David Sedgwick
About David Sedgwick
David M. Sedgwick (age 49) is President and Chief Executive Officer of CareTrust REIT, Inc. (CTRE) since January 2022, a director since June 2022, and previously served as President (since February 2021), Chief Operating Officer (2018–2021), and Vice President–Operations (2014–2018). He is a licensed nursing home administrator with a B.S. in Accounting from Brigham Young University and an MBA from the University of Southern California . Under his leadership, 2024 was a record year: approximately $1.5 billion of new investments, ~$1.6 billion of equity raised, net income per diluted common share of $0.80 (2023: $0.50), NFFO per diluted share of $1.50 (2023: $1.41), FAD per diluted share of $1.54 (2023: $1.48), and average quarterly net debt to normalized run-rate EBITDA improved to 0.40x (2023: 2.82x) . The company’s three-year TSR for awards ending December 31, 2024 was 49.12%, at the 72.69th percentile vs. a healthcare REIT peer group . Board leadership separates CEO and Chair roles; Sedgwick is not independent under NYSE rules, while the Chair is independent .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CareTrust REIT, Inc. | President & CEO | Jan 2022–present | Led record 2024 deployment, deleveraging, and capital raising . |
| CareTrust REIT, Inc. | President | Feb 2021–present | Oversight of investments, asset/tenant relations, portfolio management . |
| CareTrust REIT, Inc. | Chief Operating Officer | Aug 2018–2021 | Operations leadership, portfolio optimization . |
| CareTrust REIT, Inc. | VP–Operations | 2014–Aug 2018 | Founding operations lead since REIT launch . |
| The Ensign Group, Inc. | President of Facility Services & Chief Human Capital Officer | 2007–2012 | Facility support services, acquisition integration, exec training (Ensign University) . |
| The Ensign Group, Inc. | Facility Operator | 2002–2007 | Operated three SNFs in two states . |
| Doctors Express (Ensign affiliate) | President | 2012 | Led Maryland urgent care franchise . |
| The Ensign Group, Inc. | Supported CO SNF ops | 2013 | Field support of SNF operations . |
External Roles
- No other public-company directorships disclosed in Sedgwick’s biography; service noted on CTRE’s board only .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 700,000 | 800,000 | 880,000 |
| Target Annual Cash Bonus ($) | — | — | 1,242,000 |
- Sedgwick receives no additional compensation for director service as an employee director .
Performance Compensation
Annual Cash Incentive Structure (2024)
| Metric | Threshold | Target | High | 2024 Actual | CEO Payout Weight at Actual |
|---|---|---|---|---|---|
| NFFO per share | $1.4116 | $1.4421 | $1.4734 | $1.4993 | 67.5% |
| Capital Deployment | $200M | $300M | $400M | $1,529M | 142.5% |
| Avg Net Debt / Normalized Run-Rate EBITDA | 3.50x | 3.00x | 2.50x | 0.40x | 55% |
| ESG Incentives (CEO only) | Threshold/Target/High (TCFD, resiliency, data analysis) | — | — | Achieved High | 10% |
- Maximum payout levels were raised in 2024 to align with peer practices; CEO super-high and extraordinary tiers permitted 225% and 275% total weightings respectively .
Actual Annual Cash Incentive (2024)
| Item | Value |
|---|---|
| Actual Performance % | 275% |
| Target Bonus ($) | 1,242,000 |
| Cash Incentive Award ($) | 3,415,500 |
Long-Term Equity Awards
| Grant | Grant Date | Instrument | Shares / Units | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| Annual LTI (2025 cycle) | 12/18/2024 | Time-based RS | 87,657 | 2,400,049 | 3 equal installments on 1/31/2026, 1/31/2027, 1/31/2028 |
| Annual LTI (2025 cycle) | 12/18/2024 | Performance RSUs (relative TSR, target) | 87,657 | 2,914,595 | Cliff on 12/31/2027; payout 0–200% vs healthcare REIT TSR peers |
| Special award for 2024 performance | 01/2025 | Time-based RS | Grant-date value $1,242,000 | — | Vest on 1/31/2026 |
- Company has not awarded stock options since inception .
