Document

DEF 14A 1 ctre2022proxy.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box:


			☐			Preliminary Proxy Statement
			☐			Confidential, For Use of the Commission only (as permitted by Rule 14a-6(e)(2))
			☒			Definitive Proxy Statement
			☐			Definitive Additional Materials
			☐			Soliciting Material Pursuant to §240.14a-2

CARETRUST REIT, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):


			☒			No fee required.
			☐			Fee previously paid with preliminary materials.
			☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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CARETRUST REIT, INC.

905 Calle Amanecer, Suite 300

San Clemente, California 92673

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 3, 2022

TO THE STOCKHOLDERS OF CARETRUST REIT, INC.:

The annual meeting of the stockholders (the “Annual Meeting”) of CareTrust REIT, Inc. (the “Company,” “we,” “our,” or “us”) will be held at the Company’s offices located at 905 Calle Amanecer, Suite 300, San Clemente, California 92673, at 9:00 a.m. PDT, on Tuesday, May 3, 2022, for the following purposes:

(1) To elect Ms. Diana M. Laing, Ms. Anne Olson, Mr. Spencer G. Plumb, Mr. Gregory K. Stapley and Ms. Careina D. Williams to the Board of Directors to serve until the Company’s 2023 annual meeting of stockholders and until their respective successors are duly elected and qualified.

(2) To approve, on an advisory basis, the compensation of the Company’s named executive officers.

(3) To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022.

(4) To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.

The accompanying Proxy Statement more fully describes these matters and we urge you to read the information contained in the Proxy Statement carefully. The Board of Directors recommends a vote FOR the election to the Board of Directors of each of the Board of Director’s five director nominees, FOR the compensation of our named executive officers, and FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2022.

ONLY STOCKHOLDERS OF RECORD OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON STOCK AS OF THE CLOSE OF BUSINESS ON MARCH 9, 2022, THE RECORD DATE, WILL BE ENTITLED TO NOTICE OF AND TO VOTE AT THE ANNUAL MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.

We are requesting that you register in advance if you plan to attend the Annual Meeting in person so we may ensure we have adequate space for all attendees. Please email us at ir@caretrustreit.com with the number of planned in-person attendees no later than 5:00 p.m. PDT on April 29, 2022 if you plan to attend the Annual Meeting in person.

Your vote is important. Whether or not you expect to attend the Annual Meeting, please submit your proxy as soon as possible.


						CARETRUST REIT, INC.
						BY ORDER OF THE BOARD OF DIRECTORS


San Clemente, California									GREGORY K. STAPLEY
Dated: March 18, 2022									EXECUTIVE CHAIRMAN OF THE BOARD

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			Page
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS			1
GENERAL INFORMATION ABOUT THE ANNUAL MEETING			1
PROPOSAL 1: ELECTION OF DIRECTORS			5
CORPORATE GOVERNANCE			8
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY			15
EXECUTIVE OFFICERS			16
COMPENSATION DISCUSSION AND ANALYSIS			18
2021 NAMED EXECUTIVE OFFICERS			18
INTRODUCTION			18
EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS			19
OBJECTIVES OF OUR EXECUTIVE COMPENSATION PROGRAM			19
ROLE OF COMPENSATION COMMITTEE			19
ROLE OF COMPENSATION CONSULTANT			20
PEER COMPANIES			20
ROLE OF STOCKHOLDER SAY-ON-PAY VOTES			21
MATERIAL ELEMENTS OF COMPENSATION			22
COMPENSATION GOVERNANCE PRACTICES			31
POLICY WITH RESPECT TO SECTION 162(M)			32
COMPENSATION COMMITTEE REPORT			33
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			33
EXECUTIVE COMPENSATION TABLES			34
SUMMARY COMPENSATION TABLE — 2019 — 2021			34
GRANTS OF PLAN-BASED AWARDS IN 2021			35
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR END			37
OPTION EXERCISES AND STOCK VESTED IN 2021			38
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			38
PAY RATIO DISCLOSURE			41
DIRECTOR COMPENSATION			42
EQUITY COMPENSATION PLAN INFORMATION			43
PROPOSAL 2: ADVISORY APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION			45
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			46
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			47
AUDIT COMMITTEE REPORT			48
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			49
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			50
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2023 ANNUAL MEETING OF STOCKHOLDERS			50
OTHER MATTERS			52
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS			52
AVAILABLE INFORMATION			53
APPENDIX A — RECONCILIATION OF NON-GAAP FINANCIAL MEASURES			A-1

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CARETRUST REIT, INC.

905 Calle Amanecer, Suite 300

San Clemente, California 92673

Proxy Statement

For the Annual Meeting of Stockholders

to be Held on May 3, 2022

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors” or the “Board”) of CareTrust REIT, Inc., a Maryland corporation, for use at the annual meeting of stockholders to be held at the Company’s offices located at 905 Calle Amanecer, Suite 300, San Clemente, California 92673, at 9:00 a.m. PDT, on Tuesday, May 3, 2022 (the “Annual Meeting”). On or about March 18, 2022, proxy materials for the Annual Meeting, including this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”), are being made available to stockholders entitled to vote at the Annual Meeting.

When used in this Proxy Statement, the terms “we,” “us,” “our,” “CareTrust REIT,” or the “Company” refer to CareTrust REIT, Inc. and its subsidiaries unless the context requires otherwise.

IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

This Proxy Statement and our Annual Report are available on the Internet at www.proxyvote.com. These materials are also available in the “Investor” section of our website at www.caretrustreit.com. References to our website in this Proxy Statement are provided for convenience only and the content on our website does not constitute part of this Proxy Statement.

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

Notice of Internet Availability

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials, including our Proxy Statement and our Annual Report, to stockholders on the Internet. Accordingly, we are mailing a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) to our stockholders that did not request to receive paper copies of our proxy materials and Annual Report or are otherwise receiving our proxy materials electronically by email. The Notice of Internet Availability contains instructions on how stockholders can access those documents over the Internet and vote their shares. All stockholders who do not receive a Notice of Internet Availability, or who have not consented to receive their proxy materials electronically by email, will receive a printed copy of the proxy materials by mail.

Attending the Annual Meeting

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Items of Business to be Voted on at the Annual Meeting

At the Annual Meeting, the stockholders of the Company will be asked to vote on the following three proposals:

•To elect Ms. Diana M. Laing, Ms. Anne Olson, Mr. Spencer G. Plumb, Mr. Gregory K. Stapley and Ms. Careina D. Williams to the Board of Directors to serve until the Company’s 2023 annual meeting of stockholders and until their respective successors are duly elected and qualified (Proposal 1).

•To approve, on an advisory basis, the compensation of the Company’s named executive officers (Proposal 2).

•To ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for the year ending December 31, 2022 (Proposal 3).

We will also consider other business that properly comes before the Annual Meeting.

The Board of Directors recommends you vote FOR the election to the Board of Directors of each of the Board of Director’s five director nominees, FOR the compensation of the Company’s named executive officers, and FOR the ratification of the appointment of Deloitte as the Company’s independent registered public accounting firm for the year ending December 31, 2022.

Available Voting Methods

Your vote is very important. Whether or not you plan to attend the Annual Meeting in person, you should vote your shares by using one of the methods described below to ensure your shares will be counted.

Stockholders of record. If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are considered the “stockholder of record” with respect to those shares and the proxy materials were made available directly to you by the Company. As a stockholder of record, you may vote your shares in person at the Annual Meeting, or by submitting a proxy over the Internet by following the instructions provided in the Notice of Internet Availability. If you received a printed copy of the proxy materials, you can also submit a proxy by mail or telephone pursuant to the instructions provided in the proxy card enclosed with the proxy materials.

Beneficial stockholders. Most of our stockholders hold their shares through a broker, bank or other nominee (that is, in “street name”) rather than directly in their own name. If your shares are held in street name, you are considered the “beneficial stockholder” of such shares and the proxy materials were made available to you by the organization holding your shares. As a beneficial stockholder, you may submit your voting instructions over the Internet by following the instructions provided in the Notice of Internet Availability, or, if you received a printed copy of the proxy materials, you can also submit voting instructions by telephone or mail by following the instructions provided in the voting instruction form sent by your broker, bank or other nominee. If you are a beneficial stockholder, you may not vote your shares in person at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting.

If you receive more than one Notice of Internet Availability or set of proxy materials, it means your shares are registered differently (for instance, under different names) or are held in more than one account. Please follow the voting instructions on each Notice of Internet Availability, proxy card or voting instruction form you receive.

Record Date and Quorum Requirements

Our Board of Directors has fixed March 9, 2022 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 97,047,419 shares of our common stock, par value $0.01 per share (“Common Stock”), were issued and outstanding. Each outstanding share of Common Stock will be entitled to one vote, and all shares of Common Stock will vote as a single class with respect to all matters submitted to a vote of the stockholders at the Annual Meeting.

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To constitute a quorum for the conduct of business at the Annual Meeting, a majority of the votes entitled to be cast at the Annual Meeting must be present in person or represented by proxy at the Annual Meeting. Abstentions and “broker non-votes” will be counted as present and entitled to vote for purposes of determining the existence of a quorum.

Deadline for Voting Your Shares

If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. Eastern Time on May 2, 2022 in order for your shares to be voted at the Annual Meeting. However, if you are a stockholder of record and you received a copy of the proxy materials by mail, you may instead mark, sign and date the proxy card you received and return it in the accompanying prepaid and addressed envelope so that it is received by the Company before the polls close for voting at the Annual Meeting in order for your shares to be voted at the Annual Meeting. If you hold your shares in street name, please provide your voting instructions by the deadline specified by the broker, bank or other nominee that holds your shares.

Changing Your Vote or Revoking a Previously Submitted Proxy

If you are a stockholder of record, you have the power to change or revoke a previously submitted proxy at any time before it is exercised by: delivering to the Secretary of the Company, before the polls close at the Annual Meeting, an instrument revoking such proxy; properly submitting a proxy on a later date via Internet or by telephone or mail by 11:59 p.m. Eastern Time on May 2, 2022; or by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not by itself constitute revocation of a proxy. For shares held in street name, you may revoke any previous voting instructions by submitting new voting instructions to the broker, bank or other nominee holding your shares by the deadline for voting specified in the voting instructions provided by your broker, bank or other nominee. Alternatively, if your shares are held in street name and you have obtained a legal proxy from the broker, bank or other nominee giving you the right to vote the shares at the Annual Meeting, you may revoke any previous voting instructions by attending the Annual Meeting and voting in person.

