Traverse City Record-Eagle

June 22, 2013

Munson top execs took salary freezes in 2011

Traverse City Record-Eagle

---- — TRAVERSE CITY — It’s the ex-job that keeps on giving.

Munson Healthcare’s former president and CEO collected $599,144 in severance pay in 2011, a year after his sudden resignation, according to tax returns recently released by nonprofit Munson Healthcare.

Douglas K. Deck left Munson in May 2010 amid controversial merger talks with Spectrum Health Systems. His nearly $600,000 pay-out in 2011 comes on top of his 2010 severance payment of $362,560, plus a $150,000 bonus in 2010, tax returns show.

Deck’s total bonus, base pay and other perks in 2010-11 totaled more than $1.65 million, including about $778,000 in accumulated retirement benefits.

And for Deck, there’s more to come.

“The majority of severance has been paid, and there will be some remaining in 2012,” said Sue Peters, Munson Medical Center’s vice president for human resources.

Peters didn’t release Deck’s 2012 compensation because auditors have not yet signed off on it.

Deck landed a job in January 2011 as a senior vice president for Advocate Health Care in Chicago, but since left that post.

Meanwhile, Munson executives — vice presidents and higher — both proposed and accepted a freeze of their base wage for 2011, while most other Munson employees received single-digit raises, said Munson Healthcare Board Chairman Dan Wolf.

Munson-wide executive bonuses declined from $777,592 in 2010 to $463,085, a 40 percent decrease. Bonuses are based on the performance of the overall institution and affiliates, and the individuals’ performance of agreed-upon goals, Wolf said.

Wolf said it’s fair to ask why Deck received such a significant payout when the hospital kept a lid on salaries and bonuses in 2011.

“These compensation agreements are contracted and settled at the time of employment and they are contractual obligations just as other agreements we make,” he said.

The 990 tax returns also include salaries of Munson’s top paid contractors and physicians. Munson, like hospitals across the country, are employing increasing numbers of physicians. That owes to regulatory hassles and financial pressures making it too difficult for doctors to run their own practices.

In other cases, some professions tie in closely with the hospital mission. Munson Medical Center, for example, paid $5.3 million in 2011 to Hospitalists of Northwest Michigan in 2011. This relatively new specialization focuses on care of patients in the hospital.

The salaries of physicians are notable. Thomas Schermerhorn, a neurosurgeon, had a reported total compensation of $874,402 in 2011 — an amount that falls between the average salary of the specialty and the top 10 percent, Peters said.

“It is a specialty that’s difficult to recruit,” Peters said. “It’s absolutely critical that if we want to have a Level 2 trauma program for this area, we have to recruit someone like Tom Schermerhorn to fill that role.”

Wolf said Munson will continue to face significant challenges posed by the federal Affordable Care Act and he expects hospital positions will evolve with the new changes.

“We can’t predict the exact impact of all the health care changes that will unfold between 2010 and carry all the way through to 2017 to 2019,” he said. “But two things are certain: The payments for health care from the federal government are going to be tighter and tighter, and closer and closer. That will impact every hospital, every clinic and every doctor. That’s very predictable.”


Munson's Executive Compensation for the 2010/2011 Calendar Years

2010 2011 % Change

These numbers reflect total compensation, including base salary, bonus and incentives, retirement, and nontaxable benefits.

K. Douglas Deck $1,650,617 $599,144 -63.7 % (Resigned as Munson Healthcare CEO in early May 2010)

Ed Ness 777,202 962,390 23.8% In addition to his role as Munson Medical Center president and CEO, he was promoted in May 2010 to Munson Healthcare President and CEO.

Paul Shirilla 369,086 340,351 -7.8% VP and general counsel for Munson Healthcare

Kathleen McManus 319,109 338,471 6.1% Executive VP and chief operating officer of Munson Medical Center

James Austin 295,806 296,957 .4% Administrator of Kalkaska Memorial Hospital

Mary Beth Morrison 299,079 236,787 -20.8% VP Planning & Operations Improvement for Munson Healthcare

Mark Hepler 294,852 371,304 25.9% In addition to his role as finance VP, Hepler was promoted to Munson Healthcare chief financial officer

Mark Deponio 257,566 241,307 -6.3% President of Northern Michigan Supply Alliance, VP of Supply Chain for Munson Healthcare

Christopher Podges 339,629 311,797 -8.2% VP of information services at Munson Healthcare

Mark Anthony 279,987 251,577 -10.1% Former senior VP at Munson Medical Center. Moved to a downstate hospital.

Sue Peters 282,679 234,609 -17.0% VP for human resources at Munson Medical Center

Jim Fischer 242,649 217,922 -10.2% Chief nursing officer and VP for patient care services at Munson Medical Center

Dave McGreaham 361,224 341,604 -5.4% VP for medical affairs at Munson Medical Center

Des Worthington 229,013 224,319 -2.0% President of Munson Healthcare Regional Foundation

Shari Wilson 183,947 176,553 -4.0% President of Munson Home Health

Edward Carlson 223,996 n/a Former chief financial officer for Munson Healthcare

TOTAL $6,406,441 $5,145,092 -19.7%



2010 2011 % Change

Thomas Schermerhorn $759,714 $874,402 15.1% Neurosurgeon

David Martin 283,064 290,497 2.6% Infectious disease physician

Philomena Colucci Pay not reported* 325,313 n/a Oncology/hematology physician

Karen Speirs Pay not reported* 266,725 n/a Infectious disease physician

Ahmet Sevimli 359,883 387,966 7.8% Nephrologist

John Faichney 276,779 Pay not reported* n/a Endocronologist

Daniel Webster 256,014 Pay not reported* n/a Family practice physician

Munson Healthcare is the umbrella parent organization of Munson Medical Center, Paul Oliver, and other entities.

*Pay levels did not meet IRS reporting requirements.