Healthcare Business News

Former Goldman exec lured to Accretive

By Modern Healthcare staff
Posted: May 1, 2013 - 7:15 pm ET

Accretive Health's ongoing shakeup of top management in the wake of a billing and collection scandal continues to focus on recruiting outsiders without healthcare experience.

The revenue-cycle company reported Tuesday that it was bypassing shareholder approval to grant stock options to former Goldman Sachs Managing Director Richard Kimball Jr., who assumed the post of vice president and chief strategy officer. The company invoked an exemption under New York Stock Exchange rules to make the grant, according to its news release.

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Since leaving Goldman, Kimball has been serving as board chairman of New York-based Neu Industries, according to a stockholder complaint filed by the Shareholder Forum (PDF). The nutraceutical firm sells a hangover relief drink, according to news accounts.

Also this week, Accretive hired Joseph Flanagan, a former senior vice president of Applied Materials, Northlake, Ill., to serve as chief operating officer. Flanagan will report to Stephen Schuckenbrock, the new president and CEO. He joined Accretive earlier this year after serving as president of Dell Services, the servicing arm of the computer manufacturer.

While company spokesmen didn't respond to e-mails seeking comment, the exemption announcement said the firm granted Kimball an option to purchase 1 million shares of its stock over four years at the April 30 closing price of $10.54. Flanagan's contract called for a base salary of $595,000 with an opportunity to double that sum with a performance bonus, as well as a $400,000 signing bonus, according to a filing with the Securities and Exchange Commission.

The same SEC filing revealed that Mary Tolan, who stepped down last month as president and CEO, will get paid $731,000 a year as a non-executive chairman.

In April 2012, Accretive drew national attention after being sued by Minnesota Attorney General Lori Swanson for using “boiler-room tactics” to collect hospitals copayments from low- and moderate-income patients.

Fast-growing revenue at the firm plunged from $253.7 million in the first quarter of last year to $223.1 million in the third quarter of 2012. The company has delayed filing its final quarter results and annual report. In the first nine months of last year, earnings sank to $3.7 million on $713.6 million in sales after reaching $16 million on $566.2 million in sales in the comparable period from the previous year.

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