Spencer Burton
ENSIGN GROUPAbout Spencer Burton
Spencer W. Burton is President and Chief Operations Officer of Ensign Services, Inc., appointed on May 30, 2019; he is 46 years old and holds a B.A. in Economics (Weber State University) and J.D./M.P.A. degrees (Brigham Young University) . Ensign’s pay program aligns executive compensation with performance measures centered on adjusted EBT, adjusted EBITDA, and adjusted EBITDAR, alongside clinical and governance factors; Burton’s 2024 incentive payout was $5,057,540, with a portion delivered as fully vested stock awards, reinforcing at-risk compensation alignment with financial, clinical, and governance outcomes . Each executive officer serves at the discretion of the Board and CEO, with compensation subject to Ensign’s clawback policy and long-term equity plan provisions .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pennant Healthcare, Inc. (Northwest portfolio company of Ensign Services) | President | Not disclosed | Led operations across the Northwest portfolio; focused on operational optimization and growth |
| Ensign-affiliated operations (California, Texas, Washington) | Executive Director | Not disclosed | Navigated regulatory environments, built clinical excellence, improved patient outcomes and staff well-being |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in latest proxy | — | — | — |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 319,623 | 329,212 | 339,088 |
| Target Bonus % | Not disclosed | Not disclosed | Not disclosed |
| Actual Bonus Paid ($) | 3,720,674 | 4,156,633 | 5,057,540 |
| All Other Compensation ($) | 16,988 | 17,510 | 22,863 |
| Total Compensation ($) | 5,512,728 | 8,541,097 | 7,998,353 |
Notes:
- 2024 bonus pool was $48.8M after adjustments to exclude $2.1M state relief funds; $18.0M was reallocated to other employees and a charity, leaving $30.8M, with Burton’s allocation $5,057,540; when the pool exceeds a stated threshold, 25% of incremental amounts are paid in vested restricted stock (Burton: $1,339,469) .
Performance Compensation
| Component | Metric(s) | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive (2024) | Adjusted EBT (pool formula), plus clinical (CMS five-star, readmission reduction) and governance (succession, culture, ESG) | Discretionary allocation by Comp Committee; individual weights not disclosed | Lowest target boundary increased 10% vs 2023 baseline; formula adjusts boundaries by +100–150% based on performance changes; declines reduce pool by 5% per 1% decline; no award if decline ≥20% | Adjusted predetermined formula produced $48.8M pool; post reallocations net pool $30.8M | $5,057,540 cash to Burton; plus $1,339,469 bonus stock awards (fully vested; one-year transfer restriction) | Bonus stock fully vested at grant; one-year transfer restriction |
| Long-Term Equity (2024 grants) | Restricted Stock (time-vested) | Not disclosed | Standard RS under 2022 Plan | 4,000 RS shares granted (Nov 6, 2024) | Grant date fair value $572,000 | Vests 20% annually over 5 years on each Nov 6 from 2025 to 2029 |
| Long-Term Equity (2024 grants) | Stock Options | Not disclosed | Options under 2022 Plan | 10,000 options at $143.00 strike, expiring Nov 6, 2034 | Grant date fair value $653,770 | Vests 20% annually over 5 years on each Nov 6 from 2025 to 2029 |
| Equity Incentive in Subsidiary | Standard Bearer Healthcare REIT restricted stock | Not disclosed | RS in subsidiary | 2024 grant $13,620 value | — | Vests over five years (time-based) |
Additional plan features:
- Approved performance criteria for awards include financial measures (Revenue, EBITDA, EPS, TSR, returns), operational and strategic metrics (market share, cost reductions, workforce/customer satisfaction), and project completion; awards subject to recoupment policies .
Equity Ownership & Alignment
- Beneficial Ownership (as of March 20, 2025): 137,465 shares; less than 1% of outstanding (57,626,065 shares) .
- Hedging: Executives with significant stock ownership are not permitted to hedge; proxy describes long-term ownership culture supported by stock-based awards .
- Ownership structure includes options and restricted stock with multi-year vesting; RS awards vest 20% annually over five years; options vest 20% annually over five years; unvested RS values based on $132.86 market price at 12/31/24 .
Outstanding equity awards at 12/31/2024:
| Grant Date | Options Exercisable (#) | Options Unexercisable (#) | Strike ($) | Expiration | Unvested RS (#) | Market Value ($) |
|---|---|---|---|---|---|---|
| 5/26/2016 | 5,899 | — | 16.60 | 5/26/2026 | — | — |
| 8/31/2016 | 5,899 | — | 15.93 | 8/31/2026 | — | — |
| 5/25/2017 | 4,719 | — | 15.80 | 5/25/2027 | — | — |
| 2/16/2018 | 4,719 | — | 22.49 | 2/16/2028 | — | — |
| 5/31/2018 | 9,438 | — | 31.03 | 5/31/2028 | — | — |
| 5/30/2019 | 17,697 | — | 45.34 | 5/30/2029 | — | — |
| 5/28/2020 | 8,000 | 2,000 | 44.84 | 5/28/2030 | 800 | 106,288 |
| 5/27/2021 | 4,500 | 3,000 | 82.20 | 5/27/2031 | 1,200 | 159,432 |
| 5/26/2022 | 3,200 | 4,800 | 80.60 | 5/26/2032 | 1,920 | 255,091 |
| 2/7/2023 | 2,500 | 10,000 | 89.86 | 2/7/2033 | — | — |
| 5/18/2023 | 2,000 | 8,000 | 90.85 | 5/18/2033 | 3,200 | 425,152 |
| 11/2/2023 | 7,400 | 29,600 | 98.83 | 11/2/2033 | — | — |
| 11/6/2024 | — | 10,000 | 143.00 | 11/6/2034 | 4,000 | 531,440 |
Vesting schedule highlights:
- RS vest: equal fifths annually over five years from grant date; Options vest equal fifths annually over five years; relevant tranche dates for Burton include May 27, 2025–2026; May 26, 2025–2027; May 18, 2025–2028; Nov 6, 2025–2029; plus options vesting on Feb 7, 2025–2028 and Nov 2, 2025–2028 .
