Roy Exum: Bonuses At UT & Erlanger

  • Thursday, December 11, 2014
  • Roy Exum
Roy Exum
Roy Exum

When the University of Tennessee gave head coach Butch Jones a contract extension earlier this week, everybody cheered. Be honest: here is a guy who, in the last two seasons, has a paltry 5-11 record in SEC play and has won only three-of-10 “away” games. Yet we are giddy over a $700,000 annual raise, total compensation of $3.6 million a year, a contract through 2020 and, oh yes, a $100,000 bonus for taking UT to the first bowl game in recent years.

At roughly the same time, Chattanooga’s Erlanger Hospital, after posting profits of $18 million following three years of blood-red financials, doled out $1.7 million in bonuses and, what? We are aghast at the “brazen actions” of the best board of trustees I think has ever been assembled to lead our Level 1 trauma center.

That’s quite a paradox, no?

My inbox is now flooded with emails from those who know I care very deeply about the hospital and, in the past, I’ll admit I have not tolerated fools at Erlanger lightly. While I am ecstatic over the similar turnarounds I see, both in Neyland Stadium and on East Third Street, the top-heavy bonuses just awarded to Erlanger leadership make me a bit nervous.

The Bleacher Report website ran a poll, asking of Jones’ increase if it was “just a matter of time” before Butch returns UT to the elite in college football hierarchy or, if it was “too tall a climb.” Readers responded favorably by 90 percent. The Chattanooga Times Free Press ran a similar poll, asking if Erlanger’s bonuses were merited, and at noon yesterday 65 percent had curiously voted “no.”

Maybe the comparison is far-fetched but, believe me, Erlanger means much more to me than UT football. For the record, I believe in merit pay. I believe in bonuses based on performance and, when UT athletic director Dave Hart explained Mr. Jones’ dramatic increase in compensation, it was quite palatable.

Mr. Hart said, “When you are rebuilding a program, you face many challenges in order to change the culture. A tireless effort is required from the entire organization. The most critical piece of the puzzle is leadership, and we have the right man leading our football program. Butch Jones has reenergized our fans base and is an outstanding ambassador for our university.”

I think the same can be said about Erlanger CEO Kevin Spiegel. For instance, he’s been in Washington this week, bolstering efforts for better healthcare at a hospital where indigent care is a necessary but crushing burden of almost $90 million. His able ability, particularly after Erlanger has been wandering in the desert for years due to a lack of it, is a Godsend for the men, women and children who live in the tri-state area.

At the same time, for the board of trustees to dole out blanket individual bonuses amounting to hundreds of thousands to certain members of the leadership team is questionable, most especially to the very employees who watch on a daily basis. Much worse is the chilling fact that not three weeks ago the hospital sliced away health insurance for retirees, citing the cost had risen to $1.2 million a year. If I were a board member, I’d have struggled with that, given the bonuses to only a few amounts to more than the hardships just levied on many, especially those now on fixed incomes.

I have long contended the greatest asset of Erlanger is its workforce. I believe a simple-minded moron could replace any member of “key leadership” much easier than a CAT-scan tech with 15 years of experience or a charge nurse who oversees the neonatal ICU. The board just approved a two-percent non-budgeted raise for qualified employees but, in reality, I believe that sorely misses the mark.

As dissenting board member Gerald Webb commented, "Erlanger has had financial issues for a while. For the first time we're seeing positive numbers. My thinking is that more of a percentage of that money needs to go to into reserves or to employees, instead of vice presidents and executives.”

In candor, I believe Mr. Webb is right and what is really bothersome is that had it not been for the $19 million Erlanger finally unearthed in federal funds via the Public Hospital Supplemental Payment Pool, common sense tells me the hospital would have been about a million bucks in the red. I feel most stewards in the public sector would have taken that in account when – in the case of Spiegel – his bonus of $234,669 just amounted to a whopping 34.5 percent of his contracted annual salary of $680,000.

The argument is made that “the average pay -- including incentive payments -- for Erlanger's managers is well below the median amount for their peer group, around 35th percentile” but – be truthful! -- who gives a rip? I could care less what “nation figures” are as compared to “what does it take” to hire a CEO in Chattanooga. Trust me, Spiegel wasn’t the lone applicant where he was hired and a 34.5 percent bonus after the first 18 months … oh my goodness, that would have attracted a lot more suitors.

All said, I highly commend board Chairman Donnie Hutcherson and others who, in stark reality, have had as much to do with Erlanger’s changes as Spiegel’s team, but I’m for accelerated capital improvements, enhanced house-keeping, advanced equipment, better patient care, physician recruiting and a long laundry list of things that are more urgent than winks in the board room right now.

Erlanger is just a sigh away from frozen vacations, for Pete’s sake. State Senator Todd Gardenhire told reporters, “It will be difficult for them to come back and ask anything of us going forward,” while County Mayor Jim Coppinger shook his head and said, “The timing, obviously, is poor and it's disappointing."

Whew, some days it is easier to be a football coach with a 11-13 record.

royexum@aol.com

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