Executive Compensation at Banner Health(2023)

Banner Health is a tax-exempt non-profit healthcare system that operates 33 hospitals and numerous health care clinics, nursing homes, home health care agencies, urgent care centers, and ambulatory facilities in 6 states with more than 55,000 employees.

Based in Phoenix, Arizona, Banner Health consists of dozens of related/affiliated organizations (including taxable partnerships, trusts, and corporations) but for the purpose of this post, the executive compensation of Banner Health (a 501 (c) (3)) is reported.

Banner Health has 14 members (directors) in its governing body, 13 of whom are independent, although 16 are listed on the most recent Form 990 (2023):   12 of the 16 (75%) are male while 4 of the 16 (25%) are female. What is unusual (compared to other non-profit healthcare providers) is that the directors receive $43,500-$111,500 each in compensation, except for the President and CEO, Peter Fine, who received more than $8 million in compensation.

In 2023, Banner Health reported the following key information:

Total revenue was $9.5 billion, of which $9.1 billion came from healthcare services.

Expenses totaled $8.7 billion (including $400 million in depreciation) with the largest expenses being compensation ($4.3 billion), medical supplies ($1.9 million), fees for outside services ($800 million), and office-related expenses ($650 million).

51,932 employees received $4.3 billion in compensation, which equates to an average compensation of $83,000.  7,741 employees received more than $100,000 in compensation with 23 of the most highly compensated reported to be:

• $14,031,376:  Peter S Fine, CEO
• $ 5,637,332:  Amy Perry, President
• $ 2,822,935:  Marjorie Bessel, EVP, Chief Clinical Officer
• $ 2,691,224:  Donald S Nordlund, EVP, Chief Strategy/Growth Officer
• $ 2,583,563:  Todd S Werner, SVP, Acute Care Delivery
• $ 1,956,159:  Dennis Laraway, EVP, CFO (thru 3/23)
• $ 1,692,141:  Jean Fitterer Lance, EVP, Chief Legal Officer and General Counsel
• $ 1,640,302:  Julie Alvarado-Dubek, EVP, Chief HR Officer
• $ 1,481,563:  Staci Dickerson, EVP, CFO
• $ 1,461,676:  Deanna Wise, SVP, CIO
• $ 1,428,698:  Alexandra Morehouse McReynolds, Chief Marketing Officer
• $ 1,389,601:  Margo Karsten, Division President
• $ 1,381,730:  Lamont Yoder, Division President
• $ 1,236,305:  Laura Robertson, CEO – Large Facility
• $ 1,219,654:  Charles Bowen, SVP, Chief Supply Chain Officer
• $ 1,190,151:  William Holland, SVP, Care Management and CMIO
• $ 1,189,446:  Daniel Post, CEO – Large Facility
• $ 1,078,393:  Sarah Frost, CEO – Large Facility
• $ 1,059,927:  Debra Flores, CEO, BTMC
• $  945,235:  Eric Reiman, CEO/CSO – Banner Research
• $    835,808 :  Rebecca Kuhn, Former Chief Operating Officer
• $    833,719:  Brenda Schaefer, VP, Chief Investment Officer
• $    668,530:   David Bixby, Former Chief Legal Officer/General Counsel

The 23 most highly compensated employees received $50 million in compensation, or an average of $2.2 million. However, it is important to point out that the 2 most highly compensated employees received the largest portion – $20 million.

12 of the 23 most highly compensated employees are female while 11 are male.

BH provides several SERP (Supplemental Executive Retirement Plan):  SERP III covers one (1) employee:  Peter Fine. EXEC 457B covers 475 former and current employees.  EXEC 457F covered 95 former and current executives.  To read more about these plans and long-term incentive plans provided by BH, see the Form 990, Schedule J, Part III, Supplemental Information.

BH paid for first class or charter travel.  See the Form 990, Schedule J, Part III, Supplemental Information for more detail.

1,713 independent contractors received more than $100,000 in compensation with the five highest reported to be:

• $882 million:  McKesson Corp, of San Francisco, CA for pharmaceuticals
• $199 million:  American Express, of Plantation, FL for financial services
• $122 million:  Bank of America, of Charlotte, NC for financial services
• $ 98 million:  Aya Healthcare, of San Diego, CA for healthcare staffing
• $ 67 million:   Boston Scientific Corp, of Dallas, TX for healthcare staffing

To read the IRS Form 990 (2023), click here.