o | Preliminary Proxy Statement | |||||||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||||
x | Definitive Proxy Statement | |||||||
o | Definitive Additional Materials | |||||||
o | Soliciting Material Under §240.14a-12 |
x | No fee required. | |||||||
o | Fee paid previously with preliminary materials. | |||||||
o | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
Focus on the Individual | Whole Health | Active Local Involvement | ||||||
Empowering people to create and maintain lifelong healthy habits | Delivering a full spectrum of care from physical health to emotional wellness | Helping our neighbors create stronger, healthier communities |
Letter from our CEO and our Chairman | 3 |
4 | Centene Corporation |
Letter from our CEO and our Chairman | 5 |
Sarah London Chief Executive Officer |
H. James Dallas Chairman of the Board |
6 | Centene Corporation |
Time and Date | Place | Record Date | |||||||||||||||||||||||||||
10:00 AM, Central Time, on Wednesday, May 10, 2023 | Centene Plaza 7700 Forsyth Boulevard St. Louis, Missouri 63105 Centene Auditorium | Stockholders as of March 13, 2023 are entitled to vote |
Voting Items Proposal | Board Vote Recommendation | For Further Details | |||||||||
(1) To elect ten directors to hold office until the 2024 Annual Meeting of Stockholders or until their successors are duly elected and qualified; | FOReach director nominee | Page 21 | |||||||||
(2) To cast a non-binding advisory vote on the compensation of the Company’s Named Executive Officers; | FOR | Page 69 | |||||||||
(3) To cast a non-binding advisory vote on how frequently we should provide our stockholders with a Say-on-Pay vote; | ANNUAL | Page 119 | |||||||||
(4) To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023; | FOR | Page 120 | |||||||||
(5) To consider the stockholder proposal for shareholder ratification of termination pay, if properly presented at the Annual Meeting; and | AGAINST | Page 123 | |||||||||
(6) To consider the stockholder proposal for maternal morbidity reduction metrics in executive compensation, if properly presented at the Annual Meeting. | AGAINST | Page 126 |
Executive Vice President, | St. Louis, Missouri | ||||
Secretary and General Counsel | March 24, 2023 |
How to Vote | ||||||||||||||||||||
Internet: www.proxyvote.com | QR Code | |||||||||||||||||||
Telephone: 1-800-690-6903 | Mark, sign, date and promptly mail the enclosed proxy card in the postage-paid envelope | Scan this QR code to vote with your mobile device | ||||||||||||||||||
Notice of 2023 Annual Meeting of Stockholders | 7 |
Letter from our CEO and our Chairman | ||||||||
$144.5 billion | $2.07 | $5.78 | 9% | 10% | ||||||||||
Total Revenues, a 15% increase vs. 2021 | Diluted Earnings Per Share (EPS) | Adjusted Diluted EPS | TSR 3-Year CAGR | TSR 5-Year CAGR | ||||||||||
Medicaid | Marketplace | Medicare Advantage | ||||||||||||
We are the largest Medicaid Managed Care Organization | We are the #1 Marketplace Carrier | We showed strong growth year-over-year in our Medicare Advantage product | ||||||||||||
16.0 million members across 29 states | 2.1 million members across 27 states | 1.5 million members across 36 states |
Who We Are | 9 |
10 | Centene Corporation |
Since its founding as a single local healthcare plan in 1984, Centene has been focused on the health of the communities we serve. In alignment with our purpose of transforming the health of the community, one person at a time, we continue to center around the principles upon which our company was founded: focus on the individual, commitment to whole health, and active local involvement. These principles shape our focus on the environment, the health and social well-being of our communities, and our culture of ethics and governance. | ||
Advancing Environmental Resilience | |||||||||||
•Environmental Impacts on Health •Environmental Sustainability | •Ethics and Compliance •Governance and Accountability •Data Privacy and Security | ||||||||||
Serving Our Communities | Powering Better Health | ||||||||||
•Community Outreach •Employee Partnership and Development •Diversity, Equity and Inclusion •Community Investment •Community Engagement •Employee Health and Well-Being | •Healthcare Quality •Healthcare Affordability •Healthcare Access •Research and Development •Public Policy |
Proxy Summary | 11 |
1 PROPOSAL | Election of Directors The Board recommends a vote FOR each director nominee. | See page21 | |||||||||
Director Since | Committee Memberships | |||||||||||||||||||||||||
Name and Primary (or Former) Occupation | Age | Other Public Boards | ACC | CTC | GC | VCC | ||||||||||||||||||||
Jessica L. Blume, CPA Retired Vice Chairman of Deloitte LLP | 68 | 2018 | Publix Super Markets, Inc.1 | |||||||||||||||||||||||
Kenneth A. Burdick Chairman and Chief Executive Officer of LifeStance Health Group, Inc. | 64 | 2022 | LifeStance Health Group, Inc. | |||||||||||||||||||||||
Christopher J. Coughlin Retired Executive Vice President and Chief Financial Officer, Tyco International Ltd. | 70 | 2022 | Karuna Therapeutics, Inc. Prestige Consumer Healthcare Inc. | |||||||||||||||||||||||
H. James Dallas Former Senior Vice President, Quality and Operations, Medtronic Public Limited Company | 64 | 2020 | KeyCorp | |||||||||||||||||||||||
Wayne S. DeVeydt Managing Director, Bain Capital; Executive Chairman, Surgery Partners, Inc. | 53 | 2022 | Surgery Partners, Inc. | |||||||||||||||||||||||
Frederick H. Eppinger Director, President and Chief Executive Officer of Stewart Information Services Company | 64 | 2006 | Stewart Information Services Company | |||||||||||||||||||||||
Monte E. Ford Principal Partner, Chief Information Officer Strategy Exchange | 63 | 2022 | Akamai Technologies, Inc. Iron Mountain Inc. Jet Blue Airways Corporation | |||||||||||||||||||||||
Sarah M. London Chief Executive Officer of Centene Corporation | 42 | 2021 | ||||||||||||||||||||||||
Lori J. Robinson Retired United States Air Force General | 64 | 2019 | Korn Ferry NACCO Industries, Inc. | |||||||||||||||||||||||
Theodore R. Samuels Former President, Capital Guardian Trust Company | 68 | 2022 | Bristol Myers Squibb Company Perrigo Company plc | |||||||||||||||||||||||
1Securities registered pursuant to Section 12(g) of the Securities Act. |
ACC = Audit and Compliance Committee | GC = Governance Committee | Chair | |||||||||
CTC = Compensation and Talent Committee | VCC = Value Creation Committee | Member |
12 | Centene Corporation |
Age |
40's | 60's | ||||||||||||||||
50's | 70's |
Independence |
Independent | |||||||||||
Non-Independent |
Diversity |
Diverse | |||||||||||
Non-Diverse |
30% Gender Diversity 3 out of 10 directors are female | |||||
20% Race/Ethnic Diversity 2 out of 10 directors are racially/ethnically diverse |
Less than 2 years | |||||
2-5 years | |||||
6+ years |
Leadership (10/10) | Healthcare and Insurance (9/10) | Technology (4/10) | ||||||
Finance and Accounting (7/10) | ESG and Community Involvement (10/10) | Public Company Board and Governance (10/10) |
Proxy Summary | 13 |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Board Refreshment | Long-tenured Lead Independent Director | Appointed James Dallas as new Lead Independent Director in January 2022 | ||||||||||||||||||||||||
Separate CEO and Chairman roles | Separated CEO and Chairman roles in April 2022 | |||||||||||||||||||||||||
Refresh Board | Appointed Kenneth Burdick, Christopher Coughlin, Wayne DeVeydt and Theodore Samuels in January 2022 | |||||||||||||||||||||||||
Appointed Monte Ford in November 2022 | ||||||||||||||||||||||||||
Average age of Board members reduced to 62 | ||||||||||||||||||||||||||
Average tenure of Board members reduced to 3.6 years | ||||||||||||||||||||||||||
Adopt retirement policy | Adopted mandatory retirement policy at age 75 | |||||||||||||||||||||||||
Declassify Board of Directors | Declassified Board of Directors; all directors to | |||||||||||||||||||||||||
Stockholder special meeting rights | Amended Certificate of Incorporation and By-laws to provide stockholders with 10% ownership the right to | |||||||||||||||||||||||||
Stockholder written consent rights | Amended | |||||||||||||||||||||||||
Improve stockholder proxy access rights | Amended By-laws to | |||||||||||||||||||||||||
Amended By-laws to shorten the advance notice window to 90 – 120 days | ||||||||||||||||||||||||||
14 | Centene Corporation |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Modernize Board Committees | Rotate membership of committees | Committee membership refreshed in January 2022 and | ||||||||||||||||||||||||
Refresh chairs of committees | All committees have refreshed their chairs since November 2021 | |||||||||||||||||||||||||
Reduce the number of committees | Number of committees reduced from 7 to | |||||||||||||||||||||||||
Clarify roles of committees | Committee charters revised with responsibilities realigned in August 2022 | |||||||||||||||||||||||||
Executive Compensation | Align CEO compensation with peers | New CEO compensation set slightly below the | ||||||||||||||||||||||||
Align NEO compensation with peers | Offers for new hires made with the goal of being at the 50th percentile | |||||||||||||||||||||||||
Annual Incentive Plan should have clearer performance targets | Increased Adjusted Diluted EPS to 50% of the | |||||||||||||||||||||||||
Weighting of business unit and individual goals have been decreased to | ||||||||||||||||||||||||||
Quality metrics represent 10% of the | ||||||||||||||||||||||||||
Long-Term Incentive Compensation Program should have fewer components | 2023-2025 Plan no longer includes performance-based stock options | |||||||||||||||||||||||||
2023-2025 Plan no longer includes Cash LTIP | ||||||||||||||||||||||||||
Long-Term Incentive Compensation Program should have targets different from Annual Incentive Plan | 2023-2025 Plan metrics are all different from the Annual Incentive Plan targets | |||||||||||||||||||||||||
Long-Term Incentive Plan should use relative Total Shareholder Return (TSR) as a performance metric | 2023-2025 Plan includes 33% of PSUs tied to relative TSR performance metric | |||||||||||||||||||||||||
Performance against targets should be disclosed more clearly | Performance against targets is described in the 2022 Executive Compensation Program section under Compensation Discussion and Analysis | |||||||||||||||||||||||||
Limit severance payments | Limited Michael Neidorff’s death benefits to those required by | |||||||||||||||||||||||||
Adopted cash severance policy to | ||||||||||||||||||||||||||
Review relationship with compensation consultant | Appointed Frederic W. Cook & Co., Inc. (FW Cook) as new compensation consultant in 2022 | |||||||||||||||||||||||||
Proxy Summary | 15 |
Stockholder Rights Annual Election of Directors Majority Voting Uncontested Director Elections Directors Can Be Removed With or Without Cause “Proxy Access” Right for Stockholders 10% of Shares Can Call a Special Meeting Stockholders Can Act by Written Consent No Supermajority Vote Provisions No Stockholder Rights Plan or “Poison Pill” | Board Practices Commitment to Board Refreshment 80% of Board Chairman and CEO Separate Non-Executive, Independent Chairman Active Stockholder Engagement Mandatory Retirement Age of Limits on Continuing Education for Directors Annual Board Self-Evaluation Process Adopted “Rooney Rule” for Board Recruitment |
16 | Centene Corporation |
2 PROPOSAL | Advisory Resolution to Approve Executive Compensation The Board recommends a vote | See page69 | |||||||||
Category | 2021 | 2022 | 2023 | |||||||||||||||||||||||
Granted in Dec. 2020 | Granted in Dec. 2021 | Granted in Mar. 2023 | ||||||||||||||||||||||||
Annual Incentive Plan Metrics & Weighting | Adjusted Diluted EPS | 35% | Adjusted Diluted EPS | 50% | Adjusted Diluted EPS | 65% | ||||||||||||||||||||
Business Unit & Individual Goals | 50% | Business Unit & Individual Goals | 40% | Business Unit & Individual Goals | 25% | |||||||||||||||||||||
SG&A Expense Management | 15% | Quality | 10% | Quality | 10% | |||||||||||||||||||||
•Reduced Individual weighting •Increased Adjusted Diluted EPS Weighting •Added Quality Metric | •Reduced Individual weighting •Increased Adjusted Diluted EPS Weighting | |||||||||||||||||||||||||
PSUs | Adjusted Pre-Tax Margin | 60% | Adjusted Diluted EPS | 70% | Adjusted Pre-Tax Earnings Growth CAGR | 34% | ||||||||||||||||||||
Revenue Growth CAGR | 40% | Adjusted Net Earnings Margin | 30% | Adjusted Net Earnings Margin | 33% | |||||||||||||||||||||
Relative TSR | 33% | |||||||||||||||||||||||||
•Added rTSR with target > median •Eliminated duplicative Adjusted Diluted EPS measure | ||||||||||||||||||||||||||
Stock Options | Granted to CEO without a stock appreciation condition | Granted with a stock appreciation condition No Stock Options Granted in 2022 | Eliminated Stock Options | |||||||||||||||||||||||
Cash LTIP | Adjusted Pre-Tax Margin | 30% | Adjusted Diluted EPS | 35% | Eliminated Cash LTIP | |||||||||||||||||||||
Revenue Growth CAGR | 20% | Adjusted Net Earnings Margin | 15% | |||||||||||||||||||||||
Relative TSR | 50% | Relative TSR | 50% | |||||||||||||||||||||||
Other | •New CEO compensation set slightly below the median •New policy limits cash severance to 2.99x base + bonus |
2022 Pay Elements | Award Type | Mix | Purpose | |||||||||||||||||||||||||||||
Base Salary | Cash | 14% | To recognize individual contribution, time in role, scope of responsibility, leadership skills and experience. | |||||||||||||||||||||||||||||
Annual Cash Incentive Plan | Cash | 17% | To reward executives for performance on key operational and financial measures, with emphasis on individual contribution. | |||||||||||||||||||||||||||||
Long-Term Incentive Awards | Performance-based Restricted Stock Units (PSUs) | Equity | 69% | To retain and motivate executives to drive long-term stockholder value and align their actions to drive successful business outcomes. The performance-based stock options and cash long-term incentives were awarded in 2021 for many of our NEOs (prior to the Board and committee refreshment in 2022). Beginning in 2023, we will grant annual awards in March and eliminate performance based-stock options or cash long-term incentives. | ||||||||||||||||||||||||||||
Service-based Restricted Stock Units (RSUs) | Equity | |||||||||||||||||||||||||||||||
Performance-based Stock Options | Equity | |||||||||||||||||||||||||||||||
Cash Long-term Incentive | Cash |
18 | Centene Corporation |
2022 Annual Incentive Plan Funding Results |
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
2022 Adjusted Diluted EPS |
Threshold | Target | Maximum | Weight | Metric Payout of Target | Weighted Payout | ||||||||||||||||||
