UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

(Amendment No.     )

 

 

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Tenet Healthcare Corporation

(Name of Registrant as Specified in Its Charter)

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Tenet
Health
2022
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
A COMMUNITY BUILT ON ICARE I

 

Dear Fellow Shareholders,

We are pleased to report that in 2021, we improved performance, grew earnings, enhanced cash flow, and continued to grow our mix of high margin ambulatory care. The results demonstrate a continued positive trajectory despite the hurdles of COVID 19 and other external pressures. It solidifies us as an action-oriented company that has grown earnings and improved margins consistently and is strategically positioned for continued growth and returns further stabilizing and strengthening your company. We are pleased to have the opportunity to share some details about this progress, as well as the steps we continue to take to support a positive trajectory.

The primary drivers of our success in 2021 were set into action four years ago as part of an ambitious transformation plan. We remained steadfast in these key fundamental changes that enabled us to perform on a more consistent and sustainable basis as we faced unknown challenges with COVID-19 and other variables throughout 2021. The foundation we have been building allowed the enterprise to maintain a clear and unobstructed vision as it addressed the pandemic while continuing to execute the transformational blueprint.

The enterprise, overall, significantly exceeded the expectations of the market, as well as our own expectations allowing us to raise Adjusted EBITDA Outlook a record three times during the year. We also produced significant cash flow in 2021, consistent with the increasing value of the key parts of our business.

While these performance statistics are very important, we equally viewed the strategic vision as a guide for our forward steps. We remained focused on the transformation of Tenet into much more than a hospital company, ensuring a more balanced and sustainable economic engine while continuing to provide the most effective and efficient offering to the communities we serve with lower cost ambulatory options. We significantly scaled USPI even further by acquiring ownership interests in 86 ambulatory surgery centers from SurgCenter Development (SCD) and have the exclusive option to partner with SCD on the future development of at least 50 de novo centers over a period of five years. This complements additional ambulatory strategic joint ventures with leading physicians and health systems that continue to form a strong and growing core of USPI. We expect strong returns from these high-caliber investments.

Our hospital segment, which we have appropriately trimmed over the last 4 years, remains a leader in acute care driving very strong performance in 2021, with nearly all markets exceeding our expectations for the year. We generated high patient acuity from investments in clinical technology and service line enhancements. Our operators maintained very effective cost management while confronting difficult COVID-related staffing challenges, making real-time adjustments using our analytics platform. We furthered efforts to enhance access to care, including construction projects for new hospitals and medical campuses based on data driven decisions in growth markets and service lines that are needed in these communities. Importantly, we purposely expanded our ecosystem of high-quality physicians across neurosciences, cardiovascular, musculoskeletal and other surgical services. Our hospital segment has transformed from average performance to a strong contributor in the enterprise.

Our multi-year turnaround at Conifer has resulted in significant margin improvement of over 1,000 basis points since 2017. We continued to build on our progress with revamped commercialization efforts, new sales talent and technology, a focus on point solutions services and efficiencies through our Global Business Center. Based on ongoing shareholder value creation opportunities and improved business fundamentals, we announced on March 1, 2022, that we will no longer pursue a spinoff of Conifer. We believe that building on our progress with Conifer as a part of Tenet will provide greater returns for our shareholders.

Looking ahead, we are focused on the continued execution at the tactical and strategic levels to continue delivery of additional value to our shareholders. This is centered around five principles:

 

We will stand for high quality, specialty care in the community, continually enhancing services to meet the needs of our communities.

We will build upon USPI’s distinctive platform, utilizing unique development and management capabilities to set the bar for high-touch service in ambulatory care settings.

We will maintain a commitment to value-based care by delivering new services into the most clinically appropriate, low-cost setting across our acute care hospitals, ASCs, or physician practices.

We will continue to attract and retain locally, regionally, and nationally recognized physicians with a shared commitment to excellence in compliance, quality, safety, and patient experience.

Our commitment to a diverse and inclusive workforce reflecting the markets we operate in is fundamental to our ongoing success.

 

 

We believe that we can only achieve our objectives with a high-performance culture. We remain committed to empowering our people, regardless of their role or tenure, to engage in improving our operations with measurable results. And equally ensuring we continue to evolve in offering nurses a vibrant and growing clinical environment to do their work and develop their own skills and competencies.

We recognize the need to be purpose-driven in making a positive impact that complements our operational responsibilities built on an overarching goal to create a better, more sustainable path for future generations. We advanced our agenda as it relates to programs that support the key tenets of environmental, social and governance (ESG) and formed a new Board level oversight committee specific to our expanded commitment to the principles embedded in ESG to help meet our goals. Our 2022 ESG report will capture real life profiles of the steps we are taking to foster a diverse and inclusive culture, strengthen the health of our communities, protect the planet, lead with integrity, and apply sound governance. While we have made strong improvements in our Social and Governance areas, including a stronger refreshed and diverse Board of Directors in the last several years, we acknowledge that, while we are not major contributors to environmental risk, we are still actively shaping priorities to improve even further. We are balancing the needs of our patients with the goals of improved climate sustainability and working on the common ground between them ensuring our new facilities meet improved standards in this area while we develop programs to improve our existing operations. Our commitment to improvement and progress remains critical to our continued future success.

The Tenet Healthcare of 2021 reflects a stronger, resilient enterprise, that is energized by the opportunities ahead. We would like to express our sincere gratitude to all our caregivers, whose resolve and commitment define Tenet as an organization. And we equally appreciate the support of our shareholders, our communities, and our partners as we fulfill our mission. We are proud to serve you.

Respectfully,

 

Ronald A. Rittenmeyer Executive Chairman Tenet Healthcare				Saum Sutaria, M.D.              Chief Executive Officer              Tenet Healthcare

 

TENET HEALTHCARE CORPORATION

14201 Dallas Parkway

Dallas, Texas 75254

(469) 893-2200

Notice of Annual Meeting of Shareholders to be held on Friday, May 6, 2022

March 25, 2022

To our Shareholders:

Our 2022 Annual Meeting of Shareholders (the “Annual Meeting”) will be held on May 6, 2022, at 8:00 a.m. Central Time. You will be able to attend and participate in the Annual Meeting by, registering at www.proxydocs.com/THC. After you complete your registration, you will receive further instructions via email, including a unique link that will provide you access to the Annual Meeting, where you will be able to listen to the meeting live, submit questions, and vote. Our Annual Meeting is being held for the following purposes:

 

1.

To elect the eleven directors named in the accompanying Proxy Statement, each to serve until the next annual meeting of shareholders or until his or her successor is duly elected and qualified, whichever is later, or until the director’s earlier resignation or removal.

 

2.

To vote, on an advisory basis, to approve the Company’s executive compensation.

 

3.

To approve the First Amendment to the Tenet Healthcare 2019 Stock Incentive Plan.

 

4.

To ratify the selection of Deloitte & Touche LLP as our independent registered public accountants for the year ending December 31, 2022.

We will also consider and take action on any other business that properly comes before the meeting or any adjournment or postponement of the meeting.

Only shareholders of record of our common stock at the close of business on March 11, 2022 are entitled to notice of and to vote at the Annual Meeting.

It is important that your shares be represented and voted at the Annual Meeting. You may vote your shares via the Internet, by telephone or by completing and returning a proxy card. Specific voting instructions are set forth in the “General Information Regarding the Annual Meeting and Voting” section of the accompanying Proxy Statement and on the proxy card.

 

 

 

 

2022 Proxy Statement

 

Table of Contents

 

Proxy Statement Summary			1
Proposal 1 - Election of Directors			7
Corporate Governance and Board Practices			16
Commitment to Sound Corporate Governance Policies and Practices			16
Board Leadership Structure			16
Board and Committee Organization and Responsibilities			17
Committees			18
Role of Board and its Committees in Risk Oversight			22
ESG			24
Policies on Ethics and Conduct			25
Certain Relationships and Related Person Transactions			26
Communications with the Board of Directors by Shareholders and Other Interested Parties			26
Director Compensation			27
2021 Director Compensation Table			28
Compensation Plans Applicable to Directors			28
Director Stock Ownership and Retention Requirements			29
Executive Officers			30
Securities Ownership			31
Securities Ownership of Management			31
Securities Ownership of Certain Shareholders			32
Compensation Discussion and Analysis			33
Overview			34
Detailed Description and Analysis			39
Human Resources Committee Report			51
Executive Compensation Tables			52
2021 Summary Compensation Table			52
Grants of Plan-Based Awards During 2021			54
Outstanding Equity Awards			55
Option Exercises and Stock Vested			57
Pension Benefits			57
Nonqualified Deferred Compensation			59
Potential Payments Upon Termination or Change of Control			60
Pay Ratio Disclosure			67
Securities Authorized for Issuance Under Equity Compensation Plans			68
Equity Compensation Plan Information			68
Proposal 2 - Advisory Vote to Approve Executive Compensation			69
Proposal 3 - Approval of First Amendment to the 2019 Stock Incentive Plan			70
Audit Committee Report			79
Proposal 4 - Ratification of the Selection of Independent Registered Public Accountants			81
General Information Regarding the Annual Meeting and Voting			82
Other Information			86
Appendix A: Non-GAAP Financial Measures			A-1
Appendix B: Tenet Healthcare 2019 Stock Incentive Plan (as amended by the First Amendment thereto)			B-1

This Proxy Statement includes certain financial measures not in accordance with generally accepted accounting principles in the United States (GAAP), such as Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted EPS. Definitions of these measures are contained in Appendix A to this Proxy Statement.

 

Proxy Statement Summary

Below are highlights of certain information in this Proxy Statement. Please refer to the complete Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2021 before you vote.

2022 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time: Friday, May 6, 2022, at 8:00 a.m. Central Time				Place: Online by registering at www.proxydocs.com/THC				Record Date: March 11, 2022

Information:

 

The Notice of Internet Availability, this Proxy Statement and related proxy materials are being mailed or made available to shareholders on or about March 25, 2022. Copies of this Proxy Statement, the Company’s proxy card and our Annual Report on Form 10-K are available at www.proxydocs.com/THC.

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

Proposals				Board’s Recommendation		Page
1		Election of Eleven Director Nominees		Vote FOR Each Nominee		7
2		Advisory Approval of the Company’s Executive Compensation		Vote FOR		69
3		Approval of the First Amendment to the Tenet Healthcare 2019 Stock Incentive Plan		Vote FOR		70
4		Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accountants for the Year Ending December 31, 2022		Vote FOR		81

 

		2022 PROXY STATEMENT			1

Proxy Statement Summary

 

 

Business Overview

Tenet is a diversified healthcare services company focused on our mission to provide quality, compassionate care in the communities we serve. At December 31, 2021, Tenet had approximately 101,000 employees delivering and supporting care through our three business segments — Hospital Operations, Ambulatory Care and Conifer. We operate an expansive network across the country, with 60 hospitals and approximately 550 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, imaging centers, off-campus emergency departments and micro-hospitals. Through our subsidiary United Surgical Partners International (USPI), Tenet operates a leading ambulatory surgery platform that includes partnerships with 50 prominent health systems. In addition, our Conifer Health Solutions subsidiary provides comprehensive end-to-end and focused-point business process services, including hospital and physician revenue cycle management, patient communications and engagement support, and value-based care solutions, to hospitals, health systems, physician practices, employers and other clients.

 

All data presented is as of or for the year ended December 31, 2021, as applicable; number of USPI ASCs and surgical hospitals includes 15 facilities in development at year-end.

Strategic Transformation

Since the end of 2017, Tenet has significantly transformed its business. We have strengthened our governance and leadership, and we reinvigorated the operating performance of each of our business segments. In addition, we have fostered a strong company culture that is more focused on executing our mission in alignment with our core values of compliance, quality and safety, compassion and inclusivity. These values allow us to best meet the unique needs of the communities we serve.

Operational improvements include the development and application of sharper real-time analytics, and the repositioning of our hospital portfolio to focus more on highly complex, highly acute care while concentrating capital deployment on our fast-growing, less capital-intensive ambulatory surgery business. Our goal is to continue to increase the percentage of Adjusted EBITDA provided by our ambulatory surgical business.

Through these changes, we have become a more diversified and resilient enterprise with a renewed focus on enhancing shareholder value.

