Executive Compensation

Overview

In addition to reviewing compensation for competitiveness, it is critical for health care organizations to take the necessary steps to ensure compliance with the Taxpayer Bill of Rights 2.
Retroactively, effective as of Sept. 14, 1996, the Taxpayer Bill of Rights 2 substantially increased the power of the Internal Revenue Service (IRS) to penalize tax-exempt organizations, directors and disqualified persons [link to disqualified persons below] that do not comply with tax laws regarding excess benefit, private inurement and compensation.

Taxpayer Bill of Rights 2 authorizes the IRS to apply intermediate sanctions to any excess benefit transaction.

Intermediate sanctions include taxes and penalties on individuals receiving the excess benefits and on anyone who knowingly approves any excess benefit transaction.

  • An excess benefit transaction arises when a tax-exempt organization provides an economic benefit to a "disqualified person" if the value of the benefit provided exceeds the value of the consideration the tax-exempt organization receives in return.
  • A "disqualified person" is any person who is (or was in the preceding five years) in a position to exercise substantial influence over the affairs of the organization ("Disqualified persons" are likely to include directors, trustees, top management and key physicians without any management status.)

Independent, External Review

The Executive Committee engaged a third-party compensation expert, Sullivan, Cotter and Associates of Chicago to review all compensation programs as they apply to approximately 50 senior executives and executives throughout UnityPoint Health. Sullivan, Cotter and Associates studies hospital and health system executive positions throughout the nation and issues an annual executive compensation report in Modern Healthcare magazine. 

All aspects of compensation and benefits were reviewed including, but not limited to, the following:

  • Base salaries
  • Business allowance
  • Short-term and long-term incentive compensation plans, including review of eligible participants, opportunity levels, performance indicators and award history
  • Benefit plans, including both quantitative and qualitative analysis
  • Benefits offered to the executive group
  • Severance plans or polices as they apply to the positions in the study
  • Other benefits, including Social Security, health, life and disability insurance

Summary:

In accordance with UnityPoint Health's compensation philosophy, executive base salaries for good performance are provided at the 50th percentile of the market. This information is verified annually by Sullivan Cotter and Associates, an independent executive compensation consultant. 

2013 UnityPoint Health Executive Compensation ($ rounded to nearest thousands) per IRS reporting guidelines:


Officer  Title  Operating Unit Base Salary Bonus & Incentive Other Taxable Subtotal Deferred Nontaxable Benefits   Total
Bill Leaver  President and EO  UnityPoint Health $1,088 $210 $67 $1,365 $885 $43 $2,293
Eric Crowell President and CEO  UnityPoint Health - Des Moines $555 $54 $67 $676 $504 $26 $1,206
Alan Kaplan, MD President and CEO UnityPoint Clinic $562 $138 $56 $756 $236 $22 $1,014
Rick Seidler President and CEO UnityPoint Health - Quad Cities $507 $54 $61 $622 $303 $14 $939
Ted Towsend President and CEO UnityPoint Health - Cedar Rapids $439 $28 $69 $536 $323 $19 $878
Deborah Simon President and CEO UnityPoint Health - Peoria $368 $82 $168 $618 $117 $25 $760
Susan Thompson President and CEO UnityPoint Health - Fort Dodge $325 $90 $68 $483 $176 $14 $673
Peter Thoreen President and CEO  UnityPoint Health - Sioux City $326 $60 $59 $445 $204 $24 $673
David Brandon President and CEO UnityPoint Health - Dubuque $308 $79 $55 $442 $122 $17 $581
Pamela Delagardelle President and CEO UnityPoint Health - Waterloo $294 $10 $55 $359 $61 $26 $446
* Please note that table above may have rounding differences. 

             

Base Compensation (Form 990, Schedule J, Column (B)(i))

Base compensation that was included in box 5 of Form W-2 (or in box 1, if no compensation is reported for that person in box 5), or box 7 of Form 1099-MISC, issued to the person. Base compensation means non-discretionary payments to a person agreed upon in advance, contingent only on the payee's performance of agreed-upon services (such as salary or fees).

Bonus & Incentive Compensation (Form 990, Schedule J, Column (B)(ii)) 

Bonus and incentive compensation that is included in box 5 of Form W-2, (or in box 1, if no compensation is reported for that person in box 5), or box 7 of Form 1099-MISC, issued to the person. Examples include payments based on satisfaction of a performance target (other than mere longevity of service), and payments at the beginning of a contract before services are rendered (for example, signing bonus).

Other Compensation (Form 990, Schedule J, Column (B)(iii)) 

Report all other payments included in box 5 of Form W-2, (or in box 1, if no compensation is reported for that person in box 5), or box 7 of Form 1099-MISC issued to the person but not reflected in columns (B)(i) or (B)(ii). Examples may include, but are not limited to, current-year payments of amounts earned in a prior year, payments under a severance plan, payments under an arrangement providing for payments upon the change in ownership or control of the organization or similar transaction, and awards based on longevity of service.

Taxable Subtotal Compensation

Subtotal that reports the taxable amount from Form W-2, Box 5 (Medicare Wages and Tips).

Deferred Compensation (Form 990, Schedule J, Column (C)) 

Report all current-year deferrals of compensation under any retirement or other deferred compensation plan, whether qualified or nonqualified, that is established, sponsored or maintained by or for the organization or a related organization. Report as deferred compensation the annual change in actuarial value, whether or not funded, vested or subject to a substantial risk of forfeiture.  

Nontaxable Benefits (Form 990, Schedule J, Column (D)) 

Nontaxable benefits are benefits specifically excluded from taxation under the Internal Revenue Code. Common nontaxable benefits, referred to as "fringe benefits," include, but not limited to, value of housing provided by the employer, educational assistance, health insurance, medical reimbursement programs, life insurance, disability benefits, long-term care insurance, dependent care assistance and adoption assistance.