01—Abstract
Summary
Summary of the 8-K filed January 24, 2025. Cited figures are marked; the original filing is the authoritative source.
On January 23, 2025, Tenet Healthcare Corporation entered into an amended and restated employment agreement with Saumya Sutaria, M.D., governing his continued service as Chief Executive Officer and Chairman of the Board.
The agreement runs from the effective date through December 31, 2028, with automatic one-year renewals unless either party gives at least 180 days' notice of non-renewal, and Dr. Sutaria reports directly to the Board. His base salary is $1,500,000,a with an annual incentive bonus under the Annual Incentive Plan targeted at no less than 200% of base salary, plus annual contributions of not less than $250,000 to his executive retirement account. The agreement includes a signing and retention grant of restricted stock units covering $18 million of common stock under the 2019 Stock Incentive Plan.
Of these, 40%b vest pro rata in four annual installments on December 31, 2025 through 2028, and 60% are subject to a four-year performance period tied to metrics set by the Human Resources Committee. Starting with fiscal 2025, he is eligible for annual equity and long-term incentive awards at a level consistent with his current award level. Severance terms are tiered by circumstance.
A termination without cause or for good reason outside the change-of-control window triggers two and one-half times the sum of base salary and target bonus, paid over two and one-half years, with equity acceleration and health coverage. A termination in the six months before or two years after a change of control triggers three times that sum in a lump sum, with equity acceleration and three years of health coverage.
Death or disability provides bonus payments and equity acceleration. Restrictive covenants include perpetual confidentiality and non-disparagement, a two-year post-employment employee non-solicitation covenant, and a one-year post-employment noncompetition covenant with four primary competitors.
02—Key points
Key Highlights
- Amended and restated employment agreement with Saumya Sutaria, M.D., as Chief Executive Officer and Chairman, effective January 23, 2025
- Initial term runs through December 31, 2028, with automatic one-year renewals absent 180 days' notice of non-renewal
- Base salary of $1,500,000 with target annual bonus of no less than 200% of base salary under the Annual Incentive Plan
- Signing and retention RSUs covering $18 million of common stock: 40% time-vested through 2028 and 60% subject to a four-year performance period
- Change-of-control severance of three times base salary plus target bonus in a lump sum, versus two and one-half times outside that window
- Annual retirement contribution of not less than $250,000 and eligibility for annual equity and long-term incentive awards beginning with fiscal 2025
- Restrictive covenants include perpetual confidentiality and non-disparagement, a two-year employee non-solicitation covenant, and a one-year noncompetition covenant with four primary competitors
03—Questions
Frequently Asked Questions
Who is the executive covered by this agreement and what roles does he hold?
The agreement covers Saumya Sutaria, M.D., who continues as Chief Executive Officer and Chairman of Tenet Healthcare Corporation's Board of Directors. He reports directly to the Board during the term.
How long does the employment agreement last?
The initial term runs from January 23, 2025 through December 31, 2028. It renews automatically for successive one-year terms unless either party gives at least 180 days' notice of intent not to renew.
What compensation is Dr. Sutaria entitled to under the agreement?
He receives an annualized base salary of $1,500,000, a target annual bonus under the Annual Incentive Plan of no less than 200% of base salary, retention RSUs covering $18 million of common stock, eligibility for annual long-term incentive awards from fiscal 2025, and annual contributions of at least $250,000 to his executive retirement account.
What severance would Dr. Sutaria receive if terminated without cause?
The severance depends on timing. Outside the window of six months before to two years after a change of control, a termination without cause or for good reason provides two and one-half times the sum of base salary and target bonus, paid over two and one-half years, plus equity acceleration and health coverage. Within that window, the payment is three times that sum in a single lump sum, plus equity acceleration and three years of health coverage. Both are conditioned on a release of claims.
What restrictive covenants apply to Dr. Sutaria?
He is bound by perpetual confidentiality and non-disparagement covenants. An employee non-solicitation covenant applies during employment and for two years afterward. A noncompetition covenant covering four of the Company's primary competitors applies during employment and for one year afterward.
04—Continue