Daniel McCarthy

About Daniel McCarthy

Daniel “Dan” McCarthy is President of Evolent Health (EVH) since September 2022. He previously served as CEO of New Century Health (acquired by EVH) and held multiple leadership roles at Evolent since 2014; earlier he was a leader in McKinsey & Company’s healthcare practice. He holds an MBA from Harvard Business School and a BA from Georgetown University; age 40 as of Feb 20, 2025 . Company performance under his tenure includes revenue growth to $2,554.7M in 2024 (up 30.1% YoY) with Adjusted EBITDA of $160.5M amid industry oncology cost headwinds and a 66% stock price decline in 2024; 2023 saw revenue of $1,963.9M (+45.3% YoY), Adjusted EBITDA of $194.7M (+83% YoY) and a 17.6% stock price increase .

Past Roles

Organization	Role	Years	Strategic Impact
Evolent Health	President	Sep 2022–present	Leads specialty-led strategy and integration; oversaw growth to 40.5M Average Unique Members in 2024 .
New Century Health (EVH subsidiary)	Chief Executive Officer	2019–2022	Led specialty care platform (oncology/cardiology) integration into EVH .
Evolent Health	Multiple leadership roles	2014–2019	Built specialty and operations capabilities prior to NCH CEO role .
McKinsey & Company	Leader, Healthcare Practice	Pre-2014	Strategy/operator advisory experience in payer/provider value-based care .

External Roles

Organization	Role	Years	Notes
—	—	—	No public-company directorships or external board roles disclosed for McCarthy in EVH filings .

Fixed Compensation

Metric	FY 2022	FY 2023	FY 2024
Base Salary ($)	432,292	535,000	591,667 (prorated; rate $600,000 from Mar 1, 2024)
Target Bonus ($)	—	550,000	600,000
Actual Bonus Paid ($)	850,000	850,000 (Above Maximum)	0 (negative discretion)

Notes:

2024 bonus plan target/maximum amounts for McCarthy were $600k/$900k; Committee awarded zero due to below-threshold Adjusted EBITDA and stock decline .

Performance Compensation

Long-term equity grants and design

Grant Year	Instrument	Grant Date	Shares/Units	Grant-Date Fair Value ($)	Key Design/Vesting
2024	PSUs	3/1/2024 (approved 2/27/2024)	174,578	6,214,104	50% vests on 2-year period (to 12/31/2025) and 50% on 3-year period (to 12/31/2026), earned on “Company value” (revenue growth × cumulative Adj. EBITDA) with absolute TSR modifier ±10% based on stock price change bands .
2024	RSUs	3/1/2024	19,398	667,485	Time-based vesting 34%/33%/33% on 1st/2nd/3rd anniversaries .
2023	PSUs (Annual)	3/1/2023	64,300	2,267,218	3-year “Company value” (revenue growth + cumulative Adj. EBITDA), up to 250% of target shares .
2023	RSUs (Annual)	3/1/2023	27,557	971,660	Time-based vesting in three equal annual installments .
2023	PSUs (Supplemental)	7/1/2023	28,500	863,550	Supplemental grant for expanded role; same terms as 3/1/2023 PSUs .
2022	PSUs	3/1/2022	56,000	1,534,400	3-year “Company value” design; 2022–2024 award later modified to Company-level metrics for McCarthy (see below) .
2022	RSUs	3/1/2022	24,000	657,600	Time-based vesting in three equal annual installments (2022 grants) .

PSU outcomes (2019–2024 plan cycles)

Cycle	Target PSUs	Payout %	PSUs Earned	Realized Value ($)	Notes
2022–2024 PSUs	56,000	156.4%	87,585	985,331 (at 12/31/2024 close)	In April 2023, EVH amended 2022–2024 PSUs to Company-level metrics for business-unit NEOs; for McCarthy, amendment increased payout from 106.4% to 156.4% reflecting superior pre-modification BU performance .
2021–2023 PSUs	12,500	220% (200% on EBITDA plus +10% TSR mod)	27,500	—	Earn-out based on 2- and 3-year cumulative Adj. EBITDA; absolute TSR modifier +10% applied as 2021–2023 stock price > +30% .

Annual cash bonus metrics (2024)

Company-wide metrics and outcomes: Adjusted EBITDA threshold/target/max $245M/$255M/$265M; actual $160M (below); Revenue bookings growth +17.5% target; actual +17.8% (above); 1Q25 Adj. EBITDA $71M target; actual $35M (below) . Committee applied negative discretion to award $0 bonus to McCarthy .

Equity Ownership & Alignment

Beneficial ownership

Holder	Shares Beneficially Owned	% Outstanding
Daniel McCarthy	281,735	<1%

Anti-hedging and anti-pledging: Directors, officers, employees may not hedge or pledge company securities .
Stock ownership guidelines: Other Executive Officers must hold 3× base salary within 5 years; all NEOs have met or are on track as of 12/31/2024 .
Clawback policy: Amended Oct 2023; recovery of erroneously awarded incentive comp upon restatements per SEC/NYSE rules (look-back 3 fiscal years) .

Outstanding equity and options (as of Dec 31, 2024)

Security	Terms	Quantity	Status/Value context
RSUs (time-vested)	Various grants 2021–2024	e.g., 12,000 (2021), 7,920 (2022), 18,188 (2023), 19,398 (2024)	Unvested; valued at $11.25 per footnote as of 12/31/2024 close .
PSUs (performance)	2022, 2023, 2024 cycles	e.g., 56,000 (2022), 64,300+28,500 (2023), 174,578 (2024) outstanding	Earn on Company value with TSR modifiers per each plan .
Stock options	Exercise prices $13.29–$18.25; expiries 2027–2029	3,064 (2017 at $18.25), 16,835 (2018 at $13.95), 14,368 (2019 at $13.29)	Out-of-the-money vs $11.25 year-end price (no intrinsic value) .

