Erlanger Health System's board of directors approved raising the salary of CEO Kevin Spiegel by 7 percent Thursday, bringing his total compensation to more than $1 million.
Spiegel will earn $800,386 for fiscal year 2016, retroactive to July 1. He was awarded a $244,966 bonus in September for meeting performance goals in several areas.
During the board's meeting Thursday, Erlanger Chief Financial Officer Britt Tabor said the hospital had a net income of $4.3 million in the first quarter, compared to a budgeted $1.8 million. Operating revenues for the three months were $179 million, 6 percent higher than budgeted.
Spiegel has presided over a major turnaround at the hospital, which is the seventh largest public health care system in the U.S. and - with more than 3,500 employees - one of Chattanooga's five largest employers.
In September, the hospital reported a profit of $37.3 million for fiscal 2015, reversing more than $36 million the hospital had lost from 2008 to 2013, before Spiegel was hired.
The salary increase was proposed by the board's management and compensation committee, which asked an outside consultant from the firm of Sullivan Cotter to compare Spiegel's salary to that of other health care executives.
Jose Pagoaga of Sullivan Cotter told the board he compared Spiegel's pay with the CEOs of 50 other similar-sized public hospitals. Spiegel had previously ranked 25th among them in salary, and most will receive a 3 percent pay raise, so giving him a 3 percent increase would keep him "average, and we don't think he is average," Pagoaga told the board.
Erlanger Hospital is seen from the UTC library's balcony in this Dec. 9, 2014, file photo. The 7 percent hike plus bonus will move Spiegel up to the 11th position compared to his peers, but most of them also will receive raises and bonuses, as well, the consultant noted.
Tabor credited the increase in revenues in part to the hospital's outreach efforts. The hospital admitted 2,900 patients in September, for example, compared to 2,700 in the same month the previous year. Erlanger also has been aggressive at convincing doctors in East Tennessee, Northwest Georgia, Northeast Alabama and Western North Carolina to send their patients needing more advanced care to Chattanooga. Inpatient surgeries also were higher than anticipated, Tabor said.
Spiegel told the board that he and Tabor had gotten favorable comments on a recent trip to Wall Street to meet with the hospital's bond rating agencies.
"They also noted our market growth in this area, which they saw as impressive," he said.
The hospital's newly appointed chief quality officer, Dr. Joe Cofer, told the board his group's first efforts are focusing on improving patient food. The hospital recently hired a new food service company, and officials want to do better at getting food to patients on time.
Some 34,848 people were treated in Erlanger's emergency room in the first quarter, up 4 percent from the previous year.
Contact staff reporter Steve Johnson at sjohnson@timesfreepress.com, at 432-757-6673, on Twitter @stevejohnsonTFP or on Facebook, stevejohnson TFP.