Tenet Healthcare Corp DEF 14A, filed Apr 12, 2024

About this DEF 14A

Tenet Healthcare Corp (THC)

DEF 14A 2024-04-12 For: 2024-05-22

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Added on June 12, 2026

Operational Excellence

Our results in 2023 demonstrate our focus on operational excellence. We advanced our high-acuity strategy in our hospital business, leveraging data and analytics to significantly reduce contract labor costs and effectively manage operating costs. We continue to achieve attractive margins across each of our businesses, driven by this operational efficiency.

Financial Performance

We delivered outstanding results across our portfolio in 2023. These results were driven by strong volume growth, pricing yield and disciplined operations that enabled us to manage operating costs in a challenging industry environment. Adjusted EBITDA margins remained strong due to our operational focus and effective execution.

Expanded Ambulatory Care

We added 30 ambulatory surgery centers to our portfolio through acquisitions and the opening of de novo facilities through a continued focus on business development. Many of these new centers specialize in higher-acuity services, including orthopedics, and represent attractive additions to our portfolio.

Refinanced and Retired Debt

During the year ended December 31, 2023, we retired approximately $1.345 billion aggregate principal amount of certain of our senior unsecured notes and senior secured first lien notes. These notes were retired using proceeds from the May 2023 sale of $1.35 billion aggregate principal amount of 6.750% senior secured first lien notes due 2031 and cash on hand.

Workforce Development

We delivered unprecedented reductions in contract labor spend allowing more of our own workforce to work directly with our patients. Our results were achieved by increasing our new graduate hiring pipeline through nursing school relationships, strengthening our internal clinical bench, and delivering facility level workforce targets. We introduced agile frontline staffing models to optimize utilization of skills from entry level to higher specialty competencies. We developed and executed a system-wide wholistic retention strategy that drove facility level accountability to execute leading practices, improve manager quality, and reduce turnover.

Clinical Quality and Patient Safety

We continue to execute our disciplined strategy to prevent life-threatening infections and injuries and deliver high-quality care to our patients. In 2023, we delivered notable improvements in the metrics we track for patient safety and quality care. Our commitment to quality is driving a strong patient experience and continued improvement.

Tenet Healthcare Corp filed this DEF 14A on April 12, 2024.

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Proxy Statement Summary			1

Proposal 1 - Election of Directors			6

Corporate Governance and Board Practices			23
Commitment to Sound Corporate Governance Policies and Practices			23
Board Leadership Structure			23
Board and Committee Organization and Responsibilities			24
Committees			25
Role of the Board and its Committees in Risk Oversight			29
ESG at Tenet			31
Policies on Ethics and Conduct			35
Certain Relationships and Related Person Transactions			35
Communications with the Board of Directors by Shareholders and Other Interested Parties			35

Director Compensation			36
2023 Director Compensation Table			37
Compensation Plans Applicable to Directors			37
Director Stock Ownership and Retention Requirements			38

Executive Officers			39

Securities Ownership			40
Securities Ownership of Management			40
Securities Ownership of Certain Shareholders			41

Compensation Discussion and Analysis			42
Overview			43
Detailed Description and Analysis			47

Human Resources Committee Report			57


Executive Compensation Tables			58
2023 Summary Compensation Table			58
Grants of Plan-Based Awards During 2023			60
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table			61
Outstanding Equity Awards			62
Option Exercises and Stock Vested			64
Pension Benefits			64
Nonqualified Deferred Compensation			66
Potential Payments Upon Termination or Change of Control			67

Pay Ratio Disclosure			73

Pay Versus Performance			74

Securities Authorized for Issuance Under Equity Compensation Plans			77
Equity Compensation Plan Information			77

Proposal 2 - Advisory Vote to Approve Executive Compensation			78

Audit Committee Report			79

Proposal 3 - Ratification of the Selection of Independent Registered Public Accountants			81

Proposal 4 - Shareholder Proposal – Report on Risk Mitigation Regarding State Restrictions for Emergency Abortions			82

Proposal 5 - Shareholder Proposal – Report on Plans to Integrate ESG Metrics Into Executive Compensation			84