Required Vote

Election of Directors (Proposal 1): Each director nominee will be elected at the Annual Meeting if he or she receives a majority of the votes cast with respect to his or her election (that is, the number of votes cast FOR the nominee must exceed the number of votes cast AGAINST the nominee). The majority voting standard does not apply, however, in a contested election where the number of director nominees exceeds the number of directors to be elected at an annual meeting of stockholders. In such circumstances, directors will instead be elected by a plurality of all the votes cast in the election of directors at the annual meeting at which a quorum is present. The election of directors at the Annual Meeting is not contested.

Under Maryland law, if an incumbent director is not re-elected at a meeting of stockholders at which he or she stands for re-election, then the incumbent director continues to serve in office as a holdover director until his or her successor is elected. To address this “holdover” issue, our Amended and Restated Bylaws (“Bylaws”) provide that if an incumbent director is not re-elected due to his or her failure to receive a majority of the votes cast in an uncontested election, the director will promptly tender his or her resignation as a director, subject to acceptance by the Board. The nominating and corporate governance committee will then make a recommendation to our Board as to whether to accept or reject the tendered resignation, or whether other action should be taken. Our Board will act on the nominating and corporate governance committee’s recommendation and publicly disclose its decision, along with its rationale, within 90 days after the date of the certification of the election results.

Other Items (Proposals 2 and 3): Once a quorum has been established, pursuant to our Bylaws, approval of each of the other items to be submitted for a vote of the stockholders at the Annual Meeting requires the affirmative vote of a majority of all of the votes cast on the proposal at the Annual Meeting. Notwithstanding this vote standard required by our Bylaws, Proposal 2 (advisory approval of named executive officer compensation) and Proposal 3 (ratification of the appointment of Deloitte as our independent registered public accounting firm) are only advisory votes and are not binding on us. Our Board of Directors will consider the outcome of the vote on both of these proposals in considering what action, if any, should be taken in response to the advisory vote by stockholders.

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How Votes Are Counted at the Annual Meeting

For Proposal 1 (election of directors), Proposal 2 (advisory approval of named executive officer compensation) and Proposal 3 (ratification of the appointment of Deloitte as our independent registered public accounting firm), you may vote FOR, AGAINST or ABSTAIN.

For each proposal, shares voted ABSTAIN will not be counted as a vote cast on such proposal and therefore will not be counted in determining the outcome of the proposal.

If you hold your shares in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may generally vote your shares in its discretion on routine matters. However, a broker cannot vote shares held in street name on non-routine matters unless the broker receives voting instructions from the stockholder. Proposal 3 (ratification of the appointment of Deloitte as our independent registered public accounting firm) is considered a routine matter, while each of Proposal 1 (election of directors) and Proposal 2 (advisory approval of named executive officer compensation) is considered a non-routine matter. Accordingly, if you hold your shares in street name and you do not submit voting instructions to your broker, your broker may exercise its discretion to vote your shares on Proposal 3, but will not be permitted to vote your shares on any of the other items at the Annual Meeting. If your broker exercises this discretion, your shares will be voted on Proposal 3 in the manner directed by your broker, but your shares will constitute “broker non-votes” for each of Proposals 1 and 2. A broker non-vote will not be counted in determining the outcome of Proposals 1 and 2 because it will not be considered a vote cast on those proposals.

If you properly submit a proxy or voting instructions but do not indicate your specific voting instructions on one or more of the items listed above in the Notice of Annual Meeting, your shares will be voted as recommended by the Board of Directors on those items.

Solicitation of Proxies

The expenses of preparing, assembling, printing and mailing the Notice of Internet Availability, this Proxy Statement and the materials used in the solicitation of proxies will be borne by the Company. Proxies will be solicited through the Internet and the mail and may be solicited by our officers, directors and employees in person or by telephone or email. Our officers, directors and employees will not receive additional compensation for any such solicitation efforts. We do not anticipate paying any compensation to any other party for the solicitation of proxies but may reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to beneficial owners. We may retain the services of a proxy solicitation firm if, in the Board’s view, it is deemed necessary or advisable. Although we do not currently expect to retain such a firm, we estimate that the fees of any such firm retained by us could be up to $50,000 plus out-of-pocket expenses, all of which would be paid by us.

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PROPOSAL 1: ELECTION OF DIRECTORS

General

Our Board of Directors is currently comprised of five directors, with each director serving a term that continues until the Annual Meeting and until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. As further described below, our Board of Directors has selected five director nominees for election at the Annual Meeting. In March 2022, Mr. Allen Barbieri resigned from our Board of Directors and the Board of Directors appointed Ms. Careina D. Williams to the Board to fill the vacancy resulting from Mr. Barbieri’s resignation. Ms. Williams was initially identified as a potential director candidate by one of our independent directors. In addition, to facilitate the further refreshment of our Board of Directors, including to increase its diversity and lower the average tenure of our Board members, the Board has nominated one new director nominee, Ms. Anne Olson, who is not currently a director of the Company. Ms. Olson was initially identified as a potential director candidate by our Executive Chairman. Mr. Jon D. Kline is not a nominee for election at the Annual Meeting and his term of service will end immediately prior to the Annual Meeting.

Our Board of Directors selected Ms. Diana M. Laing, Ms. Anne Olson, Mr. Spencer G. Plumb, Mr. Gregory K. Stapley and Ms. Careina D. Williams as its nominees for election to our Board at the Annual Meeting. Other than Ms. Olson and Ms. Williams, all of our director nominees were previously elected to serve on our Board of Directors by our stockholders. If all of the director nominees are elected to the Board at the Annual Meeting, our Board of Directors will continue to consist of five directors immediately following the Annual Meeting.

