Stephen Lockhart
About Stephen H. Lockhart
Stephen H. Lockhart, 66, is an independent director of National Research Corporation (NRC Health) since May 2021. He previously served as Senior Vice President and Chief Medical Officer at Sutter Health (2015–2021), East Bay Regional CMO (2010–2015), and Chief Administrative Officer at Sutter’s California Pacific Medical Center (2008–2010). He was named to California Governor Brown’s Advisory Committee on Precision Medicine in 2017, and currently serves on boards including Molina Healthcare (NYSE: MOH), ECRI Institute, Recreational Equipment, Inc. (REI), the David and Lucile Packard Foundation, and chairs Parks California; the 2024 proxy additionally listed West Pharmaceutical Services (NYSE: WST). He brings 36 years of healthcare experience to NRC’s board .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Sutter Health Network | Senior Vice President & Chief Medical Officer | 2015–2021 | Led clinical strategy and medical oversight across a major health system |
| Sutter Health (East Bay Region) | Regional Chief Medical Officer | 2010–2015 | Regional clinical leadership and operations |
| California Pacific Medical Center (Sutter) | Chief Administrative Officer, St. Luke’s campus | 2008–2010 | Administrative leadership |
External Roles
| Organization | Role | Public/Private | Notes |
|---|---|---|---|
| Molina Healthcare, Inc. (MOH) | Director | Public | Medicaid/Medicare health plan provider |
| West Pharmaceutical Services, Inc. (WST) | Director | Public | Listed in 2024 proxy; not referenced in 2025 proxy |
| ECRI Institute | Director | Non-profit | Healthcare quality/safety |
| Recreational Equipment, Inc. (REI) | Director | Private co-op | Retail/consumer co-op |
| David and Lucile Packard Foundation | Director | Non-profit | Philanthropy |
| Parks California | Chairman | Non-profit | California parks/public lands |
| CA Advisory Committee on Precision Medicine | Member | State advisory | Appointed in 2017 |
Board Governance
- Independence: Lockhart is one of five independent directors under NASDAQ standards .
- Committee assignments and chair roles:
- Compensation and Talent Committee – Chairperson
- Audit Committee – Member
- Nominating Committee – Member
- Strategic Planning Committee – Member
- Attendance and engagement:
- 2024 board activity: Board held 6 meetings plus 1 independent directors’ meeting; all incumbent directors attended ≥75% of Board/committee meetings; each director attended the 2024 annual meeting .
- Committee meeting cadence (2024): Audit (6), Compensation and Talent (2), Nominating (1), Strategic Planning (0) .
- Lead Independent Director: John N. Nunnelly (serving since May 2012); the board designated a lead director and will transition Michael D. Hays to Chairman upon CEO Trent Green’s appointment effective June 1, 2025 .
Fixed Compensation
| Year | Component | Amount | Notes |
|---|---|---|---|
| 2024 | Cash – “Fees Earned or Paid in Cash” | $75,000 | Includes $50,000 director retainer + $25,000 earned portion of contingent Director Cash Payment (up to $50,000 total tied to two in‑person meetings) |
| 2024 | Options (grant date fair value) | $100,008 | Annual stock option grant under 2004 Non‑Employee Director Stock Plan; exercise price = FMV on grant date; vests day before next annual meeting |
| 2024 | Total | $175,008 | Sum of cash and options |
| 2023 | Cash – “Fees Earned or Paid in Cash” | $50,000 | Standard director retainer (no contingent cash program disclosed for 2023) |
| 2023 | Options (grant date fair value) | $100,006 | Annual stock option grant under Director Plan; expires May 11, 2033 |
| 2023 | Total | $150,006 | Sum of cash and options |
- Director equity award contingent on in‑person attendance: 2024 “Director Equity Award” targeted $50,000 (options) contingent on two in‑person meetings; no shares were earned for this award in 2024 .
Performance Compensation
Compensation and Talent Committee-designed performance metrics for executive incentives in 2024–2026 (Lockhart as Chair):
| Plan | Metric | Threshold | Target | Maximum | Gate/Condition |
|---|---|---|---|---|---|
| 2024 Short‑Term Cash Plan | Total Recurring Contract Value (TRCV) | $144M | $149M | $154M | Payouts reduced if Adjusted EBITDA Margin <25%; actual TRCV $133M → no ST bonuses earned |
| 2024 Long‑Term Cash Plan | TRCV (Dec 31, 2026) | < $170M = $0 | ≥ $170M: $2.0M + $0.10476 per $ above $170M | $8.862M cap | Payout may be reduced if 2026 Adjusted EBITDA Margin <33% |
| 2024 Long‑Term Equity Plan | Performance stock options vesting | TRCV ≥ $170M (Dec 31, 2026) | N/A | N/A | Grants to select executives (e.g., 100,000‑share options) at $39.54 exercise; vesting upon TRCV goal |
- Committee oversight: 2024 say‑on‑pay approval exceeded 98% of votes cast; in 2025, the committee pivoted to equity‑heavy, shareholder‑alignment structures for the incoming CEO (Trent Green) and COO Helen Hrdy (restricted stock with transfer and repurchase restrictions and cash sign‑ons tied to stock value) .
Other Directorships & Interlocks
- Public boards: Molina Healthcare (payer) and (per 2024 proxy) West Pharmaceutical Services (drug delivery) .
- Potential interlocks/conflicts: No related‑party transactions involving Lockhart disclosed; Compensation Committee Interlocks section reports no relationships requiring Item 404 disclosure for 2024 .
Expertise & Qualifications
- Clinical and healthcare system leadership (CMO roles), policy engagement (state advisory committee), and broad non‑profit governance; these credentials underpin committee leadership in compensation, risk alignment, and healthcare market insight for NRC .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Shares Outstanding | Notes |
|---|---|---|---|
| Stephen H. Lockhart | 44,481 | * | Includes options exercisable within 60 days; “*” denotes <1% ownership as reported; total shares outstanding 22,785,421 (Record Date: Mar 20, 2025) |
- Director outstanding options (as of Dec 31, 2024): Lockhart – 44,481 options .
Governance Assessment
- Positives:
- Independent director and Compensation Committee Chair overseeing pay‑for‑performance frameworks with explicit TRCV and EBITDA margin gates; strong shareholder support (2024 say‑on‑pay >98%) .
- Formal governance features: majority vote director policy, proxy access, independent lead director, clear committee charters and risk oversight allocations (including cybersecurity oversight in Audit) .
- Board and committee attendance at or above 75% in 2024; annual meeting attendance by all directors .
- Watch items / potential red flags:
- No explicit hedging policy prohibitions (company discloses no practices/policies regarding directors’ hedging); many investors prefer formal anti‑hedging provisions for alignment .
- 2024 director compensation introduced contingent cash and equity tied to in‑person meetings; the equity portion was not earned; reliance on option‑based director pay may dilute alignment if options remain persistently out‑of‑the‑money .
- Strategic Planning Committee did not meet in 2024 (could be neutral given broader board oversight, but merits monitoring for strategic engagement cadence) .
- Concentrated shareholdings among trusts and related entities linked to the founder/Chair contextually increase influence; while not a Lockhart conflict, it affects overall governance dynamics (CPT/Amandla/Common Property Trust LLC; combined positions in aggregate exceed 30%) .
Overall, Lockhart’s healthcare expertise and independent chairmanship of the Compensation Committee are supportive of governance quality and investor confidence, with clear, disclosed performance metrics and strong say‑on‑pay outcomes; formalization of anti‑hedging policies and continued robust committee engagement (particularly strategic oversight) would further strengthen governance signaling .
