PROVIDENCE, R.I. (WPRI) — Rhode Island’s biggest health system paid its outgoing chief executive $6.8 million on his way out the door, according to tax documents newly obtained by Target 12.

Lifespan’s former president and CEO, Dr. Timothy Babineau, received the payout in 2022. Babineau unexpectedly stepped down that year after his costly push to merge the hospital group with its smaller rival, Care New England, ended in failure.

Lifespan had refused to disclose Babineau’s exit package until it was required to reveal the numbers to the IRS as part of an annual Form 990 tax form, which was just filed. The not-for-profit corporation, Rhode Island’s largest employer, owns Rhode Island Hospital as well as five other hospitals in Rhode Island and Massachusetts.

The IRS document breaks down Babineau’s 2022 pay package as $1.01 million in base salary; $3 million in bonus and incentive pay; $2.4 million in “other” compensation; $359,000 in deferred compensation, including retirement; and $25,000 in nontaxable benefits.

Lifespan spokesperson Jessica Wharton said the $2.4 million listed as “other” compensation was due to a special three-year retention payment that the board approved for Babineau in 2019 “to ensure leadership continuity during an uncertain time in health care.”

Nearly a quarter of Babineau’s 2022 compensation package — about $1.6 million — represented his earnings over four years from a deferred compensation plan for executives that Lifespan has established. It is separate from Lifespan’s general employee retirement program.

The amounts also include a $668,000 severance payment that Babineau received as part of his departure, according to the document.

“The salary and benefits reported for Dr. Timothy Babineau in the Form 990 for 2022 were set by contract and are standard for large academic medical center CEOs,” Wharton said. “When Dr. Babineau announced he would be leaving Lifespan, the corporation was required to fulfill the terms and conditions of his contract.”

Lifespan didn’t respond to Target 12’s request for an interview with its board chairman, Larry Aubin, or Babineau. But Wharton defended how much money the group allocates to CEO pay.

“Lifespan’s approach to executive compensation is designed to attract, retain, and motivate top-tier talent who are instrumental in driving our organization’s strategic goals and ensuring high-quality care for our patients,” she said. “We strive to balance competitive compensation with our responsibility to be good stewards of the resources entrusted to us.”

Babineau’s successor as CEO, John Fernandez, has said he inherited a challenging financial situation at the hospital group. He has been taking steps to get the system to post a meaningful profit margin, partly to fund investments in its facilities.

Fernandez recently laid off 20% of Lifespan’s executives , and later this month will change its name to “Brown University Health” as part of an expanded partnership with the Ivy League school. Brown has pledged to invest $150 million in Lifespan over the next seven years.

Separately, Lifespan last week agreed to pay the city of Providence $1.5 million in lieu of taxes over the next two years, which Mayor Brett Smiley said was the most he could obtain from the hospital system in light of its current financial condition.

Union leaders have long expressed outrage about the amount of money Lifespan pays its top executives at a time of financial strain in Rhode Island health care. Lynn Blais, president of the United Nurses and Allied Professionals, described the $6.8 million pay package for Babineau as “absolutely appalling.”

“I look at health care today and the infrastructure here in Rhode Island, and it’s deplorable,” Blais told Target 12. “We’ve been screaming about it now for years, that our health care system is failing. And you get someone walking away with $6.8 million when he really created the problem.”

All told, Lifespan paid Babineau $27 million during his decade as CEO, according to a spokesperson. Target 12 reported in 2013 that Babineau’s predecessor, George Vecchione, had been paid $39 million during his 14 years leading the system.

Blais said Babineau was “absolutely not worth that money,” but also said the nurses union was frustrated with how much Lifespan has been spending on other executives and managers who aren’t providing bedside care.

Lifespan’s leaders frequently point to the salaries paid to leaders of Boston’s major hospital systems as a point of comparison for their own CEO. Tax filings show Mass General Brigham CEO Dr. Anne Klibanski earned $6 million in 2022, while Beth Israel Lahey Health CEO Dr. Kevin Tabb made $2.8 million, The Boston Globe reported .

Yet Blais questioned the comparison with Massachusetts.

“We make those arguments — that you have to compete for health care workers in a global and a regional zone — and we always get told, ‘Well, if you want to get paid Boston rates, work in Boston,'” Blais said. “So I would say if you want to be paid Boston rates as a CEO, work in Boston.”

But Blais also indicated an open mind about Fernandez, particularly after his recent decision to trim the executive ranks across Lifespan.

“I think it sends a signal,” she said. “I think it’s a wait-and-see of what that does and what that truly means. Right now, I’d say we give him the benefit of the doubt. He’s come in new, and we have to see where that goes.”

Ted Nesi ( tnesi@wpri.com ) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter , Threads and Facebook .

Tim White ( twhite@wpri.com ) is Target 12 managing editor and chief investigative reporter and host of Newsmakers for 12 News. Connect with him on Twitter and Facebook .

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