DEF 14A of Chemed Corp, Apr 8, 2024

DEF 14A of Chemed Corp

Filed Apr 8, 2024 · FY20230001562762-24-000082

Open on EDGAR

  1. proposal 1 - ELECTION OF DIRECTORS

    proposal 1 - ELECTION OF DIRECTORS In the election of directors, every stockholder has the right to vote each share of Capital Stock owned by such stockholder on the record date for as many persons as there are directors to be elected. Ten directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified in accordance with our bylaws. Cumulative voting is not permitted. To be elected in an uncontested election, each director must receive the affirmative vote of the majority of the votes cast at the Annual Meeting. The number of votes cast “FOR” a nominee’s election must exceed the number of votes cast “AGAINST” his or her election. Abstentions and broker non-votes shall not be counted as votes cast. As required by the Company’s bylaws, each incumbent director nominee has submitted an irrevocable letter of resignation as director that becomes effective if he or she does not receive the affirmative vote of the majority of the votes cast at the Annual Meeting and the Board of Directors accepts the resignation. If an incumbent director is not re-elected, the Nominating Committee will consider the director’s resignation and recommend to the Board of Directors the action to be taken with respect to such resignation. The Board of Directors will decide the action to be taken with respect to such resignation no later than 90 days following the certification of the voting results. The Company will publicly disclose the Board of Directors’ decision within four business days, providing an explanation of the process by which the Board reached their decision and, if applicable, the reason for not accepting the director’s resignation. Any director whose resignation is so evaluated and decided upon will not participate in the Nominating Committee’s recommendation or Board of Directors’ action regarding whether to accept the resignation offer.

  2. NOMINEES

    NOMINEES Unless otherwise indicated by your proxy card, if you return a validly completed and executed proxy card or vote your proxy card by telephone or via the Internet, your shares will be voted FOR the nominees named below. All ten nominees named below are current directors standing for re-election, all of whom were elected at the Annual Meeting of Stockholders held on May 15, 2023. As of the date of this Proxy Statement, the Board has no reason to believe that any of the nominees named below will be unable or unwilling to serve. Each nominee named below has consented to being named in this Proxy Statement and to serve if elected. The following paragraphs provide information as of the date of this proxy statement about each nominee. As discussed more fully in “Corporate Governance – Committees and Meetings of the Board – Nominating Committee” below, the Board seeks independent directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. Candidates shall have substantial experience or shall have achieved a high level of distinction in their fields. Certain individual qualifications and skills of our nominees that contribute to the Board’s effectiveness as a whole in performing its oversight responsibilities are described below. The candidates for the Board are comprised of two women and eight men. Of the ten directors, nine identify as White, and one male director identifies as African American or Black.

  3. NOMINEES

    | Kevin J. McNamara Director since 1987 Age: 70 | Mr. McNamara’s experience, qualifications, attributes and skills include serving as President and Chief Executive Officer of the Company. He has held these positions since August 1994 and May 2001, respectively. Previously, he served as Executive Vice President, Secretary and General Counsel from November 1993, August 1986 and August 1986, respectively, to August 1994. | | Ron DeLyons Director since 2020 Age: 62 | Mr. DeLyons’ experience, qualifications, attributes and skills include serving as a Managing Member and Chief Executive Officer of Creekwood Energy Partners, LLC (renewable energy). He has held this position since 2004. Prior to that, Mr. DeLyons was the co-founder and Chief Executive Officer of Greystone Investment Management. In April 2021, Mr. DeLyons earned his certificate of completion for Berkeley Law’s Executive Education course on ESG matters, ESG: Navigating the Board’s role. | | Patrick P. Grace Director since 1996 Age: 68 | Mr. Grace’s experience, qualifications, attributes and skills include serving in various executive positions at W.R. Grace & Co. from 1977 to 1995, most recently as President and CEO of Grace Logistics, Inc., an operating company with oversight responsibility for Grace’s $5.0 billion global supply chain. He is currently President and CEO of Grace Institute Foundation. From 1996 to 2017, he served as Chairman of the Grace Institute, New York, New York (workforce development for women). He was the co-founder and managing Principal of Apollo Philanthropy Partners, L.L.C., New York, New York (philanthropic advisory services) from 2008 to 2012. From 1996 to 2017 he served as President of MLP Capital, Inc., New York, New York, an investment holding company which managed several real estate and mining interests in the southeastern United States. From 2008 to 2017 he served as Chairman of KickStart International, a global poverty alleviation organization. He also served as a director of TONIX Pharmaceuticals, Inc., New York, New York (specialty pharmaceutical product development and commercialization) until he retired in 2019. He earned a Master’s of Business Administration degree in finance from Columbia University. | | Christopher J. Heaney Director since 2020 Age: 70 | Mr. Heaney’s experience, qualifications, attributes and skills include previously serving as Vice President of Operations, and then President and Chief Executive Officer of Service America Systems, Inc. (home and service warranties), a former wholly-owned subsidiary of the Company (“Service America”). The Company sold Service America to an investment group led by Mr. Heaney in 2005, and Mr. Heaney served as its President and Chief Executive Officer until 2009. Prior to his roles with Service America, Mr. Heaney served as a Senior Vice President and Group Senior Vice President with Veratex Group (dental supplies), while a wholly-owned subsidiary of first Omnicare and then the Company. | | Thomas C. Hutton Director since 1985 Age: 73 | Mr. Hutton’s experience, qualifications, attributes and skills include serving as a Vice President of the Company. He has held this position since February 1988. Previously, Mr. Hutton, who has a J.D. and Master’s of Public Administration degree from Cornell University, practiced corporate law in New York concentrating in securities and regulatory law from 1977 to 1987. He served as a director of Omnicare from May 1983 to May 2001. Currently Mr. Hutton serves as a trustee on three private foundations including the Chemed Foundation. | | Andrea R. Lindell Director since 2008 Age: 80 | Ms. Lindell’s experience, qualifications, attributes and skills include having served as Dean and a Professor of the College of Nursing at the University of Cincinnati. She retired from these positions in January 2011 having held them since December 1990. She is currently Professor Emeritus at the college. Since January 2016 she has served as Dean, having held the title of Associate Dean from January 2013 to January 2016, previously holding the title of Interim Associate Dean from August 2011, at the School of Nursing, Walden University. She is also Vice-Provost of Walden’s College of Health Sciences. Walden offers online degrees as follows: BSN, MSN, DNP. Ms. Lindell was also Associate Senior Vice President of the Medical Center at the University of Cincinnati from July 1998 until January 2011. The College of Nursing’s programs include over 1,500 students, and offer the following degrees: BSN, MSN, Post MSN, and PhD. From September 1994 to June 2002, she also held an additional position as Founder and Interim Dean of the College of Allied Health Sciences at the University of Cincinnati. She was a director of Omnicare until May 2014. |

  4. NOMINEES

    | Eileen P. McCarthy Director since 2023 Age: 57 | Ms. McCarthy’s experience, qualifications, attributes and skills include serving as Senior Vice President and Deputy General Counsel for UiPath, Inc. (NYSE: PATH), an automation platform industry leader, where her role includes leading the legal efforts in corporate governance, compliance and ESG, among other areas. Ms. McCarthy has served in this role since April 2022, and prior to that was the Vice President and Senior Corporate Counsel since March 2021. Prior to her roles with UiPath, Ms. McCarthy held various roles in the legal department at JetBlue Airways Corporation (NASDAQ: JBLU), ending as the Vice President and Associate General Counsel. Before JetBlue, Ms. McCarthy practiced corporate and securities law in New York City from 1997 to 2006. | | John M. Mount, Jr. Director since 2022 Age: 55 | Mr. Mount's experience, qualifications, attributes and skills include serving as the Chief Commercial Officer for Q Mixers, leading the national accounts and field sales customer teams, beginning in March of 2023. Mr. Mount brings a very strong marketing and sales background, developed through over two decades at The Coca-Cola Company prior to his work at Q Mixers, including serving as a Vice President in roles leading Sports Marketing, Customer Marketing, Commercial and Sales where he led The Kroger Company total beverage team. Prior to that he spent several years in various general management and sales roles at RJR Nabisco. Mr. Mount holds an MBA from the University of Notre Dame and a B.A. from Denison University. | | Thomas P. Rice Director since 2009 Age: 74 | Mr. Rice’s experience, qualifications, attributes and skills include having served as Chief Executive Officer of Andrx Corporation, Fort Lauderdale, Florida (specialty pharmaceuticals) (“Andrx”), from February 2004 to November 2006, when Andrx was sold to Watson Pharmaceuticals. Following the sale, Mr. Rice returned as General Manager and Majority Partner of Columbia Investments LLC, Baltimore, Maryland, which invests in local emerging businesses in Baltimore and which Mr. Rice co-founded in January 1996. He was also a Director of Par Pharmaceuticals, Woodcliff Lake, New Jersey (drug development, manufacture, and marketing) until November 2012. From January 1999 to March 2003, he was President and Chief Executive Officer of Chesapeake Biological Laboratories, Inc., Solomons, Maryland (pharmaceuticals manufacturing) (“Chesapeake”). Before co-founding Columbia Investments LLC, Mr. Rice served as Executive Vice President and Chief Operating Officer of Circa Pharmaceuticals, Inc., Copiague, New York (pharmaceuticals manufacturing) (“Circa”), from June 1993 to January 1996. Mr. Rice was also the Chief Financial Officer of Circa from June 1993 to January 1995. Prior to joining Circa, Mr. Rice spent seven years as an accountant with Deloitte & Touche LLP, an international accounting firm. He earned a Master’s degree in finance from Loyola University. He was a director of Circa from June 1993 to January 1996, a director of Chesapeake from January 1997 to January 1999 and a director of Andrx from April 2003 to November 2006. | | George J. Walsh III Director since 1995 Age: 78 | Mr. Walsh’s experience, qualifications, attributes and skills include serving as a partner with the law firm of Thompson Hine LLP, New York, New York. He has held this position since May 2002. Prior to this date, Mr. Walsh was a partner with the law firm of Gould & Wilkie LLP, New York, New York, and held this position since January 1979. Gould & Wilkie merged with Thompson Hine on May 1, 2002. Mr. Walsh was elected the Chairman of the Board of Directors in March 2009. |

  5. NOMINEES

    The Board unanimously recommends that you vote FOR the election of each of the above-named nominees.

