Kindred Jettisons Performance Pay to Handsomely Enrich Executives

Strange Tony,

Kindred CEO Ben Breier made over $11.6 million for his work in 2017.  His executive pay is up over 100% in two short years.  Over this period Kindred lost $16.74 per share.  Breier's greatest pay check came the year the company lost the most money.

Kindred CFO Stephen Farber received $8.5 million from 2015-2017.  His main job was to reduce leverage from Kindred's corporate buying spree in early 2015.  Farber received $350,000 for his work relative to closing the Gentiva deal and the company purchased his home for a premium price after neighborly relations deteriorated.

Kindred at Home President David Causby earned a $1 million retention bonus each of the last three years.   His stay-on bonus made up $3 million of his $10.8 million in pay from 2015-2017. 

It's hard to see any pay for performance for these executives.  Breier got big money for promising growth but instead shrank the company.  CFO Stephen Farber was supposed to reduce leverage to the mid-4x range.  He made it soar to 6.1 times EBITDAR.  Causby received lottery winnings simply for being employed on a specific day of the year.

It's greed pay from a club board, the one that sold the company out on the cheap.  The sellout will enable Kindred executives to roll over their stock holdings into an even greater stake in their respective new private entities. Will board members get to do likewise?  That might explain the bizarre deal with Humana and two financial rapscallions.

Anonymous (from the level that got little to no raises under Kindred)

Retirement Benefit Withered in Run Up to Sellout

StrangeTony,

It's good you retired when you could afford to do so.  I'm sure Generic Hospice misses you.  We've been under Kindred for three long years and the retirement benefit decreased every year.  

I was excited at first with Kindred's core value, "Take care of our people."  Then I realized there was a Chief People Officer and the company takes good care of him and the executive team.  The employees at our hospice site, not so much.

One way to judge a society is the way they care for children and the elderly.  Kindred makes no bones about how little it does for its employees retirement.   

Spurred by corporate savings from GOP tax reform — as well as a desire to move the needle on retirement readiness — companies are beefing up retirement efforts by increasing contributions to employee retirement accounts with 32% of the S&P 500 companies surveyed plan to enhance retirement programs by improving 401(k) matching terms or making discretionary contributions to pension programs.

Kindred will file its executive compensation for 2017 with the Securities and Exchange Commission next week.  It will be interesting to review their pay for selling us out to Humana and two financial rapscallions. 

Retirement down by 50% since 2015.  Will executive pay be up?  That would be twisted.

Anonymous (from the marionette level and tired of being yanked)

Kindred Employees Prepare

Strange Tony,

In prior sellouts senior leaders took their newfound fortunes and ran.  Not so with this deal.  Employees are stuck with executives who sneered at wage increases over the eighteen month shop period and the eight months needed to close the deal.

Humana has ample cash/investments to buy all of Kindred with no debt, so it is odd the insurer chose to partner with two financial rapscallions and buy the Kindred at Home side over a five year period.  Humana President Bruce Broussard once worked for a Welsh, Carson, Anderson and Stowe affiliate.  He is partnering with his old bosses on the deal.

Kindred's debt will be refinanced as interest rates rise in volatile financial markets.  Our new owners will take millions in deal fees and could use a portion of borrowings to pay themselves a dividend.  It's likely interest expense will be higher after we are acquired.

Humana's Broussard said Kindred at Home's cash flow will be used for expansion, buying more home health, hospice and personal care companies.  With more money going to pay interest and finance expansion what is left for the people doing the actual work?  Kindred employees:  Brace Yourself,

Anonymous (from a small portion of Kindred that still cares about people)

Shareholders Fail to Deliver Ringing Executive Endorsement

Strange Tony,

Kindred shareholders voted to sell the company to an investor consortium comprised of two private equity firms, Humana and a Canadian pension fund.  Of Kindred's 91 million shares over 54 million or 60% received yes votes.  The other 40% were negative votes, abstained or simply not voted. 

Support for executive compensation in the merger was less robust.  58% voted yes while 42% fit in the non-yes category.  Shareholders voted on future executive compensation without knowledge of recent information.

Executive pay for 2017 is yet to be shared in any SEC filing.  This is the executive team that trashed its one-stop post acute care strategy and abandoned its call for investor patience, that good times are just around the corner.  How will the board reward a C Suite that consistently failed to meet promises before selling out on the cheap?  The answer will be revealed, unfortunately a month after the sellout vote foisted by management. 

Prior executive teams had the decency to disappear after making millions from their golden parachutes.  This team will split and stick around.  That means employees can expect more of the same treatment going forward.  

Anonymous (Waiting for crumbs to fall from the executive table)

Kindred Executives Sell Stock at Premium to Negotiated Deal Price

Strange Tony,

Kindred executives sold stock 35 times in the period March 24-28.  The ten senior executives did so at a premium price to the one they negotiated over an eighteen month shop period.  Like the nursing home division executives started high then sold low.

While common stockholders get $9.00 a share executives received $9.15 per share.  Their trade proceeds will be used for payment of exercise price or tax liability.  Good thing executives received a little extra juice.  That way they can keep more of the millions they make on the deal.

Oddly, rumors have Walmart pondering the purchase of Humana, the company that will take four to five years to buyout the old Gentiva from two private equity firms.  In a few years time our hospice employees could be working for Walmart.  Will Sam Walton's kin keep wages low and use our hospice's cash flow to make new acquisitions?  Will they pull cash out of our hospice to funnel up to their executives?

People at our hospice site deserve better than Kindred executives, who want to enrich themselves by selling out and remaining in charge.  The last bunch had the decency to take their riches and go away.  Not so with this crew.

The vote will be announced tomorrow.  Kindred employees need to brace yourself.

Anonymous (Tired of being Sould-Soled-Sold)