Warren Questions Nursing Home Chain Genesis Healthcare on Millions of Dollars in Bonuses to Executives After the Death of Nearly 3,000 Residents and After the Company Accepted Millions of Dollars in Taxpayer-Funded Aid
There were over 14,000 COVID-19 cases and 2,812 deaths at Genesis facilities; Genesis paid a $5.2 million "retention bonus" to its CEO just two months before he announced his retirement;
"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"
Washington, DC - United States Senator Elizabeth Warren (D-Mass) sent a letter to Genesis Healthcare, Inc. (Genesis), one of the nation's largest nursing home chains, asking why their top executives, including their recently retired former CEO, have received millions of dollars in bonuses after more than 2,800 of their residents died of COVID-19 and despite the fact that the company has accepted $300 million in taxpayer-funded aid.
The Senator's letter comes after reports that Genesis and its board approved and 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 January 2021. Mr. Hager also received a $935,000 annual bonus in 2020 and will receive a $650,000 bonus and $300,000 consulting contract post-retirement, according to a Security and Exchange Commission filing. Reports also indicate that the Genesis board approved $2.1 million in bonuses for seven of the company's top executives in October 2020.
These extraordinary payments were awarded despite the fact that under Mr. Hager's leadership, there were 14,352 confirmed cases of COVID-19 and 2,812 COVID-19 deaths at the more than 350 Genesis facilities spanning 25 states as of December 2020. Reports also indicate that nearly all of Genesis's nursing homes reported continuing shortages of personal protective equipment during the pandemic, which only eased up after Hager's big bonus had already been approved.
Genesis' decision to award its executives millions in bonuses and pay is also troubling because the company claimed to be on the brink of bankruptcy. Last year, Genesis accepted millions of dollars in state and federal aid under the CARES Act, including $254 million in federal relief tied to the pandemic and pledges of $85 million from several of the 25 states where the company operates.
"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," the Senator continued.
To better understand Genesis' decisions, the Senator asks the company to provide more information on how much federal and state aid it has received to date, how much executive compensation it has doled out since early 2020, and the timelines and decisions of the board to provide these exorbitant bonuses to its top executives.
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