PRE 14A
Table of Contents

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 Rule 14a-6(e)(2))

   

  

 

Definitive Proxy Statement

   

  

 

Definitive Additional Materials

   

  

 

 

Soliciting Material Pursuant to § 240.14a-12

 

 

LOGO

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 Rules 14a-6(i)(1) and 0-11.

 

   

 

(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 Rule 0-11 (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 Rule 0-11(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:

 

   

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(4) Date Filed:

 


Table of Contents

 

A Letter from our Independent Board Chairman and our CEO

 

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,

 

LOGO

  

LOGO

Douglas D Wheat

Chairman of the Board

  

    Susan R. Salka

    Chief Executive Officer

  

 

“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


Table of Contents

TABLE OF CONTENTS

 

       Page    
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS         

PROXY STATEMENT SUMMARY

     1  

PROPOSAL 1: ELECTION OF OUR DIRECTORS

     6  

CORPORATE GOVERNANCE

     17  

Overview of Our Corporate Governance Program

     17  

Our Annual Shareholder Outreach Summary

     18  

Our Human Capital Management Strategy

     19  

Our Corporate Social Responsibility Program

     20  

Our Board’s Role in Risk Oversight

     22  

Director Independence

     25  

Board Leadership Structure

     26  

Our Board’s Policies and Procedures Governing Conflicts of Interest and Related Party Transactions

     27  

Our Board’s Aggregate Tenure Policy

     28  

Board Meetings and Annual Meeting Attendance by Board Members

     28  

Committees of the Board

     28  

Executive Sessions of Non-Management Directors

     31  

Communications with the Board of Directors

     31  

DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES

     32  

Director Cash Compensation

     32  

Director Equity Compensation

     32  

Director Compensation Table

     33  

Director Equity Ownership Requirement

     33  

COMPENSATION COMMITTEE REPORT

     34  

COMPENSATION DISCUSSION AND ANALYSIS

     35  

Introduction

     35  

Executive Summary

     35  

Response to 2019 Say-on-Pay-Vote

     40  

Our Compensation Program Philosophy and Objectives

     41  

Our Compensation Program Oversight

     42  

Components of Our Compensation Program

     45  

Our 2019 Compensation Program and Results

     48  

Equity Ownership Requirements, Clawback and No Pledging Policies

     53  

Tax Deductibility of Executive Compensation

     54  

Overview of Our 2020 Executive Compensation Program

     54  

EXECUTIVE COMPENSATION DISCLOSURE

     56  

Our Non-Director Executive Officers

     56  

Summary Compensation Table

     57  

Grants of Plan-Based Awards

     59  


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       Page    

Outstanding Equity Awards at Fiscal Year End

     60  

Option Exercises and Stock Vested

     62  

Nonqualified Deferred Compensation

     62  

Termination of Employment and Change in Control Arrangements

     63  

CEO PAY RATIO

     67  

PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

     68  

REPORT OF THE AUDIT COMMITTEE

     70  
PROPOSAL 3: RATIFICATION OF THE SELECTION OF OUR INDEPENDENT PUBLIC ACCOUNTING FIRM      71  
PROPOSAL 4: REDUCE THE THRESHOLD NECESSARY TO CALL A SPECIAL SHAREHOLDERS MEETING      72  

PROPOSAL 5: SHAREHOLDER PROPOSAL

     73  

SECURITY OWNERSHIP AND OTHER MATTERS

     75  

Security Ownership of Certain Beneficial Owners and Management

     75  

Section 16(a) Beneficial Ownership Reporting Compliance

     77  

Shareholder Proposals for the 2021 Annual Meeting of Shareholders

     77  

Annual Report

     77  

Delivery of Proxy Statement, Annual Report or Notice of Internet Availability

     77  

Other Business

     78  

GENERAL INFORMATION

     79  
EXHIBIT A: STOCKHOLDER NOMINEE REQUIREMENTS      A-1  
EXHIBIT B: NON-GAAP RECONCILIATION      B-1  
ANNEX A: Proposed Bylaw Amendment      AX-1  


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LOGO

Notice of Annual Meeting of Shareholders

 

 

 

Meeting Date

 

  

 

Wednesday, April 22, 2020

 

 

Time

 

  

 

8:30 a.m. (Central Time)

 

 

Location

 

  

 

8840 Cypress Waters Blvd., Suite 300

Dallas, Texas 75019

 

 

    Record Date    

 

  

 

Monday, February 24, 2020

 

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:

 

(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, by non-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, 2020,

 

(4)

approve a proposal to reduce the threshold necessary to call a special shareholders meeting; and

 

(5)

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 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,

 

 

LOGO

Denise L. Jackson

Chief Legal Officer and Corporate Secretary

 

 

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.

 

 


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              PROXY  STATEMENT SUMMARY              

 

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

 

 

 

 

LOGO

 

(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 2019 net income can be found at Exhibit B to this proxy statement (page B-1).

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

 

 

 

LOGO   LOGO
LOGO   LOGO

 

 

 

(2)

The total returns reflected are as of December 31, 2019 and calculated by combining share price appreciation and dividends paid to show the total return to shareholders expressed as an annual percentage. Sources include: S&P Dow Jones Indices and FactSet.

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

2020 Proxy Statement

 

 

 

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Table of Contents

            PROXY STATEMENT  SUMMARY               

       

 

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.

 

Name    Age     

Director

Since

    

 

Professional

Background

 

  

Board

Committees

 
Mark G. Foletta      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      65        2005     

Former Of Counsel at

Apogent Technologies, Inc.

  

 

 

 

 

Corporate Governance
& Compliance (Chair);
Executive

 

 

 
 
 

 

Michael M.E. Johns, M.D.      78        2008     

Professor in the School of Medicine,

Emory University

  

 

 

 

 

Compensation;
Corporate Governance
& Compliance

 

 

 
 
 

 

Daphne E. Jones      61        2018     

 

Former Senior Vice President –

Digital/Future of Work, GE Healthcare

 

     Audit; Compensation  
Martha H. Marsh      71        2010     

 

Former President and CEO,

Stanford Hospital and Clinics

 

     Compensation (Chair)  
Susan R. Salka      55        2003     

 

Chief Executive Officer,

AMN Healthcare Services, Inc.

 

     Executive  
Douglas D. Wheat      69        1999     

 

Managing Partner,

Wheat Investments, LLC

 

    

Board (Chairman);

Executive

 

 

                                 

 

 

2  

 

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

  2020 Proxy Statement

 

   

 


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              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 objectives.
   

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 objectives.
   

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 or non-financial metrics that align with our short and long-term strategic goals.
   

CEO

Compensation

at Risk

   In 2019, approximately 80% of our CEO’s target compensation was variable and at risk.
   

Equity Ownership

Guidelines

  

CEO g 5x salary

Named executive officers g 2x salary

Other members of the CEO Committee (CEO’s direct reports) g 1.5x salary

   

Executive

Compensation

Philosophy

   We have an Executive Compensation Philosophy that clearly articulates our commitment to equal pay principles and a values-based culture.
   

“Double-Trigger”

Change-in-Control

Arrangements

   Beginning in 2019, our equity agreements include “double-trigger” mechanisms to align with our executive severance agreements, which have historically included double-trigger” mechanisms.
      

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

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            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 conversations.

   
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 elections.

   

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 Policy.

   

Board Aggregate

Tenure Policy

  

Our Board has committed that it will maintain an average tenure for independent board directors of less than ten years.

   

No “Poison Pill”

  

We do not have a stockholder rights plan or “poison pill” and no shareholder rights plan shall be adopted unless it is approved by a majority of the independent directors of the Board that find such action is consistent with the exercise of their fiduciary responsibilities.

   

Annual Election of

Directors

  

All directors must be nominated and re-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

 

 

 

LOGO

 

 

4  

 

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

  2020 Proxy Statement

 

   

 


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              PROXY  STATEMENT SUMMARY              

 

How to Vote your Shares

 

 

 

 

 
WHEN   WHERE
 

Wednesday, April 22, 2020 at

8:30 a.m. Central Standard Time

 

8840 Cypress Waters Blvd., Suite 300

Dallas, Texas 75019

 

     
ONLINE   CALL   MAIL   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

       

LOGO

 

LOGO

 

LOGO

 

LOGO

       

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 21, 2020.

 

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 21, 2020.

 

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 the pre-addressed envelope provided with your proxy materials. The proxy card must be received prior to the 2020 Annual Meeting to be counted.

 

In person at the 2020 Annual Meeting. Even if you plan to attend, we encourage you to vote in advance by Internet, telephone or mail so your vote will be counted if for some reason you are unable to attend.

Our Board’s Voting Recommendations

 

 

 

       
  Item      Description of Proposal    For        Against        Page      
               
   

1

  

Election of eight director nominees

   LOGO     

 

  

 

6

 

   

2

  

Approval, on an advisory basis, compensation of our

named executive officers

   LOGO     

 

  

 

68

 

   

3

  

Ratify the appointment of the independent auditor

   LOGO     

 

  

 

71

 

   

4

  

Reduce the threshold necessary to call a special

shareholders meeting

   LOGO     

 

  

 

72

 

   

5

  

Shareholder proposal – Make Shareholder Right to Call

Special Meeting More Accessible

    

 

   LOGO   

 

73

 

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

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  PROPOSAL 1:  ELECTION OF OUR DIRECTORS    

       

 

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.

 

 

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AMN HEALTHCARE SERVICES, INC.  

 

 

 

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  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 review, approval and appointment.

 

  (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 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

 

 

Eight directors are to be elected at our 2020 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 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 business experience, board service, qualifications and affiliations of our director nominees are set forth below.

 

 

 

    

    

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

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  PROPOSAL 1:  ELECTION OF OUR DIRECTORS    

       

 

Our Directors’ Skills Matrix

 

 

 

LOGO

 

 

 

    

    

 

The Board of Directors recommends that shareholders vote

“FOR”

each of the following nominees

 

 

    

    

 

 

8  

 

 

 

AMN HEALTHCARE SERVICES, INC.  

 

 

 

  2020 Proxy Statement

 

   

 


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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

 

Mark G. Foletta
     

Director Since 2012

 

Age: 59

 

Audit Committee Chair

 

Financial Expert

   LOGO   

Finance

  

Enterprise Risk Management

  

Board Leadership

  

Mergers & Acquisitions

  

Healthcare Industry

  

C-Suite Leadership

  

Executive Vice President and Chief Financial Officer

Tocagen Inc.

