Community Health Systems CEO's base pay will once again remain flat in 2020, but higher incentive pay could once again boost his total compensation.
The Franklin, Tenn.-based hospital chain reported in a Securities and Exchange Commission filing Friday that longtime CEO Wayne Smith's base pay will be $1.6 million this year, the same it has been since at least 2016. He'll be eligible to earn up to 225% of that pay in the form of cash incentives, the same as in 2019.
Incentive pay is where the real money is at, as evidenced by the fact that Smith made $7 million in total compensation in 2018, mostly in the form of incentive pay.
CHS' new chief financial officer, Kevin Hammons, will make $575,000 in base pay and up to 125% in cash incentives. His predecessor, Thomas Aaron, made $700,000 in base pay last year with the same incentive target.
Tim Hingtgen, CHS' Chief Operating Officer, will make $1 million in base pay this year, up from $935,000 last year. His target incentive pay will remain 140% of his base pay.
CHS will pay Chief Medical Officer Dr. Lynn Simon $583,518 in base pay, up slightly from $566,522 in 2019, with incentive pay staying at 115%. General Counsel Benjamin Fordham will make $606,778 in base pay this year, up from $583,440 last year, with incentive pay also holding steady at 115%.
The biggest raises this year are coming in the form of stock awards, which are divided equally between non-qualified stock options and time vesting restricted stock. Effective March 1, Smith will get 225,000 performance-based restricted stock shares, up from 157,500 in 2019. Hammons is getting 95,000 shsres and Hingtgen is getting 150,000. Both Simon and Fordham's stock awards are holding steady this year at 52,500 shares.
CHS' stock price closed Friday at $7.18 and is up about 51% for the week.
CHS's strategy of selling off hospitals to lower its debt is starting to pay off for the for-profit hospital chain, which reported a lower net loss to shareholders last year compared with 2018. About 80% of the hospitals sold between 2017 and 2019 are either losing money, bankrupt or closed.