Pre-tax Margin (As adjusted) | 60 | % | 82.7 | % | 49.6 | % | |||||||||||||||||
Compound Annual Revenue Growth Rate | 40 | % | 132.0 | % | 52.8 | % | |||||||||||||||||
100 | % | 102.4 | % |
Threshold | Target | Maximum | Weight | Metric Payout of Target | Weighted Payout | ||||||||||||||||||
Pre-tax Margin (As adjusted) | 30 | % | 82.7 | % | 24.8 | % | |||||||||||||||||
Compound Annual Revenue Growth Rate | 20 | % | 132.0 | % | 26.4 | % | |||||||||||||||||
HCI Peer Group Relative TSR Percentile Rank | 50 | % | — | % | — | % | |||||||||||||||||
100% | 51.2 | % |
Proxy Summary | 19 |
20 | Centene Corporation |
3 PROPOSAL | Advisory Vote on How Frequently We Should Provide our Stockholders with a Say-on-Pay Vote The Board recommends a vote for ANNUAL Say-on-Pay votes. | See page119 | |||||||||
4 PROPOSAL | Ratification of Appointment of Independent Registered Public Accounting Firm The Board recommends a vote FORthis proposal. | See page 120 | |||||||||
5 PROPOSAL | Stockholder Proposal for Shareholder Ratification of Termination Pay The Board recommends a vote AGAINSTthis proposal. | See page 123 | |||||||||
6 PROPOSAL | Stockholder Proposal for Maternal Morbidity Reduction Metrics in Executive Compensation The Board recommends a vote AGAINST this proposal. | See page 126 | |||||||||
Proposal 1 – Election of Directors | 21 |
1 PROPOSAL | Election of Directors | ||||
The Board | |||||
22 | Centene Corporation |
Leadership Experience We believe that directors with experience in significant leadership positions over an extended period, especially chief executive officer positions, chief financial officers and other senior executives, provide the Company with valuable insights and strategic thinking. These individuals generally possess extraordinary leadership qualities and the ability to identify and develop those qualities in others. They demonstrate a practical understanding of organizations, processes, strategy, risk management and the methods to drive change and growth. | |||||
Finance and Accounting Experience We believe that directors with experience in public accounting, investment banking and financial services companies possess an understanding of finance and the financial reporting process with which to manage our business. We measure our operating and strategic performance by reference to financial targets. In addition, accurate financial reporting and robust auditing are critical to our success and developing stockholders’ confidence in our reporting processes under the Sarbanes-Oxley Act of 2002. | |||||
Healthcare and Insurance Industry Experience Our industry is complex and rapidly evolving. Healthcare and insurance industry experience includes expertise with healthcare operations, healthcare technology, insurance and other experience. Directors with industry experience help the Company stay abreast of industry best practices and innovations and help us to benchmark our practices against those of our competitors. | |||||
Environmental, Social & Governance Experience and Community Involvement As a corporate citizen, we believe that sustainable operations are both financially and operationally beneficial to our business, and critical to the health of our employees and the communities in which we operate. We seek directors with experience in building strong environmental, labor, health & safety and ethical practices. | |||||
Information Technology and Security Experience Because effective information systems and the integrity and timeliness of data we use to serve our customers and healthcare professionals are integral to the operation of our business, and because technology plays a central role in healthcare, including the diagnosis, management and treatment of disease, we seek directors with experience in relevant technology and who have experience managing cybersecurity and information security risks. | |||||
Public Company Board and Governance Experience Directors with public company board experience understand the dynamics and operation of a corporate board, the relationship of a public company board to the Chief Executive Officer and other senior management personnel, the legal and regulatory landscape in which public companies must operate, the importance of particular agenda and oversight issues, and how to oversee an ever-changing mix of strategic, operational, and compliance-related matters. |
Proposal 1 – Election of Directors | 23 |
Leadership | Finance and Accounting | Healthcare and Insurance | ESG and Community Involvement | Technology | Public Company Board and Governance | ||||||||||||||||||
Jessica L. Blume, CPA | |||||||||||||||||||||||
Kenneth A. Burdick | |||||||||||||||||||||||
Christopher J. Coughlin | |||||||||||||||||||||||
H. James Dallas | |||||||||||||||||||||||
Wayne S. DeVeydt | |||||||||||||||||||||||
Frederick H. Eppinger | |||||||||||||||||||||||
Monte E. Ford | |||||||||||||||||||||||
Sarah M. London | |||||||||||||||||||||||
Lori J. Robinson | |||||||||||||||||||||||
Theodore R. Samuels |
24 | Centene Corporation |
While our Board does not establish specific gender and race/ethnicity goals or quotas with respect to diversity, the Board is committed to actively seeking women and racially/ethnically diverse director candidates as part of the process for selecting new Board members and adopted the “Rooney Rule” requiring that women and minorities be included in the initial pool of candidates when selecting new director nominees. | ||
40's | 60's | ||||||||||
50's | 70's |
Independent | |||||
Non-Independent |
Diverse | |||||
Non-Diverse |
30% Gender Diversity 3 out of 10 directors are female | |||||
20% Race/Ethnic Diversity 2 out of 10 directors are African American |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Board Refreshment | Long-tenured Lead Independent Director | Appointed James Dallas as new Lead Independent Director in January 2022 | ||||||||||||||||||||||||
Separate CEO and Chairman roles | Separated CEO and Chairman roles in April 2022 | |||||||||||||||||||||||||
Refresh Board | Appointed Kenneth Burdick, Christopher Coughlin, Wayne DeVeydt and Theodore Samuels in January 2022 | |||||||||||||||||||||||||
Appointed Monte Ford in November 2022 | ||||||||||||||||||||||||||
Average age of Board members reduced to 62 | ||||||||||||||||||||||||||
Average tenure of Board members reduced to 3.6 years | ||||||||||||||||||||||||||
Adopt retirement policy | Adopted mandatory retirement policy at age 75 | |||||||||||||||||||||||||
Proposal 1 – Election of Directors | 25 |
26 | Centene Corporation |
AGE:68 DIRECTOR SINCE: February 2018 RACE/ETHNICITY AND GENDER: White Female COMMITTEES: •Audit and Compliance •Governance (Chair) | |||||||||||||||||||||||
Jessica L. Blume, CPA Retired Vice Chairman of Deloitte LLP | |||||||||||||||||||||||
EXPERIENCE: •Vice Chairman of Deloitte LLP from 2012 until her retirement in 2015 •Served in various leadership positions during her 26 years at Deloitte including serving on the firm’s US Executive Committee and Board of Directors, •Prior to Deloitte, she served as a CFO for one of the largest US local governments •Received a Bachelor of Science from the University of Central Florida and is a CPA REASONS FOR NOMINATION: Ms. Blume brings extensive experience in the accounting profession, as well as executive leadership experience as Vice Chairman of Deloitte. Her experience as a Deloitte leader has provided Ms. Blume with significant exposure to business operations in a variety of industries, including healthcare, as she led large-scale business transformations and consolidations. Ms. Blume’s financial acumen, including her expertise in accounting issues and service on the audit committee of another company with SEC-registered securities, is an asset to our Board. CURRENT DIRECTORSHIPS: •Publix Super Markets, Inc. QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Technology | Public Company Board and Governance |
Proposal 1 – Election of Directors | 27 |
AGE:64 DIRECTOR SINCE: January 2022 RACE/ETHNICITY AND GENDER: White Male COMMITTEES: •Value Creation (Chair) | |||||||||||||||||||||||
Kenneth A. Burdick Chairman and Chief Executive Officer of LifeStance Health Group, Inc. | |||||||||||||||||||||||
EXPERIENCE: •CEO and Chairman of Lifestance Health, Inc., a Nasdaq listed public company specializing in behavioral health, beginning in September 2022 •Executive Vice President of Markets and Products of Centene Corporation from January 23, 2020, until his retirement on February 21, 2021 •Chief Executive Officer of WellCare Health Plans, Inc. from 2015 until January 2020, when the company was acquired by Centene •Joined WellCare in 2014, serving initially as President, National Health Plans and then as President and Chief Operating Officer •President and Chief Executive Officer of Blue Cross and Blue Shield of Minnesota from February 2012 to July 2012 •Chief Executive Officer of the Medicaid and Behavioral Health businesses of Coventry Health Care, Inc. from August 2010 to February 2012 •Held a variety of positions with UnitedHealth Group, Inc., including Chief Executive Officer of UnitedHealthcare from 2006 to 2008 and Chief Executive Officer of Secured Horizons (Medicare division of UnitedHealthcare) from 2008 to 2009 •Received a Bachelor of Arts from Amherst College and a Juris Doctorate from the University of Connecticut REASONS FOR NOMINATION: Mr. Burdick has over 30 years of healthcare executive and operations experience, including prior roles as a Fortune 500 public-company chief executive officer and board member, and has a demonstrated track record of growing healthcare companies. CURRENT DIRECTORSHIPS: •LifeStance Health Group, Inc. PRIOR DIRECTORSHIPS: •Orion Acquisition Corporation •First Horizon National Corporation QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Public Company Board and Governance |
28 | Centene Corporation |
AGE:70 DIRECTOR SINCE: January 2022 RACE/ETHNICITY AND GENDER: White Male COMMITTEES: •Audit and Compliance •Compensation and Talent (Chair) | |||||||||||||||||||||||
Christopher J. Coughlin Retired Executive Vice President and Chief Financial Officer, Tyco International Ltd. | |||||||||||||||||||||||
EXPERIENCE: •Senior Advisor to the CEO and Board of Directors of Tyco International from 2010 to his retirement in 2012 •Executive Vice President and CFO of Tyco from 2005 to 2010, during which he was instrumental in turning the company around after a management and financial scandal and ultimately separated it into six separate public companies •Chief Operating Officer of the Interpublic Group of Companies from June 2003 to December 2004 and as Chief Financial Officer from August 2003 to June 2004 •Executive Vice President and Chief Financial Officer of Pharmacia Corporation from 1998 until its acquisition by Pfizer in 2003 •Named a 2022 Director of the Year by the New Jersey Chapter of the National Association of Corporate Directors (NACD) for his leadership in public corporate governance •Named the NACD Corporate Director of the Year in 2015 •Received a Bachelor of Science from Boston College REASONS FOR NOMINATION: Mr. Coughlin brings extensive experience in complex financial and accounting matters, including public accounting and reporting. Mr. Coughlin also has broad experience as a public company director resulting in corporate governance, talent succession and executive compensation expertise, as well as board leadership experience. CURRENT DIRECTORSHIPS: •Karuna Therapeutics, Inc. •Prestige Consumer Healthcare, Inc. PRIOR DIRECTORSHIPS: | |||||||||||||||||||||||
•Allergan plc •Alexion Pharmaceuticals, Inc. •Covidien plc •Dipexium Pharmaceuticals, Inc. •Perrigo Company | •Hologic Inc. •Dun & Bradstreet Corp. •Forest Laboratories, LLC. •Interpublic Group of Companies •Monsanto Company | ||||||||||||||||||||||
QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Public Company Board and Governance |
Proposal 1 – Election of Directors | 29 |
AGE:64 DIRECTOR SINCE: January 2020 RACE/ETHNICITY AND GENDER: African-American Male COMMITTEES: •Value Creation | |||||||||||||||||||||||
H. James Dallas Former Senior Vice President, Quality and Operations, Medtronic Public Limited Company | |||||||||||||||||||||||
EXPERIENCE: •An independent consultant focusing on change management, information technology strategy, and risk •Retired as Senior Vice President of Quality and Operations at Medtronic Inc., a global medical technology company, in 2013 •Joined Medtronic Inc. in 2006 and had previously served as Senior Vice President and Chief Information Officer where his responsibilities included executing cross-business initiatives to maximize the company’s global operating leverage •Also served as a member of Medtronic Inc.’s executive management team •Worked with Georgia-Pacific Corporation, a maker of tissue, pulp, paper, packaging, building products and related chemicals, from 1984 to 2006 •Held various roles of increasing responsibility while at Georgia-Pacific, ending his career at the company as its Vice President and Chief Information Officer from 2002 to 2006 •Received a Bachelor of Science from the University of South Carolina - Aiken and a Master of Business Administration from Emory University •Served as Chairman of the Board since April 2022 and has informed the Board that he plans to step down as Chairman prior to the 2023 Annual Meeting of Stockholders REASONS FOR NOMINATION: Mr. Dallas brings an in-depth knowledge of enterprise change management, operational risk management, information technology, information technology security, and data privacy gained from serving as the chief information officer of public companies. Mr. Dallas also brings the provider perspective to the Board from his service as a director of Grady Memorial Hospital. CURRENT DIRECTORSHIPS: •KeyCorp •Grady Memorial Hospital Corporation PRIOR DIRECTORSHIPS: •WellCare Health Plans, Inc. •Strategic Education, Inc. •Capella Education Company QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Healthcare and Insurance | ESG and Community Involvement | |||||||||||||||||||||
Technology | Public Company Board and Governance |
30 | Centene Corporation |
AGE:53 DIRECTOR SINCE: January 2022 RACE/ETHNICITY AND GENDER: White Male COMMITTEES: •Audit and Compliance •Governance | |||||||||||||||||||||||
Wayne S. DeVeydt Managing Director, Bain Capital; Executive Chairman, Surgery Partners, Inc. | |||||||||||||||||||||||
