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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Magellan Health Inc | NASDAQ:MGLN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 94.99 | 94.97 | 106.00 | 0 | 01:00:00 |
|
TIME AND DATE:
|
| | 7:30 a.m., Central Time, on Wednesday, June 17, 2020 | |
|
PLACE:
|
| | Five Cowboys Way, Suite 300, Frisco, Texas 75034 | |
|
PURPOSE:
|
| |
(1)
To elect nine (9) members of the board of directors to serve until our 2021 annual meeting;
|
|
| | | |
(2)
To approve in an advisory vote the compensation of our named executive officers;
|
|
| | | |
(3)
To determine in an advisory vote whether to hold a stockholder vote to approve the compensation of our named executive officers every one, two or three years;
|
|
| | | |
(4)
To ratify the appointment of Ernst & Young LLP as our independent auditor for the fiscal year 2020; and
|
|
| | | |
(5)
To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
|
|
|
RECORD DATE:
|
| | You can vote if you were a stockholder of record at the close of business on April 20, 2020. | |
|
PROXY VOTING:
|
| | It is important that you vote your shares. You can vote your shares by completing and returning the proxy card sent to you, or by following the online voting instructions. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement. | |
| | | |
David Haddock
Secretary |
|
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| Solicitation | | | | | 66 | | |
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|
Proposal
Number |
| |
Proposal
|
| |
Board
Recommendation |
| |
Affirmative Vote
Required For Approval |
| |
Broker
Discretionary Voting Allowed |
| |
Effect of
Broker Non-Votes |
| |
Effect of
Abstentions |
|
|
1
|
| | Elect as directors nine (9) nominees to serve until the 2021 annual meeting | | |
FOR each
Nominee |
| | Majority of votes cast(1) | | |
No
|
| | None(2) | | | None(2) | |
|
2
|
| | Cast an advisory vote to approve our executive compensation | | | FOR | | | Majority of votes present and entitled to vote | | |
No
|
| | None(3) | | | Against(4) | |
|
3
|
| | Cast an advisory vote on the frequency of our stockholder vote to approve our executive compensation | | |
EVERY YEAR
|
| | Plurality of votes present and entitled to vote(5) | | |
No
|
| | None(3) | | | None(3) | |
|
4
|
| | Ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal year 2020 | | | FOR | | | Majority of votes present and entitled to vote | | |
Yes
|
| | None(3) | | | Against(4) | |
Name and Address of Beneficial Owner
|
| |
Amount and Nature of
Beneficial Ownership(1) |
| |
Percent of
Class 1(1) |
| ||||||
BlackRock, Inc.(2)
55 East 52nd Street New York, NY 10055 |
| | | | 3,470,513 | | | | | | 13.9 | | |
The Vanguard Group, Inc.(3)
100 Vanguard Boulevard Malvern, PA 19355 |
| | | | 2,370,739 | | | | | | 9.5 | | |
Starboard Value LP(4)
777 Third Avenue, 18th Floor New York, NY 10017 |
| | | | 2,369,100 | | | | | | 9.5 | | |
Dimensional Fund Advisors LP(5)
Building One 6300 Bee Cave Road Austin, TX 78746 |
| | | | 2,046,722 | | | | | | 8.2 | | |
Name of Beneficial Owner
|
| |
Amount and Nature
of Beneficiary Ownership(1)(2) |
| |
Percent of Class(3)
|
| ||||||
Steven J. Shulman
|
| | | | 24,540 | | | | | | * | | |
Swati Abbott
|
| | | | 3,936 | | | | | | * | | |
Michael S. Diament
|
| | | | 38,365 | | | | | | * | | |
Peter A. Feld(4)
|
| | | | 2,371,887 | | | | | | 9.5 | | |
Perry G. Fine, M.D
|
| | | | 12,707 | | | | | | * | | |
G. Scott MacKenzie
|
| | | | 7,683 | | | | | | * | | |
William J. McBride
|
| | | | 38,365 | | | | | | * | | |
Leslie V. Norwalk
|
| | | | 2,787 | | | | | | * | | |
Guy P. Sansone
|
| | | | 5,062 | | | | | | * | | |
Kenneth J. Fasola
|
| | | | — | | | | | | — | | |
Jonathan N. Rubin
|
| | | | 204,542 | | | | | | * | | |
Mostafa Kamal
|
| | | | 57,748 | | | | | | * | | |
Daniel N. Gregoire(5)
|
| | | | 57,946 | | | | | | * | | |
Caskie Lewis-Clapper
|
| | | | 96,942 | | | | | | * | | |
Barry Smith(6)
|
| | | | 740,525 | | | | | | 2.9 | | |
Mural R. Josephson
|
| | | | ―— | | | | | | — | | |
Christopher J. Chen, M.D
|
| | | | ―— | | | | | | ―— | | |
All directors and executive officers as a group (19 persons)
|
| | | | 3,663,035 | | | | | | 14.1 | | |
Name of Option Holder
|
| |
Options Held
|
| |||
Steven J. Shulman
|
| | | | — | | |
Swati Abbott
|
| | | | — | | |
Michael S. Diament
|
| | | | — | | |
Peter A. Feld
|
| | | | — | | |
Perry G. Fine, M.D
|
| | | | — | | |
G. Scott MacKenzie
|
| | | | — | | |
William J. McBride
|
| | | | — | | |
Leslie V. Norwalk
|
| | | | — | | |
Guy P. Sansone
|
| | | | — | | |
Kenneth J. Fasola
|
| | | | — | | |
Jonathan N. Rubin
|
| | | | 167,576 | | |
Mostafa Kamal
|
| | | | 50,590 | | |
Daniel N. Gregoire
|
| | | | 55,923 | | |
Caskie Lewis-Clapper
|
| | | | 72,755 | | |
Barry Smith
|
| | | | 720,701 | | |
Mural R. Josephson
|
| | | | ―— | | |
Christopher J. Chen, M.D
|
| | | | ―— | | |
All directors and executive officers as a group
|
| | | | 1,067,545 | | |
| |
Corporate Governance Highlights
|
| |
| |
We are committed to meeting high standards of corporate governance, business conduct and ethical behavior in operating our business. To this end, we have adopted the following governance practices:
•
Director Independence — All of our directors, other than Mr. Fasola, our CEO, are independent.
•
CEO and Chairman Roles Separated — We have separated the role of our CEO, Mr. Fasola, from the role of our chairman, Mr. Shulman.
•
Annual Director Elections — Our directors are now all subject to election each year. We formerly had a classified board with three classes of directors, only one of which was subject to election in any year, but we proposed and then implemented a plan to declassify our board.
•
Nominating/Corporate Governance Committee — We have formed a committee of our board of directors to review and implement corporate governance policies and practices.
•
Majority Voting Policy — We have adopted a policy which requires any director who does not obtain a majority vote of the stockholders to submit his or her resignation for consideration by our Nominating/Corporate Governance Committee.
•
Stock Ownership Guidelines — Our directors are required to maintain a share ownership position equal to at least five times their annual retainer. Our executive officers are also required to maintain specified share ownership levels, including five times his base salary for our CEO.
•
Independent Compensation Consultant — We annually consult with a nationally-recognized independent consultant to provide us with comparable company and other compensation information supporting our executive compensation decisions.
•
Clawback Policy — We have adopted a clawback compensation recovery policy which applies in the event of a material financial restatement, and our incentive compensation plans include forfeiture and clawback provisions for conduct injurious to the company.
•
Absence of Rights Plan — We do not have a stockholder rights plan, commonly known as a “poison pill.”
