CHARLOTTE, NC (Cassie Cope and Jim Morrill/The Charlotte Observer) - State health officials said Monday they continue to have "serious concerns" with the leadership of Charlotte-based Cardinal Innovations, including the award of a two-year severance package to its ousted CEO.
Cardinal's board fired CEO Richard Topping Friday, effective Dec. 1. The board also gave him the two-year severance, though exactly how much that will be remained unclear Monday.
One state senator even questioned whether the severance is legally enforceable.
Cardinal is North Carolina's largest state-funded mental health managed care organization. It offers services for people with disabilities, mental health needs and substance abuse in 20 N.C. counties, including Mecklenburg.
In May, State Auditor Beth Wood ripped Cardinal for spending on CEO pay as well as lavish Christmas parties and board retreats, charter flights for executives and "questionable" credit card purchases including alcohol. All of that, her report said, threatened to "erode public trust."
Just last month, the Cardinal board voted to reduce Topping's salary from more than $600,000, to just over $200,000, according to news reports. On Monday, Cardinal did not release the amount of severance that Topping will get over the next two years.
Cardinal spokesperson Ashley Conger said the Charlotte-based organization expects to provide the number later this week. "The severance is still in process and not finalized, and therefore not available at this time," she said.
Cardinal board chair Lucy Drake confirmed on Monday that Topping would get two years of severance, but said she did not know which salary would be used.
State Sen. Tommy Tucker, R-Union, said he was pleased that Topping was ousted.
"He had become toxic to the organization," Tucker said, adding there was a curtailment of services to the population Cardinal serves because of money spent, including on exorbitant salaries.
"Pay him and get him gone," Tucker said of the severance, adding, "Let's start over."
Through a spokeswoman, Topping declined to comment.
Sen. Louis Pate, a Wayne County Republican who co-chairs a panel that oversees DHHS, called Toppings' package "a very golden parachute."
"That ought to ease him into retirement for certain," Pate said Monday. "It's unfortunate that it had to come to this. If this were a publicly owned entity, that would be one thing to have salaries at that level. But this is really a taxpayers' responsibility."
An October N.C. Department of Health and Human Services audit also criticized severance offerings to Topping and 10 employees other than the CEO.
"DHHS continues to have serious concerns with the leadership of Cardinal Innovations," said Dave Richard, deputy secretary for medical assistance, pointing to the payment of severance without permission from DHHS and the removal of board member Bryan Thompson who had been outspoken about the organization.
"These actions indicate a lack of understanding by board leadership of the serious nature of the concerns expressed by DHHS and other public entities," Richard said.
GOP Sen. Dan Bishop, a Charlotte attorney and member of the Senate committee that oversees DHHS, questioned whether Topping's severance is legal.
"I share the concerns expressed by DHHS," Bishop said. "I would question whether the severance compensation is legally enforceable. I think someone ought to examine that very carefully."
Drake said that most CEOs who oversee three to five counties make about $200,000 a year. Cardinal works in 20 counties, she said, adding, "that's a big difference."
"Truthfully, the man has done an excellent job," she said.
Topping will be replaced by Trey Sutten, interim chief financial officer and a former Health and Human Services employee, who has worked for Cardinal since October.
Sen. Tucker said Sutten will be a solid interim director and hopes a new director will be paid according with the state personnel act.