Tenet CEO Gets Pay Valued at $9.8M

  1. April 2, 2007, 11:28AM
    Tenet CEO Gets Pay Valued at $9.8M


    DALLAS-The chief executive of money-losing hospital operator Tenet Healthcare Corp. got compensation the company valued at $9.8 million last year, according to an analysis of a regulatory filing Monday.
    The bulk of compensation for Trevor Fetter came in stock and options awards, which had an estimated value of $7.4 million when they were granted. Fetter was paid a salary of nearly $1.1 million, non-equity incentives of about the same size, and $276,596 in other compensation, mostly use of company's aircraft...

    ...Fetter, 47, left Tenet as chief financial officer in 2000 but returned as president in 2002 and was named CEO the following year, after his predecessor resigned amid government investigations into Medicare overbilling.
    The company has lost $5.6 billion since 2002, including $803 million last year, as the company continued to struggle with falling admission rates and uncollected bills from uninsured patients...

    http://www.chron.com/disp/story.mpl/ap/fn/4680945.html
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  2. 23 Comments

  3. by   gonzo1
    There is no man on earth worth this much money. I would not want to be in his shoes when the karma comes around. What a greedy creep and what a stupid company to give someone that kind of money. The shareholders should be screaming bloody murder.
  4. by   ZASHAGALKA
    Space, I know this is a topic that you are energized about, but, nevertheless, I'm gonna play devil's advocate. LOL.

    Let me take the position that the free market should freely be able to pay what the market will bear. Be it entry level jobs, nursing, professional sports, or CEOs.

    Let me also suggest that an essential rule of the free market is that any trade is a mutually beneficial proposition: people will only engage in contracts in a free market when BOTH sides feel the contract is beneficial.

    Let me suggest that any gov't interference in the free market of CEOs might have significant unintended consequences, just as most gov't interference does.

    That being said, I have a few questions for you:

    1. Suppose this CEO leaves. What would YOU propose, if you were the board of directors for TENET, that they offer in salary to the NEXT CEO? Be specific. Would you include stock options, which are considered a way to motivate profits from a CEO, as his salary would be directly affected by said profits (or losses) with stock options?

    2. Given the competition for CEOs, how would you recruit this next CEO at your suggested pay, given that the free market would allow most of the big arena CEOs to choose other companies in lieu of accepting your low offer. WHAT would you be willing to give up in confidence of performance, experience, and education to ensure the ability to hire at your price?

    3. Should professional atheletes be forced to give back some of their negotiated salaries if they have a losing season? How much? How would that affect which teams they would sign on to play for if that were the case? Would this stack the odds in favor of only teams likely to win being able to recruit the best? How would THAT create imbalances in the makeup of professional teams?

    4. Given the potential for the imbalances in question 3, how would address the imbalances in recruiting for a CEO job if success was the single most important factor in setting or keeping previously negotiated salary?

    5. If YOUR employer didn't meet a realistic and mutually set market goal related to your nursing unit, should you be allowed to keep your full salary, or, should you be forced to give some of your salary back at the end of the year? How much?

    6. IF you advocate that the gov't be allowed to set limits on CEO salaries, knowing that labor costs are the biggest expense of any company, and that big business loves to be in bed with gov't to create anti-competitive environments that benefit them (neo-mercantilism): given this precedent you wish to create for CEOs, how will you feel when those same big companies push through further regulations to limit not just the salaries of their upper management, but also the salaries of their highest cost routine employees, in the case of hospitals, nurses. Are you comfortable with the idea of the gov't setting caps on what nurses can be paid? Do you believe that it is POSSIBLE for gov't to cap senior management salaries and yet avoid big business lobbying from taking that to the next level, to YOUR level?

    7. When the gov't does get on board, and makes a decision that since nurses make many multiples of what an entry level hospital employee makes, that nursing salaries should be limited to say, 4x the entry level market (or currently, about 23.00/hr), will you complain about this sudden development of gov't set salary limits on HCEs (highly compensated employees)? How about nursing salary limits at 3x what an entry level employee can make (~18.00/hr)? How could that not be considered, 'fair'?