•
Ethics Codes — We have adopted codes of ethics for our directors and for our senior executive officers and a code of conduct which covers all of our employees.
•
Anti-Hedging and Pledging Policy — Our equity plans and our stock trading policy prohibit recipients of equity awards from engaging in hedging transaction or from pledging equity securities as collateral for a loan.
•
Double-Trigger Change of Control Benefits — Our change of control payments to our executives are payable only if they are terminated without cause or terminate their employment for good reason in connection with a change of control, commonly known as a “double-trigger” arrangement.
|
| |
| | | |
Audit
|
| |
Compliance
|
| |
Management
Compensation |
| |
Nominating/
Corporate Governance |
|
| Steven J. Shulman | | | | | | | | | | | |
M
|
|
| Swati Abbott | | | | | |
M
|
| | | | |
C
|
|
| Michael S. Diament | | |
C*#
|
| | | | |
M
|
| | | |
| Peter A. Feld | | | | | | | | |
M
|
| | | |
| Perry G. Fine, M.D. | | |
M#
|
| | | | | | | | | |
| G. Scott MacKenzie | | | | | | | | |
C
|
| | | |
| William J. McBride | | | | | | | | | | | |
M
|
|
| Leslie V. Norwalk | | | | | |
C
|
| |
M
|
| | | |
| Guy P. Sansone | | |
M#
|
| |
M
|
| | | | | | |
| No. of Meetings in 2019† | | |
4
|
| | | | |
6
|
| |
2
|
|
Name(1)
|
| |
Fees Earned or
Paid in Cash |
| |
Stock Awards(2)
|
| |
Total
|
| |||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |||||||||
Steven J. Shulman
|
| | | | 132,091 | | | | | | 1,587,155 | | | | | | 1,719,246 | | |
Swati Abbott
|
| | | | 100,000 | | | | | | 150,052 | | | | | | 250,052 | | |
Michael S. Diament
|
| | | | 136,250 | | | | | | 150,052 | | | | | | 286,302 | | |
Peter A. Feld
|
| | | | 95,139 | | | | | | 187,132 | | | | | | 282,271 | | |
Perry G. Fine, M.D
|
| | | | 95,000 | | | | | | 150,052 | | | | | | 245,052 | | |
G. Scott MacKenzie
|
| | | | 121,250 | | | | | | 150,052 | | | | | | 271,302 | | |
William J. McBride
|
| | | | 120,000(3) | | | | | | 150,052 | | | | | | 270,052 | | |
Leslie V. Norwalk
|
| | | | 68,500 | | | | | | 187,132 | | | | | | 255,632 | | |
Guy P. Sansone
|
| | | | 72,306 | | | | | | 187,132 | | | | | | 259,438 | | |
John O. Agwunobi, M.D
|
| | | | 47,500 | | | | | | ― | | | | | | 47,500 | | |
Eran Broshy
|
| | | | 55,000 | | | | | | ― | | | | | | 55,000 | | |
Matthew J. Simas
|
| | | | 22,500 | | | | | | ― | | | | | | 22,500 | | |
Type of Fee
|
| |
Committee
|
| |
2019 Fee
|
| |||
| | | | | |
($)
|
| |||
Annual Retainer – all non-employee directors
|
| | N/A | | | | | 80,000 | | |
Committee Chair
|
| | Audit | | | | | 35,000 | | |
| | | Management Compensation | | | | | 30,000 | | |
| | |
Nominating/Corporate Governance
|
| | | | 30,000 | | |
| | | Strategic | | | | | 8,750 | | |
Committee Member
|
| | Audit | | | | | 15,000 | | |
| | | Management Compensation | | | | | 10,000 | | |
| | |
Nominating/Corporate Governance
|
| | | | 10,000 | | |
| | | Strategic | | | | | 3,750 | | |
Lead Director
|
| | N/A | | | | | 30,000 | | |
Name
|
| |
Age
|
| |
Committee Membership
|
| |
Director
Since |
| |
Independent?
|
| ||||||
Steven J. Shulman
|
| |
68
|
| | Chairman; Nominating/Corporate Governance | | | | | 2019 | | | | | | Yes | | |
Swati Abbott
|
| |
56
|
| |
Nominating/Corporate Governance (Chair); Compliance
|
| | | | 2018 | | | | | | Yes | | |
Kenneth J. Fasola
|
| |
60
|
| | N/A; CEO | | | | | 2019 | | | | | | No | | |
Peter A. Feld
|
| |
41
|
| | Management Compensation | | | | | 2019 | | | | | | Yes | | |
G. Scott MacKenzie
|
| |
56
|
| | Management Compensation (Chair) | | | | | 2016 | | | | | | Yes | | |
Leslie V. Norwalk
|
| |
54
|
| |
Compliance (Chair); Management Compensation
|
| | | | 2019 | | | | | | Yes | | |
Guy P. Sansone
|
| |
55
|
| | Audit; Compliance | | | | | 2019 | | | | | | Yes | | |
Mural R. Josephson
|
| |
71
|
| | N/A; Nominee | | | | | N/A | | | | | | Yes | | |
Christopher J. Chen, M.D.
|
| |
43
|
| | N/A; Nominee | | | | | N/A | | | | | | Yes | | |
| |
2019 Highlights
|
| |
| |
Business Results
•
During 2019, our revenues decreased by 2%, from $7.3 billion to $7.2 billion.
•
Segment profit increased by 11% from $228 million in 2018 to $253 million in 2019.
•
Adjusted net income increased by 49%, from $62 million in 2018 to $92 million in 2019.
|
| |
| |
Key Developments and Initiatives
•
In July 2019, Barry M. Smith, our chairman and chief executive officer, notified the board of directors that he intended to retire. The board engaged a search firm to conduct a comprehensive search for a new CEO. Steven J. Shulman, who currently serves as a director, was elected chairman of the board.
•
In November 2019, the board appointed Kenneth J. Fasola as the new chief executive officer of Magellan Health, Inc. to succeed Barry M. Smith.
•
In December 2019, the board appointed James Murray as president and chief operating officer of Magellan Health, Inc.
|
| |
| |
Executive Compensation Program
•
The annualized 2020 target total compensation for our new chief executive officer, Kenneth Fasola, will be 83% performance-oriented based on annual and long-term incentives.
•
Our annual bonus pool funding for 2019 was based 70% on our segment profit performance and 30% on performance against strategic objectives tied to growth, operating efficiency and leader engagement.
•
Annual bonus targets for our NEOs ranged between 65% and 150% of their base salary amounts, and the annual bonus payouts for 2019 ranged between 77.3% and 93.3% of those targets.
•
As part of our long-term equity incentive program, we granted performance-based restricted stock units (“PSUs”) that are earned based on our total shareholder return over a three-year performance period relative to a group of peer companies. For our grants made in 2019, PSUs made up 50% of the targeted award value of our Named Executive Officers’ equity compensation. Our PSU awards which were made in 2016 were settled in 2019 at 78% of the target numbers of shares and those which were made in 2017 were settled in 2020 at 64% of the target numbers of shares.
|
| |
| |
Executive Compensation Policies and Practices
•
Require double trigger acceleration of vesting of equity awards in the event of a change in control.
•
Regularly monitor share utilization relative to historic standards and versus our industry peers.
•
Conduct competitive benchmarking of compensation with an independent consultant.
•
Maintain robust stock ownership requirements.
•
Conduct an annual assessment of risk in our compensation programs and mitigate any inappropriate risk.
•
Provides for clawbacks in the event of a material financial restatement and for conduct injurious to the company.