  6. Director Compensation

    Director Compensation The Company’s compensation program for directors who are not employees of the Company consists of annual cash fees and fully vested stock awards granted pursuant to the Chemed Corporation 2018 Stock Incentive Plan (as amended, supplemented or otherwise modified as of the date hereof, the “2018 Incentive Plan”) and the Chemed Corporation 2022 Stock Incentive Plan (as amended, supplemented or otherwise modified as of the date hereof, the “2022 Incentive Plan”). Directors who are not employees of the Company may also participate in the Chemed Corporation Deferred Compensation Plan for Non-Employee Directors (the “Director Deferred Compensation Plan”), which is described below. Directors who are employees of the Company do not receive cash compensation for their service as directors, and do not receive annual fully vested stock awards for such service. The Board reviews and sets the cash compensation and fully vested stock awards for non-employee directors based on recommendation of the Compensation/Incentive Committee (the “Compensation Committee”). In making its determination, the Board seeks input from the Compensation Committee’s independent compensation consultant, Compensation Strategies, Inc., as well as certain executive officers of the Company, and considers any such input, including as to the level of compensation necessary to attract and retain qualified directors, among the factors it reviews in setting the amount of compensation. Director compensation is reviewed annually and from time to time the Board requests and receives input from Compensation Strategies, Inc., in light of current peer group constituency and market data. Each member of the Board of Directors who is not an employee of the Company is paid an annual fee of $80,000. Directors also receive a fee of $3,000 for each Board meeting attended. Non-employee directors also received annual fully vested stock awards in the amount of approximately $160,433. Mr. Walsh is paid an additional annual fee of $145,000 for his service as Chairman of the Board. Each member of the Board’s Audit Committee (other than its chairman), Compensation Committee (other than its chairman) and Nominating Committee (other than its chairman) is paid an additional annual fee of $15,000, $12,000 and $10,000, respectively, for his or her service on that Committee. The chair of the Audit Committee is paid $30,000 per year, the chair of the Compensation Committee is paid $20,000 per year and the chair of the Nominating Committee is paid $15,000. A Committee member is also paid $1,000 for each Committee meeting attended unless the Committee meeting is on the same day as a meeting of the Board of Directors, in which case Committee members are paid $500 for attendance at the Committee meeting. Messrs. McNamara and Hutton, who are employees of the Company, do not receive compensation for their service as directors. Each member of the Board of Directors and of a Committee is additionally reimbursed for continuing education expenses and reasonable travel expenses incurred in connection with attendance at Board and Committee meetings. No Compensation Committee member received any compensation from the Company other than as a director. In May 2023, Messrs. DeLyons, Grace, Heaney, Mount, Rice, and Walsh and Mses. Lindell and McCarthy each received approximately $160,433 in the form of a fully vested stock award of 294 shares of Capital Stock. In addition, the Company maintains the Director Deferred Compensation Plan in which directors who are not employees of the Company or of a subsidiary of the Company participate. Under such plan, which is not a tax-qualified plan, an account is established for each participant to whom amounts are credited quarterly at the rate of $6,000 per year. These amounts are used to purchase shares of Capital Stock, and all dividends are reinvested in Capital Stock. Each participant is entitled to receive the balance in his or her account within 90 days following the date he or she ceases to serve as a director. In 2023, each of Messrs. DeLyons, Grace, Heaney, Mount, Rice, and Walsh and Ms. Lindell received contributions of $6,000, in each case in his or her respective account in the Director Deferred Compensation Plan. In 2023, Ms. McCarthy received a contribution of $3,750 in her respective account in the Director Deferred Compensation Plan. Directors may participate in the Company’s health insurance plans by paying rates offered to former employees under COBRA, and may use available space, on a non-exclusive basis, in the Company’s New York office. In 2023, the Company provided the following compensation to non-employee directors for their service to the Company:

  7. DIRECTOR COMPENSATION – 2023 (a)

    DIRECTOR COMPENSATION – 2023 (a)

  8. DIRECTOR COMPENSATION – 2023 (a)

    | | Fees Earned | | | | | | or Paid in | Stock | All Other | | | | Cash | Awards | Compensation | Total | | Name | ($) | ($)(b) | ($) | ($) | | Ron DeLyons | 111,833 | 166,433 | - | 278,266 | | Patrick P. Grace | 142,167 | 166,433 | - | 308,600 | | Christopher J.Heaney | 113,000 | 166,433 | - | 279,433 | | Andrea R. Lindell | 106,333 | 166,433 | - | 272,766 | | Eileen P. McCarthy | 74,333 | 164,183 | - | 238,516 | | John M. Mount, Jr. | 111,833 | 166,433 | - | 278,266 | | Thomas P. Rice | 111,833 | 166,433 | - | 278,266 | | George J. Walsh III (c) | 271,333 | 166,433 | 15,385 | 453,151 |

  9. DIRECTOR COMPENSATION – 2023 (a)

    (a)The Director Compensation Table excludes executive compensation figures for Messrs. McNamara and Hutton who are employees of the Company. (b)Amounts for each of Messrs. DeLyons, Grace, Heaney, Mount, Rice, Walsh, and Ms. Lindell include contributions of $6,000 of Capital Stock held in the Chemed Deferred Compensation Plan. Amounts for Ms. McCarthy include a contribution of $3,750 of Capital Stock held in the Chemed Deferred Compensation Plan. (c)All other compensation is related to personal use of the company plane which is calculated based on the incremental cost to the Company.

  10. Overview of Compensation Program

    Overview of Compensation Program The executive compensation program is administered by the Compensation Committee. The membership of the Compensation Committee is comprised of four independent directors. The Compensation Committee is responsible for the review, approval and recommendation to the Board of Directors of matters concerning (a) base salary and annual cash incentive compensation for executives of the Company, (b) establishment of incentive compensation plans and programs generally, (c) adoption and administration of certain employee benefit plans and programs, and (d) additional year-end contributions by the Company under the Retirement Plan. The recommendations of the Compensation Committee on such matters must be approved by the non-employee members of the Board of Directors. The employee members of the Board of Directors are not present when compensation recommendations are presented to the Board of Directors and discussed, and such members do not vote on compensation issues. The Compensation Committee also administers the Stock Incentive Plans. Under authority granted it by those plans, it reviews and approves the granting of stock options and performance share units. The Compensation Committee also annually determines whether to retain or terminate the services of independent compensation consultants to assist and advise it in administering the executive compensation program after considering certain independence factors. Currently, Compensation Strategies, Inc., an independent compensation advisory firm, has been retained by, and reports directly and exclusively to, the Compensation Committee. The scope of these consulting services is limited to (a) advising the Compensation Committee regarding executive compensation, (b) performing studies of general market and peer group compensation levels, and (c) advising the Board on director compensation, all upon request of the Compensation Committee. Compensation Strategies, Inc. does no other work for the Company outside of providing these compensation advisory services.

  11. How Compensation Decisions Are Made

    How Compensation Decisions Are Made Generally, in February of each year, certain senior executives of the Company, including the Chief Executive Officer, prepare recommendations for annual cash incentives to be made to Company employees, based on the performance of the Company and its subsidiaries during the past year. At the same time, Company Senior Executives also make recommendations for the granting of performance shares units (PSUs). The Compensation Committee traditionally granted stock option awards in November, to more fully reflect the Company’s financial and stock price performances during that year. Beginning in 2019, the Compensation Committee began granting stock option awards on the day of the release of the Company’s third quarter earnings results. The recommendations made by the Chief Executive Officer and other senior executives to the Compensation Committee, which include detailed memoranda, take into consideration historical compensation, including base salaries, annual incentive compensation and long-term equity awards, performance of the Company as a whole, both on an absolute basis and relative to its peer group, and performance of the individual business unit for which the employee is responsible, if applicable. The Compensation Committee then meets to determine the long-term equity awards for each executive and to review and consider the recommendations prepared by the Company’s senior executives in order to determine the amount of incentives for each executive. In finalizing their grants of stock option awards, the Compensation Committee considers the recommendation of the senior executives and the factors presented by them listed above, the compensation of the Company’s senior executives compared to its peer group and other industry data, the overall mix of compensation for senior executives (as a whole and individually), and the performance of the Company and its business units for the current year. Because stock options are granted after a considerable amount of the year has elapsed and after base salary and performance share units have been granted, option grants may increase or decrease materially in order to help reflect management’s or any member of management’s performance during the year, in the context of the entire executive compensation program. Additionally, the Black-Scholes valuation model used to value stock options granted is highly dependent on the Company’s stock price. Significant variation in the stock price can lead to significant changes in the ascribed value of the grant date fair value of option awards. The Compensation Committee makes compensation recommendations to the non-employee members of the Board of Directors regarding the compensation of the Chief Executive Officer without the input of any Company employees. The Compensation Committee can modify any recommendations of the Company’s senior executives. Base salaries of executives are periodically reviewed by the Compensation Committee and approved by the non-employee members of the Board of Directors. As a component of the review and approval process, the Compensation Committee and the non-employee members of the Board consider the recommendations of the Chief Executive Officer and certain senior executives of the Company as to the base salaries of Company executives, other than the Chief Executive Officer. The Chief Executive Officer’s base salary is reviewed and determined without the input of Company employees. In determining recommended base salaries for the Company’s executives, as more fully discussed under “Base Salaries” below, the Compensation Committee also considers each executive’s then-current base salary and their individual performance and receives input from its compensation consultant. The Compensation Committee directly grants compensation under the Stock Incentive Plans.

