Pam Shipman got a glowing performance review as CEO of Cardinal Innovations Healthcare Solutions last summer, only to be “blindsided” when the same board forced her out in April, her lawyer said.
After the managed care company presented Shipman’s departure as a normal retirement, acting CEO Richard Topping responded to Observer questions Monday by saying the board forced her to leave after working with her on performance problems for more than a year.
Shipman’s attorney, John Gresham, gave the Observer the summary pages of Shipman’s most recent job evaluation. That report contradicts Topping’s account of long-standing concerns that Shipman wasn’t adjusting to Cardinal’s growth, which included expansion to cover Mecklenburg County in April 2014. Gresham declined to give the Observer the full evaluation.
Cardinal Innovations, based in Kannapolis, handles $635 million in public money to provide behavioral health services for 357,000 Medicaid clients in 16 counties. Shipman turned Cardinal into a state leader in efforts to control costs and improve service for people with mental illness, addictions, autism and intellectual disabilities.
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The evaluation shows she was rated “exceeds expectations” at a time when Topping said the board had declined to renew her contract. “Pam continues to garner the board’s full support and confidence,” the summary says.
The summary praises her ability to handle growth and notes the effectiveness of her executive team. Four top Cardinal executives have recently resigned; one announced his mid-May departure in March, while three others resigned for personal reasons or new jobs in the past week.
The Observer asked Cardinal to discuss the evaluation and the discrepancies between Gresham’s account and Topping’s. “After checking with our attorney, we don’t plan on making any further comments at this time,” Cardinal spokeswoman Kim McMillan said.
Cardinal’s board chairwoman, former Stallings Mayor Lucy Drake, could not be reached for comment Thursday.
Topping, who had been Cardinal’s general counsel since 2009, took over Shipman’s job immediately after an April 27 board vote to remove her. He will officially become CEO once her retirement becomes official July 1. The salary for Shipman and Topping is $400,000 a year.
Gresham and a lawyer for Cardinal (not Topping) are negotiating a severance agreement. Gresham said Shipman won’t comment during that process.
While Cardinal is little known to the general public, it has a high profile among advocates for the disabled and state legislators, who are debating Medicaid reform and have raised questions about what’s going on with Shipman’s departure.
“This news is very dark,” wrote Laurie Coker of Winston-Salem, director of the N.C. Consumer Advocacy, Networking, and Support Organization. “It casts a long shadow over so much that we have hoped in through this largest and first pilot of a public waiver management agency. We will find few in our state with the values and integrity plus the management skills of Ms. Shipman.”
Here’s a look at conflicting accounts of Shipman’s performance and departure.
▪ Topping said: Concern about performance problems led the board not to renew Shipman’s contract in July 2014. She continued as an at-will employee and was given five pages of “pretty strict goals that she needed to meet.”
▪ Gresham said: For the review, each board member rated Shipman on a five-point scale in six categories. Her lowest rating was 3.8 (between “meets expectations” and “exceeds expectations”) for strategic leadership, and her average was 4.3, between “exceeds expectations” and “exceptional.”
The board never told Shipman she had been denied a contract, Gresham said, and for several months she believed Topping was working on the new contract. “She felt, given her performance, it wasn’t paramount,” Gresham said.
The list of goals was written by Shipman, Gresham said, and when she made a progress report in January, only two of eight categories, both related to the Mecklenburg expansion, hadn’t been met.
▪ Topping said: Concerns about Shipman’s performance culminated at a Cardinal board retreat in late April, when she missed the first day and showed up 45 minutes late for the second. The next Monday, April 27, the board held an emergency meeting and voted to direct Shipman, who is 61, to leave immediately, taking vacation time until a June 30 retirement date.
▪ Gresham said: Shipman had told Topping she would be at a state Medical Society meeting on Cardinal business on the Friday the retreat started. Saturday’s event began with breakfast from 8:30 to 9, and Shipman came at 9:05 a.m. Her report, scheduled for 9 a.m. to 10 a.m., began at 9:20, after her PowerPoint presentation was ready and board members had finished eating.
Gresham said Shipman was “shocked” and “blindsided” when she was notified Tuesday that the board had asked her to leave immediately, after 28 years with Cardinal and its predecessor, Piedmont Behavioral Healthcare.
Pam Shipman’s last review
Excerpts from Cardinal Innovations CEO Pam Shipman’s 2013-14 performance evaluation, done last summer. Her lawyer, John Gresham, provided three pages of the confidential document but declined to give the Observer the full report.
For this appraisal period, the CEO meets or exceeds expectations in every category determined by the Board to be significant to the overall success of Cardinal Innovations.
Clear strengths demonstrated by the CEO fall into three categories:
1) Business and executive knowledge,
2) Executive and organizational development and,
3) Mission/external relations.
In the past year, Pam has demonstrated the ability to transition from a CEO managing a steady-state environment to the CEO leading growth through massive industry uncertainty. In doing so, Pam continues to garner the Board’s full support and confidence.
Knowing the business, combined with her ability to recruit and surround herself with an effective executive team to manage the significant growth of Cardinal Innovations, has enabled Pam to engage successfully in the challenges of the past year.
For the appraisal year 2013-14, the Board of Directors rates the CEO Exceeds Expectations.