•
Prohibits recipients of equity awards from engaging in hedging transactions or pledging equity securities.
|
| |
Compensation Element
|
| |
Objective
|
| |
Description
|
|
Base Salary | | | Attract and retain high-quality executive talent and provide basic financial security | | | Based on a number of factors including the executive’s role, individual performance and competitive compensation for similar roles in our industry | |
Annual Cash Incentive | | | Motivate executives to achieve annual financial and other operational performance goals that are key to achievement of our business strategy | | | Based on segment profit results company-wide and by business segment, and performance against strategic objectives tied to growth, operational efficiencies and leader engagement | |
Long-Term Equity Incentives | | | Align the long-term interests of executives with those of our stockholders, motivate executives to achieve long-term performance objectives and retain key talent | | | Based on a combination of 50% PSUs, whose ultimate value is measured based on total shareholder return relative to companies in the S&P Health Care Services Industry Index, and 50% stock options, whose ultimate value depends on creating stockholder value | |
Deferred Compensation | | | Provide an opportunity to save and prepare for retirement | | | Offered through our 401(k) savings plan and our non-qualified deferred compensation program, which includes company and elective contributions | |
Employee Benefits (Health and Welfare) | | | Provide protection for executives and their families in the event of death, disability or illness | | | Offered through our medical, dental and vision plans, as well as supplemental life insurance and supplemental disability insurance | |
|
2020 CEO Target Annual
Direct Compensation(1) |
| |
2019 Average NEO Target Annual
Direct Compensation(2) |
|
|
|
| |
|
|
| Centene Corp. | | | Molina Healthcare, Inc. | |
| Diplomat Pharmacy, Inc. | | | Quest Diagnostics Inc. | |
| Envision Healthcare Holdings, Inc. | | | Triple-S Management Corp. | |
|
Laboratory Corporation of America Holdings
|
| | Universal Health Services, Inc. | |
| MEDNAX, Inc. | | | WellCare Health Plans, Inc. | |
| Addus HomeCare Corp. | | | Molina Healthcare, Inc. | |
| Centene Corp. | | | Providence Service Corp. | |
| Diplomat Pharmacy, Inc. | | | Select Medical Holdings Corp. | |
| Encompass Health Corp. | | | Triple-S Management, Inc. | |
| Health Insurance Innovations, Inc. | | | Universal Health Services, Inc. | |
| MAXIMUS, Inc. | | | WellCare Health Plans, Inc. | |
| MEDNAX, Inc. | | | | |
| | | | | | | | |
Percentile
of Peer Group |
| |
Peer Group*
|
| ||||||||||||||||||
| | |
Target
|
| |
25th
Percentile |
| |
Median
|
| |
75th
Percentile |
| ||||||||||||||||||
Base Salary
|
| | | $ | 1,000,000 | | | | | | 58 | | | | | | 750,000 | | | | | $ | 995,000 | | | | | $ | 1,250,000 | | |
Total Cash Compensation
|
| | | $ | 2,000,000 | | | | | | 46 | | | | | | 1,200,000 | | | | | $ | 2,250,000 | | | | | $ | 3,528,000 | | |
Total Long-Term Compensation
|
| | | $ | 4,000,000 | | | | | | 43 | | | | | | 2,225,000 | | | | | $ | 5,200,000 | | | | | $ | 8,997,000 | | |
Total Direct Compensation
|
| | | $ | 6,000,000 | | | | | | 33 | | | | | | 3,750,000 | | | | | $ | 7,190,000 | | | | | $ | 11,972,000 | | |
Named Executive Officer
|
| |
2018
Base Salary |
| |
Percent Increase
|
| |
2019
Base Salary |
| ||||||
Mr. Fasola
|
| | | | N/A | | | |
N/A
|
| | | $ | 1,000,000 | | |
Mr. Rubin
|
| | | $ | 612,850 | | | |
3%
|
| | | $ | 631,236 | | |
Mr. Kamal
|
| | | $ | 535,600 | | | |
5%
|
| | | $ | 562,380 | | |
Mr. Gregoire
|
| | | $ | 497,760 | | | |
3%
|
| | | $ | 512,693 | | |
Ms. Lewis-Clapper | | | | $ | 425,905 | | | |
3%
|
| | | $ | 438,682 | | |
Mr. Smith
|
| | | $ | 1,200,000 | | | |
0%
|
| | | $ | 1,200,000 | | |
| | |
Segment Profit – 70% Weighting
|
| |
Achievement of Strategic
Objectives – 30% Weighting |
| ||||||||||||||||||
|
Performance as a
% of Target |
| |
Segment
Profit Amount* |
| |
Payout as %
of Target |
| |
Payout as %
of Target |
| ||||||||||||||
Maximum
|
| | | | 135% | | | | | $ | 378 | | | | | | 200% | | | | | | 200% | | |
Target
|
| | | | 100% | | | | | $ | 280 | | | | | | 100% | | | | | | 100% | | |
Threshold
|
| | | | 80% | | | | | $ | 224 | | | | | | 40% | | | | | | 0% | | |
Named Executive Officer
|
| |
Base
Salary(1) |
| |
Below
Threshold(2) |
| |
Target
Percentage(3) |
| |
Target
Amount |
| |
Maximum
Percentage(4) |
| |
Maximum
Amount(5) |
| |
Actual
2019 Bonus Amount |
| ||||||||||||
Mr. Fasola
|
| | | $ | 1,000,000 | | | |
N/A
|
| |
N/A
|
| | | | N/A | | | |
N/A
|
| | | | N/A | | | | | | N/A | | |
Mr. Rubin
|
| | | $ | 631,236 | | | |
$0
|
| |
85%
|
| | | $ | 536,551 | | | |
170%
|
| | | $ | 1,073,101 | | | | | $ | 414,861 | | |
Mr. Kamal
|
| | | $ | 562,380 | | | |
$0
|
| |
80%
|
| | | $ | 449,904 | | | |
160%
|
| | | $ | 899,808 | | | | | $ | 419,858 | | |
Mr. Gregoire | | | | $ | 512,693 | | | |
$0
|
| |
65%
|
| | | $ | 333,250 | | | |
130%
|
| | | $ | 666,501 | | | | | $ | 257,669 | | |
Ms. Lewis-Clapper
|
| | | $ | 438,682 | | | |
