UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

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 under 14a-12 oliciting Material under 14a-12

 

AMEDISYS, INC.

(Name of Registrant as Specified in its Charter)

(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

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3854 American Way, Suite A

Baton Rouge, Louisiana 70816

(225) 292-2031 or (800) 467-2662

e-mail: investor@amedisys.com

April 24, 2020

Dear Fellow Stockholder:

You are cordially invited to our 2020 Annual Meeting of Stockholders on Tuesday, June 9, 2020 at 10:00 a.m., Central Daylight Saving Time, at our executive office, 209 10th Ave. S., Suite 512, Nashville, Tennessee 37203. We are closely monitoring the developments regarding the coronavirus (COVID-19). Because our Annual Meeting is not being held until June 9, we plan to hold our Annual Meeting in person as we have in the past. We will comply with all federal, state, and local requirements that may be in effect at the time of the Annual Meeting and will take such other measures that we believe are appropriate at that time in order to make it as safe as possible for our stockholders who wish to attend the Annual Meeting in person. In addition, we may determine to adjourn or postpone the Annual Meeting to a later date or hold a virtual meeting. We will inform our stockholders of any changes to the date, time or location of the Annual Meeting by issuing a press release announcing the new information.

We have elected to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules again this year. We believe that providing our proxy materials over the Internet increases the ability of our stockholders to connect with the information they need, while reducing the environmental impact of the Annual Meeting and our costs associated with the physical printing and mailing of proxy materials.

It is important that your shares be represented at the Annual Meeting. We hope you will come to the Annual Meeting in person, but whether you do, and regardless of the number of shares you own, please vote your shares by (i) Internet, (ii) telephone, or (iii) mail in order to ensure your representation at the meeting.

Matters to be covered at the meeting are explained in detail in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.

Amedisys is a leading health care at home company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 2,600 hospitals and 67,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. With more than 21,000 employees in 480 care centers within 38 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 415,000 patients and clients in need every year.

I look forward to sharing our strategic plans for 2020 with you during our Annual Meeting.

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

Date:		Tuesday, June 9, 2020
Time:		10:00 a.m., Central Daylight Saving Time
Place:		Amedisys, Inc. Executive Office 209 10th Ave. S., Suite 512 Nashville, Tennessee 37203

We are closely monitoring the developments regarding the coronavirus (COVID-19). Because the meeting is not being held until June 9, we plan to hold the meeting in person. We will comply with all federal, state, and local requirements that may be in effect at the time of the meeting and will take such other measures that we believe are appropriate at that time in order to make it as safe as possible for our stockholders who wish to attend the meeting in person. In addition, we may determine to adjourn or postpone the Annual Meeting to a later date or hold a virtual meeting. We will inform our stockholders of any changes to the date, time or location of the Annual Meeting by issuing a press release announcing the new information.

Proposals:

 

1.

To elect the eight director nominees identified in the accompanying Proxy Statement to the Board of Directors of Amedisys, Inc. (the “Company”), each to serve a one-year term expiring at the latter of the 2021 Annual Meeting of the Company’s stockholders or upon his or her successor being elected and qualified.

 

2.	To ratify the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2020.

 

3.	To approve, on an advisory (non-binding) basis, the compensation paid to the Company’s Named Executive Officers (“say on pay” vote).

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

We are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders instead of paper copies of our Proxy Statement and 2019 Annual Report. The Notice contains instructions on how to access those documents over the Internet. The Notice also contains instructions on how stockholders can receive a paper copy of our proxy materials, including the Proxy Statement, our 2019 Annual Report and proxy card.

 

Who can vote:		Stockholders of record at the close of business on April 13, 2020 (the “Record Date”).
How you can vote:		You may vote your proxy by (i) accessing the Internet website specified on the Notice, (ii) calling the toll-free number specified on your proxy card, if you requested printed copies of the proxy materials; or (iii) marking, signing and returning the enclosed proxy card in the envelope provided, if you requested printed copies of the proxy materials. Stockholders who received their proxy card through an intermediary (such as a broker or bank) must deliver it in accordance with the instructions given by such intermediary.
Who may attend:		Any stockholder of record as of the Record Date may attend the meeting. Upon arrival at the meeting, you will be required to register and present government-issued photo identification, such as your driver’s license, state identification card or passport. If your shares are registered in the name of a bank, brokerage firm or other nominee and you plan to attend the meeting, bring your statement of account showing evidence of ownership as of the Record Date.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDER MEETING TO BE HELD ON JUNE 9, 2020:

The Notice of Internet Availability of Proxy Materials, Notice of Meeting, Proxy Statement and 2019 Annual Report to Stockholders are available free of charge at www.proxyvote.com

TABLE OF CONTENTS

 

SOME QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT AND THE ANNUAL MEETING			1
EXECUTIVE OFFICERS			7
PROPOSAL 1—ELECTION OF DIRECTORS			9
CORPORATE GOVERNANCE			14
CODE OF ETHICAL BUSINESS CONDUCT			20
CORPORATE GOVERNANCE GUIDELINES AND REVIEW AND CONSIDERATION OF CORPORATE GOVERNANCE PRACTICES			21
PROPOSAL 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS			22
REPORT OF THE AUDIT COMMITTEE			23
FEES PAID TO AUDITORS			24
STOCK OWNERSHIP			25
EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 2019			26
PROPOSAL 3—ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS (“SAY ON PAY” VOTE)			27
COMPENSATION DISCUSSION AND ANALYSIS			29
REPORT OF THE COMPENSATION COMMITTEE			48
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			48
2019 SUMMARY COMPENSATION TABLE			50
2019 GRANTS OF PLAN BASED AWARDS			51
OUTSTANDING EQUITY AWARDS AT 2019 FISCAL YEAR-END			54
VESTING SCHEDULE – OUTSTANDING EQUITY AWARDS			55
2019 OPTION EXERCISES AND STOCK VESTED			57
NAMED EXECUTIVE OFFICER EMPLOYMENT AGREEMENT PROVISIONS: POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			58
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			62
DIRECTOR COMPENSATION			64
CERTAIN TRANSACTIONS			66
OTHER MATTERS			67
APPENDIX A			A-1

 

(i)

3854 American Way, Suite A

Baton Rouge, Louisiana 70816

 

 

PROXY STATEMENT

Annual Meeting of Stockholders of the Company to be held on June 9, 2020

SOME QUESTIONS YOU MAY HAVE REGARDING THIS PROXY STATEMENT AND THE ANNUAL MEETING

 

Q:	What is this document?

 

A:

This document is the Proxy Statement of Amedisys, Inc. that is being made available to stockholders on the Internet, or sent to stockholders upon request, in connection with our Annual Meeting of stockholders to be held on Tuesday, June 9, 2020 at 10:00 a.m. Central Daylight Saving Time at our executive office, 209 10th Ave. S., Suite 512, Nashville, Tennessee 37203 (the “Meeting”). We are closely monitoring the developments regarding the coronavirus (COVID-19). Because the Meeting is not being held until June 9, we plan to hold the Meeting in person as we have in the past. We will comply with all federal, state, and local requirements that may be in effect at the time of the Meeting and will take such other measures that we believe are appropriate at that time in order to make it as safe as possible for our stockholders who wish to attend the Meeting in person. In addition, we may determine to adjourn or postpone the Annual Meeting to a later date or hold a virtual meeting. We will inform our stockholders of any changes to the date, time or location of the Annual Meeting by issuing a press release announcing the new information.

A proxy card is also being furnished with this document, if you requested printed copies of the proxy materials.

We have tried to make this document simple and easy to understand. The Securities and Exchange Commission (“SEC”) encourages companies to use “plain English,” and we will always try to communicate with you clearly and effectively. We will refer to Amedisys, Inc. throughout as “we,” “us,” the “Company” or “Amedisys.”

 

Q:	Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

 

A:

Pursuant to rules adopted by the SEC, the Company will use the Internet as the primary means of furnishing proxy materials to stockholders again this year. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to the Company’s stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the complete proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. The Company encourages stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings and the cost to the Company associated with the physical printing and mailing of materials.

 

Q:	Why am I receiving these materials?

 

A:

You are receiving this document because you were one of our stockholders on April 13, 2020, the record date for the Meeting. We are soliciting your proxy (i.e., your permission) to vote your shares of Amedisys stock upon certain matters at the Meeting. We are required by law to convene an annual meeting of our stockholders at which directors are elected. Because our shares are widely held, it would be impractical, if not impossible, for our stockholders to meet physically in sufficient numbers to hold a meeting. Accordingly, proxies are solicited from our stockholders. We began mailing the Notice on or about April 24, 2020.

 

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Q:	Who may vote at the Meeting?

 

A:

We have fixed the close of business on April 13, 2020, as the record date for determining who is entitled to vote at the Meeting. As of that date, there were 32,370,345 shares of our common stock outstanding and entitled to be voted at the Meeting. You may cast one vote for each share of common stock held by you on April 13, 2020 on all matters presented at the Meeting.

 

Q:	What proposals will be voted on at the Meeting?

 

A:	There are three proposals to be considered and voted on at the Meeting:

 

(1)

To elect the eight director nominees identified in this Proxy Statement to our Board of Directors, each to serve a one-year term expiring at the latter of the 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”) or upon his or her successor being elected and qualified;

 

(2)

To ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2020; and

 

(3)

To approve, on an advisory (non-binding) basis, the compensation paid to our Named Executive Officers (“say on pay” vote).

We will also consider other business that properly comes before the Meeting in accordance with Delaware law and our Bylaws.

 

Q:	What are my choices when voting on the election of the eight director nominees identified in this Proxy Statement, and what vote is needed to elect directors to the Board of Directors?

 

A:	In regards to the vote on the election of the eight director nominees identified in this Proxy Statement to serve until the 2021 Annual Meeting or upon his or her successor being elected and qualified, stockholders may:

 

•

vote in favor of all director nominees;

 

•

vote in favor of specific director nominees; or

 

•

vote to withhold authority to vote for all director nominees.

Directors are elected by a plurality of the votes cast at the Meeting. As a result, the eight directors receiving the highest number of “FOR” votes will be elected as directors. The Company’s Corporate Governance Guidelines, however, provide that a director candidate must tender his or her resignation if he or she receives a greater number of “withhold” votes than “for” votes. The Nominating and Corporate Governance Committee would then make a recommendation to the Board of Directors on whether to accept or reject the resignation or whether other action should be taken. For additional information, please see the discussion beginning on page 9 of this Proxy Statement.

 

Q:	What are my choices when voting on the ratification of the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2020, and what vote is needed to ratify their appointment?

 

A:	In regards to the vote on the proposal to ratify the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2020, stockholders may:

 

•

vote in favor of the ratification;

 

•

vote against the ratification; or

 

•

abstain from voting on the ratification.

The affirmative vote of a majority of the shares represented at the Meeting and entitled to vote is required to approve the proposal to ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2020. For additional information, please see the discussion beginning on page 22 of this Proxy Statement.

 

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Q:	What are my choices when voting on the advisory (non-binding) proposal regarding the compensation paid to the Company’s Named Executive Officers (“say-on-pay”), and what vote is needed to approve the advisory say-on-pay proposal?

 

A:	In regards to the advisory (non-binding) proposal on the compensation paid to our Named Executive Officers, stockholders may:

 

•

vote in favor of the advisory say-on-pay proposal;

 

•

vote against the advisory say-on-pay proposal; or

 

•

abstain from voting on the advisory say-on-pay proposal.

The affirmative vote of a majority of the shares represented at the Meeting and entitled to vote is required to approve, on an advisory basis, the say on pay vote. As an advisory vote, this proposal is not binding upon us. However, the Compensation Committee of our Board of Directors, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our stockholders and will consider the outcome of the vote when making future compensation decisions. For additional information, please see the discussion beginning on page 27 of this Proxy Statement.

 

Q:	How does the Company’s Board of Directors recommend that I vote?

 

A:	Please see the information included in this Proxy Statement relating to the proposals to be considered and voted on at the Meeting. Our Board of Directors unanimously recommends that you vote:

 

•

“FOR” each of the eight nominees to our Board of Directors identified in this Proxy Statement;

 

•

“FOR” the ratification of the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2020; and

 

•

“FOR” the advisory (non-binding) proposal regarding the compensation paid to our Named Executive Officers (“say on pay”).

 

Q:	What information is available on the Internet?

 

A:	A copy of this Proxy Statement and our 2019 Annual Report to Stockholders is available for download free of charge at www.proxyvote.com.

Our Company website address is www.amedisys.com. We use our website as a channel of distribution for important Company information. Important information, including press releases, investor presentations and financial information regarding our Company is routinely posted on and accessible on the Investors subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investors subpage of our website.

In addition, we make available on the Investors subpage of our website (under the link “SEC Filings”) free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the SEC. Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Nominating and Corporate Governance, Quality of Care and Compliance and Ethics Committees of our Board of Directors are also available on the Investors subpage of our website (under the link “Governance”).

Information from this website is not incorporated by reference into this Proxy Statement.

 

Q:	What constitutes a quorum?

 

A:	The presence in person or by proxy of holders of a majority of our common stock outstanding as of the Record Date is needed for a quorum at the Meeting.

 

Q:	What are “broker votes” and “broker non-votes?”

 

A:

On certain “routine” matters, brokerage firms have discretionary authority under applicable stock exchange rules to vote their customers’ shares if their customers do not provide voting instructions. When a brokerage firm votes its customers’ shares on a routine matter without receiving voting instructions (referred to as a “broker vote”), these shares are counted both for establishing a quorum to conduct business at the Meeting and in determining the number of shares voted “FOR” or “AGAINST” the routine

 

3

matter. For purposes of the Meeting, the proposal to ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending December 31, 2020 is considered a “routine” matter.

Under applicable stock exchange rules: (i) the election of directors and (ii) the advisory (non-binding) vote on the compensation of our Named Executive Officers (“say on pay” vote) are considered “non-routine” matters for which brokerage firms do not have discretionary authority to vote their customers’ shares if their customers did not provide voting instructions. Therefore, for purposes of the Meeting, if you hold your stock through a brokerage account, your brokerage firm may not vote your shares on your behalf on (i) the election of directors and (ii) the advisory (non-binding) vote on the compensation paid to our Named Executive Officers (“say on pay”), without receiving instructions from you. When a brokerage firm does not have the authority to vote its customers’ shares or does not exercise its authority, these situations are referred to as “broker non-votes.” Broker non-votes are only counted for establishing a quorum and will have no effect on the outcome of the vote.

We encourage you to provide instructions to your brokerage firm, bank or other nominee by voting your proxy. This action ensures your shares will be voted at the Meeting on all matters up for consideration.

 

Q:	What if I abstain from voting?

 

A:

You have the option to “ABSTAIN” from voting with respect to (i) the ratification of the appointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2020 and (ii) the advisory (non-binding) vote on the compensation paid to our Named Executive Officers (“say on pay”). Abstentions with respect to these proposals are counted for purposes of establishing a quorum. If a quorum is present, abstentions will have the same effect as a vote against the proposal.

 

Q:	How will my shares be voted if I return my proxy card or vote via telephone or Internet? What if I return my proxy card but do not provide voting instructions or complete the telephone or Internet voting procedures but do not specify how I want to vote my shares?

 

A:

Our Board of Directors has named Paul B. Kusserow, our President, Chief Executive Officer and Chairman of the Board, and Scott G. Ginn, our Chief Financial Officer, as official proxy holders. They will vote all proxies, or record an abstention or withholding, in accordance with the directions on the proxy.

All shares represented by properly executed proxies, unless previously revoked, will be voted at the Meeting as you direct.

IF YOU SIGN AND RETURN YOUR PROXY CARD BUT GIVE NO DIRECTION OR COMPLETE THE TELEPHONE OR INTERNET VOTING PROCEDURES BUT DO NOT SPECIFY HOW YOU WANT TO VOTE YOUR SHARES, THE SHARES WILL BE VOTED “FOR” THE ELECTION OF THE PERSONS NAMED HEREIN AS DIRECTORS; “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020; AND “FOR” THE PROPOSAL REGARDING AN ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS (“SAY ON PAY”).

 

Q:	How do I vote?

 

A:

If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a stockholder of record with respect to those shares. If you are a record holder, the Notice is being sent to you directly by Broadridge Financial Solutions, Inc. Please carefully consider the information contained in this Proxy Statement. Whether or not you plan to attend the Meeting, please vote by (i) accessing the Internet website specified on the Notice, (ii) calling the toll-free number specified on your proxy card, if you requested printed copies of the proxy materials or (iii) marking, signing and returning your proxy card promptly, if you requested printed copies of the proxy materials, so that we can be assured of having a quorum present at the Meeting and so that your shares may be voted in accordance with your wishes, even if you later decide to attend the Meeting. If you are a stockholder of record, the method you use to vote will not limit your right to vote at the Meeting if you decide to attend in person. Written ballots will be passed out to any stockholder of record who wants to vote at the Meeting. Please follow the directions on your proxy card carefully.

If, like most of our stockholders, you hold your shares in street name through a broker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of those shares, and the Notice is being forwarded to you by your broker, bank or other nominee, together with a voting instruction card. To vote at the Meeting, beneficial owners will need to contact the broker, bank or other nominee that holds their shares to obtain a “legal proxy” to bring to the Meeting.

 

4

If you hold shares in the name of a broker, bank or other nominee you may be able to vote those shares by Internet or telephone depending on the voting procedures used by your broker, bank or other nominee, as explained below under the question “How do I vote if my shares are held in “street name” by a broker, bank or other nominee?”

No cumulative voting rights are authorized, and dissenters’ rights and rights of appraisal are not applicable to the matters being voted upon.

 

Q:	How do I vote if my shares are held in “street name” by a broker, bank or other nominee?

 

A:

If your shares are held by a broker, bank or other nominee (this is called “street name”), your broker, bank or other nominee will send you instructions for voting those shares. Many (but not all) brokerage firms, banks and other nominees participate in a program provided through Broadridge Investor Communication Solutions that offers Internet and telephone voting options.

 

Q:	May I revoke my proxy after I have delivered my proxy?

 

A:

You may revoke your proxy at any time before the polls close by submitting a subsequent proxy with a later date by using the Internet, by telephone or by mail or by sending our Corporate Secretary a written revocation. Your proxy will also be considered revoked if you attend the Meeting and vote in person. If your shares are held in “street name” by a broker, bank or other nominee, you must contact your broker, bank or other nominee to change your vote or obtain a proxy to vote your shares if you wish to cast your vote in person at the Meeting.

 

Q:	Who is soliciting my vote?

 

A:	In this Proxy Statement, our Board of Directors is soliciting your vote for matters being submitted for stockholder approval at the Meeting.

 

Q:	Who will bear the cost for soliciting votes for the Meeting?

 

A:

We will bear the cost of soliciting proxies. In addition to the use of mail, our directors, officers and non-officer employees may solicit proxies in person or by telephone or other means. These persons will not be compensated for the solicitation but may be reimbursed for out-of-pocket expenses. We have also made arrangements with brokerage firms and other custodians, nominees and fiduciaries to forward this material to the beneficial owners of our common stock, and we will reimburse them for their reasonable out-of-pocket expenses.

 

Q:	Who will count the votes?

 

A:	We have hired a third party, Broadridge Financial Solutions, Inc., to judge voting, be responsible for determining whether or not a quorum is present and tabulate votes cast by proxy at the Meeting.