EXPERIENCE: •Managing Director at Bain Capital since March 2022 •Executive Chairman of the Board of Directors of Surgery Partners, Inc. since January of 2020 •Chief Executive Officer and Director of Surgery Partners, Inc. from January 2018 until January 2020 •Senior Advisor to the Global Healthcare division of Bain Capital Private Equity, LP from January 2017 until January 2018 •Executive Vice President and Chief Financial Officer of Anthem, Inc. for nearly a decade •During his tenure at Anthem, he also held numerous other leadership roles, including Chief Strategy Officer, Chief Accounting Officer, and Chief of Staff to the Chairman and Chief Executive Officer •Previously a partner with PricewaterhouseCoopers, where he served the managed care and healthcare sector •Receive a Bachelor of Science in Accounting from the University of Missouri REASONS FOR NOMINATION: Mr. DeVeydt’s positions as chief executive officer and chief financial officer at public companies in regulated industries and as a partner at PricewaterhouseCoopers LLP provide him with strong financial acumen along with a deep understanding of regulated industry operations and extensive leadership skills, particularly in the areas of accounting and finance. His significant experience in internal controls, capital markets, corporate governance, risk management and strategic planning from both a managed care public company and public accounting perspective make him an asset to the Board. CURRENT DIRECTORSHIPS: •Surgery Partners, Inc. •Zelis Healthcare PRIOR DIRECTORSHIPS: •NiSource, Inc. •Grupo Notre Dame Intermedica •Myovant Sciences Ltd. QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Public Company Board and Governance |
Proposal 1 – Election of Directors | 31 |
AGE:64 DIRECTOR SINCE: April 2006 RACE/ETHNICITY AND GENDER: White Male COMMITTEES: •Governance •Value Creation | |||||||||||||||||||||||
Frederick H. Eppinger Director, President and Chief Executive Officer of Stewart Information Services Company | |||||||||||||||||||||||
EXPERIENCE: •Chief Executive Officer since 2019 and a Director since 2016 of Stewart Information Services Company •Director, President and Chief Executive Officer of The Hanover Insurance Group, Inc. (insurance and financial services industries) from 2003 to 2016 •Senior Partner at McKinsey & Co. from 1985 to 2000 •Served as a director of QBE Insurance Group Limited •Received a Bachelor of Arts from the College of the Holy Cross and a Master of Business Administration from the Tuck School of Business Administration at Dartmouth College REASONS FOR NOMINATION: Mr. Eppinger has more than 30 years of experience in the insurance industry. As Chief Executive Officer of Hanover Insurance, Mr. Eppinger led the company’s growth from its regional status to a global property/casualty carrier. Mr. Eppinger’s range of experience includes, in particular, experience as a chief executive officer, community involvement, as well as organizational development and insurance industry expertise. CURRENT DIRECTORSHIPS: •Stewart Information Services Company QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Public Company Board and Governance |
32 | Centene Corporation |
AGE: 63 DIRECTOR SINCE: November 2022 RACE/ETHNICITY AND GENDER: African-American Male COMMITTEES: •Compensation and Talent •Value Creation | |||||||||||||||||||||||
Monte E. Ford Principal Partner, Chief Information Officer Strategy Exchange | |||||||||||||||||||||||
EXPERIENCE: •Principal Partner for Chief Information Officer Strategy Exchange, which is a leading cross-industry consortium of Chief Information Officers from many of the world’s largest companies, since 2015 •Chief Executive Officer of Aptean, Inc., a software solutions provider, from 2012 to 2013 •Chief Information Officer of American Airlines, Inc. from 2000 to 2012 •Served as the Chief Information Officer for Associates First Capital, a financial services company •Received a Bachelor of Science from Northeastern University REASONS FOR NOMINATION: Mr. Ford’s positions as chief executive officer and chief information officer at public companies in regulated industries provide him with a deep understanding of regulated industry operations and extensive leadership skills, particularly in various areas of technology. His significant experience in leadership, corporate governance, technology, risk management and strategic planning, consumer and retail industries make him an asset to the Board. CURRENT DIRECTORSHIPS: •JetBlue Airways Corporation •Iron Mountain Inc. •Akamai Technologies, Inc. PRIOR DIRECTORSHIPS: •Health Care Service Corporation (HCSC) •MoneyGram International, Inc. QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Healthcare and Insurance | ESG and Community Involvement | |||||||||||||||||||||
Technology | Public Company Board and Governance |
Proposal 1 – Election of Directors | 33 |
AGE: 42 DIRECTOR SINCE: September 2021 RACE/ETHNICITY AND GENDER: White Female COMMITTEES: •Value Creation | |||||||||||||||||||||||
Sarah M. London Chief Executive Officer of Centene Corporation | |||||||||||||||||||||||
EXPERIENCE: •Joined the Company in September 2020 •Chief Executive Officer of the Company since March 2022 •Prior to being appointed CEO in March 2022, served as the Company's Vice Chairman since September 2021 •Served as the Company’s President, Health Care Enterprises and Executive Vice President, Advanced Technology from March 2021 to September 2021 •Served as the Company’s Senior Vice President, Technology and Modernization from September 2020 to March 2021 •Served as both Senior Principal and Partner for Optum Ventures from May 2018 to March 2020 and Chief Product Officer of Optum from March 2016 to May 2018 •Vice President, Client Management and Operations for Humedica from March 2014 to March 2016 •Received a Bachelor of Arts from Harvard College and a Master of Business Administration from the University of Chicago Booth School of Business REASONS FOR NOMINATION: As Centene’s Chief Executive Officer, Ms. London is focused on delivering long-term value creation for our stockholders by executing on a disciplined strategy of cost savings, gross margin expansion and member experience improvement. The Board benefits from her management perspective in evaluating strategic decisions facing the Company. QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Technology | Public Company Board and Governance |
34 | Centene Corporation |
AGE: 64 DIRECTOR SINCE: October 2019 RACE/ETHNICITY AND GENDER: White Female COMMITTEES: •Compensation and Talent •Governance | |||||||||||||||||||||||
Lori J. Robinson Retired United States Air Force General | |||||||||||||||||||||||
EXPERIENCE: •Served in the Air Force until her retirement in July 2018 following a 36-year military career, including Commander of North American Aerospace Defense Command and U.S. Northern Command from 2016 to 2018 •Commander, Pacific Air Forces and Air Component Commander for U.S. Pacific Command, from 2014 to 2016, and as Vice Commander, Air Combat Command, from 2013 to 2014 •Her international experience includes supporting the U.S. Indo-Pacific Command’s objectives and defending and promoting U.S. interests in the Pacific and Asia •A Four Star General and was the first female Combatant Commander for the United States •Named to Time magazine’s list of 100 most influential people in 2016 •Received a Bachelor of Arts from the University of New Hampshire, Master of Arts in Education Leadership and Management from Troy State University and a Master in National Security and Strategic Studies from Naval War College REASONS FOR NOMINATION: General Robinson brings significant leadership, strategy oversight and execution, crisis management and international experience and expertise, having served as the former Commander, U.S. Northern Command and North American Aerospace Defense Command, Department of the Air Force (Ret.). CURRENT DIRECTORSHIPS: •Korn Ferry •NACCO Industries, Inc. QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | ESG and Community Involvement | Public Company Board and Governance |
Proposal 1 – Election of Directors | 35 |
AGE: 68 DIRECTOR SINCE: January 2022 RACE/ETHNICITY AND GENDER: White Male COMMITTEES: •Compensation and Talent •Value Creation | |||||||||||||||||||||||
Theodore R. Samuels Former President, Capital Guardian Trust Company | |||||||||||||||||||||||
EXPERIENCE: •Has over 35 years of experience in the financial industry and brings to our Board extensive business and operational expertise, particularly with respect to economics, capital markets and investment decision making •Former President of Capital Guardian Trust Company and a former global equity portfolio manager at Capital Group, one of the most prominent investment management organizations in the world •While at Capital Group he served on numerous management and investment committees, with an eye towards long-term shareholder value creation •Received a Bachelor of Arts from Harvard College and a Master of Business Administration from Harvard Business School REASONS FOR NOMINATION: Mr. Samuels’ range of experience includes, in particular, public company governance, community involvement, investment management, value creation, and capital markets. His institutional investment experience and understanding of stockholder value creation make him an asset to the Board. CURRENT DIRECTORSHIPS: •Bristol Myers Squibb •Perrigo Company, plc. PRIOR DIRECTORSHIPS: •Stamps.com QUALIFICATIONS AND EXPERIENCE: | |||||||||||||||||||||||
Leadership | Finance and Accounting | Healthcare and Insurance | |||||||||||||||||||||
ESG and Community Involvement | Public Company Board and Governance |
36 | Centene Corporation |
Proposal 1 – Election of Directors | 37 |
38 | Centene Corporation |
Annual Election of Directors. We have an unclassified Board. All directors are elected annually for one-year terms | |||||
Majority Voting Uncontested Director Elections.Any director nominee must resign if they do not receive an affirmative vote of a majority of votes cast in an uncontested election. The Board will then determine whether to accept the resignation and disclose any decision not to accept the resignation | |||||
Removal Rights. Stockholders can remove directors with or without cause | |||||
Proxy Access. Up to 20 stockholders owning at least 3% of shares continuously for three years may nominate up to the greater of two individuals or 20% of our Board | |||||
Special Meeting | |||||
Action by Written Consent | |||||
No Stockholder Rights Plan.We do not have a stockholder rights plan, commonly referred to as a “poison pill“ | |||||
No Supermajority Vote Provisions. We do not have any supermajority vote provisions in our Articles of Incorporation or By-laws | |||||
No Cumulative Voting.We have a single class of shares with equal voting rights |
Corporate Governance | 39 |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Board Refreshment | Long-tenured Lead Independent Director | Appointed James Dallas as new Lead Independent Director in January 2022 | ||||||||||||||||||||||||
Separate CEO and Chairman roles | Separated CEO and Chairman roles in April 2022 | |||||||||||||||||||||||||
Refresh Board | Appointed Kenneth Burdick, Christopher Coughlin, Wayne DeVeydt and Theodore Samuels in January 2022 | |||||||||||||||||||||||||
Appointed Monte Ford in November 2022 | ||||||||||||||||||||||||||
Average age of Board members reduced to 62 | ||||||||||||||||||||||||||
Average tenure of Board members reduced to 3.6 years | ||||||||||||||||||||||||||
Adopt retirement policy | Adopted mandatory retirement policy at age 75 | |||||||||||||||||||||||||
Enhance Stockholder Rights | Declassify Board of Directors | Declassified Board of Directors; all directors to stand for election annually beginning in 2023 | ||||||||||||||||||||||||
Stockholder special meeting rights | Amended Certificate of Incorporation and By-laws to provide stockholders with 10% ownership the right to call a special meeting | |||||||||||||||||||||||||
Stockholder written consent rights | Amended Certificate of Incorporation and By-laws to provide stockholders the right to act by written consent | |||||||||||||||||||||||||
Improve stockholder proxy access rights | Amended By-laws to shorten the proxy access ownership rights to 3 years | |||||||||||||||||||||||||
Amended By-laws to shorten the advance notice window to 90 – 120 days | ||||||||||||||||||||||||||
Modernize Board Committees | Rotate membership of committees | Committee membership refreshed in January 2022 and in August 2022 | ||||||||||||||||||||||||
Refresh chairs of committees | All committees have refreshed their chairs since November 2021 | |||||||||||||||||||||||||
Reduce the number of committees | Number of committees reduced from 7 to 4 in August 2022 | |||||||||||||||||||||||||
Clarify roles of committees | Committee charters revised with responsibilities realigned in August 2022 | |||||||||||||||||||||||||
40 | Centene Corporation |
Commitment to Board Refreshment. 80% of our directors have joined the Board in the last 3.5 years and have expanded the Board’s scope of experience | |||||
Independent Board:80% of the Director Nominees are independent | |||||
Separate Chair of the Board and Chief Executive Officer. The Board has chosen to separate the roles of Chief Executive Officer and Chairman of the Board | |||||
Independent Board Leadership. Our Chairman of the Board is a non-executive, independent director. | |||||
Independent Board Committees.Each of the Audit and Compliance Committee, Compensation and Talent Committee, and Governance Committee is comprised entirely of independent directors | |||||
“Rooney Rule” for Board Recruitment.The Board requires that women and minorities be included in the initial pool of candidates when selecting new director nominees | |||||
Committee Charters. Each standing committee operates under a written charter that has been approved by the Board and is reviewed annually | |||||
Executive Sessions.Independent directors meet regularly without management and non-management directors | |||||
Mandatory Retirement Age.Mandatory retirement age of 75 provides regular opportunities for Board refreshment | |||||
Limits on Public Company Directorships. To ensure directors are able to devote sufficient time and attention to their responsibilities as board members, directors may not serve on more than three boards of other public companies | |||||
Continuing Education for Directors.The Board is regularly updated on the Company’s businesses, strategies, customers, operations and employee matters, as well as external trends and issues that affect the Company. Directors also are encouraged to attend continuing education courses relevant to their service on our Board | |||||
Board and Committee Self-Evaluation Process.Our Board and committees conduct annual performance self-evaluations led by the chair of the Governance Committee, including one-on-one interviews | |||||
Political Contributions Disclosures.We publicly disclose our political contributions and public advocacy efforts and the | |||||
