Executive Compensation at Christus Health (2020)

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 (including 60 hospitals) 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 16 voting members of the governing body, 9 of whom are independent.  The Form 990 lists 18 voting members (appears to be due to timing differences, 13 (72%) of whom are male while 5 (28%) are female.

The most recent Form 990 (2019 for the year ending June 30, 2020) reports the following key information:

Total revenue was $1 billion (compared to $737 million in 2019) with most revenue coming from related/affiliated organizations paying service, management, and capitation fees ($529 million), insurance premium revenue, which is not defined ($303 million), government grants ($107 million) and investment, gains, and royalties ($48 million).

During the same period, expenses totaled $895 million with the three largest expenses being compensation ($477 million), fees for outside services ($121 million) and office-related expenses, including insurance ($181 million).

At year-end, CH had $224 million (compared to $642 million in net assets at the beginning of the year). Despite spending less revenue than the organization collected, the deterioration in net assets was due primarily to prior year adjustments ($240 million) and “intercompany equity adjustments” that caused an adjustment to net assets ($307 million).

3,702 employees received $477 million in compensation, which equates to an average compensation of $129,000.  708 employees received more than $100,000 in compensation with the 35 most highly compensated reported to be:

$13,463,390:  Ernie W Sadau, President, CEO

$ 7,464,788:  Jeffrey M Puckett, EVP, COO

$ 6,304,703:  Randolph W Safady, EVP, CFO

$ 5,732,743:  Paul D Generale, EVP, Chief Strategy Officer

$ 5,636,981:  Linda K McClung, EVP, CAO (thru 8/2019)

$ 5,428,939:  Marty F Margetts, EVP, CAO

$ 4,465,157:  John A Gillean, EVP, Chief Medical Officer (thru 12/2019)

$ 2,454,713:  Gerald F Heeley, SVP, Mission and Ethics

$ 2,316,699:  George S Conklin, SVP-CIO (thru 12/019)

$ 1,550,336:  Sam Bagchi, SVP, Chief Medical Officer

$ 1,509,389:  Christopher Karam, SVP and Regional CEO

$ 1,422,758:  Charles T Hankins, SVP. Pediatrics and CMO, CHOSA

$ 1,379,409:  Dominic J Dominguez, SVP, Group Operations, S Texas

$ 1,327,552:  Steven Keuer, TMF CMO

$ 1,264,234:  Jeannie Frey, SVP, Chief Legal Officer (off 7/18)

$ 1,256,234:  J Chris Glenney, SVP, Group Operations NETX

$ 1,206,591:  Cris C Daskevich, SVP, Maternal Services and CEO, CHOSA

$ 1,177,156:  Alejandro Canavati, CEO, Chile Operations

$ 1,122,060:  Scott Smith, SVP, Trinity Clinic,Systems VP, CCMS

$ 1,086,590:  Fadi Nasrallah, SVP CMO Trinity Clinic

$ 1,048,678:  Osbert Blow, President/CMO Christus Spohn

$   984,307:  Mark Anderson, CMO, CRP TMF Health System

$   959,829:  M Shannon Stansbury, SVP, Population Health

$   933,741:  Kim Reynolds, SVP, Finance

$   870,728:  Debra Pasley, SVP, CNO

$   857,303:  Ryan Thompson, SVP, Revenue Cycle

$   853,957:  J Lindsey Bradley Jr, Director

$   788,473:  Tina Barker, SVP, Strategy Marketing and Dig

$   760,011:  Jon Manis, SVP, CIO (effective 1/2020)

$   726,862:  Gabriella Saenz, SVP, Corporate Services (effective 9/2019)

$   718,767:  Stephen F Wright, Pres/CEO-LA Ministry (thru 10/18)

$   656,806:  Kimberly King Webb, SVP, Chief HR Officer

$   532,683:  Peter Plantes, CEO, CPG (Term 11/2017)

$    395,219:  Irma Penaloza, Assistant Corporate Secretary

$   360,686:  Joseph Barcie, SVP, International Ops (Term 10/2017)

As listed above, the 35 most highly compensated employees received $80 million in compensation, which equates to an average of more than $2 million each.  The most highly compensated employee was Ernie Sadau who received $13.5 million in compensation. Mr. Sadau has received $46 million in compensation in the last eight (8) years:

• $13.5 million: 2020
• $ 8.3 million:  2019
• $ 6.2 million:  2018
• $ 5.2 million:  2017
• $ 4.6 million:  2016
• $ 3.6 million:  2015
• $ 2.8 million:  2014
• $ 2.0 million:  2013

24 of the 35 (69%) most highly compensated employees are male while 11 of the 35 (31%) are female.  9 of the 10 most highly compensated employees are male while 1 is a female. 17 of the 20 (85%) most highly compensated employees are male while 3 (15%) are female.

CHI paid for first class travel, travel for companions and made gross up payments/tax indemnifications. For more detail on these expenses, see the Form 990, Schedule J, Supplemental Information.

The following individuals received severance payments (included above):

• J Lindsey Bradley:  $843,286
• Stephen F Wright:  $680,004
• Peter J Plantes:  $504,321
• Joseph S Barcie:  $347,548
• Linda K McLung:  $266,152
• John A Gillean:  $120,240
• Nancy C LeGros:  $94,754

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

$44.9 million:  HHS Environmental Svcs, of Dripping Springs, TX for environmental services
$20.5 million:  Deloitte Consulting, of Houston, TX for consulting services
$20.1 million:  Aramark Healthcare Support, of Houston, TX for hospitality
$14.1 million:  Maxor National Pharmacy, of Port Arthur, TX for medical services
$ 8.4 million:  Methodist Willowbrook Hospital, of Houston, TX for medical services

In conclusion, the 35 most highly compensated employees received $80 million in compensation that ranged from a low of $360,000 to a high of $13 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 (2019 for the year ending June 30, 2020), click here.