Tenet Healthcare Corporation (THC) Earnings Call Transcript & Summary

Good morning. Welcome to the 2020 Annual Meeting of Shareholders of the Tenet Healthcare Corporation. I am Ron Rittenmeyer, Executive Chairman and Chief Executive Officer of Tenet. And I hereby call this meeting to order. We have 4 items of business on today's agenda, which I will ask Audrey Andrews, our Corporate Secretary, to present in a moment. We are holding this meeting virtually via live audio webcast due to the public health impact of the COVID-19 pandemic. The agenda and rules of conduct for this meeting are available on the meeting website and are intended to ensure fairness to all shareholders in attendance and an orderly meeting. We ask that participants abide by these rules, and we thank you for your cooperation. If you have any questions related to the proposals being presented today, please submit them in writing on the meeting website as soon as possible. The polls are now open. If there are any shareholders present at this meeting virtually, who would like to vote, please do so using the meeting website. If you have already voted prior to this meeting, you do not need to vote now, unless you wish to change your vote. We will close the polls on all matters immediately after presentation and discussion of today's proposals. Before we begin, I would like to introduce our Director nominees, who are also in attendance virtually today: Senator Bob Kerrey, our Lead Director; General, Lloyd Austin; James Bierman; Richard Fisher; Meg FitzGerald; Chris Lynch; Richard Mark; Tammy Romo; and Dr. Nadja West. Next, I would like to introduce [ Jenny Herlok ], representative of Deloitte & Touche, our independent registered public accountants, who is also in attendance virtually today. With that, Audrey, please proceed with the business portion of the meeting.

Thank you, Ron. Paul Ramirez, the Inspector of Election, for this meeting has confirmed that notice of this meeting was duly given, and we have a quorum of shareholders represented here today for purposes of conducting the 2020 Annual Meeting of Shareholders. As set forth in the company's proxy statement, there are 4 proposals on the agenda at today's meeting. First, the election of 10 directors. Our Board recommends voting for each of the director nominees included in the first proposal. Second, the advisory approval of the company's executive compensation. Our Board recommends voting for this proposal. Third, ratification of the selection of Deloitte & Touche as the company's independent registered public accountants for 2020. Our Board recommends voting for this proposal. Fourth and finally, a shareholder proposal regarding an independent Board chairman that will be presented by Michael Pryce-Jones on behalf of the International Brotherhood of Teamsters General Fund. Our Board has considered the shareholder proposal and recommends voting against this proposal. We will now request that Mr. Pryce-Jones' line be unmuted, so that he may present the proposal.

Yes. I'm Michael Pryce-Jones, representing the International Brotherhood of Teamsters. Our proposal urges the Board to adopt a policy of having an independent chair, who has not previously served as an executive of the company, which is obviously currently not the case with Mr. Rittenmeyer serving as both Chair and CEO. As we have communicated, we are profoundly concerned that the current structure of the Board and CEO, Rittenmeyer's, compensation fails to provide the accountability that is essential, even in the good times, let alone amid the present difficulty. Compensation is clearly a concern to investors with leading property advisory firm, Glass Lewis, joining us and recommending a vote against the say-on-pay, and ISS providing a very particular account of the CEO pay structure. The company has also faced in recent weeks considerable media scrutiny over its pay practices, even managing to stand out from the crowd of other companies that have simultaneously furloughed workers, taken bailout and continued to roll their top executives. This is troubling, but even less palatable to shareholders, perhaps obtaining reports from the frontline itself of nurses anxious over their safety, a lack of PPE, allegations of retaliation and more broadly the challenges employees have unnecessarily faced from the company's aggressive cost-cutting. Particularly concerning here is that these reports come despite a new culture of accountability at Tenant and the profoundly troubling removal of patient care criteria from top executive pay. We hope all the scrutiny can be the cause for critical reflection, but there remains an unjustifiable gap in the way the company treats its frontline workers and its top executive. There are certainly some very talented directors on this Board, but we think their ability to ensure that management is appropriately prioritizing the safety and well-being of its employees and those of its patients will be greatly enhanced by the appointment of an independent chair. Thank you.

Thank you, Mr. Pryce-Jones for your presentation. And do we have any questions regarding the proposals? There being no questions, that concludes our discussion of the proposals properly before this annual meeting. I will now pause briefly to allow any shareholders to submit final votes through the meeting website. [Voting]

Mr. Chairman, the polls are now closed with respect to all proposals, and the business portion of our meeting is complete.

Thank you, Audrey. The meeting is adjourned, and we will now open it for any general questions. Audrey, are there any questions from shareholders at this time?

There being no further questions, I am pleased to announce that the preliminary voting results indicate that all proposals other than the shareholder proposal submitted by the International Brotherhood of Teamsters General Fund have passed. Final voting results will be disclosed in a Form 8-K that will be filed with the SEC within 4 business days.

That concludes the 2020 Annual Meeting of Shareholders. I want to thank you for your attendance and your support. Have a great day.