MetroHealth fires CEO over more than $1.9M in unreported bonuses

The board of trustees at Cleveland-based MetroHealth System has fired President and CEO Akram Boutros, MD.

Dr. Boutros was fired Nov. 21 after the board received findings of a probe into compensation issues involving more than $1.9 million in supplemental bonuses, Vanessa Whiting, chair of the board, said in a statement posted on the health system’s website. The probe found that between 2018 and 2022, Dr. Boutros authorized the compensation for himself, without disclosure to the board.

“We have taken these actions mindfully and deliberately but with sadness and disappointment,” Ms. Whiting said. “We all recognize the wonderful things Dr. Boutros has done for our hospital and for the community. However, we know of no organization permitting its CEO to self-evaluate and determine their entitlement to an additional bonus and at what amount, as Dr. Boutros has done.”

Dr. Boutros took the helm of MetroHealth in 2013. Last year, Dr. Boutros announced his plans to retire at the end of 2022. In September, MetroHealth named Airica Steed, EdD, RN, its next president and CEO. Dr. Steed, who is executive vice president and system COO of Sinai Chicago Health System, will take the helm of MetroHealth Dec. 5, according to Ms. Whiting’s statement. Meanwhile, Nabil Chehade, MD, executive vice president and chief clinical transformation officer at MetroHealth, will assume the CEO’s duties on an interim basis.

Ms. Whiting said MetroHealth discovered the compensation issues related to Dr. Boutros while preparing for the CEO transition, and an internal investigation took place, led by the Tucker Ellis law firm.

She said Dr. Boutros admitted to conducting self-assessments of his performance under specific metrics he established and authorizing payment to himself of more than $1.9 million in supplemental bonuses between 2018 and 2022.

According to Ms. Whiting, Dr. Boutros repaid more than $2.1 million in October, representing the supplemental bonus money paid without board approval for performance in calendar years 2017 through 2021, plus more than $124,000 in interest.

She said the board has also implemented immediate CEO spending and hiring limitations through Dec. 31, 2022, and Dr. Boutros has self-reported to the Ohio Ethics Commission.

MetroHealth’s internal investigation is ongoing.

Among Dr. Boutros’ accomplishments at MetroHealth were helping annual revenue increase from $785 million to more than $1.5 billion; growing the health system’s workforce from 6,200 to nearly 8,000 while seeing employee minimum wage increase to $15 per hour; and developing Ohio’s only Ebola treatment center.

The U.S. plans to lend $500 billion to large companies. It won’t require them to preserve jobs or limit executive pay.

https://www.washingtonpost.com/business/2020/04/28/federal-reserve-bond-corporations/?fbclid=IwAR21PBlVqLVVDVf8CeVxGpTuHgxXbDqy49K49BpeeYav-KmKYxS_xfnAX5A&platform=hootsuite

DownWithTyranny!: April 2020

The Fed’s coronavirus aid program lacks restrictions Congress placed on companies seeking financial help under other programs.

A Federal Reserve program expected to begin within weeks will provide hundreds of billions in emergency aid to large American corporations without requiring them to save jobs or limit payments to executives and shareholders.

Under the program, the central bank will buy up to $500 billion in bonds issued by large companies. The companies will use the influx of cash as a financial lifeline but are required to pay it back with interest.

Unlike other portions of the relief for American businesses, however, this aid will be exempt from rules passed by Congress requiring recipients to limit dividends, executive compensation and stock buybacks and does not direct the companies to maintain certain employment levels.

Critics say the program could allow large companies that take the federal help to reward shareholders and executives without saving any jobs. The program was set up jointly by the Federal Reserve and the Treasury Department.

“I am struck that the administration is relying on the good will of the companies receiving this assistance,” said Eswar Prasad, a former official at the International Monetary Fund and economist at Cornell University. “A few months down the road, after the government purchases its debt, the company can turn around and issue a bunch of dividends to shareholders or fire its workers, and there’s no clear path to get it back.”

