DEF 14A of Corvel Corp
Filed Jun 30, 2023 · FY20230001193125-23-180468
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Board Structure and Membership
Board Structure and Membership We currently have six directors serving on our Board and one vacancy. The Fourth Amended and Restated Certificate of Incorporation of the Company (our “Certificate of Incorporation”) provides that any additional directorships resulting from an increase in the number of directors, or the vacancy that currently exists on the Board, may be filled by a majority of the directors then in office. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. We may reduce or increase the size of the Board by resolution adopted by the affirmative vote of a majority of the directors. Our Certificate of Incorporation and Bylaws also provide that directors elected at an annual meeting of stockholders will serve for a one-year term ending on the date of the following annual meeting of stockholders or until his or her successor has been duly elected and qualified. The term may be shorter if such individual resigns, becomes disqualified or disabled, or is otherwise removed. Our Board has nominated the six individuals listed below for re-election at the Annual Meeting. If elected at the Annual Meeting, each director nominee would serve for a one-year term ending on the date of our 2024 Annual Meeting or until his or her successor has been duly elected and qualified. The term may be shorter if such individual resigns, becomes disqualified or disabled, or is otherwise removed, and the Board will consist of six persons on the Board. Each nominee is currently serving as a director and has indicated his or her willingness to continue to serve as a director if re-elected. In the event that any such nominee becomes unable or declines to serve at the time of the Annual Meeting, the proxyholders may exercise discretionary authority to vote for a substitute person selected and recommended by our Nomination and Governance Committee and approved by the Board.
Recommended Vote
Recommended Vote The election of each of our director nominees requires a plurality of the votes cast by the shares of Common Stock present or represented by proxy at the Annual Meeting and entitled to vote thereon. This means that the nominees receiving the highest number of votes at the Annual Meeting will be elected, even if those votes do not constitute a majority of the votes cast. Stockholders may vote “FOR ALL,” “WITHHOLD ALL,” or “FOR ALL EXCEPT” with respect to the director nominees nominated for re-election under this Proposal One. A “WITHHOLD” vote with respect to a director nominee will not count as a vote cast for that or any other nominee, and thus will have no effect on the outcome of the vote on this proposal. This proposal is considered a non-routine matter under applicable stock exchange rules. A bank, broker, dealer or other nominee may not vote without instructions on this matter, so there may be broker non-votes in connection with this proposal. Broker non-votes will not count as votes cast on this proposal, and thus will have no effect on the outcome of the vote. THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR ALL” OF THE DIRECTOR NOMINEES.
Information Regarding Director Nominees
Information Regarding Director Nominees The following table lists the persons recommended by our Nomination and Governance Committee, and nominated by the Board, to be re-elected as directors to serve for a period of one year, including relevant information as of March 31, 2023:
Information Regarding Director Nominees
| Name | Age | Position | | V. Gordon Clemons | 79 | Chairman of the Board | | Steven J. Hamerslag (1) (3) | 66 | Director | | Alan R. Hoops (1) (2) | 75 | Director | | R. Judd Jessup (1) | 75 | Director | | Jean H. Macino (2) | 80 | Director | | Jeffrey J. Michael (2) (3) | 66 | Director |
Information Regarding Director Nominees
| (1) Member of the Audit Committee. |
Information Regarding Director Nominees
| (2) Member of the Compensation Committee. |
Information Regarding Director Nominees
| (3) Member of the Nomination and Governance Committee. |
Information Regarding Director Nominees
V. Gordon Clemons. Mr. Clemons has served as our Chairman of the Board since April 1991. He served as our Chief Executive Officer from January 1988 until August 2007 and as our President from January 1988 until May 2006. He was reappointed as our Chief Executive Officer and President in April 2012 and served in the role of Chief Executive Officer until January 2019 and President until April 2017. Mr. Clemons was President of Caremark, Inc., a home intravenous therapy company, from May 1985 to September 1987, at which time Caremark was purchased by Baxter International, Inc. From 1981 to 1985, Mr. Clemons was President of INTRACORP, a medical management company and subsidiary of CIGNA Corporation. Mr. Clemons has over 41 years of experience in the healthcare and insurance industries. The Board believes Mr. Clemons is qualified to serve as Chairman