DEF 14A of Health Catalyst, Inc., Apr 29, 2024

DEF 14A of Health Catalyst, Inc.

Filed Apr 29, 2024 · FY20230001636422-24-000058

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. Number of Directors; Board Structure

    Number of Directors; Board Structure We currently have seven directors on our board. Our board is divided into three staggered classes of directors. One class is elected each year at the annual meeting of stockholders for a term of three years. The term of the Class II directors expires at the Annual Meeting. The term of the Class III directors expires at the 2025 annual meeting of stockholders and the term of the Class I directors expires at the 2026 annual meeting of stockholders. After the initial terms expire, directors are expected to be elected to hold office for a three-year term or until the election and qualification of their successors in office.

  3. Nominees

    Nominees Our board has nominated Daniel Burton, John A. Kane, and Julie Larson-Green as Class II directors to hold office until the 2027 annual meeting of stockholders or until their successors are duly elected and qualified, subject to their earlier resignation or removal. Each of the nominees is a current Class II director and member of our board and has consented to serve if elected. Unless you direct otherwise through your proxy voting instructions, the persons named as proxies will vote all proxies received “FOR” the election of each nominee. If any nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by our present board. In the alternative, the proxies may vote only for the remaining nominees, leaving a vacancy on our board. Our board may fill such vacancy at a later date or reduce the size of our board. We have no reason to believe that any of the nominees will be unwilling or unable to serve if elected as a director.

  4. Recommendation of our Board

    Recommendation of our Board OUR BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES. The biographies of each of the nominees and continuing directors below contain information regarding each such person’s service as a director, business experience, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused our board to determine that the person should serve as a director of the company. In addition to the information presented below regarding each nominee’s and continuing director’s specific experience, qualifications, attributes, and skills that led our board to the conclusion that he or she should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty, and adherence to high ethical standards. Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our company and our board. Finally, we value our directors’ experience in relevant areas of business management and on other boards of directors and board committees. Our corporate governance guidelines also dictate that a majority of our board be comprised of directors whom our board has determined are “independent” directors under the published listing requirements of the Nasdaq Stock Market LLC (the Nasdaq).

  5. Directors

    Directors The following table sets forth information regarding our directors as of March 31, 2024:

  6. Directors

    | Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | | Employee Directors: | | | | | | | | Daniel Burton | II | 49 | Chief Executive Officer and Director | 2011 | 2024 | 2027 | | Independent Directors: | | | | | | | | John A. Kane(1) | II | 71 | Chair and Director | 2016 | 2024 | 2027 | | Julie Larson-Green(2)(4) | II | 62 | Director | 2020 | 2024 | 2027 | | Duncan Gallagher(1)(3) | III | 64 | Director | 2017 | 2025 | — | | Matthew Kolb | I | 42 | Director | 2023 | 2026 | — | | Anita V. Pramoda(2)(4) | I | 49 | Director | 2016 | 2026 | — | | S. Dawn Smith(1)(4) | I | 60 | Director | 2020 | 2026 | — |

  7. Directors

    | (1) Member of our audit committee. | | (2) Member of our compensation committee. | | (3) Member of our nominating and corporate governance committee. | | (4) Member of our transactions committee. |

  8. Information Concerning Director Nominees

    Information Concerning Director Nominees Daniel Burton. Mr. Burton has served as our Chief Executive Officer since October 2012 and a member of our board of directors since September 2011. Mr. Burton served as our President from September 2011 to October 2012, and as an adviser from January 2011 to September 2011. Prior to that, Mr. Burton co-founded HB Ventures, LLC (HB Ventures), a private investment firm. Prior to Health Catalyst and HB Ventures, Mr. Burton led the Corporate Strategy Group at Micron Technology, Inc. He also spent eight years with HP Inc. (HPQ) in strategy and marketing management roles. Before joining HPQ he was an associate consultant with the Boston Consulting Group, where he advised healthcare systems and technology companies. Mr. Burton holds a B.S. from Brigham Young University and an M.B.A. from Harvard Business School. We believe that Mr. Burton is qualified to serve as a member of our board of directors due to his experience as our Chief Executive Officer and his leadership experience in technology and healthcare businesses. John A. Kane. Mr. Kane has served as a member of our board of directors since February 2016 and was appointed Chair of our board in May 2021. Mr. Kane currently serves as a business consultant for various organizations. Mr. Kane served as the interim Chief Financial Officer of athenahealth, Inc., a public healthcare company during his tenure, from July 2017 to January 2018. Mr. Kane was formerly Senior Vice President - Finance, Chief Financial Officer, and Treasurer of IDX Systems Corporation (IDXC), a leading provider of software, services, and technologies for healthcare provider organizations and public company during his tenure, from 1984 until the acquisition of IDXC by GE Healthcare in January 2006. Prior to joining IDXC, Mr. Kane was an audit manager at Ernst & Young, LLP, in Boston, Massachusetts. Mr. Kane also served as a director and chair of the audit committee of Merchants Bancshares, Inc., a public company during his tenure, from 2005 until 2014 and athenahealth, Inc. from 2007 until February 2019. He currently serves on the board of directors of several privately-held companies. Mr. Kane holds a B.S. and M.Acc. from Brigham Young University. We believe that Mr. Kane is qualified to serve as a member of our board of directors due to his background as a member of the board and audit committees of other public and private companies and his leadership experience in technology and healthcare businesses. Julie Larson-Green. Ms. Larson-Green has served as a member of our board of directors since January 2020. Since September 2021, Ms. Larson-Green has served as Chief Technology Officer of Magic Leap, Inc., a technology company. Between January 2018 and February 2021, Ms. Larson-Green served as the Chief Experience Officer at Qualtrics International Inc. From 1993 to 2017, she served in a variety of executive leadership and product development roles at Microsoft, including leadership in building Microsoft Office, Windows, Internet Explorer, Xbox, and Surface. She has served on the board of directors of View, Inc. since June 2021. Ms. Larson-Green holds a B.A. in business administration and management from Western Washington University and Masters Degree in computer software engineering from Seattle University. We believe that Ms. Larson-Green is qualified to serve as a member of our board of directors based on her executive leadership experience, including Chief Experience Officer of a technology company, and her knowledge of the technology industry.

  9. Information Concerning Continuing Directors

    Information Concerning Continuing Directors Duncan Gallagher. Mr. Gallagher has served as a member of our board of directors since May 2017. Since March 2017, Mr. Gallagher has served as President of Donegal Advisory Services, LLC, a healthcare consulting company. From August 2009 to January 2017, Mr. Gallagher held various positions at Allina Health, a healthcare services company, including Chief Financial Officer and Chief Administrative Officer. Mr. Gallagher holds a B.S. from the University of South Dakota and an M.B.A. from the University of Minnesota. We believe that Mr. Gallagher is qualified to serve as a member of our board of directors based on his experience as a Chief Financial Officer and director of healthcare services companies and his knowledge of the healthcare industry. Matthew Kolb. Mr. Kolb has been chosen to serve as a member of our board of directors effective July 1, 2023. Since September 2019, Mr. Kolb has served as the Executive Vice President and Chief Operating Officer of Carle Health, a nonprofit health system. From July 2014 to September 2019, Mr. Kolb served in a variety of roles at Carle Health, including Chief Administrative Officer. From August 2007 to July 2014, Mr. Kolb held various positions at Allina Health, a healthcare services company, including Vice President of the Neuroscience Institute. Mr. Kolb holds a B.A. from the University of Illinois at Urbana-Champaign, an M.H.A. from the University of Missouri-Columbia, and a J.D. from the University of Missouri-Columbia, School of Law. We believe that Mr. Kolb is qualified to serve as a member of our board of directors based on his executive leadership experience, including serving as Chief Operating Officer of a health system, and his knowledge of the healthcare industry. Anita V. Pramoda. Ms. Pramoda has served as a member of our board of directors since April 2016. Since 2014, Ms. Pramoda has served as the Chief Executive Officer of Owned Outcomes, Inc., a healthcare software company. Ms. Pramoda also has served as an Executive Advisor to Technology Crossover Ventures, a venture capital and private equity firm, since 2012. Previously, Ms. Pramoda served as the Chief Executive Officer of Ediom LLC, a healthcare analytics company, until its sale to Vizient, Inc. in 2018. She currently serves on the board of Duly Health and Care IL, Press Ganey Associates, Healthedge Software, Inc., and Healthcare Assurance Acquisition Corporation. Previously, Ms. Pramoda served on the board of directors and audit committee of GoHealth, Inc., a public health insurance marketplace company, from 2020 to 2022, the board of directors of Allscripts, Inc., a public healthcare software company, from 2013 to 2016 and the board of the Federal Reserve Bank of San Francisco (Los Angeles Branch) from 2016 to 2021. Ms. Pramoda holds a B.E. from the University of Madras and an M.B.A. from The Wharton School of the University of Pennsylvania. We believe that Ms. Pramoda is qualified to serve as a member of our board of directors based on her experience as a Chief Executive Officer of a healthcare software company, experience serving on public company boards (including audit committees), and her knowledge of the healthcare industry. S. Dawn Smith. Ms. Smith has served as a member of our board of directors since January 2020. Ms. Smith has served as President of Cologix, Inc. (Cologix) since August 2018, where she helps drive strategy and execution for the firm’s extensive infrastructure of secure, hyperscale edge data center sites and solutions. Ms. Smith also served as Chief Operating Officer of Cologix from August 2018 to October 2022. Her experience with the management and shepherding of data across multiple industries gives her unique perspective. She previously served in legal advisory roles at Wilson Sonsini Goodrich & Rosati and as a partner at Morrison & Foerster LLP, where she practiced for nearly a decade in corporate and securities law, including mergers and acquisitions, public company corporate governance, compliance, and venture capital transactions. She also served as senior vice president, Chief Legal Officer, and Chief Compliance Officer at VMware, Inc., where she led a team of more than 150 team members and was responsible for global legal, compliance, and government relations. She also previously served as executive vice president and Chief Legal Officer at McAfee Corp. Ms. Smith currently serves on the board of directors of the Minority Corporate Counsel Association. Ms. Smith holds a B.S. from the U.S. Naval Academy, a J.D. from Stanford Law School, and an M.B.A. from Providence College. We believe that Ms. Smith is qualified to serve as a member of our board of directors based on her executive leadership experience, including serving as a Chief Operating Officer, Chief Legal Officer, and Chief Compliance Officer of technology companies, and her knowledge of the technology industry.

