Robert A. Frist, Jr.
About Robert A. Frist, Jr.
Co-founder of HealthStream and its Chief Executive Officer and Chairman since 1990; age 57; B.S. in Business (Finance, Economics, Marketing) from Trinity University . In 2024, HealthStream delivered revenue of $291.6M (+4.5% YoY), operating income of $21.3M (+32.9%), net income of $20.0M (+31.5%), and adjusted EBITDA of $66.8M (+9%), which drove full target payout under the CEO’s cash bonus plan tied primarily to adjusted EBITDA . Shareholders approved 2024 say‑on‑pay at ~96% . Pay-versus-performance disclosure shows CEO “compensation actually paid” of $0.79M in 2024 alongside positive TSR and rising adjusted EBITDA .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| HealthStream, Inc. | Chief Executive Officer and Chairman | 1990–present | Co-founder; long-tenured operator with deep domain knowledge; dual role provides continuity and strategy alignment per Board rationale . |
External Roles
- No other public company directorships disclosed for Robert A. Frist, Jr. in the 2025 proxy .
Board Governance
- Board service history: Director since 1990; Class III term expiring 2027; CEO and Chairman (not independent) .
- Committee participation: As CEO/Chairman, does not serve on standing committees; all committees composed solely of independent directors .
- Lead Independent Director structure: Thompson S. Dent has a chartered role (agenda approval, executive sessions, liaison, ability to call meetings), designed to offset combined CEO/Chairman structure .
- Attendance: Board held 7 meetings in 2024; all directors attended 100% of board and committee meetings .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary (plan; effective May 1) | $380,000 | $391,500 |
| Salary paid (SCT) | $380,000 | $387,667 |
| Target annual cash bonus (% of base) | 40% | 40% |
| Actual annual cash bonus ($) | $190,000 | $156,600 (target paid; no stretch) |
| Stock awards grant date fair value | $150,006 | $150,020 |
| Option awards | — | — |
| Total compensation (SCT) | $727,109 | $702,131 |
Performance Compensation
- Annual bonus framework (2024):
- Primary metric: “2024 Incentive Plan Company Adjusted EBITDA” (target $66.0M; achieved $66.7M) → target payout earned (40% of base for CEO) .
- Stretch metric: “2024 Incentive Plan Revenue Growth Percentage Rate” (6%→10% of salary; 7%→15%; 8%→20%) only payable if EBITDA target met; 2024 growth <6% so no stretch paid .
| Metric | Weighting | Target | Actual | Payout | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA (bonus) | Primary (targets set off this metric) | $66.0M | $66.7M | 40% of base salary | “Company-selected” measure linking pay and performance . |
| Revenue growth (stretch) | Adds 0–20% of base if EBITDA target achieved | 6–8% growth tiers | <6% | 0% | Stretch not achieved . |
- Equity incentives (CEO): time-based RSUs only (no CEO performance RSUs outstanding in tables). 2024 annual grants included 5,360 CEO RSUs; vesting is time-based . No CEO option awards outstanding .
