SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section
14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
|☑||Filed by the Registrant||☐||Filed by a party other than the Registrant|
|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 under §240.14a-12|
AMN Healthcare Services, Inc.
(Name of Registrant as Specified In Its
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
|PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY):|
|☑||No fee required|
|☐||Fee paid previously with preliminary materials|
|☐||Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11|
We strive to be recognized as the most trusted, innovative, and influential force in helping healthcare organizations provide a quality patient care experience that is more human, more effective, and more achievable.
|the best talent and insights to help healthcare organizations optimize their workforce||healthcare professionals opportunities to do their best work towards quality patient care||a values-based culture of innovation where our team members can achieve their goals|
Helping to achieve personal and professional goals every day.
|CORPORATE CULTURE FOCUSED ON CORE VALUES|
|Respect, Passion, Continuous Improvement, Trust, Customer Focus, and Innovation|
|We value everyone’s unique contribution, and as such, we treat everyone with the highest level of personal and professional courtesy, consideration, and care.||Our relationships are honest, authentic, and open. We pride ourselves on the fact that we keep our commitments. Our word is our promise.||We put people first, whether the customer is internal or external. We strive to go above and beyond in what we bring to every professional relationship, not just meeting, but exceeding, expectations at every turn.|
|We love what we do – and it shows. Passion makes the difference between just doing something – and doing it well. It’s the fire that drives our purpose and our daily lives.||We know that even our best efforts and our most robust solutions can always be better. We never settle for ‘good enough’ and constantly seek opportunities and proactively embrace changes to improve.||Innovation is a mindset. We work to stay future-focused and committed to bringing new ideas to life that generate differentiated value for everyone.|
A LETTER FROM OUR INDEPENDENT
We are proud that we rose to the challenges 2021 presented and solidified our role in providing total talent solutions to our healthcare clients that are empowering the future of care.
Dear AMN Shareholders,
On behalf of the Board and AMN Healthcare, thank you for the confidence you placed in us during this challenging and extraordinary time. We have strategically evolved and built AMN into the largest, and one of the most dynamic and consistently high performing companies in our industry. Despite unprecedented challenges, we remain focused on being the total talent solutions partner for our clients, with an unparalleled ability to serve the needs of large, diverse health systems and multiple care settings. More importantly, we have created a culture that puts people and values first. Just like our clients and healthcare professionals, our team members are working extraordinarily hard to do their part in this challenging environment.
As the COVID-19 pandemic continued for a second straight year, we remained committed to support our healthcare professionals, clients, team members, supplier partners, and communities. Our COVID-19 response structure adapted to the rapidly evolving healthcare landscape to address both the ongoing and newly identified needs of our stakeholders. Our 24/7 COVID-19 crisis hotline continues to help our healthcare professionals, healthcare facilities, and supplier partners navigate through the uncertain and constantly changing environment. We also continued to ensure that our healthcare providers who are quarantined or become infected with COVID-19 have access to appropriate medical care and much needed resources such as mental health and general wellness support.
With demand for healthcare professionals once again hitting record levels, the Company deployed more than 95,000 healthcare professionals in 2021. To support this unprecedented demand, we hired more team members than any prior year, including new additions to our leadership team, to improve our ability to foster a values-based culture, care for our team members, and manage sustainable growth. We are proud that we rose to the challenges 2021 presented and solidified our role in providing total talent solutions to our healthcare clients that are empowering the future of care. The AMN team continues to commit our talent and efforts into making a positive impact during this critical time.
As the nation’s leader in total talent healthcare solutions, we have established a performance and values-based culture that aligns our business strategy with the development of our greatest assets, our people. We believe that our diverse workforce and inclusive culture drives innovation and creates better outcomes that make us a leader in our industry. Throughout 2021 we continued to focus on enhancing diversity, equity, equality, and inclusion in our workplace, workforce, and marketplace. As of December 31, 2021, 67% of our corporate team members were women and 40% from historically underrepresented groups.
To continue to meet the diverse needs of our stakeholders, we advanced our commitment to corporate social responsibility by increasing our diverse and small business supplier spend in 2021 to $378M, continuing to support diverse businesses through our vendor development program, funding minority-owned business certifications, and committing $8.9M to non-profits focused on advancing social justice, DEI, health equity, and resilience in healthcare. We also developed a 3-year ESG Roadmap aligned with the United Nations’ Sustainable Development Goals and linked to our business strategy.
|2022 Proxy Statement||1|
BOARD COMPOSITION & REFRESHMENT STRATEGY
As we focus on being a leader in total talent solutions, we recognize the critical role that our Board’s composition plays in our ability to execute our long-term strategy and strategic initiatives. We maintain an engaged, diverse, and deeply knowledgeable Board, with a balance of tenured and relatively new directors. Currently, we have an average aggregate tenure for independent board directors of approximately eight years. We are proud to be among a unique group of companies with 56% female representation on our Board and 33% racial diversity. To support our refreshment strategy, the Board has appointed a new director in each of the last four years. In December 2021, we appointed Mr. Jorge A. Caballero, as a new director to continue to strengthen the effectiveness of our Board. The addition of Mr. Caballero who is an accomplished global business executive with a strong financial background and experience in mergers and acquisitions, plays an integral role in our long-term growth strategy.
On March 10, 2022, after a successful 32-year career with AMN Healthcare, including 17 years as Chief Executive Officer, we announced that Susan R. Salka intends to retire by the end of the year. Ms. Salka intends to continue to serve as President and Chief Executive Officer and as a member of the Board until a successor is appointed. It has been my great honor and privilege to serve and lead with Ms. Salka, and her authenticity and genuine caring for others have left an indelible impression on me. The Board is grateful to Ms. Salka for her outstanding leadership of AMN Healthcare and looks forward to continuing to build upon the enduring, impactful organization she and the team have created.
These topics and other key issues of shareholder interest are discussed further within this proxy statement and will be addressed at our 2022 Annual Meeting of Shareholders on Friday, May 6, 2022, at 10:30 a.m. Central Time. To prioritize the health and well-being of our meeting participants, we will conduct our 2022 meeting virtually. We cordially invite you to join us and have included instructions for participating in our virtual shareholder meeting under the General Information Section of this proxy statement.
DOUGLAS D. WHEAT
Chairman of the Board
As the nation’s leader in total talent healthcare solutions, we have established a performance and values-based culture that aligns our business strategy with the development of our greatest assets, our people.
|NOTICE OF ANNUAL MEETING OF SHAREHOLDERS||4|
|OUR STRATEGY AND TALENT SOLUTIONS||5|
|PROXY VOTING ROADMAP||8|
|Proposal 1: Election of Our Directors||13|
|AMN Healthcare Board of Directors||13|
|Evaluation of Board Composition & Director Nomination Process||16|
|Board Tenure Policy||17|
|Shareholder Recommendations and Nominations||17|
|Board and Committee Self-Evaluation Process||18|
|Our Corporate Governance Program||25|
|Shareholder Corporate Governance Outreach||25|
|Enterprise Risk Oversight||26|
|ESG Oversight and Strategy||26|
|Policies and Procedures Governing Conflicts of Interest and Related Party Transactions||32|
|Board and Committee Structure||33|
|Board Leadership Structure||33|
|Committees of the Board||34|
|Meetings and Attendance||38|
|Director Compensation and Ownership Guidelines||39|
|Director Cash Compensation||39|
|Director Equity Compensation||40|
|Director Compensation Table||40|
|Director Equity Ownership Requirement||41|
|Proposal 2: Advisory Vote on Executive Compensation||44|
|Compensation Committee Report on Executive Compensation||45|
|2021 Pay and Performance||45|
|Performance Goals for 2022||46|
|Compensation Discussion and Analysis||46|
|Executive Compensation Practices||48|
|Principal Components of Our Compensation Program||53|
|Our Compensation Determination Process||55|
|Our 2021 Compensation Program and Results||58|
|Additional Compensation Practices||66|
|Our 2022 Executive Compensation Program||67|
|Executive Compensation Disclosure||69|
|Summary Compensation Table||69|
|Grants of Plan-Based Awards||71|
|Outstanding Equity Awards at Fiscal Year End||73|
|Option Exercises and Stock Vested||75|
|Nonqualified Deferred Compensation||75|
|Termination of Employment and Change in Control Arrangements||76|
|CEO Pay Ratio||79|
|Proposal 3: Adoption of the AMN Healthcare Employee Stock Purchase Plan||80|
|AUDIT COMMITTEE MATTERS||84|
|Proposal 4: Ratification of the Selection of Our Independent Public Accounting Firm||84|
|Selection and Engagement of KPMG as Our Independent Registered Public Accounting Firm||84|
|Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees||84|
|Report of the Audit Committee||84|
|Proposal 5: Shareholder Proposal||86|
|SECURITY OWNERSHIP AND OTHER MATTERS||88|
|EXHIBIT A TO PROXY STATEMENT-NON-GAAP RECONCILIATION FOR CONSOLIDATED ADJUSTED EBITDA FOR PURPOSES OF 2021 BONUS ACHIEVEMENT||95|
|EXHIBIT B EMPLOYEE STOCK PURCHASE PLAN||97|
|2022 Proxy Statement||3|
|DATE AND TIME||LOCATION||RECORD DATE|
|May 6, 2022||www.virtualshareholdermeeting.com/AMN2022||March 14, 2022|
|10:30 a.m. (Central Time)|
|1. To elect nine directors to the Board of Directors||13|
|2. To approve, by non-binding advisory vote, the compensation of our named executive officers||44|
|3. To approve the AMN Healthcare Employee Stock Purchase Plan||80|
|4. To ratify the appointment of KPMG LLP to be our independent registered public accounting firm for the fiscal year ending December 31, 2022||84|
|5. To consider a shareholder proposal if properly presented at the 2022 Annual Meeting||86|
We will also take action upon any other business as may properly come before the 2022 Annual Meeting and any adjournments or postponements of that meeting.
HOW TO VOTE YOUR SHARES
|ONLINE||CALL||DURING THE MEETING|
|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 May 5, 2022.||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 May 5, 2022.||If you received printed materials, please mark, date and sign your proxy card per the instructions and return it by mail in the pre-addressed envelope provided. The proxy card must be received prior to the 2022 Annual Meeting to be counted.||You can also cast your vote at our Virtual Shareholder 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.|
YOUR VOTE IS IMPORTANT. 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.
|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 Environmental, Social, and Governance strategy by reducing our environmental footprint as well as reducing the costs associated with printing and distributing our proxy materials. On or about March 24, 2022, 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 2021 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 2021 Annual Report.|
MARCH 24, 2022
By Order of the Board of Directors,
DENISE L. JACKSON
CHIEF LEGAL OFFICER AND CORPORATE SECRETARY
We are the leader and innovator in total talent solutions for the healthcare sector in the United States. We are passionate about all aspects of our mission:
|Purpose-Driven, Values-Based Organization Committed to Serving All Our Stakeholders||Leader and Innovator in Total Talent Solutions for Healthcare; Uniquely Positioned to Serve Growing Health Systems and Diverse Care Settings||Experienced, Diverse and Deep Leadership Team Driving Tech- Enabled Innovation that Benefits Healthcare Professionals and Clients|
Our solutions enable our clients to manage and optimize their workforce, simplify staffing complexity, increase efficiency, and elevate the patient experience. Our comprehensive suite of talent solutions provides management, staffing, recruitment, language services, technology, telehealth and virtual care management, analytics, and related services to build and manage all or part of our clients’ healthcare workforce needs. We offer temporary, project, and permanent career opportunities to our healthcare professionals, from nurses, doctors, and allied health professionals to healthcare leaders and executives in a variety of settings across the nation to help them achieve their personal and professional goals.
|NURSE & ALLIED SOLUTIONS||PHYSICIAN & LEADERSHIP SOLUTIONS||TECHNOLOGY & WORKFORCE SOLUTIONS|
Revenue Cycle Solutions
of revenue from these segments is derived from managed services programs (MSPs)
|2022 Proxy Statement||5|
Our Strategy and Talent Solutions
OUR BUSINESS STRATEGY
Our strategy is designed to support growth in the number and size of customer relationships and expansion of the markets we serve. Driving increased adoption of our existing talent solutions through cross-selling will deepen and broaden our customer relationships. We will continue to innovate, develop, and invest in new, complementary service and technology solutions to our portfolio that optimize and manage our clients’ workforce, enhance the patient experience, better engage our talent network and expand into different healthcare delivery settings. We expect this will enable us to expand our strategic customer relationships, while driving more recurring revenue with an improved margin mix that will be less sensitive to economic cycles.
2021–2022 ESG HIGHLIGHTS
We aim to deliver long-term sustainable value to our stakeholders by promoting a diverse, inclusive, and supportive culture that inspires innovation and fosters trust at all levels of our organization and within the communities we serve. Our work focuses on investing and developing in our talent and communities to foster sustainable economic and social development that positively impacts our stakeholders and environment while advancing the quality of our company through engagement in the world around us. We have aligned our ESG strategy with the following United Nations’ Sustainable Development Goals, which we discuss in detail on page 27 of this Proxy Statement and within our ESG Report that we anticipate publishing in March 2022.
|We strive to be an ESG beacon in the healthcare and staffing industries, driving outsized shared value||Focus & set ambitious goals Minimize footprints & maximize handprints Collaborate with client and industry partners to accelerate change Embed ESG in the core of our business||A healthy, just, equitable, and sustainable world where all can thrive|
|Health & Wellness For ALL|
|Pillar 1||Pillar 2||Pillar 3|
|Advancing Health & Wellness for our Team Members, Healthcare Professionals, and our Communities||Driving Diversity, Equality, Equity & Inclusion Throughout our Value Chain and Industry||Catalyzing a Sustainable & Regenerative Future|
Our Strategy and Talent Solutions
|CORPORATE GOVERNANCE||2021 ESG ACCOMPLISHMENTS|
● Developed 3-Year ESG Roadmap aligned with UN Sustainable Development Goals and linked to our 3-Year Business Strategy
● Expanded our Employee Resource Groups to 8 groups engaging 25% of our corporate team members
● Established Sustainability Champions to serve alongside our Diversity Champions and Community Champions to advance our ESG program
● Calculated Scope 1 and Scope 2 GHG Emissions
|HUMAN CAPITAL MANAGEMENT||2021 SOCIETAL IMPACT|
● Committed $8.9 million to non-profits focused on advancing social justice, diversity, equality, and inclusion, health equity, and resilience in healthcare
● Increased 2021 Diverse Supplier Spend with Small and Diverse Businesses to approximately $370M
● Expanded our Vendor Mentor Program and Funding of Minority-Owned Business Certifications
|2021 - 2022||2021 - 2022||2021 - 2022||2022||2021||2021|
of New York
|Top 3% of Public|
for Gender Parity
|2022 Proxy Statement||7|
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 24, 2022.
ELECTION OF OUR DIRECTORS
OUR BOARD RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
on page 13.
DIRECTORS AT A GLANCE
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 addition, Jorge A. Caballero, who was appointed to the Board on December 14, 2021. The addition of Mr. Caballero, who is an accomplished global business executive with extensive financial and leadership experience, supports our ongoing Board refreshment strategy. His audit, financial and risk management background and experience in mergers and acquisitions, will be beneficial to our growth strategy and commitment to transparency. As announced on March 10, 2022, Susan R. Salka intends to retire by the end of the year ending December 31, 2022, but will stand for reelection to AMN’s Board and remain as a director and Chief Executive Officer until a successor is hired. A list of all director nominees are reflected below. Additional information for each nominee can be found under “Election of Directors (Proposal 1)” beginning on page 13.
|Director||Other Public||Board Committees|
JORGE A. CABALLERO INDEPENDENT
Former Managing Partner
of Deloitte’s Business Tax Services
MARK G. FOLETTA INDEPENDENT
Former Executive Vice
President and Chief Financial Officer,
TERI G. FONTENOT INDEPENDENT
CEO Emeritus and Former CEO of Woman’s Hospital
R. JEFFREY HARRIS INDEPENDENT
Former Of Counsel at Apogent Technologies, Inc.
DAPHNE E. JONES INDEPENDENT
Former Senior Vice President – Digital/Future of Work, GE Healthcare
MARTHA H. MARSH INDEPENDENT
Former President and CEO Stanford Hospital and Clinics
SUSAN R. SALKA
President and Chief Executive
ADMIRAL DR. SYLVIA TRENT-ADAMS,
EVP & Chief Strategy
DOUGLAS D. WHEAT (CHAIRMAN) INDEPENDENT
Managing Partner, Wheat Investments, LLC
|Audit||Audit Committee||Gov||Corporate Governance and Compliance Committee||l||Chair|
|Comp||Compensation Committee||Exec||Executive Committee||l||Member|
Proxy Voting Roadmap
CURRENT BOARD COMPOSITION
|Average 8 years||Average 65 years||56% Female||33% BIPOC||8/9 Independent Directors|
The illustration below summarizes the key experience, qualifications, and attributes for each director nominee and highlights the balanced mix of experience of our Board as a whole. This is a high-level summary that is not intended to be an exhaustive list of each director nominee’s skills or contributions to the Board.