Treasury Secretary Steven Mnuchin defended the corporate aid program, saying that the lack of restrictions on recipients had been discussed and agreed to by Congress. “This was highly discussed on a bipartisan basis. This was thought through carefully,” he said in an interview with The Washington Post. “What we agreed upon was direct loans would carry the restrictions, and the capital markets transactions would not carry the restrictions.”

Democrats asked for restrictions on how companies can use the money from the central bank’s bond purchases but were rebuffed by the administration during negotiations about the Cares Act, said a spokesman for Senate Minority Leader Charles E. Schumer (D-N.Y.). The spokesman said Democrats won meaningful concessions from the administration on reporting transparency in the final agreement. (Transparency requirements do not apply to the small-business loans, the biggest business aid program rolled out to date.)

Mnuchin also said the program had already bolstered investor confidence in U.S. capital markets, which in turn helped firms raise capital they used to avoid layoffs.

“The mere announcement of these facilities, quite frankly, led to a reopening of a lot of these capital markets,” Mnuchin said in an interview. “Even before these facilities are up and running, they’ve had their desired impact of having stability in the markets. Stability in the markets allows companies to function, and raise money and allows them to keep and retain workers and get back to work.”

The corporate debt purchases by the Fed stand in stark contrast with other portions of the federal aid for U.S. businesses that come with requirements to protect jobs or limit spending.

The Paycheck Protection Program, which offers $659 billion for small businesses, requires companies to certify that the money will be used to “retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments.”

The “Main Street” program offering up to $600 billion to “midsize” businesses — with 500 to 10,000 employees — forbids companies from issuing dividends and places limits on executive compensation, according to a term sheet issued by the Fed. Those restrictions are in effect until 12 months after the loan is no longer outstanding. The companies must also “make reasonable efforts” to maintain payroll and retain employees.

Likewise, the $46 billion program for airlines, air cargo companies and national security forbids dividends and limits executive pay. Its requirement on retaining employment is more rigorous, however. Companies are supposed retain at least 90 percent of their employees.

The first version of the Fed program to buy bonds from large companies, known as the Primary Market Corporate Credit Facility, probably would have compelled recipients of the aid to limit executive pay and dividends. That version of the program, described in a March 23 term sheet issued by the Fed, offered direct loans and bond purchases to companies. Under the Cares Act, the federal programs offering direct loans must set restrictions on company dividends and CEO pay; those that buy only corporate bonds do not. Both are forms of lending, although bonds are more easily resold.

But on April 9, the Fed altered the design of the program to exclude direct corporate lending. The Fed program will still essentially lend money to large companies — by buying their bonds — but the Fed will not be compelled by the Cares Act to ensure that companies abide by the divided and CEO pay rules.

“The change to the term sheet between March and April is the smoking gun on the Fed’s own culpability here,” said Gregg Gelzinis, a senior policy analyst at the Center for American Progress, a left-leaning think tank. “The basic principle of the Cares Act was that if we’re going to provide taxpayer funding to private industry, we need conditions to make sure it is in the public interest. This violates that principle.”

Bharat Ramamurti, an aide to Sen. Elizabeth Warren (D-Mass.) who was appointed to the board overseeing the bailout, said in a statement: “Big corporations have shown time and again that they will put their shareholders and executives ahead of their workers if given the choice. That’s why I’m so concerned that the Treasury and the Fed have chosen to direct hundreds of billions of dollars to big companies with no strings attached.”

A spokesman for the Federal Reserve declined to comment. The Fed’s board of governors unanimously approved the new bond purchasing program on March 22. The Fed has said it will purchase only the bonds of firms above a certain grade. The issuer of the bond also must meet the conflicts-of-interest requirements in the Cares Act, which preclude federal lawmakers or their relatives from benefiting financially from the government bailout.

In the interview, Mnuchin also said many companies are ceasing stock buybacks and are likely to use the additional capital to retain workers.

“A lot of companies have stopped their share buybacks and slashed their dividends, because they need that capital to invest in their business. Even though these restrictions don’t necessarily apply, that’s already happening,” he said.

Some experts disputed that assertion. “Some companies have ceased buybacks and dividends and some haven’t. We shouldn’t have to keep our fingers crossed,” Gelzinis said.

