Rust, Physician
• $1,064,734:  Shahid Shekhani, Physician
• $  951,647:  Landon Riggs, Physician
• $  939,654:  Francis Kaveggia, Physician
• $  884,577:  John W Cook, VP/CFO
• $  552,707:  Mark L Goezler, Director/Physician
• $  525,162:  Sue A Ripsch, VP
• $  516,975:  Paul T Van Den Heuvel, VP
• $  422,378:  Ruth M Yarbrough, VP
• $  414,318:  E Patrick Cranley, VP
• $  389,571:  Joanna Bea Benning, VP
• $  373,308:  Barbara J Bortner, VP
• $  365,276:  Jennifer A Hallett, VP
• $  351,883:  Debra A Potempa, VP
• $  272,727:  Kathleen S Harris
• $  253,078:  Jennifer Hall, VP
• $  220,578:  Thomas R Jensen, VP

As illustrated above, the 19 most highly compensated employees received more than $20 million in compensation.  11 of the 19 (58%) are male while 8 of the 19 (42%) are female; 9 of the 10 most highly compensated employees are male while 1 is a female (note: the Form 990 does not disclose gender identity; the determination was made based on the name and a google search).

MHSC paid for the use of a personal residence.  Specifically, the CEO was provided with a residence, the cost of which was treated as taxable compensation. As of November, 2017, the CEO no longer used the residence.

MHSC paid for internet connection and communication costs for business purposes at his personal residence, which is treated as taxable compensation.

MHSC paid for income tax preparation services for the CEO (also treated as taxable compensation).

43 independent contractors received more than $100,000 in compensation with the 5 most highly compensated reported to be:

• $5.7 million:  EPIC Systems Corp, of Verona, WI for software/system maintenance
• $2.8 million:  MaGill Construction Co, of Elkhorn, WI for construction
• $1.9 million:  Lab Corp of America, of Burlington, NC for lab services
• $1.8 million:  Weatherby Locums, of Dallas, TX for physician services
• $1.7 million:  Comphealth, of Dallas, TX for physician services

To read the IRS Form 990, click here.