DEF 14A of Ensign Group, Inc, Apr 5, 2024

DEF 14A of Ensign Group, Inc

Filed Apr 5, 2024 · FY20230001125376-24-000045

Open on EDGAR

  1. Election of Directors

    Election of Directors

  2. Election of Directors

    | Recommendation of the Board: | FOR each director nominee | ✓ |

  3. Election of Directors

    Upon the recommendation of the Nominating and Corporate Governance Committee, our Board, including its independent directors, selected and approved Mr. Christopher R. Christensen and Mr. Daren J. Shaw as nominees for election as Class II directors, the class being elected at the Annual Meeting. Each nominee is to serve for a term of three years, expiring at the 2027 annual meeting of stockholders or until his successor is duly appointed or elected and qualified or until his earlier death, resignation or removal. Mr. Christopher R. Christensen and Mr. Daren J. Shaw currently serve as members of our Board and if elected have agreed to continue to serve on the Board and on the committees set forth below. In the event the nominees named herein are unable to serve or decline to serve at the time of the Annual Meeting, the persons named in the enclosed proxy will exercise discretionary authority to vote for substitutes. Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR the nominees. This proxy cannot be voted for a greater number of persons than two.

  4. Election of Directors

    | | | | Committee Membership | | | | | | Name | Age | Director Since | Board of Directors | Audit Committee | Quality Assurance and Compliance | Nominating and Corporate Governance | Compensation | | Christopher R. Christensen | 55 | 1999 | ✓ | | | | | | Daren J. Shaw | 67 | 2012 | ✓ | Chair | | ✓ | ✓ |

  5. Election of Directors

    Background information regarding the nominees and all other directors as of March 21, 2024, including some of the attributes that led to their selection, appears below. In addition, the Board firmly believes that the experience, attributes and skills of any single director nominee should not be viewed in isolation, but rather in the context of the experience, attributes, and skills that all director nominees bring to the Board as a whole, each of which contributes to the function of an effective Board.

  6. Determinations Regarding Director and Nominee Independence

    Determinations Regarding Director and Nominee Independence The Company's common stock is listed on the NASDAQ Global Select Market. The NASDAQ Listing Rules require that a majority of the members of a listed company’s board of directors qualify as “independent”. After review of all of the relevant transactions or relationships between each director (and his or her family members) and us, our senior management and our independent registered public accounting firm, our Board has affirmatively determined that each of Drs. Ann S. Blouin and John O. Agwunobi, Ms. Swati B. Abbott, and Messrs. Daren J. Shaw and Barry M. Smith are "independent" within the meaning of the applicable NASDAQ Listing Rules. Further, each member of our Board serving on our Audit Committee, Compensation and Nominating Committee and Corporate Governance Committee is “independent” within the meaning of the applicable NASDAQ Listing Rules and, as applicable, the Securities Exchange Act of 1934, as amended the Exchange Act.

  7. Determinations Regarding Director and Nominee Independence

    | NOMINEES AND DIRECTORS |

  8. Determinations Regarding Director and Nominee Independence

    The following biographical information sets forth certain information with respect to the nominees for election as well as the continuing directors whose terms expire at the annual meeting of stockholders in 2025 and 2026. The information is current as of March 21, 2024. The information presented below for each director includes the specific experience, qualifications, attributes and skills that led us to the conclusion that such director should be nominated to serve on our Board in light of our business.

  9. Nominees for Election to the Board of Directors

    Nominees for Election to the Board of Directors

  10. Class II Directors with Terms Ending at the 2027 Annual Meeting of Stockholders

    Class II Directors with Terms Ending at the 2027 Annual Meeting of Stockholders

  11. Class II Directors with Terms Ending at the 2027 Annual Meeting of Stockholders

    | Christopher R. Christensen | AGE | DIRECTOR SINCE | COMMITTEES | | Co-founder, Executive Chairman and Chairman of the Board | 55 | Formation in 1999 | | | Experience | | | | | Mr. Christensen assumed the role of President in 1999 and has been our Chief Executive Officer since April 2006. In May 2019, he transitioned to the position of Executive Chairman and the Chairman of the Board. Since the establishment of the company in 1999, Mr. Christensen has been a pivotal member of our Board of Directors. Mr. Christensen has been instrumental in guiding our company's growth and development since its inception. Before founding Ensign, he held the position of acting Chief Operating Officer of Covenant Care, Inc., a prominent long-term care provider based in California. Additionally, as a co-founder of both The Pennant Group, Inc. (NASDAQ: PNTG) and Care Trust REIT, Inc. (NASDAQ: CTRE), he assumed board roles for both companies upon their public listings and remains an active member of The Pennant Group's board from 2019 to present day. We believe that Mr. Christensen’s important role in our history, the creation of our culture, the financial discipline of our balance sheet and overall management of our company and its independent subsidiaries support the conclusion that he should serve as one of our directors and chairman. | | | |

  12. Class II Directors with Terms Ending at the 2027 Annual Meeting of Stockholders

    | Daren J. Shaw | AGE | DIRECTOR SINCE | COMMITTEES | | Director | 67 | 2012 | Audit (Chair), Compensation and Nominating & Corporate Governance | | Experience | | | | | Mr. Shaw has served as a member of our Board since March 2012. Mr. Shaw has served for more than 35 years in leadership capacities with several financial services firms. In 2019, he retired as a Managing Director of the Investment Banking Group at D.A. Davidson & Co., a middle-market full-service investment banking firm. While at D.A. Davidson & Co., Mr. Shaw served on the Senior Management Committee and board of directors and served as the lead investment banker in a wide variety of transactions, including public stock offerings, private placements, and mergers and acquisitions. Previously, Mr. Shaw served for 12 years with Pacific Crest Securities, in various roles, including Managing Director. Mr. Shaw also serves as a member of the board of directors of Profire Energy, Inc. (NASDAQ: PFIE). Mr. Shaw's previous leadership positions at numerous investment banking firms provide him with valuable financial understanding, and supports his role as Chair of our Audit Committee. We believe that Mr. Shaw’s extensive experience and leadership in working with financial institutions supports the conclusion that he should serve as one of our directors. | | | |

