The economic effects from the pandemic may place more pressure on investors to reevaluate the pay packages of CEOs in the future. But for the time being, “we are simply getting wealthier CEOs,” according to an annual report from the nonprofit shareholder advocacy group As You Sow.
For its report, As You Sow evaluated the most “overpaid” CEOs of S&P 500 companies. The nonprofit used data to compute what CEO pay would be assuming such pay is related to total shareholder return. In its methodology, a ranking of companies by excess CEO pay and by shareholder votes on CEO pay are weighted at 40 percent. The final ranking based on CEO-to-worker pay ratio is weighted at 20 percent. Find the full methodology here.
As You Sow notes some CEOs may no longer hold the positions listed below, as the rankings were calculated using data made available before June 30, 2020.
Here are 21 healthcare CEOs who made As You Sow’s list:
Larry Merlo (CVS Health) Pay: $36.5 million CEO-to-worker pay ratio: 790:1 Excess pay: $24.3 million
Alan Miller (King of Prussia, Pa.-based Universal Health Services) Pay: $24.5 million CEO-to-worker pay ratio: 629:1 Excess pay: $12.4 million
Michael Neidorff (Centene) Pay: $26.4 million CEO-to-worker pay ratio: 383:1 Excess pay: $13.3 million
Heather Bresch (Mylan) Pay: $18.5 million CEO-to-worker pay ratio: 427:1 Excess pay: $7.5 million
John Hammergren (McKesson) Pay: $17.4 million CEO-to-worker pay ratio: 458:1 Excess pay: $5.2 million
Samuel Hazen (Nashville, Tenn.-based HCA Healthcare) Pay: $26.8 million CEO-to-worker pay ratio: 478:1 Excess pay: $14.1 million
Stefano Pessina (Walgreens Boots Alliance) Pay: $19.2 million CEO-to-worker pay ratio: 562:1 Excess pay: $7.3 million
Ari Bousbib (IQVIA) Pay: $22.1 million CEO-to-worker pay ratio: 186:1 Excess pay: $8.7 million
Miles White (Abbott Laboratories) Pay: $27.8 million CEO-to-worker pay ratio: 329:1 Excess pay: $14.2 million
Javier Rodriguez (DaVita) Pay: $16.9 million CEO-to-worker pay ratio: 286:1 Excess pay: $4.3 million
Leonard Schleifer, MD, PhD (Regeneron Pharmaceuticals) Pay: $21.5 million CEO-to-worker pay ratio: 154:1 Excess pay: $8.6 million
Daniel O’Day (Gilead Sciences) Pay: $29.1 million CEO-to-worker pay ratio: 169:1 Excess pay: $16.9 million
David Cordani (Cigna) Pay: $19.3 million CEO-to-worker pay ratio: 306.7:1 Excess pay: $6.5 million
Michael Minogue (Abiomed) Pay: $19.2 million CEO-to-worker pay ratio: 166:1 Excess pay: $4.8 million
Joseph Hogan (Align Technology) Pay: $18.3 million CEO-to-worker pay ratio: 1,328:1 Excess pay: $3.5 million
Kenneth Frazier (Merck) Pay: $27.6 million CEO-to-worker pay ratio: 289:1 Excess pay: $14.5 million
Marc Casper (Thermo Fisher Scientific) Pay: $19 million CEO-to-worker pay ratio: 235:1 Excess pay: $5 million
Michel Vounatsos (Biogen) Pay: $18.2 million CEO-to-worker pay ratio: 114:1 Excess pay: $6 million
Michael Kaufmann (Cardinal Health) Pay: $15.6 million CEO-to-worker pay ratio: 272:1 Excess pay: $3.4 million
Vincent Forlenza (Becton, Dickinson and Co.) Pay: $16 million CEO-to-worker pay ratio: 379:1 Excess pay: $2.6 million
Omar Ishrak (Medtronic) Pay: $17.8 million CEO-to-worker pay ratio: 240:1 Excess pay: $4.8 million
The billboards along the interstate near our houses still flash, “Wash your hands and wear a mask to stop the spread of COVID”. As we learn more about the virus, it’s increasingly clear that those two actions are not equivalent. A new piece in the Atlanticmakes a strong argument that our obsessive surface cleaning and handwashing is largely “hygiene theater”, doing very little to stop the spread of the disease.
