LifeStance Health Group Inc

Elements of Compensation

Below is a summary of the primary elements of our executive compensation program, each of which is discussed in more detail below.

Base Salary

Each of our named executive officers is paid a base salary. The compensation committee believes this element of compensation is important because it provides a fixed element of compensation that reflects the individual named executive officer's skills, experience and role, as valued in the marketplace and within the Company. Base salaries are subject to annual review by the compensation committee and are adjusted from time to time based on these considerations, as well as peer group and other market data, as described above.

In 2023, Mr. Burdick’s base salary was reduced from $750,000 per year to $600,000 per year, a 20% decrease, and his target annual bonus was increased from 100% to 150% of his annual base salary, effectively maintaining Mr. Burdick’s overall cash compensation if target performance is achieved under our annual bonus plan, but increasing the portion of Mr. Burdick’s compensation that is at-risk and subject to our achievement of performance goals, and providing more upside to Mr. Burdick in the event of performance in excess of target achievement levels, by virtue of his maximum bonus potential increasing from 200% of his annual base salary to 250%. The compensation committee believes this change further aligns Mr. Burdick’s interest with those of our shareholders by tying a larger portion of his compensation directly to our performance. In 2023, the compensation committee also approved a 6% increase to Mr. Qureshi’s base salary, a 10% increase to Mr. Pantaleoni’s base salary, and an 11 % increase to Mr. Pardo’s base salary, in each case based on the factors described above and to bring such salaries more in line with the market. Mr. Bourdon did not receive a base salary increase in 2023, in part because his compensation was set in relatively close proximity to our annual compensation review cycle in connection with his November 2022 hire.

The following table sets forth the annual base salaries for each of our named executive officers as of the end of 2023:

1 As of December 31 st of the applicable year.

Annual Bonus Plan

The compensation committee believes that a significant portion of our named executive officers' cash compensation should be tied to our performance. Each of our named executive officers is eligible to earn a cash bonus under our annual bonus program based on the achievement of key corporate financial and strategic goals. We believe this element of compensation is important because it directly ties the compensation paid to our named executive officers with the achievement of key performance goals that are important to the Company and its stakeholders.

The compensation committee established the corporate performance metrics for our 2023 cash bonus program, following input from our Chief Executive Officer and its independent compensation consultant, as Adjusted EBITDA*, revenue, net clinician growth and patient satisfaction. When setting goals for each of these metrics, the compensation committee strived to set challenging, yet achievable, performance goals that would promote the achievement of short-term business objectives and were aligned with our annual business plan, while also supporting our longer-term business objectives. The compensation committee chose these performance goals because it believes Adjusted EBITDA*, revenue, net clinician growth and patient satisfaction are the primary indicators of our success in delivering our mission of expanding access to high quality mental healthcare through a high performing business model.

• Adjusted EBITDA is a non-GAAP financial measure. For a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to GAAP net loss, see the section titled "Key Metrics and Non-GAAP Financial Measures" included in our Annual Report on Form 10-K for fiscal year 2023.

Following the end of the fiscal year, the compensation committee determines the achievement of the performance goals and the payments to be made under the annual bonus program.

The table below shows the bonus payment levels based on the level of achievement of the corporate performance goals under our 2023 cash bonus program, with payments for performance between such payment levels determined based on linear interpolation.

(1)

Adjusted EBITDA is a non-GAAP financial measure. For a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to GAAP net loss, see the section titled "Key Metrics and Non-GAAP Financial Measures" included in our Annual Report on Form 10-K for fiscal year 2023.

(2)

Net clinician growth is measured based on the number of new clinicians added to the Company during 2023.

(3)

Patient satisfaction is measured based on patient Net Promoter Scores.

The target amount of each named executive officer's annual cash bonus is set by the compensation committee as a percentage of his base salary. The target amount for each of Mr. Burdick, Mr. Bourdon, Mr. Qureshi, Mr. Pantaleoni, and Mr. Pardo was initially established in connection with their hire based on internal pay equity considerations and each named executive officer's skill set, experience, role and responsibilities. Target annual bonuses are subject to annual review by our Board of Directors or the compensation committee and are adjusted from time to time based on these considerations, as well as peer group and other market data, as described above.

In 2023, the compensation committee increased Mr. Burdick's target annual bonus percentage from 100% to 150% of his base salary as described above, and did not adjust the target bonus percentages for any of the other named executive officers.

The target annual bonus percentage for each of our named executive officers for 2023 is listed in the table below:

The actual amount earned by each named executive officer under our 2023 annual cash bonus program was determined by the compensation committee in early 2024 based on the level of achievement of the performance goals under this program. Based on 2023 Company performance, Mr. Burdick earned a bonus of $945,000 for fiscal year 2023. However, the Board of Directors, at the request of Mr. Burdick, elected to reduce this amount to $770,000 in order to support employee recognition and inclusion activities. Otherwise, neither the compensation committee nor the Board of Directors exercised any discretion to adjust, positively or negatively, the amount of any named executive officer’s annual bonus determined in accordance with the foregoing formula.

Actual achievement of the 2023 performance goals was as follows:

Based on the Company's achievement of the performance goals set forth above, and the adjustment for Mr. Burdick as described above, payment under the annual bonus program for each of our named executive officers for 2023 was as follows:

Long-term Equity Incentive Awards

Our Board of Directors and the compensation committee believe that in order to appropriately incentivize our executives to create shareholder value, a significant portion of our named executive officers' compensation should be in the form of equity-based compensation. Our long-term incentive program is designed to promote stock ownership by our senior management, tie compensation realized to stock price performance and encourage retention of key executives. Our long-term incentive program is a key tool in aligning executive pay with value creation on behalf of shareholders.

