Shareholder revolt ousts HMA board

NAPLES — Shareholders voted to replace the entire board of directors of Health Management Associates, including Chairman William Schoen, who guided the company's expansion since 1986.

Shareholders led by New York-based Glenview Capital Management, HMA's largest shareholder, voted to replace the entire board with a new slate, according to results released late Tuesday. The new chairman will be Steven Shulman, a former top executive with health insurance and management companies and the transition will take place this week, Glenview says.

The rare toss-the-board vote puts in jeopardy a recent offer by Tennessee-based Community Health Systems to acquire HMA for $7.6 billion. Glenview says it's not clear the offer values the company appropriately and it will review the deal.

“We at Glenview are proud of our efforts to improve quality, compliance, accountability and shareholder value at HMA, and we are happy to have contributed to the broader discourse by challenging all shareholders to think and act like owners to promote financial and corporate success,” Glenview says in a statement.

HMA, which owns and operates 71 hospitals in non-urban areas, says it has hired an independent inspector to certify the results of the vote. The company says its current board is committed to an orderly transition if more than half of the shareholders vote to replace them.

Glenview, which owns 14.6% of the publicly traded shares of HMA, says the current board has failed to provide shareholder value over the last decade. In a veiled reference to the longtime board members, Glenview pledged “prioritizing shareholder returns over social or legacy issues” and to “treat shareholders as true partners rather than adversaries.”

Forbes magazine recently named Larry Robbins, who runs Glenview, one of the nation's hottest hedge-fund managers. Glenview Capital has returned 29% so far this year through July 5 compared with 16% for the Standard & Poor's 500-stock index, the magazine reported recently.