Each of the nominees standing for election has consented to being named in this Proxy Statement and to serve as a director if elected. We have no reason to believe that any nominee will be unable or unwilling for good cause to serve if elected. In the event any nominee is unable for any reason or unwilling for good cause to serve at the time of the Annual Meeting, the persons who are designated as proxy holders may exercise discretionary authority to vote for a substitute nominee selected by our Board of Directors or our Board of Directors may reduce the number of directors on the Board.

Director Nominees

Set forth below is biographical information about each of our director nominees. Such information is current as of the date of this Proxy Statement. The information presented below for each director nominee includes the specific experience, qualifications, attributes and skills that led us to the conclusion that such individual should be nominated to serve on our Board of Directors in light of our business.


Name	Age	Director Since
Diana M. Laing	67	2019
Anne Olson	45	—
Spencer G. Plumb	47	2017
Gregory K. Stapley	62	2013
Careina D. Williams	46	2022

Diana M. Laing has served as a member of our Board of Directors since 2019 and as our lead independent director since January 2022. Ms. Laing was the Interim Executive Vice President (from October 2018 until May 2019) and Interim Chief Financial Officer (from November 2018 until May 2019) of Alexander & Baldwin, Inc. (NYSE:ALEX), a Hawaii-based publicly-traded commercial real estate investment trust (“REIT”), which completed its conversion to REIT status as of the 2017 tax year. From 2014 until June 2018, Ms. Laing was the Chief Financial Officer of American Homes 4 Rent (NYSE:AMH), a publicly traded REIT focused on the acquisition, renovation, leasing and operation of single-family homes as rental properties. From May 2004 until its merger with Parkway Properties of Orlando, Florida in December 2013, Ms. Laing was the Chief Financial Officer and Secretary of Thomas Properties Group, Inc., a publicly traded real estate operating company and institutional investment manager focused on the development, acquisition, operation and ownership of commercial properties throughout the

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United States. Ms. Laing served as Chief Financial Officer of each of Triple Net Properties, LLC from January through April 2004, New Pacific Realty Corporation from December 2001 to December 2003, and Firstsource Corp. from July 2000 to May 2001. From August 1996 to July 2000, Ms. Laing was Executive Vice President, Chief Financial Officer and Treasurer of Arden Realty, Inc., a publicly traded REIT which was the largest owner and operator of commercial office properties in Southern California. From 1982 to August 1996, she served in various capacities, including Executive Vice President, Chief Financial Officer and Treasurer of Southwest Property Trust, Inc., a publicly traded multi-family REIT which owned multi-family properties throughout the southwestern United States. Ms. Laing began her career as an auditor with Arthur Andersen & Co. She currently serves as an independent director on the board of directors of Alexander & Baldwin, Inc. (NYSE:ALEX), The Macerich Company (NYSE:MAC) and Spirit Realty Capital, Inc. (NYSE:SRC). She is a member of the board of directors of the RREEF Core Plus Industrial Fund and a member of the board of trustees of the Oklahoma State University Foundation. Ms. Laing’s executive leadership experience in multiple REITs and other real estate companies, network of relationships with other real estate professionals, and extensive experience with public companies in accounting, financial reporting, capital markets and finance, qualify her to serve on our Board of Directors.

Anne Olson is standing for election to our Board of Directors for the first time at the Annual Meeting. Ms. Olson currently serves as Chief Operating Officer and Secretary of Centerspace (NYSE:CSR), a multifamily-focused real estate investment trust, since 2018, and served as Centerspace’s Executive Vice President, General Counsel and Secretary from 2017 to 2018. From 2011 to 2017, Ms. Olson was in the private practice of law, most recently as a partner with the law firm of Dorsey & Whitney LLP in its Real Estate Practice Group, and previously with Lindquist & Vennum LLP, where her practice focused on real estate development and investments for REITs, private equity funds, and national developers and owners. From 2006 to 2011 she served as Director of Investment Operations and in-house counsel for Welsh Companies, LLC and its affiliates. Prior to 2009, Ms. Olson served as Vice President and Corporate Counsel for U.S. Bank, N.A., and as an associate attorney at Larkin, Hoffman, Daly & Lindgren LLC and Dorsey & Whitney LLP. Ms. Olson is an active member of the Urban Land Institute and the National Multifamily Housing Council and is a member of its Innovation Committee. She holds a B.A. in English from Drake University, and a J.D. from Drake University Law School. Ms. Olson’s executive leadership experience in a growing public REIT, expertise in complex real estate transactions, legal experience working in and advising public and other companies, and general real estate knowledge and experience qualify her to serve on our Board of Directors.

Spencer G. Plumb has served as a member of our Board of Directors since 2017. Mr. Plumb serves as President and Chief Executive Officer of Sabin Holdings, LLC, a global real estate platform launched in 2016. Prior to Sabin Holdings, LLC, Mr. Plumb co-founded Excel Trust, Inc. (formerly NYSE:EXL) in 2009 and served as its President and Chief Operating Officer and as a member of its Board of Directors. Excel Trust, Inc. was acquired and taken private by Blackstone Property Partners in July 2015. In addition, Mr. Plumb has held various positions over his career with other public and private companies, including Excel Realty Holdings, Price Legacy Corporation, Excel Legacy Corporation, New Plan Excel Realty Trust, Excel Realty Trust, and Excel Interfinancial Corporation. Mr. Plumb also serves on the board of directors of The Sabin Children’s Foundation, whose mission is to relieve the distress of children around the world. Mr. Plumb received a B.A. in Economics from Brigham Young University. Mr. Plumb’s leadership experience, his executive leadership experience in a REIT, and general real estate and REIT background qualify him to serve on our Board of Directors.