OUR KEY CORPORATE GOVERNANCE PRACTICES
|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.|
|Board Diversity / “Rooney Rule”||Our Board has committed that when considering candidates to fill an open seat on the Board, the pool of candidates from which Board nominees are chosen includes candidates from historically underrepresented communities.|
|Director Resignation Policy||Our Director Resignation Policy requires an incumbent director to tender their resignation if they receive more votes “Against” their election than votes “For” their election in an uncontested election.|
|Board Aggregate Tenure Policy||Our Board has committed that it will maintain an average tenure for independent board directors of less than ten years. As of December 31, 2021, our average board tenure was 8.0 years.|
|No “Poison Pill”||We do not have a shareholder 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.|
|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 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 shareholder feedback when appropriate.|
|Human Rights Policy||We established a Human Rights Policy because it is the right thing to do and demonstrates our core values and commitment to our relationships with our clients, team members, vendors, and communities.|
|2022 Proxy Statement||9|
Proxy Voting Roadmap
ADVISORY VOTE ON EXECUTIVE COMPENSATION
OUR BOARD RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
on page 44.
OUR FINANCIAL PERFORMANCE
|(1)||More information on adjusted EBITDA, which refers to our adjusted earnings before interest, taxes, depreciation and amortization, and a reconciliation of our 2021 net income to adjusted EBITDA can be found at Exhibit A to this proxy statement (page 95).|
OUR TOTAL RETURN VS. RUSSELL 2000
|3 YEAR TOTAL RETURN (%)||5 YEAR TOTAL RETURN (%)||10 YEAR TOTAL RETURN (%)|
Proxy Voting Roadmap
CEO COMPENSATION PAY MIX
The illustration below provides a summary of the components of the compensation paid to our Chief Executive Officer.
PAY FOR PERFORMANCE ALIGNMENT
|CEO COMPENSATION VS. REVENUE||CEO COMPENSATION VS. ADJUSTED EBITDA|
CONSISTENTLY HIGH SAY-ON-PAY RESULTS
In 2021, we received 93% of votes in favor of our Say-on-Pay proposal. Since 2014, our Say-on-Pay results have averaged 96%, which we believe reflects our pay-for-performance philosophy and level of engagement with our shareholders.
|2022 Proxy Statement||11|
Proxy Voting Roadmap
KEY EXECUTIVE COMPENSATION PRACTICES
|Executive Compensation Philosophy||Commitment to equal pay principles and a values-based culture to which leaders are held accountable through a portion of their annual cash incentive award.|
|Balanced Approach to Performance-based Pay||Performance-based awards are tied to the achievement of financial objectives, including revenue, adjusted EBITDA, adjusted EBITDA margin and total shareholder return, as well as strategic leadership and human capital management 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 2021, approximately 86% of our CEO’s target compensation was variable and at risk.|
|Equity Ownership Guidelines|
CEO 5x salary
Named executive officers 2x salary
Other members of the CEO Committee (CEO’s direct reports) 1.5x salary
|“Double-Trigger” Change-in-Control Arrangements||Executive equity and severance agreements include “double-trigger” mechanisms.|
APPROVAL OF AMN HEALTHCARE EMPLOYEE STOCK PURCHASE PLAN
OUR BOARD RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
on page 80.
RATIFICATION OF THE SELECTION OF OUR INDEPENDENT PUBLIC ACCOUNTING FIRM
OUR BOARD RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
on page 84.
OUR BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
on page 86.
Nine directors are to be elected at our 2022 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. As announced on March 10, 2022, Susan R. Salka intends to retire by the end of the year ending December 31, 2022, but will stand for reelection to AMN’s Board and remain as a director and Chief Executive Officer until a successor is hired.
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 nine nominees listed below. Upon the recommendation of the Board’s Corporate Governance and Compliance Committee (the “Governance and Compliance Committee”), the Board has nominated for election the nine 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. We believe we have a slate of director nominees that are well-positioned to represent our shareholders and oversee the Company’s strategy, business operations and financial strength.
|THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” EACH OF THE DIRECTOR NOMINEES|
The Board believes that incumbent 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 and believes that our directors should satisfy several qualifications, including but not limited to, demonstrated integrity, the director’s overall engagement in board activities, the results of the annual Board evaluation and other attributes that are discussed further in our Corporate Governance Guidelines (the “Governance Guidelines”) and in the “Evaluation of Board Composition and Director Nomination Process” section below.
DIRECTOR NOMINEE SNAPSHOT
The Board also endeavors to represent a range of characteristics, skills and experiences in areas that are relevant to and contribute to the Board’s oversight of the Company’s strategic objectives. Following the biographical information for each director nominee, we describe the key experiences, qualifications, skills and attributes the director nominee brings to the board that, for reasons discussed in the chart below, are important to our businesses and strategic objectives. The Board considered these key experiences, qualifications, skills and attributes and the nominees’ other qualifications in determining to recommend that they be nominated for election.
|2022 Proxy Statement||13|
We generally seek directors who have knowledge of and experience in the healthcare industry, which is useful in understanding the needs, regulatory requirements and complexities of our clients and healthcare professionals.
We believe that directors who have served in senior leadership positions are important because they have the experience and perspective to analyze, shape and oversee our strategy and the growth and preservation of shareholder value.
MERGERS & ACQUISITIONS
We believe that our ability to achieve our long-term growth objectives will require a combination of organic growth and growth by acquisition. We believe that M&A expertise on the Board provides valuable insight and oversight of our growth strategies and achievement of financial goals.
AMN is committed to strong financial discipline, effective allocation of capital and accurate disclosure practices. We believe that financial expertise on the Board is instrumental to our success.
We operate in a constantly changing and increasingly complex regulatory environment. Directors with regulatory compliance oversight and enterprise risk management experience play an important role in the Board’s ability to oversee our enterprise risk management program and legal and compliance risks.
We operate in a changing healthcare industry. State and federal government experience and an understanding of policy development enhance the Board’s ability to provide effective oversight of government policy and regulatory risk.
Our business has become increasingly complex as we have accelerated our digital transformation and expanded our service offerings to include more telehealth and technology related solutions. This digital transformation requires a sophisticated level of technology resources and infrastructure as well as technological expertise, and, accordingly, we believe digital transformation expertise on the Board contributes to our success.
SKILLS AND EXPERIENCE
|MERGERS & ACQUISITIONS|
|African American or Black|
|Hispanic or Lantinx|
|2022 Proxy Statement||15|
Our Governance and Compliance Committee understands the vital role that a strong board composition with a diverse set of skills and continuous refreshment plays in effective oversight. The Committee is committed to maintain a diverse board to effectively manage complex corporate issues by leveraging different experiences to support the Company’s long-term objectives and business strategy. With this purpose in 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, and genders.
As part of the Board’s refreshment strategy and director candidate identification and nomination processes, the Governance and Compliance Committee actively and continuously evaluates its collective composition to identify and prioritize director characteristics, skills, and experiences prior to nominating a new director candidate to the Board for review, approval and appointment. Below is an illustration of the Governance and Compliance Committee’s regular Board refreshment and director candidate identification process.
When assessing and prioritizing desired characteristics, skills and backgrounds, the Governance and Compliance Committee considers, among other things, the Board’s current skill set, the Company’s long-term strategic plan and objectives, shareholder discussions, current and past board service, commitment to corporate social responsibility and the director feedback provided in connection with the Board’s annual evaluation process.
The Governance and Compliance Committee then establishes a diverse pool of potential director candidates who possess the desired characteristics, skills, and experiences; the director candidate slates are identified from various databases and sources, including recommendations from shareholders, management and directors, consultants, and industry experts. The Governance and Compliance Committee may also engage a third party to conduct or assist with the search or evaluation. The Governance and Compliance Committee regularly evaluates its potential candidate pool and adds and eliminates individuals based on factors such as candidates’ professional affiliations and availability, director retirements, changing market conditions or strategic objectives and/ or newly considered enterprise risks. When considering candidates to fill an open seat on the Board, the Corporate Governance and Compliance Committee ensures that the pool of candidates from which Board nominees are chosen includes candidates from historically underrepresented groups who would bring diversity to the Board. Any search firm or third-party consultant asked to provide an initial list of potential candidates is also required to include such candidates.
The Board has appointed a new director in each of the last four years. All four new directors have significantly added to the Board’s diversity of skills, background and experience and strengthened its ability to support and oversee the Company’s long-term strategic objectives. According to the Equilar Gender Diversity Index, only 3% of companies included in the Russell 3000 achieved gender parity on their corporate boards in 2021, and our Board is proud to belong to this unique group of companies. In recognition of this accomplishment, AMN was honored by the Women’s Forum of New York as a national leader with 56% female corporate board representation. In addition, 67% of our Board is diverse from a gender, race, or ethnicity standpoint.
|JULY 2018||SEPTEMBER 2019||OCTOBER 2020||DECEMBER 2021|
|Daphne E. Jones –||Teri G. Fontenot –||Sylvia Trent-Adams –||Jorge A. Caballero –|
|Experience with strategic, entrepreneurial, and global use technologies in the healthcare sector has been instrumental to the Company’s digital transformation and growth strategies.||Experience in healthcare leadership, corporate finance, economic policy and healthcare policy has furthered the Company’s long-term capitalization strategy and ability to navigate the recent consolidation trends among healthcare delivery organizations.||Experience in directing and coordinating major federal health programs and developing policy and legislative priorities has made a positive impact on the Company’s continued COVID-19 response and its client and clinician engagement and retention strategies.||Accomplished global executive with extensive experience in audit, financial, risk management and mergers and acquisitions, all of which will be beneficial to our growth strategy|
BEYOND THE BOARDROOM
Our director onboarding process is designed to provide new directors with information, context, and perspectives that enables new directors to effectively contribute to the Board’s work. As part of the process, new directors have individual meetings with each of our current directors, including specific committee-focused meetings with the chair of each committee. In addition to providing new directors with a library of resources that includes governance, finance and core background documents, key business executives and functional leaders from all across the organization meet with new directors to increase their understanding of AMN’s businesses, operations, culture and values. Each new director is also assigned an experienced AMN board member as a mentor to coach and share feedback, provide perspective on boardroom activities and dynamics, help with meeting preparation, and act as a resource between meetings. Post-orientation, periodic briefing sessions are also provided to members of the board on subjects that would assist them in discharging their duties.
Our Board’s aggregate tenure policy reflects its commitment to consistently evaluate the composition of our Board to ensure that it collectively possesses the experience, skills, knowledge, and level of engagement necessary to serve the best interests of our shareholders. This policy, which is set forth below, was 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 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 value as the Company evolves. To achieve this balance, 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 average aggregate tenure for our Board’s independent directors will be approximately 8 years.
The Governance and Compliance Committee considers shareholder recommendations of qualified director candidates when such recommendations are submitted in writing to the Company’s Corporate Secretary at 8840 Cypress Waters Blvd., Suite 300, Dallas, Texas 75019 Attn: Denise L. Jackson, Chief Legal Officer and Corporate Secretary. When evaluating any such shareholder recommendations, the Governance and Compliance Committee uses the evaluation methodology that is described in the “Evaluation
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of Board Composition & Director Nomination Process” above. To have a director nominee considered for election at our 2023 Annual Meeting of Shareholders, a shareholder must submit the nomination in writing to the attention of our Corporate Secretary and also satisfy the requirements set forth in our Bylaws regarding shareholder director no later than February 5, 2023 and no sooner than January 6, 2023, assuming the date of the 2023 Annual Meeting of Shareholders does not change by more than 30 days from the first anniversary of the prior year’s annual meeting. To have a director nominee included in our 2023 proxy statement for election, a shareholder must submit the nomination in writing to the attention of our Corporate Secretary and also satisfy the requirements set forth in the “proxy access” provisions of our Bylaws no earlier than October 25, 2022 and no later than November 24, 2022.
The Company received no recommendations for director nominees or director nominations from any shareholder for the director election to be held at the Annual Meeting.
In line with our value of continuous improvement, each director conducts an evaluation of the performance of the Board and each committee for which they serve on an annual basis. Additionally, on a bi-annual basis, the Chair of our Governance and Compliance Committee conducts individual conversations with each director. Each step of the Board’s annual evaluation process is further illustrated below.
BOARD & COMMITTEE DISCUSSIONS
IDENTIFY ACTION ITEMS
Upon review of the results of the performance assessment and interviews, the Board identifies certain focus areas and action items for the upcoming year aimed at maximizing its overall effectiveness and shareholder value.
The Board has determined that director nominees Jorge A. Caballero, Mark G. Foletta, Teri G. Fontenot, R. Jeffrey Harris, Sylvia Trent-Adams, Martha H. Marsh, Daphne E. Jones, and Douglas D. Wheat all meet our categorical standards for director independence described in our Governance Guidelines and the applicable rules and regulations of the New York Stock Exchange (“NYSE”) regarding director independence. Our CEO is the only member of our Board whom the Board has not deemed independent.
When making director independence determinations, the Board considered business relationships between LHC Group, Inc. and Orlando Health, Inc., both clients of the Company, and on whose Boards, Ms. Fontenot serves as an independent director. We discuss these relationships in more detail in the “Certain Transactions” section below. The Board considered the nature of these related party relationships and the annual amount of payments we receive from each LHC Group and Orlando Health. The Board determined that neither relationship precluded the Board from making an independence determination for Ms. Fontenot and that the related party relationships fell within our standards of independence.
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, its Chair 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 8840 Cypress Waters Boulevard, Suite 300, Dallas, Texas 75019. The Corporate Secretary opens, reviews, all written communications to the Board, one of its committees or specific director(s) and promptly forwards to the Chair of the Board and/or the appropriate Committee Chairperson those that the Secretary believes require immediate attention. The Corporate Secretary will also periodically provide the Chair of the Board, the Committee Chairperson, and the Company’s Chief Executive Officer (if appropriate) with a summary of all such communications and any actions taken if not previously forwarded.
Factors that will be considered when determining whether or not the matter requires immediate attention include, but are not limited to, whether the matter relates to a pressing governance, compliance or legal issue, and whether the matter could have a material impact on the Company’s performance or stock price and the stakeholder(s) making the request.
JORGE A. CABALLERO |
DIRECTOR SINCE: 2021
COMMITTEE: Audit Committee (Financial Expert); Corporate Governance & Compliance Committee
SKILLS & QUALIFICATIONS:
Mergers & Acquisitions
Served on the Board of Directors of Deloitte Tax LLP, a global professional services firm and one of the Big Four accounting firms, where he was the Chief Diversity Officer (2009 – 2016)
Served on the Board of Directors of United Way of Essex and West Hudson in New Jersey, a non-profit organization where he had served as the chair of Board of Directors and Finance Committee (2003 – 2019)
Served on the Board of Directors of The College of New Jersey, where he served as the chair of the Board of Directors, Finance Committee, and Audit and Risk Management Committee (2007 -2019)
Served on the Board of Directors of Jersey Battered Women’s Service, a private, nonprofit agency, where he served as the chair of the Finance, Human Resources, and Infrastructure Committees (1993 – 2001)
ADDITIONAL DIRECTOR QUALIFICATIONS
New Jersey Tax Managing Partner (2003 – 2011)
Managing Partner of Deloitte’s Business Tax Services U.S.- India practice (2016 – 2019)
Assistant Vice President of Tax of Beneficial Corporation, a consumer finance company that was acquired by Household International, Inc. in 1998 (1983 – 1986)
The Board has concluded that Mr. Caballero is qualified to serve on the Board, because he possesses a strong audit, financial, and enterprise risk management background with extensive experience in mergers and acquisitions, which is a critical component of AMN’s growth strategy. The Board has also determined that Mr. Caballero qualifies as an audit committee financial expert.
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MARK G. FOLETTA | 61
DIRECTOR SINCE: 2012
COMMITTEE: Audit Committee (Chair) (Financial Expert)
SKILLS & QUALIFICATIONS:
Mergers & Acquisitions
Serves on the Board of Directors of DexCom, Inc., a publicly-traded diabetes care technology company, since November 2014, where he is the Lead Independent Director
Serves on the Board of Directors of Enanta Pharmaceuticals, a publicly-traded biotechnology company, where he is the chair of the Audit Committee (June 2020 – present)
Served as a director of Regulus Therapeutics Inc., and was Chairman of its Audit Committee and a member of its Nominating and Governance Committee (February 2013 - June 2018)
Serves as a director of Viacyte, Inc., a privately held company
Helped oversee and guide the launch of each organization’s initial enterprise risk management assessment while at Regulus and DexCom
Served as a director and Chairman of the Audit Committee of Ambit Biosciences Corporation (sold in 2014)
Served as a director of Anadys Pharmaceuticals, Inc. (sold in 2011)
ADDITIONAL DIRECTOR QUALIFICATIONS
Former Executive Vice President and Chief Financial Officer of Tocagen Inc., a brain cancer biotechnology company, from February 2017 until its acquisition by Forte Biosciences, Inc. in March 2020
Interim Chief Financial Officer of Biocept, Inc., a publicly-traded diagnostics company (August 2015 to July 2016)
Senior Vice President, Finance and Chief Financial Officer of Amylin Pharmaceuticals, Inc. (March 2006 - October 2012); assisted with developing and launching the organization’s initial enterprise risk management assessment
Vice President, Finance and Chief Financial Officer of Amylin (March 2000 - March 2006)
Certified Public Accountant (inactive) and a member of the Corporate Directors Forum
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 an audit committee financial expert and he serves as Chairman of the Audit Committee.
