Executive Compensation at Kaiser Health (2020)

Kaiser Health is one of many terms (Kaiser, Kaiser Permanente, etc) that refers to one of the nation’s largest not-for-profit health care insurers and providers with more than 12 million members (primarily in California but also in Hawaii, Colorado, Georgia, Oregon, Washington, Virginia, Maryland, and the District of Columbia). With 39 hospitals, more than 600 medical offices, and about 225,000 employees, Kaiser Health is considered one of the leaders in the industry.

Kaiser Health is comprised of the health plan (Kaiser Foundation Health Plan, Inc), the hospitals (Kaiser Foundation Hospitals) and the medical groups (Permanente Medical Groups) although there are numerous non-profits that make up the entire organization. The focus of this post is on the executive compensation reported on the Form 990 of the Kaiser Foundation Health Plan, Inc. (KFHP) because this organization reports the compensation for the key executives including the Chairman and CEO (as opposed to a related organization reporting compensation from a related organization).

Key financial information reported on the Form 990 (2020) includes the following:

Total revenue was $67 billion from three primary sources:  member dues, which appears to be the organizations within the Kaiser Health system ($45 billion); medicare ($17 billion), and other program services and supplemental revenue ($4 billion).

Expenses totaled $64 billion with the largest expenses reported to be:  basic contractual payments ($41 billion), supplies and purchased services ($14 billion), office-related expenses ($4 billion), and compensation ($4 billion).

28,192 employees received $4 billion in compensation, which equates to an average compensation of about $140,000.  However, only 11,895 employees received more than $100,000 in compensation with the 69 most highly compensated employees reported to be:

• $17,268,060:  Gregory Adams, Chairman and CEO
• $ 6,674,960:  Richard Daniels, EVP, Chief Information Officer
• $ 5,580,333:  Janet Liang, Regional President, Northern CA
• $ 5,086,656:  Kathryn Lancaster, EVP and CFO
• $ 4,886,355:  Arthur Southam, EVP, Health Plan Operations
• $ 4,643,773:  Julie Miller-Phipps, Region President, Southern CA
• $ 4,300,195:  Kimberly Horn, EVP, Group President, MOC
• $ 3,117,144:  Mark Zealman, SVP, General Counsel and Secretary
• $ 2,882,881:  Anthony Barrueta, SVP, Government Relations
• $ 2,557,223:  Chuck Bevilacqua, SVP, Health Plan Service and Admin
• $ 2,360,352:  Wade Overgaard, SVP, Health Plan Ops – CA
• $ 2,337,223:  Michael Rowe, SVP, Chief Business Development and Strategy Executive
• $ 2,009,791:  George Disalvo, SVP, CFO Southern CA
• $ 2,040,901:  Christian Meisner, SVP, Chief HR Officer
• $ 2,011,912:  Arlene Peasnell, SVP, HR and Labor Relations
• $ 1,929,722:  Paul Swenson, EVP, Chief Admin Officer
• $ 1,892,780:  Thomas Meier, SVP, Corporate Treasurer
• $ 1,755,834:  Laurel Junk, SVP, Enterprise Shared Services
• $ 1,748,080:  Thomas Henenburg, Interim Regional President – NCA
• $ 1,747,910:  Roland Lyon, SVP, National Del System Strategy
• $ 1,716,511:  Jodie Lesh, SVP, Transformation Innovation
• $ 1,650,000:  Ronald Vance, Interim Regional President, HI
• $ 1,639,981:  Barbara Choucair, SVP, Chief Health Officer
• $ 1,626,427:  Chandrika Bhalla, SVP, CFO – NCAL
• $ 1,588,985:  Yazdı Bagli, EVP, Enterprise Business Services
• $ 1,547,147:  James Simpson, Region President, GA
• $ 1,507,754:  Toby Douglas, SVP, National Medicaid Programs
• $ 1,485,826:  William Caswell, SVP, Operations
• $ 1,439,033:  Vanessa Benavides, SVP, Chief Compliance and Privacy Officer
• $ 1,407,902:  Alfonse Upshaw, SVP, Corporate Controller, CAO
• $ 1,396,349:  Christine Robisch, SVP, Operations – Opt Strategy and Implementation
• $ 1,394,044:  Mick Diede, SVP, Chief Actuary
• $ 1,374,496:  Diane Comer, EVP, Chief Info and Tech Officer
• $ 1,309,093:  Thomas Curtin Jr, SVP, National Sales and Account Management
• $ 1,304,370:  Christine Paige, SVP, Marketing and Internet Services
• $ 1,277,239:  Greg Christian, Regional President – HI
• $ 1,263,851:  Donald Orndoff, SVP, NFS
• $ 1,231,601:  Patrick Courneya, EVP, Chief Medical Officer
• $ 1,171,949:  Amarylis Gutierrez, SVP, Chief Pharmacy Officer
• $ 1,019,069:  John Yamamoto, Assistant Secretary
• $  990,128:  Charles Columbus, SVP, Chief HR Officer
• $  948,165:  Catherine Tirey, SVP, Chief Communications Officer
• $  896,309:  Kathryn Beiser, SVP, Chief Communications Officer
• $  882,953:  Philip Young Jr, Assistant Secretary
• $  717,405:  Matthew Weber, Assistant Secretary
• $  710,326:  Hong-Sze Yu, VP, Board and Corporate Gov, and Asst Secretary
• $  692,291:  Tami Lamp, SVP, Chief HR Officer
• $  687,034:  Ryan Jenson, Interim Corp Controller and CAO
• $  619,653:  Carrie Plietz, Regional President, NCAL
• $  612,278:  Kristin Bear, Assistant Secretary
• $  536,050:  Frank Richardson, Assistant Secretary, HI
• $  513,119:  David Underriner, Region President – HI
• $  432,994:  Bernice Gould, Assistant Secretary
• $  385,885:  Rochelle Roth, Assistant Secretary
• $  308,992:  Judith A Johansen, Director
• $  306,712:  Margaret Porfido, Director
• $  304,786:  Andrew Bindman, EVP, Chief Medical Officer
• $  284,576:  Cynthia A Telles, Director
• $  283,580:  Leslie S Heisz, Director
• $  280,668:  David F Hoffmeister, Director
• $  271,719:  Gerald McCall, SVP, Operations
• $  263,561:  Jeffrey E Epstein, Director
• $  262,514:  Maryann Bodayle, Secretary
• $  258,538:  Ramon F Baez, Director
• $  252,593:  Richard P Shannon, Director
• $  247,617:  A Eugene Washington, Director
• $  240,903:  Regina M Benjamin, Director
• $  234,678:  David J Barger, Director
• $  223,000:  Matthew T Ryan, Director

