Executive Total Compensation Review for Natividad Medical Center

Transcription

1 Executive Total Compensation Review for Natividad Medical Center July 26, 2011 Presented to: Monterey County Board of Supervisors 2011 Sullivan, Cotter and Associates, Inc. The material may not be reproduced or copied without written consent of SullivanCotter.

2 Introduction Sections Pages I. Executive Summary 3 II. Methodology 7 III. Base Salary Analysis 12 IV. Incentive Compensation 20 V. Total Cash Compensation Analysis 24 VI. Benefits Analysis 34 VII. Total Compensation Analysis 35 VIII. Reasonableness Assessment 45 IX. Recommendations 46 Attachments A: Tally Sheet B: Detailed Benefit Analysis C: Market Data D. Trends in Executive Compensation E. Summary of Survey Benchmark Positions 2

3 Executive Summary 3

4 I. Executive Summary: Overview BACKGROUND Natividad Medical Center (NMC) located in Salinas, California, is committed to becoming recognized: ly and statewide as an evolving model public safety net hospital; By the community as an accessible and desired resource for primary care, general medical/surgical, and women s and children s services, and By both consumers and providers as a System associated with best practices, stellar outcomes and high patient and caregiver satisfaction levels. SullivanCotter was retained by the Auditor-Controller of Monterey County (the Auditor-Controller) to review total compensation for 35 executive positions at NMC. SullivanCotter, an independent consulting firm, specializes in the benchmarking, trends and analysis of total compensation programs for the healthcare industry. Although Natividad Medical center as a public hospital is not subject to the Intermediate Sanctions under Section 4958 of the IRC, a number of public institutions are adopting processes for governing pay consistent with the requirements under section Our analysis will provide the Monterey County Auditor Controller with an assessment of the executive s compensation consistent with the same type of analysis 501c (3) organizations use to establish a rebuttable presumption of reasonableness, a safe harbor available under Intermediate Sanctions (an overview of Intermediate Sanctions is provided on the following page). 4

5 I. Executive Summary: Overview Intermediate Sanctions (IRS Code Section 4958) requires that compensation paid to disqualified persons be reasonable. A disqualified person is any person who is in a position to exercise substantial influence over the affairs of a tax-exempt organization. Compensation includes total compensation (i.e., salary, incentives, benefits, perquisites, deferred compensation, or any item of value provided to an executive). To achieve the rebuttable presumption of reasonableness (i.e., safe harbor) under the Treasury Regulations, an organization must follow a three-step process: Compensation is approved in advance by an authorized body of the organization, composed of individuals who are disinterested (i.e., do not have a conflict of interest). The authorized body should: Be members of the board (although this is not a requirement). Be independent, non-employees. Have no business/financial relationship with the organization (directly or indirectly through family members). The authorized board committee relies on independent, reliable market data to set compensation levels. Compensation paid to executives at comparable organizations for comparable positions. Focus of the Committee s review is on the reasonableness of total compensation paid to the executives. The authorized board committee must fully document the basis for the determination. The Board must execute a written or electronic record that contains the following information: The terms of the compensation agreement and the date on which it was approved. The members who were present during the discussion of the agreement and those who voted on it. The comparability data used and its source. The basis for the conclusion (if any) that reasonable compensation for a specific transaction is higher than the range of comparability data obtained. 5

6 I. Executive Summary: Overview Specifically, the Auditor-Controller engaged SullivanCotter to provide the following consulting services: Conduct a competitive positioning analysis of executive total compensation for 35 executives and management positions (i.e., base salary, incentive awards as well as basic and executive benefits, perquisites and severance) relative to comparable organizations nationally. Conduct a qualitative and quantitative analysis of the standard and supplemental benefits and perquisites provided to each NMC executive. This analysis reviews the general design and benefit levels provided to each executive included in the analysis. Determine if the current annual incentive plan is effective in meeting its stated objectives. This included an analysis of plan purpose, eligibility, performance metrics, and award targets. Provide the Auditor-Controller with current and appropriate executive compensation market data to: Determine appropriate base salary adjustments for the organization s executives. Determine whether the compensation program reflects best market practices, is aligned with Natividad Medical Center s desired compensation philosophy and is reasonable. Provide guidance and counsel to the Auditor-Controller in matters related to executive compensation Participate in meetings (by phone) and present our findings and recommendations. 6

7 II. Methodology 1. SullivanCotter collected and reviewed organizational information, compensation data, and other background information from NMC. Estimated net revenue data for fiscal year (FY) ending June 30, 2010: NMC net revenue of $200M. Cash compensation data were extracted from various surveys and reflect pay at comparably-sized healthcare organizations. 2. SullivanCotter matched NMC executive positions to survey benchmark jobs based on a comprehensive review of each executive s job duties and responsibilities (1). This methodology ensures that the market data in this study reflects compensation paid by other healthcare organizations for comparable positions. 3. The analysis for this study is based on the survey benchmark job matches shown in the table on the following pages. Discussions with the Auditor-Controller indicated an interest in regional compensation data, where such data are available from reliable sources and where such data indicate that there are meaningful variances from the national competitive benchmarking data. Regional market data, when available in compensation surveys, are often subject to the following limitations: Not reported by size and/or organizational characteristics. California-specific survey data includes both subsidiary hospital data and stand-alone hospital data, even though pay practices vary between the two types of organizations, particularly in the executive positions. Based on a limited sample of respondents, which: May limit reporting to only median or average pay levels. May lead to inconsistent results over time and/or among positions. (1) The job matches are provided in Appendix E. Job Matches were based on position descriptions and information provided by NMC. SullivanCotter did not verify the actual job duties as described in the job descriptions provided. 7

8 II. Methodology 4. SullivanCotter used the following surveys, prepared by independent consulting firms, to collect labor market data: Market Surveys for Executives i. Sullivan, Cotter and Associates: 2010 Survey of Manager and Executive Compensation in Hospitals and Health Systems. ii. iii. iv. Integrated Healthcare Strategies: 2010 Health Care Executive Compensation Survey. Mercer HR Consulting: 2010 Integrated Health Networks Compensation Survey. Towers Watson: 2010/2011 Top Management Compensation Survey. California Market Survey for Executives i. Sullivan, Cotter and Associates and FutureSense, Inc.: 2010 Executive Compensation Report, sponsored by the California Hospital Association, The Hospital Association of Southern California, The Hospital Council of Northern and Central California and The Hospital Association of San Diego and Imperial Counties. Regional Market Survey for Executives i. Sullivan, Cotter and Associates: 2010 Survey of Manager and Executive Compensation in Hospitals and Health Systems ( Regional cut of data) ii. iii. Integrated Healthcare Strategies: 2010 Health Care Executive Compensation Survey ( Regional Cut of data). Mercer HR Consulting: 2010 Integrated Health Networks Compensation Survey ( Regional Cut of data). The vast majority of participants in the surveys listed above are tax-exempt healthcare organizations. Although there are district and safety-net hospitals included in the survey data, it is not possible to provide a district hospital only, or safety-net hospital-only market comparison. Because Natividad recruits from healthcare organizations other than safety-net hospitals, it is appropriate to include data that is representative of hospitals of similar size, without restricting the survey data to safety-net hospitals. 8

9 II. Methodology 5. SullivanCotter developed composite estimated market values (EMVs) of cash compensation for each NMC executive position in the following manner: Compiled both regression-based and categorical market survey data for comparable organizations, using the scope information provided by NMC. Aged the survey data to a common effective reporting date of July 1, Market data were annualized at a rate of 3.0%, as reported in national healthcare compensation surveys. These adjustments are consistent with standard analytical practices used to update data from surveys with different effective dates to a common salary review date. Developed EMVs for the 25th, 50th, 75th, and 90th percentile levels of base salary and total cash compensation (base salary plus actual annual incentive compensation) by calculating a simple average of the reported survey values for each position. Detailed cash compensation data tables are included in Attachment C. 9

10 II. Methodology The tables beginning on page 13 compare NMC s base salary and total cash compensation levels to the cash compensation estimated market values (EMVs) for each position. and Regional and California comparisons are provided for Base Salary, Total Cash Compensation and Total Compensation. Base Salary is defined as each NMC executive s current fiscal year 2011 base salary (i.e., the fixed annual amount paid to executives). Total Cash Compensation (TCC) is defined as each executive s incentive awards (payable in 2011) plus the executive s current fiscal year 2011 base salary. Only the CEO, CFO and the CMO reported incentive payments in Total Compensation (TC) is defined as each executive s current fiscal year 2011 base salary, incentive payments and benefit expenditures. EMVs represent actual base salary, total cash compensation and total compensation as compiled from the market surveys. Included in the tables for Base Salary and Total Cash Compensation are the estimated market values (EVMs) for the Natividad s salary range Low, Mid and High markers. These EVMs are for illustrative purposes only; to provide the Auditor- Controller with the approximate market positioning of the range markers. 10

11 II. Methodology Salary comparisons for Salinas, and neighboring towns (source: 2011 ERI Economic Research Institute, Inc.) illustrate that compared to national averages, salary levels are significantly higher to reflect a higher cost of living. The data provided in the chart below illustrate the variation in annual salary levels: ERI's Geographic Assessor Salary Comparison Table by Income Level Base City: United States Average Base City Annual Salary Levels in United States Dollars Comparison Cities: $80,000 $150,000 $200,000 $300,000 Salinas, California 114% 113.7% 113.6% 113.5% Watsonville, California 112.3% 112.5% 112.6% 112.6% Monterey, California 114% 113.7% 113.6% 113.5% The variances of salary levels between regional and national data are significant (more than a 12% variance between local and national data comparisons). SullivanCotter utilized national market data for compensation comparisons, however, the ability to recruit executive talent on a basis will require consideration for the high local cost of living and salary differentials ERI Economic Research Institute, Inc. 11

12 III. Base Salary SUMMARY The following chart summarizes the averages 1 of the competitive positioning of the NMC executives Base Salary as compared to the California, Regional and Peer Groups: Peer Groups Average Market Percentile (Actual) California Market Data 47 Regional Market Data 37 Market Data 58 1 Data was available for less than half (12) of the positions in the study in the California-only survey data base. 12

13 III. Base Salary The following charts illustrates the competitive positioning of the NMC executives base salaries as compared to the California, Regional and Peer Groups: Job Title Actual Base Steps Market Base Salary Data ($000s) Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California $282.3 $341.8 $405.9 $ Hospital Chief Executive Officer $365.0 $283.5 $387.0 Regional $464.3 $584.7 $707.2 $771.5 <25 <25 <25 $398.6 $481.1 $601.8 $705.6 <25 <25 <25 Hospital Chief Medical Officer $298.7 $240.8 $328.7 California $251.0 $284.4 $323.7 $ <25 76 Regional $282.7 $321.1 $384.3 $ <25 53 $276.6 $310.5 $355.1 $ <25 60 Hospital Chief Financial Officer $250.0 $219.5 $299.6 California $188.2 $219.5 $260.0 $ Regional $259.5 $315.3 $371.6 $396.7 <25 <25 43 $222.2 $271.5 $325.7 $ <

14 III. Base Salary Base Salary Comparisons California, Regional and Markets Job Title Actual Base Steps Market Base Salary Data ($000s) Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California $167.2 $199.7 $234.5 $ Hospital Nursing Officer $213.1 $181.6 $213.1 $247.9 Regional $177.1 $221.9 $258.0 $ Hospital Assistant Administrator - Community & Organizational Relations Hospital Assistant Administrator - Operations & Support Services Hospital Chief Information Officer $187.3 $168.4 $197.6 $229.8 $197.6 $168.4 $197.6 $229.8 $139.7 $190.8 $175.0 $197.9 $225.1 $ California $181.6 $202.5 $230.4 $ < Regional $194.5 $216.2 $244.5 $283.7 <25 < $173.8 $195.9 $221.9 $ < California Regional $95.9 $125.4 $142.3 >75 >75 >75 >75 $141.3 $158.6 $213.3 $ California $139.3 $178.2 $245.2 $304.7 < Regional $234.7 $288.0 $371.4 $468.4 <25 <25 <25 $172.4 $200.9 $240.3 $282.6 <25 <25 41 California $158.8 $175.5 $189.0 $ < Pharmacy Director $168.1 $135.8 $159.4 $185.3 Regional $160.0 $171.3 $181.9 $ <25 <25 78 $141.4 $155.4 $177.0 $ <

15 III. Base Salary Base Salary Comparisons California, Regional and Markets Steps Market Base Salary Data ($000s) Actual Job Title Base Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Director of Surgical Services $149.2 $114.7 $134.7 $156.6 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $140.5 $155.7 $172.5 $ <25 <25 51 $110.9 $127.4 $145.4 $ Nursing Services Division Manager (1), Women's & Children's Services Nursing Services Division Manager (2), Mental Health & Staffing Office Nursing Services Division Manager (3), Acute Medical Services Nursing Services Unit Manager, Emergency Department $155.8 $114.1 $134.0 $155.8 $155.8 $114.1 $134.0 $155.8 $114.1 $134.0 $155.8 $114.1 $134.0 $155.8 California $170.8 $198.7 $233.2 $277.5 <25 <25 <25 <25 Regional $168.3 $200.5 $233.9 $257.2 <25 <25 <25 <25 $147.6 $168.0 $191.9 $ <25 <25 35 California Regional $109.1 $120.5 $127.1 $138.3 > >90 $85.1 $94.2 $105.2 $116.9 >90 86 >90 >90 California $174.4 $197.7 $231.9 $260.0 <25 <25 <25 Regional $163.6 $182.1 $212.7 $234.7 <25 <25 <25 $144.9 $164.8 $184.1 $206.7 <25 <25 39 California Regional $120.8 $133.6 $152.1 $173.6 < $98.9 $110.2 $126.2 $ >90 15

16 III. Base Salary Base Salary Comparisons California, Regional and Markets Steps Market Base Salary Data ($000s) Job Title Actual Base Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Market % (Actual) Clinical Lab Manager $108.2 $127.0 $147.7 NMC Human Resources Administrator Quality/ Compliance Administrator Director of Cardiopulmonary Services $139.3 $102.0 $119.7 $139.3 $160.8 $117.8 $138.3 $136.1 $135.9 $99.5 $116.8 $135.9 Hospital Controller $134.6 $98.6 $115.7 $134.6 Manager of Diagnostic Imaging Services $133.0 $97.4 $114.3 $133.0 Market % (Low) Market % (Mid) Market % (High) California Regional $122.4 $134.4 $148.0 $157.4 < $97.2 $109.8 $123.5 $ >90 California $142.8 $164.8 $195.4 $222.1 <25 <25 <25 <25 Regional $114.1 $143.5 $161.1 $ < $94.3 $111.8 $133.0 $ California $120.3 $152.9 $195.2 $ < Regional $133.4 $147.0 $159.6 $ < $98.4 $111.6 $127.9 $150.7 > California Regional $120.2 $132.1 $158.0 $ <25 <25 54 $99.9 $117.8 $134.8 $ < California Regional $135.2 $151.7 $180.6 $206.1 <25 <25 <25 <25 $106.3 $128.1 $153.9 $ < California Regional $127.8 $135.5 $149.2 $ <25 <25 42 $105.9 $118.7 $132.6 $ <

17 III. Base Salary Base Salary Comparisons California, Regional and Markets Steps Market Base Salary Data ($000s) Actual Job Title Base Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Patient Financial Services Director Utilization Management Coordinator Hospital Director of Nursing Education Hospital Director of Engineering & Safety Director of Health Information Management Medical Staff Coordinator $129.4 $94.8 $111.3 $129.4 $86.6 $107.2 $118.2 $114.0 $83.5 $98.0 $114.0 $116.1 $104.3 $112.7 $122.5 $111.6 $81.8 $96.0 $111.6 $107.9 $79.0 $92.7 $107.9 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $100.8 $114.5 $146.9 $ < $85.9 $106.3 $125.8 $ California Regional $119.9 $128.1 $151.2 $170.0 <25 <25 <25 $93.5 $102.7 $115.0 $130.2 < California Regional $120.7 $130.9 $146.8 $162.1 <25 <25 <25 <25 $92.7 $104.8 $120.8 $ < California Regional $136.7 $173.2 $245.6 $284.8 <25 <25 <25 <25 $114.6 $138.8 $169.3 $ <25 <25 33 California Regional $108.1 $122.7 $133.2 $ <25 <25 31 $88.2 $102.2 $117.4 $ < California Regional $70.7 $78.9 $97.5 $

18 III. Base Salary Base Salary Comparisons California, Regional and Markets Steps Market Base Salary Data ($000s) Job Title Actual Base Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Market % (Actual) Managed Care Operations Manager Hospital Director of Food Services $100.2 $73.4 $86.1 $100.2 $96.0 $70.3 $82.5 $96.0 Medical Librarian $75.7 $55.5 $65.1 $75.7 Hospital Risk Assessment & Compliance Officer Chief Hospital Accountant Patient Account Manager $138.9 $101.7 $119.4 $138.9 $102.3 $74.9 $87.9 $102.3 $80.0 $75.9 $89.0 $103.5 Market % (Low) Market % (Mid) Market % (High) California $124.9 $164.7 $193.8 $219.9 <25 <25 <25 <25 Regional $125.0 $146.7 $195.9 <25 <25 <25 <25 $95.8 $110.0 $140.3 $ <25 <25 33 California Regional $99.6 $108.5 $126.6 <25 <25 <25 <25 $83.9 $93.6 $104.9 $ <25 <25 55 California Regional $63.8 $70.4 $83.9 $ < California $122.5 $141.4 $189.3 $ <25 <25 47 Regional $121.4 $135.5 $ <25 <25 53 $100.3 $113.7 $132.5 $ California Regional $95.2 $110.3 $131.6 $ <25 <25 37 California Regional $100.8 $114.5 $146.9 $167.5 <25 <25 <25 30 $85.9 $106.3 $125.8 $142.0 <25 <

19 III. Base Salary Base Salary Comparisons California, Regional and Markets Job Title Patient Admitting Manager Actual Base Steps Market Base Salary Data ($000s) Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile $89.0 $65.2 $76.5 $89.0 Market % (Actual) Market % (Low) Market % (Mid) California Market % (High) Regional $86.1 $96.7 $111.0 $ <25 <25 32 $71.5 $85.3 $98.2 $ < Decision Support Manager Director of Environmental Services Hospital Purchasing & Materials Support Director $117.8 $78.4 $92.1 $107.1 $99.1 $80.1 $94.0 $109.3 $125.9 $92.2 $108.3 $125.9 California Regional $106.2 $113.2 $142.6 $ <25 <25 28 $92.4 $106.9 $120.5 $ <25 <25 50 California Regional $86.1 $97.8 $111.1 $ < $70.6 $83.3 $96.2 $ California Regional $105.5 $124.4 $133.3 $ < $85.2 $101.1 $117.4 $

20 IV. Incentive Compensation INCENTIVE OPPORTUNITIES The CEO, CFO, CIO (position is currently vacant) and CMO of NMC participate in an annual incentive plan: Award Opportunities: NMC Executive Annual Incentive Award Opportunities as a Percent of Base Salary Position Threshold Target Maximum President/CEO 10% 20% 30% CFO, CIO & CMO 10% 20% 30% imately 89% of not-for-profit hospitals and 79% of not-for-profit healthcare systems have short-term executive incentive plans. (1) Opportunity levels vary by position/level in organizations. Executive long-term incentive plans are somewhat uncommon (less than 20%) in nonprofit healthcare organizations. (1) Source: Sullivan, Cotter and Associates, Inc.: 2010 Survey of Manager and Executive Compensation in Hospitals and Health Systems. 20

21 IV. Incentive Compensation The NMC Incentive Compensation Plan includes an appropriate mix of financial and non-financial performance criteria, the criteria incorporates the key areas from the strategic plan and focuses on current issues the organization is facing; including: Finance: Income from core operations based on audited June30, 2010 consolidated balance sheets and income statements. Net operating income ratio: Threshold: Target: Maximum: >0% of operating margin 1% of operating margin 2% of operating margin Quality utilizes the Joint Commission's Core Measures of national Hospital Inpatient Quality for the Quality performance indicator. Achievement is based upon improvement in the Core Measures in calendar year-end results. Service Patient Satisfaction is the measure, utilizing survey results and based on improvement in patient satisfaction fiscal year end results. People Utilizes voluntary employee turn-over as the measure, based upon results for fiscal year end. Growth Adjusted average daily census is utilized as the measure, based upon results for fiscal year end. 21

22 IV. Incentive Compensation Typical Management Incentive plans include the following areas of focus: Financial Viability Growth Physician Organization Financial Improvements Cost Employee Engagement Management development Review of the incentive criteria are typically done at least every three years. 22

