Ousted MetroHealth CEO 'took deliberate steps' to hide unapproved bonuses, third-party audit finds

Updated on March 6 at 5:00 p.m.

MetroHealth System has released a third-party audit report that “confirms” its former president and CEO not only sidestepped the system’s rules in authorizing nearly $2 million in self-paid bonuses but “took deliberate steps to conceal his actions,” the Ohio organization said in a release.

The audit also places some of the blame on MetroHealth’s recently resigned chief financial officer, who was allegedly aware of the program but “assumed” it was sanctioned and did not discuss it with the board.

Former CEO Akram Boutros, M.D., was pushed out of MetroHealth in November prior to a planned retirement after board of trustees members uncovered evidence that he had authorized supplemental bonuses “of more than $1.9 million” to himself from 2018 to 2022.

Though MetroHealth said at the time that Boutros admitted to authorizing the bonuses, the ousted executive has since filed multiple lawsuits against the system alleging that his termination was “retaliatory” and that the firing was related to violations of Ohio’s Open Meetings Act. One of those challenges was reportedly dismissed by a county judge last month.

The independent audit released Friday was conducted by an accounting firm, BDO, that was hired by the law firm that conducted MetroHealth’s initial investigation, Tucker Ellis.

BDO’s audit found that Boutros “controlled the creation, implementation and execution” of the bonus program, which included his own enrollment as an eligible employee without board approval, self-evaluations and calculations of his own bonus payout, according to the report.

It also found that Boutros’ cash compensation exceeded an upper limit that, for any executive at the system, would have required Boutros to disclose the exceedance to the board.

Further, Boutros had “a number of opportunities” to disclose the program to the board of trustees over nearly four years, according to the audit. He also excluded MetroHealth’s human resources from his bonus programs’ processes, with BDO writing that human resources executives were “unaware of the existence” of the program.

Boutros’ legal counsel has since released a statement criticizing the audit and reaffirming arguments from the lawsuit that MetroHealth’s board was aware of the bonus program.

“BDO was hired by the Tucker-Ellis law firm, the same law firm that produced the biased and incomplete initial report,” Boutros’ counsel said. “There is nothing independent about this audit report. The report continues to deny allegations that we could definitively prove to be true today.”

BDO’s audit also highlighted “weaknesses” in MetroHealth’s capacity to control the CEO’s compensation. Several of these pointed a finger at Chief Financial and System Services Officer Craig Richmond, who this past week was released from his role at MetroHealth.

Based on interviews with Richmond and other analyses, BDO determined that “only the CFO participated in determining the [bonus program] calculations with Dr. Boutros. … The CFO is the financial control gatekeeper for the system and, as such, should have implemented controls to ensure proper segregation of duties related to the [bonus] program.”

Richmond told BDO that he “assumed” the board had approved Boutros’ participation in the bonus program and did not discuss it with the board or another appropriate executive, according to the report.

In a statement given to press, MetroHealth said that Richmond had “chosen to resign” from his position. The system did not link Richmond to Boutros’ actions.

MetroHealth’s release outlined steps it has taken so far to “strengthen policies and processes and improve organizational oversight.”

Compensation consultants hired by MetroHealth will be directly reviewing CEO compensation data verified by human resources “rather than relying on data provided by the CEO alone,” they said, and the board will receive “actual payroll data” for senior executives at least once a year, among other changes, the system said.

Recommendations outlined by BDO in the audit will also be considered by the board during its next meeting.

Boutros, an internist, had held his positions as CEO and president at MetroHealth since 2013 and in late 2021 announced his plans to retire by the end of 2022. He was replaced on an interim basis by Executive Vice President Nabil Chehade, M.D., and on Dec. 5 was succeeded by current CEO and President Airica Steed, M.D., who came over from Sinai Chicago.

Updated on Nov. 29, 2:45 p.m.

Former MetroHealth System CEO and President Akram Boutros, M.D., filed a lawsuit against the Ohio system and its board of trustees over "multiple violations" of Ohio's Open Meeting Law that he claims ultimately led to his "retaliatory" termination.

Boutros was ousted from the four-hospital system last week alongside a statement from the board outlining nearly $2 million in self-paid bonuses that the board said were unauthorized. Boutros and his legal representation released a statement the following day that the board's announcement was "full of misinformation and outright lies.”

The lawsuit filed by Boutros alleges that over the past two years MetroHealth's board and its chair, Vanessa Whiting, illegally convened private meetings as it sought Boutros' eventual replacement Airica Steed, M.D., an issue that Boutros raised with the board. 

