Massachusetts Senator Elizabeth Warren wrote a letter to Robert Fish, Chairman and Chief Executive Officer of Genesis Healthcare, Inc., dated January 27, 2021, expressing her outrage “about the inexplicable and unseemly decision by Genesis Healthcare, Inc. (Genesis) and its board to approve and pay exorbitant bonuses to its top executives after more than 2,800 residents in its facilities died of coronavirus disease 2019 (COVID-19). The company’s former CEO – George Hager, Jr. – is reported to have been paid a “retention” bonus of $5.2 million in October 2020, only to turn around and announce his retirement earlier this month.”
Mr. Hager also received a $935,000 annual bonus in 2020.
“I would like an explanation for this unfathomable greed amidst a public health tragedy and economic crisis, and to know why Genesis, which claimed to be on the brink of bankruptcy and accepted $300 million in state and federal aid under the Coronavirus Aid, Relief and Economic Security Act (CARES Act), gave its top executive – who was unable to keep nursing home residents safe – a multimillion dollar bonus, in addition to a $650,000 retirement bonus and $300,000 consulting contract.”
“These extraordinary payments were awarded despite the fact that under his leadership, there were 14,352 confirmed cases of COVID-19 and 2,812 COVID-19 deaths at the more than 350 Genesis facilities spanning 25 states as of December 2020.”
“Even worse, reports indicate that “[n]early all of [Genesis’s] nursing homes reported continuing shortages of personal protective equipment through the months of the pandemic…with the situation easing only toward the end of November – after Hager’s big payout was approved.””
“In addition, “the Genesis board also decided in October to put aside $2.1 million in a trust the company described as beyond the reach of creditors, to be used for bonuses for seven of the company’s high-ranking officers.””
“[I]n early November 2020, Mr. Hager stated that “[t]he virus continues to have a significant adverse impact on the company’s revenue and expenses…While we are grateful for federal and state financial support received and committed to date, the stimulus funds recognized in the third quarter of 2020 fell nearly $60 million short of the company’s Covid-19-related costs and the estimated impact of lost revenue…the company remains reliant on adequate and timely government-sponsored financial support to meet its obligations to patients, residents, caregivers and stakeholders.” At the time of this statement, Hager had received over $6 million in bonuses from the company, nearly $4 million more than he earned in 2019 prior to the pandemic.”
“On a November conference call with analysts, Mr. Hager is reported to have said “[t]here is no question Genesis will need ongoing support from the federal government and our capital partners to sustain operations….We are aggressively managing liquidity at every turn. That being said, we are still burning cash.””
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