Strong Codes of Ethics. Centene is |
Corporate Governance | 41 |
Ownership Threshold | at least 3% of the | ||||
Group Ownership | a group of 20 or less holders | ||||
Ownership Period | at least 3 years of continuous ownership | ||||
Number of Nominees | the |
42 | Centene Corporation |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Modernize Board Committees | Rotate membership of committees | Committee membership refreshed in January 2022 and in August 2022 | ||||||||||||||||||||||||
Refresh chairs of committees | All committees have refreshed their chairs since November 2021 | |||||||||||||||||||||||||
Reduce the number of committees | Number of committees reduced from 7 to 4 in August 2022 | |||||||||||||||||||||||||
Clarify roles of committees | Committee charters revised with responsibilities realigned in August 2022 | |||||||||||||||||||||||||
Corporate Governance | 43 |
Current Directors | Audit and Compliance Committee | Compensation and Talent Committee | Governance Committee | Value Creation Committee | ||||||||||
Orlando Ayala | ||||||||||||||
Jessica L. Blume | ||||||||||||||
Kenneth A. Burdick | ||||||||||||||
Christopher J. Coughlin | ||||||||||||||
H. James Dallas | ||||||||||||||
Wayne S. DeVeydt | ||||||||||||||
Frederick H. Eppinger | ||||||||||||||
Monte E. Ford | ||||||||||||||
Richard A. Gephardt | ||||||||||||||
Sarah M. London | ||||||||||||||
Lori J. Robinson | ||||||||||||||
Theodore R. Samuels | ||||||||||||||
William L. Trubeck | ||||||||||||||
Number of Meetings Held in 2022 | 11 | 11 | 23 | 2 |
Chair | Member |
44 | Centene Corporation |
Audit and Compliance Committee | RESPONSIBILITIES: •Appoints, evaluates, oversees the work and compensation of, and removal of, the | |||||||
the engagement of the Independent Auditors and all audit and permissible non-audit services to be provided by the Independent Auditors. •Oversees policies with respect to risk assessment and risk management, oversees the Company’s financial risks and discusses with management the Company’s enterprise risk management program. •Reviews with the Independent Auditors and management both management’s assessment and the Independent Auditors’ annual report on the effectiveness of the Company’s internal controls and reviews with management the adequacy and effectiveness of the Company’s internal controls, financial controls, and disclosure controls and procedures, including with regard to ESG. •Reviews with management and, if appropriate, the Independent Auditors, the Company’s annual and quarterly financial statements, earnings press releases and significant accounting policies regarding financial information and earnings guidance provided to analysts and rating agencies. •Reviews litigation and other legal or regulatory matters that may have a material impact on the Company’s financial statements. •Reviews the Company’s information technology security program and reviews and discusses the controls around cybersecurity, including the Company’s business continuity and disaster recovery plans. •Establishes, oversees and reviews procedures related to (i) the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, auditing matters, or federal securities laws reporting and disclosure matters; and (ii) the confidential, anonymous submission of concerns regarding questionable accounting or auditing matters by employees. •Reviews capital structure, insurance programs, tax policies, and mergers and acquisitions. •Oversees the Ethics and Compliance Program, and matters related to the Company's compliance with laws and regulations. | ||||||||
MEMBERS: •William Trubeck, Chair •Orlando Ayala •Jessica Blume •Christopher •Wayne DeVeydt MEETINGS IN 2022:11 MEMBER QUALIFICATIONS: •Each member of the Audit and Compliance Committee is independent, in accordance with the NYSE standards, SEC rules and the Company’s Corporate Governance Principles •Each member of the Audit and Compliance Committee meets the financial literacy requirements of the NYSE Listed Company rules •In addition, our Board has determined that each of Messrs. Coughlin, DeVeydt, Trubeck and Ms. Blume qualifies as an “audit committee financial expert” within the meaning of SEC regulations REPORT: The Audit and Compliance Committee Report is on page 121 |
45 |
Compensation and Talent Committee | RESPONSIBILITIES: •Annually reviews and approves corporate goals and objectives relevant to our CEO’s compensation. •Reviews and makes recommendations to the Board with respect to our CEO’s compensation. •Reviews and approves the compensation of •Oversees an evaluation of our senior executives. •Oversees and administers our equity incentive plans. •Reviews and discusses with management the compensation, discussion and analysis section of the proxy statement. •Assists in the oversight of risks associated with our compensation plans and policies. •Reviews and makes recommendations to the Board with respect to director compensation. •Reviews the results of any advisory stockholder vote on executive compensation and considers whether to make or recommend adjustments to the Company’s executive compensation as a result of such vote. •Retains and terminates any compensation consultant to be used to assist the Compensation and Talent Committee in the evaluation of executive compensation. •Reviews human capital management strategies, including initiatives for talent diversity, equity and inclusion, equal employment, pay equity and corporate culture. | |||||||
MEMBERS: •Christopher Coughlin, Chair •Monte Ford •Richard Gephardt •Lori Robinson •Theodore Samuels •William Trubeck MEETINGS IN 2022: 11 MEMBER QUALIFICATIONS: Each member of the Compensation and Talent Committee is independent, in accordance with the NYSE standards and the Company’s Corporate Governance Principles REPORT: The Compensation and Talent Committee Report is on page 99 |
RESPONSIBILITIES: •Oversees the Board and each committee’s composition (including member qualifications), structure, size and succession planning. •Monitors corporate governance developments and recommends changes to our Certificate of Incorporation, By-laws and Corporate Governance Guidelines to the Board. •Reviews the Company's Environmental, Social, Health, and Governance Report. •Oversee key public policy issues relating to environmental and social responsibility, social determinants of health and healthcare reform. •Oversees the evaluation of the Board, its committees and each director. •Reviews any related party transactions. •Oversees policies by which interested parties, including stockholders, may make significant concerns known to the Board. •Oversees policies and practices regarding political and charitable activities, including any contributions therewith. •Oversees Board and management succession planning. •Oversees risks related to corporate governance and environmental and social issues and political and regulatory changes. | ||||||||
MEMBERS: •Jessica Blume, Chair •Wayne DeVeydt •Frederick Eppinger •Lori Robinson MEETINGS IN 2022:23 MEMBER QUALIFICATIONS: •Each member of the Governance Committee is independent, in accordance with the NYSE standards and the Company’s Corporate Governance Principles |
Corporate Governance | 47 |
Value Creation Committee | RESPONSIBILITIES: •Oversees the Company's long-term value creation, growth and strategic initiatives and plans. •Periodically reviews the status of the existing enterprise-level IT programs and associated budget and expenditures for the Company and its business segments, makes recommendations to the Board with respect to enterprise-level IT and cybersecurity related projects and investments that require Board approval, and oversees the Company's management of risks associated with the Company’s systems and technology, including risks related to cybersecurity and privacy, and the Company’s third-party/vendor data security strategy. •Oversees and provides guidance to management and the Board with respect to the Company’s information technology, digitization, artificial intelligence and cybersecurity programs, strategy and initiatives. •Oversees quality and member experience initiatives and plans including Star ratings strategy. | |||||||
MEMBERS: •Kenneth Burdick, Chair •James Dallas •Frederick Eppinger •Monte Ford •Sarah London •Theodore Samuels MEETINGS IN 2022:2 |
48 | Centene Corporation |
2022 Meetings | ||||||||||||||||||||
Board | 24 | 79 Board and Committee Meetings held in 20221 | ||||||||||||||||||
Audit and Compliance Committee | 11 | |||||||||||||||||||
Compensation and Talent Committee | 11 | |||||||||||||||||||
Governance Committee | 23 | |||||||||||||||||||
Value Creation Committee | 2 |
New Director Orientation | Shortly after joining the Board, the Company provides an in-person, high-touch, customizable orientation and onboarding experience. At the end of their orientation, new directors should: know key information about Centene’s business, vision, strategy, leaders, and organization; feel excited about joining the Board, welcomed and supported as a new director, and well-informed about their responsibilities and duties as directors and on any committees in which they serve; and have access to resources, information, and contacts that will enable them to be effective in their role. | ||||
Continuing Education | We joined the National Association of Corporate Directors and encourage our Board members to take advantage of its numerous educational resources and programs. The Company provides quarterly updates on continuing education opportunities and, pursuant to our director education policy, will reimburse Board members for the cost of any programs Board members attend as well as costs related to membership in relevant associations. | ||||
Beyond the Boardroom | Throughout their service, our directors have discussions with each other and senior leadership of the Company outside of regularly scheduled Board and committee meetings in order to share ideas and perspectives, build relationships, and gain a deeper understanding of the Company’s business. |
Corporate Governance | 49 |
50 | Centene Corporation |
Corporate Governance | 51 |
Full Board | •Strategic, financial and execution risks and exposures associated with the annual operating plan and long-term strategic plan •Major litigation and regulatory exposures, information security and other current matters that may present material risk to the Company’s operations, plans, prospects or reputation; and material acquisitions and divestitures | ||||
Audit and Compliance Committee | Compensation and Talent Committee | Governance Committee | Value Creation Committee | |||||||||||||||||
•Risks and exposures associated with financial matters and regulatory requirements, including financial reporting, accounting, disclosure and compliance, internal control over financial reporting, financial policies, capital structure investment guidelines, liquidity matters and the Company’s regulatory compliance programs •Legal and compliance risks •Risks associated with information technology, including cybersecurity, privacy, disaster recovery and critical infrastructure assets | •Risks and exposures associated with leadership assessment and executive and non-executive compensation programs and arrangements, including incentive plans | •Risks and exposures relating to the Company’s programs and policies relating to compliance with SEC governance requirements, NYSE listing requirements and similar legal requirements •Corporate governance and director independence •Director and chief executive officer succession planning •Risks associated with environmental and social responsibility, social determinants of health and healthcare reform related risks and opportunities •Risks associated with political and regulatory changes | •Risks and exposures associated with quality and member experience initiatives •Quality and effectiveness of the execution of the Company’s information technology initiatives and programs •Risks associated with the execution of the Company’s long-term value creation (including margin expansion), growth and strategic initiatives and plans |
52 | Centene Corporation |
Corporate Governance | 53 |
Health The health pillar is core to our strategic vision and execution. As we get the basics right and honor our commitments to healthcare quality, we will improve quality care delivery. As we look to lead the conversation on health equity and drivers of health, we will strengthen the healthcare system and in turn, outcomes for our members. And as we design solutions for the most complex members, we will deliver measurable value to the most vulnerable populations. Our efforts are focused on meeting local needs in tailored ways. |
54 | Centene Corporation |
Corporate Governance | 55 |
Social Creating positive social impact is the central theme of the topics we focus on within the social pillar. Diversity is a strategic imperative and is one way in which we embody "One CenTeam". Having both a diverse workforce and developing diverse, trusted partnerships enable us to better understand the unique needs of the communities we serve. Other focus areas within the social pillar highlight how we make lasting impacts through partnerships, investments, and employee volunteerism. |
77% | 48% | 3% | 11% | 66% | 36% | 18% | ||||||||||||||||||||||||||||||||
Women | People of Color | Veterans | Identify as Having a Disability | Supervisor+ Positions Held by Women | Supervisor+ Positions Held by People of Color | Employee Inclusion Group Participation |
56 | Centene Corporation |
65% | 39% | 23% | 7% | 6% | 5% | 3% | 1% | |||||||||||||||||||||||||||||||||||||
Caucasian | Female | African American | Veteran | Hispanic | Asian/ Indian | Disability | Native American |
Corporate Governance | 57 |
Environmental Our approach to environmental topics at Centene is one way in which we lead through innovation. We are mindful about environmental stewardship and that where and how we work impacts the environment. Our health plans maintain a local presence in our communities enabling us to be proactive where possible and quickly help our members navigate and manage weather-driven events. Analysis of our data helps us identify health issues that may be the result of environmental impacts. |
58 | Centene Corporation |
Governance Sound corporate governance, a strong culture of compliance and unwavering ethics are foundational to our ESHG strategy, enabling us to honor our commitments and make it easier to work with us. |
Corporate Governance | 59 |
