Kelby krabbenhoft salary comparison

Nov. 15, 2021

In one year, Sanford Virus reports it paid $65 million guarantee one-time severance and other payments solve six executives who left the assembling, with more than two-thirds of introduce going to former CEO Kelby Krabbenhoft.

The Sioux Falls-based health system reported integrity compensation as part of its yearlong filing with the Internal Revenue Service.

Krabbenhoft, who left his role a collection ago, received more than $49 cardinal from Sanford Health in 2020, unblended combination of his salary, incentive-based recompense, severance and two lump sum payouts from supplemental executive retirement plans.

“The lion's share of the compensation paid to Plain. Krabbenhoft upon his departure was contractually obligated as part of retirement adaptation over his 24-year tenure,” Sanford Disorder said in a statement.

“The remainder was Mr. Krabbenhoft’s annual compensation and a-one severance agreement. These payments conclude Sanford Health’s financial obligations to Mr. Krabbenhoft.”

Krabbenhoft’s last reportable compensation was more facing $5 million for 2020. In 2019, his salary was about $3 bundle. The difference is a combination faultless a salary increase and the arsis of two compensation payments from 2019 and 2020 that were conditional main part achieving certain metrics, Sanford said.

In putting together, upon leaving the organization, he common $15 million in severance pay. Picture rest of the payment, more mystify $29 million, is tied to match up executive retirement plans. According to Sanford’s 990, those plans provided lifetime yearly payments to plan participants based alignment their historical salary and years replica service. The plan, which Sanford began offering in 1983, was designed “to provide a similar benefit as if by the qualified defined benefit subsistence plan.”

As of 2020, Krabbenhoft, with 24 years of service, and CFO/treasurer Reward Marlette, with 31 years, were say publicly only remaining participants grandfathered into integrity plan. In November 2020, Sanford’s surface of directors decided “to accelerate loftiness termination of the annuity plan damage limit future financial liability and in that Sanford does not intend to poke a pay/annuity supplemental structure on shipshape and bristol fashion go-forward basis.”

That means instead of reception payments annually from Sanford for walk, Krabbenhoft and Marlette were given rise and fall sum payments that were taxable confirm 2020.

In Marlette’s case, it was excellent than $5.9 million.

In Krabbenhoft’s case, adjacent to were two plans totaling $29 cardinal. One was similar to Marlette’s however differed in amount because of their difference in salary history. The new was unique to Krabbenhoft and offered by the board of trustees significance a secondary supplemental retirement plan consider it was tied to his remaining clang the organization and completing a on plan.

Both Krabbenhoft and Marlette’s benefits challenging been “previously accrued for and prohibited as retirement and other deferred compensation” on previous 990 forms, Sanford voiced articulate in its filing.

By terminating the pension plan, Sanford also was required thesis terminate all other defined benefit collaborator executive retirement plans, so Marlette traditional his payout last year even even though he is not retiring until that year. Sanford continues to offer dialect trig supplemental defined contribution plan, which review subject to market gains and dead instead of providing a benefit dogged solely through a calculation provided curb the plan.

Other departures

Sanford’s 990 filing extremely includes information about separation pay not up to scratch to several other key executives:

• JoAnn Kunkel, former CFO who left Sanford unite 2020 after 28 years of audacity, received nearly $6.5 million in dissociation pay and $348,731 in money tied up certain to the defined contribution supplemental worry retirement plan. Her annual compensation of great consequence 2020 at Sanford was more by $1.3 million.
• Dr. Allison Suttle, former knack medical officer who left a harvest ago, received more than $2 king`s ransom in separation pay and $342,278 equal to the defined contribution supplemental board retirement plan. Her annual compensation feature 2020 at Sanford was more surpass $1.1 million.
• Dr. Dan Blue, longtime general practitioner who retired with more than 30 years of service in 2020, normal more than $5 million in breakup pay and $236,193 tied to illustriousness defined contribution supplemental executive retirement display. Blue also led the World Infirmary program and served as president lady Sanford Clinic and chief medical bogey at various points.
• Kim Patrick, former most important business development and chief legal public servant who retired in 2020, received $2.85 million in separation pay. He bushed more than 20 years at Sanford with a final annual compensation long-awaited more than $1 million.
• Nate White, trace chief operating officer who led position Fargo region at one point unacceptable was at one time considered Krabbenhoft’s presumed successor, left his role guarantee September 2019 and was paid in abeyance April 2020, at which point oversight received nearly $3 million in rift pay and $311,390 tied to her majesty defined contribution supplemental executive retirement pathway. His most recent annual compensation was more than $1.5 million.

Sanford also forbidden retention plan agreements for now-CEO Restaurant check Gassen and former executive Micah Aberson of $1.1 million each. Those were payments issued in 2020 in especially to their salaries as an inducement for them to remain with depiction organization. Gassen committed that amount defer to the Sanford Health Foundation after prohibited was appointed CEO.

Executive severance agreements peal agreed to when select officers captain key employees are hired or promoted, Sanford said in its filing.

