J. Eric Evans
Surgery PartnersAbout J. Eric Evans
J. Eric Evans, 47, is CEO and a Class III director of Surgery Partners (SGRY); he has served as CEO since January 13, 2020 and previously was EVP/COO from April 2019 to January 2020. He holds a bachelor’s in industrial management from Purdue University and an MBA from Harvard Business School . Company performance context for 2024: revenues rose 13.5% to $3.11B, Adjusted EBITDA grew 16.0% to $508.2M, and net loss attributable to common stockholders was $168.1M (EPS -$1.33) . The pay-versus-performance table shows 2024 CEO “Compensation Actually Paid” of $3.27M and a TSR index value of 135.2 (peer group 127.8) . The CEO pay ratio for 2024 was 119:1 (CEO total comp $6,461,203; median employee $54,265) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Surgery Partners | EVP & Chief Operating Officer | Apr 2019–Jan 2020 | Transitioned into top operating role prior to CEO appointment, providing continuity in operations leadership . |
| Tenet Healthcare | President, Hospital Operations | Mar 2016–2018 | Led systemwide hospital operations at a major health system . |
| Tenet Healthcare | CEO, Texas Region | Apr 2015–Mar 2016 | Oversaw Texas regional operations . |
| The Hospitals of Providence (Tenet) | Market CEO (El Paso) | Sep 2012–Apr 2015 | Led an integrated market for Tenet in El Paso . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| QuVa Pharma | Director | Mar 2022–present | Public company directorship . |
| Teladoc Health | Director | Sep 2023–present | Public company directorship (spelled “Teledoc Health” in proxy) . |
Fixed Compensation
Multi-year compensation (as reported in the Summary Compensation Table):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 1,050,000 | 1,050,000 | 1,050,000 |
| Stock Awards ($) | 4,645,000 | 4,400,000 | 5,100,000 |
| Non-Equity Incentive Plan Compensation ($) | 390,500 | 1,000,000 | 300,000 |
| All Other Compensation ($) | 7,325 | 7,600 | 11,350 |
| Total ($) | 6,092,825 | 6,457,600 | 6,461,203 |
| CEO Pay Ratio | — | — | 119:1 |
Notes:
- 2024 annual cash incentive earned was $1,000,000, of which $700,000 was settled in time-based restricted stock (vests in 1 year). The $300,000 cash portion appears in 2024 “Non-Equity Incentive Plan Compensation”; the $700,000 equity portion is reflected via pay-versus-performance adjustments and the 2025 equity issuance .
Performance Compensation
Annual (Short-Term) Incentives
- 2025 structure (CEO target $1,260,000): 70% Adjusted EBITDA, 15% Net Revenue, 15% Free Cash Flow; linear payout 25%–200% by metric performance; zero payout for metric below threshold .
- 2024 outcome: Company delivered Adjusted EBITDA of $508.2M, Net Revenue of $3.11B, and Free Cash Flow below threshold; the Compensation Committee paid aggregate incentives below target; CEO earned $1,000,000 (partly in equity vesting in 1 year) .
| Annual Incentive | Metric | Weight | Target/Threshold Framework | Actual (2024) | Payout |
|---|---|---|---|---|---|
| 2025 Plan | Adjusted EBITDA | 70% | 25%–200% of target by performance; 0% if below threshold | N/A (future) | N/A |
| 2025 Plan | Net Revenue | 15% | Same as above | N/A (future) | N/A |
| 2025 Plan | Free Cash Flow | 15% | Same as above | N/A (future) | N/A |
| 2024 Result | Adj. EBITDA / Net Revenue / FCF | Not disclosed | Committee emphasized performance; FCF below threshold | $508.2M Adj. EBITDA; $3.11B Net Revenue; FCF below threshold | $1,000,000; 1-year cliff equity for part of payout |
Long-Term Incentives (LTI)
- Mix: For 2024 awards, 40% time-based restricted stock (RS) vesting 1/3 per year over 3 years and 60% PSUs with a 3-year cliff vest if performance met; same design used for 2025 annual awards .
- 2024 PSU performance curve (performance period ends 12/31/2026): Adjusted EBITDA threshold $649.1M (100% payout), $666.3M (200%), $683.8M+ (300%), with TSR modifier ±10% (cap 300%); zero below threshold .
