CYH
Community Health Systems INC
NYSE
Form 4: Community Health Systems CEO Tim Hingtgen Reports Stock Transactions
Sentiment:
SEC Form 4 Filing
3 March 2025 6:06 PM
CEO Tim Hingtgen reports acquisition and disposal of Community Health Systems stock and derivative securities, including performance-based restricted shares and stock options.
Worse than expected
The forfeiture of a significant portion (83.2%) of the performance-based restricted shares indicates that the company's performance during the 2022-2024 period was worse than expected, failing to meet the pre-determined performance objectives.
Summary
- Tim Hingtgen, CEO of Community Health Systems, filed a Form 4 detailing changes in beneficial ownership.
- On March 1, 2025, Hingtgen acquired 200,000 shares of common stock and disposed of 33,600 performance-based restricted shares.
- The disposal of performance-based restricted shares was due to the vesting of 16.8% of the target number based on performance between 2022 and 2024, with the remaining 83.2% forfeited.
- Hingtgen also acquired 400,000 performance-based restricted shares tied to performance objectives between 2025 and 2027.
- Additionally, Hingtgen acquired 200,000 stock options with an exercise price of $3.01, expiring on February 28, 2035.
- Following these transactions, Hingtgen beneficially owns 1,388,781 shares of common stock and various derivative securities, including performance-based restricted shares and stock options with varying exercise prices and expiration dates.
Sentiment
Score: 4
Explanation: The sentiment is slightly negative due to the significant forfeiture of performance-based restricted shares, indicating underperformance against targets. However, the acquisition of new stock options and shares could be seen as a positive sign, albeit a small one.
Positives
- The acquisition of 200,000 shares of common stock by the CEO could be interpreted as a sign of confidence in the company's future.
- The granting of 400,000 performance-based restricted shares aligns management's interests with those of shareholders, incentivizing achievement of performance targets.
Negatives
- The forfeiture of 166,400 performance-based restricted shares indicates that the company did not fully achieve its performance objectives for the 2022-2024 period.
- The vesting of only 16.8% of the performance-based restricted shares suggests significant underperformance against the set targets.
Risks
- Failure to meet performance objectives for the 2025-2027, 2023-2025 and 2024-2026 performance periods could result in the forfeiture of a significant portion of the performance-based restricted shares.
- Fluctuations in the company's stock price could impact the value of the stock options held by the CEO.
Future Outlook
The vesting of future performance-based restricted shares is contingent upon the company's performance against pre-determined objectives related to Cumulative Same-Store Adjusted EBITDA Growth, Cumulative Same-Store Net Revenue Growth, and Total Shareholder Return (TSR) Percentile Rank between 2025 and 2027, 2023 and 2025, and 2024 and 2026.
Industry Context
Executive compensation in the healthcare industry often includes a mix of salary, stock options, and performance-based incentives to align management's interests with those of shareholders and to drive company performance. The specific metrics used for performance-based awards, such as EBITDA growth, revenue growth, and TSR, are common indicators of financial health and shareholder value creation in the healthcare sector.
Comparison to Industry Standards
- Community Health Systems' executive compensation structure, including performance-based restricted shares, is similar to that of other publicly traded hospital operators such as HCA Healthcare and Tenet Healthcare.
- These companies also use metrics like revenue growth, EBITDA, and TSR to determine vesting of performance-based equity awards.
- However, the specific targets and vesting percentages may vary based on company-specific goals and industry benchmarks.
Stakeholder Impact
- Shareholders may be concerned about the company's failure to meet performance objectives for the 2022-2024 period, as indicated by the forfeiture of performance-based restricted shares.
- Employees may be affected by the company's performance, as their compensation and job security could be tied to the achievement of performance targets.
Next Steps
- The vesting of the 400,000 performance-based restricted shares acquired on 03/01/2025 will depend on the company's performance between 01/01/2025 and 12/31/2027.
- The vesting of performance-based restricted shares is subject to the attainment of certain performance objectives between 1/1/2023 and 12/31/2025 (the '2023-2025 Performance Period').
- The vesting of performance-based restricted shares is subject to the attainment of certain performance objectives between 1/1/2024 and 12/31/2026 (the '2024-2026 Performance Period').
Key Dates
- 03/01/2020: Date of grant for stock options with exercise price $4.99, expiring 02/28/2029
- 03/01/2021: Date of grant for stock options with exercise price $4.93, expiring 02/28/2030
- 03/01/2022: Date of grant for stock options with exercise price $8.81, expiring 02/28/2031
- 03/02/2022: Date of original report of performance-based restricted shares for the 2022-2024 performance period.
