UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
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☐ Preliminary Proxy Statement | ||
☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
☒ Definitive Proxy Statement | ||
☐ Definitive | ||
☐ Soliciting Material under 14a-12 |
AMEDISYS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
Payment of Filing Fee (Check all boxes that apply): | ||||
☒ No fee required. | ||||
☐ Previously paid with preliminary materials. | ||||
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3854 American Way, Suite A
Baton Rouge, Louisiana 70816
(225) 292-2031 or (800) 467-2662
e-mail: investor@amedisys.com
April 22, 201627, 2022
Dear Fellow Stockholder:
You are cordially invited to our 20162022 Annual Meeting of Stockholders on Thursday, June 2, 20169, 2022 at 12:10:00 p.m.a.m., Central Daylight SavingsSaving Time, at our corporateexecutive office, 3854 American Way,209 10th Ave. S., Suite A, Baton Rouge, Louisiana 70816.512, Nashville, Tennessee 37203. We look forward to updating you on new developments at Amedisys.
We have elected to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules again this year. We believe that providing our proxy materials over the Internet increases the ability of our stockholders to connect with the information they need, while reducing the environmental impact of the Annual Meeting and our costs associated with the physical printing and mailing of proxy materials.
It is important that your shares be represented at the Annual Meeting. We hope you will come to the Annual Meeting in person, but whether you do, and regardless of the number of shares you own, please vote your shares by (i) accessing the Internet, website specified on your proxy card; (ii) calling the toll-free number specified on your proxy card;telephone, or (iii) marking, signing and returning the enclosed proxy card in the envelope provided (which is postage prepaid if mailed in the United States)mail in order to ensure your representation at the meeting.
Matters to be covered at the meeting are explained in detail in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.
Amedisys is a leading health carehealthcare at home company delivering personalized home health, hospice, personal care and hospice care to more than 360,000 patients each year. More than 2,200 hospitals and 61,900 physicians nationwide have chosen Amedisys as a partner in post-acutehigh acuity care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; inpatient hospital, palliative and skilled nursing facility (“SNF”) care in their homes; recovery and rehabilitation after an operation or injury,injury; care focused on empowering them to manage a chronic disease, palliative care for those with a terminal illness,disease; or hospice care at the end of life. More than 3,000 hospitals and 90,000 physicians nationwide have chosen Amedisys also hasas a partner in post-acute care. With approximately 21,000 employees, in 548 care centers in 38 states and the industry’s first-ever nationwide Care Transitions program, designedDistrict of Columbia, Amedisys is dedicated to reduce unnecessary hospital readmissions through patient and caregiver health coaching anddelivering the highest quality of care coordination, which startsto the doorsteps of more than 445,000 patients in the hospital and continues throughout completion of the patient’s home health plan of care.need every year.
I look forward to sharing our strategic plans for 20162022 with you during our Annual Meeting.
Sincerely, |
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President and Chief Executive Officer |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 2, 2016: The Proxy Statement and 2015 Annual Report to Stockholders are available at www.proxyvote.com
Paul B. Kusserow |
Chairman of the Board |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: | Thursday, June | |
Time: | ||
Place: | Amedisys, Inc.
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Proposals:
1. | To elect the |
2. | To ratify the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, |
3. | To approve, on an advisory (non-binding) basis, the compensation paid to the Company’s Named Executive Officers (“ |
To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
We are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders instead of paper copies of our Proxy Statement and 2021 Annual Report. The Notice contains instructions on how to access those documents over the Internet. The Notice also contains instructions on how stockholders can receive a paper copy of our proxy materials, including the Proxy Statement, our 2021 Annual Report and proxy card.
Who can vote: | Stockholders of record at the close of business on April | |
How you can vote: | You may vote your proxy by (i) accessing the Internet website specified on | |
Who may attend: | Any stockholder of record as of the Record Date may attend the meeting. Upon arrival |
BY ORDER OF THE BOARD OF DIRECTORS |
Corporate Secretary |
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April |
YOUR VOTE IS IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
Whether you own one share or many, your prompt cooperation in voting your proxy is greatly appreciated.STOCKHOLDER MEETING TO BE HELD ON JUNE 9, 2022:
If you hold sharesThe Notice of common stock through a broker, bank or other nominee, your broker, bank or other nominee will vote your shares for you if you provide instructions on howInternet Availability of Proxy Materials, Notice of Meeting, Proxy Statement and 2021 Annual Report to vote the shares. In the absenceStockholders are available free of instructions, your brokerage firm, bank or other nominee can only vote your shares on certain limited matters. It is important that you provide voting instructions because brokers, banks and other nominees no longer have the authority to vote your shares for the election of directors without instructions from you.charge at www.proxyvote.com
SOME QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT AND THE ANNUAL MEETING | 1 | ||||||
CORPORATE GOVERNANCE GUIDELINES AND REVIEW AND CONSIDERATION OF CORPORATE GOVERNANCE PRACTICES | |||||||
PROPOSAL 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC | |||||||
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OUTSTANDING EQUITY AWARDS AT | 54 | ||||||
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Some of the statements in this proxy statement, including those related to our goal of achieving net zero greenhouse gas (“GHG”) emissions for our business by 2050, may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Factors that could cause actual results to differ, possibly materially, from those in the forward-looking statements include, but are not limited to, our ability to formulate and implement plans to reduce our Scope 1 and 2 GHG emissions as anticipated; our reliance on third parties, whose actions are outside our control, to reduce our Scope 3 GHG emissions, as well as other factors discussed in our 2021 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the Securities and Exchange Commission (“SEC”). We assume no obligation to update this proxy statement, which speaks as of the date issued.
(i)
3854 American Way, Suite A
Baton Rouge, Louisiana 70816
PROXY STATEMENT
Annual Meeting of Stockholders of the Company to be held on June 2, 20169, 2022
SOME QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT
AND THE ANNUAL MEETING
Q: | What is this document? |
We have tried to make this document, simple and easy to understand. The Securities and Exchange Commission (“SEC”) encourages companies to use “plain English,” and we will always try to communicate withif you clearly and effectively. requested printed copies of the proxy materials.
We will refer to Amedisys, Inc. throughout as “we,” “us,” the “Company” or “Amedisys.”
Q: | Why |
A: | Pursuant to rules adopted by the SEC, the Company will use the Internet as the primary means of furnishing proxy materials to stockholders again this year. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to the Company’s stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the complete proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. The Company encourages stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings and the cost to the Company associated with the physical printing and mailing of materials. |
Q: | Why am I receiving these materials? |
A: | You are receiving this document because you were one of our stockholders on April |
Q: | Who may vote at the Meeting? |
A: | We have fixed the close of business on April |
Q: | What proposals will be voted on at the Meeting? |
A: | There are three proposals to be considered and voted on at the Meeting: |
(1) | To elect the |
(2) | To ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, |
(3) | To approve, on an advisory (non-binding) basis, the compensation paid to our Named Executive Officers (“ |
We will also consider other business that properly comes before the Meeting in accordance with Delaware law and our Bylaws.
Q: | What are my choices when voting on the election of the |
A: | In regards to the vote on the election of the |
vote in favor of all director nominees;
vote in favor ofto withhold authority for specific director nominees; or
vote againstto withhold authority to vote for all director nominees.
Directors are elected by a plurality of the votes cast at the Meeting. As a result, the tennine directors receiving the highest number of“FOR“FOR”” votes will be elected as directors. The Company’s Corporate Governance Guidelines, however, provide that a director candidate must tender his or her resignation if he or she receives a greater number of “withhold” votes than “for” votes. The Nominating and Corporate Governance Committee would then make a recommendation to the Board of Directors on whether to accept or reject the resignation or whether other action should be taken. For additional information, please see the discussion beginning on page 108 of this Proxy Statement.
Q: | What are my choices when voting on the ratification of the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, |
A: | In regards to the vote on the proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, |
vote in favor of the ratification;
vote against the ratification; or
abstain from voting on the ratification.
The affirmative vote of a majority of the shares represented at the Meeting and entitled to vote is required to approve the proposal to ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2016.2022. For additional information, please see the discussion beginning on page 2425 of this Proxy Statement.
Q: | What are my choices when voting on the advisory (non-binding) proposal regarding the compensation paid to the Company’s Named Executive Officers (“say-on-pay”), and what vote is needed to approve the advisory say-on-pay proposal? |
A: | In regards to the advisory (non-binding) proposal on the compensation paid to our Named Executive Officers, stockholders may: |
vote in favor of the advisory say-on-pay proposal;
vote against the advisory say-on-pay proposal; or
abstain from voting on the advisory say-on-pay proposal.
The affirmative vote of a majority of the shares represented at the Meeting and entitled to vote is required to approve, on an advisory basis, the say-on-paysay on pay vote. As an advisory vote, this proposal is not binding upon us. However, the Compensation Committee of our Board of Directors, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our stockholders and will consider the outcome of the vote when making future compensation decisions. For additional information, please see the discussion beginning on page 3230 of this Proxy Statement.
Q: | How does the Company’s Board of Directors recommend that I vote? |
A: | Please see the information included in this Proxy Statement relating to the proposals to be considered and voted on at the Meeting. Our Board of Directors unanimously recommends that you vote: |
• | “FOR” each of the |
• | “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, |
• | “FOR” the advisory (non-binding) proposal regarding the compensation paid to our Named Executive Officers (“ |
Q: | What information is available on the Internet? |
A: | A copy of this Proxy Statement and our |
Our Company website address is www.amedisys.com. We use our website as a channel of distribution for important Company information. Important information, including press releases, analystinvestor presentations and financial information regarding our Company is routinely posted on and accessible on the Investors subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. We also use our website to expedite public access to time-critical information regarding our Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investors subpage of our website for important and time-critical information. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investors subpage of our website.
In addition, we make available on the Investors subpage of our website (under the link “SEC Filings”) free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the SEC. Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Nominating and Corporate Governance, Quality of Care and Compliance and Ethics Committees of our Board of Directors are also available on the Investors subpage of our website (under the link “Corporate Governance”“Governance”).
Information from this website is not incorporated by reference into this proxy statement.Proxy Statement.
Q: | What constitutes a quorum? |
A: | The presence in person or by proxy of holders of a majority of our common stock outstanding as of the Record Date is needed for a quorum at the Meeting. |
Q: | What are “broker votes” and “broker non-votes?” |
A: | On certain “routine” matters, brokerage firms have discretionary authority under applicable stock exchange rules to vote their customers’ shares if their customers do not provide voting instructions. When a brokerage firm votes its customers’ shares on a routine matter without receiving voting instructions (referred to as a “broker vote”), these shares are counted both for establishing a quorum to conduct business at the Meeting and in determining the number of shares voted |
Under applicable stock exchange rules: (i) the election of directors and (ii) the advisory (non-binding) vote on the compensation of our Named Executive Officers (“say-on-pay”say on pay” vote) are considered “non-routine”“non-routine” matters for which brokerage firms do not have discretionary authority to vote their customers’ shares if their
customers did not provide voting instructions.Therefore, for purposes of the Meeting, if you hold your stock through a brokerage account, your brokerage firm may not vote your shares on your behalf on (i) the election of directors and (ii) the advisory (non-binding) vote on the compensation paid to our Named Executive Officers (“say-on-pay”say on pay”), without receiving instructions from you. When a brokerage firm does not have the authority to vote its customers’ shares or does not exercise its authority, these situations are referred to as “broker non-votes.” Broker non-votes are only counted for establishing a quorum and will have no effect on the outcome of the vote.
We encourage you to provide instructions to your brokerage firm, bank or other nominee by voting your proxy. This action ensures your shares will be voted at the Meeting on all matters up for consideration.
Q: | What if I abstain from voting? |
A: | You have the option to |
Q: | How will my shares be voted if I return my proxy |
A: | Our Board of Directors has named |
All shares represented by properly executed proxies, unless previously revoked, will be voted at the Meeting as you direct.
IF YOU SIGN AND RETURN YOUR PROXY CARD BUT GIVE NO DIRECTION OR COMPLETE THE TELEPHONE OR INTERNET VOTING PROCEDURES BUT DO NOT SPECIFY HOW YOU WANT TO VOTE YOUR SHARES, THE SHARES WILL BE VOTED “FOR“FOR”” THE ELECTION OF THE PERSONS NAMED HEREIN AS DIRECTORS; “FOR“FOR”” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016;2022; AND “FOR“FOR”” THE PROPOSAL REGARDING AN ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”SAY ON PAY”).
Q: | How do I vote? |
A: | If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a stockholder of record with respect to those shares. If you are a record holder, |
If, like most of our stockholders, you hold your shares in street name through a broker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of those shares, and
this Proxy Statement the Notice is being forwarded to you by your broker, bank or other nominee, together with a voting instruction card. To vote at the Meeting, beneficial owners will need to contact the broker, bank or other nominee that holds their shares to obtain a “legal proxy” to bring to the Meeting.
If you hold shares in the name of a broker, bank or other nominee you may be able to vote those shares by Internet or telephone depending on the voting procedures used by your broker, bank or other nominee, as explained below under the question “How“How do I vote if my shares are held in “street name” by a broker, bank or other nominee?”
No cumulative voting rights are authorized, and dissenters’ rights and rights of appraisal are not applicable to the matters being voted upon.
Q: | How do I vote if my shares are held in “street name” by a broker, bank or other nominee? |
A: | If your shares are held by a broker, bank or other nominee (this is called “street name”), |
Q: | May I revoke my proxy after I have delivered my proxy? |
A: | You may revoke your proxy at any time before the polls close by submitting a subsequent proxy with a later date by using the Internet, by telephone or by mail or by sending our Corporate Secretary a written revocation. Your proxy will also be considered |
revoked if you attend the Meeting and vote in person. If your shares are held in “street name” by a broker, bank or other nominee, you must contact your broker, bank or other nominee to change your vote or obtain a proxy to vote your shares if you wish to cast your vote in person at the Meeting. |
Q: | Who is soliciting my vote? |
A: | In this Proxy Statement, our Board of Directors is soliciting your vote for matters being submitted for stockholder approval at the Meeting. |
Q: | Who will bear the cost for soliciting votes for the Meeting? |
A: | We will bear the cost of soliciting proxies. In addition to the use of mail, our directors, officers and non-officer employees may solicit proxies in person or by telephone or other means. These persons will not be compensated for the solicitation but may be reimbursed for out-of-pocket expenses. We have also made arrangements with brokerage firms and other custodians, nominees and fiduciaries to forward this material to the beneficial owners of our common stock, and we will reimburse them for their reasonable out-of-pocket expenses. |
Q: | Who will count the votes? |
A: | We have hired a third party, Broadridge Financial Solutions, Inc., to judge voting, be responsible for determining whether or not a quorum is present and tabulate votes cast by proxy at the Meeting. |
Q: | Where can I find voting results of the Meeting? |
A: | We will announce preliminary voting results at the Meeting and publish final results on a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Meeting (a copy |
of which will be available on the “Investors” subpage of our website, www.amedisys.com, under the link “SEC Filings”). If our final voting results are not available within four business days after the |
Q: | May I propose actions for consideration at the next Annual Meeting of Stockholders or nominate individuals to serve as directors? |
A: | You may submit proposals for consideration at future stockholder meetings, including director nominations. Please see “Other Matters” for more details. |
Q: | Whom should I contact with questions about the Meeting? |
A: | If you have any questions about this Proxy Statement or the Meeting, please contact Jennifer Guckert, our Senior Vice President, |
Q: | What |
A: | Please vote proxies for all accounts to ensure that all your shares are voted. You may consolidate multiple accounts through our transfer agent, American Stock Transfer & Trust Company, LLC, online at www.amstock.com or by calling (800) 937-5449. |
Q: | Will a list of stockholders entitled to vote at the Meeting be available? |
A: | In accordance with Delaware law, a list of stockholders entitled to vote at the Meeting will be available at our |
The following table presents information with respect to our executive officers as of April 22, 2016:27, 2022:
Name | Age | Title | ||||
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| 44 | Chief Compliance Officer | ||||
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| 55 | President and Chief Executive Officer | ||||
| 53 | Executive Vice President and Chief Financial Officer | ||||
David L. Kemmerly | 59 | |||||
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| 36 | Chief Strategy Officer | ||||
Michael P. North | 57 | Chief Information Officer |
Jane Carmody,DNP, MBA, RN, CENP and a certified executive in nursing practice, is our Chief Clinical Operations Officer (since October 21, 2015), where she is responsible for leading the design of patient-centered care delivery models with a goal of improved outcomes, increased patient satisfaction and improved operational results. Ms. Carmody is a proven leader in our field with an unparalleled passion for patient-centered care. From September 2010 to October 2015, she served as the Chief Nursing Officer for CHI Health (formerly Alegent Health), where she provided senior leadership for over 5,000 nurses and nurse practitioners, integrated and standardized best practices and implemented innovative staffing strategies. She supported the achievement of nursing excellence designations (magnet, pathway to excellence and NICHE). Her experience also includes time as the Chief Nursing Officer of Norton Audubon Hospital and Division Executive with Alegent Health home care, hospice, home medical equipment, home infusion and nursing homes and long term acute care.
Martin B. Howard is our Chief Information Officer (since April 6, 2015). Mr. Howard has 30 years of health care experience, including 20 years in the industry as a CIO and COO in organizations ranging from startups to Fortune 100 companies, and 10 years of Big Four M&A and performance consulting. His industry expertise has focused around building cost-effective, high-performing, sustainable, and secure platforms to support ongoing operations and long-term goals. From January 2014 to April 2015, Mr. Howard served as the Director of Strategy and Operations for Deloitte Consulting, where he led work across performance improvement, deal-related IT, post-merger integration, operations and other non-financial diligence, and post-deal services. In this role, he managed a variety of projects including IT transformation plans and performance improvement projects for some of the nation’s largest health care systems. As a consultant, he has worked with Gentiva, Kindred, the Mayo Clinic, and many home health and hospice providers, academic medical centers and insurers. From 2012 to 2014, Mr. Howard was Managing Director at KPMG LLP, and from 2005 to 2012, he was Executive Director of Ernst & Young. Mr. Howard has also served as CIO for Patient Care, Inc., United Health Group’s Ingenix (now Optum) global pharmaceutical services division and Erickson Retirement Communities, and was Chief Operating Officer for the Quality Indicator Project (QIP), a clinical outcomes analytics company.
Jeffrey D. JeterDenise Bohnert is our Chief Compliance Officer (since March 2004)September 2019). From April 2001 to March 2004, heShe previously served as our Deputy Compliance Officer from January 2017 to August 31, 2019. Ms. Bohnert is responsible for managing and overseeing the compliance program, which is designed to promote ethical practices and compliance with state and federal healthcare laws and regulations. Ms. Bohnert also identifies potential compliance vulnerability and risks within the organization. Ms. Bohnert has over 17 years’ experience in healthcare and compliance. Before joining Amedisys in January 2017, Ms. Bohnert served as the Compliance Officer for Signature Healthcare in Louisville, Kentucky from January 2015 to December 2016, a skilled nursing facility and home health company. Ms. Bohnert was responsible for overseeing the compliance program which included the creation of regulatory policies and procedures, a compliance investigation structure and a staff of compliance professionals. From 2003 to December 2014, Ms. Bohnert worked at Kindred Healthcare in a variety of compliance and regulatory functions including Division Vice President of Compliance/Corporate CounselRisk and Compliance, Director of HIPAA Compliance (Privacy) and Risk Manager. Ms. Bohnert is both a registered nurse and licensed attorney earning her Bachelor of Science in Nursing from Indiana State University (Magna Cum Laude) and her Juris Doctor from Indiana University - Indianapolis. Ms. Bohnert also holds a Certification in Healthcare Compliance (CHC).
Christopher T. Gerard is our President (since February 2021) and Chief Executive Officer (since April 2022). He also served as our Chief Operating Officer from January 2017 until his appointment as our Chief Executive Officer effective April 15, 2022. Additional information regarding Mr. Gerard is provided below under “Proposal 1—Election of Directors—Nominees.”
Scott G. Ginn is our Executive Vice President (since February 2021) and Chief Financial Officer (since October 2017). He previously served as Chief Accounting Officer from February 2017 to October 2017, Senior Vice President of Finance and Accounting from October 2015 to February 2017 and Senior Vice President of Compliance/Corporate Counsel.Accounting and Controller from April 2007 to October 2015. Prior to joining ourthe Company, he served as an Assistant Attorney General for the Louisiana Department of Justice beginning in 1996, where he prosecuted health care fraud and nursing home abuse.was a Director at Postlethwaite & Netterville, a professional accounting corporation. Mr. Ginn is a Certified Public Accountant.
David L. Kemmerly is our Chief Legal and Government Affairs Officer (since March 2020). He previously served as General Counsel (sincefrom October 31, 2015)2015 to March 2020 and Senior Vice President, of Government Affairs (sincefrom March 30, 2015).2015 to March 2020. He previously served as Interim General Counsel from March 30, 2015 to October 30, 2015. Mr. Kemmerly has over 2529 years of experience in governmental affairs, with more than 17
20 years specializing in health care law and public policy. From September 2013 to March 2015, he served as Special Counsel at Adams and Reese LLP, a multidisciplinary law firm where he represented diverse health care interests before the state legislature and state agencies. Prior to Adams and Reese, Mr. Kemmerly served as Director of State Public Affairs of Humana, Inc. for six years where he was responsible for legislative and regulatory affairs and outcomes in all 50 states. In this role, he developed and led implementation of successful state legislative and regulatory strategies that helped protect the business interests of one of the nation’s largest health insurers with over 13 million medical enrollees. Mr. Kemmerly has extensive experience in state and national government relations, including serving as Associate Director of the Department of Government Affairs for the Louisiana State Medical Society’s Associate Director in the Department of Governmental AffairsSociety where he lobbied state legislators, state regulatory agencies, and the U.S. Congress on issues impacting physicians and the practice of medicine. He also served as an attorney for the Louisiana State Senate, a political consultant for DLK Consulting Group, and inon the officesstaffs of various elected officials.
Paul B. Kusserowa Governor and Member of Congress. Mr. Kemmerly is our President and Chief Executive Officer (since December 2014) and has been a member of ourthe Board of Directors since joining our Company in December 2014. Additional information regarding Mr. Kusserow is provided below under “Proposal 1—Election of Directors—Nominees.”the Amedisys Foundation (since March 2016).
Ronald A. LaBorde is our Vice Chairman (since December 2014), Chief Financial Officer (since April 2015) and Interim Hospice President (since August 2015) and has been a member of our Board of Directors since 1997. He previously served as our President and Interim Chief Executive Officer from February 2014 until his appointment as Vice Chairman in December 2014. He was our President and Chief Financial Officer from January 2012 until his appointment as President and Interim Chief Executive Officer. He served as our Lead Director from February 2003 until his employment with the Company in November 2011. Additional information regarding Mr. LaBorde is provided below under “Proposal 1—Election of Directors—Nominees.”
Daniel P. McCoy is our Chief Operating Officer (since April 6, 2015), where he is responsible for all home health and hospice operations. Mr. McCoy has more than 20 years of experience successfully leading operations and driving growth at major health plans. From 2011 to March 2015, Mr. McCoy served as the Senior Vice President of Operations at Anthem (formerly WellPoint), the second largest health benefits organization with 27 million members, where he was responsible for driving operational efficiencies, improving end-to-end service experience and streamlining procedures to maximize profitability. In this role, he oversaw an operating budget of $1.4 billion with 12,000 employees and in partnership with 6,000 global vendor associates. During his tenor with Anthem, Mr. McCoy held roles across health plan operations, including customer service, claims, membership, and billing. He served as Vice President of Operations, Vice President of Enrollment & Billing, Vice President of Operations at Unicare/HealthLink Division, Regional Vice President of Operations for the Central Region, and Director of Service Operations for the Central Market. His years in these roles saw significant increases in provider and member satisfaction, increased adherence to Service Level Agreements and significant reduction in unnecessary expenditures.
Larry R. Pernosky is our Chief Human Resources Officer (since April 21, 2015) and has over 30 years of experience leading human capital strategies to drive superior business outcomes. His expertise spans the health care, consumer goods manufacturing, petrochemical engineering, energy services, and media and entertainment industries. From August 2011 to April 2015, Mr. Pernosky served as Vice President of Human Capital Consulting for Humana, Inc., where he held various positions since 2004 and was instrumental in driving key human resources operational efficiencies for the leading health and well-being company. Working in close partnership with the Chief Operating Officer’s executive team, he was accountable for the coordination and cross-organizational collaboration of the HR Business Leadership team, Organizational Design and Change Practice, Company Policy and Practice, HR Due Diligence in Mergers and Acquisitions and Associate Relations. During his 11 years at Humana, he also led Organizational Design, HR M&A, Policy, Change Management and Associate Communications. Mr. Pernosky’s experience runs the gamut from Fortune 200 companies with global responsibilities to small, entrepreneurial start-up companies, including significant international experience. He has also held positions at Big Idea Productions, Inc., Halliburton Corporation, and Whirlpool Corporation.
Stephen SeimNick Muscato is our Chief Strategy Officer (since April 2022) and oversees the Company’s Investor Relations, Treasury, Corporate Strategy, Data & Analytics, Managed Care and Strategic Investment functions. Mr. Muscato joined the company in March 4, 2015). Beforeof 2015 in a Corporate Strategy role, helping to refine and craft the strategic plan for the company and leading the annual strategic review process. During his time at Amedisys he has assumed additional responsibilities within the Finance organization, including leading the Company’s Investor Relations, Treasury and Analytics functions and assisting with the non-core investment activity focused on future and new business offerings. Prior to joining the Company,Amedisys, Mr. SeimMuscato spent 18eight years as a member of Humana’s Strategy and Corporate Development team. During his time at Humana, where heMr. Muscato led deal teams closing over $2.5 billion worth of transactions. These deals spanned multiple sectors including: Medicare Advantage Health Plan, Health Care IT assets, Home Care and Home Care service, Primary Care Physician Practices, Management Service Organizations and Data and Analytics assets. Along with his M&A experience, Mr. Muscato was responsiblethe Lead Investment Partner for building and leading their Corporate Strategy Team. This team developed the organization’s overall strategyHumana’s venture investing arm as well as overseeing Humana’s “Humana at Home”
acquisition platform build out. Mr. Muscato also worked on both the strategies identifyingHumana corporate strategy and buildingM&A strategy development teams. Mr. Muscato received his undergraduate degrees in Finance and Operations from Indiana University. He also received his Master of Business Administration from the growth platforms usedUniversity of Louisville.
Michael P. North is our Chief Information Officer (since November 2016) and previously served as our Senior Vice President of Operations (from May 11, 2015 to diversify Humana’s businessNovember 3, 2016). Mr. North, a seasoned IT executive, led Amedisys’ successful conversion to the Homecare Homebase platform and build out their integrated care delivery model. This work drove over $2 billionplays a significant role in the integration of our acquisitions. Steve also led Medicare Advantage segmentation work, an initiativeBefore Amedisys, he served as the Director of Corporate Development Integrations for Humana from May 2006 to drive alignment around serving members with diabetes, Humana’s long term financial forecastingMay 2015. His senior level responsibilities included all IT and capital deployment planning, and Medicare Prescription Drug operations.operational integrations for acquisitions. Prior to his work at Humana, Steve was a Manager at Deloitte & Touche Consulting Group and a Senior Consultant at Ernst & Young.that, Mr. North served as the Director of IT Support with Kindred Healthcare from October 1999 to May 2006.
PROPOSAL 1—ELECTION OF DIRECTORS
Nominees
On April 20, 2016, our Board of Directors amended ourOur Bylaws to provide that the number of directors shall not be not less than three nor more than 15 persons, the exact number thereof to be determined from time to time by resolution of our Board of Directors. Our Board of Directors by resolution has currently set the number of directors at ten.nine. The Board has nominated the tennine persons named below for election at the Meeting.
All of the nominees currently serve as directors. Each person elected will serve until the next Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Although our Board of Directors does not contemplate that any of the nominees will be unable to serve, if such a situation arises before the Meeting, the persons named as official proxy holders in the enclosed Proxy will vote for the election of such other person(s) as may be nominated by our Board of Directors.
Our Board of Directors maintains a Nominating and Corporate Governance Committee to recommend to our Board of Directors all director nominees. Stockholders who wish to recommend a person for consideration as a director nominee should follow the procedures described below under the heading “Stockholder Recommendation of Nominees.” Our Board of Directors selected the nominees for election at the Meeting upon the unanimous recommendation of the members of the Nominating and Corporate Governance Committee.
Board Member Qualifications; Diversity
Nominees for election to our Board of Directors must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to our stockholders, provide effective oversight of our management and monitor our adherence to principles of sound corporate governance. Specifically, as set forth in our Corporate Governance Guidelines, nominees for election to our Board of Directors should possess the highest personal and professional ethics, integrity and values. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. Directors must develop an understanding of our Company’s business and have a willingness to devote adequate time to carrying out their duties. The Board seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. In identifying candidates for membership on our Board of Directors, the Nominating and Corporate Governance Committee takes into consideration a number of factors, including: (i) relevant career experience, relevant technical skills, industry knowledge and experience and financial expertise; (ii) individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought and the ability to work collegially; and (iii) the extent to which the candidate would fulfill a present need on our Board of Directors. In addition, our Board of Directors considers diversity across a number of categories, including diversity of gender, race, ethnicity, nationality, age, education and geography as well as professional backgrounds, in order to ensure a mix of perspectives, expertise and skills necessary to oversee execution of the Company’s strategy are present in our boardroom. For each of the nominees to our Board of Directors, the biographies included in this Proxy Statement highlight the experiences and qualifications that were among the most important to the Nominating and Corporate Governance Committee in concluding that the nominee should serve as a director.
The Nominating and Corporate Governance Committee regularly assesses the appropriate size of our Board of Directors and whether any vacancies on our Board of Directors are expected due to retirement or otherwise and regularly monitors the mix of skills, experience, background and backgrounddiversity factors discussed above of our directors to assure that the Board has the necessary composition to effectively perform its oversight function. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential candidates who may come to the attention of the Nominating and Corporate Governance Committee through current Board members, professional search firms, stockholders or other persons.
Each candidate brought to the attention of the Nominating and Corporate Governance Committee, regardless of who recommended such candidate and regardless of whether such candidate is recommended by a stockholder, is considered on the basis of the criteria set forth above. The Nominating and Corporate Governance Committee typically evaluates each prospective candidate’s background and qualifications. In addition, one or more of the Nominating and Corporate Governance Committee members or the other Board members interviews each prospective candidate. After
completing the evaluation, prospective candidates are recommended to the full Board by the Nominating and Corporate Governance Committee, with the full Board selecting the candidates to be nominated for election by the stockholders or to be appointed by the Board to fill a vacancy.
Biographical information about our nominees for director and the experience, qualifications, attributes and skills considered by our Nominating and Corporate Governance Committee and the Board in determining that the nominee should serve as a director appear below.
Board Composition—Independence and Diversity
All of our director nominees are independent, except for Christopher T. Gerard, our President and Chief Executive Officer, and Paul B. Kusserow, our former Chief Executive Officer and our current Chairman of the Board. In addition, all five of our Board committees are
comprised entirely of independent directors. We are also committed to having a diverse Board of Directors. Women currently comprise over half of the directors on our Board, and in December 2020, we expanded the Board to add a woman of color. In addition, the Chairs of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are women.
