Theodore Wahl
HEALTHCARE SERVICES GROUPAbout Theodore Wahl
Theodore “Ted” Wahl, age 51, is President & CEO of Healthcare Services Group, Inc. (HCSG) and a director since 2011; he became CEO in May 2015 after joining HCSG in 2004 and rising through COO, VP Finance, and field leadership roles; earlier he was a Senior Manager in EY’s Transaction Advisory Group . Under his tenure, HCSG’s pay-versus-performance disclosure shows cumulative total shareholder return (TSR) of $54 on an initial $100 over the 2020–2024 window versus $164 for the selected peer group, while 2024 also featured year-over-year increases in revenues and net income and returns of ROA 4.9%, ROE 7.9%, ROIC 9.7% . Say-on-pay support has been consistently strong (≈91% in 2024; 93% in 2023), and the CEO’s base salary has been unchanged since 2016, with performance pay tied primarily to income before income taxes (IBIT) and long-term equity (options, RSUs, PSUs) .
Past Roles
| Organization | Role | Years | Strategic / Operating Impact |
|---|---|---|---|
| Healthcare Services Group, Inc. | President & Chief Executive Officer | May 2015–present | Led recovery and growth pivot; maintained CEO comp structure tied to IBIT and multi-year equity; 2024 YOY revenue and net income increases; ROA 4.9%, ROE 7.9%, ROIC 9.7% . |
| Healthcare Services Group, Inc. | President & Chief Operating Officer; EVP & COO; VP Finance; Regional Manager; Regional Sales Director; District & Facility Manager | 2004–2015 | Field-to-C-suite progression, operational and financial accountability; compensation design emphasizes alignment via options/RSUs/PSUs . |
| Ernst & Young (EY) | Senior Manager, Transaction Advisory Services | pre-2004 | Transaction diligence background; adds financial rigor to operating role . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed for Wahl; primary external prior role at EY (transactions) . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,005,108 | 1,005,108 | 1,005,108; unchanged since 2016 |
| Other Compensation ($) | 45,709 | 47,207 | 49,887 |
| CEO Pay Ratio | — | 143:1 (FY23) | 145:1 (FY24) |
Perquisites include health, dental, optical (employee co-pay), life/disability insurance, and a company fleet vehicle .
Performance Compensation
Annual Incentive (Short-Term)
- Plan design: CEO bonus is a percentage of HCSG’s income before income taxes (IBIT), with a max of 2× salary; no discretion applied to CEO outcome .
- Wahl elected to take 35% of his annual incentive in stock for 2023 and 2024 .
| Year | Metric | Target | Actual Payout | Structure | Paid in Cash | Paid in Stock |
|---|---|---|---|---|---|---|
| 2023 | % of IBIT (CEO formula) | Not disclosed | 40% of salary | Annual (no discretion) | $258,648 | $139,265 |
| 2024 | % of IBIT (CEO formula) | Not disclosed | 40% of salary | Annual (no discretion) | $258,092 | $138,966 |
Long-Term Incentives (Equity)
- Vehicle mix: Stock options + RSUs (time-based, vest ratably over 5 years) + PSUs (3-year relative TSR vs S&P MidCap 400) .
- PSU payout schedule: <25th percentile: 0%; 25th: 50%; 50th: 100%; ≥75th: 150% (interpolated in between) .
| Grant Year | Options (#) | Option FV ($) | RSUs (#) | RSU FV ($) | PSUs (#) | PSU FV ($) | Vesting / Terms |
|---|---|---|---|---|---|---|---|
| 2023 | 116,799 | 762,697 | 111,190 | 1,525,527 | 47,075 | 762,615 | Options/RSUs vest 20%/yr over 5 yrs; PSUs cliff after 3-yr TSR period (to 12/31/2025) . |
| 2024 | 156,735 | 793,643 | 153,213 | 1,587,287 | 66,974 | 793,642 | Options/RSUs vest 20%/yr over 5 yrs; PSUs cliff after 3-yr TSR period (to 12/31/2026) . |
Option exercise price for 2024 grant: $10.36; expiration 1/3/2034 .
Outstanding Equity (selected as of 12/31/2024)
| Instrument | Grant | Exercisable | Unexercisable | Exercise/Terms | Unvested RSUs (#) | Unvested PSUs (#) |
|---|---|---|---|---|---|---|
| Stock Options | 1/3/2024 | — | 156,735 | $10.36; exp. 1/3/2034 | — | — |
| Stock Options | 2/24/2023 | 23,360 | 93,439 | $13.72; exp. 2/24/2033 | — | — |
| RSUs | 1/3/2024 | — | — | 5-year ratable vest | 153,213 | — |
| PSUs | 2024 cycle | — | — | 3-year relative TSR to 12/31/2026 | — | 66,974 |
Note: Additional prior-cycle grants remain outstanding; see full award table for all positions and fair values .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,055,671 shares (≈1.4% of shares outstanding) . |
| Components (footnote) | Includes 14,218 ISO and 450,355 NQ options currently exercisable; 38,383 SERP-credited shares (unissued); and 77,958 (spouse) + 39,389 (children) shares . |
| Ownership Guidelines | CEO required to own ≥600% of salary; Wahl at 838% as of 12/31/2024; retention requirements apply if below threshold . |
| Hedging/Pledging | Hedging prohibited under insider trading policy; policy outlines blackout periods; no pledging disclosure noted . |
Employment Terms
- Employment agreement and severance: HCSG discloses no employment agreements for NEOs; severance multiples are not enumerated; equity follows plan terms .
