Table of ContentsTABLE OF CONTENTS
SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Filed by the Registrant x | Filed by a Party other than the Registrant ¨ |
Check the appropriate box:
☐
| ¨ | Preliminary Proxy Statement |
☐
| ¨
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒
| x | Definitive Proxy Statement |
☐
| ¨ | Definitive Additional Materials |
☐
| ¨ | Soliciting Material Pursuant to § 240.14a-12 |
(Name of Registrant as Specified in its Charter)
(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☐
| ¨ | Fee paid previously with preliminary materials. |
☐
| ¨ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
TABLE OF CONTENTS
TABLE OF CONTENTS
CEO Message.
TableDear 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 Contentsour team of more than 1,000 talented employees who believe in our mission to be the trusted, long-term partner of community-based physicians enabling them to reimagine the patient experience for older adults and lead the transformation of care delivery in their communities. | | | |
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. | |
TABLE OF CONTENTS
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. | April 14, 2023 | | |
DearOur shareholders are extremely important to all of us at agilon, Shareholder:and we appreciate your support. Please know that the leadership team and I are committed to our fiduciary duty of acting in your best interests. With that being said, it’s my pleasure to invite you to learn more about our vision and progress at our third annual meeting of stockholders, taking place on May 29, 2024. 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. | | | |
Best, | | | |
| | | |
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 Sell
Chief Executive Officer
agilon health, inc.
TABLE OF CONTENTS
Notice of Annual
Meeting
of Stockholders.
To the stockholders of agilon health, Inc.:
On behalf of the board of directors (the “board”),
Iwe cordially invite you to attend the
20232024 Annual Meeting of Stockholders (the “Annual Meeting”) of agilon health, inc. (the “Company”).
|
Date and Time |
|
Wednesday, May 24, 2023 at 12:00 p.m., Eastern Time |
|
|
Location |
|
www.virtualshareholdermeeting.com/AGL2023 |
|
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. |
|
At the meeting, stockholders will consider and vote on the following matters:
1 | 1. | Proposal 1: Election of fourthree Class IIIII directors for a three-year term ending at the 20262027 Annual Meeting of Stockholders;Stockholders |
2 | 2. | 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, 2024 |
3 | 3. | Proposal 3: Advisory vote to approve the compensation paid to the Company’s named executive officers; andofficers |
4 | 4. | Any such other business as may properly come before the Annual Meeting or any
adjournments or postponements thereof.thereof |
The 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 | 4 |
Voting Your Shares
Stockholders 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.
DATE
Wednesday,
May 29, 2024
TIME
12:00 p.m.,
Eastern Time
LOCATION
www.virtualshare holdermeeting.com/ AGL2024
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. |
TABLE OF CONTENTS
Cautionary Language Regarding Forward-Looking Statements.
Statements in this Notice of Annual Meeting of Stockholders and Proxy Statement that are not historical factual statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in several places throughout this Notice of Annual Meeting of Stockholders and Proxy Statement and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, our financial position, action plans, and growth strategies and our environmental, social and governance (“ESG”) initiatives. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and events to differ materially from those projected. Potential factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: our history of net losses and the expectation that our expenses will increase in the future; failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives; success in executing our operating strategies or achieving results consistent with our historical performance; medical expenses incurred on behalf of our members may exceed revenues we receive; our ability to secure contracts with Medicare Advantage (“MA”) payors; our ability to grow new physician partner relationships sufficient to recover startup costs; availability of additional capital, on acceptable terms or at all, to support our business in the future; significant reduction in our membership; transition to a Total Care Model may be challenging for physician partners; public health crises, such as COVID-19, could adversely affect us; inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts; the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners; our ability to hire and retain qualified personnel; our ability to realize the full value of our intangible assets; security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems; our ability to protect the confidentiality of our know-how and other proprietary and internally developed information; reliance on our subsidiaries; ESG issues; reliance on a limited number of key payors; the limited terms of contracts with our payors and our ability to renew them upon expiration; reliance on our payors, physician partners and other providers to operate our business; our ability to obtain accurate and complete diagnosis data; reliance on third-party software, data, infrastructure and bandwidth; consolidation and competition in the healthcare industry; the impact of changes to, and dependence on, federal government healthcare programs; uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures; regulation of the healthcare industry and our physician partners’ ability to comply with such laws and regulations; federal and state investigations, audits and enforcement actions; repayment obligations arising out of payor audits; negative publicity regarding the managed healthcare industry generally; our use, disclosure and processing of personally identifiable information, protected health information (“PHI”), and de-identified data; failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization; lawsuits not covered by insurance; changes in tax laws and regulations, or changes in related judgments or assumptions; our indebtedness and our potential to incur more debt; dependence on our subsidiaries for cash to fund all of our operations and expenses; provisions in our governing documents; ability to achieve a return on investment depends on appreciation in the price of our common stock; and the material weakness in our internal control over financial reporting and our ability to remediate such material weakness. Additionally, forward-looking statements should be considered in conjunction with the cautionary statements contained in the Company’s Annual Report on Form 10-K, including, without limitation, those risks and uncertainties set forth under “Item 1A, Risk Factors,” as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the U.S. Securities and Exchange Commission (“SEC”). Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.
TABLE OF CONTENTS
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.
MEETING INFORMATION
| | | 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 |
WAYS TO VOTE
Stockholders of record holding shares of common stock, par value $0.01 per share (the “Shares”) as of the close of business on April 4, 2024 (the “Record Date”) are entitled to vote at the Annual Meeting. 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.
| | | 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. |
VOTING RECOMMENDATIONS
1 | | | Election of three Class III directors for a three-year term ending at the 2027 Annual Meeting of Stockholders | | | FOR
each nominee | | | |
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 | | | |
3 | | | Advisory vote to approve the compensation paid to the Company’s named executive officers | | | FOR | | | |
|
|
| 2023agilon health 2024 Proxy Statement | 5 | 1 |
TABLE OF CONTENTS
| | | PROXY STATEMENT SUMMARY |
BOARD NOMINEES
The following table sets forth the names and certain other information for the nominees for election as a Class III director as of March 31, 2024.
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 | | | |
OUR VISION
To transform the future of health care in 100+ communities across the country by facilitating exceptional
patient-physician relationships.
OUR MISSION
To be the trusted long-term partner of community-based physicians, enabling them to reimagine the patient experience for older adults and lead the transformation of care delivery in their communities.
OUR PURPOSE
Empowering physicians to transform health care in our communities.
TABLE OF CONTENTS
| | | PROXY STATEMENT SUMMARY |
OUR VALUES
Whether or not you plan | | | Partnership &
Collaboration | | | | | | Quality &
Service | | | | | | Accountability &
Integrity | | | | | | Continuous
Improvement |
| | | Excellence | | | | | | Expertise | | | | | | Innovation | | | | | | |
EXECUTIVE COMPENSATION PROGRAM DESIGN AND GOVERNANCE PRACTICES
Our 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,
following: WHAT
WE DO | Denise 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 value |
WHAT WE
DON’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 |
| agilon health 2024 Proxy Statement | | 3 |
6210 E. Highway 290, Suite 450
Austin, Texas 78723TABLE OF CONTENTS
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.
The proxy statement and annual report to stockholders are available at
www.proxyvote.comor www.investors.agilonhealth.com
In accordance with rules and regulations adopted by the
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 | 8 | 4 |
TABLE OF CONTENTS
Questions and Answers About The Proxy Materials and Annual Meeting
.WHAT ARE THE PROXY MATERIALS?
What are the proxy materials?
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 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.
This proxy statement includes important information that we are required to provide to you under SEC rules and is designed to assist you in voting your shares. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice of Internet Availability. These proxy materials are being made available or distributed to you on or about April
14, 2023.18, 2024. As a stockholder, you are invited to virtually attend the Annual Meeting
of Stockholders and are requested to vote on the proposals described in this proxy statement.
Why did we receive only one copy of the Notice of Internet
Availability and how may
WHY DID WE RECEIVE ONLY ONE COPY OF THE NOTICE OF INTERNET AVAILABILITY AND HOW MAY I
obtain an additional copy?OBTAIN AN ADDITIONAL COPY?
We are sending one copy of our Notice of Internet Availability to stockholders who share the same last name and address, unless they have notified us that they want to continue receiving multiple copies. This practice, known as “householding,” is designed to reduce duplicate mailings and save significant printing and postage costs.
If your household received a single mailing this year and you would like to have additional copies of our Notice of Internet Availability mailed to you or you would like to opt out of this practice for future mailings, we will promptly deliver such additional copies to you if you submit your request to agilon health, inc., c/o Corporate Secretary, 6210 E. Highway 290, Suite 450, Austin, Texas, 78723. You may also contact us in the same manner if you received multiple copies of the Notice of Internet Availability and would prefer to receive a single copy in the future.
All stockholders and beneficial owners may access the proxy materials at
www.proxyvote.com as well as the Company’s website – www.investors.agilonhealth.com.www.investors.agilonhealth.com. If you would like to receive a paper or e-mail copy of our proxy materials, at no charge, please make the request by mail to agilon health, inc., c/o Corporate Secretary, 6210 E. Highway 290, Suite 450, Austin, Texas, 78723, by Internet at
www.proxyvote.com, by telephone to 1-800-579-1639 or by e-mail to sendmaterial@proxyvote.com..
|
|
| 2023 Proxy Statement | 10 |
WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING?
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:
Proposal 1: The election of three nominees named in the proxy statement as Class III directors for a term expiring at the 2027 Annual Meeting of Stockholders.
Proposal 2: The ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024.
Proposal 3: An advisory vote approving the compensation paid to the Company’s named executive officers.
To transact such other business as may properly come before the Annual Meeting or any reconvened meeting following any adjournment or postponement thereof.
agilon health 2024 Proxy Statement | | • | Proposal 1: The election of four nominees named in the proxy statement as Class II directors for a term expiring at the 2026 Annual Meeting of Stockholders.5 |
TABLE OF CONTENTS
| • | Proposal 2: The ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023. | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
| • | Proposal 3: A non-binding advisory vote approving executive compensation. |
| • | To transact such other business as may properly come before the Annual MeetingHOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE ON THESE PROPOSALS? Proposal 1: “FOR” each of Stockholders or any reconvened meeting following any adjournment or postponement thereof. |
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.
Proposal 2: “FOR” the ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024.
Proposal 3: “FOR” the advisory vote
on these proposals? | • | Proposal 1: “FOR” the each of the nominees named in the proxy statement as Class II directors for a term expiring at the 2026 Annual Meeting of Stockholders. |
| • | Proposal 2: “FOR” the ratification of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023. |
| • | Proposal 3: “FOR” the non-binding advisory vote approving executive compensation. |
approving the compensation paid to the Company’s named executive officers.
At the discretion of the proxy holders, either FOR or AGAINST, any other matter or business that may properly come before the Annual Meeting.
