Thu09182014

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ECH officials offer measured reaction to salary pay cap

El Camino Hospital District officials last week offered tempered reactions to the news that Measure M – an initiative to cap the salaries of hospital executives – appeared poised to pass by a 51.14 percent vote.

Chris Ernst, the hospital’s vice president of marketing and communications, told the Town Crier last week that “it’s too early to talk about next steps,” noting that the Santa Clara County Registrar of Voters had several thousand outstanding county ballots to count. 

As of Saturday, the registrar reported that 45,000 mail-in and 35,000 provisional ballots still needed counting. The registrar’s latest count showed yes votes on Measure M ahead by 1,447 votes.

The measure, placed on the Nov. 6 ballot following a robust signature-gathering campaign by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) earlier this year, would effectively cap hospital executive pay at no more than double the salary of California’s governor. With Gov. Jerry Brown slated to earn approximately $165,000 this year, the measure would set a salary ceiling of $330,000.

Leading up to Election Day, opponents of the measure argued that its passage would handcuff the hospital – limiting the district’s ability to attract top executive talent – while noting that El Camino compensates executives at the 50th percentile of salaries for hospitals its size.

Those in favor of the measure said it would hold the hospital accountable for managing its funds transparently, including a portion of the property-tax dollars it receives from district residents.

Ernst said the measure, if implemented, would affect nine hospital executives, including CEO Tomi Ryba, who reportedly earns a base salary of $695,000 annually.

Ernst noted that the hospital board is slated to discuss a course of action regarding the measure tonight at its regularly scheduled meeting. When asked if the hospital could challenge the measure in court, she pointed to the measure’s ballot language, which included an impartial analysis by the county counsel questioning the measure’s legality.

“There is a legal question whether a hospital district is subject to a voter-approved initiative,” the analysis stated. “Additional questions may arise with respect to implementation of Measure M, which are not addressed in the Measure.”

SEIU-UHW officials, however, offered a differing view in a statement released to the Town Crier, intimating that their motivation to place Measure M on the ballot stemmed, in part, from ongoing contract negotiations with the hospital.

“SEIU-UHW members placed Measure M on the ballot solely to rein in executive salaries at the El Camino Hospital District, which is partially supported by taxpayer dollars,” the statement read. “At the time SEIU-UHW members filed signatures to put Measure M on the ballot, El Camino Hospital management was taking the position in contract bargaining that they could not afford to maintain employee benefits, even as they paid millions to a small number of their top executives. The measure was designed to bring a balance to the way the district allocates its resources and free up more funding for frontline workers, and came at a time when the Occupy movement had created a national conversation about wage and benefit inequality.”

 

Mixed reactions

Those elected Nov. 6 to serve on the hospital’s district board offered mixed reactions to the measure.

Dennis Chiu, a Sunnyvale-based attorney elected to one of three open seats on the hospital district’s board, called the measure’s current vote count a “basic philosophical decision” by district voters. Like Ernst, he also noted the measure’s impartial analysis by county counsel, adding that if the measure is deemed unconstitutional, “the hospital has clear duty to challenge it in court.”

“I look at it as two issues,” he said. “One, if the majority of people voted it in, we have to respect the people. On the other hand, we have to think about the overall welfare of the hospital so that it can provide for the community. Those are definitely two conflicting interests.”

Former Sunnyvale City Councilwoman Julia Miller, who along with Chiu and incumbent John Zoglin won a seat on the district board, said she was surprised that the measure was ahead in yes votes, given the time and money spent by its opponents to defeat it.

“My initial impression is the public has spoken,” she said. “The public must feel CEO compensation is getting out of hand.”

Zoglin, meanwhile, said the prospect of the measure’s implementation, even if the hospital challenges its legality, would likely “impact the ability to recruit executives.”

“We’ll certainly respect the will of the voters always,” he said. “On the other hand, we’ll have to explore the (impartial analysis) statement because there are questions about its legality.”

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