Executive Compensation at Kaiser Health (2021)

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 (2021) includes the following:

Total revenue was $68 billion from three primary sources:  member dues, which appears to be the organizations within the Kaiser Health system ($47 billion); medicare ($17 billion), and other program services and supplemental revenue ($5 billion).

Expenses totaled $67 billion with the largest expenses reported to be:  basic contractual payments ($42 billion), supplies and purchased services ($16 billion), office-related expenses ($4 billion), and compensation ($3.5 billion).

28,507 employees received $3.5 billion in compensation, which equates to an average compensation of about $123,000.  However, only 12,024 employees received more than $100,000 in compensation with the 66 most highly compensated employees reported to be:

• $15,562,224:  Gregory Adams, Chairman and CEO
• $ 5,224,405:  Arthur Southam, EVP, Health Plan Operations
• $ 5,027,913:  Kathryn Lancaster, EVP and CFO
• $ 4,939,343:  Janet Liang, Regional President, Northern CA
• $ 4,725,013:  Kimberly Horn, EVP, Group President, MOC
• $ 3,535,603:  Julie Miller-Phipps, Region President, Southern CA
• $ 2,973,295:  Mark Zealman, SVP, General Counsel and Secretary
• $ 2,439,859:  Chuck Bevilacqua, SVP, Health Plan Service and Admin
• $ 2,403,336:  Christian Meisner, SVP, Chief HR Officer
• $ 2,318,134:  Wade Overgaard, SVP, Health Plan Ops – CA
• $ 2,196,305:  Paul Swenson, EVP, Chief Admin Officer
• $ 2,068,523:  Thomas Henenburg, Interim Regional President – NCA
• $ 2,023,403:  Richard Daniels, EVP, Chief Information Officer
• $ 1,909,021:  Roland Lyon, SVP, National Del System Strategy
• $ 1,895,063:  Carrie Plietz, Regional President, NCAL
• $ 1,886,676:  Vanessa Benavides, SVP, Chief Compliance and Privacy Officer
• $ 1,864,304:  Laurel Junk, SVP, Enterprise Shared Services
• $ 1,860,848:  Yazdı Bagli, EVP, Enterprise Business Services
• $ 1,778,037:  Anthony Barrueta, SVP, Government Relations
• $ 1,763,228:  Thomas Meier, SVP, Corporate Treasurer
• $ 1,756,267:  George Disalvo, SVP, CFO Southern CA
• $ 1,740,401:  Christine Robisch, SVP, Operations – Opt Strategy and Implementation
• $ 1,727,338:  Chandrika Bhalla, SVP, CFO – NCAL
• $ 1,545,025:  Michael Rowe, SVP, Chief Business Development and Strategy Executive
• $ 1,516,979:  Diane Comer, EVP, Chief Info and Tech Officer
• $ 1,497,813:  Linda Knodel, SVP, National Patient Care Services
• $ 1,459,019:  James Simpson, Regional President, GA
• $ 1,414,315:  Arlene Peasnell, SVP, HR and Labor Relations
• $ 1,411,594:  William Caswell, SVP, Operations
• $ 1,350,202:  Alfonse Upshaw, SVP, Corporate Controller, CAO
• $ 1,273,496:  Marlene Foster, VP, Payroll and HCM Implementation
• $ 1,255,102:  Greg Christian, Regional President – HI
• $ 1,253,524:  Thomas Curtin Jr, SVP, National Sales and Account Management
• $ 1,227,440:  Donald Orndoff, SVP, NFS
• $ 1,192,061:  Mick Diede, SVP, Chief Actuary
• $  979,356:  Mary Beth Lang, SVP, Chief Pharmacy Officer
• $  963,853:  Andrew Bindman, EVP, Chief Medical Officer
• $  953,592:  Catherine Hernandez Tirey, SVP, Chief Communications Officer
• $  938,371:  Philip Young Jr, Assistant Secretary
• $  879,444:  John Yamamoto, Assistant Secretary
• $  870.325:  Ronald Vance, Interim Regional President
• $  836,401:  Marcus Hoffman, SVP, CFO – SCAL & Hawaii
• $  739,497:  Hong-Sze Yu, VP, Board and Corporate Gov, and Asst Secretary
• $  732,659:  Ryan Jenson, Interim Corp Controller and CAO
• $  717,402:  Jennifer Goldberg, Assistant Secretary
• $  692,707:  Amarylis Gutierrez, SVP, Chief Pharmacy Officer
• $  657,131:  Bechara Choucair, SVP, Chief Health Officer
• $  538,418:  Kristin Bear, Assistant Secretary
• $  538,376:  Frank Richardson, Assistant Secretary, HI
• $  505,480:  Charles Columbus, SVP, Chief HR Officer
• $  361,696:  Bernice Gould, Assistant Secretary
• $  326,101:  Patrick Courneya, EVP, Chief Medical Officer
• $  246,210:  Maryann Bodayle, Secretary
• $  235,879:  Rochelle Roth, Assistant Secretary
• $  220,855:  Matthew T Ryan, Director
• $  216,245:  Margaret Porfido, Director
• $  216,104:  Leslie S Heisz, Director
• $  215,980:  Judith A Johansen, Director
• $  214,065:  Jeffrey E Epstein, Director
• $  213,503:  Richard P Shannon, Director
• $  211,572:  David F Hoffmeister, Director
• $  211,684:  Christine Paige, SVP, Marketing and Internet Services
• $  210,468:  Ramon F Baez, Director
• $  206,767:  A Eugene Washington, Director
• $  199,143:  David J Barger, Director
• $  179,365:  Regina M Benjamin, Director