COVID-19 is spread almost exclusively by aerosol transmission, breathing in virus particles emitted from an infected person that remain suspended in the air. Spread by fomites, or virus particles lingering on surfaces, is responsible for little-to-no documented transmission, despite numerous studies (of varying quality) showing the virus can “live” on surfaces for up to a month. The author concedes it’s not impossible, but the attention to surfaces is misdirected: “If somebody with COVID-19 sneezes three times onto a little spot on a cold steel table, and you rub your hand around in the snot for a bit and immediately lick your fingers, that disgusting act may well result in you infecting yourself. But the threat of such unbelievably stupid behavior at a mass level shouldn’t warrant a multibillion-dollar war on fomites.”
Our obsession with surface cleaning has harmful consequences. The billions of dollars spent on regimented cleaning could be redirected toward better uses. Schools are still waiting for funding to safely reopen. The money devoted to surface cleaning should instead be spent improving ventilation and making sure all teachers and students have high-quality masks. All of the harsh cleaning chemicals we are inhaling may be harming our health. And most importantly,surface cleaning creates a false sense of security, sending a message that it’s OK to dine maskless, indoors, at a restaurant because they’re lowering risk by thoroughly cleaning the menus and tables. As we navigate our way to the end of the pandemic, we need to reinforce the point that masks, ventilation and vaccines, not Lysol and Clorox, are our best weapons against the virus.
Hardly a week goes by without a health system leader telling us about an initiative that’s been “put on hold because of COVID”.
The range of things delayed by the pandemic is wide, from major facility expansions to incremental changes in organizational structure and operational processes. But in general, there’s a growing list of action items—many of them critical—that health systems have been putting off. Across last year we heard that many had plans to return to those items in early 2021, once the COVID situation eased. But of course, the past two months have been the busiest of the pandemic so far, and now the challenge of vaccine rollout has been layered on top of the day-to-day task of maintaining care delivery amid persistently high levels of COVID hospitalizations.
With a protracted, uneven immunization campaign, and worrisome variants on the rise,there may yet be another surge of cases and hospitalizations in the spring, which will cause systems to further delay important projects. That’s not all bad news—surely some will realize that what seemed urgent pre-COVID is no longer necessary.
We’ve already had a few leaders tell us that COVID has forced a rethink of capital plans, with facility expansions likely scaled back in favor of faster investment in digital care delivery. But it’s worth remembering that COVID didn’t just cause hospital systems to delay or cancel non-emergent surgeries and procedures (to the tune of $20B last year). It’s forced these large, complex businesses into a state of suspended animation, and likely set back a significant number of needed operational improvements. It’ll take some time to catch up when this is all over.
Faced with the urgent need to protect nurses and other frontline workers, labor organizations are pushing hospitals to do more.
The unions representing the nation’s health care workers have emerged as increasingly powerful voices during the still-raging pandemic.
With more than 100,000 Americans hospitalized and many among their ranks infected, nurses and other health workers remain in a precarious frontline against the coronavirus and have turned again and again to unions for help.
“It’s so overwhelming. It’s unlike anything I’ve ever seen before,” said Erin McIntosh, a nurse at Riverside Community Hospital in Southern California, a part of the country that has been among the hardest hit by a surge in cases. “Every day I’m waist-deep in death and dying.”
In her hospital’s intensive care unit, Mrs. McIntosh said, nurses have sometimes cared for twice as many patients. “We’re being told to take on more than we safely can handle.”
Her union, the Service Employees International Union, and another union, National Nurses United, which has a powerful presence in California, have pushed back against the state’s decision to let hospitals assign nurses more patients during the crisis.
HCA Healthcare, the for-profit hospital chain that owns Riverside, responded that it had recruited additional nurses and was keeping its employees safe.
Health care workers say they have been bitterly disappointed by their employers’ and government agencies’ response to the pandemic. Dire staff shortages, inadequate and persistent supplies of protective equipment, limited testing for the virus and pressure to work even if they might be sick have left many workers turning to the unions as their only ally.The virus has claimed the lives of more than 3,300 health care workers nationwide, according to one count.
A patient arrived in March at the University of Illinois Hospital in Chicago.
“We wouldn’t be alive today if we didn’t have the union,” said Elizabeth Lalasz, a Chicago public hospital nurse and steward for National Nurses United. The country’s largest union of registered nurses, representing more than 170,000 nationwide, National Nurses was among the first to criticize hospitals’ lack of preparation and call for more protective equipment, like N95 masks.
