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Analysis

Outgoing HCA CEO Made 383-Times as Much as Median Employee

By Jack O'Brien  
   March 06, 2019

CEO R. Milton Johnson made $21.4 million in his last year at the Nashville-based company, compared to the median HCA employee salary of $55,977.

HCA Healthcare's top executive, R. Milton Johnson, saw his pay increase by more than $4 million in 2018, while the median employee salary at the for-profit healthcare facility operator rose by only $500.

Johnson, who retired at the end of 2018, earned $21.4 million, according to the company's most recent filing with the Securities and Exchange Commission (SEC). The amount is 383-times as much as the $55,977 median salary of an HCA employee, up from the 312-times pay ratio recorded last year. 

Johnson was not the only HCA executive who earned a significant paycheck in 2018, as his replacement Samuel Hazen made over $10 million in his role as COO.

HCA currently employs 261,979 workers and calculated the median salary compensation through the consistently applied compensation measure (CACM). As it did in 2017, HCA again excluded its 5,083 employees in the United Kingdom and 3,942 employees added through acquisitions as it formulated its pay ratio.

The SEC filing came more than one month after HCA released an impressive Q4 2018 earnings report and completed its $1.5B acquisition of Mission Health, a seven-hospital system based in North Carolina.

Related: HCA Revenues Top $12.2B, Admissions Continue to Rise

Related: HCA Completes $1.5B Mission Health Acquisition

Johnson's departure from HCA will become official on April 26, when the company holds its annual shareholder meeting and is expected to select current board member Thomas F. Frist III, son of company founder Thomas Frist Jr., as the next chairman.

Johnson has worked at HCA for 36 years, including five years as CEO, as he hands off the reins to fellow longtime colleague Hazen.

Johnson is also expected to collect approximately $50 million as part of his retirement package.

Correction: A previous version of this article indicated that Hazen's compensation for 2018 was $43.5 million, when it was actually just north of $10 million. This article has been revised to reflect that.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Photo credit: KONSKIE, POLAND - December 1, 2018: Hospital Corporation of America (HCA) logo displayed on smartphone - Image / Editorial credit: Piotr Swat / Shutterstock.com


KEY TAKEAWAYS

In 2017, Johnson's CEO-to-median employe salary pay ratio was 312:1.

That ratio rose to 383:1 in 2018.

His replacement, Samuel Hazen, received $10 million as COO last year.

Johnson, who will step down as chairman in late April, is expected to collect approximately $50 million as part of his retirement package.

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