Patrick J. Orr
HEALTHCARE SERVICES GROUPAbout Patrick J. Orr
Executive Vice President & Chief Revenue Officer at Healthcare Services Group (HCSG); age 50; in current role since January 2021. Orr joined HCSG in 2014 (Senior Vice President, Financial Services) after serving as a partner at the law firm Klestadt & Winters, LLP (Esq.) . Under the current pay design, HCSG emphasizes income before income taxes for annual incentives and relative TSR for PSUs; in 2024 HCSG reported net income of $39.5M and income before taxes of $52.9M, with pay-versus-performance TSR value of $54 (vs. $48 in 2023) and ROA 4.9%, ROE 7.9% and ROIC 9.7% cited in business highlights . As of 12/31/2024, Orr’s stock ownership equaled 168% of salary versus a 200% guideline for EVPs (policy requires retention until compliant; the company states all executives remained in compliance) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Healthcare Services Group | EVP & Chief Revenue Officer | Jan 2021–present | Oversees commercial revenue functions during a period of renewed growth and improved collections/operating metrics . |
| Healthcare Services Group | Senior Vice President, Financial Services | Since 2014 (prior to 2021) | Led financial services; supported cost discipline, contract enhancements and collections programs noted in company highlights . |
| Klestadt & Winters, LLP | Partner (Attorney) | Prior to 2014 | Legal and restructuring background (Esq.) that aligns with revenue cycle/contracting rigor . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Klestadt & Winters, LLP | Partner | Pre-2014 | Prior employer before joining HCSG; no current public company directorships disclosed . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | 541,007 | 579,407 | 580,147 |
| All other compensation ($) | 18,931 | 22,335 | 25,772 |
Notes:
- 2024 base salary up 0.1% YoY (from $579,407 to $580,147) .
- Perquisites offered to NEOs include medical/life/disability insurance and use of a company fleet vehicle .
Performance Compensation
Annual Incentive (Cash/Equity)
- Design: Bonus for EVPs is calculated as a percentage of Company income before income taxes; CEO has a 2x salary cap; EVP outcomes may be adjusted for function-specific operational metrics; CFO/CAO nuances noted separately . No employment agreements; no guaranteed bonuses .
- 2024 outcomes for Orr: $121,877 cash (21% of salary) .
- 2023 outcomes for Orr: $108,122 cash (19% of salary) .
| Year | Metric | Target | Actual/Payout | Vesting |
|---|---|---|---|---|
| 2024 | Income before income taxes (company-level) | Not disclosed | $121,877 cash (21% of salary) | N/A (cash) |
| 2023 | Income before income taxes (company-level) | Not disclosed | $108,122 cash (19% of salary) | N/A (cash) |
Long-Term Incentives (Options, RSUs, PSUs) – Grants to Orr
| Grant year | Instrument | Shares granted | Grant-date fair value ($) | Vesting | Performance metric |
|---|---|---|---|---|---|
| 2024 | Stock Options | 30,538 | 154,632 | 20% per year over 5 years; strike $10.36; expire 1/3/2034 | N/A |
| 2024 | RSUs | 29,851 | 309,256 | 20% per year over 5 years | N/A |
| 2024 | PSUs | 13,049 | 154,631 | Cliff vest in 2027 (2024–2026 performance period) | 3-yr relative TSR vs S&P MidCap 400 |
| 2023 | Stock Options | 17,540 | 114,536 | 20% per year over 5 years; strike $13.72; expire 2/24/2033 | |
| 2023 | RSUs | 16,698 | 229,097 | 20% per year over 5 years | |
| 2023 | PSUs | 7,069 | 114,518 | Cliff vest in 2026 (2023–2025 performance period) | 3-yr relative TSR vs S&P MidCap 400 |
PSU Payout Curve
| HCSG Relative TSR Percentile | % of Target PSUs Earned |
|---|---|
| <25th | 0% |
| 25th | 50% |
| 50th | 100% |
| ≥75th | 150% |
Program guardrails
- No employment agreements or golden parachutes; no option repricing/backdating; no tax gross-ups; double-trigger vesting on change-in-control under the 2020 Plan .
- Clawback policy adopted per Nasdaq/SEC; no recovery triggered for 2024; in 2023 an error correction did not lead to recovery .