Gregory K. Stapley has served as a member of our Board of Directors since CareTrust REIT’s formation in 2013. Mr. Stapley has served as our Executive Chairman since January 2022 and previously served as our Chairman from 2014 to January 2022. He previously served as our President from our formation in 2013 until February 2021 and as our Chief Executive Officer from our formation until January 2022. Prior to founding CareTrust REIT, he served as Executive Vice President and Secretary of The Ensign Group, Inc. (“Ensign”), where he was instrumental in assembling the real estate portfolio that became CareTrust REIT’s initial asset base at the time CareTrust REIT became an independent company in 2014. A co-founder of Ensign, he also served as Ensign’s Vice President, General Counsel and Assistant Secretary beginning shortly after Ensign’s founding in 1999. Mr. Stapley previously served as General Counsel for the Sedgwick Companies, an Orange County-based manufacturer, wholesaler and retailer with 192 retail outlets across the United States. Prior to that, Mr. Stapley was an equity member of the Phoenix law firm of Jennings, Strouss & Salmon PLC, where his practice emphasized real estate transactions and

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government relations. Having served as CareTrust REIT’s Chairman since 2014 and as its Chief Executive Officer from 2014 to January 2022, as Ensign’s Executive Vice President from 2009 to 2014 and as Vice President and General Counsel of Ensign from 1999 to 2009, Mr. Stapley brings to the Board extensive management experience, critical knowledge of our properties and key tenants, substantial industry contacts and knowledge and understanding of the healthcare business in general.

Careina D. Williams has served as a member of our Board of Directors since 2022. Ms. Williams has served as a Principal at Sundance Bay, a real estate private equity firm that specializes in multifamily investing, net lease investing and real estate debt lending nationwide, since May 2020. Ms. Williams served as a member of Sundance Bay’s Advisory Board from 2018 to 2020 prior to joining the firm as a Principal. In addition, from 2017 to 2018, Ms. Williams served as Chief Operating Officer of Zero G Capital Management LLC, an equity hedge fund, and from 2012 to 2017, Ms. Williams served as Principal, Acquisitions and Asset Management at Artemis Real Estate Partners, a real estate investment manager with a focus on multifamily, industrial, office, retail, hospitality, senior housing and medical office. Prior to her role at Artemis Real Estate Partners, from 2003 to 2012, Ms. Williams served as a Principal, Investments at Capri Capital Partners, LLC. Ms. Williams serves as a Trustee and Vice-Chair of the Investments & Endowment Committee of the United Church of Christ, and previously served as a Trustee and Chair of the Finance & Endowment Committee for Peoples Congregational Church of the United Church of Christ. Ms. Williams is also a member of the Urban Land Institute Commercial & Retail Development Council (Silver). Ms. Williams received an A.B. in Economics from Harvard University and an M.B.A. from Harvard Business School. Ms. Williams’ expertise in credit analysis, her network of relationships within the real estate industry, her experience in underwriting, financing, acquiring and managing real estate across a broad array of sub-classes, and her experience with environmental and sustainability issues in real estate qualify her to serve on our Board of Directors.

Recommendation of the Board of Directors

Our Board of Directors recommends that the stockholders vote FOR the election of each of the five director nominees listed above. Unless otherwise instructed, the proxy holders will vote the proxies received by them FOR each such director nominee.

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CORPORATE GOVERNANCE

Director Independence

Our Board of Directors has affirmatively determined that none of the Company’s current non-employee directors (Jon D. Kline, Diana M. Laing, Spencer G. Plumb or Careina D. Williams) has a relationship that, in the opinion of the Board of Directors, would interfere with the director’s exercise of independent judgment in carrying out his or her responsibilities as a director and that each such director is an independent director under the applicable rules of The Nasdaq Stock Market LLC (“Nasdaq”). In addition, if elected at the Annual Meeting, Anne Olson will be considered by the Board of Directors to be an independent director under the applicable rules of Nasdaq. In this Proxy Statement, the aforementioned directors and director nominee, as applicable, are referred to individually as an “Independent Director” and collectively as the “Independent Directors.” Mr. Stapley does not qualify as an independent director under the applicable Nasdaq listing rules due to his current employment with the Company and his prior service as our Chief Executive Officer until January 2022. In addition, our Board of Directors previously determined that Mr. Barbieri was an independent director under the applicable rules of Nasdaq during his service on the Board through his resignation on March 10, 2022.