As of the date hereof, our board of directors is not aware of any other such matter or business to be transacted at our Annual Meeting. If other matters requiring a vote of the stockholders arise, the persons designated as proxies will vote the shares of common stock of the Company, par value $0.01 per share
(“common stock”), represented by the proxies in accordance with their judgment on those matters.
|
|
| 2023 Proxy Statement | 11 |
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
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.
By granting a proxy, you authorize the persons named in the proxy to represent you and vote your shares at the Annual Meeting. Those persons will also be authorized to vote your shares to adjourn the Annual Meeting from time to time and to vote your shares at any adjournments or postponements of the Annual Meeting.
Registered Stockholders
. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. (“Computershare”), you are considered the stockholder of record with respect to those shares, and the Notice of Internet Availability was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the Company’s representatives listed on its proxy card or to vote in person at the Annual Meeting.
Beneficial Stockholders
. If your shares are held in a stock brokerage account or by a broker, bank, trustee or other nominee, you are considered the beneficial owner of shares held in “street name” and the Notice of Internet Availability was forwarded to you by your broker, bank, trustee or other nominee, who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank, trustee or other nominee how to vote your shares using the methods prescribed by your broker, bank, trustee or other nominee on the voting instruction card provided to you. Beneficial owners are also invited to attend the Annual Meeting.
However, since you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you follow your broker’s, bank’s, trustee’s or other nominee’s procedures for obtaining a legal proxy.
What votes are required to approve each of the proposals?
WHAT VOTES ARE REQUIRED TO APPROVE EACH OF THE PROPOSALS?
Proposal 1, the nominees for Class IIIII director, will be elected by a plurality of the votes cast of the outstanding shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors, which means that the fourthree nominees receiving the highest number of affirmative votes will be elected. In accordance with our amended and restated by-laws, stockholders do not have the right to cumulate their votes for the election of directors.
| agilon health 2024 Proxy Statement | | 6 |
TABLE OF CONTENTS
| | | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
Proposal 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 | 12 |
Questions and Answers About The Proxy Materials and Annual Meeting
year ending December 31, 2023.2024. 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.
Can
CAN I
vote at the Annual Meeting?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 | 13 | 7 |
TABLE OF CONTENTS
| | | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
CAN I VOTE VIA THE INTERNET?
Questions and Answers About The Proxy Materials and Annual Meeting
Can I vote via the Internet?
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.
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?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 do
HOW DO I
change or revoke my proxy?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.
|
|
| 2023 Proxy Statement | 14 |
WHO WILL COUNT AND CERTIFY THE VOTES?
Questions and Answers About The Proxy Materials and Annual Meeting
Who will count and certify the votes?
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.
How can
HOW CAN I
make a proposal or make a nomination for director for next year’s annual meeting?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 been
| agilon health 2024 Proxy Statement | | 8 |
TABLE OF CONTENTS
| | | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING |
provided in a preliminary or definitive proxy
solicitation?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.
WHO PAYS FOR THE COST OF PROXY SOLICITATION?
We will pay the expenses of soliciting proxies in connection with the annual meeting. Proxies may be solicited on our behalf through the mail, in person, by telephone, electronic transmission, or facsimile transmission. In accordance with SEC and New York Stock Exchange (“NYSE”) rules, we will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their expenses of sending proxies and proxy materials as intermediaries to the beneficial owners of our common stock.
What is
WHAT IS THE BOARD MEMBER ANNUAL MEETING ATTENDANCE POLICY?
We do not have a formal policy requiring members of the board
member annual meeting attendance policy?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.
|
|
| 2023agilon health 2024 Proxy Statement | 15 | 9 |
TABLE OF CONTENTS
The Board of Directors and Corporate Governance
.Board Composition
Our board of directors is currently composed of 11nine members. Our amended and restated certificate of incorporation provides for a classified board of directors, with members of each class serving staggered three-year terms. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. We currently have fourthree directors in each of Class I, four directors in Class II and three directors in Class III. The terms of directors in Classes I, II, and III end at the annual meetings in 2025, 2023,2026, and 2024, respectively. During 2023, Clay Richards, Richard J. Schnall and Derek L. Strum departed our board and Silvana Battaglia and Diana McKenzie joined our board.
| Richard J. Schnall
| | Silvana Battaglia
Class I — Expiring 2025 Annual Meeting | | | | | | Class I — Expiring 2025 Annual Meeting |
| | | |
| Class I — Expiring 2025 Annual Meeting | | Clay Richards
Class I — Expiring 2025 Annual Meeting | | | | |
| | | | | | | | | |
| | | Class II — Expiring 20232026 Annual Meeting | | Derek
| | | | Class II — Expiring 20232026 Annual Meeting |
| | | |
| Diana L. McKenzie
Karen McLoughlin
Class II — Expiring 20232026 Annual Meeting | | Karen McLoughlin
Class II — Expiring 2023 Annual Meeting | | | | |
| | | | | | | | | |
| | | Class III — Expiring 2024 Annual Meeting | | | | | | Class III — Expiring 2024 Annual Meeting |
| | | |
| Class III — Expiring 2024 Annual Meeting | | | | | | |
* Chairman of the board of directors.
| Chairman of the board of directors. |
|
|
| 2023agilon health 2024 Proxy Statement | 17 | 10 |
TABLE OF CONTENTS
| | | 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.”
The number of members on our board of directors may be fixed by resolution adopted from time to time by the board of directors. Subject to the CD&R Stockholder Agreement, any vacancies or newly created directorships may be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director. Each director shall hold office until their successor has been duly elected and qualified, or until their earlier death, resignation or removal.
With respect to any vacancy of a CD&R Designee, the CD&R Investor will have the right to designate a new director for election by a majority of the remaining directors then in office.
At each annual meeting of stockholders, the successors of the directors whose term expires at that meeting are elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. The board of directors is therefore asking you to elect the
fourthree nominees for director whose term expires at the Annual Meeting.
Ron Williams, Derek L. Strum, Karen McLoughlinRavi Sachdev, Steven J. Sell and
Diana McKenzie,William Wulf, M.D., our Class
IIIII directors, have been nominated for reelection at the Annual Meeting. See “Proposal 1—Election of Directors” below.
Set forth below is biographical information as well as background information relating to each nominee’s and continuing director’s business experience, qualifications, attributes and skills and why the board of directors and Nominating and Governance Committee believe each individual is a valuable member of the board of directors. The persons who have been nominated for election and are to be voted upon at the Annual Meeting are listed first, with continuing directors following thereafter. The respective age of each individual below is as of March 31, 2023.2024.
|
|
| 2023agilon health 2024 Proxy Statement | 18 | 11 |
TABLE OF CONTENTS
| | | 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
Class
II — Directors Whose Term Expires in 2023Mr. Ron Williams
Age 73
Director of the Company since 2017
| | Ron Williams is a co-founder of agilon health and has served as a director and chairman of the board of agilon health since 2017. Mr. Williams also is chairman and CEO of RW2 Enterprises and serves as an operating advisor to CD&R. Mr. Williams serves on the board of directors of The Boeing Company and Warby Parker and served on the Board of The American Express Company from January 2007 to April 2022, Johnson & Johnson from June 2011 to April 2022 and Envision Healthcare from May 2011 to October 2017. Mr. Williams served as the CEO and Chairman of Aetna Inc. from February 2006 and October 2006 to December 2010 and April 2011, respectively. Mr. Williams also serves as Chairman of The Conference Board and the Peterson Institute for International Economics and served as a director of NAF. Mr. Williams received his B.A. from Roosevelt University and holds an M.S. in Management from MIT Sloan School of Management. We believe Mr. Williams is a valuable member of our board because of his experience as an executive at a large healthcare company and because of his experience on other healthcare companies’ boards. |
Mr. Derek L. Strum
Age 45
Director of the Company since 2017
| | Derek L. Strum has served as a director of agilon health since 2017. Mr. Strum also serves as a partner at CD&R, and on the board of directors of Carestream Dental, Cynosure, Digestive Disease Research Foundation, and Drive DeVilbiss Healthcare. Previously, Mr. Strum worked in the investment banking division of Morgan Stanley from 2000 to 2003, and at York Capital Management, a multi-strategy investment firm, during the summer of 2006. Mr. Strum received his B.A. from Emory University and holds an MBA from Columbia Business School. We believe Mr. Strum is a valuable member of our board because of his financial and investing experience and his experience on other healthcare companies’ boards. |
Ms. Diana L. McKenzie
Age 58
Director of the Company since 2023
| | Diana L. McKenzie has served as a director of agilon health since February 2023. Ms. McKenzie is a technology advisor, board member, and former Chief Information Officer with over thirty years of leadership experience gained from growing, scaling, and transforming global businesses in the Life Sciences and Software Industry with revenues ranging from $3 billion to $20 billion. Ms. McKenzie served as Workday’s first Chief Information Officer from 2016 to 2019. Before Workday, Ms. McKenzie served in multiple technology leadership roles at Amgen, Inc. from 2004-2016, including the role of Chief Information Officer. Prior to joining Amgen, she served in various technology leadership roles from 1987 to 2004 at Eli Lilly and Company. Ms. McKenzie serves on MetLife, Inc., Vertex Pharmaceuticals, and Paradox boards and as a Special Advisor to Brighton Park Capital. She received her B.S. degree from Purdue University in 1986. |
|
|
| 2023 Proxy Statement | 19 |
The Board of Directors and Corporate Governance
Ms. Karen McLoughlin
Age 58
Director of the Company since 2021
| | Karen McLoughlin has served as a director of agilon health since July 2021. In addition to her role as director of agilon health, Ms. McLoughlin serves on the board of directors of Best Buy Co., Inc. as a member of the audit committee and chair of the finance and investment policy committee. Ms. McLoughlin also serves as a Sr. Advisor to McKinsey & Co. Previously, Ms. McLoughlin was the Chief Financial Officer of Cognizant Technology Solutions from 2012 to 2020. Prior to joining Cognizant Technology Solutions in 2003, Ms. McLoughlin served in financial roles for Spherion from 1997 to 2003, Ryder Systems, Inc. from 1994 to 1997, and Price Waterhouse (which is now known as PricewaterhouseCoopers) from 1988 to 1994. Ms. McLoughlin received her B.A. from Wellesley College and her MBA from Columbia University. 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. |
|
|
| 2023 Proxy Statement | 20 |
The Board of Directors and Corporate Governance
Continuing Members of the Board of Directors
Class IIII — Nominees Whose Term Expires in 2025
2024Mr. Richard J. Schnall
Age 53
Ravi Sachdev
Age: 47
Director of the Company sincesince: 2017
| | | Ravi SachdevRichard J. Schnall has served as a director of agilon health since 2017.2017 and as Vice Chairman since January 2021. Mr. SchnallSachdev also serves as co-Presidenta director of Covetrus, Inc., Steve Madden, Inc., Millenium Physician Group, apree health and Gentiva. Mr. Sachdev has served as a Partner of CD&R andsince June 2015, focusing on the boardhealthcare sector. From November 2010 to May 2015, Mr. Sachdev was a Managing Director and Co-Head of directors of Carestream Dental. Mr. Schnall previously served on the board of directors of US Foods and Envision Healthcare. Mr. Schnall worked in the investment banking divisions of Smith BarneyHealthcare Services at J.P. Morgan Chase & Co. and Donaldson, Lufkin & JenretteMr. Sachdev received his B.A. from 1992 to 1996. Mr. Schnall is a graduate of the University of Pennsylvania’s Wharton School and holds an MBA from Harvard Business School. Michigan.
