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Share Name | Share Symbol | Market | Type |
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Health Insurance Innovations Inc | NASDAQ:HIIQ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 27.39 | 27.30 | 27.75 | 0 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3)
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Per unit price or other underlying value of transaction computed under Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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3)
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Filing Party:
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4)
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Date Filed:
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Sincerely,
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Gavin D. Southwell
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President and Chief Executive Officer
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1.
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to elect as directors the seven nominees named in the accompanying proxy statement to hold office until the 2021 Annual Meeting of Stockholders and until their successors are duly elected and qualified;
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4.
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to consider and act upon such other business as may properly come before the Annual Meeting or at any adjournments or postponements thereof.
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By Order of the Board of Directors
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Erik M. Helding
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Chief Financial Officer, Treasurer, and Secretary
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April 17, 2020
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Time and Place
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May 12, 2020
12:30 p.m., Eastern Time
Benefytt Technologies, Inc.
3450 Buschwood Park Dr., Suite 200
Tampa, Florida 33618
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Items to be Voted Upon at the Meeting
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You are being asked to:
1. elect seven nominees specified under "Proposal 1: Election of Directors" to hold office until the 2021 Annual Meeting of Stockholders and until their successors are duly elected and qualified;
2. approve, on an advisory basis, Named Executive Officer compensation;
3. to ratify the appointment of Grant Thornton LLP as independent auditors of the Company; and
4. consider and act upon such other business as may properly come before the Annual Meeting or at any adjournments or postponements thereof.
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Who May Vote
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You are entitled to vote your common stock if our records show that you held your shares as of the close of business on the record date, March 30, 2020 (the “Record Date”). Each share of our Class A common stock and Class B common stock will entitle its holder to one vote on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on the election of directors and on all other matters presented to stockholders for their vote or approval, except as otherwise required by law. As of the Record Date, there were 13,203,527 shares of the Company’s Class A common stock outstanding and 1,016,667 shares of the Company’s Class B common stock outstanding.
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(a) Paul E. Avery
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(e) Robert S. Murley
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(b) Anthony J. Barkett
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(f) Peggy B. Scott
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(c) John A. Fichthorn
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(g) Gavin D. Southwell
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(d) Paul G. Gabos
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OUR BOARD RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
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Name(1)
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Fees
Earned or Paid in Cash ($) |
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Stock
Awards ($)(2) |
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Option Awards ($)(3)
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Total ($)
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Paul E. Avery(4)
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64,036
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75,000
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—
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139,036
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Anthony J. Barkett(4)
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73,922
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75,000
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—
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148,922
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Ellen M. Duffield(4)(6)
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43,086
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75,000
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—
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118,086
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John A. Fichthorn(4)
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55,910
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75,000
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—
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130,910
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Paul G. Gabos(4)
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113,263
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75,000
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—
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188,263
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Michael W. Kosloske(5)
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27,500
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—
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—
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27,500
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Robert S. Murley(4)
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59,300
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75,000
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—
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134,300
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Peggy B. Scott(4)
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46,832
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75,000
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—
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121,832
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(1)
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Mr. Southwell's compensation is reflected under the Summary Compensation Table as a Named Executive Officer. As an employee, Mr. Southwell is not entitled to participate in the compensation plan for non-employee directors.
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(2)
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The amounts in the "Stock Awards" column represent the aggregate grant date fair value pursuant to ASC 718 for restricted stock granted in 2019. The assumptions used in determining the grant date fair value under ASC 718 can be found in Notes 1 and 12 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 4, 2020. As of December 31, 2019, each then-serving director held unvested restricted stock shown in the following table:
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Name
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Unvested Restricted Stock as of December 31, 2019
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Paul E. Avery
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4,817
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Anthony J. Barkett
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4,817
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Ellen M. Duffield
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3,513
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John A. Fichthorn
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4,817
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Paul G. Gabos
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4,817
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Robert S. Murley
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4,817
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Peggy B. Scott
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3,513
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(3)
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No stock options or stock appreciation rights relating to the Company’s Class A common stock ("SARs") were granted to our non-employee directors during 2019. As of December 31, 2019, each then-serving director had the following outstanding SARs:
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Name
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Outstanding Stock Options as of December 31, 2019
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Paul E. Avery
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30,000
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Anthony J. Barkett
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30,000
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Ellen M. Duffield
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—
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John A. Fichthorn
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—
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Paul G. Gabos
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20,000
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Robert S. Murley
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20,000
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Peggy B. Scott
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—
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(4)
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Each non-employee director received an award of 3,513 shares of restricted stock with an estimated value of $75,000 on May 14, 2019.