$0
|
| |
65%
|
| | | $ | 285,143 | | | |
130%
|
| | | $ | 570,287 | | | | | $ | 220,473 | | |
Mr. Smith
|
| | | $ | 1,200,000 | | | |
$0
|
| |
150%
|
| | | $ | 1,800,000 | | | |
300%
|
| | | $ | 3,600,000 | | | | | $ | 1,391,400(6) | | |
Named Executive Officer
|
| |
Base
Salary(1) |
| |
Equity Award
Target(2) |
| ||||||
Mr. Rubin
|
| | | $ | 612,850 | | | | | | 300% | | |
Mr. Kamal
|
| | | $ | 535,600 | | | | | | 400% | | |
Mr. Gregoire
|
| | | $ | 497,760 | | | | | | 250% | | |
Ms. Lewis-Clapper
|
| | | $ | 425,905 | | | | | | 250% | | |
Mr. Smith
|
| | | $ | 1,200,000 | | | | | | 500% | | |
| | |
RSUs
|
| |
Options
|
| |
PSUs
|
| |
Total
Value |
| ||||||||||||||||||||||||||||||
Named Executive Officer
|
| |
Number
|
| |
Value(1)
|
| |
Number
|
| |
Value(2)
|
| |
Number
|
| |
Value(3)
|
| ||||||||||||||||||||||||
| | |
(#)
|
| |
($)
|
| |
(#)
|
| |
($)
|
| |
(#)
|
| |
($)
|
| |
($)
|
| |||||||||||||||||||||
Mr. Fasola
|
| | | | 25,740 | | | | | | 1,999,998 | | | | | | ― | | | | | | ― | | | | | | 18,411 | | | | | | 1,999,987 | | | | | | 3,999,985 | | |
Mr. Rubin
|
| | | | ― | | | | | | ― | | | | | | 35,020 | | | | | | 919,275 | | | | | | 9,164 | | | | | | 919,241 | | | | | | 1,838,516 | | |
Mr. Kamal
|
| | | | ― | | | | | | ― | | | | | | 40,808 | | | | | | 1,071,210 | | | | | | 10,679 | | | | | | 1,071,210 | | | | | | 2,142,420 | | |
Mr. Gregoire
|
| | | | ― | | | | | | ― | | | | | | 23,703 | | | | | | 622,204 | | | | | | 6,203 | | | | | | 622,223 | | | | | | 1,244,427 | | |
Ms. Lewis-Clapper
|
| | | | ― | | | | | | ― | | | | | | 20,281 | | | | | | 532,376 | | | | | | 5,307 | | | | | | 532,345 | | | | | | 1,064,721 | | |
Mr. Smith
|
| | | | ― | | | | | | ― | | | | | | 114,286 | | | | | | 3,000,008 | | | | | | 29,907 | | | | | | 2,999,971 | | | | | | 5,999,979 | | |
Relative Total Shareholder Return Ranking over Measurement Period Level
|
| |
Payout
Percentage Level |
| |||
75th Percentile or Higher
|
| | | | 200% | | |
50th Percentile
|
| | | | 100% | | |
25th Percentile
|
| | | | 50% | | |
<25th Percentile
|
| | | | 0% | | |
Name
|
| |
Target
# of Shares |
| |
<25th Percentile
|
| |
25th Percentile
|
| |
50th Percentile
|
| |
75th Percentile or More
|
| |||||||||||||||||||||||||||||||||||||||
|
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| ||||||||||||||||||||||||||||||||
Mr. Fasola | | | | | 18,411 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 9,206 | | | | | | 100 | | | | | | 18,411 | | | | | | 200 | | | | | | 36,822 | | |
Name
|
| |
Target
# of Shares |
| |
<25th Percentile
|
| |
25th Percentile
|
| |
50th Percentile
|
| |
75th Percentile
or More |
| |||||||||||||||||||||||||||||||||||||||
|
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| |
%
|
| |
# of
Shares |
| ||||||||||||||||||||||||||||||||
Mr. Rubin
|
| | | | 9,164 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 4,582 | | | | | | 100 | | | | | | 9,164 | | | | | | 200 | | | | | | 18,328 | | |
Mr. Kamal
|
| | | | 10,679 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 5,340 | | | | | | 100 | | | | | | 10,679 | | | | | | 200 | | | | | | 21,358 | | |
Mr. Gregoire
|
| | | | 6,203 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 3,102 | | | | | | 100 | | | | | | 6,203 | | | | | | 200 | | | | | | 12,406 | | |
Ms. Lewis-Clapper
|
| | | | 5,307 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 2,654 | | | | | | 100 | | | | | | 5,307 | | | | | | 200 | | | | | | 10,614 | | |
Mr. Smith
|
| | | | 29,907 | | | | | | 0 | | | | | | 0 | | | | | | 50 | | | | | | 14,954 | | | | | | 100 | | | | | | 29,907 | | | | | | 200 | | | | | | 59,814 | | |
Date of Grant
|
| |
Market
Value/ Exercise Price |
| |
Expected
Term |
| |
Expected
Volatility |
| |
Risk-
Free Interest Rate |
| |
Expected
Dividend Yield |
| |
Black-
Scholes Value |
| |
If Black-Scholes
Value is Realized |
| |||||||||||||||||||||
|
Stock
Price |
| |
Increase in
Market Cap |
| ||||||||||||||||||||||||||||||||||||||
03/05/19 | | | | $ | 66.57 | | | |
7 years
|
| | | | 32.38% | | | | | | 2.63% | | | | | | 0.0% | | | | | $ | 26.25 | | | | | $ | 92.82 | | | |
$657 million
|
|
Date of Award
|
| |
Award
Value |
| |
Performance
Term |
| |
30-day
Average Stock Price |
| |
Valuation Date
Stock Price |
| |
Expected
Volatility |
| |
Expected
Dividend Yield |
| |||||||||||||||
03/05/19 | | | | $ | 100.31 | | | |
36 months
|
| | | $ | 62.00 | | | | | $ | 66.57 | | | | | | 35.32% | | | | | | 0.00% | | |
12/02/19 | | | | $ | 108.63 | | | |
36 months
|
| | | $ | 74.80 | | | | | $ | 77.70 | | | | | | 35.86% | | | | | | 0.00% | | |
| | |
RSUs
|
| |
PSUs
|
| | | | | | | ||||||||||||||||||
Named Executive Officer
|
| |
Number
|
| |
Value(1)
|
| |
Number
|
| |
Value(2)
|
| |
Total Value
|
| |||||||||||||||
| | |
(#)
|
| |
($)
|
| |
(#)
|
| |
($)
|
| |
($)
|
| |||||||||||||||
Mr. Fasola
|
| | | | 33,295 | | | | | | 2,000,031 | | | | | | 27,743 | | | | | | 1,999,993 | | | | | | 4,000,024 | | |
Mr. Rubin
|
| | | | 15,763 | | | | | | 946,883 | | | | | | 13,134 | | | | | | 946,830 | | | | | | 1,893,713 | | |
Mr. Kamal
|
| | | | 18,724 | | | | | | 1,124,751 | | | | | | 15,602 | | | | | | 1,124,748 | | | | | | 2,249,499 | | |