As illustrated above, the 69 most highly compensated employees received $129 million in compensation.  42 of the 69 (61%) of the most highly compensated employees are male while 27 (39%) are female.  6 of the 10 most highly compensated employees are male while 4 are female.

6 of the most highly compensated employees received $120 million in compensation over the past 4 years:

Gregory Adams:  $40 million

• 2020:  $17,268,060
• 2019:  $ 6,213,257
• 2018:  $10,226,544
• 2017:  $ 6,589,138

Arthur Southam:  $19 million

• 2020:  $4,886,355
• 2019:  $5,837,783
• 2018:  $3,944,031
• 2017:  $4,007202

Kathryn Lancaster: $19 million

• 2020:  $5,086,656
• 2019:  $6,720,335
• 2018:  $3,574,418
• 2017:  $3,723,333

Richard Daniels:  $16 million

• 2020:  $6,674,960
• 2019:  $3,958,930
• 2018:  $3,414,348
• 2017:  $1,961,118

Janet Liang:  $14 million

• 2020:  $5,580,333
• 2019:  $3,542,706
• 2018:  $2,478,669
• 2017:  $2,003,262

Julie Miller-Phipps:  $12 million

• 2020:  $4,643,773
• 2019:  $3,676,934
• 2018:  $1,989,458
• 2017:  $1,813,739

The Form 990 also reports:

• First class or charter travel was paid for by the organization. According to the 990 “first class travel is permissible as an ordinary business expense for all Board of Directors, Chief Executive Officers, and 21 other officers…”
• Travel for companions was paid for by the organization, “as approved by senior management infrequently..”
• Personal services were paid for by the organization.  Specifically, “car and security service is approved for senior management in connection with business related travel.  The CEO’s non business transportation is included in compensation tax indemnification and gross up payments.”
• The organization made tax indemnification or gross up payments – “limited to partial tax gross up under relocation policy , CEO transportation, and security and as approved on a limited basis by senior management.
• A housing allowance was provided on a limited basis to 7 officers for relocation.
• For information on severance payments and supplemental non-qualified retirement plan contributions, see the Form 990, Schedule J, Part III, Supplemental Information.
• The organization has more than $2.4 billion in net assets.

2,695 independent contractors received more than $100,000 in compensation with the five (5) most highly compensated reported to be:

• $20,698,404,351:  Kaiser Foundation Hospitals, of Pasadena, CA for medical services
• $14,011,736,943:  The Permanente Medical Group, of Oakland, CA for medical services
• $10,566,925,659:  S. California Permanente Medical Group, of Pasadena, CA for medical services
• $    289,834,562  Hawaii Permanente Medical Group, of Honolulu, HI for medical services
• $    198,056,948:  Easter Seals Southern California, of Santa Ana, CA for health services

As illustrated above, the 4 highest compensated contractors appear to be related or affiliated with the organization.

To read the IRS Form 990 (2020), click here.