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(5)
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Compensation paid to Mr. Kosloske reflects amounts paid for services through the 2019 Annual Meeting as a non-employee director, at which time he ceased being a director of the Company.
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(6)
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Ms. Duffield resigned from the Board on April 9, 2020.
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Name
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Board
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Audit
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Nominating
and Corporate Governance |
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Compensation
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Acquisition
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Risk and Compliance
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Paul E. Avery
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Member
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Chair
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Member
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Member
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Anthony J. Barkett
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Member
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Member
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Chair
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Member
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John A. Fichthorn
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Member
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Member
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Chair
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Member
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Paul G. Gabos
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Chair
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Chair
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Member
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Member
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Member
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Robert S. Murley
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Member
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Member
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Chair
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Peggy B. Scott
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Member
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Member
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Member
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Gavin D. Southwell
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Member
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Member
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Member
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Number of Meetings
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11
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5
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1
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2
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1
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4
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each person known by us to be a beneficial owner of more than 5.0% of any class of our outstanding common stock;
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each of our directors and director nominees;
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each of our Named Executive Officers; and
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all directors and executive officers as a group.
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Shares of Class A
Common Stock Beneficially Owned |
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Shares of Class B
Common Stock Beneficially Owned |
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Combined
Voting Power(1) |
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Name of Beneficial Owner
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Number of
Shares |
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Percent
of Class |
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Number of
Shares |
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Percent
of Class |
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Named Executive Officers and Directors:
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Gavin D. Southwell(2)(4)
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682,804
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5.1%
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—
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—
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4.8%
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Michael D. Hershberger(4)(14)
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166,868
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1.3%
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—
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—
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1.2%
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John A. Fichthorn(2)(4)(13)
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123,483
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*
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—
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—
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*
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Anthony J. Barkett(2)(4)
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89,288
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*
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—
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—
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*
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Paul G. Gabos(2)(4)
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87,816
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*
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—
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—
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*
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Robert S. Murley(2)(4)
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58,005
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*
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—
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—
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*
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Paul E. Avery(2)(4)
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44,100
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*
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—
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—
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*
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Erik M. Helding(2)(4)
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30,000
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*
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—
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—
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*
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Ellen M. Duffield (Former Director)(2)(4)(15)
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3,513
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*
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—
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—
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*
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Peggy B. Scott(2)(4)
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3,513
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*
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—
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—
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*
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All executive officers and directors as a group (10 persons)(5)
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1,289,390
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9.8%
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—
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—
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8.3%
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Other 5 % Stockholders:
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P2 Capital Partners, LLC(10)
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1,630,000
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12.3%
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—
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—
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11.5%
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Michael W. Kosloske(3)
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1,339,598
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10.1%
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1,016,667
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100%
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9.4%
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No Street GP, LP(6)
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1,150,000
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8.7%
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—
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—
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8.1%
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Voss Capital, LLC(12)
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1,121,701
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8.5%
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—
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—
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7.9%
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Vanguard Group(8)
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1,072,872
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8.1%
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—
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—
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7.5%
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Cannell Capital, LLC(7)
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958,080
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7.3%
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—
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—
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6.7%
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Atom Investors, LP(11)
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826,809
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6.3%
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—
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—
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5.8%
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BlackRock, Inc.(9)
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737,867
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5.6%
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—
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—
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5.2%
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*
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Less than 1.0%.
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(1)
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Except as otherwise required by law, holders of Class A common stock and Class B common vote together as a single class with each share of either class entitled to one vote. Subject to the terms of an exchange agreement, each share of our Class B common stock, together with a Series B Membership Interest of Health Plan Intermediaries Holdings, LLC, our operating subsidiary (“HPIH”), is exchangeable for a share of our Class A common stock on a one-for-one basis. See “Certain Relationships and Related Party Transactions-- Exchange Agreement.” In this table, beneficial ownership of the Class B common stock and the related Series B Membership Interests in HPIH are reflected as beneficial ownership of the shares of Class A common stock for which they may be exchanged. When a share of Class B common stock is so exchanged, it is canceled, and accordingly, the percentage ownership of Class A common stock is the same as the combined voting power for each beneficial owner.