It is unknown what the terms will be for the Fed lending under the program, or how favorable they will be for recipients. The term sheet says only that they will depend on the company and be “informed” by market conditions.

Companies selling their bonds to the central bank are expected to be primarily investment grade, publicly traded firms and therefore subject to more disclosure and oversight than those that are privately held. Patricia C. Mosser, a former senior official at the Federal Reserve Bank of New York, said these corporations are scrutinized by the U.S. Securities and Exchange Commission, private investors and the credit rating agencies.

“It’s true that there’s nothing stopping these companies from continuing to pay stock dividends. You may not like that, and I have sympathy for that position,” said Mosser, now a professor at Columbia University. “But it’s easier to unmask bad behavior in public companies. Large companies certainly don’t do everything right, but they have to admit publicly how they pay top executives, where their profits go and how they use them. That history of disclosure and oversight means the risk of not being repaid is lower.”

The weaker restrictions on recipients of the Fed’s lending program may be partly justified, said Nathan Tankus, research director at the Modern Money Network, which studies monetary policy. The corporate bonds that the Fed is purchasing from companies can be resold, whereas direct loans establish an agreement between the company and the government that makes the asset less valuable to the central bank, he said.

“Purchases of debt are a slightly more arm’s-length transaction than the loan, which is forming a bilateral relationship,” Tankus said. “But this is really just the fig leaf the Fed can use to justify lifting the restrictions.”

 

 

 

Already Taxed Health Care Workers Not ‘Immune’ From Layoffs And Less Pay

Already Taxed Health Care Workers Not ‘Immune’ From Layoffs And Less Pay

Already Taxed Health Care Workers Not 'Immune' From Layoffs And ...

Just three weeks ago, Dr. Kathryn Davis worried about the coronavirus, but not about how it might affect her group of five OB-GYNs who practice at a suburban hospital outside Boston.

“In medicine we think we’re relatively immune from the economy,” Davis said. “People are always going to get sick; people are always going to need doctors.”

Then, two weeks ago, she watched her practice revenue drop 50% almost overnight after Massachusetts officials told doctors and hospitals to stop performing elective tests and procedures. For Davis, that meant no more non-urgent gynecological visits and screenings.

Late last week, as Davis and her partners absorbed the stunning turn of events, they devised a stopgap plan. The 35 nurses, medical assistants and secretaries they employ would have two options: move from full-time to part-time status or start collecting unemployment. Doctors in the practice would take a substantial pay cut. Davis said she’s hearing from colleagues who may have to permanently close their offices if the focus on crisis-level care continues for months.

“It’s shocking,” she said. “Everyone has been blindsided.”

Atrius Health, the largest independent physician group in Massachusetts, said patient volume is down 75% since mid-March. It is temporarily closing offices, placing many nonclinical employees on furlough and withholding pay for those who remain. The average withholding is 20%, and the company pledges that pay withheld will be returned. The lowest-paid workers, those earning up to $55,000, are exempt.

“What we’re trying to do is piece together a solution to get through the crisis and keep employed as many people as we can,” said Dr. Steven Strongwater, Atrius Health’s CEO.

Atrius cares for 745,000 patients in clinics that often include primary care, specialists, radiology and a pharmacy under one roof.

Strongwater said physician groups must be included when the federal government distributes $100 billion to hospitals from the $2 trillion stimulus package.

It’s not clear if that money will stop the tide of layoffs and lost pay at hospitals as well as in doctor’s offices. A Harvard Medical School physician group will suspend retirement contributions starting April 1.

Beth Israel Lahey Health, the second-largest hospital network in Massachusetts, announced executive pay cuts Monday.

“The suspension of elective procedures and decline in visits to our primary care practices and urgent care centers have resulted in financial challenges,” wrote CEO Dr. Kevin Tabb in an email to employees. Tabb said he would take a 50% salary cut. Other executives and hospital presidents in the system will forgo 20% of their salaries for the next three months.

“Although executive leadership compensation is being reduced, we will never compromise on doing the things that are essential to protect your safety and the safety of our patients,” Tabb told staff.