  12. Elements of Compensation

    Elements of Compensation The elements of the Company’s executive compensation program are: base salary, annual cash incentive compensation and long-term incentive compensation in the forms of stock option awards, restricted share awards, performance share units, and certain perquisites. Components of compensation that are available generally to all Company employees, including the Company’s named executive officers, are defined contribution plans and welfare benefit plans (including life insurance, health insurance, dental insurance and long-term disability benefits). In addition, the Chemed Corporation Excess Benefit Plan (as amended, supplemented or otherwise modified as of the date hereof, the “Excess Benefit Plan”), the Chemed Corporation Long Term Care Insurance Plan, the Chemed Corporation Supplemental Pension and Life Insurance Plan (as amended, supplemented or otherwise modified as of the date hereof, the “Supplemental Pension Plan”), and the Roto-Rooter Deferred Compensation Plan (as amended, supplemented or otherwise modified as of the date hereof, the “Deferred Compensation Plan”) are available as components of compensation to executives and other highly compensated individuals. Base salary, annual cash incentive compensation and pension and welfare benefit plans are established by the non-employee members of the Board based on the levels that the Compensation Committee and such Board members determine are competitive and are intended to reward executives for current and past performance, while longer-term incentives, such as stock option awards and performance share unit awards are intended to create incentive for future growth. The Company’s executive compensation program also offers perquisites commonly available to senior executives.

  13. Executive Compensation Consultant

    Executive Compensation Consultant The Compensation Committee’s charter grants it sole authority regarding the appointment, compensation and oversight of the Company’s executive compensation consultant. The Compensation Committee retained Compensation Strategies, Inc., after considering specific independence factors, as its consultant to assist the Compensation Committee with its responsibilities related to the Company’s compensation program for its executives and Board of Directors. During 2013, Compensation Strategies, Inc. advised the Compensation Committee and assisted in the development of the Company’s revised management compensation program. The consultant was instrumental in (i) establishing a new peer group against which to benchmark executive compensation, (ii) developing annual incentive compensation target goals and target bonus percentages by executive, (iii) setting Adjusted EPS and Return on Assets payout percentages by performance level, (iv) establishing three-year goals for Adjusted EPS and relative TSR performance share units, and (v) implementing the Company’s clawback provision and “double trigger” regarding incentives in the event of a change in control of the Company. On a periodic basis, the Company’s executive compensation consultant provides the Compensation Committee with a full review of executive compensation. The most recent review, in 2023, included base salary, annual bonus, and long-term incentives for 10 individuals and the Chief Executive Officer. The Compensation Committee assessed the independence factors set forth in applicable SEC rules and other facts and circumstances in February 2024 and concluded that the services performed by Compensation Strategies, Inc. did not raise any conflicts of interest.

  14. Peer Group

    Peer Group In conjunction with its review of the management compensation program, and in consultation with Compensation Strategies, Inc., the Compensation Committee reviewed the peer group used to benchmark executive compensation. Based on changes to our previous Peer Group and increases in the Company’s annual revenues and market capitalization, the Compensation Committee selected a new Peer Group. The new Peer Group, adopted in early 2020 and reviewed in 2023, is as follows (with certain removals of peers due to certain mergers and other transactions pursuant to which former peers are no longer independently or publicly traded):

  15. Peer Group

    | ABM Industries, Inc. | Pediatrix Medical Group | | Acadia Healthcare Co., Inc. | (formerly MEDNAX, INC.) | | Amedisys, Inc. | RadNet, Inc. | | Brookdale Senior Living, Inc. | Rollins, Inc. | | Clean Harbors, Inc. | Select Medical Holdings Corp. | | Comfort Systems USA, Inc. | Stericycle, Inc. | | Encompass Health Corp. | Team, Inc. | | Healthcare Services Group, Inc. | Tetra Tech, Inc. | | National Healthcare Corp. | The Ensign Group, Inc. |

  16. Peer Group

    The Compensation Committee will track the Company’s relative TSR performance against the new Peer Group going forward including for performance share units granted in 2024.

  17. Target Non Equity Incentive Compensation Percentages of Base Salary

    Target Non Equity Incentive Compensation Percentages of Base Salary

  18. Target Non Equity Incentive Compensation Percentages of Base Salary

    | K.J. McNamara | 125% | | D.P. Williams | 110 | | N.M. Westfall | 110 | | S.S. Lee | 110 | | M.D. Witzeman | 95 |

  19. Target Non Equity Incentive Compensation Percentages of Base Salary

    The Adjusted EPS target is weighted 75% of total non equity incentive compensation opportunity, and the Return On Assets target weighted 25% of total non equity incentive compensation opportunity. Performance above target(s) results in incentive compensation greater than the target percentage of salary; performance below target(s) results in non equity incentive compensation lower than the target percentage of base salary. The target multipliers are highly leveraged both above and below target performance. The maximum multiplier of 200% is achieved at Adjusted EPS at 14% over target and the minimum multiplier of 0% is effective at Adjusted EPS 20% below target; for Return On Assets, the maximum multiplier of 200% is achieved at Return On Assets of 140% of target and the minimum multiplier of 0% is effective at Return On Assets of 60% of target. The following table shows target and actual performance for the Company and its subsidiaries, the percent of target achievement, and the target multiplier.

  20. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

  21. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    | NEO | 2023 Target Non Equity Incentive | 2023 Actual Non Equity Incentive Earned | Actual as a % of Target | | K. J. McNamara | $2,049,688 | $2,333,057 | 113.8% | | D. P. Williams | 1,000,725 | 1,139,075 | 113.8 | | N. M. Westfall | 717,090 | 1,290,045 | 179.9 | | S. S. Lee | 680,625 | 463,506 | 68.1 | | M. D. Witzeman | 388,313 | 441,997 | 113.8 |

  22. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    The following chart reconciles the EPS used in the non equity incentive compensation (NEIC) computation with the Adjusted EPS:

  23. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    | | As Reported in Charts on Pages 2 and 3 | As Used for NEIC Calculation | | Net Income as Reported (000) | $272,509 | $272,509 | | Adjustments as Outlined on Page 3 | $36,006 | $36,006 | | Adjusted Net Income as Outlined on Page 3 | $308,515 | $308,515 | | Additional Adjustments for Non Equity Incentive Compensation | | | | Medicare Cap Charge - Fourth Quarter 2022 | | $(2,076) | | Medicare Cap Charge - Fourth Quarter 2023 | | $1,798 | | One-Time Healthcare Worker Retention Bonus | | $15,780 | | Adjusted Net Income to be used for NEIC Calculations | | $324,017 | | Average Shares Outstanding Diluted (000) | 15,200 | | | Actual Shares Outstanding for NEIC Calculation (actual as of 12/31/23) | | 15,277 | | Adjusted Net Income Per Share | $20.30 | $21.21 |

