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December 16, 2005

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Publication Date: Friday, December 16, 2005

Hospital CEO takes Portland job Hospital CEO takes Portland job (December 16, 2005)

Lee Domanico praised for lucrative five-year stint at El Camino

By Molly Tanenbaum

El Camino Hospital CEO Lee Domanico has accepted a new position at Legacy Health System in Portland, Ore., and will be finishing his five-year tenure at El Camino on Jan. 8, the hospital announced.

The announcement came after a late closed session at the Dec. 7 board meeting, and followed the board's decision to increase Domanico's salary from about $500,000 to $520,000 for the 2005-06 fiscal year.

After the board unanimously accepted Domanico's resignation, with board member Wesley Alles absent, each member wished the departing CEO well -- though Mark O'Connor was hesitant to let him go.

"I accept your resignation with a lot of trepidation and a heavy heart. I think we'll be hard-pressed to find somebody of the caliber of Mr. Domanico," O'Connor said. "It's a loss to El Camino and the community in general."

Domanico has been credited with turning around El Camino's financial situation during his tenure. The hospital had been losing about $1 million a month in 2000, and this past year brought in $30 million in surplus, according to hospital spokesman Jon Friedenberg.

The voter-approved Measure D to help with hospital construction passed under Domanico's leadership, although the $148 million bond is currently held up by a lawsuit.

"Without that financial turnaround, the hospital would not be building a new hospital," Friedenberg said. "Even with Measure D, we couldn't do it."

At the Dec. 7 meeting, the board members thanked Domanico for his contributions to the hospital.

"Looking at where we were five years ago and where we are today ... it's directly a reflection of your professionalism and your guidance," said board member Dominick Curatola.

The CEO will be heading to Legacy Health System, the largest nonprofit health care system in Oregon. The company operates six hospitals as well as a hospice agency, a full-service research facility, and specialty and primary care clinics.

Legacy used the help of executive recruitment firm Korn/Ferry International to find Domanico, who beat out 18 other candidates, including four internal candidates, for the position, according to Legacy's board chair Dr. Robert Bentley.

Prior to arriving at El Camino in October of 2000, Domanico held positions in Los Angeles and Chicago.

In the past year, Domanico's salary was under scrutiny and the hospital was criticized for a lack of transparency in releasing its executive compensation to the public. The amount of the CEO's total compensation had not previously been released by the nonprofit, publicly run hospital and was finally divulged in mid-November. It added up to a total compensation of more than $900,000 -- along with the salaries and benefits of other top-paid employees.

Domanico's move to a larger nonprofit health care chain will probably mean a salary boost, because he will be moving from one hospital to a six-hospital chain. The departing Legacy CEO, Robert Pallari, who retired Sept. 30, earned a total compensation estimated at around $1.1 million, Bentley said.

But Domanico said his motivations are those of hospital improvement.

"It's an opportunity to do for [six] hospitals hopefully what I was able to do for one," he said.

After announcing his resignation, he told the board, "Greatness is not an end state. It's the pursuit of it." He then praised El Camino's aggressive pursuit of improvement.

Dr. Vol Van Dalsem, medical director of radiology at El Camino who said he worked closely with Domanico over the last five years, believes the CEO's leadership raised El Camino's position among its neighboring hospitals.

"His commitment to reestablishing El Camino as a technology leader led him to form an administration team that I believe restored El Camino to its preeminent position in Silicon Valley," Van Dalsem said.

To initiate the search process for Domanico's replacement, the board has formed a transition subcommittee of board chair Dr. Edward Bough and past chair O'Connor, according to Friedenberg. At this point, no decisions have been made regarding hiring an interim CEO, or about how to go about finding a new one.


E-mail Molly Tanenbaum at [email protected]

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