DENVER (CBS4) – After weeks of defending executive performance bonuses, the board overseeing Denver Health Medical Center said Wednesday it planned to “revisit the compensation philosophy and approach for Denver Health, including but not limited to the leadership group. As part of the work,” said the board statement, “the Board will review the Management Incentive Plan.”
The Management Incentive Plan is the bonus system at the hospital revealed in a CBS4 investigation last month. In two of the last four years, about 140 top executives and administrators have banked millions in performance bonuses. At the end of 2018, the pool for bonuses topped $4 million.
CBS4 reported that a week after front-line workers at the hospital were asked in April to cut pay and hours and take a financial hit for the hospital, top executives and administrators banked big bonuses on April 10 for their work in 2019:
– $230,000 bonus for hospital CEO Robin Wittenstein in addition to her $967,000 salary
– $53,000 bonus for the hospital PR and Marketing Chief on top of his $270,000 salary
– $93,000 bonus for the CFO in addition to her $530,000 salary
– $78,174. Bonus for the hospital’s lawyer in addition to his $402,300 salary
– $65,397 bonus for the Chief Administrative Officer in addition to $401,700 salary
Those revelations infuriated some of the 7,000 staff members at the safety net hospital, who said they believed in the mission, accepted lower salaries to work there, but did not know their managers were so highly compensated and were accepting bonuses.
Wittenstein and the hospital board continually defended the bonuses saying the timing of handing them out was poor, but the strategy itself was sound.
“It gives executives an opportunity to put a portion of their salary at risk,” said
Wittenstein, “and earn it based on work that goes on.”
But at a recent meeting with hospital doctors, Dr. Ivor Douglas, who oversees the Medical Intensive Care Unit at the hospital, told Wittenstein the bonuses were not a problem of timing or optics.
“These bonuses — lets call them what they are — were triggered by financial incentives which you and your senior executive staff propagated by cutting programs, slashing things to the bone … in order to get quarter million and $100,000 payouts.”
CBS4 obtained a recording of the meeting.
“Incentive bonus plans in instititutions like this,” continued Douglas, are “corrupt, misaligned.”
Wittenstein again apologized for the timing of the bonuses but “not the compensation program the board of directors has approved.”
But in a statement Wednesday, the hospital board backed down, saying it understood “the anger, frustration and pain created by the Management Incentive Payments received by the leadership of Denver Health. The compensation system, was created and is overseen by this board and not by the leadership of Denver Health, or the employees who are covered by the plan.”
The statement went on to say, “Based on the voices we have heard from staff and from leadership, the board will revisit the compensation philosophy and approach for Denver Health, including but not limited to the leadership group. As
part of this work, the Board will review the Management Incentive Plan.”
The release also said the leadership group of Denver health, comprised of executives and physician Directors of Service, told the board they are voluntarily reducing their salaries by 20% immediately “to help mitigate the economic impact
of this pandemic on Denver Health.”
In the recorded showdown between Wittenstein and Dr. Douglas, he said the staff felt betrayed by the bonus plan.
“I’m scared of what the repercussions will be and many of us in this room and on this phone line will not speak to you because we are fearful, fearful for our jobs,” said Douglas.
Wittenstein assured Douglas he would not be fired for his blunt comments.
“I have real patients dying upstairs in this building,” said Douglas, “and that’s where our focus has to be today.”