Monday, March 11, 2013

Hints of Gentiva's 2012 Executive Pay


While Gentiva employees received no raises in 2012 and long term stockholders remain in the red, the first hint of executive compensation came in the company's 10-K.

Equity based compensation rose slightly in 2012. For the year ended December 31, 2012, the Company recorded equity-based compensation expense, as calculated on a straight-line basis over the vesting periods of the related equity instruments, of $7.6 million as compared to $7.5 million for the corresponding period of 2011. 
Performance cash awards could also be gleaned:

For 2012, the Company granted performance cash awards of approximately $4.8 million, with 50 percent of the award based on a 2012 diluted earning per share target and 50 percent of the award based on a 2014 diluted earnings per share target, subject to certain adjustments, with the awards expected to fully vest at the end of 2014. The performance cash awards based on 2012 diluted earnings per share target will be paid at 85 percent of target
I could find no reference to performance cash awards in any of the company's last three 10-K's.  However, their annual proxy statements did list performance cash awards.  The last award given was in January 2011 and totaled roughly $1.5 million.  The $4.8 million is a 220% increase.

The SEC report mentions Rod Windley's new role as Executive Chairman, but gave no information on his compensation, now that he's working full time for Gentiva.

The company's Proxy Statement should be out in two weeks.  It will have a detailed breakdown of how executive's made out on the backs of Gentiva's workers.


Friday, March 8, 2013

Management Creates Darkness


I came across this survey and it fits with what we've been sharing, you at Generic Hospice and me at Gentiva.

U.S. corporate executives paint a bleak picture of the workplace, full of dolts and drones.

Workers lack communication, collaboration, critical thinking and creative skills executives say, according to a recent survey by the American Management Association. Turns out, bosses aren't too excited about their underlings' abilities, a prospect they're getting more worried about considering such skills will be more important amid a changing business landscape, they say.

The number of executives rating their employees as below average increased across all four areas since the survey was last taken in 2010. Almost 20 percent of workers lack at least average creative skills, according to executives.

American leaders frequently pit workers against one another, sloughing off the bottom 5-10%.  This internal competition comes at a price.

Rather than building character, competition sabotages self-esteem and ruins relationships

Add leaders' over-reliance on extrinsic reward programs, which kill intrinsic motivation and management has created the very thing it abhors.

The more an organization relies on incentives, the worse things get.

Leaders fail to recognize their dissatisfaction is of their making.  While the overall situation is bleak, Gentiva's is bleaker.   

Gentiva Hospice employees aren't communicated with.  For there to be an opportunity for collaboration, the company would need to seek input.  Gentiva dropped the employee survey two years ago.  There's no sign of its return.  It went the way of raises.

As for critical thinking skills, those are not desired in a directive, top down company.  "Yes" is what they expect to hear.  Creative skills are also superfluous.  Anything "created" must be submitted to corporate for approval.


Sunday, March 3, 2013

Gentiva Management: Insider Stock Sales


Gentiva executives sold stock during the last quarter of 2012 and first quarter of 2013.  New Executive Chairman Rod Wndley sold 230,000 shares for proceeds of nearly $2.5 million.  This is hardly a vote of confidence from Gentiva's expected turnaround chief.

Hospice Division President Jeff Shaner flipped 28,000 option shares, paying $5.16 per share and selling for an average $11.05.  Shaner made $164,000 with his option redemption.

On insider buys vs. sells, the metric shows zero buys and fifteen sales.   Gentiva CEO Tony Strange failed to mention this in their Q4 and year end analysts call.   Maybe analysts will catch it before the next investor presentation.

Barclays Global Healthcare Conference -- Miami, Florida at 4:45 p.m. ET on Tuesday, March 12, 2013

Might Tony Strange have guidance on the impact of sequestration in this call?   One analyst gave Tony a hard time over his sequestration caginess.  Will she pop up in the Q & A?

While analysts missed insider sales, Seeking Alpha caught them. Gentiva made their post "Three Stocks with Recent Intensive Insider Selling."  The Gentiva analysis summary states:

There have been four insider sell transactions and there have not been any insider buy transactions during the last 30 days. The stock is trading at a P/E ratio of 11.89 and a forward P/E ratio of 7.60. The company has a book value of $7.63 per share. There are two analyst buy ratings, six neutral ratings and one sell rating, with an average target price of $8.88. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart.  Three main reasons for the proposed short entry are negative revenue growth, bearish analyst target prices and the intensive insider selling activity.  
 What news will break next?  Will the company speak to how it plans to weather the 2% Medicare hospice cut from sequestration?  Will their expected March Def 14a reveal executive incentive compensation for 2012?  When will the company let employees know if any raise can be expected in 2013? 

While those at the bottom wait for crumbs to fall from Atlanta, Gentiva executives stand enriched.  They'd have it no other way.