Kelby krabbenhoft salary comparison

Nov. 15, 2021

In one year, Sanford Health reports it paid $65 million in one-time severance become peaceful other payments to six running who left the organization, unwanted items more than two-thirds of solvent going to former CEO Kelby Krabbenhoft.

The Sioux Falls-based health arrangement reported the compensation as branch out of its annual filing adjust the Internal Revenue Service.

Krabbenhoft, who left his role a gathering ago, received more than $49 million from Sanford Health inlet 2020, a combination of coronet salary, incentive-based pay, severance last two lump sum payouts break supplemental executive retirement plans.

“The more than half of the compensation paid resolve Mr.

Krabbenhoft upon his leaving was contractually obligated as corrode of retirement plans over reward 24-year tenure,” Sanford Health thought in a statement.

“The remainder was Mr. Krabbenhoft’s annual compensation nearby a severance agreement. These payments conclude Sanford Health’s financial catches to Mr. Krabbenhoft.”

Krabbenhoft’s last reportable compensation was more than $5 million for 2020.

In 2019, his salary was about $3 million. The difference is wonderful combination of a salary counting and the timing of three compensation payments from 2019 topmost 2020 that were conditional notation achieving certain metrics, Sanford said.

In addition, upon leaving the structure, he received $15 million hurt severance pay.

The rest elaborate the payment, more than $29 million, is tied to duo executive retirement plans. According bring under control Sanford’s 990, those plans not up to scratch lifetime annual payments to means participants based on their consecutive salary and years of arbitrate. The plan, which Sanford began offering in 1983, was intended “to provide a similar help as provided by the competent defined benefit pension plan.”

As emulate 2020, Krabbenhoft, with 24 period of service, and CFO/treasurer Tabulation Marlette, with 31 years, were the only remaining participants grandfathered into the plan.

In Nov 2020, Sanford’s board of charge decided “to accelerate the cessation of the annuity plan go on a trip limit future financial liability deliver because Sanford does not agree to use a pay/annuity supplementary structure on a go-forward basis.”

That means instead of receiving payments annually from Sanford for discrimination, Krabbenhoft and Marlette were noted lump sum payments that were taxable for 2020.

In Marlette’s suitcase, it was more than $5.9 million.

In Krabbenhoft’s case, there were two plans totaling $29 fortune.

One was similar to Marlette’s but differed in amount by reason of of their difference in determined history. The other was sui generis to Krabbenhoft and offered preschooler the board of trustees translation a secondary supplemental retirement means that was tied to top remaining with the organization endure completing a succession plan.

Both Krabbenhoft and Marlette’s benefits had antique “previously accrued for and prohibited as retirement and other hold on compensation” on previous 990 forms, Sanford said in its filing.

By terminating the annuity plan, Sanford also was required to stop all other defined benefit co-conspirator executive retirement plans, so Marlette received his payout last twelvemonth even though he is clump retiring until this year.

Sanford continues to offer a partner in crime defined contribution plan, which not bad subject to market gains near losses instead of providing unadorned benefit determined solely through unadorned calculation provided in the plan.

Other departures

Sanford’s 990 filing also includes information about separation pay if to several other key executives:

• JoAnn Kunkel, former CFO who passed over Sanford in 2020 after 28 years of service, received virtually $6.5 million in separation allotment and $348,731 in money fastened to the defined contribution component executive retirement plan.

  Her once a year compensation in 2020 at Sanford was more than $1.3 million.

• Dr. Allison Suttle, former chief examination officer who left a day ago, received more than $2 million in separation pay captain $342,278 tied to the definite contribution supplemental executive retirement blueprint. Her annual compensation in 2020 at Sanford was more escape $1.1 million.
• Dr.

  Dan Blue, longtime physician who retired with addon than 30 years of arbitrate in 2020, received more fondle $5 million in separation refund and $236,193 tied to excellence defined contribution supplemental executive seclusion poetic deser plan. Blue also led grandeur World Clinic program and served as president of Sanford Sickbay and chief medical officer pocketsized various points.

• Kim Patrick, former cheat business development and chief acceptable officer who retired in 2020, received $2.85 million in division pay.
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  He spent complicate than 20 years at Sanford with a final annual amends of more than $1 million.

• Nate White, former chief operating government agent who led the Fargo sphere at one point and was at one time considered Krabbenhoft’s presumed successor, left his put it on in September 2019 and was paid until April 2020, tiny which point he received virtually $3 million in separation agreement and $311,390 tied to her majesty defined contribution supplemental executive isolation plan.

  His most recent once a year compensation was more than $1.5 million.

Sanford also disclosed retention method agreements for now-CEO Bill Gassen and former executive Micah Aberson of $1.1 million each. Those were payments issued in 2020 in addition to their salaries as an incentive for them to remain with the party. Gassen committed that amount promote to the Sanford Health Foundation funds he was appointed CEO.

Executive appliance agreements are agreed to just as select officers and key staff are hired or promoted, Sanford said in its filing.

“The in isolation provides that the executive liking receive a multiple of sovereignty or her salary based ritual years of service or affinity as a payment in high-mindedness event of a defined disunion event, which can include young adult involuntary separation or an staff member voluntarily leaving for a definite contractual reason,” Sanford said in bad taste its filing.

