BrightSpring Health Services, Inc DEF 14A, filed Apr 18, 2025
BrightSpring Health Services, Inc. (BTSG)
About this DEF 14A
BrightSpring Health Services, Inc filed this DEF 14A on April 18, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ |
Filed by a Party other than the Registrant ☐ |
Check the appropriate box:
☐ |
|
Preliminary Proxy Statement |
☐ |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ |
|
Definitive Proxy Statement |
☐ |
|
Definitive Additional Materials |
☐ |
|
Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ |
|
No fee required |
☐ |
|
Fee paid previously with preliminary materials |
☐ |
|
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
April 18, 2025
BRIGHTSPRING HEALTH SERVICES, INC.
805 N. Whittington Parkway
Louisville, KY 40222
Dear Stockholder:
Please join us for BrightSpring Health Services, Inc.’s Annual Meeting of Stockholders on Wednesday, May 28, 2025, at 1:00 p.m., Eastern Time. The Annual Meeting will be held in a virtual meeting format only and will be conducted via live audio webcast. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting via a live audio webcast by visiting www.proxydocs.com/BTSG.
Attached to this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the meeting. The Notice of Internet Availability of this Proxy Statement and Annual Report and the proxy card are first being sent to stockholders on or about April 18, 2025. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy.
At the Annual Meeting, you will be asked to:
Whether or not you plan to attend the meeting, your vote is important to us. You may vote your shares by proxy on the Internet, by telephone or by completing, signing and promptly returning a proxy card prior to the Annual Meeting, or you may vote via the Internet at the Annual Meeting. We encourage you to vote by Internet, by telephone or by proxy card in advance even if you plan to attend the Annual Meeting. By doing so, you will ensure that your shares are represented and voted at the Annual Meeting.
Thank you for your continued support of BrightSpring Health Services, Inc.
|
|
Sincerely, |
|
|
|
|
|
/s/ Jon Rousseau |
|
|
|
|
|
Jon Rousseau |
|
|
|
|
|
President and Chief Executive Officer and Chairman of the Board of Directors |
BrightSpring Health Services, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME |
|
|
1:00 p.m., Eastern Time, on Wednesday, May 28, 2025. |
|
||
VIRTUAL LOCATION |
|
|
You can attend the Annual Meeting online and submit your questions during the Annual Meeting by visiting www.proxydocs.com/BTSG. You can vote your shares electronically by visiting www.proxypush.com/BTSG. You will need to have your 12-Digit Control Number included on your proxy card or the instructions that accompanied your proxy materials in order to join the Annual Meeting. |
|
||
ITEMS OF BUSINESS |
|
|
1. To elect the Class I director nominees listed in the Proxy Statement. |
|
||
|
|
|
2. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2025. |
|
||
|
|
|
3. To hold an advisory vote on the compensation of our named executive officers. |
|
||
|
|
|
4. To hold an advisory vote on the frequency of holding an advisory vote on executive compensation. |
|
||
|
|
|
5. To consider such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. |
|
||
|
|
|
|
|
||
RECORD DATE |
|
|
You may vote at the Annual Meeting if you were a stockholder of record at the close of business on March 31, 2025. |
|
||
|
|
|
|
|
||
VOTING BY PROXY |
|
|
To ensure your shares are voted, you may vote your shares over the Internet, by telephone or by completing, signing and mailing the proxy card prior to the Annual Meeting. Voting procedures are described on the following page and on the proxy card. |
|
||
|
|
|
|
|
|
|
|
By Order of the Board of Directors, |
|
|
|||
|
/s/ Jennifer Phipps |
|
|
|||
|
Jennifer Phipps |
|
|
|||
|
Executive Vice President and Chief Financial Officer, Corporate Secretary April 18, 2025 |
|
|
|||
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on Wednesday, May 28, 2025: This Proxy Statement and our Annual Report are available free of charge at www.proxydocs.com/BTSG. Stockholders will not otherwise receive a paper copy or email copy of Proxy Materials. A complete list of our stockholders will be open to the examination of any stockholder for a period of 10 days prior to the Annual Meeting for a purpose germane to the meeting by sending an email to the Corporate Secretary at CorporateSecretary@brightspringhealth.com, stating the purpose of the request and providing proof of ownership of Company stock. The list of these stockholders will also be available on the portal to enter the Annual Meeting, and stockholders will receive an access code to view the list with their unique link to access the Annual Meeting.
PROXY VOTING METHODS
If you were a stockholder of record at the close of business on March 31, 2025, you may vote your shares (i) over the Internet, by telephone or by mail in advance of the Annual Meeting or (ii) over the Internet at the Annual Meeting. You may also revoke your proxies at the times and in the manners described in the General Information section of this Proxy Statement. For shares held through a broker, bank or other nominee, you may submit voting instructions to your broker, bank or other nominee. Please refer to information from your broker, bank or other nominee on how to submit voting instructions.
If you are a stockholder of record, your Internet, telephone or mail vote must be received by 11:59 p.m., Eastern Time, on May 27, 2025 to be counted. If you hold shares through a broker, bank or other nominee, please refer to information from your broker, bank or nominee for voting instructions.
To vote by proxy if you are a stockholder of record:
BY INTERNET
BY TELEPHONE
BY MAIL
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
Table of Contents
Forward-Looking Statements
This Proxy Statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical or current facts made in this document are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (our “2024 10-K”). Website references throughout this Proxy Statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this Proxy Statement.
1
BRIGHTSPRING HEALTH SERVICES, INC.
805 N. Whittington Parkway
Louisville, Kentucky 40222
Telephone: (502) 394-2100
PROXY STATEMENT
Annual Meeting of Stockholders
May 28, 2025
1 p.m., Eastern Time
GENERAL INFORMATION
Why am I being provided with these materials?
The notice containing instructions on how to access this Proxy Statement and Annual Report and proxy card are first being sent to stockholders on or about April 18, 2025. We have delivered these proxy materials to you in connection with the solicitation by the Board of Directors (the “Board” or “Board of Directors”) of BrightSpring Health Services, Inc. (“we”, “our”, “us” and the “Company”) of proxies to be voted at our Annual Meeting of Stockholders to be held on May 28, 2025 (the “Annual Meeting”), and at any postponements or adjournments of the Annual Meeting. You are invited to attend the Annual Meeting and vote your shares during the meeting via the Internet or to vote your shares in advance by proxy via the Internet, by telephone or by mail.
What am I voting on?
There are four (4) proposals scheduled to be voted on at the Annual Meeting:
Who is entitled to vote?
Stockholders as of the close of business on March 31, 2025 (the “Record Date”) may vote at the Annual Meeting or any postponement or adjournment thereof. As of that date, there were 175,070,732 shares of our common stock outstanding. Holders of our common stock have one (1) vote for each share of common stock held as of the Record Date including shares:
What constitutes a quorum?
The virtual presence or representation by proxy of the holders of record of a majority of the voting power of the issued and outstanding shares of capital stock of the Company entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders. Abstentions and shares represented by “broker non-votes” that are present and entitled to vote at the Annual Meeting are counted for purposes of determining a quorum.
What is a “broker non-vote”?
A broker non-vote occurs when shares held through a broker are not voted with respect to a proposal because (1) the broker has not received voting instructions from the stockholder who beneficially owns the shares and (2) the broker lacks the authority to vote the shares at its discretion. Proposal No. 1, Proposal No. 3 and Proposal No. 4 are each considered non-routine matters, and a broker will lack the authority to vote uninstructed shares at their discretion on such proposals. Proposal No. 2 is considered a routine matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on this proposal.
2
How many votes are required to approve each proposal?
For Proposal No. 1, under our Amended and Restated Bylaws (the “Bylaws”), directors are elected by a plurality vote, which means that the director nominees with the greatest number of votes cast, even if less than a majority, will be elected. There is no cumulative voting. As a result, any shares not voted “FOR” a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted in the nominee’s favor and will have no effect on the outcome of the election. You may vote “FOR” or “WITHHOLD” on each nominee for election as a director.
For Proposal Nos. 2, 3 and 4, under our Bylaws, approval of the proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of stock present virtually or represented by proxy and entitled to vote on the proposal.
It is important to note that each of the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2025 (Proposal No. 2), the proposal regarding the compensation of our named executive officers (Proposal No. 3), and the proposal regarding the frequency of the advisory vote on executive compensation (Proposal No. 4) is non-binding and advisory. While the ratification of KPMG LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise, if our stockholders fail to ratify the selection, we will consider it notice to the Board and the Audit Committee of the Board (the “Audit Committee”) to consider the selection of a different firm. Similarly, the Board and the Compensation Committee of the Board (the “Compensation Committee”) will consider the outcome of the advisory, non-binding votes when determining the compensation of our named executive officers and the frequency of holding an advisory vote on executive compensation.
How are votes counted?
With respect to the election of a director (Proposal No. 1), you may vote “FOR” or “WITHHOLD” with respect to each nominee. Votes that are “withheld” will not count as a vote “FOR” or “AGAINST” a director because directors are elected by plurality voting. Broker non-votes will have no effect on the outcome of Proposal No. 1.
With respect to the ratification of our independent registered public accounting firm (Proposal No. 2), you may vote “FOR,” “AGAINST,” or “ABSTAIN.” Abstentions will be counted as a vote “AGAINST” Proposal No. 2.
With respect to the advisory, non-binding vote on the compensation of our named executive officers (Proposal No. 3), you may select “FOR,” “AGAINST,” or “ABSTAIN.” Abstentions will be counted as a vote “AGAINST” Proposal No. 3. Broker non-votes will not affect the outcome of voting on this proposal.
With respect to the advisory, non-binding vote of the frequency of the advisory vote on executive compensation (Proposal No. 4), you may select “1 YEAR,” “2 YEARS,” “3 YEARS,” or “ABSTAIN.” Abstentions and broker non-votes will not affect the outcome of voting on this proposal.
If you sign and submit your proxy card without voting instructions, your shares will be voted in accordance with the recommendation of the Board with respect to the Proposals and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted upon.
How does the Board recommend that I vote?
Our Board recommends that you vote your shares:
Who will count the vote?
A representative of BetaNXT or its designee will tabulate the votes and act as the inspector of election.
How do I vote my shares without attending the Annual Meeting?
If you are a stockholder of record, you may vote by authorizing a proxy to vote on your behalf at the Annual Meeting. Specifically, you may authorize a proxy:
3
Internet and telephone voting facilities will close at 11:59 p.m., Eastern Time, on May 27, 2025, for the voting of shares held by stockholders of record as of the Record Date. Proxy cards with respect to shares held of record must be received no later than May 27, 2025.
If you hold your shares in street name, you may submit voting instructions to your broker, bank or other nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail. Please refer to information from your bank, broker or other nominee on how to submit voting instructions and for timing of submissions.
How do I attend and vote my shares at the Virtual Annual Meeting?
This year’s Annual Meeting will be a completely “virtual” meeting of stockholders. The virtual shareholder meeting webcast allows all stockholders to join the meeting, regardless of location. We aim to provide stockholders the same rights and comparable opportunities for participation that could be provided at an in-person meeting. You may attend the Annual Meeting via the Internet. Any stockholder can attend the Annual Meeting live online at www.proxydocs.com/BTSG. If you virtually attend the Annual Meeting, you can vote your shares electronically, and submit your questions during the Annual Meeting, by visiting www.proxypush.com/BTSG. A summary of the information you need to attend the Annual Meeting and vote via the Internet is provided below:
Will I be able to participate in the online Annual Meeting on the same basis I would be able to participate in a live annual meeting?
The Annual Meeting will be held in a virtual meeting format only and will be conducted via live audio webcast. The online meeting format for the Annual Meeting will enable full and equal participation by all our stockholders from any place in the world at little to no cost.
We designed the format of the online Annual Meeting to ensure that our stockholders who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance stockholder access, participation and communication through online tools. We plan to take the following steps to provide for such an experience:
You can submit questions in writing to the virtual meeting website during the Annual Meeting. You must first join the meeting as described above, click on the “Q&A” tab, type the question into the “Submit a question” field, and click “Submit.” We intend to answer questions pertinent to Company matters as time allows during the meeting. Questions that are substantially similar may be grouped and answered once to avoid repetition. Stockholder questions related to matters that are not pertinent to Annual Meeting matters, or that are otherwise out of order or not suitable for the conduct of the Annual Meeting, will not be addressed during the Annual Meeting. If there are any matters of individual concern to a
4
stockholder and not of general concern to all stockholders, or if a question posed is not otherwise answered, during the Annual Meeting, those matters or questions may be raised separately after the Annual Meeting by contacting our Investor Relations department.
Why did I receive a notice in the mail regarding Internet availability of the proxy materials instead of a paper copy of the full set of proxy materials?
We are pleased to save costs and help protect the environment by using the SEC rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our stockholders a Notice of Internet Availability of the proxy materials instead of a paper copy of the proxy materials. All stockholders receiving the Notice of Internet Availability will have the ability to access the proxy materials over the Internet.
For stockholders who have previously requested to receive paper copies of the proxy materials, we are providing paper copies of the proxy materials instead of a Notice of Internet Availability of the proxy materials.
What does it mean if I receive more than one proxy card on or about the same time?
It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each proxy card or, if you vote by Internet or telephone, vote once for each proxy card you receive.
May I change my vote or revoke my proxy?
Yes. Whether you have voted by Internet, telephone or mail, if you are a stockholder of record, you may change your vote and revoke your proxy by:
If you hold shares in street name, please refer to information from your bank, broker or other nominee on how to revoke or submit new voting instructions.
Could other matters be decided at the Annual Meeting?
As of the date of this Proxy Statement, we do not know of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those matters for you.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees of the Company (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses.
5
PROPOSAL NO. 1—ELECTION OF DIRECTORS
Our Second Amended and Restated Certificate of Incorporation provides for a classified Board of Directors divided into three classes. The Board believes that a classified Board of Directors provides continuity and stability in pursuing the Company’s policies and strategies and reinforces its commitment to long term perspective and value creation. Johnny Kim and Timothy A. Wicks constitute a class with a term that expires at the Annual Meeting of Stockholders in 2025 (the “Class I Directors”); Olivia Kirtley, Max Lin and Steve Miller constitute a class with a term that expires at the Annual Meeting of Stockholders in 2026 (the “Class II Directors”); and Jon Rousseau and Hunter Craig constitute a class with a term that expires at the Annual Meeting of Stockholders in 2027 (the “Class III Directors”).
Johnny Kim was designated for election to the Board of Directors by investment funds and other entities affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR Stockholder”) pursuant to the terms of a Stockholders Agreement (as defined herein) and as set forth in “The Board of Directors and Certain Governance Matters” below.
Unless otherwise instructed, the persons named in the form of proxy card (the “proxyholders”) included with this Proxy Statement intend to vote the proxies held by them “FOR” the election of the director nominees. Each nominee has indicated that he will be willing and able to serve as a director. If the nominee ceases to be a candidate for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), such proxies may be voted by the proxyholders in accordance with the recommendation of the Board.
Nominees for Election to the Board of Directors in 2025
The following information describes the principal occupations, other business directorships and experience, and the term of service of the director nominees. Beneficial ownership of equity securities of each director nominee is shown under “Ownership of Securities” below.