23 IV. Incentive Compensation The following table compares NMC s short term target and maximum incentive award opportunities to the typical annual award opportunities for executives in comparable not-for-profit hospitals. NMC s Annual Incentive Award Opportunities as a Percent of Base Salary Typical Market Annual Incentive Award Opportunities as a Percent of Base Salary (1) Position Target Maximum Target Maximum President & CEO 20% 30% 25% - 30% 30 % - 40% Senior Executives* 20% 30% 20% to 25% 25% to 30% Executives 15% -20% 20% to 25% Directors 14% 5%- 10% The NMC incentive plan only includes the CEO, CFO and CMO. Inclusion of only the top three executives in the incentive plan is not reflective of market practice. Health care organizations typically include at least the senior management team in an incentive plan (with opportunity levels varied by position level). (1) Source: Sullivan, Cotter and Associates: 2010 Survey of Manager and Executive Compensation in Hospitals and Health Systems. 23

24 V. Total Cash Compensation SUMMARY The following chart summarizes the averages 1 of the competitive positioning of the executives Total Cash Compensation as compared to the California, Regional and Peer Groups: Peer Groups Market Percentile (Actual) California Market Data 41 Regional Market Data 35 Market Data Data was available for less than half (12) of the positions in the study in the California-only survey data base. 24

25 V. Total Cash Compensation The following charts illustrates the competitive positioning of the NMC executives Total Cash Compensation as compared to the California, Regional and Peer Groups: Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Market Job Title Actual TCC Low Mid High Market % 25th %ile 50th %ile 75th %ile 90th %ile (Actual) Hospital Chief Executive Officer $438.0 $283.5 $387.0 Market % (Low) Market % (Mid) Market % (High) California $325.7 $422.6 $513.0 $ <25 41 Regional $483.5 $650.1 $837.3 $1,034.1 <25 <25 <25 $416.1 $534.8 $709.8 $ <25 <25 Hospital Chief Medical Officer Hospital Chief Financial Officer Hospital Nursing Officer $358.4 $240.8 $328.7 $300.0 $219.5 $299.6 $213.1 $181.6 $213.1 $247.9 California $277.1 $324.9 $375.0 $ <25 52 Regional $303.1 $363.4 $471.7 $ <25 36 $293.0 $340.8 $396.0 $ <25 44 California $204.5 $240.8 $299.8 $ Regional $274.5 $353.3 $446.9 $ <25 33 $238.1 $294.4 $373.3 $ <25 52 California $175.1 $217.5 $256.8 $ Regional $186.0 $248.9 $294.8 $ < $185.1 $217.4 $258.6 $ <

26 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Hospital Assistant Administrator - Community & Organizational Relations $187.3 $168.4 $197.6 $229.8 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California $199.5 $214.8 $254.8 $294.1 <25 <25 <25 59 Regional $219.0 $238.3 $292.3 $337.2 <25 <25 <25 39 $181.3 $216.6 $250.4 $ < Hospital Assistant Administrator - Operations & Support Services Hospital Chief Information Officer $197.6 $168.4 $197.6 $229.8 $139.7 $190.8 California Regional $95.9 $127.9 $155.6 >75 >75 >75 >75 $147.8 $169.2 $225.5 $ California $144.9 $190.0 $250.3 $361.9 <25 50 Regional $237.6 $300.7 $465.2 $481.0 <25 <25 $181.0 $214.1 $261.9 $311.1 <25 32 California $160.8 $179.6 $195.3 $ <25 <25 59 Pharmacy Director $168.1 $135.8 $159.4 $185.3 Regional $170.4 $185.4 $202.2 $210.2 <25 <25 <25 50 $143.1 $159.2 $182.9 $ <

27 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Director of Surgical Services $149.2 $114.7 $134.7 $156.6 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $145.3 $161.9 $174.1 $ <25 <25 42 $113.2 $132.1 $151.9 $ Nursing Services Division Manager (1), Women's & Children's Services Nursing Services Division Manager (2), Mental Health & Staffing Office Nursing Services Division Manager (3), Acute Medical Services $155.8 $114.1 $134.0 $155.8 $155.8 $114.1 $134.0 $155.8 $114.1 $134.0 $155.8 California $185.0 $222.5 $261.1 $314.8 <25 <25 <25 <25 Regional $181.0 $228.5 $260.3 $303.4 <25 <25 <25 <25 $158.2 $185.4 $214.7 $245.1 <25 <25 <25 <25 California Regional $113.6 $122.8 $133.8 $145.1 > >90 $85.8 $95.3 $105.9 $120.5 >90 83 >90 >90 California $194.9 $227.5 $265.3 $297.8 <25 <25 <25 Regional $182.1 $209.7 $233.0 $279.1 <25 <25 <25 $156.8 $185.6 $209.0 $233.2 <25 <25 <25 27

28 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Nursing Services Unit Manager, Emergency Department $114.1 $134.0 $155.8 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $125.4 $140.8 $163.8 $183.9 < $100.8 $114.4 $129.9 $ >90 California Clinical Lab Manager $108.2 $127.0 $147.7 Regional $131.8 $146.5 $159.5 $172.0 <25 <25 52 NMC Human Resources Administrator Quality/Compliance Administrator $139.3 $102.0 $119.7 $139.3 $160.8 $117.8 $138.3 $136.1 $99.6 $114.5 $130.4 $ California $153.3 $182.3 $217.7 $250.4 <25 <25 <25 <25 Regional $121.9 $154.0 $172.7 $ <25 <25 39 $96.7 $115.5 $140.8 $ California $128.5 $158.4 $209.6 $ < Regional $142.5 $160.5 $170.4 $ <25 <25 <25 $101.7 $115.1 $136.2 $

29 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Job Title Actual TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Director of Cardiopulmonary Services $135.9 $99.5 $116.8 $135.9 Market % (Actual) Market % (Low) Market % (Mid) California Market % (High) Regional $128.8 $142.7 $172.7 $ <25 <25 38 $106.0 $125.8 $147.4 $ < California Hospital Controller $134.6 $98.6 $115.7 $134.6 Regional $147.0 $166.0 $203.1 $222.4 <25 <25 <25 <25 Manager of Diagnostic Imaging Services Patient Financial Services Director $133.0 $97.4 $114.3 $133.0 $129.4 $94.8 $111.3 $129.4 $111.4 $132.7 $161.6 $ < California Regional $134.1 $143.9 $160.4 $177.9 <25 <25 <25 <25 $107.7 $124.0 $140.0 $ < California Regional $102.6 $116.6 $156.8 $ < $92.2 $112.5 $136.0 $

30 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Utilization Management Coordinator $86.6 $107.2 $118.2 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $119.9 $132.7 $155.6 $191.1 <25 <25 <25 $96.5 $106.5 $118.8 $134.9 < Hospital Director of Nursing Education Hospital Director of Engineering & Safety Director of Health Information Management $114.0 $83.5 $98.0 $114.0 $116.1 $104.3 $112.7 $122.5 $111.6 $81.8 $96.0 $111.6 California Regional $128.2 $143.4 $157.8 $168.9 <25 <25 <25 <25 $94.8 $109.8 $126.0 $ < California Regional $140.2 $177.4 $287.3 $348.6 <25 <25 <25 <25 $117.5 $146.5 $186.3 $244.4 <25 <25 <25 29 California Regional $119.2 $133.4 $147.0 $158.9 <25 <25 <25 <25 $89.7 $105.3 $123.5 $ <

31 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Medical Staff Coordinator $107.9 $79.0 $92.7 $107.9 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $71.8 $80.6 $98.6 $ Managed Care Operations Manager Hospital Director of Food Services $100.2 $73.4 $86.1 $100.2 $96.0 $70.3 $82.5 $96.0 California $126.2 $166.1 $212.9 $242.0 <25 <25 <25 <25 Regional $125.0 $164.7 $219.1 <25 <25 <25 <25 $96.5 $112.3 $144.8 $ <25 <25 31 California Regional $104.3 $115.1 $132.3 <25 <25 <25 <25 $84.6 $96.0 $109.1 $ <25 <25 50 California Medical Librarian $75.7 $55.5 $65.1 $75.7 Regional $64.2 $71.2 $85.0 $ <

32 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Hospital Risk Assessment & Compliance Officer $138.9 $101.7 $119.4 $138.9 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California $129.4 $151.1 $205.4 $ <25 <25 36 Regional $129.3 $144.4 $ <25 <25 41 $103.2 $120.8 $140.5 $ < Chief Hospital Accountant Patient Account Manager Patient Admitting Manager $102.3 $74.9 $87.9 $102.3 $80.0 $75.9 $89.0 $103.5 $89.0 $65.2 $76.5 $89.0 California Regional $96.1 $114.5 $134.1 $ <25 <25 33 California Regional $102.6 $116.6 $156.8 $167.9 <25 <25 <25 27 $92.2 $112.5 $136.0 $157.1 <25 <25 <25 39 California Regional $88.8 $102.5 $115.2 $ <25 <25 25 $72.4 $87.0 $100.5 $ <

33 V. Total Cash Compensation Total Cash Compensation Comparisons California, Regional and Markets Steps Market Total Cash Compensation Data ($000s) Actual Job Title TCC Low Mid High Market 25th %ile 50th %ile 75th %ile 90th %ile Decision Support Manager $117.8 $78.4 $92.1 $107.1 Market % (Actual) Market % (Low) Market % (Mid) Market % (High) California Regional $110.5 $118.9 $153.0 $ <25 <25 <25 $97.5 $110.1 $125.3 $ <25 <25 44 Director of Environmental Services Hospital Purchasing & Materials Support Director $99.1 $80.1 $94.0 $109.3 $125.9 $92.2 $108.3 $125.9 California Regional $87.3 $105.2 $116.0 $ < $72.4 $85.9 $99.5 $ California Regional $112.6 $130.9 $144.4 $ <25 <25 43 $88.2 $102.7 $124.7 $

34 VI. Benefit Summary SUMMARY OF BENEFIT FINDINGS Currently, the Executives are provided a benefits based on the collective bargaining group they are aligned with (either Group X or Group Y) Most of the benefits provided to employees of Group X and Y are identical; with the following exceptions: Group Y receives a monthly car allowance of $ Group Y receives $54.17 per month expense allowance (Group X receives $45.84 per month expense allowance). Overall, Benefits provided to the study participants: Medical, dental and vision benefits are competitive with market practice. Total available employer-sponsored life insurance coverage (group + supplemental) is significantly below the range of typical market practice. Long-term disability benefits are significantly below typical market practice. Time Off program is competitive with market practice. Qualified retirement benefits are competitive with market practice. Severance is provided for the CEO, CFO, CMO and CIO only. The lack of a severance plan for other executives is not competitive with market practice. No perquisites are provided to the executives. 34

35 VII. Total Compensation SUMMARY The following chart summarizes the averages 1 of the competitive positioning of the executives Total Compensation as compared to the California, Regional and Peer Groups: Peer Groups Average Market Percentile California Market Data 44 Regional Market Data 38 Market Data 58 1 Data was available for less than half (9) of the positions in the study in the California-only survey data base. 35

36 VII. Total Compensation The following charts illustrates the competitive positioning of the NMC executives Total Compensation as compared to the California, Regional and Peer Groups: Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California $421.4 $532.6 $638.4 $ Hospital Chief Executive Officer $523.5 Regional $597.1 $785.4 $994.6 $1,202.9 <25 $535.3 $672.7 $874.9 $1,036.3 <25 California $351.8 $406.6 $464.9 $ Hospital Chief Medical Officer $433.8 Regional $384.4 $452.8 $574.4 $ $373.1 $428.0 $492.6 $ California $266.0 $308.9 $376.4 $ Hospital Chief Financial Officer $367.7 Regional $351.0 $441.5 $546.9 $ $306.7 $373.5 $463.7 $ California $232.2 $281.4 $328.1 $ Hospital Nursing Officer $268.5 Regional $245.2 $317.5 $370.9 $ $243.9 $281.0 $327.9 $

37 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Hospital Assistant Administrator - Community & Organizational Relations $243.3 Market Percentile (Actual) California $261.8 $281.6 $327.4 $374.8 <25 Regional $284.0 $307.9 $367.9 $420.9 <25 $242.0 $282.0 $321.2 $ Hospital Assistant Administrator - Operations & Support Services $257.2 California Regional $138.1 $176.2 $207.5 >75 Hospital Chief Information Officer $199.5 $224.5 $292.3 $ California $196.2 $249.4 $323.8 $447.9 Regional $308.9 $383.2 $565.2 $601.4 $239.2 $278.3 $334.3 $392.5 California $209.3 $231.2 $249.4 $ Pharmacy Director $217.1 Regional $219.2 $236.2 $255.0 $265.7 <25 $188.5 $207.2 $234.8 $

38 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California Director of Surgical Services $199.8 Regional $190.6 $210.0 $225.1 $ Nursing Services Division Manager (1), Women's & Children's Services Nursing Services Division Manager (2), Mental Health & Staffing Office Nursing Services Division Manager (3), Acute Medical Services $202.6 $202.6 $153.1 $175.0 $198.0 $ California $235.8 $278.2 $323.0 $384.8 <25 Regional $231.3 $284.6 $322.4 $369.7 <25 $204.7 $235.7 $269.3 $304.0 <25 California Regional $153.2 $164.5 $176.7 $190.0 >90 $121.1 $132.2 $144.8 $161.6 >90 California $246.3 $283.1 $327.0 $364.6 Regional $231.5 $262.5 $291.3 $341.3 $202.8 $235.3 $262.1 $

39 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Nursing Services Unit Manager, Emergency Department Market Percentile (Actual) California Regional $167.1 $184.8 $211.2 $235.2 $138.6 $154.2 $172.6 $191.7 California Clinical Lab Manager Regional $173.8 $190.7 $206.2 $220.3 $137.1 $154.3 $172.6 $194.9 California $199.0 $231.9 $272.9 $310.3 <25 NMC Human Resources Administrator $183.2 Regional $162.4 $199.8 $221.7 $ $133.7 $155.7 $184.7 $ California $170.1 $206.0 $264.7 $ Quality/Compliance Administrator $213.5 Regional $186.5 $207.0 $219.1 $ $139.4 $155.1 $179.2 $212.2 >90 39

40 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California Director of Cardiopulmonary Services $182.1 Regional $170.5 $186.4 $221.1 $ $144.0 $167.0 $191.7 $ California Hospital Controller $180.5 Regional $191.3 $213.3 $255.6 $279.5 <25 Manager of Diagnostic Imaging Services $176.0 $150.5 $175.8 $209.3 $ California Regional $177.1 $188.2 $207.3 $226.8 <25 $146.8 $165.3 $183.9 $ California Patient Financial Services Director $175.0 Regional $140.7 $157.2 $203.3 $ $127.6 $151.6 $178.6 $

41 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California Utilization Management Coordinator Regional $161.5 $175.7 $202.9 $241.7 $133.3 $145.0 $159.5 $178.4 California Hospital Director of Nursing Education $157.7 Regional $169.9 $187.0 $204.2 $218.1 <25 Hospital Director of Engineering & Safety Director of Health Information Management $160.9 $153.5 $131.5 $148.7 $167.8 $ California Regional $184.8 $228.6 $351.5 $419.9 <25 $158.1 $191.5 $236.8 $ California Regional $158.7 $175.5 $191.0 $204.4 <25 $125.6 $143.7 $164.6 $

42 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California Medical Staff Coordinator $149.1 Regional $104.5 $114.8 $136.2 $ California $165.7 $212.8 $264.8 $298.6 <25 Managed Care Operations Manager $145.3 Regional $164.5 $208.1 $271.4 <25 $130.7 $149.1 $187.1 $ California Hospital Director of Food Services $139.8 Regional $142.3 $154.7 $175.0 <25 $119.7 $132.8 $148.0 $ California Medical Librarian $109.1 Regional $95.7 $103.9 $120.1 $

43 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Hospital Risk Assessment & Compliance Officer $189.3 Market Percentile (Actual) California $171.5 $196.6 $259.4 $ Regional $171.2 $188.7 $ $141.3 $161.2 $184.4 $ California Chief Hospital Accountant $139.7 Regional $133.2 $154.3 $177.8 $ California Patient Account Manager $117.1 Regional $140.7 $157.2 $203.3 $218.1 <25 $127.6 $151.6 $178.6 $202.6 <25 California Patient Admitting Manager $125.8 Regional $124.3 $139.9 $155.2 $ $105.2 $122.4 $138.2 $

44 VII. Total Compensation Total Compensation Comparisons California, Regional and Market Market Total Compensation Data ($000s) Job Title Actual TC Market 25th %ile 50th %ile 75th %ile 90th %ile Market Percentile (Actual) California Decision Support Manager $160.9 Regional $149.6 $159.3 $198.7 $ $134.1 $149.3 $167.0 $ California Director of Environmental Services $138.6 Regional $122.8 $142.8 $155.9 $ Hospital Purchasing & Materials Support Director $167.5 $105.1 $120.9 $136.8 $ California Regional $151.6 $173.3 $188.4 $ $123.5 $140.9 $165.8 $

45 VIII. Reasonableness of Compensation Assessment ACTUAL TOTAL COMPENSATION Actual Total Compensation averages at the 58th percentile of national market total compensation and the 38th percentile of the regional market total compensation. Maximum Total Compensation for Natividad would impact only the top three positions, as the incentive plan only includes those positions. If all three executives participating in the incentive plan were to be awarded maximum annual bonuses, their maximum total compensation would average slightly below the 60th percentile of market total compensation, and none of the executives would have maximum total compensation above the 75th percentile. Two positions: the Nursing Services Division Manager (2), Mental Health & Staffing Office, and the Quality/Compliance Administrator exceed the 90th percentile in total compensation ( data); the Nursing Services Division Manager s total compensation exceeds the 90th percentile in Regional data as well. Compensation above the 90th percentile should be supported by business reasons and documented. REASONABLENESS OPINION Based on SullivanCotter s analyses, Natividad Medical Center executives average total compensation can be considered reasonable and within the bounds of current market practice. Our assessment is based on the validity of the data provided to us for purposes of this analysis. SullivanCotter has not independently validated the information provided to us. Any additional compensation provided to executives and not included or accurately described in this report, is not covered by our assessment. 45

46 X. Recommendations The Board of Supervisors should confirm a total compensation philosophy for NMC based on the a determination of general parameters for compensation positioning, including: Peers. Base Salary. Incentive Compensation. Total Compensation. Benefits. Severance. Perquisites. Establish the executive compensation governance practices, including the role and responsibilities of the Board, Compensation Committee, management and the compensation consultant for use in developing a Compensation Philosophy Statement and Committee Charter. 46

47 X. Recommendations Based on an established philosophy; The Board should determine where salaries, incentives, benefits and total compensation should be positioned: Salaries for the executives of Natividad Medical Center are, on average, reasonable as compared to market data. However, there is significant variation in the levels of pay among the executive group. Next steps should include: Updating salary ranges. Positioning salaries in the range based on performance, experience, tenure. Benefits provided to executives of Natividad Medical Center are generally competitive with market. However, Long-Term Disability coverage is lower than competitive norms, and there is a gap period between short term disability coverage and the onset of the long-term disability coverage. Additionally, the severance benefit of either 6 or 12 months for the senior executives (CEO,CFO,CMO and CIO) is on the lower end of the market, and the lack of severance for other executives is a competitive shortfall. 47

48 Appendix A 48

49 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet Title CEO CMO CFO CNO Assistant Administrator a. Cash Compensation t Annual Base Salary $ 364,998 $ 298,700 $ 250,000 $ 213,138 $ 187,341 t Incentive (paid in FY 2010) $ 73,000 $ 59,740 $ 50,000 $ - $ - Total $ 437,998 $ 358,441 $ 300,000 $ 213,138 $ 187,341 b. Legally required benefits t Social Security (FI) $ 6,634 $ 6,634 $ 6,634 $ 6,634 $ 6,634 t Medicare $ 5,292 $ 4,331 $ 3,625 $ 3,091 $ 2,716 Total $ 11,926 $ 10,965 $ 10,259 $ 9,725 $ 9,350 c. Health insurance premiums t Medical, Prescription Drug $ 15,922 $ 15,922 $ 15,922 $ 13,815 $ 13,815 t Dental $ 475 $ 475 $ 475 $ 452 $ 452 t Vision Care $ 103 $ 103 $ 103 $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 16,513 $ 16,513 $ 16,513 $ 14,383 $ 14,383 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 51,009 $ 41,956 $ 35,000 $ 29,839 $ 26,228 Total $ 51,009 $ 41,956 $ 35,000 $ 29,839 $ 26,228 g. Other benefits/perquisites t Automobile allowance $ 4,500 $ 4,500 $ 4,500 $ - $ 4,500 t Educational stipend (2% of base) $ - $ - $ - $ - $ - t Expense allowance $ 650 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 5,550 $ 5,450 $ 5,450 $ 950 $ 5,450 Total Benefits/Perquisite Cost $ 85,497 $ 75,383 $ 67,721 $ 55,395 $ 55,910 Total Compensation $ 523,495 $ 433,824 $ 367,721 $ 268,533 $ 243,251 h. Potential cash flows t Possible severance payments (FY 2010) $ 364,998 $ 174,242 $ - $ - $ - 49

