Tenet Discloses Executives’ Salaries and Directors’ Departures
Santa Barbara-based Tenet Healthcare, the nation's second-largest for-profit hospital chain, disclosed Monday in a Securities and Exchange Commission filing that former CEO Jeffrey Barbakow was paid $1.3 million as part of a severance package, the Wall Street Journal reports. The severance payment Barbakow received in 2003 was roughly equal to his annual salary when he resigned. He was also given $585,231 in pro-rated salary for 2003 and $59,666 for automobile use (Rundle, Wall Street Journal, 4/6). Barbakow resigned as CEO in May 2003 as the company was experiencing difficulties after the federal government launched a series of investigations into the company's billing practices (California Healthline, 5/28/03). According to the Journal, Barbakow's compensation has been "a lightening rod for criticism of Tenet" since the company's "troubles emerged in 2002." Earlier in 2002, Barbakow had made $111 million from exercising stock options and from the sale of underlying stock when Tenet's stock price was high (Wall Street Journal, 4/6). Tenet also disclosed that Barbakow's successor, Trevor Fetter, was paid $6.12 million in 2003 for his role as CEO. Fetter received a salary of $848,539, a bonus of $262,500 and additional compensation of $1.28 million, mainly a relocation reimbursement. Fetter also received $3.73 million in restricted stock and an option to purchase 350,000 company shares at $14.98 per share by Sept. 15, 2013 (Hellickson, Bloomberg/Orange County Register, 4/6).
In related news, Tenet announced in the SEC filing that a director has resigned from its board and that two other directors will step down in May. Tenet director Robert Nakasone resigned March 22, and directors Lawrence Biondi and Sanford Cloud will not stand for re-election during the company's annual stockholder's meeting on May 6 (AP/Orange County Register, 4/6). Chair Edward Kangas said that Biondi and Cloud had made the choice "to focus their energies on other endeavors." After the departures, Tenet's 11-member board will be reduced to eight, but Tenet continues to recruit new directors, according to a company spokesperson, the Journal reports (Wall Street Journal, 4/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.