The top executive of Tenet Healthcare, one of the nation’s largest providers of healthcare, “will step down from his roles as director and chief executive officer at the earlier of March 15, 2018 or when a successor is appointed,” the company announced Thursday afternoon.
The 57-year-old Fetter is one of the best-known hospital executives in the U.S. and a fixture at Tenet for more than two decades in various capacities, but the company lately has been underperforming despite the major expansion of health insurance under the Affordable Care Act. Its problems have led to takeover speculation that only escalated two weeks ago after drama on the board level and disagreements over strategy led to two Tenet directors resigning
“The changes announced today will ensure Tenet remains focused on providing high-quality care to patients, innovating in ways that meet the demands of today’s healthcare market and driving operational and financial performance in a manner that maximizes shareholder value,” said current independent lead director Ronald Rittenmeyer, who will become executive chairman effective immediately.
As part of the departure of Fetter, Tenet will also overhaul its governance in what the company described as an effort to “refresh the composition of its board of directors.” Two weeks ago, Glenview Capital Management pulled its two representatives on Tenet’s board, citing “irreconcilable differences” over the company’s strategy. Glenview is Tenet’s largest shareholder.
“We expect this situation to become even more interesting now, potentially through a proxy fight, a proxy solicitation or other action, whether by current holders or through new ones,” Mizuho Securities USA analyst Sheryl Skolnick said after the departure of the directors from Glenview Capital.
Fetter was named Tenet’s president in November 2002 and was appointed the chief executive officer in September 2003. Fetter’s history with Tenet dates to the 1990s following a successful career as a young CFO for Metro-Goldwyn-Mayer
He joined Tenet in October of 1995 and worked in various capacities before becoming CFO during his first stent of five years with the company. He left in 2000 to head Broadlane, Inc. before returning to Tenet two years later.
Tenet operates 77 acute-care hospitals, 21 short-stay hospitals, and more than 460 outpatient centers through its subsidiaries, partnerships and joint ventures. Tenet is among the nation’s largest investor-owned hospital chains behind HCA Holdings, which has 177 hospitals and 119 surgery centers.
“I am proud of what we accomplished in transforming the Company, and strongly believe the 130,000 Tenet employees will continue focusing every day on advancing the Company’s mission,” Fetter said in a statement. “I have no doubt that Tenet will be a leading force in creating a better healthcare system and I look forward to assisting during the transition.”
Date: Aug 31, 2017