Executive Compensation at Memorial Hermann Health (Texas)

Memorial Hermann Health System (MHHS) is a Houston-based tax-exempt, non-profit healthcare provider with more than 29,000 employees and 6,000 physicians that serve in 17 hospitals (14 that the organization owns and 3 in which they have joint ventures) and nearly 300 care delivery sites in the Houston, Texas metropolitan area.

MHHS consists of many organizations (non-profits, corporations, trusts, and partnerships) but for the purpose of this post, the executive compensation reported on MHHS – a 501 (c) (3) – is addressed.

Key financial information on MHHS, as reported on the Form 990 (2018) include:

1. There are 20 members (directors) in the governing body (Board of Directors), 18 of whom are independent. 17 of the 20 (85%) directors are male while 3 of the 20 (15%) are female.
2. Total revenue was $5.4 billion (compared to $4.8 billion in 2017) most of which came from patient services (net) – $5.1 billion.
3. Expenses totaled $4.9 billion (including nearly $300 million in depreciation) with the five largest expenses reported to be:  compensation ($2.2 billion), fees for services ($867 million), medical supplies ($812 million), office-related expenses ($309 million), and equipment rental and maintenance ($180 million).
4. Net assets increased from $4.1 billion to $4.7 billion at year-end, an improvement attributable to spending less than received and a $150 million change in net assets.

28,763 employees received $2.2 billion in compensation, which equates to an average compensation of $78,000.  3,644 employees received more than $100,000 in compensation with the 21 most highly compensated reported to be:

• $2,825,968:  Charles D Stokes, CEO, President
• $2,343,422:  David Bradshaw, Former Key Employee
• $2,204,477:  Erin S Asprec, EVP, Acute Care Services/CTO
• $1,603,063:  Myron M Shabot, EVP, CCO
• $1,554,333:  Rodney Brace, Former Key Employee
• $1,456,626:  Brian Dean, EVP, CFO, Treasurer
• $1,288,251:  Deborah Gordon, EVP, CAO, CLO, Secretary
• $1,280,387:  Anthony P Frank, SVP/CAO
• $1,230,198:  Carroll E Aulbaugh, EVP, CFO, Treasurer
• $  983,514:  Angela Shippy, SVP, CQO
• $  974,469:  Joshua Urban, SVP, CEO-NE/TW
• $  896,257:  Gregory L Haralson, SVP, CEO-SW/SL
• $  884,608:  Paul C O’Sullivan, SVP, CEO-Memorial City
• $  865,945:  Susan Distefano, SVP, CEO-Children’s Hospital
• $  829,126:  Heath Rushing, SVP, CEO-Cypress/Katy
• $  757,633:  James McCarthy, EVP, CMO*
• $  757,108:  Kyle Price, SVO, CEO-SE/PL/Heartvas
• $  755,815:  Gary Kerr, Former Highly Compensated Employee
• $  627,972:  Amanda Hammel, SVP, CIO
• $  505,286:  Warren Shea, VP, Asst Secretary
• $  483,839:  Keith Alexander, Former Key Employee

16 of the 21 (76%) most highly compensated employees are male while 5 of the 21 (24%) are female.

1,137 independent contractors received more than $100,000 in compensation with the five (5) most highly compensated reported to be:

• $172 million:  JT Vaughn Construction, of Houston, TX for contractor
• $ 55 million:  Crothall Healthcare, of Chicago, IL for housekeeping
• $ 26 million:  Tellepsen Builders, of Houston, TX for contractor
• $ 17 million:  Siemens Medical Solutions USA, of Malvern, PA for contract services
• $ 14 million:  Forney Construction, of Houston, TX for construction

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