In his first eight months as CEO of Carolinas HealthCare System, Gene Woods received $1.7 million in total compensation, including a salary of $828,110 and a bonus of $500,000, according to 2016 data released this week.
Woods, 52, joined the Charlotte system in May after serving as president and chief operating officer at CHRISTUS Health, a nonprofit Catholic system based in Irving, Texas. His pay was pro-rated for 2016, meaning salary alone would have been about $1.2 million if he had worked the whole year. At CHRISTUS, Woods received about $2.4 million in total compensation in the fiscal year ending June 2015.
Woods’ predecessor at Carolinas HealthCare, Michael Tarwater, retired in June after 35 years with the system and 14 as CEO. Tarwater received about $4.9 million for the first six months of 2016, including salary of $853,000 and bonuses of $1.5 million and $2.3 million. His compensation for the last full year as CEO was $6.6 million in 2015.
As a public nonprofit system, Carolinas HealthCare releases top executive compensation annually as part of a process outlined by state law. The 2016 report shows that other executives in the top 10 each received more than $1.4 million in total compensation for 2016.
Woods, who started in April, recently hired a chief operating officer, reintroduced a position that was held by Joe Piemont and eliminated by Tarwater in 2015. The new COO is Ken Haynes, who had worked with Woods at CHRISTUS Health. He will start work in Charlotte on Feb. 13, but hospital officials say state law doesn’t allow them to make his compensation public until this time next year.
In October, Woods also promoted Debra Plousha Moore, the system’s chief of human resources since 2008, to a newly created position of chief of staff. Last year, Plousha Moore received nearly $1.7 million in total compensation, and she will continue in the human resources role until her replacement is hired.
Charlotte’s other hospital system, Novant Health, paid CEO Carl Armato a total of $2.9 million in 2015, including a salary of $1.3 million and bonuses of $1 million and $518,000.
As a private, nonprofit, Novant Health publishes executive compensation each year in its IRS Form 990. Nine other Novant executives were paid more than $1 million in compensation in 2015. The 2016 report won’t be available until later this year.
At both systems, board committees set executive compensation based on measures that include financial performance, quality of care and surveys that reflect the satisfaction of patients, physicians and other employees. Both use consultants to guide the process of setting executive pay by comparing peers at systems of comparable size, complexity and performance.
Novant Health uses Integrated Healthcare Strategies, a Minneapolis consulting firm that annually surveys more than 1,500 mostly nonprofit hospitals and health systems. The 2016 survey found that, for systems with more than $1.5 billion in revenue, the median salary for CEOs was $1.05 million, and total cash compensation was $1.43 million. Salary increases for CEOs continue in the 3-4 percent range.
Kevin Talbot, a managing director with IHS, said Charlotte’s nonprofit hospital systems are among the top 40 in the country, with net revenues of more than $4 billion. He said health system boards need to provide competitive compensation “to recruit and retain the best executives to meet the demands of the rapidly changing health system in the country.”
Carolinas HealthCare works with Tom Cotter of Sullivan, Cotter and Associates, a consulting firm specializing in executive and physician compensation.
Plousha Moore said Carolinas HealthCare reviews five different executive compensation surveys “to make sure that we stay abreast of what’s happening” with comparable systems across the country.
At Carolinas HealthCare, nonmanagement employees received pay raises averaging 2.4 percent in 2016, Plousha Moore said.
More than 96 percent of the system’s 32,649 eligible nonmanagement employees in the Charlotte region also received “performance plus incentive” bonuses in 2016. Almost 23,000 received bonuses of $1,000 each, more than 5,000 others received bonuses of $600 each, and more than 3,400 received bonuses of $300 each.
Carolinas HealthCare is one of the largest public, nonprofit hospital systems in the country and the largest employer in the Charlotte region. Its Charlotte-area operation has 14 hospitals and reported annual operating revenue of $5.4 billion in 2015. The overall system, which includes about 40 owned and managed hospitals, had annual operating revenue of more than $9 billion in 2015. Like other tax-exempt nonprofits, it retains its earnings and reinvests them in expansion and improvements.
Novant Health, based in Winston-Salem, owns 14 hospitals in three states, including four in Charlotte – Presbyterian Medical Center, Huntersville Medical Center, Matthews Medical Center and Charlotte Orthopedic Hospital. The company reported $4.1 billion in annual revenue for 2015. It also has $3.3 billion in management contracts with hospitals it does not own.
In 2015, Carolinas HealthCare provided about $1.65 billion in what the industry calls “community benefit,” including $295 million in free care to low-income and uninsured patients. In 2015, Novant Health provided $706 million in community benefit, including $125 million in charity care.
Karen Garloch: 704-358-5078, @kgarloch
Hospital executive compensation
Carolinas HealthCare System – 2016
Michael Tarwater, CEO (retired in June): $4,859,895
Gene Woods, CEO (started in May): $1,715,275
Dr. Roger Ray, chief physician executive: $2,207,359
Greg Gombar, chief financial officer: $2,142,638
Paul Franz, executive vice president (retired): $1,982,375
John Knox, former chief administrative officer: $1,824,666
Terrence Akin, CEO of Cone Health: $1,734,273
Debra Plousha Moore, chief human resources officer and chief of staff: $1,699,617
Craig Richardville, chief information and analytics officer: $1,548,607
Dennis Phillips, executive vice president, Metro group (leaving this month): $1,542,720
Keith Smith, general counsel: $1,446,464
Carolinas HealthCare System hospitals:
Spencer Lilly, president, Carolinas Medical Center: $1,074,083
Phyllis Wingate, president, CHS NorthEast: $1,058,388
Christopher Hummer, president, CHS Pineville: $782,890
Michael Lutes, president, CHS Union: $719,885
Brian Gwyn, president, CHS Cleveland: $687,640
William Leonard, president, CHS University: $556,264
Peter Acker, president, CHS Lincoln: $509,022
Robert Larrison, president, Carolinas Rehabilitation: $442,129
Alfred Taylor, former president, Stanly Regional Medical Center: $439,397
Source: As required by state law, Carolinas HealthCare System makes public its compensation for top executives at the beginning of each year.
Novant Health – 2015
Carl Armato, CEO: $2,938,639
Fred Hargett, chief financial officer: $1,775,954
Jeffery Lindsay, chief operating officer: $1,522,160
Jesse Cureton, chief consumer officer: $1,361,298
Jacqueline Daniels, chief administrative officer (retired): $1,198,938
Denise Mihal, chief nursing officer and clinical operations officer: $1,170,821
Dr. Thomas Zweng, chief medical officer: $1,138,449
Dr. John Phipps, president, Novant Health Medical Group: $1,117,421
Harry Smith, senior vice president for hospital operations: $1,087,420
Peter Brunstetter, chief legal officer: $1,000,323
Source: Novant Health figures are from IRS Form 990 for 2015; report for 2016 not yet available.
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