Our ESHG Report to the Community details the key partnerships, initiatives, and programs that exemplify our commitment to advancing environmental resilience, serving our communities, powering better health, and living our values. Visit www.centene.com/who-we-are/corporate-facts-reports.html. | The C-index Diversity, Equity & Inclusionreport describes how we sustain and advance conscious inclusion of talent, community impact, supplier diversity, and stakeholder collaboration. Our Employer Information Report (EEO-1) is included as an appendix to the report. Visit www.centene.com/who-we-are/corporate-facts-reports.html. | ||||
Our Political Activity report sets forth details about political contributions, lobbying efforts, and membership in industry trade associations. Visit investors.centene.com. | TheTask Force on Climate-related Financial Disclosures (TCFD)index includes discussions about our governance structure, strategy, risks and opportunities, metrics, and target-setting related to managing climate change. Visit www.centene.com/who-we-are/corporate-facts-reports.html |
60 | Centene Corporation |
Corporate Governance | 61 |
September-November (Fall) •Conduct meetings with our largest stockholders, to discuss corporate governance, corporate responsibility and executive compensation matters, and solicit feedback •Share the feedback with the Board for discussion and consideration | December-February (Winter) •Incorporate feedback from stockholder meetings into annual meeting planning, including potential changes to corporate governance practices, the executive compensation program and corporate responsibility •Review stockholder proposals and determine next steps | |||||||
May-August (Summer) •Review annual meeting results, ongoing stockholder feedback and determine any next steps, including corporate governance and compensation trends to help develop stockholder engagement priorities | March-April (Spring) •Conduct Investor meetings in advance of the annual meeting to answer questions and obtain stockholder feedback on proxy matters |
62 | Centene Corporation |
Corporate Governance | 63 |
64 | Centene Corporation |
Annual Stock Award | |||||
Non-Employee Director | $200,000 | ||||
Annual Retainer | |||||
Non-Employee Director | $100,000 |
Additional Annual Stock Award | |||||
Independent Chairman/ Lead Independent Director | $150,000 | ||||
Additional Annual Retainers | |||||
Chairman of the Audit and Compliance Committee | $30,000 | ||||
Chairman of the Compensation and Talent Committee | $20,000 | ||||
Chairman of the Governance Committee | $20,000 | ||||
Chairman of the Value Creation Committee | $15,000 | ||||
Independent Chairman/ Lead Independent Director | $50,000 |
Corporate Governance | 65 |
Name 1 | Fees Earned or Paid in Cash 2 ($) | Stock Awards 3 ($) | Option Awards 4 ($) | Non-Equity Plan Incentive Compensation 5 ($) | All Other Compensation 6 ($) | Total ($) | ||||||||||||||||||||||||||||||||
Orlando Ayala | $ | 109,742 | $ | 197,130 | $ | — | — | $ | 22,532 | $ | 329,404 | |||||||||||||||||||||||||||
Jessica L. Blume | 120,000 | 197,130 | — | — | 27,532 | 344,662 | ||||||||||||||||||||||||||||||||
Kenneth A. Burdick | — | 416,015 | 273,701 | 716,800 | 378,005 | 1,784,521 | ||||||||||||||||||||||||||||||||
Christopher J. Coughlin | — | 430,757 | 273,701 | — | 26,727 | 731,185 | ||||||||||||||||||||||||||||||||
H. James Dallas | 59,742 | 347,130 | — | — | 31,017 | 437,889 | ||||||||||||||||||||||||||||||||
Wayne S. DeVeydt | — | 410,757 | 273,701 | — | 29,679 | 714,137 | ||||||||||||||||||||||||||||||||
Robert K. Ditmore | 2,014 | — | — | — | — | 2,014 | ||||||||||||||||||||||||||||||||
Frederick H. Eppinger | — | 331,872 | — | — | 27,532 | 359,404 | ||||||||||||||||||||||||||||||||
Monte E. Ford | — | 119,481 | 332,998 | — | 15,000 | 467,479 | ||||||||||||||||||||||||||||||||
Richard A. Gephardt | 109,742 | 197,130 | — | — | 27,532 | 334,404 | ||||||||||||||||||||||||||||||||
Leslie V. Norwalk | — | 123,654 | 273,701 | — | — | 397,355 | ||||||||||||||||||||||||||||||||
John R. Roberts | 2,153 | — | — | — | — | 2,153 | ||||||||||||||||||||||||||||||||
Lori J. Robinson | 100,000 | 197,130 | — | — | — | 297,130 | ||||||||||||||||||||||||||||||||
Theodore R. Samuels | — | 410,757 | 273,701 | — | 26,727 | 711,185 | ||||||||||||||||||||||||||||||||
Tommy G. Thompson | 1,736 | — | — | — | 27,532 | 29,268 | ||||||||||||||||||||||||||||||||
William L. Trubeck | — | 352,130 | — | — | 26,887 | 379,017 |
66 | Centene Corporation |
Grant Date Fair Value of Awards | ||||||||||||||||||||||||||||||||
Name | Initial Restricted Stock Unit Award a ($) | Annual Restricted Stock Unit Award b ($) | Chairman Restricted Stock Unit Award ($) | Cash Compensation Converted into Restricted Stock Unit Awards c ($) | Total Stock Awards ($) | |||||||||||||||||||||||||||
Orlando Ayala | $ | — | $ | 197,130 | $ | — | $ | — | $ | 197,130 | ||||||||||||||||||||||
Jessica L. Blume | — | 197,130 | — | — | 197,130 | |||||||||||||||||||||||||||
Kenneth A. Burdick | 88,627 | 197,130 | 5,258 | 125,000 | 416,015 | |||||||||||||||||||||||||||
Christopher J. Coughlin | 88,627 | 197,130 | 20,000 | 125,000 | 430,757 | |||||||||||||||||||||||||||
H. James Dallas | — | 197,130 | — | 150,000 | 347,130 | |||||||||||||||||||||||||||
Wayne S. DeVeydt | 88,627 | 197,130 | — | 125,000 | 410,757 | |||||||||||||||||||||||||||
Frederick H. Eppinger | — | 197,130 | 9,742 | 125,000 | 331,872 | |||||||||||||||||||||||||||
Monte E. Ford | 102,837 | — | — | 16,644 | 119,481 | |||||||||||||||||||||||||||
Richard A. Gephardt | — | 197,130 | — | — | 197,130 | |||||||||||||||||||||||||||
Leslie V. Norwalk | 88,627 | — | — | 35,027 | 123,654 | |||||||||||||||||||||||||||
Lori J. Robinson | — | 197,130 | — | — | 197,130 | |||||||||||||||||||||||||||
Theodore R. Samuels | 88,627 | 197,130 | — | 125,000 | 410,757 | |||||||||||||||||||||||||||
William L. Trubeck | — | 197,130 | 30,000 | 125,000 | 352,130 |
Corporate Governance | 67 |
Name | Group Excess Liability Insurance Policy Premiums ($) | Company Match of Charitable Contributions ($) | Personal Use of Company Aircraft ($) | Consulting Fees ($) | Total ($) | ||||||||||||
Orlando Ayala | $ | 2,532 | $ | 20,000 | $ | — | $ | — | $ | 22,532 | |||||||
Jessica L. Blume | 2,532 | 25,000 | — | — | 27,532 | ||||||||||||
Kenneth A. Burdicka | 1,727 | 25,000 | 1,278 | 350,000 | 378,005 | ||||||||||||
Christopher J. Coughlin | 1,727 | 25,000 | — | — | 26,727 | ||||||||||||
H. James Dallas | 1,887 | 25,000 | 4,130 | — | 31,017 | ||||||||||||
Wayne S. DeVeydt | 1,727 | 25,000 | 2,952 | — | 29,679 | ||||||||||||
Frederick H. Eppinger | 2,532 | 25,000 | — | — | 27,532 | ||||||||||||
Monte E. Ford | — | 15,000 | — | — | 15,000 | ||||||||||||
Richard A. Gephardt | 2,532 | 25,000 | — | — | 27,532 | ||||||||||||
Theodore R. Samuels | 1,727 | 25,000 | — | — | 26,727 | ||||||||||||
Tommy G. Thompson | 2,532 | 25,000 | — | — | 27,532 | ||||||||||||
William L. Trubeck | 1,887 | 25,000 | — | — | 26,887 | ||||||||||||
Option Awards | Stock Awards | |||||||||||||
Name | Number of Securities Underlying Unexercised Options (Exercisable) | Number of Securities Underlying Unexercised Options (Unexercisable) | Number of Shares or Units of Stock That Have Not Vested | |||||||||||
Orlando Ayala | – | – | 2,323 | |||||||||||
Jessica L. Blume | 20,000 | – | 2,323 | |||||||||||
Kenneth A. Burdick | – | 10,000 | 2,323 | |||||||||||
Christopher J. Coughlin | – | 10,000 | 2,323 | |||||||||||
H. James Dallas | 6,666 | 3,334 | 2,323 | |||||||||||
Wayne S. DeVeydt | – | 10,000 | 2,323 | |||||||||||
Frederick H. Eppinger | – | – | 2,323 | |||||||||||
Monte E. Ford | – | 10,000 | 1,189 | |||||||||||
Richard A. Gephardt | – | – | 2,323 | |||||||||||
Lori J. Robinson | 10,000 | – | 2,323 | |||||||||||
Theodore R. Samuels | – | 10,000 | 2,323 | |||||||||||
William Trubeck | 6,666 | 3,334 | 2,323 |
68 | Centene Corporation |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 69 |
2 PROPOSAL | Advisory Resolution to Approve Executive Compensation | ||||
The Board recommends a vote “FOR” the approval of the compensation of the NEOs. | |||||
70 | Centene Corporation |
Christopher J. Coughlin Chair |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 71 |
Name | Position | ||||
Sarah M. London | Chief Executive Officer | ||||
Andrew L. Asher | Executive Vice President, Chief Financial Officer | ||||
Kenneth J. Fasola | President | ||||
James E. Murray | Executive Vice President, Chief Operating Officer | ||||
Christopher A. Koster | Executive Vice President, Secretary and General Counsel |
72 | Centene Corporation |
Category | 2021 | 2022 | 2023 | |||||||||||||||||||||||
Granted in Dec. 2020 | Granted in Dec. 2021 | Granted in Mar. 2023 | ||||||||||||||||||||||||
Annual Incentive Plan Metrics & Weighting | Adjusted Diluted EPS | 35% | Adjusted Diluted EPS | 50% | Adjusted Diluted EPS | 65% | ||||||||||||||||||||
Business Unit & Individual Goals | 50% | Business Unit & Individual Goals | 40% | Business Unit & Individual Goals | 25% | |||||||||||||||||||||
SG&A Expense Management | 15% | Quality | 10% | Quality | 10% | |||||||||||||||||||||
•Reduced Individual weighting •Increased Adjusted Diluted EPS Weighting •Added Quality Metric | •Reduced Individual weighting •Increased Adjusted Diluted EPS Weighting | |||||||||||||||||||||||||
PSUs | Adjusted Pre-Tax Margin | 60% | Adjusted Diluted EPS | 70% | Adjusted Pre-Tax Earnings Growth CAGR | 34% | ||||||||||||||||||||
Revenue Growth CAGR | 40% | Adjusted Net Earnings Margin | 30% | Adjusted Net Earnings Margin | 33% | |||||||||||||||||||||
Relative TSR | 33% | |||||||||||||||||||||||||
•Added rTSR with target > median •Eliminated duplicative Adjusted Diluted EPS measure | ||||||||||||||||||||||||||
Stock Options | Granted to CEO without a stock appreciation condition | Granted in Dec. 2021 with a stock appreciation condition No Stock Options Granted in 2022 | Eliminated Stock Options | |||||||||||||||||||||||
Cash LTIP | Adjusted Pre-Tax Margin | 30% | Adjusted Diluted EPS | 35% | Eliminated Cash LTIP | |||||||||||||||||||||
Revenue Growth CAGR | 20% | Adjusted Net Earnings Margin | 15% | |||||||||||||||||||||||
Relative TSR | 50% | Relative TSR | 50% | |||||||||||||||||||||||
Other | •New CEO compensation set slightly below the median •New policy limits cash severance to 2.99x base + bonus |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 73 |
>$200M Cost Savings By 70% decrease in domestic footprint | $3B Common Stock Repurchases | >$800M Debt Reduction | ||||||||||||
74 | Centene Corporation |
Category | What We Heard | What We Changed | ||||||||||||||||||||||||
Executive Compensation | Align CEO compensation with peers | New CEO compensation set slightly below the median in April 2022 | ||||||||||||||||||||||||
Align NEO compensation with peers | Offers for new hires made with the goal of being at the 50th percentile | |||||||||||||||||||||||||
Annual Incentive Plan should have clearer performance targets | Increased Adjusted Diluted EPS to 50% of the performance criteria in 2022 and | |||||||||||||||||||||||||
Weighting of business unit and individual goals have been decreased to 40% in 2022 and 25% in 2023; business unit goals are measurable against key financial and operational priorities | ||||||||||||||||||||||||||
Quality metrics represent 10% of the | ||||||||||||||||||||||||||
Long-Term Incentive Compensation Program should have fewer components | 2023-2025 Plan no longer includes performance-based stock options | |||||||||||||||||||||||||
2023-2025 Plan no longer includes Cash LTIP | ||||||||||||||||||||||||||
Long-Term Incentive Compensation Program should have targets different from Annual Incentive Plan | 2023-2025 Plan metrics are all different from the Annual Incentive Plan targets | |||||||||||||||||||||||||
Long-Term Incentive Plan should use relative Total Shareholder Return (TSR) as a performance metric | 2023-2025 Plan includes 33% of PSUs tied to relative TSR performance metric | |||||||||||||||||||||||||
Performance against targets should be disclosed more clearly | Performance against targets is described in the 2022 Executive Compensation Program section under Compensation Discussion and Analysis | |||||||||||||||||||||||||
Limit severance payments | Limited Michael Neidorff’s death benefits to those required by his pre-existing employment agreement | |||||||||||||||||||||||||
Adopted cash severance policy to limit cash severance to 2.99 times annual salary and bonus | ||||||||||||||||||||||||||
Review relationship with compensation consultant | Appointed Frederic W. Cook & Co., Inc. (FW Cook) as new compensation consultant in 2022 | |||||||||||||||||||||||||
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 75 |
76 | Centene Corporation |
2022 Pay Elements | Award Type | Mix | Purpose | |||||||||||||||||||||||||||||
Base Salary | Cash | 14% | To recognize individual contribution, time in role, scope of responsibility, leadership skills and experience. | |||||||||||||||||||||||||||||
Annual Cash Incentive Plan | Cash | 17% | To reward executives for performance on key operational and financial measures, with emphasis on individual contribution. | |||||||||||||||||||||||||||||
Long-Term Incentive Awards | Performance-based Restricted Stock Units (PSUs) | Equity | 69% | To retain and motivate executives to drive long-term stockholder value and align their actions to drive successful business outcomes. The performance-based stock options and cash long-term incentives were awarded in 2021 for many of our NEOs (prior to the Board and committee refreshment in 2022). Beginning in 2023, we will grant annual awards in March and eliminate performance based-stock options or cash long-term incentives. | ||||||||||||||||||||||||||||
Service-based Restricted Stock Units (RSUs) | Equity | |||||||||||||||||||||||||||||||
Performance-based Stock Options | Equity | |||||||||||||||||||||||||||||||
Cash Long-term Incentive | Cash |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 77 |
Base Salary | |||||
Annual Incentives | |||||
Long-Term Incentives |
Performance Measure | |||||
g | Adjusted Diluted EPS Target | ||||
g | Quality, Member, and Provider Satisfaction | ||||
Business Unit Goals / Individual Performance Objectives |
78 | Centene Corporation |
Performance-based RSUs and Options1 | |||||
Service-based RSUs |
Adjusted Diluted EPS | |||||
Adjusted Net Earnings Margin |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 79 |
90% Performance-based CEO pay | ||||||||||||||
Base Salary | Annual Incentive | Long-Term Incentive |
Base Pay | Cash Awards Under Our Annual Incentive Plan | Long-Term Incentives •Performance-Based RSUs •Time-Based RSUs •Performance-Based Stock Options •Cash LTIP |
80 | Centene Corporation |
Former CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
Current CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
TSR |
Former CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
