DEF: Health Catalyst Faces Stockholder Vote on Board Declassification, Executive Pay

Health Catalyst is holding its 2025 Annual Meeting of Stockholders on July 9, 2025, to vote on director elections, auditor ratification, executive compensation, and a proposal to declassify the board.

Summary

• Health Catalyst is holding its 2025 Annual Meeting of Stockholders on July 9, 2025.
• Stockholders will vote on the election of two Class III directors, Duncan Gallagher and Dr. Jill Hoggard Green, until the 2028 Annual Meeting.
• They will also vote to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• An advisory, non-binding vote will be held to approve the compensation of the named executive officers.
• Stockholders will also vote on an advisory, non-binding basis, to approve the board of directors initiating action to declassify the board of directors of the Company.
• The board recommends voting FOR all proposals.
• The record date for determining stockholders eligible to vote is May 15, 2025.
• The company is providing access to annual meeting materials online instead of mailing printed copies.
• The board is divided into three classes with staggered terms.
• The company achieved net new Platform Client (legacy) additions of 21 and a dollar-based retention rate of 102% in fiscal 2024.
• Total revenue was $306.6 million, an increase of 4% year-over-year.
• GAAP net loss was $69.5 million, compared to $118.1 million for fiscal 2023.
• Adjusted EBITDA was $26.1 million, compared to $11.0 million for fiscal 2023.

Sentiment

Score: 7

Explanation: The document presents a mix of positive and neutral information. While there are improvements in net loss and Adjusted EBITDA, the company is still operating at a loss. The board's recommendations on voting matters are generally positive, but the advisory nature of some votes introduces uncertainty.

Positives

• The company is providing access to annual meeting materials online to save costs and reduce environmental impact.
• The company achieved net new Platform Client (legacy) additions of 21 and a dollar-based retention rate of 102% in fiscal 2024.
• Total revenue was $306.6 million, an increase of 4% year-over-year.
• GAAP net loss was $69.5 million, compared to $118.1 million for fiscal 2023.
• Adjusted EBITDA was $26.1 million, compared to $11.0 million for fiscal 2023.

Negatives

• GAAP net loss was $69.5 million for fiscal year 2024.

Risks

• The operating margins of the health system end market continued to be challenged relative to longer-term historical levels, primarily due to significant increases in labor and supply costs without a commensurate increase in revenue.

Future Outlook

The document includes forward-looking statements regarding future compensation plans and arrangements, which may differ materially from currently anticipated plans and arrangements.

Management Comments

• Daniel Burton, Chief Executive Officer and Director, expressed pleasure in inviting stockholders to the 2025 Annual Meeting.
• The board believes that holding a virtual Annual Meeting will facilitate stockholder attendance and participation.

Industry Context

The document notes that the operating margins of health systems continue to be challenged due to increases in labor and supply costs.

Comparison to Industry Standards

• The compensation committee reviews the compensation levels and practices of a group of peer companies.
• In January 2024, the compensation peer group consisted of companies like Accolade, Domo, HealthStream, Nutex Health, Sharecare, American Well, Everbridge, Model N, OptimizeRx, Yext, Definitive Healthcare, Grid Dynamics, National Research, Phreesia, and Zuora.
• The peer group was generally developed from publicly-traded companies with an emphasis on software/consulting companies that may serve healthcare providers and health systems, where possible.
• The peer group had a market capitalization between $150 million and $1.3 billion and revenue between $150 million and $750 million.

Management Changes

Corporate Governance

Related Party Transactions

• Matthew Kolb, a member of the board, is the Executive Vice President and Chief Operating Officer of Carle Health, which has ongoing technology and professional service relationships with Health Catalyst, generating $16.7 million in revenue during fiscal year 2024.
• Jeffrey Selander, the brother-in-law of Daniel Burton, is a non-executive employee, currently serving as Senior Vice President, and has served with us since September 2011.
• Andrew Cardon, the brother-in-law of Daniel LeSueur, is a non-executive employee, currently serving as Strategic Account Executive, and has served with us since December 2011.

Stakeholder Impact

• The outcome of the votes on director elections, executive compensation, and board declassification will directly impact shareholders.
• Executive compensation policies are designed to align the interests of executives with those of stockholders.
• The company is committed to improving the lives of its team members, clients, stockholders, partners, and the communities in which it operates.

Next Steps

• Stockholders are encouraged to vote their shares at the Annual Meeting.
• The board will consider the outcome of the advisory votes when making future decisions.

Key Dates

Keywords

proxy statement, annual meeting, directors, executive compensation, Ernst & Young, board declassification, stockholders, Health Catalyst