Community Health Systems, Inc. (CYH) Earnings Call Transcript & Summary

Good morning. I'm Wayne Smith, Executive Chairman of the Board of Directors of Community Health Systems, Inc. It's my pleasure to call to order this 2021 Annual Meeting of Stockholders of Community Health Systems, Inc. On behalf of your Board of Directors, I welcome each of you. Before we start, I want to say how grateful we are to our employees and local staff across the organization who continue to demonstrate our true purpose of helping people, get well and live healthier, by providing safe, high-quality care for their communities. This has never been more apparent than has been over the last year or so as we have met the challenges of COVID-19 pandemic head on, thank you all very much. Now to turn to the business of the annual meeting. In light of the continuing uncertainty surrounding COVID-19 pandemic for the safety of all of our stockholders and personnel, our annual meeting is being held in a virtual-only format again this year. While we do not expect any technical difficulties today, in the event we lose the audio or the website connection or are not able to connect quickly and resolve the issue, please refer to the Investor Relations page on the company's website for updates. In the event of a technical malfunction or other significant problem that disrupts the annual meeting, I may adjourn, recess or expedite the annual meeting or take such other action as determined to be appropriate in the circumstances. We will proceed by following the agenda provided on the web portal. The meeting will be conducted in accordance with the rules of conduct of the meeting, which are also available on the web portal. During the meeting today, the company may make forward-looking statements within the meaning of the federal securities law, which involve risks, assumptions and uncertainties. Although the company believes these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant regulatory, economic and competitive uncertainties and contingencies, which are difficult or impossible to predict accurately and may be beyond the control of the company. Accordingly, the company cannot give any assurance that its expectations will, in fact, occur and cautions that actual results may result materially from those in any forward-looking statements. A number of factors could cause the company's actual results and performance to differ materially from those expressed during the meeting. Please refer to the company's SEC filings for more detailed discussions of risks and uncertainties that could cause such differences. The company undertakes no obligation to revise or update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. During the business portion of the meeting, stockholders can submit questions in writing through the web portal consistent with the rules of conduct for the meeting. Following the adjournment of the business portion of the meeting, the company has a lot of time to address questions of a general business nature that are submitted by stockholders. [Operator Instructions] I will serve as the Chairman of the meeting, and I am joined by Tim Hingtgen, Director and Chief Executive Officer; Ben Fordham, Executive Vice President, General Counsel and Assistant Secretary of the company, and Mr. Fordham will serve as the Secretary of the meeting. Also joining us today is Terry Hardesty, a partner of Deloitte & Touche LLP, the company's independent public accountants. Ms. Hardesty will be available to address questions about Deloitte's services to the company during the time allotted for questions following the adjournment of the business portion of the meeting. Please let the minutes reflect that all members of the Board of Directors are in attendance. We will now move to the formal business of the meeting, after which we will adjourn, and I'll be glad to answer questions of general business -- of a general business nature that you may have about Community Health Systems. Mr. [ Frank ], representing Broadridge Financial Services, Inc. is in attendance with us and will serve as the inspector of elections today. He will determine the presence of a quorum, receive and tabulate all votes and determine results on all matters requiring a stockholder vote. Mr. Fordham will assist him with this function. A listing of all stockholders entitled to vote at this meeting is available for review on the web portal while the polls are open. The inspector of election and the secretary have presented me with evidence that notice of this meeting was properly given to all stockholders of record as of the close of business on the record date. Has the inspector of elections determined whether or not a quorum is present for the purposes of this meeting?

Mr. Chairman, I have determined that there are stockholders represented at this meeting in person or by proxy, holding common stock representing at least 81% of the eligible votes. This is sufficient for a quorum and for transacting the business of this meeting.

Thank you, inspector of elections. The inspector of election has determined that a quorum is present for the purpose of conducting business at this meeting. I declare that this meeting is legally convened and ready to transact business. All holders of the company's common stock as of the close of business, March 15, 2021, are entitled to vote on all business to come before the meeting, either in person or by proxy. We now move into the voting on the matters before this meeting. Motions and seconds will not be required for the proposals, which are listed in your proxy statement and on the agenda. I now declare the polls for the meeting to be open. A substantial majority of our outstanding shares have already been voted by proxy prior to the meeting. If you have previously voted your shares, no further action is needed. But if you still need to vote your shares or if you wish to change your vote, you may do so now by clicking on Vote Here, the button on the web portal. Number one. The first item of business on the agenda is the election of 11 directors. Each member of our Board of Directors stands for election annually. The nominees for Director are: John A. Clerico, Michael Dinkins, James S. Ely III, John A. Fry, Tim L. Hingtgen, Elizabeth T. Hirsch, Dr. William Norris Jennings, Dr. K. Ranga Krishnan, Julia B. North, Dr. James Williams and myself, Wayne Smith. Each of these individuals is recommended by the Governance and the Nominating Committee to serve on the Board of Directors and all our incumbents. The Secretary advises me that there are no nominations submitted by the stockholders in accordance with the bylaws prior to the meeting. Therefore, I declare the nominations closed. The next item of business is an advisory vote on compensation of the company's named executive officers as disclosed in the proxy statement. The Compensation Committee of the Board of Directors has established the compensation of the company's executive officers to align with industry standards while attracting and retaining qualified leadership. The next item of business is approved -- is the approval of the Community Health Systems Amendment and Restated 2009 Stock Option and Award Plan. Final item of business is the ratification of the appointment of Deloitte & Touche LLP as Community Health Systems' independent public accountants for the year ending December 31, 2021. All stockholders have submitted their proxies or ballots, and I'll now announce the polls for this meeting are closed. Will the inspector of elections please report the results of the vote.

Mr. Chairman, on the question of the election of the 11 nominated directors, Proposal 1, each of the director nominees received more votes for than votes against. Accordingly, each of Mr. Clerico, Mr. Dinkins, Mr. Ely, Mr. Fry, Mr. Hingtgen, Ms. Hirsch, Dr. Jennings, Dr. Krishnan, Ms. North, Mr. Smith and Dr. Williams, was elected by a majority of the votes cast to serve for a period of 1 year. On Proposal 2, the advisory vote on the compensation of the company's named executive officers. The current compensation arrangements received the affirmative vote of a majority of the shares entitled to vote. On Proposal 3, the amendment and restatement of the Community Health Systems, Inc. 2009 Stock Option and Award Plan, received the affirmative vote of a majority of the shares entitled to vote. On Proposal 4, the appointment of Deloitte & Touche LLP as the company's independent public accountants for the year ending December 31, 2021, has been ratified by a majority of the votes of the shares entitled to vote.

Thank you. The chair declares that each of the director nominees has been duly elected. The advisory vote on executive officer compensation has been approved. The amendment and restatement of Community Health Systems 2009 Stock Option Award Plan has been approved, and appointed by -- and the appointment of Deloitte & Touche LLP as independent public accountant for the fiscal year 2021 has been duly ratified. The final results of the stockholder vote will be available for stockholders to review on the current report on the Form 8-K, which will be filed with the Securities and Exchange Commission within 4 days following the meeting. I hereby direct the results of the voting to be incorporated into the minutes of this meeting. The business for which this meeting has been held is now complete, and I declare the meeting formally adjourned. At this time though, we will address any questions of a general business nature that have been submitted by our stockholders. Have any -- have we received any questions?

Mr. Chairman, there are no questions.

Thank you, Mr. Comeaux. There are no questions. This concludes the question-and-answer period for today. I have a question that -- no? I think that's the end of all this. Thank you all for joining us today, and have a good day.