A Friday Night Dump from Community Health

Late last Friday, this filing by Community Health Systems, caught our attention. As regular readers know, we tend to pay close attention to the Friday Night Dump — those filings made after 4 pm on a Friday. We’ve even been experimenting with a paid twitter feed that just focuses on those filings made late on a Friday.

While the filing itself was pretty similar to prior filings on compensation that the company has made, the context has changed — a lot. Chairman and CEO Wayne Smith’s base salary of $1.6 million has remained unchanged since 2015. Back in 2015, Community Health’s stock had been trading in the high 40s and even closed at $64.04 on June 26, 2015. And then the stock began its long decline, which has lasted for the past two years. During that time, the stock has declined over 90%, at a time when most other stocks, including healthcare stocks, have been climbing.

On Tuesday, the stock dropped sharply again, falling about 17% on disappointing earnings. and then on Thursday, falling another 10.7%.

Just to put that into perspective, HCA’s Chairman and CEO, R. Milton Johnson’s base salary was $1.4 million in 2016. Both companies are based in or around Nashville, Tennessee and both are in in the same industry. Of course, HCA is a significantly larger company, with a market cap of $35 billion, compared with CYH’s $500m. Perhaps compensation committee chair, H. Mitchell Watson, a former IBM executive, who’s now retired, has a good answer. He’s been on the board since 2004.

In any event, it explains why it was filed late on a Friday.