TERI G. FONTENOT | 68
DIRECTOR SINCE: 2019
COMMITTEE: Audit Committee (Financial Expert); Corporate Governance & Compliance Committee
SKILLS & QUALIFICATIONS:
Government/ Policy Advocacy
Serves on the Board of Directors, Clinical Quality and Corporate Development Committees, and chair of the Audit Committee for LHC Group, Inc., a publicly-traded in-home healthcare services company (2019 - present)
Serves on the Board of Directors and is a member of the Audit and Governance Committees of Amerisafe. Inc., a publicly-traded specialty provider of workers’ compensation insurance (June 2016 - present)
Served as a member of the Board of Directors of Landauer (a formerly publicly-held company), including its Audit and Governance Committee, until its sale in 2017
Held a six-year term on the Advisory Committee on Research on Women’s Health for the National Institutes of Health
Serves as a director on the Board and is a member of the Audit Committee of the Baton Rouge Water Company (2009-Present), Board of Dynamic Infusion Therapy (May 2021-Present), and PELITAS (June 2021-Present), all privately held companies
Serves as a director on the Board of Orlando Health, Inc., a not-for-profit organization (September 2021-Present)
Served on the Board of Directors of the Sixth District Federal Reserve Bank of Atlanta, including as its Audit Committee chair for two years (2004 - 2009)
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 (2012)
ADDITIONAL DIRECTOR QUALIFICATIONS
President and CEO of Woman’s Hospital, the largest independently-owned women’s and infant’s hospital in the United States providing comprehensive subspecialty services to women (March 1996 – March 2019)
Chief Financial Officer and Executive Vice President of Woman’s Hospital (1992 - 1996)
Chief Financial Officer of three other hospitals located in Louisiana and Florida prior to joining Woman’s Hospital in 1992 and is a Certified Public Accountant (inactive)
The Board has concluded that Ms. Fontenot is qualified to serve on the Board because she brings considerable audit, financial and healthcare experience. The Board has determined that Ms. Fontenot qualifies as an audit committee financial expert and appointed her as a member of its Audit Committee.
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R. JEFFREY HARRIS | 67
DIRECTOR SINCE: 2005
COMMITTEE: Corporate Governance & Compliance Committee (Chair); Executive Committee
SKILLS & QUALIFICATIONS:
Mergers & Acquisitions
Served on the Board of Directors for Sybron Dental Specialties (April 2005 - 2006) until it was acquired by Danaher Corporation
Served on the Board of Directors for Playtex Products, Inc. (2001 - October 2007) until it was acquired by Energizer Holdings
Served as a director of Prodesse, Inc., an early stage biotechnology company (2002 - 2009), until it was acquired by Gen-Probe Incorporated (2009)
Director of Apogent Technologies, Inc. (2000 - 2004) until it was acquired by Fisher Scientific International, Inc.
Served as a director of Guy & O’Neill, Inc., a privately-held private label and contract manufacturing company (2008 - 2018)
Chairman (2013-2021), board member and a co-founder of BrightStar Wisconsin Foundation, Inc., a non-profit economic development corporation
Director of Okanjo Partners, Inc., an early-stage technology company
ADDITIONAL DIRECTOR QUALIFICATIONS
Of Counsel at Apogent Technologies, Inc., a laboratory, life science and diagnostic products company (December 2000 - 2003); Vice President, General Counsel and Secretary (1988 - 2000), when the company was named Sybron International
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 growth strategy. Additionally, Mr. Harris has experience serving as a director on public company compensation and corporate governance committees.
DAPHNE E. JONES | 64
DIRECTOR SINCE: 2018
COMMITTEE: Audit Committee; Compensation Committee
SKILLS & QUALIFICATIONS:
Serves on the Board of Directors and is a member of the Corporate Governance and Nominating Committee for Masonite International Corp., a publicly-traded global designer, manufacturer and distributor of internal and external doors for the construction and renovation industry, since February 2018
Serves on the Board of Directors and is a member of the Audit Committee for Barnes Group Inc., a publicly-traded engineered products and industrial technologies company, since September 2019
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
ADDITIONAL DIRECTOR QUALIFICATIONS
Founder, The Board Curators, LLC (July 2021 - Present)
Founder, Destiny Transformations Group, LLC (April 2018 - Present)
Senior Vice President, Digital/Future of Work for GE Healthcare, the healthcare business of GE (May 2017 - October 2017)
Senior Vice President, Chief Information Officer for GE Healthcare Diagnostic Imaging and Services (August 2014 - May 2017)
Senior Vice President, Chief Information Officer for Hospira, Inc., a provider of pharmaceuticals and infusion technologies (October 2009 - June 2014)
Chief Information Officer at Johnson & Johnson (2006 to 2009); served in various information technology roles with Johnson & Johnson (1997 - 2006)
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 is critical to our successful execution of our technology and digital strategies.
MARTHA H. MARSH | 73
DIRECTOR SINCE: 2010
COMMITTEE: Compensation Committee (Chair)
SKILLS & QUALIFICATIONS:
Serves as Lead Director on the Board of Edwards Lifesciences Corporation, a publicly-traded structural heart disease and critical care monitoring company, since October 2015 and is a member of its Compensation and Governance Committee
Served on the Board of Directors of Owens & Minor, Inc., a publicly-traded healthcare services and logistics company, from 2012 through 2019; also served as a member of its Compensation and Benefits Committee and as Chairperson of its Governance and Nominating Committee
Serves on the Board and the Compensation Committee of Teichert, a privately-held company
Served on the Board of Thoratec Corporation until it was acquired by St. Jude Medical in 2015
Former Chair of the Board of Trustees for the California Hospital Association and the California Association of Hospitals and Health Systems
Former director of Ascension Healthcare Network, a privately-held company
ADDITIONAL DIRECTOR QUALIFICATIONS
President and CEO of Stanford Hospital and Clinics for eight years until her retirement (April 2002 - August 2010)
CEO of UC Davis Medical Center and the Chief Operating Officer of the UC Davis Health System (1999 - 2002)
Served as the Senior Vice President for Professional Services and Managed Care at the University of Pennsylvania Health System
Served as President and CEO of Matthew Thornton Health Plan in Nashua, New Hampshire
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 talent solutions service offerings to meet our clients’ evolving needs.
SUSAN R. SALKA | 57
DIRECTOR SINCE: 2003
COMMITTEE: Executive Committee
SKILLS & QUALIFICATIONS:
Mergers & Acquisitions
Serves on the Board of Directors for McKesson Corp., a publicly-traded medical supplies and equipment, pharmaceutical distribution and healthcare technology solutions company, since October 2014; also serves as Chair of its Finance Committee and as a member of its Audit Committee
Served on the Board of Directors and the Audit Committee of Beckman Coulter (2007 until 2011) until it was acquired by Danaher Corporation
Served on the Board and Chair of the Audit Committee of Playtex Products, Inc. (2001 - October 2007) until it was acquired by Energizer Holdings
ADDITIONAL DIRECTOR QUALIFICATIONS
President of AMN Healthcare Services, Inc. (since May 2003); CEO (since May 2005)
Executive Committee and Treasurer 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
Worked at BioVest Partners, a venture capital firm, and at Hybritech, a subsidiary of Eli Lilly & Co., which Beckman Coulter later acquired
The Board has concluded that Ms. Salka is qualified to serve on the Board because she has more than 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. As announced on March 10, 2022, Ms. Salka intends to retire by the end of the year ending December 31, 2022, but will stand for reelection to AMN’s Board and remain as a director and Chief Executive Officer until a successor is hired. The Board is grateful to Ms. Salka for her decades of service to the Company.
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SYLVIA TRENT-ADAMS | 56
DIRECTOR SINCE: 2020
SKILLS & QUALIFICATIONS:
Government/ Policy Advocacy
Serves as a member of the Board of Visitors for the University of Minnesota School of Nursing.
ADDITIONAL DIRECTOR QUALIFICATIONS
Executive Vice President and Chief Strategy Officer of the University of North Texas Health Science center at Fort Worth (since October 2020).
Served in the U.S. Public Health Service Commissioned Corps from 1992 - 2020, which included service as Deputy Surgeon General and Acting Surgeon General of the United States.
Held leadership roles in the U.S. Department of Health and Human Services, including as Principal Deputy Assistant Secretary for Health
The Board has concluded that Ms. Trent-Adams is qualified to serve on the Board because she possesses significant healthcare industry and policy knowledge and expertise, which is critical to the successful design and implementation of our growth strategy.
DOUGLAS D. WHEAT | 71
DIRECTOR SINCE: 1999
COMMITTEE: Board Chair; Executive Committee
SKILLS & QUALIFICATIONS:
Mergers & Acquisitions
Serves as Chairman of the Board of Overseas Shipholding Group, a publicly-traded ocean transportation services company, since 2014
Serves as Chairman of the Board of International Seaways, Inc., a publicly-traded oil and gas tanker company, since 2016
Served as Vice Chairman of Dex Media, Inc.
Served as Chairman of SuperMedia prior to its merger with Dex One
Served as a member of the Board of Directors of several other companies, including Playtex Products (of which he also served as Chairman), Dr. Pepper/ Seven-Up Companies, Inc., Dr. Pepper Bottling of the Southwest, Inc., Walls Industries, Inc., Alliance Imaging, Inc., Thermadyne Industries, Inc., Sybron International Corporation, Nebraska Book Corporation, ALC Communications Corporation, Mother’s Cookies, Inc., and Stella Cheese Company
ADDITIONAL DIRECTOR QUALIFICATIONS
Managing Partner of Wheat Investments, a private investment firm
Founding and Managing Partner of the private equity company Southlake Equity Group (2007 - 2015)
President of Haas Wheat & Partners (1992 - 2006)
A founding member of the merchant banking group Donaldson, Lufkin & Jenrette specializing in leveraged buyout financing
Practiced corporate and securities law in Dallas, Texas (1974 - 1984)
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, all of which are critical to the successful design and implementation of our growth strategy.
Accountability to AMN shareholders is an essential component of our success, which is why we engage with our shareholders in a variety of ways throughout the year to discuss and obtain feedback on a range of important topics. Management and our Board will engage with shareholders to solicit their views on corporate governance, industry leadership, human capital management, corporate social responsibility and diversity, equality, equity, and inclusion. In addition, our Investor Relations team also meets regularly with shareholders, prospective investors, and investment analysts to discuss company performance, strategy, and sustainable growth.
Our outreach efforts have evolved into a robust program with a customized approach to each shareholder and the topics and initiatives that are most important to them. We believe this results in more meaningful dialogue on relevant topics, builds stronger relationships with our shareholders and ultimately a more successful company. With this customized strategy in place, we conduct a formal outreach in the fall of each year. 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.
2021 ENGAGEMENT SUMMARY
Although the focus of each of our shareholders may differ, AMN’s purpose, long-term strategy, commitment to elimination of equity barriers, 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 equity in the U.S. healthcare system.
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The Board is responsible for overseeing our enterprise-wide risk management program. In conjunction with this responsibility, the Board addresses our key risks, risk capacity, appetite and tolerance levels that provide the foundation for our overall business strategy and direction. The Board believes that overseeing processes for assessing and managing the various risks we face is important to value creation and value preservation for our shareholders. As a result, the Board meets with executive management to oversee the Company’s enterprise risk governance framework and discuss how the Company’s identified key risks impact its long-term strategies.
Purposeful and calculated risk taking is important for us to be competitive and to achieve our long-term goals. Our enterprise risk governance framework reflects a collaborative process where the Board, executive management and other team members apply a disciplined approach to our strategic planning and operational decisions that is designed to balance the opportunities and threats to our business.
As part of our annual strategic planning process, Executive Management and the Board identify the key risks that jeopardize achievement of our strategic plan. Executive Management and the Board discuss 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 influences how we operate our business, including how we allocate resources and make strategic and operational decisions. We also have designed and maintain internal processes and an internal control environment that further facilitates the identification and management of risks, including response readiness processes, such as planning, disaster recovery and business continuity. As an example of the Board’s active engagement in risk oversight, in 2021, the Board and Executive Management participated in a simulated cybersecurity crisis event to mitigate risk associated with information security.
In addition to the foregoing, the responsibilities of each of the Board’s standing committees 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. In 2021, for example, the Compensation Committee provided oversight of a human capital infrastructure project designed to mitigate an identified key risk related to talent. All committees play significant roles in carrying out the risk oversight function that typically focus in their areas of expertise.
We aspire to be a leader in propelling the ESG agenda with the healthcare and staffing industries, because it is fundamental to our aspiration to be the most trusted and utilized total talent solution partner for health care organizations in the country. At AMN, we recognize that sound ESG practices create financial value by mitigating risk, driving innovation, fostering talent engagement, reducing costs and building trust among our stakeholders. As a company steeped in its core values of passion, trust, respect, customer focus, continuous improvement, and innovation, we have always held our operations to high standards, and we are excited to share how we have accelerated our ESG journey in 2021 by integrating our ESG practices with our business strategy and long-standing commitment to operate in a socially responsible and sustainable manner.
To achieve this, we have aligned our ESG strategy with the following Sustainable Development Goals, which were set by the United Nations General Assembly in 2015 as a blueprint to achieve a better and more sustainable future for all.
UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
|HEALTH IS AT OUR
We are Empowering the Future of Care and Passionate about Health Equity
|GENDER EQUALITY LEADER
We lead in Gender Equality with our C-Suite and Board of Directors, and we are tackling pay equity and more
|WORKFORCE IS OUR BUSINESS
We Deployed more than 95,000 healthcare professionals in 2021 and invest heavily in supplier diversity
|DEI IS IN OUR DNA |
We strive to build a Diverse, Equitable, and Inclusive AMN, and we are committed to Driving DEI across the Healthcare and Staffing Industries
|INDUSTRY INFLUENCER |
We aspire to accelerate Healthcare’s Transformation to Net-Zero Climate Impact
At AMN, we understand that transparency and accountability surrounding our ESG program is critical to maintaining the trust and support of our stakeholders, so we strive to report more robustly each year and disclose our ESG performance in alignment with the following sustainability reporting standards and frameworks. In our new ESG Report, which we anticipate publishing in March of this year, we look forward to sharing the progress we have made over the past year in detail.
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To support our strategy, we align our ESG infrastructure with the following pillars:
To maintain a strong ethical culture, we design our governance practices to align with our core values, mission, purpose, and vision. To achieve this, we provide transparent disclosure to stakeholders under a holistic strategy that integrates all components of effective governance, including a robust enterprise risk management program, ongoing shareholder engagement, and sound financial, regulatory, legal, compliance and social responsibility practices.
CAPITAL MANAGEMENT |
We are in the business of workforce management so are uniquely positioned to understand that the attraction development, engagement, and retention of diverse talent is paramount to achieve our short and long-term goals
We support our communities at global, national, and local levels through philanthropy, volunteerism, and civic engagement. Through civic engagement, we strive to create a stronger, more cohesive society and reinforce our mission and commitment to diversity, equality, equity, and inclusion, which includes advancing the diversity of our vendors, and supplier partners and funding minority-owned business certifications.
Human health is intricately linked to the health of the planet we share and solidifies our commitment as a global citizen to reduce our carbon footprint in support of the transition to a low-carbon future by continuing to assess climate risks to the business and identifying opportunities that will make our operations more sustainable for long-term growth.
Our commitment to building an industry leading ESG infrastructure starts at the top of the organization with our Board of Directors, who are actively engaged in overseeing the Company’s ESG strategy, practices, and reporting. Our Board and its committees regularly and carefully review key governance documents, including our corporate governance guidelines, code of conduct and code of ethics for senior financial officers, to ensure they contain best practices that are relevant and support our objectives and the values-based culture we strive to maintain. The foundation of our corporate governance strategy is to promote transparent disclosure to our stakeholders on an ongoing and consistent basis, so we publish these documents, among others, under the “Governance” section of the “Investors Relations” page on the Company’s website at https://ir.amnhealthcare.com/governance/governance-documents/default.aspx, and we are happy to provide these materials in print for any stakeholder upon request.
Risk management is an integral component of AMN’s business strategy, culture, and operations, so our Board’s oversight role and governance practices continue to evolve to support the resilience of our business and sustainability of our operations. Our strategy focuses on identifying the ESG risks and opportunities that are most relevant to our business and then prioritizing those areas where we can achieve the greatest impact. To support the continuous evolution of these practices, we develop strategies to monitor or mitigate ESG risks, capitalize on opportunities, and disclose our progress to stakeholders on an ongoing and consistent basis.
Our executive management team sets the tone each day to foster a culture that represents the AMN Difference and functions as the foundation for advancing our long-term ESG strategy. To help support our strategy, we have a dedicated team of cross-functional professionals who are focused on ensuring that our day-to-day operations are aligned with our ESG goals and principles.
