An audit of Westchester Medical Center (WMC) found company executives were paid millions of dollars in bonuses between 20013 and 2015. State Comptroller, Thomas DiNapoli’s office found that $4.6 million dollars were to paid to 18 employees without sufficient record keeping as to why the payments were made. The hospital was audited because it is a public authority, meaning it follows different state laws than the state’s nonprofit hospitals. The audit did find that some largest bonuses, paid to the CEO and CFO, followed state regulations; the two top executives were paid a total of $2.7 million in bonuses over three years.
WMC officials disagreed with many of the findings and noted they will be implementing a new bonus payment program in order to better comply with the state law and regulations cited in the report. The health system stated they maintain their total compensation approach and salary withhold process are in compliance with the incentive guidelines set forth by the Comptroller’s office. Auditors noted that in the past, state regulators have required an evaluation program with specific criteria and other rules.
The report showed the CEO and CFO of WMC have defined bonuses in their contracts. Other executives did not have these provisions in their contracts. Officials at WMC told auditors bonuses paid to senior management were considered “withholds” – amounts withheld from their base salary payments. Auditors reviewed senior management’s payroll and did not find any evidence of withholdings as cited by WMC. Also noted in the report, an employment letter to a senior manager referred to the base pay program as “Bonus Program”, supporting improper payments by WMC.
Officials at WMC acknowledged a formal evaluation program is not in place, but noted the CEO meets with all 14 senior executives annually to discuss their goals and performance. A record review of 2012 showed seven of 14 doctors submitted their goals and achievements, the number dropped to just 2 submissions in 2014. Officials were also unable to provide written performance evaluations by senior managers.
WMC’s Director of Communications, Andrew LaGuardia stated the issue raised in the audit was that of process. He continued that the compensation process at WMC is different from what the state comptroller’s office recommends. As a result, the medical center is going to modify their process to follow the comptroller’s recommendation.
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