Employment Terms
- Role and service: Executive officers serve at the discretion of the Board and CEO; no fixed-term employment agreement disclosed for Burton .
- Change-in-Control: Outstanding awards may be assumed/substituted, continued, accelerated, or cancelled per applicable transaction agreements, without uniform treatment required across participants .
- Clawback: Company may cancel, require reimbursement, or recoup equity/cash awards; policy has been refined to comply with SEC and Nasdaq rules and applies to incentive-based compensation tied to financial reporting measures .
- Hedging/Pledging: Hedging by executives with significant ownership is prohibited; pledging restrictions are not specified in the cited sections .
- Tax/Deferred Comp: Plan discusses Section 162(m) deductibility limits, Section 409A compliance for certain awards (e.g., RSUs), and Section 280G excise tax implications for COC—no tax gross-up language is described in the cited plan summary .
Compensation Peer Group and Benchmarking
- The Compensation Committee validated pay decisions against executives at National Healthcare Corporation, Amedisys, Encompass, LTC Properties, Omega Healthcare Investors, Welltower, Select Medical, CareTrust REIT, PACS Group, and National Health Investors; base salaries are on the lower end while total compensation is above median among comparable companies; specific target percentile not disclosed .
Grants of Plan-Based Awards (2024 details)
| Grant Date | Award Type | Quantity | Strike | Expiration | Grant Date Fair Value |
|---|---|---|---|---|---|
| Feb 6, 2024 | Bonus stock in lieu of cash (fully vested) | 8,879 shares | — | — | $1,043,993 |
| Nov 6, 2024 | Restricted stock (time-based) | 4,000 shares | — | — | $572,000 |
| Nov 6, 2024 | Stock options | 10,000 options | $143.00 | Nov 6, 2034 | $653,770 |
Equity Ownership & Beneficial Ownership (as of 3/20/2025)
| Holder | Shares Beneficially Owned | % of Class |
|---|---|---|
| Spencer W. Burton | 137,465 | * Less than 1% |
Performance & Track Record
- Pay-versus-performance: Company’s most important performance measures for aligning compensation actually paid (CAP) to NEOs are adjusted EBT, adjusted EBITDA, and adjusted EBITDAR; PvP disclosures include relationships of CAP to Net Income, adjusted EBT, adjusted EBITDA/EBITDAR, and TSR trends, with reconciliations in the 10-K and Feb 5, 2025 8-K .
Compensation Structure Analysis
- Strong pay-for-performance linkage: Annual bonus pool is formulaic based on adjusted EBT, then allocated based on clinical and governance outcomes; the lowest target boundary increased 10% YoY in 2024, raising difficulty for equivalent awards .
- Mix trends: Burton’s non-equity incentive rose from $3.72M (2022) to $4.16M (2023) to $5.06M (2024), while 2024 option grant fair value ($653,770) was lower than 2023 ($2.63M), offset by higher stock awards ($1.93M vs $1.41M in 2023), indicating continued emphasis on equity with moderated option grants .
- Ownership culture: Long-term equity awards (options and RS) with five-year schedules promote retention and multi-year alignment; hedging is prohibited .
Risk Indicators & Red Flags
- Clawback policy aligned with SEC/Nasdaq and Dodd-Frank; incentive-based pay subject to recovery upon accounting restatement .
- Change-in-control outcomes can include accelerated vesting or cancellation without participant consent; non-uniform treatment permitted, increasing transaction-dependent outcome variability .
- No explicit disclosure of pledging or tax gross-ups in cited sections; Section 280G excise tax consequences noted without gross-up language .
Investment Implications
- High variable pay tied to adjusted EBT and clinical/governance metrics suggests continued emphasis on operating execution and quality, with Burton’s large 2024 bonus signaling strong internal performance contribution .
- Upcoming vesting tranches across multiple grant dates (May 27, May 26, May 18, Feb 7, Nov 2, Nov 6) through 2029 create predictable windows for potential insider selling pressure as RS and option tranches vest; monitor Form 4s around these dates for trading cadence and 10b5-1 plan activity .
- Beneficial ownership is less than 1% with sizeable unvested RS holdings and multi-year option overhang; alignment is reinforced by hedging prohibitions and clawback provisions, but COC terms allow non-uniform award treatment, which could affect retention economics in transactions .