We believe Mr. SchnallSachdev is a valuable member of our board because of his extensive experience with health-relatedour business, the healthcare industry generally and other companies, as well as his strong financial and investing experience.capital markets. |
Dr. Sharad
Mansukani, M.D.
Age 53
| | | |
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, sinceMr. Sell serves as an advisor to several early-stage healthcare companies. Mr. Sell served as President, Chief Executive Officer and Chairman of Health Net, from March 2016 to June 2019 and President, Western Region of Health Net, from November 2008 to March 2016. Mr. Sell received his B.A. from Swarthmore College and holds an MBA from the Stanford Graduate School of Business.
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. |
| | | |
William Wulf, M.D.
Age: 64
Director since: 2017
| | | William Wulf, M.D. Sharad Mansukani, M.D.has served as a director since 2017. In addition to his role as director of agilon health, Dr. Wulf was formerly the Chief Executive Officer of Central Ohio Primary Care (“COPC”). COPC is an agilon group partner. Dr Wulf was a founding partner of COPC in 1996 and assumed the role of Chief Executive Officer in 2013 after 25 years as a practicing Internist and COPC Corporate Medical Director. Dr Wulf has also served as an advisor for multiple payers including Anthem, Aetna Inc. and United Healthcare. Dr Wulf has served as board chair of America’s Physician Groups and is a director for apree health. Dr Wulf received his B.S. from The Ohio State University and his M.D. from the Medical College of Ohio.
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. |
| | | |
| agilon health 2024 Proxy Statement | | 12 |
TABLE OF CONTENTS
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Continuing Members of the Board of Directors
Class I — Directors Whose Term Expires in 2025
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. |
| | | |
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. |
| | | |
|
|
| 2023agilon health 2024 Proxy Statement | 21 | 13 |
TABLE OF CONTENTS
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
Mr.
Jeffrey A. SchwanekeAge 47
Age: 48
Director of the Company sincesince: 2022
| | | Jeffrey Schwaneke has served as a director of agilon health since 2022. Mr. Schwaneke served as the Executive Vice President of Health Care Enterprises for Centene Corporation from June to September 2021. From March 2016 through May of 2021 Mr. Schwaneke was the Executive Vice President, Chief Financial Officer and Treasurer of Centene Corporation. Mr. Schwaneke joined Centene Corporation in July 2008 as Senior Vice President, Corporate Controller and Chief Accounting Officer. Prior to joining Centene, Mr. Schwaneke served as the Assistant Controller and then as Chief Accounting Officer of Novelis, Inc. from 2006 through 2008. Mr. Schwaneke received a degree in Accounting from the University of Missouri and is a CPA.
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. |
Mr. Clay Richards
Age 48
| | | |
| agilon health 2024 Proxy Statement | | 14 |
TABLE OF CONTENTS
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Class II — Directors Whose Term Expires in 2026
Diana L. McKenzie
Age: 59
Director of the Company since 2021 since: 2023 | | | Diana L. McKenzieClay Richards has served as a director since February 2023. Ms. McKenzie is a technology advisor, board member, and former Chief Information Officer with over thirty years of agilon healthleadership experience gained from growing, scaling, and transforming global businesses in the Life Sciences and Software Industry with revenues ranging from $3 billion to $20 billion. Ms. McKenzie served as Workday Inc.’s first Chief Information Officer from 2016 to 2019. Before Workday, Ms. McKenzie served in multiple technology leadership roles at Amgen, Inc. from 2004-2016, including the role of Chief Information Officer. Prior to joining Amgen, she served in various technology leadership roles from 1987 to 2004 at Eli Lilly and Company. Ms. McKenzie serves on MetLife, Inc., Vertex Pharmaceuticals, and Paradox boards of directors and as a Special Advisor to Brighton Park Capital. She received her B.S. degree from Purdue University in 1986.
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. |
| | | |
Karen McLoughlin
Age: 59
Director since: 2021 | | | Karen McLoughlin has served as a director since JanuaryJuly 2021. In addition to hisher role as director of agilon health,our Company, Ms. McLoughlin serves on the board of directors of Best Buy Co., Inc. as a member of the audit committee and chair of the finance and investment policy committee. Ms. McLoughlin also serves as a Senior Advisor to McKinsey & Co. Previously, Ms. McLoughlin was the Chief Financial Officer of Cognizant Technology Solutions from 2012 to 2020. Prior to joining Cognizant Technology Solutions in 2003, Ms. McLoughlin served in financial roles for Spherion from 1997 to 2003, Ryder Systems, Inc. from 1994 to 1997, and Price Waterhouse (which is now known as PricewaterhouseCoopers) from 1988 to 1994. Ms. McLoughlin received her B.A. from Wellesley College and her MBA from Columbia University.
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. |
| | | |
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. RichardsWilliams also is chairman and Chief Executive Officer of RW2 Enterprises and serves as an operating advisor to CD&R. Mr. Richards also served as co-founder and chief executive officer of naviHealth, Inc. from 2012 to December 2022. Prior to founding naviHealth, Inc., Mr. Richards served in executive roles at Healthways, Inc. Mr. Richards alsoWilliams serves on the board of directors of CareBridge Health, Herself HealthThe Boeing Company and Truxton Trust as well as several non-profit organizationsWarby Parker and previously served on the Nashville Health Care Council Board of Directors.The American Express Company from January 2007 to April 2022, Johnson & Johnson from June 2011 to April 2022 and Envision Healthcare from May 2011 to October 2017. Mr. RichardsWilliams served as the Chief Executive Officer and Chairman of Aetna Inc. from February 2006 and October 2006 to December 2010 and April 2011, respectively. Mr. Williams also serves as Chairman of The Conference Board and the Peterson Institute for International Economics and served as a director of NAF. Mr. Williams received a B.S.his B.A. from Washington and LeeRoosevelt University and his J.D.holds an M.S. in Management from the University of MississippiMIT Sloan School of Law. Management.
We believe Mr. RichardsWilliams is a valuable member of our board because of his experience as a founder and executive at other healthcare companies. |
|
|
| 2023 Proxy Statement | 22 |
The Board of Directors and Corporate Governance
Class III — Directors Whose Term Expires in 2024
Mr. Ravi Sachdev
Age 46
Director of the Company since 2017
| | Ravi Sachdev has served as a director of agilon health since 2017 and as Vice Chairman since January 2021. Mr. Sachdev also serves as a director of Covetrus, Inc., Steve Madden, Inc., Millenium Physician Group, apree health and Gentiva. Mr. Sachdev has served as a Partner of CD&R since June 2015, focusing on the healthcare sector. From November 2010 to May 2015, Mr. Sachdev was a Managing Director and Co-Head of Healthcare Services at J.P. Morgan Chase & Co. Mr. Sachdev received his B.A. from the University of Michigan. We believe Mr. Sachdev is a valuable member of our board because of his extensive experience with our business, the healthcare industry generally and capital markets. |
Mr. Steven J. Sell
Age 56
Director of the Company 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 agilon health, Mr. Sell also serves as an advisor to several early-stage healthcare companies. Mr. Sell served as President, CEO and Chairman of Health Net from March 2016 to June 2019 and President, Western Region of Health Net from November 2008 to March 2016. Mr. Sell received his B.A. from Swarthmore College and holds an MBA from the Stanford Graduate School of Business. 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. |
Dr. William Wulf, M.D.
Age 63
Director of the Company since 2017
| | William Wulf, M.D. has served as a director of agilon health since 2017. In addition to his role as director of agilon health, Dr. Wulf was formerly the CEO of Central Ohio Primary Care (“COPC”). COPC is an agilon group partner. Dr Wulf was a founding partner of COPC in 1996 and assumed the role of CEO in 2013 after 25 years as a practicing Internist and COPC Corporate Medical Director. Dr Wulf has also served as an advisor for multiple payers including Anthem, Aetna and United Healthcare. Dr Wulf has served as board chair of America’s Physician Groups and is a director for apree health. Dr Wulf received his B.S. from The Ohio State University and his M.D. from the Medical College of Ohio. 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 grouplarge healthcare company and because of his experience as an advisor for multiple payors.on other healthcare companies’ boards. |
| | | |
|
|
| 2023agilon health 2024 Proxy Statement | 23 | 15 |
TABLE OF CONTENTS
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
The Board of Directors and Corporate Governance
Director Independence
Our board of directors has determined, after considering all of the relevant facts and circumstances, that
Ms. Battaglia, Dr. Mansukani,
Ms. McKenzie, Ms. McLoughlin, Mr. Schwaneke and
Ms. McKenzieDr. Wulf are “independent” as defined under NYSE and the Exchange Act rules and regulations. This means that none of the independent directors has any direct or indirect material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us.
Board Leadership Structure
Our board of directors is led by our non-executive
Chairman,chairman, Mr. Williams, a CD&R Designee. The
CD&R Stockholders Agreement provides that a CD&R Designee will serve as our
Chairmanchairman of the board of directors as long as the CD&R Investor beneficially owns 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. As stated in our Corporate Governance Guidelines, the board
of directors has no policy with respect to the separation of the offices of
Chairmanchairman of the board and
CEO.Chief Executive Officer. The board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the
Chairmanchairman and
CEOChief Executive Officer in any way that is in the best interests of the Company at a given point in time. The board believes this governance structure currently
is appropriate for the Company because it promotes a balance between the board’s independent authority to oversee our business and the
CEOChief Executive Officer and his management team who manage the business on a day-to-day basis. If the board chooses to combine the offices of
Chairmanchairman and
CEOChief Executive Officer in the future, a lead director will be appointed annually by the independent directors. The board expects to periodically review its leadership structure to ensure that it continues to meet our needs.
Meetings of the Board of Directors and Attendance at the Annual Meeting
Our board of directors held
6seven meetings during the year ended December 31,
2022.2023. Each of our directors attended at least 75% of the total number of meetings of the board and any committees of which he or she was a member.
AllTwo directors who served at the time of our
20222023 annual meeting of stockholders attended that meeting.
