DEF 14A of Aveanna Healthcare Holdings, Inc.
Filed Apr 1, 2024 · FY20230001193125-24-083451
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS Our Charter provides that our Board is separated into three classes designated as Class I, Class II and Class III, that each class consists, as nearly as possible, of one third of the total number of such directors and that each class serves for staggered terms of three years as follows: Class I directors whose terms expire in 2025; Class II directors whose terms expire in 2026; and Class III directors whose terms expire in 2024. The exact number of directors shall be fixed from time to time by the action of a majority of the entire Board, provided that no decrease in the number of directors shall shorten the term of any incumbent director. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Three directors are being elected to Class III at the Meeting to serve for a three-year term expiring at our 2027 Annual Meeting. The names of our directors, executive officers and director nominees and their respective ages, positions, biographies and, in the case of directors, their qualifications to serve as directors, are set forth below.
DIRECTORS AND EXECUTIVE OFFICERS
| Name | Age | Position | | Matthew Buckhalter | 35 | Chief Financial Officer | | Ed Reisz | 65 | Chief Administrative Officer | | Deborah Stewart | 40 | Chief Accounting Officer | | Patrick Cunningham | 68 | Chief Compliance Officer | | Victor F. Ganzi | 77 | Class I Director | | Devin O’Reilly | 49 | Class I Director | | Robert M. Williams, Jr. | 59 | Class I Director | | Rodney D. Windley | 76 | Chairman (Class II Director) | | Christopher R. Gordon | 51 | Class II Director | | Steve E. Rodgers | 52 | Class II Director | | Richard C. Zoretic . | 65 | Class III Director (2) | | Director Nominees (1) | | | | Jeff Shaner | 51 | President and Chief Executive Officer and Class III Director | | Sheldon M. Retchin, M.D., M.S.P.H. | 73 | Class III Director | | Erica G. Schwartz, M.D., J.D., M.P.H. | 52 | Class III Director |
DIRECTORS AND EXECUTIVE OFFICERS
(1) Each nominee has been reviewed and recommended for nomination by our Nominating and Corporate Governance Committee and has consented to serve as a director if elected. (2) Mr. Zoretic’s term as a Class III Director ends at the Meeting. Matthew Buckhalter, Chief Financial Officer, joined Aveanna in 2017 upon its formation. Prior to being appointed as Chief Financial Officer, effective January 1, 2024, Mr. Buckhalter had, since July 2023, served as Interim Chief Financial Officer, and previously served as Aveanna’s Senior Vice President of Finance and led the Company’s Investor Relations Group. Moreover, Mr. Buckhalter previously served as Aveanna’s Vice President for Financial Planning and Analysis. Prior to Aveanna, Mr. Buckhalter was Vice President of Finance for RT Capital and served as a senior financial analyst for Gentiva Health Services from 2012 – 2015. Mr. Buckhalter received his Bachelor of Arts degree in finance from Florida State University. Ed Reisz, Chief Administrative Officer, joined Aveanna in 2017 upon its formation. Prior to that, Mr. Reisz served as executive vice president and chief human resources officer for PSA from 2015 to 2017. Before joining PSA, Mr. Reisz served as the senior vice president and chief human resources officer for Gentiva. Mr. Reisz began his career in the financial industry and is the founder of Bridgewater Consulting, a regional consulting firm focusing on the home care industry. Deborah Stewart, Senior Vice President and Chief Accounting Officer, joined Aveanna in September 2021 as Aveanna’s Vice President. Prior to Aveanna, Ms. Stewart was an assurance professional with Ernst & Young LLP from 2007 – 2021, most recently as a senior manager. Ms. Stewart received her Bachelor of Science degree in accounting and Masters of Accounting from North Carolina State University. Patrick Cunningham, Chief Compliance Officer, joined Aveanna in 2017. Prior to that, Mr. Cunningham served as vice president and chief compliance officer of PSA from 2013 to 2017 and as vice president of the hospice division of Gentiva from 2004 to 2013. Before that, Mr. Cunningham led a behavioral health homecare program in Connecticut that provided therapeutic and preventive healthcare services. Mr. Cunningham is a registered psychiatric nurse and a state registered nurse. He received his Bachelor of Arts degree in health administration from the Institute of Public Administration in Dublin, Ireland and his Master of Science in nursing from Yale University. Victor F. Ganzi, Director, has served on our Board of Directors since 2017 upon our formation. Prior to that, Mr. Ganzi served as the lead director for Gentiva Health Services from 2009 to 2015, as a director of PSA from 2016 to 2017 and as president and chief executive officer of The Hearst Corporation from 2002 to 2008. Prior to joining The Hearst Corporation, Mr. Ganzi was the managing partner at Rogers & Wells, now a part of Clifford Chance, an international law firm. Before joining Rogers & Wells, Mr. Ganzi was a certified public accountant, specializing in taxation, at a Big Four accounting firm. Mr. Ganzi has served on the board, and as Chairman, of Willis Towers Watson, a global advisory, broking and solutions company, as well as a director for companies such as Wyeth, ESPN, Hearst—Argyle Television, Gentiva Health Services, Inc., Angion Biomedica and Foster + Partners. Mr. Ganzi currently serves on the board of the Whitney Museum of American Art and is currently Chairman Emeritus of the board of PGA TOUR, Inc., having served as a director on its board for over 34 years. Mr. Ganzi graduated summa cum laude from Fordham University with a Bachelor of Science degree in accounting, received a Juris Doctor degree from Harvard Law School and holds an LL.M. in taxation from New York University. Mr. Ganzi’s qualifications to serve on our Board of Directors include chairing and serving on more than 25 public, private and nonprofit boards over the course of his career and his extensive legal, accounting and business management education and experience. Devin O’Reilly, Director, has served on our Board of Directors since 2017. Mr. O’Reilly has been a partner of Bain Capital Private Equity since 2013 and is head of the North American healthcare team. Mr. O’Reilly previously spent five years in Bain Capital’s London office, where he led the European private equity healthcare team. Prior to joining Bain Capital in 2005, Mr. O’Reilly was a consultant at Bain & Company where he consulted for private equity and healthcare industry clients. Mr. O’Reilly serves on the board of directors of several Bain Capital portfolio companies, including Surgery Partners, Inc. (Nasdaq: SGRY), athenahealth, CitiusTech Healthcare Technology Private Limited, LeanTaaS, PartsSource, and Zelis. Mr. O’Reilly received his Bachelor of Arts degree from Princeton University and his Master of Business Administration degree from The Wharton School. Mr. O’Reilly’s qualifications to serve on our Board of Directors include his extensive experience in the healthcare and private equity industries, his business training and education, and his experience serving on multiple boards over the course of his career. Robert M. Williams, Jr., Director, has served on our Board of Directors since 2017. Prior to that, he was on the board of PSA from 2015 to 2017. Mr. Williams is a senior managing director at J.H. Whitney Capital Partners and Investment Committee member. Prior to joining J.H. Whitney Capital Partners in 2000, Mr. Williams was a partner at Duff & Phelps, an advisory firm specializing in governance-related issues. Mr. Williams received his Bachelor of Arts degree in economics from Bucknell University and his Master of Business Administration degree from Columbia University. Mr. Williams’ qualifications to serve on our Board of Directors include his extensive experience in the private equity industry, his business training and education, and his experience serving on multiple boards and committees over the course of his career. Rodney D. Windley, Chairman (Class II Director), joined Aveanna in 2017 upon its formation. Prior to that, Mr. Windley served as Executive Chairman of PSA from October 2015 to 2017. Previously, Mr. Windley served as executive chairman of the board of directors of Gentiva from February 2013 to December 2014 and as a director from February 2006 in connection with the acquisition of Healthfield. Mr. Windley, Healthfield’s founder, had served as its chairman and chief executive officer since its inception in 1986 until its acquisition in 2006. Mr. Windley is the chairman of Prom Queen, LLC, a private real estate holding and restaurant development company, chairman of RDW Ventures, LLC, a private equity firm, and chairman of Gulf Coast Yacht Group, LLC, a private yacht and sport fishing dealership. Mr. Windley received his Bachelor of Arts degree in accounting and finance from the University of West Florida. Mr. Windley’s qualifications to serve on our Board of Directors include over 40 years of experience in the home health industry in various executive, operating and financial roles, and his past experiences serving as executive chairman of a publicly traded healthcare company.