 

 

Experience and Qualifications

The Board has concluded that Mr. Foletta is qualified to serve on the Board, because he brings considerable audit, financial, healthcare and enterprise risk management experience as both an executive officer and director of healthcare companies. The Board has designated Mr. Foletta as a financial expert for its Audit Committee, for which he serves as Chairman. Since February 2017, Mr. Foletta has served as Executive Vice President and Chief Financial Officer of Tocagen Inc. Mr. Foletta served as the Interim Chief Financial Officer of Biocept, Inc., a publicly-traded diagnostics company, from August 2015 to July 2016, and he also served as Senior Vice President, Finance and Chief Financial Officer of Amylin Pharmaceuticals, Inc. from March 2006 until October 2012. While at Amylin, Mr. Foletta assisted with developing and launching the organization’s initial enterprise risk management assessment. From March 2000 to March 2006, Mr. Foletta served as Vice President, Finance and Chief Financial Officer of Amylin. Mr. Foletta received a Bachelor of Arts from the University of California, Santa Barbara. He is also a Certified Public Accountant (inactive) and a member of the Corporate Directors Forum.

Board Experience

Since November 2014, Mr. Foletta has served on the Board of DexCom, Inc., a publicly-traded company, where he is the Lead Director. From February 2013 through June 2018, Mr. Foletta served as a director of Regulus Therapeutics Inc., and was Chairman of its Audit Committee and a member of its Nominating and Governance Committee. While at Regulus and DexCom, Mr. Foletta helped oversee and guide the launch of each organization’s initial enterprise risk management assessment. Additionally, Mr. Foletta serves as a director of Viacyte, Inc., a privately held company. He previously served as a director and Chairman of the Audit Committee of Ambit Biosciences Corporation (sold in 2014), and also served as a director of Anadys Pharmaceuticals, Inc. (sold in 2011).

 

 

    

    

 

 

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PROPOSAL 1:  ELECTION OF  OUR DIRECTORS   

       

 

Teri G. Fontenot
     

Director Since 2019

 

Age: 66

 

Audit Committee

 

Financial Expert

   LOGO   

Finance

  

Enterprise Risk Management

  

Board Leadership

  

Mergers & Acquisitions

  

Healthcare Industry

  

C-Suite Leadership

  
  

 

Former President & Chief Executive Officer of

Woman’s Hospital

 

 

Experience and Qualifications

The Board has concluded that Ms. Fontenot is qualified to serve on the Board because she brings considerable audit, financial and healthcare experience both as an executive officer and director of healthcare companies. The Board has determined that Ms. Fontenot qualifies as a financial expert and appointed her as a member of its Audit Committee. Since March 2019, Ms. Fontenot has served as CEO Emeritus of Woman’s Hospital, the largest independently-owned women’s and infant’s hospital in the United States providing comprehensive subspecialty services to women. From 1996 to March 2019, Ms. Fontenot served as President and CEO of Woman’s Hospital. From 1992 to 1996, Ms. Fontenot served as the Chief Financial Officer and Executive Vice President of Woman’s Hospital. Under her leadership, Woman’s Hospital became the largest birthing hospital and neonatal intensive care unit in Louisiana. Prior to joining Woman’s Hospital in 1992, Ms. Fontenot served as Chief Financial Officer of three other hospitals located in Louisiana and Florida and is a Certified Public Accountant (inactive).

Board Experience

Ms. Fontenot has served on numerous healthcare boards at a local, state and national level, including the Board of Directors of the Louisiana Hospital Association, and the American Hospital Association where she served as Chairperson in 2012. She is on the American College of Healthcare Executives Board of Governors and a member of its Audit Committee, and she held a six-year term on the Advisory Committee on Research on Women’s Health for the National Institutes of Health. Ms. Fontenot is also a director on the board of the Baton Rouge Water Company, a private company, and a director on the board of Companion Animal Alliance, a not-for profit agency. From 2007 to 2019, Ms. Fontenot served on the board of directors of the Sixth District Federal Reserve Bank of Atlanta, including as its Audit Committee chair for two years. Ms. Fontenot currently serves on the board of directors and a member of the audit committees for LHC Group, Inc. and Amerisafe. Inc. and she was a member of the board of directors of Landauer (a formerly publicly-held company) until its sale in 2017. She is a Fellow of the American College of Healthcare Executives, where she presents frequently on women’s health and leadership topics.

 

 

    

    

 

 

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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

 

R. Jeffrey Harris
      

Director Since 2005

 

Age: 65

 

Corporate Governance and

Compliance Committee

Chair

 

Executive Committee

   LOGO  

Corporate Governance

 

Strategy

 

Legal

 

C-Suite Leadership

 

Healthcare Industry

 

Mergers & Acquisitions

   
      

 

Former Of Counsel at          

Apogent Technologies, Inc.          

 

 

Experience and Qualifications

The Board has concluded that Mr. Harris is qualified to serve on the Board because he brings considerable mergers and acquisitions experience, which is a key component of AMN’s strategy. Additionally, Mr. Harris has experience serving as a director on public company compensation and corporate governance committees, which is essential to designing and maintaining our executive compensation programs and guiding our corporate governance strategies. Mr. Harris served as Of Counsel at Apogent Technologies, Inc. from December 2000 through 2003, and as Vice President, General Counsel and Secretary from 1988 to 2000, when the company was named Sybron International.

Board Experience

Since 2002, Mr. Harris has been involved as an investor in, and a director of, early stage companies. Mr. Harris served on the Board of Sybron Dental Specialties from April 2005 until it was acquired by Danaher Corporation in 2006. Mr. Harris served on the Board of Playtex Products, Inc. from 2001 until Energizer Holdings acquired it in October 2007. Mr. Harris was director of Prodesse, Inc., an early stage biotechnology company, from 2002 until 2009, when Gen-Probe Incorporated acquired it. Mr. Harris also served as director of Apogent Technologies, Inc. from 2000 to 2004, when it was acquired by Fisher Scientific International, Inc. From 2008 until 2018, he served as a director of Guy & O’Neill, Inc. He currently serves on the Board of Brookfield Academy, a non-profit entity, and is Chairman of the Board and a co-founder of BrightStar Wisconsin Foundation, Inc., a non-profit economic development corporation. Additionally, Mr. Harris is a director of Okanjo Partners, Inc., an early stage technology company.

 

 

    

    

 

 

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PROPOSAL 1:  ELECTION OF  OUR DIRECTORS   

       

 

Michael M.E. Johns, M.D.
     

Director Since 2008

 

Age: 78

 

Corporate Governance and

Compliance Committee

 

Compensation

Committee

   LOGO   

Board Leadership

  

Strategy

  

C-Suite Leadership

  

Healthcare Industry

  
  

 

Professor,

Emory University School of Medicine

 

 

Experience and Qualifications

The Board has concluded that Dr. Johns is qualified to serve on the Board because he has extensive “C-suite” healthcare leadership experience and is a recognized healthcare thought leader. This expertise is valuable in shaping our strategy to deliver innovative and expanded service offerings as a healthcare workforce solutions company. Dr. Johns is a Professor in the School of Medicine at Emory University, where he also served as Chancellor from October 2007 through August 2012. Dr. Johns served as Interim Executive Vice President of Health Affairs for Emory University and as Interim Chairman and CEO of Emory Healthcare from September 1, 2015 through January 31, 2016. He served as the Interim Executive Vice President for Medical Affairs and Interim Chief Executive Officer of the University of Michigan Health System from June 2014 through March 2015. From 1996 to 2007, Dr. Johns served as Executive Vice President for Health Affairs and Chief Executive Officer of the Robert W. Woodruff Health Sciences Center of Emory University. From 1990 to 1996, Dr. Johns was Dean of the Johns Hopkins School of Medicine and Vice President of the Medical Faculty at Johns Hopkins University. From 1990 to 1996, Dr. Johns was Dean of the Johns Hopkins School of Medicine and Vice President of the Medical Faculty at Johns Hopkins University. Dr. Johns is a member of The National Academy of Medicine of the National Academy of Science.

Board Experience

Dr. Johns serves on the Board of Directors of Intelligent Fingerprinting, a privately held company, as well as several philanthropic entities. He is also a member of the Board of Regents of the Uniformed Services University for the Health Sciences, University of Michigan Medical Center and Vanderbilt University Medical Center. Dr. Johns served on the Board of the Genuine Parts Company from 2000 until April 2015, and at various times during his tenure, was a member of its Compensation, Governance and Nominating Committee and its Audit Committee. He also served on the Board and the Compensation Committee of Johnson & Johnson from 2005 to 2014 and served as a member of the Board of West Health Institute, a non-profit medical research organization. From 1996 to 2007, Dr. Johns served as Chairman of the Board of Directors of Emory Healthcare.

 

 

    

    

 

 

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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

 

Daphne E. Jones
     

Director Since 2018

 

Age: 61

 

Audit Committee

 

Compensation Committee

   LOGO   

Digital / Technology

  

Healthcare Industry

  

C-Suite Leadership

  

Strategy

  
  
  
  

 

Former Senior Vice President – Digital/Future of Work

GE Healthcare

 

 

Experience and Qualifications

The Board has concluded that Ms. Jones is qualified to serve on the Board because she brings considerable information technology, global digital technology use, data management and privacy experience as a seasoned “C-suite” executive with extensive experience in multinational corporations. Ms. Jones’ digital use and technology expertise and experience will be critical to our successful execution of our digital strategies. Ms. Jones served as the Senior Vice President - Digital/Future of Work for GE Healthcare, the healthcare business of GE, from May 2017 to October 2017 and prior to that she served as the Senior Vice President - Chief Information Officer for GE Healthcare Diagnostic Imaging and Services since August 2014. Prior to joining GE Healthcare, Ms. Jones was the Senior Vice President, Chief Information Officer for Hospira, Inc., a provider of pharmaceuticals and infusion technologies, from October 2009 through June 2014. Previously she served as Chief Information Officer at Johnson & Johnson from 2006 to 2009 and served in various information technology roles with Johnson & Johnson from 1997 through 2006. Ms. Jones began her career in sales and systems engineering at IBM.

Board Experience

Ms. Jones serves on the board of Masonite International Corp, where she is a member of the Audit Committee. She also serves on the board of directors for Barnes Group Inc. and Destiny Transformations Group, LLC. Ms. Jones previously served on the board of the Thurgood Marshall College Fund, a not-for-profit organization and the nation’s largest organization exclusively representing the Black College Community.

 

 

    

    

 

 

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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

       

 

Martha H. Marsh
     

Director Since 2010

 

Age: 71

 

Compensation Committee

 

Chair

   LOGO   

Board Leadership

  

Strategy

  

C-Suite Leadership

  

Healthcare Industry

  
  
  
  

 

Former President and CEO,

Stanford Hospital and Clinics

 

 

Experience and Qualifications

The Board has concluded that Ms. Marsh is qualified to serve on the Board because she has extensive “C-suite” leadership and expertise in the healthcare industry. Ms. Marsh’s experience and understanding of the challenges and opportunities of large healthcare facilities are immensely useful in directing our strategy to innovate and provide enhanced and expanded workforce solutions service offerings to meet our clients’ evolving needs. Ms. Marsh served as President and CEO of Stanford Hospital and Clinics for eight years, from April 2002 until her retirement in August 2010. Previously, Ms. Marsh served as the CEO of UC Davis Medical Center and the Chief Operating Officer of the UC Davis Health System from 1999 to 2002. Prior to that time, she served as the Senior Vice President for Professional Services and Managed Care at the University of Pennsylvania Health System, and before that as President and CEO of Matthew Thornton Health Plan in Nashua, New Hampshire.

