John C. Rademacher
Option Care HealthAbout John C. Rademacher
John C. Rademacher is Director, President and Chief Executive Officer of Option Care Health, serving as CEO since 2018 and as a director since 2019; he is age 58 and not considered independent under Nasdaq rules due to his executive role . Company performance under his tenure in 2024 included net revenue of $4,998.2 million (+16.2% YoY), Adjusted EBITDA of $443.8 million (+4.4% YoY), adjusted diluted EPS of $1.58 (+10.5% YoY), $250 million in share repurchases, and ending cash over $410 million with net debt leverage ratio 1.6x . The Board maintains separation of CEO and Chair (independent chair Harry M. Jansen Kraemer, Jr.), executive sessions at each regular quarterly meeting, and it prohibits hedging and pledging by directors and officers, which helps mitigate dual-role independence concerns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Option Care Health | Chief Operating Officer | 2015–2018 | Led nationwide operations, sales, service, and support prior to appointment as CEO . |
| Cardinal Health, Inc. | President, Ambulatory Care; President, Nuclear & Pharmacy Services | 2007–2014 | Senior leadership across large-scale healthcare services businesses . |
| Cigna | Senior Vice President | 2001–2007 | Executive leadership in health services . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | Rademacher holds no other U.S. public company directorships per proxy disclosure . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 953,846 | 1,000,000 | 1,000,000 |
| Target Bonus (% of Salary) | 130% (per employment agreement historical target for CEO) | 130% | 130% |
| Actual Bonus Paid ($) | 1,539,593 | 2,600,000 | 1,209,000 |
Notes:
- Company kept the CEO’s base salary unchanged in 2024 .
- 2024 MIP target award opportunity for CEO was 130% of base salary; actual payout was $1,209,000 (93% of target) .
Performance Compensation
| Component | Weighting | Target Structure | Threshold | Target | Maximum | Actual 2024 | Payout (% of target) |
|---|---|---|---|---|---|---|---|
| MIP – Adjusted EBITDA | 50% | Annual | $435.5m | $450.0m | $495.0m | $443.8m | 50%–200% curve; contributed to 89% formulaic total with revenue |
| MIP – Revenue | 30% | Annual | $4.636b | $4.791b | $5.266b | $4.998b | 50%–200% curve; contributed to 89% formulaic total with EBITDA |
| MIP – Individual Goals | 20% | Annual | 0% floor | Company-set | 200% cap | CEO assessed by Board; payout within 89–100% range; CEO at 93% overall | |
| PSUs (2024 grant) | 60% of LTI | Three-year performance (2024–2026); 50% CFO growth; 50% combined revenue + Adjusted EBITDA growth | 50% payout floor | Target set by Board (confidential) | 200% cap | Earned shares vest in Feb 2027 subject to service | N/A (in-flight) |
| RSUs (2024 grant) | 40% of LTI | Service-based | — | Equal tranches over 3 years | — | First vesting on 1st anniversary of 2/20/2024; final Feb 2027 | N/A (in-flight) |
Additional details:
- 2023 PSU cycle vested at 166% of target based on two-year average CFO growth and combined revenue + Adjusted EBITDA growth .
- In 2024, OPCH eliminated stock options from LTI and increased PSU mix to 60% to strengthen pay-for-performance .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 621,013 shares; includes 303,072 shares via options exercisable within 60 days; <1% of outstanding shares . |
| Stock ownership guideline | CEO required to hold ≥5x base salary; must retain 75% of net shares until guideline met; status: in compliance/progress as of Dec 31, 2024 . |
| Hedging/pledging policy | Prohibits short sales, hedging, and pledging company securities by directors/officers/employees; pre-clearance and trading windows enforced . |
| 2024 RSU grant (CEO) | $2,400,071 grant-date fair value; 71,751 RSUs vest in equal amounts on each of the first three anniversaries of 2/20/2024; final vesting Feb 2027 . |
| 2024 PSU grant (CEO) | $3,600,023 grant-date fair value; 107,624 target PSUs, payout 50–200% based on three-year metrics; vest Feb 2027 subject to service . |
| Outstanding options (select) | Examples include 77,388/25,796 options at $18.97 expiring 2/23/2031; 90,918 at $26.91 expiring 10/26/2031; others listed with strikes/expirations . |
Implications for selling pressure:
- RSU tranches vest annually over three years, and PSUs cliff-vest at three years (Feb 2027), potentially creating periodic supply; hedging/pledging bans and retention rules mitigate misalignment risks .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment agreements | Pre-2019 agreements for CEO/CFO; severance provisions terminated via Feb 2024 letters—both now covered by Executive Severance Plan; agreements retain confidentiality, non-solicit, non-compete covenants . |
| Executive Severance Plan (outside CoC) | Severance multiple: CEO 2.0x salary; CFO 1.5x; others 1.25x; medical/dental/vision continuation for CEO 18 months, CFO 15, others 12; pro-rated current-year bonus based on actual results; earned but unpaid prior bonus; accelerated vesting to next scheduled date for time-based awards plus pro-rated PSUs at target . |
| Executive Severance Plan (within 24 months post-CoC) | Double-trigger; CEO 3.0x salary; CFO 2.5x; others 2.25x; pro-rated target bonus; accelerated vesting of options/RSUs and PSUs at greater of target or actual performance . |
| Potential payments (as of 12/31/2024) | CEO: termination without cause $16,473,785 total (severance $3,346,622; equity accel $13,127,163); death/disability $17,927,163; change-in-control qualified termination $22,357,914 (severance $5,646,622; equity accel $16,711,292) . |
| Clawbacks | Dodd-Frank compliant clawback for restatements; supplemental policy allows recovery for misconduct and certain covenant violations . |
| Tax gross-ups & pensions | No excise tax gross-ups or pension/SERP benefits; no significant perquisites . |
| Deferred compensation | Non-qualified deferred comp plan effective for 2024 deferrals; distributions per plan; eligible for directors and NEOs . |
Board Governance
- Board service: Director since 2019; Board met five times in 2024; each director attended ≥75% of meetings and was present at the 2024 annual meeting .