 

Q:	Where can I find voting results of the Meeting?

 

A:

We will announce preliminary voting results at the Meeting and publish final results on a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Meeting (a copy of which will be available on the “Investors” subpage of our website, www.amedisys.com, under the link “SEC Filings”). If our final voting results are not available within four business days after the Meeting, we will file a Current Report on Form 8-K reporting the preliminary voting results and subsequently file the final voting results in an amendment to the Current Report on Form 8-K within four business days after the final voting results are known to us.

 

Q:	May I propose actions for consideration at the next Annual Meeting of Stockholders or nominate individuals to serve as directors?

 

A:	You may submit proposals for consideration at future stockholder meetings, including director nominations. Please see “Other Matters” for more details.

 

Q:	Whom should I contact with questions about the Meeting?

 

A:	If you have any questions about this Proxy Statement or the Meeting, please contact Jennifer Guckert, our Senior Vice President, Deputy General Counsel and Corporate Secretary, at 3854 American Way, Suite A, Baton Rouge, Louisiana 70816 or by telephone at (225) 292-2031 or (800) 467-2662.

 

5

Q:	What if I have more than one account?

 

A:	Please vote proxies for all accounts to ensure that all your shares are voted. You may consolidate multiple accounts through our transfer agent, American Stock Transfer & Trust Company, LLC, online at www.amstock.com or by calling (800) 937-5449.

 

Q:	Will a list of stockholders entitled to vote at the Meeting be available?

 

A:

In accordance with Delaware law, a list of stockholders entitled to vote at the Meeting will be available at our executive office in Nashville, Tennessee on June 9, 2020, where the Meeting will be located, and will be accessible for ten days prior to the Meeting between the hours of 9:00 a.m. and 5:00 p.m. at our corporate headquarters in Baton Rouge, Louisiana.

 

6

EXECUTIVE OFFICERS

The following table presents information with respect to our executive officers as of April 24, 2020:

 

Name		Age						Title
Denise Bohnert		42						Chief Compliance Officer
Sharon Brunecz		53						Chief Human Resources Officer
Christopher T. Gerard		53						Chief Operating Officer
Scott G. Ginn		51						Chief Financial Officer
David L. Kemmerly		57						Chief Legal and Government Affairs Officer
Paul B. Kusserow		58						President, Chief Executive Officer and Chairman of the Board
Michael P. North		55						Chief Information Officer

Denise Bohnert is our Chief Compliance Officer (since September 2019). She previously served as our Deputy Compliance Officer from January 2017 to August 31, 2019. Ms. Bohnert is responsible for managing and overseeing the compliance program, which is designed to promote ethical practices and compliance with state and federal healthcare laws and regulations. Ms. Bohnert also identifies potential compliance vulnerability and risks within the organization. Ms. Bohnert has over 15 years’ experience in healthcare and compliance. Before joining Amedisys in January 2017, Ms. Bohnert served as the Compliance Officer for Signature Healthcare in Louisville, Kentucky from January 2015 to December 2016, a skilled nursing facility and home health company. Ms. Bohnert was responsible for overseeing the compliance program which included the creation of regulatory policies and procedures, a compliance investigation structure and a staff of compliance professionals. From 2003 to December 2014, Ms. Bohnert worked at Kindred Healthcare in a variety of compliance and regulatory functions including Division Vice President of Risk and Compliance, Director of HIPAA Compliance (Privacy) and Risk Manager. Ms. Bohnert is both a registered nurse and licensed attorney earning her Bachelor of Science in Nursing from Indiana State University (Magna Cum Laude) and her Juris Doctor from Indiana University - Indianapolis. Ms. Bohnert also holds a Certification in Healthcare Compliance (CHC).

Sharon Brunecz is our Chief Human Resources Officer (since June 2018). With more than 20 years of experience, Ms. Brunecz is an expert in leading human capital strategies that drive business outcomes including talent management, total rewards, organizational and leadership development, employee engagement, talent acquisition, metrics and analytics, and merger and acquisitions. Prior to joining Amedisys, Ms. Brunecz served as Chief Human Resources Officer from September 2015 to June 2018 for US Acute Care Solutions (USACS), the nation’s leading physician-owned provider of integrated acute care services offering emergency, hospitalist and observation medicine to hospital partners. In this role, she had overall accountability for Human Resources, Corporate Communications and Marketing functions. Prior to USACS, Ms. Brunecz held several HR leadership positions with PNC Financial Services Group, a diversified financial services company, from 1998 to 2015.

Christopher T. Gerard is our Chief Operating Officer (since January 2017). He previously served as President for the South Central Region of Kindred at Home, a division of Kindred Healthcare, Inc., a healthcare services company, from 2015 to 2016. Prior to his role as Regional President, Mr. Gerard was the Chief Operating Officer at Kindred at Home from 2014 to 2015. Mr. Gerard joined Kindred in 2012 as Regional Vice President when Kindred acquired IntegraCare Holdings, Inc., a home health, hospice and community care agency based in Grapevine, Texas. Mr. Gerard was an original founder of IntegraCare in 1998 and served as its President and Chief Executive Officer from 2007 to 2012.

Scott G. Ginn is our Chief Financial Officer (since October 2017). He previously served as Chief Accounting Officer from February 2017 to October 2017, Senior Vice President of Finance and Accounting from October 2015 to February 2017 and Senior Vice President of Accounting and Controller from April 2007 to October 2015. Prior to joining the Company, he was a Director at Postlethwaite & Netterville, a professional accounting corporation. Mr. Ginn is a Certified Public Accountant.

David L. Kemmerly is our Chief Legal and Government Affairs Officer (since March 2020). He previously served as General Counsel from October 2015 to March 2020 and Senior Vice President, Government Affairs from March 2015 to March 2020. He previously served as Interim General Counsel from March 30, 2015 to October 30, 2015. Mr. Kemmerly has over 27 years of experience in governmental affairs, with more than 19 years specializing in health care law and public policy. From September 2013 to March 2015, he served as Special Counsel at Adams and Reese LLP, a multidisciplinary law firm where he represented diverse health care interests before the state legislature and state agencies. Prior to Adams and Reese, Mr. Kemmerly served as Director of State Public Affairs of Humana, Inc. for six years where he was responsible for legislative and regulatory affairs and outcomes in all 50 states. In this role, he developed and led implementation of successful state legislative and regulatory strategies that helped protect the business interests of one of the nation’s largest health insurers with over 13 million medical enrollees. Mr. Kemmerly has extensive experience in state and national government relations, including serving as Associate Director of the Department of Government Affairs for the Louisiana State Medical Society where he lobbied state legislators, state regulatory agencies, and the U.S. Congress on issues impacting physicians and the practice of medicine. He also served as an attorney for the Louisiana State Senate, a political consultant for DLK

 

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Consulting Group, and on the staffs of a Governor and Member of Congress. Mr. Kemmerly is a member of the Board of the Amedisys Foundation (since March 2016).

Paul B. Kusserow is our President and Chief Executive Officer (since December 2014) and our Chairman of the Board (since October 2019) and has been a member of our Board of Directors since joining our Company in December 2014. Additional information regarding Mr. Kusserow is provided below under “Proposal 1—Election of Directors—Nominees.”

Michael P. North is our Chief Information Officer (since November 2016) and previously served as our Senior Vice President of Operations (from May 11, 2015 to November 3, 2016). Mr. North, a seasoned IT executive, led Amedisys’ successful conversion to the Homecare Homebase platform and plays a significant role in the integration of our acquisitions. Before Amedisys, he served as the Director of Corporate Development Integrations for Humana from May 2006 to May 2015. His senior level responsibilities included all IT and operational integrations for acquisitions. Prior to that, Mr. North served as the Director of IT Support with Kindred Healthcare from October 1999 to May 2006.

 

8

PROPOSAL 1—ELECTION OF DIRECTORS

Nominees

Our Bylaws provide that the number of directors shall not be less than three nor more than 15 persons, the exact number thereof to be determined from time to time by resolution of our Board of Directors. Our Board of Directors has currently set the number of directors at 10. In October 2019, Donald A. Washburn notified our Board of Directors that he intended to retire as a director at the end of his term at the 2020 Annual Meeting. In addition, Jake L. Netterville is not standing for re-election at the Meeting, in accordance with the terms of our mandatory retirement age policy for directors as set forth in our Corporate Governance Guidelines. Accordingly, our Board of Directors by resolution has set the number of directors at eight, effective as of the date of the Meeting. The Board has nominated the eight persons named below for election at the Meeting.

All of the nominees currently serve as directors. Each person elected will serve until the next Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Although our Board of Directors does not contemplate that any of the nominees will be unable to serve, if such a situation arises before the Meeting, the persons named as official proxy holders in the enclosed Proxy will vote for the election of such other person(s) as may be nominated by our Board of Directors.

Our Board of Directors maintains a Nominating and Corporate Governance Committee to recommend to our Board of Directors all director nominees. Stockholders who wish to recommend a person for consideration as a director nominee should follow the procedures described below under the heading “Stockholder Recommendation of Nominees.” Our Board of Directors selected the nominees for election at the Meeting upon the unanimous recommendation of the members of the Nominating and Corporate Governance Committee.

Board Member Qualifications; Diversity

Nominees for election to our Board of Directors must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to our stockholders, provide effective oversight of our management and monitor our adherence to principles of sound corporate governance. Specifically, as set forth in our Corporate Governance Guidelines, nominees for election to our Board of Directors should possess the highest personal and professional ethics, integrity and values. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment. Directors must develop an understanding of our Company’s business and have a willingness to devote adequate time to carrying out their duties. The Board seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. In identifying candidates for membership on our Board of Directors, the Nominating and Corporate Governance Committee takes into consideration a number of factors, including: (i) relevant career experience, relevant technical skills, industry knowledge and experience and financial expertise; (ii) individual qualifications, including strength of character, mature judgment, familiarity with our business and industry, independence of thought and the ability to work collegially; and (iii) the extent to which the candidate would fulfill a present need on our Board of Directors. For each of the nominees to our Board of Directors, the biographies included in this Proxy Statement highlight the experiences and qualifications that were among the most important to the Nominating and Corporate Governance Committee in concluding that the nominee should serve as a director.

The Nominating and Corporate Governance Committee regularly assesses the appropriate size of our Board of Directors and whether any vacancies on our Board of Directors are expected due to retirement or otherwise and regularly monitors the mix of skills, experience and background of our directors to assure that the Board has the necessary composition to effectively perform its oversight function. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential candidates who may come to the attention of the Nominating and Corporate Governance Committee through current Board members, professional search firms, stockholders or other persons. At this time, our Board of Directors has determined to decrease the size of the Board from 10 directors to eight directors, effective as of the date of the Meeting, instead of filling the vacancies caused by Mr. Washburn’s retirement and Mr. Netterville’s not standing for re-election at the Meeting.

Each candidate brought to the attention of the Nominating and Corporate Governance Committee, regardless of who recommended such candidate and regardless of whether such candidate is recommended by a stockholder, is considered on the basis of the criteria set forth above. The Nominating and Corporate Governance Committee typically evaluates each prospective candidate’s background and qualifications. In addition, one or more of the Nominating and Corporate Governance Committee members or the other Board members interviews each prospective candidate. After completing the evaluation, prospective candidates are recommended to the full Board by the Nominating and Corporate Governance Committee, with the full Board selecting the candidates to be nominated for election by the stockholders or to be appointed by the Board to fill a vacancy.

Biographical information about our nominees for director and the experience, qualifications, attributes and skills considered by our Nominating and Corporate Governance Committee and the Board in determining that the nominee should serve as a director appear below.

 

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Director Nominees—Biographical Information

 

Name		Age		Served as a Director Since
Vickie L. Capps		58		2019
Molly J. Coye, MD		72		2019
Julie D. Klapstein		65		2016
Teresa L. Kline		61		2019
Paul B. Kusserow		58		2014
Richard A. Lechleiter		61		2016
Bruce D. Perkins		66		2015
Jeffrey A. Rideout, MD		58		2016

Vickie L. Capps. Ms. Capps is currently a member of the Senior Advisory Board of Consonance Capital Partners, a healthcare focused private equity firm, and she served on the board of directors of its portfolio company, Enclara Pharmacia, a provider of pharmacy services to the hospice industry prior to its acquisition by Humana in January 2020. She is also a member of the board of directors, the audit committee chair and a member of the nominating and governance committee of each of NuVasive, Inc., a public medical device company, and Otonomy, Inc., a public biopharmaceutical company. Ms. Capps is also a member of the Board of Directors of OmniGuide, Inc., a private medical device company. She previously served as Chief Financial Officer of DJO Global, Inc. from 2002 through 2013 and as a member of the boards of directors of Synthorx, Inc., a public biotechnology company, prior to its acquisition by Sanofi in January 2020, Connecture, Inc. prior to its being taken private by Francisco Partners in April 2018, RF Surgical Systems prior to its acquisition by Medtronic in August 2015 and SenoRx, prior to its acquisition by C. R. Bard, Inc. in July 2010. She is also a member of the board of directors of the San Diego State University Research Foundation. Earlier in her career, Ms. Capps spent 10 years as an audit and accounting professional with Ernst & Young and then served as the chief financial officer of several public and private companies. Ms. Capps earned her bachelor’s degree from San Diego State University, is a California Certified Public Accountant and was recognized as a CFO of the Year honoree by the San Diego Business Journal in 2009 and 2010.

Director Qualifications:

 

•

High Level of Financial Literacy—Ms. Capps is a certified public accountant, a former chief financial officer and has been designated as one of our “Audit Committee Financial Experts” on our Audit Committee.

 

•

Extensive Knowledge of the Healthcare Industry—Ms. Capps has extensive experience in the healthcare industry, having served as chief financial officer of a medical device and service company for 11 years as well as service on numerous public and private company boards of directors in the healthcare industry.

 

•

Public Company Board Experience—Ms. Capps currently serves on two public company boards of directors (other than Amedisys) and previously served on the boards of three other public companies.

Molly J. Coye, MD. Dr. Coye has served as Senior Advisor and Executive in Residence for AVIA, a membership network of healthcare delivery systems that provides strategic and technology selection advice regarding digital health software and devices and is the nation’s leading healthcare innovation network, since 2015. She also served as an Innovation Advisor for Evolent Health from 2018 to 2019. From 2010 to 2015, Dr. Coye was Chief Innovation Officer of the UCLA Health System (comprehensive health care organization). Dr. Coye served on the Board of Directors of Aetna, Inc. from 2005 to 2018, where she was a member of the Executive Committee, the Committee on Investment and Finance, Chair of the Committee on Medical Affairs, and a member of the board of the Aetna Foundation. She previously served as Commissioner of Health for the State of New Jersey, Director of the California State Department of Health Services, Head of the Division of Public Health Practice at the Johns Hopkins School of Hygiene and Public Health, chair of the board of PATH and the American Public Health Association, and on the boards of the American Hospital Association, the American Telemedicine Association, The California Endowment, and the China Medical Board.

Director Qualifications:

 

•

Innovation Expertise—Dr. Coye has extensive senior management and executive experience specialized in innovation in the healthcare industry.

 

•

Extensive Knowledge of the Healthcare Industry—Dr. Coye has 40 years of experience in the healthcare industry.

 

•

Relevant Leadership Experience—Dr. Coye serves as Senior Advisor and Executive in Residence for AVIA and previously served as Chief Innovation Officer of the UCLA Health System, in addition to her roles as Commissioner of Health for the State

 

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of New Jersey, Director of the California State Department of Health Services, and Head of the Division of Public Health Practice at the Johns Hopkins School of Hygiene and Public Health.

Julie D. Klapstein. Ms. Klapstein was the founding Chief Executive Officer of Availity, LLC, one of the nation’s largest health information networks optimizing the automated delivery of critical business and clinical information among healthcare stakeholders. Ms. Klapstein was the Chief Executive Officer and board member of Availity for 11 years. Ms. Klapstein’s 30+ years of experience in the healthcare information technology industry include executive roles at Phycom, Inc. as Chief Executive Officer, Sunquest Information Systems (EVP); SMS’ Turnkey Systems Division (now Siemens Medical Systems) and GTE Health Systems. She currently serves on the board of directors for NextGen Healthcare, Inc., a firm that provides software and services to medical and dental offices, eSolutions, Inc., specializing, in revenue cycle management solutions, and Revecore Technologies, a firm specializing in underpayment and denial for hospitalization. Ms. Klapstein was a past director for two public boards: Annies, Inc. and Standard Register and has been a director for multiple private companies. Ms. Klapstein earned her bachelor’s degree from Portland State University in Portland, Oregon. She is the recipient of multiple awards for top business leadership.

Director Qualifications:

 

•

Extensive Knowledge of the Healthcare Industry—Ms. Klapstein has over 30 years of experience in the healthcare and healthcare technology industries, and has served in executive capacities for multiple healthcare technology companies.

 

•

Relevant Executive/Management Experience—Ms. Klapstein has extensive senior management and executive experience in the healthcare industry.

 

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Public Company Board Experience—Ms. Klapstein has outside board experience on three public company boards of directors (other than Amedisys).

Teresa L. Kline. Ms. Kline is the retired President and Chief Executive Officer of Health Alliance Plan of Michigan (“HAP”) and Executive Vice President of Henry Ford Health System (“HFHS”) where she led a financial & operational turnaround of HAP. HAP is nonprofit health plan and a subsidiary of HFHS, a nonprofit healthcare provider. Ms. Kline’s 35+ years of experience in healthcare include executive roles at Health Care Service Corporation (Senior Vice President and Chief Health Care Management Officer), HealthSouth (Senior Vice President), CHA Health (Chief Executive Officer), United Health Group (Chief Executive Officer of UHC-GA), OnCare (Senior Vice President) and Aetna Health Plans (Regional Vice President). Ms. Kline currently serves on the boards of directors of Intersect ENT, a medical device and specialty pharma company; SaVida Health, an outpatient opioid use disorder treatment provider; LaunchPoint Ventures, LLC, dba Discovery Health, a health payment integrity company; and Presbyterian Health Plan, Inc., a health insurer. Ms. Kline also serves on the boards of the Grand Canyon Conservancy, the official nonprofit partner of the Grand Canyon National Park, and Kalamazoo College. Previously, Ms. Kline served as the Chairman of two private health care technology companies, Medecision and Availity. Ms. Kline earned her bachelor’s degree from Kalamazoo College in Kalamazoo, Michigan and her Master in Public Health degree from the University of Michigan in Ann Arbor, Michigan.

Director Qualifications:

 

•

Extensive Knowledge of the Healthcare Industry—Ms. Kline has over 35 years of experience in the healthcare industry.

 

•

Relevant Executive/Management Experience—Ms. Kline has served as President and Chief Executive Officer of Health Alliance Plan of Michigan and Executive Vice President of Henry Ford Health System in addition to executive roles at Health Care Service Corporation, HealthSouth, CHA Health, United Health Group, OnCare and Aetna Health Plans.

 

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Relevant Governance Experience— Ms. Kline has significant outside board experience, currently serving on one other public company board (other than Amedisys) in addition to three private company boards and two nonprofit boards.

