With two exceptions, the American Hospital Association made good on its promise to hold the line on executive salaries at the Chicago-based trade group in 1993.
According to the association's annual tax filing with the Internal Revenue Service, most members of the AHA's senior management team received sal-ary increases in 1993 near last year's inflation rate of 2.7% (See chart). The previous year, the group posted an average salary increase of nearly 14%.
The association filed its 1993 return, known as Form 990, on Aug. 15. It's available for public inspection.
In September 1992, the AHA trimmed 105 positions, or nearly 11% of its work force, to deal with a projected budget deficit that year of $2.4 million (Sept. 7, 1992, p. 2).
At that time, AHA President Richard Davidson indicated that the AHA's top brass wouldn't be getting big raises in 1993 in light of the financial difficulties.
No financial crisis occurred, however. Including profits from its subsidiaries, the AHA earned $6.4 million on revenues of $129.8 million (Aug. 30, 1993, p. 32).
Regardless, the AHA stuck to its position on executive salaries with two notable exceptions: Richard Wade, senior vice president for communications; and Podge Reed, vice president and special assistant to the president.
Messrs. Wade and Reed are considered to be Mr. Davidson's closest advisers.
Mr. Wade was Mr. Davidson's vice president for communications when Mr. Davidson headed the Maryland Hospital Association. Mr. Reed, meanwhile, was the director of the AHA's regional office in Washington before he ran Mr. Davidson's transition team when he became AHA president in July 1991. He later was appointed vice president and special assistant to Mr. Davidson.
Mr. Reed recently resigned to take over a family-owned oil company in Louisiana (Aug. 15, p. 28).
Mr. Wade's annual compensation rose 14.8% to $160,692 last year from $140,000 in 1992. Mr. Reed's annual compensation jumped 17.6% to $134,190 last year from $114,131 in 1992.
The smallest increase was suffered by Richard Pollack, the AHA's executive vice president for federal relations in Washington. His annual compensation crept up just 1.9% to $189,481 last year.
As for Mr. Davidson, his annual compensation rose 21% last year to $602,641, but the figure included some $58,000 in deferred compensation from 1992. Without the deferral, his actual compensation would have dropped 2% to $544,641 last year from $555,980 in 1992.
A review of Mr. Davidson's compensation package revealed that he was underpaid in 1992, and the shortfall was accounted for in 1993, Mr. Wade said. The 1992 adjusted figure would have represented a nearly 40% increase over Mr. Davidson's 1991 salary of $400,000.
The overall financial figures disclosed in the AHA's 1993 Form 990 reflected the revenue and expenditure figures released at its annual convention earlier this month in Dallas (Aug. 15, p. 22).
The AHA earned $427,367 on total revenues of about $88 million, according to the filing. Including the dividends, profits and revenues from its two subsidiaries, the association earned more than $8.4 million on total revenues of about $133.8 million.