- Independence & leadership: Rademacher is not independent due to CEO role; Board has an independent non-executive Chair and holds executive sessions without management .
- Committees: CEO does not serve on Board committees; all committee members are independent; committee compositions and chair roles are disclosed (Audit, Compensation, Finance & Investment, Nominating & Corporate Governance, Quality & Compliance) .
- Director compensation: CEO receives no compensation for Board service (only non-employee directors are paid) .
Compensation Structure Analysis
- Mix shift to performance pay: 2024 increased PSU weighting to 60% and eliminated options, tying >85% of target CEO comp to performance and long-term value creation .
- Program enhancements post low say-on-pay: 2024 say-on-pay approved by 50.6% vs 97% in 2023; Compensation Committee eliminated one-time awards in 2024, extended PSU performance period to three years, reduced individual MIP weight from 30% to 20% and added disclosure rigor .
- Metrics rigor: 2024 MIP targets required YoY growth (Adjusted EBITDA target +~6%; revenue target +~11%), reflecting challenging yet achievable goals per committee and consultant input .
Compensation Peer Group (Benchmarking)
Peer set used for 2024 decisions included ACHC, AMED, AMN, BKD, CHE, DVA, EHC, ENSG, OMI, PDCO, DGX, SEM, SGRY, Quest; OPCH targets competitive positioning around peer medians; peer group was updated for 2025 benchmarking to reflect sector, size, and competitors (adds: Addus, AdaptHealth, agilon, BrightSpring, Enhabit, Labcorp; removes Brookdale) .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: 50.6% of votes cast; investor engagement reached holders of ~35% of shares; concerns centered on 2023 one-time awards; actions taken included ceasing one-time awards in 2024 and lengthening PSU performance period .
Equity Grants and Vesting Schedules (CEO – 2024 Awards)
| Award Type | Grant Date | Shares/Target | Vesting | Grant-Date Value |
|---|---|---|---|---|
| RSUs | 2/20/2024 | 71,751 | Equal tranches on each of first three anniversaries; final vest Feb 2027 | $2,400,071 |
| PSUs | 2/20/2024 | 107,624 target (50–200% payout) | Performance period FY2024–FY2026; cliff vest Feb 2027 subject to service | $3,600,023 |
Ownership and Outstanding Equity (CEO – As of 12/31/2024)
| Item | Quantity | Strike/Value | Expiration/Notes |
|---|---|---|---|
| Beneficial shares | 621,013 | — | <1% of class; includes 303,072 via options exercisable within 60 days . |
| Options (sample) | 77,388 ex./25,796 unex. | $18.97 | 02/23/2031 . |
| Options | 90,918 ex. | $26.91 | 10/26/2031 . |
| Options | 43,046 ex./43,046 unex. | $23.65 | 02/21/2032 . |
| RSUs (2024 grant) | 71,751 | Market value $1,664,623 | Vesting through Feb 2027 . |
| PSUs (2024 grant) | 107,624 target | Market/payout value $2,496,877 | Vesting Feb 2027 subject to performance . |
Employment Terms – Potential Payments (CEO, Hypothetical as of 12/31/2024)
| Scenario | Severance ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|
| Termination without cause | 3,346,622 | 13,127,163 | 16,473,785 |
| Death or disability | 4,800,000 | 13,127,163 | 17,927,163 |
| CoC + qualified termination (double-trigger) | 5,646,622 | 16,711,292 | 22,357,914 |
Investment Implications
- Alignment high, but watch governance signals: CEO’s pay is predominantly performance-based (PSUs 60%; MIP tied to EBITDA/revenue), backed by clawbacks and strict anti-hedging/pledging, indicating strong alignment; however, the 2024 say-on-pay result (50.6%) highlights investor scrutiny of prior one-time awards and program rigor, which the Board addressed in 2024 .
- Vesting-driven supply risk: Annual RSU vesting and three-year PSU cliffs (Feb 2027) can create episodic selling pressure; trading windows and pre-clearance apply, but investors should monitor Form 4 filings around vesting dates and blackout periods for potential liquidity effects .
- Change-in-control economics: Double-trigger acceleration and 3.0x salary severance for CEO during CoC periods could influence strategic optionality and deal negotiations; outside CoC, pro-rated bonus and partial accelerated vesting provide retention with reasonable guardrails .
- Dual-role oversight: Independence concerns are mitigated by an independent non-executive Chair, fully independent committees, and CEO’s absence from committees and Board compensation discussions; board refreshment and executive sessions support robust oversight .