Board Diversity Matrix
(as of April 27, 2022)
Board Size: | ||||||||
Total Number of Directors: 9 | ||||||||
Gender: | Female | Male | �� | Non-Binary | Gender Undisclosed | |||
Number of Directors Based on Gender Identity | 5 | 4 | 0 | 0 | ||||
Number of Directors Who Identify in Any of the Categories Below: | ||||||||
African American or Black | 1 | 0 | 0 | 0 | ||||
Alaskan Native or American Indian | 0 | 0 | 0 | 0 | ||||
Asian | 0 | 0 | 0 | 0 | ||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||
White | 4 | 4 | 0 | 0 | ||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||
LGBTQ+ | 0 | |||||||
Demographic Background Undisclosed | 0 |
Director Nominees—Biographical Information
Name | Age | Served as a Director Since | ||||||
Linda J. Hall, PhD | 67 | 2013 | ||||||
Julie D. Klapstein | 61 | 2016 | ||||||
Paul B. Kusserow | 54 | 2014 | ||||||
Ronald A. LaBorde | 59 | 1997 | ||||||
Richard A. Lechleiter | 57 | 2016 | ||||||
Jake L. Netterville | 78 | 1997 | ||||||
Bruce D. Perkins | 62 | 2015 | ||||||
Jeffrey A. Rideout, MD | 54 | 2016 | ||||||
Donald A. Washburn | 71 | 2004 | ||||||
Nathaniel M. Zilkha | 40 | 2014 |
Name | Age | Served as a Director Since | ||
Vickie L. Capps | 60 | 2019 | ||
Molly J. Coye, MD | 74 | 2019 | ||
Christopher T. Gerard | 55 | 2022 | ||
Julie D. Klapstein | 67 | 2016 | ||
Teresa L. Kline | 63 | 2019 | ||
Paul B. Kusserow | 60 | 2014 | ||
Bruce D. Perkins | 68 | 2015 | ||
Jeffrey A. Rideout, MD | 60 | 2016 | ||
Ivanetta Davis Samuels | 53 | 2020 |
Linda J. Hall, PhDVickie L. Capps.. Ms. HallCapps is the Entrepreneur-in-Residence at the Carlson Schoolcurrently a member of Business at the University of Minnesota since 2008. Previously, Ms. Hall served as the Chief Executive Officer of MinuteClinic (which was sold to CVS Pharmacy in 2006), the Chief Executive Officer of Accurate Home Care (a home healthcare company serving chronically ill pediatric patients) and as an interim executive at UnitedHealth Group, leading their corporate social responsibility initiative for AARP. In addition, Ms. Hall’s past management experience includes serving as President of Ceridian Performance Partners and Vice President of Honeywell’s Worldwide Consumer Business Group. Ms. Hall’s past public sector board experience includes membership on the board of directors and the 9audit committee chair of each of NuVasive, Inc., a public medical device company and three public small-cap, pre-commercialth District Federal Reserve Bank, serving as its Chair for biopharmaceutical companies: Otonomy, Inc., Silverback Therapeutics, Inc. and Janux Therapeutics, Inc. She is also a member of the last two yearsnominating and corporate governance committees of her term. Ms. Hall has substantial public company board experience.each of NuVasive, Otonomy and Silverback. She currently servesis also a member of the Senior Advisory Board of Consonance Capital Partners, a healthcare focused private equity firm, and she served on the board of directors of Investors Real Estate Trust (NYSE),its portfolio company, Enclara Pharmacia, a diversified real estate investment trust which includes healthcare investments,provider of pharmacy services to the hospice industry prior to its acquisition by Humana in January 2020. She previously served as Chief Financial Officer of DJO Global, Inc. from 2002 through 2013 and startup, RetraceHealth. Ms. Hall is a director of DentaQuest, a Boston-based national $1.6 billion dental benefits administrator, which operates the DentaQuest Institute and the DentaQuest Foundation. Previously, she served on the boards of Health Fitness Corporation (NASDAQ), August Technology (NASDAQ) and MTS Systems Corporation (NASDAQ). She is alsoas a member of the boards of directors of Ascension Ventures (strategicSynthorx, Inc., a public biotechnology company, prior to its acquisition by Sanofi in January 2020, Connecture, Inc. prior to its being taken private by Francisco Partners in April 2018, RF Surgical Systems prior to its acquisition by Medtronic in August 2015 and SenoRx, prior to its acquisition by C. R. Bard,
Inc. in July 2010. She is also a member of the board of directors of the San Diego State University Research Foundation. Earlier in her career, Ms. Capps spent 10 years as an audit and accounting professional with Ernst & Young and then served as the chief financial officer of several public and private companies. Ms. Capps earned her bachelor’s degree from San Diego State University, is a California Certified Public Accountant and was recognized as a CFO of the Year honoree by the San Diego Business Journal in 2009 and 2010.
Director Qualifications:
High Level of Financial Literacy—Ms. Capps is a certified public accountant, a former chief financial officer and has been designated as our “Audit Committee Financial Expert” on our Audit Committee.
Extensive Knowledge of the Healthcare Industry—Ms. Capps has extensive experience in the healthcare venture fund). She alsoindustry, having served as chief financial officer of a medical device and service company for 11 years as well as service on numerous public and private company boards of directors in the healthcare industry.
Public Company Board Experience—Ms. Capps currently serves on four public company boards of directors (other than Amedisys) and previously served on the boards of privately held startups, BodyMedia (fitness/three other public companies. While Ms. Capps currently serves on four other public company boards of directors, because three of those companies are small and less complex than Amedisys, we believe Ms. Capps has more than sufficient bandwidth to serve on the board of directors of Amedisys and as its Audit Committee Financial Expert.
Molly J. Coye, MD. Dr. Coye has served as Senior Advisor and Executive in Residence for AVIA, a membership network of healthcare delivery systems that provides strategic and technology selection advice regarding digital health telemonitoring), Laastari/R Clinic. Ltd. (telemedicinesoftware and retaildevices and is the nation’s leading healthcare innovation network, since 2015. She also served as an Innovation Advisor for Evolent Health from 2018 to 2019. From 2010 to 2015, Dr. Coye was Chief Innovation Officer of the UCLA Health System (comprehensive health clinics—Swedencare organization). Dr. Coye served on the Board of Directors of Aetna, Inc. from 2005 to 2018, where she was a member of the Executive Committee, the Committee on Investment and Finland) and PreciouStatus (interface monitoring technology for daycare and hospitals). Ms. Hall isFinance, Chair of the ComplianceCommittee on Medical Affairs, and Ethics Committeea member of the board of the Aetna Foundation. She previously served as Commissioner of Health for the State of New Jersey, Director of the California State Department of Health Services, Head of the Division of Public Health Practice at the Johns Hopkins School of Hygiene and Public Health, chair of the boards of PATH and the American Public Health Association, and on the boards of the American Hospital Association, the American Telemedicine Association, The California Endowment, and the China Medical Board.
Director Qualifications:
Innovation Expertise—Dr. Coye has extensive senior management and executive experience specialized in innovation in the healthcare industry.
Extensive Knowledge of the Healthcare Industry—Dr. Coye has over 40 years of experience in the healthcare industry.
Relevant Leadership Experience—Dr. Coye serves as Senior Advisor and Executive in Residence for AVIA and previously served as Chief Innovation Officer of the UCLA Health System, in addition to her roles as Commissioner of Health for the State of New Jersey, Director of the California State Department of Health Services, and Head of the Division of Public Health Practice at the Johns Hopkins School of Hygiene and Public Health.
Christopher T. Gerard is our BoardPresident (since February 2021) and Chief Executive Officer (since April 2022). He also served as our Chief Operating Officer from January 2017 until his appointment as our Chief Executive Officer effective April 15, 2022. Mr. Gerard previously served as President for the South Central Region of Directors.Kindred at Home, a division of Kindred Healthcare, Inc., a healthcare services company, from 2015 to 2016. Prior to his role as Regional President, Mr. Gerard was the Chief Operating Officer at Kindred at Home from 2014 to 2015. Mr. Gerard joined Kindred in 2012 as Regional Vice President when Kindred acquired IntegraCare Holdings, Inc., a home health, hospice and community care agency based in Grapevine, Texas. Mr. Gerard was an original founder of IntegraCare in 1998 and served as its President and Chief Executive Officer from 2007 to 2012.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Ms. HallMr. Gerard has over 20 years of experience in the healthcare industry,home health and hospice industries, has served in executive capacities for multiple healthcare servicescompanies and benefits companies.also serves on the board of directors of Medalogix, a data science company focused on the home health and hospice industry.
Extensive Knowledge of our Company’s Business—Mr. Gerard serves as our President (since February 2021) and Chief Executive Officer (since April 2022) and also previously served as our Chief Operating Officer from January 2017 until his appointment as our Chief Executive Officer effective April 15, 2022.
Relevant Executive/Management Experience—Ms. HallMr. Gerard has extensiveheld senior management and executive experience both inside and outside ofpositions in the healthcare industry.
Public Company Board Experience—Ms. Hall has outside board experienceindustry for over 20 years on multiple public company boards of directors.years.
Julie D. Klapstein.Klapstein. Ms. Klapstein was the founding Chief Executive Officer of Availity, LLC, one of the nation’s largest health information networks optimizing the automated delivery of critical business and clinical information among healthcare stakeholders. Ms. Klapstein was the Chief Executive Officer and board member of Availity for 11 years. Ms. Klapstein’s 30+35+ years of experience in the healthcare information technology industry include executive roles at Phycom, Inc. as Chief Executive Officer, Sunquest Information Systems (EVP); SMS’ Turnkey Systems Division (now Siemens Medical Systems) and GTE Health Systems. She currently serves on the board of directors for eSolutions,NextGen Healthcare, Inc., specializing, in revenue cycle management solutions, Dominion Diagnostics, LLC,a firm that provides software and services to medical and dental offices, Oak Street Health, a firm which is a network of value-based care centers for adults on Medicare, MultiPlan, a firm specializing in laboratory services,innovative payment solutions and the Grand Canyon Association, the official nonprofit partner of the Grand Canyon National Park.healthcare provider networks, and Revecore Technologies, a firm specializing in underpayment and denial for hospitalization. Ms. Klapstein was a past director for two public boards: Annies, Inc. and Standard Register and has been a director for multiple private companies. Ms. Klapstein earned her bachelor’s degree from Portland State University in Portland, Oregon. She is the recipient of multiple awards for top business leadership.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Ms. Klapstein has over 3035 years of experience in the healthcare and healthcare technology industries, and has served in executive capacities for multiple healthcare technology companies.
Relevant Executive/Management Experience—Ms. Klapstein has extensive senior management and executive experience in the healthcare industry.
Public Company Board Experience—Ms. Klapstein has outside board experience on twofive public company boards of directors.directors (other than Amedisys).
Paul B. Kusserow.Teresa L. Kline. Mr. KusserowMs. Kline is ourthe retired President and Chief Executive Officer of Health Alliance Plan of Michigan (“HAP”) and Executive Vice President of Henry Ford Health System (“HFHS”) where she led a financial and operational turnaround of HAP. HAP is nonprofit health plan and a subsidiary of HFHS, a nonprofit healthcare provider. Ms. Kline’s 35+ years of experience in healthcare include executive roles at Health Care Service Corporation (Senior Vice President and Chief Health Care Management Officer), HealthSouth (Senior Vice President), CHA Health (Chief Executive Officer), United Health Group (Chief Executive Officer of UHC-GA), OnCare (Senior Vice President) and Aetna Health Plans (Regional Vice President). Ms. Kline currently serves on the boards of directors of Intersect ENT, a medical device and specialty pharma company; SaVida Health, an outpatient opioid use disorder treatment provider; and Presbyterian Healthcare Services, a private not-for-profit integrated healthcare system in New Mexico. Ms. Kline also serves on the boards of the Grand Canyon Conservancy, the official nonprofit partner of the Grand Canyon National Park, and Kalamazoo College. Previously, Ms. Kline served on the board of directors of Apria, a provider of integrated home healthcare equipment and related services, until it was acquired in March 2022, and as the Chairman of two private health care technology companies, Medecision and Availity. Ms. Kline earned her bachelor’s degree from Kalamazoo College in Kalamazoo, Michigan and her Master in Public Health degree from the University of Michigan in Ann Arbor, Michigan.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Ms. Kline has over 35 years of experience in the healthcare industry.
Relevant Executive/Management Experience—Ms. Kline has served as President and Chief Executive Officer of HAP and Executive Vice President of HFHS in addition to executive roles at Health Care Service Corporation, HealthSouth, CHA Health, United Health Group, OnCare and Aetna Health Plans.
Relevant Governance Experience— Ms. Kline has significant outside board experience, currently serving on one other public company board (other than Amedisys) in addition to two private company boards and two nonprofit boards. Ms. Kline served on the board of directors of Apria, Inc., a publicly traded home healthcare equipment and related services company, until it was acquired in March 2022.
Paul B. Kusserow. Mr. Kusserow is our Chairman of the Board (since December 2014)October 2019) and has been a member of our Board of Directors since joining our Company in December 2014. Mr. Kusserow previously served as our Chief Executive Officer (from December 2014 to April 2022) and our President from December 2014 to February 2021. Previously, he was Vice Chairman and President Development of Alignment Healthcare, Inc., an integrated clinical care and health plan company, from June 2014 until December 2014. From December 2013 until June 2014, Mr. Kusserow provided executive advisory services to companies and investors in the healthcare industry.served as a consultant for Boston Consulting Group (BCG), where he advised Amedisys on corporate strategy. Before that, he served as Senior Vice President, Chief Strategy, Innovations and Corporate Development Officer of Humana, Inc., a healthcare services and benefits company, from February 2009 through August 2013 and remained with Humana, Inc. through December 2013. Prior to joining Humana, Inc., he was Managing Director and Chief Investment Officer of the Ziegler HealthVest Fund, a venture capital fund focused on early to mid-stage
investments in healthcare services, healthcare technology and wellness; a co-founder and Managing Director of San Ysidro Capital Partners, L.L.C., an investment advisory and management firm specializing in healthcare services and technology; and Managing Partner of Roaring Mountain, L.L.C., a strategy consulting and investment management firm with large clients in healthcare services and technology. Mr. Kusserow began his healthcare career with Tenet Healthcare Corporation, one of the nation’s largest investor-owned healthcare service companies, where he spent seven years, the last four as Senior Vice President, Strategy and Tenet Ventures. He began his career as a management consultant at McKinsey & Company. He has served on many corporate and advisory boards, and currently serves on the Boards of Directors of Oak Street Health, PurFoods, LLC, Matrix Medical Network and Healthpilot Technologies. He previously served on the Board of Directors of Connecture, Inc., New Century Health, Inc., AxelaCare Health Solutions, Inc. and, Picwell, Inc. He previously servedand as the Chairman of the Board of Directors of Availity Inc. and Healthsense, Inc.
Director Qualifications:
Extensive Knowledge of our Company’s Business—Mr. Kusserow hasserved as our Chief Executive Officer from December 2014 to April 2022 and as our Chairman of the Board since October 2019 and also previously served as our President and Chief Executive Officer sincefrom December 2014.2014 to February 2021.
Extensive Knowledge of the Healthcare Industry—Mr. Kusserow has over 1820 years of experience in the healthcare and healthcare technology industries, and has served in executive capacities for multiple healthcare services and benefits companies.
Relevant Executive/Management Experience—Prior to joining our Company, Mr. Kusserow had extensive senior management and executive experience in the healthcare industry.
Ronald A. LaBorde. Mr. LaBorde is our Vice Chairman (since December 2014), Chief Financial Officer (since April 2015) and Interim Hospice President (since August 2015) and has been a member of our Board of Directors since 1997. He previously served as our President and Interim Chief Executive Officer from February 2014 until his appointment as Vice Chairman in December 2014. He was our President and Chief Financial Officer from January 2012 until his appointment as Interim Chief Executive Officer. He served as our Lead Director from February 2003 until his employment with the Company in November 2011. Previously, from July 2008 to November 2011, Mr. LaBorde was the principal executive officer of HR Solutions, LLC, a private company that provides outsourced administration associated with human resources. Prior to July 2008, Mr. LaBorde managed personal investments, which included non-public operating companies, and provided management consulting services to various privately-held companies, including HR Solutions, LLC. From 1995 to May 2003, Mr. LaBorde was President and Chief Executive Officer of Piccadilly Cafeterias, Inc., a publicly traded retail restaurant business.
Director Qualifications:
Extensive Knowledge of the Company’s Business—Mr. LaBorde has been employed by our Company since November 2011 and currently serves as our Vice Chairman and Chief Financial Officer. He has been a member of our Board of Directors for over 18 years and was previously our Lead Director.
Relevant Public Company Executive Experience—Mr. LaBorde is a current Executive Officer of our Company and has previously served as President and Chief Executive Officer and Chief Financial Officer of another publicly-traded company.
High Level of Financial Literacy—Mr. LaBorde has served as our Chief Financial Officer for over three and one-half years. Prior to his employment with the Company, Mr. LaBorde was designated as one of our “Audit Committee Financial Experts.”
Richard A. Lechleiter. Mr. Lechleiter has been the President of the Catholic Education Foundation of Louisville since 2014. Previously, from 2002 until 2014, he was Executive Vice President and Chief Financial Officer of Kindred Healthcare, Inc., a leading publicly traded national healthcare services company. Prior to joining Kindred Healthcare, Inc., Mr. Lechleiter was Vice President and Chief Accounting Officer of Humana, where he played a key role in the spin-off of Humana’s hospital business and joined the new company, Galen Health Care, Inc., as Chief Accounting Officer. Galen Health Care, Inc., ultimately became a part of Columbia/HCA Healthcare Corp. Mr. Lechleiter has served as a member of the Board of Directors of Stock Yards Bancorp, a public bank holding company, for nine years. Mr. Lechleiter is a former certified public accountant and received his undergraduate degree in accounting from Xavier University.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Mr. Lechleiter has over 33 years of experience in the healthcare industry.
Relevant Executive/Leadership Experience—Mr. Lechleiter has extensive senior management and executive experience in the healthcare industry.
Public Company Board Experience—Mr. Lechleiter has outside board experience for nine years on a public company board of directors, and serves as Chair of the Executive Compensation Committee and a member of the Audit Committee of that board.
High Level of Financial Literacy—Mr. Lechleiter has held executive financial leadership roles at Kindred Healthcare, Humana and Galen Health Care, Inc. He also serves as a member of the Audit Committee of Stock Yards Bancorp. Until his retirement from Kindred he was a certified public accountant for 35 years.
Jake L. Netterville. Mr. Netterville was the Managing Partner of Postlethwaite & Netterville, a professional accounting corporation, from 1977 to 1998 and is currently the Chairman, Emeritus, of its Board of Directors.
Mr. Netterville is a certified public accountant, has served as Chairman of the Board of Directors of the American Institute of Certified Public Accountants, Inc. (“AICPA”) and is a permanent member of the AICPA’s Governing Council. Mr. Netterville was appointed Chairman of the Audit Committee of our Board of Directors in February 2003.
Director Qualifications:
Extensive Knowledge of the Company’s Business—Mr. Netterville has been a member of our Board of Directors for over 18 years.
High Level of Financial Literacy—Mr. Netterville has been a certified public accountant for over 50 years and has been designated as one of our “Audit Committee Financial Experts” on our Audit Committee.
Relevant Governance Experience—Mr. Netterville served as Managing Partner of an accounting firm and currently serves as its Chairman, Emeritus.
Bruce D. Perkins. Mr. Perkins serves as the Strategic Executivemanaging member for MCCI Group Holdings,both Perkins, Smith & Associates, L.L.C. (“MCCI”PSA”), a physician services company based in Miami, Florida (“MCCI Group”), and MMBP Holdings, LLC. He also serves on the boards of twofive private healthcare companiescompanies: Advanced Dermatology and isCosmetic Surgery; Devoted Health, Inc.; Global Nephrology Solutions; Physician’s Endoscopy; Remedi SeniorCare and on the managing member ofAresenal Capital Partners Care Provision advisory board. Mr. Perkins serves on the healthcare consulting firm, Perkins, Smith,audit and Associates. In addition to his MCCI responsibilities,compliance committees for Advanced Dermatology and Cosmetic Surgery, Devoted Health, Inc. and Physician’s Endoscopy. Additionally, Mr. Perkins serves as a strategic advisor for ChenMed; a senior advisor for the Marwood Group; a senior advisor for McKinsey & Company; a senior advisor for US Imaging; an advisor for CareCentrix, Inc.; a consultant for Devoted Health; and executive coacha consultant for ChenMed,Matrix Medical Network. Previously, Mr. Perkins served as a Florida based MSO. He also serves on the Advisory Boardboard member of the UniversityAthletico, LHP Hospital Group, Humana Health Plan of Louisville College of BusinessPuerto Rico, and previously served as:was chairman of the board of MCCI Group Holdings; a board memberHoldings. From 2015 to 2019, Mr. Perkins held the role of HumanaStrategic Executive and Advisor to the Chairman and CEO of MCCI Group Holdings and its successor, Conviva Health Plan of Puerto Rico; treasurer of the American Association of PPOs (AAPPO). Immediately prior to his January 1, 2015, employment with MCCI,Solutions. Mr. Perkins retired from Humana Inc. (“Humana”)in 2014 after a thirty-eight year career, most recently as President of Humana’s Healthcare Services Segment which included the company’s pharmacy business, home care business, behavioral health business, physician businesses, and all clinical and provider network functions.thirty-eight-year career. Prior to his role asretirement, he was the President of Healthcare Services, a $21 billion business segment which included pharmacy, home care, behavioral health, physician services, provider networks, provider administration, and clinical platforms. Before Mr. Perkins became President of Healthcare Services, he served as Regional Vice President and Divisional President for Humana health plans across multiple markets, and priorplans. Prior to the Humana’s spin-off Humana’s of its hospital business, Mr. Perkins held multiple hospital leadership positions including Divisional Vice President and hospitalHospital CEO, COO, and CFO.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Mr. Perkins has over 3945 years of experience in the healthcare industry.
Relevant Executive/Leadership Experience—Mr. Perkins is the managing member for both Perkins, Smith, & Associates, L.L.C., a private healthcare consulting company, and MMBP Holdings, LLC, and previously served as the President of Humana’s Healthcare Services Segment, which had annual revenue of $21 billion. Mr. Perkins served as Regional Vice President and Divisional President for Humana health plans across multiple markets, and prior to the spin-off Humana’s hospital business, Mr. Perkins held multiple leadership positions including Divisional Vice President and hospital CEO, COO, and CFO. In each of these positions, he had full accountability for all aspects of the businesses.
Relevant Governance Experience—Mr. Perkins serves on the board of twofive private healthcare companies, Athleticocompanies: Advanced Dermatology and Legacy Hospital Partners.Cosmetic Surgery, Devoted Health, Inc., Global Nephrology Solutions, Physician’s Endoscopy and Remedi SeniorCare. Mr. Perkins served as chairman of the board of MCCI Group Holdings, served on the board of Humana Health Plan of Puerto Rico, and served as treasurer of the AAPPO.American Association of PPOs.
Jeffrey A. Rideout, MD.MD,MA. Dr. Rideout is President and Chief Executive Officer of the Integrated Healthcare Association, a California statewide multi-stakeholder leadership group that promotes quality improvement, accountability and affordability of health care. He joined Integrated Healthcare Association in May of 2015. Dr. Rideout has also served as a Senior Advisor to GE Healthcare Ventures since March 2014, focusing on new business development related to Digital Health and Digital Therapeutics, including assessing and accelerating new early stage solutions and companies. Dr. Rideout holds academic appointments with Stanford University (since January 2014) and University of California Berkeley Haas School of Business (since January 2008, and
previously from January 2002 to January 2004), teaching on topics related to healthcare technology, services and investment. Previously, from June 2013 until June 2015, Dr. Rideout served as the Senior Medical Advisor for Covered California, the state based insurance exchange for California, and was
responsible for quality and network management and all physician and hospital relations. Dr. Rideout has also served as a Senior Advisor to GE Healthcare Ventures, focusing on new business development related to Digital Health and Digital Therapeutics, including assessing and accelerating new early stage solutions and companies. From July 2009 until June 2013, Dr. Rideout was Senior Vice President, Chief Medical Officer for The TriZetto Group, leading strategy around development and delivery of a comprehensive suite of products and services that enable payers, providers and employers to improve the cost and quality of care for consumers. Dr. Rideout also served as the global leader of the healthcare division for Cisco Systems Internet Business Solutions Group, and Cisco’s Chief Medical Officer. While at Cisco, Dr. Rideout also served as a member of the American Health Information Community (AHIC’s) Chronic Care Workgroup for the USU.S. Department of Health and Human Services. Dr. Rideout was at Cisco from April 2004 to August 2007. Prior to Cisco, Dr. Rideout was President and CEO of Blue Shield of California Foundation, Chief Medical Officer and SVP for Blue Shield of California and head of Quality Management for Blue Cross of California/WellPoint. Dr. Rideout previously served on the board of directors of MatrixCare, a provider of technology solutions for skilled nursing and senior living providers, life plan communities (CCRCs), and home health organizations, until its acquisition by ResMed in November of 2018. Dr. Rideout is currently a board chairmember for Hope Solutions (formerly named Contra Costa Interfaith Housing,Housing), which provides permanent housing to low income families in Contra Costa County, California. HeCalifornia, is alsoan adviser to the Bain Capital Double Impact, including as a 14 year boarddirector for Broadstep Behavioral Health (formerly named Phoenix Care Systems, Inc.), a portfolio company of the fund, and is a member and volunteer for Medical Teams International, an international medical relief organization based in Portland, Oregon.of the California Department of Managed Health Care Financial Solvency Standards Board. Dr. Rideout completed his residency training in internal medicine at University of California, San Francisco and is a Fellow of the American College of Physicians. He received his medical degree from Harvard Medical School and his undergraduate degree from Stanford University. He also holds a master’s degree in Philosophy, Politics, and Economics from Oxford University where he studied as a Rhodes Scholar.
Director Qualifications:
Extensive Knowledge of the Healthcare Industry—Dr. Rideout has over 2730 years of experience in the healthcare industry.
Relevant Executive/Leadership Experience—Dr. Rideout has extensive senior management and executive experience in the healthcare industry.
Relevant Governance Experience—Dr. Rideout is the current President and Chief Executive Officer of the Integrated Healthcare Association and previously held executive roles at The TriZetto Group, Cisco Blue Shield of California FoundationSystems, and Blue Shield of California.
Donald A. WashburnIvanetta Davis Samuels. Mr. Washburn, a private investor for over six years, currently servesMs. Samuels has served as a director on the boards of the following publicly traded companies: (i) LaSalle Hotel Properties, a real estate investment trust; (ii) The Greenbrier Companies, Inc., a manufacturer and lessor of rail cars and barges; and (iii) Key Technology, Inc., which designs and manufactures process automation systems for the food processing and industrial markets. He also serves on multiple private company boards. He also is a retired Executive Vice President of Northwest Airlines, Inc. and was the Chairman and President-Northwest Cargo, Inc. Prior to joining Northwest Airlines, Inc., Mr. Washburn was a corporate Senior Vice President, General Counsel and Corporate Secretary for Meharry Medical College since 2013, where she oversees all legal affairs and transactions, including litigation management, policy management, immigration services, compliance, risk management and environmental health and safety. She earned her Bachelor of Marriott Corporation, most recently Executive Vice PresidentArts degree from Northwestern University and general managerher law degree from Vanderbilt University, and has practiced law for more than 25 years. Ms. Samuels is a member of its Courtyard Hotel division. Mr. Washburn has served as the Non-Executive ChairmanTennessee Bar Association, Nashville Bar Association, Napier-Looby Bar Association, National Association of our BoardCollege and University Attorneys and Association of Directors since August 31, 2014. From February 20, 2014Corporate Counsel. She is also a Tennessee Bar Foundation Fellow, recognized for her achievements and commitment to August 31, 2014, Mr. Washburn served as Non-Executive Co-Chairman of our Board of Directors. From November 2011 until his appointment as Non-Executive Co-Chairman of our Board of Directors, he served as our independent Lead Director.the legal profession.
Director Qualifications:
Extensive Knowledge of the Company’s Business—Mr. Washburn has beenHealthcare Industry—Ms. Samuels serves as Senior Vice President, General Counsel and Corporate Secretary for Meharry Medical College, which is an academic health sciences center comprised of a membermedical school, dental school, school of our Board of Directors for over 12 years.
Public Company Board Experience—Mr. Washburn has outside board experience for over ten years on multiple public company boards of directors.graduate studies and research, clinical enterprise and a health policy center.
Relevant Executive/Leadership Experience—Mr. WashburnIn her position as Senior Vice President, General Counsel and Corporate Secretary for Meharry Medical College, Ms. Samuels oversees all legal affairs and transactions, including litigation management, policy management, immigration services, compliance, risk management and environmental health and safety.
Legal Expertise—Ms. Samuels has extensive senior executivemanagement experience where he was responsible for developingin the legal industry and managing complex, worldwide business enterprises.
Financial Literacy and Extensive Governance Experience—Mr. Washburn is an investor and retired top executive with experience (i) developing and monitoring corporate financial strategies, (ii) analyzing investment proposals and strategies and (iii) evaluating, planning and overseeing financial transactions and establishing and monitoring financial controls. His financial experience spans over 30 years as a senior executive, investor and member of the boards of directors of large and small public and private corporations.
Nathaniel M. Zilkha. Mr. Zilkha is a Member of the general partner of KKR & Co. L.P. (together with its affiliates, “KKR”). Mr. Zilkha joined KKR in 2007 and serves as the Co-Head of KKR Credit, KKR’s global credit investing business. KKR Credit invests in special situations, private credit and leveraged credit (long only, opportunistic and long/short traded credit), primarily through private funds, separate accounts and CLO’s. He is also the co-portfolio manager of the KKR Special Situations funds, which he has managed since their inception in 2009. He is a member of the Private Credit Investment Committee, Special Situations Investment Committee, Credit Portfolio Management Committee and Public Markets Management Committee. Mr. Zilkha also spent time as a member of KKR’s Private Equity Team in KKR’s Menlo Park office. Prior to joining KKR, Mr. Zilkha was a member of the Principal Investment Area of Goldman, Sachs & Co., where he invested in private equity and principal debt transactions. He is currently on the boards of directors of Amedisys, QMH, and Winoa. At KKR, he was formerly on the boards of Harden Healthcare, Oriental Brewery, and Jazz Pharmaceuticals. Mr. Zilkha graduated cum laude from Princeton University.
Director Qualifications
Public Company Board Experience—Mr. Zilkha has outside board experiencepracticed law for over seven years on multiple public company boards of directors.25 years.
Extensive Knowledge of the Healthcare Industry—As a board member of other healthcare companies and through his employment experience analyzing investments in the healthcare sector, Mr. Zilkha has gained expertise regarding the healthcare industry.
Financial Literacy and Finance Experience—As a Member of KKR and as a board member of KKR portfolio companies, Mr. Zilkha brings to the Board significant financial literacy and experience in financing matters, including expertise in structuring complex financial transactions.
Board of Directors Recommendation
THE BOARD RECOMMENDS THAT YOU VOTE “FOR“FOR”” THE ELECTION OF THE PERSONS NAMED ABOVE.
Vote Required
Directors are elected by a plurality of the votes cast at the Meeting.
Board Leadership Structure
Our Board of Directors is currently comprised of Mr. KusserowGerard (our President and Chief Executive Officer), and Mr. LaBorde (our Vice Chairman and Chief Financial Officer) and eight independent directors. Peter F. Ricchiuti retired from our Board effective asKusserow (Chairman of June 4, 2015, at which time the number of seats and the number of directors on our Board was reduced from eight to seven. On April 20, 2016, our Board of Directors set the number of directors at ten and appointed Julie D. Klapstein, Richard A. Lechleiterour former Chief Executive Officer) and Jeffrey A. Rideout, MD to serve on our Board of Directors.seven independent directors. Each director serves a one-year term and is subject to annual election. Donald A. Washburn
Chairman of the Board
Mr. Kusserow, our former Chief Executive Officer, has served as the non-executive Chairman of ourthe Board since August 31, 2014. Previously,October 17, 2019. Mr. Washburn, along with David R. Pitts, served as non-executive Co-Chairmen of our Board from February 20, 2014Kusserow continued to August 31, 2014. Mr. Pitts retired from our Board on August 31, 2014 after 17 years of service. Prior to February 20, 2014, Mr. Washburn servedserve as our independent Lead Director.
Ournon-executive Chairman of the Board believes it is appropriate to continue to separate the positions of Chairman andafter his retirement as our Chief Executive Officer because this leadership structure enhanceseffective April 15, 2022. Mr. Kusserow continues to focus on leading our Board’s abilityBoard of Directors while supporting, mentoring and providing experienced insights to ensure thatMr. Gerard throughout the appropriate leveltransition of independent oversight is applied to all management decisions. It also permits our President andthe Chief Executive Officer to focus on Company operations.
