David Chernow
SELECT MEDICAL HOLDINGSAbout David S. Chernow
David S. Chernow, 67, is Chief Executive Officer of Select Medical Holdings Corporation and has served as a director since August 2024. He previously served as President and CEO of Select Medical (2014–Oct 2023), and earlier led Oncure Medical Corp and JA Worldwide; he also held senior roles at US Oncology and co‑founded American Oncology Resources. He is a management director (not independent), with approximately 0.7 years of board tenure as of the 2025 proxy filing .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Select Medical Holdings Corporation | President & CEO | Jan 2014 – Oct 2023 | Led culture, joint venture and development efforts, contributing to significant growth |
| Oncure Medical Corp. | President & CEO | Not disclosed | Executive leadership in oncology services |
| JA Worldwide (Junior Achievement) | President & CEO | Not disclosed | Nonprofit leadership and governance experience |
| US Oncology, Inc. | President, Physician Services Group | 1999–2001 | Physician services operations leadership |
| American Oncology Resources | Co‑founder; Chief Development Officer | Not disclosed | Co‑founder; growth and development leadership |
External Roles
No current public-company directorships disclosed for Chernow. Prior leadership roles noted above; no current external board committee roles are listed .
Board Governance
- Independence: Chernow is one of two non‑independent directors; the board determined eight of ten directors are independent (list excludes Chernow) .
- Committee memberships: Not listed as a member on any standing committees (Audit & Compliance; Human Capital & Compensation; Nominating, Governance & Sustainability; Quality of Care and Patient Safety) .
- Board attendance: The board met 5 times in 2024; each director attended at least 75% of board meetings and all committees of which they were a member; all directors attended the 2024 annual meeting .
- Leadership structure: Board led by Executive Chairman Robert A. Ortenzio and CEO David S. Chernow; Lead Independent Director is Russell L. Carson .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $995,000 | $995,000 | $995,000 |
| All Other Compensation ($) | $357,979 | $340,765 | $304,133 |
| All Other Compensation – Breakdown (2024) | |||
| 401(k) Matching ($) | $5,175 | ||
| Personal Use of Aircraft ($) | $11,393 | ||
| Dividends on Unvested Restricted Stock ($) | $282,916 | ||
| Physical Exam ($) | $4,649 |
Performance Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-Equity Incentive Plan Compensation ($) | — | $1,890,500 | $2,487,500 |
| Stock Awards – Grant Date Fair Value ($) | $7,427,500 | $7,480,000 | $6,525,100 |
Performance metrics and outcomes (2024):
- Bonus Plan Metrics: EPS and Return on Equity (ROE); target EPS $1.88, max $2.07; target ROE 16.40%, max 17.22%; payout matrix up to 250% of target .
- Actual 2024 Results: Adjusted EPS $2.28; ROE 19.1%; payout at 250% of target (Chernow bonus $2,487,500) .
| 2024 Bonus Plan | Target | Maximum | Actual | Payout |
|---|---|---|---|---|
| EPS ($) | $1.88 | $2.07 | $2.28 | 250% of target |
| ROE (%) | 16.40% | 17.22% | 19.1% | 250% of target |
Equity awards and vesting:
- 230,000 restricted shares granted 4/30/2024; fair value $6,525,100; time-based vesting in three equal annual tranches (starting 4/30/2025); partial accelerated vesting tied to Concentra spin-off .
Other Directorships & Interlocks
No current public-company directorships disclosed for Chernow. Notable board interlocks at SEM include Executive Chairman Robert A. Ortenzio and Director Daniel J. Thomas on Concentra’s board; Ortenzio owns ~6.4% of Concentra .
Expertise & Qualifications
- Healthcare leadership: 20+ years as CEO/President in healthcare organizations (Select Medical, Oncure Medical, US Oncology) .
- Strategic and operational management: Extensive experience in strategic, financial, and operational aspects of healthcare companies .
