James Ely
SELECT MEDICAL HOLDINGSAbout James S. Ely III
Independent director of Select Medical Holdings (SEM) since 2008; age 67. Ely is Chief Executive Officer of PriCap Advisors LLC (founded 2009) and previously served as a Managing Director in syndicated and leveraged finance at J.P. Morgan Securities (2001–2008) and in global syndicated finance at Chase/Chemical Securities (1995–2000). He chairs SEM’s Audit and Compliance Committee and is designated an audit committee financial expert; he also serves on SEM’s Nominating, Governance & Sustainability Committee. Ely is a director of Community Health Systems, Inc. (CHS).
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| J.P. Morgan Securities Inc. | Managing Director, Syndicated & Leveraged Finance | 2001–2008 | Structured/arranged healthcare sector loans and high yield; deep capital markets expertise |
| Chase Securities/Chemical Securities | Managing Director, Global Syndicated Finance | 1995–2000 | Led financing transactions; healthcare financing exposure |
| PriCap Advisors LLC | Founder & CEO | 2009–present | Investment/strategic advisory leadership |
External Roles
| Organization | Role | Tenure | Committees/Focus |
|---|---|---|---|
| Community Health Systems, Inc. | Director | Current | Service includes audit and compliance oversight experience relevant to healthcare ERM and IT security |
Board Governance
- Committee assignments: Chair, Audit & Compliance; Member, Nominating, Governance & Sustainability. Audit committee met five times in 2024; Nominating met four times. All members of both committees are NYSE-independent; all Audit members qualify as SEC “financial experts.”
- Independence: Board determined Ely is independent (8 of 10 directors independent).
- Attendance and engagement: The Board met five times in 2024; every director attended at least 75% of Board meetings and all meetings of committees on which they served; all directors attended the 2024 annual meeting. Independent directors hold regular executive sessions.
- Lead independent director: Russell L. Carson.
Fixed Compensation (Non-Employee Director, FY2024)
| Component | Detail | Amount (USD) |
|---|---|---|
| Quarterly cash retainer + meeting/committee fees | “Fees Earned” (cash) | $116,600 |
| Equity grant (time-based RS) | Grant on 4/30/2024 (10,000 shares), 1-year vest | $283,700 |
| Total | Fees + Stock Awards | $400,300 |
| Form of receipt (fees) | Cash vs. stock election for fees | Ely took 100% in cash; 0 shares for fees |
| Unvested director RS outstanding (12/31/2024) | 10,000 shares | 10,000 |
Notes:
- Standard director equity for 2024: 10,000 restricted shares granted 4/30/2024, vesting 4/30/2025.
- Director fee schedule includes per-meeting fees by committee; Audit carries the highest meeting fees given oversight scope.
Performance Compensation
Directors do not receive performance-based pay; SEM uses time-based restricted stock for directors (no options/PSUs).
| Element | Terms | Performance Metric |
|---|---|---|
| Annual RS grant | 10,000 RS shares granted 4/30/2024; vests on first anniversary | None (time-based only) |
| Cash incentives/bonuses | Not applicable to non-employee directors | None |
2025 policy up for stockholder approval would codify annual director equity at $200,000 (RS value) and a $72,000 annual cash retainer (ex-meeting fees). Submission followed resolution of a stockholder demand regarding 2022–2024 director pay; board recommends approval.
Other Directorships & Interlocks
| Company | Relationship to SEM | Potential Interlock Consideration |
|---|---|---|
| Community Health Systems, Inc. | Public company board on which Ely serves | Same sector (healthcare services); no SEM-related transactions disclosed involving Ely. – |
Expertise & Qualifications
- Capital markets/healthcare finance expertise from senior roles at J.P. Morgan and Chase/Chemical; brings syndicated loan/high yield knowledge relevant to debt structure and liquidity assessments.
- Audit committee financial expert; qualified for complex financial reporting oversight, ERM, cybersecurity/IT controls in healthcare.
- Governance experience across healthcare boards, including CHS audit and compliance oversight.
Equity Ownership
| Metric | Value |
|---|---|
| Total beneficial ownership (SEM common) | 147,639 shares (<1%) |
| Unvested RS (12/31/2024) | 10,000 shares |
| Ownership guidelines (directors) | Minimum 5x annual cash compensation (ex-meeting fees); status: all directors met or had time remaining as of 12/31/2024 |
| Reference price (12/31/2024) | $18.85 per share (used in company equity valuations) |
Using 12/31/2024 reference price of $18.85, Ely’s beneficial stake had an indicative value of ~$2.78 million (147,639 × $18.85), far exceeding the ~5× $72,000 = $360,000 guideline threshold.
Policies:
- Anti-hedging: Directors prohibited from hedging SEM securities.
- Pledging: No specific pledging disclosure; not referenced in proxy.
Governance Assessment
Strengths
- Independent director; chairs Audit & Compliance and serves on Nominating—key oversight levers for financial integrity, risk, ESG, and board refreshment. All audit members are “financial experts,” enhancing credibility with investors and auditors.
- Strong engagement: Board/committee attendance thresholds met; audit met five times in 2024; directors attend annual meetings and hold regular executive sessions.
- Alignment: Meaningful stock ownership and time-based equity; anti-hedging policy; director ownership guidelines in place.
- Shareholder responsiveness: Board seeking stockholder approval of a formal non-employee director compensation policy and eliminating supermajority provisions—positive governance signals.
Considerations / Watch items
- Related-party transactions at SEM involve leases and aircraft arrangements tied to the Executive Chairman’s entities—not Ely specifically—but Audit (which Ely chairs) oversees and requires independent appraisals and approval by non-interested directors. Continued rigorous oversight and disclosure are essential.
- Director pay scrutiny: The 2025 policy proposal followed resolution of a stockholder demand related to non-employee director compensation in 2022–2024. Approval and ongoing benchmarking can mitigate perceived pay risk.
Overall implication: Ely’s audit leadership, sector finance expertise, independence, and ownership alignment support board effectiveness and investor confidence, while ongoing vigilance around related-party oversight and transparent director pay governance remains important.