Outstanding Equity Awards (as of 12/31/2024) – Sedgwick
| Grant Date | Unvested RS (#) | Market Value ($) | Target RSUs (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| 12/18/2024 | 87,657 | 2,371,122 | 87,657 | 2,371,122 |
| 12/15/2023 | 57,057 | 1,543,392 | 57,057 | 1,543,392 |
| 12/15/2022 | 28,780 | 778,499 | 43,170 | 1,167,749 |
| 12/15/2021 | 10,201 | 275,937 | — | — |
- 2024 vesting: Sedgwick had 101,753 shares vest, value realized $2,492,463; includes 58,988 shares from TSR awards after a 3-year performance period .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Common) | 260,345 shares |
| Restricted stock beneficially owned | 185,798 shares |
| Total beneficial | 446,143 shares; <1% of class |
| Ownership guidelines (executives) | CEO: ≥6x base salary; others: ≥5x base salary; 5-year compliance window; retain 50% of net shares until compliant |
| Compliance status (as of 12/31/2024) | All executives met minimum or were within 5-year window |
| Anti-hedging / pledging | Hedging and pledging prohibited absent preclearance; margin accounts prohibited |
| Clawback policy | Recovery of incentive comp upon restatement per SEC rules |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment agreements | None; executives covered by Change-in-Control and Severance Agreements |
| Severance (no CIC) | Lump sum: 2x base salary for CEO; pro-rata target bonus; up to 18 months COBRA reimbursement |
| Severance (CIC “double-trigger”) | Lump sum: 3x (CEO) of base salary plus average cash incentive of prior 3 years; full vesting of time-based awards; COBRA reimbursement; performance awards per award terms |
| Tax gross-ups | None; benefits subject to potential “cut-back” to optimize after-tax outcome |
| Post-termination covenants | Indefinite confidentiality; 2-year non-solicitation of employees/contractors |
Potential Payments (Sedgwick, hypothetical event on 12/31/2024)
| Scenario | Cash Severance ($) | Equity Acceleration ($) | Health Benefits ($) | Total ($) |
|---|---|---|---|---|
| Authorized Retirement | — | 10,051,212 | 80,552 | 10,131,764 |
| Death or Disability | 1,242,000 | 10,051,212 | 53,702 | 11,346,914 |
| Involuntary Termination (no CIC) | 1,760,000 | — | 80,552 | 1,840,552 |
| Involuntary Termination in Connection with CIC | 9,159,530 | 10,051,212 | 80,552 | 19,291,294 |
Board Governance
- Board independence: All non-employee directors are independent; Sedgwick is not independent due to employment .
- Leadership structure: CEO and Chair roles are separated; independent Chair since June 2022 .
- Committees: Audit (Chair Williams), Compensation (Chair Plumb), Nominating & Corporate Governance (Chair Olson), Sustainability & Corporate Responsibility (Chair Laing); Sedgwick serves on none .
- 2024 meetings: Board 5; Audit 4; Compensation 6; Nominating 3; Sustainability 4; all directors attended ≥75% of meetings; all directors attended the 2024 annual meeting .
- Executive sessions: Independent directors meet regularly in executive session .
Director Compensation Program (context)
- Annual cash retainer $80,000; Committee chair retainers: Audit $25,000; Compensation $20,000; Nominating $20,000; SCR $20,000; Board Chair additional $100,000 .
- Annual equity retainer $130,000 restricted stock; vests by next annual meeting .
- Director ownership guidelines: ≥6x annual cash retainer; 50% net shares retained until compliant; all met or within 5-year window as of 12/31/2024 .
- CEO (employee director) receives no additional director compensation .
Compensation Benchmarking & Say-on-Pay
- Peer groups reviewed by Pearl Meyer (2022 and updated 2024/2025); compensation set with reference to ~50th–75th percentile of total target direct compensation for similarly situated executives .
- Consultants: Pearl Meyer (program review), Infinite Equity (TSR design/valuation); independence assessed, no conflicts .
- Say-on-Pay: 96.5% approval at 2024 annual meeting; strong support since 2017 .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 – CTRE TSR ($) | 113.67 | 122.62 | 105.83 | 134.60 | 169.91 |
| Value of $100 – Peer Index TSR ($) | 92.43 | 132.23 | 99.82 | 113.54 | 123.47 |
| Net Income ($000s) | 80,867 | 71,982 | (7,506) | 53,735 | 125,080 |
| NFFO per Share ($) | 1.38 | 1.49 | 1.49 | 1.41 | 1.50 |
- 2024 operating highlights include record investments and deleveraging .
Risk Indicators & Red Flags
- Alignment safeguards: anti-hedging/pledging policy , robust stock ownership guidelines , clawback policy , TSR-based PSUs comprising 50% of annual LTI .
- Severance structure: double-trigger CIC; no tax gross-ups; sizable CIC payout potential ($19.29M total in hypothetical) .
- Program shifts: 2024 increased bonus weightings and added extraordinary tier for capital deployment to enhance performance leverage .
- Sector headwinds: CMS minimum staffing rule (no funding) and CA SB 525 wage increases may pressure tenant economics (risk to performance metrics over time) .
Equity Ownership & Potential Selling Pressure
- 2024 vesting of 101,753 shares (including 58,988 TSR shares) may create periodic liquidity needs but no Form 4 sale data disclosed here; policy restricts hedging/pledging absent preclearance .
- Forward vesting cadence: RS tranches on 1/31/2026–2028; RSUs cliff in 2025, 2026, and 2027 based on relative TSR .
Investment Implications
- Pay-for-performance alignment is strong: high variable cash payout tied to NFFO, capital deployment, leverage, plus TSR-based PSUs and ESG objectives; 2024 extraordinary capital deployment resulted in max bonus .
- Retention risk appears contained: significant unvested equity across multiple cycles and special awards, stock ownership guidelines, and non-solicit covenant reduce near-term departure risk .
- Governance mitigants: independent Chair, active committees, and robust clawback/anti-hedging policies lower alignment concerns; Sedgwick’s dual role as CEO/director is offset by board structure and independent oversight .
- Watch-outs: Large double-trigger CIC package could be dilutive upon change in control; tenant regulatory cost pressures (staffing minimums, wage laws) may challenge achieving aggressive capital deployment/deleveraging goals embedded in incentives .