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Teamsters Urge Shareholders to Vote No on Tenet CEO Pay Package

Group pushes for the rejection of $24 Million CEO Pay Package at the company's annual meeting.

Tenet Healthcare is coming under increased scrutiny as the company furloughs 10 percent of the workforce during the COVID-19 pandemic. The International Brotherhood of Teamsters, who are both employed by Tenet and whose pension and benefit funds invest in the company, are urging shareholders to reject the $24 pay package that includes stock and salary at the annual meeting on May 28.

With elective surgeries put on hold, Tenet furloughed 10 percent of their employees. The company operates 65 hospitals and more than 500 ambulatory surgery centers around the country. But in a letter to shareholders, Teamsters General Secretary-Treasurer Ken Hall says the group wants greater pay accountability. The letter cites employment extensions for Rittenmeyer worth $42 million since he joined the company less than three years ago, as well as $16 million in sign on grants and long term incentive for COO Saum Sutaria. “Tenet has quite perversely, made its two most senior executives the least exposed to corporate performance,” the letter reads. 

It goes on to list exit arrangements with past executives and a lack of accountability for senior executives as other reasons to reject the arrangement at the meeting. Tenet’s CEO to worker pay ratio is 452:1 based on CEO Rittenmeyer’s $24.3 million in compensation is 2019, which “could not be worse for a publicly-traded hospital chain amid the current pandemic,” Hall says in the letter. Rittenmeyer’s pay rose by $10 million in 2019 as the stock price increased 112 percent prior to the pandemic, The Dallas Morning News reports.

“It should be clear that the very culture of accountability that CEO Rittenmeyer claims to be instilling is missing in the compensation structure of the two most senior executives. CEO Rittenmeyer’s decision to give up 50 percent of his base salary (circa $400,000) for three months is a gesture towards shared sacrifice. However, it is only a gesture and one that is cushioned by the board’s recent decision to boost CEO Rittenmeyer’s future annual base salary. Gestures are no substitute for comprehensive pay reform that matches executive pay with performance,” Hall said vie release.

“We are engaged in a continuing dialogue with our shareholders on all aspects of what it takes to maintain Tenet’s position as a leader in healthcare. Recently, those discussions have centered on the extraordinary efforts being made across the organization to respond to the ongoing public health emergency,” Tenet responded via statement. “Once we are through this crisis we expect the main topic of shareholder conversations will be the management team’s success in turning Tenet around and the implementation of the Company’s long-term strategic goals.”

Read the entire Teamster’s letter here.

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