Board Leadership Structure

The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes it is in the best interests of the Company to make that determination based upon the position and direction of the Company and the membership of the Board. In January 2022, in connection with Mr. Stapley’s transition to Executive Chairman and Mr. Sedgwick’s appointment as Chief Executive Officer, the Board reviewed its leadership structure and determined to separate the roles of Chief Executive Officer and Chairman of the Board. The Board of Directors determined that having Mr. Stapley, the Company’s former Chief Executive Officer, continue to serve as Chairman continued to make the best use of Mr. Stapley’s extensive knowledge of the Company and its industry. Also in January 2022, the Board of Directors amended the Company’s Corporate Governance Guidelines to provide that if the Chairman of the Board is also the Chief Executive Officer or is a director who does not otherwise qualify as an independent director under the applicable Nasdaq listing rules, the Independent Directors will appoint from amongst themselves a lead independent director of the Board. Since Mr. Stapley, our Executive Chairman, is not an independent director, the Independent Directors appointed Ms. Laing as lead independent director effective January 1, 2022.

Our Board of Directors acknowledges that no single leadership model is right for all companies at all times. As such, our Board periodically reviews its leadership structure and may, depending on the circumstances, choose a different leadership structure in the future.

Lead Independent Director

The duties of our lead independent director include:

•Serving as liaison between the Chairman of the Board and the Independent Directors;

•Being responsible for assisting the Chairman in establishing the agenda and setting meeting schedules for Board meetings;

•Presiding at all meetings of the Board at which the Chairman of the Board is not present;

•Being responsible for coordinating the agenda for, and chairing, the executive sessions of the Independent Directors;

•Being available for consultation and direct communication if required by major stockholders; and

•Performing such other duties and having such other responsibilities as the Board may from time to time delegate to the lead independent director.

Board Role in Risk Oversight

Our Board of Directors is responsible for overseeing the Company’s management of risk. The Board strives to effectively oversee the Company’s enterprise-wide risk management in a way that balances managing risks while

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enhancing the long-term value of the Company for the benefit of the stockholders. The Board of Directors understands that its focus on effective risk oversight is critical to setting the Company’s tone and culture towards effective risk management. To administer its oversight function, the Board seeks to understand the Company’s risk philosophy by having discussions with management to establish a mutual understanding of the Company’s overall appetite for risk. Our Board of Directors maintains an active dialogue with management about existing risk management processes and how management identifies, assesses and manages the Company’s most significant risk exposures. Our Board expects frequent updates from management about the Company’s most significant risks so as to enable it to evaluate whether management is responding appropriately.

Our Board relies on each of its committees to help oversee the risk management responsibilities relating to the functions performed by such committees. Our audit committee periodically discusses with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. Our nominating and corporate governance committee oversees risks relating to the Company’s corporate compliance programs and assists the Board and management in promoting an organizational culture that encourages commitment to ethical conduct and a commitment to compliance with the law. Our sustainability and corporate responsibility committee (the “SCR committee”) oversees climate-related risks and opportunities, as well as risks relating to the Company’s sustainability and corporate responsibility policies and initiatives. Each of these committees is required to make regular reports of its actions and any recommendations to the Board, including recommendations to assist the Board with its overall risk oversight function.

Our Board of Directors believes that the processes it has established to administer the Board’s risk oversight function would be effective under a variety of leadership frameworks and therefore do not have a material effect on our leadership structure described under “— Board Leadership Structure” above.

Compensation Risk Assessment. The compensation committee identifies and considers risks related to our executive compensation, including during its review and approval of our executive compensation program. Our compensation programs are designed to reward our named executive officers and other employees for the achievement of the Company’s corporate strategies, business objectives and the creation of long-term value for stockholders, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. The compensation committee has concluded that the current executive compensation program does not encourage inappropriate or excessive risk-taking. In making its determination, the compensation committee noted that each named executive officer’s direct compensation under our executive compensation program consists primarily of a fixed base salary, an annual incentive bonus opportunity and long-term equity incentive awards. Annual incentive bonuses are balanced with long-term equity incentives, which are generally subject to a multi-year vesting schedule.

Meetings and Attendance

During the year ended December 31, 2021, our Board of Directors held 17 meetings. Each member of the Board during 2021 attended at least 75 percent of the aggregate of all meetings of our Board and meetings of our Board committees on which he or she served during the period that he or she served in fiscal 2021. In addition, the Independent Directors meet in executive sessions at which only Independent Directors are present in conjunction with each regularly scheduled meeting of the Board of Directors. These executive sessions are chaired by our lead independent director.

Although we do not have a formal policy regarding attendance by members of our Board of Directors at our annual meeting of stockholders, we encourage our directors to attend. All of our directors attended the 2021 annual meeting of stockholders.

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Committees of the Board of Directors

Our Board of Directors has an audit committee, a compensation committee, a nominating and corporate governance committee and a sustainability and corporate responsibility committee. Each such committee has a written charter, a copy of which is posted on our website at www.caretrustreit.com under the Investors — Corporate Governance section. Each of our Board committees meets, at times, without management present. The following table presents the composition of the committees of our Board of Directors as of the date of this Proxy Statement and the number of meetings held by each committee in 2021:

Director

Compensation Committee

Audit Committee

Nominating and Corporate Governance Committee

Sustainability & Corporate Responsibility Committee

Jon D. Kline**

Chair

●

Diana M. Laing

●

Spencer G. Plumb

Chair

●

Gregory K. Stapley

Total Meetings in 2021

** Mr. Kline is not a nominee for election at the Annual Meeting and his term of service will end immediately prior to the Annual Meeting. It is expected that Ms. Williams and, if elected at the Annual Meeting, Ms. Olson will be appointed to certain of the Board committees following the Annual Meeting.

