While Washington Hospital is a public entity, the Hospital competes for its employees and executive leadership from the same labor pool as for-profit and large corporate healthcare providers.  As a result, the Hospital must pay market rate salaries to recruit and retain top quality, professional staff.  The Hospital's patients deserve the best from those who take care of them as well as those who lead Washington Hospital Healthcare System.

Unlike a County Hospital, which is funded through a tax-supported, county-government structure, Washington Hospital is independent of any civic affiliation and its operations are self-supporting.  All of the expanding services and programs are made possible from the successful operations of the Hospital and are not funded from any tax sources. 

The Hospital's current construction projects are being partially funded by a general obligation bond, Measure FF, which was passed by voters in 2004.  Proceeds from this bond are limited to use for current construction projects and are not used to pay the salaries of any Washington Hospital administrators or employees. 

The Chief Executive Officer's Compensation is set in a written employment agreement. Under the terms of the agreement, the CEO is entitled to receive annual increases in salary as determined by the Board in the Board's sole discretion.  Annual salary increases are not guaranteed.

Every year, a portion of the potential CEO compensation is placed at risk.  While it is the intention of the Board of Directors to pay the Hospital CEO in line with the Board's compensation philosophy, a percentage of this is at-risk incentive compensation.  Awards of incentive compensation are not guaranteed.  Each year, the Board is responsible for comparing the Chief Executive Officer's performance against overall goals and depending on the Chief Executive Officer's performance, the Chief Executive Officer is eligible to receive incentive compensation.

Consistent with its philosophy for wage parity for all of its employees, the Board has adopted a compensation philosophy with regard to the Chief Executive Officer which provides base salary at around the 65^th percentile of the market utilizing a blended California and adjusted national peer group, which includes hospitals of similar size, scope and business model, plus an incentive award opportunity sufficient to deliver total cash compensation in the range of the 75^th percentile of the comparable peer group. This method is standard practice to determine the compensation levels of most California health care CEOs.

Annually, the Board has retained Integrated Health Strategies, an independent national compensation consulting firm, to provide current market information regarding the Chief Executive Officer's cash compensation to allow the Board to make an informed decision regarding compensation as it relates to its compensation philosophy.  Integrated Healthcare Strategies has extensive experience with a client base that encompasses more than 350 major healthcare systems, 1,000 hospitals and 17,000 executives. While it was recommended by the compensation consultants that a 2008 market adjustment of 4% in base compensation be implemented to remain competitive with a comparable peer group, Ms. Farber indicated that, because of the state of the economy, she would not accept the recommended market adjustment, which kept her base salary at $593,000

In December 2008, Board reviewed the Chief Executive Officer's performance for the fiscal year ended June 30, 2008, including review of all aspects of Washington Hospital Healthcare System including: financial, organizational, operational and strategic goals. The Board determined that the Chief Executive Officer's performance was exceptional, especially given the challenges of the economy. As a result, she was awarded an additional at-risk compensation for meeting the goals, which is significant given the current economic environment.  Specifically, the Board noted that:

1. Washington Hospital Healthcare System remained financially strong, including achieving operating income in excess of $15,000,000 as verified by an independent audit by PricewaterhouseCoopers; this achievement was exceptionally noteworthy given the challenging economic times.
2. Washington Hospital Healthcare System through the Chief Executive Officer's leadership prepared and implemented a strategic plan for outpatient services generating significant revenues for the Hospital.  
3. Washington Hospital Healthcare System has a track record of significant and sustained financial success, which underscores the operational strength of the Hospital.
4. The financial results are remarkable especially when considered against the charity care provided by the Hospital.
5. The Chief Executive Officer has assembled a strong, professional team, which allows for the financial success and in turn, quality of care and charity care.
6. Washington Hospital Healthcare System received Joint Commission accreditation for the maximum term possible with praise for the quality of care provided to residents of the District.