8-K/ALeadership Changes

CENTENE CORP 8-K/A Report, Executive Changes (Mar 31, 2022)

Filed March 31, 2022For Securities:CNC

Summary

This 8-K/A filing from Centene Corp. (CNC) details the new compensation package for its recently appointed Chief Executive Officer, Sarah M. London. Effective March 29, 2022, Ms. London will receive an annual base salary of $1,400,000. Additionally, she is eligible for an annual cash incentive bonus targeting 150% of her base salary, prorated for the 2022 performance year to account for her transition into the CEO role. Furthermore, Ms. London's long-term incentive compensation is substantial, with a target opportunity of $12,500,000 commencing with the next grant cycle. This includes both cash-based awards and significant equity awards. To align her existing participation with the new long-term equity targets, the Board granted her performance-based restricted stock units valued at $7,625,000 for the 2022-2024 performance period. This executive compensation update is a key consideration for investors assessing leadership and incentive structures within Centene.

Key Highlights

  • 1Sarah M. London appointed CEO with a new compensation package effective March 29, 2022.
  • 2Annual base salary for Ms. London set at $1,400,000.
  • 3Annual cash incentive bonus target is 150% of base salary, prorated for 2022.
  • 4Long-term incentive target opportunity for Ms. London is $12,500,000 starting with the next grant cycle.
  • 5Long-term incentives include $1,875,000 in cash and $10,625,000 in equity awards.
  • 6A performance-based restricted stock unit award of $7,625,000 was granted to Ms. London for the 2022-2024 performance period to align with new equity targets.

Frequently Asked Questions

This filing is significant because it details the compensation structure for the newly appointed CEO, Sarah M. London. Investors can assess the alignment of executive pay with company performance and leadership changes through these disclosed compensation elements, including base salary, short-term incentives, and long-term equity awards.

While this filing provides the specific details of Ms. London's compensation, a comprehensive comparison to industry benchmarks would require further analysis of compensation data for CEOs at similarly sized companies within the managed care or healthcare sector. The total compensation package appears robust, reflecting her leadership role.

The performance-based restricted stock units (PSUs) were granted to ensure Ms. London's participation level for the 2022-2024 performance period aligns with her new, higher long-term equity incentive award target. These PSUs vest based on specific performance metrics previously approved by the Board, linking a significant portion of her compensation to achieving company goals.

No, the filing specifies that the annual bonus opportunity for the 2022 performance year will be prorated. This means Ms. London will receive a portion of the bonus based on the period she serves as CEO with the new salary, and another portion based on her earnings prior to assuming the CEO role and the corresponding compensation structure at that time.