  24. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    One-Time Special Cash Incentive Due to industry-wide disruption in hospice caused by the COVID-19 pandemic that materially affected VITAS’ ability to grow its earnings, and thus the Company’s ability to achieve growth targets for certain previously granted PSUs, in February of 2022 the Compensation Committee approved a one-time special cash incentive for certain members of the Company’s management. The special incentive was paid in the first quarter of 2024, based upon the Company’s achievement of a cumulative 2-Year Adjusted EPS Target for the 2022 and 2023 fiscal years. The Cumulative Total Adjusted EPS Target was established to be equal to the 2022 Budget earnings dollars divided by 12/31/2021 actual shares outstanding and a figure for 2023 with a 7% growth factor for earnings (also divided by 12/31/2021 actual shares outstanding). The Target was $39.06. The maximum amount payable in the event that the Adjusted EPS was 14% higher than target was 200% of the target. The minimum amount of the special incentive that could have been paid was $0, in the event that the Adjusted EPS was less than 80% of the target, with the amounts payable in the event that the Adjusted EPS was less than between 80% and 200% of the Adjusted EPS Target amount ratably interpolated. The target amounts payable to our NEOs were as follows: Kevin McNamara - $422,500; David Williams - $162,500; Nick Westfall - $122,500; Spencer Lee - $75,000; and Michael Witzeman - $67,500. The Company achieved a Cumulative Total Adjusted EPS Target of $41.12 for the fiscal years 2022 and 2023, which equates to 139.8% of the target amount. Accordingly, amounts paid to our NEO’s and included in the Non Equity Incentive Compensation calculation for 2023 are as follows: Kevin McNamara - $590,655; David Williams - $227,175; Nick Westfall - $171,255; Spencer Lee - $104,850; and Michael Witzeman - $94,365. These amounts are included on the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column. Long-Term Incentives The Compensation Committee grants long-term incentive compensation pursuant to the Stock Incentive Plans. While long-term incentive compensation may be paid under the Stock Incentive Plans in the form of stock option awards, performance share units, and restricted or fully vested stock awards, currently all of the long-term incentive awards granted pursuant to such plans (other than to outside directors) are in the form of stock options or performance share units. In granting long-term incentives in the form of stock option awards and performance share units, the Compensation Committee considers as recipients employees who have demonstrated capacity for contributing to the Company’s goals. No grants of time-based restricted stock awards have been granted since May 2015, nor are any contemplated. In all cases, the long-term equity awards are intended to encourage employees to act as owners of the business, further aligning their interests with those of stockholders. The Compensation Committee grants stock option awards with an exercise price at no less than 100% of fair market value of Capital Stock on the date granted. Stock option awards vest ratably over three years, thus providing value to the Company’s employees only if the share price increases after the date such awards were granted and the employees remain employed for a significant period of time. Options awarded in November 2015 or later carry a term of five years; those granted previously had a ten-year term. Performance share units vest based on targeted criteria, including a three-year cumulative Adjusted EPS target and a three-year relative Total Shareholder Return (“TSR”) performance metric. In February 2023, the Compensation Committee granted performance-based share units under the 2018 Plan. Upon vesting, each unit is converted to one share of Capital Stock. With respect to the PSUs granted with Adjusted EPS Targets, the Company has traditionally had a benchmark 3-Year Adjusted Compound Annual Growth Rate (“CAGR”) of 7% for Target payout of the Adjusted EPS. The Target was increased and decreased by 4 percentage points from the 7% Target to determine payout either the maximum or the minimum of 200% and 0%, respectively. Because of the significant disruption COVID has had industry-wide in hospice, the EPS growth rate for the Company over the three-year period from 2022-2024 was not expected to achieve a CAGR of 7%. This is in part the result of the Federal government cutting hospice reimbursement 2% as sequestration was phased back in during April to July 2022. In addition, future hospice reimbursement increases lag actual health care wage inflation by 12 to 18 months due to the government’s formula for calculating hospice reimbursement rates. In order to account for this disruption and to set the Target growth rate at a level which the Company would find as satisfactory performance, it was proposed that the Company begin setting and communicating Targets using 3-Year cumulative Total Adjusted EPS data rather than the 3-Year CAGR Target itself. For 2022, a Target amount was set based on then-current business conditions. Subsequent year Target values were based on 7% annualized growth from the 2022 Target. Maximum and Minimum amounts were developed based on annualized growth rates of plus four percentage points and minus four percentage points of growth, respectively. For 2023, target values were all set using an annualized 7% growth rate. (The remainder of this page intentionally left blank) ‎ The following two tables detail the percentages of the target grants that will be earned depending on the actual 3-Year Cumulative Total Adjusted EPS and TSR performance levels for the period beginning January 1, 2023 and ending December 31, 2025.

  25. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    | | 3-Year | | | | Cumulative | Percentage of | | | Total Adjusted EPS (a) | Target Shares | | Maximum | $71.75 | 200.0% | | Target | $66.46 | 100.0% | | Minimum | $61.43 | 0.0% | | | | Percentage of | | | 3-Year TSR Percentile | Target Shares | | Maximum | Greater than 90th | 200.0% | | | 75th | 150.0% | | | 60th | 125.0% | | Target | 50th | 100.0% | | | 40th | 75.0% | | | 25th | 50.0% | | Minimum | Less than 25th | 0.0% |

  26. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    (a)Target values were based on a 7% annualized growth rate. Maximum and Minimum amounts were developed based on annualized growth rates of plus four percentage points and minus four percentage points of growth, respectively. For performance levels between those appearing in the above tables, the number of shares to be vested and earned will be interpolated between the next closest performance levels appearing in the tables. For all grantees, the performance metrics are those of Chemed in total rather than any individual’s respective operating division. The grant recommendations were dollar-denominated; the number of share units per grantee was determined based on the closing price of the Company’s Capital Stock on the day of the Compensation Committee’s approval. The relative TSR is measured against the Peer Group in effect at the time of the grant. The following table shows the results and payouts for the performance periods completed since institution of the PSU incentive program in 2013:

  27. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    | | Adjusted EPS Avg. Annual CAGR | | TSR Peer Group | | | Performance Period | Percent | Payout(a) | Percentile | Payout(a) | | 3-Year Performance Period Targets | 7.00% | 100.0% | 50th | 100.0% | | January 1, 2013 - December 31, 2015 | 10.26 | 144.4 | 73rd | 149.8 | | January 1, 2014 - December 31, 2016 | 8.23 | 118.0 | 91st | 204.6 | | January 1, 2015 - December 31, 2017 | 11.79 | 163.0 | 90th | 203.9 | | January 1, 2016 - December 31, 2018 | 20.52 | 203.3 | 70th | 144.0 | | January 1, 2017 - December 31, 2019 | 24.29 | 202.5 | 79th | 165.2 | | January 1, 2018 - December 31, 2020 | 29.06 | 202.0 | 79th | 164.8 | | January 1, 2019 - December 31, 2021 | 18.63 | 202.0 | 63rd | 131.6 | | January 1, 2020 - December 31, 2022 | 12.67 | 202.0 | 56th | 115.0 | | January 1, 2021 - December 31, 2023 | 5.47 | 62.3 | 47th | 93.5 |

  28. 2023 TARGET/ACTUAL NON EQUITY INCENTIVE COMPENSATION EARNED

    (a)Payout percentages are based on payout scales at the time of grant and include reinvestment of dividends paid on Chemed shares during the performance period. The Compensation Committee believes the payment of long-term incentive compensation in the form of performance-based share units promotes and encourages long-term retention and service for the Company and better aligns the interests of the named executive officers with those of the Company’s stockholders through increased share ownership, promoting improved financial performance, and increased stockholder value. Stock option and stock awards are not granted so as to “time” them before the release of material nonpublic information that is likely to result in an increase in share price (“spring-loading”) or delay them until after the release of material nonpublic information that is likely to result in a decrease in share price (“bullet-dodging”). The Company does not reprice stock option awards or replace them if the share price declines after the date such stock option awards were granted. Beginning in 2013, in the event of a change in control of the Company, all stock option and stock award incentives are subject to a double trigger vesting, requiring employment termination coupled with a change in control. The Company also has adopted clawback policies affecting incentive compensation, including policies compliant with the New York Stock Exchange’s clawback listing standards. Perquisites The Company’s executive compensation program offers perquisites that are commonly available to senior executives, the nature and amounts of which are detailed in the “All Other Compensation Table”. Retirement Benefits The Company maintains the Retirement Plan, a tax-qualified defined contribution plan, for the benefit of its employees, including the named executive officers. The Retirement Plan permits employees to contribute a portion of their pay to the plan on a pre-tax basis. The Company also provides a matching contribution to employees who contribute to the plan. The named executive officers participate in the Retirement Plan within the limits imposed by the Internal Revenue Code (the “Code”) and the Employee Retirement Income Security Act (“ERISA”). The Company also maintains the Excess Benefit Plan and the Deferred Compensation Plan, which are non-qualified supplemental savings plans for key employees, including the named executive officers, whose participation in the Retirement Plan is limited by the Code and ERISA. Messrs. McNamara, Williams, Westfall and Witzeman participate in the Excess Benefit Plan and Mr. Lee participates in the Deferred Compensation Plan. These plans allow participants to defer up to 50% of their base salary and up to 85% of their annual cash incentive compensation and provide a matching contribution from the Company. Participants select mutual funds as investments, and amounts deferred and credited to participant accounts under the plans are credited with earnings or losses depending on the performance of the selected mutual funds. Participants may receive the amounts credited to their accounts at retirement, termination of employment or on a specific date following termination or retirement and may also elect to receive a portion of each year’s deferral and earnings on a specific date prior to retirement or termination of employment. Participants may receive such amounts in a lump-sum payment or in installment payments. Each of the named executive officers other than Messrs. Westfall and Witzeman also participate in the Supplemental Pension Plan, which provides certain key employees with a supplemental pension and optional life insurance benefit. The Company accrues a fixed monthly contribution to each participant’s account under this plan, and participants’ accounts are credited with monthly earnings based on an annual interest rate. Participants have the option to use a portion of this Company contribution to purchase supplemental term life insurance. Tax Considerations; Loss of Certain Tax Deductions U.S. federal income tax law prohibits the Company from taking a deduction for compensation paid to its covered executive officers over $1,000,000 per executive per year, but until December 31, 2017 exempted certain performance-based compensation. Compensation paid to covered executive officers in excess of $1,000,000 is not deductible thereafter, unless it qualifies for transition relief applicable to arrangements in place as of November 2, 2017. Because of our compensation structure, compensation granted thereafter will not be eligible for transitional relief. The Compensation Committee considers tax regulations, specifically including any losses of deductions due to changes in tax laws, in structuring compensation arrangements to achieve deductibility, except where outweighed by the need for flexibility, or as the Company otherwise determines is in the best interests of the Company and its stockholders. One time PSU Grant to David P. Williams At the end of 2023, Mr. Williams transitioned from the Company’s Chief Financial Officer to an employee advisor to the Chief Executive Officer. In connection with this change of roles, Mr. Williams’ employment agreement terminated, and Mr. Williams was given a one-time PSU grant of 6,424 PSUs, which will be awarded in 2027 based upon the Company’s TSR over the period from 2024-2026. Mr. Williams will also receive a monthly salary of $38,750 in his new role, and his employment may be terminated upon 12 months notice.