DIRECTORS AND EXECUTIVE OFFICERS
Christopher R. Gordon, Director, has served on our Board of Directors since 2017. Mr. Gordon is a partner at Bain Capital. He joined the firm in 1997 and has significant experience in private equity investing, with a specialized focus in the healthcare sector. He is Co-Head of Bain Capital’s North America Private Equity business and Global Head of the Healthcare Vertical. Prior to joining Bain Capital, he was a consultant at Bain & Company. Mr. Gordon has been actively involved in and served on the board of directors of a wide spectrum of prominent healthcare companies in which Bain Capital has made investments and currently serves on the board of Cerevel Therapeutics Holdings, Inc. (Nasdaq: CERE), InnovaCare Health, Kestra Medical Technologies, Inc., and U.S. Renal Care, Inc. Mr. Gordon previously served on the boards of Grupo Notre Dame Intermedica, HCA Healthcare Inc. (Nasdaq: HCA), Quintiles Transnational Holdings Inc., Acadia Healthcare Company, Inc. (Nasdaq: ACHC), Air Medical, Beacon Health Options, Physio Control Inc., QuVa Pharma, Waystar Inc., Surgery Partners, Inc. (Nasdaq: SGRY), and Stada. He is also a founding director of the Healthcare Private Equity Association. Mr. Gordon volunteers his time and support to a variety of charitable organizations and currently serves on the board of directors of Tenacity, Inc., Boston Medical Center Health Plan, and Dana-Farber Cancer Institute Board of Trustees. Mr. Gordon received his Bachelor of Arts degree in economics from Harvard College, graduating magna cum laude, and his Master of Business Administration degree from Harvard Business School where he was a Baker Scholar. Mr. Gordon’s qualifications to serve on our Board of Directors include his extensive experience in the healthcare and private equity industries, his business training and education, and his experience serving on the boards of multiple healthcare companies over the course of his career. Steven E. Rodgers, Director, has served on our Board of Directors since 2017. Prior to that, he was on the board of PSA from 2015 to 2017. Mr. Rodgers is a managing director of Morgan Stanley, a member of the Investment Committee, the head of healthcare investing, and a partner of Morgan Stanley Capital Partners. Mr. Rodgers is a member of the Investment Committee of the Next Level Fund and of the Morgan Stanley Investment Management (MSIM) Diversity Council. Mr. Rodgers joined Morgan Stanley in 2018 from J.H. Whitney Capital Partners, where he was a senior managing director focusing on private equity investments from April 2013 to March 2018. At J.H. Whitney, Mr. Rodgers was a member of the Investment Committee and led the firm’s healthcare investing activities. Mr. Rodgers serves on the board of directors of Clarity Software, SpendMend, and U.S. HealthConnect. Mr. Rodgers also serves on the Board of Advisors of the Geisel School of Medicine and the Magnusson Center for Entrepreneurship at Dartmouth College. He previously served on the board of directors of a number of other healthcare companies, including Amisys Synertech, Herbalife, Patient Keeper, Symbion, Ovational Fertility, and 3B Scientific. Mr. Rodgers received his Bachelor of Arts degree in government from Dartmouth College and his Master of Business Administration degree from The Stanford University Graduate School of Business. Mr. Rodgers’ qualifications to serve on our Board of Directors include his extensive experience in the healthcare and private equity industries, his business training and education, and his experience serving on multiple boards and committees over the course of his career. Richard C. Zoretic, Director, has served on our Board of Directors since 2017. Prior to that, Mr. Zoretic served as executive vice president of WellPoint and president of the company’s Government Business Division from January 2013 to May 2014. Before that, Mr. Zoretic served as the chief operating officer of Amerigroup Corporation from 2007 to 2012. Earlier in his career, Mr. Zoretic held a series of positions with the Group Life and Health operations of MetLife, served in a senior leadership position at UnitedHealth Group and was a management consultant in Deloitte Consulting’s healthcare practice. Mr. Zoretic currently serves on the boards of two other public companies, Molina Healthcare, where he is a member of the audit and compliance committees, and Innovage, where he is a member of the audit committee. Mr. Zoretic previously served on the Boards of Kepro, HealthSun in Florida and Landmark Health in California. Mr. Zoretic received his Bachelor of Science degree in finance from Pennsylvania State University and attended graduate executive programs at Harvard Business School, the University of Virginia Darden School of Business and the Harvard School of Public Health. Mr. Zoretic’s qualifications to serve on our Board of Directors include his over 30 years of experience in managed health care and his past experiences serving as a senior executive at various companies in the healthcare industry. Mr. Zoretic’s term as a Class III director ends at the Meeting.
