Last year was challenging for Acadia Healthcare, one of the nation's largest providers of mental health services.
As explained in a New York Times investigation in September, many federal agencies have launched an investigation into whether Acadia illegally detained patients against their will in a mental hospital. Federal inquiries rattle investors and Acadia stocks plummeted.
However, the Acadia troubles benefited Christopher Hunter, the company's chief executive. According to this month's financial return, its board helped him get a $1.8 million bonus to respond to “unprecedented government inquiries.” This bonus came in addition to regular coverage totaling over $7 million in 2024.
Acadia's Chief Financial Officer and Legal Advisor were also given a bonus of about $1 million, while the Chief Operating Officer was promised $600,000. Acadia said the bonuses paid in March next year were awarded to prevent leaders from leaving before the investigation is completed.
The company's board of directors determined that maintaining the leadership team is “the best long-term interest for the company and the patients and communities it serves.” “The company follows the performance philosophy, using peer market data for benchmarking and calibration,” he added.
The Times reported that Acadia had harbored patients against their will to maximize insurance payments. Some patients arrived in the emergency room in search of daily mental health care, but were sent to an Acadia facility where they were trapped inside and isolated from their families. The practice began before Hunter became CEO in April 2022, but continued under the clock, The Times discovered.
The company said it would forcibly refuse fraud and cooperate with the investigation. “The claim that Acadia systematically holds patients for longer than it is medically necessary is false and it directly counters everything we do when it comes to patient care,” Hunter told investors in October.
After the article was published, Acadia told investors that several government agencies, including the Department of Justice and the Securities and Exchange Commission, have launched an investigation. In October, executives revealed that admission to the facility was not as high as expected. That same month, shareholders filed a class action lawsuit against the company, claiming that Acadia had concealed its practices from investors.
The Times also discovered issues in other parts of Acadia, including a methadone clinic that had been billing the government for services that did not provide services such as counseling. And inadequate staffing has led to a series of tragedy at one of the company's valuable women's facilities, The Times reported Tuesday.
Since September, the company has lost a market value of around $5 billion and is now worth around $2 billion.
Like many CEOs, Hunter's compensation is partially linked to Acadia's stock value. In 2024, the company's stock declined made him miss his performance target.
But Sarah Anderson, executive compensation analyst at the Institute of Policy Research, a left-leaning think tank, said those incentives are undermined when companies like Acadia give bonuses despite their poor performance.
“The overall argument for linking your compensation to stock prices is to ensure that executives take the risk of their actions,” she said. “I'm totally against this.”