  29. Employment Agreements; Severance Payments; Change in Control

    Employment Agreements; Severance Payments; Change in Control In 2023, the Company had employment agreements with two of its named executive officers: Messrs. McNamara and Williams. Mr. Williams’ employment agreement terminated effective January 1, 2024, when Mr. Williams stepped down as Chief Financial Officer and became an employee advisor to the Chief Executive Officer. Please see the paragraph above regarding Mr. Williams PSU grant agreement. On May 3, 2008, Mr. McNamara entered into a two-year employment agreement, which automatically renews every May 3 beginning May 3, 2010 for a new two-year term unless either party provides 30 days’ prior written notice of non-renewal. Mr. McNamara’s employment agreement provides for a lump-sum severance payment, in the event of termination without cause, equal to five times his then-current base salary plus a pro-rated portion of his average annual incentive compensation for the then-past three full fiscal years. In the event of termination without cause, he also would be entitled to continue to participate in the Company’s welfare benefit plans for 24 months following termination at the then-current rate of contribution. The employment agreement with Mr. Williams entered into in December 2006 contained the same terms as outlined above for Mr. McNamara, except that Mr. Williams would have been entitled to a lump-sum severance payment equal to two and a half times his then-current base salary and continued participation in the Company’s welfare benefit plans for 18 months following termination at the then-current rate of contribution. Under the terms of the agreements, such severance payments and benefits are conditioned upon execution of a general release of claims in favor of the Company, nondisclosure and, for Mr. McNamara, two-year non-compete and non-solicitation covenants and, for Mr. Williams, one-year non-compete and non-solicitation covenants. If these payments were subject to the excise taxes imposed by Section 409A of the Code, Messrs. McNamara and Williams would be entitled to gross-up payments under the terms of the agreements. The Company does not intend to enter into future employment agreements that provide for excise tax gross-ups. For a termination due to death, disability or retirement, during 2023 each of Messrs. McNamara and Williams would have been entitled under his employment agreement to a lump-sum payment equal to the pro-rated portion of the average of his annual incentive compensation for the then-past three full fiscal years. Such severance payments under each employment agreement for a termination due to disability or retirement are conditioned upon execution of a general release of claims in favor of the Company and a nondisclosure covenant. In 2006, the Board of Directors adopted the Chemed Corporation Senior Executive Severance Policy (as amended, supplemented or otherwise modified as of the date hereof, the “Senior Executive Severance Policy”) and the Chemed Corporation Change in Control Severance Plan (as amended, supplemented or otherwise modified as of the date hereof, the “Change in Control Plan”), which were intended to replace most of the existing employment agreements entered into by the Company. Accordingly, certain Company executives, including Messrs. Westfall, Lee and Witzeman, are now governed by the Senior Executive Severance Policy and the Change in Control Plan. In 2023, Messrs. McNamara and Williams were not covered by the Senior Executive Severance Policy but are covered by the Change in Control Plan. However, in the event of a change in control of the Company, Messrs. McNamara and Williams would not receive benefits under both their employment agreements and the Change in Control Plan. With the shift from individual employment agreements to general severance and change in control plans, the Compensation Committee intended to reduce total payouts to executives upon termination and move the Company’s executive severance arrangements more in line with market practices. Under the Senior Executive Severance Policy, if an executive is terminated without cause, he or she would be entitled to a lump-sum payment equal to one and a half times his or her then-current base salary and a pro-rated portion of his or her average annual incentive compensation for the then-past three full fiscal years. Such executive would also be entitled to continued participation in the Company’s welfare benefit plans for one year following termination of employment at the then-current rate of contribution. Severance payments and benefits under the Senior Executive Severance Policy are conditioned upon execution of a general release of claims in favor of the Company. Additionally, for a termination without cause or due to disability or retirement, such severance payments and benefits are conditioned upon nondisclosure and one-year non-compete and non-solicitation covenants. This policy was revised in August 2018. Previously, if payments under the Senior Executive Severance Policy were subject to the excise taxes imposed by Section 409A of the Code, participants would be entitled to gross-up payments. Only existing participants have such entitlement; newly added plan participants do not. In the event of a change in control of the Company, participants in the Senior Executive Severance Policy would not receive benefits under both the Senior Executive Severance Policy and the Change in Control Plan. For a termination due to death, disability or retirement, each of the participants in the Senior Executive Severance Policy would be entitled to a lump-sum payment equal to the pro-rated portion of the average of his or her annual incentive compensation for the then-past three full fiscal years. The Change in Control Plan, described in additional detail under “Change in Control of the Company” below, provides for severance payments and benefits in the event of a change in control of the Company followed within two years by an executive’s termination of employment either without cause or for good reason (“double trigger”). Payments under the Change in Control Plan are triggered by: a.termination of employment by the Company without cause; or b.termination of employment by the employee within 90 days of an event giving him or her good reason to so terminate.

  30. Employment Agreements; Severance Payments; Change in Control

    The Change in Control Plan would provide for payments equal to three times the sum of (a) the highest base salary during the 120-day period prior to the change in control or any time following the change in control and (b) the average annual incentive compensation for the then-past three full fiscal years to Messrs. McNamara and Williams, and two times the sum of (a) the highest base salary during the 120-day period prior to the change in control or any time following the change in control and (b) the average annual incentive compensation for the then-past three full fiscal years to the other participants, all paid in cash in a lump sum within 10 days following termination. If the termination were to take place in a fiscal year other than the fiscal year during which the change in control occurred, each participant would also receive a pro-rated portion of his or her three-year average annual incentive compensation. Participants would also receive benefits under the Company’s welfare benefit plans for a period of three (for Messrs. McNamara and Williams) or two years; a lump-sum cash payment within 10 days following termination in the amount of employer contributions to defined contribution plans; perquisites for a period of three (for Messrs. McNamara and Williams) or two years; and outplacement assistance up to $25,000. Regardless of whether a participant is terminated and in addition to the severance benefits set forth above, upon a change in control, each participant in the Change in Control Plan would receive, within 10 days following the change in control, a lump-sum cash payment equal to the average of the participant’s annual incentive compensation for the then-past three full fiscal years (“single-trigger” payments). Payments under the Change in Control Plan, including single-trigger payments, are conditioned on execution of a general release of claims in favor of the Company. Prior to August 2018, if payments under the Change in Control Plan were subject to taxes imposed by Sections 4999 or 409A of the Code, participants would be entitled to gross-up payments. The plan was then amended to restrict such entitlement to then-existing participants only. Due to his change in role, Mr. Williams no longer participates in the change in control plan, beginning in 2024.

  31. Summary Compensation Table

    Summary Compensation Table The following table shows the compensation paid to the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated executive officers of the Company in 2021, 2022 and 2023 for all services rendered in all capacities to the Company and its subsidiaries:

  32. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  33. SUMMARY COMPENSATION TABLE

    | | | | | | | Non-Qualified | | | | | | | Non-Equity | | | Deferred | | | | Name and | | | Incentive Plan | Stock | Option | Compensation | All Other | | | Principal | | Salary | Compensation | Awards | Awards | Earnings | Compensation | Total | | Position | Year | ($) | ($) (a) | ($)(b) | ($)(b) | ($)(c) | ($)(d) | ($) | | K.J. McNamara | | | | | | | | | | President and CEO | 2023 | $1,604,000 | $2,923,712 | $2,511,638 | $4,200,094 | $73,012 | $1,312,650 | $12,625,106 | | | 2022 | 1,490,333 | 2,664,155 | 2,135,216 | 3,744,820 | 66,356 | 1,508,153 | 11,609,033 | | | 2021 | 1,383,667 | 3,293,994 | 1,893,990 | 3,566,649 | 90,263 | 1,431,059 | 11,659,622 | | D.P. Williams | | | | | | | | | | Executive Vice President | 2023 | 889,917 | 1,366,250 | 919,900 | - | 33,755 | 512,045 | 3,721,867 | | and CFO | 2022 | 826,833 | 1,241,609 | 821,156 | 1,891,882 | 30,669 | 565,122 | 5,377,271 | | | 2021 | 767,667 | 1,535,001 | 728,374 | 1,802,174 | 27,861 | 607,138 | 5,468,215 | | N.M. Westfall | | | | | | | | | | Executive Vice President | 2023 | 636,525 | 1,461,300 | 605,228 | 1,602,568 | - | 404,333 | 4,709,954 | | | 2022 | 598,333 | 1,039,819 | 591,063 | 1,563,378 | - | 407,577 | 4,200,170 | | | 2021 | 563,646 | 805,101 | 549,551 | 1,563,383 | - | 446,092 | 3,927,773 | | S.S. Lee | | | | | | | | | | Executive Vice President | 2023 | 605,267 | 568,611 | 461,673 | 1,225,343 | 33,145 | 475,237 | 3,369,276 | | | 2022 | 560,783 | 788,772 | 430,632 | 1,289,729 | 30,116 | 513,035 | 3,613,067 | | | 2021 | 515,833 | 1,041,281 | 335,837 | 1,172,537 | 27,358 | 524,704 | 3,617,550 | | M. D. Witzeman | | | | | | | | | | Vice President and | 2023 | 399,833 | 536,362 | 382,431 | 1,394,988 | - | 212,119 | 2,925,733 | | Controller | 2022 | 371,500 | 398,450 | 340,917 | 894,959 | - | 215,063 | 2,220,889 | | | 2021 | 344,917 | 492,693 | 303,126 | 852,437 | - | 224,109 | 2,217,282 |

  34. SUMMARY COMPENSATION TABLE

    (a)Included in the Non-Equity Incentive Plan Compensation column is the “Annual Non-Equity Incentive Compensation” as well as the “One Time Special Cash Incentive”. (b)Amounts represent the grant date fair value of stock options and stock awards determined to be in accordance with the FASB’s stock-based compensation rule. See Note 4 to the Consolidated Financial Statements included as Exhibit 13 to the Company’s 2023 Annual Report on Form 10-K for a description of the assumptions used in determining the grant date fair value. (c)Amounts represent interest earnings on balances in each named executive officer’s account under the Supplemental Pension Plans that are in excess of 120% of the long-term applicable federal funds rate in effect in July 2023. (d)See “All Other Compensation Table” for details.

