Business Context and Reporting Period
This Form 8-K filing by Community Health Systems, Inc. (CYH) reports on events occurring on February 14, 2024, with the report filed on February 16, 2024. The filing details the Board of Directors' approval of 2024 compensation arrangements for Named Executive Officers (NEOs), including base salaries, cash incentives, equity awards, and retention bonuses.
Key Financial Metrics and Compensation Details
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation structures approved for fiscal year 2024.
2024 Base Salaries
- Tim L. Hingtgen (CEO): $1,326,125
- Kevin J. Hammons (President & CFO): $795,675
- Lynn T. Simon, M.D. (CMO): $679,691
- Kevin A. Stockton (EVP Ops & Dev): $710,000
- Mark B. Medley (Regional President): $672,000
- Chad A. Campbell (Regional President): $672,000
2024 Cash Incentive Compensation
Target opportunities are expressed as a percentage of base salary, with potential additional awards for non-financial improvements and overachievement:
- CEO Target: 225% (Plus up to 40% non-financial; 35% overachievement)
- CFO Target: 125% (Plus up to 35% non-financial; 25% overachievement)
- Other NEOs Target: 105% to 115% (Plus up to 20-35% non-financial; 25% overachievement)
Long-Term Equity Awards (Grant Date: March 1, 2024)
| Executive | Stock Options | Time-Vesting RSU | Performance RSU |
|---|---|---|---|
| Tim L. Hingtgen | 200,000 | 200,000 | 400,000 |
| Kevin J. Hammons | 90,000 | 90,000 | 180,000 |
| Lynn T. Simon | 40,000 | 40,000 | 80,000 |
| Mark B. Medley | 25,000 | 25,000 | 50,000 |
| Kevin A. Stockton | 40,000 | 40,000 | 80,000 |
| Chad A. Campbell | 25,000 | 25,000 | 50,000 |
Performance-based restricted stock vests based on objectives from Jan 1, 2024, to Dec 31, 2026, ranging from 0% to 200% of the target. Options and time-vesting stock vest ratably over three years.
Retention Cash Awards
- Kevin A. Stockton: $1,000,000
- Mark B. Medley: $500,000
- Chad A. Campbell: $500,000
Payments are split: 40% in Q3 2025 and 60% in Q1 2027, contingent on continued employment.
Material Changes and Outlook
The filing does not disclose material changes to financial performance compared to prior periods, nor does it provide financial guidance or outlook. The primary change reported is the formalization of 2024 executive compensation packages, including the addition of Kevin A. Stockton and Chad A. Campbell to the NEO group for 2024.
Risks and Contingencies
The filing notes that retention cash awards are contingent upon the executives remaining employed through the specific payment dates (Q3 2025 and Q1 2027). Additionally, the performance-based equity awards are subject to the attainment of specific performance objectives, with vesting ranging from 0% to 200% of the target grant.
Key Facts for Investor Verification
- Verify the total potential cash compensation for the CEO, which could exceed 300% of base salary if all performance targets and overachievement thresholds are met.
- Confirm the specific performance metrics tied to the 2024-2026 performance-based restricted stock awards, as these determine the final equity value (0-200% vesting).
- Note that the retention awards for Stockton, Medley, and Campbell total $2 million and are not yet entered into, requiring future execution.
- Check subsequent filings for the actual grant date valuation of the equity awards scheduled for March 1, 2024.