Compensation Committee. All members of the compensation committee meet the independence requirements set forth by the Nasdaq listing standards. Each member of the compensation committee is a “non-employee director” (within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). The primary functions of this committee include, among other things, to:

•review executive compensation plans in light of the Company’s goals and objectives with respect to such plans, and adopt new, or amend existing, executive compensation plans as appropriate;

•evaluate the performance of our Chief Executive Officer and other executive officers;

•review and approve the compensation of our executive officers, including salary and bonus awards;

•review and make recommendations to the Board regarding compensation to directors for service on the Board and its committees;

•administer our various employee benefit and equity incentive programs;

•review and discuss with management our Compensation Discussion and Analysis and recommend to the Board whether the Compensation Discussion and Analysis should be included in the annual proxy statement or annual report, as applicable; and

•prepare an annual report on executive compensation for inclusion in our proxy statement.

The compensation committee may delegate any or all of its responsibilities to a subcommittee consisting of at least two members to the extent consistent with the Company’s Articles of Amendment and Restatement (as so amended, the “Charter”) and Bylaws, applicable law and the rules and regulations of Nasdaq. The compensation committee has no current intention to delegate any of its other responsibilities to a subcommittee. The compensation committee may confer with the Board in determining the compensation for the Chief Executive Officer. In determining compensation for executive officers other than the Chief Executive Officer, the compensation committee considers, among other things, the recommendations of the Chief Executive Officer.

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fiscal 2021, the compensation committee retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its compensation consultant to perform the compensation-related services described below in the Compensation Discussion and Analysis. The compensation committee also retained Infinite Equity as an additional independent compensation consultant in 2021 to provide valuation and design support for our new relative total shareholder return (“TSR”) performance-based equity awards that were introduced into our executive compensation program for 2021. As discussed under “Compensation Discussion and Analysis — Role of the Compensation Consultant” below, the compensation committee assessed the independence of Pearl Meyer and Infinite Equity and concluded that its engagement of Pearl Meyer and Infinite Equity does not raise any conflict of interest with the Company.

Audit Committee. All members of the audit committee meet the independence requirements set forth by the SEC and the Nasdaq listing standards. Each member of our audit committee is financially literate in accordance with the Nasdaq listing standards. Our Board of Directors has determined that each of Messrs. Kline and Plumb and Ms. Laing qualify as an “audit committee financial expert” as that term is defined in the rules and regulations established by the SEC. This designation is a disclosure requirement of the SEC related to the experience and understanding of each of Messrs. Kline and Plumb and Ms. Laing with respect to certain accounting and auditing matters. The designation does not impose on Messrs. Kline or Plumb or Ms. Laing any duties, obligations or liability that are greater than those generally imposed as a member of our audit committee and our Board of Directors, and such designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of our audit committee or Board of Directors. The primary functions of this committee include, among other things, to:

•be responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm;

•review and approve in advance all permitted audit and non-audit engagements and relationships between us and our independent registered public accounting firm;

•evaluate our independent registered public accounting firm’s qualifications, independence and performance;

•review and discuss with our independent registered public accounting firm their audit plan, including the timing and scope of audit activities;

•review our consolidated financial statements;

•review our critical accounting policies and practices;

•review the adequacy and effectiveness of our accounting and internal control policies and procedures;

•review with our management any significant deficiencies and material weaknesses in the design and operation of our internal controls;

•review with our management any fraud that involves management or other employees who have a significant role in our internal control over financial reporting;

•establish procedures for the receipt, retention and treatment of complaints regarding internal accounting controls or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

•review on an ongoing basis and approve or disapprove related party transactions;

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•prepare the audit committee report required by the rules of the SEC to be included in our annual proxy statement; and

•discuss with our management and our independent registered public accounting firm the results of our annual audit and the review of our quarterly consolidated financial statements.

Representatives of our independent registered public accounting firm and our internal financial personnel regularly meet privately with and have unrestricted access to the audit committee.

Nominating and Corporate Governance Committee. The primary responsibilities of the nominating and corporate governance committee are to, among other things:

•assist in identifying, recruiting and, if appropriate, interviewing candidates qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors and the nominating and corporate governance committee;

•recommend to our Board of Directors individuals qualified to serve as directors and on committees of our Board of Directors;

•advise our Board of Directors with respect to Board composition, procedures and committees;

•recommend to our Board of Directors certain corporate governance matters and practices; and

•conduct an annual self-evaluation of our Board of Directors.

Sustainability & Corporate Responsibility Committee. The primary responsibilities of the SCR committee are to, among other things:

•work with management to create and recommend policies relating to our sustainability and corporate responsibility philosophies and initiatives for approval by our Board of Directors;

•review our public sustainability and corporate responsibility communication plans and any reports to be issued in connection with our sustainability and corporate responsibility initiatives;

•to the extent our employee incentive plans for senior management include targets relating to our sustainability and corporate responsibility initiatives, assist the compensation committee in setting and administering any sustainability and corporate responsibility components of our executive incentive compensation plans;

•as requested by the nominating and corporate governance committee, review and make recommendations to our Board of Directors with respect to stockholder proposals relating to sustainability and corporate responsibility matters; and

•assist our Board of Directors in fulfilling its enterprise risk oversight responsibility by periodically assessing and recommending appropriate responses to risks relating to sustainability and corporate responsibility matters, including oversight of climate-related risks and opportunities.

