The executive hired to fix eHealth Ontario after a spending scandal is leaving with a $406,250 golden handshake, the Star has learned.

Despite previous controversies over performance bonuses for staff at the electronic health records agency during a time of restraint, Greg Reed’s surprise departure this fall will be a lucrative one.

The chief executive — who two years ago was forced to cancel pay hikes and bonuses for employees that were later reinstated at a cost of $7.16 million after workers sued — earned $325,000 a year in the post.

“He’s still very much running the day-to-day operations,” said eHealth spokesman Rob Mitchell, who confirmed the severance payment Monday.

It includes extended employee benefits as per Reed’s contract approved by former premier Dalton McGuinty’s cabinet in 2010.

“He’s resigned and tendered his resignation for Oct. 1,” Mitchell added, declining further comment on the departure that comes six months before Reed’s four-year contract was to expire.

Reed, who became an ambassador for the rehabilitation of eHealth and its mission, could not be reached for comment.

A source said the bonus debacle following a class-action lawsuit from staff that was settled in January “had become a distraction.”

Three sources said Reed was also irritated that political pressure stemming from the spending scandal — where consultants who were paid up to $3,000 a day expensed tea and cookies to taxpayers — forced him to return his own performance bonuses, including $81,250 approved by the board last year.

A senior government source said “of course” Reed was not pleased about giving up the payouts.

“He was very irritated about it,” said another insider.

Health Minister Deb Matthews credited Reed for “working hard” to overcome the distractions of the spending scandal and pushing eHealth closer to a goal of having e-records in place by 2015.

“He gave his bonuses back. That’s fantastic leadership,” added Matthews, who in 2011 ordered Reed and senior eHealth management to rethink merit raises and bonuses for hundreds of employees four months before a provincial election.

That dressing-down followed a Star story detailing how more than 600 eHealth employees were getting merit raises of 1.9 per cent and/or bonuses averaging 7.8 per cent despite a push for two-year wage freezes in the 2010 budget from then-finance minister Dwight Duncan.

“In eHealth, it’s the optics,” said one source, who noted executives at other government agencies still took performance bonuses.

The delay in Reed’s departure will allow Matthews and the eHealth board to find a replacement to guide the agency through its next stage of operating an e-records system instead of building one.

“Between now and October, I will be working to help define that transition and ensure a smooth handoff to my successor,” Reed said in a recent email to staff.

He boasted “more than 70 per cent of Ontarians now have an electronic health record” and credited employees for improving eHealth after a scathing 2009 report from Ontario’s auditor general. That report found Progressive Conservative and Liberal governments spent $1 billion on electronic health records without getting a full system in place.

Loading... Loading... Loading... Loading... Loading... Loading...

“I owe a debt of gratitude to all of you for your professionalism, passion and dedication as we’ve faced many challenges together,” Reed wrote.

His departure is not the only high-profile one in the health field. The Ontario Hospital Association and chief executive Pat Campbell parted company last week.

“She is no longer at the organization,” said OHA spokesman Chris McPherson.