Director Nominees
Director Nominees Jeff Shaner, President and Chief Executive Officer and Class III Director, joined Aveanna in 2017 upon its formation and served as the Company’s Chief Operations Officer until his appointment as CEO on January 1, 2023. Prior to Aveanna, Mr. Shaner was chief operating officer of PSA since October 2015. Mr. Shaner began his healthcare business career in 2000 leading the operations at Total Care Inc. Mr. Shaner joined Healthfield following its acquisition of Total Care Inc. and was later appointed to lead its home health division. Mr. Shaner served as president of operations of Gentiva from August 2010 until February 2015 and as operating partner for Linden Capital/Blue Wolf Capital, a private equity firm, from February 2015 to October 2015. Mr. Shaner received his Bachelor of Arts degree in business finance and economics from the University of Pittsburgh. Mr. Shaner’s qualifications to serve on our Board of Directors include over 20 years of experience in the home health industry in various operating, financial and sales roles. Sheldon M. Retchin, M.D., M.S.P.H, Director, has served on our Board of Directors since 2017. Dr. Retchin formerly served as professor of health services management and policy in the College of Public Health and professor of medicine in the College of Medicine at Ohio State University (“OSU”) since March 2015. Dr. Retchin also served as executive vice president for health sciences at OSU and chief executive officer of Wexner Medical Center from March 2015 to May 2017. Prior to joining the faculty of OSU, Dr. Retchin was senior vice president for health sciences at Virginia Commonwealth University (“VCU”) and chief executive officer of the VCU Health System from July 2003 until February 2015. While CEO at VCU, he was also President of Virginia Premier, a large provider-sponsored Medicaid HMO. In 2015, Dr. Retchin was appointed by the U.S. Comptroller General as one of the 17 Commissioners to the Medicaid and CHIP Payment and Access Commission, where he served the maximum two terms. From 2009 until 2015, Dr. Retchin served on the board of directors of Gentiva Health Services, Inc. Dr. Retchin also currently serves as consultant and Medical Advisor to Dominion Energy, and he is a member of the Board of Directors of the National Association for Home Care & Hospice. Dr. Retchin received his Bachelor of Arts degree in psychology, his Medical Degree, and his Master of Public Health degree from the University of North Carolina at Chapel Hill, where he was also a Robert Wood Johnson Clinical Scholar. A board-certified internist, Dr. Retchin’s qualifications to serve on our Board of Directors include his extensive experience as an executive in major medical centers and appointments to several national panels related to Medicaid and Medicare programs, managed care, the cost of care, and the physician workforce. Erica Schwartz, M.D., J.D., M.P.H., Director, has served on our Board of Directors since 2021. Dr. Schwartz currently serves as President of Insurance Solutions for United Healthcare. Prior to that, she was most recently the Deputy Surgeon General for the Department of Health and Human Services, in which role she led the United States’ public health deployment in response to the COVID-19 pandemic. Dr. Schwartz spent 24 years in uniformed service, during which time she was promoted through the ranks to Rear Admiral of the U.S. Coast Guard, where she served as the Chief Medical Officer and Director of Health, Safety, and Work Life from 2015 to 2019. Previously, Dr. Schwartz served as the U.S. Coast Guard’s Chief of Health Services from 2013 to 2015 and Preventive Medicine Chief from 2005 to 2013. Dr. Schwartz is trained and board certified in Preventive Medicine. She received a bachelor’s degree in Biomedical Engineering from Brown University, an M.D. from Brown University School of Medicine, a Master of Public Health degree with a dual concentration in health services administration and occupational and environmental medicine from the Uniformed Services University of the Health Sciences, and a J.D. from the University of Maryland School of Law. She is licensed to practice medicine in Virginia and Florida and is also licensed to practice law in D.C. and Florida. Dr. Schwartz also currently serves as an independent director for Butterfly Network, a digital health company developing and implementing point-of-care ultrasound technology. Dr. Schwartz’s qualifications to serve on our Board of Directors include her extensive experience in healthcare and government service, her training and education, and her experience serving on other boards.
PROPOSAL 1—ELECTION OF DIRECTORS
PROPOSAL 1—ELECTION OF DIRECTORS The Nominating and Corporate Governance Committee recommended for nomination, and the Board of Directors nominated the following persons for election at the Meeting as Class III members of our Board of Directors.
PROPOSAL 1—ELECTION OF DIRECTORS
| Name | Term Expiring | | Dr. Sheldon M. Retchin | 2027 Annual Meeting of stockholders | | Dr. Erica Schwartz | 2027 Annual Meeting of stockholders | | Jeff Shaner | 2027 Annual Meeting of stockholders |
PROPOSAL 1—ELECTION OF DIRECTORS
The section of this Proxy Statement titled “Directors & Executive Officers” contains more information about the leadership skills and other experience that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that these nominees should serve as Class III directors of the Company. We believe that each of these directors possesses the experience, skills, and qualities to fully perform his or her duties as a director and contribute to our success. Our directors have been nominated because they possess the highest standards of personal integrity, interpersonal and communication skills, are highly accomplished in their fields, understand the interests and issues that are important to our stockholders, and are able to dedicate sufficient time to fulfilling their obligations as directors. Our directors as a group complement each other with their respective experiences, skills, and qualities. While our directors make up a diverse group in terms of age, gender and professional experience, together they comprise a cohesive body in terms of Board process and collaboration.
Board of Directors
Board of Directors Our Board of Directors is committed to increasing the number of women on the Board as board turnover occurs from time to time. Accordingly, consideration of the number of women who are directors, along with consideration of whether other diverse attributes are sufficiently represented on the Board of Directors, is an important component of the selection process for new members of the Board of Directors. For all potential Board members, we consider educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, the ability to represent the best interests of our stockholders. In addition, the Nominating and Corporate Governance Committee, in accordance with its policies and procedures for director candidates, considers whether a proposed director candidate would help achieve a Board composition that represents a diversity of background and experience, inclusive of race, ethnicity, age, gender identity, gender expression and sexual orientation. We expect to achieve additional gender diversity on the Board over time through Board vacancies, expansion or otherwise. The following matrix provides additional information about our board diversity as of December 30, 2023.
