John C. Shea
HEALTHCARE SERVICES GROUPAbout John C. Shea
John C. Shea, CPA, MBA, is Executive Vice President & Chief Administrative Officer at Healthcare Services Group (HCSG), a role he has held since September 2021. He joined HCSG in 2009 and previously served as Chief Financial Officer, Secretary, Vice President of Finance, and Chief Accounting Officer; prior to HCSG he was a Senior Manager in EY’s Transaction Advisory Services. Mr. Shea is 53 years old and holds CPA and MBA credentials . As context for pay-for-performance alignment, HCSG reported 2024 returns of ROA 4.9%, ROE 7.9%, and ROIC 9.7%, noted YoY increases in revenues and net income, and the value of an initial $100 investment in HCSG stock stood at $54 at 2024 year-end (company TSR basis) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Healthcare Services Group (HCSG) | EVP & Chief Administrative Officer | 2021–present | Enterprise administration and execution; previously finance and accounting leadership |
| Healthcare Services Group (HCSG) | CFO; Secretary; VP Finance; Chief Accounting Officer | Various years prior to 2021 | Built and led finance organization through multiple roles |
| Healthcare Services Group (HCSG) | Director of Regulatory Reporting | 2009–(promoted thereafter) | Established regulatory reporting foundations post-joining HCSG |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ernst & Young (EY) | Senior Manager, Transaction Advisory Services | Pre-2009 | Deal advisory/transaction execution experience prior to joining HCSG |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 606,703 | 606,703 | 606,703 |
| Actual Cash Bonus (Non-Equity Incentive) ($) | 56,353 | 90,100 | 101,562 |
| Stock Awards ($ grant-date fair value) | 452,706 | 454,332 | 492,996 |
| Option Awards ($ grant-date fair value) | 150,114 | 151,444 | 164,329 |
| Total Compensation ($) | 1,324,714 | 1,360,017 | 1,424,494 |
Performance Compensation
Annual Incentive (structure and 2024 outcome)
- Program design: EVP bonuses are tied to company Income Before Income Taxes (IBIT); CEO is capped at 2x salary; EVP outcomes may be adjusted up/down for operational factors including facility growth, profitability, client retention/satisfaction, and functional performance. The CFO and other EVPs’ bonuses are paid quarterly; the CEO’s is annual .
- 2024 outcome (Shea): $101,562 cash bonus, equal to 17% of salary .
| Metric | Weighting | Target | Actual/Outcome | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Income Before Income Taxes (company-wide) | Not disclosed | Not disclosed | Performance met program thresholds (EVP basis) | $101,562; 17% of salary | Paid quarterly to EVPs |
| Operational modifiers (e.g., facility growth, profitability, retention) | Discretionary modifier | N/A | Considered for EVPs | Incorporated within outcome | N/A |
Long-Term Equity Incentives (2024 grants)
- LTI mix: stock options and RSUs vest ratably 20% per year over 5 years; PSUs cliff-vest after 3 years upon Board certification, subject to 3-year Relative TSR vs S&P MidCap 400 .
| Grant Date | Instrument | # Granted | Grant-Date Fair Value ($) | Terms |
|---|---|---|---|---|
| 1/3/2024 | Stock Options | 32,453 | 164,329 | Strike $10.36; 5-year ratable vesting; 10-year expiry (1/3/2034) |
| 1/3/2024 | RSUs | 31,724 | 328,661 | 20% per year over 5 years |
| 1/3/2024 | PSUs (Relative TSR) | 13,868 (target) | 164,336 (probable) | 3-year performance (2024–2026); vests in 2027 upon certification |
PSU payout schedule (Relative TSR vs S&P MidCap 400) :
- <25th percentile: 0% earned
- 25th percentile: 50% earned (interpolates to median)
- 50th percentile: 100% earned
- ≥75th percentile: 150% earned
Equity Ownership & Alignment
Beneficial ownership, guidelines, and hedging/pledging
- Total beneficial ownership: 165,557 shares; less than 1% of outstanding .
- Includes currently exercisable options: 16,993 (ISO) + 78,470 (NQ) and 15,750 shares credited in the SERP (unissued) .
- Stock ownership guideline: 200% of salary for EVPs; Mr. Shea at 231% of salary as of 12/31/2024 (in compliance). Newly appointed executives have 5 years to comply .
- Hedging/derivatives prohibited by policy; proxy does not indicate any pledged shares by Mr. Shea .
| Item | Amount / Status |
|---|---|
| Beneficial ownership (shares) | 165,557; <1% of outstanding |
| Currently exercisable options | 16,993 ISO + 78,470 NQ |
| SERP credited (unissued) | 15,750 shares |
| Ownership guideline (EVP) | 200% of salary; Mr. Shea at 231% (compliant) |
| Hedging / Derivatives | Prohibited |
| Pledging | No pledge disclosure for Mr. Shea in proxy |
Unvested equity and potential selling pressure
- Unvested RSUs: 31,724; market value $368,633 at 12/31/2024 close ($11.62) .
