Universal Health Services’ Marc Miller received just over $14 million in total direct compensation during his first year in the CEO role, which, prior to last year, was held by his father UHS founder Alan Miller, according to a 2021 Securities and Exchange Commission (SEC) proxy filing published Thursday.
The younger Miller’s 2021 take-home was a massive increase from the roughly $2.3 million he earned in 2020 as president, a role he now jointly holds alongside the new title.
His 2021 payout was a combination of $1.1 million in base salary, $10.1 million in equity compensation (grant date fair value option awards) and almost $2.8 million in nonequity incentive plan compensation, per the filing.
Miller also saw a roughly $52,000 change in pension value and nonqualified deferred compensation earnings, almost $5,700 in insurance premiums and $8,700 in company contributions to his retirement/401(k) plan.
The median total compensation of UHS employees in 2021 (excluding the CEO) was $45,454, representing a CEO-to-median-worker pay ratio of 309:1, according to the filing.
His father, now in the executive chairman position, took home about $13.2 million in 2021—roughly on par with his total compensation in 2020 when he was still CEO.
Other executives at the for-profit health system listed in the filing included Executive Vice President, Chief Financial Officer and Secretary Steve Filton, who earned over $4.8 million in total compensation in 2021; Executive Vice President and President of Acute Care Marvin Pember, who collected roughly $4.8 million; and Executive Vice President and President of Behavioral Health Matthew Peterson, who took home over $3.9 million.
UHS recently announced that it will be shifting the makeup of these executives’ compensation to be “more closely aligned with the comparable target pay mix at our peer group companies,” according to an 8-K filing from late March.
In 2022, Miller and other UHS leaders will be seeing a bump in their base salaries and a much greater increase in cash incentives that will be offset by a substantial decline in long-term incentives (equity compensation). The shift will not result in any “significant” changes in target compensation levels, the company wrote.
For Miller, those changes will yield in 2022 a base salary of $1.3 million, cash incentives of nearly $2 million and about $9.5 million in equity compensation for a total of $12.8 million in direct compensation, according to the filing.
Of note, the CEO and president’s base salary in 2022 reflects a 150% target annual incentive award, up from 2021’s 100% target bonus award.
“We believe the changes to the elements of compensation for each of our [named executive officers] … continue to preserve significant reliance on at-risk, performance-based compensation for our CEO and other [named executive officers],” UHS wrote in the SEC filing. “After giving effect to the changes in the elements of compensation during 2022 … approximately 90% of the target pay for our CEO, and approximately 80% of the target pay for our other [named executive officers], is comprised of performance-based incentive compensation.”
King of Prussia, Pennsylvania-based UHS employs more than 89,000 people across 27 acute care hospitals, 335 behavioral health facilities and other care locations. The system reported $991.6 million in net income during 2021 alongside a 9.4% net revenue increase to over $12.6 billion.
Compared to his for-profit contemporaries, UHS’ Miller was in the middle of the pack on 2021 pay. Although he was ahead of the $9.5 million claimed by Community Health Systems’ Tim Hingtgen, he trailed the $21.2 million of Tenet Healthcare CEO Saum Sutaria, M.D., and the $20.6 million of HCA Healthcare CEO Samuel Hazen.