Dissident Urges Tenet Management Change
The leader of a dissident shareholder group Wednesday demanded that Tenet Healthcare Corp.’s board of directors oust the company’s senior management.
In a nine-page letter to the board, M. Lee Pearce, a Florida doctor and chairman of a group that controls a tiny fraction of Tenet’s shares outstanding, also called for the appointment of a special committee of nonmanagement board members “to investigate past practices and review quality of care” issues.
“It is time for the Board of Tenet Healthcare Corporation to stand up and take back the company from a management team that has neglected its duties,” wrote Pearce, who two years ago led a failed effort to oust Chairman and Chief Executive Jeffrey C. Barbakow and three other directors of the Santa Barbara-based company.
Pearce said Tenet’s latest woes, including federal inquiries into the company’s billing practices, showed that his group had taken the right stance back in October 2000.
Tenet spokesman Harry Anderson accused Pearce of piling on, saying: “Dr. Pearce is late coming to this party, and his rhetoric doesn’t seem to have anything new in it. Our board, however, will seriously consider his suggestions.”
In 2000, Pearce’s group owned directly and through affiliates about 250,000 shares of Tenet stock. That has since dropped to about 25,000 shares, according to a spokesman for the group. In all, Tenet has about 450 million shares outstanding.
Pearce’s comments surfaced as Tenet’s board announced it has authorized the repurchase of 16.3 million of the company’s shares, which have lost two-thirds of their value in the last two months. Tenet announced earlier that it was buying back 13.7 million shares.
Tenet’s stock closed down 26 cents at $17.30 on the New York Stock Exchange, but rose to $17.60 in after-hours trading.
Separately on Wednesday, state Senate President Pro Tem John Burton (D-San Francisco) called for an investigation into allegations that Tenet overbilled for workers’ compensation cases.
The company said it hadn’t reviewed Burton’s remarks and couldn’t comment.
Today, the Service Employees International Union and others are set to hold a news conference to condemn Tenet’s nurse-staffing practices. The company said the claims had no merit.
