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Report: UPMC CEO Romoff raked in $6.4 million in total compensation

| Friday, May 15, 2015, 6:03 p.m.
James Knox | Tribune-Review
UPMC CEO Jeffrey Romoff testifies before the House Insurance Committee in the Gold Room at the Allegheny County Courthouse on Thursday, Aug. 25, 2011.

UPMC's Jeffrey Romoff banked total compensation of $6.4 million two years ago, ranking the chief executive's pay among the nation's highest for nonprofit health leaders.

The 69-year-old Romoff was one of 31 employees of Western Pennsylvania's largest integrated health system to be paid more than $1 million in 2013, according to UPMC's latest tax documents, which were made public Friday.

Romoff's 2013 pay, which included a base salary of nearly $1 million plus $5 million in incentives and deferred income, was down 3 percent from the previous year but well above the median compensation for a nonprofit hospital CEO.

Chief executives of nonprofit integrated health systems had median cash pay — comprised of salary and bonuses — last year of $1.2 million, according to a survey by the Hay Group, a Philadelphia consulting firm. A 2013 study by Harvard University found that CEOs of large urban teaching hospitals such as UPMC had a median salary of $1.7 million.

Workers trying to unionize UPMC criticized Romoff's pay.

“With so many UPMC workers' families struggling to get by, it's hard to hear the news that Mr. Romoff makes more in a day and a half than I do in one year,” said Leslie Poston, a unit secretary at UPMC Presbyterian in Oakland, who said her take-home pay after taxes is $16,900 per year. “Lots of people in Pittsburgh have trouble understanding how a charity can keep its workers in poverty, deny care to patients and still pay the CEO $6.4 million.”

Poston is a proponent of SEIU Healthcare Pennsylvania, a union that has been trying to organize workers at UPMC.

UPMC spokeswoman Susan Manko wrote in an email that compensation for the company's executives is tied to performance that is based on “clearly defined goals, including quality of care, community benefit, financial measures and other key factors.” Pay takes into consideration what other industry executives are making, she noted.

The Hay Group survey said nonprofit health system CEOs are being paid more because the networks they run are becoming larger and more complex and increasingly are adding health insurance arms.

“For hospitals with an insurance plan, for example, there's an acknowledgment that it's a different business line that creates a more complex organization,” said Jim Otto, senior principal at the Hay Group. “The role has become much more complicated.”

UPMC, the state's largest private employer, owns the region's second-largest health insurance company, operates 20 hospitals and employs more than 3,500 doctors. UPMC Health Plan has 2.6 million members.

It is financially successful. In fiscal year 2014, UPMC earned $190 million from operations on total revenue of $11.4 billion. Its net income was $463 million.

UPMC's chief rival is Highmark Health, which owns the state's biggest health insurer, Highmark Inc., and Pittsburgh's second-largest hospital system, Allegheny Health Network. Highmark paid its former CEO William Winkenwerder $4.5 million in 2013. He left the company last year.

The compensation placed Romoff in the vicinity of pay for the nation's largest for-profit hospital companies.

Wayne Smith, CEO of Community Health Systems, which owns nearly 200 hospitals nationwide, was paid $8.8 million in 2013. R. Milton Johnson, CEO of HCA Holdings Inc., which runs more than 150 hospitals across the United States, received $7.7 million two years ago.

The federal government requires tax-exempt organizations such as UPMC to file annual public tax returns.

UPMC's Internal Revenue Service Form 990 filings disclosed Friday cover the financial year that ran from July 1, 2013, to June 30, 2014. Compensation figures for top-paid employees are for the 2013 calendar year.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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