Company: EHC
Filing Date: 2025-04-01
Form Type: DEF 14A
Source: 0000785161-25-000013
Chunk: 22

Company: Encompass Health Corp
Filing Date: 2025-04-01
Form: DEF 14A
Chunk 22
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. Equity awards are the simplest, most direct way to align management and employee interests with those of stockholders. In order to balance our compensation goals with stockholder interests in limiting dilution, we generally limit equity awards to management positions (as opposed to broad-based awards). As a general rule, the more senior or highly compensated the position, the larger the portion of the total incentive opportunity that is provided in equity. Both the equity and cash incentive awards provided for in the 2025 Plan allow our board of directors and its Compensation and Human Capital Committee (referred to in this proposal as the “Committee”) to structure our compensation program to strengthen the commitment of employees to the company, motivate them to faithfully and diligently perform their responsibilities, and attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the company. See “Executive Compensation Philosophy” beginning on page 42for additional discussion.

The principal features of the 2025 Plan are summarized below. This summary is qualified in its entirety by reference to the full text of the 2025 Plan, a copy of which is attached as Appendix B to this proxy statement. Additional information regarding the 2016 Plan and other previous equity compensation plans may be found in “Equity Compensation Plans” beginning on page 63. The following table also includes information regarding outstanding awards under the 2016 Plan, as of the record date for the Annual Meeting.

| Item                                                                                                               |     | As of 3/7/2025 |           |             |
| Shares of Common Stock Outstanding                                                                                 |     |                |           | 100,967,059 |
| Shares Remaining Available for Future Awards under 2016 Plan (Shares to be terminated after approval of 2025 Plan) |     |                |           |   4,634,725 |
| Stock Options Outstanding                                                                                          |     |                |           |     866,805 |
| Weighted Average Exercise Price                                                                                    |     |                |           |      $56.36 |
| Weighted Average Remaining Term                                                                                    |     |                |           |        5.24 |
| Full Value Awards Outstanding                                                                                      |     |                | 1,514,880 |             |

The board of directors unanimously recommends a vote “FOR” the approval of the 2025 Omnibus Performance Incentive Plan.

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#### Dilution, Overhang and Burn Rate
While the use of equity incentives is an important part of our compensation program, we