The article titled "Favorable terms" (Outliers, June 13, p. 52) about Abbey Healthcare Group should at least be commended for its liveliness. Much of what is written about healthcare today is so turgid that it even succeeds in putting the insomniac reader to sleep.
But to put the matter in a realistic perspective, your readers should know that the performance referenced in the article related to not just one prior year but three years in which this company, brought back from the brink of bankruptcy, has reversed a $14 million loss in 1990 to achieve a $14.3 million profit in 1993. Not, I hasten to add, without a great deal of hard work and many striking changes. None of that would have been achievable without the ability to raise money and negotiate bank debt, for which I can claim some credit, relying as I did on my own experience in investment banking. The process is noteworthy both for the speed at which it was accomplished-two years-as well as the amount-totaling slightly shy of $500 million.
Moreover, I would like to draw your attention to the fact that this is the fifth public company with which I have been closely associated in what, to date, has been a successful career. I do, however, hold most strongly to the view that it is incumbent upon the management of public companies to manage on behalf of their owners-the shareholders. Accordingly, Abbey has always had a compensation committee consisting only of non-executive directors and has received professional outside advice, in this case, from Towers Perrin.
Finally, I would like to point out that Abbey already has paid (former President and Chief Executive Officer) Victor Chaltiel $2.1 million in good faith, and that the board of this company does not support the concept of "golden parachutes." My own contract with the company was written specifically to exclude such a concept. It also may surprise your readers to know that Mr. Chaltiel insisted at the time of the (Total Pharmaceutical Care) acquisition that he receive exactly the same contract as myself. He did.
TIMOTHY M. AITKEN
Abbey Healthcare Group