Itposition. Because Mr. Kusserow is unknown at this time whethernot independent, the Chairman and Chief Executive Officer positions will once again be combined. If the roles are combined, our Board will once again identifyof Directors has had in place an independent Lead Director as required by our Bylaws and Corporate Governance Guidelines. Specifically, whenever there is no independent Chairman of the Board,since October 2019 to lead our Board members are required to appoint one of the independent directors as Lead Director “to lead the BoardDirectors in fulfilling its duties effectively, efficiently and independent of management.”
As non-executive Chairmanmanagement, in accordance with our Bylaws and Corporate Governance Guidelines. Richard A. Lechleiter served as our independent Lead Director from October 2019 until his resignation from the Board of Directors on February 28, 2022. On February 28, 2022, the independent directors of the Board appointed Julie D. Klapstein, one of our independent directors, as Lead Director.
We believe it is appropriate at this time of transition of our Company’s leadership for Mr. Washburn fulfillsKusserow to continue to serve as non-executive Chairman because of his strong operational experience, extensive knowledge of our industry, and innovative leadership skills and his commitment to coach and support management’s execution of our strategy.
Although we believe that this leadership structure is the responsibilitiesbest structure for our stockholders and Company at this time, we recognize that other leadership structures might be appropriate depending on the circumstances. Accordingly, our Board of anDirectors periodically reviews our leadership structure.
Independent Lead Director
As independent Lead Director, as outlined inMs. Klapstein is specifically responsible under our Bylaws and Corporate Governance Guidelines specifically:for enhancing Board effectiveness, in particular by ensuring the Board works as a cohesive team; ensuring that the Board has adequate resources and is presented with full, timely and relevant information; ensuring that there is a process in place to monitor best practices that relate to the operations and responsibilities of the Board; and by assessing the effectiveness of the overall Board, its committees and individual directors on a regular basis. Our Chairman of the BoardShe is directlyalso responsible for assisting with Board management, in particular by chairing Board meetings, providing input on the agendas for Board and committee meetings; evaluatingconsulting with the Chairman, the Chair of the Nominating and Corporate Governance Committee and the Board regarding the membership and chairs for Board committees and the effectiveness of the committees; and ensuring that the independent directors meet regularly without management present to discuss the effectiveness of our President and Chief Executive Officer, the effectivenessperformance of the Board and the committees of the Board, and matters relating to succession planning and strategic planning.planning; and by chairing Board meetings when the Chairman is not in attendance. Finally, our non-executive Chairman of the Boardshe also serves as a key liaison between management and the independent directors.
Committee Leadership
We believe the Chairs of our five independent Board committees (Ms. Hall:Capps: Audit Committee; Ms. Kline: Compensation Committee; Mr. Perkins: Compliance and Ethics Committee; Mr. Zilkha: Compensation Committee; Mr. Netterville: Audit Committee; Mr. Perkins: Quality of Care Committee; and Mr. Washburn:Dr. Coye: Nominating and Corporate Governance Committee; and Dr. Rideout: Quality of Care Committee) have made valuable contributions to our Company in these roles, which are vital to our Board leadership structure. Each Committee Chair meets regularly with members of Company management, as appropriate, to discuss matters relevant to their respective Committee functions, both with and without the presence of our Chief Executive Officer. Ms. Hall, Ms. Klapstein, Dr. Rideout and Messrs. Lechleiter, Netterville, Perkins and ZilkhaChairman. Our non-employee directors also regularly communicate with Mr. Washburn,Ms. Klapstein, in hisher role as non-executive Chairman of the Board,Lead Director, regarding Board and Committee functions. Additional information about each of our Board committees is found under “Board Committees” below.
Stockholder Engagement
As part of our investor relations program, we regularly communicate with our stockholders and actively engage with them throughout the year. We solicit feedback from our stockholders with respect to corporate governance issues, our executive compensation policies and practices, regulatory developments, industry trends and company strategy. Throughout 2021, we were able to continue to connect with more investors and analysts than in previous years as meetings and events continued in virtual formats. Specifically, we met with over 193 actively-managed accounts at conferences like the J.P. Morgan Healthcare Conference, Raymond James Institutional Investors Conference, Oppenheimer Health Conference, Barclays Global Healthcare Conference, Credit Suisse London Healthcare Conference, Bank of America / Merrill Lynch Healthcare Conference, RBC Capital Healthcare Conference, UBS Global Healthcare Conference,
Jefferies Healthcare Conference and the William Blair Growth Stock Conference as well as participating in seven analyst-hosted non-deal road shows to discuss progress on our strategic initiatives including:
clinical quality;
employer of choice;
turnover reduction;
operational efficiencies;
organic and inorganic growth; and
financial performance.
Risk Oversight
The Board’s Role in Risk Oversight
Risk management is primarily the responsibility of our Company’s senior management team, while our Board of Directors is responsible for the overall supervision and oversight of our Company’s risk management activities.
Our Enterprise Risk Management Committee, comprised of all of our executive officers and our Senior Vice President of Assurance Services, is responsible for ensuring that significant risks to the Company, including financial, operational, strategic, technology and legal/compliance related risks, are identified and managed on an ongoing basis by the appropriate business lines and/or corporate services throughout the organization, thereby protecting our assets and enhancing stockholder value. All identified risks are tracked and prioritized by the Enterprise Risk Management Committee, and top enterprise risks are included in a quarterly update to the Audit Committee.
The Board’s oversight of the material risks faced by the Company occurs at both the full Board level and at the committee level. The Audit Committee has oversight responsibility not only for financial reporting with respect to the Company’s major financial exposures and the steps management has taken to monitor and control such exposures, but also for the effectiveness of management’s enterprise risk management process that monitors key business risks facing the Company. Specifically, as stated in its charter, one of the responsibilities of the Audit Committee is “to discuss guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company assess and manage the Company’s exposure to risk, and to discuss the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.” In connection with its risk oversight role, at each of its quarterly, in-person meetings, the Audit Committee also meets privately in separate executive sessions with representatives from the Company’s independent registered public accounting firm (without any members of Company management present) and the Company’s Senior Vice President—AuditPresident of Assurance Services (without other members of Company management present). The Company’s Senior Vice President—AuditPresident of Assurance Services manages the Company’s Internal Audit and Enterprise Risk Management functions and has been employed by the Company since April 2002.September 2016. The Internal Audit Department, according to its charter, is charged with taking “a systematic and disciplined approach to evaluate and improve the effectiveness of the organization’s risk management, control, and governance processes.” Finally, theThe Audit Committee also receives quarterly reports regarding the Company’s testing and controls implemented in compliance with the requirements of the Sarbanes-Oxley Act of 2002. Finally, the Audit Committee reviews and receives regular briefings concerning the Company’s information security and technology risks (including cybersecurity), including discussions of the company’s information security and risk management programs. The Company’s Chief Privacy Officer and Information Security Officer leads our cybersecurity risk management program, which is overseen by the executive Enterprise Risk Management Committee.
In addition, the Compliance and Ethics Committee of the Board receives presentations at its quarterly in-person meetings from the Company’s Chief Compliance Officer, who has been employed by the Company since April 2001.January 2017 (serving as Deputy Compliance Officer from January 2017 until her appointment as Chief Compliance Officer effective September 1, 2019). The Chief Compliance Officer, who heads the Company’s Compliance Department, is responsible for monitoring the Company’s compliance with federal and state laws governing the provision of healthcare services and patient privacy, as well as conditions of participation in the Medicare and Medicaid programs for the home health and hospice services provided by the Company. During these meetings, the Chief Compliance Officer provides a detailed report on compliance activities, relevant regulatory developments impacting the compliance function and our risk mitigation practices. As part of its risk oversight duties, the members of the Compliance and Ethics Committee meet regularly with the Chief Compliance Officer privately in executive session (without other members of Company management present), and it is expected that the Chief Compliance Officer maintains an open line of communication with both the Compliance and Ethics Committee and the full Board.
Further, the Company’s President and Chief MedicalExecutive Officer and/or Chief Clinical Officer, as appropriate, reportshistorically reported in person to the Board’s Quality of Care Committee on a quarterly basis in his capacity as our former Chief Operating Officer on matters relating to the quality of the Company’s clinical outcomes and the care provided to its patients. The Company’s clinical protocols are designed to minimize patient quality risk and improve patient health outcomes.
In addition, the Company’s General Counsellegal department reports in person to the BoardAudit Committee on at least a quarterly basis to keep the directors informed concerning legal risks and other legal matters involving the Company and the Company’s legal risk mitigation efforts.
Additionally, at each Board meeting, our President and Chief Executive Officer meets with the other directors in executive session to address operational and strategic matters, including areas of risk and opportunity that require Board attention. Further, in dedicated sessions each Julyheld annually focusing entirely on corporate strategy, the full Board reviews in detail the Company’s short- and long-term strategies, including consideration of risks facing the Company.
The oversight of risk within the organization is an evolving process requiring the Company to continually look for opportunities to further embed systematic enterprise risk management into ongoing business processes across the organization. The Board actively encourages management to continue to review and improve its methods of assessing and mitigating risk.
Compensation Risk Assessment
Our management believes that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond our organization’s ability to effectively identify and manage significant risks; are
compatible with effective internal controls and the risk management practices of our Company; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.
ForWe based the above conclusions on the following: for the annual long-term (equity-based) compensation programs in place in 20152021 for our (i) executive officers and (ii) corporate and field (non-executive) management, our management based this conclusion on the fact that all of the awards were subject only to time-based vesting conditions.conditions, and the performance targets for the performance-based awards were linked to overall corporate performance (adjusted EBITDA target). For the annual short-term (cash bonus) compensation programs in place for our (i) executive officers and (ii) corporate and field senior (non-executive) management in place in 2015, our management based this decision on the fact that the2021, performance targets were linked to overall corporate performance (adjusted EBITDA target), quality of patient care and people/human capital goals (all performance goals are defined more fully on pages 39-42 of this Proxy Statement). For the annual short-term (cash bonus) compensation programs in place for our care center-level employees,eligible field operations leaders, performance targets were linked to multiple performance measures similar to our management based this conclusion on the facts that risks are mitigated by designing incentive programscorporate plans, with reasonable caps a balance of multiple performance measures and appropriate controls to establish targets and validate actual performance against the targets before payouts arewere made.
Further, our Chief Human Resources Officer or other members of the human resources team and/or company internal counsel, as appropriate, report to the full Board on at least a quarterly basis on matters relating to employee compensation. In addition, our independent compensation consultant regularly reviews our executive compensation program for the purpose of identifying potential sources of risk and reports its findings to the Compensation Committee.
Environmental, Social and Governance (“ESG”)
ESG Governance
The Nominating and Corporate Governance Committee oversees our strategy on corporate social responsibility, including evaluating the impact of Company practices on communities and individuals, and develops and recommends to our Board of Directors for approval policies and procedures relating to the Company’s corporate social responsibility and ESG matters.
We also have an internal, employee-led ESG committee, comprised primarily of executive and senior management, that assists the executive management of the Company and Nominating and Corporate Governance Committee with (a) setting general strategy relating to ESG matters, (b) developing, implementing, and monitoring initiatives and policies based on that strategy, (c) overseeing communications with employees, investors, and stakeholders with respect to ESG matters, and (d) monitoring and assessing developments relating to and, improving the Company’s understanding of ESG matters. The employee-led ESG committee reports periodically as needed the Nominating and Corporate Governance Committee on ESG matters.
To determine our priority ESG topics, we conducted our first ESG materiality assessment in 2021. Conducted by an independent consultant, the assessment reviewed investor priorities, peer disclosures and industry-specific ESG frameworks and ratings (e.g., SASB, TCFD, UN SDGs, MSCI, Sustainalytics and ISS) to narrow the universe of potentially material topics and understand external stakeholder concerns. We then carried out a series of in-depth interviews and surveys with internal stakeholders to gauge how a given topic would impact the future success of our business.
The assessment identified a variety of ESG topics that are of significant concern to key stakeholders and likely to influence the success of our business. These topics will inform our ESG strategy and reporting content over the coming years.
We highlight our programs and progress on key ESG topics in the areas of addressing climate change, providing extraordinary care to our patients, supporting our employees, helping local communities, and increasing the value of the Company.
Environmental and Climate Change Matters
We are committed to transparency around our carbon footprint and climate risk. We have adopted an integrated approach to address climate change, with cross-disciplinary teams responsible for managing climate-related activities, initiatives and policies. Strategies and progress toward our goals are reviewed with senior leadership and the Nominating and Corporate Governance Committee of our Board of Directors.
Amedisys has announced our goal to achieve net zero greenhouse gas (“GHG”) emissions for our business by 2050 or sooner, in alignment with the Paris Climate Accord. We have also committed to engage a third party expert by December 31, 2022 to help collect data and measure GHG emissions. We will disclose Scope 1 and 2 emissions and establish interim GHG targets covering scope 1 and 2 emissions in line with the Paris Climate Accord’s 1.5°C emissions reduction goal by December 31, 2022, and we will report all Scope 3 emissions and report all Scope 3 emissions and set an interim Scope 3 GHG reduction target aligned with 1.5°C by December 31, 2023. Additional information about our environmental and climate change related goals will be included in our inaugural sustainability report, which we expect to publish in June 2022 and will be available on our website.
Human Capital
Our employees are critical to our vision to be the leading aging-in-place company. Taking care of our people is our top priority. Our success is directly correlated with our ability to continue to attract, develop and retain the most qualified and passionate employees. Our work is not just a job but a calling. Our workforce strategy emanates from our core values of SPIRIT - Service, Passion, Integrity, Respect, Innovation and Talent. We know that by taking care of our people, they can continue to provide industry leading patient care. Our mission became even more important during the COVID-19 pandemic. See “Employee Health and Safety and COVID-19 Response” below for additional information.
Our management team receives weekly updates on important human capital metrics, and our Board of Directors receives monthly updates on human capital matters, as our Board of Directors has prioritized its oversight of our efforts to develop and retain critical talent.
As further evidence of our commitment to take care of our people, our Compensation Committee tied a portion of our executive officers’ 2021 short-term incentive (cash bonus) compensation to a corporate level performance measure based on achievement of goals related to employee retention and employee engagement. See “Compensation Discussion and Analysis” below for further details regarding these metrics.
Diversity and Inclusion
Diversity and inclusion is a business imperative. We endeavor to create a culture of caregiving where our employees feel as cared for every day as our patients do. Success means all team members feel a sense of belonging, support and empowerment to be their best selves personally and professionally. We have committed to giving our employees a voice and have instituted numerous formal listening programs - quarterly pulse surveys, focus groups and town halls - to routinely gather feedback from our employees and address any concerns. Our commitment to diversity and inclusion is also broadly reflected across our policies and people practices, including non-discrimination and anti-harassment policies.
In 2021, we successfully completed our “leading inclusively” training, which emphasized the importance of creating an atmosphere where everyone can bring their true self to work. Over 1,400 of the Company’s leaders were trained in the first half of 2021, and that training continued throughout the year.
Our employee-led Diversity and Inclusion Council addresses company policies and procedures that facilitate a supportive, positive and inclusive work environment for all employees at Amedisys. The Diversity and Inclusion Council, comprised of 25 members and over 400 participating D&I Ambassadors, has ongoing conversations with and provides regular updates to the executive management team, and a member of the executive team sponsors the council. Additionally, the Company has established Employee Resources Groups for racial diversity (the Global Black Community Employee Resource Group), disability (the disAbilities Employee Resource Group), and LBGQT (the LGBTQIA+ Employee Resource Group).
We are also committed to having a diverse Board of Directors. Women currently comprise over half of the directors on our Board, and in December 2020, we expanded the Board to add a woman of color.
Talent Acquisition, Retention and Development
We strive to hire, develop and retain top talent. The core of our care delivery model is dependent upon attracting high demand clinicians, predominately nurses. We compete for talent by offering a great culture, an opportunity to provide the highest quality clinical care and competitive market-based compensation. Our compensation plans are designed to deliver a competitive base pay as well as attractive incentive opportunities, primarily for leadership positions, but also to reward quality care. We provide significant opportunities for development and continuing education as we know that career development is a key component of attracting and retaining top talent. We have implemented a peer mentorship program for new hires and regular check-ins to ensure that newly hired employees experience a sense of belonging at their care center and are well equipped for success. In addition, a key priority for us in 2022 is formalizing internal promotions.
We believe workplace flexibility for our caregivers is a valuable benefit we provide to empower our caregivers to control their own schedule. We continually monitor and assess employee metrics on hiring, retention and terminations to gain a deep understanding of our workforce and drive continuous improvement.
Modern Healthcare named Amedisys to its prestigious Best Places to Work in Healthcare list in 2021. The magazine’s annual recognition program honors 150 companies and organizations that “empower employees to provide patients and customers with the best possible care, products and services.”
Employee Health and Safety and COVID-19 Response
The health and well-being of our employees is of utmost importance to us. We offer a comprehensive benefit package that provides employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support their physical and mental health by providing tools and resources to help them improve or maintain their health status.
Our focus on the health and safety of our employees became even more critical during the COVID-19 pandemic, and Amedisys took action to help protect, educate and care for our employees. Measures taken to continue to support our caregivers during the pandemic include:
Monitoring our clinical protocols for COVID-19 testing, proper usage of personal protective equipment (“PPE”), caring for COVID-positive patients and maintaining safety measures in our care centers;
Maintaining our COVID-19 Resource Center available 24 hours a day, seven days a week for employees to access educational materials, safety documents, policies, clinical protocols and operational metrics;
Providing access to COVID-19 self-test kits to all employees;
Communicating each state’s vaccination plan and developing a state by state protocol to work with local health departments and other health systems to obtain vaccine appointments for our clinical staff;
Implementing a company-wide vaccine tracker to maintain documentation related to individual employee vaccination status to comply with both state and federal mandates;
Providing paid leave during required quarantine periods; and
Procuring millions in PPE and creating a centralized distribution center for all critical PPE, allowing us to flex our supplies on a care center by care center basis, based on need and demand.
Social Responsibility
In April 2022, we joined the UN Global Compact, and by doing so, we have committed to meeting fundamental responsibilities in four areas: human rights, labor, environment and anti-corruption.
The Amedisys Foundation was formed to provide support to our patients and employees. The Amedisys Foundation has two funds: the Patients’ Special Needs Fund and the Amedisys Employees 1st Fund. The Patients’ Special Needs Fund provides financial assistance to our home health, hospice and personal care patients during a difficult time. Grants are available for general bills and comfort items or funeral, cremation and burial assistance. The Amedisys Employees 1st Fund provides financial assistance to our eligible team members
who are experiencing severe financial need caused by unexpected emergencies, such as natural disasters, serious illness or injury, funeral expenses or extreme circumstances, like a house fire. A substantial amount of the money raised by the Amedisys Foundation is contributed by employees.
We are also proud to participate in the We Honor Veterans program. We Honor Veterans is a national awareness campaign conducted by the National Hospice and Palliative Care Organization in collaboration with the Department of Veterans Affairs. Its goal is to help hospice professionals better understand the challenges veterans may be facing due to illness, isolation or traumatic life experiences and guide them to a more peaceful death.
Board Committees
Audit Committee
The Audit Committee’s responsibilities are covered byset forth in its charter, a copy of which appears on the “Investors” subpage of our website, (www.amedisys.com) under the link “Corporate Governance.“Governance.” The Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”), and its responsibilities include hiring and supervising the work of our registered independent public accountants and our Senior Vice President—AuditPresident of Assurance Services (who manages our Internal Audit Department), overseeing our financial reporting process, internal controls and legal and regulatory compliance and pre-approving all audit and non-audit services to be provided by independent auditors.
The Audit Committee is currently comprised of JakeVickie L. Netterville (Chairman)Capps (Chair), Teresa L. Kline and Messrs. Lechleiter, Washburn and Zilkha.Bruce D. Perkins. Our Board of Directors has determined that each member of the Audit Committee also meets the definition of an “independent director” as defined by Rule 10A-3 under the Exchange Act and that Mr. NettervilleMs. Capps qualifies as an “audit committee financial expert,” as defined by Item 407(d)(5) of SEC Regulation S-K, and as a “financially sophisticated audit committee member” under NASDAQ Listing Rule 5605(c)(2)(A). This determination is based on the fact that Mr. NettervilleMs. Capps is a former chief financial officer, a certified public accountant.accountant and has experience serving as a member and chairperson of several public company audit committees. In addition, our Board of Directors has determined that Messrs. Lechleiter, Washburn and Zilkhaall of the members of the Audit Committee are each financially literate.
Compensation Committee
The Compensation Committee reviews and acts on compensation levels and benefit plans for our executive officers, approves director compensation, approves and evaluates the Company’s equity compensation plans, approves the issuance of stock options, nonvested stock, restricted stock, restricted stock units and other equity-based awards under our equity compensation plans and has the sole authority to retain, and has retained, compensation consultants.consultants to advise the Compensation Committee with respect to executive officer and director compensation. It also provides assistance to our Board of Directors in the annual evaluation of our Chief Executive Officer. TheEffective as of April 21, 2022, the Compensation Committee is currently comprised of Nathaniel M. Zilkha (Chairman)Teresa L. Kline (Chair), Ms.Vickie L. Capps, Julie D. Klapstein and Messrs. Netterville and Washburn.Jeffrey A. Rideout, MD. Our Board of Directors has determined that each member of the Compensation Committee meets the definition of an “outside director” as defined by regulations promulgated pursuant to Section 162(m) of the Internal Revenue Code (to the extent such Code section applies to our compensation practices) and is a “non-employee“non-employee director” as defined in the SEC’s Rule 16b-3. The Compensation Committee may not delegate any of its authority with respect to approving the compensation (including equity-based compensation) of our directors and
executive officers. The Compensation Committee may delegate its authority to approve awards of equity-based compensation to persons other than our directors and executive officers to our Chief Executive Officer. A copy of the Compensation Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Corporate Governance.“Governance.”
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee identifies and evaluates individuals qualified to become members of the Board of Directors and recommends to our Board of Directors all nominees for election to our Board of Directors. The Nominating and Corporate Governance Committee also provides assistance to our Board of Directors in the annual evaluations of our Board of Directors and its Committees, the review and consideration of corporate governance practices and ongoing board governance education. The Nominating and Corporate Governance Committee also prepares the slate of chairs and members for each of the Board’s standing committees. TheEffective as of April 21, 2022, the Nominating and Corporate Governance Committee is comprised of Donald A. Washburn (Chairman)Molly J. Coye, MD (Chair), Teresa L. Kline, Ivanetta Davis Samuels and each of our other independent directors (Messrs. Lechleiter, Netterville, Perkins and Zilkha, Dr. Rideout, Ms. Hall and Ms. Klapstein)Julie D. Klapstein (ex officio). A copy of the Nominating and Corporate Governance Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Corporate Governance.“Governance.”
Quality of Care Committee
The Quality of Care Committee is currently comprised of BruceJeffrey A. Rideout, MD (Chair), Molly J. Coye, MD, Julie D. Perkins (Chairman), Ms. Hall, Ms. Klapstein and Dr. Rideout.Ivanetta Davis Samuels. The dual purposes of the Quality of Care Committee are to (i) assist our Board of Directors in fulfilling its
oversight responsibilities relating to the review of our policies and procedures in connection with the delivery of quality medical care to patients and patient safety and (ii) to assist our Board of Directors and our management in promoting a “culture of quality” throughout our Company. A copy of the Quality of Care Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Corporate Governance.“Governance.”
Compliance and Ethics Committee
The Compliance and Ethics Committee was formed onin October 2013 and, effective as of April 21, 2022, is currently comprised of Linda J. Hall, PhDBruce D. Perkins (Chair), Dr.Jeffrey A. Rideout, MD, and Messrs. Lechleiter and Perkins.Ivanetta Davis Samuels. Mr. Perkins has been deemed to have significant familiarity and experience with Medicare compliance due to his over 3945 years of executive and senior management-level employment experience in the healthcare industry. The dual purposes of the Compliance and Ethics Committee are to (i) to assist the Board in fulfilling its oversight responsibilities relating to (a) the compliance by the Company with all legal requirements to which it is subject, including specifically all federal and state health care laws and regulations to which it is subject, all fraud and abuse laws and all applicable Medicare program requirements, (b) the design, implementation and execution of the Company’s Compliance and Ethics Program, (c) the activities of the Chief Compliance Officer and the operation of the Company’s Compliance Department, and (d) matters relating to the Company’s Corporate Compliance Plan and Code of Ethical Business Conduct; and (ii) assist the Board and Company management in establishing an appropriate “tone at the top” and promoting a strong “culture of compliance” throughout the Company, while also recognizing that other Board committees assist the Board in fulfilling its oversight responsibilities relating to various areas of legal and regulatory compliance. A copy of the Compliance and Ethics Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Corporate Governance.“Governance.”
Board and Committee Meetings—20152021
Our Board of Directors held 5 in-person and 9 telephonic16 meetings in 2015.2021. Our Board of Directors maintains Audit, Compensation, Nominating and Corporate Governance, Quality of Care and Compliance and Ethics
Committees that are each comprised solely of independent directors. Each Board committee generally meets on or around the date of each regularly-scheduled quarterly in-person Board meeting. During 2015,2021, the Audit Committee held 5 in-person meetings and 1 telephonic meeting;four meetings; the Compensation Committee held 5 in-person meetings and 5 telephonicseven meetings; the Nominating and Corporate Governance Committee held 5 in-person meetings and 3 telephonicfour meetings; the Quality of Care Committee held 4 in-person meetings and 3 telephonicfour meetings; and the Compliance and Ethics Committee held 5 in-person meetings and 3 telephonicfour meetings. Each director attended at least 75% of the total number of Board meetings and meetings of the Committees on which he or she served during 2015.2021. Generally, during every month in which there is not a regularly-scheduled in-person Board meeting, the Board members meet telephonically with selected members of Company management.
Independent Directors—Meetings in Executive Session
The independent directors, as a group, meet in-person in executive session on a regular basis (and at least once, quarterly) in connection with each in-person Board meeting without any members of our management or non-independent directors present. Mr. WashburnMs. Klapstein currently presides over these executive sessions as non-executive ChairmanLead Director.
Plurality Plus Resignation Policy
The Company’s Corporate Governance Guidelines contain a plurality plus resignation policy for directors in uncontested elections. Pursuant to the policy, in an uncontested election of directors, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election will promptly tender his or her resignation to the Board of Directors following certification of the Board.stockholder vote. The Nominating and Corporate Governance Committee will act to determine whether to accept the director’s resignation and will submit such recommendation for prompt consideration by the Board of Directors. The Board of Directors will act on the Nominating and Corporate Governance Committee’s recommendation within 90 days of the certification of the stockholder vote.
Stockholder Recommendation
The Nominating and Corporate Governance Committee and the Board of NomineesDirectors may consider any factors and information they deem relevant in deciding whether to accept a director’s resignation, including, without limitation:
Per
any reasons given by stockholders for their withhold votes from such director;
any alternatives for curing the underlying cause of the withheld votes;
the director’s tenure;
the director’s qualifications;
the director’s past and expected future contributions to the Board of Directors; and
the overall composition of the Board of Directors and the composition of its committees, including whether accepting the resignation would cause the Company to fail to meet any applicable standards of the SEC or the NASDAQ Global Select Market.
The Company will disclose publicly the Board of Directors’ decision on whether to accept the director’s resignation and an explanation of the process by which the decision was made and, if applicable, the reasons for not accepting the director’s resignation, in a Current Report on Form 8-K filed with the SEC. Full details of the policy are set forth in our Corporate Governance Guidelines, (aa copy of which appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Corporate Governance”),“Governance.”
Mandatory Retirement Age
In October 2019, our Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, adopted a mandatory retirement age policy for directors such that a non-employee director may not serve as a member of our Board of Directors after reaching the age of 78. At the time that a director reaches the age of 78, the director may complete his or her then current term but may not stand for re-election thereafter.
Stockholder Recommendation of Nominees
Pursuant to our Corporate Governance Guidelines, stockholders may recommend a nominee for consideration by the Nominating and Corporate Governance Committee of our Board by sending the following information to our Corporate Secretary, at 3854 American Way, Suite A, Baton Rouge, Louisiana 70816, who will forward the information to the Chairman of the Nominating and Corporate Governance Committee:
Name, mailing address and telephone number of the stockholder;
The proposed nominee’s name, mailing address and telephone number;
A statement whether the proposed nominee knows that his or her name is being suggested by the stockholder, and whether he or she has consented to being suggested and is willing to serve;
The proposed nominee’s resumerésumé or other description of his or her background and experience;
The proposed nominee’s relationship to the stockholder; and
The stockholder’s reasons for proposing that the individual be considered.
The Nominating and Corporate Governance Committee will solicit and receive recommendations for candidates to fill any Board vacancies and will review the qualifications of potential director candidates. The Nominating and Corporate Governance Committee will present any recommended candidates to the full Board for consideration. Stockholders may also nominate directors for election to our Board of Directors. For additional important information regarding stockholder nominations of directors and stockholder proposals, please see the “Other Matters” section of this Proxy Statement.
Board Independence, Stockholder Communications and Board Attendance at the Annual Stockholders Meeting
Our Board of Directors has reviewed and analyzed the independence of each director nominee. The purpose of the review was to determine whether any particular relationships or transactions involving directors or their affiliates or immediate family members were inconsistent with a determination that the director is independent for purposes of serving on the Board of Directors and its committees.
During this review, the Board of Directors examined whether there were any transactions and/or relationships between directors or their affiliates or immediate family members and the Company and the substance of any such transactions or relationships.
Following this review, our Board of Directors determined that all directors who served during 2021 and all director nominees, other than Messrs. KusserowGerard and LaBordeKusserow, are “independent” under the director independence requirements and listing standards of The NASDAQ Global Select Market. Messrs. Kusserow and LaBorde areMr. Gerard is not considered independent because they arehe is an executive officersofficer of the Company. Mr. Kusserow is not considered independent because he served as an executive officer of the Company within the past three years.
Stockholders who wish to communicate with our Board of Directors, our non-executive Chairman of the Board (or, if applicable, our Lead Director)Director or our Audit Committee should address their communications to such party, in care of our Corporate Secretary, who is responsible for promptly disseminating such communications to our Board of Directors, our non-executive Chairman of the Board (or, if applicable, Lead Director)Director or Audit Committee Chairman,Chair, as appropriate. PerPursuant to our Corporate Governance Guidelines (described below), all communications with the Board, our non-executive Chairman of the Board (or, if applicable, our Lead Director)Director or the Audit Committee are treated confidentially, and stockholders and other interested parties can remain anonymous when communicating their concerns. Stockholders who would like to submit the name of a person for consideration as a director nominee should address any communication to our Corporate Secretary in accordance with the procedures described under the heading “Corporate Governance—Stockholder Recommendation of Nominees,” above.
We do not have a formal policy regarding attendance by Board members at our Annual Stockholders Meeting because management is available at the meeting to answer questions from stockholders in attendance. Directors Paul B. Kusserow and Ronald A. LaBorde attended our 20152021 Annual Meeting of Stockholders (the “2015“2021 Annual Meeting”) in person, and all eight of our then serving independent directors Linda J. Hall, PhD, Jake L. Netterville, Donald A. Washburn and Nathaniel M. Zilkha attended our 20152021 Annual Meeting via teleconference. Historically, we have had low in-person stockholder attendance at our Annual Stockholders Meetings.
Hedging Company Securities
Our Amended and Restated Insider Trading Compliance Policy prohibits our employees, officers, and directors from purchasing or selling derivative securities relating to Amedisys stock if the purchase or sale creates a “put-equivalent” position (meaning that the employee, officer or director will benefit from a decline in the price of the underlying Amedisys security). Examples of prohibited transactions would include purchasing a put on Amedisys stock, selling a call on Amedisys stock, or entering into forward sales and other transactions that are used to hedge ownership positions in Amedisys securities.