Corporate Governance Guidelines
Our board of directors has adopted Corporate Governance Guidelines to address significant corporate governance
issues.matters. A copy of these guidelines is available without charge at
https://investors.agilonhealth.com/governance/governance-documents/default.aspxdefault.aspx.. These guidelines provide a framework for our corporate governance initiatives and cover topics including, but not limited to, director qualification and responsibilities, board composition, director compensation, and management and succession planning. The Board and Nominating and Governance Committee are responsible for overseeing and reviewing the guidelines and reporting and recommending to our board of directors any changes to the guidelines.
|
|
| 2023 Proxy Statement | 24 |
The Board of Directors and Corporate Governance
Code of Conduct and Code of Financial Ethics
We have a Code of Conduct that applies to all of our officers, employees, and directors and a Code of Financial Ethics that applies to our Chief Executive Officer, Chief Financial Officer and corporate officers with financial and accounting responsibilities, including the Chief Accounting Officer and any other person performing similar tasks or functions. The Code of Financial EthicsConduct and the Code of ConductFinancial Ethics each address matters such as conflicts of interest, confidentiality, business practices, and compliance with laws and regulations. The Code of Financial EthicsConduct and the Code of ConductFinancial Ethics are available without charge at https://investors.agilonhealth.com/governance/governance-documents/default.aspx.
| agilon health 2024 Proxy Statement | | 16 |
TABLE OF CONTENTS
| | | THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Our board of directors maintains an Audit Committee, a Compensation and Human Capital Committee, a Nominating and Governance Committee, and a Compliance and Quality Committee. Below is a brief description of our committees. The following table shows the current members of each committee and the number of meetings held during 2022. Following the completion of the sale of shares of our common stock by the CD&R Investor on August 11, 2022, we ceased to be a “controlled company” within the meaning of the NYSE corporate governance standards2023.
2023 Adjusted EBITDA is a management performance measure that is not a financial measure prepared in accordance with
generally accepted accounting principles. As describedGAAP and may not be comparable to Adjusted EBITDA as reported in
Item 7 - Management’s Discussion and Analysis of our
Financial Condition and Results of Operations, in the Company’s Annual
ReportReports on Form
10-K for the year ended December 31, 2022 (the “Annual Report”), we define10-K. The 2023 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, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v)
geography entry costs, (vi) stock-based compensation expense,
(vii)(vi) severance and related costs, and
(viii)(vii) 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 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
period calculation. **
| 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. |
|
|
| 2023agilon health 2024 Proxy Statement | 43 | 34 |
TABLE OF CONTENTS
Table***
| The experience goals established by our Compensation and Human Capital Committee consisted of Contents | 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%.
Value-based care and improved clinical outcomes for our members depend on physician engagement and team-based care. One critical measure of physician engagement and team-based effectiveness is how frequently a physician acknowledges peer-to-peer clinical information that is designed to improve care quality including diagnostic accuracy, comprehensiveness, optimization of medical management, and targeted high value clinical programs.
The acknowledgement rate goals established by our Compensation
Although the Company performed at, or above, target on the non-financial metrics of Growth, Experience, and
Human Capital Committee consistedQuality, the Company missed the 2023 Adjusted EBITDA threshold and overall Company performance fell short of
an acknowledgement rate goal blended across all markets with threshold achievement of 80% (which achievement below this threshold wouldexpectations. As a 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), an acknowledgement rate goal of 85% (which, if achieved, would result in a payout of 100% of for this metric), and a “stretch” acknowledgement rate goal of 90% (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 acknowledgement rate of was 80.5%, resulting in achievement on this portion of the annual incentive compensation scorecard of 55%.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.
|
|
| 2023 Proxy Statement | 44 |
column).
Executive Compensation
Changes to Our Annual Incentive Compensation Program for 2023
2024
In March
2023,2024, as further evidence of our comprehensive commitment to
promoting environmental, social and governance initiatives throughout our organization and for our physician partners, members and the communities we serve, our Compensation and Human Capital Committee determined
that for Fiscal Year 2023,to modify our Annual Incentive Compensation Program
will include an additional metric based onfor 2024 to further emphasize our
NEO’s achievement of goals relatedfinancial commitment to our
team and culture engagement plan, leadership development and our diversity, equity and inclusion priorities. With the addition of this important metric, 2023shareholders. The 2024 annual incentive compensation
payout achievementprogram will be weighted as follows: Adjusted EBITDA goal
will increase from 29%
to 55%; platform membership growth goals
29%will be reduced from 14.5% to 5% for existing MA membership and new growth will be reduced from 14.5% to 10%; experience score goals
will be reduced from 18%
to10%; chronic care reassessment and acknowledgement rate goals
will be reduced from 13%
to 10%;and team and culture goals
will be reduced from 11%
to 10%.
Additionally, the 2024 program will include a +/- 15% payout modifier for Medical Margin, which we define as medical services revenue after medical services expenses are deducted. Note that medical services expenses represent costs incurred for medical services provided to patients being managed by our physician partners. We believe these annual incentive compensation metrics
will further
incentivize our NEOsemphasize profitability in addition to
achieve short-termthe operational goals
in a way that we believe that will benefit the company, our shareholders and other key stakeholders.
|
|
| 2023 Proxy Statement | 45 |
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.
EQUITY GRANT POLICY
The Equity Incentive Plan is administered by our Compensation and Human Capital Committee has adopted an equity grant policy pursuant to which has discretion, within the parametersCommittee reviews and approves individual grants for the NEOs, as well as the total number of shares covered by, and the vesting and other terms of, each grant. The annual equity grants typically are reviewed and approved at the Committee’s regular meeting date in April. The grant date for the annual equity grants is the date of the Equity Incentive Plan,Committee meeting at which they are approved. Administration of the equity awards is managed by the Committee’s human resources group with specific instructions related to determine the recipients, amounts and termstiming of awards.grants given by the Committee.
| agilon health 2024 Proxy Statement | | 35 |
TABLE OF CONTENTS
2023 FISCAL YEAR AWARDS
During the
20222023 Fiscal Year, we granted stock options, time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) under
theour 2021 Omnibus Equity Incentive Plan
(the “Equity Incentive Plan”) to each of our NEOs. These awards are described in further detail below and in the “Grants of Plan-Based Awards at Fiscal Year
2022”2023” table.
In connection withOur annual equity grants for the 2023 Fiscal Year consisted of 25% stock options, 25% RSUs, and 50% PSUs (as each award is valued based the fair value of the award on the date of grant as determined for purposes of our
IPO, ourfinancial reporting). We increased the weighting of PSUs from 25% to 50% of the total grant to further emphasize achievement of long-term performance goals the Compensation and Human Capital Committee
determined that, as a general matter (subjectconsiders important to
exceptions and changes in their discretion), annual executive equity grants will consistthe success of
50% stock options, 25% RSUs and 25% PSUs. As discussed above, weour Company. We believe that these equity awards are a critical and appropriate element of the total compensation package for our NEOs and align the interests of our NEOs with those of our stockholders and create strong retention incentives for our valued executives.
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 |
Each of our NEOs was granted stock options in April
of 2022.2023. Since our NEOs receive value from stock options only if our stock price appreciates relative to
the exerciseour stock price
established at the time of grant, stock options create incentives for our executives to achieve share price appreciation that will benefit shareholders. These stock options vest in four equal annual
installments.installments, subject to the NEO’s continuous employment through the applicable vesting date. The exercise price of each outstanding stock option is set forth in the “Exercise Price of Option Awards” column of the “Grants of Plan-Based Awards for Fiscal Year
2022”2023” table. All stock options expire
no later than ten years after the date of grant. Outstanding options 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” minus the stock option’s exercise price. 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 stock options in connection with a change in control.
RSUs
In April 2022 each
RSUs
Each of our NEOs was granted RSUs
under the Equity Incentive Plan.in April 2023. RSU awards create incentives for our NEOs to achieve long-term share price appreciation that will benefit shareholders as well as serve to retain our executives over the
long term.vesting period. These awards vest in four equal annual installments, subject to the NEO’s continuous employment
onthrough the applicable vesting
|
|
| 2023 Proxy Statement | 46 |
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
PSUs
In April 20222023 each of our NEOs was granted PSUs under the Equity Incentive Plan.PSUs. These PSUs vest based on performance against predetermined revenue and Adjusted EBITDA goals through the end of the three-year performance period commencing January 1, 20222023, subject to December 31, 2024, subject tothe NEO’s continued employment through the end of that period and accordingly create incentives for our NEOs to achieve medium term growth and profitability.profitability as well as providing an additional retention incentive. The revenue and Adjusted EBITDA goals have an equal impact on PSU vesting.are each weighted 50%. For the revenue metric, the PSU payout may range from 50% at threshold performance level (which we define as 90% achievement of target) andto 200% for maximum performance level, (which we define as 130% achievement of the target).level. For the Adjusted EBITDA metric, the PSU payout may range from 50% at threshold performance level (which we define as an 80% achievement of target) and 200% for maximum performance level, (which we define as 120% achievement of the target).level. Outstanding PSUs will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors elects
| agilon health 2024 Proxy Statement | | 36 |
TABLE OF CONTENTS
to accelerate at target levels 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 PSUs in connection with a change in control.
Changes to Our Long-Term Equity Incentive Program
PSUs Granted in 2021
In April 2021, the Compensation and Human Capital Committee approved a three-year PSU grant that would vest based on revenue and 2021 Adjusted EBITDA performance for
2023In 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 $71 million, thus resulting in achievement of tracking 130% of target performance and negative 87% of target performance, respectively (or a vesting payout percentage of 200% for revenue and 0% for 2021 Adjusted EBITDA). As a result, the proportion2021 PSU grant paid out at 100% of the target number of PSUs insubject to the award.
2021 Plan Design
Revenue ($M) | | | 50% | | | $5,784 | | | $7,230 | | | $9,037 | | | $9,118 | | | 200% |
Adjusted EBITDA ($M) | | | 50% | | | $73 | | | $91 | | | $114 | | | ($71) | | | — |
Overall | | | 100% | | | | | | | | | | | | | | | |
Severance Benefits
We have entered into an employment agreement with each of our
total equity award mix creates additional incentivesNEOs that provide severance benefits if their employment is terminated under certain circumstances. We believe these arrangements are appropriate to help provide stability for our
NEOsmanagement team and are consistent with market practices. See “Narrative Disclosure to
achieve higher medium-term revenueSummary Compensation Table and
profitability growth that if achieved at target or higher will benefit shareholders.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.
Stock Ownership Guidelines
Our board of directors has established stock ownership guidelines in order to further align the long-term interests of our eligibleexecutive officers and non-employee directors with those of our stockholders. Our stock ownership guidelines require that our executive officers and non-employee directors own shares of 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:
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 |
TABLE OF CONTENTS
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 securities and the pledging of agilon health securities as collateral for a loan by any of our employees, including our NEOs, under which participantsofficers, or directors.
