Joseph Zubretsky

About Joseph Zubretsky

Joseph M. Zubretsky is President and Chief Executive Officer of Molina Healthcare, Inc., serving since November 6, 2017 and as a director since 2017; he is 68 and holds a B.S. in Business Administration from the University of Hartford; he is a CPA (inactive) . Under his tenure, Molina delivered 2024 premium revenue of $38.6B (+19% YoY) and adjusted net income of $1,308M (+8% YoY), with adjusted EPS of $22.65 versus initial guidance of $23.50 . The company’s three-year performance PSUs granted in 2022 vested at 149% based on adjusted EPS achievements across 2022–2024, evidencing multi-year goals attainment . Pay-versus-performance disclosure shows cumulative TSR values for a $100 initial investment of $156.74 (2020), $234.42 (2021), $243.36 (2022), $266.28 (2023), and $214.50 (2024), alongside net income and adjusted EPS progression .

Past Roles

Organization	Role	Years	Strategic Impact
The Hanover Group	President & CEO	2016–2017	Led the insurer and served on its board; prior board experience carries strategic oversight .
Aetna, Inc.	CFO; SEVP (National Businesses); Chief Enterprise Risk Officer	2007–2015	Senior finance and operating roles at a top insurer, building enterprise risk and national business leadership .
Healthagen, LLC (Aetna subsidiary)	CEO & SEVP	2015	Operated provider/technology subsidiary, enhancing value-based capabilities .
Unum Group	SEVP Finance, Investments & Corp. Dev.; Interim CFO	2005–2007	Strengthened capital allocation and investment discipline at a major insurer .
Brera Capital Partners	Special Partner; CIO; CFO	1999–2005	Private equity investing and portfolio company finance .
MassMutual Financial Group	EVP Business Development; CFO	1997–1999	Led corporate development and finance at a mutual insurer .

External Roles

Organization	Role	Years	Notes
The Hanover Group	Director	2016–2017	Prior public board service; several boards historically per proxy .

Fixed Compensation

Metric	FY 2022	FY 2023	FY 2024
Base Salary ($)	1,500,000	1,500,000	1,600,000
Target Bonus (% of Salary)	200%	200%	200%
Actual Bonus Paid ($)	5,550,000	4,410,000	3,360,000
Stock Awards Grant-Date FV ($)	14,999,868	15,500,092	16,200,092
All Other Compensation ($)	81,388	81,631	784,017 (incl. $699,354 personal security)
Total Compensation ($)	22,131,256	21,491,723	21,944,109
CEO Pay Ratio	—	—	268:1

Performance Compensation

Short-Term Incentive (FY 2024)	Weighting	Target	Actual	Payout
Adjusted net income per diluted share	70%	$23.50 (equates to $1,366M adj. NI)	$22.65 (equates to $1,308M adj. NI)	83% of target for financial component
Individual performance	30%	Committee discretion	Goals largely achieved	156% (capped at 200%) for individual component
Total bonus payout factor	—	—	—	105% of target (CEO and other NEOs)

Long-Term Incentive Mix (2024 grants)	Metric	Grant size (#)	Grant-Date FV ($)	Vesting
Performance Stock Units (PSUs)	Cumulative adjusted EPS for FY2024–FY2026	25,103	9,720,133	Earn-out 0–200% on March 1, 2027
Restricted Stock Awards (RSAs)	Time-based	16,735	6,479,959	1/3 on 3/1/2025; 1/3 on 3/1/2026; 1/3 on 3/1/2027
One-time retention PSUs (Aug 19, 2024)	FY2027 adjusted EPS ≥ $36 and continued employment	146,184 target PSUs	See grants table (VWAP-based)	If assumed in CIC → converts to time vesting; otherwise pro-rata or target vesting per terms; full vest if terminated without cause/for good reason within 24 months post-CIC

Historical PSU Outcomes	Metric	Target	Vesting Achieved
2022 PSUs (covering FY2022; FY2023–FY2024)	Adjusted EPS (single-year and two-year avg)	See thresholds/targets	149% overall; CEO received 42,996 shares on 3/1/2025

Equity Ownership & Alignment

Ownership Item	Detail
Total beneficial ownership	386,410 shares; less than 1% of outstanding
Shares outstanding (record date)	54,699,859
Unvested RSAs (12/31/2024)	6,412 (3/1/2022), 15,096 (3/1/2023), 16,735 (3/1/2024); total 38,243
Unearned PSUs (12/31/2024)	28,857 (2022 cycle, settled 3/1/2025 at 149%), 33,967 (2023 cycle), 25,103 (2024 cycle), plus 146,184 retention PSUs; total 234,111
Upcoming vesting schedule	RSAs: 5,579 vested 3/1/2025; 5,578 on 3/1/2026 & 3/1/2027; PSUs: 33,967 on 3/1/2026 (performance), 25,103 on 3/1/2027 (performance); retention PSUs targeted to 2/15/2028 (performance/conditions)
Stock ownership guidelines	CEO must hold ≥5x base salary; all NEOs met guidelines as of 12/31/2024
Pledging/hedging	Pledging prohibited; hedging prohibited; none of the directors/executives had pledges
Options	No options granted to NEOs in 2024; company policy does not reprice options without shareholder approval