Compensation Consultant Independence and Conflicts of Interest Assessment
The Compensation Committee engaged the services of Pearl Meyer (“Pearl Meyer”Pay Governance (the “Consultant”) as its independent advisor on matters of executive officer and director compensation (the “Engagement”(“Executive Compensation Matters”) in respect of and during fiscal 2015. Pearl Meyer reports. The Consultant reported directly to the Committee and providesprovided no other remunerated services to the Company or any of its affiliates. In accordance with the requirements of Item 407(e)(3)(iv) of Regulation S-K, the Company has affirmatively determined that no conflicts of interest existexisted between the Company and Pearl Meyerthe Consultant (or any individuals working on the Company’s account on Pearl Meyer’sthe Consultant’s behalf). In reaching such determination,determinations, the Company considered the following enumerated factors, all of which were attested to or affirmed by Pearl Meyer:the Consultant:
(1) During fiscal 2015, Pearl Meyer provided no services to and received no fees from the Company other than in connection with the Engagement;
(1) | During fiscal 2021, the Consultant did not provide any services to or receive any fees from the Company other than in connection with the Executive Compensation Matters; |
(2) The amount of fees paid or payable by the Company to Pearl Meyer in respect of the Engagement represented (or are reasonably certain to represent) less than 1% of Pearl Meyer’s total revenue for the 12 month period ended December 1, 2015;
(2) | The amount of fees paid or payable by the Company to the Consultant in respect of the Executive Compensation Matters represented (or are reasonably certain to represent) less than 1% of the Consultant’s total revenue; |
(3) Pearl Meyer has adopted and put in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company;
(3) | The Consultant has in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company; |
(4) There are no business or personal relationships between Pearl Meyer and any member of the Compensation Committee other than in respect of (i) the Engagement, or (ii) work performed by Pearl Meyer for any other company, board of directors or compensation committee for whom such Committee member also serves as an independent director;
(4) | There are no business or personal relationships between the Consultant and any member of the Compensation Committee other than in respect of (i) the Executive Compensation Matters, or (ii) work performed by the Consultant for any other company, board of directors or compensation committee for whom such committee member also serves as an independent director; |
(5) Neither Pearl Meyer, nor any of the consultants working on the Amedisys engagement owns any stock of the Company; and
(5) | Neither the Consultant nor any of its consultants working on the Amedisys engagement owns any stock of the Company; and |
(6) There is no business or personal relationships between Pearl Meyer and any executive officer of the Company other than in respect of the Engagement.
(6) | There are no business or personal relationships between the Consultant and any executive officer of the Company other than in respect of the Executive Compensation Matters. |
CODE OF ETHICAL BUSINESS CONDUCT
Our Board of Directors has adopted a Code of Ethical Business Conduct that is applicable to all our directors, executive officers and employees. The Code of Ethical Business Conduct is available on the “Investors” subpage of our website (www.amedisys.com) under
the link “Corporate Governance.“Governance.” The purpose of the Code of Ethical Business Conduct is to, among other things, deter wrongdoing and promote: honest and ethical conduct; full, fair, accurate, timely and understandable disclosure in our filings with the SEC and in public communications; compliance with applicable laws, rules and regulations; the prompt internal reporting of violations; and accountability.
CORPORATE GOVERNANCE GUIDELINES AND REVIEW AND CONSIDERATION OF CORPORATE GOVERNANCE PRACTICES
Our Board of Directors has adopted Corporate Governance Guidelines. The purpose of the Corporate Governance Guidelines is to assist the Board in the exercise of its responsibilities and to serve the best interests of the Company and its stockholders. A copy of the Corporate Governance Guidelines appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Corporate Governance.“Governance.”
The members of our Nominating and Corporate Governance Committee are responsible for the review and consideration of corporate governance practices.
Members of Nominating and Corporate Governance Committee
Donald A. Washburn (Chairman)
Linda J. Hall, PhD
Julie D. Klapstein
Richard A. Lechleiter
Jake L. Netterville
Bruce D. Perkins
Jeffrey A. Rideout, MD
Nathaniel M. Zilkha
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of our common stock to file reports of ownership and changes of ownership with the SEC. Copies of all filed reports are required to be furnished to us. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us during and with respect to 2015, as well as written representations by our directors and executive officers, we believe that each such person filed, on a timely basis, the reports required by Section 16(a) of the Exchange Act with respect to 2015, with the exception of the following late reports in 2015:
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PROPOSAL 2—RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMACCOUNTANTS
Background
The Audit Committee of the Board of Directors has appointed KPMG LLP (“KPMG”) as the independent registered public accounting firm to audit our Company’s consolidated financial statements for the fiscal year ending December 31, 2016.2022. The submission of this matter for ratification by stockholders is not legally required; however, our Board of Directors believes that such submission is consistent with best practices in corporate governance and is an opportunity for stockholders to provide direct feedback to the Audit Committee and the Board of Directors on an important issue of corporate governance. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm as our Company’s external auditor. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm to be our Company’s external auditor at any time during the year if it determines that such a change would be in the best interests of our Company and our stockholders.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE“FOR“FOR”” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.2022.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the shares represented at the Meeting and entitled to vote.
KPMG Representative—Attendance at the Meeting
A representative of KPMG will be present at the Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions by stockholders.
This Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Exchange Act.
What is theThe Audit Committee is currently comprised of three directors, all of whom are independent as determined in accordance with the listing standards of The NASDAQ Global Select Market and what does it do?within the meaning of Rule 10A-3 under the Exchange Act.
The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight and review of Amedisys’ accounting functions and internal controls. The committee recommends to the Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K and approves all fees paid to our independent registered public accounting firm. The committee also receives quarterly reports from our Internal Audit Department and approves the annual Internal Audit Work Plan and the compensation of the Senior Vice President—Audit,President of Assurance Services, who leads our Internal Audit Department.
Are the members of the Audit Committee “independent”?
Yes. The Audit Committee is currently comprised of four directors, all of whom are independent as determined in accordance with the listing standards of The NASDAQ Global Select Market and within the meaning of Rule 10A-3 under the Exchange Act.
Do the members of the Audit Committee meet regularly in executive session without members of Company management present? Do the members of the Audit Committee meet separately with representatives of the Company’s independent registered public accounting firm and the Company’s Internal Audit Department?
Yes. The Audit Committee meets at least once quarterly in executive session without members of Company management present. During these executive sessions, the Audit Committee will also meet separately with representatives of the Company’s independent registered public accounting firm (generally, the Lead Audit Partner) and the Senior Vice President—Audit,President of Assurance Services, on behalf of the Company’s Internal Audit Department. The Audit Committee also meets separately with other senior members of Company management as it deems necessary.
What steps did the Audit Committee take in recommending that our audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2015 (our “2015 Annual Report”)?
In connection with recommending that our audited financial statements be included in our 20152021 Annual Report, the members of the Audit Committee took the following steps:
The members of the Audit Committee discussed with our independent registered public accounting firm their judgment as to the quality, not just the acceptability, of our accounting policies and principles and such other matters as are required to be discussed under generally accepted auditing standards, including information concerning the scope and result of the audit. These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting and disclosure process.
Management represented to the Audit Committee that the Company’s audited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, on a consistent basis, and the Audit Committee reviewed and discussed the quarterly and annual earnings press releases and consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (the “PCAOB”) Auditing Standard No. 16..
The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and the letter required by the PCAOB regarding their independence, and the members of the Audit Committee discussed with the independent registered public accounting firm the firm’s independence from the Company and its management. The members of the Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with maintaining the independent registered public accounting firm’s independence. This discussion and disclosure informed the Audit Committee of the independent registered public accounting firm’s independence, and assisted the Audit Committee in evaluating that independence. The members of the Audit Committee concluded that the independent registered public accounting firm is independent from the Company and its management.
The members of the Audit Committee reviewed and discussed, with our management and independent registered public accounting firm, our audited consolidated balance sheet as of December 31, 20152021 and the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2015,2021, including associated footnotes and Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The members of the Audit Committee (or the ChairmanChair of the Committee, pursuant to a delegation of authority) reviewed and pre-approved all permissible non-audit services by our independent registered public accounting firm.
The members of the Audit Committee reviewed the Principal Executive Officer and Principal Financial Officer Certifications concerning the Company’s 20152021 Annual Report.
Based on the discussions with our independent registered public accounting firm concerning the audit, the independence discussions, the financial statement quarterly review, and additional matters deemed relevant and appropriate by the Audit Committee, including internal audit activities, the Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our 20152021 Annual Report.
Who has furnished this report?
This report has been furnished by the members of the Audit Committee:
JakeVickie L. Netterville (Chairman)Capps (Chair)
Richard A. LechleiterTeresa L. Kline
Donald A. WashburnBruce D. Perkins
Nathaniel M. Zilkha
The following summarizes the fees billed to us and our subsidiaries by KPMG for professional services rendered in 20152021 and 2014.2020.
AUDIT FEES
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2015 | 2014 | 2021 | 2020 | |||||||||||||||||||||||||||||
Fee Category | Amount($) | Percent | Amount($) | Percent | Amount ($) | Percent | Amount ($) | Percent | ||||||||||||||||||||||||
Audit fees | 1,282,000 | 76.2 | % | 1,175,378 | 71.4 | % | $ | 1,625,448 | 75.5 | % | $ | 1,500,000 | 79.6 | % | ||||||||||||||||||
Tax fees | 362,000 | 21.5 | % | 435,400 | 26.5 | % | $ | 100,000 | 4.6 | % | $ | 100,000 | 5.3 | % | ||||||||||||||||||
Audit-related fees | 28,327 | 1.7 | % | 25,000 | 1.5 | % | $ | 35,000 | 1.6 | % | $ | 35,000 | 1.8 | % | ||||||||||||||||||
All other fees | 10,097 | 0.6 | % | 9,400 | 0.6 | % | $ | 393,023 | 18.3 | % | $ | 250,000 | 13.3 | % | ||||||||||||||||||
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Total fees | 1,682,424 | 100.0 | % | 1,645,178 | 100.0 | % | $ | 2,153,471 | 100.0 | % | $ | 1,885,000 | 100.0 | % | ||||||||||||||||||
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Fees for audit servicesAudit fees include fees associated with the annual audit, our annual report on Form 10-K and the reviews of our quarterly reports on Form 10-Q, services that are normally provided by our registered independent public accounting firm in connection with statutory and regulatory filings or engagements and services that generally only our registered independent public accounting firm can provide. Audit-related fees relate to the 401k401(k) plan audit. Tax fees include tax compliance and limited tax consulting services. All other fees relate primarily to Medicare cost reporting services.due diligence and accounting research software. All of the services described above were pre-approved by the Audit Committee (or the ChairmanChair of the Audit Committee, pursuant to a delegation of authority).
Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors; Delegation of Pre-Approval Authority in Specified Instances
All audit and permissible non-audit services provided by the independent auditors are pre-approved by the Audit Committee (or the ChairmanChair of the Audit Committee, pursuant to a delegation of authority). These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. The Audit Committee has delegated authority to Mr. Netterville,Ms. Capps, the ChairmanChair of the Audit Committee, to address requests for pre-approval of specified types of transactions not included in the annual budget prepared by the independent auditors, provided that any such pre-approvals are presented to the full Audit Committee at its next meeting.
The following table shows beneficial ownership of our common stock as of April 15, 2016,14, 2022, unless otherwise indicated, by (i) each person known by us to beneficially own more than five percent of our common stock in accordance with Rule 13d-3 under the Exchange Act, (ii) each of our directors, director nominees, and Named Executive Officer during 2015Officers (as such term is defined under the heading “Compensation Discussion and Analysis” below), and (iii) all of our directors and executive officers as a group. Except as noted below, the persons named have sole voting and investment power with respect to all shares of common stock.
Unless otherwise indicated, the address of each of the individuals named in the table below under “Named Executive Officers and Directors (Including 2022 Director Nominees)” is c/o Amedisys, Inc., 3854 American Way, Suite A, Baton Rouge, LA 70816.
Name | Shares Beneficially Owned | Percent of Class(1) | ||||||
5% Stockholders | ||||||||
KKR Asset Management LLC and Affiliated Entities(2) | 4,836,608 | 14.5 | % | |||||
BlackRock, Inc.(3) | 4,354,435 | 13.0 | % | |||||
FMR LLC and Affiliated Entities(4) | 3,495,000 | 10.5 | % | |||||
The Vanguard Group, Inc.(5) | 2,794,519 | 8.4 | % | |||||
Dimensional Fund Advisors LP(6) | 1,825,392 | 5.5 | % | |||||
Named Executive Officers and Directors (Including 2016 Director Nominees) | ||||||||
Linda J. Hall, PhD(7) (2016 Director Nominee) | 24,531 | * | ||||||
Julie D. Klapstein(7) (2016 Director Nominee) | 0 | * | ||||||
Richard A. Lechleiter(7) (2016 Director Nominee) | 0 | * | ||||||
Jake L. Netterville(7) (2016 Director Nominee) | 85,022 | * | ||||||
Bruce D. Perkins(7) (2016 Director Nominee) | 9,354 | * | ||||||
Jeffrey A. Rideout, MD(7) (2016 Director Nominee) | 0 | * | ||||||
Donald A. Washburn(7) (2016 Director Nominee) | 66,920 | * | ||||||
Nathaniel M. Zilkha(7) (2016 Director Nominee) | 11,619 | * | ||||||
Paul B. Kusserow(8) (Named Executive Officer and 2016 Director Nominee) | 264,917 | * | ||||||
Ronald A. LaBorde(9) (Named Executive Officer and 2016 Director Nominee) | 239,155 | * | ||||||
Daniel P. McCoy(10) (Named Executive Officer) | 61,092 | * | ||||||
Lawrence R. Pernosky(11) (Named Executive Officer) | 44,063 | * | ||||||
Martin B. Howard(12) (Named Executive Officer) | 28,270 | * | ||||||
Dale E. Redman (Named Executive Officer) | 0 | * | ||||||
All Executive Officers and Directors as a Group (17 Persons) | 949,518 | 2.8 | % |
Name | Share sBeneficially Owned | Percent of Class(1) | ||||||
5% Stockholders | ||||||||
BlackRock, Inc.(2) | 3,758,301 | 11.5 | % | |||||
The Vanguard Group, Inc.(3) | 3,158,777 | 9.7 | % | |||||
Wellington Management Group LLP(4) | 1,812,411 | 5.6 | % | |||||
Ameriprise Financial, Inc.(5) | 1,742,916 | 5.4 | % | |||||
Named Executive Officers and Directors (Including 2022 Director Nominees) | ||||||||
Vickie L. Capps(6) (2022 Director Nominee) | 3,205 | * | ||||||
Molly J. Coye, MD(6) (2022 Director Nominee) | 2,205 | * | ||||||
Julie D. Klapstein(6) (2022 Director Nominee) | 9,418 | * | ||||||
Teresa L. Kline(6) (2022 Director Nominee) | 3,205 | * | ||||||
Bruce D. Perkins(6) (2022 Director Nominee) | 17,869 | * | ||||||
Jeffrey A. Rideout, MD(6) (2022 Director Nominee) | 2,722 | * | ||||||
Ivanetta Davis Samuels(6) | 987 | * | ||||||
Paul B. Kusserow(7) (Named Executive Officer and 2022 Director Nominee) | 527,002 | 1.6 | % | |||||
Scott G. Ginn(8) (Named Executive Officer) | 28,121 | * | ||||||
Christopher T. Gerard(9) (Named Executive Officer and 2022 Director Nominee) | 48,349 | * | ||||||
Sharon Brunecz(10) (Named Executive Officer) | 34,002 | * | ||||||
David L. Kemmerly(11) (Named Executive Officer) | 12,318 | * | ||||||
All Executive Officers and Directors as a Group (14 Persons) | 668,428 | 2.1 | % |
(*) | Less than one percent |
(1) | Based on |
(2) | This disclosure is based on a Schedule |
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It was reported that as investment advisor to a number of client accounts, KAM may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) 4,836,608 shares of Company common stock (the “Total Reported Shares”). It was also reported that Spruce Investors has directly acquired, and may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) 2,896,046 shares of Company common stock (which, for the avoidance of doubt, are included in the Total Reported Shares). It was also reported that as an investment advisor to Spruce Investors and one other client, KAM Fund Advisors, a direct wholly-owned subsidiary of KAM, may be deemed to have the power to vote or direct the vote of (and the power to dispose or direct the disposition of) a total of 2,899,055 shares of Company common stock (which, for the avoidance of doubt, are included in the Total Reported Shares).
Each of Kohlberg Kravis Roberts & Co. (as the holder of all of the outstanding equity interests in KAM), Spruce Holdings and Domestic LP (as the holders of all of the outstanding equity interests of Spruce Investors), Offshore LP (as the holder of all of the outstanding equity interests of Spruce Holdings), Domestic Limited (as the general partner of Domestic LP), Offshore Limited (as the general partner of Offshore LP), KKR Fund Holdings (as the holder of all of the outstanding equity interests of Offshore Limited), KKR Fund Holdings GP (as a general partner of KKR Fund Holdings), KKR Management Holdings (as the holder of all of the outstanding equity interests of Domestic Limited and the general partner of Kohlberg Kravis Roberts & Co.), KKR Management Holdings Corp. (as the general partner of KKR Management Holdings), KKR Group Holdings (as the holder of all of the outstanding equity interests in KKR Fund Holdings GP, a general partner of KKR Fund Holdings, and the sole shareholder of KKR Management Holdings Corp.), KKR Group (as the general partner of KKR Group Holdings), KKR & Co. (as the sole shareholder of KKR Group), KKR Management (as the general partner of KKR & Co.) and Messrs. Kravis and Roberts (as the designated members of KKR Management) may also be deemed to beneficially own some or all of the shares of Company common stock owned by the client accounts and reported on the Schedule 13D, as amended. It was noted that the filing of the Schedule 13D, as amended, shall not be construed as an admission that any of the KKR Reporting Persons is the beneficial owner of any of the Total Reported Shares.
The address of the principal business office of Offshore Limited, Domestic Limited, Kohlberg Kravis Roberts & Co., KKR Management Holdings, KKR Management Holdings Corp., KKR Fund Holdings, KKR Fund Holdings GP, KKR Group Holdings, KKR Group, KKR & Co., and KKR Management is c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th Street, Suite 4200, New York, New York 10019. The address of the principal business office of KAM, Spruce Investors, Spruce Holdings, Offshore LP, Domestic LP and KAM Fund Advisors is: c/o KKR Asset Management LLC 555 California Street, 50th Floor, San Francisco, California 94104. The address of the principal business office of Mr. Roberts is: c/o Kohlberg Kravis Roberts & Co. L.P., 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025.
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This disclosure is based on a Schedule |
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This disclosure is based on a Schedule 13G/A filed with the SEC on February 4, 2022, reporting beneficial ownership as of December 31, 2021, by Wellington Management Group LLP, Wellington Group Holdings LLP, and Wellington Investment Advisors Holdings LLP, in which they reported that each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP had shared voting power over 1,605,785 of the shares and shared dispositive power over 1,812,411 of the shares. The principal business address for Wellington Management Group LLP is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210. |
(5) | This disclosure is based on a Schedule 13G filed with the SEC |
Included in the “Shares Beneficially Owned” column |
Includes |
(8) | Includes 12,939 shares that Mr. Ginn has or will have within 60 days, the right to acquire pursuant to stock options. |
(9) | Includes |
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(10) | Ms. Brunecz resigned from the Company effective March 21, 2022. Includes 7,953 shares that Ms. Brunecz has the right to acquire pursuant to vested stock options. |
(11) | Includes |
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DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of our common stock to file reports of ownership and changes of ownership with the SEC. Copies of all filed reports are required to be furnished to us. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us during and with respect to 2021, as well as written representations by our directors and executive officers, we believe that each such person filed, on a timely basis, the reports required by Section 16(a) of the Exchange Act with respect to 2021.
EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 20152021
In accordance with SEC requirements, the following table provides information about awards outstanding and shares remaining available under our equity compensation plans (including any individual compensation arrangements) as of December 31, 2021.
Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||||||
Equity compensation plans approved by security Holders | 838,494 | $ | 30.18 | 1,274,934 | ||||||||||||||||||||
Equity compensation plans not approved by security Holders | – | – | – | |||||||||||||||||||||
Equity compensation plans approved by security holders | 273,973 | $ | 137.54 | 1,787,765 | ||||||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||||||
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Total | 838,494 | $ | 30.18 | 1,274,934 | 273,973 | $ | 137.54 | 1,787,765 | ||||||||||||||||
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PROPOSAL 3—ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”SAY ON PAY” VOTE)
General Information
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the ExchangeAct enable our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation paid to our “Named Executive Officers” as disclosed in this Proxy Statement in accordance with the Securities and Exchange Commission’sSEC’s rules.
Say-on-PaySay on Pay Vote Mechanics
We are asking our stockholders to provide advisory approval of the compensation paid to our “Named Executive Officers,” as described in the “Compensation Discussion and Analysis” (“CD&A”) section of this Proxy Statement (beginning on page 34)32) and the compensation tables and narrative disclosures following the CD&A.
This advisory vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and our compensation philosophy, policies and practices, as described in this Proxy Statement.
Consideration of the 20152021 Advisory Vote on Executive Compensation and 2015 Annual Meeting Voting Results, Generally
As discussed further in the CD&A, at our 20152021 Annual Meeting, 90.28%96.3% of the shares present in person or by proxy and entitled to vote on the matter voted to approve, in an advisory vote, the compensation paid to our Named Executive Officers, as described in our 20152021 Proxy Statement.
The Compensation Committee values the feedback of our stockholders and takes into account the outcome of Say-on-PaySay on Pay votes when considering future executive compensation arrangements and potential changes to our executive compensation program. TheOur Board of Directors has determined that the Company will hold anadopted a policy of providing for annual advisory (non-binding) vote votes from stockholders on executive compensationcompensation. The next say on an annual basis untilpay vote will occur at the 2023 Annual Meeting, and the next required advisory (non-binding) vote on the frequency of say-on-paysay on pay votes also occurs at the 20172023 Annual Meeting.
Highlights of our Executive Compensation Program
We believe that our executive compensation program:
Aligns executive compensation to business objectives and overall Company performance;
Attracts, retains, and motivates highly-qualified executives by offering market-competitive total compensation packages;
Balances the focus on short- vs. longer-term performance objectives through an appropriate mix of short-term cash incentive awards and equity incentive awards that vest over a number of years;
Has features designed to further align executive compensation with stockholder interests and mitigate risks, including: (i) cash bonus and equity award “claw-back” and forfeiture provisions for violating certain employment agreement covenants, (ii) a prohibition on “short sales” of and “hedging” Company securities (applicable to all employees), (iii)(ii) no minimum guaranteed cash bonus payments equity grants (with the exception of equity grants upon hire) or base salary increases and (iv)(iii) limited perquisites; and
Has certain features that are widely considered “best practices,” including employment agreement change-in-control provisions that only provide cash severance upon a change-in-control termination (i.e., a “double-trigger”) and do not provide for the payment of any excise tax gross-up amounts (other than for moving expenses).
Consistent with these goals, and as further discussed in the CD&A, we believe the Compensation Committee of our Board of Directors has designed an executive compensation program that: (i) rewards pay for performance, (ii) is competitive and reasonable as compared to compensation programs adopted by similarly-sized public companies in the industry and based on a review of broader public company and industry survey data and (iii) is cost-effective with limited perquisites and other personal benefits.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR”“FOR” THE SAY-ON-PAYSAY ON PAY PROPOSAL, AS STATED BY THE FOLLOWING RESOLUTION:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 20162022 Annual Meeting of Stockholders pursuant to the compensation disclosure
rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 20152021 Summary Compensation Table, and the other related tables and disclosures.”
The say-on-paysay on pay vote is advisory, and therefore not binding on the Company, our Board of Directors or our Compensation Committee. Our Board of Directors and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements.
Vote Required
Approval of this proposal requires the affirmative vote of a majority of the shares represented at the Meeting and entitled to vote.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) outlines our executive compensation philosophy, objectives and processes. It explains the decision making process used by the Compensation Committee of our Board of Directors (the “Compensation Committee”), the reasoning behind our executive compensation program, and, more specifically, the actions the Compensation Committee took related to the compensation of our “Named Executive Officers,” which under the SEC’s executive compensation disclosure rules consist of all persons who served as our principal executive officer and our principal financial officer during our last fiscal year and our next three highest-paidhighest paid executive officers who were serving as executive officers at the end of our last fiscal year.
In 2015,2021, our Named Executive Officers were as follows:
Paul B. Kusserow—Chief Executive Officer (until April 15, 2022) and Chairman of the Board;
Scott G. Ginn—Executive Vice President and Chief Financial Officer;
Christopher T. Gerard—President and Chief Operating Officer (until April 15, 2022), now our President and Chief Executive Officer (since April 15, 2022);
Ronald A. LaBorde—Vice Chairman and Chief Financial Officer
Daniel P. McCoy—Chief Operating Officer as of April 6, 2015
Lawrence R. Pernosky—Sharon Brunecz—Chief Human Resources Officer as of April(until March 21, 20152022); and
Martin B. Howard—David L. Kemmerly— Chief Information Officer asLegal and Government Affairs Officer.
Executive Summary
Business Overview
During 2021, we continued to execute on our strategic areas of April 6, 2015focus: Clinical Distinction, Employer of Choice, Operational Excellence and Efficiency and Driving Growth. In 2021, we had the great honor of caring for over 445,000 patients, making more than 11.5 million visits across our four lines of business. In August 2021, we closed on our acquisition of Contessa Health, Inc. (“Contessa”), a leader in hospital-at-home and skilled nursing facility (SNF) at-home services. In addition, in 2021, we acquired Visiting Nurse Association (“VNA”), a home health and hospice provider with locations in Nebraska and Iowa, and we acquired the regulatory assets of home health providers in New York and North Carolina. Other major accomplishments in 2021 included:
Maintained the highest Quality of Patient Care star score in the Home Health industry in the January 2022 Home Health Compare (“HHC”) release of 4.33 stars with at least 95% of our care centers at 4+ Stars and 67% of our care centers at 4.5+ Stars;
Dale E. Redman—Interim Chief Financial Officer from March 24, 2014 to April 6, 2015
Background—Executive Leadership Transition
2015 was another year of significant change forOutperformed the Company. The following executive leadership changes occurred in 2015:
Effective April 6, 2015, the Board appointed Ronald A. LaBorde, who was then serving as our Vice Chairman since December 16, 2014, as our Chief Financial Officer. Mr. LaBorde previously served as our President and Interim Chief Executive Officer and served as our President and Chief Financial Officer prior to that.industry on all Hospice Item Set (“HIS”) measures;
Effective April 6, 2015, Daniel P. McCoy was appointed as Chief Operating Officer ofWhile the Company.healthcare industry is reporting record increases in nursing turnover, in 2021, we reduced our nursing turnover to 26.8% from 29.5% in 2020; and
Effective April 21, 2015, Lawrence R. Pernosky was appointed as Chief Human Resources Officer ofHome Health same store total admissions grew 6% and Hospice same store total admissions grew 2%.
2021 Company Performance Highlights
In addition to the Company.strategic progress and high scores for patient quality outlined above, in 2021:
We increased adjusted EBITDA** by almost 10% over 2020 ($299.6 million* in 2021 compared to $273.5 million* in 2020);
Effective April 6, 2015, Martin B. Howard was appointed as Chief Information OfficerAdjusted net service revenue** increased by 6.6% over 2020, an increase of the Company.$136.1 million to $2,207.6 million in 2021 compared to $2,071.5 million in 2020;
Effective April 6, 2015, Dale E. Redman, who served asWe generated $189 million in cash flow from operations; and
We achieved between the target and maximum level of performance for the collective quality of patient care performance measure and achieved between the threshold and target level of performance for the collective people performance measure; our Interim Chief Financial Officer beginning in March 2014, retired fromadjusted EBITDA performance fell below the Company.threshold level (all performance goals are defined more fully on pages 39-42).
Due to
* | The impact of our acquisition of Contessa on August 1, 2021 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2021 long-term incentive (equity) and short-term incentive (cash bonus) |
performance targets as described in further detail later in this CD&A, as the Compensation Committee did not contemplate the Contessa acquisition at the time it set the 2021 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $280 million). The impact of the Contessa acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $299.6 million). |
** | See Appendix A hereto for the reconciliation of non-GAAP financial measures. |
Key 2021 Compensation Developments and Pay-for-Performance Highlights
Voluntary Waiver of AnnualShort-TermIncentive Cash Bonus Despite Performance Achievement: Despite the unique circumstances surrounding their appointment and continued service, 2015 compensation decisions for our Named Executive Officers differed fromearning a bonus payout equal to 35.31% of their respective target bonus amount based on achievement between the target and maximum level of performance for the collective quality of patient care performance measure and achievement between the threshold and target level of performance for the collective people performance measure, each of the Named Executive Officers voluntarily elected to forego their short-term incentive (cash bonus) payout for 2021. Additional information regarding our historical compensation practices. However, these decisions aligned toshort-term incentive (cash bonus) program appears under the heading “Details of our 2021 Executive Compensation philosophy going forward which places emphasis on a market competitive base salary, lower than market bonus and higher than market performance based equity award.
2015Program—2021 Annual Performance-Based Incentive Compensation Strategy—Tactical Decisions During a Time of Corporate Turnaround and Leadership Changes
The executive leadership changes described above caused the Compensation Committee to narrowly tailor portions of our 2015 compensation program based on identified recruitment and retention goals while continuing to emphasize the objective of linking executive compensation to the Company’s financial and operating performance and changes in stockholder value. The Compensation Committee awarded equity grants to new members of Company senior leadership in 2015 targeted towards these goals. See “Overview of our Executive Compensation Program.(Cash Bonuses).”
Key 2015 Compensation Developments and Pay-for-Performance Highlights in 2015
2015 Key Compensation Developments
Mr. LaBorde’s salary was reduced in connection with his appointment as Chief Financial Officer on April 6, 2015. NoneForfeiture of our other2021 Performance-Based Restricted Stock Units (“RSUs”) Due to Below-Threshold Performance: Adjusted EBITDA for 2021 fell below the threshold level of performance. Accordingly, each of the Named Executive Officers received a salary adjustment in 2015 (additional information regardingno shares of common stock with respect to their 2021 annual grant of performance-based RSUs, and Mr. Kusserow and Ms. Brunecz did not earn any shares based on the base salaries2021 performance tranche of all of our Named Executive Officers appears under the heading “Base Salaries”).
In 2015, the Compensation Committee resumed its practice of tying a portion of the vesting requirements associated with the equity grants under our annual long-term incentive plans to identified multi-year performance targets set during the first quarter of the subject fiscal year. A significant component of this approach in 2015 was to provide “front-loaded” equity grants to the Named Executive Officers (additionaltheir respective prior year grants. Additional information on this topic appears under the heading “Pay for Performance—Front-Loaded Equity Awards”)“Details of our 2021 Executive Compensation Program—2021 Long-Term Incentives (Equity-Based Compensation).”
EffectiveCompensation Adjustments: Each of our Named Executive Officers (other than Mr. Kusserow) received a modest salary adjustment in the first quarter of 2021, after two straight years of no changes to the fixed compensation of our executive officers. Our Compensation Committee made no changes to the base salaries or target total direct compensation for our Named Executive Officers in 2022 other than for Mr. Gerard in connection with his promotion to Chief Executive Officer, as discussed below under “2022 CEO Transition.”
No Employment Agreements: With the expiration of December 17, 2015, as consideration for his voluntarily agreeing to relinquish any remaining rights under the terms of hisMr. Kusserow’s employment agreement thein December 2021, we no longer have individual employment agreements with any of our executive officers.
Succession and Retention Awards: In February 2021, our Compensation Committee approved an equity awardsuccession and transition retention awards for all of our executive officers other than Mr. Kusserow in the form of backloaded time-based RSUs that vest one-half in 2024 and one-half in 2025, to Mr. LaBorde underpromote the termsretention of our executive officers and ensure succession planning for key roles in light of the Company’s 2008 Omnibus Incentive Compensation Plan. The equity award consisted of: (a) 75,000 time-based vesting Non-Qualified Stock Options, (b) 75,000 performance-based vesting Non-Qualified Stock Options, (c) 27,500 time-based vesting Restricted Share Units,planned transition of the Chief Executive Officer role and (d) 27,500 performance-based vesting Restricted Share Units (additionalin recognition of the history of industry leading performance over the tenure of the executive team. Additional information on this topic appears under the heading “Ronald A. LaBorde—December 2015 Equity Bonus”)“Details of our 2021 Executive Compensation Program—2021 Long-Term Incentives (Equity-Based Compensation).”
