DEF 14A: ModivCare Inc. Announces Details for 2024 Annual Stockholders Meeting

ModivCare Inc. has released its proxy statement outlining proposals for the 2024 Annual Meeting of Stockholders, including the election of directors and executive compensation.

Summary

• ModivCare Inc. will hold its 2024 Annual Meeting of Stockholders on June 11, 2024, in Denver, CO.
• Stockholders will vote on the election of six directors, an advisory vote on executive compensation, and the ratification of KPMG LLP as the independent registered public accounting firm for 2024.
• The Board recommends voting 'FOR' all nominees and proposals.
• The company highlights its corporate governance practices, including the separation of the Chair of the Board and CEO roles, independent board committees, and active risk oversight.
• ModivCare emphasizes its commitment to diversity, equity, and inclusion, with a focus on increasing representation within the company.
• The company also highlights its Environmental, Social, and Governance (ESG) initiatives, focusing on responsible business practices, member support, team engagement, and environmental management.
• The company's revenue has grown substantially in the last three years, with a CAGR of 38% in Adjusted EBITDA over the last five years.
• Executive compensation is designed to be competitive, performance-based, and aligned with stockholder interests.
• The company has a clawback policy, anti-hedging and anti-pledging policies, and stock ownership guidelines for directors and executive officers.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting growth in revenue and Adjusted EBITDA, along with a commitment to corporate governance and social responsibility. However, it also acknowledges challenges and risks, preventing a higher sentiment score.

Positives

• The company has a strong focus on corporate governance, with independent directors and active risk oversight.
• ModivCare is committed to diversity, equity, and inclusion, with a majority of team members identifying as an underrepresented minority.
• The company is focused on ESG initiatives and sustainability practices.
• ModivCare has experienced substantial revenue growth and sustained growth in Adjusted EBITDA.
• The company's executive compensation program is designed to align with stockholder interests and reward performance.
• The company has a clawback policy, anti-hedging and anti-pledging policies, and stock ownership guidelines.

Negatives

• The net loss in 2023 is related to a goodwill impairment charge that was recorded during the second quarter of 2023.

Risks

• The company faces challenges from the macroeconomic environment, including high inflation rates, high interest rates, supply chain challenges, labor shortages, and volatility in capital markets.
• Medicaid redetermination headwinds may impact membership in the Mobility segment.

Future Outlook

The company expects to continue investing in data analytics capabilities in 2024.

Management Comments

• L. Heath Sampson, President and CEO, extends appreciation for continued support.
• The company continued the evolution of its business and technology that had positive impacts on our clients, transportation providers and members.
• We also enhanced our executive leadership, resulting in an experienced team with a track record of operational excellence.

Industry Context

ModivCare operates in the technology-enabled healthcare services industry, providing integrated supportive care solutions and addressing the social determinants of health.

Comparison to Industry Standards

• The peer group chosen for purposes of the 2023 compensation decisions is composed of 16 health services related companies that were comparable to ModivCare in terms of business mix and size (e.g., revenue, EBITDA, and market capitalization).
• The peer group includes Acadia Healthcare Company, Inc., Brookdale Senior Living Inc., Hanger, Inc., Option Care Health, Inc., Addus HomeCare Corporation, Chemed Corporation, Healthcare Services Group, Inc., Select Medical Holdings Corporation, Amedisys, Inc., CorVel Corporation, LHC Group, Inc., The Ensign Group, Inc., Apollo Medical Holdings, Inc., Encompass Health Corporation, National HealthCare Corporation and Veradigm Inc. (formerly Allscripts).

Management Changes

Related Party Transactions

• Since January 1, 2023, there have been no related party transactions that met the requirements for disclosure in this Proxy Statement.

Stakeholder Impact

• The company's actions and performance impact stockholders, employees, customers, and the communities it serves.
• The company is committed to providing vulnerable populations supportive services in a safe and ethical way, enabling greater access to care, reducing costs, and improving outcomes.

Next Steps

• Stockholders are urged to vote their shares in advance of the Annual Meeting.
• The company will consider stockholder concerns regarding executive compensation and evaluate whether any actions are necessary to address those concerns.

Key Dates

Keywords

ModivCare, stockholders, executive compensation, directors, governance, ESG, Adjusted EBITDA, Annual Meeting, proxy statement, KPMG