Clawback Policy
In accordance with SEC and NYSE requirements, the board has adopted an executive compensation recovery policy regarding the adjustment or recovery of certain incentive awards or payments made to current or former executive officers in the event that we are
permittedrequired to
contribute a percentage of their compensation on a pre-tax basis, subjectprepare an accounting restatement due to
U.S. Internal Revenue Code limits. We make matching contributionsmaterial noncompliance with any financial reporting requirement under the
401(k) plansecurities laws. In general, the policy provides that,
immediately vest. Our NEOs are eligibleunless an exception applies, we will seek to
participaterecover compensation that is awarded to an executive officer based on our attainment of a financial metric during the three-year period prior to the fiscal year in
which the
401(k) planrestatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the
same basis as our other employees. We do not maintain any retirement plans other than the 401(k) plan.
restated financial results.
|
|
| 2023 Proxy Statement | 47 |
Executive Compensation
Compensation and Human Capital Committee Report
The Company’s Compensation and Human Capital Committee has reviewed the Compensation Discussion and Analysis and discussed it with management and, based on such review and discussions, has recommended to the board that the Compensation Discussion and Analysis should be included in this
Proxy Statement.Ravi Sachdevproxy statement.
The Compensation and Human Capital Committee
Jeff Schwaneke (Chair)
Silvana Battaglia
Diana McKenzie
Karen McLoughlin
Jeff Schwaneke
Diana McKenzie
This Compensation and Human Capital Committee Report 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.
|
|
| 2023agilon health 2024 Proxy Statement | 48 | 38 |
TABLE OF CONTENTS
Executive Compensation
Summary Compensation Table
The following table sets forth the compensation of our NEOs.
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 |
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)
| (1) | Mr. Bensley, Mr. Shaker, Mr. Venkatachaliah and Mr. Desai were not named executive officers in 2020, and thus only their 2022 and 2021 compensation is presented in accordance with SEC rules. |
| (2) | 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 which is incorporated by reference.on Form 10-K filed with the SEC on February 27, 2024. |
For PSUs, the grant date fair value is calculated based upon the probable outcome of the performance condition being achieved, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date, excluding the effect of estimated forfeitures. As of the grant date, the values of the PSUs granted to the NEOs in
2023 assuming the highest level of performance (200% of the grant date value), were as follows: Mr. Sell ($4,500,038); Mr. Bensley ($1,250,020); Mr. Desai ($3,000,026); Mr. Shaker ($2,500,040); and Mr. Venkatachaliah ($2,500,040). See “Elements of our Executive Compensation Program—Long-Term Equity Incentives” above for more information regarding the stock awards. As of the grant date, the values of the PSUs granted to the NEOs in 2022 assuming the highest level of performance (200% of the grant date value), were as follows: Mr. Sell ($2,250,018); Mr. Bensley ($625,012); Mr.
Desai ($750,006); Mr. Shaker ($625,012);
and Mr. Venkatachaliah ($500,019)
. As of the grant date, the values of the PSUs granted to the NEOs in 2021 assuming the highest level of performance (200% of the grant date value), were as follows: Mr. Bensley ($625,012); Mr. Desai ($549,976); Mr. Shaker ($12,624,930); and Mr.
DesaiVenkatachaliah ($
750,006)249,964).
See “Elements of our Executive Compensation Program—Long-Term Equity Incentives” above for more information regarding the stock awards.
|
|
| 2023 Proxy Statement | 49 |
Executive Compensation
(2)
| (3) | 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 which is incorporated by reference.on Form 10-K filed with the SEC on February 27, 2024. |
(3)
| (4) | 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)
| (5) | All Other Compensation.Amounts reported in this column for our NEOs in the 20222023 Fiscal Year include the following items as applicable to each NEO. Amount includes our contributions to each NEO’s account under our 401(k) plan as follows: Mr. Desai ($13,200), Mr. Shaker $12,200,($13,200), and Mr. Venkatachaliah $12,200 and Mr. Desai, $12,200.($13,200). Amount includes fees for financial planning services paid by us as follows: Mr. Sell, $16,000,($16,985), Mr. Desai ($16,647), Mr. Shaker $16,000,($16,985), and Mr. Venkatachaliah $16,000 and Mr. Desai, $10,521.($16,985). |
| (6) | Mr. Sell commenced his employment with the Company as of June 1, 2020, and amounts reported for Mr. Sell reflect that his base salary and non-equity incentive plan compensation were prorated for the 2020 fiscal year. |
| (7)(5)
| Mr. Bensley commenced his employment with the Company as of January 11, 2021, and amounts reported for Mr. Bensley in this row reflect that his base salary and non-equity incentive plan compensation were prorated for the 2021 fiscal year. |
| (8)(6)
| Mr. Venkatachaliah commenced his employment with the Company as of January 13, 2021, and amounts reported for Mr. Venkatachaliah in this row reflect that his base salary and non-equity incentive plan compensation were prorated for the 2021 fiscal year. |
|
|
| 2023agilon health 2024 Proxy Statement | 50 | 39 |
TABLE OF CONTENTS
Executive Compensation
Grants of Plan-Based Awards for Fiscal Year 2022
2023
The following table provides information concerning awards granted to the NEOs in the
20222023 Fiscal Year under any plan.
| | | | | | | | | | | |
| | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares or Units and Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($) | 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 |
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 |
|
|
| 2023 Proxy Statement | 51 |
(1)
Executive Compensation
| (1) | Threshold, target and maximum cash payouts available to our NEOs under our annual incentive compensation plan for 2022.2023. |
(2)
| (2)PSUs that may vest under the applicable threshold, target and maximum performance levels for PSU grants made in 2023. In the event the applicable threshold performance conditions are not achieved, none of these PSUs will vest. |
(3)
| Stock optionsRSUs awarded in 20222023 that to vest in four equal annual installments commencing on the first anniversary of the grant date, based on continued service through the applicable vesting date. |
(4)
| (3) | RSUsStock options awarded in 20222023 that vest in four equal annual installments commencing on the first anniversary of the grant date, based on continued service through the applicable vesting date. |
| (4)agilon health 2024 Proxy Statement | | PSUs that may vest under the applicable threshold, target and maximum performance levels for PSU grants made in 2022. In the event the applicable threshold performance conditions are not achieved, none of these PSUs will vest.40 |
TABLE OF CONTENTS
(5)
| Aggregate grant date fair value of the applicable award, computed in accordance with FASB ASC Topic 718. Please referRefer to heading “Stock Based Compensation” underin Note 14 to the Consolidated Financial Statements in the Annual Report for a discussion of the relevant assumptions used to calculate these amounts. With respect to awards that vest subject to a performance condition, the grant date fair value is calculated based upon the probable outcome of the performance condition being achieved, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date, excluding the effect of estimated forfeitures. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table
We are a party to employment agreements with each of Mr. Sell, Mr. Bensley, Mr.
Shaker,Desai, Mr.
VenkatachaliahShaker and Mr.
Desai.Venkatachaliah.
Mr. Sell’s employment agreement does not provide a fixed term and may be terminated at any time by either party. Under his agreement, Mr. Sell is entitled to an annual base salary of $750,000 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. Sell’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 (i) continued base salary for 18 months, payable on the Company’s normal payroll dates, (ii) a cash payment equal to his target annual incentive compensation, payable in equal monthly installments over 12 months on the Company’s normal payroll dates, (iii) any earned but unpaid annual
|
|
| 2023 Proxy Statement | 52 |
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.
Mr. Bensley’s employment agreement does not provide a fixed term and may be terminated at any time by either party. Under his agreement, Mr. Bensley is entitled to an annual base salary of $500,000 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. Bensley’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. Bensley’s execution and non-revocation of a release of claims.
As noted above in “Executive Officers”, in January 2024, Mr. Bensley informed the Company of his intent to retire from his position as our Chief Financial Officer during 2024, which we expect to take place by September 2024. The Company has initiated a search for a new Chief Financial Officer, and Mr. Bensley has agreed to remain as Chief Financial Officer through this process and serve in a consulting role through the transition.
Veeral Desai
Mr. 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 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
| agilon health 2024 Proxy Statement | | 41 |
TABLE OF CONTENTS
(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.
Mr. 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.
Mr. 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 | 53 |
Executive Compensation
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.
Veeral Desai
Mr. 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 $375,000 and is eligible for payment of an annual incentive compensation, with a target amount equal to 75% of his base salary.
The employment agreement provides for certain severance benefits. If Mr. Desai’s employment is terminated without “cause” or if he resigns his employment for “good reason,” as such terms are defined in his employment agreement, he is entitled to receive cash payments equal to (i) 23 months of base salary, payable on the Company’s normal payroll dates, (ii) two times his target annual incentive compensation, payable in equal monthly installments over 24 months on the Company’s normal payroll dates, and (iii) continued medical, dental and vision insurance coverage for 18 months at active employee rates. Any severance payments are conditioned, among other things, upon Mr. Desai’s execution and non-revocation of a release of claims.
|
|
| 2023agilon health 2024 Proxy Statement | 54 | 42 |
TABLE OF CONTENTS
Executive Compensation
Outstanding Equity Awards at Fiscal Year End 2022
| | | | | | | | | | | | |
| Option Awards | Stock Awards |
| | | | | | | | | | | | |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | 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 ($)(10) | Equity Incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(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 Bensley | 25,000 | 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 Venkatachaliah | 12,500 | 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 |
2023
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) | | | 992,190 |
Timothy 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) | | | 275,611 |
Veeral 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 |
|
|
| 2023agilon health 2024 Proxy Statement | 55 | 43 |
TABLE OF CONTENTS
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 |
(1)
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 |
| (1) | The awards in this column consist of nonqualified stock options granted under our Equity Incentive Plan that have previously vested. |
(2)
| (2)The amounts in this column were determined based on a $12.55 closing price of the Company’s common stock on December 29, 2023. |
(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)
| (3)These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of January 11, 2021, subject to Mr. Bensley’s continued employment through each applicable vesting date. |
(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. |
| (4) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of January 11, 2021, subject to Mr. Bensley’s continued employment through each applicable vesting date. |
| (5)(8)
| These awards consist of nonqualified stock options granted under our Equity Incentive Plan that will vest 25% on each anniversary of April 14, 2022,2023, subject to each NEO’s continued employment through each applicable vesting date. |
| (6) | These awards consist of nonqualified stock options granted under our Equity Incentive Plan that vested on February 9, 2023. |
| (7) | 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. |
| (8) | These awards consist of RSUs 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. |
(9)
|
|
| 2023 Proxy Statement | 56 |
Executive Compensation
| (9) | 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)
| (10)These awards consist of RSUs 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. |
| The amounts in this column were determined basedagilon health 2024 Proxy Statement | | 44 |
TABLE OF CONTENTS
(11)
| These awards consist of RSUs granted under our Equity Incentive Plan that will vest 25% on a $16.14 closing priceeach anniversary of the Company’s common stock on December 30, 2022.April 14, 2023, subject to each NEO’s continued employment through each applicable vesting date. |
| (11)(12)
| The awards in this column consist of PSUs granted under our Equity Incentive Plan that will vest based on performance against predetermined Revenue and Adjusted EBITDA goals at the end of the three-year performance period (December 31, 2024). The amounts in this column assume payout at threshold,target, though the PSU payouts may range from 50% at threshold performance level (80% achievement of target) to 200% for maximum performance level (125% achievement of target). |
| (12)(13)
| The awards in this column consist of PSUs granted under our Equity Incentive Plan that will vest based on performance against predetermined Revenue and Adjusted EBITDA goals at the end of the three-year performance period (December 31, 2023)2025). The amounts in this column assume payout at threshold,target, though the PSU payouts may range from 50% at threshold performance level (80% achievement of target) to 200% for maximum performance level (125% achievement of target). |
Options Exercised and Stock Vested
| Option Awards | Stock Awards |
| | |
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(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 |
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 options exercised.options. |
| (2)
| Value realized on vesting determined by multiplying the number of shares acquired on vesting by the closing price of our common stock of $23.07 on April 14, 2022.the vesting date. |
|
|
| 2023agilon health 2024 Proxy Statement | 57 | 45 |
TABLE OF CONTENTS
Executive Compensation
Potential Payments Upon Termination or Change-in-Control
The information below describes and quantifies compensation that would have become payable to each of our NEOs under the terms of their employment agreements or other arrangements, as applicable, if their employment had been terminated on December 31,
20222023 by the Company without “cause” or, in the case of Mr. Sell, Mr. Desai, or Mr. Shaker, if they resigned for “good reason”. See “Narrative
disclosureDisclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Arrangements” above for a description of the severance benefits available to our NEOs.
