There in black and white…

March 22, 2004

Even though Tenet Healthcare (THC) noted last May that former Chairman and CEO Jeffrey Barbakow would receive three years worth of salary after stepping down, it’s still shocking to read the severance agreement and general release included in the 10-K Tenet filed last week. Barbakow resigned at the end of last May after Tenet’s stock tanked and government investigators were circling, which is not exactly the type of behavior that seems to warrant a financial reward. In addition to the 3 years of salary, the contract also notes that Barbakow will receive his “annual incentive plan target award of 90%”, a check he was supposed to receive last week, according to the K. The company will also pick up his health, dental, vision and life insurance costs for the next three years. He’ll also get money under the “Manager’s Time Off” plan, credit for the three years under the company’s Supplemental Executive Retirement Plan (SERP), as well as company-paid office space and a secretary through May 2006. Since Tenet changed its fiscal year in 2002, it’s hard to say exactly what the final payout will be. But in the fiscal year ended May 31, 2002, Barbakow made $1.2 million in base salary and a $4.2 million bonus. Needless to say, Tenet shareholders aren’t faring quite as well. Last week, during a conference call to discuss fourth quarter and year end earnings, Barbakow’s replacement, Trevor Fetter, said the company “continues to face significant challenges.”

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