Investigation into Tower Health CEO’s Compensation and Failed Expansion Plans
The Rise and Fall of Tower Health: A Story of Ambition, Compensation, and Financial Struggles
Former Tower Health CEO Clint Matthews had big dreams of expanding the healthcare system, but his ambitious acquisitions ultimately led to financial ruin. Documents from a recent court case shed light on Matthews’ relentless pursuit of high compensation, even as the system’s financial health deteriorated.
Despite being offered a generous compensation package of $1.15 million in base pay and a $331,500 bonus for his merger plans, Matthews deemed it “a bit light” and negotiated for more. The board eventually agreed to increase his base pay by $100,000 and his bonus by $73,500.
As Matthews implemented his expansion plans, Tower’s revenue initially soared. However, the newly acquired hospitals ended up losing $426 million over three years, causing Tower to hemorrhage cash and putting the financial stability of Reading Hospital at risk.
The Pottstown School District, located in the area served by Tower Health, attempted to challenge the system’s nonprofit status, claiming that Matthews’ exorbitant pay undermined Tower’s charitable mission. Despite their efforts, the court ruled in Tower’s favor, affirming its tax-exempt status.
Matthews’ compensation reached $2.3 million by 2018, prompting concerns from board members about his focus on personal financial gain rather than the system’s success. Tower eventually cut back on his compensation as financial troubles mounted.
In the wake of Matthews’ abrupt retirement in February, Tower Health has been forced to close hospitals and sell off assets to mitigate its losses. The fallout includes the closure of Jennersville Hospital and the impending sale of Chestnut Hill Hospital.
Despite the challenges facing Tower Health, the system remains committed to its charitable mission and providing essential healthcare services to the community. The school district is considering its next steps in light of the court’s decision, but the future remains uncertain for both Tower Health and the communities it serves.