Board Experience

From 2012 through 2019, Ms. Marsh served as a director of Owens & Minor, Inc. as the Chairperson of the Governance and Nominating Committee and also served on its Compensation and Benefits Committee. Since October 2015, she has served as a director of Edwards Lifesciences Corporation and is a member of its Compensation and Governance Committee. She also serves on the Board and the Compensation Committee of Teichert, a privately-held company. Prior to Thoratec Corporation’s acquisition by St. Jude Medical in 2015, she had served on Thoratec’s Board. Ms. Marsh is a past Chair of the Board of Trustees for the California Hospital Association and the California Association of Hospitals and Health Systems and a former director of Ascension Healthcare Network, a privately-held company.

 

 

    

    

 

 

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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

 

Susan R. Salka
     

Director Since 2003

 

Age: 55

 

Executive Committee

   LOGO   

Healthcare Industry

  

Board Leadership

  

C-Suite Leadership

  

Mergers & Acquisitions

  

Corporate Governance

  

Finance

  
  

 

Chief Executive Officer

AMN Healthcare Services, Inc.

 

 

Experience and Qualifications

Ms. Salka has served as our President since May 2003 and our CEO since May 2005. The Board has concluded that Ms. Salka is qualified to serve on the Board because she has nearly three decades of healthcare services industry experience, including 30 years of experience with us in various roles, including Chief Financial Officer and Chief Operating Officer. During her service to the Company, she has helped grow our business both organically and through acquisitions into the national industry leader we are today. Prior to joining us, Ms. Salka worked at BioVest Partners, a venture capital firm, and at Hybritech, a subsidiary of Eli Lilly & Co., which Beckman Coulter later acquired.

Board Experience

Ms. Salka is recognized as a leader in corporate governance and currently serves as a director of McKesson Corp., including as Chairperson of its Corporate Governance Committee and as a member of its Compensation Committee. Ms. Salka served on the Board and the Audit Committee of Beckman Coulter from 2007 until 2011, when Danaher Corporation acquired it. Additionally, she served on the Board of Playtex Products, Inc. from 2001 until Energizer Holdings acquired it in October 2007.

 

Diversity, Equality and Inclusion

Under Ms. Salka’s leadership, AMN has become the largest and most diversified total talent solutions company in healthcare. Ms. Salka is passionate about corporate social responsibility, diversity, inclusion, and equality. She participates in many of the company’s community initiatives, including the annual medical and community development trip to Guatemala. As one of the top 25 New York Stock Exchange (“NYSE”) female CEOs, she is also an advocate for promoting women in leadership and the boardroom. AMN is part of the Bloomberg Gender Equality Index and Human Rights Campaign Foundation Corporate Equality Index. Ms. Salka serves on the Executive Committee of the Healthcare Leadership Council, a coalition of CEOs from the nation’s top healthcare companies dedicated to improving healthcare delivery and accessibility by working with each other and legislators.

 

 

    

    

 

 

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  PROPOSAL 1:  ELECTION  OF OUR DIRECTORS   

       

 

Douglas D. Wheat
     

Director Since 1999

 

Age: 69

 

Board Chair

 

Executive Committee

   LOGO   

Healthcare Industry

  

Legal

  

Mergers & Acquisitions

  

Board Leadership / Governance

  

Corporate Finance

  
  

 

Managing Partner

Wheat Investments, LLC

 

 

Experience and Qualifications

The Board has concluded that Mr. Wheat is qualified to serve on the Board because he possesses significant healthcare staffing industry knowledge as well as extensive expertise in corporate finance and mergers and acquisitions. Such knowledge and expertise are critical to the successful design and implementation of our growth strategy. He is currently the Managing Partner of Wheat Investments, a private investment firm. From 2007 to 2015, Mr. Wheat was the founding and Managing Partner of the private equity company Southlake Equity Group. From 1992 until 2006, Mr. Wheat was President of Haas Wheat & Partners. Prior to the formation of Haas Wheat, Mr. Wheat was a founding member of the merchant banking group Donaldson, Lufkin & Jenrette specializing in leveraged buyout financing. From 1974 to 1984, Mr. Wheat practiced corporate and securities law in Dallas, Texas. Mr. Wheat received both his J.D. and B.S. degrees from the University of Kansas.

Board Experience

Mr. Wheat is the Chairman of the Board of Overseas Shipholding Group and the Chairman of the Board of International Seaways, Inc. He previously served as Vice Chairman of Dex Media, Inc. and as Chairman of SuperMedia prior to its merger with Dex One. Mr. Wheat has also previously served as a member of the Board of Directors of several other companies, including, among others: (1) Playtex Products (of which he also served as Chairman), (2) Dr. Pepper/Seven-Up Companies, Inc., (3) Dr. Pepper Bottling of the Southwest, Inc., (4) Walls Industries, Inc., (5) Alliance Imaging, Inc., (6) Thermadyne Industries, Inc., (7) Sybron International Corporation, (8) Nebraska Book Corporation, (9) ALC Communications Corporation, (10) Mother’s Cookies, Inc., and (11) Stella Cheese Company.

 

 

    

    

 

 

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              CORPORATE  GOVERNANCE              

 

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.

 

   
   

ISG Principle

 

AMN’s Practice

   
   
     

Boards are accountable to

shareholders.

 

 

•   We provide proxy access to our shareholders with features that are consistent with market practices and that incorporated shareholder input.

 

•   Our directors stand for election annually, with a majority voting standard in uncontested director elections. Directors that do not receive majority support must tender their resignation for consideration by the Board.

   
     

Shareholders should be

entitled to voting rights in

proportion to their economic

interest.

 

•   We have one class of common stock, with each share carrying equal voting rights. We believe in a “one share, one-vote” standard.

 

•   We do not have a “poison pill.”

   
     

Boards should be

responsive to shareholders

and be proactive in order to

understand their

perspectives.

 

•   Our robust shareholder outreach program allows us to solicit ongoing feedback from our shareholders on corporate governance matters most important to them.

•   The Board regularly considers and acts upon feedback received from our shareholders. A detailed discussion of the specific actions that the Board has taken in 2019 in response to shareholder feedback is located in the “Our Annual Shareholder Outreach Summary” section below.

   
     

Boards should have a

strong, independent

leadership structure.

 

•   We have a strong, independent Board Chairman and independent committee chairs with clearly defined responsibilities.

•   Our Board regularly reviews its leadership structure and composition at least annually and discusses its appropriateness in this proxy statement.

•   Key Board committees are completely independent and include: Corporate Governance and Compliance; Audit; and Compensation.

   
     

Boards should adopt

structures and practices

that enhance their

effectiveness.

 

•   88% of our director nominees are independent.

•   Our directors reflect a diverse set of experiences and skills that are relevant to our long-term business strategy and our refreshment strategy is continuously evaluated.

•   50% of our director nominees are diverse from gender, race or ethnicity standpoint.

•   Annual Board and committee-level assessments are conducted with bi-annual individual director interviews to ensure effectiveness.

•   Our Board has committed that it will maintain an average tenure for independent board directors of less than ten years.

•   Our Board has access to management and outside consultants to ensure effectiveness.

   
     

Boards should develop

management incentive

structures that are aligned

with the long-term strategy

of the company.

 

•   Target compensation mix is not overly weighted toward annual incentive awards and balances cash and long-term equity awards in accordance with certain financial and non-financial metrics that align with our short and long-term strategic goals.

•   Our executive severance agreements and equity awards contain “double trigger” mechanics beginning in 2019.

•   We have stock ownership requirements for our named executive officers that require ownership of unrestricted shares.

•   Our executive compensation programs are aligned with shareholder returns and promote of a values-based culture.

   

 

 

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            CORPORATE GOVERNANCE                

       

 

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:

 

 

Human Capital Strategy &

Risk Management

 

    

Board

Refreshment

    

Social &

Governance

Issues

    

 

Diversity, Equality

& Inclusion

 

    

 

Gender Pay

Equality

 

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.

 

 

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              CORPORATE  GOVERNANCE              

 

Response to Shareholder Feedback

   
   

Corporate

Social
Responsibility

  

  A new Company corporate social responsibility webpage;

  New disclosures in our proxy statement to highlight our commitment to Corporate Social Responsibility; and

  Expanded approach to GRI reporting and changed the publication of our CSR report from a bi-annual to an annual basis to align with the release of our Proxy Statement and Annual Report.

   

 

   

Board

Composition

and

Refreshment

  

  Appointed Ms. Daphne Jones and Ms. Teri Fontenot to the Board;

  Committed to maintain an aggregate board tenure for independent directors with an average tenure of less than ten years; and

  Incorporated individual interviews into the director evaluation process on a bi-annual basis for increased accountability.

   

 

   

Human Capital

Management

Strategy

  

  Implemented company-wide retention and investment initiatives; and

  Established a formal Diversity, Equality & Inclusion philosophy and multifaceted program.

   

 

   

Executive

Compensation

  

  Instituted “double trigger” mechanics for newly granted equity awards

   
   

Diversity,

Equality &

Inclusion

  

  Revised Governance Guidelines to affirm our commitment to a diverse Board;

  Doubled diversity vendor spend in 2019 and published white papers and surveys that highlight diversity issues; and

  Expanded diversity sourcing, candidate metrics, unconscious bias training, and employee resource groups across the enterprise.

   

 

   

Pay

Equality

  

  Revised the Company’s Executive Compensation Philosophy to clearly articulate our commitment to human capital management and equal pay principles; and

  Implemented a process to ensure pay equality without regard to legal classification across our organization.

   

 

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.

 

 

Refreshed our Code of Conduct and Ethics (“Code of Conduct”) that is based on the Company’s core values of respect, trust, passion, innovation, customer focus and continuous improvement and contains examples and questions that help our team members put our core values into practice.

 

 

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            CORPORATE GOVERNANCE                

       

 

 

Conducted an new type of annual engagement survey of our team members and shared the results of this survey with the Board to ensure we are delivering on the AMN Difference, which includes our core values, leader and coworker quality, collegial work environment, development and career opportunities.

 

 

Evolved our formal Diversity, Equality and Inclusion Philosophy focusing on our efforts on the workplace, workforce and marketplace and reflected on the Company’s website at www.amnhealthcare.com/diversity-equality-inclusion.

 

 

Adopted a Human Rights Policy and a Vendor Code of Conduct that is incorporated into our Code of Conduct.

 

 

Launched a Corporate Social and Responsibility webpage that illustrates information and resources applicable to our strategy and the social objectives that we strive to achieve.

 

 

Consistently evaluate and amend the Governance Guidelines to reflect corporate governance and human capital management best practices. The Governance Guidelines function as a critical component to the overall framework for the governance of our Human Capital Strategy.

