Major Union Supports Tenet in Proxy Fight
Hospital operator Tenet Healthcare Corp. won support Wednesday of the largest public employees union in management’s fight to turn back a shareholder proxy challenge.
The American Federation of State, County and Municipal Employees said it sent a letter to large institutional shareholders urging them to back Tenet’s three director nominees in voting that will culminate with Tenet’s annual meeting Oct. 11.
Shareholders led by Florida physician and businessman M. Lee Pearce are trying to oust Chief Executive Jeffrey Barbakow and two of the other nine board members. The shareholders group has accused the Santa Barbara-based company of spending too much on executive pay and not boosting profit enough.
“A number of the things the dissident slate is saying make sense,” said AFSCME spokesman Michael Zucker. “The problem is, we don’t believe in the dissident slate. We see them as extremely self-interested.”
Zucker said Pearce has sued Tenet over a real estate dispute in Florida and is chairman of Leap Technology Inc., an Internet company AFSCME said competes with Tenet unit Broadlane Inc.
The union said pension funds in which its members participate own 6.5 million shares of Tenet stock, or about 2% of outstanding shares.
On Tuesday, the California Public Employees Retirement System said it backs Pearce’s proxy challenge. CalPERS, the largest public pension fund in the nation, owns about 1.8 million shares of Tenet stock.
Shares of Tenet closed up 50 cents at $36.06 on the New York Stock Exchange.
Of AFSCME’s letter, Michael Gallagher, a spokesman for Pearce’s Tenet Shareholder Committee, said: “They must have gotten this from the company, because it’s filled with inaccuracies and red herrings.”
Leap is a shell company with an investment in AskRed.com, a medical-diagnostic software and chronic disease management company that doesn’t compete with Broadlane, an online medical-supply marketplace, Gallagher said.
Tenet spokesman Harry Anderson declined to comment.
Tenet owns 110 hospitals in 17 states.
