Kevin J. McNamara

About Kevin J. McNamara

Kevin J. McNamara, age 71, has served as President of Chemed since August 1994 and CEO since May 2001; he has been a director since 1987. He previously served as Executive Vice President, Secretary, and General Counsel from 1986–1994, reflecting a long-tenured operator across corporate and legal roles . Recent company performance metrics used to assess management include Adjusted EPS, Total Stockholder Return (TSR), and Return on Assets; Adjusted EPS was $23.85 in 2024 and Net Income was $301.999 million . TSR values reported in pay-versus-performance disclosure were 122.41 (2024), 134.68 (2023), and 117.23 (2022) .

Past Roles

Organization	Role	Years	Strategic Impact
Chemed Corporation	Executive Vice President, Secretary, General Counsel	1986–1994	Senior legal and corporate leadership prior to becoming President/CEO
Chemed Corporation	President	1994–present	Corporate leadership and oversight of performance-based compensation approach
Chemed Corporation	Chief Executive Officer	2001–present	CEO with compensation programs tied to Adjusted EPS/ROA and multi-year PSUs

External Roles

No external public company directorships or committee roles for Mr. McNamara are disclosed in the latest proxy .

Fixed Compensation

Metric	2022	2023	2024
Base Salary ($)	1,490,333	1,604,000	1,738,117
Perquisites and Other ($)	1,508,153	1,312,650	1,326,501
Non-Qualified Deferred Compensation Earnings ($)	66,356	73,012	81,084

Notes:

All Other Compensation 2024 components include company contributions to non-qualified plans ($865,397), personal aircraft use ($190,341), tickets ($148,194), and other items; details below .

ALL OTHER COMPENSATION (Selected 2024 components)

Company contribution to non-qualified deferred comp: $865,397
Personal use of company aircraft: $190,341
Company-paid sporting event tickets: $148,194
Club memberships: $13,753
Term life insurance: $658
Miscellaneous small items: $66,833

Performance Compensation

Component	2022	2023	2024
Non-Equity Incentive Plan ($)	2,664,155	2,923,712	2,628,448
Stock Awards (PSUs) – Grant-Date Fair Value ($)	2,135,216	2,511,638	2,375,477
Option Awards – Grant-Date Fair Value ($)	3,744,820	4,200,094	4,619,937
Performance-based % of total	n/a	n/a	75.4%

2024 Annual Bonus Mechanics (NEIC):

Weighting: Adjusted EPS 75%; Return on Assets 25%
CEO Target % of Salary: 130%
Consolidated 2024 Results vs Target:
- Adjusted EPS: Actual $23.85 vs Target $23.27 → 102.5% of target; multiplier 118.7%
- Return on Assets: Actual 20.5% vs Target 20.8% → 98.6% of target; multiplier 96.4%
CEO bonus: Target $2,323,490; Actual $2,628,448 (113.1% of target)

2024 PSU Program (granted Feb 16, 2024):

Two PSU tranches for CEO: 1,885 units each, grant-date fair values $1,269,943 and $1,105,534 (closing price $583.43)
3-Year Cumulative Total Adjusted EPS targets (2024–2026): Target $72.95 (100%), Max $78.67 (200%), Min $67.55 (0%)
3-Year Relative TSR payout scale vs peer group: 50th percentile = 100%; >90th = 200%; <25th = 0%
Prior performance periods (examples): 2021–2023 EPS payout 62.3%; TSR 93.5% (47th percentile)

Option Awards (2024 grants):

40,332 options granted on Oct 22, 2024; exercise price $597.70; vest 1/3 on Oct 22, 2025/2026/2027; expire Oct 22, 2029

Option Exercises and Vested Stock in 2024:

Options exercised: 5,000; value realized $703,950
Stock awards vested: 2,704; value realized $1,585,869

Equity Ownership & Alignment

Ownership Measure	Value
Shares owned (Direct + Thrift)	103,788
Options exercisable within 60 days	99,460
Total beneficial ownership	203,248
Percent of class	1.34%
Unexercisable options at 12/31/24	77,427 (11,924 + 25,171 + 40,332)
Unvested PSUs	4,046 (2024 target), 4,374 (2025 target), 3,770 (2026 target)
Ownership guideline	5x base salary for CEO
Compliance	Held >34x base salary market value as of 12/31/24
Anti-hedging	Hedging prohibited for officers/directors

