UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
☑ Filed by the Registrant | ☐ Filed by a Party other than the Registrant |
Check the appropriate box: | ||
| Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
| Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to §240.14a-12 |
AMN HEALTHCARE SERVICES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box): | |||
☑ | No fee required. | ||
☐ | Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11. | ||
| (1) Title of each class of securities to which transaction applies: | ||
(2) Aggregate number of securities to which transaction applies: | |||
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
(4) Proposed maximum aggregate value of transaction: | |||
(5) Total fee paid: | |||
☐ | Fee paid previously with preliminary materials. | ||
☐ |
| Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
| (1) Amount Previously Paid: | ||
(2) Form, Schedule or Registration Statement No.: | |||
(3) Filing Party: | |||
(4) Date Filed: |
A Letter from our Independent Board Chairman and our CEO |
|
Dear Fellow Shareholders,
On behalf of AMN Healthcare Services Inc. and its Board of Directors, we are pleased to invite you to attend our Annual Meeting of Shareholders on April 22, 2020 at our corporate officeoffices in Dallas, Texas on April 17, 2019. Our annual meeting presents an excellent opportunityTexas. Throughout the past year, we have further advanced our position as the leader and trusted partner for ustotal talent solutions to meet with shareholders and discusshealthcare organizations. We made significant progress in our business strategy, governance, corporate social responsibility and other related matters. We place high importance on shareholder dialogue, so we do not limit these conversations to the Annual Meeting. Our formal proactive shareholder engagement program provides a forum for us to maintain ongoing dialogue with shareholders throughout the year and is overseen by our Board of Director’s Corporate Governance and Compliance Committee.
Our Aspiration, Mission and Purpose
At AMN, we strive to be the most trusted, influential and innovative force in helping healthcare organizations provide a quality and effective patient care experience. Our mission is to deliver the best talent and insights to optimize the workforce ofhelp healthcare organizations optimize their workforce, give healthcare professionals opportunities to do their best work towards quality patient care and to create a values-based culture. We achieve this mission by focusing onculture of innovation where our purpose of helping our healthcare professionals and corporate team members can achieve their professional and personal goals.
Our Human Capital Management Strategy
Purpose, Profit and Culture
We recognize the integral role that our corporate purpose and culture play in the Company’s ability to generate sustainable profits and make a positive impact in society. We have established a performance and values-based culture that aligns our business strategy with the development of our greatest assets, our people. To this end, we have an active strategy to attract, promoteenhance diversity, equality, and retain a diverse talent pool. We define this as the AMN Difference, because it fosters a values-based culture that is built on leaderinclusion in our workplace, workforce, and co-worker quality, as well as our commitment to professional development and a collegial work environment. marketplace.
Diversity, Equality & Inclusion
Diversity, equality, and inclusion is embodied in our values and is a foundational element of AMN’s culture and helps us sustain a competitive advantage. We are among a unique group of companies with 44% female representation on our Board and 50% of our executive team from historically underrepresented groups. This diversity extends through our organization from our team members to our affiliate partners and suppliers. AMN strives to be a catalyst for change in the healthcare and staffing industries and in our communities by regularly publishing and participating in surveys and white papers that highlight diversity issues. In 2019, and for the third consecutive year, AMN Difference. AMN is committed to promotingwas recognized by the Bloomberg Gender Equality Index and maintaining a diverse workforce that reflects the communities we serve. Human Rights Campaign’s Corporate Equality Index.
Sustainable Long-Term Growth
Our diversity, equalitystrategy and inclusion philosophy isour actions every day are grounded in the belief that we should respect all voices, and that we willcan achieve our purpose when we capitalize onmission by unlocking the strength of the diverse backgrounds, experiences, and perspectives of all our team members, clientsstakeholders. We believe this philosophy and healthcare professionals.
Our Long-term Approachapproach will help us prepare for Sustainable Growth
Ouranticipated risks, create a platform for long-term corporate strategy is to position ourselves as an essential strageic partner through innovatationgrowth and acquisition of workforce solutionsdemonstrates the effective leadership and technologies for our clients and healthcare professionalsgovernance principles that allows them to do their best work caring for the health of our communities and promoting sustainable growth.sustainable-minded investors seek.
Thank you for your continued interestsupport and investment in AMN Healthcare, and we hope to see you at our 20192020 Annual Meeting.
Sincerely,
Sincerely,
Douglas D Wheat Chairman of the Board |
| Susan R. Salka
| |
“Inclusion for me is an action verb. I am proud that we have initiated a strategic action plan to promote and achieve true diversity, equality, and inclusion – to make our company, our industry, and the world around us better.”
Susan Salka
| ||||
1 | ||||
| ||||
6 | ||||
17 | ||||
| ||||
17 | ||||
| 18 | |||
Our |
| 19 | ||
| 20 | |||
| 22 | |||
| 25 | |||
26 | ||||
27 | ||||
| 28 | |||
Board Meetings and Annual Meeting Attendance by Board Members |
| 28 | ||
28 | ||||
31 | ||||
31 | ||||
32 | ||||
32 | ||||
| ||||
32 | ||||
33 | ||||
33 | ||||
34 | ||||
| 35 | |||
35 | ||||
| 35 | |||
| 40 | |||
| ||||
Our |
| 41 | ||
| 42 | |||
| 45 | |||
| 48 | |||
Equity Ownership Requirements, Clawback and No Pledging Policies |
| 53 | ||
| 54 | |||
| 54 | |||
| ||||
56 | ||||
56 | ||||
| ||||
57 | ||||
59 |
Notice of Annual Meeting of Shareholders
Meeting Date | Wednesday, April | |
Time | 8:30 a.m. (Central Time) | |
Location | 8840 Cypress Waters Blvd., Suite 300 Dallas, Texas 75019 | |
Record Date |
Monday, February |
The Annual Meeting of Shareholders (the “Annual Meeting”) of AMN Healthcare Services, Inc. will be held at our office located at 8840 Cypress Waters Boulevard, Suite 300, Dallas, Texas 75019 on Wednesday, April 17, 2019,22, 2020, at 8:30 a.m. Central Time, or at any subsequent time that may be necessary by any adjournment or postponement of the Annual Meeting. The purpose of the meeting is to:
(1) | elect eight directors nominated by our Board of Directors to hold office until our next annual meeting or until their successors are duly elected and qualified, |
(2) | approve, bynon-binding advisory vote, the compensation of our named executive officers, |
(3) | ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
(4) | approve a proposal to reduce the threshold necessary to call a special shareholders meeting; and |
| transact such other business, including consideration of a shareholder proposal if properly presented, as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting. |
The Board of Directors has fixed the close of business on February 20, 201924, 2020 as the record date for determining the shareholders of the Company entitled to notice of and to vote at the Annual Meeting orand at any adjournment or postponement thereof. Representation of at least a majority of the voting power represented by all outstanding shares is required to constitute a quorum at the Annual Meeting. Accordingly, it is important that your shares be represented at the Annual Meeting.
We will be using the Securities and Exchange Commission’s Notice and Access model (“Notice and Access”), which allows us to make proxy materials available electronically, as the primary means of furnishing proxy materials. We believe Notice and Access provides shareholders with a convenient method to access our proxy materials and vote. It also allows us to conserve natural resources which aligns with our Corporate Social Responsibility strategy by reducing our environmental footprint as well as reducing the costs associated with printing and distributing our proxy materials. On or about March 7, 2019,11, 2020, we will commence mailing by sending a Notice of Internet Availability of Proxy Materials to our shareholders with instructions on how to access our proxy statement and 20182019 Annual Report, including the financial statements set forth in our annual report on Form 10-K, online and how to cast your vote. The Notice also contains instructions on how to receive a paper copy of the proxy statement and 20182019 Annual Report.
March 7, 2019[ ], 2020
By Order of the Board of Directors,
Denise L. Jackson
Chief Legal Officer and Corporate Secretary
San Diego, California
YOUR VOTE IS IMPORTANT |
WE URGE YOU TO VOTE BY TELEPHONE OR INTERNET, IF AVAILABLE TO YOU, OR IF YOU RECEIVE THESE PROXY MATERIALS BY MAIL, PLEASE COMPLETE, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY. PLEASE NOTE THAT IF YOUR SHARES ARE HELD BY A BANK, BROKER, OR OTHER RECORDHOLDER AND YOU WISH TO VOTE THEM AT THE MEETING, YOU MUST OBTAIN A LEGAL PROXY FROM THAT RECORDHOLDER. |
PROXY STATEMENT SUMMARY |
|
The summary below highlights certain information that may be found elsewhere in this proxy statement. We encourage you to read the entire proxy statement before casting your vote. Our proxy statement and related materials are first being made available to our shareholders on or about March 7, 2019.11, 2020.
Our Financial Performance
(1) | More information on adjusted EBITDA, which refers to our adjusted earnings before interest, taxes, depreciation and amortization, and a reconciliation of adjusted EBITDA to our |
Our Total Return(²) vs. Russell 2000 and S&P 500
(2) | The total returns reflected are as of December 31, |
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 1 |
PROXY STATEMENT SUMMARY |
This year'syear’s slate of director nominees to the Board of Directors (the “Board”) of AMN Healthcare Services, Inc. (the “Company” or “AMN”) includes a new director, – Ms. Daphne E. Jones,Teri G. Fontenot, who was appointed to the Board in July 2018.September 2019. The addition of Ms. Jones,Fontenot, who is a former Senior Vice President – Digital / Futurechief financial officer of Work for GE Healthcare,three health systems and CEO of Women’s Hospital in Baton Rouge, Louisiana, supports our ongoing Board refreshment strategy and further strengthens and diversifies the aggregate skills, experiences and experiencescharacteristics of our Board. Please find a list of all director nominees below. Additional information for each nominee can be found under “Election of Our Directors (Item 1)” beginning on page 6.
Name |
| Age |
| Director Since |
| Professional Background |
| Board Committees | Age | Director Since |
Professional Background
| Board Committees | ||||||||||
Mark G. Foletta |
| 58 |
| 2012 |
| Executive Vice President and Chief Financial Officer, Tocagen Inc. |
| Audit (Chair) | 59 | 2012 |
Executive Vice President and Chief Financial Officer, Tocagen Inc.
| Audit (Chair) | ||||||||||
Teri G. Fontenot | 66 | 2019 |
Former CEO of Women’s Hospital
| Audit | ||||||||||||||||||
R. Jeffrey Harris |
| 64 |
| 2005 |
| Former Of Counsel at Apogent Technologies, Inc. |
| Corporate Governance & Compliance; Compensation | 65 | 2005 | Former Of Counsel at Apogent Technologies, Inc. |
|
Corporate Governance
|
| ||||||||
Michael M.E. Johns, M.D. |
| 77 |
| 2008 |
| Professor in the School of Medicine, Emory University |
| Corporate Governance & Compliance (Chair); Compensation | 78 | 2008 | Professor in the School of Medicine, Emory University |
|
Compensation;
|
| ||||||||
Daphne E. Jones |
| 60 |
| 2018 |
| Former Senior Vice President – Digital/Future of Work, GE Healthcare |
| Audit | 61 | 2018 |
Former Senior Vice President – Digital/Future of Work, GE Healthcare
| Audit; Compensation | ||||||||||
Martha H. Marsh |
| 70 |
| 2010 |
| Former President and CEO, Stanford Hospital and Clinics |
| Compensation (Chair); Corporate Governance & Compliance | 71 | 2010 |
Former President and CEO, Stanford Hospital and Clinics
| Compensation (Chair) | ||||||||||
Susan R. Salka |
| 54 |
| 2003 |
| Chief Executive Officer and President, AMN Healthcare Services, Inc. |
| Executive | 55 | 2003 |
Chief Executive Officer, AMN Healthcare Services, Inc.
