These salaries — which include base pay and incentives as paid out two weeks ago by the board — do not include benefits, which are almost 30 percent of base pay. Comparables for these jobs should include a broad cross section of Bay Area businesses — not a limited set of nationwide nonprofit hospitals.
Having run a $200 million-plus software business, my experience suggests that the salaries being paid to ECH professionals in these jobs are at least 25 to 30 percent above the salaries paid to Bay Area professionals for comparable VP-level jobs in general business. I believe that for-profit hospitals also pay substantially lower salaries.
In considering salary levels for its executives, the board should have taken into account the fact that in the past four to five years there has been almost zero turnover in the executive staff at ECH. If the ECH executives were so woefully underpaid, why wasn't there substantial turnover as executives sought out higher paying jobs? I believe the answer is because the ECH executives place very high value on the collegial atmosphere, the comfortable setting where there is little pressure from either the CEO or the board, and the generous compensation packages.
When the board hired Ken Graham as CEO 15 months ago, he accepted a very generous offer, and the board made sure he was paid "at the market" by having the executive recruiter research CEO comparables. How can they now say that, with a $904,000 total compensation package, he is underpaid? Annual cost-of-living increases should not amount to more than 4 to 5 percent in this market.
The board and the hospital staff are to be commended for the number of quality awards earned by the hospital, but they should be putting equal focus on performance and efficiency in health care delivery. They should be doing some soul searching and thinking about how taxpayers and other ECH employees will react to these extraordinary salaries.
As Robin Iwai pointed out in an opinion piece last week in the Voice, teachers are paid at between one fifth and one tenth of what hospital administrators earn. Apparently El Camino Hospital executives and the board believe that nonprofit hospital workers should profit from the support of taxpayers and donors.
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