Employment Terms

Provision	Key Terms
Employment agreement	Continues until terminated; includes confidentiality, non-solicitation, non-competition, and non-disparagement
Non-compete	18 months post-employment
Severance (no cause/good reason)	150% of base salary + 150% of annual bonus; accelerated vesting of time-based awards; pro-rated vesting of performance awards based on straight-line extrapolation of performance to date; 3-year post-termination option exercise window (if any)
Retirement rights (≥65, with notice)	Accelerated vesting of time-based awards; performance awards vest at greater of target or extrapolated achievement; 3-year post-termination option exercise (if any)
Death/disability	Accelerated vesting of time-based awards; performance awards vest at greater of target or extrapolated achievement
Change-in-control (CIC; within 24 months)	200% of base salary + 200% of target bonus; accelerated vesting of time-based awards; performance awards at greater of target or extrapolated; 3-year option exercise (if any)
CIC severance plan	SVP+ entitled to 2x base salary, pro rata target bonus, and full vesting of unvested equity; COBRA subsidy up to 18 months
Retention PSU special terms	If not assumed in CIC → PSUs vest at target; if assumed → convert to time-based and vest at period end; full vest if terminated without cause/for good reason on/within 24 months post-CIC; pro-rated vesting for certain terminations; six-month “lookback” pre-CIC adjustment
Potential payments (illustrative, as of 12/31/2024)	Not-for-cause termination: $7.2M cash; $35.54M equity vesting value; CIC termination: $9.6M cash; $82.31M equity; plus $23,653 health benefits; death: $650k life insurance; see table for details

Board Governance

Board role and independence: CEO and director since 2017; only non-independent director; all other directors are independent under NYSE rules .
Board leadership: roles split; independent Chairman (Dale B. Wolf) and Vice-Chair (Ronna E. Romney), providing governance counterbalance to CEO dual role .
Committees: CEO/director does not serve on standing committees; committees comprise independent directors only .
Attendance: each current director attended ≥75% of Board and committee meetings in 2024; Board met 10 times in 2024 .
Executive sessions: independent directors regularly meet without management .

Director Compensation

Employee directors receive no additional director compensation; non-employee director cash/equity retainer program detailed separately .

Compensation & Incentives Diagnostic

Program design: simple, stockholder-aligned metrics; STI 70% tied to adjusted EPS, 30% to individual goals; LTI 60% PSUs on multi-year adjusted EPS, 40% RSAs .
Targets vs outcomes: 2024 adjusted EPS below initial guidance (22.65 vs 23.50), STI paid at 105% reflecting financial shortfall offset by individual achievements .
Retention risk mitigation: late-2024 one-time PSUs to incentivize CEO tenure through 2027 with aggressive FY2027 adjusted EPS ≥ $36 target; extensive investor engagement conducted .
Best practices: double-trigger CIC, clawback per SEC rules, no tax gross-ups, no option repricing, stock ownership requirements for executives/directors .

Compensation Peer Group (2024 Study)

Peer set (16 companies) used by FW Cook includes: AFL, BDX, BSX, CNC, CYH, DVA, ELV, HCA, HUM, LH, MET, PRU, DGX, THC, CI, UHS .
Consultant independence affirmed; FW Cook engaged May 2024 .

Say-On-Pay & Shareholder Feedback

2024 say-on-pay approval: 93% of votes cast (excluding broker non-votes) .
Engagement: outreach to holders representing ~74% of outstanding; ~20% held discussions; special PSU grants discussed with institutions in 2024–2025 .

Risk Indicators & Red Flags

Legal/related party: no legal proceedings adverse to the company involving directors/officers; related person transactions limited to a director’s family employment; none attributed to CEO .
Policy protections: clawback policy compliant with SEC rules; pledging/hedging prohibited; independent chair structure mitigates CEO/director dual-role concerns .
Equity practices: annual grant policy; no options granted to NEOs in 2024; no repricing without shareholder approval .

Equity Vesting & Potential Supply Considerations

Upcoming Dates	Instrument	Quantity	Condition
3/1/2026	RSAs	5,578	Time-based vest, assuming continued service
3/1/2026	PSUs (2023 cycle)	33,967	Performance-based on cumulative metrics
3/1/2027	RSAs	5,578	Time-based vest, assuming continued service
3/1/2027	PSUs (2024 cycle)	25,103	Performance-based on cumulative metrics
2/15/2028	One-time retention PSUs	146,184	FY2027 adjusted EPS ≥ $36 and continued employment (see CIC/termination conditions)

Note: Company insider trading policy prohibits hedging and pledging; any dispositions are subject to policy and blackout windows .

Investment Implications

Pay-for-performance alignment is strong: STI/LTI anchored to adjusted EPS with multi-year PSUs that have historically paid above target (149% for 2022 PSUs), indicating robust EPS delivery under current leadership .
Retention risk addressed: age-related tenure concerns prompted one-time performance PSUs with a high 2027 EPS target, reducing CEO succession overhang through 2027 if performance achieved; however, these awards increase equity overhang and concentrate risk on a single metric .
Governance mitigants: independent chair, independent committees, ownership guidelines, and clawbacks limit agency risk from CEO’s dual role as director .
Potential trading signals: sizeable scheduled RSU/PSU vesting through 2026–2028 and pro-rata/accelerated vesting mechanics on termination/CIC could create episodic supply, but hedging/pledging prohibitions and policy constraints temper immediate selling pressure .
Severance/CIC economics: meaningful cash multiples (1.5x; 2.0x) plus substantial equity acceleration suggest protective arrangements; investors should monitor change-in-control probabilities and succession planning disclosures for risk-adjusted valuation impacts .