Erlanger board to vote on new CEO Will Jackson's contract at Thursday meeting

Erlanger Health System is located at 979 E. 3rd Street in Chattanooga.

Erlanger Health System's Board of Trustees will finalize new CEO Will Jackson's contract at its regularly scheduled meeting Thursday.

Chairman Mike Griffin originally said the board would name former CEO Kevin Spiegel's successor at the Thursday meeting, but decided instead to name Jackson CEO in an impromptu Sept. 18 meeting.

"Why wait eight days if you are ready to move ahead?" Griffin said in an email, adding that the board needed to vote on Spiegel's $964,000 severance - half of what it could've been, according to his contract.

"We feel like Dr. Jackson is the right person for the job," Griffin said. "The board made a very educated decision last week. We were fortunate to have two highly qualified internal candidates [Jackson and Gregg Gentry] ... We made a unanimous decision because we believe in Dr. Jackson and what he will do as CEO."

photo Dr. William Jackson / Photo contributed by Erlanger hospital

The fact that Jackson is a physician weighed heavily into the board's decision, Griffin said. Doctors lead many of the top health systems, including the Mayo Clinic, which U.S. News and World Report ranked as the nation's No. 1 hospital in 2019.

"Will has always been an impressive employee in his role as Chief Medical Officer. His dedication to patient safety and quality care has been evident and the improvements show," Griffin said. "He is also committed to serving the hospital's employees including doctors, nurses, administrators and all others."

Trustee Linda Moss Mines, chairwoman of the management and board evaluation committee, said Wednesday that the committee is still working out the details of Jackson's contract. Mines didn't have a ballpark figure to share but said the decision will be "data driven," using information from a consulting firm and independent research, as well as taking into consideration Chattanooga's low cost of living, Erlanger's status as a public hospital, the salaries of frontline employees and Jackson's medical experience.

"In looking at all of that, we've been trying to be prudent and make it attractive enough that he's willing, because it's going to be hard work," she said. "We want to do everything we can to support Will for taking charge as CEO and at the same time be good fiscal stewards."

Hospital executives' pay continues to rise across the country despite efforts to control health care costs.

Erlanger's three most recent CEOs each were paid at least $100,000 more than their predecessors. However, that will not be the case with Jackson, Mines said.

photo Staff photo by C.B. Schmelter / Erlanger Health System President and CEO Kevin Spiegel looks on during a meeting at Erlanger on Thursday, Aug. 29, 2019, in Chattanooga, Tenn.

"We as a board are very cognizant of the fact that Kevin Spiegel did many marvelous things at the hospital and his salary increased significantly ... but we certainly would not put someone else in that same position," she said, adding that the CEO's growth needs to be demonstrated.

Spiegel began at Erlanger in 2013 making $680,000 per year base salary with a $50,000 sign-on bonus, according to a copy of his contract. By the time of his departure, he earned $964,000 base. He also had an opportunity to earn up to 50% of his base salary in bonuses through a self-funded incentive plan, which required that the hospital meet certain financial, quality, safety and service goals.

The decision to hire Jackson as a full CEO instead of an interim was "frankly because the interim role hasn't worked out very well in the past," Griffin said.

"An interim usually performs in a 'holding down the fort' pattern and is more cautious in decision making," he said. "A CEO search usually takes six to 12 months, and we figured we would go with the one-year contract versus the interim."

Although the cost of a search wasn't discussed, Griffin said forgoing a CEO search will save Erlanger money.

At last week's meeting, Erlanger staff congregated outside the room for several hours while trustees inside listened as Jackson and Gentry presented their respective leadership visions for the health system.

Many hopeful attendees had left by the time the closed meeting, which began at 3:20 p.m., opened to the public around 6 p.m. Griffin said he expects Thursday's board meeting to be much shorter than the last.

Contact Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.