UMC board chair defends $120,000 bonus to CEO Valenti, says vice-chair shouldn’t be criticized

The University Medical Center board had a special board meeting on Thursday and its chairman read a statement defending CEO Jim Valenti’s $120,000 bonus and vice-chair singled out for criticism by a County Commissioner.

UMC Board Chairman William Hanson’s statement reads as follows:

As you know from media reports in the last few days, some of our recent decisions on compensation and incentive rewards have been criticized. We hear the criticism. We respect your concerns. We are attempting to provide you with better information about our decisions. I want you to know that the merit pay freeze for 2015 remains in effect. This is consistent with the budget that this board approved for the current fiscal year. I also want you to know that UMC has some pay-for-performance benefits that have been prescribed by policy or legal contracts. Pay-for-performance benefits are based on the achievement of goals and targets that were set by this board or management last year. The board directed some employees, including our CEO, to work towards these goals and if the goals were achieved the employee would receive compensation. The employees performed that work and they achieved those goals. UMC is obligated to pay these employees. It would be unfair and improper to not do so.

I also would like to acknowledge our fellow board member and Vice Chair, Laura Ponce, who was singled out for criticism for the action taken by our board on these performance and compensation programs. I think it is important to remember that UMC board decisions are made as a result of a collaborative and collective process of critical thinking and decision making in which all board members participate. The board members cast individual votes and a majority decision is issued on all matters of substantive importance. Individual board members do not make policy or contractual decisions alone. It is unfair to single out an individual board member for a decision that was reached and agreed to by 100% of board members in attendance.

El Paso County Commissioner Vince Perez is asking for the resignation of Ponce, who’s a big Valenti supporter.

Perez is calling out Ponce because she is the chair of the UMC finance committee and Perez feels there has been a lack of communication in that department.

Ponce says she wasn’t present when the board voted on Valenti’s bonus, although she was part of the evaluation process.

Ponce was appointed by former commissioner Tania Chozet and was inherited by Perez.

Last week, Valenti passed a board evaluation with “flying colors.”

The board president said Valenti met goal No. 1 — quality patient care, praising Valenti’s “exceptional leadership in a rocky year for UMC.”

That year included a $60 million dollar shortfall that led to 100 budget cuts, 56 employees laid off and a $20 million dollar line of credit, plus friction with Texas Tech and a Children’s Hospital with millions of dollars in unpaid debt.

Valenti declined a formal interview request made through his staff on Tuesday, but ABC-7 encountered him later in the day at the County Courthouse.

When asked if he would comment on the bonus, Valenti replied: “Well, I’d like you to visit with (UMC board chair) Mr. (William) Hanson.”

Hanson told ABC-7 on Tuesday: “The board recognizes that he earned (the bonus) by completing goals and projects that the board itself established. the payment is a legally required payment per the terms of the contract.”

ABC-7 then asked Valenti if he felt comfortable accepting the $120,000 bonus just three months after more than 50 employees were laid off at UMC.

“I think it’s important that you have in all organizations competent leadership,” Valenti replied.

Valenti has received bonuses of more than $100,000 each of the past 10 years. His first year at UMC in 2006 he received the largest one of more than $148,000. His lowest bonus was in 2007 when he received just over $105,000. The past three years Valenti’s bonuses have ranged from $120,000 to $133,000.

ABC-7 pointed out to Valenti that the bonus upset a lot of people and asked him if he had anything to say to those who may still be seeking employment after being laid off at UMC.

“I think there’s plenty of opportunity,” Valenti said. “We’re hiring a lot of people in healthcare.”

“Do I understand the public outrage? I do,” County Judge Veronica Escobar said of the situation on Tuesday.

“I’m certainly not pleased with the board’s decision,” Perez added, “particularly given the timing of all that’s happening at UMC.”

ABC-7 asked Escobar and Perez whether Valenti should consider returning the bonus.

“You know, I think that’s an option he should consider,” Escobar said.

“That’s his decision,” Perez added. “That’s something I would encourage given the timing, because I think the big issue right now is the public’s trust.”

So ABC-7 asked Valenti whether he would consider returning the bonus.

“I don’t believe so, I don’t believe so,” Valenti replied, before being asked if he felt like he’d earned it. “Absolutely.”

Hanson on Tuesday further explained that Valenti’s compensation is based on a competitive contract agreed to by the Hospital District and CEO nearly a decade ago.