DEF 14A of Healthcare Services Group Inc, Apr 14, 2025

DEF 14A of Healthcare Services Group Inc

Filed Apr 14, 2025 · FY20240000731012-25-000058

Open on EDGAR

  1. Election of Directors. (Proposal No. 1)

    Election of Directors. (Proposal No. 1) At the Annual Meeting, nine directors of the Company are to be elected, each to hold office for a term of one year. All nominees currently serve as Directors, with the exception of Thomas G. Whalen. Unless authority is specifically withheld, management proxies will be voted FOR the election of the nominees named in Directors, Officers & Corporate Governance below to serve as directors until the next annual meeting of shareholders and until their successors have been chosen and qualified. Should any nominee not be a candidate at the time of the Annual Meeting (a situation which is not now anticipated), proxies will be voted in favor of the remaining nominees and may also be voted for substitute nominees. If a quorum is present, the candidate or candidates receiving the highest number of votes will be elected. Brokers that do not receive shareholder instructions are not entitled to vote for the election of directors because an uncontested election is considered a “non-routine” matter. Hence, shareholders who hold their shares through brokerage accounts and who would like to vote in favor of the director nominees will need to instruct their brokerage firm to vote for the Company’s nominees.

  2. Healthcare Services Group, Inc. Board of Directors

    Healthcare Services Group, Inc. Board of Directors The Company operates within a comprehensive plan of corporate governance for the purpose of defining responsibilities, setting high standards of professional and personal conduct and assuring compliance with such responsibilities and standards. The Company regularly monitors developments in the area of corporate governance. These include corporate governance standards and disclosure requirements resulting from the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). In addition, the Nasdaq Stock Market LLC (“Nasdaq”) also has corporate governance and listing requirements. Our corporate governance policies are available on our website at investor.hcsgcorp.com/governance. The business of the Company is managed under the direction of its Board of Directors (the "Board"). The Board meets on a regularly scheduled basis during the Company’s fiscal year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings and also acts by unanimous written consent when necessary and appropriate. The Board met four times during the fiscal year ended December 31, 2024 and took one action by unanimous written consent. During 2024, each member of the Board attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board held during 2024, and (ii) the total number of meetings held by each committee of the Board on which such member served during 2024. We do not have a policy with regard to attendance by directors at annual meetings of shareholders. Three directors attended the 2024 Annual Meeting of Shareholders. 14 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Directors, Officers & Corporate Governance

  3. DIANE S. CASEY | Age: 71 | Director Since: 2011

    DIANE S. CASEY | Age: 71 | Director Since: 2011 Ms. Casey is a retired Clinical Nursing Coordinator (CNC) of Endoscopy at Huntingdon Valley Surgery Center, an AAAHC accredited healthcare facility, where Ms. Casey worked for more than five years before her retirement in 2018. Previously, Ms. Casey was employed at Holy Redeemer Health Systems in various surgical nursing and management positions. Committees: Chairwoman of the Nominating, Compensation and Stock Option Committee (“NCSO Committee”) Skills, Experience, & Qualifications: Industry, Operational

  4. DANIELA CASTAGNINO | Age:50 | Director Since: 2018

    DANIELA CASTAGNINO | Age:50 | Director Since: 2018 Ms. Castagnino has been an Information Specialist at United Spinal Association, a national 501(c)(3) non-profit membership organization dedicated to enhancing the quality of life of all people living with spinal cord injuries and disorders (SCI/D), for more than the past ten years. Previously, Ms. Castagnino was an international consultant for Lazos Profesionales Asociación Civil and the Inter-American Development Bank. Committees: Environmental, Social & Governance Committee (“ESG Committee”) Skills, Experience, & Qualifications: Industry, Operational

  5. LAURA GRANT | Age: 45 | Director Since: 2020

    LAURA GRANT | Age: 45 | Director Since: 2020 Ms. Grant has been the Managing Partner and President of Chatham Financial since 2022. Ms. Grant also serves as a board member of Chatham Financial. Ms. Grant’s previous roles at Chatham Financial include Chief Operating Officer, Managing Director in the Global Real Estate practice and co-head of Chatham’s European business from 2017 to 2022. Ms. Grant has concentrated on risk management strategies for Real Estate Investment Trusts (REITs), specializing in interest rate and foreign currency hedging. Prior to joining Chatham, Ms. Grant worked at Booz Allen Hamilton in the Capital Asset Management group. Committees: Audit Committee Skills, Experience, & Qualifications: Operational, Executive, Financial, Real Estate

  6. JOHN J. MCFADDEN | Age: 63 | Director Since: 2012

    JOHN J. MCFADDEN | Age: 63 | Director Since: 2012 Since 2008, Mr. McFadden has been the Principal of Global Circulation Services, a provider of marketing and advertising services to media and publishing companies. He previously worked at McGraw-Hill Companies (the parent company of Standard and Poor's), where he held management positions within their global circulation, sales, and outsourcing services departments for approximately 15 years. Committees: NCSO Committee Skills, Experience, & Qualifications: Operational, Executive 15 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Directors, Officers & Corporate Governance

  7. DINO D. OTTAVIANO | Age: 77 | Director Since: 2007

    DINO D. OTTAVIANO | Age: 77 | Director Since: 2007 Mr. Ottaviano is a retired Principal of D20 Marketing, Inc., a provider of internet productivity tools founded in 2006. Previously, Mr. Ottaviano was employed for over 20 years with Transcontinental Direct (successor to Communication Concepts, Inc.), a publicly held outsourcing printer, retiring in 2022 as Vice President of Business Development. Committees: Audit Committee Skills, Experience, & Qualifications: Operational, Executive, Financial

  8. KURT SIMMONS, JR., CPA | Age: 43 | Director Since: 2021

    KURT SIMMONS, JR., CPA | Age: 43 | Director Since: 2021 Mr. Simmons, Jr. has been an audit partner at WithumSmith+Brown, PC since 2021. Prior to that, he was a partner at Citrin Cooperman & Company LLP from 2017 to 2021. His expertise includes audit and consulting services related to Sarbanes-Oxley 404, technical accounting, and due diligence for domestic and international clients. He is a former member of the National Association of Black Accountants, has served on the New Jersey Technology Advisory Council board, and is currently a member of the Association for Corporate Growth. Committees: Audit Committee Chairman, ESG Committee Skills, Experience, & Qualifications: Executive, Financial

  9. JUDE VISCONTO | Age: 51 | Director Since: 2015

    JUDE VISCONTO | Age: 51 | Director Since: 2015 Mr. Visconto has been the principal of American Property Holdings, a real estate investment firm focused on acquiring, developing, and managing multi-family/ senior housing and commercial assets for more than five years. Mr. Visconto is an active member of the real estate community and participates in various industry- related associations, including The American Senior Housing Association, The Association of the National Investment Center for Senior Housing and Care, and The National Association of Realtors. Committees: Board Chairman, ESG Committee Chairman Skills, Experience, & Qualifications: Industry, Operational, Financial, Real Estate

