The executive director of CtW Investment Group has sent a letter to Community Health Systems’ board members threatening a ‘Vote No’ campaign targeting directors seeking re-election at the company’s May 17 shareholder meeting unless the board “immediately provides a compelling response to concerns regarding Community’s aggressive Medicare billing practices.”
CtW, which works with pension funds sponsored by unions, said its concerns — first voiced in a letter to the board in September — were reinforced by Friday’s disclosure of a federal investigation into the company’s emergency department procedures and Tenet’s lawsuit on April 11. Now it’s asking the board to establish a Special Committee of independent directors to:
• investigate the risks to future earnings and potential liabilities created by CHS’ billing of the Medicare program, which we view as aggressive and unsustainable; and
• provide a preliminary report to shareholders on the findings of the investigation no later than Oct. 31. It wants that report to include an outline of the steps necessary to address this issue and a timeline on when these steps will be completed. The Special Committee must be convened on behalf of shareholders, CtW says, and operate in a manner that is fully independent of management.
If CHS’ board fails to provide a “compelling response to the claims concerning billing practices,” CtW will recommend that fellow shareholders oppose the re-election of CFO Larry Cash and Audit and Compliance Committee members James S. Ely and John A. Fry at Community’s upcoming shareholders' meeting.
The union pension funds with which CtW works collectively own about 470,000 shares of CHS, which amounts to about 0.5 percent of the company.
Looks like J. Marc Adam will get to stick around on Clarcor's board of directors for a little while longer. On Monday the filtration and packaging manufacturer's board unanimously voted to increase the mandatory retirement age for directors from 72 to 74, allowing Adam — who turned 72 prior to the company's annual meeting on Tuesday — to continue in his role through at least the end of the 2012 annual meeting.
The Nadaq stock market has notified prison health company America Service Group that it's not in compliance with the requirements to be a listed company, thanks to the board resignation of John McCauley. McCauley, who served on the company's audit committee, recently left the post to become chief risk officer. As a result, America Service only has two audit committee members, and the Nasdaq requires three.
America Service (Ticker: ASGR) said it plans to add to the committee from its existing board members before the Nasdaq's cure period ends.
The construction market isn't close to anything resembling health, a fact the top executives at building materials supplier Louisiana-Pacific (Ticker: LPX) know all too well. To that end, the compensation committee of the Nashville-based company has accepted management's recommendation not to raise salaries for the third year in a row. Search here for "Looking forward."
Corporate Board Member has hooked up with two organizations to beef up its corporate governance content offerings, particularly its "This Week in the Boardroom" webcast. CBM President T.K. Kerstetter says his group's partnerships with the National Investor Relations Institute and Society of Corporate Secretaries and Governance Professionals will add expertise in the areas of investor relations and director engagement, among others.