- Unvested PSUs: 13,431; market value $177,961 at 12/31/2024 (reflects fair value method) .
- Options moneyness at 12/31/2024 stock price ($11.62):
- 2024 grant ($10.36) slightly in-the-money; 2023 ($13.72), 2022 ($18.10), 2021 ($28.37), 2020 ($24.43) out-of-the-money, which reduces near-term exercise/selling pressure from legacy grants as of that date .
| Option Grant (Shea) | Vested/Exercisable | Unvested | Strike | Expiry |
|---|---|---|---|---|
| 1/3/2020 | 14,178 | 3,543 | $24.43 | 1/3/2030 |
| 1/4/2021 | 12,366 | 8,244 | $28.37 | 1/4/2031 |
| 1/4/2022 | 14,790 | 22,184 | $18.10 | 1/4/2032 |
| 2/24/2023 | 4,638 | 18,554 | $13.72 | 2/24/2033 |
| 1/3/2024 | — | 32,453 | $10.36 | 1/3/2034 |
Vesting cadence: Options and RSUs vest 20% annually; PSUs cliff-vest after 3-year performance period upon Board certification .
Deferred compensation (SERP)
- 2024 activity: Contributions $106,240 (executive) and $26,564 (company match); gains $309,095; year-end balance $2,228,957 .
- SERP design: executives may defer up to 25% of earned income; company credits a 25% match (on the first 15% deferred) in Company stock; vesting of match at 3 years; shares issued to trustee and held until termination .
Employment Terms
- Start/tenure: Joined HCSG in 2009; EVP & CAO since September 2021 .
- Employment agreements: None for NEOs (at-will; no special employment contracts) .
- Change-in-control (equity): Double-trigger vesting (CIC plus award not assumed or qualifying termination) under the 2020 plan .
- Clawback: Nasdaq/SEC-compliant policy covering incentive-based pay; NCSO oversees; no recoupments for 2024 .
- Insider trading/blackouts: Standard blackout calendar; anti-hedging policy in effect .
- Perquisites: Medical, dental, vision (employee co-pay), life/disability insurance, and company fleet vehicle for Executive Management Team .
- Compliance note: One Form 4 reporting a phantom stock award for Mr. Shea (and certain other officers) was filed late in January 2025 (administrative timing) .
Compensation Structure Analysis
- Cash vs equity mix: Equity (options/RSUs/PSUs) is a significant portion of total comp to align with long-term performance; 2024 grants included all three vehicles with 5-year ratable vesting on time-based awards and 3-year cliff for PSUs .
- Performance metrics: Annual incentives centered on IBIT; PSUs tied to 3-year Relative TSR vs S&P MidCap 400; payout schedule of 0–150% based on percentile ranking .
- Governance features: Double-trigger CIC for equity; robust clawback; anti-hedging; significant ownership requirements (Shea at 231% vs 200% guideline) .
- Shareholder feedback: 2024 Say-on-Pay received ~91% support, reinforcing alignment credibility .
Performance & Track Record (Context)
- 2024 highlights included increased revenues and net income, strong 2H operating cash flow, >90% customer retention, over 500 new service starts, and 150+ facility ownership changes; returns of ROA 4.9%, ROE 7.9%, ROIC 9.7% were cited by the Board/NCSO .
- Pay-versus-performance disclosure shows 2024 company TSR value of $54 per initial $100 over the four-year horizon, providing context for equity award realizable value .
Multi‑Year Compensation Detail (Shea)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Options Granted (#) | — | — | 32,453 |
| RSUs Granted (#) | — | — | 31,724 |
| PSUs Granted (#, Target) | — | — | 13,868 |
| RSUs/Options Vesting Schedule | 20%/yr (5 yrs) | 20%/yr (5 yrs) | 20%/yr (5 yrs) |
| PSU Performance Window | 2022–2024 tranche outstanding | 2023–2025 tranche | 2024–2026 tranche; vests 2027 |
Note: 2024 vested RSUs totaled 14,253 for Mr. Shea (value $155,438) .
Investment Implications
- Alignment: Shea’s compensation is strongly tied to IBIT and multi-year Relative TSR, with a meaningful equity mix and ownership guideline compliance at 231% of salary—positives for pay-for-performance and alignment with shareholders .
- Selling pressure: As of 12/31/2024, only the 2024 option grant ($10.36 strike) was modestly in-the-money; larger legacy option tranches were out-of-the-money at $11.62 stock price, tempering near-term exercise-driven selling; unvested RSUs/PSUs of ~45k units provide retention and future supply cadence tied to vest and certification events .
- Retention/risk: No employment agreement or guaranteed severance; standard double-trigger CIC and clawback frameworks apply; equity design (5-year RSU/option vesting; 3-year PSU TSR) supports retention and performance focus. A minor administrative late Form 4 filing was noted in Jan 2025 .
- Monitoring: Track PSU TSR performance vs S&P MidCap 400 through 2026 and quarterly IBIT performance vs internal expectations; also watch future grant sizing/mix and any changes to ownership guideline status or policy (hedging/pledging) disclosures .