Despite the decades-long decline in the labor movement and the small numbers of unionized nurses, labor officials have seized on the pandemic fallout to organize new chapters and pursue contract talks for better conditions and benefits. National Nurses organized seven new bargaining units last year, compared to four in 2019. The S.E.I.U. also says it has seen an uptick in interest.
Nurses across the country from various unions have participated in dozens of strikes and protests. National Nurses held a “day of action” on Wednesday with demonstrations in more than a dozen states and Washington, D.C., as it starts negotiations at hospitals owned by big systems like HCA, Sutter Health and CommonSpirit Health.
Hospitals claim the unions are playing politics during a public health emergency and say they have no choice but to ask more of their workers. “We are in a moment of crisis that we’ve never seen before, and we need flexibility to care for patients,” said Jan Emerson-Shea, a spokeswoman for the California Hospital Association.
At the University of Illinois Hospital in Chicago, the deaths of two nurses from the virus helped galvanize employees to strike for the first time last fall, said Paul Pater, an emergency room nurse and union official with the Illinois Nurses Association. “People really took that to heart, and it really fomented a lot of disdain for the current administration at the hospital.”
In their most recent contract, nurses there won provisions ensuring the hospital would hire more staff and keep sufficient supplies of protective equipment, Mr. Pater said. “We’ve been able to make, honestly, just huge strides in protecting our people.”
The hospital did not respond to requests for comment.
A yard sign in Asheville, N.C., supporting Mission Hospital’s nurses, who voted to unionize last September.
Some nurses remain highly skeptical of the unions’ efforts, and even those who favor organizing acknowledge there are serious limits to what they can accomplish. “I’m not sure that the union is enough, because it can only take us so far” since staffing conditions remain overwhelming, said Mrs. McIntosh, the Riverside nurse.
Many health care workers view vaccines as the beginning of the end of the pandemic. But large numbers — especially those who work in nursing homes and outside hospitals, who tend to have higher rates of vaccine hesitancy — are refusing to be immunized. During a crisis that disproportionately threatens health care workers of color, one recent analysis found that they are getting vaccinations at rates far below those of their white colleagues.
The unions find themselves treading a fine line between encouraging their members to get vaccinated and protecting them against policies that would force them to do so.
“There are still unanswered questions,” said Karine Raymond, a nurse at Montefiore Medical Center in the Bronx and a New York State Nurses Association official. “The union believes that all nurses should seriously consider being vaccinated,” said Ms. Raymond, who would not say whether she personally would accept the vaccine. “But, again, it’s the individual’s choice.”
The nurses and their unions do want to keep pressuring employers to safeguard workers and patients. “Just because a vaccine is rolling out doesn’t mean that we can let up on other important protections,” said Michelle Mahon, a National Nurses United official, during a Facebook Live event last month.
The past year has created conditions ripe for organizing to address longstanding issues like inadequate wages, benefits and staffing, a problem exacerbated by health care workers falling ill, burning out or retiring early for fear of getting sick. The unions “have successfully been able to use the pandemic to rebrand those same conflicts as very urgent safety concerns,” said Jennifer Stewart, a senior vice president at Gist Healthcare, a consulting firm that advises hospitals.
They have also shifted many nurses’ view of their employers, she said. “The perceptions and the experiences are being crystallized and starting to be viewed through a certain lens. And I think that lens is very favorable to unions.”
At Mission Hospital in Asheville, N.C., safety concerns created by the pandemic added urgency to the nurses’ push to join forces with National Nurses United.
Some questioned the union’s ability to deliver better working conditions and raised concerns about the union creating divisions within the hospital. A group of 25 Mission nurses signed a letter before the vote saying “an outside third party, like the N.N.U., is not the solution.”
But last September, 70 percent of nurses approved the union, one of the largest wins at a hospital in the South in decades. Susan Fischer, a Mission nurse who helped lead the organizing drive, called National Nurses United “instrumental in helping us find our voice.”
She said the union was already proving its worth, pushing management in bargaining talks this month to provide better access to protective equipment and to assign nurses fewer patients.
In a statement, HCA, which owns Mission Hospital, said its highest priority was to protect workers and that the unions were “exploiting the situation in an attempt to gain publicity and organize new dues-paying members.”
In addition to staging protests and strikes, unions have defended workers who are speaking up against their employers. Some unions have sued hospitals, including one lawsuit against Riverside by the S.E.I.U. Similarcases have been dismissed in court, and HCA called the Riverside suit a publicity stunt.
