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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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TENET HEALTHCARE CORPORATION
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(Name of Registrant as Specified in Its Charter)
TENET SHAREHOLDER COMMITTEE, L.L.C.
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RELEASED TO SECURITY HOLDERS
AS OF SEPTEMBER 29, 2000
The Tenet Shareholder Committee, L.L.C.
September 29, 2000
Dear Fellow Shareholder:
We're not the only ones who are up in arms. Institutional Shareholder Services
(ISS), the nation's leading institutional shareholder advisory firm and provider
of corporate governance services, has recommended that Tenet shareholders vote
FOR the Tenet Shareholder Committee's slate of nominees. And their words for
Tenet have not been kind.
"We believe that shareholders should support the dissident nominees," ISS wrote
in its report. "THE INCUMBENT BOARD HAS SHOWN A BRAZEN INDIFFERENCE TOWARD
SHAREHOLDER DEMANDS OVER THE LAST FEW YEARS. We also harbor concerns about
senior management's equity participation in Tenet's Broadlane joint venture."
ISS issued its report after considering the facts and holding extensive meetings
with our slate, and with Jeffrey C. Barbakow, Tenet's Chairman and Chief
Executive Officer, and Christi Sulzbach, Tenet's General Counsel.
THE ISS RECOMMENDATION COMES IN ADDITION TO A DECISION BY CalPERS, THE NATION'S
LARGEST PUBLIC PENSION PLAN, TO VOTE ITS SHARES IN FAVOR OF THE COMMITTEE'S
SLATE OF DIRECTORS.
ISS was particularly biting in its commentary on Tenet's corporate governance
philosophy: "Management...believes that varying industry and regulatory forces
demand that directors take a longer-term view of company strategy and that a
staggered board provides the continuity to achieve that end. This paternalistic
argument -- that shareholders somehow must be saved from themselves -- does not
hold water in today's investment and corporate governance landscape. EFFECTIVE
CORPORATE GOVERNANCE DEPENDS UPON THE BOARD BEING ACCOUNTABLE TO
SHAREHOLDERS...AND WE BELIEVE THE TENET BOARD HAS FAILED ON THIS ACCOUNT."
As a reflection of this philosophy, ISS cited Tenet's conduct after shareholders
voted at last year's annual meeting to rescind its poison pill. The company
abided by the letter of that vote, but violated its spirit in that, to quote
ISS, "no
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bylaw or charter provision was implemented so that the board could not adopt a
new pill without shareholder approval." IN OUR VIEW, THIS IS CORPORATE
ARROGANCE, NOT CORPORATE GOVERNANCE.
ISS also took Tenet to task over management's personal investment in Broadlane:
"ISS takes a dim view of the participation of Tenet officers in the stock sale.
We believe that Tenet officers should be sufficiently incentivized by their
participation in the Tenet equity incentive programs currently in place. Should
the Broadlane venture prove to be successful then the economic benefits should
flow through to Tenet, benefiting shareholders and officers alike. THIS
TRANSACTION GALVANIZES OUR CONVICTION THAT THE TENET BOARD COULD BENEFIT FROM
DIRECTORS WHO MAY BE MORE CRITICAL OF SUCH ACTIONS."
ISS's verdict makes it perfectly clear that fundamental change is needed on
Tenet's board. Shareholders should ask themselves whether Tenet's existing
directors-- most of whom own little or no equity stake, a majority of whom have
financial entanglements with Tenet, all of whom are dismissive of shareholder
mandates, and all of whom are unequivocally out of step with modern corporate
governance--are up to the task. We believe that the answer is a resounding "NO,"
and that TENET DESPERATELY NEEDS RESPECTED INDEPENDENT DIRECTORS WHO UNDERSTAND
HEALTHCARE, WHO CARE ABOUT SHAREHOLDER RIGHTS, AND WHO, IF ELECTED, WOULD EACH
HAVE A SUBSTANTIAL PERSONAL EQUITY STAKE IN THE COMPANY.
We are particularly gratified that ISS and CalPERS saw the real economic and
corporate governance issues in this campaign and were not distracted by the
transparent misinformation campaign, riddled with red herrings, inaccuracies and
character assassination, in which Tenet's management has engaged.
By supporting our slate of nominees, ISS, ONE OF THE MOST RESPECTED VOICES IN
THE NATION ON CORPORATE GOVERNANCE ISSUES, AND CalPERS, THE NATION'S LARGEST
PUBLIC PENSION FUND AND A PIONEER IN BRINGING GOOD GOVERNANCE INTO THE
MAINSTREAM OF CORPORATE AMERICA, HAVE JOINED OUR CALL FOR CHANGE, ACCOUNTABILITY
AND NEW BLOOD AT TENET.
Please sign, date and return the enclosed striped GOLD proxy card today in the
postage paid envelope provided. Please note that you can vote on all proposals
on the enclosed striped GOLD proxy card.
Sincerely,
M. Lee Pearce, M.D.
Chairman
The Tenet Shareholder Committee
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