  10. Identifying and Evaluating Director Nominees

    Identifying and Evaluating Director Nominees Our board has delegated to our nominating and corporate governance committee the responsibility of identifying suitable candidates for nomination to our board (including candidates to fill any vacancies that may occur) and assessing their qualifications in light of the policies and principles in our corporate governance guidelines and the committee’s charter. Our nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive background checks, or any other means that our nominating and corporate governance committee deems to be appropriate in the evaluation process. Our nominating and corporate governance committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our board. Based on the results of the evaluation process, our nominating and corporate governance committee recommends candidates for our board’s approval as director nominees for election to our board.

  11. Non-Employee Director Compensation

    Non-Employee Director Compensation During the fiscal year ended December 31, 2023, we provided compensation to our non-employee directors, in the form of cash retainers (prorated for partial years of service) and equity awards with total values as set forth below:

  12. Non-Employee Director Compensation

    | Annual Retainer for Board Membership | | | | Annual service on the board of directors | $ | 45,000 | | Additional retainer for annual service as non-executive Chair of the board | 45,000 | | | Additional Annual Retainer for Committee Membership | | | | Annual service as chair of the audit committee | 22,500 | | | Annual service as member of the audit committee (other than chair) | 10,000 | | | Annual service as chair of the compensation committee | 15,000 | | | Annual service as member of the compensation committee (other than chair) | 7,500 | | | Annual service as chair of the nominating and corporate governance committee | 10,000 | | | Annual service as member of the nominating and corporate governance committee (other than chair) | 5,000 | | | Annual service as chair of the transactions committee | 10,000 | | | Annual service as member of the transactions committee (other than chair) | 5,000 | |

  13. Non-Employee Director Compensation

    The board and committee membership retainers in the above table were paid in cash until our 2023 Annual Meeting on June 14, 2023. Beginning with the 2023 Annual Meeting, each director was granted RSUs with a total grant date fair value equal to the retainer amounts listed above in addition to an annual equity long-term incentive award of RSUs having a fair market value of $140,000 (collectively, the Annual Grant). The annual equity long-term incentive award and the portion of the Annual Grant related to the annual retainer for board membership amounts in the table above will vest in full on the earlier of the one-year anniversary of the grant date or on the date of the annual meeting of stockholders following the grant date, subject to the applicable director’s continued service through the applicable vesting date. The portion of the Annual Grant related to the additional annual retainer for committee membership will vest in an amount equal to 25% of the value of such grants, rounded to the nearest whole share, on each of September 1, December 1, March 1, and June 1 following such grant, subject to the applicable director’s continued service through the applicable vesting date. Our policy provides that, upon the initial election of the relevant non-employee director, each new non-employee director will be granted a one-time grant of restricted stock units (RSUs) having a fair market value of $225,000 (the Initial Grant). The Initial Grant will vest in three equal annual installments over three years, subject to the applicable director’s continued service through the applicable vesting date. The Initial Grant and Annual Grant are subject to full accelerated vesting upon a Sale Event (as defined in our 2019 Stock Option and Incentive Plan (the 2019 Plan)). We will reimburse all reasonable out-of-pocket expenses incurred by directors for their attendance at meetings of our board of directors or any committee thereof. Employee directors will receive no additional compensation for their service as a director. The aggregate amount of compensation, including both equity compensation and cash compensation (but excluding the aforementioned reimbursed expenses), paid to any non-employee director in a calendar year period will not exceed $1,000,000 in the first calendar year such individual becomes a non-employee director and $500,000 in any other year. The following table presents the outstanding options and RSUs held as of December 31, 2023 and the total compensation for each person who served as a non-employee director during fiscal 2023. Other than as set forth in the table below, we did not pay any compensation or make any equity awards to our non-employee directors during fiscal 2023. Mr. Burton, who is our Chief Executive Officer, and Mr. Kolb, who joined our board in July 2023 and waived his rights to compensation, did not receive any compensation for their service as directors except for reimbursement of out-of-pocket expenses related to such services. The compensation received by Mr. Burton, as a named executive officer, is presented in the “Executive Compensation — 2023 Summary Compensation Table”.

  14. Non-Employee Director Compensation

    | | Stock Awards Outstanding as of December 31, 2023 | | Total Director Compensation for fiscal year ended December 31, 2023 | | | | Name | Options | RSUs | Fees Earned or Paid in Cash($) | Stock Awards($)(1) | Total($) | | Duncan Gallagher | 62,500 | 15,408 | $29,431 | $215,337 | $244,768 | | John A. Kane | 5,209 | 17,529 | 50,938 | 265,223 | 316,161 | | Matthew Kolb(2) | — | — | — | — | — | | Julie Larson-Green | — | 15,073 | 26,035 | 207,458 | 233,493 | | Anita V. Pramoda | — | 15,408 | 29,431 | 215,337 | 244,768 | | S. Dawn Smith | — | 15,184 | 27,167 | 210,081 | 237,248 | | Mark B. Templeton(3) | — | 15,184 | 27,167 | 210,081 | 237,248 |

  15. Non-Employee Director Compensation

    _________________

  16. Non-Employee Director Compensation

    | (1) The amounts reported represent the aggregate grant date fair value of the restricted stock units awarded to the non-employee directors in the fiscal year ended December 31, 2023, calculated in accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC), Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The amounts reported in this column reflect the accounting cost for these RSUs and do not correspond to the actual economic value that may be received by the non-employee directors upon any settlement of RSUs or any sale of the underlying shares of common stock. | | (2) Mr. Kolb waived his rights to compensation and therefore will not receive any compensation in connection with serving on the Board except for reimbursement of out-of-pocket expenses related to such service, pursuant to the Company's non-employee director compensation policy. | | (3) Mr. Templeton voluntarily resigned, effective March 1, 2024. Mr. Templeton's resignation is not the result of any disagreement or conflict with the Company. |

  17. Non-Employee Director Compensation

    PROPOSAL TWO:

  18. Highlights of Fiscal 2023 Executive Compensation Program

    | • | 100% of the 2023 Bonus Plan target for all team members was payable through cash, based on selected company performance objectives, including (among other factors discussed in more detail) an improvement category that includes, among other factors, client satisfaction and team member satisfaction scores, measurable improvements for clients, and the percentage of projects delivered on time; and a growth category that includes, among other factors, new DOS Subscription Client growth, Dollar-based Retention Rate, and annual recurring revenue (ARR) + non-recurring revenue (NRR) gross bookings. The bonus pool is funded based on Adjusted EBITDA achievement thresholds, and the achievement and payout is capped. | | • | Mr. Burton volunteered to reduce his salary to $0 from July 2022 through December 2023, and forego any cash bonus in fiscal 2022 and fiscal 2023 to lead by example as part of our cost reduction initiatives, and our compensation committee approved. Mr. Burton also elected to not receive any additional equity grants during this period. Our compensation committee believes that Mr. Burton’s existing equity ownership position, including his purchase of Health Catalyst shares on the open market in fiscal 2022, 2023, and 2024, sufficiently aligns his interests with those of our stockholders, and incentivizes performance and engagement in his role. |

  19. Highlights of Fiscal 2023 Executive Compensation Program

    Long-Term Incentive Compensation – We granted long-term incentive compensation in the form of service-based vesting RSUs that may be settled for shares of our common stock to align the long-term incentive opportunities of all of our team members, including our named executive officers, with the interests of our stockholders. In order to further align the interests of our named executive officers with our long-term growth and interests of our stockholders, each named executive officer as of February 22, 2023, with the exception of Daniel Burton, was granted executive PRSUs with a three-year measurement period that includes performance targets for Total Shareholder Return (TSR) Achievement, Revenue Growth Rate Achievement, and Adjusted EBITDA Margin Achievement, as part of their typical, annual long-term incentive plan (LTIP) equity grants. The performance targets are each weighted equally and these PRSUs may vest in an amount up to the amount granted, subject to satisfaction of the performance targets. The number of PRSUs that will vest for the 2023, 2024, and 2025 vesting periods will be calculated as follows: (i) the performance achievement for the applicable vesting period, multiplied by (ii) approximately 33.33% of the PRSUs for each of the 2023, 2024 and 2025 vesting periods, each rounded to the nearest whole share. The grant date fair values of these equity awards are set forth in the “Fiscal 2023 Summary Compensation Table” and the “Fiscal 2023 Grants of Plan-Based Awards Table” below. Other recent updates made in fiscal 2023 to our executive compensation practices and policies include the following:

  20. Highlights of Fiscal 2023 Executive Compensation Program

    Fiscal 2023 Target Compensation Mix – As shown in the graphic below, on average, 79% of the target fiscal 2023 annual compensation for the other named executive officers was at risk (i.e., variable) based on our performance, our stock price, or a combination of the two. The percentages for the PRSUs and RSUs below are calculated based on the grant date fair value assuming target achievement of performance measures. The target fiscal 2023 annual compensation for our CEO was $0 due to Mr. Burton voluntarily declining all salary, bonus, and new equity award grants in fiscal 2023.

  21. Highlights of Fiscal 2023 Executive Compensation Program

    __________ The average named executive officer’s base salary and cash bonus amounts presented in the chart above are based on the actual amounts paid out for fiscal 2023. The actual non-variable CEO compensation was $0 as a result of Mr. Burton voluntarily electing to waive his eligibility for participation in our 2023 Bonus Plan and reduce his salary to $0 during the period from July 2022 through December 2023, with the aim of leading by example, as part of our cost reduction initiatives. Total PRSUs presented in the chart above represent the estimated December 31, 2023 fair value of the amounts granted in fiscal 2023 that were outstanding as of December 31, 2023. The actual long-term RSU amount in the chart above was calculated as the fair value as of the vesting date for RSUs that vested during fiscal 2023 plus the estimated December 31, 2023 fair value of outstanding RSUs that were outstanding as of December 31, 2023.

