Board members said at their Nov. 14 meeting they will continue to pay all executives at their current rates, even those who make more than twice Gov. Jerry Brown's salary, the limit laid out in Measure M. The salary-capping measure passed by a thin margin in the Nov. 6 election.
"We have respect for the voters," said John Zoglin, chairman of the board of directors. "Although, we are certainly disappointed."
The chairman said that the board had decided in closed session to ask lawyers to find out if Measure M is legal. "We have some concerns that it may not be a legal measure," Zoglin said. "So, we are going to start to explore that."
Steve Trossman, a spokesman for the SEIU-UHW — the union that pushed to get Measure M on the Nov. 6 ballot — said it was too soon to say what the union might do in response to a hospital legal action.
If the hospital were to sue the SEIU-UHW, he imagines the union would indeed defend itself in court, along with the measure. Trossman said he is not a lawyer and isn't sure how the hospital might try to challenge the measure.
Board member David Reeder commented on the passage of Measure M by reading from a scathing editorial in the Nov. 12 San Jose Mercury News:
"This was no grass-roots rebellion against lavish pay," the editorial says. "It was a negotiating ploy by hospital unions. They admit they floated the measure as a bargaining chip, and they stopped campaigning for it when they got their way in a labor contract."
"It just defies the facts," Trossman said in response to the editorial. The measure was put on the ballot in a relatively affluent area, no money was spent in support of it, the hospital aggressively fought against it, and it still passed, he said. By virtue of that fact, Trossman said he believes it is clear that people feel that the hospital's pay scale is out of balance.
"I think we and a lot of other economists think that the polarization of wealth in this country is a growing problem and needs to be addressed," he said.
Reeder noted that he suspects Measure M passed, in part, because of the national conversation surrounding the fairness of CEO salaries. However, Reeder and Zoglin have said in the past that comparing the nearly $700,000 annual salary El Camino CEO Tomi Ryba is paid to the tens of millions of dollars paid to Wall Street CEOs is like comparing apples and oranges.
Zoglin has repeatedly said that the hospital only pays fair market wages to all of its employees, and that if they were forced to pay less than fair market value, the hospital would be hurt because it would not be able to hire the best and the brightest leaders to run the organization.
Trossman rejected this thesis and said the hospital will not be hurt if the measure were to go forward. "They will be able to go out and find plenty of qualified people that are willing to work for under $350,000 a year."
In a statement, AFL-CIO representatives denied that Measure M was cooked up to be a "bargaining chip," as Kary Lynch, a union steward and El Camino Hospital employee, was quoted saying in a local paper.
"SEIU-UHW members placed Measure M on the ballot solely to rein in executive salaries at the El Camino Hospital District, which is partially supported by taxpayer dollars," the statement said. "Kary Lynch is not an official of SEIU-UHW. He is not an elected member of the union's executive board and does not hold any other official position. His statement does not reflect the current or past position of SEIU-UHW."