As illustrated above, the 69 most highly compensated employees received $105 million in compensation.  39 of the 66 (59%) of the most highly compensated employees are male while 27 (41%) are female.  6 of the 10 most highly compensated employees are male while 4 are female.

10 of the most highly compensated employees received nearly $200 million in compensation over the past 5 years (and several have only been employed by the organization for 2-3 years):

Gregory Adams:  $56 million

• 2021:  $15,562,224
• 2020:  $17,268,060
• 2019:  $ 6,213,257
• 2018:  $10,226,544
• 2017:  $ 6,589,138

Arthur Southam:  $24 million

• 2021:  $5,224,405
• 2020:  $4,886,355
• 2019:  $5,837,783
• 2018:  $3,944,031
• 2017:  $4,007202

Kathryn Lancaster: $24 million

• 2021:  $5,027,913
• 2020:  $5,086,656
• 2019:  $6,720,335
• 2018:  $3,574,418
• 2017:  $3,723,333

Richard Daniels:  $18 million

• 2021:  $2,023,403
• 2020:  $6,674,960
• 2019:  $3,958,930
• 2018:  $3,414,348
• 2017:  $1,961,118

Janet Liang:  $19 million

• 2021:  $4,939,343
• 2020:  $5,580,333
• 2019:  $3,542,706
• 2018:  $2,478,669
• 2017:  $2,003,262

Julie Miller-Phipps:  $16 million

• 2021:  $3,535,603
• 2020:  $4,643,773
• 2019:  $3,676,934
• 2018:  $1,989,458
• 2017:  $1,813,739

Kimberly Horn:  $9 million

• 2021:  $4,725,013
• 2020:  $4,300,195

Chuck Bevilacqua:  $7 million

• 2021:  $2,439,859
• 2020:  $2,557,223
• 2019:  $2,040,727

Mark Zealman:  $6 million

• 2021:  $2,973,295
• 2020:  $3,117,144

Christian Meisner:  $4 million

• 2021: $ 2,403,336
• 2020:  $2,040,901

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 17 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 $5.9 billion in net assets, compared to $2.4 billion at the beginning of the year. About $1 billion came from unspent revenue (which primarily came from related organizations with the remainder primarily attributable to a change in pension and retirement liabilities.

2,941 independent contractors received more than $100,000 in compensation with the five (5) most highly compensated reported to be:

• $21,527,086,083:  Kaiser Foundation Hospitals, of Pasadena, CA for medical services
• $14,243,346,408:  The Permanente Medical Group, of Oakland, CA for medical services
• $10,838,980,853:  S. California Permanente Medical Group, of Pasadena, CA for medical services
• $    322,942,816:  Hawaii Permanente Medical Group, of Honolulu, HI for medical services
• $    274,379,682:  BHPN LLC, of Walnut Creek, 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 (2021), click here.