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

AMN HEALTHCARE SERVICES, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Dear Fellow Shareholders,

On behalf of AMN Healthcare Services and its Board of Directors, we are pleased to invite you to attend our Annual Meeting of Shareholders on April 22, 2020 at our offices in Dallas, Texas. Throughout the past year, we have further advanced our position as the leader and trusted partner for total talent solutions to healthcare organizations. We made significant progress in our mission to deliver the best talent and insights to help healthcare organizations optimize their workforce, give healthcare professionals opportunities to do their best work towards quality patient care and create a values-based culture of innovation where our team members can achieve their goals.

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 enhance diversity, equality, and inclusion in our workplace, workforce, and marketplace.

Diversity, Equality & Inclusion

Diversity, equality, and inclusion 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 was recognized by the Bloomberg Gender Equality Index and the Human Rights Campaign’s Corporate Equality Index.

Sustainable Long-Term Growth

Our strategy and our actions every day are grounded in the belief that we can achieve our mission by unlocking the strength of the diverse backgrounds, experiences, and perspectives of all our stakeholders. We believe this philosophy and approach will help us prepare for anticipated risks, create a platform for long-term growth and demonstrates the effective leadership and governance principles that sustainable-minded investors seek.

Thank you for your continued support and investment in AMN Healthcare, and we hope to see you at our 2020 Annual Meeting.

Sincerely,

TABLE OF CONTENTS

Notice of Annual Meeting of Shareholders

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 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:

The Board of Directors has fixed the close of business on February 24, 2020 as the record date for determining the shareholders of the Company entitled to notice of and to vote at the Annual Meeting and 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 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 2019 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 2019 Annual Report.

March [    ], 2020

By Order of the Board of Directors,

Denise L. Jackson

Chief Legal Officer and Corporate Secretary

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 11, 2020.

Our Financial Performance

Our Total Return⁽²⁾ vs. Russell 2000 and S&P 500

Director Nominees

This year’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. Teri G. Fontenot, who was appointed to the Board in September 2019. The addition of Ms. Fontenot, who is a former chief financial officer of 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 characteristics 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.

Our Key Executive Compensation Practices

Our Key Corporate Governance Policies

Recent Recognition

How to Vote your Shares

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 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

PROPOSAL 1

ELECTION OF OUR DIRECTORS

The Board is elected by the shareholders to oversee their interest in the overall success of the Company’s strategy, business operations and financial strength. The Board serves as the Company’s ultimate decision-making body to the extent set forth in our Certificate of Incorporation and Amended and Restated By-laws (the “Bylaws”). It also selects and oversees our senior executives, who, in turn, oversee our day-to-day business and related affairs.

Board Composition Evaluation and Director Nomination Processes

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 evaluate the Board’s collective composition relative to the Company’s strategic objectives and potential director candidates.

To kick off the process, the Corporate Governance and Compliance Committee mapped the collective composition of the then-current Board to 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 consultants, many of whom are industry experts that match certain key skills, experiences and characteristics the Committee 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.

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 review, approval and appointment.

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 extensive experience in strategic, entrepreneurial and global use technologies in the healthcare sector. Ms. Jones’ contributions to the Board have been evident through its strategic oversight of the execution 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 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 2021 Annual Meeting of Shareholders can be found in Exhibit A to this proxy statement. Our Board is committed to continue to seek out highly qualified candidates with diverse backgrounds, skills and experience to further strengthen our Board‘s collective composition and strategically support the Company’s strategic objectives. A collective summary of our Board’s current composition, skills and experiences is set forth below.

Our Nominees for the Board of Directors

Our Directors’ Skills Matrix

CORPORATE GOVERNANCE

Overview of Our Corporate Governance Program

Our Board and executive leaders believe that strong and effective corporate governance is essential to our success. A cornerstone of our corporate governance program is providing transparent disclosure to our stakeholders on an ongoing and consistent basis. Our approach integrates all components of effective governance, including a strong ethical culture, a comprehensive enterprise risk management program, a formal shareholder engagement program, sound financial, regulatory and legal compliance functions and corporate social responsibility. Our holistic strategy focuses on delivering long-term shareholder value and has been recognized for the highest standards of governance. AMN aligns with the Investor Stewardship Group’s (“ISG”) Corporate Governance Framework for U.S. Listed Companies. Below is an illustration how certain of our governance practices directly support each of the ISG principles.