- Change-in-control: Double-trigger vesting under 2020 Omnibus Plan (unassumed awards vest; if assumed, vest on qualifying termination or for good reason) .
- Clawback: Nasdaq/SEC-compliant clawback adopted; applies to incentive-based compensation for 3 years prior to an accounting restatement; “no-fault” recovery possible; 2024 review found no recovery required .
- Insider trading controls: Blackout windows; no hedging/derivatives; trading policy applies to insiders .
- Pay philosophy: CEO base salary unchanged since 2016; majority of compensation at-risk via annual IBIT-based incentive and multi-year equity mix .
Board Governance
- Roles and independence: Wahl is a director (since 2011) with no committee assignments; Board is majority independent and chaired by independent director Jude Visconto; Wahl is a management (non-independent) director .
- Attendance: In 2024, each director attended ≥75% of meetings (Board + committees) .
- Executive sessions: Independent chair presides over executive sessions without management .
- Director compensation: Employee directors (including Wahl) receive no additional director fees/equity for board service .
Compensation Structure Analysis
- Mix and trends: CEO salary level fixed since 2016 while equity and variable pay drive outcomes; 2024 LTI grant increased year over year (higher RSU/option/PSU counts vs 2023), maintaining 5-year RSU/option vesting and 3-year PSU performance cycles .
- Performance linkage: CEO annual incentive strictly formulaic on IBIT (40% of salary in both 2023 and 2024) with partial stock settlement elected (35%), reinforcing alignment .
- PSU metric rigor: Relative TSR vs S&P MidCap 400 with threshold/target/max at 25th/50th/75th percentiles (50%/100%/150% payout), creating outcome sensitivity to shareholder returns; 2024 award tied to 2024–2026 window .
- Governance features: Double-trigger CoC, formal clawback, no tax gross-ups, no special executive-only retirement plans (SERP is broad-based to eligible executives), anti-hedging policy .
Director Compensation, Peer Group, and Say-on-Pay
- Director Fees (context): Non-employee directors receive cash retainers and DSUs; as an employee, Wahl receives none for director service .
- Peer Group for benchmarking: ABM Industries, Amedisys, AMN Healthcare, Chemed, Clean Harbors, CoreCivic, J&J Snack Foods, Brink’s, Modivcare, UniFirst (periodically reviewed) .
- Say-on-Pay: Support of ~91% in 2024 and 93% in 2023, indicating broad shareholder approval of program design .
Related Party Transactions and Other Compliance
- Related party: Wahl’s brother-in-law, Matthew J. McKee (Chief Communications Officer), total comp ≈$770K in 2024 and ≈$719K in 2023; Audit Committee reviewed and deemed comparable to market .
- Section 16 reporting: One Form 4 for a phantom stock award (including for Wahl) was filed late in January 2025; otherwise timely compliance for FY2024 per company review .
Performance & Track Record
- Financial and operating highlights (2024): YOY increases in revenues and net income; >500 new service agreements, >150 client ownership changes, ~90% retention; continuing buybacks ($23M+ since Feb 2023 authorization); ROA 4.9%, ROE 7.9%, ROIC 9.7% .
- TSR context: Company TSR value of $54 versus peer group $164 on initial $100 (2020–2024), underscoring residual market underperformance despite operational progress; PSU structure directly reflects this dynamic .
Equity Ownership & Outstanding Awards (Detail)
| Beneficial Ownership (3/31/2025) | Amount |
|---|---|
| Wahl Shares Beneficially Owned | 1,055,671 (≈1.4% of 72,916,000 outstanding) |
| Footnote Components | 14,218 ISO + 450,355 NQ options exercisable; 38,383 SERP-credited; spouse 77,958; children 39,389 |
| 2024 Grants (1/3/2024) | # / $ |
|---|---|
| Options Granted (#) | 156,735 |
| Option Grant Date FV ($) | 793,643 |
| RSUs Granted (#) | 153,213 |
| RSU Grant Date FV ($) | 1,587,287 |
| PSUs Granted (#) | 66,974 |
| PSU Grant Date FV ($) | 793,642 |
Employment Terms (Plan Features Summary)
- No individual employment contract; equity governed by 2020 Plan; double-trigger CoC; Nasdaq/SEC clawback adopted; anti-hedging; blackout periods; no repricing/backdating; no tax gross-ups .
Investment Implications
- Alignment positives: Wahl’s high ownership (838% of salary vs 600% guideline), repeated election to take a portion (35%) of annual incentive in stock, and heavier use of multi-year PSUs suggest strong long-term alignment and reduced near-term selling pressure from time-based awards vesting linearly over five years .
- Governance quality: Double-trigger CoC, clawback, anti-hedging, independent chair, and majority independent board mitigate governance risk; related-party employment is disclosed and reviewed by Audit Committee .
- Performance risk: TSR underperformance vs peers could dampen PSU realizations and weigh on realized pay, but provides upside leverage if multi-year TSR converges toward medians; IBIT-linked annual incentive maintains operating discipline .
- Retention/overhang: Significant unvested RSUs/options/PSUs with long vesting and multi-year performance windows support retention; 2024 option strike ($10.36) frames option moneyness sensitivity to share price recovery .