John Casey once again took over as chief executive officer of MedCath Corp., Charlotte, N.C., last week, less than a month after Charles Slaton had stepped into the CEO role.
The specialty cardiovascular-care hospital company announced Oct. 25 in a news release that Slaton was stepping down "to pursue other interests," adding that the publicly traded MedCath would miss its yearly earnings estimates.
MedCath lowered its annual earning expectation to between $95.7 million and $97.7 million from its previous estimate of $105 million to $110 million.
MedCath blamed the missed targets on low volume and costs related to Hurricane Katrina; two of MedCath's 12 hospitals are located in Louisiana. In a phone interview, Casey said the company would talk about a new strategic plan during a November investor conference call and added that missed earnings couldn't be pinned on Slaton alone. "One individual can't be blamed," he said.
Casey wouldn't elaborate on why Slaton stepped down. Before Slaton took over as CEO, he served as president and chief operating officer. MedCath hadn't named a new COO until two days after Slaton stepped down as CEO. In a news release that announced Edwin French as the acting COO, Casey said French will execute "initiatives in certain markets that are experiencing operating challenges."
Casey served as CEO before Slaton and is still serving as chairman. MedCath has started a CEO search.
Neither Casey, who was reached at his home but declined comment, nor Slaton would give details on whether Slaton received a severance.
An October Securities and Exchange Commission filing said Slaton would receive twice his annual salary for a "voluntary termination by the executive for good reason."
Slaton was paid a salary of $400,000 for serving as president and COO, according to the company's 2004 annual report.
Bill Quirk, president and managing director of healthcare compensation consultancy Sullivan, Cotter and Associates, said it's likely Slaton was eligible for the full severance.
"In the for-profit world, you can raise your hand and say, 'I don't like it here,' and get your severance," Quirk said.