- 2025 PSU metric: Adjusted EBITDA by 3rd anniversary; payout 100% at threshold up to 300% at max; TSR modifier ±20% (cap 300%) .
| Grant Year | Instrument | Grant Date | $ Value | Units/Shares | Vesting/Performance |
|---|---|---|---|---|---|
| 2024 | Time-based RS | 2/28/2024 | 1,760,000 | 56,446 | 1/3 each year over 3 years |
| 2024 | PSUs (threshold) | 2/28/2024 | 2,640,000 | 84,669 | 3-year cliff based on Adjusted EBITDA with TSR ±10%, cap 300% |
| 2025 | Time-based RS | Feb 2025 | 2,000,000 | 84,033 | 1/3 each year over 3 years |
| 2025 | PSUs (threshold) | Feb 2025 | 3,000,000 | 126,050 | 3-year cliff based on Adjusted EBITDA with TSR ±20%, cap 300% |
Equity Ownership & Alignment
- Beneficial ownership: 1,157,642 shares; less than 1% of outstanding (128,192,739 shares outstanding as of 3/31/2025) .
- Stock ownership guidelines: CEO must hold equity worth 5x base salary; all NEOs and non-employee directors (other than Bain-affiliated directors) met guidelines as of 3/31/2025; 50% net share retention until guidelines met .
- Hedging/pledging: Hedging transactions in Company stock are prohibited under the Insider Trading Policy; the proxy discloses hedging restrictions and does not describe a pledging policy .
Outstanding equity and vesting as of 12/31/2024:
| Category | Detail | Amount |
|---|---|---|
| Stock options (exercisable) | Shares; Exercise Price; Expiration | 500,000; $11.54; 4/1/2029 |
| Time-based RS (unvested) | Shares and market value | 12,339 ($261,217); 44,634 ($944,902); 56,446 ($1,194,962) |
| PSUs (unearned) | Units and market/payout value | 37,016 ($783,629); 66,950 ($1,417,332); 84,669 ($1,792,443) |
2024 equity activity:
| Event (2024) | Quantity | Value/Price |
|---|---|---|
| Options exercised (grant 4/1/2019) | 16,500 | $156,090 realized (strike $11.54; market $21.00 on prior trading day) |
| RS/PSU vesting (various tranches) | 7,433; 7,433; 22,316; 4,956; 12,339 | $250,492; $250,492; $696,036; $146,202; $364,001 |
Employment Terms
- Employment agreement: Provides base salary and target bonus set by the Compensation Committee; participation in benefit plans .
- Severance and change-in-control (CIC): If terminated without cause or resigns for good reason, cash severance equals 12 months base salary plus target bonus, plus 12 months of Company-paid health benefits; if within 12 months after a CIC, severance is paid in a lump sum; equity acceleration per award terms (see table) .
Potential payments assuming termination on 12/31/2024:
| Scenario | Cash Severance | Equity Acceleration | Health Benefits |
|---|---|---|---|
| Death/Disability | — | $2,401,080 | — |
| Termination w/o Cause or Good Reason (non-CIC) | $2,310,000 | — | $23,527 |
| Termination w/o Cause or Good Reason in Connection with CIC | $2,310,000 | $7,239,223 | $23,527 |
| Source | |||
- Post-termination covenants: Non-compete for 1 year and non-solicit for 2 years following termination .
- Award treatment: Unvested RS vests on death/disability or double-trigger CIC; PSUs earned at CIC based on performance to date and continue to vest time-based (or vest if not assumed); stock options: time-based portion accelerates on qualifying termination around CIC; performance conditions remain in effect .
- Clawback: Executive Compensation Recovery Policy adopted and administered by the Compensation Committee .
- Perquisites and deferred comp: Limited perqs (e.g., 401(k) match, modest “other” amounts); 2024 deferred comp contribution $19,385, with year-end balance $19,238 and $(147) aggregate earnings .
Board Governance
- Role: CEO and Class III director since January 2020; the Board’s Chairman is Wayne S. DeVeydt (Executive Chairman) .
- Committees and independence: Compensation Committee members are independent (Chair: Devin O’Reilly; members: Brent Turner, Andrew T. Kaplan, John A. Deane); the CEO does not participate in deliberations on his own compensation .
- Say-on-Pay: In 2024, ~95% of votes cast supported the executive compensation program .
- Section 16 compliance: The Company states all executive officers and directors complied with Section 16(a) filing requirements for 2024 .