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.

 

 

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              CORPORATE  GOVERNANCE              

 

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.

 

 

LOGO

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.

 

 

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            CORPORATE GOVERNANCE                

       

 

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.

 

 

LOGO

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

 

 

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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.

 

 

LOGO

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:

 

   

Overseeing the work of our independent auditors,

 

   

Reviewing and discussing with management significant technology strategic initiatives, operations and risks, including, business continuity planning, project performance, technical operations performance, major technology architecture decisions, internal IT controls and related regulatory risks, significant technology investments and trends in technology that may affect the Company’s strategic plans,

 

   

Reviewing and discussing with management key technology strategic initiatives and risks, including information security and cybersecurity incidents and any related disclosure obligations,

 

   

Reviewing and discussing with management the Company’s processes to manage major financial risk exposures to the Company and the steps management has or plans to take to monitor, control and manage such exposures, including our risk assessment and risk management guidelines and policies,

 

 

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Approving procedures for receiving complaints regarding accounting, internal accounting controls or auditing matters, and reviewing evidence of material violations of securities laws, breaches of fiduciary duty related to financial reporting and other financially-related disclosures,

 

   

Reviewing and discussing with management, our chief internal auditor, independent auditors or in-house counsel, as appropriate, any legal, regulatory or compliance matters that could have a significant effect on our financial statements, and

 

   

Reviewing the results of significant financial or accounting investigations, examinations or reviews performed by regulatory authorities and management’s responses.

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:

 

   

Establishing the Company’s executive compensation philosophy and principles to ensure they (i) reflect the Company’s commitment to equal pay principles and its values-based culture, (ii) are designed and operating effectively to appropriately attract, incent and retain talent, and (iii) align with long-term shareholder interests;

 

   

Reviewing on an annual basis the corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and determine and approve the CEO’s compensation level based on this evaluation,

 

   

Reviewing and make recommendations to the Board on an annual basis with respect to the compensation of all of the Company’s executive officers,

 

   

Setting the composition of the group of peer companies used for comparison of executive compensation,

 

   

Overseeing the design and management of the various long-term incentive compensation, equity, savings, health and welfare plans that cover our employees,

 

   

Reviewing, and recommending to the Board, the compensation for our non-employee directors; and

 

   

Overseeing the Company’s human capital management program strategy, including its talent recruitment, retention and engagement and inclusion initiatives.

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.

 

 

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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:

 

   

Overseeing matters of corporate governance, including preparing and recommending to the Board the Governance Guidelines,

 

   

Overseeing director succession practices, including identifying potential director candidates for the Board and recommending director nominees to the Board for approval,

 

   

Reviewing our leadership succession programs and processes and our CEO succession plans,

 

   

Reviewing the organization, implementation and effectiveness of the Company’s non-financial compliance and quality programs, including the Company’s employment, healthcare and clinical compliance practices and risk oversight of the credentialing of candidates to ensure that the Company is placing qualified healthcare professionals,

 

   

Reviewing any significant events investigated under our compliance and ethics programs and the Company’s Code of Conduct (other than financial matters or misconduct that are reviewed by the Audit Committee), and

 

   

Overseeing the Company’s shareholder outreach program relating to corporate governance matters.

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:

 

  (1)

the director does not qualify as independent under Rule 303A.02(b) of the NYSE Listed Company Manual,

 

  (2)

the director or an immediate family member is a partner of, or of counsel to, a law firm that performs substantial legal services for us on a regular basis, or

 

  (3)

the director or an immediate family member is a partner, officer or employee of an investment bank or consulting firm that performs substantial services for us on a regular basis for which it receives compensation.

 

 

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

 

  (1)

the director or an immediate family member is an executive officer of another company that does business with us and the annual sales to, or purchases from, us are less than 1% of the annual revenues of the company for which he or she serves as an executive officer,

 

  (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, 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:

 

  (1)

increases the independent oversight of the Company and enhances the Board’s objective evaluation of our CEO,

 

  (2)

provides our CEO with an experienced sounding board in the Chairman, and

 

  (3)

provides an independent spokesperson for the Company.

 

 

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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

 

 

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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

 

 

 

We have standing Audit, Corporate Governance and Compliance, Compensation, 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 a bi-annual basis, the 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 at www.amnhealthcare.com.

 

 

 

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

 

       

 

Director

  

 

Audit (1)

  

 

Compensation (2)

  

 

Governance &

Compliance(3)

  

 

Executive

Mark G. Foletta

  

Chair

          

R. Jeffrey Harris

        

Chair

  

Member

Michael M.E. Johns, M.D.

     

Member

  

Member

    

Martha H. Marsh

     

Chair

       

Susan R. Salka

           

Member

Andrew M. Stern

  

Member

     

Member

    

Teri G. Fontenot

  

Member

          

Douglas D. Wheat

           

Chair

Daphne E. Jones

  

Member

  

Member

       

Committee Meetings and Actions by Written Consent

Total Committee Meetings

  

9

  

6

  

5

  

2

Actions by Written Consent

  

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 Rule 10A-3 under the Exchange Act, and Section 303A of the NYSE Listed Company Manual. The Board further determined that Mark G. Foletta and Teri G. Fontenot are each an “Audit Committee Financial Expert” as defined by SEC Rules and Regulations.

(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.

 

AUDIT COMMITTEE

Our Audit Committee Charter, which is reviewed annually, sets forth the duties of the Audit Committee. Generally, the Audit Committee is responsible for, among other things, overseeing our financial reporting process. In the course of performing its functions, the Audit Committee as provided by our Audit Committee Charter:

 

  (1)

reviews our internal accounting controls and audited financial statements,

 

  (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 approving non-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 Company’s process to manage our major enterprise risk exposures and the steps taken to monitor, control and manage such exposures, and

 

  (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 sets forth the duties of the 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

 

 

 

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  (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, management 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 collective composition of the 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.

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 2021 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 22, 2021 and no sooner than December 23, 2020. Any such recommendation must include the information set forth on Exhibit A to this proxy statement (page A-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 2019 to more effectively delineate the Committee’s oversight of the Company’s human capital management and equal pay strategies, sets forth the Committee’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 “say-on-pay” and the frequency of the “say-on-pay” vote that are required by SEC rules,

 

  (6)

reviews our incentive compensation arrangements generally to determine whether they encourage excessive risk-taking,

 

  (7)

evaluates the performance of our CEO, and

 

  (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 portion of this proxy statement below.

 

 

 

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Compensation Committee Interlocks and Insider Participation

The Compensation Committee, whose members are Ms. Marsh, Dr. Johns, and Ms. Jones consists exclusively of non-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 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.

 

 

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DIRECTOR COMPENSATION AND OWNERSHIP GUIDELINES   

       

 

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

 

 

 

We pay our independent 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 for out-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

  

  70,000     

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     

 

 

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.

 

 

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  DIRECTOR COMPENSATION AND OWNERSHIP GUIDELINES  

 

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.

 

     

 

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 2,907 RSUs granted to each director elected to the Board on the date of the Annual Meeting of Shareholders held on April 17, 2019, and, for Ms. Teri Fontenot, it reflects the pro-rated AGD Fair Value of the 1,356 RSUs awarded to her on the date of her appointment to the Board on September 16, 2019.

(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 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.

 

 

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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.

 

 

 

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  COMPENSATION DISCUSSION AND ANALYSIS  

 

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

 

 

The 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 for our named executive officers. The Compensation Committee takes great care in the development and refinement of a comprehensive package that reflects its oversight responsibility relating to attracting, 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 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’s overall objective to support the Company’s business strategy.

The Compensation Committee believes that our named executive officers are collectively a strong, valuable, experienced, talented and innovative team, with a passion for the Company, its core values and delivering sustainable returns for our shareholders. Our named executive officers for the 2019 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

 

Executive Summary

 

 

Our pay-for-performance focused executive compensation program is designed to motivate our leaders to build long-term shareholder value. Among other things, the Compensation Committee premises our executive compensation on the following guiding principles:

 

 

support 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;

 

 

create commonality of interest between our executives and shareholders by tying realized compensation directly to increases in shareholder value; and

 

 

foster a culture of integrity, equality and ethics where team members are treated with respect and appreciation for their contributions.

To support AMN’s objectives, the Compensation Committee has designed a total rewards program for our named executive officers that includes the following primary features, which constitute the majority of our named executive officers total pay: (1) base salary; (2) annual bonuses; and (3) long-term incentive awards.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS   

       

 

Below is a summary relating to our named executive officers’ total rewards compensation program.

 

   
          

What We Do

 

 

LOGO   

 

 

Executive Compensation Philosophy that expressly articulates our commitment to equal pay and fostering a culture of ethics.

 

LOGO   

 

 

Align Pay with Performance. In 2019, variable pay constituted 80% of our CEO’s total compensation and more than 68% for each of our other named executive officers.

 

LOGO   

 

 

Reward for Increases in Shareholder Value. We grant performance restricted stock units, which we refer to as PRSUs, based on absolute and relative total shareholder return over a three-year performance period to reward named executive officers for above-market stock performance (relative to the Russell 2000 Index). We refer to the awards that vest based on total shareholder return as TSR PRSUs.

 

LOGO   

 

 

Focus on Our Long-term Goals. We utilize PRSUs that vest three years from grant based on the Company’s achievement of certain long-term adjusted EBITDA growth and margin expansion objectives. We refer to these awards as our adjusted EBITDA margin PRSUs and adjusted EBITDA growth PRSUs, as the case may be. We also sometimes refer to adjusted EBITDA as AEBITDA.

 

LOGO   

 

 

Ownership Guidelines. We have meaningful stock ownership requirements for our named executive officers that require ownership of unrestricted shares.

 

LOGO   

 

 

Cap Incentive Awards. We cap annual bonus awards for our named executive officers under our Bonus Plan.

 

LOGO   

 

 

Incentives to Achieve Objective and Key Financial Metrics. 70% of our Bonus Plan target for each named executive officer is based on achieving annual revenue and adjusted EBITDA targets, two key financial metrics for the Company. The remaining 30% is based on objective non-financial criteria such as execution on key initiatives, leadership and demonstration of our values.

 

LOGO   

 

 

Independent Compensation Consultant. Our Compensation Committee utilizes the services of an independent and reputable compensation consultant, Frederic W. Cook, to provide pay recommendations.

 

LOGO   

 

 

Responsible Share Usage. We judiciously grant shares under the AMN Healthcare 2017 Equity Plan, which we refer to as the Equity Plan, and maintain a share usage rate that is below industry norms.

 

LOGO   

 

 

Appropriate Peer Group Selection. We regularly review our executive compensation peer group to ensure that our compensation program is properly aligned with the companies we compete for talent and business.

 

LOGO   

 

 

“Double-trigger” Change in Control Provisions. Our equity award agreements include “double-trigger” mechanics.

