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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Molina Healthcare Inc | NYSE:MOH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 343.21 | 0 | 09:05:19 |
Check the appropriate box:
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þ
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Preliminary Proxy Statement
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¨
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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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MOLINA HEALTHCARE, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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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 pursuant to 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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¨
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Fee paid previously with preliminary materials.
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¨
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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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Notice of 2018 Annual Meeting of Stockholders
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Date and Time
Wednesday, May 2, 2018
10:00 a.m., Eastern Time
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Location
Park Hyatt New York
The Onyx Room
153 West 57
th
Street
New York, NY 10019
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1
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To elect three Class I directors to hold office until the 2021 annual meeting.
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2
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To consider and approve, on a non-binding, advisory basis, the compensation of our named executive officers.
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3
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To approve an amendment and restatement of our Bylaws to implement proxy access.
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4
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To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018.
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5
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
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By internet
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By toll-free telephone
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www.proxyvote.com
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1-800-690-6903
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By mail
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In person
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Follow instructions on your proxy card
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At the Annual Meeting
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[_____, 2018]
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By Order of the Board of Directors
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Dale B. Wolf
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Chairman of the Board,
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TABLE OF CONTENTS
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About Molina Healthcare
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CEO Pay Ratio
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2017
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(Dollars in millions, except per-share amounts)
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Total Revenue
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Net Loss per Diluted Share
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Adjusted Net Loss Per Share*
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Net Loss Margin
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EBITDA*
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Ending Membership
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$
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19,883
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$
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(9.07
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)
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$
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(8.72
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)
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(2.6
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)%
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$
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(329
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)
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4,453,000
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Proposal
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Board Vote Recommendation
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To elect three Class I directors to hold office until the 2021 annual meeting.
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FOR
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To consider and approve, on a non-binding, advisory basis, the compensation of our named executive officers.
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FOR
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To approve an amendment and restatement of our Bylaws to implement proxy access.
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FOR
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To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2018.
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FOR
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ü
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
THE ELECTION OF EACH DIRECTOR NOMINEE.
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Gov. Garrey E. Carruthers
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Business Experience
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Chancellor of New Mexico State University since June 1, 2015 to present, and President since 2013
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Served as Dean of the College of Business of New Mexico State University from 2003 to 2013
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Served as New Mexico State University’s Vice President for Economic Development from 2006 to 2013
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Served as the Director of the University’s Pete V. Domenici Institute since 2009
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Was the President and Chief Executive Officer of Cimarron Health Plan in New Mexico from 1993 to 2003
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From 1987 to 1990, served a term as the Governor of the state of New Mexico
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From 1981 to 1984, served as Assistant Secretary of the U.S. Department of the Interior
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Holds a Ph.D. in economics from Iowa State University
Skills and Qualifications
In addition to being the former Governor of New Mexico, a former member of the Reagan Administration, and professor of economics, Gov. Carruthers also has extensive experience in the healthcare industry. Gov. Carruthers’ former service as the president and chief executive officer of Cimarron Health Plan, Inc., a managed care health plan in Albuquerque New Mexico, and the predecessor to Molina Healthcare of New Mexico, has given him broad exposure to the managed care industry. In addition, Gov. Carruthers currently serves as a Chancellor of the New Mexico State University system, which includes the main campus and four 2-year college campuses. Prior to becoming Chancellor, Gov. Carruthers simultaneously served as the dean of the College of Business of New Mexico State University and as its vice president for economic development. Gov. Carruthers’ prior experience makes him a highly valued Board member, particularly in his role as the chairman of the compliance and quality committee, and as a member of the corporate governance and nominating committee.
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Chancellor of New Mexico State University
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Age:
78
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Director Since:
2012 (Class I)
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Board Committees:
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Compliance & Quality (Chair)
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Corporate Governance & Nominating Committee
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Mr. Daniel Cooperman
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Business Experience
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Chairman of the audit committee and member of the Board of Directors of Zoox, Inc., a young robotics company developing a fully autonomous vehicle, since 2015
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Member of the Board of Directors of LegalZoom.Com, Inc. from 2012 until its change of control in 2014; member of the Board of Directors of Nanoscale Components Inc., a lithium ion technology company, since 2012
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Ex-Chairman and member of the Board of Directors of Second Harvest Food Bank of Santa Clara and San Mateo Counties (California), since 2010
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Member of the Board of Directors of Liffey Thames Group, LLC dba Discovia, a legal services company, from 2011 to 2017
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Of Counsel, DLA Piper LLP, a global law firm, from December 2014 to November 2016
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Of Counsel, Bingham McCutchen, LLP, a global law firm, from 2010 to 2014
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Senior Vice President, Secretary, and General Counsel of Apple Inc. from 2007 to 2009
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Senior Vice President, Secretary, and General Counsel of Oracle Corporation from 1997 to 2007
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Partner, McCutchen, Doyle, Brown & Enersen, LLP from 1977 to 1997
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Distinguished Visiting Lecturer, Stanford Law School since 2010
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Fellow, Arthur and Toni Rembe Rock Center for Corporate Governance, Stanford Law School and Graduate School of Business since 2012
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Juris Doctorate, Stanford Law School
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MBA, Stanford Graduate School of Business
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Graduated Dartmouth College, summa cum laude, with an A.B. in Economics with highest distinction
Skills and Qualifications
Mr. Cooperman has extensive legal and corporate governance experience, having served as general counsel, senior vice president, and secretary of both Apple, Inc. and Oracle Corporation. Mr. Cooperman has also served as Of Counsel at two international law firms focusing on corporate and transactional matters, corporate governance, and board of director issues. Mr. Cooperman’s service as general counsel for two major US public technology companies and his extensive legal, compliance and risk management experience provide an invaluable background for his service on the Board and as chairman of both the Company’s corporate governance and nominating committee, and the Company’s information technology and cybersecurity committee. Mr. Cooperman is also a member of the audit committee. Further, Mr. Cooperman has extensive past and current board experience, having advised and served on the boards of a number of companies and trade associations.
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Age:
67
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Director Since:
2013 (Class I)
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Board Committees:
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Corporate Governance & Nominating (Chair)
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Information Technology & Cybersecurity (Chair)
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Audit
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Mr. Richard M. Schapiro
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Business Experience
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Since April 2015, served as Chief Executive Officer of SchapiroCo LLC, a financial consultant to healthcare companies
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Since January 2017, served as an independent director for Transamerica Corporation, and from April 2015 to January 2017, served as independent director for Transamerica Financial Life Insurance Company
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From 1999 to 2014, served as a Managing Director in the Corporate and Investment Banking Division of Bank of America Merrill Lynch’s Health Care Group (retired)
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From 1997 to 1999, served as Managing Director and Head of Health Care Group for ING Baring Furman Selz
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From 1979 to 1997, held various positions at Salomon Brothers Inc, serving as Managing Director and Global Co-Head of the Health Care Group, Managing Director - Insurance Group, Managing Director and Head of Government Finance Group, and Managing Director and Head of Thrift Coverage Group
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Bachelor of Science Degree in Accounting from Case Western Reserve University
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Master’s Degree in Business Administration from Bernard M. Baruch College
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Juris Doctorate from New York Law School
Skills and Qualifications
Mr. Schapiro is a former investment and corporate banker with thirty-five years of experience covering the financial services and healthcare sectors. Mr. Schapiro’s past experience as a healthcare investment banker enables him to provide helpful insight to management in the matters related to capital structure, debt and equity financings and mergers and acquisitions. Mr. Schapiro also advised the Company in connection with its 2003 IPO and subsequent follow-on offering, giving him invaluable insight into the history and growth of the Company.
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Chief Executive Officer, SchapiroCo LLC
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Age:
62
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Director Since:
2015 (Class I)
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Board Committees:
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Compensation (Chair)
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Audit
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Information Technology & Cybersecurity
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Joseph M. Zubretsky
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Business Experience
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Has served as President and Chief Executive Officer of Molina Healthcare, Inc. since November 6, 2017
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President and Chief Executive Officer of The Hanover Group from June 2016 to October 2017
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Chief Executive Officer and Senior Executive Vice President of Healthagen, LLC, a subsidiary of Aetna, Inc., from January 2015 to October 2015
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Senior Executive Vice President of National Businesses of Aetna, Inc. from February 2013 to December 2014, Senior Executive Vice President and Chief Financial Officer from November 2010 to February 2013, Executive Vice President and Chief Financial Officer from March 2007 to November 2010, and Chief Enterprise Risk Officer from April 2007 to February 2013
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Senior Executive Vice President of Finance, Investments and Corporate Development of Unum Group from 2005 to 2007 and Interim Chief Financial Officer from 2006 to 2007
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Special Partner, Chief Investment Officer, and Chief Financial Officer at Brera Capital Partners from 1999 to 2005
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Executive Vice President of Business Development and Chief Financial Officer of MassMutual Financial Group from 1997 to 1999
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Member of the Boards of Directors of several companies, including The Hanover Group from 2016 to October 2017
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Certified Public Accountant (inactive)
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Holds a B.S. in Business Administration from University of Hartford, West Hartford, CT
Skills and Qualifications
Mr. Zubretsky has more than 35 years of experience as a senior executive in strategy, operating and finance roles in some of the world’s top insurance and financial companies including, most recently, The Hanover Group and Aetna, Inc. Mr. Zubretsky’s unique and extensive executive and managerial experience places him in an excellent position to assist the Company with significant operational improvements and growth.
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President and Chief Executive Officer
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Age:
61
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Director Since:
2017 (Class III)
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Mr. Charles Z. Fedak
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Business Experience
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Certified Public Accountant since 1975
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Founded Charles Z. Fedak & Co., Certified Public Accountants, in 1981
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Employed by KPMG from 1975 to 1980
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Employed by Ernst & Young LLP from 1973 to 1975
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Prior Chair of the Company’s audit committee from the time of the Company’s IPO in July 2003 through April 2014
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Holds MBA degree from California State University, Long Beach
Skills and Qualifications
Mr. Fedak has significant accounting and finance experience, having been a certified public accountant since 1975. He is the founder of a successful full service accounting firm. Mr. Fedak served as the chair of the Company’s audit committee for 12 years. His background and experience affords Mr. Fedak the financial expertise and operational familiarity to effectively oversee the Company’s finance and accounting functions.
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Founder, Charles Z. Fedak & Co., CPAs
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Age:
66
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Director Since:
2002 (Class II)
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Board Committees:
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Audit (Financial Expert)
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Compensation
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Ms. Ronna E. Romney
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Business Experience
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Has served as director for Park-Ohio Holdings Corp., a publicly traded logistics and manufacturing company, since 2001
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Director of Molina Healthcare of Michigan from 1999 to 2004
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Candidate for the United States Senate for the state of Michigan in 1996
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From 1989 to 1993, appointed by President George H. W. Bush to serve as Chairwoman of the President’s Commission on White House Fellowships
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From 1984 to 1992, served on the Republican National Committee for the state of Michigan
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From 1985 to 1989, appointed by President Ronald Reagan to serve as Chairwoman of the President’s Commission on White House Presidential Scholars
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From 1982 to 1985, appointed by President Ronald Reagan to serve as Commissioner of the President’s National Advisory Council on Adult Education
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Political and news commentator for radio and television from 1994 to 1996
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Honored as one of the NACD (National Association of Corporate Directors) Top 100 Directors for 2015
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Holds a B.A from the Oakland University, Rochester, Michigan
Skills and Qualifications
Ms. Romney’s political skills, along with her extensive board and corporate governance experience, enable her to serve an invaluable role as the Board’s lead independent director, and to serve as an effective liaison between management and the Board. In addition to serving as lead independent director, she also sits on the compensation and corporate governance and nominating committees.
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Director, Park Ohio Holding Corporation
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Age:
74
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Director Since:
1999 (Class III); Vice-Chair of the Board
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Board Committees:
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•
Compensation
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Corporate Governance & Nominating
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Mr. Dale B. Wolf
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Business Experience
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Has served as President and Chief Executive Officer of Onecall Care Management since January 2016, and Executive Chairman from September 2015 to January 2016
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President and CEO, DBW Healthcare, Inc. since January 2014
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Executive Chairman, Correctional Healthcare Companies, Inc., a national provider of correctional healthcare solutions, from December 2012 to July 2014
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Chief Executive Officer of Coventry Health Care, Inc. from 2005 to 2009
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Executive Vice President, Chief Financial Officer, and Treasurer of Coventry Health Care, Inc. from 1996 to 2005
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Member of the Board of Directors of Correctional Healthcare Companies, Inc. from December 2012 to July 2014
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Member of the Board of Directors of Coventry Healthcare, Inc. from January 2005 to April 2009
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Member of the Board of Directors of Catalyst Health Solutions, Inc. from 2003 to 2012
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Graduated Eastern Nazarene College with a Bachelor of Arts degree in Mathematics, with honors
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Completed MIT Sloan School Senior Executive Program
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Fellow in the Society of Actuaries since 1979
Skills and Qualifications
Mr. Wolf is an experienced healthcare executive with visionary leadership skills. Mr. Wolf has served in multiple leadership roles, including chief executive officer and chief financial officer of Coventry Healthcare, a health insurer now owned by Aetna, and on the boards of several notable healthcare companies. Mr. Wolf’s extensive managerial and executive healthcare experience, as well as his familiarity with the managed care industry, render him an invaluable asset in helping to formulate and oversee the Company’s long-term business strategy.