Class I Directors
|
|||
Name |
Age |
|
Principal occupation and other information
|
Johnny Kim |
34 |
|
Johnny Kim has served as a member of our Board of Directors since 2019. Mr. Kim is a Director and has served as a member of the Health Care industry team within KKR & Co.’s Americas Private Equity platform since 2015. Mr. Kim currently serves on the Board of Directors of Argenta, Brightline, Clarify Health Solutions, Global Medical Response, SkinSpirit, and Therapy Brands. Prior to joining KKR & Co., Mr. Kim was with Goldman Sachs (2013-2015) where he was involved in a number of mergers, acquisitions, and financing transactions. He holds an Honors B.A. with distinction from the Ivey Business School, Western University and was an Ivey Scholar. We believe Mr. Kim’s qualifications to serve on our Board of Directors include his significant business, financial, and investment experience related to the healthcare industry and involvement with KKR Stockholder’s investment in the Company. |
Timothy A. Wicks |
59 |
|
Timothy A. Wicks has served on our Board of Directors since April 2024. Mr. Wicks is a Director and currently serves as an independent member of our Audit Committee and as a member of the Compensation Committee. Mr. Wicks previously served as the Executive Vice President of Optum, Inc., part of UnitedHealth Group until his retirement in 2021. While with Optum Mr. Wicks held a variety of executive leadership and oversight functions, including Chief Financial Officer for Optum, an executive oversight role over Optum Financial, which was the largest healthcare-focused bank and financial services firm in US with over $15 billion in assets, head of supply chain, and chief executive officer of OptumRx that had revenues exceeding $60 billion. In addition, Mr. Wicks has previously served on the boards of three other public companies: Precision Castparts Corp (sold to Berkshire Hathaway for $37B), Aerojet Rocketdyne (sold to L3Harris Technologies, Inc.), and Pear Therapeutics. Mr. Wicks currently serves on the Board of Directors, and is chair of the advisory board, of MOBE, which is a privately held company. Mr. Wicks also serves as an Advisor to the CEO of Hope for the Child, a not-for-profit that has provided early primary education and welfare for over 7,000 highly needy children in Kenya. Mr. Wicks earned a BA in economics, with honors, from the University of Chicago and an MBA from Harvard University's Graduate School of Business. We believe Mr. Wicks possesses the qualifications to serve on our Board of Directors, and such qualifications include his financial, executive, and business relations experience in the healthcare industry.
|
6
Vote Required
With respect to the election of the director nominees, you may vote “FOR” or “WITHHOLD” with respect to each nominee. Votes that are “withheld” will not count as a vote “FOR” or “AGAINST” a director because directors are elected by plurality voting. Broker non-votes will have no effect on the outcome of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE DIRECTOR NOMINEES NAMED ABOVE.
Continuing Members of the Board of Directors
The following information describes the principal occupations, other business directorships and experience, and the class and term of each director whose term continues beyond the Annual Meeting and who is not subject to election this year. Beneficial ownership of equity securities for these directors is also shown under “Ownership of Securities” below.
Class II Directors
|
|||
Name |
Age |
|
Principal occupation and other information
|
Olivia Kirtley |
74 |
|
Olivia Kirtley has served as a member of our Board of Directors since January 25, 2024. Ms. Kirtley, a Certified Public Accountant and Chartered Global Management Accountant, has worked as a business consultant focused on strategic, risk and corporate governance issues since 2000, and prior to 2000, she served as a senior manager at a predecessor to the accounting firm Ernst & Young LLP and as chief financial officer and treasurer of Vermont American Corporation. Ms. Kirtley served as President and Chairman of the International Federation of Accountants (2014-2016), and also served as Chairman of the American Institute of Certified Public Accountants, or AICPA (1998-1999), and Chairman of the AICPA Board of Examiners. Ms. Kirtley has served on the board of Vista Credit Strategic Lending Corp. since 2023, and previously served on the board of Papa John’s International (2003-2023), on the board of U.S. Bancorp (2006-2023), on the board of Rangold Resources Ltd (2017-2019) and on the board of a predecessor of the Company, ResCare, Inc. (1998-2019). She holds a B.S. in Accounting from Florida Southern College, and a Master’s Degree in Taxation from Georgia State University. We believe Ms. Kirtley’s qualifications to serve on our Board of Directors include her extensive audit, financial reporting, and risk management experience and experience serving on public company boards. |
Max Lin |
44 |
|
Max Lin has served as a member of our Board of Directors since 2017. Mr. Lin is a Partner at KKR & Co. where he leads the Health Care industry team within its Americas Private Equity platform and serves as a member of the Investment Committee and Portfolio Management Committee for Americas Private Equity, the Health Care Strategic Growth Investment Committee, and the Global Conflicts and Compliance Committee. Mr. Lin was involved in KKR & Co.’s investments in 123Dentist, Coherus BioSciences, Covenant Physician Partners, Envision Healthcare, Global Medical Response, HCA, Heartland Dental, PetVet Care Centers, PRA Health Sciences, Therapy Brands, and Zimmer Biomet, among others. Prior to joining KKR & Co., Mr. Lin was with Morgan Stanley where he was involved in a number of mergers, acquisitions, and financing transactions. He holds a B.S. and B.A.S., summa cum laude, from the University of Pennsylvania and an M.B.A. from Harvard Business School. We believe Mr. Lin’s qualifications to serve on our Board of Directors include his significant business, financial, and investment experience related to the healthcare industry and involvement with KKR Stockholder’s investment in the Company. |
Steve Miller |
67 |
|
Dr. Steve Miller has served as a member of our Board of Directors since 2024. Dr. Miller served as the Chief Clinical Officer for Cigna from 2018 to 2022, transitioning to an expert advisor role in 2022 for Cigna’s efforts across clinical policy, quality, and performance programs. Previously, Dr. Miller was the Chief Medical Officer at Express Scripts from 2005 to 2018 and the Chief Medical Officer at Barnes-Jewish Hospital from 1999 to 2005. He is currently the Chief Medical Officer at MediBeacon, a medical technology company specializing in fluorescent tracer agents and transdermal measurement. Dr. Miller received his medical degree from the University of Missouri-Kansas City. He trained in the Pathology and Research fellowship at the University of Alabama at Birmingham. He was the William J. and Dorothy Fish Kerr Fellow in Cardiology at the University of California, San Francisco. Dr. Miller also did Internal Medicine training at the University of Colorado and Nephrology and Transplantation at Washington University in St. Louis. He earned his MBA at the |
7
|
|
|
Olin School of Business at Washington University in St. Louis. We believe Dr. Miller’s qualifications to serve on our Board of Directors include his extensive business and clinical experience in the healthcare industry. |
8
Class III Directors
|
|||
Name |
Age |
|
Principal occupation and other information
|
Jon Rousseau |
53 |
|
Jon Rousseau has served as our President and Chief Executive Officer since September 2016, and the Chairman of our Board of Directors since January 2024. Prior to joining the Company, Mr. Rousseau was an executive vice president at Kindred Healthcare, Inc. with multiple leadership roles from June 2013 – July 2016, including president of Kindred Rehabilitation Services, and prior to that, president of the Care Management Division and Kindred at Home, Kindred’s home health, hospice, home care and home-based primary care businesses. Before Kindred, Mr. Rousseau held a number of senior leadership positions at other market-leading healthcare product and technology companies, including vice president of global marketing, strategy, and commercial development at Mylan, Inc. and global senior director of the continuous glucose monitoring franchise with Medtronic PLC (2006 – 2013). For the first part of his career, Mr. Rousseau worked at Friedman Fleischer & Lowe LLC in private equity (1998 – 2005) and at Morgan Stanley in investment banking (1996 – 1998). He received his MBA from Harvard Business School and his A.B. degree from Princeton University. We believe Mr. Rousseau’s qualifications to serve on our Board of Directors include his extensive executive and leadership experience in the healthcare industry and his multi-disciplinary background. |
Hunter Craig |
43 |
|
Hunter Craig has served as a member of our Board of Directors since May 2020. Mr. Craig joined KKR & Co. in 2020 and is a member of the Health Care industry team within KKR & Co.’s Americas Private Equity platform. He currently serves on the Board of Directors of 123Dentist and Heartland Dental. Prior to joining KKR & Co., Mr. Craig was a vice president at GTCR (2013-2020), where he was involved in investments across the healthcare sector. He began his career as an investment banking analyst in the global industrial & services group at Credit Suisse. Mr. Craig holds a B.B.A., magna cum laude, in Accountancy and Theology from the University of Notre Dame and an M.B.A. from Harvard Business School. We believe Mr. Craig’s qualifications to serve on our Board of Directors include his significant business, financial, and investment experience related to the healthcare industry and involvement with KKR Stockholder’s investment in the Company.
|
9
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS
Our Board of Directors manages or directs our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board of Directors and three standing committees: the Audit Committee; the Compensation Committee; and the Quality & Compliance and Governance Committee.
Our Board evaluates the Company’s corporate governance policies on an ongoing basis with a view towards maintaining the best corporate governance practices in the context of the Company’s current business environment and aligning our governance practices closely with the interests of our stockholders. Our Board and management value the perspective of our stockholders and encourage stockholders to communicate with the Board as described under “Communications with the Board” below.
The Stockholders Agreement described under “Transactions with Related Persons—Stockholders Agreement” provides that certain affiliates of investment funds and other entities affiliated with KKR Stockholder and an affiliate of Walgreens Boots Alliance, Inc. (“Walgreens Stockholder”) have the right to designate nominees to our Board of Directors subject to the maintenance of certain ownership requirements in us. As of the record date, the KKR Stockholder continues to meet its ownership requirements and has the right to designate the number of directors and director votes as specified in the Stockholders Agreement. Mr. Kim is the director nominee of the KKR Stockholder pursuant to the Stockholders Agreement. The Walgreens Stockholder has declined to nominate a director pursuant to the Stockholders Agreement.
Controlled Company Exemption
Investment funds and other entities affiliated with Kohlberg Kravis Roberts & Co. L.P. collectively beneficially own shares representing approximately 54% of the voting power of our shares eligible to vote in the election of directors, as of the record date. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq.
Under these corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our Board of Directors consist of independent directors, (2) that our Board of Directors have a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, and (3) that director nominations be made, or recommended to the full Board of Directors, by our independent directors or by a nominating and governance committee that is comprised entirely of independent directors with a written charter or board resolution addressing the nominations process and such related matters. See “Director Independence and Independence Determinations” below for more information about the independence of each of our directors.
In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq, we will be required to comply with these standards and, depending on our Board of Directors’ independence determination with respect to our then-current directors, we may be required to add additional directors to our Board of Directors in order to achieve such compliance within the applicable transition periods.
Director Independence and Independence Determinations
Under our Corporate Governance Guidelines and Nasdaq rules, a director is not independent unless our Board of Directors affirmatively determines that he or she does not have a have a relationship which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our Corporate Governance Guidelines define independence in accordance with the independence definition in the current Nasdaq corporate governance standards for listed companies. Our Corporate Governance Guidelines require our Board of Directors to review the independence of all directors at least annually, subject to a determination by us to rely on the exemption available to controlled companies and the applicable transition period under the applicable Nasdaq rules.
In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the Nasdaq independence definition, our Board of Directors will determine, considering all relevant facts and circumstances, whether such relationship is material.
Our Board of Directors has affirmatively determined that each of Ms. Kirtley, Dr. Miller and Messrs. Wicks, Craig, Kim and Lin is independent under the guidelines for director independence set forth in the Corporate Governance Guidelines and under all applicable Nasdaq guidelines, including with respect to committee membership. Our Board also has determined that each of Ms. Kirtley, Dr. Miller and Mr. Wicks are each “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that each of Ms. Kirtley and Messrs. Lin and Wicks is “independent” for purposes of Section 10C(a)(3) of the Exchange Act. In making its independence determinations, our Board of Directors considered and reviewed all information known to it (including information identified through annual directors’ questionnaires).
10
Director Nomination Process
As a “controlled company,” we rely on the Nasdaq exemption from the requirement that director nominations be made, or recommended to the full Board of Directors, by our independent directors or by a nominating and governance committee that is comprised entirely of independent directors with a written charter or board resolution addressing the nominations process and such related matters. Pursuant to our Corporate Governance Guidelines, the Board is responsible for reviewing the qualifications of potential director candidates and selecting those candidates to be nominated for election to the Board, subject to any obligations and procedures governing the nomination of directors to the Board that may be set forth in the Stockholders Agreement. The Board may consider (a) minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and an ability to work collegially with the other members of the Board and (b) all other factors it considers appropriate, which may include age, diversity of background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations such as antitrust issues, corporate governance background, various and relevant career experience, relevant technical skills, relevant business or government acumen, financial and accounting background, executive compensation background and the size, composition and combined expertise of the existing Board. The Board monitors the mix of specific experience, qualifications and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure.
In addition to the process described above, the Board also nominates the number of individuals designated by the KKR Stockholder as required under the provisions of the Stockholders Agreement described under “Transactions With Related Persons—Stockholders Agreement.” Mr. Kim is the director nominee of the KKR Stockholder pursuant to the Stockholders Agreement.
When considering whether the nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on the information discussed in each board member’s biographical information set forth above. This process resulted in the Board’s nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the upcoming Annual Meeting.
We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.
The Board will consider director candidates recommended by stockholders. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Section 14(a) of the Exchange Act, and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the Company’s proxy statement as a nominee of the stockholder and to serving as a director if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Secretary, BrightSpring Health Services, Inc., 805 N. Whittington Parkway, Louisville, Kentucky 40222. All recommendations for nomination received by the Secretary that satisfy our Bylaw requirements relating to director nominations will be presented to the Board for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These requirements are also described under “Stockholder Proposals for the 2026 Annual Meeting.”
Board Structure
Our Board of Directors is led by Mr. Rousseau, our Chairman of the Board and Chief Executive Officer. The Board maintains the flexibility to determine whether the roles of Chairman and Chief Executive Officer should be combined or separated, based on what it believes is in the best interests of the Company at a given point in time. The Board believes that this flexibility is in the best interest of the Company and that a one-size-fits-all approach to corporate governance, with a mandated independent Chairman, would not result in better governance or oversight. By combining the role of Chairman and Chief Executive Officer in Mr. Rousseau, we have ensured that the Chairman of the Board has a unique understanding of our Company as well as ongoing executive responsibility for the Company. In the Board’s view, this enables the Board to better understand the Company and work with management to enhance stockholder value. In addition, the Board believes that this structure enables it to better fulfill its risk oversight responsibilities and enhances the ability of the Chief Executive Officer to effectively communicate the Board’s view to management.
11
Our Corporate Governance Guidelines provide that whenever the Chairman of our Board is also the Chief Executive Officer or is a director who does not otherwise qualify as an “independent director,” the independent directors may, but are not obligated to, elect from among themselves a Lead Director. The independent directors have not elected a Lead Director at this time.
Executive Sessions
Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least once a year, the independent directors meet in a private session that excludes management and any non-independent directors.