Industry executives say the unions are unfairly blaming hospitals for the horrors of the pandemic. While some had difficulty providing protective equipment early on, hospitals have done their best to follow government guidelines and to protect workers, said Chip Kahn, the president of the Federation of American Hospitals, which represents for-profit hospitals.
Mr. Kahn said the unions were leveraging the crisis to achieve their agenda of organizing workers. “They’ll push whatever pressure points they can to try to force their way into hospitals, because that’s what they do.”
Nurses protesting outside Good Samaritan Hospital in San Jose.Credit…
About 17 percent of nurses and 12 percent of other U.S. health care workers are covered by a union, according to an analysis of government data, and rates of union coverage have remained largely unchanged during the pandemic. The share of hospital workers with union representation has declined from above 22 percent in 1983 to below 15 percent in 2018, reflecting a decades-long decline in organized labor.
Some unions, including the outspoken National Nurses, have often seemed to occupy the fringes of the labor movement. For years it was better known for advocating proposals like Medicare for All, which would replace private insurance with government-run health care, and for enthusiastically backing Senator Bernie Sanders of Vermont for president.
The pandemic, and the union’s decision to endorse Joseph R. Biden Jr. after Senator Sanders left the race last year, have tempered that reputation. Mission nurses said that politics was not part of the allure of National Nurses United. “Of all the unions we could’ve gone to, they had the best track record,” Ms. Fischer said.
The Biden presidency may give the unions an opportunity to flex their newfound muscle. Mary Kay Henry, the international president of the S.E.I.U., was among the labor leaders who met virtually with Mr. Biden last year.
“In my 40 years of organizing health care workers, I have never experienced a time when people are more willing to take risks and join together to take collective action,” Ms. Henry said. “That’s a sea change.”
Rep. Joe Courtney (D-Ct.) is reintroducing a bill to help curb workplace violence in the healthcare sector to the 117th Congress next week.
In the latest incidence of workplace violence within the healthcare industry, a 43-year old female doctor was shot and killed by another physician at Children’s Medical Group in Austin, Texas on Tuesday afternoon.
Pediatrician Dr. Katherine Lindley Dodson, 43, died from a gunshot wound that Austin police believe was inflicted by Dr. Bharat Narumanchi, 43. Narumanchi died from an apparent self-inflicted gunshot wound, according to the police report. No motive was given for the attack.
When Austin Police SWAT officers made entry to the medical office building, they found the bodies of Drs. Dodson and Narumanchi inside.
Narumanchi did not work at Children’s Medical Group, but had been there a week earlier to apply for a volunteer position that he reportedly did not get. He was a pediatrician who had been recently diagnosed with terminal cancer, according to the police report.
Other than the visit to the office the week before, there did not appear to be any relation or other contact between Dr. Dodson and Dr. Narumanchi, police said.
In the 911 call, Austin police received a report that a male subject had entered the medical building with a gun and was holding hostages inside. As the incident began to unfold, it was learned that several hostages were being held. Several hostages initially escaped and others were later allowed to leave with the exception of Dr. Dodson.
Hostages told officers that Narumanchi was armed with a pistol and what appeared to be a shotgun and had two duffel bags.
Hostage negotiators arrived on scene and attempted to make contact with Dr. Narumanchi, to no avail, police said. After several attempts, it was decided to make entry into the building. It appeared that Dr. Narumanchi shot himself after shooting Dr. Dodson. The case is under investigation.
WHY THIS MATTERS
Workplace violence in healthcare is an ongoing issue, and the loss of Dodson is particularly tragic.
In a 2015 report the Occupational Safety and Health Administration stated that “healthcare and social assistance workers experienced 7.8 cases of serious workplace violence injuries per 10,000 full-time equivalents in 2013. Other large sectors such as construction, manufacturing, and retail all had fewer than two cases per 10,000 FTEs.”
Another report released by the American Hospital Association called the 2020 Environmental Scan, showed the rate of intentional injuries by others in 2017 to be 9.1 per 10,000 for healthcare and social assistance workers and 1.9 per 10,000 for all private industry.
One statistic that stands out is that nearly half of ER physicians said they’ve been physically assaulted at work and 71% have personally witnessed others being assaulted during their shifts. Since the most recent data is from 2017, the effect of COVID-19 is not included in these figures.
Most incidents of physical and verbal assaults are from patients to staff, according to National Nurses United head Michelle Mahon, assistant director of nursing practice for the professional association of registered nurses.
The issue has been exacerbated by the challenges of COVID-19, according to Mahon, who has said much of it could be prevented by ending staffing shortages.
