Grady Interim CEO Faces Questions over Compensation


(APN) DECATUR — Interim Grady Memorial Hospital CEO Pam Stephenson called a press conference Thursday, July 10, 2008, to defend a previously unknown contract she entered into with the Fulton-DeKalb Hospital Authority (FDHA) earlier this year.

“I thought, given the events over the last two days, and let alone the last 16 months, ought to be stated coming from my mouth [sic], not in third party, not in anyone characterizing who or what I am but Pam Stephenson talking about Pam Stephenson,” the Georgia House Representative said before about two dozen close supporters.

Stephenson, who was named Interim CEO by the FDHA January 28, 2008, after the FDHA fired previous CEO Otis Story, spent over an hour Thursday defending herself against harsh claims made against her in the media this week over her CEO contract.

It all began when The Atlanta Journal-Constitution newspaper (AJC) reported Monday, July 7, 2008, that Stephenson entered into a two-year, $1.2 million contract with the FDHA to be interim CEO shortly before that Board handed over daily control of the Grady Health System to the Grady Memorial Hospital Corporation (GMHC).

The AJC report noted Stephenson would receive a $600,000 annual base salary and potentially a separate check for $750,000 when the GMHC hires a permanent CEO replacement.

Grady Hospital nurse Rita Valenti told Atlanta Progressive News she was furious to learn Stephenson received such high compensation when employees’ pensions are being frozen.

These figures angered some officials, according to the AJC, at a time when Grady is facing financial hardships.

On Thursday, the AJC published another story quoting specific public officials who were critical of the deal.

State Rep. Mike Jacobs (R-Atlanta) called the contract a “sweetheart deal done in secret” and said Stephenson should step down as FDHA Chair and GMHC Vice Chair while continuing to serve as interim CEO.

FDHA member Carl Patton told the AJC Thursday that he was concerned about the stipulation that Stephenson could receive as much as $750,000 should the GMHC replace her within the first year, noting such agreements are for executives with many years of experience.

“What about me made my deal different from my predecessor,” Stephenson asked Thursday. “I consider sweetheart deals… those things that have no deliverables, those things that the person is not competent, those things that are there given to people without a benefit of a bargain. The benefit of this bargain has been more [to the hospital] than less. What was the sweetheart deal by standing up and having daggers in me about caring about Grady? What was sweet about that deal?”

Stephenson noted she is receiving the same “conditions and considerations” as Story. “Mr. Story had perks like retention bonuses that I crossed out,” she said. “I never asked for perks that would have cost the system more.”

She added she actually took less money than what was offered during negotiations.

Fulton County Commissioner Lynne Riley, in Thursday’s AJC, called the deal secret and also called for Stephenson to step down from her positions as FDHA Chair and GMHC Vice Chair.

Stephenson has drawn political criticism for serving in these roles while also serving as CEO, arguing she has a conflict of interest.

“If all your interests are going toward the same, I’m not of the conflict,” Stephenson said Thursday. “The conflict arises when you have split interests. All my interests are at Grady Health System and it always has been and will continue.”

When asked if she would step down from either of those positions, Stephenson said she did not know.

“My plans are to do what’s in the best interest of the Grady Health System, my community, and [doing] whatever that takes,” she said.

Riley’s fellow commissioner Tom Lowe questioned the legality of the contract because it was not approved in an FDHA public meeting and called on the state’s attorney general’s office to launch an investigation.

“No one has done anything wrong,” Stephenson said Thursday.

Geoffrey Heard, FDHA Vice Chairman who signed the contract and acted as a counterpoint to Stephenson during the contract negotiations, told the AJC Wednesday he did not recall when Stephenson signed the contract or whether the FDHA formally approved the contract during a public session.

Three members of the FDHA–Patton, Thomas Dortch, and Dick Teters–  all told the AJC this week that they had neither seen the final contract nor voted on it.

Stephenson said Thursday the FDHA did not hold a formal vote on the contract. Furthermore, she said that it is not necessary for the FDHA or any subcommittee of the FDHA to formally vote on such a contract either in executive session or public session.

Heard also stated no formal vote was necessary in Thursday’s AJC report.

Stephenson said she signed the contract while the FDHA still controlled the Grady Health System, but did not name a specific date she put her signature on the document.

“If the insinuation…is that a contract was signed going forward with the new corporation [the GMHC], then that is absolutely false,” she said. “The [FDHA], when that contract was signed, was still the governing entity. The [GMHC] is the successor in interest. I would not have signed a contract after the governing entity had changed.”

Patton told the AJC Thursday he would take his concerns about the contract to the next FDHA board meeting on July 28, 2008, for further discussion.

Stephenson said Thursday she is currently in negotiations with GMHC Chairman A.D. “Pete” Correll to resolve the situation and that those talks are going “very well.” But she could not give a specific timetable on when the two parties would come to an agreement.

When asked if she thought the contract should be done over, Stephenson did not answer one way or the other because she said she did not want to “get ahead” of her fellow FDHA members.

As previously reported in Atlanta Progressive News, the GMHC announced Monday, July 7, 2008, four finalists for the CEO position and Stephenson is not one of them. The finalists will meet with the GMHC over the next two weeks and a final vote could come soon after.

Correll told APN Monday he would like to see the new CEO take over September 1, 2008; but that date could change, he said.

About the author:

Jonathan Springston is a Senior Staff Writer for The Atlanta Progressive News and may be reached at

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