Sarah London
CENTENEAbout Sarah London
Sarah M. London (age 44) is Chief Executive Officer of Centene Corporation (CNC) and a director since September 2021. She became CEO in March 2022 after serving as Vice Chairman and leading Health Care Enterprises and Advanced Technology. She holds a BA from Harvard College and an MBA from the University of Chicago Booth School of Business . Under her tenure, Centene reported 2024 revenues of $163 billion (+6% YoY; 3-year revenue CAGR 9%), with 2022–2024 long-term incentive payouts below target and CEO “Compensation Actually Paid” equal to 26% of SCT total, indicating tight pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Centene | CEO | Mar 2022–present | Executing disciplined strategy on cost savings, margin expansion, and member experience; supervised major divestitures and ESI PBM implementation . |
| Centene | Vice Chairman | Sep 2021–Mar 2022 | Executive leadership transition ahead of CEO role . |
| Centene | President, Health Care Enterprises & EVP, Advanced Technology | Mar 2021–Sep 2021 | Led enterprise technology and new businesses . |
| Centene | SVP, Technology Innovation/Modernization | Sep 2020–Mar 2021 | Modernization of tech capabilities . |
| Optum Ventures (UHG division) | Senior Principal & Operating Partner | May 2018–Mar 2020 | Health-tech investing and operating support . |
| Optum Analytics (UHG division) | Chief Product Officer | Mar 2016–May 2018 | Product leadership in analytics . |
| Optum Analytics | VP, Client Mgmt & Operations | Mar 2014–Mar 2016 | Client/operations leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Centene Board | Director (non-independent) | Sep 2021–present | No current board committees (2024–2025). Served on Value Creation Committee in 2023; Chairman is independent (Fred Eppinger, appointed Mar 2023) . |
| Other public company boards | None | — | “Current Directorships: None; Prior Directorships: None” . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of salary) | Actual Non-Equity Incentive ($) | Notes |
|---|---|---|---|---|
| 2024 | 1,400,000 | ≥150% per employment agreement | 4,289,125 | Non-Equity includes annual cash incentive; company ended cash LTIP/PSO grants beginning 2023 . |
| 2023 | 1,400,000 | ≥150% per employment agreement | 3,298,600 | Formula-based annual plan; increased EPS weighting . |
| 2022 | 1,359,038 | ≥150% per employment agreement | 4,041,866 | Transition year to CEO. |
Performance Compensation
- Program design highlights:
- Annual Incentive Plan (AIP): Increased emphasis on Adjusted Diluted EPS to 65% (2023); enterprise and individual goals decreased to 25% combined; quality metrics at 10%. 2024 goals refreshed; AIP paid above target on strong 2024 results .
- Long-Term Incentives (LTIs): From 2023 onward, discontinued performance stock options and cash LTIP; PSUs focus on multi-year financial metrics and relative TSR; below-target PSU payouts for 2022–2024 cycle; negative absolute TSR caps payout at 100% .
| Grant year | Instrument | Metric | Target/Structure | Vesting | Grant size / value |
|---|---|---|---|---|---|
| 2024 | PSUs Tranche A | 2024–2026 Average Adjusted Pre-Tax Earnings Margin | Interpolated threshold–target–max | Cliff at end of 3-year period | 39,910 target shares (one tranche), grant date FV $3,035,156 . |
| 2024 | PSUs Tranche B | 2024–2026 relative TSR (cap at 100% if absolute TSR negative) | Interpolated | Cliff at end of 3-year period | 39,910 target shares (second tranche), grant date FV $3,515,272 . |
| 2024 | PSUs Tranche C | 2024–2026 relative TSR or margin (second listing) | Interpolated | Cliff | 41,120 target shares, grant date FV $3,127,176 . |
| 2024 | RSUs | Time-based | N/A | Typically ratable; see schedule | 65,122 RSUs; grant date FV $4,952,528 . |
| 2023 | PSUs | 2023–2025 EPS growth and relative TSR | Interpolated | Cliff at end of 3-year period | 46,564, 47,975, 46,564 target shares across metrics; FVs $2,949,364; $3,038,737; $2,772,420 . |
| 2023 | RSUs | Time-based | N/A | Ratable | 75,979 RSUs; FV $4,812,510 . |
| 2021 | Performance Stock Options | Price hurdle | Vest if 20 consecutive trading days ≥$100 | 3-year earliest exercisability | 13,449 options @ $81.85 strike, expire 12/15/2031 . |
AIP Metric Weighting (illustrative 2023 design):
- Adjusted Diluted EPS 65%; enterprise + individual goals 25%; quality 10% .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/14/2025) | 254,766 shares total: 207,733 outstanding; 47,033 acquirable within 60 days; <1% of shares outstanding . |
| Outstanding awards at 12/31/2024 | Unvested RSUs 163,027 (MV $9,876,176); Target PSUs 262,043 (MV $15,874,565); Performance options 13,449 @ $81.85 exp. 12/15/2031 . |
| Upcoming vesting schedule | 2/4/2025: 7,356 (2021 PSUs) + 39,896 (2022 PSUs) earned; 3/15/2025: 47,033 RSUs; 3/15/2026: 47,034 RSUs + 141,103 (2023 PSUs target); 3/15/2027: 21,708 RSUs + 120,940 (2024 PSUs target) . |
