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Median UHS Employee Earned 0.18% As Much As CEO Alan Miller

By Steven Porter  
   April 05, 2018

Universal Health Services paid its top executive a base salary higher than peer companies on account of his tenure as CEO, his value as the company’s founder, and his status in the industry, the company said.

The median total compensation for an employee of Universal Health Services (UHS), which is headquartered in King of Prussia, Pennsylvania, was just shy of $40,000 last year.

The company’s board chair and CEO, meanwhile, made 541-times that amount, according to documents UHS filed Thursday morning with the Securities and Exchange Commission (SEC).

Alan B. Miller, who founded UHS in 1979, earned more than $21.6 million in total compensation last year, including a base salary of more than $1.6 million and nearly $16 million in stock options.

The 541-to-1 pay ratio—the disclosure of which is newly required under the Dodd-Frank Act—means the median UHS employee earned 0.18% as much as Miller did in 2017. And it is markedly higher than the ratios disclosed to the SEC recently by other hospital operators:

  • Tenet Healthcare Corporation Executive Chairman and CEO Ronald A. Rittenmeyer's total compensation was annualized at $5.2 million last year, which was 102-times as much as the median worker’s compensation of about $50,900.
     
  • Encompass Health President and CEO Mark J. Tarr, MBA, earned more than $4.9 million in total compensation last year, which was 134-times as much as the median worker’s compensation of about $36,700.
     
  • HCA Healthcare Chairman and CEO R. Milton Johnson earned nearly $17.3 million in total compensation last year, which was 312-times as much as the median worker’s compensation of less than $55,400.

The ratio between Miller’s compensation and that of the median UHS employee fell between the 75th and 90th percentiles among companies with revenue of $5-15 billion, the company noted in its filing, citing a survey of 365 public companies.

But it is important to note that companies have some discretion in how they calculate these ratios.

“As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios,” UHS said in its filing.

That caveat could be especially important to keep in mind with the UHS pay ratio disclosure because UHS included part-time and temporary employees in its calculation.

Steven Porter is editor at HealthLeaders.

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