 

2

Proxy Statement Summary

 

Repositioned Care Delivery Portfolio

A critical element of our strategy remains the ongoing transformation of our care delivery offerings. We continue to invest strategically in USPI, establishing ownership positions in approximately 160 ambulatory surgery centers between December 2020 and the end of 2021. This included two transformative transactions with SurgCenter Development and other high-quality deals with health systems, physicians and other partners.

We also continue our strategic deployment of capital to enhance high-acuity hospital services. Our efforts include capacity expansion, new construction in high-growth, attractive locations and investments in innovation.

Across our hospitals, USPI and our physician practices, we are focused on introducing new services at a lower cost and offering patients excellent service in the most clinically appropriate setting.

The evolution of our care delivery locations since 2017 reflects our strategy to invest strategically in USPI. Our focus is on markets where we can provide a strong value to payers and consumers.

 

 

Note: Includes acute care hospitals and USPI surgical facilities we operate, as well as de novo and other facilities in which we have an ownership interest from the recently completed SCD transaction

 

		2022 PROXY STATEMENT			3

Proxy Statement Summary

 

 

Our Resilience Through COVID-19

As COVID-19 continued to evolve in 2021, our company remained on the front lines, responding to surges, treating patients in need of care and managing through the effects of the pandemic. Our continuing transformation has played a major role in our ability to respond effectively, pivot immediately and provide companywide clarity on necessary actions. Our ability to perform under difficult and constantly evolving circumstances underscores the strength and commitment of our people and our resilience in managing through the unknown.

Our pandemic protocols are informed by CDC’s evolving recommendations and available scientific data to break the chain of transmission. As an enterprise, we have maintained a constant, clear stream of communication organized by our Incident Command Center and supported by real-time data across our facilities. Led by top clinicians, our infection prevention experts and emergency management professionals, our Incident Command Center has served as the hub of our response effort. This includes close coordination with every hospital and care facility and thoughtful calibration of strategy. The Incident Command Center also works to bring operators and support staff together to help ensure consistency in applying CDC guidelines, while providing a channel to share best practices, quickly triage issues and address emerging matters.

Continuing the Delivery of Vital Healthcare

 

Every day, but especially during this challenging time, our team members have led by example and done what they have been called upon and trained to do – with honor and professionalism.

 

4

Proxy Statement Summary

 

Governance Highlights

 

Formed ESG Committee in 2021 to formally oversee growing ESG initiatives		Significant Board refreshment with eight new independent directors added since fall 2017†		Strong independent Lead Director role with robust responsibilities
Active shareholder outreach and engagement		Shareholder right to call special meetings with 25% vote threshold		Proxy access right adopted in 2019 with market standard terms

 

†	Includes General Lloyd J. Austin, III who resigned from the Board on January 22, 2021 following his confirmation by the U.S. Senate as Secretary of Defense.

Board Refreshment

In response to specific shareholder feedback, the Board accelerated its refreshment process in the fall of 2017, recruiting eight independent directors since that time. On November 4, 2020, the Board appointed the Company’s then-President and Chief Operating Officer, and current Chief Executive Officer, Saum Sutaria, M.D., as a director. Dr. Sutaria’s leadership has been especially pivotal in accelerating the Company’s growth and successfully navigating the many challenges posed by the pandemic. In addition, on January 7, 2021, the Board appointed Admiral Cecil D. Haney, a retired four-star Admiral, as a director. Admiral Haney complements the Board with his leadership and experience, particularly in the areas of cybersecurity and systems planning. These new directors have brought a diversity of viewpoints, approaches and experiences to the Board as it addresses risks and supports the Company’s long-term strategies.

Sound Governance Practices

Our Board is committed to sound corporate governance policies that protect the long-term interests of shareholders, promote accountability, and give shareholders a voice. The Board has long maintained many best practices, including annual election of directors by majority standard, a robust annual self-evaluation process, and active shareholder engagement. In recent years, the Board has further enhanced the Company’s governance practices, including amending our bylaws in 2018 to provide shareholders with beneficial ownership of 25% of Tenet’s outstanding shares with the right to call a special meeting, as well as an amendment in 2019 that allows for shareholders to nominate directors via proxy access on market standard terms.

ESG Committee

In 2021, the Board formed an Environmental, Social and Governance (ESG) Committee. The ESG Committee’s purpose is to oversee and support the Company’s commitment to social, environmental and other public policy initiatives, including, among other things, climate change impacts, sustainability, and diversity and inclusion. The formation of the ESG Committee and our other recent governance enhancements, driven in large part by shareholder feedback, are intended to continue to align our corporate governance policies and practices with the long-term interests of our business and our shareholders.

Active Shareholder Engagement Program

Our Board regularly solicits input from investors and governance groups to better inform decision-making and gain insight into shareholder perspectives on a broad range of topics, including corporate governance practices. We value our shareholders’ perspectives on our business and interact with them through a variety of shareholder engagement activities. As we engage with shareholders, feedback is regularly reviewed by our Board.

 

		2022 PROXY STATEMENT			5

Proxy Statement Summary

 

 

Board Characteristics

 

Tenet’s recent Board refreshment activities have cultivated a balanced mix of diversity, age, tenure and viewpoints in the boardroom. The Board believes that a range of backgrounds, viewpoints, beliefs, ethnicities and ages, in addition to gender diversity, contributes to strong governance and successful oversight of the Company.   Diversity, Age and Tenure of Board Nominees

 

6

Director Nominees

 

Proposal 1-Election of Directors

Nominees for Election to the Board of Directors

Tenet’s Board of Directors is elected annually by our shareholders. Our nominees for election include nine independent directors and our Executive Chairman as well as our Chief Executive Officer. The Board has selected the nominees that follow to serve as directors until the 2023 annual meeting, or until their successors are elected or appointed. Each of the nominees was last elected by the Company’s shareholders at the 2021 annual meeting of shareholders. The nominees for director will be elected if the votes cast for the nominee exceed the votes cast against the nominee, with abstentions and broker non-votes not counted either for or against a nominee.

 

 

Ronald A. Rittenmeyer
Executive Chairman Age: 74   Director Since: 2010		Career Highlights: •  Mr. Rittenmeyer was named Executive Chairman of Tenet in August 2017 and Chief Executive Officer in October 2017. •  In September 2021, he transitioned from Chief Executive Officer and continued as Tenet’s Executive Chairman. •  He has served on our Board since 2010, including serving as Lead Director before he became Executive Chairman. •  He previously served as Chairman of the Board and Chief Executive Officer of Millennium Health, LLC, a health solutions company. •  He served as the Chairman, President and Chief Executive Officer of Expert Global Solutions, Inc., a provider of business process outsourcing services, from 2011 to 2014. •  From 2005 to 2008, Mr. Rittenmeyer held a number of senior management positions with Electronic Data Systems Corporation (EDS), including Chairman and Chief Executive Officer, President, Chief Operating Officer and Executive Vice President, Global Service Delivery. •  Prior to that, he was a managing director of the Cypress Group, a private equity firm, serving from 2004 to 2005. •  He served as Chairman, Chief Executive Officer and President of Safety-Kleen Corp. from 2001 to 2004. •  He formerly served as Chairman of the Federation of American Hospitals’ board of directors. •  Mr. Rittenmeyer received his Bachelor of Science degree in commerce and economics from Wilkes University and his M.B.A. from Rockhurst University.   Skills and Qualifications: •  Our Board values Mr. Rittenmeyer’s deep experience in transformational leadership. •  As Chief Executive Officer of Safety-Kleen, he led the company out of bankruptcy with pivotal strategic changes. •  He also led a turnaround at EDS in the same role and previously served as the Chief Executive Officer of other public companies, including Millennium Health and Expert Global Solutions. •  Mr. Rittenmeyer also brings to the Board his knowledge of the healthcare industry, information technology, business process outsourcing, public company board governance, and crisis management.   Other Current Public Company Directorships: IQVIA Holdings Inc.   Directorships Within the Past Five Years: American International Group, Inc., Avaya Holdings Corp. and IMS Health Holdings, Inc.

 

		2022 PROXY STATEMENT			7

Director Nominees

 

 

J. Robert Kerrey
		Career Highlights: •  Senator Kerrey is a former governor and U.S. Senator from Nebraska. •  He has served as managing director at Allen & Company, an investment banking firm, since 2014. •  He has also served as Executive Chairman of The Minerva Institute for Research and Scholarship, a non-profit that offers exceptional educational experiences to students and advances faculty research, since 2013. •  From 2011 to 2013, he was President Emeritus of The New School University in New York City, where he served as President from 2001 to 2010. •  From 2011 to 2012, he served as the Chairman of M & F Worldwide Education Holdings. •  From 1989 to 2000, he served as a U.S. Senator for the State of Nebraska. •  Previously, Senator Kerrey was Governor of the State of Nebraska from 1982 to 1987. •  Prior to public service, he founded and operated a chain of restaurants and health clubs. •  A former member of the elite Navy SEAL Team, Senator Kerrey is a highly decorated Vietnam veteran who was awarded the Congressional Medal of Honor – America’s highest military honor. •  He holds a degree in pharmacy from the University of Nebraska.   Skills and Qualifications: •  Senator Kerrey’s 18 years of experience in the public sector as a former U.S. Senator and Governor of Nebraska provide a key perspective to the Board in the highly regulated healthcare industry. •  Further, he has extensive experience in finance and public policy from his service at the investment banking firm Allen & Company and as a leader of a major university. •  The Board also values Senator Kerrey’s service on public company boards and crisis management.   Other Current Public Company Directorships: Lux Health Tech Acquisition Corp.   *   Senator Kerrey served as a director from March 2001 to March 2012 prior to his appointment in November 2012.
Lead Director since October 2017   Age: 78   Director Since: 2012*   Committee Membership: • Human Resources (Chair) • QCE

 

James L. Bierman
		Career Highlights: •  Mr. Bierman served as President and Chief Executive Officer of Owens & Minor, Inc., a Fortune 500 company and a leading distributor of medical and surgical supplies, from September 2014 to June 2015. •  Previously, he served in various other senior roles at Owens & Minor, including President and Chief Operating Officer from August 2013 to September 2014, Executive Vice President and Chief Operating Officer from March 2012 to August 2013, Executive Vice President and Chief Financial Officer from April 2011 to March 2012, and as Senior Vice President and Chief Financial Officer from June 2007 to April 2011. •  From 2001 to 2004, Mr. Bierman served as Executive Vice President and Chief Financial Officer at Quintiles Transnational Corp. Prior to joining Quintiles Transnational, Mr. Bierman was a partner at Arthur Andersen LLP. Mr. Bierman earned his B.A. from Dickinson College and his M.B.A. at Cornell University’s Johnson Graduate School of Management.   Skills and Qualifications: •  Mr. Bierman brings to the Board the skillsets he developed serving in multiple leadership positions at Owens & Minor, Inc., including as Chief Executive Officer. •  The Board values his significant operational and financial experience in the healthcare industry.   Other Current Public Company Directorships: KL Acquisition Corp., MiMedx Group, Inc. and Novan, Inc.   Directorships Within the Past Five Years: Owens & Minor, Inc.
Age: 69   Director Since: 2017   Committee Membership: • Governance • QCE (Chair)

 

8

Director Nominees

 

Richard W. Fisher
		Career Highlights: •  Mr. Fisher served as President and Chief Executive Officer of the Federal Reserve Bank of Dallas from 2005 until 2015. •  During his tenure, he served as a member of the Federal Open Market Policy Committee, as the chair of the Conference of Federal Reserve Bank Presidents, and as the chair of the Information Technology Oversight Committee for the 12 Federal Reserve banks. •  Previously, from 2001 to 2005, Mr. Fisher was Vice Chairman of Kissinger McLarty Associates, a strategic advisory firm. •  From 1997 to 2001, Mr. Fisher served as Deputy U.S. Trade Representative with the rank of Ambassador. •  Mr. Fisher currently serves as a Senior Advisor for Barclays PLC, a leading investment bank, and as a Trustee of the University of Texas Southwestern Medical Foundation. •  Mr. Fisher received his B.A. in economics from Harvard University and earned his M.B.A. from Stanford University.   Skills and Qualifications: •  Mr. Fisher offers valuable financial and policy perspectives from his experience as President and Chief Executive Officer of the Dallas Federal Reserve. •  The Board values his insight in public finance, trade, technology and risk management.   Directorships Within the Past Five Years: AT&T Inc. and PepsiCo, Inc.
Age: 73   Director Since: 2017   Committee Membership: • Audit • ESG (Chair) • Human Resources

