Fetter, 57, has served as the CEO at the Dallas-based healthcare system since 2003. He was appointed president in 2002.
Tenet is one of the nation’s largest healthcare organizations and through its subsidiaries, partnerships and joint ventures, operates 77 general acute care hospitals, 21 short-stay surgical hospitals and more than 460 outpatient centers in the U.S., as well as nine facilities in the United Kingdom. IT also operates Conifer Health Solutions, which provides technology-enabled performance improvement and health management solutions to healthcare organizations.
Ronald A. Rittenmeyer, who currently is the independent lead director at the organization, will become executive chairman immediately, according to an announcement. That position will serve as the top executive of the company. Meanwhile, the board has hired Russell Reynolds Associates to conduct a search for the new CEO.
The Dallas-based health system also announced that it has started a process to “refresh the composition of its Board” to ensure that it has the best mix of skills and experience to lead Tenet into the future.
Fetter is one of the most well-known healthcare leaders in the country, but Tenet has faced financial troubles in recent weeks. The Dallas News notes that its stock dropped when the organization reported a higher-than-expected second quarter loss and cut its forecast on annual revenue. The company announced it had a net operating loss of $1.7 billion as of the end of 2016.
The company was also under pressure to make a change to management from its largest shareholder, Glenview Capital Management, which owns 17.8% of its stock, Reuters reports. Earlier this month Glenview pulled two of its executives from the Tenet board due to differences over strategy. The publication also reports that the move put an end to the truce that the two sides signed last year.
But in the company announcement, Tenet also indicated a move to make it more difficult for a new investor to take over the company. The board, it said, has approved a short-term shareholder's rights plan that took effect on Thursday. That plan gives existing shareholders the right to acquire shares of common stock at a 50% discount if any person or entity acquires a position in 4.9% or more of the Company’s outstanding common stock. The rights plan will expire at the end of the company’s 2018 annual meeting of stockholders.
The changes, Rittenmeyer said in the company announcement, will ensure that Tenet remains focused on providing high-quality care to patients, innovating in ways that meet the demands of today’s healthcare market, and driving operational and financial performance in a manner that maximizes shareholder value.
On behalf of the board of directors, he also thanked Fetter for his contributions. “During Trevor’s tenure, Tenet has built a strong enterprise that is aligned with the trends driving healthcare, and which provides multiple channels for growth across the company’s hospital, ambulatory and Conifer segments.”
In the announcement, Fetter thanked the board for its confidence and support throughout his tenure. “I am proud of what we accomplished in transforming the Company, and strongly believe the 130,000 Tenet employees will continue focusing every day on advancing the Company’s mission. I have no doubt that Tenet will be a leading force in creating a better healthcare system and I look forward to assisting during the transition,” he said.