Christopher Reading
U S PHYSICAL THERAPY INC /NVAbout Christopher Reading
Christopher J. Reading, 61, is Chairman and Chief Executive Officer of U.S. Physical Therapy (USPH); he has been CEO and a director since 2004 and was appointed Chairman in May 2024 after previously serving as COO from 2003–2004 . He is a licensed physical therapist with prior senior operating roles at HealthSouth and currently serves as President of the Alliance for Physical Therapy Quality and Innovation (APTQI) . Pay-versus-performance shows 2024 Adjusted EBITDA of $81.8M, Net Income of $45.6M, and USPH TSR value of $74 on a $100 base vs peer TSR $121; 2023 metrics were $77.7M Adjusted EBITDA, $37.2M Net Income, USPH TSR $77, peer TSR $120 . USPH emphasizes pay-for-performance: 2024 CEO compensation actually paid of $3.51M tracked Adjusted EBITDA and TSR, with say-on-pay support of ~96% in May 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Physical Therapy | Chief Operating Officer | 2003–2004 | Led operations prior to CEO tenure; background in acquisitions and clinic operations . |
| HealthSouth Corporation | Senior Vice President of Operations (and prior roles) | Not disclosed | Focused on operations, acquisitions, and development across outpatient rehab, ambulatory surgery, imaging, and inpatient rehab hospitals . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Alliance for Physical Therapy Quality and Innovation (APTQI) | President | Current (as of 2025) | Leads industry advocacy on legislative/regulatory matters for outpatient physical therapy access and value-based care . |
Fixed Compensation
| Year | Base Salary ($) |
|---|---|
| 2022 | 927,000 |
| 2023 | 960,000 |
| 2024 | 975,000 |
| 2025 (effective 1/1/25) | 1,004,250 |
Performance Compensation
Annual Cash Incentive (2024 structure and outcome)
| Plan | Metric | Max Opportunity | 2024 Target Range | 2024 Actual Metric | 2024 Payout |
|---|---|---|---|---|---|
| Objective Cash/RSA Bonus | Adjusted EBITDA | Up to 75% of base salary | $78.5M–$85.0M+ Adjusted EBITDA | $81.768M Adjusted EBITDA | 34% of base salary; paid Mar 5, 2025 |
| Discretionary Cash/RSA Bonus | Subjective goals (leadership, growth/M&A, compliance/cyber, succession, 2024 financial goals) | Up to 50% of base salary | Committee-assessed vs pre-set subjective criteria | Committee scored Reading at 90% of maximum | $438,750; paid Mar 5, 2025 |
| Total Non-Equity Incentive (2024) | — | — | — | — | $770,250 |
Long-Term Incentive (Equity)
| Award | Grant Date | Shares Granted | Vesting | Grant-Date Fair Value |
|---|---|---|---|---|
| Objective LTI (RSA) | Feb 24, 2025 | 7,750 (based on 2024 EBITDA outcome) | Evenly over 16 quarters starting May 20, 2025 | Part of total $2,137,500 for 20,250 shares (2024 LTI grants) |
| Discretionary LTI (RSA) | Feb 24, 2025 | 12,500 (100% achievement) | Evenly over 16 quarters starting May 20, 2025 | Part of total $2,137,500 for 20,250 shares (2024 LTI grants) |
| Stock Awards (SCT, 2024) | — | — | — | $1,888,440 (Summary Compensation Table) |
Notes: Equity awards are restricted stock; no stock options outstanding for NEOs .
Equity Ownership & Alignment
Beneficial Ownership (as of April 10, 2025)
| Holder | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Christopher J. Reading | 116,088 | 0.8% | Includes 42,402 unvested restricted shares with scheduled quarterly lapses . |
Outstanding and Vesting Detail
- No stock options outstanding for directors and NEOs .
- As of Dec 31, 2024, unvested RSAs for Reading: 25,739 shares (market value $2,283,307 at $88.71) with staggered quarterly vesting through Nov 2027 .