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(2)
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The business address for Ms. Duffield and Ms. Scott, and Messrs. Southwell, Avery, Barkett, Fichthorn, Gabos, Helding, and Murley, is c/o Benefytt Technologies, Inc., 3450 Buschwood Park Dr., Suite 200, Tampa, Florida 33618.
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(3)
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The shares of Mr. Kosloske include 1,005,701 shares of Class B common stock held of record by Health Plan Intermediaries, LLC (“HPI”) and 10,966 shares of Class B common stock held by Health Plan Intermediaries Sub, LLC (“HPIS”). Mr. Kosloske is the primary manager of HPI, and has sole voting and dispositive power over the shares held by HPI. HPI is the sole managing member of HPIS and has sole voting and dispositive power over the shares held by HPIS. Mr. Kosloske, by virtue of his control of HPI and HPI’s control of HPIS, is deemed to beneficially own all the shares of Class B common stock held of record by each of HPI and HPIS. The shares of Class B common stock, together with the Series B Membership Interests of HPIH are exchangeable, at Mr. Kosloske’s election, for equal number of shares of Class A common stock. On February 12, 2020, Mr. Kosloske notified the Company that he has elected to exchange all remaining shares of Class B common stock, together with an equal number of Series B Membership Interests in HPIH, into an aggregate of 1,016,667 shares of our Class A common stock. Under the terms of the Exchange Agreement, the closing of the Final Class B Exchange is scheduled to occur on April 7, 2020 unless the Company elects to effectuate the Final Class B Exchange on an earlier date. Upon the closing of the Final Class B Exchange, the Company will cease to have any shares of Class B common stock outstanding and will own 100% of the equity interest in HPIH. Based solely on information obtained from a Form 4 filed by Michael Kosloske with the SEC on February 19, 2020 and without independent investigation of the disclosures contained therein, the shares of Mr. Kosloske also include 317,288 shares of Class A common stock owned directly by Mr. Kosloske and 5,643 shares of Class A common stock owned by Mr. Kosloske’s wife, Lori Kosloske. The business address of Mr. Kosloske, listed in the Form 4 is 16221 Villarreal de Avila, Tampa, FL 33613.
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(4)
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The shares for certain of our executive officers and directors include awards of restricted shares of Class A common stock that have not vested as of March 30, 2020, as follows: Mr. Southwell: 387,500 shares, Mr. Helding: 30,000 shares, Messrs. Murley, Avery, Barkett, Fichthorn, and Gabos, each: 4,817 shares, and Ms. Duffield and Ms. Scott, each: 3,513 shares. The shares for certain of our executive officers and directors include shares subject to outstanding SARs that are exercisable as of March 30, 2020 or within 60 days thereof, as follows: Mr. Southwell: 128,333, Mr. Hershberger: 88,472, and Mr. Murley: 20,000.
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(5)
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The shares for all current executive officers and directors as a group include 448,611 unvested restricted shares.
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(6)
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Based solely on information obtained from a Form 13G filed by No Street GP LP with the SEC on February 14, 2020 and without independent investigation of the disclosures contained therein. The business address of No Street GP LP listed in the Schedule 13G is 505 Montgomery Street, Suite 1250, San Francisco, CA 94111.
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(7)
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Based solely on information obtained from a Schedule 13F filed by Cannell Capital, LLC with the SEC on February 13, 2020 and without independent investigation of the disclosures contained therein. The business address of Cannell Capital, LLC. listed in the Schedule 13F is 245 Meriwether Circle, Alta, WY 83414.
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(8)
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Based solely on information obtained from a Schedule 13G filed by Vanguard Group Inc. with the SEC on February 11, 2020 and without independent investigation of the disclosures contained therein. The business address of Vanguard Group Inc. listed in the Schedule 13G is 100 Vanguard Blvd., Malvern, PA 19355.
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(9)
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Based solely on information obtained from a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 5, 2020 and without independent investigation of the disclosures contained therein. The business address of BlackRock, Inc. listed in the Schedule 13G/A is 55 East 52nd Street, New York, NY 10055.
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(10)
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Based solely on information obtained from a Schedule 13F filed by P2 Capital Partners, LLC with the SEC on February 14, 2020 and without independent investigation of the disclosures contained therein. The business address of P2 Capital Partners, LLC listed in the Schedule 13F is 590 Madison Avenue, 25th Floor, New York, NY 10022.
