Ron Telles (Whidbey News Group)

Study suggests WhidbeyHealth CEO was paid too much

Ron Telles earned $430,000 a year, while many of the hospital’s employees made less than $20 per hour.

A recent analysis of CEO salaries at not-for-profit hospitals in the peer-reviewed journal Health Affairs suggests that WhidbeyHealth has been paying its top employee far above the average for the size of the hospital.

The article “Nonprofit Hospital CEO Compensation: How Much Is Enough?” appeared in Health Affairs Forefront on Feb. 10. The story also discussed the disparity of salaries between CEOs and average hourly workers’ pay.

Ron Telles, who was fired from the WhidbeyHealth CEO position last week, earned $430,000 a year, or about $207 an hour, plus full benefits and other expenses.

The study found that the average CEO compensation for nonprofit hospitals with fewer than 50 beds is $130 an hour. Publicly owned WhidbeyHealth currently staffs 18 beds but has the potential to increase that to 25.

CEO compensation at the hospital district has ballooned over the years.

In 2004, CEO Scott Rhine signed a contract for $130,000 a year after five years on the job. In 2009, Tom Tomasino was hired at $230,000 a year. A 2009 editorial by the Whidbey News-Times pointed out that his salary was far above the average pay for CEOs at critical access hospitals and that the board was basing his salary on other hospital CEOs who had decades more experience that he had.

After Tomasino, Geri Forbes was hired at $279,000 a year in 2015, but her contract included board-approved performance bonuses equal to 25 percent of her salary. She announced her retirement in 2019, following construction cost overruns and other missteps.

Telles was the hospital’s chief financial officer before he was promoted to CEO in 2019. His one-year contract was for $330,000 a year with no bonuses, meeting minutes show.

The hospital board increased his salary to $430,000 in a renewed contract in the midst of the COVID-19 pandemic in November 2020. At the time, employees were being laid off and the hospital was operating with very little cash on hand; the nurses’ union complained that nurses were being paid well below the market rate.

Ron Wallin, the president of the hospital board, said Telles’ salary was increased to compensate for his dual roles of chief executive officer and chief financial officer.

“Mistakes were made,” he said, “but the board is trying to move past them.”

Wallin said the board decided to do away with the system of giving executives bonuses, which he said can hide the true salaries of CEOs. When they are taken into account, the salaries of CEOs at other hospitals are higher than people realize, he said.

Right now, hospitals across the nation are searching for CEOs, he said, which might increase the salary of a new CEO.

In prior years, board members also argued that the CEO pay is high because WhidbeyHealth is more than just a hospital but includes clinics across the island.

During the hospital levy campaign, Telles said executive team compensation was temporarily reduced by 10% for several months in 2020 to help with the financial problems associated with the pandemic.

HealthTechS3, a management services firm, proposed that the interim CEO receive an annualized salary of $370,000, with no additional cost of benefits beyond travel.

The hospital hired a new chief financial officer in the beginning of the year as concerns grew about the hospital’s books. He quickly raised alarms about the health of the hospital’s finances.

Telles’ salary wasn’t reduced when the hospital hired the interim CFO. Telles was fired without cause, and he will receive severance pay based on nine months of his $430,000-a-year pay, according to his contract.

The Health Affairs study states that the ratio of average CEO pay to average hourly worker wage for hospital with fewer than 50 beds is 6:1.

A recent report by the Whidbey News-Times found that the hospital district is the only public entity on Whidbey Island that has a significant number of employees who are paid significantly less than $20 an hour. Last year the board started making efforts to pay staff at least $18 an hour.

The gap between CEO pay and hourly employee wages is greater in larger hospitals, growing to 14:1 for facilities with more than 400 beds.

An ABC News story last year about the massive gap between CEO pay and average worker pay in different industries cited an example from a hospital in Missouri. A technician making $13.77 an hour contracted COVID while working in the ER. Upon his return he was given a $6 gift card for the hospital cafeteria and named the employee of the month.

The CEO of that hospital system received $30.4 million in pay, which was a 13% increase.

This story originally appeared in the Whidbey News-Times, a sister publication to The Herald.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Olivia Vanni / The Herald 
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County.
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County. (Olivia Vanni / The Herald)
Mukilteo mayor vetoes council-approved sales tax

The tax would have helped pay for transportation infrastructure, but was also set to give Mukilteo the highest sales tax rate in the state.

Marysville Mayor Jon Nehring gives the state of the city address at the Marysville Civic Center on Wednesday, Jan. 31, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Marysville council approves interim middle housing law

The council passed the regulations to prevent a state model code from taking effect by default. It expects to approve final rules by October.

x
State audit takes issue with Edmonds COVID grant monitoring

The audit report covered 2023 and is the third since 2020 that found similar issues with COVID-19 recovery grant documentation.

Bothell
Bothell man pleads guilty to sexual abuse of Marysville middle schoolers

The man allegedly sexually assaulted three students in exchange for vapes and edibles in 2022. His sentencing is set for Aug. 29.

Larsen talks proposed Medicaid cuts during Compass Health stop in Everett

Compass Health plans to open its new behavioral health center in August. Nearly all of the nonprofit’s patients rely on Medicaid.

Snohomish County Health Department Director Dennis Worsham on Tuesday, June 11, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Snohomish County Health Department director tapped as WA health secretary

Dennis Worsham became the first director of the county health department in January 2023. His last day will be July 3.

Logo for news use featuring the municipality of Mukilteo in Snohomish County, Washington. 220118
On second go, Mukilteo City Council votes against sales tax hike

A veto from Mayor Joe Marine forced the council to bring the potential 0.1% sales tax increase back for another vote Monday.

Community members gather for the dedication of the Oso Landslide Memorial following the ten-year remembrance of the slide on Friday, March 22, 2024, at the Oso Landslide Memorial in Oso, Washington. (Ryan Berry / The Herald)
The Daily Herald garners 6 awards from regional journalism competition

The awards recognize the best in journalism from media outlets across Alaska, Idaho, Montana, Oregon and Washington.

Two visitors comb the beach at Kayak Point Regional County Park on Friday, June 14, 2024, in Tulalip, Washington. (Ryan Berry / The Herald)
Nate Nehring and WSU Beach Watchers to host beach cleanup at Kayak Point

Children and families are especially encouraged to attend the event at Kayak Point Regional County Park.

One person dead in single-vehicle fatal crash near Stanwood

A 33-year-old male was found dead at the scene Monday evening with his vehicle partially wrapped around a tree.

Logo for news use featuring Snohomish County, Washington. 220118
Snohomish Regional firefighters respond to nearly 90 calls on the Fourth

While crews stayed busy on Independence Day, it was far more peaceful than other years.

Vehicles travel along Mukilteo Speedway on Sunday, April 21, 2024, in Mukilteo, Washington. (Ryan Berry / The Herald)
Mukilteo approves 84-acre annexation east of Speedway

The annexation of unincorporated land is expected to bring new revenue to the city as it faces budget challenges.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.