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El Camino CEO fired 'without cause'
Hospital mum on details of Graham's ouster; mixed emotions from community, employees

by Nick Veronin

Last week El Camino Hospital announced — with very little explanation — that its CEO will leave the organization at the end of the current fiscal year, taking a severance package worth nearly $1 million.

However, if the hospital has remained quiet on the issue, hospital employees and community members have not.

Tej Singh, a vascular surgeon at El Camino, said he felt Graham got a raw deal.

"He was a very good CEO," Singh said, noting that he believed politics — not performance — were behind Graham's termination.

Pat Briggs, president of the hospital's nurses union, said she does not feel strongly one way or the other about Graham's departure, although she was not entirely surprised by the news. According to her, there had been signs that Graham might be asked to leave in the months preceding the announcement, including criticism from the board of directors about the communication of hospital financials.

At 4 p.m. on Thursday, Feb. 10, an official El Camino press release was sent to the local media explaining that Ken Graham's contract will be terminated June 30, "without cause, at the request of the hospital's board of directors."

According to documents supplied by hospital spokeswoman Chris Ernst, Graham will be paid 18 months of his base salary in one lump sum upon his termination. The CEO currently makes $632,640 annually, which would put his severance payment at $948,960. He will also be entitled to 18 months of health, dental and vision insurance.

The official statement included comments from Wesley Alles, chairman of the hospital's board of directors, as well as from Graham. The release, which was short and tightly worded, focused on Graham's accomplishments, and both Alles and the exiting CEO maintained a positive tone.

During his time at El Camino, Graham oversaw the construction of the new, seismically sound, state-of-the-art hospital building, Alles. Graham also presided over the acquisition and opening of El Camino's Los Gatos campus, a fact not mentioned in the release.

Community speculation

In the days following the announcement, the Voice has received e-mails and comments on our website's Town Square public forum, which have alternately expressed shock and relief at the news of Graham's departure.

Certain people identifying themselves as hospital employees said they believe that Graham's termination is long overdue; others, including an El Camino surgeon, said the CEO was doing a fine job.

One commenter on Town Square, posting under the handle "It is About Time!" wrote, "I am very appreciative that he will finally be gone."

That comment drew reactions from another user, "Fed Up," who defended the CEO and expressed disappointment with "the decision to terminate Graham, with little to no transparency."

Tough times

Graham presided over one of the toughest financial periods El Camino has faced in more than a decade. In July 2010 the hospital began its current fiscal year in the red and in September announced that about 140 employees, including service workers, nurses, and administrators, would likely lose their jobs.

However, while some administrative positions were ultimately cut, thanks to negotiations and a massive shuffling of positions, no nurses or service workers were forced to leave. And although the fiscal year started bleakly, the hospital appears to be on track to turn a profit by the fiscal year's end on June 30.

Briggs, the nurses' union president, acknowledged that the CEO has accomplished many things during his tenure, but noted he has also rubbed many hospital employees the wrong way — including many of the nurses.

In November, in a split decision, the hospital's board imposed a "last, best and final offer" contract on its nurses, drawing ire from the nurses union, Professional Resource for Nurses, or PRN. The decision, which two board members opposed, was supported by Graham, and he was criticized by many PRN members for that support.

"That had to have had an affect on the board and their attitude and perception of management, specifically Ken," Briggs said.

Briggs seconded the Town Square critique concerning transparency of the board's decisions.

"The board has a huge lack of transparency," she said, criticizing the board for making the majority of its decisions in closed session and holding its meetings in a way that is confusing for the public and the press.

Tight lips

For his part, Graham — who will maintain all of his responsibilities until his contract ends — is declining to speak to the press, sticking to the short statements he has released via e-mail.

"As with all CEOs, it is my role to serve at the will of the Board," Graham wrote. "The El Camino Hospital team has had many accomplishments in the past 4 1/2 years, and I am confident that the hospital will continue to do very well."

The hospital has remained meticulously reticent since making the announcement last Thursday, and officials, reached mostly through e-mail, have offered little insight into the board's decision, other than to repeat the message that his termination was "without cause."

CEO search

Alles has been charged with forming an executive search committee to find a replacement for Graham. He said the hospital is hoping to find someone with at least 10 years of experience in a senior management position for a public or a district hospital, who is a visionary leader and who has a strong track record unifying organizations and communicating well with the community.

The chairman is confident that the ideal candidate won't be too difficult to come by, noting the hospital's reputation as a leader in technologically advanced medicine and the desirable living in the surrounding community.

