Warren Releases New Details on Genesis Nursing Home Company's Massive CEO Payout
Nearly 3,000 Genesis Nursing Home Residents and Staff Died in COVID-19 Pandemic; Company Accepted Hundreds of Millions of Dollars in Federal Aid and Was Still Driven Into Near Bankruptcy,
CEO Paid $8 Million in 2020; Left Company Just Two Months After $5 Million "Retention" Payout
"Your residents, your shareholders, and the American public deserve an explanation for this greed and the tragedy that preceded it"
Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today released Genesis Healthcare, Inc.'s (Genesis) response to her January letter and sent a letter to the company, revealing new information that the company CEO - who left the company in near bankruptcy in January 2021 - has been paid awarded $8 million in salary and bonuses since the start of the pandemic. The information from Genesis also revealed that the company - which "restructured" itself earlier this month, delisted from the New York Stock Exchange and handed over much of its control to private equity - received $665 in state and federal aid in 2020. In her new letter to Genesis, Senator Warren raised new questions about why the company lavishly rewarded its CEO after more than 2,800 of its residents died of COVID-19 and despite the fact that he left the company in dire financial conditions.
"A large portion of this pay was approved in late 2020, when it was clear that the company, under Mr. Hager's watch, was already in deep financial trouble. In short, it appears that Mr. Hager walked away with an extraordinarily rich compensation package, leaving behind thousands of dead and sick nursing home residents and staff and a company in financial ruin despite being bailed out by hundreds of millions of dollars in taxpayer funds," the Senator wrote.
Senator Warren's January letter was sent after reports revealed that Genesis Healthcare paid a $5.2 million "retention" bonus to George Hager, Jr. - the company's CEO - just two months before he suddenly announced his retirement in early January 2021.
The Genesis's response provides new information about Mr. Hager's compensation, and raises new questions about the massive payouts, which totaled $8 million since January 2020. It reveals that Mr. Hager, who as CEO was responsible for the company's operations as it spiraled into near-bankruptcy - received a $5.2 million retention bonus just two months before he left the company. It also revealed - but provided no explanation for why - he received both a $650,000 special payment for service during the COVID crisis and a $300,000 consulting fee on top of his standard salary and incentives. Genesis also paid Mr. Hager more than $1 million in incentive compensation, though it did not describe the exact incentives that Mr. Hager successfully met. Last, it reveals that that Mr. Hager received a special payment arrangement for his $5.19 million retention advance to save on his taxes - with no explanation of how this benefited the company, its shareholders, and its nursing home residents.
In today's letter, Senator Warren asked the company to explain the payouts to Mr. Hager. She also raised concerns about the company's March 3 announcement that it is undergoing a major restructuring including termination of dozens of leases (leading to questions about whether residents would be forced to move, or who would be responsible for their care); the sale of a large percentage of the company to private equity firm ReGen Healthcare, and the delisting of the stock from the New York Stock Exchange.
"Your residents, your shareholders, and the American public deserve an explanation for this greed and the tragedy that preceded it," the Senator wrote.
To better understand Genesis' decisions and the company's restructuring, the Senator asks the company to provide more information on how much federal and state aid it has received to date and how the board came to the decision to provide these exorbitant bonuses to its top executives.
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