Equity Ownership & Alignment
Beneficial Ownership and Components (Orr)
| As-of date | Total beneficial ownership (shares) | % of class | Currently exercisable options (ISO + NQ) | SERP credited (but unissued) |
|---|---|---|---|---|
| Mar 31, 2025 | 109,702 | <1% | 18,465 ISO + 47,726 NQ | 9,423 |
| Apr 1, 2024 | 76,452 | <1% | 15,503 ISO + 31,815 NQ | 7,157 |
Unvested Awards at 12/31/2024 (Orr)
| Instrument | Unvested units | Market value | Notes |
|---|---|---|---|
| RSUs | 29,851 | $346,869 | Valued at $11.62 on 12/31/2024; 20% annual vesting |
| PSUs (at target 50th percentile) | 12,638 | $167,454 | PSU fair value methodology (Monte Carlo) and target assumption disclosed |
Option Stack (Orr) – Outstanding at 12/31/2024
| Grant date | Vested/Exercisable | Unvested | Exercise price | Expiry |
|---|---|---|---|---|
| 1/3/2020 | 6,819 | 1,704 | $24.43 | 1/4/2031 |
| 1/4/2021 | 9,254 | 6,167 | $28.37 | 1/4/2032 |
| 1/4/2022 | 10,537 | 15,806 | $18.10 | 1/4/2032 |
| 2/24/2023 | 3,508 | 14,032 | $13.72 | 2/24/2033 |
| 1/3/2024 | — | 30,538 | $10.36 | 1/3/2034 |
Ownership Guidelines and Compliance
| Executive | Requirement | Ownership as % of salary (2023) | Ownership as % of salary (2024) | Policy notes |
|---|---|---|---|---|
| EVP (Orr) | 200% of salary | 109% | 168% | Must retain net shares until compliant; co. states all execs remained in compliance |
Hedging/Pledging
- Anti-hedging policy prohibits hedging/derivative transactions; black-out windows apply; no pledging disclosures for Orr in the proxy .
- Section 16: One late Form 4 for Orr (phantom stock award) in January 2025; similar late filings in January 2024 for executive grants/vests (administrative timing) .
Employment Terms
- Start date/tenure: Joined HCSG in 2014; EVP & Chief Revenue Officer since January 2021 .
- Contracts: No employment agreements for NEOs; no special severance arrangements disclosed .
- Change-in-control: Double-trigger vesting (awards must be unassumed or, if assumed, require qualifying termination) under the 2020 Plan .
- Clawback: Nasdaq/SEC-compliant; oversight by NCSO Committee; no recoveries for 2024 .
- Deferred compensation: SERP allows deferrals up to 25% of earnings; 25% company match on deferrals up to 15% in stock; Orr 2024 activity—executive contributions $119,344, company contributions $26,331, year-end balance $848,334 .
- Perquisites: Health/dental/vision; life/disability; company fleet vehicle .
- ESPP: Broad-based plan with 15% discount feature (lower of begin/end price); offerings through 2026 .
Performance & Track Record (Context for pay-for-performance)
| Period | Company performance indicators |
|---|---|
| 2024 | HCSG cited strengthened YoY performance with increased revenues and net income; delivered strong 2H operating cash flow; >90% customer retention; ROA 4.9%, ROE 7.9%, ROIC 9.7% . |
| 2023 | Net income and cash from operations up ~12% and ~633%, respectively; cost of services managed to target; favorable workers’ comp development . |
| Pay vs performance | TSR “$100 to $54” by YE 2024 (vs $48 in 2023) in pay-versus-performance table; net income $39.5M (2024) vs $38.4M (2023); income before taxes ~$52.9M (2024) vs ~$53.1M (2023) . |
Compensation Governance, Peer Group, and Say-on-Pay
- Compensation committee practices: Majority at-risk mix; no gross-ups; no option repricing; independent consultant; clawback in effect .
- Benchmarking peers (talent comparators): ABM, Amedisys, AMN, Chemed, Clean Harbors, CoreCivic, J&J Snack Foods, Brink’s, Modivcare, UniFirst .
- Say-on-pay approval: ~91% in 2024; ~93% in 2023 .
Investment Implications
- Pay-for-performance alignment: Orr’s annual bonus is directly tied to company income before taxes, and his LTI mix includes PSUs earned on 3-year relative TSR—both aligning compensation with shareholder value creation and operating discipline .
- Retention and potential selling pressure: Multi-year vesting (5-year RSUs/options; 3-year PSUs) creates steady annual vesting through at least 2028–2029; as of 12/31/2024 Orr held 29,851 unvested RSUs and target 12,638 PSUs with additional unvested options across 2020–2024 grants, implying recurring supply events but also retention hooks .
- Alignment/skin-in-the-game: Orr’s beneficial ownership rose to 109,702 shares as of 3/31/2025 (<1%), with meaningful currently exercisable options and SERP stock units; ownership at 168% of salary vs. 200% guideline suggests progress but continued accumulation needed (company requires retention of net shares until compliant) .
- Risk controls: Double-trigger CoC, no employment contracts, clawback, and anti-hedging reduce governance risk; minor administrative late Form 4s were disclosed .
- Performance context: Recent ROA/ROE/ROIC improvements and TSR stabilization vs. 2023 support incentive realizations; however, options from older grants carry higher strikes, concentrating realized value more in recent RSUs/PSUs unless the stock price sustains above older strike levels .