50 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet Title Assistant Administrator Pharmacy Director Director of Surgical Services Nursing Services Division Manager Nursing Services Division Manager a. Cash Compensation t Annual Base Salary $ 197,619 $ 168,099 $ 149,161 $ 155,804 $ 155,804 t Incentive (paid in FY 2010) $ - $ - $ - $ - $ - Total $ 197,619 $ 168,099 $ 149,161 $ 155,804 $ 155,804 b. Legally required benefits t Social Security (FI) $ 6,634 $ 6,634 $ 6,634 $ 6,622 $ 6,622 t Medicare $ 2,865 $ 2,437 $ 2,163 $ 2,259 $ 2,259 Total $ 9,499 $ 9,071 $ 8,797 $ 8,881 $ 8,881 c. Health insurance premiums t Medical, Prescription Drug $ 15,922 $ 11,002 $ 15,922 $ 11,002 $ 11,002 t Dental $ 475 $ 475 $ 475 $ 436 $ 436 t Vision Care $ 103 $ 103 $ 103 $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 16,513 $ 11,593 $ 16,513 $ 11,554 $ 11,554 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 27,667 $ 23,534 $ 20,883 $ 21,812 $ 21,812 Total $ 27,667 $ 23,534 $ 20,883 $ 21,812 $ 21,812 g. Other benefits/perquisites t Automobile allowance $ 4,500 $ - $ - $ - $ - t Educational stipend (2% of base) $ - $ 3,362 $ 2,983 $ 3,116 $ 3,116 t Expense allowance $ 550 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 5,450 $ 4,312 $ 3,933 $ 4,066 $ 4,066 Total Benefits/Perquisite Cost $ 59,628 $ 49,009 $ 50,625 $ 46,812 $ 46,812 Total Compensation $ 257,247 $ 217,109 $ 199,786 $ 202,616 $ 202,616 h. Potential cash flows t Possible severance payments (FY 2010) $ - $ - $ - $ - $ - 50

51 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet Title NMC HR Administrator Quality/Complianc e Administrator Director of Cardiopulmonary Services Hospital Controller Manager of Diagnostic Imaging Services a. Cash Compensation t Annual Base Salary $ 139,256 $ 160,801 $ 135,880 $ 134,586 $ 132,979 t Incentive (paid in FY 2010) $ - $ - $ - $ - $ - Total $ 139,256 $ 160,801 $ 135,880 $ 134,586 $ 132,979 b. Legally required benefits t Social Security (FI) $ 6,634 $ 6,634 $ 6,634 $ 6,634 $ 6,634 t Medicare $ 2,019 $ 2,332 $ 1,970 $ 1,952 $ 1,928 Total $ 8,653 $ 8,966 $ 8,604 $ 8,586 $ 8,562 c. Health insurance premiums t Medical, Prescription Drug $ 11,002 $ 15,922 $ 13,815 $ 13,815 $ 13,815 t Dental $ 436 $ 475 $ 452 $ 452 $ 452 t Vision Care $ 103 $ 103 $ 103 $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 11,554 $ 16,513 $ 14,383 $ 14,383 $ 14,383 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 19,496 $ 22,512 $ 19,023 $ 18,842 $ 15,964 Total $ 19,496 $ 22,512 $ 19,023 $ 18,842 $ 15,964 g. Other benefits/perquisites t Automobile allowance $ - $ - $ - $ - $ - t Educational stipend (2% of base) $ 2,785 $ 3,216 $ 2,718 $ 2,692 $ 2,660 t Expense allowance $ 550 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 3,735 $ 4,166 $ 3,668 $ 3,642 $ 3,610 Total Benefits/Perquisite Cost $ 43,937 $ 52,655 $ 46,176 $ 45,951 $ 43,017 Total Compensation $ 183,193 $ 213,456 $ 182,056 $ 180,537 $ 175,996 h. Potential cash flows t Possible severance payments (FY 2010) $ - $ - $ - $ - $ - 51

52 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet Title Patient Financial Services Director Hospital Director of Nursing Education Hospital Director of Engineering & Safety Director of Health Information Management Medical Staff Coordinator a. Cash Compensation t Annual Base Salary $ 129,434 $ 114,028 $ 116,099 $ 111,598 $ 107,856 t Incentive (paid in FY 2010) $ - $ - $ - $ - $ - Total $ 129,434 $ 114,028 $ 116,099 $ 111,598 $ 107,856 b. Legally required benefits t Social Security (FI) $ 6,622 $ 6,622 $ 6,622 $ 6,622 $ 6,622 t Medicare $ 1,877 $ 1,653 $ 1,683 $ 1,618 $ 1,564 Total $ 8,498 $ 8,275 $ 8,305 $ 8,240 $ 8,186 c. Health insurance premiums t Medical, Prescription Drug $ 12,682 $ 14,383 $ - $ 12,682 $ 12,682 t Dental $ 452 $ - $ - $ 452 $ 452 t Vision Care $ 103 $ - $ - $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 13,250 $ 14,396 $ 13 $ 13,250 $ 13,250 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 22,166 $ 19,527 $ 19,882 $ 19,111 $ 18,470 Total $ 22,166 $ 19,527 $ 19,882 $ 19,111 $ 18,470 g. Other benefits/perquisites t Automobile allowance $ - $ - $ - $ - $ - t Educational stipend (2% of base) $ 2,589 $ 2,281 $ 2,322 $ 2,232 $ 2,157 t Expense allowance $ 550 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 950 $ 950 $ 950 $ 950 $ 950 Total Benefits/Perquisite Cost $ 45,362 $ 43,647 $ 29,649 $ 42,049 $ 41,354 Total Compensation $ 174,797 $ 157,675 $ 145,748 $ 153,648 $ 149,211 h. Potential cash flows t Possible severance payments (FY 2010) $ - $ - $ - $ - $ - 52

53 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet 21 No Match Title Managed Care Operations Manager Outpatient Services Manager II Hospital Director of Food Services Medical Librarian Hospital Risk Assessment & Compliance Officer a. Cash Compensation t Annual Base Salary $ 100,179 $ 96,986 $ 96,000 $ 75,712 $ 138,882 t Incentive (paid in FY 2010) $ - $ - $ - $ - $ - Total $ 100,179 $ 96,986 $ 96,000 $ 75,712 $ 138,882 b. Legally required benefits t Social Security (FI) $ 6,634 $ 6,192 $ 6,130 $ 4,847 $ 8,842 t Medicare $ 1,453 $ 1,406 $ 1,392 $ 1,098 $ 2,014 Total $ 8,087 $ 7,598 $ 7,522 $ 5,945 $ 10,856 c. Health insurance premiums t Medical, Prescription Drug $ 15,922 $ 11,002 $ 15,922 $ 11,002 $ 11,002 t Dental $ 436 $ 436 $ 475 $ 436 $ 436 t Vision Care $ 103 $ 103 $ 103 $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 16,474 $ 11,554 $ 16,513 $ 11,554 $ 11,554 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 17,156 $ 16,609 $ 16,440 $ 12,966 $ 23,783 Total $ 17,156 $ 16,609 $ 16,440 $ 12,966 $ 23,783 g. Other benefits/perquisites t Automobile allowance $ - $ - $ - $ - $ - t Educational stipend (2% of base) $ 2,004 $ 1,940 $ 1,920 $ 1,514 $ 2,778 t Expense allowance $ 550 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 2,954 $ 2,890 $ 2,870 $ 2,464 $ 3,728 Total Benefits/Perquisite Cost $ 45,169 $ 39,150 $ 43,844 $ 33,427 $ 50,420 Total Compensation $ 145,348 $ 136,136 $ 139,844 $ 109,139 $ 189,301 h. Potential cash flows t Possible severance payments (FY 2010) $ - $ - $ - $ - $ - 53

54 Tally Sheets Monterey County/Natividad Hospital 2011 Tally Sheet Title Chief Hospital Accountant Patient Account Manager Patient Admitting Manager Decision Support Manager Director of Environmental Services Hospital Purchasing & Materials Support Director a. Cash Compensation t Annual Base Salary $ 102,278 $ 80,018 $ 88,995 $ 117,832 $ 99,127 $ 125,923 t Incentive (paid in FY 2010) $ - $ - $ - $ - $ - $ - Total $ 102,278 $ 80,018 $ 88,995 $ 117,832 $ 99,127 $ 125,923 b. Legally required benefits t Social Security (FI) $ 6,527 $ 5,119 $ 5,687 $ 6,634 $ 6,328 $ 6,634 t Medicare $ 1,483 $ 1,160 $ 1,290 $ 1,709 $ 1,437 $ 1,826 Total $ 8,010 $ 6,279 $ 6,977 $ 8,343 $ 7,765 $ 8,460 c. Health insurance premiums t Medical, Prescription Drug $ 11,002 $ 15,922 $ 13,815 $ 13,815 $ 13,815 $ 11,002 t Dental $ 436 $ 475 $ 452 $ 452 $ 452 $ 436 t Vision Care $ 103 $ 103 $ 103 $ 103 $ 103 $ 103 t Employee Assistance Program (EAP) $ 13 $ 13 $ 13 $ 13 $ 13 $ 13 Total $ 11,554 $ 16,513 $ 14,383 $ 14,383 $ 14,383 $ 11,554 d. Life insurance premiums t Basic life and AD&D $ 138 $ 138 $ 138 $ 138 $ 138 $ 138 Total $ 138 $ 138 $ 138 $ 138 $ 138 $ 138 e. Disability premiums t Short-term disability/salary continuation $ 360 $ 360 $ 360 $ 360 $ 360 $ 360 t Long-term disability Total $ 360 $ 360 $ 360 $ 360 $ 360 $ 360 f. Retirement t Qualified plan payment - CalPERS $ 14,319 $ 11,202 $ 12,259 $ 16,496 $ 13,878 $ 17,629 Total $ 14,319 $ 11,202 $ 12,259 $ 16,496 $ 13,878 $ 17,629 g. Other benefits/perquisites t Automobile allowance $ - $ - $ - $ - $ - $ - t Educational stipend (2% of base) $ 2,046 $ 1,600 $ 1,780 $ 2,357 $ 1,983 $ 2,518 t Expense allowance $ 550 $ 550 $ 550 $ 550 $ 550 $ 550 t Membership fees $ 400 $ 400 $ 400 $ 400 $ 400 $ 400 Total $ 2,996 $ 2,550 $ 2,730 $ 3,307 $ 2,933 $ 3,469 Total Benefits/Perquisite Cost $ 37,377 $ 37,043 $ 36,848 $ 43,027 $ 39,457 $ 41,610 Total Compensation $ 139,655 $ 117,061 $ 125,843 $ 160,859 $ 138,584 $ 167,533 h. Potential cash flows t Possible severance payments (FY 2010) $ - $ - $ - $ - $ - $ - 54

55 Appendix B 55

56 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Medical/ prescription drugs Premiums paid through the Flexible Benefit Plan Two plans (Preferred Provider Plan and HMO) available; plus Alternate Benefit Option provides pre or post-tax cash for employees purchasing private coverage Employee and dependent coverage available Premiums paid through the Flexible Benefit Plan Two plans (Preferred Provider Plan and HMO) available; plus Alternate Benefit Option provides pre or post-tax cash for employees purchasing private coverage Employee and dependent coverage available Typical market practice is to provide health related benefits (e.g., medical, dental, vision, flexible spending accounts) to executives through broadbased programs. Usually no special provision for executives. Customary to have some level of cost-sharing (e.g., medical, dental, vision). Monterey County provided health benefits are consistent with typical market practice for executives and managers with benefits that are provided through broad-based plans with no special provisions. Dental Fee for service plan; Monterey County self-funded dental plan One plan available Dependent coverage available. Employee paid Fee for service plan; Monterey County self-funded dental plan One plan available Dependent coverage available. Employee paid 56

57 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Vision Preferred provider plan. Dependent coverage available. Employee paid Preferred provider plan. Dependent coverage available. Employee paid Typical market practice is to provide health related benefits (e.g., medical, dental, vision, flexible spending accounts) to executives through broadbased programs. Usually no special provision for executives. Customary to have some level of cost-sharing (e.g., medical, dental, vision). Monterey County provided health benefits are consistent with typical market practice for executives with benefits that are provided through broadbased plans with no special provisions. Monthly Expense Account/ Memberships $45.84 per month expense allowance. Educational Stipend: 2% of hourly base wage. Memberships: $400 per year for membership fees. $54.17 per month expense allowance. Educational Stipend: 2% of hourly base wage. Memberships: $400 per year for membership fees. Executives are typical covered by expense reimbursement policies rather than set monthly expense allowances. Allowances are provided as part of collective bargaining agreement and not subject to change without contract negotiation. Executives are not typically covered by collective bargaining agreement. 57

58 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Life insurance Basic/ Supplemental AD&D Dependent Life Group Term Life Insurance Basic employer-paid coverage of $50,000. Includes AD&D coverage. Supplemental coverage available in amounts up to 1.5 or 3 times annual salary, up to a maximum of $100,000. Employee paid premiums. Dependent Life option not provided. Group Term Life Insurance Basic employer-paid coverage of $50,000. Includes AD&D coverage. Supplemental coverage available in amounts up to 1.5 or 3 times annual salary, up to a maximum of $100,000. Employee paid premiums. Dependent Life option not provided. Basic Group Term Life and AD&D Employer-paid basic coverage ranges from 1 to 2 pay up to a maximum coverage limit. AD&D usually mirrors basic coverage and may also mirror optional coverage. Supplemental Group Term Life Total coverage through combination of employer-paid sources (basic and/or supplemental coverage) from 2 to 6 pay. Usually overall maximum applies (e.g., $1 to $2 million; emerging trend for higher limits). Dependent Life Spouse: $10,000 to $50,000 (movement in market to percentage of employee s coverage approach). Child: $5,000 to $10,000 per child. Typically employee-paid. Total available employersponsored coverage (group + supplemental) is significantly below the range of typical market practice. Dependent Life Not competitive with typical market practice. This benefit is not typically critical in the attraction and retention of executives. 58

59 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Long-term disability (LTD) Group Long-Term Disability 360 days Benefits begin the day after the elimination period is completed. Monthly benefit: % of monthly earnings to a maximum benefit of $4,000 per month. Group Long-Term Disability 360 days Benefits begin the day after the elimination period is completed. Monthly benefit: % of monthly earnings to a maximum benefit of $4,000 per month. Long-term disability: market for executives is pre-tax benefit ranging from 50% to 70% of base pay (some organizations replace total compensation): Maximum monthly benefit: ranges from $10,000 to $25,000; may have an all source maximum (e.g., can t exceed 75% or 100% of base pay). Usually provided through a combination of group/supplemental coverage, including individual policies. Group coverage provides less than competitive coverage compared with market practice. Elimination period of 360 days is not competitive with market standards. Short term disability coverage provides coverage for the first 180 of illness. However, even if an employee has the maximum amount of PTO hours accrued (850 hours) there is a significant period of time without coverage before long-term disability coverage commences. 59

60 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Combined Time Off 12 holidays (including one floating holiday) Paid Leave based on years of service (YOS): 0-2 YOS = 23 days >2 YOS = 25 days >6 YOS = 27 days >10 YOS = 30 days >15 YOS = 32 days >18 YOS = 33 days >20 YOS = 34 days >25 YOS = 37 days Accrual Maximum = 850 hours Professional leave = up to 10 days per year no accrual Cash out up to 160 hours per year. 12 holidays (including one floating holiday) Paid Leave based on years of service (YOS): 0-2 YOS = 23 days >2 YOS = 25 days >6 YOS = 27 days >10 YOS = 30 days >15 YOS = 32 days >18 YOS = 33 days >20 YOS = 34 days >25 YOS = 37 days Accrual Maximum = 850 hours Professional leave = up to 10 days per year no accrual Cash out up to 160 hours per year with 10 YOS. Special vacation provisions often apply to executives. Combined vacation, holidays, personal, and sick days: range of 26 to 37 days per year for executives. Gradually moving away from traditional PTO programs for executives because of increasing liability unless design features (e.g., limits on accrual; limited or no carryover) in PTO program are in place to control liability. Paid time off program is competitive with typical market practice. Organizations continue to monitor their PTO programs because of the liability associated with accumulating banks of unused PTO, and pay out provisions ; particularly upon the termination of employment. 60

61 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Short-term disability/ salary continuation/ sick leave Salary Continuation 100% of salary will be continued for up to 180 days in the event an executive is unable to work due to a health-related problem. Integrated with all other employer sponsored benefits to cap benefits at 100% of salary. Salary Continuation 100% of salary will be continued for up to 180 days in the event an executive is unable to work due to a health-related problem. Integrated with all other employer sponsored benefits to cap benefits at 100% of salary. Market: For executives, typically 100% salary continuation through the start of long term disability, especially for the CEO: Important to avoid a gap in coverage between shortterm illness/accident and long-term disability for executives. NMC coverage provides income replacement equal to market practice of 100% of pay for executives for the first 180 days. This benefit is fully competitive with market practice. 61

62 Detailed Benefits Analysis Benefit Monterey County Unit X Non- Safety Management Monterey County Unit Y Executive Management Market Practice Comments Retirement Benefits Primary Social Security Employer- and employee-provided benefits. Retirement Plan California Public Employees Retirement System (CalPERS) Employer pays employee portion of contribution (7% of salary). Plus employer contribution of 10% of salary. 2% at 55 Formula Minimum age requirement - age 50 with 5 years of service Final Compensation highest 12 month average. Primary Social Security Employer- and employee-provided benefits. Retirement Plan California Public Employees Retirement System (CalPERS) Employer pays employee portion of contribution (7% of salary). Plus employer contribution of 10% of salary. 2% at 55 Formula Minimum age requirement - age 50 with 5 years of service Final Compensation single highest year. Defined benefit programs (e.g. cash balance plans) remain commonly provided (although the market trend is toward defined contribution programs). Typical to provide defined contribution retirement program with employer contributions and/or employee deferral opportunities. Monterey County provided qualified retirement programs are highly competitive with typical market practice. 62

63 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Retirement Benefits 457(f) and 457(b) 457(b) provided Employee contributions only 457(f) and 457(b) 457(b) provided Employee contributions only Typical to provide supplemental nonqualified retirement benefits (approximately 60% of organizations) where pay used to calculate qualified retirement benefits is limited by statutory caps or income replacement from other employer-provided sources falls below market norms. For executives, typical employerfunded retirement benefits (when described in terms of income replacement) range from 40% to 70% of final average pay (base or base plus bonus) after a full career at the organization (typically 20 years of service); 50% and 60% are the most common targets. Trend continues to using defined contribution approaches for supplemental retirement benefits, whether providing a target benefit or not. Monterey County -provided nonqualified retirement programs are below typical market practice of organizations that offer supplemental retirement programs. However, qualified retirement benefits are highly competitive, reducing the needed reliance on supplemental benefits. See: sample analysis. Please note that it is important to review retirement contribution levels in context of total compensation. 63

64 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Severance Not Provided The CEO, CFO, CMO and CIO are provided 6 months of severance if employed for less than 12 months, and if employed for greater than 12 months, severance is provided for 12 months following termination without cause. Executives are provided the equivalent of COBRA rates for medical premiums if the terminated executive elects medical benefits under COBRA. Market Practice The market practice for severance is: CEO: 12 to 36 months, with 24 months most common. Other executives: six to 18 months. Typical to include base salary plus standard health benefits; target incentive may be included, but less prevalent; life and LTD benefits often continued, but less prevalent. Movement toward offset of severance upon reemployment. Severance events typically include the following: Termination by employer without cause. Termination by employee for good reason (i.e., breach of agreement by employer, reduction in employee s duties or pay) or constructive termination. Change in control and termination by employee for good reason (double trigger). Termination by employer due to employee s total disability (severance benefits reduced by disability benefits). Non-renewal of agreement by employer, but not in the event of employee s retirement, employee s voluntary termination, or termination by employer for cause. Comments Benefits provided are on the lower end of Market standards. The lack of severance for other executives is not competitive with market standards. 64

65 Detailed Benefits Analysis Benefit Monterey County Unit X Non-Safety Management Monterey County Unit Y Executive Management Market Practice Comments Perquisites Car Allowance Not Provided Car Allowance Monthly Allowance of $ for use of privately owned automobile for execution of official duties. Trend toward providing perquisites based on business necessity only. Trend towards fewer perquisites due to increased scrutiny (e.g., IRS Form 990). Perquisites for executives that are prevalent in the market include: Car allowance. Professional associations. Monterey County provided perquisites are consistent with typical market practice. Alternative Benefit Option Account- Flexible Benefit Plan In lieu of broad-based benefits Employees may to elect from a list of benefits and pay the benefit cost with either employee pre-tax contributions, employer contributions or employee aftertax contributions (for specific benefits). In lieu of broad-based benefits Employees may to elect from a list of benefits and pay the benefit cost with either employee pre-tax contributions, employer contributions or employee aftertax contributions (for specific benefits). Being that this benefit is paid in lieu of broad-based benefits, we reviewed as if they were eligible for the underlying benefits. 65

