May 13th, 2007 11:37 pm
Tenet hands Jeb Bush a big windfall
Jeb Bush will get over $450,000 in the next year from Tenet for being a board member -- about three times what the average director makes at major U.S. corporations.
By John Dorschner / Miami Herald
Shareholders officially elected former Gov. Jeb Bush to the board of Tenet Healthcare on Thursday -- a part-time job that will bring him over $450,000 in the next year.
At the hospital chain's annual shareholder meeting in Dallas, Bush received 96.56 percent of the shares voting, with 3.44 percent withheld, for a one-year post. Only one of the 10 directors elected had a higher vote.
For this, Bush has already received 34,667 shares worth $260,000, which he has registered with the Securities and Exchange Commission. He will receive a $65,000 annual retainer fee, plus $1,500 per board meeting and $1,200 per committee meeting attended. And finally, he will get $130,000 annually in stock for each year he's on the board.
That doesn't make him a special case at Tenet, however, because SEC filings show the company's board members earned between $409,000 and $590,000 for 2006.
Those numbers are way above the directors' compensation for the Standard & Poor's 500 companies, which paid an average of $120,000 for retainer and equity in 2006, according to Paul Hodgson, a senior research associate with The Corporate Library, a Portland, Me., group offering independent compensation analysis.
Directors' compensation has been going up rapidly -- about 20 percent a year for the past two or three years, said Hodgson, meaning 2007 pay for S&P 500 directors might average about $140,000.
''That certainly puts Tenet at the high end,'' said Hodgson.
On Wednesday, Brett Arends, a columnist at TheStreet.com, calculated Bush would be earning $36,500 a day for 13 days of work a year, and if board meetings lasted four hours each, that meant the former governor would be getting $9,125 an hour.
The column was entitled: ``Jeb Bush Joins the Tenet Gravy Train.''
Bush was not immediately available for comment.
A month ago, when Tenet announced its selection, Bush told The Miami Herald that he liked the idea of going into ``the healthcare industry, which is something I know something about. And it's a place that over the next few years there'll be some unsettled water. I prefer to go to some place where I can add value, rather than go to a place where things are going really well.''
Tenet spokesman Steve Campanini said he wouldn't comment on the TheStreet.com column, but said Bush's compensation package was in line with that of other directors, who do a lot of work for the company.
''In 2006 the board of directors held 13 meetings, five of which were in-person meetings and the remaining were telephonic,'' Campanini said in an e-mail. ``The number of meetings has been about the same over the last three years, and we don't expect it to change. Board members are expected to attend meetings either in person or by phone, when they are scheduled. Committee meetings are more frequent.''
Randy Ramirez, a compensation specialist with the consulting firm BDO Seidman, said Tenet's pay to directors ''is not egregious by any means. It's certainly on the high side,'' but companies of similar size typically pay about $300,000 in retainer and stock.
By putting an emphasis on stock compensation, Tenet is rewarding directors for the company's performance, Ramirez said. With a company like Tenet, which has had to deal with many Medicare fraud accusations, ``it's going to be harder to attract the kind of leadership to move the company forward, so naturally it's going to cost a little bit more to attract them.''
Ramirez thought Bush would be a great help to Tenet, with his background in government and business. ``Just getting them off God-knows-how many watch lists they're on right now would certainly be a big step.''
After his election Thursday morning, Bush was added to two board subgroups -- the quality, compliance and ethics committee and the nominating and corporate governance committee, Campanini reported.
Bush's stock awards are restricted, vesting in part over the next three years, but they vest automatically when a person leaves the board.
Look for this company to thrive.
Tenet hands Jeb Bush a big windfall
Jeb Bush will get over $450,000 in the next year from Tenet for being a board member -- about three times what the average director makes at major U.S. corporations.
By John Dorschner / Miami Herald
Shareholders officially elected former Gov. Jeb Bush to the board of Tenet Healthcare on Thursday -- a part-time job that will bring him over $450,000 in the next year.
At the hospital chain's annual shareholder meeting in Dallas, Bush received 96.56 percent of the shares voting, with 3.44 percent withheld, for a one-year post. Only one of the 10 directors elected had a higher vote.
For this, Bush has already received 34,667 shares worth $260,000, which he has registered with the Securities and Exchange Commission. He will receive a $65,000 annual retainer fee, plus $1,500 per board meeting and $1,200 per committee meeting attended. And finally, he will get $130,000 annually in stock for each year he's on the board.
That doesn't make him a special case at Tenet, however, because SEC filings show the company's board members earned between $409,000 and $590,000 for 2006.
Those numbers are way above the directors' compensation for the Standard & Poor's 500 companies, which paid an average of $120,000 for retainer and equity in 2006, according to Paul Hodgson, a senior research associate with The Corporate Library, a Portland, Me., group offering independent compensation analysis.
Directors' compensation has been going up rapidly -- about 20 percent a year for the past two or three years, said Hodgson, meaning 2007 pay for S&P 500 directors might average about $140,000.
''That certainly puts Tenet at the high end,'' said Hodgson.
On Wednesday, Brett Arends, a columnist at TheStreet.com, calculated Bush would be earning $36,500 a day for 13 days of work a year, and if board meetings lasted four hours each, that meant the former governor would be getting $9,125 an hour.
The column was entitled: ``Jeb Bush Joins the Tenet Gravy Train.''
Bush was not immediately available for comment.
A month ago, when Tenet announced its selection, Bush told The Miami Herald that he liked the idea of going into ``the healthcare industry, which is something I know something about. And it's a place that over the next few years there'll be some unsettled water. I prefer to go to some place where I can add value, rather than go to a place where things are going really well.''
Tenet spokesman Steve Campanini said he wouldn't comment on the TheStreet.com column, but said Bush's compensation package was in line with that of other directors, who do a lot of work for the company.
''In 2006 the board of directors held 13 meetings, five of which were in-person meetings and the remaining were telephonic,'' Campanini said in an e-mail. ``The number of meetings has been about the same over the last three years, and we don't expect it to change. Board members are expected to attend meetings either in person or by phone, when they are scheduled. Committee meetings are more frequent.''
Randy Ramirez, a compensation specialist with the consulting firm BDO Seidman, said Tenet's pay to directors ''is not egregious by any means. It's certainly on the high side,'' but companies of similar size typically pay about $300,000 in retainer and stock.
By putting an emphasis on stock compensation, Tenet is rewarding directors for the company's performance, Ramirez said. With a company like Tenet, which has had to deal with many Medicare fraud accusations, ``it's going to be harder to attract the kind of leadership to move the company forward, so naturally it's going to cost a little bit more to attract them.''
Ramirez thought Bush would be a great help to Tenet, with his background in government and business. ``Just getting them off God-knows-how many watch lists they're on right now would certainly be a big step.''
After his election Thursday morning, Bush was added to two board subgroups -- the quality, compliance and ethics committee and the nominating and corporate governance committee, Campanini reported.
Bush's stock awards are restricted, vesting in part over the next three years, but they vest automatically when a person leaves the board.
Look for this company to thrive.