Our Annual Shareholder Outreach Summary

We understand that we must earn and maintain our shareholders’ continued support by adhering to the highest standards of corporate governance and social responsibility. To this end, five years ago, we initiated a formal shareholder corporate governance outreach program to supplement our financial-related outreach and gain further insight into the views of our shareholders. Our engagement efforts have evolved into a robust program where we take a customized approach to each shareholder. We believe this facilitates more meaningful and ongoing dialogue on relevant topics that allow us to build stronger shareholder relationships and a more successful company.

With a formal outreach strategy and clear objectives in place, we sent letters to our top shareholders in 2019 representing approximately 64% of our outstanding Common Stock. We look forward to the opportunity to connect with our shareholders and find these engagements to be enlightening and productive. Each shareholder we met with expressed appreciation for our proactive interest in their views, and we certainly appreciated their time and insight. Collectively, our discussions focused on the following topics:

Although each shareholder’s particular focus can differ, AMN’s mission, long-term strategy, pay for performance approach to executive compensation and emphasis on corporate governance and social responsibility were well received. One of the focuses of our engagement with a large shareholder is tackling gender pay equality in the U.S. healthcare system, and we look forward to continuing our engagement on this important issue. Further information surrounding our shareholder engagement program is formalized in our Corporate Governance Guidelines, which we refer to as our Governance Guidelines, and post on our Company website at www.amnhealthcare.investorroom.com/governance-guidelines.

The following chart summarizes some of the specific actions our Board has taken in recent years in response to feedback received from shareholders. In February 2019, our Board committed to maintain an average tenure for independent directors of less than ten years, commencing in 2020. Additionally, in response to shareholder feedback on board refreshment and in an effort to continue to diversify our Board’s collective composition to most effectively support the Company’s long-term strategic objectives, our Governance and Compliance Committee reviewed its Board composition evaluation and director candidate nomination process, which has resulted in the appointments of Ms. Daphne Jones and Ms. Teri Fontenot to the Board in 2018 and 2019, respectfully. The Board’s composition evaluation and director nomination processes are described in the “Board Composition Evaluation and Director Nomination Processes” section located on page 6 above.

Our Human Capital Management Strategy

An essential element of our approach to effective corporate governance and social responsibility is our Human Capital Management Strategy. Our team members are critical assets that we must continually invest in and strategically manage to maximize their long-term value and potential. With this objective in mind, we identify and monitor a variety of risks and opportunities that are central to our long-term strategic objectives, such as, among others, our diversity, equality and inclusion program, team member engagement and professional development, and employee health and safety to ensure we are delivering on our commitment to promote a values-based culture that is centered around business ethics and professional integrity. Our Board and executive management team is committed to fostering a strong ethical corporate culture and expect all team members to fulfill their responsibilities in accordance with the highest standards of professional and personal conduct.

Some refreshment actions that we have taken to uphold this commitment to further develop our Human Capital Management Strategy are listed below.

As discussed above, our Board and its committees regularly and carefully review these and other key governance documents to ensure they contain what we believe to be best practices the best practices and policies in support of our objectives and the values based culture we strive to promote. We publish these documents, among others, under the “Corporate Governance” section of the “Investors Relations” page on the Company’s website at www.amnhealthcare.com. We also make these materials available in print to any shareholder upon request. Our Board closely monitors corporate governance developments and modifies the Governance Guidelines, Executive Compensation Philosophy, the Code of Conduct and our Code of Ethics for Senior Financial Officers regularly.

Our Corporate Social Responsibility Program

Corporate social responsibility (“CSR”) represents our commitment to economic and social progress by creating a positive impact on the health and development of our team members, healthcare providers, local and global communities, and stakeholders at large while advancing the quality of our company through engagement in the world around us. CSR is fundamental to AMN’s aspiration to be the most trusted and utilized total talent solution partner for healthcare organizations in the country. Accordingly, we recognize that certain environmental, social and governance (“ESG”) issues can have real financial impacts over the long-term. This is why we are proactively working to better understand, manage and report more robustly and transparently on the ESG risks and opportunities that are relevant to our business and the industries we serve.

For sustainability disclosure purposes, we have primarily leveraged the standards issued by the Global Reporting Initiative (“GRI”) because it provides a comprehensive framework that allows us to present all facets of our CSR program. We publish updates in our CSR report on an annual basis and took an opportunity last year to expand our reporting under the GRI framework in an effort to increase transparency surrounding our impact on our stakeholders and the world around us. Accordingly, we are excited to release our 2019 CSR report in March 2020. It will be available to view or download on AMN’s new CSR webpage we recently launched on the company’s website at www.amnhealthcare.com/corporate-social-responsibility.Below is an illustration of AMN’s holistic CSR ecosystem, its key components and the stakeholders we serve.

