DEF 14A of agilon health, inc.
Filed Apr 18, 2024 · FY20230001140361-24-020533
BOARD NOMINEES
BOARD NOMINEES The following table sets forth the names and certain other information for the nominees for election as a Class III director as of March 31, 2024.
BOARD NOMINEES
| Nominees | Current Occupation | Age | Director Since | Independent | | Mr. Ravi Sachdev | Partner of Clayton, Dubiilier & Rice, board vice chairman of the Company, director of Covetrus, Inc., Steve Madden, Inc., Millennium Physician Group, apree health and Gentiva | 47 | 2017 | | | Mr. Steven J. Sell | Chief Executive Officer and director of the Company | 57 | 2020 | | | Dr. William Wulf | Director of apree health, former CEO and founding partner of Central Ohio Primary Care | 64 | 2017 | |
EXECUTIVE COMPENSATION PROGRAM DESIGN AND GOVERNANCE PRACTICES
| WHAT WE DO | | Reward our executives commensurate with their performance, experience and capabilities | | | | Reward achievement of short-term business objectives and results | | | | Align executive and stockholder interests | | | | Create “ownership culture” with equity awards | | | | Provide employment retention incentives | | | | Provide competitive employee benefits | | | | Reward achievement of goals related to our team and culture engagement plan, leadership development and our diversity, equity, inclusion and belonging priorities | | | | Emphasize long-term growth through maximizing focus on increasing shareholder value | | WHAT WE DON’T DO | | No hedging or monetization transactions with respect to the Company’s securities | | | | No pledging of the Company’s securities as collateral for a loan | | | | No compensation practices that encourage unnecessary and excessive risk taking | | | | Do not provide dividends or dividend equivalents on unearned PSUs unless and until the underlying PSU vests (and if such PSUs are forfeited, no dividend equivalents are paid out) | | | | Do not grant stock options or stock appreciation rights with an exercise price less than the fair market value on the grant date |
Class III — Nominees Whose Term Expires in 2024
Class III — Nominees Whose Term Expires in 2024
Class III — Nominees Whose Term Expires in 2024
| Ravi Sachdev Age: 47 Director since: 2017 | Ravi Sachdev has served as a director since 2017 and as Vice Chairman since January 2021. Mr. Sachdev also serves as a director of Covetrus, Inc., Steve Madden, Inc., Millenium Physician Group, apree health and Gentiva. Mr. Sachdev has served as a Partner of CD&R since June 2015, focusing on the healthcare sector. From November 2010 to May 2015, Mr. Sachdev was a Managing Director and Co-Head of Healthcare Services at J.P. Morgan Chase & Co. Mr. Sachdev received his B.A. from the University of Michigan. We believe Mr. Sachdev is a valuable member of our board because of his extensive experience with our business, the healthcare industry generally and capital markets. |
Class III — Nominees Whose Term Expires in 2024
| Steven J. Sell Age: 57 Director since: 2020 | Steven J. Sell has served as our Chief Executive Officer and President and director since June 2020. In addition to his current role as Chief Executive Officer and President and director of the Company, Mr. Sell serves as an advisor to several early-stage healthcare companies. Mr. Sell served as President, Chief Executive Officer and Chairman of Health Net, from March 2016 to June 2019 and President, Western Region of Health Net, from November 2008 to March 2016. Mr. Sell received his B.A. from Swarthmore College and holds an MBA from the Stanford Graduate School of Business. We believe Mr. Sell is a valuable member of our board because of his experience in the healthcare industry and as agilon health’s Chief Executive Officer and President. |
Class III — Nominees Whose Term Expires in 2024
| William Wulf, M.D. Age: 64 Director since: 2017 | William Wulf, M.D. has served as a director since 2017. In addition to his role as director of agilon health, Dr. Wulf was formerly the Chief Executive Officer of Central Ohio Primary Care (“COPC”). COPC is an agilon group partner. Dr Wulf was a founding partner of COPC in 1996 and assumed the role of Chief Executive Officer in 2013 after 25 years as a practicing Internist and COPC Corporate Medical Director. Dr Wulf has also served as an advisor for multiple payers including Anthem, Aetna Inc. and United Healthcare. Dr Wulf has served as board chair of America’s Physician Groups and is a director for apree health. Dr Wulf received his B.S. from The Ohio State University and his M.D. from the Medical College of Ohio. We believe Dr. Wulf is a valuable member of our board because of his experience as a medical professional, including as an executive at a medical group, and because of his experience as an advisor for multiple payors. |
Class III — Nominees Whose Term Expires in 2024
| | agilon health 2024 Proxy Statement | | 12 |
Class III — Nominees Whose Term Expires in 2024
Continuing Members of the Board of Directors
Class I — Directors Whose Term Expires in 2025
Class I — Directors Whose Term Expires in 2025
Class I — Directors Whose Term Expires in 2025
| Silvana Battaglia Age: 56 Director since: 2023 | Silvana Battaglia joined our board of directors in June 2023. Ms. Battaglia is Executive Vice President and Chief Human Resources Officer for Cencora, a leading global healthcare solutions company. Ms. Battaglia brings over 25 years of business leadership experience in global human resources organizations, shaping high-performance cultures, talent and succession management and driving organization transformation within the pharmaceutical and business services sectors. Prior to being named to her current role in January 2019, Ms. Battaglia served as Senior Vice President of Global Compensation, Benefits and Labor Relations and Senior Vice President of Global Human Resources at Aramark from 2011 to 2019. Ms. Battaglia served as the Chief Human Resources Officer of Day & Zimmerman from 2008 to 2011 and held increasingly responsible leadership positions with Merck & Co., Inc. from 1998 to 2008. Her early career included positions at Wyeth Pharmaceuticals and Colorcon, a division of Berwind Pharmaceuticals. Ms. Battaglia, a National Association of Corporate Directors certified professional director, graduated from Temple University with a B.A. in Marketing and her M.S. in Human Resources from Widener University. She has also served as an adjunct faculty member at St. Joseph’s University in Philadelphia. We believe Ms. Battaglia is a valuable member of our board because of her extensive experience with human resources in the healthcare industry, and with global healthcare and pharmaceutical companies. |
Class I — Directors Whose Term Expires in 2025
| Sharad Mansukani, M.D. Age: 54 Director since: 2017 | Sharad Mansukani, M.D. has served as a director since 2017. Dr. Mansukani also serves as a Senior Advisor to TPG, a trustee of the Children’s Hospital of Philadelphia, a member of the board of directors of Monogram Health, Inc., Chairman of the board of directors of Convey Health Solutions and a member of The Wharton School Healthcare Policy Board. Dr. Mansukani served as Chairman of the board of directors of Envision Rx Options from 2013 to 2016; a strategic advisor to the board of directors at Cigna Corp. from 2012 to 2015; Vice Chairman, Board of Directors of Health Spring, Inc. from 2007 to 2012; a director of IMS Health Holdings, Inc. from 2009 to 2016; a director of Surgical Care Affiliates, Inc. from 2007 to 2017; as lead director of IASIS Healthcare from 2005 to 2018; and a director of Kindred Healthcare, Inc. from 2015 to 2018. Dr. Mansukani also has served as a Senior Advisor on Medicare’s Program Advisory and Oversight Committee to the Secretary of the Department of Health and Human Services; Senior Advisor to the Administrator of the Centers for Medicare and Medicaid Services; and senior vice president and chief medical officer at Health Partners. Dr. Mansukani completed a residency and fellowship in ophthalmology at the University of Pennsylvania School of Medicine and a fellowship in quality management and managed care at the Wharton School of the University of Pennsylvania. He is a graduate of the Managed Care Executive Program at the Kellogg School of Business. We believe Dr. Mansukani is a valuable member of our board because of his experience as a medical professional, including in his positions working for government agencies, and his experience on or as an advisor to other healthcare companies’ boards. |
Class I — Directors Whose Term Expires in 2025
| | agilon health 2024 Proxy Statement | | 13 |