  13. Continuing Members of the Board of Directors

    Continuing Members of the Board of Directors

  14. Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

  15. Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    | Ann S. Blouin | AGE | DIRECTOR SINCE | COMMITTEES | | Director | 71 | 2018 | Quality Assurance and Compliance (Chair) and Nominating & Corporate Governance | | Experience | | | | | Dr. Blouin has served as a member of our Board since November 2018. In 2018, Dr. Blouin retired from her position as Executive Vice President of Customer Relations and previous position as Executive Vice President of Accreditation and Certification Operations at The Joint Commission where she provided leadership in aligning the strategic and operating goals of the organization with its client base. The Joint Commission has accreditation and certification programs across the care continuum, including long-term care. With more than 30 years of health care administration, consulting and clinical nursing experience, Dr. Blouin has held key senior leadership positions at community teaching hospitals and academic medical centers. While serving in key leadership roles with the consulting firms of Deloitte LLP, Ernst & Young Global Limited, Cap Gemini SE and Huron Consulting Group, she worked with multiple health systems across the United States and Canada to help them improve operating cost efficiency and effectiveness, revenue management, care coordination, and quality and patient safety. Dr. Blouin is currently serving as President of PSQ Advisory, working with boards and senior leadership to deliver strategic guidance on patient care quality and safety for America's health systems, since 2018. In addition, Dr. Blouin also serves on the Institute for Healthcare Improvement Board of Directors and as an editorial advisor for the Journal of Nursing Administration. Dr. Blouin is an Assistant Professor at Loyola University of Chicago. Dr. Blouin earned her Doctor of Philosophy (PhD) in Nursing Sciences and Master in Business Administration (MBA) from the University of Illinois at Chicago. Dr. Blouin received her Master of Science in Nursing (MSN) from Loyola University of Chicago, and Bachelor of Science in Nursing (BSN) from Lewis University in Romeoville, Illinois. We believe that Dr. Blouin’s extensive experience and leadership supports the conclusion that she should serve as one of our directors. | | | |

  16. Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    | Barry R. Port | AGE | DIRECTOR SINCE | COMMITTEES | | Chief Executive Officer and Director | 49 | 2019 | Quality Assurance and Compliance | | Experience | | | | | Mr. Port assumed the role of Chief Executive Officer in May 2019 while concurrently joining our Board. Prior to this, he served as Chief Operating Officer of Ensign Services, Inc., a wholly owned subsidiary specializing in consulting and management services for skilled nursing and senior living operations, from January 2012 to May 2019. Preceding this, Mr. Port held the position of President at Keystone Care, Inc., overseeing Texas facilities from March 2006 to December 2011. His earlier tenure includes serving as Chief Executive Officer at Bella Vita Health and Rehabilitation Center in Glendale, Arizona, a skilled nursing and assisted living campus, from March 2004 to March 2006. Mr. Port earned his Bachelors Degree from Brigham Young University and holds Masters Degrees in Business Administration and Health Administration from the W.P. Carey School of Business at Arizona State University. We believe that Mr. Port’s extensive operating experience, his leadership and business skills, support the conclusion that he should serve as one of our directors. | | | |

  17. Class III Directors with Terms Ending at the 2025 Annual Meeting of Stockholders

    | John O. Agwunobi | AGE | DIRECTOR SINCE | COMMITTEES | | Director | 59 | 2023 | Audit Committee and Quality Assurance & Compliance | | Dr. Agwunobi has held several positions in both the public and private sector. He assumed the role of Chief Executive Officer in March 2020 and Chairman in April 2020 at Herbalife Nutrition Inc., holding both positions until October 2022. Previously, Dr. Agwunobi served as Chief Health and Nutrition Officer at Herbalife, responsible for training, education, science strategy and product development since 2016. He has also served as Co-President of Herbalife from May 2018 to March 2020. Prior to joining Herbalife, Dr. Agwunobi was an independent consultant, advising a number of privately held health-related companies, including serving as an advisory board member of Shopko Stores Operating Co., LLC on behalf of the private equity firm Sun Capital Partners. He also served as a member of the board for Magellan Health Inc., a for-profit managed health care company, focused on special populations, complete pharmacy benefits and other specialty areas of healthcare from December 2014 to June 2019. From September 2007 to April 2014, Dr. Agwunobi served as Senior Vice President and President of Health and Wellness for Wal-Mart (NYSE: WMT) in the United States where he grew the business and provided insight and advice on the company’s health reform position. From December 2005 to September 2007, he served as the Assistant Secretary of Health for the U.S. Department of Health and Human Services, where he was responsible for disease prevention and health promotion. His responsibilities included the oversight of the Centers for Disease Control, National Institute of Health, the U.S. Food and Drug Administration, the Office of the U.S. Surgeon General, and numerous other public health offices and programs. Dr. Agwunobi currently serves as a director for Blue Bird Bio Inc., a post that he has held since June 2017. He is also currently serving as a member of the board of the U.S. African Development Foundation and has been serving in that capacity since 2008. We believe that Dr. Agwunobi's extensive experience in public health programs and governmental agencies relevant to the healthcare industry support the conclusion that he should serve as one of our directors. | | | |

  18. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

  19. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    | Barry M. Smith | AGE | DIRECTOR SINCE | COMMITTEES | | Director | 70 | 2014 | Compensation Committee, Nominating & Corporate Governance (Chair), and Quality Assurance & Compliance | | Experience | | | | | Mr. Smith has served as a member of our Board since 2014. He most recently served as Chairman and Chief Executive Officer of Magellan Health, Inc., the nation’s largest provider of behavioral health services and a leading national provider of radiology benefit management services, specialty pharmacy and prescription benefit management services, since 2013. He retired from Magellan at the end of 2019. He founded and served as Chairman, President and Chief Executive Officer of VistaCare, Inc., a national provider of hospice services, from 1996 to 2002, and he served as Chairman of VistaCare in 2003. From 1990 through 1995, Mr. Smith served as Chairman and Chief Executive Officer of Value Rx, Inc., which was then one of the country’s largest pharmacy benefit management companies and, prior to that, served as vice president of operations for PCS Health Systems, also a pharmacy benefit management firm. We believe Mr. Smith’s extensive experience as a proven and experienced leader in numerous healthcare businesses that are closely related to our businesses and his valuable strategic and other management insights support the conclusion that he should serve as one of our directors. | | | |

  20. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    | Swati B. Abbott | AGE | DIRECTOR SINCE | COMMITTEES | | Director | 60 | 2020 | Audit Committee, Compensation Committee (Chair), and Nominating & Corporate Governance | | Experience | | | | | Ms. Abbott has served as a member of our Board since January 2020. Ms. Abbott most recently served as the President and Chief Executive Officer of Health Intelligence Company LLC, doing business as Blue Health Intelligence, a healthcare data and analytics company, from May 2011 to March 2022. Prior to joining Blue Health Intelligence, Ms. Abbott served as the president of MEDai, Inc., an industry leader in AI based predictive analytics, prior to its acquisition by Reed Elsevier in 2008. She also served as Managing Director for the Medical Management Strategic Business Unit at ViPS. Currently, Ms. Abbott also serves on the board of TalkSpace, Inc. (NASDAQ: TALK). Until the middle of last year, she served as a Director of Prognos, Inc., a private healthacare data analytics company, before departing from their board. She also served as a Director of Magellan Health Inc. (NASDAQ: MGLN), until its acquisition by Centene in January 2022. We believe that Ms. Abbott's extensive experience and leadership in the healthcare services industry supports the conclusion that she should serve as one of our directors. | | | |