Board Committees and Meetings
The standing committees of our Board of Directors consists of an Audit Committee, a Compensation Committee and a Quality & Compliance and Governance Committee. Our Board of Directors may also establish from time to time any other committees that it deems necessary or desirable. We do not currently have a nominating committee, and such nominating functions are held by the Board collectively in accordance with our governing documents. We are exempt from the requirement that our director nominees be selected, or recommended for our board of directors’ selection, by a nominating/governance committee comprised solely of independent directors due to our status as a “controlled company” under the rules of Nasdaq.
The following table summarizes the current membership of each of the Board’s committees and the number of meetings held by each committee during the year ended December 31, 2024.
|
|
Audit |
|
Compensation |
|
Quality & |
Hunter Craig |
|
|
|
|
|
X |
Olivia Kirtley |
|
Chair |
|
X |
|
|
Johnny Kim |
|
|
|
|
|
|
Max Lin |
|
|
|
Chair |
|
|
Steve Miller |
|
X |
|
|
|
Chair |
Jon Rousseau |
|
|
|
|
|
|
Timothy A. Wicks |
|
X |
|
X |
|
X |
Number of meetings held in 2024 |
|
5 |
|
4 |
|
4 |
Directors are expected to attend annual meetings of stockholders. During the year ended December 31, 2024, the Board held five meetings. In 2024, all of our directors attended at least 75% of the meetings of the Board and committees during the time in which he or she served as a member of the Board or such committee.
Audit Committee
Our Audit Committee consists of Olivia Kirtley, who serves as the Chair, Timothy A. Wicks, and Dr. Steve Miller. All members of the Audit Committee have been determined to be “independent,” consistent with our Audit Committee charter, Corporate Governance Guidelines and the Nasdaq listing standards applicable to boards of directors in general and audit committees in particular. In addition, Ms. Kirtley, Mr. Wicks, and Dr. Miller each qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K. Mr. Kim previously served on the Audit Committee, but resigned as a member of the Audit Committee in January 2025 in compliance with the “controlled company” exemption that requires a listed company’s audit committee to be fully independent one year following its listing date.
The purpose of the Audit Committee is to prepare the audit committee report required by the SEC to be included in our proxy statement and to assist our Board of Directors in overseeing:
12
Our Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at ir.brightspringhealth.com under Corporate Governance → Governance Overview → Audit Committee Charter.
Compensation Committee
Our Compensation Committee, consists of Max Lin, who serves as Chair, Olivia Kirtley, and Timothy A. Wicks.
The purpose of the Compensation Committee is to assist our Board in discharging its responsibilities relating to:
Our Board of Directors has adopted a written charter for the Compensation Committee, which is available on our website at ir.brightspringhealth.com under Corporate Governance → Governance Overview → Compensation Committee Charter.
Quality & Compliance and Governance Committee
Our Quality & Compliance and Governance Committee, consists of Dr. Steve Miller, who serves as the Chair, and Hunter Craig.
The purpose of the Quality & Compliance and Governance Committee includes:
Our Board of Directors has adopted a written charter for the Quality & Compliance and Governance Committee, which is available on our website at ir.brightspringhealth.com under Corporate Governance → Governance Overview → Quality & Compliance and Governance Committee Charter.
Oversight of Risk Management
Our Board of Directors has extensive involvement in the oversight of risk management related to us and our business. Our Board of Directors accomplishes this oversight both directly and through its Audit Committee, Compensation Committee, and Quality & Compliance and Governance Committee, each of which assists the Board of Directors in overseeing a part of our overall risk management and regularly reports to the Board of Directors. The Audit Committee represents the Board of Directors by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the oversight of administrative and financial controls, our compliance with legal and regulatory requirements and our policies with respect to risk assessment and risk management. Through its regular meetings with management, including the finance, legal and internal audit functions, the Audit Committee reviews and discusses significant areas of our business and related risks and summarizes for the Board of Directors areas of risk and any mitigating factors. The Compensation Committee considers, and discusses with management, management’s assessment of certain risks, including whether any risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us. The Quality & Compliance and Governance Committee represents the Board of Directors by periodically reviewing and discussing with Company management the Company’s major risk exposures
13
relating to the oversight of general internal control and risk management procedures and regulatory compliance programs (excluding financial and other matters which are subject to the oversight of the Audit Committee), and monitoring compliance with the Code of Ethics and Business Conduct by Company personnel. In addition, our Board of Directors receives periodic detailed operating performance reviews from management.
Code of Ethics and Business Conduct
We adopted a Code of Ethics and Business Conduct that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, and principal accounting officer. Our Code of Ethics and Business Conduct is available on our website at ir.brightspringhealth.com under Corporate Governance → Governance Overview → Code of Ethics and Business Conduct. Our Code of Ethics and Business Conduct is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our website at ir.brightspringhealth.com under Corporate Governance → Governance Overview → Code of Ethics and Business Conduct.
Insider Trading Policies and Procedures
The Company has
The Company’s insider trading policy also prohibits directors and employees (including officers) from trading in options, warrants, puts and calls or similar instruments on the Company’s securities or selling such securities short. In addition, directors and employees (including officers) are prohibited from purchasing financial instruments or otherwise engaging in any transactions (including variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of the Company’s equity securities.
The foregoing summary does not purport to be complete and is qualified by reference to the Securities Trading Policy, which is filed as Exhibit 19.1 to the Company’s 2024 10-K.
Communications with the Board
As described in our Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with a member or members of our Board of Directors, including each of the committees of the Board, or with the non-management or independent directors as a group, may do so by addressing such communications or concerns to the Company’s Corporate Secretary 805 N. Whittington Parkway, Louisville, Kentucky 40222, who will forward such communication to the appropriate party.
14
PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed KPMG LLP to serve as our independent registered public accounting firm for 2025.
Although ratification is not required by our Bylaws or otherwise, the Board of Directors is submitting the selection of KPMG LLP to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders fail to ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and our stockholders.
A representative of KPMG LLP is expected to attend the Annual Meeting. The representative will also have the opportunity to make a statement if the representative desires to do so, and the representative is expected to be available to respond to appropriate questions.
Audit and Non-Audit Fees
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2024 and 2023 by KPMG LLP, our independent registered public accounting firm.
|
|
For the Years Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Audit Fees |
|
$ |
3,057,500 |
|
|
$ |
2,953,000 |
|
Audit-Related Fees |
|
|
— |
|
|
|
50,000 |
|
Tax Fees |
|
|
132,590 |
|
|
|
222,000 |
|
All Other Fees |
|
|
161,060 |
|
|
|
3,650 |
|
Total Fees |
|
$ |
3,351,150 |
|
|
$ |
3,228,650 |
|
Audit Fees. This category consists of the annual audit of our consolidated financial statements and the interim reviews of the quarterly consolidated financial statements and services rendered in connection with registration statements, including comfort letters and consents.
Audit-Related Fees. This category consists of fees billed for professional services provided in connection with assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and that are not reported under Audit Fees.
Tax Fees. This category includes all fees associated with tax compliance, tax advice, and tax planning work.
All Other Fees. This category consists of fees for all other services that are not reported above.
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (the “PCAOB”) regarding auditor independence, our audit committee is responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our audit committee has established a policy for the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.
All services were pre-approved by our audit committee, which concluded that the provision of such services by KPMG LLP, was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The audit committee’s pre-approval policy provides for the pre-approval of audit, audit-related and tax services specifically described by the audit committee on an annual basis, and unless a type of service is pre-approved under the policy, it will require separate pre-approval by the audit committee if it is to be provided by the independent registered public accounting firm. The policy authorizes the audit committee to delegate to one or more of its members pre-approval authority with respect to permitted services.
15
Vote Required
Approval of the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2025 requires the affirmative vote of the holders of a majority of the voting power of the shares of stock present virtually or represented by proxy and entitled to vote on the proposal. Abstentions will have the effect of a vote “AGAINST” this proposal and broker non-votes will have no effect on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2025.
16
REPORT OF THE AUDIT COMMITTEE
The Audit Committee operates pursuant to a charter that is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under “The Board of Directors and Certain Governance Matters—Board Committees and Meetings—Audit Committee.” Under the Audit Committee charter, our management is responsible for the preparation, presentation and integrity of our financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America.
In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.
Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Olivia Kirtley, Chair
Steve Miller
Timothy A. Wicks
17
PROPOSAL NO. 3—ADVISORY NON-BINDING VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to cast an advisory, non-binding vote to approve the compensation of our named executive officers as described in this Proxy Statement. This proposal provides our stockholders with the opportunity to express their views on the design and effectiveness of our executive compensation program.
Advisory Non-Binding Vote on Compensation of Named Executive Officers
We believe that our executive compensation philosophy and program, as described below in the “Executive Compensation Discussion and Analysis” section of this Proxy Statement, are effective in achieving our goals, and that the executive compensation reported in this Proxy Statement is appropriate, competitive, and aligned with both short-term and long-term business strategy and outcomes. The compensation program for our named executive officers is focused on pay-for-performance principles. The program is designed to attract, motivate, and retain executive officers in a highly competitive market for executive talent, reward and align the executive officers’ interests with the interests of our stockholders to create long-term value, while at the same time avoiding the encouragement of excessive risk-taking.
For a more detailed discussion of our compensation philosophy, objectives, principles, and programs, we strongly encourage our stockholders to review this Proxy Statement, and in particular the information contained in “Executive Compensation Discussion and Analysis” and in the compensation tables and narrative that follow it in the “Executive Compensation Tables” section of this Proxy Statement.
The vote on executive compensation is not intended to address any specific element of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this Proxy Statement.
Because this vote is advisory in nature, it will not affect any compensation already paid to our named executive officers, and will not be binding on us, the Compensation Committee, or the Board. Although the vote is non-binding, the Compensation Committee and the Board value the opinions of our stockholders and will consider the outcome of the vote in making future executive compensation decisions.
We are asking our stockholders to vote “FOR,” in an advisory vote, the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers as disclosed under “Compensation Discussion and Analysis” pursuant to Item 402 of Regulation S-K, including the accompanying compensation tables and narrative disclosure contained in this Proxy Statement, is hereby APPROVED.”
Vote Required
Approval, on an advisory, non-binding basis, of the compensation of our named executive officers requires the affirmative vote of the holders of a majority of the voting power of the shares of stock present virtually or represented by proxy and entitled to vote on the proposal. Abstentions will have the effect of a vote “AGAINST” this proposal and broker non-votes will have no effect on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
18
Proposal NO. 4—Advisory Vote On The Frequency Of Holding An Advisory Vote On Executive Compensation
Pursuant to SEC rules, the Board is required to submit an advisory, non-binding resolution to stockholders at least once every six (6) years to determine whether advisory, non-binding votes on the Company’s executive compensation should be held every one (1), two (2) or three (3) years. The Company is requesting that its stockholders provide an advisory vote on the frequency of future say-on-pay votes for the first time.
After careful consideration of this proposal and review of prevailing market practice, the Board has determined that an advisory vote on executive compensation that occurs each year, or an annual vote, is the most appropriate frequency for the Company at this time, and therefore the Board recommends an annual advisory vote on executive compensation. In formulating its recommendation, the Board determined that an annual advisory vote on named executive officer compensation will allow stockholders to provide their direct input on our compensation philosophy, policies and practices as disclosed in future proxy statements on a more timely and consistent basis than if the vote were held less frequently.
Stockholders of the Company will have the opportunity to specify one of four choices for this proposal on the proxy card: (1) one year; (2) two years; (3) three years; or (4) abstain. Stockholders are not voting to approve or disapprove the Board’s recommendation. Rather, stockholders are being asked to express their preference regarding the frequency of future advisory votes to approve executive compensation.
While this vote is non-binding, we value the opinions of our shareholders and will consider the outcome of the vote when determining the frequency of future shareholder advisory approvals of executive compensation.
Vote Required
Approval, on an advisory, non-binding basis, of the frequency of holding an advisory vote on compensation of our named executive officers requires the affirmative vote of the holders of a majority of the voting power of the shares of stock present virtually or represented by proxy and entitled to vote on the proposal. Abstentions and broker non-votes will not affect the outcome of voting on this proposal.
THE BOARD OF DIRECTORS recommends that STOCKHOLDERS vote for every “ONE YEAR” with respect to how frequently a STOCKHOLDER advisory approval of executive compensation should occur.
19
EXECUTIVE OFFICERS OF THE COMPANY
The following table presents summary information regarding each of our executive officers as of the date of this Proxy Statement. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among any of our directors or executive officers.
Name |
|
Age |
|
Position |
Jon Rousseau |
|
52 |
|
Chairman, President, and Chief Executive Officer |
Jennifer Phipps |
|
44 |
|
Executive Vice President and Chief Financial Officer, Corporate Secretary |
Jennifer Yowler |
|
48 |
|
President, PharMerica |
Bob Barnes |
|
53 |
|
President, Community Living |
Mike McMaude |
|
57 |
|
President, Hospice Services |
Lisa Nalley |
|
52 |
|
Chief of Staff and Senior Vice President, Human Resources |
Jon Rousseau has served as our President and Chief Executive Officer since September 2016, and the Chairman of our Board since January 2024. Prior to joining the Company, Mr. Rousseau was an executive vice president at Kindred Healthcare, Inc. with multiple leadership roles from June 2013 – July 2016, including president of Kindred Rehabilitation Services and prior to that president of the Care Management Division and Kindred at Home, Kindred’s home health, hospice, home care and home-based primary care businesses. Before Kindred, Mr. Rousseau held a number of senior leadership positions at other market-leading healthcare product and technology companies, including vice president of global marketing, strategy, and commercial development at Mylan, Inc. and global senior director of the continuous glucose monitoring franchise with Medtronic PLC (2006 – 2013). For the first part of his career, Mr. Rousseau worked at Friedman Fleischer & Lowe LLC in private equity (1998 – 2005) and at Morgan Stanley in investment banking (1996 – 1998). He received his MBA from Harvard Business School and his A.B. degree from Princeton University.
Jennifer Phipps has served as our Executive Vice President and Chief Financial Officer since March 2025. Previously, Ms. Phipps served as the Company’s Senior Vice President and Chief Accounting Officer since January 2017 and as Principal Accounting Officer since the Company’s initial public offering in January 2024, as well as Chief Financial Officer of the Company’s Home Health and Hospice business lines since January 2023. In her capacity at the Company Ms. Phipps has also managed and overseen the organization’s procurement, real estate, and tax departments and played a leadership role in all financial systems processes and enhancements and all financially related acquisitions and divestitures activities. Prior to joining the Company in 2017, Ms. Phipps served in various accounting and SEC reporting leadership roles over time at Cardinal Health from 2009 to 2017. Prior to that, she worked in public accounting at Ernst & Young from 2003 to 2009. Ms. Phipps holds an active CPA license and earned her Bachelor of Science in Business Administration in accounting and Master of Accounting from The Ohio State University.
Jennifer Yowler has served as our President of PharMerica since March 2022. Previously, Ms. Yowler served as PharMerica’s Chief Financial Officer since June 2019. Ms. Yowler brings more than 20 years of experience in finance and operations at multiple Fortune 500 companies in the long-term care and healthcare industry. Prior to joining PharMerica, Ms. Yowler served as Chief Financial Officer at Partners Pharmacy from October 2015 to June 2019 and held several senior level positions at Omnicare from October 2004 to September 2015. Ms. Yowler began her career at PricewaterhouseCoopers in the audit and assurance group, working on various clients in the healthcare and insurance spectrum. Ms. Yowler obtained a Bachelor of Science degree in Business Administration and Accounting from Ohio University.
