Tenet eliminates executive committee, changes shareholder requirements — 5 insights

Tenet is changing the rules and structure of its board of directors in the midst of a hospital divestment spree. Here are five insights.

1. Tenet eliminated the executive committee from its board of directors. The committee was responsible for carrying out board management responsibilities when the board was not in session, but the entity was rarely utilized.

2. Shareholders will no longer be required to hold a majority of the outstanding common stock to call a special meeting. The threshold has been reduced to 25 percent of the outstanding common stock.

3. Tenet's board approved an amendment allowing shareholders to call special meetings a minimum of 90 days before the annual meeting, a reduction from the previous minimum. The amendment also reduces the number of days shareholders must wait after an annual meeting to call a special meeting for a "similar item" of shareholder business.

4. Both changes to special meetings requirements are intended to afford shareholders more chances to take action outside the annual meeting.

5. The short-term shareholder rights plan created to protect Tenet's income tax net operating loss carryforwards was terminated March 5. The decision was a response to tax law changes and an increase in the company's stock price since the plan was implemented.

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