With healthcare professionals on assignment all over the country, we monitor ESG risks and are actively engaged in identifying opportunities associated with the transition to a low-carbon economy. In 2022, we established a Sustainability Champion Committee consisting of a cross-functional team to help us review and manage a wide spectrum of relevant risks and engage internal talent to help achieve our sustainability goals. We anticipate disclosing these in more detail in our ESG Report, which we plan to publish in March of this year on our new Corporate Social Responsibility webpage, which we launched in the summer of 2021 to better communicate our progress: https://www.amnhealthcare.com/about/corporate-social-responsibility/
In 2021, we responded to our shareholders’ call for transparency surrounding climate change by developing a comprehensive three-year ESG roadmap aligned with the United Nations Sustainable Development Goals and linked to our enterprise-wide business strategy. We also calculated our Scope 1 and Scope 2 greenhouse gas emissions and established specific targets and metrics to monitor, manage, and report on our environmental performance and progress toward achieving net-zero carbon emissions.
HUMAN CAPITAL STRATEGY
A foundational element of our ESG infrastructure is our human capital management strategy. We don’t just hire people; we invest in them to help them reach their personal and professional goals. Our healthcare professionals and team members are key assets that allow us to deliver long-term sustainable value to our stakeholders. We believe that AMN’s future success largely depends on the caliber of our talent and the full engagement and inclusion of our team members and healthcare professionals. 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 our diversity, equality, equity and inclusion program, team member engagement, professional development and employee health and safety to ensure we are delivering on our commitment to promote a purpose-driven and values-based culture that is centered around business ethics and professional integrity.
AMN HEALTHCARE PROMOTES INCLUSION IN THE:
At AMN, we are committed to actively engaging in building an organization and society where equality is the norm, equity is achieved, and inclusion is universal so that we may all thrive. We believe that investing in our team members and healthcare professionals ensures the sustainability of our business. Our people are critical assets that we must continually invest in and strategically develop to maximize their long-term value and potential. To this end, we focus our long-term strategy on diversity, equality, equity and inclusion, team member engagement, professional development and employee health and safety. To advance our mission and core values, we align our business strategy with the development of our people and foster an inclusive culture based on our pillars of diversity, which include the workforce, workplace, and marketplace.
We are committed to recruiting and onboarding team members that support and align with our diversity, equality, equity, and inclusion goals dedicated to inclusive representation.
We are committed to fostering a culture of respect and inclusion of all backgrounds and perspectives through our 8 employee resource groups (“ERGs”) and 100+ Diversity Champions across the organization.
We believe that equitable business opportunities contribute to a more equitable world. Our commitment to diversity extends to the healthcare professionals we place, the clients we serve, our vendors, suppliers, and our community.
DIVERSITY, EQUALITY, EQUITY, AND INCLUSION
Within our workforce, we continue to expand our talent sourcing efforts to ensure that we are attracting a more diverse slate of candidates that reflect the communities we serve with the goal of demonstrating year over year increase in historically underrepresented leadership across the organization. We continue to review our practices, job descriptions, and job postings to ensure the use of neutral language to eliminate unintended barriers and attract a diverse workforce. Transparency and accountability are catalysts for change, so we disclose diversity metrics on our corporate website and measure our efforts through market surveys such as the Bloomberg Gender-Equality Index and the Human Rights Campaign Corporate Equality Index, both of which have recognized AMN as a leader for the past five consecutive years. We manage diversity metrics and track annual goals at both an enterprise and department level.
|2022 Proxy Statement||29|
We also hold leadership accountable for our diversity-related goals by integrating demonstrated leadership metrics surrounding our diversity, equality, equity, and inclusion program into our executive’s cash incentive compensation.
Within our workplace, our objective is to demonstrate year over year increase in historically underrepresented leadership across the organization by attracting leaders from outside the organization, decreasing internal turnover rates and increasing internal promotions among team members belonging to historically underrepresented groups. To achieve this, we expanded our relationships with historically black colleges, veteran groups, and other diverse organizations to attract talent utilizing diverse slate practices. In addition, we increased our investments in professional development leadership programs for our internal emerging talent.
Volunteer Time Off
Also includes peaceful
Additional Floating Holidays
Can be used for
Funding 100 minority-
For Team Members
of diverse vendors
EMPLOYEE RESOURCE GROUPS AT AMN
At AMN, we achieve our goals by capitalizing on differing cultures, backgrounds, experience, and perspectives.
In 2021, we continued to make progress in our workplace by encouraging more team members to engage through our expanded network of employee resource groups by promoting an inclusive infrastructure that closely aligns with the diverse interests and backgrounds of our team members. Last year, the Company increased its investments in diverse talent and dedicated the resources necessary for our team members to continue to build our ERG ecosystem by providing each employee resource group with an annual budget of $25,000. As of December 31, 2021, the Company actively supports eight employee resource groups and approximately 25% of our corporate team members participation, and we look forward to continuing to build on our ERG infrastructure and participation rate in 2022.
COMMUNITY ENGAGEMENT AND SUPPLIER DIVERSITY
Justice is fundamental to our company culture and core values of trust and respect, so we took intentional actions in the marketplace to extend our commitment to diversity, equality, equity, and inclusion for our healthcare professionals, clients, vendors, supplier partners, and communities. We believe that equitable business opportunities contribute to a more equitable world, so we actively facilitate business partnerships with diverse contractors and suppliers by identifying business opportunities and partnerships that support small, minority, women, veteran, and LGBTQ+ owned businesses. We understand that through supplier diversity, we have an opportunity to benefit the overall socioeconomic health of the communities we serve, so we increased our diverse and small supplier spend to $378 million dollars, funded 100 minority-owned business certifications, and expanded our a vendor development program. A key focus moving forward is to identify business opportunities beyond the traditional minority, women, and veteran-owned businesses to the inclusion of LGBTQ+ and disability-owned businesses.
Being a healthcare industry leader demands purpose, a commitment to serve our communities, and the drive to use our resources for the greater good. To this end, we strive to create a meaningful impact and actively engage in philanthropy and community service to create a stronger, more cohesive society that supports our purpose and mission. Our core values act as a compass to our commitment to corporate social responsibility, and we align our charitable giving efforts with these values to help organizations and communities flourish. To demonstrate this commitment, we committed $8.9 million to non-profit organizations focused on social justice, diversity, equality, and inclusion, health equity, and resilience in healthcare. We put our values into action through our philanthropic support to non-profits focused on our pillars of giving, which include health and human services, community development, disaster and emergency response, and diversity, equality, equity, and inclusion. AMN only supports nonprofits that encourage diversity, promote tolerance, and share these values and ethics. Our goal is to have a positive impact on the health and well-being of all our stakeholders in our local and global communities. Below are some of the non-profit organizations we supported over the past year:
|2022 Proxy Statement||31|
The Governance Guidelines, our Code of Conduct and the Company’s Related Party Transactions Policy collectively establish the Company’s procedures related to conflicts of interest and related party transactions.
Under these policies, directors and executive officers must notify the Company’s Chief Legal Officer in advance 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 Chairman of the Board and Chief Legal Officer. If the Chief Legal Officer 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.
In determining whether directors are independent, the Board considered Ms. Fontenot’s role as an independent director at LHC Group, Inc. and Orlando Health, Inc. In 2021, we continued commercial relationships with LHC Group and Orlando Health that existed before Ms. Fontenot joined the Board under which the Company provides clinical staffing and language services to LHC Group and Orlando Health. The approximately $1.5 million and $8.2 million in fees that we received from LHC Group and Orlando Health, respectively, in 2021 were negotiated on an arm’s-length basis and are within the categorical independence standards that the Board has adopted. Neither relationship prevents Ms. Fontenot from qualifying as an independent director under the categorical independence standards, and the Board considers Ms. Fontenot to be an independent director.
The Board has carefully considered its leadership structure, including whether the role of Chair should be a non-executive position or be combined with that of the CEO. Following due consideration, the Board continues to conclude that maintaining an independent chair best positions the Board to promote shareholders’ interests and contribute to the Board’s overall efficiency and effectiveness. 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 Chair of the Board, Mr. Wheat, leads the Board in overseeing our strategy, provides guidance to our CEO and presides over meetings of the Board. As announced on March 10, 2022, Ms. Salka intends to retire by the end of the year ending December 31, 2022. The Board has a CEO succession process in place and is engaging a search firm to evaluate internal and external candidates. Mr. Wheat will chair the search committee along with other independent directors Jeffrey Harris, Chairman of the Corporate Governance Committee, and Martha Marsh, Chairperson of the Compensation Committee.
DOUGLAS D. WHEAT
CHAIR OF THE BOARD
The Board has selected Douglas D. Wheat to serve as its independent Chair because he:
|●||Brings unique and extensive board leadership experience that effectively allows him to lead our high-performing Board by keeping it focused on key areas of oversight, coordinating across committees and facilitating effective communication among directors and the Company’s executive management;|
|●||Fosters a productive relationship between the Board and the Company’s CEO by providing a sounding board with candid, constructive feedback from the Board to the Company’s executive management team;|
|●||Is deeply committed to our values and mission while driving long-term shareholder value;|
|●||Increases the independent oversight of the Company and partners with the Compensation Committee to oversee the performance and compensation of our CEO; and|
|●||Acts as an independent spokesperson for the Company to our shareholders.|
|2022 Proxy Statement||33|
We have standing Audit, Corporate Governance and Compliance, and Compensation Committees. We also have an Executive Committee that meets periodically, as necessary, to oversee the Company’s business development and capital allocation strategy. 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.
We describe the current functions and members of each committee below. A more detailed description of the functions, 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 “Governance” located within the “Investor Relations” tab of our website at www.amnhealthcare.com.
The table below provides current committee memberships and fiscal year 2021 committee meeting information:
|Mark G. Foletta||●|
|R. Jeffrey Harris||●||●||●|
|Jorge A. Caballero||●||●|
|Martha H. Marsh||●|
|Susan R. Salka||●|
|Teri G. Fontenot||●||●|
|Douglas D. Wheat||●|
|Daphne E. Jones||●||●|
|Committee Meetings and Actions by Written Consent|
|Total Committee Meetings||9||7||5||1|
|Actions by Written Consent||0||3||0||1|
|(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 Jorge A. Caballero, 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.|
MARK G. FOLETTA
Total Committee Meetings
The Audit Committee is responsible for, among other things, overseeing our financial reporting process and cybersecurity risk management. In performing its functions, the Audit Committee:
● reviews our internal accounting controls and audited financial statements,
● reviews with our independent registered public accounting firm the scope of its audit, its audit report, and its recommendations,
● considers the possible effect on the independence of such firm in approving non-audit services requested of it,
● reviews disclosures made by our CEO and CFO in connection with the certification of our periodic reports,
● reviews and discusses with management significant technology strategic initiatives, operations and risk,
● 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,
● receives and reviews quarterly reports from the Chief Information & Digital Officer on the Company’s technology and cyber risk profile, and
● appoints our independent registered public accounting firm, subject to ratification by our shareholders.
KEY 2021 ACTIVITIES
● Oversaw the continued deployment of and investment in the Company’s strategic cybersecurity initiatives
● Guided the Company through the selection and transition of our new CFO
● Oversaw the relationship between the Company’s finance team and its independent auditor to ensure an effective virtual audit process
|2022 Proxy Statement||35|
MARTHA H. MARSH
Total Committee Meetings
The Compensation Committee is responsible for, among other things, overseeing our executive compensation and human capital management programs. In the course of performing its functions, the Compensation Committee:
● establishes the executive compensation philosophy for the Company,
● designs executive compensation programs to attract, incent and retain executive talent,
● reviews, and, when appropriate, administers and makes recommendations to the Board regarding (A) compensation of our CEO, all senior executives that report directly to our CEO and our directors and (B) our incentive compensation plans and equity-based plans,
● prepares the Compensation Committee Report and oversees the preparation of our compensation disclosure and analysis to be included in our annual proxy statement and recommends its inclusion in the annual proxy statement to the Board,
● recommends the proposals on “say-on-pay” and the frequency of the “say-on-pay” vote that are required by SEC rules
● reviews our incentive compensation arrangements generally to determine whether they encourage excessive risk-taking,
● evaluates the performance of our CEO, and
● oversees the Company’s human capital management strategy, including talent recruitment, retention and engagement and its diversity, equality, equity, 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.
KEY 2021 ACTIVITIES
● Designed mid-year retention equity awards for key executives in recognition of the competitive labor environment and exceptional company performance
● Continued to oversee the development and execution of the Company’s human capital management strategies, including its diversity, equality, equity, and inclusion program and commitment to equal pay principles
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee, whose members are Ms. Marsh, Mr. Harris, Ms. Jones, and Ms. Trent-Adams 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.
CORPORATE GOVERNANCE AND COMPLIANCE COMMITTEE
R. JEFFREY HARRIS
Total Committee Meetings
The Corporate Governance and Compliance Committee is responsible for, among other things, overseeing our board composition and refreshment strategies, corporate governance practices, ESG reporting strategies and ethics and compliance programs. In the course of performing its functions, the Corporate Governance and Compliance Committee:
● identifies and recommends qualified individuals with diverse backgrounds and experiences to become members of the Board,
● oversees the Company’s ESG strategies and practices, including its governance reporting frameworks and climate-related risks and opportunities,
● periodically evaluates the Code of Conduct and the Governance Guidelines,
● reviews the performance of the Board and its committees on an annual basis,
● oversees all aspects of the Company’s ethics and compliance programs, including the Company’s healthcare, employment and privacy regulatory compliance and risk oversight with respect to the credentialing of candidates,
● reviews and evaluates succession planning for the CEO and other members of our executive management team,
● 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
● 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.
KEY 2021 ACTIVITIES
● Continued to execute the Board’s refreshment and composition strategy by identifying and onboarding Jorge Caballero.
● Continued to help guide the Company’s COVID-19 response by overseeing strategies related to its healthcare provider and client experience efforts.
● Oversaw the development of the Company’s 3-year ESG roadmap aligned with the United Nations Sustainable Development Goals and linked to the Company’s 3-year business strategy.
|2022 Proxy Statement||37|
DOUGLAS D. WHEAT
Total Committee Meetings
The Executive Committee exercises the power of the Board between its meetings, including the approval of certain acquisitions within established parameters.
KEY 2021 ACTIVITIES
● Oversaw the Company’s acquisition of Synzi Holdings, Inc. and SnapMD, LLC
● Oversaw the Company’s business development strategies and evaluated acquisition targets
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 2021, the Board met 6 times, and took 1 action by unanimous written consent. In 2021, our directors attended 100% 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 our then-serving directors also attended our 2021 Annual Meeting of Shareholders.
The Board has executive sessions at each regularly scheduled Board meeting during the year, for which our management director, Ms. Salka, is not present.
Members of the Board who are not employees of the Company receive compensation for their service in the form of cash and equity. We refer to these directors as “Independent Directors.” Each form of compensation is evaluated by the Compensation Committee on an annual basis.
DIRECTOR COMPENSATION PHILOSOPHY AND PROCESS
The Compensation Committee believes director pay should be aligned with the long-term interests of our shareholders, so it gives substantial weight to the equity component, which represented approximately two thirds of our Independent Directors median total compensation in 2021.
As part of their annual review process, the Compensation Committee evaluates a variety of sources and benchmarks the compensation we pay our Independent Directors against our executive compensation peer group and relevant market data. It also consults with our independent compensation consulting firm, Frederic W. Cook & Co., Inc., prior to issuing a recommendation to the Board, which it has historically done in April. Following this process provides the Compensation Committee with more visibility into director pay trends based on the most recently disclosed public filings of peer companies included in its analysis.
We pay our Independent Directors an annual cash retainer that is paid in advance on a quarterly basis. 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 below sets forth the current annual retainer schedule for our Independent Directors.
|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||15,000|
|(1)||On April 21, 2021, we approved an increase in the annual cash retainer from $70,000 to $75,000.|
|2022 Proxy Statement||39|
|DIRECTOR EQUITY COMPENSATION|
We typically grant full-value equity awards to Independent Directors upon appointment or election to the Board, and annually thereafter during the director’s term. Because we believe that director compensation should be weighted in equity, we anticipate that we will continue to grant annual equity awards to our Independent Directors for the foreseeable future. The aggregate grant date fair value, which we refer to as AGD Fair Value, of such equity awards is $160,061, which we believe aligns with the market for independent director compensation.
On April 21, 2021, each Independent Director serving on the Board at such time received an equity award of 2,139 restricted stock units, which we refer to as RSUs. The RSU awards issued to our Independent Directors vest on the earlier of the one-year anniversary of the grant date or the 2022 annual meeting of shareholders, provided such director remains in service. Each director was also given the option to defer receipt of the shares underlying the RSUs until their separation of service from the Board. Independent Directors that are elected to the Board at a time other than in connection with our annual meeting receive an equity award upon election in an amount equal to the pro rata annual grant value approved for Independent Directors for the anticipated service time from his or her date of election through the Company’s next annual meeting of shareholders. The chart on the right illustrates a breakdown of the current annual compensation our Independent Directors, excluding committee retainers.
