The CEO and many upper management officials working for El Camino Hospital could see their paychecks greatly reduced this November if voters approve a measure to cap compensation at the local health care organization.
Measure M, which was introduced via the initiative process, would limit all salaries at the hospital to no more than twice that of California's governor. Supporters of the measure have said that the salary packages currently paid to El Camino's top administrators are egregiously high, while the hospital's board members have defended them as in line with the market.
John Zoglin, chairman of the El Camino Hospital District's board of directors called the measure "wildly inappropriate" in a recent interview with the Voice, and has said in public meetings that it would cause a great deal of harm to the organization if it were passed.
"It's not 1980 in Russia," Zoglin said. "We pay people what the market says we should."
Board member Wes Alles called the initiative "misguided," and said he could easily envision a cascading mass exodus of administrative talent moving from the top of the hospital down to employees whose salaries wouldn't be directly impacted, but would not want to stick around if their supervisors left to work at another organization that paid them what they were worth.
At a hospital board meeting just before Measure M was officially 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."
"I just don't think that's true," Kary Lynch, a psychiatric technician at El Camino, told the Voice in an interview earlier this year. Lynch is a steward for the hospital's workers union -- the Service Employees International Union-United Healthcare Workers -- which provided financial backing for the initiative. He said that there is no reason upper level administrators at El Camino should be paid so much, especially when average workers are paid so much less and recently had to accept cuts to benefits. "Our executives' salaries are way out of range."
Lynch later 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, Chief Medical Officer Eric Pifer was awarded $106,088 in "incentive payouts" in the 2011 fiscal year.
Last year, as the initiative was in its infancy, Lynch told the Voice that the idea behind Measure M is similar to some of the principles and ideals that fueled the "Occupy" movement. "I think among the general public, people are really upset that all these executives make such extravagant salaries," he said in an Oct. 2011 interview, noting that the hospital's newly appointed CEO, Tomi Ryba, makes $695,000 year -- before generous bonus options. "That's more than the president of the United States makes."
Lynch still supports the initiative. However, the SEIU-UHW has spent little money in support of Measure M since the hospital agreed to reinstate the some of the benefits it took away back in April 2011.
Even if the measure is passed, it would also need to survive the lawsuit that would surely follow. Hospital officials are not saying exactly what they would do if Measure M succeeds at the polls, but there has been wide speculation about whether the proposed rule would stand up to a legal challenge.
Supporters of the measure argue that they have the right to vote on capping executive pay since El Camino is a district hospital. However, hospital officials argued that the CEO is an employee of the hospital corporation -- not the district -- and no taxpayer money is ever used to pay the salary of any hospital employee.