  21. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    | Suzanne D. Snapper | AGE | DIRECTOR SINCE | COMMITTEES | | Chief Financial Officer, Executive Vice President and Director | 50 | 2022 | Quality Assurance & Compliance | | Ms. Snapper has served in a multifaceted role within the Company since joining in April 2007, overseeing various critical functions including accounting, finance, information technology, tax, internal controls, investor relations, managed care, treasury, and finance risk management. She played a pivotal role as CFO in the successful spin-offs of CareTrust REIT (NASDAQ: CTRE) in 2014 and Pennant Group (NASDAQ: PNTG) in 2019, partnering with the team in implementing financial strategies to facilitate marketplace needs and unlock stockholder value. Additionally, her collaboration contributed significantly to the formation of the Standard Bearer REIT in 2022. In August 2009, she began serving as our Chief Financial Officer, following her earlier role as Vice President of Finance upon joining Ensign in 2007. During her tenure as Vice President of Finance, she played an instrumental role in guiding the Company through its initial public offering in 2007. Before Ensign, she acquired invaluable experience during her tenure at KPMG LLP from 1996 to April 2007. Her professional insight is underscored by her certification as a public accountant, solidifying her expertise and commitment to excellence in financial management and reporting. We believe that Ms. Snapper's leadership experience, her knowledge of our business and operations, and extensive finance experience with public companies, support the conclusion that she should serve as one of our directors. | | | |

  22. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    | BOARD STRUCTURE AND PRACTICES |

  23. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    Our Executive Chairman and Chairman of the Board, Christopher R. Christensen, is one of the Company's founders and is the former Chief Executive Officer and President. The role of the Executive Chairman of the Board is to provide governance and leadership to the Board, including helping to organize the Board's work and ensuring that its members have accurate and timely information to effectively carry out their responsibilities. The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board believes it is in the best interests of the Company to make that determination based upon the position and direction of the Company and the membership of the Board. The Board has determined that not having the Company's Chief Executive Officer also serve as Chairman of the Board is in the best interest of the Company's stockholders at this time. However, the Board has determined that having the Company's former Chief Executive Officer serve as the Executive Chairman of the Board is in the best interest of the Company stockholders because of the former Chief Executive Officer's extensive knowledge of the Company and its industry, and serves to foster greater communication between the Company's management and the Board. Below are some highlights of our corporate governance practices:

  24. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    | Board Structure and Practices | | Board's Role in Risk Oversight | | | ⬥ | Each of our Board members is elected at least every three years. | ⬥ | Our Board actively oversees the Company's risk and enterprise-wide risk management process in a way that balances managing risks while enhancing the long-term value of the Company for the benefit of the stockholders. | | ⬥ | We have majority voting for our director elections. | | | | ⬥ | Five of our Board members are independent, in accordance with NASDAQ Listing Rules and our Corporate Governance Guidelines at investor.ensigngroup.net/governance. | ⬥ | Our Board focuses on effective risk oversight to set the Company's tone and culture towards effective risk management by developing and establishing a mutual understanding with management of the Company's risk philosophy and overall appetite for risk. | | | | ⬥ | Our Board is actively involved with management assessment of existing risk management processes and how management identifies, assesses and manages the Company's most significant risk exposures. Our Board expects frequent updates from management about the Company's most significant risks so as to enable it to evaluate whether management is responding appropriately. | | ⬥ | We have adopted a process to enable stockholders to nominate directors in accordance with our Bylaws | | | | ⬥ | Our independent directors meet frequently in executive session. | ⬥ | Our Board is actively engaged in managing talent and long-term succession planning for executives. |

  25. Class I Directors with Terms Ending at the 2026 Annual Meeting of Stockholders

    Our Board relies on each of its sub-committees (the "Board Committees") to help oversee the risk management responsibilities relating to the functions performed by such Board Committees. Each of the Board Committees are required to make regular reports of its actions and communicate any recommendations to the Board, including recommendations to assist the Board with its overall risk oversight function. †Our Audit Committee periodically discusses with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies. †Our Compensation Committee helps the Board to identify the Company's exposure to any risks potentially created by our compensation programs and practices. For a further discussion of how the Compensation Committee helps mitigate this risk, see the section titled "Compensation Discussion and Analysis - Compensation Policy and Objectives". †Our Nominating and Corporate Governance Committee helps the Board establish qualifications for a director nominee, including qualities and skills. They oversee the Corporate Governance policies, procedures and guidelines for the Company. †Our Quality Assurance and Compliance Committee oversee risks relating to the Company's policies and assists the Board and management in promoting an organizational culture that encourages commitment to ethical conduct and a commitment to compliance with the law.

  26. AUDIT COMMITTEE

    | DIRECTOR COMPENSATION |

  27. Principal Economic Elements of Executive Compensation

    Principal Economic Elements of Executive Compensation Base Salary. We believe it is important to pay our executives' salaries within a competitive market range in order to attract and retain highly talented executives. Although historically we have not set executive salaries based upon any particular benchmarks, we may from time to time generally review relevant market data to assist us in our compensation decision process. We have historically validated our compensation decisions by comparing the compensation of executives at other public companies in the healthcare and real estate investment trust industries to the compensation of our executives. Our Compensation Committee reviewed the published compensation of the NEOs of National Healthcare Corporation, Amedysis, Inc., Encompass Healthcare Corp., LTC Properties, Inc., Omega Healthcare Investors, Inc., Welltower Inc., Select Medical Holdings Corp., CareTrust REIT Inc., and National Health Investors, Inc. We believe that the base salaries and the total compensation of our executives are on the lower end of base salaries and median total compensation of executives with similar positions at comparable companies. Each of our executive's base salary is generally determined based upon job responsibilities, individual experience and the value the executive provides to our company. The Compensation Committee considered each of these factors in determining the compensation each executive would be paid in 2023. We may elect to change this practice in future years, and periodically in the past, the Compensation Committee has elected to employ a Compensation Adviser to examine our compensation practices. The decision, if any, to materially increase or decrease an executive's base salary in subsequent years will likely be based upon these same factors and others recommended by a Compensation Adviser, if any. Our Compensation Committee makes decisions regarding base salary at the time the executive is hired, and makes decisions regarding any changes to base salary on an annual basis. Annual Cash Bonuses. We establish an executive incentive program each year, pursuant to which certain executives may earn annual bonuses based upon our performance. Historically, in the first quarter of each year, our Compensation Committee identifies the plan's participants for the year and establishes an objective formula by which the amount, if any, of the plan's bonus pool will be determined. The Compensation Committee also has the discretion to allocate the bonus pool among the individual executives prior to the end of the year and any such early allocation will remain subject to further adjustments upon the final determination of the bonus pool calculations during the first quarter of each succeeding year. This formula is based upon adjusted annual earnings before provision for income taxes (EBT), a non-GAAP financial metric. Refer to the reconciliation of adjusted EBT in the Pay versus Performance section within this proxy statement. The lowest target in 2023 increased by 10.0% from the lowest target in 2022. Our Compensation Committee established the following formula for the bonus pool under the executive compensation plan for 2023 (the "2023 Bonus Pool"):