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(11)
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Based solely on information obtained from a Schedule 13G/A filed by Atom Investors LP with the SEC on February 14, 2020 and without independent investigation of the disclosures contained therein. The business address of Atom Investors LP listed in the Schedule 13G/A is 3711 S. Mopac Expressway, Building One, Suite 100, Austin, TX 78746.
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(12)
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Based solely on information obtained from a Schedule 13D/A filed by Voss Capital, LLC with the SEC on March 5, 2020 and without independent investigation of the disclosures contained therein. The business address of Voss Capital, LLC listed in the Schedule 13D/A is 3773 Richmond, Suite 500, Houston, Texas 77046.
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(13)
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Includes 109,362 shares held by Dialectic Antithesis Partners, LP. BR Dialectic Capital Management, LLC is the investment manager of Dialectic Antithesis Partners, LP and, as such, shares voting and dispositive power over the securities held by Dialectic Antithesis Partners, LP. Mr. Fichthorn is a portfolio manager for BR Dialectic Capital Management, LLC and therefore shares voting and dispositive power over the securities, but Mr. Fichthorn disclaims beneficial ownership of any securities in which he does not have a pecuniary interest or that he does not directly own. BR Dialectic Capital Management, LLC is a wholly owned subsidiary of B. Riley Financial, Inc., a publicly traded Delaware corporation.
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(14)
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Based solely on information obtained from a Form 4 filed by Michael D. Hershberger with the SEC on November 14, 2019 and without independent investigation of subsequent transactions of the disclosures contained therein. The last known business address of Michael D. Hershberger listed in the Form 4 is 15438 N. Florida Ave., Suite 200, Tampa, FL 33613.
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(15)
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Ms. Duffield resigned as a director of the Company on April 9, 2020.
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Name
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Title
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Gavin D. Southwell
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President and Chief Executive Officer
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Erik M. Helding
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Chief Financial Officer, Secretary and Treasurer
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Michael D. Hershberger (1)
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Former Chief Financial Officer, Secretary and Treasurer
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(1)
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Mr. Hershberger’s service as the Company’s Chief Financial Officer, Treasurer and Secretary ceased effective November 15, 2019. Mr. Hershberger remained employed by the Company until December 31, 2019.
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Executive Compensation Governance Practices
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What We Do
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ü
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100% independent Compensation Committee
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ü
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Incentive compensation based on clear, measurable goals with key financial metrics that drive business performance
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What We Don't Do
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û
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No excessive perquisites
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Element
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Description
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Objectives
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Base Salary
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Annual cash compensation
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Retention
Competitive practices
Individual contribution
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Annual Cash Incentives
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Annual cash incentive with target awards and performance goals established in advance
Payments can be higher (subject to a 200% cap) or lower than target, based on adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")
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Drive superior performance
Competitive practices
Retention
Stockholder alignment
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Long-Term Incentives
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Equity-based time-vesting and performance-vesting awards established on an individual basis
Performance vesting awards are earned only if Adjusted EBITDA goals are achieved
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Drive superior performance
Focus on long-term success
Executive equity ownership
Competitive practices
Retention
Stockholder alignment
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•
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Competitive pay assessment;
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•
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Stock ownership and equity stake analysis;
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•
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Review of the Company's equity grant practices;
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•
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Business performance analysis;
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•
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"ISS Pay for Performance Analysis;" and
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•
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Provided the Company with a two-year compensation proposal.
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•
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In similar industries and where the Company competes for business;
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•
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Likely sources of, or competition for, executive talent;
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•
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Reasonably comparable in size, as measured by revenue and market capitalization; and
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•
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Reasonably similar in organizational structure and complexity.
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Peer Group Companies(1)
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|||||||||
Company
|
|
Market Capitalization
($ in millions)
|
|
Revenue
($ in millions)
|
|
Employee Population
|
|||
Actua Corporation
|
|
515
|
|
|
109
|
|
|
700
|
|
Atlas Financial Holdings, Inc.
|
|
217
|
|
|
178
|
|
|
230
|
|
Baldwin & Lyons, Inc.
|
|
380
|
|
|
319
|
|
|
455
|
|
Benefitfocus, Inc.
|
|
884
|
|
|
233
|
|
|
1,430
|
|
Blucora, Inc.
|
|
615
|
|
|
456
|
|
|
476
|
|
Castlight Health, Inc.
|
|
513
|
|
|
102
|
|
|
381
|
|
Citizens, Inc.
|
|
492
|
|
|
240
|
|
|
455
|
|
eHealth, Inc.
