Michael Bavaro
Option Care HealthAbout Michael Bavaro
Michael Bavaro, age 47 as of March 18, 2025, serves as Chief Human Resources Officer (since March 2022) and Chief Diversity Officer (since August 2020) at Option Care Health; he previously was Vice President of Human Resources from December 2015 to March 2022 . He holds a B.S. in Nuclear Engineering Technology (Thomas Edison State University) and an MBA (Keller Graduate School of Management at DeVry University); his prior experience includes roles at Blue Cross and Blue Shield, Career Education Corporation, and United Airlines, and he is a Navy veteran and retired Air Force Captain (as of January 2025) . Company performance during his leadership period includes FY2024 revenue of $4,998.2M (+16.2% YoY) and Adjusted EBITDA of $443.8M (+4.4% YoY); the pay‑versus‑performance table shows FY2024 “compensation actually paid” alignment metrics used at OPCH including TSR and Adjusted EBITDA as the company-selected measure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Option Care Health | Chief Human Resources Officer | Mar 2022–present | Leads human resources and communications functions; drove reduction in employee voluntary turnover and enhanced senior leadership succession in 2023 . |
| Option Care Health | Chief Diversity Officer | Aug 2020–present | Oversees DEI efforts alongside CHRO responsibilities . |
| Option Care Health | Vice President of Human Resources | Dec 2015–Mar 2022 | Built HR infrastructure supporting growth; internal promotion to CHRO . |
| Blue Cross and Blue Shield | Various roles | Not disclosed | Prior HR/leadership roles (details not disclosed) . |
| Career Education Corporation | Various roles | Not disclosed | Prior HR/leadership roles (details not disclosed) . |
| United Airlines | Various roles | Not disclosed | Prior HR/leadership roles (details not disclosed) . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Air Force Reserve | Equal Opportunity Officer, Grissom AFB (retired as Captain) | Through Jan 2025 | Provided EO leadership for ~1,500 personnel; brings disciplined, compliance-oriented leadership to OPCH . |
| U.S. Navy | Active duty and reserve veteran | Not disclosed | Military leadership experience (details not disclosed) . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 |
|---|---|---|
| Base Salary ($) | $325,000 | $415,000 |
| MIP Target (% of Base) | 65% | 65% |
| One-time Transaction Bonus ($) | — | $50,000 (Amedisys termination-related recognition) |
Performance Compensation
| Program | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Incentive (MIP) – FY2023 | Company performance (Adjusted EBITDA) | 70% | Not disclosed | Achieved; formulaic payout 185% of target for this component | 185% | Cash (paid Feb 2024) |
| Annual Cash Incentive (MIP) – FY2023 | Individual leadership goals | 30% | Defined at start of year | Bavaro achievements: reduced voluntary turnover, cultural awards, succession process | 188%–200% range; Bavaro’s total MIP payout 188% of target | Cash (paid Feb 2024) |
| Long-Term PSUs (granted Feb 22, 2023) | 2-yr average CFO growth (50%) & combined revenue + Adjusted EBITDA growth (50%) | 100% | Threshold/Target/Max disclosed in aggregate | Final performance exceeded target; FY2023–FY2024 period results led to 166% of target vesting | 166% of target | Earned PSUs vest after additional 1-year service; expected vest Feb 2026 |
| Long-Term RSUs (granted Feb 22, 2023) | Service-based | — | — | — | — | 25% vest annually over 4 years (2024–2027) |
| Supplemental RSUs (granted Feb 22, 2023) | Retention-focused | — | — | — | — | Cliff vest in full on third anniversary (Feb 22, 2026) |
| Stock Options (granted Feb 22, 2023) | Service-based | — | — | — | — | 25% vest annually over 4 years; 10-year term; strike $28.86 |
| FY 2023 MIP Outcome (Bavaro) | Target Award ($) | Actual Award ($) | Actual as % of Target |
|---|---|---|---|
| Annual Cash Incentive | $269,750 | $507,130 | 188% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 1, 2024) | 5,765 shares; <1% of class . |
| Stock Ownership Guidelines | CEO 5x salary; other NEOs 3x salary; must retain 75% of net shares until compliant; PSUs excluded from guideline counting . |
| Compliance Status | As of Dec 31, 2024, each NEO was in compliance or making appropriate progress . |
| Hedging/Pledging | Prohibited for any NEO; no short sales, hedging or pledging . |
| Clawback Policy | Dodd-Frank clawback plus supplemental policy for misconduct; allows recovery from NEOs and senior management . |
| Pension/SERP | None; no pension or supplemental executive retirement benefits . |
Outstanding equity detail (as of Dec 31, 2023 snapshot; market values at $33.69 close):
- Options (selected grants): 2,452 exercisable + 2,452 unexercisable @ $18.97 exp 02/23/2031; 8,974 unexercisable @ $25.75 exp 10/21/2031; 2,153 exercisable + 6,459 unexercisable @ $23.96 exp 02/17/2032; 15,907 unexercisable @ $28.86 exp 02/22/2033; 9,544 unexercisable @ $28.86 exp 02/22/2033 .
- RSUs outstanding and market values: 1,252 ($42,180), 3,107 ($104,675), 3,327 ($112,087), 8,663 ($291,856), 5,200 ($175,188), 17,738 ($597,593) .
- PSUs outstanding (unearned): 10,396 target ($350,241 payout value basis) .