Dallas-based Steward Health Care has told hospital employees in Massachusetts and eight other states where it operates to expect furloughs focused on nonclinical staff. In a statement, Steward Health Care said it prepared for the pandemic but is experiencing a “seismic financial shock.”

“Elective surgeries are the cornerstone of our hospital system’s operating model — and the negative impact due to the cancellations of these procedures cannot be overstated. In addition, patients are understandably cautious and choosing to defer any nonemergency treatments or routine visits until this crisis has passed.”

Dr. Kaarkuzhali Babu Krishnamurthy, an assistant professor of neurology at Harvard Medical School who studies medical ethics, said employers need to think more carefully about the ethics of asking doctors and nurses to live on less when many are working longer hours and putting the health of their families at risk.

“At a time when health care systems are calling on doctors and nurses to do more, this is not the time to be making it more difficult to do that,” said Krishnamurthy.

There’s talk of redeploying laid-off health care workers to new COVID-19 units opening in shuttered hospitals or to patient overflow sites. Tim Foley, executive vice president for the largest health care union in Massachusetts, 1199SEIU, is promoting the development of a staff registry.

“It is more important, now more than ever, to explore all options to maintain the level of urgent care needed across the state and we look forward to working with all stakeholders to do just that,” Foley said in an email.

 

 

 

 

Trinity Health to furlough 2,500 employees in Michigan

https://www.beckershospitalreview.com/finance/trinity-health-to-furlough-2-500-employees-in-michigan.html?utm_medium=email

Home - Trinity Health System

The two health systems that comprise Trinity Health’s Michigan region will furlough 2,500 employees at eight hospitals, according to MLive.com.

Livonia-based Saint Joseph Mercy Health System and Muskegon-based Mercy Health said the furloughs will occur over the next few weeks and will mostly affect nonclinical workers.

The furloughs, which represent 10 percent of the workforce at the two systems, will enable the hospitals to “focus resources on the functions directly related to essential COVID-19 patient care needs, while protecting people and helping to prevent the spread of the virus,” according to the report.

Livonia-based Trinity Health said the goal is for the furloughs to be temporary. 

To help offset financial losses from the COVID-19 pandemic, Trinity’s executive leaders are taking up to 25 percent pay cuts, and performance-based bonuses are being eliminated, according to the report. 

 

 

 

Phoenix hospital CEO gets $85K raise despite criticism from board members

https://www.beckershospitalreview.com/compensation-issues/phoenix-hospital-ceo-gets-85k-raise-despite-criticism-from-board-members.html

Image result for valleywise health

The CEO of a public and nonprofit safety-net health system in Phoenix will get an $85,000 raise despite objections from two board members who questioned if the increase was excessive, according to the Arizona Republic.

Under a new five-year contract effective Oct. 25, Steve Purves, CEO of Valleywise Health, will see his annual salary rise to $685,000. Mr. Purves could also receive a discretionary $171,250 performance bonus and is eligible for a $68,500 retention bonus on Oct. 25, 2020. In 2020, Mr. Purves’ base pay will climb to $753,500, and by 2023 his base salary will be $872,191, according to the contract cited by the Arizona Republic.

The hospital’s governing board approved the contract in a 3-2 vote. The two board members who voted against the contract raised concerns about its length as well as the rise in salary and bonuses. They questioned whether a raise of that magnitude was appropriate, given that the hospital has faced federal penalties for five consecutive years over patient injuries and infections. They also noted Valleywise Health anticipates a $3 million deficit this fiscal year.

But the three board members who supported the contract said it was necessary to ensure Mr. Purves remained at Valleywise Health. They argued the package is similar to other CEOs at comparable health systems. They also praised Mr. Purves for steering Valleywise’s finances in a better direction, according to the Arizona Republic.

The final contract is $15,000 lower than one proposed in September. In that proposal, Mr. Purves would have received a $100,000 pay hike with a discretionary performance bonus of up to $175,000.

Read the full report here.

 

Top 5 Differences Between NFPs and For-Profit Hospitals

https://www.healthleadersmedia.com/finance/top-5-differences-between-nfps-and-profit-hospitals

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Although nonprofit and for-profit hospitals are fundamentally similar, there are significant cultural and operational differences, such as strategic approaches to scale and operational discipline.