|
|
195
|
|
|
187
|
|
|
944
|
|
HCI Group, Inc.
|
|
402
|
|
|
262
|
|
|
322
|
|
HealthStream, Inc.
|
|
795
|
|
|
226
|
|
|
1,065
|
|
Heritage Insurance Holdings, Inc.
|
|
455
|
|
|
439
|
|
|
310
|
|
Independence holding Company
|
|
334
|
|
|
354
|
|
|
450
|
|
Kinsale Capital Group, Inc.
|
|
713
|
|
|
142
|
|
|
144
|
|
Majesco
|
|
222
|
|
|
126
|
|
|
2,134
|
|
Patriot National, Inc.
|
|
125
|
|
|
233
|
|
|
1,145
|
|
State National Companies, Inc.
|
|
581
|
|
|
217
|
|
|
400
|
|
The Rubicon Project, Inc.
|
|
364
|
|
|
278
|
|
|
572
|
|
25th Percentile
|
|
334
|
|
|
178
|
|
|
381
|
|
Median
|
|
455
|
|
|
233
|
|
|
455
|
|
75th Percentile
|
|
581
|
|
|
278
|
|
|
944
|
|
Benefytt Technologies, Inc.(2)
|
|
294
|
|
|
221
|
|
|
173
|
|
(1)
|
Market capitalization, revenue, and employee count were as of December 31, 2016, reflecting the most up-to-date information used at the time of the last periodic review cycle performed by the Company.
|
(2)
|
Data for the Company reflects projections used at the time of the last periodic review cycle performed by the Company.
|
NEO
|
|
2019 Annual Base Salary
|
||
Gavin D. Southwell
|
|
$
|
750,000
|
|
Erik M. Helding
|
|
$
|
450,000
|
|
Michael D. Hershberger
|
|
$
|
350,000
|
|
Name
|
|
Target Award Level as a Percentage of Base Salary
|
|
Maximum Award Level as a Percentage of Base Salary
|
Gavin D. Southwell
|
|
100%
|
|
200%
|
Erik M. Helding
|
|
100%
|
|
150%
|
Michael D. Hershberger
|
|
60%
|
|
120%
|
Performance Measure
|
|
Threshold
|
|
Target
|
|
Superior
|
|
Actual
|
||||||||
Adjusted EBITDA
|
|
$
|
70,800
|
|
|
$
|
78,700
|
|
|
$
|
86,600
|
|
|
$
|
83,300
|
|
Measurement Year
|
|
Adjusted EBITDA Performance Goal (%)
|
|
Adjusted EBITDA Performance Goal ($)
|
|
Adjusted EBITDA Actual
|
||||
2018 Base Year
|
|
|
|
—
|
|
$
|
59,431
|
|
||
2019
|
|
1.13(a)
|
|
$
|
77,157
|
|
|
$
|
83,300
|
|
2020
|
|
1.28
|
|
$
|
87,399
|
|
|
—
|
||
2021
|
|
1.45
|
|
$
|
99,007
|
|
|
—
|
||
2022
|
|
1.64
|
|
$
|
111,980
|
|
|
—
|
||
2023
|
|
1.86
|
|
$
|
127,002
|
|
|
—
|
(a)
|
The Committee determined that an upward adjustment of $10.0 million to the 2019 Adjusted EBITDA performance goal was warranted in light of the expected performance of the Company's 2019 acquisitions as disclosed in Note 2 of its Annual Report on Form 10-K filed with the SEC on March 4, 2020. Adjusted EBITDA was calculated for purposes of the performance based restricted shares in the same manner as the calculation used for purposes of the Cash Bonus Plan, as described above under the heading “Annual Incentive Cash Plan.”
