Kenneth Graham will take Lee Domanico’s place as the new CEO of El Camino Hospital, with a higher salary but fewer benefits than his predecessor.
Graham — whose name was announced on June 27 and who comes from Overlake Hospital in Bellevue, Wash. — will earn an annual base salary of $543,000 compared with Domanico’s $520,000 salary before he left for Portland, Ore. to run Legacy Health System, a six-hospital chain.
“He’ll bring a great deal of credibility and respect to the position,” said Wesley Alles, member of El Camino’s board of directors.
Graham may receive up to $162,900 in bonuses, capped at 30 percent of his salary, while Domanico’s incentives were capped at 40 percent. While Graham’s health and retirement benefits will equal 42 percent of his base salary, or $228,060, Domanico’s amounted to 50 percent.
Additionally, Domanico received a $9,000 car allowance and a $850,000 home loan. His total compensation for the fiscal year ending June 30, 2005 was $943,104 when his base salary was $492,291, while Graham’s total compensation can reach $933,960 with a higher base salary but no car allowance and home loan.
Besides being a smaller percentage of his base salary, Graham’s incentive pay will be “more measurable,” tied to a defined list of goals, such as business growth and nurse and physician satisfaction, according to Alles, who also sits on the hospital board’s compensation committee.
“We determined it needed to be more transparent and it needed to be based on something that was measurable and objective,” Alles said.
“The public will know what those items are and will also know whether they were achieved,” he added.
El Camino Hospital released Domanico’s salary and other compensation last year after the Voicefiled a lawsuit requesting the information. The League of Women Voters has also been critical of the hospital on issues regarding public transparency, and most recently, Assemblywoman Sally Lieber proposed a bill specific to El Camino that she said will require public financial disclosure (see related story).
Hospital officials say Graham’s salary will be around the 75th percentile nationwide for hospital CEOs. Nancy Farber, CEO of Fremont’s district hospital, Washington Hospital, receives a base salary of $424,557 and can earn up to 25 percent of that salary in bonuses.
Graham, who has been CEO for 12 years at Overlake Hospital Medical Center in Bellevue, Wash., a non-profit hospital similar in size to El Camino, will not require a home loan because he already owns a home in Los Altos Hills. His three children reside in the Bay Area and are Gunn High School graduates, and his wife has been a part time nurse at Stanford Hospital for the last 20 years.
“We are looking forward to trying to live and work in the same community and it’s going to be a great family thing,” Graham said in a phone interview.
While at Overlake, Graham has overseen construction of 6,000 square feet of new office buildings on the campus. El Camino Hospital recently broke ground on its $480 million, earthquake-safe hospital that is expected to be complete in 2009.
“This is all a lot of work to do so we’ll just go get it done,” Graham said.
Though Overlake does not have public board, Graham said he has 10 years of experience at the San Diego area Grossmont Hospital, a district hospital with public board meetings.
Graham’s last day at Overlake will be July 28 and he will begin work at El Camino on Aug 7.
“I’m hoping to really create an excellent tone for people to get their work done in a professional manner,” he said. “They’ve got a good tradition of that and I’d like to extend that into the future.”
E-mail Molly Tanenbaum at mtanenbaum@mv-voice.com
