The MetroHealth System is suspending the executive supplemental bonus program that is at the heart of the public hospital’s dispute with its prior leader, new CEO Airica Steed said Tuesday.
Steed shared the news at a Cuyahoga County Council committee meeting Tuesday afternoon. The system is also conducting a national search for a chief human resources officer to oversee compensation processes, she said.
The hospital system’s board ousted prior CEO Akram Boutros late last year, alleging that he paid himself $1.9 million in unauthorized supplemental bonuses. Boutros, who has repaid the money, maintains the board had given him the authority over bonus payments. He is now suing the board.
Steed said she would not let the turmoil overshadow MetroHealth’s work as the county’s safety-net hospital.
“I promise to you that I will maintain and enhance the level of trust that has been broken,” she told council members, “and also to partner with this council specifically and the county to make our communities better and healthier.”
In opening remarks before Steed spoke, County Council President Pernel Jones said the county and MetroHealth were “inextricably connected.” The county appoints the hospital system’s board, and county taxpayers contribute $32 million to MetroHealth each year through a health and human services property tax levy.
Jones said that the new hospital CEO would have an opportunity to reassure council members that MetroHealth makes good use of public money. Steed said that the hospital system spends levy money only on healthcare for county residents.
Although the hospital has suspended supplemental and one-time bonuses, another compensation system remains in place, Steed said. That system is known within MetroHealth as performance-based variable compensation, or PBVC.
Steed did not characterize PBVC as a bonus. Instead, she described it as an “at-risk” part of an executive’s compensation that is awarded based on achievement of predetermined goals. A new compensation consultant will be examining pay across the hospital, she said.
Council Council Member Michael Gallagher, one of two Republicans on the 11-member body, said the compensation system was “a little confusing.” If anyone should be getting bonuses, it’s the frontline workers, he said.
Steed started work as MetroHealth’s new leader in December of last year. The legal battle between the board and her predecessor has only intensified since then.
Boutros has accused the board of breaching its contract with him and defaming his character. Meanwhile, the board has released an audit by the accounting firm BDO that concluded Boutros withheld information about his bonuses. An attorney for the ex-CEO disputed findings, saying the board had delegated power over salaries and wages to Boutros.
Steed told council members that she wanted to instill a culture in which employees are unafraid to speak up about what superiors have asked them to do.
“Even if that person who’s asking them that question is me,” she said.