- As of Apr 10, 2025, Reading’s unvested RSAs total 42,402 shares with vesting across multiple quarterly dates through Mar 2029 (see schedule excerpt below) .
Upcoming RSA vesting events (selling-pressure watchlist)
| Vest Date | Shares |
|---|---|
| May 20, 2025 | 4,152 |
| Aug 20, 2025 | 4,152 |
| Nov 20, 2025 | 4,152 |
| Mar 6, 2026 | 4,152 |
Additional scheduled quarterly tranches continue in 2026–2029 (e.g., 5/20/26: 2,902; 8/20/26: 2,902; 11/20/26: 2,902; final listed tranche 3/6/29: 1,275) .
Alignment Policies
- Hedging, derivatives, and short sales prohibited; margin and pledging of company stock should be avoided per Insider Trading Policy .
- Executive Clawback Policy: if a financial restatement is required, the company will recover incentive-based compensation received in the last three fiscal years in excess of restated amounts .
- Officer and Director Share Ownership Guidelines adopted in 2025; five-year compliance window and oversight by Compensation Committee (specific multiples not disclosed) .
Employment Terms
| Item | Key Terms |
|---|---|
| Agreement term | Amended and restated employment agreement expiring Dec 31, 2025; automatic two-year renewals thereafter . |
| Termination without cause or for good reason | 2x base salary continuation; bonus equal to greater of last year’s bonus or three-year average; acceleration of all unvested equity; payment of accrued but unused vacation; 24 months medical benefits . |
| Disability/Death | Disability: lump sum = 2x base salary + equity vesting acceleration; Death: lump sum = 1x base salary + equity vesting acceleration . |
| Change in Control (CoC) | $500,000 CoC benefit to Reading (plus acceleration of all equity) upon qualifying termination in connection with a CoC (“double trigger” for 2022–2024 awards; some pre-2020 agreements had single-trigger) . |
| Non-compete/Non-solicit | Up to two years post-termination . |
| Illustrative severance table (as of 12/31/24 assumptions) | Total payout examples: $5.06M for without-cause or good-reason termination; $5.56M for CoC termination scenario (assumes stock at $88.71 and 2024 base/bonus) . |
Board Governance (Director Service, Roles, and Dual-Role Implications)
- Reading is Chairman and CEO; he is not independent under NYSE rules; Lead Independent Director role established in 2024 (Dr. Bernard Harris) with a charter and defined responsibilities (agenda setting, executive sessions, liaison role, authority to retain advisors) .
- All standing committees (Audit, Compensation, Compliance, Governance/Nominating) comprised solely of independent directors; independent directors meet in executive session; Board met seven times in 2024; each director attended at least 75% of Board/committee meetings .
- Implication: Combined Chair/CEO concentrates authority but mitigated by robust Lead Independent Director powers, independent-only committees, and regular executive sessions .
Director Compensation (context for governance quality; Reading does not receive non-employee director fees)
| Component | Amount/Structure |
|---|---|
| Retainer (non-employee directors) | $16,250 per quarter; LID $35,000; Audit Chair $30,000; other Chairs $20,000 . |
| Equity | 1,424 RSAs granted at 2024 annual meeting; vest 356 shares each on July 1, 2024; Oct 1, 2024; Jan 1, 2025; Apr 1, 2025 (grant-date fair value $150,090 per director; $105.4/share) . |
Performance & Track Record (selected metrics)
| Year | Net Income ($) | Adjusted EBITDA ($) | USPH TSR (Value of $100) | Peer TSR (Value of $100) |
|---|---|---|---|---|
| 2020 | 52,491,000 | 70,017,000 | 100 | 100 |
| 2021 | 57,924,000 | 73,780,000 | 79 | 121 |
| 2022 | 43,407,000 | 73,661,000 | 67 | 117 |
| 2023 | 37,220,000 | 77,717,000 | 77 | 120 |
| 2024 | 45,600,000 | 81,768,000 | 74 | 121 |
Notes: Adjusted EBITDA and TSR are the primary “pay vs performance” links in the program (EBITDA most important in 2023–2024; Operating Results used pre-2022) .
