Tenet Selects Insider as CEO
Santa Barbara-based Tenet Healthcare Corp. on Tuesday tapped Trevor Fetter, a longtime company insider, to head the nation’s second-largest hospital chain.
Fetter, 43, was named chief executive and a director, becoming the only member of management to serve on the company’s 10-person board.
A former chief financial officer at Tenet who rejoined the firm last fall, Fetter had been acting chief executive since former CEO Jeffrey A. Barbakow resigned in May.
Tenet, California’s largest hospital chain, has seen its stock decline about 70% since government investigations of the company were launched nearly a year ago because it received an unusually large share of special Medicare payments.
Although Fetter’s appointment removed the uncertainty of who would run the company, analysts said there was disappointment on the part of some who had hoped an outsider would be named.
“A number of investors were hoping for a real changing of the guard,” said Andreas Dirnagel, health care analyst with Harris Nesbitt Gerard in New York. “They wanted a name that would galvanize Wall Street and create buzz and excitement. I don’t think Trevor carries that.”
Analysts said they were concerned that Fetter would be perceived as tainted by the firm’s scandals, because he joined the company in 1995 and worked closely with Barbakow before leaving in 2000 to run a Tenet spinoff. He returned to help the company after the probes were launched last fall.
“I jumped into this situation when the company was in trouble and formed a plan,” Fetter said in an interview Tuesday. “This is a job worth doing.”
Fetter said the best way to prove critics wrong would be “demonstrating progress and performance.”
Tenet’s board members defended Fetter’s selection.
“He was not there when the most difficult problems occurred. Trevor is a guy who is taking the lead in changing the culture and nature of this company,” said Edward A. Kangas, Tenet’s chairman.Kangas said the board had “checked out” Fetter with various government agencies to ensure he was not tainted by the recent scandals. The Tenet board met Thursday in Los Angeles and discussed three finalists for more than four hours, Kangas said. He declined to identify the other candidates.
In the four months since becoming acting CEO, Fetter has sought to strengthen the company’s finances through layoffs, consolidations and deals to shed 14 of Tenet’s 114 hospitals. Last month, Tenet reached a $54-million settlement with the Justice Department in a probe of whether doctors at Tenet’s hospital in Redding performed unnecessary heart surgeries. Fetter also is working to resolve other government investigations of the firm.
Fetter’s appointment was announced after the stock market closed. In New York Stock Exchange trading Tuesday, Tenet shares were up 13 cents to $15.11.