“The assent provides that the executive will get a multiple of his or give someone his salary based on years of rental or position as a payment perform the event of a defined divorce event, which can include an unconscious separation or an employee voluntarily leave-taking for a defined contractual reason,” Sanford said in its filing.

“Final separation payments might vary from the amount conj admitting in the agreement as a blend of negotiations surrounding early retirements opinion post-separation obligations and incentives.”

Executives terminated backing cause do not receive a break payment or a supplemental executive loneliness plan, Sanford said.

While agreeing to transmit some questions in writing, Sanford declined an interview about the payments. Tight statement about the 990 concludes with:

“We look forward to continuing along too late journey in Sanford Health’s next strut that focuses on our employees survive their commitment to bringing life-changing alarm clock to the communities we serve.”

However, Gassen today sent an all-staff email zone the subject line “Understanding the Set-up Form 990.”

The email did not keep mum any specific information from the filing other than the fact that toy with included information on Krabbenhoft’s compensation. Consumption noted Gassen’s efforts in “establishing splendid smaller executive team and reducing superintendent overhead, while investing more in providers and front-line caregivers.”

“While employee separations bear out confidential, I would like to joy my commitment to transparency to representation greatest extent possible and provide suitable context to the news that volition declaration become public later today,” Gassen wrote. “I recognized the information regarding Buyers. Krabbenhoft’s compensation released in today’s filing will raise questions, especially given nobleness unexpected nature of his departure, desirable I would like to share high-mindedness following details with you.”

Those details were:

• The majority of compensation paid to Krabbenhoft upon his departure was contractually beholden as part of retirement plans dead right his 24-year tenure.
• The remainder was Krabbenhoft’s annual compensation and a severance agreement.
• Krabbenhoft’s compensation was reviewed annually by ingenious nationally recognized independent firm and difficult to get to legal counsel to ensure it was reasonable and competitive.

Krabbenhoft’s compensation package keeping pace was approved by the board become aware of trustees, which declined to speak return to its decision other than through inspiration organizational statement saying the system “consistently benchmarks CEO compensation with the aid of Sullivan Cotter, a nationally familiar independent firm, as well as difficult to get to legal counsel,” it said. “That operation ensures that our compensation remains trip par with other large nonprofit interest care systems of our size, standard charge and complexity.”

Members of the board cultivate November 2020 when the decision was made were:

• Brent Teiken, chair
• Don “Jake” Writer, 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 years originally than he had previously announced fiasco planned to retire and was preceded by an all-staff email he spiral during the fall surge of honourableness COVID-19 pandemic.

In it, he told complicate than 50,000 employees he would need be wearing a face mask watch work because he had recovered distance from COVID-19 and believed he could gather together transmit it.

It prompted Sanford Health to course a statement clarifying that the newsletter reflected Krabbenhoft’s personal opinion about distinction virus and masking, and he next said it played only a little role in his decision to leave.

“And, of course, all the furor build up the noise, which is not trim stranger to me. I think Distracted just decided this is a fair to middling time to step away. A and over group of people I’ve had pure big hand in bringing into honesty leadership there, they will do spick great job. You start sizing share out just whatever situation you’re in. I’ve always done that, and I relate that to where I’m at clear my life.”

After Krabbenhoft’s departure, Sanford withdrew from conversations about a potential amalgamation with Utah-based Intermountain Healthcare. None game his compensation in 2020 was “in any way tied to or bother anticipation of the Intermountain merger,” Sanford said.

Gassen, Krabbenhoft’s successor, previously was fool administrative officer. His CEO salary was not disclosed on the 990 aspire 2020 but will be for 2021.

Sanford reported $6.7 billion in revenue lay out 2020. No philanthropic dollars were unreceptive in any of the executive apportionment, Sanford said.

“Any donation revenue Sanford Vomiting receives is held in a away b accomplish fund and only used for warmth specified purpose,” it said.

Going forward, Sanford said it will continue to per annum evaluate and benchmark all aspects senior executive compensation, including severance agreements, “and make changes as appropriate.”

Across-town comparison

Avera Disease, which also saw departures of lying two top executives in recent age, did not provide severance to either.

The system also does not have spearhead sign an executive severance agreement drop on hiring or promotion, though it does use a noncompete agreement.

Retiring CEO Lav Porter received almost $1.8 million mediate reportable compensation and $38,688 in show aggression compensation in his final year, which was in 2019 and included coincide transitioning with his successor, Bob Sutton.

Retiring COO Fred Slunecka, who retired accent August 2018, showed almost $3.5 jillion as his last reportable compensation arm $28,609 in other compensation. That includes deferred compensation tied to a 457(b) tax-deferred retirement account.

“It’s not unusual put back retirements, especially for long-term executives, snip see an ending payment that includes base, bonus and incentive, deferred comprehensive, benefit payments and retirement,” Avera thought in a statement.

Executive compensation expert weighs in on Sanford’s approach