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Executive compensation

2013 Novant Health Form 990

The following describes how executive leadership compensation is established at Novant Health, a not-for-profit organization. Listed below are the members of Novant Executive Team and the value of their 2013 compensation and benefits.

Our organization considers an employee's compensation personal and private; however, we also recognize the importance of transparency and public interest in how tax-exempt, not-for-profit organizations establish compensation and benefits for its top leaders. Novant Health prepares and files annually a Form 990 with the Internal Revenue Service (IRS) that discloses important financial information about the organization, including executive compensation and benefits. These annual information returns follow IRS rules and regulations, but they can be easily misinterpreted because of their complexity. We hope you find the summary on this page useful.

How executive compensation is established
  • The Novant Health Board of Trustees, which consists of community leaders from organizations and businesses, establishes executive compensation. Novant executives are not involved in determining their own compensation and benefits.
  • Because Novant is a tax-exempt, not-for-profit organization, its executive compensation must follow very specific checks and balances. Compensation must be considered "reasonable" and within an acceptable range compared to similar organizations. Executive compensation and benefits are established by comparing Novant Health to other similar health systems and organizations around the country that are comparable in size, complexity and reputation. The Board hires national, independent experts who guide trustees in this benchmarking process and help assure that compensation and benefits do not exceed fair market value.
  • Compensation is designed to be competitive and to help recruit and retain leaders. Novant establishes executive base salaries in the same way it establishes compensation for all employees, by using market data and comparing to similar jobs.
  • A significant part of executive compensation is based upon the performance of the organization and achieving goals that are challenging, balanced and focused on improving the services we provide to patients and communities. The executive team performs in the top quartile nationally. Novant's goals focus on the quality and safety of healthcare, improving the patient experience, transforming to an electronic health record, financial stewardship and providing community benefit.
  • In 2013, Novant Health provided more than $566 million in community benefit, including $129 million in direct charity care. Novant Health is a very complex organization with 25,000 employees, annual revenues of $3.6 billion, 14 medical centers and approximately 450 locations across four states which include physician clinics and outpatient centers. This complexity is taken into consideration by the compensation consultant and the Committee when establishing its peer group.
Unique to 2013 – retirement plan change

As part of Novant Health’s efforts to strategically transform the organization to ensure quality care, patient satisfaction, and create consumer value, the Novant Health Board of Trustees compensation and leadership committee changed the executive retirement plan in 2013 from a defined benefit plan (DBSERP) to a defined contribution plan that will save the organization over $50 million long-term. This change resulted in vested pay-outs to executives in 2013 from the old plan.

  • The DBSERP plan was designed to retain executives. Those who left prior to vesting would not receive any of the funds from the program; instead, the plan accrued the dollars on their behalf until they vested when it would pay out over several years.
  • The figure reported this year represents the total number of dollars accumulated over the life of the plan. Most of these benefits have been reported on previous 990 forms as they accrued. Some of the executives who received a pay-out have been with the organization for over 30 years.
Novant Health System Executive Compensation
Executive Team
Novant Health System Executives/Years of Service in 2013 Title 2013 Base Salary Compensation 2013 Incentive Compensation 2013 Total Annual Compensation 2013 Other Compensation, such as Retirement Payments * or Severance Nontaxable Benefits such as life and health insurance, disability Accounting accruals for future retirement benefits which may not vest or be paid out Retirement Payments attributable to termination of the Defined Benefit Supplemental Executive Retirement Plan
Carl Armato/15 President & CEO 1,044,780 917,964 1,962,744 6,160,463 39,372 57,800 6,109,321
Jesse Cureton/0.9 Consumer Officer 502,517 156,000 658,517 28,442 26,256 143,167 -
Jacqueline Daniels/31 Chief Administrative Officer 543,607 545,680 1,089,287 8,705,151 16,789 77,839 8,663,598
Fred Hargett/10 Chief Financial Officer 611,703 561,004 1,172,707 1,464,315 31,674 57,800 1,414,973
Sallye Liner/37 Chief Clinical Officer 501,462 507,094 1,008,556 335,950 27,660 254,810 261,107
John Phipps, MD/7 President Novant Health Medical Group 431,319 296,364 727,683 37,579 31,836 145,746 -
Stephen Wallenhaupt MD/12 Chief Medical Officer 517,755 523,518 1,041,273 1,097,177 28,714 63,300 1,069,038