of the Board given his extensive technology, industry, management and operational experience and his substantial understanding of the Company and its operations resulting from his various positions of leadership, including his position as Chief Executive Officer and President. Steven J. Hamerslag. Mr. Hamerslag has served as one of our directors since May 1991. Mr. Hamerslag has been Managing Partner of TVC Capital, a venture capital firm, since April 2006, and Managing Director of Titan Investment Partners, a venture capital firm, since November 2002. Mr. Hamerslag served as the President and Chief Executive Officer of J2Global Communications, a publicly held unified communication services company, from June 1999 until January 2001. Mr. Hamerslag served as the Chief Executive Officer of MTI Technology Corporation, a publicly held manufacturer of enterprise storage solutions, from 1987 to 1996. The Board believes Mr. Hamerslag’s valuable business, leadership and executive management experience, particularly in the technology industry, qualifies him to serve as a director. Alan R. Hoops. Mr. Hoops has served as one of our directors since May 2003. Mr. Hoops has been Executive Chairman of Health Essentials, a physician medical group specializing in hospice care, pharmacy and durable medical equipment services for medically complex and frail-elderly patients, since 2012. Mr. Hoops was Chairman of the Board and Chief Executive Officer of CareMore California Health Plan, a health maintenance organization, from March 2006 to February 2012. Mr. Hoops was Chairman of Benu, Inc., a regional benefits administration/marketing company, from 2000 to March 2006, and Chairman of Enwisen, Inc., a human resources services software company, from 2001 to March 2006. Mr. Hoops was Chief Executive Officer and a Director of Pacificare Health Systems, Inc., a national health consumer services company, from 1993 to 2000. Mr. Hoops has 46 years of experience in the healthcare and managed care industries. The Board believes Mr. Hoops’ experience as the Chief Executive Officer and Director of Pacificare Health Systems, Inc., combined with his strong operational and strategic background and extensive public company experience, qualifies him to serve as a director. R. Judd Jessup. Mr. Jessup has served as one of our directors since August 1997. Mr. Jessup was Chief Executive Officer of CombiMatrix Corporation, a molecular diagnostics laboratory, from August 2010 to March 2013. Mr. Jessup was Chief Executive Officer of U.S. LABS, a national laboratory which provides cancer diagnostic and genetic testing services, from 2002 to 2005. Mr. Jessup was President of the HMO Division of FHP International Corporation, a diversified health care services company, from 1994 to 1996. From 1987 to 1994, Mr. Jessup was President of TakeCare, Inc., a publicly held HMO operating in California, Colorado, Illinois and Ohio, until it was acquired by FHP. Mr. Jessup has 44 years of experience in the healthcare and managed care industries. Mr. Jessup was a director of CombiMatrix Corporation from August 2010 to November 2017, a director of Xifin, Inc., a laboratory billing systems company, from January 2006 to August 2013, a director of Superior Vision Services, a national managed vision care plan, from December 2007 to April 2012, and a director of Accentcare from October 2005 to February 2008. The Board believes Mr. Jessup is qualified to serve as a director because he has significant executive experience with the strategic, financial, and operational requirements of large health care services organizations, including serving as an Audit Committee chair, and brings to the Board senior leadership, health industry, and financial experience. Jean H. Macino. Ms. Macino has served as one of our directors since February 2008. Ms. Macino has served on the Board of Governors of Chapman University for the past eleven years and currently serves as Chairman of the Governorship Committee of Chapman University. Ms. Macino was Managing Director of the Newport Beach office of Marsh, Inc. from 1995 to 2005, and Managing Director of Marsh and McLennan Companies, an insurance broker and strategic risk advisor, from 1980 to 1995. Ms. Macino has over 41 years of experience in the insurance brokerage industry. The Board believes Ms. Macino’s executive leadership experience, strong sales and marketing expertise in the insurance brokerage industry qualifies her to serve as a director. Jeffrey J. Michael. Mr. Michael has served as one of our directors since September 1990. Mr. Michael has been President, Chief Executive Officer and a Director of Corstar Holdings, Inc., one of our significant stockholders and a holding company owning equity interests in CorVel since March 1996. The Board believes Mr. Michael’s experience as the President, Chief Executive Officer and Director of Corstar Holdings, Inc., combined with his strong operational and strategic background and extensive public company experience, qualifies him to serve as a director.