Board of Directors
| TOTAL NUMBER OF DIRECTORS – 10 | | | | | | | Female | Male | Nonbinary | Did Not Disclose Gender | | PART 1: Gender Identity | | | | | | Directors | 1 | 9 | | | | PART 2: Demographic Background | | | | | | African American or Black | 1 | 1 | | | | Alaskan Native or Native American | – | – | – | – | | Asian | – | – | – | – | | Hispanic or Latinx | – | – | – | – | | Native Hawaiian or Pacific Islander | – | – | – | – | | White | – | 8 | – | – | | Two or More Races or Ethnicities | – | – | – | – | | LGBTQ+ | – | – | – | – | | Did Not Disclose Demographic Background | – | – | – | – |
Compensation Committee
| • | making recommendations to our Board of Directors regarding the compensation of our directors; and |
Introduction
| • | Non-equity Incentive Plan Compensation |
Introduction
| • | Long-term incentives (equity awards) |
Executive Compensation Objectives and Philosophy
| • | attract, motivate and retain executive talent willing to commit to long-term stockholder value creation; and |
Executive Compensation Objectives and Philosophy
| Fiscal Year 2023 NEO Target Compensation Structure Summary | | | Component | Summary | | Base Salary | • Mr. Shaner: $550,000 • Mr. Drake: $400,000 • Mr. Reisz: $400,000 | | Target Annual Bonus | The following target bonus opportunities were approved for fiscal year 2023. • Mr. Shaner: 100% • Mr. Drake: 60% • Mr. Reisz: 60% |
Executive Compensation Objectives and Philosophy
| Fiscal Year 2023 NEO Target Compensation Structure Summary | | | Component | Summary | | Long-Term Incentives | In order to secure our senior management team for the long term and to focus their decision-making to positively impact long-term stockholder value, on February 14, 2023 we made our annual long-term incentive grant, consisting of PSUs and RSUs to members of senior management, including our NEOs. The equity awards granted to our NEOs as compensation for fiscal year 2023 consisted of 50% performance stock units and 50% time-based restricted stock units. The RSUs will cliff vest three years from the grant date, or February 14, 2026. The PSUs are based on annual Adjusted EBITDA performance which can be met in any one-year period over the three years subsequent to the grant date. Earned amounts become vested at the end of three years. PSUs and RSUs generally will be forfeited if the recipient voluntarily terminates employment prior to the vesting date. Our fiscal year 2023 NEO RSU grants were as follows: • Mr. Shaner: 421,094 RSUs with a grant date value of $530,578 • Mr. Drake: 187,500 RSUs with a grant date value of $236,250 • Mr. Reisz: 187,500 RSUs with a grant date value of $236,250 Our fiscal year 2023 NEO PSU grants were as follows: • Mr. Shaner: 421,094 PSUs with a grant date value of $530,578 • Mr. Drake: 187,500 PSUs with a grant date value of $236,250 • Mr. Reisz: 187,500 PSUs with a grant date value of $236,250 |
Role of the Compensation Committee
| • | reviewing and assessing competitive market data; |
Role of the Compensation Committee
| • | reviewing and approving incentive plan goals, achievement levels, objectives and compensation recommendations for the NEOs and other executive officers; |
Role of the Compensation Committee
| • | approving any changes to the total compensation programs for the NEOs including, but not limited to, base salary, annual bonuses, long-term incentives and benefits programs. |
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee retained the services of Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), an independent compensation consultant for assistance in determining 2023 compensation levels. The Compensation Committee retains sole authority to hire or terminate any compensation consultant, approve its professional fees, determine the nature and scope of its services and evaluate its performance. The Compensation Committee makes all final decisions regarding executive compensation.
Role of Peer Companies and Competitive Market Data
Role of Peer Companies and Competitive Market Data The following criteria was considered for the development of a peer group for the 2023 compensation study. The 2023 compensation study was used to assist with total compensation levels for fiscal year 2023.
Role of Peer Companies and Competitive Market Data
| • | Industry: companies similar to Aveanna, based on publicly traded healthcare companies in the Global Industry Classification System (GICS); |
Role of Peer Companies and Competitive Market Data
| • | Company size: Approximately one-third to three-times Aveanna’s annual revenues, with a secondary focus on market capitalization; |
Role of Peer Companies and Competitive Market Data
| • | Reverse peers: Companies considering Aveanna a peer; |
Role of Peer Companies and Competitive Market Data
| • | Peers of peers: Companies used in the peer groups of potential peer companies; and |
Role of Peer Companies and Competitive Market Data
| • | Competitors: Companies that compete with Aveanna for business and management talent. |
Role of Peer Companies and Competitive Market Data
Utilizing the above criteria, Aon identified the following 14 peer companies for the 2023 compensation study:
Role of Peer Companies and Competitive Market Data
| • Acadia Healthcare Company, Inc. • Addus HomeCare Corporation • Amedisys, Inc. • AMN Healthcare Services, Inc. | • ModivCare Inc. • National HealthCare Corporation • Option Care Health, Inc. • Periatrix Medical Group, Inc. | | • Chemed Corporation • Cross Country Healthcare, Inc. • Enhabit, Inc. | • RadNet, Inc. • Surgery Partners, Inc. • The Pennant Group, Inc. |
Role of Peer Companies and Competitive Market Data
The Compensation Committee used competitive compensation data from the 2023 total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements. The Compensation Committee does not benchmark specific compensation elements or total compensation to any specific percentile relative to the peer companies or the broader U.S. market. Instead, the Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as the Company’s overall and individual performance, scope of responsibility, critical needs and skill sets, leadership potential and succession planning.
Annual Non-Equity Incentive Compensation
Annual Non-Equity Incentive Compensation Our NEOs are eligible to earn annual non-equity incentive compensation based on fiscal year performance. The annual non-equity incentive compensation plan is designed to reward our executives for superior annual performance in key areas that we believe create long-term value for stockholders. For fiscal year 2023, the Compensation Committee approved the following primary performance metric for our executive team:
Annual Non-Equity Incentive Compensation
| • | Revenue (30% of target) and adjusted EBITDA (70% of target) before consideration of any results of operations contributed by any companies we acquired in 2023 (1). |
Annual Non-Equity Incentive Compensation
| (1) We believe revenue and adjusted EBITDA before consideration of any results of operations contributed by companies we acquired in 2023 is an important metric for measuring performance levels because it focuses on core operating results before any results contributed by acquisitions. Revenue is measured in accordance with U.S. generally accepted accounting principles (“GAAP”) and excludes the results of operations of any companies acquired in 2023. Adjusted EBITDA for these purposes is measured in accordance with the calculations of our Adjusted EBITDA as disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 and excludes the results of operations of any companies acquired in 2023. |
Annual Non-Equity Incentive Compensation
Upon completion of the fiscal year, the Compensation Committee determines achievement levels versus the pre-approved performance targets. The Compensation Committee also performs a comprehensive review of the Company’s overall financial performance. When performance falls between an achievement threshold, target and maximum performance levels, earned amounts are interpolated on a straight-line basis between points to determine compensation. Performance achievement below the threshold level generally will result in a lower bonus amount, in the Compensation Committee’s discretion, or no bonus at all. The Compensation Committee retains discretion to make adjustments as needed to incorporate the results of its comprehensive review. Target award opportunities: The following target non-equity incentive compensation (as a percentage of base salary) was approved for fiscal year 2023.
