DALLAS--(BUSINESS WIRE)--Tenet Healthcare Corporation (NYSE: THC) today announced that its Board
of Directors has taken a series of actions to strengthen the Company's
corporate governance. The initiatives follow the Board’s ongoing review
of evolving corporate governance practices and investor preferences, as
a result of extensive discussions with many of its shareholders. The
initiatives include:
-
Modifying the Company’s bylaws to reduce the threshold required for
shareholders to request a special meeting to 25% of outstanding shares;
-
Terminating the short-term NOL shareholder rights plan effective as of
the close of business on March 5, 2018; and
-
Eliminating the Executive Committee as a standing committee of the
Board.
Ronald A. Rittenmeyer, executive chairman and CEO, said, “The Board of
Directors and management have spent considerable time in recent weeks
engaging with shareholders representing a majority of our outstanding
stock and we received constructive input regarding Tenet and our
objective to lead with best corporate governance practices. We believe
the actions which we are taking today demonstrate our continued
commitment to being responsive in a timely manner to shareholder
feedback and to implementing measures that increase transparency and
accountability. We believe that regularly reviewing our corporate
governance and robust engagement with our shareholders supports our
efforts to drive long-term value.”
Special Meeting Bylaw Amendments
The Tenet Board approved an amendment to the Company’s bylaws that
includes the reduction of the threshold required for shareholders to
call a special meeting to 25% of the outstanding common stock. The new
threshold was determined based on specific shareholder feedback and was
considered to be appropriate based on the concentration within Tenet’s
existing shareholder base. Prior to this amendment, the threshold to
call a special meeting was a majority of the outstanding common stock.
In connection with this bylaw amendment, the Board also approved an
amendment that shortens the period prior to the annual meeting to 90
days during which the Company is not obligated to call a special
meeting, as well as shortens the period following a shareholder meeting
during which the Company is not obligated to call a special meeting for
a “similar item” of shareholder business to 30 days. These actions
materially enhance the ability of shareholders to take action apart from
the annual meeting.
Shareholder Rights Plan Termination
Tenet’s Board has approved the termination of the short-term shareholder
rights plan that the Company implemented on August 31, 2017 designed to
protect the Company’s income tax net operating loss carryforwards
(“NOLs”), effective as of the close of business on March 5, 2018. The
Board made this decision based upon the reduced value of the NOL
shareholder rights plan following recent tax law changes and an increase
in the Company’s stock price since the NOL shareholder rights plan was
adopted, as well as shareholder feedback. The rights plan was previously
scheduled to expire following the conclusion of Tenet’s 2018 annual
meeting.
Executive Committee
The Board has approved the elimination of the Executive Committee as a
standing committee of the Board. The Executive Committee had been
responsible for exercising the powers of the Board in the management of
Tenet's business and affairs when the Board was not in session. The
decision to eliminate the Executive Committee, which has rarely been
utilized in the past decade, underscores Tenet’s commitment to a full,
deliberative Board process.
Progress on Key Initiatives
In addition to the shareholder-friendly actions announced today, Tenet
has been operating with urgency and has taken substantial steps to
enhance its corporate governance and operations, including over the past
few months:
-
Appointing a new chief executive officer and executive chairman;
-
Increasing cost reduction initiatives to $250 million of annualized
run-rate savings by the end of 2018;
-
Initiating a strategic review to explore the potential sale of Conifer
Health Solutions;
-
Divesting non-core hospital assets; and
-
Commencing a process to refresh the Board, including the appointment
of three new independent Directors in 2017.
Mr. Rittenmeyer emphasized, “Tenet is undergoing significant change and
we are building a culture of accountability focused on delivering
results and enhancing returns for our shareholders. We are making
progress on our key initiatives and are confident that the actions
underway will position Tenet as a stronger leader in healthcare
delivery.”
Additional information regarding Tenet’s corporate governance, including
the enhancements announced today, will be available on the Company's
website and in a Form 8-K to be filed with the Securities and Exchange
Commission.
About Tenet Healthcare
Tenet Healthcare Corporation is a diversified healthcare services
company with 115,000 employees united around a common mission: to help
people live happier, healthier lives. Through its subsidiaries,
partnerships and joint ventures, including United Surgical Partners
International, the Company operates general acute care and specialty
hospitals, ambulatory surgery centers, urgent care centers and other
outpatient facilities in the United States and the United Kingdom.
Tenet’s Conifer Health Solutions subsidiary provides technology-enabled
performance improvement and health management solutions to hospitals,
health systems, integrated delivery networks, physician groups,
self-insured organizations and health plans. For more information,
please visit www.tenethealth.com.
The terms "THC", "Tenet Healthcare Corporation", "the company", "we",
"us" or "our" refer to Tenet Healthcare Corporation or one or more of
its subsidiaries or affiliates as applicable.
This release contains “forward-looking statements” - that is, statements
that relate to future, not past, events. In this context,
forward-looking statements often address our expected future business
and financial performance and financial condition, and often contain
words such as “expect,” “assume,” “anticipate,” “estimate,” “intend,”
“plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements
by their nature address matters that are, to different degrees,
uncertain. Particular uncertainties that could cause our actual results
to be materially different than those expressed in our forward-looking
statements include, but are not limited to, the factors disclosed under
“Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the
year ended December 31, 2017, and subsequent Form 10-Q filings and other
filings with the Securities and Exchange Commission.
Additional Information and Where to Find It
The Company intends to file a proxy statement and White proxy card with
the U.S. Securities and Exchange Commission (the “SEC”) with respect to
the Company’s 2018 Annual Meeting of Shareholders. THE COMPANY’S
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT,
THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. The Company’s shareholders will be able to obtain any proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by the Company with the SEC free of charge at the
SEC’s website at www.sec.gov.
Copies will also be available free of charge at the Company’s website at www.tenethealth.com.
Certain Information Regarding Participants
The Company, its directors and certain of its executive officers may be
deemed to be participants in the solicitation of proxies from the
Company’s shareholders in connection with the matters to be considered
at the Company’s 2018 Annual Meeting of Shareholders. Information about
the Company’s directors and executive officers is available in the
Company’s proxy statement filed with the SEC on March 24, 2017 with
respect to the Company’s 2017 Annual Meeting of Shareholders and, with
respect to directors and executive officers appointed following such
date, in certain of the Company’s Current Reports on Form 8-K filed with
the SEC subsequent to the date of such proxy statement. To the extent
holdings of the Company’s securities by such directors or executive
officers have changed since the amounts printed in the proxy statement,
such changes have been or will be reflected on Initial Statements of
Beneficial Ownership on Form 3 or Statements of Changes in Beneficial
Ownership on Form 4 filed with the SEC. Additional information regarding
the identity of potential participants, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in the
proxy statement and other materials to be filed with the SEC in
connection with the Company’s 2018 Annual Meeting of Shareholders.
Tenet uses its company website to provide important information to
investors about the company including the posting of important
announcements regarding financial performance and corporate developments.
