Erlanger to proceed with awarding bonuses

Erlanger President and CEO Kevin Spiegel speaks with members of the Chattanooga Times Free Press editorial board.
Erlanger President and CEO Kevin Spiegel speaks with members of the Chattanooga Times Free Press editorial board.
photo Erlanger tile

Erlanger Health System officials will move forward with awarding 99 hospital managers with half of $1.7 million in designated bonuses this month, while holding off on the second half until July, hospital CEO Kevin Spiegel said in a memo to employees.

The bonuses, which are tied to performance benchmarks that the public hospital's board decided earlier this year, have come under fire from local lawmakers and officials who say the hospital depended on a pool of federal funding to end the year in the black.

State lawmakers also criticized the process by which the board arrived at the decision to award the incentives, meeting and discussing the bonuses privately before voting on the decision in a public meeting.

At that point, the board announced they would hold off on awarding the incentives until they could review the process.

Erlanger board members announced Tuesday that after meeting with their attorneys from Spears, Moore, Rebman and Williams, that board Chairman Donnie Hutcherson said the "firm informed the Board members that the approval process was appropriate and the action taken by the Board was also appropriate."

In the memo, Spiegel also mentioned the possibility of creating a performance-based incentive plan for all employees to "recognize the contributions of the entire workforce."

"I think this idea is great and commit to you that we will review a new compensation program," Spiegel wrote in the memo. "We will thoughtfully consider all alternatives."

Such a program could be announced to board members as early as January, and could kick in at the start of the new fiscal year in July 2015.

Hospital employees have spoken out against the manager bonuses, saying that they are unfair considering how much employee benefits have been cut and changed over the last year.

Meanwhile, "regular eligible" employees of the hospital will be receiving a 2 percent pay raise in January, while "eligible nursing associates" will receive the second phase of a two-step raise in July of 2015. Those nurses will not be eligible for the January raise.

The hospital has allocated approximately $15 million towards employee raises in fiscal years 2014 in 2015, Spiegel said.

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