Jim Rechtin
About Jim Rechtin
Humana’s President & CEO since July 1, 2024 (joined January 2024 as President & COO); age 54; non‑independent director since 2024 . 2024 company performance included Adjusted EPS of $16.21 (above “at least $16.00” guidance) and individual MA membership growth of +250,000 (+5%) . 2024 say‑on‑pay support was 91% . Board leadership is separated (independent Chairman), with 91% independent directors (10/11), mitigating dual‑role concerns .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Envision Healthcare | President & CEO | — | Led large provider group; value‑based care focus |
| OptumCare (UnitedHealth Group) | President | — | Deep MA delivery exposure; operations and integration |
| DaVita Medical Group | SVP Corporate Strategy; President, California market | — | Strategy and market P&L leadership in physician groups |
| Bain & Company | Consultant (healthcare); 14‑year veteran | 14 years | M&A and healthcare advisory expertise |
External Roles
| Category | Detail |
|---|---|
| Public company boards | None (Other Public Company Boards: 0) |
Fixed Compensation
| Item | 2024 value |
|---|---|
| Base salary (paid in 2024) | $1,105,769 |
| Current annual base (as of 12/31/24, used for CEO pay ratio) | $1,250,000 |
| Target bonus % | Increased from 150% to 200% effective 7/1/2024 (blended 177%) |
| Actual AIP bonus paid (2024) | $1,943,477 |
Performance Compensation
2024 Annual Incentive Plan (AIP) – Metrics, Targets, Outcomes
| Metric | Weight | Target | Actual/result | Payout factor |
|---|---|---|---|---|
| Adjusted EPS | 50% | $16.00 | $16.21 | 105.3% (contributes 52.6%) |
| Individual MA membership growth | 20% | 525,000 | 250,000 | 0% |
| Integrated Health (members using ≥2 CenterWell services) | 15% | 132,500 | 133,100 | 108.0% (contributes 16.2%) |
| Strategic Measures (consumer, cost/productivity, clinical innovation) | 15% | 15% funding at target | 174.5% | 26.2% |
| Final funding rate | — | — | — | 95% |
| Executive‑specific AIP outcome (2024) | Annualized salary | Target opportunity | Funding rate | Actual payout |
|---|---|---|---|---|
| Jim Rechtin | $1,154,372 | 177% (blend of 150%/200%) | 95% | $1,943,477 |
Long‑Term Incentives – Structure and 2024 Grants
| Component | Weight | Key features | Vesting |
|---|---|---|---|
| PSUs | 50% | One‑time 2024 design: 70% Strategic Measures (Integrated Health, Clinical Innovation), 30% 2024 Adjusted EPS; rTSR modifier ±20%; max 200% | |
| RSUs (time‑based) | 25% | Retention, ownership building | Vests 1/3 annually over 3 years |
| Stock Options | 25% | Long‑term value creation; price exposure | Vests 1/3 annually over 3 years |
| 2024 annual LTI target mix (grant date value) | PSUs (50%) | RSUs (25%) | Options (25%) | Total |
|---|---|---|---|---|
| Jim Rechtin | $3,000,000 | $1,500,000 | $1,500,000 | $6,000,000 |
| 2024 equity grants – specific awards | Grant date | Instrument | Quantity / terms | Pricing |
|---|---|---|---|---|
| Initial CEO new‑hire awards | 1/8/2024 | RSUs | 6,548 | $460.74 close |
| 1/8/2024 | Options | 28,576; strike $458.185; exp. 1/8/2031 | $460.74 close | |
| Annual program awards | 2/21/2024 | PSUs (target) | 8,170 (threshold 3,268; max 16,340) | — |
| 2/21/2024 | RSUs | 4,085 | $367.60 close | |
| 2/21/2024 | Options | 15,772; strike $367.21; exp. 2/21/2031 | $367.60 close |
PSU results context: for the prior 2022–2024 cycle (pre‑Rechtin CEO), payout was 87.0% of target based on 3‑yr Adjusted ROIC of 11.61%, strong strategic progress, and rTSR at the 7.4th percentile (−20% modifier) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Stock ownership guideline | CEO: 7x base salary; other execs: 3x. Must hold until met/maintained |
| Anti‑hedging/pledging | Hedging and pledging prohibited for associates, executives, and directors |
| Beneficial ownership (1/15/2025) | 2,183 shares (Jim Rechtin) |
| Options exercisable (within 60 days of 1/15/2025) | 5,257 (Jim Rechtin) |
| Unvested RSUs (12/31/2024) | 6,548 (grant 1/8/2024) – $1,661,293 value at $253.71; 2,724 (grant 2/21/2024) – $691,106 value |
| Unvested PSUs (target) (12/31/2024) | 3,268 – $829,125 value at $253.71 |
| Options outstanding (unexercisable) | 29,230 @ $458.19 (exp. 2031); 15,772 @ $367.21 (exp. 2031) |
| Shares outstanding | 120,641,615 (12/31/2024) |
| Ownership % of shares outstanding | ~0.0018% (2,183 / 120,641,615) |
| Pledging status | No shares pledged by any executive officers or directors as of 3/1/2025 |
Note: HUM year‑end stock price used by the proxy for 12/31/2024 valuations was $253.71; both 2024 CEO option strike prices ($458.19, $367.21) were above that level, implying options were out‑of‑the‑money at year‑end (lower near‑term exercise/selling pressure) .