 

   
          

What We Don’t Do

 

 

LOGO   

 

 

No Risky Programs. We do not engage in compensation programs that create undue risk.

LOGO     

 

No Pledges or Hedges. We prohibit hedging and the pledging of, or hypothecating, or otherwise placing a lien on, any of common stock or other equity interests of the Company.

LOGO     

 

No New Tax Gross-ups. We have committed to not enter into new employment or other agreements with tax gross-ups for named executive officers. Ms. Salka’s employment agreement, which was entered into in 2005, contains a tax gross up.

LOGO     

 

No Options or SARs. We have not granted equity awards in the form of options or stock appreciation rights, which we refer to as SARs, since 2010.

 

 

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  COMPENSATION DISCUSSION AND ANALYSIS  

 

2019 Financial, Operational and Stock Performance Highlights

A long-standing principle of our executive compensation program is linking pay to performance. Accordingly, when making compensation decisions, we analyze our financial, operational and stock performance and execution on strategic initiatives. The Company delivered revenue, profitability and share growth in 2019(1) and continued to make significant progress on our short- and long-term objectives and overall business strategy.

Some of our 2019 highlights include:

 

 

Our TSR ranked in the 81st percentile for the three-year period ended December 31, 2019 among companies comprising the Russell 2000 Index as of December 31, 2016 with a cumulative total shareholder return of 73.5%.

 

 

The price of our common stock increased 10% in 2019 to $62.31, the closing price on December 31, 2019.

 

 

Execution of our long-term strategic plan by consummating the following acquisitions:

 

   

In January 2019, we acquired Silversheet Inc., which we refer to as Silversheet, an all-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 a web-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 4% from approximately $2.14 billion to approximately $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 our go-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 3%, from $270.4 million to $277.6 million.

 

(1) 

For more detail regarding our financial results, please see our 2019 annual report on Form 10-K filed by us with the SEC on February 24, 2020 and provided to you concurrently with this proxy statement. We provide the summary financial information in this proxy statement solely to help you in your evaluation and review of our CD&A. It should not be used as a substitute for a review of the detailed financial information in our 2019 annual report on Form 10-K.

(2) 

For information on adjusted EBITDA, which means adjusted earnings before interest, taxes, depreciation and amortization, and a reconciliation of it to our 2019 net income, please see Exhibit B to this proxy statement (page B-1).

 

 

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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.

 

 

LOGO

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 2019 cash bonus as well as her 2019 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 the one-, two- and three-year periods ended December 31, 2019.

 

       

 

 

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, 2019 (the last trading day of the year) was $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.

 

 

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  COMPENSATION DISCUSSION AND ANALYSIS  

 

2019 Compensation for Our Named Executive Officers

Numerous factors played a role in our 2019 compensation decisions with the overarching goal of closely linking pay to performance. In 2019, performance-based cash incentives and equity compensation (which is inherently linked to performance) comprised 80% of our CEO’s compensation, and 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 2019 compensation as set forth in the Summary Compensation Table.

 

 

LOGO

 

 

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COMPENSATION DISCUSSION AND ANALYSIS   

       

 

As the Compensation Committee has consistently done throughout the past several years, it based its 2019 compensation decisions around financial goal setting for 2019 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 (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 2019 operational performance and financial results, each named executive officer earned approximately 69% of his or her target bonus that was tied to the Company’s 2019 financial performance. Below is a breakdown of each of our named executive officer’s compensation for 2019.

 

 

LOGO

Response to 2019 Say-on-Pay Vote

 

 

At our 2019 Annual Meeting of Shareholders held on April 17, 2019, we received more than 97% support on our “say-on-pay” proposal regarding the compensation of our named executive officers. Our compensation program has remained consistent with that set forth in our 2019 proxy statement 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.

 

 

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  COMPENSATION DISCUSSION AND ANALYSIS  

 

The Compensation Committee believes that our executive compensation program in 2019 satisfied each of the four themes identified above. In 2019, the Compensation Committee took the following actions:

 

  (1)

Used performance restricted stock units tied to total shareholder return and financial goals (i.e., adjusted EBITDA margin) over a three-year period,

 

  (2)

Established goals of 5.3% and 2.5% year-over-year consolidated revenue and adjusted EBITDA growth, respectively, in order for the named executive officers to receive their target bonuses,

 

  (3)

Adjusted base salaries to more closely align with industry and peer group pay practices and to retain our talent and reward strong performance, and

 

  (4)

Rewarded named executive officers for strong financial, operational and common stock performance through the use of reasonable, competitive amounts of incentive-based compensation.

Our Compensation Program Philosophy and Objectives

 

 

 

A guiding principle of our Executive Compensation Philosophy is that compensation realized by executives should (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 executives’ total rewards package. Our philosophy embraces the following 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’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 our say-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 total talent solutions and 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 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.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS   

       

 

The illustration below provides a high level summary of the primary components of our executive compensation program.

 

     
  Component    Purpose    Key Features

 

Base Salary

 

LOGO

  

 

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

 

LOGO

  

 

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

LOGO

  

 

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 the creation of shareholder value

•   Vesting schedules intended to support long-term retention of key contributors

•   Actual payout can range from target to incent exceptional performance

 
     

 

Retirement

& Health Plans

LOGO

  

 

Attract and retain highly skilled executives

  

 

•   Benchmarked regularly to compete with commonly offered market benefits

•   Reasonable in cost and easy to administer

•   Align with our overall business and human resources strategies

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 Equity Plan and Bonus Plan, and

 

 

as set forth more fully above (see page 24 above), analyzing the risk associated with our compensation practices.

 

 

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  COMPENSATION DISCUSSION AND ANALYSIS  

 

The Compensation Committee reviews all components of compensation of the named executive officers and other officers that directly report to our CEO (we refer to this group of executives as the CEO Committee) on an annual basis and will consider changes at other times if a change in the scope of an officer’s responsibilities justifies such consideration. In so doing, the Compensation Committee uses the services of an independent compensation consultant, Frederic W. Cook & Co., and considers the analysis and advice of its compensation consultant in discharging its responsibilities. Representatives of Frederic W. Cook & Co. attend Compensation Committee meetings and have direct access to the Compensation Committee members without management involvement. The Compensation Committee has the sole authority to hire and terminate its compensation consultant.

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, (2) the individual’s performance, duties and experience, (3) analysis and advice from its compensation consultant, (4) our financial and operational performance, and (5) the recommendations of our CEO (who does not provide a recommendation for herself). With respect to our Bonus Plan, the Compensation Committee determines the performance metrics for the award each year. Prior to or at the beginning of each fiscal year, the Board sets financial targets for our performance. Thereafter, the Compensation Committee sets the range of financial performance and corresponding targets for the named executive officers’ cash incentive compensation under the Bonus Plan.

The Compensation Committee also grants annual equity awards under our Equity Plan. In addition to annual grants, the Compensation Committee utilizes the Equity Plan to grant equity awards to key employees upon their initial employment, promotion or as special retention awards. To further serve this purpose, the Board also adopted our 2014 Employment Inducement Plan 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 employees that do not serve on the Company’s CEO Committee, within certain individual and aggregate thresholds. The Compensation Committee reviews any awards granted by our CEO.

OUR 2019 PEER GROUP

The duties of the Compensation Committee require knowledge regarding the executive compensation market. Accordingly, to understand our position within the marketplace for management talent and to assist the Compensation Committee in making compensation decisions that will help attract and retain a strong management team, the Compensation 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. The Compensation Committee believes that one of the most important factors it must consider in ensuring that our compensation program remains competitive, is the proper identification and selection of our peers, as we often compete for executive talent with such peers. Accordingly, the Compensation Committee evaluates the members of our peer group annually. We select peers from the healthcare, commercial and professional services industries, and target those companies operating in the healthcare and employment services, healthcare technology and diversified support services sectors. Like us, many of our peers are in both the S&P SmallCap 600 Index and the S&P Composite 1500 Index. Our 2019 peer group as determined by our Compensation Committee was as follows:

 

 

OUR 2019 PEER GROUP

 

Allscripts Healthcare Solutions, Inc.

  

Korn/Ferry International

Amedisys, Inc.

  

LHC Group, Inc.

Cross Country Healthcare, Inc.

  

MEDNAX, Inc.

Healthcare Services Group, Inc.

  

ASGN Incorporated

TriNet Group, Inc.

  

Premier, Inc.

Insperity, Inc.

  

Robert Half International Inc.

Kforce, Inc.

  

TrueBlue, Inc.

 

 

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Our 2019 peer group ranged from approximately $8 million to $6 billion in revenues based on each peer’s most recently reported four fiscal quarters, and from approximately $4 million to $7.3 billion in market capitalization. For purposes of comparison, our consolidated revenue for our most recently reported last four fiscal quarters equaled $2.2 billion and our market capitalization as of December 31, 2019 equaled approximately $2.9 billion, placing us seventh in our 2019 peer group for revenue and sixth for market capitalization.

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. When evaluating our 2020 peer group, the Compensation Committee reviewed (1) our 2019 peer group, (2) peers utilized by Institutional Shareholder Services that were not in our 2019 peer group, (3) peers utilized by Glass Lewis that were not in our 2019 peer group, (4) companies that were not in our 2019 peer group that disclosed us in their proxy statement as part of their peer group, and (5) companies within our GICS code that met Institutional Shareholder Services’ recommended revenue and market capitalization band criteria. Based on its evaluation, the Compensation Committee decided not to make changes to our 2019 peer group for 2020.

TRAILING TWELVE MONTHS REVENUE ($MM)

 

 

LOGO

 

MARKET CAPITALIZATION ($MM)

 

 

LOGO

 

 

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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 components of our executive compensation program include:

 

  (1)

base salary,

 

  (2)

short-term or annual performance awards in the form of cash bonuses,

 

  (3)

long-term incentive awards in the form of restricted stock units and performance restricted stock units,

 

  (4)

a non-qualified deferred compensation plan as well as benefits generally available to all of our employees,

 

  (5)

Reimbursement of each named executive officer for certain financial, estate planning and personal health and wellness expenses, and

 

  (6)

for our CEO, an employment agreement with severance provisions and, for our other named executive officers, severance arrangements.

BASE SALARY

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:

 

  (1)

the market salary for similarly situated executives within our peer group and other companies of similar revenue size and market capitalization,

 

  (2)

our operational and financial performance,

 

  (3)

our stock performance,

 

  (4)

individual performance, skills, knowledge, tenure, experience and responsibilities, and

 

  (5)

for those who report to her and are officers of the Company, the recommendations of our CEO.

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 performance. We evaluate our stock performance against our peer group and the Russell 2000 Index. Our CEO bases her recommendations on the same factors the Compensation Committee considers, and her recommendations are particularly helpful for the Compensation Committee to evaluate the other executive officers’ performance, knowledge, skills, experience and responsibilities.

