Manchur also received a $268,335 bonus last year. Altogether, his salary, bonus and benefits totaled nearly $1.9 million.
James Pancoast was promoted to president and CEO of Premier Health Partners in 2011 and received a 72 percent raise in salary to $832,888, according to tax forms Premier filed last month. Pancoast's total compensation reached nearly $2.3 million and included a $434,253 bonus.
Total compensation includes insurance coverage and retirement contributions, and retirement benefits earned that year to be paid in the future for meeting certain criteria on performance and retention.
Kettering and Premier Health Partners are the area’s largest hospital groups and two of the area’s biggest employers. The area’s other major health organization, the Children’s Medical Center of Dayton, is on a fiscal reporting year and won’t file its tax forms for 2011 until late spring 2013.
The salaries of Manchur and Pancoast are in line with hospital network executives elsewhere receive and are necessary to attract and retain top talent, even as hospitals face industry reforms and work to contain costs, compensation experts say.
“We’ll continue to see salary increases for executives for the foreseeable future,” said Ron Seifert, vice president and executive compensation leader of the health care sector for Hay Group, a Philadelphia-based management consulting firm that works with some Ohio hospital boards. “It’s really important for them to have the right leaders in place right now because they can’t take a chance with not being successful. Not succeeding in this environment means failing miserably.”
Salaries of hospital executives are competitive with their counterparts in the for-profit sector. But overall compensation of nonprofit health leaders is still typically less lucrative than public company benefits that deliver more value in equity, such as stock options, if the company performs well, Seifert said.
GuideStar USA, a Washington, D.C., nonprofit that collects and publicizes nonprofit data, has seen all nonprofit executive compensation increase about 5 percent a year before the economic recession, said Chuck McLean, vice president of research of GuideStar.
“What we’ve definitely seen in the last decade — the number of big salaries, seven-figure salaries — has increased about 10 times. And it is almost exclusively the case in hospital systems,” McLean said. “This is a very interesting time in the nonprofit sector because the lines between nonprofit and for-profit are getting blurry in a lot of ways.
“This idea that you’re going to get specialized talent at a bargain price is something that doesn’t really ring true anymore,” McLean said. “It’s not easy to attract and keep good people if you’re paying them less than what they could get in the private sector.”
The median base salary is approximately $975,000 for large health systems with revenues of $1 billion or more, according to a health care compensation study released this year by the Hay Group. Nationally, median cash compensation for large health network and hospital CEOs increased in 2012 by 2.5 to 3.5 percent, which mirrors what it has been in recent years, the firm said.
The size and success of the health organizations, the competition, and the executives’ talent, tenure and performance are considered when setting their compensation, said board members who approve the pay levels.
Manchur, who succeeded Frank Perez as CEO, had been with Kettering Health 10 years at the end of 2011. He leads a system comprised of eight hospitals with $1 billion in total revenues and more than 10,000 employees, according to Kettering Health.
“Things are changing rapidly and we’ve got to make sure that we have the right people in place to cope with those changes,” said Don Harting, a member of Kettering Health’s board compensation committee and local accountant. “… We do take these compensation levels seriously, that they are reviewed and we use the outside consultants.
“I would also like you to recognize that executive compensation in the big scheme of things is a pretty small piece of the total cost of operating a hospital,” Harting said. “Most of the hospital costs are related to services, related to patient care.”
Pancoast has been with Premier Health for more than 30 years. Prior to becoming CEO, he served as chief operating officer of Premier, chief executive of Good Samaritan Hospital and president of Premier’s home care division, Fidelity.
Pancoast became the top executive of Premier after the retirement of Tom Breitenbach. Pancoast heads a health group comprised of four hospitals with $1.8 billion in revenues and more than 14,000 employees.
“The board of trustees of Premier Health Partners annually reviews survey data and follows established compensation guidelines in compliance with national standards. The board engages a nationally recognized executive healthcare compensation consultant to ensure that executive compensation is market-based,” said Dan Sadlier, chair of the board of trustees of Premier Health, in a prepared statement. “The board takes this responsibility seriously to ensure that we recruit and retain high performing, talented individuals to lead an organization that is vital to the health and well-being of the community.”
Eligible executives of Kettering and Premier have a retirement plan that accrues over the years for them to receive upon their retirements.
Doug McNeill, the previous president of Premier’s Atrium Medical Center in Middletown, received a total $1.1 million in salary, bonus and deferred retirement payments last year even though he actually retired at the end of 2010. He made a total $2.6 million in 2010 in cash, benefits and deferred retirement.
Reporting to Pancoast and Manchur are the CEOs of the individual hospitals in the networks. Total compensation in 2011 for eight area hospital presidents and chief executive officers ranged from about $406,000 for Jennifer Swenson, president of Fort Hamilton Hospital, part of Kettering Health, to $1.4 million for Roy Chew of Kettering Medical Center. That does not include McNeill of Atrium.
Last year was Swenson’s first full year as president of Fort Hamilton, which joined Kettering Health in 2010.
In addition to being president of Kettering Medical Center, which includes overseeing Sycamore Medical Center and other facilities, Chew also has the position of executive vice president of Kettering Health. He was promoted to executive vice president in 2011, according to the network.
Premier Health’s highest compensated hospital executive was actually McNeill of Atrium. After that, it was Mark Shaker, former CEO of Good Samaritan Hospital, who this year was promoted to senior vice president of service integration of Premier Health. Shaker’s total 2011 compensation was $839,146, according to Premier’s tax filing.
About the Author