 

Meghan M. Fitzgerald, DrPH
Age: 51   Director Since: 2018   Committee Membership: • Governance (Chair) • ESG • QCE		Career Highlights: •  Ms. FitzGerald is a private equity investor, where she serves as an advisor to several firms, including Wellspring Capital. •  In addition, Ms. FitzGerald serves as an Adjunct Professor of Health Policy at Columbia University. •  Ms. FitzGerald served from December 2016 to January 2020 as the CEO and managing partner at Letter One’s inaugural health vehicle. •  Prior to that, she served for nearly 20 years as an operator and strategist working for many healthcare firms, including Merck, Pfizer and Medco. •  From May 2015 to October 2016, Ms. FitzGerald served as Executive Vice President of Strategy and Policy at Cardinal Health, a healthcare services and product company. •  From 2010 to 2015, she served as President of Cardinal’s Specialty Solutions division. •  Ms. FitzGerald also previously served as a director of Thimblepoint Acquisition Corp from February to December 2021 and Arix Bioscience plc from 2017 to 2019. •  She is the founder of K2HealthVentures, a life science investment fund as well as an advisor and volunteer at TrekMedics, an international tech non-profit. •  She holds a DrPH in Healthcare Policy from New York Medical College, a BSN in Nursing from Fairfield University, and a Master of Public Health from Columbia University.   Skills and Qualifications: •  Ms. FitzGerald brings to the Board a broad range of experience in the healthcare industry, including senior strategic leadership, public policy, care delivery from her service as a nurse, and transactions and investments in a variety of healthcare fields from technology to life sciences.   Directorships Within the Past Five Years: Thimble Point Acquisition Corp, Arix Bioscience plc and Concert Pharmaceuticals, Inc.

 

		2022 PROXY STATEMENT			9

Director Nominees

 

 

Cecil D. Haney
		Career Highlights: •  Admiral Haney is a retired four-star Admiral, who completed 38 years of service in the U.S. Navy in 2017. •  Between 2013 and 2016, he also served as commander of the U.S. Strategic Command, where he was responsible for strategic capabilities involving nuclear forces, missile defense, space and cyberspace. •  In addition, between 2012 and 2013, he also served as commander of the U.S. Pacific Fleet, leading the U.S. Navy’s operations and the manning, operations and maintenance of the U.S. Navy fleet located in the Pacific and Indian oceans. •  He currently serves on the Johns Hopkins University Applied Physics Board of Managers, the Penn State University Applied Research Lab Advisory Board, the Naval Studies Board, the Aerospace Corporation Board of Trustees, and the Board of Directors for General Dynamics Corporation, Systems Planning and Analysis Inc., and the Center for New American Security. •  He also serves as Chairman of the Board of Directors for the Military Child Education Coalition. •  Admiral Haney is a graduate of the U.S. Naval Academy and holds Master’s degrees in National Security Strategy from the National Defense University and in Engineering Acoustics and System Technology from the Naval Post Graduate School.   Skills and Qualifications: •  The Board values Admiral Haney’s leadership experience as a former four-star Admiral in the U.S. Navy. •  He brings to the Board valuable insights into cybersecurity, systems planning and crisis and risk management.   Other Current Public Company Directorships: General Dynamics Corporation
Age: 66   Director Since: 2021   Committee Membership: • Audit • Governance

 

Christopher S. Lynch
		Career Highlights: •  Mr. Lynch served as National Partner in Charge of the Financial Services practice at KPMG, LLC from 2004 until his retirement in 2007. •  Prior to that, Mr. Lynch held a variety of positions at KPMG during his 29-year tenure, including chair of KPMG’s Americas Financial Services Leadership team and a member of the Global Financial Services Leadership and U.S. Industries Leadership teams. •  He currently serves as an independent director of American International Group, Inc. (AIG), a position he has held since 2009. •  Mr. Lynch was appointed as a director of SAFG Retirement Services, Inc. (AIG’s Life and Retirement subsidiary which is expected to go public in 2022). •  From 2008 to 2019, he also served as an independent director of Freddie Mac and was the Non-Executive Chairman of the Board from 2011 to 2018. •  Mr. Lynch has chaired audit committees of both AIG and Freddie Mac and has relevant committee experience on Risk, Compensation, Nomination and Corporate Governance and Technology. •  Mr. Lynch is a former member of the Advisory Board of the Stanford Institute for Economic Policy Research and a member of the Audit Committee Chair Advisory Council of the National Association of Corporate Directors. •  He received a Bachelor of Science in Accounting and Business Administration from the University of Kansas.   Skills and Qualifications: •  The Board values Mr. Lynch’s deep accounting, financial and corporate governance experience, including serving in leadership positions at KPMG and chairing audit committees at two highly regulated public companies.   Other Current Public Company Directorships: American International Group, Inc.   Directorships Within the Past Five Years: Federal Home Loan Mortgage Company (Freddie Mac)
Age: 64   Director Since: 2019   Committee Membership: • Audit • Human Resources

 

10

Director Nominees

 

Richard J. Mark
		Career Highlights: •  Mr. Mark serves as Chairman and President of Ameren Illinois Company, a multi-billion dollar energy and utility company responsible for electric and natural gas distribution to more than 1.2 million electric and 806,000 natural gas customers in Illinois. •  Mr. Mark joined Ameren in 2002 as Vice President of Customer Service before moving up to various senior management roles. •  Before joining Ameren, he served for 11 years at Ancilla Systems Inc. While at Ancilla, the parent company to St. Mary’s Hospital in East St. Louis, Illinois, he served as Vice President for Governmental Affairs and Chief Operating Officer before becoming Chief Executive Officer of St. Mary’s Hospital in East St. Louis, Illinois from 1994 to 2002. •  Mr. Mark served as Director of Union Electric Company from 2005 until 2012 and has been Chairman of Ameren Illinois (both subsidiaries of Ameren Corporation) since 2012. •  Mr. Mark earned his B.S. from Iowa State University and his M.S. at National Louis University.   Skills and Qualifications: •  Mr. Mark offers the Board extensive experience as Chairman and President of Ameren Illinois Company in a highly regulated industry in addition to multiple leadership positions at an acute care hospital, including service as Chief Executive Officer.
Age: 66   Director Since: 2017   Committee Membership: • Audit • ESG • Human Resources

 

Tammy Romo
		Career Highlights: •  Ms. Romo is Executive Vice President and Chief Financial Officer of Southwest Airlines Co., a major passenger airline, where she is responsible for strategic planning and overall finance activities, including reporting, accounting, investor relations, treasury, tax, corporate planning, and financial planning and analysis. •  Ms. Romo also oversees supply chain management. •  Ms. Romo previously served in a number of financial management and leadership positions at Southwest Airlines, including Senior Vice President of Planning, Vice President and Controller, Vice President and Treasurer, and Senior Director of Investor Relations. •  Before joining Southwest Airlines in 1991, Ms. Romo was an audit manager at Coopers & Lybrand, LLP. •  Ms. Romo is currently a member of the McCombs School of Business Advisory Council at the University of Texas at Austin. •  She received a B.B.A. in accounting from the University of Texas at Austin, and she is a Certified Public Accountant in the State of Texas.   Skills and Qualifications: •  Ms. Romo brings to the Board her experience as Executive Vice President and Chief Financial Officer of Southwest Airlines, where she oversees a broad range of financial activities. •  The Board values her deep knowledge of accounting and financial matters in addition to her understanding of risk management.
Age: 59   Director Since: 2015   Committee Membership: • Audit (Chair) • Human Resources

 

		2022 PROXY STATEMENT			11

Director Nominees

 

 

Saumya Sutaria, M.D.
		Career Highlights: •  Dr. Sutaria was appointed as the Company’s Chief Executive Officer in September 2021, and as a member of the Board in November 2020. •  Prior to becoming Chief Executive Officer, he served as the Company’s Chief Operating Officer from January 2019 to September 2021 and President from November 2019 to September 2021. •  Before joining the Company, Dr. Sutaria worked for McKinsey & Company for 18 years, most recently as a Senior Partner providing advisory support for hospitals, healthcare systems, physicians groups, ambulatory care models, integrated delivery, and government-led delivery, while also working with institutional investors in healthcare. •  He previously held an associate clinical faculty appointment at the University of California at San Francisco, where he also engaged in postgraduate training with a focus in internal medicine and cardiology. •  Dr. Sutaria received his Bachelor’s Degree in molecular and cellular biology and his Bachelor’s Degree in economics, both from the University of California, Berkeley, as well as his Medical Degree from the University of California, San Diego.   Skills and Qualifications: •  Dr. Sutaria brings tremendous experience in healthcare leadership both within Tenet and prior to joining the company in 2019. •  The Board values his strategic prowess in navigating complex matters, his ability to thoughtfully consider the impact on different stakeholders and his innate capacity for effective change management.
Age: 49   Director Since: 2020

 

Nadja Y. West, M.D.
		Career Highlights: •  Dr. West is a retired Lieutenant General in the U.S. Army, the 44th Surgeon General of the U.S. Army and the former Commanding General of the U.S. Army Medical Command. •  Previously, she served as Joint Staff Surgeon at the Pentagon, where she acted as chief medical advisor to the Chairman of the Joint Chiefs of Staff and coordinated all related health services issues, including operational medicine, force health protection, and readiness within the military. •  Dr. West has served in combat deployment as well as in leadership positions in multiple hospitals both in the United States and abroad. •  She is the recipient of numerous U.S. military awards, including the Distinguished Service Medal, the Defense Superior Service Medal, and the Legion of Merit with three Oak Leaf Clusters. •  She has served as an independent director on the board of Nucor Corporation since 2019 and Johnson & Johnson since 2020. •  Dr. West has served as a trustee on the board of the National Recreation Foundation, a non-profit organization dedicated to enhancing the role of recreation as a positive force in improving the quality of life of youth, since 2019. •  Dr. West is a graduate of the U.S. Military Academy and earned her medical degree from The George Washington University School of Medicine in Washington, D.C. •  She has completed residencies in both family medicine and dermatology.   Skills and Qualifications: •  The Board values Dr. West’s comprehensive experience in healthcare, including her service as the 44th Surgeon General of the U.S. Army. •  Her experience in a variety of healthcare leadership positions and clinical background offer the Board valuable perspectives on healthcare delivery, policy, and crisis and risk management.   Other Current Public Company Directorships: Johnson & Johnson and Nucor Corporation
Age: 61   Director Since: 2019   Committee Membership: • ESG • Governance • QCE

 

12

Proposal 1: Election of Directors

 

Director Nomination and Qualifications

Our Board regularly reviews its composition and is committed to recommending a group of directors who represent a diverse mix of viewpoints, skills, experience and backgrounds that align with the Company’s business and strategic goals. The Nominating and Corporate Governance Committee (Governance Committee) is responsible for nominating individuals, and the entire Board is responsible for selecting those who hold these characteristics to stand for shareholder election at each annual meeting as well as to fill any vacancies on the Board as they arise.

Since late 2017, the Governance Committee has focused its refreshment efforts on identifying candidates to further strengthen the Board’s effectiveness. To date, this process has resulted in the identification and appointment of eight new independent directors (eight of whom are up for election this year) who collectively bring deep healthcare, financial, public sector, operational expertise, cybersecurity, systems planning and crisis management skills that complement the current skillsets and enhances the effectiveness of the overall Board. In addition, each of our directors has the dedication and leadership qualities that enable them to exercise robust oversight of the Company, especially as the Company continues to navigate a transformation amidst the challenges and opportunities in the healthcare industry.

