North Las Vegas hospital owner’s chief executive under fire for pay

Simon Avery

Tuesday, Aug. 27, 2002 | 11:06 a.m.

LOS ANGELES -- While it closes hospitals and wrestles to contain costs, Tenet Healthcare Corp. has adopted a special provision that will roughly double the annual retirement payments to its chief executive.

The Santa Barbara-based firm plans to credit Jeffrey Barbakow with 20 years of service in 2004 even though he will have worked only 11, according to a filing with the Securities and Exchange Commission.

Barbakow has received plenty of praise for his leadership since taking the Tenet helm in 1993. He has overseen a major acquisition strategy and investors have driven up the company's share price sevenfold.

But the move to pad his retirement comes as CEOs across the country are under intense public scrutiny for lining their own pockets at the expense of investors and employees.

Tenet has received criticism from some investors and health care officials for paying Barbakow significantly more than the company's rivals pay their executives.

Barbakow, 58, received a salary and bonus of $4.5 million last year. He also sold $130.1 million of company stock in January.

In comparison, HCA Inc., Tenet's larger competitor, paid CEO Jack Bovender Jr. about $1 million in 2001.

By accelerating Barbakow's service, Tenet is enabling its CEO to collect annual payments of $1.9 million rather than the approximately $945,000 he would have received based on his actual years served, according to documents filed with the SEC on Aug 14.

The news angered some officials in the health care industry.

"Jeffrey Barbakow is the poster child for corporate greed in the health care industry," said Rose Ann DeMoro, executive director of the California Nurses Association.

"Every dollar of that is diverted out of patient services," she said.

Barbakow has received about $400 million in total compensation and stock sales since joining the company, according to the CNA. That amount would cover 320,000 uninsured Californians for a year, pay the salaries of 9,000 registered nurses for a year, or get a year's supply of medicine to 43,000 AIDS patients, DeMoro said.

In addition to his salary, bonus and stock options, Barbakow received other compensation, which included personal use of a Tenet corporate jet valued at $66,962 and $34,090 for a company car in fiscal 2001.

Tenet -- owner of Lake Mead Hospital in North Las Vegas -- did not return a call seeking comment.