2018 Guide to Effective Proxies

2.17.2 Executive summary | 275 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES TEGNA, INC. EXECUTIVECOMPENSATION ExecutiveSummary ComparisonofCumulative FiveYearTotalReturn Dec12 $250 $50 $100 $150 $200 Dec14 Dec17 Dec13 Dec15 Dec16 TEGNA Inc. PeerGroup TheabovegraphsshowthatourCompany’sstockoutperformedanindexcomprisedoftheCompany’s2017-2019TSRPeerGroup (“PeerGroup”)overeachofthe1-,3-and5-yearperiodsendingDecember31,2017.(Seepage28ofthisProxyStatementforalistof thecompaniesincludedinthePeerGroup.)ThetotalreturnsofthePeerGroupareweightedbymarketcapitalization.Thegraphs depictrepresentativeresultsofinvesting$100intheCompany’scommonstockandthePeerGroupatmarketcloseonDecember31, 2012,2014and2016,respectively.Inmakingthecalculations,weassumedthatdividendswerereinvestedmonthlywithrespecttothe Company’scommonstockandeachPeerGroupcompany,withtheCompany’sperformancefollowingtheJune29,2015spin-offofits publishingbusiness(the“PublishingSpin-off”),whichretainedthenameGannettCo.,Inc.(“Gannett”),calculatedusingthecombined resultofoneTEGNAshareandone-halfGannettsharebeginningJune29,2015,andtheCompany’sperformancefollowingthe May31,2017Cars.comSpin-offcalculatedusingthecombinedresultofoneTEGNAshare,one-halfGannettshareandone-third Cars.comsharebeginningJune1,2017. 17 2018PROXYSTATEMENT ComparisonofCumulativeFiveYearTotalReturn Total of 02 pages in section Executive Compensation COMPENSATION DISCUSSION AND ANALYSIS InthisCompensationDiscussionandAnalysissection,referencesto“theCommittee”aretotheExecutiveCompensationCommitteeof theBoardofDirectors.Referencesto“NEOs”aretoourNamedExecutiveOfficers,whoforthe2017fiscalyearwere:DavidT.Lougee, PresidentandChiefExecutiveOfficer,VictoriaD.Harker,ExecutiveVicePresidentandChiefFinancialOfficer,LynnBeall(Trelstad)*, ExecutiveVicePresidentandChiefOperatingOfficer—MediaOperations,ToddA.Mayman,ExecutiveVicePresident/ChiefLegaland AdministrativeOfficer,GraciaC.Martore,formerPresidentandChiefExecutiveOfficer,andJohnA.(Jack)Williams,formerPresident/ TEGNADigital. OnMay31,2017,theCompanycompletedthepreviouslyannouncedseparationofitsdigitalautomotivemarketplacebusinessfromits broadcastingbusinessinordertocreatetwopubliclytradedcompanies(the“Cars.comSpin-off”).InconnectionwiththeCars.com Spin-off,amongotherthings,GraciaC.MartoreretiredfromtheCompanyandJohnA.(Jack)WilliamsceasedtoserveasPresident/ TEGNADigital.Whenwediscussinthis“CompensationDiscussionandAnalysis”ourcompensationobjectivesforourNEOsfor2017 andprospectively,weareaddressingonlythoseNEOswhoarecontinuingtoserveasexecutiveofficers:Mr.Lougee,Ms.Harker, Ms.BeallandMr.Mayman,unlessotherwisenoted. * “Beall”isMs.Trelstad’smaidennameandthenamesheusesforbusinesspurposes.“Trelstad”ishermarriedandlegalname.Ms.Trelstadis referredtothroughoutthisProxyStatementasMs.Beall. Executive Summary ThisExecutiveSummarywillprovideanoverviewofthefollowingkeyareas: ShareholderReturn,PerformanceHighlights,Payfor Performance,ExecutiveCompensationCommitteeResponsibilities,GuidingPrinciples,Compensati n-RelatedGov rnanc PracticesandSayonPay. SHAREHOLDERRETURN TEGNA OUTPERFORMED ITS PEER GROUP ON TOTAL SHAREHOLDER RETURN (TSR) OVER THE PAST 1-, 3- AND 5-YEAR PERIODS. ComparisonofCumulative OneYearTotalReturn Dec16 $120 $60 $80 $100 Mar17 Jun17 Sep17 Dec17 TEGNA