Sanjay Shetty
President, CenterWell at HUM
Executive
About Sanjay Shetty
Sanjay K. Shetty, M.D., is President, CenterWell at Humana and was first elected an executive officer in April 2023; he is 51 years old . He previously served nearly 13 years at Steward Health Care System culminating as President, and earlier worked as a strategy consultant at Bain & Company while also practicing as a radiologist and serving as faculty at Harvard Medical School . Under his leadership narrative, CenterWell is positioned as a senior-focused, chronic-care platform spanning primary care, pharmacy, and home, with management highlighting “over 400,000 patients” in primary care within ~24 months, a targeted mid-teens annual value-based patient growth rate, and continued programmatic M&A as a value creation lever . CenterWell’s scale and integration are framed by Humana as core to enterprise growth and margin stability through 2028, with CenterWell featured prominently at Investor Day 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Steward Health Care System | President (prior roles leading ACO, multi-specialty group, and acute hospitals) | ~13 years | Led large care delivery footprint; accountable care organization leadership and hospital operations experience |
| Bain & Company | Strategy Consultant | — | Strategy and operations expertise applicable to value-based care scaling |
| Harvard Medical School | Radiologist and Faculty | — | Clinical practice and academic medicine grounding CenterWell’s clinical model |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Harvard Medical School | Faculty (Radiology) | — | Academic and clinical background supporting clinical quality focus at CenterWell |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 493,269 | 694,808 |
| Target Bonus Opportunity ($) | Noted as 100% target opportunity in AIP disclosure for 2023; no payout due to EPS gate (see AIP) | 700,000 (AIP “Target” for non‑equity incentive plan shown in Grants of Plan-Based Awards) |
| Actual AIP Payout ($) | 0 (below EPS gate in 2023) | 661,107 |
| Discretionary/Sign-on Bonus ($) | 1,400,000 sign-on component as part of 2023 join package | 550,000 (second installment of sign-on per employment terms) |
Performance Compensation
2024 Annual Incentive Plan (AIP) – Metrics, Weightings, Targets, and Results
| Metric | Weight | Minimum (50%) | Target (100%) | Maximum (200%) | Result | Performance Rate | Weighted Contribution |
|---|---|---|---|---|---|---|---|
| Adjusted EPS | 50% | — | $16.00 | $20.00 | $16.21 | 105.3% | 52.6% |
| Individual MA Membership Growth | 20% | 400,000 | 525,000 | 650,000 | 250,000 | 0% | 0% |
| Integrated Health | 15% | 125,000 | 132,500 | 140,000 | 133,100 | 108.0% | 16.2% |
| Strategic Measures | 15% | 0% | 15% | 30% | — | 174.5% | 26.2% |
| Final AIP Funding | — | — | — | — | — | — | 95% |
AIP design for 2024 included a funding gate at $16.00 Adjusted EPS and balanced financial/operational drivers; measures were calibrated to the MA medical cost reset in late 2023–2024 .
2024 Long-Term Incentive (LTI) Mix (Grant Value)
| Instrument | 2024 Grant Value |
|---|---|
| Performance Stock Units (PSUs) – 50% | $1,250,000 |
| Restricted Stock Units (RSUs) – 25% | $625,000 |
| Stock Options – 25% | $625,000 |
| Total 2024 LTI | $2,500,000 |
- Vesting schedules: time-based awards (RSUs/options) vest in one-third annual tranches over three years; PSUs cliff-vest at year 3 based on performance .
2024 PSU Design (2024–2026 cycle; one-time transitional structure)
| Component | Weight | Threshold (50%) | Target (100%) | Max (150%) | Modifier |
|---|---|---|---|---|---|
| 2024 Adjusted EPS (financial measure) | 30% | — | $16.00 | $20.00 | — |
| Strategic Measures: Integrated Health and Clinical Innovation | 70% | 50% | 100% | 200% | — |
| Relative TSR vs peer group | — | — | — | — | +/- 20% (cap 200%) |
2024 Grants – Share Counts and Terms
| Grant Type | Grant Date | Shares/Units | Exercise Price | Grant Date Close | Grant Date Fair Value |
|---|---|---|---|---|---|
| PSUs (threshold/target/max) | 02/21/2024 | 1,361 / 3,404 / 6,808 | — | 367.60 | — |
| RSUs | 02/21/2024 | 1,702 | — | 367.60 | — |
| RSUs | 02/21/2024 | 5,446 | — | 367.60 | — |
| Options | 02/21/2024 | 272 | 367.21 | 367.60 | $25,816 |
| Options | 02/21/2024 | 6,300 | 367.21 | 367.60 | $597,953 |
Equity Ownership & Alignment
Beneficial Ownership and Trading Policies
- Beneficial ownership (shares) as of Jan 15, 2025: 780 .
- Options exercisable within 60 days as of Jan 15, 2025: 3,511 .
- Pledging/hedging: prohibited by policy; as of March 1, 2025, no shares are pledged by any executive officers or directors .
- Stock ownership guidelines: CEO 7x base salary; CEO direct reports (including NEOs like Dr. Shetty) 3x base salary; individual compliance status not disclosed in proxy .
Outstanding Equity Awards at 12/31/2024
| Instrument | Status | Count | Exercise Price | Expiration | Valuation Basis |
|---|---|---|---|---|---|
| Stock Options | Exercisable | 1,321 | $487.1602 | 04/01/2030 | — |
| Stock Options | Unexercisable | 2,643 | $487.1602 | 04/01/2030 | — |
| Stock Options | Unexercisable | 6,572 | $367.2100 | 02/21/2031 | — |
| RSUs | Unvested | 308 | — | — | $78,143 (at $253.71 close) |
| RSUs | Unvested | 1,135 | — | — | $287,961 (at $253.71 close) |
| RSUs | Unvested | 5,446 | — | — | $1,381,705 (at $253.71 close) |
| PSUs | Unearned | 738 | — | — | $187,238 (at $253.71 close) |
| PSUs | Unearned | 1,361 | — | — | $345,300 (at $253.71 close) |
Note: Market values use $253.71 closing price on 12/31/2024 as disclosed in the proxy .