All hospitals serve patients, employ physicians and nurses, and operate in tightly regulated frameworks for clinical services. For-profit hospitals add a unique element to the mix: generating return for investors.

This additional ingredient gives the organizational culture at for-profits a subtly but significantly different flavor than the atmosphere at their nonprofit counterparts, says Yvette Doran, chief operating officer at Saint Thomas Medical Partners in Nashville, TN.

“When I think of the differences, culture is at the top of my list. The culture at for-profits is business-driven. The culture at nonprofits is service-driven,” she says.

Doran says the differences between for-profits and nonprofits reflect cultural nuances rather than cultural divides. “Good hospitals need both. Without the business aspects on one hand, and the service aspects on the other, you can’t function well.”

There are five primary differences between for-profit and nonprofit hospitals.

1. Tax Status

The most obvious difference between nonprofit and for-profit hospitals is tax status, and it has a major impact financially on hospitals and the communities they serve.

Hospital payment of local and state taxes is a significant benefit for municipal and state governments, says Gary D. Willis, CPA, a former for-profit health system CFO who currently serves as CFO at Amedisys Inc., a home health, hospice, and personal care company in Baton Rouge, LA. The taxes that for-profit hospitals pay support “local schools, development of roads, recruitment of business and industry, and other needed services,” he says.

The financial burden of paying taxes influences corporate culture—emphasizing cost consciousness and operational discipline, says Andrew Slusser, senior vice president at Brentwood, TN-based RCCH Healthcare Partners.

“For-profit hospitals generally have to be more cost-efficient because of the financial hurdles they have to clear: sales taxes, property taxes, all the taxes nonprofits don’t have to worry about,” he says.

“One of the initiatives we’ve had success with—in both new and existing hospitals—is to conduct an Operations Assessment Team survey. It’s in essence a deep dive into all operational costs to see where efficiencies may have been missed before. We often discover we’re able to eliminate duplicative costs, stop doing work that’s no longer adding value, or in some cases actually do more with less,” Slusser says.

2. Operational Discipline

With positive financial performance among the primary goals of shareholders and the top executive leadership, operational discipline is one of the distinguishing characteristics of for-profit hospitals, says Neville Zar, senior vice president of revenue operations at Boston-based Steward Health Care System, a for-profit that includes 3,500 physicians and 18 hospital campuses in four states.

At Steward, we believe we’ve done a good job establishing operational discipline. It means accountability. It means predictability. It means responsibility. It’s like hygiene. You wake up, brush your teeth, and this is part of what you do every day.”

A revenue-cycle dashboard report is circulated at Steward every Monday morning at 7 a.m., including point-of-service cash collections, patient coverage eligibility for government programs such as Medicaid, and productivity metrics, he says. “There’s predictability with that.”

A high level of accountability fuels operational discipline at Steward and other for-profits, Zar says.

There is no ignoring the financial numbers at Steward, which installed wide-screen TVs in most business offices four years ago to post financial performance information in real-time. “There are updates every 15 minutes. You can’t hide in your cube,” he says. “There was a 15% to 20% improvement in efficiency after those TVs went up.”

3. Financial Pressure

Accountability for financial performance flows from the top of for-profit health systems and hospitals, says Dick Escue, senior vice president and chief information officer at the Hawaii Medical Service Association in Honolulu.

Escue worked for many years at a rehabilitation services organization that for-profit Kindred Healthcare of Louisville, Kentucky, acquired in 2011. “We were a publicly traded company. At a high level, quarterly, our CEO and CFO were going to New York to report to analysts. You never want to go there and disappoint. … You’re not going to keep your job as the CEO or CFO of a publicly traded company if you produce results that disappoint.”

Finance team members at for-profits must be willing to push themselves to meet performance goals, Zar says.