  28. Principal Economic Elements of Executive Compensation

    | Adjusted Annual Earnings Before Provision for Income Taxes (EBT) in 2023 | 2023 Bonus Pool | | For EBT up to $40.0 million | $— | | For EBT greater than $40.00 million, but less than $48.25 million | EBT between $40.00 million and $48.25 million * 2.5% | | For EBT greater than $48.25 million, but less than $56.50 million | EBT between $48.25 million and $56.50 million * 5.0% | | For EBT greater than $56.5 million, but less than $64.75 million | EBT between $56.50 million and $64.75 million * 7.5% | | For EBT greater than $64.75 million, but less than $79.25 million | EBT between $64.75 million and $79.25 million * 10.0% | | For EBT greater than $79.25 million, but less than $106.25 million | EBT between $79.25 million and $106.25 million * 12.5% | | For EBT greater than $106.25 million | Amount of EBT over $106.25 million * 15.0% |

  29. Principal Economic Elements of Executive Compensation

    Except with respect to grants to our independent directors and other stock grants issued pursuant to the executive incentive plan, the stock options and restricted stock awards that we grant generally vest as to 20% of the shares of common stock underlying the option or restricted stock award on each anniversary of the grant date. If a recipient’s employment with us terminates, then the restricted stock that remains unvested as of the date of the termination of the recipient’s employment will be forfeited without compensation. Until vested, the restricted stock may not be transferred, and vested shares shall be subject to our insider trading policy. Stock options generally have a maximum term of ten years. The grant date of our stock options and restricted stock awards is generally the date our Board or Compensation Committee meets to approve such stock option grants or restricted stock awards. Our Board or Compensation Committee historically has approved stock-based awards at regularly scheduled meetings. Our Board and Compensation Committee intend to continue this practice of approving the majority of stock-based awards at regularly scheduled meetings on a quarterly basis, unless earlier approval is required for a new-hire inducement or position change grant; regardless of whether or not our Board or Compensation Committee knows material non-public information on such date. The exercise price of our stock options is the fair market value of our common stock on the date of grant as determined by the closing price of our common stock on the NASDAQ Stock Market on the date of grant. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares of common stock underlying the option, including voting rights and the right to receive dividends or dividend equivalents. However, the recipients of restricted stock will have the right to vote and to receive any dividends or other distributions paid with respect to their shares of restricted stock, whether vested or unvested. The NEOs receiving stock awards issued pursuant to the executive plan will be required to hold them for one year from the grant date in which they are earned. The ownership and restriction on the restricted stock awards will not terminate upon separation of the individual from the Company. Mr. Christopher Christensen and Mr. Barry Port has made recommendations to our Compensation Committee and Board regarding the amount of stock options and other compensation to grant to our other executives based upon their assessment of performance, and may continue to do so in the future. Our executive officers, however, do not have any role in determining the timing of our stock option grants. Although we do not have any formal policy for determining the amount of stock-based awards or the timing of our stock-based awards, we have historically granted stock options or restricted stock to high-performing employees in recognition of their individual achievements and contributions to our company, and in anticipation of their future service and achievements. We may in the future introduce a more formal plan. Other Compensation. Our executives are eligible to receive the same benefits that are available to all employees, including the premiums paid to provide life insurance equal to each executive's annual salary and the premiums to provide accidental death and dismemberment insurance. For 2023, Christopher Christensen, Barry Port and Spencer Burton received automobile allowances of $15,900, $11,000 and $10,800, respectively. In addition, Christopher Christensen, Barry Port and Chad Keetch received third-party tax service payments of $18,850, $6,475 and $3,035, respectively. Non-Qualified Deferred Compensation. The Company implemented non-qualified deferred compensation plan (the DCP) that was effective in 2019 for our executives. The DCP allows participating executives to defer up to 100% of their eligible bonuses. Additionally, the plan allows for the employee deferrals to be deposited into a rabbi trust and the funds are generally invested in individual variable life insurance contracts owned by us that are specifically designed to informally fund savings plans of this nature. This plan was expanded to the executives and other highly compensation employees on January 1, 2020 to allow the deferral of a portion of their base and bonus compensation.

  30. Tax Treatment of Compensation

    Tax Treatment of Compensation The tax reform legislation signed into law on December 22, 2017 made the following changes to Code Section 162(m), which became effective on January 1, 2018: (1) the annual $1.0 million compensation deduction limit will apply to any individual who served as the Chief Executive Officer or Chief Financial Officer at any time during the taxable year and the three other most highly compensated officers (other than the Chief Executive Officer and Chief Financial Officer) for the taxable year; (2) once an individual becomes a covered employee subject to Code Section 162(m) for any taxable year beginning after December 31, 2016, that individual will remain a covered employee for all future years, including after termination of employment or even death; and (3) the exemption under Code Section 162(m) for qualified performance-based compensation and commissions will be eliminated (other than with respect to payments made pursuant to certain "grandfathered" arrangements entered into prior to November 2, 2017), so that all compensation paid to a covered employee in excess of $1.0 million will be nondeductible, including post-termination and post-death payments, severance, deferred compensation and payments from nonqualified plans. Due to the tax reform legislation, and in particular the repeal of Code Section 162(m) performance-based compensation exemption, compensation that is paid from bonus plans, equity compensation awards and other incentive compensation arrangements will now likely count against the Code Section 162(m) annual $1.0 million limit and therefore it is likely that compensation paid to covered employees which exceeds $1.0 million in a given year will not be tax deductible. The Compensation Committee believes that certain factors other than tax deductibility take precedence when determining the forms and levels of executive compensation most appropriate and in the best interests of us and our stockholders. For example, the Compensation Committee may approve compensation, such as discretionary cash bonuses or time-vesting restricted stock awards, that will not meet the Section 162(m) requirements in order to, among other things, enable competitive levels of total compensation of our NEOs. Given our changing industry and business, as well as the competitive market for outstanding executives, the Compensation Committee believes that it is important to retain the flexibility to design compensation programs consistent with its overall executive compensation philosophy even if some executive compensation is not fully deductible. While the Compensation Committee cannot predict how the deductibility limit may impact our compensation program in future years, the Compensation Committee intends to maintain an approach to executive compensation that strongly links pay to performance.

