OAKLAND, Calif.--(BUSINESS WIRE)--Shareholders at Community Health Systems (“CHS”) have proposed a measure that would decrease the likelihood of executive windfalls resulting from a sale of the company. The pending proposal is expected to go to a vote at the company’s 2017 annual shareholder meeting.
Another shareholder proposal to increase management accountability sought to require shareholder approval of “poison pills”--rules which would allow the board to veto any business combination, regardless of potential benefits for shareholders. Since the introduction of this proposal, CHS has largely implemented major aspects of the measure.
The proposal shareholders will consider at the 2017 meeting looks to ban accelerated vesting of unearned equity awards for executives in the event of a change in control. Such awards are often viewed as executive windfalls, irrespective of executive performance on behalf of shareholders. These recent proposals reflect serious concerns about the company’s plummeting stock price and the corporation’s uncertain future.
The proposals are the latest in a series of moves by CHS shareholders to address excessive executive compensation and increase management accountability. In 2016, CHS shareholders voted in favor of a shareholder proposal to encourage the adoption of proxy access, and to reject the company’s say-on-pay vote on executive compensation.
“Nurses support these shareholder proposals because CHS needs to have accountability,” said Brenda Meadwell, a CHS RN at Bluefield Regional Medical Center. “An entrenched management that stands to receive lucrative golden parachutes and continues with poor corporate governance is not in the best interest of the patients or communities that CHS hospitals serve,” Meadwell added.