  10. THEODORE WAHL | Age: 51 | Director Since: 2011

    THEODORE WAHL | Age: 51 | Director Since: 2011 Mr. Wahl has been the President and Chief Executive Officer of the Company since May 2015. Mr. Wahl joined the Company in 2004. Prior to his appointment to President and Chief Executive Officer, Mr. Wahl served as President and Chief Operating Officer, Executive Vice President & Chief Operating Officer, Vice President of Finance, Regional Manager, Regional Sales Director, District Manager and Facility Manager. Prior to joining the Company, Mr. Wahl was a Senior Manager with EY’s Transaction Advisory Group. Committees: None Skills, Experience, & Qualifications: Industry, Operational, Executive, Financial 16 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Directors, Officers & Corporate Governance

  11. THOMAS G. WHALEN | Age: 51 | Director Since: N/A

    THOMAS G. WHALEN | Age: 51 | Director Since: N/A Mr. Whalen has been a Senior Managing Director and Co-head of the Financial Restructuring Group at Griffin Financial since 2012. Griffin Financial Group, part of an affiliated group of multidisciplinary professional services firms collectively known as The Stevens & Lee Companies, serve clients across several industries including Healthcare and Real Estate. Mr. Whalen's transactional expertise includes, among other things, M&A advisory, complex restructurings and recapitalizations, refinancing and capital raises. Mr. Whalen has also practiced as a bankruptcy lawyer at Stevens & Lee since 2000, where he has provided clients with important insights into the interplay of law and commercial finance. Tom is a member of the American Bar Association, the American Bankruptcy Institute and the Turnaround Management Association. Committees: None Skills, Experience, & Qualifications: Industry, Executive, Financial, Real Estate

  12. Board Leadership

    Board Leadership Jude Visconto was appointed Chairman of the Board of Directors in 2017 and has served as an independent director since 2015. The Board believes that Mr. Visconto’s financial background and management experience are qualifications for the role of Chairman of the Board. In addition, Mr. Visconto’s operational experience brings additional perspective to the Board as the Company grows and provides continued operational excellence. If Mr. Visconto is re-elected to the Board, it is the intention of the Board that he continue to serve as Chairman of the Board. As Chairman of the Board, Mr. Visconto’s duties include: (i) approving agendas, schedules and supporting information provided to the Board; (ii) ensuring the Board has full, timely and relevant information to support its decision-making requirements; (iii) performing the duties of the Chairman at Board meetings; (iv) consulting on the effectiveness of Board committees; (v) at his sole discretion, when necessary and appropriate, calling meetings of the Board’s non-employee directors; (vi) consulting as to the timeliness of the flow of information from the Company that is necessary for the directors to effectively perform their duties; (vii) serving as principal liaison between the non- employee, independent directors and the President and Chief Executive Officer; (viii) if requested by shareholders, being available for consultation and direct communication; and (ix) other duties requested by the Board. In addition, Mr. Visconto presides at executive sessions of the Board without the presence of management. We believe that including an independent chairman in our Board structure enhances the effectiveness of our Board. This structure strengthens our corporate governance by promoting active engagement, objectivity, independence and oversight of management. Kurt Simmons, Jr. was appointed Chairman of the Audit Committee in 2022 and has served as an independent director since 2021. In the absence of the Chairman of the Board, the Chairman of the Audit Committee will assume the interim responsibilities of the Chairman of the Board.

  13. Directors’ Compensation

    | Name | Fees Earned or Paid in Cash | Deferred Stock Unit Awards 1 | Total | | Diane S. Casey2 | $15,000 | $40,001 | $55,001 | | Daniela Castagnino3 | $10,000 | $40,001 | $50,001 | | Robert L. Frome4 | $— | $50,029 | $50,029 | | Laura Grant 5 | $— | $70,015 | $70,015 | | John J. McFadden6 | $15,000 | $40,001 | $55,001 | | Dino D. Ottaviano7 | $30,000 | $40,001 | $70,001 | | Kurt Simmons, Jr.8 | $— | $100,007 | $100,007 | | Jude Visconto9 | $60,000 | $40,001 | $100,001 |

  14. Compensation Objectives

    | What we do: | | What we don’t do: | | | o | Significant share ownership requirements for the CEO and Executive Vice Presidents | o | No employment agreements containing special severance payments such as golden parachutes | | o | Double-trigger requirements for vesting of equity awards on a change in control | o | No hedging or engaging in derivative transactions related to Company shares | | o | A cap on the annual incentive payout for the CEO | o | No gross-up payments to cover income taxes related to executive compensation | | o | Majority of the Executive Management Team’s compensation is “at-risk” | o | No repricing or backdating of stock options | | o | Operate a clawback policy that applies to “at-risk” variable compensation | o | No retirement programs that are specific to executive officers | | o | Balance “at-risk” compensation across short-term and long-term time horizons | | | | o | Engagement of an independent compensation consultant | | |

  15. Determination of Compensation Awards

    Determination of Compensation Awards The compensation of the President and Chief Executive Officer of the Company is determined by the NCSO Committee. Such determination is based on a number of factors including: •Consideration of the operating and financial performance of the Company, primarily its income before income taxes; •Attainment of a level of compensation designed to retain a superior executive in a highly competitive environment; and •Consideration of the individual’s overall contribution to the Company. The NCSO Committee has also historically taken into account input from other independent members of our Board in determining the compensation of the President and Chief Executive Officer. Compensation for the other NEOs is recommended by the President and Chief Executive Officer and reviewed by the NCSO Committee, taking into account the same factors described above. The Company engages an independent compensation consultant as needed, who provides advice as requested in areas such as peer group composition, market benchmarking and executive compensation policy design. In reviewing compensation, publicly available data relating to the compensation practices and policies of other companies within and outside our industry is collected to the extent it is available. For NEO compensation, our review includes comparing to data analyzed from proxy filings from the below listed companies. For other Executive Management Team members, compensation survey data is also used for companies with similar revenues to the Company. The NCSO Committee believes that gathering information about the compensation practices of other companies is an important part of our compensation-related decision-making process. Given the challenge that there are no other U.S. publicly-traded companies specifically engaged only in the Company’s business, which provides housekeeping and food services primarily to the healthcare industry and overwhelmingly to the long-term care segment of the industry, our comparator group has been developed looking at a broader cross-section of service industry companies. The NCSO Committee periodically reviews the peer group to identify relevant companies for comparison. The following companies have been selected as reasonable comparators for talent as they operate in similar industries, are of similar size and scope and/or have similar employee bases. That group consists of the following:

  16. Incorporating Shareholder Feedback

    Incorporating Shareholder Feedback The NCSO Committee was pleased that approximately 91% of votes cast at the 2024 Annual Meeting of Shareholders approved, on an advisory basis, the compensation of the Company’s NEOs at such time. The NCSO Committee considered that support in its efforts to align the Company’s executive compensation policies with long-term shareholder interests. In particular, we believe that the voting outcome reaffirmed that changes we have made over the past several years, which include introducing performance-based equity awards (in the form of performance stock units, or “PSUs”), continue to be well received and effective. The NCSO Committee will continue to monitor voting outcomes and feedback received from shareholders in reviewing the compensation program of our NEOs.

