Table of ContentsTABLE OF CONTENTS
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agilon health, inc.(Name of Registrant as Specified in its Charter)(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)
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Dear agilon Shareholder: | | | April 18, 2024 | | | |
In 2023, agilon established new partnerships with physician practices and health systems, expanded our Physician Network, and enhanced our purpose-built platform, all while we and the Medicare Advantage sector continued to navigate through a complex transition period for the industry. Our achievements would not be possible without the hard work and dedication of | | |  | |||
As mentioned, the current transition period we are in is the result of external challenges, as costs among the senior population rose faster than contemplated in Centers for Medicare & Medicaid Services (“CMS”) benchmarks and payor bids due to increased utilization. We believe this higher utilization may be driven by post-COVID pent up demand and other factors. However, we also believe that agilon and the broader industry (including CMS and our payor partners) will adjust to this new environment, supporting our ability to return to a more normalized margin trajectory over time. | | |||||
In response to these dynamics, we’re taking concrete steps to improve our performance. From a forecasting perspective, this is reflected in the significant strengthening of our reserves exiting 2023 and our reset guidance for 2024 that assumes recent utilization remains elevated. From an operating perspective, we’re implementing the action plan we outlined in January 2024, with a focus on best-in-class execution on factors we can directly control. Our plan includes four elements: 1) expanding support for newer primary care physicians (“PCPs”) in our mature markets; 2) leveraging our strong payor relationships; 3) addressing our data visibility gaps; and 4) boosting our operating efficiency. At the same time, we will of course continue executing on the foundational elements of our full-risk Total Care Model. | | | On behalf of our Board of Directors and our entire team, thank you for supporting agilon health, and for helping us ensure our physician partners thrive alongside their patients. | |||
As we make progress toward our actions, it’s important to remember that our business model is working. In fact, demand for our platform has never been stronger, and our Physician Network continues to drive quality outcomes, including quality scores at four and above. We’ve also made considerable reinvestments back into local primary care despite the challenging environment, reinvesting more than $200 million last year. We now have 31 partners in 13 states, which collectively represent 2,400+ PCPs in 30+ communities and around 650,000 senior patients. Our Physician Network will become even stronger with the addition of our Class of 2025 partners, even as we take a measured approach to growth due to the current environment. Additionally, we’re proud of the clinical research that we, along with our Physician Network, published last year from our full-risk Total Care Model, which evaluated patients with diabetes and those in our palliative care program. | | |||||
On a separate note, I’d like to recognize Tim Bensley, chief financial officer, who will be retiring from agilon later this year, as well as Ben Kornitzer, MD, chief medical officer, who is transitioning out of the role and serving in a strategic capacity as special advisor to the company. Their contributions to their respective functions have been invaluable, and the leadership team and I look forward to announcing their successors soon. | | |||||
I’d also like to recognize two independent members of our board of directors who joined last year: Silvana Battaglia, who brings more than two decades of business leadership experience in global human resources, and Diana McKenzie, who brings 30 years of leadership experience growing, scaling and transforming global businesses in the health care and software industries. With these additions and the transition of three board members off our board last year, our company moved from being a controlled company to one of independence, with majority independent membership on our board, including independent chairs for each of our major board committees. I am grateful to the nine members of our board as they are fundamental to advancing our company’s mission and contribute greatly to our success. | | |||||
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CEO Message.
In closing, I’d like to reiterate why our company continues to fill a critical need for our physician partners and their patients. Our full-risk Total Care Model is helping PCPs make the shift from volume to value, which is leading to better care for seniors and better cost care. Ultimately, it’s empowering physicians to transform our health care system. This is a worthy purpose, and is the reason why I joined agilon four years ago as well as why the leadership team and I continue to be excited about our company’s future and our role in value-based care. | | |||||
Our shareholders are extremely important to all of us at agilon, | | | ||||
Best, | | | ||||
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Steve Sell Chief Executive Officer agilon health, inc. | | |||||
2022 was a remarkable year for agilon health. We achieved record earnings growth, established new partnerships with physician practices and health systems, and expanded our network from 1,600 to 2,200+ primary care physicians in 12 states and 25 communities. These incredible results reflect the hard work and dedication of our team of more than 740 talented employees, who are focused on agilon’s mission to be a trusted partner and empower physicians to reimagine the patient experience for American seniors.
Among our many achievements in 2022, total members on the agilon platform increased by 51%, to 358,600 as of December 31, 2022, including 269,500 Medicare Advantage members and 89,000 Direct Contracting beneficiaries. Through those partnerships, we have increased our total revenues by 48% compared to the prior year, with fiscal year 2022 revenues of $2.7 billion. Most importantly, we are scaled for growth and expect to generate significant gains in profitability while advancing our robust increases in both membership and revenue in 2023.
As I reflect on the broken state of the American healthcare system, it is clear there has never been a greater need for a new model of primary care, one that prioritizes patient outcomes over volume of services. The agilon full-risk, Total Care Model is critical to empowering primary care physicians and helping them redefine the care delivery experience for their senior patients. Under our model, PCPs are incentivized to focus on their patients’ total health and to provide the highest quality care in a more efficient manner, as opposed to the traditional Fee-for-Service model that prioritizes volume of services over value and outcomes. In the latter approach, practicing physicians are experiencing high rates of burnout and younger physicians are choosing alternative fields. The agilon approach is creating a new paradigm, resulting in an improved patient experience, healthier communities, and more satisfied doctors. And because we partner with existing physician groups, local communities benefit from reinvestment of savings from newfound efficiencies, helping to sustain and grow access to high quality primary care that is especially critical for underserved communities.
In my conversations over the past year, I am continually inspired by the stories of agilon partners, community-based PCPs who have strengthened their practices and delivered more comprehensive care to patients with the agilon Total Care Model. There is no intervention in healthcare that is more impactful than a trusting relationship between a PCP and their patient. By empowering primary care physicians, we can bring customized, sustainable, value-based healthcare solutions to hundreds of communities in need across the United States.
It is my pleasure to invite you to learn more about our vision and progress at our second annual meeting of stockholders, taking place on May 24, 2023. The attached proxy statement contains information about the meeting agenda, as well as voting instructions. We thank you for taking time to review and vote on these important issues.
On behalf of our Board of Directors and our entire team, thank you for supporting agilon health, and for helping us ensure our physician partners thrive alongside their patients.
Best,
Steve SellChief Executive Officeragilon health, inc.
AGENDANotice of AnnualMeetingIwe cordially invite you to attend the 20232024 Annual Meeting of Stockholders (the “Annual Meeting”) of agilon health, inc. (the “Company”).Date and TimeWednesday, May 24, 2023 at 12:00 p.m., Eastern TimeLocationwww.virtualshareholdermeeting.com/AGL2023We have adopted this technology to expand access to the meeting, improve communications and lower the cost to our stockholders, the Company and the environment. We believe that the virtual Annual Meeting should enable increased stockholder participation from locations around the world.AgendaAt the meeting, stockholders will consider and vote on the following matters:11.Proposal 1: Election of fourthree Class IIIII directors for a three-year term ending at the 20262027 Annual Meeting of Stockholders;Stockholders22.Proposal 2: Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscalthe year 2023;ending December 31, 202433.Proposal 3: Advisory vote to approve the compensation paid to the Company’s named executive officers; andofficers44.Any such other business as may properly come before the Annual Meeting or anyadjournments or postponements thereof.thereofThe board recommends that you vote “FOR”FOR” the election of each of the nominees named in Proposal 1 of this Proxy Statementproxy statement and “FOR”FOR” each of Proposals 2 and 3. Information about the matters to be acted upon at the Annual Meeting is contained in the accompanying proxy statement.Please refer to the Proxy Statement.
2023 Proxy Statement | 4Voting Your SharesStockholders of record holding shares of common stock, par value $0.01 per share (the “Shares”) as of the close of businessStatement Summary on March 31, 2023 (the “Record Date”) are entitledpage 1 for instructions on ways to vote at the Annual Meeting.your shares.
Internet: Please log on to www.proxyvote.com and submit a proxy to vote your Shares by 11:59 p.m., Eastern Time, on May 23, 2023.
Telephone: Please call the number on your proxy card until 11:59 p.m., Eastern Time, on May 23, 2023.
Mail: If you received printed copies of the proxy materials, please complete, sign, date and return your proxy card by mail to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717 so that it is received by the Company prior to the Annual Meeting.
In Person (Virtually): You may attend the virtual Annual Meeting and cast your vote. Stockholders present virtually during the Annual Meeting will be considered present in person.Beneficial owners whose Shares are held at a brokerage firm or by a bank or other nominee should follow the voting instructions that they received from the nominee.We are furnishing our proxy materials to all of our stockholders over the Internet rather than in paper form. We believe that this delivery process will lower the costs of printing and distributing our proxy materials and reduce our environmental impact, without impacting our stockholders’ timely access to this important information. Accordingly, stockholders of record at the close of business on March 31, 2023April 4, 2024 will receive a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) and may vote at the Annual Meeting of Stockholders. Such stockholders will also receive notice of any postponements or adjournments of the meeting. The Notice of Internet Availability is being distributed to stockholders on or about April 14, 2023.18, 2024.
We have adopted this technology to expand access to the meeting, improve communications and lower the cost to our stockholders, the Company and the environment. |
We believe that the virtual Annual Meeting should enable increased stockholder participation from locations around the world. |
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 | | | Date Wednesday, May 29, 2024 | | |  | | | Time 12:00 p.m., Eastern Time | | |  | | | Location Via live webcast at www.virtualshare holdermeeting.com/ AGL2024 | | |  | | | Who Can Vote Stockholders of record as of April 4, 2024 |
 | | | Internet Please log on to www.proxyvote.com and submit a proxy to vote your Shares by 11:59 p.m., Eastern Time, on May 28, 2024. | | |  | | | Telephone Please call the number on your proxy card until 11:59 p.m., Eastern Time, on May 28, 2024. | | |  | | | Mail If you received printed copies of the proxy materials, you may vote by mail. Please return your proxy card to the address listed so that it is received prior to the Annual Meeting. | | |  | | | Virtually You may attend the virtual Annual Meeting and cast your vote. Stockholders present virtually during the Annual Meeting will be considered present in person. |
Proposals | | | | | | Board Vote Recommendation | | | For Further Details |
1 | | | Election of three Class III directors for a three-year term ending at the 2027 Annual Meeting of Stockholders | | | FOR each nominee | | | Page 59 |
2 | | | Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2024 | | | FOR | | | Page 60 |
3 | | | Advisory vote to approve the compensation paid to the Company’s named executive officers | | | FOR | | | Page 62 |
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| | | PROXY STATEMENT SUMMARY |
Nominees | | | Current Occupation | | | Age | | | Director Since | | | Independent |
Mr. Ravi Sachdev | | | Partner of Clayton, Dubiilier & Rice, board vice chairman of the Company, director of Covetrus, Inc., Steve Madden, Inc., Millennium Physician Group, apree health and Gentiva | | | 47 | | | 2017 | | | |
Mr. Steven J. Sell | | | Chief Executive Officer and director of the Company | | | 57 | | | 2020 | | | |
Dr. William Wulf | | | Director of apree health, former CEO and founding partner of Central Ohio Primary Care | | | 64 | | | 2017 | | |  |
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| | | PROXY STATEMENT SUMMARY |
Whether or not you plan
Partnership &Collaboration 
Quality &Service 
Accountability &Integrity 
ContinuousImprovement
Excellence 
Expertise 
Innovation EXECUTIVE COMPENSATION PROGRAM DESIGN AND GOVERNANCE PRACTICESOur executive compensation program is designed to attendprovide strong alignment between executive pay, stockholder interests, and company performance, and incorporates best practices such as the annual meeting, please vote by Internet at your earliest convenience or complete, sign, date and return the proxy card so that your shares will be represented at the meeting. You may choose to attend the meeting and personally cast your votes even if you vote by Internet or fill out and return a proxy card by mail. If you choose to attend the meeting virtually, you may revoke your proxy and personally cast your votes at the meeting.By Order of the Board of Directors,
WHATWE DODenise Zamore
Chief Legal Officer 
Reward our executives commensurate with their performance, experience and Corporate Secretarycapabilities Reward achievement of short-term business objectives and results Align executive and stockholder interests Create “ownership culture” with equity awards Provide employment retention incentives Provide competitive employee benefits Reward achievement of goals related to our team and culture engagement plan, leadership development and our diversity, equity, inclusion and belonging priorities Emphasize long-term growth through maximizing focus on increasing shareholder valueWHAT WEDON’T DO 
No hedging or monetization transactions with respect to the Company’s securities No pledging of the Company’s securities as collateral for a loan No compensation practices that encourage unnecessary and excessive risk taking Do not provide dividends or dividend equivalents on unearned PSUs unless and until the underlying PSU vests (and if such PSUs are forfeited, no dividend equivalents are paid out) Do not grant stock options or stock appreciation rights with an exercise price less than the fair market value on the grant date
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6210 E. Highway 290, Suite 450TABLE OF CONTENTS
Austin, Texas 78723
The proxy statement and annual report to stockholders are available at The board of directors (“board of directors” or “board”) of agilon health, inc., a Delaware corporation (referred to as “agilon,” the “Company,” “we,” “us,” or “our”), has made these proxy materials available to you on the Internet, or is providing printed proxy materials to you pursuant to your request, in connection with the solicitation of proxies for use at our Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 24, 2023.The accompanying Proxy Statement, our 2022 Annual Report to Stockholders, and directions on how to participate in the Annual Meeting are available at proxyvote.com29, 2024. 2023 Proxy Statement | 6
Table of Contents.Important Notice Regarding The Availability Of Proxy Materials For The Annual Meeting Of Stockholders To Be Held On May 24, 2023.U.S. Securities and Exchange Commission (the “SEC”),SEC, we are pleased to provide access to our proxy materials over the Internet to all of our stockholders rather than in paper form. Accordingly, a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) has been mailed to our stockholders on or about April 14, 2023.18, 2024. Stockholders will have the ability to access the proxy materials on the websites listed above, or to request a printed set of the proxy materials be sent to them by following the instructions in the Notice of Internet Availability. By furnishing a Notice of Internet Availability and access to our proxy materials by the Internet, we are lowering the costs and reducing the environmental impact of our annual meeting.The Notice of Internet Availability also provides instructions on how you may request that we send future proxy materials to you by electronic mail or in printed form by mail. If you choose to receive future proxy materials by electronic mail, you will receive an electronic mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by electronic mail or in printed form by mail will remain in effect until you terminate it. We encourage you to choose to receive future proxy materials by electronic mail, which will allow us to provide you with the information you need expeditiously, will save us the cost of printing and mailing documents to you, and will conserve natural resources. 2023agilon health 2024 Proxy Statement | 84What are the proxy materials?20232024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Wednesday, May 24, 2023,29, 2024, at 12:00 p.m., (Eastern Time), via virtual meeting at www.virtualshareholdermeeting.com/AGL2023AGL2024, for the purpose of considering and acting upon the matters set forth in this proxy statement.
