Alan B. Miller
UNIVERSAL HEALTH SERVICESAbout Alan B. Miller
Founder of Universal Health Services (UHS) and Executive Chairman since January 1, 2021; previously Chairman and CEO since UHS’s inception in 1978. Director since 1978; age 87. Education: BA, College of William & Mary; MBA, Wharton School (Board of Overseers/Executive Board service). Also serves as Chairman, CEO, and President of Universal Health Realty Income Trust (UHT) . In 2024, UHS delivered 10.8% revenue growth to $15.83B; adjusted EPS of $16.61; Return on Capital 10.1%—the latter two drive executive performance pay design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Universal Health Services | Founder; Chairman & CEO; Executive Chairman | 1978–2020 (CEO); 2021–present (Exec Chair) | Built UHS to a large multi-state hospital operator; transitioned to Exec Chair in 2021 . |
| American Medicorp, Inc. | Chairman, CEO & President | pre-1978 | Led a pioneering hospital management company prior to founding UHS . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Universal Health Realty Income Trust (UHT) | Chairman, CEO & President | 1986–present | REIT with properties leased to healthcare operators; UHS advises UHT and leases facilities—related-party ties . |
| Penn Mutual Life Insurance Company | Trustee (past) | n/a | Governance experience in insurance . |
| Kimmel Center / Opera Company of Philadelphia | Director; Chairman Emeritus | n/a | Community leadership; highlights philanthropic profile . |
Fixed Compensation
Multi-year NEO (Executive Chairman) pay (per Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1,000,038 | 1,040,040 | 1,081,642 |
| Bonus ($) | — | 1,040,040 | 1,081,642 |
| Stock Awards Grant-Date FV ($) | 2,499,993 | 2,599,947 | 4,867,232 |
| Option Awards Grant-Date FV ($) | 2,499,990 | 2,600,138 | — |
| Non-Equity Incentive ($) | — | — | — |
| Change in Pension Value ($) | — | — | — |
| All Other Compensation ($) | 1,138,603 | 1,089,566 | 901,430 |
| Total ($) | 7,138,624 | 8,369,731 | 7,931,946 |
Key elements:
- 2025 base salary set at $1,125,000 under new employment agreement; eligible for discretionary bonus . 2024 discretionary bonus: $1.08 million .
- Perquisites include company automobile (fuel/maintenance), country club dues, professional tax/ accounting services, and personal aircraft usage reimbursed at market rates; split-dollar life insurance premiums comprised $762,476 in 2024 within All Other Compensation .
Performance Compensation
Annual cash incentives: Alan B. Miller does not participate in the Executive Incentive Plan; bonuses are discretionary .
Long-term equity:
- 2024 grants: 11,966 time-based RSUs (vesting in four equal annual installments) and 14,959 target PBRSUs measured on three-year Adjusted EBITDA net of NCI; PBRSUs earn 0–150% of target at <90%/90%/100%/≥110% of target, respectively .
- 2022 PBRSUs (granted in 2022) vested at 150% (26,076 shares) on March 12, 2025 after achieving 112% of target; target range centered at $2.012B Adjusted EBITDA net of NCI; actual $2.246B .
Detailed performance award view:
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| PBRSUs (2022 award; vested in 2025) | 100% on 3-yr Adj. EBITDA net of NCI | $2.012B (90%=$1.811B; 110%=$2.214B) | $2.246B (112%) | 150% of target (26,076 shares) | Fully vested per results |
| RSUs (2024 grant) | Time-based | n/a (service condition) | n/a | n/a | 25% annually over 4 years |
Equity Ownership & Alignment
Beneficial ownership and outstanding awards (as of Mar 17, 2025; market values at Dec 31, 2024):
| Category | Amount |
|---|---|
| Class A Common | 5,163,885 shares (78.5% of Class A) |
| Class B Common | 8,042,367 shares (12.6% of Class B) |
| Class C Common | 661,688 shares (100% of Class C) |
| General Voting Power | 87.8% |
| Stock Options exercisable within 60 days | 337,791 shares |
| RSUs vesting within 60 days | 2,992 shares |
| Unvested RSUs (12/31/24) | 11,966 ($2,146,940 market value) |
| Unvested PBRSUs (12/31/24) | 17,384 ($3,119,037 market value) |
Ownership structure includes numerous family trusts and LLCs with dispositive/voting allocations among Alan and Marc D. Miller (trustee roles noted); proxy details multiple entities and disclaimed beneficial interests by trustees . Company policy prohibits hedging of company stock; no separate pledging policy disclosure identified in cited materials .
Insider selling/option exercises:
- 2024 option exercises: 409,799 shares; value realized $42,160,527—indicative of periodic liquidity and potential selling pressure around vest/exercise events .
Employment Terms
New employment agreement (effective March 19, 2025) sets Executive Chairman term through January 1, 2027 with automatic annual renewal; long-term incentive awards accelerate upon disability, death, company breach/termination without cause, or material adverse duty change leading to resignation after cure period; release condition can be required for severance benefits .