|
Name and Principal Position
|
|
Year
|
|
Salary ($)(1)
|
|
Bonus ($)
|
|
Stock
Awards ($)(2)(3) |
|
Option
Awards ($)(2)(4) |
|
Non-Equity Incentive Plan Compensation ($)
|
|
All Other
Compensation ($) |
|
Total ($)
|
Gavin D. Southwell(5)
|
|
2019
|
|
750,000
|
|
—
|
|
8,382,500
|
|
—
|
|
1,200,000
|
|
73,316
|
|
10,405,816
|
President and Chief Executive Officer
|
|
2018
|
|
650,000
|
|
—
|
|
—
|
|
—
|
|
1,500,000
|
|
88,600
|
|
2,238,600
|
|
|
2017
|
|
605,000
|
|
650,000
|
|
7,682,500
|
|
—
|
|
1,300,000
|
|
74,717
|
|
10,312,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erik M. Helding
|
|
2019
|
|
45,000
|
|
—
|
|
702,000
|
|
689,000
|
|
—
|
|
—
|
|
1,436,000
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Hershberger(6)
|
|
2019
|
|
350,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
586,376
|
|
936,376
|
Former Chief Financial Officer
|
|
2018
|
|
350,000
|
|
—
|
|
—
|
|
—
|
|
420,000
|
|
45,400
|
|
815,400
|
|
|
2017
|
|
332,000
|
|
175,000
|
|
1,448,700
|
|
—
|
|
420,000
|
|
57,400
|
|
2,433,100
|
(1)
|
Reflects actual earnings for 2019, 2018 and 2017, which may differ from approved base salaries due to the effective dates of salary increases.
|
(2)
|
The assumptions used in determining the grant date fair value of the equity awards to our NEOs under Financial Accounting Standards Board ASC 718 (“ASC 718”) can be found in Note 10 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.
|
(3)
|
Stock Award amounts equal the aggregate grant date fair value pursuant to ASC 718 for the performance share and restricted stock grants in 2019 and 2017. These amounts do not reflect the actual economic value realized by the NEOs. Although the award agreement for Mr. Southwell’s grant of performance based restricted shares shown in this table was dated January 2, 2019, for financial reporting purposes under ASC 718 the grant date did not occur until March 14, 2019 because the performance goals were not finalized until the filing of our Annual Report on Form 10-K for the year ended December 31, 2018 on that date. In accordance with the SEC’s regulations, the grant date fair value shown in this table and the Grants of Plan- Based Awards for Fiscal Year 2019 table is based on the stock price on March 14, 2019, the grant date under ASC 718, rather than January 2, 2019. The grant date fair value of the performance share grants is based on the probable outcome of the performance conditions as of the date of grant, assuming maximum performance.
|
(4)
|
Option Award amounts include the aggregate grant date fair value pursuant to ASC 718 for SARs granted. These amounts do not reflect the actual economic value realized by the NEO.
|
(5)
|
Included within All Other Compensation for Mr. Southwell for 2019 is approximately $21,200 for housing allowance, $7,900 in club related dues, and personal use of the Company's condominium valued at approximately $44,200.
|
(6)
|
Mr. Hershberger's employment agreement was amended on November 11, 2019 at which point he ceased acting as the Company's Chief Financial Officer, Secretary, and Treasurer. Pursuant to the agreement, Mr. Hershberger's employment with the Company terminated on December 31, 2019. Included within All Other Compensation for Mr. Hershberger for 2019 is approximately $17,300 for combined housing and auto allowance, approximately $9,000 in club related dues, $210,000 for accrued bonus paid in connection with his separation from the Company and $350,000 in severance, an amount equal to the sum of his annual base salary payable in 12 equal monthly installments.
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
|
|
All Other Option Awards: Number of Securities Underlying Options
|
|
Exercise or base price of option awards
|
|
Grant date fair value of stock and option awards
|
||||||||||||||||||
Name*
|
|
Grant Date
|
|
Threshold ($)
|
|
Target ($)
|
|
Maximum ($)
|
|
Threshold ($)
|
|
Target ($)
|
|
Maximum ($)
|
|
(#)
|
|
(#)
|
|
($/Sh)
|
|
($)
|
||||||||||
Gavin D. Southwell
|
|
1/2/2019 (1)
|
|
187,500
|
|
|
750,000
|
|
|
1,500,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
8,382,500
|
|
Erik M. Helding
|
|
11/15/2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
50,000
|
|
|
23.40
|
|
|
1,391,000
|
|
*
|
Mr. Hershberger had no grants of plan-based awards in fiscal year 2019.
|
(1)
|
The grant date of January 2, 2019 for Mr. Southwell’s award of performance based restricted shares shown in this table is the date on which the Board approved the award and the date of the award agreement. However, the grant date for financial reporting purposes under ASC 718 was March 14, 2019 because the performance goals were not finalized until the filing of our Annual Report on Form 10-K for the year ended December 31, 2018 on that date. In accordance with the SEC’s regulations, the grant date fair value shown in this table and the Summary Compensation Table for Fiscal Year 2019 is based on the stock price on March 14, 2019, the grant date under ASC 718, rather than January 2, 2019.
