20 hours Ago By Jeff Kiger
ROCHESTER — While most of Mayo Clinic’s staff received 6% raises in 2023, compensation for the nonprofit’s top executives grew by much higher rates — between 16% and 27% — topped by CEO Dr. Gianrico Farrugia, who earned $4.3 million.
That was a 15.8% raise for Farrugia, who was paid $3.72 million in 2022.
A year before that, Farrugia's raise was 6.7%. In just two years, his compensation has increased by more than $800,000.
The salary information is revealed in an annual report, called a 990 form, that Mayo Clinic is required to submit to the IRS. The public document, filed last fall, lists a variety of financial information about nonprofit organizations, including amounts paid to top staff. The percentage increase calculations are based on the full salary figures.
According to the most recent 990, covering 2023, the next two highest paid executives after Farrugia — Mayo Clinic Florida CEO Dr. Kent Thielen and Mayo Clinic Arizona CEO Dr. Richard Gray — received even larger raises, in percentage terms, than their boss did.
Thielen's compensation jumped by 24.2%, to $2.59 million.
That followed a 16.6% jump in 2021, which also means his pay has increased by slightly more than $800,000 in two years.Gray, meanwhile, received a 24% pay raise in 2023 and a 26% pay raise the year before.
His compensation grew in two years from $1.78 million to $2.57 million.
Next on the list: Chief Administrative Officer Christina Zorn, who trailed the trio of CEOs with compensation of $1.93 million in 2023. That represented a 20% increase from the year before.
In 2022, Zorn's wages spiked by 48.3%. She appears poised to soon double her 2021 pay of $1.
08 million.Dr. Amy Williams, who was the sixth highest paid executive in 2023, saw her compensation grow by 27.
5%, to $1.87 million. That was a $400,000 pay raise from her 2022 salary of $1.
46 million. Williams is Mayo Clinic’s executive dean of the practice, a position that she has held since 2020.Overall, 33 Mayo Clinic executives were paid an annual compensation of more than $1 million in 2023, which is slightly up from 31 in 2022.
A year before that, in 2021, Mayo Clinic had 22 executives receive paychecks of $1 million or more.Farrugia, Thielen and Gray were the only three executives paid more than $2 million in 2023.Mayo Clinic defended the pay practices — and the disparity in the percentage of pay increases for executives, compared to allied health staff — in a statement.
Andrea Kalmanovitz, Mayo Clinic's director of communications/media relations, responded to the Post Bulletin's questions by email.“Pay increases for the most highly compensated employees reflected in the Form 990 are due to the Mayo Clinic salary philosophy for administrative physicians and executives, in which they are initially paid below the market average and, over several years, are increased to a level within the mid-range of the market,” Kalmanovitz wrote.“Starting executive pay below the market average, and then catching up over time, is why the annual salary increase in one year may appear higher than other staff.
Executive compensation is set by an independent committee of Mayo Clinic’s Board of Trustees which reviews salaries at comparable, nationally ranked healthcare organizations and establishes Mayo Clinic salaries within the mid-range.”Tiffany Lawler, a registered nurse who leads the Med City Nursing Alliance that aims to independently unionize the nurses who work at Mayo Clinic's Rochester campus, said she passionately believes that the top executives should not be seeing increases of 16% or 27%, when many nurses are struggling to get by following a 4% raise in 2024."The wage disparity within Mayo is abhorrent," she wrote.
"Many nurses have had to refinance their homes, accumulate credit card debt, sacrifice where they send their children to school, and the list goes on. We (allied health staff) are not financially stable in this community." Lawler pointed out the SEIU union is fighting for a $20 minimum wage per hour for its members who work at Mayo Clinic.
"Our CEO makes in just one week what these folks make in an entire year. How does he (or the other 33 employees who make more than one million dollars annually) sleep at night?," she wrote. "I hope that I am alive to see the day that Mayo becomes a “for profit” tax paying, contributing member of society.
.. In 2028, we will have a new CEO and a new POTUS, I am counting on their successors to right the many wrongs that have been accepted for far too long.
"Awarding steep pay increases to top executives is not a new phenomenon.When Dr. John Noseworthy became CEO in 2009, his compensation was $727,294, which represented about a $180,000 pay increase for Noseworthy from the year before.
When Noseworthy stepped down eight years later, in 2018, his salary had increased to $3.45 million — an increase of 374% from his first paycheck as CEO.Farrugia started as CEO in 2018 and was paid $1.
91 million at the time. By 2023, according to the 990, his pay had more than doubled.Yet, compared to top executives at some of Mayo's competitors — many of the largest and top-rated hospital systems in the U.
S. — Mayo's execs are paid less. See this list: Kaiser Permanente CEO Greg A.
Adams - $17,268,06 Cleveland Clinic CEO Dr. Tomislav Mihaljevic - $6.9 million.
Mount Sinai Hospital CEO Kenneth Davis - $6.8 million. Massachusetts General Brigham CEO Anne Klibanski - $6 million.
Johns Hopkins Hospital CEO Dr. Redonda G Miller - $2 million.“Mayo Clinic is the global leader in healthcare transformation, with a three-shield focus on patient care, research and education.
Mayo Clinic’s approach to compensation reinforces those priorities and allows the organization to attract and retain top talent,” added Kalmanovitz.Compared with nearby health systems, the world-renowned Mayo Clinic does pay its top leader more.In Minnesota, Alliana Health System CEO Lisa Shannon earned $3 million in 2023, which is an 11% increase from $2.
7 million in 2022. Bill Gassen, CEO of South Dakota-based Sanford Health, made $2.8 million in 2023.
https://infogram.com/mayo-clinic-2022-pay-increase-comparison-1h1749wdmw8vq2zA 2024 research study, “Determinants of Nonprofit Hospital CEO Compensation," tracked the dramatic increase in CEO salaries. It found CEO compensation rose 30% between 2012 and 2019.