Name | Salary ($) | 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 |
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 |
Accelerated Vesting of Equity on a Change in Control
Outstanding options, RSUs and PSUs will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors
elects todetermines that such awards will not be assumed or replaced with an “alternative award” in the change in control. Awards that are not assumed or replaced with an alternative award will accelerate and
cancel such awardsbe canceled in exchange for a payment equal to the price per share offered in the “change in control” minus, in the case of stock options, such stock option’s exercise price. Pursuant to the Equity Incentive Plan, any unvested options, RSUs and PSUs
that are assumed (or alternative awards issued in exchange for such awards) shall vest if, within 12 months following such “change in control”,
an NEO’sthe award-holder’s employment is terminated without “cause” or by
an NEOthe award-holder for “good reason” as such terms are defined in the Equity Incentive Plan. In such case, PSU vesting would be based on target levels of performance.
Under the Equity Incentive Plan, a “change in control” is generally defined as the first to occur of the following events:
| • | any transaction, whether by way of sales of capital stock, merger, consolidation or otherwise, that results in the direct or indirect beneficial ownership by any person, entity or “group” (as defined in Section 12(d) of the Exchange Act), excluding the Company, any of its subsidiaries, any employee benefit plan of the Company or any of its subsidiaries, and the CD&R Investors (and any “group” that includes any of the CD&R Investors and any member of such group, if the non-Investor members of such group do not by themselves, directly or indirectly, own more than 50% of the Company’s then outstanding voting securities), or any affiliates of any of the foregoing, of more than 50% of the combined voting power of the Company’s (or, if applicable, the surviving company after such a merger) then outstanding voting securities; |
|
|
| 2023agilon health 2024 Proxy Statement | 58 | 46 |
TABLE OF CONTENTS
Executive Compensation
| • | within any 12-month period, the persons who were members of the board at the beginning of such period (the “Incumbent Directors”) shall cease to constitute at least a majority of the board, provided that any director elected or nominated for election to the board by any investor or a majority of the Incumbent Directors then still in office shall be deemed to be an Incumbent Director for purposes of this clause; or |
| • | the sale, transfer or other disposition of all or substantially all of the assets of the Company to one or more persons that are not any of the CD&R Investors and are not, immediately prior to such sale, transfer or other disposition, affiliates of the Company. |
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:
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
|
|
| 2023 Proxy Statement | 59 |
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.
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 of Directors
In connection with our IPO in 2021,April 2023, our board of directors adopted the following non-employee director compensation program, including a mix of cash and equity compensation:
Initial Equity Award (for new appointments) | | | $160,000185,000 option grant with three-year ratable vesting |
Annual Equity Award | | | $160,000185,000 RSU grant with one-year vesting |
Annual Cash Retainer | | | $70,000 |
Committee Chair Annual Cash Retainer Fee | | | Audit Committee: $25,000
Compensation Committee: $15,000
Nominating & Governance Committee: $10,000 Compliance
Compliance Committee: $15,000 |
We convert the above dollar values of equity awards into a number of shares of common stock, in the case of options, based on a Black-Scholes valuation in accordance with the company’s financial reporting procedures at the time of grant and at an exercise price equal to the closing price of the common stock on the date of grant, and in the case of RSUs, converted based on the closing price on the date of grant. Prior to 2024, the annual equity awards to directors occurred in April of each year at the same time as annual employee equity grants. Starting in 2024, such equity awards to directors will be made immediately following the annual meeting of stockholders.
| agilon health 2024 Proxy Statement | | 47 |
TABLE OF CONTENTS
The following table sets forth information regarding compensation for each of our non-employee directors during our fiscal year ended December 31,
2022.2023. Mr. Sell’s compensation for fiscal year
20222023 is reported in the Summary Compensation table above.
Name | Fees earned or paid in cash ($) | | 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 |
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 |
|
|
| 2023 Proxy Statement | 60 |
(1)
Executive Compensation
| (1) | Amounts reported in this column represent the grant date fair value of RSUs issued to Dr. Gourdine,Ms. Battaglia, Dr. Mansukani, Ms. McKenzie, Ms. McLoughlin, Mr. Richards, Mr. Schwaneke, Mr. Smith, Mr. Williams, and Dr. Wulf in the 20222023 Fiscal Year, computed in accordance with FASB ASC Topic 718. The RSUs vest on the first anniversary of the grant date, subject to each director’s continued service as a member of our board of directors through such date. As of December 31, 2022,29, 2023, directors held the following number of RSUs: Ms. Battaglia, 8,963; Dr. Mansukani, 6,936;5,622; Ms. McKenzie, 6,700; Ms. McLoughlin, 6,936; Mr. Richards, 6,936;5,622; Mr. Schwaneke, 4,009;5,622; Mr. Williams, 6,936;5,622; and Dr. Wulf, 6,936. Please refer5622. Mr. Richards RSUs were forfeited upon his resignation from the Board. Refer to heading “Stock Based Compensation” underin Note 14 to the Consolidated Financial Statements in the Annual Report for a discussion of the relevant assumptions used to calculate these amounts. |
(2)
| (2)Amounts reported in this column represent the aggregate grant date fair value of stock options granted to Ms. Battaglia and Ms. McKenzie in the 2023 Fiscal Year, computed in accordance with FASB ASC Topic 718. As of December 31, 2023, (i) Ms. Battaglia held 19,251 outstanding stock options, (ii) Dr. Mansukani held 643,750 outstanding stock options, (iii) Ms. McKenzie held 11,104 outstanding stock options, (iv) Ms. McLoughlin held 7,959 outstanding stock options, (v) M. Schwaneke held 9,680 outstanding stock options, (vi) Mr. Williams held 1,100,000 outstanding stock options, and (vii) Dr. Wulf held 420,000 outstanding stock options. Refer to heading “Stock Based Compensation” in Note 14 to the Consolidated Financial Statements in the Annual Report for a discussion of the relevant assumptions used to calculate these amounts. |
(3)
| Dr. GourdineMs. McKenzie joined our board mid-year in February 2023 and, Mr. Smithaccordingly, received two annual RSUs in 2023: the first was a pro-rated RSU for the period from February to April 2023; the second was a full annual RSU granted in April 2023. |
(4)
| Messrs. Richards, Schnall, and Strum resigned from our board of directors on December 19, 2022 and August 10, 2022, respectively.June 22, 2023. |
In the
20222023 Fiscal Year,
no director who is a CD&R
partner (Mr.partners (Messrs. Sachdev,
Mr. Schnall and
Mr. Strum)
waswere not compensated by us for services as a director.
|
|
| 2023 Proxy Statement | 61 |
Executive Compensation
CEO Pay Ratio
The following provides information about the relationship of the
median annual total compensation of our employees and the annual total compensation of our CEO.
To determine the estimated ratio of CEO pay to median employee
pay, we considered our entire employee population of approximately
7391,116 employees who were on the payroll as of December 31,
2022.2023. We then used base
salarywages paid
to these employees (other than the CEO) during the
20222023 Fiscal Year as the form of compensation to determine our median employee. We identified our median employee, whose total compensation, calculated in accordance with the rules applicable to the Summary Compensation Table was
$68,505$61,339 in the
20222023 Fiscal Year.
The CEO pay used for purposes of calculating this pay ratio is $8,039,173,$5,267,036, which is the annual total compensation of our CEO as reported in the Summary Compensation Table.Table for 2023. As a result, we estimate the reasonable estimated ratio of our CEO pay to median employee pay for 2023 is 117approximately 86 to 1.
| agilon health 2024 Proxy Statement | | 48 |
TABLE OF CONTENTS
The SEC’s pay ratio disclosure rules permit the use of estimates, assumptions and adjustments. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above. Pay ratios vary from one company to another due to a variety of factors, including differences in the geographic distribution of their workforces, the breadth of work functions performed by company employees, and the relative share of salaried versus hourly employees.
|
|
| 2023 Proxy Statement | 62 |
Executive Compensation
Pay Versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid”, for our Principal Executive Officer (PEO) and our non-PEO NEOs, on an average basis, and certain financial performance of the Company for Fiscal Year
2023, 2022 and 2021. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
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) | ($38,619) |
2023 | | | 5,267,036 | | | (3,573,313) | | | 2,741,339 | | | 1,550,202 | | | 54.57 | | | 120.43 | | | (262,803) | | | (95,001) |
2022 | | | 5,789,157 | | | (30,811,711) | | | 1,961,158 | | | (1,410,451) | | | 70.17 | | | 118.00 | | | (106,864) | | | 4,251 |
2021 | | | 1,256,250 | | | 79,887,250 | | | 4,001,770 | | | 26,200,762 | | | 117.39 | | | 120.35 | | | (406,787) | | | (38,619) |
(1)
| Amounts reported in this column are the amounts of total compensation reported for Mr. Sell (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. See “Executive Compensation – Summary Compensation Table.” |
(2)
| Amounts reported in this column represent the amount of “compensation actually paid” to Mr. Sell, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Sell during the applicable year. The increases and decreases in these values are attributable largely to the changes in the value of Mr. Sell’s pre-IPO equity compensation awards in light of stock price movements. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Sell’s total compensation for each year to determine the compensation actually paid: |
|
|
| 2023 Proxy Statement | 63 |
Executive Compensation
Year | 2021 | | 2022 | | 2021 ($) | | 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, $27.00$12.55 was used for 2023, $16.14 was used for 2022 and $16.14$27.00 was used for 2021. |
| agilon health 2024 Proxy Statement | | 49 |
TABLE OF CONTENTS
(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 Desai and (ii)(iii) for 2021, Messrs. Bensley, Desai, Halkias, Shaker Venkatachaliah, Desai and Halkias.Venkatachaliah. |
(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: |
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 |
|
|
| 2023 Proxy Statement | 64 |
(6)
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) |
| (6) | 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, 2022.2023. Each year reflects what the cumulative value of $100 would be, including reinvestment of dividends, if such amount were invested on April 14, 2021. |
| (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, 20222023 and 2021.2022. |
| (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.
|
|
| 2023agilon health 2024 Proxy Statement | 65 | 50 |
TABLE OF CONTENTS
Executive Compensation
|
|
| 2023 Proxy Statement | 66 |
Executive Compensation
Listed below are the financial and non-financial performance measures which in our assessment represent the most important performance measures we use to link compensation actually paid to our NEOs, for 2022,2023, to company performance. Adjusted EBITDA and growth in membership on Company platform are also metrics used to determine annual incentive compensation payouts. For more information on annual incentive compensation and actual payouts, see “Executive Compensation – Elements of Our Executive Compensation Program – Annual Incentive Compensation.”
