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Health Care Pioneer Cástulo De La Rocha’s Salary Questioned

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By Dave Bryan

LOS ANGELES (CBS) — In the battle to save California adult day care centers from extinction, Cástulo de la Rocha, the president and CEO of AltaMed Health Services Corporation, is a general leading the charge, even going so far as to run TV ads defending the centers from the plan to eliminate state funding.

De la Rocha is a legend in the East L.A. health care community, having joined AltaMed more than three decades ago when it was a small neighborhood clinic, which eventually grew into a $183-million-a-year, government-supported non-profit health care giant, with more than 40 medical and dental clinics across L.A. and Orange Counties and seven adult day health care centers.

No one speaks more passionately about the devastating toll closing the adult centers would have on senior citizens.

“The personal toll is huge. It is huge… We have worked with thousands of people over the years… There are huge changes in their lives and how they feel about themselves,” De la Rocha said.

But what most people may not know is that in 2008, when AltaMed’s annual revenue was $130 million, De la Rocha’s total compensation package went from $396,000 a year to nearly $800,000 — in a year when California’s economy hit bottom, the state’s budget deficit went off the charts, and health care and seniors programs like his faced the budget axe.

Dave Bryan: “Some people look at that and say, ‘wait a minute, you mean we’re talking about eliminating this program for these poor people and this guy’s making, close to, pushing a million bucks a year to run the organization?'”

Cástulo de la Rocha: “Based on the advice we have received, it is within reason the compensation level, which is also based, plus bonus and other benefits that are part of that, is within the reasonable standards that are expected by the Internal Revenue Services.”

But “reasonable” wasn’t the first word that came to Governor Jerry Brown’s mind when I asked him about the generous compensation package.

“It sounds excessive to me. But without knowing the facts I think it would be inappropriate for me to make a conclusion,” Brown said. “But I can tell you this, being Governor of California is a tough job and I get paid I think about $171,000 a year, so anything over and above that I view with some suspicion.”

Brown, who was given a copy of our report, was a little on the low side about his salary, which is actually about $174,000.

De la Rocha said it was the AltaMed board of directors that approved his compensation package, not him. He said the board consulted with two national salary survey companies, which agreed the increase was justified by the size of the company and De la Rocha’s responsibilities.

But when a third national compensation research organization ran the numbers for us, they came up with a different conclusion.

“The percentile that the CEO of AltaMed would be at, would be near 90 percent,” said Linda Lampkin of Economic Research Institute.

This at a time when the state budget was crumbling into deficit and these programs came under fire.

“It took me 33 years to take the organization to $100,000. In the last two years we have risen from 100 to $200 million… That is a substantial increase in this organization,” De la Rocha said.

But Mary Michlovich, who runs a much smaller adult day service center in West L.A., said it was the timing of the big raise that bothered her.

“If they’re doing that well that they can afford that type of a salary, why isn’t it going back into the programs and benefitting the people that they’re serving?” asked Michovich the Executive Director Opica of Adult Day Service Center.

State Assemblyman Allan Mansoor from Costa Mesa, who sits on the committee that oversees the adult day care centers, said he was appalled by a government-supported, non-profit executive getting a compensation package of nearly $800,000 at a time like this.

“That is an absurd amount,” Mansoor said. “You know if someone wants to go off to the private sector and make more money, that’s fine, but there should be some type of reasonable limits and oversight.”

Dave Bryan: “Do you think you’re being paid the right amount, you personally?”

Cástulo de la Rocha: “You know, it’s 33 years that I devoted here, as a professional here. Do I think that devoting 33 years of my professional career to this organization and working for this, do I think it’s fair? I absolutely think so. Yes.”

The chairman of the AltaMed board of directors, which approved Mr. De la Rocha’s compensation package was unavailable for an interview, but he released the following statement.

“The board is confident that the CEO’s compensation is not only in line with industry norms, it is well deserved. By this talented and tireless chief executive, who has devoted his professional life to building a network that employs nearly 1,900 professionals and annually serves the health care needs of close to 150,000 low-income patients,” the statement said.

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