Cash vs. Equity Compensation
The following table reflects compensation that our directors earned during fiscal year 2021. The table does not include Ms. Salka, who received no additional compensation for her service as a director.
|Mark G. Foletta||103,750||160,061||263,811|
|R. Jeffrey Harris||88,750||160,061||248,811|
|Michael M.E. Johns, M.D.(3)||21,827||—||21,827|
|Martha H. Marsh||88,750||160,061||248,811|
|Jorge A. Caballero(4)||3,668||47,388||51,057|
|Douglas D. Wheat||173,750||160,061||333,811|
|Daphne E. Jones||73,750||160,061||233,811|
|Teri G. Fontenot||73,750||160,061||233,811|
|(1)||The amount set forth in this column represents the AGD Fair Value of the 2,139 RSUs granted to each director elected to the Board on the date of the Annual Meeting of Shareholders held on April 21, 2021, and, for Mr. Caballero, it reflects the pro-rated AGD Fair Value of the 437 RSUs awarded to him on the date of his appointment.|
|(2)||On April 21, 2021, we approved an increase to the annual equity retainer from $140,000 to $160,000.|
|(3)||Dr. Johns retired from the Board in April 2021.|
|(4)||Mr. Caballero was appointed to the Board on December 14, 2021.|
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., $375,000). The Company does not take into account the value of unvested RSUs and vested or unvested stock appreciation rights and options in determining whether a director meets our director equity ownership guidelines.
|As of December 31, 2021, all AMN directors satisfy our director equity ownership guidelines, except for our newest two directors, Ms. Trent-Adams and Mr. Caballero, who were appointed to the Board October 2020 and December 2021, respectively.|
|2022 Proxy Statement||41|
Our named executive officers as of December 31, 2021 are listed below. We provide information regarding the business experience, qualifications, and affiliations of our currently employed named executive officers who are not directors below. For Ms. Salka’s experience, qualifications, and affiliations, please see page 23 above.
JEFFREY R. KNUDSON | 47
Chief Financial Officer and Treasurer
Mr. Knudson joined us as Chief Financial Officer and Treasurer in November 2021. In his role, Mr. Knudson oversees the Company’s accounting, finance, investor relations and internal audit functions as well as certain customer support operations.
Prior to his appointment as Chief Financial Officer and Treasurer, Mr. Knudson served as Chief Financial Officer and Executive Vice President, Supply Chain of At Home Group, Inc., in which capacity he oversaw accounting, financial planning and analysis, treasury, investor relations, and internal audit and supply chain activities.
Prior to Mr. Knudson’s tenure with At Home Group, Inc., he served in several leadership positions at CVS Health and CVS Caremark Corp., including as Senior Vice President of Finance and Retail Controller for their retail pharmacy segment. Prior to CVS, Mr. Knudson was a key member of the treasury and mergers and acquisition leadership teams at L Brands and Express Scripts.
Mr. Knudson received his bachelor’s degree in accounting and finance from the University of San Diego.
MARK C. HAGAN | 53
Chief Information and Digital Officer
Mark Hagan joined us as Chief Information Officer in June 2018. In March 2020, Mr. Hagan was promoted to Chief Information and Digital Officer and is responsible for our digital strategy, technology R&D, enterprise information technology infrastructure, operations, development, security, and program management operations.
Prior to joining AMN, from 2014-2018, Mr. Hagan was Chief Information Officer and Senior Vice President of IT at Envision Healthcare, a diverse healthcare services and technology company and a leading provider of physician-led services, post-acute care, ambulatory surgery services, and related management services. Prior to Envision, Mr. Hagan was IT Director at TeleTech.
Mr. Hagan currently serves as a director of M&M Properties Colorado LLC and Wonolo, Inc.
Mr. Hagan holds a Master of Business Administration from the University of Colorado, a Bachelor of Science and Computing from Queensland University of Technology.
DENISE L. JACKSON | 57
Chief Legal Officer and Corporate Secretary
Ms. Jackson joined us as General Counsel and Vice President of Administration in October 2000 and we appointed her as our Corporate Secretary in May 2003. Ms. Jackson is responsible for our legal, environmental, social and governance functions, compliance, risk management, real estate, and executive compensation.
Prior to joining AMN, 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 (TCSO: Nasdaq), the largest retailer of rural lifestyle products in the United States and is the Chair of its Corporate Governance Committee and a member of its Audit Committee.
Ms. Jackson holds a Juris Doctorate degree from the University of Arizona, a Master 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.
|2022 Proxy Statement||43|
Section 14A of the Exchange Act, as amended by the Dodd-Frank Act, enables our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. As previously disclosed, the Board has determined that it will hold an advisory vote on executive compensation on an annual basis, and the next shareholder advisory vote will occur at our 2022 Annual Meeting of Shareholders.
As described in detail in the Compensation Discussion and Analysis section below, we design our executive compensation programs to attract, motivate, and retain our named executive officers, who are critical to the Company’s success. Under these programs, we reward our named executive officers for the Company’s successful performance, the achievement of specific annual, long-term, and strategic goals, and the realization of increased value for our shareholders. The executive compensation packages paid to our named executive officers are substantially tied to our strategic objectives, financial plan, and total shareholder return and align with the interests of our shareholders and our commitment to corporate social responsibility. The Compensation Committee closely monitors evolving best practices as well as the compensation programs and pay levels of executives at peer companies to ensure that our compensation programs fall within the normal range of relevant market practices.
We ask that you support the compensation of our named executive officers as disclosed in our Compensation Discussion and Analysis and the accompanying tables contained in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, Summary Compensation Table and the other related tables and narrative disclosure.”
Because your vote is advisory, it will not bind us, the Compensation Committee, or our Board. However, our Board and our Compensation Committee value the opinions of our shareholders and will review the voting results and take them into consideration when making future decisions regarding our executive compensation programs and policies.
|THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.|
As the COVID-19 pandemic continued to disrupt our communities and workplaces for a second straight year, we are proud that AMN Healthcare was there to support its stakeholders every step of the way. To support the unprecedented demand, we grew our team and invested in our technology-based solutions and digital capabilities to provide resources to help clients and healthcare professionals navigate the continued challenges and stress associated with the pandemic and the evolving healthcare delivery environment. The Compensation Committee believes that AMN’s prompt and effective response to the pandemic, strategic vision, and investments in technology, innovation, and human capital were key to the Company’s outstanding performance in 2021 and demonstrates the agility necessary to navigate a volatile landscape while serving the diverse needs of our stakeholders and continuing to execute on our long-term growth strategy.
The Company delivered another year of strong financial performance in 2021 by increasing total revenue to $3.98 billion and Adjusted EBITDA to $635 million(1), a 66% and 98% increase over 2020, respectively. As part of our long-term strategy to create sustainable value for shareholders, AMN acquired Synzi and its wholly owned subsidiary SnapMD in April 2021, which offer virtual care technology platforms that serve the outpatient and home health markets. We believe that the strategic acquisition of Synzi uniquely positions the Company to provide its clients with additional tools to navigate the changing landscape that has accelerated the need for digital communication capabilities that enhance the patient care experience and drive efficiency and connectivity with their healthcare professionals.
This year’s Compensation Discussion and Analysis highlights decisions made by the Compensation Committee in the context of AMN’s stellar financial and operational performance. The Compensation Committee has primary oversight over the design and execution of the Company’s executive compensation program that is structured on a pay-for-performance model that leverages short-and long-term incentives to drive multiple dimensions of performance and aligns the interests of our executives with those of our shareholders and other stakeholders. More specifically, we have designed a total rewards program consisting of base salary, annual cash bonuses, and long-term equity incentive awards. By aligning pay with performance, we motivate and reward our executives for increases in long-term shareholder value by granting performance restricted stock units based on total shareholder return and Adjusted EBITDA performance over a three-year period. We designed our 2021 Senior Management Incentive Bonus Plan, which we refer to as the Bonus Plan, to ensure that 70% of each executive’s annual cash bonus target is based on annual revenue and adjusted EBITDA goals, which serve as two key financial metrics for the Company. The Compensation Committee believes that the combination of these longer-term equity and annual cash incentive vehicles are effective to motivate and reward our executives, which is why they make up the majority of their total compensation packages. As a result of this pay-for-performance focused structure and our leadership’s strong performance in 2021, the Company’s named executive officers earned the maximum amount possible under each of our performance incentive programs, which we cap at either 175% or 200% of target.
The Compensation Committee believes that the Company’s pay-for-performance structure appropriately incents executives without excessive risk and is comfortable that the outcomes under the Company’s incentive compensation plans reasonably reflect the balance of short- and long-term performance, and that the Company’s named executive officers continue to take the necessary actions today to achieve our long-term strategic plan and continue to deliver sustainable value to our shareholders.
|(1)||For information on adjusted EBITDA, which means adjusted earnings before interest, taxes, depreciation and amortization, and a reconciliation of it from our 2021 net income, please see Exhibit A to this proxy statement (page 95).|
|2022 Proxy Statement||45|
Looking to 2022, the Compensation Committee established financial goals for performance-based compensation over a three-year period. We set Bonus Plan targets based on our annual operating plan and intend that the achievement of our annual targets will contribute to the successful execution of our long-term strategy.
The Compensation 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, Chair
R. Jeffrey Harris
Daphne E. Jones
This 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, and we listed those who served in this capacity during the 2021 fiscal year below. The Compensation Committee takes great care in exercising its oversight of the design of our comprehensive compensation program to attract, retain, and provide incentives for talent to lead our organization in a manner consistent with our core values and aligns with stakeholder interests and the achievement of our short- and long-term 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 supports the Company’s business strategy.
|Susan R. Salka||President and Chief Executive Officer|
|Jeffrey R. Knudson(1)||Chief Financial Officer and Treasurer|
|Christopher S. Schwartz(2)||Interim Principal Financial Officer|
|Brian M. Scott(3)||Former Chief Financial Officer, Chief Accounting Officer and Treasurer|
|Mark C. Hagan||Chief Information and Digital Officer|
|Denise L. Jackson||Chief Legal Officer and Corporate Secretary|
|(1)||Mr. Knudson joined the Company on November 2, 2021 and assumed the role of Chief Financial Officer and Treasurer on November 8, 2021.|
|(2)||Mr. Schwartz became Interim Principal Financial Officer upon Mr. Scott’s resignation, effective August 9, 2021 and returned to his role as Controller on November 8, 2021.|
|(3)||Mr. Scott resigned from the Company effective August 9, 2021.|
OUR COMPENSATION PROGRAM PHILOSOPHY AND OBJECTIVES
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 and commitment to corporate social responsibility.
OUR COMPENSATION PROGRAM OBJECTIVES
|OUR COMPENSATION PROGRAM OBJECTIVES|
|Pay-for-performance, with variable pay constituting a significant portion of total compensation|
|Focus on propelling growth and the attainment of our long-term financial and strategic objectives|
|Provide equal pay based on performance|
|Build a strong talent base to reinforce our succession planning objectives|
|Maximize the financial efficiency of the overall program|
|Create commonality of interest between our executives and shareholders by tying realized compensation directly to changes in shareholder value|
|Reward our executives for long-term improvement in shareholder value|
|Attract, retain, and motivate highly skilled and innovative executives that embrace and promote AMN’s values-based culture that fosters innovation, diversity, and inclusion|
|Be competitive with other similarly sized companies, including those in our executive compensation peer group|
|Conform with established corporate governance practices and avoid excessive risk|
With these principles in mind, 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 talent solutions and technology and (3) delivering a superior customer experience through operational excellence and agility.
To support AMN’s objectives, the Compensation Committee has designed a total rewards program for our named executive officers, including the following primary features that constitute the majority of our named executive officer’s total compensation: (1) base salary; (2) annual bonuses; and (3) long-term incentive awards.
|2022 Proxy Statement||47|
|WHAT WE DO|
Executive Compensation Philosophy that reflects our commitment to long-term shareholder value, equal pay, corporate social responsibility and a culture of compliance and ethics.
Align Pay with Performance. Design an executive compensation program that is focused on performance with variable pay comprising the majority of each executive’s compensation.
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).
Focus on Our Long-term Goals. We utilize PRSUs based on the Company’s achievement of certain adjusted EBITDA targets with a three-year vesting period.
Ownership Guidelines. We have stock ownership guidelines for our directors and executive officers.
Cap Incentive Awards. We cap payouts for both our cash and equity incentive awards.
Incentives to Achieve Objective Key Financial Metrics. 70% of our annual cash bonus incentive plan is based on revenue and adjusted EBITDA targets, two key financial metrics for the Company.
Appropriate Peer Group Selection. We review our executive compensation peer group on an annual basis to ensure that our compensation program is properly aligned with companies of similar size within the healthcare and recruitment and staffing industries.
Independent Compensation Consultant. Our Compensation Committee utilizes the services of an independent and reputable compensation consultant, Frederic W. Cook, to provide pay recommendations.
“Double-trigger” Change in Control Provisions. Our equity award arrangements include “double-trigger” mechanics.
|WHAT WE DON’T DO|
|´ No Pledges or Hedges||´ No Single-Trigger Change in Control Agreements|
|´ No New Tax Gross-ups||´ No Excessive Perquisites|
2021 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 2021(1) and continued to make significant progress on our short- and long-term objectives and overall business strategy. We describe some of our 2021 highlights below.
from $2.39 billion in 2020
to $3.98 billion in 2021
NET INCOME by
from $70 million in 2020
to $327 million in 2021
ADJUSTED EBITDA(2) by
from $321 million in 2020
to $635 million in 2021
Advanced our ESG leadership
position in the healthcare and
Nurse and Allied Solutions
in annual revenue, 76% higher
Executed on our
|(1)||For more detail regarding our financial results, please see our 2021 annual report on Form 10-K filed by us with the SEC on February 24, 2022 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 2021 annual report on Form 10-K.|
|(2)||For information on adjusted EBITDA, which represents net income plus interest expense (net of interest income) and other, income tax expense (benefit), depreciation and amortization, depreciation (included in cost of revenue), acquisition, integration, and other costs, restructuring expenses, certain legal expenses, and share-based compensation, and a reconciliation of it from our 2021 net income, please see Exhibit A to this proxy statement (page 95).|
IMPACT ON EACH OTHER, OUR INDUSTRY AND OUR COMMUNITIES
Throughout 2021, we executed on our commitment to building an organization and society where equality is the norm, equity is achieved, and inclusion is universal so that we may all thrive. As of January 2022, 60% of our supervisor through senior manager roles are held by women and 25% of these leadership roles are held by people of color. For the fifth consecutive year, we were named to the Bloomberg Gender Equality Index and received a top ranking in the Human Rights Campaign Foundation’s Corporate Equality Index. We also accelerated our ESG journey in 2021 by calculating our Scope 1 & 2 GHG emissions and developing a comprehensive three-year ESG roadmap aligned with the United Nations Sustainable Development Goals and linked to our enterprise-wide business strategy. Our commitment to diversity extends to our vendors, suppliers and community partners, so we increased our support for our communities at a global, national and local level through philanthropy and volunteerism. In 2021, we committed $8.9 million to non-profit organizations focused on advancing social justice, diversity, equality, and inclusion, healthy equity, and resilience in healthcare. We also increased our diverse and small supplier spend to approximately $378 million, continued to fund minority-owned business certifications and expanded our vendor development and mentorship program. We believe that our ESG leadership in the healthcare and staffing industries will drive achievement of our long-term growth objectives and enhance shareholder value.
EXECUTION ON TECHNOLOGY AND DIGITAL STRATEGIC INITIATIVES
To ensure we are well-prepared to empower the future of healthcare delivery, in 2021 we increased our focus on and investments in technology and digital capabilities. We continued to execute on our customer focused, tech-enabled strategy by broadening our service and technology offerings, both organically and through strategic acquisitions. As part of our long-term growth strategy to add value for our clients and stockholders we acquired Synzi in April 2021, including its wholly owned subsidiary SnapMD, which offer virtual care technology platforms for the outpatient and home health markets, where more healthcare will be delivered in the future. We also accelerated the integration of technology-based solutions in our core recruitment processes through targeted investment in digital capabilities, mobile applications, and data analytics. We believe our investments in technology systems and digital capabilities will help us realize greater scale, agility and cost efficiencies and will provide a more seamless experience for our healthcare professionals and clients.
A SUSTAINED AND EFFECTIVE COVID-19 OPERATIONAL RESPONSE
As the COVID-19 pandemic continued to disrupt our communities and workplaces for a second straight year, the Company remained focused on our commitment to our team members, healthcare professionals, communities, clients and their patients. Throughout the pandemic, the care, support and safety of our team members and healthcare professionals has been at the forefront for us as we have provided resources and support to help them navigate and cope with the myriad challenges and stresses associated with the pandemic. With infections and the demand for healthcare professionals once again hitting record levels, the Company deployed more than 95,000 healthcare professionals. Guided by the Company’s mission to deliver the best talent and insights to help healthcare organizations optimize their workforce, AMN assisted clients with core and crisis staffing needs as well as vaccination implementation plans-of-action and end-to-end strategies for tracking, scheduling, and staffing. We believe that our effective response to this challenging environment was central to delivering strong 2021 performance by continuing to support and serve our healthcare clients and professionals in the rapidly changing environment while at the same time, executing on our long-term strategy.
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 2021.
|CONSOLIDATED REVENUE (MM)||CONSOLIDATED ADJUSTED EBITDA (MM)|
|2022 Proxy Statement||49|
The Compensation Committee placed considerable emphasis on our financial and operational performance over the past 12 months as well as our total shareholder return when determining our CEO’s 2021 cash bonus and 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, 2021.
|Common Stock Price|
at Beginning of
|One-Year Period Ended December 31, 2021||70||N/A||68.92|
|Two-Year Period Ended December 31, 2021||87||40||62.11|
|Three-Year Period Ended December 31, 2021||97||29||55.65|
|(3)||The price of our common stock on December 31, 2021 (the last trading day of the year) was $122.33. 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.|
2021 COMPENSATION ELEMENTS
The illustration below provides an overview of the principal components of our executive compensation program aimed at driving long-term shareholder value and rewarding strong financial and operational performance.
