Top Lawyer Bailed Before Tenet Tanked

Still Clocked In

By now, several top executives have been booted from the company. But Pearce continues to call out for Sulzbach and Fetter, who's a veteran of the company, to follow their colleagues out the door.

And Pearce is not alone. As recently as last week, analysts expressed a fresh wave of frustration with Tenet management -- and Sulzbach in particular -- after the company waited two months to disclose yet another government investigation.

"We were a bit startled at this revelation," wrote Prudential analyst David Shove, who has a sell rating and a $10 price target on the stock. "We believe disclosures like this one would erode investor confidence in management, which sets the stage for a much-needed management overhaul."

For now, Sulzbach continues to do quite well. During the company's last fiscal year, she collected salary and bonuses totaling more than $1.37 million. She also picked up 270,000 stock options for a seven-month "transition period" that ended in December. Even if she were to leave the company, she would still be entitled to her salary and target bonus for the next three years. She would also receive health insurance, a car allowance and "other benefits and perquisites," according to the company's proxy.

Pearce -- who has already expressed outrage over Barbakow's generous "golden parachute" -- clearly sees little reason to reward Sulzbach's performance.

"During Ms. Sulzbach's tenure as chief compliance officer, the company has repeatedly paid the government for violations of Medicare billing and is now embroiled in allegations of over-utilization of surgery and other cardiac services," Pearce wrote last year to Tenet's board. "Do you think she has adequately protected patients from abuse or shareholders from unnecessary losses. ... Does this sound like someone who has done an effective job?"

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