Stock Option Runoff (selected awards):

41,224 exercisable @ $471.74 expiring 10/29/2025
21,803 exercisable @ $445.35 expiring 10/28/2026
23,848 exercisable + 11,924 unexercisable @ $462.04 expiring 10/31/2027
12,585 exercisable + 25,171 unexercisable @ $509.46 expiring 10/25/2028
40,332 unexercisable @ $597.70 expiring 10/22/2029

Deferred Compensation and SERP Balances (12/31/24):

Plan	Registrant Contributions 2024 ($)	Aggregate Earnings 2024 ($)	Balance ($)
Excess Benefit Plan	865,397	513,594	43,025,373
Supplemental Pension & Life Insurance Plan	26,356	81,084	1,205,693

Employment Terms

Employment Agreement: Two-year term auto-renews; base salary floor $700,000; current base salary $1,787,300 . Severance without cause: 5x base salary + pro-rated average prior 3-year bonus; 24 months welfare benefits; two-year non-compete and non-solicit; 409A excise tax gross-up provision included in agreement .
Change in Control Plan: Double trigger; CEO receives 3x highest base salary (120-day lookback/after CoC) + average prior 3-year annual incentive; 3-year welfare/perquisite continuation; defined contribution plan contributions; outplacement up to $25,000; plus single-trigger lump-sum equal to average prior 3-year annual incentive on change in control .
Estimated payouts (as of 12/31/24):
- Termination without cause: $11,717,397 total (severance $8,936,500; pro-rated incentive $2,738,772; benefits $42,125) .
- CoC with no termination: $7,053,463 total (single-trigger incentive $2,738,772; PSU distribution $4,314,691) .
- Qualifying termination post-CoC: $27,843,414 total (severance $13,578,216; pro-rated incentive $2,738,772; benefits/perqs/outplacement $1,266,983; plan contributions $2,752,884; option acceleration $3,191,868; PSU distribution $4,314,691) .
Clawback: NYSE-compliant recovery policy adopted in 2024; additional committee clawback for misconduct-triggered restatements over a 3-year lookback .

Board Governance

Board tenure: Director since 1987 .
Leadership: CEO role separated from Chairman (Chairman: George J. Walsh III) .
Committee memberships: McNamara (employee director) not compensated for director service and not listed as a member of Audit/Compensation/Nominating committees .
Committee compositions (2024): Compensation Committee chaired by Walsh; members Heaney, Lindell, McCarthy; Audit and Nominating committees listed in table .
Meetings and attendance: 5 board meetings; all directors attended at least 80% of board and applicable committee meetings .
Independence: Majority of nominees independent; McNamara is not independent as CEO .
Director compensation: Employees (McNamara, Hutton) do not receive director cash or stock awards; non-employee directors received $80,000 annual fee plus meeting fees and ~$160,273 stock awards (284 shares) in May 2024; Chairman retainer $145,000 .
Say-on-Pay 2024: 82.70% approval (positive), 17.19% against, 0.11% abstain .

Performance & Track Record Indicators

Year	Net Income (000)	Adjusted EPS	Company TSR
2022	249,624	19.91	117.23
2023	272,509	21.21	134.68
2024	301,999	23.85	122.41

Long-Term Incentive Outcomes (selected PSU periods):

Performance Period	EPS Payout %	TSR Percentile	TSR Payout %
2021–2023	62.3%	47th	93.5%
2020–2022	202.0%	56th	115.0%

Equity Award Mechanics and Vesting Schedules

Options granted annually in October; exercise price ≥ 100% of fair market value; vest ratably over 3 years; 5-year term for grants since 2015; no repricing; double-trigger vesting upon CoC .
PSUs granted annually in February; 3-year performance on cumulative Adjusted EPS and relative TSR; dividends accrue and pay in shares only if earned; pro-rata vesting on death/disability/retirement; double-trigger upon CoC .
2024 NEIC EPS reconciliation to NEIC calculation shows Adjusted EPS $23.85 using actual shares 14.729 million for NEIC, vs $23.13 in page charts with average diluted shares 15.186 million .

