CHOP’s board chair defends Madeline Bell’s $7.7 million pay package in message to employees

The chair of the Children’s Hospital of Philadelphia board on Tuesday posted a message online to employees defending CEO Madeline Bell’s $7.7 million pay package in 2021. The post was in response to an Inquirer article published last week highlighting how she was the highest-paid CEO that year at the region’s nonprofit health systems.

The message from Chris Gheysens, who leads the CHOP board’s executive compensation and human capital committees, explained that the board “holds one person — Madeline — responsible” for leading two hospitals; local, regional, national and global affiliations; a network of primary, specialty and urgent care centers; a research institute; a charitable foundation; and innovative community programs.

“Madeline is an advocate for CHOP and is a nationally recognized visionary leader for children’s health care,” he wrote. “She takes on tough challenges, leads the organization through challenging times, and never forgets that CHOP is about making a difference in the lives of individual children and their families.”

On Monday, Bell had written a note at the bottom of a separate message to staff describing The Inquirer’s article as “damaging to CHOP.”

“The reason it was considered damaging is because of how the headline and the cartoon positioned our community impact,” CHOP spokesperson Lindsay Torriero said in a phone interview Tuesday. She said that free and discounted care is a small part of what CHOP does for the community.

The Inquirer’s headline online said “CHOP paid its CEO a record $7.7 million in 2021, more than the hospital spent on charity care in three years.” Separately, a cartoon ran in the opinion section of Sunday’s print edition. The cartoon, by John Cole, suggested that executive compensation was taking money away from children.

In a review of CHOP’s federally filed tax forms, The Inquirer found that Bell’s compensation in 2021 was more than the nonprofit hospital spent on free and discounted services to financially needy patients, or charity care, over the three previous years combined. CHOP spent $7 million on charity care over those years, according its tax forms.

By comparison, St. Christopher’s Hospital for Children, a much smaller safety net hospital in North Philadelphia, spent $16 million on free or discounted care during roughly the same period, according to its 990 tax returns for tax-exempt organizations.

In Tuesday’s note to staff, CHOP preferred to highlight a much larger figure of $470 million for all types of what the IRS refers to as community benefits in the year ended June 30, 2022. The larger figure cited by Gheysens includes $204 million for CHOP’s reported losses on Medicaid — an issue that for-profit hospitals also deal with — and $145 million in unreimbursed research expenses.

Academic researchers and advocates say it is most important to focus on the amounts nonprofit hospitals spend on free and discounted care, because many of the other community benefit expenditures, such as education and community health events, benefit the hospitals.

» READ MORE: Do Philly-area hospitals give enough charity care? There’s no simple answer.

In Tuesday’s internal note, Gheysens stressed that Bell’s $5.6 million bonus paid in 2021, which was part of the $7.7 million, was in part for an incentive plan that covered three years.

The bonus also contained a one-year component, but CHOP had previously declined to give The Inquirer a breakdown of the two awards.

CHOP told The Inquirer for its report that it uses compensation consultants to benchmark Bell’s pay against 44 peer institutions, but did not identify them. The Inquirer had examined CEO pay at nine other large children’s health systems nationwide over the five years through 2021, and found no pay packages that came close.

“I am comfortable that CHOP’s executive compensation is reasonable, appropriate and competitive to attract and retain the best talent,” Gheysens said in the note to employees.

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