The El Camino Hospital Board of Directors finally decided March 1 to appoint two of its members, Wesley Alles and Mark O’Connor, to a two-member committee that, with full board approval, will set the salary and benefits for the hospital’s next CEO.
The decision came after tense and bitter wrangling over four meetings among the board members, who finally — and in our opinion, correctly — decided that for this time only, doctors who work in the hospital should not serve on the compensation committee.
The decision to appoint Alles and O’Connor was surely a step forward. But the board failed miserably when it came to adopting a new, permanent policy that prevents hospital physicians, who could indirectly benefit from their role in determining the boss’ salary, from serving on the committee.
Given the current board makeup, which includes cardiologists Edward Bough and Dominick Curatola, it is not surprising that such a fight ensued. Both men are passionate about the hospital’s business. But exhaustive work by member David Reeder, who brought in experts who recommended that hospital doctors not serve on the committee, was not able to convince Drs. Bough and Curatola to vote for a permanent policy.
The issue is important now because the board has begun a search for a new CEO, following the departure of Lee Domanico to a hospital group in Oregon. Marla Gularte, the hospital’s chief financial officer, is serving as interim CEO until a new person is hired. Her pay has been set by the board at a level considerably below that of Domanico, whose total compensation package approached $900,000 a year.
Residents in the district, which includes Mountain View, Los Altos, Los Altos Hills, Sunnyvale, Cupertino and parts of San Jose and Palo Alto, need to be assured that no conflict of interest will exist when the CEO’s compensation is determined. And that is impossible if a board member, who is also a physician who works in the hospital, is setting his or her boss’ pay.
Without a firm policy in place, a future board could name anyone they wish to the compensation committee, including hospital-connected physicians like Bough or Curatola. No one is saying that these longstanding board members, first elected in 1996 and 1992 respectively, are not upstanding contributors to the hospital. But clearly it is poor public policy to allow them or any other El Camino doctor to serve on the compensation committee.
Unfortunately, despite recent efforts to be more open in its discussions, the publicly elected board continues to avoid making any permanent policy changes.
The temporary fix to the makeup of the compensation committee is too similar to last year’s decision to turn over salary information for Domanico and other top officials. Facing a Voice lawsuit and a number of concerned doctors and patients, the board released the information but refused to acknowledge that it had any legal obligation to do so now or in the future.
The board is making the same mistake regarding the compensation committee in its failure to address the root of the issue. While members finally were able to appoint two non-doctors to serve, a permanent policy needs to be adopted. We urge the board to act on that soon.
