Marc D. Miller
UNIVERSAL HEALTH SERVICESAbout Marc D. Miller
Marc D. Miller is Chief Executive Officer and President of Universal Health Services (UHS), serving as CEO since January 1, 2021, and as a director since 2006; he previously led the Acute Care division, rising from Vice President in 2004 to Senior Vice President and co-head in 2007 . Age 54, he oversaw 2024 performance that materially exceeded incentive targets: net revenues increased 10.8% to $15.83 billion vs. $14.28 billion in 2023, adjusted net income per diluted share was $16.61, and Return on Capital reached 10.1% versus an 8.0% target; adjusted EBITDA net of noncontrolling interests was $2.246 billion, supporting maximum annual bonus payouts . UHS invested ~$652 million in the acute care segment, ~$286 million in behavioral health, and repurchased ~2.98 million shares for ~$598.5 million in 2024, signaling capital deployment priorities under current leadership .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| UHS | Chief Executive Officer and President | CEO since 2021; President since May 2009 | Led portfolio with strong 2024 performance; exceeded EPS and ROC targets |
| UHS Acute Care Division | Senior Vice President and Co-Head | Since 2007 | Operational leadership preceding CEO role |
| UHS | Vice President | Since 2004 | Corporate leadership foundation |
| UHS Acute Care/Hospital Management | Various management positions | 1999–2003 | Early operating experience within system |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Universal Health Realty Income Trust (UHT) | Board of Trustees member | Since Dec 2008 | Affiliated REIT oversight; governance and capital allocation optics |
| Premier, Inc. | Board of Directors member | Current | Supply chain/performance improvement insights to UHS |
Fixed Compensation
| Component | 2024 Amount | 2025 Terms | Notes |
|---|---|---|---|
| Base Salary | $1,406,154 | $1,500,000 (effective Jan 1, 2025) | 6.7% YoY increase |
| Target Annual Bonus (% of salary) | 150% | 150% | Determined vs. pre-set performance measures |
| 401(k) Company Match | $10,350 | N/A | Standard match (highly compensated limits apply) |
| Insurance Premiums (LTD) | $5,478 | N/A | Included in All Other Compensation |
| Perquisites (2024 detail) | $44,664 | N/A | Country club dues $18,205; auto allowance/vehicle $24,742; event tickets $1,717 |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted EPS (diluted) | 100% corporate for CEO | $13.50 | $16.61 | 200% of target | Cash (annual) |
| Return on Capital | 100% corporate for CEO | 8.0% | 10.1% | 200% of target | Cash (annual) |
| Non-Equity Incentive Paid (2024) | — | $2,109,231 target | $4,218,462 actual | Max achieved | — |
Notes: In March 2024, UHS raised public EPS guidance, but incentive targets remained anchored to the original range; payout determination used 2024 actuals vs. the pre-set targets .
Long-Term Incentives
| Grant/Outcome | Date | Instrument | Target/Granted | Mechanics | Status/Value |
|---|---|---|---|---|---|
| Annual equity awards (CEO and NEOs) shifted from options to RSUs/PBRSUs | 2024 | RSUs + PBRSUs | See below | Align pay mix to peers; 4-year RSU vest; PBRSUs earn at 0–150% vs 3-year Adjusted EBITDA net of NCI thresholds | |
| 2024 RSU grant | Mar 21, 2024 | Time-based RSUs | 22,755 units | Vests in 4 equal annual installments on anniv. dates | Unvested at 12/31/24: 22,755; MV $4,082,702 |
| 2024 PBRSU target grant | Mar 21, 2024 | PBRSUs | 28,446 target units | Earn 0–150% vs 3-year Adjusted EBITDA net of NCI target | Unearned at 12/31/24: 28,446; MV $5,103,781 |
| 2022 PBRSU realized | Mar 12, 2025 | PBRSUs (earned) | 33,058 target → 49,587 earned (150%) | Actual Adjusted EBITDA net of NCI = $2.246B vs $2.012B target (112% of target → 150% payout) | Vested Mar 12, 2025 |