Nomination Process

The Governance Committee considers candidates based on the recommendation of, among others, our Board members and our shareholders. Board members recommended Admiral Haney in 2021 to the Governance Committee. The Governance Committee may also engage professional search firms and other consultants to assist in identifying, evaluating and conducting due diligence on potential candidates. We intend to continue to actively engage with our shareholders regarding Board composition and director qualifications, including considering their input on potential director candidates. Once potential candidates have been identified, they typically meet with each member of the Board and pass a thorough screening process before the Governance Committee makes a final recommendation to the Board. This process involves a rigorous evaluation that assesses attributes beyond specific business skills, including character, diversity and personal and professional integrity.

Shareholders may propose nominees for election in accordance with the terms of our bylaws or recommend candidates for consideration by the Board by writing to the Governance Committee in care of the Corporate Secretary at Tenet Healthcare Corporation, 14201 Dallas Parkway, Dallas, Texas 75254, or by email to boardofdirectors@tenethealth.com. For more detailed information regarding the process by which shareholders may nominate directors, including under our proxy access provisions, please refer to “Other Information—Shareholder Proposals” below and our bylaws. Our bylaws may be found under the “Governance” heading in the “Investors” section on our website at www.tenethealth.com.

 

CANDIDATE RECOMMENDATIONS

GOVERNANCE COMMITTEE

BOARD OF DIRECTORS

SHAREHOLDERS

From Shareholders, Management, Directors, Professional Search Firms and Other Sources

Discusses & Reviews Qualifications and Expertise Enterprise Strategy Board Needs Diversity Interviews Recommends Nominees

Discusses Governance Committee Recommendations Analyzes Independence Selects Nominees

Vote on Nominees at Annual Meeting

Assessment of Board Composition and Criteria for Board Membership

The Governance Committee evaluates the composition of the Board on an ongoing basis and considers potential nominees to the Board as appropriate. As part of this process, the Governance Committee reviews the composition of the Board as a whole, including the balance of business backgrounds, diversity, qualifications, skillsets and other qualities represented on the Board to provide the right balance to effectively oversee management. The Governance Committee also reviews updated biographical information for each incumbent director on an annual basis, including information relating to changes in professional status, independence, other professional commitments and public company directorships. In light of our current

 

		2022 PROXY STATEMENT			13

Proposal 1: Election of Directors

 

 

structure and operations, and in consideration of the evaluation of the Board’s composition, the Governance Committee believes the following criteria should be represented on the Company’s Board:

 

Professionalism, dedication, business judgment, integrity and commitment to the Company’s mission				Diversity of personal and occupational backgrounds, including ethnicity, gender, experience and viewpoints				Service as the chief executive officer or in other senior leadership positions in a company or major governmental, professional or non-profit organization
Experience in the healthcare industry or other relevant industry experience				Expertise in financial and accounting matters and familiarity with the regulatory and corporate governance requirements applicable to public companies				Government, regulatory and public sector experience
Ability and willingness to commit adequate time to Board and committee matters				Degree to which the individual’s skills complement those of other directors and potential nominees				Familiarity with the communities in which we do business

Board Evaluations

The Governance Committee oversees the Board’s annual performance evaluation to determine whether the Board, its committees and individual directors are functioning well in view of their responsibilities and the Company’s business. To conduct the self-evaluation process with greater transparency and rigor, the Board has for many years retained a third-party advisor to interview each director, review their feedback, and facilitate a discussion based on the results at a special executive session of the Board. This comprehensive and disciplined approach to evaluation has been an important element to maintaining a high-performing and collaborative Board that can properly address risk management and execution of Company strategy.

On an annual basis, the Board and each committee conduct self-evaluations. The evaluations focus discussions on, among other things, the composition and effectiveness of the Board in light of changes in membership, the effectiveness of Mr. Rittenmeyer and Senator Kerrey in their respective leadership roles, and the performance of each committee and committee chair. The Lead Director, in conjunction with the Governance Committee, also takes an oversight role in the Board performance evaluation process. In addition, directors provide input on key focus areas for the Board in the upcoming year. The results of the evaluation are reviewed by the Lead Director who reports the results to the Board. As part of the annual performance evaluation process, each committee also compares its performance with the requirements of its charter. As part of the Board’s last annual evaluation, the Board noted, among other things, that its processes and committees were functioning properly, noting healthy levels of debate, collaboration and respect among directors.

 

 

14

Proposal 1: Election of Directors

 

Director Nominees’ Qualifications and Experience

Based on the review process described above, the Governance Committee concluded that our eleven director nominees possess the diversity of experience, skills and other characteristics best suited to meet the needs of the Board and the Company in light of our current business and operating environment. The following table highlights several core skills and experiences of our current nominees, in addition to those described in the director biographies outlined beginning on page 7.

 

Personal Qualities and Diversity. The Governance Committee determined that each nominee has demonstrated a commitment to professionalism and high integrity. In particular, the Governance Committee noted that each nominee has the ability to provide candid and direct feedback as well as effective oversight of the Company’s operations and management on behalf of all shareholders. Additionally, our Board includes a diverse group of individuals of differing ages, genders, ethnicities and backgrounds. Three of our eleven director nominees are women, and in 2019 the Board appointed Ms. Romo and Ms. FitzGerald to chair our Audit and Governance committees, respectively.

Special Considerations Regarding Service on Other Boards. Our directors must seek the approval of the Governance Committee prior to serving on another public company’s board. In addition, the Governance Committee limits the number of public boards on which a director may serve in addition to our Board to three, or two in the case of directors currently serving as chief executive officers or in equivalent positions of public companies. All of the Company’s directors are in compliance with these requirements. Mr. Rittenmeyer serves on only one other public company board of directors and Dr. Sutaria does not serve on any other public company board.

Director Independence

Our independence requirements for our Board are set forth in our Corporate Governance Principles, available under the “Governance” heading in the “Investors” section on our website at www.tenethealth.com. Under our Corporate Governance Principles, at least two thirds of the Board must consist of “independent” directors. The Board will not consider a director to be independent unless the Board affirmatively determines that the director has no material relationship with Tenet and the director otherwise qualifies as independent under the corporate governance standards of the New York Stock Exchange (NYSE). The Board reviews each director’s independence at least annually and has made the affirmative determination that each of our current non-employee directors has no material relationship with the Company and is independent. The only two non-independent directors who serve on our Board are our Executive Chairman, Mr. Rittenmeyer, and our Chief Executive Officer, Dr. Sutaria.

In making its independence determinations, the Board broadly considers all relevant facts and circumstances and focuses on the organizations with which each director has an affiliation. If a director or member of the director’s immediate family has a material relationship with the Company, the Board reviews the interest to determine if it would preclude an independence determination.

The Audit Committee, the Human Resources Committee (HR Committee) and the Governance Committee are composed exclusively of independent directors as required by the NYSE. Additionally, the ESG Committee and the Quality, Compliance and Ethics Committee (QCE Committee) are composed exclusively of independent directors. All directors serving on the Audit Committee meet the more stringent independence standards for audit committee members required by the Securities and Exchange Commission (SEC), and all directors serving on the HR Committee meet the more stringent independence standards for compensation committee members required by the NYSE.

 

		2022 PROXY STATEMENT			15

 

 

Corporate Governance and Board Practices

Commitment to Sound Corporate Governance Policies and Practices

Tenet is committed to maintaining corporate governance policies and practices that protect the long-term interests of our shareholders and promote Board and management accountability. Our Board recognizes that this requires us to review and refine our corporate governance practices on an ongoing basis to continue to align with evolving market practices and the best interests of our Company and shareholders. Some of our key corporate governance policies and practices include:

 

 

Shareholder Rights •  Annual election of directors •  Majority vote standard and director resignation policy in uncontested elections •  Shareholder right to call special meetings at 25% threshold •  Proxy access •  One-year limit on “poison pills” unless approved by shareholders				Board Practices •  All directors are independent other than our Executive Chairman and Chief Executive Officer •  Highly diverse and experienced Board •  Independent Lead Director with clearly defined and robust responsibilities •  Commitment to Board refreshment practices, including committee chair rotation		•  Self-evaluation of all directors •  Board oversight of political contributions •  Regular executive sessions of independent directors •  Ongoing engagement with shareholders •  Increased focus on ESG matters with recently formed ESG Committee

Our Board has also adopted Corporate Governance Principles that provide the framework for our existing corporate governance policies and practices, which the Board reviews annually. These Corporate Governance Principles address in detail matters such as director independence, director qualifications and responsibilities, director compensation, and director and officer stock ownership and retention. For more information, please see our Corporate Governance Principles under the “Governance” heading in the “Investors” section on our website at www.tenethealth.com*.

 

*	Information included on our website and in any reports on our website shall not be deemed a part of, and is not incorporated by reference into, this Proxy Statement.

Board Leadership Structure

Senator Kerrey has served as our independent Lead Director since October 2017, shortly after Mr. Rittenmeyer became Executive Chairman in August 2017. The Company’s governing documents provides the Board the flexibility to determine the appropriate leadership structure for the Company based on our particular circumstances at the time. The Governance Committee regularly reviews the Board’s leadership structure to assess the most effective structure based on applicable facts and circumstances at the time. This flexibility ensures the Board is best able to provide appropriate oversight of the Company as well as address any circumstances the Company may face, as no single leadership model is universally or permanently appropriate in all circumstances. The Board believes that this flexibility has served the Company and its shareholders well during the transformation of the business that is underway.

With the appointment of Dr. Sutaria as Chief Executive Officer in September 2021, the Board determined the transition period from Mr. Rittenmeyer to Dr. Sutaria would be most effective if Mr. Rittenmeyer continued as Executive Chairman and was engaged with Dr. Sutaria as he took control of the balance of the organization. Mr. Rittenmeyer continues to focus on leading the Board with a dual responsibility to support, coach and provide experienced insights to Dr. Sutaria throughout the transition. Both of these individuals have shown clear and effective leadership the past 3 years and their ability to effectively communicate with a single voice and ensure execution has delivered impressive results. The Governance Committee and the Board believe that this leadership structure is the most appropriate one for the Company at this time.

 

16

Corporate Governance and Board Practices

 

Role of Independent Lead Director of the Board

The role of our Lead Director is set forth in our Corporate Governance Principles. Senator Kerrey, as independent Lead Director of the Board, coordinates the activities of the Board and exercises a robust set of duties described below. Specifically, in his role as independent Lead Director, Senator Kerrey:

•

Presides at all meetings at which the Chairman is not present

•

Chairs executive sessions of independent directors of the Board

•

Serves as the liaison between the Chairman and independent directors

•

Reviews and approves information sent to the Board

•

Reviews and approves Board meeting agendas and schedules

•

Calls meetings of independent directors as necessary

•

Participates in consultation and direct communication with shareholders

•

Advocates on behalf of the Board in meetings with investors, legislators, regulators and other government officials

•

Serves an oversight role, in conjunction with the Governance Committee, in the Board performance evaluation process

In addition to his formal duties, Senator Kerrey has participated in in-person engagement meetings with a number of our significant shareholders to discuss and seek feedback on various matters regarding the Company’s strategy and governance practices, establishing a direct line of communication between shareholders and independent members of our Board. Senator Kerrey shares the feedback with the full Board so that it may be incorporated into the Board’s decision-making processes.

Board and Committee Organization and Responsibilities

Board Meetings and Attendance

We are governed by our Board. Members of our Board are kept informed of our business through discussions with our Executive Chairman, Chief Executive Officer and other senior officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. Directors are also encouraged to attend continuing education courses relevant to their service on the Company’s Board. Significant business decisions are generally considered by the Board as a whole. The Board met 8 times during 2021. The independent directors of the Board, the Board and each committee of the Board frequently meet in executive sessions, including at least once during each regularly scheduled Board meeting.

Each incumbent director who served during 2021 participated in at least 75% of the aggregate meetings of the Board and the committees on which he or she served during the period he or she served as a director and committee member. Board members are encouraged to attend our annual meeting of shareholders. All 11 directors elected at last year’s annual meeting were in attendance at the 2021 Annual Meeting.

 

		2022 PROXY STATEMENT			17

Corporate Governance and Board Practices

 

 

Committees

Tenet’s Board has four standing committees: Audit Committee, HR Committee, Governance Committee, and QCE Committee. The Board also has one special committee: ESG Committee. The following table identifies the current members of each of our committees.

