Stevens Hospital can expect to pay between $500,000 and $600,000 in annual salary and benefits when a new chief executive is hired later this year, according to the results of a salary survey.
The salary ranges were based on what top hospital executives are paid nationally, said Jay Justice, senior vice president of Clark Consulting, based in Minneapolis, which conducted the survey for the taxpayer-supported hospital in Edmonds.
The national survey included information on executive compensation from 17 public hospitals in the nation and 15 hospitals in the Northwest. The hospital paid the consultants about $10,000 for the salary survey, said hospital spokeswoman Beth Engel.
“It’s a key position at a key time in the history of Stevens Hospital,” Engel said. “We needed to look at national averages to make sure we were doing the best job we can for the residents of the hospital district and the patients we serve.”
The search has been narrowed to three candidates, according to Engel. Hospital board president Fred Langer said the hospital hopes to have a new chief executive working by July or August.
The hospital requested the information on executive salaries as it prepares to hire a new chief executive to replace Dr. John Todd, who has led the hospital for about two years.
Todd took over as head of Stevens Hospital in 2004 after its previous administrator was fired. Initially, he was named as interim head of the hospital. He later agreed to stay on until the hospital could find a permanent chief executive.
The plan is for the two administrators to work together so there is a smooth transition, with Todd staying on for the next six months to a year, Engel said.
The five-member, elected hospital board has been given several options for salary and benefit packages it could offer the new administrator.
If the board wants to be in the middle range of what hospitals typically pay, it should offer a base salary of $321,000. With benefits, the total compensation could add up to $507,180, Justice said.
Executive benefits typically include life insurance, short- and long-term disability coverage, and retirement plans. Most chief executives also have the use of a car and are given help with financial planning, according to Clark Consulting.
If the hospital wants to have pay and benefits in the 90th percentile, it would have to pay a base salary of $384,000. With benefits, the total compensation could come to $606,720, Clark Consulting said.
The new chief executive will take over a hospital that is battling financial woes. In an attempt to stem the flow of red ink at the hub of Snohomish County Public Hospital District No. 2, Stevens entered into a two-year contract with the Chicago-based consulting firm of Wellspring Partners.
June 30 marks the end of the contract which will cost Stevens about $7.1 million, Engel said. That represents, she added, a 5.7-to-1 return on consultant costs compared to savings from Wellspring-initiated projects.
The hospital has laid off about 100 employees after reporting losses of $765,000 during the first two months of the year. The losses largely were blamed on a drop in the number of patients, particularly in the number of outpatient surgeries.
However, cuts in expenses, including savings from layoffs, mean the hospital is expected to show a profit of about $1.2 million by year’s end, Engel said.
Sharon Salyer is a writer for The Herald in Everett. Enterprise writer Sue Waldburger contributed to this article.
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