66 Retirement Information RETIREMENT BENEFITS ASSESSMENT Typical market practice retirement benefits, when integrated with all of the organization s retirement sources (including 100% Primary Social Security), range from 40% to 70% of final average pay (base or base plus annual pay at risk award), prorated for service less than 20 years. The resulting average annual accrual rate range is 2.0% to 3.5% per year of service. Generally, the upper end of the target (market) range is reserved for the President/CEO. Natividad executives are provided retirement benefits through Primary Social Security and a broad-based defined benefit plan (CalPERS). Current sources of Natividad-provided retirement benefits are estimated to provide income replacement within the range of typical market practice for the hypothetical executives in this report. For this analysis, we assumed the following for the hypothetical executives: 2011 base salary of $150,000 and $250,000. Hypothetical executives was assumed to participate in the defined benefit retirement plan (CalPERS 2% at 55 Plan). Current age 45, with full career (20 years of service) at normal retirement age 65. The next page present a model for the hypothetical executives. Details of the assumptions used in the projections are provided on page

67 Income Replacement Ratios at Retirement Age Retirement Information: Income Replacement Ratios 80% Estimated Income Replacement Typical Market Practice and Current Sources 60% 40% 20% 0% Current Age (1/1/2011) Service at Normal Retirement Age 20 years 20 years Current Base Pay $150,000 $250,000 CalPERS 48.4% 43.2% Primary Social Security 18.1% 10.9% Total 66.5% 54.1% Market Target - 60% 70% 70% Market Target - 40% 40% 40% Average Annual Accrual 3.3% 2.7% This chart compares income replacement provided by the Natividad retirement benefits that include a defined benefit plan (CalPERS), along with Primary Social Security to typical market practice. Please note that employerprovided benefits were based on pay subject to the statutory pay cap ($245,000 in 2011). Replacement ratios are calculated by dividing the retirement benefit by three-year final average pay (base pay). 67

68 Retirement Information: Assumptions Used Annual salary increases 3% per year Primary Social Security Wage base increases: 3% CPI: 2.5% ASSUMPTIONS Statutory limits (pay and benefit limitations) 2.5% per year Defined Benefit Assumes executives participate in the CalPERS 2% at 55 Plan, with benefits based on pay subject to the statutory limit ($245,000 in 2011) Plan formula provided by the client 68

69 Appendix C 69

70 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Hospital Chief Executive Officer Position Match: President and CEO, Freestanding Hospital Low Step: $283,508 Assets (Million): $206.0 MEC 2000 Mid Step: none Beds: High Step: $387,000 FTEs: California Health Care - Categorical Chief Executive 4001 Officer Chief Executive 4001 Officer Chief Executive 4001 Officer $150M - $400M Northern 185 $256,677 $330,479 $406,422 $529,459 $278,601 $410,457 $517,070 $616,839 $368,204 $517,772 $642,612 $771, $246,589 $325,698 $397,197 $485,420 $271,505 $398,859 $507,743 $588,420 $358,686 $505,027 $631,070 $732, $343,743 $369,149 $414,000 $518,121 $426,932 $458,486 $514,191 $643,510 $537,430 $575,082 $641,551 $795, Average: $282,336 $341,775 $405,873 $511,000 $325,679 $422,601 $513,002 $616,256 $421,440 $532,627 $638,411 $766,896 Regional Health Care - Categorical President and CEO, Hospital Freestanding 2000 Hospital Independent Chief Hospital 50 Executive Officer President/CEO - Hospital 4100B Stand Alone $209.7 $453.5 West 14 $419,777 $543,191 $684,684 $766,299 $458,233 $625,328 $850,317 $1,220,560 $563,792 $753,102 $1,003,560 $1,388, $508,740 $626,230 $729,750 $776,663 $508,740 $674,915 $824,201 $847,553 $630,313 $817,636 $985,556 $1,017, Average: $464,258 $584,710 $707,217 $771,481 $483,486 $650,121 $837,259 $1,034,056 $597,053 $785,369 $994,558 $1,202,923 Health Care - Categorical President and CEO, Hospital Freestanding 2000 Hospital $214.4 President and CEO, Hospital $150M - $400M Freestanding 2000 Hospital $255.1 Independent Chief Hospital 50 Executive Officer $246.0 Independent Chief Hospital $150M - $450M 50 Executive Officer $253.0 President/CEO - Hospital $200M - $400M 4100B Stand Alone $ $408,700 $501,182 $645,915 $757,625 $422,076 $538,175 $754,072 $974,463 $525,641 $658,388 $900,337 $1,140, $433,989 $491,986 $579,035 $646,542 $474,639 $536,399 $687,297 $801,411 $606,796 $682,475 $854,265 $984, $317,598 $458,700 $594,642 $729,750 $332,558 $489,454 $702,489 $847,553 $436,781 $627,542 $873,203 $1,050, $422,213 $474,233 $567,641 $644,369 $428,468 $531,571 $675,019 $748,515 $557,799 $673,387 $839,253 $931, $410,539 $479,325 $621,878 $749,847 $422,781 $578,510 $730,193 $866,358 $549,311 $721,548 $907,443 $1,074, Average: $398,607 $481,085 $601,822 $705,627 $416,104 $534,822 $709,814 $847,660 $535,266 $672,668 $874,900 $1,036,319 Average with 13% geographic differential: $450,426 $543,626 $680,059 $797,358 $470,198 $604,348 $802,089 $957,856 $604,850 $760,115 $988,637 $1,171, Composite Average with geographic differentials: $399,007 $490,037 $597,716 $693,279 $426,454 $559,024 $717,450 $869,389 $541,114 $692,704 $873,869 $1,046,953 70

71 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Hospital Chief Medical Officer Position Match: Chief Medical Officer, Freestanding Hospital Low Step: $240,775 Assets (Million): $206.0 MEC 2015 Mid Step: none Beds: High Step: $328,668 FTEs: California Health Care - Categorical Chief Medical 4011 Officer/Head of MA Chief Medical 4011 Officer/Head of MA Chief Medical 4011 Officer/Head of MA $150M - $400M Northern 61 $250,127 $287,700 $323,587 $426,603 $271,705 $331,208 $379,017 $442,463 $346,232 $413,625 $468,971 $554, $253,581 $289,810 $338,111 $439,881 $272,663 $325,942 $389,775 $446,344 $347,915 $408,802 $482,779 $560, $249,269 $275,795 $309,298 $364,320 $286,965 $317,503 $356,071 $419,415 $361,312 $397,420 $443,024 $517, Average: $250,993 $284,435 $323,665 $410,268 $277,111 $324,884 $374,955 $436,074 $351,820 $406,616 $464,924 $544,230 Regional Health Care - Categorical Chief Medical Hospital Officer, Freestanding Hospital 2015 $209.7 Chief Medical Officer Hospital 650 $456.0 Chief Medical Officer Hospital $150M - $400M 4320B $257.4 West 9 $283,300 $331,056 $441,513 $495,226 $283,300 $358,017 $612,370 $730,351 $364,792 $449,539 $727,088 $856, $298,155 $349,238 $417,000 $456,407 $317,963 $392,189 $436,078 $511,972 $402,575 $487,528 $545,648 $629, $266,534 $283,030 $294,443 $304,688 $307,930 $339,885 $366,756 $390,879 $385,902 $421,321 $450,589 $476, Average: $282,663 $321,108 $384,318 $418,773 $303,064 $363,364 $471,735 $544,400 $384,423 $452,796 $574,442 $654,343 Health Care - Categorical Chief Medical Hospital Officer, Freestanding Hospital 2015 $214.4 Chief Medical Hospital $150M - $400M Officer, Freestanding Hospital 2015 $255.1 Chief Medical Officer Hospital 650 $340.1 Chief Medical Officer Hospital $150M - $450M 650 $278.0 Chief Medical Officer Hospital $200M - $400M 4320B $ $286,226 $335,027 $390,517 $497,525 $297,930 $357,495 $452,799 $582,170 $380,037 $449,850 $556,807 $708, $286,226 $313,500 $358,749 $423,852 $291,869 $329,489 $382,575 $498,465 $373,976 $417,324 $479,912 $609, $267,401 $312,750 $359,767 $431,595 $289,919 $344,390 $404,959 $475,484 $368,074 $432,067 $502,510 $588, $271,050 $300,866 $333,496 $365,918 $291,900 $332,349 $370,088 $403,343 $370,821 $417,531 $462,122 $502, $272,344 $290,500 $333,038 $371,223 $293,301 $340,093 $369,558 $396,008 $372,493 $423,098 $461,495 $495, Average: $276,649 $310,529 $355,113 $418,022 $292,984 $340,763 $395,995 $471,094 $373,080 $427,974 $492,569 $580,879 Average with 13% geographic differential: $312,614 $350,897 $401,278 $472,365 $331,072 $385,062 $447,475 $532,336 $421,580 $483,610 $556,603 $656, Composite Average with geographic differentials: $282,090 $318,813 $369,754 $433,802 $303,749 $357,770 $431,388 $504,270 $385,941 $447,674 $531,990 $618,322 71

72 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Hospital Chief Financial Officer Position Match: Chief Financial Officer, Freestanding Hospital Low Step: $219,450 Assets (Million): $206.0 MEC 2025 Mid Step: none Beds: High Step: $299,556 FTEs: California Health Care - Categorical Chief Financial 4003 Officer Chief Financial 4003 Officer Chief Financial 4003 Officer $150M - $400M Northern 149 $178,920 $218,337 $262,782 $347,589 $191,475 $238,050 $306,757 $384,045 $251,048 $305,901 $383,942 $479, $168,770 $205,655 $246,252 $313,108 $185,647 $228,735 $297,260 $377,360 $243,089 $293,922 $370,973 $465, $216,809 $234,533 $270,988 $316,122 $236,383 $255,708 $295,454 $344,663 $303,913 $326,959 $374,361 $433, Average: $188,166 $219,508 $260,007 $325,607 $204,502 $240,831 $299,824 $368,689 $266,017 $308,928 $376,425 $459,067 Regional Health Care - Categorical Chief Financial Hospital Officer, Freestanding Hospital 2025 $209.7 Independent Chief Hospital 425 Financial Officer $453.5 Chief Financial Hospital $150M - $400M 4230B Officer $253.4 West 13 $252,681 $331,056 $413,402 $430,436 $261,250 $334,714 $509,856 $589,171 $336,313 $426,235 $618,670 $701, $334,382 $378,428 $415,905 $430,448 $338,813 $432,168 $477,413 $567,641 $431,033 $533,638 $586,753 $680, $191,523 $236,550 $285,416 $329,284 $223,478 $292,886 $353,373 $407,671 $285,697 $364,562 $435,310 $498, Average: $259,528 $315,345 $371,575 $396,722 $274,513 $353,256 $446,880 $521,494 $351,014 $441,478 $546,911 $626,806 Health Care - Categorical Chief Financial Hospital Officer, Freestanding Hospital 2025 $214.4 Chief Financial Hospital $150M - $400M Officer, Freestanding Hospital 2025 $255.1 Independent Chief Hospital 425 Financial Officer $249.5 Independent Chief Hospital $150M - $450M 425 Financial Officer $252.1 Chief Financial Hospital $200M - $400M 4230B Officer $ $232,408 $298,975 $369,199 $452,903 $253,726 $316,531 $420,090 $550,088 $324,532 $401,315 $519,622 $667, $251,636 $290,615 $327,190 $381,216 $261,773 $307,335 $369,408 $430,854 $336,616 $390,364 $460,117 $532, $192,863 $267,558 $347,987 $419,606 $192,863 $276,263 $391,355 $507,176 $255,364 $354,450 $486,432 $617, $236,648 $274,282 $317,337 $355,180 $250,200 $287,313 $355,180 $430,448 $321,896 $366,912 $443,821 $527, $197,333 $226,279 $266,949 $303,458 $231,881 $284,794 $330,340 $371,227 $295,321 $354,312 $408,399 $456, Average: $222,177 $271,541 $325,732 $382,473 $238,088 $294,447 $373,274 $457,959 $306,746 $373,471 $463,678 $560,278 Average with 13% geographic differential: $251,060 $306,842 $368,077 $432,194 $269,040 $332,725 $421,800 $517,493 $346,623 $422,022 $523,956 $633, Composite Average with geographic differentials: $232,918 $280,565 $333,220 $384,841 $249,352 $308,937 $389,501 $469,226 $321,218 $390,809 $482,431 $572,996 72

73 Nat i vi dad Medical Center Market Pricing Svy Job/ Posit ion Typi cal Geographic Survey Source Page #Survey Ti t l e I ndust ry Cat egory Scope Hospi t al Nursi ngof icer Posi t i on Mat ch:pat i ent CareServi ces Executi ve Low St ep:$181, 588 Asset s ( Mil lion) $206. : 0 M EC2035 M i d St ep: $213, 138 Beds: Hi gh St ep:$247, 872 FTEs: Cal i f ornia Health Care - Cat egorical Head of Patient Hospit al - Single Al O r gs Car e Facilit y Ser vices/ CNO/ CN 4007 E Head of Patient Hospit al - Single Al O r gs Car e Facilit y Ser vices/ CNO/ CN 4007 E Head of Patient Hospit al - Single $150M - Car e Facilit y $400M Ser vices/ CNO/ CN 4007 E Labor Market Dat a - Ef f ecti ve Jul y 1, 2011 Labor Market Dat a - Ef f ecti ve Jul y 1, t h 50t h 75t h 90t h 25t h 50t h 75t h 90t h 25t h 50t h 75t h 90t h 55 $157, 563$186, 559$236, 571 $282, 461$157, 864$207, 002$253, 357$323, 914$212, 953$268, 180$325, 037$405, 231 Nor t her n 31 $157, 864$190, 958$229, 256 $292, 683$160, 787$199, 436$253, 357$327, 453$215, 939$261, 537$323, 500$410, $186, 267$221, 676$237, 744 $309, 976$206, 677$245, 966$263, 796$343, 942$267, 793$314, 518$335, 722$431, Aver age:$167, 232$199, 731$234, 524 $295, 040$175, 110$217, 468$256, 836$331, 770$232, 228$281, 412$328, 086$415, 728 Regional Health Care - Categorical S: MEC Pat ient Care 2035 Services Executive Hospit al Al O r gs West $ $180, 681$209, 209$242, 336 $261, 041$199, 177$232, 931$281, 941$298, 243$259, 120$298, 864$354, 831$375, 062 I HS Top Executive, 120 Pat ient Care Hospit al Al O r gs $ $209, 543$224, 972$269, 799 $292, 943$217, 570$252, 728$312, 437$364, 145$283, 574$321, 972$391, 095$447, 663 M: I HN Top Pat ient Car e 4381B Hospit al Al O r gs Execut ive $ $141, 204$231, 466$261, 761 $288, 957$141, 204$260, 931$289, 878$315, 863$192, 857$331, 539$366, 847$398, Aver age:$177, 142$221, 882$257, 965 $280, 980$185, 984$248, 863$294, 752$326, 084$245, 183$317, 459$370, 925$407, 089 HealthCare - Categorical S: M EC Pat ient Care Hospit al Al O r gs Nat ional 2035 Services Executive $ $160, 930$192, 176$224, 466 $260, 101$171, 694$207, 851$256, 652$294, 899$227, 489$270, 207$325, 790$371, 520 S: M EC Pat ient Care Hospit al $150M - Nat ional 2035 Services Executive $400M $ $182, 875$198, 550$228, 228 $253, 935$188, 414$221, 018$262, 713$290, 510$248, 817$284, 713$332, 641$365, 836 I HS Top Executive, 120 Hospit al Al O r gs Nat ional Pat ient Care $ $161, 483$190, 569$223, 095 $258, 540$168, 155$208, 552$248, 741$303, 368$224, 067$270, 572$317, 590$379, 661 I HS Top Executive, Hospit al $150M - ional 120 Pat ient Care $450M $268. 3Nat 87 $177, 225$196, 094$219, 968 $250, 409$186, 920$218, 821$257, 706$280, 328$246, 138$282, 001$325, 899$354, 914 M: I HN Top Pat ient Car Hospit e al $200M - ional 4381B Execut ive $400M $297. 1Nat 27 $192, 664$212, 273$229, 806 $245, 546$210, 301$230, 740$267, 364$300, 241$272, 761$297, 317$337, 623$373, Aver age:$175, 035$197, 932$225, 113 $253, 706$185, 097$217, 396$258, 635$293, 869$243, 854$280, 962$327, 909$369, 147 Aver age wi t h 13% geog raphi c di f f e rent i al : $197, 790$223, 663$254, 377 $286, 688$209, 159$245, 658$292, 258$332, 072$275, 555$317, 487$370, 537$417, Com posi t Aver e age wi t h geog raphi c di rent f f e i al s:$180, 721$215, 092$248, 955 $287, 569$190, 084$237, 330$281, 282$329, 975$250, 989$305, 452$356, 516$413, 318 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Hospital Nursing Officer Position Match: Patient Care Services Executive Low Step: $181,588 Assets (Million): $206.0 MEC 2035 Mid Step: $213,138 Beds: High Step: $247,872 FTEs: California Health Care - Categorical Head of Patient Care Services/CNO/CNE 4007 Head of Patient Care Services/CNO/CNE 4007 Head of Patient Care Services/CNO/CNE 4007 $150M - $400M Northern 55 $157,563 $186,559 $236,571 $282,461 $157,864 $207,002 $253,357 $323,914 $212,953 $268,180 $325,037 $405, $157,864 $190,958 $229,256 $292,683 $160,787 $199,436 $253,357 $327,453 $215,939 $261,537 $323,500 $410, $186,267 $221,676 $237,744 $309,976 $206,677 $245,966 $263,796 $343,942 $267,793 $314,518 $335,722 $431, Average: $167,232 $199,731 $234,524 $295,040 $175,110 $217,468 $256,836 $331,770 $232,228 $281,412 $328,086 $415,728 Regional Health Care - Categorical Patient Care 2035 Services Executive Top Executive, 120 Patient Care Top Patient Care 4381B Executive Hospital Hospital Hospital $209.7 $468.1 $418.5 West 26 $180,681 $209,209 $242,336 $261,041 $199,177 $232,931 $281,941 $298,243 $259,120 $298,864 $354,831 $375, $209,543 $224,972 $269,799 $292,943 $217,570 $252,728 $312,437 $364,145 $283,574 $321,972 $391,095 $447, $141,204 $231,466 $261,761 $288,957 $141,204 $260,931 $289,878 $315,863 $192,857 $331,539 $366,847 $398, Average: $177,142 $221,882 $257,965 $280,980 $185,984 $248,863 $294,752 $326,084 $245,183 $317,459 $370,925 $407,089 Health Care - Categorical Patient Care 2035 Services Executive Patient Care 2035 Services Executive Top Executive, 120 Patient Care Top Executive, 120 Patient Care Top Patient Care 4381B Executive Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $245.5 Hospital $150M - $450M $268.3 Hospital $200M - $400M $ $160,930 $192,176 $224,466 $260,101 $171,694 $207,851 $256,652 $294,899 $227,489 $270,207 $325,790 $371, $182,875 $198,550 $228,228 $253,935 $188,414 $221,018 $262,713 $290,510 $248,817 $284,713 $332,641 $365, $161,483 $190,569 $223,095 $258,540 $168,155 $208,552 $248,741 $303,368 $224,067 $270,572 $317,590 $379, $177,225 $196,094 $219,968 $250,409 $186,920 $218,821 $257,706 $280,328 $246,138 $282,001 $325,899 $354, $192,664 $212,273 $229,806 $245,546 $210,301 $230,740 $267,364 $300,241 $272,761 $297,317 $337,623 $373, Average: $175,035 $197,932 $225,113 $253,706 $185,097 $217,396 $258,635 $293,869 $243,854 $280,962 $327,909 $369,147 Average with 13% geographic differential: $197,790 $223,663 $254,377 $286,688 $209,159 $245,658 $292,258 $332,072 $275,555 $317,487 $370,537 $417, Composite Average with geographic differentials: $180,721 $215,092 $248,955 $287,569 $190,084 $237,330 $281,282 $329,975 $250,989 $305,452 $356,516 $413,318 Regi on n = Base Sal ary Tot al Cash Compensation Tot al Compensat ion 73