Annual Non-Equity Incentive Compensation
| Name | Fiscal Year 2023 Target (1) (% of Salary) | Change from Fiscal Year 2022 | | Jeff Shaner | 100% | 33.3% | | Shannon Drake | 60% | 0% | | Ed Reisz | 60% | 0% |
Annual Non-Equity Incentive Compensation
| (1) Participants may earn from 50% to 200% of target non-equity incentive compensation based on performance achievement between the threshold and maximum levels. Payout opportunities for performance between the threshold, target and maximum levels are interpolated on a straight-line basis. The threshold represents 50% of the target amount; the target level represents 100% of the target amount, and the maximum represents 200% of the target amount. |
Annual Non-Equity Incentive Compensation
Based upon the Compensation Committee’s comprehensive review and evaluation of Aveanna’s performance in 2023 with respect to the aforementioned metrics, the following incentives were approved for fiscal year 2023:
Annual Non-Equity Incentive Compensation
| Approved Fiscal Year 2023 Actual Non-equity Incentive Compensation | | | | | Name | Fiscal Year 2023 Target Incentive (% of Salary) | Fiscal Year 2023 Actual Incentive Earned (% of Target) | Fiscal Year 2023 Actual Incentive Earned | | Jeff Shaner | 100% | 100% | $550,000 | | Shannon Drake | 60% | 100% | $240,000 | | Ed Reisz | 60% | 100% | $240,000 |
Long-Term Equity Incentive Plans
Long-Term Equity Incentive Plans In addition to base salary and annual incentive compensation, each of our Named Executive Officers is provided long-term equity incentive compensation. The use of long-term equity incentives creates a link between executive compensation and our long-term performance, thereby creating alignment between executive and stockholder interests.
2021 Plan
2021 Plan We have adopted the 2021 Plan, which became effective on April 28, 2021, the day the registration statement filed in connection with our initial public offering became effective. On and after the 2021 Plan’s effectiveness, no new awards may be granted under our previous stock incentive plan (the “2017 Plan”). Shares of our common stock that are subject to awards that are forfeited and/or cancelled under the 2017 Plan on or after the 2021 Plan’s effectiveness shall be available to be issued as part of the 2021 Plan. The 2021 Plan is designed to provide the Board and the Compensation Committee with flexibility in terms of the types of awards that can be granted and the underlying terms and conditions of such awards. The material terms of the 2021 Plan are summarized below. Share Reserve. The maximum aggregate number of shares of common stock that may be subject to awards under the 2021 Plan is 14,413,135 shares (the “Initial Share Pool”). The 2021 Plan contains an automatic share increase feature pursuant to which the 2021 Plan share pool will automatically increase, commencing on January 1, 2022 and ending on and including January 1, 2031 in an amount equal to the lesser of (i) two percent (2%) of the number of outstanding shares on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Board; provided that, the maximum number of shares that may be issued upon the exercise of incentive stock options shall equal the Initial Share Pool. Administration. Unless the Board assumes authority for administration, the Compensation Committee administers the 2021 Plan, and the 2021 Plan provides that the Board or Compensation Committee may delegate its authority to grant awards to employees other than executive officers and certain senior executives of the company to a committee consisting of one or more members of our Board of Directors or one or more of our officers, other than awards made to individuals who are subject to Section 16 of the Exchange Act, or officers or directors to whom authority to grant or amend awards has been delegated hereunder, which must be approved by our full Board of Directors. Eligibility. Incentive stock options (ISOs), nonqualified stock options, stock appreciation rights (SARs), restricted stock and all other stock-based and cash-based awards under the 2021 Plan may be granted to individuals who are then our officers, employees or consultants or are the officers, employees or consultants of certain of our subsidiaries. Such awards also may be granted to our directors. Only Aveanna employees may be granted ISOs. Awards. The 2021 Plan provides that the administrator may grant or issue ISOs, nonqualified stock options, SARs, restricted stock, restricted stock units, other stock- or cash-based awards and dividend equivalents, or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award. Director Limit. The 2021 Plan provides that the sum of the grant date fair value of equity-based awards and the amount of any cash-based awards or other fees granted to a non-employee director during any calendar year shall not exceed $750,000. Change in Control. In the event of a change in control, each outstanding award will be treated as the Compensation Committee determines in its sole discretion and on such terms and conditions as the Compensation Committee deems appropriate including, without limitation, assumption or substitution of awards by the acquirer, termination of awards or cash-out of awards. In the event the acquirer does not assume or substitute awards granted, prior to the consummation of such transaction, awards issued under the 2021 Plan will be subject to accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as applicable. The Compensation Committee may also make appropriate adjustments to awards under the 2021 Plan and is authorized to provide for the acceleration, cash-out, termination, assumption, substitution or conversion of such awards in the event of a change in control or certain other unusual or nonrecurring events or transactions. Adjustments of Awards. In the event of any stock dividend or other distribution, stock split, forward stock split, reorganization, combination or exchange of shares, merger, consolidation, split-up, spin-off, recapitalization, repurchase or any other corporate event affecting the number of outstanding shares of our common stock, the administrator will make appropriate, proportionate adjustments pursuant to criteria set forth in the 2021 Plan. Amendment and Termination. The administrator may terminate, amend or modify the 2021 Plan at any time and from time to time. However, we must generally obtain stockholder approval to the extent required by applicable law, rule or regulation (including any applicable stock exchange rule). No awards will be granted pursuant to the 2021 Plan after the earlier of the tenth anniversary of (i) the effective date of the 2021 Plan and (ii) the date the 2021 Plan was approved by the Company’s stockholders.
Long-Term Incentives – Fiscal Year 2022 Grants
Long-Term Incentives – Fiscal Year 2022 Grants In the first quarter of 2022, the Compensation Committee, with the assistance of Aon, approved a new long-term incentive (“LTI”) structure for fiscal year 2022, which consists of 50% performance stock units and 50% time-based restricted stock units for all executive officers and some senior management groups, and 100% time-based restricted stock units for certain other senior management groups.
Long-Term Incentives – Fiscal Year 2022 Grants
| • | Performance shares: weighted 50% on annual Adjusted EBITDA performance and 50% on three-year relative total shareholder return performance. Our relative total shareholder return will be compared to the healthcare services and healthcare facilities companies in the S&P Healthcare Services Select Index. Earned amounts become vested at the end of three years. |
Long-Term Incentives – Fiscal Year 2022 Grants
| • | Restricted stock units: vesting occurs on a cliff basis three years after the grant date. |
Long-Term Incentives – Fiscal Year 2022 Grants
| • | Certain other officers and personnel will be eligible to receive such RSUs. |
Long-Term Incentives – Fiscal Year 2023 Grants
Long-Term Incentives – Fiscal Year 2023 Grants In the first quarter of fiscal year 2023, the Compensation Committee, with the assistance of Aon, approved a new long-term incentive (“LTI”) structure for fiscal year 2023, which currently consists of 50% performance stock units and 50% time-based restricted stock units for all executive officers and some senior management groups, and 100% time-based restricted stock units for certain other senior management groups.