Why did we receive only one copy of the Notice of Internet
Availability and how may
OBTAIN AN ADDITIONAL COPY?
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Questions and Answers About The Proxy Materials and Annual Meeting
What items of business will be voted on at the Annual Meeting?
The items of business scheduled to be voted on at the Annual Meeting are:
agilon health 2024 Proxy Statement | | 5 |
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE ON THESE PROPOSALS? Proposal 1: “FOR” each of |
How does the boardnominees named in the proxy statement as Class III directors for a term expiring at the 2027 Annual Meeting of directors recommend IStockholders.
approving the compensation paid to the Company’s named executive officers.
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Questions and Answers About The Proxy Materials and Annual Meeting
Who is entitled to vote at the Annual Meeting?
The record date for stockholders entitled to notice of, and to vote at, the Annual Meeting is March 31, 2023.April 4, 2024. At the close of business on that date, we had 414,464,566411,057,065 shares of common stock issued and outstanding and entitled to be voted at the Annual Meeting held by approximately 726780 stockholders of record. A quorum is required for our stockholders to conduct business at the Annual Meeting. The presence in person or by proxy of the holders of record of a majority of the shares of common stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting. Each outstanding share of common stock is entitled to one vote. Dissenters’ rights are not applicable to any of the matters being voted upon at the Annual Meeting.
What votes are required to approve each of the proposals?
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year ending December 31, VOTE AT THE ANNUAL MEETING? For beneficial stockholders with shares registered in the name of a broker, bank, trustee or other nominee, a number of brokerage firms and banks are participating in a program that offers an Internet voting option. Stockholders should refer to the voting instruction card provided by their broker, bank, trustee or other nominee for instructions on the voting methods they offer. Registered stockholders with shares registered directly in their names with Computershare will also be able to vote using the Internet. For instructions on how to vote, please refer to the instructions included on the Notice of Internet Availability. RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS? CHANGE OR REVOKE MY PROXY? Representatives of the firm of Broadridge Financial Solutions, Inc. (“Broadridge”) will count the votes and an independent Inspector of Election will certify the election results. The results will be publicly filed with the SEC on a Form 8-K within four business days after the Annual Meeting. MAKE A PROPOSAL OR MAKE A NOMINATION FOR DIRECTOR FOR NEXT YEAR’S ANNUAL MEETING? QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETINGProposal 2, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2023,2024, will be determined by the affirmative vote of the holders of at least a majority of the outstanding shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. The Audit Committee has sole and direct responsibility for the appointment, retention, termination, compensation, evaluation and oversight of the work of any independent registered public accounting firm engaged by the Company. The Audit Committee has already appointed Ernst & Young LLP as our independent registered public accounting firm for the 2023 Proxy Statement | 12Questions and Answers About The Proxy Materials and Annual Meeting2023.2024. In the event of a negative vote on the ratification, the Audit Committee may reconsider its appointment of Ernst & Young LLP for 2023;2024; however, the Audit Committee will consider the outcome of the vote when making appointments of our independent registered public accounting firm in future years.Proposal 3, the non-binding advisory vote approving the compensation paid to the Company’s named executive compensation,officers, will be determined by the affirmative vote of the holders of at least a majority of the outstanding shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. As an advisory vote, this proposal is not binding. However, our board of directors and Compensation and Human Capital Committee will consider the outcome of the vote when making future compensation decisions for our executive officers.How are broker non-votes and abstentions counted?HOW ARE BROKER NON-VOTES AND ABSTENTIONS COUNTED?The presence of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, either in person or by proxy, will constitute a quorum. Shares of common stock represented by proxies at the meeting, including broker non-votes and those that are marked “WITHHOLD” or “ABSTAIN”, will be counted as shares present for purposes of establishing a quorum. Because broker non-votes are not voted affirmatively or negatively, they will have no effect on the approval of any of the proposals, except where brokers may exercise their discretion on routine matters. A broker non-vote occurs when a broker or nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner. Neither withholding authority to vote or abstaining with respect to one or more nominees nor a broker non-vote will have an effect on the outcome of the election of directors in Proposal 1. As to Proposals 2, and 3, shares represented by proxies that are marked “ABSTAIN” will have the effect of a vote against the proposal. Only the ratification of the selection of our independent registered public accounting firm in Proposal 2 is considered a routine matter. Your broker will therefore not have discretion to vote on the “non-routine” matters set forth in Proposals 1 and 3, absent direction from you. Broker non-votes will not have an effect on the outcome of Proposals 1 and 3.CanCAN I vote at the Annual Meeting?For stockholders with shares registered in the name of a brokerage firm or bank or other similar organization, you will need to obtain a legal proxy from the broker, bank, trustee or other nominee that holds your shares before you can vote your shares in person at the Annual Meeting. For stockholders with shares registered directly in their names with Computershare, you may vote your shares virtually at the Annual Meeting.May stockholders ask questions?MAY STOCKHOLDERS ASK QUESTIONS?Yes. Representatives of the Company will answer stockholders’ questions of general interest (with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references) following the meeting in accordance with the rules and regulations of the annual meeting.Annual Meeting. Questions can be asked by entering the question into the question-and answer text box once in the virtual meeting. A representative of the Company will read the question aloud prior to responding. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. The questions and answers will be posted on the Company’s website on the same page as other investor presentations for 30 days after the Annual Meeting. In case of technical issues, stockholders may call the technical support phone number(s) provided on the login page of the virtual shareholder meeting site. 2023agilon health 2024 Proxy Statement | 137 QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETINGTable of ContentsCAN I VOTE VIA THE INTERNET?Questions and Answers About The Proxy Materials and Annual MeetingCan I vote via the Internet?If your shares are held in an account at a broker, bank, trustee or other nominee participating in this program or registered directly in your name with Computershare, you may vote those shares by accessing the Internet website address specified on your Notice of Internet Availability. The giving of such an Internet proxy will not affect your right to vote at the Annual Meeting should you decide to attend virtually.The Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly. If you vote by Internet, you do not need to send in a proxy card or vote instruction form. The deadline for Internet voting will be 11:59 p.m., Eastern Time, on May 23, 2023.What if28, 2024.WHAT IF I return my proxy card but do not provide voting instructions?If you provide specific voting instructions, your shares will be voted as you instruct. Unless contrary instructions are specified, if you sign and return a proxy card but do not specify how your shares are to be voted, the shares of the common stock of the Company represented thereby will be voted in accordance with the recommendations of the board of directors. These recommendations are: “FOR” the election of the nominees listed in this Proxy Statementproxy statement as directors of the Company, “FOR” the ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 20232024 and “FOR” the proposal regarding the non-binding advisory vote approving the compensation paid to the Company’s named executive compensation.officers. A stockholder’s submission of a signed proxy will not affect his or her right to attend and to vote at the Annual Meeting.How doHOW DO I change or revoke my proxy?Subject to any rules your broker, bank, trustee or other nominee may have, you may change your proxy instructions at any time before your proxy is voted at the Annual Meeting. If you are a holder of record and wish to revoke your proxy instructions, you must either (1) subsequently submit a proxy via the Internet or by telephone, which will be available until 11:59 p.m., Eastern Time, May 23, 2023;28, 2024; (2) sign, date and deliver a later-dated proxy card so that it is received before the Annual Meeting; (3) submit a written revocation; or (4) send a notice of revocation via the Internet at www.proxyvote.com. If you hold your shares in street name, you must follow the instructions of your broker, bank or other intermediary to revoke your voting instructions.
WHO WILL COUNT AND CERTIFY THE VOTES? 2023 Proxy Statement | 14Questions and Answers About The Proxy Materials and Annual MeetingWho will count and certify the votes?How canHOW CAN I make a proposal or make a nomination for director for next year’s annual meeting?You may present proposals for action at a future meeting or submit nominations for election of directors only if you comply with the requirements of the proxy rules established by the SEC and our amended and restated by-laws,, as applicable. In order for a stockholder proposal to be considered for inclusion in our proxy statement and form of proxy relating to our annual meeting of stockholders to be held in 2024,2025, the proposal must be received by us at our principal executive offices no later than December 12, 2023.18, 2024. Stockholders wishing to bring a proposal or nominate a director at the annual meeting to be held in 2024 (but not include it in our proxy materials) must provide written notice of such proposal to our Corporate Secretary at our principal executive offices between January 25, 202429, 2025 and February 23, 202428, 2025 and comply with the other provisions of our amended and restated by-laws.Who pays for In addition, stockholders who intend to solicit proxies in support of director nominees other than the costCompany’s nominees at our annual meeting of stockholders to be held in 2025, must provide written notice to the Company setting forth the information required by Rule 14a-19 under the Exchange Act, unless the required information has beenagilon health 2024 Proxy Statement | 8
| | | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
statement previously filed by the stockholder. Such written notice must be provided in accordance with Rule 14a-19 no later than March 30, 2025. The notice requirement under Rule 14a-19 is in addition to the applicable notice requirements under our amended and restated by-laws as described above.
What is
Each continuing board member is expected to attend the Company’sour annual meeting. Allmeetings, although all directors are encouraged to attend. Two directors who served at the time of our 20222023 annual meeting of stockholders attended that meeting.
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| | Silvana Battaglia Class I — Expiring 2025 Annual Meeting |  | |  | | | Sharad Mansukani, M.D. Class I — Expiring 2025 Annual Meeting |
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 | Jeffrey A. Schwaneke Class I — Expiring 2025 Annual Meeting |  |
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  | | | Ron Williams* Class II — Expiring |  |
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  | | | Ravi Sachdev Class III — Expiring 2024 Annual Meeting |  | |  | | | Steven J. Sell Class III — Expiring 2024 Annual Meeting |
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 | William Wulf, M.D. Class III — Expiring 2024 Annual Meeting | | | | |
| * | Chairman of the board of directors. |
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
Our board of directors is led by our non-executive Chairman, Mr. Ron Williams, who was designated as a nominee for our board of directors (a “CD&R Designee”) by CD&R Vector Holdings, L.P. (the “CD&R Investor”) pursuant to a stockholders agreement between us and the CD&R Investor (the “CD&R Stockholder Agreement”). The CD&R Stockholder Agreement provides that a CD&R Designee will serve as chair of the board of directors as long as the CD&R Investor holds at least 25% of the outstanding shares of our common stock. In May 2023, the CD&R Investor disposed of certain shares of our common stock in an underwritten offering and its holdings are now less than 25%. Mr. Williams remains our board chairman. Pursuant to the CD&R Stockholder Agreement, CD&R Investor has the right to appoint 20% of the directors on the board of directors given its current share ownership percentage. See “Certain Relationships and Related Party Transactions—CD&R Stockholder Agreement.”
