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No Bonus Pay for Quorum CEO as Spin-off Feud Simmers

By Steven Porter  
   April 30, 2018

The CEO's $3.2 million compensation was 77-times as much as that of the median Quorum employee.

Thomas D. Miller, president and chief executive officer for Quorum Health, made 34% less last year than he did the year before, as the company continues to feud with Community Health Systems, which spawned Quorum two years ago.

After earning more than $4.9 million in 2016, Miller's total compensation fell to $3.2 million in 2017, according to records Quorum filed Friday with the Securities and Exchange Commission. He earned neither a bonus nor incentive pay last year, the records state.

Quorum has a dispute pending before the American Arbitration Association over transition services agreements it signed with CHS in 2016. Both organizations have struggled financially since the spin-off, with Quorum underperforming projections and CHS launching into a hospital-selling spree.

CHS CEO Wayne T. Smith saw his total compensation drop dramatically in recent years, from more than $10.4 million in 2015 to $4.9 million in 2017, according to SEC filings. His declining pay rate was tied largely to CHS stock prices.

Pay ratios

Miller's $3.2 million compensation last year was 77-times as much as the $41,800 earned by the median Quorum employee, the company said in its SEC filing.

Smith's $4.9 million compensation, meanwhile, was 80-times as much as the $61,600 earned by the median CHS employee.

Those two CEO pay ratio disclosures—which are newly required under the Dodd-Frank Act—are markedly lower than those reported 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.
     
  • Universal Health Services Board Chair and CEO Alan B. Miller, who founded the company in 1979, earned more than $21.6 million last year, which was 541-times as much as the median worker's compensation of less than $40,000.

These ratios should be taken with a grain of salt, though, because the SEC grants companies flexibility in determining how they will calculate median employee salary and subsequent CEO pay ratio.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


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