Nonprofit health systems executives get big pay days for retirement

http://www.jsonline.com/business/nonprofit-health-systems-executives-get-big-pay-days-for-retirement-b99124607z1-229413321.html

Chief executive officers and other top executives at nonprofit health systems don't get stock options or grants — the increasingly well-traveled road to riches in the for-profit corporate world. But they generally get retirement packages that can result in large payouts.

Ford Titus, the former chief executive of ProHealth Care, received $4.5 million when he retired in 2010. William Petasnick, the former chief executive of Froedtert Health, received $4.9 million in 2012.

The retirement plans — the most common is known as a SERP, for Supplemental Employment Retirement Plan — provide top executives with pensions more in line with their salaries and bonuses.

Internal Revenue Service regulations cap traditional, or defined-benefit, pensions at $255,000 this year. The supplemental plans bring the executives' pensions closer to what they would receive if the cap didn't exist.

The plans can help retain key executives, because the potential payout is forfeited if an executive leaves before the plans vest...

When Ed Howe, Aurora's chief executive, retired in 2007, his retirement package was not publicly disclosed.

In contrast, when Donald Nestor, Aurora's chief operating officer, retired in January 2009, the health system disclosed that he was paid $8.2 million that year. An estimated $6.4 million of that came from his retirement plan. The balance came from his continuing work as a consultant and other compensation.

He was paid an additional $5.3 million in 2010 and then $1.6 million in 2011 as a "consultant/retiree."

In all, Nestor was paid a bit more than $15 million after retiring — and he was the No. 2 executive.