    8. Is it fair for nurses to make so much more than, say, CNAs? Why?

    I'm just trying to analyze the consequences of your position.

    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on Apr 7, '07
  5. by   pickledpepperRN
    What position?

    My position is that we should be aware of where the money is going.
    Tenet is unethical. They harm patients by outright fraus when they can find physicians willing to collude in it.

    I am not going to imagine that I run this corporation because it has such a terrible history I'm not sure it can or should be saved.

    If like my hospital 50% of their recenue is Medicare we the taxpayers have an interest in whether they provide the patient care as we paid them to do.
    They have a feduciary duty to provide care to patients not to take tax and insurance money and refuse to staff safely, refuse to have needed supplies, charge for un needed surgery id they can find an accomplice, and pay the CEO for THIS?

    Sorry. I would not be in the situation described. Not gonna bite.
  6. by   ZASHAGALKA
    Quote from spacenurse
    What position?

    My position is that we should be aware of where the money is going.
    Tenet is unethical. They harm patients by outright fraus when they can find physicians willing to collude in it.

    I am not going to imagine that I run this corporation because it has such a terrible history I'm not sure it can or should be saved.

    If like my hospital 50% of their recenue is Medicare we the taxpayers have an interest in whether they provide the patient care as we paid them to do.
    They have a feduciary duty to provide care to patients not to take tax and insurance money and refuse to staff safely, refuse to have needed supplies, charge for un needed surgery id they can find an accomplice, and pay the CEO for THIS?

    Sorry. I would not be in the situation described. Not gonna bite.
    I merely pointing out that the in order to CHANGE how CEOs are paid, it would require, most likely, gov't regulation to ensure that 'fiduciary' responsibility. I'm not limiting that concept to just TENET.

    I am suggesting that, once gov't SETS such standards, the lobbyists will come out in force to ensure that such standards also apply to their biggest labor pool. In the case of hospitals, aggregately, they spend MUCH more on nurses than they do senior management.

    Is having the gov't willing or able to enforce a 'fiduciary' responsibility, since most of the funds are Medicare, an eventuality that might have far flung unintended consequences? Once the gov't gets involved with salary caps, IN THE INTEREST of protecting its Medicare investment within hospitals, do you dare to find out how far the gov't's interests will become in such a matter?

    Otherwise, it seems the alternative is to let the market decide.

    I know that you view yourself as an 'agent for change'. I admire that about you. My point is: how would you change it?

    Mind you, THIS is my biggest fear of gov't. Ultimately, the power of the vote is not nearly as powerful as the power of a donating lobby. Mind you also, that I consider the concept of lobbying the gov't for protection (neo-mercantilism) to be as big a threat as I see from redistribution.

    In my mind's eye of a perfect gov't, THERE WOULD BE NO LOBBYISTS, as the gov't would be disempowered from the ability to give any anti-competitive concession TO lobbyists (or anybody else, themselves included).


    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on Apr 3, '07
  7. by   pickledpepperRN
    Quote from ZASHAGALKA
    I merely pointing out that the in order to CHANGE how CEOs are paid, it would require, most likely, gov't regulation to ensure that 'fiduciary' responsibility. I'm not limiting that concept to just TENET....


    ...In my mind's eye of a perfect gov't, THERE WOULD BE NO LOBBYISTS, as the gov't would be disempowered from the ability to give any anti-competitive concession TO lobbyists (or anybody else, themselves included).


    ~faith,
    Timothy.
    I agree completly!
    That is why we nurses worked so hard to pass a "Clean Money Initiative". it did not pass but we will work for this again, maybe nationally.
    http://www.cleanmoneyelections.org/#
    I'm not advocating a law restricting CEO pay.
    I am advocating that Healthcare corporations must provide the healthcare they are in business to provide.
    Don't pay the CEO and refuse to provice the nurses and other workers needed by the patients!