  22. Looking Ahead - 2024 Compensation Update

    | • | In order to further align the interests of our named executive officers with our long-term growth and interests of our stockholders, each named executive officer as of February 20, 2024, including Daniel Burton, was granted executive PRSUs with a three-year measurement period that includes performance targets for TSR Achievement (weighted 25%), Revenue Growth Rate Achievement (weighted 25%), and Adjusted EBITDA Margin Achievement (weighted 50%), as part of their typical, annual LTIP equity grants. These PRSUs may vest in an amount up to the amount granted, subject to satisfaction of the performance targets. The number of PRSUs that will vest for the 2024, 2025, and 2026 vesting periods will be calculated as follows: (i) the performance achievement for the applicable vesting period, multiplied by (ii) approximately 33.33% of the PRSUs for each of the 2024, 2025, and 2026 vesting periods, each rounded to the nearest whole share. | | • | Mr. Burton’s 2024 LTIP equity grants are comprised of 50% RSUs and 50% PRSUs. The 2024 LTIP equity grants to our named executive officers are comprised of 70% RSUs and 30% PRSUs. | | • | Mr. Burton volunteered to reduce his salary to $0 from July 2022 through December 2023 and forego any cash bonus in fiscal 2022 and fiscal 2023 to lead by example as part of our cost reduction initiatives, and our compensation committee approved the same. Mr. Burton also elected to not receive any additional equity grants during this period. For fiscal 2024 the base salary and annual bonus for Mr. Burton were reviewed in light of salary market data, local market conditions, and company and individual performance, some of which were informed by our compensation committee’s engagement of an independent compensation consultant, Aon. Informed by that analysis and input, our board approved an increase in Mr. Burton’s annual base salary to $525,000 with a target annual bonus of 100% of his base salary. On February 20, 2024, Mr. Burton was granted 250,000 RSUs and 250,000 PRSUs as part of our typical LTIP grant for our CEO. Our compensation committee believes that the RSUs and PRSUs granted in fiscal 2024 along with Mr. Burton’s existing equity ownership position, including his purchase of Health Catalyst shares on the open market in 2022, 2023 and 2024, sufficiently align his interests with those of our stockholders, and incentivizes performance and engagement in his role. | | • | 100% of the 2024 Bonus Plan target for all team members will be paid through cash, based on selected company performance objectives similar to those in place for fiscal 2023. The bonus pool is funded based on Adjusted EBITDA achievement thresholds, and the achievement and payout is capped. |

  23. Executive Compensation Philosophy, Objectives, and Design

    | • | attract, motivate, incentivize, and retain employees at the executive level who contribute to our long-term success; | | • | provide compensation packages to our executives that are competitive and reward the achievement of our business objectives and effectively align their interests with those of our stockholders; and | | • | effectively align our executives’ interests with those of our stockholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders. |

  24. Compensation Committee Oversight of Executive Compensation Process

    Compensation Committee Oversight of Executive Compensation Process Our compensation committee discharges many of the responsibilities of our board relating to the compensation of our executive officers and the non-employee members of our board (described in the section titled “Corporate Governance—Non-Employee Director Compensation” above), and regularly reports to our board on its discussions, decisions and other actions. Our compensation committee has overall responsibility for overseeing our compensation structure, policies, and programs generally, and for overseeing and evaluating the compensation plans, policies, and practices applicable to our executive officers. Our compensation committee has the authority to retain, and has retained, an independent compensation consultant to provide support to the committee in its review and oversight of our executive compensation program. Our compensation committee reviews the base salary levels, short-term incentive compensation opportunities, and long-term incentive compensation opportunities of our named executive officers each fiscal year at the beginning of the year, or more frequently as warranted. Long-term incentive compensation is granted on a regularly-scheduled basis, as described in the section titled “Other Compensation Policies—Equity Award Grant Policy” below.

  25. Role of the Compensation Committee

    | • | Our performance against the corporate performance objectives established by our compensation committee and our board; | | • | our financial performance relative to our compensation peer group; | | • | the compensation levels and practices of our compensation peer group; | | • | each individual executive officer’s skills, experience, and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; | | • | the scope of each individual executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; and | | • | the performance of each individual executive officer, based on a subjective assessment of their contributions to our overall performance, ability to lead his or her function, and ability to work as part of a team. |

  26. Role of the Compensation Consultant

    Role of the Compensation Consultant Our compensation committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our executive compensation programs and related policies to assist it by providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from the committee’s annual executive compensation review. For fiscal 2023, our compensation committee retained Aon’s Human Capital Solutions practice, a division of Aon plc (Aon), a top global consulting firm, to provide it with market information, analysis, and other advice relating to executive compensation on an ongoing basis. Aon was engaged to, among other things:

  27. Role of the Compensation Consultant

    | • | assist in developing a relevant group of peer companies to help our compensation committee determine the appropriate level of overall compensation for our executive officers; | | • | assess each separate element of compensation, with a goal of ensuring that the compensation we offer to our executive officers, individually as well as in the aggregate, is competitive and fair; | | • | provide market practices for equity compensation design; | | • | develop a compensation risk assessment; | | • | coordinate with our management for data collection and job matching for our executive officers; and | | • | support other ad hoc matters throughout the year. |

  28. Role of the Compensation Consultant

    Based on its consideration of the factors specified in SEC rules and the Nasdaq listing standards, our compensation committee does not believe that its relationship with Aon and the work of Aon on behalf of our compensation committee and our management team has raised any conflict of interest. Our compensation committee reviews these factors on an annual basis. The compensation committee also evaluated the independence of other outside advisors to the compensation committee, including outside legal counsel, considered the same independence factors, and concluded their work for the compensation committee does not raise any conflicts of interest and concluded Aon is independent.

  29. Competitive Positioning

    Competitive Positioning For purposes of comparing our executive compensation against the competitive market, our compensation committee reviews and considers the compensation levels and practices of a group of peer companies. In December 2022, with the assistance of Aon, our compensation committee reviewed our compensation peer group for fiscal 2023, which was generally developed from publicly-traded companies with three primary characteristics:

  30. Competitive Positioning

    | • | emphasis on software/consulting companies that may serve healthcare providers and health systems, where possible; | | • | market capitalization between $200 million and $1.7 billion (peer group includes 25th percentile, 50th percentile, and 75th percentile of approximately $664 million, $899 million, and $1.190 billion, respectively for market cap measured in January 2023); and | | • | revenue between $150 million and $750 million (peer group includes 25th percentile, 50th percentile, and 75th percentile of approximately $249 million, $296 million, and $358 million, respectively, for revenue as measured in January 2023). |

  31. Competitive Positioning

    Secondarily, we consider other characteristics such as revenue growth, TSR, and whether the companies are comparable in terms of attracting world-class talent. As measured in January 2023, we fell within approximately the 45th, 24th, and 15th percentiles relative to our peer group for fiscal 2022 with respect to revenue, market capitalization, and TSR, respectively. Our compensation committee reviews our compensation peer group at least annually and makes adjustments to its composition, if warranted, taking into account changes in market capitalization and revenue growth for both our business and the businesses of our peers. Our compensation committee uses data drawn from the public filings of our compensation peer group to evaluate the competitive market when determining the total direct compensation packages for our executive officers. At the beginning of fiscal 2023, based on the foregoing, our compensation committee used the following compensation peer group to assist with the determination of compensation for our executive officers:

  32. Competitive Positioning

    | Fiscal 2023 Compensation Peer Group | | | | | | Accolade | Domo | HealthStream | OptimizeRx | Sharecare | | American Well | Everbridge | Model N | Phreesia | Yext | | Benefitfocus | Grid Dynamics | National Research | Schrodinger | Zuora | | Certara | Computer Programs and Systems | | | |

  33. Competitive Positioning

    Vocera Communications is no longer included in our peer group as compared to our peer group from fiscal 2022 because it was acquired and/or taken private. Evolent Health, Instructure, Premier, and Workiva are no longer included in our peer group as compared to our peer group from fiscal 2022 because their market cap and/or revenue growth no longer align with our target ranges for our fiscal 2023 peer group. In addition, we have added Benefitfocus, Computer Programs and Systems, Grid Dynamics, and Healthstream as part of our peer group for fiscal 2023 compensation decisions because each company aligns with our target peer group in terms of industry, market capitalization and revenue growth.

  34. Annual Performance-Based Incentives

    Annual Performance-Based Incentives We use performance-based incentives to motivate our team members, including the named executive officers, to achieve our annual financial and operational objectives, while making progress towards our longer-term strategic and growth goals. Typically, near the beginning of each fiscal year, our compensation committee adopts the performance criteria and targets for our Bonus Plan for that fiscal year and establishes the target annual incentive opportunity for each plan participant based on a percentage of each participant’s base salary, the performance measures and the associated target levels for each measure, and the potential payouts based on actual performance for the fiscal year. For our 2023 Bonus Plan, up to 130% of the 2023 Bonus Plan target was payable through cash, based on selected company performance objectives. In addition, our compensation committee considered the factors described in the section titled “Oversight of Executive Compensation Program—Compensation-Setting Process” above. Overview & Structure In February 2023, our compensation committee adopted and approved the performance criteria and targets for fiscal 2023 under our Bonus Plan, as set forth in the section titled “Corporate Performance Measures” below. The Bonus Plan provides opportunities for incentive compensation for all team members, including the named executive officers, based on our actual achievement of pre-established corporate financial objectives. The target levels for the financial objectives were set at levels determined to be challenging and requiring substantial skill and effort by our named executive officers. The 2023 Bonus Plan is designed such that participants are to receive 100% of their target bonus in cash with a maximum 130% threshold, in order to align the committee’s assessment of our named executive officers’ performance to our achievement of our annual operating plan. Target Annual Incentive Compensation Opportunities In February 2023, in connection with its review of our executive compensation program, our compensation committee approved the target annual incentive opportunities of our named executive officers, as set forth in the table below.

  35. Target Performance-Based Incentives for Fiscal 2023

    Target Performance-Based Incentives for Fiscal 2023 The target annual incentive bonus opportunities for our named executive officers for fiscal 2023 were as follows:

  36. Target Performance-Based Incentives for Fiscal 2023

    | Named Executive Officer | Base Salary | Target Performance-Based Incentive as Percent of Base Salary(1) | 2023 Target Annual Incentive Bonus Opportunity(2) | | Daniel Burton(3) | $— | —% | $— | | Bryan Hunt(4) | 315,000 | 65 | 213,000 | | Jason Alger | 271,250 | 50 | 135,625 | | Benjamin Landry(5) | 268,388 | 30 | 110,516 | | Linda Llewelyn | 307,500 | 50 | 153,750 | | Daniel Orenstein | 300,000 | 50 | 150,000 |

  37. Target Performance-Based Incentives for Fiscal 2023

    | (1) Represents the total target performance-based incentive percent of base salary effective April 1, 2023. | | (2) Represents the fiscal 2023 target cash bonus amount for each of our named executive officers and was calculated based on 100% of the actual base salary and actual target bonus percentage for each pay period during fiscal 2023. Refer to the section titled “Corporate Performance Measures and Bonus Plan Funding Methodology” below for more information about how the annual bonus is separated between cash and PRSUs. | | (3) Mr. Burton voluntarily reduced his cash and equity compensation by 100% from July 2022 through December 2023. Prior to his voluntary reduction, Mr. Burton’s salary was $300,000, but due to the voluntary reduction his actual fiscal 2022 salary was reduced to $150,000. As part of his voluntary compensation reduction, he also forfeited his ability to receive the cash or PRSU portions of his annual bonus. | | (4) Mr. Hunt’s target bonus percentage increased from 65% to 70% effective July 1, 2023. | | (5) Upon Mr. Landry’s promotion to General Counsel, his target bonus percentage increased from 30% to 50% effective July 1, 2023. | | (6) Mr. Orenstein stepped down as General Counsel effective April 30, 2023, so his fiscal 2023 base salary was only for four months, and he was no longer eligible for the 2023 target annual incentive bonus opportunity. |

