Group Urges Tenet to Split Top 2 Jobs

Times Staff Writer

A major labor group proposed Thursday that troubled Tenet Healthcare Corp., the second-biggest U.S. hospital chain, split the jobs of chairman and chief executive, now held by Jeffrey Barbakow.

The American Federation of State, County and Municipal Employees Pension Plan, which owns less than 1% of Tenet’s stock, alleges that the hospital operator’s management is responsible for the recent loss of $17 billion in market value at the Santa Barbara-based company.

Tenet’s shares have declined 68% since October as the federal government launched several investigations. One probe centers on whether the company collected unusually large Medicare reimbursement payments, allegations the company disputes.

Tenet, the state’s largest operator of hospitals, with 40 locations in California, also is in the midst of other federal probes into whether doctors at a Northern California hospital performed unnecessary surgeries and whether Tenet violated doctor recruiting laws at a hospital in San Diego.


“We believe these problems are a result of inadequate monitoring and control at the highest levels of the company,” said Gerald W. McEntee, chairman of the pension plan at AFSCME, which represents 1.3 million employees. About 3,000 AFSCME members, including nurses, are Tenet employees, he said.

Last fall, when the company’s problems came to light, Barbakow offered his resignation to Tenet’s board, but the offer was rejected.

A decade ago, Barbakow was hired to restore the company after a scandal involving its psychiatric hospitals.

Tenet spokesman Harry Anderson said the company received a copy of the AFSCME proposal Thursday. He said a committee that considers shareholder proposals would evaluate it when it meets next month. “We’re going to carefully consider it,” he said.


“We’re seeing a lot of shareholder proposals,” said Darren Lehrich, an analyst with Suntrust Robinson Humphrey in New York. “It’s consistent with the issues this company is facing.”

Tenet’s shares fell 20 cents Thursday to $16.50 in New York Stock Exchange trading.