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
Nominees for Election to the Board of Directors in 2023
2024
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The Board of Directors and Corporate Governance
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The Board of Directors and Corporate Governance
Continuing Members of the Board of Directors
Class IIII — Nominees Whose Term Expires in 2025
| | | Ravi Sachdev We believe Mr. |
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 Steven J. Sell Age: 57 Director since: 2020 | | | Steven J. Sell has served as our Chief Executive Officer and President and director since June 2020. In addition to his current role as Chief Executive Officer and President and director of the Company, We believe Mr. Sell is a valuable member of our board because of his experience in the healthcare industry and as agilon health’s Chief Executive Officer and President. |
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 William Wulf, M.D. Age: 64 Director since: 2017
| | | William Wulf, M.D. We believe Dr. Wulf is a valuable member of our board because of his experience as a medical professional, including as an executive at a medical group, and because of his experience as an advisor for multiple payors. |
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
 Silvana Battaglia Age: 56 Director since: 2023 | | | Silvana Battaglia joined our board of directors in June 2023. Ms. Battaglia is Executive Vice President and Chief Human Resources Officer for Cencora, a leading global healthcare solutions company. Ms. Battaglia brings over 25 years of business leadership experience in global human resources organizations, shaping high-performance cultures, talent and succession management and driving organization transformation within the pharmaceutical and business services sectors. Prior to being named to her current role in January 2019, Ms. Battaglia served as Senior Vice President of Global Compensation, Benefits and Labor Relations and Senior Vice President of Global Human Resources at Aramark from 2011 to 2019. Ms. Battaglia served as the Chief Human Resources Officer of Day & Zimmerman from 2008 to 2011 and held increasingly responsible leadership positions with Merck & Co., Inc. from 1998 to 2008. Her early career included positions at Wyeth Pharmaceuticals and Colorcon, a division of Berwind Pharmaceuticals. Ms. Battaglia, a National Association of Corporate Directors certified professional director, graduated from Temple University with a B.A. in Marketing and her M.S. in Human Resources from Widener University. She has also served as an adjunct faculty member at St. Joseph’s University in Philadelphia. We believe Ms. Battaglia is a valuable member of our board because of her extensive experience with human resources in the healthcare industry, and with global healthcare and pharmaceutical companies. |
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 Sharad Mansukani, M.D. Age: 54 Director since: 2017 | | | Sharad Mansukani, M.D. has served as a director since 2017. Dr. Mansukani also serves as a Senior Advisor to TPG, a trustee of the Children’s Hospital of Philadelphia, a member of the board of directors of Monogram Health, Inc., Chairman of the board of directors of Convey Health Solutions and a member of The Wharton School Healthcare Policy Board. Dr. Mansukani served as Chairman of the board of directors of Envision Rx Options from 2013 to 2016; a strategic advisor to the board of directors at Cigna Corp. from 2012 to 2015; Vice Chairman, Board of Directors of Health Spring, Inc. from 2007 to 2012; a director of IMS Health Holdings, Inc. from 2009 to 2016; a director of Surgical Care Affiliates, Inc. from 2007 to 2017; as lead director of IASIS Healthcare from 2005 to 2018; and a director of Kindred Healthcare, Inc. from 2015 to 2018. Dr. Mansukani also has served as a Senior Advisor on Medicare’s Program Advisory and Oversight Committee to the Secretary of the Department of Health and Human Services; Senior Advisor to the Administrator of the Centers for Medicare and Medicaid Services; and senior vice president and chief medical officer at Health Partners. Dr. Mansukani completed a residency and fellowship in ophthalmology at the University of Pennsylvania School of Medicine and a fellowship in quality management and managed care at the Wharton School of the University of Pennsylvania. He is a graduate of the Managed Care Executive Program at the Kellogg School of Business. We believe Dr. Mansukani is a valuable member of our board because of his experience as a medical professional, including in his positions working for government agencies, and his experience on or as an advisor to other healthcare companies’ boards. |
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
 Jeffrey A. Schwaneke
Age: 48 Director
| | | Jeffrey Schwaneke has served as a director We believe Mr. Schwaneke is a valuable member of our board because of his experience as an executive at a large healthcare company and his financial experience. |
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
 Diana L. McKenzie Age: 59 Director
| | | Diana L. McKenzie We believe Ms. McKenzie is a valuable member of our board because of her leadership and technology experience and her experience on other healthcare companies’ boards. |
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 Karen McLoughlin Age: 59 Director since: 2021 | | | Karen McLoughlin has served as a director since We believe Ms. McLoughlin is a valuable member of our board because of her experience as an executive at a large public company and her experience as a public company director, as well as her financial and accounting expertise. |
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 Ronald A. Williams Age: 74 Director since: 2017 | | | Ron Williams is a co-founder of our Company and has served as a director and chairman of the board since 2017. Mr. We believe Mr. |
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The Board of Directors and Corporate Governance
Class III — Directors Whose Term Expires in 2024
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| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
Director Independence
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The Board of Directors and Corporate Governance
Code of Conduct and Code of Financial Ethics
| agilon health 2024 Proxy Statement | | 16 |
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Director | | | Audit | | | Compensation and
* Board Chairman
Audit Committee Our Audit Committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications and independence of our independent registered public accounting firm, the effectiveness of our internal control over financial reporting and the performance of our internal audit function and independent registered public accounting firm. Our Audit Committee is responsible for reviewing and assessing the qualitative aspects of our financial reporting, our processes to manage business and financial risks, and our compliance with significant applicable legal, ethical and regulatory requirements. Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The charter of our Audit Committee is available without charge at https:// The members of our Audit Committee Karen McLoughlin (Chair) Jeffrey Schwaneke Diana Our board of directors has designated Karen McLoughlin and Jeffrey Schwaneke as “audit committee financial experts,” and each of the three members has been determined to be “financially literate” under the NYSE rules.
Report of the Audit Committee The principal purpose of the Audit Committee is to assist the board of directors in its oversight of our accounting practices, system of internal controls, audit processes and financial reporting processes. The Audit Committee is responsible for appointing and retaining our independent auditor and approving the audit and non-audit services to be provided by the independent auditor, as well as overseeing the performance of the Company’s internal audit function. The Audit Committee’s function is more fully described in its charter. Our management is responsible for preparing our financial statements and ensuring they are complete and accurate and prepared in accordance with generally accepted accounting principles. Ernst & Young LLP, our independent registered public accounting firm for the year ended December 31, The Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 2023. The Audit Committee has also discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standard No. 16 adopted by the Public Company Accounting Oversight Board (United States) (“PCAOB”) regarding “Communications with Audit Committees” and the applicable requirements of the SEC. The Audit Committee also has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the
Based on the review and discussions described above, the Audit Committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, The Audit Committee Karen McLoughlin (Chair) Diana McKenzie Jeffrey Schwaneke Diana McKenzie This Report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act. Compensation and Human Capital Committee Our Compensation and Human Capital Committee is responsible, among its other duties and responsibilities, for reviewing and approving all forms of compensation to be provided to, and employment agreements with, the executive officers and directors of the Company including The members of our Compensation and Human Capital Committee Jeffrey Schwaneke Silvana Battaglia Diana McKenzie Karen McLoughlin. The Compensation and Human Capital Committee has the authority to retain compensation consultants, outside counsel and other advisers. During
design matters and to prepare market studies of the competitiveness of components of the Company’s compensation program for its senior executive officers, including the named executive officers and non-employee directors. Semler Brossy does not provide any services to agilon health other than as directed by the Compensation and Human Capital Committee. The Compensation and Human Capital Committee performed an assessment of Semler Brossy’s independence to determine whether the consultant is independent, taking into account Semler Brossy’s executive compensation consulting protocols to ensure consultant independence and other factors that the Compensation and Human Capital Committee determined to be relevant, including the independence
factors set forth in Exchange Act Rule 10C-1. Based on that assessment, the Compensation and Human Capital Committee determined that the firm’s work has not raised any conflict of interest and the firm is independent. Nominating and Governance Committee Our Nominating and Governance Committee is responsible, among its other duties and responsibilities, for identifying and recommending to the board of directors candidates for election to our board of directors, reviewing the composition of the board of directors and its committees, developing and recommending to the board of directors corporate governance guidelines that are applicable to us, and overseeing board of directors’ The members of our Nominating and Governance Committee Sharad Mansukani, M.D. Karen McLoughlin Jeffrey Schwaneke Compliance and Quality Committee The Compliance and Quality Committee is responsible, among its other duties and responsibilities, for assisting the board of directors in fulfilling its fiduciary responsibilities relating to compliance with the laws, rules and regulations applicable to our business, including cybersecurity risks, and recommending adoption and implementation of, and changes to, our compliance programs, subject in all cases to the oversight and approval authority of the board of directors. The The members of our Compliance and Quality Committee are: William Wulf, M.D. (Chair) Sharad Mansukani, M.D. Ravi Sachdev Steven J. Sell Compensation Committee Interlocks and Insider Participation No member of our Compensation and Human Capital Committee was a former or current officer or employee of the Company or any of its subsidiaries in Selection of Nominees for Election to the Board Our Corporate Governance Guidelines provide that, subject to the requirements of the CD&R Stockholder Agreement, which
board select board candidates who the Nominating and Governance Committee believes are qualified and suitable to become members of the board consistent with the criteria for selection of new directors adopted from time to time by the board. The Nominating and Governance Committee will consider the following criteria for director qualification: the nominee’s independence, judgment, strength of character, ethics and integrity; the nominee’s business or other relevant experience and skills and knowledge useful to the oversight of the Company’s business; the Company’s commitment to diversity; and whether a nominee has sufficient time to carry out the responsibilities of a director. The Nominating and Governance Committee will consider all additional criteria for independence established by the NYSE or other governing laws and regulations.
In identifying candidates for election to the board of directors, the Nominating and Governance Committee may consider nominees recommended by directors, stockholders, and other sources. The Nominating and Governance Committee reviews each candidate’s qualifications, including whether a candidate possesses any of the specific qualities and skills desirable in certain members of the board of directors. Evaluations of candidates generally involve a review of background materials, internal discussions, and interviews with selected candidates as appropriate. The Nominating and Governance Committee does not have a formal policy with respect to diversity; however, the The Nominating and Governance Committee will consider director candidates proposed by stockholders on the same basis as recommendations from other sources. Any stockholder who wishes to recommend a prospective candidate for the board of directors for consideration by the Nominating and Governance Committee may do so by submitting the name and qualifications of the prospective candidate in writing to the following address: agilon health, inc. c/o Corporate Secretary 6210 E. Highway 290 Suite 450 Austin, Texas 78723. Any such submission should also describe the experience, qualifications, attributes and skills that make the prospective candidate a suitable nominee for the board of directors. Our amended and restated by-laws set forth the requirements for direct nomination by a stockholder of persons for election to the board of directors. In connection with our initial public offering (“IPO”), we and the CD&R Investor entered into the CD&R Stockholder Agreement pursuant to which, among other matters, the CD&R Investor has the right to designate the CD&R Designees, subject to the maintenance of specified ownership requirements. See “Certain Relationships and Related Party Transactions—CD&R Stockholder Agreement.” Communications with the Board Any stockholder or interested party who wishes to communicate with our board of directors as a whole, the independent directors,
The board of directors has designated the Company’s Corporate Secretary as its agent to receive and review written communications addressed to the board of directors, any of its committees, or any board member or group of members. The Corporate Secretary may communicate with the sender for any clarification. In addition, the Corporate Secretary will promptly forward to the Chair of the Audit Committee any communication alleging legal, ethical or compliance issues by management or any other matter deemed by the Corporate Secretary to be potentially material to the Company. As an initial matter, the Corporate Secretary will determine whether the communication is a proper communication for the Risk Oversight Our board of directors as a whole has responsibility for overseeing our risk management. The board of directors exercises this oversight responsibility directly and through its committees. The oversight responsibility of the board of directors and its committees is informed by reports from our management team and from our internal audit department that are designed to provide visibility to the board of directors about the identification and assessment of key short-, intermediate-, and long-term risks and our risk mitigation strategies. The full board of directors has primary responsibility for evaluating strategic and operational risk management, and succession planning. Our Audit Committee has the responsibility for overseeing our major financial and accounting risk exposures and the steps our management has taken to monitor and control these exposures, including policies and procedures for assessing and managing risk. Our Compensation and Human Capital Committee evaluates risks arising from our compensation policies and practices, as more fully described below. Our Compliance and Quality
Committee oversees risks arising from our compliance with regulatory and legal requirements including those relating to Medicare, patient confidentiality and privacy, and other healthcare regulatory matters, and it also oversees enterprise risks such as cybersecurity risk. The chief compliance officer, who reports to the chief legal officer, evaluates and reports findings to the committees and the full board of directors regularly, and no less than quarterly. Our Nominating and Governance Committee reviews risks relating to environmental, social and governance issues. The Audit Committee, Compensation and Human Capital Committee, Compliance and Quality Committee and Nominating and Governance Committee provide reports to the full board of directors regarding these and other matters. Compensation Risk Assessment The Compensation and Human Capital Committee assessed our compensation policies and practices to evaluate whether they create risks that are reasonably likely to have a material adverse effect on the Company. Based on its assessment, the Compensation and Human Capital Committee concluded that the Company’s compensation policies and practices do not create incentives to take risks that are reasonably likely to have a material adverse effect on the Company. We believe we have allocated our compensation among base salary, short-term incentives and long-term equity in such a way as to not encourage excessive risk taking.
and Governance (“ESG”) . Our Approach to ESG At agilon health, we are Our Total Care, Healthier Communities impact strategy articulates We strive to be transparent by communicating through our ESG reporting how we understand, prioritize, and approach the
IMPACT GOVERNANCE & OVERSIGHT Doing business the right way is relevant to many of our priorities: our compliance with federal and state laws, safeguarding patient data, how we treat our people and planet, and the values that define our company. As we continue to bring our Total Care Model Building on
Identifying ESG Risks & Opportunities Our purpose is to empower physicians to transform health care in our communities. As part of this overall purpose, we focus on integrating ESG principles into how we conduct business. We are committed to conducting our business in a safe, environmentally responsible, and sustainable manner that reflects our responsibilities to our stakeholders. We believe that the effective management of ESG issues will help support the sustainability and the long-term growth of our business and create value for our stakeholders. In fiscal years 2021 through 2023, our leadership team, with oversight and approval from the board, developed our impact strategy
We believe that our commitment to ESG is not only the right thing to do but is also essential to our long-term success. By addressing ESG risks and opportunities, we are better positioned to deliver value to our stakeholders and create a healthier future for all.
Advancing our IMPACT Strategy In 2023, our board of directors provided oversight of, and input on, ESG topics through quarterly updates to our Nominating and Governance Committee, which also reviewed and approved our ESG strategy. Additionally, our full board receives an annual ESG update, and ESG topics such as Data Privacy and Security, Human Capital Management and DEIB are managed within their respective committees. We will release our third Impact Report in the first half of 2024, which provides an overview of our ESG approach and highlights. We expect to continue to provide annual updates on our journey and progress. As we bring our Total Care Model to more communities, agilon recognizes the importance of reducing our environmental burden. While we prepare to better measure and manage our footprint, we continue to drive energy efficiency in our data management. In 2022, we migrated our enterprise data platform to an industry-leading cloud provider and innovative data platform that is 3.6 times more efficient than the median of surveyed enterprise data centers in the United States.* The cloud provider has implemented energy-efficient practices in its data centers, including the use of advanced cooling technologies, optimized server configurations, and efficient data center design. These measures contribute to reduced energy consumption and a lower carbon footprint. By investing in the use of this platform, we are leveraging technology that is built and run using energy-efficient practices which, in turn, supports agilon’s energy reduction and environmental impact objectives. Further, our data centers have implemented practices like evaporative cooling and recycled water usage that minimize waste and reduce our carbon footprint. In 2024, we plan to take the important additional step of developing an inventory of our Scopes 1 and 2 emissions for baseline year 2023. We believe that our commitment to ESG is not only the right thing to do but is also essential to our long-term success. By addressing risks and opportunities, we are better positioned to deliver value to our stakeholders and create a healthier future for all. Below are  * Data as reported by Amazon Web Services (AWS) “The Carbon Reduction Opportunity of Moving to AWS by 451 Research”(URL: sustainability.aboutamazon.com/carbon-reduction-aws.pdf)
The following table sets forth certain information concerning our executive officers as of March 31,
2024.