Compensation Philosophy
Compensation Philosophy We operate in the medical cost containment and managed care industry. The Compensation Committee believes that our compensation programs for executive officers should: (a) be designed to attract, motivate and retain talented executives, (b) be competitive, and (c) reward individuals based on the achievement of designated financial targets, individual contribution, and financial performance relative to that of our competitors and market indices. Our philosophy is to focus more on equity compensation (in particular, to incentivize service within a five-year timeframe for time-vesting stock options) than on annual base compensation because we believe that approach more closely aligns the interests of our executive officers with those of our stockholders. Within this philosophy, the Compensation Committee’s objectives are to:
Compensation Philosophy
| • | provide annual cash incentive awards that take into account our overall financial performance in terms of designated corporate objectives; and |
Compensation Philosophy
| • | strengthen the alignment of the interests of our executive officers with those of our stockholders by providing significant equity-based, long-term incentive awards. |
Compensation Components and Process
Compensation Components and Process The Compensation Committee’s conclusions on the compensation levels for our executive officers are based in large part on input from our chief executive officer, who prior to fiscal year 2023 used survey data provided by Mercer, and for fiscal year 2023 onward uses survey data provided by Alera Group, for companies in the services sector with target revenue for the upcoming fiscal year similar to CorVel. While the survey data reviewed by our chief executive officer includes the market 50th percentile targets for base salary, annual bonus and long-term incentive compensation opportunities for the covered companies, this data is not used as a strict benchmark, but rather as a market check for the recommendations made to our compensation committee. The compensation committee discusses the compensation recommendations made by our chief executive officer prior to their adoption. The Compensation Committee considered fiscal year 2023 executive compensation on February 3, 2022, May 12, 2022, August 4, 2022, November 3, 2022 and February 1, 2023, considered fiscal year 2022 executive compensation on February 4, 2021, May 6, 2021, August 5, 2021, December 8, 2021 and February 3, 2022, and considered fiscal year 2021 executive compensation on February 4, 2020, April 30, 2020, July 31, 2020, November 5, 2020 and February 4, 2021. The material considered by the compensation committee also included the historical compensation and stock option awards made to each of our executive officers. As described in more detail below, the results of each executive’s annual management by objectives plan, including a comparison of performance and job description relative to achievement and potential, were reviewed and discussed. The following table sets forth summary compensation information for our named executive officers for the fiscal years ended March 31, 2023, 2022 and 2021:
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position* | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation (2) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) (3) | Total ($) | | V. Gordon Clemons | 2023 | $81,286(4) | $— | $— | $68,956 | $— | $— | $393 | $152,523 | | Chairman of the Board | 2022 | $84,666 | $— | $— | $45,859 | $— | $— | $275 | $130,880 | | Former CEO | 2021 | $104,518 | $— | $— | $91,150 | $— | $— | $455 | $196,123 | | Michael G. Combs | 2023 | $625,777 | $— | $— | $1,176,522 | $284,755 | $— | $3,012 | $2,090,066 | | CEO and President | 2022 | $578,547 | $— | $— | $309,939 | $529,864 | $— | $2,394 | $1,420,744 | | | 2021 | $561,538 | $— | $— | $543,248 | $403,000 | $— | $2,344 | $1,510,130 | | Mark E. Bertels (5) | 2023 | $260,253 | $— | $— | $369,311 | $103,749 | $— | $2,537 | $735,850 | | Executive V.P., | 2022 | $— | $— | $— | $— | $— | $— | $— | $— | | Risk Management Services | 2021 | $— | $— | $— | $— | $— | $— | $— | $— | | Maxim Shishin | 2023 | $286,535 | $— | $— | $74,198 | $101,593 | $— | $2,341 | $464,667 | | Chief Information Officer | 2022 | $259,871 | $— | $— | $244,105 | $145,130 | $— | $2,180 | $651,286 | | | 2021 | $250,530 | $— | $— | $282,282 | $98,855 | $— | $2,172 | $633,839 | | Brandon T. O’Brien | 2023 | $271,016 | $— | $— | $65,996 | $85,709 | $— | $2,279 | $424,999 | | Chief Financial Officer | 2022 | $251,012 | $— | $— | $176,497 | $100,648 | $— | $2,172 | $530,329 | | | 2021 | $242,876 | $— | $— | $218,851 | $84,824 | $— | $2,109 | $548,660 | | Jennifer L. Yoss | 2023 | $196,020 | $— | $— | $43,698 | $48,071 | $— | $2,142 | $289,932 | | V.P., Accounting | 2022 | $178,162 | $— | $— | $117,522 | $58,071 | $— | $1,880 | $355,635 | | | 2021 | $165,146 | $— | $— | $137,262 | $39,358 | $— | $1,282 | $343,048 |
Summary Compensation Table
| * Each of the individuals listed above are referred to in the Proxy Statement as our “named executive officers.” |
Summary Compensation Table
| (1) The fair value of option awards shown are calculated in accordance with ASC 718 and ASU 2016-09, Compensation—Stock Compensation, and represent the aggregate grant date fair value of option awards granted during the year for awards that are not based on performance conditions. The value of performance awards is based on the probable outcome of the performance conditions as of the grant date. Refer to Note 3, Stock Options and Stock-Based Compensation, in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K filed May 26, 2023 for the relevant assumptions used to determine the valuation of our option awards. The options granted to V. Gordon Clemons were made for services rendered as an executive officer role as Chairman of the Board. |
Summary Compensation Table
| (2) The amounts included for fiscal year 2023 reflect the value of cash incentive plan awards earned by the executives based on the achievement of management by objectives (“MBOs”) established for calendar year 2022 that were paid during fiscal year 2023. The amounts included for fiscal year 2022 reflect the value of cash incentive plan awards earned by the executives based on the achievement of MBOs established for calendar year 2021 that were paid during fiscal year 2022. The amounts included for fiscal year 2021 reflect the value of cash incentive plan awards earned by the executives based on the achievement of MBOs established for calendar year 2020 MBOs, but their payment was deferred and paid in the June 2021 quarter of fiscal year 2022. For additional information about the annual cash incentive plan awards, see the section entitled “Principal Elements of Executive Compensation—Annual Cash Incentive Awards Plan.” |
Summary Compensation Table
| (3) Includes matching contributions by us under our 401(k) savings plan and annual premiums paid by us for the purchase of group term life insurance in an amount equal to each executive officer’s annual salary as follows (the amounts for V. Gordon Clemons were in connection with services in his executive officer role as Chairman of the Board): |
Summary Compensation Table
| | Fiscal Year | CorVel Contribution to Section 401(k) Plan | CorVel-Paid Life Insurance Premiums | | V. Gordon Clemons | 2023 | $163 | $231 | | | 2022 | $168 | $106 | | | 2021 | $349 | $106 | | Michael G. Combs | 2023 | $2,050 | $962 | | | 2022 | $1,950 | $444 | | | 2021 | $1,900 | $444 | | Mark E. Bertels (5) | 2023 | $2,050 | $487 | | | 2022 | $— | $— | | | 2021 | $— | $— | | Maxim Shishin | 2023 | $1,942 | $399 | | | 2022 | $1,950 | $230 | | | 2021 | $1,950 | $222 | | Brandon T. O’Brien | 2023 | $2,025 | $254 | | | 2022 | $1,950 | $222 | | | 2021 | $1,894 | $214 | | Jennifer L. Yoss | 2023 | $1,953 | $189 | | | 2022 | $1,720 | $160 | | | 2021 | $1,131 | $151 |