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President & Chief Executive Officer, Onecall Care Management
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Age:
63
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Director Since:
2013 (Class III); Chairman of the Board
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Board Committees:
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Corporate Governance & Nominating
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Compliance & Quality
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Name
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Fees Earned
or Paid
in Cash
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Stock
Awards
(1)
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All Other
Compensation
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Total
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||||||||
Garrey E. Carruthers, Ph.D.
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$
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138,125
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$
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220,019
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$
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—
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$
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358,144
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Daniel Cooperman
(2)
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$
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151,751
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$
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222,019
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$
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—
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$
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373,770
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Charles Z. Fedak
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$
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127,500
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$
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222,019
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$
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—
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$
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349,519
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John C. Molina
(3)
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$
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74,688
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$
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146,035
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$
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—
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$
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220,723
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Joseph M. Molina
(4)
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$
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69,090
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$
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146,035
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$
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—
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$
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215,125
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Frank E. Murray
(5)
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$
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125,000
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$
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220,019
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$
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—
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$
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345,019
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Steven J. Orlando
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$
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154,360
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$
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220,019
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$
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—
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$
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374,379
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Ronna E. Romney
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$
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191,731
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$
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220,019
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$
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—
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$
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411,750
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Richard M. Schapiro
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$
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149,432
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$
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220,019
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$
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—
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$
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369,451
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Dale B. Wolf
(2)
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$
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249,456
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$
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220,019
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$
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—
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$
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469,475
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(1)
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The amounts reported as Stock Awards reflect the grant date fair value of restricted stock awards under the Company’s 2011 Equity Incentive Plan, in accordance with Accounting Standards Codification Topic 718, “Compensation - Stock Compensation.” Beginning on July 1, 2015, the non-employee directors compensation program described above provided for an annual equity award valued at $220,000 for each director, or $55,000 per quarter.
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(2)
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Messrs. Cooperman and Wolf each have fully vested options to purchase 15,000 shares of our stock at an exercise price of $33.02 per share which expire on March 11, 2023.
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(3)
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Mr. Molina served as a non-employee director from May 2, 2017 to February 23, 2018.
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(4)
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Dr. Molina served as a non-employee director from May 2, 2017 to December 12, 2017.
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(5)
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Dr. Murray served as a director until his retirement on November 6, 2017. The fees reflected in the table include $19,022 of compensation for consulting services provided by Dr. Murray from his retirement date, November 6, 2017, through December 31, 2017.
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•
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Joseph M. Zubretsky, president and chief executive officer;
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•
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Joseph W. White, chief financial officer, and former interim president and chief executive officer; and
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•
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Jeff D. Barlow, chief legal officer and secretary.
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•
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Dr. J. Mario Molina, former president and chief executive officer;
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•
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John C. Molina, former chief financial officer;
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•
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Terry P. Bayer, former chief operating officer; and
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•
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Lisa A. Rubino, former senior vice president of Medicare & Duals Integration.
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•
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No cash amounts were paid under the Company’s short-term cash incentive bonus program for 2017 that consisted 65% of a net income measure and 35% of a discretionary bonus
;
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•
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No equity compensation vested in connection with the targets established in 2015 and 2016 for 2017 net profit margin of 1.5%;
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•
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No equity compensation vested in connection with the target established in 2015 for 2017 pre-tax income; and
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•
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No performance stock units vested in connection with the target established in 2017 for 2017 net profit margin of 0.5%.
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•
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2017 annual premium revenues, net of acquisitions;
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•
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2015-2017 three-year TSR above the median of our peer group; and
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•
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Expansion in 2017 into the states of Mississippi and Idaho.
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•
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The compensation committee recalibrated the Company’s executive compensation philosophy by generally increasing cash compensation, decreasing target long-term incentives value, and increasing potential long-term incentive upside opportunity when results are substantially in excess of targets; and
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•
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The Board restructured the senior management team, replacing two of the five named executive officers with executives whose target total compensation opportunities are positioned closer to relevant peer benchmark median opportunities.
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What We Do
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What We Don’t Do
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Maintain stock ownership guidelines for directors and executive officers. In early 2018, such guidelines were revised to increase the ownership holdings to four (4) times the annual cash retainer for directors.
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No guaranteed bonuses.
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Have an incentive compensation clawback policy.
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No gross-ups on excise taxes.
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Enforce restrictions on “pledges” of shares of Company stock by directors and executive officers.
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Do not grant discounted stock options.
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Restrict hedging transactions by directors and executive officers.
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Do not permit repricing of stock options without stockholder approval.
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Engage an independent compensation consultant.
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Do not provide above-market earnings on deferred compensation.
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Provide very limited perquisites.
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Provide for director equity award limits in our equity incentive plan.
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1. Centene Corporation
|
7. Team Health Holdings, Inc.
|
2. Cigna Corporation
|
8. Tenet Healthcare Corporation
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3. Community Health Systems, Inc.
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9. Triple-S Management Corporation
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4. DaVita HealthCare Partners Inc.
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10. Universal American Corp.
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5. Humana Inc.
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11. Universal Health Services, Inc.
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6. Magellan Health, Inc.
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12. WellCare Health Plans, Inc.
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Base Salary
|
||||||||||
Current Named Executive Officer
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2017
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2016
|
Change ($)
|
Change (%)
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|||||||
Joseph M. Zubretsky, President and Chief Executive Officer
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$
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1,300,000
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N/A
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N/A
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N/A
|
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Joseph W. White, Chief Financial Officer and Former Interim President and Chief Executive Officer
(1)
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$
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650,000
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$
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538,000
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$
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112,000
|
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20.82
|
%
|
Jeff D. Barlow, Chief Legal Officer and Secretary
|
$
|
550,000
|
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$
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525,000
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$
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25,000
|
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4.76
|
%
|
•
|
Dr. Molina’s base salary was increased to $1,250,000 from the 2016 base salary of $1,170,000;
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•
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Mr. Molina’s base salary was increased to $900,000 from the 2016 base salary of $878,000;
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•
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Ms. Bayer’s base salary was increased to $700,000 from the 2016 base salary of $644,000; and
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•
|
Ms. Rubino’s base salary was increased to $500,000 from the 2016 base salary of $476,826 (Ms. Rubino was not a named executive officer at the time of the 2017 Compensation Study, and thus her compensation was not part of that study).
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•
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Mr. White’s target bonus opportunity was set at 90% of his base salary in connection with his position as chief accounting officer (and later increased to 100% of his base salary in connection with his change in position to chief financial officer); and
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•
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Mr. Barlow’s target bonus opportunity was set at 90% of his base salary.
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•
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Dr. Molina’s target bonus opportunity was set at 150% of his base salary;
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•
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Mr. Molina’s target bonus opportunity was set at 125% of his base salary;
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•
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Ms. Bayer’s target bonus opportunity was set at 100% of her base salary; and
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•
|
Ms. Rubino’s target bonus opportunity was set at 50% of her base salary (Ms. Rubino was not a named executive officer at the time the compensation committee established the short-term cash bonus opportunity levels, and thus her target bonus opportunity was not evaluated by the compensation committee).
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•
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65% of the bonus opportunity shall be based on the Company’s net income achievement for its 2017 fiscal year. The fiscal year 2017 net income bonus shall be based on the entry level achievement of at least $84 million in net income. The achievement of $84 million in net income in 2017 shall trigger the payout in cash of this bonus element at the 50% level; achievement of $120 million shall trigger payout at the 100% level; and achievement of $156 million shall trigger maximum payout at the 200% level. Under all circumstances payout shall be capped at the 200% level. The actual cash bonus payout amounts for achievement within the specified points along the net income range shall be interpolated linearly between the specified points.
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•
|
35% of the bonus opportunity shall be subject to the discretion of the compensation committee, and shall be based upon the consideration by the committee of a wide variety of factors, including, for purposes of illustration (but not limited to), such factors as: (1) completing the organizational development effort and filling key executive roles; (2) developing a long-term strategic plan for Medicare and Direct Delivery; (3) increasing quality revenues from the state health plans; (4) improving our claims payment metrics and overall claims systems; (5) improving our Star metrics; and (6) miscellaneous other factors as may be identified by the compensation committee in the exercise of its discretion. As with the net income metric, payment of the discretionary bonus shall be capped at the 200% level.
|
•
|
The 65% net income bonus metric and the 35% discretionary bonus shall be determined and paid independently. Entry level achievement of the net income metric shall not serve as a condition for any partial or full payment of the discretionary bonus.
|
Current Named Executive Officer
|
Base Salary
|
Target Bonus
Opportunity (% of Base Salary)
|
Target
Net Income Bonus Opportunity (65% of Baseline Bonus Opportunity)
|
Discretionary Bonus Opportunity (35% of Target Bonus Opportunity)
|
Bonus Paid
|
|||||||
Joseph W. White
|
|
|
|
|
|
|||||||
Chief Financial Officer and Former Interim Chief Executive Officer
(1)
|
$
|
650,000
|
|
100
|
%
|
$
|
422,500
|
|
$
|
227,500
|
|
$0
|
Jeff D. Barlow
|
|
|
|
|
|
|||||||
Chief Legal Officer and Secretary
|
$
|
550,000
|
|
90
|
%
|
$
|
321,750
|
|
$
|
173,250
|
|
$0
|
(1)
|
The Company and Mr. White entered into an amended and restated employment agreement in June 2017, effective as of May 2, 2017, pursuant to which Mr. White is entitled to an annual base salary of $650,000 as compensation for his role as chief financial officer and was entitled to an additional monthly special salary of $100,000 for his role as interim president and chief executive officer. Further, effective as of May 2, 2017, in connection with his role as chief financial officer, Mr. White’s target bonus opportunity was increased from 90% of his base salary to 100% of his base salary. Mr. White served as interim president and chief executive officer from May 2, 2017 to November 6, 2017.
|
•
|
Mr. Zubretsky’s employment with the Company commenced on November 6, 2017. In connection with his employment, Mr. Zubretsky was granted an option to purchase 375,000 shares of the Company’s common stock with an exercise price per share of $67.33. The stock option vests in equal annual installments over three years, on each of October 9, 2018, October 9, 2019, and October 9, 2020, subject to his continued employment with the Company on each vesting date. The Company does not generally grant options to executive officers, but it did so for Mr. Zubretsky as an inducement for him to accept employment with the Company, and to compensate him for the forgone value of options granted to him by his previous employer and to immediately enhance the alignment of Mr. Zubretsky’s interests with those of our stockholders.
|
•
|
For 2017, Ms. Rubino’s long-term incentive consisted of a restricted stock award of 12,146 shares of the Company’s common stock subject to vesting in equal annual installments over four years, on each of March 1, 2018, March 1, 2019, March 1, 2020, and March 1, 2021.
|
|
2017 Equity Compensation
(1)
|
||||||||
|
Target PSUs
|
Shares
|
|||||||
Current Named Executive Officer
|
Amount
($)
|
Number (#)
|
Amount ($)
|
Number (#)
|
|||||
Joseph W. White, Chief Financial Officer and Former Interim President and Chief Executive Officer
|
$
|
1,216,030
|
|
24,616
|
$
|
684,042
|
|
13,847
|
|
Jeff D. Barlow, Chief Legal Officer and Secretary
|
$
|
832,044
|
|
16,843
|
$
|
468,016
|
|
9,474
|
|
|
2017 Equity Compensation
(1)
|
|||||||||
|
Target PSUs
|
Shares
|
||||||||
Former Named Executive Officer
|
Amount ($)
|
Number (#)
|
Amount
($)
|
Number (#)
|
||||||
Dr. J. Mario Molina, Former Chief Executive Officer
|
$
|
5,120,014
|
|
103,644
|
|
$
|
2,880,020
|
|
58,300
|
|
John C. Molina, Former Chief Financial Officer
|
$
|
1,760,023
|
|
35,628
|
|
$
|
990,025
|
|
20,041
|
|
Terry P. Bayer, Former Chief Operating Officer
|
$
|
1,408,048
|
|
28,503
|
|
$
|
792,030
|
|
16,033
|
|
(1)
|
Generally, the grant date fair value presented does not correspond to the actual value that the named executive officers will realize from the award. In particular, the actual value of performance stock awards (PSAs) received is different from the accounting expense because such awards depend on the Company’s performance. In accordance with SEC rules, the aggregate grant date fair value of the PSAs presented above is calculated based on the most probable outcome of the performance conditions as of the grant date, which, for the PSAs, was target performance.
