Edmund M. Fay
Senior Vice President and Treasurer at EHC
Executive
About Edmund M. Fay
Edmund M. Fay is Senior Vice President and Treasurer of Encompass Health (EHC), serving as an executive officer since March 1, 2008 (age 58). He previously spent 16+ years in financial services across M&A, treasury, fixed income and capital markets roles at Regions Financial (EVP Strategic Planning/M&A), Wachovia, and J.P. Morgan & Co. . Company performance context during his tenure: 2024 net operating revenues rose 11.9% YoY with strong discharge growth and network expansion , Adjusted EBITDA reached $1,103.7M in 2024 , and five-year TSR translated a $100 investment into $178.46 by 2024 year-end .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Regions Financial Corporation | EVP, Strategic Planning/M&A | — (prior to 2008) | Led M&A and strategic planning, bringing bank treasury and capital markets depth to EHC treasury function . |
| Wachovia Corporation | Vice President | — | Corporate development/treasury experience relevant to funding and risk management . |
| J.P. Morgan & Co., Inc. | Vice President | — | Fixed income and capital markets expertise enhancing capital structure execution . |
External Roles
No public company directorships or external board roles disclosed for Mr. Fay in the latest proxy .
Fixed Compensation
Not individually disclosed for Mr. Fay. The proxy provides detailed cash and equity elements for Named Executive Officers but does not include the Treasurer’s specific salary or bonus targets .
Performance Compensation
EHC’s senior management (NEOs and others) participate in the Senior Management Bonus Plan (SMBP), and senior officers receive long-term equity awards. Design details and 2024 plan math are below.
2024 SMBP Metrics, Weighting, Targets and Payout Structure
| Objective / Sub-metric | Weight | Threshold | Target | Maximum |
|---|---|---|---|---|
| Adjusted EBITDA | 70% | $966.795M (50% payout) | $1,045.184M (100%) | >$1,123.573M (200%) |
| Discharge to Community (Scorecard) | 35% of Scorecard | <60% hospitals meet goal (0%) | 70% (100%) | 80% (200%) |
| Acute Transfer (Scorecard) | 15% of Scorecard | <60% (0%) | 70% (100%) | 80% (200%) |
| Patient Satisfaction (Scorecard) | 30% of Scorecard | <60% (0%) | 70% (100%) | 80% (200%) |
| First Year RN Turnover (Scorecard) | 20% of Scorecard; target tightened to 70% of hospitals | <60% (0%) | 70% (100%) | 80% (200%) |
Notes: 2024 actuals achieved 179.9% of Adjusted EBITDA target and 144.0% combined Scorecard (RN turnover below threshold), driving a 169.1% payout of target for participants; plan caps at 200% .
Long-Term Incentives (structure and vesting)
| Award type | Performance metrics | Period / vesting | Key terms |
|---|---|---|---|
| PSUs | Normalized EPS (60%) and ROIC (40%), with 3-year rTSR modifier (0.75x–1.25x) | Earned at end of 3-year period; dividends accrue and pay only on earned shares | Relative TSR vs companies in S&P Health Care Services Select Industry and S&P 1500 . |
| RSAs | Time-based (retention) | Ratable over 3 years; votes and dividends accrue, paid upon vesting | Supports ownership and retention . |
| Stock Options | Time-based | Ratable over 3 years; 10-year term; strike = close 2nd trading day after 10-K | Awards sized at ~20% of target LTI value (Black-Scholes) . |
Governance features: no repricing; min one-year vest standard; no dividends paid pre-vest; double-trigger vesting on CIC; awards subject to clawback .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (recent) | After tax-withholding transactions in late Feb 2025, Mr. Fay directly held 100,816 shares (2/24/2025 Form 4) and 100,156 shares (2/28/2025 tax withholding) . |
| Ownership as % of shares outstanding | ~0.10% (100,156/100,709,106) based on shares outstanding at 2/13/2025 and 2/28/2025 holdings . |
| Insider activity profile | Recent filings primarily “F” code transactions (shares withheld for taxes), not open-market selling; limited selling pressure signal . |