| Executive | ||||||||||
Andrew M. Stern |
| 69 |
| 2001 |
| Senior Counsel, Sunwest Communications, Inc. |
| Corporate Governance & Compliance; Audit | ||||||||||||||
Douglas D. Wheat |
| 68 |
| 1999 |
| Managing Partner, Wheat Investments, LLC |
| Board (Chairman); Executive | 69 | 1999 |
Managing Partner, Wheat Investments, LLC
| | Board (Chairman); Executive |
| ||||||||
|
|
2 | AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement |
PROXY STATEMENT SUMMARY |
Our Key Executive Compensation Practices
Practice | Description | |
Balanced Approach to Performance- based Pay | Performance-based awards are tied to the achievement of financial objectives, including revenue, adjusted EBITDA margin, adjusted EBITDA margin growth and total shareholder return, as well as strategic leadership | |
Three-Year Performance Periods and Vest Schedules | The performance periods and vest schedules for our equity awards span three years to promote a long-term approach to the achievement of strategic and financial | |
Balanced Mix of Pay Components | Target compensation mix is not overly weighted toward annual incentive awards and balances cash and long-term equity awards in accordance with certain financial ornon-financial metrics that align with our short and long-term strategic | |
CEO Compensation at Risk | In | |
Equity Ownership Guidelines | CEO Named executive officers Other members of the CEO Committee (CEO’s direct reports) | |
Executive Compensation Philosophy | We have an Executive Compensation Philosophy that clearly articulates our commitment to equal pay principles and | |
Change-in-Control Arrangements | Beginning in 2019, our equity agreements include | |
|
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 3 |
PROXY STATEMENT SUMMARY |
Our Key Corporate Governance Policies
Practice | Description | |
Proxy Access | Our Bylaws contain meaningful proxy access features that are consistent with market practice and were developed through shareholder | |
Majority Voting in Uncontested Elections | Director nominees must receive the affirmative vote of a majority of the votes cast in order to be elected to the Board in uncontested | |
Director Resignation Policy | Our Director Resignation Policy requires an incumbent director to tender his or her resignation if he or she receives more votes “Against” his or her election than votes “For” his or her election in an uncontested election. The Corporate Governance and Compliance Committee and the Board, which we refer to as our Governance and Compliance Committee, would then consider and take appropriate action on such offer of resignation in accordance with this | |
Board Aggregate Tenure Policy | Our Board has committed that | |
No “Poison Pill” | We do not | |
Annual Election of Directors | All directors must be nominated andre-elected each year | |
Shareholder Engagement Program | We engage in a formal outreach program to provide us an opportunity to gain valuable insight from our shareholders on corporate governance matters that are most important to them. To consistently act in the best long-term interests of our shareholders, we continuously evaluate and act on, when appropriate, shareholder feedback | |
Human Rights Policy | To further our core values and reflect our commitment to human rights in our relationships with our clients, team members, vendors and communities, we have adopted a Human Rights Policy that is applicable to the Company, our affiliates, as well as our team members and vendors. | |
Recent Recognition
4 |
AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
PROXY STATEMENT SUMMARY |
|
|
|
|
[
| ||
WHEN | WHERE | |
Wednesday, April 8:30 a.m. Central Standard Time | 8840 Cypress Waters Blvd., Suite 300 Dallas, Texas 75019 |
|
|
| ||||
ONLINE | CALL | IN PERSON | ||||
www.proxyvote.com | 1 (800)690-6903 | c/o Broadridge 51 Mercedes Way Edgewood, NY 11717 | 8840 Cypress Waters Blvd., Suite 300 Dallas, TX 75019 | |||
Please follow the internet voting instructions sent to you and visit www.proxyvote.com, any time up until 11:59 p.m. (Eastern Time) on April | Please follow the telephone voting instructions sent to you and call 1 (800)690-6903, any time up until 11:59 p.m. (Eastern Time) on April | If you receive printed copies of our proxy materials, please mark, date and sign your proxy card per the instructions and return it by mail in thepre-addressed envelope provided with your proxy materials. The proxy card must be received prior to the | In person at the |
Our Board’s Voting Recommendations
Item |
| Description of Proposal |
| For |
| Against |
| Page |
|
1 |
| Election of eight director nominees |
|
|
|
| 6 |
| |
2 |
| Approval, on an advisory basis, compensation of our |
|
|
|
| 72 |
| |
3 |
| Ratify the appointment of the independent auditor |
|
|
|
| 74 |
| |
4 |
| Shareholder proposal – Enhance Shareholder Proxy Access |
|
|
|
| 75 |
|
Item | Description of Proposal | For | Against | Page | ||||||
1 | Election of eight director nominees |
|
| 6 |
| |||||
2 | Approval, on an advisory basis, compensation of our named executive officers |
|
| 68 |
| |||||
3 | Ratify the appointment of the independent auditor |
|
| 71 |
| |||||
4 | Reduce the threshold necessary to call a special shareholders meeting |
|
| 72 |
| |||||
5 | Shareholder proposal – Make Shareholder Right to Call Special Meeting More Accessible |
|
| 73 |
|
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 5 |
PROPOSAL 1: ELECTION OF OUR DIRECTORS |
ELECTION OF OUR DIRECTORS
The Board is elected by the shareholders to oversee their interest in the overall success of the Company'sCompany’s strategy, business operations and financial strength. The Board serves as the Company'sCompany’s ultimate decision-making body to the extent set forth in our Certificate of
Incorporation and Amended and RestatedBy-laws (the “Bylaws”). It also selects and oversees our senior executives, who, in turn, oversee ourday-to-day business and related affairs.
Board Composition Evaluation and Director Nomination Processes
Director Nomination Process
The Corporate Governance and Compliance Committee understands the vital role that a strong board composition with a diverse set of skills and continuous refreshment play in effective oversight. The Committee is committed to maintain a diverse board to more effectively manage complex corporate issues by leveraging different experiences to support the Company’s long-term objectives and business strategy. With this purpose in the mind, the Committee seeks out candidates with unique skills, experiences and characteristics, including individuals representing historically underrepresented groups and from different careers, industries, races, ethnicities or genders that align with our long-term strategic objectives. To ensure this alignment and in response to the Company’s shareholder discussions on Board refreshment, in 2018 the Committee began to establish a more robust process by which it would regularly assessesevaluate the size,Board’s collective composition relative to the Company’s strategic objectives and needspotential director candidates.
To kick off the process, the Corporate Governance and Compliance Committee mapped the collective composition of ourthe then-current Board reviewsto the skills and experiences it considered necessary to support the Company’s long-term strategic objectives. It then established a pool of potential director candidates derived from various sources, including recommendations from shareholders and recommendsconsultants, many of whom are industry experts that match certain key skills, experiences and characteristics the nomineesCommittee identified as critical to the Company’s long-term strategic objective and from which the Committee could engage candidates quickly depending on the occurrence of certain events necessitating new or additional directors, such as retirements, changing market conditions or strategic objectives, and newly considered enterprise risks. The Committee then regularly evaluates its potential candidate pool and adds and eliminates individuals based on the factors listed above as well as the candidates’ changing biographical information and availability.
6 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
PROPOSAL 1: ELECTION OF OUR DIRECTORS |
Below is a summary of the process by which the Governance and Compliance Committee actively and continuously evaluates its collective composition and potential director candidates prior to nominating such director candidates to the Board for approval. The Committee considersreview, approval and evaluates director candidates from many sources, including shareholders. Such suggestions, togetherappointment.
(1) | The Committee evaluates a matrix that maps the collective skills, experiences and characteristics of the Board to the skills, experiences and characteristics it considers necessary to support the Company’s long-term growth objectives and business strategy and engages in discussions on whether additional skills, experiences or characteristics should be identified and if the consideration of additional director candidates is advisable; |
(2) | If it determines that additional director candidates may be reasonably necessary in the next twelve months, the Committee discusses and prioritizes the skills, experiences and characteristics it desires to target based on the Company’s long-term growth objectives and business strategy; and |
(3) | Once certain skills, experiences and characteristics are identified, the Committee considers potential director candidates from its pool of candidates, reviews recommended director nominees that possess the skills, experiences and characteristics desired, and recommends the nominees to the Board for approval. |
Since establishing the processes described above, the Board has appointed two new directors. In July 2018, the Board appointed Daphne E. Jones, an accomplished and seasoned executive with appropriate biographical information, should be submittedextensive experience in strategic, entrepreneurial and global use technologies in the healthcare sector. Ms. Jones’ contributions to the OfficeBoard have been evident through its strategic oversight of the Corporate Secretary atexecution of the Company’s digital and strategic initiatives. In September 2019, the Board appointed Ms. Teri G. Fontenot, an accomplished and seasoned executive with extensive experience in healthcare leadership, women’s healthcare, corporate finance, economic policy and healthcare policy. As a result of this process, our principal office. Board is proud to be among a unique group of companies with 44% female representation.
Additional information regarding how shareholders can nominate a director candidate for election at our 20202021 Annual Meeting of Shareholders can be found inExhibit A to this proxy statement.
Board Nominee Composition
Our Corporate Governance and Compliance Committee understands the important role board composition and refreshment play in effective oversight. Accordingly, the Committee strives to maintain a diverse board by seeking out candidates with unique skills and experiences, including those from other industries, professional backgrounds, races, ethnicities or genders. In July 2018, the Board appointed a new director, Ms. Daphne E. Jones, an
accomplished and seasoned executive with extensive experience in strategic, entrepreneurial and global use of digital technologies in the healthcare sector. Our Board willis committed to continue to seek out highly qualified candidates with diverse backgrounds, skills and experience to further strengthen our BoardBoard‘s collective composition and servestrategically support the needs of the Company as it evolves.Company’s strategic objectives. A collective summary of our Board'sBoard’s current composition, skills and experiences is set forth below.
Our Nominees for the Board of Directors
Eight directors are to be elected at our 20192020 Annual Meeting of Shareholders to hold office until our next annual meeting or until their successors are duly elected and qualified, or until the director retires, resigns, is removed or becomes disqualified. The proxy will be voted in accordance with the directions stated on the card, or, if no directions are stated, for election of each of the eight nominees listed below. Upon the recommendation of the Corporate Governance and Compliance Committee, the Board
has nominated for
election the eight directors listed below, all of whom are currently serving as directors on our Board. The director nominees for election are willing to be duly elected and to serve. If any such nominee is not a candidate for election at the Annual Meeting, an event that the Board does not anticipate, the proxies may be voted for a substitute nominee(s).The. The business experience, board service, qualifications and affiliations of our director nominees are set forth below.
(2) | the director or an immediate family member is an executive officer of another company which is indebted to us, or to which we are indebted, and the total amount of either company’s indebtedness to the other is less than 1% of the total consolidated assets of the company for which he or she serves as an executive officer and such indebtedness is not past due, or |
(3) | the director or an immediate family member serves as an officer, director or trustee of a charitable organization, and our discretionary charitable contributions to the organization are less than 1% of its total annual charitable receipts. |
The Board has determined that director nominees Mark G. Foletta, Teri G. Fontenot, R. Jeffrey Harris, Dr. Michael M.E. Johns, Martha H. Marsh, Andrew M. Stern, Daphne E. Jones and Douglas D. Wheat all meet our categorical standards for director independence and the applicable rules and regulations of the NYSE and federal securities laws regarding director independence. Our CEO is the only member of our Board who the Board has not deemed independent.
When making director independence determinations, the Board considered a business relationship between LHC Group, Inc., of which Ms. Fontenot is an independent director, and the Company. We discuss this relationship in more detail in the “Certain Transactions” section below. The Board considered the nature of this relationship, the annual amount of payments we receive from LHC Group, the fact that the nature of this relationship resulted solely from Ms. Fontenot’s role as an independent director of LHC Group, Inc., and determined that the relationship did not preclude the Board from making an independence determination for Ms. Fontenot and that the relationship fell within our standards of independence.
We separate the roles of Chairman of the Board and the Chief Executive Officer. Our CEO, Ms. Salka, is responsible for working with the Board in setting our strategic direction and ourday-to-day leadership and performance, while the Chairman of the Board, Mr. Wheat, leads the Board in overseeing our strategy, provides guidance to our CEO and presides over meetings of the Board. At this time the Board believes that having separate roles:
26 | AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement |
CORPORATE GOVERNANCE |
Our Board's Policy onPolicies and Procedures Governing Conflicts of InterestInterest and Related Party Transactions
The Governance Guidelines, establish our director's duties to adhere to our Code of Conduct including our policies onand the Company’s Related Party Transactions Policy adopted by the Board in December 2019 collectively establish the Company’s procedures related to conflicts of interest and related party transactions.
Under these policies, directors and executive officers must promptly notify the Company’s Chief Legal Officer of any potential “related party transaction” that the Company would be required to disclose publicly under Item 404 of RegulationS-K promulgated under the Securities Exchange Act of 1934. Potential related party transactions involving the Chief Legal Officer must be disclosed to the CEO. If the Chief Legal Officer or CEO, as the case may be, determines that a potential related party transaction would be an actual related party transaction, if consummated, such matter must be referred to the Governance and Compliance Committee for review and approval. The Committee may approve the transaction if it determines that consummation of the transaction is in the best interests of the Company’s shareholders.
Further, our policies require our directors and executive officers to avoid any action, position or interest that conflicts with an interest of oursthe Company or gives the appearance of a conflict. We requireAny potential conflict of interest involving our directors or executive officers must be reported in advance to report anythe Chief Legal Officer, with potential conflicts of interest immediatelyinvolving the Chief Legal Officer having to be reported in advance to the ChairmanCEO. If the Chief Legal Officer or CEO, as the case may be, determines that an actual conflict of interest may exist, then the matter must be referred to the Governance and Compliance Committee. We do not, without approvalCommittee for review. If the Governance and Compliance Committee determines that an actual conflict exists, the Company is required to implement guidelines and procedures necessary to remove the conflict.
Any conflict of the Board, permit a director or executive officer, or his or her immediate family member (i.e., spouse, parent, step-parent, child, step-child, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law or anyone (other than a tenant or employee) who shares that person’s home) orinterest issue involving any other person meetingemployee is reviewed by an attorney in our Legal Department. If the definitionattorney believes that an actual conflict of interest issue exists, then the attorney submits the conflict of interest issue to our Chief Legal Officer. If our Chief Legal Officer determines that an actual conflict exists, then the Chief Legal Officer decides what steps should be taken to remove the conflict.
