El Paso Children’s Hospital tax filing shows raise for CEO, profit increase in 2023
by Priscilla Totiyapungprasert
October 21, 2024
El Paso Children’s Hospital’s latest tax filing shows the hospital gave CEO Cindy Stout an 8% raise and reported an increase in revenue in 2023 – its fifth profitable year in a row since declaring for bankruptcy protection in 2015. The hospital also reported a conflict of interest with one of its board members.
The hospital’s 2023 fiscal year ran from October 2022 to September 2023. Stout made $489,439 last year and received more than $31,000 in additional compensation, according to the hospital’s 2023 tax form.
El Paso Children’s will not have to report its 2024 earnings and CEO compensation to the Internal Revenue Service until the end of next fiscal year.
Laurel Huston, chief legal officer for El Paso Children’s Hospital, rejected requests from El Paso Matters for Stout’s 2024 contract, salary and performance evaluation. Huston responded in March the hospital is not a governmental body and not subject to the Texas Public Information Act, as determined by the Texas Attorney General’s Office.
El Paso Children’s Hospital is part of the El Paso County Hospital District. It serves as a contractor for University Medical Center of El Paso, a public hospital, but operates as a separately licensed entity with its own CEO, board of directors and revenue sources.
The hospital district’s property tax revenue does not go to El Paso Children’s Hospital, said spokespeople for both hospitals. Almost all of the hospital’s revenue comes from services provided, according to its latest tax form.
Tax-exempt nonprofits are required to file a form 990 to the IRS. ProPublica’s Nonprofit Explorer has published the most recent form 990s filed by El Paso Children’s Hospital, showing Stout’s salary has increased by a range of $12,000 to $106,000 since 2019, not including bonuses.
Stout reports to El Paso Children’s Hospital’s board of directors, which approves the annual budget and CEO compensation. El Paso Matters also requested the hospital’s 2025 budget, but El Paso Children’s Hospital did not provide this.
“Her (Stout’s) tenured experience in health care has guided our hospital to new heights in establishing quality pediatric health care to our region and beyond,” said Steven Anderson, chairman of the board of directors. “El Paso Children’s Hospital Board of Directors fully supports the direction our leadership is taking the hospital to keep families home for the highest level of pediatric care.”
Before joining the children’s hospital, Stout worked as chief nursing executive at Las Palmas/Del Sol Healthcare and chief nursing officer at UMC. Stout became CEO of El Paso Children’s Hospital in 2017, following a period of financial turmoil at the hospital.
The children’s hospital filed for bankruptcy protection in 2015, just three years after its opening and owing more than $2 million in unpaid rent to UMC. After a contentious legal battle, UMC and El Paso Children’s Hospital reached an agreement where the children’s hospital would operate as an independent affiliate of UMC starting in 2016. As part of the debt repayment plan, UMC forgave some of the children’s hospital’s debt and lowered its rent.
As of Sept. 30, El Paso Children’s Hospital owes $34.4 million of the $48 million bankruptcy debt, UMC spokesperson Estefanía Seyffert Morgan told El Paso Matters.
The children’s hospital has operated at a profit since 2019, according to tax filings, and recently celebrated the opening of its eighth floor. The floor has 26 new beds and an epilepsy monitoring unit. In 2023, the hospital brought in $207.4 million in revenue with a profit of $30.5 million, according to its tax forms.
The latest tax filing also shows El Paso Children’s Hospital self-reported a conflict of interest with one of its former board members. The hospital contracted more than $1 million in services from El Paso Imaging Consultants. The spouse of then-board member Amy Ross has more than 35% ownership of the radiology company, according to the filing.
Hospital policy requires board members and certain employees to report current or potential business dealings involving El Paso Children’s Hospital. Board members with a conflict of interest are prohibited from participating in decisions involving the transaction.
Board members appointed Ross to the board in fall 2016, hospital spokesperson Daniel Veale told El Paso Matters. Ross exited in spring 2024 after serving a partial term, followed by two consecutive three-year terms – the maximum length a board member can serve, Veale said.