Paul B. Kusserow. Mr. Kusserow is our President and Chief Executive Officer (since December 2014) and Chairman of the Board (since October 2019) and has been a member of our Board of Directors since joining our Company in December 2014. Previously, he was Vice Chairman and President of Alignment Healthcare, Inc., an integrated clinical care and health plan company, from June 2014 until December 2014. From December 2013 until June 2014, Mr. Kusserow served as a consultant for Boston Consulting Group (BCG), where he advised Amedisys on corporate strategy. Before that, he served as Senior Vice President, Chief Strategy, Innovations and Corporate Development Officer of Humana, Inc., a healthcare services and benefits company, from February 2009 through December 2013. Prior to joining Humana, Inc., he was Managing Director and Chief Investment Officer of the Ziegler HealthVest Fund, a venture capital fund focused on early to mid-stage investments in healthcare services, healthcare technology and wellness; a co-founder and Managing Director of San Ysidro Capital Partners, L.L.C., an investment advisory and management firm specializing in healthcare services and technology; and Managing Partner of Roaring Mountain, L.L.C., a strategy consulting and investment management firm with large clients in healthcare services and technology. Mr. Kusserow began his healthcare career with Tenet Healthcare Corporation, one of the nation’s largest investor-owned healthcare service companies, where he spent seven years, the last

 

11

four as Senior Vice President, Strategy and Tenet Ventures. He began his career as a management consultant at McKinsey & Company. He has served on many corporate and advisory boards, and currently serves on the Boards of Directors of Oak Street Health, Picwell, Inc., and Matrix Medical Network. He previously served on the Board of Directors of Connecture, Inc., New Century Health, Inc., AxelaCare Health Solutions, Inc. and as the Chairman of the Board of Directors of Availity Inc. and Healthsense, Inc.

Director Qualifications:

 

•

Extensive Knowledge of our Company’s Business—Mr. Kusserow has served as our President and Chief Executive Officer since December 2014 and as our Chairman of the Board since October 2019.

 

•

Extensive Knowledge of the Healthcare Industry—Mr. Kusserow has over 20 years of experience in the healthcare and healthcare technology industries, and has served in executive capacities for multiple healthcare services and benefits companies.

 

•

Relevant Executive/Management Experience—Prior to joining our Company, Mr. Kusserow had extensive senior management and executive experience in the healthcare industry.

Richard A. Lechleiter. Mr. Lechleiter has been the President of the Catholic Education Foundation of Louisville since 2014. Previously, from 2002 until 2014, he was Executive Vice President and Chief Financial Officer of Kindred Healthcare, Inc., a leading publicly traded national healthcare services company. Prior to joining Kindred Healthcare, Inc., Mr. Lechleiter was Vice President and Chief Accounting Officer of Humana, where he played a key role in the spin-off of Humana’s hospital business and joined the new company, Galen Health Care, Inc., as Chief Accounting Officer. Galen Health Care, Inc., ultimately became a part of Columbia/HCA Healthcare Corp. Mr. Lechleiter has served as a member of the Board of Directors of Stock Yards Bancorp, a public bank holding company, since 2007. In 2016, Mr. Lechleiter joined the Board of Directors of Trilogy Healthcare Services LLC, a privately held healthcare services company based in Louisville, Kentucky. Mr. Lechleiter is a former certified public accountant and earned his undergraduate degree in accounting from Xavier University.

Director Qualifications:

 

•

Extensive Knowledge of the Healthcare Industry—Mr. Lechleiter has over 35 years of experience in the healthcare industry.

 

•

Relevant Executive/Leadership Experience—Mr. Lechleiter has extensive senior management and executive experience in the healthcare industry.

 

•

Public Company Board Experience—Mr. Lechleiter has outside board experience with two other companies and serves as Chair of the Executive Compensation Committee for Stock Yards Bancorp and a member of the Audit Committee for both Stock Yards Bancorp and Trilogy Healthcare Services.

 

•

High Level of Financial Literacy—Mr. Lechleiter has held executive financial leadership roles at Kindred Healthcare, Humana and Galen Health Care, Inc. He also serves on the Audit Committee of both Stock Yards Bancorp and Trilogy Healthcare Services in addition to serving as one of the “Audit Committee Financial Experts” on our Audit Committee. Until his retirement from Kindred, he was a certified public accountant for 35 years.

Bruce D. Perkins. Mr. Perkins is currently the managing member for Perkins, Smith & Associates, L.L.C. (“PSA”), a healthcare consulting firm based in Louisville, Kentucky. He also serves on the boards of three private companies: Advanced Dermatology and Cosmetic Surgery; Physician’s Endoscopy; and Remedi SeniorCare. Additionally, Mr. Perkins serves as a strategic executive for myNEXUS; a strategic advisor and executive coach for ChenMed; a senior advisor for the Marwood Group; a senior advisor for US Imaging; a consultant for Devoted Health and a consultant for Magellan Health, Inc. Previously, Mr. Perkins served as a board member of Athletico, LHP Hospital Group, Humana Health Plan of Puerto Rico, and was chairman of the board of MCCI Group Holdings. From 2015 to 2019, Mr. Perkins held the role of Strategic Executive and Advisor to the Chairman and CEO of MCCI Group Holdings and its successor, Conviva Health Solutions. Mr. Perkins retired from Humana Inc. in 2014 after a thirty-eight-year career. Prior to retirement, he was the President of Healthcare Services, a $21 billion business segment which included pharmacy, home care, behavioral health, physician services, provider networks, provider administration, and clinical platforms. Before Mr. Perkins became President of Healthcare Services, he served as Regional Vice President and Divisional President for Humana health plans. Prior to Humana’s spin-off of its hospital business, Mr. Perkins held multiple hospital leadership positions including Divisional Vice President and Hospital CEO, COO, and CFO.

Director Qualifications:

 

•

Extensive Knowledge of the Healthcare Industry—Mr. Perkins has over 43 years of experience in the healthcare industry.

 

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•

Relevant Executive/Leadership Experience—Mr. Perkins is the managing member for Perkins, Smith, & Associates, L.L.C., a private healthcare consulting company, and previously served as the President of Humana’s Healthcare Services Segment, which had annual revenue of $21 billion. Mr. Perkins served as Regional Vice President and Divisional President for Humana health plans across multiple markets, and prior to the spin-off Humana’s hospital business, Mr. Perkins held multiple leadership positions including Divisional Vice President and hospital CEO, COO, and CFO. In each of these positions, he had full accountability for all aspects of the businesses.

 

•

Relevant Governance Experience—Mr. Perkins serves on the board of three private healthcare companies, Advanced Dermatology and Cosmetic Surgery, Remedi Senior Care, and Physicians Endoscopy. Mr. Perkins served as chairman of the board of MCCI Group Holdings, served on the board of Humana Health Plan of Puerto Rico, and served as treasurer of the AAPPO.

Jeffrey A. Rideout, MD, MA. Dr. Rideout is President and Chief Executive Officer of the Integrated Healthcare Association, a California statewide multi-stakeholder leadership group that promotes quality improvement, accountability and affordability of health care. He joined Integrated Healthcare Association in May of 2015. Dr. Rideout holds academic appointments with Stanford University (since January 2014) and University of California Berkeley Haas School of Business (since January 2008, and previously from January 2002 to January 2004), teaching on topics related to healthcare technology, services and investment. Previously, from June 2013 until June 2015, Dr. Rideout served as the Senior Medical Advisor for Covered California, the state based insurance exchange for California, and was responsible for quality and network management and all physician and hospital relations. Dr. Rideout has also served as a Senior Advisor to GE Healthcare Ventures, focusing on new business development related to Digital Health and Digital Therapeutics, including assessing and accelerating new early stage solutions and companies. From July 2009 until June 2013, Dr. Rideout was Senior Vice President, Chief Medical Officer for The TriZetto Group, leading strategy around development and delivery of a comprehensive suite of products and services that enable payers, providers and employers to improve the cost and quality of care for consumers. Dr. Rideout also served as the global leader of the healthcare division for Cisco Systems Internet Business Solutions Group, and Cisco’s Chief Medical Officer. While at Cisco, Dr. Rideout also served as a member of the American Health Information Community (AHIC’s) Chronic Care Workgroup for the US Department of Health and Human Services. Dr. Rideout was at Cisco from April 2004 to August 2007. Prior to Cisco, Dr. Rideout was President and CEO of Blue Shield of California Foundation, Chief Medical Officer and SVP for Blue Shield of California and head of Quality Management for Blue Cross of California/WellPoint. Dr. Rideout previously served on the board of directors of MatrixCare, a provider of technology solutions for skilled nursing and senior living providers, life plan communities (CCRCs), and home health organizations, until its acquisition by ResMed in November of 2018. Dr. Rideout currently serves as Chair of the Amedisys Quality of Care Committee (since July 2019) and also serves on the Amedisys Compliance and Ethics Committee. Dr. Rideout is currently a board member for Hope Solutions (formerly named Contra Costa Interfaith Housing), which provides permanent housing to low income families in Contra Costa County, California, is an independent board member for HMS Holdings Corp., is an adviser to the Bain Capital Double Impact, including as a director for Broadstep Behavioral Health (formerly named Phoenix Care Systems, Inc.), a portfolio company of the fund, and is a member of the California Department of Managed Health Care Financial Solvency Standards Board. Dr. Rideout completed his residency training in internal medicine at University of California, San Francisco and is a Fellow of the American College of Physicians. He received his medical degree from Harvard Medical School and his undergraduate degree from Stanford University. He also holds a master’s degree in Philosophy, Politics, and Economics from Oxford University where he studied as a Rhodes Scholar.

Director Qualifications:

 

•

Extensive Knowledge of the Healthcare Industry—Dr. Rideout has over 30 years of experience in the healthcare industry.

 

•

Relevant Executive/Leadership Experience—Dr. Rideout has extensive senior management and executive experience in the healthcare industry.

 

•

Relevant Governance Experience—Dr. Rideout is the current President and Chief Executive Officer of the Integrated Healthcare Association and previously held executive roles at The TriZetto Group, Cisco Systems, and Blue Shield of California.

Board of Directors Recommendation

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE PERSONS NAMED ABOVE.

Vote Required

Directors are elected by a plurality of the votes cast at the Meeting.

 

13

CORPORATE GOVERNANCE

Board Leadership Structure

Our Board of Directors is currently comprised of Mr. Kusserow (our President, Chief Executive Officer and Chairman of the Board of Directors) and nine independent directors. Beginning as of June 9, 2020, the date of the Meeting, our Board of Directors will be comprised of a total of eight directors, including Mr. Kusserow, as a result of Mr. Washburn’s retirement and Mr. Netterville’s not standing for re-election at the Meeting. Each director serves a one-year term and is subject to annual election.

Chairman of the Board

Mr. Washburn served as the non-executive Chairman of our Board of Directors from August 31, 2014 to October 17, 2019, when he retired as our Chairman of the Board (but continues to serve as a director until the end of his term on the date of the Meeting). Our Board of Directors elected Mr. Kusserow, our President and Chief Executive Officer, as the Chairman of the Board on October 17, 2019. Because Mr. Kusserow is one of our executive officers, the independent directors of the Board appointed Richard A. Lechleiter, one of our independent directors, as Lead Director to lead our Board of Directors in fulfilling its duties effectively, efficiently and independent of management, in accordance with our Bylaws and Corporate Governance Guidelines.

We believe it is appropriate at this time in our Company’s growth for Mr. Kusserow to serve as Chairman because his strong operational experience, extensive knowledge of our industry, and innovative leadership skills support management’s execution of our strategy and focus our directors’ attention on the most critical matters affecting our business.

Although we believe that combining the roles of Chairman and Chief Executive Officer is the best structure for our stockholders and Company at this time, we recognize that other leadership structures, such as one providing for a separate independent Chairman of the Board, might be appropriate depending on the circumstances. Accordingly, our Board of Directors periodically reviews our leadership structure.

Independent Lead Director

As independent Lead Director, Mr. Lechleiter is specifically responsible under our Bylaws and Corporate Governance Guidelines for enhancing Board effectiveness, in particular by ensuring that the Board has adequate resources and is presented with full, timely and relevant information; ensuring that there is a process in place to monitor best practices that relate to the operations and responsibilities of the Board; and by assessing the effectiveness of the overall Board, its committees and individual directors on a regular basis. He is also responsible for assisting with Board management, in particular by providing input on the agendas for Board and committee meetings; consulting with the Chairman, the Chair of the Nominating and Corporate Governance Committee (who is currently Mr. Lechleiter) and the Board regarding the membership and chairs for Board committees; ensuring that the independent directors meet regularly without management present to discuss the effectiveness and performance of the Chief Executive Officer and the Board and the committees of the Board, succession planning and strategic planning; and by chairing Board meetings when the Chairman is not in attendance. Finally, he also serves as a key liaison between management and the independent directors.

We believe that Mr. Lechleiter, in his role as Lead Director and as Chair of the Nominating and Corporate Governance Committee for the last three years and a member of our Board for over the last four years, has made valuable contributions to our Company by developing a productive relationship with our Chief Executive Officer and Chairman and ensuring effective communication between our Chief Executive Officer and Chairman and the rest of the Board. Accordingly, we believe that our Company will benefit from having a combined Chairman/Chief Executive Officer position and having the Lead Director serve as the leader of the independent directors.

We believe the Chairs of our five independent Board committees (Mr. Perkins: Compliance and Ethics Committee; Ms. Klapstein: Compensation Committee; Mr. Netterville (through the date of the Meeting): Audit Committee; Dr. Rideout: Quality of Care Committee; and Mr. Lechleiter: Nominating and Corporate Governance Committee) have made valuable contributions to our Company in these roles, which are vital to our Board leadership structure. Each Committee Chair meets regularly with members of Company management, as appropriate, to discuss matters relevant to their respective Committee functions, both with and without the presence of our Chairman and Chief Executive Officer. Our non-employee directors also regularly communicate with Mr. Lechleiter, in his role as Lead Director, regarding Board and Committee functions.

Stockholder Engagement

As part of our investor relations program, we regularly communicate with our stockholders and actively engage with them throughout the year. We solicit feedback from our stockholders with respect to corporate governance issues, our executive compensation policies and practices, regulatory developments, industry trends and company strategy. Specifically, throughout, 2019 and continuing through

 

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2020, we met with over 150 actively-managed accounts at conferences like the J.P. Morgan Healthcare Conference, Oppenheimer Health Conference, Bank of America / Merrill Lynch Healthcare Conference, RBC Capital Healthcare Conference, UBS Healthcare Conference, Jefferies Healthcare Conference, Raymond James Generalist Conference and the William Blair Growth Stock Conference as well as participating in eight analyst-hosted non-deal road shows and five analyst-hosted bus tours covering 15 cities and five countries to discuss progress on our strategic initiatives including:

 

•

clinical quality;

 

•

employer of choice;

 

•

turnover reduction;

 

•

operational efficiencies;

 

•

organic and inorganic growth; and

 

•

financial performance.

Risk Oversight

The Board’s Role in Risk Oversight

Risk management is primarily the responsibility of our Company’s senior management team, while our Board of Directors is responsible for the overall supervision and oversight of our Company’s risk management activities.

Our Enterprise Risk Management Committee, comprised of all of our executive officers and our Senior Vice President of Assurance Services, is responsible for ensuring that significant risks to the Company, including financial, operational, strategic, technology and legal/compliance, are identified and managed on an ongoing basis by the appropriate business lines and/or corporate services throughout the organization, thereby protecting our assets and enhancing stockholder value. All identified risks are tracked and prioritized by the Enterprise Risk Management Committee, and top enterprise risks are included in a quarterly update to the Audit Committee.

The Board’s oversight of the material risks faced by the Company occurs at both the full Board level and at the committee level. The Audit Committee has oversight responsibility not only for financial reporting with respect to the Company’s major financial exposures and the steps management has taken to monitor and control such exposures, but also for the effectiveness of management’s enterprise risk management process that monitors key business risks facing the Company. Specifically, as stated in its charter, one of the responsibilities of the Audit Committee is “to discuss guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company assess and manage the Company’s exposure to risk, and to discuss the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.” In connection with its risk oversight role, at each of its quarterly, in-person meetings, the Audit Committee also meets privately in separate executive sessions with representatives from the Company’s independent registered public accounting firm (without any members of Company management present) and the Company’s Senior Vice President of Assurance Services (without other members of Company management present). The Company’s Senior Vice President of Assurance Services manages the Company’s Internal Audit and Enterprise Risk Management functions and has been employed by the Company since September 2016. The Internal Audit Department, according to its charter, is charged with taking “a systematic and disciplined approach to evaluate and improve the effectiveness of the organization’s risk management, control, and governance processes.” The Audit Committee also receives quarterly reports regarding the Company’s testing and controls implemented in compliance with the requirements of the Sarbanes-Oxley Act of 2002. Finally, the Audit Committee reviews and receives regular briefings concerning the Company’s information security and technology risks (including cybersecurity), including discussions of the company’s information security and risk management programs. The Company’s Chief Privacy Officer and Information Security Officer leads our cybersecurity risk management program, which is overseen by the Audit Committee.

In addition, the Compliance and Ethics Committee of the Board receives presentations at its quarterly in-person meetings from the Company’s Chief Compliance Officer, who has been employed by the Company since January 2017 (serving as Deputy Compliance Officer from January 2017 until her appointment as Chief Compliance Officer effective September 1, 2019). The Chief Compliance Officer, who heads the Company’s Compliance Department, is responsible for monitoring the Company’s compliance with federal and state laws governing the provision of healthcare services and patient privacy, as well as conditions of participation in the Medicare and Medicaid programs for the home health and hospice services provided by the Company. During these meetings, the Chief Compliance Officer provides a detailed report on compliance activities, relevant regulatory developments impacting the compliance function and our risk mitigation practices. As part of its risk oversight duties, the members of the Compliance and Ethics Committee

 

15

meet regularly with the Chief Compliance Officer privately in executive session (without other members of Company management present), and it is expected that the Chief Compliance Officer maintains an open line of communication with both the Compliance and Ethics Committee and the full Board.

Further, the Company’s Chief Operating Officer reports in person to the Board’s Quality of Care Committee on a quarterly basis on matters relating to the quality of the Company’s clinical outcomes and the care provided to its patients. The Company’s clinical protocols are designed to minimize patient risk and improve patient health outcomes.

In addition, the Company’s legal department reports in person to the Audit Committee on at least a quarterly basis to keep the directors informed concerning legal risks and other legal matters involving the Company and the Company’s legal risk mitigation efforts.

Additionally, at each Board meeting, our Chairman and Chief Executive Officer meets with the other directors in executive session to address operational and strategic matters, including areas of risk and opportunity that require Board attention. Further, in dedicated sessions held annually focusing entirely on corporate strategy, the full Board reviews in detail the Company’s short- and long-term strategies, including consideration of risks facing the Company.

The oversight of risk within the organization is an evolving process requiring the Company to continually look for opportunities to further embed systematic enterprise risk management into ongoing business processes across the organization. The Board actively encourages management to continue to review and improve its methods of assessing and mitigating risk.

Compensation Risk Assessment

Our management believes that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond our organization’s ability to effectively identify and manage significant risks; are compatible with effective internal controls and the risk management practices of our Company; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

We based the above conclusions on the following: for the annual long-term (equity-based) compensation programs in place in 2019 for our (i) executive officers and (ii) corporate and field (non-executive) management, awards were subject to time-based vesting conditions, and the performance targets for the performance-based awards were linked to overall corporate performance (adjusted EBITDA target). For the annual short-term (cash bonus) compensation programs in place for our (i) executive officers and (ii) corporate and field senior (non-executive) management in place in 2019, performance targets were linked to overall corporate performance (adjusted EBITDA target), quality of patient care and a people/early exits rate goal (all performance goals are defined more fully on pages 40-41 of this Proxy Statement). For the annual short-term (cash bonus) compensation programs in place for our eligible field operations leaders, performance targets were linked to multiple performance measures similar to our corporate plans, with reasonable caps and appropriate controls to establish targets and validate actual performance against the targets before payouts were made.