Steven J. Sell’s biography may be found above under
This compensation discussion and analysis provides information about the material elements of compensation that are paid or awarded to, or earned by, our “named executive officers”, also referred to as the “NEOs”, for the
Compensation Philosophy and Objectives We seek to provide compensation and benefit programs that support our business strategies and objectives by attracting, retaining and developing individuals with necessary expertise and experience. Our incentive programs are designed to encourage performance and results that will create value for us and our stockholders while avoiding unnecessary risks. Our executive compensation programs are intended to create a performance culture geared toward exceptional support for our physician partners, creation of shareholder value, and To reward our executives commensurate with their performance, experience and capabilities. To align our executives’ interests with the interests of our shareholders and allow our executives to share in our shareholders’ success. To enable us to attract and retain top executive talent. Determination of Executive Compensation The following section describes the primary roles and responsibilities of those involved in the determination of executive compensation levels, plan designs, and policies.
Compensation and Human Capital Committee The Compensation and Human Capital Committee, which consists entirely of independent directors, is responsible for reviewing and approving the compensation The Compensation and Human Capital Committee meets regularly and works closely with its independent compensation consultant to make decisions related to our executive compensation programs, the compensation of our Chief Executive Officer, and the compensation of our executive officers. As part of the Compensation and Human Capital Committee’s annual process, it evaluates the competitiveness of our compensation programs, the rigor of incentive goal-setting relative to market guidance, the executive pay levels relative to market benchmarks, and the alignment of pay and performance relative to peers.
The full description of the Compensation and Human Capital Committee’s authority and responsibilities is provided in the Compensation and Human Capital Committee Charter, which is available on the Company website. The Compensation and Human Capital Committee consists of Independent Consultant The Compensation and Human Capital Committee has engaged Semler Brossy as its independent consultant. Semler Brossy reports to and is directed by the Compensation and Human Capital Committee, and provides no other services to the Company. During Attended all Compensation and Human Capital Committee meetings; Advised on Reviewed the selection of the peer group of companies used for assessing market compensation levels and practices; Prepared market analysis and external perspective on the competitiveness of the executive compensation programs; Reviewed and Provided summaries and guidance on regulatory and governance trends impacting compensation; Review and assess independent director pay; Prepared an annual risk assessment of our compensation Reviewed compensation-related proxy statement disclosures. In performing these services, Semler Brossy interacted with executive management and attended Compensation and Human Capital Committee meetings. Executive Management
When making decisions on executive compensation, members of management present. Role of Compensation Peer Group In August 2022, the Compensation and Human Capital Committee reviewed our public company peer group for the 2023 fiscal year, taking into account input from Semler Brossy. The peer group includes other U.S.-based companies that trade on the major U.S. exchanges in related industries.
In reviewing our peer group, the Compensation and Human Capital Committee considered a number of factors, including: Comparable size, predominantly measured based on revenue between 0.25x to 4.0x our revenue; Related industries within healthcare, consulting and outsourced services, and technology; Other qualitative business screens (e.g., innovative healthcare businesses or businesses that provide back end-support for physicians); Actual experience in the talent market (companies from which we source and potentially lose executive talent); and Other factors (e.g., excluding companies experiencing financial distress).
Based on this review
2023 Public Company Peer Group
This peer group generally represents companies with similar business dynamics, and those with which we compete for
Elements of Our Executive Compensation Program During our
Base Salary Base salaries are set to attract, retain and reward executive talent.
Annual Incentive Compensation Our annual cash
human capital. For the
We initially approved the
In accordance with our revised budget, we amended the 2023 goals to exclude the results of operations of MDX Hawaii, Inc. (“MDX Hawaii”), a wholly-owned subsidiary, and its related operations, as the disposition of MDX Hawaii was completed on October 31, 2023. The approved amended and restated goals are provided below: Amended Annual Incentive Goals
2021 and 2022 Adjusted EBITDA is a management performance measure that is not a financial measure prepared in accordance with generally accepted accounting principles (“GAAP”) and may not be comparable to Adjusted EBITDA as reported in our Annual Reports on Form 10-K. The 2021 and 2022 Adjusted EBITDA utilized in determining management compensation is calculated as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes from our California dispositions (which was completed during 2021), (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) geography entry costs, (vi) stock-based compensation expense, (vii) severance and related costs, and (viii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis. The results of operations from the February 28, 2023, acquisition of My Personal Health Record Express, Inc. (“mphrX”) have been excluded from the 2021 and 2022 Adjusted EBITDA three-year performance period calculation. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The results of operations from the acquisition of mphrX have been excluded from the 2023 Adjusted EBITDA goals established by our Compensation and Human Capital Committee in the beginning of the year consisted of a threshold Adjusted EBITDA of $1,000,000 (which achievement below this threshold would result in no annual incentive compensation being earned with respect to this metric, but, if achieved, would result in a payout of 50% of target in respect of this metric), a target Adjusted EBITDA of $10,000,000 (which, if achieved, would result in a payout of 100% of target in respect of this metric), and a “stretch” Adjusted EBITDA of $19,000,000 (which, if achieved, would result in a payout of 150% of target in respect of this metric). Adjusted EBITDA was $4,300,000 for the 2022 Fiscal Year. As a result, achievement on this portion of the annual incentive compensation scorecard was 58%.
The existing market platform membership goals established by our Compensation and Human Capital Committee consisted of a threshold of 260,000 individuals enrolled in a Medicare Advantage (“MA”) plan attributed to the primary care physicians (“PCPs”) on our platform (which achievement below this threshold would result in no annual incentive compensation being earned with respect to this metric, but, if achieved, would result in a payout of 50% of target in respect of this metric), a target of 272,000 individuals enrolled in an MA plan attributed to the PCPs on our platform (which, if achieved, would result in a payout of 100% of target in respect of this metric), and a “stretch” threshold of 284,000 individuals enrolled in an MA plan attributed to the PCPs on our platform (which, if achieved, would result in a payout of 150% of target in respect of this metric). For purposes of the 2022 annual cash incentive plan, the number of individuals enrolled in an MA plan that are attributed to the PCPs on our platform grew to 269,500 individuals for the 2022 Fiscal Year. As a result, achievement on this portion of the annual incentive compensation scorecard was 90%.
The platform new market membership goals established by our Compensation and Human Capital Committee consisted of a threshold of 60,000 individuals on our platform (which achievement below this threshold would result in no annual incentive compensation being earned with respect to this metric, but, if achieved, would result in a payout of 50% of target in respect of this metric), a target of 80,000 individuals on our platform (which, if achieved, would result in a payout of 100% of target in respect of this metric), and a “stretch” threshold of 100,000 individuals on our platform (which, if achieved, would result in a payout of 175% of target in respect of this metric). For purposes of the 2022 annual cash incentive plan, the number of new market membership grew to 100,000 individuals for the 2022 Fiscal Year. As a result, achievement on this portion of the annual incentive compensation scorecard was 175%.
The experience goals established by our Compensation and Human Capital Committee consisted of our markets achieving certain “pass” thresholds related to patient and provider experience as measured by net promoter scores and PCP member touchpoints. To achieve thresholdthree-year performance levels of 50% in respect of NPS, 12 of 21 targets for patient and provider surveys must have met the “pass” threshold, which were established for each market based on prior year performance. To achieve the target payout of 100%, 15 of 21
| ** | The market platform membership goals established by our Compensation and Human Capital Committee consisted of enrollment of individuals enrolled in a MA plan attributed to the primary care physicians (“PCPs”) on our platform. |
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| | | EXECUTIVE COMPENSATION |
| The experience goals established by our Compensation and Human Capital Committee consisted of | our markets achieving certain “pass” thresholds related to patient and provider experience as measured by net promoter scores and PCP member touchpoints for high-risk patients. There was a total of 37 opportunities with 19 of those specific to PCP touchpoints and 18 specific to Patient NPS based on a pass/fail score. To qualify for a pass on the PCP touchpoints, a minimum 5% improvement would be required from prior year. To qualify for a pass on the Patient NPS metric, the market would need to maintain a score of 70+ or if the score was below 70, increase by 2 points. |
| **** | The blended rate for chronic care reassessments and acknowledgement rate goals established by our Compensation and Human Capital Committee consisted of reassessment rate goals blended across all markets. |
| ***** | For 2023, the Company introduced a team and culture goal which was comprised of a discretionary bonus component across four categories. The four categories are total company engagement score, DEIB/Diverse slates for Manager and above roles in the US, completion rate of engagement survey action plans, and voluntary attrition/retention. Because this is a discretionary category, the CEO and the Chief People Office, make a recommendation to the Compensation and Human Capital committee for approval relative to this category. The Compensation and Human Capital Committee did not assign a score to this category in light of its decision as noted below to reduce the annual incentive compensation pool payout funding to 50% and not award any bonus to the Chief Executive Officer, and other NEOs, as well as certain other executives who report to the Chief Executive Officer for 2023. |
Executive Compensation
targets for patient and provider surveys must have been met. To achieve the maximum payout of 150%, 18 of 21 targets for patient and provider surveys must have been met. The combined net promoter score and PCP member touchpoint performance was determined across the markets and 14 out of 21 targets were achieved. As a result, achievement on this portion of the annual incentive compensation scorecard was 83%.
Improving clinical outcomes for senior patients in a total care model requires comprehensive assessment of chronic medical conditions. Given the impact that chronic conditions have on the quality of care members on our platform receive and our ability to best optimize care for specific clinical conditions through evidence-basedevidence- based clinical programs, it is imperative that care teams assess the status of each patient’s full medical history to identify active conditions that would benefit from improved clinical management.
The chronic care reassessment rate goals established by our Compensation and Human Capital Committee consisted of reassessment rate goals blended across all markets with threshold achievement of 86% (which achievement below this threshold would result in no annual incentive compensation being earned with respect to this metric, but, if achieved, would result in a payout of 50% of target in respect of this metric), a target chronic reassessment rate of 89% (which, if achieved, would result in a payout of 100% of for this metric), and a “stretch” chronic reassessment rate of 92% (which, if achieved, would result in a payout of 150% of target for this metric). For purposes of the 2022 annual incentive compensation plan, the chronic reassessment rate was 90.5%, resulting in achievement on this portion of the annual incentive compensation scorecard of 125%.
The acknowledgement rate goals established by our Compensation
The Compensation and Human Capital Committee determined thatto reduce the overall company score, and therefore annual incentive compensation pool payout funding, would be at 93%to 50% of the target andtarget. The committee also determined that Mr. Sell would receive 100% of his target annual incentive compensation. Mr. Sell, asthe Chief Executive Officer, was givenand other NEOs, as well as certain other executives who report to the discretion to apply the following multiples reflecting the individual performance goals for each NEO based on their performance during the 2022 Fiscal Year: 95%Chief Executive Officer, would receive a 0% payout for the individual performance goals applicable to Mr. Bensley, 100% for the individual performance goals applicable to Mr. Shaker, 110% for the individual performance goals applicable to Mr. Venkatachaliah and 100% for the individual performance goals applicable to Mr. Desai.
The 2022 annual incentive compensation payable to each of our NEOs is shownprogram (as reflected in the “Summary Compensation Table” following this Compensation Discussion and Analysis underin the “Non-Equity Incentive Plan Compensation” column.
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Executive Compensation
Changes to Our Annual Incentive Compensation Program for 2023
2024
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Executive Compensation
Long-Term Equity Incentives
Our Equity Incentive Plans
Prior to our IPO, we sponsored the agilon health, inc. Stock Incentive Plan (the “Prior Stock Incentive Plan”). We currently sponsor the agilon health, inc. 2021 Omnibus Equity Incentive Plan (the “Equity Incentive Plan”), which was adopted in connection our IPO and which assumed all awards under the Prior Stock Incentive Plan. All awards under these plans were designed to ensure that senior management, including our NEOs, maximize their focus on increasing stockholder value through long-term growth, and these awards constitute a meaningful part of our NEOs’ compensation.
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| | | EXECUTIVE COMPENSATION |
Vehicle | | | Purpose | | | Weighting | | | Vesting |
RSU | | | Provides NEO retention | | | 25% | | | Ratably over four years |
PSU | | | Aligns compensation with company goals to incentivize performance | | | 50% | | | Cliff vest after a three- year performance period |
Stock Options | | | Aligns compensation with shareholder value growth | | | 25% | | | Ratably over four years |
RSUs
In April 2022 each
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Executive Compensation
date. Outstanding RSUs will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors elects to accelerate and cancel such awards in exchange for a payment equal to the price per share offered in the “change in control”. See “Potential Payments Upon Termination or Change-in-Control—Accelerated Vesting of Equity on a Change in Control” for more information regarding the treatment of outstanding RSUs in connection with a change in control.
PSUs
| agilon health 2024 Proxy Statement | | 36 |
| | | EXECUTIVE COMPENSATION |
Changes to Our Long-Term Equity Incentive Program
In March 2023, to further align the interests of our NEOs with those of our shareholders by incentivizing our executives to achieve superior long2021-2023 performance period. The threshold, target, and medium-termmaximum performance and enhance retention incentivesgoals for our NEOs, oureach metric are set forth in the “2021 Plan Design” table below. The Compensation and Human Capital Committee determined that for Fiscal Year 2023, our Long-Term Equity Compensation Program will be revised to change the mix of stock options, RSUs and PSUs such that these awards will be paid as follows: 25% stock options, 25% RSUs and 50% PSUs. Since PSUs vest based on performance against predetermined revenue and Adjusted EBITDA goals throughCompany ended the end of a three-year performance period increasingwith revenue of $9,118 million and 2021 Adjusted EBITDA loss of $71 million, thus resulting in achievement of tracking 130% of target performance and negative 87% of target performance, respectively (or a vesting payout percentage of 200% for revenue and 0% for 2021 Adjusted EBITDA). As a result, the proportion2021 PSU grant paid out at 100% of the target number of PSUs insubject to the award.
