Christopher Koster
CENTENEAbout Christopher Koster
Christopher A. Koster, 60, serves as Centene’s Executive Vice President, Secretary and General Counsel (since February 2020), after serving as SVP, Corporate Services (2017–2020) and previously as Missouri Attorney General for eight years . During his tenure, Centene delivered 2024 revenues of $163B (+6% YoY) and adjusted diluted EPS of $7.17 (+7% YoY) , a three-year revenue CAGR of 9% and a three-year TSR CAGR of -10% . Adjusted EBITDA reached $6.293B in 2024 versus $5.234B in 2021, reflecting execution on margin priorities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Centene Corporation | EVP, Secretary & General Counsel | Feb 2020–present | Executive officer overseeing legal and corporate secretary functions during portfolio streamlining, major PBM transition, and multi-state RFP cycle . |
| Centene Corporation | SVP, Corporate Services | Feb 2017–Feb 2020 | Enterprise services leadership pre-GC role . |
| State of Missouri | Attorney General | 8 years | Led statewide legal office; public-sector legal leadership experience . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| State of Missouri | Attorney General | 8 years | External (public office) legal leadership; prosecutorial and regulatory expertise . |
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary | $750,000 | No 2024 salary increase; base set by Compensation & Talent Committee . |
Performance Compensation
Annual Cash Incentive (2024 plan and actual payout)
| Metric | Weight | Target/Payout Structure | 2024 Actual vs Target | Weighted Payout |
|---|---|---|---|---|
| Adjusted Diluted EPS | 65% | 0–200% of target; added 150% step at $7.00 | 167% | 108.6% |
| Enterprise & Individual Goals | 25% | Balanced scorecard (profitable growth, customer experience, culture) | 130% | 32.5% |
| Quality Goals | 10% | Medicare Stars, Medicaid HEDIS | 169% | 16.9% |
| Total Payout | 100% | — | — | 158% |
Koster’s 2024 annual cash incentive award: $1,185,000 (target 100% of salary; funded at 158%) .
Long‑Term Incentives (granted 2024; 65% PSUs / 35% RSUs)
| Award | Metric/Terms | Target Shares (Koster) | Grant-Date Fair Value |
|---|---|---|---|
| PSUs Tranche A | 2024–2026 Adjusted Pre‑Tax Earnings Growth CAGR (34% weight) | 8,210 | $624,371 |
| PSUs Tranche B | 2024–2026 Avg Adjusted Pre‑Tax Earnings Margin (33%) | 7,968 | $605,966 |
| PSUs Tranche C | 2024–2026 Relative TSR (33%) | 7,968 | $701,821 |
| RSUs | Service-based; 1/3 vest annually | 13,001 | $988,726 |
PSU metrics/weights: Relative TSR (33%), average adjusted pre‑tax earnings margin (33%), adjusted pre‑tax earnings growth CAGR (34%); PSUs vest in Feb 2027 if earned; RSUs vest ratably over three years .
Realized and prior-cycle LTI outcomes
- 2022–2024 PSUs paid at 44.6% of target; Koster: 8,582 shares vested vs 19,243 target .
- 2024 stock vested (all awards): 45,373 shares; value realized $3,259,187 .
Plan design link to performance
- 2024 Annual incentive weights: EPS 65%, enterprise/individual 25%, quality 10% .
- 2025 changes: annual incentive shifts to EPS 60%, organic premium & service revenue 20%, quality/strategic 20%; LTI replaces growth with Medicare performance and adjusts weights (continuing relative TSR and margin) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/14/2025) | 106,165 outstanding shares; 9,168 acquirable within 60 days; total 115,333; <1% of shares outstanding . |
| Outstanding Equity (12/31/2024) | Unvested RSUs: 31,253 ($1.893m at $60.58); Target PSUs (’23–’25, ’24–’26): 51,085 ($3.095m) . |
| Options | 15,690 performance stock options at $81.85 (granted 12/15/2021; exercisable if 20 consecutive days ≥$100); at $60.58 YE-2024, out-of-the-money . |
| Upcoming Vesting | RSUs/PSUs vest dates: 2/4/2025 (PSUs from 2022–2024), 3/15/2025–3/15/2027 tranches; Koster RSUs: 9,168 (3/15/2025), 9,169 (3/15/2026), 4,334 (3/15/2027); PSUs: 26,939 (’23–’25), 24,146 (’24–’26) target . |
| Ownership Guidelines | EVPs at 3x base salary; all NEOs in compliance as of 12/31/2024 . |
| Hedging/Pledging | Prohibited for directors and executives (no hedging, pledging, derivatives; no margin accounts) . |
| Deferred Compensation | 2024 contributions: $75,000; company match $17,308; YE balance $1,537,340 . |
Employment Terms
| Provision | Summary for Christopher A. Koster |
|---|---|
| Employment Agreement | No individual employment contract; covered by Executive Severance Plan . |
| Severance (non‑CIC) | Lump sum 1x base salary + prorated target bonus; 12 months COBRA (company portion); 12 months continued vesting (PSUs vest on actual performance); 6 months outplacement; 12 months non‑compete & non‑solicit . |
| Change‑in‑Control (Double‑Trigger) | If terminated without cause/for good reason within 24 months of CIC (or 6 months prior if requested by buyer): lump sum 2x base + 2x average bonus + prorated target bonus; 18 months COBRA; full accelerated vesting (performance at greater of target or actual pre‑CIC); options exercisable up to earlier of 12 months or expiry; non‑compete does not apply on CIC termination . |
| Clawback | Dodd‑Frank compliant; recovery of erroneously awarded incentive comp upon accounting restatement (3-year lookback), not dependent on misconduct . |
| Tax Gross‑Ups | None; no excise or perquisite tax gross‑ups; repricing of options prohibited without shareholder approval . |
| Insider Trading Policy | Pre‑clearance for Section 16 officers; 10b5‑1 restrictions; no short‑term/speculative trading . |
Performance & Track Record (Context)
- 2024 operating highlights: Medicare Stars improvement to 55% of MA members in 3.5+ star plans (key to breakeven path in 2027) .