Further, our Chief Human Resources Officer and/or company internal counsel, as appropriate, report to the full Board on at least a quarterly basis on matters relating to employee compensation. In addition, our compensation consultant regularly reviews our executive compensation program for the purpose of identifying potential sources of risk and reports its findings to the Compensation Committee.

Board Committees

Audit Committee

The Audit Committee’s responsibilities are set forth in its charter, a copy of which appears on the “Investors” subpage of our website, (www.amedisys.com) under the link “Governance.” The Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”), and its responsibilities include hiring and supervising the work of our registered independent public accountants and our Senior Vice President of Assurance Services (who manages our Internal Audit Department), overseeing our financial reporting process, internal controls and legal and regulatory compliance and pre-approving all audit and non-audit services to be provided by independent auditors.

The Audit Committee is currently comprised of Jake L. Netterville (Chairman), Mses. Capps and Kline and Messrs. Lechleiter and Washburn. Our Board of Directors has determined that each member of the Audit Committee also meets the definition of an “independent director” as defined by Rule 10A-3 under the Exchange Act and that Messrs. Netterville and Lechleiter and Ms. Capps qualify as “audit committee financial experts,” as defined by Item 407(d)(5) of SEC Regulation S-K, and as a “financially sophisticated audit committee member” under NASDAQ Listing Rule 5605(c)(2)(A). This determination is based on the fact that Mr. Netterville is a certified public accountant, Mr. Lechleiter is a former chief financial officer and chief accounting officer and Ms.

 

16

Capps is a former chief financial officer, a certified public accountant and has experience serving as a member and chairperson of several public company audit committees. In addition, our Board of Directors has determined that all of the members of the Audit Committee are financially literate.

Compensation Committee

The Compensation Committee reviews and acts on compensation levels and benefit plans for our executive officers, approves director compensation, approves and evaluates the Company’s equity compensation plans, approves the issuance of stock options, nonvested stock, restricted stock, restricted stock units and other equity-based awards under our equity compensation plans and has the sole authority to retain, and has retained, compensation consultants to advise the Compensation Committee with respect to executive officer and director compensation. It also provides assistance to our Board of Directors in the annual evaluation of our Chief Executive Officer. The Compensation Committee is currently comprised of Ms. Klapstein (Chair), Mses. Capps and Kline and Messrs. Netterville, Lechleiter and Washburn. Our Board of Directors has determined that each member of the Compensation Committee meets the definition of an “outside director” as defined by regulations promulgated pursuant to Section 162(m) of the Internal Revenue Code (to the extent such Code section applies to our compensation practices) and is a “non-employee director” as defined in the SEC’s Rule 16b-3. The Compensation Committee may not delegate any of its authority with respect to approving the compensation (including equity-based compensation) of our directors and executive officers. The Compensation Committee may delegate its authority to approve awards of equity-based compensation to persons other than our directors and executive officers to our Chief Executive Officer. A copy of the Compensation Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Governance.”

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies and evaluates individuals qualified to become members of the Board of Directors and recommends to our Board of Directors all nominees for election to our Board of Directors. The Nominating and Corporate Governance Committee also provides assistance to our Board of Directors in the annual evaluations of our Board of Directors and its Committees, the review and consideration of corporate governance practices and ongoing board governance education. The Nominating and Corporate Governance Committee also prepares the slate of chairs and members for each of the Board’s standing committees. The Nominating and Corporate Governance Committee is comprised of Richard A. Lechleiter (Chairman) and each of our other independent directors (Mses. Capps, Klapstein and Kline, Messrs. Netterville, Perkins and Washburn, Drs. Coye and Rideout). A copy of the Nominating and Corporate Governance Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Governance.”

Quality of Care Committee

The Quality of Care Committee is currently comprised of Jeffrey A. Rideout, MD (Chairman), Dr. Coye, Ms. Klapstein and Mr. Perkins. The dual purposes of the Quality of Care Committee are to (i) assist our Board of Directors in fulfilling its oversight responsibilities relating to the review of our policies and procedures in connection with the delivery of quality medical care to patients and patient safety and (ii) assist our Board of Directors and our management in promoting a “culture of quality” throughout our Company. A copy of the Quality of Care Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Governance.”

Compliance and Ethics Committee

The Compliance and Ethics Committee was formed in October 2013 and is currently comprised of Bruce D. Perkins (Chair) and Drs. Coye and Rideout. Mr. Perkins has been deemed to have significant familiarity and experience with Medicare compliance due to his over 40 years of executive and senior management-level employment experience in the healthcare industry. The dual purposes of the Compliance and Ethics Committee are to (i) assist the Board in fulfilling its oversight responsibilities relating to (a) the compliance by the Company with all legal requirements to which it is subject, including specifically all federal and state health care laws and regulations to which it is subject, all fraud and abuse laws and all applicable Medicare program requirements, (b) the design, implementation and execution of the Company’s Compliance and Ethics Program, (c) the activities of the Chief Compliance Officer and the operation of the Company’s Compliance Department, and (d) matters relating to the Company’s Corporate Compliance Plan and Code of Ethical Business Conduct; and (ii) assist the Board and Company management in establishing an appropriate “tone at the top” and promoting a strong “culture of compliance” throughout the Company, while also recognizing that other Board committees assist the Board in fulfilling its oversight responsibilities relating to various areas of legal and regulatory compliance. A copy of the Compliance and Ethics Committee’s charter appears on the “Investors” subpage of our website (www.amedisys.com), under the link “Governance.”

 

17

Board and Committee Meetings—2019

Our Board of Directors held five in-person and 10 telephonic meetings in 2019. Our Board of Directors maintains Audit, Compensation, Nominating and Corporate Governance, Quality of Care and Compliance and Ethics Committees that are each comprised solely of independent directors. Each Board committee generally meets on or around the date of each regularly-scheduled quarterly in-person Board meeting. During 2019, the Audit Committee held four in-person meetings; the Compensation Committee held four in-person meetings and four telephonic meetings; the Nominating and Corporate Governance Committee held five in-person meetings; the Quality of Care Committee held four in-person meetings; and the Compliance and Ethics Committee held four in-person meetings and two telephonic meetings. Each director attended at least 75% of the total number of Board meetings and meetings of the Committees on which he or she served during 2019. Generally, during every month in which there is not a regularly-scheduled in-person Board meeting, the Board members meet telephonically with selected members of Company management.

Independent Directors—Meetings in Executive Session

The independent directors, as a group, meet in-person in executive session on a regular basis (and at least once, quarterly) in connection with each in-person Board meeting without any members of our management or non-independent directors present. Mr. Lechleiter currently presides over these executive sessions as Lead Director.

Plurality Plus Resignation Policy

The Company’s Corporate Governance Guidelines contain a plurality plus resignation policy for directors in uncontested elections. Pursuant to the policy, in an uncontested election of directors, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election will promptly tender his or her resignation to the Board of Directors following certification of the stockholder vote. The Nominating and Corporate Governance Committee will act to determine whether to accept the director’s resignation and will submit such recommendation for prompt consideration by the Board of Directors. The Board of Directors will act on the Nominating and Corporate Governance Committee’s recommendation within 90 days of the certification of the stockholder vote.

The Nominating and Corporate Governance Committee and the Board of Directors may consider any factors and information they deem relevant in deciding whether to accept a director’s resignation, including, without limitation:

 

•

any reasons given by stockholders for their withhold votes from such director;

 

•

any alternatives for curing the underlying cause of the withheld votes;

 

•

the director’s tenure;

 

•

the director’s qualifications;

 

•

the director’s past and expected future contributions to the Board of Directors; and

 

•

the overall composition of the Board of Directors and the composition of its committees, including whether accepting the resignation would cause the Company to fail to meet any applicable standards of the SEC or the NASDAQ Global Select Market.

The Company will disclose publicly the Board of Directors’ decision on whether to accept the director’s resignation and an explanation of the process by which the decision was made and, if applicable, the reasons for not accepting the director’s resignation, in a Current Report on Form 8-K filed with the SEC. Full details of the policy are set forth in our Corporate Governance Guidelines, a copy of which appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Governance.”

Mandatory Retirement Age

In October 2019, our Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, adopted a mandatory retirement age policy for directors such that a non-employee director may not serve as a member of our Board of Directors after reaching the age of 78. At the time that a director reaches the age of 78, the director may complete his or her then current term but may not stand for re-election thereafter.

Stockholder Recommendation of Nominees

Per our Corporate Governance Guidelines, stockholders may recommend a nominee for consideration by the Nominating and Corporate Governance Committee of our Board by sending the following information to our Corporate Secretary, at 3854 American

 

18

Way, Suite A, Baton Rouge, Louisiana 70816, who will forward the information to the Chairman of the Nominating and Corporate Governance Committee:

 

•

Name, mailing address and telephone number of the stockholder;

 

•

The proposed nominee’s name, mailing address and telephone number;

 

•

A statement whether the proposed nominee knows that his or her name is being suggested by the stockholder, and whether he or she has consented to being suggested and is willing to serve;

 

•

The proposed nominee’s résumé or other description of his or her background and experience;

 

•

The proposed nominee’s relationship to the stockholder; and

 

•

The stockholder’s reasons for proposing that the individual be considered.

The Nominating and Corporate Governance Committee will solicit and receive recommendations for candidates to fill any Board vacancies and will review the qualifications of potential director candidates. The Nominating and Corporate Governance Committee will present any recommended candidates to the full Board for consideration. Stockholders may also nominate directors for election to our Board of Directors. For additional important information regarding stockholder nominations of directors and stockholder proposals, please see the “Other Matters” section of this Proxy Statement.

Board Independence, Stockholder Communications and Board Attendance at the Annual Stockholders Meeting

Our Board of Directors has reviewed and analyzed the independence of each director nominee. The purpose of the review was to determine whether any particular relationships or transactions involving directors or their affiliates or immediate family members were inconsistent with a determination that the director is independent for purposes of serving on the Board of Directors and its committees. During this review, the Board of Directors examined whether there were any transactions and/or relationships between directors or their affiliates or immediate family members and the Company and the substance of any such transactions or relationships.

Following this review, our Board of Directors determined that all directors who served during 2019 and all director nominees, other than Mr. Kusserow, are “independent” under the director independence requirements and listing standards of The NASDAQ Global Select Market. Mr. Kusserow is not considered independent because he is an executive officer of the Company.

Stockholders who wish to communicate with our Board of Directors, our Lead Director or our Audit Committee should address their communications to such party, in care of our Corporate Secretary, who is responsible for promptly disseminating such communications to our Board of Directors, our Lead Director or Audit Committee Chair, as appropriate. Per our Corporate Governance Guidelines (described below), all communications with the Board, our Lead Director or the Audit Committee are treated confidentially, and stockholders and other interested parties can remain anonymous when communicating their concerns. Stockholders who would like to submit the name of a person for consideration as a director nominee should address any communication to our Corporate Secretary in accordance with the procedures described under the heading “Corporate Governance—Stockholder Recommendation of Nominees,” above.

We do not have a formal policy regarding attendance by Board members at our Annual Stockholders Meeting because management is available at the meeting to answer questions from stockholders in attendance. Paul B. Kusserow and Donald A. Washburn attended our 2019 Annual Meeting of Stockholders (the “2019 Annual Meeting”) in person, and directors Julie D. Klapstein, Richard A. Lechleiter, Bruce D. Perkins and Jeffrey A. Rideout attended our 2019 Annual Meeting via teleconference. Historically, we have had low in-person stockholder attendance at our Annual Stockholders Meetings.

Hedging Company Securities

Our Amended and Restated Insider Trading Compliance Policy prohibits our employees, officers, and directors from purchasing or selling derivative securities relating to Amedisys stock if the purchase or sale creates a “put-equivalent” position (meaning that the employee, officer or director will benefit from a decline in the price of the underlying Amedisys security). Examples of prohibited transactions would include purchasing a put on Amedisys stock, selling a call on Amedisys stock, or entering into forward sales and other transactions that are used to hedge ownership positions in Amedisys securities.

Compensation Consultant Independence and Conflicts of Interest Assessment

The Compensation Committee engaged the services of Pay Governance (the “Consultant”) as its independent advisor on matters of executive officer and director compensation (“Executive Compensation Matters”). The Consultant reported directly to the Committee

 

19

and provided no other services to the Company or any of its affiliates. In accordance with the requirements of Item 407(e)(3)(iv) of Regulation S-K, the Company has affirmatively determined that no conflicts of interest existed between the Company and the Consultant (or any individuals working on the Company’s account on the Consultant’s behalf). In reaching such determinations, the Company considered the following enumerated factors, all of which were attested to or affirmed by the Consultant:

 

(1)

During fiscal 2019, the Consultant did not provide any services to or receive any fees from the Company other than in connection with the Executive Compensation Matters;

 

(2)

The amount of fees paid or payable by the Company to the Consultant in respect of the Executive Compensation Matters represented (or are reasonably certain to represent) less than 1% of the Consultant’s total revenue;

 

(3)

The Consultant has in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company;

 

(4)

There are no business or personal relationships between the Consultant and any member of the Compensation Committee other than in respect of (i) the Executive Compensation Matters, or (ii) work performed by the Consultant for any other company, board of directors or compensation committee for whom such committee member also serves as an independent director;

 

(5)

Neither the Consultant nor any of its consultants working on the Amedisys engagement owns any stock of the Company; and

 

(6)

There are no business or personal relationships between the Consultant and any executive officer of the Company other than in respect of the Executive Compensation Matters.

CODE OF ETHICAL BUSINESS CONDUCT

Our Board of Directors has adopted a Code of Ethical Business Conduct that is applicable to all our directors, executive officers and employees. The Code of Ethical Business Conduct is available on the “Investors” subpage of our website (www.amedisys.com) under the link “Governance.” The purpose of the Code of Ethical Business Conduct is to, among other things, deter wrongdoing and promote: honest and ethical conduct; full, fair, accurate, timely and understandable disclosure in our filings with the SEC and in public communications; compliance with applicable laws, rules and regulations; the prompt internal reporting of violations; and accountability.

 

20

CORPORATE GOVERNANCE GUIDELINES AND REVIEW AND CONSIDERATION OF CORPORATE GOVERNANCE PRACTICES

Our Board of Directors has adopted Corporate Governance Guidelines. The purpose of the Corporate Governance Guidelines is to assist the Board in the exercise of its responsibilities and to serve the best interests of the Company and its stockholders. A copy of the Corporate Governance Guidelines appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Governance.”

The members of our Nominating and Corporate Governance Committee are responsible for the review and consideration of corporate governance practices.

Members of Nominating and Corporate Governance Committee

Richard A. Lechleiter (Chairman)

Vickie L. Capps

Molly J. Coye, MD

Julie D. Klapstein

Teresa L. Kline

Jake L. Netterville

Bruce D. Perkins

Jeffrey A. Rideout, MD

Donald A. Washburn

 

21

PROPOSAL 2—RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

Background

The Audit Committee of the Board of Directors has appointed KPMG LLP (“KPMG”) as the independent registered public accounting firm to audit our Company’s consolidated financial statements for the fiscal year ending December 31, 2020. The submission of this matter for ratification by stockholders is not legally required; however, our Board of Directors believes that such submission is consistent with best practices in corporate governance and is an opportunity for stockholders to provide direct feedback to the Audit Committee and the Board of Directors on an important issue of corporate governance. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm as our Company’s external auditor. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm to be our Company’s external auditor at any time during the year if it determines that such a change would be in the best interests of our Company and our stockholders.

Board of Directors Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the shares represented at the Meeting and entitled to vote.

KPMG Representative—Attendance at the Meeting

A representative of KPMG will be present at the Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions by stockholders.

 

22

REPORT OF THE AUDIT COMMITTEE

This Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Exchange Act.

The Audit Committee is currently comprised of five directors, all of whom are independent as determined in accordance with the listing standards of The NASDAQ Global Select Market and within the meaning of Rule 10A-3 under the Exchange Act.

The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight and review of Amedisys’ accounting functions and internal controls. The committee recommends to the Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K and approves all fees paid to our independent registered public accounting firm. The committee also receives quarterly reports from our Internal Audit Department and approves the annual Internal Audit Work Plan and the compensation of the Senior Vice President of Assurance Services, who leads our Internal Audit Department.

The Audit Committee meets at least once quarterly in executive session without members of Company management present. During these executive sessions, the Audit Committee will also meet separately with representatives of the Company’s independent registered public accounting firm (generally, the Lead Audit Partner) and the Senior Vice President of Assurance Services, on behalf of the Company’s Internal Audit Department. The Audit Committee also meets separately with other senior members of Company management as it deems necessary.

In connection with recommending that our audited financial statements be included in our 2019 Annual Report, the members of the Audit Committee took the following steps:

 

•

The members of the Audit Committee discussed with our independent registered public accounting firm their judgment as to the quality, not just the acceptability, of our accounting policies and principles and such other matters as are required to be discussed under generally accepted auditing standards, including information concerning the scope and result of the audit. These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting and disclosure process.

 

•

Management represented to the Audit Committee that the Company’s audited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, on a consistent basis, and the Audit Committee reviewed and discussed the quarterly and annual earnings press releases and consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (the “PCAOB”).

 

•

The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and the letter required by the PCAOB regarding their independence, and the members of the Audit Committee discussed with the independent registered public accounting firm the firm’s independence from the Company and its management. The members of the Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with maintaining the independent registered public accounting firm’s independence. This discussion and disclosure informed the Audit Committee of the independent registered public accounting firm’s independence, and assisted the Audit Committee in evaluating that independence. The members of the Audit Committee concluded that the independent registered public accounting firm is independent from the Company and its management.

 

•

The members of the Audit Committee reviewed and discussed, with our management and independent registered public accounting firm, our audited consolidated balance sheet as of December 31, 2019 and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2019, including associated footnotes and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

•

The members of the Audit Committee (or the Chairman of the Committee, pursuant to a delegation of authority) reviewed and pre-approved all permissible non-audit services by our independent registered public accounting firm.

 

•

The members of the Audit Committee reviewed the Principal Executive Officer and Principal Financial Officer Certifications concerning the Company’s 2019 Annual Report.

Based on the discussions with our independent registered public accounting firm concerning the audit, the independence discussions, the financial statement quarterly review, and additional matters deemed relevant and appropriate by the Audit Committee, including

 

23

internal audit activities, the Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our 2019 Annual Report.

This report has been furnished by the members of the Audit Committee:

Jake L. Netterville (Chairman)

Vickie L. Capps

Teresa L. Kline

Richard A. Lechleiter

Donald A. Washburn

FEES PAID TO AUDITORS

The following summarizes the fees billed to us and our subsidiaries by KPMG for professional services rendered in 2019 and 2018.

