UPMC president Romoff receives $4.5M in salary, benefits

UPMC President Jeffrey Romoff earned $4.5 million in salary and benefits in the last fiscal year, a 12.2 percent increase over the prior year, according to annual tax returns for UPMC made public Friday.

Romoff, who was among the UPMC executives to take a voluntary pay cut earlier this year, got an unspecified share of some $26 million paid to a management firm with longtime close ties to UPMC.

UPMC spokeswoman Wendy Zellner said the $26 million paid to Managed Care Administrators in the fiscal year ending July 30, 2008, was for deferred compensation earned prior to 2005 by Romoff and a dozen other senior employees. A breakdown was not provided.

Romoff's exact current salary, including the pay cut, will not become public until tax returns are filed a year from now. His income reported yesterday included $4,448,181 in compensation and $72,367 in benefits.

Despite new reporting requirements by the Internal Revenue Service that went into effect this year, UPMC did not disclose the details of the nonprofit's business dealings with its board members and their businesses or members of their immediate family. Under the new rules, the IRS provides a separate schedule for reporting direct and indirect dealings with board members and their businesses.

The UPMC returns state that dealings with board members and their businesses were conducted "at arm's length." The returns note that the business affiliation of board members is disclosed. The same notation was provided in prior reports.

"We are following all the regulations and reporting what we should report," Zellner said.

UPMC officials state that all possible conflicts are disclosed to the board and a special ethics panel. A board member with a possible conflict must "recuse himself from voting on the transaction," according to the tax returns.

Court and other records show that the law firms of board members have represented UPMC in dozens of malpractice cases and in UPMC bond issues.

Other high wage earners reported in the two major tax returns made public include Senior Vice President Robert Cindrich, $1.3 million; Executive Vice President Elizabeth Concordia, $1.6 million; Vice President and Chief Financial Officer Robert DeMichiei, $1.1 million; Treasurer and Vice President C. Talbot Heppenstall Jr., $858,265; and oncologists Stanley Marks, $1.77 million, and Jeffrey Shogan, $1.35 million.

UPMC officials said that Romoff's salary is not excessive, particularly when compared to for-profit corporations of comparable and even smaller size.

In the prior fiscal year, Romoff took in just shy of $4 million in salary and benefits, an 18 percent hike over the previous year.

By comparison, the top salaries last year for the University of Pennsylvania's medical complex were $3.3 million to Ralph W. Muller, head of the UPenn Health System, and $3.5 million to Arthur Rubenstein, dean of the Penn School of Medicine.

Tax returns for the West Penn Allegheny Health System are expected to be made public next week.

UMPC's latest returns are the first to be filed under new and more detailed reporting requirements imposed by the IRS. Some of the disclosure requirements are specifically targeted to nonprofit hospitals and health care firms like UPMC.

Next year those requirements will expand even further.

The release of the tax returns occurs as UPMC officials, despite $800 million in investment losses, report good financial health for the corporation with annual revenues of some $7 billion. A week ago, UPMC announced third-quarter financial results showing operating income was up $2 million to $154 million from the same period last year

In a briefing for investors earlier this week, UPMC officials disclosed that up to $50 million in a new $400 million bond issue will be earmarked for increased investment in UPMC operations in Ireland.

A UPMC spokesman declined to disclose the details, but published reports in Ireland state that the Pittsburgh-based health system will gain a 60 percent interest in the Beacon Hospital Co. UPMC owns a 25 percent stake, which it acquired for $22 million in 2008. Beacon has announced plans to build several hospitals.

In a briefing for investors, UPMC officials said the final number might be less than $50 million.