Nancy M. Schlichting
Encompass HealthAbout Nancy M. Schlichting
Independent director of Encompass Health (EHC) since December 11, 2017; age 70. Former President & CEO of Henry Ford Health System (HFHS) with nationally recognized quality leadership, including Malcolm Baldrige National Quality Award and John M. Eisenberg Patient Safety and Quality Award. At EHC, she chairs the Compliance and Quality of Care Committee and serves on the Compensation and Human Capital Committee, reflecting deep healthcare operations and quality oversight expertise .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Henry Ford Health System (HFHS) | President & CEO | 2003–Dec 2016 | Led HFHS to national quality recognition (Malcolm Baldrige; Eisenberg Award) . |
| HFHS | EVP & COO | 1998–2003 | Hospital operations leadership; quality systems . |
| Henry Ford Hospital | President & CEO | 2001–2003 | Acute care leadership . |
| Catholic Health Initiatives (Eastern Region) | President | Prior to 1998 | Regional health system leadership . |
| Riverside Methodist Hospitals | President & CEO | Prior to 1998 | Hospital executive leadership . |
| Akron City Hospital & Summa Health System | EVP & COO | Prior to 1998 | Operations and quality oversight . |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Walgreens Boots Alliance, Inc. | Director | Current | Audit Committee member; Chairs Compensation & Leadership Performance Committee . |
| Baxter International Inc. | Director | Current | Quality, Compliance & Technology Committee member; Chairs Compensation & Leadership Performance Committee . |
| Hill-Rom Holdings, Inc. | Director | Prior | Former board service . |
| Pear Therapeutics, Inc. | Director | Prior | Former board service . |
Board Governance
- Committee assignments: Chair, Compliance & Quality of Care; Member, Compensation & Human Capital .
- Independence: Identified as an independent director; all nine non‑employee nominees, including Schlichting, meet NYSE independence standards; all standing committees fully independent .
- Attendance and engagement: Board met five times in 2024; each director attended ≥75% of board and committee meetings; all directors attended the 2024 annual meeting; independent sessions at every regular meeting .
- Committee activity levels (2024): Audit (9), Compensation & Human Capital (6), Compliance & Quality of Care (4), Nominating/Corporate Governance (5) .
- Tenure at EHC: Director since December 11, 2017 .
Fixed Compensation
| Component | Amount/Terms | Source |
|---|---|---|
| 2024 Cash Fees (Schlichting) | $119,945 | |
| 2024 Stock Awards (RSUs grant-date fair value) | $165,005 (1,978 units) | |
| 2024 Dividend-Equivalent RSUs (value) | $11,542 | |
| 2024 Total Director Compensation (Schlichting) | $296,492 | |
| Base annual cash retainer (effective May 2024) | $110,000 | |
| Chair fees (effective May 2024) | Compliance & Quality: $20,000; Audit: $30,000; Comp & Human Capital: $20,000; Nominating/Corporate Governance: $20,000; Board Chair: $150,000 | |
| Year-over-year changes (2024) | Base cash retainer +$10,000; annual equity grant +$15,000; Compliance Chair fee +$5,000 |
- Structure: Non‑employee directors receive fully vested RSUs that settle only upon board departure; dividend equivalents accrue in RSUs; no meeting fees; compensation limits exist under incentive plans .
Performance Compensation
- Not applicable for non‑employee directors: EHC director equity is time-based RSUs (fully vested, settlement deferred until departure); no performance metrics tied to director awards .
Other Directorships & Interlocks
| Potential Interlock Area | Detail | Conflict Handling |
|---|---|---|
| Supplier relationship (Baxter) | Baxter is a major med‑tech supplier; Schlichting is a Baxter director and compensation chair | EHC Nominating/Corporate Governance Committee pre‑screens transactions for conflicts; board found no material director-related relationships or transactions in 2024 . |
| Customer/channel (Walgreens Boots Alliance) | Pharmacy/healthcare retail | Same governance conflict review process; no material relationships disclosed in 2024 . |
| Overboarding policy compliance | None of EHC directors serve on >2 outside public company boards; policy limits outside directorships and audit committee memberships | Schlichting serves on two outside boards (WBA, Baxter), consistent with policy . |
Expertise & Qualifications
- Senior leadership: Decades leading large health systems (HFHS President & CEO; prior COO roles) .
- Quality and compliance: Led organizations to national quality awards; chairs EHC’s Compliance & Quality of Care Committee overseeing quality, compliance, and cyber risk .
- Compensation oversight: Chairs compensation committees at WBA and Baxter, indicating governance and pay-for-performance expertise .
- Industry breadth: Experience across providers and systems (Catholic Health Initiatives, Riverside Methodist, Summa) .
Equity Ownership
| Item | Amount/Status | Notes |
|---|---|---|
| Aggregate RSUs held (as of 12/31/2024) | 19,569 units | RSUs settle in EHC shares following departure from the board; additional RSUs accrue as dividends are paid . |
| Director ownership guideline | $550,000 required within five years of appointment/election | As of 2/13/2025, all non‑employee directors with ≥5 years of service have met the guideline (Schlichting appointed in 2017) . |
| Hedging/pledging | Prohibited for directors under insider trading policy | Reinforces alignment and risk mitigation . |
Governance Assessment
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Strengths
- Independent director with relevant committee leadership (Compliance Chair; Compensation member) and strong healthcare quality pedigree; attendance thresholds met; independent sessions at every meeting enhance oversight .
- Ownership alignment through sizable deferred RSU holdings and compliance with $550,000 ownership guideline; hedging/pledging prohibited .
- Robust governance practices: majority independent board, fully independent committees, majority voting, declassified board, clawback policy, double‑trigger CoC, no tax gross‑ups, anti‑repricing .
- Pay structure transparency: clear director fee schedules; prudent non‑employee director compensation limits in plan .
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Potential Risks/Red Flags
- External board roles at Baxter (supplier) and Walgreens (healthcare channel) present theoretical related‑party exposure; however, EHC reports no material director-related transactions in 2024 and has formal conflict vetting via Nominating/Corporate Governance Committee .
- Increased director pay levels (cash and equity) in 2024 reflect market benchmarking; monitor for pay inflation over time relative to responsibilities and investor feedback .
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Shareholder signals
- Strong Say‑on‑Pay support (historically >93%; 98.0% in 2024), suggesting investor confidence in compensation governance broadly .
This profile indicates high governance quality and alignment for Schlichting, with committee roles directly linked to EHC’s operational risk (quality/compliance/cyber) and compensation oversight, and no disclosed conflicts or attendance concerns.