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About Our Health Network
Executive Compensation Statement
All not-for-profit organizations are required to complete the IRS Form
990, “Return of Organization Exempt From Income Tax” each year. It
provides detailed information on the organization’s operations, such as
its revenue, contributions received, community benefit, inventory as
well as the compensation provided to top executives. In LVHN’s case, it
submits seven Form 990’s, including one for Lehigh Valley Hospital and
one for Lehigh Valley Hospital--Muhlenberg. The form for Lehigh Valley
Hospital is 83 pages long and the form for Lehigh Valley Hospital-
Muhlenberg is 54 pages.
All not–for-profits are required to make the Form 990 available for
public inspection in their offices. In LVHN’s case, we are also making
it available on our website at lvh.org, consistent with our desire to
be open with the public.
In regard to our executive compensation program:
- Our executives are accountable for ensuring that LVHN’s
healing mission is carried out at the highest levels of quality,
service and efficiency within the communities that we serve.
- The process to determine executive compensation is directed by
our Board of Trustees under its Compensation and Development Committee
chaired by William Hecht. The Committee is composed of four Board
members who are independent of LVHN management, have no personal
interest in the compensation arrangements, are not related to nor under
the control of any individual whose compensation arrangement is being
reviewed, have no material business relationship with LVHN and are not
paid for their services as Board members. Those Board members are: Rev.
Jefferson Aiken, Kathryn Taylor and Martin Till.
- The Committee retains an independent consultant to conduct an
annual compensation analysis to help ensure that LVHN compensation
practices and compensation levels are reasonable. This consultant
provides only advisory services related to compensation to LVHN.
- To attract and retain the highest caliber of healthcare
professionals needed to sustain the quality of the healthcare this
institution provides to the communities that we serve, compensation
must be competitive with that provided by the organizations we compete
with in the job market. When senior management positions are filled,
LVHN typically conducts national searches.
- To enable us to attract and retain the highest caliber
individuals, our compensation arrangements need to be competitive with
those offered by comparable institutions across the country.
- We benchmark ourselves against organizations of comparable
size and mission across the region and the nation. Market data are
assembled for all elements of executive compensation (i.e., cash
compensation, benefits and perquisites). Market data reflect the
practices of:
- Regional not-for-profit health systems with net operating revenues between $500 million and $1.1 billion.
- National not-for-profit health systems with an academic mission and with net revenues between $750 million and $1.5 billion.
- These data are abstracted from surveys and survey databases prepared by independent firms.
- Compensation levels reflect the scope of each executive’s
responsibilities, educational background, experience and industry
standing as well as individual and organizational performance.
- It is the obligation of the Committee to assess the
performance of LVHN’s CEO, determine his/her compensation and report
its findings in this regard to the Board. The Committee is also
responsible for reviewing and approving the performance assessments and
compensation recommendations for the executive management staff at
LVHN. All compensation decisions are made in a manner that is
consistent with LVHN’s Board-approved compensation philosophy.
This page last updated 2/12/08 04:08 PM
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