Grants of plan-based awards (Feb 22, 2023):
| Grant Type | Grant Date | Shares/Units | Strike | Expiration | Vesting |
|---|---|---|---|---|---|
| PSUs (target) | 02/22/2023 | 10,396 (threshold 5,198; max 20,792) | — | — | Performance over 2023–2024, then service to 2026 . |
| RSUs (annual) | 02/22/2023 | 5,200 | — | — | 25% annually over 4 years . |
| RSUs (supplemental) | 02/22/2023 | 8,663 | — | — | Cliff vest Feb 22, 2026 . |
| Options (annual) | 02/22/2023 | 9,544 | $28.86 | 02/22/2033 | 25% annually over 4 years . |
| Options (supplemental) | 02/22/2023 | 15,907 | $28.86 | 02/22/2033 | Cliff vest Feb 22, 2026 . |
Insider exercises and vesting:
| 2023 Activity | Shares | Value Realized ($) |
|---|---|---|
| Options exercised | 4,605 | $48,848 |
| RSUs vested | 2,361 | $72,521 |
Employment Terms
| Provision | Terms |
|---|---|
| Executive Severance Plan (as of Dec 31, 2023) | If terminated without cause during the 12 months following a change in control while actively at work or on approved leave: 12 months base salary, prorated bonus for the year, and cash equal to 12 months of COBRA . |
| Change-in-Control Mechanics | “Double-trigger” provisions for all NEOs (CIC plus qualifying termination required for accelerated benefits) . |
| Equity Treatment on CIC | Certain option awards may fully vest upon a change in control; PSUs/RSUs acceleration terms disclosed in proxy (company tables) . |
| Clawback & Gross-ups | Dodd-Frank clawback plus supplemental clawback; no excise tax gross-ups for severance/perquisites . |
| Non-compete / Non-solicit / Garden leave | Not disclosed. |
Performance & Track Record
- 2023 achievements: reduced employee voluntary turnover, improved talent acquisition efficiency, earned multiple external cultural and engagement awards, enhanced senior leadership succession process .
- Company performance context: FY2024 revenue $4,998.2M (+16.2% YoY), Adjusted EBITDA $443.8M (+4.4% YoY), net income $211.8M; FY2023 Adjusted EBITDA was $425.2M (+24.0% YoY per proxy context), revenue $4,302.3M .
- Pay-versus-performance alignment: OPCH highlights Adjusted EBITDA as the most important measure linking compensation actually paid to performance; TSR tracked vs S&P Health Care Services Select Industry Index peer group .
Compensation Structure Analysis
- Shift toward performance equity: 2024 LTI mix increased PSUs to 60% and eliminated options to strengthen pay-for-performance; PSUs now on a 3-year performance period with vest at 3 years, increasing rigor and retention versus 2023’s 2-year performance + 1-year service .
- One-time awards response: 2023 supplemental equity grants (including Bavaro) with 3-year cliff vest were designed to close peer equity gaps and retention risk; in 2024, the Compensation Committee granted no one-time awards following shareholder feedback .
- Annual incentive rigor: 2024 MIP included an Incentive EBITDA funding threshold ($452M; actual $470M) and dual OPCH targets (Adjusted EBITDA 50% and revenue 30%) plus 20% individual component, with formulaic payout of ~89% for OPCH targets; disclosure improved after investor engagement .
Equity Ownership & Alignment (Risk Indicators)
- Alignment positives: robust ownership guidelines with 75% net share retention until compliant; anti-hedging/anti-pledging policy; double-trigger CIC; clawbacks; no pension/SERP .
- Selling pressure windows: concentrated vest dates in 2026 (supplemental RSUs and options cliff vest on Feb 22, 2026; 2023 PSUs vest after service in 2026), which may create event-driven liquidity windows if awards are realized .
- Ownership scale: beneficial ownership of 5,765 shares (<1%) suggests limited direct voting/economic influence but compliance/retention provisions support alignment .
Employment Terms (Economics & Triggers)
| Scenario (as of Dec 31, 2023) | Cash Severance | Bonus Treatment | Benefits | Equity |
|---|---|---|---|---|
| Without cause within 12 months after CIC | 12 months base salary | Prorated bonus | Cash equal to 12 months COBRA | Certain awards accelerate per plan (see proxy equity tables) . |
Investment Implications
- Retention strong near-term: 2023 supplemental awards with 3-year cliff vest and PSUs with 3-year total vest create meaningful retention hooks into Feb 2026; reduced likelihood of voluntary departure before these vesting events .
- Pay-for-performance credibility improved: 2024 shift to 60% PSUs, elimination of options, and disclosure of MIP funding thresholds/dual financial targets address prior shareholder concerns; enhances alignment with revenue and EBITDA growth drivers .
- Potential selling overhang in 2026: Multiple tranches vesting in Feb 2026 (supplemental RSUs/options; earned 2023 PSUs post-service) may create supply; watch Form 4s around those dates and trading windows .
- Risk controls robust: No hedging/pledging, double-trigger CIC, clawbacks, and ownership guidelines mitigate governance red flags; absence of pension/SERP limits fixed obligations .
- Performance linkage: MIP and PSU metrics centered on Adjusted EBITDA, cash flow from operations growth, and revenue growth—tracking these KPIs (and TSR) remains key for forecasting realized comp and potential insider liquidity .