The company said its ratio reflects the fact that more than one-third of its workforce is part-time.
Mark J. Tarr, MBA, president and CEO of Encompass Health Corporation, headquartered in Birmingham, Alabama, earned more than $4.9 million in total compensation last year.
That was 134-times as much as the $36,707 the company paid its median employee, according to documents filed with the Securities and Exchange Commission (SEC) ahead of the annual Encompass stockholders meeting planned for May 3.
"The composition of our workforce greatly impacts this ratio," the company noted in its SEC filing.
"Over 35% of our workforce consists of employees working less than full-time, which is a common employment arrangement in the healthcare services sector. Flexible staffing arrangements that fit employees’ needs allow Encompass Health to attract and retain well-qualified employees."
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Tarr's total compensation for 2017 included a base salary of $900,000, more than $2.7 million in stock awards, about $540,000 in option awards, nearly $1.2 million in non-equity inventive plan compensation, and nearly $47,000 in other compensation, according to the filing.
Tarr earned less than $2.5 million in total compensation each year in 2016 and 2015, when his compensation from stock awards and non-equity incentive plan payments was much lower, the documents note.
The CEO pay ratio Encompass calculated and disclosed—as newly required as a result of the Dodd-Frank Act—was much lower than the ratio reported earlier this month by HCA Healthcare.
HCA Chairman and CEO R. Milton Johnson’s total annual compensation was nearly $17.3 million in 2017, while the median total annual compensation of all HCA employees was less than $55,400, meaning Johnson earned 312-times as much as the median worker, according to the company's SEC filings.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.