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Highmark CEO pay climbs to $8.15M, triple what he made in 2016

Natasha Lindstrom
| Monday, November 16, 2020 5:33 p.m.
Tribune-Review
Highmark Health CEO David Holmberg looks out the window from his nonprofit system’s Downtown Pittsburgh corporate headquarters in this file photo from March 3, 2016.

Highmark Health CEO David Holmberg’s total compensation last year was $8.15 million — more than triple what the nonprofit health system executive made four years ago, newly filed Internal Revenue Service records show.

Holmberg’s salary and related compensation increased by about $660,000 in 2019, marking an 8.8% pay hike from the previous year and a 211% increase from four years ago, according to the nonprofit Form 990s the organization must file annually.

The bump puts Holmberg closer in line with the compensation reported for rival health system UPMC’s CEO, Jeffrey Romoff, who made $8.97 million last year, according to IRS forms filed in May. The organizations operate on different fiscal years.

RELATED: UPMC CEO Jeffrey Romoff made nearly $9M last year, a $430K bump

The increased pay comes as both Highmark and UPMC advance ambitious growth plans across Pennsylvania and neighboring states.

Highmark and UPMC are Downtown Pittsburgh-headquartered nonprofit health systems that each control both provider and insurer arms. Both use compensation committees, boards of directors and bonus incentives to set pay rates — or in some cases, pay cuts.

Holmberg’s compensation totaled about $3.8 million in 2015, his first full year taking over Highmark Health, the parent company that oversees the Highmark Inc. insurance arm as well as Allegheny Health Network’s doctors and hospitals, including Allegheny Valley Hospital in Harrison.

Holmberg made $2.62 million in 2016 — when Romoff made more than $6 million — after taking a $1 million pay cut as he and many Highmark executives saw their incomes drop after failing to meet performance-based bonus goals, officials said at the time.

In more recent years, executives have reaped pay hikes exceeding $1 million.

19 execs made $1M or more in 2019

Including Holmberg, at least six executives made more than $2 million and 13 executives and doctors in leadership roles made more than $1 million in 2019, the IRS forms show. About 2,400 of Highmark’s more than 35,000 full- and part-time employees made more than $100,000.

The second-highest paid executive in the system’s last fiscal year was Chief Financial Officer Jeffrey Crudele, who made $3.46 million last year.

Other top-paid execs included:

• Karen Hanlon, chief operating officer, made $3.32 million last year, up from $2.82 million in 2018 and $1.1 million in 2016.

• Cynthia Hundorfean, CEO of Allegheny Health Network, made $3.13 million in 2019, up from $2.44 million last year.

• Thomas VanKirk, chief legal officer, made $2.63 million in 2019, up from $2.47 million in 2018 and $967,000 in 2016.

The Board of Directors approves compensation for Holmberg, and a personal and compensation committee sets the pay for all Highmark Health and Allegheny Health Network senior executives, Highmark officials said. Bonus pay gets decided based on a variety of factors, including individual job impact, experience, skills and achievement of financial and strategic goals.

Holmberg says Highmark ‘well-positioned’ financially

Highmark’s net assets now top more than $8.2 billion.

In May, Highmark’s Allegheny Health Network announced it was laying off about 250 employees in response to covid-19 and a need to “realign” operations, in addition to another 130 jobs at its IT business as part of a planned restructuring. The positions eliminated included corporate and administrative services “and had no impact on AHN’s hospital-based front-line caregivers,” spokeswoman Lynn Seay told the Tribune-Review. No further layoffs were imminent.

With covid-19 halting surgical procedures last spring, after 11 straight quarters of earnings, Highmark’s Allegheny Health Network took an operating loss of $116 million through June 30. That’s a $136 million decrease from the prior year. Officials attributed that to patient volumes plummeting by as much as 50% during the pandemic-spurred lockdown.

But major initiatives and construction projects pressed on.

The $78 million AHN Cancer Institute opened at AHN’s flagship Allegheny General Hospital in Pittsburgh’s North Side. Neighborhood hospitals opened across Western Pennsylvania, including AHN Brentwood, AHN Hempfield and another 24-hour “mini-hospital” that opened in September on Freeport Road in Harmar.

Holmberg said in August that, despite the pandemic’s challenges, Highmark “is very well-positioned for the long term.”

RELATED: Highmark CEO: Covid-19 pandemic has not deterred growth across Pa., neighboring states


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