Performance Metric | | | Weighting | | | Threshold (50% Payout) | | | Target (100% Payout) | | | Maximum (200% Payout) | | | Actual Achievement | | | Payout (% of target) |
Revenue ($M) | | | 50% | | | $5,784 | | | $7,230 | | | $9,037 | | | $9,118 | | | 200% |
Adjusted EBITDA ($M) | | | 50% | | | $73 | | | $91 | | | $114 | | | ($71) | | | — |
Overall | | | 100% | | | | | | | | | | |
Retirement Benefits
We maintainGrants of Plan-Based Awards Table—Employment Arrangements” above for a 401(k) plan fordescription of the benefitseverance benefits available to our NEOs.
Position | | | Multiple |
Chief Executive Officer | | | 6x Annual Base Salary |
All Other Executive Officers | | | 2x Annual Base Salary |
Non-Employee Directors* | | | 5x Annual Board Cash Retainer |
| * | Excludes CD&R affiliated directors |
| agilon health 2024 Proxy Statement | | 37 |
| | | EXECUTIVE COMPENSATION |
| |
| |
Executive Compensation
Compensation and Human Capital Committee Report
Ravi Sachdevproxy statement.
| ||
| agilon health 2024 Proxy Statement | | 38 |
| Name and Principal Position | Fiscal Year(1) | Salary ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) |
| Steven J. Sell | 2022 | 750,000 | 2,250,017 | 4,500,031 | 523,125 | 16,000 | 8,039,173 |
| Chief Executive Officer and President | 2021 | 750,000 | --- | --- | 506,250 | --- | 1,256,250 |
| 2020(6) | 432,692 | --- | 5,277,000 | 328,893 | --- | 6,038,585 | |
| Timothy Bensley | 2022 | 500,000 | 625,012 | 1,250,024 | 331,313 | --- | 2,706.349 |
| Chief Financial Officer | 2021(7) | 480,769 | 687,470 | 4,311,643 | 336,415 | 4,734 | 5,821,031 |
| Benjamin Shaker | 2022 | 400,000 | 625,012 | 1,250,024 | 279,000 | 36,500 | 2,590,536 |
| Chief Markets Officer | 2021 | 389,808 | 6,624,943 | 625,000 | 304,260 | 13,886 | 7,957,897 |
| Girish Venkatachaliah | 2022 | 350,000 | 500,019 | 1,000,028 | 268,538 | 36,500 | 2,155,085 |
| Chief Technology Officer | 2021(8) | 333,846 | 249,964 | 2,437,052 | 257,442 | 4,734 | 3,283,039 |
| Veeral Desai | 2022 | 375,000 | 750,006 | 1,500,020 | 261,563 | 31,021 | 2,917,609 |
| Chief Strategy and Development Officer | 2021 | 375,000 | 549,976 | 549,992 | 285,244 | 8,019 | 1,768,231 |
Name and Principal Position | | | Fiscal Year | | | Salary ($) | | | Stock Awards ($)(1) | | | Option Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) |
Steven J. Sell Chief Executive Officer and President | | | 2023 | | | 750,000 | | | 3,375,043 | | | 1,125,008 | | | — | | | 16,985 | | | 5,267,036 |
| | 2022 | | | 750,000 | | | 2,250,018 | | | 2,250,014 | | | 523,125 | | | 16,000 | | | 5,789,157 | ||
| | 2021 | | | 750,000 | | | — | | | — | | | 506,250 | | | — | | | 1,256,250 | ||
Timothy Bensley Chief Financial Officer | | | 2023 | | | 500,000 | | | 937,529 | | | 312,510 | | | — | | | — | | | 1,750,039 |
| | 2022 | | | 500,000 | | | 625,012 | | | 625,012 | | | 331,313 | | | — | | | 2,081,337 | ||
| | 2021(5) | | | 480,769 | | | 687,470 | | | 4,311,643 | | | 336,415 | | | 4,734 | | | 5,821,031 | ||
Veeral Desai Chief Strategy and Development Officer | | | 2023 | | | 375,000 | | | 2,250,019 | | | 750,016 | | | — | | | 29,847 | | | 3,404,882 |
| | 2022 | | | 375,000 | | | 750,006 | | | 750,014 | | | 261,563 | | | 22,721 | | | 2,159,304 | ||
| | 2021 | | | 375,000 | | | 549,976 | | | 549,992 | | | 285,244 | | | 8,019 | | | 1,768,231 | ||
Benjamin Shaker Chief Markets Officer | | | 2023 | | | 400,000 | | | 1,875,030 | | | 625,003 | | | — | | | 30,185 | | | 2,930,218 |
| | 2022 | | | 400,000 | | | 625,012 | | | 625,012 | | | 279,000 | | | 28,200 | | | 1,957,224 | ||
| | 2021 | | | 389,808 | | | 6,624,943 | | | 625,000 | | | 304,260 | | | 13,886 | | | 7,957,897 | ||
Girish Venkatachaliah Chief Technology Officer | | | 2023 | | | 350,000 | | | 1,875,030 | | | 625,003 | | | — | | | 30,185 | | | 2,880,218 |
| | 2022 | | | 350,000 | | | 500,020 | | | 500,009 | | | 268,538 | | | 28,200 | | | 1,646,767 | ||
| | 2021(6) | | | 333,846 | | | 249,964 | | | 2,437,052 | | | 257,442 | | | 4,734 | | | 3,283,038 |
| (1) |
Stock Awards.Amounts reported in this column represent the aggregate grant date fair value of RSUs and PSUs granted to our NEOs, computed in accordance with FASB ASC Topic 718. For a discussion of the relevant assumptions used to calculate these amounts, please refer to heading “Stock Based Compensation” under Note 14 to the Consolidated Financial Statements in the Annual Report |
| |
| |
Executive Compensation
| (2) | Option Awards.Amounts reported in this column represent the aggregate grant date fair value of stock options, computed in accordance with FASB ASC Topic 718. For a discussion of the relevant assumptions used to calculate these amounts, please refer to heading “Stock Based Compensation” under Note 14 to the Annual Report |
| (3) | Non-Equity Incentive Plan Compensation.The amounts in this column represent annual incentive compensation earned based on the achievement of pre-established annual financial, operational and individual performance goals during the immediately preceding fiscal year. See “Elements of Our Executive Compensation Program—Annual Cash Incentives” above for more information. |
| (4) | All Other Compensation.Amounts reported in this column for our NEOs in the |
| Mr. Bensley commenced his employment with the Company as of January 11, 2021, and amounts reported for Mr. Bensley in this row reflect that his base salary and non-equity incentive plan compensation were prorated for the 2021 fiscal year. |
| Mr. Venkatachaliah commenced his employment with the Company as of January 13, 2021, and amounts reported for Mr. Venkatachaliah in this row reflect that his base salary and non-equity incentive plan compensation were prorated for the 2021 fiscal year. |
| ||
| agilon health 2024 Proxy Statement | | 39 |
Estimated Possible Payouts | All Other Stock Awards: Number of Shares or Units and Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards(5) | |||||||
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | |||||||
| Steven J. Sell | $281,250 | $562,500 | $843,750 | ||||||||
| 4/14/2022 | 160,486(2) | $23.07 | 2,250,014 | ||||||||
| 4/14/2022 | 48,765(3) | 1,125,009 | |||||||||
| 4/14/2022 | 24,383/48,765/ 97,530(4) | 1,125,009 | |||||||||
| Timothy Bensley | $187,500 | $375,000 | $562,500 | ||||||||
| 4/14/2022 | 44,580(2) | $23.07 | 625,012 | ||||||||
| 4/14/2022 | 13,546(3) | 312,506 | |||||||||
| 4/14/2022 | 6,773/13,546/ 27,092(4) | 312,506 | |||||||||
| Benjamin Shaker | $150,000 | $300,000 | $450,000 | ||||||||
| 4/14/2022 | 44,580(2) | $23.07 | 625,012 | ||||||||
| 4/14/2022 | 13,546(3) | 312,506 | |||||||||
| 4/14/2022 | 6,773/13,546/ 27,092(4) | 312,506 | |||||||||
| Girish Venkatachaliah | $131,250 | $300,000 | $393,750 | ||||||||
| 4/14/2022 | 35,664(2) | $23.07 | 500,009 | ||||||||
| 4/14/2022 | 10,837(3) | 250,010 | |||||||||
| 4/14/2022 | 5,419/10,837/ 21,674(4) | 250,010 | |||||||||
| Veeral Desai | $131,250 | $262,500 | $393,750 | ||||||||
| 4/14/2022 | 53,496(2) | $23.07 | 750,014 | ||||||||
| 4/14/2022 | 16,255(3) | 375,003 | |||||||||
| 4/14/2022 | 8,128/16,255/ 32,510(4) | 375,003 | |||||||||
Name | | | Grant Date | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares or Units(3) (#) | | | All Other Awards: Number of Securities Underlying Options(4) (#) | | | Exercise or Base Price of Option Awards ($/SH) | | | Grant Date Fair Value of Stock and Option Awards(5) ($) | ||||||||||||
| | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | ||||||||||||||||
Steven J. Sell | | | | | 281,250 | | | 562,500 | | | 843,750 | | | | | | | | | | | | | | | ||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | | 68,348 | | | 28.46 | | | 1,125,008 | |||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | 39,530 | | | | | | | 1,125,024 | ||||||||||
| | 4/14/2023 | | | | | | | | | 39,530 | | | 79,059 | | | 158,118 | | | | | | | | | 2,250,019 | ||||||||
Timothy Bensley | | | | | 187,500 | | | 375,000 | | | 562,500 | | | | | | | | | | | | | | | ||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | | 18,986 | | | 28.46 | | | 312,510 | |||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | 10,981 | | | | | | | 312,519 | |||||||||
| | 4/14/2023 | | | | | | | | | 10,981 | | | 21,961 | | | 43,922 | | | | | | | | | 625,010 | ||||||||
Veeral Desai | | | | | 140,625 | | | 281,250 | | | 421,875 | | | | | | | | | | | | | | | ||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | | 45,566 | | | 28.46 | | | 750,016 | |||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | 26,353 | | | | | | | 750,006 | ||||||||||
| | 4/14/2023 | | | | | | | | | 26,353 | | | 52,706 | | | 105,412 | | | | | | | | | 1,500,013 | ||||||||
Benjamin Shaker | | | | | 150,000 | | | 300,000 | | | 450,000 | | | | | | | | | | | | | | | ||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | | 37,971 | | | 28.46 | | | 625,003 | |||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | 21,961 | | | | | | | 625,010 | |||||||||
| | 4/14/2023 | | | | | | | | | 21,961 | | | 43,922 | | | 87,844 | | | | | | | | | 1,250,020 | ||||||||
Girish Venkatachaliah | | | | | 131,250 | | | 262,500 | | | 393,750 | | | | | | | | | | | | | | | ||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | | | 37,971 | | | 28.46 | | | 625,003 | |||||||||
| | 4/14/2023 | | | | | | | | | | | | | | | 21,961 | | | | | | | 625,010 | ||||||||||
| | 4/14/2023 | | | | | | | | | 21,961 | | | 43,922 | | | 87,844 | | | | | | | | | 1,250,020 | ||||||||
| |
| |
Executive Compensation
| Threshold, target and maximum cash payouts available to our NEOs under our annual incentive compensation plan for |
| (2) |
| (3) |
| (4) |
| agilon health 2024 Proxy Statement | | 40 |
| | | EXECUTIVE COMPENSATION |
| (5) | Aggregate grant date fair value of the applicable award, computed in accordance with FASB ASC Topic 718. |
Venkatachaliah.
| |
| |
Executive Compensation
incentive compensation for the fiscal year prior to the year in which Mr. Sell’s employment terminates and (iv) continued medical, dental and vision insurance coverage for 12 months at active employee rates. Any severance payments are conditioned upon, among other things, Mr. Sell’s execution and non-revocation of a release of claims and his continued compliance with applicable restrictive covenants, which include nondisclosure and nondisparagement restrictions for an indefinite time period and restrictions relating to soliciting the Company’s customers and employees for two years following termination of Mr. Sell’s employment with the Company.
