Executive Compensation at Advocate Health and Hospitals Corp (2019)

Advocate Health and Hospitals Corp is a tax-exempt non-profit 501 (c) (3) and one of many organizations within Advocate Aurora Health (which was formed when Advocate Health Care (in Illinois) and Aurora Health (in Wisconsin) merged into one healthcare system (Advocate Aurora Health) in 2018. Based in Downers Grove, Illinois, AAH operates 26 hospitals and more than 500 out patient care sites staffed by 75,000 employees.

It is important to note AAH consists of numerous types of organizations including non-profits and for profit organizations. This post addresses the executive compensation at AHHC – one of the largest organizations in the network.

Advocate Health and Hospitals Corp (AHHC) is governed by 12 voting members (directors), 9 of whom are independent;  8 of the 12 (75%) are male while 4 of the 12 (25%) are female. 10 of the directors receive between $4,000 – $91,000 annually for an average of 1 hour of work per week.

In 2019, AHHC reported total revenue of $5.7 billion, with the 4 primary sources of revenue reported to be:

• $1.8 billion:  Medicare/Medicaid
• $1.2 billion:  Patient Services
• $1.3 billion:  Blue Cross/Managed Care
• $1.0 billion:  Pharmacy/Lab

Expenses totaled $5.5 billion (not including $237 million in depreciation) with the 6 largest expenses reported to be:

• $2,659 billion: Compensation
• $   717 million:  Medical Supplies
• $   770 million:  Other Intracompany Expenses
• $   473 million:  Fees for Services
• $   245 million:  Other Expenses (no detail provided)
• $   331 million:  Office-related Expenses

As listed above, compensation is the largest expense.  34,183 employees received nearly $2.7 billion, which equates to an average compensation of $78,000.  The 40 most highly compensated employees were reported to be:

• $5,964,082:  James Skogsbergh, President and CEO, Director*
• $3,438,990:  William P Santulli, EVP, COO*
• $2,595,828:  Dominic J Nakis, CFO and Treasurer*
• $2,296,068:  Mike Lappin, Secretary*
• $1,975,696:  Hamad Farhat, Neurosurgeon
• $1,743,015:  Vincent Bufalino, Chief Advocate Medical Group Officer*
• $1,709,217:  Kevin Brady, Chief Human Resources Officer*
• $1,671,457:  Richard Scott, SVP, Clinical
• $1,604,761:  Michael Farrell, President of Advocate Children’s Hospital
• $1,560,158:  Michael Grebe, Assistant Secretary, Chief Legal Officer*
• $1,539,091:  Scott Powder, Chief Strategy Officer*
• $1,512,608:  Barbara Byrne, Chief Information Officer*
• $1,365,406:  Demetrius Lopes, Neurosurgeon
• $1,344,536:  Kelly Jo Golson, Chief Marketing Officer*
• $1,303,318:  Ryan Trombly, Neurosurgeon
• $1,294,534:  Michel Ilbawi, Pediatric CV Surgery
• $1,269,405:  Egon Doppenberg, Former HCE Neurosurgeon
• $1,262,196:  Dean Karahalios, Former HCE Neurosurgeon
• $1,239,758:  Nan Nelson, Assistant Treasurer*
• $1,196,710:  Karen Lambert, President of Good Shepherd Hospital
• $1,137,128:  Dominica Tallarico, Former Key Employee
• $  992,662:  Richard Heim, President, Christ Medical Center
• $  978,133:  Kathy Bender Schwich, Chief Spiritual Officer*
• $  921,001:  Leslie Lenzo, Assistant Treasurer
• $  898,494:  Colleen Kannaday, President of Bromann and Eureka Hospital
• $  835,623:  Shelly Hart, Assistant Secretary*
• $  742,006:  Gary Stuck, Chief Medical Officer*
• $  714,587:  Terika R Mbanu, President of Lutheran General Hospital
• $  630,094:  James Doheny, Assistant Treasurer
• $  626,605:  Lee Sacks, EVP and Former Officer*
• $  597,380:  Nancy M Tinsley, President of Good Samaritan Hospital
• $  572,781:  Matthew Primack, Former Key Employee
• $  550,566:  Michael Kerns, Assistant Secretary*
• $  522,567:  Steve Huser, Assistant Treasurer*
• $  494,971:  James Slinkman, Assistant Secretary*
• $  480,761:  Rashard Johnson, President of Trinity and SS
• $  476,279:  Earl J Barnes II, Former Officer*
• $  448,292:  Kenneth Lukhard, Former Key Employee
• $  414,777:  Susan Campbell, Former Officer
• $  162,900:  David Fox Jr, Former Key Employee

The 40 most highly compensated employees received $51 million in compensation.  28 of the 40 (70%) are male while 12 of the 40 (30%) are female. The 10 most highly compensated employees are male.

A “*” indicates all or a portion of the compensation was from a related/affiliated organization.

AHHC paid for first class or charter travel, personal services, health or social club dues or initiation fees, and housing allowance or residence for personal use.  For more detail and information on the contributions to the Senior Executive Retirement Plan, see the Form 990, Schedule J, Part III, Supplemental Information.

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

• $17.5 million:  Phillips Law Office, of Chicago, IL for legal services
• $10.0 million:  Midwest Anesthesiologists, of Naperville, IL for medical services
• $ 9.6 million:  University of Chicago, of Chicago, IL for university services
• $ 8.3 million:  Cardiothoracic and Vascular Surgical, of Modena, IL for medical services
• $ 8.0 million:  Barry David Goldberg, of Chicago, IL for legal services

And lastly, it is important to note AHHC reported $5..3 billion in net assets at year-end – $400 million higher than the previous year (primarily due to unrealized gains on investments).

To read the IRS Form 990 (2019), click here.