The Erlanger Health System Board of Trustees voted unanimously Thursday to offer board Chairman Jim Coleman the vacant position of health system president and CEO.
Coleman was offered a one-year, $625,000 contract to replace former CEO Dr. Will Jackson, who left Erlanger on June 10.
If he accepts, Coleman would resign from his position as chairman and take over as CEO on July 11.
Trustee John Germ, who presented the proposal at a public board meeting Thursday, said board Vice Chairwoman Sheila Boyington would assume the role of chairwoman if Coleman becomes CEO.
Germ, who is chairman of the Management and Board Evaluation Committee that's tasked with crafting management contracts, said Coleman "was not looking for a job," but the board wants to replace Jackson with someone who has experience in hospital leadership, operating a multihospital system, knowledge about Erlanger's market area and who has a good working relationship with staff.
Coleman checks all those boxes, Germ said.
"He is the president and CEO of Alliant Management Services - has been for several years - and we approached Jim," Germ said. "He did not say, 'Here's an opportunity.' We sought him out for that position."
Alliant Management Services is a health care company based in Louisville, Kentucky, that focuses on rural hospital management and solutions.
Prior to his role at Alliant, Coleman spent much of his career working in the Chattanooga region's hospital industry.
He was the chief operating officer at Parkridge Health System from 2006-2019, served as CEO of the former SkyRidge Medical OVERSET FOLLOWS:Center in Bradley County, was chief operating officer at the former Hutcheson Medical Center in North Georgia and worked in management roles at Erlanger from 1993-2000.
Coleman joined the Erlanger board in November 2019, two months after Jackson became CEO.
Until recently, the board's bylaws contained conflict of interest provisions that barred trustees or any business entity in which a trustee has a controlling interest from being employed by or contracting with Erlanger until at least two years after the trustee's service is complete, without exceptions.
But in March, trustees amended their bylaws to allow board members to be employed by or contract with the hospital in certain "extraordinary circumstances." The board's attorney said at the time that "mergers, acquisitions, divestitures, reorganizations or restructurings" qualify as extraordinary circumstances.
The board is in the process of transitioning Erlanger from a government entity to a private, nonprofit business model. Coleman and board Secretary Vicky Gregg have spearheaded that effort.
Coleman's offer from Erlanger does not include participation in the management incentive plan but would allow him to make up to 30% of his salary as a one-time bonus if he meets certain goals of successfully transitioning the hospital to a private nonprofit organization, improving physician relations and addressing "the hospital's bed capacity issue," Germ said.
Former board Chairwoman Linda Moss Mines, Boyington, Gregg and Trustee Dr. Phil Burns all spoke in favor of the appointment.
Boyington said Coleman's resume makes him "uniquely qualified" for the Erlanger CEO position.
"He does have that clinical knowledge, he does have business knowledge and he has health care knowledge. We've never had a leader like this that could take Erlanger to where we need to go," she said.
Erlanger Chief Financial Officer Lynn DeJaco will serve as interim president and CEO of the health system as the board works to secure the health system's permanent leader.
Coleman, who stepped out of the meeting during the discussion, said upon his return that he was "honored and humbled" to be offered the job.
The board also at Thursday's meeting approved a resolution that would allow Erlanger to take an up to $75 million loan "for the purpose of financing the cost of certain capital expenditures for the hospital facilities," according to a copy of the resolution.
In addition, trustees approved the fiscal year 2023 budget, which includes $41 million in capital investments and projects a net income of $16.5 million. They also approved a 3% salary increase for employees.
For the first time in at least five years, the details of the budget were not made public.