Executive Compensation at Memorial Hermann Health (2023)

Memorial Hermann Health System (MHHS) is a Houston-based tax-exempt, non-profit healthcare provider with more than 34,000 employees and 6,600 physicians that serve in 17 hospitals (14 that the organization owns and 3 in which they have joint ventures) and more than 260 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 tax-exempt non-profit 501 (c) (3) – is addressed.

Key financial information on MHHS, as reported on the Form 990 (2022 for the year ending June 30, 2023) include:

1. There are 31  members (directors) in the governing body (Board of Directors), 29 of whom are independent, although there are 31 listed on the Form 990, Part VII (due to timing differences).  25 of the 31 (81%) directors are male while 6 of the 31 (19%) are female.
2. Total revenue was $7.6 billion (compared to $7.3 billion in 2022, $6.8 billion in 2021, $5.6 billion in 2020, $5.4 billion in 2019 and $4.8 billion in 2018) most of which came from patient services (net):  $7.2 billion.
3. Expenses totaled $7 billion (including $360 million in depreciation) with the five largest expenses reported to be:  compensation ($3.2 billion), fees for services ($1.4 billion), medical supplies ($1.2 billion), office-related expenses ($401 million), and equipment rental and maintenance ($216 million).
4. MHHS increased net assets from $4.1 billion in 2018 to $8.1 billion in 2023 – $4 billion in 5 years primarily by not spending as much as they received (although the organization also had unrealized gains on investments).  MHHS may want to consider lowering their prices instead of adding about $800 million a year to the general fund.

34,353 employees received $3.2 billion in compensation, which equates to an average compensation of $93,000.  6,853 employees received more than $100,000 in compensation with the 30 most highly compensated reported to be:

• $4,017,427:  David Callender, CEO/President 9/1 to Present
• $2,187,342:  Erin S Asprec, EVP, COO
• $1,870,900:  Deborah Gordon, EVP, CAO, CLO, Secretary
• $1,837,496:  James McCarthy, EVP, CPE
• $1,625,762:  Alec King, EVP, CFO, Treasurer
• $1,605,751:  Joshua Urban, SVP, President, Community Hospital
• $1,592,852:  Feby Abraham, EVP, CSO
• $1,558,196:  Gregory L Haralson, SVP, CEO-TMC
• $1,350,077:  Kyle Price, SVP, Service Lines
• $1,349,839:  Heath Rushing, SVP, SRVC Lines
• $1,298,637:  Lori P Knowles, SVP, CHRO
• $1,247,282:  Eric Smith, SVP, CDO
• $1,195,882:  Paul C O’Sullivan, SVP, CEO-Memorial City and GH
• $1,163,775:  Anne Neeson, EVP/CEO, Foundation
• $1,138,041:  Amanda Hammel, SVP, CIO
• $1,036,615: Obiefuna Chikelue, SVP, CIO
• $  998,259:  Malisha S Patel, SVP/CEO-SW & SL
• $  957,047:  Justin P Kendrick, SVP, CEO-NE & TW
• $  898,639:  Teal Holden, SVP, Amb and Post Acute Services
• $  889,517:  Jeffrey Katz, VP/CMO-TMC
• $  863,357:  Jerry A Ashworth, SVP, CEO-CY&KT
• $  853,373:  Richard Lyman SVP, Revenue Cycle
• $  851,385:  Noel J Cardenas, SVP/CEO, SE & PL
• $  837,651:  Howard Scott, VP/CMO, MC & GH
• $  837,134:  Carol J Paret, SVP, CCHO
• $  836,792:  Kristel Poffinbarger, VP, CMO, SW & SL
• $  833,596:  Victoria Regan, VP, WCH
• $  830,345:  Cynthia De Moya, Former  CFO
• $  803,547:  Nicole Clarke Luck, SVP, SI
• $  692,295:  Warren Shea, VP, Asst Secretary

The 30 most highly compensated employees received $38 million in compensation. 16 of the 30 (53%) most highly compensated employees are male while 14 of the 30 (47%) are female.

The most highly compensated employee was David Callender, the CEO and President who received $4 million in 2023, and $11 million since 2020:

David Callender:  Total Compensation 2020-2023:  $11 million

• 2023:  $4,017,427
• 2022:  $3,554,199
• 2021:  $2,642,628
• 2020:  $  699,625

To read about contributions to the non-qualified supplemental retirement plan, see Schedule J, Part III, Supplemental Information on the Form 990.

1,206 independent contractors received more than $100,000 in compensation with the five (5) most highly compensated reported to be:

• $43 million:  Austin Commercial, of Dallas, TX for construction
• $40  million:  Crothall Healthcare, of Chicago, IL for housekeeping
• $46 million:  AYA Healthcare, of Dallas, TX for contract services
• $44 million:  Maxim Healthcare Services, of Houston, TX for healthcare
• $40 million:  Medtronic USA, of Minneapolis, MN for healthcare technology

To read the IRS Form 990 (2022 for the year ending June 30, 2023), click here.