ANNUAL CASH INCENTIVE BONUS

Annual cash incentive bonus opportunities serve as the second component of our executive compensation program. The Bonus Plan is the mechanism by which the Compensation Committee provides such opportunities. We intend our Bonus Plan to provide a strong incentive for our executive officers to achieve annual financial objectives that support our strategic objectives. Although certain details of the annual bonus incentive may change from year to year, key components include specific financial goals set forth in our annual operating plan such as consolidated revenue and consolidated adjusted EBITDA. The Compensation Committee sets threshold, “target” (i.e., 100%) and maximum amounts for bonuses and a weight for each metric that corresponds to the level of achievement we require to trigger a threshold, target or maximum bonus for the named executive officer under such metric.

The threshold level for each metric typically starts at a minimum performance level (e.g., 90% of targeted 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 and one-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

 

 

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hurdle ultimately achieved. The leadership component of the bonuses, which we refer to as the Leadership Component, have been based on non-financial factors, such as performance relative to direct competition, leadership, achievement of strategic objectives, effective leadership in line with our core values and executive leadership competencies and total shareholder return.

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:

 

  (1)

the metrics must be tied to key indicators of our success and our annual objectives,

 

  (2)

the performance goals must be reasonably achievable and viewed as fair, while at the same time encouraging stretch performance,

 

  (3)

the metrics must be simple to understand and can be influenced by the executive,

 

  (4)

the portion of an individual’s target annual cash compensation attributable to target annual bonus should increase with successively higher levels of responsibility, and

 

  (5)

payouts should reflect our performance as well as the performance of the executive.

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 2019, we utilized TSR PRSUs and adjusted EBITDA margin PRSUs for performance-based equity for all of our named executive officers.

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:

 

  (1)

performance periods should cover multiple years to create balance between short- and long-term objectives,

 

  (2)

long-term incentives should function to (a) align executive and shareholder interests, (b) enhance focus on improvements in operating performance and the creation of shareholder value and (c) drive achievement of our long-term strategic objectives,

 

  (3)

awards should support long-term retention of key contributors through vesting,

 

  (4)

aggregate annual share usage should be carefully managed to avoid excessive levels of shareholder value transfer in relation to those of our peer group, and

 

  (5)

the aggregate cost of long-term incentives should be reasonable compared to members of our peer group, and the cost implications should be supported by our annual and longer-term operating plans.

 

 

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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, primarily as a result of a market review that indicated that a deferred compensation plan was a significant component of executive compensation. We exclude our named executive officers from participating in our 401(k) plan, primarily to assist us in satisfying discrimination testing performed on our 401(k) plan. The Deferred Compensation Plan serves as the only retirement plan for our named executive officers. The Deferred Compensation Plan is not intended to be tax qualified. We describe the Deferred Compensation Plan more fully in the section entitled “Nonqualified Deferred Compensation” below.

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 to the benefits detailed above, the Company reimburses each named executive officer up to $25,000 in connection with annual expenses incurred in connection with financial, estate planning and personal health and wellness services. The approval of these limited perquisites by the Compensation Committee, all of which were new beginning in 2019, was made to attract and retain talent and provide market competitive compensation. The Compensation Committee believes that its approval of these perquisites remains consistent with the Company’s philosophy and commitment to align pay with performance.

In addition, in 2019, the Company continued to pay Mr. Henderson a monthly housing allowance in connection with his 2018 relocation to our Dallas, Texas office to provide increased executive leadership to our more than 700 employees located there. In 2019, the Company paid $33,231 in housing allowances to Mr. Henderson. Mr. Henderson’s housing stipend ended as of May 31, 2019.

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 of our other named executive officers. We entered into these agreements in support of our objectives regarding attraction and retention of strong management. In determining the appropriate severance levels, we considered survey data, advice from our compensation consultant and the Compensation Committee’s experience. We describe the terms of these agreements more fully in the section entitled “Termination of Employment and Change in Control Arrangements” below.

 

 

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Our 2019 Compensation Program and Results

 

 

 

Our named executive officers’ 2019 direct compensation consisted of: (1) a base salary; (2) cash incentive bonus based on performance; (3) long-term equity incentives, (4) reimbursement for certain financial and estate planning and personal health and wellness expenses and (4) certain other additional compensation, such as matching deferred compensation contributions. We discuss each component of our 2019 compensation program for our named executive officers in more detail below.

BASE SALARY

In late 2018, the Compensation Committee reviewed annual base salary levels for the named executive officers, and after careful consideration, approved increases effective January 1, 2019 ranging from three

to eleven percent from the previous year, as set forth in the table immediately to the right. In December 2019, the Compensation Committee considered base salaries of our named executive officers for 2020. In making determinations, the Compensation Committee considers, among other things, peer group benchmarking, individual and Company performance.

When benchmarking Ms. Salka’s 2019 base salary, it was slightly above the median among other CEOs among our peers.

 

       

 

Named Executive
Officer

 

 

 

2018 Salary

($)

 

   

 

2019 Salary

($)

 

   

 

Increase

%

 

 

Susan R. Salka

 

 

900,000

 

 

 

1,000,000

 

 

 

11

 

Brian M. Scott

 

 

490,000

 

 

 

505,000

 

 

 

3

 

Ralph S. Henderson

 

 

490,000

 

 

 

505,000

 

 

 

3

 

Denise L. Jackson

 

 

409,500

 

 

 

430,000

 

 

 

5

 

 

 

BONUS PLAN

Target Bonus. In January 2019, the Compensation Committee reviewed the target bonus level for each named executive officer, which we express as a percentage of annual base salary. After careful consideration of peer group data and other benchmarking information, the Compensation Committee decided to maintain the existing bonus percentage target for each of Ms. Salka and Messrs. Henderson and Scott while increasing the target percentage for Ms. Jackson.

The table below shows 2019 target bonus information for each named executive officer both in dollar amount and as a percentage of salary together with, for comparative purposes, the same figures for 2018.

 

         

 

Named Executive Officer

 

  

 

2018 Bonus Target

(% of Salary)

 

    

 

2019 Bonus Target

(% of Salary)

 

    

 

2018 Bonus

Target ($)

 

    

 

2019 Bonus

Target ($)

 

 

Susan R. Salka

  

 

120

 

  

 

120

 

  

 

1,080,000

 

  

 

1,200,000

 

Brian M. Scott

  

 

100

 

  

 

100

 

  

 

490,000

 

  

 

505,000

 

Ralph S. Henderson

  

 

100

 

  

 

100

 

  

 

490,000

 

  

 

505,000

 

Denise L. Jackson

  

 

60

 

  

 

75

 

  

 

245,700

 

  

 

322,500

 

We believe that Ms. Salka’s 2019 dollar bonus target fell around the median among CEOs within our 2019 executive compensation peer group based on our peers’ filed 2019 proxy statements, which the Compensation Committee believed was appropriate.

Structure of Our Bonus Plan. In 2019, and consistent with previous years, the Financial Component of our bonus plan comprised 70% of our named executive officers’ total target bonuses, and the Leadership Component comprised the remaining 30%.

For 2019, the Compensation Committee tied the Financial Component of the bonus to the achievement of financial targets in our 2019 annual operating plan. At the time we established this plan, we believed that it reflected above market growth for our three business segments on a consolidated basis.

In 2019, the weighting of the performance metrics was consistent for each of our named executive officers:

 

     

 

Consolidated
Revenue

 

  

 

Consolidated

AEBITDA

 

  

 

Leadership

Component

 

35%

  

35%

  

30%

 

 

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Rationale for Annual Bonus Performance Goals. The Compensation Committee has continued to utilize financial, performance and leadership goals in its annual incentive bonus program over the last several years, including 2019, for a variety of reasons. It chose revenue because it believes it remains one of the most reliable measurements to evaluate the success of our strategy, entry into new markets and growth in our existing businesses. It also selected revenue because investors focus on revenue growth as a metric when evaluating our performance. The Compensation Committee chose adjusted EBITDA because of its widespread acceptance among management, the Board, shareholders and analysts as a measurement of our profitability and performance. Both revenue and adjusted EBITDA are routinely areas of focus during our earnings calls. Furthermore, the Compensation Committee believes adjusted EBITDA remains an objective measure of management’s performance, and it excludes items over which management has less control, such as amortization, interest expense and taxes. The Compensation Committee uses the Leadership Component to, among other things, distinguish among individuals with respect to non-financial metrics, such as leadership, personal performance, contributions and execution on our strategic and operational initiatives.

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 2019 bonuses required the Company to reach the 100% target level and represented growth that the Compensation Committee believed was at or above organic growth rates in the markets we serve. The threshold for a named executive officer to receive a bonus on the consolidated financial metrics required achievement of 90% of our 2019 annual operating plan target for each of pre-bonus adjusted EBITDA,(3) which we refer to as Pre-Bonus AEBITDA, and consolidated revenue. For information on the calculation of Pre-Bonus AEBITDA, and a reconciliation of it to our 2019 net income, please see Exhibit B to this proxy statement (page B-1). Receipt of the target bonus amount for each financial metric required the Company to meet 100% of our 2019 annual operating plan for that metric, which represented roughly 5% year-over-year consolidated revenue growth and 2.5% consolidated adjusted EBITDA growth. The Company’s lower consolidated adjusted EBITDA growth target for 2019 relative to its annual consolidated revenue growth target is reflective of the Company’s decision to make strategic investments in its digital and workforce solutions technology offerings necessary to drive long-term shareholder value and achieve the Company’s long-term strategic objectives.

2019 Bonus Plan Payouts. The 2019 annual operating plan did not reflect the potential financial impact of any acquisitions. As such, the Compensation Committee elected not to include the financial impact of the Company‘s Silversheet, Advanced Medical acquisitions when determining the Company’s 2019 bonus plan revenue and adjusted EBITDA performance. In addition, because the Company’s acquisition of b4health occurred in late December, it did not have an impact on the Company’s 2019 bonus plan revenue and adjusted EBITDA performance.

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.

 

         
Metric   

2019

Target

    

2019

Results

    

$ Variance From

2019 Target

    

% Variance From

2019 Target

 
Consolidated Revenue      2,250,319        2,138,719        (111,600      (5
Pre-Bonus AEBITDA      284,501        277,567        (6,934      (2.4

With respect to the Leadership Component, the Compensation Committee believes our named executive officers demonstrated strong leadership in 2019 resulting in solid financial and operational results for the Company on both an absolute and relative basis compared against the Russell 2000, as we delivered a cumulative three-year total shareholder return of 73%, which places our performance in the 81st percentile compared to the Russell 2000, respectively.

 

(3) We use Pre-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 2019 annual operating plan. Under no circumstances should Pre-Bonus adjusted EBITDA be used to substitute for any other financial metric and is used by us solely to determine bonus amounts.

 

 

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Additionally, we (i) successfully continued to execute on our long-term strategic plan to expand and diversify our talent solutions offerings and expand our footprint into nonacute care settings by acquiring Silversheet, Advanced Medical and b4health, (ii) capitalized on a favorable capital markets environment to make a private offering of $300 million of Senior Notes due 2027 to provide for additional liquidity to pursue strategic acquisitions and other investments that we believe enhance long-term shareholder value, and (iii) continued our strategic development of mobile technology platforms and artificial intelligence aimed at improving the recruitment, engagement and retention of healthcare professionals.

