Michael Tarvin
SELECT MEDICAL HOLDINGSAbout Michael E. Tarvin
Senior Executive Vice President, General Counsel and Secretary of Select Medical Holdings since October 2023; previously Executive Vice President, General Counsel and Secretary (2007–2023), Senior Vice President, General Counsel and Secretary (1999–2007), and Vice President, General Counsel and Secretary (1997–1999). Age 64 as of February 20, 2025; joined the Company (and its predecessor Continental Medical Systems lineage) after serving as Associate Counsel and Vice President—Senior Counsel at Continental Medical Systems and as an associate at Drinker Biddle & Reath LLP (1985–1992). Designated the Company’s Insider Trading Compliance Officer, administering trading policies, blackout windows, and 10b5-1 plan approvals. Company-level performance context: FY2024 EPS $1.66 and TSR value of $100 investment at $131.60; FY2023 EPS $1.91 and TSR $86.03.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Drinker Biddle & Reath LLP | Associate | 1985–1992 | Litigation/corporate legal foundation prior to healthcare industry roles |
| Continental Medical Systems | Associate Counsel; Vice President—Senior Counsel | 1992–1997 | Corporate and healthcare regulatory counsel within SEM’s predecessor ecosystem |
| Select Medical Holdings | VP, GC & Secretary | 1997–1999 | Established corporate legal function post-company formation |
| Select Medical Holdings | SVP, GC & Secretary | 1999–2007 | Expanded governance, contracting, compliance processes |
| Select Medical Holdings | EVP, GC & Secretary | 2007–2023 | Led legal function through growth and capital markets activity |
| Select Medical Holdings | Senior EVP, GC & Secretary | 2023–present | Insider Trading Compliance Officer; governance and trading policy oversight |
Fixed Compensation
| Metric | 2021 | 2022 | 2023 |
|---|---|---|---|
| Base Salary ($) | $520,000 | $520,000 | $520,000 |
Performance Compensation
Annual Bonus Plan Structure and 2023 Outcome
| Metric | Target | Actual | Payout vs Target | Target Bonus (% of Salary) | 2023 Bonus ($) |
|---|---|---|---|---|---|
| Adjusted EPS | $1.90 | $1.99 | 190% | 80% | $790,400 |
| Return on Equity | 17.90% | 19.55% | 190% | 80% | Included above |
Notes:
- Thresholds: EPS $1.84 and ROE 17.54% (below threshold → no bonus) .
- Bonus matrix linked to EPS and ROE; Committee retains downward discretion .
Equity Awards (Time-Based Restricted Stock)
| Grant Date | Shares Granted | Grant Date Fair Value ($) | Vesting | Vesting Start |
|---|---|---|---|---|
| Aug 1, 2023 | 100,000 | $2,992,000 | Equal installments over 3 years, subject to continued employment; pro‑rata upon death/disability/change in control | Aug 1, 2024 |
Stock Vested (Realized)
| Vesting Event | Shares Vested | Value Realized ($) |
|---|---|---|
| July 28, 2023 (2020 grant) and Aug 1, 2023 (2022 grant, partial) | 133,334 | $4,000,353 (at closing price on vest dates) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Feb 1, 2024) | 437,365 shares |
| Shares Outstanding (for % calc) | 128,962,850 (Feb 28, 2025) |
| Ownership % of Outstanding | ~0.34% (437,365 / 128,962,850) |
| Stock Ownership Guidelines | All other NEOs must hold ≥1.5x base salary in shares; re‑calculated annually |
| Guideline Compliance | All NEOs in compliance as of Dec 31, 2024 |
| Post‑Vesting/Exercise Holding | 1‑year holding period (net of tax/exercise shares) |
| Anti‑Hedging | Prohibits hedging instruments (puts, calls, collars, swaps, etc.) |
| Pledging/Margin | Trading policy addresses margin accounts and pledging (Statement of Trading Policies Section II.D) |
| Insider Trading Controls | Tarvin designated Compliance Officer to approve trades and administer blackout periods and 10b5‑1 plans |
Attempted to retrieve Form 4 insider transactions for “Michael Tarvin” during 2024–2025 to assess any selling pressure; the insider-trades skill API returned an authorization error. We searched for insider trades but could not retrieve records due to API access constraints.
