The embattled CEO of eHealth Ontario Sarah Kramer will receive nearly $317,000 in compensation after leaving the crown organization.

The decision on Kramer's departure was mutual, said Steve Erwin, press secretary for Health Minister David Caplan.

Kramer, whose appointment as president and CEO of the agency was revoked Sunday, will receive the equivalent of 10 months' salary under an agreement reached with eHealth's board, officials confirmed.

That's less than what she was entitled to under her contract, which would have included 15 months' severance, an unspecified bonus and benefits, they said.

Caplan defended the compensation package Sunday as a necessary step to avoid any legal entanglements.

When former Hydro One CEO Eleanor Clitheroe was fired in 2002 amid allegations of lavish spending, she launched a $30-million lawsuit against the province, he pointed out.

"I can understand the difficulty in addressing it, but I think what I'm focused on is ensuring that we do get the corporation moving, get the momentum back on delivering the eHealth products and the infrastructure that are going to be important to transforming health care," he said.

Kramer has come under heavy fire from political opposition over the past couple of weeks. The Star reported yesterday Kramer's fate was unclear after new revelations concerning her $114,000 bonus – which she received five months after starting her job as eHealth boss.

The revelations about the bonus, which comes on top of her $380,000 annual salary, were heaped on weeks of controversy over rich consultancy fees at the agency, executive perks and untendered contracts.

In a statement released today, Caplan said he was "acting immediately" on a request from the eHealth board of directors to revoke Kramer's appointment as president and CEO.

"This decision is an important step to restore public confidence in the agency and its mandate of modernizing our health care system," Caplan said in the statement.

Until a replacement is found, Ron Sapsford, deputy minister of health, will fill in as president and CEO.

Yesterday, in a letter to Caplan, the board said a change in leadership was needed in order for the organization to move forward.

"Both the board and Ms. Kramer feel that a change in leadership is required to restore public confidence in the organization's ability to move our important mandate forward," the letter stated.

But the province's opposition parties say it's too little, too late.

Opposition parties have repeatedly called for Caplan and Kramer's resignations, accusing Kramer and eHealth board chairman Alan Hudson of giving Liberal-friendly firms lucrative contracts without taking competitive bids.

Caplan "fumbled the ball" on eHealth and should be fired, said NDP Leader Andrea Horwath.

"We're glad she's gone," she said. "It took far too long to see the back of Ms. Kramer."

But awarding her a generous compensation package just adds insult to injury for taxpayers who've seen millions of dollars squandered in tough economic times, Howarth added.

"It's very apparent that she was removed for a reason, and I think that people will be outraged if they see yet another golden handshake," she said.

Progressive Conservative and former health minister Elizabeth Witmer also renewed her call for Caplan's resignation, saying Kramer's departure isn't enough to restore public confidence in the Ministry of Health.

The public is already seething over Kramer's $114,000 bonus, which is more than many even imagine earning in a year, she said.

"There has been misuse and abuse of public money – the minister refused to acknowledge that this was inappropriate," she said.

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"Now that she's going to receive a severance, they will be further outraged to see their hard-earned dollars going to anybody who has been involved in this type of flagrant abuse of taxpayer money."

The board recommended late Saturday that Kramer be removed – a decision Caplan said he was not involved in.

"Both the board and Ms. Kramer feel that a change in leadership is required to restore public confidence in the organization's ability to move our important mandate forward," Hudson said in a letter to Caplan.

"Therefore, Ms. Kramer has decided to leave the organization."

Deputy Health Minister Ron Sapsford will be the temporary CEO of eHealth, which was set up last fall.

EHealth was established after the first provincial agency tasked with creating electronic health records, Smart Systems for Health, spent about $650 million but failed to produce anything of value before it was quietly shut down.

Ontario's auditor general is looking into eHealth and is expected to report back to the government on his findings as early as the fall.

The eHealth scandal has dominated the last couple weeks of debate in the Legislature.

The provincial auditor general and PricewaterhouseCoopers are reviewing the agency.

Last week the Star reported:

- eHealth Ontario paid a consultant who submitted an invoice for eight hours of work in which she said she consulted herself, then followed up with questions for herself. Agency spokeswoman Deanna Allen said the bill contained a typo and that the consultant had consulted and followed up with a colleague, but acknowledged the invoice had been paid as filed.

- At least $2 million in untendered contracts were awarded by eHealth to long-time associates of agency chair Dr. Alan Hudson and CEO Kramer, according to Progressive Conservative MPPs. Allen said the eHealth board, not Hudson, awarded contracts before Kramer's arrival.

- An eHealth consultant billed for tea and a dessert square while earning $2,700 a day.

- Another consultant being paid $2,750 a day collected $75 a day for expenses. He has flown home to Edmonton 31 times in five months at a cost of nearly $21,000.