Erlanger Health System executives took home bigger bonuses in December compared with the awards paid out the year before, despite recording lower profits.
In December, 123 management-level Erlanger employees split $1.9 million in bonus payments, $200,000 more than the total awarded in bonuses in fiscal year 2009.
President and CEO Jim Brexler received a $192,395 bonus in December on top of his base salary of $550,000.
The payments were based on the hospital's performance in fiscal year 2010, which ended in June of last year. The hospital's operating profit of $8.58 million, and other performance measurements that year, met pre-established criteria approved by the hospital's board of trustees.
In fiscal year 2009, the hospital had an operating profit of $10.8 million, and bonus payments totaled $1.7 million.
But faced with more stringent requirements to earn bonuses, managers now may have more trouble achieving the incentive payments this year.
New bonus standards stipulate the hospital must bring in a minimum operating profit of $12 million for bonuses to even be considered.
"It may very well be that there may be a long dry spell" before bonuses are awarded again, said new board member Dr. Phyllis Miller, a Chattanooga obstetrician-gynecologist and former chief of staff at Erlanger, in a recent interview.
Fiscal year to date, Erlanger has earned a $1.3 million profit, compared with a budgeted $6 million profit, according to financial statements released at the hospital's Budget and Finance Committee Monday.
The top 10 bonuses awarded this winter at Erlanger, based on fiscal year 2010 performance, are:
Jim Brexler: $192,395
Charlesetta Woodard-Thompson: $56,748
Dr. Cyrus Huffman: $54,046
Dale Hetzler: $47,740
Britt Tabor: $40,643
Alana Sullivan: $38,552
Lynn Whisman: $36,929
Roger Forgey: $34,238
Gregg Gentry: $33,484
Joe Winick: $31,967
Source: Erlanger Health System
That doesn't include $1.3 million in trauma funding and $2.3 million state disproportional share funding -- money given to hospitals that treat a disproportionate number of TennCare patients -- that the hospital expects to receive later this fiscal year, said Chief Financial Officer Britt Tabor.
In December alone, Erlanger brought in a $1.6 million profit, according to financial statements.
One month before announcing the bonus awards, Erlanger implemented 2 percent across-the-board pay raises for its 4,200 employees, totaling $4 million. The raise excluded 17 executive-level managers, from the vice president level up, officials said.
Hospital trustees maintain that the hospital's performance in fiscal year 2010 warrants recognition.
"It takes a real expertise to deal in health care. ... Just to make any positive operating margin is great," said Kim White, an Erlanger trustee and chairwoman of Erlanger's Management and Board Evaluation Committee, which sets the criteria that determines whether bonus pay will be awarded and how much.
"It's tough for people who don't have jobs to look at bonuses, but we look at this as a piece of their total compensation package. There's been years they haven't made any bonuses," she said.
Erlanger's executive pay and bonus package ranks in the 65th percentile compared to other comparably sized hospitals, White said.
New criteria laid out last year by the hospital's Management and Board Evaluation Committee will make it more difficult for managers to earn bonus pay after the end of the current fiscal year in June by setting more aggressive goals.
"The board made the decision to raise the bar," said Gregg Gentry, senior vice president for human resources at Erlanger. "The criteria continues to be more challenging."
The new criteria put more weight on the hospital's performance in quality measures such as surgical infections rates, while the hospital's operating margin will be used to determine 30 percent of bonus payments, Gentry said. Operating margin used to be weighted at 35 percent of the payments.