Certain Transactions
In December 2019, the Governance and Compliance Committee evaluated a potential transaction involving the Company and Randstad North America pursuant to which the Company and Randstad North America would agree to jointly pursue and service third parties’ contingent staffing needs. The Governance and Compliance Committee evaluated this transaction as a potential “related person”party transaction” under Item 404 of RegulationS-K promulgated because Ms. Rebecca Henderson holds the position of CEO of Randstad Global Businesses and Ms. Henderson is the spouse of the Company’s President of Professional Services and Staffing, Mr. Ralph Henderson, who is an executive officer. While the nature of the transaction does not currently contemplate any direct payments between the parties in excess of $120,000, the Governance and Compliance Committee believed the transaction will likely benefit each of the Company and Randstad in excess of this amount and evaluated the transaction under the Securities
Exchange ActCompany’s Related Party Transaction Policy. The Company understands that Ms. Henderson is not directly compensated on the basis of 1934, as amended (the “Exchange Act”) (each,the financial performance of Randstad North America, which is a “Randstad portfolio company for which she is not responsible.
After reviewing and considering the terms of this proposed transaction, the Governance and Compliance Committee determined that its consummation is in the best interests of the Company’s shareholders, and it is being negotiated on anrelated personarm’s-length”) basis between the parties. The Governance and Compliance Committee also determined that, based on its review of the processes and guidelines in place to enterlimit Mr. Henderson’s involvement in the proposed transaction, consummation of the proposed transaction and the Company’s performance under the transaction does not constitute a conflict of interest involving Mr. Henderson. Subsequent to the review of this proposed transaction by the Governance and Compliance Committee, the parties entered into a transaction in whichdefinitive agreement on January 20, 2020 and are currently performing the terms of such agreement.
In determining whether directors are independent, the Board considered Ms. Fontenot’s role as an independent director at LHC Group, Inc. In 2019, we arecontinued a participant if (a) the amount involved exceeds $120,000, and (b) the related person has or will have a direct or indirect material interest. We annually solicit information from directors and executive officers to monitor potential conflicts of interest and complycommercial relationship with Securities and Exchange Commission (the “SEC”) requirements regarding approval or disclosure of “related person transactions.” We did not engage in any transaction in 2018 nor is there any currently proposed transactionLHC Group that exceeds or is expected to exceed $120,000 in which we were or are a participant and in which a related person had or will have a direct or indirect material interest.existed before
AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement | 27 |
CORPORATE GOVERNANCE |
Ms. Fontenot joined the Board under which LHC Group provides home health contingent staffing services to the Company. The approximately $1.8 million in fees that we received from LHC Group in 2019 were negotiated on anarm’s-length basis and are well within the categorical independence standards that the Board has adopted. The relationship does not prevent Ms. Fontenot from qualifying as an independent director under the categorical independence standards, and the Board considers Ms. Fontenot to be an independent director.
Our Board'sBoard’s Aggregate Tenure Policy
In February 2019, our Board adopted an aggregate board tenure policy that reflects its commitment to consistently evaluate the composition of our Board to ensure that it collectively possesses the necessary experience, skills, knowledge, and level of engagement necessary to serve the best interests of our shareholders. The terms of the following policy were developed in part based on insight and feedback we received directly from shareholders in connection with our ongoing corporate governance shareholder engagement efforts.
The Board believes that directors should not expect to bere-nominated annually. In determining whether to recommend a director forre-election, the Governance and Compliance Committee considers the needs of the Company and the diversity of the Board as a whole, the director’s participation in and contributions to the activities of the Board, the results of the annual Board evaluation and past meeting attendance.
The Board does not believe in a specific limit for the overall length of time an independent director may serve. Directors who have served on the Board for an extended period can provide valuable insight into the operations and future of the Company based on their experience with, and understanding of, the Company’s history, policies, and objectives. The Board also believes that new directors will strengthen the diversity of the Board, provide fresh perspectives and provide value as the Company evolves. To achieve this balance, effective in 2020, the Board will maintain an average Board tenure for independent board directors of less than ten years.
Upon the conclusion of the Annual Meeting, the aggregate tenure for our Board’s independent directors will be slightly less than 9 years.
Board Meetings and Annual Meeting Attendance by Board Members
We expect each of our directors to attend each meeting of the Board and of the committees on which he or she serves. We also expect our directors to attend our annual meetings. Our Board has an excellent record of attendance and engagement. During 2018,engagement.During 2019, the Board met six times, and took two actions by unanimous written consent. In 2018,2019, no member of the Board attended fewer than 75%of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she has been a director) and (ii) the number of meetings held by all committees of the Board (during the periods that he or she served on such committees). All of our then-serving directors attended our 20182019 Annual Meeting of Shareholders.
|
|
|
|
We have standing Audit, Corporate Governance and Compliance, Compensation, and Stock Plan, and Executive Committees. The Board committees are chaired by independent directors, each of whom report to the Board at meetings on the activities and decisions made by their respective committees. The Board makes committee assignments and designates committee chairs based on a director’s independence, knowledge and areas of expertise. We believe this structure helps facilitate efficient decision-making and communication among our directors and fosters efficient Board functioning at Board meetings.
In line with our value of continuous improvement, the directors conduct an evaluation of the performance of the Board and each of the committees on an annual
basis. Additionally, on abi-annual basis, the Corporate Governance and Compliance Chairman has individual conversations with the directors specifically regarding their board performance and board composition. We describe the current functions and members of each committee below. A more detailed description of the function, duties and responsibilities of the Audit, Governance and Compliance and Compensation Committees is included in each Committee’s charter and available in the link entitled “Corporate Governance” located within the “Investor Relations” tab of our website atwww.amnhealthcare.com.
28 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
CORPORATE GOVERNANCE |
The table below provides current committee memberships and fiscal year 20182019 committee meeting information:
Director | Audit (1) | Compensation (2) | Governance & Compliance(3) | Executive |
Audit (1) |
Compensation (2) |
Governance & Compliance(3) |
Executive | ||||
Mark G. Foletta | Chair |
|
| Chair | ||||||||
R. Jeffrey Harris |
| Member |
| Chair | Member | |||||||
Michael M.E. Johns, M.D. |
| Member | Chair |
| Member | Member | ||||||
Martha H. Marsh |
| Chair | Member |
| Chair | |||||||
Susan R. Salka |
| Member | Member | |||||||||
Andrew M. Stern | Member |
| Member |
| Member | Member | ||||||
Paul E. Weaver⁴ | Member |
| Member | |||||||||
Teri G. Fontenot | Member | |||||||||||
Douglas D. Wheat |
| Chair | Chair | |||||||||
Daphne E. Jones | Member |
|
| Member | Member | |||||||
Committee Meetings and Actions by Written Consent | Committee Meetings and Actions by Written Consent | Committee Meetings and Actions by Written Consent | ||||||||||
Total Committee Meetings | 9 | 6 | 4 | 2 | 9 | 6 | 5 | 2 | ||||
Actions by Written Consent | 0 | 5 | 0 | 1 | 0 | 0 | 0 | 4 |
(1) | The Board has determined that all Audit Committee members (A) are financially literate, and (B) meet the criteria for independence set forth in Rule10A-3 under the Exchange Act, and Section 303A of the NYSE Listed Company Manual. The Board further determined that Mark G. Foletta and |
(2) | The Board has determined that all members of the Compensation Committee meet the standards for independence required by the NYSE. |
(3) | The Board has determined that all members of the Governance and Compliance Committee meet the standards for independence required by the NYSE. |
|
|
Our Audit Committee Charter, which is reviewed annually, and was last amended in December 2018 to reflect the migration of oversight of the Company’s ethics and compliance programs from the Audit Committee to the Governance and Compliance Committee, sets forth the duties of the Audit Committee. Generally, the Audit Committee is responsible for, among other things, overseeing our
| (2) |
|
|
|
| reviews with our independent registered public accounting firm the scope of its audit, its audit report and its recommendations, |
(3) | considers the possible effect on the independence of such firm in approvingnon-audit services requested of it, |
(4) | reviews disclosures made by our CEO and CFO in connection with the certification of our periodic reports, |
(5) | reviews and discusses with management significant technology strategic initiatives, operations and risk, |
(6) | reviews and discusses with management the |
(7) | appoints our independent registered public accounting firm, subject to ratification by our shareholders. |
CORPORATE GOVERNANCE AND COMPLIANCE COMMITTEE
Our Corporate Governance and Compliance Committee Charter which was recently amended in December 2018 to, among other things, reflect the migration of oversight of the Company’s ethics and compliance programs from the Audit Committee to the Governance and Compliance Committee, sets forth the duties of the Governance and Compliance Committee. The Governance and Compliance Committee, which was formally the Corporate Governance Committee, was, at the time of the migration, renamed the Corporate Governance and Compliance Committee. Generally, the Governance and Compliance Committee:
(1) | identifies and recommends qualified individuals with diverse backgrounds and experiences to become members of the Board, |
(2) | periodically evaluates the Code of Conduct and the Governance Guidelines, |
(3) | reviews the Board’s performance on an annual basis, |
(4) | oversees all aspects of the Company’s ethics and compliance programs, including the Company’s healthcare and employment regulatory compliance and risk oversight with respect to the credentialing of candidates, |
(5) | reviews and evaluates succession planning for the CEO and other members of our executive management team, |
(6) |
| recommends potential successors to the CEO, oversees our shareholder engagement program as it relates to corporate governance issues and considers feedback provided by our shareholders, and |
AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement | 29 |
CORPORATE GOVERNANCE |
(7) | reviews and discusses with our executive team relevant quality metrics, compliance with certification standards and related laws and regulations as well as our enterprise risk management process relating to the quality of our services. |
With respect to director nominee procedures, the Governance and Compliance Committee utilizes a broad approach for identification of director nominees and may seek recommendations from our directors, officersmanagement or shareholders or it may choose to engage a search firm. A detailed discussion of our Board composition evaluation and director nomination process is described in the “Board Composition Evaluation and Director Nomination Processes“ section located on page 6 above.
In evaluating and determining whether to ultimately recommend a person as a candidate for election as a director, the Governance and Compliance Committee considers the qualifications set forth in our Governance Guidelines, including:
judgment, business and management experience,
leadership,
strategic planning,
reputation for honesty and integrity,
diversity, and
independence from management.
It also takes into account specific characteristics, skills and expertise that it believes will enhance the diversity of knowledge, expertise, experience, background and personal characteristicscollective composition of the Board.Board to most effectively support our long-term strategic objectives. The Governance and Compliance Committee may engage a third party to conduct or assist with the evaluation. Ultimately, the Governance and Compliance Committee seeks to recommend to the Board those nominees whose specific qualities, experience and expertise will augment the current Board’s composition and whose past experience evidences that they will (1) dedicate sufficient time, energy and attention to ensure the diligent performance of Board duties, (2) comply with all duties of care, loyalty and confidentiality applicable to them as directors of publicly traded corporations, and (3) adhere to our Code of Conduct.
|
|
|
|
The Governance and Compliance Committee considers shareholder recommendations of qualified nominees when such recommendations are submitted in accordance with the procedures described in the Bylaws. To have a nominee considered by the Governance and Compliance Committee for election at the 20202021 Annual Meeting of Shareholders, a shareholder must submit the recommendation in writing to the attention of our Corporate Secretary at our corporate headquarters no later than January 17, 202022, 2021 and no sooner than December 18, 2019.23, 2020. Any such recommendation must include the information set forth onExhibit A to this proxy statement (pageA-1).
The Governance and Compliance Committee received no recommendations for a director nominee from any shareholder for the director election to be held at the Annual Meeting.
COMPENSATION COMMITTEE
The Compensation Committee Charter, last amended in April 2017,2019 to more effectively delineate the Committee’s oversight of the Company’s human capital management and equal pay strategies, sets forth the Committee'sCommittee’s duties. Among other things, the Compensation Committee:
(1) | establishes the executive compensation philosophy for the Company, |
(2) | designs executive compensation programs to attract, incent and retain executive talent, |
(3) | reviews, and, when appropriate, administers and makes recommendations to the Board regarding (A) compensation of our CEO (including employment agreements or severance arrangements, if applicable, and executive supplemental benefits or perquisites, if any), all senior officers that report directly to our CEO and our directors and (B) our incentive compensation plans and equity-based plans, |
(4) | prepares the Compensation Committee Report and oversees the preparation of our compensation disclosure and analysis required by the SEC to be included in our annual proxy statement and recommends their inclusion in the annual proxy statement to the Board, |
(5) | recommends the proposals on |
(6) | reviews our incentive compensation arrangements generally to determine whether they encourage excessive risk-taking, |
(7) | evaluates the performance of our |
(8) | oversees the Company’s human capital management strategy, including talent recruitment, retention and engagement and its diversity, equality and inclusion initiatives. |
For further information about the responsibilities of the Compensation Committee, please see the
Compensation Discussion and Analysis beginning on page 35portion of this proxy statement below.