2023 Grants of Time- and Performance-Based RSU Awards

Our 2023 long-term equity incentive program was comprised of two components: time-based RSUs and performance-based RSUs. In 2023, our Board of Directors granted to each of our named executive officers time-based RSUs and performance-based RSUs. For each of Messrs. Burdick, Bourdon, and Qureshi, approximately 70% of the total value of 2023 equity awards was allocated to performance-based RSUs (at target level of performance) and approximately 30% was allocated to time-based RSUs (excluding, for Mr. Burdick, the one-time additional award of RSUs described below). For all of our other named executive officers, approximately 50% of the total value of 2023 equity awards was allocated to each of performance-based RSUs (at target level performance) and time-based RSUs.

In addition to the 2023 annual equity awards granted to all of our named executive officers, on March 6, 2023, Mr. Burdick was granted a one-time additional award of 1,816,239 time-based RSUs that vest over a five-year period with 50% of the RSUs vesting on the third anniversary of the grant date and 25% of the RSUs vesting on each of the fourth and fifth anniversaries of the grant date, in each case, generally subject to continued service through the vesting date. The compensation committee determined to grant Mr. Burdick this one-time award because based on its review of the value of his outstanding equity, which had declined primarily, in the compensation committee's view, as a result of performance that occurred before his commencement of employment.

In March 2023, each of our named executive officers was granted time-based and performance-based RSUs, as follows:

(1)

Represents the one-time time-based RSU award granted to Mr. Burdick in 2023, as described above.

The time-based RSUs (other than Mr. Burdick's one-time award described above) vest as to 25% of the RSUs on each of the first four anniversaries of March 6, 2023, generally subject to continued service through the vesting date.

The performance-based RSUs granted in 2023 are earned based on the achievement of pre-established revenue targets (up to 50%) and pre-established Adjusted EBITDA targets (up to 50%) for each of 2023, 2024, and 2025 (1/3 each year) and vest on the date the achievement of such targets is determined by our Board of Directors or compensation committee, in each case, generally subject to continued service through such vesting date. The number of performance-based RSUs that vest with respect to each one-year performance period is determined based on the level at which the applicable target is achieved and can range from 0% to 100% of the RSUs subject to each portion of the award, with no interpolation for performance between threshold and target levels. The revenue and Adjusted EBITDA targets were not established for the 2024 and 2025 performance periods prior to December 31, 2023 and, as a result, the shares subject to such portions of the performance-based RSU awards were not considered to be granted during 2023 from an accounting perspective and are therefore not included in the Summary Compensation Table, the Grants of Plan-Based Awards Table or the Outstanding Equity Awards at Fiscal Year-end Table. To the extent earned based on performance, the 2023 portion of the performance-based RSUs granted in 2023 vested in the first quarter of 2024 upon the compensation committee’s determination of such performance. The following table sets forth (1) the revenue and Adjusted EBITDA goals for the 2023 performance period for performance-based RSUs granted in 2023, (2) our actual revenue and Adjusted EBITDA for the performance period ending December 31, 2023, and (3) the percentage of performance-based RSUs granted in 2023 eligible to vest based on 2023 performance that were earned based on such performance:

• Adjusted EBITDA is a non-GAAP financial measure. For a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to GAAP net loss, see the section titled "Key Metrics and Non-GAAP Financial Measures" included in our Annual Report on Form 10-K for fiscal year 2023.

2022 Grants of Performance-Based RSU Awards

Each of Mr. Qureshi, Mr. Pantaleoni, and Mr. Pardo also held performance-based RSUs granted in 2022 that were eligible to vest based on revenue and Adjusted EBITDA during the 2023 performance period. The 2023 performance period revenue and Adjusted EBITDA targets were established during 2023 and, as a result, the shares subject to the 2023 portion of the performance-based RSU awards granted in 2022 were considered to be granted during 2023 from an accounting perspective and are therefore included in the Summary Compensation Table and the Grants of Plan-Based Awards Table for 2023. The performance metrics for the 2023 performance period were revenue (50%) and Adjusted EBITDA (50%). To the extent earned based on performance, the 2023 portion of the performance-based RSUs granted in 2022 vested in the first quarter of 2024 upon the compensation committee’s determination of such performance. The table below sets forth (1) revenue goals and Adjusted EBITDA goals for the 2023 performance period for performance-based RSUs granted in 2022, (2) our actual revenue and Adjusted EBITDA for the performance period ending December 31, 2023, and (3) the percentage of performance-based RSUs granted in 2022 eligible to vest based on 2023 performance that were earned based on such performance:

• Adjusted EBITDA is a non-GAAP financial measure. For a discussion of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to GAAP net loss, see the section titled "Key Metrics and Non-GAAP Financial Measures" included in our Annual Report on Form 10-K for fiscal year 2023.

2023 Performance Results for Performance-Based Restricted Stock

Each of Mr. Qureshi, Mr. Pantaleoni, and Mr. Pardo also holds shares of restricted stock received in connection with our initial public offering in respect of their pre-initial public offering equity. Certain of these shares of restricted stock are eligible to vest based on our average trading stock price on specified measurement dates (or alternatively based on TPG's return on investment), generally subject to the named executive officer’s continued service with us through the applicable vesting date. On June 30, 2023, one-third of the original number of performance-based shares of restricted stock held by each of Mr. Qureshi, Mr. Pantaleoni, and Mr. Pardo vested based on our average trading stock price.

Employee and Retirement Benefits

We currently provide broad-based health and welfare benefits that are available to our full-time employees, including our named executive officers, including health, life, vision, and dental insurance. In addition, we maintain a 401(k) retirement plan for our employees. The 401(k) plan also provides for matching employer contributions. Other than the 401(k) plan, we do not provide any qualified or non-qualified retirement or deferred compensation benefits to our employees, including our named executive officers.