  31. Alignment of pay with performance

    | PAY RATIO DISCLOSURE |

  32. Summary Compensation Table

    Summary Compensation Table

  33. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Option Awards($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | | Christopher R. Christensen | 2023 | 588,519 | 289,004 | 830,640 | 2,294,364 | 43,665(4) | 4,046,192 | | Co-Founder, Executive Chairman | 2022 | 571,378 | 245,451 | 821,182 | 2,416,642 | 37,872 | 4,092,525 | | and Chairman of Board | 2021 | 554,736 | 211,094 | 740,592 | 2,241,291 | 40,155 | 3,787,868 | | Barry R. Port | 2023 | 517,734 | 2,912,522 | 1,916,248 | 5,676,027 | 22,864(5) | 11,045,395 | | Chief Executive Officer | 2022 | 502,654 | 438,305 | 1,718,716 | 5,338,394 | 22,694 | 8,020,763 | | | 2021 | 488,014 | 422,187 | 1,582,525 | 4,906,503 | 22,243 | 7,421,472 | | Suzanne D. Snapper | 2023 | 427,693 | 2,758,812 | 1,670,082 | 4,913,346 | 7,234(6) | 9,777,167 | | Chief Financial Officer | 2022 | 415,236 | 394,475 | 1,506,637 | 4,641,419 | 6,736 | 6,964,503 | | and Executive Vice President | 2021 | 403,142 | 379,969 | 1,406,499 | 4,341,080 | 2,265 | 6,532,955 | | Chad A. Keetch | 2023 | 388,301 | 2,517,925 | 1,160,412 | 3,245,824 | 8,198(7) | 7,320,660 | | Chief Investment Officer | 2022 | 376,991 | 280,515 | 1,014,219 | 3,068,614 | 8,555 | 4,748,894 | | and Executive Vice President and Secretary | 2021 | 366,011 | 253,312 | 902,276 | 2,746,018 | 7,922 | 4,275,539 | | Spencer W. Burton | 2023 | 329,212 | 2,630,349 | 1,407,393 | 4,156,633 | 17,510(8) | 8,541,097 | | President and Chief Operating Officer, | 2022 | 319,623 | 280,515 | 1,174,928 | 3,720,674 | 16,988 | 5,512,728 | | Ensign Services, Inc. | 2021 | 310,313 | 253,312 | 1,056,519 | 3,392,175 | 16,827 | 5,029,146 |

  34. Summary Compensation Table

    (1)The annual amounts shown are the amounts of total compensation cost which will be recognized over the five-year vesting period related to options to purchase common stock which were granted during fiscal years 2023, 2022 and 2021, as a result of the adoption of ASC 718. These amounts disregard the estimated forfeiture rate which is considered when recognizing the ASC 718 expense in the consolidated financial statements. These awards are not immediately exercisable and vest over five years. For a discussion of valuation and forfeiture assumptions, see Note 16 in our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (2)The annual amounts shown are the amounts of compensation cost which will be recognized over the five-year vesting period related to restricted stock awards which were granted during fiscal years 2023, 2022 and 2021, as a result of the adoption of ASC 718. These amounts disregard the estimated forfeiture rate which is considered when recognizing the ASC 718 expense in the consolidated financial statements. For a discussion of valuation and forfeiture assumptions, see Note 16 in our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. In addition, a portion of the bonuses paid under the 2023 executive incentive plan to Christopher Christensen, Barry Port, Suzanne Snapper, Chad Keetch and Spencer Burton of $576,260, $1,425,658, $1,234,002, $815,182 and $1,043,993, respectively. In 2022, bonuses were paid to Christopher Christensen, Barry Port, Suzanne Snapper, Chad Keetch and Spencer Burton of $595,502, $1,315,716, $1,143,937, $756,299 and $917,008, respectively, and in 2021, bonuses were paid to Christopher Christensen, Barry Port, Suzanne Snapper, Chad Keetch and Spencer Burton of $535,092, $1,171,525, $1,036,599, $655,676 and $809,919, respectively, was in the form of fully vested stock awards. See further discussion under the heading "Compensation Discussion and Analysis--Principal Economic Elements of Executive Compensation." (3)The amounts shown in this column constitute the cash bonuses made to certain NEOs. Christopher Christensen, Suzanne Snapper, Barry Port and Chad Keetch participated in our executive incentive program. These awards are discussed in further detail under the heading "Compensation Discussion and Analysis--Principal Economic Elements of Executive Compensation." The amounts shown include any amounts voluntarily deferred under the Deferred Compensation Plan. See Nonqualified Deferred Compensation below. (4)Consists of term life insurance and accidental death and dismemberment insurance payments of $2,690, a matching contribution to The Ensign Group, Inc. 401(k) retirement plan of $1,650 and Deferred Compensation Plan of $4,575, third-party tax service payments of $18,850 and a car allowance of $15,900. (5)Consists of term life insurance and accidental death and dismemberment insurance payments of $814, a matching contribution to The Ensign Group, Inc. Deferred Compensation Plan of $4,575, third-party tax service payments of $6,475 and a car allowance of $11,000. (6)Consists of term life insurance and accidental death and dismemberment insurance payments of $1,009 and a matching contribution to The Ensign Group, Inc. 401(k) retirement plan of $1,650 and Deferred Compensation of $4,575. (7)Consists of term life insurance and accidental death and dismemberment insurance payments of $588, a matching contribution to The Ensign Group, Inc. Deferred Compensation Plan of $4,575, and third-party tax service payments of $3,035. (8)Consists of term life and accidental death and dismemberment insurance payments of $485, a matching contribution to The Ensign Group, Inc. 401(k) retirement plan of $1,650 and Deferred Compensation Plan of $4,575, and a car allowance of $10,800.

  35. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information regarding grants of plan-based awards made to our NEOs during 2023.

  36. Grants of Plan-Based Awards

    | | | All Other Stock Awards: Number of Shares or Stock Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Options and Stock Awards ($) | | Name | Grant Date | | | | | | Christopher R. Christensen | 2/7/2023 | 6,627(1) | — | — | 595,502 | | | 5/18/2023 | 2,800(2) | — | — | 254,380 | | | 5/18/2023 | — | 7,000 | 90.85 | 289,004(3) | | Barry R. Port | 2/7/2023 | 14,641(1) | — | — | 1,315,716 | | | 2/7/2023 | — | 12,500 | 89.86 | 519,543(3) | | | 5/18/2023 | 5,400(2) | — | — | 490,590 | | | 5/18/2023 | — | 13,500 | 90.85 | 557,364(3) | | | 11/2/2023 | — | 40,000 | 98.83 | 1,835,615(3) | | Suzanne D. Snapper | 2/7/2023 | 12,730(1) | — | — | 1,143,937 | | | 2/7/2023 | — | 12,500 | 89.86 | 519,543(3) | | | 5/18/2023 | 4,800(2) | — | — | 436,080 | | | 5/18/2023 | — | 12,000 | 90.85 | 495,435(3) | | | 11/2/2023 | — | 38,000 | 98.83 | 1,743,834(3) | | Chad A. Keetch | 2/7/2023 | 8,416(1) | — | — | 756,299 | | | 2/7/2023 | — | 12,500 | 89.86 | 519,543(3) | | | 5/18/2023 | 3,800(2) | — | — | 345,230 | | | 5/18/2023 | — | 9,500 | 90.85 | 392,220(3) | | | 11/2/2023 | — | 35,000 | 98.83 | 1,606,162(3) | | Spencer W. Burton | 2/7/2023 | 10,204(1) | — | — | 917,008 | | | 2/7/2023 | — | 12,500 | 89.86 | 519,543(3) | | | 5/18/2023 | 4,000(2) | — | — | 363,400 | | | 5/18/2023 | — | 10,000 | 90.85 | 412,863(3) | | | 11/2/2023 | — | 37,000 | 98.83 | 1,697,943(3) |