Current CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
Revenues, $ in billions |
Former CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
Current CEO Total Compensation (excluding All Other Compensation), $ in millions | |||||
Diluted EPS | |||||
Adjusted Diluted EPS |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 81 |
Management reviews the Company's compensation plan design and the Company's results against established metrics. | The CEO evaluates the other NEOs' contributions to those results and recommends compensation to the Compensation Committee. | The Compensation Committee evaluates the Company, CEO, and other NEOs' performance against metrics. | FW Cook advises management and the Compensation Committee on the appropriateness of compensation and plan design based on market comparison. | The Board of Directors determines the CEO compensation and the Compensation Committee determines and approves other NEOs' compensation and the overall compensation plan design. |
Based on further review by Exequity, the following companies were included in the Company’s Healthcare Industry (HCI) Peer Group for use in determining compensation for NEOs in 2022, which was consistent with the peer group used for 2021: | ||||||||||||||
Managed Health Care (Direct Competitors) | Healthcare Distributors | Healthcare Services •CVS Health Corporation | ||||||||||||
•Cigna Corporation •Elevance Health, Inc. •Humana, Inc. | •Molina Healthcare, Inc. •UnitedHealth Group, Inc. | •AmerisourceBergen Corporation •Cardinal Health, Inc. •McKesson Corporation | ||||||||||||
Healthcare Facilities •HCA Healthcare, Inc. | ||||||||||||||
82 | Centene Corporation |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 83 |
Metric Criteria | |||||||||||
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Adjusted Diluted EPS | $5.15 | $5.40 | $5.80 |
84 | Centene Corporation |
Metric | Weight | ||||
Adjusted Diluted EPS | 50% | ||||
Business Unit & Individual Goals | 40% | ||||
Quality, member, and provider satisfaction | 10% | ||||
100% |
Achievement of Adjusted Diluted EPS Objective The Company’s 2022 Adjusted Diluted EPS was determined. | ||||||||
02 | Evaluation of Quality, Member and Provider Satisfaction The Compensation Committee assessed the Company’s achievement of quality, member, and provider satisfaction against the Company’s annual business plan using key metrics such as Centers for Medicare & Medicaid Services (CMS) Medicare Star ratings and Medicaid Healthcare Effectiveness Data and Information Set (HEDIS) measures. The Medicare Star ratings evaluated for the 2022 bonus are the result of efforts performed in 2022, impacting the 2025 revenue year. | |||||||
03 | Evaluation of Business Unit Performance The Compensation Committee assessed the Company’s achievement of certain financial and operational business unit performance goals, including: | |||||||
•Achievement of value creation milestones, including selling, general and administrative (SG&A) activities, pharmacy benefits manager (PBM) RFP process, and strategic capital deployment; •Portfolio review execution, including divestitures and asset repositioning; and •Profitable growth, including marketplace margin improvement & Medicaid RFP performance. | ||||||||
The Compensation Committee considered these additional aggregate business unit metrics: | ||||||||
•Adjusted pre-tax margin •Health benefits ratio (HBR) •Adjusted SG&A ratio | •Employee engagement •Compliance | |||||||
04 | Evaluation of Individual Performance Based on input from management, the Compensation Committee assessed each NEO’s individual performance against pre-determined goals and overall determined that goals of the NEOs were met at target. |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 85 |
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
2022 | |||||||||||
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Quality | |||||||||||
86 | Centene Corporation |
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Value Creation Milestones | |||||||||||
Portfolio Review Execution | |||||||||||
PBM RFP |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 87 |
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Profitable Growth Success | |||||||||||
California RFP results |
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Pre-Tax Margin (As adjusted)1 | |||||||||||
HBR | |||||||||||
Adjusted SG&A Ratio | |||||||||||
Employee Engagement | |||||||||||
Compliance | •New Compliance leader; meaningful progress on Compliance discipline •Specific Compliance metrics not applicable evenly to all NEOs |
88 | Centene Corporation |
Name | Individual Performance | 2022 Annual Cash Incentive Paid ($) | % of Target Paid | ||||||||
Sarah M. London | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Signed six divestitures in 2022 (all completed to date) for $3.7B in purchase price, committing on promises made to investors •Launched the strategic planning process, engaging cross-functional leaders to establish Centene’s first long-term strategic plan as presented at December Investor Day •Executed meaningful organizational redesign, which included the following key leadership changes: Ken Fasola (President), Brent Layton (Advisor to the CEO), Jim Murray (Chief Operating Officer), Dave Thomas (CEO of Markets & Medicaid) •Successfully hired and onboarded a new Chief Information Officer and Chief Medical Officer •Improved expected quality results, achieving 136% of quality targets for 2022 service dates •Thoughtfully unwound financial commitments that did not serve the long-term health of the organization | $3,683,466 | 180% | ||||||||
Andrew L. Asher | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Signed six divestitures in 2022 (all completed to date) for $3.7B in purchase price, committing on promises made to investors •Bought back $3.0B in shares or >5% of the Company's common stock •Decreased debt on the balance sheet by over $800M, reducing leverage from 3.5x to 3.0x Debt/Adjusted EBITDA •Exited 70% of the Company's lease space resulting in future annual savings of >$200M •Led negotiations for the Centene PBM RFP value creation initiative for a 2024, exceeding expected targeted savings goals •Achieved Investment Grade status for CNC due to Fitch Upgrade in 2022 | $2,303,777 | 183% |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 89 |
Name | Individual Performance | 2022 Annual Cash Incentive Paid ($) | % of Target Paid | ||||||||
Kenneth J. Fasola | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Instrumental in the successful and timely divestitures of Magellan Rx, Magellan Specialty Health, and HealthSmart •Oversaw the successful Centene Pharmacy PBM RFP value creation initiative for a 2024, exceeding expected targeted savings goals •Envolve Benefit Options, Centene Pharmacy Services, and Medicare PDP all exceeded performance targets for 2022 •Successfully transitioned Envolve Pharmacy Solutions to corporate shared service function, a value creation milestone •Successfully developed, staffed and deployed President organizational construct | $1,745,658 | 175% | ||||||||
James E. Murray | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Instrumental in executing on value creation milestones, expanded the value creation pipeline by $300M •Successfully completed first wave of operating model enhancements and centralization in Utilization Management, Call Centers, and Pharmacy, while maintaining service and employee engagement levels •Achieved Network HBR savings in 2022, a portion of which is estimated for value-based care specific initiatives | $1,266,803 | 175% | ||||||||
Christopher A. Koster | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Successfully managed complex litigation portfolio with meaningful reduction in costs •Provided in-house legal support to health plan subsidiaries, products and specialty companies across the enterprise, including support for value creation initiatives and multiple divestitures •Supported Board of Directors throughout 2022 as Secretary; implemented multiple governance enhancements, including onboarding a refreshed Board of Directors, modernizing committee structure and enhancing stockholder rights •Enhanced compliance function by hiring and onboarding a new Chief Ethics & Compliance Officer | $1,307,452 | 175% |
90 | Centene Corporation |
Name | Individual Performance | 2022 Annual Cash Incentive Paid ($) | % of Target Paid | ||||||||
Brent D. Layton | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Successful re-procurement and contract extensions (Iowa, Louisiana, Mississippi, Missouri, Nebraska, Nevada, Texas (Foster Care), and Washington), partially offset by lost market share in California •Won and launched Delaware (Centene's 30th Medicaid state) in less than six months •Positioned Ambetter Health as best in industry to seize major market exits effective January 1, 2024 •Reduction in Commercial HBR of 550 basis points in 2022 | $2,722,500 | 165% | ||||||||
David P. Thomas | •Delivered $5.78 Adjusted Diluted EPS versus original guidance of $5.40 (7% increase), total revenues of $144.5B versus original guidance of $136.9 billion (6% increase), and HBR of 87.7% versus original guidance of 87.9% •Achieved or exceeded 2022 membership targets for Medicaid, Medicare, and Marketplace products •Achieved or exceeded 2022 revenue and HBR targets across our health plan portfolio •Successful re-procurement and contract extensions (Iowa, Louisiana, Mississippi, Missouri, Nebraska, Nevada, Texas (Foster Care), and Washington), partially offset by lost market share in California •Won and launched Delaware (Centene's 30th Medicaid state) in less than six months •Organizational optimization of regional structure •Positioned Ambetter Health as best in industry to seize major market exits effective January 1, 2024 •Reduction in Commercial HBR of 550 basis points in 2022 | $1,650,150 | 171% |
NEO | EPS | Quality | Business Unit/Individual Goals | Weighted Payout | ||||||||||
Sarah M. London | 190% | 136% | 177% | 180% | ||||||||||
Andrew L. Asher | 190% | 136% | 185% | 183% | ||||||||||
Kenneth J. Fasola | 190% | 136% | 165% | 175% | ||||||||||
James E. Murray | 190% | 136% | 165% | 175% | ||||||||||
Christopher A. Koster | 190% | 136% | 165% | 175% | ||||||||||
Brent D. Layton | 190% | 136% | 140% | 165% | ||||||||||
David P. Thomas | 190% | 136% | 155% | 171% |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 91 |
Threshold | Target | Maximum | Weight | Metric Payout of Target | Weighted Payout | ||||||||||||||||||
Pre-Tax Margin (As adjusted)1 | 60 | % | 82.7 | % | 49.6 | % | |||||||||||||||||
Compound Annual Revenue Growth Rate | 40 | % | 132.0 | % | 52.8 | % | |||||||||||||||||
100 | % | 102.4 | % |
92 | Centene Corporation |
Name | Target | Vested Shares | ||||||
Sarah M. London 1 | — | — | ||||||
Andrew L. Asher | 25,462 | 26,073 | ||||||
Kenneth J. Fasola 1 | — | — | ||||||
James E. Murray 1 | — | — | ||||||
Christopher A. Koster | 13,500 | 13,824 | ||||||
Michael F. Neidorff 2 | 171,083 | 175,189 | ||||||
Brent D. Layton | 30,000 | 30,720 | ||||||
David P. Thomas | 15,000 | 15,360 |
Threshold | Target | Maximum | Weight | Metric Payout of Target | Weighted Payout | ||||||||||||||||||
Pre-Tax Margin (As adjusted)1 | 30 | % | 82.7 | % | 24.8 | % | |||||||||||||||||
Compound Annual Revenue Growth Rate | 20 | % | 132.0 | % | 26.4 | % | |||||||||||||||||
HCI Peer Group Relative TSR Percentile Rank | 50 | % | — | % | — | % | |||||||||||||||||
100% | 51.2 | % |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 93 |
Name | Target ($) | Payout ($) | ||||||
Sarah M. London | $ | 700,000 | $ | 358,400 | ||||
Andrew L. Asher | 750,000 | 384,000 | ||||||
Kenneth J. Fasola 1 | — | — | ||||||
James E. Murray 1 | — | — | ||||||
Christopher A. Koster | 625,000 | 320,000 | ||||||
Brent D. Layton | 800,000 | 409,600 | ||||||
David P. Thomas | 905,000 | 463,360 |
94 | Centene Corporation |
Metric | Weight | ||||
Adjusted Diluted EPS | 65% | ||||
Business Unit & Individual Goals | 25% | ||||
Quality, member, and provider satisfaction | 10% | ||||
100% |
TARGET INCENTIVE OPPORTUNITY | PERFORMANCE |
Individual Target Award % | Adjusted Diluted EPS Performance | Business Unit & Individual Goals | Quality Objectives | Annual Cash Incentive Award | ||||||||||||||||||||||||||||||||||||||||
Range: 0% to 200% | Range: 0% to 200% | Range: 0% to 200% | (Maximum @ 200% of Target) | |||||||||||||||||||||||||||||||||||||||||
Multiplied by 65% Weight | Multiplied by 25% Weight | Multiplied by 10% Weight | ||||||||||||||||||||||||||||||||||||||||||
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 95 |
Metric Criteria | |||||||||||
Threshold | Target | Maximum | |||||||||
% of Target | 50% | 100% | 200% | ||||||||
Adjusted Diluted EPS | $5.70 | $6.32 | $7.10 |
96 | Centene Corporation |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 97 |
Minimum Ownership Requirement as a Multiple of Base Salary | |||||
Chief Executive Officer | 5x | ||||
President & Executive Vice Presidents | 2.5x | ||||
Senior Vice Presidents | 2x | ||||
Market & Specialty Company Presidents & other Corporate Executives | 1x |
Minimum Ownership Requirement as a Multiple of Base Salary | Ownership as a Multiple of 2022 Base Salary | |||||||
5x | 10.9x | |||||||
Andrew L. Asher | 2.5x | 19.2x | ||||||
Kenneth J. Fasola | 2.5x | 13.3x | ||||||
James E. Murray | 2.5x | 14.1x | ||||||
Christopher A. Koster | 2.5x | 11.2x | ||||||
Brent D. Layton | 2.5x | 34.3x | ||||||
David P. Thomas | 2.5x | 5.8x |
98 | Centene Corporation |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 99 |
100 | Centene Corporation |
Name & Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards1 ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation2 ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Sarah M. London | 2022 | $1,359,038 | — | $7,624,974 | — | $4,041,866 | $220,569 | 3 | $13,246,447 | ||||||||||||||||||||
Chief Executive Officer | 2021 | 978,462 | 300,000 | 11,605,417 | 450,004 | 1,467,693 | 425,946 | 15,227,522 | |||||||||||||||||||||
Andrew L. Asher | 2022 | 1,007,115 | — | 5,999,942 | — | 2,687,777 | 44,376 | 3 | 9,739,210 | ||||||||||||||||||||
Executive Vice President, Chief Financial Officer | 2021 | 916,298 | — | 5,809,537 | 450,004 | 916,298 | 106,901 | 8,199,038 | |||||||||||||||||||||
Kenneth J. Fasola | 2022 | 997,519 | — | 7,199,984 | — | 1,745,658 | 39,525 | 3 | 9,982,686 | ||||||||||||||||||||
President | |||||||||||||||||||||||||||||
James E. Murray | 2022 | 723,887 | — | 4,249,970 | — | 1,266,803 | 29,758 | 3 | 6,270,418 | ||||||||||||||||||||
Executive Vice President, Chief Operating Officer | |||||||||||||||||||||||||||||
