Conroy paid less than predecessor
Published: 09-06-2020 8:38 PM |
LEBANON — Dartmouth-Hitchcock Health President and CEO Joanne Conroy was paid at least $300,000 less than her predecessor in her first full year leading the Lebanon-based health care system, even though she helped balance its books after it lost money before her arrival, according to the health system’s most recent filing with the IRS.
Conroy earned a total compensation package of $1.3 million in calendar year 2018, the 990 tax forms reveal. That figure, which included a base salary of $955,000 and a bonus of $254,000, was less than Dr. James Weinstein earned in the role before his departure at the age of 66 at the end of June in 2017.
Despite serving as D-H CEO for only half of that year, Weinstein earned $3.3 million in total compensation, including a base salary of $1.6 million. In the meantime, the health system, which is New Hampshire’s largest private employer, saw an operating loss of $7 million on its total budget of about $2 billion in the fiscal year ending in 2017.
Conroy, who was 61 when she arrived at D-H in August of 2017, was paid less in 2018 than Weinstein had earned even as the hospital system turned around its finances, ending its 2018 fiscal year with an operating surplus of $47.5 million. That surplus was one reason the system said it gave out $250 bonuses to all of its employees at the end of the calendar year.
It’s not clear exactly what factors contributed to the disparity in pay between the two hospital CEOs. D-H spokeswoman Audra Burns declined to comment about the reasons for the difference. She said the board of trustees makes compensation decisions “in conformity with IRS regulations and established industry practice.”
“Final approval is granted by the D-H Board’s Talent Development and Compensation Committee with the advice and guidance of third-party health care executive compensation experts,” she said.
Relative years of experience in the position and performance while on the job are two of the primary factors that go into a health care executive’s compensation, according to Tom Bailey, the finance and marketing director of the Armonk, N.Y.-based Total Compensation Solutions, a consulting firm that specializes in health care pay. The firm calculated a median salary of $1.4 million, including base salary and bonuses, for hospital CEOs of organizations with more than $1 billion in annual revenue.
“What was the performance of the organization under Mr. Weinstein’s leadership?” Bailey asked in an email. “If it was outstanding then that might justify his level of pay over the years. However, if Ms. Conroy has an equal resume to Mr. Weinstein then there could be an issue.”
Article continues after...
Yesterday's Most Read Articles
Weinstein, an orthopedic surgeon who served the D-H system for two decades, held the top job at D-H for six years. Conroy came to it as the leader of Lahey Hospital and Medical Center, a hospital in suburban Boston. At Lahey, Conroy, an anesthesiologist, earned a total of $768,966 in 2017 and $800,350 in 2016.
Aside from D-H’s recent pandemic-related losses, the organization has seen an improvement in its bottom line under Conroy’s watch.
Because D-H traditionally won’t comment on salaries beyond what is revealed in the tax filings, it’s unclear how much Conroy’s salary has increased since 2018, and what bonuses she might have received in that time.
A phone message left for D-H Board Chairman Edward Stansfield, a Meriden resident and senior financial advisor for Bank of America/Merrill Lynch, was not returned last week.
As for gender in leadership positions, six of 20 members of the Dartmouth-Hitchcock board are women. The balance is closer internally, with women serving in six of the health system’s top 14 jobs.
(D-H in July said Susan Reeves, the DH-H chief nursing executive, had been named executive vice president of Dartmouth-Hitchcock Medical, freeing up Conroy to concentrate more on the overall D-H health care system.)
It’s hard to pin down whether and how gender might play a role in the pay differential between the two leaders, said Mark Bonica, assistant professor of health management and policy at the University of New Hampshire.
“I would doubt any differential would be direct gender discrimination,” Bonica said in an email. “Dr. Conroy does not strike me as the sort of person to agree to an arrangement she did not see as fair (I’ve only met her once, but that’s my impression).”
He also said that she was previously gainfully employed and therefore not “in a position to be exploited.” She also might have been drawn to the job by non-pecuniary factors such as returning to her alma mater — she graduated from Dartmouth College in 1977 — or being able to bring Patrick Jordan, who previously was chief operating officer at Lahey, with her to D-H, he said.
More broadly, Bonica said it could be argued that “systemic gender discrimination” has kept Conroy’s compensation lower throughout her career, which could have put her in a more difficult negotiating position when she arrived at D-H. But, he said, “That’s a stretch and since systemic discrimination is usually statistical, it’s hard to point to one individual and say ‘here it is.’ ”
Women are underrepresented in health care leadership. Despite representing 66% of entry level health care employees, women hold just 30% of the C-suite leadership positions, according to a report released last month by the New York City-based consulting firm McKinsey & Company.
Though he departed in 2017, Weinstein’s name still appeared among D-H’s top earners in 2018, when he collected a package totaling $998,000, including base compensation of $783,000. Burns, the D-H spokeswoman, said Weinstein earned a “transition payment” from D-H in 2018, the same year he joined Microsoft Healthcare and Massachusetts-based health care investment firm Polaris Partners. The payment included bonus and deferred compensation payments, Burns said.
She said such payments are “part of a standard clause for agreements with hospital executives, and was in this case, a component of Dr. Weinstein’s employment agreement.”
In addition to Conroy, those earning a total compensation of more than $1 million at D-H in 2018 included three male physicians: Dr. Nathan Simmons, a Lebanon-based neurosurgeon; Dr. Daniel Stewart, a Manchester-based dermatologist; and Dr. Timothy Ryken, chief of neurosurgery at Dartmouth-Hitchcock Medical Center in Lebanon. Coming in just below the $1 million mark was pediatric neurologist Dr. David Bauer.
The total number of D-H employees earning more than $100,000 grew from about 1,380 in 2017 to 1,403 in 2018.
Elsewhere in New Hampshire, Dr. Joseph Pepe, CEO of Catholic Medical Center in Manchester with which D-H is seeking to combine forces, earned a total compensation package of $1.37 million in 2018. If the combination, which is under review by state and federal regulators, becomes final, Conroy would lead the new system and oversee the system’s northern presence, while Pepe would oversee the system’s southern facilities and practices. While more recent salary information is not available, CMC spokeswoman Lauren Collins-Cline said in an email that CMC’s leaders did not have pay increases last fall and “they recently took a 15% pay cut in response to the financial impact of COVID-19 on the hospital.”
CMC is projecting a $40 million loss this fiscal year due to COVID-19, Collins-Cline said. In addition to the executive pay cuts, CMC laid off 71 employees and reduced hours for another 40. It also had furloughs this spring before bringing most of those employees back in July, she said.
Despite suffering a pandemic-related operating loss of $84 million in the fiscal year that ended in June, D-H has avoided layoffs. But in May, some workers who were unable to be reassigned while elective procedures were on pause were asked to either use accrued earned time and or take unpaid time off, an effective furlough.
Burns, the D-H spokeswoman, declined to comment on whether executive compensation at D-H has been affected by COVID-19.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.