  35. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table shows stock option and stock awards granted in 2023 to the named executive officers in the Summary Compensation Table pursuant to the Stock Incentive Plans:

  36. Grants of Plan-Based Awards

    | | | All Other | All Other | | | | | | | Stock Awards: | Option Awards: | | | | | | | Number of | Number of | Exercise | Closing | Grant | | | | Shares of | Securities | or Base Price | Market Price | Date Fair | | | | Stock or | Underlying | of Option | on Grant | Value of | | | Grant | Units | Options | Awards | Date | Award | | Name | Date | (#) | (#) (a) | ($/Share) (b) | ($/Share) | ($)(c) | | K.J. McNamara | 2/17/2023 | 2,187 | - | n.a. | 513.40 | 1,126,567 | | | 2/17/2023 | 2,187 | - | n.a. | 513.40 | 1,385,071 | | | 10/25/2023 | - | 37,756 | 509.46 | 507.00 | 4,200,094 | | D.P. Williams | 2/17/2023 | 801 | - | n.a. | 513.40 | 412,611 | | | 2/17/2023 | 801 | - | n.a. | 513.40 | 507,289 | | N.M. Westfall | 2/17/2023 | 527 | - | n.a. | 513.40 | 271,468 | | | 2/17/2023 | 527 | - | n.a. | 513.40 | 333,760 | | | 10/25/2023 | - | 14,406 | 509.46 | 507.00 | 1,602,568 | | S.S. Lee | 2/17/2023 | 402 | - | n.a. | 513.40 | 207,078 | | | 2/17/2023 | 402 | - | n.a. | 513.40 | 254,595 | | | 10/25/2023 | - | 11,015 | 509.46 | 507.00 | 1,225,343 | | M.D. Witzeman | 2/17/2023 | 333 | - | n.a. | 513.40 | 171,535 | | | 2/17/2023 | 333 | - | n.a. | 513.40 | 210,896 | | | 10/25/2023 | - | 12,540 | 509.46 | 507.00 | 1,394,988 |

  37. Grants of Plan-Based Awards

    (a)Options have an expiration date of October 25, 2028. (b)The exercise price of option awards is the average of the high and low sale prices of the New York Stock Exchange on the date of grant. (c)Amounts represent the aggregate grant date fair value of the awards determined in accordance with the FASB’s stock-based compensation rules. See Note 4 to the Consolidated Financial Statements included as Exhibit 13 to the Company’s Annual Report on Form 10-K for a description of the assumptions used in determining the grant date fair value.

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

    Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table The following is a description of material factors necessary to understand the information disclosed in the Summary Compensation Table, the All Other Compensation Table and the Grants of Plan-Based Awards Table. This discussion is meant to supplement the information contained in the Compensation Discussion and Analysis.

  39. Outstanding Equity Awards at Year End

    Outstanding Equity Awards at Year End The following table shows outstanding equity awards at 2023 year end held by the named executive officers in the Summary Compensation Table:

  40. OUTSTANDING EQUITY AWARDS AT YEAR END 2023

    OUTSTANDING EQUITY AWARDS AT YEAR END 2023

  41. OUTSTANDING EQUITY AWARDS AT YEAR END 2023

    | | Option Awards | | | | Stock Awards | | | | Number of | Number of | | | Number of | Market Value | | | Securities | Securities | | | Shares or Units | Of Shares | | | Underlying | Underlying | | | of Stock | or Units of | | | Unexercised | Unexercised | Option | | That Have | Stock | | | Options | Options | Exercise | Option | Not | That Have Not | | | Exercisable | Unexercisable | Price | Expiration | Vested | Vested (g) | | Name | (#) | (#) | ($) | Date | (#) | ($) | | K.J. McNamara | 41,224 | - | 471.74 | 10/29/2025 | - | - | | | 14,535 | 12,268(a) | 445.35 | 10/28/2026 | - | - | | | 11,924 | 23,848(b ) | 462.04 | 10/31/2027 | - | - | | | - | 37,756(c ) | 509.46 | 10/25/2028 | - | - | | | - | - | - | n.a. | 3,474(d) | 2,031,422 | | | - | - | - | n.a. | 4,046(e) | 2,365,899 | | | - | - | - | n.a. | 4,374(f) | 2,557,697 | | D.P. Williams | 1 | 6,199(a) | 445.35 | 10/28/2026 | - | - | | | - | 12,048(b ) | 462.04 | 10/31/2027 | - | - | | | - | - | - | n.a. | 1,336(d) | 781,226 | | | - | - | - | n.a. | 1,556(e) | 909,871 | | | - | - | - | n.a. | 1,602(f) | 936,770 | | N.M. Westfall | 15,333 | - | 471.74 | 10/29/2025 | - | - | | | 10,754 | 5,378(a) | 445.35 | 10/28/2026 | - | - | | | 4,978 | 9,956(b ) | 462.04 | 10/31/2027 | - | - | | | - | 14,406(c ) | 509.46 | 10/25/2028 | - | - | | | - | - | - | n.a. | 1,008(d) | 589,428 | | | - | - | - | n.a. | 1,120(e) | 654,920 | | | - | - | - | n.a. | 1,054(f) | 616,327 |

  42. OUTSTANDING EQUITY AWARDS AT YEAR END 2023 ‎(Continued)

    OUTSTANDING EQUITY AWARDS AT YEAR END 2023 ‎(Continued)

  43. OUTSTANDING EQUITY AWARDS AT YEAR END 2023 ‎(Continued)

    | | Option Awards | | | | Stock Awards | | | | Number of | Number of | | | Number of | Market Value | | | Securities | Securities | | | Shares or Units | Of Shares | | | Underlying | Underlying | | | of Stock | or Units of | | | Unexercised | Unexercised | Option | | That Have | Stock | | | Options | Options | Exercise | Option | Not | That Have Not | | | Exercisable | Unexercisable | Price | Expiration | Vested | Vested (g) | | Name | (#) | (#) | ($) | Date | (#) | ($) | | S.S. Lee | 13,000 | - | 106.59 | 11/7/2024 | - | - | | | 9,000 | - | 413.19 | 10/29/2024 | - | - | | | 10,018 | - | 471.74 | 10/29/2025 | - | - | | | 8,066 | 4,033(a) | 445.35 | 10/28/2026 | - | - | | | 4,106 | 8,214(b ) | 462.04 | 10/31/2027 | - | - | | | - | 11,015(c ) | 509.46 | 10/25/2028 | | | | | - | - | - | n.a. | 616(d) | 360,206 | | | - | - | - | n.a. | 816(e) | 477,156 | | | - | - | - | n.a. | 804(f) | 470,139 | | M.D. Witzeman | 3,700 | - | 413.19 | 10/29/2024 | - | - | | | 7,948 | - | 471.74 | 10/29/2025 | - | - | | | 5,864 | 2,932(a) | 445.35 | 10/28/2026 | - | - | | | 2,849 | 5,700(b ) | 462.04 | 10/31/2027 | - | - | | | - | 12,540(c ) | 509.46 | 10/25/2028 | | | | | - | - | - | n.a. | 556(d) | 325,121 | | | - | - | - | n.a. | 646(e) | 377,749 | | | - | - | - | n.a. | 666(f) | 389,444 |

  44. OUTSTANDING EQUITY AWARDS AT YEAR END 2023 ‎(Continued)

    (a)All of the unvested stock option award will vest on October 28, 2024. (b)Half of the remaining stock option award will vest on October 31, 2024, and the remainder on October 31, 2025. (c)One third of the stock option award will vest on October 25, 2024, one third on October 25, 2025, and the remainder on October 25, 2026. (d)Award vests upon attainment of certain return or earnings targets on or prior to December 31, 2023. (e)Award vests upon attainment of certain return or earnings targets on or prior to December 31, 2024. (f)Award vests upon attainment of certain return or earnings targets on or prior to December 31, 2025. (g)Amounts are based on the $584.75 closing price of the Capital Stock on December 29, 2023.

