When it came time for Memorial Health System and CEO Larry McEvoy to part ways, Memorial’s board drew up an agreement that pays him three times more than his existing contract spelled out.
Under his existing employment contract, McEvoy was entitled to receive six months’ severance — or about $335,000 — if he lost his job without cause.
But in a still-unsigned separation agreement, McEvoy will pocket 18 months’ pay — or about $1 million.
“We felt that we needed to provide him a recognition for the performance that he has had over the last four years in terms of turning the hospital around financially,” Jim Moore, chairman of Memorial’s Board of Trustees, said Thursday.
“While we had that as a contractual arrangement, we felt the contract did not apply in terms of how he should be appropriately separated,” he said. “We consulted with industry experts in the area of health system compensation and severance and so forth. This is not even on a par with the average for the region for community health system CEOs.”
City Councilwoman Angela Dougan said McEvoy doesn’t deserve a $1 million severance. She said the board should have stuck to the original employment agreement.
“I’m so upset with the fact that we’re doing this that I have no problem making a call that the board be removed,” Dougan said.
Council President Scott Hente said the board acted within its authority and would have needed council approval only if it needed a supplemental budget appropriation.
“You don’t remove the board when they do something that they’re clearly authorized to do,” Hente said.
“This is something the city has to think about long term,” he added. “The city says we need a separate, autonomous board for (Colorado Springs) Utilities. So are we going to have a board that’s going to be separate and autonomous right up until the time they do something that we disagree with? Well, then you don’t have a separate and autonomous board.”
Still, Dougan said she plans to talk to her colleagues about removing the board, which she advocated in March when the board considered retention bonuses for Memorial executives, including McEvoy.
“The community spoke extremely loudly how they felt about retention bonuses and severance packages,” she said. “For the hospital board to turn around and essentially give Dr. McEvoy a severance package (of $1 million) is just an absolute slap in the face.”
Dougan acknowledged that getting four of her colleagues to vote in favor of removing the board would be next to impossible.
“I don’t think I have the votes to get there,” she said.
Hente, whose daughter works at Memorial, said he supports the board’s decision to give McEvoy a $1 million severance because it has that authority. But from a personal standpoint, he said, he has “some serious issues.”
“I think we send the wrong message to employees when we value one employee more so than we do all the others,” he said.
McEvoy’s separation agreement is expected to be signed within the next few days. It will become public at that point, Memorial spokesman Brian Newsome said.
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