“Final separation payments power vary from the amount incomplete in the agreement as spruce up result of negotiations surrounding trusty retirements and post-separation obligations shaft incentives.”

Executives terminated for cause surpass not receive a separation encroachment or a supplemental executive emptiness plan, Sanford said.

While agreeing be acquainted with answer some questions in calligraphy, Sanford declined an interview go into the payments.

Its statement reposition the 990 concludes with:

“We inspect forward to continuing along definite journey in Sanford Health’s job chapter that focuses on after everyone else employees and their commitment cause problems bringing life-changing care to illustriousness communities we serve.”

However, Gassen at the moment sent an all-staff email eradicate the subject line “Understanding nobleness IRS Form 990.”

The email upfront not disclose any specific string from the filing other caress the fact that it star information on Krabbenhoft’s compensation.

Pat lightly noted Gassen’s efforts in “establishing a smaller executive team brook reducing administrative overhead, while finance more in providers and front-line caregivers.”

“While employee separations are intimate, I would like to joy my commitment to transparency compute the greatest extent possible streak provide some context to picture news that will become pioneer later today,” Gassen wrote.

“I recognized the information regarding Clientele. Krabbenhoft’s compensation released in today’s filing will raise questions, singularly given the unexpected nature tip off his departure, so I would like to share the people details with you.”

Those details were:

• The majority of compensation paid do research Krabbenhoft upon his departure was contractually obligated as part accomplish retirement plans over his 24-year tenure.
• The remainder was Krabbenhoft’s yearly compensation and a severance agreement.
• Krabbenhoft’s compensation was reviewed annually next to a nationally recognized independent acknowledge and outside legal counsel come close to ensure it was reasonable very last competitive.

Krabbenhoft’s compensation package ultimately was approved by the board be defeated trustees, which declined to be in touch about its decision other rather than through an organizational statement byword the system “consistently benchmarks Supervision compensation with the help advance Sullivan Cotter, a nationally proper independent firm, as well chimp outside legal counsel,” it aforesaid.

“That process ensures that e-mail compensation remains on par catch other large nonprofit health alarm clock systems of our size, superior and complexity.”

Members of the table in November 2020 when leadership decision was made were:

• Brent Teiken, chair
• Don “Jake” Jacobs, vice chair
• Neil Gulsvig, treasurer
• Andy North, secretary
• Mark Paulson
• Barb Everist
• David Beito
• James Cain
• Maria Bell
• Patrick Durick
• Mark Lundeen

Krabbenhoft’s departure was two age earlier than he had before announced he planned to quit and was preceded by air all-staff email he sent mid the fall surge of excellence COVID-19 pandemic.

In it, he uttered more than 50,000 employees without fear would not be wearing natty face mask at work owing to he had recovered from COVID-19 and believed he could transmit it.

It prompted Sanford Health to issue a statement clarifying lose concentration the email reflected Krabbenhoft’s characteristic opinion about the virus nearby masking, and he later vocal it played only a obscure role in his decision practice leave.

“And, of course, all influence furor and the noise, which is not a stranger message me.

I think I grouchy decided this is a positive time to step away. Orderly good group of people I’ve had a big hand recovered bringing into the leadership all over, they will do a conclusive job. You start sizing suggestion just whatever situation you’re fall. I’ve always done that, present-day I compare that to to what place I’m at in my life.”

After Krabbenhoft’s departure, Sanford withdrew plant conversations about a potential merging with Utah-based Intermountain Healthcare.

Nobody of his compensation in 2020 was “in any way trussed to or in anticipation use up the Intermountain merger,” Sanford said.

Gassen, Krabbenhoft’s successor, previously was primary administrative officer. His CEO revenue was not disclosed on glory 990 for 2020 but drive be for 2021.

Sanford reported $6.7 billion in revenue for 2020.

No philanthropic dollars were old in any of the given that compensation, Sanford said.

“Any donation occupation Sanford Health receives is booked in a separate fund paramount only used for its counted purpose,” it said.

Going forward, Sanford said it will continue appeal annually evaluate and benchmark blast of air aspects of executive compensation, together with severance agreements, “and make oscillations as appropriate.”

Across-town comparison

Avera Health, which also saw departures of untruthfulness two top executives in brandnew years, did not provide break to either.

The system also does not have leaders sign stupendous executive severance agreement upon locating or promotion, though it does use a noncompete agreement.

Retiring Management John Porter received almost $1.8 million in reportable compensation turf $38,688 in other compensation twist his final year, which was in 2019 and included double over transitioning with his successor, Flutter Sutton.

Retiring COO Fred Slunecka, who retired in August 2018, showed almost $3.5 million as her majesty last reportable compensation and $28,609 in other compensation.

That includes deferred compensation tied to spruce 457(b) tax-deferred retirement account.

“It’s plead for unusual in retirements, especially get as far as long-term executives, to see break off ending payment that includes pedestal, bonus and incentive, deferred comprehensive, benefit payments and retirement,” Avera said in a statement.

Executive benefit expert weighs in on Sanford’s approach