Franklin, Tenn.-based Community Health Systems Chairman of the Board and CEO Wayne T. Smith's total compensation was nearly $5 million in 2017. That's 80 times as much as the company's median employee, according to a recent Securities and Exchange Commission filing.
The median compensation of CHS employees was $61,597 in 2017. To calculate the annual total compensation of the median employee, CHS used the company's employee population on Dec. 31, 2017, which was 95,000.
Mr. Smith's base salary, which has remained the same since 2015, was $1.6 million in 2017. His performance incentive plan compensation climbed nearly 27 percent year over year to $812,000 in 2017. The cash bonus is based on "corporate performance compared to multiple pre-established short-term performance goals," according to the SEC filing.
Mr. Smith saw his performance bonus grow as CHS continued to face financial challenges. The company ended the fourth quarter of 2017 with a net loss of $2 billion on revenues of $3.1 billion. That's compared to the same period of 2016, when CHS recorded a net loss of $220 million on revenues of $4.5 billion.
In assembling compensation packages for top executives last year, CHS said it examined data from several other companies, including Nashville, Tenn.-based HCA Healthcare; Brentwood, Tenn.-based LifePoint Health; and Dallas-based Tenet Healthcare.
Beginning this year, companies are publicly disclosing their CEO to median employee pay ratio to comply with financial reforms under the Dodd-Frank Act.
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