Long-Term Incentives – Fiscal Year 2023 Grants
| • | Performance shares: weighted on annual Adjusted EBITDA performance which can be met in any one-year period over the three years subsequent to the grant date. |
Long-Term Incentives – Fiscal Year 2023 Grants
| • | Restricted stock units: vesting occurs on a cliff basis three years after the grant date. |
Long-Term Incentives – Fiscal Year 2023 Grants
| • | Certain other officers and personnel will be eligible to receive such RSUs. |
Long-Term Incentives – Fiscal Year 2023 Grants
See “—Executive Compensation Objectives and Philosophy—Fiscal Year 2023 NEO Target Compensation Structure Summary—Long-Term Incentives” for further details on the LTI grants to our NEOs for fiscal year 2023.
Historical Stock Option Awards
Historical Stock Option Awards Stock options held by our NEOs contain the following vesting terms: 50% based upon time vesting, and 50% based upon performance vesting. Time-based vesting occurs ratably over five years. Completion of the Company’s IPO in April 2021 resulted in the Company’s performance-vesting options becoming eligible to potentially vest, and such vesting is based upon the achievement of certain Aveanna share prices as set forth below in further detail.
Senior Management Retention Plan
Senior Management Retention Plan In the second quarter of fiscal year 2023, the Compensation Committee approved a new senior management retention plan for certain field and corporate executives in response to the deterioration in the value of equity compensation resulting from the decline in the Company’s share price. The plan consists of 100% performance stock units, the number of which will be determined using the share price if the Company reaches certain revenue and adjusted EBITDA targets measured by four consecutive quarters prior to June 30, 2026. Performance stock units become vested at the time of issuance.
Compensation Risk Assessment
| • | the Compensation Committee retained an independent compensation consultant, Aon, to assist with 2023 compensation decisions; |
Compensation Risk Assessment
| • | the Compensation Committee approves the annual non-equity incentive compensation plan’s financial goals at the start of the fiscal year, and approves the performance achievement level and final payments earned after the end of the fiscal year; |
Compensation Risk Assessment
| • | the annual non-equity incentive compensation plan has capped potential payouts at 200% of the target opportunity to mitigate potential windfalls; |
Compensation Risk Assessment
| • | we utilize a mix of cash and equity incentive programs, and all equity awards granted to our NEOs have multi-year vesting; |
Compensation Risk Assessment
| • | we utilize competitive general and change-in-control severance programs to help ensure executives continue to work towards our stockholders’ best interests in light of potential employment uncertainty; and |
Other Practices, Policies and Guidelines
Other Practices, Policies and Guidelines We provide a comprehensive offering of benefit plans to our employees, including access to insurance for major medical, dental, vision, life, accidental death and dismemberment, short-term disability and long-term disability, as well as healthcare and flexible spending accounts, wellness programs and various other voluntary benefit programs. These benefit programs are generally available to all our eligible full and part time employees. We offer one plan, our Deferred Compensation Plan, as a “top hat” benefit plan solely for our senior executives. 401(k) Plan. We maintain a defined contribution plan that is tax-qualified under Section 401(k) of the Code. Our 401(k) Plan is offered on a nondiscriminatory basis to all full-time and part-time regular and temporary employees, except those executive officers eligible for the Deferred Compensation Plan, with no minimum hour requirement for participation. Subject to certain limitations imposed by the Code, the 401(k) Plan permits eligible employees to defer receipt of portions of their eligible compensation by making deferral contributions, including after-tax Roth and catch-up contributions. Participating employees may contribute up to 100% of their eligible compensation, but not more than the statutory limits. Participants are eligible to receive the value of their vested account balance upon termination of employment. Participants are always 100% vested in their voluntary contributions. Vesting of matching contributions, if any, is subject to our vesting schedule at 20% per year for each full year of service during which an employee works 1,000 hours, or upon the attainment of normal retirement age of the participant. Employer matching contributions to the 401(k) Plan are made in an amount equal to 50% of each participant’s pre-tax contribution (up to a maximum of 5% of the participant’s annual eligible compensation), subject to certain other limits. The Compensation Committee believes that matching contributions assist us in attracting and retaining talented employees and executives. The 401(k) Plan provides an opportunity for participants to save money for retirement on a tax-deferred basis and to achieve financial security, thereby promoting retention. Deferred Compensation Plan. Effective January 1, 2023, we implemented a Deferred Compensation Plan (the “DC Plan”) for certain of our executives. The DC Plan is a nonqualified retirement plan that covers select employees, including our named executive officers. The plan provides eligible employees the opportunity to defer compensation and is offered as an alternative to the Company’s 401(k) plan. Participants in the DC Plan are not eligible to contribute to the 401(k) Plan. Under the DC Plan, participants may contribute up to 50% of their base salaries and up to 50% of their annual bonus on a pre-tax basis. The DC Plan permits us to make matching contributions and discretionary contributions, as determined by the Compensation Committee. In 2023, we are providing matching contributions using the same formula as provided under the 401(k) Plan, in an amount equal to 50% of each participant’s pre-tax contribution (up to a maximum of 5% of the participant’s annual eligible compensation), subject to the annual compensation limit for qualified plans. Participants become 20% vested in our matching contributions each year. Participants also generally become fully vested upon termination of employment due to their death, disability, or attainment of age 55 with five years of service, and upon a change in control of the Company. Additionally, in order to comply with Section 409A of the Internal Revenue Code, the DC Plan limits the timing of distributions and deferral elections. A participant is always 100% vested in his or her own contributions. Contributions under the DC Plan are credited to a bookkeeping account for the participant. Each account is adjusted for earnings and losses based on the performance of investment options, principally mutual funds, the participant selects. Subject to the requirements of Section 409A of the Internal Revenue Code, distributions under the DC Plan are generally made in a lump sum or up to ten annual installments, as the participant elects, following termination of employment. All pre-tax contributions are unfunded and payable from our general assets, although we have set aside funds in a trust to help us pay those benefits. The assets in this trust are subject to the claims of our general creditors. Employee Stock Purchase Plan. We maintain an Employee Stock Purchase Plan, which we refer to as our ESPP. The ESPP is designed to allow our eligible employees to purchase shares of our common stock with their accumulated payroll deductions at certain stated times during stated offering periods. The ESPP is intended to qualify under Section 423 of the Code. The material terms of the ESPP are summarized below. ESPP Administration. Subject to the terms and conditions of the ESPP, the Board of Directors has delegated administration of the ESPP to the Compensation Committee. Our Compensation Committee has in turn delegated administrative tasks and limited decision-making authority under the ESPP to the Company’s Retirement Committee, made up of senior officers, to assist in the administration of the ESPP. The Compensation Committee has final discretionary authority to administer and interpret the ESPP. Interpretations and constructions of the administrator of any provision of the ESPP or of any rights thereunder will be conclusive and binding on all persons. We bear all expenses and liabilities incurred by the Compensation Committee members and the other ESPP administrators in this capacity. ESPP Share Reserve. The initial share reserve for grants under the ESPP was equal to 3% of the Company’s outstanding common shares as of the ESPP’s effective date (subject to customary anti-dilution adjustments). In addition, the ESPP includes an “evergreen” share replenishment feature whereby the total number of shares available for issuance under the ESPP will be increased on the first day of each fiscal year by the least of (i) that number equal to 1% of the issued and outstanding shares of the Company as of the ESPP’s effective date, (ii) 1% of the Company’s outstanding common shares as of the last day of the prior fiscal year, or (iii) such lesser amount determined by Board. ESPP Eligibility. All U.S. employees of the Company and its subsidiaries, who have more than 90 days of service as of an offering period, subject to certain limitations under Section 423 of the Code, are eligible to purchase shares of our common stock under our ESPP, subject to certain excepts as set forth in the ESPP. ESPP Participation. Employees enroll under the ESPP by completing an electronic payroll deduction permitting the deduction from their compensation of at least 1% of their compensation but not more than 15% (or such greater percentage as the Compensation Committee may establish from time to time before an offering date) of their compensation. However, a participant may not purchase more than 1500 shares per offering period as set forth in the ESPP and up to a fair market value of $25,000 of Company shares per calendar year under all “employee stock purchase plans” of the Company, as determined in accordance with Section 423 of the Code. Shares purchased under the ESPP are subject to a 6 month lock up period. ESPP Offering. Under the ESPP, participants are offered the option to purchase shares of our common stock at a discount during a series of successive offering periods, the duration and timing of which will be determined by the Compensation Committee. In fiscal year 2023, each offering shall be a consecutive six (6) month period unless otherwise determined by the Compensation Committee. However, in no event may an offering period be longer than 27 months in length.
