FRAMINGHAM, MA — The International Brotherhood of Teamsters is mounting a protest against the $24 million compensation package awarded in 2019 to the CEO of Tenet Healthcare, which is furloughing employees due to the coronavirus downturn — including at hospitals in Framingham, Natick, and Worcester.
The Teamsters union, which owns about 170 shares in Tenet, is asking other shareholders to vote against Tenet CEO Ron Rittenmeyer's compensation package at the company's annual meeting on May 28.
Rittenmeyer has agreed to donate half of his salary in April, May, and June to a charity for Dallas-based Tenet employees. But Teamsters leaders say that's not enough.
"Rittenmeyer’s decision to give up 50 percent of his base salary (circa $400,000) for three months is a gesture towards shared sacrifice," Teamsters General Secretary-Treasurer Ken Hall wrote in a letter to other shareholders. "However, it is only a gesture and one that is cushioned by the board’s recent decision to boost CEO Rittenmeyer’s future annual base salary."
In February, the Tenet board of directors voted to extend Rittenmeyer’s employment agreement through 2022, boosting his base salary by $300,000 to $1.5 million. They also awarded Rittenmeyer $10 million more in restricted stock. In 2019, Rittenmeyer earned a $1.2 million base salary, and was awarded close to $7 million in bonus play, plus $16 million in stock.
Like other for-profit healthcare companies, Tenet has seen its revenue plummet as services like elective surgery have been put on hold due to coronavirus. The company has ordered furloughs for about 10 percent of employees in recent months, affecting corporate and medical workers. Other executives — including the CEO of Saint Vincent Hospital in Worcester — have taken pay cuts.
A union representing nurses at Saint Vincent has been battling with the company for weeks over a voluntary furlough plan. A company spokesperson would not say how many workers are being furloughed at the MetroWest Medical Center, which includes Framingham Union Hospital and Leonard Morse in Natick.
The Teamsters are pushing other shareholders for a ‘Say-on-Pay' vote, which is only advisory, but might influence the Tenet board of directors to rethink compensation for Rittenmeyer and other executives.
Compared to the Teamsters, other entities have much more influence over the Tenet board. The hedge fund Glenview Capital Management, founded by billionaire Larry Robbins, is the biggest single shareholder with over 19 million shares. The asset manager Vanguard Group owns 12.4 million shares, and Black Rock Inc. owns 12.6 million shares, according to corporate filings.