Encompass Health Corp
For the period ended May 2, 2024. Filed Apr 2, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 2, 2024 · Filed Apr 2, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrantý
Filed by a Party other than the Registranto
Check the appropriate box:
| o | Preliminary Proxy Statement |
|---|---|
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ý | Definitive Proxy Statement |
| o | Definitive Additional Materials |
| o | Soliciting Material under Rule 14a-12 |
| Encompass Health Corporation | |
| (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): | |
| ý | No fee required |
| o | Fee paid previously with preliminary materials |
| o | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
April 2, 2024
Dear fellow stockholder:
I am pleased to invite you to attend our 2024 Annual Meeting of Stockholders of Encompass Health Corporation, to be held on Thursday, May 2, 2024, at 11:00 a.m., central time, at our corporate headquarters at 9001 Liberty Parkway, Birmingham, Alabama 35242. Please visit our “Investors Relations” website at https://investor.encompasshealth.com for updates relating to attending the annual meeting.
We will consider the items of business described in the Proxy Statement accompanying this letter and respond to any questions you may have. The Proxy Statement contains important information about the matters to be voted on and the process for voting, along with information about Encompass Health, its management and its directors.
Every stockholder’s vote is important to us. Even if you plan to attend the annual meeting in person, please promptly vote by submitting your proxy by phone, by internet or by mail. The “Commonly Asked Questions” section of the Proxy Statement and the enclosed proxy card contain detailed instructions for submitting your proxy. If you plan to attend the annual meeting in person, you must provide proof of share ownership, such as an account statement, and a form of personal identification in order to be admitted to the meeting.
On behalf of the directors, management and employees of Encompass Health, thank you for your continued support of and ownership in our company.
Sincerely,
Donald L. Correll
Chairman of the Board of Directors
Notice of Annual Meeting of Stockholders
| TIME | 11:00 a.m., central time, on Thursday, May 2, 2024 |
|---|---|
| PLACE | ENCOMPASS HEALTH CORPORATIONCorporate Headquarters9001 Liberty ParkwayBirmingham, Alabama 35242Directions to the annual meeting are available by calling Investor Relations at 1-205-969-4600. |
| ITEMS OF BUSINESS | •To elect 10 directors to the board of directors to serve until our 2025 annual meeting of stockholders.Ø The board of directors recommends a vote FOR each nominee.•To ratify the appointment by Encompass Health’s Audit Committee of PricewaterhouseCoopers LLP as Encompass Health’s independent registered public accounting firm.Ø The board of directors recommends a vote FOR ratification.•To approve, on an advisory basis, the compensation of the named executive officers as disclosed in Encompass Health’s Definitive Proxy Statement for the 2024 annual meeting.Ø The board of directors recommends a vote FOR the approval of the compensation of our named executive officers.•To vote on a stockholder proposal requesting a report on the effectiveness of the Company’s diversity, equity, and inclusion efforts.Ø The board of directors recommends a vote AGAINST the stockholder proposal.•To transact such other business as may properly come before the annual meeting and any adjournment or postponement. |
| RECORD DATE | You can vote if you are a holder of record of Encompass Health common stock on March 8, 2024. |
| PROXY VOTING | Your vote is important. Please vote in one of these ways:•Via internet: Go to http://www.proxyvote.com and follow the instructions. You will need to enter the control number printed on your proxy card;•By telephone: Call toll-free 1-800-690-6903 and follow the instructions. You will need to enter the control number printed on your proxy card;•In writing: Complete, sign, date and promptly return your proxy card in the enclosed envelope; or•Submit a ballot in person at the annual meeting of stockholders. |
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to be Held on May 2, 2024
Encompass Health’s Proxy Statement on Schedule 14A, form of proxy card, and 2023 Annual Report (including the 2023 Annual Report on Form 10-K) are available at http://www.proxyvote.com after entering the control number printed on your proxy card.
