Company: EHC
Filing Date: 2025-04-01
Form Type: DEF 14A
Source: 0000785161-25-000013
Chunk: 60

Company: Encompass Health Corp
Filing Date: 2025-04-01
Form: DEF 14A
Chunk 60
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 amount of increased noncontrolling interest expense resulting from the contribution of a hospital to a joint venture ($3.2 million), and (ii) the foregone interest income from using cash on hand to fund senior notes redemptions ($1.1 million). Adjusted EBITDA is discussed in more detail, including reconciliations to corresponding GAAP financial measures, in Appendix A to this proxy statement.

2 The Quality/Strategic Objectives Scorecard is a compilation of quality and strategic metrics that track patient satisfaction, patient discharge status, and first year registered nurse (RN) turnover by hospital. Patient Satisfaction results are derived by NRC Health through their Customer Intelligence Platform, a standardized survey of hospital patients. Patient discharge statuses and first year RN turnover are tracked via internal systems.

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Establishing the Target Cash Incentive Opportunity

Under the SMBP, the Committee approves a target cash incentive opportunity for each NEO, based upon a percentage of his or her base salary, “Target Cash Incentive Opportunity as a % of Salary” in the table below. This target cash incentive opportunity is established as a result of the Committee’s “Assessment of Competitive Compensation Practices” described above. The Committee also assigns relative weightings (as a percentage of total cash incentive opportunity) to the objectives as noted below.

| 2024 Senior Management Bonus Plan Weightings |     |                                                    |     |                              |     |                                        |
| Named Executive Officer                      |     | Target Cash Incentive Opportunity as a % of Salary |     | Consolidated Adjusted EBITDA |     | Quality/Strategic Objectives Scorecard |
| Mark J. Tarr                                 |     | 120%                                               |     | 70%                          |     | 30%                                    |
| Douglas E. Coltharp                          |     | 85%                                                |     | 70%                          |     | 30%                                    |
| Patrick Darby                                |     | 75%                                                |     | 70%                          |     | 30%                                    |
| Elissa J. Charbonneau                        |     | 50%                                                |     | 70%                          |     | 30%                                    |
| Andrew L. Price                              |     | 50%                                                |     | 70%                          |     | 30%                                    |

Assessing and Rewarding 2024 Achievement of Objectives

After the close of the year, the Committee assesses performance against the quantitative objectives to determine