Hospital association: Valenti scrutiny not deserved

University Medical Center’s CEO Jim Valenti’s compensation has been under the microscope since news surfaced he received a $120,000 bonus just months after UMC laid off more than 50 employees.

But the Texas Hospital Association says the criticism may not be deserved.

“I am between the lowest 10th percent percent and the 25th percent of colleagues,” Valenti said last month, explaining his pay is not high compared to other public hospital executives across the country.

“It’s kind of ludicrous that we would question that low of an income for someone that is running an organization that is that complex,” said Lance Lunsford, Vice President of the Texas Hospital Association.

Valenti receives $460,000 in base pay plus a bonus every year based on goals he accomplishes. Since 2006, the bonuses have ranged from $105,000 to nearly $150,000.

“You’ve got a very complicated organization in terms of financial structure and then government oversight.” Lunsford said the pay is high because the job is complex. From difficult medical reimbursement formulas to government regulations and the management of hundreds of employees and millions of dollars.

“When you talk about how much work goes into every dollar that’s earned, you’re talking about inputs per dollar,” Lunsford said.

The Texas Hospital Association may not be an objective source, though. Valenti was a board member as recently as 2008.

The bonuses aren’t the only pricey benefits Valenti receives.

Valenti gets deferred compensation. Essentially, the board promises to pay him an additional percentage of his base pay every year until he makes it to May 2016 , when he could get a potential lump sum of $3 million.

Deferred compensation has been slightly controversial, with several instances of public or not for profit executives becoming millionaires partly because of it, raising eyebrows in their communities.

Lunsford says it comes down to this: if you want your ceo to stay, you’ve got to incentivise.

“I don’t know if I would put it in terms of competitive, it’s certainly difficult to find the right talent that can manage so many moving parts in a hospital.”