  17. Alignment of Pay and Performance

    Alignment of Pay and Performance The NCSO Committee believes that including a blend of stock options, restricted stock units (“RSUs”) and PSUs as a significant component of compensation for our Executive Management Team has successfully aligned pay with performance. This is evidenced through the fact that during the tenure of our current President and Chief Executive Officer, the outcome under the annual incentive plan and value of equity awarded has generally trended in line with operating performance.

  18. Elements of Compensation

    1.Mr. Singh’s 2024 Base Salary represents a prorated amount of his annual base salary from his start date with the Company in September 2024 through the end of the Company's fiscal year. 34 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation Annual IncentivesWe structure our annual incentive program as incentive bonus payments to reward our NEOs based on the Company’s performance and our evaluation of the individual executive’s contribution to that performance. This allows the NEOs to receive a significant portion of their compensation based on the results that they helped us to achieve. The incentive bonuses paid to the members of the Executive Management Team are calculated as a percentage of the Company’s income before income taxes. The CEO receives his bonus on an annual basis while the other members of the Executive Team receive quarterly bonus payments. This approach reflects the importance of income before income taxes in assessing our overall performance for those responsible for the Company’s operational and financial success, providing line of sight to both top-line growth and the appropriate management of costs. This performance-based compensation structure aligns with our strategic focus and Company Vision - To Be THE Choice For Our Customers - resulting in retention of and growth in relationships through good customer service, expansion of our services, effective execution in all that we do and cost management. Mr. Brophy is not a member of the Executive Management Team and receives an annual discretionary bonus based on individual and company performance. For NEOs other than the President and Chief Executive Officer and Chief Accounting Officer, incentive compensation can be modified up or down based on other aspects of quantifiable financial and operational performance for which the executive officers are accountable. Examples of the performance taken into account include growth in the number of facilities serviced, profitability, client retention and satisfaction and overall management of their functional area. No discretion is applied in determining the total value of the annual incentive earned by the President and Chief Executive Officer given his direct accountability to shareholders for our overall financial performance. For the President and Chief Executive Officer, the annual incentive payout is subject to an overall maximum of two times base salary. The total annual incentive earned by Mr. Wahl for 2024 was $397,058, equating to 40% of base salary. Mr. Wahl elected to receive 35% of this compensation, or $138,966, in the form of shares of Common Stock in early 2025. The remaining balance of $258,092 was received in cash. Annual incentive outcomes for the other members of the Executive Management Team were validated against the operational performance achievements towards which they contributed. Accordingly, the following payments were approved for our NEOs with respect to 2024 performance:

  19. Elements of Compensation

    | Named Executive Officer | 2024 Cash Annual Incentive | 2024 Equity Annual Incentive | 2024 Annual Incentive (% of salary) | | Theodore Wahl | $258,092 | $138,966 | 40% | | Vikas Singh | $8,334 | $— | 5% | | Andrew W. Kush | $162,503 | $— | 25% | | John C. Shea | $101,562 | $— | 17% | | Patrick J. Orr | $121,877 | $— | 21% | | Andrew M. Brophy1 | $64,575 | $— | 27% |

  20. Elements of Compensation

    1.Mr. Brophy’s incentive bonus is not tied to financial performance, but is instead discretionary and paid based on his success in his position and contribution to his role. 35 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation Long-Term Equity Incentive AwardsThe NCSO Committee is responsible for approving the population of individuals who will be granted equity awards, the number of equity awards each individual will receive, the option price per share (if applicable), the exercise period (if applicable) and vesting of each award. Guidelines for the number of equity awards granted to each officer are determined using a procedure approved by the NCSO Committee based upon several factors, including the officer’s salary level, individual contributions to the Company’s performance and the value of the equity award at the time of grant. We grant equity awards at the fair market value of the underlying stock on the date of grant. Long-term equity incentive awards are currently granted to the Executive Management Team as a combination of stock options, RSUs and PSUs. The NCSO Committee believes that the use of stock options, RSUs and PSUs provides a clear incentive to the Executive Management Team to deliver long- term sustainable and profitable growth which translates into value creation for our shareholders, in a responsible way. The vesting of RSUs is phased over a period of five years, and the vesting of PSUs is three years, to reinforce this long-term focus and enhance retention. In making its decision to grant these awards, the NCSO Committee considered the competitive challenges to our business and the resulting focus, efforts and expertise the Executive Management Team has expended to meet these challenges and foster the growth and financial position of the Company. In determining award values, the NCSO Committee considers a range of factors that takes into account not just competitive market data, but also the performance of the Company more generally and the contributions of individuals to our performance accomplishments in the prior year. The following awards were approved and granted during 2024 to our NEOs:

  21. Elements of Compensation

    | Named Executive Officer | Stock Options (#) | Stock Option Grant Date Fair Value1 | Restricted Stock Units (#) | Restricted Stock Units Grant Date Fair Value1 | Performance Stock Units (#) | Performance Stock Units Grant Date Fair Value2 | Total Grant Date Fair Value | | Theodore Wahl | 156,735 | $793,643 | 153,213 | $1,587,287 | 66,974 | $793,642 | $3,174,572 | | Andrew W. Kush | 31,944 | $161,752 | 31,226 | $323,501 | 13,650 | $161,753 | $647,005 | | John C. Shea | 32,453 | $164,329 | 31,724 | $328,661 | 13,868 | $164,336 | $657,325 | | Patrick J. Orr | 30,538 | $154,632 | 29,851 | $309,256 | 13,049 | $154,631 | $618,519 | | Andrew M. Brophy | — | $— | 4,826 | $49,997 | — | $— | $49,997 |

  22. Elements of Compensation

    1.All options and RSU awards granted vest and are exercisable ratably over a five-year period on each yearly anniversary of the grant date of the award. 2.PSUs vest upon certification by the Board in 2027, provided that the performance targets, based on relative Total Shareholder Return (“TSR”), are met for the three-year period ended December 31, 2026. 3.Mr. Singh did not receive any stock options, RSUs or PSUs during the year ended December 31, 2024. PSUs can be earned based on a three-year relative TSR performance relative to the S&P MidCap 400 Index. The NCSO determined that this was an appropriate peer group given the absence of a sufficiently large enough group of directly relevant peers for performance comparisons. The first award of performance stock units was made in 2021 and the applicable three-year performance period concluded on December 31, 2023. The performance period for the second award of performance stock units was made in 2022 and the applicable three-year performance period concluded on December 31, 2024. 36 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation The table below represents the vesting conditions for performance stock unit awards:

  23. Elements of Compensation

    | HCSG TSR Percentile Ranking | Percentage of Target PSUs Earned | | Less than the 25th percentile | —% | | at the 25th percentile(1) | 50% | | at the 50th percentile | 100% | | At or above the 75th percentile | 150% |

  24. Elements of Compensation

    (1) Performance between the 25th percentile and the 75th percentiles is interpolated. In January 2024, 2023 and 2022, the NCSO Committee granted options to purchase an aggregate of approximately 252,000, 181,000 and 282,000 shares of Common Stock, respectively, to our NEOs. In January 2024, 2023 and 2022, the NCSO Committee granted RSUs of an aggregate of approximately 251,000, 176,000, and 129,000 shares, respectively, to our NEOs. In January 2024, 2023 and 2022, the NCSO Committee granted PSUs of an aggregate of approximately 108,000, 73,000 and 54,000 shares, respectively, to the Executive Management Team. See the table entitled Grant of Plan-Based Awards included in this Proxy Statement for more information on the 2024 grants. The NCSO Committee has also granted awards to other levels of Company management and key employees creating a culture of ownership and to incentivize and encourage contributions and performance results that drive long- term shareholder value. Deferred Compensation Plan The Company offers a Supplemental Executive Retirement Plan (“SERP”) for executives and certain key employees. The SERP is not qualified under Section 401 of the Internal Revenue Code. The SERP allows participants to defer up to 25% of their earned income on a pre-tax basis and as of the last day of each plan year, each participant will be credited with a 25% match of their earnings deferred (up to 15%) in the form of the Company’s Common Stock based on the then- current market value. SERP participants fully vest in the Company’s matching contribution three years from the first day of the initial year of participation. The income deferred and the matching contributions are unsecured and subject to the claims of the Company’s general creditors. Under the SERP, we are authorized to issue up to 1,012,000 shares of our Common Stock to our employees. Pursuant to such authorization, approximately 177,000 shares are available for future grant at December 31, 2024. As of December 31, 2024, and since the initiation of the SERP, the Company’s 25% match has resulted in approximately 836,000 shares of Common Stock being issued to the trustee. At the time of issuance, such shares are accounted for at cost, as treasury stock. At December 31, 2024, approximately 362,000 of such shares are vested and remain in the respective active participants’ accounts. Participants may not withdraw or sell such stock until the termination of their employment. 37 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation Employee Stock Purchase Plan We have an Employee Stock Purchase Plan (“ESPP”) for all eligible employees. All full-time and certain part-time employees who have completed two years of continuous service with us are eligible to participate. In 2021, the Board of Directors extended the ESPP for an additional five offerings through 2026. Annual offerings commence and terminate on the respective year’s first and last calendar day. Under the ESPP, we are authorized to issue up to 4,050,000 shares of our Common Stock to our employees. Pursuant to such authorization, we have 1,691,000 shares available for future grant at December 31, 2024. Furthermore, under the terms of the ESPP, eligible employees may contribute through payroll deductions up to $21,250 (85% of IRS limitation) of their compensation toward the purchase of the Company’s Common Stock. No employee may purchase Common Stock which exceeds $25,000 in fair market value (determined on the date of grant) for each calendar year. The price per share is equal to the lower of 85% of the fair market price on the first day of the offering period or 85% of the fair market price on the day of purchase (the last day of the offering period).

  25. Compensation Risk Assessment

    Compensation Risk Assessment Our NCSO committee believes that our incentive compensation arrangements of the Company’s NEOs provide incentives that do not encourage risk-taking beyond our ability to effectively identify and manage significant risks; are compatible with effective internal controls and the risk management practices of our Company; and are supported by the oversight and administration of the NCSO committee because (i) the annual long-term (equity-based) compensation programs are subject to 3 year (for PSUs) or 5 year (for RSUs and stock options) time-based vesting conditions and (ii) performance targets for the annual short-term (cash bonus) compensation programs in place for the Executive Management Team, were linked to overall corporate performance (percentage of the Company’s income before taxes). For the annual short-term (cash bonus) compensation programs in place for our eligible home office and field operations leaders, performance targets were linked to multiple performance measures including non-financial objectives (such as recruiting and developing future management personnel, maintaining good relationships with clients and employees, and compliance with operational reporting requirements), with reasonable caps and appropriate controls to establish targets and validate actual performance against the targets before payouts were made. Further, our Chief Compliance Officer reports to the NCSO committee on at least an annual basis on matters relating to employee compensation. In addition, our independent compensation consultant regularly reviews our executive compensation program for the purpose of identifying potential sources of risk and reports its findings to the NCSO committee. 38 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  26. Change of Control

    Change of Control The Company’s 2020 Plan includes a “double-trigger” approach to vesting of stock awards upon a change in control, meaning vesting would occur if a change in control occurs and the outstanding equity awards are not fully assumed, or where the outstanding equity awards are fully assumed by the resulting entity and the participant is subsequently terminated or resigns for good reason. We believe a double-trigger approach provides adequate employment protections and reduces, for the shareholders’ benefit, potential transaction costs associated with the awards.

  27. Equity Award Grant Practices

    Equity Award Grant Practices Long-term equity incentive awards are discretionary and are generally granted to the Executive Management team on the first or second business day of the applicable fiscal year. As described in further detail above in the "Elements of Compensation" section, long-term equity incentive awards include a combination of stock options, RSUs, and PSUs. The NCSO Committee is responsible for approving these grants. There are no option awards granted to non-Executive Management employees, except for the Chief Communications Officer. The NCSO Committee holds meetings each year to determine the long-term equity incentive awards to be granted to the Executive Management team in the beginning of the following year. The NCSO Committee did not take material nonpublic information into account when determining the timing and terms of equity awards in 2024. The timing of the grants is in accordance with the yearly compensation cycle, with grants starting in the beginning of each new fiscal year to assist in incentivizing executives. Eligible employees, including the Executive Management team, may voluntarily enroll in the ESPP and purchase shares at a discount via payroll deductions. The ESPP is offered once a year. There were no option awards granted within four business days prior or one business day after the release of material nonpublic information. The Company does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The grants are made following an annual, predetermined compensation cycle. 40 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  28. Summary Compensation Table

    Summary Compensation Table The following table sets forth certain information regarding compensation paid or accrued during the Company’s prior three fiscal years, as applicable, for the Company’s NEOs.