  37. Grants of Plan-Based Awards

    (1)Represents the number of shares of our common stock awarded in lieu of a cash bonus payable under our executive incentive plan for 2022 performance. These shares were fully vested on the grant date in February 2023. The value of these shares is included in the 2022 Executive Compensation bonus pool which is already disclosed in the Summary Compensation Table. (2)Represents the number of restricted stock awards granted under our 2022 Plan, which will vest in five equal installments on the first five anniversaries of the grant date. (3)The options amounts shown are the aggregate fair value of the stock option awards which were granted under our 2022 Plan in fiscal year 2023, which will be recognized over a five-year vesting period, as a result of adoption of ASC 718. These amounts disregard the estimated forfeiture rate which is considered when recognizing the ASC 718 expense in the consolidated financial statements. These awards are not immediately exercisable and vest over five years. For a discussion of valuation and forfeiture assumptions, see Note 16 in our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

  38. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table lists the outstanding equity incentive awards held by our NEOs as of December 31, 2023.

  39. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | Stock Awards | | | | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Un- exercisable | Option Exercise Price | Option Expiration | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | | Name | (#)(1) | (#)(1) | ($) | Date | (#) | ($)(2) | | Christopher R. Christensen | 3,539 | — | 15.80 | 5/25/2027 | — | — | | | 18,877 | 4,720 | 45.34 | 5/30/2029 | 1,600 | 179,536 | | | 3,000 | 2,000 | 44.84 | 5/28/2030 | 800 | 89,768 | | | 2,500 | 3,750 | 82.20 | 5/27/2031 | 1,500 | 168,315 | | | 1,400 | 5,600 | 80.60 | 5/26/2032 | 2,240 | 251,350 | | | — | 7,000 | 90.85 | 5/18/2033 | 2,800 | 314,188 | | Barry R. Port | 10,618 | — | 21.39 | 7/30/2025 | — | — | | | 5,899 | — | 15.93 | 8/31/2026 | — | — | | | 9,438 | — | 15.80 | 5/25/2027 | — | — | | | 15,102 | 3,775 | 45.34 | 5/30/2029 | 1,280 | 143,629 | | | 3,000 | 2,000 | 44.84 | 5/28/2030 | 800 | 89,768 | | | 5,000 | 7,500 | 82.20 | 5/27/2031 | 3,000 | 336,630 | | | 2,500 | 10,000 | 80.60 | 5/26/2032 | 4,000 | 448,840 | | | — | 12,500 | 89.86 | 2/7/2033 | — | — | | | — | 13,500 | 90.85 | 5/18/2033 | 5,400 | 605,934 | | | — | 40,000 | 98.83 | 11/2/2033 | — | — | | Suzanne D. Snapper | 10,618 | — | 21.39 | 7/30/2025 | — | — | | | 8,258 | — | 15.93 | 8/31/2026 | — | — | | | 8,258 | — | 15.80 | 5/25/2027 | — | — | | | 14,158 | 3,539 | 45.34 | 5/30/2029 | 1,200 | 134,652 | | | 3,000 | 2,000 | 44.84 | 5/28/2030 | 800 | 89,768 | | | 4,500 | 6,750 | 82.20 | 5/27/2031 | 2,700 | 302,967 | | | 2,250 | 9,000 | 80.60 | 5/26/2032 | 3,600 | 403,956 | | | — | 12,500 | 89.86 | 2/7/2033 | — | — | | | — | 12,000 | 90.85 | 5/18/2033 | 4,800 | 538,608 | | | — | 38,000 | 98.83 | 11/2/2033 | — | — | | Chad A. Keetch | 10,618 | — | 21.39 | 7/30/2025 | — | — | | | 8,258 | — | 15.93 | 8/31/2026 | — | — | | | 8,258 | — | 15.80 | 5/25/2027 | — | — | | | 9,438 | 2,360 | 45.34 | 5/30/2029 | 800 | 89,768 | | | 3,000 | 2,000 | 44.84 | 5/28/2030 | 800 | 89,768 | | | 3,000 | 4,500 | 82.20 | 5/27/2031 | 1,800 | 201,978 | | | 1,600 | 6,400 | 80.60 | 5/26/2032 | 2,560 | 287,258 | | | — | 12,500 | 89.86 | 2/7/2033 | — | — | | | — | 9,500 | 90.85 | 5/18/2033 | 3,800 | 426,398 | | | — | 35,000 | 98.83 | 11/2/2033 | — | — | | Spencer W. Burton | 10,618 | — | 21.39 | 7/30/2025 | — | — | | | 5,899 | — | 16.60 | 5/26/2026 | — | — | | | 5,899 | — | 15.93 | 8/31/2026 | — | — | | | 4,719 | — | 15.80 | 5/25/2027 | — | — | | | 4,719 | — | 22.49 | 2/16/2028 | — | — | | | 9,438 | — | 31.03 | 5/31/2028 | — | — | | | 14,158 | 3,539 | 45.34 | 5/30/2029 | 1,200 | 134,652 | | | 6,000 | 4,000 | 44.84 | 5/28/2030 | 1,600 | 179,536 | | | 3,000 | 4,500 | 82.20 | 5/27/2031 | 1,800 | 201,978 | | | 1,600 | 6,400 | 80.60 | 5/26/2032 | 2,560 | 287,258 | | | — | 12,500 | 89.86 | 2/7/2033 | — | — | | | — | 10,000 | 90.85 | 5/18/2033 | 4,000 | 448,840 | | | — | 37,000 | 98.83 | 11/2/2033 | — | — |

  40. Outstanding Equity Awards at Fiscal Year-End

    (1)Options vest in equal annual installments (20% each year) over a five-year term on the anniversary of the date of grant with the exercised portion of partially exercised options vesting prior to the unexercised portion of such options. (2)The market value of these shares at December 31, 2023 was $112.21.

  41. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table provides information for our NEOs about options that were exercised and restricted stock that vested in 2023.

  42. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value Realized on vesting ($)(2) | | Name | | | | | | Christopher R. Christensen | — | — | 17,687 | 1,574,106 | | Barry R. Port | — | — | 23,321 | 2,083,234 | | Suzanne D. Snapper | 173,013 | 15,205,206 | 22,130 | 1,975,416 | | Chad A. Keetch | 36,263 | 3,183,230 | 15,856 | 1,414,487 | | Spencer W. Burton | 5,899 | 547,378 | 14,404 | 1,288,869 |

  43. Option Exercises and Stock Vested

    (1)The value realized on the exercise of stock options is equal to the number of shares acquired multiplied by the difference between the exercise price and the market price of our common stock. The market price is the closing price of our common stock on the date of exercise. Shares exercised were granted with grant dates from 2014 to 2015. (2)The value realized on the vesting of restricted stock awards is equal to the number of shares vested multiplied by the market price of our common stock. The market price is the closing price of our common stock on the vesting date.

