Institutional Shareholders Services is recommending that Community Health Systems shareholders vote against re-electing two directors who sit on the company's audit committee, according to a news release from a union pension fund adviser that is urging no votes on the two directors.
CHS shareholders urged to reject two directors
CtW Investment Group has been calling for shareholders to vote against re-electing outside directors James Ely III and John Fry, and Larry Cash, executive vice president and CFO, to Community's board at its May 17 shareholders meeting in New York. ISS, which advises investors on corporate governance and proxy matters, urged its clients to vote against Ely and Fry in a recommendation report cited by CtW.
Ely and Fry are members of the board's audit and compliance committee. According to portions of the recommendation CtW cited, ISS criticized the committee for failing to provide “proactive and aggressive oversight of the company's Medicare billing practices,” and criticized the full board for not taking more aggressive action once the practices were questioned by others, including CtW, federal and state fraud enforcers and the lawsuit filed last month by Tenet Healthcare Corp., Dallas.
CtW wrote to Community, Franklin, Tenn., last fall to suggest that its rate of one-day stays for Medicare patients would draw regulatory scrutiny and called on the board to establish a special committee to investigate CtW's findings. CtW Investment Group advises pension funds affiliated with several unions, including the Service Employees International Union.
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