Based on outcomes, the Bonus Plan is working as designed and intended, with the payout of the Financial Component of the 2019 annual incentive bonus having been in line with performance. The illustrations below demonstrate the Company’s performance to annual operating plan target for each of the elements of the Financial Component together with an illustration of the Company’s 2019 bonus payout compared to the Financial Component targets.

 

LOGO

The tables below set forth metrics and summary calculations for each named executive officer’s bonus amounts under the Leadership Component together with the final amounts under the Financial Component, which makes up 70% of the total bonus amount.

 

 

MS. SALKA’S BONUS METRICS

 
     Pre-Bonus AEBITDA     Revenue     Leadership  

Levels

    % of Target      

Pre-Bonus

AEBITDA

($ in 1000’s)

 

 

 

   

Bonus

Amount ($)

 

 

    % of Target      

Revenue

($ in 1000’s)

 

 

   

Bonus

Amount ($)

 

 

    % of Target       Target ($)  

Maximum

    120       341,401       840,000       120       2,475,351       840,000       200       720,000  

Target

    100       284,501       420,000       100       2,250,319       420,000       100       360,000  

Threshold

    90       256,051       210,000       90.5       2,036,539       210,000       None       N/A  

 

MS. SALKA’S BONUS METRICS ACHIEVED AND BONUS EARNED

 

Achieved

    87.8       277,567       368,817       50.4       2,138,719       211,710       150     $ 540,000  

Total Bonus Earned: $1,120,527

 

   

% of Target Bonus Earned

under Financial

Component: 69.1%

 

 

 

   

    % of Target Bonus Earned    

under Leadership

Component: 150%

 

 

 

 

 

MR. SCOTT’S BONUS METRICS

 
     Pre-Bonus AEBITDA     Revenue     Leadership  

Levels

    % of Target      

Pre-Bonus

AEBITDA

($ in 1000’s)

 

 

 

   

Bonus

Amount ($)

 

 

    % of Target      

Revenue

($ in 1000’s)

 

 

   

Bonus

Amount ($)

 

 

    % of Target       Target ($)  

Maximum

    120       341,401       353,500       110       2,475,351       353,500       200       265,125  

Target

    100       284,501       176,750       100       2,250,319       176,750       100       151,500  

Threshold

    90       256,051       88,375       90.5       2,036,539       8,837       None       N/A  

 

MR. SCOTT’S BONUS METRICS ACHIEVED AND BONUS EARNED

 

Achieved

    87.8       277,567       155,210       50.4       2,138,719       89,095       190       287,850  

Total Bonus Earned: $532,155

 

   

% of Target Bonus Earned

under Financial

Component: 69.1%

 

 

 

   

    % of Target Bonus Earned    

under Leadership

Component: 190%

 

 

 

 

 

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MR. HENDERSON’S BONUS METRICS

 
     Pre-Bonus AEBITDA     Revenue     Leadership  

Levels

    % of Target      

Pre-Bonus

AEBITDA

($ in 1000’s)

 

 

 

   

Bonus

Amount ($)

 

 

    % of Target      

Revenue

($ in 1000’s)

 

 

   

Bonus

Amount ($)

 

 

    % of Target       Target ($)  

Maximum

    120       341,401       353,500       110       2,475,351       353,500       200       265,125  

Target

    100       284,501       176,750       100       2,250,319       176,750       100       151,500  

Threshold

    90       256,051       88,375       90.5       2,036,539       8,837       None       N/A  

 

MR. HENDERSON’S BONUS METRICS ACHIEVED AND BONUS EARNED

 

Achieved

    87.8       277,567       155,210       50.4       2,138,719       89,095       100       151,500  

Total Bonus Earned: $395,805

 

   

% of Target Bonus Earned

under Financial

Component: 69.1%

 

 

 

   

    % of Target Bonus Earned    

under Leadership

Component: 100%

 

 

 

 

 

MS. JACKSON’S BONUS METRICS

 
     Pre-Bonus AEBITDA     Revenue     Leadership  

Levels

    % of Target      

Pre-Bonus

AEBITDA

($ in 1000’s)

 

 

 

   

Bonus

Amount ($)

 

 

    % of Target      

Revenue

($ in 1000’s)

 

 

   

Bonus

Amount ($)

 

 

    % of Target       Target ($)  

Maximum

    120       341,401       225,750       110       2,475,351       197,531       200       169,313  

Target

    100       284,501       112,875       100       2,250,319       112,875       100       96,750  

Threshold

    90       256,051       56,438       90.5       2,036,539       5,644       None       N/A  

 

MS. JACKSON’S BONUS METRICS ACHIEVED AND BONUS EARNED

 

Achieved

    87.8       277,567       99,119       50.4       2,138,719       56,897       190       183,825  

Total Bonus Earned: $339,842

 

   

% of Target Bonus Earned

under Financial

Component: 69.1%

 

 

 

   

    % of Target Bonus Earned    

under Leadership

Component: 190%

 

 

 

LONG-TERM INCENTIVE COMPENSATION

In 2019, the Compensation Committee granted equity awards to each named executive officer and believes it serves as a key component of our named executive officer’s compensation package. The chart below reflects the aggregate grant date fair value, which we refer to as AGD Fair Value, of each equity award type granted to each named executive officer. For all equity awards granted in 2019, our Compensation Committee approved changes to all of our equity grant agreements for our named executive officers to (1) provide for “double trigger” vesting mechanics in the event of a change in control of the Company, and (2) allow for continued vesting of outstanding equity awards if a grantee terminates his or her employment after satisfying certain age and service time requirements, which the agreements refer to as “retirement.”

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.

 

         
Named Executive Officer  

      AGD Fair Value of

2019 TSR PRSU

Award ($)

    

AGD Fair Value of

2019 AEBITDA PRSU

Award ($)

    

AGD Fair Value of

2019 RSU Award ($)

    

Total AGD Fair Value

of 2019 Awards ($)

 
Susan R. Salka     989,992        1,155,016        1,237,828        3,382,836  
Brian M. Scott     302,982        353,489        353,489        1,009,959  
Ralph S. Henderson     302,982        353,489        353,489        1,009,959  
Denise L. Jackson     193,492        225,772        225,772        645,036  

TSR PRSUs

TSR PRSUs represented approximately 30% of the total 2019 equity grant value that was awarded to each named executive officer, based on the AGD Fair Value, and will be earned at the end of an approximately three-year performance period based on our stock performance against two measures: (1) a relative basis (which we refer to as Relative TSR) against a broader market (companies in the Russell 2000 Index at the beginning of the performance period) and (2) an absolute total shareholder return basis (which we refer to as Absolute TSR). We

 

 

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refer to the determination of our Relative TSR and Absolute TSR collectively as the TSR Measurement. The number of PRSUs earned if the Company’s Relative TSR exceeds the 50th percentile but its Absolute TSR is negative is capped at the target number of PRSUs granted. For each one percentile above the 25th percentile, an additional 3% of the PRSUs vest, and the maximum payout cannot exceed 175% if Absolute TSR is positive or 100% if the Absolute TSR is negative.

The table set forth below discloses the percentage of the 2019 target PRSUs that may be earned depending on the actual results of the Company’s TSR Measurement as of December 31, 2021.(4)

 

     

 

Relative TSR Percentile Rank

 

% of 2019 TSR

PRSUs Earned

if Absolute TSR Is  Negative(1)

 

 

% of 2019 TSR

PRSUs that Are Earned

if Absolute TSR Is Positive

 

<25.0% 0 0
25.0% 25.00 25.00
37.5% 62.50 62.50
50.0% 100.00 100.00
62.5% 100.00 137.50
75.0% 100.00 175.00

 

(1)

For each one percentile above the 25th percentile, an additional 3% of the TSR PRSUs will be earned if Absolute TSR is positive, and the maximum payout cannot exceed 175%. If Absolute TSR is negative, for each one percentile above the 25th percentile, an additional 1.5% of the TSR PRSUs will be earned up to the 50th percentile with the maximum payout of 100%.

Adjusted EBITDA PRSUs

In 2019, the Compensation Committee once again determined it best to dedicate a significant portion of the restricted stock units to focus our named executive officers on achieving a 13.3% adjusted EBITDA margin for 2021.(5) The number of shares that could ultimately be earned ranges from 0% to 200% of the target number of adjusted EBITDA margin PRSUs depending on actual adjusted EBITDA margin performance for 2021.

Time-Vested RSUs

Restricted stock unit grants, which we refer to as RSUs, granted in 2019 vest ratably on each of the first three anniversaries of the grant date. As it has done historically, the Compensation Committee elected to wait to consider a grant of RSUs for Ms. Salka for 2019 until the end of 2019 when it had better visibility of our year-end financial, operational and stock performance. Based on our financial, operational and stock performance in 2019, the Compensation Committee granted Ms. Salka 20,755 RSUs with an AGD Fair Value of $1,237,828 on December 16, 2019.

Aggregate Grant Date Fair Value

PRSUs represented 65% of the AGD Fair Value of all 2019 equity awards for our named executive officers, other than our CEO. Due to the timing of Ms. Salka’s RSU award in December 2019 (rather than January 2019), she received PRSUs that represented 37% of her total 2019 equity award value. To provide further clarity on our equity compensation practices, the chart below details the change of the AGD Fair Value of all 2019 equity awards granted to our named executive officers against the AGD Fair Value of all 2018 equity awards.

The 17% increase in our CEO’s AGD Fair Value in 2019 from 2018 is driven in part by the Company’s strong financial, operational and stock performance in 2019, as well as peer group and other compensation benchmarking. We believe that the AGD Fair Value of her equity awards placed her below the median among CEOs within our 2019 peer group for long-term incentive compensation. On an aggregate basis, the combined AGD Fair Value of our named executive officers’ equity awards increased 69% in 2019 from 2018.

 

(4) As set forth in the Grant of Plan-Based Awards Table, the target number of TSR PRSUs granted in 2019 for each named executive officer is as follows: (1) for Ms. Salka, 13,400; (2) for Mr. Scott, 4,101; (3) for Mr. Henderson, 4,101; and (4) for Ms. Jackson, 2,619.

(5) As set forth in the Grant of Plan-Based Awards Table, the target number of adjusted EBITDA PRSUs granted in 2019 for each named executive officer is as follows: (i) for Ms. Salka, 20,755; (ii) for Mr. Scott, 6,352; (iii) for Mr. Henderson, 6,352; and (iv) for Ms. Jackson, 4,057.

