For-profit hospital chain Tenet Healthcare announced Monday that its CEO, Ron Rittenmeyer, is transitioning to executive chairman, effective Sept. 1.
Dr. Saum Sutaria, the Dallas-based company's chief operating officer, will take over as CEO effective Sept. 1. Rittenmeyer will continue to serve as executive chairman of Tenet and its board until 2022. He's served as CEO for almost four years.
Sutaria joined Tenet as COO in January 2019. He was promoted to president later that year and appointed to the company's board in 2020. Before that, he worked at McKinsey & Co. for 18 years where he led the healthcare and private equity practices.
Sutaria earned his medical degree from the University of California, San Diego and completed post graduate training at the University of California at San Francisco, where he previously served as an associate clinical faculty member.
"During the past several years, Saum and I have worked closely together through extraordinary times including COVID, and at each step, he has continued to demonstrate excellent leadership in framing the right strategic and tactical pathway," Rittenmeyer said in a statement.
The executive chairperson role has become increasingly common among publicly traded companies. Total compensation for the role, typically filled by a former CEO or founder, tends to be about 80% that of the CEO. Wayne Smith, former CEO of Community Health Systems will make up to $4 million plus hundreds of thousands of shares in the company this year to serve as executive chairman.
Rittenmeyer's time as CEO has covered a rocky period for Tenet. On top of the devastating global pandemic that began in early 2020, Tenet has been embroiled in a five-month-long strike by nurses at one of its Massachusetts hospitals. Last month, four U.S. lawmakers from the same state demanded that Tenet disclose how it spent its COVID-19 relief fund, accusing the company of using the money to enrich its executives and shareholders.
Among their demands: a full account of Rittenmeyer's total compensation. He made $16.7 million in total compensation in 2020, including $10 million in stock awards.
Tenet spent $936 million worth of federal relief grants through March 31. Unlike its more profitable peers, Tenet would have posted a sizable net loss in 2020 if not for those grants. The company's full-year net income was $339 million, including the grants, on $17.6 billion in operating revenue.
Most recently, Tenet reported net income to shareholders of $120 million in the second quarter, which ended June 30. That's compared to $88 million in the second quarter of 2020, which includes almost all of the pandemic's first wave. Revenue grew almost 36% year over year to just under $5 billion, despite having recorded far less federal grant revenue in the 2021 period.
Tenet announced in April its general counsel, Audrey Andrews, is retiring at the end of 2021. Andrews has served in the role since 2013.