| agilon health 2024 Proxy Statement | | 41 |
The employment agreement provides for certain severance benefits. If Mr. Venkatachaliah’s employment is terminated without “cause,” as such term is defined in his employment agreement, he is entitled to receive a cash payment equal to 12 months of his base salary and target annual incentive compensation, payable in equal monthly installments over 12 months. Any severance payments are conditioned, among other things, upon Mr. Venkatachaliah’s execution and non-revocation of a release of claims. Outstanding Equity Awards at Fiscal Year End EXECUTIVE COMPENSATION(i) 23 months of base salary, payable on the Company’s normal payroll dates, (ii) two times his target annual incentive compensation, payable in equal monthly installments over 24 months on the Company’s normal payroll dates, and (iii) continued medical, dental and vision insurance coverage for 18 months at active employee rates. Any severance payments are conditioned, among other things, upon Mr. Desai’s execution and non-revocation of a release of claims.Benjamin ShakerMr. Shaker’s employment agreement does not provide a fixed term and may be terminated at any time by either party. Under his agreement, Mr. Shaker is entitled to an annual base salary of $400,000 and is eligible for payment of annual incentive compensation, with a target amount equal to 75% of his base salary.The employment agreement provides for certain severance benefits. If Mr. Shaker’s employment is terminated without “cause” or Mr. Shaker resigns for “good reason,” as such terms are defined in his employment agreement, he is entitled to receive cash payments equal to (i) 24 months of base salary, payable on the Company’s normal payroll dates and (ii) two times his target annual incentive compensation, payable in equal monthly installments over 24 months ofon the Company’s normal payroll dates. Any severance payments are conditioned, among other things, upon Mr. Shaker’s execution and non-revocation of a release of claims.Girish VenkatachaliahMr. Venkatachaliah’s employment agreement does not provide a fixed term and may be terminated at any time by either party. Under his agreement, Mr. Venkatachaliah is entitled to an annual base salary of $350,000 and is eligible for payment of an annual incentive compensation, , with a target amount equal to 75% of his base salary. 2023 Proxy Statement | 53Executive CompensationVeeral DesaiMr. Desai’s employment agreement does not provide a fixed term and may be terminated at any time by either party. Under his agreement, Mr. Desai is entitled to an annual base salary of $375,000 and is eligible for payment of an annual incentive compensation, with a target amount equal to 75% of his base salary.The employment agreement provides for certain severance benefits. If Mr. Desai’s employment is terminated without “cause” or if he resigns his employment for “good reason,” as such terms are defined in his employment agreement, he is entitled to receive cash payments equal to (i) 23 months of base salary, payable on the Company’s normal payroll dates, (ii) two times his target annual incentive compensation, payable in equal monthly installments over 24 months on the Company’s normal payroll dates, and (iii) continued medical, dental and vision insurance coverage for 18 months at active employee rates. Any severance payments are conditioned, among other things, upon Mr. Desai’s execution and non-revocation of a release of claims. 2023agilon health 2024 Proxy Statement | 5442 EXECUTIVE COMPENSATIONExecutive Compensation2022 Option Awards Stock Awards Name Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)Number of
Securities
Underlying
Unexercised
Options (#)
UnexercisableOption
Exercise
Price ($)Option
Expiration
DateNumber of Shares
or units of Stock
that have not
vested (#)Market Value
of shares or
units of stock
that have not
vested ($)(10)Equity
Incentive plan
awards:
number of
unearned
shares, units
or other rights
that have not
vested (#)Equity
incentive plan
awards: market
or payout value
of unearned
shares, units or
other rights
that have not
vested ($)(10)Steven J. Sell 700,000 1,200,000(2) 4.50 5/22/2030 — — — 1,000,000 1,500,000(2) 10.12 5/22/2030 — — — — 1,000,000 — 4.50 5/22/2030 — — — — — 160,486(3) 23.07 4/14/2032 — — — — — — — — 48,765(8) 787,067 — — — — — — — — 24,383(11) 393,542 Timothy
Bensley25,000 75,000(4) 14.62 1/28/2031 — — — — 25,000 75,000(4) 29.24 1/28/2031 — — — — 54,357 163,074(5) 23.00 4/14/2031 — — — — — — — — 11,209(9) 180,913 — — — — — — — — 7,473(12) 120,614 — 44,580(3) 23.07 4/14/2032 — — — — — — — — 13,546(8) 218,632 — — — — — — — — 6,773(11) 109,316 Benjamin Shaker 327,306 — 1.00 12/30/2026 — — — — 76,851 — 3.00 12/30/2026 — — — — 100,000 — 1.00 4/27/2027 — — — — 100,000 — 3.00 4/27/2027 — — — — 337,500 112,500(6) 3.79 2/9/2029 — — — — 11,566 34,697(5) 23.00 4/14/2031 — — — — — — — — 10,190(9) 164,467 — — — — — — — — 137,228(12) 2,214,860 — 44,580(3) 23.07 4/14/2032 — — — — — — — — 13,546(8) 218,632 — — — — — — — — 6,773(11) 109,316 Girish
Venkatachaliah12,500 37,500(7) 14.62 1/28/2031 — — — — 12,500 37,500(7) 29.24 1/28/2031 — — — — 32,383 97,149(5) 23.00 4/14/2031 — — — — — — — — 4,076(9) 65,787 — — — — — — — — 2,717(12) 43,852 — 35,664(3) 23.07 4/14/2032 — — — — — — — — 10,837(8) 174,909 — — — — — — — — 5,419(11) 87,463 Option Awards Stock AwardsName Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable(1) Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable OptionExercisePrice($) OptionExpirationDate Number of sharesor units of stockthat have notvested(#) Market valueof shares orunits of stockthat have notvested($)(2) Equity incentiveplan awards:number ofunearnedshares, unitsor other rightsthat have notvested(#) Equity incentiveplan awards: marketor payout valueof unearnedshares, units orother rightsthat have notvested($)(2)Steven J. Sell 1,100,000 800,000(3) 4.50 5/22/2030 — — — — 1,500,000 1,000,000(3) 10.12 5/22/2030 — — — — 1,000,000 — 4.50 5/22/2030 — — — — 40,121 120,365(7) 23.07 4/14/2032 — — — — — 68,348(8) 28.46 4/14/2033 — — — — — — — — 36,574(10) 459,004 — — — — — — — — 48,765(12) 612,001 — — — — 39,530(11) 496,102 — — — — — — — — 79,059(13) 992,190Timothy Bensley 50,000 50,000(4) 14.62 1/28/2031 — — — — 50,000 50,000(4) 29.24 1/28/2031 — — — — 108,714 108,717(6) 23.00 4/14/2031 — — — — 11,145 33,435(7) 23.07 4/14/2032 — — — — — 18,986(8) 28.46 4/14/2033 — — — — — — — — 7,473(9) 93,786 — — — — — — 10,160(10) 127,508 — — — — — — — — 13,546(12) 170,002 — — — — 10,981(11) 137,812 — — — — — — — — 21,961(13) 275,611Veeral Desai 57,441 — 1.00 4/27/2027 — — — — 1,510,000 — 3.00 4/27/2027 — — — — 20,354 20,356(6) 23.00 4/14/2031 — — — — 13,374 40,122(7) 23.07 4/14/2032 — — — — — 45,566(8) 28.46 4/14/2033 — — — — — — — — 5,978(9) 75,024 — — — — — — 12,192(10) 153,010 — — — — — — — — 16,255(12) 204,000 — — — — 26,353(11) 330,730 — — — — — — — — 52,706(13) 661,460
| ||
| agilon health 2024 Proxy Statement | | 43 |
| | | EXECUTIVE COMPENSATION |
| | | Option Awards | | | Stock Awards | |||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of shares or units of stock that have not vested (#) | | | Market value of shares or units of stock that have not vested ($)(2) | | | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | | | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(2) |
Benjamin Shaker | | | 257,306 | | | — | | | 1.00 | | | 12/30/2026 | | | — | | | — | | | — | | | — |
| | 301,851 | | | — | | | 3.79 | | | 2/9/2029 | | | — | | | — | | | — | | | — | ||
| | 23,130 | | | 23,132(6) | | | 23.00 | | | 4/14/2031 | | | — | | | — | | | — | | | — | ||
| | 11,145 | | | 33,435(7) | | | 23.07 | | | 4/14/2032 | | | — | | | — | | | — | | | — | ||
| | — | | | 37,971(8) | | | 28.46 | | | 4/14/2033 | | | — | | | — | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | 6,794(9) | | | 85,265 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | 10,160(10) | | | 127,508 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | — | | | — | | | 13,546(12) | | | 170,002 | ||
| | — | | | — | | | — | | | — | | | 21,961(11) | | | 275,611 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | — | | | — | | | 43,922(13) | | | 551,221 | ||
Girish Venkatachaliah | | | 25,000 | | | 25,000(5) | | | 14.62 | | | 1/28/2031 | | | — | | | — | | | — | | | — |
| | 25,000 | | | 25,000(5) | | | 29.24 | | | 1/28/2031 | | | — | | | — | | | — | | | — | ||
| | 64,766 | | | 64,766(6) | | | 23.00 | | | 4/14/2031 | | | — | | | — | | | — | | | — | ||
| | 8,916 | | | 26,748(7) | | | 23.07 | | | 4/14/2032 | | | — | | | — | | | — | | | — | ||
| | — | | | 37,971(8) | | | 28.46 | | | 4/14/2033 | | | — | | | — | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | 2,718(9) | | | 34,111 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | 8,128(10) | | | 102,006 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | — | | | — | | | 10,837(12) | | | 136,004 | ||
| | — | | | — | | | — | | | — | | | 21,961(11) | | | 275,611 | | | — | | | — | ||
| | — | | | — | | | — | | | — | | | — | | | — | | | 43,922(13) | | | 551,221 | ||
Executive Compensation
| Option Awards | Stock Awards | |||||||||||
| Equity Incentive plan awards: | Equity incentive plan awards: market | |||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or units of Stock that have not vested (#) | Market Value of shares or units of stock that have not vested ($)(10) | number of unearned shares, units or other rights that have not vested (#) | or payout value of unearned shares, units or other rights that have not vested ($)(10) | ||||
| Veeral Desai | 57,441 | — | 1.00 | 4/27/2027 | — | — | — | — | ||||
| 1,700,000 | — | 3.00 | 4/27/2027 | — | — | — | — | |||||
| 10,177 | 30,533(5) | 23.00 | 4/14/2031 | — | — | — | — | |||||
| — | — | — | — | 8,967(9) | 144,727 | — | — | |||||
| — | — | — | — | — | — | 5,978(12) | 96,485 | |||||
| — | 53,496(3) | 23.07 | 4/14/2032 | — | — | — | — | |||||
| — | — | — | — | 16,255(8) | 262,356 | — | — | |||||
| — | — | — | — | — | — | 8,128(11) | 131,186 | |||||
| The awards in this column consist of nonqualified stock options granted under our Equity Incentive Plan that have previously vested. |
| (2) |
| (3) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 20% on each anniversary of June 1, 2020, subject to Mr. Sell’s continued employment through each applicable vesting date. |
| (4) |
| (5) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of January 13, 2021, subject to Mr. Venkatachaliah’s continued employment through each applicable vesting date. |
| (6) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of April 14, 2021, subject to each NEO’s continued employment through each applicable vesting date. |
| (7) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of April 14, 2022, subject to each NEO’s continued employment through each applicable vesting date. |
| These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of April 14, |
| |
| |
Executive Compensation
| These awards consist of RSUs granted under our Equity Incentive Plan that will vest 25% on each anniversary of April 14, 2021, subject to each NEO’s continued employment through each applicable vesting date. |
| (10) |
| agilon health 2024 Proxy Statement | | 44 |
| | | EXECUTIVE COMPENSATION |
| (11) | These awards consist of RSUs granted under our Equity Incentive Plan that will vest 25% on |
| The awards in this column consist of PSUs granted under our Equity Incentive Plan that will vest based on performance against predetermined Revenue and Adjusted EBITDA goals at the end of the three-year performance period (December 31, 2024). The amounts in this column assume payout at |
| The awards in this column consist of PSUs granted under our Equity Incentive Plan that will vest based on performance against predetermined Revenue and Adjusted EBITDA goals at the end of the three-year performance period (December 31, |
| Option Awards | Stock Awards | |||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) |
| Steven Sell | — | — | — | — |
| Timothy Bensley | — | — | 3,376 | 86,190 |
| Benjamin Shaker | 372,825 | 6,629,666 | 3,396 | 78,346 |
| Girish Venkatachaliah | — | — | 1,358 | 31,329 |
| Veeral Desai | 1,021,558 | 22,491,411 | 2,989 | 68,956 |
Name | | | Options Awards | | | Stock Awards | ||||||
| | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($)(1) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(2) | ||
Steven Sell | | | — | | | — | | | 12,191 | | | 346,956 |
Timothy Bensley | | | — | | | — | | | 22,067 | | | 390,252 |
Veerai Desai | | | 190,000 | | | 4,704,769 | | | 19,008 | | | 350,748 |
Benjamin Shaker | | | 495,000 | | | 9,648,798 | | | 281,237 | | | 3,791,366 |
Girish Venkatachaliah | | | — | | | — | | | 9,501 | | | 183,944 |
| (1) | Value realized on exercise determined by multiplying the difference between the closing price of our common stock on the date of exercise and the exercise price of the applicable options, multiplied by the number of shares underlying the |
| (2) | Value realized on vesting determined by multiplying the number of shares acquired on vesting by the closing price of our common stock |
| ||
| agilon health 2024 Proxy Statement | | 45 |
| | | EXECUTIVE COMPENSATION |
Executive Compensation
Potential Payments Upon Termination or Change-in-Control
Name | Salary ($) | Target Annual Incentive Compensation ($) | Earned and Unpaid Annual Incentive Compensation ($) | COBRA Benefit Payment ($) | Total ($) |
| Steven Sell | 1,125,000 | 562,500 | 562,500 | 32,067 | 2,282,067 |
| Timothy Bensley | 500,000 | 375,000 | — | — | 875,000 |
| Benjamin Shaker | 800,000 | 600,000 | — | — | 1,400,000 |
| Girish Venkatachaliah | 350,000 | 262,500 | — | — | 612,500 |
| Veeral Desai | 718,750 | 562,500 | — | 43,044 | 1,324,294 |
Name | | | Salary ($) | | | Target Annual Incentive Compensation ($) | | | Earned and Unpaid Annual Incentive Compensation ($) | | | COBRA Benefit Payment ($) | | | Total ($) |
Steven Sell | | | 1,125,000 | | | 562,500 | | | 562,500 | | | 34,251 | | | 2,284,251 |
Timothy Bensley | | | 500,000 | | | 375,000 | | | — | | | — | | | 875,000 |
Veeral Desai | | | 718,750 | | | 562,500 | | | — | | | 45,990 | | | 1,327,240 |
Benjamin Shaker | | | 800,000 | | | 600,000 | | | — | | | — | | | 1,400,000 |
Girish Venkatachaliah | | | 350,000 | | | 262,500 | | | — | | | — | | | 612,500 |
Under the Equity Incentive Plan, a “change in control” is generally defined as the first to occur of the following events:
| ||
| agilon health 2024 Proxy Statement | | 46 |
| | | EXECUTIVE COMPENSATION |
Executive Compensation
The following table assumes a change in control of the Company occurred on December 31, 20222023 and each NEO’s employment was terminated without “cause” or by an NEO for “good reason” as such terms are defined in the Equity Incentive Plan. Based on such assumptions, our NEOs would have received benefits from the accelerated vesting of unvested options, RSUs and PSUs in the following amounts. The values in the table set forth below are based on our closing stock price on the New York Stock Exchange on December 30, 2022,29, 2023, which was $16.14.
| Name | Value of Accelerated Options ($) | Value of RSUs ($) | Value of PSUs ($) |
| Steven Sell | 48,806,000 | 787,067 | 393,542 |
| Timothy Bensley | 152,000 | 459,844 | 229,930 |
| Benjamin Shaker | 14,350,735 | 437,910 | 2,323,531 |
| Girish Venkatachaliah | 76,000 | 262,614 | 131,315 |
| Veeral Desai | 23,207,657 | 455,326 | 227,671 |
Stock Ownership Guidelines
Our board of directors has established stock ownership guidelines$12.55. The values shown in orderthe table below would also apply to further align the long-term interests of our executive officers and non-employee directors with those of our stockholders. Our stock ownership guidelines requireNEOs’ unvested awards if a change in control occurred on that our executive officers and non-employee directors own shares of the Company’s common stock having an aggregate value equal to a multiple of the executive officer’s annual base salary or non-employee director’s annual board cash retainer as follows:
* Excludes CD&R affiliated directors
| |
| |
Executive Compensation
Executives are required to hold 100% of shares acquired as a result of exercise or settlement of compensatory awards (net of any shares withheld for taxes) until these ownership guidelines have been met.
