Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Proxy Contest (February 2018)
27 slides from Tenet Healthcare's proxy contest presentation, Feb 21, 2018
Slide 1: Investor Presentation February 21, 2018
Investor Presentation February 21, 2018
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contai
Slide 3: Executive Summary
Tenet has a history of robust engagement with shareholders, which has historically included participation by independent directors to ensure that shareholders have a voice in our Boardroom Tenet has been highly responsive to feedback received from shareholders, including Glenview, and has taken subs
Slide 4: Robust Special Meeting Right
Robust Special Meeting Right On January 21, 2018, the Tenet Board approved amendments to the Company’s Bylaws to grant shareholders the right to call special meetings Shareholders representing at least a majority of outstanding shares can require Tenet to call a special meeting within 90 days Owners
Slide 5: Special Meetings are a Preferred Forum for Shareholder Action
By amending its bylaws to allow shareholders to call a special meeting, Tenet adopted the widely recognized, preferred channel for shareholders to conduct business outside of the annual meeting Special meetings provide all shareholders with a structured, transparent and equitable channel for making
Slide 6: Glenview's written consent proposal is inferior to our Special Meeting right
By enabling a dominant shareholder to rapidly enact far reaching changes, Glenview’s written consent proposal is inferior to our Special Meeting right Glenview’s proposal would enable a small group of owners to enact significant change in as little as 15 days, with considerably less notice and proce
Slide 7: Prevalence of Special Meeting Right Emphasizes its Widespread Acceptance
Prevalence of Special Meeting Right Emphasizes its Widespread Acceptance Source: FactSet. (1) Refers to Nevada corporations in the S&P 500 or S&P 1500, as applicable, that do not have a controlling shareholder and that provides shareholders the right to act by written consent at a level meaningfully
Slide 8: Tenet is on the Right Path
Tenet is on the Right Path Already Taking Action to Improve Tenet Replaced CEO: new CEO has extensive turnaround experience Significant cost savings program announced Ongoing portfolio review – including exploring sale of Conifer 1 Positioning Tenet for Future of Healthcare Focusing on attractive ho
Slide 9: Already Taking Action to Improve Tenet
New CEO with extensive turnaround experience $250 million cost reduction program Exploring sale of Conifer Enhanced focus on quality of care Divestitures of non-core hospitals Actions We Have Taken A B C D E Already Taking Action to Improve Tenet 1
Slide 10: New CEO With Extensive Turnaround Experience
Named executive chairman of Tenet in August 2017 and CEO in October 2017 Served on Tenet’s board since 2010, most recently as lead director New CEO With Extensive Turnaround Experience A Time Frame Selected Commentary Millennium Health 2016-2017 Appointed as Chairman and CEO after emergence from Cha
Slide 11: $250 Million Cost Reduction Program
$250 Million Cost Reduction Program B Rationalizing Headcount Elimination of approximately 2,000 positions Reducing corporate overhead by 20% compared to 2016 Eliminated regional management layer in hospital business Already Taking Action to Improve Tenet 1 Rationalizing Operations Consolidate and s
Slide 12: Exploring Sale of Conifer
Very valuable asset, but not strategic to own it Realize value from a strong cash flow generating business Expiring Tenet hospital revenue cycle services contract in December 2018 will be renewed as part of the sale process Execute strong service level agreements (SLAs) to maintain excellence in cas
Slide 13: Enhanced Focus on Quality of Care
Many of our hospital key indicators are better than the national average Core measures 97.7% vs. national average of 92.5% Leapfrog hospital safety “GPA” of 3.19 vs. national average of 2.81 USPI surgical hospitals have strong performance on both HCAHPS and CMS Overall Quality Scores Of 20 hospitals
Slide 14: Divestitures of Non-Core Hospitals
Current divestiture program is expected to yield over $1B of proceeds, comprised of over $700M in cash and the elimination of approximately $300M(1) of capital lease debt Eight majority-owned and four minority-owned hospitals in the U.S. and nine facilities in the U.K. are targeted for divestment Cl