|
|
Target Performance Stock Units (#)
|
|
Restricted Stock Awards (#)
|
||||||||||
|
|
Net Profit Margin
|
2017-2019 Expansion Metric
|
|
Time Vesting Over 3‑Years
|
||||||||
Named Executive Officer
|
Total
|
2017
(1)
|
|
2018
|
|
2019
|
|
|
|||||
Joseph W. White
(2)
|
24,617
|
|
5,769
|
|
5,769
|
|
5,385
|
|
7,694
|
|
|
13,847
|
|
Jeff D. Barlow
|
16,844
|
|
3,948
|
|
3,948
|
|
3,684
|
|
5,264
|
|
|
9,474
|
|
J. Mario Molina
(3)
|
103,644
|
|
24,292
|
|
24,292
|
|
22,672
|
|
32,388
|
|
|
58,300
|
|
John C. Molina
(3)
|
35,628
|
|
8,350
|
|
8,350
|
|
7,794
|
|
11,134
|
|
|
20,041
|
|
Terry P. Bayer
|
28,503
|
|
6,680
|
|
6,680
|
|
6,235
|
|
8,908
|
|
|
16,033
|
|
(1)
|
The 2017 net profit margin was not achieved, and as a result the PSUs subject to this metric did not vest.
|
(2)
|
In addition to the restricted stock reflected in the table, on June 5, 2017, Mr. White received a restricted stock award of 15,008 shares vesting over three (3) years, on each of June 5, 2018, June 5, 2019, and June 5, 2020, as compensation for his role as interim president and chief executive officer from May 2, 2017 to November 7, 2017.
|
(3)
|
On May 2, 2017, Dr. Molina’s and Mr. Molina’s employment were terminated by the Company without “cause,” as such term is defined in their employment agreements. Under their respective amended and restated employment agreement, they were each entitled to receive full vesting of all equity compensation. Accordingly, all of the
2017
grants awarded to each of Dr. Molina and Mr. Molina vested in full.
|
•
|
15% element for a 2017 PSU metric related to net profit margin;
|
•
|
15% element for a 2018 PSU metric related to net profit margin;
|
•
|
14% element for a 2019 PSU metric related to net profit margin; and
|
•
|
20% element for a multi-part metric in any of 2017, 2018, or 2019 related to expansion/growth of the Company.
|
Named Executive Officer
|
2015 Target # of Performance Shares Subject to Vesting Based on 2017 Metrics
|
2017 Annual Premium Revenue
|
2017 Net Profit Margin
|
2017 Pre-Tax Income
|
Three-Year TSR
|
|||||||
|
TOTAL
|
VESTED
|
VESTED
|
NOT VESTED
|
NOT VESTED
|
VESTED
|
||||||
Joseph W. White, Chief Financial Officer
|
9,048
|
|
4,524
|
|
2,262
|
|
2,262
|
|
2,262
|
|
2,262
|
|
Jeff D. Barlow, Chief Legal Officer and Secretary
|
7,540
|
|
3,770
|
|
1,885
|
|
1,885
|
|
1,885
|
|
1,885
|
|
Terry P. Bayer, Former Chief Operating Officer
|
11,460
|
|
5,730
|
|
2,865
|
|
2,865
|
|
2,865
|
|
2,865
|
|
•
|
10% of the 2015 stock awards was based on the Company’s 2017 annual premium revenue achievement, with an entry point of $15.0 billion in annual premium revenues, excluding acquisitions after April 1, 2015, and full achievement at $16 billion in annual premium revenues, excluding acquisitions after April 1, 2015.
This performance metric was fully achieved in 2017 and the stock vested.
|
•
|
The second fiscal year 2017 10% performance metric of the 2015 stock awards was based on the Company’s fiscal year 2017 net profit margin, with an entry point at 1.5% net profit margin, and the third fiscal year 2017 10% performance metric of the 2015 stock awards was based on the Company’s pre-tax income in fiscal year 2017, with an entry point at $500 million in pre-tax income.
Neither the 2017 net profit margin metric nor the 2017 pre-tax income metric was achieved and, accordingly, the portions of the stock awards based on these performance metrics did not vest.
|
•
|
Another 10% of the 2015 stock award was conditioned upon the Company’s achieving a three-year TSR for the three-year period ended December 31, 2017 as determined by ISS calculations that is greater than the median TSR achieved by the Company’s 2015 ISS peer group. The Company’s three-year TSR for the three-year period ending December 31, 2017 was 13.5% compared to the median of 3.8% for the Company’s 2015 ISS peer group.
Since this metric was achieved, the portion of the stock awards based on this performance metric vested.
|
Named Executive Officer
|
2016 Target # of Performance Shares Subject to Vesting Based on 2017 Metrics
|
2017 Net Profit Margin
|
Star Ratings
|
Expansion (MS)
|
Expansion (ID)
|
|||||||
|
TOTAL
|
VESTED
|
NOT VESTED
|
NOT VESTED
|
VESTED
|
VESTED
|
||||||
Joseph W. White, Chief Financial Officer
|
15,110
|
|
6,476
|
|
4,317
|
|
4,317
|
|
2,159
|
|
4,317
|
|
Jeff D. Barlow, Chief Legal Officer and Secretary
|
10,962
|
|
4,698
|
|
3,132
|
|
3,132
|
|
1,566
|
|
3,132
|
|
Terry P. Bayer, Former Chief Operating Officer
|
18,039
|
|
7,731
|
|
5,154
|
|
5,154
|
|
2,577
|
|
5,154
|
|
•
|
The first 2017 10% performance metric was related to the achievement of a net profit margin in fiscal year 2017 of at least 1.5%.
Performance was not met under this metric and thus these awards did not vest.
|
•
|
The second fiscal year 2017 10% performance metric was related to the Company achieving an improvement in Star ratings of 0.5 Stars or greater for each of two separate health plans from the levels of the previous year, with no decline in the then existing average Star rating across all remaining health plans.
Performance was not met under this metric and thus these awards did not vest.
|
•
|
The final 20% metric was conditioned upon the Company’s either closing on a Board-approved acquisition in a new state, or winning a Request For Proposal (“RFP”) in a new state, or winning an RFP for a new Medicaid product line in an existing state during the 2016-2018 period. Special Needs Plan (“SNP”) or marketplace entry, or a capabilities-based acquisition, do not count towards satisfaction of this performance metric. Upon the first such achievement of this metric in 2016, 2017, or 2018, 5% of the restricted stock grant shall vest. Upon the second such achievement, a further 5% of the restricted stock grant shall vest. Upon the third such achievement, the final 10% of the restricted stock grant shall vest.
|
•
|
The first such achievement of this goal was met in 2016 as a result of the closing of the New York Medicaid acquisition.
|
•
|
The second such achievement of this goal was met in 2017 related to winning of an RFP in Mississippi for a Medicaid Coordinated Care Contract for the statewide administration of the Mississippi Coordinated Access Network (MississippiCAN), by the Company’s wholly owned subsidiary, Molina Healthcare of Mississippi, Inc. The operational start date for the program is currently scheduled for July 1, 2018, pending the completion of a readiness review with the Mississippi Division of Medicaid.
|
•
|
The third such achievement of this goal was also met in 2017 related to the expansion of the Company into Idaho, through the Company’s wholly owned subsidiary, Molina Healthcare of Utah, Inc., dba Molina Healthcare of Idaho. As of January 1, 2018, the plan launched a so-called Fully Integrated Dual Eligible Special Needs Plan (or FIDE SNP) Medicare-Medicaid Coordinated Plan (MMCP) and Medicare Advantage HMO (MAPD) Plan. As part of this launch, we have signed both a MMCP contract with Idaho Department of Health and Welfare and a FIDE SNP contract with CMS. The product’s specific name is Molina Medicare Options Plus. An FIDE SNP enrolls individuals over the age of 21 who are eligible for both Medicare and Medicaid.
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
(1)
|
Option Awards
|
Non-Equity
Incentive Plan
Comp.
(2)
|
Change in
Nonqualified
Deferred
Comp.
Earnings
(3)
|
All Other
Comp.
(4)
|
Total
|
||||||||||||||||
Joseph M. Zubretsky
(5)(8)(9)(10)
|
2017
|
$
|
175,000
|
|
$
|
4,000,000
|
|
$
|
—
|
|
$
|
15,536,250
|
|
$
|
—
|
|
$
|
—
|
|
$
|
27,858
|
|
$
|
19,739,108
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Joseph W. White
(6)
|
2017
|
$
|
1,248,167
|
|
$
|
—
|
|
$
|
3,361,920
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,821
|
|
$
|
40,232
|
|
$
|
4,653,140
|
|
Chief Financial Officer and former Interim Chief Executive Officer
|
2016
|
$
|
538,000
|
|
$
|
—
|
|
$
|
2,786,018
|
|
$
|
—
|
|
$
|
80,000
|
|
$
|
1,377
|
|
$
|
15,033
|
|
$
|
3,420,428
|
|
|
2015
|
$
|
515,000
|
|
$
|
—
|
|
$
|
1,461,882
|
|
$
|
—
|
|
$
|
384,432
|
|
$
|
136
|
|
$
|
15,064
|
|
$
|
2,376,514
|
|
Jeff D. Barlow
|
2017
|
$
|
550,000
|
|
$
|
—
|
|
$
|
1,616,103
|
|
$
|
—
|
|
$
|
—
|
|
$
|
27,041
|
|
$
|
33,681
|
|
$
|
2,226,825
|
|
Chief Legal Officer and Secretary
|
2016
|
$
|
525,000
|
|
$
|
—
|
|
$
|
2,021,015
|
|
$
|
—
|
|
$
|
75,000
|
|
$
|
8,395
|
|
$
|
33,545
|
|
$
|
2,662,955
|
|
|
2015
|
$
|
475,000
|
|
$
|
—
|
|
$
|
1,218,191
|
|
$
|
—
|
|
$
|
354,574
|
|
$
|
146
|
|
$
|
31,654
|
|
$
|
2,079,565
|
|
Dr. J. Mario Molina
(7)
|
2017
|
$
|
440,770
|
|
$
|
—
|
|
$
|
9,944,395
|
|
$
|
—
|
|
$
|
—
|
|
$
|
708,440
|
|
$
|
5,904,399
|
|
$
|
16,998,004
|
|
Former President and Chief Executive Officer
|
2016
|
$
|
1,170,000
|
|
$
|
—
|
|
$
|
8,442,976
|
|
$
|
—
|
|
$
|
255,000
|
|
$
|
165,449
|
|
$
|
15,443
|
|
$
|
10,048,868
|
|
|
2015
|
$
|
1,050,000
|
|
$
|
—
|
|
$
|
7,893,843
|
|
$
|
—
|
|
$
|
1,306,324
|
|
$
|
—
|
|
$
|
15,490
|
|
$
|
10,265,657
|
|
John C. Molina
(7)
|
2017
|
$
|
318,038
|
|
$
|
—
|
|
$
|
3,418,430
|
|
$
|
—
|
|
$
|
—
|
|
$
|
79,908
|
|
$
|
4,197,577
|
|
$
|
8,013,953
|
|
Former Chief Financial Officer
|
2016
|
$
|
878,000
|
|
$
|
—
|
|
$
|
4,258,980
|
|
$
|
—
|
|
$
|
180,000
|
|
$
|
50,025
|
|
$
|
16,090
|
|
$
|
5,383,095
|
|
|
2015
|
$
|
878,000
|
|
$
|
—
|
|
$
|
2,606,918
|
|
$
|
—
|
|
$
|
910,279
|
|
$
|
—
|
|
$
|
15,277
|
|
$
|
4,410,474
|
|
Terry P. Bayer
(11)
|
2017
|
$
|
700,000
|
|
$
|
—
|
|
$
|
2,734,795
|
|
$
|
—
|
|
$
|
—
|
|
$
|
176,253
|
|
$
|
22,698
|
|
$
|
3,633,746
|
|
Former Chief Operating Officer
|
2016
|
$
|
644,000
|
|
$
|
—
|
|
$
|
3,326,005
|
|
$
|
—
|
|
$
|
110,000
|
|
$
|
74,991
|
|
$
|
22,499
|
|
$
|
4,177,495
|
|
|
2015
|
$
|
644,000
|
|
$
|
—
|
|
$
|
1,851,686
|
|
$
|
—
|
|
$
|
534,141
|
|
$
|
—
|
|
$
|
17,798
|
|
$
|
3,047,625
|
|
Lisa A. Rubino
(5)(12)
|
2017
|
$
|
500,000
|
|
$
|
—
|
|
$
|
600,012
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,545
|
|
$
|
33,906
|
|
$
|
1,176,463
|
|
Former Sr. Vice President of Medicare & Duals Integration
|
|
|
|
|
|
|
|
|
|
(1)
|
This column shows the aggregate grant date fair value of performance stock awards (“PSAs”), performance stock units (“PSUs”) and restricted stock awards (“RSAs”) granted under the Company’s 2011 Equity Incentive Plan in the years shown. The aggregate grant date fair value is the amount the Company expects to expense for accounting purposes over the award’s vesting schedule. See the
2017 Grants of Plan-Based Awards Table
for additional information, including the performance conditions and valuation assumptions as applicable, for PSAs, PSUs, and RSAs granted in
2017
.