 

 

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Named Executive Officer  

AGD Fair Value of

2018 Equity Awards($)

   

AGD Fair Value of

2019 Equity Awards($)

                 Variance ($)      % Increase  
   
Susan R. Salka     2,888,030       3,382,836        494,806        17  
   
Brian M. Scott     1,000,046       1,009,959        9,913        1  
   
Ralph S. Henderson     1,000,046       1,009,959        9,913        1  
   
Denise L. Jackson     430,001       645,036        215,035        50  
   
Total     5,318,123       6,047,7903        729,667        69  

RESULTS OF OUR 2017 PERFORMANCE RESTRICTED STOCK UNIT AWARDS

2017 TSR PRSU Award TSR Measurement

On January 6, 2020, the Compensation Committee performed the TSR Measurement for the 2017 TSR PRSU awards. Our Relative TSR was at the 81st percentile of the Russell 2000 Index and our Absolute TSR was 73.45% during the measurement period from January 1, 2017 through December 31, 2019. Accordingly, each named executive officer received the maximum of his or her target amount of 2017 TSR PRSUs. Specifically, Ms. Salka, Mr. Scott, Mr. Henderson and Ms. Jackson earned 20,701, 7,245, 7,245 and 4,242 PRSUs, respectively.

2017 Adjusted EBITDA PRSU Award Measurement

On February 13, 2020, the Compensation Committee determined that our 2019 adjusted EBITDA margin equaled 12.5%. Accordingly, each named executive officer received 25% of his or her target amount of 2017 adjusted EBITDA margin PRSUs. Specifically, Ms. Salka, Mr. Scott, Mr. Henderson and Ms. Jackson earned 4,496, 1,574, 1,574 and 922 PRSUs, respectively.

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, our equity ownership requirements require the following our named executive officers and other executives to maintain the following:

 

 

Equity Ownership Requirements

 

 

Level

 

 

 

Proposed

 

 

 

Board of Directors

 

 

 

5x Annual Cash Retainer

 

 

Chief Executive Officer

 

 

 

5x Base Salary

 

 

Named Executive Officers

 

 

 

2x Base Salary

 

 

Other CEO Committee Members

 

 

 

1.5x Base Salary

 

 

 

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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 24, 2020, all of our named executive officers satisfy our equity ownership requirements.

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:

 

  (1)

all or any portion of the bonus and equity or cash incentive compensation received by such individuals during the 12-month period following the first public issuance or filing with the SEC (whichever first occurs) of the financial document embodying such defective financial statement; and

 

  (2)

any profits realized by such individuals from the sale of securities of the Company during that 12-month period.

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, which we refer to as the TCJA, was signed into law, Section 162(m) of the Internal Revenue Code generally disallowed a tax deduction to publicly held companies for compensation paid to certain executive officers in excess of $1 million per officer in any year that did not qualify as performance-based. We refer to the Internal Revenue Code as the Code.

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 year-end. The new rules generally apply to taxable years beginning after December 31, 2017, but do not apply to remuneration provided pursuant to a written binding contract in effect on November 2, 2017 that is not modified in any material respect after that date.

Overview of Our 2020 Executive Compensation Program

 

Overall, the Compensation Committee believes the Company performed well during 2019 and continued to execute on the Company’s long-term strategic plan. We achieved year-over-year consolidated revenue and consolidated adjusted EBITDA growth of approximately 4% and 3%, respectively. Performance of our common stock continued its strong performance in 2019, delivering a 10% price appreciation. The Compensation Committee believes it has designed the 2020 compensation structure to provide for important short- and long-term performance components that are aligned with shareholders, consistent with the market environment and tailored specifically to us.

BASE SALARY

The Compensation Committee approved the annual base salaries for the named executive officers for 2020 as follows:

 

       
Named Executive Officer     

2019

Salary ($)

    

2020

                Salary  ($)

    

%

                 Increase

 
Susan R. Salka        1,000,000        1,030,000        3  
Brian M. Scott        505,000        520,000        3  
Ralph S. Henderson        505,000        505,000        0  
Denise L. Jackson        430,000        440,000        2  

 

 

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The base salaries of our named executive officers reflect a 0% to 3% increase. The 2020 base salary for our named executive officers is based on executive compensation peer group benchmarking analyses and the Compensation Committee’s recognition that the Company’s 2019 organic growth and core business performance did not meet targeted expectations and its commitment to maintain a pay for performance environment.

BONUS PLAN

Target Bonus. In January 2020, the Compensation Committee reviewed the target bonus level for each named executive officer, which we express as a percent of annual base salary. After careful consideration, the Compensation Committee determined that the 2020 bonus target as a percentage of salary should not be increased for our named executive officers. We set forth below the 2020 target bonuses for each named executive officer as a percentage of salary, which remained unchanged from 2019.

 

     
Named Executive Officer   

2019 Bonus

Target

  (% of Salary)  

  

2020 Bonus

Target

  (%of Salary)  

Susan R. Salka        120        120
Brian M. Scott        100        100
Ralph S. Henderson        100        100
Denise L. Jackson        75        75

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 2019. The target goals for each of the financial metrics are consistent with the targets under our 2019 annual operating plan and generally require growth that exceeds our estimate of anticipated industry performance. For our CEO, we believe her 2019 bonus target in dollar amount falls near the median among CEOs within our 2019 peer group.

LONG-TERM EQUITY INCENTIVES

The Compensation Committee continues to believe aligning its pay for performance philosophy, goals and objectives is the foundation upon which it evaluates its annual long-term incentive award strategy. In January 2020, it approved the issuance of a new long-term incentive award that vests at the end of a three year-period but accrues certain value annually during each year of the award based on the Company’s annual adjusted EBITDA growth rate. We refer to these awards as adjusted EBITDA growth PRSUs. In 2020, these adjusted EBITDA growth PRSUs replaced the use of the adjusted EBITDA margin PRSUs, which vested after three years based on the Company’s adjusted EBITDA margin at the end of the last year of the award. The Compensation Committee believes that the adjusted EBITDA growth PRSUs allows management to effectively manage the Company’s adjusted EBITDA growth objectives over a three-year period and serves as a talent retention and engagement tool by allowing a portion of the awards to accrue each year with the vesting occurring on the third anniversary of the grant date.

In 2020, the Compensation Committee continued to utilize a combination of (1) TSR PRSUs, (2) time-vested RSUs and (3) adjusted EBITDA growth PRSUs, which replaced adjusted EBITDA margin PRSUs. The Compensation Committee continued to target an allocation of 30% TSR PRSUs, 35% adjusted EBITDA growth PRSUs and 35% time-vested RSUs (as a percentage of the AGD Fair Value of all 2020 equity awards) in 2020. For each named executive officer, other than Ms. Salka, approximately 65% of the AGD Fair Value of the January 2020 equity awards consisted of PRSUs, and the remaining 35% consisted of time-vested RSUs. All of Ms. Salka’s January 2020 equity awards were PRSUs, as the Compensation Committee will make their decision on her equity grant of time-vested RSUs in the fourth quarter of 2020 when it has better visibility of the Company’s 2020 performance.

 

 

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    EXECUTIVE COMPENSATION DISCLOSURE       

       

 

EXECUTIVE COMPENSATION DISCLOSURE

Our named executive officers for the 2019 fiscal year are listed below. We provide information regarding the business experience, qualifications and affiliations of our named executive officers who are not directors below. For Ms. Salka’s experience, qualifications and affiliations, please see page 15 above.

 

   
Name Executive Officer    Position
   
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

Our Non-Director Executive Officers

 

 

 

 

LOGO

   

Ralph S. Henderson

 

   

 

Age: 59

President, Professional

Services and Staffing

Business Experience,

Qualifications and Affiliations:

Mr. Henderson joined us as President, Nurse Staffing in

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. Mr. Henderson holds a Bachelor of Science degree in Business Administration from Northern Arizona University.

LOGO

   

Denise L. Jackson

 

   

Age: 55

Chief Legal Officer and

Corporate Secretary

Business Experience,

Qualifications and Affiliations:

Ms. Jackson joined us as General Counsel and Vice President of Administration in October 2000.

Ms. Jackson is responsible for our legal, corporate governance, compliance, ethics, risk management, real estate and corporate social responsibility functions. We appointed her as our Secretary in May 2003 and Senior Vice President in November 2004. From 1995 to September 2000, Ms. Jackson worked for The Mills Corporation serving as Vice President and Senior Counsel from 1998 to 2000. Ms. Jackson serves on the Board of Tractor Supply Company, the largest retailer store chain of rural lifestyle products in the United States, is Chair of its Corporate Governance Committee and is a member of its Audit Committee. Ms. Jackson holds a Juris Doctorate degree from the University of Arizona, a Masters of Public Health from The George Washington University and a Bachelor of Science in Liberal Studies from the University of Arizona. Ms. Jackson is licensed as an attorney in California, the District of Columbia, Arizona and New York.

 

 

 

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LOGO

   

Brian M. Scott

 

   

Age: 50

Chief Financial Officer, Chief

Accounting Officer and

Treasurer

Business Experience,

Qualifications and Affiliations:

Mr. Scott joined us in December 2003. We appointed him Chief

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 a mid-sized CPA firm. He also served as controller of a biotechnology company. Mr. Scott serves on the Board Community Care Partners, a private equity-backed chain of urgent care centers in Oregon. He also serves on the non-profit boards of the YMCA of San Diego County and the RC Baker Foundation. Mr. Scott is a certified public accountant (inactive) in California, and received his bachelor’s degree in accounting from California Polytechnic State University, San Luis Obispo and a Masters of Business Administration from the McCombs School of Business at the University of Texas at Austin.

 

 

Summary Compensation Table

 

 

The following table shows the compensation earned or accrued by our named executive officers for the three fiscal years ended December 31, 2019, 2018 and 2017. 

 

               
Named Executive Officer
and Position
   Year    

Salary

($) (1)

   

Bonus

($)  

   

Stock

Awards

($) (2)

   

Non-Equity

Incentive Plan

Compensation

($) (3)

   

All Other

Compensation

($) (4)

    Total ($)  
   
Susan R. Salka      2019       996,154             3,382,836   (5)      1,120,527       127,289       5,626,806  
   
PEO,(6) President & CEO      2018       897,592             2,888,030   (7)      1,105,721       197,689       5,089,032  
   
 

 

     2017       835,577             2,299,955   (8)      548,078       197,357       3,880,967  
   
Brian M. Scott      2019       504,423             1,009,959   (10)      532,155       60,416       2,106,953  
   
PFO,(9) CFO, CAO & Treasurer      2018       489,038             1,000,046   (11)      480,324       50,941       2,020,349  
   
 

 

     2017       464,423             699,969   (12)      235,174       84,643       1,484,209  
   
Ralph S. Henderson      2019       504,423             1,009,959   (10)      395,805       93,647       2,003,834  
   
President, Professional Services & Staffing      2018       489,038             1,000,046   (11)      480,324       113,605       2,083,013  
   
 

 

     2017       464,423             699,969   (12)      235,174       75,587       1,475,153  
   
Denise L. Jackson      2019       429,212             645,036   (13)      339,842