“We should have handled it better”: UMC Board responds to criticism over CEO bonus

The ABC-7 I-Team is looking into the six-figure bonus University Medical Center Chief Executive Officer Jim Valenti recently received. In Valenti’s contract with the hospital, his performance evaluation for 2014 is behind the board’s decision to give him $119,915.

Local officials like county commissioners Carlos Leon and Vince Perez have been vocal about the bonus, especially while the hospital continues to struggle financially.

On Friday, Dec. 5, the UMC board will meet to review and discuss

1. UMC compensation practices.

2. Increasing board review and visibility of incentive programs

3. Improving stakeholder communication

4. Improving public relations services.

5. Rebuilding trust with the Commissioner’s Court

6. Addressing and taking appropriate action on concerns about Mr. Valenti’s performance.

In a letter from the Board’s Chair William Hanson, received Sunday, Hanson writes:
“There are humbling moments in life when we must step back, reflect and admit to our missteps and mistakes. We are at one of these moments.

“We have been criticized for providing incentive pay to our CEO. These payments were part of a compensation structure that has been in place at the hospital for 10 years. The incentive payments were earned but the timing of their payment was exceptionally insensitive after our lay-off of 56 employees and with the difficulty in providing financial support to the Children’s Hospital. We should have handled it better.”

“We hope you will accept this communication in the light in which it was prepared, as an honest first step to admit our missteps and restate our commitment to you. We have a unique role in this community, your healthcare and that of your family, friends and loved ones is entrusted to us. This is an exceptional responsibility and we accept it fully and respect.”

Hanson writes the board sets goals each year that require significant effort to achieve. He writes, incentive programs reward this effort and retain the best employees in a highly competitive market and legitimately serve our mission by moving us forward aggressively.

“This is the philosophical basis of our incentive pay program,” Hanson wrote.

Hanson notes:
Board set FY14 performance goals before issues with the Children’s Hospital had developed
A budget for incentive payments related to these goals was approved and a provision for payment was accrued in FY14
Employees earn incentives to achieve these goals
CEO’s incentive is a contractual obligation of UMC
Goals were achieved during FY14
Incentives were approved for payment

Hanson also outlines Valenti and UMC’s achievements over FY14:

Expanded clinic services to more El Pasoans.
Lead effort to obtain DSRIP funding that will bring $500M in improved medical services to our community.
Modernized infrastructure of the hospital
Achieved new records in patient satisfaction.

“Jim Valenti has lead UMC on a ten year journey of excellence,” Hanson writes. “We need his leadership to achieve the important tasks before us. Certainly there have been missteps and miscommunication. We recognize Mr. Valenti must demonstrate a commitment to work together with our partners. We must also address concerns from the Commissioners. We hold UMC to a high standard.

“In addition to operating a Level-One Trauma Center, UMC supports the mission of the Children’s Hospital and Texas Tech. We do so even when it causes stress to our own institution. The complexity and dynamic nature of our operations makes communication a challenge. The Commissioner’s Court has rightly criticized us about our communication. We remind all that communication and professionalism are two-way streets. For our part, we commit to the heavy lifting necessary to move forward. Our CEO’s relationship to UMC is contractual and specifies compensation. We do not take our contractual obligations lightly and we take full responsibility for ensuring our CEO is held to the highest standards of performance and ethics.”

The only goal not met a $3 million budget in net assets. The reason: the estimated $70 million Children’s hospital owes UMC. Keep in mind Children’s disputes that amount.