74 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Hospital Assistant Administrator (1), Operations & Support Services Survey Position Title Industry Position Match: Professional Services Executive (with 10% premium for scope of responsibilities) Low Step: $168,366 Assets (Million): $206.0 MEC 2055 Mid Step: $197,619 Beds: High Step: $229,824 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical Head of Professional Services (Clinical) Head of Professional Services (Clinical) Head of Professional Services (Clinical) $150M - $400M Northern 33 $158,969 $185,058 $207,547 $251,494 $177,331 $191,599 $237,056 $283,159 $232,714 $252,461 $302,641 $357, $152,504 $167,630 $198,110 $231,076 $176,445 $187,623 $227,369 $258,435 $230,471 $244,826 $290,972 $328, $183,838 $199,648 $222,648 $251,494 $190,336 $206,705 $230,518 $260,383 $250,942 $270,631 $299,274 $335, Average: $165,104 $184,112 $209,435 $244,688 $181,371 $195,309 $231,648 $267,326 $238,042 $255,973 $297,629 $340,710 Average (with 10% premium): $181,614 $202,523 $230,379 $269,156 $199,508 $214,840 $254,812 $294,058 $261,847 $281,570 $327,392 $374,781 Regional Health Care - Categorical Professional Hospital 2055 Services Executive Top Executive, Hospital Professional 175 Services Head of Professional Hospital Services 4440B $209.7 $518.4 West 10 $178,486 $191,862 $225,825 $247,352 $193,325 $210,045 $259,892 $278,806 $252,807 $272,336 $329,315 $352, $188,745 $215,798 $232,425 $293,672 $211,680 $232,061 $290,180 $357,995 $273,316 $299,378 $360,989 $441,666 $ $163,303 $181,978 $208,641 $232,577 $192,145 $207,708 $247,236 $282,721 $248,439 $267,923 $313,051 $353, Average: $176,844 $196,546 $222,297 $257,867 $199,050 $216,604 $265,769 $306,507 $258,187 $279,879 $334,452 $382,659 Average (with 10% premium): $194,529 $216,200 $244,527 $283,654 $218,955 $238,265 $292,346 $337,158 $284,006 $307,867 $367,897 $420,925 Health Care - Categorical Professional Hospital 2055 Services Executive $214.4 Professional Hospital $150M - $400M 2055 Services Executive $255.1 Top Executive, Hospital Professional 175 Services $294.6 Top Executive, Hospital $150M - $450M Professional 175 Services $264.2 Head of Professional Hospital $200M - $400M Services 4440B $ $153,615 $177,859 $206,388 $249,128 $162,707 $198,028 $232,826 $277,343 $216,966 $257,378 $298,167 $351, $161,766 $175,456 $197,923 $229,587 $164,483 $192,071 $218,719 $247,247 $220,454 $250,917 $282,282 $317, $148,087 $180,874 $205,529 $236,231 $161,796 $193,749 $236,022 $271,050 $214,894 $253,732 $301,183 $342, $159,607 $180,196 $198,909 $224,555 $167,738 $198,596 $224,607 $257,393 $223,256 $258,437 $288,378 $326, $167,038 $176,064 $199,719 $220,954 $167,141 $202,209 $226,175 $247,690 $224,219 $261,182 $290,116 $316, Average: $158,022 $178,090 $201,693 $232,091 $164,773 $196,930 $227,670 $260,145 $219,958 $256,329 $292,025 $330,884 Average (with 10% premium): $173,825 $195,899 $221,863 $255,300 $181,250 $216,623 $250,437 $286,159 $241,953 $281,962 $321,228 $363,972 Average with 13% geographic differential: $196,422 $221,365 $250,705 $288,489 $204,813 $244,785 $282,993 $323,360 $273,407 $318,617 $362,987 $411, Composite Average with geographic differentials: $190,855 $213,363 $241,870 $280,433 $207,758 $232,630 $276,717 $318,192 $273,087 $302,685 $352,759 $402,332 74

75 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Hospital Assistant Administrator (2), Community & Organizational Relations Industry Position Match: Public Affairs Executive Low Step: $168,366 Assets (Million): $206.0 MEC 2080 Mid Step: $197,619 Beds: High Step: $229,824 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Public Affairs Hospital 2080 Executive Head of Public Hospital 720 Relations Top Public Relations Hospital 4361B Executive $209.7 $578.4 West 2 6 $95,910 $125,361 $142,301 $95,910 $127,863 $155,645 $138,051 $176,188 $207, Average: $95,910 $125,361 $142,301 $95,910 $127,863 $155,645 $138,051 $176,188 $207,529 Health Care - Categorical Public Affairs Hospital 2080 Executive $ $143,061 $168,454 $249,128 $309,529 $148,704 $175,247 $261,564 $336,804 $200,746 $232,622 $335,880 $423,805 Public Affairs Hospital $150M - $400M 2080 Executive $ $139,508 $148,704 $177,546 $187,578 $146,927 $163,229 $189,459 $200,327 $198,224 $216,457 $248,743 $261,718 Hospital Hospital $150M - $450M Hospital $200M - $400M Average: $141,284 $158,579 $213,337 $248,553 $147,815 $169,238 $225,511 $268,565 $199,485 $224,539 $292,312 $342,761 Average with 13% geographic differential: $159,651 $179,194 $241,071 $280,865 $167,031 $191,239 $254,827 $303,478 $225,418 $253,729 $330,312 $387, Composite Average with geographic differentials: $127,780 $152,277 $191,686 $280,865 $131,471 $159,551 $205,236 $303,478 $181,735 $214,959 $268,920 $387,320 75

76 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Survey Position Title Industry Hospital Chief Information Officer Category Typical Scope Position Match: Chief Information Officer Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: Assets (Million): $206.0 MEC 2030 Mid Step: Beds: High Step: FTEs: California Health Care - Categorical Chief Information Officer 36 $140,556 $180,802 $257,266 $320,333 $141,408 $194,062 $258,205 $391,588 $192,925 $254,030 $334,230 $480,858 Chief Information Officer Northern 13 $141,191 $191,474 $281,685 $351,045 $147,194 $201,629 $281,685 $433,534 $198,844 $263,839 $362,839 $529,254 Chief Information Officer $150M - $400M 11 $136,159 $162,321 $196,650 $242,764 $146,146 $174,226 $211,073 $260,569 $196,739 $230,314 $274,369 $333, Average: $139,302 $178,199 $245,200 $304,714 $144,916 $189,973 $250,321 $361,897 $196,169 $249,394 $323,813 $447,887 Regional Health Care - Categorical Chief Information Officer Hospital $209.7 West 7 $235,125 $270,864 $322,905 $235,125 $298,034 $424,793 $306,501 $376,915 $514,603 Chief Information Officer Hospital $ $260,625 $270,633 $322,133 $468,395 $260,625 $281,579 $417,000 $481,010 $337,356 $360,412 $506,648 $601,373 Chief Information Officer Hospital $ $208,226 $322,455 $469,054 $217,045 $322,455 $553,921 $282,773 $412,171 $674, Average: $234,659 $287,984 $371,364 $468,395 $237,598 $300,689 $465,238 $481,010 $308,877 $383,166 $565,224 $601,373 Health Care - Categorical Chief Information Officer Hospital $ $185,279 $216,315 $268,879 $340,148 $198,341 $231,990 $294,377 $364,914 $259,249 $299,416 $372,841 $458,345 Chief Information Officer Hospital $150M - $400M $ $182,248 $201,894 $235,857 $286,330 $194,997 $212,658 $269,192 $323,950 $255,269 $277,055 $340,722 $406,079 Chief Information Officer Hospital $ $159,920 $202,662 $262,710 $306,808 $164,819 $225,232 $279,859 $353,929 $220,402 $289,791 $357,028 $440,358 Chief Information Officer Hospital $150M - $450M $ $154,290 $192,863 $221,219 $247,490 $164,611 $198,075 $242,798 $271,050 $219,012 $260,576 $311,254 $345,023 Chief Information Officer Hospital $200M - $400M $ $180,421 $191,004 $212,688 $232,153 $182,393 $202,313 $223,166 $241,887 $242,281 $264,423 $289,831 $312, Average: $172,431 $200,947 $240,270 $282,586 $181,032 $214,053 $261,878 $311,146 $239,243 $278,252 $334,335 $392,489 Average with 13% geographic differential: $194,848 $227,071 $271,505 $319,322 $204,566 $241,880 $295,923 $351,595 $270,344 $314,425 $377,799 $443, Composite Average with geographic differentials: $189,603 $231,085 $296,023 $364,144 $195,693 $244,181 $337,160 $398,167 $258,463 $315,662 $422,279 $497,591 76

77 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Pharmacy Director Position Match: Pharmacy Executive Low Step: $135,770 Assets (Million): $206.0 MEC 2215 Mid Step: $159,357 Beds: High Step: $185,328 FTEs: California Health Care - Categorical Head of Pharmacy 4018 Services Head of Pharmacy 4018 Services Head of Pharmacy 4018 Services $150M - $400M Northern 19 $157,152 $171,643 $183,612 $204,774 $157,152 $175,736 $191,646 $208,120 $205,440 $226,631 $244,696 $264, $160,521 $179,285 $194,393 $164,349 $183,560 $199,029 $213,243 $235,832 $254, Average: $158,837 $175,464 $189,003 $204,774 $160,751 $179,648 $195,338 $208,120 $209,341 $231,232 $249,358 $264,979 Regional Health Care - Categorical Pharmacy Executive Hospital West 2215 $ Head of Pharmacy Hospital $ $156,375 $168,677 $178,685 $198,701 $163,256 $177,486 $198,701 $203,496 $211,403 $227,847 $250,864 $259, B Head of Pharmacy Hospital $150M - $400M $ $163,718 $173,885 $185,090 $195,149 $177,620 $193,286 $205,736 $216,913 $227,089 $244,586 $259,052 $272, Average: $160,046 $171,281 $181,887 $196,925 $170,438 $185,386 $202,218 $210,204 $219,246 $236,216 $254,958 $265,651 Health Care - Categorical Pharmacy Executive Hospital 2215 $ $148,704 $184,338 $196,251 $239,828 $150,271 $184,338 $199,282 $242,440 $197,038 $237,519 $254,607 $305,609 Pharmacy Executive Hospital $150M - $400M 2215 $ $139,090 $145,987 $202,312 $139,090 $148,495 $202,312 $184,126 $194,772 $258, Head of Pharmacy Hospital $ $137,177 $147,410 $162,317 $177,121 $138,653 $151,163 $170,032 $184,731 $183,344 $197,696 $219,249 $236, Head of Pharmacy Hospital $150M - $450M $ $138,653 $148,452 $158,460 $171,283 $141,780 $152,831 $167,530 $178,685 $186,737 $199,552 $216,053 $229, B Head of Pharmacy Hospital $200M - $400M $ $143,486 $150,645 $165,896 $179,587 $145,458 $159,153 $175,441 $190,064 $191,285 $206,269 $225,303 $242, Average: $141,422 $155,366 $177,047 $191,955 $143,050 $159,196 $182,919 $198,980 $188,506 $207,162 $234,788 $253,532 Average with 13% geographic differential: $159,807 $175,564 $200,063 $216,909 $161,647 $179,891 $206,699 $224,847 $213,012 $234,093 $265,310 $286, Composite Average with geographic differentials: $159,563 $174,103 $190,318 $206,203 $164,278 $181,642 $201,418 $214,390 $213,866 $233,847 $256,542 $272,373 77

78 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Director of Surgical Services Position Match: Head of Surgical Services Low Step: $114,733 Assets (Million): $206.0 MEC 2280 Mid Step: $134,674 Beds: High Step: $156,624 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Surgical 2280 Services Head of Surgical 135 Services Head of Surgical 4400B Services Hospital $209.7 Hospital $580.7 Hospital $150M - $400M $327.6 West 24 $128,431 $146,509 $165,006 $180,367 $133,969 $160,826 $169,917 $190,504 $177,086 $207,197 $219,618 $242,970 9 $144,908 $163,360 $181,187 $149,807 $164,402 $181,187 $195,891 $213,807 $233,800 6 $148,259 $157,285 $171,188 $151,994 $160,605 $171,188 $198,680 $208,916 $222, Average: $140,532 $155,718 $172,460 $180,367 $145,257 $161,944 $174,097 $190,504 $190,552 $209,973 $225,140 $242,970 Health Care - Categorical Head of Surgical 2280 Services Head of Surgical 2280 Services Head of Surgical 135 Services Head of Surgical 135 Services Head of Surgical 4400B Services Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $254.0 Hospital $150M - $450M $261.2 Hospital $200M - $400M $ $111,606 $130,730 $153,824 $181,099 $113,696 $135,746 $162,080 $191,653 $153,785 $179,277 $209,768 $244, $111,606 $129,371 $142,747 $164,588 $113,592 $130,625 $154,033 $167,827 $153,681 $173,912 $199,727 $217, $105,188 $123,432 $145,742 $171,596 $107,378 $129,374 $150,120 $176,287 $146,311 $171,592 $196,353 $227, $112,590 $122,650 $136,046 $148,139 $114,686 $129,322 $142,718 $158,252 $154,953 $171,399 $187,207 $204, $113,606 $130,725 $148,570 $164,589 $116,511 $135,394 $150,438 $164,589 $156,960 $178,924 $197,180 $214, Average: $110,919 $127,382 $145,386 $166,002 $113,173 $132,092 $151,878 $171,722 $153,138 $175,021 $198,047 $221,602 Average with 13% geographic differential: $125,339 $143,941 $164,286 $187,582 $127,885 $149,264 $171,622 $194,045 $173,046 $197,774 $223,793 $250, Composite Average with geographic differentials: $132,936 $149,830 $168,373 $183,975 $136,571 $155,604 $172,859 $192,274 $181,799 $203,873 $224,466 $246,690 78

79 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Nursing Services Division Manager (1), Women's & Children's Services Industry Position Match: Head of Nursing Services, Head of Patient Care Services Low Step: $114,138 Assets (Million): $206.0 MEC 2250, 2251 Mid Step: $133,971 Beds: High Step: $155,808 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical Head of 4006 Nursing/CNO/CNE Head of 4006 Nursing/CNO/CNE Head of 4006 Nursing/CNO/CNE Head of Patient Care Services/CNO/CNE 4007 Head of Patient Care Services/CNO/CNE 4007 Head of Patient Care Services/CNO/CNE 4007 $150M - $400M $150M - $400M Northern Northern 109 $166,401 $191,470 $227,701 $257,475 $183,613 $218,182 $259,663 $293,893 $233,565 $272,647 $320,649 $360, $170,111 $189,404 $229,882 $255,473 $188,344 $222,463 $264,936 $295,303 $238,964 $276,556 $326,315 $361, $186,790 $212,175 $238,050 $267,057 $212,850 $241,776 $271,261 $304,315 $266,472 $299,967 $334,110 $372, $157,563 $186,559 $236,571 $282,461 $157,864 $207,002 $253,357 $323,914 $206,226 $260,583 $315,939 $394, $157,864 $190,958 $229,256 $292,683 $160,787 $199,436 $253,357 $327,453 $209,203 $253,808 $314,623 $400, $186,267 $221,676 $237,744 $309,976 $206,677 $245,966 $263,796 $343,942 $260,205 $305,868 $326,590 $419, Average: $170,833 $198,707 $233,201 $277,521 $185,023 $222,471 $261,061 $314,803 $235,772 $278,238 $323,038 $384,757 Regional Health Care - Categorical Head of Nursing Hospital 2250 Services $209.7 Head of Patient Care Hospital 2251 Services $209.7 Top Executive, Hospital 121 Nursing (CNO) $400.1 Top Executive, Hospital 120 Patient Care $468.1 Top Nursing Hospital $150M - $400M 4380B Executive $251.8 Top Patient Care Hospital 4381B Executive $418.5 West 47 $130,103 $135,955 $147,659 $160,303 $144,733 $151,839 $162,602 $179,636 $188,151 $196,310 $209,181 $228,490 West 4 28 $186,086 $216,215 $257,550 $276,263 $198,596 $245,248 $270,372 $360,809 $252,092 $304,167 $336,731 $430, $209,543 $224,972 $269,799 $292,943 $217,570 $252,728 $312,437 $364,145 $275,287 $313,223 $381,001 $436, $174,715 $194,013 $232,815 $267,648 $202,935 $231,985 $266,119 $296,761 $254,384 $286,907 $328,025 $364, $141,204 $231,466 $261,761 $288,957 $141,204 $260,931 $289,878 $315,863 $186,620 $322,595 $356,995 $387, Average: $168,330 $200,524 $233,917 $257,223 $181,007 $228,546 $260,282 $303,443 $231,307 $284,640 $322,387 $369,743 Health Care - Categorical Head of Nursing Hospital 2250 Services $214.4 Head of Nursing Hospital $150M - $400M 2250 Services $255.1 Head of Patient Care Hospital 2251 Services $214.4 Head of Patient Care Hospital $150M - $400M 2251 Services $255.1 Top Executive, Hospital 121 Nursing (CNO) $226.7 Top Executive, Hospital $150M - $450M 121 Nursing (CNO) $260.2 Top Executive, Hospital 120 Patient Care $245.5 Top Executive, Hospital $150M - $450M 120 Patient Care $268.3 Top Nursing Hospital $200M - $400M 4380B Executive $276.5 Top Patient Care Hospital $200M - $400M 4381B Executive $ $111,815 $129,267 $140,866 $156,959 $117,145 $137,209 $153,615 $169,917 $157,271 $180,476 $198,971 $218, $112,965 $130,103 $139,194 $151,525 $119,548 $137,209 $152,152 $168,036 $159,882 $180,627 $197,207 $215, $110,352 $127,699 $162,707 $194,893 $116,413 $135,955 $166,260 $203,148 $156,276 $178,940 $215,547 $258, $109,725 $129,267 $162,289 $178,486 $115,995 $132,088 $162,289 $197,610 $155,746 $175,356 $211,500 $249, $151,163 $184,940 $222,470 $258,540 $159,398 $203,288 $244,988 $289,607 $206,608 $256,577 $305,032 $356, $172,013 $187,650 $206,728 $237,690 $186,086 $212,566 $235,814 $261,876 $237,049 $266,343 $293,024 $324, $161,483 $190,569 $223,095 $258,540 $168,155 $208,552 $248,741 $303,368 $217,222 $262,855 $308,898 $369, $177,225 $196,094 $219,968 $250,409 $186,920 $218,821 $257,706 $280,328 $238,821 $274,118 $317,300 $345, $176,375 $192,249 $211,443 $228,673 $201,690 $237,899 $258,338 $276,685 $253,438 $292,504 $316,397 $337, $192,664 $212,273 $229,806 $245,546 $210,301 $230,740 $267,364 $300,241 $264,981 $288,949 $328,729 $364, Average: $147,578 $168,011 $191,856 $216,126 $158,165 $185,432 $214,726 $245,082 $204,729 $235,674 $269,261 $303,984 Average with 13% geographic differential: $166,763 $189,852 $216,798 $244,222 $178,727 $209,539 $242,641 $276,942 $231,344 $266,312 $304,264 $343, Composite Average with geographic differentials: $168,642 $196,361 $227,972 $259,655 $181,586 $220,185 $254,661 $298,396 $232,808 $276,397 $316,563 $366,001 79

80 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Nursing Services Division Manager (2), Mental Health & Staffing Office Industry Position Match: Nurse Manager Low Step: $114,138 Assets (Million): $206.0 MEC 2260 Mid Step: $133,971 Beds: High Step: $155,808 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical 2260 Nurse Manager Hospital $209.7 West 43 $111,711 $122,474 $128,640 $134,178 $119,548 $128,326 $138,358 $147,763 $159,656 $170,371 $181,513 $191, Manager, Nursing Hospital $ $113,216 $120,305 $121,451 $118,741 $121,451 $131,772 $159,120 $163,106 $173, Nurse Manager Hospital $ $102,440 $118,647 $131,206 $142,481 $102,440 $118,647 $131,206 $142,481 $140,880 $160,003 $174,824 $188, Average: $109,122 $120,475 $127,099 $138,330 $113,576 $122,808 $133,779 $145,122 $153,218 $164,494 $176,657 $190,021 Health Care - Categorical 2260 Nurse Manager Hospital $ $86,944 $96,349 $109,098 $123,206 $87,467 $97,185 $111,188 $128,640 $123,116 $134,528 $150,826 $170, Nurse Manager Hospital $150M - $400M $ $84,854 $94,050 $108,680 $121,847 $86,735 $94,677 $109,098 $129,267 $122,009 $131,606 $148,660 $171, Manager, Nursing Hospital $ $83,087 $92,887 $102,791 $113,449 $83,504 $94,868 $103,103 $116,135 $118,460 $131,587 $141,606 $156, Manager, Nursing Hospital $150M - $450M $ $85,902 $93,408 $102,061 $113,945 $86,528 $95,389 $102,374 $116,760 $121,990 $132,202 $140,744 $157, Nurse Manager Hospital $175M - $300M $ $84,550 $94,218 $103,541 $111,910 $84,550 $94,218 $103,541 $111,910 $119,770 $131,178 $142,178 $152, Average: $85,068 $94,182 $105,234 $116,871 $85,757 $95,267 $105,861 $120,542 $121,069 $132,220 $144,803 $161,579 Average with 13% geographic differential: $96,126 $106,426 $118,914 $132,065 $96,905 $107,652 $119,623 $136,213 $136,808 $149,409 $163,627 $182, Composite Average with geographic differentials: $102,624 $113,451 $123,007 $135,197 $105,241 $115,230 $126,701 $140,667 $145,013 $156,951 $170,142 $186,303 80

