RMC pays out $542,000 in severance for month of December

The payout came despite the ongoing financial challenges of the hospital due to the coronavirus pandemic.

Former RMC Chief Executive Officer Charles Williams received $420,000 in severance as part of his employment agreement, which ended Dec. 10, 2020, according to documents obtained from RMC as requested under the S.C. Freedom of Information Act.

As part of his agreement, the hospital also paid Williams all accrued but unused paid time off earned through the end of his employment.

“Severance payments are made to executives whose positions are eliminated or whose contracts are not renewed where appropriate,” Interim RMC CEO Kirk Wilson said. “The payments are only made if the recipient signs a severance agreement and general release of liability.”

“The payments are commensurate with their positions and experience and typical time needed to find new employment of a similar nature and in accordance with any contract for their services if such exists,” Wilson continued. “This is commonplace with executive positions in hospitals, industry, media, newspapers and other businesses.”

RMC board Chairman the Rev. Dr. Caesar Richburg defended the severance payout.

“We bundled all three of them, which is a typical practice,” Richburg said. “You will find hospitals even in trying times like this doing so.”

“It is something you don’t want to do but again the practice is there,” he said.

Richburg noted the severance was aligned with Williams’ employment agreement.

“You honor employment agreements,” Williams said.

“We are being laser sharp in the present CEO and others we bring in,” he said. “There is zero need in rapid overturn. We are needing someone to come in with the skill set and technical capability to drop anchor and do the job and do the work.”

The hospital also provided Williams with health and dental insurance benefits for a year following separation, according to the document. If requested, the hospital would also provide outplacement counseling services for half a year not to exceed $7,500.

Williams signed the agreement Oct. 30, 2020. Richburg signed it on Nov. 3, 2020.

RMC Attorney Laura Evans said Williams did not use the health and dental insurance benefits or the outplacement counseling services, so no funds were expended in connection with those categories.

Williams came to RMC in December 2017. He was hired for $400,000 a year for a three-year term. The contract did have an option for a two-year renewal.

The board also agreed to terminate the hospital’s  Chief Operating Officer Nicole Hendricks and former Vice President of Strategy and Marketing Carol Koenecke-Grant in early December.

Hendricks’ last day of employment was Dec. 10, 2020. Her severance package provided her three months of base compensation at $64,070. Hendricks signed the document on Dec. 11, 2020, and interim CEO Kirk Wilson signed the document on Dec. 15.

Koenecke-Grant received $57,785 also for three months of base compensation. Koenecke-Grant signed the document on Dec. 21, 2020.

Evans said neither Hendricks nor Koenecke-Grant had written employment agreements.

“Because their positions were eliminated as the result of restructuring, they were both offered three months of base compensation as severance, which is common in the health care sector,” Evans said.

Koenecke-Grant arrived at RMC in November 2018 and Hendricks arrived in July 2019.

The termination of Koenecke-Grant and Hendricks was touted by hospital officials at the time as saving the hospital more than $500,000 annually.

The total in severance for Williams, Hendricks and Koenecke-Grant combined was $541,855.

Hospital officials defended the payouts despite the fact that for the month of December RMC saw a $1.6 million net income loss.

RMC lost $8.4 million during its 2019-20 fiscal year, due in large part to the impact of the coronavirus on hospital operations, according to its annual financial audit report.

According to the report, RMC’s net position dropped from more than $80 million for the fiscal year ending in 2019 to $71.8 million for the fiscal year ending in 2020. 

The report for February 2021 showed improvement.

RMC is in line to receive about $2 million in Federal Emergency Management Agency grants as well as S.C. Hospital Association funding for testing and vaccines.

During February, the hospital saw a net operating loss of about a $3.2 million. The loss was offset by $2.8 million from the Coronavirus Aid, Relief, and Economic Security Act. Its net loss for the month was about $625,000.

The hospital will continue to receive federal monies allocated for providing COVID-related care during the current fiscal year.