Other NEOs (Average):
|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 and market capitalization
|Annual Cash Incentive Bonus|
Other NEOs (Average):
|Drive achievement of annual strategic and financial objectives|
● 70% of target values are directly tied to measurable financial measures (known as the “Financial” component)
● Consolidated revenue (35%)
● Consolidated adjusted EBITDA (35%)
● 30% of target values are directly tied to non-financial factors (known as the “Leadership” component)
● One-year performance period, aligned with our strategic priorities
● Payout Range: 0-200% of target
Other NEOs (Average):
|Align with shareholders’ interests and drive achievement of our long-term strategic objectives|
● Equity mix of:
● Time-vested restricted stock units (35%)
● Performance-based restricted stock units based on total shareholder return (30%)
● Performance-based restricted stock units based on adjusted EBITDA performance (35%)
● Three-year performance/vesting period
● Actual payout dependent upon long-term financial and stock performance and retention
|(4)||The pie charts reflect the compensation components for Ms. Salka, Mr. Hagan and Ms. Jackson. It does not include Mr. Knudson, who joined the company in November 2021 or Mr. Scott, who resigned from the Company in August 2021.|
Numerous factors played a role in our 2021 compensation decisions with the overarching goal of closely linking pay to performance. In 2021, performance-based cash incentives and equity compensation (which is inherently linked to performance) comprised 85% of our CEO’s compensation, and 59% - 96% 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 actual 2021 compensation as set forth in the Summary Compensation Table below on page 69.
CEO COMPENSATION AT RISK (86% AT RISK)
As the Compensation Committee has consistently done, it based its 2021 compensation decisions on the Company’s 2021 financial goals and other actions influencing executive compensation based on the expectation that (1) we would achieve targeted revenue and adjusted EBITDA performance 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. Below is a breakdown of our current named executive officers’ actual compensation for 2021, as set forth in the Summary Compensation Table on page 69 below.
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NAMED EXECUTIVE OFFICER COMPENSATION IN 2021
Susan R. Salka
Jeffrey R. Knudson
Mark C. Hagan
Denise L. Jackson
Christopher S. Schwartz
Brian M. Scott
RESPONSE TO 2021 SAY-ON-PAY VOTE
At our 2021 Annual Meeting of Shareholders held on April 21, 2021, we received approximately 93% support (based on shares voting) on our advisory “say-on-pay” proposal regarding the compensation of our named executive officers. Our compensation program has remained consistent with that set forth in our 2021 proxy statement, and we believe the following four themes remain most important to our shareholders: (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, such as achievement of operational and strategic measures, and (4) variable compensation should be designed to motivate, reward and retain executives.
The Compensation Committee believes that our executive compensation program in 2021 satisfied each of the four themes identified above. In 2021, the Compensation Committee took the following actions:
|1.||Issued PRSUs tied to total shareholder return and annual adjusted EBITDA performance over a three-year period,|
|2.||Established performance goals of 1.3% and 8.25% year-over-year consolidated revenue and adjusted EBITDA performance, respectively, for the named executive officers to receive their target bonuses, and|
|3.||Adjusted base salaries, cash incentive annual bonus opportunity and long-term equity incentive grant values to more closely align with industry and executive compensation peer group pay practices, retain our talent, and reward strong performance.|
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 shareholders or proxy advisory services view certain pay practices with disfavor 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 that attract, incent, and retain executives.
|PRINCIPAL COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM|
● base salary,
● short-term or annual performance awards in the form of cash bonuses, and
● long-term incentive awards in the form of restricted stock units and performance restricted stock units,
We also provide:
● a non-qualified deferred compensation plan as well as benefits generally available to all employees,
● reimbursement for each named executive officer up to $25,000 for certain financial, estate planning and personal health and wellness expenses, and
● for our CEO, an employment agreement with severance provisions and, for our other named executive officers, severance agreements.
Base salary serves as the first principal component of our executive compensation program. In setting base salaries, the Compensation Committee considers several factors.
|FACTORS CONSIDERED BY THE COMPENSATION COMMITTEE IN SETTING BASE SALARIES|
● the market salary for similarly situated executives within our peer group and other companies of similar revenue size and market capitalization,
● our operational and financial performance,
● individual performance, skills, knowledge, tenure, experience, and responsibilities, and
● the recommendations of our CEO for our other named executive officers.
|2022 Proxy Statement||53|
We manage salary changes to fall within our annual budget. We evaluate our operational and financial performance against our annual strategic objectives and our annual operating plan. We evaluate our stock performance against our executive compensation peer group and the Russell 2000 Index. Our CEO bases her recommendations for our named executive officers on the same factors the Compensation Committee considers for her as CEO, and her recommendations are particularly helpful for the Compensation Committee to evaluate the other executive officers’ performance, knowledge, skills, experience, and responsibilities.
ANNUAL CASH PERFORMANCE BONUS
Annual cash performance bonus opportunities serve as the second principal component of our executive compensation program and are designed to incent and reward performance. The Company’s Bonus Plan is the mechanism by which the Compensation Committee provides cash bonus opportunities as a strong incentive for our executive officers to achieve annual financial targets that support our strategic objectives. Although certain details of the Bonus Plan may change from year to year, its principal elements remain consistent and include specific consolidated revenue and consolidated adjusted EBITDA financial goals tied to our annual operating plan. We refer to these financial metrics of the Bonus Plan as the Financial Component. The Compensation Committee sets threshold, “target” (i.e., 100% payout) and maximum amounts for bonuses and a weight for each metric that corresponds to the level of achievement required 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 (i.e., 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 hurdle ultimately achieved. The leadership component of the bonuses, which we refer to as the Leadership Component in this CD&A, has been based on non-financial factors, such as performance relative to direct competition, leadership, achievement of strategic objectives, including Company’s diversity-related objectives and effective leadership in line with our core values and executive leadership competencies.
In setting each named executive officer’s target bonus, the Compensation Committee evaluates benchmarking data for comparable positions generally and within our executive compensation peer group, the recommendations of our CEO (except with respect to her target bonus), individual performance, knowledge, experience and responsibilities.
|PRINCIPLES GOVERNING THE DESIGN OF CASH INCENTIVE BONUSES|
● the metrics must be tied to key indicators of our success and our annual objectives,
● the performance goals must be reasonably achievable and viewed as fair, while at the same time encouraging stretch performance,
● the metrics must be simple to understand and can be influenced by the executive,
● the portion of an individual’s target annual cash compensation attributable to target annual bonus should increase with successively higher levels of responsibility, and
● payouts should reflect our performance as well as the performance of the executive, including performance relative to the Company’s diversity, equality, equity, and inclusion objectives and furtherance of its culture of ethics.
The Compensation Committee may amend the Bonus Plan at any time and may also amend any outstanding award granted under the Bonus Plan.
Long-term incentives in the form of equity awards are the third principal component of our executive compensation program and serve to align the interests of our named executive officers with our shareholders. Under the Company’s 2017 Equity Plan, which we refer to in this CD&A as the Equity Plan, we grant equity awards with various vesting parameters, typically three years in length, to named executive officers and key employees to incentivize the achievement of our long-term 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 component. In 2021, we utilized PRSUs that payout based on the Company’s total shareholder return over three years and adjusted EBITDA Performance PRSUs that vest and payout at the end of three years but accrue value annually based on the Company’s achievement of annual year-over-year adjusted EBITDA performance targets. We refer to these awards as our TSR PRSUs and Adjusted EBITDA Performance PRSUs, respectively.
|PRINCIPLES GOVERNING THE DESIGN OF LONG-TERM INCENTIVES|
● performance periods should cover multiple years to create balance between short- and long-term objectives,
● 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,
● awards should support retention,
● aggregate annual share usage should be carefully managed to avoid excessive levels of shareholder value transfer, and
● 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 operating plan
ROLES AND RESPONSIBILITIES
|Responsible Party||Primary Roles and Responsibilities Relating to Compensation Decisions|
|Compensation Committee||The primary responsibilities of the Compensation Committee include oversight of our executive compensation programs. Specifically, they include:|
|(Comprised solely of independent directors)|
● Review the design of, and risks associated with, the Company’s compensation policies and practices, including our Equity Plan and Bonus Plan;
● Approve annual performance goals and objectives for our Chief Executive Officer;
● Determine the annual compensation of our Chief Executive Officer, including the performance metrics and goals for performance-based long-term and short-term incentive compensation;
● Conduct an annual evaluation of our Chief Executive Officer’s performance and review such evaluation with the independent members of the Board;
● Approve the annual compensation of our other named executive officers and executives that directly report to our CEO (we refer to this group of executives, including the Chief Executive Officer, as the CEO Committee), including performance metrics and goals for performance-based long-term and short-term incentive compensation;
● Hire the Company’s independent compensation consultant; and
● Approve the composition of our executive compensation peer group.
|Independent Members of the Board|
● Participate in and consider the Compensation Committee’s annual evaluation of our Chief Executive Officer’s performance; and
● Consider the Committee’s actions regarding the compensation of our Chief Executive Officer and, if deemed appropriate or necessary, ratify such actions.
(Frederic W. Cook & Co., Inc.)
● Provide the Compensation Committee with advice regarding the design of all elements of the Company’s executive compensation program;
● Review and provide an assessment of the material risks associated with the Equity Plan and Bonus Plan;
● Provide advice to the Compensation Committee regarding the composition of the compensation peer groups;
● Provide expert knowledge of marketplace trends and best practices relating to executive compensation and competitive pay levels;
● Provide advice and recommendations regarding the compensation of the Company’s named executive officers; and
● Regularly attend and actively participate in meetings of the Compensation Committee, including executive sessions.
|Chief Executive Officer|
● Recommend annual non-financial performance goals and objectives for the CEO Committee (other than herself);
● Conduct an annual performance evaluation for each member of the CEO Committee (other than herself) and discuss the results with the Committee; and
● Make recommendations to the Compensation Committee with respect to the compensation of the members of the CEO Committee (other than herself) based on the final assessment of their performance.
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).
|2022 Proxy Statement||55|
With respect to our Bonus Plan, the Compensation Committee determines the performance metrics for the award each year. In December, the Board approves our annual operating plan and financial targets for the upcoming year. Once our annual operating plan is approved, the Compensation Committee sets the range of financial performance targets for our named executive officers under the Bonus Plan in early January of each year. These financial targets set by the Compensation Committee correspond to our annual operating plan financial targets approved by the Board.
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. In the Compensation Committee’s discretion, it may authorize our CEO to grant equity awards to employees that do not serve on the CEO Committee within certain individual and aggregate thresholds that the Compensation Committee approved. The Compensation Committee regularly reviews any awards granted by our CEO.
On an annual basis, the Compensation Committee reviews potential peer companies to help assess the competitiveness of compensation and practices for our executives and approves an appropriate executive compensation peer group. Accordingly, to understand our position within the marketplace and make 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.
The Compensation Committee believes an important factor to consider in ensuring that our compensation program remains competitive, is the proper identification and selection of the executive compensation peer group, as we may compete for executive talent with such peer companies. The Compensation Committee selects peers from the healthcare, commercial and professional services industries, and targets companies operating in the healthcare and employment services, healthcare technology and diversified support services sectors. Our 2021 executive compensation peer group, as determined by our Compensation Committee, was as follows:
|OUR 2021 EXECUTIVE COMPENSATION PEER GROUP|
● Allscripts Healthcare Solutions, Inc.
● Amedisys, Inc.
● Cross Country Healthcare, Inc.
● Healthcare Services Group, Inc.
● TriNet Group, Inc.
● Insperity, Inc.
● Kforce, Inc.
● Korn/Ferry International
● LHC Group, Inc.
● MEDNAX, Inc.
● ASGN Incorporated
● Premier, Inc.
● Robert Half International Inc.
● TrueBlue, Inc.
Each July the Compensation Committee evaluates our executive compensation peer group for the upcoming year primarily using industry, revenue and market capitalization of companies from whom AMN competes for talent. When evaluating our 2021 executive compensation peer group, the Compensation Committee reviewed (1) our 2021 executive compensation peer group, (2) the peers that Institutional Shareholder Services lists for us that were not in our 2021 executive compensation peer group, (3) peers that Glass Lewis lists for us that were not in our 2021 executive compensation peer group, (4) companies that were not in our 2021 executive compensation 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 to add R1 RCM, Inc. to our peer group for 2022.
Our 2021 executive compensation peer group of 14 companies ranged from approximately $1.5 billion to $6.5 billion in revenues for the year ended December 31, 2021, and from approximately $954 million to $12 billion in market capitalization. For purposes of comparison, our consolidated revenue and market capitalization as of December 31, 2021 was approximately $3.98 billion and $5.7 billion, respectively, placing us fifth in our 2021 executive compensation peer group for revenue and fourth for market capitalization.
TRAILING TWELVE MONTHS REVENUE ($MM) AS OF DECEMBER 31, 2021
MARKET CAPITALIZATION ($MM) AS OF DECEMBER 31, 2021
|(1)||Market capitalization and revenue are reflected as of December 31, 2021 with exception to Korn Ferry, which is based on the trailing twelve months ending January 31, 2022.|
The principal 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 receives benchmarking information for each of these components at the median and 75th percentile utilizing a blend of companies, including those within our executive compensation peer group, that are similar 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 planning considerations.
|2022 Proxy Statement||57|
Our named executive officers’ 2021 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, estate planning and personal health and wellness expenses and (5) certain other additional compensation, such as matching deferred compensation contributions. We discuss each component of our 2021 compensation program for our named executive officers in more detail below.
2021 BASE SALARY
In late 2020, the Compensation Committee reviewed annual base salary levels for the named executive officers and, after careful consideration, approved increases effective January 1, 2021 ranging from zero to two percent from the previous year, as reflected in the table below. In making its determinations, the Compensation Committee considers, among other things, (1) the market salary for similarly situated executives within our executive compensation peer group and other companies of similar revenue size and market capitalization, (2) Company operational and financial performance and (3) individual performance.
When benchmarking Ms. Salka’s 2021 base salary, it was slightly above the median among other CEOs within our 2021 executive compensation peer group.
|Named Executive Officer||2020 Salary
|Susan R. Salka||1,030,000||1,030,000||0|
|Jeffrey R. Knudson(1)||—||600,000||—|
|Christopher S. Schwartz(2)||—||249,879||—|
|Brian M. Scott(3)||520,000||520,000||0|
|Mark C. Hagan||500,000||510,000||2|
|Denise L. Jackson||440,000||440,000||0|
|(1)||Mr. Knudson joined the Company on November 2, 2021 and assumed the role as Chief Financial Officer and Treasurer on November 8, 2021.|
|(2)||Mr. Schwartz became Interim Principal Financial Officer upon Mr. Scott’s resignation, effective August 9, 2021, and resumed his previous position on November 8, 2021.|
|(3)||Mr. Scott resigned from the Company effective August 9, 2021.|
2021 BONUS PLAN
TARGET BONUS LEVELS
In December 2020, the Compensation Committee reviewed the 2021 target bonus levels for our named executive officers, which we express as a percentage of annual base salary. In furtherance of the Company’s pay-for-performance philosophy, the Compensation Committee maintained the existing bonus percentage target for each named executive officer in 2021.
The table below shows 2021 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 2020.
|Named Executive Officer||2020
(% of Salary)
(% of Salary)
|Susan R. Salka||120||120||1,236,000||1,236,000|
|Jeffrey R. Knudson(4)||—||—||—||—|
|Christopher S. Schwartz(5)||—||25||—||62,470|
|Brian M. Scott(6)||100||100||520,000||520,000|
|Mark C. Hagan||75||90||375,000||459,000|
|Denise L. Jackson||75||90||330,000||396,000|
|(4)||Mr. Knudson joined the Company on November 2, 2021 and assumed the role of Chief Financial Officer and Treasurer on November 8, 2021, but was not eligible to participate in the Bonus Plan in 2021.|
|(5)||Mr. Schwartz became Interim Principal Financial Officer upon Mr. Scott’s resignation, effective August 9, 2021, and resumed his previous position on November 8, 2021 and no longer serves as a named executive officer.|
|(6)||Mr. Scott resigned from the Company effective August 9, 2021 and is no longer a named executive officer of the Company.|
The dollar amount of Ms. Salka’s 2021 cash bonus target amount fell at the 50th percentile among CEOs within our 2021 executive compensation peer group based on the most recent proxy statements filed by our executive compensation peer group, which the Compensation Committee believed was appropriate.
STRUCTURE OF OUR BONUS PLAN
In 2021, and consistent with previous years, the Financial Component comprised 70% of our named executive officers’ total target bonuses and the Leadership Component comprised the remaining 30%.