 

Director		Audit*		Human Resources		Governance		QCE		ESG
James L. Bierman								Chair
Richard W. Fisher										Chair
Meghan M. FitzGerald						Chair
Cecil D. Haney
J. Robert Kerrey				Chair
Christopher S. Lynch
Richard J. Mark
Ronald A. Rittenmeyer
Tammy Romo		Chair
Saum Sutaria
Nadja Y. West

 

*	All members of the Audit Committee have been designated as financially literate within the meaning of the NYSE listing standards. Mr. Fisher, Mr. Lynch and Ms. Romo have been designated as audit committee financial experts, as defined by SEC rules.

Each of the Board’s standing committees operates under a written charter that is reviewed and approved annually by the respective committee. The charters are available for viewing under the “Governance” heading in the “Investors” section on our website at www.tenethealth.com. The Board and each committee may retain independent advisors and consultants, at the Company’s cost, to assist the directors in carrying out their responsibilities.

 

18

Corporate Governance and Board Practices

 

The Audit Committee				Meetings held in 2021:		8
Membership: Romo (Chair), 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 2021:		2
Membership: Fisher (Chair), 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

 

		2022 PROXY STATEMENT			19

Corporate Governance and Board Practices

 

 

The Human Resources Committee				Meetings held in 2021:		6
Membership: Kerrey (Chair), Fisher, Lynch, Mark, Romo (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 •  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

 

 

20

Corporate Governance and Board Practices

 

The Nominating and Corporate   Governance Committee

Meetings held in 2021:

4

Membership: FitzGerald (Chair), Bierman, Haney, West (All Independent)

Primary Responsibilities: •  Identify and evaluate existing and potential corporate governance issues, and make recommendations to the Board concerning our Corporate Governance Principles and other corporate governance matters •  Review and recommend individuals qualified to become Board members and recommend to the Board candidates to stand for election or re-election to the Board •  Consider amendments to the Company’s articles of incorporation and bylaws with respect to corporate governance and make recommendations to the Board concerning such proposed amendments •  Review and make recommendations to the Board regarding Board size, composition and structure •  Review and approve related-person transactions

Key Skills and Experience: •  Corporate governance expertise •  Board succession planning •  Public company board service and experience overseeing large organizations

 

 

The Quality, Compliance and Ethics Committee

Meetings held in 2021:

4

Membership: Bierman (Chair), FitzGerald, Kerrey, West (All Independent)

Primary Responsibilities: •  Assist the Board with overseeing and reviewing Tenet’s significant healthcare-related regulatory and compliance issues, including its compliance programs and the status of compliance with applicable laws, regulations and internal procedures •  Oversee performance under the Company’s Quality, Compliance and Ethics Program Charter •  Receive, and review and consult with management on, periodic reports from the Ethics and Compliance department on all aspects of the compliance program, including efforts in risk assessment, development of policies and procedures, training, auditing and monitoring, and investigations and remediation of compliance matters •  Receive and review periodic reports from the Clinical Quality department regarding efforts to advance quality healthcare •  Oversee the performance of the Company’s Chief Compliance Officer, who reports directly to the QCE Committee

Key Skills and Experience: •  Experience in establishing and ensuring adherence to quality and compliance controls •  Expertise in compliance-related policies and procedures •  Knowledge of and commitment to ethical business practices

 

		2022 PROXY STATEMENT			21

Corporate Governance and Board Practices

 

 

HR Committee Interlocks and Insider Participation

No member of the HR Committee was at any time during 2021 or at any other time an officer or employee of the Company, and no member had any relationship with the Company requiring disclosure as a related person transaction under “Certain Relationships and Related Person Transactions” on page 26 of this Proxy Statement. None of our executive officers has served on a board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of our Board or HR Committee during 2021.

Role of Board and its Committees in Risk Oversight

Management is primarily responsible for the identification, assessment and management of the various risks that we face. The Board oversees this process as an integral and continuous part of the Board’s oversight of our business. The Board receives regular reports from the heads of our principal businesses and corporate functions that include discussions of the risks involved in their respective areas of responsibility. The Board is routinely informed of developments that could affect our risk profile or other aspects of our business. Among other things, the Board has requested that the Company’s management and its internal and external legal counsel advise it promptly of any material developments relating to litigation, regulatory proceedings, and investigations and compliance issues. The Board considers the oversight of regulatory and litigation risk to be one of its highest priorities. In addition, the Board has identified the oversight of cybersecurity risks to be one of its priorities and receives regular reports from the Company’s management on the security of the Company’s information technology systems.

The Board’s committees oversee risks related to their respective areas, as further described below. The Board is kept informed of its committees’ risk oversight and other activities primarily through reports of the committee chairs to the full Board. These reports are presented at every regular Board meeting, as well as at other times when appropriate. As risk-related issues sometimes overlap, certain issues are addressed at the full Board level. In addition, as part of its annual self-evaluation process, the Board discusses and evaluates its ongoing role in enterprise risk oversight.

Role of Audit Committee in Risk Oversight

Our Audit Committee is primarily responsible for overseeing risk management processes relating to our accounting practices, financial reporting and disclosure controls and procedures, corporate finance and general business operations. Among other responsibilities, the Audit Committee:

•

Receives quarterly reports from management on business and operational risks, internal audit reports relating to the integrity of our internal financial reporting controls and procedures, potential loss contingencies resulting from pending or threatened litigation or regulatory proceedings, and investigations and reports made to the Company from our Ethics Action Line or any other sources relating to allegations of financial fraud or other infractions.

•

Meets regularly with our Executive Chairman, Chief Executive Officer, Chief Financial Officer, Controller, General Counsel and Chief Compliance Officer, as well as our external and internal auditors, to discuss potential risks and other contingencies relating to our business.

•

Meets on a quarterly basis to review these topics with selected chief executive officers and/or other senior officers of our major operating units.

•

Reviews financial and enterprise risk exposures, including material risk issues in connection with its review of our quarterly and annual filings with the SEC.

•

Reviews the Company’s cybersecurity program at least annually and receives frequent updates on cybersecurity matters.

•

Reports and discusses the outcome of its meetings to the full Board, including any other material risks identified by the Audit Committee in the course of its deliberations that require discussion or action by the full Board.

Role of Quality, Compliance and Ethics Committee in Risk Oversight

Our QCE Committee is primarily responsible for overseeing our assessment and management of regulatory and compliance risk. In particular, the QCE Committee:

•

Oversees our information, procedures and reporting systems to provide reasonable assurance that: (1) our operations comply with applicable laws and regulations, particularly those related to healthcare providers; (2) we, including our directors and employees, act in accordance with appropriate ethical standards; and (3) our subsidiaries’ hospitals and other facilities deliver quality medical care to their patients.

 

22

Corporate Governance and Board Practices

 

•

Oversees our Compliance Program, which is governed by our Quality, Compliance and Ethics Program Charter. Our Compliance Program is intended to foster compliance with federal and state laws and regulations applicable to healthcare providers and receives quarterly reports from our Chief Compliance Officer (who reports directly to the QCE Committee), our Ethics and Compliance department, and our internal and external legal, regulatory and other officers and advisors.

Role of Human Resources Committee in Risk Oversight

Our HR Committee is responsible for assessing our compensation policies and practices relative to all our employees, including non-executive officers, to determine if the risks arising from these policies and practices are reasonably likely to have a material adverse effect on the Company. In performing its duties, the HR Committee meets at least annually with our management and the HR Committee’s independent compensation consultant to review and discuss potential risks relating to our employee compensation plans and programs. The HR Committee reports to the Board any risks associated with our compensation plans and programs, including recommended actions to mitigate such risks.

The HR Committee has determined that there are no risks arising from our compensation policies and practices that are reasonably likely to have a material adverse effect on the Company. This finding is based upon the HR Committee’s ongoing review of our compensation programs and practices, the mechanisms in our compensation plans and programs intended to reduce the risk of conduct reasonably likely to have a material adverse effect on our company, and an overall risk assessment of such programs. Among other things, the HR Committee has reviewed our pay philosophy, balance of cash and equity compensation, balance of long-term and short-term performance periods in our plans and programs, and our use of performance metrics that encourage management to act in the long-term interest of our shareholders. The HR Committee has also considered our equity grant administration policy, stock ownership requirements, incentive pay policies on clawbacks and bonus modifiers, as well as our internal financial reporting and regulatory compliance procedures.

Role of ESG Committee in Risk Oversight

Recognizing the importance of ESG matters to the Company and its stakeholders, our Board formed an ESG Committee in February 2021 in order to provide support for the Company’s ongoing efforts in this area. Our ESG Committee, which is a special committee of the Board consisting entirely of independent directors, is responsible for overseeing and supporting the Company’s commitment to ESG matters, such as climate change impacts, energy and natural resources conservation, environmental and supply chain sustainability, human rights, diversity and inclusion and other ESG issues that are relevant and material to the Company. In addition to discussing with management the Company’s ESG strategy, initiatives, and policies, the Committee monitors the operational, regulatory and reputational risks and impacts of ESG on the Company, and it provides input and guidance on communications with employees, investors and other stakeholders regarding ESG. This year we will publish our second annual ESG report, which outlines our commitment to the communities we serve and our objectives and progress in the areas of environmental sustainability, social initiatives and governance performance and is available in the “Investors” section on our website at www.tenethealth.com.*

 

		2022 PROXY STATEMENT			23

Corporate Governance and Board Practices

 

 

ESG

ESG Milestones

 

Formed in 2021 a new committee within our Board of Directors focused on matters directly related to ESG		Released initial ESG report in 2021 that details the ways Tenet generates sustainable financial results as we work to make the world a better place		Ongoing Board refreshment, including the addition of eight new, independent directors since 2017†
55% of the Board is diverse in terms of gender and/or ethnic diversity		Strong, independent Lead Director with robust responsibilities		Continued to navigate the COVID-19 pandemic with honor and professionalism demonstrated by our caregivers and staff working tirelessly on the frontlines
Fostered belonging and an inclusive workforce where nearly 50% of our employees are racially or ethnically diverse, including over 55% of new employees in 2021, and more than 75% are female		2022 plan to conduct enterprise-wide materiality assessment, designed to identify and assess potential environmental issues that could affect our business and/or our stakeholders

 

†	Includes General Lloyd J. Austin, III who resigned from the Board on January 22, 2021 following his confirmation by the U.S. Senate as Secretary of Defense.

 

24

Corporate Governance and Board Practices

 

ESG Guiding Principles

As a company that brings quality care to people every day, Tenet recognizes that our business and social purposes are inextricably linked. Tenet’s ESG program is focused on the business and societal impact of ESG. We believe our people, our operations, our facilities management and our governance must align properly to generate sustainable business practices for the betterment of all stakeholders we serve. While our responsibility lies, first and foremost, with the delivery of excellent medical care that is safe and compassionate, we equally embrace our commitment to cultivate a sustainable environment and an inclusive culture.

 

Our Mission

Our mission is to provide quality, compassionate care in the communities we serve. Our Vision is to consistently deliver the right care, in the right place, at the right time and to be a premier organization to work, where patient care and saving lives remain our focus. Our Values define who we are, what we stand for and what we CARE about – Compassion and respect for others and each other, supporting our communities and advocating for our patients; Acting with integrity and the highest ethical standards, always; Results delivered through accountability and transparency; and Embracing inclusiveness for all people in our workplace and the communities we serve.

Policies on Ethics and Conduct

Code of Conduct

All of our employees, including our Chief Executive Officer, Chief Financial Officer and Controller, are required to abide by Tenet’s policies on business conduct summarized in our Code of Conduct and conduct our business in a legal and ethical manner. The members of our Board of Directors and all of our contractors having functional roles similar to our employees are also required to abide by our Code of Conduct. Tenet’s policies form the foundation of a comprehensive compliance program that includes compliance with corporate policies and procedures, extensive training, robust auditing and monitoring, an open relationship among colleagues to foster good business conduct, and a high level of integrity. Our policies and procedures cover all major areas of professional conduct, including quality patient care, compliance with all applicable laws and regulations, appropriate use of our assets, protection of patient information, avoidance of conflicts of interest and employment practices.

Employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of Tenet’s policies on business conduct. Retaliation against any employee who in good faith seeks advice, raises a concern, reports misconduct or provides information in an investigation is strictly prohibited. The Code of Conduct is published in the “Our Commitment To Compliance” section under the “About Us” heading on our website at www.tenethealth.com. In addition, amendments to the Code of Conduct and any grant of a waiver from a provision of the Code of Conduct requiring disclosure under applicable SEC and NYSE rules will be disclosed at the same location as the Code of Conduct on our website at www.tenethealth.com.

As part of the program, we provide compliance training at least annually to every employee as well as to our Board and certain physicians and contractors.

 

		2022 PROXY STATEMENT			25

Corporate Governance and Board Practices

 

 

Quality, Compliance and Ethics Program Charter

We operate our ethics and compliance program pursuant to a Quality, Compliance and Ethics Program Charter, which has been approved by our QCE Committee. The Charter requires all Company employees and many of our contractors to:

•

Follow our Code of Conduct.

•

Participate in annual ethics training and specialized compliance training tailored to the individual’s job duties.

•

Work with our hospital, corporate and business unit compliance teams to resolve issues of concern.

•

Contact the Tenet Ethics Action Line at 1-800-8ETHICS, via email or through our intranet website, to report any conduct that they believe in good faith to be an actual or apparent violation of Tenet’s policies.

Our Quality, Compliance and Ethics Program Charter may be found in the “Our Commitment To Compliance” section under the “About Us” heading on our website at www.tenethealth.com*.

Certain Relationships and Related Person Transactions

Our written Code of Conduct requires all employees, including our executive officers, and members of our Board to report conflicts of interest and those situations in which there may be the appearance of a conflict of interest. The full text of our Code of Conduct is published on our website at www.tenethealth.com, and a description of our policies on ethics and conduct can be found above. In the event that Tenet or its subsidiaries is a participant in a transaction in which any director, executive officer, holder of more than 5% of our outstanding shares or any immediate family member of any of these persons has a direct or indirect material interest, our policy is to require that any such transaction be reviewed and approved by the Governance Committee, which is composed entirely of independent directors. There were no “related person” transactions that require disclosure under the SEC rules since the beginning of our last completed fiscal year.

Communications with the Board of Directors by Shareholders and Other Interested Parties

Shareholders may communicate with the Board of Directors by email to boardofdirectors@tenethealth.com or by writing to the Board in care of the Corporate Secretary, Tenet Healthcare Corporation, 14201 Dallas Parkway, Dallas, Texas 75254. Shareholder communications will be reviewed internally to determine if the shareholder’s concern can best be addressed by referral to a Tenet department, such as Investor Relations. All other communications will be referred to the Corporate Secretary, who will determine if the communication should be brought to the attention of the full Board, the Chairman of the Board or a particular Board committee or Board member.

Other interested parties may make their concerns known to our non-employee directors by following the procedures for reporting concerns to the Audit Committee set forth in our Corporate Governance Principles, which are available under the “Governance” heading in the “Investors” section on our website at www.tenethealth.com.

 

26

 

Director Compensation

The HR Committee reviews our non-employee director compensation programs each year with the assistance of the HR Committee’s independent compensation consultant. The Board considers any changes recommended by the HR Committee following its review. In May 2021, the value of Restricted Stock Units (RSUs) granted annually to non-employee directors was increased from $175,000 to $190,000 and the initial grant of RSUs to newly appointed directors valued at $65,000 was eliminated in order to align with market practices.

Employee directors do not receive any compensation for their service as a director. All 2021 compensation for our Executive Chairman and former CEO, Mr. Rittenmeyer, and our Chief Executive Officer, Dr. Sutaria, is shown in the 2021 Summary Compensation Table on page 52.

Our 2021 annual compensation program for non-employee directors was structured as follows:

 

Annual Compensation Element		Amount
Annual Cash Retainer		$	95,000
Annual Grant of RSUs		$	190,000
Annual Committee Chair Cash Retainers:
•  Audit Committee		$	25,000
•  Human Resources Committee		$	20,000
•  Nominating and Corporate Governance Committee		$	17,500
•  Quality, Compliance and 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

Non-employee directors also receive $2,000 per committee meeting attended and for Board meetings receive:

•

no fee for the first seven Board meetings each year; and

•

for additional meetings, $3,000 per in-person meeting and $1,500 per telephonic meeting attended.

A newly appointed director receives a prorated annual RSU grant. All annual cash fees are prorated for partial year service. Directors are reimbursed for any travel expenses and other out-of-pocket costs incurred while attending meetings.

 

		2022 PROXY STATEMENT			27

Director Compensation

 

 

2021 Director Compensation Table

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)(1)(2)				Total ($)
Lloyd J. Austin, III(3)			5,806				—				5,806
James L. Bierman			130,000				190,045				320,045
Richard W. Fisher			135,250				190,045				325,295
Meghan M. FitzGerald			134,000				190,045				324,045
Cecil D. Haney			116,653				312,132	(4)			428,785
J. Robert Kerrey			286,500				240,004				526,504
Christopher S. Lynch			124,500				190,045				314,545
Richard J. Mark			126,500				190,045				316,545
Tammy Romo			149,500				190,045				339,545
Nadja Y. West			116,500				190,045				306,545

 

(1)

Amounts shown in this column reflect the grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, of RSU awards granted under our stock incentive plan. Assumptions used in the calculation of these amounts are discussed in the footnotes below and/or in Note 10 to our consolidated financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K.

 

(2)

The amounts shown in this column reflect annual RSU grants applicable to the 2021-2022 board service year valued at approximately $190,000. We calculated the grant date fair value of these RSUs based on the NYSE closing price per share of our common stock on such date, adjusted for a discount for illiquidity of approximately 28% to reflect the mandatory post-vest holding period applicable to the 2021 annual awards. On May 7, 2021, based on the NYSE closing price of $66.84 per share of our common stock (adjusted as described in the preceding sentence), each non-employee director then serving was granted 3,960 RSUs under the program, and Senator Kerrey was granted an additional 1,041 RSUs in respect of his service as Lead Director. All equity awards then held by our non-employee directors were fully vested as of December 31, 2021.

 

(3)	General Austin resigned from the Board effective January 22, 2021 following his confirmation by the U.S. Senate as Secretary of the U.S. Department of Defense.

 

(4)	Mr. Haney was appointed to the Board effective January 8, 2021. In addition to the standard 2021-2022 annual RSU grant, his “Stock Awards” value includes an initial grant of RSUs valued at approximately $65,000 as well as a pro-rata grant for the 2020-2021 service year.

Compensation Plans Applicable to Directors

Stock Incentive Plans

Each non-employee director receives an annual award under our stock incentive plan of RSUs that is meant to compensate the director for service on the Board beginning on the date of that year’s annual shareholders meeting and ending on the date of the following year’s annual shareholders meeting. These grants are typically made on the first business day following the annual shareholders meeting and vest immediately on the grant date. A mandatory post-vest holding period of three years is applied to these annual RSU awards, which are settled in shares of our common stock on the third anniversary of the date of grant (unless deferred under the Special RSU Deferral Plan, discussed below).

Prior to May 2021, on the first or 15th day of any month (or, if such date is not a trading day, the following date that is a trading day) following the date on which a new non-employee director is elected to the Board, the director received a grant of that number of RSUs equal to $65,000 divided by the NYSE closing price per share of our common stock on the date of the grant. These one-time awards vested immediately on the grant date and are settled in shares of our common stock within 60 days of the termination of the director’s service on the Board.

Special RSU Deferral Plan

We adopted the Special RSU Deferral Plan to permit directors to defer the settlement of their annual RSU grants under our stock incentive plan for a period of five years as provided under the terms of the award agreement. In the event of a change of control of the Company, the RSUs will be settled on the subsequent deferral date irrespective of whether the underlying award agreement would provide for earlier settlement by reason of such change in control. As of the record date, none of our current directors have elected to defer settlement of RSU grants pursuant to the terms of the Special RSU Deferral Plan.

 

28

Director Compensation

 

2006 Deferred Compensation Plan

Under our 2006 Deferred Compensation Plan (DCP), directors and eligible employees may defer all or a portion of their compensation paid during a given calendar year. For directors, compensation is defined as cash compensation from retainers, meeting fees and committee fees. Senator Kerrey was the only non-employee director who participated in the DCP in 2021. A more complete description of the DCP can be found under “Nonqualified Deferred Compensation—Deferred Compensation Plan” beginning on page 59.

Director Stock Ownership and Retention Requirements

The Board has adopted stock ownership and retention requirements that require each non-employee director with more than one year of service on the Board to own shares of our stock. In addition, each non-employee director is required to own shares of our stock with a value equal to five times the annual cash retainer within five years after the date on which the director joins the Board. Directors who have not satisfied their ownership requirements must retain 100% of any “net shares” received upon the exercise of stock options and the vesting of restricted stock or RSUs until such time as the requirements are met. For this purpose, “net shares” means the number of shares received upon exercise of stock options or upon vesting of restricted stock or RSUs less the number of shares sold or deducted to pay the exercise price (in the case of options), withholding taxes and any brokerage commissions. A detailed discussion of these requirements can be found under “Stock Ownership and Retention Requirements” beginning on page 49. As of the record date, all of our non-employee directors were in compliance with the requirements or within the applicable period to come into compliance.

 

		2022 PROXY STATEMENT			29

 

 

Executive Officers

Biographical information for the executive officers of the Company is set forth below. Biographical information for Mr. Rittenmeyer and Dr. Sutaria can be found under “Nominees for Election to the Board of Directors” on page 7.

 

		Paola M. Arbour, Executive Vice President and Chief Information Officer Ms. Arbour, 58, was appointed Tenet’s Chief Information Officer in May 2018 and Executive Vice President in March 2019. In this capacity, Ms. Arbour oversees the leadership and strategic direction for Tenet’s information technology (IT) systems and identifies opportunities to support the company’s expansive care network through the application of digital technology, data and automation, and customer experience. Ms. Arbour previously held the title of Senior Vice President from May 2018 to February 2019. Prior to Tenet, Ms. Arbour served as President at ProV International from November 2017 to April 2018, Vice President Services Global Delivery at ServiceNow from July 2016 to September 2017, and as Vice President of Service Delivery at Dell Services from December 2010 to April 2016. From 1985 to 2009, Ms. Arbour held several leadership roles within IT operations at Electronic Data Systems – both at the company’s headquarters and also in London and Frankfurt. In July 2021, Ms. Arbour was appointed to the board of directors of Texas Capital Bancshares, Inc. Ms. Arbour earned her bachelor’s degree in telecommunications arts and sciences from Michigan State University.

 

		Thomas W. Arnst, Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary Mr. Arnst, 59, serves as Tenet’s Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary of Tenet Healthcare, where he leads enterprise Human Resources, Legal and Government Relations. He also serves as Chief Risk Officer. Prior to assuming these roles, Mr. Arnst served as Chief Administrative Officer, General Counsel and Corporate Secretary of our Conifer subsidiary. He has more than 30 years of experience working in leadership roles across healthcare, outsourcing and financial services, among other industries. Before joining Conifer in 2018, Mr. Arnst served as Chief Administrative Officer at Millennium Health. Previous positions also include Executive Vice President, Chief Administrative Officer, General Counsel, Head of Global Human Resources and Corporate Secretary at Expert Global Solutions. During his career, Mr. Arnst has also held executive positions at Safety-Kleen, AmeriServe, RailTex and Ryder. He is a graduate of the University of Miami, where he received his Juris Doctor and his Master of Laws. He obtained his Bachelor of Business Administration degree in Finance from Florida Atlantic University.

 

		Daniel J. Cancelmi, Executive Vice President and Chief Financial Officer Mr. Cancelmi, 59, was appointed Tenet’s Chief Financial Officer in September 2012 and Executive Vice President in March 2019. He previously served as Senior Vice President from April 2009, Principal Accounting Officer from April 2007 and Controller from September 2004. Mr. Cancelmi was a Vice President and Assistant Controller at Tenet from September 1999 until his promotion to Controller. He joined the Company as Chief Financial Officer of Hahnemann University Hospital. Prior to that, he held various positions at PricewaterhouseCoopers, in the Pittsburgh office and in the firm’s National Accounting and SEC office in New York City. Mr. Cancelmi is a certified public accountant licensed in the states of Florida and Texas who received his bachelor’s degree in accounting from Duquesne University in Pittsburgh. He is also a member of the American and Florida Institutes of Certified Public Accountants and the Texas Society of Certified Public Accountants.