Mr. Gregoire(3) | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | |
Ms. Lewis-Clapper
|
| | | | 7,303 | | | | | | 438,691 | | | | | | 6,085 | | | | | | 438,668 | | | | | | 877,359 | | |
| | | |
Without Cause/For Good Reason
|
| |
Change in Control(2)
|
| ||||||||||||||||||
|
Name(1)
|
| |
Severance
Pay |
| |
Annual
Bonus |
| |
Other
Benefits(3) |
| |
Vesting
of Equity |
| |
Severance
Pay |
| |
Annual
Bonus |
| |
Other
Benefits(3) |
| |
Vesting
of Equity(4) |
|
|
Mr. Fasola
|
| |
1.5x Base Salary
|
| |
Prorated + 1.5x Target
|
| |
18 mths
|
| |
Sign-on Award(5)
|
| |
3x Base Salary
|
| |
Prorated + 3x Target
|
| |
18 mths
|
| |
All Awards
|
|
|
Mr. Rubin
|
| |
1x Base
Salary |
| |
Prorated
|
| |
12 mths
|
| |
All Awards(6)
|
| |
2x Base
Salary |
| |
Prorated + 2x Target
|
| |
18 mths
|
| |
All Awards
|
|
|
Mr. Kamal
|
| |
1x Base
Salary |
| |
Prorated
|
| |
12 mths
|
| |
―
|
| |
2x Base
Salary |
| |
Prorated + 2x Target
|
| |
18 mths
|
| |
All Awards
|
|
|
Mr. Gregoire
|
| |
1x Base
Salary |
| |
Prorated
|
| |
12 mths
|
| |
―
|
| |
2x Base
Salary |
| |
Prorated + 2x Target
|
| |
18 mths
|
| |
All Awards
|
|
|
Ms. Lewis-Clapper
|
| |
1x Base
Salary |
| |
Prorated
|
| |
12 mths
|
| |
―
|
| |
2x Base
Salary |
| |
Prorated + 2x Target
|
| |
18 mths
|
| |
All Awards
|
|
Name
|
| |
Year
|
| |
Base
Salary |
| |
Stock
Awards |
| |
Option
Awards |
| |
Non-Equity
Incentive Plan Compensation |
| |
All
Other Compensation |
| |
Total
|
| |||||||||||||||||||||
| | | | | | | | |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| ||||||||||||||||||
Kenneth J. Fasola
Chief Executive Officer(1) |
| | | | 2019 | | | | | | 130,769 | | | | | | 3,999,985 | | | | | | ― | | | | | | ― | | | | | | 750,000 | | | | | | 4,880,754 | | |
Jonathan N. Rubin
Chief Financial Officer |
| | | | 2019 | | | | | | 626,640 | | | | | | 919,241 | | | | | | 735,104 | | | | | | 414,861 | | | | | | 95,329 | | | | | | 2,791,174 | | |
| | | 2018 | | | | | | 608,389 | | | | | | 1,041,258 | | | | | | 739,358 | | | | | | ― | | | | | | 98,076 | | | | | | 2,487,081 | | | ||
| | | 2017 | | | | | | 581,450 | | | | | | 676,020 | | | | | | 438,762 | | | | | | 237,703 | | | | | | 96,836 | | | | | | 2,030,771 | | | ||
Mostafa M. Kamal
Chief Executive Officer Magellan Rx Management |
| | | | 2019 | | | | | | 555,685 | | | | | | 1,071,210 | | | | | | 856,600 | | | | | | 419,858 | | | | | | 8,400 | | | | | | 2,911,753 | | |
| | | 2018 | | | | | | 531,701 | | | | | | 909,986 | | | | | | 646,148 | | | | | | ― | | | | | | 8,250 | | | | | | 2,096,085 | | | ||
| | | 2017 | | | | | | 494,000 | | | | | | 520,033 | | | | | | 337,508 | | | | | | 177,216 | | | | | | 30,450 | | | | | | 1,559,207 | | | ||
Daniel N. Gregoire
General Counsel(2) |
| | | | 2019 | | | | | | 508,960 | | | | | | 622,223 | | | | | | 497,549 | | | | | | 257,669 | | | | | | 38,558 | | | | | | 1,924,958 | | |
| | | 2018 | | | | | | 495,321 | | | | | | 610,056 | | | | | | 433,150 | | | | | | ― | | | | | | 100,620 | | | | | | 1,639,147 | | | ||
| | | 2017 | | | | | | 484,450 | | | | | | 414,593 | | | | | | 269,085 | | | | | | 149,084 | | | | | | 93,086 | | | | | | 1,410,298 | | | ||
Caskie Lewis-Clapper
Chief Human Resources Officer |
| | | | 2019 | | | | | | 435,488 | | | | | | 532,345 | | | | | | 425,718 | | | | | | 220,473 | | | | | | 68,979 | | | | | | 1,683,003 | | |
| | | 2018 | | | | | | 422,805 | | | | | | 516,877 | | | | | | 367,016 | | | | | | ― | | | | | | 67,423 | | | | | | 1,374,121 | | | ||
Barry M. Smith
Former Chief Executive Officer(3) |
| | | | 2019 | | | | | | 1,320,994 | | | | | | 2,999,971 | | | | | | 2,398,974 | | | | | | 1,391,400 | | | | | | 246,209 | | | | | | 8,357,548 | | |
| | | 2018 | | | | | | 1,200,002 | | | | | | 5,099,943 | | | | | | 3,621,334 | | | | | | ― | | | | | | 241,437 | | | | | | 10,162,716 | | | ||
| | | 2017 | | | | | | 1,150,000 | | | | | | 3,150,008 | | | | | | 2,044,562 | | | | | | 846,000 | | | | | | 244,376 | | | | | | 7.434.946 | | |
Date of Award
|
| |
Award
Value |
| |
Performance
Term |
| |
30-Day
Average Stock Price |
| |
Valuation
Date Stock Price |
| |
Expected
Volatility |
| |
Expected Dividend
Yield |
| |||||||||||||||
03/05/19 | | | | $ | 100.31 | | | |
36 months
|
| | | $ | 62.00 | | | | | $ | 66.57 | | | | | | 35.32% | | | | | | 0.00% | | |
12/02/19 | | | | $ | 108.63 | | | |
36 months
|
| | | $ | 74.80 | | | | | $ | 77.70 | | | | | | 35.86% | | | | | | 0.00% | | |
Name
|
| |
Target Award
|
| |
Award as Settled
|
| ||||||
| | |
(# of shares)
|
| |
(# of shares)
|
| ||||||
Mr. Rubin
|
| | | | 8,867 | | | | | | 5,675 | | |
Mr. Kamal
|
| | | | 6,821 | | | | | | 4,365 | | |
Mr. Gregoire
|
| | | | 5,438 | | | | | | 3,480 | | |
Ms. Lewis-Clapper
|
| | | | 4,433 | | | | | | 2,837 | | |
Mr. Smith
|
| | | | 41,317 | | | | | | 26,443 | | |
Date of Grant
|
| |
Risk-Free
Interest Rate |
| |
Expected Life
|
| |
Expected
Volatility |
| |
Expected
Dividend Yield |
| |
Term
|
| |
Market Value/
Exercise Price |
| |
Award
Value |
| |||||||||||||||
03/05/19 | | | | | 2.54% | | | |
4 years
|
| | | | 35.56% | | | | | | 0.00% | | | |
10 yrs.