- Medicaid RFP wins/new awards representing ~$18B annualized revenue; Marketplace membership >4M within margin targets .
- Strategic execution: 11 divestitures since 2021, PBM transition to ESI on Jan 1, 2024, and $7.6B of share repurchases (2022–2024) .
- 2024 financials: Revenues $163B (+6% YoY), GAAP EPS $6.31 (+27% YoY), adjusted diluted EPS $7.17 (+7% YoY) . Three-year TSR CAGR of -10% and adjusted EBITDA CAGR of ~6% (2021–2024) .
Compensation Governance, Peer Group, and Say‑on‑Pay
- Design and practices: Majority performance-based pay; formulaic annual incentives; PSUs vest after 3 years; independent consultant (FW Cook); no hedging/pledging; no single-trigger vesting .
- 2024 Healthcare peer group includes CI, ELV, HUM, MOH, UNH; plus distributors (COR, CAH, MCK), services/retail (CVS, WBA), facilities/insurance (HCA, MET, PRU) .
- Say‑on‑Pay: 2024 vote approved; support increased by 57 percentage points since 2022 following program changes .
Vesting Schedules and Potential Selling Pressure
| Date | Type | Shares |
|---|---|---|
| 2/4/2025 | PSUs (2022–2024 payout; earned) | 8,582 |
| 3/15/2025 | RSU tranche | 9,168 |
| 3/15/2026 | RSU tranche | 9,169 |
| 3/15/2027 | RSU tranche | 4,334 |
| 2025 (target) | PSUs (2023–2025, if earned) | 26,939 (target) |
| 2027 (target) | PSUs (2024–2026, if earned) | 24,146 (target) |
Note: Shares from vesting events typically trigger tax withholding (often via share sell-to-cover); no pledging is allowed, which limits leverage-driven supply . Options are currently out-of-the-money at YE‑2024, reducing exercise-related supply risk .
Compensation Structure Analysis
- Mix and risk: Shifted fully away from options and cash LTIP to PSUs/RSUs; long-term awards 65% PSUs with multi-metric design (TSR and profitability), aligning with shareholder outcomes and discouraging excessive risk .
- Annual plan tightened around EPS/quality with scorecard rigor; 2024 paid above target (158%) on strong EPS/quality and enterprise goals delivery .
- Governance strengths: No option repricing; no tax gross-ups; robust clawback; stringent hedging/pledging ban; ownership guidelines met .
- CIC economics: Double-trigger; full acceleration under CIC termination but no non-compete, consistent with market for EVPs; multiples are moderate (2x base + 2x avg bonus) .
Director/Committee and Related Governance (for context)
- Compensation & Talent Committee fully independent; retains FW Cook; oversees clawback and ownership guidelines .
- No related-party conflicts disclosed involving Koster; hedging/pledging prohibited; standard deferred comp available .
Investment Implications
- Alignment: Heavy PSU weighting with relative TSR and profit metrics ties pay to shareholder returns and operating quality; ownership guidelines and hedging/pledging bans support alignment .
- Supply dynamics: Predictable RSU/PSU vesting calendar through 2027 can create periodic sell-to-cover flows; option overhang minimal for Koster and currently out-of-the-money at YE‑2024 .
- Retention/CIC: Executive Severance Plan and double-trigger CIC terms reduce involuntary turnover risk while keeping change-in-control costs within market norms (2x base+bonus; full vesting) .
- Performance bridge: 2024 above-target cash bonus and 44.6% PSU payout on the 2022–2024 cycle indicate hurdle rigor; forward plan adds revenue growth and Medicare performance, increasing accountability as macro shifts unfold .
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