| Stock vested | 2024: 188,327 shares vested (value $13,580,002); 2023: 16,895 shares vested (value $2,159,039); no option exercises in 2023–2024 . |
| Ownership guidelines | CEO 6x salary; NEOs 3x; Directors 7.5x annual cash retainer; non-compliance may limit equity awards . |
| Compliance | All executive officers and directors in compliance with hedging/pledging prohibitions (2024–2025); all directors in compliance with ownership guidelines as of 12/31/2023 . |
| Hedging/pledging | Prohibited for directors and employees; no short-term/speculative trading; options trading prohibited; margin accounts prohibited . |
Employment Terms
| Term | Key provisions |
|---|---|
| Employment agreement | Dated Apr 27, 2022; amended Feb 20, 2023. Base salary (2022–2023) $1.4M; annual cash incentive target ≥150% of salary; LTI awards at Committee discretion . |
| Termination (no CIC) | Cash severance = 2x (salary + greater of target bonus or 2-year average bonus); prorated bonus; 24 months medical; equity: continued vesting of specified RSUs/PSUs from 2021–2022, acceleration of time-based equity that would vest in next 24 months; pro-rata vesting of performance awards with 24 months service credit at ≥target or company performance . |
| Termination (with CIC; double-trigger within 2 years post or 120 days prior) | Cash severance = 2.99x (salary + greater of target bonus or 2-year average bonus); prorated bonus; 36 months medical; full vesting of all equity awards . |
| Restrictive covenants | Non-compete and non-solicit: 24 months post-termination; reduced to 12 months upon CIC . |
| Clawback | Dodd-Frank Section 954-compliant; restatement-based recovery regardless of misconduct . |
| Tax gross-ups | None for perquisites or excise taxes; severance policy caps at 2.99x . |
Potential payments (assumed termination as of 12/31/2024)
| Scenario | Cash Severance ($) | Pro rata Bonus ($) | Unvested RSUs/PSUs ($) | Cash LTIP ($) | Welfare benefits ($) |
|---|---|---|---|---|---|
| Involuntary Not for Cause | 9,276,466 | 3,238,233 | 24,378,664 | 1,875,000 | 49,174 |
| Termination Following a CIC (double trigger) | 13,914,699 | 3,238,233 | 29,306,484 | 1,875,000 | 73,761 |
| Death/Disability | — | 3,238,233 | 24,378,664 | 1,875,000 | 1,139,174 |
Board Governance
- Director since September 2021; non-independent by virtue of CEO role .
- Committee roles: None in 2024–2025; previously on Value Creation Committee in 2023 (renamed “Quality” in Sept 2023) .
- Chair structure: Independent Chairman (Frederick H. Eppinger) since March 2023, mitigating CEO/Chair concentration concerns .
- Compensation and Talent Committee: fully independent; uses FW Cook as independent compensation consultant; no conflicts identified .
Director/Shareholder Votes and Feedback
| Year | Say-on-Pay For | Against | Abstain | Result/Notes |
|---|---|---|---|---|
| 2025 | 378,107,602 | 47,508,937 | 926,993 | Approved (management says support has risen 57 pts since 2022 after program changes) . |
| 2024 | 433,825,369 | 43,973,709 | 269,709 | Approved; prior-year (2023) letter cites 84% support . |
Compensation Peer Group (benchmarking and targets)
- 2023 HCI peer group included managed care (CI, ELV, HUM, MOH, UNH), distributors (COR, CAH, MCK), services/drug retail (CVS, WBA), and facilities (HCA). MetLife and Prudential were added for 2024 decisions. Elements are generally targeted at the 50th percentile of peers .
- FW Cook advises the Committee; no conflicts; market and general-industry data used and size-adjusted for revenue .
Risk Indicators & Red Flags (as disclosed)
- No hedging/pledging permitted; no option repricing; no tax gross-ups; double-trigger CIC on cash and equity; formal clawback in place .
- Governance enhancements since 2022 include declassified board, special meeting/written consent rights, and executive severance plan adoption (2.99x cap) .
Investment Implications
- Pay-for-performance alignment is strengthening: 2024 AIP paid above target on revenue/EPS execution, while 2022–2024 PSUs paid below target and 2024 “Compensation Actually Paid” was only 26% of SCT total—reducing windfall risk and tying realized pay to results .
- Upcoming vesting (Feb–Mar 2025 and beyond) of significant RSUs/PSUs may increase 10b5‑1 activity and tax withholding transactions, but hedging/pledging prohibitions and ownership guidelines support alignment and reduce forced selling risk .
- Employment protections (2x severance; 2.99x CIC) and a 24‑month non‑compete suggest moderate retention and transition stability; independent chair and fully independent comp committee mitigate dual‑role governance concerns .
- Execution focus on margin expansion and cost discipline under London’s tenure (with 6% 2024 revenue growth and 9% 3‑yr CAGR) supports incentive design credibility; continued below‑target LTI outcomes on underperformance preserve downside symmetry .