6 executives at Highmark, Allegheny Health Network hospital system exceed $1M pay
Allegheny Health Network CEO John Paul received $1.8 million in total compensation last year, one of two executives at the second-largest hospital system in Pittsburgh to be paid more than $1 million.
The compensation is far below what West Penn Allegheny Health System paid its former CEO before Highmark Health acquired the system of hospitals and integrated it into Allegheny Health last year. West Penn Allegheny paid former CEO Christopher Olivia $6 million in 2011, the last year that it had a permanent chief executive.
Since the April 2013 acquisition by Highmark, Allegheny Health has cut expenses, including laying off hundreds of workers, and boosted revenue as part of a strategy to return the system to profitability.
In the July-September quarter, the five-hospital West Penn Allegheny reported net income of $4.5 million, its first profit since Highmark’s purchase.
The network also includes Jefferson Hospital in Jefferson Hills and St. Vincent Hospital in Erie.
Paul’s pay was disclosed Friday in a tax return the nonprofit is required to file with the Internal Revenue Service. Paul, a longtime health care executive in Pittsburgh and former UPMC executive, worked as a consultant to Highmark for several years to develop Allegheny Health Network.
His compensation is in line with the median pay for CEOs of large urban teaching hospitals, according to a Harvard University study published last year. Those CEOs had a median salary of $1.7 million in 2009, according to the Harvard study. The median pay of all nonprofit hospital CEOs was less than $600,000 that year.
Among 12 executives listed as Allegheny Health’s highest-paid employees, only Daniel Lebish, the network’s former chief financial officer, made more than $1 million. Although Lebish left the network in July 2013 for an executive position with Columbus, Ga.-based insurer Aflac Inc., he still made $3.7 million, including a bonus of $1.6 million.
Allegheny Health Network spokesman Dan Laurent declined to comment.
Highmark Health also released its first tax return since forming last year, showing that former CEO William Winkenwerder received total compensation of $4.5 million in 2013. Winkenwerder left the nonprofit, which is also the parent of Highmark Inc., the state’s largest health insurer, in May and was replaced by David Holmberg. Holmberg made $1.6 million in 2013 as president of Highmark Inc.’s diversified businesses unit.
By comparison, Jeffrey Romoff, CEO of rival health system UPMC, received $6.6 million in total compensation in 2012, according to UPMC’s most recent tax return. UPMC, which operates on a July-June fiscal year, will report 2013 executive compensation in May. Highmark operates on a calendar year.
Winkenwerder was one of four top executives of the organization to earn more than $1 million, including CFO Nanette DeTurk, Chief Legal Officer Thomas VanKirk and Darren Macioce, a senior vice president.
Highmark Health spokeswoman Lynn Seay declined to comment.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or [email protected].