“Steward is a very driven organization. It’s not 9-to-5 hours. Everybody in healthcare works hard, but we work really hard. We’re driven by each quarter, by each month. People will work the weekend at the end of the month or the end of the quarter to put in the extra hours to make sure we meet our targets. There’s a lot of focus on the financial results, from the senior executives to the worker bees. We’re not ashamed of it.”

“Cash blitzes” are one method Steward’s revenue cycle team uses to boost revenue when financial performance slips, he says. Based on information gathered during team meetings at the hospital level, the revenue cycle staff focuses a cash blitz on efforts that have a high likelihood of generating cash collections, including tackling high-balance accounts and addressing payment delays linked to claims processing such as clinical documentation queries from payers.

For-profit hospitals routinely utilize monetary incentives in the compensation packages of the C-Suite leadership, says Brian B. Sanderson, managing principal of healthcare services at Oak Brook, IL–based Crowe Horwath LLP.

“The compensation structures in the for-profits tend to be much more incentive-based than compensation at not-for-profits,” he says. “Senior executive compensation is tied to similar elements as found in other for-profit environments, including stock price and margin on operations.”

In contrast to offering generous incentives that reward robust financial performance, for-profits do not hesitate to cut costs in lean times, Escue says.

“The rigor around spending, whether it’s capital spending, operating spending, or payroll, is more intense at for-profits. The things that got cut when I worked in the back office of a for-profit were overhead. There was constant pressure to reduce overhead,” he says. “Contractors and consultants are let go, at least temporarily. Hiring is frozen, with budgeted openings going unfilled. Any other budgeted, but not committed, spending is frozen.”

4. Scale

The for-profit hospital sector is highly concentrated.

There are 4,862 community hospitals in the country, according to the American Hospital Association. Nongovernmental not-for-profit hospitals account for the largest number of facilities at 2,845. There are 1,034 for-profit hospitals, and 983 state and local government hospitals.

In 2016, the country’s for-profit hospital trade association, the Washington, DC–based Federation of American Hospitals, represented a dozen health systems that owned about 635 hospitals. Four of the FAH health systems accounted for about 520 hospitals: Franklin, TN-based Community Hospital Systems (CHS); Nashville-based Hospital Corporation of America; Brentwood, TN–based LifePoint Health; and Dallas-based Tenet Healthcare Corporation.

Scale generates several operational benefits at for-profit hospitals.

“Scale is critically important,” says Julie Soekoro, CFO at Grandview Medical Center, a CHS-owned, 372-bed hospital in Birmingham, Alabama. “What we benefit from at Grandview is access to resources and expertise. I really don’t use consultants at Grandview because we have corporate expertise for challenges like ICD-10 coding. That is a tremendous benefit.”

Grandview also benefits from the best practices that have been shared and standardized across the 146 CHS hospitals. “Best practices can have a direct impact on value,” Soekoro says. “The infrastructure is there. For-profits are well-positioned for the consolidated healthcare market of the future… You can add a lot of individual hospitals without having to add expertise at the corporate office.”

The High Reliability and Safety program at CHS is an example of how standardizing best practices across the health system’s hospitals has generated significant performance gains, she says.

“A few years ago, CHS embarked on a journey to institute a culture of high reliability at the hospitals. The hospitals and affiliated organizations have worked to establish safety as a ‘core value.’ At Grandview, we have hard-wired a number of initiatives, including daily safety huddles and multiple evidence-based, best-practice error prevention methods.”

Scale also plays a crucial role in one of the most significant advantages of for-profit hospitals relative to their nonprofit counterparts: access to capital.

Ready access to capital gives for-profits the ability to move faster than their nonprofit counterparts, Sanderson says. “They’re finding that their access to capital is a linchpin for them. … When a for-profit has better access to capital, it can make decisions rapidly and make investments rapidly. Many not-for-profits don’t have that luxury.”

5. Competitive Edge

There are valuable lessons for nonprofits to draw from the for-profit business model as the healthcare industry shifts from volume to value.

When healthcare providers negotiate managed care contracts, for-profits have a bargaining advantage over nonprofits, Doran says. “In managed care contracts, for profits look for leverage and nonprofits look for partnership opportunities. The appetite for aggressive negotiations is much more palatable among for-profits.”