  44. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation During fiscal year 2019, the Company implemented non-qualified deferred compensation plan (the DCP) that was effective in 2019 for certain executives. The plan was then offered to other highly compensated employees, which went into effect on January 1, 2020. These individuals are otherwise ineligible for participation in the Company's 401(k) plan. The DCP allows participating employees to defer the receipt of a portion of their base compensation and certain employees up to 100% of their eligible bonuses. At the participant’s election, payments can be deferred until a specific date at least one year after the year of deferral or until termination of employment and can be paid in a lump sum or in up to ten annual installments. Separate deferral elections can be made for each year, and in limited circumstances, such as, financial hardship event, existing payment elections may be changed. The amounts deferred are credited with earnings and losses based upon the actual performance of the deemed investments selected by the participant. The rate of return for each participant varies depending on the specific investment elections made by the participant. Additionally, the plan allows for the employee deferrals to be deposited into a rabbi trust and the funds are generally invested in individual variable life insurance contracts owned by us that are specifically designed to informally fund savings plans of this nature. The following table shows contributions and earnings during fiscal year 2023 and the account balances as of December 31, 2023, for our NEOs under the deferred compensation plan. All of the contributions that are reported in the table below were already included in the Summary Compensation Table.

  45. Non-Qualified Deferred Compensation

    | | Executive Contributions in 2023 ($)(1) | Company Contribution in 2023 ($) | Aggregate Gains in 2023 ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at December 31, 2023 ($) | | Name | | | | | | | Christopher R. Christensen | 125,601 | 4,575 | 679,458 | — | 6,581,605(2) | | Barry R. Port | 1,107,603 | 4,575 | 391,945 | — | 4,486,989(3) | | Suzanne D. Snapper | 1,146,948 | 4,575 | 383,651 | — | 4,197,743(4) | | Chad A. Keetch | 649,165 | 4,575 | 118,807 | — | 2,614,852(5) | | Spencer W. Burton | 1,203,317 | 4,575 | 528,286 | — | 5,032,437(6) |

  46. Non-Qualified Deferred Compensation

    (1) These amounts are included in the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table for fiscal 2023, which is in the year earned but contributed in the deferred compensation plan in the year paid. Executive contributions also include 401(k) plan restoration contributions made by participants, which are not included in the Summary Compensation Table. (2) $1,208,321 and $1,120,645 of this amount was reported as bonus compensation to Mr. Christensen in the Summary Compensation Table for fiscal years 2022 and 2021, respectively. (3) $1,073,839 and $944,520 of this amount was reported as bonus compensation to Mr. Port in the Summary Compensation Table for fiscal years 2022 and 2021, respectively. (4) $1,070,355 and $995,270 of this amount was reported as bonus compensation to Ms. Snapper in the Summary Compensation Table for fiscal year 2022 and 2021, respectively. (5) $613,723 and $549,204 of this amount was reported as bonus compensation to Mr. Keetch in the Summary Compensation Table for fiscal years 2022 and 2021, respectively. (6) $913,270 and $946,087 of this amount was reported as bonus compensation to Mr. Burton in the Summary Compensation Table for fiscal years 2022 and 2021, respectively.

  47. Compensation Committee Interlocks and Insider Participation

    | PAY VERSUS PERFORMANCE |

  48. Pay versus Performance Table

    Pay versus Performance Table

  49. Pay versus Performance Table

    | | SCT Total for PEO ($)(1)(b) | CAP to PEO ($)(2)(c) | Average SCT Total for Non-PEO NEOs ($)(3)(d) | Average CAP to Non-PEO NEOs ($)(4)(e) | Value of Initial Fixed $100 Investment based on: | | Net income ($ in 000s) (7)(h) | Adjusted EBT ($ in 000s) (8)(i) | | Year (a) | | | | | Total Stockholder Return ($)(5)(f) | Peer Total Stockholder Return ($)(6)(g) | | | | 2023 | 11,045,395 | 9,700,462 | 7,421,279 | 6,507,428 | 250.09 | 114.10 | 209,399 | 365,310 | | 2022 | 8,020,763 | 8,001,750 | 5,329,663 | 5,377,792 | 210.40 | 87.81 | 224,681 | 314,608 | | 2021 | 7,421,472 | 7,480,916 | 4,906,377 | 5,107,759 | 186.25 | 103.32 | 194,652 | 280,373 | | 2020 | 6,517,328 | 7,486,367 | 4,141,230 | 5,393,718 | 161.37 | 98.69 | 170,478 | 233,992 |

  50. Pay versus Performance Table

    (1)The dollar amounts reported in column (a) represent the amounts of total compensation for our PEO, for each corresponding year in the "Total" column of the Summary Compensation Table. Refer to "Summary Compensation Table" in the proxy statement. (2)The dollar amounts reported in column (b) represent the amount of CAP to our PEO, as computed in accordance with PvP Rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Port during the applicable year. In accordance with PvP Rules, the following adjustments were made to our PEO's total compensation for each year to determine our PEO's CAP:

  51. Pay versus Performance Table

    | | SCT Total for PEO ($) | Equity Deductions from SCT Total ($)(a) | Equity Additions to SCT Total ($)(b) | Pension Additions to SCT Total ($) | CAP ($) | | Year | | | | | | | 2023 | 11,045,395 | (4,828,770) | 3,483,837 | N/A | 9,700,462 | | 2022 | 8,020,763 | (2,157,021) | 2,138,008 | N/A | 8,001,750 | | 2021 | 7,421,472 | (2,004,712) | 2,064,156 | N/A | 7,480,916 | | 2020 | 6,517,328 | (1,269,837) | 2,238,876 | N/A | 7,486,367 |

  52. Pay versus Performance Table

    a.The amounts in this column represent the grant date fair value of equity-based awards granted during each year. Pursuant to the requirements of Item 402(c)(2)(v) and (vi) of Regulation S-K, the Summary Compensation Table is required to include only those equity awards granted during the particular year. These equity awards are generally made in the second quarter of the year. In addition, awards are issued in the first quarter based on the executive bonus pool. b.The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:

  53. Pay versus Performance Table

    | | Year End Fair Value of Current Year Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Year that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or Other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Equity Additions to SCT Total ($) | | Year | | | | | | | | | 2023 | 1,708,869 | 569,448 | 1,315,716 | (113,903) | — | 3,708 | 3,483,837 | | 2022 | 648,175 | 354,762 | 1,171,525 | (40,726) | — | 4,272 | 2,138,008 | | 2021 | 441,800 | 367,555 | 1,095,015 | 155,053 | — | 4,733 | 2,064,156 | | 2020 | 286,240 | 1,153,160 | 791,867 | 2,189 | — | 5,420 | 2,238,876 |