  38. Target Performance-Based Incentives for Fiscal 2023

    | Category | % | | Fiscal 2023 Annual Bonus Plan Metric | | Improvement(1) | 16.7%(1) | • | Client satisfaction score | | | | • | Team member engagement score | | | 16.7% | • | Percentage of select clients(2) achieving measurable improvements | | | | • | Number of measurable improvements (all clients) | | | 16.7% | • | Percentage of projects on time | | Growth | 50% | • | Net New / Total Number of DOS Subscription Clients | | | | • | Dollar-based Retention Rate | | | | • | Annual Recurring Revenue (ARR) + Non-Recurring Revenue (NRR) Gross Bookings(3) |

  39. Target Performance-Based Incentives for Fiscal 2023

    Below are selected definitions of our 2023 metrics: ARR + NRR Gross Bookings means new or expanded gross bookings in fiscal 2023 for ARR plus NRR. DOS Subscription Clients means clients who directly or indirectly access our DOS platform via a technology subscription contract. Indirect access to the DOS platform may include DOS module components such as Healthcare.AI, Pop Analyzer, IDEA, and other DOS platform components. Dollar-based Retention Rate is calculated as of a period end by starting with the sum of the technology and professional services ARR from our DOS Subscription Clients as of the date 12 months prior to such period end (prior period ARR). We then calculate the sum of the ARR from these same clients as of the current period end (current period ARR). Current period ARR includes any upsells and also reflects contraction or attrition over the trailing twelve months but excludes revenue from new DOS Subscription Clients added in the current period. We then divide the current period ARR by the prior period ARR to arrive at our Dollar-based Retention Rate. We calculate ARR for each DOS Subscription Client as the expected monthly recurring revenue of our clients as of the last day of a period multiplied by 12. Because our primary business model is to contract for our DOS platform, analytics applications, and professional services, our Dollar-Based Retention Rate calculated above only includes our DOS Subscription Clients. Other Clients that do not meet the definition of a DOS Subscription Client, which are primarily legacy Medicity, Able Health, Healthfinch, Vitalware, Twistle, KPI Ninja, ARMUS, and ERS clients, are not included in the Dollar-based Retention Rate metrics. Adjusted EBITDA as reflected in our quarterly and annual financial statements is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other (income) expense, net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, (vi) litigation costs, (vii) restructuring costs, and (viii) non-recurring lease-related charges. For an explanation of our management’s use of this measure and a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, please see Appendix A to this Proxy Statement. Measurable improvements represent meaningful (i.e., significant enough to present to the client), favorable changes that have been quantified and approved by the client. The target levels required for 100% achievement for the corporate performance measures under our Bonus Plan were approved by our compensation committee and board of directors. The compensation committee set high target thresholds to ensure that incentive payments would only follow significant achievement and total payouts could have been as low as 0% if minimum thresholds were not met. The total payouts were capped at 130% based on the lower of the stretch goal achievement and Adjusted EBITDA achievement. Performance in Fiscal 2023 and Payouts In February 2024 our compensation committee assessed our performance against the composite targets established under the 2023 Annual Bonus Plan and the actual achievement compared to the target are described below. The achievement percentages displayed in the tables below are zero if the minimum bonus threshold was not reached, 100% if the target threshold was reached, 130% if the stretch goal was reached, or the percentage achieved of the range between the threshold, target, and stretch performance amounts. The Improvement and Growth metrics are capped at 130%. The compensation committee has endeavored to set the performance goals at definitive, rigorous, and objective levels so as to require significant effort and achievement by our executive team to be attained.

  40. Target Performance-Based Incentives for Fiscal 2023

    For the Improvement category, the client satisfaction score was determined based on KLAS survey results converted to a scale of 1 to 5. The actual team member engagement score was determined based on Gallup survey results converted to a scale of 1 to 5. These survey results provide us with feedback from our users and team members and provide a valuable non-financial strategic input for our leadership team in running our business. Our client satisfaction score in fiscal 2023 was 4.1 and the comparable measure of team member satisfaction score was 4.4. The improvement bonus payout for our named executive officers is based on the lower of the two metrics, which was the client satisfaction score, which met the minimum threshold of 4.1 but was below the performance target amount of 4.3. Measurable improvements represent a meaningful, favorable change that has been quantified and approved by the client. Measurable improvements provide a non-financial metric for leadership that demonstrates how we are adding value to our clients and accelerates the Health Catalyst flywheel. The percentage of select clients achieving measurable improvements was 52%, which was above the minimum threshold of 40% but below the performance target of 60%. The number of measurable improvements for all clients was 129 which was above the minimum threshold of 110 but below the performance target of 130. We track the percentage of projects completed on time as an important, non-financial metric for leadership that demonstrates how we are providing timely service and value to our clients and accelerates the Health Catalyst flywheel. The percentage of projects completed on time was 54%, which was above the minimum threshold of 20%, the performance target of 40%, and the stretch goal of 50%.

  41. Target Performance-Based Incentives for Fiscal 2023

    | Category | % Weighting | Actual Achievement of Target | Performance Measure | Threshold | Target | Stretch | Actual Result | | Growth | 50% | 0% | Net New / Total Number of DOS Subscription Clients | 12 / 110 | 15 / 113 | 18 / 116 | Below Minimum Threshold | | | | | Dollar-based Retention Rate | 106% | 110% | 113% | | | | | | ARR + NRR Gross Bookings (millions) | $75 | $105 | $120 | |

  42. Target Performance-Based Incentives for Fiscal 2023

    With respect to the Growth category, actual new client growth, measured as net new and total DOS Subscription Clients, was below the minimum threshold of 12 net new and 110 total DOS Subscription Clients in fiscal 2023. Actual Dollar-based Retention was below the minimum threshold of 106% in fiscal 2023. ARR and NRR Gross Bookings was below the minimum threshold of $75 million in fiscal 2023. Fiscal 2023 proved to be a more challenging year than anticipated as a result of the inflationary macroeconomic environment and the meaningful financial strain that our health system end market faced, primarily due to significant increases in labor and supply costs without a commensurate increase in revenue, leading to substantial margin pressure. The meaningful financial strain on our health system end market resulted in a more challenging sales environment during fiscal 2023 compared to our initial expectations, which resulted in underperformance compared to our initial growth metric targets and thresholds. Our fiscal 2023 company bonus pool was funded only to the extent minimum Adjusted EBITDA thresholds were reached. Our Adjusted EBITDA for fiscal 2023 was $11.0 million and exceeded the minimum threshold, resulting in our fiscal 2023 company bonus pool being funded. Our fiscal 2023 Adjusted EBITDA was a significant improvement compared to the $(2.5) million of Adjusted EBITDA from fiscal 2022. Adjusted EBITDA is a non-GAAP financial measure. For an explanation of our management’s use of Adjusted EBITDA and a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, please see Appendix A to this Proxy Statement. As a result, the total actual annual performance-based incentive compensation for our named executive officers under the Annual Bonus Plan in fiscal 2023 were as follows:

  43. Target Performance-Based Incentives for Fiscal 2023

    | Named Executive Officer | 2023 Target Annual Performance-Based Incentive Compensation Opportunity | 2023 Actual Annual Performance-Based Incentive Compensation | | Daniel Burton(2) | $— | $— | | Bryan Hunt(3) | 213,000 | 56,579 | | Jason Alger(3) | 135,625 | 36,026 | | Benjamin Landry3) | 110,516 | 29,356 | | Linda Llewelyn(3) | 153,750 | 40,840 | | Daniel Orenstein(4) | 150,000 | — |

  44. Target Performance-Based Incentives for Fiscal 2023

    | (1) Mr. Burton voluntarily elected to reduce his fiscal 2023 cash bonus by 100% in response to the challenging macroeconomic environment and to lead by example as part of our cost reduction initiatives. | | (3) Based on our actual achievement against the composite targets established under the 2023 Annual Bonus Plan, including consideration of fiscal 2023 Adjusted EBITDA performance, the resulting total composite bonus achievement percentage for these named executive officers was 27%. | | (4) Mr. Orenstein stepped down as General Counsel effective April 30, 2023, so he was no longer eligible for the 2023 annual performance-based incentive compensation opportunity. |

  45. Long-Term Equity Incentives

    Long-Term Equity Incentives In 2011, our board adopted the Health Catalyst, Inc. 2011 Stock Incentive Plan (the 2011 Plan), which provided for the direct award, sale of shares, and granting of options for our common stock to our directors, team members, or consultants. In connection with our initial public offering (IPO), our board of directors adopted the 2019 Stock Option and Incentive Plan (the 2019 Plan). The 2019 Plan provides flexibility to our compensation committee to use various equity-based incentive awards as compensation tools to motivate our workforce, including the grant of incentive and nonstatutory stock options, restricted and unrestricted stock, RSUs, PRSUs, and stock appreciation rights to our directors, team members, or consultants. We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program and our team member compensation program. The realized value of these equity awards has a direct relationship to our stock price; therefore, these awards are an incentive for our named executive officers and all of our team members to create value for our stockholders. Equity awards also help us retain qualified executive officers and team members in a competitive market. Long-term incentive compensation opportunities in the form of equity awards are granted by our compensation committee on a regularly-scheduled basis, as described in “Other Compensation Policies—Equity Award Grant Policy” below. For fiscal 2023, our compensation committee determined that the equity awards to be granted to our executive officers, excluding Mr. Burton who voluntarily declined any equity award grants in fiscal 2023, should be in the form of approximately 66.67% RSUs and 33.33% long-term PRSUs, and committed to 50% RSUs and 50% PRSUs comprising Mr. Burton’s 2024 LTIP. Equity awards in the form of RSUs and PRSUs provide retention incentives for our named executive officers and reward them for long-term stock price appreciation while at the same time providing some value even if the market price of our common stock declines. The equity awards granted to our named executive officers in fiscal 2023 are set forth in the “2023 Summary Compensation Table” and the “2023 Grants of Plan-Based Awards Table” below. RSUs We believe RSUs provide a strong retention incentive for our named executive officers, provide a reward for long-term stock price appreciation while at the same time providing some value even if the market price of our common stock declines, and are less dilutive than stock options to our stockholders. All RSUs are granted under our 2019 Plan and are settled for shares of our common stock. In fiscal 2023, we granted our named executive officers RSUs that generally vest as to one-quarter of such shares on the first anniversary of the applicable “vesting commencement date,” and in 12 approximately equal quarterly installments thereafter, so long as the named executive officer continues a service relationship with us through the applicable vesting dates. Long-term PRSUs Fiscal 2023-2025 PRSUs In order to further align the interests of our named executive officers with our long-term growth and interests of our stockholders, each named executive officer as of February 22, 2023, other than Daniel Burton, was granted executive PRSUs with a three-year measurement period (Fiscal 2023-2025 PRSUs) that includes performance targets for TSR Achievement, Revenue Growth Rate Achievement, and Adjusted EBITDA Margin Achievement, as part of their typical, annual LTIP equity grants. The performance targets are each weighted equally and these PRSUs may vest in an amount up to the amount granted, subject to satisfaction of the performance targets. The number of PRSUs that will vest for the 2023, 2024, and 2025 vesting periods will be calculated as follows: (i) the performance achievement for the applicable vesting period, multiplied by (ii) approximately 33.33% of the PRSUs for each of the 2023, 2024 and 2025 vesting periods, each rounded to the nearest whole share. Our compensation committee selected the following company performance objectives for these Fiscal 2023-2025 PRSUs as shown below:

