McAlester News-Capital, McAlester, OK

September 25, 2013

McAlester hospital CEO contract: 2 year agreement with 2 percent raise

By James Beaty
Senior Editor

McALESTER — A new contract for McAlester Regional Health Center Chief Executive Officer David Keith includes a 2 percent raise over his previous contract.

The contract, which went into effect on Friday, is for two years. It’s slated to run from Sept. 20, 2013, through Sept. 19, 2015.

It calls for Keith to be paid a base salary of $270,300 annually, unless the McAlester Regional Health Center Authority board members agree to pay him a higher figure following an annual performance review.

“I’m delighted and excited,” Keith said Tuesday of the new two-year agreement. “We’re so looking forward to staying in McAlester,” he said, referring to himself and his wife, Terry.

Weldon Smith, who is chairman of the MRHC Board of Trustee’s  Personnel Committee, and who is also the Ward 1 McAlester city councilor, said the 2 percent raise had its basis in two different areas.

He said a 2 percent raise has also been budgeted for other hospital employees —  “But it’s not a guaranteed thing.” The board didn’t want to offer a raise higher than what is under consideration for other hospital employees, he said.

Smith said the pay raise for Keith also had another basis.

“I think everybody thought he’d been doing a good job and wanted to encourage him,” Smith said.

Other terms of the agreement include the possibility of an executive bonus, if Keith meets performance criteria established by the board at the beginning of each year the agreement is in effect.

The amount of any annual bonus would be based on 30 percent of the CEO’s base salary, with the first 10 percent based on hitting a financial trigger as defined in annual performance goals. The remaining 20 percent would be determined based on achievement of goals to be approved by the board, according to the contract.

Also included in Keith’s contact is five weeks of paid vacation time, seven paid holidays and 12 sick days for each of the two years covered in the contract.

“Unused vacation time shall continue to accrue over the term of the agreement, and any unused vacation existing upon the termination of this agreement shall be paid to the CEO as a lump sum payment, subject to applicable employment taxes and other required withholdings,” the contract states.

Included in the contract is an annual car allowance of $9,000, payable on a  bi-weekly basis, in addition to the base pay.

Also included is payments to a retirement plan, membership at the McAlester Country Club and “related appropriate MRHC expenses” and “comprehensive health and major medical and dental health insurance” on the same terms as offered to other hospital employees.

In addition, the contract allows Keith to be absent from the hospital during working days to attend professional meetings and other outside professional duties in the health care field, as agreed between the hospital CEO and the board chairman.

Attendance at such approved meetings “shall be fully compensated service time and shall not be considered vacation time,” the contact states.

“The hospital shall reimburse the CEO for all expenses incurred by the CEO and his wife,” the contract states, “incident to attendance at approved professional meetings and entertainment expenses incurred by the CEO in furtherance of the hospital’s interests...” with a provision that the reimbursement  is approved by the chairman of the hospital board.

A provision is included that gives the hospital board the right to terminate Keith’s duties “without cause” by a majority vote of the board  —but there’s a cost attached.

“After such termination, all rights, duties and obligations of both parties shall cease except that the hospital shall continue to pay the CEO his then monthly salary for  the month in which his duties were terminated and for 15 consecutive months thereafter as an agreed upon mitigated service agreement,” the contract states.

If Keith should take another job prior to the end of 15 month period that offers higher or equal compensation, the severance payments would end, a according to the contract.

Keith and MRHC Board of Trustees Chairman Cara Bland were signatories on the agreement, previously approved by a vote of the hospital board during the group’s regular September meeting.

Contact James Beaty at jbeaty@mcalesternews.com.