AMN HEALTHCARE SERVICES INC

​

Principal Components of our Compensation Program

In line with our core value of continuous improvement, we (1) listen to our shareholders, (2) review the latest trends in executive compensation practices, (3) evaluate whether shareholders or proxy advisory services view certain pay practices with disfavor and (4) review our pay practices to ensure that we have designed and implemented compensation programs that we believe will create value for our shareholders that attract, incentivize, and retain executives.

PRINCIPAL COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

•

Base salary,

​

•

Short-term or annual performance awards in the form of cash bonuses, and

​

•

Long-term incentive awards in the form of RSUs and PRSUs.

​

We also provide:

•

benefits generally available to other employees, including a non-qualified deferred compensation plan,

​

•

severance agreements, and

​

•

reimbursement for each named executive officer up to $25,000 for certain financial, estate planning and personal health and wellness expenses.

​

​

Base salary serves as the first principal component of our executive compensation program. In setting base salaries, the Talent and Compensation Committee considers several factors.

FACTORS CONSIDERED BY THE TALENT AND COMPENSATION COMMITTEE IN SETTING BASE SALARIES

•

The salaries of similarly situated executives within our peer group and other companies of similar revenue size and market capitalization,

​

•

Our operational and financial performance,

​

•

Individual performance, skills, knowledge, tenure, experience, and responsibilities, and

​

•

The recommendations of our CEO for our other named executive officers.

​

​

We manage salary changes to fall within our annual budget. We evaluate our operational and financial performance against our annual strategic objectives and our annual operating plan. We evaluate our stock performance against our executive compensation peer group and the Russell 2000 Index. Our CEO recommendations are particularly helpful for the Talent and Compensation Committee to evaluate the other executive officers’ performance, knowledge, skills, experience and responsibilities.

Annual Cash Performance Bonus

Annual cash performance bonus opportunities serve as the second principal component of our executive compensation program and are designed to incentivize and reward performance. The Company’s Bonus Plan is the mechanism by which the Talent and Compensation Committee provides cash bonus opportunities as a strong incentive for our executive officers to achieve annual financial targets that support our strategic objectives and individual leadership goals that support non-financial objectives discussed below. Although certain details of the Bonus Plan may change from year to year, tying consolidated adjusted EBITDA to our annual operating plan remains consistent. We refer to this financial metric of the Bonus Plan as the Financial Component. The Talent and Compensation Committee sets threshold, “target” ​(i.e., 100% payout) and maximum amounts for bonuses and a weight for each metric that corresponds to the level of achievement required to trigger a threshold, target, or maximum bonus for the named executive officer under such metric. The threshold level for the metric starts at a minimum performance level (i.e., 85% of targeted consolidated adjusted EBITDA). This year the Talent and Compensation Committee eliminated revenue as a metric and tied 100% of the financial component to Adjusted EBITDA to focus the team on driving profitability in a contracting market. The maximum bonus requires a performance level of 115% of the target amount. We have typically used incremental hurdles (usually 1% increments for adjusted EBITDA) of performance between the threshold level and the maximum level that increase the amount of bonus that can be earned on a straight-line basis depending on the hurdle ultimately achieved. The leadership component of the bonuses, which we refer to as the Leadership Component in this CD&A, has been based on non-financial factors, such as performance relative to direct competition, leadership, achievement of strategic objectives, and effective leadership in line with our customer’s goals, business objectives and our core values.

In setting each named executive officer’s target bonus, the Talent and Compensation Committee evaluates benchmarking data for comparable positions generally and within our executive compensation peer group, the recommendations of our CEO (except with respect to her target bonus), individual performance, knowledge, experience and responsibilities.