Sunday, March 19, 2017

Discounted Farber Home Hits Market Again


Strange Tony,

Kindred put CFO Stephen Farber's former home back on the market for just under $2 million.  Before Christmas the company asked $2.4 million for the executive estate. 

The revised price of $1.95 million is $200,000 less than the $2.15 million the company paid Farber in December 2015.  Kindred spent $60,000 designing the separate driveway and up to $300,000 for construction.

Farber's compensation for 2015 should have enabled him to sell his house and find more appropriate neighbors.

The Committee increased Mr. Farber’s base salary from $500,000 to $600,000 to reflect his high level of performance associated with significantly replacing the Company’s capital structure.

Mr. Farber was awarded $350,000 from this special cash award pool for his efforts in connection with these acquisitions.

Mr. Farber’s target award as a percentage of base salary was increased to 60% from 50% in 2015 in connection with his exemplary performance as Chief Financial Officer.

Mr. Farber received a one-time payment of $250,000 to offset relocation and other costs incurred in connection with his relocation

The company awarded stock valued at $841,000 to Mr. Farber for his oversight and leadership of the Company’s financial matters, including his efforts to expand and restructure the Company’s capital structure.

The company used that capital structure to buy Farber's house after giving him another $250,000 in "moving expenses."  That was on top of $110,000 in moving expenses the prior year.  For some reason Farber's exemplary performance did not transfer to successful neighbor relations.

Kindred's housing subsidy for Stephen Farber could cost the company dearly.  If the house sells for asking price Farber's subsidy, direct and indirect, could be $800,000 or more.

Anonymous (from Kindredpoor)

Saturday, March 11, 2017

Kindred's Top People Face Against Employees


Strange Tony,

Human Resources was once counted on to balance senior executives who preferred finance, marketing or legal/compliance over people.  Many top dogs got to their lofty slot by flattening their peers.  Such leaders view HR as touchy feely stuff.  True human resources makes many senior leaders uncomfortable.

When executive incentive pay reached stratospheric levels HR became a means for top dogs to achieve obscene pay and cash/stock bonuses.  HR Vice Presidents turned into Chief People Officers, surreptitiously advancing their fortunes and those of fellow C Suiters. 

Kindred's Chief People person has done little to aid employees in my two years plus with the company.   Our health insurance worsened markedly.  Getting paid for one sick day requires a herculean effort.  Kindred cut the retirement match by 40%, eliminated it completely and then brought it back at a fraction of Gentiva's former level.  Where Gentiva would have contributed $2.50 Kindred now gives $1.  That's a 60% cut for some employees.

Legacy Gentiva employees experienced a series of HR intrusions courtesy of two faced executives.  One face publicly highlights employees as the people producing the results.  The other face peers down to pull money out of our wallets and stuff it into their own.  Every benefit reduction that cost employees falls to the bottom line and boosts executive incentive pay.

The company's annual report filed with the Securities and Exchange Commission has no human resource measures like employee satisfaction or turnover. Such metrics disappeared after the ascent of Kindred President Ben Breier and Kindred at Home President David Causby.

The company's board granted our Chief People person 10,000 shares per year his first three years with Kindred.  It's now 12,000 shares a year. That's a 20% bump up in one area of his overall compensation.

Kindred gifted him another 38,000 shares outside the two numbers previously mentioned, bringing his current holdings to 85,500 shares.  Remember this your next doctor visit when you get to pay the whole bill. 

It will take a few weeks to find out how much our CPO and his executive cabal profited from our 2016 pain.  Right now they are hatching plans for 2018's benefits. If you see our Chief People person please ask him how much more they plan to cut?  Some of us need to begin planning.

Anonymous (from Legacy Gentiva)

Saturday, March 4, 2017

Kindred Closes on Dreadful 2016


Strange Tony,

Kindred executives told their 2016 financial story to Wall Street analysts on Tuesday.  This is the group that just got free stock from Kindred's Board for losing $7.65 a share.