Class I — Directors Whose Term Expires in 2025
| Jeffrey A. Schwaneke Age: 48 Director since: 2022 | Jeffrey Schwaneke has served as a director since 2022. Mr. Schwaneke served as the Executive Vice President of Health Care Enterprises for Centene Corporation from June to September 2021. From March 2016 through May of 2021 Mr. Schwaneke was the Executive Vice President, Chief Financial Officer and Treasurer of Centene Corporation. Mr. Schwaneke joined Centene Corporation in July 2008 as Senior Vice President, Corporate Controller and Chief Accounting Officer. Prior to joining Centene, Mr. Schwaneke served as the Assistant Controller and then as Chief Accounting Officer of Novelis, Inc. from 2006 through 2008. Mr. Schwaneke received a degree in Accounting from the University of Missouri and is a CPA. We believe Mr. Schwaneke is a valuable member of our board because of his experience as an executive at a large healthcare company and his financial experience. |
Class I — Directors Whose Term Expires in 2025
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Class II — Directors Whose Term Expires in 2026
Class II — Directors Whose Term Expires in 2026
Class II — Directors Whose Term Expires in 2026
| Diana L. McKenzie Age: 59 Director since: 2023 | Diana L. McKenzie has served as a director since February 2023. Ms. McKenzie is a technology advisor, board member, and former Chief Information Officer with over thirty years of leadership experience gained from growing, scaling, and transforming global businesses in the Life Sciences and Software Industry with revenues ranging from $3 billion to $20 billion. Ms. McKenzie served as Workday Inc.’s first Chief Information Officer from 2016 to 2019. Before Workday, Ms. McKenzie served in multiple technology leadership roles at Amgen, Inc. from 2004-2016, including the role of Chief Information Officer. Prior to joining Amgen, she served in various technology leadership roles from 1987 to 2004 at Eli Lilly and Company. Ms. McKenzie serves on MetLife, Inc., Vertex Pharmaceuticals, and Paradox boards of directors and as a Special Advisor to Brighton Park Capital. She received her B.S. degree from Purdue University in 1986. We believe Ms. McKenzie is a valuable member of our board because of her leadership and technology experience and her experience on other healthcare companies’ boards. |
Class II — Directors Whose Term Expires in 2026
| Karen McLoughlin Age: 59 Director since: 2021 | Karen McLoughlin has served as a director since July 2021. In addition to her role as director of our Company, Ms. McLoughlin serves on the board of directors of Best Buy Co., Inc. as a member of the audit committee and chair of the finance and investment policy committee. Ms. McLoughlin also serves as a Senior Advisor to McKinsey & Co. Previously, Ms. McLoughlin was the Chief Financial Officer of Cognizant Technology Solutions from 2012 to 2020. Prior to joining Cognizant Technology Solutions in 2003, Ms. McLoughlin served in financial roles for Spherion from 1997 to 2003, Ryder Systems, Inc. from 1994 to 1997, and Price Waterhouse (which is now known as PricewaterhouseCoopers) from 1988 to 1994. Ms. McLoughlin received her B.A. from Wellesley College and her MBA from Columbia University. We believe Ms. McLoughlin is a valuable member of our board because of her experience as an executive at a large public company and her experience as a public company director, as well as her financial and accounting expertise. |
Class II — Directors Whose Term Expires in 2026
| Ronald A. Williams Age: 74 Director since: 2017 | Ron Williams is a co-founder of our Company and has served as a director and chairman of the board since 2017. Mr. Williams also is chairman and Chief Executive Officer of RW2 Enterprises and serves as an operating advisor to CD&R. Mr. Williams serves on the board of directors of The Boeing Company and Warby Parker and served on the Board of The American Express Company from January 2007 to April 2022, Johnson & Johnson from June 2011 to April 2022 and Envision Healthcare from May 2011 to October 2017. Mr. Williams served as the Chief Executive Officer and Chairman of Aetna Inc. from February 2006 and October 2006 to December 2010 and April 2011, respectively. Mr. Williams also serves as Chairman of The Conference Board and the Peterson Institute for International Economics and served as a director of NAF. Mr. Williams received his B.A. from Roosevelt University and holds an M.S. in Management from MIT Sloan School of Management. We believe Mr. Williams is a valuable member of our board because of his experience as an executive at a large healthcare company and because of his experience on other healthcare companies’ boards. |
Class II — Directors Whose Term Expires in 2026
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Class II — Directors Whose Term Expires in 2026
Director Independence Our board of directors has determined, after considering all of the relevant facts and circumstances, that Ms. Battaglia, Dr. Mansukani, Ms. McKenzie, Ms. McLoughlin, Mr. Schwaneke and Dr. Wulf are “independent” as defined under NYSE and the Exchange Act rules and regulations. This means that none of the independent directors has any direct or indirect material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us. Board Leadership Structure Our board of directors is led by our non-executive chairman, Mr. Williams, a CD&R Designee. The CD&R Stockholders Agreement provides that a CD&R Designee will serve as our chairman of the board of directors as long as the CD&R Investor beneficially owns at least 25% of the outstanding shares of our common stock. In May 2023, the CD&R Investor disposed of certain shares of our common stock in an underwritten offering and its holdings are now less than 25%. Mr. Williams remains our board chairman. As stated in our Corporate Governance Guidelines, the board of directors has no policy with respect to the separation of the offices of chairman of the board and Chief Executive Officer. The board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the chairman and Chief Executive Officer in any way that is in the best interests of the Company at a given point in time. The board believes this governance structure currently is appropriate for the Company because it promotes a balance between the board’s independent authority to oversee our business and the Chief Executive Officer and his management team who manage the business on a day-to-day basis. If the board chooses to combine the offices of chairman and Chief Executive Officer in the future, a lead director will be appointed annually by the independent directors. The board expects to periodically review its leadership structure to ensure that it continues to meet our needs. Meetings of the Board of Directors and Attendance at the Annual Meeting Our board of directors held seven meetings during the year ended December 31, 2023. Each of our directors attended at least 75% of the total number of meetings of the board and any committees of which he or she was a member. Two directors who served at the time of our 2023 annual meeting of stockholders attended that meeting. Corporate Governance Guidelines Our board of directors has adopted Corporate Governance Guidelines to address significant corporate governance matters. A copy of these guidelines is available without charge at https://investors.agilonhealth.com/governance/governance-documents/default.aspx. These guidelines provide a framework for our corporate governance initiatives and cover topics including, but not limited to, director qualification and responsibilities, board composition, director compensation, and management and succession planning. The Board and Nominating and Governance Committee are responsible for overseeing and reviewing the guidelines and reporting and recommending to our board of directors any changes to the guidelines. Code of Conduct and Code of Financial Ethics We have a Code of Conduct that applies to all of our officers, employees, and directors and a Code of Financial Ethics that applies to our Chief Executive Officer, Chief Financial Officer and corporate officers with financial and accounting responsibilities, including the Chief Accounting Officer and any other person performing similar tasks or functions. The Code of Conduct and the Code of Financial Ethics each address matters such as conflicts of interest, confidentiality, business practices, and compliance with laws and regulations. The Code of Conduct and the Code of Financial Ethics are available without charge at https://investors.agilonhealth.com/governance/governance-documents/default.aspx.
