By Sue Tiffin
Published Feb. 13 2018
A new executive compensation plan for four positions in the Haliburton Highlands Health Services received initial draft approval from the Ministry of Health and Long Term Care and was made available online on Feb. 5 for public review.
The positions identified in the legislation are the chief executive officer and executive team positions reporting to the CEO including the vice-president clinical services-chief nursing executive vice-president community services and vice-president support services-CFO – all positions that receive compensation of $100000 or more in a calendar year.
New legislation that came into effect in September 2016 requiring public sector organizations including hospitals universities colleges and government agencies to file the plan with the Ontario government ended a long-standing executive compensation freeze in effect since 2010 through the Broader Public Sector Accountability Act.
According to the approved draft it enabled government controls on compensation expenses perquisites business documents and procurement.
“The proposed program demonstrates accountability transparency and consistency in compensation for executives within HHHS while supporting a fair and balanced approach to public sector compensation” reads a cover letter to the 13-page report available on the HHHS website. “The proposed program includes a compensation philosophy salary and performance-related pay caps comparative analysis details and other elements of compensation.”
The HHHS board of directors worked on the proposed program over the past year. “It was a fairly intense effort” said Dave Bonham chair of the HHHS board.
The board sought external third-party assistance in the form of a consultant at a rate of $15000 which Bonham said was “a real bargain” because of a group rate while the consultant worked with other hospitals and health-care agencies going through the same process. The consultant helped the board follow the rules of the legislation accordingly and assured the board could meet the one-year time frame despite numerous additional steps put in place by the government throughout the course of the process.
Eleven organizations were identified as being comparators for the HHHS designated executive and designated executive class positions based on their status as an Ontario community or teaching hospital and are similar in terms of size.
They included Arnprior Regional Health Kirkland and District Hospital the South Bruce Grey Health Centre and Tillsonburg District Memorial Hospital. According to the draft report HHHS invested 2.2 per cent of the total operating budget in executive compensation in 2016/17 which is considered to be significantly less than the compared organizations.
“It was very difficult because HHHS is more than just a hospital” said Bonham.
Despite the process both Bonham and CEO Carolyn Plummer who was not involved in discussions when her own salary was involved said the end result would be beneficial.
“It brings uniformity to the system when organizations are competing for CEOs salaries can be bid up” said Bonham. “This prevents that kind of thing from happening especially with HHHS being a very small organization. We’re subject to large organizations bidding prices out of our range … this brings uniformity to the process.”
According to the draft report HHHS has experienced a one hundred per cent turnover rate of the current designated executive positions with one position taking 13 months to fill.
“From my perspective even though there’s still a lot of restrictions having at least some ability to gradually give a little bit of an increase to the people in these positions … I know for the people reporting to me it’s important for me to be able to keep them here because I rely heavily on them” said Plummer. “It’s also important for me to be able to recruit the best possible people that we can into those roles. Being able to pay a decent amount of salary to people coming into that level of position is important for us to be able to attract the right kind of people to the job so for me it puts us in a better position to be able to do that then we were when we were in the freeze in 2010.”
“Executive compensation salaries have been frozen since 2010 under the same legislation so this new regulation or new framework they issued is a way of dealing with unfreezing but still placing some controls over how much of the public sector dollars are spent in that regard thus the complicated process” said Carolyn Plummer.
Feedback on the report is welcome until March 7 2018 and will be kept confidential.
“The board is very conscious about the fact that HHHS is a public organization owned by the community and it needs to be transparent” said Bonham.