Hennepin Healthcare pays out nearly $1 million to former CEO

Dr. Jon Pryor, who abruptly left his job as CEO of Hennepin Healthcare last month, will walk out the door with a severance package that totals nearly $1 million, according to documents received Friday by the Star Tribune.

Pryor, who has headed the health care system since 2013, said he submitted his resignation after the board of directors informed him they wanted to go a different direction. He had been under pressure since last summer, after community concerns over hospital research on the sedative ketamine. HCMC, the largest safety-net hospital in the Twin Cities, also has faced financial challenges in part because the national health care system penalizes medical centers that serve the poor.

HCMC's umbrella organization, Hennepin Healthcare, lost $49 million in 2016 and $29 million in 2017 on hospital and clinic operations after posting modest income gains the previous two years, according to the most recent public data.

Sheila Riggs, chairwoman of Hennepin Healthcare's board, declined to comment Friday on the reasons for Pryor's departure but said his severance package is typical for a CEO at a major hospital. Pryor said it's probably on the low end. "Comp packages for CEOs are somewhere between one year and two years" of pay, he said. "I wish it was more. It's reasonable."

Under the agreement, he'll receive $788,902, which represents 12 months of salary, along with $56,538 in unused paid time off (PTO).

Pryor also is eligible for an incentive bonus, but that hasn't yet been calculated. Under the terms of the 2018 incentive plan, he could receive a bonus of up to 35 percent of his base salary, which would amount to $276,115. But Pryor said Friday that he and the organization didn't meet all of its goals and his bonus will be less than that. Hospital spokesman Thomas Hayes said Pryor likely will receive less than half of the maximum bonus.

The system also will pay its share for his retirement and health benefits for a year, provided he pays his share.

County Board Chairwoman Marion Greene, who also serves on the health system's board, agreed Pryor's severance package is the norm.

"Given that finances are tight, yes, I would rather it wasn't the package. But it is what it is," she said. "It was negotiated when he was hired."

A similar package is likely to be offered to a new CEO. "I would love to drive a harder bargain, but I also want to be realistic about what it takes to get somebody to be the CEO of a system like this," Greene said.

Riggs said Friday that the board is in the "early stages" of finding Pryor's replacement. Dr. John Cumming is serving as the acting chief executive.

Since last summer, the hospital has been embroiled in investigations into its use of the sedative ketamine on patients by paramedics in the field. Two politicians called the research "unconscionable and unethical" after the Star Tribune reported on a ketamine study that didn't require prior consent from patients.

"I love Hennepin Healthcare. It's a great institution," he said. "They do great work. They've got great purpose. The community really benefits from Hennepin Healthcare. I think we made great advances in my six years there, and I miss the people, miss the work and I miss our patients."

Pryor, 62, said he hasn't decided what he will do next. "I have lots of different experiences and I'm reflecting on where I can add the most value to medicine," he said.