Hedging and Pledging
Our internal Policy on Trading in Securities prohibits hedging or monetization transactions with respect to agilon health securitiesdate and the pledging of agilon health securitiesawards were not assumed or replaced with an alternate award as collateral for a loan by any of our employees, officers, or directors.
described above.
Name | | | Value of Accelerated Options ($) | | | Value of RSUs ($) | | | Value of PSUs ($) | | | Total Value ($) |
Steven Sell | | | 29,420,000 | | | 955,106 | | | 1,604,191 | | | 31,979,297 |
Timothy Bensley | | | — | | | 359,106 | | | 445,613 | | | 804,719 |
Veerai Desai | | | 15,083,944 | | | 558,764 | | | 865,460 | | | 16,508,168 |
Benjamin Shaker | | | 5,616,099 | | | 488,384 | | | 721,223 | | | 6,825,706 |
Girish Venkatachaliah | | | — | | | 411,728 | | | 687,225 | | | 1,098,953 |
Compensation | | | Amount |
Initial Equity Award (for new appointments) | | | $ |
Annual Equity Award | | | $ |
Annual Cash Retainer | | | $70,000 |
Committee Chair Annual Cash Retainer Fee | | | Audit Committee: $25,000 Committee: $15,000 |
| agilon health 2024 Proxy Statement | | 47 |
| | | EXECUTIVE COMPENSATION |
| Name | Fees earned or paid in cash ($) | Stock Awards ($)(1) | Total ($) | ||
| Michelle Gourdine(2) | 64,103 | — | 64,103 | ||
| Sharad Mansukani, M.D. | 85,000 | 160,060 | 245,060 | ||
| Karen McLoughlin | 70,000 | 160,060 | 230,060 | ||
| Clay Richards | 70,000 | 160,060 | 230,060 | ||
| Ravi Sachdev | — | — | — | ||
| Richard J. Schnall | — | — | — | ||
| Jeffrey Schwaneke | 27,391 | 108,283 | 135,674 | ||
| Michael L. Smith(2) | 47,500 | — | 47,500 | ||
| Derek L. Strum | — | — | — | ||
| Ronald A. Williams | — | 160,060 | 160,060 | ||
| J. William Wulf, M.D. | 70,000 | 160,060 | 230,060 |
Name | | | Fees earned or paid in cash ($) | | | Stock Awards ($)(1) | | | Option Awards ($)(2) | | | Total ($) |
Silvana Battaglia | | | 39,808 | | | 150,041 | | | 185,002 | | | 374,851 |
Sharad Mansukani, M.D. | | | 85,000 | | | 160,002 | | | — | | | 245,002 |
Diana L. McKenzie(3) | | | 60,861 | | | 184,570 | | | 160,009 | | | 405,440 |
Karen McLoughlin | | | 132,500 | | | 160,002 | | | — | | | 292,502 |
Clay Richards(4) | | | 33,453 | | | 160,002 | | | — | | | 193,455 |
Ravi Sachdev | | | — | | | — | | | — | | | — |
Richard J. Schnall(4) | | | — | | | — | | | — | | | — |
Jeffrey Schwaneke | | | 70,000 | | | 160,002 | | | — | | | 230,002 |
Derek L. Strum(4) | | | — | | | — | | | — | | | — |
Ron Williams | | | — | | | 160,002 | | | — | | | 160,002 |
William Wulf, M.D. | | | 70,000 | | | 160,002 | | | — | | | 230,002 |
| |
| |
Executive Compensation
| Amounts reported in this column represent the grant date fair value of RSUs issued to |
| (2) |
| (3) |
| (4) | Messrs. Richards, Schnall, and Strum resigned from our board of directors on |
| |
| |
Executive Compensation
CEO Pay Ratio
| agilon health 2024 Proxy Statement | | 48 |
| | | EXECUTIVE COMPENSATION |
| |
| |
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(4) | Average Compensation Actually Paid to Non-PEO NEOs(3)(5) | Value of Initial Fixed $100 Investment Based On: | Net Income (thousands)(7) | Adjusted EBITDA (thousands)(8) | |
| Total Shareholder Return | Peer Group Total Shareholder Return(6) | |||||||
| 2022 | $8,039,173 | ($30,811,711) | $2,592,395 | ($1,404,226) | $70.17 | $118.00 | ($106,864) | $4,251 |
| 2021 | $1,256,250 | $79,887,250 | $4,001,770 | $26,200,762 | $117.39 | $120.35 | ($406,787) | ($38,619) |
Year | | | Summary Compensation Table Total for PEO ($)(1) | | | Compensation Actually Paid to PEO ($)(2)(3) | | | Average Summary Compensation Table Total for Non-PEO NEOs ($)(4) | | | Average Compensation Actually Paid to Non-PEO NEOs ($)(3)(5) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (thousands) ($)(7) | | | Adjusted EBITDA (thousands) ($)(8) | |||
| | Total Shareholder Return ($) | | | Peer Group Total Shareholder Return ($)(6) | | |||||||||||||||||||
2023 | | | 5,267,036 | | | (3,573,313) | | | 2,741,339 | | | 1,550,202 | | | 54.57 | | | 120.43 | | | (262,803) | | | (95,001) |
2022 | | | 5,789,157 | | | (30,811,711) | | | 1,961,158 | | | (1,410,451) | | | 70.17 | | | 118.00 | | | (106,864) | | | 4,251 |
2021 | | | 1,256,250 | | | 79,887,250 | | | 4,001,770 | | | 26,200,762 | | | 117.39 | | | 120.35 | | | (406,787) | | | (38,619) |
| (1) | Amounts reported in this column are the amounts of total compensation reported for Mr. Sell (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. See “Executive Compensation – Summary Compensation Table.” |
| (2) | Amounts reported in this column represent the amount of “compensation actually paid” to Mr. Sell, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Sell during the applicable year. The increases and decreases in these values are attributable largely to the changes in the value of Mr. Sell’s pre-IPO equity compensation awards in light of stock price movements. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Sell’s total compensation for each year to determine the compensation actually paid: |
| |
| |
Executive Compensation
| Year | 2021 | 2022 | | 2021 ($) | | 2022 ($) | | 2023 ($) | ||||
| SCT Total Compensation | $1,256,250 | $8,039,173 | | 1,256,250 | | 5,789,157 | | 5,267,036 | ||||
| Less, value of Stock and Option Awards reported in SCT | — | $6,750,048 | | — | | 4,500,032 | | 4,500,051 | ||||
| Plus, Year-End value of Stock and Option Awards Granted in Fiscal Year that are Unvested and Outstanding | — | $2,812,164 | | — | | 2,812,164 | | 2,011,830 | ||||
| Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that are Outstanding and Unvested | $57,728,000 | ($27,495,000) | | 57,728,000 | | (27,495,000) | | (8,219,253) | ||||
| Plus, FMV of Stock and Option Awards Granted this Year and that Vested this Year | — | — | | — | | — | | — | ||||
| Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that Vested this Year | $20,903,000 | ($7,418,000) | | 20,903,000 | | (7,418,000) | | 1,867,125 | ||||
| Less Prior Year Fair Value of Prior Year Stock and Option Awards that Failed to Vest this Year | — | — | | — | | — | | — | ||||
| Total Adjustments | $78,631,000 | ($38,850,884) | ||||||||||
| Compensation Actually Paid | $79,887,250 | ($30,811,711) | | 79,887,250 | | (30,811,711) | | (3,573,313) | ||||
| (3) | For the portion of “compensation actually paid” that is based on year-end stock prices, |
| agilon health 2024 Proxy Statement | | 49 |
| | | EXECUTIVE COMPENSATION |
| (4) | Amounts reported in this column represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Sell) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Sell) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Messrs. Bensley, Desai, Shaker and Venkatachaliah; (ii) for 2022, Messrs. Bensley, Desai, Shaker and Venkatachaliah and |
| (5) | Amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Sell), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Sell) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation to determine the compensation actually paid: |
Year | | | 2021 ($) | | | 2022 ($) | | | 2023 ($) |
Average SCT Total Compensation | | | 4,001,770 | | | 1,961,158 | | | 2,741,339 |
Less, value of Stock and Option Awards reported in SCT | | | 3,307,199 | | | 1,250,024 | | | 2,312,535 |
Plus, Year-End value of Stock and Option Awards Granted in Fiscal Year that are Unvested and Outstanding | | | 4,366,866 | | | 781,166 | | | 1,068,277 |
Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that are Outstanding and Unvested | | | 780,300 | | | (2,545,313) | | | (300,783) |
Plus, FMV of Stock and Option Awards Granted this Year and that Vested this Year | | | — | | | — | | | — |
Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that Vested this Year | | | 20,359,025 | | | (357,438) | | | 353,904 |
Less Prior Year Fair Value of Prior Year Stock and Option Awards that Failed to Vest this Year | | | — | | | — | | | — |
Compensation Actually Paid | | | 26,200,762 | | | (1,410,451) | | | 1,550,202 |
| |
| |
Executive Compensation
| Year | 2021 | 2022 | |
| Average SCT Total Compensation | $4,001,770 | $2,592,395 | |
| Less, value of Stock and Option Awards reported in SCT | $3,307,199 | $1,875,036 | |
| Plus, Year-End value of Stock and Option Awards Granted in Fiscal Year that are Unvested and Outstanding | $4,366,866 | $781,166 | |
| Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that are Outstanding and Unvested | $780,300 | ($2,545,313) | |
| Plus, FMV of Stock and Option Awards Granted this Year and that Vested this Year | — | — | |
| Plus, Change in Fair Value (from prior year-end) of Prior Year Stock and Option Awards that Vested this Year | $20,359,025 | ($357,438) | |
| Less Prior Year Fair Value of Prior Year Stock and Option Awards that Failed to Vest this Year | — | — | |
| Total Adjustments | $22,198,992 | ($3,996,621) | |
| Compensation Actually Paid | $26,200,762 | ($1,404,226) |
| Represents the peer group TSR (S&P 500 Health Care Index) as reflected in our Annual Report on Form 10-K pursuant to item 201(e) of Regulation S-K for the fiscal year ended December 31, |
| (7) | Reflects “Net Income” in the Company’s Consolidated Financial Statements included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, |
| (8) | Company-selected measure is Adjusted EBITDA, which is a non-GAAP financial measure that is defined as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) geography entry costs, (vi) stock-based compensation expense, (vii) severance and related costs, and (viii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We chose Adjusted EBITDA as our Company-selected measure for evaluating pay versus performance because, among other reasons, it is a performance metric in our annual incentive plan. See “Executive Compensation – Elements of Our Executive Compensation Program – Annual Incentive Compensation.” |
Relationship between Pay and Performance. Below are graphs showing the relationship of “compensation actually paid” to our Chief Executive Officer and other NEOs in 2021, 2022 and 20222023 to (1) the Company’s TSR, (2) the Company’s net income, (3) the Company’s Adjusted EBITDA, and (4) the relationship between TSR of the Company and TSR of the Company’s peer group.“Compensation actually paid”paid (“CAP”), as required under SEC rules, reflects adjusted values to unvested and vested equity awards during the years shown in the table based on year-end stock prices, various accounting valuation assumptions estimated based on applicable GAAP, and projected performance modifiers, but does not reflect actual amounts paid out for those awards. CAP generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals. For a discussion of how our Compensation Committee assessed the Company’s performance and our NEOs’ pay each year, see “Compensation Discussion and Analysis” in this proxy statement and in the proxy statements for 2022 and 2021.