AUDIT FEES

 

		2019								2018
Fee Category		Amount ($)				Percent				Amount ($)				Percent
Audit fees		$	1,512,400				72.2	%		$	1,365,279				81.9	%
Tax fees		$	100,883				4.9	%		$	104,933				6.3	%
Audit-related fees		$	31,606				1.5	%		$	30,000				1.8	%
All other fees		$	440,704				21.4	%		$	166,780				10.0	%
Total fees		$	2,085,593				100.0	%		$	1,666,992				100.0	%

Audit fees include fees associated with the annual audit, our annual report on Form 10-K and the reviews of our quarterly reports on Form 10-Q, services that are normally provided by our registered independent public accounting firm in connection with statutory and regulatory filings or engagements and services that generally only our registered independent public accounting firm can provide. Audit-related fees relate to the 401(k) audit. Tax fees include tax compliance and limited tax consulting services. All other fees relate to due diligence, accounting research software and Medicare cost reporting services. All of the services described above were pre-approved by the Audit Committee (or the Chairman of the Audit Committee, pursuant to a delegation of authority).

Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors; Delegation of Pre-Approval Authority in Specified Instances

All audit and permissible non-audit services provided by the independent auditors are pre-approved by the Audit Committee (or the Chairman of the Audit Committee, pursuant to a delegation of authority). These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. The Audit Committee has delegated authority to Mr. Netterville, the Chairman of the Audit Committee, to address requests for pre-approval of specified types of transactions not included in the annual budget prepared by the independent auditors, provided that any such pre-approvals are presented to the full Audit Committee at its next meeting.

 

24

STOCK OWNERSHIP

The following table shows beneficial ownership of our common stock as of April 13, 2020, unless otherwise indicated, by (i) each person known by us to beneficially own more than five percent of our common stock in accordance with Rule 13d-3 under the Exchange Act, (ii) each of our directors, director nominees, and Named Executive Officers during 2019 (as such term is defined under the heading “Compensation Discussion and Analysis” below), and (iii) all of our directors and executive officers as a group. Except as noted below, the persons named have sole voting and investment power with respect to all shares of common stock.

Unless otherwise indicated, the address of each of the individuals named in the table below under “Named Executive Officers and Directors (Including 2020 Director Nominees)” is c/o Amedisys, Inc., 3854 American Way, Suite A, Baton Rouge, LA 70816.

 

Name		Shares Beneficially Owned				Percent of Class(1)
5% Stockholders
BlackRock, Inc.(2)			4,368,928				13.5	%
The Vanguard Group, Inc.(3)			3,140,728				9.7	%
Named Executive Officers and Directors (Including 2020 Director Nominees)
Vickie L. Capps(4) (2020 Director Nominee)			1,780				*
Molly J. Coye, MD(4) (2020 Director Nominee)			780				*
Julie D. Klapstein(5) (2020 Director Nominee)			7,993				*
Teresa L. Kline(4) (2020 Director Nominee)			1,780				*
Richard A. Lechleiter(5)(6) (2020 Director Nominee)			8,293				*
Jake L. Netterville(5)			71,700				*
Bruce D. Perkins(5) (2020 Director Nominee)			25,385				*
Jeffrey A. Rideout, MD(5) (2020 Director Nominee)			1,297				*
Donald A. Washburn(5)			36,698				*
Paul B. Kusserow(7) (Named Executive Officer and 2020 Director Nominee)			628,893				1.9	%
Scott G. Ginn(8) (Named Executive Officer)			24,021				*
Christopher T. Gerard(9) (Named Executive Officer)			30,054				*
Sharon Brunecz(10) (Named Executive Officer)			7,260				*
David L. Kemmerly(11) (Named Executive Officer)			42,954				*
All Executive Officers and Directors as a Group (16 Persons)			893,082				2.8	%

 

(*)	Less than one percent

(1)	Based on 32,370,345 shares of common stock outstanding on April 13, 2020, plus shares that can be acquired through the exercise of options or warrants or conversion of restricted stock units within 60 days thereafter by the specified individual or group.

(2)

This disclosure is based on a Schedule 13G filed with the SEC by BlackRock, Inc., a parent holding company, on February 4, 2020, reporting beneficial ownership as of December 31, 2019. BlackRock, Inc. reported it has sole voting power over 4,307,812 of the shares and sole dispositive power over 4,368,928 of the shares. The address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(3)

This disclosure is based on a Schedule 13G filed with the SEC by The Vanguard Group, Inc. on February 12, 2020, reporting beneficial ownership as of December 31, 2019. The Vanguard Group, Inc., an investment adviser registered under the Investment Advisers Act of 1940, reported that it has sole voting power over 66,102 of the shares, shared voting power over 7,132 of the shares, sole dispositive power over 3,071,446 of the shares, and shared dispositive power over 69,282 of the shares. The principal business address for The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The filing reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 62,150 shares as a result of its serving as investment manager of collective trust accounts, and that Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 11,084 shares as a result of its serving as investment manager of Australian investment offerings.

(4)	Included in the “Shares Beneficially Owned” column are 780 shares of nonvested stock, 100% of which will vest on June 7, 2020, provided the director remains a non-employee member of the Board through such date.

(5)	Included in the “Shares Beneficially Owned” column are 1,297 shares of nonvested stock, 100% of which will vest on June 7, 2020, provided the director remains a non-employee member of the Board through such date.

(6)

Includes (i) 100 shares held by Mr. Lechleiter’s son, and (ii) 100 shares held by Mr. Lechleiter’s wife as custodian for son under the Uniform Transfers to Minors Act. Mr. Lechleiter disclaims beneficial ownership of the shares held by his son and wife as custodian for his son under the Uniform Transfers to Minors Act.

(7)	Includes 526,868 shares that Mr. Kusserow has or will have within 60 days, the right to acquire pursuant to stock options.

(8)	Includes (i) 2,500 time-based restricted stock units that will vest on June 4, 2020, assuming Mr. Ginn remains continuously employed by the Company through such date, (ii) 1,875 performance-based restricted stock units that will vest on June 4, 2020, assuming Mr. Ginn remains

 

25

continuously employed by the Company through such date, and (iii) 12,072 shares that Mr. Ginn has will have within 60 days, the right to acquire pursuant to stock options.

(9)	Includes 17,072 shares that Mr. Gerard has or will have within 60 days, the right to acquire pursuant to stock options.

(10)	Includes 5,092 shares that Ms. Brunecz has or will have within 60 days, the right to acquire pursuant to stock options.

(11)

Includes (i) 4,167 time-based restricted stock units that will vest on June 4, 2020, assuming Mr. Kemmerly remains continuously employed by the Company through such date, (ii) 3,124 performance-based restricted stock units that will vest on June 4, 2020, assuming Mr. Kemmerly remains continuously employed by the Company through such date, and (iii) 28,125 shares that Mr. Kemmerly has will have within 60 days, the right to acquire pursuant to stock options.

EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 2019

In accordance with SEC requirements, the following table provides information about awards outstanding and shares remaining available under our equity compensation plans (including any individual compensation arrangements) as of December 31, 2019.

 

Plan category		(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights				(b) Weighted average exercise price of outstanding options, warrants and rights				(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders			875,974			$	49.62				2,029,098
Equity compensation plans not approved by security holders			—				—				—
Total			875,974			$	49.62				2,029,098

 

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PROPOSAL 3—ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS (“SAY ON PAY” VOTE)

General Information

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act enable our stockholders to vote to approve, on an advisory (non-binding) basis, the compensation paid to our “Named Executive Officers” as disclosed in this Proxy Statement in accordance with the SEC’s rules.

Say on Pay Vote Mechanics

We are asking our stockholders to provide advisory approval of the compensation paid to our “Named Executive Officers,” as described in the “Compensation Discussion and Analysis” (“CD&A”) section of this Proxy Statement (beginning on page 29) and the compensation tables and narrative disclosures following the CD&A.

This advisory vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and our compensation philosophy, policies and practices, as described in this Proxy Statement.

Consideration of the 2019 Advisory Vote on Executive Compensation

As discussed further in the CD&A, at our 2019 Annual Meeting, 97.2% of the shares present in person or by proxy and entitled to vote on the matter voted to approve, in an advisory vote, the compensation paid to our Named Executive Officers, as described in our 2019 Proxy Statement.

The Compensation Committee values the feedback of our stockholders and takes into account the outcome of Say on Pay votes when considering future executive compensation arrangements and potential changes to our executive compensation program. Our Board of Directors has adopted a policy of providing for annual advisory (non-binding) votes from stockholders on executive compensation. The next say on pay vote will occur at the 2021 Annual Meeting, and the next required advisory (non-binding) vote on the frequency of say on pay votes occurs at the 2023 Annual Meeting.

Highlights of our Executive Compensation Program

We believe that our executive compensation program:

 

•

Aligns executive compensation to business objectives and overall Company performance;

 

•

Attracts, retains, and motivates highly-qualified executives by offering market-competitive total compensation packages;

 

•

Balances the focus on short- vs. longer-term performance objectives through an appropriate mix of short-term cash incentive awards and equity incentive awards that vest over a number of years;

 

•

Has features designed to further align executive compensation with stockholder interests and mitigate risks, including: (i) a prohibition on “short sales” of and “hedging” Company securities (applicable to all employees), (ii) no minimum guaranteed cash bonus payments or base salary increases and (iii) limited perquisites; and

 

•

Has certain features that are widely considered “best practices,” including change-in-control provisions that only provide cash severance upon a change-in-control termination (i.e., a “double-trigger”) and do not provide for the payment of any excise tax gross-up amounts (other than for moving expenses).

Consistent with these goals, and as further discussed in the CD&A, we believe the Compensation Committee of our Board of Directors has designed an executive compensation program that: (i) rewards pay for performance, (ii) is competitive and reasonable as compared to compensation programs adopted by similarly-sized public companies in the industry and based on a review of broader public company and industry survey data and (iii) is cost-effective with limited perquisites and other personal benefits.

Board of Directors Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE SAY ON PAY PROPOSAL, AS STATED BY THE FOLLOWING RESOLUTION:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders pursuant to the compensation disclosure

 

27

rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2019 Summary Compensation Table, and the other related tables and disclosures.”

The say on pay vote is advisory, and therefore not binding on the Company, our Board of Directors or our Compensation Committee. Our Board of Directors and the Compensation Committee value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements.

Vote Required

Approval of this proposal requires the affirmative vote of a majority of the shares represented at the Meeting and entitled to vote.

 

28

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) outlines our executive compensation philosophy, objectives and processes. It explains the decision making process used by the Compensation Committee of our Board of Directors (the “Compensation Committee”), the reasoning behind our executive compensation program, and, more specifically, the actions the Compensation Committee took related to the compensation of our “Named Executive Officers,” which under the SEC’s executive compensation disclosure rules consist of all persons who served as our principal executive officer and our principal financial officer during our last fiscal year and our next three highest-paid executive officers who were serving as executive officers at the end of our last fiscal year.

In 2019, our Named Executive Officers were as follows:

 

•

Paul B. Kusserow—President, Chief Executive Officer and Chairman of the Board;

 

•

Scott G. Ginn—Chief Financial Officer;

 

•

Christopher T. Gerard—Chief Operating Officer;

 

•

Sharon Brunecz—Chief Human Resources Officer; and

 

•

David L. Kemmerly— Chief Legal and Government Affairs Officer (since March 2020); formerly our General Counsel and Senior Vice President of Government Affairs.

Executive Summary

Business Overview

During 2019, we continued to execute on our strategic areas of focus: Clinical Distinction, Employer of Choice, Operational Efficiency and Driving Growth. In 2019, we had the great honor of caring for over 415,000 patients, making more than 12.3 million visits across our three lines of business. In February 2019, we closed on our acquisition of Compassionate Care Hospice, a hospice provider headquartered in Parsippany, New Jersey with 2,300 employees and 53 locations nationwide. In addition, on April 1, 2019, we closed on our acquisition of RoseRock Healthcare, a hospice care provider in Tulsa, Oklahoma. On November 25, 2019, we signed a purchase agreement to acquire Asana Hospice, a hospice care provider with eight locations in Pennsylvania, Ohio, Missouri, Kansas and Texas, which closed on January 1, 2020. After this acquisition, Amedisys now cares for more than 12,000 hospice patients daily with 146 hospice care centers in 33 states. Other major accomplishments in 2019 included:

 

•

91% of our home health care centers rated four stars or better, 60% of our home health care centers rated four and half stars or above, and 15% of our home health care centers rated five stars based on the Centers for Medicare & Medicaid Services (“CMS”) Quality of Patient Care Star Ratings April 2020 preview;

 

•

Home health total admissions grew +7%;

 

•

Hospice total average daily census (ADC) grew to 11,200 from 7,600 through organic and inorganic growth; and

 

•

Executed an innovative, nation-wide personal care partnership agreement.

2019 Company Performance Highlights

2019 was an exceptional year for Amedisys and for our stockholders. In addition to the strategic progress and high scores for patient quality outlined above, in 2019:

 

•

We provided stockholders with a three-year total stockholder return of 294% (the highest in the Company’s peer group) and total stockholder return of 43% for 2019 (at the 73rd percentile of the Company’s peer group);

 

○

This three-year return correlates to the creation of $3.96 billion of stockholder value as measured by growth in market capitalization from January 1, 2017 to December 31, 2019;

 

•

The stock price reached its all-time high closing price of $167.13 on December 30, 2019 and continued to appreciate over the first quarter of 2020, closing at $183.54 on March 31, 2020;

 

29

•

We increased adjusted EBITDA** by 24.8% over 2018 ($225.3 million* in 2019 compared to $180.6 million in 2018) and 12.7% above our 2019 target goal of $200 million (which itself represented 11% growth over 2018 EBITDA);

 

•

We exceeded target performance on our other two annual incentive performance measures, quality of patient care and people/early exits rate goals (all performance goals are defined more fully on pages 40-41) in addition to nearly achieving the maximum performance goal in adjusted EBITDA;

 

•

Net service revenue increased by 17.6% over 2018, an increase of $293 million to $1,955.6 million compared to $1,662.6 million in 2018, including the following within each of our major business segments:

 

○

Home health net service revenue increased from $1,174.5 million in 2018 to $1,256.4 million in 2019;

 

○

Hospice net service revenue increased from $410.9 million in 2018 to $617.2 million in 2019;

 

○

Personal care net service revenue increased from $77.2 million in 2018 to $82.0 million in 2019; and

 

•

We generated $202 million in cash flow from operations.

* The impact of our acquisition of RoseRock Healthcare on April 1, 2019 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2019 long-term incentive (equity) and short-term incentive (cash bonus) performance targets as described in further detail later in this CD&A, as the Compensation Committee did not contemplate the RoseRock acquisition at the time it set the 2019 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $224.8 million). The impact of the RoseRock Healthcare acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $225.3 million).

 

 

30

 

31

** See Appendix A hereto for the reconciliation of non-GAAP financial measures.

Key 2019 Compensation Developments and Pay-for-Performance Highlights

 

•

One Time Equity Awards Granted to Our Chief Executive Officer. On January 2, 2019, our Compensation Committee granted to Mr. Kusserow awards of time-based restricted stock units, time-based stock options and performance-based restricted stock units pursuant to and in the amounts set forth in the Amended and Restated Employment Agreement entered into between the Company and Mr. Kusserow on September 27, 2018. In approving the Amended and Restated Employment Agreement with Mr. Kusserow, including the equity awards provided therein, the Compensation Committee considered the following factors:

 

○

The Compensation Committee believes the composition of the equity awards will incentivize Mr. Kusserow to continue increasing stockholder value over the performance period of the restricted stock units and life of the options by:

 

◾

Increasing stockholder return: Mr. Kusserow will not realize any value from his stock options (representing 25% of the equity awards) unless the market value of our common stock appreciates from the grant date; and

 

◾

Achieving specified financial and operational goals: 50% of the equity awards granted to Mr. Kusserow in 2019 (based on the value of such awards) relate to performance-based compensation in the form of performance-based restricted stock units that vest only upon achievement of EBITDA performance;

 

○

The performance-based restricted stock units do not have above-target payout potential—they are earned at target if performance target is achieved (regardless of the actual level of performance achieved) and do not pay out at all if performance is not achieved at target level or higher;

 

○

The performance-based restricted stock units are subject to an additional three-year time-based vesting requirement such that the earned performance-based restricted stock units do not vest until the end of the three-year term of Mr. Kusserow’s employment;

 

○

Mr. Kusserow will not receive any additional equity awards during the three-year term of the Amended and Restated Employment Agreement;

 

○

The equity awards are subject to “double-trigger” vesting provisions such that they will not automatically vest and pay out solely as a result of a Change in Control of the Company, but rather accelerated vesting requires a qualifying termination within a specified window following a Change in Control; and

 

○

Mr. Kusserow’s target bonus as a percentage of base salary remained at 25% in 2019, and he received only a minimal salary increase (less than a 3% increase), which resulted in his target total cash compensation well below competitive levels.

Additional information on this topic appears under the heading “2019 Long-Term Incentives (Equity-Based Compensation)—Pay for Performance—One Time Equity Awards Granted to our Chief Executive Officer.”

 

•

Annual Short-Term Performance Achievement: We exceeded our annual short-term incentive target performance goals based on adjusted EBITDA, quality of patient care and people (early exits rate) for 2019. Each Named Executive Officer earned a bonus of 174.98% of their target annual opportunity (additional information regarding our short-term incentive (cash bonus) program appears under the heading “Details of our Executive Compensation Program—2019 Annual Performance-Based Incentive Compensation (Cash Bonuses)”).

 

32

•

2019 Performance RSU Performance Achievement: We exceeded our long-term incentive target performance goal based on 2019 adjusted EBITDA results (which were near the maximum performance goal level of achievement). Accordingly:

 

○

Each of the Named Executive Officers other than Mr. Kusserow earned 199.2% of the target number of shares pursuant to their respective 2019 performance-based restricted stock unit awards.

 

○

Mr. Kusserow earned the 2019 performance tranche (at target) pursuant to his performance-based restricted stock unit awards tied to performance requirements for 2019.

 

◾

Due to their front-loaded nature, the performance-based restricted stock units granted to Mr. Kusserow in 2019 do not provide any potential for above-target payout regardless of the actual level of EBITDA achievement against target goals (but could pay out at 0 if performance target is not achieved).

 

○

Mr. Gerard and Ms. Brunecz earned the 2019 performance tranches (at target) from their prior year grants tied to performance requirements for 2019.

 

◾

Due to their front-loaded nature, the previous performance-based restricted stock units granted to our executive team in prior years (the awards were granted to Mr. Gerard and Ms. Brunecz in the year in which they joined the Company) do not provide any potential for above-target payout regardless of the actual level of EBITDA achievement against target goals.

Additional information on this topic appears under the heading “2019 Long-Term Incentives (Equity-Based Compensation).”

 

•

Salary Adjustments: None of our Named Executive Officers received a salary adjustment in 2019, other than Mr. Kusserow, who received a minimal salary increase (less than a 3% increase) in connection with entering into his Amended and Restated Employment Agreement in September 2018, which salary increase was effective January 1, 2019 (additional information regarding the base salaries of all of our Named Executive Officers appears under the heading “Base Salaries”).

 

•

Election of Mr. Kusserow as Chairman of the Board: On October 17, 2019, our Board of Directors elected Mr. Kusserow, our President and Chief Executive Officer, as our Chairman of the Board. Mr. Kusserow does not receive any additional compensation for his additional responsibilities as our Chairman.

