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  "documentTitle": "Health Management Associates (HMA)",
  "authorId": "12_Glenview",
  "authorName": "Larry Robbins",
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  "presentationDate": "2013-07-01 00:00:00",
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  "notes": "Uses a step-by-step logical flow to reconcile public guidance with internal targets.",
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      "text": "In plain English, HMA management could have missed EBITDA guidance by 9%—and EPS guidance by 26%—and they still would have delivered on 100% of the internal Board and Management plan for incentive compensation",
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      "text": "In plain English, HMA management could have missed EBITDA guidance by 9%—and EPS guidance by 26%—and they still would have delivered on 100% of the internal Board and Management plan for incentive compensation\nThis is incongruous with HMA's Proxy: “at the time the 2012 profit plan was established, the compensation committee believed it was challenging;” or the Board's belief that its “executive compensation programs are founded on the belief that there should be a substantial and meaningful connection between the compensation of our named executive officers and the amount and quality of our earnings”\nFurthermore, to the extent that the Board and Management believed the likely EPS results for 2012 would come in 26% lower than guidance, such application of incentive compensation is misaligned",
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      "text": "On a May 3rd call with Glenview, HMA's CFO insisted that the $924M Performance Target included HITECH incentive payments\nOn a subsequent call on May 15th with Glenview, Chairman Schoen & Lead Director Knox confirmed the $924M Performance Target was established when original external guidance was given & that it included HITECH incentive payments – despite external guidance excluding HITECH incentive payments",
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      "text": "Step 1: The Board's $924M Target included HITECH revenue. However, the external guidance to Wall Street investors of $875-925M explicitly excluded the benefit of $90-120M of expected HITECH revenue\nStep 2: To then make the Board $924M number comparable to guidance provided to investors, excluding $90-120M from this $924M yields an internal Board and Management EBITDA target of only $804-834M—8-10% lower than external guidance\nStep 3: Applying the same approach in Step 2 to EPS guidance yields an internal Board and Management EPS target of 59-67c—this is 26% below external guidance",
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      "text": "EBITDA guidance: 26%",
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      "text": "at the time the 2012 profit plan was established, the compensation committee believed that it was challenging;\" or the Board's belief that its \"executive compensation programs are founded on the belief that there should be a substantial and meaningful connection between the compensation of our named executive officers and the amount and quality of our earnings\" — HMA's Proxy",
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      "kind": "source-note",
      "text": "Source: Company filings including 2012 proxy statement, press releases, earnings calls and Morgan Stanley equity research.",
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      "text": "Comparison table of Management's Public Guidance vs Board's Adjusted EBITDA Performance Target",
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      "kind": "title",
      "text": "Management & the Board's explanation violates the spirit of incentive compensation",
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      "kind": "title",
      "text": "HMA MISAPPLIED MANAGEMENT INCENTIVE COMPENSATION",
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