Mental health giant’s leader offers generous bonus to address federal investigation

Last year presented significant challenges for Acadia Healthcare, one of the nation’s leading providers of mental health services.

A New York Times investigation in September revealed that multiple federal agencies were looking into accusations of Acadia unlawfully detaining patients in mental health hospitals. This led to a sharp decline in Acadia’s stock value and rattled investors.

Despite these troubles, Acadia’s CEO, Christopher Hunter, benefitted from the situation. As indicated in the recent financial report, he received a $1.8 million bonus from the board to deal with the “unprecedented government inquiries.” This bonus was on top of his regular compensation, exceeding $7 million in 2024.

Other top executives at Acadia, including the CFO and Legal Advisor, also received substantial bonuses, with the COO promised a bonus as well. These bonuses were given to prevent key leaders from leaving before the investigation was concluded, according to Acadia.

The board of directors at Acadia believed that retaining the current leadership team was in the best interest of the company, its patients, and communities. They emphasized the use of peer market data for evaluating performance and benchmarking.

The Times investigation uncovered that Acadia had been holding patients against their will to maximize insurance payments. This practice had started before Hunter took over as CEO in April 2022 but continued under his leadership.

Following the allegations, Acadia stated that they would vehemently deny fraud and cooperate with the investigation. Hunter assured investors that the claims of holding patients longer than necessary were false and contradicted their commitment to patient care.

After the investigation was initiated, Acadia disclosed that various government agencies, including the Department of Justice and the Securities and Exchange Commission, were investigating the matter. Additionally, shareholders filed a class action lawsuit against the company, accusing them of withholding information from investors.

Issues were also uncovered in other areas of Acadia, such as a methadone clinic overbilling the government for services not rendered. Inadequate staffing levels at one of the company’s women’s facilities led to tragic incidents, as reported by The Times.

Since September, Acadia’s market value has plummeted by approximately $5 billion, now valued at around $2 billion.

Hunter’s compensation is tied to Acadia’s stock performance, but the company’s stock decline in 2024 caused him to miss his targets. Critics, like Sarah Anderson from the Institute of Policy Research, argue that linking compensation to stock prices can incentivize risky behavior and undermine performance.