|
(2)
|
This column shows the amounts earned under the Company’s performance-based short-term cash incentive plan.
|
(3)
|
Ms. Bayer’s change in non-qualified deferred compensation earnings for the year 2015 was ($6,924); Dr. J. Mario Molina’s change in non-qualified deferred compensation earnings for the year 2015 was ($188,966); and Mr. Molina’s change in non-qualified deferred compensation earnings for the year 2015 was ($7,487).
|
(4)
|
Details are provided below in the
2017 All Other Compensation Table
.
|
(5)
|
Compensation for Mr. Zubretsky and Ms. Rubino is provided only for 2017 because they were not named executive officers prior to 2017. Mr. Zubretsky’s employment with the Company started on November 6, 2017. Since Ms. Rubino was not a named executive officer prior to 2017, the compensation committee was not involved in the determination of her salary or bonus opportunity.
|
(6)
|
Mr. White’s annual salary was increased from $600,000 to $650,000 effective as of May 2, 2017 in connection with his appointment as chief financial officer. In addition, Mr. White received a monthly special salary of $100,000 for his service as interim president and chief executive officer from May 2, 2017 to November 6, 2017. The amount of $1,248,167 represents the sum of (i) his salary as chief accounting officer and chief financial officer of $631,500 received in 2017 and (ii) the special salary of $616,667 for serving as interim president and chief executive officer. Additionally, in connection with his service as interim president and chief executive officer, on June 5, 2017 the Company awarded Mr. White a restricted stock award of 15,008 shares subject to time-based vesting in equal increments over three years on each of June 5, 2018, June, 2019, and June 2020.
|
(7)
|
Dr. Molina’s and Mr. John C. Molina’s employment was terminated by the Company without cause on May 2, 2017. See also Note 2 to the
2017 All Other Compensation Table
below.
|
(8)
|
Mr. Zubretsky’s employment with the Company commenced on November 6, 2017, and as a result the salary amount reflected in the table is the amount paid for the period November 6, 2017 to December 31, 2017, at an annualized salary of $1,300,000. Mr. Zubretsky’s bonus amount consists of his sign-on bonus. In the event that prior to the second anniversary of his start date Mr. Zubretsky’s employment terminates by reason of a termination for the Company for “cause” (as defined in the employment agreement) or Mr. Zubretsky’s resignation without “good reason” (as defined in the employment agreement), Mr. Zubretsky will be required to repay the Company a prorated portion of the sign-on bonus payment.
|
(9)
|
For 2017, Mr. Zubretsky was not eligible to receive any non-equity incentive plan compensation (short-term incentive cash bonus) and was not eligible to participate in the Company’s non-qualified deferred compensation plan.
|
(10)
|
Pursuant to Mr. Zubretsky’s employment agreement, the Company granted him an option to purchase 375,000 shares of our common stock at an exercise price of $67.33 per share which expires October 8, 2027. These options are subject to time-based vesting in equal increments over three years on each of October 9, 2018, October 9, 2019, and October 9, 2020. The Company granted Mr. Zubretsky such option to compensate him for forgone compensation benefits from his previous employer.
|
(11)
|
Ms. Bayer retired from her position as chief operating officer of the Company on February 2, 2018.
|
(12)
|
Ms. Rubino’s employment was terminated by the Company without cause on March 2, 2018.
|
Name
|
Long-term Disability Premiums
|
Group Term Life Premiums
|
Executive Disability Premiums
|
401(k) Matching Contribution
(1)
|
Liquidated Amounts for Paid Time-off
|
Severance
(2)
|
Relocation Expense/Remote Stipend
(3)
|
Imputed Tax Benefit
|
All Other Compensation
|
||||||||||||||||||
Joseph M. Zubretsky
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
27,858
|
|
$
|
—
|
|
$
|
27,858
|
|
Joseph W. White
|
$
|
820
|
|
$
|
3,612
|
|
$
|
—
|
|
$
|
10,800
|
|
$
|
25,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
40,232
|
|
Jeff D. Barlow
|
$
|
820
|
|
$
|
1,932
|
|
$
|
—
|
|
$
|
10,800
|
|
$
|
20,129
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
33,681
|
|
Dr. J. Mario Molina
|
$
|
426
|
|
$
|
1,250
|
|
$
|
—
|
|
$
|
10,800
|
|
$
|
201,923
|
|
$
|
5,690,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
5,904,399
|
|
John C. Molina
|
$
|
378
|
|
$
|
669
|
|
$
|
345
|
|
$
|
10,800
|
|
$
|
145,385
|
|
$
|
4,040,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,197,577
|
|
Terry P. Bayer
|
$
|
1,230
|
|
$
|
10,668
|
|
$
|
—
|
|
$
|
10,800
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
22,698
|
|
Lisa A. Rubino
|
$
|
820
|
|
$
|
5,544
|
|
$
|
—
|
|
$
|
9,539
|
|
$
|
9,615
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,388
|
|
$
|
33,906
|
|
(1)
|
The Company has a 401(k) plan that is available to all employees. The plan allows pretax deferral, for which the Company matches dollar-for-dollar of the first 4% of salary electively deferred under the plan.
|
(2)
|
Dr. Molina and Mr. Molina were terminated by the Company without cause on May 2, 2017, and received severance payments and benefits pursuant to their employment agreements with the Company. The severance amount reflected in the table consists of the cash severance received in connection with the termination of employment. Ms. Bayer retired on February 2, 2018, and received severance payments and benefits pursuant to her employment agreement with the
|
(3)
|
Consists of $27,708 relocation expense and $150 remote stipend.
|
|
Realized Compensation
|
||||||||||
Name
|
2015
|
|
2016
|
|
2017
|
||||||
Joseph M. Zubretsky
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,202,858
|
|
Joseph W. White
|
$
|
2,238,488
|
|
|
$
|
1,630,426
|
|
|
$
|
2,309,774
|
|
Jeff D. Barlow
|
$
|
1,901,409
|
|
|
$
|
1,462,354
|
|
|
$
|
1,319,559
|
|
Dr. J. Mario Molina
(2)
|
$
|
9,490,297
|
|
|
$
|
5,572,952
|
|
|
$
|
30,528,257
|
|
John C. Molina
(2)
|
$
|
3,667,891
|
|
|
$
|
3,068,059
|
|
|
$
|
15,458,294
|
|
Terry P. Bayer
|
$
|
4,016,653
|
|
|
$
|
2,262,426
|
|
|
$
|
2,066,115
|
|
Lisa A. Rubino
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
752,910
|
|
(1)
|
Realized Compensation for Mr. Zubretsky and Ms. Rubino is provided only for 2017 because they were not named executive officers prior to 2017.
|
(2)
|
Dr. Molina’s and Mr. Molina’s 2017 realized compensation includes the severance payments and benefits received in connection with termination of their employment without cause on May 2, 2017. For more information on the severance payments and benefits received by such former executive officers, see discussion above in
“Executive Compensation - Termination of Named Executive Officer Founders.”
|
•
|
Bonus earned for
2017
(reflected in Bonus and Non-equity Incentive Plan Compensation columns), which was paid in
2018
;
|
•
|
Aggregate grant date fair value of equity awards (reflected in Stock Awards and Option Awards columns);
|
•
|
Year over year change in nonqualified deferred compensation earnings (reflected in the Change in Nonqualified Deferred Comp. Earnings column);
|
•
|
Contributions to 401(k) and medical premiums that are deducted from income on a pre-tax basis; and
|
•
|
The Company’s 401(k) match (reflected in All Other Comp. column).
|
•
|
Bonus earned for
2016
(reflected in Bonus and Non-equity Incentive Plan Compensation columns for
2016
) which was paid in
2017
;
|
•
|
Value realized from exercise of stock options before payment of applicable withholding taxes and brokerage commissions (reflected in
Option Exercises and Stock Vested Table
); and
|
•
|
Value realized from vesting of RSAs and/or PSAs before payment of applicable withholding taxes and brokerage commissions (reflected in
Option Exercises and Stock Vested Table
).
|
|
|
Estimated Possible Payouts
Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(2)
|
All Other
Stock
Awards:
Number of
Shares of
Stock
|
All Other Option Awards: Number of Securities Underlying Options
(8)
|
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards
(9)
|
||||||||||||||||||
Name
|
Grant Date
|
Threshold ($)
|
Target
($)
|
Maximum ($)
|
Threshold (#)
|
Target
(#)
|
Maximum (#)
|
||||||||||||||||||
Joseph M. Zubretsky
|
11/6/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
375,000
|
|
|
$
|
15,536,250
|
|
|
Joseph W. White
|
3/1/2017
|
$
|
211,250
|
|
$
|
422,500
|
|
$
|
845,000
|
|
—
|
|
—
|
|
—
|
|
13,847
|
|
—
|
|
(3
|
)
|
$
|
684,042
|
|
|
5/10/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
12,309
|
|
24,617
|
|
49,233
|
|
—
|
|
—
|
|
|
$
|
1,677,895
|
|
|
|
6/5/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
—
|
|
15,008
|
|
—
|
|
(4
|
)
|
$
|
999,983
|
|
Jeff D. Barlow
|
3/1/2017
|
$
|
160,875
|
|
$
|
321,750
|
|
$
|
643,500
|
|
—
|
|
—
|
|
—
|
|
9,474
|
|
—
|
|
(3
|
)
|
$
|
468,016
|
|
|
5/10/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
8,422
|
|
16,844
|
|
33,687
|
|
—
|
|
—
|
|
|
$
|
1,148,087
|
|
|
J. Mario Molina
(5)
|
3/1/2017
|
$
|
609,375
|
|
$
|
1,218,750
|
|
$
|
2,437,500
|
|
—
|
|
—
|
|
—
|
|
58,300
|
|
—
|
|
(3
|
)
|
$
|
2,880,020
|
|
|
5/10/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
68,016
|
|
103,644
|
|
174,900
|
|
—
|
|
—
|
|
|
$
|
7,064,375
|
|
|
John C. Molina
(6)
|
3/1/2017
|
$
|
365,625
|
|
$
|
731,250
|
|
$
|
1,462,500
|
|
—
|
|
—
|
|
—
|
|
20,041
|
|
—
|
|
(3
|
)
|
$
|
990,025
|
|
|
5/10/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
23,381
|
|
35,628
|
|
60,122
|
|
—
|
|
—
|
|
|
$
|
2,428,405
|
|
|
Terry P. Bayer
(7)
|
3/1/2017
|
$
|
227,500
|
|
$
|
455,000
|
|
$
|
910,000
|
|
—
|
|
—
|
|
—
|
|
16,033
|
|
—
|
|
(3
|
)
|
$
|
792,030
|
|
|
5/10/2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
14,252
|
|
28,503
|
|
57,006
|
|
—
|
|
—
|
|
|
$
|
1,942,765
|
|
|
Lisa A. Rubino
|
3/1/2017
|
$
|
81,250
|
|
$
|
162,500
|
|
$
|
325,000
|
|
—
|
|
—
|
|
—
|
|
12,146
|
|
—
|
|
(3
|
)
|
$
|
600,012
|
|
(1)
|
These columns show the possible payouts under the Company’s performance-based short-term cash incentive plan. The discretionary portion of the performance-based short-term cash incentive bonus is excluded from the table above. Under this plan, Mr. White’s bonus opportunity is 100% of his base salary; Ms. Bayer’s bonus opportunity is 100% of her base salary; Mr. Barlow’s bonus opportunity is 90% of his base salary, and Ms. Rubino’s bonus opportunity is 50% of her base salary. For each of the named executives, 65% of the bonus opportunity relates to a net income performance measure and 35% is subject to the discretion of the compensation committee, based on consideration of such factors as completing the organization development effort and filling key executive roles; developing a long-term strategic plan for Medicare and Direct Delivery; increasing quality revenues from the state health plans; improving our claims payment metrics and overall claims systems; improving our Star metrics; and various other factors, with the net income and discretionary component determined and paid independently. Achievement of the threshold of $84 million in net income results in payout at the threshold level of 50%; achievement of $120 million in net income results in payout at the target level of 100%; and achievement of $156 million in net income results in payout at the maximum level of 200%. The actual cash bonus payout amounts for achievement within specified points along the net income range (as specified under the performance metric) are interpolated linearly between those points. The maximum payout is 200%. See further discussion regarding these metrics at “
Compensation Discussion and Analysis
—Elements of Compensation.” The actual amounts earned and paid to the named executive officers under the
2017
plan are presented in the “
2017 Summary Compensation Table
—Non-Equity Incentive Plan Comp.”