President Ben Breier opened the call with his usual pander to employees, "I'd like to start my comments by thanking everyone who helped make 2016 such a successful year for Kindred."  So successful that Breier had to cut the employee Christmas gift.   Employees wouldn't have had time to eat it, not with our increased workload.

Kindred at Home delivered another quarter of solid volume.  Hospice delivered same-store revenue growth of 6.5% on same-store admissions growth of 4.4%.

Core EBITDAR margins for both home health and hospice contracted due primarily to nursing labor headwinds. These headwinds came from a combination of the macro labor conditions we spoken about and quite frankly some self-inflicted costs stemming from our continued integration of pay practices and electronic medical record systems. We expect to make meaningful progress on the controllable part of this labor equation in 2017.

There are some exogenous related issues around some wage rate creep in that business but I would view Q4 as much more of a self-inflicted wound as I would and exogenous issue. We have gone through sort of the final stages in that business of consolidating our electronic medical records of consolidating pay practices and what I would really describe the fourth quarter in our Kindred at Home labor line being is really more of a productivity issue than an average wage rate issue.
Productivity is associated with creep and executives in many employee's minds. Consider Breier's comment to analysts:

On the hospice side you may even see high single-digit growth rates there and that you should expect that you know depending on how we're able to deal with our labor issues that a significant portion of that can drop through (to the bottom line and executive incentive pay).
I don't know one coworker who has gotten a high single digit raise in pay in a year, much less a series of years. 

Look we left some dollars on the table clearly because of some of the premium labor issues we're dealing with and I would expect that you'll see some improvement in that number  
Who knew Ben Breier's wager table is our paycheck?  Some employees earned too much last year for the Creep Suiters.  However, most have continued falling behind financially doing the work we love. 

"We have a very focused initiative right here on trying to take more cost out"
As for productivity many of my coworkers donate time to patients.  How much extra free time will executives subconsciously demand as they control the labor equation and take more costs out?  This group wants more than the few thousand free shares they recently received and they will do it on employees backs.

Anonymous (from Kindredful)

Friday, February 24, 2017

February Be Kind to Rich Executives Month

StrangeTony,

Kindred's board of directors showed more executive love this past week with its wholesale granting of free shares of stock to the all male executive review at Kindred HQ.  I found it odd in light of my hospice coworkers struggling to pay uncovered healthcare costs from last year.

Low to no raises have employees scrimping to set aside any money in the restarted 401k.  For every $40 an employee contributes Kindred will contribute $4.  Gentiva would've given $8.

Prior earnings calls contained verbal panders to employees but executive actions shouted the opposite since Paul Diaz snagged Gentiva.  For that the board granted Paul a $6 million check and kicked him upstairs.  Pay and benefits wise our hospice has gone down a rung since his multi-million dollar payday.

I'm glad there's Kindred love to give.  I wish employees were feeling some of it.

Anonymous (from Kindredful)

Sunday, February 12, 2017

Causby's Latest Stock Award



Strange Tony,


On 2/02/2017 EVP & President Kindred at Home David Causby received 17,692 new shares of common stock bringing his total Kindred holdings to 179,162.

Pursuant to his Employment Agreement, the reporting person (David A. Causby) was granted 53,077 restricted stock units, vesting in three equal annual installments beginning February 2, 2016.

And what did the company give employees the last few months?  A co-worker remarked we didn't get candy for Christmas in 2016.  Executives sent sweets our first year under Kindred ownership.

Causby will get another $1 million bonus for showing up to work on August 1, 2017.  So that's where our candy money went.  Will they go after our lunch money next?

Anonymous (from Kindred loves executives)

Saturday, February 11, 2017

Kindred's Dealing with Ventas

Strange Tony,

Kindred President Ben Breier opened his portion of the third quarter earnings call with:

"Last night we announced the strategic decision to exit the skilled nursing facility business, which is the final step in a process that began for us 15 years ago when Kindred operated over 300 skilled nursing facilities.'

