Tax Filing Details Top D-H Payouts
Lebanon — The $675,000 severance payment awarded by Dartmouth-Hitchcock during 2013 to a “former senior advisor” to its chief executive barely made a public ripple or financial splash.
Nor did the $320,000 “change of control payment” made to a staff physician who had been working as an executive at the large, Lebanon-based medical complex, or the $105,000 severance payment to a former human resources director that year.
In fact, the reputation and financial health of D-H showed few, if any, noticeable ill effects as a result of the hefty packets of walking-away money handed out to former managers and reported in the most recent Form 990 tax return from D-H, which covered the fiscal year that ended June 30, 2014.
That stands in stark contrast to the controversy that has continued to reverberate after the disclosure earlier this year that Health Care and Rehabilitation Services Inc. of Southeastern Vermont, a Springfield-based social service agency, paid $686,000 in a “deferred compensation” retirement package for former Chief Executive Judith Hayward.
The portion of Hayward’s payments made during the fiscal year that ended June 30, 2014 contributed to the $1.4 million lost posted by HCRS in a year when revenue grew to an all-time high of $46.8 million.
HCRS is a financial dwarf compared to D-H, where fiscal 2014 revenue of $1.6 billion exceeded total expenses by $116 million. In other words, D-H’s surplus during the year was nearly 2 1/2 times HCRS’ total revenue.
This year D-H seems to have hit a financial rough patch. During the first nine months of fiscal year 2015, it posted a $3.5 million loss from operations, even after being offset by a $5.4 million profit during the quarter that ended March 31, according to an unaudited interim financial statement dated May 5. Even the gain in the most recent quarter amounted to an operating margin of 1.5 percent, below the 4 percent expected by lenders.
And during the quarter, D-H tapped its line of credit for $20 million, according to that statement.
Meanwhile, the compensation packages of the highest-paid D-H executives and doctors in some cases exceeded $1 million.
During 2013, the $1.1 million pay package of Thomas Colacchio, a physician who previously was president of a holding company that linked Mary Hitchcock Memorial Hospital and Dartmouth-Hitchcock Clinic, topped the list at D-H. Colachio’s compensation included that $320,000 “change of control” payment.
Similarly, the $675,000 severance payment to Neil Castaldo, a former senior advisor and general counsel, boosted his pay package about $40,000 north of $1 million, enough to rank third on the pay pyramid.
Geoffrey Vitt, of Norwich, a lawyer for Castaldo, said he was “not in a position to talk to” a reporter making inquiries about the severance payment.
D-H spokesman Mike Barwell said that some of the severance and change-of-control compensation “was made in lieu of multi-year contractual obligations and other agreements.”
At No. 2 on the D-H 2013 salary countdown was physician Daniel Stewart, whose base pay of $863,000 was exceeded only by Chief Executive James Weinstein (base pay of $946,000). Weinstein and Stewart each collected just over $1 million total compensation.
All told, 46 D-H doctors and executives collected more than $200,000 in total compensation in 2013.
Rick Jurgens can be reached at email@example.com or 603-727-3229.