    Maybe the lobbiests would do less harm if their corporations didn.t donate $$$ to campaigns?
    http://allnurses.com/forums/f195/dru...gh-216079.html
    Last edit by pickledpepperRN on Apr 3, '07
  8. by   ZASHAGALKA
    Quote from spacenurse
    I agree completly!
    That is why we nurses worked so hard to pass a "Clean Money Initiative". it did not pass but we will work for this again, maybe nationally.
    http://www.cleanmoneyelections.org/#
    I'm not advocating a law restricting CEO pay.
    I am advocating that Healthcare corporations must provide the healthcare they are in business to provide.
    Don't pay the CEO and refuse to provice the nurses and other workers needed by the patients!
    I also think that a huge improvement in this matter would be a flat sales tax instead of an income tax. Much of the lobbying that goes on in gov't is over tax policy and the loopholes that come and go.

    There is a REASON why the tax code is the biggest document, in probably the history of the world.

    THAT is where the gov't gets most of the power that lobbyists want to hitch a ride upon. Congressmen get donations when they PASS such laws, AND they get donations when they THREATEN such laws, donations to insure that they don't follow through on the threats.

    In the non-gov't world, we call that extortion. Inside the beltway, it's politics.

    A flat tax with NO gov't dickering over the basic rules would completely deflate the power and reason for many lobbyists. Of course THAT is why a flat tax is also highly unlikely. We wouldn't want our Congressmen to legislate themselves out of the power to draw their biggest donors, would we?

    The power of a flat tax does NOT lie in the level of taxation, but in removing the ability to use the tax code to attract the goodwill of vested lobbys.

    (and 'exempting' some expenses from the flat tax, such as necessities - food, clothing, housing, prescriptions, glasses, etc., would serve to make that tax more 'progessive'.) The less you make, the more your dollars tend to be spent on what would be tax-exempt 'necessities'. The more you make, the more your dollars are likely to be taxed. The difference between a 15,000 car and a 60,000 car would be huge in terms of taxation.

    Also a flat sales tax would mean that you don't get taxed UNLESS you spend. Saving would automatically be a 'tax free' pursuit. That would have a huge impact on our trade imbalance. Imagine people being encouraged to SAVE instead of buying the next neat thing 'made in China'. . .

    ~faith,
    Timothy.
  9. by   pickledpepperRN
    It's a lot to think about but we had better stick to "nursing news" and healthcare here.
  10. by   ZASHAGALKA
    Quote from spacenurse
    It's a lot to think about but we had better stick to "nursing news" and healthcare here.
    I agree, but I had to link this, as it was exactly on point to my last post:

    67,204-page code confounds taxpayers, yet Congress sits by
    http://blogs.usatoday.com/oped/2007/04/post_7.html

    ~faith,
    Timothy.
  11. by   mercyteapot
    Quote from spacenurse
    April 2, 2007, 11:28AM
    Tenet CEO Gets Pay Valued at $9.8M

    DALLAS-The chief executive of money-losing hospital operator Tenet Healthcare Corp. got compensation the company valued at $9.8 million last year, according to an analysis of a regulatory filing Monday.
    The bulk of compensation for Trevor Fetter came in stock and options awards, which had an estimated value of $7.4 million when they were granted. Fetter was paid a salary of nearly $1.1 million, non-equity incentives of about the same size, and $276,596 in other compensation, mostly use of company's aircraft...

    ...Fetter, 47, left Tenet as chief financial officer in 2000 but returned as president in 2002 and was named CEO the following year, after his predecessor resigned amid government investigations into Medicare overbilling.
    The company has lost $5.6 billion since 2002, including $803 million last year, as the company continued to struggle with falling admission rates and uncollected bills from uninsured patients...

    http://www.chron.com/disp/story.mpl/ap/fn/4680945.html
    Well, hey, just so long as good old Fetter isn't going underpaid, all must be right with the world...
  12. by   sanctuary
    I'd mention something about the obscenity of this when we could have universal healthcare instead, but that would just get Zash all cranked up.
  13. by   ZASHAGALKA
    Quote from sanctuary
    I'd mention something about the obscenity of this when we could have universal healthcare instead, but that would just get Zash all cranked up.
    Probably.

    ~faith,
    Timothy.
  14. by   SmilingBluEyes
    I think it insanely obscene.

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