|
(2)
|
These columns show the estimated future payouts of PSUs under the awards granted in
2017
. For each of the named executives, with respect to the
2017
net profit margin performance metric, (i) achievement of the entry point of the metric results in 50% or first share vesting of the PSUs, (ii) target achievement results in 100% vesting of the PSUs, and (iii) full achievement results in 200% vesting of the awards. Intermediate achievement within the range results in the vesting of that number of shares proportional to the level of achievement within the range; all amounts shall be interpolated linearly between the end points of the range.
|
(3)
|
Includes the RSAs granted to named executive officers on March 1, 2017. These awards are subject to time-based vesting in equal increments over three years on each of March 1, 2018, March 1, 2019, and March 1, 2020.
|
(4)
|
Includes RSAs granted to Mr. White on June 5, 2017, which awards are subject to time-based vesting in equal increments over three years on each of June 5, 2018, June 5, 2019, and June 5, 2020.
|
(5)
|
Dr. Molina’s employment was terminated on May 2, 2017. Pursuant to his employment agreement, all outstanding equity awards were immediately vested at the target level. For more information on the severance payments and benefits received by Dr. Molina, see discussion above in
“Executive Compensation - Termination of Named Executive Officer Founders.”
|
(6)
|
Mr. Molina’s employment was terminated on May 2, 2017. Pursuant to his employment agreement, all outstanding equity awards were immediately vested at the target level. For more information on the severance payments and benefits received by Mr. Molina, see discussion above in
“Executive Compensation - Termination of Named Executive Officer Founders.”
|
(7)
|
Ms. Bayer retired from the Company on February 2, 2018, and received severance payments and benefits pursuant to her employment agreement with the Company, including acceleration of vesting of certain outstanding equity awards previously granted to her. For more information on such severance payments and benefits, see discussion above in “
Executive Compensation - Retirement of Chief Operating Officer.”
|
(8)
|
Pursuant to Mr. Zubretsky’s employment agreement, the Company granted him an option to purchase 375,000 shares of our common stock at an exercise price of $67.33 per share which expires October 8, 2027. These options are subject to time-based vesting in equal increments over three years on each of October 9, 2018, October 9, 2019, and October 9, 2020.
|
(9)
|
This column shows the grant date fair value of the PSUs, RSAs and Options. Generally, the grant date fair value is the amount that the Company expects to expense in its financial statements over the awards’ or options’ vesting schedule. As described above, the amounts in this column do not reflect compensation actually received by the named executive officers.
|
|
Option Awards
|
|
Stock and Stock Unit Awards
|
|||||||||||||||||||
Name
|
Option Grant Date
|
Number of
Securities
Underlying
Unexercised
Options (Exercisable)
|
Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Options (Unearned)
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Stock Award Grant Date
|
Number of
Shares of
Stock
That
Have Not
Vested
|
|
Market
Value of
Shares of
Stock
That
Have Not
Vested
(1)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares
That Have
Not
Vested
|
|
Equity
Incentive
Plan
Awards:
Market
or Pay-
Out
Value of
Unearned
Shares
That
Have
Not
Vested
(1)
|
|
|||
Joseph M. Zubretsky
|
11/6/2017
|
|
375,000
|
|
—
|
|
$
|
67.33
|
|
10/8/2027
|
|
|
—
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
Joseph W. White
|
|
|
—
|
|
—
|
|
|
|
|
4/1/2015
|
2,262
|
|
$
|
173,450
|
|
4,524
|
|
$
|
346,900
|
|
||
|
|
|
|
|
|
|
|
3/7/2016
|
8,636
|
|
$
|
662,208
|
|
10,793
|
|
$
|
827,607
|
|
||||
|
|
|
|
|
|
|
|
3/1/2017
|
13,847
|
|
$
|
1,061,788
|
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
5/10/2017
|
—
|
|
$
|
—
|
|
18,848
|
|
$
|
1,445,265
|
|
||||
|
|
|
|
|
|
|
|
6/5/2017
|
15,008
|
|
$
|
1,150,813
|
|
—
|
|
$
|
—
|
|
||||
Total
|
|
|
—
|
|
—
|
|
|
|
|
|
39,753
|
|
$
|
3,048,259
|
|
34,165
|
|
$
|
2,619,772
|
|
||
Jeff D. Barlow
|
|
|
—
|
|
—
|
|
|
|
|
4/1/2015
|
1,885
|
|
$
|
144,542
|
|
3,770
|
|
$
|
289,084
|
|
||
|
|
|
|
|
|
|
|
3/7/2016
|
6,263
|
|
$
|
480,247
|
|
7,830
|
|
$
|
600,404
|
|
||||
|
|
|
|
|
|
|
|
3/1/2017
|
9,474
|
|
$
|
726,466
|
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
5/10/2017
|
—
|
|
$
|
—
|
|
12,896
|
|
$
|
988,865
|
|
||||
Total
|
|
|
—
|
|
—
|
|
|
|
|
|
17,622
|
|
$
|
1,351,255
|
|
24,496
|
|
$
|
1,878,353
|
|
||
Terry P. Bayer
(2)
|
|
|
—
|
|
—
|
|
|
|
|
4/1/2015
|
2,866
|
|
$
|
219,765
|
|
5,730
|
|
$
|
439,376
|
|
||
|
|
|
|
|
|
|
|
3/7/2016
|
10,309
|
|
$
|
790,494
|
|
12,885
|
|
$
|
988,022
|
|
||||
|
|
|
|
|
|
|
|
3/1/2017
|
16,033
|
|
$
|
1,229,411
|
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
5/10/2017
|
—
|
|
$
|
—
|
|
21,823
|
|
$
|
1,673,388
|
|
||||
Total
|
|
|
—
|
|
—
|
|
|
|
|
|
29,208
|
|
$
|
2,239,670
|
|
40,438
|
|
$
|
3,100,786
|
|
||
Lisa A. Rubino
|
|
|
—
|
|
—
|
|
|
|
|
3/1/2014
|
3,981
|
|
$
|
305,263
|
|
—
|
|
$
|
—
|
|
||
|
|
|
|
|
|
|
|
3/1/2015
|
4,710
|
|
$
|
361,163
|
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
3/1/2016
|
7,059
|
|
$
|
541,284
|
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
3/1/2017
|
12,146
|
|
$
|
931,355
|
|
—
|
|
$
|
—
|
|
||||
Total
|
|
|
—
|
|
—
|
|
|
|
|
|
27,896
|
|
$
|
2,139,065
|
|
—
|
|
$
|
—
|
|
(1)
|
The market value of the unvested RSAs, PSAs, and PSUs represents the product of the closing price of the Company’s stock as of December 29, 2017, the last trading day of our fiscal year, which was $76.68, and the number of shares underlying such award and, with respect to PSAs and PSUs, assumes satisfaction of the applicable performance conditions. See the
Outstanding Equity Awards Vesting Schedule Table
on the next page for more information regarding vesting of these awards.
|
(2)
|
Ms. Bayer retired from the Company on February 2, 2018, and received severance payments and benefits pursuant to her employment agreement with the Company. For more information on such severance payments and benefits, see discussion above in
“Executive Compensation - Retirement of Chief Operating Officer.”
|
Name of Executive Officer
|
|
Grant Date
|
|
Stock Awards and Units Vesting Schedule
(1)
|
|||
|
|
Vested
|
Subject to Vesting
|
||||
|
|
PSAs
|
PSAs/PSUs
|
||||
Joseph W. White
|
|
4/1/2015
|
|
4,524 PSAs vested in 2018
|
|
|
2,262 RSAs vest 4/1/2018
|
|
|
3/7/2016
|
|
6,476 PSAs vested in 2018
|
4,318 RSAs vested in 2018
|
4,317 PSAs vest 3/7/2019, subject to performance conditions
|
4,318 RSAs vest 3/7/2019
|
|
|
3/1/2017
|
|
|
4,616 RSAs vested in 2018
|
|
4,616 RSAs vest 3/1/2019; 4,615 RSAs vest 3/1/2020
|
|
|
5/10/2017
|
|
|
|
5,769 PSUs vest 3/1/2019, subject to achievement of performance conditions; 5,385 PSUs vest 3/1/2020, subject to performance conditions; 7,694 PSUs vest either on 3/1/2019 or 3/1/2020 subject to performance conditions
|
|
|
|
6/5/2017
|
|
|
|
|
5,003 RSAs vest 6/5/2018; 5,003 RSAs vest 6/5/2019; 5,002 RSAs vest 6/5/2020
|
Jeff D. Barlow
|
|
4/1/2015
|
|
3,770 PSAs vested in 2018
|
1,885 RSAs vested in 2018
|
|
|
|
|
3/7/2016
|
|
4,698 PSAs vested in 2018
|
3,132 RSAs vested in 2018
|
3,132 PSAs vest 3/7/2019, subject to achievement of performance conditions
|
3,131 RSAs vest 3/7/2019
|
|
|
3/1/2017
|
|
|
3,158 RSAs vested in 2018
|
|
3,158 RSAs vest 3/1/2019;
3,158 RSAs vest 3/1/2020
|
|
|
5/10/2017
|
|
|
|
3,948 PSUs vest 3/1/2019, subject to achievement of performance conditions; 3,684 PSUs vest 3/1/2020, subject to performance conditions; 5,264 PSUs vest either on 3/1/2019 or 3/1/2020 subject to performance conditions
|
|
Terry P. Bayer
(2)
|
|
4/1/2015
|
|
5,730 PSAs vested in 2018
|
2,866 RSAs vested in 2018
|
|
|
|
|
3/7/2016
|
|
7,731 PSAs vested in 2018
|
10,309 RSAs vested in 2018
|
|
|
|
|
3/1/2017
|
|
|
16,033 RSAs vested in 2018
|
|
|
Lisa A. Rubino
(3)
|
|
3/1/2014
|
|
|
3,981 RSAs vested in 2018
|
|
|
|
|
3/1/2015
|
|
|
2,355 RSAs vested in 2018
|
|
|
|
|
3/1/2016
|
|
|
2,353 RSAs vested in 2018
|
|
|
|
|
3/1/2017
|
|
|
3,037 RSAs vested in 2018
|
|
|
(1)
|
This column shows the vesting schedule for unvested or unearned stock awards reported in the “Number of Shares of Stock That Have Not Vested,” and “Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested” columns of the
2017 Outstanding Equity Awards at Fiscal Year End Table
. RSAs vest on the dates indicated above. PSAs and PSUs vest subject to the achievement of performance conditions, on the date the compensation committee certifies the achievement of such performance conditions. See the
Outstanding Performance-Based Equity Awards Table
for more information on these awards.
|
(2)
|
Ms. Bayer retired as chief operating officer of the Company on February 2, 2018. Her retirement was deemed a termination without cause for purposes of determining her eligibility to receive severance benefits pursuant to her employment agreement. As part of such benefits, she was entitled to acceleration of all of her time-based restricted stock awards (29,208 RSAs) and acceleration of the performance-based equity compensation for which the performance conditions were satisfied (10,596 PSAs). For more information on such severance payments and benefits, see discussion above in
“Executive Compensation - Retirement of Chief Operating Officer.”
|
(3)
|
Ms. Rubino’s employment with the Company was terminated on March 2, 2018, and as result all of her RSAs with vesting dates after March 2, 2018 were forfeited.
