Erlanger President and CEO Kevin Spiegel said Wednesday night that the hospital plans to proceed with $1.7 million in manager bonuses in two steps. Current participants in the incentive program will receive 50 percent of the approved 2014 performance plan this month. The remaining 50 percent will be paid to the management group in July 2015.
At the same time, Mr. Spiegel said he is considering an employee compensation program. He said, "One idea was to include associates in a performance-based incentive plan which would recognize the contributions of the entire workforce. I think this idea is great and commit to you that we will review a new associate compensation program, taking into consideration the SEALs’ suggestions. We will thoughtfully consider all alternatives.
"My plans are to discuss these options and make a recommendation to our board at January’s Board meeting. This recommendation will make associates eligible for the Fiscal Year 2015 plan (July 1, 2014–June 30, 2015)."
Here is his full report to Erlanger associates:
Message from the President
I wanted to reach out to you personally and wish you and your family, Happy Holidays and Merry Christmas. As we approach the New Year I wanted to apprise you of some new and exciting opportunities on the horizon for both the Erlanger Health System and our associates.
Extraordinary work has been done by the entire Erlanger team during the past 18 months. Wall Street acknowledged that Erlanger has achieved one of the greatest turnarounds in the country, with outstanding financial improvement and unprecedented volume growth. Our recent bond offering on Wall Street provided $71 million of new monies to invest in our health system and the patients we serve. This is a significant investment opportunity for our region and we know that Erlanger associates are proud of what we invest back into our community. We are expanding Erlanger East Hospital significantly by building new patient rooms, new surgical suites and services, enhanced cardiac services, expanded cancer services and enhanced services at the Comprehensive Breast Center. At the University Campus we are upgrading our operating rooms and expanding services that will focus on advanced technology for vascular surgery, cardiac surgery and our orthopedic center of excellence.
I have introduced our plans for rebuilding the academic Children’s Hospital to the community and invited them and Erlanger associates to be part of those exciting plans. Some of the funds from Wall Street will be allocated to Phase I of this project. Phase I is a new children’s and women’s ambulatory care building on East Third Street, which will offer state-of-the-art primary and specialty services. This project will require approximately 60% community support to complete. Our new investment funds will also enable us to convert the Massoud Building into a world-class neurosciences center.
Last week I met with the SEALs who, as most of you know, represent dedicated and passionate associates from all our campuses and departments. During this meeting, there were constructive exchanges and ideas about moving Erlanger forward.
Collectively, the SEALs had several suggestions about an employee compensation program. One idea was to include associates in a performance based incentive plan which would recognize the contributions of the entire workforce. I think this idea is great and commit to you that we will review a new associate compensation program, taking into consideration the SEALs’ suggestions. We will thoughtfully consider all alternatives. My plans are to discuss these options and make a recommendation to our board at January’s Board meeting. This recommendation will make associates eligible for the Fiscal Year 2015 plan (July 1, 2014 – June 30, 2015).
Last night, our board met with outside legal counsel regarding approval of the performance payout to managers. The law firm, Spears, Moore, Rebman and Williams, informed our board that the approval process for the performance plan was appropriate and the action taken by our board was also appropriate. Therefore, I am moving forward in the following way. Current participants in the incentive program will receive 50% of the approved 2014 performance plan this month. The remaining 50% will be paid to the management group in July 2015, when our eligible nurses receive the second phase of their market adjustment.
All eligible regular associates will receive a 2% pay increase the first full pay period in January. Eligible nursing associates received Phase 1 of a two-step raise in July 2014 and will receive Phase 2 in July 2015. Those nurses are not eligible for the January raise since the two step raise had already been initiated. With these raises, during calendar years 2014 and 2015, Erlanger has allocated approximately $15 million toward employee raises. This is the highest amount dedicated to associate raises in years. You performed, you deserve the recognition.
On another note, I think it’s important you know that Governor Haslam’s announcement to advance an innovative insurance plan which covers more Tennesseans is expected to bring more financial stability to essential safety net hospitals like Erlanger.
I thank each of you for your service and commitment, and look forward to our entire team achieving even greater success in 2015. You are a dedicated and loyal team, providing world-class healthcare to those we serve. We are off to a great start the first six months of this fiscal year and I am confident, as a team, we will continue to exceed expectations – and that of the community - in every way.
Happy Holidays.