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HMA Board Ousted by Glenview Capital

Margaret Dick Tocknell, for HealthLeaders Media, August 13, 2013

The board succession is expected to take place this week. Steven Shulman will be the new chair. Shulman, currently a senior advisor at a private equity firm, is a former chair and CEO of Magellan Health Services, Inc. where he is credited with spearheading a turnaround and restructuring following bankruptcy.

The shareholder vote is considered a "very rare event" according to CRT Capital Group analyst Sheryl Skolnick. "Shareholders typically don't take action on their own behalf," but in this instance "they drew a line in the sand and said 'we're taking control of our company.'"

"I'm not surprised by the vote, though. I think HMA has worked hard to make sure shareholders voted against the sitting board," Skolnick said in a telephone interview.

She noted that any shareholder who might wonder if they did the right thing need only read the SEC form 8-K filing made on Monday by HMA. In it the board announced the adoption on Aug. 6 of a retention bonus and severance plan, commonly known as golden parachutes, for "certain members of key management," including Kelly E. Curry, executive vice president and CFO; Robert E. Farnham, senior vice president-finance; and Steven E. Clifton, senior vice president and general counsel.

Glenview Capital announced on July 31, just hours after the CHS-HMA merger was announced, that it would continue its efforts to replace the HMA board. On Aug. 7 Glenview rejected HMA's offer to create a hybrid board of current members plus Glenview board nominees. Glenview's position was strengthened last Friday when it was endorsed by the Institutional Shareholders Services.

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