Slide 15: Leadership in Healthcare Delivery with Attractive Growth Opportunities
Leadership in Healthcare Delivery with Attractive Growth Opportunities Attractive market positions with a #1 or #2 market position in more than 70% of our hospital markets with increasing demand for healthcare services Hospital assets offer a strong value proposition relative to most local competito
Slide 16: Demographics and Patient Demand Remain Attractive
Demographics and Patient Demand Remain Attractive Deeper focus on service line expansion, quality and patient experience Focusing on ambulatory expansion, with significant USPI investments in these markets Poised to reap the benefit of recently completed projects San Antonio – new orthopedic institu
Slide 17: Future Tenet
Future Tenet One Tenet healthcare delivery business with the continuum of access points for consumers and purchasers Value based care provider with leadership in cost, quality, safety and service Innovator in extending the reach of Tenet via digital patient access, telemedicine, and call center coor
Slide 18: Enhancing Shareholder Value
Enhancing Shareholder Value Active and immediate repositioning of the Company to yield higher margins and better free cash flow Strategic leadership in healthcare delivery, while maximizing asset value for shareholders in the non-strategic services business Reduce leverage well in advance of any sig
Slide 19: Overview of Tenet's Board of Directors
Overview of Tenet’s Board of Directors Tenet’s Board is comprised of a diverse, experienced and recently refreshed group of business leaders Richard Mark (63) Committees: NCG, QCE Chairman and President of Ameren Illinois Company Director since 2017 Richard R. Pettingill (70) Committees: QCE (Chair)
Slide 20: Board Director Biographies
Served as President and CEO of Owens & Minor, a leading distributor of medical and surgical supplies Prior to that, he served as EVP and CFO of Quintiles Transnational Corp. Earned his B.A. from Dickinson College and his MBA from Cornell University’s Johnson Graduate School of Management James L. Bi
Slide 21: Overview of Tenet's Board of Directors: Experience and Expertise
Overview of Tenet’s Board of Directors Tenet’s current Directors have significant depth and breadth of expertise in the areas most relevant to overseeing our business and strategy (1) Public Company CEO and Public Company Board excludes experience solely derived from Tenet. Experience or attribute I
Slide 22: Tenet Embraces Shareholder Feedback and Governance Best Practices
Tenet Embraces Shareholder Feedback and Governance Best Practices Shareholder views informed our decision to allow shareholders to call a special meeting, enhance our Board composition and implement a robust Lead Director role Company rapidly responded to Glenview’s written consent request by adopti
Slide 23: Lead Independent Director Role
Board proactively addressed concerns of a combined Chairman / CEO role by designating a Lead Independent Director, Robert “Bob” Kerrey Former governor and U.S. Senator from Nebraska, member of Governance and QCE Committees with extensive background in accounting, finance and public policy The Lead I
Slide 24: Constructive Dialogue with Glenview
Tenet has endeavored to maintain a constructive dialogue with Glenview over the course of Glenview’s investment in Tenet As part of this constructive dialogue, Tenet agreed to add two Glenview employees to its Board in January 2016, and further appointed two independent Directors proposed by Glenvie
Slide 25: Glenview's Written Consent Proposal Would Short Circuit Open Debate
Glenview’s Written Consent Proposal Would Short Circuit Open Debate and Disenfranchise Many Shareholders Special meeting process affords appropriate time for transparent debate and deliberation Days Special Meeting Action by Written Consent 15 90 Consent could be submitted as soon as consent solicit
Slide 26: Glenview's Proposal is Not in the Best Interest of Tenet's Shareholders
Glenview’s proposal to allow shareholders to act by written consent is opportunistic and not in the best interests of shareholders Tenet’s special meeting provision affords shareholders a structured, transparent and equitable channel for making decisions and expressing their views Glenview’s written
Slide 27: Voorn
Voorn tenet