Say-on-Pay & Shareholder Feedback
- Say-on-pay frequency: annual vote; 2024 support ~96% in favor of NEO compensation .
- Governance enhancements reflecting shareholder input: Lead Independent Director role; “double-trigger” CoC vesting for newer equity awards; resignation policy for directors receiving more withhold than for votes in uncontested elections .
Compensation Peer Group (for benchmarking)
- Surgery Partners; ATI Physical Therapy; Ensign Group; Apollo Medical Holdings; RadNet; Addus HomeCare; Cross Country Healthcare; Select Medical; National Healthcare Corp. .
- Committee uses peer data as a reference point alongside internal equity and performance; no explicit target percentile disclosed .
Additional Compensation Disclosure (multi-year CEO figures; SCT basis)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 974,422 | 1,888,440 | 770,250 | 3,564 | 3,636,676 |
| 2023 | 958,731 | 1,632,482 | 777,600 | 3,564 | 3,372,377 |
| 2022 | 925,962 | 1,016,800 | 463,500 | 2,322 | 2,408,584 |
Risk Indicators & Red Flags
- Combined CEO/Chair role; mitigants include strong Lead Independent Director charter, independent-only committees, and executive sessions .
- Equity awards now generally “double-trigger” on CoC; legacy awards pre-2020 may have single-trigger vesting on CoC (a governance improvement trend) .
- No stock options outstanding (reduces leverage/option-related risk); equity is time-based RSAs with quarterly vesting .
- Hedging and short sales prohibited; pledging discouraged by policy (reduces misalignment/forced sale risk) .
- No related-party transactions in 2024; Audit Committee reviewed and approved two fair-market clinic leases tied to a new director (Metro CEO) upon acquisition; third-party valuation confirmed FMV .
Equity Ownership & Vesting Detail (as of dates provided)
| Snapshot Date | Unvested RSAs | Illustrative Vesting Windows (examples) |
|---|---|---|
| Dec 31, 2024 | 25,739 shares; $2,283,307 market value at $88.71/share | Quarterly tranches through Nov 2027 (e.g., 5/20/25: 2,887; 8/20/25: 2,887; 11/20/25: 2,887) . |
| Apr 10, 2025 | 42,402 shares (beneficially owned as unvested) | New 2025 grants add quarterly vesting (e.g., 5/20/25: 4,152; 8/20/25: 4,152; 11/20/25: 4,152; 3/6/26: 4,152; extends through 3/6/29) . |
Employment & Contracts (severance / CoC economics; retention)
- Without cause/good reason: 2x salary, bonus protection (greater of last year or 3-year average), accelerated equity vesting, and 24 months medical (strong retention features) .
- CoC: additional $500,000 for Reading plus accelerated equity; awards since 2022 generally require both CoC and qualifying termination for vest (double-trigger) .
- Non-compete/non-solicit up to two years post-termination (limits external mobility) .
Investment Implications
- Alignment: Meaningful insider ownership (0.8%) and substantial unvested RSAs with multi-year quarterly vesting support retention and long-term orientation; no options outstanding reduces volatility from option exercises .
- Near-term supply/flow: Quarterly RSA lapses (e.g., ~4,152 shares on 5/20/25, 8/20/25, 11/20/25, 3/6/26) may create episodic selling pressure or 10b5-1 activity around vest dates; monitor Form 4s near those dates .
- Pay-performance linkage: 2024 payouts tied directly to Adjusted EBITDA achievement (objective 34% of base) plus discretionary goals; LTI shares scale with EBITDA and committee assessment; continued focus on EBITDA suggests sensitivity to margin/execution .
- Governance: CEO/Chair concentration offset by a robust Lead Independent Director framework and independent-only committees; equity CoC terms improved to double-trigger on newer awards, addressing a common shareholder concern .
- Shareholder sentiment: Strong 2024 say-on-pay support (~96%) implies current plan design and outcomes are broadly acceptable to investors, lowering headline risk on compensation .