EFFORTS
Rep. Joe Courtney (D-Ct.) is reintroducing a bill to curb workplace violence in the healthcare sector to the 117th Congress next week, according to information released by his office.
HR 1309, the Workplace Violence Prevention for Health Care and Social Service Workers Act proposed by Courtney, was passed in the House in 2019 after seven years of effort. It did not pass the Senate.
“Joe is confident about our prospects headed into this year,” his spokesman said.
National Nurses United supports the legislation that would create federal prevention standards not only for hospitals, but also for facilities such as Veterans’ Affairs, the Indian Health Service and home-based hospice. The law would require OSHA to develop workplace-violence-prevention standards that would include, among other mandates, that IV poles be stationary so they’re not able to be used as weapons.
The bill directs OSHA to issue new standards requiring healthcare and social service employers to write and implement a workplace-violence-prevention plan to prevent and protect employees from violent incidents and assaults at work.
Taking money hastily can create more problems than it solves if the additional resources aren’t tethered to need.
Taking a paycheck protection program (PPP) loan or other federally backed assistance to get through the pandemic will make your problem worse if you don’t have a realistic plan for the money, a former business owner convicted of federal loan fraud says in a White Collar Week podcast.
Jeff Grant, whose 20-person law firm was struggling when the federal government made emergency loans available after the 9/11 terrorist attacks, said he rushed to get the money without thinking through how best to use it. The result was a 13-month jail stint.
“It was raw desperation,” said Grant, who today focuses on helping other white collar criminals navigate a post-crime life. “At that point I was losing my business. I would have done anything for any gasp of air to try to save my business.”
EIDL loan
Grant applied for a $250,000 loan under the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program, a resource that, along with the Paycheck Protection Program (PPP), the federal government has once more made available, this time for pandemic-hit businesses.
To increase his chances of getting the money, he said on his application that his business was located across the street from Ground Zero in Manhattan, when it wasn’t — a form of wire fraud — and he used the money to pay off his personal debt — a form of money laundering, because the program’s debt covenants restricted the money for use only in the business.
“I had run up [my credit card debt] in the months prior [to 9/11], trying to save my business,” he said. “I was paying 24% interest on the credit cards. The EIDL loan was about 3%. It seemed to make sense: replace the 24% money with 3% money.”
For two years afterward, Grant said, he had no idea he was being investigated.
“Risk of an audit never entered my mind,” he said. “It was immediately after 9/11: a huge problem for the nation. I was just this little guy who was never going to have to account for anything.”
In addition to his business struggles, Grant was wrestling with personal problems that had jeopardized his law license. Facts emerging from bar association proceedings related to his practice may have led the government to investigate him, he said.
“I just got a phone call from two federal agents who told me there was a warrant out for my arrest,” he said.
Rather than fight the charges, he admitted his crime.
“Just like a business decision, you work from the end-result back,” he said. “I knew I had done something wrong. I wanted to pay for my crime. I made full restitution. A lot of people spend a lot of time and money trying to wriggle out of it, but we’re in a world where over 95% of criminal prosecutions result in plea bargains. There are virtually no trials. The government gives you a disincentive to defend yourself at trial and an incentive to resolve it quickly.”
Vast sums of money
Against the pandemic backdrop, Grant said, the kind of fraud he committed after 9/11 is probably much greater today, with hundreds of billions of federal loan funds available to struggling businesses, essentially on an honor system, since applicants simply check a box to certify their eligibility.
“One of my concerns is, people are just kind of wading in [to these programs],” he said.
Unlike EIDL loans, PPP loans don’t have to be paid back if the proceeds are used for eligible purposes, like payroll and operating expenses.
The government is making almost $300 billion in PPP assistance available under the latest funding round, enacted in December. Applications close at the end of the first quarter. Prior to this latest round, the program had made some $500 billion available, so more than $800 billion could be circulating by the end of the first quarter.
Grant advises against using the funds, even though they’re easy to access, to shore up a business that was either struggling before the pandemic or doesn’t have a realistic plan for getting through it, because the cash infusion can’t solve a systemic problem.
“You fall prey to magical thinking,” he said. “Money usually exacerbates problems without a good plan.”
He later worked with a nonprofit that, to attract customers, charged less than it recouped to provide services. As a result, the more services it provided, the more money it lost. It took out a $1 million state grant.
“Without fixing the business model, it blew through the $1 million in 18 months,” he said.