2015 Pay-for-Performance Highlights
The “target” bonus opportunity for each Named2022 CEO Transition: In January 2022, Mr. Kusserow informed our Board of Directors of his decision to retire as Chief Executive Officer is expressedeffective April 15, 2022, and the Board of Directors appointed Mr. Gerard to serve as a percentagethe Company’s President and Chief Executive Officer effective April 15, 2022. In connection with Mr. Gerard’s promotion to Chief Executive Officer, the Compensation Committee:
Increased Mr. Gerard’s base salary to $900,000, effective February 26, 2022;
Increased his target bonus to 125% of base salary. Forsalary for 2022; and
Approved an annual equity award comprised of a mix of time-based stock options (25%), time-based RSUs (25%) and performance-based RSUs (50%) valued at $3.5 million.
2021 Say on Pay Vote Results
As part of the Compensation Committee’s efforts to ensure that the interests of our eligible Named Executive Officers such bonus opportunityare aligned with those of our stockholders, the Compensation Committee considers the results of the Company’s prior stockholder advisory votes on executive compensation. Our most recent Say on Pay vote was set at 25%held in 2021 and yielded an approval by 96.3% of their respective base salaries. These percentages were lower than the percentages used invotes cast. Based on this high level of support, we did not make any additional changes to the overall structure of our 2014 annual incentive compensation program in 2021 as a result of any specific feedback from stockholders.
Our Compensation and Governance Practices & Policies
We believe the changefollowing practices and policies promote sound compensation governance and are in the Company’s executive compensation philosophybest interests of our stockholders and relatively larger “front-loaded” equity grants to the Named Executive Officers.executives:
What We Do | What We Do Not Do | |
✓ Heavy emphasis on performance-based variable compensation | X No significant perquisites | |
✓ Majority of long-term incentive awards are performance-based | X No “single-trigger” termination payments upon a change in control | |
✓ Robust stock ownership guidelines for executive officers and directors (6x base salary for our Chief Executive Officer; 3x base salary for our other executive officers; and 6x annual base retainer for our non-employee directors) | X No hedging of Company stock | |
✓ Compensation Committee comprised solely of independent directors | X No pledging of Company stock (other than for Mr. Kusserow pursuant to a one-time waiver of this policy granted by the Board in 2018 solely with respect to Mr. Kusserow) | |
✓ Independent compensation consultant | X No multi-year guarantees for salary increases | |
✓ Regular risk assessments | X No discretionary bonuses | |
✓ “Double-trigger” termination payments upon a change in control | X No tax gross-ups on termination payments following a change in control | |
✓ Conduct annual reviews of share utilization | X No repricing or backdating stock options without stockholder approval |
Overview of our Executive Compensation Program
Our executive compensation program consists of:
Base salary;salary set with reference to competitive market levels;
Annual performance-based incentives (cash bonuses); that are in line with competitive practices;
Long-term incentives;incentives that are materially performance-based;
Severance, as applicable; and
Retirement, health and welfare benefits.benefits consistent with those provided to all employees.
Generally duringDuring the first fiscal quarter of each year, the Compensation Committee (i) establishes the performance measures under our current year cash bonus and long-term (equity-based) incentive compensation plans, as applicable, and (ii) determines whether the performance conditions for recently-completed performance periods have been satisfied. The Compensation Committee reviews executive officer compensation throughout the year to determine whether there are going to be any base salary adjustments for, or grants of, long-term incentive equity awards to our executive officers effective as of April 1 of the current fiscal year, (ii) establishes the performance measures under our current year cash bonus and long-term (equity-based) incentive compensation plans, as applicable, and (iii) determines whether the performance conditions for recently-completed performance periods have been satisfied.officers.
As mentioned above, 2015 was a year of significant change for our Company, including the addition of several key members of senior leadership. The compensation awarded to the Company’s executive officers who joined the Company in 2015 was structured such that base salaries were competitive to market and annual bonus opportunities slightly below market levels, with one-time front-loaded equity grants featuring a mix of time-based and performance-based vesting conditions over six years. The Compensation Committee believed this structure would align the interests of the executive officers with the interests of the Company’s stockholders such
that if the Company met or exceeded the annual performance goals, the total annual compensation for each executive officer would exceed median market levels at similarly-sized public companies in the Company’s industry. Because of the unique nature of the equity awards granted to the executive officers in 2015 and the purpose of such awards, the Compensation Committee does not intend for such executive officers to receive any additional equity grants in the foreseeable future.
Consideration of the 2015 Advisory Vote on Executive Compensation and 2015 Annual Meeting Voting Results, Generally
At our 2015 Annual Meeting, 90.28% of the shares present in person or by proxy and entitled to vote on the matter voted to approve, in an advisory vote, the compensation paid to our Named Executive Officers, as described in our 2015 Proxy Statement. We believe these results demonstrate strong stockholder support for our overall executive compensation objectives.
The Compensation Committee values the feedback of our stockholders and takes into account the outcome of Say-on-Pay votes when considering future executive compensation arrangements and potential changes to our executive compensation program.
Governance Standards Applicable to our Executive Compensation Program
Our Board and the Compensation Committee maintain governance standards applicable to our executive compensation program, including the following key practices:
A Compensation Committee comprised solely of independent directors;
An independent compensation consultant that reports to and is directed by the Compensation Committee, and that provides no other services to the Company;
An Insider Trading Policy that prohibits our executive officers (and independent Board members) from pledging Company securities as collateral for loans or keeping any Company securities in a margin account and that bars ownership of financial instruments or participation in investment strategies that hedge the economic risk of owning Company stock;
Change in control cash severance payments that are contingent upon a qualifying transaction and a qualifying termination of employment (commonly referred to as a “double trigger”); and
No tax gross-ups (other than for moving expenses) including no tax gross-ups for any excise taxes in conjunction with payments that are contingent upon a change in control.
Compensation Philosophy and Objectives
Our compensation philosophy, which extends to all employees including our Named Executive Officers, is designed to align employee and stockholder interests. Our objective is to pay fairly based upon the employee’s position, experience and performance. Employees may be rewarded through additional compensation, for example, in the form
of a cash bonus or an equity, grant, when we meet or exceed targeted business objectives. Certain employees are also eligible to receive incentive compensation based on both individual and/or Company performance.
Our approach to annual compensation for our executive officers aligns with competitive norms while reflecting our pay for performance philosophy and motivating our executives to continued achievement of business objectives and stockholder value creation. Our executive officer compensation approach includes:
the review of executive salaries annually but only making adjustments periodically, based on performance or change in role and other factors, and not automatically on an annual basis;
balancing the performance measures for our short-term incentives (cash bonus) across corporate financial and corporate strategic measures that are critical to long-term success in the healthcare industry: quality of care to our patients and the retention and engagement of our people;
a scaled payout of short-term incentives (cash bonus) at 50%-200% of target depending on actual level of performance achieved compared to threshold, target, and maximum levels of performance objectives;
at least 50% of long-term incentives are in the form of performance-based equity;
a scaled payout of performance-based restricted stock units at 50%-200% of target depending on actual level of performance achieved for our annual equity awards; and
tying 100% of executive incentive payouts to achievement of corporate-level performance objectives within metrics we believe contribute to stockholder value creation.
The objectives of our compensation philosophy are described below:
• | Stockholder-aligned. |
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• | Market-driven. We structure our compensation programs to be competitive in the total compensation that they offer. |
• | Focused on the |
Compensation Administration
Role of the Compensation Committee
Pursuant to the terms of its charter, the. The Compensation Committee is responsible for the review and approval of all aspects of our executive compensation program and makes all decisions regarding the compensation of our executive officers. Per its charter, the Compensation Committee’s primaryThese responsibilities with respect to executive compensation are as follows:include:
Review and approval of corporate long-term and short-term incentive goals and objectives relevant to executive compensation;
Evaluation of the performance of our Chief Executive Officer and review of our Chief Executive Officer’s evaluation of the performance of our other executive officers;
Evaluation of the competitiveness of the total compensation package for our executive officers;
Evaluation and approval of executive officer employment, severance and change-in-control agreements, including any amendments thereto, and any title change for any executive officer; and
Approval of any changes to the total compensation package for our executive officers, including but not limited to changes to benefits, base salary, annual cash incentive and long-term equity incentive award opportunities and retention programs.
Additional information regarding the Compensation Committee’s responsibilities is set forth in its charter, a copy of which appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Corporate Governance.“Governance.” Information from this website is not incorporated by reference into this proxy statement.
Role of the Independent Compensation Consultant
Consultants. The Compensation Committee’s charter grants the Compensation Committee has the authority to retain experts in the field of executive compensation to assist the Compensation Committee in fulfilling its duties. In 2015,2021, the Compensation Committee engaged Pearl Meyer (the “Consultant”)retained Pay Governance as its compensation consultant.consultant (the “Consultant”). In 2015,2021, the Consultant provided the following consulting services to the Compensation Committee:
ExecutiveProvided compensation review and related advicebenchmarking information for the current fiscal year, including advice relating to the front-loaded equity grantsour executive officers who report directly to our NamedChief Executive Officers and Mr. LaBorde’s December 2015 equity bonus.Officer.
The Consultant assistedProvided analysis and advice regarding the Compensation Committee in determining the performance metrics under our 2015 annual (cash bonus) incentive compensation planspeer group used for providing market pay program, levels, and the design of our 2015 long-term incentive grant.information.
Based onProvided analysis and support in relation to the Compensation Committee’s review and discussion of published public companyour compensation philosophy and industry survey data, the Consultant provided information regarding the competitiveness and reasonableness of the 2015 Named Executive Officer short-term (cash bonus)strategy for delivering short and long-term (equity-based) incentive opportunities at “target.”incentives.
An evaluationProvided analysis and advice with respect to share ownership guidelines for our executive officers and non-employee directors.
Reviewed and provided observations on our executive compensation practices in relation to those of our peers and industry comparators.
Provided advice and analysis regarding the calculation of the Company’s pay-for-performance relationship and how that relationship comparesCEO to public companies in the healthcare services and facilities sectors and similarly-sized public companies across multiple industries.median employee pay ratio.
Compensation review and related adviceProvided compensation benchmarking information for the current fiscal year for selected members of our non-executive officer senior management.
Non-employee director compensation review and related advice. directors.
AssistanceAdvised as to market practice with the preparation of the compensation-related portions of our 2015 Proxy Statement.respect to clawback policies.
UpdatesProvided updates regarding compensation-related issues, trends and regulatory changes.
Compensation Consultant Independence
Because the Consultant did not and does not provide any non-compensation related services to our Company and based on a review of the Consultant’s engagement in relation to the SEC’s guidance on factors to assess in relation to consultant independence, we believe that the Consultant is and was independent of management and provides and provided the Compensation Committee with objective advice. As part of its engagement, the Consultant participated in meetings with both the Compensation Committee and senior management to learn more about our business strategy and executive compensation objectives. The Compensation Committee retainsretained the Consultant directly, although in carrying out assignments, the Consultant also interactsinteracted in certain capacities with our management-level employees. All such assignments are approved by the ChairmanChair of the Compensation Committee, Nathaniel M. Zilkha.Committee.
For additional information, please refer to the discussion on page 22 under the heading “Compensation Consultant Independence and Conflicts of Interest Assessment.”
Role of the President and Chief Executive Officer
and Chairman of the Board. In the course of deliberating certain 20152021 compensation decisions for our Named Executive Officers, the Compensation Committee took into account the recommendations of Mr. Kusserow regarding the compensation of our other executive officers, including the compensation packages of the executive officers who joined the Company in 2015.officers. Mr. Kusserow’s recommendations were based upon his assessment of each executive officer’s individual role, retention considerations and market factors. The Compensation Committee reviewed these recommendations before making its decision. While the Compensation Committee requested Mr. Kusserow to be present at certain Committee meetings when executive compensation was discussed, Mr. Kusserow did not play any role in the Compensation Committee’s deliberation of matters impacting his own compensation, and only Compensation Committee members are permitted to vote on matters related to executive officer compensation.
Review of Peer Group, Industry and Survey Data
For decisions regardingThe peer group used for benchmarking executive officer compensation and non-employee director compensation and compensation design in 2021 consisted of the design of our fiscal year 2015 short-term and long-term incentive compensation plans and for decisions regardingfollowing companies:
• Acadia Healthcare Company, Inc. | • LHC Group, Inc. | |||
• AMN Healthcare Services, Inc. | • MEDNAX, Inc. | |||
• Brookdale Senior Living Inc. | • ModivCare Inc. | |||
• Chemed Corporation | • National HealthCare Corporation | |||
• Civitas Solutions, Inc. | • Option Care Health, Inc. | |||
• Cross Country Healthcare, Inc. | • Select Medical Holdings Corporation | |||
• Encompass Health Corporation | • The Ensign Group, Inc. | |||
• Healthcare Services Group, Inc. |
The Consultant has used the compensation of Named Executive Officers, the Consultant provided informationfollowing guidelines in recommending a peer group to the Compensation Committee regarding the executive compensation practices ofCommittee: (a) similarly-sized public companies across multiple industries and (b) companies in theprimarily included healthcare services and healthcare facilities, sectors, in order to both provide context for the Compensation Committee’s decisions(b) similarly-sized based on revenue and to help ensure that the various components of their respective compensation packages were within a reasonably competitive range. The information was basedmarket capitalization, and (c) comparable business operations, primarily focusing on the Consultant’s review of nationally recognized published survey data.home health, hospice and personal care, but also dialysis, ambulatory services, rehabilitation facilities, diagnostic laboratories and healthcare staffing companies.
Evaluating the Overall Competitiveness and Reasonableness of our 20152021 Incentive Compensation Program
. Based on its review of the information described above, the Compensation Committee determined that the components of our 20152021 Named Executive Officer compensation program were reasonable. Given the Company’s leadership changes in 2015, the Compensation Committee determined that it would (i) set the “target” bonus opportunity at 25% of base salary for each of our Named Executive Officers and (ii) grant long-term incentive awards intended to motivate and retain our Named Executive Officers and align their interests with the interests of the Company’s stockholders.
While the Compensation Committee generally considers available peer group, industry and survey data to be helpful in understanding how our compensation levels compare to other companies, peer group, industry and survey data are only one factor that the Compensation Committee may consider in making its decisions regarding executive compensation. Furthermore, the Company does not conduct a full compensation benchmarking
analysis and an identification of peer groups each year, so such peer group information may not be available every year. For example, the Compensation Committee also considers the alignment of our then-current compensation practices with our compensation philosophy, program structure, retention and succession goals and other factors (such as the integration of large acquisitions) before making compensation decisions.
ComponentsLevel of Compensation
We compensate our executive officers, including our Named Executive Officers, through the following components:
Base salary;
Annual performance-based incentive compensation (cash bonus awards);
Long-term incentives (equity-based awards);
Severance; and
Retirement, health and welfare benefits and, if deemed appropriate, perquisites.
. In determining how each executive officer’s total compensation package is allocated among these components, the Compensation Committee emphasizes the components that reward the accomplishment of business objectives and create stockholder value. Concurrently, the Compensation Committee believes it is appropriate to provide our executive officers with a reasonable level of guaranteed compensation through base salary and benefits, together with significant opportunity for additional compensation through annual and long-term incentives.incentives that align executive rewards with stockholders. Generally, if targeted performance levels are not achieved, our executive officers’ total compensation is likely to be at or below the median of comparable positions at similarly-sized public companies in our industry. Alternatively, if the targeted performance levels are exceeded, our executive officers’ total compensation is likely to be above the median of comparable positions at similarly-sized public companies in our industry.
Mix of Pay
. Our executive officersNamed Executive Officers have a highersignificant percentage of variabletheir total compensation relative to our other employees.in the form of long-term incentives. The Compensation Committee believes this is appropriate because of the direct influence that these officers have on our long-term financial performance. Generally, the majority of the total targeted annual compensation for our executive officers, including our Named Executive Officers, is “at risk,” i.e., variable based on Company performance, to assure alignment with stockholder interests.
Details of our 2021 Executive Compensation Program
Base Salaries
We target our executive officers’ base salaries to be competitive when compared to the salary levels of persons holding similar positions at similarly-sized public companies in the healthcare services and facilities sectors. The Compensation Committee also considers each executive officer’s respective responsibilities, experience, expertise and individual performance when setting base salaries.
2015 Base Salary Determinationssalaries for our Named Executive Officers in 2020 and 2021 were as follows:
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Named Executive Officer | 2020 Salary | 2021 Salary | % Change | |||||||||
Paul B. Kusserow | $ | 900,000 | $ | 900,000 | — | |||||||
Scott G. Ginn | $ | 525,000 | $ | 575,000 | 9.5 | % | ||||||
Christopher T. Gerard | $ | 575,000 | $ | 650,000 | 13.0 | % | ||||||
Sharon Brunecz | $ | 400,000 | $ | 425,000 | 6.3 | % | ||||||
David L. Kemmerly | $ | 400,000 | $ | 425,000 | 6.3 | % |
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2021 Annual Performance-Based Incentive Compensation (Cash Bonuses)
As part of our executive compensation program, the Compensation Committee establishes annual incentive compensation performance measures for our executive officers, which performance measures are premised on our Company’s achievement of pre-determined financial or operational goals. The Compensation Committee reserves the ability to reduce (but not increase) the amounts earned as a result of a subjective annual review of the individual performance of each executive officer.
2015 Annual Incentive Compensation (Cash Bonus) Opportunities
The “target” bonus opportunity for each Named Executive Officer is expressed as a percentage of base salary. For our eligible Named Executive Officers, such bonus opportunity was set at 25% of their respective base salaries. Mr. Redman was not eligible to participate in the 2015 Short-Term Incentive Compensation (Cash Bonus) Plan. These percentages were lower than market for similarly-sized public companies in our industry and the percentages used in our 2014 annual incentive compensation program as a result of the relatively larger “front-loaded” equity grants to the Named Executive Officers, as discussed below under “Pay for Performance—Front-Loaded Equity Grants.”
For 2015, if the2021 target performance conditions for the award opportunity were met, each of the Named Executive Officers would earn 25% of their base salary based on the achievement of a pre-defined corporate performance measure (but such awards would not exceed 25% of base salary even if the performance measure were exceeded). If the target performance conditions for the award opportunity were not met, the Named Executive Officers would not earn any cash bonus. The Compensation Committee, in its discretion, reserved the ability to reduce (but not increase) the amounts earned as a result of a subjective review of the performance of each executive officer. Target incentive opportunities were set based on our Company’s historical practices and the Compensation Committee’s desire to provide a meaningful award for achieving outstanding performance.
For 2015,2021, the annual short-term incentive (cash bonus) compensation opportunitythresholds, targets and stretch/maximums were as follows (the Committee uses linearly interpolation to determine payouts in between performance levels listed below):
Performance Measure | Metric Weighting | Threshold | Target | Stretch / Maximum | Actual Performance | % of Target Achievement | Weighted Payout (% of Target Achievement Metric Weighting) | |||||||||||||||||||||
Adjusted EBITDA** | 70 | % | $ | 300 Million | $ | 320 Million | $ | 340 Million | $ | 280.0 Million | 0 | % | 0 | % | ||||||||||||||
Quality of Patient Care(1) | ||||||||||||||||||||||||||||
- Metrics: | ||||||||||||||||||||||||||||
60-day ACH | 7.5 | % | 15.4 | % | 15.2 | % | 14.9 | % | 14.5 | % | 200 | % | 15 | % | ||||||||||||||
3-day EOL | 7.5 | % | 70.0 | % | 74.5 | % | 78.0 | % | 74.1 | % | 87.5 | % | 6.56 | % | ||||||||||||||
Total Quality | 15 | % | 143.75 | % | 21.56 | % | ||||||||||||||||||||||
People(2) | ||||||||||||||||||||||||||||
- Gate: | ||||||||||||||||||||||||||||
Pulse Survey Action Planning | 70 | %+ | — | — | 90.1 | % | ||||||||||||||||||||||
- Metrics: | ||||||||||||||||||||||||||||
Nursing |
Turnover | 10 | % | 27.0 | % | 24.0 | % | 21.2 | % | 26.8 | % | 50 | % | 5 | % | ||||||||||||||
Pulse Survey Employee Participation | 5 | % | 65 | % | 75 | % | 85 | % | 83 | % | 175 | % | 8.75 | % | ||||||||||||||
Total People | 15 | % | 91.66 | % | 13.75 | % | ||||||||||||||||||||||
Potential Payout (% of Target) | 50%-99.9 | % | 100 | % | Up to 200 | % | ||||||||||||||||||||||
Overall | 100 | % | 35.31 | % |
** | Adjusted EBITDA is defined as adjusted earnings before net interest expense, provision for income taxes, depreciation and amortization excluding certain items. See Appendix A hereto for the reconciliation of non-GAAP financial measures. The impact of our acquisition of Contessa on August 1, 2021 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2021 long-term incentive (equity) and short-term incentive (cash bonus) performance targets, as the Compensation Committee did not contemplate the Contessa acquisition at the time it set the 2021 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $280 million). The impact of the Contessa acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $299.6 million). |
(1) | For 2021, the Named Executive Officers would be eligible to earn the quality of patient care performance measure based on achievement of threshold, target and stretch/maximum performance goals based on a (i) 60-day acute care hospitalization (“ACH”) rate metric and (ii) three-day end of life (“EOL”) metric for the second half of 2021, assessing hospice staff visits to patients in the last three days of life, as follows: |
Quality of Patient Care Performance Measure Improvement Metrics | Threshold | Target | Stretch/Maximum | |||||||||
60-day ACH | 15.4 | % | 15.2 | % | 14.9 | % | ||||||
Three-day EOL | 70.0 | % | 74.5 | % | 78.0 | % |
If the Company’s ACH rate, calculated as the percentage of all eligible home health episodes that ended in hospitalization out of all completed home health episodes within each given 12-month period, was equal to or less than 15.4%, the ACH portion of the quality of patient care measure would be met, with payout based on a sliding scale (applying linear interpolation for performance between payout levels) as follows:
50% of the overallmeasure would be earned if the ACH rate were 15.4% or lower but more than 15.2%;
100% of the measure would be earned if the ACH rate were 15.2% or lower but more than 14.9%;
up to 200% of the measure would be earned if the ACH rate were 14.9% or lower.
If the Company’s three-day EOL measure for the second half of 2021†, calculated as the percentage of hospice patients who have received in-person visits from a registered nurse or a medical social worker on at least two of the final three days of life and excludes lengths of stays of two days or less, was greater than or equal to 70.0%, the three-day EOL portion of the quality of patient care measure would be met, with payout based on a sliding scale (applying linear interpolation for performance between payout levels) as follows:
50% of the measure would be earned if three-day EOL performance were 70.0% or greater but less than 74.5%;
100% of the measure would be earned if three-day EOL performance were 74.5% or greater but less than 78.0%;
up to 200% of the measure would be earned if three-day EOL performance were 78.0% or higher.
† | A three-day EOL goal for 2021 (full-year results) was initially established by the Compensation Committee in February 2021. CMS revised the three-day EOL metric calculation in 2021 to include visits by a registered nurse or medical social worker in at least two of the last three days of life and to exclude lengths of stays of two days or less. Accordingly, in July 2021, the Compensation Committee approved an updated three-day EOL performance measure for the 2021 short-term incentive compensation plan to a three-day EOL performance metric for the second half of 2021 using the revised calculation and adjusted upward the threshold, target and maximum performance goals. |
The ACH rate and the three-day EOL measure had a distribution weighting of 7.5% each, for a total 15% distribution weighting for the collective quality of patient care performance measure.
(2) | The people performance measure, which comprised 15% of the cash bonus incentive opportunity for 2021, was a corporate level performance measure with a performance “gate” based on achievement of at least 70% of the Company’s leaders creating action plans based on feedback received from the employee pulse survey. If the “gate” measure were met, then the Named Executive Officers would be eligible to earn the people performance measure based on achievement of threshold, target and stretch/maximum performance goals based on (i) a nursing turnover metric, weighted at 10% of the people performance measure, and (ii) a metric assessing employee participation in the employee pulse survey, weighted at 5% of the people performance measure, as follows: |
People Performance Measure Improvement Metrics | Threshold | Target | Stretch/Maximum | |||||||||
Nursing turnover | 27.0 | % | 24.0 | % | 21.2 | % | ||||||
Employee pulse survey participation | 65 | % | 75 | % | 85 | % |
If the Company’s nursing turnover rate was equal to or less than 27.0%, the nursing turnover rate portion of the people performance measure would be met, with payout based on a sliding scale (applying linear interpolation for performance between payout levels) as follows:
50% of adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”)the measure would be earned if the nursing turnover rate were 27.0% or lower but more than 24.0%;
100% of nothe measure would be earned if the nursing turnover rate were 24.0% or lower but more than 21.2%;
up to 200% of the measure would be earned if the nursing turnover rate were 21.2% or lower.
If the Company’s pulse survey participation rate, calculated as the percentage of employees who completed the employee pulse survey, was 65% or more, the pulse survey participation portion of the people performance measure would be met, with payout based on a sliding scale (applying linear interpolation for performance between payout levels) as follows:
50% of the measure would be earned if the participation rate were 65% or higher but less than $110 million.75%;
100% of the measure would be earned if the participation rate were 75% or more but less than 85%;
up to 200% of the measure would be earned if the participation rate were 85% or more.
The nursing turnover rate had a distribution weighting of 10%, and the pulse survey employee participation rate had a distribution weighting of 5%, for a total 15% distribution weighting for the collective people performance measure.
In establishing the performance levels, the Compensation Committee considered the target level of performance reasonable and achievable, but not without management’s significant effort.effort, and established a stretch/maximum performance goal so that the Named Executive Officers had greater incentive and greater reward if even higher levels of performance were achieved on each of the adjusted EBITDA, quality of patient care and people performance measures. The Compensation Committee also set a threshold level of performance for each performance measure,
such that no bonus would be earned for performance below that level. The Compensation Committee felt it was appropriate to set adjusted EBITDA as 70% of the sole performance measure because it believes that adjusted EBITDA growth encourages our executive officers to focus on improving earnings and profitable growth. It also believes that this measure is aligned with our overall objective of creating long-term value for our stockholders. The Compensation Committee also believed it was in the best interest of the Company’s stockholders to balance the financial performance measure with reward for the quality of patient care and people performance measures.
Our adjusted 2015 EBITDA was $112 million, which exceededThe Compensation Committee retains the target ($110 million) performance level underdiscretion to reduce (but not increase) any Named Executive Officer’s incentive earned based on individual performance. The Compensation Committee did not exercise this discretion in 2021; however, as discussed below, the plan.**Named Executive Officers voluntarily elected to forego their 2021 annual incentive (cash bonus) compensation.
Taking thisthe achievement of each of the performance measures at the levels indicated in the above table into account, the Compensation Committee certified the Company’s level of achievement of the performance targetgoals on March 3, 2016, andFebruary 17, 2022. While the Compensation Committee approved paying out cash bonuses at the “target” bonus opportunity, pro-rated for time in role when applicable, to the eligible Named Executive Officers (Messrs. Kusserow, LaBorde, McCoy, Pernoskyearned a bonus payout equal to 35.31% of their respective Target Bonus amount, each of the Named Executive Officers voluntarily elected to forego their short-term incentive (cash bonus) payout for 2021. The amount of cash bonuses earned by and Howard)paid to the Named Executive Officers for 2021 are as follows: Mr. Kusserow—$218,750; Mr. LaBorde—$123,438; Mr. McCoy—$84,375; Mr. Pernosky—$70,313; and Mr. Howard—$64,125. In each case, such bonus payments, less applicable taxes, withholdings and deductions, were payable in connection with the Company’s next regularly-scheduled payroll period in accordance with the Company’s normal payroll practices.
Named Executive Officer | Base Salary | Target Bonus (% of Base Salary) | Bonus Earned ($) (35.31% of Target) | Bonus Paid ($) | ||||||||||||
Paul B. Kusserow | $ | 900,000 | 50 | % | $ | 158,895 | $ | 0 | ||||||||
Scott G. Ginn | $ | 575,000 | 100 | % | $ | 203,032 | $ | 0 | ||||||||
Christopher T. Gerard | $ | 650,000 | 100 | % | $ | 229,515 | $ | 0 | ||||||||
Sharon Brunecz | $ | 425,000 | 75 | % | $ | 112,550 | $ | 0 | ||||||||
David L. Kemmerly | $ | 425,000 | 75 | % | $ | 112,550 | $ | 0 |
2021 Long-Term Incentives (Equity-Based Compensation)
Long-term incentives, in the form of equity-based compensation, are used to balance the short-term focus of our annual cash incentive compensation program with performance incentives that generally vest over multi-year periods.four years. The Compensation Committee believes that providing long-term incentive opportunities supports our compensation philosophy by aligning the interests of our Named Executive Officers, and other long-term incentive compensation plan participants, with those of our stockholders.
Currently, all equity-based compensation is granted in accordance with the terms of our 20082018 Omnibus Incentive Compensation Plan, which is a comprehensive incentive compensation plan that provides for various equity-based awards and also provides for limited cash awards.Plan.
We believe that grants of equity-based compensation:
Motivate participants to focus on the creation of stockholder value in both the short- and long-term;
Reinforce the link between the creation of stockholder value and compensation;
Enable us to provide competitive levels of total compensation; and
Aid in the retention of our Named Executive Officers and other long-term incentive plan participants.
2015 Equity-Based Incentive Compensation—Plan Design Considerations
It has been our Company’s historical practice to tie a portion of the vesting requirements associated with the equity grants under our annual long-term incentive plans to identified multi-year performance targets set during the first quarter of the subject fiscal year. In 2015, the Compensation Committee resumed its practice of tying a portion of the vesting requirements associated with the equity grants under our annual long-term incentive plans to identified multi-year performance targets set during the first quarter of the subject fiscal year.
Pay for Performance—Front-LoadedAnnual Equity Awards to our Named Executive Officers (Other Than Our Former Chief Executive Officer)
The. Beginning in 2019, the Compensation Committee believes thatCommittee’s compensation strategy changed from large up-front grants of performance-based full value shares and options to our newly hired and promoted Named Executive Officers in the year of their employment commencement or promotion, as applicable, to annual equity awards consistent with market practice. Consistent with this strategy, in 2021, the Named Executive Officers’ compensation packagesOfficers other than Mr. Kusserow (whose equity awards granted in 2019 were structured to limit guaranteed compensationthe only equity awards he received for the duration of the
three-year term of his Amended and provide strong pay-for-performance incentives. A significant component of this approach was to provide “front-loaded”Restated Employment Agreement) were awarded equity grants as described below.comprised of the following:
Equity Mix | % of Grant Value | |||
Performance-Based RSUs | 50 | % | ||
Time-Based RSUs | 25 | % | ||
Time-Based Stock Options | 25 | % |
As contemplated by his employment agreement, during the first quarter of 2015 (effective March 31, 2015), Mr. Kusserow was granted (i) 75,000 performance-based restricted shares of the Company’s common stock and (ii) performance-based non-qualified stock options to purchase 250,000 shares of the Company’s common stock. Both the performance-based restricted shares and the performance-based stock options will vest, if at all, based on the certification by the Compensation Committee of the achievement of identified performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated and pro-rated vesting provisions as provided in the employment agreement). The exercise price of the non-qualified stock options was set based on the closing price of the Company’s common stock on the date of grant ($26.78), and the options have a ten-year term.
Unless Mr. Kusserow’s employment is terminated for “Cause” (as defined in his employment agreement), he shall have until the earlier of (A) the expiration date of any option granted pursuant to his employment agreement or (B) 90 days following termination of his employment in which to exercise any of such options that were vested as of the termination date. If his employment is terminated for Cause, there shall be no post-termination exercise period, and all vested and unvested options shall terminate immediately upon termination of employment.
On May 1, 2015, Mr. McCoy was granted (i) 75,000 performance-based stock options and (ii) 75,000 time-based stock options. The exercise price of the stock options was set based on the closing price of the Company’s common stock on the date of grant ($27.35), and the options have a ten-year term. The performance-based stock options will vest, if at all, based on the certification by the Compensation Committee of the achievement of performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated, pro-rated and catch-up vesting provisions as provided in the award agreements), assuming Mr. McCoy is still employed by the Company on the vesting dates. The time-based stock options will vest in equal, 25% installments on each of May 1, 2016, May 1, 2017, May 1, 2018, and May 1, 2019 (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreements), assuming Mr. McCoy remains employed by the Company on each such date. Unless Mr. McCoy’s employment is terminated for “Cause” (as defined in the Key Executive Severance Plan), he shall have until the earlier of (A) May 1, 2025 or (B) the 90th day following Mr. McCoy’s termination of employment to exercise any of such options that were vested as of the termination date. If his employment is terminated for Cause, there shall be no post-termination exercise period, and all vested and unvested unexercised options shall terminate as of the date of termination of employment.
