Erlanger Health System’s Board of Trustees on Thursday approved raises for eligible employees, and implemented an incentive plan payout for 93 managers for the previous fiscal year at a reduced amount. The board also approved enhancements to the existing 403(b) and 457(b) retirement plans, and approved the payout of a $50,000 performance bonus to CEO Dr. William Jackson from his original employment agreement.
Cost of the employee raises was listed at a maximum of $6.5 million.
The Board of Trustees voted unanimously to issue a raise for all eligible Erlanger employees.
This will be the second across-the-board raise for associates under the Jackson administration, the first having occurred earlier this year in February. Executive Leadership and clinicians with contracts containing productivity incentives are not eligible. Recently, leadership recommended and implemented a salary adjustment for bedside RNs and MAs that went into effect on Dec. 13 to eligible employees.
Dr. Jackson stated, “At Erlanger our people are our first priority, and implementing competitive salaries for our associates has been a focus of mine since I became president and CEO. I appreciate the tireless dedication of our associates, and recognize that the ongoing pandemic has been a truly unprecedented challenge. As always, our people have risen to the occasion with courage and commitment. Being able to provide this raise and appreciation to our associates is very important to me and our entire leadership team.”
He also said, "Each year, the leadership team is given specific goals by the Board. These goals are tied to an incentive plan for this group, and the goals are measured at the end of each fiscal year. Today, the board voted to pay 50 percent instead of 100 percent of the earned incentive plan payout for fiscal year 2019-2020. Recognizing that leadership worked diligently throughout the fiscal year and pandemic, the Board felt it was appropriate to reduce the payout due to the uncertainties faced in the upcoming months. The Board also approved the 2020-2021 plan’s goals.
The Board of Trustees approved enhancements to Erlanger’s existing 403(b) and 457(b) retirement plans as provided by the SECURE Act. The modification allows associates to take an in-service distribution for qualified births and adoptions. Erlanger associates who are new parents can withdraw up to $5,000 from their 403(b) or 457(b) retirement plans after the birth or adoption of a child without penalty.
When Dr. Jackson took the helm of the health system in September 2019, the Board tasked him with three non-financial goals that would trigger his $50,000 incentive pay if he met them by their due dates. The first goal, to be completed by December 31, 2019, required completion of a reorganization of the management structure of Erlanger. Second, by March 31, 2020, he was to present to the Board an acceptable plan to address relations between community and employed physicians. Third, also by March 31, 2020, he was to present to the Board an acceptable plan to reorganize the Erlanger Medical Group governance structure. According to Trustee John Germ, Dr. Jackson completed each of these goals before the required dates.
“Dr. Jackson has worked incredibly hard in the face of a leadership transition, financial challenges, and an unrelenting worldwide pandemic. Since his appointment, he and the entire leadership team have made tough, smart decisions and led from the front, with a focus on our people, quality, service, and financial stewardship,” said Mr. Germ. “Erlanger and our community are blessed to have him at the helm of the region’s essential hospital system.”