|
|
|
|
|
SAR Awards
|
|
Stock Awards
|
||||||||||||
Name
|
|
Grant Date(1)
|
|
Number of
Securities Underlying Unexercised Options (#) Exercisable |
|
Number of
Securities Underlying Unexercised Options (#)
Unexercisable
|
|
Option
Exercise Price ($)(2) |
|
Option
Expiration Date |
|
Number of
Shares that have not Vested (#) |
|
Market
Value of Shares of Stock that have not Vested ($)(3) |
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or other Rights That Have Not Vested(4)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights That Have Not Vested ($)(3)
|
Gavin D. Southwell
|
|
9/6/2016(5)
|
|
33,333
|
|
—
|
|
5.96
|
|
9/6/2023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
4/26/2016(6)
|
|
20,000
|
|
—
|
|
6.10
|
|
4/26/2023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11/15/2016(7)
|
|
75,000
|
|
25,000
|
|
10.30
|
|
11/15/2023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6/14/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
125,000
|
|
2,411,250
|
|
—
|
|
—
|
|
|
6/14/2017(8)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50,000
|
|
964,500
|
|
—
|
|
—
|
|
|
11/15/2016(8)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,000
|
|
482,250
|
|
—
|
|
—
|
|
|
1/2/2019
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
250,000
|
|
4,822,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erik M. Helding
|
|
11/15/2019(7)
|
|
—
|
|
50,000
|
|
23.40
|
|
11/15/2026
|
|
30,000
|
|
578,700
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Hershberger
|
|
7/1/2015(5)
|
|
15,000
|
|
—
|
|
4.95
|
|
7/1/2022
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
9/16/2015(5)
|
|
22,500
|
|
—
|
|
4.99
|
|
9/16/2022
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
9/16/2016(5)
|
|
40,972
|
|
—
|
|
5.20
|
|
9/16/2023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
5/21/2014(9)
|
|
10,000
|
|
—
|
|
10.45
|
|
5/21/2021
|
|
—
|
|
—
|
|
—
|
|
—
|
(1)
|
All of the outstanding equity awards described in the footnotes below were granted under our Long Term Incentive Plan.
|
(2)
|
This column represents the closing price of Benefytt Technologies' Class A common stock as reported on the NASDAQ Global Market on the date of grant.
|
(3)
|
Market value was determined by multiplying the number of shares set forth in the preceding column by $19.29, the closing price of Benefytt’s Class A common stock as reported on the NASDAQ Global Market on December 31, 2019, the last trading day of the year. This valuation does not reflect any diminution in value due to the restrictions applicable to such awards.
|
(4)
|
This column represents the executive's January 2, 2019 performance restricted share grant. Performance restricted shares are performance-vesting equity incentive awards under the Company’s Long Term Incentive Plan, that vest ratably based on the Company’s performance against metrics relating to annual Adjusted EBITDA in each of fiscal years 2019 through 2023. Any restricted shares that do not vest as a result of a performance goal not being achieved for a particular fiscal year (the “Measurement Year”) shall be forfeited unless the Company’s cumulative Adjusted EBITDA for the Measurement Year and the immediately succeeding fiscal year (the “Succeeding Year”) taken together exceed the sum of the performance goals for both of such years, in which event the restricted shares that did not vest for the Measurement Year (the “Catch-Up Vesting Shares”) will vest on the date on which the Annual Report is filed for Succeeding Year. If the Adjusted EBITDA for the Measurement Year and Succeeding Year do not exceed the sum of the performance goals for such years, then the Catch-Up Vesting Shares shall be permanently forfeited on the date on which the Annual Report for the Succeeding Year is filed. The final determination of whether the performance restricted shares vest will be determined by the Board or the Committee and will be subject to such adjustments as the Board or the Committee may determine in its discretion. Because performance as measured against the metrics was trending above target as of December 31, 2019, as required by the SEC’s regulations, the performance restricted share grants are shown at the maximum level.
|
(5)
|
Reported amounts represent SARs that vest in annual increments of 25%, 25%, and 50% on the grant anniversary dates subject to continued service to us through each vesting date.
|
(6)
|
Reported amounts represent SARs that vest in annual increments of 50% on the grant anniversary dates subject to continued service to us through each vesting date.
|
(7)
|
Reported amounts represent SARs that vest in annual increments of 25% on the grant anniversary dates subject to continued service to us through each vesting date.
