CEO Pay: Ontario NDP Targets Hospital Salaries And Perks

First Posted: 01/03/12 02:38 PM ET Updated: 01/06/12 01:29 PM ET

Ceo Pay Hospital Ontario
It's time to cap salaries and cut lucrative perks for top health-care executives in Ontario, NDP Leader Andrea Horwath said Tuesday after most hospitals posted their CEO compensation packages online.

TORONTO - It's time to cap salaries and cut lucrative perks for top health-care executives in Ontario, NDP Leader Andrea Horwath said Tuesday after most hospitals posted their CEO compensation packages online.

The Ontario Hospital Association recommended the 151 hospitals in the province release their compensation contracts, along with board minutes, financial plans and other documents, after becoming subject to freedom of information legislation Jan. 1.

The salaries of $750,000 or more for CEOs were already public, but full contracts were posted, showing some also got generous pension top-ups of more than $100,000 a year, car allowances of up to $1,000 a month and severance packages worth more than $1 million.

The Ontario Hospital Association points out the median CEO salary in Ontario is $266,000, while less than five make $700,000.

Health Minister Deb Matthews said the government expected there would be some inappropriate things exposed when they subjected hospitals to FOI legislation, but staff is still sorting through the documents and so far nothing had jumped out at her as excessive.

"I’m like everybody else, I look at some of the numbers and say 'Wow,'" said Matthews.

"They should be reasonable and not excessive, and they should be justifiable to the public."

Hospital CEO salaries should be capped at $418,000 — double the premier's salary — and the expensive perks eliminated, said Horwath.

"I think it’s clear that not only the salaries but the nature of the perks, in some cases the amount of the perks, the travel allowances, gets to be quite over-the-top, overly generous," she said.

"Certainly we do want to compensate people fairly, but I don’t think it’s fair that the average household income is around $70,000 and yet we’re paying the CEOs of our hospitals over 10 times that amount in some cases, plus all kinds of perks and benefits on top of that."

However, the Opposition said the high salaries and perks for hospital CEOs are justified if that person is helping the cash-strapped province save taxpayers' money.

"I’m less concerned by the package of perks that create the CEO’s salary than I am the justification of that salary by the actions that CEO takes," said Progressive Conservative Peter Shurman.

"So I don’t really care if a guy gets $600 a month for a car allowance, and I don’t really care if a guy gets $500,000 a year to do his job, if he’s saving me $10 million by his actions."

Matthews also rejected the idea of a one-size-fits-all salary cap when hospitals range from very small community-based facilities to huge multi-site corporations, calling it simplistic and not well thought out.

The Ontario Hospital Association said now was "absolutely the wrong time" to cap CEO salaries because the government plans to cut the increase in health spending to three per cent a year from more than double that, and will need the best administrators to find savings.

The government passed legislation to tie executive compensation at hospitals to good patient outcomes, and the boards of directors are fully aware they are spending public dollars to hire executives, said Matthews.

"It would only be in situations that I feel are over the top that I would ask them to revisit, but I’m going to wait to have a chance to go through all the documents," she said.

Some executives also had their memberships in private clubs paid for by the hospitals, but the government said a perks directive issued last April banned hospital CEOs from receiving club memberships.

Some of the hospital CEOs also get $3,500 or $4,000 a year to help with tax planning, which Horwath said means finding ways to avoid paying taxes on their high salaries.

"That’s the kind of stuff that makes people just laugh and shake their heads," said Horwath.

Documents released Tuesday showed Robert Bell, president and CEO of the University Health Network in Toronto, earns $580,000 plus a 30 per cent bonus, another $115,000 for a supplementary retirement plan on top of his pension, and $700 a month for a car. The hospital also pays for all the vehicle's operating costs, including insurance.

By comparison, Alex Munter, president and CEO of the Children's Hospital of Eastern Ontario, is paid $330,000 with no bonus and no car allowance, but he does get a discretionary fund of up to $5,000 a year for work-related expenses.

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    Gabriel Resources is a Toronto-based company focused primarily on a gold excavation project in Romania. <i>Note: An earlier version of this gallery reported that Gabriel Resources' 2010 revenue was $448 million. <a href="http://globeinvestor.sympatico.ca/invest/investSQL/sym.company_prof?company_id=160018" target="_hplink">It was, in fact, $448,000, according to publicly listed data</a>. A company spokesperson says the resource firm was in a period of pre-production in 2010, and did not generate revenue. Thus, Henry's compensation of $11.7 million exceeded the company's revenues for the year.</i>

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  • 3: Siegfried Wolf, Co-CEO, Magna $16.5M

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  • 2: Donald Walker, Co-CEO, Magna $16.7M

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Filed by Michael Bolen  |