Bob Barnes has served as our President of Community Living since July 2018. Prior to joining the Company, Mr. Barnes was the Senior Vice President of Operations at Trilogy Health Services, LLC from July 2016 to July 2018 where he directed national healthcare operations in the Midwest. Prior to Trilogy Health Services, Mr. Barnes served as the Chief Operating Officer at Affinity Health Services, Inc. and held operational leadership roles at Guardian Elder Care Holdings, Inc. Mr. Barnes holds a Nursing degree from Mount Aloysius College and earned a Nursing Home Administration certification from Slippery Rock University.
Mike McMaude has served as our President of Hospice Services since April 2021 and the Chief Executive Officer of our subsidiary Abode Healthcare since he founded the company in 2012. Prior to Abode, Mr. McMaude was the Chief Executive Officer of Voyager HospiceCare from 2007 to 2010. Prior to Voyager HospiceCare, Mr. McMaude founded and was the Chief Executive Officer of Accumed, a skilled-nursing homecare business. Earlier in his career, Mr. McMaude was the President of the Home Health division of Amedisys and held various positions with Columbia HCA, where his responsibilities included overseeing home health and hospice operations in the Central and Western United States. Mr. McMaude has a B.A. degree in business administration from Hardin-Simmons University, where he is currently a member of the Board of Development. Mr. McMaude is also a member of the Advisory Board for Grant Avenue Capital, a member of the board of Overland International, LLC, and a member of the board of Community Health Accreditation Partner.
20
Lisa Nalley has served as our Chief of Staff since February 2017 and Senior Vice President of Human Resources since August 2020, and also serves as the leader of the Executive Project Management Office. Prior to joining the Company, Ms. Nalley was a business consultant at Barrel Consulting, LLC, and before that, Ms. Nalley served as Sr. Director of Strategic Initiatives for Kindred Rehabilitation Services and Kindred at Home, as well as several other business improvement roles from 2003 to 2016 at Kindred Healthcare, Inc. Ms. Nalley has an A.A.S. in Applied Science in paralegal science from Marshall University.
21
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
This compensation discussion and analysis provides an overview of our executive compensation philosophy and the material elements of compensation awarded to, earned by, or paid to our named executive officers with respect to the year ended December 31, 2024. Our executive compensation scheme is designed to attract and retain individuals qualified to manage and lead our Company and to also motivate them to contribute to the achievement of our financial and operational goals and ultimately create and grow our equity value.
Our named executive officers for 2024 were:
Name |
|
Title |
Jon Rousseau |
|
President and Chief Executive Officer |
Jim Mattingly(1) |
|
Executive Vice President and Chief Financial Officer |
Steven Reed(2) |
|
Former Chief Legal Officer and Corporate Secretary |
Bob Barnes |
|
President, Community Living |
Michael McMaude |
|
President, Hospice Services |
Lisa Nalley |
|
Chief of Staff and Senior Vice President, Human Resources |
Compensation Philosophy, Objectives & Process – How We Make Compensation Decisions
Our Compensation Philosophy and Objectives
Our primary executive compensation philosophy and objectives are to:
We seek to maintain a quality and performance-oriented culture and a compensation approach that rewards our named executive officers when we achieve our goals and objectives, while putting at risk an appropriate portion of their compensation if our goals and objectives are not achieved. Consistent with this philosophy, as displayed in the chart below, we have sought to create an executive compensation package that balances short-term versus long-term components, cash versus equity elements and fixed versus contingent payments in ways that we believe are most appropriate to motivate them.
22
Fiscal 2024 Highlights
We achieved strong performance in 2024, and the financial performance highlights identified in the bullets below are closely tied to the performance metrics of our compensation program:
“Adjusted EBITDA” is a non-GAAP financial measure that is defined as our net income before interest, taxes, depreciation, and amortization adjusted to eliminate the impact of certain items, including certain non-cash and other items, that we do not consider representative of our ongoing operating performance. For additional detail on the reconciliation from Net Income to Adjusted EBITDA see “Non-GAAP Financial Measures” on page 75 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Other financial highlights include:
Role of Our Board of Directors and Executive Officers
Our Compensation Committee and our Board of Directors have determined and approved long-term executive compensation for our executive officers after taking into consideration the recommendations of our Chief Executive Officer, except with respect to his own long-term executive compensation. Our Compensation Committee and our Board of Directors annually review our Chief Executive Officer’s performance and approve any changes to his compensation package in light of such review. Our Chief Executive Officer does not participate in deliberations regarding his own compensation. Our Chief Executive Officer periodically reviews each other named executive officer’s performance with our Board of Directors and recommends an appropriate base salary, annual incentive payout, relevant discretionary bonuses, if applicable, and grants of long-term equity incentive awards.
Role of the Compensation Consultant
In April 2021, we engaged Meridian Compensation Partners, a compensation consulting firm (the “Consultant”), to provide executive compensation consulting services to help align executive pay with market practices following our initial public offering.
In connection with our initial public offering, the Consultant performed a variety of work, including but not limited to assisting in the development of a market-based executive compensation program and conducting a review of the competitiveness of our executive compensation program. To assist our Board of Directors in its review and evaluation of each of these areas in connection with our initial public offering, the Consultant established a peer group in 2023 composed of 19 companies described below. The peer group was selected based on weighted parameters and financial information and is intended to ensure that the Company remains within a reasonable range of the peer median in terms of revenue, headcount, and market value. LHC Group, Inc. was removed from the peer group and replaced with Guardian Pharmacy Services in 2024.
Acadia Healthcare Company, Inc. |
Community Health Systems, Inc. |
Pediatrix Medical Group, Inc. |
|
|
|
Amedisys, Inc. |
DaVita Inc. |
Quest Diagnostics Incorporated |
|
|
|
AMN Healthcare Services, Inc. |
Encompass Health Corporation |
Select Medical Holdings Corporation |
|
|
|
Aveanna Healthcare |
Guardian Pharmacy Services |
Tenet Healthcare Corporation |
|
|
|
Brookdale Senior Living Inc. |
Laboratory Corporation of |
The Ensign Group, Inc. |
|
|
|
Chemed Corporation |
Molina Healthcare, Inc. |
Universal Health Services, Inc. |
|
|
|
Option Care Health, Inc. |
|
|
23
Elements of Compensation – What We Pay and Why
Base Salary
Base salary compensates executives for performing the requirements of their positions and provides executives with a predictable and stable level of cash income with respect to a portion of their total compensation. Base salaries are intended to reward performance and to attract and retain key executives. Base salaries may be adjusted annually and, in certain circumstances, adjusted mid-year to address competitive pressures or changes in job responsibilities.
Base salary rates for 2024 were as follows:
Name |
|
2024 Base |
|
|
Jon Rousseau |
|
$ |
1,000,000 |
|
Jim Mattingly |
|
$ |
424,598 |
|
Steven Reed |
|
$ |
362,016 |
|
Bob Barnes |
|
$ |
450,000 |
|
Mike McMaude |
|
$ |
472,500 |
|
Lisa Nalley |
|
$ |
324,500 |
|
Effective October 11, 2024, Mr. Reed retired and transitioned to a part-time status continuing in a legal support role where he is compensated $20,000 per month. Effective January 1, 2024, Mr. Barnes received a 7.2% increase to his base pay.
Annual Cash Incentive Program
During 2024, we provided our named executive officers with the opportunity to share in our success through annual cash incentive awards under the BrightSpring Health Services Short Term Incentive Compensation Plan (the “BHS STIC”). The BHS STIC is designed to provide each participant with a “balanced scorecard” for the participant’s annual cash incentive award. The “balanced scorecard” establishes specific corporate performance goals balanced by goals from the officer’s individual area of responsibility and the officer’s expected level of contribution to the Company’s achievement of its corporate goals. Payouts under the BHS STIC are based on our achievement of predefined financial and operational performance targets included within the balanced scorecard. For 2024, the BHS STIC focused on two financial measures: (i) our ability to grow total company-wide profitability (as measured based on EBITDA, calculated as described in the Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024) and (ii) our ability to increase year over year company-wide revenue. Further, for 2024, the non-financial measures focused on a quality index comprised of quality measures from our business lines based on industry quality benchmarks and internally developed quality measures. The quality index included measures such a CAHPS Global Measures, external surveys, customer satisfaction scores, internal audits and pharmacy fulfillment accuracy and timeliness. The balanced scorecard approach is designed to encourage a consistent, long-term management approach to enhancing stockholder value.
For 2024, performance objectives were set at levels that we believed would reflect strong performance based on historical performance and the then-prevailing relevant market conditions in our businesses and macroeconomic conditions. We believe the combination of these performance measures and the proportionate weighting assigned to each reflected our overall goals for 2024, which balanced the achievement of our financial performance with the other scorecard categories. The BHS STIC requires that a minimum EBITDA trigger be met as the “gate” into the plan. If this minimum EBITDA trigger is not achieved for the calendar year performance period, then the plan will not be funded and payouts will not be made to the participant. In addition, awards under the BHS STIC, if earned, are generally contingent upon the participant remaining in continuous employment through the payment date.
The following table illustrates the weighting of each of the scorecard objectives under the BHS STIC for each continuing named executive officer:
Name |
|
Financial |
|
Quality |
Jon Rousseau |
|
75% |
|
25% |
Jim Mattingly |
|
75% |
|
25% |
Steven Reed(2) |
|
75% |
|
25% |
Bob Barnes |
|
75% |
|
25% |
Michael McMaude |
|
75% |
|
25% |
Lisa Nalley |
|
75% |
|
25% |
24
Payouts are based on threshold, target, and maximum levels of achievement of the performance objectives applicable to participants. Threshold refers to the minimum acceptable level of performance required for bonus payout consideration, target is the desired level of performance, and maximum is aspirational performance. We focus on matching rewards with results and encourage executive officers to make significant contributions toward our financial results by providing a basic reward for reaching threshold expectations, plus an upside for reaching our aspirational goals. We believe that establishing a maximum payout amount under the BHS STIC deters excessive risk-taking, while having an equitable payout amount that can be earned at a defined performance threshold encourages goal attainment. No payout is made for performance below the minimum threshold. Notwithstanding the forgoing, we have reserved the ability to adjust the actual financial performance results to exclude the effects of extraordinary, unforeseen, unusual, or infrequently occurring events.
The following tables also illustrate the EBITDA and revenue trigger percentage for plan funding and payout.
BHS STIC
Messrs. Rousseau, Mattingly, and Barnes and Ms. Nalley
|
|
|
EBITDA and Revenue Payout |
|
|
Quality Index Payout |
|
|||||||||||||||||||
|
|
|
as a Percentage of Target Award |
|
|
as a Percentage of Target Award |
|
|||||||||||||||||||
Plan Funding Trigger |
|
|
Threshold (%) |
|
|
Target (%) |
|
|
Maximum (%) |
|
|
|
|
|
|
|
|
|
|
|||||||
as Percentage of |
|
|
91 |
|
|
100 |
|
|
120 |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|||||||
Executive’s EBITDA |
|
|
Achievement |
|
|
Achievement |
|
|
Achievement |
|
|
Achievement |
|
|
Achievement |
|
|
Achievement |
|
|||||||
Target |
|
|
Level |
|
|
Level |
|
|
Level |
|
|
Level |
|
|
Level |
|
|
Level |
|
|||||||
|
90 |
% |
|
|
5 |
% |
|
|
100 |
% |
|
|
200 |
% |
|
|
50 |
% |
|
|
100 |
% |
|
|
200 |
% |
Under the BHS STIC, with respect to EBITDA and Revenue, if achievement falls between the threshold and target payout percentages, or between the target and maximum payout percentages, the achievement factor will be interpolated on a straight-line mathematical basis. However, for all other scorecard objectives there is no interpolation between achievement levels and participants must fully achieve the next level of performance on the scale to achieve a higher payout. If achievement with respect to any performance objective does not reach threshold payout percentage, then that objective will be deemed to have 0% attainment.
As described above, 25% of the total payout for each of our named executive officers under the BHS STIC is based on certain non-financial quality index measures. We do not disclose the targets levels of these measures because these amounts represent confidential information, the disclosure of which would result in competitive harm (for example, by providing competitors with insight into our business unit forecasting, strategy and performance). These targets are set at the same time and endure the same rigorous process in place for setting the Company financial metrics. We measure achievement of threshold (50% payout), target (100% payout) and maximum (200% payout) the same way that we measure the Company financial objectives under the BHS STIC. There is no payout for achievement below threshold and payments are capped at 200% of target.
For each of the performance objectives, the achievement factor is determined by calculating the payout percentage against the target award opportunity based on the pre-established scale for each plan illustrated in the tables below. The weighted achievement factor for each of the performance objectives is determined by multiplying the weight attributed to each performance objective by the applicable achievement factor for each measure. The following tables outline the calculation of the funding attainment based on the pre-established scale associated with our actual results against the targets and the resulting weighted achievement factors.
Messrs. Rousseau and Mattingly, and Ms. Nalley
|
|
|
|
|
Threshold |
|
|
Target |
|
|
Actual |
|
|
Percent |
|
|
Percent |
|
||||||
Performance Objective |
|
Weighting |
|
|
Achievement |
|
|
Achievement |
|
|
Achievement |
|
|
(% of Target) |
|
|
Payout |
|
||||||
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA |
|
|
60 |
% |
|
$ |
499.04 |
|
|
$ |
548.40 |
|
|
$ |
588.07 |
|
|
|
107.23 |
% |
|
|
135.00 |
% |
Net Revenue |
|
|
15 |
% |
|
$ |
9,385.90 |
|
|
$ |
10,314.17 |
|
|
$ |
11,266.47 |
|
|
|
109.23 |
% |
|
|
145.00 |
% |
Non-Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Quality Index |
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
102.78 |
% |
|
|
102.78 |
% |
|||
25
BHS STIC
Mr. Barnes
|
|
|
|
|
Threshold |
|
Target |
|
Actual |
|
Percent |
|
|
Percent |
|
|||
Performance Objective |
|
Weighting |
|
|
Achievement |
|
Achievement |
|
Achievement |
|
(% of Target) |
|
|
Payout |
|
|||
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated Community Living |
|
|
60 |
% |
|
|
|
|
|
|
|
|
110.61 |
% |
|
|
150.00 |
% |
Consolidated Community Living |
|
|
15 |
% |
|
|
|
|
|
|
|
|
100.64 |
% |
|
|
100.00 |
% |
Non-Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Quality Index |
|
|
25 |
% |
|
|
|
|
|
|
|
|
121.88 |
% |
|
|
121.88 |
% |
BHS STIC
Mr. McMaude
|
|
|
|
|
Threshold |
|
Target |
|
Actual |
|
Percent |
|
|
Percent |
|
|||
Performance Objective |
|
Weighting |
|
|
Achievement |
|
Achievement |
|
Achievement |
|
(% of Target) |
|
|
Payout |
|
|||
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Consolidated Hospice EBITDA |
|
|
60 |
% |
|
|
|
|
|
|
|
|
97.62 |
% |
|
|
80.00 |
% |
Consolidated Hospice Revenue |
|
|
15 |
% |
|
|
|
|
|
|
|
|
95.87 |
% |
|
|
50.00 |
% |
Non-Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Quality Index |
|
|
25 |
% |
|
|
|
|
|
|
|
|
66.67 |
% |
|
|
66.67 |
% |
For 2024, our continuing named executive officers’ target annual cash incentive award as a percentage of earned base salary was 125% for Mr. Rousseau, 100% for Messrs. Mattingly and Reed, 60% each for Mr. Barnes and Ms. Nalley, and 50% for Mr. McMaude. Actual amounts paid under the BHS STIC were calculated separately for each scorecard performance objective by multiplying each named executive officer’s base salary earned in 2024 by (i) the executive’s BHS STIC target award opportunity (which is reflected as a percentage of earned base salary) and (ii) the executive’s weighted performance objective achievement factor for that objective, and then adding the results together.