Posted by MVFlyer, a resident of the Monta Loma neighborhood, on Feb 17, 2011 at 5:08 pm

The article makes a big deal of "without cause"--in theory, most employees in CA are 'at will', and can be fired without cause. Most, however, don't get an 18 month golden parachute. Tough to feel sorry for him. (And I think he was grossly overpaid at $650K/year, but had the gall to lay off nurses to 'save money').

Posted by Agent P, a resident of the Monta Loma neighborhood, on Feb 18, 2011 at 8:24 am

Rock St. Native here:

It is often the forward vision of a man that is sacrificed at the altar of those whose self-interest and petty bickering comes first... It is obvious that this man had a vision; Took the risk, carried it out and basically saved the hospital from bankruptcy - petty, back-backbiting from Union Thugs notwithstanding.

What overpaid nurses are going to soon find out - in the midst of this economic 'recovery', is that wage competitiveness will be the driving force of staying employed - or not. I.e., a nurse will no longer look forward to the salary of a PhD software engineer, but rather a pay scale dictated by the market, not Union Thuggery.

Be happy you still even have a job.

Posted by James, a resident of the Rex Manor neighborhood, on Feb 18, 2011 at 9:27 am

Without knowing anything about it, it sounds to me like this is the nurses union getting the guy fired because he had to threaten to cut some of their positions to make the hospital profitable again. What I took away from this is that the hospital started the year poorly, looks like it will end well, and the nurses union is pissed about it. Something doesn't add up with the nurses.

Posted by Mr. Dudeman, a resident of the Jackson Park neighborhood, on Feb 25, 2011 at 2:55 am

Agent P from Rock St. Native:

I would suggest you remove your head from your arse, as had it not been for the union thugs as you say that stepped in for the employees, tons of workers would have been out on the streets and the rest would have been reduced to per-diem shifts, and that's the best case scenario. Maybe in your world, "vision" should be at the expense of hard workers whom many have served and worked hard for 5-10, even 15-20 years while Graham sits back in raking inordinate sums of money for making the decisions that put the hospital at such a deficit in the first place.

Like most overpaid CEO's, Graham wanted to punish the workers for his decisions to build and spend so much on such an elaborate new facility. Maybe to you that is fair, but to sensible people it is not.

CEO's like Kenneth Graham are what's wrong with this country. Overpaid and willing to screw over the hard working people that make the hospital what it is.

Posted by You Don't Always Get What You Want, a resident of the Martens-Carmelita neighborhood, on Feb 27, 2011 at 9:21 pm

No it isn't because of the unions 'being pissy'. A majority of the union positions were saved and hospital-represented jobs were eliminated. That isn't to say that union issues were not always handled in the best interests for the hospital and for staff, but I believe that in reality the CEO was outsourcing his job more and more to consultants and 'interims' compared to the salary he was allegedly earning 'making decisions'.

Cohesive direction and leadership has been lacking under his tenure. Morale has been down for years and continuing to decline. Awards achieved by the organization were done so in spite of his leadership, not because of it, and under incredible amounts of stress to staff to boot.

The time has finally come where it was recognized that there was no lead dog steering the sleigh and the packs were branching off on their own, causing more chaos and uncertainty. Teamwork & communication broke down and soon everyone became isolated from each other; no one ever knew who was in charge, except maybe the outside consultants.

Picking consultants out of a hat to run the place for almost five years each time a problem came up, then writing checks for studies and recommendations, then hiring more outside upper level executives to deal with/oversee the recommendations rather than facing problems head on is hardly a strong trait in a CEO. I'm glad the Board finally has dealt with this ongoing problem. Although I would have preferred the Board to have had a unanimous vote, it was nice to see the newer board members picking up early on the illnesses of the organization and extricating it as quickly as possible.

There will be a lot of damage control required caused by the mishandled, painful, incompetent, layoff process of last fall; both for the people let go and those who remained behind. Someone with compassion for people and experience in dealing hands on with corporate issues, policies, turnovers, should be a must when locating a replacement. Regaining the trust of the employees will take awhile to rebuild, if ever. If satisfied/trusting employees are not high on the Board's list of goals, however, then that will be one less characteristic to search for in a CEO.

This one instance would be good time to promote from outside, as the current internal management structure is so dysfunctional after the last five years, I wouldn't trust any executive in house to pick up the reigns. Someone from the outside can come in and really clean house from the top down, and I bet morale would increase one hundred fold.