Executives Receive Bonus, Staff Asked to Sacrifice
Hospital executives at a Denver hospital were given incentive bonuses a week after front-line staff were asked to voluntarily reduce their pay or work hours. Read on to learn more about employees reactions and CEO apology.
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On April 27th, the CEO of Denver Health Medical Center (DHMC) issued an apology to employees for the timing of executive and management incentive bonuses. The 2019 bonuses, paid out on April 10th, came a week after front-line staff were asked to voluntarily take leave without pay or reduce their hours. The hospital is facing the same financial challenges as many other facilities in the wake COVID-19.
Employees Asked to Sacrifice
On April 3rd, CEO Robin Wittenstein sent an email to employees how the pandemic will cause the hospital financial stress. Wittenstein's email detailed measures that would be taken to ease the facility's financial strain. These included:
A hiring freeze
Ask employees to voluntarily take leave without pay
Use personal time off, or
Reduce hours in work week
Wittenstein warned more extreme options, such as mandated use of paid time off and mandatory leave without pay, may be needed. However, the goal was to avoid these measures if possible.
Big Bonus Payouts
The dollar amount of bonuses is determined by the organization's board of directors. Many of the bonuses paid out on April 10th were between 17% to 19% of executives' salaries and were between $50,000 and $100,000. Wittenstein received a $230,275 bonus, totaling 23.8% of her $967,155 annual salary. According to CBS4, about 150 hospital executives and managers received bonuses for their work during the payout.
Hospital administrators have defended the bonuses saying the money puts DHMC executives and administrators at about the 50th percentile of what other administrators across the nation are paid.
Employee Reactions
Hospital workers expressed anger and frustration over the payments. An online petition, posted on Change.org, called for executives to return the bonus money. The petition was signed by 3,449 individuals and included many DHMC employees.
Chris Hinds, a Denver City Councilman, also asked the bonuses be returned and used to benefit front-line workers. During a facebook live session, Hinds stated
Quote
"I'm really frustrated that we have public health administrators...that are taking tens of hundreds of thousands of dollars of bonuses....while working families are sacrificing themselves.”
Late Apology
On Monday, April 27th, Wittenstein sent an email apology to hospital staff. The apology came 4 days after a local news channel first reported the executive bonuses. Wittenstein apologized for the timing and acknowledged the payments have "caused you hurt and anger". According to CBS4, she also apologized for the lack of transparency writing
Quote
"Being informed of incentive payments now to the executive staff, no matter what the explanation ... has clearly been painful and dividing, especially because you did not hear about this from me directly first. For this, I am deeply sorry,"
Wittenstein also informed staff she too was sacrificing by using her paid time off in place of her regular salary. She also waived accrual of her paid time off for the next 3 months.
In an April 14th email, Wittenstein asked her executive team to also give back. As a result, the executive staff reduced hours and pay by 12%, contributed over $550,000 in salary back to the hospital and donated $386,000 to the Denver Health Foundation for an employee relief fund. According to Wittenstein, a 100% of the executive team agreed to give back in some way.
Board Response
The Board Chair for the Denver Health and Hospital Authority also sent an email apology, writing
Quote
"All of us on the board regret that the timing of the 2019 incentive payments have created anger and resentment, and we understand how troubling news of these payments can be at such a time as this".
**DHMC has 7,000 employees and treats about 930,000 patients a year.
QUESTION: What do you think about incentive payments to hospital administrators?
