Mercy president, CEO defends his salary

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Monday, December 12, 2011
— Javon Bea saw the August article in a Madison newspaper that questioned the salaries of area health care leaders.

Bea, the president and chief executive officer of Janesville-based Mercy Health System, was singled out for receiving considerably more than hospital executives in Madison.

The article was based on 2009 tax filings, which show that Mercy paid Bea $3.6 million in total compensation. That included compensation of nearly $2 million and deferred pension payments of just more than $1.6 million.

The newspaper reported that the national average was $630,000 and included base salaries, bonuses, pensions and other benefits.

This is not the first time Bea's compensation package has been questioned. In 2007, the Gazette reported that Bea's compensation hit a high point of $14.4 million in 2002.

Bea said his earnings in 2002 were a combination of his base salary, incentive pay for years of achievement and several years of deferred income that he invested successfully through the market run-ups of the 1990s.

When Bea was earning $3.6 million in 2009, the federal government reported that U.S. health care costs accounted for 17.6 percent of the nation's Gross Domestic Product. That percentage is expected to grow.

Bea said his salary has no effect on health care costs or the premiums MercyCare subscribers pay each year. He likened his salary to capital costs, which he also said don't affect what patients are charged.

John Cook, Mercy's chief financial officer, said Medicare, Medicaid and private insurance companies don't pay providers based on the costs of capital improvements or salaries, which in Bea's case is determined by a board of directors that works with national consultants and attorneys.

"My salary isn't going to affect your health care cost," Bea said.

Bea said the Madison newspaper story compared executives at individual operations to him, an executive of a system that has three hospitals and 61 other facilities in 24 communities in southern Wisconsin and northern Illinois.

"To equal the job description of the CEO of Mercy Health System, you'd have to (add together) the salary of the CEO of DeanCare insurance, the salary of the CEO of Dean Clinic and the salary of the CEO of St. Mary's Hospital," Bea said. "And then you'd better throw in the chief operating officers at all three."

Bea said Mercy doesn't have COOs and that he does that work.

"There's a difference between creating a billion-dollar entity and running a billion-dollar entity," he said. "I've taken Mercy's gross revenues from $33 million to over $1 billion.

"If I die tomorrow, I know the board wouldn't—if they replace me with one person to do all those functions—be paying at that level because someone would be coming in to run what I built."

Last updated: 7:07 pm Thursday, December 13, 2012

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