General Information Regarding the Annual Meeting and Voting			86

Other Information			90

Appendix A: Non-GAAP Financial Measures			A-1



Proposal		Board’s Recommendation	Page

1	Election of 13 Director Nominees	Vote FOR Each Nominee	6

2	Advisory Approval of the Company’s Executive Compensation	Vote FOR	78

3	Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accountants for the Year Ending December 31, 2024	Vote FOR	81

4	Shareholder Proposal to Report on Risk Mitigation Regarding State Restrictions for Emergency Abortions	Vote AGAINST	82

5	Shareholder Proposal to Report on Plans to Integrate ESG Metrics Into Executive Compensation	Vote AGAINST	84


		Executive Leadership						Regulatory and Public Sector
		lllllllllllll 13						lllllllll 9
		Healthcare Industry						Public Company Board Service
		lllllll 7						llllllllll 10
		Accounting and Finance						Cybersecurity and Information Technology
		lllll 5						lll 3
		Crisis and Risk Management
		lllllll 7


		Saumya Sutaria, M.D. \| 51 Chairman
		Chairman and Chief Executive Officer Tenet Healthcare Corporation		Director Since 2020
		Board Committees None		Independent No





Date and Time: Wednesday, May 22, 2024, at 8:00 a.m. Central Time	Place: Online by registering at www.proxydocs.com/THC	Record Date: March 27, 2024


		J. Robert Kerrey \| 80 Lead Director
		Managing Director Allen & Company Former U.S. Senator		Director Since March 2012*
		Board Committees Human Resources (Chair) Quality, Compliance & Ethics		Independent Yes


		Vineeta Agarwala, M.D., PhD \| 37
		General Partner Andreessen Horowitz (a16z)		Director Since 2023
		Board Committees Human Resources Quality, Compliance & Ethics		Independent Yes


		James L. Bierman \| 71
		Former President & CEO Owens & Minor, Inc.		Director Since 2017
		Board Committees Nominating and Corporate Governance Quality, Compliance & Ethics (Chair)		Independent Yes


		Roy Blunt \| 74
		Chairman of Leadership Advisory Strategies Husch Blackwell Strategies Former U.S. Senator		Director Since 2023
		Board Committees Audit ESG Nominating and Corporate Governance		Independent Yes


		Richard W. Fisher \| 75
		Former President & CEO Federal Reserve Bank of Dallas		Director Since 2017
		Board Committees Audit ESG (Chair) Human Resources		Independent Yes


		Meghan M. FitzGerald, DrPH \| 53
		Adjunct Professor Columbia University		Director Since 2018
		Board Committees ESG Nominating and Corporate Governance (Chair) Quality, Compliance & Ethics		Independent Yes


		Cecil D. Haney \| 68
		Retired Four-Star Admiral U.S. Navy		Director Since 2021
		Board Committees Audit Nominating and Corporate Governance		Independent Yes


		Christopher S. Lynch \| 66
		Retired National Partner KPMG, LLC		Director Since 2019
		Board Committees Audit Human Resources		Independent Yes


		Richard J. Mark \| 68
		Former Chairman & President Ameren Illinois Company		Director Since 2017
		Board Committees Audit ESG Human Resources		Independent Yes


		2024 PROXY STATEMENT


		2024 PROXY STATEMENT		3


Board Diversity	Gender Diversity	Ethnic Diversity


Age Distribution		Tenure


		Tammy Romo \| 61
		Executive Vice President & CFO Southwest Airlines Co.		Director Since 2015
		Board Committees Audit (Chair) Human Resources		Independent Yes


		Stephen H. Rusckowski \| 66
		Former Chairman, CEO and President Quest Diagnostics Incorporated		Director Since 2023
		Board Committees Human Resources Quality, Compliance & Ethics		Independent Yes


		Nadja Y. West, M.D. \| 63
		Retired Lieutenant General and 44th Surgeon General U.S. Army		Director Since 2019
		Board Committees ESG Nominating and Corporate Governance Quality, Compliance & Ethics		Independent Yes


Director	Audit*	Human Resources	Governance	QCE	ESG

Vineeta Agarwala, M.D., PhD

James L. Bierman				Chair

Roy Blunt

Richard W. Fisher					Chair

Meghan M. FitzGerald			Chair

Cecil D. Haney

J. Robert Kerrey		Chair

Christopher S. Lynch

Richard J. Mark

Tammy Romo	Chair

Stephen H. Rusckowski

Saumya Sutaria, M.D.