Most Important Performance Measure for 2023
Most Important Performance Measure for 2022Adjusted EBITDA |
Adjusted EBITDA
Revenue |
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, 20212022 and December 31, 2022.2023. |
| (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. |
|
|
| 2023agilon health 2024 Proxy Statement | 67 | 52 |
TABLE OF CONTENTS
Equity Compensation Plan Information
The following table provides information as of December 31, 2023 with respect to shares of our common stock that may be issued under our existing 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. |
TABLE OF CONTENTS
Security Ownership of Certain Beneficial Owners and Management
.The following table sets forth information as of March 31, 20232024 with respect to the ownership of our common stock by:
| • | the selling stockholders and each person known to own beneficially more than five percent of our common stock; |
| • | each of our named executive officers; and |
| • | all of our current executive officers and directors as a group. |
the selling stockholders and each person known to own beneficially more than five percent of our common stock;
each of our directors;
each of our named executive officers; and
all of our current executive officers and directors as a group.
The amounts and percentages of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
Percentage computations are based on
414,464,566410,843,284 shares of our common stock outstanding as of March 31,
2023.2024.
Except as otherwise indicated in the footnotes to the table, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock. Unless otherwise set forth in the footnotes to the table, the address for each listed stockholder is 6210 E. Highway 290, Suite 450, Austin, Texas 78723.
|
|
| 2023agilon health 2024 Proxy Statement | 69 | 54 |
TABLE OF CONTENTS
| | | Security Ownership of Certain Beneficial Owners and Management |
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 |
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. 12 to Schedule 13G on February 10, 2023,8, 2024, in which they reported shared voting and dispositive power over 194,611,308100,000,000 shares. The mailing address for each of these entities is c/o Clayton, Dubilier & Rice, LLC, 375 Park Avenue, New York, New York 10152. The 194,611,308100,000,000 shares are held directly by CD&R Vector Holdings, L.P. and may be deemed to be beneficially owned by CD&R Investment Associates IX, Ltd., as the general partner of CD&R Vector Holdings, L.P. CD&R Investment Associates IX, Ltd. expressly disclaims beneficial ownership of shares directly held by CD&R Vector Holdings, L.P. Investment and voting decisions with respect to the shares held by CD&R Vector Holdings, L.P. are made by an investment committee of limited partners of CD&R Associates IX, L.P., currently consisting of more than ten individuals, each of whom is also an investment professional of Clayton, Dubilier & Rice, LLC (the “Investment Committee”). All members of the Investment Committee expressly disclaim beneficial ownership of the shares directly held by the CD&R Vector Holdings, L.P. CD&R Investment Associates IX, Ltd. is managed by two directors, Donald J. Gogel and Nathan K. Sleeper, and 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. |
|
|
| 2023 Proxy Statement | 70 |
(2)
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.
| (2) | FMR LLC filed Amendment No. 12 to Schedule 13G on January 10, 2023,February 8, 2024, in which it reported sole voting power over 46,565,22560,782,728 shares. The mailing address for FMR LLC is 24545 Summer Street, Boston, Massachusetts 02210. |
| agilon health 2024 Proxy Statement | | 55 |
TABLE OF CONTENTS
| | | Security Ownership of Certain Beneficial Owners and Management |
(3)
| Capital World Investors filed an amendmentAmendment No. 13 to Schedule 13G on March 10, 2023,February 7, 2024, in which it reported sole voting and dispositive power over 42,425,42055,218,496 shares. The mailing address of Capital World Investors is 333 South Hope Street, 55th Floor, Los Angeles, California 90071. |
| (4)
| Morgan Stanley and Morgan Stanley Investment Management, Inc. filed Amendment No.1No. 3 to Schedule 13G on February 8, 2023,12, 2024, in which they reported shared voting power over 34,984,85940,453,329 shares and shared dispositive power over 37,574,54643,816,286 shares. The mailing address for Morgan Stanley is c/o Morgan Stanley Investment Management Inc., 522 Fifth Avenue,1585 Broadway, New York, New York 10036. |
| (5)
| Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP filed aAmendment No. 2 to Schedule 13G on February 6, 2023,14, 2024, in which they reported shared voting power over 21,953,40340,943,315 shares and shared dispositive power over 21,953,40342,510,030 shares. The mailing address for Wellington Management Group is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210. |
(6)
| (6)The Vanguard Group filed a Schedule 13G on February 13, 2024, in which they reported shared voting power over 125,960 shares and shared dispositive power over 441,947 shares. The mailing address for The Vanguard Group is 100 Vanguard Blvd, Malvern, Pennsylvania 19355. |
(7)
| Includes 2,451,8563,558,792 shares of common stock 1,100,000 shares thatheld by Mr. Williams has the right to acquire through the exercise of stock options and 6,9365,622 restricted stock units that will vest on April 14, 2023.2024. |
| (7)(8)
| Includes 1,229,3561,236,292 shares of common stock, 643,750 shares that Dr. Mansukani has the right to acquire through the exercise of stock options and 6,9365,622 restricted stock units that will vest on April 14, 2023.2024. |
| (8)(9)
| Includes 3,4891,078 shares of common stock, 2,6263,664 shares that Ms. McKenzie has the right to acquire through the exercise of stock options and 5,622 restricted stock units that will vest on April 14, 2024. |
(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 6,9365,622 restricted stock units that will vest on April 14, 2023.2024. |
| (9)(11)
| Includes 28,65626,309 shares of common stock, 3,9083,226 shares that Mr. RichardsSchwaneke has the right to acquire through the exercise of stock options 3,908 options that will vest and become exercisable on April 14, 2023 and 6,9365,622 restricted stock units that will vest on April 14, 2023.2024.. |
| (10)(12)
| Includes 116,456123,392 shares of common stock, 200,000220,000 shares that Dr. Wulf has the right to acquire through the exercise of stock options, 100,000 stock options that will vest and become exercisable on May 22, 2023 and 6,9365,622 restricted stock units that will vest on April 14, 2023.2024. |
| (11)(13)
| Includes 2,90047,590 shares of common stock held under the Steven J. Sell and Margaret D. Williams Revocable Inter Vivos Trust Agreement, 2,700,0007,975 shares of common stock, 3,640,121 shares that Mr. Sell has the right to acquire through the exercise of stock options, 40,12157,208 options that will vest and become exercisable on April 14, 2023, and 12,19122,074 restricted stock units that will vest on April 14, 2024. 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. |
|
|
| 2023 Proxy Statement | 71 |
(14)
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.
| (12) | Includes 2,30614,751 shares of common stock, 154,357269,859 shares that Mr. Bensley has the right to acquire through the exercise of stock options, 65,50270,248 options that will vest and become exercisable on April 14, 2023 and 7,1229,867 restricted stock units that will vest on April 14, 2023.2024. |
| (13)(15)
| Includes 1,889262,118 shares of common stock, 855,7221,601,169 shares that Mr. Desai has the right to acquire through the exercise of stock options, 34,942 options that will vest and become exercisable on April 14, 2023 and 13,640 restricted stock units that will vest on April 14, 2024. |
(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, 22,71032,202 options that will vest and become exercisable on April 14, 2023 and 6,78212,272 restricted stock units that will vest on April 14, 2023.2024. |
| (14)(17)
| Includes 8827,143 shares of common stock, 82,383148,682 shares that Mr. Venkatachaliah has the right to acquire through the exercise of stock options, 41,29950,791 options that will vest and become exercisable on April 14, 2023 and 4,0679,557 restricted stock units that will vest on April 14, 2023.2024. |
(18)
| (15) | Includes 251,507Consists of 5,516,804 shares of common stock, 1,587,1687,131,965 shares that Mr. Desai has the right to acquire through the exercise of our common stock underlying vested stock options, 23,551and 451,856 shares of common stock underlying options that willand RSUs which shall vest within 60 days following March 31, 2024 for our executive officers and become exercisable on April 14, 2023 and 7,052 restricted stock units that will vest on April 14, 2023.directors. |
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.
|
|
| 2023agilon health 2024 Proxy Statement | 72 | 56 |
TABLE OF CONTENTS
Certain Relationships and Related Party Transactions
.Policies and Procedures for Related Person Transactions
Our board of directors has approved
written policies and procedures with respect to the review and approval of certain transactions between us and a Related Person or a Related Person Transaction each as defined below (the “Related Person Transaction Policy”). Under the terms of the Related Person Transaction Policy, our board of directors, acting through our Audit Committee, must review and determine whether to approve any Related Person
Transaction.Transaction, which are transactions between us and Related Persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a Related Person has or will have a direct or indirect material interest. Any Related Person Transaction is required to be reported to our legal department, which will then determine whether it should be submitted to our Audit Committee for consideration. The Audit Committee must then review and determine whether to approve any Related Person Transaction.
For the purposes of the Related Person Transaction Policy, a “Related Person Transaction” means a transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships in which we including any of our subsidiaries were, are or will be a participant, and in which any Related Person had, has or will have a direct or indirect interest; and a “Related Person” means any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer of agilon health or a nominee to become a director of agilon health; any person who is the beneficial owner of more than five percent of our common stock; any immediate family member of any of the foregoing persons, including any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee or more than five percent beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee or more than five percent beneficial owner; and “spouse” includes an individual married to a person of the same sex if the couple is lawfully married under state law, regardless of the individual’s domicile; and any firm, corporation or other entity in which any of the foregoing persons is a general partner or, for other ownership interests, a limited partner or other owner in which such person has a beneficial ownership interest of ten percent or more.