Equity Ownership
| Holder | Beneficial Shares | % Outstanding |
|---|---|---|
| David S. Chernow | 939,516 | <1% |
Unvested restricted stock detail (as of 12/31/2024):
| Grant Date | Unvested Shares | Market Value ($) |
|---|---|---|
| 4/30/2024 | 153,333 | $2,890,327 |
| 8/01/2023 | 111,111 | $2,094,442 |
| 8/01/2022 | 55,555 | $1,047,212 |
Ownership alignment policies:
- Executive stock ownership guideline: CEO required to hold ≥3.0x base salary; all NEOs satisfied guidelines as of 12/31/2024 .
- Anti‑hedging policy: Prohibits hedging transactions for employees and directors .
Governance Assessment
- Independence and committees: Chernow is a management director and not independent; he is not seated on key oversight committees, which are wholly independent—this supports separation of management from committee oversight .
- Pay-for-performance alignment: Variable pay is tied to EPS and ROE; 2024 adjustments excluded spin-off and debt extinguishment effects and yielded maximum payouts (250% of target). Time-based RS grants dominate long-term equity (vs PSUs), which reduces direct performance linkage but may stabilize retention amid Medicare rate volatility .
- Perquisites: Significant dividends on unvested RS (~$283k in 2024) and limited personal aircraft use; disclose and taxable, but dividends on unvested stock increase fixed-like pay regardless of performance .
- Clawbacks: General recoupment policy (2015) and Rule 10D‑1 compensation recovery policy (effective Oct 2, 2023) materially strengthen pay risk controls .
- Contracts and severance: Employment agreement (2010) auto‑renews; non‑compete (2 years, 50‑mile scope), non‑solicit provisions; change‑in‑control benefits equal to base salary plus prior three-year bonuses; tax gross‑up benefits apply for certain NEOs (red flag for shareholder friendliness) .
- Related‑party environment: The company pays ~$7.6M annual rent to partnerships controlled by Executive Chairman Ortenzio (with third‑party appraisals and board approvals); Select paid $128,090 to Ortenzio under the NetJets agreement; both are reviewed by non‑interested directors but represent ongoing conflict risk managed via process .
- Shareholder signals: Say‑on‑pay support remained high in 2024 (106,777,980 for; 14,125,946 against; 42,832 abstentions; 2,545,553 broker non‑votes; ~88% support), indicating investor acceptance of the compensation program .
Committee Assignment Snapshot (Chernow)
| Committee | Membership | Chair |
|---|---|---|
| Audit & Compliance | Not a member | James S. Ely III |
| Human Capital & Compensation | Not a member | Daniel J. Thomas |
| Nominating, Governance & Sustainability | Not a member | Marilyn B. Tavenner |
| Quality of Care & Patient Safety | Not a member | William H. Frist |
Say‑on‑Pay (2024)
| Votes For | Votes Against | Abstentions | Broker Non‑Votes |
|---|---|---|---|
| 106,777,980 | 14,125,946 | 42,832 | 2,545,553 |
Key Contract Terms and Risk Controls
- Employment Agreement: Three-year term auto‑extends; non‑renewal notice allowed; 12 months base salary severance upon termination without cause (outside change‑in‑control), paid beginning month seven post‑termination (subject to release) .
- Change‑in‑Control: Lump sum equal to base salary plus bonus for previous three calendar years; immediate vesting of stock options (legacy); tax gross‑up may apply (red flag) .
- Clawbacks: General policy (2015) and Rule 10D‑1 policy (effective 10/2/2023) for restatements .
RED FLAGS
- Tax gross‑up on change‑in‑control for certain executives (including Chernow) remains in effect under legacy agreements (policy prohibits adding to future agreements) .
- Time‑based RSU/RS focus versus performance‑vested equity reduces direct long‑term performance linkage; dividends on unvested stock add fixed‑like compensation .
- Ongoing related‑party lease payments to Executive Chairman–affiliated partnerships and NetJets arrangement with Executive Chairman increase perceived conflict exposure, though subject to approvals and appraisals .
Notes on Director Compensation Structure (Context)
Non‑employee directors receive quarterly cash retainers, meeting fees, and annual restricted stock grants (e.g., 10,000 shares to each non‑employee director on 4/30/2024; proposed policy sets $200,000 annual RS awards and $72,000 cash retainers), with stock ownership guideline ≥5x annual cash compensation (excluding meeting fees) .