Former Northeast Health System President and CEO Stephen Laverty collected more than $1 million from the non-profit hospital chain after he resigned under fire in the fall of 2008, newly released financial records show.
The earnings, $1.08 million in total, include a settlement package of more than a year of salary plus pay for the one month the controversial Laverty was at the helm of Northeast, which owns Addison Gilbert Hospital and Beverly Hospital.
The documents provide the first details of how much Northeast, now laying off workers and cutting costs, was willing to pay to part ways with its CEO who had just endured no confidence votes from nurses and doctors plus the arrest of one of his top managers.
Yet while a million dollars for a year of vacation seems a steep price, according to public disclosure documents filed with Massachusetts Attorney General Martha Coakley, Laverty's "golden parachute" could have been even larger.
Under the terms of their executive contracts, Northeast is obligated to pay their CEOs up to two full years of salary if they are fired without cause.
As part of Laverty's resignation, both sides agreed not to discuss the settlement or any of the details that led them to part ways.
The $1 million compensation package was only slightly more than the $922,000 Northeast paid former CEO Robert Fanning, who left under brighter circumstances, in unused vacation pay when he resigned in 2002.
"I have no understanding of what you are talking about," Laverty told the Times when asked about his settlement package Wednesday afternoon at his home in Concord. He then hung up the phone.
A spokeswoman for Northeast Health System Wednesday said she could not comment on Laverty or the terms of any agreements between the company and past employees.
In Gloucester, Laverty's tenure at Northeast was marked by mistrust from residents and local officials who feared his top goal was to downsize Addison Gilbert and consolidate services at Beverly Hospital.
Strained relationships with politicians and a lack of communications with the public contributed to the perception that Northeast under Laverty was not forthright with the community.
As Sen. Bruce Tarr, a leader in the effort to keep services at Addison Gilbert told Gloucester City Council last week that relations with new CEO Ken Hanover are "outstanding" compared with the previous administration.
From that starting point, a series of controversies hit Laverty in 2008, starting with the protested resignation of the doctor and nurse practitioner at the Gloucester High School Health clinic over the hospital's refusal to allow the distribution of contraceptives during a period of soaring teen pregnancies.
Explanations by Addison Gilbert officials about their reasons for not allowing contraceptives, centered around concerns over liability, never satisfied many in the community.
Then in September 2008, with the debate over contraceptives still festering, Paul Galzerano a former Northeast vice president and Laverty's friend from their days at Winchester Hospital, was arrested on receiving stolen property charges. In a Sept. 30 raid on Galzerano's Groveland house, police seized $200,000 in antiques and paintings.
This June Galzerano was indicted on bribery charges in an alleged kickback scheme tied to the $50 million expansion of Beverly Hospital.
Soon after Galzerano's 2008 arrest, nurses at Beverly and Addison Gilbert, who had long complained of a "hostile" relationship with management, called for Laverty's ouster. Northeast doctors had issued a no confidence vote that April.
Since Laverty's resignation, relations between Northeast and the Gloucester community have improved, if the company's financial position hasn't.
As part of its effort to make up a $15 million budget gap this fiscal year, Northeast is in the process of laying off 100 workers throughout the company.
The cost of Northeast's divorce with Laverty went beyond the dollars included in the settlement.
While the company was still paying Laverty, it brought in Dr. Henry Ramini as interim CEO, who was paid $432,000 for leading the company through the rest of fiscal 2009.
Patrick Anderson can be reached at 978-283-7000, x3455, or at panderson@gloucestertimes.com.
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