Time-based RSU 2024 Grant (CEO)
| Grant type | Grant year | Units | Vesting cadence |
|---|---|---|---|
| RSU (time-based) | 2024 | 5,360 | Staggered semi-annual grants/vesting per program; see outstanding schedule below . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 5,447,839 shares (17.8% of 30,525,266 SO as of Mar 31, 2025) . |
| Unvested RSUs at 12/31/2024 | 19,060 units; year-end value $606,108 at $31.80/share . |
| Options | None outstanding for CEO at 12/31/2024 . |
| Stock vested during 2024 | 6,610 shares; value realized $177,306 . |
| Anti-hedging policy | Hedging/monetization prohibited for directors/executives . |
| Clawback policy | Mandatory recovery per SEC/Nasdaq final rules (filed as exhibit) . |
| Pledging | No explicit disclosure of pledging by CEO in proxy; not referenced in policies excerpted . |
CEO RSU Vesting Schedule (unvested as of 12/31/2024)
| Vest date | Units |
|---|---|
| Mar 2025 | 4,933 |
| Sep 2025 | 1,087 |
| Oct 2025 | 958 |
| Mar 2026 | 3,682 |
| Sep 2026 | 1,567 |
| Oct 2026 | 1,119 |
| Mar 2027 | 1,840 |
| Sep 2027 | 1,998 |
| Mar 2028 | 980 |
| Sep 2028 | 896 |
Employment Terms
| Term | Provision |
|---|---|
| Employment agreement | Dated July 21, 2005; auto-renews annually unless 90-day notice . |
| Non-compete / non-solicit | 1 year post-termination (limited exceptions) . |
| Severance (no CIC) | 1.5x most recent salary if terminated without cause; similar if resigns for material change/breach . |
| Change-in-control (CIC) | If CEO resigns for good reason post-CIC: immediate vesting of options, shares, benefits . Plan-level: options and time-based RSUs fully vest upon CIC; performance RSUs vest for current and next period as specified . |
| Potential payouts (12/31/2024) | Cash severance: $587,250 (1.5x salary); CIC acceleration value: $606,108 for stock awards (CEO) . |
| Clawback | Recoupment policy compliant with SEC/Nasdaq; mandatory recovery on restatement . |
| Tax gross-ups | Not disclosed in proxy sections reviewed. |
Performance & Track Record
- 2024 operating highlights vs. 2023: Revenue $291.6M (+4.5%), Operating income $21.3M (+32.9%), Net income $20.0M (+31.5%), Adjusted EBITDA $66.8M (+9%) .
Pay vs. Performance (PEO/CEO) – values by year
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| PEO total comp (SCT) | $577,378 | $641,950 | $749,901 | $727,109 | $702,131 |
| Compensation actually paid (CAP) | $499,881 | $714,120 | $735,100 | $787,761 | $786,546 |
| TSR ($100 initial investment) | 80.29 | 96.91 | 91.32 | 99.78 | 117.87 |
| Net income ($) | $14,091,000 | $5,845,000 | $12,091,000 | $15,213,000 | $20,007,000 |
| Company-selected measure: Adjusted EBITDA ($) | $49,248,000 | $52,315,000 | $53,192,000 | $61,295,000 | $66,726,000 |
Compensation Committee & Say‑on‑Pay
- Compensation Committee members: Frank Gordon (Chair), Linda Rebrovick, Jeffrey L. McLaren; all independent; no compensation consultant engaged for 2024 .
- Say‑on‑pay approval: ~96% at 2024 annual meeting .
- Philosophy: pay-for-performance emphasizing base salary, annual cash bonuses tied to Company performance, and long-term equity (primarily time-based RSUs) .
- Risk oversight: Committee concluded programs are not reasonably likely to have a material adverse effect .
Related Party Transactions
- The Board maintains a Related‑Party Transactions Policy with Audit Committee review/approval; no specific related-party transactions disclosed involving the CEO in the proxy sections reviewed .
Director Compensation (context)
- Non-employee director cash retainers and optional equity in lieu of cash (CEO/Chairman not eligible as employee director) .
Governance Independence
- Board deems CEO/Chairman structure appropriate given experience; mitigations include strong Lead Independent Director charter; all committees are independent; independent executive sessions held .
Investment Implications
- Alignment: CEO beneficially owns ~17.8% of shares, providing substantial “skin in the game”; unvested RSUs are modest relative to total holdings, limiting dilution risk from future vesting .
- Incentive design: Cash bonus anchored to adjusted EBITDA (with rigor around acquisitions) aligns with profitability discipline; stretch revenue growth targets were not met in 2024, demonstrating payout discrimination .
- Change-in-control mechanics: Plan-level single-trigger vesting for time-based RSUs/options and performance RSU acceleration introduce potential acceleration risk in a sale scenario; CEO agreement also provides vesting on good-reason resignation post-CIC .
- Supply overhang watch: Defined RSU vesting cadence (2025–2028) creates periodic issuance; monitor Form 4 filings around vest dates for any sell-to-cover pressure (no Form 4 analysis included here) .
- Governance checks: Combined CEO/Chairman structure offset by a robust Lead Independent Director role and fully independent committees; strong say-on-pay support (~96%) reduces near-term compensation controversy risk .
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