Our dedication to build an industry-leading CSR program is further demonstrated by our high ESG ratings and our commitment to the United Nations Sustainable Development Goals (“SDGs”). In 2019, we achieved an “AA” ESG rating from MSCI ESG Research, which places us in the top 12% of companies within the health care provider and services industry. Under ISS’ ESG QualityScore, our Governance rating is “1” on a 1-10 scale, with 1 being the highest score, a rating of “2” for the Social category and a “3” rating for Environment. We are supportive of the objectives of the SDGs and actively engage with shareholders on those relevant to our business and industry, such as (1) good health and well-being, (2) gender equality, and (3) decent work and economic growth.

To further demonstrate our commitment to continuously improve our disclosures surrounding sustainability, we want to acknowledge that we are listening to our shareholders requests by making progress towards more robust reporting that aligns with the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-related Financial Disclosures. Below we have reflected our industry specific disclosure topics that SASB has identified as most likely to impact the operating performance or financial condition of the typical company in the Professional and Commercial Services Industry as well as the initiatives or recognition we have received for our efforts to manage these opportunities.

Our Board’s Role in Risk Oversight

The Board as a whole is responsible for overseeing our risk exposure as part of determining a business strategy that generates long-term shareholder value. The Board shapes our enterprise-wide risk capacity, appetite and tolerance levels that provide the foundation for our overall business strategy and direction, and believes that overseeing processes for assessing and managing the various risks we face is one of its most important responsibilities to our stakeholders.

Purposeful and appropriate risk-taking in certain areas is important for us to be competitive and to achieve our long-term goals. Our enterprise risk governance framework reflects a collaborative process whereby the Board, executive management and other team members apply a consistent, rigorous approach to our strategic planning and operational decisions across the Company that is designed to balance the opportunities and threats to our business and consider the steps we are willing to take to capitalize on any business opportunities while mitigating against the key risks. The Board believes that oversight of risk management is a vital element of its responsibility. As a result, it meets with executive management at regular Board meetings and, if necessary, at other times to discuss the strategy and success in addressing our identified key risks.

As part of our annual strategic planning process, we maintain an Enterprise Risk Management Committee that assists the Board in identifying key risks. We typically focus on five to seven risks annually, which may relate to, among other things, business operations, competitive landscape, engagement and retention of quality healthcare professionals, talent management, technology systems, security and innovation. The Enterprise Risk Management

Committee also assists the Board in determining our risk tolerance in light of our (1) existing risk capacity, (2) appetite, if any, to take on additional risk or lessen our risk, (3) risk velocity and (4) mitigation factors. The Board’s determination of our key risks and our tolerance for each ultimately influence how we operate our business, including how we marshal our resources and make strategic and operational decisions.

To ensure that the Company operates within its risk appetite, executive management and other leaders establish and support a culture of integrity, ethical behavior and risk awareness for our team members. We also have designed and maintain internal processes and an internal control environment that further facilitates the identification and management of risks.

In addition to the foregoing, each of the Board’s standing committees’ responsibilities are designed to focus attention on risk areas implicated by its area of expertise, and each committee reports regularly to the Board on its identification and assessment of such risks. All committees play significant roles in carrying out the risk oversight function that typically focus in their areas of expertise. Below is an illustration of which committees, or the full Board, are responsible for overseeing the Company’s key risks identified by the Board.

AUDIT COMMITTEE RISK OVERSIGHT

The Audit Committee assists the Board in fulfilling its oversight responsibilities of our compliance with financial ethical requirements and certain other financially-related rules and regulations, as well as our processes to manage our business, financial, technology security and enterprise risk. In performing these functions, the Audit Committee meets periodically with the independent auditor, management, and internal auditors (including in private sessions) to review their work and confirm that they are properly discharging their respective responsibilities.

Among other things, the Audit Committee’s responsibilities include:

In 2019, the Audit Committee did not identify any significant deficiencies or material weaknesses in the Company’s internal controls. In addition, the Audit Committee determined that our processes to manage our enterprise, business and financial risks are effective and comply with applicable legal and ethical requirements as well as our internal policies and procedures.

COMPENSATION COMMITTEE OVERSIGHT

The Compensation Committee is responsible for analyzing the risks associated with our compensation and human capital management practices. Among other things, the Compensation Committee’s responsibilities include:

Risk Related to Executive Compensation

The Compensation Committee designs our incentive compensation to reward officers and other key employees for committing to and delivering on financial goals that we believe are challenging, yet (i) reasonably achievable, (ii) require revenue and profitability performance to reach the target level, and (iii) require significant revenue and profitability growth to reach the maximum level. The financial performance required to reach the maximum level of compensation is developed within the context of budget planning and, while difficult to achieve, is not viewed to be at such an aggressive level that it would induce bonus-eligible employees to take inappropriate risks that could threaten our financial and operating stability.