For 2021, consistent with prior years’ practice, the Compensation Committee tied the Financial Component of the Bonus Plan to the achievement of our 2021 annual operating plan revenue and pre-bonus adjusted EBITDA targets. We use pre-bonus adjusted EBITDA, which we refer to as Pre-Bonus AEBITDA(1), solely to determine bonuses. Pre-bonus AEBITDA excludes from Adjusted EBITDA the payment of bonuses, the impact of acquisitions that were not included in the Company’s operating plan, and certain increases to the Company’s legal expense accruals not contemplated by its 2021 annual operating plan. For information on the calculation of Pre-Bonus AEBITDA, and a reconciliation of our 2021 net income to adjusted EBITDA and Pre-bonus AEBITDA, please see Exhibit A to this proxy statement (page 95).
In 2021, the weighting of the performance metrics reflected below were consistent for each of our named executive officers:
|Consolidated Revenue||Pre-Bonus AEBITDA||Leadership Component|
|(1)||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.|
RATIONALE FOR ANNUAL BONUS PERFORMANCE OBJECTIVES
In 2021, the Compensation Committee continued to utilize the Financial and Leadership Components as the annual performance metrics under the Bonus Plan for a variety of reasons, which are described in more detail below.
|●||Consolidated Revenue (35%): The Compensation Committee believes revenue remains one of the most reliable measurements to evaluate the success of our growth strategy and operational performance. It also selected revenue because investors focus on revenue growth as a metric when evaluating our performance.|
|●||Pre-Bonus AEBITDA (35%): The Compensation Committee chose Pre-Bonus AEBITDA because adjusted EBITDA is widely accepted among management, the Board, shareholders and financial analysts as a measurement of our profitability and performance. Revenue and adjusted EBITDA are routinely areas of focus during our earnings calls and meetings with investors. Furthermore, the Compensation Committee believes Pre-Bonus AEBITDA remains an objective measure of management’s performance because it excludes items over which management has less control, such as amortization, interest expense and taxes.|
|●||The actual consolidated revenue and consolidated Pre-Bonus AEBITDA targets that the Compensation Committee established as the basis for paying “target” payouts under the 2021 Financial Component for each named executive officer 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 under the Financial Component required achievement of 90% of our 2021 annual operating plan target for each of Pre-Bonus AEBITDA and consolidated revenue. Receipt of the target bonus amount for each of the consolidated revenue and Pre-Bonus AEBITDA metrics required the Company to meet 100% of our 2021 annual operating plan for that metric, which represented roughly 1.3% year-over-year consolidated revenue growth and 8.25% Pre-Bonus AEBITDA performance, respectively.|
|●||The Company’s consolidated Pre-Bonus AEBITDA performance target for 2021 relative to its annual consolidated revenue growth target reflects 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.|
|●||Leadership Component (30%): The Compensation Committee uses the Leadership Component to, among other things, distinguish among individuals with respect to non-financial metrics. While the metrics may differ slightly for each named executive officer, we generally measure the Leadership Component based upon our named executive officers’ leadership, personal performance, achievement of diversity-related objectives and execution on our strategic and operational initiatives.|
2021 BONUS PLAN PAYOUTS
We have included a table below ($ in thousands) that summarizes how we performed against the target financial performance metrics that we utilized when determining the Financial Component portion of our named executive officers’ bonuses for 2021.
|2022 Proxy Statement||59|
With respect to the Leadership Component, the Compensation Committee believes our named executive officers demonstrated strong leadership in 2021 resulting in exceptional financial and operational results for the Company. Specifically, we (i) effectively responded to the continued challenges and opportunities that arose as the pandemic persisted and labor market shortages increased, (ii) continued our strategic development of mobile technology platforms and remained focused on being a leader in providing a full spectrum of workforce technology, staffing and search solutions, (iii) significantly grew our team, including key leadership positions, blending deep industry experience with dynamic new leaders and (iv) continued fostering an inclusive environment and diverse workforce that we believe drives innovation and better outcomes.
The 2021 annual operating plan did not reflect the potential financial impact of any acquisitions. As such, the Compensation Committee did not include the financial impact of the Company’s Synzi and SnapMD acquisitions when determining the Company’s 2021 bonus plan revenue and adjusted EBITDA. Excluding the impact of such acquisitions, the Company’s 2021 revenue and Pre-Bonus AEBITDA results exceeded its 2021 annual operating plan and the revenue and Pre-Bonus AEBITDA Bonus Plan targets approved by the Compensation Committee in January 2021 by 66% and 101%, respectively. As a result of our leadership’s strong performance, the Company’s named executive officers earned maximum payouts of 200% above their target long-term incentive compensation based on Pre-Bonus AEBITDA targets.
Based on outcomes, the Company and its Compensation Committee believe that the Bonus Plan is working as designed and intended. The illustrations below demonstrate the Company’s reported performance compared to annual operating plan target for each of the elements of the Financial Component together with an illustration of the Company’s 2021 bonus payout compared to the Financial Component targets.
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 paid under the Financial Component, which made up 70% of the total target bonus amount. Mr. Scott, Mr. Schwartz and Mr. Knudson are not reflected in the tables below. Mr. Scott’s employment terminated prior to December 31, 2021, so he did not earn an annual cash incentive bonus. Mr. Schwartz served as the interim PFO and did not receive an annual cash incentive under the Bonus Plan; however, he was eligible for the Company’s Performance Incentive Bonus with a target of 25% of his salary. Based on the Company’s record financial performance, Mr. Schwartz earned $124,940, which represents the maximum payout available for him. Mr. Knudson joined the Company on November 2, 2021, so he was not eligible to receive an annual cash incentive bonus under the Bonus Plan. The Compensation Committee took this and other considerations into account at that time and determined it would be more appropriate to offer Mr. Knudson a $900,000 sign-on bonus, which was paid on March 11, 2022.
MS. SALKA’S BONUS METRICS
% of Target
|% of Target|
Bonus Earned under
% of Target
% of Target
Bonus Earned under
|Total Bonus Earned: $2,472,000|
MR. HAGAN’S BONUS METRICS
% of Target
|% of Target|
Bonus Earned under
% of Target
% of Target
Bonus Earned under
|Total Bonus Earned: $918,000|
|2022 Proxy Statement||61|
MS. JACKSON’S BONUS METRICS
% of Target
|% of Target|
Bonus Earned under
% of Target
% of Target
Bonus Earned under
|Total Bonus Earned: $792,000|
LONG-TERM INCENTIVE COMPENSATION
2021 LONG-TERM INCENTIVE EQUITY AWARDS
In 2021, the Compensation Committee granted equity awards to each named executive officer and the Committee believes these awards serve as a key component of their total compensation package. Consistent with prior years, we used a mix of time-based restricted stock units, which we refer to as RSUs in this CD&A, and PRSUs. All equity awards that we granted to our named executive officers (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 our equity agreements refer to as “retirement.”
Ms. Salka and Ms. Jackson each satisfy the requirements for retirement eligibility under their respective 2021 equity awards.
AGGREGATE GRANT DATE FAIR VALUE
The chart below reflects the aggregate grant date fair value of each equity award type that we granted to each named executive officer in 2021.
|Named Executive Officer||AGD Fair
Value of 2021
|Susan R. Salka||1,200,012||999,999||3,443,683||5,643,694|
|Jeffrey R. Knudson||-||-||2,999,940||2,999,940|
|Christopher S. Schwartz||-||18,769||206,185||224,954|
|Brian M. Scott||449,971||375,034||674,993||1,499,997|
|Mark C. Hagan||1,590,540||262,490||472,495||2,325,524|
|Denise L. Jackson||1,486,796||176,017||316,817||1,979,630|
Each of our named executive officers received PRSU grants in January 2021. The PRSUs represented 80% or more of the AGD Fair Value of the total equity grant value for Ms. Jackson and Mr. Hagan. While Ms. Salka received PRSU grants in January 2021, the Compensation Committee elected to wait to consider a grant of RSUs for Ms. Salka until September, when it had better visibility of our year-end financial, operational, and stock performance. For Mr. Scott, PRSUs represented 55% of the AGD Fair Value of his equity awards; however, he forfeited all unvested equity awards upon his resignation in August 2021, since he was not retirement eligible because he did not meet the age and service time requirements required in our equity agreements.
In addition to 824 RSUs we granted to Mr. Schwartz in January 2021, he also received an additional equity award of 1,560 RSUs in July 2021 in connection with his appointment to Interim Principal Financial Officer following the announcement of Mr. Scott’s resignation. Due to the timing and interim nature of his role, Mr. Schwartz did not receive the same equity mix as our other named executive officers, so PRSUs only represented 8% of the AGD Fair Value of the total equity grant value for Mr. Schwartz in 2021.
Mr. Knudson received an equity award of 29,262 RSUs in connection with his appointment as Chief Financial Officer and Treasurer in November 2021. The Compensation Committee did not grant Mr. Knudson PRSUs at that time, because it thought it would be more appropriate to wait until it approved equity awards for the other named executive officers in 2022.
In August 2021, the Compensation Committee responded to the challenging talent environment and exceptional Company performance by approving special performance equity awards for Mr. Hagan and Ms. Jackson tied to the Company’s total shareholder return to incent and retain these executives.
In September 2021, based on the Company’s financial and operational results and total shareholder return, the Compensation Committee awarded Ms. Salka with 30,717 RSUs with an AGD Fair Value of $3,443,683. This RSU award aligns with the value received by CEOs at the 75th percentile of the Company’s executive compensation peer group, which we believe is appropriate based on our financial results and increase in long-term shareholder value. The Compensation Committee approved the 55% increase in our CEO’s AGD Fair Value in 2021 from 2020 in part due to the Company’s strong financial and operational performance in 2021, significant advancements against our long-term strategic plans as well as peer group and other compensation benchmarking. We believe that the AGD Fair Value of her equity awards placed her at the 75th percentile among CEOs within our 2021 executive compensation peer group for long-term incentive compensation.
To provide further clarity on our equity compensation practices, the chart below reflects the change in the AGD Fair Value of all 2021 equity awards granted to our named executive officers against the AGD Fair Value of all 2020 equity awards.
|2022 Proxy Statement||63|
|Named Executive Officer||AGD Fair Value of
2020 Equity Awards
|AGD Fair Value of
2021 Equity Awards
|Susan R. Salka||3,632,452||5,643,694||2,011,242||55|
|Jeffrey R. Knudson||-||2,999,940||-||-|
|Christopher S. Schwartz||-||224,954||-||-|
|Brian M. Scott||1,100,012||1,499,997||399,985||36|
|Mark C. Hagan||830,405||2,325,524||1,495,119||180|
|Denise L. Jackson||660,064||1,979,630||1,319,566||200|
TSR PRSUs represented approximately 21% - 68% of the total 2021 equity grant value that we awarded to Ms. Salka, Mr. Hagan and Ms. Jackson based on the AGD Fair Value. Each of our executive officers received a TSR PRSU grant in January each year that 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 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.
In August 2021, the Compensation Committee responded to the challenging talent environment and exceptional Company performance by approving special performance equity awards based on TSR for Mr. Hagan and Ms. Jackson to incent and retain these valuable executives. Similar to the TSR PRSUs granted in January, the August TSR PRSU awards are also tied to the Company’s relative and absolute TSR compared to the Russell 2000. Unlike the January TSR PRSUs, Mr. Hagan and Ms. Jackson’s August TSR PRSUs are earned over a two-year performance period with an opportunity for accelerated vesting of 50 percent of the PRSU on the first-year anniversary if the Company’s relative TSR is equal to or greater than the 60th percentile. Ms. Salka did not receive a TSR PRSU award in August 2021.
The table below discloses the percentage of the January and August 2021 target PRSUs that may be earned depending on the actual results of the Company’s TSR Measurement as of December 31, 2023.(1)
|Relative TSR Percentile Rank||% of 2021 TSR PRSUs Earned if
Absolute TSR is Negative(2)
|% of 2021 TSR PRSUs that are Earned if|
Absolute TSR is Positive
|(1)||As set forth in the Grants of Plan-Based Awards Table, the target number of TSR PRSUs that we granted in January 2021 for each named executive officer is as follows: (i) for Ms. Salka, 13,441; (ii) for Mr. Scott, 5,040; (iii) for Mr. Hagan, 3,528 and (iv) for Ms. Jackson, 2,366. Due to the interim nature of Mr. Schwartz’ role and the timing of Mr. Knudson’s appointment, the Committee elected to wait until January 2022 to approve TSR PRSUs awards for Mr. Schwartz and Mr. Knudson. As discussed above, in August 2021, the Compensation Committee approved an additional TSR PRSU award for Mr. Hagan and Ms. Jackson with a target of 13,000 TSR PRSUs.|
|(2)||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 PERFORMANCE PRSUs
In 2021, the Compensation Committee determined it best to dedicate a significant portion of the PRSUs to focus our named executive officers on achieving an adjusted EBITDA performance target of $321 million in 2021 with annual year-over-year adjusted EBITDA performance rate targets of 2% in 2022 and 2% in 2023(1) by issuing Adjusted EBITDA Performance PRSUs. For these awards, the number of shares that could ultimately be earned ranges from 0% to 200% of the target number of PRSUs depending on actual adjusted EBITDA performance in 2021 and annual year-over-year adjusted EBITDA performance in 2021 and 2022.
|(1)||As set forth in the Grants of Plan-Based Awards Table, the target number of adjusted EBITDA PRSUs that we granted in 2021 for each named executive officer is as follows: (i) for Ms. Salka, 14,652; (ii) for Mr. Scott, 5,495; (iii) for Mr. Schwartz, 275; (iv) for Mr. Hagan, 3,846, and (v) for Ms. Jackson, 2,579.|
RSUs that we granted in 2021 vest ratably on each of the first three anniversaries of the grant date.
RESULTS OF OUR 2019 PERFORMANCE RESTRICTED STOCK UNIT AWARDS
In early 2022, the Compensation Committee performed the TSR Measurement for the 2019 TSR PRSU awards for the period January 1, 2019 through December 31, 2021
2019 TSR PRSUS:
|Named Executive Officer||Number of 2019|
TSR PRSUs Earned
|Susan R. Salka||23,450|
|Jeffrey R. Knudson(1)||-|
|Christopher S. Schwartz(2)||-|
|Brian M. Scott(3)||-|
|Mark C. Hagan||4,407|
|Denise L. Jackson||4,583|
|(1)||Mr. Knudson was not employed by the Company when it issued the 2019 TSR PRSUs and therefore did not have any of these awards.|
|(2)||Mr. Schwartz was not a NEO when the Company issued the 2019 TSR PRSUs and therefore did not receive a TSR PRSU award in 2019.|
|(3)||Mr. Scott forfeited his 2019 TSR PRSU award upon his separation from service effective August 9, 2021.|
2019 ADJUSTED EBITDA MARGIN PRSUs:
In February 2022, the Compensation Committee determined the Company’s 2021 adjusted EBITDA margin for the purposes of determining performance under the 2019 adjusted EBITDA margin PRSUs that payout in shares of the Company’s stock. Based on these results, these awards paid out at the maximum of 200% of target. Below we set forth the 2021 Adjusted EBITDA Margin metrics for target and maximum payout alongside the actual 2021 Adjusted EBITDA Margin achieved and number of PRSUs earned:
AEBITDA Margin %
|2022 Proxy Statement||65|
|Named Executive Officer||Number of 2019 Adjusted EBITDA|
Margin PRSUs Earned
|Susan R. Salka||41,510|
|Jeffrey R. Knudson(1)||-|
|Christopher S. Schwartz||1,078|
|Brian M. Scott(2)||0|
|Mark C. Hagan||7,798|
|Denise L. Jackson||8,114|
|(1)||Mr. Knudson was not employed by the Company when it issued the 2019 EBITDA PRSUs and therefore did not receive this award.|
|(2)||Mr. Scott forfeited his 2019 EBITDA PRSU award upon his separation from service effective August 9, 2021.|
OTHER COMPENSATION ELEMENTS
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 based on our review of peer market data indicating that a deferred compensation plan was a significant component of executive compensation. Our named executive officers are not eligible to participate in our 401(k) if they exceed the compensation threshold set by the Internal Revenue Service, which is primarily designed to assist us in satisfying discrimination testing performed on our 401(k) plan.(3) 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.
In addition, all equity awards allow for continued vesting of outstanding equity awards if a grantee terminates his or her employment (other than for cause or due to a change in control) after satisfying certain age and service time requirements, which our equity agreements refer to as “retirement eligible.”
We also offer healthcare insurance and other employee benefits 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.
|(3)||Mr. Knudson was eligible to participate in our 401(k) plan when he joined the Company in November 2021 and continues to be eligible in 2022 until he exceeds the compensation threshold set by the Internal Revenue Service for 2022.|
In addition to the benefits described 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 Compensation Committee approved this limited perquisite 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.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
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.
EQUITY OWNERSHIP, CLAWBACK AND NO PLEDGING POLICIES
Our named executive officers are subject to meaningful equity ownership requirements and a securities trading policy that prohibits trading on material information and engaging in inappropriate transactions such as pledging and hedging. We set forth a summary of these requirements and policies below. Additional details related to these requirements and policies are contained in the Governance Guidelines posted on the Company’s website.
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 our named executive officers and other executives to maintain the following:
|Chief Executive Officer||5x Base Salary|
|Named Executive Officers||2x Base Salary|
|Other CEO Committee Members||1.5x Base Salary|
The value of unvested RSUs and vested or unvested stock appreciation rights and options are not considered when determining whether a named executive officer satisfies our equity ownership requirements. Our Chief Executive Officer, Named Executive Officers and other CEO Committee Members are subject to equity ownership requirements, which requires them to retain 50% of net vested shares from equity awards issued by the Company until they have reached the applicable ownership requirements reflected above. As of March 14, 2022, all of our named executive officers satisfied our equity ownership requirements, with the exception of Mr. Knudson, whose employment with the Company began on November 2, 2021.
