Monday, November 16, 2015

MODA: a local case study in exorbitant executive compensation

Any CEO who accepts or demands exorbitant compensation, particularly in comparison to the compensation of the company's line workers, should be considered unfit to lead.

Such grotesque inequitable compensation should be outlawed.

Consider the case here in Portland of the publicly-supported Oregon Health Sciences University (OHSU), its questionable financial dealings with the private MODA Health Plan and the compensation of MODA CEO Robert Gootee.

A little background:

The Oregonian reported on Nov. 6 that OHSU lent MODA Health Plan, $50 million at the end of last year. Suffice to say that the two institutions do a lot of business together.

So much so that MODA, according to OHSU officials, is yet another one of those private institutions “too big to fail.” And so the public’s subsidy money gets shoveled to MODA, via OHSU.

It turns out that if MODA does fail, we, fellow taxpayer take the hit. OHSU, Portland’s largest employer, is really, REALLY too big to fail.

OHSU’s board of directors approved the loan last December. A month after the vote, OHSU president Joe Robertson joined MODA’s board. He was paid $26,000 for his services, according to the Oregonian, before leaving the board in two months ago, when MODA’s most recent financial problems came to light.

The paper also reported that Robertson donated his MODA fees to OHSU. One wonders what the money will be used for. Part of another loan to MODA perhaps?

The Oregonian story is long at 36 paragraphs. But it’s not until paragraph 30 that we find out that in 2013 MODA’s CEO Robert Gootee was paid $13 million. Of that $8.9 million was a “one-time” payment for “a terminated retirement plan and deferred compensation he has not yet received.” But in 2012, Gootee received $10.4 million 2012.

Why didn’t Gootee simply drop his shameful compensation to help MODA financially?

The Oregonian apparently didn't ask for an explanation or was refused one, but reporter Jeff Manning does write, “OHSU, meanwhile, still collects millions of dollars a year from Oregon taxpayers. Last spring, weeks after the MODA loan, the Oregon Legislature approved another $270 million for the institution,” which is a public corporation.

The lead to this story could easily have been: “Oregon taxpayers helped OHSU lend health insurance company MODA $50 million last year, one year after, MODA paid its CEO $13 million.”

Kudos to The Oregonian and Manning for revealing the the taxpayer-backed loan, but a juicy rotten tomato for not spotlighting Gootee compensation package…and delving into the question of conflicts of interest and a culture in which executive compensation and greed come first.

Footnote: The MODA in question is the same outfit that has slapped its name on what was once “The Rose Garden." The cost of the glitzy naming rights has been put at $40 million over 10 years.

MODA officials say the number is too high but won’t disclose what it is.

One wonders why....

Update: Today it was reported that OHSU will convert its $50 million loan into a a 25 percent stake in MODA Health Plan.  Question: what will it pay the "new" MODA's CEO?

Labels: , , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home