  45. OPTION EXERCISES AND STOCK VESTED IN 2023

    OPTION EXERCISES AND STOCK VESTED IN 2023

  46. OPTION EXERCISES AND STOCK VESTED IN 2023

    | | Option Awards | | Stock Awards | | | | Number of | | Number of | | | | Shares | Value | Shares | Value | | | Acquired on | Realized on | Acquired on | Realized on | | | Exercise | Exercise | Vesting | Vesting | | Name | (#) | ($) | (#) | ($) | | K.J. McNamara | 53,700 | 7,097,576 | 4,245 | 2,186,684 | | D.P. Williams | 50,335 | 6,395,239 | 1,632 | 840,676 | | N.M. Westfall | 14,000 | 1,686,164 | 1,224 | 630,507 | | S.S. Lee | - | - | 815 | 419,823 | | M.D. Witzeman | 3,300 | 560,208 | 669 | 344,615 |

  47. Nonqualified Defined Contribution and other Nonqualified Deferred Compensation Plans

    Nonqualified Defined Contribution and other Nonqualified Deferred Compensation Plans The table below shows information concerning compensation deferred under the Excess Benefit Plan, the Deferred Compensation Plan, and the Supplemental Pension Plan during 2023 by each of the named executive officers in the Summary Compensation Table:

  48. NONQUALIFIED DEFERRED COMPENSATION IN 2023

    NONQUALIFIED DEFERRED COMPENSATION IN 2023

  49. NONQUALIFIED DEFERRED COMPENSATION IN 2023

    | | Executive | Registrant | Aggregate | Aggregate | | | Contributions | Contributions | Earnings | Balance | | | in Last FY | in Last FY | in Last FY | at Last FYE | | Name | ($) | ($)(a)(b) | ($) | ($)(b) | | K.J. McNamara | | | | | | Excess Benefit Plan | - | 896,769 | 4,754,619 | 41,646,382 | | Supplemental Pension and Life Insurance Plan | - | 26,356 | 73,012 | 1,098,253 | | D.P. Williams | | | | | | Excess Benefit Plan | 703,053 | 395,269 | 1,888,897 | 12,358,821 | | Supplemental Pension and Life Insurance Plan | - | 12,185 | 33,755 | 507,749 | | N.M. Westfall | | | | | | Excess Benefit Plan | - | 299,459 | 496,216 | 3,061,457 | | Supplemental Pension and Life Insurance Plan | - | - | - | - | | S.S. Lee | | | | | | Roto-Rooter Deferred Compensation Plan | - | 280,547 | 1,196,759 | 12,296,927 | | Supplemental Pension and Life Insurance Plan | - | 11,965 | 33,145 | 498,583 | | M.D. Witzeman | | | | | | Excess Benefit Plan | - | 131,850 | 259,520 | 2,270,364 | | Supplemental Pension and Life Insurance Plan | - | - | - | - |

  50. NONQUALIFIED DEFERRED COMPENSATION IN 2023

    (a)Amounts reported in All Other Compensation Table for 2023. (b)To the extent that earnings are reflected herein exceeded 120% of the long-term applicable federal rate in effect in July 2023, such earnings are reported for 2023 in the All Other Compensation Table.

  51. Potential Payment to Executives Upon Termination or Change in Control

    Potential Payment to Executives Upon Termination or Change in Control The following table represents the amounts of compensation that would be due to each of the named executive officers upon each of the listed scenarios pursuant to the Company’s plans and agreements, as if such event had occurred on December 31, 2023. The amounts shown are estimates of the amounts that would be payable in each circumstance, and the actual amounts payable will only be determined upon the actual occurrence of such event.

  52. Potential Payment to Executives Upon Termination or Change in Control

    | CHEMED CORPORATION | | | | | | | SUMMARY OF PAYOUTS UNDER CONTRACT/SEVERANCE/CONTROL AGREEMENTS | | | | | | | AS OF DECEMBER 31, 2023 | | | | | | | | K.J. | D.P. | N.M. | S.S. | M.D. | | | McNamara | Williams | Westfall | Lee | Witzeman | | Termination Without Cause | | | | | | | Severance payment (a) | $8,198,750 | $2,274,375 | $977,850 | $928,125 | $613,125 | | Pro-rated annual incentive | | | | | | | compensation (b) | 2,763,735 | 1,305,228 | 1,044,988 | 764,605 | 444,380 | | Welfare benefit continuation (c) | 37,676 | 44,643 | 26,550 | 35,741 | 17,619 | | Total | $11,000,161 | $3,624,246 | $2,049,388 | $1,728,471 | $1,075,124 | | Involuntary Termination for Cause or | | | | | | | Voluntary Termination | | | | | | | Severance payment | - | - | - | - | - | | Welfare benefit continuation | - | - | - | - | - | | Total | - | - | - | - | - | | Termination due to Death or Disability | | | | | | | Pro-rated annual incentive | | | | | | | compensation (b) | $2,763,735 | $1,305,228 | $1,044,988 | $764,605 | $444,380 | | Welfare benefit continuation | - | - | - | - | - | | Total | $2,763,735 | $1,305,228 | $1,044,988 | $764,605 | $444,380 | | Termination due to Retirement | | | | | | | Pro-rated annual incentive | | | | | | | compensation (b) | $2,763,735 | $1,305,228 | $1,044,988 | $764,605 | $444,380 | | Welfare benefit continuation | - | - | - | - | - | | Total | $2,763,735 | $1,305,228 | $1,044,988 | $764,605 | $444,380 | | Change in Control with No Termination | | | | | | | Annual incentive compensation | | | | | | | payment (b) | $2,763,735 | $1,305,228 | $1,044,988 | $764,605 | $444,380 | | Distribution of Performance awards (i)(j) | 4,923,595 | 1,846,641 | 1,271,247 | 947,295 | 767,192 | | 280G Gross-up payment (e) | - | - | - | - | - | | Total | $7,687,330 | $3,151,869 | $2,316,235 | $1,711,900 | $1,211,572 | | Qualifying Termination following or in | | | | | | | connection with a Change in Control | | | | | | | Severance payment (f) | $13,210,455 | $6,644,934 | $3,393,776 | $2,766,710 | $1,706,260 | | Annual incentive compensation | | | | | | | payment (b) | 2,763,735 | 1,305,228 | 1,044,988 | 764,605 | 444,380 | | Welfare benefit continuation and | | | | | | | perquisite continuation and | | | | | | | outplacement assistance (h) | 1,133,998 | 306,355 | 213,136 | 368,386 | 157,642 | | Company contribution to deferred | | | | | | | compensation plans (g) | 2,843,625 | 1,296,612 | 648,418 | 624,624 | 313,200 | | Accelerated vesting of stock options (d) | 12,362,569 | 4,809,897 | 5,165,980 | 4,027,707 | 3,219,347 | | Distribution of performance awards (i) | 4,923,595 | 1,846,641 | 1,271,247 | 947,295 | 767,192 | | 280G Gross-up payment (e) | - | - | - | - | - | | Total | $37,237,977 | $16,209,667 | $11,737,545 | $9,499,327 | $6,608,021 |

  53. Potential Payment to Executives Upon Termination or Change in Control

    | (a) The amounts shown are based on the following base salaries as of December 31, 2023: for Mr. McNamara, $1,639,750; for Mr. Williams, $909,750; for Mr. Westfall, $651,900; for Mr. Lee, $618,750; and for Mr. Witzeman, $408,750. The severance payment is a lump-sum payment equal to: for Mr. McNamara, five times his base salary; for Mr. Williams, two and a half times his base salary; and for each of Messrs. Lee, Westfall and Witzeman, one and a half times base salary. | | (b) The pro-rated annual incentive compensation is based on the average of the prior three years annual incentive compensation (2021, 2022 and 2023). |

  54. Potential Payment to Executives Upon Termination or Change in Control

    | (c) The amounts shown consist of, for the period specified in the employment agreements of Messrs. McNamara and Williams, or, for Messrs. Lee, Westfall and Witzeman, in the Senior Executive Severance Policy, the continued provision of welfare benefits under the Company’s welfare benefit plans. With respect to these benefits, the amounts shown have been calculated based upon the current premiums paid by the Company for such benefits. | | (d) The value of each stock option award subject to acceleration was determined by multiplying the number of stock option awards by the excess, if any, of $584.75 (the closing price of one share of Capital Stock on December 31, 2023) over the exercise price of such stock option awards. | | (e) The amount of the excise taxes imposed pursuant to Section 4999 of the Code was determined by multiplying by 20% the “excess parachute payment” that would arise in connection with payments made to the applicable named executive officer upon the triggering event. The excess parachute payment was determined in accordance with the provisions of Section 280G of the Code. The amount of the gross-up payment to make each named executive officer whole on an after-tax basis for the excise taxes imposed under Section 4999 of the Code was determined assuming a federal tax rate of 37% and 5.0% state tax rate for each named executive officer. | | (f) The severance payment is equal to: for each of Messrs. McNamara and Williams, three times the sum of his current base salary and average annual incentive compensation for the 2021, 2022 and 2023 fiscal years as shown in footnote (a); for each of Messrs. Lee, Westfall and Witzeman, two times the sum of current base salary and average annual incentive compensation for the 2021, 2022 and 2023 fiscal years as shown in footnote (a). | | (g) The amounts shown assume that Messrs. McNamara and Williams elect to receive their severance benefits under the Change in Control Plan, which will result in each receiving greater benefits than he would be entitled to receive under his employment agreement. Accordingly, the amounts shown consist of, for the period specified in the Change in Control Plan, (i) the continued provision of the perquisites (if any) listed in the All Other Compensation Table at 2023 levels, (ii) the continued provision of benefits under the Company’s welfare benefit plans, and (iii) outplacement assistance. With respect to the continued provision of benefits under the Company’s welfare benefit plans, the amounts shown have been calculated based upon the current premiums paid by the Company for such benefits. | | (h) The amounts shown equal the amount of Company contributions that would have been made on the executive’s behalf in the Company’s qualified and non-qualified defined contribution plans had the executive continued participation in such plans, at the level in effect on December 31, 2023, for a three-year period following a Qualifying Termination for Messrs. McNamara and Williams, and a two-year period following a Qualifying Termination for Messrs. Lee, Westfall and Witzeman. | | (i) The amounts shown are the December 31, 2023, market value of the performance share units granted on February 18, 2022, and February 17, 2023 at target levels. | | (j) Payouts for performance share units are forfeited in the event of a termination other than for death, disability, or retirement other than in connection with a change in control. In the case of a termination for death, disability, or retirement, the event does not change any of the original payment terms of the awards. |

