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April 01, 2005

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Publication Date: Friday, April 01, 2005

Hospital gives up CEO's contract Hospital gives up CEO's contract (April 01, 2005)

Perks include housing loan, country club membership

By Julie O'Shea

Facing a court action filed by the Voice, El Camino Hospital officials released CEO Lee Domanico's employment contract Tuesday and promised to start filing federal tax disclosure forms, showing the salaries of several other top administrators and contractors.

The decision by the board of directors comes four weeks after the Voice sued the publicly-run hospital to release Domanico's contract. El Camino officials had refused for months to disclose the document, maintaining it was protected under a special tax exemption. Lawyers for the newspaper and hospital were set to meet in Santa Clara County Superior Court on April 11.

This is "a clear victory for the Mountain View Voice," said Judy Alexander, the attorney representing the newspaper in the case. In addition to handing over Domanico's contract, the hospital will also be paying the Voice's attorney fees.

However, despite this outcome, Alexander said the 395-bed hospital still refuses to admit that it was in violation of the state's open public records law.

In a surprise announcement at the March 2 hospital board meeting, Domanico voluntarily released some details of his compensation package, saying in a prepared statement that he received $615,000 in salary and bonuses last year, plus a $9,000-a-year car allowance.

The contract released this week shows Domanico can receive an annual bonus of up to 40 percent of his base salary, which was at $441,000 in 2004. Domanico is also entitled to a housing loan from the hospital district and a social membership with the Los Altos Golf and Country Club, worth an initial fee of $30,000 and dues of around $3,600 a year. The contract also states that if he is terminated, El Camino will continue to pay Domanico his full base salary for two years.

The contract did not include details of Domanico's housing loan, and hospital spokesperson Judy Twitchell declined to comment on the exact dollar amount of the loan or the interest rate. She said the public would have to wait until El Camino files its disclosure statements on Nov. 15 to see an itemized list of Domanico's compensation package.

Domanico did not answer a request by the Voice for comment.

"I don't understand why the hospital is just not giving it to you," said hospital board member Dominick Curatola, a cardiologist at El Camino.

Curatola, who was chair of the board when Domanico was hired in October 2000, estimated that the 10-year housing loan offered to Domanico was between $800,000 and $850,000. The interest rate would lessen each year Domanico stayed employed with the hospital and be completely deferred if Domanico remained with the hospital for the full 10 years of the loan, Curatola said, adding that housing loans are commonly included in contract deals for organizations top administrators. The hospital also did not release Domanico's full retirement plan, which was drawn up by an independent consultant. However, the contract did stipulate that the CEO and his wife will receive lifetime medical benefits not to exceed a cost of $1,000 a month.

The Voice filed a new public records request Wednesday, demanding the hospital release Domanico's retirement plan and firm details of his housing loan.

"If they are going to play hard ball, we are going to play hard ball right back," Alexander said Tuesday.

Domanico's contract and any addendums, raises, or bonuses he receives will be updated and made available to the public on a yearly basis from now on, Curatola said Tuesday.

Curatola also added that the hospital, a not-for-profit organization, will begin filing annual 990 forms, the federal government's financial disclosure statements for nonprofits. Curatola said the hospital's previous CEO acquired a special tax exemption that excused him from having to file annual disclosure statements.

By filing the tax forms, the salaries of the hospital's top five administrators, department heads and contractors will be disclosed to the public, Curatola said.

"This was even above and beyond what I expected the board to approve," Curatola said.

Because the vote to release Domanico's contract was conducted in closed session, Curatola wouldn't say whether it was unanimous.

The Voice had originally asked to see a copy of Domanico's contract in October. The hospital delayed its response until the paper filed a public records act request on Dec. 10.

State law mandates that "every employment contract between a state or local agency is a public record." Under the Brown Act, California's open meetings and records law, both El Camino and the publicly-run healthcare district that manages the hospital are considered local agencies.

However, hospital officials saw things differently. In a letter to the Voice on Dec. 20, 2004, hospital board chair Mark O'Connor claimed El Camino Hospital isn't a local agency and therefore not subject to state law. Healthcare district officials still refuse to say it is a public agency, which would be subject to the Brown Act.

El Camino officials said that Domanico's compensation package was based on what other hospitals of similar size pay their CEOs. He was hired in at a base salary of $350,000.

It would appear that Domanico is one of the highest paid hospital CEOs in the area. Santa Clara County officials disclosed that Valley Medical Center director Susan Murphy makes $203,028 a year and her boss, Bob Sillen, who manages the county's health and hospital system makes $229,324 annually. And Sequoia Hospital director Glenna Vaskelis makes $246,718 a year and has a $7,200 car allowance.

"What [Domanico's] received in compensation is quite reasonable (given) what he's done for the hospital," Curatola said.

Five years ago, the hospital was facing a $13.4 million budget deficit. Today, its operating income sits is $20.5 million. And last year, El Camino was named one of the four top quality hospitals in the country by the Commonwealth Fund.

Curatola said he had wanted to release Domanico's contract months ago, but others had reservations about releasing the data. Officials feared that the push for the document's release was being fueled by a group of disgruntled doctors, unhappy about some of the changes occurring at the Grant Road hospital.

"The average person out there wants to make sure their loved ones are getting proper medical care. They don't care about the pay of the CEO," Curatola said Tuesday.

"This has become a distraction," he added. "We are being sidetracked on this issue. ... It's time to move on now."
E-mail Julie O'Shea at [email protected]


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