Cape Cod Healthcare, union spar over furloughs, CEO salary


The Massachusetts Nurses Association is expressing disapproval with executive pay at Hyannis, Mass.-based Cape Cod Healthcare in light of furloughs the health system implemented, according to the Cape Cod Times.

Cape Cod Healthcare has furloughed 600 of its 5,700 workers for 30 days in response to financial effects of the COVID-19 pandemic.  

But the union said it takes issue with the furloughs as the health system's most recent tax return forms — filed with the state attorney general's office and published by ProPublica — show President and CEO Michael Lauf earned nearly $3 million in the fiscal year ending Sept. 30, 2018, up 82 percent from $1.6 million the year prior. 

"It doesn't make sense to cut the employment of dedicated employees who provide direct patient care and not cut exorbitant salaries of high-paid executives. This undercuts what Cape Cod Healthcare stands for," David Schildmeier, a union spokesperson, said in an email to the Times.

Cape Cod Healthcare said in a statement provided to Becker's that Mr. Lauf's pay for 2018 was high because it included the multiyear vesting of a long-term retention plan.

The health system said this is "not something that happens every year" and "was based on meeting stringent goals for quality of patient care and financial goals for five years."

In 2019, Mr. Lauf made more than $1 million less than the year prior, and his base salary is less than $1 million and remained the same since 2017, according to Cape Cod Healthcare.   

The health system noted Mr. Lauf also gave up his $78,000 April salary to help increase cash reserves amid the coronavirus pandemic. His base pay this year is about $850,000.

"Exec compensation is based on average compensation paid to people across Massachusetts and the country performing the same role," according to the statement. "The board is advised by independent compensation consultants who provide that data.  So yes, it is fair, and it's what’s necessary to attract and retain great people."

Mr. Schildmeier told the Times the health system can afford to pay employees providing direct patient care without furloughs. 

Read the full Times article here


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