The Compensation Committee believes the use of a long-term incentive award program with targets that span a three-year performance period balances risk and reward by discouraging excessive risk that could threaten our long-term value, but at the same time encourages innovation to build our value in the short- and long-term. The Compensation Committee also reviews our program for design features that have been identified by experts as having the potential to encourage excessive risk-taking, such as: (A) too much focus on equity, (B) compensation mix overly weighted toward short-term results, (C) highly leveraged payout curves and steep payout cliffs at specific performance levels that could encourage short-term actions to meet payout thresholds, and (D) unreasonable goals or thresholds. After its consideration of the foregoing factors, the Compensation Committee has determined that our compensation programs and policies do not create risks that are reasonably likely to have a material adverse effect on us.

CORPORATE GOVERNANCE AND COMPLIANCE COMMITTEE OVERSIGHT

The Governance and Compliance Committee considers the risks associated with our corporate governance practices, leadership succession process, ethics and compliance programs, including our healthcare, clinical and employment regulatory compliance practices, and quality programs. Among other things, the Governance and Compliance Committee’s responsibilities include:

The Governance and Compliance Committee reviews the Company’s practices and approach with respect to corporate governance and regulatory compliance to ensure that its corporate governance and compliance structures provide a foundation for achieving long-term shareholder value. This responsibility goes hand in hand with its oversight of the Company’s leadership succession process to not expose the Company to leadership gaps and the consequences flowing from such gaps.

The Governance and Compliance Committee also reviews and discusses with our management relevant quality metrics, performance improvement, compliance with certification standards and related laws and regulations as well as our enterprise risk management processes relating to the quality of our services and compliance with regulatory requirements. The Governance and Compliance Committee believes the Company’s sound corporate governance practices, ethics and compliance infrastructure, comprehensive leadership success program and extensive quality programs are designed to shield the Company from risk that is reasonably likely to have a material adverse effect on us.

Director Independence

The Board has adopted categorical standards for director independence, which we set forth in the Governance Guidelines and make available on our website. Under these standards, a director will not be considered independent if:

The Board does not consider the following relationships to be material relationships that would impair a director’s independence:

The Board has determined that director nominees Mark G. Foletta, Teri G. Fontenot, R. Jeffrey Harris, Dr. Michael M.E. Johns, Martha H. Marsh, 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.

Board Leadership Structure

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 our day-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:

Policies and Procedures Governing Conflicts of Interest and Related Party Transactions

The Governance Guidelines, our Code of Conduct and 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 Regulation S-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 the Company or gives the appearance of a conflict. Any potential conflict of interest involving our directors or executive officers must be reported in advance to the Chief Legal Officer, with potential conflicts of interest involving the Chief Legal Officer having to be reported in advance to the CEO. 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 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 interest issue involving any other employee is reviewed by an attorney in our Legal Department. If the attorney 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 party transaction” under Item 404 of Regulation S-K 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 Company’s Related Party Transaction Policy. The Company understands that Ms. Henderson is not directly compensated on the basis of 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 an arm’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 limit 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 definitive 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 continued a commercial relationship with LHC Group that existed before

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 an arm’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’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 be re-nominated annually. In determining whether to recommend a director for re-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 2019, the Board met six times, and took two actions by unanimous written consent. In 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 2019 Annual Meeting of Shareholders.

Committees of the Board

The table below provides current committee memberships and fiscal year 2019 committee meeting information:

Executive Sessions of Non-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.

DIRECTOR COMPENSATION

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 66% of our Independent Directors median total compensation in 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’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.

Director Cash Compensation

Director Equity Compensation

We typically grant full-value equity awards to non-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 independent non-management directors at some level for the foreseeable future. The aggregate grant date fair value, which we refer to as AGD Fair Value, of such equity awards is $140,000, which we believe aligns with the market for independent director compensation.

On April 17, 2019, each independent non-management director received an equity award of 2,907 restricted stock units, which we refer to as RSUs. The RSU awards issued to independent directors vest on the earlier of the one-year anniversary of the grant date or the 2020 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.

Director Compensation Table

The following table reflects compensation that our directors earned during fiscal year 2019. The table does not include Ms. Salka, who received no additional compensation for her service as a director.

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 each non-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, 2019, all of our directors, with the exception of Ms. Jones and Ms. Fontenot, who were appointed to the Board in July 2018 and September 2019, respectfully, satisfy our director equity ownership guidelines.

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.