Meanwhile, the region's second-largest network, Caritas Christi, a six-hospital network run by the Archdiocese of Boston, paid its interim CEO, John Chessare, $859,775, or a third of Vecchione's compensation. In 2006, then-Caritas CEO Robert Haddad received $1.71 million in compensation.
The other large New England hospital networks — whose net patient revenues are about $1 billion a year, approximately the same amount as at Lifespan — pay their top executives far less than Vecchione.
Boston's CareGroup, which includes Harvard-affiliated Beth Israel Deaconess Medical Center and three other hospitals, pays its top official, Chief Financial Officer John Szum $548,995. In Connecticut, according to the state's Office of Health Care Access, The Yale New Haven Health System paid CEO Marna Borgstrom $1.8 million in 2007, while the Hartford HealthCare Corporation paid CEO John Meehan $1.22 million.
Even so, Verrecchia, citing a Hay Associates' survey commissioned by the Lifespan board, insists that Vecchione is paid comparably to CEOs of other large network. Perhaps Vecchione received higher incentive pay for better performance, he suggests, adding that to be certain, the details of the different CEOs compensation packages would have to be carefully examined.
The annual Modern Healthcare survey, however, confirms that Vecchione is paid more than CEOs at comparably sized networks. Rather than using compensation figures from tax returns, the magazine asks for executives' base salary plus bonuses.
Using this method, which excludes benefits, deferred compensation, and long-term incentives, Modern Healthcare found that the median compensation for 66 CEOs at hospital networks with more than $1 billion in revenue was $1.12 million. Vecchione's compensation, using Modern Healthcare's calculations, was $1.49 million.
The rest of the field
Modern Healthcare's executive compensation survey suggests that Vecchione is not the only Rhode Island health-care CEO who is paid well above the national median. When benefits, expenses, and long-term incentive plan payments are subtracted from Care New England CEO John Hynes's compensation package, the remaining $911,562 is well above the $570,000 median base pay and bonus paid to the 60 CEOs of small hospital networks surveyed in 2007.
In New England, Hynes earned less than the CEO of Baystate Health, the four-hospital network in Springfield, Massachusetts, but more than the CEO of Southcoast, the three-hospital network in Fall River and New Bedford, Massachusetts.
"John Hynes earns every penny," says Care New England board chairman Jonathan Farnum, adding, that few people have the skill set to handle the job. He describes Hynes and Vecchione as workaholics who are always on call and constantly handling crises. "The people are well-served," Farnum says. "I don't think they're [the CEOs] driven to maximize their own personal salaries." Using a consultant and a compensation committee, Care New England sets CEO salaries in the median of comparably sized New England hospital networks, he says.
The Modern Healthcare survey indicates the Care New England hospital CEO's base pay and bonuses are fairly close to the $456,000 national median for hospital network CEOs with net revenues of more than $200 million.
Once benefits, long-term incentive pay, and terminated life insurance payments are subtracted, Women & Infants Hospital CEO Constance Howes received $481,625 in 2007, and Kent County Memorial Hospital's Mark Crevier collected $551,799. Meanwhile, salary and bonuses for Rhode Island Hospital's Amaral ($693,477) and Miriam's Hittner ($572,132), were more than $100,000 above the national median.
