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Crossing things off the checklist…

checklist.jpegTomorrow, Healthsouth (HLSH.OB) is expected to return to trading on the NYSE, about 3 1/2 years after it was delisted and a a little over a year after former Chairman and CEO Richard Scrushy was found innocent of orchestrating a $2.7 billion accounting fraud that led to the company’s downfall. In preparation for tomorrow, when the stock will start trading under the symbol HLS, company executives have been busy checking things off their list. Obviously, there was the approval from NYSE. There was also an approval from investors — announced last week for a one-for-five reverse split, so that the shares look a bit more robust, or as the company put it "attract new investors who would prefer not to invest in stocks that trade at low, single-digit share prices".

Also on the list? Creating two new severance plans, judging by this 8-K filed late yesterday. The filing outlines an "transitional severance plan" for executive employees and a separate "transitional severance plan" for corporate office employees. The executive plan covers three Healthsouth executives — COO Michael Snow, Chief Compliance Officer John Markus and Surgery Center President Jospeh Clark. Healthsouth’s top two execs — CEO Jay Grinney and CFO John Workman — are not covered by this plan. It’s not clear from the filing how many people are covered by the "corporate office employee" plan.

Issues of executive compensation have got to be sensitive at Healthsouth. Back in 1997, Scrushy pocketed an eye-popping $107 million. Investors can only hope that as Healthsouth continues to recover, the company isn’t putting the cart before the horse when it comes to compensation.