Nadja Y. West, M.D.


The Audit Committee	Meetings held in 2023:	8

Membership: Romo (Chair), Blunt, Fisher, Haney, Lynch, Mark (All Independent)
Primary Responsibilities: • Assist the Board in oversight of: • accounting, reporting and financial practices • the integrity of financial statements • compliance with legal and regulatory requirements with respect to applicable accounting and auditing matters • independent registered public accountant’s qualifications, independence and performance • internal audit function • cybersecurity • Establish and maintain policies and procedures for the receipt, retention and treatment of complaints and concerns regarding accounting, internal accounting controls and auditing matters • Authority to select, retain and review the independent registered public accountant’s qualifications, independence and performance • Oversee the performance of the Company’s chief internal auditor, who reports directly to the Audit Committee	Key Skills and Experience: • Expertise in auditing, accounting and tax-related matters • Preparation or oversight of financial statements • Extensive knowledge of compliance and relevant regulatory issues


The ESG Committee	Meetings held in 2023:	2

Membership: Fisher (Chair), Blunt, FitzGerald, Mark, West (All Independent)
Primary Responsibilities: • Review and discuss with management the Company’s ESG strategy, initiatives and policies • Review and monitor the operational, regulatory, and reputational risks and impacts of ESG on the Company, and provide insight and guidance with respect to the Company’s management of such risks and impacts • Review and discuss reports from management regarding the Company’s progress toward its key ESG objectives • Provide input and guidance with respect to communications with employees, investors and other stakeholders, as appropriate, regarding the Company’s position on or approach to ESG matters	Key Skills and Experience: • Experience with governance, social and sustainability matters • Knowledge of the Company’s ESG strategy, initiatives and policies, including those related to sustainability and diversity and inclusion


The Human Resources Committee	Meetings held in 2023:	6

Membership: Kerrey (Chair), Agarwala, Fisher, Lynch, Mark, Romo, Rusckowski (All Independent)
Primary Responsibilities: • Establish general compensation policies for the Company that: • support overall business strategies and objectives • enhance efforts to attract and retain skilled employees • link compensation with business objectives and organizational performance • provide competitive compensation opportunities for key executives • Oversee the administration of executive compensation programs with responsibility for establishing and interpreting the Company’s compensation policies and approving compensation paid to executive officers • Review, approve and make recommendations regarding compensation of non-employee directors, the Company’s executive officers and other members of the senior management team • Review the performance of the Chief Executive Officer and, either as a committee or together with other independent directors, determine and approve the CEO’s compensation level based on this evaluation • Discuss and evaluate, in consultation with the Chief Executive Officer, the performance of other executives • Oversee the Company’s policies and procedures regarding harassment in the workplace and sexual misconduct matters, including reporting systems and treatment of received complaints, and monitor compliance with such policies and applicable law • Oversee the administration of the Company’s clawback policy • Provide perspectives to management regarding the Company’s talent management, which may include performance management, succession planning, leadership development, diversity, recruiting, retention and employee training	Key Skills and Experience: • Extensive knowledge of executive compensation best practices • Human capital management • Expertise in evaluating executive performance and determining appropriate compensation programs • Leading cultural change


						Our goal is to provide high-quality and accessible healthcare to all our patients. We are committed to maintaining a standard of excellence within our facilities, treating all patients with dignity and compassion, and providing care that is necessary and appropriate.


						At Tenet, our people, caregivers and patients are at the heart of what we do. We seek to provide employees with the resources, tools and support to serve our patients and customers in the best way possible. We are committed to helping team members further develop their career pathways and maximize their potential at every stage of their career.


						We like to say that we are national in scope, but local at heart. Our philanthropic efforts are centered around strengthening the health of our communities. While we have a vast footprint, each of our care facilities give back to its local community in different ways. From education, to fighting hunger, to health advocacy and awareness, our efforts to give back to our neighbors reflect our mission.


