Fresno councilmen demand investigation into executive pay at Valley Children's Hospital
FRESNO, Calif. (FOX26) — Fresno City Councilmen Miguel Arias and Garry Bredefeld sent a letter to California Attorney General Rob Bonta on Thursday requesting an investigation into the operations of Valley Children’s Hospital.
The letter asks AG Bonta to look into what they are calling "a disgraceful scheme of gross overcompensation of Valley Children’s Hospital Chief Executive Officer Todd Suntrapak and another 27 executives."
The issue was raised following the release of a report last week.
The reports found the following:
- Valley Children’s paid its roster of 28 executives $26.95 million in tax year 2021, nearly double comparable to other California Children’s hospitals.
- For tax year 2020 and 2021, Suntrapak was paid $5.4 million and $5.1 million, respectively, in total compensation by the hospital.
- The Valley Children’s Board of Trustees authorized a $5 million forgivable loan as a retention incentive to Suntrapak that apparently was used to purchase a home in Carmel, California that has no lien on it.
- In tax year 2021, the most poorly paid Valley Children’s executive earned 10.2 times the per capita income of a City of Fresno resident.
The letter sent to AG Bonta also included an IRS Form 990 for the hospital that included $124.5 million in offshore investments in the Caribbean, Central America, and Europe, and they say it's unclear if the assets include Medi-Cal proceeds, which covered 74% of patient visits in 2022.
Since excessive executive pay was discovered, our offices have received numerous complaints from employees and patients at Valley Children’s Hospital regarding significant operational gaps.
Valley Children’s Hospital issued a response to what it is calling misinformation and unfounded claims.
Valley Children’s Healthcare, a cornerstone of healthcare in the Central Valley for more than seven decades, is pushing back against misinformation and setting the record straight regarding recent criticisms of executive compensation.
In a letter addressed to the Fresno City Council, Valley Children’s refuted unfounded claims and highlighted its strong financial stewardship and unwavering commitment to providing high-quality care to children in the community.
Valley Children’s Healthcare Board of Trustees Chair Michael Hanson stated, “Valley Children’s has always been dedicated to transparency and accountability. We want to make sure that our community understands the truth and recognizes our unwavering commitment to exceptional patient care and financial stability to ensure Valley Children’s is here for the next 70 years.”
Valley Children’s letter to the City Council addressed criticisms of executive compensation, particularly regarding the CEO's salary and benefits. It clarified that the assumptions made about the compensation for their CEO were based on an ill-informed reading of their IRS 990 form from 2021.
That year, on the advice of their accountants and tax counsel, Valley Children’s shifted to paying performance bonuses for director level and above by the end of the calendar year in which it was earned. The result was performance bonuses for two years being paid and reported in a single filing year, with one year’s bonus paid a month earlier than in the past. As such, the resulting compensation figure in the hospital’s Form 990 was the result of a one-time accounting adjustment and, therefore, does not accurately represent a single year’s earnings for the hospital’s CEO or anyone else.
Valley Children’s Healthcare President and CEO Todd Suntrapak’s annual salary since July of 2020 is $1,711,341, which is in line with other health system CEOs with similar levels of responsibility; the remainder of his compensation largely consists of bonuses based on meeting significant performance goals – again, the norm for health system CEOs.
Hanson commented, “Executive compensation at Valley Children’s is determined through rigorous, independent review processes. Our decisions are guided by industry standards and aimed at attracting and retaining top talent necessary to uphold our commitment to excellence in healthcare.”
In its letter, Valley Children’s also underscored its strong financial position, attributing it to prudent financial management and investment strategies. Despite challenges faced by other healthcare institutions, the hospital remains steadfast in its mission to provide high-quality care to all children, regardless of financial background.
“While many other hospitals and health systems in the region and across California are in financial distress, some even teetering on financial ruin, Valley Children’s Healthcare has done everything we can to operate efficiently, invest wisely and work effectively so that we can support the children in our community that depend on us,” said Hanson.
“We are in a solid position thanks to our incredible staff and to our extremely talented and devoted leadership.”
In addition to its financial stewardship, Valley Children’s letter also reiterates the topquality care the health network provides to the local community. “Valley Children’s provides some of the highest quality care of any children’s hospital anywhere in the nation,” Hanson added. “Despite the fact that nearly 75% of our patients are from very low-income households and often face health challenges their more affluent peers do not, we ensure that these children have the same access to the best quality care.”
For the last eight years, the hospital has been ranked as one of the best children’s hospitals in the country in several pediatric specialties – and is in the top 3% of children’s hospitals in the country for quality and patient safety.
Hanson concluded, “Valley Children’s remains deeply committed to serving our community and providing the highest standards of care to every patient. We are grateful for the trust and support of our community and will continue to prioritize the well-being of the children and families we serve.”
Michael Hanson later said, "It is clear that these two local elected officials - including one in the midst of a political campaign - are simply calling for this investigation today to garner further publicity for themselves."
It is disturbing to see elected officials attempt to use children’s healthcare to garner media coverage.