 

•

2020 Executive Compensation Decisions: In the first quarter of 2020, we implemented the following pay practices:

 

○

Increased the stock ownership requirements applicable to our Chief Executive Officer from a value of three times his base salary to six times his base salary;

 

○

Maintained base salaries for all of our executive officers for 2020, which represents two straight years of no changes to the fixed compensation of our executive officers;

 

○

Made no changes to the other two core elements of total direct compensation, short-term incentive and long-term incentive compensation, for our Named Executive Officers for 2020; and

 

○

Increased the target bonus for our Chief Executive Officer for 2020 from 25% of base salary to 35% of base salary, which is still below the 25th percentile of the Company’s peer group.

In addition, the Compensation Committee established the 2020 performance targets for our short-term and long-term incentive compensation plans in February 2020, without the benefit of being able to consider the more recent developments regarding the COVID-19 pandemic. We will continue to monitor and assess the potential impact of the virus on our business operations. As a result, the Compensation Committee may exercise its discretion to adjust the 2020 performance targets as appropriate.

 

33

2019 Changes in Compensation Strategy

During the second half of 2018 after reviewing with Pay Governance, the Compensation Committee’s compensation consultant, prevailing practices among our competitors and in light of our current stage as a company, the Compensation Committee discussed the Company’s historic practice of paying below market median annual cash compensation and long-term incentives at above market median and potential changes to that compensation approach. As a result of these discussions, the Compensation Committee adopted several changes to our approach to annual compensation for our executive officers other than our Chief Executive Officer, whose compensation is set forth in his Amended and Restated Employment Agreement, in order to better align our practices with competitive norms while still reflecting our pay for performance philosophy and motivating our executives to continued achievement of business objectives and stockholder value creation. The committee made the following changes to the compensation to be paid to the Company’s executive officers beginning in 2019:

 

•

maintained salaries that are competitive with market levels;

 

•

maintained our philosophy of reviewing executive salaries annually but only making adjustments periodically, based on performance or change in role and other factors, and not automatically on an annual basis;

 

•

increased short-term incentive (cash bonus) targets to be more aligned with competitive practices;

 

•

adjusted the weightings of performance goals for short-term incentives to 70% adjusted EBITDA, 20% quality of patient care and 10% people goals;

 

•

provided for a scaled payout of short-term incentives (cash bonus) at 50%-200% of target depending on actual level of performance achieved compared to threshold, target, and maximum levels of performance objectives;

 

•

shifted from front-loaded equity awards to annual long-term incentive equity awards for our Named Executive Officers other than our Chief Executive Officer (whose equity awards granted in 2019 are the only equity awards he will receive for the duration of the three-year term of his Amended and Restated Employment Agreement), consistent with market practice;

 

•

maintained at least 50% of long-term incentives in the form of performance-based equity;

 

•

provided for a scaled payout of performance-based restricted stock units at 50%-200% of target depending on actual level of performance achieved for our annual equity awards; and

 

•

maintained practice of tying 100% of executive incentive payouts to achievement of corporate-level performance objectives within metrics we believe contribute to stockholder value creation.

2019 Say on Pay Vote Results

As part of the Compensation Committee’s efforts to ensure that the interests of our Named Executive Officers are aligned with those of our stockholders, the Compensation Committee considers the results of the Company’s prior stockholder advisory votes on executive compensation. Our most recent Say on Pay vote was held in 2019 and yielded an approval by 97.2% of the votes cast. Based on this high level of support, we did not make any additional changes to the overall structure of our compensation program in 2019 as a result of any specific feedback from stockholders, other than the changes to our compensation structure effective as of January 1, 2019 that were disclosed in our proxy statement for our 2019 annual meeting of stockholders (as discussed under the caption “2019 Changes in Compensation Strategy” above).

 

34

Our Compensation and Governance Practices & Policies

We believe the following practices and policies promote sound compensation governance and are in the best interests of our stockholders and executives:

 

What We Do		What We Do Not Do
✓  Heavy emphasis on performance-based variable compensation		X  No significant perquisites
✓  Majority of long-term incentive awards are performance-based		X  No “single-trigger” termination payments upon a change in control
✓  Stock Ownership Guidelines for executive officers and directors, which the Board increased to 6x base salary for our Chief Executive Officer		X  No hedging of Company stock
✓  Compensation Committee comprised solely of independent directors		X  No pledging of Company stock (other than for Mr. Kusserow pursuant to a one-time waiver of this policy granted by the Board in 2018 solely with respect to Mr. Kusserow)
✓  Independent compensation consultant		X  No multi-year guarantees for salary increases
✓  Regular risk assessments		X  No discretionary bonuses
✓  “Double-trigger” termination payments upon a change in control		X  No tax gross-ups (other than for moving expenses) on termination payments following a change in control
✓  Conduct annual reviews of share utilization		X  No repricing or backdating stock options without stockholder approval
✓  CEO target cash pay that is below market competitive levels

Overview of our Executive Compensation Program

Our executive compensation program consists of:

 

•

Base salary set with reference to the market median;

 

•

Annual performance-based incentives (cash bonuses) that are in line with competitive practices;

 

•

Long-term incentives that are materially performance-based;

 

•

Severance, as applicable; and

 

•

Retirement, health and welfare benefits consistent with those provided to all employees.

During the first fiscal quarter of each year, the Compensation Committee (i) establishes the performance measures under our current year cash bonus and long-term (equity-based) incentive compensation plans, as applicable, and (ii) determines whether the performance conditions for recently-completed performance periods have been satisfied. The Compensation Committee reviews executive officer compensation throughout the year to determine whether there are going to be any base salary adjustments for, or grants of, long-term incentive equity awards to our executive officers.

Compensation Philosophy and Objectives

Our compensation philosophy, which extends to all employees including our Named Executive Officers, is designed to align employee and stockholder interests. Our objective is to pay fairly based upon the employee’s position, experience and performance. Employees may be rewarded through additional compensation, for example, in the

 

35

form of a cash bonus or equity, when we meet or exceed targeted business objectives. Certain employees are also eligible to receive incentive compensation based on both individual and/or Company performance.

The objectives of our compensation philosophy are described below:

 

•

Stockholder-aligned. Our Named Executive Officers have most of their incentive compensation aligned with our Company’s overall financial performance through cash bonus programs and equity grants, the value of which is directly tied to change in share value.

 

•

Performance-based. Our Named Executive Officers’ annual incentive compensation is linked to the Company’s overall performance.

 

•

Market-driven. We structure our compensation programs to be competitive in the total compensation that they offer.

 

•

Focused on the individual. We design our incentive compensation programs to attract, motivate and retain our Named Executive Officers.

Compensation Administration

Role of the Compensation Committee. The Compensation Committee is responsible for the review and approval of all aspects of our executive compensation program and makes all decisions regarding the compensation of our executive officers. These responsibilities include:

 

•

Review and approval of corporate long-term and short-term incentive goals and objectives relevant to executive compensation;

 

•

Evaluation of the performance of our Chief Executive Officer and review of our Chief Executive Officer’s evaluation of the performance of our other executive officers;

 

•

Evaluation of the competitiveness of the total compensation package for our executive officers;

 

•

Evaluation and approval of executive officer employment, severance and change-in-control agreements, including any amendments thereto, and any title change for any executive officer; and

 

•

Approval of any changes to the total compensation package for our executive officers, including but not limited to changes to benefits, base salary, annual cash incentive and long-term equity incentive award opportunities and retention programs.

Additional information regarding the Compensation Committee’s responsibilities is set forth in its charter, a copy of which appears on the “Investors” subpage of our website (www.amedisys.com) under the link “Governance.” Information from this website is not incorporated by reference into this proxy statement.

Role of Independent Compensation Consultants. The Compensation Committee has the authority to retain experts to assist the Compensation Committee in fulfilling its duties. In 2019, the Compensation Committee retained Pay Governance as its compensation consultant (the “Consultant”). In 2019, the Consultant provided the following consulting services to the Compensation Committee:

 

•

Provided compensation benchmarking information for our executive officers who report directly to our Chief Executive Officer, including tally sheet exhibits for each executive officer, which lists each component of the executive officers’ compensation to estimate the total annual compensation of the executive officers.

 

•

Provided analysis and advice regarding compensation peer group used for providing market pay program, levels, and design information.

 

•

Provided analysis and support in relation to the Compensation Committee’s review and discussion of our compensation philosophy and strategy for delivering short and long-term incentives.

 

36

•

Provided analysis and advice with respect to share ownership guidelines for our executive officers.

 

•

Reviewed and provided observations on our executive compensation practices in relation to those of our peers and industry comparators.

 

•

Provided advice and analysis regarding the calculation of the Company’s CEO to median employee pay ratio.

 

•

Provided analysis with respect to potential deferred compensation program structures.

 

•

Provided compensation benchmarking information for our non-executive directors.

 

•

Provided updates regarding compensation-related issues, trends and regulatory changes.

Because the Consultant did not and does not provide any non-compensation related services to our Company and based on a review of the Consultant’s engagement in relation to the SEC’s guidance on factors to assess in relation to consultant independence, we believe that the Consultant is and was independent of management and provides and provided the Compensation Committee with objective advice. The Compensation Committee retained the Consultant directly, although in carrying out assignments, the Consultant also interacted in certain capacities with our management-level employees. All such assignments are approved by the Chair of the Compensation Committee, Julie Klapstein.

For additional information, please refer to the discussion on page 19 under the heading “Compensation Consultant Independence and Conflicts of Interest Assessment.”

Role of the President, Chief Executive Officer and Chairman of the Board. In the course of deliberating certain 2019 compensation decisions for our Named Executive Officers, the Compensation Committee took into account the recommendations of Mr. Kusserow regarding the compensation of our other executive officers. Mr. Kusserow’s recommendations were based upon his assessment of each executive officer’s individual role, retention considerations and market factors. The Compensation Committee reviewed these recommendations before making its decision. While the Compensation Committee requested Mr. Kusserow to be present at certain Committee meetings when executive compensation was discussed, Mr. Kusserow did not play any role in the Compensation Committee’s deliberation of matters impacting his own compensation, and only Compensation Committee members are permitted to vote on matters related to executive officer compensation.

Review of Peer Group, Industry and Survey Data

The peer group used for benchmarking executive officer compensation and non-employee director compensation in 2019 consisted of the following companies:

 

•   Acadia Healthcare Company, Inc.		•   LHC Group, Inc.
•   AMN Healthcare Services, Inc.		•   MEDNAX, Inc.
•   Brookdale Senior Living Inc.		•   National HealthCare Corporation
•   Chemed Corporation		•   Option Care Health, Inc.
•   Civitas Solutions, Inc.		•   Select Medical Holdings Corporation
•   Cross Country Healthcare, Inc.		•   The Ensign Group, Inc.
•   Encompass Health Corporation		•   The Providence Service Corporation
•   Healthcare Services Group, Inc.

 

37

Evaluating the Overall Competitiveness and Reasonableness of our 2019 Incentive Compensation Program. Based on its review of the information described above, the Compensation Committee determined that the components of our 2019 Named Executive Officer compensation program were reasonable.

While the Compensation Committee generally considers available peer group, industry and survey data to be helpful in understanding how our compensation levels compare to other companies, peer group, industry and survey data are only one factor that the Compensation Committee may consider in making its decisions regarding executive compensation. For example, the Compensation Committee also considers the alignment of our then-current compensation practices with our compensation philosophy, program structure, retention goals and other factors (such as the integration of large acquisitions) before making compensation decisions.

Level of Compensation. In determining how each executive officer’s total compensation package is allocated among these components, the Compensation Committee emphasizes the components that reward the accomplishment of business objectives and create stockholder value. Concurrently, the Compensation Committee believes it is appropriate to provide our executive officers with a reasonable level of guaranteed compensation through base salary and benefits, together with significant opportunity for additional compensation through annual and long-term incentives that align executive rewards with stockholders. Generally, if targeted performance levels are not achieved, our executive officers’ total compensation is likely to be at or below the median of comparable positions at similarly-sized public companies in our industry. Alternatively, if the targeted performance levels are exceeded, our executive officers’ total compensation is likely to be above the median of comparable positions at similarly-sized public companies in our industry.

Mix of Pay. Our Named Executive Officers have a significant percentage of their total compensation in the form of long-term incentives. The Compensation Committee believes this is appropriate because of the direct influence that these officers have on our long-term financial performance. Generally, the majority of the total targeted annual compensation for our Named Executive Officers, is “at risk,” i.e., variable based on Company performance, to assure alignment with stockholder interests.

Details of our 2019 Executive Compensation Program

Base Salaries

We target our executive officers’ base salaries to be competitive when compared to the salary levels of persons holding similar positions at similarly-sized public companies in the healthcare services and facilities sectors. The Compensation Committee also considers each executive officer’s respective responsibilities, experience, expertise and individual performance when setting base salaries.

Base salaries for our Named Executive Officers in 2018 and 2019 were as follows:

 

Named Executive Officer		2018 Salary				2019 Salary				% Change
Paul B. Kusserow		$	875,000	(1)		$	900,000	(1)		3%
Scott G. Ginn		$	525,000	(2)		$	525,000			--
Christopher T. Gerard		$	575,000	(2)		$	575,000			--
Sharon Brunecz		$	400,000			$	400,000			--
David L. Kemmerly		$	400,000			$	400,000			--

 

 

(1) Pursuant to Mr. Kusserow’s Amended and Restated Employment Agreement, entered into with the Company on September 27, 2018, Mr. Kusserow’s base salary was set at not less than $900,000, which the parties agreed would be effective beginning January 1, 2019.

(2) Effective July 25, 2018.

2019 Annual Performance-Based Incentive Compensation (Cash Bonuses)

As part of our executive compensation program, the Compensation Committee establishes annual incentive compensation performance measures for our executive officers, which performance measures are premised on our Company’s achievement of pre-determined financial or operational goals.

 

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Target incentive opportunities were set based on our Company’s historical practices and the Compensation Committee’s desire to provide a meaningful award for achieving outstanding performance. The Compensation Committee set a:

 

•

threshold, target and stretch/maximum performance goal for the adjusted EBITDA performance measure (with a payout scale ranging from 50% to 200% of the 70% distribution weighting depending on actual performance);

 

•

performance “gate” as well as threshold, target and stretch/maximum performance goals for the quality of patient care performance measure, comprised of a performance “gate” of CMS Star Rating and Hospice Item Set (“HIS”) requirements and threshold, target and stretch/maximum goals based on a 60-day acute care hospitalization (“ACH”) rate and an end of life three-day metric assessing hospice staff visits to patients in the last three days of life (with a payout scale ranging from 50% to 200% of the 20% distribution weighting depending on actual performance); and

 

•

threshold, target and stretch/maximum performance goal for the people (early exits rate) performance measure (with a payout scale ranging from 50% to 200% of the 10% distribution weighting depending on actual performance).

If threshold is not achieved with respect to the adjusted EBITDA measure and the people (early exits rate) performance measure, the respective performance measure is not earned. For the quality of patient care performance measure, if the CMS Star Rating and HIS “gate” requirements are not both met, the performance measure is not earned regardless of the Company’s performance with respect to the 60-day ACH rate or three-day end of life measures. If the CMS Star Rating and HIS “gate” requirements are met, but threshold performance is not achieved for the 60-day ACH rate and three-day end of life measures, then the performance measure for quality of patient care is not earned. The 60-day ACH rate and three-day end of life measures are separate measures, each with a threshold, target and stretch/maximum goal, and each of these measures are weighted equally within the 20% distribution weighting for the collective quality of patient care performance measure. The Compensation Committee retains the discretion to reduce (but not increase) any Named Executive Officer’s incentive earned based on individual performance. The Compensation Committee did not exercise this discretion in 2019.

The bonus opportunity for each Named Executive Officer is expressed as a percentage of base salary. For 2019, the “target” bonus opportunities for our Named Executive Officers were as follows:

 

Named Executive Officer		STI Target         (% of Base Salary)
Paul B. Kusserow		25%
Scott G. Ginn		75%
Christopher T. Gerard		75%
Sharon Brunecz		62.5%
David L. Kemmerly		62.5%

 

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For 2019, the annual short-term incentive (cash bonus) compensation thresholds, targets and stretch/maximums were as follows (the Committee uses linearly interpolation to determine payouts in between performance levels listed below):

 

Performance Measure		Metric Weighting		Threshold		Target		Stretch / Maximum		Actual Performance		% of Target Achievement		Weighted Payout (% of Target Achievement Metric Weighting)
Adjusted EBITDA**		70%		$185 Million		$200 Million		$225 Million		$224.8 Million		199.2%		139.44%
Quality of patient care(1)
- Gate:
CMS Star Rating				4.0+		--		--		4.26
HIS				99%+		--		--		99.6%
- Kickers:
60-day ACH				16.0%		15.6%		15.2%		15.5%		125%
3-day end of life				89.4%		94.1%		98.8%		93.6%		87.5%
Total Quality		20%										106.2%		21.24%
People – Early Exits Rate(2)		10%		14%		12.7%		12%		12.4%		142.9%		14.29%
Potential Payout (% of Target)				50-99.9%		100%		Up to 200%
Overall		100%												174.98%

 

**

Adjusted EBITDA is defined as adjusted earnings before interest, taxes, depreciation and amortization excluding certain items. See Appendix A hereto for the reconciliation of non-GAAP financial measures. The impact of our acquisition of RoseRock Healthcare on April 1, 2019 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2019 short-term incentive (cash bonus) and long-term incentive (equity) performance targets, as the Compensation Committee did not contemplate the RoseRock acquisition at the time it set the 2019 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $224.8 million). The impact of the RoseRock Healthcare acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $225.3 million).

 

(1)

For 2019, the quality of patient care performance measure had a performance “gate” based on achievement of both a CMS Star Rating of 4.0 or higher and a HIS of 99% or greater. The Star Rating performance measure is defined as the CMS’s Quality of Patient Care Star Rating. CMS publishes Quality of Patient Care Star Ratings for all Home Health Agencies quarterly, and each quarterly release uses performance data from a period ending nine months prior to the official publication date. The Company determined that the Company’s Star Rating for 2019 was 4.26 based on the April 2020 Home Health Compare preview, which included six metrics covering the 12 months ended June 2019 and one metric (60-day ACH) that measured data for the 12 months ended December 2018. The preview was made available to the Company in January 2020 and will officially be published by Home Health Compare in April 2020. The HIS is a composite set of process measures, which collectively represent one part of the CMS Hospice Quality Reporting Program (“HQRP”). The HIS data for 2019 was provided by our third-party analytics vendor, Strategic Healthcare Partner. If the Company’s Star Rating was below 4.0 or if the HIS rate was below

 

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99%, then the quality of patient care performance measure would not be met, without regard to the Company’s performance on the ACH and three-day end of life measures.