30 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
CORPORATE GOVERNANCE |
Compensation Committee Interlocks and Insider Participation
The Compensation Committee, whose members are Ms. Marsh, Mr. HarrisDr. Johns, and Dr. Johns,Ms. Jones consists exclusively ofnon-employee, independent directors, none of whom has a business relationship with us, other than in his or her capacity as director, or has any interlocking relationships with us that are subject to disclosure under the rules of the SEC related to proxy statements.
Compensation Committee Consultant Independence
The Compensation Committee retains an independent consultant to assist it in fulfilling its responsibilities. Since 2008, the Compensation Committee has utilized Frederic W. Cook & Co., Inc. as its compensation consultant. Our compensation consultant advises the Compensation Committee on a variety of topics, including, among others, our equity compensation program, the design of our cash incentive program, the evaluation of the alignment of our compensation program with our shareholders’ interests, the risks presented by our executive compensation program structure, the assessment of the program compared to our peers and director and executive compensation trends.
In retaining and utilizing Frederic W. Cook & Co., the Compensation Committee considers (1) our directors’ experience with its employees and representatives while serving on other boards, (2) knowledge and experience in executive compensation program design, corporate finance and legal and regulatory issues, (3) experience providing consultative services to boards, as well as its analysis of our existing program and proposal of key considerations in evaluating and strengthening our program and (4) factors affecting independence, including factors set forth by the NYSE for evaluating the independence of advisors. In connection with its consideration of Frederic W. Cook & Co.’s independence, the Compensation Committee factored in that Frederic W. Cook & Co. does provide consulting services to other companies that have a director who is also a director of ours, but it does not have any other relationship with or provide any other services to us. As a result of the Compensation Committee’s review of the factors affecting independence, it has determined that Frederic W. Cook & Co. is independent and has no conflicts of interest with us.
EXECUTIVE COMMITTEE
The Executive Committee exercises the power of the Board in the interval between meetings of the Board, including the approval of certain acquisitions within established parameters.
|
|
|
|
Executive Sessions ofNon-Management Directors
The Board has executive sessions at each regularly scheduled Board meeting during the year, for which our management director, Ms. Salka, is not present.
Communications with the Board of Directors
The Board has established the following procedure for shareholders and other interested parties to communicate with members of the Board, the presiding director, or the independent directors as a group. All such communications should be addressed to the attention of our Corporate Secretary at our offices located at 12400 High Bluff Drive, Suite 100, San Diego, California 92130. The Corporate Secretary collects and maintains a log of each such communication and forwards any that the Corporate Secretary believes requires immediate attention to the appropriate members of the Board, who then determine how such communication should be addressed.
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 31 |
DIRECTOR COMPENSATION AND OWNERSHIP GUIDELINES |
AND OWNERSHIP GUIDELINES
Members of the Board, who are not employees of the Company ("“Independent Directors"”), receive compensation for their service in the form of cash and equity. Each form of compensation is evaluated by the Compensation Committee on an annual basis. The Compensation Committee believes director pay should be aligned with the long-term interests of shareholders, so it has historically given substantial weight to the equity component, which represented approximately 64%66% of our Independent Directors median total compensation in 2018.2019. As part of their annual review process, the Compensation Committee evaluates a variety of sources and benchmarks the compensation we pay our Independent Director'sDirector’s against our peer group and relevant market data. It also consults with an independent compensation consulting firm, Frederic W. Cook & Co., Inc., prior to issuing a recommendation to the Board, which it has historically done in April. Following this process provides the Compensation Committee with more visibility into director pay trends based on the most recently disclosed public filings of peer companies included in its analysis.
We pay our Independentindependent Directors an annual cash retainer. We do not pay any meeting fees to our directors. The Chairman of the Board, Committee Chairpersons and one Executive Committee member receive an additional annual retainer for their services. We also reimburse directors forout-of-pocket expenses incurred in connection with their service. Annual retainers are paid in four equal quarterly installments. The table on the right sets forth the
current annual retainer schedule for our Independent Directors.
| Position |
|
| Annual Retainer ($) | |
Independent Director |
|
|
| ||
Chairperson of the Board | 100,000 |
| |||
Chairperson of Audit Committee |
|
| 30,000 | ||
Chairperson of Compensation Committee |
|
| 15,000 | ||
Chairperson of Corporate Governance and Compliance Committee | 10,000 | ||||
Executive Committee Member |
|
| 10,000 |
|
|
We typically grant full-value equity awards tonon-management directors upon appointment or election to the Board, and annually thereafter during the director’s term. We anticipate that we will continue to grant annual equity awards to our independentnon-management directors at some level for the foreseeable future. Since 2010, theThe aggregate grant date fair value, (“which we refer to as AGDFair Value,”) of such equity awards has been approximately $135,000. In 2018, the value was increased by $5,000 tois $140,000, to alignwhich we believe aligns with the market.market for independent director compensation.
On April 18, 2018,17, 2019, each independentnon-management directors director received an equity award of 2,1532,907 restricted stock units, (“RSUs”). Our director’swhich we refer to as RSUs. The RSU awards issued to independent directors vest on the earlier of theone-year anniversary of the grant date or the 20192020 annual meeting of shareholders, provided such director remains in service, and each director was given the option to defer receipt of the shares underlying the RSUs until his or her separation of service.
32 | AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement |
|
DIRECTOR COMPENSATION AND OWNERSHIP GUIDELINES |
Director CompensationCompensation Table
The following table reflects compensation that our directors earned during fiscal year 2018.2019. The table does not include Ms. Salka, who received no additional compensation for her service as a director.
| Name |
| Fees Paid in Cash ($) |
|
| Fees Paid in Stock ($)(1) |
|
| Total ($) |
| |||
| Mark G. Foletta |
|
| 98,750 |
|
|
| 140,053 |
|
|
| 238,803 |
|
| R. Jeffrey Harris |
|
| 68,750 |
|
|
| 140,053 |
|
|
| 208,803 |
|
| Michael M.E. Johns, M.D. |
|
| 78,750 |
|
|
| 140,053 |
|
|
| 218,803 |
|
| Martha H. Marsh |
|
| 83,750 |
|
|
| 140,053 |
|
|
| 223,803 |
|
| Andrew M. Stern |
|
| 68,750 |
|
|
| 140,053 |
|
|
| 208,803 |
|
| Paul E. Weaver |
|
| 78,750 |
|
|
| 140,053 |
|
|
| 218,803 |
|
| Douglas D. Wheat |
|
| 168,750 |
|
|
| 140,053 |
|
|
| 308,803 |
|
| Daphne E. Jones |
|
| 32,500 |
|
|
| 100,018 |
|
|
| 132,518 |
|
Name | Fees Paid in Cash ($) | Fees Paid in Stock ($)(1) |
Total ($) | |||||||||
Mark G. Foletta |
| 100,000 |
|
| 140,001 |
|
| 240,001 |
| |||
R. Jeffrey Harris |
| 77,500 |
|
| 140,001 |
|
| 217,501 |
| |||
Michael M.E. Johns, M.D. |
| 72,500 |
|
| 140,001 |
|
| 212,501 |
| |||
Martha H. Marsh |
| 85,000 |
|
| 140,001 |
|
| 225,001 |
| |||
Andrew M. Stern |
| 70,000 |
|
| 140,001 |
|
| 210,001 |
| |||
Paul E. Weaver (2) |
| 23,270 |
|
| - |
|
| 23,270 |
| |||
Douglas D. Wheat |
| 170,000 |
|
| 140,001 |
|
| 310,001 |
| |||
Daphne E. Jones |
| 70,000 |
|
| 140,001 |
|
| 210,001 |
| |||
Teri G. Fontenot |
| 20,222 |
|
| 75,489 |
|
| 95,711 |
|
(1) | The amount set forth in this column represents the AGD Fair Value of the |
(2) | Mr. Weaver retired from the Board in April 2019. |
Director Equity Ownership Requirement
Our Board believes that all directors should maintain a meaningful personal financial stake in the Company to further align their long-term interests with our shareholders. Accordingly, it is the Board’s desire that eachnon-management director will hold Common Stock and vested but unsettled RSUs of the Company equal to a value of at least five times the director’s annual cash retainer (i.e., $350,000). The
Company does not take into account the value of unvested RSUs and vested or unvested stock appreciation rights (“SARs”) and options in determining whether a director meets our director equity ownership guidelines. As of December 31, 2018,2019, all of our directors, with the exception of Ms. Jones and Ms. Fontenot, who waswere appointed to the Board in July 2018 and September 2019, respectfully, satisfy our director equity ownership guidelines.
AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement | 33 |
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION |
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
2019 PAY AND PERFORMANCE
In 2019, the Company furthered its long-term strategic objective to continue to diversify our portfolio of talent solutions. Through our acquisitions of Silversheet and b4health, we expanded our suite of technology solutions offered to clients as a total talent management and workforce solutions partner. Additionally, our acquisition of Advanced Medical allowed the Company to expand its footprint into schools and other nonacute settings, which are strategically significant to our long-term growth objectives as patient care continues to extend beyond the traditional hospital walls. The Compensation Committee is comfortable that the outcomes under the Company’s incentive compensation plans reasonably reflect the balance of short- and long-term performance and that management continues to take the necessary actions today to achieve the Company’s long-term strategic plan and deliver shareholder value. Our total shareholder return performance restricted stock units paid out at the maximum of 175% of target, as management continued to deliver strong shareholder returns. Our cumulative total shareholder return, which we refer to as TSR, of 73.5% placed us in the 81st percentile of the Russell 2000 Index during the measurement period of January 1, 2017 through December 31, 2019. The Compensation Committee has historically set stretch, but realistic, targets to achieve performance incentive payouts under its Senior Management Incentive Bonus Plan, which we refer to as the Bonus Plan. Thus, despite all of the strategic achievements that the Company delivered in 2019 and its strong TSR, the Company’s financial performance, excluding the financial impact of its largest 2019 acquisition, Advanced Medical, did not satisfy the levels necessary to achieve target payouts under our Bonus Plan or the adjusted EBITDA margin equity performance awards. The Company’s financial performance was negatively impacted by the disruption in our Locum Tenens segment from organization and technology changes in 2018 and a challenging nurse supply market. Our Bonus Plan performance measures and the adjusted EBITDA margin targets are described in more detail in the following Compensation Discussion and Analysis. APPROVAL OF PERFORMANCE GOALS FOR 2020 Looking to 2020, in connection with the review of the long and short-term goals, the Compensation Committee established financial goals for performance-based compensation with thresholds, targets and maximums for Bonus Plan compensation. We set Bonus Plan targets based on our annual operating plan and intend that the achievement of our annual targets will contribute to achievement of our long-term strategy. The Compensation Committee determined there was a reasonable likelihood that our executives could achieve the goals and earn Bonus Plan compensation at the target performance level based on the Company’s 2020 annual operating plan, while at the same time encouraging stretch performance. The Compensation Plan Committee has reviewed and discussed the Compensation Discussion and Analysis that follows with management, and has recommended to the Board that it be included in this proxy statement. |
|
|
Compensation Committee Members |
Martha H. Marsh |
Daphne E. Jones |
Michael M.E. Johns, M.D. |
34 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis, which we refer to as the CD&A, provides a detailed description of the compensation objectives, philosophy, design, practices and programs that comprisefor our named executive officers’ total rewards program. It also explains how theofficers. The Compensation Committee determines executive compensation under this program, as it takes great care in the development and refinement of a total rewards programcomprehensive package that reflects its stewardshipoversight responsibility relating to AMN's shareholders while simultaneously ensuring the availability ofattracting, retaining and incenting talent to lead our organization to achieve our strategic goals.
More specifically, this CD&A provides clear details related to each of the following aspects of the total rewards program that has been designed for our named executive officers: (1) the objectives and philosophy, (2) the processes and criteria in place for proper oversight, (3) the design and components of our named executive officers’ total rewards program, and (4) how each component fits into our Compensation Committee'sCommittee’s overall objective to support the Company'sCompany’s business strategy.
The Compensation Committee believes that our named executive officers are collectively a strong, valuable, experienced, skilledtalented and innovative team, with a passion for the Company, its core values and delivering sustainable long-term returns for our shareholders. Our named executive officers for the 20182019 fiscal year are listed below.
Name | Current Title | |
Susan R. Salka | Chief Executive Officer | |
Brian M. Scott | Chief Financial Officer, Chief Accounting Officer and Treasurer | |
Ralph S. Henderson | President, Professional Services and Staffing | |
Denise L. Jackson | Chief Legal Officer and Corporate Secretary |
Ourpay-for-performance focused executive compensation program is designed to motivate our leaders to build sustainable long-term shareholder value. Among other things, the Compensation Committee premises our executive compensation objectives on the following guiding principles:
tosupport the attainment of our short- and long-term financial objectives in alignment with our business strategy;
attract, retain and motivate talented and innovative executives who will extend our leadership position as the driver of quality and innovation within our industry; align pay with performance, with variable pay constituting a significant portion of total compensation;
to create commonality of interest between our executives and shareholders by tying realized compensation directly to changesincreases in shareholder value; and
to support the attainment of our short- and long-term financial and strategic objectives;
|
|
to foster a culture of integrity, equality and ethics where team members are treated with respect and appreciation for their contributions.