Annual Compensation Element	Amount

Annual Cash Retainer	$	100,000

Annual Grant of Restricted Stock Units (RSUs)	$	200,000

Annual Committee Chair Cash Retainers:

• Audit Committee	$	25,000

• Human Resources Committee	$	20,000

• Nominating and Corporate Governance Committee	$	17,500

• Quality, Compliance & Ethics Committee	$	17,500

• ESG Committee	$	17,500

Annual Retainer for Lead Director or Non-Executive Chair:

• Cash Fee	$	150,000

• Additional Grant of RSUs	$	50,000


Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)^(1)(2)(3)		Total ($)

J. Robert Kerrey		291,500		250,027		541,527

Vineeta Agarwala, M.D., PhD⁽⁴⁾		5,707		90,143		95,850

James L. Bierman		133,500		200,043		333,543

Roy Blunt⁽⁵⁾		14,130		158,283		172,413

Richard W. Fisher		151,000		200,043		351,043

Meghan M. FitzGerald, DrPH		139,000		200,043		339,043

Cecil D. Haney		127,000		200,043		327,043

Christopher S. Lynch		131,000		200,043		331,043

Richard J. Mark		135,000		200,043		335,043

Tammy Romo		156,000		200,043		356,043

Stephen H. Rusckowski		38,890		200,043		238,933

Nadja Y. West, M.D.		120,000		200,043		320,043



Name	Shares Beneficially Owned⁽¹⁾
Name	Shares of Common Stock⁽²⁾			Shares Underlying Options/RSUs Exercisable Within 60 Days of March 1, 2024			Percent of Class as of March 1, 2024

Saumya Sutaria, M.D.		496,521			-0-			*

Vineeta Agarwala, M.D., PhD		1,562	⁽³⁾		-0-			*

Paola M. Arbour		47,971			-0-			*

Thomas W. Arnst		8,148			-0-			*

James L. Bierman		53,720	⁽⁴⁾		-0-			*

Roy Blunt		2,798	⁽⁵⁾		-0-			*

Daniel J. Cancelmi		515,443			61,383			*

Richard W. Fisher		20,127	⁽⁶⁾		-0-			*

Meghan M. FitzGerald, DrPH		35,269	⁽⁷⁾		-0-			*

Lisa Y. Foo		19,566			-0-			*

Cecil D. Haney		14,535	⁽⁸⁾		-0-			*

J. Robert Kerrey		60,725	⁽⁹⁾		-0-			*

Christopher S. Lynch		25,620	⁽¹⁰⁾		-0-			*

Richard J. Mark		47,303	⁽⁶⁾		-0-			*

Sun Park		-0-			20,707	⁽¹¹⁾		*

Tammy Romo		61,280	⁽¹²⁾		-0-			*

Stephen H. Rusckowski		3,682	⁽¹³⁾		-0-			*

Nadja Y. West, M.D.		31,462	⁽¹⁴⁾		-0-			*

Current executive officers and directors as a group (17 persons)⁽¹⁵⁾		930,289	⁽¹⁶⁾		20,707			0.93	%



Name and Address	Number of Shares Beneficially Owned			Percent of Class as of March 1, 2024
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355		11,110,396	⁽¹⁾		10.91	%
BlackRock, Inc. 55 East 52^ndStreet New York, NY 10055		10,881,666	⁽²⁾		10.69	%
Glenview Capital Management, LLC 767 Fifth Avenue, 44^thFloor New York, NY 10153		7,742,322	⁽³⁾		7.60	%
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202		7,124,316	⁽⁴⁾		7.0	%
Investco Ltd. 1555 Peachtree Street NE, Suite 1800 Atlanta, GA 30309		5,422,099	⁽⁵⁾		5.32	%



Named Executive Officer		Title

Saum Sutaria		Chairman and Chief Executive Officer

Dan Cancelmi		Former Executive Vice President and Chief Financial Officer⁽¹⁾

Tom Arnst		Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary

Lisa Foo		Executive Vice President, Commercial Operations

Paola Arbour		Executive Vice President and Chief Information Officer


Overview			43
2023: Advancing our Strategy and Mission to Expand Quality, Compassionate Care			43
2023 Compensation Program Highlights			44
2023 Say-on-Pay Vote			44
Compensation Elements Link Pay with Performance			45
Best Practices Support Strong Compensation Governance			46

