By Steve Moran
I am incensed by this because it is wrong, and it makes our industry look terrible. Here is the headline from the Washington Post: “Departing CEO paid $5.2 million ‘retention’ bonus by nursing home chain that lost 2,800 residents to covid.” I have, swirling in my head, this huge jumble of frustrated, angry thoughts that are warning me that I should wait until I calm down to write this article, but I can’t. And at the same time, it makes me weep for the damage it does to our industry, to older people in this country, and to workers on the front line who do the heavy lifting.
A Basic Understanding of the Story
- In late October 2020, even with their finances in the toilet and with residents dying from COVID, Genesis HealthCare gave retiring CEO George Hager a $5.2 million dollar “retention payment”.
- In addition, as part of the retirement package, they gave him an immediate $650,000 bonus and a $300,000 consulting contract.
- They have more than 300 nursing homes and have had 14,352 confirmed cases of COVID through mid-December 2020, and 2,812 deaths, both figures above industry averages according to the article.
- The article points out that it is hard to have much sympathy for the industry’s cry for additional government financial aid with these kinds of executive payouts in the middle of the COVID-19 crisis.
- It also points out that many nursing homes have created affiliated entities that earn money from the nursing home company, which gives the appearance they are making less money than they really are. Genesis is one of the top 5 companies in the nation in the amount of money they pay to affiliated companies.
- In the first 3 quarters of 2020, Genesis received $254 million in federal relief tied to the pandemic. Plus, they had additional relief from states and $90 million in payroll tax deferrals.
- In addition, the company puts $2.1 million in a trust that is beyond the reach of creditors specifically for bonuses for seven of the high-ranking corporate officers.
Why I Am Incensed (as if I Need to Explain It)
- I confess to feeling personally betrayed for all those times I have defended for-profit nursing home operators when they are attacked for not caring about anything but profits. Don’t get me wrong, there are some great, caring for-profit nursing home organizations and leaders. But it is hard to argue that is true for Genesis.
- I also feel embarrassed and betrayed for writing an article suggesting that when the rest of the senior living world abandons nursing homes, we are betraying our own. Maybe they are right and I am wrong.
- I find myself wondering how a leader can, with a clean conscience, walk away from a failing company where people are dying from COVID.
- Senior living and nursing facilities are largely seen as the same in the public eye. This just confirms every single bad thing that is said by the press and feared by the public about senior living . . . that all they care about is the money.
- I wonder how it feels to be a CNA or a Nurse or a Cook or a Janitor working for Genesis. Knowing that the management that says it is impossible to pay them more walks away with a $5 million dollar payday. Not for success, but for failure. Just how loyal would I be?
I know it won’t happen, but we as an industry need to stand up and condemn this. We need to be saying that is not us, it will never be us. The trade organizations need to condemn this. One guy or a handful of people who already have plenty of money are getting rich on the backs of our most frail older people and on the backs of people who are making $12 or $14 an hour. And on the back of federal dollars, which is money that belongs to each of us.
We need to condemn this because it is the exact opposite of who and what most senior living leaders are and stand for. They must be called out because this is wrong.