On June 4, 2015, Mr. McCoy was granted (i) 18,750 performance-based restricted stock units and (ii) 18,750 time-based restricted stock units. The performance-based stock units will vest, if at all, based on the certification by the Compensation Committee of the achievement of performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated, pro-rated and catch-up vesting provisions as provided in the award agreements), assuming Mr. McCoy is still employed by the Company on the vesting dates. The time-based restricted stock units will vest in approximately 25% installments on each of June 4, 2016, June 4, 2017, June 4, 2018, and June 4, 2019 (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreements), assuming Mr. McCoy remains employed by the Company on each such date.
On May 1, 2015, Mr. Pernosky was granted (i) 45,000 performance-based stock options and (ii) 45,000 time-based stock options. The exercise price of the stock options was set based on the closing price of the Company’s common stock on the date of grant ($27.35), and the options have a ten-year term. The performance-based stock options will vest, if at all, based on the certification by the Compensation Committee of the achievement of identified performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated, pro-rated and catch-up vesting provisions as provided in the award agreements), assuming Mr. Pernosky is still employed by the Company on the vesting dates. The time-based stock options will vest in equal, 25% installments on each of May 1, 2016, May 1, 2017, May 1, 2018, and May 1, 2019 (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreements), assuming Mr. Pernosky remains employed by the Company on each such date. Unless Mr. Pernosky’s employment is terminated for “Cause” (as defined in the Key Executive Severance Plan), he shall have until the earlier of (A) May 1, 2025 or (B) the 90th day following Mr. Pernosky’s termination of employment to exercise any of such options that were vested as of the termination date. If his employment is terminated for Cause, there shall be no post-termination exercise period, and all vested and unvested unexercised options shall terminate as of the date of termination of employment.
On June 4, 2015, Mr. Pernosky was granted (i) 15,000 performance-based restricted stock units and (ii) 15,000 time-based restricted stock units. The performance-based restricted stock units will vest if at all, based on the certification by the Compensation Committeesubject to achievement of the achievementstated performance goal for 2021 and satisfaction of identified performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated, pro-rated and catch-upadditional time-based vesting provisions as provided in the award agreements), assuming Mr.��Pernosky is still employed by the Company on the vesting dates. The time-based restricted stock units will vest in equal, 25% installments on each of June 4, 2016, June 4, 2017, June 4, 2018, and June 4, 2019 (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreements), assuming Mr. Pernosky remains employed by the Company on each such date.
On May 1, 2015, Mr. Howard was granted (i) 37,500 performance-based stock options and (ii) 37,500 time-based stock options. The exercise price of the stock options was set based on the closing price of the
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On June 4, 2015, Mr. Howard was granted (i) 12,500 performance-based restricted stock units and (ii) 12,500 time-based restricted stock units. The performance-based restricted stock units will vest, if at all, based on the certification by the Compensation Committee of the achievement of identified performance targets for each of fiscal years 2015, 2016, 2017 and 2018 (subject to certain accelerated, pro-rated and catch-up vesting provisions as provided in the award agreements), assuming Mr. Howard is still employed by the Company on the vesting dates. The time-based restricted stock units will vest in approximately one-third installments on each of June 4, 2019, June 4, 2020, and June 4, 2021 (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreements), assuming Mr. Howard remains employed by the Company on each such date.
conditions. The Compensation Committee believes that the 2015 equity awardsthis strategy will motivateincentivize the Named Executive Officers to increase stockholder value over the four-year termperformance period of the awardsrestricted stock units and life of the stock options by:
Increasing Stockholder Return—the Named Executive Officers’ options were granted with fair market value exercise prices. Therefore, they will not realize any value from their stock options unless the market value of our common stock appreciates.
Achieving specified financialSpecified Financial and operational goals—Operational Goals—50% of the 2015 equity awards granted to the Named Executive Officers in 2021 (based on the value of such awards) relate to performance-based compensation in the form of performance-based restricted stock units.
The 2021 annual equity awards were as follows:
Named Executive Officer | Date of Grant | Value of Award ($) | Performance-Based RSUs (# at Target Performance) (50% of Award) | Time-Based RSUs (#) (25% of Award) | Time-Based Stock Options (#) (25% of Award) | Stock Option Exercise Price ($) | ||||||||||||||||||
Scott G. Ginn | 2/17/2021 | $ | 1,500,000 | 2,541 | 1,271 | 3,200 | $ | 295.20 | ||||||||||||||||
Christopher T. Gerard | 2/17/2021 | $ | 1,800,000 | 3,049 | 1,525 | 3,840 | $ | 295.20 | ||||||||||||||||
Sharon Brunecz | 2/17/2021 | $ | 750,000 | 1,271 | 636 | 1,600 | $ | 295.20 | ||||||||||||||||
David L. Kemmerly | 2/17/2021 | $ | 750,000 | 1,271 | 636 | 1,600 | $ | 295.20 |
The time-based RSUs and stock options and performance-based restricted stock.
vest Accelerated Vesting—2015 Equity Awardsone-fourth
It should be noted that in the course of our arms-length negotiations with Mr. Kusserow with respect to his employment agreement, there were reported rumors and public speculation related to a possible strategic transaction involving our company. The Compensation Committee, therefore, was tasked with designing a compensation package for Mr. Kusserow that would not only ensure his recruitment, but also would align his interests with those of our stockholders by enabling him to consider strategic transactions that may be in the best interests of our stockholders without undue concern each year over whether the transaction would jeopardize his own employment or significantly disrupt the environment of his employment.
Accordingly, Mr. Kusserow’s employment agreement provides that his 2015 equity awards shall vest immediately in full upon a change in control (“single trigger”). The Compensation Committee carefully weighed the cost of the “single-trigger” vesting acceleration provision and believesfour years beginning on February 20, 2022, assuming that the significant stock option component (approximately 77%) of Mr. Kusserow’s 2015 Equity Awards strikes an appropriate balance between providing meaningful severance protection and avoiding a significant windfall upon an employment termination. For additional information, see the discussion beginning on page 60 of this proxy statement (“Potential Payments upon Termination or Change in Control”).
Our company does not intend to issue equity awards with a “single-trigger” vesting features in the future. We adopted an amendment to our 2008 Omnibus Incentive Compensation Plan eliminating “single-trigger” vesting provisions for equity awards granted after April 23, 2015.
Ronald A. LaBorde—December 2015 Equity Bonus
Effective as of December 17, 2015, as consideration for his voluntarily agreeing to relinquish any remaining rights under the terms of his employment agreement, the Compensation Committee approved an equity award to Mr. LaBorde under the terms of the Company’s 2008 Omnibus Incentive Compensation Plan. The equity award consisted of: (a) 75,000 time-based vesting Non-Qualified Stock Options (the “Time-Based Vesting Options”), each such Option contingently entitling Mr. LaBorde to purchase one share of the Company’s common stock at an exercise price of $41.38 per share (subject to the vesting schedules and other terms and conditions appearing in the award agreement for such Options), (b) 75,000 performance-based vesting Non-Qualified Stock Options (the “Performance-Based Vesting Options”), each such Option contingently entitling Mr. LaBorde to purchase one share of the Company’s common stock at an exercise price of $41.38 per share (subject to the vesting schedules and other terms and conditions appearing in the award agreement for such Options), (c) 27,500 time-based vesting Restricted Share Units (“Time-Based Vesting RSUs”), each such RSU contingently entitling Mr. LaBorde to receive one fully-vested share of the Company’s common stock (subject to the vesting schedules and other terms and conditions set forth in the award agreement for such RSUs), and (d) 27,500 performance-based vesting RSUs (the “Performance-Based Vesting RSUs”), each such RSU contingently entitling Mr. LaBorde to receive one fully-vested share of the Company’s common stock (subject to the vesting schedules and other terms and conditions set forth in the award agreement for such RSUs).
Both the Time-Based Vesting Options and the Time-Based Vesting RSUs vest in one-fourth increments on the first through fourth anniversaries of the grant date, provided that Mr. LaBordeNamed Executive Officer remains employed by the Company on each suchthe applicable vesting date (subjectdate. The performance-based RSUs vest based on achievement of the identified performance target for fiscal year 2021 and additional time-based vesting in equal one-fourth installments over four years.
Performance Measure Established for 2021 Annual Grants and 2021 Performance Tranche for Prior Year Grants. The performance-based RSUs granted in 2021 and a portion of the performance-based awards made in prior years vest based on our 2021 performance in adjusted EBITDA against a pre-established goal. For the 2021 annual grants to certain pro-ratedour Named Executive Officers other than Mr. Kusserow, the Compensation Committee set the performance target at adjusted EBITDA of $300 million (threshold), $320 million (target) and accelerated vesting provisions as provided under$340 million (stretch/maximum), with incremental payouts between threshold and target and between target and stretch/maximum calculated on a dollar for dollar basis (i.e. every $1 change in adjusted EBITDA will yield an additional payout, once threshold has been met). If threshold was not achieved, the respective award agreements for such awards). Bothgrant would not vest. The 2021 performance tranche of the Performance-Based Vesting Optionsperformance-based RSUs granted to Mr. Kusserow in January 2019 pursuant to his Amended and Restated Employment Agreement and the Performance-Based Vesting RSUs shall vest,2021 performance tranche of the awards granted to Ms. Brunecz in the year in which she joined the Company were only payable at the target level of performance, if at all,all. The Company communicated the adjusted EBITDA performance target to the executive officers in February 2021.
The impact of our acquisition of Contessa on August 1, 2021 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2021 long-term incentive (equity) and short-term incentive (cash bonus) performance targets, as the Compensation Committee did not contemplate the Contessa acquisition at the time it set the 2021 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $280.0 million). The impact of the Contessa acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $299.6 million).
Actual performance of $280.0 million was below the threshold level of performance. Accordingly, the Named Executive Officers (other than Mr. Kusserow) received no shares of common stock with respect to their 2021 annual grant of performance-based RSUs, and Mr. Kusserow and Ms. Brunecz did not earn any shares based on the certification by2021 performance tranche of their respective prior year grants, as reflected in the following table:
Named Executive Officer | Shares Earned from 2021 Award | Shares Earned from Previous Grants (2021 Performance Tranche) | ||||||
Paul B. Kusserow | — | — | (1) | |||||
Scott G. Ginn | — | — | ||||||
Christopher T. Gerard | — | — | ||||||
Sharon Brunecz | — | — | (1) | |||||
David L. Kemmerly | — | — |
(1) | The 2021 performance tranche of the awards granted to Mr. Kusserow in January 2019 pursuant to his Amended and Restated Employment Agreement and to Ms. Brunecz in the year in which she joined the Company were only payable at the target level of performance (100%), if at all. |
In setting the performance target for the long-term incentive equity awards to our Named Executive Officers at adjusted EBITDA of $320 million (target), the Compensation Committee of the achievement of identified performance goals for fiscal years 2015 through 2018, respectively, and Mr. LaBorde’s continued employment through stated anniversaries of the grant date (subject to certain accelerated and pro-rated vesting provisions as provided in the award agreement for such RSUs; providedconsidered that with respect to any RSUs that have not vested for which there are performance periods that have not been completed, such pro-rated vesting shall occur only to the extent the Company achieves the performance measure for the then-applicable performance period). Assuming alladjusted EBITDA is also one of the performance conditions are satisfied, 100%measures for the annual incentive compensation (cash bonus) opportunity, but the Compensation Committee believed that it was an appropriate measure for both components of compensation because it is one of three separate measures for the annual incentive compensation (cash bonus) opportunity and because the Compensation Committee believes that adjusted EBITDA growth encourages our executive officers to focus on improving earnings and profitable growth and that this measure is aligned with our overall objective of creating long-term value for our stockholders.
Succession/Transition Retention Awards to our Named Executive Officers (Other Than Our Former Chief Executive Officer). In February 2021, our Compensation Committee approved succession and transition retention awards for all of our executive officers other than Mr. Kusserow (whose equity awards granted in 2019 were the only equity awards he received for the duration of the Performance-Based Optionsthree-year term of his Amended and 100%Restated Employment Agreement). The succession awards were in the form of backloaded time-based RSUs that vest one-half on February 20, 2024 and one-half on February 20, 2025, to promote the retention of our executive officers and ensure succession planning for key roles in light of the Performance-Based RSUs would be fully-vested asplanned transition of the fourth anniversaryChief Executive Officer role and in recognition of the grant date.history of industry leading performance over the tenure of the executive team, including a three-year cumulative shareholder return of 454.5% over the three-year period ended December 31, 2020, which was among the highest in our peer group. The Options have a ten-year term. For 2015,value and amount of the performance criteria for Mr. LaBorde’s Performance-Based Vesting Optionssuccession and transition retention awards are as follows:
Named Executive Officer | Date of Grant | Value ($) | Time-Based RSUs (#) | |||||||||
Scott G. Ginn | 2/17/2021 | $ | 2,000,000 | 6,776 | ||||||||
Christopher T. Gerard | 2/17/2021 | $ | 3,000,000 | 10,163 | ||||||||
Sharon Brunecz | 2/17/2021 | $ | 1,000,000 | 3,388 | ||||||||
David L. Kemmerly | 2/17/2021 | $ | 1,000,000 | 3,388 |
The time-based RSUs vest one-half on February 20, 2024 and one-half on February 20, 2025, assuming that the Performance-Based Vesting RSUs was basedNamed Executive Officer remains employed by the Company on the Company’s realizing adjusted EBITDA of no less than $110 million. Our adjusted 2015 EBITDA was $112 million, which exceeded the target ($110 million) performance level under the plan. Accordingly, Mr. LaBorde earned the portion of his Performance-Based Vesting Optionsapplicable vesting date.
Other Practices, Policies and Performance-Based Vesting RSUs tied to 2015 performance criteria upon the Compensation Committee’s certification that such performance criteria was met for 2015.Guidelines
Benefits
Our executive officers also participate in the retirement, health and welfare benefit programs generally available to our other employees, including paid vacation and paid Company holidays. In a few limited circumstances, the Company provides other benefits to our executive officers, as detailed in the tables following this CD&A. We do not provide our executive officers any&A, but we limit special benefits suchand perquisites for use only as supplementalnecessary to attract and retain executive retirement plans or company vehicles.talent.
Certain of our executive officers participate in our Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, eligible employees may elect to contribute on an after-tax basis between 1% and 15% of their annual pay through regular payroll deductions to purchase our common stock; provided, however, that an employee may not contribute more than $25,000 to the plan on an annual basis pursuant to Internal Revenue Service restrictions. Shares are purchased at a 15% discount of the market value of our common stock at the close of business on the last day of each fiscal quarter.
Key ExecutiveAmended and Restated Severance Plan for Executive Officers
The stated purpose of the KeyAmended and Restated Severance Plan for Executive Officers (the “Executive Severance PlanPlan”) is to provide a fair framework in the event of a termination of employment in certain circumstances of certain Company key executives.the Company’s executive officers. As of December 17, 2015,31, 2021, to be eligible for benefits under the Key Executive Severance Plan, an executive (each, a “Covered Executive”“Covered Executive”) must (1) be employed by the Company (through the Company’s common payroll agent, Amedisys Holding, L.L.C.) with anyin the position of an executive officer as appointed by the following job titles: Chief Operating Officer, Chief Financial Officer, Vice Chairman, Chief Human Resources Officer, Senior Vice PresidentBoard of Government Affairs, General Counsel, Chief Information Officer, Chief Strategy Officer, Chief Clinical Operations Officer, Chief Development Officer, Senior Vice President of Accounting/Controller, Senior Vice President of Operations, Senior Vice President of Talent,Directors or Senior Vice President of Total Rewards; (2) have been designated in writing by the Board of Directors or the Compensation Committee, as appropriate, as being covered by the Key Executive Severance Plan; and (3)(2) have executed and delivered to the Company (and not have revoked or attempted to revoke) the Company’s Executive Protective Covenants Agreement (“EPCA”EPCA” or other similarly named agreement). Our Chief Executive Officer is entitled to receive severance benefits for certain qualifying terminations pursuant to the separate Amedisys Holding, L.L.C. Amended and Restated Severance Plan for Chief Executive Officer. See “CEO Severance Plan” below.
If any Covered Executive is terminated by the Company without “Cause” or resigns with “Good Reason” in each case prior to a “Change in Control,” each as defined in the Key Executive Severance Plan, such Covered Executive shall be entitled to the following:
(a) Anan amount equal to one (1) times the sum of (A) the Covered Executive’s base salary, as in effect on the date of employment termination (or in the event a reduction in base salary is a basis for a termination with Good Reason, then the base salary in effect immediately prior to such reduction) and (B) the greater of (x) an amount equal to the cash bonus earned by the Covered Executive for the previous fiscal year or (y) an amount equal to twenty-five percent ofthe Covered Executive’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Covered Executive’s base salary as in effect on the date of employment termination (or, in the event a reduction in base salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), which amount shall be payable in substantially equal monthly installments in accordance with the Company’s normal payroll practices for a period of 12 months; and
(b) A lump-sum payment of $2,500 for the intended purpose of purchasing health insurance, but which can be used at the discretion of the Covered Executive.
months. Further, any unvested equity awards issued in the name of the Covered Executive as of the date of employment termination will vest in accordance with the terms contained in the applicable award agreement for such awards.
If any Covered Executive is terminated by the Company without “Cause” or resigns with “Good Reason” in each case within two years following a “Change in Control,” such Covered Executive shall be entitled to the following:
(a) Anan amount equal to two (2) times the sum of (A) the Covered Executive’s base salary, as in effect on the date of employment termination (or in the event a reduction in base salary is a basis for a termination with Good Reason, then the base salary in effect immediately prior to such reduction) and (B) the greater of (x) an amount equal to the cash bonus earned by the Covered Executive for the previous fiscal year or (y) an amount equal to twenty-five (25) percent ofthe Covered Executive’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Covered Executive’s base salary, as in effect on the date of employment termination (or, in the event a reduction in base salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), which amount shall be payable in substantially equal monthly installments in accordance with the Company’s normal payroll practices for a period of 12 months; and
(b) A lump-sum payment of $2,500 for the intended purpose of purchasing health insurance, but which can be used at the discretion of the Covered Executive.
lump sum. Further, any unvested equity awards issued in the name of the Covered Executive as of the date of employment termination will vest in accordance with the provisions of the 2018 Omnibus Incentive Compensation Plan or any successor thereto.
CEO Severance Plan
On January 6, 2022, the Compensation Committee approved and “Claw-Back” Provisions—adopted the Amedisys Holding, L.L.C. Amended and Restated Severance Plan for Chief Executive Employment Agreements
Officer (the “CEO Severance Plan”), which provides certain severance protections in the event of a qualifying termination of employment of the Chief Executive Officer. The employment agreement forCEO Severance Plan was applicable to Mr. Kusserow contains provisions entitling himuntil his retirement on April 15, 2022 and is now applicable to receive severance benefits for certain qualifying terminations,Mr. Gerard during his term as described under “Potential Payments upon TerminationChief Executive Officer.
Under the terms of the CEO Severance Plan, if the Chief Executive Officer is terminated by the Company without “Cause” or Change-in-Control,resigns with “Good Reason” in each case prior to a “Change in Control,” below. These triggers for severance payments were selected in order to permit Mr. Kusserow to focus on the interests of our Company and our stockholders without undue concern for his personal job security.
In return for severance benefits, Mr. Kusserow is bound by certain non-compete, non-solicitation, confidentiality and non-disclosure covenants,each as defined in his agreement. If therethe CEO Severance Plan, such Chief Executive Officer will be entitled to an amount equal to two (2) times the sum of (A) the Chief Executive Officer’s base salary, as in effect on the date of employment termination (or in the event a reduction in base salary is a breachbasis for a termination with Good Reason, then the base salary in effect immediately prior to such reduction), and (B) the greater of these covenants (each,(x) an amount equal to the cash bonus earned by the Chief Executive Officer for the previous fiscal year or (y) an amount equal to the Chief Executive Officer’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Chief Executive Officer’s base salary as in effect on the date of employment termination (or, in the event a “Forfeiture Event”)reduction in base salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), we are no longer obligated to makepayable in substantially equal monthly installments for a period of 12 months. Further, any severance payments otherwise due to him, and all unexercised stock options, nonvested stock and other nonvestedunvested equity awards are forfeited effectiveissued in the name of the Chief Executive Officer as of the date of employment termination will vest in accordance with the Forfeiture Event. Additionally,terms contained in the applicable award agreement for such awards.
If the Chief Executive Officer is terminated by the Company without “Cause” or resigns with “Good Reason” in each case within two years following a “Change in Control,” such Chief Executive Officer will be entitled to an amount equal to three (3) times the sum of (A) the Chief Executive Officer’s base salary, as in effect on the date of employment termination (or in the event of a breach, each agreement containsreduction in base salary is a “claw-back” provision obligating him to repaybasis for a termination with Good Reason, then the Company any “award gain” (as defined below) realized during the six-month periodbase salary in effect immediately prior to such reduction), and (B) the occurrencegreater of (x) an amount equal to the Forfeiture Event (or, if the breach occurs after Mr. Kusserow ceases to be employedcash bonus earned by the Company,Chief Executive Officer for the previous fiscal year or (y) an amount equal to the Chief Executive Officer’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Chief Executive Officer’s base salary as in effect on the date of employment termination of their employment) and for a period of 24 months following such date. As defined(or, in the employment agreement, “award gain” means:
event a reduction in respectbase salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), payable in a lump sum. Further, any unvested equity awards issued in the name of a given stock option exercise, the productChief Executive Officer as of (X) the fair market value per share of common stock at the date of such exercise (without regard to any subsequent changeemployment termination will vest in accordance with the market price of shares) minus the exercise price times (Y) the number of shares as to which the stock option was exercised at that date; and
in respect of any other settlement of any other cash bonus or equity award granted to the Named Executive Officer, the fair market valueprovisions of the cash2018 Omnibus Incentive Compensation Plan, as amended from time to time, or stock paid or payable to the Named Executive Officer (regardless of any elective deferral) less any cash or the fair market value of any stock or property (other than a cash award or equity award or award which would have itself then been forfeitable hereunder and excluding any payment of tax withholding) paid by the Named Executive Officer to us as a condition of or in connection with such settlement.
The Compensation Committee believes that these forfeiture provisions provide assurance that our business interests will be appropriately protected upon the termination of employment of Mr. Kusserow.successor thereto.
Stock Ownership
Included in the Corporate Governance Guidelines adopted by our Board of Directors are stock ownership requirements applicable to our Chief Executive Officer.Officer and our other executive officers. In an effort to more closely align our Chief Executive Officer’s interests with those of our stockholders, the Chief Executive Officer shallmust own Company shares with a fair market value equal to at least six times his base salary. As of December 31, 2021, Mr. Kusserow was in compliance with these ownership requirements. Mr. Gerard will have five years from the date of his appointment as Chief Executive Officer to come into compliance with these ownership requirements. As of April 15, 2022, Mr. Gerard was in compliance with these ownership requirements.
In addition, each other executive officer of the Company must own Company shares with a fair market value equal to at least three times theirhis or her base salary.
Mr. Kusserow will have five years from Each executive officer is required to retain at least half of the datenet after-tax shares received upon vesting or exercise of his or her equity awards until the holding requirement is met. As of December 16, 2014 appointment as President and Chief Executive Officer to come into31, 2021, each of our executive officers was in compliance with these ownership requirements.
Once the Chief Executive Officer or other executive officer accumulates shares with a value equal to the required multiple of base salary, he or annual retainer, heshe must retain the minimum number of shares originally accumulated to meet the threshold requirement on a going-forward basis. If the Company’s stock price subsequently declines after the stock ownership requirements are met, theyhe or she will not be required to acquire additional shares.
Equity Grant Practices
Annual incentive compensation is generally awarded, both to our Named Executive Officers
Tax and to other eligible employees, throughout the year. AllAccounting Implications of Compensation
The Compensation Committee decisions regarding annual incentive compensation are generally made concurrently withhas considered the filingaccounting and tax impact of our Annual Report on Form 10-K for the previous fiscal year.
Deductibility of Compensation
Internal Revenue Code Section 162(m) limits the amountvarious elements of compensation paidprovided to our executive officers that may be deductedto balance the potential cost to us with the benefit and value of the compensation to the executive officers, but those considerations have generally not been a material factor in determining amounts of compensation for our executive officers.
Employment Agreements
On December 16, 2021, the Amended and Restated Employment Agreement by usand among the Company, Paul B. Kusserow, and Amedisys Holding, L.L.C., dated as of September 27, 2018, as amended by Amendment to Amended and Restated Employment Agreement, dated as of February 18, 2021 (the “Amended and Restated Employment Agreement”), terminated by its terms. Mr. Kusserow’s employment with the Company continued without a formal employment agreement after the end of the term of the Amended and Restated Employment Agreement until his retirement effective April 15, 2022.
Pursuant to the terms of the Amended and Restated Employment Agreement, Mr. Kusserow was entitled to, among other things:
An annual base salary of not less than $900,000 (beginning January 1, 2019), subject to annual review for federal income tax purposesincrease (but not decrease) by the Compensation Committee;
Participate in any fiscalthe Company’s annual (cash bonus) incentive plan, with threshold, target and maximum award opportunities approved from year to $1 million. “Performance-based” compensation that has been approvedyear by our stockholders is notthe Compensation Committee; and
Equity awards with an estimated grant value of $18 million, calculated as of September 27, 2018, which were the sole equity awards granted to Mr. Kusserow during the three-year term of the Amended and Restated Employment Agreement.
In addition, under the terms of the Amended and Restated Employment Agreement, Mr. Kusserow was entitled to certain benefits if his employment was terminated due to his death or disability, if the Company terminated Mr. Kusserow’s employment without Cause or if Mr. Kusserow resigned with Good Reason, as defined in and as set forth under the Amended and Restated Employment Agreement.
Mr. Kusserow continues to be subject to certain restrictive covenants, including non-compete, non-solicitation, confidentiality and non-disparagement covenants that continue after the $1 million deduction limit. Allend of his employment.
We currently do not have any employment agreements in place with any of our equity-based incentive plans have been approvedexecutive officers.
2022 Executive Compensation Decisions
In the first quarter of 2022, we implemented the following pay practices:
In connection with Mr. Gerard’s promotion to Chief Executive Officer, the Compensation Committee:
Increased Mr. Gerard’s base salary to $900,000, effective February 26, 2022;
Increased his target bonus to 125% of base salary for 2022; and
Approved an annual equity award comprised of a mix of time-based stock options (25%), time-based RSUs (25%) and performance-based RSUs (50%) valued at $3.5 million.
As a result of Mr. Kusserow’s Amended and Restated Employment Agreement terminating by our stockholders, and awards under those plans, other than certain time-based vesting shares and nonvested stock, constitute “performance-based” compensation that is not subject to the Code Section 162(m) deduction limit. Whileits terms on December 16, 2021, the Compensation Committee intends that allapproved a compensation be deductible, there may be instances where potentially non-deductible compensation is providedpackage for Mr. Kusserow for 2022 to reward our executive officers consistent with our compensation philosophy for each compensation element.include:
A base salary of $900,000, which reflects no change from his current base salary;
No annual bonus; and
Our 2008 Omnibus Incentive Compensation Plan provides for qualifying
A one-time special equity award grant, comprised of a mix of time-based RSUs and performance-based compensation, including annual bonuses. The Plan allows us flexibilityRSUs valued at $3.5 million, in structuring our executive compensation programs while maximizing the tax deductibilityrecognition of awardsMr. Kusserow’s service to the benefit of the Company and to incentivize his continued service to the Company.
The Compensation Committee approved and adopted the Amedisys Holding, L.L.C. Amended and Restated Severance Plan for Chief Executive Officer (the “CEO Severance Plan”), which provides certain severance protections in the event of a qualifying termination of employment of the Chief Executive Officer. The CEO Severance Plan was applicable to Mr. Kusserow until his retirement on April 15, 2022 and is now applicable to Mr. Gerard.
Added an adjusted EBITDA “gate” of target level of performance to the 2022 short-term incentive compensation plan in order for any of the performance measures (quality of patient care and people performance goals) to pay out above the target level.
CEO Pay Ratio
In accordance with Item 402(u) of Regulation S-K, we determined the ratio of the annual total 2021 compensation of Mr. Kusserow, our stockholders, whether they are denominatedCEO, relative to the annual total 2021 compensation of our median employee.
For purposes of identifying the median-compensated employee, we used December 31, 2021 to determine our employee population and used the consistently applied compensation measure described below to determine our median employee. In accordance with Instruction 7 to Item 402(u) of Regulation S-K, we excluded the employees we acquired in cash or stock.
Mr. Kusserow’s annual total compensation for 2021 was $8,348,257 as reflected in the Summary Compensation Table on page 50. The 2021 annual total compensation for the median-compensated employee, calculated in the same manner, was estimated to be $64,558. Therefore, our CEO to median employee pay ratio is approximately 129.3:1.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of Amedisys, Inc. has reviewed and discussed the Compensation Discussion and Analysis with management, as required by Item 402(b) of Regulation S-K, and, based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the Meeting and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2015.2021.
Members of the Compensation Committee:
Nathaniel M. Zilkha (Chairman)Teresa L. Kline (Chairperson)
Vickie L. Capps
Julie D. Klapstein
Jake L. Netterville
Donald A. Washburn
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
TheVickie L. Capps, Julie D. Klapstein, Teresa L. Kline and Richard A. Lechleiter, who resigned from our Board of Directors on February 28, 2022, served as members of the Compensation Committee is composed of the directors listed as signatories to the above report.in 2021. During 2015:2021:
none of our executive officers was a director of another entity where one of that entity’s executive officers served on the Compensation Committee;
no member of the Compensation Committee was during the year or formerly an officer or employee of the Company or any of its subsidiaries;
no member of the Compensation Committee entered into any transaction with our Company in which the amount involved exceeded $120,000;
none of our executive officers served on the compensation committee of any entity where one of that entity’s executive officers served on the Compensation Committee; and
none of our executive officers served on the compensation committee of another entity where one of that entity’s executive officers served as a director on our Board of Directors.
20152021 SUMMARY COMPENSATION TABLE
The following table sets forth information concerning total compensation for our Named Executive Officers for 2015, 20142021, 2020 and 2013 (as applicable). For additional information on the compensation summarized below and other benefits, please refer to “Compensation Discussion and Analysis” (“CD&A”), above.2019.