Mayo Clinic CEO pay grew by 58.5% over that time frame.“Not only is CEO compensation growing, but it is growing disproportionately relative to other healthcare workers; the wage gap between CEOs and mean salary of a registered nurse grew from 23:1 in 2005 to 44:1 in 2015,” according to the study,Derek Jenkins, a postdoctoral scholar in health economics at Rice University's Baker Institute for Public Policy, said the fast growth of compensation for CEOs and other executives at nonprofit hospitals is a complex issue, particularly when rising health care costs are factored in.
“CEOs are being paid a lot ...
the numbers are huge,” he said in an interview with the Post Bulletin. “I understand the frustration.”The study found that increases in operating revenue did not impact CEO pay much as poor performing hospitals still increase their leaders' compensation.
However, physical growth of the number of beds or facilities appears to spur higher pay for CEOs.“Rising executive compensation is contributing to the affordability crisis in American healthcare and should remain in the forefront of the minds of policy makers,” concluded the study.The paper suggested linking executives' compensation to the amount of community benefit that nonprofit hospitals are required to provide and to the amounts of charity care funding offered to patients.
“The main message is less about how much CEOs are paid, but more about what are they being rewarded for? That’s one piece of the puzzle,” said Jenkins.Nonprofit hospital executive salaries often are the subject of criticism. In 2024, the Minnesota Nurses Association launched a “Healing Greed Agenda” at the Minnesota Legislature that includes legislation to cap nonprofit hospital executive pay at $450,000 — equal to the pay of the U.
S. president.“We think that it's time that not just nurses and health care workers, but Minnesotans have a real conversation around the benefits that we give to tax-exempt hospital corporations,” stated MNA President and Essentia nurse Chris Rubesch in 2024.
“I think in exchange for that tax forbearance, we should expect a certain return on what we're giving them. And I don't think that returning those excess profits to hospital upper management and CEOs is the deal that Minnesotans have agreed to.”In March, medical residents and attending physicians picketed Mass General Brigham hospitals in Massachusetts to support legislation aimed at capping hospital CEOs’ compensation in the state.
Mass General Brigham CEO Anne Klibanski’s compensation was more than $6 million in 2022.The legislation would limit the total annual compensation of hospital CEOs to no more than 50 times the pay of their lowest-paid worker.The subject of pay for hospital CEOs has attracted bipartisan interest, with both Vermont Sen.
Bernie Sanders and Iowa Sen. Chuck Grassley each repeatedly questioning the salaries of nonprofit CEOs when discussing federal legislation.Some Mayo Clinic leaders do receive payments beyond standard compensation.
Mayo Clinic’s official position is that it does not pay incentives or bonuses to its employees like other hospitals do.However, the 2023 990 report does show that Mayo Clinic paid $759,770 in "Bonus & Incentive Compensation" to Chief Investment Officer and Treasurer Paul A. Gorman as part of his $1.
88 million total compensation for 2023. Mayo Clinic did not respond to questions about the nature of Gorman’s "Bonus & Incentive Compensation.” In past years, Mayo Clinic has explained that staff in Treasury Services “receive salary supplements that we are required to report.
”“In conjunction with a separation agreement,” Dr. Gustav Anton Decker, who served as president of Mayo Clinic International from 2019-2023, was paid a total of $906,157 in two payments — $453,078 in 2023 and $453,079 in 2024. Mayo Clinic did not answer if the $453,078 payment was included as part of his $1.
58 million compensation for 2023.Dr. Peter A.
Noseworthy was provided payments "for tuition related to his job responsibilities, similar to other non listed employees," according to the 2023 990 documents. Mayo Clinic did not answer how much tuition was paid to Noseworthy in 2023 or if it was included in Noseworthy’s reported $996,438 compensation.In accordance with the royalty sharing policy, Mayo Clinic reported that Dr.
Sean C. Dowdy, Abimbola O. Famuyide, Dr.
Michael L. Kendrick, Dr. Peter Noseworthy, Dr.
Charanjit Rihal, Dr.Vijay Shah and Dr. Robert J.
Spinner were paid for royalties, "including instances where such royalties are in the form of equity-based instruments such as stock, warrants, or partnership interests" in 2023. Mayo Clinic did not answer how much was paid in cash or equity-based instruments to these individuals for this compensation arrangement.Mayo Clinic reported paying costs for spouses of trustees and ex-officios to travel to "board meetings and for other business related purposes" for Jay Alix, Jennifer P.
Arnett, Katherine Baicker, Douglas M. Baker Jr., Dr.
Matthew R. Callstrom, Abimbola O. Famuyide, Michael K.
Powell, Donald M. Remy, Robin R. Roberts, Dr.
Randolph C. Steer, Dennis E. Dahlen, Dr.
Gianrico Farrugia, Dr. Richard J. Gray, Tina E.
Holmes, Joshua B. Murphy, Dr. Kent R.
Thielen and Christina K. Zorn. Mayo Clinic did not respond to a question about the total of the spousal travel costs for these individuals in 2023.
Kalmanovitz stressed that as a world-class institution, Mayo Clinic does its best to take care of all of its employees.“Mayo Clinic leaders recognize that our staff are the reason Mayo Clinic is the global leader in healthcare, and we remain committed to supporting them, their families and careers. To maintain this category of one care, Mayo Clinic invests in staff through competitive benefits offerings, including a pension and other retirement savings offerings, professional development and education opportunities to help staff grow their careers, and salary increases over the past 10 years that have outpaced the Consumer Price Index,” she wrote.
“Mayo Clinic remains committed to investing in staff and creating a supportive work environment where everyone can thrive."]]>.
