Hospitals

Cleveland Clinic Millionaires’ Club added 2 more members in 2009

Thirteen Cleveland Clinic employees were paid more than $1 million in 2009. CEO Dr. Delos “Toby” Cosgrove’s compensation far outpaced that of any other Clinic employee. Cosgrove was paid a little more than $2.1 million by the Clinic in 2009, about $500,000 more than any other Clinic employee listed in the document.

Thirteen Cleveland Clinic employees were paid more than $1 million in 2009, two more than the prior year, according to the health system’s filings with the Internal Revenue Service.

CEO Dr. Delos “Toby” Cosgrove‘s compensation far outpaced that of any other Clinic employee. Cosgrove was paid a little more than $2.1 million by the Clinic in 2009, about $500,000 more than any other Clinic employee listed in the document. Cosgrove’s compensation jumped 11 percent from the prior year. (By way of comparison, Mayo Clinic’s CEO was paid $2.2 million and Johns Hopkins Hospital‘s president was paid $1.9 million in 2009.)

Keeping with the Clinic’s reputation as an organization that places doctors at its center, 12 of the 13 million-dollar earners hold medical degrees. Most of the top earners are department heads or chairs of the Clinic’s various institutes.

“All [Cleveland Clinic] officers and key employees have their compensation reviewed in advance annually by the compensation committee of the board of directors,” a Clinic spokeswoman said.

“In establishing compensation, the committee retains and consults with an independent compensation consultant, who prepares a customized report for the committee analyzing compensation amounts paid by similarly situated organizations to similarly qualified persons in functionally comparable positions,” the spokeswoman continued.

The financial information comes from the Clinic’s 145-page Form 990, which became publicly available late last year. Tax-exempt nonprofits whose receipts typically exceed $25,000 annually are required to file the informational forms each year with the IRS. 

Cleveland Clinic posted its 990 on its website — something many hospitals opt not to do — as an example of what the Clinic calls “our commitment to good governance and transparency.” The health system had lots to tout in 2009. The Clinic’s system-wide revenues for 2009 stood at $5.7 billion, a 16 percent increase from the prior year. Revenues less expenses — which would be considered profits if the Clinic were a for-profit organization — were $362 million. In the prior year, expenses exceeded revenues by about $62 million.

Somewhat surprisingly, Cosgrove wasn’t the Clinic’s highest-paid employee in 2008. That lucrative honor went to Dr. Hilel Lewis, former director of the Clinic’s Cole Eye Institute, at $2.6 million. Lewis left the Clinic in 2008, after 15 years with the health system. Lewis later took a post as a professor in ophthalmology at Columbia University College of Medicine in New York City.

Below are the 13 employees listed in the Clinic’s 990 whose total compensation exceeded $1 million in 2009. Note that total compensation includes base salary, bonuses, retirement and other deferred compensation and nontaxable benefits, according to the document. (To view salary information, go to page 65 of the Form 990.)

1. Dr. Delos “Toby” Cosgrove, president and CEO, $2.1 million.
A heart surgeon, Cosgrove joined the Clinic in 1975 and was appointed CEO in 2004. During his tenure, the Clinic has held onto its status as the nation’s No. 1 heart center in the questionable but influential U.S. News and World Report hospital rankings, having topped that list 16 consecutive years. He’s regarded as one of the nation’s most powerful and influential physician-executives and is an accomplished innovator in the field of cardiac surgery, having filed 30 patents. He was paid $1.9 million in 2008.

2. Dr. Bruce Lytle, chair of Heart & Vascular Institute, $1.6 million.
Lytle joined the Clinic’s Department of Thoracic and Cardiovascular Surgery in 1978 and was appointed chairman of the newly established Heart & Vascular Institute in 2007. He specializes in coronary artery disease, arterial bypass grafting, valvular heart diseases, idiopathic hypertrophic subaortic stenosis, and laser transmyocardial revascularization surgery. He was paid $1.5 million in 2008.

3. Dr. Constantine Mavroudis, chair of Department of Pediatric and Congenital Heart Surgery, $1.4 million.
The Greece-born Mavroudis was recruited to the Clinic in 2008 after having directed the pediatric cardiac surgery division at Children’s Memorial Hospital in Chicago. He specializes in treating complex congenital heart disease, arrhythmias, coronary artery disease, and cardiac transplantation in children.

4. Dr. Victor Fazio, former chair of Department of Colorectal Surgery, $1.2 million.
Fazio, a native of Australia, led the Department of Colorectal Surgery for 33 years before handing over the reigns in 2009. His clinical interests include Crohn’s Disease and ulcerative colitis. He was paid $1.2 million in 2008.

5. Dr. Philip Schauer, director of Bariatric and Metabolic Institute, $1.1 million.
Schauer joined the Clinic in 2004 after working at University of Pittsburgh Medical Center as director of endoscopic surgery and director of bariatric surgery. He specializes in surgery for severe obesity, minimally invasive surgery and gastrointestinal surgery. With the U.S. obesity epidemic only worsening and more and more people likely to go under the knife for the condition in the future, Schauer’s prominence within the organization could grow. He was paid $1.1 million in 2008.

6. David Strand,  former chief operating officer, $1.1 million.
Strand was the only non-MD on the 2009 millionaires’ list. Along with his wife, Dr. Bridget Duffy, then the Clinic’s chief experience officer, Strand left the Clinic in July 2009.

7. Dr. Joseph Hahn, chief of staff,$1.1 million.
A neurosurgeon, Hahn was the longest serving chairman of surgery in the history of Cleveland Clinic, having led the division from 1987 to 2003. He later worked as chairman of Cleveland Clinic Innovations, which commercializes medical discoveries made by Clinic doctors. As chief of staff, Hahn is responsible for the Clinic’s clinical divisions and institutes, which include more than 2,200 professional staffers. He was paid $931,000 in 2008.

Other $1 million earners are: