Audit confirms former MetroHealth CEO hid unauthorized bonuses
MetroHealth System has made headlines in the past few months due to an unfolding scandal involving its former CEO allegedly giving himself nearly $2 million in unauthorized bonuses. Now, after conducting an independent audit, MetroHealth has reconfirmed that Akram Boutros, MD, circumvented rules to pay himself the bonuses and took steps to hide the money from the company's board of trustees and others.
In November 2022, Boutros was fired by MetroHealth System, which is based in Cuyahoga County, Ohio, and operates four hospitals, four emergency departments and more than 60 additional locations. At the time, the board had discovered the bonuses and alleged that they were unauthorized. Boutras, it seems, had given himself the bonuses over a four-year period based on self assessments.
After Boutros was fired, he filed a lawsuit against MetroHealth System board of trustees and paid back the money with interest. MetroHealth System also hired a new CEO.
Most recently, MetroHealth System completed an independent audit that the company says confirmed and expanded on its original allegations that Boutros gave himself millions through unauthorized means. Accounting firm BDO conducted the audit and reviewed policies, practices and issues surrounding the former CEO’s actions.
Specifically, the report found Boutros added himself to a pool of employees eligible for a supplemental bonus pool. He did this without the board’s approval, while the board has sole authority to evaluate and approve bonuses for the CEO. Through self assessments, Boutros calculated his own bonuses, the report stated. Plus, he failed to disclose those bonuses “on multiple occasions.”
“Dr. Boutros violated the System’s code of ethics and compliance (the “Code”),” the audit report found. “The Code specifically states under Conflict of Interest, that ‘we do not use our position, or knowledge gained in our position, for personal benefit-apart from our normal compensation.’ In this case, Dr. Boutros, in violation of this policy, used his position as CEO to design an incentive program, the SPBVC, where he was a beneficiary of that plan and failed to disclose this to the BOT or receive their authorization.”
As a result of the scandal, Cuyahoga County Executive Chris Ronayne has said he will step up monitoring of MetroHealth System and will sit down with the health system to discuss the audit findings. He has asked a senior advisor to attend MetroHealth System board meetings, Cleveland.com reported.
MetroHealth has already implemented some changes since Boutros was fired, including the board receiving actual payroll data at least once annually, creating a standalone compensation committee and ensuring compensation consultants verify details of the CEO’s pay and benefits with the company’s human resources instead of just data to the board.
Around the same time of the release of the audit, MetroHealth CFO Craig Richmond resigned from his position after nine years with the company, though it’s unclear if the resignation had anything to do with the CEO bonus scandal.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."