Among the hospital companies, Bovender was the clear winner, more than doubling the take of No. 2, Alan Miller, the chairman, president and CEO of Universal Health Services, King of Prussia, Pa. Miller received an unusual bonus of $5 million last year that will go toward the construction of a new business school at his alma mater, the College of William & Mary. Universal will donate the money in five annual installments of $1 million, but the donation is considered compensation to Miller and cannot be written off for tax purposes, according to a securities filing.
“The board wanted to participate with (the college) in honoring a pioneer in the investor-owned hospital field, of whom we are so proud,” said Anthony Pantaleoni, a Universal board member, in a written statement.
The same 10 hospital companies appeared in the survey for fiscal 2005 as well, although one name changed: Bill Carpenter succeeded Kenneth Donahey as president and CEO of LifePoint Hospitals, Brentwood, Tenn.
The departures of McGuire and Rowe left Hanway, CEO of Philadelphia-based Cigna, at the top, with $29.5 million in total compensation. “The board of directors certainly has a lot of confidence in Mr. Hanway’s leadership,’’ said Cigna spokesman Wendell Potter, pointing out that Hanway has become one of the most senior executives on the list.
Sierra Health Services dropped out of the list this year because it fell just short of the top 10 in net revenue. In March, UnitedHealth agreed to buy Sierra Health for $2.6 billion, subject to regulatory approval by the U.S. Justice Department, California, Nevada and Texas. Shareholders will receive $43.50 per share under the deal. Sierra Health CEO Anthony Marlon, with total compensation of $18.6 million in 2006, owns 4.4 million shares and is expected to stay on as region chief of the Las Vegas-based insurer.
One of the biggest specialty-care companies is HealthSouth Corp., Birmingham, Ala., but its CEO, Jay Grinney, was the lowest-paid among specialty-care providers in the ranking. Grinney, whose total compensation was $1,921,237 in 2006, or about $30,000 less than in 2005, has helped lead the rehabilitation provider’s turnaround. The company has shed three business lines to focus on inpatient rehabilitation. HealthSouth was also re-listed on the New York Stock Exchange in October and saw its share price jump from $4.90 per share to $22.65 per share.
Grinney may not bring up the rear for long. Since he became CEO three years ago, Grinney has been granted 480,000 stock options with exercise prices ranging from $26.05 per share to $26.85 per share.
Like Grinney, DaVita’s Thiry joined his company when it was mired in turmoil. Having turned around the former Total Renal Care, Thiry continues to reap the benefits by exercising stock options. Thiry’s total compensation of $33,258,234, including $29,642,521 in exercised stock options, topped his 2005 total compensation of $25,123,863, which included more than $22 million in exercised options.
Also in 2006, Thiry spent about $495,000 for “corporate aircraft usage” of leased or chartered flights, according to a filing with the SEC, noting that this provides an opportunity for Thiry to use his time more efficiently. The arrangement seems to work well for Thiry, who said it allows him to be a “good daddy, good husband and good CEO” as he travels from his home in San Francisco to DaVita’s
El Segundo, Calif., headquarters each week. He sees his role as “mayor of DaVita village” (Nov. 28, 2005, p. 32), and likened this perk to that of a town mayor who benefits from police escorts “running stop lights” to help with a city official’s travel schedule.
Thiry also noted that he has made sizable donations to kidney-care-related charities. According to a company spokeswoman, Thiry has contributed $384,025 to such charities this year and has pledged an additional $28,975, for a total of almost $413,000 for 2007, while he also gave about $319,000 to other healthcare causes. In an e-mail message later, Thiry said he plans to pledge more money in 2007, but he is not certain of the amount.