  29. Summary Compensation Table

    | Name and Principal Position | | Salary | Stock Awards1 | Option Awards2 | Non-Equity Incentive Plan Compensation 3 | Nonqualified Deferred Compensation Earnings | All Other Compensation 4 | Total | | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Theodore Wahl | 2024 | 1,005,108 | 2,526,539 | 793,643 | 258,092 | 50,377 | 49,887 | 4,683,646 | | President & Chief Executive Officer & Director | 2023 | 1,005,108 | 2,431,170 | 762,697 | 258,648 | 55,080 | 47,207 | 4,559,910 | | | 2022 | 1,005,108 | 2,214,062 | 737,227 | 338,115 | 74,042 | 45,709 | 4,414,263 | | Vikas Singh5 | 2024 | 153,846 | — | — | 8,334 | — | 3,294 | 165,474 | | Executive Vice President & Chief Financial Officer | | | | | | | | | | Andrew W. Kush | 2024 | 639,000 | 485,254 | 161,752 | 162,503 | 29,627 | 40,028 | 1,518,164 | | Executive Vice President & Chief Operating Officer | 2023 | 639,000 | 454,332 | 151,444 | 144,163 | 25,968 | 37,525 | 1,452,432 | | | 2022 | 639,000 | 451,708 | 150,114 | 90,164 | 31,097 | 35,064 | 1,397,147 | | John C. Shea | 2024 | 606,703 | 492,996 | 164,329 | 101,562 | 26,298 | 32,606 | 1,424,494 | | Executive Vice President & Chief Administrative Officer | 2023 | 606,703 | 454,332 | 151,444 | 90,100 | 24,012 | 33,426 | 1,360,017 | | | 2022 | 606,703 | 452,706 | 150,114 | 56,353 | 27,219 | 31,619 | 1,324,714 | | Patrick J. Orr | 2024 | 580,147 | 471,878 | 154,632 | 121,877 | 21,601 | 25,772 | 1,375,907 | | Executive Vice President & Chief Revenue Officer | 2023 | 579,407 | 347,371 | 114,536 | 108,122 | 21,780 | 22,335 | 1,193,551 | | | 2022 | 541,007 | 323,232 | 106,953 | 56,353 | 15,424 | 18,931 | 1,061,900 | | Andrew M. Brophy | 2024 | 239,918 | 49,997 | — | 64,575 | 10,733 | 11,416 | 376,639 | | Senior Vice President, Controller, & Chief Accounting Officer | 2023 | 221,481 | 49,996 | — | 64,575 | 10,212 | 10,817 | 357,081 | | | 2022 | 210,716 | 49,992 | — | 61,500 | 9,429 | 13,222 | 344,859 |

  30. Summary Compensation Table

    1.The total amounts in these columns do not reflect compensation actually received by the NEO, nor do they reflect the actual value that will be recognized by the NEO. Instead, the amounts reflect the aggregate grant date fair value of restricted stock awards, RSUs, PSUs, incentive awards received in stock, and ESPP awards computed in accordance with FASB ASC Topic 718. A more detailed discussion of the assumptions used in calculating these values may be found in Note 10 of the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024. For PSUs granted in 2024, the grant date fair value reported is based upon the probable outcome of performance at the grant date. The grant date fair value of performance awards with market-based conditions like relative total shareholder return is determined based on a Monte Carlo simulation.

  31. Summary Compensation Table

    | | Fiscal 2024 Grants of Performance Awards6 | | | | Probable Outcome ($) | Highest Outcome ($) | | Theodore Wahl | $793,642 | $1,190,463 | | Andrew W. Kush | $161,753 | $242,629 | | John C. Shea | $164,336 | $246,504 | | Patrick J. Orr | $154,631 | $231,946 |

  32. Summary Compensation Table

    2.The total amounts in this column do not reflect compensation actually received by the NEO, nor do they reflect the actual value that will be recognized by the NEO. Instead, the amounts reflect the aggregate grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718. A more detailed discussion of the assumptions used in calculating these amounts may be found in Note 10 of the Notes to the Financial Statements in our Annual Report on Form 10- K for the year ended December 31, 2024. Refer also to the Compensation Discussion and Analysis for further information. 41 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation 3.Amounts shown in this column represent annual performance-based cash payments under the annual incentive program, Executive Compensation as described in the Compensation Discussion and Analysis. No future pay-outs will be made with respect to any of the plan- based awards under the plan. 4.Includes automobile allowance, vehicle lease and contributions paid by the Company towards employee’s insurance premiums. 5.On September 3, 2024, Mr. Singh became the Company’s Executive Vice President and Chief Financial Officer, effective the same day. Mr. Brophy, who served as the Company’s Principal Financial & Accounting Officer beginning in 2021, continues to serve in his role as Senior Vice President, Controller and Chief Accounting Officer.. 6.Messrs. Singh and Brophy did not receive performance stock unit awards for the year ended December 31, 2024.

  33. Grant of Plan-Based Awards

    Grant of Plan-Based Awards The following table sets forth information concerning grants of plan-based awards made by us during the year ended December 31, 2024, to each of the NEOs.

  34. Grant of Plan-Based Awards

    | | Grant Date | Date Award Approved | Estimated Future Payouts Under Equity Incentive Plan Awards1 | Estimated Future Payouts Under Equity Incentive Plan Awards (#)2 | | | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Options Awards | Grant Date Fair Value of Stock and Option Awards | | Name3 | | | Target (#) | Thres- hold | Target | Maxi- mum | (#) | (#) | ($/sh) | ($) | | Theodore Wahl | 1/3/2024 | 12/13/2023 | — | 33,487 | 66,974 | 100,461 | 153,213 | 156,735 | $10.36 | $3,174,572 | | | 12/31/2024 | 12/13/2023 | 13,110 | — | — | — | — | — | $10.60 | $138,966 | | Andrew W. Kush | 1/3/2024 | 12/13/2023 | — | 6,825 | 13,650 | 20,475 | 31,226 | 31,944 | $10.36 | $647,005 | | John C. Shea | 1/3/2024 | 12/13/2023 | — | 6,934 | 13,868 | 20,802 | 31,724 | 32,453 | $10.36 | $657,325 | | Patrick J. Orr | 1/3/2024 | 12/13/2023 | — | 6,525 | 13,049 | 19,574 | 29,851 | 30,538 | $10.36 | $618,519 | | Andrew M. Brophy | 1/3/2024 | 12/13/2023 | — | — | — | — | 4,826 | — | $10.36 | $49,997 |

  35. Grant of Plan-Based Awards

    1.Represents the shares received during 2025 as a result of Mr. Wahl’s election to receive a portion of his 2024 performance- based compensation in Company Common Stock. The grant date of such shares is reflected as the date in which the total amount of such performance-based compensation is earned by Mr. Wahl. 2.These PSUs were granted under the 2020 Plan and vest upon certification by the Board in 2027, provided that the performance targets, based on Relative TSR, are met for the three-year periods ended December 31, 2026. 3.Mr. Singh had no plan-based awards granted during the year ended December 31, 2024.

