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Initiative aims to limit pay for hospital's executives

Union-backed measure would cap compensation at twice the governor's salary

Top executives of El Camino Hospital could see their compensation slashed by tens of thousands of dollars if South Bay voters approve a measure backed by an employees union.

The measure isn't the only effort to restrict compensation for executives at the state's 74 taxpayer-funded health care districts and their hospitals. The Assembly will consider a bill today that would limit lavish payouts to top administrators.

The El Camino initiative, which has received enough signatures to qualify for the ballot, would limit the compensation of executives, managers and administrators at the hospital and the district to twice the annual salary of the governor of California, which is currently $174,000.

The hospital's new CEO, Tomi Ryba, makes about four times the governor's salary. She earns $695,000 a year, but is eligible for a bonus of up to 30 percent more if she meets performance goals. Three other hospital executives earned more than twice the governor's salary in the 2010-11 fiscal year, according to tax filings.

The union representing some of the hospital's lowest-paid workers, the Service Employees International Union United Healthcare Workers West, began the initiative drive earlier this year. The measure qualified for the ballot in April, according to the Santa Clara County Registrar of Voters.

Union members began gathering signatures after the hospital imposed a contract on its members, requiring them to pay more for their health care benefits. Hospital officials said the benefits package is comparable to what other employees at El Camino receive.

Some workers say the hospital executives' compensation comes at union members' expense.

“They chose to cut our benefits out of 'financial responsibility' at the same time that they gave executive raises and executive bonuses,” said Kary Lynch, a psychiatric technician, who has worked for the hospital for more than 30 years.

Officials at El Camino say the union-backed initiative would compromise the district's ability to recruit and retain top managers.

“You really want to remain competitive in the marketplace. Imposing something like this would really limit our ability to get the best talent to lead our organization,” said Chris Ernst, a spokeswoman for El Camino Hospital.

Under state law, the health care district's board now must decide whether to put the measure on the ballot.

“They have two options: Either they can adopt it or say that we don’t agree with it, so we’ll go through the ballot process,” Ernst said. The district board is scheduled to discuss the initiative in June.

Health care districts around the state are facing increased scrutiny for their spending practices. A recent Bay Citizen investigation found that some districts have amassed surpluses of tens of millions of dollars and diverted resources to administrative and overhead costs.

The Assembly is considering a bill today that would prohibit health care districts from giving financial perks to retiring hospital administrators if the same packages are not available to other employees.

Assemblyman Luis A. Alejo, D-Salinas, introduced the legislation after the Salinas Valley Memorial Healthcare System gave its former chief executive a $4.9 million retirement and severance package.

“If generous retirement plans and compensation packages are offered to be able to attract the most talented CEOs and hospital administrators, then why not offer the same compensations to attract the most talented doctors and nurses that can provide the best quality healthcare?” Alejo said in a statement.

Salaries for the state's 10 highest-paid hospital district executives ranged from $1,012,007 to $469,662 in 2010, according to the state controller's office.

The CEO of Palomar Health's Pomerado Hospital near San Diego topped the list, followed closely by the Marin Healthcare District CEO, who made $1,002,268, and the CEO of the Washington Township Health Care District in Fremont, who earned $912,519.

El Camino Hospital officials did not appear on the controller’s top 10 list because El Camino failed to submit executives' salary information to the controller's office. (Look up other special district officials’ compensation here.)

The El Camino Hospital District, which encompasses Mountain View and Los Altos, as well as parts of Palo Alto, Cupertino, Santa Clara and Sunnyvale, receives about $9 million a year in property taxes in addition to about $7 million a year from a 2003 bond measure.

In May 2011, a civil grand jury report criticized the district for "a lack of transparency" in how it spends taxpayer dollars. The Santa Clara County Local Agency Formation Commission, which oversees special districts in the area, will consider the district's business practices at a public hearing [PDF] May 30.

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