If both “gate” measures were met, then the Named Executive Officers would be eligible to earn the quality of patient care performance measure based on achievement of threshold, target and stretch/maximum performance goals based on a 60-day ACH rate and three-day end of life metric assessing hospice staff visits to patients in the last three days of life, as follows:

 

Quality of Patient Care Performance Measure “Kickers”		Threshold				Target				Stretch/Maximum
60-day ACH		16.0%				15.6%				15.2%
Three-day End of Life		89.4%				94.1%				98.8%

If the Company’s ACH rate, calculated as the percentage of all eligible home health episodes that ended in hospitalization out of all completed home health episodes within each given 12-month period, was equal to or less than 16.0%, the ACH portion of the quality of patient care measure would be met, with payout based on a sliding scale of 50% of the quality of patient care measure if the ACH rate were 16.0% or lower but more than 15.6%, to 100% if the ACH rate were 15.6% or lower but more than 15.2% to 200% if the ACH rate were 15.2% or lower. If the Company’s three-day end of life measure, calculated as the percent of hospice patients with at least one registered nurse, medical doctor, nurse practitioner, or physician assistant visit in the last three days of life, was greater than or equal to 89.4%, the three-day end of life portion of the quality of patient care measure would be met, with payout based on a sliding scale of 50% of the quality of patient care measure if the three-day end of life measure were 89.4% or greater but less than 94.1%, to 100% if the three-day end of life measure were 94.1% or greater but less than 98.8% to 200% if the three-day end of life measure were 98.8% or higher. The ACH rate and three-day end of life measure were each weighted equally within the 20% distribution weighting for the collective quality of patient care performance measure. The three-day end of life goal of the quality of patient care performance measure was initially established by the Compensation Committee in February 2019 as a seven-day end of life performance goal. In the summer of 2019, CMS determined that it would no longer report the seven-day metric, so the Quality Committee of the Company’s Board of Directors recommended that the seven-day performance metric be changed to a three-day performance metric. Accordingly, in July 2019, the Compensation Committee approved an updated 2019 STI Plan quality of patient care performance measure based on a three-day end of life measure.

 

(2)

The people performance measure, which comprised 10% of the cash bonus incentive opportunity for 2019, was a corporate level performance measure based on the Company’s achievement of an early exits rate of 14% or lower (threshold – 14%; target – 12.7%; and stretch/maximum –12% or lower). The people performance measure was initially established by the Compensation Committee in February 2019 as a retention measure that included an involuntary turnover target goal of 15%. Due to regulatory changes that impact the Company’s payment model, specifically the patient-driven groupings model (“PDGM”) finalized by CMS and the pay practice initiative in preparation for PDGM, the turnover goal that was set in February 2019 was no longer consistent with the Company’s retention goals. Accordingly, in July 2019, the Compensation Committee approved an updated 2019 STI Plan people performance measure based on the rate of turnover occurring within the first 120 days following an employee’s date of hire (an “early exits” rate).

In establishing the performance levels, the Compensation Committee considered the target level of performance reasonable and achievable, but not without management’s significant effort, and established a stretch/maximum performance goal so that the Named Executive Officers had greater incentive and greater reward if even higher levels of performance were achieved on each of the adjusted EBITDA, quality of patient care and people (early exits rate) performance measures. The Compensation Committee also set a threshold level of performance for each performance measure, such that no bonus would be earned for performance below that level. The Compensation Committee felt it was appropriate to set adjusted EBITDA as 70% of the performance measure because it believes that adjusted EBITDA growth encourages our executive officers to focus on improving earnings and profitable

 

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growth. It also believes that this measure is aligned with our overall objective of creating long-term value for our stockholders. The Compensation Committee also believed it was in the best interest of the Company’s stockholders to balance the financial performance measure with reward for the quality of patient care and people performance measures.

Taking the achievement of each of the performance measures at the levels indicated in the above table into account, the Compensation Committee certified the Company’s achievement of the performance goals on February 12, 2020, and the Compensation Committee approved paying out cash bonuses to the Named Executive Officers as follows:

 

Named Executive Officer		Base Salary		Bonus (% of Base Salary)		Bonus ($) (174.98% of Target)
Paul B. Kusserow		$900,000		43.7%		$393,705
Scott G. Ginn		$525,000		131.2%		$688,984
Christopher T. Gerard		$575,000		131.2%		$754,601
Sharon Brunecz		$400,000		109.4%		$437,450
David L. Kemmerly		$400,000		109.4%		$437,450

Such bonus payments, less applicable taxes, withholdings and deductions, were payable in connection with the Company’s next regularly-scheduled payroll period in accordance with the Company’s normal payroll practices.

2019 Long-Term Incentives (Equity-Based Compensation)

Long-term incentives, in the form of equity-based compensation, are used to balance the short-term focus of our annual cash incentive compensation program with performance incentives that generally vest over four years. The Compensation Committee believes that providing long-term incentive opportunities supports our compensation philosophy by aligning the interests of our Named Executive Officers, and other long-term incentive compensation plan participants, with those of our stockholders. Currently, all equity-based compensation is granted in accordance with the terms of our 2018 Omnibus Incentive Compensation Plan.

We believe that grants of equity-based compensation:

 

•

Motivate participants to focus on the creation of stockholder value in both the short- and long-term;

 

•

Reinforce the link between the creation of stockholder value and compensation;

 

•

Enable us to provide competitive levels of total compensation; and

 

•

Aid in the retention of our Named Executive Officers and other long-term incentive plan participants.

It has been our Company’s historical practice to tie a portion of the vesting requirements associated with equity grants to identified performance targets set during the first quarter of the subject fiscal year.

Pay for Performance—One-Time Equity Awards Granted to our Chief Executive Officer.

Pursuant to the terms of the Amended and Restated Employment Agreement entered into between the Company and Paul Kusserow, our Chief Executive Officer, on September 27, 2018, Mr. Kusserow was entitled to, among other things, equity awards with a value of $18 million, which award amounts were calculated as of September 27, 2018, and approved by the Compensation Committee on January 2, 2019 (the “2019 Equity Awards”).

The 2019 Equity Awards granted to Mr. Kusserow, 50% of which will vest only upon the achievement of EBITDA performance over the three-year period from grant and 25% of which will provide value to Mr. Kusserow only upon

 

42

the creation of stockholder value above the stock price on the date of grant, and which will be the only equity awards granted to Mr. Kusserow for the three-year term of his agreement, are as follows:

 

Named Executive Officer		Date of Grant		Performance- Based RSUs (#)		Time- Based RSUs (#)		Time-Based Stock Options (#)		Stock Option Exercise Price ($)
Paul B. Kusserow		1/2/2019		73,638		36,819		80,602		$114.78

The time-based RSUs and stock options vest one-third each year over three years starting on the first anniversary of the grant date, assuming that Mr. Kusserow remains employed by the Company on the applicable vesting date with respect to the first two tranches, and with respect to the third and final tranche of such awards, that Mr. Kusserow remains employed by the Company until December 16, 2021, which is the end of the term of his Amended and Restated Employment Agreement. The performance-based RSUs vest based on achievement of identified performance targets for each of fiscal years 2019 through 2021. Any earned performance tranches will vest on the date the Compensation Committee certifies whether the 2021 performance measure was achieved, assuming Mr. Kusserow has not incurred a termination of employment prior to the end of the term of his Amended and Restated Employment Agreement.

The Compensation Committee believes this strategy will incentivize Mr. Kusserow to increase stockholder value over the performance period of the restricted stock units and life of the options by:

 

•

Increasing Stockholder Return—the options were granted with fair market value exercise prices. Therefore, Mr. Kusserow will not realize any value from his stock options unless the market value of the Company’s common stock appreciates.

 

•

Achieving Specified Financial and Operational Goals—50% of the equity awards granted to Mr. Kusserow in 2019 (based on the value of such awards) relate to performance-based compensation in the form of performance-based restricted stock units.

In approving the Amended and Restated Employment Agreement and the compensation package for Mr. Kusserow contained therein, the Compensation Committee considered the following factors:

 

•

50% of the 2019 Equity Awards vest only upon achievement of EBITDA performance;

 

•

25% of the 2019 Equity Awards provide value only when our stock price appreciates above the option exercise price;

 

•

the performance-based restricted stock units do not have above-target payout potential—they are earned at target if performance target is achieved (regardless of the actual level of performance achieved) and do not pay out at all if performance is not achieved at target level or higher;

 

•

the performance-based restricted stock units are subject to an additional three-year time-based vesting requirement such that the earned performance-based restricted stock units do not vest until the end of the three-year term of Mr. Kusserow’s employment (subject to early vesting, based on performance, upon a Change in Control or certain termination events as described below under “Named Executive Officer Employment Agreement Provisions: Potential Payments Upon Termination or Change in Control”);

 

•

Mr. Kusserow will not receive any additional equity awards during the three-year term of the Amended and Restated Employment Agreement;

 

•

The 2019 Equity Awards are subject to “double-trigger” vesting provisions such that they will not automatically vest and pay out solely as a result of a Change in Control of the Company, but rather accelerated vesting requires a qualifying termination within a specified window following a Change in Control; and

 

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•

Mr. Kusserow received no increase in bonus opportunity in 2019 and only a minimal salary increase (less than a 3% increase).

The Compensation Committee believes that Mr. Kusserow’s compensation package aligns his interests with the interests of stockholders by having 50% of the 2019 Equity Awards tied to performance-based conditions and that the “double-trigger” vesting provisions and performance-based vesting provisions strike an appropriate balance between providing meaningful severance protection and avoiding a significant windfall upon an employment termination.

The 2019 performance tranche of Mr. Kusserow’s performance-based RSUs vest based on our 2019 performance in adjusted EBITDA against a pre-established goal. For the 2019 performance tranche, the Compensation Committee set the performance target at adjusted EBITDA of $200 million (target); this target goal was exceeded. None of these earned shares will vest until the end of the three-year term of Mr. Kusserow’s Amended and Restated Employment Agreement.    

Pay for Performance—Annual Equity Awards to our Other Named Executive Officers. The Compensation Committee’s compensation strategy resulted in a change in 2019 from large up-front grants of performance-based full value shares and options to our newly hired and promoted Named Executive Officers in the year of their employment commencement or promotion, as applicable, to annual equity awards consistent with market practice. In 2019, the Named Executive Officers (other than Mr. Kusserow) were awarded equity grants comprised of the following:

 

Equity Mix		% of Grant Value
Performance-Based RSUs		50%
Time-Based RSUs		25%
Time-Based Stock Options		25%

The Compensation Committee established the performance measure for the performance-based restricted stock units in February 2019. The performance-based restricted stock units vest subject to achievement of the stated performance goal for 2019 and satisfaction of additional time-based vesting conditions. The Compensation Committee believes this strategy will incentivize the Named Executive Officers to increase stockholder value over the performance period of the restricted stock units and life of the stock options by:

 

•

Increasing Stockholder Return—the Named Executive Officers’ options were granted with fair market value exercise prices. Therefore, they will not realize any value from their stock options unless the market value of our common stock appreciates.

 

•

Achieving Specified Financial and Operational Goals—50% of the equity awards granted to the Named Executive Officers in 2019 (based on the value of such awards) relate to performance-based compensation in the form of performance-based restricted stock units.

 

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In 2019, the Company granted equity awards to our Named Executive Officers, other than Mr. Kusserow, as follows:

 

Named Executive Officer		Date of Grant		Performance- Based RSUs (# at Target Performance)		Time- Based RSUs (#)		Time-Based Stock Options (#)		Stock Option Exercise Price ($)
Scott G. Ginn		2/20/2019		3,934		1,967		4,294		$127.11
Christopher T. Gerard		2/20/2019		4,721		2,361		5,152		$127.11
Sharon Brunecz		2/20/2019		2,656		1,328		2,898		$127.11
David L. Kemmerly		2/20/2019		2,656		1,328		2,898		$127.11

The time-based RSUs and stock options vest one-fourth each year over four years starting on the first anniversary of the grant date, assuming that the Named Executive Officer remains employed by the Company on the applicable vesting date. The performance-based RSUs vest based on achievement of the identified performance target for fiscal year 2019 and additional time-based vesting in equal one-fourth installments over four years.

Performance Measure Established for 2019 Annual Grants and 2019 Performance Tranche for Prior Year Grants. The performance-based RSUs granted in 2019 and a portion of the performance-based awards made in prior years vest based on our 2019 performance in adjusted EBITDA against a pre-established goal. For the 2019 annual grants to our Named Executive Officers other than Mr. Kusserow, the Compensation Committee set the performance target at adjusted EBITDA of $185 million (threshold), $200 million (target) and $225 million (stretch/maximum), with incremental payouts between threshold and target and between target and stretch/maximum calculated on a dollar for dollar basis (i.e. every $1 change in adjusted EBITDA will yield an additional payout, once threshold has been met). If threshold is not achieved, the grant will not vest. The performance-based RSUs granted to Mr. Kusserow in January 2019 pursuant to his Amended and Restated Employment Agreement and the 2019 performance tranche of the awards granted to Mr. Gerard and Ms. Brunecz in the year in which they joined the Company were only payable at the target level of performance. The Company communicated the adjusted EBITDA performance target to the executive officers in February 2019.

The impact of our acquisition of RoseRock Healthcare on April 1, 2019 was excluded in the calculation of adjusted EBITDA for purposes of the adjusted EBITDA performance measure used for the 2019 short-term incentive (cash bonus) and long-term incentive (equity) performance targets, as the Compensation Committee did not contemplate the RoseRock acquisition at the time it set the 2019 adjusted EBITDA performance targets (resulting in adjusted EBITDA of $224.8 million). The impact of the RoseRock Healthcare acquisition is included in the calculation of adjusted EBITDA used for financial reporting purposes (resulting in an adjusted EBITDA of $225.3 million).

Actual performance of $224.8 million exceeded target but was just below the stretch/maximum level of performance. Accordingly, the 2019 performance tranche of Mr. Kusserow’s performance-based RSUs and the 2019 performance tranche of the prior year grants to Mr. Gerard and Ms. Brunecz were earned (at target), and the Named Executive Officers, other than Mr. Kusserow, received a number of RSUs equal to 199.2% of target with respect to their 2019 performance-based RSU awards. The grants dependent on 2019 performance were earned as follows:

 

Named Executive Officer		Shares Earned from 2019 Award		Shares Earned from Prior Year Grant (2019 Performance Tranche)(1)
Paul B. Kusserow		24,546(1)(2)		--
Scott G. Ginn		7,836(3)		--
Christopher T. Gerard		9,406(3)		8,090
Sharon Brunecz		5,292(3)		4,193
David L. Kemmerly		5,292(3)		--

 

(1)

Reflects 2019 performance achievement at target (100%).

(2)

Represents the 2019 performance tranche granted to Mr. Kusserow on January 2, 2019 pursuant to the terms of his Amended and Restated Employment Agreement. The shares are subject to additional time-

 

45

based vesting and will vest on the date the Compensation Committee certifies whether the 2021 performance measure was achieved, assuming Mr. Kusserow has not incurred a termination of employment prior to the end of the term of his Amended and Restated Employment Agreement.

(3)

Reflects 2019 performance achievement at 199.2% of target for the 2019 annual equity grants.

Some of the above grants (the awards issued to Mr. Gerard and Ms. Brunecz in connection with joining the Company) were made in years prior to 2019. However, because the tables following this CD&A require them to be disclosed in the Summary Compensation Table (“SCT”) based on their grant date used for accounting purposes (which does not occur until the performance target is set by the Committee and communicated to the award recipient), the above grants are reported in the 2019 SCT.

In setting the performance target for the long-term incentive equity awards to our Named Executive Officers at adjusted EBITDA of $200 million (target), the Compensation Committee considered that adjusted EBITDA is also one of the performance measures for the annual incentive compensation (cash bonus) opportunity, but the Compensation Committee believed that it was an appropriate measure for both components of compensation because it is one of three separate measures for the annual incentive compensation (cash bonus) opportunity and because the Compensation Committee believes that adjusted EBITDA growth encourages our executive officers to focus on improving earnings and profitable growth and that this measure is aligned with our overall objective of creating long-term value for our stockholders.

Other Practices, Policies and Guidelines

Benefits

Our executive officers also participate in the retirement, health and welfare benefit programs generally available to our other employees, including paid vacation and paid Company holidays. In a few limited circumstances, the Company provides other benefits to our executive officers, as detailed in the tables following this CD&A, but we limit special benefits and perquisites for use only as necessary to attract and retain executive talent.

Certain of our executive officers participate in our Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, eligible employees may elect to contribute on an after-tax basis between 1% and 15% of their annual pay through regular payroll deductions to purchase our common stock; provided, however, that an employee may not contribute more than $25,000 to the plan on an annual basis pursuant to Internal Revenue Service restrictions. Shares are purchased at a 15% discount of the market value of our common stock at the close of business on the last day of each fiscal quarter.

Amended and Restated Severance Plan for Executive Officers

The stated purpose of the Amended and Restated Severance Plan for Executive Officers (formerly called the Key Executive Severance Plan) (the “Executive Severance Plan”) is to provide a fair framework in the event of a termination of employment in certain circumstances of the Company’s executive officers. As of December 31, 2019, to be eligible for benefits under the Executive Severance Plan, an executive (each, a “Covered Executive”) must (1) be employed by the Company (through the Company’s common payroll agent, Amedisys Holding, L.L.C.) in the position of an executive officer as appointed by the Board of Directors or have been designated in writing by the Board of Directors or the Compensation Committee, as appropriate, as being covered by the Executive Severance Plan; and (2) have executed and delivered to the Company (and not have revoked or attempted to revoke) the Company’s Executive Protective Covenants Agreement (“EPCA” or other similarly named agreement). Our Chief Executive Officer is entitled to receive severance benefits for certain qualifying terminations pursuant to his Amended and Restated Employment Agreement. See “Named Executive Officer Employment Agreement Provisions: Potential Payments Upon Termination or Change in Control—Amended and Restated Employment Agreement with Mr. Kusserow.”

If any Covered Executive is terminated by the Company without “Cause” or resigns with “Good Reason” in each case prior to a “Change in Control,” each as defined in the Executive Severance Plan, such Covered Executive shall be entitled to an amount equal to one (1) times the sum of (A) the Covered Executive’s base salary, as in effect on the date of employment termination (or in the event a reduction in base salary is a basis for a termination with Good Reason, then the base salary in effect immediately prior to such reduction) and (B) the greater of (x) an amount

 

46

equal to the cash bonus earned by the Covered Executive for the previous fiscal year or (y) an amount equal to the Covered Executive’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Covered Executive’s base salary as in effect on the date of employment termination (or, in the event a reduction in base salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), which amount shall be payable in substantially equal monthly installments in accordance with the Company’s normal payroll practices for a period of 12 months. Further, any unvested equity awards issued in the name of the Covered Executive as of the date of employment termination will vest in accordance with the terms contained in the applicable award agreement for such awards.

If any Covered Executive is terminated by the Company without “Cause” or resigns with “Good Reason” in each case within two years following a “Change in Control,” such Covered Executive shall be entitled to an amount equal to two (2) times the sum of (A) the Covered Executive’s base salary, as in effect on the date of employment termination (or in the event a reduction in base salary is a basis for a termination with Good Reason, then the base salary in effect immediately prior to such reduction) and (B) the greater of (x) an amount equal to the cash bonus earned by the Covered Executive for the previous fiscal year or (y) an amount equal to the Covered Executive’s short-term incentive bonus target percentage for the fiscal year in which the termination occurs, multiplied by the Covered Executive’s base salary, as in effect on the date of employment termination (or, in the event a reduction in base salary is a basis for termination for Good Reason, then the base salary in effect immediately prior to such reduction), which amount shall be payable in a lump sum. Further, any unvested equity awards issued in the name of the Covered Executive as of the date of employment termination will vest in accordance with the provisions of the 2018 Omnibus Incentive Compensation Plan or any successor thereto.

