Valley Children’s Healthcare Board of Trustees Chairman Michael Hanson and the rest of the board sent a letter to the Fresno City Council Wednesday morning defending the compensation packages given out to CEO Todd Suntrapak and the entire executive team.
The letter was mailed to the council just hours before Councilman Garry Bredefeld was scheduled for a debate with hospital board member and Fresno County District Attorney Lisa Smittcamp on KMJ.
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The backstory: Bredefeld and Councilman Miguel Arias criticized the hospital last week for the high compensation packages, with Bredefeld calling it “an absolute disgrace.”
- The duo also called for a state investigation into the hospital, saying they will formally request one Attorney General Rob Bonta.
- They also said the legislature should request an audit from the California State Auditor.
Driving the news: Hanson, the controversial former superintendent of Fresno Unified School District, penned a letter to the city along with his colleagues on the Healthcare Board of Trustees.
- The healthcare board determines the compensation packages for Suntrapak and the executives.
- Along with Hanson, the other board members are Jose Elgorriaga, Emily Rooney, former ABC 30 general manager Dan Adams, Jeannine Grech, Susan Hensley, Brenden Smith and former Fresno County Superintendent of Schools Jim Yovino.
- Suntrapak is also listed as a member of the healthcare board.
The board’s response: Hanson writes that the letter – which was obtained by The Sun – is “in response to unfounded criticisms based on recent media coverage.”
- “The criticism of our Healthcare Board’s decision to increase our CEO’s salary and benefits is based on flawed, erroneous assumptions about executive compensation and other financial matters concerning our hospital,” the letter reads.
- Hanson writes that the assumptions about compensation are based on “at best, an ill-informed reading of our IRS Form 990 from 2021.”
- The hospital, on the advice of its accounting firm Moss Adams LLP, shifted performance bonus for director level and above by the end of the calendar year in which it was earned. That resulted in performance bonuses being handed out in a single filing year, one month earlier.
- “The resulting compensation figure in our Form 990 for 2021, therefore, does not in any way accurately represent a single year’s earnings for our CEO or other top executives,” the letter reads. “In fact, the CEO’s annual salary since July of 2020 is $1,711,341, which is in line with other health system CEOs with similar levels of responsibility; the remainder of his compensation largely consists of bonuses based on meeting significant performance goals – again, the norm for health system CEOs.”
- Hanson added that compensation for Suntrapak and other top executives is determined on a thorough review and recommendations from multiple, independent executive compensation consultants.
- The $5 million home loan – which Suntrapak used to purchase a $6.5 million house in Carmel-by-the-Sea in 2022 – is “not at all unusual as a retention tool,” the letter reads. If Suntrapak will have to pay it back if he voluntarily leaves Valley Children’s within 10 years of receiving it.
- Hanson said the hospital was able to provide “an appropriate level of compensation for our leaders” because of strong investment gains and financial stewardship.
- “We are fortunate to have leaders of the caliber of our CEO Todd Suntrapak at a time when there is intense nationwide competition for them, and to have the kind of staff that provides the level of care our community has come to expect,” Hanson wrote. “We are proud of the decisions we have made and proud of what we do for our community.”
A message to the staff: Following Hanson’s letter, Valley Children’s Senior Vice President and Chief People Officer Kelly Beall sent an email to the hospital’s staff on Wednesday morning, which was obtained by The Sun.
- Beall’s letter starts by saying that the hospital has attempted to correct the record with accurate information, saying media stories “contain misinterpreted information that is presented out of context.”
- The Sun reached out to Valley Children’s on March 14 before publishing the first story on the hospital and has has not received a response.
- Beall highlights recent decisions to enhance staff compensation and benefits, including boosting salaries and benefits by 11 percent over the last three years, increasing standby call rates by 60 percent, crating Charlie’s Clinic for primary care services for employees and their families, increasing education reimbursement to the IRS maximum and adding a student loan repayment program to support your professional development and financial wellness.
- Valley Children’s is also increasing its minimum base pay rate from $17 to $21 and implementing base pay increases of $4 per hour for all staff on April 14, in response to Senate Bill 525, which requires a minimum wage of $21 for health care workers by June 1.
- Beall also said the hospital is evaluating a flexible shift model that includes 10 and 12-hour shifts to better support patients and staff.