Class II — Directors Whose Term Expires in 2026
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Class II — Directors Whose Term Expires in 2026
Board Committees Our board of directors maintains an Audit Committee, a Compensation and Human Capital Committee, a Nominating and Governance Committee, and a Compliance and Quality Committee. Below is a brief description of our committees. The following table shows the current members of each committee and the number of meetings held during 2023.
Class II — Directors Whose Term Expires in 2026
| Director | Audit | Compensation and Human Capital | Nominating & Governance | Compliance and Quality | | Ron Williams* | | | | | | Silvana Battaglia | | M | | | | Diana McKenzie | M | M | | | | Sharad Mansukani, M.D. | | | C | M | | Karen McLoughlin | C | M | M | | | Ravi Sachdev | | | | M | | Steven J. Sell | | | | M | | Jeffrey A. Schwaneke | M | C | M | | | William Wulf, M.D. | | | | C | | Number of Meetings | 10 | 5 | 6 | 4 |
Class II — Directors Whose Term Expires in 2026
* Board Chairman M = Committee Member C = Committee Chair Audit Committee Our Audit Committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications and independence of our independent registered public accounting firm, the effectiveness of our internal control over financial reporting and the performance of our internal audit function and independent registered public accounting firm. Our Audit Committee is responsible for reviewing and assessing the qualitative aspects of our financial reporting, our processes to manage business and financial risks, and our compliance with significant applicable legal, ethical and regulatory requirements. Our Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The charter of our Audit Committee is available without charge at https://investors. agilonhealth.com/governance/governance-documents/default.aspx. The members of our Audit Committee are: Karen McLoughlin (Chair) Jeffrey Schwaneke Our board of directors has designated Karen McLoughlin and Jeffrey Schwaneke as “audit committee financial experts,” and each of the three members has been determined to be “financially literate” under the NYSE rules.
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Class II — Directors Whose Term Expires in 2026
Report of the Audit Committee The principal purpose of the Audit Committee is to assist the board of directors in its oversight of our accounting practices, system of internal controls, audit processes and financial reporting processes. The Audit Committee is responsible for appointing and retaining our independent auditor and approving the audit and non-audit services to be provided by the independent auditor, as well as overseeing the performance of the Company’s internal audit function. The Audit Committee’s function is more fully described in its charter. Our management is responsible for preparing our financial statements and ensuring they are complete and accurate and prepared in accordance with generally accepted accounting principles. Ernst & Young LLP, our independent registered public accounting firm for the year ended December 31, 2023, was responsible for performing an independent audit of our consolidated financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles. The Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 2023 with management and with Ernst & Young LLP. These audited financial statements are included in our Annual Report on Form 10-K for the year ended December 31, 2023. The Audit Committee has also discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standard No. 16 adopted by the Public Company Accounting Oversight Board (United States) (“PCAOB”) regarding “Communications with Audit Committees” and the applicable requirements of the SEC. The Audit Committee also has received and reviewed the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence and has discussed with Ernst & Young LLP its independence from us. Based on the review and discussions described above, the Audit Committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. The Audit Committee Karen McLoughlin (Chair) Diana McKenzie Jeffrey Schwaneke This Report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act. Compensation and Human Capital Committee Our Compensation and Human Capital Committee is responsible, among its other duties and responsibilities, for reviewing and approving all forms of compensation to be provided to, and employment agreements with, the executive officers and directors of the Company including our Chief Executive Officer. Our Compensation and Human Capital Committee also periodically reviews management development and succession plans oversees regulatory compliance with respect to compensation matters, and reviews human capital topics, such as culture and employee engagement, diversity and inclusion, turn over and performance management. The charter of our Compensation and Human Capital Committee is available without charge at https:// investors.agilonhealth.com/governance/governance-documents/default.aspx. The members of our Compensation and Human Capital Committee are: Jeffrey Schwaneke (Chair) Silvana Battaglia Diana McKenzie Karen McLoughlin. The Compensation and Human Capital Committee has the authority to retain compensation consultants, outside counsel and other advisers. During 2023, the committee engaged Semler Brossy Consulting Group (“Semler Brossy”) to advise it on executive compensation program-
Class II — Directors Whose Term Expires in 2026
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Class II — Directors Whose Term Expires in 2026
design matters and to prepare market studies of the competitiveness of components of the Company’s compensation program for its senior executive officers, including the named executive officers and non-employee directors. Semler Brossy does not provide any services to agilon health other than as directed by the Compensation and Human Capital Committee. The Compensation and Human Capital Committee performed an assessment of Semler Brossy’s independence to determine whether the consultant is independent, taking into account Semler Brossy’s executive compensation consulting protocols to ensure consultant independence and other factors that the Compensation and Human Capital Committee determined to be relevant, including the independence factors set forth in Exchange Act Rule 10C-1. Based on that assessment, the Compensation and Human Capital Committee determined that the firm’s work has not raised any conflict of interest and the firm is independent. Nominating and Governance Committee Our Nominating and Governance Committee is responsible, among its other duties and responsibilities, for identifying and recommending to the board of directors candidates for election to our board of directors, reviewing the composition of the board of directors and its committees, developing and recommending to the board of directors corporate governance guidelines that are applicable to us, and overseeing board of directors’ evaluations and the Company’s policies and practices related to ESG concerns. The charter of our Nominating and Governance Committee is available without charge at https://investors.agilonhealth.com/governance/governance-documents/default.aspx. The members of our Nominating and Governance Committee are: Sharad Mansukani, M.D. (Chair) Karen McLoughlin Jeffrey Schwaneke Compliance and Quality Committee The Compliance and Quality Committee is responsible, among its other duties and responsibilities, for assisting the board of directors in fulfilling its fiduciary responsibilities relating to compliance with the laws, rules and regulations applicable to our business, including cybersecurity risks, and recommending adoption and implementation of, and changes to, our compliance programs, subject in all cases to the oversight and approval authority of the board of directors. The Compliance and Quality Committee also oversees the information, procedures and reporting systems the Company has in place, including pursuant to the Company’s Code of Conduct. The charter of our Compliance and Quality Committee is available without charge at https://investors.agilonhealth.com/governance/governance-documents/default.aspx. The members of our Compliance and Quality Committee are: William Wulf, M.D. (Chair) Sharad Mansukani, M.D. Ravi Sachdev Steven J. Sell Compensation Committee Interlocks and Insider Participation No member of our Compensation and Human Capital Committee was a former or current officer or employee of the Company or any of its subsidiaries in 2023. In addition, during 2023 none of our executive officers served as a director or as a member of the compensation committee of a company that had an executive officer serve as a director or as a member of our Compensation and Human Capital Committee. Selection of Nominees for Election to the Board Our Corporate Governance Guidelines provide that, subject to the requirements of the CD&R Stockholder Agreement, which provides the CD&R Investor the right to designate CD&R Designees subject to the maintenance of specified ownership requirements, the Nominating and Governance Committee will identify and recommend that the board select board candidates who the Nominating and Governance Committee believes are qualified and suitable to become members of the board consistent with the criteria for selection of new directors adopted from time to time by the board. The Nominating and Governance Committee will consider the following criteria for director qualification: the nominee’s independence, judgment, strength of character, ethics and integrity; the nominee’s business or other relevant experience and skills and knowledge useful to the oversight of the Company’s business; the Company’s commitment to diversity; and whether a nominee has sufficient time to carry out the responsibilities of a director. The Nominating and Governance Committee will consider all additional criteria for independence established by the NYSE or other governing laws and regulations.
