Richard Scott's 1994 salary and bonus lagged behind those of three other top executives at Columbia/HCA Healthcare Corp., according to the company's proxy, which was filed last week.
The nation's largest hospital company gave Scott, its president and chief executive officer, a 55% raise in salary and bonus in 1994 to $1.11 million.
Despite the raise, Scott's compensation lagged behind those of Chief Operating Officer David Vandewater, who received a stock bonus worth $2.4 million for longtime service in addition to his salary and bonus of $785,000, and Thomas F. Frist Jr., M.D., then the company's chairman, whose salary and bonus totaled $1.13 million.
Scott also made less than Columbia's new chairman, R. Clayton McWhorter, whose salary and bonus at Healthtrust totaled $1.2 million in fiscal 1994. Columbia merged with Healthtrust last month. After the deal, McWhorter became chairman and Frist vice chairman.
Scott, who doubled Columbia's size in the past year, received a raise because his base salary was "below average base salaries paid to CEOs of other publicly held healthcare companies," the proxy said. Columbia co-founder Scott's stock is worth $240 million.
Scott also makes less than some of his peers in companies with revenues comparable to Columbia's $15 billion, according to the May 22 issue of Forbes magazine. For example, the top executives of Merck & Co. and Johnson & Johnson made between $1.5 million and $2 million in salary and bonus in 1994.
Also last week, Columbia, a 318-hospital chain, reported strong earnings for the first quarter ended March 31, including a 31% jump in operating income.
The company reported profits of $358 million, or 80 cents per share, compared with $95 million, or 23 cents per share, in the year-ago period. The year-ago quarter included $194 million in one-time charges associated with the company's merger with Hospital Corporation of America.
Operating income rose to $975 million. Columbia reported a 28% rise in revenues to $4.4 billion. The results include hospitals owned by Healthtrust.
One-time charges for the merger with Healthtrust will be reported in the next quarter's earnings and are expected to include $70 million for debt restructuring. Columbia has refinanced $700 million in Healthtrust bank debt and is refinancing another $1 billion in bond debt to lower its interest costs.
Columbia last week also released a list of deals completed since January 1994 and those still pending, documenting its feverish acquisition pace. Since January, the company has completed acquisitions, joint ventures and construction of 25 individual hospitals with 5,658 beds. In addition, it has signed letters of intent with 17 other hospitals with 3,292 beds.
Also last week, the company signed a letter of intent to form a joint venture with Georgia Baptist Medical Center, Atlanta. Columbia also signed a separate agreement to merge its Atlanta operations with a 50-physician multispecialty group, Fayette Medical Clinic.
Columbia/HCA Healthcare Corp.
3 months ended 3/31 FY1995 FY1994
Revenues (millions) $4,380 $3,432
Net income (millions) $358 $95
Earnings per share $0.80 $0.23