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Paul B. Kusserow | 2015 | $905,289 | — | $ | 1,342,750 | 218,750 | 18,922 | (4) | 2,485,711 | |||||||||||||||||||
President and Chief Executive Officer (PEO) | 2014 | — | — | 8,661,250 | — | — | 8,661,250 | |||||||||||||||||||||
Ronald A. LaBorde | 2015 | 521,154 | — | 3,475,563 | 123,438 | 23,64 | (5) | 4,143,796 | ||||||||||||||||||||
Vice Chairman and Chief Financial Officer (PFO) (as of 4/6/15)(9) | 2014 | 597,308 | — | 1,012,750 | 625,000 | 21,747 | 2,256,805 | |||||||||||||||||||||
Vice Chairman (12/16/14 through 4/6/15) |
| 2013 |
|
| 475,000 |
|
| 39,187 |
|
| 849,215 |
|
| — |
|
| 18,764 |
|
| 1,382,166 |
| |||||||
Daniel P. McCoy | 2015 | 328,846 | — | 2,260,798 | 84,375 | 9,759 | (6) | 2,683,778 | ||||||||||||||||||||
Chief Operating Officer (as of 4/6/15) | ||||||||||||||||||||||||||||
Lawrence R. Pernosky | 2015 | 258,173 | — | 1,512,563 | 70,313 | 7,817 | (7) | 1,848,866 | ||||||||||||||||||||
Chief Human Resources Officer | ||||||||||||||||||||||||||||
Martin B. Howard | 2015 | 249,923 | — | 1,260,469 | 64,125 | 9,136 | (8) | 1,583,653 | ||||||||||||||||||||
Chief Information Officer | ||||||||||||||||||||||||||||
Dale E. Redman | 2015 | 124,615 | 75,000 | — | — | — | 199,615 | |||||||||||||||||||||
Interim Chief Financial Officer (3/24/14 through 4/6/15) (PFO)(10) | 2014 | 292,308 | 150,000 | — | — | — | 442,308 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||
Paul B. Kusserow | 2021 | $ | 900,000 | $ | — | $ | 7,245,979 | $ | — | $ | 158,895 | $ | 43,383 | (4) | $ | 8,348,257 | ||||||||||||||||
Chief Executive Officer and Chairman (PEO) (3) | 2020 | $ | 900,000 | $ | — | $ | 4,879,990 | $ | — | $ | 547,313 | $ | 34,673 | $ | 6,361,976 | |||||||||||||||||
2019 | $ | 899,327 | $ | — | $ | 7,346,127 | $ | 4,161,933 | $ | 393,705 | $ | 34,455 | $ | 12,835,547 | ||||||||||||||||||
Scott G. Ginn | 2021 | $ | 565,385 | $ | — | $ | 3,125,577 | $ | 375,050 | $ | 203,032 | $ | 10,897 | (5) | $ | 4,279,941 | ||||||||||||||||
Executive Vice President and Chief Financial Officer (PFO) (3) | 2020 | $ | 525,000 | $ | — | $ | 1,250,117 | $ | 246,353 | $ | 684,141 | $ | 10,132 | $ | 2,715,743 | |||||||||||||||||
2019 | $ | 525,000 | $ | — | $ | 1,246,059 | $ | 250,293 | $ | 688,984 | $ | 10,759 | $ | 2,721,095 | ||||||||||||||||||
Christopher T. Gerard | 2021 | $ | 635,577 | $ | — | $ | 4,350,363 | $ | 450,060 | $ | 229,515 | $ | 7,610 | (6) | $ | 5,673,125 | ||||||||||||||||
President and Chief Operating Officer (3) | 2020 | $ | 575,000 | $ | — | $ | 3,108,394 | $ | 295,673 | $ | 749,297 | $ | 7,974 | $ | 4,736,338 | |||||||||||||||||
2019 | $ | 575,000 | $ | — | $ | 2,524,023 | $ | 300,304 | $ | 754,601 | $ | 7,350 | $ | 4,161,278 | ||||||||||||||||||
Sharon Brunecz | 2021 | $ | 420,192 | $ | — | $ | 2,800,858 | $ | 187,525 | $ | 112,550 | $ | 7,705 | (8) | $ | 3,528,830 | ||||||||||||||||
Chief Human Resources Officer (7) | 2020 | $ | 400,000 | $ | — | $ | 1,677,559 | $ | 166,290 | $ | 434,375 | $ | 7,648 | $ | 2,685,872 | |||||||||||||||||
2019 | $ | 400,000 | $ | — | $ | 1,374,440 | $ | 168,921 | $ | 437,450 | $ | 7,128 | $ | 2,387,939 | ||||||||||||||||||
David L. Kemmerly | 2021 | $ | 420,192 | $ | — | $ | 1,563,084 | $ | 187,525 | $ | 112,550 | $ | 14,533 | (9) | $ | 2,297,884 | ||||||||||||||||
Chief Legal and Government Affairs Officer | 2020 | $ | 400,000 | $ | — | $ | 843,949 | $ | 166,290 | $ | 434,375 | $ | 14,651 | $ | 1,859,265 | |||||||||||||||||
2019 | $ | 400,000 | $ | — | $ | 841,468 | $ | 168,921 | $ | 437,450 | $ | 14,321 | $ | 1,862,160 |
(1) |
|
The values for stock in this column reflect the aggregate grant date fair value of stock awards granted during the fiscal years ended December 31, |
The amounts in this column reflect the amount earned under the annual performance-based non-equity incentive compensation plan for the applicable year. |
(3) | Effective April 15, 2022, Paul B. Kusserow, our former Chief Executive Officer and Chairman of the Board, retired as our Chief Executive Officer, and Christopher T. Gerard, our former President and Chief Operating Officer, was promoted to President and Chief Executive Officer, effective April 15, 2022. |
(4) | This amount consists of |
(5) | This amount consists of |
|
|
This amount consists of |
(7) | Ms. Brunecz resigned from the Company effective March 21, 2022. |
(8) | This amount consists of $7,524 for employer-paid contributions to Mrs. Brunecz pursuant to our 401(k) Benefit Plan and $181 for the cash payment of fractional shares related to stock vestings that occurred in 2021. |
(9) | This amount consists of $7,524 for employer-paid contributions to Mr. Kemmerly pursuant to our 401(k) Benefit Plan, $111 for the cash payment of fractional shares related to stock vesting that occurred in 2021 and $6,898 in costs attributable to life insurance premiums |
2021 GRANTS OF PLAN BASED AWARDS
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value ($) (7) | |||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
Paul B. Kusserow | ||||||||||||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(1) | 2/17/2021 | — | — | — | — | 24,546 | — | $ | 7,245,979 | |||||||||||||||||||||||||||
2021 Short Term (Cash Bonus) Incentive Plan | $ | 225,000 | $ | 450,000 | $ | 900,000 | — | — | — | — | — | |||||||||||||||||||||||||
Scott G. Ginn | ||||||||||||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(2) | 2/17/2021 | — | — | — | 1,271 | 2,541 | 5,082 | — | $ | 750,103 | ||||||||||||||||||||||||||
Time-Based Nonqualified Stock Options(4) | 2/17/2021 | — | — | — | — | — | — | 3,200 | $ | 375,050 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(5) | 2/17/2021 | — | — | — | — | — | — | 1,271 | $ | 375,199 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(6) | 2/17/2021 | — | — | — | — | — | — | 6,776 | $ | 2,000,275 | ||||||||||||||||||||||||||
2021 Short Term (Cash Bonus) Incentive Plan | $ | 287,500 | $ | 575,000 | $ | 1,150,000 | — | — | — | — | — | |||||||||||||||||||||||||
Christopher T. Gerard | ||||||||||||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(2) | 2/17/2021 | — | — | — | 1,525 | 3,049 | 6,098 | — | $ | 900,065 | ||||||||||||||||||||||||||
Time-Based Nonqualified Stock Options(4) | 2/17/2021 | — | — | — | — | — | — | 3,840 | $ | 450,060 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(5) | 2/17/2021 | — | — | — | — | — | — | 1,525 | $ | 450,180 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(6) | 2/17/2021 | — | — | — | — | — | — | 10,163 | $ | 3,000,118 | ||||||||||||||||||||||||||
2021 Short Term (Cash Bonus) Incentive Plan | $ | 325,000 | $ | 650,000 | $ | 1,300,000 | — | — | — | — | — | |||||||||||||||||||||||||
Sharon Brunecz | ||||||||||||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(2) | 2/17/2021 | — | — | — | 636 | 1,271 | 2,542 | — | $ | 375,199 | ||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(3) | 2/17/2021 | — | — | — | — | — | — | 4,193 | $ | 1,237,774 | ||||||||||||||||||||||||||
Time-Based Nonqualified Stock Options(4) | 2/17/2021 | — | — | — | — | — | — | 1,600 | $ | 187,525 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(5) | 2/17/2021 | — | — | — | — | — | — | 636 | $ | 187,747 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(6) | 2/17/2021 | — | — | — | — | — | — | 3,388 | $ | 1,000,138 | ||||||||||||||||||||||||||
2021 Short Term (Cash Bonus) Incentive Plan | $ | 159,375 | $ | 318,750 | $ | 637,500 | — | — | — | — | — | |||||||||||||||||||||||||
David L. Kemmerly | ||||||||||||||||||||||||||||||||||||
Performance-Based Restricted Stock Units(2) | 2/17/2021 | — | — | — | 636 | 1,271 | 2,542 | — | $ | 375,199 | ||||||||||||||||||||||||||
Time-Based Nonqualified Stock Options(4) | 2/17/2021 | — | — | — | — | — | — | 1,600 | $ | 187,525 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(5) | 2/17/2021 | — | — | — | — | — | — | 636 | $ | 187,747 | ||||||||||||||||||||||||||
Time-Vesting Restricted Stock Units(6) | 2/17/2021 | — | — | — | — | — | — | 3,388 | $ | 1,000,138 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value ($) (7) | |||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
2021 Short Term (Cash Bonus) Incentive Plan | $ | 159,375 | $ | 318,750 | $ | 637,500 | — | — | — | — | — |
The amounts shown in this row reflect the number of performance-based restricted stock units granted to Mr. |
|
2015 GRANTS OF PLAN-BASED AWARDS
The table below summarizes all grants of plan-based awards during the year ended December 31, 2015 to our Named Executive Officers. For additional information regarding the plan-based award grants summarized below, please refer to CD&A above.
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value ($) (16) | ||||||||||||
Target ($) | ||||||||||||||||
Paul B. Kusserow | ||||||||||||||||
Time-Based Nonqualified Stock Options | — | — | — | |||||||||||||
Time-Vesting Restricted Stock Units(1) | — | — | — | |||||||||||||
Performance-Based Nonqualified Stock Options(8) | 3/31/2015 | — | 62,500 | 840,625 | ||||||||||||
Performance-Based Restricted Stock Units(1)(12) | 3/31/2015 | — | 18,750 | 502,125 | ||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | 218,750 | — | — | |||||||||||||
Ronald A. LaBorde | ||||||||||||||||
Time-Based Nonqualified Stock Options(2) | 12/17/2015 | — | 75,000 | 1,642,500 | ||||||||||||
Time-Vesting Restricted Stock Units(1)(5) | 12/17/2015 | 27,500 | 1,137,950 | |||||||||||||
Performance-Based Nonqualified Stock Options(9) | 12/17/2015 | 18,750 | 410,625 | |||||||||||||
Performance-Based Restricted Stock Units(1)(13) | 12/17/2015 | 6,875 | 284,488 | |||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | 112,500 | — | — | |||||||||||||
Daniel P. McCoy | ||||||||||||||||
Time-Based Nonqualified Stock Options(3) | 5/1/2015 | — | 75,000 | 1,184,250 | ||||||||||||
Time-Vesting Restricted Stock Units(1)(6) | 6/4/2015 | — | 18,750 | 624,375 | ||||||||||||
Performance-Based Nonqualified Stock Options(10) | 5/1/2015 | — | 18,750 | 296,063 | ||||||||||||
Performance-Based Restricted Stock Units(1)(14) | 6/4/2015 | — | 4,688 | 156,110 | ||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | 112,500 | — | — | |||||||||||||
Lawrence R. Pernosky | ||||||||||||||||
Time-Based Nonqualified Stock Options(3) | 5/1/2015 | — | 45,000 | 710,550 | ||||||||||||
Time-Vesting Restricted Stock Units(1)(6) | 6/4/2015 | — | 15,000 | 499,500 | ||||||||||||
Performance-Based Nonqualified Stock Options(10) | 5/1/2015 | — | 11,250 | 177,638 | ||||||||||||
Performance-Based Restricted Stock Units(1)(14) | 6/4/2015 | — | 3,750 | 124,875 | ||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | 93,750 | — | — | |||||||||||||
Martin B. Howard | ||||||||||||||||
Time-Based Nonqualified Stock Options(4) | 5/1/2015 | — | 37,500 | 592,125 | ||||||||||||
Time-Vesting Restricted Stock Units(1)(7) | 6/4/2015 | — | 12,500 | 416,250 | ||||||||||||
Performance-Based Nonqualified Stock Options(11) | 5/1/2015 | — | 9,375 | 148,031 | ||||||||||||
Performance-Based Restricted Stock Units(1)(15) | 6/4/2015 | — | 3,125 | 104,063 | ||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | 85,500 | — | — | |||||||||||||
Dale E. Redman | ||||||||||||||||
Time-Based Nonqualified Stock Options | — | — | — | — | ||||||||||||
Time-Vesting Restricted Stock Units(1) | — | — | — | — | ||||||||||||
Performance-Based Nonqualified Stock Options | — | — | — | — | ||||||||||||
Performance-Based Restricted Stock Units(1) | — | — | — | — | ||||||||||||
2015 Short Term (Cash Bonus) Incentive Plan | — | — | — | — |
|
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The amounts shown in this row reflect the number of performance-based restricted stock units granted to Mrs. Brunecz on July 27, 2018, subject to achievement of the 2021 performance metric, which performance metric was established by the Compensation Committee on February 17, 2021 and certified as not achieved on February 17, 2022. |
(4) | The amounts shown in this row reflect the number of time-based non-qualified stock options granted to Mr. |
|
|
(5) | The amounts shown in this row reflect the number of time-vesting only restricted stock units granted to Mr. |
(6) |
|
The amounts shown in this row reflect the number of time-vesting only restricted stock units granted to Mr. |
|
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|
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|
|
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|
The amounts shown in this column reflect the “grant date fair value” of the |
OUTSTANDING EQUITY AWARDS AT 20152021 FISCAL YEAR ENDYEAR-END
The table below summarizes all outstanding equity awards at December 31, 2015 for our Named Executive Officers.
Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested ($) (2) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units Or Other Rights That Have Not Vested ($) (2) | |||||||||||||||||||||||||
Name | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||
Paul B. Kusserow | 62,500 | 187,500 | $ | 26.65 | 12/16/2024 | 75,000 | $ | 2,949,000 | — | $ | — | |||||||||||||||||||||
— | 62,500 | $ | 26.78 | 3/31/2025 | ||||||||||||||||||||||||||||
Ronald A. LaBorde | — | 75,000 | $ | 41.38 | 12/17/2025 | 117,379 | 4,615,342 | — | — | |||||||||||||||||||||||
— | 18,750 | $ | 41.38 | 12/17/2025 | ||||||||||||||||||||||||||||
Daniel P. McCoy | — | 75,000 | $ | 27.35 | 5/1/2025 | 23,438 | 921,582 | — | — | |||||||||||||||||||||||
— | 18,750 | $ | 27.35 | 5/1/2025 | ||||||||||||||||||||||||||||
Lawrence R. Pernosky | — | 45,000 | $ | 27.35 | 5/1/2025 | 18,750 | 737,250 | — | — | |||||||||||||||||||||||
11,250 | $ | 27.35 | 5/1/2025 | |||||||||||||||||||||||||||||
Martin B. Howard | — | 37,500 | $ | 27.35 | 5/1/2025 | 15,625 | 614,375 | — | — | |||||||||||||||||||||||
— | 9,375 | $ | 27.35 | 5/1/2025 | ||||||||||||||||||||||||||||
Dale E. Redman | — | — | — | — | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested ($) (2) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) | |||||||||||||||||||||||||
Name | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||
Paul B. Kusserow | 53,735 | 26,867 | $ | 114.78 | 1/2/2029 | 61,365 | $ | 9,933,766 | 24,546 | $ | 3,973,506 | |||||||||||||||||||||
Scott G. Ginn | 424 | — | $ | 58.69 | 7/19/2027 | 17,661 | $ | 2,858,963 | 1,271 | $ | 205,749 | |||||||||||||||||||||
6,995 | — | $ | 49.25 | 10/18/2027 | ||||||||||||||||||||||||||||
2,148 | 2,146 | $ | 127.11 | 2/20/2029 | ||||||||||||||||||||||||||||
750 | 2,247 | $ | 198.81 | 2/12/2030 | ||||||||||||||||||||||||||||
— | 3,200 | $ | 295.20 | 2/17/2031 | ||||||||||||||||||||||||||||
Christopher T. Gerard | 23,675 | — | $ | 46.35 | 1/20/2027 | 23,225 | $ | 3,759,663 | 1,525 | $ | 246,867 | |||||||||||||||||||||
2,576 | 2,576 | $ | 127.11 | 2/20/2029 | ||||||||||||||||||||||||||||
900 | 2,697 | $ | 198.81 | 2/12/2030 | ||||||||||||||||||||||||||||
— | 3,840 | $ | 295.20 | 2/17/2031 | ||||||||||||||||||||||||||||
Sharon Brunecz | 4,367 | 4,367 | $ | 93.76 | 7/27/2028 | 16,802 | $ | 2,719,908 | 636 | $ | 102,956 | |||||||||||||||||||||
1,450 | 1,448 | $ | 127.11 | 2/20/2029 | ||||||||||||||||||||||||||||
506 | 1,517 | $ | 198.81 | 2/12/2030 | ||||||||||||||||||||||||||||
— | 1,600 | $ | 295.20 | 2/17/2031 | ||||||||||||||||||||||||||||
David L. Kemmerly | 1,563 | — | $ | 27.35 | 5/1/2025 | 10,514 | $ | 1,702,006 | 636 | $ | 102,956 | |||||||||||||||||||||
725 | 1,448 | $ | 127.11 | 2/20/2029 | ||||||||||||||||||||||||||||
506 | 1,517 | $ | 198.81 | 2/12/2030 | ||||||||||||||||||||||||||||
— | 1,600 | $ | 295.20 | 2/17/2031 |
(1) | The contractual term of each grant of stock option awards is a ten-year period. |
Market value is based on the closing price on December 31, |
(3) | The amounts in this column include the |
VESTING SCHEDULE—SCHEDULE – OUTSTANDING EQUITY AWARDS
This table below summarizes the vesting schedule for all outstanding unvested equity awards held by our Named Executive Officers as of December 31, 2015.
Stock Awards | ||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) | Vesting Schedule of | Option Exercise Price ($) | Number of Shares or Units of Stock That Have Not Vested (#) | Vesting Schedule of Number of Shares or | |||||||||||
Paul B. Kusserow | 187,500 | 33% on each of 12/16/2016, 2017, and 2018 | $ | 26.65 | 56,250 | 33% on each of 12/16/2016, 2017, and 2018 | ||||||||||
62,500 | 100% on 03/31/2016 | $ | 26.78 | 18,750 | 100% on 03/31/2016 | |||||||||||
Ronald A. LaBorde | 75,000 | 25% on each of 12/17/2016, 2017, 2018 and 2019 | $ | 41.38 | 52,008 | 100% on 4/1/2016 | ||||||||||
18,750 | 25% on each of 12/17/2016, 2017, 2018 and 2019 | $ | 41.38 | 10,835 | 100% on 4/1/2016 | |||||||||||
20,161 | 50% on 4/1/2016 and 2017 | |||||||||||||||
27,500 | 25% on each of 12/17/2016, 2017, 2018, and 2019 | |||||||||||||||
6,875 | 25% on each of 12/17/2016, 2017, 2018, and 2019 | |||||||||||||||
Daniel P. McCoy | 75,000 | 25% on each of 5/1/2016, 2017, 2018, and 2019 | $ | 27.35 | 18,750 | 25% on each of 6/4/2016, 2017, 2018, and 2019 | ||||||||||
18,750 | 25% on each of 5/1/2016, 2017, 2018, and 2019 | $ | 27.35 | 4,688 | 25% on each of 6/4/2016, 2017, 2018, and 2019 | |||||||||||
Lawrence R. Pernosky | 45,000 | 25% on each of 5/1/2016, 2017, 2018, and 2019 | $ | 27.35 | 15,000 | 25% on each of 6/4/2016, 2017, 2018, and 2019 | ||||||||||
11,250 | 25% on each of 5/1/2016, 2017, 2018, and 2019 | $ | 27.35 | 3,750 | 25% on each of 6/4/2016, 2017, 2018, and 2019 | |||||||||||
Martin B. Howard | 37,500 | 33% on each of 5/1/2019, 2020, and 2021 | $ | 27.35 | 12,500 | 33% on each of 6/4/2019, 2020, and 2021 | ||||||||||
9,375 | 33% on each of 5/1/2016, 2017, and 2018 | $ | 27.35 | 3,125 | 33% on each of 6/4/2016, 2017, and 2018 | |||||||||||
Dale E. Redman | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) | Vesting Schedule of Unexercised Options | Option Exercise Price ($) | Number of Shares or Units of Stock That Have Not Vested (#) | Vesting Schedule of Number of Shares or | |||||||||||
Paul B. Kusserow | 26,867 | 100% on 1/2/2022 | $ | 114.78 | 12,273 | 100% on 1/2/2022 | ||||||||||
49,092 | 100% upon certification by the Board of Directors of the achievement of the 2021 performance metric | |||||||||||||||
Scott G. Ginn | 2,146 | 50% on each of 2/20/2022 and 2023 | $ | 127.11 | 983 | 50% on each of 2/20/2022 and 2023 | ||||||||||
2,247 | 33% on each of 2/20/2022, 2023 and 2024 | $ | 198.81 | 943 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||
3,200 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | $ | 295.20 | 1,271 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | |||||||||||
6,776 | 50% on each of 2/20/2024 and 2025 | |||||||||||||||
3,916 | 50% on each of 2/20/2022 and 2023 | |||||||||||||||
3,772 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||||||
Christopher T. Gerard | 2,576 | 50% on each of 2/20/2022 and 2023 | $ | 127.11 | 1,180 | 50% on each of 2/20/2022 and 2023 | ||||||||||
2,697 | 33% on each of 2/20/2022, 2023 and 2024 | $ | 198.81 | 1,131 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||
3,840 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | $ | 295.20 | 1,525 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | |||||||||||
10,163 | 50% on each of 2/20/2024 and 2025 | |||||||||||||||
4,700 | 50% on each of 2/20/2022 and 2023 | |||||||||||||||
4,526 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||||||
Sharon Brunecz | 4,367 | 100% on 7/27/2022 | $ | 93.76 | 2,096 | 100% on 7/27/2022 | ||||||||||
1,448 | 50% on each of 2/20/2022 and 2023 | $ | 127.11 | 664 | 50% on each of 2/20/2022 and 2023 | |||||||||||
1,517 | 33% on each of 2/20/2022, 2023 and 2024 | $ | 198.81 | 636 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||
1,600 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | $ | 295.20 | 636 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | |||||||||||
3,388 | 50% on each of 2/20/2024 and 2025 | |||||||||||||||
2,644 | 50% on each of 2/20/2022 and 2023 | |||||||||||||||
1,397 | 100% on 7/27/2022 | |||||||||||||||
2,795 | 50% on each of 7/27/2022 and 2023 | |||||||||||||||
2,546 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||||||
David L. Kemmerly | 1,448 | 50% on each of 2/20/2022 and 2023 | $ | 127.11 | 664 | 50% on each of 2/20/2022 and 2023 | ||||||||||
1,517 | 33% on each of 2/20/2022, 2023 and 2024 | $ | 198.81 | 636 | 33% on each of 2/20/2022, 2023 and 2024 | |||||||||||
1,600 | 25% on each of 2/20/2022, 2023, 2024 and 2025 | $ | 295.20 | 636 | 25% on each of 2/20/2022, 2023, 2024 and 2025 |
Option Awards | Stock Awards | |||||||||||
Name | Number of Securities Underlying Unexercised Options (#) | Vesting Schedule of Unexercised Options | Option Exercise Price ($) | Number of Shares or Units of Stock That Have Not Vested (#) | Vesting Schedule of Number of Shares or | |||||||
3,388 | 50% on each of 2/20/2024 and 2025 | |||||||||||
2,644 | 50% on each of 2/20/2022 and 2023 | |||||||||||
2,546 | 33% on each of 2/20/2022, 2023 and 2024 |
2015
2021 OPTION EXERCISES AND STOCK VESTED
The following table sets forth information regarding each exercise of stock options by our Named Executive Officers during the year ended December 31, 2015 and the vesting during the year ended December 31, 2015 of nonvested stock held by our Named Executive Officers.
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | ||||||||||||
Paul B. Kusserow | — | — | 18,750 | 769,687 | ||||||||||||
Ronald A. LaBorde | — | — | 38,277 | 1,160,419 | ||||||||||||
Daniel P. McCoy | — | — | — | — | ||||||||||||
Lawrence R. Pernosky | — | — | — | — | ||||||||||||
Martin B. Howard | — | — | — | — | ||||||||||||
Dale E. Redman | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (2) | ||||||||||||
Paul B. Kusserow | — | — | 12,273 | $ | 3,600,039 | |||||||||||
Scott G. Ginn | 4,875 | $ | 1,189,106 | 7,009 | $ | 1,689,497 | ||||||||||
Christopher T. Gerard | — | — | 25,052 | $ | 7,498,808 | |||||||||||
Sharon Brunecz | — | — | 9,006 | $ | 2,398,034 | |||||||||||
David L. Kemmerly | 3,125 | $ | 821,256 | 2,717 | $ | 796,980 |
(1) | Amount reflects the difference between the exercise price of the stock option and the price of our common stock at the time of exercise, multiplied by the number of shares underlying the option exercised. |
(2) | Amount reflects the closing price of our common stock on the day of vesting multiplied by the number of shares acquired on vesting. |
NAMED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT PROVISIONS: POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following is a description of the termination and change-in-control payment provisions included in the employment agreement for Mr. Kusserow. Unless otherwise defined herein, all capitalized terms have the meanings ascribed to them in the employment agreement. The terms below describe certain, but not all, triggering events that may result in termination or change-in-control payments to Mr. Kusserow.
Certain Definitions
The following definitions appear in Mr. Kusserow’s employment agreement.
“Cause” is defined to include, among other things, willful gross neglect or misconduct, violation of our code of conduct, breach of the restrictive covenants of the employment agreement and misconduct in financial reporting.
“Good Reason” for voluntary resignation is defined as the occurrence of any of the following circumstances without the executive’s express written consent, unless the breach is corrected within thirty days from the date we are put on notice of the occurrence and such notice is delivered to us within ninety days of the occurrence: (i) a material reduction in the executive’s base salary (other than in connection with a proportionate reduction in the base salaries of all similarly-situated senior level executive employees), (ii) a material diminution of the executive’s authority, responsibilities or duties, (iii) any material breach of the executive’s employment agreement caused by us. In addition, if there is Good Reason to resign, the resignation must occur within 150 days of the existence of the condition, or (iv) not being elected to or re-elected to our Board of Directors.
“Change in Control” is defined as (i) any person or group (as defined in the Securities Exchange Act of 1934, as amended) becomes the beneficial owner, directly or indirectly, of our securities or the securities of any significant subsidiary, representing 50% or more of the combined voting power of our or such subsidiary’s then outstanding securities; (ii) as a result of a contested election or the designation by a person who has entered into an agreement with us to effect a transaction with us specified in items (i), (iii) or (iv) of this definition, individuals who at the beginning of any 12-month period constitute our Board of Directors, cease to constitute at
least a majority of our Board of Directors; (iii) the consummation of a merger or consolidation of us or any significant subsidiary with any other entity, other than a merger or consolidation which would result in our voting securities or the voting securities of a significant subsidiary outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation; or (iv) the consummation of a sale or disposition of all or substantially all of our consolidated assets (other than a sale or disposition immediately after which such assets will be owned directly or indirectly by our stockholders in substantially the same proportions as their ownership of our common stock immediately prior to such sale or disposition).
“COBRA” is the Consolidated Omnibus Budget Reconciliation Act of 1984.
Employment Agreement with Mr. Kusserow
Pursuant to his Employment Agreement dated December 11, 2014 (as referred to below, the “Agreement”), Mr. Kusserow has agreed to serve as our President and Chief Executive Officer effective December 16, 2014 (the “Effective Date”). The term of the Agreement runs until March 1, 2019, unless earlier terminated, and is not automatically renewable. Unless mutually extended by the parties in writing, the Agreement shall terminate upon the expiration of the term, at which point Mr. Kusserow’s employment shall continue on an “at will” basis unless such “at will” employment is terminated by us or Mr. Kusserow by notice in writing.
Under the terms of the Agreement, Mr. Kusserow, among other things, is entitled to:
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It is the intention of the parties that the 2014 Equity Awards and the 2015 Equity Awards shall be the sole equity awards granted to Mr. Kusserow during the term of the Agreement. In other words, there is no expectation that Mr. Kusserow will receive or be entitled to additional equity awards during the term of the Agreement.
In the event Mr. Kusserow’s employment is terminated due to his death or disability, Mr. Kusserow or his surviving spouse or estate (as the case may be) will be entitled to any benefits due or earned in accordance with the applicable plans of the Company and the following amounts (paid in accordance with federal tax rules and regulations and within the deadlines described in the Agreement): (a) unpaid base salary through the date of termination; and (b) incentive awards earned in the prior year, but not yet paid. Additionally, all unvested equity awards held by Mr. Kusserow as of the date of death or disability shall vest immediately in full.
If Mr. Kusserow is terminated for Cause or if Mr. Kusserow voluntarily resigns without Good Reason he will be entitled to any benefits earned in accordance with the applicable plans of the Company and the following amounts (paid in accordance with federal tax rules and regulations and within the deadlines described in the Agreement): (a) unpaid base salary through the date of termination, and (b) incentive awards earned in the prior year, but not yet paid.
If Mr. Kusserow is terminated without Cause or resigns with Good Reason, in both cases prior to a Change in Control, Mr. Kusserow will be entitled to any benefits earned in accordance with the applicable plans of the Company and the following:
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In the event that Mr. Kusserow’s employment is terminated without Cause or he resigns with Good Reason within one year following a Change in Control (or he is terminated without Cause within 90 days prior to a Change in Control), Mr. Kusserow shall be entitled to any benefits earned in accordance with the applicable plans of the Company and the following:
As noted above, upon a Change in Control, the 2014 Equity Awards and 2015 Equity Awards shall vest immediately in full.
Mr. Kusserow is subject to certain restrictive covenants, including (i) prohibitions against competition for 24 months following his termination prior to the expiration of the employment term and (ii) prohibitions against soliciting company employees and customers for 24 months following his termination. He is also subject to a standstill provision, which prevents him from acquiring any Company securities or seeking to effect a Change in Control the Company (or assisting or working with others to effect a Change in Control of the Company) for a period of 24 months following his termination.
Both Mr. Kusserow and the Company are subject to arbitration for resolution of disputes arising out of the Agreement, which is governed by Louisiana law.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table shows the potential payments to our Named Executive Officers employed as of December 31, 2015, upon: (i) a Change in Control (as such term is defined in Mr. Kusserow’s employment agreement or the Key Executive Severance Plan, as applicable)Plan) of the Company without termination, (ii) a termination without Cause (as such term is defined in Mr. Kusserow’s employment agreement or the Key Executive Severance Plan, as applicable) or a resignation with Good Reason (as such term isterms are defined in Mr. Kusserow’s employment agreement or the Key Executive Severance Plan, as applicable)Plan) prior to a Change in Control, (iii) a termination without Cause or a resignation with Good Reason following a Change in Control, (iv) Retirement (as such term is defined in their respective employment agreements),retirement, (v) death (in the case of Mr. Kusserow and Mr. LaBorde only) or (vi) Disability (as such term is defined in Mr. Kusserowthe 2008 and Mr. LaBorde’s employment agreements)2018 Omnibus Incentive Compensation Plans). In preparing the table, we assumed the Change in Control event, employment termination event or resignation occurred on December 31, 20152021 and that the ability to receive post-termination or Change in Control payments was governed by the respective employment agreements for our Named Executive Officers in effect as of that date. See “Named Executive Officer Employment Agreement Provisions: Potential Payments upon Termination or Change in Control,” above, for additional information.Severance Plan. The closing price per share of our common stock on December 31, 20152021 (the last business day of the year) was $39.32.$161.88.
