Ontario hospital CEO contracts show car, golf perks
Ontario residents are getting a first look at the contracts of hospital CEOs, revealing a wide range of benefits and retirement packages that include offers of luxury car leases, golf club memberships and even free plastic surgery.
Hospital websites posted the contracts for some of the top earners in charge of the province’s 150 hospitals on Tuesday, as part of a new Freedom of Information disclosure that came into effect on New Year’s Day.
Tom Closson, president and CEO of the Ontario Hospital Association, said the decision was made to release the contracts online by Tuesday “rather than waiting for requests to come in one at a time or hospital by hospital.”
While the salaries of hospital executives who earn more than $100,000 annually have been disclosed since 1996 via Ontario’s so-called “sunshine list,” it wasn’t until now that their full contract details have been made readily available.
The contracts provide a window into the world of high-powered health executives.
For example, Mary Jo Haddad, the head of Toronto’s Hospital for Sick Children, makes $520,000 a year. If she gets fired, the hospital has to give her $25,000 worth of career counselling.
At Sunnybrook Health Sciences Centre, CEO Dr. Barry McLellan gets $18,000 a year for a vehicle.
While Ontario’s health-care system may be strapped for cash, Closson said some of the apparent special allowances for executives are necessary for them to do their jobs.
“The Sunnybrook CEO has a hospital that runs on multiple sites and uses a car at work, so there’s justification itself for a car allowance,” he said. Still, there are other CEO contract offers that may require some further explanation.
The original contract deal for Ruby Brown, the acting CEO of Trillium Health Centre in Mississauga, included offers of cosmetic surgery, fitness equipment and a free Jenny Craig weight-loss program plan.
Those bonuses are not contained in Brown’s latest contract due to the 2010 Ontario Broader Public Sector Accountability Act, which removed contentious perks from public-sector employee contracts.
Among the CEOs who have been offered generous contract packages are those running some of the Greater Toronto Area’s biggest hospitals. They include:
Ruby Brown, CEO
Read the full contract by clicking here.
Base salary: $310,000
Health and spending benefits: $5,000
Optional expenses: Laser eye surgery, cosmetic surgery and weight loss programs.
Dr. Barry McClellan, president and CEO
Read the full contract by clicking here.
Base salary: $550,000, bonus of up to 30 per cent of base salary.
Flexible benefit allowance: $25,000
Annual car allowance: $18,000
Mary Jo Haddad, president and CEO
Read the full contract by clicking here.
Base salary: $520,000, plus bonus of up to 30 per cent of base salary.
Outplacement assistance: Up to $25,000 to help employee move to another position after employment ends (assuming it’s without cause).
Murray Martin, CEO
Read the full contract by clicking here.
Base salary: $527,000
Monthly car allowance: $1,200
Health-care coverage post-retirement: $3,500 per year up until 2028. The amount can be collected as a lump sum.
Retirement compensation agreement: A series of annual payments ranging from $110,000 to $277,000. A hospital spokesman said this is to compensate for a pension Martin left when he transferred from a hospital in British Columbia.
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Solutions are equally complex. Debate in the United States has raged over this subject since the subprime fiasco of 2008, and the consensus seems to be that regulating the structure of compensation packages won’t really work, Mackenzie says.
Instead, taxation is a better way to go, allowing corporate boards to compensate as they please, but putting governments in a position to claw back excesses and redistribute them as they see fit.
While Mackenzie does not expect Prime Minister Stephen Harper to hike taxes on the rich tomorrow, he does see some kind of policy response eventually.
“I actually see this kind of growing income inequality as inherently unstable. I think there will be a response,” he said.
“The people at the very top of the income scale — and CEOs are at the top of the top — have really launched themselves into a kind of economic interplanetary travel. If the rest of us are on Earth, they’re off somewhere else in a different world. I think that’s unstable.”
The top earner on the list is definitely in a galaxy of his own. Frank Stronach, the honorary chairman of auto-parts manufacturer Magna International Inc., (TSX:MG.DB) took home almost $62 million in 2010.
Excluding Stronach from the Top 100 calculation would bring the average pay package down by about $62,000, Mackenzie said.
Number two on the list — Donald Walker, also of Magna — made $16.7 million in 2010.
The top banker was Richard Waugh of Bank of Nova Scotia (TSX:BNS), pocketing $13.8 million in pay, bonuses, options and perks.
But Mackenzie points out that the compensation information companies include in their circulars don’t catch the pay packages of investment bankers, whether or not they work for publicly traded companies.