Health Management Associates HMA
HMA's insular 17-year-tenure board drove a Lost Decade of <1% TSR; replace all directors with Glenview's blue-chip slate to fix governance, compensation, and capital allocation.
Thesis
Health Management Associates delivered less than 1% total shareholder return over the 2003-2012 Lost Decade, trailing hospital peers by 39% and the S&P 500 by roughly 99%, even as the board grew EBITDA 86% through a $1.2bn M&A spree. Glenview, which owns 14.6%, argues this gap reflects structural failures: an insular board averaging 17 years' tenure, a CFO who has missed guidance for three straight years and was recorded laughing through bad-news calls, incentive plans that paid 108% bonuses against missed external targets, zero share repurchases versus peers' buyback programs, and a 59% variable-rate debt load into a rising-rate environment. After Glenview's private outreach drew a poison pill, it is soliciting written consents to replace all eight independent directors with a blue-chip slate chaired by former Magellan CEO Steven Shulman to restore compliance oversight, compensation discipline, and per-share-focused capital allocation.
SCQA
HMA is a non-urban hospital operator with ~$1bn EBITDA, overseen by a board where seven of eight independent directors have served through the entire decade of underperformance, chaired since 1983 by founder William Schoen.
HMA returned <1% over 2003-2012 vs peers' 39% and S&P's 99%; management missed EBITDA/EPS guidance 6-7 of 10 years yet was paid 108% bonuses while facing two DOJ probes and an SEC investigation.
Shareholders should execute written consents replacing all eight independent directors with Glenview's nine-nominee blue-chip slate chaired by Steven Shulman, redesign incentives around per-share metrics, and adopt balanced capital allocation including buybacks.
Restored governance, compliance oversight, and per-share-focused capital allocation — opportunistic buybacks at depressed prices, fixed-rate debt, cost discipline — would close the ~40% underperformance gap versus hospital peers and halt further value destruction.
The three reasons
- 1
Lost Decade: HMA returned <1% TSR vs peers' 39% and S&P's 99% (2003-2012)
- 2
Board paid 108% bonuses despite missing guidance; 17-year average tenure, insular, poison pill adopter
- 3
Only hospital company with zero buybacks; 100% of $656M capital allocation went to M&A
Primary demands
- Replace all eight independent directors via written consent solicitation
- Elect Glenview's nine-nominee blue-chip slate chaired by Steven Shulman
- Adopt balanced capital allocation policy including share repurchases
- Redesign management incentive compensation around per-share metrics aligned with external guidance
- Install Alvarez & Marsal interim management team during CEO transition
- Form dedicated Compliance & Quality Committee to oversee DOJ/SEC investigations
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- HCA 2006 leveraged buyout (PE interest in hospital sector)
- Amylin Pharmaceuticals (Delaware 2009 poison-put fiduciary duty ruling)
- 2007 HMA $10 special dividend (prior defensive tactic by same Chairman)
Notable slides (6)
Notes
Consent-solicitation proxy fight deck, not a first-look thesis — Glenview had been a holder for 2+ years and pivoted to activism after HMA adopted a poison pill on May 24, 2013. Definitive Consent Statement filed July 19, 2013. Unusual rhetorical devices: p13 stock chart annotated with 'CFO laughing' timestamps during April 10 earnings call; p34 resurrects 2007 Schoen quotes about fending off private equity as playbook for current entrenchment; p32 three-panel anatomy of the 'Rights Plan' poison pill language. Cover is unsigned; Larry Robbins named as principal in SEC filing on final page. Nine-nominee slate chaired by Steven Shulman (ex-Magellan CEO). No explicit target price or SOTP valuation — the value thesis is framed as peer-gap closure via governance and capital allocation reform rather than asset-level revaluation. Glenview self-describes as 'not an activist fund' — HMA is their first full board-replacement campaign.