2024 Stock Vested
| Type | Shares Vested | Value Realized |
|---|---|---|
| RSUs | 875 | $237,716 |
Employment Terms
Key Terms and Policies
- Role and election: President, CenterWell; first elected executive officer April 2023 .
- Join and sign-on: Joined in February 2023; cash sign-on of $2.2 million ($1.4M near start; $0.55M at first anniversary; repayable in full if voluntary departure before 3 years) .
- Severance policy: If terminated without cause, NEOs receive 18 months of base salary continuation; CEO receives 24 months and includes target AIP; NEOs eligible for prorated AIP if plan targets met; restrictive covenants (non‑compete, non‑solicit, etc.) apply for severance period .
- Change-in-control (CIC): CIC policy in place; no excise tax gross-ups; life/health benefits continuation modeled in CIC table .
Modeled Termination/CIC Economics (as of 12/31/2024)
| Scenario | Cash Severance | RSU/Equity Acceleration | Benefits | Other |
|---|---|---|---|---|
| Involuntary Termination (without cause) | $1,050,000 | $0 | $0 | Deferred comp balance $26,236 |
| Death or Disability | $0 | $3,088,444 | $0 | Deferred comp balance $26,236 |
| Change-in-Control | $2,800,000 | $3,088,444 | $9,901 | Deferred comp balance $26,236 |
- Life insurance death benefit: 3x base salary (max $3M); as of 12/31/2024, Shetty amount $2,100,000 .
- Retirement plans: Company 401(k) and equalization plan; Shetty 2024 registrant contribution $26,236 to the equalization plan (no executive contributions); aggregate nonqualified balance $26,236 .
- Humana Retirement Savings Plan (401(k)) account balance for Shetty: $77,173 (separate from table) .
- Perquisites: Relocation assistance in connection with employment .
- Clawback: Policy effective October 2, 2023, covering incentive compensation in cases of improper conduct and compliant with new regulations .
- Anti-hedging/anti-pledging: Prohibits hedging/pledging and certain monetization transactions .
Performance & Track Record
- CenterWell’s role and scale: Framed as a leading senior-focused chronic care delivery platform across primary care, pharmacy, and home; management cited “over 400,000 patients” in primary care over ~24 months and emphasized differentiated capabilities benefiting patients and health plan partners .
- Growth outlook: Management is targeting mid-teens annual value-based patient growth, sees same-store growth capacity, and expects to pursue programmatic M&A at more attractive valuations as competitors pull back .
- Execution examples: CenterWell Senior Primary Care agreed to acquire assets of The Villages Health (TVH) through a stalking‑horse APA (July 2025) and later obtained court approval of its winning bid (Sept 2025); Dr. Shetty commented on strategic fit and continuity of patient care .
- Enterprise integration: Investor Day positioned CenterWell as a prominent contributor to Humana’s long-term plan to deliver stable margins and reinvest capital in attractive services businesses .
Compensation Structure Analysis
- Cash vs equity mix: 2024 pay mix for Shetty included significant at-risk equity (PSUs 50% of LTI; RSUs 25%; options 25%) totaling $2.5M, with AIP dependent on financial/operational performance (final 95% funding) .
- Metric rigor and gates: AIP included a strict EPS gate ($16.00) and multi-dimensional measures; 2023 AIP funded at 0% due to EPS below threshold, demonstrating pay-for-performance discipline .
- PSU design: 2024–2026 PSUs temporarily emphasized strategic measures plus a 2024 EPS component and rTSR modifier (+/‑20%) with a 200% cap, reflecting transitional industry dynamics; committee reverted to a TSR‑anchored structure for 2025 awards .
- Governance safeguards: Robust clawback, anti‑hedging/pledging, stock ownership guidelines (3x base for CEO direct reports), and absence of CIC excise tax gross-ups .
Related Party Transactions and Risk Indicators
- Related party: An immediate family member of Dr. Shetty is employed by Wentworth Douglas Hospital, a network provider to which Humana paid approximately $7 million in 2024; the Board determined amounts were comparable to non‑affiliates and not material, with no direct or indirect material interest to Dr. Shetty .
- Section 16 compliance: Company reported full compliance for 2024 based on furnished reports and representations .
- Hedging/pledging: Prohibited; as of March 1, 2025, no pledges by executives/directors .
Investment Implications
- Alignment: High proportion of performance-based LTI (PSUs with rTSR modifier) plus strict AIP EPS gating indicates credible pay‑for‑performance alignment; 2023 AIP zero funding underscores downside discipline .
- Retention risk: Moderate—standardized severance (18 months for NEOs) and multi‑year vesting across RSUs/options help retention; no CIC gross‑ups reduces governance risk while providing defined CIC economics .
- Insider selling pressure: 2024 showed modest RSU vesting (875 shares, ~$238k); ongoing three‑year vesting of time‑based equity and PSU cliffs may create periodic liquidity windows, but anti‑hedging/pledging limits riskier behaviors .
- Execution vector: CenterWell growth (mid‑teens target), M&A optionality at lower valuations, and integration across primary care, pharmacy, and home offer upside to value creation under Shetty’s remit, with CenterWell positioned as an enterprise growth/margin lever .