  46. Long-Term Equity Incentives

    | Fiscal 2023-2025 PRSU Metrics | % Weighting | Why It Matters | | TSR Achievement(1) | 33.33% | Aligns our three-year stock performance, to the Russell 3000 index. Investors recognize TSR as an appropriate measure to motivate executives and achieve alignment with shareholder interests. | | Revenue Growth Rate Achievement(2) | 33.33% | Establishes forward looking three-year GAAP revenue growth targets, providing an effective indicator of future top-line growth prospects and driving long-term performance and value creation. Aligns with our technology and professional services growth strategy. | | Adjusted EBITDA Margin Achievement(3) | 33.34% | Aligns three-year Adjusted EBITDA Margin growth resulting from the effective execution of our strategic operating plan to broadly comparable companies subject to similar external market and economic factors. Our ability to generate long-term profitability is critical to our growth and funding of operating and investing activities. |

  47. Long-Term Equity Incentives

    | (1) Based on our TSR as a percentile of the TSR for the Russell 3000 for the applicable fiscal year vesting period. | | (2) Based on our total GAAP revenue annual growth rate relative to the prior fiscal year for the applicable fiscal year vesting period. | | (3) Based on our Adjusted EBITDA as a percentage of total GAAP revenue for the applicable fiscal year vesting period. |

  48. Long-Term Equity Incentives

    Our compensation committee set the Adjusted EBITDA Margin and Revenue Growth Rate thresholds and targets separately for each of the three fiscal years in the fiscal 2023-2025 performance period based on our long-term strategic plan, as well as consideration of long-term performance expectations for the Russell 3000. This approach ensures that we provide competitive incentive compensation based on market competitive performance while continuing to focus on our strategic long-term commitments. Given the commercial sensitivity of our long-term Adjusted EBITDA and Revenue Growth Rate goals, the Fiscal 2023-2025 PRSU performance goals for fiscal 2024 and fiscal 2025 will be disclosed at the conclusion of each respective performance period. Fiscal 2023-2025 PRSU Performance Goals and Actual Vesting In February 2024 our compensation committee assessed our performance against the composite targets established for fiscal 2023 as part of the Fiscal 2023-2025 PRSUs and long-term incentive plan and the actual achievement compared to the target is described below.

  49. Long-Term Equity Incentives

    | Performance Period | % Weighting | Performance Metric | % Weighting | Threshold | Target | Actual Result | Weighted Performance | | Fiscal 2023 | 33.33% | TSR Percentile | 33.33% | 30% | 55% | 23% | 0% | | | | Revenue Growth | 33.33% | 4.0% | 6.5% | 7.1% | 100% | | | | Adjusted EBITDA Margin | 33.34% | 1.0% | 3.0% | 3.7% | 100% | | Fiscal 2023 Final Vesting Percentage | | | | | | | 66.7% | | Fiscal 2024 | 33.33% | TSR Percentile | 33.33% | 30% | 55% | TBD | To be determined (TBD) | | | | Revenue Growth Rate | 33.33% | 6.5% | 13.0% | | | | | | Adjusted EBITDA Margin | 33.34% | 3.0% | 6.5% | | | | Fiscal 2024 Final Vesting Percentage | | | | | | | TBD | | Fiscal 2025 | 33.34% | TSR Percentile | 33.33% | 30% | 55% | TBD | TBD | | | | Revenue Growth Rate | 33.33% | 13.0% | 20.0% | | | | | | Adjusted EBITDA Margin | 33.34% | 6.5% | 10.0% | | | | Fiscal 2025 Final Vesting Percentage | | | | | | | TBD |

  50. Long-Term Equity Incentives

    The vesting opportunity in respect to each Fiscal 2023-2025 PRSU metric and fiscal year is calculated separately according to the vesting percentages described below.

  51. Long-Term Equity Incentives

    | Performance Metric | Below Threshold | Threshold | Target | | Vesting (% of Target) | —% | 50% | 100% |

  52. Long-Term Equity Incentives

    If the performance metric achievement for a given fiscal year and performance metric is between the threshold and target, the vesting percentage is calculating using interpolation between the threshold and target vesting percentages shown above.

  53. Executive employment arrangements

    Executive employment arrangements We initially entered into an offer letter with each of the named executive officers in connection with his or her employment with us, which set forth the terms and conditions of his or her employment. Each named executive officer also entered into our standard employee agreement and invention and confidentiality agreement. In connection with our IPO, we have adopted an executive severance plan (the Executive Severance Plan) providing for cash severance upon certain terminations of employment and “double-trigger” equity vesting acceleration in the event of certain terminations of employment in connection with or following a sale of the company. Each of our named executive officers participates in the Executive Severance Plan and the Executive Severance Plan replaces the severance provisions in such named executive officers’ offer letters, if any.

  54. Executive Severance Plan

    Executive Severance Plan The Executive Severance Plan provides that upon a termination of employment by us other than for “cause” (as defined in the Executive Severance Plan), or for death or “disability” (as defined in the Executive Severance Plan) outside of the “change in control period” (i.e., the period beginning on the date of a “change in control” (as defined in the Executive Severance Plan) and ending on the one-year anniversary of the change in control), the participant will be entitled to receive, subject to the execution and delivery of a separation agreement and release containing, among other provisions, an effective release of claims in favor of the company and reaffirmation of the “restrictive covenants agreement” (as defined in the Executive Severance Plan), (i) a severance amount equal to 12 months’ “base salary” (i.e., the higher of the annual base salary in effect immediately prior to the date of termination or the annual base salary in effect for the year immediately prior to the year in which the date of termination occurs) for a “Tier 1 Executive” (as defined in the Executive Severance Plan and which means the company’s chief executive officer, Mr. Burton) and 9 months’ base salary for a “Tier 2 Executive” (as defined in the Executive Severance Plan and which include the named executive officers other than Mr. Burton), payable over 12 months or 9 months, respectively, and (ii) monthly cash payments equal to the monthly employer contribution that we would have made to provide health insurance for the applicable participant if he or she had remained employed by us, based on the premiums as of the date of termination, for up to 12 months for a Tier 1 Executive and 9 months for a Tier 2 Executive; provided, that the participant was participating in our group health plan immediately prior to the date of termination and timely elects COBRA health continuation. The Executive Severance Plan also provides that upon a termination of employment by us other than for cause, death or disability or upon a resignation by an eligible participant for “good reason” (as defined in the Executive Severance Plan), in either case within the change in control period, the participant will be entitled to receive, in lieu of the payments and benefits described above and subject to the execution and delivery of a separation agreement and release containing, among other provisions, an effective release of claims in favor of the company and reaffirmation of the restrictive covenants agreement, (i) a lump sum cash severance amount equal to 150% of base salary for a Tier 1 Executive and 100% of base salary for a Tier 2 Executive, (ii) a lump sum amount equal to 150% for a Tier 1 Executive and 100% for a Tier 2 Executive, of the participant’s annual target bonus in effect immediately prior to such termination (or the participant’s annual target bonus in effect immediately prior to the change in control, if higher), (iii) a lump sum amount equal to the monthly employer contribution, based on the premiums as of the date of termination, that we would have made to provide health insurance for the participant if he or she had remained employed by us for 18 months for a Tier 1 Executive and 12 months for a Tier 2 Executive; provided, that the participant was participating in our group health plan immediately prior to the date of termination and timely elects COBRA health continuation, and (iv) for all outstanding and unvested equity awards of the company that are subject to time-based vesting held by the participant, full accelerated vesting of such awards; provided, that the performance conditions applicable to any outstanding and unvested equity awards subject to performance-based vesting will be deemed satisfied at the target level specified in the terms of the applicable award agreement. The payments and benefits provided under the Executive Severance Plan in connection with a change in control may not be eligible for a federal income tax deduction by us pursuant to Section 280G of the Code. These payments and benefits may also subject an eligible participant, including the named executive officers, to an excise tax under Section 4999 of the Code. If the payments or benefits payable to an eligible participant in connection with a change in control would be subject to the excise tax imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a greater net after-tax benefit to the applicable participant.

  55. Offer letters in place during the year ended December 31, 2023 for our named executive officers

    Offer letters in place during the year ended December 31, 2023 for our named executive officers Daniel Burton On September 26, 2011, we entered into an offer letter with Daniel Burton, who currently serves as our Chief Executive Officer. The offer letter provides for Mr. Burton’s at-will employment and sets forth his initial annual base salary, initial target annual bonus, and his eligibility to participate in our benefit plans generally. Bryan Hunt On March 27, 2014, we entered into an offer letter with Bryan Hunt, who served as our Chief Financial Officer until March 1, 2024. The offer letter provides for Mr. Hunt’s at-will employment and sets forth his initial annual base salary, initial target annual bonus, and his eligibility to participate in our benefit plans generally. Jason Alger On April 4, 2013, we entered into an offer letter with Jason Alger, who currently serves as our Chief Financial Officer. The offer letter provides for Mr. Alger’s at-will employment and sets forth his initial annual base salary, initial target annual bonus, and his eligibility to participate in our benefit plans generally. Benjamin Landry On March 27, 2023, we entered into an offer letter with Benjamin Landry, who currently serves as our General Counsel. The offer letter provides for Mr. Landry’s at-will employment and sets forth his initial annual base salary, initial target annual bonus, and his eligibility to participate in our benefit plans generally. Linda Llewelyn On May 22, 2013, we entered into an offer letter with Linda Llewelyn, who currently serves as our Chief People Officer. The offer letter provides for Ms. Llewelyn’s at-will employment and sets forth her initial annual base salary, initial target annual bonus, and her eligibility to participate in our benefit plans generally. Daniel Orenstein On December 3, 2015, we entered into an offer letter with Daniel Orenstein, who served as our General Counsel until April 30, 2023. The offer letter provides for Mr. Orenstein’s at-will employment and sets forth his initial annual base salary, initial target annual bonus, and his eligibility to participate in our benefit plans generally. In connection with his voluntarily resignation as our General Counsel, we entered into an independent contractor agreement with Mr. Orenstein.