Summary Compensation Table
| (4) During fiscal year 2023, Mr. V. Gordon Clemons received compensation of $72,000 for serving as a director on the Board and $9,286 as salary for services in his executive officer role as Chairman of the Board. During fiscal year 2022, Mr. V. Gordon Clemons received compensation of $74,000 for serving as a director on the Board and $10,666 as salary for services in his executive officer role as Chairman of the Board. During fiscal year 2021, Mr. V. Gordon Clemons received compensation of $74,000 for serving as a director of the Board and $30,518 as salary for services in his executive officer role as Chairman of the Board. |
Summary Compensation Table
| (5) Mr. Bertels was promoted to Executive Vice President, Risk Management Services on April 1, 2022. Because Mr. Bertels was not a named executive officer for fiscal years 2021 and 2022, his compensation for those fiscal years is not shown. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards
Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts under Equity Incentive Plan Awards (1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($) (2) | Grant Date Fair Value of Option Awards ($) (2) (3) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | V. Gordon Clemons | 8/4/2022 | — | — | — | — | — | — | — | 1,000 | $163.61 | $163,610 | | Chairman | | | | | | | | | | | | | Michael G. Combs | 5/12/2022 | — | — | — | — | — | — | — | 7,500 | $148.89 | $1,116,675 | | CEO and President | 11/3/2022 | — | — | — | — | — | 8,000 | — | 12,000 | 155.99 | 3,119,800 | | Mark E. Bertels | 5/12/2022 | — | — | — | — | — | — | — | 5,250 | $148.89 | $781,673 | | Executive V.P. | 8/4/2022 | — | — | — | — | — | — | — | 750 | 163.61 | 122,708 | | Risk Management Services | 11/3/2022 | — | — | — | — | — | 4,000 | — | — | 155.99 | 623,960 | | Maxim Shishin | 5/12/2022 | — | — | — | — | — | — | — | 500 | $148.89 | $74,445 | | Chief Information Officer | 11/3/2022 | — | — | — | — | — | 3,000 | — | — | 155.99 | 467,970 | | Brandon T. O’Brien | 5/12/2022 | — | — | — | — | — | — | — | 500 | $148.89 | $74,445 | | Chief Financial Officer | 11/3/2022 | — | — | — | — | — | 2,500 | — | — | 155.99 | 389,975 | | Jennifer L. Yoss | 5/12/2022 | — | — | — | — | — | — | — | 300 | $148.89 | $44,667 | | Vice President, Accounting | 11/3/2022 | — | — | — | — | — | 1,750 | — | — | 155.99 | 272,983 |
Grants of Plan-Based Awards
| (1) The targets for awards granted on November 3, 2022 will not be determinable until the completion of each of calendar years 2023, 2024 and 2025. |
Grants of Plan-Based Awards
| (2) See Note 3, Stock Options and Stock-Based Compensation, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K filed May 26, 2023 for the relevant assumptions used to determine the valuation of our option awards. |
Grants of Plan-Based Awards
| (3) The exercise price of the option award is equal to the closing price of our common stock as reported by the Nasdaq Global Select Market on the date of grant. The option awarded to V. Gordon Clemons was for services in his executive officer role as Chairman of the Board. |
Grants of Plan-Based Awards
The following table sets forth information about the outstanding equity awards held by each of our named executive officers as of March 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date (2) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | V. Gordon Clemons | 0 | 1,000 | 1,000 | 163.61 | 8/4/2027 | — | — | — | — | | Chairman | 396 | 604 | 1,000 | 151.94 | 8/12/2026 | — | — | — | — | | | 4,375 | 1,625 | 6,000 | $52.69 | 4/30/2025 | — | — | — | — | | Michael G. Combs | 0 | 20,000 | 20,000(3) | $155.99 | 11/3/2027 | — | — | — | — | | CEO and President | 0 | 7,500 | 7,500 | 148.89 | 5/12/2027 | — | — | — | — | | | 551 | 2,800 | 3,351(3) | $197.16 | 12/8/2026 | — | — | — | — | | | 917 | 1,083 | 2,000 | 119.48 | 5/6/2026 | | | | | | | 1,302 | 1,198 | 2,500 | 103.31 | 2/4/2026 | — | — | — | — | | | 9,000 | 6,000 | 15,000(3) | 87.69 | 11/5/2025 | — | — | — | — | | | 4,375 | 1,625 | 6,000 | 52.69 | 4/30/2025 | — | — | — | — | | | 5,875 | 125 | 6,000 | 70.24 | 4/25/2024 | — | — | — | — | | Mark E. Bertels | 0 | 4,000 | 4,000(3) | $155.99 | 11/3/2027 | — | — | — | — | | Executive V.P., | 0 | 750 | 750 | 163.61 | 8/4/2027 | — | — | — | — | | Risk Management | 0 | 5,250 | 5,250 | 148.89 | 5/12/2027 | — | — | — | — | | Services | 344 | 1,750 | 2,094(3) | 197.16 | 12/8/2026 | — | — | — | — | | | 99 | 151 | 250 | 157.94 | 8/5/2026 | — | — | — | — | | | 161 | 189 | 350 | 119.48 | 5/6/2026 | — | — | — | — | | | 208 | 192 | 400 | 103.31 | 2/4/2026 | — | — | — | — | | | 175 | 125 | 300 | 87.69 | 11/5/2025 | — | — | — | — | | | 200 | 100 | 300 | 79.49 | 7/31/2025 | — | — | — | — | | | 255 | 95 | 350 | 52.69 | 4/30/2025 | — | — | — | — | | | 231 | 69 | 300 | 88.22 | 2/4/2025 | — | — | — | — | | | 179 | 21 | 200 | 87.49 | 8/8/2024 | — | — | — | — | | | 250 | 0 | 250 | 59.32 | 11/1/2023 | — | — | — | — | | | 500 | 0 | 500 | 57.35 | 8/2/2023 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date (2) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Maxim Shishin | 0 | 3,000 | 3,000(3) | 155.99 | 11/3/2027 | — | — | — | — | | Chief Information | 0 | 500 | 500 | 148.89 | 5/12/2027 | — | — | — | — | | Officer | 413 | 2,100 | 2,513(3) | 197.16 | 12/8/2026 | — | — | — | — | | | 297 | 453 | 750 | 157.94 | 8/5/2026 | — | — | — | — | | | 367 | 433 | 800 | 119.48 | 5/6/2026 | — | — | — | — | | | 6,000 | 4,000 | 10,000(3) | 87.69 | 11/5/2025 | — | — | — | — | | | 533 | 267 | 800 | 79.49 | 7/31/2025 | — | — | — | — | | | 547 | 203 | 750 | 52.69 | 4/30/2025 | — | — | — | — | | | 8,075 | 0 | 8,075(3) | 77.93 | 11/5/2024 | — | — | — | — | | | 896 | 104 | 1,000 | 87.49 | 8/8/2024 | — | — | — | — | | | 1,469 | 31 | 1,500 | 70.24 | 4/25/2024 | — | — | — | — | | | 5,146 | 0 | 5,146(3) | 59.32 | 11/1/2023 | — | — | — | — | | Brandon T. O’Brien | 0 | 2,500 | 2,500(3) | $155.99 | 11/3/2027 | — | — | — | — | | Chief Financial | 0 | 500 | 500 | 148.89 | 5/12/2027 | — | — | — | — | | Officer | 344 | 1,750 | 2,094(3) | 197.16 | 12/8/2026 | — | — | — | — | | | 344 | 406 | 750 | 119.48 | 5/6/2026 | — | — | — | — | | | 4,800 | 3,200 | 8,000(3) | 87.69 | 11/5/2025 | — | — | — | — | | | 333 | 167 | 500 | 79.49 | 7/31/2025 | — | — | — | — | | | 292 | 108 | 400 | 52.69 | 4/30/2025 | — | — | — | — | | | 3,457 | 0 | 3,457(3) | 77.93 | 11/5/2024 | — | — | — | — | | | 0 | 42 | 42 | 87.49 | 8/8/2024 | — | — | — | — | | | 21 | 21 | 42 | 70.24 | 4/25/2024 | — | — | — | — | | Jennifer L. Yoss | 0 | 1,750 | 1,750(3) | $155.99 | 11/3/2027 | — | — | — | — | | Vice President, | 0 | 300 | 300 | 148.89 | 5/12/2027 | — | — | — | — | | Accounting | 241 | 1,225 | 1,466(3) | 197.16 | 12/8/2026 | — | — | — | — | | | 161 | 189 | 350 | 119.48 | 5/6/2026 | — | — | — | — | | | 1,500 | 2,000 | 3,500(3) | 87.69 | 11/5/2025 | — | — | — | — | | | 200 | 100 | 300 | 79.49 | 7/31/2025 | — | — | — | — | | | 219 | 81 | 300 | 52.69 | 4/30/2025 | — | — | — | — | | | 392 | 8 | 400 | 70.24 | 4/25/2024 | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End
| (1) Options become exercisable for 25% of the option shares one year from the grant date and thereafter the remaining shares become exercisable in 36 equal monthly installments. |
Outstanding Equity Awards at Fiscal Year-End
| (2) The expiration date of each option award is five years after the date of grant. |
Outstanding Equity Awards at Fiscal Year-End
| (3) Options become exercisable based on achievement of certain performance criteria related to earnings growth. |
Outstanding Equity Awards at Fiscal Year-End
The following table provides the number of shares of common stock acquired during fiscal year 2023 by our named executive officers upon the exercise of stock options or the vesting of stock awards. No shares of common stock were acquired during fiscal year 2023 by Messrs. Clemons, Bertels or Shishin.