|
Performance Goals
|
|
Name
|
Performance Period:
Fiscal Year(s)
|
||||||||||
Metric
|
Entry Point
|
Target Achievement
|
Full Achievement
|
Grant Date
|
Joseph W. White
|
|
Jeff D. Barlow
|
|
Terry P. Bayer
|
||||
Annual Premium Revenue
(1)
|
$15.0 billion
|
|
$16.0 billion
|
4/1/2015
|
2,262
|
|
|
1,885
|
|
|
2,865
|
|
2017
|
Net Profit Margin (after-tax)
(2)
|
1.5%
|
|
2.0%
|
4/1/2015
|
2,262
|
|
|
1,885
|
|
|
2,865
|
|
2017
|
Pre-Tax Income
(2)
|
$500 million
|
|
$650 million
|
4/1/2015
|
2,262
|
|
|
1,885
|
|
|
2,865
|
|
2017
|
3-year TSR
(3)
|
|
|
|
4/1/2015
|
2,262
|
|
|
1,885
|
|
|
2,865
|
|
2015-2017
|
Net Profit Margin (after-tax)
(2)
|
1.5%
|
|
2.0%
|
3/7/2016
|
4,317
|
|
|
3,132
|
|
|
5,154
|
|
2017
|
Stars Rating
(2)
|
|
|
|
3/7/2016
|
4,317
|
|
|
3,132
|
|
|
5,154
|
|
2017
|
Net Profit Margin (after-tax)
(4)
|
1.5%
|
|
2.0%
|
3/7/2016
|
4,317
|
|
|
3,132
|
|
|
5,154
|
|
2018
|
RFP/Acquisition
(5)
|
|
|
|
3/7/2016
|
6,476
|
|
|
4,698
|
|
|
7,731
|
|
2016-2018
|
Net Profit Margin (after-tax)
(2)
|
0.5%
|
0.75%
|
1.0%
|
5/10/2017
|
5,769
|
|
|
3,948
|
|
|
6,680
|
|
2017
|
Net Profit Margin (after-tax)
(6)
|
1.0%
|
1.25%
|
1.5%
|
5/10/2017
|
5,769
|
|
|
3,948
|
|
|
6,680
|
|
2018
|
Net Profit Margin (after-tax)
(7)
|
1.5%
|
1.75%
|
2.0%
|
5/10/2017
|
5,385
|
|
|
3,684
|
|
|
6,235
|
|
2019
|
RFP/Acquisition
(8)
|
|
|
|
5/10/2017
|
7,694
|
|
|
5,264
|
|
|
8,908
|
|
2017-2019
|
Total
|
|
|
|
|
53,092
|
|
|
38,478
|
|
|
63,156
|
|
|
(1)
|
Awards vested on March 1, 2018.
|
(2)
|
Awards forfeited in 2018 because the performance metrics were not met.
|
(3)
|
Awards vested on January 19, 2018.
|
(4)
|
Net profit margin is based on the Company’s reported income from continuing operations, divided by total revenue. Achievement of the entry point shall result in 25% of first share vesting of the restricted stock grant, with full achievement resulting in 100% vesting of the grant. Intermediate achievement within the range shall result in the vesting of that number of shares as is proportional to the level of achievement within the range; all amounts shall be interpolated linearly between the end points of the range. If achieved, the awards, in the table above, subject to this metric will vest on March 7, 2019.
|
(5)
|
This metric is conditioned on the Company’s closing on a Board-approved acquisition in a new state, winning an RFP in a new state, or winning an RFP for a new Medicaid product line in an existing state. SNP or marketplace entry, or a capabilities-based acquisition, does not count towards satisfaction of the performance metric. In the event the Company achieves the metric in 2016, 2017, or 2018, upon the first such achievement, 25% of the restricted stock grant shall vest, which occurred on March 7, 2017. Upon the second such achievement, a further 25% of the restricted stock grant share vest. Upon the third achievement the final 50% of the restricted stock grant shall vest. The second and third such achievements occurred in 2017, and as a result, the final 75% of the restricted stock grants, in the table above, vested on March 7, 2018.
|
(6)
|
Net profit margin is based on the Company’s reported income from continuing operations, divided by total revenue. Achievement of the entry point shall result in 50% of the PSUs subject to this metric; target achievement shall result in 100% vesting of the PSUs; and full achievement shall result in 200% vesting of the PSU grant. Intermediate achievement within the range shall result in the vesting of that number of shares as is proportional to the level of achievement within the range; all amounts shall be interpolated linearly between the end points of the range. If achieved, the awards, in the table above, subject to this metric will vest on March 1, 2019.
|
(7)
|
Net profit margin is based on the Company’s reported income from continuing operations, divided by total revenue. Achievement of the entry point shall result in 50% of the PSUs subject to this metric; target achievement shall result in 100% vesting of the PSUs; and full achievement shall result in 200% vesting of the PSU grant. Intermediate achievement within the range shall result in the vesting of that number of shares as is proportional to the level of achievement within the range; all amounts shall be interpolated linearly between the end points of the range. If achieved, the awards, in the table above, subject to this metric will vest on March 1, 2020.
|
(8)
|
This metric is conditioned on the Company’s closing on a Board-approved acquisition in a new state, winning an RFP in a new state (including winning an RFP for Molina Medicaid Solutions, or winning an RFP for a new Medicaid product line in an existing state), or achieving a 10% year-over-year annual growth in Medicare enrollment (including enrollees in Medicare-Medicaid duals programs). However, this metric is further conditioned on achievement of the expansion targets previously identified as target metrics pursuant to grants made in 2016; thus, the metric will first be triggered after the fourth such achievement after 2016. SNP or Marketplace/Exchange entry, or a capabilities-based acquisition, do not count towards satisfaction of the performance metric. In the event the Company achieves the metric in 2017, 2018, or 2019, upon the first such achievement (meaning the fourth such achievement after 2016), 50% of the PSUs subject to this metric shall vest. Upon the second such achievement (meaning the fifth such achievement after 2016), 100% of the PSUs subject to this metric shall vest. Upon the third such achievement (meaning the sixth such achievement after 2016), 200% of the PSUs subject to this metric shall vest. Partial vesting of this PSU award may be made on March 1st of each of 2018, 2019 or 2020, as applicable, following the relevant level of achievement, whether entry, target or full. No PSUs subject to this metric will
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||
Name
|
Number of Shares
Acquired
on Exercise
|
|
|
Value Realized on
Exercise
|
|
|
Number of Shares
Acquired on Vesting
|
|
|
Value Realized on
Vesting
|
|
|
||
Joseph W. White
|
—
|
|
|
$
|
—
|
|
|
2,654
|
|
|
$
|
155,179
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
4,916
|
|
|
$
|
242,851
|
|
(3)
|
|
—
|
|
|
$
|
—
|
|
|
10,794
|
|
|
$
|
523,725
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
2,263
|
|
|
$
|
103,193
|
|
(5)
|
Jeff D. Barlow
|
—
|
|
|
$
|
—
|
|
|
2,123
|
|
|
$
|
124,132
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
4,008
|
|
|
$
|
197,995
|
|
(3)
|
|
—
|
|
|
$
|
—
|
|
|
7,830
|
|
|
$
|
379,911
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
1,885
|
|
|
$
|
85,956
|
|
(5)
|
J. Mario Molina
|
—
|
|
|
$
|
—
|
|
|
19,108
|
|
|
$
|
1,117,245
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
31,323
|
|
|
$
|
1,547,356
|
|
(3)
|
|
—
|
|
|
$
|
—
|
|
|
32,710
|
|
|
$
|
1,587,089
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
12,216
|
|
|
$
|
557,050
|
|
(5)
|
|
—
|
|
|
$
|
—
|
|
|
204,420
|
|
|
$
|
12,214,095
|
|
(6)
|
|
—
|
|
|
$
|
—
|
|
|
103,644
|
|
|
$
|
7,064,375
|
|
(7)
|
John C. Molina
|
54,000
|
|
|
$
|
1,492,020
|
|
(1)
|
7,099
|
|
|
$
|
415,079
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
11,133
|
|
|
$
|
549,971
|
|
(3)
|
|
—
|
|
|
$
|
—
|
|
|
16,500
|
|
|
$
|
800,580
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
4,034
|
|
|
$
|
183,950
|
|
(5)
|
|
—
|
|
|
$
|
—
|
|
|
83,111
|
|
|
$
|
4,965,882
|
|
(6)
|
|
—
|
|
|
$
|
—
|
|
|
35,628
|
|
|
$
|
2,428,404
|
|
(7)
|
Terry P. Bayer
|
—
|
|
|
$
|
—
|
|
|
4,644
|
|
|
$
|
271,535
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
7,509
|
|
|
$
|
370,945
|
|
(3)
|
|
—
|
|
|
$
|
—
|
|
|
12,886
|
|
|
$
|
625,228
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
2,866
|
|
|
$
|
130,690
|
|
(5)
|
Lisa A. Rubino
|
—
|
|
|
$
|
—
|
|
|
8,690
|
|
|
$
|
429,286
|
|
(3)
|
(1)
|
On February 28, 2017, Mr. Molina exercised 54,000 stock options, with an exercise price of $20.88 per share, compared with a weighted average market value of $48.51 per share.
|
(2)
|
These awards vested on January 16, 2017, on the date that the compensation committee of the Board of Directors certified the performance metric as met. The market value of our stock on January 13, 2017, the last trading day prior to the vesting date, was $58.47 per share.
|
(3)
|
On March 1, 2017, RSAs vested in accordance with the terms of the awards and, due to satisfaction of the underlying performance metric, PSAs vested. The market value of our stock on March 1, 2017 was $49.40.
|
(4)
|
On March 7, 2017, RSAs vested in accordance with the terms of the awards and, due to satisfaction of the underlying performance metric, PSAs vested. The market value of our stock on March 7, 2017 was $48.52.
|
(5)
|
On April 1, 2017, RSAs vested at a closing market price of $45.60.
|
(6)
|
These awards vested on May 2, 2017, due to Dr. Molina and Mr. Molina’s termination, in accordance with the terms of their employment agreements. The market value of our stock on May 2, 2017, was $59.75 per share.
|
(7)
|
These awards vested on May 10, 2017, due to Dr. Molina and Mr. Molina’s termination, in accordance with the terms of their employment agreements. The market value of our stock on May 2, 2017, was $68.16 per share.
|
Name
|
Executive
Contributions in
the Last FY
($)
|
|
|
Registrant
Contributions in
Last FY
($)
|
|
|
Aggregate
Earnings (Losses) in
Last FY
($)
|
|
|
Aggregate
Withdrawals/
Distributions
(2)
($)
|
|
|
Aggregate
Balance at
Last FYE
($)
|
|
|||||
Joseph M. Zubretsky
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Joseph W. White
|
$
|
13,113
|
|
|
$
|
—
|
|
|
$
|
2,821
|
|
|
$
|
—
|
|
|
$
|
15,934
|
|
Jeff D. Barlow
|
$
|
103,657
|
|
|
$
|
45,577
|
|
|
$
|
27,041
|
|
|
$
|
—
|
|
|
$
|
176,274
|
|
J. Mario Molina
|
$
|
5,286,431
|
|
|
$
|
—
|
|
|
$
|
708,440
|
|
|
$
|
(5,994,871
|
)
|
|
$
|
—
|
|
John C. Molina
|
$
|
455,007
|
|
|
$
|
—
|
|
|
$
|
79,908
|
|
|
$
|
(49,659
|
)
|
|
$
|
485,256
|
|
Terry P. Bayer
|
$
|
1,032,143
|
|
|
$
|
69,892
|
|
|
$
|
176,253
|
|
|
$
|
—
|
|
|
$
|
1,278,289
|
|
Lisa A. Rubino
|
$
|
178,512
|
|
|
$
|
178,365
|
|
|
$
|
42,545
|
|
|
$
|
—
|
|
|
$
|
399,422
|
|
Name & Principal Position
|
Compensation Components
|
Voluntary Termination ($)
|
Retirement
($)
|
Involuntary Not for Cause Termination
($)
|
For Cause Termination
($)
|
Involuntary Not for Cause or for Good Reason Termination (Change-in-Control)
($)
|
Disability
($)
|
Death
($)
|
||||||||||||||
Joseph M. Zubretsky
|
Cash Severance
(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,950,000
|
|
$
|
—
|
|
$
|
2,600,000
|
|
$
|
—
|
|
$
|
—
|
|
President and Chief Executive Officer
|
Stock Awards
|
—
|
|
$
|
3,506,250
|
|
$
|
3,506,250
|
|
—
|
|
$
|
3,506,250
|
|
$
|
3,506,250
|
|
$
|
3,506,250
|
|
||
|
Health Benefits
(3)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
23,212
|
|
—
|
|
—
|
|
||||||
|
Disability Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,080,000
|
|
—
|
|
||||||
|
Life Insurance Benefits
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,968
|
|
—
|
|
—
|
|
||||||
|
Total Value
|
$
|
—
|
|
$
|
3,506,250
|
|
$
|
5,456,250
|
|
$
|
—
|
|
$
|
6,131,430
|
|
$
|
4,586,250
|
|
$
|
3,506,250
|
|
Joseph W. White
|
Cash Severance
(1)(2)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,300,000
|
|
$
|
—
|
|
$
|
1,950,000
|
|
$
|
—
|
|
$
|
—
|
|
Chief Financial Officer
|
Stock Awards
|
—
|
|
—
|
|
$
|
3,048,259
|
|
—
|
|
$
|
5,668,031
|
|
—
|
|
—
|
|
|||||
|
Health Benefits
(3)
|
—
|
|
—
|
|
$
|
50,000
|
|
—
|
|
$
|
43,500
|
|
—
|
|
—
|
|
|||||
|
Disability Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,965,840
|
|
—
|
|
||||||
|
Life Insurance Benefits
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,968
|
|
—
|
|
750,000
|
|
||||||
|
Total Value
|
$
|
—
|
|
$
|
—
|
|
$
|
4,398,259
|
|
$
|
—
|
|
$
|
7,663,499
|
|
$
|
1,965,840
|
|
$
|
750,000
|
|
Jeff D. Barlow
|
Cash Severance
(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,100,000
|
|
$
|
—
|
|
$
|
1,595,000
|
|
$
|
—
|
|
$
|
—
|
|
Chief Legal Officer and Secretary
|
Stock Awards
|
—
|
|
—
|
|
$
|
1,351,255
|
|
—
|
|
$
|
3,229,608
|
|
—
|
|
—
|
|
|||||
|
Health Benefits
(3)
|
—
|
|
—
|
|
$
|
50,000
|
|
—
|
|
$
|
50,000
|
|
—
|
|
—
|
|
|||||
|
Disability Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,560,000
|
|
—
|
|
||||||
|
Life Insurance Benefits
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,968
|
|
—
|
|
750,000
|
|
||||||
|
Total Value
|
$
|
—
|
|
$
|
—
|
|
$
|
2,501,255
|
|
$
|
—
|
|
$
|
4,876,576
|
|
$
|
1,560,000
|
|
$
|
750,000
|
|
Terry P. Bayer
(5)
|
Cash Severance
(1)(2)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,400,000
|
|
$
|
—
|
|
$
|
2,100,000
|
|
$
|
—
|
|
$
|
—
|
|
Former Chief Operating Officer
|
Stock Awards
|
—
|
|
—
|
|
$
|
2,239,670
|
|
—
|
|
$
|
5,340,456
|
|
—
|
|
—
|
|
|||||
|
Health Benefits
(3)
|
—
|
|
—
|
|
$
|
50,000
|
|
—
|
|
$
|
43,500
|
|
—
|
|
—
|
|
|||||
|
Disability Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
315,000
|
|
—
|
|
||||||
|
Life Insurance Benefits
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
$
|
1,279
|
|
—
|
|
750,000
|
|
||||||
|
Total Value
|
$
|
—
|
|
$
|
—
|
|
$
|
3,689,670
|
|
$
|
—
|
|
$
|
7,485,235
|
|
$
|
315,000
|
|
$
|
750,000
|
|
Lisa A. Rubino
(3)(6)
|
Cash Severance
(1)(2)
|
$
|
—
|
|
$
|
—
|
|
$
|
500,000
|
|
$
|
—
|
|
$
|
1,250,000
|
|
$
|
—
|
|
$
|
—
|
|
Former Sr. Vice President of Medicare & Duals Integration
|
Stock Awards
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,139,065
|
|
$
|
—
|
|
$
|
—
|
|
|
Health Benefits
(3)
|
$
|
—
|
|
$
|
—
|
|
$
|
25,703
|
|
$
|
—
|
|
$
|
25,703
|
|
$
|
—
|
|
$
|
—
|
|
|
Disability Income
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
840,000
|
|
$
|
—
|
|
|
Life Insurance Benefits
(4)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,968
|
|
$
|
—
|
|
$
|
—
|
|
|
Total Value
|
$
|
—
|
|
$
|
—
|
|
$
|
525,703
|
|
$
|
—
|
|
$
|
3,416,736
|
|
$
|
840,000
|
|
$
|
—
|
|
(1)
|
The amounts in the table were computed based on the named executive officers’ salaries and target short-term bonus opportunity as of
December 31, 2017
. In February
2018
, the compensation committee determined to leave unchanged the base salaries for Mr. Zubretsky and Mr. White, and to increase the base salary for Mr. Barlow to $600,000. The compensation committee further determined to set Mr. Zubretsky’s 2018 target short-term bonus opportunity at 150% of his base salary, leave unchanged Mr. White’s
2018
target short-term bonus opportunity at 100% of his base salary, and increase Mr. Barlow’s 2018 target short-term bonus opportunity to 100% of his base salary. As provided in his employment agreement, Mr. Zubretsky was not entitled to a short-term bonus in 2017.
