Earlier this week, Franklin, Tenn.-based Community Health Systems' compensation committee and board of directors unanimously decided the cash incentive opportunities of CEO Wayne Smith and CFO Larry Cash will be reduced this year if CHS does not grow its price per share of common stock at a high enough rate, according to a document filed with the U.S. Securities and Exchange Commission.
For 2012, part of Mr. Smith's and Mr. Cash's cash incentive compensation plans will depend on CHS' "total shareholder return percentile rank" — in essence, CHS' price per share of common stock must grow relatively compared with CHS' peer group, which includes Nashville, Tenn.-based Hospital Corporation of America, Dallas-based Tenet Healthcare, Nashville, Tenn.-based Vanguard Health Systems and five other investor-owned healthcare companies.
If CHS' TSR is above 75 percent, both executives will receive their full cash incentives, which were not detailed. If TSR falls between the 60th and 75th percentiles, both will lose 5 percent as a percentage of their base salaries. If TSR falls below the 40th percentile, both lose 20 percent as a percentage of their base salaries.
Last year, Mr. Smith had a base salary of $1.4 million and total compensation of $21.58 million. Mr. Cash had a base salary of $750,000 and total compensation worth $8.73 million.
For 2012, part of Mr. Smith's and Mr. Cash's cash incentive compensation plans will depend on CHS' "total shareholder return percentile rank" — in essence, CHS' price per share of common stock must grow relatively compared with CHS' peer group, which includes Nashville, Tenn.-based Hospital Corporation of America, Dallas-based Tenet Healthcare, Nashville, Tenn.-based Vanguard Health Systems and five other investor-owned healthcare companies.
If CHS' TSR is above 75 percent, both executives will receive their full cash incentives, which were not detailed. If TSR falls between the 60th and 75th percentiles, both will lose 5 percent as a percentage of their base salaries. If TSR falls below the 40th percentile, both lose 20 percent as a percentage of their base salaries.
Last year, Mr. Smith had a base salary of $1.4 million and total compensation of $21.58 million. Mr. Cash had a base salary of $750,000 and total compensation worth $8.73 million.
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