 

		Lisa Y. Foo, Executive Vice President, Commercial Operations Ms. Foo, 31, was appointed Tenet’s Executive Vice President, Commercial Operations in March 2022. In this capacity, Ms. Foo leads several enterprise functions including strategy, business development, marketing, data and analytics, and procurement. She previously served as Vice President, Chief Commercial and Strategy Officer from 2019 to March 2022. Prior to that, Ms. Foo held various positions at McKinsey & Company, including Associate Partner from 2017 to 2019 in the San Francisco office. She earned her Bachelor of Science in Biological Engineering from Massachusetts Institute of Technology.

 

30

 

Securities Ownership

Securities Ownership of Management

The table below discloses the shares, options and other securities beneficially owned by our directors and director nominees, each of our named executive officers (NEO), and our current directors and executive officers as a group, as of March 1, 2022 (unless indicated below otherwise). No director or current executive officer has pledged any shares of our common stock.

 

Name		Shares Beneficially Owned (1)
		Shares of Common Stock(2)				Options Exercisable Within 60 Days of March 1, 2022				Percent of Class as of March 1, 2022
Audrey Andrews(3)			9,031				40,033				*
Paola Arbour			8,568				38,556				*
Thomas W. Arnst			8,742				-0-				*
James L. Bierman			46,202	(4)			-0-				*
Daniel J. Cancelmi			381,815				61,383				*
Richard W. Fisher			37,965	(5)			-0-				*
Meghan M. FitzGerald			27,751	(6)			-0-				*
Cecil D. Haney			7,017	(7)			-0-				*
J. Robert Kerrey			80,770	(8)			-0-				*
Christopher S. Lynch			26,080	(9)			-0-				*
Richard J. Mark			45,785	(5)			-0-				*
Ronald A. Rittenmeyer			601,218	(10)			56,353	(11)			*
Tammy Romo			60,762	(12)			-0-				*
Saumya Sutaria			323,375				-0-				*
Nadja Y. West			23,944	(13)			-0-				*
Current executive officers and directors as a group (15 persons)(14)			1,683,214	(15)			156,292				1.7	%

 

*	Less than 1%.

 

(1)	Except as indicated, each individual named has sole control as to investment and voting power with respect to the securities owned.

 

(2)	As noted below, the totals in this column for each non-employee director include RSUs granted under the terms of our stock incentive plans. These RSUs are settled in shares of our common stock either upon termination of service or upon the third anniversary of the date of grant.

 

(3)	On December 31, 2021, Ms. Andrews ceased serving as an executive officer, but is a NEO for 2021.

 

(4)	Includes 30,468 RSUs granted under our stock incentive plans.

 

(5)	Includes 30,526 RSUs granted under our stock incentive plans.

 

(6)	Represents 27,751 RSUs granted under our stock incentive plans.

 

(7)	Represents 7,017 RSUs granted under our stock incentive plans.

 

(8)	Includes 33,231 RSUs granted under our stock incentive plans.

 

(9)	Represents 26,080 RSUs granted under our stock incentive plans.

 

(10)	Includes 15,000 shares held by Mr. Rittenmeyer’s spouse.

 

(11)	Represents 56,353 RSUs granted under our stock incentive plans. These RSUs are scheduled to vest and settle in shares of our common stock on March 31, 2022.

 

(12)	Includes 27,227 RSUs granted under our stock incentive plans.

 

(13)	Includes 22,944 RSUs granted under our stock incentive plans.

 

(14)	Does not include securities owned by Ms. Andrews, who is a NEO but not a current executive officer.

 

(15)	Includes RSUs granted to non-employee directors under our stock incentive plans.

 

 

		2022 PROXY STATEMENT			31

Securities Ownership

 

 

Securities Ownership of Certain Shareholders

Based on reports filed with the SEC, each of the following entities owns more than 5% of our outstanding common stock as of the dates indicated below. We know of no other entity or person that beneficially owns more than 5% of our outstanding common stock.

 

Name and Address		Number of Shares Beneficially Owned					Percent of Class as of    March 1, 2022
BlackRock, Inc.     55 East 52nd Street     New York, NY 10055				12,068,110	(1)				11.06	%
The Vanguard Group, Inc.     100 Vanguard Blvd.     Malvern, PA 19355				10,855,165	(2)				9.95	%
Glenview Capital Management, LLC     767 Fifth Avenue, 44th Floor     New York, NY 10153				7,327,108	(3)				6.71	%
Harris Associates L.P.     111 S. Wacker Drive, Suite 4600     Chicago IL 60606				6,000,495	(4)				5.50	%
Invesco Ltd.     1555 Peachtree Street NE, Suite 1800     Atlanta, GA 30309				5,553,758	(5)				5.09	%

 

(1)

Based on a Schedule 13G/A filed with the SEC on January 27, 2022 by BlackRock, Inc., on behalf of itself and its named subsidiaries and affiliates (collectively, “BlackRock”), as of December 31, 2021. BlackRock reported sole voting power with respect to 11,865,373 of the shares indicated above and sole dispositive power with respect to all of the shares indicated above.

 

(2)

Based on a Schedule 13G/A filed with the SEC on February 10, 2022 by The Vanguard Group, Inc., on behalf of itself and its named subsidiaries and affiliates (collectively, “Vanguard”), as of December 31, 2021. Vanguard reported sole voting power with respect to 0 of the shares indicated above, shared voting power with respect to 101,307 of the shares indicated above, sole dispositive power with respect to 10,667,596 of the shares indicated above and shared dispositive power with respect to 187,569 of the shares indicated above.

 

(3)

Based on a Schedule 13D/A filed with the SEC on February 14, 2022 by Glenview Capital Management, LLC and its named subsidiaries and affiliates (collectively, “Glenview”), and Lawrence M. Robbins, as of December 31, 2021, and additional information available to the Company as described in this footnote. Glenview Capital Management, LLC serves as an investment manager to various Glenview funds, and Mr. Robbins is the Chief Executive Officer of Glenview Capital Management. Glenview and Mr. Robbins reported shared voting and investment power with respect to all of the shares indicated above.

 

(4)	Based on a Schedule 13G/A filed with the SEC on February 11, 2022 by Harris Associates L.P. (Harris), as of December 31, 2021. Harris reported sole voting power with respect to 3,332,510 shares and sole dispositive power with respect to all of the shares indicated above.

 

(5)

Based on a Schedule 13G filed with the SEC on February 14, 2022 by Invesco Ltd. (Invesco), as of December 31, 2021. Invesco, together with certain of its subsidiaries and in its capacity as a parent holding company to its investment advisors, reported sole voting power with respect to 5,439,826 shares and sole dispositive power with respect to all of the shares indicated above.

 

32

 

Compensation Discussion & Analysis

This Compensation Discussion and Analysis (CD&A) describes our executive compensation programs, our process for determining executive compensation and the compensation paid to the following NEOs for 2021:

 

Named Executive Officer		Title
Ron Rittenmeyer		Executive Chairman and former Chief Executive Officer(1)
Saum Sutaria		Chief Executive Officer(1)
Dan Cancelmi		Executive Vice President and Chief Financial Officer
Tom Arnst		Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary(2)
Paola Arbour		Executive Vice President and Chief Information Officer
Audrey Andrews		Former Executive Vice President and General Counsel(2)

 

(1)	Effective September 1, 2021, Dr. Sutaria succeeded Mr. Rittenmeyer as Chief Executive Officer of the Company and Mr. Rittenmeyer continued as Executive Chairman, a role he is currently expected to continue through 2023.

 

(2)

Effective March 10, 2021, Mr. Arnst was appointed as Chief Administrative Officer, and effective April 19, 2021, Mr. Arnst was also appointed as General Counsel following Ms. Andrews’s announcement of her retirement and then subsequently assumed the Corporate Secretary role. On December 31, 2021, Ms. Andrews ceased serving as an executive officer, but continued as a non-executive senior advisor of the Company through her scheduled retirement on April 15, 2022.

CD&A Table of Contents

 

Overview			34
2021: Delivering Quality, Compassionate Care While Responding to COVID-19			34
2021 Compensation Program Highlights			35
2021 Say-on-Pay Vote			36
Compensation Elements Link Pay with Performance			37
Best Practices Support Strong Compensation Governance			38
Detailed Description and Analysis			39
CEO Transition			39
2021 Compensation Decisions			40
Base Salary			40
Annual Incentive Plan			40
Long-Term Incentive Compensation			43
The Compensation Process			46
Role of the Human Resources Committee			46
Independent Compensation Consultant			46
Benchmarking Against Peer Companies			46
Other Compensation, Benefits and Considerations			47
Perquisites			47
Executive Severance Plan			48
Executive Retirement Programs			48
Employee Benefits			48
Tax Matters			49
Compensation Governance Practices			49
Stock Ownership and Retention Requirements			49
Equity Grant Timing and Stock Option Exercise Prices			49
Prohibition on Hedging or Pledging Our Stock			50
Clawback Policies			50

 

		2022 PROXY STATEMENT			33

Compensation Discussion & Analysis

 

 

Overview

2021: Delivering Quality, Compassionate Care While Responding to COVID-19

In 2021, the ongoing COVID-19 pandemic significantly impacted, and it continues to affect, all three segments of our business, as well as our patients, communities and employees. As a provider of healthcare services, we are acutely affected by the public health and economic effects of the pandemic. Our solid financial performance under such difficult and constantly evolving circumstances underscored the strength of our colleagues across the enterprise and our dedication to operational excellence. We advanced top-tier clinical programs to serve growing acute and chronic care needs in our hospitals while continuing to implement a comprehensive and active response to the pandemic focused on the safety of our personnel and patients. We also expanded our Ambulatory Care segment through a significant acquisition, as well as organic growth, construction of new outpatient centers and strategic partnerships. In addition, we continued to post strong margin performance at Conifer, which has provided consistent support to clients throughout the pandemic.

 

		COVID-19 Response We continued to manage through COVID-19 and its impact on our operations, and we remained focused on high standards for quality and safety. We sought to protect our patients and employees through COVID-safe infrastructure and heightened infection-prevention protocols. Operational teams used real-time data to provide sufficient staffing, track intensive care unit bed capacity and allocate personal protective equipment (PPE), all while adapting to constantly changing federal and state guidelines and managing ongoing surges across the country.		Operational Excellence Our results in 2021 underscore our dedication to operational excellence. We restructured our hospital portfolio, invested in high-acuity services and maintained our focus on corporate efficiencies. In addition, our strategic cost-reduction measures continue to partially mitigate the effects of the COVID-19 pandemic on our business, including the impact of lost revenues and higher expenses.		Transformative Acquisitions In December 2021, we closed the acquisition of ownership interests in 86 ambulatory surgery centers (ASCs) and related ambulatory support services from affiliates of SurgCenter Development (SCD). In addition, USPI and SCD’s principals entered into a joint venture and development agreement under which USPI will have the exclusive option to partner with affiliates of SCD on the future development of a minimum target of 50 de novo ASCs over a period of five years. We believe that these transactions will enable us to continue to sharpen our focus on the growth and expansion of ambulatory surgical services.
		Commitment to ESG In 2021, we solidified our commitment to environmental, social and governance (ESG) values and goals by formally establishing an ESG Committee of our Board consisting entirely of independent directors. The ESG Committee provides oversight with respect to our ESG strategy and guidance on ESG matters, including human rights, diversity and inclusion, and other ESG issues that are relevant to our business. In 2021, we published our first detailed ESG report, which outlines our commitment to the communities we serve and describes our objectives and progress in the areas of environmental sustainability, social initiatives and governance performance.		Reduced Leverage During the year ended December 31, 2021, we retired approximately $2.988 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 June 2021 sale of $1.400 billion aggregate principal amount of 4.250% senior secured first lien notes due 2029, the proceeds from the sale of five Miami—area hospitals and certain related operations in August 2021 and cash on hand. These transactions reduced future annual cash interest expense payments by approximately $96 million.		Talent Development Our efforts to ensure strong leadership across the enterprise continued to be a top priority in 2021. We attracted external talent to provide outside perspectives and new thinking. We also remained focused on the hiring, advancement and retention of underrepresented populations to further our objective of fostering an engaging culture with a workforce and leadership teams that represent the markets we serve. To that end, over 55% of new employees we hired in 2021 self-identified as racially or ethnically diverse. In addition, we elevated strong performers by expanding their scope and by transitioning internal leaders to new opportunities within the enterprise that will support their further growth and development.