Executive | Benefits ($) (1) | Change in Control without Termination of Employment on 12/31/2015 ($) | Termination without Cause or Resignation with Good Reason as of 12/31/2015 (no Change in Control) ($) | Termination without Cause or Resignation with Good Reason on 12/31/2015 following a Change in Control ($) (2) | Permitted Retirement on 12/31/2015 ($) | Disability on 12/31/2015 ($) | Death on 12/31/2015 ($) | |||||||||||||||||||
Paul B. Kusserow | ||||||||||||||||||||||||||
Base Severance Payment | $ | — | $ | 2,190,000 | $ | 3,283,750 | $ | — | $ | — | $ | — | ||||||||||||||
Accelerated Vesting of | 22,363,250 | 2,396,063 | 22,363,250 | — | 22,363,250 | 22,363,250 | ||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
Total | 22,363,250 | 4,586,063 | 25,647,000 | — | 22,363,250 | 22,363,250 | ||||||||||||||||||||
Ronald A. LaBorde | ||||||||||||||||||||||||||
Base Severance Payment | — | 575,938 | 1,149,376 | — | — | — | ||||||||||||||||||||
Accelerated Vesting of | — | 3,349,431 | 3,349,431 | — | 3,263,717 | 3,263,717 | ||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
Total | — | 3,925,369 | 4,498,807 | — | 3,263,717 | 3,263,717 | ||||||||||||||||||||
Daniel P. McCoy | ||||||||||||||||||||||||||
Base Severance Payment | — | 565,000 | 1,127,500 | — | — | — | ||||||||||||||||||||
Accelerated Vesting of | — | 696,612 | 696,612 | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
Total | — | 1,261,612 | 1,824,112 | — | — | — | ||||||||||||||||||||
Lawrence R. Pernosky | ||||||||||||||||||||||||||
Base Severance Payment | — | 471,250 | 940,000 | — | — | — | ||||||||||||||||||||
Accelerated Vesting of | — | 442,606 | 442,606 | — | — | — | ||||||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
Total | — | 913,856 | 1,382,606 | — | — | — |
Named Executive Officer | Benefits | Change in Control without Termination of Employment on 12/31/2021 ($) | Termination without Cause or Resignation with Good Reason as of 12/31/2021 (no Change in Control) ($) | Termination without Cause or Resignation with Good Reason on 12/31/2021 following a Change in Control ($) | Permitted Retirement on 12/31/2021 ($) | Disability on 12/31/2021 ($) | Death on 12/31/2021 ($) | |||||||||||||||||||
Paul B. Kusserow(1) | ||||||||||||||||||||||||||
Base Severance Payment | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | $ | 14,282,996 | $ | 14,282,996 | — | $ | 14,282,996 | $ | 14,282,996 | ||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 14,282,996 | $ | 14,282,996 | — | $ | 14,282,996 | $ | 14,282,996 | ||||||||||||||||
Scott G. Ginn | ||||||||||||||||||||||||||
Base Severance Payment | — | $ | 1,259,141 | $ | 2,518,282 | — | — | — | ||||||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | — | $ | 4,088,118 | — | $ | 4,088,118 | $ | 4,088,118 | |||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 1,259,141 | $ | 6,606,400 | — | $ | 4,088,118 | $ | 4,088,118 | ||||||||||||||||
Christopher T. Gerard | ||||||||||||||||||||||||||
Base Severance Payment | — | $ | 1,399,297 | $ | 2,798,594 | — | — | — | ||||||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | — | $ | 5,234,875 | — | $ | 5,234,875 | $ | 5,234,875 | |||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 1,399,297 | $ | 8,033,469 | — | $ | 5,234,875 | $ | 5,234,875 | ||||||||||||||||
Sharon Brunecz(2) | ||||||||||||||||||||||||||
Base Severance Payment | — | $ | 859,375 | $ | 1,718,750 | — | — | — | ||||||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | $ | 624,533 | $ | 4,165,820 | — | $ | 4,165,820 | $ | 4,165,820 | ||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 1,483,908 | $ | 5,884,570 | — | $ | 4,165,820 | $ | 4,165,820 | ||||||||||||||||
David L. Kemmerly | ||||||||||||||||||||||||||
Base Severance Payment | $ | — | $ | 859,375 | $ | 1,718,750 | — | — | — | |||||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | — | $ | 2,440,989 | — | $ | 2,440,989 | $ | 2,440,989 |
Executive Benefits ($) (1) Martin B. Howard Accelerated Vesting of Total Dale E. Redman Accelerated Vesting of Total Change in
Control
without
Termination of
Employment on
12/31/2015 ($) Termination
without
Cause or
Resignation
with Good
Reason as of
12/31/2015
(no Change
in Control)
($) Termination
without
Cause or
Resignation
with Good
Reason on
12/31/2015
following a
Change in
Control
($) (2) Permitted
Retirement on
12/31/2015
($) Disability on
12/31/2015
($) Death on
12/31/2015
($) Base Severance Payment — 430,000 857,500 — — —
Nonvested Stock,
Options to purchase
shares of Company
common stock or
Restricted Stock Units — 234,468 234,468 — — — Other — — — — — — — 664,468 1,091,968 — — — Base Severance Payment — — — — — —
Nonvested Stock,
Options to purchase
shares of Company
common stock or
Restricted Stock Units — — — — — — Other — — — — — — — — — — — —
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 859,375 | $ | 4,159,739 | — | $ | 2,440,989 | $ | 2,440,989 |
(1) | Effective December 16, 2021, the Amended and Restated Employment Agreement with our former Chief Executive Officer, Paul B. Kusserow, terminated by its terms. Mr. Kusserow’s employment with the Company continued without a formal employment agreement after the end of the term of the Amended and Restated Employment Agreement until his retirement effective April 15, 2022. On January 6, 2022, the Compensation Committee approved and adopted the CEO Severance Plan, which provides certain severance protections in the event of a qualifying termination of employment of the Chief Executive Officer. The CEO Severance Plan was applicable to Mr. Kusserow until his retirement on April 15, 2022 and is now applicable to Mr. Gerard during his term as Chief Executive Officer. See “Other Practices, Policies and Guidelines–CEO Severance Plan” above for additional information about the CEO Severance Plan. Because the table above assumes the Change in Control event, employment termination event or resignation occurred on December 31, 2021, the amounts reported in the table above for Mr. Kusserow reflect payouts solely for vesting of his unvested equity awards pursuant to the terms of his respective award agreements since Mr. Kusserow was not covered by a severance plan or arrangement as of December 31, 2021. The table below shows the amounts Mr. Kusserow would have received under the CEO Severance Plan as of December 31, 2021 if the CEO Severance Plan had been in effect as of such date. |
Executive | Benefits | Change in Control without Termination of Employment on 12/31/2021 ($) | Termination without Cause or Resignation with Good Reason as of 12/31/2021 (no Change in Control) ($) | Termination without Cause or Resignation with Good Reason on 12/31/2021 following a Change in Control ($) | Permitted Retirement on 12/31/2021 ($) | Disability on 12/31/2021 ($) | Death on 12/31/2021 ($) | |||||||||||||||||||
Paul B. Kusserow | ||||||||||||||||||||||||||
Base Severance Payment | $ | — | $ | 2,894,626 | $ | 4,341,939 | — | — | — | |||||||||||||||||
Accelerated Vesting of Nonvested Stock, Options to purchase shares of Company common stock or Restricted Stock Units | — | 14,282,996 | $ | 14,282,996 | — | $ | 14,282,996 | $ | 14,282,996 | |||||||||||||||||
Other | — | — | — | — | — | — | ||||||||||||||||||||
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Total | — | $ | 17,177,622 | $ | 18,624,935 | — | $ | 14,282,996 | $ | 14,282,996 |
(2) | Ms. Brunecz resigned as Chief Human Resources Officer effective March 21, 2022 and was not entitled to any such payments. |
During 2015, all The compensation structure for our non-employee directors received a monthlyin 2021 was as follows:
An annual cash retainer of $5,500 and per diem attendance fees$100,000;
An annual equity award of $2,000 per eachtime-based RSUs with a value of $150,000 that vest one year after the date of grant conditioned on the director’s continued service as a non-employee member of the Board of Directors meetingthrough the vesting date; and each committee meeting attended in person
Reimbursement for out-of-pocket expenses, including reasonable travel and $1,000 per diem attendance fees for each Board of Directors meeting and each committee meeting attended via teleconference. In other words, iflodging expenses, related to the full Board of Directors and the Compensation Committee each held an in-person meetingdirector’s service on the same day, an attendee of both meetings would receive one $2,000 fee covering both meetings. Donald A. Washburn served as our independent Lead Director during 2015 and received a $50,000 annual retainer payable to our Lead Director.Board.
During 2015, inIn addition to the other fees mentioned, (i) the Chairmanfollowing table sets forth additional annual retainers for our Lead Director and our Committee Chairs:
Lead Director Cash Retainer | $ | 30,000 | ||
Audit Committee Chair Cash Retainer | $ | 25,000 | ||
Compensation Committee Chair Cash Retainer | $ | 20,000 | ||
Nominating and Corporate Governance Committee Chair Cash Retainer | $ | 15,000 | ||
Quality of Care Committee Chair Cash Retainer | $ | 15,000 | ||
Compliance and Ethics Committee Chair Cash Retainer | $ | 15,000 |
Mr. Kusserow does not receive any additional compensation for his role as our Chairman.
On June 8, 2021, each of the Audit Committee received an annual retainer of $20,000, paid monthly, (ii) the Chairman of the Compensation Committee received an annual retainer of $15,000, paid monthly, (iii) the Chairman of the NominatingMses. Capps, Kline, Klapstein and Corporate Governance Committee received an annual retainer of $10,000, paid monthly, (iv) the Chairman of the Quality of Care Committee received an annual retainer of $10,000, paid monthly,Samuels, Drs. Coye and (v) the Chair of the ComplianceRideout, and Ethics Committee received an annual retainer of $10,000, paid monthly. In addition, on June 2, 2015, each non-employee directorMessrs. Lechleiter and Perkins received an equity grant of nonvested common stockRSUs valued at $125,000.$150,000 in connection with their re-election as directors at the 2021 annual meeting of stockholders. The number of sharesRSUs granted (3,840)(574) was determined by dividing the total grant value by the closing price of the Company’s common stock on the date of grant ($32.56)261.31). The RSUs granted are subject to time-based vesting conditions and rounding up towill vest 100% on June 8, 2022, predicated upon the next whole share. On April 22, 2015, the daterespective director’s continued service as a non-employee member of Mr. Perkins’ appointment to the Board of Directors he received an equity grant of 1,514 shares of nonvested common stock, which vested 100% on July 1, 2015. All directors are entitled to reimbursement for reasonable travel and lodging expenses incurred in attending meetings. through the vesting date.
Director compensation is approved on an annual basis by independent (non-employee) members of our Board of Directors.
The following table shows the value of all cash and equity-based compensation paid to the members of our Board of Directors during the year ended December 31, 2015.2021.
Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | ||||||||||||
Linda Hall, PhD | $ | 108,000 | $ | 125,030 | — | 233,030 | ||||||||||
Jake L. Netterville | $ | 117,000 | $ | 125,030 | — | 242,030 | ||||||||||
Bruce Perkins | $ | 68,000 | $ | 166,226 | — | 234,226 | ||||||||||
Peter F. Ricchiuti | $ | 56,733 | $ | — | — | 56,733 | ||||||||||
Donald A. Washburn | $ | 153,000 | $ | 125,030 | — | 278,030 | ||||||||||
Nathaniel M. Zilkha | $ | 108,000 | $ | 125,030 | — | 233,030 |
Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | ||||||||||||
Vickie L. Capps | $ | 123,500 | $ | 149,992 | — | $ | 273,492 | |||||||||
Molly J. Coye, MD | $ | 98,917 | $ | 149,992 | — | $ | 248,909 | |||||||||
Julie D. Klapstein | $ | 118,917 | $ | 149,992 | — | $ | 268,909 | |||||||||
Teresa L. Kline | $ | 98,917 | $ | 149,992 | — | $ | 248,909 | |||||||||
Richard A. Lechleiter (3) | $ | 143,917 | $ | 149,992 | — | $ | 293,909 |
Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2) | All Other Compensation ($) | Total ($) | ||||||||||||
Bruce D. Perkins | $ | 113,917 | $ | 149,992 | — | $ | 263,909 | |||||||||
Jeffrey A. Rideout, MD | $ | 113,917 | $ | 149,992 | — | $ | 263,909 | |||||||||
Ivanetta Davis Samuels | $ | 95,792 | $ | 149,992 | — | $ | 245,784 |
(1) | Paul B. Kusserow, our former Chief Executive Officer and Chairman of our Board of Directors |
(2) | The amounts shown in this column reflect the grant date fair value of nonvested stock unit awards granted to each of our directors. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award. Assumptions used in the calculation of this amount are included in Note |
(3) | Mr. Lechleiter resigned from our Board of Directors on February 28, 2022. |
Stock Ownership
Included in the Corporate Governance Guidelines adopted by our Board of Directors are stock ownership requirements applicable to our independent directors. In an effortdirectors in order to more closely align their interests with those of our stockholders, each stockholders. Each non-employee (independent) director shallis required to own Company shares with a fair market value equal to at least threesix times theirhis or her base annual cash retainer.
Each non-employee director shall havehas five years from the date that they are elected or appointed (as applicable) to the position (or five years from the initial April 2009 effective date of the Corporate Governance Guidelines, whichever date is later) to come into compliance with these ownership requirements.
Once a person subject to the stock ownership requirements accumulates shares with a value equal to the required multiple of annual retainer, he or she must retain the minimum number of shares originally accumulated to meet the threshold requirement on a going-forward basis. If the Company’s stock price subsequently declines after the stock ownership requirements are met, he or she will not be required to acquire additional shares. Each of our non-employee directors who were Board members on the date of adoption of our Corporate Governance Guidelines is currentlywas in compliance with the ownership requirements.requirements as of December 31, 2021, having acquired the required number of shares or having more time to do so.
Under our Code of Ethical Business Conduct, no director, officer or employee may have any business, financial, civic or professional interest outside the Company that in any way conflicts with that director’s, officer’s or employee’s ability to perform his or her duties at Amedisys with undivided loyalty, unless there is a review by our legal department and the express consent of our Chief Executive Officer, or, in the case of directors, review by and consent of a majority of the disinterested directors. In addition, in accordance with NASDAQ Marketplace Rule 5630, which functions as our related party transaction policy, our Board of Directors reviews all “related party transactions” for potential conflict of interest situations on an ongoing basis based upon whether such transactions are in the best interests of our Company and our stockholders. For purposes of this review, a “related party transaction” is any transaction required to be disclosed pursuant to Item 404 of SEC Regulation S-K. All related party transactions must be approved by a majority of our independent directors (any independent director who is a party to a proposed related party transaction must recuse himself or herself from the vote). Our independent directors’ approval of any related party transaction is reflected in the minutes of the meeting of our Board of Directors during which such approval was granted.
Effective October 22, 2015, we entered into a contractThere were no transactions between the Company and any officer, director or nominee for telemonitoring services with Care Innovations, LLC (“Care Innovations”). Paul Kusserow, our President and Chief Executive Officer, is a memberdirector, any security holder listed in the “Stock Ownership Table” on page 28 of this Proxy Statement, or any affiliate of or person related to any of them, since January 1, 2021, of the Advisory Board to Care Innovations. Prior to engaging Care Innovations, we conducted a competitive bidding process under which ten companies submitted proposals to us to become our telemonitoring partner. Our independent directors determined that Care Innovations submitted the most attractive proposal and that it was in our best interest to partner with Care Innovations to provide us telemonitoring services. Mr. Kusserow and Mr. LaBorde recused themselves from the vote of the Board of Directors on this matter and did not participate in the competitive bidding processtype or any deliberations of the Board of Directors concerning this engagement. Care Innovations will receive a fee of approximately $1,800,000 in connection with our contract for telemonitoring services for the Company. Care Innovations has confirmed to us that Mr. Kusserow will not receive any direct compensation or direct financial benefit from the engagement of Care Innovations as our telemonitoring partner.
On November 20, 2015, we engaged KKR Capstone Consulting, LLC (“KKR Capstone”), a consulting company of operational professionals that works exclusively with portfolio companies of Kohlberg Kravis Roberts & Co. Nathaniel M. Zilkha, a member of our Board of Directors, is a member of KKR Management LLC, which is an affiliate of KKR Asset Management LLC (“KAM”), a substantial stockholder of our Company, and an affiliate of Kohlberg Kravis Roberts & Co. KKR Capstone will receive a fee of approximately $1,300,000 in connection with providing consulting services to the Company in the ordinary course of business. Mr. Zilkha will not receive any direct compensation or direct financial benefit from the engagement of KKR Capstone.
Other than the transactions disclosed above, no transactionsamount required to be disclosed pursuant to Item 404 of SEC Regulation S-K have occurred since January 1, 2015.S-K. Additionally, none of our directors, executive officers or affiliates is a party to any proceedings adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
Stockholder Nominations of Directors
Stockholders may nominate directors for election without consideration by the Nominating and Corporate Governance Committee of our Board of Directors by complying with the eligibility, advance notice and other provisions of our Bylaws, a composite version of which was filed with the SEC as an exhibit to our AnnualQuarterly Report on Form 10-K10-Q for the yearquarter ended December 31, 2015,September 30, 2021, and areis also available on our website at http://www.amedisys.com.
Under our Bylaws, a stockholder is eligible to submit a stockholder nomination of directors at an annual meeting if the stockholder is (1) of record based on the record date for determining stockholders entitled to vote at the annual meeting and (2) of record on the date the stockholder gives notice of the nomination to our Corporate
Secretary. The stockholder also must provide timely notice of the nomination in writing to our Corporate Secretary. In connection with the 20172023 Annual Meeting, of Stockholders (the “2017 Annual Meeting”), to be timely under our Bylaws, our Corporate Secretary must receive advance notice of a nomination for election of a director at the 20172023 Annual Meeting between close of business on February 2, 20179, 2023 and close of business on March 4, 2017,11, 2023, provided however, if and only if the 20172023 Annual Meeting is not scheduled to be held between May 3, 201710, 2023 and August 1, 2017,8, 2023, such stockholder’s notice must be delivered to our Corporate Secretary no earlier than the 120th120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th90th day prior to such annual meeting or (B) if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th10th day following the day on which public announcement of the date of the meeting is first made by the Company. The advance notice of the nomination must contain certain information specified in our Bylaws, including information concerning the nominee and the stockholder proponent. The foregoing description is only a summary of the advance notice requirements of our Bylaws; please refer to the full text of our Bylaws for additional information.
Stockholder Proposals for Inclusion in Proxy Materials
Stockholders who, in accordance with Rule 14a-8 of the Exchange Act, wish to present proposals for inclusion in the proxy materials to be distributed in connection with the 20172023 Annual Meeting must submit their proposals so that they are received by our Corporate Secretary at the address listed below no later than the close of business on December 24, 2016.28, 2022. The proposal also will need to comply with the SEC regulations regarding the inclusion of stockholder proposals in Company-sponsored material.
Stockholder Proposals of Other Business
Under our Bylaws, a stockholder is eligible to submit a stockholder proposal of business (other than nominations of directors or proposals properly brought pursuant to Rule 14a-8 of the Exchange Act, the procedures for which are described above) at an annual meeting if the stockholder is (1) of record based on the record date for determining stockholders entitled to vote at the annual meeting and (2) of record on the date the stockholder gives notice of the proposal to our Corporate Secretary. In addition, the proposal must be a proper matter for stockholder action under Delaware law and the stockholder must provide timely notice of the proposal in writing to our Corporate Secretary. To be timely under our Bylaws, our Corporate Secretary must receive advance notice of a proposal for business at the 20172023 Annual Meeting between close of business on February 2, 20179, 2023 and close of business on March 4, 2017,11, 2023, provided however, if and only if the 20172023 Annual Meeting is not scheduled to be held between May 3, 201710, 2023 and August 1, 2017,8, 2023, such stockholder’s notice must be delivered to our Corporate Secretary no earlier than the 120th120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th90th day prior to such annual meeting or (B) if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th10th day following the day on which public announcement of the date of the meeting is first made by the Company. The advance notice of the proposal must contain certain information specified in our Bylaws, including information concerning the proposal and the stockholder proponent. Our composite Bylaws were filed with the SEC as an exhibit to our AnnualQuarterly Report on Form 10-K10-Q for the yearquarter ended December 31, 2015,September 30, 2021, and are also available on our website at http://www.amedisys.com. The foregoing description is only a summary of the advance notice requirements of our Bylaws; please refer to the full text of our Bylaws for additional information.
Director Nominations under Exchange Act Rule 14a-19
Stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 10, 2023.
Contact Information
Stockholder proposals should be sent to:
Corporate Secretary
Amedisys, Inc.
3854 American Way, Suite A
Baton Rouge, Louisiana 70816
Householding
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, multiple stockholders who share the same last name and address will receive only one copy of the Notice or annual proxy materials and notice.materials. If the household received a printed set of proxy materials by mail, each stockholder will receive his or her own proxy card by mail. We have undertaken householding to reduce our printing costs and postage fees.
If you wish to opt out of householding and continue to receive multiple copies of the Notice or proxy materials and notice at the same address or if you are receiving multiple copies of the Notice or proxy materials and notice at the same address and wish to receive a single copy, you may do so at any time prior to thirty days before the mailing of the Notice or proxy materials, and notice, which typically are mailed in April of each year, by notifying us in writing or by telephone at: Investor Relations, 3854 American Way, Suite A, Baton Rouge, Louisiana 70816, (225) 292-2031 or (800) 467-2662. You also may request additional copies of the Notice or proxy materials or notice by notifying us in writing or by telephone at the same address or telephone numbers, and we undertake to deliver such materials promptly.
Interest of Certain Persons in Matters to be Acted Upon
Other than for any interest arising from (i) the ownership of our common stock or (ii) any nominee’s election to office, we are not aware of any substantial interest of any director, executive officer, nominee for election as a director or associate of any of the foregoing in any matter to be acted upon at the MeetingMeeting.
Other Matters to be Presented for Action at the Meeting
Management is not aware of any other matters to be presented for action at the Meeting. However, if any other matter is properly presented at the Meeting or any adjournment thereof, it is the intention of the persons named in the enclosed proxy to vote in accordance with their best judgment on such matter.
BY ORDER OF THE BOARD OF DIRECTORS
Jennifer Guckert Griffin |
Corporate Secretary
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April 22, 2016
AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL STATEMENTSMEASURES
(Amounts in thousands)
(Unaudited)
AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
(Amounts in thousands)
(Unaudited)
Adjusted Earnings From Continuing Operations Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) and Adjusted EBITDAReconciliation:
For the Three-Month Periods Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income (loss) attributable to Amedisys, Inc. | $ | 12,911 | $ | 9,135 | $ | (3,021 | ) | $ | 12,776 | |||||||
Less: | ||||||||||||||||
Discontinued operations, net of tax | — | — | — | (216 | ) | |||||||||||
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Net income (loss) from continuing operations attributable to Amedisys, Inc. | 12,911 | 9,135 | (3,021 | ) | 12,992 | |||||||||||
Add: | ||||||||||||||||
Income tax expense | 9,564 | 5,188 | 2,004 | 7,671 | ||||||||||||
Interest expense, net | 967 | 2,566 | 10,712 | 8,123 | ||||||||||||
Depreciation and amortization | 4,238 | 6,198 | 20,036 | 28,307 | ||||||||||||
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EBITDA(1) | 27,680 | 23,087 | 29,731 | 57,093 | ||||||||||||
Add: | ||||||||||||||||
Certain items(2) | (120 | ) | (214 | ) | 85,447 | 17,673 | ||||||||||
Debt refinance costs(2) | — | — | (3,212 | ) | (488 | ) | ||||||||||
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Adjusted EBITDA(3) | $ | 27,560 | $ | 22,873 | $ | 111,966 | $ | 74,278 | ||||||||
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For the Years Ended December 31, | ||||||||
2021 | 2020 | |||||||
Net income attributable to Amedisys, Inc. | $ | 209,072 | $ | 183,608 | ||||
Add: | ||||||||
Income tax expense | 70,065 | 25,635 | ||||||
Interest expense, net | 9,476 | 10,746 | ||||||
Depreciation and amortization | 30,901 | 28,802 | ||||||
Certain items (1) | (18,028 | ) | 26,658 | |||||
Interest component of certain items (1) | (1,888 | ) | (1,914 | ) | ||||
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Adjusted EBITDA (2) (5) | $ | 299,598 | $ | 273,535 | ||||
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Adjusted Net Service Revenue Reconciliation:
For the Three-Month Periods Ended December 31, | For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2021 | 2020 | |||||||||||||||||||
Net service revenue | $ | 338,367 | $ | 300,528 | $ | 1,280,541 | $ | 1,204,554 | $ | 2,214,112 | $ | 2,071,519 | ||||||||||||
Add: | ||||||||||||||||||||||||
Certain items | (1,059 | ) | — | (1,059 | ) | — | (6,541 | ) | — | |||||||||||||||
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Adjusted net service revenue(4) | $ | 337,308 | $ | 300,528 | $ | 1,279,482 | $ | 1,204,554 | ||||||||||||||||
Adjusted net service revenue (3) (5) | $ | 2,207,571 | $ | 2,071,519 | ||||||||||||||||||||
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Adjusted Net Income From Continuing Operations Attributable to Amedisys, Inc. Reconciliation:
For the Three-Month Periods Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income (loss) attributable to Amedisys, Inc. | $ | 12,911 | $ | 9,135 | $ | (3,021 | ) | $ | 12,776 | |||||||
Less: | ||||||||||||||||
Discontinued operations, net of tax | — | — | — | (216 | ) | |||||||||||
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Net income (loss) from continuing operations attributable to Amedisys, Inc. | 12,911 | 9,135 | (3,021 | ) | 12,992 | |||||||||||
Add: | ||||||||||||||||
Certain items(2) | 543 | (138 | ) | 51,898 | 10,880 | |||||||||||
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Adjusted net income (loss) from continuing operations attributable to Amedisys, Inc.(5) | $ | 13,454 | $ | 8,997 | $ | 48,877 | $ | 23,872 | ||||||||
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Adjusted Net Income From Continuing Operations Attributable to Amedisys, Inc. per Diluted Share:Share Reconciliation:
For the Three-Month Periods Ended December 31, | For the Years Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share | $ | 0.38 | $ | 0.28 | $ | (0.09 | ) | $ | 0.39 | |||||||
Less: | ||||||||||||||||
Discontinued operations, net of tax | — | — | — | (0.01 | ) | |||||||||||
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Net income (loss) from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share | 0.38 | 0.28 | (0.09 | ) | 0.40 | |||||||||||
Add: | ||||||||||||||||
Certain items(2) | 0.02 | (0.01 | ) | 1.57 | 0.33 | |||||||||||
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Adjusted net income from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share(6) | $ | 0.40 | $ | 0.27 | $ | 1.48 | $ | 0.73 | ||||||||
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For the Years Ended December 31, | ||||||||
2021 | 2020 | |||||||
Net income attributable to Amedisys, Inc. common stockholders per diluted share | $ | 6.34 | $ | 5.52 | ||||
Add: | ||||||||
Certain items (1) | (0.39 | ) | 0.59 | |||||
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Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (4) (5) | $ | 5.95 | $ | 6.11 | ||||
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(1) |
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The following details the certain |
For the Three-Month Period Ended December 31, 2015 | For the Year Ended December 31, 2015 | |||||||||||||||||||||||
(Income) Expense | Net | Diluted EPS | (Income) Expense | Net | Diluted EPS | |||||||||||||||||||
HCHB implementation | $ | 2,383 | $ | 1,422 | $ | 0.04 | $ | 4,431 | $ | 2,681 | $ | 0.08 | ||||||||||||
Acquisition costs | 1,046 | 633 | 0.02 | 1,046 | 633 | 0.02 | ||||||||||||||||||
Exit and restructuring activity | — | — | — | 2,735 | 1,654 | 0.05 | ||||||||||||||||||
Legal fees—CID | 459 | 278 | 0.01 | 745 | 451 | 0.01 | ||||||||||||||||||
OIG Self-Disclosure | 4,674 | 3,443 | 0.10 | 4,674 | 3,443 | 0.10 | ||||||||||||||||||
Legal settlements | (5,314 | ) | (3,215 | ) | (0.10 | ) | (7,453 | ) | (4,509 | ) | (0.14 | ) | ||||||||||||
Inventory and Data Security Reporting | — | — | — | 2,121 | 1,283 | 0.04 | ||||||||||||||||||
Wage and Hour litigation | (2,309 | ) | (1,397 | ) | (0.04 | ) | 5,691 | 3,443 | 0.10 | |||||||||||||||
Asset impairment | — | — | — | 77,268 | 46,747 | 1.42 | ||||||||||||||||||
Reduction of cost report reserve | (1,059 | ) | (641 | ) | (0.02 | ) | (1,059 | ) | (641 | ) | (0.02 | ) | ||||||||||||
Debt refinance costs | — | — | — | 3,212 | 1,944 | 0.06 | ||||||||||||||||||
Miscellaneous, other (income) expense, net | — | — | — | (7,964 | ) | (5,231 | ) | (0.16 | ) | |||||||||||||||
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Total | $ | (120 | ) | $ | 543 | $ | 0.02 | $ | 85,447 | $ | 51,898 | $ | 1.57 | |||||||||||
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Exit and restructuring activity OIG Self-Disclosure Legal settlements Asset impairment Relator fees Loss on disposal of in-patient facility Debt refinance costs Miscellaneous, other (income) expense, net Total For the Three-Month Period
Ended December 31, 2014 For the Year Ended
December 31, 2014 (Income)
Expense Net Diluted
EPS (Income)
Expense Net Diluted
EPS $ — $ — $ — $ 9,954 $ 6,132 $ 0.19 — — — 1,450 893 0.03 (1,113 ) (716 ) (0.02 ) (1,113 ) (716 ) (0.02 ) 899 578 0.01 3,107 1,938 0.05 — — — 3,938 2,426 0.07 — — — 515 317 0.01 — — — 488 301 0.01 — — — (666 ) (411 ) (0.01 ) $ (214 ) $ (138 ) $ (0.01 ) $ 17,673 $ 10,880 $ 0.33
For the Year Ended December 31, 2021 | ||||
(Income) Expense | ||||
Certain Items Impacting Net Service Revenue: | ||||
Contingency accrual | (6,541 | ) | ||
Certain Items Impacting Other Operating Income: | ||||
CARES Act & State COVID-19 grants | (13,300 | ) | ||
Certain Items Impacting Cost of Service: | ||||
COVID-19 costs | 20,780 | |||
Certain Items Impacting Operating Expenses: | ||||
Acquisition and integration costs | 7,559 | |||
COVID-19 costs | 716 | |||
Pre-acquisition legal settlement | 1,825 | |||
Certain Items Impacting Total Other Income (Expense): | ||||
Interest component of certain items | 1,888 | |||
Other (income) expense, net | (30,955 | ) | ||
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Total | $ | (18,028 | ) | |
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Net of tax | $ | (12,923 | ) | |
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Diluted EPS | $ | (0.39 | ) | |
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For the Year Ended December 31, 2020 | ||||
(Income) Expense | ||||
Certain Items Impacting Other Operating Income: | ||||
CARES Act & State COVID-19 grants | $ | (34,372 | ) | |
Certain Items Impacting Cost of Service: | ||||
COVID-19 costs | 33,967 | |||
Severance - reductions in staffing levels | 4,633 | |||
Certain Items Impacting Operating Expenses: | ||||
Acquisition and integration costs | 10,795 | |||
COVID-19 costs | 1,562 | |||
Severance - reductions in staffing levels | 271 | |||
Asset impairment | 4,152 | |||
Certain Items Impacting Total Other Income (Expense): | ||||
Interest component of certain items | 1,914 | |||
Other (income) expense, net | 3,736 | |||
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Total | $ | 26,658 | ||
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Net of tax | $ | 19,727 | ||
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Diluted EPS | $ | 0.59 | ||
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Adjusted EBITDA is defined as net income |
Adjusted net service revenue is defined as net service revenue |
Adjusted net income |
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(5) | Adjusted EBITDA, adjusted net service revenue and adjusted net income |
A reconciliation of non-GAAP financial measures with respect to financial results for the year ended December 31, 2019 is included in the Company’s Current Report on Form 8-K filed with the SEC on February 24, 2021.
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AMEDISYS, INC. 3854 AMERICAN WAY, SUITE A BATON ROUGE, LA 70816 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on June 8, 2022 for shares held directly and by 11:59 P.M. Eastern Time on June 7, 2022 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on June 8, 2022 for shares held directly and by 11:59 P.M. Eastern Tim on June 7, 2022 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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0000249020_1 R1.0.0.51160
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available atwww.proxyvote.com.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. AMEDISYS, INC. Annual Meeting of Stockholders June 9, 2022 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMEDISYS, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED ON THE REVERSE SIDE. The undersigned stockholder of Amedisys, Inc. (the “Company”) hereby appoints
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0000249020_2 R1.0.0.51160