'A full exit of this business, together with the significant cost realignment initiative we are undertaking in connection with the exit, are substantial steps forward in our effort to continue to transform Kindred's strategy and growth profile to enhance shareholder value. We're pleased to be working with Ventas to finalize an agreement that will create value for Ventas and Kindred shareholders, and facilitate Kindred's exit from the skilled nursing business."

Most people don't know but Ventas birthed Kindred via a spinoff on May 1, 1998.  The two companies remained intertwined ever since.

Kindred reduced its significant nursing home division by selling facilities in 2013 and 2015. Breaking Ventas leases cost Kindred serious money:

In January 2015 Kindred paid Ventas a $40 million early termination fee associated with nine leased facilities.  In 2013 Ventas received a $20 million early termination fee associated with fifty nine leased facilities.

Kindred paid $521 million in rent to Ventas over the last three years. 

  • $172 million for the year ended December 31, 2015
  • $192 million for the year ended December 31, 2014
  • $248 million for the year ended December 31, 2013

That relationship will be tested in Kindred's decision to exit the nursing center business, which Breier said is struggling to meet budget targets.

"Our exposure to the challenges facing the nursing center industry are expected to amount to $40 million to $50 million worse than our 2016 operating plan."

Kindred plans to sell its remaining nursing homes during 2017, but it will need to buy them from Ventas before reselling them.  McKnight's said "Kindred's skilled nursing portfolio includes the 36 Ventas facilities, 26 facilities the company owns and 25 that are rented from other companies. Kindred expects to bring in $100 million to $300 million from the sale of the portfolio."

In prior nursing home asset sales Kindred recorded an asset impairment charge of $8 million and a loss on divestiture of $2 million.

The nursing center wheel is about to fall off the Kindred wagon.  Oddly, it could fall to Care Capital Properties, Ventas skilled nursing REIT spinoff.  That might explain Kindred executives clarity on how much they expect to make on the sale.

“We expect the after-tax net proceeds from the sale of these assets will range from $100 million to $300 million after transaction costs, severance expenses, and the amount payable to Ventas for the sale of the Ventas Properties,” he said. “We expect to apply these anticipated net proceeds to reduce funded debt, which combined with the impact of our cost realignment initiative, the elimination of approximately $90 million of annual rents, and the reduction of approximately $30 million of annual capital expenditures will reduce our leverage.”

Why should anyone at hospice care what happens in the nursing center division?  With $1.2 billion in revenue gone executives will likely provide us more attention.  In Gentiva or Kindred that is generally an uncomfortable thing.  Their plans didn't work for the nursing center segment, likely because they were divorced from reality.  There is a limit to staff's ability to endure executive ignorance, aggression and impatience.  It's a harsh contrast to the hospice movement's core founding principles.

Anonymous (from Kindredful)

Saturday, February 4, 2017

Retirement Plan for Non Executives: Keep Working

StrangeTony,

Gentiva employees experienced a series of benefit reductions in 2014, the very year executives agreed to sell the company to Kindred.  That pattern continued while Kindred executives kept telling employees we were "better together."  That was clearly not the case in the retirement arena.

Gentiva COO David Causby did not want to hear employees voice and he does not look after them now as Kindred at Home President.  Yet the company continues his obscene pay levels, which includes another $1 million bonus for showing up to work on August 1, 2017.

Kindred plans to restore a minuscule 401k match beginning in February 2017.  It will match $1 for every $10 an employee contributes.  That's well below Gentiva's 401k contribution level.  For an employee to take advantage of this benefit they would need lots of discretionary income.  Most of my hospice coworkers don't have funds to contribute given years of nonexistent to paltry raises and shifting significant first dollar health care costs to employees.  That occurred with the elimination of the physician copay benefit in 2016. 

It looks like another Kindred benefit for wealthy executives.  Kindred continues to be Better Together for this exclusive bunch.

Anonymous (from Kindredpoor)