  56. Equity Award Grant Policy

    Equity Award Grant Policy Our compensation committee has adopted an “Equity Award Grant Policy.” Under this policy, we generally grant equity awards on a regularly-scheduled basis to enhance the effectiveness of our internal control over our equity award grant process. Pursuant to the Equity Award Grant Policy, which was most recently amended in February 2021, our compensation committee has delegated certain limited authority to a delegated committee, made up of our CEO and Chief Financial Officer, to grant routine new hire, promotion, refresh, and certain other equity awards to employees within equity guidelines reviewed and approved from time to time by our compensation committee and subject to other limitations and requirements. The delegated committee may not grant equity awards to its members and the other four highest paid executive officers, or equity awards that would cause the aggregate grant date fair value of equity grants to an individual to exceed $1,500,000. Grants of equity awards are generally made quarterly and will be effective on the date such grant is approved by our compensation committee or delegated committee, as applicable.

  57. Taxation of “Parachute” Payments

    Taxation of “Parachute” Payments Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceed certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Code.

  58. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table provides information regarding the total compensation awarded to, earned by, and paid to our named executive officers for services rendered to us in all capacities for the fiscal years ended December 31, 2023, 2022, and 2021 (or shorter time as a named executive officer).

  59. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary | Option Awards(1) | Stock Awards(2) | Nonequity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | | Daniel Burton(5) | 2023 | $— | $— | $— | $— | $— | $— | | Chief Executive Officer | 2022 | 150,000 | — | 4,276,117 | — | 8,896 | 4,435,013 | | | 2021 | 300,000 | — | 5,514,715 | 136,900 | 9,428 | 5,961,043 | | Bryan Hunt(6) | 2023 | 315,000 | — | 1,980,055 | 56,579 | 33,676 | 2,385,310 | | Chief Financial Officer | 2022 | 300,000 | — | 2,816,993 | 59,681 | 10,783 | 3,187,457 | | | 2021 | 274,061 | — | 3,095,296 | 85,165 | 8,208 | 3,462,730 | | Jason Alger(7), Chief Accounting Officer | 2023 | 271,250 | — | 495,014 | 36,026 | 21,325 | 823,615 | | Benjamin Landry(7), General Counsel | 2023 | 268,388 | — | 637,213 | 29,356 | 11,348 | 946,304 | | Linda Llewelyn(7), Chief People Officer | 2023 | 307,500 | — | 693,019 | 40,840 | 16,131 | 1,057,490 | | Daniel Orenstein(8) | 2023 | 101,136 | — | 792,022 | — | 6,139 | 899,297 | | General Counsel | 2022 | 300,000 | — | 1,162,971 | 45,909 | 10,652 | 1,519,532 | | | 2021 | 300,000 | — | 1,328,162 | 79,362 | 10,519 | 1,718,043 |

  60. 2023 Summary Compensation Table

    | (1) There were no stock options granted during the years presented. | | (2) The reported amounts represent the aggregate grant date fair value of awards of RSUs and PRSUs granted in each year presented, computed in accordance with FASB ASC Topic 718, excluding the estimate of forfeitures not related to the performance-based vesting of PRSUs. Amounts reflect the fair value of each award based on the closing price of our common stock on the Nasdaq Global Select Market on the date of grant of the award. The grant date fair value of the PRSUs is based on the probable outcome of the vesting conditions as of the grant date. For fiscal 2023, the grant date fair value of all long-term PRSUs at maximum performance achievement, are $0, $675,500, $205,760, $270,200, $168,875, and $236,425 for Messrs. Burton, Hunt, Landry, Orenstein, Alger, Horstmeier, and Ms. Llewelyn, respectively. | | (3) Represents the cash amounts earned by our named executive officers under our short-term incentive plan (the Bonus Plan), based on our achievement of certain corporate performance goals. For a description of the Bonus Plan, see the section titled “Compensation Discussion and Analysis – Annual Performance-Based Incentives” above. | | (4) For fiscal 2023, the amounts reported represent matching contributions made by us under our 401(k) plan ($0 for Mr. Burton, $12,945 for Mr. Hunt, $13,200 for Ms. Llewelyn, $10,736 for Mr. Landry, $5,882 for Mr. Orenstein, $12,758 for Mr. Alger, and $6,122 for Mr. Horstmeier), spot bonuses paid by us ($20,000 for Mr. Hunt and $8,000 for Mr. Alger) in recognition of extraordinary effort and performance during fiscal 2023, executive life insurance premiums paid by us ($926 for Ms. Llewelyn, $363 for Mr. Horstmeier, and $257 for Mr. Orenstein), executive long-term disability insurance premiums paid by us ($1,983 Ms. Llewelyn and $1,021 for Mr. Horstmeier), and gift cards paid by us as part of a benefit provided to all team members ($731 for Mr. Hunt, $22 for Ms. Llewelyn, $612 for Mr. Landry, and $568 for Mr. Alger). | | (5) Mr. Burton voluntarily reduced his cash and new equity compensation by 100% from July 2022 through December 2023 in response to the challenging macroeconomic environment and to lead by example as part of our cost reduction initiatives. As part of his compensation reduction, he also declined receiving the cash portion of his annual bonus. | | (6) Mr. Hunt and the company mutually agreed that he would step down as Chief Financial Officer effective March 1, 2024. After stepping down, Mr. Hunt continued to be employed by the company as a Senior Advisor until April 1, 2024, at which point he and the company entered into a separation and release agreement and an independent contractor agreement. | | (7) Ms. Llewelyn, Mr. Landry, and Mr. Alger were not named executive officers prior to fiscal 2023. | | (8) Mr. Orenstein stepped down as General Counsel effective April 30, 2023. After stepping down, Mr. Orenstein continued to serve the company as a Senior Advisor until December 31, 2023. |

  61. 2023 Grants of Plan-Based Awards Table

    2023 Grants of Plan-Based Awards Table The following table shows information regarding grants of non-equity and equity awards that we made during fiscal 2023 to each of the named executive officers listed in the Summary Compensation Table. Mr. Burton was not eligible for any annual bonus and did not receive any equity awards in fiscal 2023.

  62. 2023 Grants of Plan-Based Awards Table

    | | | | Estimated future payouts under non-equity incentive plan awards ($)(1) | | Estimated future payouts under equity incentive plan awards (# of PRSUs)(2) | | All Other Stock Awards (# of RSUs)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | Name | Award Type | Grant Date | Target (100%) | Maximum (130%) | Threshold | Target/Maximum (100%) | | | | Bryan Hunt | Cash | — | 213,000 | 276,900 | — | — | — | — | | | Long-term PRSU | 2/22/23 | — | — | 8,333 | 50,000 | — | 629,055 | | | RSU | 2/22/23 | — | — | — | — | 100,000 | 1,351,000 | | Jason Alger | Cash | — | 135,625 | 176,313 | | | | — | | | Long-term PRSU | 2/22/23 | | | 2,083 | 12,500 | | 157,264 | | | RSU | 2/22/23 | | | | | 25,000.00 | 337,750 | | Benjamin Landry | Cash | — | 110,516 | 143,671 | | | | — | | | Long-term PRSU | 5/3/23 | | | 667 | 4,000 | | 46,786 | | | RSU | 5/3/23 | | | | | 20,000 | 251,200 | | | Long-term PRSU | 10/5/23 | | | 2,667 | 16,000 | | 144,827 | | | RSU | 10/5/23 | | | | | 20,000 | 194,400 | | Linda Llewelyn | Cash | — | 153,750 | 199,875 | | | | — | | | Long-term PRSU | 2/22/23 | | | 2,917 | 17,500 | | 220,169 | | | RSU | 2/22/23 | | | | | 35,000 | 472,850 | | Daniel Orenstein | Cash | — | 150,000 | 195,000 | — | — | — | — | | | Long-term PRSU | 2/22/23 | — | — | 3,333 | 20,000 | — | 251,622 | | | RSU | 2/22/23 | — | — | — | — | 40,000 | 540,400 |

  63. 2023 Grants of Plan-Based Awards Table

    | (1) These columns set forth the fiscal 2023 target cash bonus amount for each of our named executive officers under our Bonus Plan. “Target” refers to the amount payable if specified performance targets are reached. There is no threshold for a minimum amount payable for a certain level of performance as the actual cash bonus payment will be determined based on the level of Adjusted EBITDA outperfomance. Target bonuses were set as a percentage of each named executive officer’s base salary earned for fiscal 2023 as follows: 95%, 50%, and 50% for Messrs. Burton, Alger, and Ms. Llewelyn, respectively. Mr. Hunt’s target bonus was 65% until July 1, 2023 when it prospectively changed to 70% and Mr. Landry’s target bonus was 30% until July 1, 2023 when it prospectively changed to 50% as a result of his promotion to General Counsel. Mr. Orenstein’s target bonus was 50% until he stepped down as General Counsel effective April 30, 2023, after which he was no longer eligible for any fiscal 2023 bonus. The dollar values of the actual cash bonus awards earned by the named executive officers are set forth in the Fiscal 2023 Summary Compensation Table above. Subsequent to the initial bonus targets being set, Mr. Burton voluntarily elected not to receive any bonus for fiscal years 2022 and 2023. The amounts set forth in this column do not represent either additional or actual compensation earned by the named executive officers for fiscal 2023. For a description of the Bonus Plan, see the section titled “Compensation Discussion and Analysis –Annual Performance-Based Incentives” above. | | (2) These columns set forth the fiscal 2023 target PRSU amounts for each of our named executive officers. Each named executive officer, with the exception of Daniel Burton, was granted long-term PRSUs with a three-year measurement period that includes market and performance targets for TSR Achievement, Revenue Growth Rate Achievement, and Adjusted EBITDA Margin Achievement. The performance targets are each weighted equally and these PRSUs may vest in an amount up to the amount granted, subject to satisfaction of the performance targets. The number of PRSUs that will vest for the 2023, 2024, and 2025 vesting periods will be calculated as follows: (i) the performance achievement for the applicable vesting period, multiplied by (ii) approximately 33.33% of the PRSUs for each of the 2023, 2024 and 2025 vesting periods, each rounded to the nearest whole share. There is a minimum annual threshold level of achievement for each individual metric that is 50% of each individual metric’s “Target” level, whereby performance below that threshold results in 0% achievement for that specific metric. The “Maximum” level of attainment for the long-term PRSUs granted in fiscal 2023 is equal to the “Target” level. The actual amounts of long-term PRSUs that vested based on the 2023 vesting period market and performance conditions are set forth within a table in the “Performance in Fiscal 2023 and Payouts” section above. For further information regarding the terms of these awards, see the section titled “Elements of Our Executive Compensation Program” above. | | (3) Annual RSUs were granted under the 2019 Plan. Each of the annual RSU awards vested as to 25% of the shares of common stock underlying the RSU award upon the one-year anniversary of December 1, 2023 and vest as to the remainder of the shares in 12 equal quarterly installments thereafter, subject to the applicable named executive officer’s continued service through the applicable vesting dates. | | (4) The reported amounts represent the aggregate grant date fair value of awards of RSUs and PRSUs granted computed in accordance with FASB ASC Topic 718, excluding the estimate of forfeitures not related to the performance-based vesting of PRSUs. Amounts reflect the fair value of each award based on the closing price of our common stock on the Nasdaq Global Select Market on the date of grant of the award. The grant date fair value of the long-term PRSUs is based on the probable outcome of the market and performance vesting conditions as of the grant date. The assumptions used in calculating the grant date fair value of the stock awards reported in this column are set forth in Note 14 of our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The amounts reported in this column reflect the initially estimated accounting cost for these stock awards and do not correspond to the actual economic value that may be received by our named executive officers upon the vesting of the restricted stock unit awards or any sale of the underlying shares of common stock. |

