Karthik Rao
About Karthik Rao
Karthik Rao, M.D., is Chief Medical Officer (CMO) at agilon health (AGL), appointed to the permanent role on July 10, 2024 after serving as interim CMO from March 1, 2024 . He joined agilon in 2022, previously serving as Senior Medical Director and Vice President, Network Performance; prior roles include nearly a decade as a practicing internal medicine physician and healthcare strategy work at McKinsey & Company . Education: B.A. and M.D. from Johns Hopkins University; Internal Medicine/Primary Care residency at Massachusetts General Hospital . Company performance context during 2024 included amended annual incentive metrics where Adjusted EBITDA finished below threshold at $(154) million, existing market membership reached 527,000, and medical margin was $205 million, impacting incentive funding and signaling profitability headwinds .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| agilon health | Chief Medical Officer | 2024–present | Co-leads clinical strategy; oversees clinical programs and network engagement; part of Office of the Chairman (Aug-2025) . |
| agilon health | Interim Chief Medical Officer | Mar–Jul 2024 | Maintained clinical leadership continuity during CMO transition; co-led with CCO . |
| agilon health | Senior Medical Director; VP, Network Performance | 2022–2024 | Led physician network performance across markets . |
| Practicing Internal Medicine Physician | Physician | ~10 years | Direct value-based care experience informs clinical programs and PCP engagement . |
| McKinsey & Company | Healthcare strategy consultant | Not disclosed | Led strategy/operations across provider groups and government organizations . |
External Roles
No public company directorships or external board roles disclosed for Dr. Rao. Skip.
Fixed Compensation
Company-wide executive compensation design (applies to executive officers; individual CMO specifics not disclosed):
| Component | Design | Key Details |
|---|---|---|
| Base Salary | Market-aligned by role | Determined by role scope and experience . |
| Target Annual Bonus | Performance-based cash | Target equal to 75% of base salary for executives; payout 0–150% of target based on metrics and medical margin modifier . |
| Long-Term Equity Mix | Multi-vehicle | 50% PSUs (3-year performance), 25% RSUs (4-year ratable), 25% stock options (4-year ratable) . |
| Ownership Guidelines | Alignment | CEO: 6x salary; other executive officers: 2x salary; 100% of net shares held until in compliance . |
| Hedging/Pledging | Prohibited | No hedging/monetization or pledging by employees, officers, directors . |
| Clawback | Restatement-based recovery | Recovery of incentive comp for 3 prior fiscal years if accounting restatement occurs . |
Performance Compensation
2024 annual incentive plan (company-wide metrics and scoring framework used for executives; individual CMO participation not disclosed):
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout Impact |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($) | 55% | $(15M) | $15M | $35M | $(154M) | Below threshold; reduced funding . |
| Existing Market Membership (Individuals) | 5% | 510,000 | 518,000 | 525,000 | 527,000 | Above max for this metric . |
| New Market Membership (Individuals) | 10% | 22,000 | 37,000 | 57,000 | 35,000 | Between threshold and target . |
| Experience: % Gaps Closed and PCP Touchpoints (Markets Passing) | 10% | 27/46 | 32/46 | 40/46 | 29/46 | Near threshold . |
| Quality: CCR/AR Blended Rate (%) | 10% | 90% | 93% | 95% | 93% | At target . |
| Team & Culture (Discretionary) | 10% | Discretionary | Discretionary | Discretionary | N/A | Committee lowered pool to address retention . |
| Medical Margin ($) Modifier | ±15% | $435M | $500M | $575M | $205M → −15% | Applied negative modifier . |
Funding outcomes and discretion:
- Calculated funding at 28.7% of target; committee used judgment to pay 50% of target for most executives to mitigate retention risk; CEO paid strictly at 28.7% .
PSU design relevant to executives:
- 2024 PSU metrics: Revenue (50%) and Adjusted EBITDA (50%) over 3 years; payout range 50–200% per metric; cliff vest at end of performance period .
- 2022 PSU grant outcome (covers 2022–2024): Revenue achieved 174% of target; 2022 Adjusted EBITDA achieved 0%; overall payout 87% of target .
Equity Ownership & Alignment
| Policy/Item | Details |
|---|---|
| Stock Ownership Guidelines | CEO: 6x base salary; other executive officers: 2x base salary; mandatory hold of net shares until compliant . |
| Hedging/Pledging | Prohibited for employees, officers, directors . |
| Clawback | Executive compensation recovery upon restatement covering 3 prior fiscal years . |
| Say-on-Pay | 93.4% approval at May 2024 meeting, reinforcing shareholder support for program structure . |
No individual beneficial ownership, vested/unvested share counts, or pledging for Dr. Rao were disclosed. Skip.
Employment Terms
- Appointment and Reporting: Dr. Rao appointed permanent CMO effective July 10, 2024; co-leads clinical strategy with Chief Clinical Officer; oversees clinical programs and network engagement; reports to CEO .
- Transitional Role: Served as interim CMO starting March 1, 2024 during leadership transition .
- Office of the Chairman: Included as a member supporting execution priorities in August 2025 (interim leadership construct) .
No CMO-specific employment agreement, severance, or change-of-control terms were disclosed. Skip.
Performance & Track Record
- Clinical Execution: Rao and CCO strengthened roles of regional and market medical directors and enhanced information systems for PCPs to identify and manage complex senior patients, focusing on touchpoints and gaps in care, which align to the Experience and Quality metrics in the incentive framework .
- Strategic Leadership Continuity: Maintained momentum in clinical programs through CMO transition; later integrated into Office of the Chairman to accelerate performance reviews and operational actions .
Compensation Committee Analysis
- Committee Composition: Compensation and Human Capital Committee chaired by Diana McKenzie; members include Silvana Battaglia and Karen McLoughlin; independent consultant Semler Brossy retained, assessed as independent .
- Peer Group: 2024 peer set includes alignment with healthcare and tech-enabled services; examples include Teladoc, DaVita, Veeva, Quest Diagnostics, R1 RCM, Evolent, Privia, Progyny, and others .
- Risk Assessment: Committee concluded compensation policies do not encourage excessive risk taking .
Investment Implications
- Alignment: Executive incentives emphasize profitability (Adjusted EBITDA, medical margin modifier) alongside growth, quality, and experience; multi-year PSUs directly tie to revenue and EBITDA, supporting pay-for-performance alignment .
- Retention Watch: 2024 discretionary uplift to 50% funding for most executives after a zero payout in 2023 signals retention risk management; lack of disclosed CMO-specific terms limits precision on his retention economics .
- Governance Safeguards: Ownership guidelines, anti-hedging/pledging policy, and clawback reduce misalignment and potential insider selling pressures; say-on-pay support at 93.4% indicates shareholder acceptance of structure .
- Execution Focus: Rao’s operational emphasis on closing care gaps and PCP touchpoints aligns to program metrics, which could influence future incentive outcomes and clinical performance quality in AGL’s markets .
Data gaps: Individual compensation, award quantities, and ownership specifics for Dr. Rao were not disclosed in available filings and releases; conclusions reflect company-wide policy and disclosed performance frameworks .