The directors of Community Health Systems last week formally tapped President and COO Tim Hingtgen to succeed Wayne Smith as the company’s CEO, giving him a $200,000 bump in pay along the way.
Hingtgen, 52, has been with CHS since 2008. He was named a division president in 2014 and two years later was first named executive VP of operations and then COO, setting him up as the man to follow Smith as CEO. In that job, which he’ll take on Jan. 1, Hingtgen will receive a base salary of $1.2 million versus the $1 million he was being paid this year.
Smith will at the new year transition to executive chairman, a role for which he’ll be paid $1 million. His salary as CEO has been $1.6 million for several years. The board will decide the short- and long-term bonus plans of both men in February.
Franklin-based CHS is transitioning its top spot as it continues to restructure its finances. Executives on Friday said they planned to sell $1.05 billion of senior secured notes that will mature in 2027. At the same time, the company was looking to buy back from investors up to $1 billion in 2023 notes that have an interest rate of 6.25 percent and of which nearly $2.7 billion are outstanding.
But in the span of a few hours, the debt offering nearly tripled in size to $2.8 billion — two-thirds of it will pay 5.625 percent interest through 2027, the remained 6 percent through 2029 — and the CHS team said it now aims to redeem all of the 2023 debt in question.
The moves are part of a push to extend the debt deadlines for CHS, which this year put a bow on several years of selling hospitals that were home to about half of its bed count following its 2014 acquisition of Health Management Associates. The company early this month also converted $700 million of its 2028 debt into cash and stock.
Shares of CHS (Ticker: CYH) were essentially flat at $8.09 midday Tuesday. They began 2020 around $2.50 but have doubled in recent months as the company’s cost-cutting moves and hospital operations began showing signs of improvement.