John J. Gochnour
About John J. Gochnour
John J. Gochnour, age 42, serves as President and Chief Operating Officer of The Pennant Group. He was appointed COO at Pennant’s formation in 2019 and President on August 1, 2022. He oversees nationwide operations and leads Cornerstone Healthcare (home health and hospice), contributing to organic and inorganic growth, strong clinical quality, and financial performance; he previously served as EVP & General Counsel of Cornerstone and began his career as an attorney at Paul Hastings LLP. Gochnour holds a J.D. from Duke University School of Law . Pay-versus-performance disclosure highlights company performance metrics central to executive pay, including Adjusted Net Income (selected as most important), Adjusted EBT, segment Adjusted EBITDAR, Adjusted EBITDA, clinical quality, and leadership development .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Pennant Group | Chief Operating Officer | 2019–present | Oversees operations nationwide; leads Cornerstone Healthcare segment |
| The Pennant Group | President | Aug 1, 2022–present | Drives strategic growth and execution across clinical, cultural, and financial dimensions |
| Cornerstone (pre-Pennant) | EVP & General Counsel | Jan 2013–2019 | Led acquisition sourcing, negotiation, and integration across 12 states; founded Cornerstone Service Center (finance, legal, HR, IT support) |
| Paul Hastings LLP | Attorney | Prior to 2013 | Litigated complex civil matters; advised on risk management and employment issues |
External Roles
- No external public-company directorships disclosed in the proxy .
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 273,541 | 316,668 | 344,711 |
| All Other Compensation | 9,941 | 8,713 | 9,461 |
| All Other Compensation — Detail (Car Allowance) | — | — | 7,177 |
| All Other Compensation — Detail (Tax Prep) | — | — | 1,285 |
| All Other Compensation — Detail (Other Benefits) | — | — | 999 |
Performance Compensation
Annual Incentives (Non-Equity Incentive Plan)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-Equity Incentive Plan Compensation | 458,702 | 800,000 | 1,250,000 |
2024 Executive Bonus Program Allocation (Cash vs Stock)
| Component | 2024 Amount ($) |
|---|---|
| Cash bonus | 1,250,000 |
| Restricted stock (fully vested under policy) | 83,338 |
| Notes | Bonus pool $4.0M; above stated amount threshold, incremental incentives split 50% cash / 50% fully vested RS |
Performance Metrics and Mechanics
| Metric | Weighting | Target | Actual | Payout Impact | Vesting |
|---|---|---|---|---|---|
| Adjusted Net Income; Adjusted EBT; Adjusted EBITDA; Segment Adjusted EBITDAR; Clinical Quality; Leadership Development | Not disclosed | Formula-based AEBT thresholds (see below) | Achieved bonus pool $4.0M | Cash + RS allocated by Committee discretion based on financial, clinical, governance contributions | RS awards tied to bonus above threshold are fully vested; other stock awards generally 5-year ratable vesting |
2024 Bonus Pool Formula (AEBT, non-GAAP): Up to $15.6M → $0; tiers increasing 5%–15% rates; above $20.6M → $0.4M + 15% of excess; adjustments for YoY change in AEBT difficulty .
Long-Term Equity Awards (Grants)
| Grant Date | Award Type | Quantity | Exercise Price ($) | Expiration | Grant-Date FV ($) |
|---|---|---|---|---|---|
| 3/4/2024 | Stock Options | 40,000 | 18.79 | 3/4/2034 | 370,684 |
| 3/3/2025 | Restricted Stock (bonus RS) | 3,699 | — | — | 83,338 |
Outstanding Equity Awards (FY-end 2024)
| Type | Grant Date | Exercisable (#) | Unexercisable (#) | Strike ($) | Expiration | Unvested RSUs (#) | RSUs MV ($) |
|---|---|---|---|---|---|---|---|
| Options | 3/4/2024 | — | 40,000 | 18.79 | 3/4/2034 | — | — |
| Options | 8/22/2023 | 1,400 | 5,600 | 12.52 | 8/22/2033 | — | — |
| Options | 2/28/2023 | 9,000 | 36,000 | 15.02 | 2/28/2033 | — | — |
| RS (Unvested) | 7/25/2022 | — | — | — | — | 24,000 | 636,480 |
2024 Realizations (Exercise/Vesting)
| Metric | 2024 |
|---|---|
| Options exercised (shares) | 50,283 |
| Value realized on option exercises ($) | 652,504 |
| Restricted stock vested (shares) | 8,000 |
| Value realized on vesting ($) | 233,680 |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Shares outstanding (Mar 18, 2025) | 34,431,889 |
| Shares owned directly (Gochnour) | 127,964 |
| Options exercisable within 60 days | 202,763 |
| Total beneficial ownership (shares) | 330,727 |
| Ownership % of outstanding | “*” (less than 1%) |
| Hedging | Prohibited without pre-approval; anti-hedging policy in Insider Trading Policy |
| Pledging | Not disclosed |
| Ownership guidelines (executives) | Not disclosed; director program requires holding 33% of cumulative director grants (director policy) |
Equity award design: Options and restricted stock generally vest over 5 years (20% annually); options typically have 10-year max term; awards approved at scheduled meetings; exercise price = fair market close on grant date .