Performance & Track Record
Pay-versus-performance summary (selected measures):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| CEO Compensation Actually Paid ($) | 16,996,689 | 14,217,126 | (3,342,023) | 7,260,168 | 3,271,752 |
| TSR (Value of $100) | 185.3 | 341.2 | 178.0 | 204.3 | 135.2 |
| Peer Group TSR (Value of $100) | 111.9 | 146.1 | 147.8 | 142.1 | 127.8 |
| Net Income ($mm) | 1.3 | 70.7 | 87.0 | 135.3 | 12.5 |
| Adjusted EBITDA ($mm) | 256.6 | 339.6 | 380.2 | 438.1 | 508.2 |
2024 operating highlights cited in CD&A: Revenues $3.11B (+13.5% YoY), Adjusted EBITDA $508.2M (+16% YoY), and net loss attributable to common stockholders of $168.1M (EPS -$1.33) .
Equity Ownership & Alignment Details
| Item | Detail |
|---|---|
| Beneficial ownership | 1,157,642 shares; less than 1% . |
| Ownership guidelines | CEO 5x salary; retention of 50% net shares until met; compliance met as of 3/31/2025 (except for specified new directors) . |
| Hedging/Pledging | Hedging prohibited; no pledging policy described in the proxy . |
| Option overhang | 500,000 options exercisable at $11.54 expiring 4/1/2029 . |
| Upcoming vesting | Time-based RS awards vest 1/3 annually; PSUs have 3-year cliff vesting tied to Adjusted EBITDA with TSR modifiers . |
Employment & Contracts Summary
| Term | Key economics |
|---|---|
| Severance (non-CIC) | 12 months base salary + target bonus; 12 months health benefits . |
| Severance (CIC within 12 months) | Same as above, paid as lump sum; equity acceleration per award terms . |
| Restrictive covenants | 1-year non-compete; 2-year non-solicit . |
| Clawback | Executive Compensation Recovery Policy in place . |
| Indemnification | Officer indemnification agreements to fullest extent under Delaware law . |
Board Service History and Dual-Role Considerations
- Board service: Director since January 2020 (Class III term ending 2027) .
- Committee roles: None disclosed for Mr. Evans; key committees (e.g., Compensation) are composed of independent directors; CEO excluded from his own pay deliberations .
- Dual-role implications: CEO also serving as director concentrates authority but is mitigated by the presence of an Executive Chairman (Wayne S. DeVeydt) and fully independent key committees overseeing compensation and governance .
Additional Detailed Tables
2024 Grants of Plan-Based Awards (CEO)
| Type | Grant Date | Threshold | Target | Max | Shares/Units | Grant Date Fair Value |
|---|---|---|---|---|---|---|
| Cash Incentive | — | $315,000 | $1,260,000 | $2,520,000 | — | — |
| Restricted Stock | 2/28/2024 | — | — | — | 56,446 | $1,760,000 |
| PSUs | 2/28/2024 | 84,669 | 169,338 | 279,408 | — | $2,640,000 |
Nonqualified Deferred Compensation (2024)
| Executive contributions | Company contributions | Aggregate earnings | Balance at 12/31/2024 |
|---|---|---|---|
| $19,385 | — | $(147) | $19,238 |
Investment Implications
- Pay-for-performance alignment: Heavy use of multi-year PSUs tied to Adjusted EBITDA with TSR modifiers (60% of LTI in 2024; similar in 2025) aligns realized pay with multi-year operating performance and relative shareholder returns, while 3-year cliff vesting supports retention .
- Near-term selling pressure: Time-based RS vests annually in thirds (2024 and 2025 awards), and a portion of the 2024 annual bonus was settled in stock vesting at 1 year; insider selling pressure may be mitigated by share ownership guidelines requiring retention of 50% of net shares until compliance thresholds are met .
- Contractual protections and risk: Severance is moderate (1x salary + target bonus) with double-trigger CIC equity vesting; robust clawback and hedging prohibitions reduce governance risk; no tax gross-ups are disclosed in the proxy .
- Ownership alignment: Evans holds over 1.1 million shares and meets ownership guidelines; options outstanding are in-the-money given the 12/31/2024 stock price context, reinforcing equity linkage to performance .
- Governance checks: Strong say-on-pay support (~95%), independent Compensation Committee, and an Executive Chairman structure partially offset typical CEO-director dual-role concerns .