CHS Loses $2 Billion. CEO Gets Raise.

This is a short update on the lack of skin in the game by hospital executives. In other words, very little downside risk for their failures, but very great upsides.

Take a look at my April 2, 2018 blog post, What’s The Downside Risk for Hospital Executives?  Subsequently, Community Health Systems, known in the healthcare community as CHS, announced the 2017 compensation for its CEO, Wayne Smith, whom I mentioned in the blog post.

CHS lost approximately $2 billion dollars in 2017 on revenues of $3.1 billion.

Was Mr. Smith laid off? Was he fired? No, Mr. Smith’s total 2017 comp increased over the prior year (in which the company lost “ONLY” $220 million on revenue of $4.5 billion).

Revenue goes down by 1.4 billion . . . Losses go up by a factor of almost 10. Mr. Smith’s income goes up to near $5 million for the year.

Talk about no skin in the game. Not only does he not suffer for the horrible financial results, he’s rewarded as if they didn’t happen.

Pitch that to your employer or fellow shareholders and see if they’ll go for the plan.

Leave a Reply