  36. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The Company has no employment agreements with any of the NEOs. No previously granted options or other equity-based awards were re-priced or otherwise materially modified during the fiscal year ended December 31, 2024. As set forth above in the Compensation Discussion and Analysis, the Company believes that part of the compensation for the NEOs should be in the form of long-term equity grants so as to align the interests of the NEOs with the Company’s shareholders. In accordance with these objectives, Mr. Wahl received stock options to purchase 156,735 shares of Common Stock, 153,213 RSUs and 66,974 PSUs. Mr. Shea received stock options to purchase 32,453 shares of Common Stock, 31,724 RSUs and 13,868 PSUs. Mr. Kush received stock options to purchase 31,944 shares of Common Stock, 31,226 RSUs and 13,650 PSUs. Mr. Orr received stock options to purchase 30,538 shares of Common Stock, 29,851 RSUs and PSUs of 13,049. Mr. Brophy received 4,826 RSUs. These stock options and RSUs vest over five years while PSUs vest over 3 years, as an incentive to increase the long-term value of the Company and thereby increase the value of its Common Stock. Mr. Singh’s compensation reflects payment for his services provided for his period of employment during 2024. 42 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  37. Outstanding Equity Awards at December 31, 2024

    Outstanding Equity Awards at December 31, 2024 The following table summarizes the outstanding equity awards of each of the NEOs as of December 31, 2024:

  38. Outstanding Equity Awards at December 31, 2024

    | | | Option Awards | | | | Stock Awards | | | | | Name1 | Grant Date2 | Vested, Exercisable | Unvested | Option Exercise Price | Option Expiration Date | Unvested3 | Market Value of Unvested4 | Unvested Equity Incentive Plan Awards5 | Market Value of Equity Incentive Plan Awards5 | | Theodore Wahl | 1/3/2014 | 15,000 | — | $28.02 | 1/3/2024 | — | $— | — | $— | | | 1/5/2015 | 15,000 | — | $30.30 | 1/5/2025 | — | $— | — | $— | | | 1/4/2016 | 15,000 | — | $34.14 | 1/4/2026 | — | $— | — | $— | | | 1/4/2017 | 30,000 | — | $39.38 | 1/4/2027 | — | $— | — | $— | | | 1/4/2018 | 50,000 | — | $52.06 | 1/4/2028 | — | $— | — | $— | | | 1/4/2019 | 50,000 | — | $40.49 | 1/4/2029 | — | $— | — | $— | | | 1/3/2020 | 40,000 | 10,000 | $24.43 | 1/3/2030 | 15,546 | $180,645 | — | $— | | | 1/4/2021 | 61,915 | 41,278 | $28.37 | 1/4/2031 | 20,049 | $232,969 | — | $— | | | 1/4/2022 | 72,633 | 108,950 | $18.10 | 1/4/2032 | 48,877 | $567,951 | 35,106 | $150,254 | | | 2/24/2023 | 23,360 | 93,439 | $13.72 | 2/24/2033 | 88,952 | $1,033,622 | 47,075 | $378,012 | | | 1/3/2024 | — | 156,735 | $10.36 | 1/3/2034 | 153,213 | $1,780,335 | 66,974 | $887,406 | | Andrew W. Kush | 1/3/2014 | 5,000 | — | $28.02 | 1/3/2024 | — | $— | — | $— | | | 1/5/2015 | 5,000 | — | $30.30 | 1/5/2025 | — | $— | — | $— | | | 1/4/2016 | 6,000 | — | $34.14 | 1/4/2026 | — | $— | — | $— | | | 1/4/2017 | 6,000 | — | $39.38 | 1/4/2027 | — | $— | — | $— | | | 1/4/2018 | 10,000 | — | $52.06 | 1/4/2028 | — | $— | — | $— | | | 1/4/2019 | 10,000 | — | $40.49 | 1/4/2029 | — | $— | — | $— | | | 1/3/2020 | 14,178 | 3,543 | $24.43 | 1/3/2030 | 2,817 | $32,734 | — | $— | | | 1/4/2021 | 12,366 | 8,244 | $28.37 | 1/4/2031 | 4,004 | $46,526 | — | $— | | | 1/4/2022 | 14,790 | 22,184 | $18.10 | 1/4/2032 | 9,952 | $115,642 | 7,148 | $30,593 | | | 2/24/2023 | 4,638 | 18,554 | $13.72 | 2/24/2033 | 17,662 | $205,232 | 9,347 | $75,056 | | | 1/3/2024 | — | 31,944 | $10.36 | 1/3/2034 | 31,226 | $362,846 | 13,220 | $175,165 | | John C. Shea | 1/3/2014 | 6,250 | — | $28.02 | 1/3/2024 | — | $— | — | $— | | | 1/5/2015 | 1,650 | — | $30.30 | 1/5/2025 | — | $— | — | $— | | | 1/4/2016 | 1,650 | — | $34.14 | 1/4/2026 | — | $— | — | $— | | | 1/4/2017 | 1,650 | — | $39.38 | 1/4/2027 | — | $— | — | $— | | | 1/4/2018 | 10,000 | — | $52.06 | 1/4/2028 | — | $— | — | $— | | | 1/4/2019 | 10,000 | — | $40.49 | 1/4/2029 | — | $— | — | $— | | | 1/3/2020 | 14,178 | 3,543 | $24.43 | 1/3/2030 | 2,817 | $32,734 | — | $— | | | 1/4/2021 | 12,366 | 8,244 | $28.37 | 1/4/2031 | 4,004 | $46,526 | — | $— | | | 1/4/2022 | 14,790 | 22,184 | $18.10 | 1/4/2032 | 9,952 | $115,642 | 7,148 | $30,593 | | | 2/24/2023 | 4,638 | 18,554 | $13.72 | 2/24/2033 | 17,662 | $205,232 | 9,347 | $75,056 | | | 1/3/2024 | — | 32,453 | $10.36 | 1/3/2034 | 31,724 | $368,633 | 13,431 | $177,961 | | Patrick J. Orr | 1/5/2015 | 2,000 | — | $30.30 | 1/4/2026 | — | $— | — | $— | | | 1/4/2016 | 4,000 | — | $34.14 | 1/4/2027 | — | $— | — | $— | | | 1/4/2017 | 5,000 | — | $39.38 | 1/4/2028 | — | $— | — | $— | | | 1/4/2018 | 5,000 | — | $52.06 | 1/4/2029 | — | $— | — | $— | | | 1/4/2019 | 5,000 | — | $40.49 | 1/3/2030 | — | $— | — | $— | | | 1/3/2020 | 6,819 | 1,704 | $24.43 | 1/4/2031 | 1,289 | $14,978 | — | $— | | | 1/4/2021 | 9,254 | 6,167 | $28.37 | 1/4/2032 | 2,996 | $34,814 | — | $— | | | 1/4/2022 | 10,537 | 15,806 | $18.10 | 1/4/2032 | 7,091 | $82,397 | 5,093 | $21,798 | | | 2/24/2023 | 3,508 | 14,032 | $13.72 | 2/24/2033 | 13,358 | $155,220 | 7,069 | $56,764 | | | 1/3/2024 | — | 30,538 | $10.36 | 1/3/2034 | 29,851 | $346,869 | 12,638 | $167,454 |