Inc. PeerGroup ComparisonofCumulative ThreeYearTotalReturn Dec14 $120 $60 $80 $100 Dec15 Dec16 Dec17 TEGNA Inc. PeerGroup 16 2018PROXYSTATEMENT ComparisonofCumulativeOneYearTotalReturnComparisonofCumulativeThreeYearTotalReturn TENET HEALTHCARE CORPORATION COMPENSATION DISCUSSION AND ANALYSIS Webelievethattheseresultsreflectthesignificanteffortsbyournewleadershipteam,andbyallouremployees,totransformthecultureof Tenet,todirectlyaddresskeyobstaclesandchallenges,andtobuildpositiveandsustainablemomentumintheCompany’sperformance. Recent Compensation Program Changes and 2017 Say-on-Pay Vote InresponsetofeedbackfromourinvestorsandaspartoftheHumanResourcesCommittee’songoingreviewandrefinementofTenet’s executivecompensationprograminrecentyears,theCommitteemadeseveralsignificantchangestotheexecutivecompensationprogram for2016and2017.Asummaryofkeychangesisincludedbelow: 2016ProgramChanges • AnnualIncentivePlan(AIP):RevisedperformancemetricstomorecloselyreflecttheCompany’sstrategyandtoserveasbetter measurementsofperformancedrivenbythemanagementteam. • Long-TermIncentive(LTI)Compensation: O Extendedperformanceperiodandvestingscheduleforperformance-basedrestrictedstockunits(RSUs); O Replacedsinglemetricwithfourequally-weightedmetricscloselyalignedwiththeCompany’sstrategy;and O Revised performance metrics to more closely reflect the Company’s strategy and to serve as better measurements of performancedrivenbythemanagementteam. • CompensationGovernance:Enhancedpracticesuchthatallperformance-basedincentivecompensationawardedtoNEOsis subjecttoclawbackprovisions. 2017ProgramChanges • Long-TermIncentiveCompensation:IncreasedthepercentageofoverallLTIcompensationtowardperformance-basedelements (two-thirdsintotal)utilizingperformance-basedcashsubjecttothreeequally-weightedmetrics,performance-basedstockoptions andtime-basedRSUs,equallyweightedasone-thirdofthetotalgrantvalueeach. 2017Say-on-PayVote Atour2017annualmeetingofshareholders,ourshareholdersapprovedourexecutivecompensationprogramfor2016,withapproximately 72.6%ofvotescastinfavorofour“say-on-pay”proposal.TheHumanResourcesCommitteefullyacknowledgedthatthe“say-on-pay”result requiredactiontobetakeninresponse.Broadershareholderfeedback,includingtheresultsofthisvote,wereafactorintheBoardand managementteamtakingfoundationalstepstowardstransformingtheCompany,includingimplementingthefollowingchangesfor2017: • AppointedanewChiefExecutiveOfficerandthreenewindependentdirectors; • SetthenewChiefExecutiveOfficer’scompensationpackagebelowmarketmedianandbelowtheprecedingChiefExecutive Officer’slevel;and • Institutednewinitiatives,suchascost-cuttingmeasures,assetdivestitures,qualityimprovementsandmanagementchanges. AstheCompanyprogressesthroughthecurrenttransformation,theHumanResourcesCommitteewillcontinuetoreviewandrefinethe Company’sexecutivecompensationdesignandgovernancepractices,incorporatingshareholderfeedbackintoitsdecision-making processes. 