Erlanger Has Approved Executive Bonuses And Employee Raises

After Suspension Of Elective Procedures And Loss In Revenue Earlier In The Year, Erlanger Received $55 Million Federal Stimulus. Now, Raises And Bonuses Not To Exceed $7.65 Million Will Be Given To Employees And Executives.

Chattanooga, TN – On Thursday, the board of trustees for Erlanger Health System approved raises and bonuses for staff members. This approval came after reviewing how Erlanger performed during 2020.

There will be a one-time salary increase for hospital employees that should not equal more than $6.5 million. When executive bonuses are accounted for, the total cost should not be more than $7.65 million.

It has not been confirmed when those raises will be given out, but Erlanger CEO Dr. Will Jackson says leadership roles will not receive any pay-outs until front-line workers have been taken care of.

During the board meeting, Jackson said, “People drive our organization’s performance, and they’ve stood fast and sacrificed for this community over the past year. Salary increases for eligible employees are warranted in light of the challenges we’ve had over the course of the past year as well as with the outstanding performance of [Erlanger] itself.”

Jackson took over as Erlanger’s CEO back in September 2019, and this will be the second round of across-the-board-raises since then.

The first raise was in February, and eligible registered nurses and medical assistants were given raises earlier this month.

In the months following the start of the pandemic, the management at Erlanger had to use many cost-cutting measures, including lay-offs, suspending vacation accruals, and temporary furloughs. All of this had been part of Jackson’s plan to continue stream-lining the health system, despite Covid-19.

Many executives also took voluntary pay cuts, with Jackson taking the largest cut at 15%.

During April, Erlanger lost around $35 million in revenue.

This was the result of many Covid related expenses, but the hospital also had to temporarily suspend elective procedures, which included anything from joint replacements to cancer treatments.

However, Erlanger was given over $55 million in a federal stimulus in order to off-set those loses.

Erlanger ended up ending their fiscal year with a net income of $35.3 million.

According to a report released back in October, the hospital would have lost $19.9 million if it had not been for the stimulus.

With these approved raises, executive leaders, such as directors and vice presidents whose contracts include incentives, will not be eligible.

These incentives are determined by goals that the board sets every year, but they are going to be altered given the uncertainty of current situations.

The incentive pay will be cut to 50%, making the total no more than $1,150,000. It will be divided among the ninety-three leadership roles who are not eligible for raises.

The chair of the board’s budget and finance committee, Jim Coleman said, “We’re being good stewards, being reasonable, but want to recognize the hard work of the leadership team, but put things into context with some of the difficult decisions leadership’s also made during this journey.”

Jackson himself, who has a salary of $625,000, will be receiving a $50,000 bonus for completing three of the goals that were laid out in his initial contract.

These goals were recognizing the management structure, establishing a plan to address physician relations, and coming up with a plan to restructure the Medical Group.

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