Cerner taps Google, Geisinger vet Feinberg as new CEO. Here's how much he'll get paid in his new gig

EDITOR'S NOTE: This story has been updated to include details of Cerner's compensation package for new CEO David Feinberg

David Feinberg, M.D., who spent the past two years at Google leading the tech giant's health efforts, is moving over to lead Cerner after a three-month CEO search.

The Kansas City-based health IT company announced Thursday that Feinberg will step into the role of president and CEO starting Oct. 1. He succeeds Brent Shafer, who previously announced his decision to transition from chairman and CEO.

“I am honored to join Cerner and look forward to working closely with Cerner’s talented associates as we continue to profitably grow the business by driving global healthcare transformation,” Feinberg said in a statement.

“Throughout my career, I’ve been guided by the goal of improving patient health and reducing the complexity of the healthcare system. I am thrilled to join a company that is so uniquely well-positioned to provide technology solutions that enable clinicians to take better care of patients while driving better clinical, operational, and financial outcomes for organizations of all sizes," he said.

Feinberg said he looks forward to expanding opportunities for Cerner clients and associates while affecting real change in healthcare and enhancing value for our shareholders.

Google executives said in a statement released by a spokesperson, “Google deeply believes in the power of technology to improve health and wellness and we have increased our health investments across the company. We are grateful for David’s leadership and guidance over the past few years to help accelerate our health efforts and wish him the best.” 

The spokesperson declined to provide information on Google Health's transition plans.

Feinberg's projected pay

According to a filing with the U.S. Securities and Exchange Commission (SEC), Cerner's compensation package for Feinberg totals about $34.5 million through 2022.

Under an executive employment agreement approved by the Cerner board of directors, Feinberg's initial base salary will be $900,000, according to the 8-K form that Cerner filed. He'll also receive a one-time cash bonus of $375,000 to replace annual incentives he earned at Google.

Feinberg also will get a one-time new hire award of $15 million in restricted shares to offset his equity loss with Google as well as $13.5 million in restricted stock units in 2022 and $3.375 million in shares in the fourth quarter. His annual targeted cash bonus is $1.35 million, according to the filing. He also gets to use Cerner's corporate jet.

Cerner announced in early May it was starting its search for a new CEO to replace Brent Shafer, who led the health IT giant for three years. Shafer was the first CEO after long-time company leader Neal Patterson passed in 2017. As a healthcare technology leader, Shafer joined Cerner with the mission of getting the business operationally turned around and on a trajectory for growth. 

RELATED: While revenue jumped 10% in Q2, Cerner looks to slim down costs by cutting jobs, offices

During his leadership at Cerner, the company implemented a new operating model to make the company more efficient and effective, Shafer said.

Shafer agreed to serve as a senior adviser for one year. According to an SEC filing in May, Cerner will provide Shafer with his existing salary, bonus and $2.5 million in restricted stock units.

The health IT company is separating the chairman and CEO roles and named William Zollars as independent chairman, also effective Oct. 1.

Cerner’s current president, Donald Trigg, also will leave the company, Cerner said in a press release.

Feinberg, a physician and psychiatrist by training, jumps to Cerner after spending two years as vice president of Google Health, where he led Google’s worldwide health efforts, bringing together groups from across Google and Alphabet that used artificial intelligence, product expertise and hardware to tackle some of healthcare’s biggest challenges. At Google Health, Feinberg was responsible for organizing and innovating Google's various healthcare initiatives.

Prior to Google, he served as president and CEO of Geisinger Health, where he led an operational turnaround and pushed the use of new platforms and tools, including an IT system called a unified data architecture that allowed the company to integrate big data into existing data analytics and management systems, according to a Cerner press release.

During his Geisinger tenure, Feinberg also introduced programs and services to put a greater focus on precision medicine and better patient care. Prior to Geisinger, Feinberg worked at the University of California, Los Angeles (UCLA) for more than 20 years and served in a number of leadership roles, including president, CEO and associate vice chancellor of UCLA Health Sciences, vice chancellor and CEO for the UCLA Hospital System and CEO of UCLA’s Ronald Reagan Medical Center.

“Over the past few months, our board conducted an extensive search for a CEO candidate with the expertise and ability to effectively capitalize on the opportunities in the market we serve,” said Mitch Daniels, member of the Cerner board and chair of the nominating, governance and public policy committee, in a statement. “With his exceptional track record of leading and innovating programs to improve patient care, technology experience, and industry expertise, we believe Dr. Feinberg is the ideal CEO to lead Cerner in its next chapter of growth and success.”

RELATED: Cerner begins search for new CEO as company ups 2021 earnings guidance buoyed by improved margins

"We are fortunate to have someone with Dr. Feinberg’s skills, vision and operational expertise to lead Cerner at such a pivotal time in our evolution. We are thrilled to welcome him to the Cerner family and look forward to benefiting from his insights and leadership as we continue evolving and executing our strategies,"  Zollars said in a statement.

Cerner's evolving business strategy

Feinberg comes on board as the company is evolving to expand beyond electronic health record (EHR) technology to focus on artificial intelligence and data analytics. In December 2019, Cerner announced it is collaborating with Amazon to ramp up its healthcare AI capabilities and predictive technology tools. 

During the annual J.P. Morgan healthcare conference this past January, Cerner executives said the health IT company was setting its sights on building a $1 billion data business for the healthcare and life sciences industries.

As part of its federal health IT business, Cerner is working to implement EHR systems at the Department of Veterans Affairs (VA), the Department of Defense and the U.S. Coast Guard. However, Cerner has run into problems with its VA EHR project as the agency recently scrapped the rollout schedule for its new EHR for at least six months to overhaul training and fix governance and management problems.

The company also has a renewed focus on improving its operating performance as part of a settlement with activist hedge fund Starboard Value announced back in April 2019. Cerner agreed to take steps to improve operations and committed to hitting certain operating targets.