 

 

 

 

 

 

 

Purdue Pharma, facing thousands of lawsuits and bankruptcy, wants to pay ‘certain employees’ $34 million in bonuses

https://www.washingtonpost.com/nation/2019/09/19/purdue-pharma-facing-thousands-lawsuits-bankruptcy-wants-pay-certain-employees-million-bonuses/?fbclid=IwAR0r6Psj2gpALR0iJZAv4o8ZYLxPDv6UjGZKLvxMwVIlUF9kOcl1LY5sGlM

People enter the U.S. District Court in White Plains, N.Y., Tuesday, before a bankruptcy hearing for Purdue Pharma. The company is asking a bankruptcy judge to allow it to pay $34 million in bonuses to "certain employees."

Officials at troubled drugmaker Purdue Pharma say “certain employees” should be paid more than $34 million in bonuses for meeting and exceeding goals over the last three years, even though the company is facing thousands of lawsuits over its role in the nation’s opioid crisis and earlier this week filed for bankruptcy.

In a legal filing, attorneys for Purdue Pharma asked a judge to authorize millions in payments to employees who have met “target performance goals.”

It is not clear from the company filings why employees would be eligible for bonuses, because, while the bonuses are supposed to be partly contingent on the company’s financial performance, the company has filed for bankruptcy.

At a bankruptcy court hearing in White Plains, N.Y., on Tuesday, Paul K. Schwartzberg, an attorney for the U.S. Trustee, raised objections to some of the bonuses. While it is typical for companies in bankruptcy to try to pay employees as a firm seeks to regain its financial footing, the Purdue Pharma bonuses go “way beyond” what is typical, he said.

The company is widely blamed for fueling the opioid epidemic because of allegedly misleading sales tactics it used to push physicians to prescribe millions of doses of its OxyContin painkiller. It faces thousands of lawsuits from cities, states and others affected by the opioid crisis, which claimed more than 200,000 lives in the past two decades.

“That $34 million is owed to the victims of the opioid epidemic, and every last cent should be spent on addiction science, treatment and recovery,” Connecticut Attorney General William Tong said in a statement to The Washington Post. “Purdue and the Sacklers still don’t seem to comprehend the pain and suffering they have caused. While I am sympathetic to the workers at Purdue, many of whom live in my hometown and state and had nothing to do with the egregious actions of their employer, this not business as usual.”

The attorneys for Purdue Pharma did not specify which of its 700 employees would be eligible for the bonuses, except that the incentives would not be available to “insiders” or any top executives involved in the company’s “strategic decision-making.” But other senior managers, who are often offered such incentive plans, could be eligible for the bonuses.

The number of employees eligible for the bonuses and the amounts of their rewards are unknown. But if the $34 million in bonuses were distributed equally to each of the 700 employees, each would receive about $50,000.

Company attorneys say the incentives are needed to retain key employees as it seeks to transform itself into a public trust aimed at delivering addiction remedies. Since 2018, about a quarter of the company’s “top tier” employees have left, they said.

“These employees have highly coveted skills in the industry and the company is not an easy place to work right now,” Eli J. Vonnegut, an attorney representing Purdue Pharma, said at the bankruptcy hearing. It “would be very difficult to attract new talent were the company to lose its current employees. With all the negative publicity, many employees are concerned about the economic risks that they are taking by staying at Purdue.”

The employee bonuses are part of the company’s long-standing incentive programs, according to the company. It is asking the bankruptcy court’s permission to pay out $26.5 million under its “Annual Incentive Plan,” which covers one year of company and employee performance, and another $7.9 million under its long-term rewards plan, which covers the last three years.

Under both programs, the size of the bonuses would depend on employees’ work and the company’s performance.

The company filing described the bonuses as something that employees “have come to rely on as a part of their annual compensation.”

The company is also seeking $1.5 million a month to cover anticipated legal expenses of employees. More than 270 former employees already have been witnesses or defendants in pending litigation, the company said.

U.S. Bankruptcy Judge Robert D. Drain is expected to consider the bonuses in October.

“These people are highly compensated,” Schwartzberg said. “They can wait” until then.