|
(3)
|
For Mr. Zubretsky, the amount for health benefits payable upon involuntary, not for cause or good reason termination (change-in-control) represents the amount he is entitled to receive for continued health care and dental benefits under the Company’s applicable benefits programs for 24 months following the date of termination, pursuant to the Company’s change in control severance plan. For Mr. White, Mr. Barlow, and Ms. Bayer such amounts under the change in control severance plan are lower than the amounts for health benefits they are entitled to receive under their respective change in control agreements, and for Ms. Rubino pursuant to her employment offer letter, therefore, the amounts in the table represent the health benefits payable for involuntary, not for cause or good reason termination (change-in-control) under those agreements.
|
•
|
the median of the total direct compensation of all employees of our Company (other than Mr. Zubretsky, our chief executive officer), was $46,397; and
|
•
|
the total direct compensation of Mr. Zubretsky, our chief executive officer, was $20,864,108.
|
•
|
Salary received in fiscal year 2017;
|
•
|
Short term incentives (cash bonus);
|
•
|
Long term incentives (equity-based awards);
|
•
|
Company-paid 401(K) plan match (4%) made in fiscal year 2017; and
|
•
|
All other compensation (stipends, sign-on bonus, one-time bonus, etc.).
|
•
|
Joseph M. Zubretsky, president and chief executive officer;
|
•
|
Joseph W. White, chief financial officer;
|
•
|
Jeff D. Barlow, chief legal officer and secretary;
|
•
|
Pamela S. Sedmak, executive vice president of health plan operations; and
|
•
|
Mark L. Keim, executive vice president of strategic planning and corporate development.
|
|
Base Salary
|
||||||||||
Named Executive Officer
|
2018
|
2017
|
Change ($)
|
Change (%)
|
|||||||
Joseph M. Zubretsky, President and Chief Executive Officer
|
$
|
1,300,000
|
|
$
|
1,300,000
|
|
$
|
—
|
|
—
|
|
Joseph W. White, Chief Financial Officer
(1)
|
$
|
650,000
|
|
$
|
650,000
|
|
$
|
—
|
|
—
|
|
Jeff D. Barlow, Chief Legal Officer and Secretary
|
$
|
600,000
|
|
$
|
550,000
|
|
$
|
50,000
|
|
9.09
|
%
|
Pamela S. Sedmak, Executive Vice President of Health Plan Operations
|
$
|
600,000
|
|
N/A
|
|
N/A
|
|
N/A
|
|
||
Mark L. Keim, Executive Vice President of Strategic Planning and Corporate Development
|
$
|
500,000
|
|
N/A
|
|
N/A
|
|
N/A
|
|
(1)
|
From May 2, 2017 to November 6, 2017, Mr. White also received an additional monthly special salary of $100,000 for his role as interim president and chief executive officer. Such special salary is not included in his base salary for this position of chief financial officer reflected in the table.
|
•
|
70% of the bonus opportunity shall be based on the Company’s pre-tax income achievement in 2018. The target bonus level shall be based on the achievement of pre-tax income in 2018 that corresponds with the high end of the range of the Company’s 2018 preliminary guidance. Achievement at the target pre-tax income level shall trigger payout in cash of this bonus element at 100%. Achievement at a substantial fraction of the target level shall constitute the threshold level of achievement, triggering payout of this bonus element at 50%. Achievement substantially in excess of the target level shall trigger payout of this bonus element at the maximum amount of 200%. Under all circumstances payout shall be capped at the 200% level. All pre-tax income amounts shall be calculated net of the short-term cash bonus payouts. The actual cash bonus payout amounts for achievement within the specified points along the pre-tax income range shall be interpolated linearly between the specified points.
|
•
|
30% of the bonus opportunity shall be subject to the discretion of the compensation committee, and shall be based upon consideration by the committee of a wide variety of factors closely aligned with the chief executive officer’s goals and objectives, including for purposes of illustration (but not limited to), such factors as: (1) performance and operational improvements; (2) talent identification and succession planning; (3) financial planning and capital management; (4) development of a long term strategic plan; and miscellaneous other factors as may be identified by the compensation committee in the exercise of its discretion. As with the pre-tax income metric, payment of the discretionary bonus shall be capped at the 200% level.
|
•
|
The 70% pre-tax income bonus metric and the 30% discretionary bonus shall be determined and paid independently. Entry level achievement of the pre-tax income metric shall not serve as a condition for any partial or full payment of the discretionary bonus.
|
Named Executive Officer
|
Base Salary
|
|
Target Bonus
Opportunity
(% of Base Salary)
|
|
Target
Net Income Bonus Opportunity
(70% of Target Bonus Opportunity)
|
|
Discretionary Bonus Opportunity
(30% of Target Bonus Opportunity)
|
|||||||
Joseph M. Zubretsky
|
|
|
|
|
|
|
|
|||||||
President and Chief Executive Officer
|
$
|
1,300,000
|
|
|
150
|
%
|
|
$
|
1,365,000
|
|
|
$
|
585,000
|
|
Joseph W. White
|
|
|
|
|
|
|
|
|||||||
Chief Financial Officer
|
$
|
650,000
|
|
|
100
|
%
|
|
$
|
455,000
|
|
|
$
|
195,000
|
|
Jeff D. Barlow
|
|
|
|
|
|
|
|
|||||||
Chief Legal Officer and Secretary
|
$
|
600,000
|
|
|
100
|
%
|
|
$
|
420,000
|
|
|
$
|
180,000
|
|
Pamela S. Sedmak
|
|
|
|
|
|
|
|
|||||||
Executive Vice President of Health Plan Operations
|
$
|
600,000
|
|
|
70
|
%
|
|
$
|
294,000
|
|
|
$
|
126,000
|
|
Mark L. Keim
|
|
|
|
|
|
|
|
|||||||
Executive Vice President of Strategic Planning and Corporate Development
|
$
|
500,000
|
|
|
70
|
%
|
|
$
|
245,000
|
|
|
$
|
105,000
|
|
|
2018 Equity-Based Compensation
|
||||
Named Executive Officer
|
Amount ($)
|
Total PSUs & Shares (#)
|
|
||
Joseph M. Zubretsky, President and Chief Executive Officer
|
$
|
10,000,000
|
|
139,120
|
|
Joseph W. White, Chief Financial Officer
(1)
|
$
|
1,900,000
|
|
26,433
|
|
Jeff D. Barlow, Chief Legal Officer and Secretary
(2)
|
$
|
2,500,000
|
|
34,780
|
|
Pamela S. Sedmak, Executive Vice President of Health Plan Operations
|
$
|
750,000
|
|
10,434
|
|
Mark L. Keim, Executive Vice President of Strategic Planning and Corporate Development
|
$
|
750,000
|
|
10,434
|
|
|
Performance Stock Units
|
Restricted Stock Awards
|
||||||||
Named Executive Officer
|
PSUs (#)
|
|
PSUs ($)
|
|
Restricted Stock Awards Total (#)
|
|
Restricted Stock Awards Total ($)
|
|
||
Joseph M. Zubretsky
|
83,472
|
|
$
|
5,999,967
|
|
55,648
|
|
$
|
3,999,978
|
|
Joseph W. White
|
26,433
|
|
$
|
1,900,004
|
|
—
|
|
$
|
—
|
|
Jeff D. Barlow
(1)
|
12,521
|
|
$
|
900,009
|
|
22,259
|
|
$
|
1,599,977
|
|
Pamela S. Sedmak
|
6,260
|
|
$
|
449,969
|
|
4,174
|
|
$
|
300,027
|
|
Mark L. Keim
|
6,260
|
|
$
|
449,969
|
|
4,174
|
|
$
|
300,027
|
|
•
|
EY’s national capabilities;
|
•
|
EY’s technical expertise and knowledge of the Company’s operations and industry;
|
•
|
the quality and candor of EY’s communications with the audit committee and management;
|
•
|
EY’s independence;
|
•
|
the quality and efficiency of the services provided by EY, including input from management on EY’s performance and how effectively EY demonstrated its independent judgment, objectivity and professional skepticism;
|
•
|
external data on audit quality and performance, including recent PCAOB reports on EY and its peer firms; and
|
•
|
the appropriateness of EY’s fees, EY’s tenure as independent auditors, including the benefits of a longer tenure, and the controls and processes in place that help ensure EY’s continued independence.
|
•
|
Enhanced audit quality
- EY’s significant institutional knowledge and deep expertise of the Company’s business, accounting policies and practices and internal control over financial reporting enhance audit quality.
|
•
|
Competitive fees
- because of EY’s familiarity with the Company, audit and other fees are competitive with peer companies.
|
•
|
Avoidance of costs associated with new auditor
- engaging new independent auditors would be costly and require a significant time commitment which could lead to management distractions.
|
•
|
Audit Committee oversight
- oversight includes regular private sessions with EY, discussion with EY about the scope of audit and business imperatives, a comprehensive annual evaluation when determining whether to reengage EY, and direct involvement by the audit committee and its chair in the selection of the lead assurance engagement partner and coordinating partner in connection with the mandated rotation of these positions.
|
•
|
Limits on non-audit services
- the audit committee pre-approves audit and permissible non-audit services provided by EY in accordance with its pre-approval policy.
|
•
|
EY’s internal independence process
- EY conducts periodic internal reviews of its audit and other work, assesses the adequacy of partners and other personnel working on the Company’s account and rotates the lead assurance engagement partner and other partners on the engagement consistent with independence requirements. A new lead engagement partner was designated in starting with the 2014 audit.
|
•
|
Strong regulatory framework
- EY, as an independent registered public accounting firm, is subject to PCAOB inspections, “Big 4” peer reviews, and PCAOB and SEC oversight.
|
•
|
Are there any significant accounting judgments or estimates made by management in preparing the financial statements that would have been made differently had the independent auditors prepared and been responsible for the financial statements?
|
•
|
Based on the independent auditors’ experience, and their knowledge of the Company, do the Company’s financial statements fairly present to investors, with clarity and completeness, the Company’s financial position and performance for the reporting period in accordance with generally accepted accounting principles and SEC disclosure requirements?
|
•
|
Based on the independent auditors’ experience, and their knowledge of the Company, has the Company implemented internal controls and internal audit procedures that are appropriate for the Company?