Christopher A. Koster | 2022 | 747,115 | — | — | — | 1,627,452 | 47,961 | 3 | 2,422,528 | ||||||||||||||||||||
Executive Vice President, Secretary and General Counsel | 2021 | 674,039 | — | 3,949,702 | 524,987 | 797,123 | 39,981 | 5,985,832 | |||||||||||||||||||||
Michael F. Neidorff | 2022 | 546,923 | — | — | — | 1,476,692 | 5,575,898 | 3 | 7,599,513 | ||||||||||||||||||||
Former Chairman and Chief Executive Officer | 2021 | 1,800,000 | — | 12,750,020 | 2,249,984 | 3,438,000 | 399,986 | 20,637,990 | |||||||||||||||||||||
2020 | 1,800,000 | — | 14,932,500 | 2,941,500 | 4,765,500 | 517,277 | 24,956,777 | ||||||||||||||||||||||
Brent D. Layton | 2022 | 1,100,000 | — | 2,599,940 | — | 3,132,100 | 78,886 | 3 | 6,910,926 | ||||||||||||||||||||
Senior Advisor to the Chief Executive Officer and former President and Chief Operating Officer | 2021 | 1,007,212 | — | 10,605,437 | 450,004 | 1,959,618 | 83,473 | 14,105,744 | |||||||||||||||||||||
David P. Thomas | 2022 | 965,000 | — | 1,499,993 | — | 2,113,510 | 55,253 | 3 | 4,633,756 | ||||||||||||||||||||
Chief Executive Officer of Markets and Medicaid |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 101 |
Name | Relocation ($) | 401(k) Match ($) | Non-qualified Deferred Compensation Match ($) | Death Benefita ($) | Life Insurance ($) | Tax Preparation and Financial Advisor Fees ($) | Personal Aircraft Usageb ($) | Other Benefitsc ($) | Total Other Compensation ($) | ||||||||||||||||||||
Sarah M. London | $ | 18,450 | $ | 9,150 | $ | 75,652 | $ | — | $ | 25,000 | $ | 9,300 | $ | 79,710 | $ | 3,307 | $ | 220,569 | |||||||||||
Andrew L. Asher | — | 9,150 | 18,339 | — | 15,000 | — | — | 1,887 | 44,376 | ||||||||||||||||||||
Kenneth J. Fasola | — | 10,881 | 12,692 | — | 15,000 | — | — | 952 | 39,525 | ||||||||||||||||||||
James E. Murray | — | 7,244 | — | — | 15,000 | — | 5,627 | 1,887 | 29,758 | ||||||||||||||||||||
Christopher A. Koster | — | 6,667 | 15,746 | — | 15,000 | 6,250 | — | 4,298 | 47,961 | ||||||||||||||||||||
Michael F. Neidorff | — | 9,150 | 58,038 | 5,400,000 | 55,375 | 15,000 | 6,759 | 31,576 | 5,575,898 | ||||||||||||||||||||
Brent D. Layton | — | 9,150 | 23,850 | — | 15,000 | 12,800 | 15,554 | 2,532 | 78,886 | ||||||||||||||||||||
David P. Thomas | — | 6,100 | 23,221 | — | 15,000 | 8,400 | — | 2,532 | 55,253 |
102 | Centene Corporation |
Name | Grant Date | Date of Board Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards2 | Estimated Future Payouts Under Equity Incentive Plan Awards3 | All Other Stock Awards: Number of Shares of Stock or Units (#)4 | Grant Date Fair Value of Stock and Option Awards ($)5 | ||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
Sarah M. London | 3/29/2022 | 3/29/2022 | $ | — | $ | — | $ | — | 13,418 | 89,453 | 6 | 178,906 | — | $ | 7,624,974 | |||||||||||||||||||||||||||||
Andrew L. Asher | 4/26/2022 | 4/26/2022 | — | — | — | 5,303 | 35,352 | 6 | 70,704 | — | 2,999,971 | |||||||||||||||||||||||||||||||||
4/26/2022 | 4/26/2022 | — | — | — | — | — | — | 35,352 | 2,999,971 | |||||||||||||||||||||||||||||||||||
Kenneth J. Fasola | 1/4/2022 | 1/2/2021 | 249,380 | 997,519 | 1,995,038 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | 75,000 | 1,000,000 | 2,000,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | — | — | — | 3,198 | 21,317 | 6 | 42,634 | — | 1,800,007 | ||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | — | — | — | — | — | — | 14,211 | 1,199,977 | |||||||||||||||||||||||||||||||||||
1/4/2022 | 1/2/2021 | 100,000 | 1,000,000 | 2,000,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
1/19/2022 | 12/13/2021 | — | — | — | — | — | — | 53,374 | 4,200,000 | |||||||||||||||||||||||||||||||||||
James E. Murray | 1/4/2022 | 1/2/2021 | 180,972 | 723,887 | 1,447,774 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | 56,250 | 750,000 | 1,500,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | — | — | — | 799 | 5,329 | 6 | 10,658 | — | 449,981 | ||||||||||||||||||||||||||||||||||
3/11/2022 | 2/7/2022 | — | — | — | — | — | — | 3,553 | 300,015 | |||||||||||||||||||||||||||||||||||
1/4/2022 | 1/2/2021 | 75,000 | 750,000 | 1,500,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
1/19/2022 | 12/13/2021 | — | — | — | — | — | — | 44,478 | 3,499,974 | |||||||||||||||||||||||||||||||||||
Christopher A. Koster1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Brent D. Layton | 4/26/2022 | 4/26/2022 | — | — | — | 2,757 | 18,383 | 6 | 36,766 | — | 1,559,981 | |||||||||||||||||||||||||||||||||
4/26/2022 | 4/26/2022 | — | — | — | — | — | — | 12,255 | 1,039,959 | |||||||||||||||||||||||||||||||||||
David P. Thomas | 11/12/2022 | 11/12/2022 | — | — | — | — | — | — | 18,277 | 1,499,993 |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 103 |
104 | Centene Corporation |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 105 |
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)1 | Market Value of Shares or Units of Stock That Have Not Vested ($)2 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)1 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)2 | ||||||||||||||||||||||||||||||||||||
Sarah M. London | — | — | 13,449 | $ | 81.85 | 12/15/2031 | 3 | 8,588 | 4 | $ | 704,302 | 30,000 | 10 | $ | 2,460,300 | |||||||||||||||||||||||||||||
— | — | — | — | — | 6,667 | 5 | 546,761 | 16,494 | 11 | 1,352,673 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 11,388 | 6 | 933,930 | 89,453 | 11 | 7,336,041 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,000 | 7 | 738,090 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 110,000 | 8 | 9,021,100 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,774 | 9 | 801,566 | — | — | |||||||||||||||||||||||||||||||||||
Andrew L. Asher | — | — | 13,449 | 81.85 | 12/15/2031 | 3 | 26,073 | 12 | 2,138,247 | 30,000 | 10 | 2,460,300 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 5,659 | 13 | 464,095 | 16,494 | 11 | 1,352,673 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 6,667 | 5 | 546,761 | 35,352 | 11 | 2,899,218 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 33,334 | 14 | 2,733,721 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,774 | 9 | 801,566 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 35,352 | 15 | 2,899,218 | — | — | |||||||||||||||||||||||||||||||||||
Kenneth J. Fasola | — | — | — | — | — | 10,387 | 16 | 851,838 | 21,317 | 11 | 1,748,207 | |||||||||||||||||||||||||||||||||
— | — | — | — | — | 26,870 | 17 | 2,203,609 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 35,384 | 18 | 2,901,842 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 53,374 | 19 | 4,377,202 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 14,211 | 20 | 1,165,444 | — | — | |||||||||||||||||||||||||||||||||||
James E. Murray | 20,456 | 10,227 | — | 63.31 | 1/2/2030 | 21 | 16,955 | 18 | 1,390,480 | 5,329 | 11 | 437,031 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 17,633 | 18 | 1,446,082 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 12,813 | 18 | 1,050,794 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 44,478 | 22 | 3,647,641 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,553 | 20 | 291,382 | — | ||||||||||||||||||||||||||||||||||||
Christopher A. Koster | — | — | 15,690 | 81.85 | 12/15/2031 | 3 | 13,824 | 12 | 1,133,706 | 24,000 | 10 | 1,968,240 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 5,334 | 5 | 437,441 | 19,243 | 11 | 1,578,118 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,000 | 7 | 738,090 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 11,403 | 9 | 935,160 | — | — | |||||||||||||||||||||||||||||||||||
Michael F. Neidorff | — | — | — | — | — | 175,189 | 12 | 14,367,250 | 150,000 | 10 | 12,301,500 | |||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 82,468 | 11 | 6,763,201 |
106 | Centene Corporation |
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)1 | Market Value of Shares or Units of Stock That Have Not Vested ($)2 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)1 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)2 | ||||||||||||||||||||||||||||||||||||
Brent D. Layton | — | — | 13,449 | $ | 81.85 | 12/15/2031 | 3 | 30,720 | 12 | $ | 2,519,347 | 63,000 | 10 | $ | 5,166,630 | |||||||||||||||||||||||||||||
— | — | — | — | — | 6,667 | 24 | 546,761 | 16,494 | 11 | 1,352,673 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 14,000 | 5 | 1,148,140 | 18,383 | 11 | 1,507,590 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 8,334 | 25 | 683,471 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,000 | 7 | 738,090 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 110,000 | 8 | 9,021,100 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,774 | 9 | 801,566 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 12,255 | 26 | 1,005,033 | — | — | |||||||||||||||||||||||||||||||||||
David P. Thomas | — | — | 6,724 | 81.85 | 12/15/2031 | 3 | 15,360 | 12 | 1,259,674 | 15,000 | 10 | 1,230,150 | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 3,334 | 5 | 273,421 | 8,247 | 11 | 676,336 | ||||||||||||||||||||||||||||||||||
— | — | — | — | — | 4,887 | 9 | 400,783 | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | — | 18,277 | 27 | 1,498,897 | — | — |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 107 |
Name | Option Awards | Stock Awards | ||||||||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||||||||||
Sarah M. London | — | $ | — | 16,686 | $ | 2,576,138 | ||||||||||||||
Andrew L. Asher | — | — | 27,582 | 3,552,073 | ||||||||||||||||
Kenneth J. Fasola | — | — | 43,993 | 5,889,651 | ||||||||||||||||
James E. Murray | — | — | 28,669 | 3,843,192 | ||||||||||||||||
Christopher A. Koster | — | — | 10,256 | 1,542,987 | ||||||||||||||||
Michael F. Neidorff | 170,267 | 4,148,762 | 297,991 | 25,916,576 | 1 | |||||||||||||||
Brent D. Layton | — | — | 24,897 | 3,741,215 | ||||||||||||||||
David P. Thomas | — | — | 6,500 | 962,873 |
108 | Centene Corporation |
Name | Executive Contributions in Last FY ($)1 | Registrant Contributions in Last FY ($)2 | Aggregate Earnings (Losses) in Last FY ($)3 | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($)4 | ||||||||||||||||||||||||||||||
Sarah M. London | $ | 169,604 | $ | 75,652 | $ | 11,509 | $ | — | $ | 337,108 | |||||||||||||||||||||||||
Andrew L. Asher | 54,978 | 18,339 | (21,757) | — | 1,334,754 | ||||||||||||||||||||||||||||||
Kenneth J. Fasola | 50,000 | 12,692 | (1,420) | — | 61,272 | ||||||||||||||||||||||||||||||
James E. Murray | — | — | — | — | — | ||||||||||||||||||||||||||||||
Christopher A. Koster | 190,987 | 15,746 | (111,947) | — | 847,425 | ||||||||||||||||||||||||||||||
Michael F. Neidorff | 134,377 | 58,038 | (560,681) | (18,332,968) | — | ||||||||||||||||||||||||||||||
328,040,000 | 5 | ||||||||||||||||||||||||||||||||||
Brent D. Layton | 275,000 | 23,850 | (17,550) | (436,201) | 1,114,483 | ||||||||||||||||||||||||||||||
David P. Thomas | 77,200 | 23,221 | (44,573) | — | 367,489 |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 109 |
110 | Centene Corporation |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/ Retirement | Involuntary Not for Cause Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 6,892,740 | $ | - | $ | - | $ | - | $ | 10,339,110 | ||||||||||||||
Pro rata Bonus Payment | - | 2,046,370 | - | 2,046,370 | 2,046,370 | 2,046,370 | ||||||||||||||||||||
Unvested Stock Option Spread | - | - | - | 717 | 717 | 2,152 | ||||||||||||||||||||
Unvested RSUs and PSUs | - | 23,894,762 | - | 23,894,762 | 23,894,762 | 23,894,762 | ||||||||||||||||||||
Cash LTIP | - | 3,033,400 | - | 3,033,400 | 3,033,400 | 3,033,400 | ||||||||||||||||||||
Welfare Benefits Values | - | 50,202 | - | 1,140,202 | 50,202 | 75,303 | ||||||||||||||||||||
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 111 |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/ Retirement | Involuntary Not for Cause Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 1,025,000 | $ | - | $ | 1,025,000 | $ | 1,025,000 | $ | 3,738,798 | ||||||||||||||
Pro rata Bonus Payment | - | 2,303,777 | - | 2,303,777 | 2,303,777 | 1,281,250 | ||||||||||||||||||||
Unvested Stock Option Spread | - | - | - | 717 | 717 | 2,152 | ||||||||||||||||||||
Unvested RSUs and PSUs | - | 16,066,996 | - | 16,066,996 | 16,066,996 | 16,295,804 | ||||||||||||||||||||
Cash LTIP | - | 1,743,150 | - | 1,743,150 | 1,743,150 | 2,700,000 | ||||||||||||||||||||
Welfare Benefits Values | - | 25,101 | - | 455,101 | 25,101 | 467,651 | ||||||||||||||||||||
Outplacement | - | 25,000 | - | - | - | - |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/ Retirement | Involuntary Not for Cause or Voluntary with Good Reason Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 3,000,000 | $ | - | $ | - | $ | - | $ | 6,000,000 | ||||||||||||||
Pro rata Bonus Payment | - | 1,745,658 | - | 1,745,658 | 1,745,658 | 1,745,658 | ||||||||||||||||||||
Unvested Stock Option Spread | - | - | - | - | - | - | ||||||||||||||||||||
Unvested RSUs and PSUs | - | 5,957,288 | - | 2,211,575 | 2,211,575 | 13,248,141 | ||||||||||||||||||||
Cash LTIP | - | - | - | 1,000,000 | 1,000,000 | 2,000,000 | ||||||||||||||||||||
Welfare Benefits Values | - | 16,681 | - | 150,000 | - | 16,681 |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/ Retirement | Involuntary Not for Cause or Voluntary with Good Reason Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 750,000 | $ | - | $ | 750,000 | $ | 750,000 | $ | 2,775,000 | ||||||||||||||
Pro rata Bonus Payment | - | 1,115,625 | - | 1,115,625 | 1,115,625 | 1,115,625 | ||||||||||||||||||||
Unvested Stock Option Spread | - | 191,245 | - | 191,245 | 191,245 | 191,245 | ||||||||||||||||||||
Unvested RSUs and PSUs | - | 4,615,769 | - | 4,615,769 | 4,615,769 | 4,615,769 | ||||||||||||||||||||
Cash LTIP | - | 1,045,500 | - | 1,045,500 | 1,045,500 | 1,045,500 | ||||||||||||||||||||
Welfare Benefits Values | - | 24,465 | - | 199,465 | 24,465 | 36,698 |
112 | Centene Corporation |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/Retirement | Involuntary Not for Cause Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 750,000 | $ | - | $ | - | $ | - | $ | 2,279,423 | ||||||||||||||
Pro rata Bonus Payment | - | 1,307,452 | - | - | - | 747,115 | ||||||||||||||||||||
Unvested Stock Option Spread | - | - | - | 837 | 837 | 2,510 | ||||||||||||||||||||
Unvested RSUs and PSUs | - | 2,434,941 | - | 3,156,428 | 3,156,428 | 6,817,965 | ||||||||||||||||||||
Cash LTIP | - | - | - | 1,020,000 | 1,020,000 | 1,745,000 | ||||||||||||||||||||
Welfare Benefits Values | - | 25,101 | - | 340,000 | - | 377,651 | ||||||||||||||||||||
Outplacement | - | 25,000 | - | - | - | 25,000 |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/Retirement | Involuntary Not for Cause Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 1,100,000 | $ | - | $ | 1,100,000 | $ | 1,100,000 | $ | 4,510,818 | ||||||||||||||
