KVHD CFO filling retiring CEO's position

After a closed session at the Kern Valley Healtcare District (KVHD) board of directors meeting, Tuesday June 24, District Counsel Attorney Scott Nave announced that CEO McGlew was retiring.

Upon the Chief Executive Officer Tim McGlew stepping down, September 1, 2025, the Chief Financial Officer John Lovrich would be taking over as CEO.

Previously Lovrich filled in, proving himself competent as CEO, whilst McGlew was on medical leave.

McGlew told the Kern Valley Sun, after the meeting, that he decided to retire for health reasons. "My health. I've had like 10 surgeries in the past six, seven years. I’ve had six spinal fusions."

The CEO said that his muscles are impacted and he can't walk as well anymore. "Physically I just can't do it anymore. I've been doing this 35 years now. I want to enjoy time with my family." McGlew said, "It's purely for health reasons. I appreciate you asking."

In open session the board was on the agenda to approve the terms of Lovrich's employment agreement. No other items were discussed during closed session.

The contract of Lovrich, for the CEO position, is an at-will contract for four years. Under local health district law the maximum term the district can enter into a contract for CEO is for four years. That is the only employee under contract. All other employees hold employment by statute.

The contract laid out the terms and conditions and the scope of services and the compensation and benefits for Lovrich.

The starting salary for the position was $275,000 annually. Lovrich was currently earning $222,000 as the CFO. So it's about a 23% increase the attorney said, and is fairly consistent with market rate, although some districts pay much higher, and other hospitals lower.

The position has standard benefits as other employees. Vacation needed to be finalized. General staff accrue PTO, though the board could finalize these details. Vacation needed to be finalized as well. Nave said that employees accrue PTO.

Director Gene Parks asked if the salary could be subtracted from, if the CFO takes over a certain amount of PTO days, off per year. Nave said that the Fair Labor Standard Act, which is federal law and governs most of the employees, does allow them to deduct under certain circumstances. But generally time for the executive PTO is designed to get away and recharge and not have to worry about what's going on at the facility.

Parks asked about vacation saying KVHD can't afford them to take off. The PTO is not additional pay. Parks was concerned about the future CEO taking too much vacation time away and still getting paid. "He can't get carried away and take off for six months at a time," Parks said. The implication being the concern the CFO would take a lot of time away, just as the retiring CEO Tim McGlew has had to do, for medical issues.

Nave said the at-will term would kick in if the person took too much time away. Nave asked if the board wanted the contract to stick with the standard accrual or set a fixed amount

Director Ross Elliott asked about the details of standard PTO accrual.

Executive Assistant Heidi Sage told the board that the standard accrual amounts were set in tiers, based on the person’s years of service, and it is a bit higher for exempt employees than for non-exempt employees.

Parks wanted it to be a standard PTO because the board can't get rid of the CEO if he takes too much time off.

Nave wanted to set the terms and revise the contract according to the board’s direction regarding terms. The team planned to sign the contract the next day.

Parks wanted the new CEO to prove his performance before they determined to have a severance agreement. Yet Lovrich wanted at least three months severance as a protection.

Nave said usually severance agreements are defined, so that if Lovrich leaves momentarily, he won't get a severance amount. If he's fired for a cause, he doesn't get anything. And cause would be defined in the agreement. And if the board terminated
Lovrich without a cause the board would have to pay the severance package.

Parks decided he wanted to offer a three-months severance initially, if Lovrich gets terminated without a cause. But if Lovrich quits he gets nothing. Parks was satisfied Lovrich would perform.