Summary Compensation
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Jeff Shaner | 2023 | 550,000 | - | 1,811,157 | - | 550,000 | 1,422 | 2,912,579 | | President and Chief Executive Officer | 2022 | 550,000 | - | 1,389,095 | - | - | 1,422 | 1,940,517 | | Shannon Drake(4) | 2023 | 400,000 | - | 1,222,500 | - | 240,000 | 1,138 | 1,863,638 | | Former Chief Legal Officer and Secretary | 2022 | 400,000 | - | 618,560 | - | - | 1,318 | 1,019,698 | | Ed Reisz | 2023 | 400,000 | - | 1,222,500 | - | 240,000 | 9,388 | 1,871,888 | | Chief Administrative Officer | 2022 | 400,000 | - | 511,345 | - | - | 1,124 | 912,469 |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning outstanding awards granted held by the Named Executive Officers as of December 30, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | | | | | | | | | | Grant Date | Exercisable | Unexercisable (1) | Option Exercise Price | Option Expiration Date (2) | Grant Date | Number of Shares or Units That Have Not Yet Vested (#) (3) | Market Value of Shares or Units That Have Not Yet Vested ($) (4) | Equity Incentive Plan Awards: Number of Unearned Shares, Unites or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Unites or Other Rights That Have Not Vested | | Jeff Shaner | 12/1/2017 | 1,206,778 | 1,206,778 | 4.88 | 11/30/2027 | 12/29/2021 | 180,000 | 482,400 | | | | | 12/1/2017 | 709,870 | - | 9.76 | 11/30/2027 | 2/14/2022 | 136,664 | 366,260 | - | - | | | | | | | | 2/14/2023 | 421,094 | 1,128,532 | 421,094 | 1,128,532 | | Shannon Drake | 12/1/2017 | 141,974 | 141,974 | 4.88 | 11/30/2027 | 12/29/2021 | 125,000 | 335,000 | | | | | 11/24/2020 | 30,750 | 71,750 | 15.00 | 11/23/2030 | 2/14/2022 | 60,852 | 163,083 | - | - | | | | | | | | 2/14/2023 | 187,500 | 502,500 | 187,500 | 502,500 | | Ed Reisz | 12/1/2017 | 709,870 | 709,870 | 4.88 | 11/30/2027 | 12/29/2021 | 125,000 | 335,000 | | | | | 11/24/2020 | 30,750 | 71,750 | 15.00 | 11/23/2030 | 2/14/2022 | 50,305 | 134,817 | - | - | | | | | | | | 2/14/2023 | 187,500 | 502,500 | 187,500 | 502,500 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Stock options with time-based vesting occurs ratably over five years. Mr. Drake and Mr. Reisz each held 20,500 of such options. Completion of the Company’s IPO in April 2021 resulted in the Company’s performance-vesting options becoming eligible to potentially vest, and such vesting is based upon the achievement of certain Aveanna share prices. Mr. Shaner, Mr. Drake, and Mr. Reisz held 1,206,778, 193,224 and 761,120, respectively, of such options at December 30, 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (2) The contractual term of all stock option awards under the 2021 Plan is ten years. |
Outstanding Equity Awards at Fiscal Year-End
| (3) Represents (i) RSU awards granted during fiscal year 2022 and 2023, pursuant to our 2021 Plan, net of forfeitures; and (ii) RSUs granted on December 29, 2021. The RSUs granted in fiscal years 2022 and 2023 are subject to three-year cliff vesting and the RSUs granted on December 29, 2021 are subject to four-year cliff vesting. |
Outstanding Equity Awards at Fiscal Year-End
| (4) Market value is based upon Aveanna’s closing stock price on the last day of trading for fiscal year 2023. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested There were no exercises of stock options by the named executive officers in fiscal year 2023, nor did any restricted stock units held by the named executive officers in 2023 become vested.