- 01/01/2022: Start date of the 2022-2024 Performance Period for performance-based restricted shares.
- 12/31/2024: End date of the 2022-2024 Performance Period for performance-based restricted shares.
- 03/01/2023: Date of grant for stock options with exercise price $10.18, expiring 02/29/2032
- 01/01/2023: Start date of the 2023-2025 Performance Period for performance-based restricted shares.
- 12/31/2025: End date of the 2023-2025 Performance Period for performance-based restricted shares.
- 03/01/2024: Date of grant for stock options with exercise price $6.15, expiring 02/28/2033
- 01/01/2024: Start date of the 2024-2026 Performance Period for performance-based restricted shares.
- 12/31/2026: End date of the 2024-2026 Performance Period for performance-based restricted shares.
- 03/01/2025: Date of transactions: vesting of performance-based restricted shares, acquisition of common stock and new stock options.
- 01/01/2025: Start date of the 2025-2027 Performance Period for performance-based restricted shares.
- 12/31/2027: End date of the 2025-2027 Performance Period for performance-based restricted shares.
- 02/28/2029: Expiration date for stock options with exercise price $4.99
- 02/28/2030: Expiration date for stock options with exercise price $4.93
- 02/28/2031: Expiration date for stock options with exercise price $8.81
- 02/29/2032: Expiration date for stock options with exercise price $10.18
- 02/28/2033: Expiration date for stock options with exercise price $6.15
- 02/28/2034: Expiration date for stock options with exercise price $2.87
- 02/28/2035: Expiration date for stock options with exercise price $3.01
- 03/03/2025: Date of Form 4 filing.
Keywords
CYH
Community Health Systems INC
NYSE
Sector: TBD
Filings with Classifications
Better than expected
1 July 2025 4:30 PM
Asset Divestiture Announcement
- The transaction generated $436 million in cash proceeds for Community Health Systems.
- An estimated pre-tax gain of $143 million ($93 million after tax) was realized from the sale.
- The final cash consideration of $436 million was higher than the amended base purchase price of $430 million, indicating positive adjustments.
Capital raise
24 April 2025 4:30 PM
Quarterly Report
- CHS entered into a privately negotiated agreement with a multi-asset investment manager to issue and sell $700 million aggregate principal amount of 10% Senior Secured Notes due 2033.
- The company expects to use the net proceeds from issuance of the 10% Senior Secured Notes due 2033, together with cash on hand, to redeem the 8% Senior Secured Notes due 2027 and to pay related fees and expenses.
Better than expected
24 April 2025 4:30 PM
Quarterly Report
- The company's net income improved significantly from a net loss in the same period last year.
Better than expected
23 April 2025 4:30 PM
Earnings Release
- The net loss attributable to Community Health Systems, Inc. stockholders improved from $(41) million to $(13) million year-over-year.
Worse than expected
3 April 2025 8:30 PM
Proxy Statement
- The net loss attributable to Community Health Systems, Inc. stockholders increased from $(133) million in 2023 to $(516) million in 2024.
Worse than expected
3 March 2025 6:06 PM
SEC Form 4 Filing
- The forfeiture of a significant portion (83.2%) of the performance-based restricted shares indicates that the company's performance during the 2022-2024 period was worse than expected, failing to meet the pre-determined performance objectives.
Worse than expected
3 March 2025 6:04 PM
SEC Form 4
- The forfeiture of a significant portion of performance-based restricted shares suggests that the company underperformed relative to its targets during the 2022-2024 performance period.
Worse than expected
3 March 2025 6:02 PM
SEC Form 4 Filing
- The forfeiture of 11,850 performance-based restricted shares suggests that the company's performance did not fully meet the established objectives for the 2022-2024 performance period.
Worse than expected
19 February 2025 4:31 PM
Annual Results
- The company reported a net loss attributable to Community Health Systems, Inc. stockholders of $516 million in 2024, compared to a net loss of $133 million in 2023.
Worse than expected
18 February 2025 4:30 PM
Quarterly Earnings Release
- The company reported a net loss attributable to Community Health Systems, Inc. stockholders for Q4 2024, compared to net income in the same period of 2023.
- The company reported a larger net loss attributable to Community Health Systems, Inc. stockholders for the year ended December 31, 2024, compared to the same period in 2023.
Worse than expected
26 November 2024 4:30 PM
Material Definitive Agreement Termination
- The termination of the sale agreement is worse than expected as it removes a planned divestiture and introduces uncertainty about the future of the assets.
