Tenet Healthcare CEO Ron Rittenmeyer got a $9.6 million stock payout thanks to a major increase in the hospital system’s share price last week over $40 a share.
The payout was announced in a Securities and Exchange Commission filing on Dec. 14. Rittenmeyer entered into an investment trading plan called 10b5-1 earlier this year.
"The plan provided for the excise and sale of options he received when he first joined as interim CEO in 2017," a statement from Tenet to Fierce Healthcare said. “The share price trigger was set at $40, representing an over 50% increase in value from the date he entered into the plan."
Last week that threshold was triggered after the stock price rose on the same day the system announced a $1.1 billion deal to purchase up to 45 surgery centers from SurgCenter Development.
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The surgery centers will be part of Tenet’s United Surgical Partners International subsidiary, which will have as many as 310 ambulatory surgery centers after the transaction.
The company said Rittenmeyer had no control over the “timing of the sale as it was based solely on the share price passing the $40 threshold.”
Rittenmeyer’s annual total compensation was $24 million in 2019, according to the system’s 2020 proxy statement.
The CEO agreed to donate 50% of his salary from April through October to a fund to give assistance to employees facing financial hardship. Tenet furloughed 500 nonclinical workers at the start of the pandemic back in March when patient volumes and revenues plummeted.
Like most healthcare systems, Tenet faced revenue shortfalls in the second quarter due to a drop in volume from COVID-19. But the system has been recovering since then.
Tenet reported operating revenues of $3.8 billion in the third quarter, down 1.2% from the third quarter of 2019.