Kindred CEO’s Compensation Jumped Nearly 30%
Sky-high executive compensation is back in the limelight after Kindred Healthcare (NYSE: KND) revealed its CEO Benjamin Breier’s salary jumped nearly 30% in 2016 while other executives in the company saw their compensation fall.
CEO Benjamin Breier, whose compensation is made up of a base salary, short-term incentive plan, long-term incentive plan and equity, saw his base salary jump from $925,000 in 2015 to $1.05 million in 2016—an 18.5% increase, according to an SEC filing. His overall compensation rose 28.6% in 2016 to $7 million, up from $5.44 million in 2015.
The compensation hike comes at a precarious time for Kindred, which announced it would exit the skilled nursing business entirely at the end of 2016 and has driven solid revenue growth in its Kindred at Home business. Recently, company’s stock has taken a big hit, dropping nearly 50% since about a year ago.
Yet, Breier’s compensation has continued to grow while other executives have seen their compensation cut—drastically, in some cases.
Kindred at Home President David Causby saw a compensation reduction of 38.5% in 2016, Louisville Business First journal reported. His overall compensation fell from $4.47 million in 2015 to $2.75 million in 2016.
CFO Stephen Farber’s overall compensation fell from $2,733,588 in 2015 to $2,327,863 in 2016, according to SEC documents. COO Ken Wallace’s overall compensation in 2016 fell to just over $2 million, down from $2.22 million in 2015.
“2016 was a challenging year for us and our shareholders in terms of overall financial and stock performance,” an SEC filing for Kindred reads. “Since our named executive officers are incentivized to achieve high levels of financial and stock price performance, their compensation is materially reduced when they fail to achieve those results.”
Breier’s compensation hike is comparable to another major post-acute care provider, LHC Group Inc. (Nasdaq: LHCG). The company drew backlash earlier this year after it was revealed that CEO Keith Myers’ compensation had jumped nearly 50% in a just a few years. At the time, LHC Group stated that compensation is tied to the company’s performance—LHC Group’s stock has doubled within the past few years.
Similarly, Kindred stated that its executive compensation is tied to performance of the company and a base salary, as determined by a compensation committee.
“In 2016, the Committee increased Mr. Breier’s salary to reflect his continuing strong performance in leading our strategic and operational efforts and to move him closer to the median of the peer group based on data provided by F.W. Cook,” the SEC filing reads. F.W. Cook (Frederic W. Cook & Co.) is an independent compensation consultant hired by Kindred.
Written by Amy Baxter