  55. Executive Pay Ratio

    Executive Pay Ratio The compensation of our Chief Executive Officer in 2023 was approximately 234 times the median pay of our full-time, seasonal, and part-time employees. We identified the median employee by including all W-2 employees as of December 31, 2023 who had received W-2 wages during the calendar year. Of the 14,873 total employees of Chemed and its subsidiaries meeting the above criteria during 2023, 2,226 were part-time or seasonal. We annualized such earnings for full-time employees who started work on or after January 1, 2023. We then used the Box 1, W-2 data to identify the median employee. For computing the ratio, we calculated such employee’s total annual compensation, including: a.Salary or hourly pay, as applicable b.Overtime or premium pay, if applicable c.Bonuses and commissions, if applicable d.Company contributions to 401K plans, and e.Company cost of term life insurance We calculated the reasonable estimate pay ratio by comparing our Chief Executive Officer’s compensation pursuant to Item 402(c)(2)(x), as detailed in the Summary Compensation Table. We divided this by the median employee’s total annual compensation. The ratio is $12,625,106 divided by $53,898.84 = 234 to 1.

  56. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE In accordance with the SEC’s disclosure requirements regarding pay versus performance (“PVP”) this section presents the SEC defined Compensation Actually Paid (“CAP”). We are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three years. In determining the CAP to our NEO’s, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table. Note that for our NEO’s, other than our principal executive officer, compensation is reported as an average. Compensation decisions made by the Company are made independently of this disclosure requirement. CAP is a supplemental disclosure to be viewed alongside performance measures as an addition to the strategy of compensation discussed in the Compensation Discussion and Analysis included earlier in this proxy statement.

  57. PAY VERSUS PERFORMANCE

    | | | | Average Summary | Average | | | | | | | Summary | Compensation | Compensation | Compensation | | Peer Group | | | | | Compensation | Actually | Table Total | Actually Paid | Total | Total | Net | | | | Table for | Paid to | For Non-PEO | Non-PEO | Shareholder | Shareholder | Income | Adjusted | | | PEO | PEO | NEOs | NEOs | Return | Return | (000) | EPS | | Year | ($) | ($)(1) | ($)(1) | ($)(2) | ($) | ($)(3) | ($)(a) | ($)(b)(4) | | 2023 | 12,625,106 | 19,202,131 | 3,681,708 | 5,745,392 | 134.68 | 151.02 | 272,509 | 21.21 | | 2022 | 11,609,033 | 10,125,511 | 3,852,849 | 3,590,451 | 117.23 | 126.17 | 249,624 | 19.91 | | 2021 | 11,659,622 | 13,278,416 | 3,807,705 | 4,473,652 | 121.14 | 128.47 | 268,550 | 20.25 | | 2020 | 11,958,423 | 21,517,491 | 3,723,769 | 6,310,889 | 121.59 | 130.14 | 319,466 | 18.08 |

  58. PAY VERSUS PERFORMANCE

    (a)U.S. GAAP, as reported. (b)Adjusted Earnings Per Shares as used to calculated key executive incentive compensation, as shown on page 19. ‎ (1)The PEO and the Non-PEO NEO’s for each year are as follows: (a)

  59. PAY VERSUS PERFORMANCE

    | Named Executive Officers | Years Included | | Kevin J. McNamara (PEO) | 2020-2023 | | David P. Williams | 2020-2023 | | Nicholas M. Westfall | 2020-2023 | | Spencer S. Lee | 2020-2023 | | Michael D. Witzeman | 2020-2023 |

  60. PAY VERSUS PERFORMANCE

    (2)Below are the reconciliations of the compensation values reported in the Summary Compensation Table to the Pay vs. Performance Table for the PEO and the Non-PEO NEOs:

  61. PAY VERSUS PERFORMANCE

    | PEO | 12/31/2020 | 12/31/2021 | 12/31/2022 | 12/31/2023 | | Summary Compensation Table Total | $11,958,423 | $11,659,622 | $11,609,033 | $12,625,106 | | Aggregate change in the actuarial present value of pension | (44,225) | (39,857) | (31,266) | (25,165) | | Actuarially determined service costs of pension | 26,356 | 26,356 | 26,356 | 26,356 | | Values reported in the stock awards column on | | | | | | Summary Compensation Table | (2,168,162) | (1,893,990) | (2,135,216) | (2,511,638) | | Values reported in the stock options column on | | | | | | Summary Compensation Table | (4,021,813) | (3,566,649) | (3,744,820) | (4,200,094) | | Year-end fair value for stock awards granted in covered fiscal year | | | | | | (outstanding and unvested) | 2,385,977 | 2,987,111 | 2,510,610 | 3,221,154 | | Year-end fair value for stock options granted in covered fiscal year | | | | | | (outstanding and unvested) | 4,493,272 | 4,986,266 | 4,944,102 | 5,933,790 | | Prior year stock awards fair value (CY vs. PY change only) | 1,142,283 | (1,042,355) | (1,545,245) | 1,317,900 | | Prior year stock options fair value (CY vs. PY change only) | 7,745,380 | 161,912 | (1,508,043) | 2,814,722 | | Total adjustments | 9,559,068 | 1,618,794 | (1,483,522) | 6,577,025 | | Total Compensation Actually Paid | $21,517,491 | $13,278,416 | $10,125,511 | $19,202,131 |

  62. PAY VERSUS PERFORMANCE

    | NEO | 12/31/2020 | 12/31/2021 | 12/31/2022 | 12/31/2023 | | Summary Compensation Table Total | $3,723,769 | $3,807,705 | $3,852,849 | $3,681,708 | | Aggregate change in the actuarial present value of pension | (10,131) | (9,130) | (7,162) | (5,765) | | Actuarially determined service costs of pension | 6,038 | 6,038 | 6,038 | 6,038 | | Values reported in the stock awards column on | | | | | | Summary Compensation Table | (554,185) | (479,222) | (545,942) | (592,308) | | Values reported in the stock options column on | | | | | | Summary Compensation Table | (1,222,280) | (1,347,630) | (1,409,987) | (1,055,725) | | Year-end fair value for stock awards granted in covered fiscal year | | | | | | (outstanding and unvested) | 609,859 | 755,806 | 641,924 | 759,630 | | Year-end fair value for stock options granted in covered fiscal year | | | | | | (outstanding and unvested) | 1,365,563 | 1,884,025 | 1,861,536 | 1,491,502 | | Prior year stock awards fair value (CY vs. PY change only) | 234,760 | (189,503) | (391,251) | 336,753 | | Prior year stock options fair value (CY vs. PY change only) | 2,157,496 | 45,563 | (417,554) | 1,123,559 | | Total adjustments | 2,587,120 | 665,947 | (262,398) | 2,063,684 | | Total Compensation Actually Paid | $6,310,889 | $4,473,652 | $3,590,451 | $5,745,392 |

  63. PAY VERSUS PERFORMANCE

    (3)The Company’s Peer Group is as follows:

  64. PAY VERSUS PERFORMANCE

    | ABM Industries, Inc. | Pediatrix Medical Group | | Acadia Healthcare Co., Inc. | (formerly MEDNAX, INC.) | | Amedisys, Inc. | RadNet, Inc. | | Brookdale Senior Living, Inc. | Rollins, Inc. | | Clean Harbors, Inc. | Select Medical Holdings Corp. | | Comfort Systems USA, Inc. | Stericycle, inc. | | Encompass Health Corp. | Team, Inc. | | Healthcare Services Group, Inc. | Tetra Tech, Inc. | | National Healthcare Corp. | The Ensign Group, Inc. |

  65. PAY VERSUS PERFORMANCE

    (4)The Company selected measure is Adjusted Earnings Per Share, which is described below. The following are the financial measures which in our assessment represent the most important financial performance measures we use to link compensation actually paid to our named executive officers for 2023 to company performance:

  66. PAY VERSUS PERFORMANCE

    | Measure | Explanation | | Adjusted Earnings Per Share | A non-GAAP measure that consists of diluted net income per share that is then adjusted to eliminate the effect of certain items that the Compensation Committee determines in its discretion should be excluded for compensation purposes. | | Total Stockholder Return | A measure of financial performance, indicating the total amount a stockholder earns from an investment in the Company. Based on the change in stock price over a given period of time, and assuming the reinvestment of dividends. | | Return on Assets | A financial ratio that indicates how profitable the Company is in relation to its total assets. |

  67. PAY VERSUS PERFORMANCE

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