The following table illustrates the calculation of the payout earned under the BHS STIC by each of our continuing named executive officers.
|
|
|
|
|
Target |
|
|
Target |
|
|
Payout Earned |
|
|
Payout as a |
|
|||||
|
|
|
|
|
Award as a |
|
|
Award |
|
|
Balanced |
|
|
percentage of |
|
|||||
Name |
|
Base Salary |
|
|
percentage of |
|
|
Opportunity |
|
|
Scorecard |
|
|
Target |
|
|||||
Jon Rousseau |
|
|
1,000,000 |
|
|
|
125 |
% |
|
|
1,250,000 |
|
|
|
1,605,556 |
|
|
|
128 |
% |
Jim Mattingly |
|
|
424,598 |
|
|
|
100 |
% |
|
|
424,598 |
|
|
|
545,372 |
|
|
|
128 |
% |
Bob Barnes |
|
|
450,000 |
|
|
|
60 |
% |
|
|
270,000 |
|
|
|
365,766 |
|
|
|
135 |
% |
Mike McMaude |
|
|
472,500 |
|
|
|
50 |
% |
|
|
236,250 |
|
|
|
170,494 |
|
|
|
72 |
% |
Lisa Nalley |
|
|
324,500 |
|
|
|
60 |
% |
|
|
194,700 |
|
|
|
250,081 |
|
|
|
128 |
% |
Notwithstanding the establishment of the performance components and the formula for determining the BHS STIC award payment amounts as described above, we have the ability to exercise positive or negative discretion and award a greater or lesser amount than determined by the above formula if, in the exercise of our business judgment, we determine that a greater or lesser amount is warranted under the circumstances.
Additional details regarding the dollar value of threshold, target, and maximum bonus payout opportunities for 2024 are provided under “Executive Compensation Tables—Grants of Plan-Based Awards.”
26
Discretionary Bonuses
The Compensation Committee and Board awarded discretionary bonuses to Messrs. Mattingly, Barnes, and McMaude, and Ms. Nalley to reward their exceptional individual contributions to the consummation of our initial public offering. Ms. Nalley also received an additional discretionary payout under the BHS STIC. The bonuses were paid out in the following amounts:
Name |
|
Discretionary |
|
|
Jim Mattingly |
|
$ |
177,165 |
|
Bob Barnes |
|
$ |
225,000 |
|
Michael McMaude |
|
$ |
100,000 |
|
Lisa Nalley |
|
$ |
210,000 |
|
Long-Term Incentive Program
In addition to base salary and cash bonus compensation, each of our continuing named executive officers is eligible for long-term equity (“LTI”) awards. The LTI program is designed to reward for future Company performance, align with the long-term interests of our stockholders and to retain executives over multi-year vesting periods. LTI compensation provides an opportunity for executive officers to increase their ownership interest in the Company through grants of equity-based awards.
The Board of Directors adopted the 2017 Stock Incentive Plan, effective January 24, 2018 (the “2017 Stock Plan”). To date, the only form of equity award granted to our executive officers have been stock options under the 2017 Stock Plan. The 2017 Stock Plan was terminated upon our initial public offering. As a result, no further awards will be made under the 2017 Stock Plan; however, awards granted under the 2017 Stock Plan will continue to be governed by their existing terms.
Since the adoption of the 2017 Stock Plan, equity awards have been granted in connection with an executive’s initial employment, and upon a significant performance contribution or increase in responsibility or job scope. Our Board of Directors determines the amount of long-term executive compensation for our executive officers after taking into consideration the recommendations of our Chief Executive Officer (except with respect to his own long-term incentive compensation), the outstanding holdings of each executive officer, organizational significance of their position, and individual performance (both historical and expected future performance).
Option Awards Granted in 2024
In connection with our initial public offering, we adopted our 2024 Equity Incentive Plan (the “2024 Incentive Plan”), effective January 24, 2024. In January 2024, our Board of Directors granted stock options under the 2024 Incentive Plan to each of our named executive officers in connection with our initial public offering. The stock options are subject to time-based vesting terms. The grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“Topic 718”), for each of these awards is reported in the Summary Compensation Table. Additional details regarding the equity award described above, including grant date and exercise price, are provided under “Executive Compensation Tables—Outstanding Equity Awards at December 31, 2024.”
The stock options have a ten-year term and vest in three annual installments subject to continued employment or service through each applicable vesting date.
For Mr. Rousseau only, the stock options are subject to quarterly vesting, and if he is terminated by us without cause, resigns for good reason, or due to Mr. Rousseau’s death or disability, all then unvested stock options granted in 2024 shall become fully vested upon such termination.
For more information on vesting and other treatment of these stock options upon specified termination events or a change in control, see “Termination and Change in Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
Restricted Stock Unit Awards Granted in 2024
In January 2024, we granted time-based vesting restricted stock units (“RSUs”) to our named executive officers. The RSUs granted to Mr. Rousseau will vest quarterly over three years from the date of grant subject to his continued employment or service through the applicable vesting date. The RSUs granted to Messrs. Mattingly, Reed, Barnes and McMaude and Ms. Nalley will vest in three equal annual installments subject to their continued employment or service through the applicable vesting date, with the first installment vesting on January 25, 2025. The grant date fair value for these RSUs is reported in the “Summary Compensation Table.”
27
Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
Executive and Broad-Based Employee Benefits
Our continuing named executive officers are eligible to receive the same medical, dental, vision, and voluntary benefits offered to all other full-time employees. Additionally, our continuing named executive officers are eligible to receive enhanced life and disability benefits, including group term life and accidental death & dismemberment insurance (2.0x their annual base salary up to $1.5 million), full income replacement as a result of a short term disability for up to 26 weeks, and a long term disability benefit of 70% of monthly earnings up to a maximum of $20,000 per month. The enhanced short-term disability benefit program is self-funded (i.e., no premiums are paid to a third-party insurer) and thus there is no incremental cost to the Company to provide this benefit, as no specific allocation of cost is made to any named executive officer prior to the occurrence of a disability.
During 2024, we sponsored and maintained a plan qualified under Section 401(k) of the Internal Revenue Code for all eligible employees, including our named executive officers (the “401(k) Plan”). Under the 401(k) Plan, eligible employees may elect to defer a portion of their compensation, up to the limit prescribed by the Internal Revenue Service. None of our named executive officers were eligible to receive any discretionary employer matching contributions under our 401(k) Plan with respect to 2024.
In addition, in 2024, under our BrightSpring Health Services Nonqualified Deferred Compensation Plan, management and other highly compensated employees were permitted to defer up to 50% of their annual salary.
Severance Arrangements
Our employment arrangements with each of our named executive officers provide for payments and other benefits in connection with certain qualifying terminations of employment. Our Board of Directors believes that these severance benefits: (1) help secure the continued employment and dedication of our named executive officers; (2) enhance our value to a potential acquirer because our named executive officers have non-competition, non-solicitation, and confidentiality provisions that apply after any termination of employment, including after a change in control; and (3) are important as a recruitment and retention device, as many of the companies with which we compete for executive talent have similar agreements in place for their senior management.
Additional information regarding the severance arrangements with each of our named executive officers, including a quantification of benefits that would have been received by each named executive officer who are currently employed by the Company had his or her employment terminated on December 31, 2024, is provided under “Termination and Change in Control Arrangements.”
Clawback Policy
We have adopted an incentive compensation clawback policy that complies with the SEC and Nasdaq requirements.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” with management. Based on the review and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “Compensation Discussion and Analysis” be incorporated by reference in the Company’s Annual Report on Form 10-K for fiscal year 2024 and included in this Proxy Statement.
|
|
Respectfully submitted by the members of the Compensation |
|
|
Committee of the Board. |
|
|
|
|
|
Max Lin, Chair |
|
|
Olivia Kirtley |
|
|
Timothy Wicks |
28
Executive Compensation Tables
Summary Compensation Table
The table below summarizes the total compensation paid to or earned by each of our named executive officers for the years indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
Incentive Plan |
|
|
All Other |
|
|
|
|
|||||||
|
|
|
|
Salary |
|
|
Bonus |
|
|
Stock Awards |
|
|
Awards |
|
|
Compensation |
|
|
Compensation |
|
|
|
|
|||||||
Name and Principal Position |
|
Year |
|
($)(1) |
|
|
($)(2) |
|
|
($)(3) |
|
|
($)(3) |
|
|
($) |
|
|
($)(4) |
|
|
Total ($) |
|
|||||||
Jon Rousseau |
|
2024 |
|
|
1,000,053 |
|
|
|
— |
|
|
|
12,582,492 |
|
|
|
2,250,205 |
|
|
|
1,605,556 |
|
|
|
235,587 |
|
|
|
17,673,893 |
|
|
|
2023 |
|
|
926,027 |
|
|
|
— |
|
|
|
— |
|
|
|
5,949,200 |
|
|
|
1,419,531 |
|
|
|
10,054,073 |
|
|
|
18,348,831 |
|
|
|
2022 |
|
|
800,000 |
|
|
|
132,680 |
|
|
|
— |
|
|
|
— |
|
|
|
627,320 |
|
|
|
2,551 |
|
|
|
1,562,551 |
|
Jim Mattingly |
|
2024 |
|
|
424,632 |
|
|
|
177,165 |
|
|
|
1,003,132 |
|
|
|
196,875 |
|
|
|
545,372 |
|
|
|
2,176 |
|
|
|
2,349,353 |
|
|
|
2023 |
|
|
424,598 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
482,184 |
|
|
|
2,176 |
|
|
|
908,957 |
|
|
|
2022 |
|
|
418,686 |
|
|
|
69,439 |
|
|
|
— |
|
|
|
— |
|
|
|
328,313 |
|
|
|
2,170 |
|
|
|
818,608 |
|
Steven Reed |
|
2024 |
|
|
336,623 |
|
|
|
— |
|
|
|
710,554 |
|
|
|
139,454 |
|
|
|
— |
|
|
|
454,008 |
|
|
|
1,640,639 |
|
|
|
2023 |
|
|
362,016 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
397,545 |
|
|
|
2,104 |
|
|
|
761,659 |
|
|
|
2022 |
|
|
357,560 |
|
|
|
80,755 |
|
|
|
— |
|
|
|
— |
|
|
|
258,927 |
|
|
|
2,099 |
|
|
|
699,341 |
|
Bob Barnes |
|
2024 |
|
|
450,035 |
|
|
|
225,000 |
|
|
|
606,060 |
|
|
|
118,948 |
|
|
|
365,766 |
|
|
|
2,206 |
|
|
|
1,768,014 |
|
|
|
2023 |
|
|
419,980 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
322,545 |
|
|
|
2,171 |
|
|
|
744,696 |
|
|
|
2022 |
|
|
415,832 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
276,944 |
|
|
|
2,166 |
|
|
|
694,942 |
|
Mike McMaude |
|
2024 |
|
|
472,500 |
|
|
|
100,000 |
|
|
|
668,746 |
|
|
|
131,250 |
|
|
|
170,494 |
|
|
|
2,280 |
|
|
|
1,545,270 |
|
Lisa Nalley |
|
2024 |
|
|
324,527 |
|
|
|
210,000 |
|
|
|
1,253,902 |
|
|
|
246,092 |
|
|
|
250,081 |
|
|
|
1,971 |
|
|
|
2,286,573 |
|
|
|
Enhanced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
LTD |
|
|
GTL |
|
|
AD&D |
|
|
|
|
|
|
|
|||||
|
|
Insurance |
|
|
Insurance |
|
|
Insurance |
|
|
Other |
|
|
|
|
|||||
|
|
Premium |
|
|
Premium |
|
|
Premium |
|
|
Perks |
|
|
Total |
|
|||||
Name |
|
($) |
|
|
($) |
|
|
($) |
|
|
($)(1)(2) |
|
|
($) |
|
|||||
Jon Rousseau |
|
|
1,687 |
|
|
|
684 |
|
|
|
180 |
|
|
|
233,036 |
|
|
|
235,587 |
|
Jim Mattingly |
|
|
1,687 |
|
|
|
388 |
|
|
|
102 |
|
|
|
— |
|
|
|
2,176 |
|
Steven Reed |
|
|
1,265 |
|
|
|
248 |
|
|
|
65 |
|
|
|
452,430 |
|
|
|
454,008 |
|
Bob Barnes |
|
|
1,687 |
|
|
|
411 |
|
|
|
108 |
|
|
|
— |
|
|
|
2,206 |
|
Mike McMaude |
|
|
1,687 |
|
|
|
431 |
|
|
|
114 |
|
|
|
— |
|
|
|
2,280 |
|
Lisa Nalley |
|
|
1,597 |
|
|
|
296 |
|
|
|
78 |
|
|
|
— |
|
|
|
1,971 |
|
29
Grants of Plan-Based Awards
The following table provides information on bonus opportunity ranges under the BHS STIC for each of our named executive officers and equity awards granted in connection with our IPO.
|
|
|
|
|
|
Estimated Possible Payouts Under |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Grant Name |
|
Award Type |
|
Grant Date |
|
($)(1) |
|
|
($) |
|
|
($) |
|
|
Grant Date |
|
All Other |
|
|
All Other |
|
|
Exercise or |
|
|
Grant Date |
|
|||||||
Jon Rousseau |
|
BHS STIC |
|
5/23/2024 |
|
|
37,500 |
|
|
|
1,250,000 |
|
|
|
2,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
320,086 |
|
|
|
13.00 |
|
|
|
2,250,205 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
967,884 |
|
|
|
— |
|
|
|
— |
|
|
|
12,582,492 |
|
|||
Jim Mattingly |
|
BHS STIC |
|
5/23/2024 |
|
|
12,738 |
|
|
|
424,598 |
|
|
|
849,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
28,005 |
|
|
|
13.00 |
|
|
|
196,875 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
77,164 |
|
|
|
— |
|
|
|
— |
|
|
|
1,003,132 |
|
|||
Steven Reed |
|
BHS STIC |
|
5/23/2024 |
|
|
8,131 |
|
|
|
271,018 |
|
|
|
524,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
19,837 |
|
|
|
13.00 |
|
|
|
139,454 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
54,658 |
|
|
|
— |
|
|
|
— |
|
|
|
710,554 |
|
|||
Bob Barnes |
|
BHS STIC |
|
5/23/2024 |
|
|
8,100 |
|
|
|
270,000 |
|
|
|
540,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
16,920 |
|
|
|
13.00 |
|
|
|
118,948 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
46,620 |
|
|
|
— |
|
|
|
|
|
|
606,060 |
|
||||
Mike McMaude |
|
BHS STIC |
|
5/23/2024 |
|
|
7,088 |
|
|
|
236,250 |
|
|
|
472,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
18,670 |
|
|
|
13.00 |
|
|
|
131,250 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
51,442 |
|
|
|
— |
|
|
|
— |
|
|
|
668,746 |
|
|||
Lisa Nalley |
|
BHS STIC |
|
5/23/2024 |
|
|
5,841 |
|
|
|
194,700 |
|
|
|
389,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
— |
|
|
|
35,006 |
|
|
|
13.00 |
|
|
|
246,092 |
|
|||
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
1/25/2024 |
|
|
96,454 |
|
|
|
— |
|
|
|
— |
|
|
|
1,253,902 |
|
|||
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2024
Employment Arrangements
We have entered into written arrangements with each of our continuing named executive officers governing the terms of their respective employment with us.