Detailed Description and Analysis			47
2023 Compensation Decisions			47
Base Salary			47
Annual Incentive Plan			47
Long-Term Incentive Compensation			50
The Compensation Process			52
Role of the Human Resources Committee			52
Independent Compensation Consultant			52
Benchmarking Against Peer Companies			53
Other Compensation, Benefits and Considerations			54
Perquisites			54
Executive Severance Plan			54
Employee Benefits			54
Executive Retirement Programs			54
Compensation Governance Practices			55
Stock Ownership and Retention Requirements			55
Equity Grant Timing and Stock Option Exercise Prices			55
Prohibition on Hedging or Pledging Our Stock			55
Clawback Policies			56
Human Resources Committee Report			57
Executive Compensation Tables			58



2023 Annual Incentive Plan Payouts		In February 2024, the HR Committee approved final payouts under our 2023 Annual Incentive Plan, with corporate performance achieved at 200% of target. Final payouts for our NEOs ranged from 240% to 280% of target payout levels after application of each officer’s individual performance multiplier.

2023 LTI Program Awards		In March 2023, the HR Committee approved 2023 Long-Term Incentive (LTI) awards for executive officers (other than Mr. Cancelmi) comprised of the following RSUs: • 50% time-based awards vesting ratably over three years, and • 50% performance-based awards earned over a three-year period based on the achievement of Adjusted EPS* and Adjusted Free Cash Flow** minus cash distributions paid to noncontrolling interests (“NCI”) (Adjusted FCF Less NCI). These performance metrics are established at the start of each year of the three-year performance period subject to a cumulative three-year relative total shareholder return (“Relative TSR”) performance modifier.

2021 Performance Based RSUs		In February 2024, the HR Committee certified final achievement of the 2021 performance-based RSUs granted to the NEOs, with such awards earned at 199.7% of target as a result of exceeding the maximum target for each applicable performance goal for 2021, exceeding the target Adjusted EPS goal for 2022, below threshold achievement for the Adjusted FCF Less NCI goal for 2022, exceeding the maximum target for each applicable performance goal for 2023 and cumulative Relative TSR ranking first against three direct competitors, resulting in application of the +25% modifier.


Element	Description	Purpose

Base Salary	• Fixed cash compensation set annually • Based on market data, individual performance, internal pay equity, and the scope and complexity of the officer’s role	• Attracts and retains talented executives with competitive fixed pay

Annual Incentive Plan	• Compensation tied to achievement of annual performance goals • Target award amounts increase with executive’s level of influence on business outcomes and reflect individual performance and internal equity	• Motivates and rewards executives for meeting or exceeding annual goals that drive long-term growth • Challenging, objective performance metrics set annually based on the Company’s business plans

Long-Term Incentive Compensation

Performance- Based RSUs	• Performance-based RSUs cliff vest after a three-year performance period based one-half on Adjusted EPS* and one-half on Adjusted FCF Less NCI*; these goals are established at the beginning of each year within the three-year performance period • Relative TSR multiplier is measured over the full three-year performance period and may reduce or increase earned payouts by 25%	• Establishing goals for each year of the three-year performance period provides the Company with flexibility to ensure goals remain relevant and challenging throughout the performance period and avoids awards that have weakened retentive value in the event of a single year of below-threshold performance or windfall value in the event of a single year of superior performance • Applying the Relative TSR multiplier over the full performance period strengthens long-term shareholder alignment and motivates our executives to achieve long-term share price appreciation

Time-Based RSUs	• Time-based RSUs vest ratably over three years based on continued service**	• Aligns economic interests of executives and shareholders through equity ownership • Provides strong retentive value


		Actively engage with investors				Emphasize pay-for-performance

		Maintain stock ownership and retention requirements for executives and non-employee directors				Maintain Rule 10D-1 clawback policy

		Conduct annual compensation risk assessments				Retain an independent compensation consultant

		Cap payouts under the annual incentive plans and performance-based RSU awards				Directors and executive officers cannot hedge or pledge Company securities

		No excise tax gross-ups on change-in-control severance benefits				No backdating stock option grants or repricing of underwater stock options without shareholder approval

		No excessive perquisites				No current dividend payments on unvested equity awards