Richard Topping, the ousted CEO of Charlotte-based Cardinal Innovations, will leave the organization with a severance package worth $1.7 million, company officials said Tuesday.
The Cardinal board voted to terminate Topping on Friday after a tumultuous tenure running North Carolina’s largest state-funded mental health managed care organization. His departure takes effect Dec. 1.
Three other executives are also leaving Cardinal with high six-figure payouts, bringing the total severance amount to $3.8 million.
“I’m stunned and I think it’s absolutely ridiculous,” said Sen. Tommy Tucker, a Union County Republican who helps oversee the organization. “All the more reason for the current Cardinal board to be removed quickly. The state will be looking into whether anything legally that can be done.”
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Cardinal offers services for people with disabilities, mental health needs and substance abuse in 20 North Carolina counties, including Mecklenburg.
On Monday, state health officials said they continue to have “serious concerns” with Cardinal’s leadership. In May, the state auditor ripped Cardinal for spending on CEO pay, lavish Christmas parties and board retreats, charter flights for executives and “questionable” credit card purchases, including alcohol. The report said all that threatened to “erode public trust.”
Board chair Lucy Drake could not be reached Tuesday. But board member George Dunlap said Tuesday he abstained on the vote on Topping’s severance.
“The board’s position was they (decided) to keep their commitment, what they had offered in severance,” said Dunlap, a Democratic commissioner for Mecklenburg County. “Basically what they decided to do was to honor his contract.”
In October, the state Health and Human Services agency’s Office of the Internal Auditor released a 17-page report that criticized Cardinal’s severance packages for being offered for longer than similar entities and offering severance pay to 10 employees other than the CEO.
The review found that four of seven similar quasi-government groups, including Cardinal, offer severance packages. Three do not offer payouts at all.
In addition, Cardinal’s severance packages range from 24 to 36 months, while the similar entities cap out severance pay at a year.
The severance pay calls into question the Cardinal board’s understanding of their core values about who Cardinal is and what it’s supposed to be doing, said Vicki Smith, executive director of Disability Rights North Carolina.
“They have made interesting choices over the last several months about how they are spending their administrative dollars, and it’s really hard to determine or see how this benefits their core constituents.”
Those constituents include Medicaid recipients who have to meet low income requirements or have a disability.
Cardinal received $587 million in Medicaid money during the 2016 budget year.
On Monday, state Sen. Dan Bishop, a Charlotte Republican, questioned whether the severance is legally enforceable.
The CEO’s salary saw wild fluctuations this year.
According to DHHS, which oversees the agency, Topping’s salary began the year at $635,000. In July, it was reduced to $400,000. Topping appealed the change and the board complied in September, reinstating his $635,000 salary – and paying $48,958 to compensate for the three months his salary was reduced.
With bonus, 401(k) contribution and allowances, DHHS put his 2017 compensation at $1.2 million.
Then in October, Cardinal’s board voted to reduce Topping’s salary to $204,195, the maximum prescribed under guidelines set by the Office of State Human Resources.