Russell Carson
SELECT MEDICAL HOLDINGSAbout Russell L. Carson
Russell L. Carson, age 81, is an independent director of Select Medical Holdings Corporation (SEM) and has served on the Company’s board since 2005, after previously serving on Select’s board since 1997 . He was elected Lead Independent Director in 2015 and continues to serve in that role with responsibilities including presiding over executive sessions, agenda-setting, and direct availability to significant stockholders . Carson co-founded Welsh, Carson, Anderson & Stowe (WCAS) in 1978 and has been a General Partner since 1979, focusing on healthcare investments; he previously served as Chairman and CEO of Citicorp Venture Capital Ltd. from 1974–1978 . The Board affirmatively determined that Carson is independent under NYSE standards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Citicorp Venture Capital Ltd. (subsidiary of Citigroup) | Chairman & CEO | 1974–1978 | Led venture capital operations |
| Welsh, Carson, Anderson & Stowe | Co-Founder; General Partner | Co-founded 1978; GP since 1979 | Focused on healthcare investments; firm has raised >$30B across 18 funds and invested in >250 companies |
| Select (predecessor entity) | Director | Since 1997 | Board service preceding SEM formation |
| Select Medical Holdings Corporation (SEM) | Director; Lead Independent Director | Director since 2005; Lead Director since 2015 | Lead Independent Director; presides over executive sessions of independent directors |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Welsh, Carson, Anderson & Stowe | General Partner | Since 1979 | Private equity firm specializing in healthcare |
| Carson Family Charitable Trust | Chairman | Not disclosed | Oversees family philanthropy |
Board Governance
- Independence: Determined independent by the Board under NYSE rules .
- Lead Independent Director: Elected in 2015; duties include presiding at executive sessions, liaising between Chair and independent directors, agenda/schedule approvals, calling meetings of independent directors, and direct communication with significant stockholders .
- Committee Assignments: Member, Nominating, Governance and Sustainability Committee (chair: Marilyn B. Tavenner) which held four meetings in 2024; Carson is not listed on the Audit and Compliance Committee or the Human Capital and Compensation Committee .
- Attendance: Board met five times in 2024; each director attended at least 75% of Board meetings and all meetings of committees of which they were a member; all directors attended the 2024 annual meeting of stockholders .
- Term/Classification: Class I Director; term expiring at the 2025 Annual Meeting (nominee for re-election) .
Fixed Compensation
| Component | 2024 Actuals | Policy Framework (submitted for shareholder approval) | Notes |
|---|---|---|---|
| Quarterly Board Retainer (cash) | $18,000 per quarter | $18,000 per quarter; option to receive in fully-vested shares | Attendance fees also apply |
| Board Meeting Attendance (in-person/telephonic) | $3,000 / $600 per meeting | Same structure retained | Applies per meeting |
| Committee Attendance – Audit & Compliance | $4,000 in-person with Board; $5,000 independent; $2,000 telephonic | Same | Structured by meeting context |
| Committee Attendance – Nominating | $1,500 in-person with Board; $2,000 independent; $500 telephonic | Same | |
| Committee Attendance – Human Capital & Compensation | $1,500 in-person with Board; $2,000 independent; $500 telephonic | Same | |
| Fees Earned (2024) | $85,700 (Carson) | N/A | See split below |
| Form of Receipt (2024 fees) | Paid entirely in cash; no stock election | Optional cash or stock retainer election | Carson did not elect stock |
Performance Compensation
| Equity Award Detail | Grant Date | Shares (#) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Restricted Stock (2024 annual grant to all non-employee directors) | April 30, 2024 | 10,000 | $283,700 (Carson’s reported 2024 stock awards) | Time-based; vests in full on first anniversary |
| Director Equity Grant Policy (prospective) | N/A | N/A | $200,000 annual equity grant under proposed policy | As per Policy submitted for shareholder approval |
- Stock Ownership Guidelines (Directors): Required to own shares equal to at least 5x annual cash compensation (excluding attendance fees); as of Dec 31, 2024 all directors satisfied or had time remaining to comply .
Other Directorships & Interlocks
| Person | External Affiliation | Interlock Type | Relevance |
|---|---|---|---|
| Russell L. Carson | WCAS General Partner | Private equity sponsor tie | Brings healthcare investment expertise; potential sponsor-related optics |
| Thomas A. Scully (SEM Director) | WCAS General Partner | Board-level interlock with WCAS | Two WCAS partners on SEM Board; considered independent by Board |
- No related-party transactions involving Carson or WCAS are disclosed in the “Certain Relationships” section of the proxy; material related transactions disclosed pertain to NetJets arrangement with Executive Chairman Robert A. Ortenzio and separation/spin-off of Concentra .