To support ourAMN’s objectives, we havethe Compensation Committee has designed an executive compensationa total rewards program for our named executive officers that includes (1) base salary, (2) annual bonuses, and (3) long-term incentive awards,the following primary features, which constitutes a significant portionconstitute the majority of our named executive officers total pay.
pay: (1) base salary; (2) annual bonuses; and (3) long-term incentive awards.
| ||||
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 35
|
COMPENSATION DISCUSSION AND ANALYSIS |
Below is a summary relating to our named executive officers’ total rewards compensation program.
What We Do | ||
| Executive Compensation Philosophy | |
| Align Pay with Performance. | |
| Reward for Increases in Shareholder Value.We grant performance restricted stock units, which we refer to as PRSUs, | |
|
| |
| Ownership Guidelines.We have meaningful stock ownership requirements for our named executive officers that require ownership of unrestricted shares. | |
| Cap Incentive Awards.We | |
|
| |
| Independent Compensation Consultant.Our Compensation Committee utilizes the services of an independent and reputable compensation consultant, Frederic W. Cook, to provide | |
| Responsible Share Usage.We judiciously grant shares under | |
| Appropriate Peer Group Selection.We regularly review our | |
|
|
What We | ||
| No Risky Programs. | |
| No Pledges or Hedges | |
|
| |
| No New TaxGross-ups. We have committed to not enter into new employment or other agreements with tax | |
| No Options or SARs. |
36 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS |
| 2019 |
|
|
2018 Financial, Operational and Stock Performance Highlights
A long-standing principle of our executive compensation program is to linklinking pay to performance. Accordingly, when making compensation decisions, we analyze our financial, operational and stock performance and execution on strategic initiatives.
As set forth below, the The Company delivered revenue, profitability and share growth in 20182019(1) and continued to make significant progress on our short- and long-term strategic goals.objectives and overall business strategy.
Some of our 20182019 highlights include:
The price of our common stock increased 15% in 2018 to $56.66, the closing price on December 31, 2018.
WeOur TSR ranked in the 84th81st percentile in total shareholder return for the three-year period ended December 31, 20182019 among companies comprising the Russell 2000 Index as of December 31, 20152016 with a cumulative total shareholder return forof 73.5%.
The price of our common stock increased 10% in 2019 to $62.31, the last three years (i.e., sinceclosing price on December 31, 2015)2019.
Execution of 89.8%.our long-term strategic plan by consummating the following acquisitions:
In January 2019, we acquired Silversheet Inc., which we refer to as Silversheet, anall-in-one healthcare provider credentialing and privileging SaaS solution. We often hear from clients that the credentialing and privileging processes are some of their largest pain points, and we believe that our acquisition of Silversheet will help our clients solve some of the inefficiencies associated with these processes. In June 2019, we acquired Advanced Medical Personnel Services, Inc., which we refer to as Advanced Medical. A key to achieving our long-term growth strategies is expanding our service footprint into nonacute settings. Our acquisition of Advanced Medical furthers this objective by expanding our offerings to include the placement of therapists and nurses in contract positions across multiple healthcare settings, including schools, clinics, skilled nursing facilities, home health and telehealth environments. Our acquisition of Advanced Medical also bolsters our clinician supply in a competitive labor market, which we has helped alleviate some of the supply challenges the Company has experienced in 2019. In December 2019, we acquired b4health, LLC, which we refer to as b4health. b4health is an innovative technology company and leading provider of aweb-based internal float pool management solution and vendor management system for healthcare facilities. Our acquisition of b4health further diversifies of our workforce solutions offerings by providing technology aimed at automating communication, time management, and scheduling for clients to increase their clinician fill rates. It also further differentiates our suite of total workforce solutions by offering float pool and independent contractor management capabilities. We believe these acquisitions will allow us to continue to strengthen our position as the industry’s most trusted total talent solution partner by diversifying our offerings and expanding our footprint into nonacute care settings. |
|
|
Increased our consolidated revenue year over year by approximately 7%4% from approximately $1.99$2.14 billion to approximately $2.14$2.22 billion.
Our Allied business was our best-performing staffing line in 2019, reaching $323 million in annual revenue, 29% higher than the previous year including 9% in year over year organic growth.
Revenue for our Other Workforce Solutions segment reached a record $477.5 million for 2019, with consolidated growth of 9% over 2018. Within this segment, we consolidated our interim leadership and permanent placement businesses into one Leadership and Search Solutions division. This move strengthened ourgo-to-market strategy and bolstered support of key brands in leadership and physician permanent placement.
• | Increased our consolidated adjusted EBITDA(2) year over year by approximately |
Continued to return value to our shareholders through the repurchase of approximately 1,236,000 shares of our common stock.
Made further progress upgrading and integrating our front and back office technology platforms in order to deliver best-in-class client and healthcare professional experiences and optimize the efficiency of our business operations.
Continued execution of our digital and analytical strategic initiatives to improve the recruitment, engagement and retention of healthcare professionals through development of mobile technology platforms and artificial intelligence.
The following charts compare our year-over-year performance on key financial metrics that we utilized in making compensation decisions for our named executive officers in 2018.
(1) | For more detail regarding our financial results, please see our |
(2) | For information on adjusted EBITDA, which means adjusted earnings before interest, taxes, depreciation and amortization, and a reconciliation of it to our |
| ||||
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement | 37
|
COMPENSATION DISCUSSION AND ANALYSIS |
Capitalized on a favorable capital markets environment to make a private offering of $300 million of Senior Notes due 202 to provide for additional liquidity to pursue strategic acquisitions and other investments that we believe enhance long-term shareholder value.
Continued to return value to our shareholders through the repurchase of approximately 395,212 shares of our common stock.
Continued execution of our digital and analytical strategic initiatives to improve the recruitment, engagement and retention of healthcare professionals through development of mobile capabilities, scheduling applications and artificial intelligence.
The following charts compare our year-over-year performance on key financial metrics that we utilized in making
compensation decisions for our named executive officers in 2019.
The Compensation Committee placed considerable emphasis on our total shareholder return as well as financial and operational performance over the past 12 months in determining our CEO’s 20182019 cash bonus as well as her 20182019 equity awards. Because certain compensation information included in this proxy statement spans the last three fiscal years, we have set forth below our cumulative total shareholder return and compound annual growth rate for theone-,two- and three-year periods ended December 31, 2018.2019.
| Period | Cumulative Total Shareholder Return (1) |
| Compound Annual Growth Rate |
| Common Stock Price at Beginning of Period |
| |
| One-Year Period Ended December 31, 2018 | 23% |
| N/A |
| $ | 56.66 |
|
| Two-Year Period Ended December 31, 2018 | 65% |
| 21% |
| $ | 38.45 |
|
| Three-Year Period Ended December 31,2018 | 90% |
| 22% |
| $ | 31.05 |
|
Period | Cumulative Total Shareholder Return (1) |
Compound Annual Growth Rate
| Common Stock Price at Beginning of Period | |||||||||
One-Year Period Ended December 31, 2019 |
| 5% |
|
| N/A |
| $ | 55.65 |
| |||
Two-Year Period Ended December 31, 2019 |
| 30% |
|
| 27% |
| $ | 49.60 |
| |||
Three-Year Period Ended December 31,2019 |
| 73% |
|
| 17% |
| $ | 39.20 |
|
(1)The price of our common stock on December 31, 20182019 (the last trading day of the year) was $56.66.$62.31. Unlike the total return values illustrated in the Proxy Statement Summary section above on page 1, which calculates the return using the closing price of our common stock on the first and last date of an applicable measurement period, the cumulative total shareholder return illustrated in this column is based upon the provisions of the Company’s TSR performance equity awards agreements, which measure the percentage increase in the 90 day average closing price of our common stock on the trading day at the end of the relevant investment period from the 90 day average closing price of our common stock on the last trading day of the year preceding the beginning of the applicable period. We did not pay any dividends during the periods set forth in this table.
38 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS |
20182019 Compensation for Our Named Executive Officers
Numerous factors played a role in our 20182019 compensation decisions with the overarching goal of closely linking pay to performance. In 2018,2019, performance-based cash incentives and equity compensation (which is inherently linked to performance) comprised 78%80% of our CEO’s compensation, and 61%68% - 73% of the total compensation for each of our other named executive officers.
To illustrate this, the chart set forth below reflects the percentage breakdown of our CEO's 2018CEO’s 2019 compensation as set forth in the Summary Compensation Table.
AMN HEALTHCARE SERVICES, INC. |
2020 Proxy Statement |
39 |
COMPENSATION DISCUSSION AND ANALYSIS |
As the Compensation Committee has consistently done throughout the past several years, it based its 20182019 compensation decisions around financial goal setting for 20182019 and other actions influencing executive compensation based on the expectation that (1) we would achieve targeted revenue and adjusted EBITDA growth on a consolidated basis, and within each of our business segments, and (2) our named executive officers would lead their teams to successfully execute our business strategy in a manner that reflected our core values. As a result of our 20182019 operational performance and financial results, each named executive officer earned approximately 71% 69% of his or her target bonus that was tied to the Company's 2018Company’s 2019 financial performance. On the following pageBelow is a breakdown of each of our named executive officer’s compensation for 2018.
2019.
Response to 2019Say-on-Pay Vote
|
|
|
|
Response to 2018 Say-on-Pay Vote
At our 20182019 Annual Meeting of Shareholders held on April 18, 2018,17, 2019, we received more than 94%97% support on our “say-on-pay”“say-on-pay” proposal regarding the compensation of our named executive officers identified in our 2018 proxy statement.officers. Our compensation program has remained consistent with that set forth in our 20182019 proxy statement. Westatement and we believe the following four themes remain important among our investors: (1) compensation should correlate to company performance, (2) performance awards should constitute an important component of long-term incentive awards, (3) performance measures beyond total shareholder return should be considered, and (4) variable compensation should be designed to motivate, reward and retain executives.
40 | AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS |
The Compensation Committee believes that our executive compensation program in 20182019 satisfied each of the four themes identified above. In 2018,2019, the Compensation Committee took the following actions:
(1) |
|
|
(2) | Established goals of |
(3) |
|
|
|
|
(4) |
|
|
Our Compensation Program Philosophy and Objectives
A guiding principle of our Executive Compensation Philosophy is that compensation realized by executives should generally(i) align with shareholders’ interests; (ii) reflect the individual skills and contributions of the executive in achieving the strategic, financial and operational goals of the Company and (iii) reflect the leadership they demonstrate in promoting our values-based culture. Additionally, corporate governance best practices, input received from shareholders through our engagement discussions and the annual shareholder advisory vote on executive compensation are also considered in the design of our executivesexecutives’ total rewards package. Our philosophy embraces the following principles, which the Compensation Committee sets forth in its Executive Compensation Philosophy, and is available in the “Corporate Governance" section under the "Investor Relations" tab of our Company's website at www.amnhealthcare.com.principles:
Pay-for-performance, with variable pay constituting a significant portion of total compensation,
Create commonality of interest between our executives and shareholders by tying realized compensation directly to changes in shareholder value,
Focus on propelling growth in the attainment of our long-term financial and strategic objectives,
|
|
Reward our executives for long-term improvement in shareholder value,
Provide equal pay based on performance without regard to legal status and classification,
Attract, retain and motivate highly skilled and innovative executives that embrace and promote AMN'sAMN’s values-based culture that fosters innovation, diversity and inclusion,
Build a strong talent base to reinforce our succession plan objectives,
Be competitive with companies in our peer group,
Maximize the financial efficiency of the overall program from, including but not limited to tax, accounting, and cash flow perspectives, and
Ensure that corporate governance practices and the impact of oursay-on-pay proposals are upheld.
|
|
|
|
With these principles as our foundation, we have designed and continually evaluate and modify, as necessary, our executive compensation program to support our strategic objectives of achieving above-market growth in revenue and profitability by (1) being the leader and innovator in healthcare workforcetotal talent solutions and staffing services, (2) growing our overall revenue mix from strategic workforce solutions and technology and (3) delivering a superior customer experience through operational excellence and agility.
The primary components of our executive compensation program - (1) base salary, (2) annual cash performance bonuses, and (3) long-term equity incentive awards - reflect the implementation of our executive compensation philosophy. The Compensation Committee is provided with benchmarking information of each of these components at the 25th percentile, the median and 75th percentile utilizing companies, including all members of our peer group, that are similar to us in terms of business type, revenue and market capitalization. The Compensation Committee considers benchmarking data as a reference point rather than determinative data. Compensation for specific individuals may vary sometimes significantly, upward or downward from the median for individual named executive officers based on, among other things, individual performance, tenure, experience, scope of responsibilities, internal parity considerations, the recommendations of our CEO (for compensation other than her own) and succession considerations.
