Finance Finance News Hospital CEO’s $30m pay cheque labelled ‘appalling’

Hospital CEO’s $30m pay cheque labelled ‘appalling’

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Australia’s highest-earning chief executive isn’t a mining baron or media tycoon, but rather a man who runs hospitals.

According to the Australian Council of Superannuation Investors’ CEO Pay study, Ramsay Health Care’s Chris Rex pulled in $30.8m in 2014, a figure that includes exercising options and performance rights, along with the vesting of shares under long-term incentives.

Reclaim Mildura Base Hospital chairperson Jo Clutterbuck didn’t mince words when she told The New Daily what she thought of Mr Rex’s pay packet.

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“It’s absolutely appalling,” she said.

“I have no doubt he is worth that much money to Ramsay Health, because of the profit he delivers – every single decision is delivered according to profit.”

Wedding Photography - Avior Pictures
Chris Rex made a tidy profit in 2014.

Ms Clutterbuck’s problem is that Ramsay Health Care is not just Australia’s largest private hospital operator – the booming company is growing an ever-larger public health sector presence, with state governments increasingly turning to public/private partnerships to run hospitals.

With 215 hospitals across five countries, Ramsay Health Care’s five public facilities in Australia are a small proportion of the company’s portfolio.

The public hospitals include Mildura Base Hospital, a contract Ms Clutterbuck unsuccessfully lobbied Victoria’s former Liberal government not to renew through to 2020.

The Reclaim Mildura Base Hospital campaign group blame the private operators for what they see as falling hospital standards and staff shortages.

Mr Rex’s $30m in earnings equate to the wages of an additional 545 nurses for a full year, if paid the average salary listed by the Australian Nursing and Midwifery Accreditation Council.

Chris Rex’s $30m in realised annual earnings is equivalent to the cost of:

• Year-long diabetes treatment for 7453 Australians (Diabetes WA figures)

• Employment of an additional 545 nurses for a full year (ANMAC average listed wages)

• Removal of 6818 skin cancer melanomas (NSW Government average cost of care figures)

• Insertion of 4400 pacemakers (NSW Government average cost of care figures)

• Over 37,000 home kidney dialysis sessions (Kidney Health Australia figures)

Ms Clutterbuck is now lobbying the Daniel Andrews Labor government not to take a two-year option on the contract.

Even though it was the Bracks Labor government that originally engaged a private company to run the hospital in 2001, Ms Clutterbuck holds out more hope that a Labor government will listen to the community’s concerns, pointing to the extensive financial contributions Ramsay Health Care has made to the Liberal party in the past two decades.

In the past 17 years the Liberal party has received more than $1.8m in political donations from Ramsay Health Care and affiliated groups, while the Labor party has received $120,000 over the same period.

r392094_4063331But do public/private health partnerships work?

The centre-left McKell Institute in late 2014 released a report into private/public health projects that concluded that while outcomes varied on a case-by-case basis, such an approach generally resulted not only in considerable financial detriment to state governments, but significant negative impacts on hospital staff, patients, and general service delivery.

The study did note that while some private/public partnerships worked effectively, such as Ramsay Health Care’s Joondalup Hospital, when the project does not go as planned, the costs are invariably transferred back to state governments.

At the time of publication, Ramsay Health Care had not responded to The New Daily’s request for comment.

Ms Clutterbuck said Ramsay Health Care would only continue to push into the public health sector in Australia, as the private hospital market here had reached saturation point.

There are other avenues for the company, which is one of the best performers on the ASX in recent years, to explore, however, according to Ramsay Health Care’s annual 2015 results briefing, significant expansion is planned for the French and Chinese health markets.


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