Franklin, Tenn.-based Community Health Systems has approved $2.06 million in incentives to Chairman and CEO Wayne Smith for the company's 2013 performance, according to a filing with the Securities and Exchange Commission.
CHS' compensation committee laid out the 2013 incentive compensation payouts for Mr. Smith and five other top executives. The incentives were based on several metrics, though a significant weight was given to EBITDA, which is a measure of profitability.
Mr. Smith received the $2.06 million despite only reaching 49 percent of CHS' target goals. Last month, CHS reported that net revenue, total profit and adjusted EBITDA had all fallen in fiscal year 2013, compared with 2012, due to weak inpatient volumes, government probes and other factors.
Larry Cash, president of financial services and CFO of CHS, received $735,000 in bonuses based on the company's 2013 performance. David Miller, president and COO of CHS, earned $446,760. Three of CHS' top division presidents earned more than $1.1 million combined in bonuses.
The bonuses that Mr. Smith, Mr. Cash and other top CHS executives earned in 2013 are down from 2012. Last year, Mr. Smith earned $4.2 million in bonuses and incentives, while Mr. Cash received more than $1.5 million. Those figures declined from 2011.
CHS' compensation committee also ratified several elements of executive compensation for this year. Mr. Smith and Mr. Cash each earned bumps in base salaries to $1.5 million and $800,000 respectively. Top executives can also earn large incentives this year if CHS realizes certain "synergy" targets, based on its acquisition of Naples, Fla.-based Health Management Associates.
Executive pay at CHS has been under fire for the past few years. In 2011, Mr. Smith made $21.6 million in total compensation, which prompted more than 60 percent of shareholders to vote against the hospital chain's executive compensation plan. In 2013, Mr. Smith, Mr. Cash and others received no salary increases or stock options.
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