Employment Terms
| Provision | Tarvin Terms |
|---|---|
| Employment Status | At‑will; compensation elements subject to annual review by Human Capital & Compensation Committee |
| Change-in-Control Agreement | Yes; if within 5 years post‑CIC (or 6 months pre‑CIC with specified conditions) there is termination without cause, compensation reduction, or relocation beyond 25 miles, lump‑sum equals base salary plus bonus for the previous three completed calendar years; related stock options vest; restricted stock pro‑rata vesting upon qualifying termination after CIC |
| CIC Severance (as of Dec 31, 2023 assumptions) | Cash Severance: $3,390,400; Equity Vesting Value: $3,029,879; Tax Gross-Up Payment: “—” under assumptions (entitlement exists under agreements adopted prior to 2015 policy) |
| “Cause” / “Good Reason” Definitions | “Cause” and “Good Reason” align to Company policy for CIC agreements (material diminution, failure to provide compensation/benefits, relocation beyond defined radius, etc.) |
Compensation Mix (Multi-Year)
| Component ($) | 2021 | 2022 | 2023 |
|---|---|---|---|
| Base Salary | $520,000 | $520,000 | $520,000 |
| Stock Awards (Grant Date Value) | $3,172,800 | $2,971,000 | $2,992,000 |
| Non-Equity Incentive Plan Compensation | $1,040,000 | — (no bonus paid for 2022 per plan outcomes) | $790,400 |
| All Other Compensation | $115,775 | $148,448 | $141,285 |
| Total | $4,848,575 | $3,639,448 | $4,443,685 |
All Other Compensation (2023 breakdown):
- 401(k) match: $4,950; Dividends on unvested RS: $131,667; Physical: $4,668; No personal aircraft usage reported for Tarvin .
Governance and Clawbacks
- Two compensation recoupment policies: 2015 General Recoupment Policy with Board discretion (including equity/option clawback tied to restated periods) and NYSE Rule 10D‑1 Compensation Recovery Policy effective Oct 2, 2023 mandating recovery of erroneously awarded incentive compensation upon restatement; Rule 10D‑1 policy filed as Exhibit 97 to 10‑K .
- Repricing/“buy-outs” of out‑of‑the‑money options or SARs prohibited without stockholder approval .
- Corporate communications and governance routing via the Secretary’s office (Tarvin) for Board/Lead Director correspondence .
Investment Implications
- Strong alignment mechanisms: 1‑year post‑vesting/exercise holding, anti‑hedging prohibition, and stock ownership guidelines with documented compliance by NEOs reduce short‑term selling pressure and support long‑term orientation. Tarvin’s Compliance Officer role further tightens preclearance and blackout adherence, lowering governance risk around trading.
- Pay-for-performance linkage: 2023 bonus tied explicitly to EPS and ROE achieved well above targets (190% payout), while 2022 bonuses were withheld when divisional cost pressures hurt plan outcomes—evidence of formulaic discipline. This reduces discretionary risk and aligns incentives to shareholder value drivers.
- CIC economics: Tarvin’s CIC agreement provides meaningful cash and equity vesting protection under qualifying termination (cash $3.39M; equity vesting value $3.03M under 2023 assumptions). Gross-up entitlement exists under legacy agreements but was not triggered under the assumed scenario—watch for potential 280G exposure in future transactions.
- Ownership: ~0.34% beneficial stake indicates real “skin-in-the-game,” augmented by dividends on unvested restricted stock—however, monitor future Form 4s for any 10b5‑1 sales post‑vesting given mandatory 1‑year holds net of tax.
- Performance context: Company TSR improved materially in 2024 alongside positive EPS, supporting compensation outcomes that remain tied to fundamental metrics; continued capital allocation discipline and cost control in hospitals remain key execution risks for sustaining ROE/ EPS hurdle attainment.