81 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Nursing Services Division Manager (3), Acute Medical Services Industry Position Match: Head of Nursing Services Low Step: $114,138 Assets (Million): $206.0 MEC 2250 Mid Step: $133,971 Beds: High Step: $155,808 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical Head of 4006 Nursing/CNO/CNE Head of 4006 Nursing/CNO/CNE Head of 4006 Nursing/CNO/CNE $150M - $400M Northern 109 $166,401 $191,470 $227,701 $257,475 $183,613 $218,182 $259,663 $293,893 $233,565 $272,647 $320,649 $360, $170,111 $189,404 $229,882 $255,473 $188,344 $222,463 $264,936 $295,303 $238,964 $276,556 $326,315 $361, $186,790 $212,175 $238,050 $267,057 $212,850 $241,776 $271,261 $304,315 $266,472 $299,967 $334,110 $372, Average: $174,434 $197,683 $231,878 $260,002 $194,935 $227,474 $265,287 $297,837 $246,334 $283,057 $327,025 $364,638 Regional Health Care - Categorical Head of Nursing 2250 Services Top Executive, 121 Nursing (CNO) Top Nursing 4380B Executive Hospital $209.7 Hospital $400.1 Hospital $150M - $400M $251.8 West 47 $130,103 $135,955 $147,659 $160,303 $144,733 $151,839 $162,602 $179,636 $188,151 $196,310 $209,181 $228, $186,086 $216,215 $257,550 $276,263 $198,596 $245,248 $270,372 $360,809 $252,092 $304,167 $336,731 $430, $174,715 $194,013 $232,815 $267,648 $202,935 $231,985 $266,119 $296,761 $254,384 $286,907 $328,025 $364, Average: $163,635 $182,061 $212,674 $234,738 $182,088 $209,691 $233,031 $279,068 $231,542 $262,461 $291,312 $341,321 Health Care - Categorical Head of Nursing 2250 Services Head of Nursing 2250 Services Top Executive, 121 Nursing (CNO) Top Executive, 121 Nursing (CNO) Top Nursing 4380B Executive Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $226.7 Hospital $150M - $450M $260.2 Hospital $200M - $400M $ $111,815 $129,267 $140,866 $156,959 $117,145 $137,209 $153,615 $169,917 $157,271 $180,476 $198,971 $218, $112,965 $130,103 $139,194 $151,525 $119,548 $137,209 $152,152 $168,036 $159,882 $180,627 $197,207 $215, $151,163 $184,940 $222,470 $258,540 $159,398 $203,288 $244,988 $289,607 $206,608 $256,577 $305,032 $356, $172,013 $187,650 $206,728 $237,690 $186,086 $212,566 $235,814 $261,876 $237,049 $266,343 $293,024 $324, $176,375 $192,249 $211,443 $228,673 $201,690 $237,899 $258,338 $276,685 $253,438 $292,504 $316,397 $337, Average: $144,866 $164,841 $184,140 $206,677 $156,773 $185,634 $208,981 $233,224 $202,849 $235,305 $262,126 $290,426 Average with 13% geographic differential: $163,698 $186,271 $208,078 $233,545 $177,154 $209,766 $236,149 $263,543 $229,220 $265,895 $296,203 $328, Composite Average with geographic differentials: $167,256 $188,671 $217,543 $242,762 $184,726 $215,643 $244,822 $280,150 $235,698 $270,471 $304,847 $344,713 81

82 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Nursing Services Unit Manager, Emergency Department Industry Position Match: Head of Emergency Services Low Step: $114,138 Assets (Million): $206.0 MEC 2270 Mid Step: $133,971 Beds: High Step: $155,808 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Emergency 2270 Services Head of Emergency 130 Services Head of Emergency 4210B Services Hospital $209.7 Hospital $455.1 Hospital $150M - $400M $202.2 West 24 $120,175 $133,760 $151,630 $173,575 $120,175 $140,553 $169,708 $183,920 $161,807 $184,629 $217,001 $235,163 8 $139,070 $156,010 $162,891 $145,429 $161,066 $170,762 $190,461 $209,148 $220,082 5 $103,231 $111,013 $141,826 $110,598 $120,661 $151,060 $149,179 $160,644 $196, Average: $120,825 $133,594 $152,115 $173,575 $125,400 $140,760 $163,843 $183,920 $167,149 $184,807 $211,224 $235,163 Health Care - Categorical Head of Emergency 2270 Services Head of Emergency 2270 Services Head of Emergency 130 Services Head of Emergency 130 Services Head of Emergency 4210B Services Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $248.0 Hospital $150M - $450M $260.2 Hospital $200M - $400M $ $99,171 $114,010 $131,148 $146,927 $102,515 $119,339 $136,059 $159,572 $140,365 $159,861 $179,666 $206, $96,454 $108,994 $122,788 $138,045 $98,439 $115,577 $128,013 $138,045 $135,801 $155,196 $170,114 $182, $94,909 $109,358 $126,247 $138,757 $96,640 $111,548 $130,417 $146,888 $133,723 $151,232 $173,141 $191, $102,165 $109,880 $122,285 $135,525 $102,269 $112,173 $125,309 $141,050 $140,659 $151,951 $167,320 $185, $101,675 $108,730 $128,443 $146,138 $103,958 $113,191 $129,688 $146,138 $142,259 $152,763 $172,807 $192, Average: $98,875 $110,194 $126,182 $141,078 $100,764 $114,366 $129,897 $146,339 $138,561 $154,200 $172,610 $191,733 Average with 13% geographic differential: $111,728 $124,519 $142,586 $159,419 $113,863 $129,233 $146,783 $165,363 $156,574 $174,247 $195,049 $216, Composite Average with geographic differentials: $116,277 $129,057 $147,351 $166,497 $119,632 $134,997 $155,313 $174,641 $161,862 $179,527 $203,136 $225,911 82

83 Market Data Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Clinical Lab Manager Position Match: Head of Laboratory Services Low Step: $108,229 Assets (Million): $206.0 MEC 2745 Mid Step: $127,034 Beds: High Step: $147,732 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Laboratory Hospital West 2745 Services $ $121,220 $133,760 $144,733 $152,779 $131,670 $146,196 $158,945 $170,440 $173,490 $190,272 $204,996 $217, Head of Laboratory Hospital $ $125,309 $133,649 $150,954 $162,005 $133,753 $152,205 $161,171 $173,576 $176,308 $196,262 $208,342 $222, B Head of Laboratory Services Hospital $150M - $400M $ $120,661 $135,809 $148,363 $129,999 $140,996 $158,426 $171,718 $185,442 $205, Average: $122,397 $134,406 $148,016 $157,392 $131,807 $146,466 $159,514 $172,008 $173,839 $190,659 $206,157 $220,338 Health Care - Categorical Head of Laboratory Hospital 2745 Services $ $96,140 $108,680 $128,117 $150,689 $98,857 $114,741 $133,133 $160,721 $136,162 $154,303 $176,194 $207,845 Head of Laboratory Hospital $150M - $400M 2745 Services $ $97,917 $108,680 $122,161 $133,760 $101,679 $114,741 $127,386 $143,374 $139,303 $154,303 $169,374 $187, Head of Laboratory Hospital $ $92,261 $106,961 $123,953 $139,174 $92,783 $109,671 $129,062 $151,267 $129,390 $148,924 $171,373 $196, Head of Laboratory Hospital $150M - $450M $ $99,715 $112,642 $119,679 $133,023 $101,070 $113,216 $124,475 $140,738 $139,019 $153,491 $166,017 $184, B Head of Laboratory Services Hospital $200M - $400M $ $100,119 $111,843 $123,774 $134,484 $103,750 $120,246 $137,988 $153,914 $141,771 $160,378 $180,267 $198, Average: $97,230 $109,761 $123,537 $138,226 $99,628 $114,523 $130,408 $150,003 $137,129 $154,280 $172,645 $194,883 Average with 13% geographic differential: $109,870 $124,030 $139,596 $156,195 $112,579 $129,411 $147,361 $169,503 $154,956 $174,336 $195,089 $220, Composite Average with geographic differentials: $116,133 $129,218 $143,806 $156,794 $122,193 $137,938 $153,438 $170,755 $164,397 $182,497 $200,623 $220,278 83

84 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th NMC Human Resources Administrator Position Match: Head of Human Resources & Personnel Low Step: $102,018 Assets (Million): $ Mid Step: $119,741 Beds: High Step: $139,250 FTEs: California Health Care - Categorical Chief Human Resources Officer/Head of 4005 Human Resources Chief Human Resources Officer/Head of 4005 Human Resources Chief Human Resources Officer/Head of 4005 Human Resources $150M - $400M Northern 118 $129,639 $161,758 $204,068 $227,413 $138,897 $177,078 $217,156 $259,259 $182,232 $226,194 $273,888 $320, $132,427 $151,426 $175,339 $207,838 $138,897 $171,435 $209,637 $238,971 $182,734 $218,692 $261,199 $296, $166,239 $181,125 $206,755 $231,011 $181,983 $198,280 $226,337 $252,891 $231,906 $250,882 $283,553 $314, Average: $142,768 $164,769 $195,387 $222,087 $153,259 $182,264 $217,710 $250,374 $198,957 $231,923 $272,880 $310,349 Regional Health Care - Categorical Head of Human 2300 Resources 2nd Level Human 501 Resources Human Resources 4261B Director Hospital Hospital Hospital $209.7 $450.8 $314.0 West 31 $104,500 $133,969 $161,557 $175,769 $116,309 $143,583 $168,454 $191,758 $155,119 $187,697 $217,534 $243,396 5 $127,706 $159,503 $166,487 $127,706 $181,499 $183,897 $170,693 $230,210 $233, $110,079 $136,950 $155,106 $171,405 $121,595 $136,950 $165,689 $191,488 $161,409 $181,601 $213,608 $242, Average: $114,095 $143,474 $161,050 $173,587 $121,870 $154,011 $172,680 $191,623 $162,407 $199,836 $221,669 $242,868 Health Care - Categorical Head of Human 2300 Resources Head of Human 2300 Resources 2nd Level Human 501 Resources 2nd Level Human 501 Resources Human Resources 4261B Director Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $240.0 Hospital $150M - $450M $267.5 Hospital $200M - $400M $ $97,812 $115,264 $141,493 $164,692 $101,783 $122,579 $150,376 $182,875 $139,389 $163,326 $195,844 $232, $96,245 $114,637 $143,792 $164,588 $97,185 $120,593 $152,570 $184,861 $134,509 $161,228 $198,453 $234, $92,157 $110,505 $128,957 $163,777 $93,825 $112,903 $135,838 $168,051 $130,413 $152,794 $179,050 $217, $92,157 $109,723 $121,868 $137,923 $96,953 $111,704 $129,166 $147,305 $133,541 $151,454 $171,102 $192, $93,375 $108,938 $128,961 $146,937 $93,998 $109,871 $136,016 $159,487 $130,805 $149,480 $179,229 $205, Average: $94,349 $111,813 $133,014 $155,583 $96,749 $115,530 $140,793 $168,516 $133,731 $155,656 $184,736 $216,521 Average with 13% geographic differential: $106,614 $126,349 $150,306 $175,809 $109,326 $130,549 $159,096 $190,423 $151,117 $175,892 $208,751 $244, Composite Average with geographic differentials: $121,159 $144,864 $168,915 $190,494 $128,152 $155,608 $183,162 $210,806 $170,827 $202,550 $234,433 $265,962 84

85 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Quality/Compliance Administrator Position Match: Head of Quality Assurance Low Step: $117,799 Assets (Million): $206.0 MEC 2835 Mid Step: $138,266 Beds: High Step: $136,128 FTEs: California Health Care - Categorical Chief of Quality 4017 Improvement Chief of Quality 4017 Improvement Chief of Quality 4017 Improvement $150M - $400M Northern 24 $119,702 $140,574 $187,435 $285,788 $130,669 $143,415 $216,229 $313,344 $172,216 $188,719 $269,967 $384,785 9 $120,894 $165,271 $202,965 $126,307 $173,441 $202,965 $168,068 $223,190 $259, Average: $120,298 $152,922 $195,200 $285,788 $128,488 $158,428 $209,597 $313,344 $170,142 $205,954 $264,733 $384,785 Regional Health Care - Categorical Head of Quality 2835 Assurance Head of Quality Improvement (Non- 755 M.D.) Head of Quality Assurance (Non- 4461B MD) Hospital $209.7 Hospital $477.0 Hospital $150M - $400M $254.2 West 8 $122,474 $129,789 $135,223 $135,119 $143,897 $150,689 $177,164 $187,259 $195,029 8 $157,939 $171,752 $182,855 $159,398 $185,409 $191,976 $207,827 $236,324 $244, $119,728 $139,544 $160,813 $179,905 $133,008 $152,305 $168,490 $183,019 $174,558 $197,423 $217,436 $235, Average: $133,380 $147,028 $159,630 $179,905 $142,508 $160,537 $170,385 $183,019 $186,516 $207,002 $219,119 $235,402 Health Care - Categorical Head of Quality 2835 Assurance Head of Quality 2835 Assurance Head of Quality Improvement (Non- 755 M.D.) Head of Quality Improvement (Non- 755 M.D.) Head of Quality Assurance (Non- 4461B MD) Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $245.0 Hospital $150M - $450M $252.1 Hospital $200M - $400M 60 $97,708 $110,770 $129,894 $136,164 $99,693 $114,741 $134,178 $151,003 $137,280 $154,680 $177,559 $195, $98,648 $109,516 $115,682 $131,670 $99,798 $110,561 $123,833 $143,479 $137,554 $150,274 $164,655 $187, $96,014 $110,609 $126,664 $170,762 $98,621 $113,007 $133,325 $181,291 $135,903 $152,917 $176,125 $232, $98,621 $110,609 $125,830 $151,058 $102,165 $112,382 $133,649 $165,184 $139,917 $152,291 $176,298 $212,375 $ $101,053 $116,408 $141,515 $164,054 $108,211 $124,604 $156,040 $184,260 $146,401 $165,557 $201,513 $233, Average: $98,409 $111,582 $127,917 $150,741 $101,697 $115,059 $136,205 $165,043 $139,411 $155,144 $179,230 $212,177 Average with 13% geographic differential: $111,202 $126,088 $144,546 $170,338 $114,918 $130,017 $153,911 $186,499 $157,534 $175,312 $202,530 $239, Composite Average with geographic differentials: $121,627 $142,013 $166,459 $212,011 $128,638 $149,660 $177,964 $227,621 $171,398 $196,089 $228,794 $286,649 85

86 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Director of Cardiopulmonary Services Position Match: Head of Cardiopulmonary, Head of Perfusion Low Step: $99,543 Assets (Million): $ Mid Step: $116,838 Beds: High Step: $135,876 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Cardiology Hospital 2715 Services $209.7 Head of Hospital Cardiovascular 140 Services $555.9 Head of Hospital $150M - $400M Cardiology/Cardiopul 4150B monary $271.9 West 19 $125,296 $138,045 $173,679 $179,322 $141,493 $155,183 $183,084 $192,176 $184,046 $200,031 $234,346 $244,453 8 $133,753 $136,515 $162,839 $136,568 $148,348 $177,694 $180,643 $192,921 $227,005 9 $101,468 $121,595 $137,573 $108,419 $124,500 $157,181 $146,683 $166,387 $201, Average: $120,172 $132,052 $158,030 $179,322 $128,826 $142,677 $172,653 $192,176 $170,457 $186,446 $221,099 $244,453 Health Care - Categorical Head of Cardiology Hospital 2715 Services $214.4 Head of Cardiology Hospital $150M - $400M 2715 Services $255.1 Head of Hospital Cardiovascular 140 Services $359.0 Head of Hospital $150M - $450M Cardiovascular 140 Services $267.0 Head of Hospital $200M - $400M Cardiology/Cardiopul 4150B monary $ $101,888 $121,847 $139,194 $160,199 $105,859 $126,759 $147,032 $172,948 $144,198 $168,691 $192,086 $221, $99,066 $117,563 $135,223 $145,778 $102,097 $121,952 $141,807 $154,451 $139,928 $163,113 $186,147 $200, $101,540 $121,347 $136,359 $162,839 $102,686 $123,641 $141,363 $162,839 $140,963 $165,483 $185,908 $212, $97,682 $114,467 $130,104 $141,363 $99,559 $118,949 $131,876 $144,908 $137,142 $159,553 $175,295 $190, $99,393 $113,606 $133,215 $150,818 $120,039 $137,780 $175,026 $208,462 $157,929 $178,229 $219,005 $255, Average: $99,914 $117,766 $134,819 $152,199 $106,048 $125,816 $147,421 $168,721 $144,032 $167,014 $191,688 $216,117 Average with 13% geographic differential: $112,902 $133,075 $152,345 $171,985 $119,834 $142,172 $166,585 $190,655 $162,756 $188,726 $216,608 $244, Composite Average with geographic differentials: $116,537 $132,564 $155,188 $175,653 $124,330 $142,424 $169,619 $191,415 $166,607 $187,586 $218,853 $244,333 86

87 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Hospital Controller Position Match: Controller Low Step: $98,596 Assets (Million): $206.0 MEC 2400 Mid Step: $115,727 Beds: High Step: $134,592 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical 2400 Controller Hospital $209.7 West 39 $119,862 $135,850 $162,602 $192,071 $133,760 $155,183 $188,623 $211,926 $175,335 $199,636 $237,891 $266, Controller Hospital $ $159,815 $182,594 $217,883 $242,798 $170,136 $189,370 $236,126 $242,798 $218,903 $242,237 $295,345 $306, B Controller Hospital $150M - $400M $ $125,849 $136,743 $161,331 $183,405 $137,054 $153,343 $184,571 $212,605 $179,707 $197,956 $233,611 $265, Average: $135,175 $151,729 $180,605 $206,091 $146,983 $165,965 $203,107 $222,443 $191,315 $213,276 $255,616 $279,540 Health Care - Categorical 2400 Controller Hospital $ $104,187 $126,236 $156,750 $184,234 $108,889 $133,029 $169,395 $200,745 $147,643 $175,751 $217,610 $253, Controller Hospital $150M - $400M $ $108,576 $129,371 $151,107 $175,560 $115,159 $133,760 $158,318 $183,398 $154,703 $177,047 $205,517 $234, Controller Hospital $ $101,957 $132,085 $162,422 $197,762 $101,957 $133,753 $173,264 $220,697 $140,309 $177,528 $222,499 $276, Controller Hospital $150M - $450M $ $104,198 $120,930 $143,813 $177,538 $111,339 $123,888 $146,523 $205,268 $150,095 $165,655 $192,410 $257, B Controller Hospital $200M - $400M $ $112,361 $132,074 $155,625 $176,767 $119,416 $139,129 $160,398 $179,490 $159,641 $182,902 $208,410 $231, Average: $106,256 $128,139 $153,943 $182,372 $111,352 $132,712 $161,579 $197,920 $150,478 $175,777 $209,289 $250,747 Average with 13% geographic differential: $120,069 $144,797 $173,956 $206,080 $125,828 $149,964 $182,585 $223,649 $170,040 $198,628 $236,497 $283, Composite Average with geographic differentials: $127,622 $148,263 $177,281 $206,086 $136,405 $157,965 $192,846 $223,046 $180,677 $205,952 $246,056 $281,442 87

88 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Survey Position Title Industry Manager of Diagnostic Imaging Services Category Typical Scope Geographic Region n = Position Match: Head of Medical Imaging/Diagnostic Radiology Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: Assets (Million): $206.0 MEC 2700 Mid Step: Beds: High Step: FTEs: California Health Care - Categorical Northern $150M - $400M Average: Regional Health Care - Categorical Head of Medical Imaging/Diagnostic Hospital Radiology $209.7 West 51 $123,624 $137,000 $146,300 $161,244 $135,537 $147,763 $163,020 $179,322 $177,789 $192,423 $209,354 $228,346 Head of Radiology/Imaging Services Hospital $ $132,189 $138,027 $156,375 $163,673 $132,189 $138,027 $156,375 $178,059 $175,983 $182,872 $204,523 $227,520 Head of Radiology Hospital $150M - $400M $ $127,613 $131,451 $145,043 $157,243 $134,564 $145,769 $161,850 $176,286 $177,534 $189,430 $207,958 $224, Average: $127,808 $135,493 $149,239 $160,720 $134,096 $143,853 $160,415 $177,889 $177,102 $188,242 $207,278 $226,819 Health Care - Categorical Head of Medical Imaging/Diagnostic Hospital Radiology $ $104,605 $119,757 $136,895 $151,839 $107,008 $125,505 $144,419 $162,707 $145,837 $167,061 $189,060 $210,037 Head of Medical Imaging/Diagnostic Hospital Radiology $150M - $400M $ $107,113 $119,653 $135,746 $144,315 $111,084 $124,669 $141,180 $155,392 $150,364 $166,206 $185,614 $201,368 Head of Radiology/Imaging Services Hospital $ $97,474 $114,779 $129,687 $143,448 $98,308 $116,916 $135,890 $150,746 $135,853 $157,577 $179,234 $196,566 Head of Radiology/Imaging Services Hospital $150M - $450M $ $109,463 $118,324 $128,540 $137,402 $110,297 $123,171 $135,890 $144,334 $150,000 $164,470 $179,027 $189,066 Head of Radiology Hospital $200M - $400M $ $110,701 $120,973 $131,970 $141,842 $111,843 $129,584 $142,656 $154,391 $151,769 $171,359 $186,411 $199, Average: $105,871 $118,697 $132,568 $143,769 $107,708 $123,969 $140,007 $153,514 $146,764 $165,334 $183,869 $199,392 Average with 13% geographic differential: $119,634 $134,128 $149,801 $162,459 $121,710 $140,085 $158,208 $173,471 $165,844 $186,828 $207,772 $225, Composite Average with geographic differentials: $123,721 $134,810 $149,520 $161,589 $127,903 $141,969 $159,311 $175,680 $171,473 $187,535 $207,525 $226,066 88