BASE SALARY
AMN HEALTHCARE SERVICES, INC. | 2020 Proxy Statement | 41 |
We utilize base salary as an essential component
COMPENSATION DISCUSSION AND ANALYSIS |
The illustration below provides a high level summary of the primary components of our executive compensation program. We utilize base salary to attract and retain talented executives and to provide them with a fixed base of cash compensation. As set forth below, we analyze a variety of factors in addition to peer group comparative information in setting salaries for our named executive officers.
CASH INCENTIVE PERFORMANCE BONUS
The principles associated with our performance-based compensation reflect a balance of objectives. Our annual cash incentive consists of (1) a financial performance component that we base solely on our annual operational results as measured against certain financial metrics, which we refer to as the Financial Component in this CD&A, and (2) a non-financial component (the “RP/Leadership Component”) that is based on, among other things, (A) our performance relative to our direct competitors and (B) individual leadership contributions. We focus the Financial Component on the achievement of financial targets set out in our annual operating plan that we set with the goal of achieving what we believe
constitutes above market performance in the healthcare workforce solutions industry. Because we base our annual operating plan on goals related to the execution of our operational and business strategies, the annual cash incentive plan supports the achievement of our strategic goals. The RP/Leadership Component of our annual cash incentive focuses on incentivizing both superior performance over our direct competitors as measured against certain financial metrics, achievement of a significant strategic and operational goals and effective leadership in line with our core values and executive leadership competencies. The Compensation Committee also considers relative and total shareholder return in determining our CEO’s award under the RP/Leadership Component.
LONG-TERM EQUITY INCENTIVES
We believe our long-term incentives should consist primarily of equity. We provide such incentives through our Equity Plan, which our shareholders last approved in April 2017. The principles guiding the design of our long-term incentive plans include utilizing long-term incentives to (1) align executive and shareholder interests, (2) enhance focus on improvements in
Component | Purpose | Key Features | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | Attract and retain talent | • Fixed base of cash compensation • Reviewed and approved annually • Benchmarked annually to the median of our peer group and other companies of similar revenue size and market capitalization • Salaries determined based on individual performance, experience and scope of responsibility | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive Bonus | Drive achievement of annual strategic and financial objectives | • Incentivizes executive officers to achieve annual financial objectives that support our strategic objectives • 70% of target values are directly tied to measurable financial measures • 30% of target values are directly tied to non-financial factors, such as performance relative to direct competition, leadership, achievement of strategic objectives and total shareholder return • Target values benchmarked annually against comparable positions and within our peer group • Minimum payouts generally begin at 90% of the applicable financial performance measure, with maximum payouts generally requiring 100% to 120% of the targeted performance measure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Incentives | Aligned with shareholders’ interests and drive achievement of our long- term strategic objectives | • Performance generally covers a three year period • Target objectives focus on enhancing improving operating performance and
Our Compensation Program Oversight
RESPONSIBILITIES OF THE COMPENSATION COMMITTEE The primary responsibilities of the Compensation Committee include oversight of our executive compensation programs. Specifically, they include: determining the compensation of our CEO and, in partnership with our CEO, establishing the compensation of all other executive officers, including salary, cash incentives and equity awards, designing our incentive compensation programs and administering our Equity Plan and Bonus Plan, establishing the financial metrics and performance targets under our as set forth more fully above (see page 24 above), analyzing the risk associated with our compensation practices.
The Compensation Committee reviews all components of compensation of the named executive officers and other The Compensation Committee generally conducts its salary and bonus structure review for a particular year in the last quarter of the previous year or early in the subject year. At that time, the Compensation Committee evaluates compensation by, among other things, reviewing (1) peer benchmarking information, The Compensation Committee under which we may issue up to 200,000 shares of our common stock to certain prospective employees. The Company did not make any equity grants from this plan in 2019. In the Compensation Committee’s discretion, it may authorize our CEO to grant equity awards to OUR The duties of the Compensation Committee require
Committee reviews (1) compensation information for companies comparable in size and industry, (2) our financial performance against our internal financial targets, our designated peer group and the Russell 2000, and (3) internal compensation comparability among senior executives. Because the Compensation Committee compares our performance against that of our peer group as part of its oversight responsibilities, it must determine our peer group. executive talent with such peers. Accordingly, the Compensation Committee evaluates
Our Annually, in July, the Compensation Committee evaluates our peer group for the upcoming year primarily using industry, annual revenue, market capitalization as well as competitors and other companies from whom the Company recruits talents.
TRAILING TWELVE MONTHS REVENUE ($MM) MARKET CAPITALIZATION ($MM)
Components of Our Compensation Program
In line with our core value of continuous improvement, we (1) listen to our shareholders, (2) review the latest trends in executive compensation practices, (3) evaluate whether certain pay practices are viewed with disfavor by shareholders or proxy advisory services and (4) review our pay practices to ensure that we have designed and implemented compensation programs that we believe will create value for our shareholders with a balance of short- and long-term incentives. The
Base salary serves as the first component of our executive compensation program. In setting base salaries, the Compensation Committee considers a number of factors, including:
We manage salary changes to fall within our annual budget. We evaluate our operational and financial performance in light of our annual internal objectives and our annual operating plan and the healthcare workforce solutions and staffing industry ANNUAL CASH INCENTIVE Annual cash The threshold level for each metric typically starts at a minimum performance level (e.g., 90% of consolidated adjusted EBITDA). The maximum bonus typically requires a performance level of 110% to 120% of the target amount for each metric. We have typically used incremental hurdles (usually 1% increments for adjusted EBITDA andone-half percent increments for revenue) of performance between the threshold level and the maximum level that increase the amount of bonus that can be earned on a straight-line basis depending on the
hurdle ultimately achieved. In setting each named executive officer’s target bonus, the Compensation Committee evaluates benchmarking data for comparable positions generally and within our peer group, the recommendations of our CEO (except with respect to her target bonus), individual performance, knowledge, experience and responsibilities, and the amount of the potential bonus under various performance scenarios. As with base salary, the Compensation Committee considers these factors in the context of each individual’s total cash compensation as well as the total compensation package (i.e., equity and cash) generally. As set forth in our Executive Compensation Philosophy, the principles governing the annual design include the following:
The Compensation Committee may amend the Bonus Plan at any time and may also amend any outstanding award granted under the Bonus Plan, provided it may not amend the Bonus Plan without the approval of our shareholders if the amendment would affect the tax deduction of payments made under it. LONG-TERM INCENTIVES Long-term incentives in the form of equity awards serve as the third component of our executive compensation program. Under our Equity Plan, we grant equity awards with various vesting parameters, typically three years in length, to named executive
officers and key employees as an incentive to have a long-term perspective in supporting and developing our strategic objectives. We also use them as an employee retention tool. We utilize PRSUs as part of our long-term incentive structure to strengthen the performance-based component of the long-term incentive program. In In general, we believe long-term equity incentive opportunities should be targeted to approximately the market median so that when combined with base salary and target annual bonus, total compensation falls around the median of market levels. The following principles govern the design of our long-term incentives:
RETIREMENT AND HEALTH PLANS Retirement plans and other customary employee benefits serve as the fourth component of our executive compensation program. We adopted our 2005 Amended and Restated Executive Nonqualified Excess Plan, which we refer to as the Deferred Compensation Plan, We also offer healthcare insurance and other employee benefit programs to our named executive officers, which are generally the same as those programs provided to all eligible employees. We offer these plans to support our objective of attracting and retaining strong talent. PERQUISITES
In addition, in 2019, the Company continued to pay Mr. Henderson a monthly housing allowance in connection with his 2018 relocation to our EMPLOYMENT AND SEVERANCE AGREEMENTS Severance arrangements serve as the fifth component of our executive compensation program. We are party to an employment agreement with our CEO, which contains severance provisions, and have entered into severance agreements with each
Our
Our named executive officers’ BASE SALARY In late to salaries of our named executive officers for When benchmarking Ms. Salka’s
BONUS PLAN Target Bonus. In January The table below shows
We believe that Ms. Salka’s Structure of Our Bonus Plan. For
In
Rationale for Annual Bonus Performance Goals. The actual consolidated revenue and consolidated adjusted EBITDA targets that the Compensation Committee originally established as the basis for paying the Financial Component of the consolidated financial metrics required achievement of 90% of our
We have included a table below ($ in thousands) that summarizes how we performed against the target financial performance metrics that we utilized (i.e., the Company’s annual operating plan plus the estimated revenue and earnings before interest, taxes, depreciation and amortization contributions of the acquisitions) when determining the Financial Component portion of our named executive officers’ bonuses for 2019.
With respect to the (3) We usePre-Bonus adjusted EBITDA solely to determine bonuses.Pre-Bonus adjusted EBITDA excludes from Adjusted EBITDA the payment of bonuses and other extraordinary items not contemplated in our
Additionally, we (i) successfully
The tables below set forth metrics and summary calculations for each named executive officer’s bonus amounts under the
LONG-TERM INCENTIVE COMPENSATION In
Commencing in October 2019 and December 2019, Ms. Salka and Ms. Jackson will, respectfully, satisfy the requirements for retirement eligibility under their 2019 equity awards.
TSR PRSUs TSR PRSUs
refer to the determination of our Relative TSR and Absolute TSR
In Time-Vested RSUs
date. As it has done historically, the Compensation Committee elected to wait to consider a grant of RSUs for Ms. Salka for Aggregate Grant Date Fair Value PRSUs represented The
(4) As set forth in the Grant of Plan-Based Awards Table, the target number of TSR PRSUs granted in (5) As set forth in the Grant of Plan-Based Awards Table, the target number of adjusted EBITDA PRSUs granted in
RESULTS OF OUR
On January
On February
Equity Ownership Requirements, Clawback and No Pledging Policies
We maintain meaningful equity ownership requirements as well as clawback and pledging policies to which our named executive officers are subject. We have set forth a summary of these requirements and policies below. Additional details related to these requirements and policies are contained in the Governance Guidelines. EQUITY OWNERSHIP REQUIREMENTS The Board believes that all named executive officers should maintain a meaningful personal financial stake in the Company to align their long-term interests with those of our shareholders. Accordingly,
The value of unvested RSUs and vested or unvested SARs and options are not taken into account in determining whether a named executive officer satisfies our equity ownership requirements. Individuals subject to the equity ownership requirements above who have not met the applicable ownership requirements are required to retain 50% of net vested shares from equity awards issued subsequent to the initial assessment of ownership until they have reached the applicable ownership requirement. As of the close of business on February CLAWBACK POLICY Under the Governance Guidelines, if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirements under the securities laws caused by misconduct, we can seek recoupment from all of our current or former executive officers who participated in the misconduct of:
NO PLEDGING POLICY The Governance Guidelines prohibit named executive officers (and directors) from pledging, hypothecating or otherwise placing a lien on any shares of our common stock (or any other equity interests) that they own. Tax Deductibility of Executive Compensation
Prior to December 22, 2017, when the Tax Cuts and Jobs Act of 2017, Under the TCJA, the performance-based exception has been repealed and the $1 million deduction limit now applies to anyone serving as the chief executive officer or the chief financial officer at any time during the taxable year and the top three other highest compensated executive officers serving at fiscal Overview of Our
Overall, the Compensation Committee believes the Company performed well during The Compensation Committee approved
The base salaries of our named executive officers reflect a 0% to 3%
BONUS PLAN Target Bonus. In January
Structure. After careful consideration of the factors set forth above in the subsection of this CD&A entitled “Components of Our Compensation Program — Annual Cash Incentive Performance Bonus,” the Compensation Committee decided to use the same bonus structure for each named executive officer as it did in LONG-TERM EQUITY INCENTIVES
In 2020, the Compensation Committee continued to utilize a combination of (1) TSR PRSUs, (2) time-vested RSUs and (3) adjusted EBITDA growth PRSUs,
EXECUTIVE COMPENSATION DISCLOSURE Our named executive officers for the
OurNon-Director Executive Officers
September 2007. In February 2009, we appointed him President, Nurse and Allied Staffing and in February 2012, named him President, Healthcare Staffing. In January 2016, we appointed Mr. Henderson President, Professional Services and Staffing. He is responsible for leading the sales and financial performance of our nurse and allied solutions segment and our locum tenens solutions segment. Prior to September 2007, Mr. Henderson served as Senior Vice President, Group Executive for Spherion, Inc., one of the largest commercial and professional staffing companies in the United States. Mr. Henderson started with Spherion in 1995 and held several leadership positions, including Regional Vice President and General Manager, Vice President of National Accounts, and Senior Vice President, Western Division. Prior to Spherion, Mr. Henderson was employed by American Express for nine years where in his last role he served as Vice President of Sales and Account Management in the Travel Management Services Division.