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Audit Fees
(1)
|
|
|
|
||||
Integrated audit of the financial statements and internal control over financial reporting (including audits of subsidiaries)
|
$
|
4,539
|
|
|
$
|
4,358
|
|
Quarterly reviews
|
247
|
|
|
256
|
|
||
Audit work relating to debt and equity offerings, including registration statements
|
92
|
|
|
385
|
|
||
Accounting consultation
|
—
|
|
|
90
|
|
||
Total audit fees
|
4,878
|
|
|
5,089
|
|
||
Audit-Related Fees
(2)
|
|
|
|
||||
State agreed-upon procedures report and audit work paper review
|
81
|
|
|
103
|
|
||
Service Organization Control (“SOC”) 1 audits
|
804
|
|
|
636
|
|
||
Total audit-related fees
|
885
|
|
|
739
|
|
||
Tax Fees
(2)
|
|
|
|
||||
Federal and state hiring incentives
|
67
|
|
|
56
|
|
||
Routine on-call advisory services
|
56
|
|
|
39
|
|
||
Tax advisory services
|
—
|
|
|
19
|
|
||
Total tax fees
|
123
|
|
|
114
|
|
||
Total Fees
|
$
|
5,886
|
|
|
$
|
5,942
|
|
(1)
|
Includes fees related to the fiscal year audit and interim reviews, notwithstanding when the fees were billed or when the services were rendered.
|
(2)
|
Includes fees for services rendered from January through December of the fiscal year, notwithstanding when the fees were billed.
|
ü
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE PROPOSAL TO APPROVE THE ADVISORY RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT.
|
•
|
shares sold in any transaction that has not settled or closed;
|
•
|
shares borrowed for any purpose or purchased pursuant to an agreement to resell; or
|
•
|
shares subject to any option, warrant, forward contract, swap, contract of sale or other derivative or similar agreement, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (i) reducing in any manner, to any extent or at any time in the future, the full right to vote or direct the voting of any such shares, and/or (ii) hedging, offsetting, or altering to any degree any gain or loss arising from the full economic ownership of such shares.
|
•
|
verification of the stockholder’s ownership of the requisite 3% of shares;
|
•
|
an agreement to continue to hold the requisite 3% of shares, and to continue to satisfy the Bylaw eligibility requirements for proxy access, through the annual meeting date;
|
•
|
a copy of the stockholder's notice on Schedule 14N that has been or concurrently is filed with the SEC;
|
•
|
details regarding certain relationships during the past 3 years between the stockholder or stockholder group, the nominee and/or the Company or any of its affiliates;
|
•
|
the information, questionnaire, representation and agreement of the stockholder and/or stockholder nominee required pursuant to the advance notice requirements for stockholder nominees set forth in Sections 2.2(b)(2) and 2.2(f) of the Company's Fifth Amended and Restated Bylaws, including such matters as:
|
◦
|
information regarding the stockholder nominee that is required to be included in the proxy statement under the SEC’s proxy rules;
|
◦
|
compensation and other arrangements between the stockholder and the stockholder nominee;
|
◦
|
positions held by the stockholder nominee with any competitors of the Company during the preceding 3 years;
|
◦
|
information relating to the stockholder and its share ownership interests;
|
◦
|
the absence of any (i) voting commitments of the stockholder nominee that have not been disclosed to the Company or that would interfere with the stockholder nominee’s fiduciary duties as a director; or (ii) undisclosed compensation arrangements of the stockholder nominee for service as a director;
|
◦
|
the stockholder nominee’s agreement to be in compliance with the Company’s corporate governance and other corporate policies;
|
•
|
such other questionnaires of the stockholder nominee that are required of the Company’s directors, and such other information as the Company may reasonably request for the Company to comply with its disclosure obligation under applicable law, determine the stockholder’s satisfaction of the proxy access
|
•
|
in the case of a nomination by a group of stockholders, the designation of one authorized group member.
|
•
|
the absence of any intent to change or influence control of the Company;
|
•
|
not nominating any person for election to the Board other than the stockholder’s nominees submitted through the proxy access process;
|
•
|
not soliciting proxies in support of any person other than the stockholder’s proxy access nominees or nominees of the Company;
|
•
|
not distributing any proxy card for the annual meeting in connection with the election of a stockholder nominee other than the form distributed by the Company;
|
•
|
the nominating stockholder’s agreement to:
|
◦
|
assume all liability stemming from any legal or regulatory violation arising from the stockholder’s statements in connection with the nomination or election of directors;
|
◦
|
indemnify and hold harmless the Company and its officers, directors and employees for losses incurred in connection with proceedings against the stockholder arising out of the stockholder’s actions, including information provided and statements made by the stockholder, in connection with any nomination submitted by the stockholder using the proxy access process;
|
◦
|
in the event of material misstatements or omissions in information provided by the stockholder, or the stockholder discovers that the stockholder fails to satisfy the eligibility requirements for use of proxy access, notify the Company and any other recipient of such misstatement or omission and the information required to correct it, or notify the Company of such failure to satisfy the eligibility requirements;
|
◦
|
comply with all laws and regulations in connection with any proxy solicitation for the annual meeting;
|
◦
|
file all solicitations and communications relating to the annual meeting with the SEC; and
|
◦
|
provide the Company with such additional information as reasonably requested by the Company to comply with its disclosure obligations under applicable law, determine the stockholder’s satisfaction of the proxy access requirements, and ascertain the stockholder nominee’s eligibility for nomination under the Bylaws.
|
•
|
the Company receives a notice that a stockholder intends to nominate any candidate for election to the Board at the annual meeting outside of the proxy access process;
|
•
|
the nominating stockholder materially breaches any of its agreements in connection with the proxy access process;
|
•
|
the Board, acting in good faith, determines that the nominating stockholder has provided representations and warranties or other information to the Company in connection with the nomination that contain or contained a material misstatement or omission;
|
•
|
the stockholder nominee withdraws his or her consent or becomes unwilling or unable to serve on the Board, or any material breach occurs of the stockholder nominee’s obligations, agreements, representations or warranties pursuant to the proxy access process;
|
•
|
the nominating stockholder withdraws the nomination;
|
•
|
the Board, acting in good faith, after consultation with outside counsel, determines that the stockholder nominee’s nomination or election to the Board would result in the Company violating the Bylaws, the Company’s certificate of incorporation or any applicable law or stock exchange rule;
|
•
|
the stockholder nominee (i) is not independent under NYSE rules, (ii) does not qualify as independent under the NYSE audit committee independence requirements, or as a “non-employee director” under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, (iii) is or has been, within the past 3 years, an officer or director of a competitor, (iv) is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in a criminal proceeding within the past 10 years, or (v) is or has been subject to any order, judgment, decree, event or circumstance specified in Rule 506(d)(1) under the Securities Act of 1933, as amended, such that the exemption under Rule 506 would be unavailable to the Company were the stockholder nominee a member of the Board;
|
•
|
the Board, acting in good faith, determines that the nominating stockholder has failed to continue to satisfy the proxy access eligibility requirements; or
|
•
|
the nominating stockholder or designated lead group member, or any qualified representative thereof, does not appear at the annual meeting to present the nomination.
|
ü
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE PROPOSAL TO APPROVE THE AMENDMENT AND RESTATEMENT OF OUR BYLAWS TO IMPLEMENT PROXY ACCESS.
|
ü
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP.
|
Name
|
Number of Shares
Beneficially Owned
(1)
|
Percentage of
Outstanding Shares
|
||
Directors and Executive Officers:
|
|
|
||
Joseph M. Zubretsky
(2)
|
55,648
|
|
*
|
|
Joseph W. White
|
84,531
|
|
*
|
|
Jeff D. Barlow
|
59,976
|
|
*
|
|
Garrey E. Carruthers
(3)
|
7,733
|
|
*
|
|
Daniel Cooperman
(4)
|
21,579
|
|
*
|
|
Charles Z. Fedak
|
20,648
|
|
*
|
|
Steven J. Orlando
(5)
|
26,353
|
|
*
|
|
Ronna E. Romney
(6)
|
22,623
|
|
*
|
|
Richard M. Schapiro
|
10,704
|
|
*
|
|
Dale B. Wolf
(7)
|
30,603
|
|
*
|
|
All executive officers and directors as a group (11 persons)**
|
391,988
|
|
0.65
|
%
|
*
|
Denotes less than 1%.
|
**
|
Includes all Section 16 reporting persons.
|
(1)
|
As required by SEC regulation, the number of shares shown as beneficially owned includes shares which could be purchased within 60 days of
March 5, 2018
. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws, and the address of each of the named stockholders is c/o Molina Healthcare, Inc., 200 Oceangate, Suite 100, Long Beach, California 90802.
|
(2)
|
Mr. Zubretsky holds 375,000 options, however no options to purchase are exercisable within 60 days of March 5, 2018.
|
(3)
|
All shares held by Carruthers Family Revocable Trust.
|
(4)
|
Consists of: 6,579 shares and 15,000 options.
|
(5)
|
Consists of: 24,853 shares held by Orlando Family Trust and 1,500 shares held by Mr. Orlando’s 401(k) plan.
|
(6)
|
All shares held by Ronna Romney Revocable Trust.
|
(7)
|
Consists of: 15,603 shares and 15,000 options.
|
Name
|
Number of Shares
Beneficially Owned
|
Percentage of
Outstanding Shares
|
||
Other Principal Stockholders:
|
|
|
||
Capital World Investors
(1)
|
5,569,005
|
|
9.29
|
%
|
T. Rowe Price Associates, Inc.
(2)
|
5,392,307
|
|
8.99
|
%
|
BlackRock, Inc.
(3)
|
4,735,433
|
|
7.90
|
%
|
The Vanguard Group
(4)
|
4,053,946
|
6.76
|
%
|
(1)
|
Based on the Schedule 13G/A filed by such stockholder on February 14, 2018. Such stockholder’s address is 333 South Hope Street, Los Angeles, California 90071.
|
(2)
|
Based on the Schedule 13G filed by such stockholder on February 14, 2018. Such stockholder’s address is 100 East Pratt Street, Baltimore, Maryland 21202.
|
(3)
|
Based on the Schedule 13G/A filed by such stockholder on February 8, 2018. Such stockholder’s address is 55 East 52nd Street, New York, New York 10055.
|
(4)
|
Based on the Schedule 13G/A filed by such stockholder on February 9, 2018. Such stockholder’s address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)
|
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
|
Plan Category
|
|
|
|
Equity compensation plans approved by security holders
|
405,000
(1)
|
$64.79
|
2,700,371
(2)
|
(1)
|
Options to purchase shares of our common stock issued under the 2011 Equity Incentive Plan.
|
(2)
|
Includes shares remaining available to issue under the 2011 Equity Incentive Plan, and the 2011 Employee Stock Purchase Plan.
|
By Order of the Board of Directors
|
|
Dale B. Wolf
|
Chairman of the Board
|
1.
|
The election of three Class I directors to hold office until the 2021 annual meeting;
|
2.
|
The compensation of our named executive officers (as an advisory vote);
|
3.
|
The amendment and restatement of our Bylaws to implement proxy access;
|
4.
|
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for
2018
; and
|
5.
|
Any other matters properly brought before the meeting or any adjournment or postponement thereof.
|
•
|
fill out the enclosed
proxy card
, date and sign it, and return it in the enclosed postage-paid envelope;
|
•
|
vote by
telephone
(instructions are on the proxy card); or
|
•
|
vote by
Internet
(instructions are on the proxy card).
|
1.
|
For
the three director nominees listed on the card;
|
2.
|
For
the approval, on a non-binding, advisory basis, the compensation of our named executive officers;
|
3.
|
For
the approval, to amend and restate our Bylaws to implement proxy access; and
|
4.
|
For
the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for
2018
.
|
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