89 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Patient Financial Services Director Position Match: Head of Patient Accounts Low Step: $94,821 Assets (Million): $206.0 MEC 2440 Mid Step: $111,297 Beds: High Step: $129,432 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Patient 2440 Accounts Head of Patient 461 Accounts Head of Patient 4111B Accounting Hospital Hospital Hospital $209.7 $614.7 $543.9 West 10 $87,885 $104,918 $130,521 $167,514 $93,423 $104,918 $144,524 $167,932 $129,242 $143,803 $188,017 $218,084 5 $93,825 $96,327 $99,559 $93,825 $96,327 $99,559 $130,714 $133,666 $137,479 6 $120,558 $142,241 $210,509 $120,558 $148,674 $226,383 $162,258 $194,277 $284, Average: $100,756 $114,495 $146,863 $167,514 $102,602 $116,640 $156,822 $167,932 $140,738 $157,249 $203,257 $218,084 Health Care - Categorical Head of Patient 2440 Accounts Head of Patient 2440 Accounts Head of Patient 461 Accounts Head of Patient 461 Accounts Head of Patient 4111B Accounting Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $348.1 Hospital $150M - $450M $282.2 Hospital $200M - $400M $ $85,690 $104,605 $132,506 $157,273 $88,094 $107,008 $135,641 $168,663 $123,518 $145,837 $179,492 $216, $80,465 $95,618 $117,145 $130,312 $80,465 $95,618 $120,698 $134,283 $114,949 $132,829 $161,784 $177, $84,130 $107,065 $126,143 $145,950 $84,130 $111,548 $129,687 $150,224 $119,273 $150,819 $172,393 $196, $83,400 $109,463 $123,015 $132,502 $83,400 $111,756 $126,560 $136,880 $118,412 $151,459 $168,702 $180, $95,969 $114,748 $130,103 $143,887 $124,708 $136,431 $167,453 $195,300 $161,982 $177,086 $210,871 $241, Average: $85,931 $106,299 $125,782 $141,984 $92,159 $112,472 $136,008 $157,070 $127,627 $151,606 $178,648 $202,627 Average with 13% geographic differential: $97,102 $120,118 $142,134 $160,442 $104,140 $127,093 $153,688 $177,489 $144,218 $171,315 $201,873 $228, Composite Average with geographic differentials: $98,929 $117,307 $144,498 $163,978 $103,371 $121,866 $155,255 $172,710 $142,478 $164,282 $202,565 $223,526 89

90 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Utilization Management Coordinator Position Match: Head of Utilization Review Low Step: $86,595 Assets (Million): $ Mid Step: $107,214 Beds: High Step: $118,200 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Hospital West 170 Head of Case Mgmt/Utilization Review Hospital $ $119,888 $128,071 $151,163 $169,980 $119,888 $132,658 $155,645 $191,142 $161,467 $175,711 $202,855 $241, B Head of Utilization Review Hospital Average: $119,888 $128,071 $151,163 $169,980 $119,888 $132,658 $155,645 $191,142 $161,467 $175,711 $202,855 $241,739 Health Care - Categorical Hospital Hospital $150M - $400M 170 Head of Case Mgmt/Utilization Review Hospital $ $91,427 $102,478 $118,324 $140,738 $93,825 $107,169 $121,973 $148,869 $130,282 $145,615 $163,271 $194, Head of Case Mgmt/Utilization Review Hospital $150M - $450M $ $91,219 $101,123 $110,609 $123,641 $94,138 $105,084 $114,571 $124,787 $130,557 $143,286 $154,480 $167, B Head of Utilization Review Hospital $200M - $400M $ B Head of Utilization Review Hospital $ $97,733 $104,580 $115,993 $126,238 $101,468 $107,278 $119,831 $131,101 $139,059 $146,102 $160,710 $173, Average: $93,460 $102,727 $114,975 $130,205 $96,477 $106,510 $118,792 $134,919 $133,299 $145,001 $159,487 $178,356 Average with 13% geographic differential: $105,609 $116,081 $129,922 $147,132 $109,019 $120,356 $134,234 $152,458 $150,628 $163,851 $180,220 $201, Composite Average with geographic differentials: $112,748 $122,076 $140,542 $158,556 $114,453 $126,507 $144,940 $171,800 $156,048 $169,781 $191,537 $221,640 90

91 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Hospital Director of Nursing Education Industry Category Typical Scope Position Match: Head of Nursing Education Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $83,535 Assets (Million): $206.0 MEC 2295 Mid Step: $98,049 Beds: High Step: $114,024 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Nursing 2295 Education Head of Nursing 155 Education Head of Nursing 4191B Education Hospital Hospital Hospital $209.7 $597.7 $334.3 West 23 $115,995 $129,267 $146,300 $153,824 $121,743 $141,702 $155,601 $167,409 $162,622 $184,970 $201,935 $215,097 6 $126,664 $135,421 $143,657 $133,232 $142,301 $160,024 $176,031 $186,677 $205, $119,313 $128,028 $150,334 $170,358 $129,584 $146,288 $157,804 $170,358 $171,060 $189,332 $204,864 $221, Average: $120,657 $130,905 $146,763 $162,091 $128,186 $143,430 $157,809 $168,884 $169,904 $186,993 $204,227 $218,060 Health Care - Categorical Head of Nursing 2295 Education Head of Nursing 2295 Education Head of Nursing 155 Education Head of Nursing 155 Education Head of Nursing 4191B Education Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $385.8 Hospital $150M - $450M $336.1 Hospital $200M - $400M $ $95,095 $109,830 $131,461 $151,421 $98,648 $114,741 $137,836 $157,586 $135,765 $154,510 $181,498 $204, $93,423 $105,336 $121,534 $145,673 $94,886 $114,637 $127,490 $152,048 $131,702 $153,597 $169,366 $198, $88,143 $103,051 $118,542 $136,568 $88,143 $106,074 $121,712 $144,438 $124,009 $144,624 $163,049 $189, $90,906 $100,184 $113,216 $120,513 $92,991 $101,331 $117,073 $122,859 $129,354 $139,364 $157,452 $164, $96,073 $105,721 $119,105 $131,120 $99,496 $112,361 $125,953 $138,153 $136,789 $151,391 $167,391 $181, Average: $92,728 $104,824 $120,771 $137,059 $94,833 $109,829 $126,013 $143,017 $131,524 $148,697 $167,751 $187,687 Average with 13% geographic differential: $104,783 $118,452 $136,472 $154,876 $107,161 $124,107 $142,394 $161,609 $148,622 $168,028 $189,559 $212, Composite Average with geographic differentials: $112,720 $124,678 $141,618 $158,484 $117,674 $133,768 $150,102 $165,246 $159,263 $177,510 $196,893 $215,073 91

92 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Hospital Director of Engineering & Safety Industry Category Typical Scope Geographic Region n = Position Match: Facilities and Engineering Executive Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $104,339 Assets (Million): $206.0 MEC 2070 Mid Step: $112,680 Beds: High Step: $122,468 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Facilities and Engineering Hospital 2070 Executive Head of Facilities Hospital Planning/Constructio 305 n Top Facilities Hospital Management 4220B Executive $209.7 $543.0 $382.7 West 9 $137,522 $216,315 $242,649 $284,763 $148,077 $222,063 $281,419 $348,612 $192,830 $280,999 $345,095 $419,869 6 $152,309 $166,904 $248,324 $152,309 $173,785 $296,174 $199,725 $223,828 $360,872 5 $120,246 $136,328 $245,680 $120,246 $136,328 $284,171 $161,891 $180,866 $348, Average: $136,693 $173,182 $245,551 $284,763 $140,211 $177,392 $287,255 $348,612 $184,815 $228,564 $351,454 $419,869 Health Care - Categorical Facilities and Hospital Engineering 2070 Executive $214.4 Facilities and Hospital $150M - $400M Engineering 2070 Executive $255.1 Head of Facilities Hospital Planning/Constructio 305 n $480.4 Head of Facilities Hospital $150M - $450M Planning/Constructio 305 n $326.8 Top Facilities Hospital $200M - $400M Management 4220B Executive $ $135,850 $187,578 $224,989 $282,359 $141,075 $198,759 $248,815 $321,129 $185,528 $252,523 $309,312 $391, $133,656 $154,660 $191,131 $248,397 $134,074 $168,141 $220,913 $279,747 $178,131 $215,979 $275,316 $344, $106,408 $126,560 $163,673 $208,917 $110,922 $132,981 $170,762 $238,628 $150,075 $175,762 $220,223 $296, $97,891 $117,750 $145,846 $215,381 $99,194 $120,878 $162,630 $238,628 $136,814 $162,073 $208,882 $297, $99,289 $107,693 $120,765 $132,500 $102,298 $111,635 $128,546 $143,728 $140,169 $151,020 $170,284 $187, Average: $114,619 $138,848 $169,280 $217,511 $117,512 $146,479 $186,333 $244,372 $158,144 $191,471 $236,804 $303,524 Average with 13% geographic differential: $129,519 $156,898 $191,287 $245,787 $132,789 $165,521 $210,556 $276,140 $178,702 $216,363 $267,588 $342, Composite Average with geographic differentials: $133,106 $165,040 $218,419 $265,275 $136,500 $171,456 $248,906 $312,376 $181,759 $222,464 $309,521 $381,426 92

93 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Director of Health Information Management Industry Category Typical Scope Geographic Region n = Position Match: Head of Health Information Management Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $81,754 Assets (Million): $206.0 MEC 2830 Mid Step: $95,959 Beds: High Step: $111,600 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Health Information 2830 Management Head of Health Information 825 Management Head of Health Information 4113B Management Hospital $209.7 Hospital $580.7 Hospital $150M - $400M $229.8 West 51 $104,187 $116,936 $130,730 $141,911 $115,577 $130,730 $143,688 $163,438 $154,331 $171,778 $187,219 $208,982 9 $110,505 $123,953 $134,170 $118,845 $133,232 $151,475 $158,736 $175,543 $195, $109,664 $127,301 $134,771 $141,477 $123,151 $136,224 $145,769 $154,337 $162,891 $179,138 $190,028 $199, Average: $108,118 $122,730 $133,224 $141,694 $119,191 $133,395 $146,977 $158,888 $158,652 $175,486 $190,957 $204,393 Health Care - Categorical Head of Health Information 2830 Management Head of Health Information 2830 Management Head of Health Information 825 Management Head of Health Information 825 Management Head of Health Information 4113B Management Hospital $214.4 Hospital $150M - $400M Hospital $255.1 $251.8 Hospital $150M - $450M $268.3 Hospital $200M - $400M 318 $87,885 $103,351 $119,966 $139,717 $89,766 $109,307 $128,535 $150,167 $125,585 $147,910 $170,129 $195, $89,034 $104,082 $119,130 $130,939 $90,497 $108,053 $129,998 $143,792 $126,523 $146,788 $171,441 $187, $83,817 $97,317 $115,248 $133,179 $84,026 $97,578 $117,542 $138,861 $119,113 $135,095 $158,287 $182, $86,632 $97,370 $110,609 $121,556 $88,091 $98,725 $112,799 $127,289 $123,685 $136,251 $152,708 $169,169 $ $93,583 $109,041 $121,906 $133,455 $96,073 $112,984 $128,546 $142,517 $132,917 $152,611 $170,489 $186, Average: $88,190 $102,232 $117,372 $131,769 $89,690 $105,329 $123,484 $140,525 $125,565 $143,731 $164,611 $184,244 Average with 13% geographic differential: $99,655 $115,522 $132,630 $148,899 $101,350 $119,022 $139,537 $158,793 $141,888 $162,416 $186,010 $208, Composite Average with geographic differentials: $103,887 $119,126 $132,927 $145,297 $110,271 $126,209 $143,257 $158,841 $150,270 $168,951 $188,484 $206,294 93

94 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Medical Staff Coordinator Position Match: Practice Administrator Low Step: $79,013 Assets (Million): $206.0 MEC 2900 Mid Step: $92,741 Beds: High Step: $107,856 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Practice 2900 Administrator Manager, Clinic 881 Practice Physician Practice 4900B Administrator Hospital Hospital Hospital $209.7 West Average: Health Care - Categorical Practice 2900 Administrator Practice 2900 Administrator Manager, Clinic 881 Practice Manager, Clinic 881 Practice Physician Practice 4900B Administrator Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $286.0 Hospital $150M - $450M $268.3 Hospital $200M - $400M $ $77,853 $87,258 $104,605 $137,209 $78,375 $88,825 $110,248 $137,209 $112,388 $124,531 $149,076 $181, $79,211 $86,213 $109,516 $152,570 $80,152 $87,153 $109,516 $152,570 $114,409 $122,671 $149,229 $200, $60,465 $69,743 $82,775 $97,995 $62,550 $69,743 $82,775 $97,995 $93,434 $102,297 $117,674 $135, $60,465 $63,593 $74,643 $90,519 $62,550 $69,743 $74,643 $91,323 $93,434 $101,190 $108,079 $127,616 8 $75,323 $87,565 $115,889 $75,323 $87,565 $115,889 $108,881 $123,327 $156, Average: $70,663 $78,874 $97,485 $119,573 $71,790 $80,606 $98,614 $119,774 $104,509 $114,803 $136,161 $161,297 Average with 13% geographic differential: $79,849 $89,128 $110,158 $135,118 $81,122 $91,085 $111,434 $135,345 $118,095 $129,728 $153,862 $182, Composite Average with geographic differentials: $79,849 $89,128 $110,158 $135,118 $81,122 $91,085 $111,434 $135,345 $118,095 $129,728 $153,862 $182,266 94

95 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Managed Care Operations Manager Survey Position Title Industry Category Typical Scope Geographic Region n = Position Match: 2nd Level Managed Care Contracting Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $73,389 Assets (Million): $ Mid Step: $86,139 Beds: High Step: $100,176 FTEs: California Health Care - Categorical Head of Managed 4009 Care Head of Managed 4009 Care Head of Managed 4009 Care $150M - $400M 19 $139,724 $211,658 $227,702 $258,750 $144,420 $211,658 $262,950 $284,754 $189,570 $269,756 $323,936 $351,329 Northern 5 $164,108 $222,603 $244,668 $164,108 $227,778 $276,967 $213,647 $287,846 $341,008 7 $136,851 $146,929 $211,658 $136,851 $146,929 $211,658 $181,484 $193,376 $269, Average: $146,894 $193,730 $228,009 $258,750 $148,460 $195,455 $250,525 $284,754 $194,901 $250,326 $311,567 $351,329 Discounted by 15%: $124,860 $164,670 $193,808 $219,938 $126,191 $166,136 $212,946 $242,041 $165,665 $212,777 $264,832 $298,630 Regional Health Care - Categorical Head of Managed 2420 Care Head of Managed 800 Care Head of Managed 4330B Care Hospital Hospital Hospital $209.7 $531.0 $603.4 West 7 $144,001 $154,660 $195,415 $144,001 $163,856 $224,675 $189,921 $211,695 $279,850 5 $154,290 $194,531 $223,721 $154,290 $223,721 $276,158 $202,062 $278,736 $336,428 7 $142,968 $168,594 $272,448 $142,968 $193,598 $272,448 $188,702 $243,944 $341, Average: $147,086 $172,595 $230,528 $147,086 $193,725 $257,760 $193,562 $244,792 $319,255 Discounted by 15%: $125,023 $146,706 $195,949 $125,023 $164,666 $219,096 $164,527 $208,073 $271,367 Health Care - Categorical Head of Managed 2420 Care Head of Managed 2420 Care Head of Managed 800 Care Head of Managed 800 Care Head of Managed 4330B Care Hospital $ $114,219 $130,625 $155,287 $193,012 $114,219 $131,148 $162,707 $205,447 $154,778 $174,660 $210,658 $260,189 Hospital $150M - $400M $ $112,547 $121,220 $142,329 $171,589 $112,756 $123,206 $142,329 $172,216 $153,014 $165,025 $187,948 $223,102 Hospital $ $114,675 $137,089 $185,461 $223,721 $116,552 $140,529 $198,909 $240,088 $157,193 $185,205 $252,292 $300,357 Hospital $150M - $450M $ $104,823 $125,726 $154,290 $187,025 $106,648 $129,114 $159,033 $202,037 $145,516 $171,744 $206,806 $255,701 Hospital $200M - $400M $ $117,238 $132,178 $187,995 $238,102 $117,238 $136,639 $188,825 $238,102 $158,340 $180,431 $242,664 $300, Average: $112,700 $129,367 $165,072 $202,690 $113,482 $132,127 $170,361 $211,578 $153,768 $175,413 $220,074 $268,062 Discounted by 15%: $95,795 $109,962 $140,311 $172,286 $96,460 $112,308 $144,806 $179,841 $130,703 $149,101 $187,063 $227,853 Average with 13% geographic differential: $108,249 $124,257 $158,552 $194,683 $109,000 $126,908 $163,631 $203,221 $147,694 $168,484 $211,381 $257, Composite Average with geographic differentials: $119,377 $145,211 $182,769 $207,310 $120,071 $152,570 $198,558 $222,631 $159,296 $196,445 $249,193 $278,052 95

96 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Hospital Director of Food Services Survey Position Title Industry Category Typical Scope Geographic Region n = Position Match: Head of Food and Nutrition Services Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $70,329 Assets (Million): $206.0 MEC 2880 Mid Step: $82,549 Beds: High Step: $96,000 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Food and 2880 Nutrition Services Head of Nutrition 231 Services Head of Food & 4180B Nutrition Services Hospital $209.7 Hospital $594.0 Hospital $150M - $400M $269.4 West 31 $94,886 $102,828 $112,860 $127,595 $102,410 $109,307 $124,773 $136,059 $139,489 $147,816 $165,088 $179,026 6 $103,729 $116,135 $148,035 $104,042 $121,347 $148,035 $142,713 $162,251 $194, $100,326 $106,655 $118,794 $129,691 $106,551 $114,748 $123,981 $132,270 $144,610 $153,945 $165,364 $175, Average: $99,647 $108,539 $126,563 $104,334 $115,134 $132,263 $142,271 $154,671 $175,044 Health Care - Categorical Head of Food and 2880 Nutrition Services Head of Food and 2880 Nutrition Services Head of Nutrition 231 Services Head of Nutrition 231 Services Head of Food & 4180B Nutrition Services Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $211.1 Hospital $150M - $450M $274.0 Hospital $200M - $400M $ $83,600 $95,095 $108,994 $128,326 $84,123 $98,962 $113,174 $135,014 $119,171 $136,079 $152,792 $178, $86,004 $94,050 $104,396 $113,383 $86,422 $96,663 $108,262 $119,026 $121,902 $133,592 $147,053 $159, $75,686 $87,309 $102,165 $117,281 $75,686 $88,196 $104,250 $125,204 $109,309 $123,911 $142,640 $166, $83,400 $93,095 $102,165 $104,712 $83,921 $94,138 $104,712 $115,405 $118,933 $130,895 $143,102 $154, $90,574 $98,355 $106,966 $114,697 $92,649 $101,883 $115,059 $126,887 $128,952 $139,586 $154,313 $167, Average: $83,853 $93,581 $104,937 $115,680 $84,560 $95,968 $109,091 $124,307 $119,653 $132,813 $147,980 $165,129 Average with 13% geographic differential: $94,753 $105,746 $118,579 $130,718 $95,553 $108,444 $123,273 $140,467 $135,208 $150,078 $167,217 $186, Composite Average with geographic differentials: $97,200 $107,143 $122,571 $130,718 $99,943 $111,789 $127,768 $140,467 $138,740 $152,375 $171,131 $186,596 96