Class II — Directors Whose Term Expires in 2026
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Class II — Directors Whose Term Expires in 2026
In identifying candidates for election to the board of directors, the Nominating and Governance Committee may consider nominees recommended by directors, stockholders, and other sources. The Nominating and Governance Committee reviews each candidate’s qualifications, including whether a candidate possesses any of the specific qualities and skills desirable in certain members of the board of directors. Evaluations of candidates generally involve a review of background materials, internal discussions, and interviews with selected candidates as appropriate. The Nominating and Governance Committee does not have a formal policy with respect to diversity; however, the board and the Nominating and Governance Committee believe that it is essential that board members represent diverse viewpoints and the value of diversity on the board will be considered when evaluating nominees. Diversity of background, including diversity of gender, race, ethnic or geographic origin and age are factors that will be considered. Upon selection of a qualified candidate, the Nominating and Governance Committee would recommend the candidate for consideration by the full board of directors. The Nominating and Governance Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees. The Nominating and Governance Committee will consider director candidates proposed by stockholders on the same basis as recommendations from other sources. Any stockholder who wishes to recommend a prospective candidate for the board of directors for consideration by the Nominating and Governance Committee may do so by submitting the name and qualifications of the prospective candidate in writing to the following address: agilon health, inc. c/o Corporate Secretary 6210 E. Highway 290 Suite 450 Austin, Texas 78723. Any such submission should also describe the experience, qualifications, attributes and skills that make the prospective candidate a suitable nominee for the board of directors. Our amended and restated by-laws set forth the requirements for direct nomination by a stockholder of persons for election to the board of directors. In connection with our initial public offering (“IPO”), we and the CD&R Investor entered into the CD&R Stockholder Agreement pursuant to which, among other matters, the CD&R Investor has the right to designate the CD&R Designees, subject to the maintenance of specified ownership requirements. See “Certain Relationships and Related Party Transactions—CD&R Stockholder Agreement.” Communications with the Board Any stockholder or interested party who wishes to communicate with our board of directors as a whole, the independent directors, any individual member of the board or any committee of the board, may e-mail or write to the Company at: agilon health, inc., c/o Corporate Secretary, 6210 E. Highway 290, Suite 450, Austin, Texas 78723 and communications@agilonhealth.com. The board of directors has designated the Company’s Corporate Secretary as its agent to receive and review written communications addressed to the board of directors, any of its committees, or any board member or group of members. The Corporate Secretary may communicate with the sender for any clarification. In addition, the Corporate Secretary will promptly forward to the Chair of the Audit Committee any communication alleging legal, ethical or compliance issues by management or any other matter deemed by the Corporate Secretary to be potentially material to the Company. As an initial matter, the Corporate Secretary will determine whether the communication is a proper communication for the board of directors. The Corporate Secretary will not forward to the board of directors, any committee or any director, communications of a personal nature or not related to the duties and responsibilities of the board, including, without limitation, junk mail and mass mailings, business solicitations, routine customer service complaints, new product or service suggestions, opinion survey polls, or any other communications deemed by the Corporate Secretary to be immaterial to the Company. Risk Oversight Our board of directors as a whole has responsibility for overseeing our risk management. The board of directors exercises this oversight responsibility directly and through its committees. The oversight responsibility of the board of directors and its committees is informed by reports from our management team and from our internal audit department that are designed to provide visibility to the board of directors about the identification and assessment of key short-, intermediate-, and long-term risks and our risk mitigation strategies. The full board of directors has primary responsibility for evaluating strategic and operational risk management, and succession planning. Our Audit Committee has the responsibility for overseeing our major financial and accounting risk exposures and the steps our management has taken to monitor and control these exposures, including policies and procedures for assessing and managing risk. Our Compensation and Human Capital Committee evaluates risks arising from our compensation policies and practices, as more fully described below. Our Compliance and Quality
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Class II — Directors Whose Term Expires in 2026
Committee oversees risks arising from our compliance with regulatory and legal requirements including those relating to Medicare, patient confidentiality and privacy, and other healthcare regulatory matters, and it also oversees enterprise risks such as cybersecurity risk. The chief compliance officer, who reports to the chief legal officer, evaluates and reports findings to the committees and the full board of directors regularly, and no less than quarterly. Our Nominating and Governance Committee reviews risks relating to environmental, social and governance issues. The Audit Committee, Compensation and Human Capital Committee, Compliance and Quality Committee and Nominating and Governance Committee provide reports to the full board of directors regarding these and other matters. Compensation Risk Assessment The Compensation and Human Capital Committee assessed our compensation policies and practices to evaluate whether they create risks that are reasonably likely to have a material adverse effect on the Company. Based on its assessment, the Compensation and Human Capital Committee concluded that the Company’s compensation policies and practices do not create incentives to take risks that are reasonably likely to have a material adverse effect on the Company. We believe we have allocated our compensation among base salary, short-term incentives and long-term equity in such a way as to not encourage excessive risk taking.
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Class II — Directors Whose Term Expires in 2026
Environmental, Social, and Governance (“ESG”).
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| Timothy S. Bensley Age: 64 Chief Financial Officer | Timothy S. Bensley has served as our Chief Financial Officer since January 2021. Previously, Mr. Bensley served as the Chief Financial Officer of Blue Apron Holdings , Inc., from May 2018 to December 2020, Chief Financial Officer at Acosta Sales and Marketing from June 2015 to October 2017, and a variety of finance leadership roles at PepsiCo from July 1986 to April 2015. At PepsiCo, Mr. Bensley’s leadership roles included heading Financial Planning and Analysis, Supply Chain Finance and Sales Finance at Frito Lay North America; Senior Vice President of PepsiCo’s Global Transformation Group and serving as the Chief Financial Officer of Pepsi-Cola North America and ultimately Chief Financial Officer of PepsiCo Americas Foods. Mr. Bensley received his B.S. in Engineering from the United States Military Academy at West Point and a master’s degree in Project Management from Boston University. |
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| Veeral Desai Age: 43 Chief Strategy and Development Officer | Veeral Desai has served as our Chief Strategy and Development Officer since September 2020. Mr. Desai joined the Company in April 2017 as President of Enterprise Operations. Mr. Desai served in several senior executive roles at Vantage Oncology (most recently as President of Operations, Chief Operating Officer for Vantage Cancer Care Network) from December 2010 to April 2017. Mr. Desai served as a consultant at Bain & Company from September 2002 to July 2005 and September 2007 to December 2010. Mr. Desai received his B.S. from the University of California, Berkeley and an MBA from Harvard Business School. |
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
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Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| EXECUTIVE OFFICERS |
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| Ben Shaker Age: 41 Chief Markets Officer | Ben Shaker has served as our Chief Markets Officer since September 2020. Mr. Shaker joined the Company as Ohio Market President in January 2017. Mr. Shaker served as Vice President and Chief Operating Officer for Mount Carmel Health Partners, which is part of Trinity Health, from December 2013 to January 2017. Mr. Shaker received his B.A. from Youngstown State University and a master’s degree in Health Administration from The Ohio State University. |
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| Girish Venkatachaliah Age: 51 Chief Technology Officer | Girish Venkatachaliah has served as our Chief Technology Officer since January 2021. Prior to agilon, Mr. Venkatachaliah served as a Partner, Data and Artificial Intelligence on the Growth Buyout team at Frazier Healthcare Partners from July 2020 to January 2021. Previously, Mr. Venkatachaliah served as the Chief Technology & Product Officer of Decision Resources Group from September 2019 to April 2020. Mr. Venkatachaliah also served as the Vice President of Data Strategy, Analytics, and Artificial Intelligence/Machine Learning at athenahealth from July 2017 to September 2019, where he led the strategy, research, product management and engineering teams. Prior to athenahealth, Mr. Venkatachaliah held several executive roles at IBM and was the Vice President of Product Development, responsible for a portfolio of cloud offerings in Data and Artificial Intelligence, including the Watson Machine Learning Platform, at the time of his departure. Mr. Venkatachaliah received his bachelor’s degree in Electrical Engineering from Bangalore University, master’s degree in Computer Science from University of Nevada, Las Vegas, master’s degree in Engineering Management from Santa Clara University, and an MBA from UC Berkeley/Columbia University. |
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
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Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
Executive Compensation. Compensation Discussion and Analysis This compensation discussion and analysis provides information about the material elements of compensation that are paid or awarded to, or earned by, our “named executive officers”, also referred to as the “NEOs”, for the 2023 Fiscal Year as follows:
Steven J. Sell’s biography may be found above under “Nominees for Election to the Board of Directors in 2024.”
