Expressing great misgivings, officials with El Camino Hospital's corporation and district boards approved resolutions June 19 that will put on the November ballot an initiative to cap executive pay at the health care organization.
That initiative, backed by several local and national labor organizations, would greatly reduce the salaries of many of the hospital's top administrators if it were to pass, limiting pay to no more than twice the salary of the governor of California.
Gov. Jerry Brown currently makes $173,987 annually. Twice his salary, $347,974, is still less than half El Camino CEO Tomi Ryba's proposed 2013 salary of $714,460. The hospital's chief administrative services officer, Ken King, and its chief medical officer, Dr. Eric Pifer, also make more than twice the governor's salary $420,000 and $450,000 respectively.
At the hospital district meeting, several board members said they recognized the legitimacy of the signatures gathered in support of the initiative. More than 16,000 individual names were tallied, according to officials with the South Bay Labor Council; the initiative needed only 9,100 to be placed on the ballot.
Ironically, the hospital district board members, who also serve on the hospital corporation board, must give final approval to the initiative before it can be placed on the ballot.
Board member Dave Reeder expressed deep reservations about the impact the initiative would have on the hospital.
"In order for us to perform we need good leadership," he said. Putting this cap on executive pay would place the hospital within the 20th percentile when it comes to executive pay, he continued -- making it difficult, if not impossible, to hire the best in the business.
"Making $10, $15 or $20 million as a CEO is pretty outrageous," Reeder said, noting that he felt that many executives throughout the country are overpaid. He just doesn't think that is the case at El Camino.
Kary Lynch, a psychiatric technician at the hospital, who also serves as a steward for El Camino's worker's union, noted that many of the hospital's top officials are paid more in bonuses each year than plenty of hospital employees. According to an official hospital memorandum, King and Pifer were awarded $63,446 and $106,088 in "incentive payouts" in the 2011 fiscal year.
That kind of pay, in Lynch's view, is ridiculous, especially considering that these executives work for a district hospital that receives millions in taxpayer dollars each year.
Hospital officials have been adamant that taxpayer dollars do not go to support the salaries of anyone in the organization. All tax dollars, according to hospital spokeswoman Chris Ernst, go to community benefit programs and capital improvement.
A previous version of this article stated that Mike King, the hospital's chief financial officer, would be impacted by the salary cap initiative. This was a mistake. The writer had confused Ken King, the hospital's chief of administrative services, with Mike King.