UNIVERSAL HEALTH SERVICES INC appointed new CEO

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


2023 Annual Incentive Bonus Performance Goals

On March 15, 2023, the Compensation Committee of the Board of Directors (the "Committee") approved specific bonus formulae for the determination of annual incentive compensation for the Company's executive officers pursuant to the 2022 Executive Incentive Plan which was adopted by the Committee on March 23, 2022 (the "Plan") for the year ending December 31, 2023. Under the formulae approved by the Committee, each of the Company's executive officers was assigned a percentage of such executive officer's 2023 base salary as a target bonus based upon corporate performance criteria. The corporate performance criteria target bonus award indicated below for Mr. Marc D. Miller is stipulated in his employment agreement dated December 23, 2020, as amended on March 23, 2022. 

Mr. Alan B. Miller, who previously served as our Chief Executive Officer and Chairman of the Board of Directors, transitioned to the role of Executive Chairman of the Board effective January 1, 2021. As part of his compensation in connection with his role as Executive Chairman of the Board, Mr. Alan B. Miller may be entitled to bonuses and other compensation (including annual incentive bonuses) as may be determined by the Board of Directors.

The following table shows each executive officer's corporate performance criteria target bonus as a percentage of their base salary for 2023. With respect to Messrs. Marc D. Miller and Steve G. Filton, 100% of their annual incentive bonus for 2023 will be determined using the corporate performance criteria, as described below. With respect to Messrs. Sim and Peterson, their 2023 annual incentive bonus will be determined utilizing: (i) 25% of their annual salary based upon the achievement of the corporate performance criteria, and; (ii) 75% of their annual salary based upon the achievement of the divisional income targets, as described below.


Name


Title


Target Award


Marc D. Miller


Chief Executive Officer ("CEO") and President


150

% 


Steve G. Filton


Executive Vice President and Chief Financial Officer ("CFO")


100

% 


Edward H. Sim


Executive Vice President ("EVP") and President-Acute Care Division


100

% 


Matthew J. Peterson


Executive Vice President and President-Behavioral Health Division


100

% 


Pursuant to the Plan and the formulae approved by the Committee, each executive officer will be entitled to receive between 0% and 200% of that executive officer's target bonus based, either entirely (100% for Messrs. Marc Miller and Steve Filton) or in part (25% for Messrs. Sim and Peterson), on the Company's achievement of a combination of: (i) a specified range of target levels of adjusted net income per diluted share attributable to UHS (as set forth in our Proxy Statement), and; (ii) a specified range of target levels of return on capital (adjusted net income attributable to UHS divided by quarterly average net capital) for the year ending December 31, 2023. The adjusted net income per diluted share attributable to UHS may exclude, the impact of other items, if applicable and material, that are, among other things, nonrecurring or non-operational in nature.

Pursuant to the formulae approved by the Committee, Messrs. Sim and Peterson will be entitled to receive between 0% and 200% of their target bonus that is based on the divisional results (75%). The divisional income targets consist of the projected aggregate pre-tax income for our acute care and behavioral health services segments, net of certain deductions which consist primarily of a charge for the estimated cost of capital. The divisional income targets may be adjusted to include or exclude the impact of items, if applicable and material, that are, among other things, nonrecurring or non-operational in nature.

2023 Long-Term Incentive, Stock-Based Compensation Awards

As reflected on the table below, on March 15, 2023, the Committee awarded stock options and/or performance-based restricted stock units to each of our executive officers. The stock options, which were issued at the closing price of our Class B Common Stock on the date of grant (of $117.65 per share), are scheduled to vest in four equal installments on the first, second, third and fourth anniversaries of the grant date and will expire on March 14, 2028. Pursuant to the 2020 Omnibus Stock and Incentive Plan and the formulae approved by the Committee, each executive officer will be entitled to receive between 0% and 150% of that executive officer's target number of performance-based restricted stock units based upon achievement of a pre-established specified range of target levels based on the three-year growth in our earnings before interest, taxes, depreciation & amortization and the impacts of other income/expense and net income attributable to noncontrolling interests.


Performance


Stock 


Based Restricted


Name


Title


Options


Stock Units


Marc D. Miller


CEO and President


119,223 


42,024 


Alan B. Miller


Executive Chairman


62,696 


22,099 


Steve G. Filton


EVP and CFO


30,345 


10,696 


Edward G. Sim


EVP and President-Acute Care Division


0 


10,000 


Matthew J. Peterson


EVP and President-Behavioral Health Division


24,928 


8,787 


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 


Universal Health Services, Inc.


By:


/s/ Steve Filton


Name: Steve Filton


Title: Executive Vice President and

 Chief Financial Officer


Date: March 17, 2023