|
| | | $ | 66.57 | | | | | $ | 20.990974 | | |
Name
|
| |
Company
Matching 401(k) Contributions |
| |
SAP
Contribution |
| |
Supplemental
Life Insurance |
| |
Supplemental
LTD |
| |
Tax
Gross-Up |
| |||||||||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |||||||||||||||
Mr. Fasola
|
| | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | |
Mr. Rubin
|
| | | | 8,400 | | | | | | 69,436 | | | | | | 1,535 | | | | | | 10,494 | | | | | | 5,465 | | |
Mr. Kamal
|
| | | | 8,400 | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | |
Mr. Gregoire
|
| | | | 8,400 | | | | | | ― | | | | | | 16,222 | | | | | | 6,592 | | | | | | 7,343 | | |
Ms. Lewis-Clapper
|
| | | | 8,400 | | | | | | 48,255 | | | | | | 1,294 | | | | | | 7,400 | | | | | | 3,629 | | |
Mr. Smith
|
| | | | 8,308 | | | | | | 132,000 | | | | | | 17,943 | | | | | | 43,427 | | | | | | 44,531 | | |
Name
|
| |
Grant
Date |
| |
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards |
| |
Estimated Future Payouts
Under Equity Incentive Plan Awards |
| |
All Other Stock
Awards: Shares of Stock or Units |
| |
All Other
Option Awards: Number of Securities Underlying Options |
| |
Exercise
or Base Price of Option Awards |
| |
Grant
Date Fair Value of Stock and Option Awards |
| |||||||||||||||||||||||||||||||||||||||||||||
|
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | |
($)
|
| |
($)
|
| |
($)
|
| |
(#)
|
| |
(#)
|
| |
(#)
|
| |
(# of units)
|
| |
(# of Sh)
|
| |
($/Sh)
|
| |
($)
|
| ||||||||||||||||||||||||||||||
Kenneth J. Fasola
|
| | | | 12/2/19 | | | | | | | | | | | | | | | | | | | | | | | | 9,206 | | | | | | 18,411 | | | | | | 36,822 | | | | | | | | | | | | | | | | | | | | | | | | 1,999,987 | | |
| | | | | 12/2/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,740 | | | | | | | | | | | | | | | | | | 1,999,998 | | |
Jonathan N. Rubin
|
| | | | | | | | | | 0 | | | | | | 536,551 | | | | | | 1,073,101 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | 4,582 | | | | | | 9,164 | | | | | | 18,328 | | | | | | | | | | | | | | | | | | | | | | | | 919,241 | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,020 | | | | | | 66.57 | | | | | | 735,104 | | |
Mostafa M. Kamal
|
| | | | | | | | | | 0 | | | | | | 449,904 | | | | | | 899,808 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | 5,340 | | | | | | 10,679 | | | | | | 21,358 | | | | | | | | | | | | | | | | | | | | | | | | 1,071,210 | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 40,808 | | | | | | 66.57 | | | | | | 856,600 | | |
Daniel N. Gregoire
|
| | | | | | | | | | 0 | | | | | | 333,250 | | | | | | 666,501 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | 3,102 | | | | | | 6,203 | | | | | | 12,406 | | | | | | | | | | | | | | | | | | | | | | | | 622,223 | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,703 | | | | | | 66.57 | | | | | | 497,549 | | |
Caskie Lewis-Clapper
|
| | | | | | | | | | 0 | | | | | | 285,143 | | | | | | 570,287 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | 2,654 | | | | | | 5,307 | | | | | | 10,614 | | | | | | | | | | | | | | | | | | | | | | | | 532,345 | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,281 | | | | | | 66.57 | | | | | | 425,718 | | |
Barry M. Smith
|
| | | | | | | | | | 0 | | | | | | 1,800,000 | | | | | | 3,600,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | 14,954 | | | | | | 29,907 | | | | | | 59,814 | | | | | | | | | | | | | | | | | | | | | | | | 2,999,971 | | |
| | | | | 03/5/19 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 114,286 | | | | | | 66.57 | | | | | | 2,398,974 | | |
| | |
ICP Performance/Payout by Business Unit (as a % of Target)
|
| |||||||||||||||
| | |
Magellan Overall
|
| |
Healthcare
|
| |
Rx Management
|
| |||||||||
Segment profit performance
|
| | | | 89.2% | | | | | | 90.5% | | | | | | 89.4% | | |
Strategic objectives performance
|
| | | | 100% | | | | | | 100% | | | | | | 100% | | |
Segment profit payout (weighted 70%)
|
| | | | 67.6% | | | | | | 71.6% | | | | | | 68.2% | | |
Strategic objectives payout (weighted 30%)
|
| | | | 100% | | | | | | 100% | | | | | | 100% | | |
Total ICP payout relative to target amounts
|
| | | | 77.3% | | | | | | 80.1% | | | | | | 77.8% | | |
Name
|
| |
Bonus
Payment Amount |
| |
Percent of
Target |
| |
Base Salary +
Bonus Payment |
| |
Base Salary and
Bonus as a Percent of Total Compensation(1) |
| | ||||||||||||||
| | |
($)
|
| |
(%)
|
| |
($)
|
| |
(%)
|
| | | | ||||||||||||
Mr. Fasola(2) | | | | | N/A | | | | | | N/A | | | | | | 130,769 | | | | | | 3 | | | | | |
Mr. Rubin
|
| | | | 414,861 | | | | | | 77.3 | | | | | | 1,041,501 | | | | | | 37 | | | | | |
Mr. Kamal
|
| | | | 419,858 | | | | | | 93.3 | | | | | | 975,543 | | | | | | 34 | | | | | |
Mr. Gregoire
|
| | | | 257,669 | | | | | | 77.3 | | | | | | 766,629 | | | | | | 40 | | | | | |
Ms. Lewis-Clapper
|
| | | | 220,473 | | | | | | 77.3 | | | | | | 655,961 | | | | | | 39 | | | | | |
Mr. Smith
|
| | | | 1,391,400 | | | | | | 77.3 | | | | | | 2,712,394 | | | | | | 32 | | | | | |
Name
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||
|
Number of
Securities Underlying Unexercised Options |
| |
Option
Exercise Price |
| |
Option
Expiration Date |
| |
Number
of Shares or Units of Stock That Have Not Vested |
| |
Market
Value of Shares or Units of Stock That Have Not Vested(1) |
| |||||||||||||||||||||||
|
Exercisable
|
| |
Unexercisable
|
| ||||||||||||||||||||||||||||||||
| | |
(#)
|
| |
(#)
|
| | | | | | | | | | | | | |
(#)
|
| |
$()
|
| ||||||||||||
Kenneth J. Fasola
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,740(2) | | | | | | 2,014,155 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,411(3) | | | | | | 1,440,661 | | |
Jonathan N. Rubin
|
| | | | 58,863 | | | | |
|
―
|
| | | | $ | 60.39 | | | | | | 03/05/24 | | | | | | | | | | | | | | |
| | | | | 23,764 | | | | |
|
―
|
| | | | $ | 53.72 | | | | | | 11/02/25 | | | | | | | | | | | | | | |
| | | | | 28,496 | | | | | | ― | | | | | $ | 64.87 | | | | | | 03/03/26 | | | | | | | | | | | | | | |
| | | | | 17,267 | | | | | | 8,633(4) | | | | | $ | 68.50 | | | | | | 03/03/27 | | | | | | | | | | | | | | |
| | | | | 9,440 | | | | | | 18,878(5) | | | | | $ | 99.45 | | | | | | 03/05/28 | | | | | | | | | | | | | | |
| | | |
|
―
|
| | | | | 35,020(6) | | | | | $ | 66.57 | | | | | | 03/05/29 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,867(7) | | | | | | 693,843 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,353(8) | | | | | | 575,372 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,164(9) | | | | | | 717,083 | | |
Mostafa M. Kamal
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 7,206 | | | | | | ― | | | | | $ | 64.87 | | | | | | 03/03/26 | | | | | | | | | | | | | | |
