Allina CEO Ken Paulus won't take pay until nurses settle

  • Article by: CHEN MAY YEE , Star Tribune
  • Updated: May 26, 2010 - 6:05 AM

Allina's chief executive made the offer, but talks haven't yet resumed.

Ken Paulus

Photo: David Joles, Star Tribune

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The chief executive of Allina Hospitals and Clinics is voluntarily working without pay until the Twin Cities' biggest hospital chain reaches an agreement with its nurses.

After Twin Cities nurses voted overwhelmingly to authorize a one-day strike last week, Ken Paulus sent an e-mail to all Allina employees saying he had asked his board to suspend his pay as a way to "align our leadership with you."

The gambit comes amid the most contentious contract negotiations between 14 Twin Cities hospitals and their 12,000 nurses in a quarter century. Allina owns five of the 14 hospitals involved in the talks.

While noting that Allina "cannot deliver our mission" without nurses, Paulus reiterated that the landscape for health care has changed dramatically in recent years, with lower payments, a tough economy and rising charity care.

"My first priority is to resume our discussions with the MNA (Minnesota Nurses Association)," he wrote in the e-mail sent Thursday. "We will do everything we can to avoid a strike, and that begins with continuing the dialogue."

Since then, Allina is the only hospital group to contact the MNA to try and restart talks. Nonetheless, the MNA said Tuesday that Allina had not come up any new proposals and had instead asked the MNA to modify the nurses' proposals.

"The hospitals are saying one thing publicly but in reality are doing everything in their power to push Twin Cities nurses out on strike," MNA spokesman John Nemo said.

As for Paulus' pay suspension, Nemo added, "it's a publicity grab. That's a very nice gesture ... but it's not going to do anything to resolve the contract."

Allina spokesman David Kanihan confirmed Tuesday that the board did suspend Paulus' pay effective Thursday, May 20.

Maureen Schriner, overall spokeswoman for the hospitals, described Paulus' pay suspension as "a peripheral issue" and declined to say if any other hospital leaders have offered to do the same.

Paulus was promoted from chief operating officer to chief executive last June, taking over from Dick Pettingill. Paulus made $1.1 million in salary and other compensation in 2008, while he was still chief operating officer, while Pettingill made $1.8 million. Paulus' promotion would have come with a raise, but his 2009 compensation isn't yet publicly available.

Although the contract dispute is over nurses' salaries, pensions and work rules, hospital CEO salaries have featured as a sideshow. Every time the hospitals have cited tight finances as a reason for cutbacks, the nurses have shot back that part of the problem is that hospital executives make too much money and spend too much on fancy new buildings.

A full-time hospital nurse in the Twin Cities makes an average of $79,000 a year. However, since the majority work part-time, the average salary for all hospital nurses is $62,600.

The morning after the MNA strike vote, Paulus said in his e-mail that he had woken with "plenty of worries."

"It reminded me of something my mom said a number of years ago that has stuck with me: that 'a family is only as happy as its saddest member,'" he wrote.

Besides suspending his own pay, Paulus assured Allina's non-nursing staff that they would not be asked to take time off -- paid or unpaid -- as a result of a one-day strike, adding that management would be the first to take mandatory paid time off or unpaid furloughs, if needed.

Chen May Yee • 612-673-7434

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