Delay expected
22 November 2024 4:30 PM
Asset Sale Agreement
- The Punta Gorda hospital has indefinitely suspended inpatient operations due to hurricane damage, which may cause delays in the transaction.
Worse than expected
24 October 2024 4:34 PM
Quarterly Report
- The company's net loss of $391 million in Q3 2024 is significantly worse than the $91 million loss in Q3 2023.
- The company's impairment charges and professional liability accrual adjustments are significantly higher than expected.
- The company's consolidated inpatient admissions decreased by 4.1%, indicating a decline in overall patient volume.
Worse than expected
23 October 2024 4:30 PM
Quarterly Report
- The company's net loss attributable to stockholders was significantly worse than the same period last year, increasing from $(91) million to $(391) million.
- The adjusted EBITDA decreased from $360 million to $347 million in the third quarter of 2024 compared to the same period in 2023.
- The net loss per share increased from $(0.69) to $(2.95) in the third quarter of 2024 compared to the same period in 2023.
Capital raise
25 July 2024 4:30 PM
Quarterly Report
- The company completed an offering of an additional $1.225 billion aggregate principal amount of its outstanding 10.875% Senior Secured Notes due 2032.
- Proceeds from the offering of the Tack-On Notes were used to redeem all $1.116 billion of the outstanding 8.000% Senior Secured Notes due 2026, to fund senior note repurchases, pay related fees and expenses and for general corporate purposes.
Better than expected
25 July 2024 4:30 PM
Quarterly Report
- The company's net income improved compared to the same periods in the prior year, moving from a loss to a profit.
- The company's same-store revenue growth indicates better performance in its core operations.
- The company's debt restructuring efforts, including the gain from early extinguishment of debt, positively impacted the financial results.
Delay expected
25 July 2024 4:30 PM
Quarterly Report
- The company's construction of a replacement facility in Knox, Indiana, is required to be completed by September 30, 2026, if a new lease with Starke County is not entered into.
Better than expected
24 July 2024 4:30 PM
Quarterly Report
- The company's net loss improved significantly compared to the same period last year.
- Adjusted EBITDA increased, indicating improved operational performance.
- Same-store revenues and admissions showed positive growth.
Delay expected
21 June 2024 6:01 PM
Material Definitive Agreement Termination
- The sale of the two hospitals was delayed due to the FTC's legal challenge and subsequent injunction.
Worse than expected
21 June 2024 6:01 PM
Material Definitive Agreement Termination
- The termination of the sale is worse than expected as it disrupts CHS's strategic plans and may require a reassessment of their financial and operational strategies for the two hospitals.
Capital raise
21 May 2024 9:19 PM
Debt Offering Announcement
- The company is raising $1.225 billion through a tack-on offering of senior secured notes.
- The proceeds will be used to redeem existing debt and for general corporate purposes.
Capital raise
21 May 2024 8:28 AM
Debt Offering Announcement
- The company is raising $1.125 billion through a tack-on offering of senior secured notes.
- The proceeds will be used to redeem existing debt and for general corporate purposes.
Better than expected
25 April 2024 4:32 PM
Quarterly Report
- The company's net loss improved from $20 million to $6 million year-over-year, indicating better than expected financial performance.
Delay expected
25 April 2024 4:32 PM
Quarterly Report
- The sale of Lake Norman Regional Medical Center and Davis Regional Medical Center to Novant Health, Inc. is delayed due to a complaint filed by the Federal Trade Commission.
Better than expected
24 April 2024 4:30 PM
Quarterly Report
- The company's net loss per share improved from $(0.40) to $(0.32) year-over-year.
- Adjusted EBITDA increased from $335 million to $378 million year-over-year.
- Net cash provided by operating activities increased from $5 million to $96 million year-over-year.
Delay expected
18 April 2024 4:30 PM
Asset Sale Agreement
- The agreement can be terminated if the transaction is not completed by August 31, 2024, indicating a potential for delay.
Worse than expected
28 March 2024 4:31 PM
Proxy Statement
- The company experienced a net loss attributable to stockholders of $(133) million in 2023, compared to a net income of $46 million in the prior year.
- Adjusted EBITDA decreased by 0.9% to $1.454 billion in 2023.
- Cash Flows from Operations decreased by 30.0% to $210 million.
- The stock price decreased by 27.5% as of December 31, 2023.
Worse than expected
20 February 2024 4:30 PM
Quarterly Report
- The company's net income and adjusted EBITDA decreased compared to the same periods in the previous year.
- The company reported a net loss for the full year 2023, compared to a net income in 2022.
- The company is projecting a net loss per share for 2024.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.