Pro rata Bonus Payment | 2,722,500 | 2,722,500 | - | 2,722,500 | 2,722,500 | 1,650,000 | ||||||||||||||||||||
Unvested Stock Option Spread | 2,152 | - | - | 717 | 717 | 2,152 | ||||||||||||||||||||
Unvested RSUs and PSUs | 6,864,155 | 2,512,622 | - | 2,512,622 | 2,512,622 | 24,490,400 | ||||||||||||||||||||
Cash LTIP | 1,242,200 | 1,212,750 | - | 1,212,750 | 1,212,750 | 3,034,600 | ||||||||||||||||||||
Welfare Benefits Values | - | 24,465 | - | 1,191,465 | 24,465 | 1,203,698 | ||||||||||||||||||||
Outplacement | - | 25,000 | - | - | - | 25,000 |
Executive Benefits and Payments Upon Terminations | Voluntary Termination/Retirement | Involuntary Not for Cause Termination | For Cause Termination | Death | Disability | Termination Following a Change in Control | ||||||||||||||||||||
Severance | $ | - | $ | 965,000 | $ | - | $ | - | $ | - | $ | 3,769,424 | ||||||||||||||
Pro rata Bonus Payment | 1,650,150 | 1,650,150 | - | - | - | 965,000 | ||||||||||||||||||||
Unvested Stock Option Spread | 1,076 | - | - | 359 | 359 | 1,076 | ||||||||||||||||||||
Unvested RSUs and PSUs | 2,732,954 | 1,763,678 | - | 2,346,855 | 2,346,855 | 5,369,493 | ||||||||||||||||||||
Cash LTIP | 884,442 | - | - | 1,408,360 | 1,408,360 | 2,363,360 | ||||||||||||||||||||
Welfare Benefits Values | - | 25,101 | - | 328,000 | - | 365,651 | ||||||||||||||||||||
Outplacement | - | 25,000 | - | - | - | 25,000 |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 113 |
114 | Centene Corporation |
Year | Summary Compensation Table Total for First PEO 1 | Summary Compensation Table Total for Second PEO 2 | Compensation Actually Paid to First PEO1,3 | Compensation Actually Paid to Second PEO2,3 | Average Summary Compensation Table Total for Non-PEO NEOs 4 | Average Compensation Actually Paid to Non-PEO NEOs 4,5 | Value of Initial Fixed $100 Investment Based On: | Adjusted Diluted EPS 7 | ||||||||||||||||||||||||||||||||||||
Total Shareholder Return | Peer Group Total Shareholder Return 6 | Net Income | ||||||||||||||||||||||||||||||||||||||||||
2022 | $ | 13,246,447 | $ | 7,599,513 | $ | 12,622,902 | $ | 6,829,908 | $ | 6,659,921 | $ | 6,508,126 | $ | 130.44 | $ | 169.46 | $ | 1,202 | $ | 5.78 | ||||||||||||||||||||||||
2021 | — | 20,637,990 | — | 42,314,846 | 9,904,692 | 8,682,563 | 131.06 | 159.43 | 1,347 | 5.15 | ||||||||||||||||||||||||||||||||||
2020 | — | 24,956,777 | — | 24,990,265 | 8,575,674 | 8,110,409 | 95.48 | 114.87 | 1,808 | 5.00 |
2022 London | 2022 Neidorff | 2021 Neidorff | 2020 Neidorff | |||||||||||
PEO Summary Compensation Table Total | $ | 13,246,447 | $ | 7,599,513 | $ | 20,637,990 | $ | 24,956,777 | ||||||
SCT "Stock Awards Total" column value | (7,624,974) | — | (12,750,020) | (14,932,500) | ||||||||||
SCT "Option Awards" column value | — | — | (2,249,984) | (2,941,500) | ||||||||||
Year-end fair value of outstanding equity awards granted in applicable year | 7,336,041 | — | 15,111,905 | 17,971,500 | ||||||||||
Change in fair value of outstanding equity awards granted in prior years | (411,063) | (231,094) | 14,470,156 | (3,157,935) | ||||||||||
Change in fair value of prior-year equity awards vested in applicable year | 76,451 | 1,503,016 | 7,094,799 | 3,093,923 | ||||||||||
Change in fair value of prior-year equity awards cancelled in applicable year | — | (2,041,527) | — | — | ||||||||||
PEO Compensation Actually Paid | $ | 12,622,902 | $ | 6,829,908 | $ | 42,314,846 | $ | 24,990,265 |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 115 |
2022 | 2021 | 2020 | |||||||||
Average Non-PEO NEO Summary Compensation Table Total | $ | 6,659,921 | $ | 9,904,692 | $ | 8,575,674 | |||||
SCT "Stock Awards Total" column value | (3,591,638) | (6,702,115) | (6,049,007) | ||||||||
SCT "Option Awards" column value | — | (312,500) | — | ||||||||
Year-end fair value of outstanding equity awards granted in applicable year | 3,579,477 | 6,597,686 | 5,934,979 | ||||||||
Change in fair value of outstanding equity awards granted in prior years | (144,408) | 1,968,206 | (661,445) | ||||||||
Change in fair value of prior-year equity awards vested in applicable year | 4,774 | 505,643 | 310,208 | ||||||||
Change in fair value of prior-year equity awards cancelled in applicable year | — | (3,279,049) | — | ||||||||
Average Non-PEO NEO Compensation Actually Paid | $ | 6,508,126 | $ | 8,682,563 | $ | 8,110,409 |
116 | Centene Corporation |
CAP to Second PEO ($ in millions) | |||||
CAP to First PEO ($ in millions) | |||||
Average Compensation Actually Paid to Non-PEO NEOs ($ in millions) | |||||
Company TSR | |||||
S&P Supercomposite Managed Healthcare Index TSR |
CAP to Second PEO ($ in millions) | |||||
CAP to First PEO ($ in millions) | |||||
Average Compensation Actually Paid to Non-PEO NEOs ($ in millions) | |||||
Net Income ($ in billions) |
CAP to Second PEO ($ in millions) | |||||
CAP to First PEO ($ in millions) | |||||
Average Compensation Actually Paid to Non-PEO NEOs ($ in millions) | |||||
Adjusted Diluted EPS | |||||
1 | Represents non-GAAP measure. Refer to Appendix A for reconciliation of non-GAAP measures. |
Proposal 2 – Advisory Resolution to Approve Executive Compensation | 117 |
Most Important Performance Measures | ||
Adjusted Diluted EPS | ||
Adjusted Pre-tax Margin | ||
Adjusted Net Earnings Margin | ||
Revenue Growth Compound Annual Growth Rates | ||
Total Shareholder Return (TSR) | ||
118 | Centene Corporation |
Proposal 3 – Advisory Vote on How Frequent We Should Provide our Stockholders with a Say-on-Pay Vote | 119 |
3 PROPOSAL | Advisory Vote on How Frequently We Should Provide our Stockholders with a Say-on-Pay Vote | ||||
The Board recommends that stockholders vote for “ANNUAL” Say-on-Pay votes. | ||||||||||||||
4 PROPOSAL | Ratification of Appointment of Independent Registered Public Accounting Firm | ||||
The Board recommends that stockholders vote "FOR" the ratification of the selection of KPMG LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2023. | ||||||||||||||
KPMG | ||||||||
2022 | 2021 | |||||||
Audit Fees | $15,655 | $15,512 | ||||||
Audit-Related Fees | 2,538 | 1,535 | ||||||
Tax Fees | 55 | 298 | ||||||
All Other Fees | — | — |
Centene Corporation |
123 |
5 PROPOSAL | Stockholder Proposal for Shareholder Ratification of Termination Pay | ||||
124 | Centene Corporation |
Proposal 5 – Stockholder Proposal for Shareholder Ratification of Termination Pay | 125 |
The Board recommends that stockholders vote “AGAINST” the stockholder proposal regarding shareholder ratification of termination pay. | ||||||||||||||
6 PROPOSAL | Stockholder Proposal for Maternal Morbidity Reduction Metrics in Executive Compensation | ||||
Proposal 5 – Stockholder Proposal for Shareholder Ratification of Termination Pay | ||||||||||||||
127 |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | ||||||||||||||||||||||||||||
Outstanding Shares | Shares Acquirable Within 60 Days | Total Beneficial Ownership | Percent of Class | ||||||||||||||||||||||||||
The Vanguard Group, Inc.1 | 62,485,541 | — | 62,485,541 | 10.9 | |||||||||||||||||||||||||
100 Vanguard Blvd. Malvern, PA 19355 | |||||||||||||||||||||||||||||
Capital World Investors1 | 46,851,859 | — | 46,851,859 | 8.2 | |||||||||||||||||||||||||
333 South Hope Street, 55th Floor Los Angeles, CA 90071 | |||||||||||||||||||||||||||||
BlackRock, Inc.1 | 41,158,173 | — | 41,158,173 | 7.2 | |||||||||||||||||||||||||
55 East 52nd Street New York, NY 10055 | |||||||||||||||||||||||||||||
FMR LLC1 | 35,163,459 | — | 35,163,459 | 6.2 | |||||||||||||||||||||||||
245 Summer Street Boston, MA 02210 | |||||||||||||||||||||||||||||
Frederick H. Eppinger | 168,842 | 166,997 | 335,839 | 2 | * | ||||||||||||||||||||||||
Kenneth Burdick | 329,159 | — | 329,159 | * | |||||||||||||||||||||||||
Brent D. Layton | 234,010 | — | 234,010 | * | |||||||||||||||||||||||||
Andrew L. Asher | 112,531 | — | 112,531 | * | |||||||||||||||||||||||||
William Trubeck | 88,714 | 11,323 | 100,037 | 2 | * | ||||||||||||||||||||||||
Orlando Ayala | 74,879 | — | 74,879 | * | |||||||||||||||||||||||||
Christopher A. Koster | 51,712 | 3,016 | 54,728 | * | |||||||||||||||||||||||||
H. James Dallas | 26,084 | 11,292 | 37,376 | 2 | * | ||||||||||||||||||||||||
Jessica L. Blume | 16,600 | 20,000 | 36,600 | * | |||||||||||||||||||||||||
Sarah M. London | 13,965 | 8,588 | 22,553 | * | |||||||||||||||||||||||||
Richard A. Gephardt | 11,572 | 8,665 | 20,237 | 2 | * | ||||||||||||||||||||||||
Lori J. Robinson | 7,585 | 6,666 | 14,251 | * | |||||||||||||||||||||||||
Christopher Coughlin | 13,978 | — | 13,978 | * | |||||||||||||||||||||||||
Theodore Samuels | 12,857 | — | 12,857 | * | |||||||||||||||||||||||||
Wayne DeVeydt | 1,857 | — | 1,857 | * | |||||||||||||||||||||||||
All directors and executive officers as a group (20 persons) | 1,323,896 | 285,757 | 1,609,653 | * |
The Board recommends that stockholders vote “AGAINST” the stockholder proposal. | |||||
Amount and Nature of Beneficial Ownership | ||||||||||||||||||||
Name and Address of Beneficial Owner | Outstanding Shares | Shares Acquirable Within 60 Days | Total Beneficial Ownership | Percent of Class | ||||||||||||||||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355 | 65,260,984 | — | 65,260,984 | 11.5 | ||||||||||||||||
Capital World Investors 333 South Hope Street, 55th Floor Los Angeles, CA 90071 | 49,809,061 | — | 49,809,061 | 8.8 | ||||||||||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 40,669,044 | — | 40,669,044 | 7.2 | ||||||||||||||||
FMR LLC 245 Summer Street Boston, MA 02210 | 29,119,901 | — | 29,119,901 | 5.1 | ||||||||||||||||
Kenneth A. Burdick | 381,148 | 5,656 | 386,804 | * | ||||||||||||||||
Frederick H. Eppinger | 168,842 | 170,077 | 338,919 | 1 | * | |||||||||||||||
Brent D. Layton | 259,346 | 6,667 | 266,013 | * | ||||||||||||||||
Andrew L. Asher | 145,555 | 28,451 | 174,006 | * | ||||||||||||||||
William L. Trubeck | 88,714 | 17,888 | 106,602 | 1 | * | |||||||||||||||
Orlando Ayala | 74,879 | 2,323 | 77,202 | * | ||||||||||||||||
Christopher A. Koster | 67,193 | 3,016 | 70,209 | * | ||||||||||||||||
James E. Murray | 35,489 | 31,985 | 67,474 | * | ||||||||||||||||
H. James Dallas | 26,084 | 17,828 | 43,912 | 1 | * | |||||||||||||||
Kenneth J. Fasola | 31,729 | 8,048 | 39,777 | * | ||||||||||||||||
Jessica L. Blume | 16,600 | 22,323 | 38,923 | * | ||||||||||||||||
Sarah M. London | 28,283 | — | 28,283 | * | ||||||||||||||||
Theodore R. Samuels | 20,890 | 5,656 | 26,546 | * | ||||||||||||||||
David P. Thomas | 26,539 | — | 26,539 | * | ||||||||||||||||
Richard A. Gephardt | 11,572 | 10,988 | 22,560 | 1 | * | |||||||||||||||
Christopher J. Coughlin | 14,828 | 5,656 | 20,484 | * | ||||||||||||||||
Lori J. Robinson | 7,585 | 12,323 | 19,908 | * | ||||||||||||||||
Wayne S. DeVeydt | 2,590 | 5,656 | 8,246 | * | ||||||||||||||||
Monte E. Ford | 204 | 1,189 | 1,393 | * | ||||||||||||||||
All directors and executive officers as a group (20 persons) | 1,431,231 | 359,639 | 1,790,870 | * |
Security Ownership of Certain Beneficial Owners and Management | 129 |
Plan Category1 | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||||
Equity compensation plans approved by stockholders | 6,451,250 | $ | 76.23 | 19,146,429 | ||||||||||
Equity compensation plans not approved by stockholders2 | 105,516 | — | 2,259,315 | |||||||||||
Total | 6,556,766 | $ | 76.23 | 21,405,744 |
Commonly Asked Questions and Answers About the Annual Meeting | 131 |
Centene Corporation |
Commonly Asked Questions and Answers About the Annual Meeting | 133 |
134 | Centene Corporation |
Other Matters | 135 |
136 | Centene Corporation |
138 | Centene Corporation |
Appendix A - Reconciliation of Non-GAAP Measures | 139 |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||
GAAP Diluted EPS attributable to Centene | $ | 2.07 | $ | 2.28 | $ | 3.12 | $ | 3.14 | $ | 2.26 | ||||||||||||||||||||||
Amortization of acquired intangible assets | 1.40 | 1.31 | 1.24 | 0.61 | 0.53 | |||||||||||||||||||||||||||
Acquisition related expenses | 0.36 | 0.31 | 1.04 | 0.25 | 1.07 | |||||||||||||||||||||||||||
Other adjustments(1) | 2.65 | 2.16 | 0.05 | 0.72 | 0.07 | |||||||||||||||||||||||||||
Income tax effects of adjustments (2) | (0.70) | (0.91) | (0.45) | (0.30) | (0.39) | |||||||||||||||||||||||||||
Adjusted Diluted EPS | $ | 5.78 | $ | 5.15 | $ | 5.00 | $ | 4.42 | $ | 3.54 |
140 | Centene Corporation |
Year Ended December 31, | ||||||||||||||
2022 | 2019 | |||||||||||||
Net earnings attributable to Centene Corporation | $ | 1,202 | $ | 1,321 | ||||||||||
Income tax expense | 760 | 473 | ||||||||||||
Interest expense | 665 | 412 | ||||||||||||
Depreciation | 614 | 342 | ||||||||||||
Amortization (1) | 913 | 303 | ||||||||||||
Stock compensation expense | 234 | 176 | ||||||||||||
Other adjustments (2) | 1,540 | 301 | ||||||||||||
Adjusted EBITDA | $ | 5,928 | $ | 3,328 |
CENTENE CORPORATION | ||
C/O BROADRIDGE | ||
PO BOX 1342 | ||
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CENTENE CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | ELECTION OF DIRECTORS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nominees | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1d. | H. James Dallas | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1e. | Wayne S. DeVeydt | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1f. | Frederick H. Eppinger | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1g. | Monte E. Ford | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1h. | Sarah M. London | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1i. | Lori J. Robinson | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1j. | Theodore R. Samuels | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposal 2: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2. | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION. | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote ANNUAL on proposal 3: | 1 Year | 2 Years | 3 Years | Abstain | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. | ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION. | o | o | o | o | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposal 4: | For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. | RATIFICATION OF APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023. | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote AGAINST proposals 5 and 6: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5. | STOCKHOLDER PROPOSAL FOR SHAREHOLDER RATIFICATION OF TERMINATION PAY. | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6. | STOCKHOLDER PROPOSAL FOR MATERNAL MORBIDITY REDUCTION METRICS IN EXECUTIVE COMPENSATION. | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CENTENE CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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