A dissident shareholder group said Monday that it would not launch another proxy fight for control of Tenet Healthcare Corp.'s board at its annual meeting in July, but the group’s leader continued to call for the ouster of Tenet’s senior management.
M. Lee Pearce, a Florida-based physician and leader of the Tenet Shareholder Committee, said he decided against a proxy fight after a meeting Friday in New York with Edward Kangas, former chairman and chief executive of Deloitte Touche Tohmatsu. Kangas recently was named one of four new independent members of Tenet’s board.
“Since the board now seems to be focusing on reform, we do not want a proxy contest to become a distraction,” Pearce said.
Even so, Pearce called for an end to Tenet’s stock repurchases and said that the company should move its headquarters from Santa Barbara to Dallas to “remove an extra layer of bureaucracy, reduce expenses and improve morale.”
In November 2000, Pearce’s committee lost an attempt to oust then-Tenet Chairman and CEO Jeffrey Barbakow and three other Tenet board members. Pearce’s group renewed criticisms last fall when Tenet shares took a precipitous drop after government probes were launched into some of the company’s hospitals and practices, including its Medicare billings.
In April, Tenet announced Barbakow’s resignation as chairman and director. He remains chief executive. Tenet said Monday it was pleased that Pearce would not pursue a proxy fight. The company reiterated its commitment to stock repurchases. Pearce’s group controls just 25,000 Tenet shares, down from about 250,000 shares in 2000.
Tenet shares fell 12 cents to $15.96 on the New York Stock Exchange.