J. Paul Abernathy, M.D.
NATIONAL HEALTHCAREAbout J. Paul Abernathy, M.D.
Dr. J. Paul Abernathy is an independent director of National HealthCare Corporation, age 89, with his current Board term expiring in 2027; he has served on NHC’s Board since 2003 . He is a retired board‑certified general surgeon who practiced at Murfreesboro Medical Clinic from 1971 until 1995, and previously served as a general practice physician at Hazard Memorial Hospital in Kentucky; he also served as a flight surgeon at Homestead Air Force Base and as Chief of Surgery for the U.S. Air Force at Keesler Air Force Base . Dr. Abernathy holds a B.S. from Middle Tennessee State University and an M.D. from the University of Tennessee, is a member of the American College of Surgeons, and twice served as President of the Rutherford County Stones River Academy of Medicine . He currently serves on NHC’s Audit Committee, Compensation Committee, and Nominating & Corporate Governance Committee; the Board has determined he is independent under NYSE American standards, and all directors except the CEO are independent .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Murfreesboro Medical Clinic | Board‑certified General Surgeon | 1971–1995 | Long clinical career informs Board perspective on physician matters and business of health care |
| Hazard Memorial Hospital (KY) | General Practice Physician | Prior to 1971 (not specified) | Early-career clinical practice |
| Homestead Air Force Base | Flight Surgeon | Not specified | Military medicine experience |
| Keesler Air Force Base | Chief of Surgery (U.S. Air Force) | Not specified | Surgical leadership in military setting |
| Rutherford County Stones River Academy of Medicine | President (twice) | Not specified | Local medical leadership |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| American College of Surgeons | Member | Not specified | Professional association membership |
No other public company directorships are disclosed for Dr. Abernathy in NHC’s proxy statement .
Board Governance
- Board committees: Audit, Compensation, Nominating & Corporate Governance; Dr. Abernathy is a member of all three; committee chairs are Sandra Y. Trail (Audit), Emil E. Hassan (Compensation), and Richard F. LaRoche (Nominating) .
- Independence: The Board determined all directors except the CEO are independent; Dr. Abernathy is explicitly described as an independent director .
- Attendance: The Board held five meetings in 2024; each director attended at least 75% of Board and committee meetings; Dr. Abernathy attended four Board meetings in 2024 (earning $3,000 per meeting) .
- Executive sessions and leadership: Independent directors lead all committees and hold regular executive sessions; Chairman is independent (Robert G. Adams), separate from the CEO .
- Governance policies: Hedging by officers/directors is prohibited (policy adopted Feb 13, 2020 and continued Nov 7, 2024); Insider Trading Policy was amended and restated Nov 7, 2024; Compensation Recoupment “Clawback” Policy adopted Nov 2, 2023 .
- Say-on-pay: 2024 say‑on‑pay was approved by over 98% of votes cast at the 2024 annual meeting .
Fixed Compensation
| Component | 2024 Amount/Structure | Notes |
|---|---|---|
| Board/Committee Meeting Fees | $3,000 per scheduled meeting attended | Dr. Abernathy attended four Board meetings in 2024 ($12,000 of fees) plus additional committee-related/other fees totaling $16,000 cash for 2024 |
| Committee Chair Fees | $8,000 (Audit Chair); $4,000 (Compensation/Nominating Chair); not applicable to Dr. Abernathy | Chairs in 2024: Trail (Audit), Hassan (Comp), LaRoche (Nominating) |
| Discretionary Cash Bonus (Directors) | $125,000 in 2024 to each non‑employee director | Used to exercise stock options or purchase NHC stock to increase ownership |
| Director Compensation (Abernathy – Total) | Fees $16,000; Option awards (grant-date fair value) $117,410; All other compensation $125,000; Total $258,410 | Option award relates to annual grant described below |
- Equity awards (structure): Non‑employee directors receive an annual 5‑year stock option grant of 7,500 shares on the date of the annual meeting (May 9, 2024 for 2024), with exercise price set at the closing price on grant date, vesting one year after grant .
