Cerner’s compensation package for new CEO Dr. David Feinberg will total roughly $34.5 million through 2022, according to a federal filing.
Feinberg—who currently serves as vice president of Google Health, a division that Google plans to disband after he leaves—will join Cerner in October.
Under an executive employment agreement approved by the Cerner board of directors, Feinberg’s initial annual base salary will be $900,000, according to an 8-K form that Cerner filed with the Securities and Exchange Commission last week. He’ll receive a one-time cash bonus of $375,000 to replace annual incentives he had accrued with Google. Feinberg also will receive a one-time new hire award of $15 million in Cerner restricted stock units to replace equity compensation he forfeits after leaving Google, as well as $3.375 million in restricted stock units for 2021’s fourth quarter and $13.5 million in restricted stock units for 2022. Feinberg’s annual targeted cash bonus is $1.35 million, according to the filing.Google says health projects will continue—even if Google Health won’t
Cerner named Feinberg, a former health system CEO who led Geisinger Health and UCLA Health, as its new CEO last week—closing out a CEO search that the Kansas City, Mo.-based electronic health records company kicked off in May. His appointment comes amid speculation that Cerner may be considering a sale.
Feinberg in a statement last week said he would “continue to profitably grow the business” and called Cerner “uniquely well-positioned” to provide technologies that let clinicians take better care of patients.
He succeeds Brent Shafer, who has served as Cerner’s chairman and CEO for three years.
Shafer will continue to serve as a senior advisor for one year to ease the transition, according to Cerner, but will step down from the board. Feinberg will fill his vacancy as a member of the board, but will not serve as chairman, as the board decided to split the role of chairman and CEO when Feinberg joins the company.
Cerner has been working to redefine its business, shifting from a company focused on EHRs to one focused on data and data systems—notably, with a goal of creating a $1 billion “data-as-a-service” business. The effort has also involved a cloud partnership with Amazon Web Services, Amazon’s cloud arm that competes with Google Cloud and Microsoft Corp.’s Azure.
And Cerner in 2019 deployed a new “operating model” designed to make the company more efficient and profitable. The company restructured its board of directors and launched a set of more than 100 cost cutting, portfolio management and business simplification efforts to improve its adjusted operating margin.
Cerner posted $1.5 billion in quarterly revenue, up 9.5% from the year-ago quarter, for 2021’s second quarter. The company reported $49.6 million in operating earnings, down 66%, and an adjusted operating margin of 21%, compared to 18% a year ago. As part of its new operating model, Cerner is targeting an adjusted operating margin in the mid-20% range by 2024.
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