  39. Outstanding Equity Awards at December 31, 2024

    43 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  40. Outstanding Equity Awards at December 31, 2024

    | | | Option Awards | | | | Stock Awards | | | | | Name1 | Grant Date2 | Vested, Exercisable | Unvested | Option Exercise Price | Option Expiration Date | Unvested3 | Market Value of Unvested4 | Unvested Equity Incentive Plan Awards5 | Market Value of Equity Incentive Plan Awards5 | | Andrew M. Brophy | 1/4/2019 | — | — | $— | — | — | $— | — | $— | | | 1/3/2020 | — | — | $— | — | 123 | $1,429 | — | $— | | | 1/4/2021 | — | — | $— | — | 282 | $3,277 | — | $— | | | 1/4/2022 | — | — | $— | — | 1,657 | $19,254 | — | $— | | | 2/24/2023 | — | — | $— | — | 2,915 | $33,872 | — | $— | | | 1/3/2024 | — | — | $— | — | 4,826 | $56,078 | — | $— |

  41. Outstanding Equity Awards at December 31, 2024

    1.Mr. Singh had no equity awards outstanding at December 31, 2024. 2.Options and stock awards vest 20% per year on the anniversary of the grant date for each of the five years subsequent to the grant date. 3.Unless otherwise noted herein, restricted stock awards and RSUs vest at the rate of 20% annually, commencing on the first anniversary from the grant date, subject to accelerated vesting upon certain terminations of employment following certain corporate transactions involving the Company. The shares of Common Stock underlying the restricted stock awards and RSUs will be issued upon vesting. 4.Valued based on the closing price of a share of the Company’s Common Stock on December 31, 2024 as reported on the Nasdaq Global Select Market ($11.62). 5.PSU awards were granted under the 2020 Plan and vest upon certification by the Board in 2025, 2026 and 2027 provided that the performance targets, based on Relative TSR, are met for the three-year periods ended December 31, 2024, 2025 and 2026. The awards are valued at fair market value as of December 31, 2024. The number of outstanding unvested equity incentive plan awards is equal to the number of PSUs earned based on achieving a performance target at the 50th percentile. The 2023 and 2024 grants were valued at $8.03 and $13.25 per unit, respectively, based upon a Monte Carlo simulation used to determine the probable outcome of the performance condition at December 31, 2024. The 2022 grants are valued at the closing price of a share of the Company's Common Stock on December 31, 2024 as reported on the Nasdaq Global Select Market ($11.62) multiplied by the vesting percentage of target awards (51.2%) based on the Company's Relative TSR percentile rating of 25.6 for the performance period for that tranche of grants.

  42. Option Exercises and Stock Vested During 2024

    Option Exercises and Stock Vested During 2024 The following table sets forth information concerning the option exercises and stock awards vested of each of the NEOs1 during the year ended December 31, 2024:

  43. Option Exercises and Stock Vested During 2024

    | | Stock Option Awards | | Restricted Stock and Restricted Stock Units | | | | Number of Shares Acquired On Exercise | Value Realized on Exercise | Number of Shares Acquired On Vesting | Value Realized on Vesting | | Name | (#) | ($) | (#) | ($) | | Theodore Wahl | — | $— | 72,603 | $791,382 | | Andrew W. Kush | — | $— | 14,253 | $155,438 | | John C. Shea | — | $— | 14,253 | $155,438 | | Patrick J. Orr | — | $— | 9,261 | $101,894 | | Andrew M. Brophy | — | $— | 1,570 | $17,593 |

  44. Option Exercises and Stock Vested During 2024

    1.Mr. Singh had no stock option awards exercised or stock units vested during the year ended December 31, 2024. 44 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  45. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation The following table sets forth information concerning the non-qualified deferred compensation of each of the NEOs1 during the year ended December 31, 2024, as well as the aggregate balance of non- qualified deferred compensation as of December 31, 2024:

  46. Non-Qualified Deferred Compensation

    | Name | Executive Contributions in Last FY | Registrant Contributions in Last FY | Withdrawals | Aggregate Gains (Losses) in Last FY | Aggregate Balance at Last FYE | | Theodore Wahl | $210,454 | $52,615 | $— | $1,004,220 | $5,936,770 | | Andrew W. Kush | $120,225 | $30,062 | $— | $140,484 | $1,371,270 | | John C. Shea | $106,240 | $26,564 | $— | $309,095 | $2,228,957 | | Patrick J. Orr | $119,344 | $26,331 | $— | $98,017 | $848,334 | | Andrew M. Brophy | $46,160 | $11,550 | $(32,249) | $53,672 | $310,723 |

  47. Non-Qualified Deferred Compensation

    1.Mr. Singh had no involvement in the non-qualified deferred compensation plan for the year ended December 31, 2024.

  48. Pay Ratio Disclosure

    Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is providing the following information about the relationship of the annual total compensation of the Company’s employees and the annual total compensation of the President and Chief Executive Officer. The CEO pay ratio figures below are a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. At December 31, 2024, we had over 35,000 employees (full-time and part-time), all located in the United States. We determined the total annual compensation for our employees for the year ended December 31, 2024 using data from our payroll records for the month of December 2024, which we then extrapolated for the full year of 2024. The components of total annual compensation for our employees are the same as those used to determine the total compensation of our NEOs for the purposes of the SCT. We did not make any full-time equivalent adjustments for part-time employees. The results were then ranked, excluding the President and Chief Executive Officer, from lowest to highest, and the median employee was identified. We then compared the total annual compensation of the median employee to that of the President and Chief Executive Officer. The total annual compensation of the median employee for the year ended December 31, 2024 was $32,389. For the year ended December 31, 2024, the ratio of our President and Chief Executive Officer’s total annual compensation to that of our median employee was approximately 145:1. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. 45 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation

  49. Pay Versus Performance

    Pay Versus Performance

  50. Pay Versus Performance

    | Year | Summary Compensation Table total for PEO1 | Compensation Actually Paid (“CAP”) to PEO 1, 2 | Average Summary Compensation Table total for non-PEO NEOs4 | Average CAP to non-PEO NEOs2, 4, 5 | Value of initial fixed $100 investment based on: | | Net income7 (in thousands) | Income before income taxes7, 8 (in thousands) | | | | | | | Total shareholder return6 | Peer group total shareholder return6 | | | | 2024 | $4,683,646 | $5,888,034 | $972,136 | $1,136,770 | $54 | $164 | $39,471 | $52,941 | | 2023 | $4,559,910 | $3,337,578 | $1,090,770 | $953,222 | $48 | $144 | $38,386 | $53,056 | | 2022 | $4,414,263 | $2,445,181 | $1,027,589 | $765,385 | $56 | $123 | $34,243 | $44,553 | | 2021 | $4,405,773 | $1,424,534 | $986,045 | $593,330 | $78 | $142 | $48,543 | $65,512 | | 2020 | $4,182,274 | $4,908,914 | $1,254,008 | $1,535,216 | $120 | $114 | $98,682 | $129,186 |