Compensation Committee Analysis and Peer Group

Independent consultant: Compensation Strategies, Inc.; no conflicts; instrumental in 2013 design and periodic reviews; refreshed peer group in early 2025 .
Peer group (2025): Includes Addus Homecare, Amedisys, Encompass Health, The Ensign Group, Option Care Health, etc.; used for TSR benchmarking and compensation comparisons .
Risk oversight of compensation: Mix of fixed/variable, annual/long-term, cash/equity to discourage excessive risk; diversified metrics .

Related Party Transactions and Red Flags

Related person: CEO’s son employed as VP & Chief Strategy Officer; 2024 salary + 2024 bonus paid in 2025: $489,942; 2022 PSUs vested into 573 shares; compensation aligned with position qualifications per policy .
Tax gross-ups: 409A gross-up clause in CEO employment agreement; 280G/409A gross-ups in CoC Plan restricted to pre-Aug 2018 participants; quant tables show no 280G gross-up amounts estimated for CEO under scenarios .
Anti-hedging: Prohibited for officers/directors .
No option repricing or underwater buyouts; no dividends on unvested performance shares .

Equity Ownership & Alignment Table (Detailed)

Category	Shares/Units	Notes
Direct + Thrift plan shares	103,788	As of 12/31/2024
Options exercisable within 60 days	99,460	Aggregates across multiple grants
Unexercisable options	77,427	11,924 + 25,171 + 40,332 unvested blocks
Unvested PSUs	4,046; 4,374; 3,770	Target units vest on 2024/2025/2026 targets
Percent of class	1.34%	Includes options exercisable within 60 days
Ownership guideline compliance	>34x salary	CEO guideline is 5x salary

Employment Terms Summary Table

Scenario (as of 12/31/24)	Cash Severance	Pro-Rata Incentive	Welfare/Perqs/Other	Equity/PSUs	Total
Termination without cause	8,936,500	2,738,772	42,125	—	11,717,397
CoC, no termination (single-trigger)	—	2,738,772	—	4,314,691	7,053,463
Qualifying termination post-CoC (double-trigger)	13,578,216	2,738,772	1,266,983	Options accel 3,191,868; PSUs 4,314,691	27,843,414

Director Service and Compensation (Employee Director)

Board Service: Director since 1987; CEO since 2001; President since 1994 .
Committee roles: Not listed as member of Audit/Compensation/Nominating committees; committee chairs identified in table .
Director compensation: As an employee, he does not receive director cash fees or annual vested stock awards .

Investment Implications

Compensation alignment: Strong pay-for-performance structure with 75%+ of CEO pay performance-based in 2024, tied to Adjusted EPS and ROA annually and TSR/Adjusted EPS over three years; clawback and double-trigger mechanisms mitigate risk of windfalls .
Retention and selling pressure: Significant unexercisable option tranches vesting through 2027 and sizable PSU targets create ongoing retention incentives; 2024 option exercises and realized values indicate periodic monetization but guidelines and large ownership (>34x salary) support alignment .
Change-of-control economics: Large potential payouts under double-trigger ($27.8M) plus single-trigger incentive at CoC could influence executive behavior in strategic transactions; presence of 409A gross-up in employment agreement is a governance negative, though 280G gross-ups appear limited post-2018 .
Governance: Separation of Chairman and CEO, independent compensation oversight, and a refreshed peer group for TSR benchmarking are positives; related party employment of CEO’s son warrants monitoring but disclosed under policy .

Appendix: 2024 Bonus Targets and Multipliers (Consolidated)

Metric	Weight	Actual	Target	% of Target	Multiplier
Adjusted EPS	75%	$23.85	$23.27	102.5%	118.7%
Return on Assets	25%	20.5%	20.8%	98.6%	96.4%

Appendix: Director Compensation Program (for context)

Non-employee director cash: $80,000 annual retainer; meeting fees; Chairman $145,000; committee fees (Audit $30k chair/$15k members; Compensation $20k chair/$12k members; Nominating $15k chair/$10k members) .
Non-employee director equity: ~$160,273 fully vested stock award (284 shares) in May 2024 .
Employee directors: No director compensation (applies to McNamara) .

Appendix: Say-on-Pay and Clawbacks

Say-on-Pay 2024: 82.70% support; program maintained following review .
Clawback: NYSE-compliant recovery policy and committee misconduct clawback over a 3-year lookback; anti-hedging policy enforced .