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SCHEDULE 14A INFORMATION
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EXCHANGE ACT OF 1934
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TENET HEALTHCARE CORPORATION
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(Name of Registrant as Specified in Its Charter)
TENET SHAREHOLDER COMMITTEE, L.L.C.
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THE TENET SHAREHOLDER COMMITTEE, L.L.C.
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Contact: Josh Pekarsky
Sarah Zitter Milstein
Kekst and Company
(212) 521-4800
FOR IMMEDIATE RELEASE
ISS RECOMMENDS TENET SHAREHOLDERS VOTE TO ELECT
DISSIDENT SLATE OF DIRECTORS
-- CITES TENET BOARD FOR "BRAZEN INDIFFERENCE TOWARDS SHAREHOLDER DEMANDS" --
-- BROADLANE AFFAIR "GALVANIZES OUR CONVICTION," ISS SAYS --
NEW YORK, NY, SEPTEMBER 28, 2000 - The Tenet Shareholder Committee announced
today that Institutional Shareholder Services (ISS), the nation's leading
institutional shareholder advisory firm and provider of corporate governance
services, has recommended that shareholders of Tenet Healthcare Corporation
(NYSE: THC) vote FOR the Tenet Shareholder Committee's slate of nominees at
Tenet's annual meeting on October 11, 2000.
"We believe that shareholders should support the dissident nominees," ISS wrote
in its report. "The incumbent board has shown a brazen indifference toward
shareholder demands over the last few years. We also harbor concerns about
senior management's equity participation in Tenet's Broadlane joint venture."
ISS issued its report after considering the facts and holding extensive meetings
with both Dr. M. Lee Pearce, Chairman of the Tenet Shareholder Committee ("the
Committee"), and with Jeffrey C. Barbakow, Tenet's Chairman and Chief Executive
Officer, and Christi Sulzbach, Tenet's General Counsel.
The ISS recommendation comes in addition to a decision by CalPERS, the nation's
largest public pension plan, to vote its shares in favor of the Committee's
slate of directors.
ISS was particularly biting in its commentary on Tenet's corporate governance
philosophy: "Management...believes that varying industry and regulatory forces
demand that directors take a longer-term view of company strategy and that a
staggered board provides the continuity to achieve that end. This paternalistic
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argument - that shareholders somehow must be saved from themselves - does not
hold water in today's investment and corporate governance landscape. Effective
corporate governance depends upon the board being accountable to
shareholders...and we believe the Tenet board has failed on this account."
As a reflection of this philosophy, ISS cited Tenet's conduct after shareholders
voted at last year's annual meeting to rescind its poison pill. The company
abided by the letter of that vote, but violated its spirit in that, to quote
ISS, "no bylaw or charter provision was implemented so that the board could not
adopt a new pill without shareholder approval." In the Committee's view, this is
corporate arrogance, not corporate governance.
ISS also took Tenet to task over management's personal investment in Broadlane:
"ISS takes a dim view of the participation of Tenet officers in the stock sale.
We believe that Tenet officers should be sufficiently incentivized by their
participation in the Tenet equity incentive programs currently in place. Should
the Broadlane venture prove to be successful then the economic benefits should
flow through to Tenet, benefiting shareholders and officers alike. This
transaction galvanizes our conviction that the Tenet board could benefit from
directors who may be more critical of such actions."
"ISS's verdict makes it perfectly clear that fundamental change is needed on
Tenet's board," said Dr. Pearce. "Shareholders should ask themselves whether
Tenet's existing directors-- most of whom own little or no equity stake, a
majority of whom have financial entanglements with Tenet, all of whom are
dismissive of shareholder mandates, and all of whom are unequivocally out of
step with modern corporate governance--are up to the task. We believe that the
answer is a resounding "NO," and that Tenet desperately needs respected
independent directors who understand healthcare, who care about shareholder
rights, and who, if elected, would each have a substantial personal equity stake
in the company."
Dr. Pearce continued, "We are particularly gratified that ISS and CalPERS saw
the real economic and corporate governance issues in this campaign and were not
distracted by the transparent misinformation campaign, riddled with red
herrings, inaccuracies and character assassination, in which Tenet's management
has engaged."
"By supporting our slate of nominees ISS, one of the most respected voices in
the nation on corporate governance issues, and CalPERS, the nation's largest
public pension fund and a pioneer in bringing good governance into the
mainstream of corporate America, have joined our call for change, accountability
and new blood at Tenet."
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