Thomas Frist III

About Thomas F. Frist III

Thomas F. Frist III is Chairman of HCA’s Board, a director since 2006, age 57 as of March 14, 2025. He is founder and managing principal of Frist Capital, LLC (since 1998) and currently serves on the board of Verisign, Inc.; he previously served on Science Applications International Corporation’s board (2013–2017). He is part of the founding Frist family and, through the Frist Entities, is aligned with a ~28% ownership block; the Frist Entities have rights to nominate two HCA directors under a Stockholders’ Agreement while they hold ≥3% of shares. He is not classified as independent by the Board.

Past Roles

External Roles

Board Governance

• Role: Chairman of the Board; leads agendas, calls meetings, chairs executive sessions of non‑management directors, engages stockholders, advises CEO on strategic matters. Independent presiding director is Michael W. Michelson.
• Independence: Not independent; Board lists independent directors and excludes Frist III.
• Committee Memberships: Not listed as a member of any standing committee (Audit & Compliance; Compensation; Finance & Investments; Nominating & Corporate Governance; Patient Safety & Quality of Care).
• Nomination Rights/Interlocks: Frist Entities (including Thomas F. Frist III) retain the right to nominate two directors via Stockholders’ Agreement; they owned ~28% of HCA as of Feb 24, 2025.
• Board Meetings/Attendance: Board met six times in 2024; all director nominees attended at least 75% of Board and applicable committee meetings; all directors attended the 2024 annual meeting.
• Executive Sessions: Non‑management directors meet at regular executive sessions; independent directors meet separately at least annually; the Chairman presides over non‑management sessions.

Fixed Compensation (Director)

Additional details:

• In 2024, he elected to receive 353 RSUs in lieu of the Board retainer and 321 RSUs in lieu of the Chairman retainer; RSU counts are based on grant date closing price and relate to service Apr 25, 2024–Apr 24, 2025.
• Annual director equity award value: $190,000; RSUs vest 100% at the next annual meeting or first anniversary of grant, subject to continued service; change‑in‑control accelerates vesting.

Performance Compensation (Director)

• Directors do not receive performance‑based cash bonuses or PSUs; equity is time‑vested RSUs only.
• Plan provisions: Awards are subject to double‑trigger change‑in‑control acceleration; performance awards under the employee plan are deemed “target” on CIC, though directors receive RSUs not PSUs; awards subject to clawback per Company policy and SEC/NYSE rules.

Other Directorships & Interlocks

Expertise & Qualifications

• Investor and business experience; corporate finance and strategic planning; deep knowledge of HCA and healthcare industry.
• Governance: Long‑term stockholder alignment; experience with stakeholder issues; supports patient‑focused culture.

Equity Ownership

Policy safeguards:

• Hedging and pledging: Directors and insiders are restricted from hedging and pledging HCA securities as collateral for margin/other loans. This mitigates pledging risk.
• Director ownership guideline: 5× annual cash retainer within five years; all directors with >5 years meet guidelines (Frist III >5 years).

Governance Assessment

• Committee assignments and independence: As Chairman, Frist III is not independent and holds no committee seats; all key committees (Audit, Compensation, Nominating) are fully independent, and an independent presiding director (Michelson) is in place—important checks balancing a non‑independent chair.
• Ownership alignment: Significant family ownership (~28%) via Hercules Holding II plus personal RSU holdings and deferrals indicate long‑term alignment; directors may elect equity in lieu of cash, which Frist III did in 2024.
• Potential conflicts/related party exposure: The Stockholders’ Agreement grants Frist Entities the right to nominate two directors while they own ≥3%; this concentration and board influence is a governance sensitivity for minority investors, though HCA discloses and oversees related party matters via the Audit & Compliance Committee.
• Attendance and engagement: Board met six times in 2024; all nominees met ≥75% attendance and all directors attended the annual meeting—acceptable engagement.
• Risk indicators and red flags:
  • Concentrated control/Investor Director status: Red flag for independence; mitigated by independent committees and presiding director.
  • Pledging/hedging: Policy prohibits—reduces alignment risks.
  • Change‑in‑control terms: Double‑trigger provisions and clawbacks are shareholder‑friendly.
• Director pay structure: Mix of cash retainer and time‑vested RSUs; annual board equity award ($190,000) vests at next annual meeting; Frist III’s 2024 total director compensation was $399,863, with equity deferrals signaling alignment.

Overall: Frist III’s non‑independent chair role and the Frist Entities’ ~28% stake create control concentration and nomination influence, a meaningful governance consideration. Independent committee composition, an independent presiding director, prohibitions on pledging/hedging, and strong disclosure and oversight of related party arrangements partially mitigate these concerns.