| Birmingham, Alabama | Patrick Darby |
|---|---|
| April 2, 2024 | Secretary |
PROXY STATEMENT
TABLE OF CONTENTS
| Page | ||
|---|---|---|
| PROXY SUMMARY | 1 | |
| COMMONLY ASKED QUESTIONS | 3 | |
| ITEMS OF BUSINESS REQUIRING YOUR VOTE | 8 | |
| Proposal 1 – Election of Directors | 8 | |
| Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm | 15 | |
| Proposal 3 – Advisory Vote on Executive Compensation | 17 | |
| Proposal 4 – Stockholder Proposal Requesting a Report on Diversity, Equity, and Inclusion Efforts | 18 | |
| CORPORATE GOVERNANCE AND BOARD STRUCTURE | 22 | |
| Corporate Governance | 22 | |
| Corporate Governance Guidelines | 22 | |
| Code of Ethics | 22 | |
| Insider Trading Policy | 22 | |
| Corporate Website | 22 | |
| Board Oversight of the Company’s Risks | 23 | |
| Board Oversight of Sustainability Matters | 23 | |
| Annual Evaluation of the Performance of the Board and Its Committees | 24 | |
| Stockholder Engagement and Communications to Directors | 25 | |
| Board Structure and Committees | 25 | |
| Board Structure and Meetings | 25 | |
| Audit Committee | 26 | |
| Compensation and Human Capital Committee | 26 | |
| Compliance and Quality of Care Committee | 27 | |
| Finance Committee | 28 | |
| Nominating/Corporate Governance Committee | 28 | |
| Board Composition and Director Nomination Process | 29 | |
| Board Composition | 29 | |
| Criteria for Board Members | 29 | |
| Process for Identifying and Evaluating Candidates | 30 | |
| Board Succession Planning | 30 | |
| Director Nominees Proposed by Stockholders | 30 | |
| Director Independence | 31 | |
| Compensation of Directors | 32 | |
| AUDIT COMMITTEE REPORT | 34 | |
| COMPENSATION AND HUMAN CAPITAL COMMITTEE MATTERS | 35 | |
| Scope of Authority | 35 | |
| Compensation Committee Interlocks and Insider Participation | 35 | |
| Compensation and Human Capital Committee Report | 35 | |
| EXECUTIVE COMPENSATION | 36 | |
| Compensation Discussion and Analysis | 36 | |
| Executive Summary | 36 | |
| Executive Compensation Philosophy | 38 | |
| Determination of Compensation | 40 | |
| Elements of Executive Compensation | 42 | |
| Other Compensation Policies & Practices | 49 | |
| Summary Compensation Table | 52 | |
| Grants of Plan-Based Awards During 2023 | 54 | |
| Potential Payments upon Termination of Employment | 56 | |
| Outstanding Equity Awards at December 31, 2023 | 58 | |
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| Page | ||
|---|---|---|
| Options Exercised and Stock Vested in 2023 | 59 | |
| Equity Compensation Plans | 59 | |
| 2004 Amended and Restated Director Incentive Plan | 59 | |
| 2008 Equity Incentive Plan | 60 | |
| 2016 Omnibus Performance Incentive Plan | 60 | |
| Deferred Compensation | 61 | |
| Retirement Investment Plans | 61 | |
| Nonqualified Deferred Compensation Plan | 61 | |
| CEO Pay Ratio | 62 | |
| Pay vs. Performance | 62 | |
| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 66 | |
| Review and Approval of Transactions with Related Persons | 66 | |
| Transactions with Related Persons | 66 | |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 67 | |
| EXECUTIVE OFFICERS | 69 | |
| GENERAL INFORMATION | 71 | |
| APPENDIX A - NOTE REGARDING PRESENTATION OF NON-GAAP FINANCIAL MEASURES | A-1 | |
NOTE TO READERS
As used in this report, the terms “Encompass Health,” “we,” “us,” “our,” and the “Company” refer to Encompass Health Corporation and its consolidated subsidiaries, unless otherwise stated or indicated by context. We use the term “Encompass Health Corporation” to refer to Encompass Health Corporation alone wherever a distinction between Encompass Health Corporation and its subsidiaries is required or aids in the understanding of this filing.
This proxy statement and the accompanying form of proxy are first being sent to our stockholders on April 2, 2024.
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.