Warren: Bonus to nursing home CEO an act of “unfathomable greed”

8

U.S. Senator Elizabeth Warren is calling out Genesis Healthcare for its “inexplicable and unseemly decision” to give its then-CEO a $5.2 million retention bonus after the deaths of more than 2,800 residents at the chain’s facilities and as it accepted federal aid during the novel coronavirus pandemic. 

In the letter dated January 27 to current Genesis Chairman and CEO Robert Fish, the Massachusetts Democrat bashed the country’s largest publicly-traded nursing home chain for “unfathomable greed amidst a public health tragedy and economic crisis.” 

The company’s board approved “exorbitant” bonuses to now-former CEO George Hager Jr. and other top executives after collecting more than $300 million in state and federal Coronavirus Aid, Relief and Economic Security (CARES) Act funding intended to help keep the financially troubled nursing home chain going, Warren wrote.

“CARES Act funding should not be used to line the pockets of company executives who fail to address the public health threats from the pandemic, and your company should not be seeking additional public funds while giving departing executives multimillion dollar bonuses,” Warren, a member of the Senate’s Special Committee on Aging, stated. 

Awarded the $5.2 million payout in October, Hager retired less than three months later and was then given another $650,000 bonus and a three-month, $300,000 consulting contract, according to a Genesis regulatory filing. The board in November also set aside $2.1 million in a trust to be kept from creditors and to be used for bonuses for seven high-ranking officers. 

Genesis did not respond to requests for comment from CBS MoneyWatch. 

AARP CEO: Nursing home deaths an “unconsciona… 05:07

Nursing homes account for a sizable portion of the more than 443,000 U.S. COVID-19 deaths, and outbreaks at Genesis facilities caught the attention of lawmakers over the summer. It operates 325 nursing homes and rehab centers in 24 states.

“More than 1,500 Americans have died and many more have been infected at facilities owned by your company, with at least 187 of your facilities reporting cases of the coronavirus,” members of a House panel looking into the impact of COVID-19 wrote Hager in June.

The toll at Genesis reportedly nearly doubled in the second half of 2020, with 14,352 confirmed cases among its residents and 2,812 deaths as of December 20, according to the Washington Post. An analysis of Medicare data by the news outlet found almost all of Genesis’ nursing homes running short on personal protective equipment up until late November, after the company’s board had signed off on Hager’s bonus. 

In financial distress for years, Genesis has cautioned its investors since the summer that the pandemic had worsened matters to the point where it might have to file bankruptcy. 

“The virus continues to have a significant adverse impact on the company’s revenues and expenses,” Hager stated in a November 9 earnings release in which the company reported a net loss of $62.8 million for the third quarter of 2020. Government stimulus in the third quarter fell almost $60 million short of the company’s COVID-19 costs and lost revenue, Hager said.

“There is no question Genesis will need ongoing support from the federal government and our capital partners to sustaining operations,” Hager told analysts during an earnings call that day. 

Genesis reported a loss of $96 million for the first nine months of 2020. 

View original post