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.
The TCJA repealed the performance-based exception, 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. Because many different factors influence a well-rounded, comprehensive executive compensation program, some of the compensation we provide to our named executive officers is likely not to be fully deductible for tax purposes due to Section 162(m).
Overall, the Compensation Committee believes the Company performed well during 2021 and continued to execute on the Company’s long-term strategic plan. We achieved year-over-year consolidated revenue and consolidated adjusted EBITDA performance of approximately 66% and 98%, respectively. The Compensation Committee believes it has designed the 2022 compensation structure to provide for important short- and long-term performance components that are aligned with shareholders’ interests, consistent with the market environment and tailored specifically to us.
|2022 Proxy Statement||67|
The Compensation Committee approved the annual base salaries for the named executive officers for 2022 as follows:
|Named Executive Officer||2021
|Susan R. Salka||1,030,000||1,060,000||3|
|Jeffrey R. Knudson||600,000||600,000||-|
|Mark C. Hagan||510,000||525,000||3|
|Denise L. Jackson||440,000||460,000||5|
The base salaries of our named executive officers reflect a 0% to 5% increase. The 2022 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 2021 organic growth and core business performance exceeded targeted expectations and its commitment to maintain a pay for performance environment.
In January 2022, 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 not to increase the 2021 bonus target as a percentage of salary for Mr. Hagan and Ms. Jackson but determined to slightly increase the bonus target for Ms. Salka based on executive compensation peer group and market benchmarking data. Mr. Knudson joined the Company in November 2021 and became eligible for our Performance Incentive Bonus program effective January 2022. We set forth the 2022 target bonuses for each named executive officer as a percentage of salary below.
|Named Executive Officer||2021
(% of Salary)
(% of Salary)
|Susan R. Salka||120||125|
|Jeffrey R. Knudson||-||90|
|Mark C. Hagan||90||90|
|Denise L. Jackson||90||90|
After careful consideration of the factors set forth above in the subsection of this CD&A entitled “Principal Components of Our Compensation Program — Annual Cash Performance Bonus,” the Compensation Committee decided to slightly adjust the bonus structure for named executive officers from 2021 by increasing the amount that can be earned for achieving 2022 adjusted EBITDA target from 35% to 40% and decreasing the amount that can be earned for achieving 2022 revenue target from 35% to 30%. The target goals for each of the financial metrics are consistent with the targets under our 2022 annual operating plan and generally require growth that exceeds our estimate of anticipated industry performance. For our CEO, we believe her 2022 bonus target percentage falls near the 50th percentile among CEOs within our 2022 peer group.
LONG-TERM EQUITY INCENTIVES
The Compensation Committee continues to believe that aligning its pay for performance philosophy, goals and objectives is the foundation upon which it evaluates its annual long-term incentive award strategy. In 2022, the Compensation Committee utilized a combination of (1) TSR PRSUs, (2) adjusted EBITDA performance PRSUs and (3) time-vested RSUs and increased, from 65% to 70%, the allocation attributable to performance awards compared to 2021. In 2022, the Compensation Committee targeted an allocation of 30% TSR PRSUs, 35% adjusted EBITDA performance PRSUs and 35% time-vested RSUs (as a percentage of the estimated AGD Fair Value of all 2022 equity awards) in 2022.
The following table shows the compensation earned or accrued by our named executive officers for the three fiscal years ended December 31, 2021, 2020 and 2019.
|Named Executive Officer and Position||Year||Salary
|Susan R. Salka
PEO,(6) President & CEO
|Brian M. Scott
Former PFO,(9) CFO, CAO & Treasurer
|Christopher S. Schwarz
Interim Chief Financial Officer
|Jeffrey R. Knudson
PFO,(9) CFO & Treasurer
|Mark C. Hagan
Chief Information & Digital Officer
|Denise L. Jackson
Chief Legal Officer & Corporate Secretary
|(1)||Salary includes all salary amounts deferred by the named executive officers under the Deferred Compensation Plan.|
|(2)||This column reflects the dollar amounts for the years shown of the AGD Fair Value of RSUs and PRSUs granted to our named executive officers. For PRSUs, which are subject to performance conditions, we report the grant date fair value based upon the probable outcome of such conditions and that value is consistent with the estimate of aggregate compensation cost to be recognized over the service period as of the grant date, excluding the effect of estimated forfeitures. For additional information on the valuation assumptions used in the calculation of these amounts, refer to notes 1(o) and 11 to the financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on February 24, 2022.|
|(3)||This column consists of cash awards paid to our named executive officers pursuant to our Bonus Plan and generally sets forth bonus amounts in the year in which they are earned, although we typically pay them in the following fiscal year.|
|(4)||This column consists of compensation received by our named executive officers in the form of matching contributions to the Deferred Compensation Plan and Company-paid life insurance premiums and health insurance, including reimbursements for certain financial and estate planning and personal health and wellness expenses incurred by our named executive officers not to exceed $25,000 annually. For 2021, we paid reimbursements as follows: (1) $25,000 for Ms. Salka, (2) $20,000 for Mr. Hagan, (3) $2,500 for Mr. Knudson, and (4) $20,415 for Ms. Jackson. This column also reflects matching contributions under the Deferred Compensation Plan as follows: (1) $2,266,002 for Ms. Salka, (2) $79,560 for Mr. Scott, (3) $31,083 for Mr. Schwartz, (4) $89,625 for Mr. Hagan, and (5) $77,990 for Ms. Jackson.|
|(5)||30,717 RSUs with an AGD Fair Value of $3,443,683, 13,441 TSR PRSU with an AGD Fair Value of $1,200,012 and 14,652 adjusted EBITDA margin PRSUs with an AGD Fair Value of $999,999, comprise the amount of Ms. Salka’s 2021 stock awards. Assuming the highest level of performance conditions will be achieved for the 13,441 TSR PRSU award and the 14,652 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $2,099,955 and $1,999,998, respectively.|
|(6)||“PEO” refers to our principal executive officer.|
|(7)||19,625 RSUs with an AGD Fair Value of $1,357,461, 13,335 TSR PRSU with an AGD Fair Value of $1,049,998 and 19,625 adjusted EBITDA margin PRSUs with an AGD Fair Value of $1,224,993, comprise the amount of Ms. Salka’s 2020 stock awards. Assuming the highest level of performance conditions will be achieved for the 13,335 TSR PRSU award and the 19,625 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $1,837,477 and $2,449,985, respectively.|
|(8)||20,755 RSUs with an AGD Fair Value of $1,237,828, 13,400 TSR PRSUs with an AGD Fair Value of $989,992 and 20,755 adjusted EBITDA margin PRSUs with an AGD Fair Value of $1,155,016 comprise the amount of Ms. Salka’s 2019 stock awards. Assuming the highest level of performance conditions will be achieved for the 13,400 TSR PRSU award and the 20,755 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $1,732,486 and $2,310,032, respectively.|
|(9)||“PFO” refers to our principal financial officer.|
|(10)||Mr. Scott was not retirement eligible upon his date of separation of service from the company; therefore, he forfeited all unvested equity awards.|
|2022 Proxy Statement||69|
|(11)||6,168 RSUs with an AGD Fair Value of $385,007, 4,191 TSR PRSUs with an AGD Fair Value of $329,999 and 6,168 adjusted EBITDA margin PRSUs with an AGD Fair Value of $385,007 comprise the amount of Mr. Scott’s 2020 stock awards. Mr. Scott was not retirement eligible upon his date of separation of service from the company; therefore, he forfeited the unvested shares for these awards.|
|(12)||6,352 RSUs with an AGD Fair Value of $353,489, 4,101 TSR PRSUs with an AGD Fair Value of $302,982 and 6,352 adjusted EBITDA margin PRSUs with an AGD Fair Value of $353,489 comprise the amount of Mr. Scott’s 2019 stock awards. Mr. Scott was not retirement eligible upon his date of separation of service from the company; therefore, he forfeited the unvested shares for these awards.|
|(13)||824 RSUs with an AGD Fair Value of $56,238, 1,560 RSUs with an AGD Fair Value of $149,947 and 275 adjusted EBITDA margin PRSUs with an AGD Fair Value of $18,769 comprise the amount of Mr. Schwartz 2021 stock awards. Assuming the highest level of performance conditions will be achieved for the 275 adjusted EBITDA margin PRSU award, the AGD Fair Value of the award would equal $37,538.|
|(14)||Mr. Knudson joined the Company on November 2, 2021, so he was not eligible to receive an annual cash incentive bonus under the Bonus Plan. The Compensation Committee took this and other considerations into account at that time and determined it would be more appropriate to offer Mr. Knudson a $900,000 sign-on bonus, which was paid on March 11, 2022.|
|(15)||29,262 RSUs with an AGD Fair Value of $2,999,940 comprise the amount of Mr. Knudson’s 2021 stock awards.|
|(16)||6,923 RSUs with an AGD Fair Value of $472,495, 3,528 TSR PRSUs with an AGD Fair Value of $314,980, 13,000 TSR PRSUs with an AGD Fair Value of $1,275,560 and 3,846 adjusted EBITDA margin PRSUs with an AGD Fair Value of $262,490 comprise the amount of Mr. Hagan’s 2021 stock awards. Assuming the highest level of performance conditions will be achieved for the 3,528 TSR PRSU award, the 13,000 TSR PRSU award, and the 3,846 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $551,215, $2,232,230, and $524,979, respectively.|
|(17)||3,535 RSUs with an AGD Fair Value of $220,655, 2,603 RSUs with an AGD Fair Value of $199,962, 2,402 TSR PRSUs with an AGD Fair Value of $189,133 and 3,535 adjusted EBITDA margin PRSUs with an AGD Fair Value of $220,655 comprise the amount of Mr. Hagan’s 2020 stock awards. Assuming the highest level of performance conditions will be achieved for the 2,402 TSR PRSU award and the 3,535 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $330,944 and $441,309, respectively.|
|(18)||4,642 RSUs with an AGD Fair Value of $316,817, 2,366 TSR PRSUs with an AGD Fair Value of $211,236, 13,000 TSR PRSUs with an AGD Fair Value of $1,275,560 and 2,579 adjusted EBITDA margin PRSUs with an AGD Fair Value of $176,017 comprise the amount of Ms. Jackson’s 2021 stock awards. Assuming the highest level of performance conditions will be achieved for the 2,366 TSR PRSU award, the 13,000 TSR PRSU award, and the 2,579 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $369,619, $2,232,230, and $352,034, respectively.|
|(19)||3,701 RSUs with an AGD Fair Value of $231,016, 2,515 TSR PRSUs with an AGD Fair Value of $198,031 and 3,701 adjusted EBITDA margin PRSUs with an AGD Fair Value of $231,016 comprise the amount of Ms. Jackson’s 2020 stock awards. Assuming the highest level of performance conditions will be achieved for the 2,515 TSR PRSU award and the 3,701 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $346,535 and $462,033, respectively.|
|(20)||4,057 RSUs with an AGD Fair Value of $225,772, 2,619 TSR PRSUs with an AGD Fair Value of $193,492 and 4,057 adjusted EBITDA margin PRSUs with an AGD Fair Value of $225,772 comprise the amount of Ms. Jackson’s 2019 stock awards. Assuming the highest level of performance conditions will be achieved for the 2,619 TSR PRSU award and the 4,057 adjusted EBITDA margin PRSU award, the AGD Fair Value of such awards would equal $338,592 and $451,544, respectively.|
The following table contains information concerning grants of plan-based awards to our named executive officers under our cash and equity plans during the year ended December 31, 2021.
Under Non-Equity Incentive
Under Equity Incentive
|Name and Type of Equity||Grant Date||Threshold
|# of Shares
of Stock or
|Susan R. Salka||256,470||1,236,000||2,472,000|
|Adjusted EBITDA PRSU||1/4/2021||3,663||14,652||29,304||999,999|
|Brian M. Scott||107,900||520,000||1,040,000|
|Adjusted EBITDA PRSU||1/4/2021||1,374||5,495||10,990||375,034|
|Christopher S. Schwartz||0||62,470||124,940|
|Adjusted EBITDA PRSU||1/4/2021||69||275||550||18,769|
|Jeffrey R. Knudson||0||0||0|
|Mark C. Hagan||95,242||459,000||918,000|
|Adjusted EBITDA PRSU||1/4/2021||962||3,846||7,692||262,490|
|Denise L. Jackson||82,170||396,000||792,000|
|Adjusted EBITDA PRSU||1/4/2021||645||2,579||5,158||176,017|
|(1)||The columns comprising the “Estimated Future Payouts Under Equity Incentive Plan Awards” set forth information regarding PRSUs granted to our named executive officers in 2021: (1) TSR PRSUs based on total shareholder return over a three-period ending on December 31, 2023 and (2) adjusted EBITDA PRSUs based on our adjusted EBITDA performance over a three year period. The ultimate number of PRSUs that vest under these awards depends on the results of the TSR Measurement or our adjusted EBITDA performance over a three-year period. All equity awards reflected in this table were granted under the Equity Plan.|
|(2)||The amount set forth in this column represents the minimum amount that a named executive officer would receive under our Bonus Plan if we met our threshold for 2021 pre-bonus adjusted EBITDA. For information on the calculation of Pre-Bonus AEBITDA, and a reconciliation of our 2021 net income to adjusted EBITDA, please see Exhibit A to this proxy statement (page 95). We describe the Bonus Plan, including the 2021 metrics utilized for each named executive officer, in our CD&A above.|
|(3)||The amount set forth in this column represents the amount that a named executive officer would receive under our Bonus Plan if the named executive officer met the target of each metric upon which his or her bonus is based.|
|(4)||The Compensation Committee set the maximum bonus for 2021 under the Bonus Plan at 200% of the target amount for each named executive officer. The amount set forth in this column represents the amount that a named executive officer would receive under our Bonus Plan if all financial metrics to which he or she is subject exceeded our target for each metric by 10% to 20% (depending on the metric) and the individual, in the sole discretion of the Compensation Committee, demonstrated superior leadership, made exceptional individual contributions to our success in 2021 and our performance or the performance of the applicable division surpassed that of our direct competitors such that the Compensation Committee awarded him or her 110% bonus for the Leadership Component.|
|(5)||For TSR PRSUs awards, the number of shares set forth in this column assumes that under the TSR Measurement, our relative TSR percentile rank equaled at least 25%, which establishes the minimum amount of performance that we must achieve for our named executive officers to earn a portion of the award. We describe Relative TSR in our CD&A above. For adjusted EBITDA margin PRSU awards, the number of shares set forth in this column assumes that the Company will achieve annual adjusted EBITDA performance equal to 90% of the Company’s adjusted EBITDA targets. A more detailed discussion of targets and performance metrics applicable to the adjusted EBITDA Performance PRSUs is found in subsection titled “Adjusted EBITDA Performance PRSUs” on page 64 above.|
|2022 Proxy Statement||71|
|(6)||For TSR PRSUs, the number of PRSUs set forth in this column assumes that under the TSR Measurement, our relative TSR percentile rank equaled at least 50%. For adjusted EBITDA margin PRSU awards, the number of shares set forth in this column assumes that the Company will achieve annual adjusted EBITDA performance equal to 100% of the Company’s adjusted EBITDA targets.|
|(7)||The number of TSR PRSUs set forth in this column assumes that under the TSR Measurement each of the following conditions has been satisfied: (1) Relative TSR percentile equals at least 75% and (2) Absolute TSR exceeds zero. For adjusted EBITDA PRSU awards, the number of shares set forth in this column assumes that the Company will achieve annual adjusted EBITDA performance equal to 120% of the Company’s adjusted EBITDA targets.|
|(8)||This column represents the grant date fair value, calculated in accordance with SEC rules, of each equity award. For PRSUs, which are subject to performance conditions, we report the grant date fair value based upon the probable outcome of such conditions and that value is consistent with the estimate of aggregate compensation cost to be recognized over the service period as of the grant date, excluding the effect of estimated forfeitures. These amounts do not necessarily correspond to the actual value that will be realized by our named executive officers. For additional information on the valuation assumptions used in the calculation of these amounts, refer to notes 1(o) and 10 to the financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on February 24, 2022.|
|(9)||The RSUs underlying this award vest in three tranches on each of the first, second and third anniversaries of the Grant Date and the Grantee’s provision of three periods of Credited Service.|
|(10)||The RSUs underlying this award are retirement eligible as of December 31, 2021 and vest in three tranches on each of the first, second and third anniversaries of the Grant Date.|
The following table represents equity interests held by the named executive officers as of December 31, 2021, which is comprised of RSU and PRSU awards.
|Option Awards||Stock Awards(1)|
|Susan R. Salka||1/3/2019||(3)||41,510||(4)||5,077,918|
|Brian M. Scott(18)||—||—||—||—||—|
|Jeffrey R. Knudson(5)||11/2/2021||(13)||29,262||3,579,620|
|Mark C. Hagan||1/3/2019||(3)||7,798||(4)||953,929|