IRS forms show Highmark officials reaped $1 million-plus raises last year

Highmark Health CEO David Holmberg’s total pay climbed to $7.49 million last year — up about 35% from the year before, for a nearly $2 million boost in compensation, federal tax forms filed Monday show.

The nonprofit health system’s leader joined senior executives across Highmark Health and Allegheny Health Network in the second straight year of pocketing hefty pay increases for meeting bonus goals, according to the system’s latest Form 990 documents filed with the Internal Revenue Service.

The next-highest paid executive in the system’s last fiscal year was Karen Hanlon, chief operating officer, who made $2.82 million last year, up from $1.77 million in 2017 and $1.1 million in 2016.

Thomas VanKirk, chief legal officer and board secretary, made $2.47 million in 2018, up from $1.94 million in 2017 and $967,000 in 2016.

Cynthia Hundorfean, CEO of Allegheny Health Network, made $2.44 million last year, up from $1.75 million in 2017.

The Board of Directors approves compensation for Holmberg, and a personnel and compensation committee sets the pay for all Highmark Health and Allegheny Health Network senior executives, Highmark officials said. Bonus pay gets decided based on a variety of factors, including individual job impact, experience, skills and achievement of financial and strategic goals.

In 2017, Holmberg made $5.55 million — more than double what the nonprofit health care system chief executive took home in 2016.

The integrated financing and delivery system — which controls medical provider as well as insurance arms — has been operating in the black for more than two years.

Highmark Health’s net assets now top $7.4 billion.

The trend toward higher total compensation comes as Highmark and its Pittsburgh-based rival, UPMC, boast consecutive years of record growth and move on ambitious building plans across Pennsylvania and into neighboring states. Each entity reported about $18 billion in total revenue last year.

UPMC President and CEO Jeffrey Romoff received $8.54 million in compensation last year, according to records filed in May by UPMC, whose fiscal year is on a different schedule than Highmark’s.

Romoff’s total pay from July 1, 2017, through the end of June 2018 amounted to $2.42 million more than the previous year — for a nearly 40% year-over-year increase from his 2016-17 pay of $6.12 million.

Holmberg made about $3.8 million in 2015, his first full year taking over Highmark Health, the parent company that oversees the Highmark Inc. insurance arm as well as Allegheny Health Network’s doctors and hospitals, including Allegheny Valley Hospital in Harrison.

Last year, about 2,100 of Allegheny Health Network’s more than 24,000 full- and part-time employees, or nearly 9%, made more than $100,000 a year, the IRS forms show.