| | | | | 6,641 | | | | | | 6,641(4) | | | | | $ | 68.50 | | | | | | 03/03/27 | | | | | | | | | | | | | | |
| | | | | 8,250 | | | | | | 16,498(5) | | | | | $ | 99.45 | | | | | | 03/05/28 | | | | | | | | | | | | | | |
| | | | | ― | | | | | | 40,808(6) | | | | | $ | 66.57 | | | | | | 03/05/29 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,821(7) | | | | | | 533,743 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,426(8) | | | | | | 502,835 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,679(9) | | | | | | 835,632 | | |
Daniel N. Gregoire
|
| | | | 5,041 | | | | | | ― | | | | | $ | 64.87 | | | | | | 03/03/26 | | | | | | | | | | | | | | |
| | | | | 5,295 | | | | | | 5,294(4) | | | | | $ | 68.50 | | | | | | 03/03/27 | | | | | | | | | | | | | | |
| | | | | 5,530 | | | | | | 11,060(5) | | | | | $ | 99.45 | | | | | | 03/03/28 | | | | | | | | | | | | | | |
| | | | | ― | | | | | | 23,703(6) | | | | | $ | 66.57 | | | | | | 03/05/29 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,438(7) | | | | | | 425,524 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,308(8) | | | | | | 337,101 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,203(9) | | | | | | 485,385 | | |
Caskie Lewis-Clapper
|
| | | | 30,843 | | | | |
|
―
|
| | | | $ | 63.95 | | | | | | 03/04/25 | | | | | | | | | | | | | | |
| | | | | 12,330 | | | | | | ― | | | | | $ | 64.87 | | | | | | 03/03/26 | | | | | | | | | | | | | | |
| | | | | 8,633 | | | | | | 4,316(4) | | | | | $ | 68.50 | | | | | | 03/03/27 | | | | | | | | | | | | | | |
| | | | | 4,686 | | | | | | 9,371(5) | | | | | $ | 99.45 | | | | | | 03/05/28 | | | | | | | | | | | | | | |
| | | | | ― | | | | | | 20,281(6) | | | | | $ | 66.57 | | | | | | 03/05/29 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,433(7) | | | | | | 346,882 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,650(8) | | | | | | 285,613 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,307(9) | | | | | | 415,273 | | |
Barry M. Smith
|
| | | | 227,375 | | | | |
|
―
|
| | | | $ | 51.79 | | | | | | 02/01/23 | | | | | | | | | | | | | | |
| | | | | 210,674 | | | | |
|
―
|
| | | | $ | 63.95 | | | | | | 03/04/25 | | | | | | | | | | | | | | |
| | | | | 109,601 | | | | | | ― | | | | | $ | 64.87 | | | | | | 03/03/26 | | | | | | | | | | | | | | |
| | | | | 120,690 | | | | | | ― | | | | | $ | 68.50 | | | | | | 03/03/27 | | | | | | | | | | | | | | |
| | | | | 138,700 | | | | | | ― | | | | | $ | 99.45 | | | | | | 03/05/28 | | | | | | | | | | | | | | |
| | | | | 114,286 | | | | | | ― | | | | | $ | 66.57 | | | | | | 03/05/29 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 41,317(7) | | | | | | 3,233,055 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 36,014(8) | | | | | | 2,818,096 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,907(9) | | | | | | 2,340,223 | | |
| | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
|
Number of
Shares Acquired on Exercise |
| |
Value
Realized on Exercise(1) |
| |
Number of
Shares Acquired on Vesting(2) |
| |
Value
Realized on Vesting(2) |
| ||||||||||||||
| | |
(#)
|
| |
($)
|
| |
(#)
|
| |
($)
|
| ||||||||||||
Kenneth J. Fasola
|
| | |
|
―
|
| | | |
|
―
|
| | | |
|
―
|
| | | |
|
―
|
| |
Jonathan N. Rubin
|
| | | | ― | | | | | | ― | | | | | | 5,195 | | | | | | 354,974 | | |
Mostafa M. Kamal
|
| | | | 16,766 | | | | | | 304,129 | | | | | | 3,996 | | | | | | 273,047 | | |
Daniel N. Gregoire
|
| | | | ― | | | | | | ― | | | | | | 2,757 | | | | | | 188,386 | | |
Caskie Lewis-Clapper
|
| | | | ― | | | | | | ― | | | | | | 2,248 | | | | | | 153,606 | | |
Barry M. Smith
|
| | | | ― | | | | | | ― | | | | | | 19,980 | | | | | | 1,365,233 | | |
Name
|
| |
Date of
Award |
| |
Exercise
Date |
| |
No. of
Options Exercised |
| |
Sale
Price |
| |
Value Realized
on Exercise |
| |||||||||||||||
| | | | | | | | | | | | | | |
(#)
|
| |
($)
|
| |
($)
|
| |||||||||
Mr. Kamal
|
| | | | 08/03/15 | | | | | | 12/09/19 | | | | | | 8,666 | | | | | | 78.6835 | | | | | | 157,145 | | |
| | | | | 08/03/15 | | | | | | 12/09/19 | | | | | | 8,000 | | | | | | 78.7339 | | | | | | 145,471 | | |
| | | | | 03/03/16 | | | | | | 12/09/19 | | | | | | 100 | | | | | | 80.0000 | | | | | | 1,513 | | |
Name
|
| |
Date
of Award |
| |
Type
of Award(1) |
| |
Vesting
Date |
| |
# of
Shares Vested |
| |
# of
Shares Withheld |
| |
Net # of
Shares Issued |
| |
Market
Price |
| |
Net
Value Realized |
| ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
($)
|
| |
($)
|
| ||||||
Mr. Rubin
|
| | | | 03/03/16 | | | | | | PSU | | | | | | 03/03/19 | | | | | | 5,195 | | | | | | 1,650 | | | | | | 3,545 | | | | | | 68.33 | | | | | | 354,974 | | |
Mr. Kamal
|
| | | | 03/03/16 | | | | | | PSU | | | | | | 03/03/19 | | | | | | 3,996 | | | | | | 2,011 | | | | | | 1,985 | | | | | | 68.33 | | | | | | 273,047 | | |
Mr. Gregoire
|
| | | | 03/03/16 | | | | | | PSU | | | | | | 03/03/19 | | | | | | 2,757 | | | | | | 1,065 | | | | | | 1,692 | | | | | | 68.33 | | | | | | 188,386 | | |
Ms. Lewis-Clapper
|
| | | | 03/03/16 | | | | | | PSU | | | | | | 03/03/19 | | | | | | 2,248 | | | | | | 1,043 | | | | | | 1,205 | | | | | | 68.33 | | | | | | 153,606 | | |
Mr. Smith
|
| | | | 03/03/16 | | | | | | PSU | | | | | | 03/03/19 | | | | | | 19,980 | | | | | | 8,399 | | | | | | 11,581 | | | | | | 68.33 | | | | | | 1,365,233 | | |
Name
|
| |
Executive
Contributions in 2019 |
| |
Company
Contributions in 2019(1) |
| |
Aggregate
Earnings/ (Losses) in 2019(2) |
| |
Aggregate
Withdrawals/ Distributions |
| |
Aggregate
Balance at 12/31/2019(2) |
| |||||||||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |
($)
|
| |||||||||||||||
Kenneth J. Fasola
|
| | | | — | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | |
Jonathan N. Rubin
|
| | | | — | | | | | | 67,414 | | | | | | 144,639 | | | | | | ― | | | | | | 897,172 | | |
Mostafa M. Kamal
|
| | | | — | | | | | | ― | | | | | | ― | | | | | | ― | | | | | | ― | | |
Daniel N. Gregoire
|
| | | | — | | | | | | 54,754 | | | | | | 122,592 | | | | | | ― | | | | | | 855,544 | | |
Ms. Lewis-Clapper
|
| | | | — | | | | | | 46,850 | | | | | | 166,107 | | | | | | ― | | | | | | 921,590 | | |
Barry M. Smith
|
| | | | — | | | | | | 132,000 | | | | | | 83,123 | | | | | | ― | | | | | | 4,000,580 | | |
Name
|
| |
Age
|
| |
Position
|
| |
Year Appointed
|
| ||||||
Kenneth J. Fasola | | | | | 60 | | | | Chief Executive Officer | | | | | 2019 | | |
James E. Murray | | | | | 66 | | | | President and Chief Operating Officer | | | | | 2019 | | |
Jonathan N. Rubin | | | | | 56 | | | | Chief Financial Officer | | | | | 2008 | | |
Mostafa M. Kamal | | | | | 39 | | | |