Rousseau Employment Agreement
We entered into an employment agreement with Mr. Rousseau, effective as of March 5, 2019 (the “Rousseau Employment Agreement”). The Rousseau Employment Agreement provides that Mr. Rousseau will serve as our President and Chief Executive Officer. The Rousseau Employment Agreement has an initial term that ended on December 31, 2023 and automatically renews on an annual basis unless terminated in accordance with the Rousseau employment agreement. The Rousseau Employment Agreement also provides for (i) an initial salary of $800,000, subject to review for increase at least annually and (ii) eligibility to receive an annual bonus, with a target bonus equal to 100% of base salary. Mr. Rousseau is also entitled to participate in our employee benefit arrangements and to receive reimbursement for certain membership fees.
The Rousseau Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, non-competition, employee no-hire, employee non-solicitation, client and customer non-solicitation, and mutual non-disparagement covenants. The confidentiality covenant and Mr. Rousseau’s covenant not to disparage us have an indefinite term (whereas our directors’ and executive officers’ obligation not to disparage Mr. Rousseau applies during employment and for three years following Mr. Rousseau’s termination of employment). The non-competition and non-solicitation covenants are effective both during Mr. Rousseau’s employment with us and until the 24-month anniversary of termination of employment for any reason.
30
The Rousseau Employment Agreement further provides for severance benefits, as described below under “Termination and Change in Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
It is anticipated that we will enter into an amendment to the Rousseau Employment Agreement that would, among other things, reflect an increase in his base salary to $1,000,000 (equal to his base salary as of May 16, 2023), subject to review for increase at least annually, an increase in his target bonus to 125% of his base salary (equal to his established target for 2023), an extension of the exercise period for his existing options, and the new equity awards being granted to Mr. Rousseau in connection with our initial public offering.
Mattingly Employment Agreement
We entered into an employment agreement with Mr. Mattingly, dated December 14, 2017 (the “Mattingly Employment Agreement”). The Mattingly Employment Agreement provides that Mr. Mattingly will serve as the Chief Financial Officer for Res-Care, Inc. The Mattingly Employment Agreement has an initial term that ended on December 31, 2018 that automatically renews on an annual basis unless terminated in accordance with the Mattingly Employment Agreement. The Mattingly Employment Agreement also provides for an initial annual base salary of $325,000, subject to adjustment from time to time. Mr. Mattingly is also entitled to participate in our employee benefit arrangements.
The Mattingly Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, non-competition, employee non-solicitation, employee no-hire, client and customer non-solicitation, and mutual non-disparagement covenants. The confidentiality and mutual non-disparagement covenants have an indefinite term, and the non-competition, non-solicitation, and no-hire covenants are effective both during the executive’s employment and until the first anniversary of termination of employment for any reason.
Mr. Mattingly departed as Chief Financial Officer of the Company on March 4, 2025 (the “Separation Date”). In connection with Mr. Mattingly's departure from the Company, the Company and Mr. Mattingly entered into a Severance Agreement, dated April 4, 2025 (the “Severance Agreement”). The Severance Agreement provides that in exchange for his continued compliance with the restrictive covenants and a release of claims, the Company will provide Mr. Mattingly: (i) salary continuation payments through April 2026 in an amount equal to the sum of his annual base salary at the rate in effect as of the Separation Date, payable in accordance with the Company’s regular payroll schedule; (ii) payment of his 2024 BHS STIC payout; (iii) payment of a pro-rata portion of his payout under the 2025 BHS STIC based on actual performance; (iv) acceleration of the vesting of the portion of his outstanding time-based vesting restricted stock units and his options to purchase the Company’s common stock that otherwise would have vested through January 2026 had he continued in service through such date (the “Accelerated Equity”); (v) eighteen (18) months of continued payment of the employer portion of Mr. Mattingly’s COBRA premiums; (vi) waiver of the continuous service requirement for eligibility to earn his performance-based vesting stock option; and (vii) extension of the post-termination exercise period for his vested options (after giving effect to the Accelerated Equity and any vesting of his performance-based vesting stock option) from ending on the three month anniversary of the Separation Date to the last day of the applicable option period of the stock option).
Reed Employment Agreement
We entered into an employment agreement with Mr. Reed, effective as of May 1, 2014 (the “Reed Employment Agreement”. The Reed Employment Agreement provides that Mr. Reed will serve as Chief Legal Officer and Corporate Secretary. The Reed Employment Agreement has an initial term of five years, unless earlier terminated in accordance with the Reed Employment Agreement. The Reed Employment Agreement also provides for (i) an annual base salary of $295,000, subject to annual review by the Chief Executive Officer or the Compensation Committee and (ii) eligibility to receive an annual bonus, with a target bonus equal to 100% of base salary. Mr. Reed is also entitled to participate in our employee benefit arrangements.
The Reed Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, non-competition, employee non-solicitation, employee no-hire, client and customer non-solicitation, and non-disparagement covenants. The confidentiality and non-disparagement covenants have an indefinite term, and the non-competition, non-solicitation, and no-hire covenants are effective both during the executive’s employment and until the first anniversary of termination of employment for any reason.
Mr. Reed ceased to be an executive officer with the Company as of the date of his retirement on October 11, 2024. The Company and Mr. Reed amended and restated the Reed Employment Agreement (the “Amended and Restated Reed Employment Agreement”) and entered into a special retention agreement (the “Special Retention Agreement”). Pursuant to the Amended and Restated Reed Employment Agreement, Mr. Reed served as a senior legal counsel to the Company through March 31, 2025, and for that period Mr. Reed was no longer eligible for any compensation benefits under the terms of such agreement other than a monthly base salary of $20,000. Subject to timely execution of the Special Retention Agreement, Mr. Reed received a cash payment of $181,018 and a lump sum payment of $271,412 (reflecting Mr. Reed’s pro-rata bonus amount assuming target achievement). In addition, so long as Mr. Reed remained employed through March 31, 2025 (or an earlier mutually agreed upon date), Mr. Reed will be entitled to an aggregate of $724,032 payable in equal installments over a twenty-four (24) month period following his termination date, twelve (12) months of continued payment of the employer portion of Mr. Reed’s COBRA premiums, extension of the exercise period of his outstanding vested stock
31
options until December 31, 2027 and extension of the vesting period for his outstanding unvested performance-based stock option until March 31, 2026.
Barnes Employment Agreement
We entered into an employment agreement with Mr. Barnes, effective as of July 9, 2018 (the “Barnes Employment Agreement”), pursuant to which Mr. Barnes serves as our President, Community Health Services. The Barnes Employment Agreement provides for (i) an initial annual base salary of $400,000, subject to adjustment from time to time and (ii) eligibility to receive an annual bonus, with a target bonus equal to 60% of base salary. Mr. Barnes is also entitled to participate in our employee benefit arrangements.
The Barnes Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, noncompetition, employee non-solicitation, employee no-hire, client and customer non-solicitation, and non-disparagement covenants. The confidentiality and non-disparagement covenants have an indefinite term, and the non-competition, non-solicitation, and no-hire covenants are effective both during the executive’s employment and until the 12-month anniversary of termination of employment for any reason.
The Barnes employment agreement further provides for severance benefits, as described below under “Termination and Change in Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
McMaude Employment Agreement
We entered into an employment agreement with Mr. McMaude, effective as of November 9, 2012 (the “McMaude Employment Agreement”), pursuant to which Mr. McMaude serves as our President, Hospice Services. The McMaude Employment Agreement provides for (i) an initial salary of $350,000, subject to adjustment from time to time and (ii) eligibility to receive an annual bonus, with a target bonus equal to 50% of base salary. Mr. McMaude is also entitled to participate in our employee benefit arrangements.
The McMaude Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, non-competition, employee no-hire, employee non-solicitation, client, patient, and customer non-solicitation, and non-disparagement covenants. The confidentiality and non-disparagement covenants have an indefinite term, and the non-competition, non-solicitation, and no-hire covenants are effective both during the executive’s employment and until the 12-month anniversary of termination of employment for any reason.
The McMaude Employment Agreement further provides for severance benefits, as described below under “Termination and Change in Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
Nalley Employment Agreement
We entered into an employment agreement with Ms. Nalley, effective as of January 1, 2023 (the “Nalley Employment Agreement”, pursuant to which Ms. Nalley serves as our Chief of Staff and Senior Vice President of Human Resources. The Nalley Employment Agreement provides for (i) an initial salary of $325,000, subject to adjustment from time to time and (ii) eligibility to receive an annual bonus, with a target bonus equal to 40% of base salary. Ms. Nalley is also entitled to participate in our employee benefit arrangements.
The Nalley Employment Agreement contains restrictive covenants, including confidentiality of information, assignment of intellectual property, non-competition, employee no-hire, employee non-solicitation, client, patient, and customer non-solicitation, and non-disparagement covenants. The confidentiality and non-disparagement covenants have an indefinite term, and the non-competition, non-solicitation, and no-hire covenants are effective both during the executive’s employment and until the 12-month anniversary of termination of employment for any reason.
The Nalley Employment Agreement further provides for severance benefits, as described below under “Termination and Change in Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
32
Outstanding Equity Awards at December 31, 2024
The following table provides information as of December 31, 2024, regarding the outstanding stock options held by our named executive officers. See “Long-Term Incentive Program” for more information.
|
|
|
|
Option Awards |
|
Stock Awards |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
Number of |
|
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|||||
|
|
|
|
Number of |
|
|
|
Securities |
|
|
|
Number of |
|
|
|
|
|
|
|
|
Number |
|
|
Value of |
|
|||||
|
|
|
|
Securities |
|
|
|
Underlying |
|
|
|
Securities |
|
|
|
|
|
|
|
|
of Shares |
|
|
Shares or |
|
|||||
|
|
|
|
Underlying |
|
|
|
Unexercised |
|
|
|
Underlying |
|
|
|
|
|
|
|
|
or Units |
|
|
Units of |
|
|||||
|
|
|
|
Unexercised |
|
|
|
Options (#) |
|
|
|
Unexercised |
|
|
|
Option |
|
|
Option |
|
of Stock |
|
|
Stock That |
|
|||||
|
|
|
|
Options (#) |
|
|
|
Unexercisable |
|
|
|
Unearned |
|
|
|
Exercise |
|
|
Expiration |
|
That Have |
|
|
Have Not |
|
|||||
Name |
|
Grant Date |
|
Exercisable |
|
|
|
(1) |
|
|
|
Options |
|
|
|
Price |
|
|
Date |
|
Not Vested (1) |
|
|
Vested ($)(2) |
|
|||||
Jon Rousseau |
|
10/16/2019 |
|
2,239,362 |
|
(3) |
|
|
|
|
|
955,823 |
|
(3) |
|
|
6.37 |
|
|
10/16/2029 |
|
|
|
|
|
|
||||
|
|
11/22/2023 |
|
|
436,180 |
|
(4) |
|
|
191,928 |
|
|
|
|
|
|
|
|
22.29 |
|
|
11/22/2023 |
|
|
|
|
|
|
||
|
|
1/25/2024 |
|
|
80,020 |
|
(5) |
|
|
240,066 |
|
|
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
725,913 |
(5) |
|
|
12,362,298 |
|
||||
Jim Mattingly |
|
9/24/2019 |
|
553,520 |
|
(6) |
|
|
|
|
|
|
184,506 |
|
|
|
|
6.37 |
|
|
9/24/2029 |
|
|
|
|
|
|
|||
|
|
1/25/2024 |
|
|
|
|
|
28,005 |
|
(7) |
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77,164 |
(8) |
|
|
1,314,103 |
|
||||
Steven Reed |
|
9/24/2019 |
|
182,543 |
|
(6) |
|
|
|
|
|
|
60,848 |
|
|
|
|
6.37 |
|
|
9/24/2029 |
|
|
|
|
|
|
|||
|
|
1/25/2024 |
|
|
|
|
|
19,837 |
|
(7) |
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,658 |
(8) |
|
|
930,826 |
|
||||
Bob Barnes |
|
9/24/2019 |
|
105,994 |
|
(6) |
|
|
|
|
|
|
35,331 |
|
|
|
|
6.37 |
|
|
9/24/2029 |
|
|
|
|
|
|
|||
|
|
5/12/2020 |
|
7,654 |
|
(9) |
|
|
1,178 |
|
|
|
|
2,944 |
|
|
|
|
15.92 |
|
|
5/12/2030 |
|
|
|
|
|
|
||
|
|
1/25/2024 |
|
|
|
|
|
16,920 |
|
(7) |
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,620 |
(8) |
|
|
793,939 |
|
||||
Mike McMaude |
|
5/12/2021 |
|
74,569 |
|
(10) |
|
|
27,480 |
|
|
|
|
35,349 |
|
|
|
|
15.92 |
|
|
5/12/2031 |
|
|
|
|
|
|
||
|
|
1/25/2024 |
|
|
|
|
|
18,670 |
|
(7) |
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,442 |
(8) |
|
|
876,057 |
|
||||
Lisa Nalley |
|
9/24/2019 |
|
105,994 |
|
(6) |
|
|
|
|
|
|
35,331 |
|
|
|
|
6.37 |
|
|
9/24/2029 |
|
|
|
|
|
|
|||
|
|
5/12/2020 |
|
10,206 |
|
(9) |
|
|
1,571 |
|
|
|
|
3,925 |
|
|
|
|
7.01 |
|
|
5/12/2030 |
|
|
|
|
|
|
||
|
|
1/25/2024 |
|
|
|
|
|
35,006 |
|
(7) |
|
|
|
|
|
|
13.00 |
|
|
1/25/2034 |
|
|
|
|
|
|
||||
|
|
1/25/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,454 |
(8) |
|
|
1,642,612 |
|
||||
33
Options Exercised and Stock Vested
The following table shows information about options exercised or shares acquired during 2024.
|
|
Option Awards |
|
|
Stock Awards |
|
||||||||||
Name |
|
Number of Shares |
|
|
Value Realized |
|
|
Number of Shares |
|
|
Value Realized |
|
||||
Jon Rousseau |
|
|
- |
|
|
$ |
- |
|
|
|
241,971 |
|
|
$ |
3,073,682 |
|
Jim Mattingly |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
Steven Reed |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
Bob Barnes |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
Mike McMaude |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
Lisa Nalley |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
(1) The dollar amounts shown in this column are determined by multiplying the number of shares acquired on vesting by the per-share closing price of our common stock on the vesting date.