| ||
| agilon health 2024 Proxy Statement | | 50 |
| | | EXECUTIVE COMPENSATION |
Executive Compensation
| |
| |
Executive Compensation
Adjusted EBITDA |
Revenue |
Growth in Membership on Company Platform(1) |
Medical Margin(2) |
| (1) | Measured by reference to the growth in the total members live on the agilon platform between December 31, |
| (2) | Medical margin represents the amount earned from medical services revenue after medical services expenses are deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars. |
| ||
| agilon health 2024 Proxy Statement | | 52 |
| | | EXECUTIVE COMPENSATION |
Plan Category | | | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans |
Equity compensation plans approved by security holders(1)(2) | | | 20,237,365(1) | | | $6.66 | | | 62,227,830(2) |
Equity compensation plans not approved by security holders | | | — | | | $— | | | — |
Total | | | 20,237,365 | | | $6.66 | | | 62,227,830 |
| (1) | Includes 17,255,729 shares of our common stock subject to stock options outstanding under our agilon health 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Plan”) as of December 31, 2023, 1,945,130 shares of our common stock subject to RSUs outstanding under the 2021 Omnibus Plan as of that date, and 1,036,506 shares of our common stock subject to PSUs (assuming the maximum performance levels were attained) outstanding under the 2021 Omnibus Plan as of that date. The number of shares subject to RSUs and PSUs have not been included in calculating the weighted-average exercise price of outstanding options, warrants and rights presented in the above table. No right to acquire shares of our common stock were outstanding under our agilon health Employee Stock Purchase Plan (the “ESPP”) ). As of the date hereof, no shares of our common stock or rights to acquire such shares have been issued under the ESPP, which is not active and has never been used to issue shares. |
| (2) | Of these available shares of our common stock, 54,412,209 were available for award grants under the 2021 Omnibus Plan as of December 31, 2023 and 7,815,621 were available for purchase under the ESPP as of that date. In addition, the 2021 Omnibus Plan provides that the number of shares or our common stock available for issuance thereunder will be increased on the first trading day of each fiscal year in an amount equal to the lesser of (i) 5% of the outstanding shares of our common stock on the last trading day of the immediately preceding fiscal year, or (ii) such other amount as our board of directors may determine. The ESPP provides that the number of shares or our common stock available for issuance thereunder will be increased on the first trading day of each fiscal year in an amount equal to the lesser of (i) 1% of the outstanding shares of our common stock on the last trading day of the immediately preceding fiscal year, or (ii) such other amount as our board of directors may determine. The number of shares available under the 2021 Omnibus Plan as of December 31, 2023 includes shares that have become available pursuant to the annual increase provision through that date. The board of directors has determined that there was no increase to the number of shares available under our ESPP pursuant to its annual increase provision since its adoption. The number of shares available for award grants under the 2021 Omnibus Plan may, subject to the limits of the 2021 Omnibus Plan, be used for any type of award authorized under the 2021 Omnibus Plan, including stock options, stock purchase rights, restricted stock, RSUs, PSUs, performance shares, stock appreciation rights, dividend equivalents, deferred share units, and other stock-based awards. |
| agilon health 2024 Proxy Statement | | 53 |
| | |
The following table sets forth information as of March 31, 20232024 with respect to the ownership of our common stock by:
2024.
| ||
| agilon health 2024 Proxy Statement | | 54 |
| | | Security Ownership of Certain Beneficial Owners and Management |
Name and Address of Beneficial Owner | | | Number of Shares Owned | | | Percent of Shares |
5% Stockholders | | | | | ||
CD&R Vector Holdings, L.P.(1) | | | 100,000,000 | | | 24.3 |
FMR LLC(2) | | | 60,782,728 | | | 14.8 |
Capital World Investors(3) | | | 55,218,496 | | | 13.4 |
Morgan Stanley(4) | | | 43,816,286 | | | 10.7 |
Wellington Management Group(5) | | | 42,510,030 | | | 10.3 |
The Vanguard Group(6) | | | 28,576,261 | | | 7.0 |
Directors and Named Executive Officers | | | | | ||
Ron Williams(7) | | | 3,564,414 | | | * |
Silvana Battaglia | | | — | | | — |
Sharad Mansukani, M.D.(8) | | | 1,885,664 | | | * |
Diana McKenzie(9) | | | 10,364 | | | * |
Karen McLoughlin(10) | | | 21,299 | | | * |
Ravi Sachdev | | | — | | | — |
Jeffrey Schwaneke(11) | | | 35,157 | | | * |
William Wulf, M.D.(12) | | | 449,014 | | | * |
Steven J. Sell(13) | | | 3,774,968 | | | * |
Timothy S. Bensley(14) | | | 364,725 | | | * |
Veeral Desai(15) | | | 1,911,869 | | | * |
Benjamin Shaker(16) | | | 857,723 | | | * |
Girish Venkatachaliah(17) | | | 216,173 | | | * |
All current directors and executive officers as a group (14 persons)(18) | | | 13,100,625 | | | 3.2 |
| Less than one percent. |
Security Ownership of Certain Beneficial Owners and Management
| Name and Address of Beneficial Owner | Number of Shares Owned | Percent of Shares | |
| 5% Stockholders | |||
| CD&R Vector Holdings, L.P.(1) | 194,611,308 | 47.0 | % |
| FMR LLC(2) | 46,671,305 | 11.3 | % |
| Capital World Investors(3) | 42,425,420 | 10.2 | % |
| Morgan Stanley(4) | 37,574,546 | 9.1 | % |
| Wellington Management Group(5) | 22,745,297 | 5.5 | % |
| Directors and Named Executive Officers | |||
| Ron Williams(6) | 3,558,792 | * | |
| Sharad Mansukani, M.D.(7) | 1,880,042 | * | |
| Diana McKenzie | — | * | |
| Karen McLoughlin(8) | 13,051 | * | |
| Clay Richards(9) | 43,408 | * | |
| Jeffrey Schwaneke | — | * | |
| William Wulf, M.D.(10) | 343,392 | * | |
| Ravi Sachdev | — | * | |
| Richard J. Schnall | — | * | |
| Derek L. Strum | — | * | |
| Steven J. Sell(11) | 2,755,212 | * | |
| Timothy S. Bensley(12) | 229,287 | * | |
| Benjamin Shaker(13) | 887,103 | * | |
| Girish Venkatachaliah(14) | 128,631 | * | |
| Veeral Desai(15) | 1,869,278 | * | |
| All current directors and executive officers as a group (17 persons)(16) | 15,080,991 | 3.6 | % |
*Less than one percent.
| (1) | CD&R Vector Holdings, L.P., CD&R Investment Associates IX, Ltd., and CD&R Associates IX, L.P. filed Amendment No. |
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Security Ownership of Certain Beneficial Owners and Management
Dubilier & Rice, LLC (the “Investment Committee”). All members of the Investment Committee expressly disclaim beneficial ownership of the shares directly held by CD&R Vector Holdings, L.P. CD&R Investment Associates IX, Ltd. is managed by two directors, Donald J. Gogel and Nathan K. Sleeper, who may be deemed to share beneficial ownership of the shares of Common Stock directly held by CD&R Vector Holdings, L.P. Such persons expressly disclaim such beneficial ownership.
| FMR LLC filed Amendment No. |
| agilon health 2024 Proxy Statement | | 55 |
| | | Security Ownership of Certain Beneficial Owners and Management |
| (3) | Capital World Investors filed |
| (4) | Morgan Stanley and Morgan Stanley Investment Management, Inc. filed Amendment |
| (5) | Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP filed |
| (6) |
| (7) | Includes |
| Includes |
| Includes |
| (10) | Includes 10,425 of common stock, 5,252 shares that Ms. McLoughlin has the right to acquire through the exercise of stock options and |
| Includes |
| Includes |
| Includes |
| |
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Security Ownership of Certain Beneficial Owners and Management
restricted stock units that will vest on April 14, 2023. Excludes 556,200 shares held by the Sell Family Trust and the Sell Children’s Trust, each an irrevocable trust of which Mr. Sell is neither the trustee nor a beneficiary.
| Includes |
| Includes |
| (16) | Includes 219,817 shares of common stock, 593,432 shares that Mr. Shaker has the right to acquire through the exercise of stock options, |
| Includes |
| (18) |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires executive officers and directors, a company’s chief accounting officer and persons who beneficially own more than 10% of a company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors, the chief accounting officer and beneficial owners with more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of copies of such reports and written representations from our executive officers, directors and the CD&R Investor, we believe that our executive officers, directors, and the CD&R Investor complied with all Section 16(a) filing requirements during 2022, except for the following, each of which was filed late due to administrative error and through no fault of the reporting person: Forms 4 for Bill Wulf, M.D., Karen McLoughlin, Clay Richards, Steven J. Sell, Michael Smith, Ron Williams, Michelle A. Gourdine, M.D. and Sharad Mansukani, M.D., each of which is dated April 20, 2022; Forms 4 for Benjamin Shaker, Girish Venkatachaliah, Timothy S. Bensley, Veeral Desai and Benjamin Kornitzer, M.D., dated April 20, 2022, and for each of which a Form 4 Amendment was filed on September 29, 2022; and a Form 4 for Benjamin Shaker, dated April 21, 2022, for which a Form 4 Amendment was filed on October 21, 2022.
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| agilon health 2024 Proxy Statement | | 56 |
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| agilon health 2024 Proxy Statement | | 57 |
| | | Certain Relationships and Related Party Transactions |
Certain Relationships and Related Party Transactions
For purposes of calculating the number of CD&R Designees that the CD&R Investor is entitled to nominate under the formula outlined above, any fractional amounts would be rounded up to the nearest whole number and the calculation would be made on a pro forma basis after taking into account any increase in the size of our board of directors. If the CD&R Investor beneficially owns less than 5% of the outstanding shares of common stock, the CD&R Investor will no longer be entitled to designate any designees for nomination by the board of directors.
In May 2023, the CD&R Investor disposed of certain shares of our common stock in an underwritten offering and its holdings are now less than 25%. Mr. Williams remains our board chairman.
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Certain Relationships and Related Party Transactions
Indemnification
We are a party to an indemnification agreement (the “Indemnification Agreement”) with the CD&R Investor, Clayton, Dubilier & Rice Fund IX, L.P., Clayton, Dubilier & Rice Fund IX-A, L.P., CD&R Advisor Fund IX, L.P. (together, the “CD&R Funds”) and Clayton, Dubilier & Rice, LLC (“CD&R,&R”), pursuant to which we indemnify the CD&R Investor, the CD&R Funds and CD&R and each of their respective affiliates, successors, assigns, directors, officers, partners, members, employees, agents, advisors, consultants, representatives and controlling persons, against certain liabilities arising out of performance of the consulting agreements and any transaction fee agreements and certain other claims and liabilities, including liabilities arising out of financing arrangements and securities offerings. Our indemnification obligations under the Indemnification Agreements are primary to any similar rights to which any indemnitee may be entitled under any other agreement or document.
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| agilon health 2024 Proxy Statement | | 58 |
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Ravi Sachdev, Steven J. Sell, and William Wulf, M.D.
OUR
Summary of Director Qualifications and Experience | Silvana Battaglia | Sharad Mansukani | Diana McKenzie | Karen McLoughlin | Ravi Sachdev | Jeff Schwaneke | Steven Sell | Ronald Williams | William Wulf |
Technology/Business Processes | • | • | • | ||||||
M&A/Corporate Finance/Capital Markets | • | • | • | • | |||||
Accounting/Finance Expertise/P&L Leadership | • | • | • | • | • | • | |||
Risk Management/Compliance | • | • | • | • | • | • | |||
Environmental/Social | • | • | |||||||
Healthcare Industry Experience | • | • | • | • | • | • | • | • | |
Marketing/Sales/Social Media | • | ||||||||
Cybersecurity/Information Technology | • | • | |||||||
Corporate Governance | • | • | • | • | • | • | • | • | |
Regulatory/Government Relations | • | • | • | • | • | ||||
Compensation/Human Resources | • | • | • | • | • | • |
 | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE CLASS III NOMINEES LISTED ABOVE. |
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| agilon health 2024 Proxy Statement | | 59 |
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The Audit Committee of the board of directors has selected Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 20232024 and recommends that the stockholders vote for ratification of such selection. The Audit Committee has sole and direct responsibility for the appointment, retention, termination, compensation, evaluation, and oversight of the work of any independent registered public accounting firm engaged by the Company. In the event of a negative vote on the ratification, the Audit Committee may reconsider its appointment of Ernst & Young LLP for the year ending December 31, 2023;2024; however, the Audit Committee will consider the outcome of the vote for the year ending December 31, 2023,2024, and when making appointments of our independent registered public accounting firm in future years.
| Year Ended December 31, | ||
| 2022 | 2021 | |
| Audit Fees(1) | $5,615,500 | $2,865,000 |
| Tax Fees(2) | $ — | $ — |
| | | Year Ended December 31, | |||
| | | 2023 | | | 2022 |
Audit Fees(1) | | | $5,473,256 | | | $5,615,500 |
Audit-Related Fees | | | $— | | | $— |
Tax Fees(2) | | | $— | | | $— |
Other Fees | | | $— | | | $— |
| (1) | Audit fees include fees related to the |
| (2) | Includes services rendered in connection with tax planning, compliance and tax return preparation fees. |
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| agilon health 2024 Proxy Statement | | 60 |
| | | PROPOSAL TWO |
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm
Pre-Approval Policies and Procedures
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2023.
| | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024. |
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| agilon health 2024 Proxy Statement | | 61 |
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Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, the Company’s stockholders are entitled to approve, on an advisory basis, the compensation of our named executive officers. This non-binding advisory vote, commonly known as a “Say on Pay” vote, gives our stockholders the opportunity to express their views on our named executive officers’NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officersNEOs and the philosophy, policies and practices described in this proxy statement.
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Proposal 3: Advisory Vote to Approve Executive Compensation
As an advisory vote, Proposal 3 is not binding on our board of directors or the Compensation and Human Capital Committee, will not overrule any decisions made by our board of directors or the Compensation and Human Capital Committee, or require our board of directors or the Compensation and Human Capital Committee to take any specific action. Although the vote is non-binding, our board of directors and the Compensation and Human Capital Committee value the opinions of our stockholders and will carefully consider the outcome of the vote when making future compensation decisions for our named executive officers.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF EXECUTIVE COMPENSATION AS DISCLOSED IN THIS PROXY STATEMENT.
| | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. |
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| agilon health 2024 Proxy Statement | | 62 |
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The board of directors does not know of any matters which will be brought before the Annual Meeting other than those specifically set forth in the notice of meeting. If any other matters are properly introduced at the meeting for consideration, including, among other things, consideration of a motion to adjourn the meeting to another time or place, the individuals named in the Company’s proxy will have discretion to vote in accordance with their best judgment, unless otherwise restricted by law.
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| agilon health 2024 Proxy Statement | | 63 |
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| agilon health 2024 Proxy Statement | | 64 |