26 TENETHEALTHCARE Š 2018PROXYSTATEMENT Total of 02 pages in section COMPENSATION DISCUSSION AND ANALYSIS ThisCompensationDiscussionandAnalysis(“CD&A”)describesourcompensationprogramsfor2017asapplicabletoeachofthefollowing NamedExecutiveOfficers(“NEOs”)for2017: NAMEDEXECUTIVEOFFICER TITLE RonRittenmeyer ExecutiveChairmanandChiefExecutiveOfficer DanielCancelmi ChiefFinancialOfficer KeithPitts ViceChairman EricEvans PresidentofHospitalOperations AudreyAndrews SeniorVicePresidentandGeneralCounsel TrevorFetter FormerChiefExecutiveOfficer(resignedonOctober23,2017) EXECUTIVE SUMMARY 2017: A Year of Transition 2017wasayearofsignificanttransitionforTenet.TheBoardactedtoimplementseveralsignificantchangesthatwouldtransformthe Companyandrepositionitforthefuture,includingachangeinleadership.InAugust2017,Tenetannouncedaleadershiptransitionwhereby RonRittenmeyerbecameTenet’sExecutiveChairmanandprincipalexecutiveofficer.TrevorFetter,whohadpreviouslyservedasthe Company’sChiefExecutiveOfficerfor14years,agreedtoremainasanofficeranddirectorforaperiodoftimeinordertoensureasmooth transition.Duringthetransitionperiod,Mr.FetterreportedtoMr.Rittenmeyer.InOctober2017,Mr.RittenmeyerwasnamedChiefExecutive OfficerandMr.FetterresignedfromtheCompany. Alignedwiththeleadershiptransitionattheexecutivelevel,theBoardalsoredoubleditscommitmenttoadditionalandongoingBoard refreshment.Duringthefourthquarterof2017,threenewindependentdirectorswereaddedtotheBoardandSenato Kereywasnam dthe newindependentLeadDirector.TheaimoftheseadditionalchangeswastocomposearefreshedBoardwithenhancedoversightcapabilities thatalignwiththenewanduniquechallengesfacedbytheCompanyinthecurrentenvironmentandwiththeexpectedfutureneedsofthe business. BusinessInitiativesandPerformance UnderthenewleadershipofMr.Rittenmeyer,ourBoardandmanagementteamhavebeenhighlyfocusedonexecutingaspeedyand successfulturnaroundofthebusiness.Tothatend,Tenethastakenanumberofsignificantanddecisiveactions,includingimplementing managementchangesatitsUSPIandConiferbusinesses,announcinga$250millioncostreductioninitiative,andinitiatingastrategicreview ofitsportfoliothathasresultedintheexplorationofasaleoftheConiferbusiness.While2017remainedatransitionalyearforTenet,the actionstakenin2017andearly2018havealreadybeguntodelivervalueforourshareholdersandotherstakeholders.Thebelowsummarizes Tenet’skeystrategicinitiativesandachievementsagainsttheseinitiativessincetheleadershiptransition: • Significantprogressoncostreductioninitiativesandimplementationofaggressiveplanstoaddressqualityandgrowth. • Ontracktoachieveover$1billionofproceedsfromdivestituresofnon-corehospitalassets. • Buildingacultureofaccountabilityfocusedondeliveringresultsthroughanewperformancereviewprocess,upgradestoleadership andtalent,andanongoingprocesstoassessleadershipatalllevels. Asaresultofthesestrategicachievements,attheendof2017,wesawsignificantimprovementsintheCompany’sfinancialandoperational performanceacrossbusinesssegments.Theseimprovementsincluded: • AdjustedEBITDA * exceedingthehighendoftheOutlookrangeandAdjustedFreeCashFlowtowardthehighendoftheOutlook rangeinthefourthquarter. • Growthofsame-hospitaladjustedadmissionsby1.3%andgrowthofAmbulatorysame-facilitysystem-widecasesby4.6%,eachin thefourthquarter. • Increaseincostsperadjustedadmissionbyonly2.0%in2017;continuedcommitmenttoachieving$125millionofsavingsin2018 and$250millionofannualizedsavingsbytheendof2018. • Raisedmidpointofthe2018OutlookforAdjustedEBITDAby$25millionto$2.550billion. * ThisProxyStatementincludescertainnon-GAAPmeasures,suchasAdjustedEBITDAandAdjustedFreeCashFlow.Definitionsofthese measuresandreconciliationstothemostcomparableGAAPmeasurearecontainedinAppendixA. TENETHEALTHCARE Š 2018PROXYSTATEMENT 25