The filing also claims that the board "secretly" hired counsel to investigate Boutros without proper authorization before similarly terminating him "without the mandatory public notice and deliberation."

That investigation, which has since been released to the public, uncovered the unauthorized supplemental payments and was used as justification for Boutros' termination. The former executive has already paid back the bonuses plus interest, according to last week's termination announcement.

Boutros wrote in the lawsuit that the violations of Ohio's Open Meeting Law "invalidates the findings of the unlawful investigation. ... It also nullifies the board's unlawful termination of Dr. Boustros' employment."

Boutros wrote in the complaint that a second lawsuit will also be filed "to recover damages for this retaliation and other misconduct." 

MetroHealth's board is sticking by its decisions and the findings of the investigation.

“We are confident the board acted in accord with Ohio law, but no one should lose sight of the irony that someone who for five years actively cloaked his actions is trying now to recast himself as a champion of sunshine," MetroHealth said in a released statement. “We will file our response in due time, but urge everyone to read the Tucker Ellis report that resulted from the investigation we launched into Dr. Boutros’ actions. It speaks for itself.”

Nov. 22, 11:30 a.m.

The president and CEO of a major Ohio health system was pushed into an early retirement and is now threatening legal action after board members learned he had authorized nearly $2 million in bonus compensation without their approval.

Akram Boutros, M.D., admitted to establishing his own metrics to assess his performance as the head of MetroHealth System, according to a Monday evening statement from Board of Trustees Chair Vanessa Whiting.

Upon determining that he passed those metrics, Boutros authorized supplemental bonuses “of more than $1.9 million” to be paid to himself between 2018 and 2022.

The former executive did not disclose the self-evaluations or bonuses to MetroHealth’s Board of Trustees “even though Dr. Boutros’ employment contract makes clear that the Board sets Dr. Boutros’ compensation,” the academic safety-net system’s board chair said. Boutros also omitted fully reporting his pay to a consultant hired by MetroHealth to annually review and assess his compensation, according to the statement.

The board launched an internal investigation led by an outside firm after learning about the self-payments during a planned retirement and CEO transition, Whiting said. This led the board to demand—and as of Oct. 31, receive—repayment of more than $2.1 million in supplemental funds and interest from Boutros.

The board also voted on Monday evening to terminate Boutros’ employment, effective immediately. Boutros, an internist, had held his positions as CEO and president at MetroHealth since 2013 and in late 2021 announced his plans to retire by the end of 2022.

“We have taken these actions mindfully and deliberately but with sadness and disappointment,” Whiting said in the statement. “We all recognize the wonderful things Dr. Boutros has done for our hospital and for the community. However, we know of no organization permitting its CEO to self-evaluate and determine their entitlement to an additional bonus and at what amount, as Dr. Boutros has done.”

Executive Vice President Nabil Chehade, M.D., will serve as interim CEO in the run-up to the appointment of inbound CEO and President Airica Steed, M.D., on Dec. 5, Whiting said.  

Boutros and his attorney have since released a statement that characterized Monday’s vote as “the latest of a series of retaliatory acts” against the former executive and alleged that the board’s statement “is full of misinformation and outright lies.”

Boutros, according to the statement, raised concerns that deliberations on the new CEO were happening outside of public meetings and that Whiting had signed agreements and authorized payments without approval from the rest of the board.

“[Whiting] targeted [Boutros] for receiving bonuses that were also received by all eligible employees,” according to the former executive’s statement. “The ‘demand’ for repayment is evidence of the Board's discriminatory treatment as he is the only employee forced to repay bonuses. The Board of Trustees took this action to divert attention from their own gross negligence.”

Whiting said in last night’s statement that the former CEO was already offered a performance-based variable compensation plan with a bonus “based on achievements reached against annual organizational goals approved by the Board of Trustees.” The board did not delegate Boutros the authority to set goals and pay out his additional bonuses, she said.

Boutros told the board that he had self-reported to the Ohio Ethics Commission the day after his repayment, per Whiting’s statement.

“We stand ready to cooperate with any investigating authorities while we continue our internal investigation,” Whiting said.

Cleveland-based MetroHealth operates four hospitals, four emergency departments and dozens of other centers and care sites across Ohio’s Cuyahoga County. It employs nearly 8,000 people and serves over 300,000 patients, two-thirds of whom are either uninsured or covered under Medicare or Medicaid, according to its website.