Dr. John Todd, who took over as head of Stevens Hospital in 2004 after its previous administrator was fired, will stay on as chief executive through June 2007.
Todd, 62, is being paid an annual salary of $300,000. His salary for the final year has yet to be decided. Negotiations will likely take several months, board chairman Fred Langer said.
The taxpayer-supported hospital’s five-member elected board asked Todd to stay on for another year to allow a smoother transition, Langer said.
Todd was appointed CEO in June 2004 after serving as acting chief following the firing of Steve McCary in January of that year.
An advisory committee recommended that Todd formally take over as chief executive for two years. In September 2004, his salary was set at $300,000 a year, with a one-time incentive of $50,000 if he stayed through June 2006.
Langer said the $50,000 payment would be one of the issues discussed when the board decides how he will be compensated for his final year.
“We’ll use this opportunity to educate the board and the community about how chief executives are compensated,” Langer said. “It’s always a politically sensitive subject.”
The search for a chief operating officer is expected to begin this fall, with the position expected to be filled during the first half of next year, Langer said. Whoever is chosen as chief operating officer ultimately could be considered for promotion to chief executive when Todd leaves, he said.
That interval would allow time for the new administrator to work with the hospital’s financial consultants, Chicago-based Wellspring Partners Ltd. Todd hired the firm in May 2004 to help the hospital regain its financial footing after a string of losses.
The consultants charged $3.7 million for their first year of work, which ended in June. The cumulative effect of better business practices over the three-year turnaround period is projected to be $23 million.
McCary was fired as the hospital struggled with financial losses. His contract let him walk way with a severance package that will pay him $1.18 million over seven years. The hospital district is also paying him $921,049 in deferred retirement compensation.
McCary was hired by the hospital in 1989 as its chief operating officer.
This year, the hospital is operating on a $134.1 million budget. South Snohomish County property owners pay nearly $4 million a year in taxes to support the hospital.
The hospital’s estimated loss for last year was $1.38 million. The hospital hopes to break even this year.
Sharon Salyer is a writer for The Herald in Everett.
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