Gerlach declines Salinas Valley CEO post

Matt Gerlach, Salinas Valley Memorial Healthcare System's pick for president and CEO, will not be joining the health network as planned.

Gerlach, 57, was named two weeks ago by the board of directors as its choice to succeed interim CEO Lowell Johnson. Gerlach was expected to come on board March 29, leaving his role as VP and COO at Glendale (Calif.) Memorial Hospital and Health Center.

But on Feb. 28, Salinas Valley Memorial announced that Gerlach had turned down its offer and would stay in his current position at Glendale. According to a statement released by the hospital, officials and Gerlach were unable to reach an agreement regarding contract length and severance pay. Gerlach was to be paid an annual sum of $450,000 for four years, with 18 months' salary in severance if he left.

“We are sorry that Matt felt he needed to reverse course on his decision,” Harry Wardwell, board president, said in the hospital statement. “However, if this isn't the right fit, it is better to know that sooner rather than later.”

Gerlach was selected after a search to find a permanent leader to replace Johnson. Johnson was appointed in April 2011 as the temporary lead after retiring CEO Sam Downing left amid scrutiny regarding his $4.9 million severance package.

For the fiscal year ended June 30, 2012, Salinas Valley Memorial reported operating income of $171,000 on operating revenue of $326 million, recovering from a $7.4 million loss the previous year.