  64. Outstanding Equity Awards at 2023 Year-end

    Outstanding Equity Awards at 2023 Year-end The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2023:

  65. Outstanding Equity Awards at 2023 Year-end

    | | | | Option Awards(1) | | | Stock Awards(1) | | | | | Name | Grant Date | Vesting Commencement Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#)(2) | Market Value of Shares or Units of Stock that Have not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Units (#) | Equity Incentive Plan Awards: Market Value of Unearned Units ($)(3) | | Daniel Burton | 9/27/18 | 9/25/18 | 80,728(4) | $10.80 | 9/27/28 | — | $— | — | $— | | | 2/5/19 | 2/5/19 | 107,873(4) | 15.84 | 2/5/29 | — | — | — | — | | | 2/18/21 | 3/1/21 | — | — | — | 31,250 | 289,375 | — | — | | | 2/24/22 | 12/1/21 | — | — | — | 62,500 | 578,750 | — | — | | | 2/18/21 | 3/1/21 | — | — | — | — | — | 2,620(6) | 24,261 | | Bryan Hunt | 8/4/15 | 6/1/15 | 261(4) | 10.04 | 8/4/25 | — | — | — | — | | | 10/14/16 | 10/14/16 | 2,188(4) | 10.60 | 10/14/26 | — | — | — | — | | | 5/3/18 | 5/3/18 | 4,150(4) | 10.78 | 5/3/28 | — | — | — | — | | | 9/27/18 | 9/25/18 | 12,500(4) | 10.80 | 9/27/28 | — | — | — | — | | | 2/18/21 | 12/1/20 | — | — | — | 15,000 | 138,900 | — | — | | | 2/24/22 | 12/1/21 | — | — | — | 50,000 | 463,000 | — | — | | | 2/22/23 | 12/1/22 | — | — | — | 75,000 | 694,500 | — | — | | | 2/22/23 | 3/1/23 | — | — | — | — | — | 50,000(5) | 463,000 | | Jason Alger | 10/26/17 | 10/26/17 | 2,860(4) | 10.72 | 10/26/27 | | | | | | | 5/3/18 | 5/3/18 | 1,462(4) | 10.78 | 5/3/28 | | | | | | | 9/27/18 | 9/25/18 | 5,721(4) | 10.80 | 9/27/28 | | | | | | | 2/18/21 | 12/1/20 | | | | 3,750 | 34,725 | | | | | 2/24/22 | 12/1/21 | | | | 12,500 | 115,750 | | | | | 2/22/23 | 12/1/22 | | | | 18,750 | 173,625 | | | | | 2/22/23 | 3/1/23 | | | | | | 12,500(5) | 115,750 | | Benjamin Landry | 2/18/21 | 12/1/20 | | | | 2,500 | 23,150 | | | | | 2/24/22 | 12/1/21 | | | | 4,500 | 41,670 | | | | | 5/3/23 | 12/1/22 | | | | 15,000 | 138,900 | | | | | 10/5/23 | 12/1/22 | | | | 15,000 | 138,900 | | | | | 5/3/23 | 3/1/23 | | | | | | 4,000(5) | 37,040 | | | 10/5/23 | 3/1/23 | | | | | | 16,000(5) | 148,160 | | Linda Llewelyn | 10/14/16 | 10/14/16 | 2,250(4) | 10.60 | 10/14/26 | | | | | | | 1/24/18 | 1/24/18 | 4,754(4) | 11.78 | 1/24/28 | | | | | | | 9/27/18 | 9/25/18 | 21,469(4) | 10.80 | 9/27/28 | | | | | | | 2/18/21 | 12/1/20 | | | | 5,000 | 46,300 | | | | | 2/24/22 | 12/1/21 | | | | 17,500 | 162,050 | | | | | 2/22/23 | 12/1/22 | | | | 26,250 | 243,075 | | | | | 2/22/23 | 3/1/23 | | | | | | 17,500(5) | 162,050 | | Daniel Orenstein | 2/10/16 | 12/31/15 | 50,454(4) | 10.34 | 2/10/26 | — | — | —(7) | — | | | 9/27/18 | 9/25/18 | 24,999(4) | 10.80 | 9/27/28 | — | — | —(7) | — |

  66. Outstanding Equity Awards at 2023 Year-end

    | (1) Each equity award prior to July 23, 2019 was granted pursuant to our 2011 Plan and are subject to the terms of our 2011 Plan, as amended from time to time. Equity awards granted on or after July 23, 2019 were and will be granted pursuant to our 2019 Plan and are subject to the terms of our 2019 Plan, as amended from time to time. Each equity award is subject to certain acceleration of vesting provisions as set forth in our Executive Severance Plan. | | (2) 25% of the restricted stock units vest on the first anniversary of the vesting commencement date and the remaining 75% vest in 12 equal quarterly installments thereafter, generally subject to the named executive officer’s continuous service relationship with our company through each applicable vesting date. | | (3) The market value of restricted stock unit awards and performance-based restricted stock units is determined by multiplying the number of shares by $9.26, the closing price of our common stock on the Nasdaq Global Select Market on the last trading day of the year ended December 31, 2023. | | (4) The stock option is fully vested. | | (5) The amounts reported represent the number of long-term PRSUs granted to all named executive officers other than Mr. Burton in fiscal 2023, as previously described, and assumes maximum market and performance goals will be achieved. Approximately one third of the long-term PRSUs vested on March 1, 2024 upon the achievement of certain market and performance metrics, during the period of January 1, 2023 through December 31, 2023, as summarized in the section titled “Elements of Our Executive Compensation Program” above. On March 1, 2024, a total of 11,111, 4,444, 2,778, and 3,889 long-term PRSUs vested for Messrs. Hunt, Landry, Alger, and Ms. Llewelyn, respectively. The remaining two thirds of the long-term PRSUs will vest based on fiscal 2024 and fiscal 2025 market and performance conditions in two annual installments thereafter on March 1, 2025 and March 1, 2026, respectively, subject to the named executive officer’s continuous service relationship with our company through each applicable vesting date. | | (6) The amount reported represent the number of long-term PRSUs outstanding as of December 31, 2023. These long-term PRSUs were granted to Mr. Burton on February 18, 2021 and the performance achievement was based solely on fiscal 2021 results. Twenty-five percent of the long-term PRSUs vested on March 1, 2022 and the remaining 75% will vest in 12 equal quarterly installments thereafter, generally subject to the named executive officer’s continuous service relationship with our company through each applicable vesting date. | | (7) Mr. Orenstein stepped down as General Counsel effective April 30, 2023. After stepping down, Mr. Orenstein continued to serve the company as a Senior Advisor until December 31, 2023, and as a result, his outstanding RSUs and PRSUs were forfeited as of December 31, 2023. |

  67. 2023 Option Exercises and Stock Vested

    2023 Option Exercises and Stock Vested The following table shows information regarding exercises of options to purchase our common stock and vesting of restricted stock unit awards by our named executive officers during the year ended December 31, 2023.

  68. 2023 Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Daniel Burton | — | $— | 95,846 | $1,056,466 | | Bryan Hunt | — | — | 68,125 | 655,839 | | Jason Alger | — | — | 20,517 | 206,488 | | Benjamin Landry | — | — | 16,744 | 150,087 | | Linda Llewelyn | — | — | 28,750 | 283,282 | | Daniel Orenstein | — | — | 36,250 | 361,144 |

  69. 2023 Option Exercises and Stock Vested

    __________________

  70. 2023 Option Exercises and Stock Vested

    | (1) Amounts shown in this column do not necessarily represent the actual value realized from the sale of the shares acquired upon exercise of the options because the shares may not be sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise. | | (2) Amounts shown in this column represent the market value of restricted stock unit awards upon vesting as determined by multiplying the number of shares by the closing price of our common stock on the Nasdaq Global Select Market the market day immediately preceding the vesting date. |

  71. Pension Benefits

    Pension Benefits Aside from our 401(k) plan, which is described above, we do not maintain any pension plan or arrangement under which our named executive officers are entitled to participate or receive post-retirement benefits. We do not have any qualified or non-qualified defined pension benefit plans.

  72. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans or arrangements under which our named executive officers are entitled to participate.

  73. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control

  74. CEO Pay Ratio Disclosure

    CEO Pay Ratio Disclosure As required by SEC rules, we are providing the following information about the relationship between the annual total compensation of our CEO and the annual total compensation of our median compensated employee (our CEO pay ratio). For fiscal 2023, the median of the annual total compensation of all employees of our company (other than our CEO) was $130,092 and the annual total compensation of our CEO was $0. Based on this information, for fiscal 2023 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 0 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. For fiscal 2023, we calculated the CEO pay ratio using the same median employee that we used to calculate the pay ratio in fiscal 2022, as we believe there has been no change in our employee population or compensation arrangements during fiscal 2023 that would result in a significant change to our pay ratio disclosure. To identify the median employee in fiscal 2022, we examined the compensation of all our full- and part-time employees (other than our CEO) as of December 31, 2022, the last day of fiscal 2022. Our employee population consisted of individuals (other than our CEO) working at our parent company and consolidated subsidiaries both within and outside the United States. We did not include any contractors or other non-employee workers in our employee population. We used a consistently applied compensation measure consisting of actual annual base salary, actual bonus and, commission amounts earned, matching contributions made by us under our 401(k) plan, and the grant date fair value of equity awards for the year ended December 31, 2022 to identify our median employee. For simplicity, we calculated annual base salary using a reasonable estimate of the hours worked during fiscal 2022 for hourly employees and actual salary paid for our remaining employees. We annualized compensation for any full-time and part-time employees who commenced work during fiscal 2022 to reflect a full year. Equity awards granted during the year were included using the same methodology we use for our named executive officers in our Summary Compensation Table. We did not make any cost-of-living adjustment. Using this approach, we identified the individual at the median of our employee population who was the best representative of our employee population. The individual is a full-time employee based in the United States. We then calculated the fiscal 2023 annual total compensation for this individual using the same methodology we use for our named executive officers as set forth in our fiscal 2023 Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table. Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates, and assumptions in calculating their pay ratios. As explained by the SEC when it adopted these rules, the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.