Option Exercises and Stock Vested
Option Exercises and Stock Vested
Option Exercises and Stock Vested
| Name | Option awards | | Stock awards | | | | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Michael G. Combs | 6,400 | $659,328 | — | — | | President and CEO | 3,999 | $252,217 | — | — | | | 4,800 | $302,736 | — | — | | | 1,250 | $104,563 | — | — | | | 1,250 | $114,500 | — | — | | Brandon T. O’Brien | 187 | $24,622 | — | — | | Chief Financial Officer | 1,000 | $129,700 | — | — | | | 46 | $6,423 | — | — | | Jennifer L. Yoss | 62 | $7,544 | — | — | | V.P., Accounting | | | | |
Chief Executive Officer Pay Ratio
Chief Executive Officer Pay Ratio For the fiscal year ended March 31, 2023:
Chief Executive Officer Pay Ratio
| • | the median of the annual total compensation of all employees of our company (other than our CEO) was $58,714; and |
Chief Executive Officer Pay Ratio
| • | the annual total compensation of our CEO was $2,091,850. |
Chief Executive Officer Pay Ratio
Based on this information, for fiscal 2023, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 36:1. We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. As permitted by SEC rules, to identify our median employee, we selected total direct compensation as our consistently applied compensation measure, which we calculated as actual salary paid to our employees for fiscal 2023 (including overtime for hourly employees), actual bonus or sales commission earned by our employees in fiscal 2023, and the value of equity awards granted to our employees in fiscal 2023. Further, we used March 31, 2023 to determine our employee population and used the consistently applied compensation measure as described above to determine our median employee. In determining this population, we included all worldwide full-time and part-time employees other than our CEO. We did not include any contractors or workers employed through a third-party provider in our employee population. Based on this approach, we selected the individual who represented the median employee. We then calculated the annual total compensation for this individual using the same methodology we used for our named executive officers in our Summary Compensation Table.