| | Steven J. Sell Chief Executive Officer and President | | Benjamin Shaker Chief Markets Officer | | | Timothy Bensley Chief Financial Officer | | Girish Venkatachaliah Chief Technology Officer | | | Veeral Desai Chief Strategy and Development Officer | | |
Compensation Philosophy and Objectives
| • | Advised on the design of the Company’s annual and long-term incentive plans, including the selection of the performance metrics; |
Compensation Philosophy and Objectives
| • | Reviewed the selection of the peer group of companies used for assessing market compensation levels and practices; |
Compensation Philosophy and Objectives
| • | Review and assess independent director pay; |
Compensation Philosophy and Objectives
In performing these services, Semler Brossy interacted with executive management and attended Compensation and Human Capital Committee meetings. Executive Management When making decisions on executive compensation, the Compensation and Human Capital Committee considers input from our Chief Executive Officer and Chief People Officer. Our Chief People Officer provides information and analysis for review in advising the Compensation and Human Capital Committee regarding decisions on compensation levels and incentive design. Our Chief Executive Officer reviews the performance of the NEOs (other than himself) and other executive officers. Our Chief Executive Officer and Chief People Officer provide specific recommendations for compensation levels (other than themselves) for the Compensation and Human Capital Committee’s consideration. The Compensation and Human Capital Committee reviews and discusses pay decisions related to the Chief Executive Officer in executive session without the Chief Executive Officer or any other members of management present. Role of Compensation Peer Group In August 2022, the Compensation and Human Capital Committee reviewed our public company peer group for the 2023 fiscal year, taking into account input from Semler Brossy. The peer group includes other U.S.-based companies that trade on the major U.S. exchanges in related industries. In reviewing our peer group, the Compensation and Human Capital Committee considered a number of factors, including:
Compensation Philosophy and Objectives
Based on this review the companies comprising our peer group for our 2023 compensation review were as follows: 2023 Public Company Peer Group
Compensation Philosophy and Objectives
| Pay Component | Objective of Pay Component | Key Measure | | Base Salary | • Provide competitive pay and reflect individual contributions | • Current compensation relative to competitive rates for similar roles | | Annual Cash Incentives | • Reward achievement of short-term business objectives and results | • Adjusted EBITDA goal • Operational goals • Individual performance | | Equity Awards | • Align executive and stockholder interests • Create “ownership culture” • Provide retention incentives | • Stock price appreciation • Adjusted EBITDA and revenue achievement • Continuation of employment |
Compensation Philosophy and Objectives
Annual Incentive Compensation Our annual cash incentive program is designed to focus our NEOs on delivering against key financial and operational metrics for the Company. Each NEOs’ annual cash incentive opportunity is at-risk and earned only to the extent we achieve pre-established financial and operational metric targets that were approved by the Compensation and Human Capital Committee and the NEO meets specific individual performance criteria as evaluated and determined subjectively by the Compensation and Human Capital Committee based on its assessment of the NEO’s performance during the year. By conditioning a significant portion of our NEOs’ potential total cash compensation on the Company’s achievement of annual financial performance, we reinforce our focus on achieving profitable growth. We also balance the profitability metric with key operational metrics related to membership, experience, quality, and human capital. For the 2023 Fiscal Year, each NEO had a target incentive opportunity equal to 75% of his base salary for the year. The maximum annual incentive payout for each NEO is 150% of the NEO’s target opportunity. For the 2023 Fiscal Year, our performance metrics included Adjusted EBITDA (weighted at 29%), year-end membership on the agilon platform in existing markets (weighted at 14.5%), new market membership growth (weighted at 14.5%), experience by measure of net promoter scores and PCP touchpoints (weighted at 18% in the aggregate), quality by measure of chronic condition reassessment rates and quality by measure of acknowledgement rates (weighted at 13%), and team & culture (weighted at 11%). Threshold, target and stretch (i.e., maximum) goals were set for each metric, and the payout percentage for each metric was determined by interpolation for performance results between such levels. The Compensation and Human Capital Committee selected these metrics for our annual incentive compensation program as it believes they are key drivers of our short-term financial and operational success that will benefit shareholders if achieved at or above target.
Compensation Philosophy and Objectives
We initially approved the following goals for the 2023 annual incentive plan in February 2023. Pre-Adjustment Annual Incentive Goals
Compensation Philosophy and Objectives
| Measure | Detail | Weighting | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | | Financial Goal | | | | | | | Adjusted EBITDA* | Target represents externally reported number | 29% | $75,000,000 | $85,000,000 | $95,000,000 | | Non-Financial Goals | | | | | | | Growth** | Year-end existing market membership | 14.5% | 398,000 Individuals Enrolled | 408,000 Individuals Enrolled | 418,000 Individuals Enrolled | | Growth** | New market membership | 14.5% | 80,000 Individuals | 100,000 Individuals | 120,000 Individuals | | Experience*** | Net promoter scores and PCP touchpoints | 18% | 22/37 Targets Passing | 26/37 Targets Passing | 32/37 Targets Passing | | Quality**** | Chronic condition reassessment & acknowledgement rates | 13% | 88% Chronic Reassessment Rate | 90.5% Chronic Reassessment Rate | 93% Chronic Reassessment Rate | | Culture***** | Team and Culture metrics | 11% | Discretionary | Discretionary | Discretionary |
Compensation Philosophy and Objectives
| Measure | Detail | Weighting | Threshold (50% Payout) | Target (100% Payout) | Maximum (150% Payout) | Actual Achievement | | Financial Goal | | | | | | | | Adjusted EBITDA* | Target represents externally reported number | 29% | $76,000,000 | $86,000,000 | $96,000,000 | $10,000,000 | | Non-Financial Goals | | | | | | | | Growth** | Year-end existing market membership | 14.5% | 361,000 Individuals Enrolled | 371,000 Individuals Enrolled | 381,000 Individuals Enrolled | 388,000 Individuals Enrolled | | Growth** | New market membership | 14.5% | 80,000 Individuals | 100,000 Individuals | 120,000 Individuals | 128,000 Individuals | | Experience*** | Net promoter scores and PCP touchpoints | 18% | 21/36 Targets Passing | 25/36 Targets Passing | 31/36 Targets Passing | 29/36 Targets Passing | | Quality**** | Chronic condition reassessment & acknowledgement rates | 13% | 88% Chronic Reassessment Rate | 90.5% Chronic Reassessment Rate | 93% Chronic Reassessment Rate | 92.2% Chronic Reassessment Rate | | Culture***** | Team and Culture metrics | 11% | Discretionary | Discretionary | Discretionary | N/A |
Compensation Philosophy and Objectives
| ***** For 2023, the Company introduced a team and culture goal which was comprised of a discretionary bonus component across four categories. The four categories are total company engagement score, DEIB/Diverse slates for Manager and above roles in the US, completion rate of engagement survey action plans, and voluntary attrition/retention. Because this is a discretionary category, the CEO and the Chief People Office, make a recommendation to the Compensation and Human Capital committee for approval relative to this category. The Compensation and Human Capital Committee did not assign a score to this category in light of its decision as noted below to reduce the annual incentive compensation pool payout funding to 50% and not award any bonus to the Chief Executive Officer, and other NEOs, as well as certain other executives who report to the Chief Executive Officer for 2023. |
Compensation Philosophy and Objectives
