FREMONT -- The CEO of the Washington Township Health Care District, who ranks among the highest-paid government employees in the state, is underpaid at $813,916, a consultant told the public agency's board of directors Wednesday.
CEO Nancy Farber's total cash compensation this year isn't competitive when compared to her national and local peer group, and falls $119,000 short of the district's philosophy to pay the chief executive in the 65th percentile, said consultant Eric Reehl, with Minneapolis-based Integrated Healthcare Strategies.
Further, Reehl said, CEO base pay is expected to rise 3 percent in 2014, as it did in 2013, so the gap will only widen if directors do nothing.
The directors, who oversee operation of Washington Hospital, heard similar reports from Reehl in 2008, 2009, 2010 and 2011, and each year they took action to increase Farber's base pay by 3 percent or more and award her a bonus.
In 2011, Farber was the second-highest paid government employee in the state with $936,348 in wages, according to a survey by the state controller's office of cities, counties, special districts, state employees, California State University, legislators and California community colleges. That total did not include Farber's deferred compensation, retirement and cost for health benefits, which put her total compensation past $1.15 million that year, according to an IRS filing for the Washington Hospital Healthcare Foundation.
Last December, Farber's growth in pay slowed when she opted to include herself in a management pay freeze, leaving her base salary of $651,133 unchanged when the board extended her contract through Oct. 31, 2016. At the time, Farber was overseeing a 13 percent workforce reduction that eliminated 200 mostly vacant jobs after decreased operating profits. On Feb. 13, the board awarded her a 25 percent bonus worth $162,782, less than the 40 percent she was eligible for.
Reehl -- who will receive $5,000 for this year's CEO pay analysis -- said Farber's cash pay was compared to a blended national and California peer group consisting of private and public health care systems, and was adjusted for higher cost of living in Fremont. He used net revenue as the basis for comparison, comparing Washington Township with $467 million in net revenue to systems with as little as $100 million or as much as $1 billion in net revenue, records show.
"WHHS should ensure that its compensation program for the CEO reward good performance based competitively with its peers, and treats executives equitably," Reehl said.
None of the board members asked Reehl any questions after his 10 minute presentation.
Dr. William Nicholson, board president, said only, "We will use this information in determining our CEO compensation. Thank you very much."
Ashly McGlone covers the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/AshlyReports.