Pay Versus Performance Table
Pay Versus Performance Table The following table provides information regarding “compensation actually paid” for our Chief Executive Officer and President, who is our principal executive officer (“
PEO
| (1) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our other NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year: |
PEO
| (2) The table below provides the adjustments to the Summary Compensation Table total compensation made to arrive at the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs: |
Relationship Between Compensation Actually Paid and Performance Measures
Relationship Between Compensation Actually Paid and Performance Measures In accordance with SEC rules, the charts below illustrate how “compensation actually paid” to our NEOs aligns with our Company’s financial performance as measured by our TSR, our peer group TSR, our net income and our earnings per share: Compensation Actually Paid Compared to Total Stockholder Return Cumulative Total Stockholder Return Compared to Peer Group Total Stockholder Return
Relationship Between Compensation Actually Paid and Performance Measures
| * The peer group used to determine peer group total stockholder return is the Nasdaq Healthcare Services Index. |
Relationship Between Compensation Actually Paid and Performance Measures
Compensation Actually Paid Compared to Net Income Compensation Actually Paid Compared to Earnings Per Share
Principal Elements of Director Compensation
Principal Elements of Director Compensation Each non-employee director received an amount equal to $3,000 in fiscal year 2023 for each Board meeting attended in person, as well as reimbursement for all associated travel expenses, and $1,000 for each telephonic Board meeting and each in-person or telephonic committee meeting attended provided it was not in conjunction with a duly convened Board meeting. Other than the Chairman of the Audit Committee, who in fiscal year 2023 received $1,000 for each committee meeting attended and an annual retainer of $4,000 for other services performed in his capacity as Chairman of the Audit Committee, the non-employee directors did not receive fees for any other director services during fiscal year 2023. These amounts were determined and approved during a telephonic meeting held on April 24, 2006, by the Nomination and Governance Committee based on their prior experience and ratified by the Compensation Committee. In the future, any adjustments to non-employee director compensation will be approved by the Compensation Committee. Our Chairman of the Board, V. Gordon Clemons, received $72,000 in fiscal year 2023 for director services, including attending Board meetings. Pursuant to the change to our Omnibus Incentive Plan approved by stockholders at our 2011 annual stockholders meeting, the Board eliminated the automatic option grant program under the Omnibus Incentive Plan and replaced it with the discretionary option grant program for non-employee directors. Consequently, during fiscal year 2022 each non-employee director, Messrs. Hamerslag, Hoops, Jessup, Michael and Ms. Macino, received stock option grants for 2,500 shares on August 4, 2022 at an exercise price equal to the fair market value on such date. Each such grant has a maximum term of ten years measured from the grant date, and becomes exercisable in a series of four equal and successive installments over the optionee’s period of service on the Board, with the first such installment to become exercisable 12 months after the grant date. On the date of the Annual Meeting, the Compensation Committee expects to grant each non-employee director a discretionary stock option to purchase 2,500 shares of common stock at an exercise price equal to the fair market value on such date. Each such grant will have a maximum term of ten years measured from the grant date, and will become exercisable in a series of four equal and successive installments over the optionee’s period of service on the Board, with the first such installment to become exercisable twelve months after the grant date. The following table provides information regarding the total compensation that was granted or paid during fiscal year 2023 to each of our directors:
Principal Elements of Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) (2) (3) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | | V. Gordon Clemons | $81,286(1) | $— | $68,956 | $— | $— | $1,959(4) | $152,201 | | Steven J. Hamerslag | 17,000 | — | 172,390 | — | — | — | 189,390 | | Alan R. Hoops | 18,000 | — | 172,390 | — | — | — | 190,390 | | R. Judd Jessup | 25,000 | — | 172,390 | — | — | — | 197,390 | | Jean H. Macino | 16,099 | — | 172,390 | — | — | — | 188,489 | | Jeffrey J. Michael | 14,000 | — | 172,390 | — | — | — | 186,390 |
Principal Elements of Director Compensation
| (1) Consists of $72,000 of Board fees paid to V. Gordon Clemons as compensation for serving as a director on the Board and $9,286 paid to Mr. Clemons as salary for services in his executive officer role as Chairman of the Board. |
Principal Elements of Director Compensation
| (2) The fair value of option awards shown is calculated in accordance with ASC 718 and ASU 2016-09, Compensation-Stock Compensation, and represents the aggregate grant date fair value of option awards granted during the year. See Note 3, Stock Options and Stock-Based Compensation, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K filed May 26, 2023, for the relevant assumptions used to determine the valuation of our option awards. |
Principal Elements of Director Compensation
| (3) Aggregate option awards outstanding as of March 31, 2023, the last day of our most recent fiscal year, that have been granted to each of our non-employee directors are as follows: Mr. Hamerslag - 35,000 shares, Mr. Hoops - 35,000 shares, Mr. Jessup - 35,000 shares, Ms. Macino - 35,000 shares, and Mr. Michael - 35,000 shares. The option for 1,000 shares awarded to V. Gordon Clemons was for services in his executive officer role as Chairman of the Board. |
Principal Elements of Director Compensation
| (4) Consists of $162 in matching contributions by us under our 401(k) savings plan and $1,797 in annual premiums paid by us for the purchase of group term life insurance, paid to V. Gordon Clemons for services in his executive officer role as Chairman of the Board. |