Improving clinical outcomes for senior patients in a total care model requires comprehensive assessment of chronic medical conditions. Given the impact that chronic conditions have on the quality of care members on our platform receive and our ability to best optimize care for specific clinical conditions through evidence- based clinical programs, it is imperative that care teams assess the status of each patient’s full medical history to identify active conditions that would benefit from improved clinical management. Value-based care and improved clinical outcomes for our members depend on physician engagement and team-based care. One critical measure of physician engagement and team-based effectiveness is how frequently a physician acknowledges peer-to-peer clinical information that is designed to improve care quality including diagnostic accuracy, comprehensiveness, optimization of medical management, and targeted high value clinical programs. Although the Company performed at, or above, target on the non-financial metrics of Growth, Experience, and Quality, the Company missed the 2023 Adjusted EBITDA threshold and overall Company performance fell short of expectations. As a result, the Compensation and Human Capital Committee determined to reduce the overall company score, and annual incentive compensation pool payout funding, to 50% of the target. The committee also determined that the Chief Executive Officer, and other NEOs, as well as certain other executives who report to the Chief Executive Officer, would receive a 0% payout for the annual incentive program (as reflected in the “Summary Compensation Table” following this Compensation Discussion and Analysis in the “Non-Equity Incentive Plan Compensation” column). Changes to Our Annual Incentive Compensation Program for 2024 In March 2024, as further evidence of our comprehensive commitment to members and the communities we serve, our Compensation and Human Capital Committee determined to modify our Annual Incentive Compensation Program for 2024 to further emphasize our financial commitment to our shareholders. The 2024 annual incentive compensation program will be weighted as follows: Adjusted EBITDA goal will increase from 29% to 55%; platform membership growth goals will be reduced from 14.5% to 5% for existing MA membership and new growth will be reduced from 14.5% to 10%; experience score goals will be reduced from 18% to10%; chronic care reassessment and acknowledgement rate goals will be reduced from 13% to 10%;and team and culture goals will be reduced from 11% to 10%. Additionally, the 2024 program will include a +/- 15% payout modifier for Medical Margin, which we define as medical services revenue after medical services expenses are deducted. Note that medical services expenses represent costs incurred for medical services provided to patients being managed by our physician partners. We believe these annual incentive compensation metrics further emphasize profitability in addition to the operational goals in a way that we believe that will benefit the company, our shareholders and other key stakeholders. Long-Term Equity Incentives
EQUITY GRANT POLICY
EQUITY GRANT POLICY The Compensation and Human Capital Committee has adopted an equity grant policy pursuant to which the Committee reviews and approves individual grants for the NEOs, as well as the total number of shares covered by, and the vesting and other terms of, each grant. The annual equity grants typically are reviewed and approved at the Committee’s regular meeting date in April. The grant date for the annual equity grants is the date of the Committee meeting at which they are approved. Administration of the equity awards is managed by the Committee’s human resources group with specific instructions related to the timing of grants given by the Committee.
EQUITY GRANT POLICY
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2023 FISCAL YEAR AWARDS
2023 FISCAL YEAR AWARDS During the 2023 Fiscal Year, we granted stock options, time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) under our 2021 Omnibus Equity Incentive Plan (the “Equity Incentive Plan”) to each of our NEOs. These awards are described in further detail below and in the “Grants of Plan-Based Awards at Fiscal Year 2023” table. Our annual equity grants for the 2023 Fiscal Year consisted of 25% stock options, 25% RSUs, and 50% PSUs (as each award is valued based the fair value of the award on the date of grant as determined for purposes of our financial reporting). We increased the weighting of PSUs from 25% to 50% of the total grant to further emphasize achievement of long-term performance goals the Compensation and Human Capital Committee considers important to the success of our Company. We believe that these equity awards are a critical and appropriate element of the total compensation package for our NEOs and align the interests of our NEOs with those of our stockholders and create strong retention incentives for our valued executives.
2023 FISCAL YEAR AWARDS
| Vehicle | Purpose | Weighting | Vesting | | RSU | Provides NEO retention | 25% | Ratably over four years | | PSU | Aligns compensation with company goals to incentivize performance | 50% | Cliff vest after a three- year performance period | | Stock Options | Aligns compensation with shareholder value growth | 25% | Ratably over four years |
Stock Options
Stock Options Each of our NEOs was granted stock options in April 2023. Since our NEOs receive value from stock options only if our stock price appreciates relative to our stock price at the time of grant, stock options create incentives for our executives to achieve share price appreciation that will benefit shareholders. These stock options vest in four equal annual installments, subject to the NEO’s continuous employment through the applicable vesting date. The exercise price of each outstanding stock option is set forth in the “Exercise Price of Option Awards” column of the “Grants of Plan-Based Awards for Fiscal Year 2023” table. All stock options expire no later than ten years after the date of grant. Outstanding options will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors elects to accelerate and cancel such awards in exchange for a payment equal to the price per share offered in the “change in control” minus the stock option’s exercise price. See “Potential Payments Upon Termination or Change-in-Control—Accelerated Vesting of Equity on a Change in Control” for more information regarding the treatment of outstanding stock options in connection with a change in control.
RSUs
RSUs Each of our NEOs was granted RSUs in April 2023. RSU awards create incentives for our NEOs to achieve long-term share price appreciation that will benefit shareholders as well as serve to retain our executives over the vesting period. These awards vest in four equal annual installments, subject to the NEO’s continuous employment through the applicable vesting date. Outstanding RSUs will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors elects to accelerate and cancel such awards in exchange for a payment equal to the price per share offered in the “change in control”. See “Potential Payments Upon Termination or Change-in-Control—Accelerated Vesting of Equity on a Change in Control” for more information regarding the treatment of outstanding RSUs in connection with a change in control.
PSUs
PSUs In April 2023 each of our NEOs was granted PSUs. These PSUs vest based on performance against predetermined revenue and Adjusted EBITDA goals through the end of the three-year performance period commencing January 1, 2023, subject to the NEO’s continued employment through the end of that period and accordingly create incentives for our NEOs to achieve medium term growth and profitability as well as providing an additional retention incentive. The revenue and Adjusted EBITDA goals are each weighted 50%. For the revenue metric, the PSU payout may range from 50% at threshold performance level to 200% for maximum performance level. For the Adjusted EBITDA metric, the PSU payout may range from 50% at threshold performance level and 200% for maximum performance level. Outstanding PSUs will generally not accelerate in connection with a “change in control” (as defined in the Equity Incentive Plan), unless our board of directors elects
PSUs
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PSUs
to accelerate at target levels and cancel such awards in exchange for a payment equal to the price per share offered in the “change in control”. See “Potential Payments Upon Termination or Change-in-Control— Accelerated Vesting of Equity on a Change in Control” for more information regarding the treatment of outstanding PSUs in connection with a change in control.
