Company: UHS
Filing Date: 2025-04-03
Form Type: DEF 14A
Source: 0000950170-25-049925
Chunk: 27

Company: UNIVERSAL HEALTH SERVICES INC
Filing Date: 2025-04-03
Form: DEF 14A
Chunk 27
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 interest groups. In contrast, the annual election of all directors can, in some cases, lead to short-term focus or a concentration on only immediate results, which can discourage or impair long-term strategic objectives and initiatives.

The Company’s Classified Board is Designed to Protect Shareholder Value and Provide Accountability to Shareholders

The Board of Directors believes that the Company’s classified board structure is also in the best interests of the Company and its stockholders because it helps protect stockholder value and provides accountability to stockholders. The classified board structure reduces the Company’s vulnerability to hostile and potentially abusive takeover tactics and better positions the Board of Directors to negotiate effectively on behalf of all of the Company’s stockholders. The classified board structure therefore plays a crucial role in safeguarding the Company against abrupt changes in board composition that could be driven by hostile takeover efforts which seek

| 17                                                   |
| Universal Health Services, Inc. 2025 Proxy Statement |

| Proposal No. 3 |

to rapidly take control of the Company and its assets without paying fair value. A classified board encourages potential acquirors to negotiate with the board directly, thereby positioning the board to negotiate effectively on behalf of our stockholders in order to realize the greatest possible stockholder value. While a classified board of directors alone does not preclude a successful takeover offer, staggered director terms may provide the Company with the time and opportunity to evaluate the fairness of a takeover proposal, to negotiate on behalf of all stockholders, and to weigh alternatives with the objective of maximizing overall stockholder value.

Contrary to the statements made by the proposal proponent, the classified board structure at the Company has not operated as an entrenching mechanism nor has it resulted in an unaccountable board unresponsive to stockholders. Our current corporate governance policies and practices provide stockholders with the ability to effectively express their views and participate meaningfully in director elections and ensure that the Board of Directors is accountable to stockholders. For example:

As a “controlled company” for purposes of NYSE Listed Company Manual Section 303A.00, we are not required to have a majority of independent directors and we are exempt from the NYSE’s requirements relating to compensation committees and nominating/corporate governance committees. However, the Company has a majority of independent directors on our Board of Directors and all independent directors serving on our Compensation Committee and Nominating & Governance Committee. We believe that our Board and committee structure provides independence and good corporate governance practices while our classified board structure preserves our ability to manage the Company in the best interests