  54. Pay versus Performance Table

    (3)The dollar amounts reported in column (c) represent the average of the amounts reported for the Company's NEOs as a group, excluding our PEO, who has served as our CEO since May 2019, for each corresponding year in the "Total" column of the Summary Compensation Table. The names of each of the NEOs (excluding our PEO) included for purposes of calculating the average amounts in each of the years presented are Christopher R. Christensen, Suzanne D. Snapper, Chad A. Keetch and Spencer W. Burton. (4)The dollar amounts reported in column (d) represent the average amount of CAP to the NEOs as a group (excluding Mr. Port) as computed in accordance with PvP Rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Port) during the applicable year. In accordance with PvP Rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Port) for each year to determine the CAP, using the same methodology described above in Note 2:

  55. Pay versus Performance Table

    | | Average SCT Total for Non-PEO NEOs ($) | Equity Deductions from Average SCT Total ($) | Equity Additions to Average SCT Total ($)(a) | Pension Additions to Average SCT Total ($) | CAP ($) | | Year | | | | | | | 2023 | 7,421,279 | (3,316,154) | 2,402,304 | N/A | 6,507,428 | | 2022 | 5,329,663 | (1,429,481) | 1,477,610 | N/A | 5,377,792 | | 2021 | 4,906,377 | (1,300,893) | 1,502,275 | N/A | 5,107,759 | | 2020 | 4,141,230 | (876,001) | 2,128,489 | N/A | 5,393,718 |

  56. Pay versus Performance Table

    a.The amounts deducted or added in calculating the total average equity award adjustments are as follows:

  57. Pay versus Performance Table

    | | Year End Fair Value of Current Year Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Year that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or Other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | Equity Additions to SCT Total ($) | | Year | | | | | | | | | 2023 | 1,215,080 | 433,919 | 853,187 | (102,828) | — | 2,946 | 2,402,304 | | 2022 | 444,000 | 314,460 | 759,322 | (43,919) | — | 3,747 | 1,477,610 | | 2021 | 287,170 | 385,522 | 657,473 | 167,599 | — | 4,511 | 1,502,275 | | 2020 | 357,800 | 1,183,431 | 573,878 | 8,070 | — | 5,310 | 2,128,489 |

  58. Pay versus Performance Table

    (5)Cumulative TSR reported in column (f) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company's share price at the end and the beginning of the measurement period by the Company's share price at the beginning of the measurement period. (6)Peer TSR reported in column (g) is the weighted peer group TSR, weighted according to the respective companies' stock market capitalization at the beginning of each period for which a return is indicated. The current composition of our peer group is as follows: Amedysis, Inc., CareTrust REIT Inc., Encompass Healthcare Corp., LTC Properties, Inc., National Healthcare Corporation, National Health Investors, Inc., Omega Healthcare Investors, Inc., Select Medical Holdings Corp. and Welltower Inc. (7)The dollar amounts reported in column (h) represent the amount of GAAP Net Income reflected in the Company's audited financial statements for the applicable year. (8)Adjusted annual earnings before provision for income taxes (EBT) reported in column (i) is defined at page 20 of this proxy statement, under "Compensation Discussion and Analysis". While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Adjusted EBT is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link CAP to the Company’s NEOs, for the most recently completed fiscal year, to company performance. We have included the Adjusted EBT financial measure (which is a non-Generally Accepted Accounting Principles (GAAP) financial metric) in our proxy statement as we believe that this measure, when presented in conjunction with the comparable GAAP measure, is useful to both management and its investors in analyzing our ongoing business and operating performance. Consequently, we use this non-GAAP financial measure as an indicator of business performance, as well as for operational planning and decision-making purposes. As disclosed on page 22, management recommended and the Compensation Committee approved additional adjustments to Adjusted EBT when arriving at the 2023 Bonus Pool. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

  59. Pay versus Performance Table

    Pay versus Performance Table As described in further detail in the Compensation Discussion and Analysis set forth in this proxy statement, the Company's executive compensation program is designed to be closely aligned with our performance and the performance of each individual executive officer on both a short-term and a long-term basis. The “at risk” compensation of our executive officers generally constitutes a large portion of their total compensation potential and is correlated to factors that directly and indirectly influence stockholder value. The three performance measures listed below represent an unranked list of the "most important" performance measures that the Company used to align CAP to the NEOs for 2023 and company performance. While these financial measures are the most important measures the company used to align CAP to the NEOs for 2023 and company performance, additional financial and other factors were also used to align pay and performance, as further described in the Compensation Discussion and Analysis section of this proxy statement. The most important performance measures are: •Adjusted EBT •Adjusted EBITDA •Adjusted EBITDAR A reconciliation for Adjusted EBT, Adjusted EBITDA and Adjusted EBITDAR are provided within our Annual Report on Form 10-K and press release in our Form 8-K, both filed with the SEC on February 1, 2024.

  60. Compensation Actually Paid and Net Income

    Compensation Actually Paid and Net Income The following graphs depict the relationship between Net Income and CAP to the Company's PEO and the NEOs, respectively.

  61. Compensation Actually Paid and Adjusted EBT

    Compensation Actually Paid and Adjusted EBT The following graphs depict the relationship between Adjusted EBT and CAP to the Company's PEO and the NEOs, respectively.

  62. Compensation Actually Paid and Adjusted EBITDA

    Compensation Actually Paid and Adjusted EBITDA The following graphs depict the relationship between Adjusted EBITDA and CAP to the Company's PEO and the NEOs, respectively.

  63. Compensation Actually Paid and Adjusted EBITDAR

    Compensation Actually Paid and Adjusted EBITDAR The following graphs depict the relationship between Adjusted EBITDAR and CAP to the Company's PEO and the NEOs, respectively.

  64. Compensation Actually Paid and TSR

    Compensation Actually Paid and TSR The following graphs depict the relationship between the value of an initial $100 investment in ENSG on December 31, 2019 based on TSR compared to the CAP and SCT pay for the Company's PEO and NEOs, respectively.

  65. Compensation Actually Paid and TSR

    | EQUITY COMPENSATION PLAN INFORMATION |

  66. Compensation Actually Paid and TSR

    The following table provides information about equity awards under all of our equity compensation plans as of December 31, 2023:

  67. Compensation Actually Paid and TSR

    | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | | Equity compensation for the 2007 Plan approved by security holders | 477,254 | $16.75 | —(1) | | Equity compensation for the 2017 Plan approved by security holders | 2,127,439 | $53.07 | —(2) | | Equity compensation for the 2022 Plan approved by security holders | 1,386,475 | $93.13 | 1,454,426(3) | | Total | 3,991,168 | $62.65 | 1,454,426 |

  68. Compensation Actually Paid and TSR

    (1)The 2007 Plan was retired during the second quarter of 2017. (2)The 2017 Plan was retired during the second quarter of 2022. (3)Represents the number of shares that remained available for issuance under the 2022 Plan as of December 31, 2023. As of March 21, 2024, 1,098,387 shares remained available for issuance under the 2022 Plan.