- As of Dec 31, 2024, outside directors held aggregate option positions including Dr. Abernathy’s 28,255 shares of options outstanding; 2024 grant fair value for each director was $117,410 .
Performance Compensation
Directors are not paid based on operational performance metrics; their equity compensation consists of annual option grants and a discretionary cash bonus to facilitate stock ownership . NHC’s pay‑for‑performance program for executives uses company‑level metrics; the key financial measures linking compensation actually paid are Net Income and Adjusted Income Before Income Taxes, and the executive Bonus Pool equals 5% of pre‑tax earnings excluding unrealized gains/losses on marketable securities .
| Performance Metric (Company) | 2024 Value | Link to Compensation |
|---|---|---|
| Net Income ($) | $101,927,000 | Included in pay‑versus‑performance analysis; informs executive CAP trends |
| Adjusted Income Before Income Taxes ($) | $105,289,000 | Company‑selected measure linking compensation actually paid to performance |
| Executive Bonus Pool (% of pre‑tax earnings excl. unrealized gains/losses) | 5% policy; produced $5,264,459 pool for 2024 | Funds executive bonuses; directors not compensated under this plan |
Other Directorships & Interlocks
| Entity | Role | Interlock/Notes |
|---|---|---|
| None disclosed | — | NHC proxy does not disclose any other public company boards for Dr. Abernathy |
Board interlocks relevant to NHC overall (not to Dr. Abernathy): Robert G. Adams serves on NHI’s Board and is NHC’s Chairman; NHC leases properties from NHI under a master lease; disclosed as related-party context for the company but not involving Dr. Abernathy personally .
Expertise & Qualifications
- Education: B.S., Middle Tennessee State University; M.D., University of Tennessee .
- Clinical/leadership expertise: Board‑certified general surgeon; flight surgeon; Chief of Surgery (USAF); local medical association leadership; American College of Surgeons member .
- Board qualifications: Brings extensive physician perspective and health‑care business insight to NHC’s Board .
Equity Ownership
| Item | Amount/Detail |
|---|---|
| Beneficial Ownership (Common Shares) | 61,533 shares; includes 26,510 shares issuable upon the exercise of options (exercisable within 60 days); <1% of class |
| Options Outstanding (Director aggregate) | 28,255 options held as of Dec 31, 2024 |
| 2024 Director Option Grant | 7,500 options granted on May 9, 2024; vest one year post‑grant; 5‑year term; exercise price equals closing price on grant date |
| Pledging/Hedging | No pledging disclosed for Dr. Abernathy; hedging prohibited by policy for officers/directors (adopted Feb 13, 2020; continued Nov 7, 2024) |
| Section 16 Compliance | No delinquent Section 16 filings disclosed for Dr. Abernathy in 2024 |
Governance Assessment
- Strengths: Independent director across all key committees (Audit, Compensation, Nominating), contributing clinical and physician‑practice expertise; committee leadership is independent; Board structure separates Chair and CEO with regular executive sessions .
- Engagement/attendance: Attended at least 75% of Board/committee meetings with four Board meetings attended in 2024; Board held five meetings .
- Alignment: Annual director option grants and $125,000 discretionary cash bonus used to increase share ownership support alignment; Dr. Abernathy holds 61,533 shares including exercisable options; no pledging disclosed for him; hedging prohibited .
- Conflicts/related parties: No related‑party transactions disclosed for Dr. Abernathy; compensation committee disclosed no relationships requiring Item 404 disclosure among members except historical family employment for Mr. Burgess (not Abernathy) .
- Policies: Insider trading and clawback policies in place; strong say‑on‑pay support (>98% in 2024) indicates broad shareholder acceptance of compensation governance (executive program) .
RED FLAGS: None disclosed specific to Dr. Abernathy (no pledging/hedging, no related‑party transactions, timely Section 16 reporting). Note: Dr. Abernathy’s age (89) underscores the importance of ongoing Board succession planning, which the Nominating Committee oversees annually; committee membership confirmed and nominations regularly evaluated .