  51. Pay Versus Performance

    1.Our CEO, Theodore Wahl, is listed in the table as the principal executive officer (“PEO”) for each year. 2.Compensation actually paid is defined in Item 402(v)(2)(iii) of Regulation S-K. Reconciliation of the amounts included in the Summary Compensation Table to compensation actually paid is provided in the “Narrative Disclosure to Pay Versus Performance Table” section below. 3.Below is the reconciliation of the Summary Compensation Table to Compensation Actually Paid for the PEO:

  52. Pay Versus Performance

    | Reconciliation of Summary Compensation to CAP for Principal Executive Officer | 2024 | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table | $4,683,646 | $4,559,910 | $4,414,263 | $4,405,773 | $4,182,274 | | Less: Equity awards included in Summary Compensation Table | (3,320,182) | (3,193,867) | (2,951,289) | (3,092,728) | (2,618,792) | | Add: Year-end fair value of equity awards granted during current year that are outstanding and unvested at year-end | 3,717,865 | 2,043,205 | 1,695,607 | 1,322,617 | 2,576,882 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested at year-end | 660,788 | (126,179) | (961,109) | (1,452,692) | 526,740 | | Add: Change in fair value during current year of equity awards granted in prior years that vested in the current year | 95,539 | (2,866) | 10,543 | 10,543 | 2,750 | | Add: Fair value on vesting date for current year equity grants | 50,378 | 57,375 | 74,167 | 62,953 | 65,323 | | Less: Fair value at end of prior year for any stock awards which were forfeited during current year | — | — | — | — | — | | Add: Dollar value of any dividends, dividend equivalents, or other earnings paid on stock or option awards | — | — | 162,999 | 168,068 | 173,737 | | Total Compensation Actually Paid (CAP): | $5,888,034 | $3,337,578 | $2,445,181 | $1,424,534 | $4,908,914 |

  53. Pay Versus Performance

    4.The non-PEO NEOs included in the calculation for average summary compensation and compensation actually paid for each applicable year are the following: •2024: John C. Shea, Andrew W. Kush, Patrick J. Orr, Andrew M. Brophy, and Vikas Singh •2023: John C. Shea, Andrew W. Kush, Patrick J. Orr, and Andrew M. Brophy •2022: John C. Shea, Andrew W. Kush, Patrick J. Orr, and Andrew M. Brophy •2021: John C. Shea, Andrew W. Kush, Patrick J. Orr, Jason J. Bundick, and Andrew M. Brophy •2020: John C. Shea, Michael E. McBryan (former Executive Vice President, Chief Revenue Officer & Director), Andrew W. Kush, and Jason J. Bundick 46 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation 5.Below is the reconciliation of the Summary Compensation Table to Compensation Actually Paid to the non-PEO NEOs:

  54. Pay Versus Performance

    | Reconciliation of Summary Compensation to Average CAP for Non-Principal Executive Officer Named Executive Officers | 2024 | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table | $972,136 | $1,090,770 | $1,027,589 | $986,045 | $1,254,008 | | Less: Equity awards included in Summary Compensation Table | (396,168) | (430,864) | (421,208) | (404,679) | (427,318) | | Add: Year-end fair value of equity awards granted during current year that are outstanding and unvested at year-end | 458,214 | 289,006 | 242,410 | 187,532 | 534,983 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested at year-end | 73,246 | (15,443) | (127,340) | (218,593) | 110,687 | | Add: Change in fair value during current year of equity awards granted in prior years that vested in the current year | 18,527 | (1,594) | 1,272 | 1,429 | 790 | | Add: Fair value on vesting date for current year equity grants | 10,815 | 21,347 | 20,827 | 18,401 | 28,039 | | Less: Fair value at end of prior year for any stock awards which were forfeited during current year | — | — | — | — | — | | Add: Dollar value of any dividends, dividend equivalents, or other earnings paid on stock or option awards | — | — | 21,835 | 23,195 | 34,027 | | Total Compensation Actually Paid (CAP): | $1,136,770 | $953,222 | $765,385 | $593,330 | $1,535,216 |

  55. Pay Versus Performance

    6.Total shareholder return (TSR) is calculated based on the return of $100 invested four years prior to the applicable year-end date in stock or index, including reinvestment of dividends. For purposes of the peer group TSR, the Company used the peer group it uses for purposes of Regulation S-K Item 201(e)(1)(ii), please see the Company’s Annual Report on Form 10-K filed with the SEC on February 16, 2024 for further information (the “2023 Form 10-K”). 7.During the 2023 year-end financial reporting process, the Company identified a prior period accounting error for accrued payroll, and specifically accrued vacation that was concluded not to be material to the Company's previously reported consolidated financial statements.The Company corrected the errors by revising the Company's Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income for the years ended December 31, 2022 and 2021 in the 2023 Form 10-K. The amounts listed in the table above for Net Income as well as Income Before Income Taxes are reflective of these corrections. 8.Our company-selected measure is Income before Income Taxes. Our Consolidated Statements of Comprehensive Income included on our Form 10-K provides details of how this is calculated. Differences in the calculations of compensation in the summary compensation and the compensation actually paid are driven primarily on the determination of fair value used to calculate GAAP stock compensation expense and the SEC definition in the compensation actually paid calculation and the timing of equity awards issued during the years ended December 31, 2024, 2023, 2022, 2021 and 2020. For each of the periods included in the CAP table, we have granted the vast majority of our equity awards to the NEOs, including the PEO, and other employees during the first quarter of each fiscal year. Expense for GAAP purposes (which is included in the Summary Compensation Table) for these grants is measured at fair value at the grant date using the current stock price and other inputs that are determined at the grant date, which is then recorded as straight-line stock compensation expense over the vesting period for each grant. 47 HEALTHCARE SERVICES GROUP | PROXY STATEMENT 2025 Executive Compensation In the CAP calculation, the fair value of each equity award is revalued at the end of each fiscal year (instead of the grant date) or upon vesting. For unvested RSUs, we calculated the fair value of outstanding units as the total number of unvested shares times the year-end stock price. For unvested stock options, we calculated the fair value of outstanding unvested options using an updated Black- Scholes model with inputs updated for each respective year-end date. For unvested PSUs, we calculated the fair value of unvested units using an updated Monte-Carlo model with inputs updated for each respective year-end date. Changes in fair value from the grant date, or the previous year-end, to the end of each year in the table were primarily driven by changes in our stock price. No changes were made to the valuation methods or models used in calculating the fair value as of year-end versus each grant date, and no significant changes were made to assumptions used in the models. As equity awards are a significant portion of the compensation package provided to our NEOs, our CAP may fluctuate significantly from period to period based on changes in our stock price.