UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 18, 2022 (
(Exact name of registrant as specified in its charter)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
| (i) | Reorganization of the Standing Committees of the Board of Directors and appointment of Lead Director |
On February 16, 2022, the Board of Directors (the “Board”) of Community Health Systems, Inc. (the “Company”) appointed John A. Clerico as its independent Lead Director. Mr. Clerico succeeds Julia B. North, who passed away on December 9, 2021, in this role. In addition, on February 16, 2022, the Board reorganized the composition of the standing committees of the Board as follows (including appointing Joseph A. Hastings, D.M.D. to a committee following his election as a Board member on September 15, 2021):
Audit and Compliance Committee
Michael Dinkins (chair)
James S. Ely III
Elizabeth T. Hirsch
H. James Williams, Ph.D.
Compensation Committee
James S. Ely III (chair)
John A. Clerico
John A. Fry
Elizabeth T. Hirsch
Governance and Nominating Committee
John A. Fry (chair)
Joseph A. Hastings, D.M.D.
William Norris Jennings, M.D.
K. Ranga Krishnan, MBBS
| (ii) | Compensation Arrangements |
On February 16, 2022, the Board, upon the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), met and approved the following compensation arrangements for 2022 for the Company’s named executive officers, as reflected in the Company’s definitive proxy statement for its 2021 annual meeting of stockholders (collectively, the “Named Executive Officers”).
2022 Cash Incentive Compensation
The Board approved performance goals for the Named Executive Officers (other than Benjamin C. Fordham, Executive Vice President, General Counsel and Assistant Secretary, who, as previously disclosed, is retiring effective February 28, 2022) for fiscal year 2022 under the Company’s 2019 Employee Performance Incentive Plan (the “Cash Incentive Plan”) with target opportunities as follows (expressed as a percentage of base salary):
| Name and Position |
Target Opportunity | |||
| Wayne T. Smith, Executive Chairman of the Board of Directors |
225 | % | ||
| Tim L. Hingtgen, Chief Executive Officer |
225 | % | ||
| Kevin J. Hammons, President and Chief Financial Officer |
125 | % | ||
| Lynn T. Simon, M.D., President of Clinical Operations and Chief Medical Officer |
115 | % | ||
In addition, each Named Executive Officer (other than Mr. Fordham) will have the opportunity to achieve an additional percentage of his or her base salary for the attainment of specific non-financial performance improvements up to a maximum of an additional 40% for Mr. Smith and Mr. Hingtgen; 25% for Mr. Hammons; and 10% for Dr. Simon. Each Named Executive Officer (other than Mr. Fordham) will also have the opportunity to achieve an additional percentage of his or her base salary for overachievement of Company-level goals up to a maximum of an additional 35% for Mr. Smith and Mr. Hingtgen, and an additional 25% for Mr. Hammons and Dr. Simon.
The payments made to the Company’s 2021 named executive officers under the Cash Incentive Plan in respect of fiscal 2021 incentive compensation targets will be set forth in the definitive proxy statement to be filed by the Company in connection with the Company’s 2022 annual meeting of stockholders.
2022 Base Salaries
The Board approved the following base salary amounts for the Named Executive Officers for fiscal year 2022:
| Name and Position |
2022 Base Salary | |||
| Wayne T. Smith, Executive Chairman of the Board of Directors |
$ | 1,000,000 | ||
| Tim L. Hingtgen, Chief Executive Officer |
$ | 1,250,000 | ||
| Kevin J. Hammons, President and Chief Financial Officer |
$ | 750,000 | ||
| Lynn T. Simon, M.D., President of Clinical Operations and Chief Medical Officer |
$ | 643,775 | ||
| Benjamin C. Fordham, Executive Vice President, General Counsel and Assistant Secretary |
$ | 625,000 | ||
Long-Term Incentive Compensation – Equity Awards
Pursuant to the Company’s Amended and Restated 2009 Stock Option and Award Plan (the “Stock Plan”), the Board approved the following equity grants to the Named Executive Officers (other than Mr. Fordham), effective March 1, 2022 (the “grant date”):
| Name and Position |
Non-Qualified Stock Options |
Time Vesting Restricted Stock |
Performance-Based Restricted Stock | |||
| Wayne T. Smith, Executive Chairman of the Board of Directors |
90,000 | 90,000 | 180,000 | |||
| Tim L. Hingtgen, Chief Executive Officer |
100,000 | 100,000 | 200,000 | |||
| Kevin J. Hammons, President and Chief Financial Officer |
75,000 | 75,000 | 150,000 | |||
| Lynn T. Simon, M.D., President of Clinical Operations and Chief Medical Officer |
40,000 | 40,000 | 80,000 |
The number of performance-based restricted shares granted to each Named Executive Officer is subject to the attainment of certain performance objectives during the three-year period beginning January 1, 2022 and ending December 31, 2024, with the ultimate number of performance-based restricted shares vesting in respect of such awards after such three-year period ranging from 0% to 200% of the shares set forth above based on the level of achievement of such performance objectives.
Both the non-qualified stock options and the time-vesting restricted stock vest ratably over three years, beginning on the first anniversary of the grant date.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: February 18, 2022 | COMMUNITY HEALTH SYSTEMS, INC. (Registrant) | |||
| By: | /s/ Tim L. Hingtgen | |||
| Tim L. Hingtgen | ||||
| Chief Executive Officer and Director (principal executive officer) | ||||