PSUs Granted in 2021
PSUs Granted in 2021 In April 2021, the Compensation and Human Capital Committee approved a three-year PSU grant that would vest based on revenue and 2021 Adjusted EBITDA performance for the 2021-2023 performance period. The threshold, target, and maximum performance goals for each metric are set forth in the “2021 Plan Design” table below. The Compensation and Human Capital Committee determined that the Company ended the three-year performance period with revenue of $9,118 million and 2021 Adjusted EBITDA loss of $71 million, thus resulting in achievement of tracking 130% of target performance and negative 87% of target performance, respectively (or a vesting payout percentage of 200% for revenue and 0% for 2021 Adjusted EBITDA). As a result, the 2021 PSU grant paid out at 100% of the target number of PSUs subject to the award. 2021 Plan Design
PSUs Granted in 2021
| Performance Metric | Weighting | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Achievement | Payout (% of target) | | Revenue ($M) | 50% | $5,784 | $7,230 | $9,037 | $9,118 | 200% | | Adjusted EBITDA ($M) | 50% | $73 | $91 | $114 | ($71) | — | | Overall | 100% | | | | | |
PSUs Granted in 2021
Severance Benefits We have entered into an employment agreement with each of our NEOs that provide severance benefits if their employment is terminated under certain circumstances. We believe these arrangements are appropriate to help provide stability for our management team and are consistent with market practices. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Arrangements” above for a description of the severance benefits available to our NEOs. Stock Ownership Guidelines Our board of directors has established stock ownership guidelines in order to further align the long-term interests of our executive officers and non-employee directors with those of our stockholders. Our stock ownership guidelines require that our executive officers and non-employee directors own shares of common stock having an aggregate value equal to a multiple of the executive officer’s annual base salary or non-employee director’s annual board cash retainer as follows:
PSUs Granted in 2021
| Position | Multiple | | Chief Executive Officer | 6x Annual Base Salary | | All Other Executive Officers | 2x Annual Base Salary | | Non-Employee Directors* | 5x Annual Board Cash Retainer |
PSUs Granted in 2021
| * Excludes CD&R affiliated directors |
PSUs Granted in 2021
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PSUs Granted in 2021
Executives are required to hold 100% of shares acquired as a result of exercise or settlement of compensatory awards (net of any shares withheld for taxes) until these ownership guidelines have been met. Hedging and Pledging Our internal Policy on Trading in Securities prohibits hedging or monetization transactions with respect to agilon health securities and the pledging of agilon health securities as collateral for a loan by any of our employees, officers, or directors. Clawback Policy In accordance with SEC and NYSE requirements, the board has adopted an executive compensation recovery policy regarding the adjustment or recovery of certain incentive awards or payments made to current or former executive officers in the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. In general, the policy provides that, unless an exception applies, we will seek to recover compensation that is awarded to an executive officer based on our attainment of a financial metric during the three-year period prior to the fiscal year in which the restatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the restated financial results. Compensation and Human Capital Committee Report The Company’s Compensation and Human Capital Committee has reviewed the Compensation Discussion and Analysis and discussed it with management and, based on such review and discussions, has recommended to the board that the Compensation Discussion and Analysis should be included in this proxy statement. The Compensation and Human Capital Committee Jeff Schwaneke (Chair) Silvana Battaglia Diana McKenzie Karen McLoughlin This Compensation and Human Capital Committee Report is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.
PSUs Granted in 2021
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PSUs Granted in 2021
Summary Compensation Table The following table sets forth the compensation of our NEOs.
PSUs Granted in 2021
| Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Steven J. Sell Chief Executive Officer and President | 2023 | 750,000 | 3,375,043 | 1,125,008 | — | 16,985 | 5,267,036 | | | 2022 | 750,000 | 2,250,018 | 2,250,014 | 523,125 | 16,000 | 5,789,157 | | | 2021 | 750,000 | — | — | 506,250 | — | 1,256,250 | | Timothy Bensley Chief Financial Officer | 2023 | 500,000 | 937,529 | 312,510 | — | — | 1,750,039 | | | 2022 | 500,000 | 625,012 | 625,012 | 331,313 | — | 2,081,337 | | | 2021(5) | 480,769 | 687,470 | 4,311,643 | 336,415 | 4,734 | 5,821,031 | | Veeral Desai Chief Strategy and Development Officer | 2023 | 375,000 | 2,250,019 | 750,016 | — | 29,847 | 3,404,882 | | | 2022 | 375,000 | 750,006 | 750,014 | 261,563 | 22,721 | 2,159,304 | | | 2021 | 375,000 | 549,976 | 549,992 | 285,244 | 8,019 | 1,768,231 | | Benjamin Shaker Chief Markets Officer | 2023 | 400,000 | 1,875,030 | 625,003 | — | 30,185 | 2,930,218 | | | 2022 | 400,000 | 625,012 | 625,012 | 279,000 | 28,200 | 1,957,224 | | | 2021 | 389,808 | 6,624,943 | 625,000 | 304,260 | 13,886 | 7,957,897 | | Girish Venkatachaliah Chief Technology Officer | 2023 | 350,000 | 1,875,030 | 625,003 | — | 30,185 | 2,880,218 | | | 2022 | 350,000 | 500,020 | 500,009 | 268,538 | 28,200 | 1,646,767 | | | 2021(6) | 333,846 | 249,964 | 2,437,052 | 257,442 | 4,734 | 3,283,038 |
Severance Payments
| Name | Fees earned or paid in cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Total ($) | | Silvana Battaglia | 39,808 | 150,041 | 185,002 | 374,851 | | Sharad Mansukani, M.D. | 85,000 | 160,002 | — | 245,002 | | Diana L. McKenzie(3) | 60,861 | 184,570 | 160,009 | 405,440 | | Karen McLoughlin | 132,500 | 160,002 | — | 292,502 | | Clay Richards(4) | 33,453 | 160,002 | — | 193,455 | | Ravi Sachdev | — | — | — | — | | Richard J. Schnall(4) | — | — | — | — | | Jeffrey Schwaneke | 70,000 | 160,002 | — | 230,002 | | Derek L. Strum(4) | — | — | — | — | | Ron Williams | — | 160,002 | — | 160,002 | | William Wulf, M.D. | 70,000 | 160,002 | — | 230,002 |
Severance Payments
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(4) | Average Compensation Actually Paid to Non-PEO NEOs ($)(3)(5) | Value of Initial Fixed $100 Investment Based On: | | Net Income (thousands) ($)(7) | Adjusted EBITDA (thousands) ($)(8) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(6) | | | | 2023 | 5,267,036 | (3,573,313) | 2,741,339 | 1,550,202 | 54.57 | 120.43 | (262,803) | (95,001) | | 2022 | 5,789,157 | (30,811,711) | 1,961,158 | (1,410,451) | 70.17 | 118.00 | (106,864) | 4,251 | | 2021 | 1,256,250 | 79,887,250 | 4,001,770 | 26,200,762 | 117.39 | 120.35 | (406,787) | (38,619) |
Severance Payments
| (2) Amounts reported in this column represent the amount of “compensation actually paid” to Mr. Sell, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Sell during the applicable year. The increases and decreases in these values are attributable largely to the changes in the value of Mr. Sell’s pre-IPO equity compensation awards in light of stock price movements. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Sell’s total compensation for each year to determine the compensation actually paid: |
Severance Payments
| (3) For the portion of “compensation actually paid” that is based on year-end stock prices, $12.55 was used for 2023, $16.14 was used for 2022 and $27.00 was used for 2021. |
Severance Payments
| (5) Amounts reported in this column represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Sell), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Sell) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation to determine the compensation actually paid: |
BOARD NOMINEES
BOARD NOMINEES Ravi Sachdev Steven J. Sell William Wulf, M.D. The matrix below outlines the diverse set of skills and expertise represented on our board:
BOARD NOMINEES
| Summary of Director Qualifications and Experience | Silvana Battaglia | Sharad Mansukani | Diana McKenzie | Karen McLoughlin | Ravi Sachdev | Jeff Schwaneke | Steven Sell | Ronald Williams | William Wulf | | Technology/Business Processes | | • | • | | | | | • | | | M&A/Corporate Finance/Capital Markets | | • | | | • | • | | • | | | Accounting/Finance Expertise/P&L Leadership | | • | | • | • | • | • | • | | | Risk Management/Compliance | | • | • | • | | • | | • | • | | Environmental/Social | | | | | | | • | • | | | Healthcare Industry Experience | • | • | • | | • | • | • | • | • | | Marketing/Sales/Social Media | | • | | | | | | | | | Cybersecurity/Information Technology | | • | • | | | | | | | | Corporate Governance | • | • | • | • | • | • | • | • | | | Regulatory/Government Relations | | • | • | | • | • | | • | | | Compensation/Human Resources | • | • | • | | • | • | | • | |
BOARD NOMINEES
| | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE CLASS III NOMINEES LISTED ABOVE. |
BOARD NOMINEES
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BOARD NOMINEES
Proposal Two. Ratification of Selection of Independent Registered Public Accounting Firm The Audit Committee of the board of directors has selected Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024 and recommends that the stockholders vote for ratification of such selection. The Audit Committee has sole and direct responsibility for the appointment, retention, termination, compensation, evaluation, and oversight of the work of any independent registered public accounting firm engaged by the Company. In the event of a negative vote on the ratification, the Audit Committee may reconsider its appointment of Ernst & Young LLP for the year ending December 31, 2024; however, the Audit Committee will consider the outcome of the vote for the year ending December 31, 2024, and when making appointments of our independent registered public accounting firm in future years. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from those attending the meeting. Audit Fees and Related Fees The following table presents, for the years ended December 31, 2023 and 2022, fees for professional services rendered by Ernst & Young LLP for the audit of our annual financial statements, audit-related services, tax services and all other services. In accordance with the SEC’s definitions and rules, “audit fees” are fees we paid Ernst & Young LLP for professional services for the audit of our Consolidated Financial Statements included in our Annual Report on Form 10-K, review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements; and “tax fees” are fees for tax compliance, tax advice and tax planning.