97 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Medical Librarian Position Match: Head of Medical Library Low Step: $55,465 Assets (Million): $206.0 MEC 2810 Mid Step: $65,104 Beds: High Step: $75,708 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Medical 2810 Library Head of Medical 415 Library Head of Library 4290B Services Hospital Hospital Hospital West Average: Health Care - Categorical Head of Medical 2810 Library Head of Medical 2810 Library Head of Medical 415 Library Head of Medical 415 Library Head of Library 4290B Services Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $472.0 Hospital $150M - $450M $322.4 Hospital $200M - $400M $ $62,700 $71,060 $83,914 $94,155 $62,700 $72,105 $86,526 $99,693 $93,986 $104,896 $121,630 $136, $62,178 $66,985 $72,523 $86,735 $62,178 $66,985 $72,523 $87,467 $93,369 $99,042 $105,577 $123, $60,986 $66,303 $86,423 $93,095 $61,091 $67,763 $88,706 $96,223 $92,068 $99,697 $124,263 $132, $59,058 $64,166 $71,151 $87,565 $59,058 $64,166 $71,151 $89,546 $89,688 $95,716 $103,958 $125, $74,285 $83,311 $105,410 $125,248 $75,841 $84,971 $106,033 $125,248 $109,213 $119,967 $145,006 $167, Average: $63,841 $70,365 $83,884 $97,360 $64,173 $71,198 $84,988 $99,635 $95,665 $103,864 $120,087 $137,160 Average with 13% geographic differential: $72,141 $79,512 $94,789 $110,016 $72,516 $80,454 $96,036 $112,588 $108,101 $117,366 $135,698 $154, Composite Average with geographic differentials: $72,141 $79,512 $94,789 $110,016 $72,516 $80,454 $96,036 $112,588 $108,101 $117,366 $135,698 $154,991 97

98 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Hospital Risk Assessment & Compliance Officer Industry Position Match: Head of Risk Management, Head of Compliance Low Step: $101,741 Assets (Million): $206.0 MEC 2455, 2495 Mid Step: $119,419 Beds: High Step: $138,882 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical Head of Risk 4019 Management Head of Risk 4019 Management Head of Risk 4019 Management Head of Compliance/Corpora te Compliance Officer Head of Compliance/Corpora te Compliance Officer Head of Patient Care Services/CNO/CNE $150M - $400M $150M - $400M Northern Northern 15 $131,257 $141,784 $155,109 $183,791 $140,600 $159,383 $165,780 $187,931 $184,226 $204,904 $213,700 $241,014 5 $121,063 $141,784 $169,669 $132,283 $159,383 $184,914 $174,075 $204,904 $235, $138,894 $143,624 $165,345 $183,791 $156,134 $161,451 $185,869 $206,605 $201,135 $207,304 $235,631 $259, $119,028 $142,371 $197,233 $315,320 $121,821 $143,840 $221,646 $350,763 $163,246 $189,467 $277,148 $427, $115,092 $136,896 $212,462 $277,938 $115,092 $139,186 $235,735 $319,490 $155,809 $183,827 $293,978 $389,519 6 $109,483 $142,040 $235,735 $110,613 $143,506 $238,166 $150,320 $189,073 $300, Average: $122,469 $141,417 $189,259 $240,210 $129,424 $151,125 $205,352 $266,197 $171,468 $196,580 $259,418 $329,435 Regional Health Care - Categorical Head of Risk Hospital West 2455 Management $ $111,920 $133,760 $144,837 $152,361 $113,069 $144,210 $155,183 $163,752 $153,215 $188,287 $201,253 $211, Head of Compliance Hospital $209.7 West 19 $114,532 $123,833 $129,476 $144,315 $124,773 $136,895 $148,495 $158,736 $165,389 $179,185 $191,800 $204,712 Head of Risk Hospital 595 Management $ $140,008 $146,680 $165,341 $146,159 $149,964 $165,341 $191,360 $196,366 $215,102 Head of Corp Hospital 422 Compliance $ $124,266 $139,122 $191,716 $135,212 $140,216 $191,716 $177,580 $185,258 $246,225 Top Risk Hospital Management 4490B Executive $ $116,096 $140,996 $148,674 $135,394 $146,599 $155,106 $176,291 $191,978 $201,868 Chief Compliance Hospital 4285B Officer $ $121,388 $128,546 $179,488 $121,388 $148,259 $179,488 $163,237 $191,397 $231, Average: $121,368 $135,489 $159,922 $129,332 $144,357 $165,888 $171,179 $188,745 $214,674 Health Care - Categorical Head of Risk Hospital 2455 Management $ $94,782 $110,875 $130,521 $149,122 $98,439 $112,965 $134,596 $161,453 $135,500 $152,922 $178,090 $208,294 Head of Risk Hospital $150M - $400M 2455 Management $ $95,409 $105,127 $125,191 $144,524 $98,857 $110,666 $131,043 $156,959 $136,031 $149,588 $173,577 $202, Head of Compliance Hospital $ $99,589 $115,577 $127,281 $149,122 $110,979 $128,117 $141,702 $158,527 $148,905 $168,921 $184,613 $205, Head of Compliance Hospital $150M - $400M $ $96,976 $112,547 $120,489 $128,953 $98,962 $125,923 $140,030 $148,808 $136,417 $166,181 $181,718 $192,020 Head of Risk Hospital 595 Management $ $91,792 $104,198 $125,100 $154,290 $91,977 $108,993 $128,853 $164,715 $128,499 $147,749 $171,371 $212,487 Head of Risk Hospital $150M - $450M 595 Management $ $90,802 $99,246 $111,548 $125,830 $90,802 $101,070 $118,115 $133,023 $127,146 $138,935 $158,194 $175,672 Head of Corp Hospital 422 Compliance $ $106,752 $125,726 $156,375 $190,256 $107,378 $135,317 $168,812 $201,515 $146,593 $177,947 $216,960 $255,761 Head of Corp Hospital $150M - $450M 422 Compliance $ $107,065 $118,063 $137,610 $151,892 $110,453 $122,337 $140,373 $162,213 $149,725 $163,589 $185,142 $209,554 Top Risk Hospital $200M - $400M Management 4490B Executive $ $91,196 $104,373 $121,803 $137,449 $91,196 $112,361 $132,385 $150,360 $127,612 $151,148 $174,309 $195,101 Chief Compliance Hospital $200M - $400M 4285B Officer $ $128,443 $140,996 $169,113 $194,353 $133,215 $150,023 $169,113 $194,353 $176,335 $195,402 $219,553 $249, Average: $100,280 $113,673 $132,503 $152,579 $103,226 $120,777 $140,502 $163,193 $141,276 $161,238 $184,353 $210,657 Average with 13% geographic differential: $113,317 $128,450 $149,728 $172,414 $116,645 $136,478 $158,767 $184,408 $159,642 $182,199 $208,318 $238, Composite Average with geographic differentials: $119,051 $135,119 $166,303 $206,312 $125,134 $143,987 $176,669 $225,302 $167,430 $189,175 $227,470 $283,738 98

99 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Chief Hospital Accountant Position Match: Head of Budget Low Step: $74,926 Assets (Million): $206.0 MEC 2451 Mid Step: $87,947 Beds: High Step: $102,276 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical 2451 Head of Budget Hospital $209.7 West Hospital 4232B Top Budget Executive Hospital Average: Health Care - Categorical 2451 Head of Budget Hospital $ $97,290 $114,114 $144,837 $178,277 $98,230 $116,727 $147,450 $187,264 $135,742 $157,267 $193,520 $239, Head of Budget Hospital $150M - $400M $ $91,856 $105,023 $123,101 $143,583 $91,856 $106,068 $123,310 $143,583 $128,389 $144,972 $165,468 $189, Head of Budgets Hospital $ $93,825 $116,864 $135,734 $156,584 $97,109 $121,608 $139,747 $165,236 $133,997 $162,643 $184,179 $213, Head of Budgets Hospital $150M - $450M $ $83,400 $95,180 $113,429 $138,965 $83,400 $102,478 $116,656 $140,425 $118,412 $139,610 $157,073 $185, B Top Budget Executive Hospital $200M - $400M $ $109,871 $120,558 $141,100 $159,541 $109,871 $125,434 $143,486 $159,692 $149,648 $167,134 $188,884 $208, Average: $95,248 $110,348 $131,640 $155,390 $96,093 $114,463 $134,130 $159,240 $133,238 $154,325 $177,825 $207,210 Average with 13% geographic differential: $107,631 $124,693 $148,753 $175,591 $108,585 $129,343 $151,567 $179,941 $150,559 $174,387 $200,942 $234, Composite Average with geographic differentials: $107,631 $124,693 $148,753 $175,591 $108,585 $129,343 $151,567 $179,941 $150,559 $174,387 $200,942 $234,148 99

100 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Patient Account Manager Position Match: Head of Patient Accounts Low Step: $75,856 Assets (Million): $206.0 MEC 2440 Mid Step: $89,036 Beds: High Step: $103,548 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Patient 2440 Accounts Head of Patient 461 Accounts Head of Patient 4111B Accounting Hospital Hospital Hospital $209.7 $614.7 $543.9 West 10 $87,885 $104,918 $130,521 $167,514 $93,423 $104,918 $144,524 $167,932 $129,242 $143,803 $188,017 $218,084 5 $93,825 $96,327 $99,559 $93,825 $96,327 $99,559 $130,714 $133,666 $137,479 6 $120,558 $142,241 $210,509 $120,558 $148,674 $226,383 $162,258 $194,277 $284, Average: $100,756 $114,495 $146,863 $167,514 $102,602 $116,640 $156,822 $167,932 $140,738 $157,249 $203,257 $218,084 Health Care - Categorical Head of Patient 2440 Accounts Head of Patient 2440 Accounts Head of Patient 461 Accounts Head of Patient 461 Accounts Head of Patient 4111B Accounting Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $348.1 Hospital $150M - $450M $282.2 Hospital $200M - $400M $ $85,690 $104,605 $132,506 $157,273 $88,094 $107,008 $135,641 $168,663 $123,518 $145,837 $179,492 $216, $80,465 $95,618 $117,145 $130,312 $80,465 $95,618 $120,698 $134,283 $114,949 $132,829 $161,784 $177, $84,130 $107,065 $126,143 $145,950 $84,130 $111,548 $129,687 $150,224 $119,273 $150,819 $172,393 $196, $83,400 $109,463 $123,015 $132,502 $83,400 $111,756 $126,560 $136,880 $118,412 $151,459 $168,702 $180, $95,969 $114,748 $130,103 $143,887 $124,708 $136,431 $167,453 $195,300 $161,982 $177,086 $210,871 $241, Average: $85,931 $106,299 $125,782 $141,984 $92,159 $112,472 $136,008 $157,070 $127,627 $151,606 $178,648 $202,627 Average with 13% geographic differential: $97,102 $120,118 $142,134 $160,442 $104,140 $127,093 $153,688 $177,489 $144,218 $171,315 $201,873 $228, Composite Average with geographic differentials: $98,929 $117,307 $144,498 $163,978 $103,371 $121,866 $155,255 $172,710 $142,478 $164,282 $202,565 $223,

101 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Patient Admitting Manager Position Match: Head of Admissions Low Step: $65,196 Assets (Million): $206.0 MEC 2405 Mid Step: $76,525 Beds: High Step: $88,995 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical 2405 Head of Admissions Hospital $209.7 West 18 $83,391 $89,034 $101,783 $114,010 $84,227 $91,229 $105,441 $114,637 $119,237 $127,255 $143,761 $155, Head of Admissions/Patient Registration Hospital $ $100,393 $107,638 $125,100 $100,393 $117,177 $125,100 $138,463 $156,552 $167, B Head of Admitting/Patient Registration Hospital $ $74,596 $93,479 $106,240 $117,696 $81,651 $98,978 $114,955 $129,298 $115,079 $135,804 $154,078 $170, Average: $86,127 $96,717 $111,041 $115,853 $88,757 $102,461 $115,165 $121,967 $124,260 $139,870 $155,153 $162,821 Health Care - Categorical 2405 Head of Admissions Hospital $ $70,433 $86,317 $101,783 $125,191 $71,060 $87,571 $104,396 $131,670 $103,738 $123,108 $142,716 $174, Head of Admissions Hospital $150M - $400M $ $69,284 $82,764 $91,229 $102,097 $69,284 $83,600 $91,333 $103,873 $101,755 $118,498 $127,754 $142, Head of Admissions/Patient Registration Hospital $ $72,975 $86,965 $104,928 $123,328 $73,392 $88,821 $110,766 $127,498 $106,528 $124,475 $149,653 $169, Head of Admissions/Patient Registration Hospital $150M - $450M $ $69,118 $83,921 $96,014 $113,633 $69,743 $86,111 $96,744 $119,992 $102,184 $121,216 $134,027 $160, B Head of Admitting/Patient Registration Hospital $200M - $400M $ $75,530 $86,320 $97,110 $106,796 $78,435 $89,018 $99,185 $108,312 $112,030 $124,555 $136,665 $147, Average: $71,468 $85,257 $98,213 $114,209 $72,383 $87,024 $100,485 $118,269 $105,247 $122,370 $138,163 $158,827 Average with 13% geographic differential: $80,759 $96,341 $110,980 $129,056 $81,793 $98,337 $113,548 $133,644 $118,929 $138,278 $156,124 $179, Composite Average with geographic differentials: $83,443 $96,529 $111,011 $122,454 $85,275 $100,399 $114,356 $127,806 $121,594 $139,074 $155,638 $171,

102 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Industry Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Decision Support Manager Position Match: Head of Decision Support Low Step: $78,443 Assets (Million): $206.0 MEC 2536 Mid Step: $92,073 Beds: High Step: $107,078 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Decision Hospital West 2536 Support $ $106,172 $113,174 $142,643 $145,673 $110,457 $118,921 $152,988 $154,242 $149,567 $159,292 $198,664 $200,463 Head of Decision Hospital 570 Support Hospital Average: $106,172 $113,174 $142,643 $145,673 $110,457 $118,921 $152,988 $154,242 $149,567 $159,292 $198,664 $200,463 Health Care - Categorical Head of Decision Hospital 2536 Support $ $95,095 $106,277 $122,056 $150,689 $98,230 $110,457 $125,087 $154,033 $135,347 $149,586 $167,057 $201,157 Head of Decision Hospital $150M - $400M 2536 Support $ $91,124 $106,172 $116,309 $136,373 $97,290 $110,457 $116,309 $143,479 $133,692 $149,567 $157,244 $188,026 Head of Decision Hospital 570 Support $ $94,868 $113,111 $127,185 $161,066 $100,184 $114,206 $133,961 $177,798 $137,260 $154,566 $176,855 $226,790 Head of Decision Hospital $150M - $450M 570 Support $ $88,404 $102,165 $116,552 $127,185 $94,129 $105,188 $125,934 $141,572 $130,042 $143,578 $166,913 $184,465 Hospital $200M - $400M Average: $92,373 $106,931 $120,525 $143,828 $97,458 $110,077 $125,323 $154,220 $134,085 $149,324 $167,017 $200,109 Average with 13% geographic differential: $104,381 $120,832 $136,194 $162,526 $110,128 $124,387 $141,614 $174,269 $151,516 $168,737 $188,729 $226, Composite Average with geographic differentials: $105,277 $117,003 $139,418 $154,099 $110,292 $121,654 $147,301 $164,255 $150,542 $164,014 $193,696 $213,

103 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Director of Environmental Services Survey Position Title Industry Category Typical Scope Geographic Region n = Position Match: Head of Environmental Services/Housekeeping Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th Low Step: $80,061 Assets (Million): $206.0 MEC 2610 Mid Step: $93,972 Beds: High Step: $109,287 FTEs: California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Environmental Services/Housekeep Hospital 2610 ing Head of Hospital Environmental 226 Services Head of Hospital Environmental 4200B Services Head of Hospital 4201B Housekeeping $209.7 $548.4 $280.5 West 11 $76,285 $84,645 $110,770 $123,206 $76,285 $92,065 $112,860 $134,492 $110,016 $127,301 $152,799 $176,668 6 $100,080 $105,293 $109,463 $100,080 $105,293 $109,463 $138,094 $144,245 $149, $81,963 $103,543 $112,984 $121,459 $85,594 $118,171 $125,538 $132,150 $120,347 $156,809 $165,875 $174, Average: $86,109 $97,827 $111,072 $122,332 $87,320 $105,176 $115,953 $133,321 $122,819 $142,785 $155,946 $175,341 Health Care - Categorical Head of Hospital Environmental Services/Housekeep 2610 ing $214.4 Head of Hospital $150M - $400M Environmental Services/Housekeep 2610 ing $255.1 Head of Hospital Environmental 226 Services $240.0 Head of Hospital $150M - $450M Environmental 226 Services $255.6 Head of Hospital $200M - $400M Environmental 4200B Services $280.4 Head of Hospital $200M - $400M 4201B Housekeeping $ $66,462 $84,227 $99,589 $116,727 $67,298 $86,004 $100,425 $120,698 $99,261 $121,164 $138,350 $161, $69,597 $83,809 $93,528 $108,158 $70,851 $84,645 $96,349 $108,471 $103,378 $119,731 $133,184 $147, $68,075 $81,315 $93,095 $108,837 $69,431 $84,026 $95,389 $111,756 $101,684 $118,662 $132,146 $151, $74,643 $84,234 $91,219 $97,682 $75,946 $85,954 $93,825 $100,810 $109,382 $121,116 $130,244 $138, $78,643 $88,395 $103,335 $116,747 $84,971 $89,848 $114,333 $136,313 $119,127 $125,759 $152,933 $177, $66,089 $77,709 $96,695 $113,739 $66,089 $84,764 $96,695 $113,739 $97,985 $118,751 $134,100 $154, Average: $70,585 $83,281 $96,243 $110,315 $72,431 $85,873 $99,502 $115,298 $105,136 $120,864 $136,826 $155,154 Average with 13% geographic differential: $79,761 $94,108 $108,755 $124,656 $81,847 $97,037 $112,438 $130,286 $118,804 $136,576 $154,614 $175, Composite Average with geographic differentials: $82,935 $95,967 $109,914 $123,494 $84,583 $101,106 $114,196 $131,804 $120,812 $139,681 $155,280 $175,

104 Market Data Natividad Medical Center Market Pricing Labor Market Data - Effective July 1, 2011 Labor Market Data - Effective July 1, 2011 Survey Source Svy Job/ Page # Survey Position Title Hospital Purchasing & Materials Support Director Industry Position Match: Head of Materials Management and Distribution Low Step: $92,248 Assets (Million): $206.0 MEC 2640 Mid Step: $108,276 Beds: High Step: $125,923 FTEs: Category Typical Scope Geographic Region n = Base Salary Total Cash Compensation Total Compensation 25th 50th 75th 90th 25th 50th 75th 90th 25th 50th 75th 90th California Health Care - Categorical $150M - $400M Northern Average: Regional Health Care - Categorical Head of Materials Management and 2640 Distribution Head of Materials 485 Management Top Materials Management 4310B Executive Hospital Hospital Hospital $209.7 $580.7 $269.4 West 35 $96,140 $117,667 $128,640 $147,345 $103,560 $127,908 $140,971 $163,543 $140,865 $169,088 $184,126 $210,065 7 $113,320 $137,923 $142,510 $115,718 $137,923 $149,182 $156,115 $182,749 $194, $107,174 $117,756 $128,858 $138,823 $118,586 $126,990 $143,175 $157,704 $157,878 $168,186 $186,369 $202, Average: $105,545 $124,449 $133,336 $143,084 $112,621 $130,940 $144,442 $160,623 $151,619 $173,341 $188,443 $206,379 Health Care - Categorical Head of Materials Management and 2640 Distribution Head of Materials Management and 2640 Distribution Head of Materials 485 Management Head of Materials 485 Management Top Materials Management 4310B Executive Hospital $214.4 Hospital $150M - $400M $255.1 Hospital $242.0 Hospital $150M - $450M $267.0 Hospital $200M - $400M 233 $84,018 $104,291 $122,370 $142,643 $86,944 $104,500 $130,521 $148,599 $122,067 $143,272 $172,547 $194, $88,303 $105,336 $120,489 $134,596 $90,602 $106,172 $126,654 $145,255 $126,496 $145,132 $168,342 $189, $77,666 $95,302 $112,382 $132,710 $78,042 $97,422 $116,030 $141,572 $112,021 $134,576 $156,259 $185, $89,551 $98,308 $110,609 $124,058 $90,698 $100,393 $116,239 $130,625 $126,817 $138,088 $156,148 $172,956 $ $86,631 $102,298 $121,076 $137,934 $94,724 $104,995 $133,838 $159,729 $130,317 $143,409 $175,631 $204, Average: $85,234 $101,107 $117,385 $134,388 $88,202 $102,696 $124,656 $145,156 $123,544 $140,895 $165,786 $189,346 Average with 13% geographic differential: $96,314 $114,251 $132,645 $151,858 $99,668 $116,047 $140,862 $164,026 $139,604 $159,212 $187,338 $213, Composite Average with geographic differentials: $100,929 $119,350 $132,990 $147,471 $106,144 $123,494 $142,652 $162,325 $145,612 $166,276 $187,890 $210,

105 Appendix D 105

106 The New Paradigm in Compensation Boards must now consider a full range of issues in making compensation decisions to ensure that the programs are aligned with strategy, competitive, responsible and a best fit for the organization. Application AREAS OF BOARD ACCOUNTABILITY RELATED TO TOTAL COMPENSATION NGING BUSINESS CONDITIONS & EMERGING COMPETITIVE FACTORS Reassess compensation and benefit strategies in light of evolving business environment Prepare for effects of health care reform, other downward rate pressures Assess impact of emerging business models Reevaluate historical Total Compensation philosophy 106