Thursday, March 5, 2015

Kindred at Home: Causby's Compensation


You picked a great time to retire.  I ran across this document outlining pay and benefits for David Causby, President of Kindred At Home (formerly Gentiva).
A base salary (“Base Salary”) of $550,000 per year payable in equal installments in accordance with the Company’s normal payroll procedures. Executive may receive increases in his Base Salary from time to time, as approved by the Board. 
(b) In addition to Base Salary, Executive shall be entitled to receive bonuses and other incentive compensation as the Board may approve from time to time, including participation in the Company’s annual short-term incentive compensation plan and long-term incentive compensation plan, in accordance with the terms and conditions of such plans as may be in effect from time to time, subject to the following:
(1) For 2015, the Executive’s target bonus under the short-term incentive plan shall be 60% of Base Salary and his maximum bonus under the short-term incentive plan shall be 101.25% of Base Salary;
(2) For 2015, the Executive’s target bonus under the long-term incentive plan shall be 50% of Base Salary and his maximum bonus under the long-term incentive plan shall be 100% of Base Salary.

Here's the scary part for Gentiva's long time employees, especially given customer service scores are nowhere to be found.:
    1.  Bonus of $500,000 for leadership of a successful integration of Gentiva into Parent;
    2.  Bonus of $250,000 for achievement of one-year synergies expected to be achieved in connection with the Merger 
    3.  Bonus of $250,000 for attainment of 2015 Gentiva budget targets.  

    It's all budgets and cost cutting.  I expect service cuts to negatively impact revenue, just as when Gentiva integrated Harden and later when the company enacted cuts for the last four months of 2014. 

    Plotting to garner Mr. Causby his $1 million in bonus money is likely in high gear as I write.  This comes after Kindred put $1 million cash in Causby's pocket on February 2nd.

    In consideration for the provisions relating to non-competition, non-solicitation and confidentiality set forth in Sections 12, 13 and 14 of this Agreement, upon the Effective Date, Executive shall be entitled to a one-time, non-refundable lump-sum cash payment of One Million Dollars ($1,000,000) which shall be paid by the Company within thirty (30) days following the Effective Date. Kindred Healthcare, Inc. hereby guarantees the Company’s obligation to pay Executive this One Million Dollar ($1,000,000) payment, and in the event the Company fails to pay within thirty (30) days of the Effective Date, Kindred Healthcare, Inc. shall make the payment to Executive within five (5) business days.  
    There's much more to Mr. Causby's compensation.  For those with a strong stomach I offer:
    a one-time grant to Executive of 135,940 restricted stock units of Kindred Healthcare, Inc., with such grant to be effective on the Effective Date (February 2nd)

    a grant of an equity stock award to Executive with a grant date fair value, as reasonably determined by the Executive Compensation Committee, of 150% of Base Salary, which shall be in the form of fifty percent (50%) restricted stock units and fifty percent (50%) performance stock units 
    The above totals roughly $7 million to $7.5 million.  How many Gentiva employees need to be squeezed down or out to pay an incentivized Causby? 

    Employee satisfaction and customer service have always been in the rear seat at Gentiva.  Like the Jeff Gordon commercial Gentiva employees are the poor schlep in the back seat of David Causby's runaway cab.  Kindred took away our seatbelt.  Causby's on a mission and hospice service be damned. 

    Anonymous (from Gentiva)

    1 comment:

    1. Kindred employees are getting the shaft I see pay the bloodsuckers