Reduced patient volumes and higher expenses have become the norm among hospitals, with many smaller organizations on the lookout for federal relief or new partnerships to keep the lights on.
However, the pandemic challenges of 2020 didn’t quite pull the country’s bigger for-profit health systems into the red—in fact, the largest publicly traded systems routinely posted full-year profits exceeding their numbers in 2019.
2020 was a bit more mixed for CEOs who steered those large systems through the storm. According to Securities and Exchange Commission proxy filings, total compensation for two of the top four publicly traded health system CEOs was down when compared to their pay in 2019.
The standout was 2020’s top earner, HCA Healthcare’s Sam Hazen, who collected about $30.4 million in total compensation for. This was up from the $26.8 million he claimed in 2019.
Community Health Systems’ Wayne T. Smith was this year's other gainer. He brought in about $9.1 million in his final year as CEO, up from the roughly $8.1 million he earned in 2019.
Each CEO saw pandemic-related cuts to their salaries except for Tenet Healthcare’s Ron Rittenmeyer, who had agreed to donate half of his salary over a seven-month period to a fund assisting the system’s employees.
Salaries, however, are a relatively small portion of the compensation executives see over the course of a year. For stock awards, Rittenmeyer led the pack with $10 million largely bolstered by a stock price-related payout in December.
HCA’s Hazen, meanwhile, saw a massive pay bump tied to the value of his supplemental executive retirement plan benefits. Changes in his pension value and non-qualified deferred compensation earnings landed at about $12.3 million for 2020, up from $9.6 last year.
Also worth noting is $8.6 million in option awards bagged by Universal Health Services’ Alan Miller. This represented the vast majority of this year’s pay for the health system CEO and founder, who stepped aside in January to be replaced by his son Marc Miller.
The SEC’s proxy filings included additional information on the perks these CEOs enjoyed during the pandemic year, such as corporate aircraft use and funds for maintenance of a personal residence. Read on below to see the full breakdown of each individual CEO’s 2020 compensation.
Wayne Smith, Community Health Systems
2020 compensation: $9,066,419
CEO to median employee pay ratio: 161:1
Wayne Smith, 75, became CEO of Community Health System in 1997 and was named chairman of the board in 2001. He stepped away from the CEO role at the end of 2020 and now holds the board’s chief executive position. He was replaced by President and Chief Operating Officer Tim Hingtgen on January 1.
Smith’s base salary was $1.3 million in 2020. He received $1.7 million in restricted stock awards and $265,000 in option awards. He also saw $4.6 million through Community Health Systems’ non-equity incentive plan as well as a $1.1 million change in his pension value and non-qualified deferred compensation. He did not receive a bonus in 2020.
The health system listed $95,424 in other forms of compensation for its outgoing CEO. These included $55,365 toward life insurance premiums, $4,516 in membership dues, a $2,500 401(k) match and $29,335 for the personal use of a corporate aircraft.
Sam Hazen, HCA Healthcare
2020 compensation: $30,397,771
CEO to median employee pay ratio: 556:1
Samuel Hazen, 60, is relatively new to his role. He was named CEO in January 2019 after serving as president and chief operating officer since November 2016. He is also a member of the Nashville, Tennessee-based system’s board.
HCA Healthcare paid Hazen a base salary of more than $1.3 million and awarded him restricted stock and stock appreciation rights totaling nearly $13.1 million. Hazen gained $3.5 million in non-equity incentive plan compensation and saw a hefty $12.3 million change in pension value and non-qualified deferred compensation earnings. He did not receive a bonus.
Hazen also pulled in $186,318 in other forms of compensation. This was up of $166,818 in dividend equivalent payments and a $19,500 401(k) plan match.
Ron Rittenmeyer, Tenet Healthcare
2020 Compensation: $16,675,529
CEO to median employee pay ratio: 306:1
Ron Rittenmeyer, 73, took up the CEO mantle in October 2017 after being named executive chairman two months prior.
His base salary at Tenet was over $1.4 million this year and came with a bonus of $875,000. He received a hair over $10 million in stock awards and more than $3.9 million in non-equity incentive plan compensation.
Listed among the $407,143 in other compensation Tenet paid out was $24,918 tied to personal use of the corporate aircraft and $11,702 toward personal use of a company car and driver that the system said was provided for security reasons. The company also picked up $128 in Rittenmeyer’s long-term disability premiums.
Alan Miller, Universal Health Services
2020 compensation: $13,246,214
CEO to median employee pay ratio: 305:1
Alan Miller, 83, founded his health system back in 1979. He served as both the CEO and chairman until handing the former role to his son Marc Miller at the top of 2021. The senior Miller now acts as the executive chairman of the board.
As CEO in 2020, Alan Miller earned a base salary of over $1.4 million and banked a $1 million bonus. He received about $1 million in stock awards and more than $8.6 million in option awards. His pension value and nonqualified deferred compensation earnings totaled $44,826.
The rest of Alan Miller’s nearly $1.2 million in compensation came from a collection of personal benefits more diverse than those listed for his fellow CEOs.
Most of the funds were tied to relatively standard payouts: almost $1.1 million in split-dollar-life insurance agreements, $6,486 in dividends paid on unvested stock, $9,726 in long-term disability premiums and a $8,550 410(k) plan match. Otherwise listed among the payouts were $25,000 for professional tax services and $2,573 for additional accounting services; $10,789 for country club dues; $3,022 for maintenance on his personal residence; $23,075 toward lease, fuel and maintenance tied to his car; and a $360 wireless stipend.