Shareholders of the rural hospital operator voted to approve the merger with RCCH HealthCare Partners, but did not approve the proposed $121 million golden parachutes for four executives, including retiring CEO Bill Carpenter.
LifePoint Health shareholders agreed to the merger with RCCH HealthCare Partners, though it did not affirm more than $120 million in golden parachutes for four executives as part of the deal. The shareholder meeting was held Monday morning, the same day that the rural hospital operator released its Q3 earnings report.
The proposed merger between the two Brentwood, Tennessee-based companies was first announced in July, would total $5.6 billion, and will result in a single company operating 84 non-urban hospitals across 30 states. The original plan for the post-merger LifePoint company was to have current CEO Bill Carpenter stay on at the combined organization in the same position.
However, Carpenter announced his intention in late September to retire at the end of the year, pending LifePoint's merger with RCCH.
Merger aye, golden parachutes nay
Per his retirement, Carpenter would be replaced by David Dill, LifePoint's current president and COO. But as part of his departure, Carpenter and three other executives at the for-profit hospital chain were expected to collect $121 million in golden parachute compensation, according to proxy statements filed to the federal government.
Though shareholders approved the first two agenda items related to the merger in a majority vote, they did not affirm the proposed $121 million package for Carpenter and others.
In response to the shareholders' meeting, LifePoint's stock was up slightly during early morning trading.
Q3 earnings was a mixed bag
While the major development for LifePoint on Monday was the finalization of its merger, the company also produced its Q3 earnings which included some highs and lows from the past quarter.
LifePoint reported same-hospital revenues of $1.5 billion, up 2.1% compared to Q3 2017, bolstered by increases in admissions and revenues per equivalent admissions. However, the company also recognized losses in the aggregate of $40.1 million due to a settlement agreement to end its lease and operations at a Louisiana hospital campus and merger expenses.
Perhaps most interesting was an additional salaries and benefits expense of $21.6 million related to the "acceleration of the vesting of outstanding stock-based awards" in connection to Carpenter's announced retirement.
Additionally, LifePoint produced a normalized EBITDA totalled $183.3 million, an 11.8% increase compared to Q3 2017.
For complete financial information, review LifePoint's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
The Brentwood, Tennessee-based rural hospital operator saw its shareholders approve the $5.6 billion RCCH merger but shoot down more than $120 million in golden parachutes for executives.
CEO Bill Carpenter will be retiring by the end of the year and replaced by current president and COO David Dill, who will run the combined company post-merger.
In its Q3 earnings report, LifePoint recorded same-hospital revenues of $1.5 billion, up 2.1% compared to Q3 2017, bolstered by increases in admissions and revenues per equivalent admissions.