Following months of occasionally tense negotiations, the University of Utah board of trustees on Thursday approved a new memorandum of understanding outlining operations, fundraising and governance of the Huntsman Cancer Institute in Salt Lake City.
The university agreed to pay $68 million to the institute, to be distributed in installments, in response to a yearslong dispute with the Huntsman family over the school’s obligation to support operational costs.
In return, the Huntsman Cancer Foundation recommitted to providing $120 million in new donations by 2025 and agreed to a detailed formula for how Huntsman Cancer Hospital revenues will be shared with the U. Health Care System and the Huntsman Cancer Institute.
(Leah Hogsten | The Salt Lake Tribune) Jon Huntsman, Sr. is all smiles after the signing of the memorandum. Officials at the University of Utah and Huntsman Cancer Institute have resolved a months-long dispute over management and finances of HCI. The university agreed to pay $68 million to the institute, to be distributed in installments. In return, the Huntsman Cancer Foundation recommitted to providing $120 million in new donations by 2025 and agreed to a detailed formula for how Huntsman Cancer Hospital revenues will be shared with the U. Health Care system and the Huntsman Cancer Institute.
“We’re ready to move forward,” said A. Lorris Betz, interim CEO of U. Health Care. “This was a negotiation. Negotiations result in some compromise.”
Details of the new agreement were not immediately available after the trustees’ vote but were released to members of the media Thursday afternoon. When asked for specifics, Betz responded that the legal and operational negotiations involve a complexity that is difficult to describe.
“You’ll be able to read it as soon as you get it,” Betz said.
The new memorandum preserves Huntsman Cancer Institute CEO Mary Beckerle’s direct reporting line to the university president. And the institute will continue to receive 50 percent of Huntsman Cancer Hospital revenue — with 25 percent remaining at the hospital and 25 percent awarded to U. Health Care — but applied to a more-detailed calculation for the hospital’s adjusted net income.
The university’s payment of $68 million to the institute will be made in addition to the regular revenue-sharing payments, according to the agreement.
(Leah Hogsten | The Salt Lake Tribune) l-r Peter Huntsman, CEO of the Huntsman Cancer Foundation gets a laugh from his parents Karen and Jon Huntsman, Sr. during his remarks. Officials at the University of Utah and Huntsman Cancer Institute have resolved a months-long dispute over management and finances of HCI. The university agreed to pay $68 million to the institute, to be distributed in installments. In return, the Huntsman Cancer Foundation recommitted to providing $120 million in new donations by 2025 and agreed to a detailed formula for how Huntsman Cancer Hospital revenues will be shared with the U. Health Care system and the Huntsman Cancer Institute.
Following Thursday’s 8-1 vote, in which vice-chairman Phillip Clinger dissented, U. President David Pershing read from a prepared statement thanking the Huntsman family and Jon Huntsman Sr. for their partnership with the university.
“We are gratified to have emerged from several months of discussion better positioned to bring together our shared resources, world-class talent and experience to fight cancer and care for our patients,” Pershing said.
Pershing’s complimentary tone followed several months of discord between the two groups, which became public after Beckerle’s abrupt firing in April.
(Francisco Kjolseth | Tribune file photo) Mary Beckerle, CEO of the Huntsman Cancer Institute.
She was later reinstated, followed by the resignations of both U. Health Care CEO Vivian Lee, who fired her, and Pershing, who had planned to retire but accelerated his timeline following the dispute with the Huntsman family.
Beckerle’s termination came during renegotiation of the memorandum of understanding, or MOU, between the U. and Huntsman Cancer Foundation. The Huntsman family had sought greater independence for the institute, particularly that Beckerle have the ability to hire and fire staff and report directly to Pershing instead of to Lee as CEO of U. Health Care.
Negotiations also were complicated by a growing disagreement over revenue sharing between the institute and university, with the Huntsmans contending that university administrators had failed to meet prior commitments to support the institute’s operational costs.
(Trent Nelson | Tribune file photo) Karen and Jon Huntsman, Sr, listen to speakers as the Huntsman Cancer Institute breaks ground on a new wing in Salt Lake City in 2014.
Emails obtained by The Tribune offered confirmation of those points of disagreement, as well as statements by Pershing that the university president sought “total control” of cancer-related programs at the U. and greater oversight of fundraising for the institute — traditionally the purview of the Huntsman Cancer Foundation.
“I mean so Mary [Beckerle] really works only for you,” Pershing wrote to Lee in February, “and we somehow also get control of the fundraising.”
Peter Huntsman, CEO of the Huntsman Cancer Foundation, confirmed Thursday that his organization had agreed to the terms of the new MOU. He said the university, foundation and institute can now return to a singular focus of eradicating cancer.
“I‘m very satisfied,” Huntsman said. “I think it puts our relationship back on track.”
Later Thursday, members of the Huntsman family were joined by Pershing, board of trustees chairman H. David Burton and Utah Gov. Gary Herbert for a celebration of the new memorandum with Huntsman Cancer Institute staff.
Jon Huntsman Sr. announced that in addition to the fundraising commitments in the agreement, the foundation would support the creation of 12 additional endowed U. faculty chairpersons.
“I want to thank you all, ladies and gentlemen,” Huntsman Sr. said. “Our job is to get rid of this disease and get rid of it forever.”
Peter Huntsman had previously said that his patience with university administrators was “wearing thin,” and that the Huntsman family and foundation were potentially open to resolving their concerns through litigation.
On Thursday, he joked that he inherited a lack of patience from his father, Huntsman Sr., but added that a protracted negotiation was not in the best interests of the institute’s staff and patients.
“I don’t think that anybody ever had a gun to somebody’s head or so forth,” Peter Huntsman said. “But we certainly wanted to get things resolved as quickly as possible.”
The U. board of trustees adopted the new MOU without debate, after two hours of closed-door discussions at the S.J. Quinney College of Law.
Clinger, vice-chairman of the U. board of trustees, declined to comment on his opposing vote on Thursday, saying that it would not serve any purpose to elaborate on his objections to the new MOU.
“All I would do is just stir the waters,” Clinger said. “Let‘s just let it drop.”
He added that he is hopeful the university can move forward and continue the Huntsmans’ vision for the cancer center.
“It is, in many ways, a very, very happy day,” Clinger said.
Kathy Wilets, spokeswoman for U. Health Sciences, said the new agreement effectively makes moot a review of the institute’s finances by FTI Consulting, which was commissioned by the university in the aftermath of Beckerle’s termination.
She said the private consultants produced information valuable for the negotiations, but would likely not go forward with preparating a final report, which was expected to be made public in the coming weeks.
“We got to an agreement before they had finalized their work,” Wilets said.
Editor’s note: Paul Huntsman, the son of Jon Huntsman Sr. and brother of Peter Huntsman, is the owner and publisher of The Salt Lake Tribune.
