A year has made a huge difference in the financial fortunes of Healthtrust's top executive, R. Clayton McWhorter.
The value of stock options for Mr. McWhorter has ballooned to $13 million from $3.5 million in 1993, according to Securities and Exchange Commission documents. Mr. McWhorter, 61, is chairman, president and chief executive officer of the 116-hospital chain.
Earlier this fall, Mr. McWhorter negotiated a merger between his company and the nation's largest healthcare chain, Columbia/HCA Healthcare Corp. (Oct. 10, p. 2).
Details of Mr. McWhorter's compensation and stock awards were included in Healthtrust's year-end financial statement, filed in late November.
The rise in the options' worth results from Healthtrust's higher stock price and a significant grant of stock options that's part of Mr. McWhorter's 1994 compensation package.
Mr. McWhorter received a 6.7% raise in salary to $800,000 for the fiscal year ended Aug. 31. He also received a $400,000 bonus, which is valued at $800,000 because Mr. McWhorter used it to buy Healthtrust stock at a 50% discount. Beginning this year, Healthtrust employees could invest up to 100% of their bonuses to buy Healthtrust stock at half-price.
However, the most lucrative part of Mr. McWhorter's package could be the award of stock options. How much they are worth depends on the price of Healthtrust's stock. Stock options are awarded at an exercise price, which often is the market price for the stock at the time of the award. An executive benefits from such options if the stock's price rises.
Mr. McWhorter, who owns a 1.3% stake in Healthtrust, has been awarded about 1 million in stock options during the past three years. Now, his 1 million options are worth $13 million because Healthtrust stock has risen throughout the year.