Deferred Compensation (DCP)
| Item | 2024 |
|---|---|
| Prior-year aggregate balance (12/31/2023, $) | 72,443 |
| Executive contributions ($) | 400,000 |
| Aggregate earnings ($) | 43,381 |
| Aggregate balance (12/31/2024, $) | 515,824 |
Employment Terms
- Employment agreements: NEOs do not have employment agreements .
- Severance / Change-in-control: No arrangements providing for payments/benefits upon resignation, severance, retirement, termination, or change in control; Compensation Committee may accelerate vesting of options/RS in certain circumstances subject to plan terms .
- Clawback: Policy adopted to recover incentive-based compensation upon restatement or when subsequent events diminish performance metrics (including clinical results), compliant with SEC/Nasdaq rules .
- Insider Trading Policy: Filed as Exhibit 19.1 to 2024 Form 10-K; hedging/monetization transactions prohibited absent pre-approval; grant timing not coordinated with MNPI; awards historically granted on predetermined schedule .
- Other benefits: Eligible for standard benefits; executives may receive auto allowances and tax services .
Performance & Track Record
TSR vs Peer Group (Year-end value of $100 invested on 1/1/2020)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Pennant Group | 176 | 70 | 33 | 42 | 80 |
| Industry Peer Group | 130 | 103 | 92 | 106 | 117 |
Financial Outcomes (Company Level)
| Metric ($mm) | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income | 16 | 2 | 7 | 14 | 24 |
| Adjusted Net Income | 23 | 14 | 17 | 22 | 30 |
Role impact: As President & COO, Gochnour led Cornerstone operations and contributed to acquisitions integration and service center build-out, supporting clinical quality and financial performance .
Compensation Structure Analysis
- Pay mix trend: Significant at-risk pay via annual non-equity incentives tied to AEBT/Adjusted Net Income and qualitative clinical/governance metrics; long-term equity via options with multi-year vesting and periodic restricted stock grants .
- Equity form shift: Company historically favors stock options and less frequently restricted stock; 2024 introduced fully vested RS elements tied to exceeding the executive bonus threshold, increasing immediate equity realizations for high performance years .
- Governance safeguards: Anti-hedging policy, clawback policy, discretionary downward adjustments if clinical/governance metrics not met, and no severance/change-in-control cash benefits (limits pay inflation/entrenchment) .
Related Party Transactions
- No related person transactions involving Gochnour are disclosed; 2024 related party disclosures list relationships involving the CEO’s sister and the General Counsel’s brother-in-law, with no other transactions >$120,000 beyond compensation arrangements .
Compensation Committee Analysis
- Committee members: Dr. John G. Nackel (Chair), Stephen M. R. Covey, JoAnne Stringfield; all independent; six meetings in 2024, including five executive sessions without management; oversees executive compensation and equity plan administration .
- Consultant independence process: Committee may retain advisers subject to independence assessment per Nasdaq/SEC rules .
Investment Implications
- Alignment: Strong pay-for-performance architecture anchored to AEBT and Adjusted Net Income with clinical and governance overlays; significant at-risk pay and multi-year vesting promote long-term orientation .
- Retention risk: Absence of employment agreements and severance/change-in-control cash benefits lowers entrenchment but could elevate retention risk; offset by substantial equity holdings and long-term awards that vest over five years .
- Selling pressure signals: 2024 realized value on option exercises ($652,504) and vested RS ($233,680) indicate monetization capacity; however, value realized does not necessarily mean open-market share sales and should be monitored via Form 4 filings for actual selling pressure .
- Ownership alignment: Direct and option-based beneficial ownership (330,727 shares) with anti-hedging constraints supports alignment; no pledging policy disclosed and ownership <1% limits governance leverage, but broad executive equity culture is emphasized .
- Performance consistency: Recovery in 2024 Net Income and Adjusted Net Income paired with improved TSR vs prior years (though still trailing peer group) suggests operational execution improvement under current leadership, including Gochnour’s role over Cornerstone .