Pension and Nonqualified Deferred Compensation Benefits
We did not offer pension benefits to our named executive officers during 2024. We offer nonqualified deferred compensation benefits to our named executive officers through our BrightSpring Health Services Nonqualified Deferred Compensation Plan, under which our named executive officers are permitted to defer up to 50% of their annual salary. None of our named executive officers elected to defer compensation with respect to 2024.
Termination and Change in Control Arrangements
Severance Arrangements
Mr. Rousseau. Pursuant to the terms of the Rousseau Employment Agreement, if Mr. Rousseau’s employment is terminated (i) by us without “cause” (as defined in the Rousseau Employment Agreement) or (ii) for “good reason” (as defined in the Rousseau Employment Agreement), Mr. Rousseau will be entitled to receive the following severance payments and benefits, in addition to certain accrued obligations:
Upon a termination of Mr. Rousseau’s employment as a result of the non-renewal of the term by us, Mr. Rousseau will be entitled to receive the following severance payments and benefits, in addition to certain accrued obligations:
Upon a termination of Mr. Rousseau’s employment due to his death or as a result of his disability, Mr. Rousseau will be entitled to any prior year bonus and the pro-rated bonus.
Our obligation to provide the severance benefits described above (other than those payable upon a termination of Mr. Rousseau’s employment due to his death or as a result of his disability) are contingent upon Mr. Rousseau’s execution and non-revocation of a release of claims in favor of us and our affiliates.
Mr. Mattingly. Pursuant to the terms of the Mattingly Employment Agreement, if Mr. Mattingly’s employment is terminated (i) by us without “cause” (as defined in the Mattingly Employment Agreement) or (ii) for “good reason” (as
34
defined in the Mattingly Employment Agreement), Mr. Mattingly will be entitled to receive the following payments and benefits, in addition to certain accrued obligations:
Our obligation to provide the severance benefits described above are contingent upon Mr. Mattingly’s execution of a release of claims in favor of us and our affiliates.
Mr. Mattingly will be entitled to receive the following payments and benefits under his Severance Agreement:
Mr. Reed. In connection with his termination, Mr. Reed received:
Mr. Barnes. Pursuant to the terms of the Barnes Employment Agreement, if Mr. Barnes’ employment is terminated (i) by us without “cause” (as defined in the Barnes Employment Agreement) or (ii) for “good reason” (as defined in the Barnes Employment Agreement), Mr. Barnes will be entitled to receive the following severance payment and benefits, in addition to certain accrued obligations:
Our obligation to provide the severance benefits described above are contingent upon Mr. Barnes’ execution and non-revocation of a release of claims in favor of us and our affiliates.
Mr. McMaude. Pursuant to the terms of the McMaude Employment Agreement, if Mr. McMaude’s employment is terminated (i) by us without “cause” (as defined in the McMaude Employment Agreement) or (ii) for “good reason” (as defined in the McMaude Employment Agreement), Mr. McMaude will be entitled to receive an amount equal to 1.0x Mr. McMaude’s then-current base salary, payable in equal installments in accordance with our payroll practice.
35
Our obligation to provide the severance benefits described above are contingent upon Mr. McMaude’s execution of a release of claims in favor of us and our affiliates.
Ms. Nalley. Pursuant to the terms of the Nalley Employment Agreement, if Ms. Nalley’s employment is terminated (i) by us without “cause” (as defined in the Nalley Employment Agreement) or (ii) for “good reason” (as defined in the Nalley Employment Agreement), in addition to certain accrued amounts, Ms. Nalley will be entitled to:
Our obligation to provide the severance benefits described above are contingent upon Ms. Nalley’s execution of a release of claims in favor of us and our affiliates.
Equity Awards
Termination without “cause,” by the executive for “good reason,” or as a result of death or disability
Mr. Rousseau. Pursuant to the 2019 stock option agreement with Mr. Rousseau, in the event of a termination of employment by us without “cause,” by Mr. Rousseau for “good reason,” or as a result of Mr. Rousseau’s death or disability, (i) a pro rata portion of the time-vesting options eligible to vest in the quarter of termination based on the number of days Mr. Rousseau was employed from the immediately preceding vesting date will vest, (ii) the remaining unvested time-vesting options will remain outstanding and eligible to vest upon the occurrence of a change in control within the nine-month period following the termination, and (iii) all performance-vesting options will remain outstanding and eligible to vest to the extent that the applicable performance vesting conditions are satisfied during the nine-month period following the termination. Pursuant to the 2023 stock option agreement with Mr. Rousseau, in the event of a termination of employment by us without “cause,” by Mr. Rousseau for “good reason,” or as a result of Mr. Rousseau’s death or disability, all then-unvested stock options become fully vested upon such termination.
Messrs. Mattingly, Barnes and McMaude and Ms. Nalley. There is no additional vesting (or eligibility to vest) in connection with a termination of employment with respect to the stock options held by Messrs. Mattingly, Barnes or McMaude or Ms. Nalley.
Change in control
Messrs. Rousseau, Mattingly, Barnes, and McMaude and Ms. Nalley. If a change in control (as defined in the stockholders agreement described under “Transactions with Related Persons”) occurs during the executive’s employment (i) the time-vesting options will become fully vested and exercisable immediately prior to the effective time of such change in control and (ii) all performance-vesting options that have not vested before the change in control and that will not vest in connection with the change in control shall be automatically forfeited in connection with the change in control (except in the case of a change in control that results in KKR Stockholder and its affiliates receiving any non-cash or cash equivalent proceeds as consideration, in which case a portion of the proceeds received by KKR Stockholder and its affiliates will be placed in escrow, subject to the original vesting terms of the performance-vesting options). Pursuant to the 2023 stock option agreement with Mr. Rousseau, in the event a change in control occurs during Mr. Rousseau’s employment, all then-unvested stock options become fully vested upon such change in control.
Termination of employment in connection with a change in control
Mr. Rousseau. In the event that Mr. Rousseau’s termination of employment is either at the request or suggestion of a potential acquirer or occurs on or after the date of entry into a binding letter of intent that (x) grants a buyer exclusivity for a period of time and (y) is for a transaction that would, if consummated, constitute a change in control, or a pre-CIC termination, (i) a pro rata portion of the time-vesting options eligible to vest in the quarter of termination based on the number of days Mr. Rousseau was employed from the immediately preceding vesting date will vest and the remaining unvested time-vesting options will remain outstanding and eligible to vest upon the consummation of the change in control to which such termination relates, even if the consummation occurs more than nine months following termination of Mr. Rousseau’s employment and (ii) all performance-vesting options will remain outstanding and eligible to vest to the extent that the applicable performance vesting conditions are satisfied in connection with the change in control to which such termination relates.
Messrs. Mattingly, Barnes, and McMaude and Ms. Nalley. There is no additional vesting (or eligibility to vest) in connection with a pre-CIC termination of employment with respect to the stock options held by Messrs. Mattingly, Barnes, and McMaude or Ms. Nalley.
36
Potential Payments Upon Termination or Change of Control
The following table describes the potential payments and benefits that would have been payable to our named executive officers assuming an eligible termination (as described above under “Termination and Change in Control Arrangements”) of their employment on December 31, 2024 and a change in control also occurring on such date.
The amounts shown in the table below do not include:
|
|
|
|
|
|
|
|
|
|
|
Change of Control |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|||||
|
|
Involuntary |
|
|
Termination |
|
|
|
|
|
|
|
|
Termination |
|
|||||
|
|
Termination |
|
|
Due to |
|
|
|
|
|
|
|
|
Without |
|
|||||
|
|
without Cause |
|
|
Non-Renewal |
|
|
|
|
|
|
|
|
Cause or |
|
|||||
|
|
or Resignation |
|
|
of the Term |
|
|
Termination |
|
|
|
|
|
Resignation |
|
|||||
|
|
for Good |
|
|
by the |
|
|
Due to Death |
|
|
Without |
|
|
for Good |
|
|||||
|
|
Reason |
|
|
Company |
|
|
or Disability |
|
|
Termination |
|
|
Reason |
|
|||||
Name |
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|||||
Jon Rousseau |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance(1)(2)(3) |
|
|
4,500,000 |
|
|
|
2,000,000 |
|
|
|
1,250,000 |
|
|
|
— |
|
|
|
4,500,000 |
|
Acceleration of Equity Awards(4) |
|
|
13,329,764 |
|
|
|
— |
|
|
|
13,329,764 |
|
|
|
13,329,764 |
|
|
|
13,329,764 |
|
Health & Welfare Benefits(5) |
|
|
23,913 |
|
|
|
23,913 |
|
|
|
— |
|
|
|
— |
|
|
|
23,913 |
|
Total |
|
|
17,853,677 |
|
|
|
2,023,913 |
|
|
|
14,579,764 |
|
|
|
13,329,764 |
|
|
|
17,853,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Jim Mattingly |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance(1) |
|
|
849,195 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
849,195 |
|
Acceleration of Equity Awards(4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,426,963 |
|
|
|
1,426,963 |
|
Health & Welfare Benefits(5) |
|
|
15,942 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,942 |
|
Total |
|
|
865,137 |
|
|
|
— |
|
|
|
— |
|
|
|
1,426,963 |
|
|
|
2,292,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Steven Reed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance |
|
|
724,032 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acceleration of Equity Awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Health & Welfare Benefits |
|
|
10,401 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
734,433 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Bob Barnes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance(1) |
|
|
720,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
720,000 |
|
Acceleration of Equity Awards(4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
873,930 |
|
|
|
873,930 |
|
Health & Welfare Benefits(5) |
|
|
3,113 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,113 |
|
Total |
|
|
734,433 |
|
|
|
— |
|
|
|
— |
|
|
|
873,930 |
|
|
|
1,597,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mike McMaude |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance(1) |
|
|
472,500 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acceleration of Equity Awards(4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Health & Welfare Benefits(5) |
|
|
16,074 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
488,574 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Lisa Nalley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash Severance(1) |
|
|
573,283 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Acceleration of Equity Awards(4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Health & Welfare Benefits(5) |
|
|
18,599 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
591,882 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
37
For purposes of this column, we assume that there is no earned but unpaid prior year bonus outstanding.
Director Compensation
We do not currently pay our directors any compensation, including any stock awards or option awards, for their service as directors. The compensation paid to Jon Rousseau, in his capacity as our President and Chief Executive Officer, is presented in the Summary Compensation Table and the related explanatory tables. All of our directors are reimbursed for their reasonable out-of-pocket expenses related to their service as directors.
We anticipate that we will review our director compensation program following the consummation of our initial public offering and make such changes, including the establishment of a compensation program for non-employee directors as we determine are necessary or appropriate for our status as a public company.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is a person who is or has been at any time one of our executive officers or team members. None of our executive officers serve or has served during the last completed year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
We are parties to certain transactions with KKR Stockholder, Walgreen Stockholder and their respective affiliates described “Transactions with Related Persons.”
CEO Pay Ratio
We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Jon Rousseau, our Chief Executive Officer (our “CEO”):
For 2024, our last completed fiscal year:
38
Based on this information for fiscal year 2024, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 496:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K.
We identified our median employee based on the total compensation actually paid during fiscal year 2024 to all 46,143 members of our workforce (including full-time, part-time and temporary employees as well as certain independent contractors), other than our CEO, who were employed on November 1, 2024.
For purposes of determining the total compensation actually paid, we used total compensation as the consistently applied compensation measure to identify our median employee. From our employee population, we used statistical sampling to collect additional compensation data for a group of employees who were paid within a relatively narrow range around our estimated median consistently applied compensation measure. From this group, we selected an employee who was reasonably representative of our workforce to be our median employee.
Once we identified our median employee, we then determined that employee’s total compensation, including any perquisites and other benefits, in the same manner that we determine the total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. The total compensation of our median employee was determined to be $35,641. This total compensation amount for our median employee was then compared to the total compensation of our CEO disclosed above in the Summary Compensation Table, of $17,673,893. The elements included in the CEO’s total compensation are fully discussed above in the footnotes to the Summary Compensation Table.
Pay versus Performance
The information below is provided pursuant to the SEC pay versus performance disclosure requirements set forth in Item 402(v) of SEC Regulation S-K (the “Pay Versus Performance Rule”), which requires companies to disclose certain information about the relationship between performance and the compensation of named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 |
|
|
|
|
|
|
|
|||||||||||
Fiscal |
|
Summary |
|
|
Compensation |
|
|
Average Summary |
|
|
Average |
|
|
Total |
|
|
Peer Group |
|
|
Net |
|
|
Adjusted |
|
||||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
2024 |
|
|||||
|
|
Mr. Rousseau |
|
|
Average for |
|
||
Summary Compensation Table (“SCT”) Total |
|
|
|
|
|
|
||
Grant Date Fair Value of Stock Awards from SCT |
|
|
( |
) |
|
|
( |
) |
Fair Value of Equity Awards Granted in the Year and Unvested as of |
|
|
|
|
|
|
||
Change in Fair Value from Prior Year End of Outstanding and Unvested |
|
|
( |
) |
|
|
|
|
Change in Fair Value from Prior Year End of Vested Awards Granted in |
|
|
|
|
|
|
||
Fair Value at Vesting Date of Vested Awards Granted in Current Year |
|
|
|
|
|
|
||
Compensation Actually Paid |
|
|
|
|
|
|
||
39
Relationship Between Compensation Actually Paid and our Total Shareholder Return
Long-term equity incentives represent a significant portion of our named executive officers’ total target compensation and our stock price performance, measured by TSR, is the key driver of Compensation Actually Paid. In 2024, our TSR on an absolute basis was high, 54.82%, while the TSR of our 2024 peer group was 3.33%. This shows how Compensation Actually Paid to our named executive officers and TSR are tightly linked.
Relationship Between Compensation Actually Paid and Net Income
Net Income is generally a key indicator of company profitability and can contribute to changes in our stock price, which, in turn, drives Compensation Actually Paid. There is no direct correlation between Net Income and Compensation Actually Paid 2024 as we do not use Net Income as a financial measure in our executive compensation program.
Relationship Between Compensation Actually Paid and Adjusted EBITDA
Adjusted EBITDAs is the financial measure that our Compensation Committee weighted the heaviest for the BHS STIC. Adjusted EBITDA is the most important financial metrics in determining Compensation Actually Paid TSR. Our strong performance led to above target or maximum bonus payouts in 2024, which, in turn, increased Compensation Actually Paid to our named executive officers.
Other Relevant Financial Performance Measures
For 2024, the following list represented the most important financial performance measures we used to link Compensation Actually Paid with our financial performance:
40
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information regarding our equity compensation plans in effect as of December 31, 2024:
Plan category |
|
Number of |
|
|
Weighted- |
|
|
Number of |
|
||||
Equity compensation plans approved by security |
|
25,523,043 (3) |
|
|
$ |
9.02 |
|
|
5,752,860 (4) |
|
|||
Equity compensation plans not approved by security |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Total |
|
|
25,523,043 |
|
|
$ |
9.02 |
|
|
|
5,752,860 |
|
|
41
OWNERSHIP OF SECURITIES
The following table sets forth information regarding the beneficial ownership of our common stock by (1) each person known to us to beneficially own more than 5% of our voting securities, (2) each of our directors and named executive officers, and (3) all directors and executive officers as a group.