Stock Ownership

Included in the Corporate Governance Guidelines adopted by our Board of Directors are stock ownership requirements applicable to our Chief Executive Officer and our other executive officers. In an effort to more closely align our Chief Executive Officer’s interests with those of our stockholders, on February 12, 2020, the Board of Directors increased the minimum share ownership requirements applicable to our Chief Executive Officer from a value of three times his base salary to a value of six times his base salary, effective immediately. As of December 31, 2019, Mr. Kusserow was in compliance with these ownership requirements (both the prior requirement of three times his base salary and the new requirement of six times his base salary).

In addition, each executive officer of the Company must own Company shares with a fair market value equal to at least two times his or her base salary. Each executive officer is required to retain at least half of the net after-tax shares received upon vesting or exercise of his or her equity awards until the holding requirement is met.

Once the Chief Executive Officer or other executive officer accumulates shares with a value equal to the required multiple of base salary, he or she must retain the minimum number of shares originally accumulated to meet the threshold requirement on a going-forward basis. If the Company’s stock price subsequently declines after the stock ownership requirements are met, he or she will not be required to acquire additional shares.

Deductibility of Compensation

Internal Revenue Code Section 162(m) limits the amount of compensation paid to certain of our executive officers that may be deducted by us for federal income tax purposes in any fiscal year to $1 million. For 2017 and prior years, “performance-based” compensation that had been approved by our stockholders was not subject to the $1 million deduction limit. Accordingly, we intended to design and approve the performance-based compensation paid to our executive officers so that it would satisfy the requirements for deductibility under Section 162(m). For 2017 and prior years, the Compensation Committee considered Section 162(m) when making compensation decisions but contemplated that there might be instances where potentially non-deductible compensation would be provided to reward our executive officers consistent with our compensation philosophy for each compensation element. In December 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. Under the Tax Act, the qualified performance-based compensation exception to Section 162(m) that generally provided for the continued deductibility of performance-based compensation was repealed, effective for tax years commencing on or after January 1, 2018. Accordingly, commencing with our fiscal year ending December 31, 2018, compensation to certain of our executive officers in excess of $1,000,000 (excluding performance-based compensation that meets the requirements of Section 162(m) that was awarded pursuant to a binding agreement in effect as of November 2,

 

47

2017) will generally not be deductible. Performance-based compensation meeting the requirements of Section 162(m) awarded to certain of our executive officers pursuant to a binding agreement in effect as of November 2, 2017, such as our performance-based restricted stock units granted in 2017 and prior years that have not yet been settled into shares of common stock, are currently expected to continue to qualify for the performance-based compensation exemption under Section 162(m) to the extent they have not been materially modified, but future guidance from the United States Treasury may limit or restrict the continued deductibility of these awards. Accordingly, the future deductibility of these grandfathered awards cannot be guaranteed.

CEO Pay Ratio

In accordance with Item 402(u) of Regulation S-K, we determined the ratio of the annual total 2019 compensation of Mr. Kusserow, our CEO, relative to the annual total 2019 compensation of our median employee.

In accordance with Instruction 2 to Item 402(u) of Regulation S-K, we are using the same “median employee” identified in 2017 in our 2019 pay ratio calculation, as we believe that there has been no change in our employee population or employee compensation arrangements that we believe would result in a significant change to our pay ratio disclosure for 2019. See our 2017 proxy statement for information regarding the process we utilized to identify our “median employee.” In accordance with Instruction 7 to Item 402(u) of Regulation S-K, we are excluding the employees we acquired in connection with our acquisitions of Compassionate Care Hospice (approximately 2,080 employees) and Roserock Healthcare (approximately 95 employees) in 2019. We estimated the annual total compensation for that employee by applying the same rules as used for determining total compensation for the named executive officers as reported in Summary Compensation Table.

Mr. Kusserow’s annual total compensation for 2019 was $12,835,547 as reflected in the Summary Compensation Table on page 50. The 2019 annual total compensation for the median-compensated employee, calculated in the same manner, was estimated to be $52,049. Therefore, our CEO to median employee pay ratio is approximately 246.6:1.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors of Amedisys, Inc. has reviewed and discussed the Compensation Discussion and Analysis with management, as required by Item 402(b) of Regulation S-K, and, based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the Meeting and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2019.

Members of the Compensation Committee:

Julie D. Klapstein (Chairperson)

Vickie L. Capps

Teresa L. Kline

Richard A. Lechleiter

Jake L. Netterville

Donald A. Washburn

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is composed of the directors listed as signatories to the above report. During 2019:

 

•

none of our executive officers was a director of another entity where one of that entity’s executive officers served on the Compensation Committee;

 

48

•

no member of the Compensation Committee was during the year or formerly an officer or employee of the Company or any of its subsidiaries;

 

•

no member of the Compensation Committee entered into any transaction with our Company in which the amount involved exceeded $120,000;

 

•

none of our executive officers served on the compensation committee of any entity where one of that entity’s executive officers served on the Compensation Committee; and

 

•

none of our executive officers served on the compensation committee of another entity where one of that entity’s executive officers served as a director on our Board of Directors.

 

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2019 SUMMARY COMPENSATION TABLE

 

Name and Principal Position		Year		Salary ($)				Bonus ($)				Stock   Awards   ($) (1)				Option   Awards   ($) (1)				Non-Equity Incentive Plan   Compensation   ($) (2)				All Other   Compensation   ($)				Total   ($)
Paul B. Kusserow		2019		$	899,327			$	-			$	7,346,127			$	4,161,933			$	393,705			$	34,455(3)			$	12,835,547
President, Chief Executive Officer and Chairman (PEO)		2018		$	875,000			$	-			$	1,176,188			$	2,542,569			$	238,438			$	34,244			$	4,866,439
		2017		$	875,000			$	-			$	908,813			$	1,964,056			$	218,750			$	34,305			$	4,000,924
Scott G. Ginn		2019		$	525,000			$	-			$	1,246,059			$	250,293			$	688,984			$	10,759(4)			$	2,721,095
Chief Financial Officer (PFO)
		2018		$	464,904			$	-			$	563,441			$	226,659			$	143,063			$	9,539			$	1,407,606
		2017		$	335,000			$	-			$	340,922			$	375,340			$	102,500			$	9,277			$	1,163,039
Christopher T. Gerard		2019		$	575,000			$	-			$	2,524,023			$	300,304			$	754,601			$	7,350(6)			$	4,161,278
Chief Operating Officer
		2018		$	500,481			$	-			$	507,548			$	-			$	156,688			$	21,584			$	1,186,301
		2017		$	439,615			$	20,000			$	1,125,007			$	750,417			$	112,500			$	135,555			$	2,583,094
Sharon Brunecz		2019		$	400,000			$	-			$	1,374,440			$	168,921			$	437,450			$	7,128(5)			$	2,387,939
Chief Human Resources Officer
		2018		$	215,385			$	60,770			$	1,179,407			$	784,102			$	63,583			$	137,492			$	2,440,739
David L. Kemmerly		2019		$	400,000			$	-			$	841,468			$	168,921			$	437,450			$	14,321(7)			$	1,862,160
Chief Legal and Government Affairs Officer
		2018		$	395,673			$	-			$	196,031			$	377,766			$	109,000			$	14,144			$	1,092,614

 

(1)

The values for stock in this column reflect the aggregate grant date fair value of stock awards granted during the fiscal years ended December 31, 2019, 2018 and 2017 pursuant to our 2008 and 2018 Omnibus Incentive Compensation Plans. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award based on the probable outcome of the award conditions. Assumptions used in the calculation of this amount are included in Note 9 to our audited financial statements for the year ended December 31, 2019, which were included in our Annual Report on Form 10-K filed with the SEC on February 19, 2020. Additional information regarding these awards appears under the heading “2019 Long-Term Incentives (Equity-Based Compensation)” in the CD&A.

 

(2)

The amounts in this column reflect the amount earned under the annual performance-based non-equity incentive compensation plan for the applicable year. The amounts in this column for fiscal year 2019 were paid on March 6, 2020. Additional information regarding these payments appears under the heading “2019 Annual Performance-Based Incentive Compensation (Cash Bonuses)” in the CD&A.

 

(3)

This amount consists of $7,128 for employer-paid contributions to Mr. Kusserow pursuant to our 401(k) Benefit Plan, $190 for the cash payment of fractional shares related to stock vesting that occurred in 2019 and $27,137 in costs attributable to life insurance premiums paid by us on Mr. Kusserow’s behalf where we are not the beneficiary.

 

(4)

This amount consists of $7,128 for employer-paid contributions to Mr. Ginn pursuant to our 401(k) Benefit Plan, $336 for the cash payment of fractional shares related to stock vesting that occurred in 2019, $520 for a wellness credit related to health insurance premiums and $2,775 in costs attributable to life insurance premiums paid by us on Mr. Ginn’s behalf where we are not the beneficiary.

 

(5)	This amount consists of $7,128 for employer-paid contributions to Mrs. Brunecz pursuant to our 401(k) Benefit Plan.

 

50

(6)	This amount consists of $7,128 for employer-paid contributions to Mr. Gerard pursuant to our 401(k) Benefit Plan and $222 for the cash payment of fractional shares related to stock vesting that occurred in 2019.

 

(7)

This amount consists of $7,128 for employer-paid contributions to Mr. Kemmerly pursuant to our 401(k) Benefit Plan, $295 for the cash payment of fractional shares related to stock vesting that occurred in 2019 and $6,898 in costs attributable to life insurance premiums paid by us on Mr. Kemmerly’s behalf where we are not the beneficiary.

2019 GRANTS OF PLAN BASED AWARDS

 

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards												Estimated Future Payouts Under Equity Incentive Plan Awards												All Other Stock Awards: Number of Shares of Stock or Units (#)				Grant Date Fair Value ($) (9)
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)
Paul B. Kusserow
Performance-Based Restricted Stock Units(1)			2/20/2019				-				-				-				-				24,546				-							$	3,120,042
Time-Based Nonqualified Stock Options(5)			1/2/2019				-				-				-				-				-				-				80,602			$	4,161,933
Time-Vesting Restricted Stock Units(7)			1/2/2019				-				-				-				-				-				-				36,819			$	4,226,085
2019 Short Term (Cash Bonus) Incentive Plan						$	112,500			$	225,000			$	450,000				-				-				-				-				-
Scott G. Ginn
Performance-Based Restricted Stock Units(2)			2/20/2019				-				-				-				1,967				3,934				7,868				-			$	996,034
Time-Based Nonqualified Stock Options(6)			2/20/2019				-				-				-				-				-				-				4,294			$	250,293
Time-Vesting Restricted Stock Units(8)			2/20/2019				-				-				-				-				-				-				1,967			$	250,025
2019 Short Term (Cash Bonus) Incentive Plan						$	196,875			$	393,750			$	787,500				-				-				-				-				-
Christopher T. Gerard
Performance-Based Restricted Stock Units(2)			2/20/2019				-				-				-				2,361				4,721				9,442				-			$	1,195,597
Performance-Based Restricted Stock Units(4)			2/20/2019				-				-				-				-				-				-				8,090			$	1,028,319
Time-Based Nonqualified Stock Options(6)			2/20/2019				-				-				-				-				-				-				5,152			$	300,304
Time-Vesting Restricted Stock Units(8)			2/20/2019				-				-				-				-				-				-				2,361			$	300,107
2019 Short Term (Cash Bonus) Incentive Plan						$	215,625			$	431,250			$	862,500				-				-				-				-				-
Sharon Brunecz
Performance-Based Restricted Stock Units(2)			2/20/2019				-				-				-				1,328				2,656				5,312				-			$	672,666
Performance-Based Restricted Stock Units(3)			2/20/2019				-				-				-				-				-				-				4,193			$	532,972
Time-Based Nonqualified Stock Options(6)			2/20/2019				-				-				-				-				-				-				2,898			$	168,921

 

51

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards												Estimated Future Payouts Under Equity Incentive Plan Awards												All Other Stock Awards: Number of Shares of Stock or Units (#)				Grant Date Fair Value ($) (9)
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)
Time-Vesting Restricted Stock Units(8)			2/20/2019				-				-				-				-				-				-				1,328			$	168,802
2019 Short Term (Cash Bonus) Incentive Plan						$	125,000			$	250,000			$	500,000				-				-				-				-				-
David L. Kemmerly
Performance-Based Restricted Stock Units(2)			2/20/2019				-				-				-				1,328				2,656				5,312				-			$	672,666
Time-Based Nonqualified Stock Options(6)			2/20/2019				-				-				-				-				-				-				2,898			$	168,921
Time-Vesting Restricted Stock Units(8)			2/20/2019				-				-				-				-				-				-				1,328			$	168,802
2019 Short Term (Cash Bonus) Incentive Plan						$	125,000			$	250,000			$	500,000				-				-				-				-				-

 

(1)   The amounts shown in this row reflect the number of performance-based restricted stock units granted to Mr. Kusserow on January 2, 2019, subject to achievement of the 2019 performance metric, which performance metric was established by the Compensation Committee on February 20, 2019 and certified as achieved on February 12, 2020. The shares will vest upon the date of certification of the 2021 performance measure, provided that Mr. Kusserow remains continuously employed by the Company through the end of the term of his Amended and Restated Employment Agreement.

(2)   The amounts shown in this row reflect the threshold (50% of target), target (100%) and maximum (200% of target) number of performance-based restricted stock units granted to Mr. Ginn, Mrs. Brunecz, Mr. Gerard and Mr. Kemmerly on February 20, 2019, subject to achievement of the 2019 performance metric, which performance metric was established by the Compensation Committee on February 20, 2019 and certified as achieved at 199.2% of the target number of shares on February 12, 2020, resulting in the issuance of the following number of shares: Mr. Ginn, 7,836; Mr. Gerard, 9,406; Ms. Brunecz, 5,292; and Mr. Kemmerly, 5,292. One-fourth of the shares vested on the date of certification of achievement by the Compensation Committee, and the remaining shares will vest in equal amounts on February 20, 2021, February 20, 2022 and February 20, 2023, provided that the awardee is continuously employed by the Company through each such date.

(3)   The amounts shown in this row reflect the number of performance-based restricted stock units granted to Mrs. Brunecz on July 27, 2018, subject to achievement of the 2019 performance metric, which performance metric was established by the Compensation Committee on February 20, 2019 and certified as achieved on February 12, 2020. The shares vest ratably in one-third increments on July 27, 2020, July 27, 2021 and July 27, 2022, provided that the awardee is continuously employed by the Company through each such date.

(4)   The amounts shown in this row reflect the number of performance-based restricted stock units granted to Mr. Gerard on January 20, 2017, subject to achievement of the 2019 performance metric, which performance metric was established by the Compensation Committee on February 20, 2019 and certified as achieved on February 12, 2020. One-third of the shares vested on January 20, 2020 and the remaining two-thirds of the shares vest on January 20, 2021, provided that the awardee is continuously employed by the Company through each such date.

(5)   The amounts shown in this row reflect the number of time-based non-qualified stock options granted to Mr. Kusserow on January 2, 2019. The options vest ratably in one-third increments on January 2, 2020, January 2, 2021 and January 2, 2022, provided that, with respect to the first two tranches, Mr. Kusserow remains continuously employed by the Company on each such date, and in the case of the third and final tranche, that he remains continuously employed by the Company until the end of the term of his Amended and Restated Employment Agreement.

(6)   The amounts shown in this row reflect the number of time-based non-qualified stock options granted to Mr. Ginn, Mrs. Brunecz, Mr. Gerard and Mr. Kemmerly on February 20, 2019. The options vest ratably in one-fourth increments on February 20, 2020, February 20, 2021, February 20, 2022 and February 20, 2023, provided that the awardee is continuously employed by the Company through each such date.

(7)   The amounts shown in this row reflect the number of time-vesting only restricted stock units granted to Mr. Kusserow on January 2, 2019. The shares vest ratably in one-third increments on January 2, 2020, January 2, 2021 and January 2, 2022.

 

52

(8)   The amounts shown in this row reflect the number of time-vesting only restricted stock units granted to Mr. Ginn, Mrs. Brunecz, Mr. Gerard and Mr. Kemmerly on February 20, 2019. The shares vest ratably in one-fourth increments on February 20, 2020, February 20, 2021, February 20, 2022 and February 20, 2023, provided that the awardee is continuously employed by the Company through each such date.

(9)   The amounts shown in this column reflect the “grant date fair value” of the time-based restricted stock units, time-based stock options and performance-based restricted stock units granted to each of our Named Executive Officers during the fiscal year 2019. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award based on the probable outcome of the award conditions. Assumptions used in the calculation of this amount are included in Note 9 to our audited financial statements for the year ended December 31, 2019, as included in our Annual Report on Form 10-K filed with the SEC on February 19, 2020. There can be no assurance that the grant date fair value of the nonvested stock awards or the restricted stock units will ever be realized. As described further in the CD&A under the heading “2019 Long-Term Incentives (Equity-Based Compensation)” based on actual 2019 performance, each of the named executive officers other than Mr. Kusserow earned 199.2% of the target number of shares pursuant to their respective 2019 performance-based restricted stock unit awards.

 

53

OUTSTANDING EQUITY AWARDS AT 2019 FISCAL YEAR-END

 

		Option Awards																Stock Awards
Name		Number of Securities Underlying Unexercised Options (#)				Number of Securities Underlying Unexercised Options (#) (1)				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested ($) (2) (3)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2)
		Exercisable				Unexercisable
Paul B. Kusserow			250,000				-			$	26.65				12/16/2024				61,365			$	10,243,046				-			$	-
			62,500				-			$	26.78				3/31/2025
			62,500				-			$	26.78				3/31/2025
			62,500				-			$	26.78				3/31/2025
			62,500				-			$	26.78				3/31/2025
			-				80,602			$	114.78				1/2/2029
Scott G. Ginn			11,250				11,250			$	27.35				5/1/2025				20,147			$	3,362,937				-				-
			-				1,875			$	27.35				5/1/2025
			-				424			$	58.69				7/19/2027
			3,498				3,497			$	49.25				10/18/2027
			1,875				3,750			$	27.35				5/1/2025
			-				4,294			$	127.11				2/20/2029
Christopher T. Gerard			7,892				15,783			$	46.35				1/20/2027				36,037			$	6,015,296				-				-
			-				5,152			$	127.11				2/20/2029
Sharon Brunecz			4,367				13,101			$	93.76				7/27/2028				19,897			$	3,321,207				-				-
			-				2,898			$	127.11				2/20/2029
David L. Kemmerly			-				18,750			$	27.35				5/1/2025				13,911			$	2,322,024				-				-
			-				3,125			$	27.35				5/1/2025
			-				6,250			$	27.35				5/1/2025
			-				2,898			$	127.11				2/20/2029

 

(1)   The contractual term of each grant of stock option awards is a ten-year period.

(2)   Market value is based on the closing price on December 31, 2019 of $166.92.

(3)   The amounts in this column include the number of performance-based restricted stock units (PRSUs) that were granted in 2019 to the Named Executive Officers with vesting conditions linked to the Company’s 2019 Adjusted EBITDA. Mr. Kusserow earned the 2019 performance tranche at target; each of the Named Executive Officers other than Mr. Kusserow earned 199.2% of the target number of shares. Please refer to the description of the PRSUs under the heading “2019 Long-Term Incentives (Equity-Based Compensation)” in the CD&A, above, for additional information regarding the vesting conditions.

 

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