Ms. Jackson is responsible for our legal, corporate governance, compliance, ethics, risk management, real estate and
Financial Officer, Chief Accounting Officer, and Treasurer in January 2011. Prior to that time, Mr. Scott served in a variety of financial and operational roles for us including most recently as Senior Vice President of Operations, Finance and Business Development, in which capacity he oversaw our corporate financial planning and analysis, capital funding and business development activities. He has also served as President of our pharmacy staffing division and as Director, Senior Director and Vice President of Finance, where his roles have included overseeing all accounting operations and SEC reporting. Mr. Scott started his career in San Francisco with KPMG and later became a partner in amid-sized CPA firm. He also served as controller of a biotechnology company. Mr. Scott
The following table shows the compensation earned or accrued by our named executive officers for the three fiscal years ended December 31, 2019, 2018
Grants of
The following table contains information concerning grants of plan-based awards to our named executive officers under our cash and equity plans during the year ended December 31,
Outstanding Equity
The following table represents equity interests held by the named executive officers as of December 31,
Option Exercises
The following table shows information regarding exercises of option awards to purchase our Common Stock and vesting of stock awards held by our named executive officers during
Nonqualified Deferred Compensation
We adopted and maintain our Deferred Compensation Plan, which provides our executives, including our named executive officers, with the opportunity to defer up to 80% of their base salary and up to 90% of their bonus. The Deferred Compensation Plan also permits executives to defer the settlement date of their RSUs or PRSUs. Our named executive officers are excluded from participating in our 401(k) plan. In Starting on October 1, 2019, the measurement funds are: BNY Mellon Bond Market Index, PGIM Total Return Bond Z, Invesco Diversified Dividend R5, Principal LargeCap Growth I R5, MFS Mid Cap Value R4, MassMutual Select Mid Cap Growth R5, Victory Sycamore Small Company Opp I, Hartford Small Cap Growth Y and Principal International Equity Index. Executives may change their election of measurement funds on a daily basis. Additionally, beginning in 2014, the Deferred Compensation Plan permitted executives to invest in a Deferred Compensation Fixed Rate Fund, which provides an annual fixed rate of return that is generally set by the Company on January 1 of each year at 120% of the long-term Applicable Federal Rate. For Benefits under the Deferred Compensation Plan are payable in a lump sum or in annual installments for a period of up to ten years beginning six months after the named executive officer’s separation from service. Executives may also select at the time of deferral to be paid upon a change in control or a fixed distribution date, which must be at least two years after the date of deferral. Benefits under the Deferred Compensation Plan are also payable if the executive experiences an unforeseen financial emergency. Deferrals of RSUs or PRSUs are settled in shares upon a fixed date selected by the executive or upon a separation from service or change in control. The following table reflects contributions made by the named executive officers and matching contributions made by us under the Deferred Compensation Plan in fiscal year
NONQUALIFIED DEFERRED COMPENSATION TABLE
Termination of Employment and Change in Control Arrangements
MS. We are party to an employment agreement with Ms. Salka dated May 4, 2005, as amended February 6, 2008. The employment agreement provides that Ms. Salka will serve as our President and CEO. For her services in that capacity, Ms. Salka (1) receives a base salary that we may increase annually at our discretion, (2) is eligible to receive an annual bonus subject to meeting certain performance-based criteria, and (3) is eligible to participate in our equity plans, employee benefit plans and other benefits programs provided in the same manner and to the same extent as our other senior management. The term of Ms. The employment agreement provides that Ms. Salka will receive severance benefits under the following three circumstances:
Additionally, under each of the above scenarios, Ms. Salka and her eligible dependents are entitled to continue to participate for two years in our medical, life, dental and disability insurance plans to the extent such plans permit continued participation (with Ms. Salka continuing to pay premiums in respect of such coverage that she was paying prior to termination). Under some circumstances, amounts payable under Ms. Salka’s employment agreement are subject to a full employment agreement has not been amended in recent years; however, in 2009, we committed to cease entering into employment agreements with taxgross-ups. Payment of all or a portion of the amounts set forth above may be delayed six months following her termination, if necessary to comply with the requirements of Section 409A of the Code. The employment agreement requires Ms. Salka to release any claims against us. The employment agreement also contains a confidentiality provision and a provision requiring Ms. Salka not to solicit our employees during its term and for a period of two years thereafter.
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS FOR CHIEF EXECUTIVE OFFICER
The following table sets forth illustrative examples of the payments and benefits Ms. Salka would have received if any of the circumstances described above occurred as of December 31,
EXECUTIVE OFFICER SEVERANCE AGREEMENTS As of December 31, If an involuntary termination occurs, but not within one year of a “change in control” (defined as in Ms. Salka’s employment agreement, see footnote
The following table sets forth illustrative examples of the payments and benefits Mr. Scott, Mr. Henderson and Ms. Jackson would have received if any of the circumstances described above occurred as of December 31, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS OTHER EXECUTIVE OFFICERS
At AMN, we are committed to internal pay equity and equal pay based on role, qualifications, experience and merit, without regard to any legally-protected classifications. We design our compensation programs to be consistent and internally equitable to motivate employees to continue to perform in ways that enhance shareholder value. To this end, our Compensation Committee monitors the relationship between the pay of our executive officers and the pay of ournon-executive employees and takes into consideration the substantial amount of variable compensation that is tied to the Company’s performance. In above. In August 2015, the SEC adopted rules implementing the “CEO pay ratio” disclosure requirements that were mandated by Congress pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). The new rules require registrants to disclose the ratio of the median employee’s annual total compensation to the CEO’s annual total compensation. Our CEO pay ratio is calculated in accordance with the SEC’s final rules regarding the CEO pay ratio disclosure requirements promulgated pursuant to Item 402(u) of RegulationS-K. In 2017, we identified our employee population for the purposes of calculating our CEO pay ratio as of October 27, 2017. On this date, we had approximately 2,879 corporate employees. During the fourth quarter of 2017, we had an average of (1)9,234 nurses, allied and other clinical healthcare professionals, (2) 384 executive and clinical leadership interim staff, and (3) 349 medical coding professionals and case managers contracted to work for us. This does not include our locum tenens, all of whom are independent contractors and not our employees. To identify our median employee, we examined the 2017 total cash and equity compensation for all full-time, part-time, temporary and seasonal employees, excluding our CEO and including the healthcare professionals mentioned above, as foregoing, we did not make any assumptions, adjustments or estimates with respect to our employees’ total cash and equity compensation and used this consistently applied compensation measure to identify our median employee. After identifying the median employee, we calculated his/her annual total compensation using the same SEC rules we use for calculating the annual total compensation of our named executive officers, as set forth in the Summary Compensation Table of the Executive Compensation Disclosure section above. Pursuant to SEC rules,we In
The pay ratio was calculated in accordance with SEC rules based upon our reasonable judgment and assumptions. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies may not be comparable to the Company’s pay ratio as disclosed above.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Section 14A of the Exchange Act, as amended by the Dodd-Frank Act, enables our shareholders to vote to approve, on an advisory(non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. As previously disclosed, the Board has determined that it will hold an advisory vote on executive compensation on an annual basis, and the next shareholder advisory vote will occur at our As described in detail in the Compensation Discussion and Analysis section above, we design our executive compensation programs to, among other things, attract, motivate, and retain our named executive officers, who are critical to our success. Under these programs, we reward our named executive officers for the We have two shareholder approved performance incentive plans; cash and equity. We use these performance incentive plans amount operational results and our Common Stock price We ask that you support the compensation of our named executive officers as disclosed in our Compensation Discussion and Analysis and the accompanying tables contained in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the Because your vote is advisory, it will not bind us, the Compensation Committee, or our Board. However, our Board and our Compensation Committee value the opinions of our shareholders and will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs and policies.
Management is responsible for the Company’s financial reporting process, including establishing and maintaining disclosure controls and procedures, establishing and maintaining internal control over financial reporting, evaluating the effectiveness of disclosure controls and procedures, evaluating and expressing an opinion on the effectiveness of internal control and the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. KPMG LLP (“KPMG”) is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of internal control over financial reporting. The Audit Committee’s responsibility is to monitor, evaluate and oversee these processes. The Audit Committee members are not employees of the Company, and are not professional accountants or auditors. The Audit Committee’s primary purpose is to assist the Board to fulfill its oversight responsibilities by reviewing the financial information provided to shareholders and others, the systems of internal controls that management has established to preserve the Company’s assets and the audit process. It is not the Audit Committee’s duty or responsibility to conduct auditing or accounting reviews or procedures or to determine that the Company’s financial statements are complete and accurate and in accordance with accounting principles generally accepted in the United States of America. The Audit Committee has reviewed and discussed the audited financial statements with management. In giving the Audit Committee’s recommendation to the Board, it has relied on management’s representations that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the representations of the independent registered public accounting firm, KPMG, included in its report on the Company’s consolidated financial statements. The Audit Committee is responsible for the appointment, subject to shareholder ratification, of the Company’s independent registered public accounting firm. The members of the Audit Committee are independent as defined by Section 303A of the NYSE Listed Company Manual. In this context, the Audit Committee has reviewed and discussed with management, The Audit Committee discussed with KPMG the overall scope and plans for its audits. The Audit Committee has met with KPMG, with and without management present, to discuss the results of its audits, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. Based upon the Audit Committee’s discussions with management and KPMG, the Audit Committee’s review of the representations of management and the report of KPMG to the Audit Committee, the Audit Committee recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form10-K for the year ended December 31,
RATIFICATION OF THE SELECTION OF OUR INDEPENDENT PUBLIC ACCOUNTING FIRM
The Audit Committee appointed KPMG LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019. The Board proposes and recommends that the shareholders ratify this appointment. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG served as our principal independent registered public accounting firm for Audit Fees KPMG billed $2,307,320 and $2,204,925 Audit-Related Fees KPMG billed $45,474 and $48,968 KPMG billed (1) All Other Fees We did not incur any other fees billed by KPMG in Pursuant to the Audit Committee Charter, it is the policy of the Audit Committee to review in advance, and grant any appropriatepre-approvals of all auditing services to be provided by the independent registered public accounting firm and allnon-audit services to be provided by the independent registered public accounting firm as permitted by Section 10A of the Exchange Act, and in connection therewith, to approve all fees and other terms of engagement. In 2017 and 2018, the Audit Committee approved all fees billed by KPMG prior to the engagement.
REDUCE THE THRESHOLD NECESSARY TO CALL A SPECIAL MEETING OF SHAREHOLDERS After careful consideration, the Board recommends that shareholders voteFOR the amendment to the Company’s Bylaws to enable shareholders who continuously own at least 15% of the Company’s outstanding common stock for at least one year to call special meetings. The Company is asking shareholders to approve an amendment (the “Special Meeting Bylaws Amendment”) to the Company’s Bylaws to permit shareholders of record who continuously for at least one year own, in the aggregate, at least 15% of the Company’s outstanding common stock to call a special meeting of shareholders. The Special Meeting Bylaws Amendment would (i) lower the ownership threshold to permit shareholders who own at least 15% of our outstanding common stock to call a special meeting of shareholders, and (ii) add a requirement that eligible shareholders continuously own their common stock for one year in order to satisfy the 15% threshold. The Board believes that special meetings of shareholders should be extraordinary events that are held only when strategic concerns or other similar considerations require that the matters to be addressed not be delayed until the next annual meeting. Moreover, because special meetings are expensive and time-consuming for the Company and potentially disruptive to its normal business operations, the Board believes that a small percentage of shareholders should not be entitled to utilize the right to call a special meeting for their own interests, which may not be shared by the majority of the Company’s shareholders. The Board will continue to have the ability to call special meetings of the shareholders in other instances when they determine it is appropriate. In light of these considerations and based on the fact that approximately 83% and 76% of all of the S&P and Russell 3000 companies, respectively, that offer a special meeting right to shareholders have a threshold that is equal to or greater than 15%, the Board believes that establishing an ownership threshold of at least 15% for shareholders to call a special meeting reflects best practices and achieves a reasonable balance between enhancing shareholder rights and adequately protecting the long-term interests of the Company and its shareholders. The Board believes that an ownership threshold of at least 15% is appropriate based on the Company’s current size and shareholder composition, as it would provide the Company’s shareholders with a meaningful right to request a special meeting, while mitigating the risk that corporate resources are wasted to serve the narrow self-interests of a few minority shareholders. The Board also believes that adding a one year holding requirement for eligible shareholders to satisfy the 15% special meeting threshold ensures that shareholders seeking to call a special meeting are doing so with the long-term interests of the Company and its shareholders in mind. The Board has determined that the Special Meeting Bylaws Amendment is advisable and in the best interests of the Company and its shareholders and has directed that it be submitted to the Company’s shareholders for approval. The text of the Special Meeting Bylaws Amendment proposed by this Proposal is attached to this proxy statement as Annex A. If this Proposal 4 is approved by a majority of the shares entitled to vote and present or represented by proxy at the Annual Meeting and Proposal 5 is not, the Special Meeting Bylaws Amendment would become immediately effective. If, however, Proposals 4 and 5 are both approved by a majority of the shares entitled to vote and present or represented by proxy at the Annual Meeting, the Board intends to solicit feedback from our shareholders and then act in manner that it deems to be in the best interests of the Company and its shareholders to reasonably implement each proposal.
