Alarm BellsPrudential analyst David Shove already voiced concerns after Tenet filed its proxy statement last week. Shove believes that Tenet is losing valuable directors just when the company needs them most. He says that Nakasone brought strong retail marketing experience to the boardroom table. He believes that Lawrence Biondi and Sanford Cloud -- both of whom are leaving their posts in May -- offered a crucial not-for-profit perspective. And he is convinced that Monica Lozano, who may step down next year, deserves some credit for Tenet's ability to resolve legal issues with the company's uninsured Hispanic patients. "Despite Tenet management's proclamation of a better, investor-friendly board of directors, we believe the 2004 proxy and new board departures point to the opposite," wrote Shove, who has recommended selling the company's stock for some time. "For a company in the midst of turmoil, we believe the board of directorship developments are unwelcome news and point to choppy waters ahead." In the meantime, Shove is already puzzled over the company's executive compensation policy. He points out that both ousted CEO Jeffrey Barbakow and his replacement collected generous pay packages during a year when the company itself suffered greatly. He was particularly "startled" by the rewards -- including big stock-related grants and a $1.2 million relocation check -- picked up by the current CEO.
Now, however, Nakasone is apparently having second thoughts about the compensation policy he voted to approve. Nakasone's comments to the Journal also indicate that he differed with the board on two other crucial matters. He suggested that he might have been receptive to a merger that could have altered Tenet's plans to sell many of its hospitals. And he apparently favored hiring an outsider as the company's permanent CEO.Interestingly, Nakasone was one of just three members on the ad hoc committees established to review Tenet's assets and recommend its next CEO. Kangas, who is now criticizing Nakasone, sat on those same committees. As directors, both men were entitled to $65,000 in base pay annually. They also picked up $1,500 per board meeting and $1,200 per committee meeting. In addition, they collected a flat fee of $15,000 each for selecting Tenet's current CEO. And Kangas scored an extra $50,000 for serving as the company's nonexecutive chairman.