|
(8)
|
Reported amounts represent Restricted Stock Awards that vest in annual increments of 25% on the grant anniversary dates subject to continued service to us through each vesting date.
|
(9)
|
Reported amounts represent SARs that vest in annual increments of 20%, 20%, 20%, and 40% on the grant anniversary dates subject to continued service to us through each vesting date.
|
|
|
Option Awards(1)
|
|
Stock Awards(2)
|
||||||||
Name*
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
|
||||
Gavin D. Southwell
|
|
—
|
|
|
—
|
|
|
146,388
|
|
|
3,689,982
|
|
Michael D. Hershberger
|
|
—
|
|
|
—
|
|
|
48,967
|
|
|
1,075,988
|
|
*
|
Mr. Helding had no option award exercises or stock awards vest during 2019.
|
(1)
|
The Company has no options outstanding, so any amounts shown in these columns would relate to SAR grants.
|
(2)
|
We computed the aggregate dollar value realized on vesting by multiplying the number of shares of stock that vested by the closing price of our common stock on the vesting date.
|
•
|
the median of the annual total compensation of all employees of our company (other than our CEO) was $56,796; and
|
•
|
the annual total compensation of our CEO was $10,405,816.
|
Name
|
|
Termination Without Cause or Resignation for Good Reason ($)
|
|
Termination due to Death ($)
|
|
Termination due to Disability ($)
|
|
Termination Upon a Change in Control ($)
|
|
Change in Control ($)
|
|||||
Gavin D. Southwell
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance
|
|
750,000
|
|
|
—
|
|
|
—
|
|
|
750,000
|
|
|
—
|
|
Annual Incentive
|
|
750,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restricted Stock
|
|
6,751,500
|
|
|
6,751,500
|
|
|
6,751,500
|
|
|
6,751,500
|
|
|
6,751,500
|
|
Performance Shares
|
|
3,616,875
|
|
|
3,616,875
|
|
|
3,616,875
|
|
|
3,616,875
|
|
|
3,616,875
|
|
Stock Appreciation Rights
|
|
224,750
|
|
|
224,750
|
|
|
224,750
|
|
|
224,750
|
|
|
224,750
|
|
Total
|
|
12,093,125
|
|
|
10,593,125
|
|
|
10,593,125
|
|
|
11,343,125
|
|
|
10,593,125
|
|
Erik M. Helding
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
|
—
|
|
Annual Incentive
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restricted Stock
|
|
578,700
|
|
|
578,700
|
|
|
578,700
|
|
|
578,700
|
|
|
578,700
|
|
Stock Appreciation Rights(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
1,478,700
|
|
|
578,700
|
|
|
578,700
|
|
|
1,028,700
|
|
|
578,700
|
|
(a)
|
SARs grant price is higher than the Company's closing price on December 31, 2019, therefore SARs have no value as of the measurement date.
|
•
|
we have been or are to be a participant;
|
•
|
the amount involved exceeded or will exceed $120,000; and
|
•
|
any of our directors or director nominees, executive officers, beneficial holders of more than 5% of our capital stock, or any member of their immediate family or person sharing their household had or will have a direct or indirect material interest.
|
|
|
Equity Compensation Plan Information
|
|||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|||
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
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
|
|
220,528
|
|
$
|
13.70
|
|
|
728,627
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
—
|
|
|
—
|
|
|
Total
|
|
220,528
|
|
|
|
728,627
|
OUR BOARD RECOMMENDS A VOTE “FOR” THE ADVISORY PROPOSAL TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION.
|
OUR BOARD RECOMMENDS A VOTE OF "FOR" FOR THE RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
Type of Fees
|
|
2019
|
|
2018
|
||||
Audit Fees*
|
|
$
|
1,166,187
|
|
|
$
|
1,340,000
|
|
Audit-Related Fees**
|
|
154,080
|
|
|
—
|
|
||
Tax Fees***
|
|
261,285
|
|
|
386,000
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
1,581,552
|
|
|
$
|
1,726,000
|
|
*
|
The 2019 and 2018 audit fees are composed of fees for professional services related to the audit of our annual financial statements, and review of interim financial statements.
|
**
|
Other audit-related fees in 2019 relate to the acquisition of TogetherHealth. For more information on business acquisitions, see Note 2 of our Annual Report on Form 10-K for the period ending December 31, 2019.
|
***
|
The 2019 and 2018 Tax Fees are composed of fees for tax compliance.
|
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