BOARD NOMINEES
| | Year Ended December 31, | | | | 2023 | 2022 | | Audit Fees(1) | $5,473,256 | $5,615,500 | | Audit-Related Fees | $— | $— | | Tax Fees(2) | $— | $— | | Other Fees | $— | $— |
BOARD NOMINEES
| (1) Audit fees include fees related to the audit of our annual consolidated financial statements and internal control over financial reporting, including the review of interim consolidated financial statements, other services associated with regulatory filings, including registration statement and consent services, as well as other fees associated with audits of certain subsidiaries of the Company. |
BOARD NOMINEES
| (2) Includes services rendered in connection with tax planning, compliance and tax return preparation fees. |
BOARD NOMINEES
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BOARD NOMINEES
| PROPOSAL TWO |
BOARD NOMINEES
Pre-Approval Policies and Procedures In accordance with the Sarbanes-Oxley Act of 2002, the Audit Committee charter provides that the Audit Committee of the board of directors has the sole authority and responsibility to pre-approve all audit services, audit- related tax services and other permitted services to be performed for the Company by its independent auditors and the related fees. Under its charter and in compliance with rules of the SEC and PCAOB, the Audit Committee established a pre-approval policy that requires the pre-approval of all services to be performed by the independent auditors. The independent auditors may be considered for other services not specifically approved as audit services or audit-related services and tax services so long as the services are not prohibited by SEC or PCAOB rules and would not otherwise impair the independence of the independent auditor. All of the services performed by Ernst & Young LLP during the years ended December 31, 2023 and 2022 were approved in advance by the Audit Committee pursuant to the pre-approval policy.
BOARD NOMINEES
| | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024. |
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Proposal Three. Advisory Vote to Approve Executive Compensation Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, the Company’s stockholders are entitled to approve, on an advisory basis, the compensation of our named executive officers. This non-binding advisory vote, commonly known as a “Say on Pay” vote, gives our stockholders the opportunity to express their views on our NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. As described in the “Compensation Discussion and Analysis” section of this proxy statement (the “CD&A”), the Compensation and Human Capital Committee is tasked with the implementation of our executive compensation philosophy, and the core of that philosophy has been and continues to be to pay our executives based on our performance. In particular, the Compensation and Human Capital Committee strives to attract and retain highly motivated, qualified and experienced executives, focus the attention of the NEOs on the strategic, operational and financial performance of the Company and encourage the NEOs to meet long-term performance objectives and increase stockholder value. To do so, the Compensation and Human Capital Committee uses a combination of short- and long-term incentive compensation to motivate and reward executives who have the ability to significantly influence our long-term financial success and who are responsible for effectively managing our operations in a way that maximizes stockholder value. It is always the intention of the Compensation and Human Capital Committee that our executive officers be compensated competitively with the market and consistently with our business strategy, sound corporate governance principles, and stockholder interests and concerns. We believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our stockholders and that the total compensation package provided to our NEOs are reasonable and not excessive. For these reasons, the board of directors is asking stockholders to vote “FOR” the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in accordance with the rules of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is APPROVED.” As you consider this Proposal 3, we urge you to read the CD&A section of this proxy statement for additional details on our executive compensation for 2023, including the more detailed information about our compensation philosophy and objectives and the past compensation of our NEOs, and to review the tabular disclosures regarding NEOs compensation together with the accompanying narrative disclosures in the “Executive Compensation” section of this proxy statement. As an advisory vote, Proposal 3 is not binding on our board of directors or the Compensation and Human Capital Committee, will not overrule any decisions made by our board of directors or the Compensation and Human Capital Committee, or require our board of directors or the Compensation and Human Capital Committee to take any specific action. Although the vote is non-binding, our board of directors and the Compensation and Human Capital Committee value the opinions of our stockholders and will carefully consider the outcome of the vote when making future compensation decisions for our named executive officers. The Company’s current policy is to provide stockholders with an opportunity to vote on the compensation of the named executive officers each year at the annual meeting of stockholders. It is expected that the next such vote will occur at the 2025 Annual Meeting of Stockholders.
BOARD NOMINEES
| | OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. |
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Other Business. The board of directors does not know of any matters which will be brought before the Annual Meeting other than those specifically set forth in the notice of meeting. If any other matters are properly introduced at the meeting for consideration, including, among other things, consideration of a motion to adjourn the meeting to another time or place, the individuals named in the Company’s proxy will have discretion to vote in accordance with their best judgment, unless otherwise restricted by law. A list of stockholders entitled to be present and vote at the Annual Meeting will be available at 6210 E. Highway 290, Suite 450, Austin, Texas 78723 for inspection by the stockholders for purposes germane to the meeting from May 19, 2024, to the date of the Annual Meeting. The list also will be available during the Annual Meeting for inspection by stockholders who are present. Whether or not you expect to attend the Annual Meeting, we urge you to vote via the Internet, as instructed on the proxy card and Notice of Internet Availability or, if so requested, by executing and returning the requested proxy card in the postage paid envelope that will be provided, so that your shares may be represented at the Annual Meeting. By Order of the Board of Directors,
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| | Denise Zamore Chief Legal Officer and Corporate Secretary April 18, 2024 |
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| Other Business |
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Website References Information contained on or connected to any website referenced in this proxy statement is not incorporated by reference in this proxy statement or in any other report or document we file with the SEC. We routinely use our Investor Relations website to provide presentations, press releases, and other information that may be deemed material to investors. Accordingly, we encourage investors and others interested in the Company to review the information that we share at http://investors.agilonhealth.com. In addition, our Investor Relations website allows interested persons to sign up to automatically receive e-mail alerts when we post financial information.
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