The percentage of beneficial ownership set forth below is based on 175,070,732 shares outstanding as of March 31, 2025. Beneficial ownership is determined in accordance with SEC rules. In accordance with SEC rules, beneficial ownership includes voting or investment power with respect to securities and includes shares issuable pursuant to exchange or conversion rights that are exercisable within 60 days of March 31, 2025.
To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock.
Name of Beneficial Owner (1) |
|
Number of Shares |
|
|
% of Shares |
|
||
Greater than 5% Stockholders |
|
|
|
|
|
|
||
KKR Stockholder (2) |
|
|
92,959,984 |
|
|
|
53.1 |
|
FMR LLC (3) |
|
|
22,452,734 |
|
|
|
12.8 |
|
Walgreen Stockholder (4) |
|
|
11,239,996 |
|
|
|
6.4 |
|
Named Executive Officers and Directors: |
|
|
|
|
|
|
||
Jon Rousseau |
|
|
3,742,654 |
|
|
|
2.1 |
|
Jim Mattingly |
|
|
662,888 |
|
|
* |
|
|
Bob Barnes |
|
|
139,130 |
|
|
* |
|
|
Hunter Craig |
|
|
- |
|
|
* |
|
|
Johnny Kim |
|
|
- |
|
|
* |
|
|
Olivia Kirtley |
|
|
20,102 |
|
|
* |
|
|
Max Lin |
|
|
- |
|
|
* |
|
|
Mike McMaude |
|
|
582,760 |
|
|
* |
|
|
Steve Miller |
|
|
15,653 |
|
|
* |
|
|
Lisa Nalley |
|
|
164,730 |
|
|
* |
|
|
Steven Reed |
|
|
246,630 |
|
|
* |
|
|
Timothy Wicks |
|
|
- |
|
|
* |
|
|
Directors and Executive Officers as a group (14 persons) |
|
|
5,904,858 |
|
|
|
3.4 |
|
* Less than 1 percent of common stock outstanding.
42
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires executive officers and directors, a company’s chief accounting officer and persons who beneficially own more than 10% of a company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC and the Nasdaq.
Based solely on our review of copies of such reports and written representations from our executive officers, directors, and other beneficial owners of more than ten percent of any class of our equity securities registered pursuant to Section 12 of the Exchange Act, in each case at any time during the prior fiscal year, we believe that such persons or beneficial owners complied with all Section 16(a) filing requirements during 2024, except that Steve Miller did not timely file his Form 3 upon his appointment as a director. This late filing was the result of an administrative error.
43
Statement of Policy Regarding Transactions with Related Persons
Our Board of Directors recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board of Directors adopted a written statement of policy regarding transactions with related persons, which we refer to as our “related person transaction policy,” that is in conformity with the requirements applicable to issuers having publicly-held common stock that is listed on Nasdaq.
Our related person transaction policy requires that a “related person” (as defined as in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our chief legal officer or chief accounting officer, or such other person designated by the Board of Directors, any “related person transaction” (defined as any transaction that we anticipate would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The chief legal officer or chief accounting officer, or such other person, will then promptly communicate that information to our audit committee. Subject to limited transactions deemed pre-approved, no related person transaction entered into will be executed without the approval or ratification of our audit committee.
The following is a summary of such related person transactions since January 1, 2024 in which the amount involved exceeded or will exceed $120,000.
Stockholders Agreement
Prior to our initial public offering, we entered into the Amended and Restated Stockholders’ Agreement, dated as of March 5, 2019, with the KKR Stockholder, the Walgreens Stockholder and the other parties party thereto (the “Stockholders Agreement”). The Stockholders Agreement grants each of KKR Stockholder and Walgreens Stockholder the right to nominate to our Board of Directors a number of designees equal to the product (rounded up or down to the nearest whole number) of (x) the total number of directors constituting the entire Board of Directors (in the case of Walgreens Stockholder, without taking into account the director that is also our Chief Executive Officer), multiplied by (y) the percentage of the issued and outstanding shares of our capital stock beneficially owned by KKR Stockholder or Walgreens Stockholder, as the case may be. As of the record date, the KKR Stockholder continues to meet its ownership requirements and has the right to designate the number of directors and director votes as specified in the Stockholders Agreement. The Walgreens Stockholder has declined to nominate a director pursuant to the Stockholders Agreement.
Registration Rights Agreement
On December 7, 2017, we entered into a registration rights agreement with KKR Stockholder and Walgreens Stockholder (the “registration rights agreement”). Subject to certain conditions, the registration rights agreement provides KKR Stockholder with an unlimited number of “demand” registrations, and provides Walgreens Stockholder with five “demand” registrations following an initial public offering. Under the registration rights agreement, all holders of registrable securities party thereto are provided with customary “piggyback” registration rights, with certain exceptions. The registration rights agreement also provides that we will pay certain expenses of these holders relating to such registrations and indemnify them against certain liabilities which may arise under the Securities Act.
Monitoring Agreement
On March 5, 2019, our subsidiary, Phoenix Guarantor, Inc., entered into the Monitoring Agreement with Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and Walgreens Boots Alliance, Inc. (together with KKR, the “Managers”) pursuant to which the Managers provided consulting services to us. In accordance with the terms of the Monitoring Agreement, we paid an aggregate annual advisory fee equal to 1% of the Consolidated EBITDA (as defined under the First Lien Credit Agreement) for the preceding year, which fee was split between the Managers on a pro rata basis based on KKR Stockholder’s and Walgreens Stockholder’s respective ownership of our common stock. The Managers could also charge us a customary fee for services rendered in connection with acquisitions, divestitures, or other transaction, including securing, structuring, and negotiating equity and debt financings by us. Additionally, we were required to reimburse the Managers for any out-of-pocket expenses in connection with these services. Prior to the termination of the Monitoring Agreement, we recognized $0.7 million in monitoring and advisory fees during the first fiscal quarter of 2024. As a result of the termination of the Monitoring Agreement and in accordance with the agreement, we paid $22.7 million in termination fees to the Managers. The termination fees were recognized in the first fiscal quarter of 2024.
Relationship with KKR Capital Markets
KKR Capital Markets LLC (“KCM”), a wholly owned subsidiary of KKR, acted as an underwriter in the initial public offering during the first fiscal quarter of 2024 and received $7.4 million in underwriting discounts and commission In connection with debt refinancing in 2024 and the Revolver upsize in 2023, we paid underwriter, arranger, and transaction fees to KCM of $3.7 million and $2.4 million, respectively.
44
Transactions involving affiliates of Walgreens Stockholder
Pharmaceutical Purchase and Distribution Agreement
On December 7, 2017, PharMerica entered into the Joinder Agreement and Eighth Amendment (the “Eighth Amendment”), to the Pharmaceutical Purchase and Distribution Agreement between Walgreens Boots Alliance, Inc., (“WBA”), and certain of its affiliates, including Walgreens Stockholder, or collectively, Walgreens, and AmerisourceBergen Drug Corporation (“ABDC”). ABDC is a global pharmaceutical distributor of pharmaceutical products and services. PharMerica, pursuant to the Eighth Amendment as a third-party beneficiary to the Pharmaceutical Purchase and Distribution Agreement, has the right to participate in certain pricing and payment related terms, subject to the terms thereof. The Pharmaceutical Purchase and Distribution Agreement was terminated in the first quarter of 2025, and PharMerica entered into a separate agreement with ABDC. For the fiscal year ended December 31, 2024, PharMerica purchased approximately $1.8 billion at invoice cost, subject to certain pricing terms of the Pharmaceutical Purchase and Distribution Agreement.
WBAD – Membership Agreement
On May 30, 2018, PharMerica entered into the WBAD – Membership Agreement with Walgreens Boots Alliance Development GmbH (“WBAD”), which is an affiliate of Walgreens Stockholder. Pursuant to the WBAD – Membership Agreement, PharMerica appointed WBAD to negotiate certain commercial and other mutually agreed upon terms for generic pharmaceutical products in accordance with guiding principles that address topics such as improvements in pricing and notification regarding switches in suppliers. The WBAD – Membership Agreement was terminated in the first fiscal quarter of 2025 in connection with PharMerica’s new agreement with ABDC. For the fiscal year ended December 31, 2024, PharMerica purchased approximately $143.5 million at invoice cost, subject to certain pricing terms of the WBAD—Membership Agreement.
Transactions with Directors and Officers
Management Stockholders’ Agreement
We and KKR Stockholder have entered into a management stockholders’ agreement (“Management Stockholders’ Agreement”), with certain of our senior executive officers and other employees who made an equity investment in us or were granted equity-based awards pursuant to the 2017 Stock Plan or otherwise held equity prior to our initial public offering.
The Management Stockholders’ Agreement imposes significant restrictions on transfers of shares of our common stock and equity awards held by management stockholders prior to our initial public offering. Generally, shares are nontransferable by any means at any time prior to the earlier of (x) a “Change of Control” (as defined in the Management Stockholders’ Agreement) or (y) the date on which KKR Stockholder and its affiliates’ beneficial ownership in us is less than 10%, or the earlier of (x) or (y), the Lapse Date, except (i) prior to the Lapse Date, transfers by management stockholders who are not subject to the reporting requirements of Section 16 of the Exchange Act, or Section 16, in amounts to be determined based on the amount of our common stock, or any warrants, rights, calls, options, or other securities exchangeable or exercisable for, or convertible into, our common stock sold in public, registered offering(s) by KKR Stockholder and its affiliates, (ii) transfers to a “Permitted Transferee” (as defined in the Management Stockholders’ Agreement); (iii) transfers by management stockholders who are subject to the reporting requirements of Section 16 pursuant to the proper exercise of “piggyback” registration rights under the Management Stockholders’ Agreement; (iv) transfers approved by our Board of Directors in its sole discretion; or (v) transfers to us, or KKR Stockholder or its affiliates.
Additionally, management stockholders who are subject to the reporting requirements of Section 16 have limited “piggyback” registration rights with respect to registered offering(s) to the extent KKR Stockholder and its affiliates participate.
Other Arrangements
We have certain agreements with our directors and officers which are described in the section entitled “Executive Compensation.”
We have entered into indemnification agreements with our directors and executive officers. These agreements and our Bylaws require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The indemnification provided under the indemnification agreements is not exclusive of any other indemnity rights. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors and executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.
45
STOCKHOLDER PROPOSALS FOR THE 2026 ANNUAL MEETING
If any stockholder wishes to propose a matter for consideration at our 2026 Annual Meeting of Stockholders (the “2026 Annual Meeting”), the proposal should be mailed by certified mail return receipt requested, to our corporate Secretary, BrightSpring Health Services, Inc., 805 N. Whittington Parkway, Louisville, Kentucky 40222. To be eligible under the SEC’s stockholder proposal rule (Rule 14a-8(e) of the Exchange Act) for inclusion in our proxy statement for the 2026 Annual Meeting, a proposal must be received by our Corporate Secretary on or before December 19, 2025. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed timely received.
In addition, our Bylaws permit stockholders to nominate candidates for director and present other business for consideration at our annual meeting of stockholders. To make a director nomination or present other business for consideration at the 2026 Annual Meeting, you must submit a timely notice in accordance with the procedures described in our Bylaws. To be timely, a stockholder’s notice must be delivered to the Corporate Secretary at the principal executive offices of the Company not less than ninety (90) days nor more than one hundred twenty (120) days prior to the date of the first anniversary of the preceding year’s annual meeting (which date, for purposes of the Annual Meeting, which is the Company’s first annual meeting of stockholders after shares of its common stock are first publicly traded, was deemed to have occurred on June 1, 2024); provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than seventy (70) days from the anniversary date of the previous year’s meeting, or, following the Annual Meeting, if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement (as defined below) of the date of such meeting is first made by the Corporation. Therefore, to be presented at our 2026 Annual Meeting, such a proposal must be received on or after the closing of business on January 28, 2026, but not later than the close of business on February 27, 2026. If the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Company naming all of the nominees for director or specifying the size of the increased Board of Directors at least one hundred (100) calendar days prior to the first anniversary of this year’s Annual Meeting, notice by a stockholder will be considered timely, but only with respect to nominees for any new positions created by such increase, if it is if it is delivered not later than the close of business on the tenth (10th) calendar day following the day on which such public announcement is first made. Any such proposal will be considered timely only if it is otherwise in compliance with the requirements set forth in our Bylaws.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act. Since our Bylaws impose an earlier deadline for such a notice than Rule 14a-19(b)(1), the noticing stockholder’s proposal must be received by the Company in compliance with our Bylaws in order to be timely delivered.
46
OTHER BUSINESS
The Board does not know of any other matters to be brought before the meeting. If other matters are properly presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment.
We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. To access these filings, go to our website (https://ir.brightspringhealth.com/) and click on “SEC Filings” under the “Financial Information” heading. Copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to:
Corporate Secretary
BrightSpring Health Services, Inc.
805 Whittington Parkway
Louisville, Kentucky 40222
47
Logo BrightSpring health Services P.O. BOX 8016, CARY, NC 27512-9903 Your vote matters! Have your ballot ready and please use one of the methods below for easy voting: Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. BrightSpring Health Services, Inc. Annual Meeting of Stockholders For Stockholders of record as of March 31, 2025 Wednesday, May 28, 2025 1:00 PM, ET Annual Meeting to be held live via the internet - please visit www.proxydocs.com/BTSG for more details YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: 1:00 PM, ET, May 28, 2025. This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints Jon Rousseau and Jennifer Phipps (the "Named Proxies"), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of BrightSpring Health Services, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. Internet: www.proxypush.com/BTSG • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote Phone: 1-855-601-5118 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid envelope provided Virtual: You must register to attend the meeting online and/or participate at www.proxydocs.com/BTSGPLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE Copyright © 2025 BetaNXT, Inc. or its affiliates. All Rights Reserved
Logo BrightSpring health Services BrightSpring Health Services, Inc. Annual Meeting of Stockholders Please make your marks like this: THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3 THE BOARD OF DIRECTORS RECOMMENDS THAT AN ADVISORY VOTE ON THE COMPENSATION FOR NAMED EXECUTIVE OFFICERS BE HELD EVERY 1 YEAR PROPOSAL 1. Election of Class I directors 1.01 Johnny Kim 1.02 Timothy A. Wicks 2. Ratification of the appointment of KPMG LLP as the independent accounting firm for the year ending December 31, 2025 3. Advisory vote on executive compensation 4. Advisory vote on the frequency of holding an advisory vote on executive compensation Note: Such other business as may properly come before the meeting or any adjournment thereof. YOUR VOTE FOR WITHHOLD FOR AGAINST ABSTAIN 1YR 2YR 3YR ABSTAIN BOARD OF DIRECTORS RECOMMENDS FOR FOR FOR FOR 1 YEAR You must register to attend the meeting online and/or participate at www.proxydocs.com/BTSG Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Date Signature (if held jointly) Date