Pay Versus Performance
Pay Versus Performance
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO ($) (1) (a) | Compensation Actually Paid to PEO ($) (2) (b) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (3) (c) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) (d) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) (4) (e) | Net Loss ($) (5) (f) | | 2023 | 2,912,579 | 5,688,936 | 1,867,763 | 3,961,605 | 17.87 | (134,524) | | 2022 | 5,312,967 | (2,617,361) | 2,397,134 | (3,033,177) | 5.20 | (662,034) | | 2021 | 3,239,506 | (6,685,321) | 2,770,172 | (3,417,587) | 49.33 | (117,044) |
Pay Versus Performance
| (1) Mr. Shaner served as Principal Executive Officer (“PEO”) for fiscal year 2023. Tony Strange served as the PEO for fiscal years 2022 and 2021, and Mr. Strange’s separation from employment with the Company was effective December 31, 2022. |
Pay Versus Performance
| (2) SEC Rules require certain adjustments be made to the totals set forth in the Summary Compensation Table of this proxy statement and in the definitive proxy statement on Schedule 14A filed with the SEC on March 31, 2023 to determine “compensation actually paid” as reported in the Pay Versus Performance Table above. “Compensation actually paid” does not represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. Generally , “compensation actually paid” is calculated as Summary Compensation Table total compensation adjusted to include the fair market value of equity awards as of the applicable fiscal year end, or if earlier, the vesting date (rather than the grant date). NEOs do not participate in a defined benefit plan, so no adjustment for pension benefits is included in the table below. The following table details these adjustments: |
Pay Versus Performance
| Year | Executive(s) | Summary Compensation Table Total ($) | Subtract Stock Awards ($) | Add Year-end Equity Value ($) | Change in Value of Prior Equity Awards ($) | Fair Value at Vesting Date of Awards Granted and Vested in Same Year ($) | Change in Fair Value of Awards Granted in PY that Vested in CY | Subtract Value of Equity Awards that Failed to Meet Vesting Conditions ($) | Compensation Actually Paid ($) | | 2023 | PEO | 2,912,579 | (1,337,057) | 2,843,898 | 1,322,814 | - | - | (53,298) | 5,688,936 | | | Non-PEO NEOs | 1,867,763 | (472,500) | 1,924,449 | 657,900 | - | 5,668 | (21,675) | 3,961,605 | | 2022 | PEO | 5,312,967 | (2,834,112) | 123,514 | (4,235,791) | 104,718 | (1,088,657) | - | (2,617,361) | | | Non-PEO NEOs | 2,397,134 | (1,470,004) | 65,338 | (3,431,849) | 26,180 | (619,976) | - | (3,033,177) | | 2021 | PEO | 3,239,506 | (1,737,760) | - | (8,173,721) | - | (13,346) | - | (6,685,321) | | | Non-PEO NEOs | 2,770,172 | (1,828,259) | 804,750 | (5,130,812) | - | (33,438) | - | (3,417,587) |
Pay Versus Performance
| (3) Average total compensation of the Non-PEO NEOs as reported in the Summary Compensation Table of this proxy statement and in the definitive proxy statement on Schedule 14A filed with the SEC on March 31, 2023. The non-PEO NEOs for fiscal years 2021 and 2022 were Mr. Rodney Windley, Mr. Shaner, Mr. David Afshar and Mr. Drake, and the non-PEO NEOs for fiscal year 2023 were Mr. Reisz and Mr. Drake. |
Pay Versus Performance
| (4) Total shareholder return in the covered fiscal year based on a fixed investment of $100 as of December 31, 2020. |
Pay Versus Performance
| (5) Net loss as reported in our Annual Reports on Form 10-K. |
Narrative to Pay versus Performance Table
Narrative to Pay versus Performance Table Compensation Actually Paid versus Total Shareholder Return Compensation Actually Paid to the PEO and Average Compensation Actually Paid to Non-PEO NEOs in the covered fiscal years was negative in fiscal years 2021 and 2022 and positive in fiscal year 2023, whereas Total Shareholder Return was negative in all the comparable periods. Compensation Actually Paid versus Net Loss Compensation Actually Paid to the PEO and Average Compensation Actually Paid to Non-PEO NEOs in the covered fiscal years was negative in fiscal years 2021 and 2022 and positive in fiscal year 2023. The Company reported a net loss in all the comparable periods.
NAMED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT PROVISIONS: POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
NAMED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT PROVISIONS: POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL We have entered into Employment Agreements with each of our Named Executive Officers. Each of the Employment Agreements has an initial three-year term of employment and automatically renews for additional one-year periods unless otherwise terminated by either of the parties to the Employment Agreement. The Employment Agreements provide that each executive is entitled to a minimum annual base salary (subject to annual review and increases for merit performance) and is entitled to participate in all incentive, savings, retirement and welfare benefit plans generally made available to our senior executive officers. Each of these executives has an opportunity to earn an annual non-equity incentive award based upon achievement of performance goals to be established by the Board of Directors. In addition, each of the executives is entitled to fringe benefits generally made available to our senior executive officers, and will be eligible, in the sole discretion of the Board of Directors, for equity grants under the 2021 Plan. The Employment Agreements may be terminated by us at any time with or without “Cause” (as defined therein), or by the executive with or without “Good Reason” (as defined therein). The Employment Agreements also terminate automatically upon the voluntary termination, death or disability of the executive. Depending on the reason for the termination and when it occurs, the executive will be entitled to certain severance benefits, as described below.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Consistent with the Company’s independent director compensation policy, effective January 1, 2021, our independent directors receive an annual retainer of $70,000. Our compensated independent directors are Victor F. Ganzi, Sheldon M. Retchin, Steven E. Rodgers, Erica Schwartz, Rodney D. Windley and Richard C. Zoretic. In addition, the Chairmen of the Company’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Clinical Quality Committee each receive an additional annual retainer of $25,000, $15,000, $12,000 and $12,000, respectively. Independent directors also receive $2,000 per Board of Directors or committee meeting attended in-person and $750 per meeting attended virtually. Independent directors are reimbursed for reasonable expenses incurred in attending Board of Directors meetings and committee meetings, as well as with any director education programs they attend relating to their service on our Board of Directors. In addition, each compensated independent director receives an annual grant of deferred restricted stock units of the Company valued at approximately $130,000, which is generally awarded following the Company’s May Board of Directors meeting. Each grant of restricted stock to an independent director fully vests as of the grant date, pursuant to the terms of the 2021 Plan. Effective January 1, 2023, the Board Chairman receives an annual retainer of $90,000 and an annual deferred restricted stock unit grant valued at approximately $150,000, to be awarded in conjunction with the awards of other compensated directors. The following table shows the value of all cash and equity-based compensation paid to the non-employee members of our Board of Directors during the fiscal year ended December 30, 2023.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) | Total ($) | | Victor F. Ganzi | $95,000 | $130,000 | $ - | $225,000 | | Christopher R. Gordon (2) | $ - | $- | $ - | $- | | Devin O’Reilly (2) | $ - | $- | $ - | $- | | Sheldon M. Retchin, M.D., M.S.P.H. | $94,500 | $130,000 | $ - | $224,500 | | Steven E. Rodgers | $90,000 | $130,000 | $ - | $220,000 | | Erica Schwartz, M.D., J.D., M.P.H. | $76,000 | $130,000 | $ - | $206,000 | | Robert M. Williams, Jr. (2) | $ - | $- | $ - | $- | | Rodney D. Windley | $120,500 | $150,000 | $ - | $270,500 | | Richard C. Zoretic | $82,500 | $130,000 | $ - | $212,500 |
DIRECTOR COMPENSATION
| (1) Amounts in this column reflect the aggregate grant date fair value of restricted stock units, calculated in accordance with FASB ASC Topic 718, utilizing the assumptions discussed in the footnotes to our audited consolidated financial statements. All restricted stock units granted to independent directors on January 14, 2023 will vest on January 14, 2024, the one-year anniversary of the date of grant. |
DIRECTOR COMPENSATION
| (2) Directors affiliated with our Sponsors did not receive any compensation from Aveanna for fiscal year 2023. |