| 2025 awards | Mar 19, 2025 | RSUs + PBRSUs | 28,077 RSUs; 28,077 PBRSUs | RSUs vest 4 equal annual installments; PBRSUs earn 0–150% vs 3-year Adjusted EBITDA net of NCI thresholds | Granted at $178.08 price basis |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 17, 2025) | Class A: 1,641,815 shares (25.0% of class) ; Class B: 2,931,219 shares (4.9% of class) ; General voting power: 2.8% |
| Near-term options/RSUs | Options exercisable within 60 days: 403,038 shares ; RSUs scheduled to vest within 60 days: 5,689 shares |
| 2024 Option exercises | 55,000 shares exercised; value realized $5,796,850 |
| Outstanding equity (12/31/24) | Unvested RSUs: 22,755 (MV $4,082,702) ; PBRSUs unearned: 33,058 (MV $5,931,266), 42,024 (MV $7,539,946), 28,446 (MV $5,103,781) |
| Option overhang snapshot | Multiple grants outstanding with 2020–2028 expirations; historical shift away from options beginning 2024 |
| Hedging/Pledging | Hedging transactions prohibited by policy; no pledging disclosures identified |
Ownership structure notes: The proxy discloses extensive trust/LLC holdings and disclaimers for family trusts where Marc is trustee/manager, reflecting complex but controlled voting/dispositive powers; specific trust counts and disclaimers are itemized in security ownership footnotes .
Employment Terms
| Term/Provision | Key Mechanics | Quantitative Illustration (as of 12/31/24) |
|---|---|---|
| Agreement Term | New employment agreement dated Mar 19, 2025; initial term to Jan 1, 2028; automatic annual renewals unless either party gives one-year advance notice | |
| Base/Bonus | 2025 base salary $1,500,000; target annual bonus 150% of salary; Board-determined payouts vs pre-set measures | |
| Severance – Disability | Pro rata bonus + 50% of base salary, paid over 12 months; full acceleration of LTIP awards | Cash $1,875,000; option acceleration intrinsic value $9,583,118; RSU acceleration intrinsic value $22,657,696; total ~$34,115,814 |
| Severance – Death | Pro rata bonus to beneficiary + salary/reimbursements due; full acceleration of LTIP awards; life insurance benefits as designated | Option acceleration $9,583,118; RSU acceleration $22,657,696; total ~$32,240,814 (excl. insurance proceeds) |
| Severance – No Cause / Company Breach | Continuation of cash comp (salary+bonus) for remainder of term; benefits continuation; full acceleration of LTIP awards | Cash $7,612,500; perqs/benefits $272,278; option acceleration $9,583,118; RSU acceleration $22,657,696; total ~$40,125,592 |
| Severance – Cause | Accrued benefits only; no acceleration | — |
| Change of Control | Single-trigger: full acceleration if awards are not assumed/substituted by acquirer; otherwise no special benefit | Option acceleration $9,583,118; RSU acceleration $22,657,696 (at $179.42 close) |
| Restrictive Covenants | Non-compete while receiving severance or for one year post “cause” termination; one-year non-solicitation; mutual non-disparagement |
Clawbacks: Company adopted a clawback policy in Oct 2023 aligned with NYSE/SEC rules, covering incentive-based compensation for current/former officers in event of required restatement .
Board Governance
- Board Service: Director since 2006; Committees: Executive; Finance .
- Independence/Controlled Company: UHS is a “controlled company” under NYSE rules, yet maintains majority independent directors and fully independent Compensation and Nominating & Governance Committees; Eileen C. McDonnell serves as Lead Independent Director .
- Dual-Role Implications: CEO and director, with familial relationship to Executive Chairman Alan B. Miller; stockholder proponents highlight insider voting power vs economic ownership in declassification debate; Board rebutted and cited strong governance processes and refreshment .
Director Compensation (context)
- Non-employee director cash retainer: $100,000; Committee chair/member retainers range from $5,000–$25,000; annual RSU grant of 1,097 units (vests within ~1 year) .
- As an employee director (CEO), Marc does not receive non-employee director compensation .