Expertise & Qualifications
- The Board cites Carson’s extensive healthcare investment experience, deep knowledge of healthcare regulatory and competitive dynamics, and insight on governance and compensation matters as reasons for continued board service .
Equity Ownership
| Holder | Beneficial Shares | % Outstanding | Unvested RS Outstanding (12/31/24) |
|---|---|---|---|
| Russell L. Carson | 1,096,000 | <1% (indicated by asterisk) | 10,000 |
- Anti-Hedging Policy: Directors and employees are prohibited from hedging SEM securities (e.g., prepaid forwards, options, swaps, collars) .
- Pledging: The proxy discloses anti-hedging; it does not disclose a specific anti-pledging policy for directors in the cited sections .
Governance Assessment
- Strengths:
- Long-tenured Lead Independent Director with clear responsibilities supporting board effectiveness and investor engagement .
- Independence affirmed; committee membership on Nominating supports governance oversight; attendance thresholds met and annual meeting participation confirmed .
- Significant personal ownership (1.096M shares) and annual director equity grants foster alignment; directors meet stock ownership guidelines .
- Watch Items / Red Flags:
- Board interlock via WCAS: Carson and Scully both WCAS partners; while independence is affirmed, sponsor ties can raise optics on objectivity and potential conflicts in certain transactions; no related-party transactions involving Carson were disclosed .
- Director compensation scrutiny: The Board submitted a formal Non-Employee Director Compensation Policy for stockholder approval, noting it followed a stockholder demand to inspect books and records related to 2022–2024 director pay levels—this signals prior investor concern about director compensation .
- Anti-pledging policy not disclosed in the cited sections; continued monitoring advisable given pledging can impair alignment if present .
- Implications for investor confidence:
- Carson’s healthcare investment acumen and lead independent role are positives for board challenge and governance continuity .
- The WCAS interlock requires ongoing vigilance; absence of related-party transactions naming Carson mitigates conflict risk in current disclosures .
- Formalizing director pay via shareholder-approved policy may improve transparency and address prior concerns .
Director Compensation (2024 Actuals)
| Name | Fees Earned (Cash/Stock) ($) | Stock Awards ($) | Total ($) |
|---|---|---|---|
| Russell L. Carson | 85,700 (Paid entirely in cash; 0 shares) | 283,700 | 369,400 |
Committee Assignments (2024)
| Committee | Members | Chair | Meetings (2024) |
|---|---|---|---|
| Audit & Compliance | Ely; Davisson; Frist; Khanuja; Thomas | Ely | 5 |
| Human Capital & Compensation | Thomas; Davisson; Scully | Thomas | 5 |
| Nominating, Governance & Sustainability | Ely; Carson; Tavenner | Tavenner | 4 |
Meeting & Attendance
| Metric | 2024 |
|---|---|
| Board Meetings Held | 5 |
| Directors Attendance Threshold | Each director attended ≥75% of Board meetings and 100% of their committee meetings |
| Directors at Annual Meeting | All directors attended 2024 annual meeting |
Proposed Non-Employee Director Compensation Policy (for Shareholder Approval)
| Component | Amount |
|---|---|
| Quarterly Retainer | $18,000, with option for fully-vested shares in lieu of cash |
| Board Meeting Attendance | $3,000 in-person; $600 telephonic |
| Audit & Compliance Committee Attendance | $4,000 in-person with Board; $5,000 independent; $2,000 telephonic |
| Nominating Committee Attendance | $1,500 in-person with Board; $2,000 independent; $500 telephonic |
| Human Capital & Compensation Attendance | $1,500 in-person with Board; $2,000 independent; $500 telephonic |
| Annual Equity Grant | $200,000 |
Related Party Transactions (Context)
- NetJets Agreement: Payments to Executive Chairman Robert A. Ortenzio ($128,090 in FY2024) for aircraft use; no transactions named involving Carson .
- Concentra Separation/Spin-off: Separation completed with IPO in July 2024 and distribution in Nov 2024; directors Ortenzio and Thomas serve on Concentra’s board; no Carson-specific related transactions disclosed .
Summary Signals
- Alignment: High share ownership and role as Lead Independent Director support investor confidence .
- Governance Quality: Independent status, active Nominating Committee role, and strong board process/attendance are positives .
- Compensation Optics: Formal policy and shareholder vote responding to prior demand suggests responsiveness; monitor pay-for-service balance (meeting fees) versus equity alignment .
- Conflicts: WCAS interlock present; no related-party transactions involving Carson disclosed; maintain oversight .