Ex-10.14 Summary of Named Executive Officer Compensation
Exhibit 10.14
Coventry Health Care, Inc. (Coventry)
Summary of Named Executive Officer Compensation
Base Salary
The following table sets forth the current base salaries provided to Coventrys Chief Executive Officer, Chief Financial Officer, and three most highly compensated executive officers (Named Executive Officers):
Executive Officer | Current Salary |
Dale B. Wolf, Chief Executive Officer | $925,000 |
Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and Treasurer | $525,000 |
Thomas P. McDonough, President | $885,000 |
Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations, and Chief Information Officer | $600,000 |
Francis S. Soistman, Jr., Executive Vice President, Government & Individual Plans | $575,000 |
Executive Management Incentive Plan
2006 Criteria and Incentives
Coventrys Chief Executive Officer, Chief Financial Officer, and three most highly compensated officers are also eligible to receive a non-equity incentive award each year under Coventrys Executive Management Incentive Plan (the 2006 Executive Management Incentive Plan (the 2006 EMIP) which was previously filed as Exhibit 10.25 to Coventrys Current Report on Form 8-K filed on January 12, 2006. For fiscal year 2006, incentives under the 2006 EMIP were based on the attainment of budgeted EPS (earnings per share) and year-over-year EPS growth. The incentives paid to Coventrys Chief Executive Officer and other named executive officers for performance in fiscal year 2006 are set forth below:
Executive Officer | Incentive for 2006 |
Dale B. Wolf, Chief Executive Officer | $ 1,625,000 |
Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and Treasurer |
$ 450,000 |
Thomas P. McDonough, President | $2,400,000 (1) |
Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations, and Chief Information Officer | $ 575,000 |
Francis S. Soistman, Jr., Executive Vice President, Government & Individual Plans | $ 650,000 |
(1) Includes $1,700,000 special incentive for First Health integration and $700,000 EMIP.
2007 Criteria
Pursuant to Coventrys 2007 Executive Management Incentive Plan (the 2007 EMIP), which was previously filed as Exhibit 10.1 to Coventrys Current Report on Form 8-K, filed on November 7, 2006, the Compensation Committee of Coventrys Board of Directors approved the incentive criteria for fiscal year 2007 under the 2007 EMIP. For fiscal year 2007, incentives under the 2007 EMIP will be predicated on budgeted earnings per share targets and year-over-year EPS growth.
2003 Deferred Compensation Plan and 2004 Mid-Term Executive Retention Program
In addition to their base salaries and incentives, Coventrys Chief Executive Officer, Chief Financial Officer, and three most highly compensated executive officers were also eligible to receive an annual cash and stock equivalent allocation to an account under the 2003 Deferred Compensation Plan, effective July 1, 2003, a copy of which is filed as Exhibit 10.18.3 to Coventrys Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed on August 12, 2003, and the 2004 Mid-Term Executive Retention Program, effective July 1, 2004, a copy of which is filed as Exhibit 10.26 to Coventrys Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 16, 2005. The EPS goals for the 2004 and 2005 program years were met, and the three plan years all vested July 1, 2006. The accounts were paid in cash, equal to the June 30, 2006 stock value and investment value of the cash account as of that date. The following payouts were made on July 7, 2006:
Executive Officer | Payments in 2006 |
Dale B. Wolf, Chief Executive Officer | $ 6,730,375 |
Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and Treasurer | $ 949,499 |
Thomas P. McDonough, President | $ 6,376,064 |
Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations, and Chief Information Officer | $ 2,405,521 |
Francis S. Soistman, Jr., Executive Vice President, Government & Individual Plans | $ 1,738,439 |
2006 Mid-Term Executive Retention Program
In addition to their base salaries and incentives, Coventrys Chief Executive Officer, Chief Financial Officer, and three most highly compensated executive officers are also eligible to receive an annual cash and stock equivalent allocation to an account under the 2006 Mid-Term Executive Retention Program, effective July 1, 2006, a copy of which is filed as Exhibit 10.1 to Coventrys Current Report on Form 8-K filed on May 24, 2006. The amount of the allocation is a percentage of base salary and incentive earned for the prior year and ranges from 0% to 55%, based on performance. Each account will fully vest on July 1, 2009 and will be paid out in cash, subject to the attainment of pre-
established performance criteria for each performance period. In the event the performance criteria are not met in any period, the award for that period is forfeited. For the twelve month period ended December 31, 2006, the performance criteria were based on the attainment of budgeted EPS. The performance criteria for the twelve months ended December 31, 2006 was met, and the participants were credited the following amounts in accounts under the 2006 Mid-Term Executive Retention Program:
Executive Officer | 2006 Allocation | 2006 Stock Equivalent Allocation |
Dale B. Wolf, Chief Executive Officer | $ 1,147,500 | $ 401,610 |
Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and Treasurer | $ 323,750 | $ 113,302 |
Thomas P. McDonough, President | $ 621,250 | $ 217,448 |
Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations, and Chief Information Officer | -0- | -0- |
Francis S. Soistman, Jr., Executive Vice President, Government & Individual Plans | $ 393,750 | $ 137,804 |
Other Benefit Plans and Arrangements
In addition to their base salaries and incentives, Coventrys Chief Executive Officer, Chief Financial Officer, and three most highly compensated executive officers are also eligible to:
| | Participate in Coventrys long-term incentive plan under its 2004 Incentive Plan, a copy of which is filed as Exhibit 10.17 to Coventrys Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 16, 2005, which can be in the form of stock options, stock appreciation rights, restricted stock, performance awards, other stock-based awards or cash; and |
| | Participate in Coventrys 401(k) Restoration and Deferred Compensation Plan, as amended, a copy of which is filed as Exhibit 10.31 to Coventrys Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March 16, 2005, Exhibit 10 to Coventrys Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed on August 9, 2005, and Exhibit 10.29.3 to Coventrys Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed herewith. |