Valley Children’s Healthcare Board of Trustees Send Letter to Fresno City Council

Valley Children’s Healthcare Board of Trustees Send Letter to Fresno City Council

March 27, 2024

Dear Fresno City Councilmembers,

Valley Children’s has been a vital part of the healthcare system in the Central Valley for more than 70 years, growing from a 42-bed hospital into a nationally recognized pediatric healthcare network. We are proud of the high-quality care we provide children, proud of the people who provide that care – and proud of the solid financial management that has ensured our hospital remains in the strongest possible position to provide that care.

I want to take this opportunity to present some facts about Valley Children’s in response to unfounded criticisms based on recent media coverage.

I believe it is important that you and other leaders in the community understand what the critics got wrong – and to understand what we are doing right every day for our community.

The criticism of our Healthcare Board’s decision to increase our CEO’s salary and benefits is based on flawed, erroneous assumptions about executive compensation and other financial matters concerning our hospital.

In particular, the assumptions made about the compensation for our CEO are based on, at best, an ill-informed reading of our IRS Form 990 from 2021. That year, on the advice of our accountants and tax counsel, we shifted to paying performance bonuses for director level and above by the end of the calendar year in which it was earned. The result was performance bonuses for two years being paid and reported in a single filing year, with one year’s bonus paid a month earlier than in the past.

The resulting compensation figure in our Form 990 for 2021, therefore, does not in any way accurately represent a single year’s earnings for our CEO or other top executives.

This is a one-time accounting adjustment. In fact, the CEO’s annual salary since July of 2020 is $1,711,341, which is in line with other health system CEOs with similar levels of responsibility; the remainder of his compensation largely consists of bonuses based on meeting significant performance goals – again, the norm for health system CEOs.

In addition, executive compensation for the CEO and other top executives is determined on a thorough review and recommendations from multiple, independent executive compensation consultants. Further, the loan provided to the CEO for the purchase of a home is not at all unusual as a retention tool; should the CEO voluntarily leave the organization within the 10-year period after the loan was advanced, the unamortized balance of the loan is required to be repaid. And we are able to provide an appropriate level of compensation for our leaders because of the superb performance of our investment portfolio and our financial stewardship – not from the payments we receive from the Medi-Cal program, which, generally speaking, do not even cover the cost of the care we render to Medi-Cal beneficiaries.

In short, the CEO’s compensation is determined through a widely recognized best practice process.  With regard to the criticism leveled against the Board of Valley Children’s Healthcare, there is no “there” there.

What Valley Children’s and its leadership have done is make sound financial decisions year in and year out. While many other hospitals in the region and across California are in financial distress, some even teetering on financial ruin, Valley Children’s has done everything we can to operate efficiently, invest wisely and work effectively so that we can support the children in our community that depend on us.

Valley Children’s provides some of the highest quality care of any children’s hospital anywhere in the nation. Despite the fact that nearly 75% of our patients are from very low-income households and often face health challenges their more affluent peers do not, we ensure that these children have the same access to the best quality care. Our results speak for themselves: in fact, for the last eight years we have been ranked as one of the best children’s hospitals in the country in several pediatric specialties – and we are in the top 3% of children’s hospitals in the country for quality and patient safety.

We also are actively working in collaboration with community partners to address one of the most significant challenges faced by every hospital, especially in regions like ours: attracting and keeping top-quality staff at every level.

Our highest priority as part of our collaboration with Fresno State is to expand the opportunities for nursing education in the Central Valley, which is critical to help address the growing nursing shortage.  In addition to providing many of our nurses with the opportunity to obtain four-year degrees, we are collaborating with the university to increase the number of nursing graduates by 50% over the next five years.

In addition, we offer a wide range of paid internships to undergraduates in fields from clinical research and physical therapy to business development and IT, helping them build the foundation of a career in healthcare in the Central Valley.

We also continue to invest in compensation and benefits for all of our staff, including an average salary and benefits increase of 11% for full-time employees since 2020. New benefits for full-time employees include adding Charlie’s Clinic to support access to high-quality primary care for our staff and their families, increasing our Education Reimbursement limits to the IRS maximum for all staff and adding a student loan repayment program to assist staff in eliminating education debt.

We are in a solid position thanks to our incredible staff and to our extremely talented and devoted leadership. Working together, they are doing all it takes to keep Valley Children’s strong and in a position to continue delivering care for the children, and in a growing number of cases, the parents and adults, of our community.

We are fortunate to have leaders of the caliber of our CEO Todd Suntrapak at a time when there is intense nationwide competition for them, and to have the kind of staff that provides the level of care our community has come to expect. We are proud of the decisions we have made and proud of what we do for our community.



Michael Hanson and members of the Valley Children’s Healthcare Board of Trustees

Return To Previous Page