Valley Children’s news release calls $5.1 million CEO pay criticism ‘misinformation’
The nonprofit Valley Children’s Hospital in Madera County responded to a backlash over the millions of dollars it pays its executives with a Wednesday news release, calling the criticism from Fresno City Council members and others the product of “misinformation.”
The prepared statement announced that the hospital sent a letter to the Fresno City Council that gives an explanation for CEO Todd Suntrapak’s more than $5.1 million total compensation in the fiscal year ending Sept. 30, 2022. Fresno City Councilmembers Garry Bredefeld and Miguel Arias last week called for a state investigation of the hospital’s finances after they expressed outrage over Suntrapak’s compensation, which by the end of that fiscal year had increased nearly 147% from two years prior.
The Valley Children’s CEO has declined to speak with The Fresno Bee about his pay and perks package, which according to federal tax forms includes a $5 million loan, or about the call from councilmembers for a state investigation into the hospital’s finances.
Vintage Foster, CEO of AMF Media, a public relations firm that spoke on behalf of the hospital last week, has not responded to multiple emails requesting comment from the hospital. The only responses have been the news release provided Wednesday, and a short prepared statement last week from Michael Hanson, the chair of the hospital’s Board of Trustees, who from from 2005 to 2017 served as superintendent of Fresno Unified School District.
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Valley Children’s news release on Wednesday argues that “assumptions made about the compensation for their CEO were based on an ill-informed reading of their IRS 990 form from 2021.”
Form 990 is the public federal tax form that nonprofits are required to file each year with the IRS. The forms list detailed financial information, including compensation for its highest-paid executives.
The news release says that for the fiscal year ending Sept. 30, 2022, the hospital’s accountants and tax counsel advised making a change, paying performance bonuses for director-level and higher positions “by the end of the calendar year in which it was earned.”
“The result was performance bonuses for two years being paid and reported in a single filing year, with one year’s bonus paid a month earlier than in the past,” Valley Children’s said in the Wednesday release. “As such, the resulting compensation figure in the hospital’s Form 990 was the result of a one-time accounting adjustment and, therefore, does not accurately represent a single year’s earnings for the hospital’s CEO or anyone else.”
Earlier this week, The Bee reported that Suntrapak’s total compensation for that fiscal year was third highest in the nation for CEOs of children’s hospitals. According to Becker’s Hospital Review, which ranks hospital size by bed count, Valley Children’s is the 16th largest children’s hospital in the nation. Suntrapak’s compensation, though, was higher that fiscal year than for children’s hospital CEOs in several major American cities, including Los Angeles, San Diego, Dallas, Boston and Chicago.
Suntrapak’s salary in the fiscal year ending Sept. 30, 2022, was nearly $1.7 million, but that is only one component of his total compensation. In the Wednesday news release, Valley Children’s said that base compensation amount is “in line with other health system CEOs with similar levels of responsibility.”
“The remainder of his compensation largely consists of bonuses based on meeting significant performance goals – again, the norm for health system CEOs,” the release said.
Is Valley Children’s $5.1 million CEO pay too high for a nonprofit? See the comparisons
Hanson, chair of the hospital’s board, said in the latest release that executives’ compensation was determined “through a rigorous, independent review process.”
“Our decisions are guided by industry standards and aimed at attracting and retaining top talent necessary to uphold our commitment to excellence in healthcare,” Hanson said in the release.
Valley Children’s issued $5 million loan to CEO
Also under scrutiny is the $5 million loan the hospital issued to Suntrapak that fiscal year as a “loan for residence as a retention incentive in lieu of other compensation,” according to the tax form. It’s unclear from the news release how the loan is structured, including any interest rate, or where any home purchased using the loan might be located.
Property records show that Suntrapak owns a home worth $1.7 million in Fresno County and a home in Monterey County on the coast worth $6.5 million. A search of Monterey County’s database yields no online record of a lien associated with Valley Children’s on the home.
In its letter to Fresno councilmembers, Valley Children’s said loans to executives are “not at all unusual as a retention tool.”
“Should the CEO voluntarily leave the organization within the 10-year period after the loan was advanced, the unamortized balance of the loan is required to be repaid,” the letter states.
Valley Children’s has been recognized as one of the best hospitals for children in the nation for the past eight years, and it is known for treating children from low income families. In the letter to Fresno councilmembers, the hospital said it is able to “provide an appropriate level of compensation to its leaders not because of Medi-Cal, but because of the “superb performance of our investment portfolio and our financial stewardship.”
Medi-Cal, the hospital said in the letter, does not “even cover the cost of the care we render to Medi-Cal beneficiaries.”
“We are proud of the decisions we have made and proud of what we do for our community,” the letter states.
