Wayne Smith is the only CEO Community Health Systems has ever had, and neither he nor the company’s board has said anything about when he might step away. But those directors — Smith among them — last week sent a pretty clear signal that they’re confident in the frontrunner to succeed him.
CHS directors on Wednesday approved raises for a number of members of their executive team. (Smith, who is also chairman of the board, will again be paid a $1.6 million base salary and be eligible for a cash bonus of up to 225 percent of that figure.) The largest of those was for President and COO Tim Hingtgen, whose base salary has reached seven figures for the first time, climbing 7 percent to $1 million from $935,000 last year and $900,000 in 2018. General Counsel Ben Fordham was granted a 4 percent raise to about $607,000 while the board gave Chief Medical Officer Lynn Simon a 3 percent salary bump to about $584,000.
Most noteworthy among those and other long-term compensation decisions, however, was the board’s approval of a special award of 200,000 non-qualified stock options for Hingtgen. In a regulatory filing, the company said the goal of the carrot is to give its president, who has been in his current roles since September 2016 and in 2017 joined the board, plenty more reasons to stick around for the long haul.
“This award is intended to support the company’s strategic succession planning process and further align Mr. Hingtgen’s overall compensation with increases in stockholder value,” CHS executives said.
Hingtgen’s special award (and other option grants for him and his C-suite peers) will become effective March 1 and is nearly three times the number of non-qualified options he will receive as part of his regular 2020 pay package. (He also will receive 75,000 time-based options and up to 300,000 performance-linked options.) At Monday’s CHS closing price (Ticker: CYH) of $6.02, Hingtgen would have to shell out more than $1.2 million to exercise the options.
“The board of directors and company value Tim Hingtgen’s leadership as CHS continues to make steady progress toward the organization’s long-term goals,” the company said in a statement to the Post. “This special one-time grant of stock options further aligns Mr. Hingtgen’s incentive compensation with our growth and value initiatives and is also designed to incentivize a long-lasting leadership role with the company.”