Potential Payments Upon Termination (as if effective 12/31/2024):
| Scenario | Cash Severance | Perqs/Benefits | Accelerated Options (intrinsic) | Accelerated RSUs/PBRSUs (intrinsic) | Total |
|---|---|---|---|---|---|
| For Cause | — | — | — | — | — |
| Disability | 562,500 | — | 6,086,414 | 11,914,923 | 18,563,837 |
| Death | — | — | 6,086,414 | 11,914,923 | 18,001,337 |
| Company Breach / Without Cause | 2,283,750 | 1,213,183 | 6,086,414 | 11,914,923 | 21,498,270 |
Change-of-Control economics:
- Under the 2020 Omnibus Stock and Incentive Plan, if awards are not assumed/substituted by an acquirer, unvested awards fully accelerate. Intrinsic value at 12/31/2024 for Alan: options $6,086,414; RSUs/PBRSUs $11,914,923 (NYSE close $179.42) . No separate cash multiple solely for change-of-control; termination benefits follow employment agreement scenarios .
Restrictions & clawbacks:
- Restrictive covenants include non-compete during employment and, if discharged for cause, for one year; non-solicit and mutual non-disparagement; Section 409A provisions and release timing mechanics .
- Company adopted clawback policy in October 2023 aligned to NYSE/SEC restatement-triggered recoupment for incentive-based compensation .
Board Governance
- Board roles: Executive Chairman; Chair of Executive Committee and Finance Committee .
- Lead Independent Director: Eileen C. McDonnell; majority of Board is independent even as a “controlled company”; Compensation and Nominating & Governance Committees comprised of independent directors .
- Controlled company dynamics: insiders hold ~16% of common stock but ~90% of voting power on general matters; shareholder proposal to declassify the Board was rejected by >90% of votes in 2024, with Board recommending “AGAINST” again in 2025 .
Compensation Peer Group (benchmarking risk)
Peer group used in 2024 includes HCA, Tenet, Molina, DaVita, Labcorp, Quest Diagnostics, Encompass Health, Select Medical, Acadia Healthcare, Brookdale Senior Living, Henry Schein .
Related Party Transactions (red flags to monitor)
- UHS advises UHT and leases property from UHT; Alan B. Miller is Chairman/CEO/President of UHT .
- Legal services: ~$1.05M paid to Norton Rose Fulbright US LLP; director Warren J. Nimetz is Of Counsel, and trustee for certain Miller family trusts .
- Philanthropy: UHS’s $1M commitment to Miller Theater (Kimmel Center), installment schedule disclosed .
Company Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 13,399,370,000 [GetFinancials]* | 14,281,976,000 [GetFinancials]* | 15,827,935,000 [GetFinancials]* |
| EBITDA ($) | 1,642,966,000* | 1,743,422,000* | 2,269,803,000* |
*Values retrieved from S&P Global via GetFinancials.
Additional performance disclosure: 2024 adjusted net income per diluted share of $16.61; Return on Capital 10.1%—both exceeded incentive plan targets for corporate performance (used for other NEOs) .
Equity Award & Vesting Schedules
- RSUs: four equal annual installments from grant date (e.g., 3/21/2024 grants vest on anniversary dates) .
- PBRSUs: 3-year performance tied to Adjusted EBITDA net of NCI, earned at 0/50/100/150% of target for <90%/90%/100%/≥110% outcomes; 2022 cycle vested at 150% in March 2025 .
Employment & Retirement
- Executive Retirement Income Plan (ERIP): Alan remains a participant; aggregate benefit ≈$2.6M (60 monthly payments) if retired as of 12/31/2024; ERIP monthly comp deemed to be average for three years immediately prior to Jan 1, 2021 per contract .
- Deferred compensation available; eligible for 401(k) matching and SERIP (company-wide programs) .
Investment Implications
- Alignment and control: Extraordinary voting control (87.8%) and dual role (Exec Chair; UHT leadership) concentrate influence; independent committee structures partially mitigate but related-party exposure (UHT) is a persistent governance overhang .
- Incentive design: Long-term equity tied to Adjusted EBITDA net of NCI with hard targets and capped payouts; recent 150% vest signals strong execution; time-based RSUs added in 2024 improved retention incentives and reduced reliance on options (lower risk) .
- Liquidity pressure: 2024 option exercises ($42.16M realized) suggest periodic selling pressure around vest/exercise windows—monitor Form 4s for subsequent activity and 10b5-1 plans .
- Severance/CIC: No CIC cash multiples; equity accelerates only if not assumed—reduces transaction friction but preserves value in hostile scenarios; employment agreement provides continuation of compensation upon company breach/without cause .
- Risk controls: Clawback policy in place and explicit hedging ban; no pledging disclosure observed—continue to monitor pledging risk and related-party volumes (UHT advisory/leases; legal spend) .