| Hedging/pledging | Prohibited by policy; short sales and monetization strategies (e.g., collars/forwards) also prohibited . |
| Ownership guidelines | Senior executives must retain 50% of net shares until guideline met; “other executive officers” guideline = 1.5× salary . |
| Compliance status | Proxy confirms compliance status for NEOs and directors; not disclosed for non-NEO officers individually . |
Employment Terms
| Topic | What’s disclosed | Implication for Treasurer role |
|---|---|---|
| Executive Severance Plan (non-CIC) | CEO: 3× base salary and 36 months benefits; EVPs: 2× and 24 months; other executive officers: 1× and 12 months; pro rata vesting of time-based equity; performance equity per Committee determination . | As an executive officer (SVP & Treasurer), Mr. Fay falls under “other executive officers” terms (1× salary, 12 months benefits) if terminated without cause/for good reason . |
| Change-in-Control Benefits Plan | Double-trigger; Tier 1 (CEO, current EVPs) 2.99× (salary + avg bonus) and 36 months benefits; Tier 2 (CMO, CAO) 2.0× and 24 months; equity vests if terminated or if awards not assumed/substituted . | Treasurer is a participant as an officer; tier designation for Treasurer not explicitly stated in proxy; treatment follows plan designation by Committee . |
| Equity on CIC / retirement / death/disability | CIC: double-trigger vest; retirement: pro rata vesting (performance awards subject to attainment); death/disability: immediate vest at Committee’s discretion . | Standard application to executive participants. |
| Clawback | Robust recoupment policy aligned with NYSE; mandatory recovery for restatements (3-year lookback) of incentive comp tied to financial measures . | Applies to current/former executive officers, including Treasurer. |
| Non-compete / non-solicit | Required via restrictive covenant agreement to receive severance/CIC benefits; duration matches benefit continuation periods . | Governance-aligned retention and post-employment protections. |
| Tax gross-ups | Not provided for CIC benefits . | Shareholder-friendly design. |
Performance & Track Record (company context)
| Metric | 2024 outcome | Notes |
|---|---|---|
| Net operating revenues YoY | +11.9% | Strong volume and expansion (six new hospitals; +280 beds; +147 bed expansions) . |
| Discharges | +8.3% overall; +5.6% same store | Operational growth . |
| Adjusted EBITDA | $1,103.7M | Used for SMBP; reconciled in proxy . |
| 5-year TSR (value of $100) | $178.46 | Outperformed sector index over the period; CAP correlated with TSR . |
| Say-on-Pay approval | 98.0% (2024); >93% annually historically | Strong investor support . |
Compensation Committee & Governance (for benchmarking)
- Compensation and Human Capital Committee members: Patricia A. Maryland (Chair), Greg D. Carmichael, Joan E. Herman, Nancy Schlichting; Pay Governance serves as independent consultant; no conflicts reported .
- Best practices: double-trigger CIC; no tax gross-ups; clawback; ownership/retention requirements; prohibitions on hedging/pledging; min vesting periods; no option/SAR repricing .
Investment Implications
- Alignment: Material personal equity stake (~100k shares) and strict anti-hedging/pledging plus ownership retention requirements indicate strong alignment with shareholders .
- Incentive design: SMBP emphasizes financial performance (70% Adjusted EBITDA) with quality and workforce metrics; LTI is majority performance-based (EPS/ROIC with rTSR modifier) and three-year horizon, supporting durable value creation .
- Retention risk: Executive Severance and CIC plans provide standard market protection (no gross-ups; double-trigger; restrictive covenants), with comparatively modest non-CIC severance for non-EVP executives (1× salary), suggesting manageable retention cost and limited entrenchment risk .
- Trading signal: Recent Form 4s show tax-withholding dispositions rather than open-market sales, implying low insider selling pressure signal for Mr. Fay specifically .