Rich Roodman, Valley Medical Center’s CEO, will have his $1 million yearly pay and bonuses frozen at 2013 levels under a new two-year contract the center’s Board of Trustees approved unanimously Tuesday.
The new contact also spells out a succession plan to replace him as CEO once his retirement is set.
“The board feels it is important to begin succession planning right away, because when Rich does decide to retire, there will be a stable transition for the organization,” said trustee chair Lisa Jensen.
In an interview after the vote, Jensen said it was “great” to have a unanimous vote. The trustees’ compensation committee had considered everything from not extending Roodman’s contract to extending it for four years, she said.
“This is a good compromise,” she said.
This is possibly the last contract Roodman will sign with Valley Medical Center, where he has served as CEO for 31 years.
“This new contract will allow me to continue doing what I enjoy most, providing leadership by steering the organization toward specific performance goals related to patient satisfaction, quality care, financial stability and being a great place to work,” Roodman said.
He used a personal story to put into perspective his final years at Valley Medical.
“As a red-headed kid who grew up in St. Louis and loved baseball, Red Schoendienst was my childhood hero. He was a Baseball Hall-of-Famer with the Cardinals known for his ability to excel as both a player and a coach. Like him, I very much look forward to being a player/coach at this point in my career and mentoring my eventual successor.”
The new contract calls for Roodman to remain as Valley’s CEO through 2015, performing duties that are outlined in the strategic alliance agreement between Public Hospital No. 1, which owns Valley, and UW Medicine.
Midway through the contract, Roodman, 65, and the trustees will discuss whether to extend the contract for a third year.
The contract also calls for Roodman to help search for and then mentor or assist his replacement if a new CEO is selected before it expires.
The new contract cuts Roodman’s pay and benefits by about $465,000 below his 2013 contract.
His base pay is frozen at the 2013 level, $768,841, and his incentive pay is frozen at the 2013 level, $238,341, for a total $1,007,182.
The elimination of the executive retention payment and the discontinuation of contributions to a supplemental retirement program accounts for the $465,000.
The compensation package places Roodman within the 50th to 75th percentile of executives in comparable hospitals across the country. Before the policy was recently changed, the target was compensation within the 75th to 90th percentile of the comparable group.
Roodman’s pay has always been controversial. But commissioners Tuesday night praised him for his leadership in growing Valley Medical Center in those three decades and enhancing South King County’s health care.
“The hospital is in great shape,” said trustee Gary Kohlwes. “He’s not only provided the kind of leadership that got us there, but he has recruited people around him who are just outstanding.”
Dr. Paul Joos, a trustee and member of the hospital district’s Board of Commissioners, said the contract with Roodman is “negotiated” and “balanced” and it “respects Rich for the work he has done that will ensure Valley will stay strong.”
Roodman has built up a sizable retirement package that includes the Valley’s retirement plan for executives, supplemental retirement plans and two whole-life insurance polices.
That retirement package is worth $7.5 million.
The new contract replaces one that expires on Dec. 31. It’s the result of months of work by the trustees’ compensation committee, in consultation with Roodman and his attorney.
“This agreement strikes a balance that acknowledges Rich’s service and performance at Valley Medical Center and also recognizes the changing times at Valley and in healthcare in general,” said Jensen.
