HCA Healthcare
By Josh Romo and Rosanna Landis Weaver
Annual Meeting: April 28
HCA Healthcare CEO Samuel N. Hazen’s total reported compensation rose to $30,397,771 in 2020, a more than 13% increase from 2019 when he took over as CEO.
The gap between the HCA’s median employee and its CEO pay has increased consecutively every year since at least 2018. In 2018, HCA’s CEO pay ratio was 338:1, more than three times higher than the 107:1 ratio for CEOs across the healthcare industry for that year. Since Hazen was hired, it has risen to 556:1 in 2020, exemplifying the widening CEO pay gap.
As I’ve written about recently, the COVID-19 pandemic has challenged many companies. As a result, shareholders are looking with increased scrutiny at pay decisions made for executives. At HCA, Hazen was one of four executives in 2020 that, despite accepting COVID-related reductions in base salary, ended with higher total compensation than the previous year. Notable for Hazen is a more than $12 million change in pension value and non-qualified deferred compensation earnings.
HCA is also facing a vote no campaign led by the International Brotherhood of Teamsters regarding the metrics used to calculate incentive pay for its executives in 2020. In a letter filed at the SEC, the Teamsters note:
“HCA’s ‘Patient Experience,’ arguably the most important metric for a hospital chain, came in well below target in 2020 and far below 2019 levels; nevertheless, the annual incentive award paid out at 142%.”
The letter continues that “of the more than $30 million in compensation paid to CEO Hazen in 2020, just $226,000 was directly tied to incentives to improve quality and patient care performance,” which the company states, “is an integral part of our compensation programs” and “at the core of everything we do.” Furthermore, the letter claims that the company’s executive pay decisions in 2020 are in contrast with its concerning workplace practices, citing reports of understaffed HCA hospitals, undersupplied frontline employees, and poor human capital management.