Compensation & Incentives Structure Analysis
- Shift from options to RSUs/PBRSUs: In 2024, UHS transitioned annual equity awards for NEOs from options to a mix of time-based RSUs and PBRSUs, aligning pay mix with peers and increasing retention features; PBRSUs remain at-risk with 0–150% outcomes vs 3-year Adjusted EBITDA net of NCI .
- Pay-for-Performance Alignment: CEO annual bonus entirely tied to corporate metrics (Adjusted EPS and ROC); 2024 outperformance to the top of ranges produced 200% of target payout ($4.22 million), consistent with disclosed formulae .
- Discretionary awards: None for CEO; Executive Chairman received discretionary bonus ($1.08 million) per Board determination, clarifying treatment differences among executives .
- Clawbacks/Hedging Policy: Strengthened recoupment via 2023 clawback adoption; hedging prohibited, mitigating misalignment risk .
Equity Ownership & Alignment Details
| Measure | Value |
|---|---|
| Total beneficial ownership (Class A + Class B) | Class A 1,641,815; Class B 2,931,219 |
| Ownership % of classes | Class A 25.0%; Class B 4.9% |
| General voting power | 2.8% |
| Options exercisable within 60 days | 403,038 |
| RSUs vesting within 60 days | 5,689 |
| 2024 option exercise value realized | $5,796,850 |
| Unvested RSUs/PBRSUs MV at 12/31/24 | RSUs $4,082,702; PBRSUs $5,931,266; $7,539,946; $5,103,781 |
Employment & Contracts (Retention Risk)
- Contract duration and auto-renewal through Jan 1, 2028 with annual renewals reduce near-term departure risk; acceleration of all LTIP awards upon no-cause termination or company breach materially increases “walkaway” value, strengthening CEO leverage .
- Non-compete enforced while receiving severance or for one year post termination for cause; one-year non-solicit enhances post-exit protections .
Performance & Track Record Highlights
- 2024 net revenues rose 10.8% to $15.83B; adjusted net income attributable to UHS increased to $1.13B; Adjusted EPS $16.61; ROC 10.1%, exceeding targets .
- Operational investments: ~$652M acute care, ~$286M behavioral; share repurchases ~2.98M shares for ~$598.5M .
- Quality metrics: Leapfrog grades, U.S. News badges, and behavioral health outcomes/NPS scores reported for 2024, reflecting clinical performance emphasis .
Equity Plan & Peer Benchmarking
- 2020 Omnibus Stock and Incentive Plan amended in 2024 to add 6.0 million shares capacity (now 18.1M) .
- Compensation peer group includes HCA, Tenet, DaVita, Molina, Encompass Health, Select Medical, Quest, Labcorp, and others; CEO base and incentive targets benchmarked around median .
Risk Indicators & Red Flags
- Change-in-control benefits: Single-trigger acceleration only if awards are not assumed/substituted, limiting automatic windfalls; termination protections post-change-in-control follow standard agreement terms .
- Related-party/Interlocks: Board role at UHT and familial ties to Executive Chairman disclosed; legal and governance structures (lead independent director, independent committees) noted to mitigate entrenchment concerns .
- Hedging prohibited; no pledging disclosures identified .
Investment Implications
- Strong pay-for-performance alignment: Annual bonus fully tied to Adjusted EPS and ROC, with 2024 results triggering max payouts; PBRSUs tied to multi-year Adjusted EBITDA net of NCI provide sustained performance tethering .
- Retention is reinforced by unvested RSUs/PBRSUs and the employment agreement’s acceleration provisions upon no-cause termination or company breach, implying meaningful “walkaway” value (~$40.1M at 12/31/24) and reduced near-term exit risk .
- Potential insider selling pressure is moderated by hedging prohibitions, but scheduled RSU vesting and sizeable historical option exercises (e.g., $5.8M realized in 2024) may add intermittent supply; monitor upcoming vest dates and Form 4 activity for timing signals .
- Governance watchpoints: Controlled company status and dual family leadership warrant continued scrutiny; the presence of a lead independent director and independent committees partially offsets independence concerns, but shareholder proposals highlight perceived voting/economic imbalances .