Insider selling pressure lens:

Upcoming vesting cadence includes RSU installments around March 1 annually and PSU tranches on Dec 31, 2025 (2-year 2024 PSUs) and Dec 31, 2026 (3-year 2024 PSUs), which can create programmatic supply absent 10b5-1 offsets .

Employment Terms

Severance and change-in-control (CIC) framework

Agreements dated Jan 27, 2021 (double-trigger CIC; release and restrictive covenant compliance required) .
Non-CIC Qualifying Termination (involuntary without cause/for good reason): 12 months salary continuation; pro-rated bonus (target if 1H termination; actual if 2H); service credit on time-vested equity for 12 months; PSUs pro-rated and earned based on actual performance; COBRA subsidy for up to 12 months (after-tax) .
CIC Qualifying Termination (within 24 months post-CIC): 1.5× (base salary + target bonus) lump sum; pro-rated bonus (target if 1H; actual if 2H); full vesting of time-vested equity; PSUs vest at greater of target and actual; COBRA subsidy up to 18 months (after-tax) .

Estimated payout values (as of 12/31/2024)

Scenario (McCarthy)	Severance Pay ($)	COBRA ($)	Equity Acceleration ($)	Total ($)
Non-CIC Qualifying Termination	600,000	30,248	4,065,150	4,695,398
CIC Qualifying Termination	1,800,000	45,372	4,476,609	6,321,981

Restrictive covenants: Award agreements include confidentiality, non-compete, and non-solicitation obligations; compliance is a condition for severance and vesting treatment .

Performance Context

Company financials (latest three fiscal years)

Metric	FY 2022	FY 2023	FY 2024
Revenues ($)	1,352,013,000	1,963,896,000	2,554,741,000
EBITDA ($)	20,315,000	127,496,000*	94,003,000*

Values marked with an asterisk (*) retrieved from S&P Global.

Additional performance indicators:

2024: Revenue +30.1% YoY to $2,554.7M; Adjusted EBITDA $160.5M; stock price declined ~66%; Board applied negative discretion on bonuses .
2023: Revenue +45.3% YoY to $1,963.9M; Adjusted EBITDA $194.7M (+83%); stock price +17.6% .

Compensation Architecture, Peer Benchmarking, and Governance

Mix shift emphasizes performance risk: In 2024, McCarthy’s LTI mix increased to ~90% PSUs/10% RSUs (vs. ~70%/30% in 2023), strengthening pay-for-performance exposure .
PSU metrics tightened: 2024 PSUs incorporate two- and three-year Company value with absolute TSR modifier thresholds (±10%) and upper payout up to 300% (incl. modifier) .
Peer benchmarking: Compensation Committee (with independent consultant Exequity; no conflicts) updated peer group, adding AMN Healthcare, Manhattan Associates, Option Care Health, and Veeva, and removing smaller/less comparable or acquired peers; also referenced “emerging healthcare disruptor” data particularly for McCarthy .
Say-on-Pay: 2023 SOP approval ~98.1% ; 2024 SOP approval ~94.3% ; 2025 meeting approved 2024 compensation (For 77,588,031; Against 10,172,695) .

Compensation Mechanics and Vesting Details (granular)

Annual cash incentive plan (2024)

Metric	Threshold	Target	Maximum	Actual	Committee Assessment
Adjusted EBITDA ($)	245M	255M	265M	160M	Below threshold
Revenue bookings growth (%)	—	+17.5%	>+20%	+17.8%	Above target
1Q25 Adjusted EBITDA ($)	68M	71M	74M	35M	Below threshold

Key vesting schedules

RSUs: 2024 grants vest 34%/33%/33% on the 1st/2nd/3rd anniversaries of grant; 2023 grants vest in equal thirds annually .
PSUs: 2024 awards split into 2-year (earn-out at 12/31/2025) and 3-year (12/31/2026) performance tranches with absolute TSR adjustment; 2023 and 2022 awards are 3-year Company value metrics (revenue growth × cumulative Adj. EBITDA) .

Investment Implications

Alignment strong, but earnings sensitivity elevated: McCarthy’s 2024 LTI is ~90% PSUs, with outsized linkage to multi-year revenue and adjusted EBITDA trajectories and an absolute TSR modifier; this amplifies downside risk (as 2024 demonstrated) and upside torque if margin recovery/contract corridor protections lift earnings .
Retention and supply watch-outs: Unvested PSUs/RSUs are sizable (e.g., 174,578 PSUs and 19,398 RSUs from 2024) with meaningful PSU tranches at Dec 31, 2025/2026; although options are OTM, annual RSU installments and PSU settlements can create predictable supply overhangs absent 10b5-1 plans .
Governance risk mitigants: Double-trigger CIC, prohibition on hedging/pledging, clawback in place, and robust stock ownership guidelines reduce misalignment and risk-taking incentives; 2024 negative discretion on bonuses despite partial metric outperformance underscores pay-for-performance discipline .
Pay/peer positioning: Committee leaned into equity-heavy, performance-centric design and refreshed peers (including higher-quality comps), which may increase future equity grant values if performance rebounds; investor support remains high (SOP approvals >90%) but will depend on EBITDA delivery and TSR recovery .