 

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Compensation Discussion & Analysis

 

Our strong absolute and relative TSR performance highlights the successful execution of our multi-year turnaround strategy since our change in leadership a little over three years ago. We believe that our one-year and annualized three-year TSR capture the effect of the intense turnaround effort that began in late 2017. Despite the challenge and uncertain macroeconomic environment presented during the pandemic, the achievements highlighted above illustrate the positive impact of our multi-year turnaround as well as our continued momentum in building a framework for our long-term growth and success.

2021 Compensation Program Highlights

 

CEO Transition		On September 1, 2021, Dr. Sutaria succeeded Mr. Rittenmeyer as Chief Executive Officer of the Company, with Mr. Rittenmeyer continuing as Executive Chairman through 2022 and as advisor to the Board and the Chief Executive Officer through 2024. In connection with his transition to Chief Executive Officer, Dr. Sutaria entered into an amended and restated employment agreement that:   •  Increased Dr. Sutaria’s annual base salary to $1.2 million and his target annual bonus to 125% of base salary   •  Provides for annual equity grants that vest on the same basis as those provided to other executive officers   In connection with the transition, also on September 1, 2021, Mr. Rittenmeyer entered into an amended and restated employment agreement that:   •  Provides for an annual base salary of $1.5 million and a target annual bonus of 150% of base salary while serving as Executive Chairman and an annual retainer of $750,000 while serving as an advisor to the Board and the Chief Executive Officer.   •  Provides for a $5 million retention bonus, subject to Mr. Rittenmeyer’s continued employment through December 31, 2024   On February 25, 2022, Mr. Rittenmeyer’s agreement was further amended and restated to extend his term as Executive Chairman through 2023 and subsequently as advisor to the Board and Chief Executive Officer through 2025, as described on page 39 under “CEO Transition.”
2021 Annual Incentive Plan Payouts		In February 2022, the HR Committee approved final payouts under our 2021 Annual Incentive Plan, with corporate performance achieved at 200% of target, and final payouts for our NEOs ranging from 200% to 300% of target payout levels after applying each officer’s individual performance multiplier.

 

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Compensation Discussion & Analysis

 

 

Streamlined LTI Program		In February 2021, the HR Committee approved awards under the streamlined and simplified long-term equity compensation program implemented in 2020, which further aligns NEO and shareholder interests. The 2021 Long-Term Incentive (LTI) compensation for executive officers other than Mr. Rittenmeyer, Dr. Sutaria and Ms. Andrews was comprised of the following restricted stock units (“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 Less Cash 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.
2019 Performance-Based Cash LTI Payouts		In February 2022, the HR Committee certified final achievement of the 2019 performance cash LTI awards granted to Mr. Cancelmi, Ms. Arbour and Ms. Andrews, with such awards earned at 200% of target as a result of meeting or exceeding the maximum target for each applicable performance goal.   Also in February 2022, the HR Committee certified final achievement of the Conifer 2019 performance cash LTI award granted to Mr. Arnst, which award was earned at 91% of target with Conifer EBITDA and Conifer revenue goals achieved just below target and collections goals achieved just above target.

 

*	See Appendix A for definitions of Adjusted EPS and Adjusted Free Cash Flow which is then less cash distributions paid to NCI as reflected on the Company’s consolidated statements of cash flow.

2021 Say-on-Pay Vote

Our annual Say-on-Pay vote is one of our opportunities to receive feedback from shareholders regarding our executive compensation program, and the HR Committee takes the result of this vote into account when shaping the compensation program for the Company’s NEOs. At our 2021 Annual Meeting, the Say-on-Pay proposal received over 94% support, demonstrating increased, strong support for our executive compensation program. In light of this continued shareholder support, our HR Committee did not make any changes to the structure of our executive compensation program as a result of the 2021 vote. The HR Committee will continue to consider shareholder feedback, input from our independent compensation consultant and the outcomes of future Say-on-Pay votes when assessing our executive compensation programs and policies and making compensation decisions for our NEOs.

 

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Compensation Discussion & Analysis

 

Compensation Elements Link Pay with Performance

The following table outlines the primary components of our NEOs’ 2021 compensation packages (other than with respect to LTI compensation for Mr. Rittenmeyer, Dr. Sutaria and Ms. Andrews):

 

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 as well as internal equitability		•  Motivates and rewards executives for meeting 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 in three years based one-half on performance against adjusted earnings per share (EPS)* and one-half on performance against adjusted free cash flow (FCF) minus cash distributions paid to noncontrolling interests (NCI).* These goals are established at the beginning of each year within the three-year performance period   •  Relative TSR modifier 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 weaken retentive value in the event of a single year of below threshold performance   •  Relative TSR modifier applied over the full vesting 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

 

*	See Appendix A for definitions of Adjusted EPS and Adjusted Free Cash Flow which is then less cash distributions paid to NCI as reflected on the Company’s consolidated statements of cash flow.

 

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Compensation Discussion & Analysis

 

 

Best Practices Support Strong Compensation Governance

We maintain the following best practices to ensure our governance of executive compensation reflects our pay-for-performance philosophy and aligns the interests of our executives and shareholders.

 

What We Do
Actively engage with investors		Emphasize pay-for-performance
Maintain meaningful stock ownership and retention requirements for executives and non-employee directors		Include clawback provisions for all performance-based compensation
Conduct an annual compensation risk assessment		Provide double-trigger change-in-control severance and LTI acceleration
Cap payouts under the annual incentive plans and performance-based LTI awards		Retain an independent compensation consultant
What We Don’t Do
Ø   No excise tax gross-ups on change-in-control    severance benefits		Ø   Directors and executive officers cannot hedge or    pledge Company securities
Ø   No excessive perquisites		Ø   No backdating stock option grants or repricing of    underwater stock options without shareholder approval
Ø   No single-trigger equity acceleration on a change-in-control		Ø   No current dividend payments on unvested equity awards

 

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Compensation Discussion & Analysis

 

Detailed Description and Analysis

CEO Transition

In furtherance of the Company’s long-term succession plan, on September 1, 2021, Dr. Sutaria succeeded Mr. Rittenmeyer as our Chief Executive Officer, with Mr. Rittenmeyer continuing as our Executive Chairman. In connection with the transition, on August 31, 2021, we entered into amended and restated employment agreements with each of Mr. Rittenmeyer and Dr. Sutaria, which replaced their existing agreements.

2021 Rittenmeyer Agreement

Mr. Rittenmeyer’s amended and restated employment agreement (the “2021 Rittenmeyer Agreement”) provided that Mr. Rittenmeyer would serve as our Executive Chairman through December 31, 2022 (subsequently extended to December 31, 2023), and as an advisor to the Board and the CEO thereafter through December 31, 2024 (subsequently extended to December 31, 2025), subject to earlier termination in accordance with the terms of the agreement. While serving as Executive Chairman, the 2021 Rittenmeyer Agreement provides for an annual base salary of $1,500,000 and a target annual incentive bonus under the Annual Incentive Plan (AIP) of no less than 150% of Mr. Rittenmeyer’s base salary. While serving as an advisor to the Board and the CEO, Mr. Rittenmeyer will receive an annual retainer of $750,000. Under the 2021 Rittenmeyer Agreement, Mr. Rittenmeyer also will be eligible to receive a $5 million retention bonus, subject to his continued employment through December 31, 2024.

The 2021 Rittenmeyer Agreement includes severance payments and benefits in the event of a qualifying termination, as described in further detail on page 60.

On February 25, 2022, the 2021 Rittenmeyer Agreement was further amended to extend the term of the agreement through December 31, 2025, subject to earlier termination in accordance with the terms of the agreement. This amendment extends the date through which Mr. Rittenmeyer will serve as Executive Chairman from December 31, 2022 to December 31, 2023, and then provides that, between January 1, 2024 and December 31, 2025, Mr. Rittenmeyer will serve as an advisor to the CEO and the board. During this advisory period, in addition to the other compensation provided for in the 2021 Rittenmeyer Agreement, Mr. Rittenmeyer will be eligible to receive a target annual incentive bonus under the AIP of no less than 100% of his base salary.

2021 Sutaria Agreement

Dr. Sutaria’s amended and restated employment agreement (the “2021 Sutaria Agreement”) provides for an initial term commencing on September 1, 2021 and concluding December 31, 2025, which will be automatically extended for successive one-year terms unless either party provides advance notice of their intention not to renew and subject to earlier termination in accordance with the terms of the agreement. The 2021 Sutaria Agreement provides for an annual base salary of $1,200,000 and a target annual incentive bonus under the AIP of no less than 125% of Dr. Sutaria’s base salary. Dr. Sutaria is also entitled to an annual Company contribution to the Company’s ERA (a non-qualified deferred compensation plan described further on page 60) of no less than $250,000. Beginning in 2022, Dr. Sutaria will also receive annual awards of equity and other LTI awards, which will vest on the same basis as equity and other LTI awards granted to similarly situated executives of the Company.

The 2021 Sutaria Agreement includes severance payments and benefits in the event of a qualifying termination, as described in further detail on page 61.

Promotion LTI Awards

In connection with Dr. Sutaria’s promotion to CEO, the Board awarded a supplemental grant of RSUs under our 2019 Stock Incentive Plan with a September 1, 2021 grant date fair value equal to $8,000,000. One-half of these promotion RSUs are subject to time-based vesting and will vest in full on August 31, 2025. The remaining one-half are performance-based and will vest between 0% and 200% of target based on achievement of annual Adjusted FCF less Cash NCI and Adjusted EPS performance goals established by the Committee at the beginning of each year for the performance period commencing on January 1, 2021 and ending on June 30, 2025 (with such goals weighted 12.5% for 2021, 25% for 2022, 25% for 2023, 25% for 2024, and 12.5% for 2025). Any earned performance-based RSUs are then subject to a Relative TSR modifier based on performance over the entire performance period (+/- 25% based on cumulative performance versus direct peers).

 

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Compensation Discussion & Analysis

 

 

2021 Compensation Decisions

Base Salary

Base salary provides our NEOs with a fixed base annual income and helps us attract and retain high-performing executives. The HR Committee sets NEO salaries each year considering individual performance reviews, internal pay equity considerations, the scope and complexity of the executive’s role and an assessment of peer group and market survey data provided by our independent compensation consultant. In addition to the increase in Dr. Sutaria’s base salary as part of his leadership growth and promotion to CEO, Mr. Cancelmi received a base salary increase of approximately 7.7% to recognize his strong performance and better align his pay with competitive market practices. Mr. Arnst also received a $150,000 base salary increase in March 2021 in connection with his promotion to the Chief Administrative Officer role and assumption of additional responsibilities. The HR Committee determined that the base salaries for all other NEOs would remain unchanged for 2021.

 

Named Executive Officer		2021 Annual Base Salary (As of December 31, 2021)
Ron Rittenmeyer		$1,500,000
Saum Sutaria		$1,200,000
Dan Cancelmi		$   700,050
Tom Arnst		$   600,000
Paola Arbour		$   500,000
Audrey Andrews		$   550,000

Annual Incentive Plan

Our AIP provides annual cash incentives to our executives that drive financial, operational and individual performance. The program is designed to motivate executives to meet objectives that matter to our investors and align with the Company’s long-term strategy. To that end, the HR Committee selects financial and operational metrics that our executives directly influence with challenging targets so that, in order to pay out, the Company must meet the goals communicated to shareholders. The AIP also includes an individual performance component to focus directly on the contributions of each NEO and to reflect performance on qualitative factors like leadership, integrity, promotion of Company values, and a positive influence on Company culture. Final individual payouts under the AIP are determined as follows:

 

 

 

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