  75. Pay Versus Performance

    Pay Versus Performance In accordance with Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationships between compensation actually paid to named executive officers and company performance. In this section, we refer to “compensation actually paid” and other terms used in the applicable SEC rules. For information concerning the company’s compensation philosophy and how the company aligns executive compensation with its financial and operational performance, refer to the section titled “Executive Compensation – Compensation Discussion and Analysis” above. We refer collectively to awards of RSUs, PRSUs, and stock options as equity awards in this Pay versus Performance section. For purposes of the tables below, our CEO and non-CEO named executive officers for 2020, 2021, 2022, and 2023 are the following:

  76. Pay Versus Performance

    | Year | CEO | Non-CEO Named Executive Officers | | 2023 | Daniel Burton | Bryan Hunt, Jason Alger, Benjamin Landry, Linda Llewelyn, and Daniel Orenstein | | 2022 | Daniel Burton | Bryan Hunt, Patrick Nelli, Paul Horstmeier, Daniel Orenstein, and Kevin Freeman | | 2021 | Daniel Burton | Bryan Hunt, Patrick Nelli, Paul Horstmeier, and Daniel Orenstein | | 2020 | Daniel Burton | Patrick Nelli, Paul Horstmeier, Daniel Orenstein, and Linda Llewelyn |

  77. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table (SCT) Total for CEO(1) | CompensationActually Paid to CEO(2) | Average SCT Total for Non-CEO NEOs | Average CompensationActually Paid to Non-CEO NEOs(2) | Total Shareholder Return(3) | Peer Group Total Shareholder Return(3)(4) | Net Loss(5) (in thousands) | Adjusted EBITDA(6) (in thousands) | | 2023 | $— | $(59,146) | $1,222,403 | $735,127 | $27 | $106 | $(118,147) | $11,021 | | 2022 | 4,435,013 | (8,154,225) | 3,189,684 | (766,685) | 31 | 100 | (137,403) | (2,487) | | 2021 | 5,961,043 | 5,615,764 | 3,297,583 | 2,846,251 | 114 | 125 | (153,210) | (11,248) | | 2020 | 5,484,782 | 9,793,002 | 2,382,879 | 3,260,067 | 125 | 130 | (115,017) | (21,287) |

  78. Pay Versus Performance

    | (1) Represents the total compensation reported for the CEO for each corresponding year in the “Total” column of the Summary Compensation Table. | | (2) The calculation for “Compensation Actually Paid” is presented in the table below in accordance with the requirements of Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the CEO and non-CEO NEOs during the applicable year. | | (3) For Health Catalyst and our peer group, the TSR for each year reflects what the cumulative value of $100 would be, including reinvestment of dividends, if such amount were invested on December 31, 2019. | | (4) As permitted by SEC rules, the peer group referenced for purposes of “Peer Group Total Shareholder Return” is that of the Nasdaq Health Care Index, which is the industry index reported in our annual report on Form 10-K for 2023 in accordance with Regulation S-K Item 201(e). | | (5) The dollar amounts reported represent the amount of net loss reflected in our audited consolidated financial statements for the applicable year. | | (6) Adjusted EBITDA is the financial measure from the tabular list of most important performance measures below, which represents the most important measure used to link compensation actually paid to our named executive officers in fiscal 2023 to the company’s performance. Adjusted EBITDA is a non-GAAP financial measure. For an explanation of our management’s use of Adjusted EBITDA and a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, please see Appendix A to this Proxy Statement. |

  79. Pay Versus Performance

    | | | 2022 | | 2023 | | | | | CEO | Avg. Non-CEO NEOs | CEO | Avg. Non-CEO NEOs | | Summary Compensation Table Total | | $4,435,013 | $3,189,684 | $— | $1,222,403 | | - | Grant date fair value of awards granted in fiscal year | (4,276,117) | (2,602,345) | — | (919,465) | | + | Year-end fair value of outstanding and unvested awards granted in fiscal year | 996,562 | 692,192 | — | 411,951 | | + | Change in fair value of outstanding and unvested awards granted in prior fiscal years | (4,431,879) | (755,897) | (132,027) | (30,346) | | + | Change in fair value as of vesting date of awards granted in prior years that vested in fiscal year | (5,164,119) | (1,391,513) | 72,881 | 15,072 | | + | Fair value as of vesting date of awards granted and vested in fiscal year | 286,315 | 260,625 | — | 91,320 | | - | Fair value as of prior fiscal year-end of awards granted in prior years that were forfeited in fiscal year | — | (159,431) | — | (55,808) | | Compensation Actually Paid | | $(8,154,225) | $(766,685) | $(59,146) | $735,127 |

  80. Pay Versus Performance

    The table above reconciles Summary Compensation Table pay to Compensation Actually Paid in accordance with the required methodology from Item 402(v) of Regulation S-K, meaning that outstanding awards have been valued prior to vesting based on fair values. The change in fair values of RSUs across measurement dates is attributable to the change in stock prices. The change in the fair values of stock options is measured using a Black-Scholes model and is driven by changes in stock price and the expected life of the stock options as well as the prevailing stock price volatility, risk-free rate, and dividend yield at the measurement date. The change in the fair values of the PRSUs reflects our projected payout factors relative to the performance metric and stock price as at fiscal year-end.

  81. Description of Relationships Between Information Presented

    | Compensation Actually Paid and Cumulative TSR |

  82. Description of Relationships Between Information Presented

    | Compensation Actually Paid and Net Loss |

  83. Description of Relationships Between Information Presented

    | Compensation Actually Paid and Adjusted EBITDA |

  84. Stock Option Grants to Directors and Executive Officers

    Stock Option Grants to Directors and Executive Officers We have granted RSUs, PRSUs and stock options to certain of our directors and executive officers. For more information regarding the stock options and stock awards granted to our directors and named executive officers see the section titled “Management—Non-Employee Director Compensation” and “Executive Compensation.”

  85. Other Transactions

    Other Transactions Other than as described above, since January 1, 2023, we have not entered into any transactions, nor are there any currently proposed transactions, between us and a related party where the amount involved exceeds, or would exceed, $120,000, and in which any related person had or will have a direct or indirect material interest. We believe the terms of the transactions described above were comparable to terms we could have obtained in arms-length dealings with unrelated third parties.

  86. Limitation of Liability and Indemnification of Directors and Officers

    Limitation of Liability and Indemnification of Directors and Officers We have adopted an amended and restated certificate of incorporation, which contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors are not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for the following:

  87. Limitation of Liability and Indemnification of Directors and Officers

    | • | any breach of their duty of loyalty to our company or our stockholders; | | • | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | | • | unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or | | • | any transaction from which they derived an improper personal benefit. |

  88. Limitation of Liability and Indemnification of Directors and Officers

    Any amendment to, or repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law (as amended, the DGCL) is amended to provide for further limitations on the personal liability of directors of corporations, then the personal liability of our directors will be further limited to the greatest extent permitted by the DGCL. In addition, we have adopted amended and restated bylaws, which provide that we will indemnify, to the fullest extent permitted by law, any person who is or was a party or is threatened to be made a party to any action, suit, or proceeding by reason of the fact that he or she is or was one of our directors or officers or is or was serving at our request as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise. Our bylaws provide that we may indemnify to the fullest extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit, or proceeding by reason of the fact that he or she is or was one of our employees or agents or is or was serving at our request as an employee or agent of another corporation, partnership, joint venture, trust, or other enterprise. Our bylaws also provide that we must advance expenses incurred by or on behalf of a director or officer in advance of the final disposition of any action or proceeding, subject to limited exceptions. Further, we have entered into or will enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers. The limitation of liability and indemnification provisions that are included in our amended and restated certificate of incorporation, our bylaws, and in indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification. We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law. Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

  89. Adjusted EBITDA

    Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other (income) expense, net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, including the fair change in value of contingent consideration liabilities for potential earn-out payments, (vi) litigation costs, (vii) restructuring costs, and (viii) non-recurring lease-related charges. We view acquisition-related expenses when applicable, such as transaction costs and changes in the fair value of contingent consideration liabilities that are directly related to business combinations, as costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs, litigation costs, and non-recurring lease-related charges allows for more meaningful comparisons between operating results from period to period as this is separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three and twelve months ended December 31, 2023 and 2022:

  90. Adjusted EBITDA

    | | Three Months Ended December 31, | | Twelve Months Ended December 31, | | | | 2023 | 2022 | 2023 | 2022 | | | (in thousands) | | (in thousands) | | | Net loss | $(30,312) | $(35,782) | $(118,147) | $(137,403) | | Add: | | | | | | Interest and other (income) expense, net | (2,616) | (1,022) | (9,106) | 1,678 | | Income tax provision (benefit) | 143 | 59 | 356 | (4,280) | | Depreciation and amortization | 10,304 | 11,664 | 42,223 | 48,297 | | Stock-based compensation | 13,011 | 18,748 | 55,756 | 72,104 | | Acquisition-related costs, net(1) | 2,655 | 1,706 | 5,757 | 4,894 | | Litigation costs(2) | — | — | 21,279 | — | | Restructuring costs(3) | 6,767 | 3,926 | 8,822 | 8,425 | | Non-recurring lease-related charges(4) | 1,400 | 98 | 4,081 | 3,798 | | Adjusted EBITDA | $1,352 | $(603) | $11,021 | $(2,487) |

  91. Adjusted EBITDA

    __________________ (1)Acquisition-related costs, net includes third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. (2)Litigation costs include costs related to litigation that are outside the ordinary course of our business. (3)Restructuring costs include severance and other team member costs from workforce reductions, impairment of discontinued capitalized software projects, and other miscellaneous charges. (4)Non-recurring lease-related charges includes lease-related impairment charges for the subleased portion of our corporate headquarters.