Tenet CEO to get $23M severance payout; new charges filed in $400M kickback case against 2 former employees

Businessman putting cash in suit pocket
Outgoing Tenet Healthcare CEO Trevor Fetter will earn a hefty severance package, company documents show. (Getty/zest_marina)

Despite the financial troubles at Tenet Healthcare, departing CEO Trevor Fetter will receive a severance package worth nearly $23 million.

Trevor Fetter
Trevor Fetter

Tenet released a document (PDF) this spring to investors that includes compensation data, and it notes that Fetter will receive $22.9 million in severance pay when he leaves the system. 

It was revealed at the beginning of September that Fetter would step down in early 2018 as Tenet faced financial struggles. Fetter, 57, has served as the Dallas healthcare system's CEO since 2003 and was appointed president in 2002. 

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Tenet was criticized by the International Brotherhood of Teamsters union for its hefty executive payment plans despite its financial losses, reports The Dallas Morning News. 

Tenet's recent financial problems have been well-documented; its stock values took a nosedive after it reported a higher-than-expected loss in the second quarter of this year. The company reported a net operating loss of $1.7 billion as of the end of 2016. 

Tenet and its subsidiaries operate 77 acute care hospitals, 21 short-stay surgical hospitals and more than 460 outpatient facilities in the U.S., plus nine facilities located in the United Kingdom. Alongside Fetter's plans to step down, Tenet revealed that it intends to "refresh the composition" of its board. 

RELATED: How CEO Trevor Fetter brought Tenet back from the brink 

Fetter's base salary in 2015 and 2016 was $1.27 million, according to the company documents, and his total compensation, including stock options and other incentives, was $12.3 million last year. 

New charges in fraud scheme

Meanwhile, the Department of Justice has brought new charges against two people in a $400 million fraud scheme.  

William Moore, the ex-CEO of Tenet-operated Atlanta Medical Center, and Edmundo Cota, former head of the medical clinic Clinica de la Mama, were added as defendants in the case already filed against former Tenet senior vice president John Holland, according to an article from Reuters. 

Tenet had previously agreed to pay $514 million to settle the kickback case, which alleges that the system paid kickbacks to Cota's clinic to increase its Medicaid revenue. Tenet also faced a simultaneous criminal investigation into payments that were designed to send the pregnant Hispanic patients that went to Clinica de la Mama to Tenet hospitals. 

RELATED: HCA may be eyeing Tenet Healthcare portfolio, analysts say 

The three involved in the criminal case face multiple charges, including conspiracy and wire fraud, according to Reuters. Brian McEvoy, Moore's attorney, said he is "extremely disappointed" with the DOJ's decision to file charges. 

"Mr. Moore is not guilty and we look forward to presenting this case to a jury at trial," he told the outlet.