SHAREHOLDER PROPOSAL
The Company has been advised that Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, who has indicated he is a beneficial owner of at least $2,000 in market value of
“Proposal 5 – Make Shareholder Right to Call Special Meeting More Accessible
Adoption of this proposal topic could include a provision that the current 20% stock ownership threshold would still apply if a single shareholder calling for a special meeting owned 10% or more of AMN Healthcare stock. A Thus the 20% stock ownership threshold to call a special meeting can be a 40% stock ownership threshold to call a special meeting for practical purposes after our company attorneys do the screening out process. This proposal
Making the right to call a special meeting more accessible to shareholders is showing increased support. For instance this proposal topic won support at O’Reilly Automotive, Inc. (ORLY) in 2019. Please vote
The Board has carefully considered the In addition and in an effort to continually consider and implement corporate governance best practices, we engaged with the proponent of this Proposal and proposed terms that we believe constitute best practices, eliminates confusion associated with this Proposal’s multiple circumstantial thresholds, and promotes the long term interest of our shareholders. After coming to what we believed to be an agreement with the proponent, our Board acted in good faith to amend the Company’s bylaws as agreed and in full expectation that this Proposal would be withdrawn. However, after filing the Form on8-K disclosing the amendment, the proponent elected not to withdraw, as we believe we had agreed.
We also note that a similar proposal submitted by this same proponent to decrease the For these and the
Reducing the threshold from 20% to 10% (or another unspecified “lowest percentage under state law”) applies different thresholds for different shareholders resulting in classification of shareholders, is confusing and creates uncertainty, and would allow a small minority (i.e., 10%) to create a financial and administrative burden on all of our shareholders and the Company, even with the
call a special meeting while a 10.1% shareholder would need to solicit vote of an additional 9.9%. We also believe that this proposal is confusing and provides different thresholds for different shareholders, which Our Board believes that the current 20% threshold Given the Company’s demonstrated commitment to effective corporate governance, there are a
The Board believes that the
Annual director elections Action by
No supermajority voting requirement No poison pill No classified common stock For all the above reasons,
SECURITY OWNERSHIP AND OTHER MATTERS Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of February Beneficial ownership includes shares for which a person, directly or indirectly, has or shares voting or investment power, or both, and also includes shares that each such person or group had the right to acquire within 60 days following the Record Date, including upon the exercise of options or warrants. Where applicable, we calculate the percentage of Common Stock beneficially owned by including the number of shares of Common Stock deemed to be beneficially owned by reason of the right to acquire such shares within 60 days following the Record Date in both the numerator and the denominator.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act generally requires our directors, executive officers and persons who own more than 10% of our Common Stock to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Directors, executive officers and shareholders who own greater than 10% of our Common Stock are required by SEC rules to furnish us with copies of Section 16(a) forms they file. We believe that all of our directors, named executive officers and greater than 10% beneficial owners complied with all filing requirements applicable to them in Shareholder Proposals for the
From time to time, shareholders present proposals, which may be proper subject for inclusion in the proxy statement and for consideration at the next annual meeting of shareholders. Any shareholder who desires to bring a proposal at our The shareholder proposals must comply with the requirements of Rule14a-8 promulgated by the SEC under the Exchange Act. If a shareholder proposal is not properly submitted for inclusion in the
Shareholders will receive with this proxy statement a copy of our Annual Report including the financial statements set forth in our annual report onForm 10-K, as filed with the SEC for the fiscal year ended December 31, Shareholders may request additional copies by sending a written request to AMN Healthcare Services, Inc., 12400 High Bluff Drive, Suite 100, San Diego, California 92130, Attn: Denise L. Jackson, Chief Legal Officer and Corporate Secretary.
Delivery of Proxy Statement, Annual Report or Notice of Internet Availability
We may satisfy SEC rules regarding delivery of our proxy materials, including our proxy statement, or delivery of the Notice of Internet Availability of Proxy Materials (the “Notice”) by delivering a single copy of these documents to an address shared by two or more shareholders. This process is known as “householding.” To the extent we have done so, we have delivered only one set of proxy materials or one Notice, as applicable, to shareholders who share an address with another shareholder, unless contrary instructions were received prior to the mailing date. We undertake to deliver promptly upon written or oral request a separate copy of our proxy statement, our annual report and/or our Notice, as requested, to a shareholder at a shared address to which a single copy of these documents was delivered. To make such a request, please contact our Secretary at the address set forth in the section immediately above entitled “Annual Report” or by calling our offices at866-871-8519. If your Common Stock is held by a brokerage firm or bank and you prefer to receive separate copies of our proxy statement, our annual report or the Notice, either now or in the future, please contact your brokerage or bank. If your brokerage or bank is unable or unwilling to assist you, please contact us as indicated above. Shareholders sharing an address who are receiving multiple copies of proxy materials and who want to receive a single copy of our annual reports, proxy statements and/or our Notices may do so by contacting our Secretary at the address set forth in the section immediately above entitled “Annual Report” or by calling our offices at866-871-8519.
The Board does not know of any other matter that will come before the Annual Meeting other than those described in this proxy statement. If any other matters properly come up before the Annual Meeting, the persons named in the form of proxy intend to vote all proxies in accordance with their judgment on such matters.
When and where is the Annual Meeting?
Our at 8:30 a.m. Central Time, or at any subsequent time that may be necessary by any adjournment or postponement of the Annual Meeting.
What is “Notice and Access” and why does AMN use it?
We are making the proxy solicitation materials available to our shareholders electronically via the Internet under the Notice and Access rules and regulations of the SEC. On or about March Instructions on how to access the proxy materials on the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Electronic delivery decreases costs, expedites distribution, and reduces our environmental impact. Environmental stewardship is a component of our Corporate Social Responsibility Program, and we encourage shareholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of the Annual Meeting. Shareholders who received the Notice but would like to receive a printed copy of the proxy materials in the mail should follow the instructions in the Notice for requesting such materials.
Why am I receiving these proxy materials?
We are providing these proxy materials in connection with the solicitation of proxies on behalf of our Board for use at the Annual Meeting. This proxy statement includes information that we are required to provide under SEC rules and is designed to assist you in voting your shares. Proxies in proper form received by us at or before the time of the Annual Meeting will be voted as specified. You may specify your choices by marking the appropriate boxes on your proxy card. If a proxy card is dated, signed and returned without specifying choices, the proxies will be voted in accordance with the recommendations of the Board set forth in this proxy statement, and, in their discretion, upon such other business as may properly come before the Annual Meeting. Business transacted at the Annual Meeting will be confined to the purposes stated in the Notice of Annual Meeting. Shares of our Common Stock, cannot be voted at the Annual Meeting unless the holder is present in person or represented by proxy.
How can I get electronic access to the proxy materials?
The Notice will provide you with instructions on how to (1) view our proxy materials for the Annual Meeting on the Internet, and (2) instruct us to send proxy materials to you by email. The proxy materials are also available under the our website at www.amnhealthcare.com. Choosing to access our proxy materials electronically will save us the cost of printing and mailing documents to you, and will reduce the impact of our annual meetings on the environment.
What is included in the proxy materials?
Our 2019 Annual Report including the financial statements set forth in our annual report onForm 10-K. If you receive a paper copy of these materials by mail, the proxy materials will also include a proxy card.
Who pays the cost of soliciting proxies for the Annual Meeting?
Proxies will be solicited on behalf of the Board by mail, telephone, email or other electronic means or in person, and we will pay the solicitation costs. We have retained
Who is entitled to vote at the Annual Meeting?
In accordance with our Bylaws,
What matters will be addressed at the Annual Meeting?
At the Annual Meeting, shareholders will be asked: To elect the eight directors nominated by the Board and named in this proxy statement, To approve, bynon-binding advisory vote, the compensation of our named executive officers, To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020,
To transact such other business, including consideration of a shareholder proposal, if properly presented, as may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
What is the vote required for each proposal and what are my choices?
With respect to Proposal 1, the election of directors, you may vote FOR, AGAINST or ABSTAIN. Our Bylaws require that in an election where the number of director nominees does not exceed the number of directors to be elected, each director will be elected by the vote of the majority of the votes cast (in person or by proxy). A “majority of votes cast” means that the number of shares cast “FOR” a director’s election exceeds the number of votes cast “AGAINST” that director’s election. In accordance with our Bylaws, the following do not count as votes cast: (a) a share whose ballot is marked as withheld, (b) a share otherwise present at the meeting, but for which an ABSTAIN vote was cast, and (c) a share otherwise present at the meeting as to which a shareholder gives no authority or direction. In an uncontested election, a nominee who does not receive a majority of the votes cast will not be elected. An incumbent director who is not elected because he or she does not receive a majority of the votes cast will continue to serve as a holdover director, but will tender his or her resignation to the Board. Within 90 days after the date of the certification of the election results, the Governance and Compliance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken, and the Board will act on the Governance and Compliance Committee’s recommendation and publicly disclose its decision and rationale. With respect to Proposals 2, 3, 4 and
How does the Board recommend that I vote?
The Board recommends that you vote:
If you are a beneficial owner and your shares are held through a broker, you should follow the instructions in the Notice provided by your broker, or your broker should provide instructions for voting your shares. In these cases, you may vote by Internet, telephone or mail, as applicable. You may vote your shares beneficially held through your broker in person if you attend the Annual Meeting and you obtain a valid proxy card from your broker giving you the legal right to vote the shares at the Annual Meeting.
What is the difference between shareholder of record and beneficial owner?
Shareholder of Record. You are a shareholder of record if at the close of business on the Record Date your shares were registered directly in your name with American Stock Transfer & Trust Company, LLC, our transfer agent. Beneficial Owner. You are a beneficial owner if at the close of business on the Record Date your shares were held by a brokerage firm or other nominee and not in your name. Being a beneficial owner means that, like most of our shareholders, your shares are held in
What will happen if I do not vote my shares?
Shareholders of Record.If you are the shareholder of record and you do not vote by proxy card, telephone, Internet or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting. Beneficial Owners.If you are the beneficial owner and you do not direct your broker or nominee on how to vote your shares, your broker or nominee may vote your shares only on those proposals for which it
What is the effect of a brokernon-vote?
Brokers or other nominees who hold shares for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A brokernon-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Brokernon-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but will not be counted for purposes of determining the number of votes present in person or represented by proxy and entitled to vote with respect to certain proposals. Accordingly, a brokernon-vote will not impact our ability to obtain a quorum nor will it impact any vote that requires a majority of the votes cast (Proposal 1) or any proposal that requires the majority of the shares entitled to vote and present or represented by proxy (Proposals 2, 3, 4 and
May I revoke my proxy or change my vote?
Yes, you may revoke a proxy you have given at any time before it is voted at the Annual Meeting by (1) sending our Corporate Secretary a letter revoking the proxy, which must be received prior to the Annual Meeting, or (2) attending the Annual Meeting and voting in person. Attendance at the Annual Meeting does not, standing alone, constitute your revocation of a proxy. You may change your vote at any time prior to the voting of your shares at the Annual Meeting by (a) casting a new vote by telephone or over the Internet by 11:59 p.m. Eastern Time on the date before the day of the Annual Meeting, or (b) sending a new proxy card with a later date that is received prior to the Annual Meeting.
How can I find the results of the Annual Meeting?
We will announce preliminary results at the Annual Meeting. We will publish final results in a current report on Form8-K that we will file with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form8-K and will provide the final results in an amendment to the Form8-K as soon as they become available.
Information Required to Have a Nominee of a Shareholder Considered by the Corporate Governance and Compliance Committee for Election at the
To have a nominee considered by the Corporate Governance and Compliance Committee for election at the The name and address of the candidate; and
A brief biographical description of the candidate, including the candidate’s occupation for at least the last five years, and a statement of the qualifications of the candidate taking into account the qualifications requirements set forth in our Governance Guidelines as well as:
We may require any shareholder nominee to furnish such other information as we may reasonably require to determine the eligibility of the shareholder nominee to serve as one of our directors.
Non-GAAP Reconciliation for Consolidated
Amendment to the Company’s Bylaws to Effectuate Proposal 4 Below is reflection of the changes to Section 2.3 (Special Meetings) of the Company’s Bylaws that will be adopted if Proposal 4 of this Proxy Statement is approved by a majority of the shares entitled to vote and present or represented by proxy at the Annual Meeting. 2.3 Special Meetings. (a)General. Unless otherwise prescribed by applicable law, special meetings of Stockholders may be called at any time by only (i) the Board, (ii) the Chairman or the Presiding Director (if one has been designated) or (iii) the holders of record whofor at least one year continuously“own” (as defined in Section 2.12(f)) in the aggregate not less thanfifteen
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
AMN HEALTHCARE SERVICES, INC.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and AnnualReport/10-K are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — E92737-P33303
|