Chief Executive Officer, Magellan Rx Management
|
| | | | 2015 | | |
David Haddock | | | | | 50 | | | | General Counsel and Secretary | | | | | 2020 | | |
Caskie Lewis-Clapper | | | | | 55 | | | | Chief Human Resources Officer | | | | | 2004 | | |
| | |
Without Cause/
For Good Reason |
| |
Change
In Control |
| |
Death/
Disability |
| |||||||||
| | |
($)
|
| |
($)
|
| |
($)
|
| |||||||||
Mr. Fasola | | | | | | | | | | | | | | | | | | | |
Cash Payments
|
| | | | 3,000,000 | | | | | | 6,000,000 | | | | | | ― | | |
Bonus
|
| | | | ―(1) | | | | | | ―(1) | | | | | | ― | | |
Insurance Benefits
|
| | | | 17,567 | | | | | | 17,567 | | | | | | ― | | |
Acceleration of Options
|
| | | | ― | | | | | | ― | | | | | | ― | | |
Acceleration of PSUs
|
| | | | 1,440,661(2) | | | | | | 1,440,661(2) | | | | | | ― | | |
Acceleration of RSUs
|
| | | | 2,014,155(3) | | | | | | 2,014,155(3) | | | | | | ― | | |
Total
|
| | | | 6,472,383 | | | | | | 9,472,383 | | | | | | ― | | |
Mr. Rubin | | | | | | | | | | | | | | | | | | | |
Cash Payments
|
| | | | 631,236 | | | | | | 2,335,573 | | | | | | ― | | |
Bonus
|
| | | | 536,551 | | | | | | 536,551 | | | | | | 536,551 | | |
Insurance Benefits
|
| | | | 16,687 | | | | | | 25,031 | | | | | | ― | | |
Acceleration of Options
|
| | | | 493,205(4) | | | | | | 493,205(4) | | | | | | ― | | |
Acceleration of PSUs
|
| | | | 1,986,298(4) | | | | | | 1,986,298(4) | | | | | | ― | | |
Total
|
| | | | 3,663,977 | | | | | | 5,376,658 | | | | | | 536,551 | | |
Mr. Kamal | | | | | | | | | | | | | | | | | | | |
Cash Payments
|
| | | | 562,380 | | | | | | 2,024,568 | | | | | | ― | | |
Bonus
|
| | | | 449,904 | | | | | | 449,904 | | | | | | 449,904 | | |
Insurance Benefits
|
| | | | 12,633 | | | | | | 18,950 | | | | | | ― | | |
Acceleration of Options
|
| | | | ― | | | | | | 541,387 | | | | | | ― | | |
Acceleration of PSUs
|
| | | | ― | | | | | | 1,872,210 | | | | | | ― | | |
Total
|
| | | | 1,024,917 | | | | | | 4,907,019 | | | | | | 449,904 | | |
Mr. Gregoire(5) | | | | | | | | | | | | | | | | | | | |
Cash Payments
|
| | | | 512,693 | | | | | | 1,691,887 | | | | | | ― | | |
Bonus
|
| | | | 333,250 | | | | | | 333,250 | | | | | | 333,250 | | |
Insurance Benefits
|
| | | | 12,948 | | | | | | 19,422 | | | | | | ― | | |
Acceleration of Options
|
| | | | 328,468 | | | | | | 328,468 | | | | | | ― | | |
Acceleration of PSUs
|
| | | | 1,248,009 | | | | | | 1,248,009 | | | | | | ― | | |
Total
|
| | | | 2,435,368 | | | | | | 3,621,036 | | | | | | 333,250 | | |
Ms. Lewis-Clapper | | | | | | | | | | | | | | | | | | | |
Cash Payments
|
| | | | 438,682 | | | | | | 1,447,651 | | | | | | ― | | |
Bonus
|
| | | | 285,143 | | | | | | 285,143 | | | | | | 285,143 | | |
Insurance Benefits
|
| | | | 16,687 | | | | | | 25,031 | | | | | | ― | | |
Acceleration of Options
|
| | | | ― | | | | | | 278,963 | | | | | | ― | | |
Acceleration of PSUs
|
| | | | ― | | | | | | 1,047,768 | | | | | | ― | | |
Total
|
| | | | 740,513 | | | | | | 3,084,556 | | | | | | 285,143 | | |
| Mr. Smith | | | | | | | |
|
Cash Payments
|
| | | | ― | | |
|
Bonus
|
| | | $ | 1,391,400 | | |
|
Insurance Benefits
|
| | | | ― | | |
|
Acceleration of Options(1)
|
| | | $ | 1,727,103 | | |
|
Acceleration of PSUs(2)
|
| | | $ | 8,391,374 | | |
|
Total
|
| | | $ | 11,509,877 | | |
| |
2019 Highlights
|
| |
| | Business Results | | |
| |
•
During 2019, our revenues decreased by 2%, from $7.3 billion to $7.2 billion.
|
| |
| |
•
Segment profit increased by 11% from $228 million in 2018 to $253 million in 2019.
|
| |
| |
•
Adjusted net income increased by 49%, from $62 million in 2018 to $92 million in 2019.
|
| |
| | Key Developments and Initiatives | | |
| |
•
In July 2019, Barry M. Smith, our chairman and chief executive officer, notified the board of directors that he intended to retire. The board engaged a search firm to conduct a comprehensive search for a new CEO. Steven J. Shulman, who currently serves as a director, was elected chairman of the board.
|
| |
| |
•
In November 2019, the board appointed Kenneth J. Fasola as the new chief executive officer of Magellan Health, Inc. to succeed Barry M. Smith.
|
| |
| |
•
In December 2019, the board appointed James Murray as president and chief operating officer of Magellan Health, Inc.
|
| |
| | 2019 Executive Compensation Program | | |
| |
•
The annualized 2020 target total compensation for our new chief executive officer, Kenneth J. Fasola , will be 83% performance-oriented based on annual and long-term incentives.
|
| |
| |
•
Our annual bonus pool funding for 2019 was based 70% on our segment profit performance and 30% on performance against strategic objectives tied to growth, operating efficiency and leader engagement.
|
| |
| |
•
Annual bonus targets for our NEOs ranged between 65% and 150% of their base salary amounts, and the annual bonus payouts for 2019 ranged between 77.3% and 93.3% of those targets.
|
| |
| |
•
As part of our long-term equity incentive program, we granted performance-based restricted stock units (“PSUs”) that are earned based on our total shareholder return over a three-year performance period relative to a group of peer companies. For our grants made in 2019, PSUs made up 50% of the targeted award value of our Named Executive Officers’ equity compensation. Our PSU awards which were made in 2016 were settled in 2019 at 78% of the target number of shares and those which were made in 2017 were settled in 2020 at 64% of the target numbers of shares.
|
| |
| | Executive Compensation Policies and Practices | | |
| |
•
Require double trigger acceleration of vesting of equity awards in the event of a change in control.
|
| |
| |
•
Regularly monitor share utilization relative to historic standards and versus our industry peers.
|
| |
| |
•
Conduct competitive benchmarking of compensation with an independent consultant.
|
| |
| |
•
Maintain robust stock ownership requirements.
|
| |
| |
•
Conduct an annual assessment of risk in our compensation programs and mitigate any inappropriate risk.
|
| |
| |
•
Provides for clawbacks in the event of a material financial restatement and for conduct injurious to the company.
|
| |
| |
•
Prohibits recipients of equity awards from engaging in hedging transactions or pledging equity securities.
|
| |
| | |
2019 Actual Fees
|
| |
2018 Actual Fees
|
| ||||||
Audit Fees(1)
|
| | | | 4,805,471 | | | | | $ | 4,200,171 | | |
Audit-Related Fees(2)
|
| | | | 467,460 | | | | | $ | 523,660 | | |
Tax Fees
|
| | | | 136,756 | | | | | $ | 142,651 | | |
Other Fees
|
| | | | ― | | | | | | ― | | |
Total Fees(3)
|
| | | | 5,409,687 | | | | | $ | 4,866,482 | | |
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