Since December 31, 2022, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a Related Person where the amount involved exceeds, or would exceed, $120,000, and in which any Related Person had or will have a direct or indirect material interest, other than the following:
On May 15, 2023, the Company, the CD&R Investor and certain other selling stockholders (collectively, the “Selling Stockholders”) and J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and BofA Securities, Inc., as representatives of the several underwriters named therein (collectively, the “Underwriters”) entered into an Underwriting Agreement (the “Underwriting Agreement”), pursuant to which the Selling Stockholders agreed to sell to the Underwriters, and the Underwriters agreed to purchase from the Selling Stockholders, subject to and upon the terms and conditions set forth therein, 86,884,353 shares of our common stock. The CD&R Investor also granted the Underwriters a 30-day option to purchase up to an additional 7,726,955 shares of common stock, which option was exercised in full on May 16, 2023. The Company also agreed, subject to the completion of the offering, to purchase 9,614,806 shares of the common stock sold to the Underwriters at the same per share price paid by the Underwriters to the Selling Stockholders in the offering. During the year ended December 31, 2023, the Company recognized general and administrative expenses of $1.7 million to administer this secondary offering of shares of its common stock sold by the Selling Stockholders and did not receive any proceeds from any sale of common stock.
CD&R Stockholder Agreement
In connection with our IPO, we entered into the CD&R Stockholder Agreement with the CD&R Investor. The CD&R Stockholder Agreement grants the CD&R Investor the right to designate for nomination for election to our board of directors a number of CD&R Designees equal to:
| • | at least a majority of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 50% of the outstanding shares of our common stock; |
| • | at least 40% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 40% but less than 50% of the outstanding shares of our common stock; |
| • | at least 30% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 30% but less than 40% of the outstanding shares of our common stock; |
at least a majority of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 50% of the outstanding shares of our common stock;
at least 40% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 40% but less than 50% of the outstanding shares of our common stock;
|
|
| 2023agilon health 2024 Proxy Statement | 74 | 57 |
TABLE OF CONTENTS
| | | Certain Relationships and Related Party Transactions |
at least 30% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 30% but less than 40% of the outstanding shares of our common stock;
at least 20% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 20% but less than 30% of the outstanding shares of our common stock; and
Certain Relationships and Related Party Transactions
at least 5% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 5% but less than 20% of the outstanding shares of our common stock.
| • | at least 20% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 20% but less than 30% of the outstanding shares of our common stock; and |
| • | at least 5% of the total number of directors comprising our board of directors at such time as long as the CD&R Investor beneficially owns at least 5% but less than 20% of the outstanding shares of our common stock. |
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.
With respect to any vacancy of a CD&R-designated director, the CD&R Investor has the right to designate a new director for election by a majority of the remaining directors then in office.
The CD&R Stockholder Agreement provides that a CD&R Designee will serve as the Chairman of our board of directors as long as the CD&R Investor beneficially owns 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.
The CD&R Stockholder Agreement also grants to the CD&R Investor certain other rights, including specified information and access rights.
Registration Rights Agreement
In connection with our IPO, we entered into a registration rights agreement with the CD&R Investor. The registration rights agreement grants to the CD&R Investor and its permitted assigns customary Form S-1 and Form S-3 demand registration rights and piggyback registration rights, in each case subject to customary terms and conditions.
We are a party to registration rights agreements with each of our pre-IPO stockholders, including
the Morgan Stanley
InvestorInvestment Management Inc. and
the CapitalThe New Economy Fund and SMALL CAP World
Investor.Fund, Inc. The registration rights agreements grant to the existing stockholders and each of their respective permitted assigns, customary Form S-3 demand registration rights and piggyback registration rights, in each case subject to customary terms and conditions.
|
|
| 2023 Proxy Statement | 75 |
Indemnification
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.
We
are a party to indemnification agreements withalso indemnify our
directors. The indemnification agreementsdirectors and provide
the directors with contractual rights to indemnification andthem expense
advancement.
advancement accordingly.
|
|
| 2023agilon health 2024 Proxy Statement | 76 | 58 |
TABLE OF CONTENTS
Proposal 1: Election of Directors
The following individuals, all of whom are currently serving on our board of directors, are nominated for election this year as Class
IIIII directors:
Ravi Sachdev, Steven J. Sell, and William Wulf, M.D.
If elected, each of these individuals will serve as a Class
IIIII director until the
20262027 Annual Meeting of Stockholders and until their successor has been elected and qualified, or until their earlier death, resignation or removal. In the event that any nominee for any reason is unable to serve, or for good cause will not serve, the proxies will be voted for such substitute nominee as our board of directors may determine. We are not aware of any nominee who will be unable to serve, or for good cause will not serve, as a Class
IIIII director.
The relevant experiences, qualifications, attributes or skills of each nominee that led our board of directors to recommend the above persons as a nominee for director are described above in the section entitled “The Board of Directors and Corporate Governance.”
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE CLASS II NOMINEES LISTED ABOVE.
Ravi Sachdev
Steven J. Sell
William Wulf, M.D.
The matrix below outlines the diverse set of skills and expertise represented on our board:
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. |
|
|
| 2023agilon health 2024 Proxy Statement | 78 | 59 |
TABLE OF CONTENTS
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm
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.
Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from those attending the meeting.
Audit Fees and Related Fees
The following table presents, for the years ended December 31,
20212023 and 2022, fees for professional services rendered by Ernst & Young LLP for the audit of our annual financial statements, audit-related services, tax services and all other services. In accordance with the SEC’s definitions and rules, “audit fees” are fees we paid Ernst & Young LLP for professional services for the audit of our Consolidated Financial Statements included in our Annual Report on Form 10-K, review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements; and “tax fees” are fees for tax compliance, tax advice and tax planning.
| Year Ended December 31, |
| 2022 | 2021 |
Audit Fees(1) | $5,615,500 | $2,865,000 |
Tax Fees(2) | $ — | $ — |
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 auditsaudit of our annual consolidated financial statements and internal control over financial reporting, including the Company andreview of interim consolidated financial statements, other services associated with regulatory filings, including registration statement and consent services, as well as other fees associated with audits of certain subsidiaries of the Company and other professional services related to our IPO, including in relation to our registration statement on Form S-1.Company. |
| (2)
| Includes services rendered in connection with tax planning, compliance and tax return preparation fees. |
|
|
| 2023agilon health 2024 Proxy Statement | 80 | 60 |
TABLE OF CONTENTS
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm
Pre-Approval Policies and Procedures
In accordance with the Sarbanes-Oxley Act of 2002, the Audit Committee charter provides that the Audit Committee of the board of directors has the sole authority and responsibility to pre-approve all audit services, audit- related tax services and other permitted services to be performed for the Company by its independent auditors and the related fees. Under its charter and in compliance with rules of the SEC and
Public Company Accounting Oversight Board (“PCAOB”),PCAOB, the Audit Committee established a pre-approval policy that requires the pre-approval of all services to be performed by the independent auditors. The independent auditors may be considered for other services not specifically approved as audit services or audit-related services and tax services so long as the services are not prohibited by SEC or PCAOB rules and would not otherwise impair the independence of the independent auditor.
All of the services performed by Ernst & Young LLP during the years ended December 31,
20222023 and
20212022 were approved in advance by the Audit Committee pursuant to the pre-approval policy.
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. |
|
|
| 2023agilon health 2024 Proxy Statement | 81 | 61 |
TABLE OF CONTENTS
Proposal 3: Advisory Vote to Approve Executive Compensation
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.
As described in the “Compensation Discussion and Analysis” section of this proxy statement (the “CD&A”), the Compensation and Human Capital Committee is tasked with the implementation of our executive compensation philosophy, and the core of that philosophy has been and continues to be to pay our executives based on our performance. In particular, the Compensation and Human Capital Committee strives to attract and retain highly motivated, qualified and experienced executives, focus the attention of the
named executive officersNEOs on the strategic, operational and financial performance of the Company and encourage the
named executive officersNEOs to meet long-term performance objectives and increase stockholder value. To do so, the Compensation and Human Capital Committee uses a combination of short- and long-term incentive compensation to motivate and reward executives who have the ability to significantly influence our long-term financial success and who are responsible for effectively managing our operations in a way that maximizes stockholder value. It is always the intention of the Compensation and Human Capital Committee that our executive officers be compensated competitively with the market and consistently with our business strategy, sound corporate governance principles, and stockholder interests and concerns. We believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our stockholders and that the total compensation package provided to our
named executive officersNEOs are reasonable and not excessive.
For these reasons, the board of directors is asking stockholders to vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in accordance with the rules of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is APPROVED.”
As you consider this Proposal 3, we urge you to read the CD&A section of this proxy statement for additional details on our executive compensation for
2022,2023, including the more detailed information about our compensation philosophy and objectives and the past compensation of our
named executive officers,NEOs, and to review the tabular disclosures regarding
named executive officerNEOs compensation together with the accompanying narrative disclosures in the “Executive Compensation” section of this proxy statement.
|
|
| 2023 Proxy Statement | 83 |
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.
The Company’s current policy is to provide stockholders with an opportunity to vote on the compensation of the named executive officers each year at the annual meeting of stockholders. It is expected that the next such vote will occur at the 2025 Annual Meeting of Stockholders. | | | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. |
|
|
| 2023agilon health 2024 Proxy Statement | 84 | 62 |
TABLE OF CONTENTS
Other Business
.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.
A list of stockholders entitled to be present and vote at the Annual Meeting will be available at 6210 E. Highway 290, Suite 450, Austin, Texas 78723 for inspection by the stockholders
for purposes germane to the meeting from
April 11, 2023,May 19, 2024, to the date of the Annual Meeting. The list also will be available during the Annual Meeting for inspection by stockholders who are present.
Whether or not you expect to attend the Annual Meeting, we urge you to vote via the Internet, as instructed on the proxy card and Notice of Internet Availability or, if so requested, by executing and returning the requested proxy card in the postage paid envelope that will be provided, so that your shares may be represented at the Annual Meeting.
By Order of the Board of Directors,
By Order of the Board of Directors, |
| |
| Chief Legal Officer and Corporate Secretary
April 14, 202318, 2024
|
|
|
| 2023agilon health 2024 Proxy Statement | 86 | 63 |
TABLE OF CONTENTS
Other Business
Website References
Information contained on or connected to any website referenced in this
Proxy Statementproxy statement is not incorporated by reference in this
Proxy Statementproxy statement or in any other report or document we file with the SEC. We routinely use our Investor Relations website to provide presentations, press releases, and other information that may be deemed material to investors. Accordingly, we encourage investors and others interested in the Company to review the information that we share at
http://investors.agilonhealth.cominvestors.agilonhealth.com.. In addition, our Investor Relations website allows interested persons to sign up to automatically receive e-mail alerts when we post financial information.
|
|
| 2023agilon health 2024 Proxy Statement | 87 | 64 |
iso4217:USD xbrli:shares