Employment Terms
| Topic | Key terms |
|---|---|
| Start date / tenure | Joined January 2024 (President & COO); CEO effective July 1, 2024 |
| Employment contract | Company states no employment contracts with CEO/NEOs; compensation governed by policies and plans |
| Severance policy (without cause) | CEO: 24 months base salary + target bonus; 2‑year restrictive covenants (non‑compete, non‑solicit, non‑disparagement) |
| CIC policy (double‑trigger) | CEO: lump sum of 30 months base salary + target bonus; 30‑month restrictive covenants; benefits continuation 18 months; equity accelerates (RSUs vest; PSUs at target); options immediately exercisable |
| Illustrative payouts (as of 12/31/2024) | Involuntary without cause: $7,500,000 cash severance; Death/Disability RSU accel: $4,436,522; CIC: $9,375,000 cash + $59,200 benefits + RSU accel $4,436,522 |
| Clawback | Clawback policy covering incentive‑based compensation; adopted October 2, 2023 |
| Anti‑hedging/pledging | Prohibited (see above) |
| Perquisites | Limited, market‑aligned; 2024 “All Other Compensation” included relocation and temporary commuting/housing/living allowances (CEO) totaling $716,768 |
| Deferred comp/SERP | No deferred compensation entries for CEO in 2024 table |
Board Governance
- Status: Non‑independent director since 2024; no committee roles .
- Structure: Independent Chairman (Kurt Hilzinger); 91% independent board; separation of Chair and CEO emphasized for oversight; lead independent director used if roles combined .
- Committee governance: Organization & Compensation Committee (independent; Chair Wayne A.I. Frederick, M.D.) oversees CEO pay; uses Farient Advisors as independent consultant; no conflicts identified .
- Director attendance: 100% of incumbent nominees met ≥75% NYSE attendance standard in 2024; regular executive sessions held without management .
Compensation Structure Analysis
- Cash vs equity mix: 2024 CEO pay emphasized at‑risk compensation (AIP + LTI); annual LTI target $6M split 50% PSUs / 25% RSUs / 25% options .
- LTI risk profile: Options granted at strikes ($458/$367) above 12/31/2024 price ($253.71), increasing risk/long‑term alignment; PSUs include rTSR modifier ±20% .
- Metric design changes: One‑time 2024 PSU structure shifted weight to strategic measures (70%) given industry claims‑trend uncertainty; Committee signaled a return to a traditional 3‑year financial metric (relative TSR) for 2025 cycle .
- Pay‑for‑performance: AIP funded at 95%—EPS beat offset by membership miss; demonstrates formulaic link to performance .
- Shareholder support: 91% say‑on‑pay approval in 2024 .
- Governance safeguards: Double‑trigger CIC; no single‑trigger vesting/severance; no option repricing without shareholder approval; no tax gross‑ups; robust clawback; anti‑hedging/pledging .
Director Service Details (dual‑role implications)
- Board service: Director since 2024; not independent; no committees; independent Chair provides oversight .
- Independence mitigation: 10 of 11 directors independent (91%); separate Chair/CEO; executive sessions of independent directors; majority voting policy for directors .
- Director compensation: Non‑employee director fee program exists, but employee directors are not covered by that schedule; director stock ownership guideline 5x annual cash retainer applies to non‑employee directors .
Investment Implications
- Alignment and retention: 7x salary CEO ownership guideline, anti‑hedge/pledge, and multi‑year vesting drive long‑term alignment; 2024 relocation/perqs were transition‑related; no tax gross‑ups .
- Selling pressure: CEO options are out‑of‑the‑money at 12/31/2024 ($458/$367 strikes vs $253.71), reducing near‑term exercise/sale incentives; 2024 vesting produced 1,361 shares from RSU vesting and no option exercises reported for CEO in 2024 .
- Downside/cycle risk: One‑time PSU design tilted to execution KPIs reflects MA claims uncertainty; 2025 PSU re‑anchors to relative TSR plus operational goals, re‑tightening shareholder‑return linkage .
- Change‑of‑control economics: Double‑trigger CIC with 30‑month multiple and equity acceleration to target is meaningful but governance‑standard; severance table quantifies $9.375M CIC cash plus equity/benefits as of 12/31/2024 .
- Execution watch‑items: AIP membership growth underperformance (0% payout) highlights growth execution risk in MA; EPS met/beat reset target; continued focus on Integrated Health and clinical innovation embedded in incentives .
Sources: Humana Inc. 2025 DEF 14A (filed March 7, 2025): governance, compensation program, grant details, ownership, and policy disclosures as cited above.