The Company’s Director Nomination Process

As indicated above, our nominating and corporate governance committee is responsible for overseeing the director nomination process. This committee is responsible for assisting the Board of Directors in establishing minimum qualifications for director nominees, including the qualities and skills that members of our Board of Directors are expected to possess. Under our nominating and corporate governance committee charter, which is available at our website at www.caretrustreit.com, these criteria include the candidate’s knowledge, experience, skills, expertise and diversity. Our nominating and corporate governance committee oversees the process to identify

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and evaluate individuals qualified to become members of our Board of Directors. Our nominating and corporate governance committee makes recommendations to our Board of Directors regarding the selection of director nominees for the election at the next annual meeting of stockholders, or to fill vacancies on our Board of Directors occurring between annual meetings of our stockholders.

We believe it is important to have an appropriate mix of diversity for the optimal functionality of the Board of Directors and our Board of Directors and nominating and corporate governance committee are committed to actively seeking qualified women and individuals from minority groups to include in the pool from which new Board members or director nominees are selected. Ms. Williams, who was appointed to the Board in March 2022, self-identifies as African American. If Ms. Olson is elected to our Board at the Annual Meeting then, immediately following the Annual Meeting, one of our five directors will be racially or ethnically diverse and three of our five directors will be female.

Our nominating and corporate governance committee charter requires that the nominating and corporate governance committee consider each candidate’s background and qualifications, including knowledge, diversity, ability, judgment, skills and experience, in the context of the needs and current make-up of the Board of Directors when evaluating director nominees. The Board of Directors believes it is important for each member of the Board of Directors to possess skills and knowledge in the areas of leadership of large, complex organizations, leadership experience in publicly-traded companies, operational experience in heavily-regulated businesses, finance, strategic planning, legal, government relations and relevant industries, especially the healthcare and real estate industries. These considerations help the Board of Directors as a whole to have the appropriate mix of skills and experiences for the optimal functioning of the Board of Directors in its oversight of our Company. As part of its periodic self-assessment process, the nominating and corporate governance committee annually reviews and evaluates its performance, as well as the overall composition of the Board of Directors and the criteria that it uses for selecting nominees in light of the specific skills and characteristics necessary for the optimal functioning of the Board of Directors in its oversight of our Company.

The nominating and corporate governance committee will consider candidates for election or appointment to the Board recommended by stockholders. If a stockholder wishes to recommend a director candidate, he or she should submit such recommendation in writing to the Chair, nominating and corporate governance committee, care of the Secretary of the Company, together with information about the stockholder and the candidate otherwise required for director nominations by a stockholder pursuant to Section 11 of Article II of our Bylaws, a copy of which will be made available upon request. The nominating and corporate governance committee may request additional information concerning the director candidate as it deems reasonably required to determine the eligibility and qualification of the director candidate to serve as a member of the Board of Directors. Stockholders recommending candidates for consideration by our Board of Directors in connection with the next annual meeting of stockholders should submit their written recommendation no later than January 1 of the year of that meeting. All recommendations will be brought to the attention of the nominating and corporate governance committee, and the nominating and corporate governance committee shall evaluate such director nominees in accordance with the same criteria applicable to the evaluation of all director nominees.

Stockholders who wish to nominate a person for election as a director in connection with an annual meeting of stockholders (as opposed to making a recommendation to the nominating and corporate governance committee as described above) must deliver written notice to our Secretary in the manner described in Section 11 of Article II of our Bylaws and within the time periods set forth at the end of this Proxy Statement under the section “Stockholder Proposals and Director Nominations for 2023 Annual Meeting of Stockholders.”

Communications with Directors

Stockholders who would like to send communications to our Board may do so by submitting such communications to our Secretary at CareTrust REIT, Inc., 905 Calle Amanecer, Suite 300, San Clemente, California 92673. Stockholders may also communicate with our Board of Directors as a group using the form available on our website at www.caretrustreit.com under “Contact the Board” in the Investors – Corporate Governance section. We suggest, but do not require, that such submissions include the name and contact information of the stockholder making the submission and a description of the matter that is the subject of the communication. Communications are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances

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outlined in the communication. In that regard, our Board of Directors requests that certain items which are unrelated to the duties and responsibilities of the Board be excluded. The Secretary will not forward to the Board of Directors junk mail, job inquiries, business solicitations, offensive or otherwise inappropriate materials.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all employees, including employees of our subsidiaries, as well as each member of our Board of Directors. We last updated our code of business conduct and ethics in November 2019 to more closely align its provisions with our continuing commitment to sustainability and corporate responsibility. The current code of business conduct and ethics is available at our website at www.caretrustreit.com under the Investors — Corporate Governance section. We intend to satisfy any disclosure required under applicable rules of the SEC or Nasdaq regarding an amendment to, or waiver from, a provision of this code of business conduct and ethics by posting such information on our website, at the address specified above.

Board and Director Evaluation Process

Pursuant to the charter of the nominating and corporate governance committee, the nominating and corporate governance committee oversees an annual evaluation of the performance of the Board, including each committee of the Board. The evaluation process is designed to assess the overall effectiveness of the Board and its committees and to identify opportunities for improving Board and Board committee operations and procedures.

Succession Planning

The compensation committee is responsible for reviewing and making recommendations to the Board for executive officer development and retention and corporate succession plans for the Chief Executive Officer. The compensation committee also periodically works with appropriate members of management to review the Company’s general management succession plans. In performing these functions, the Chief Executive Officer makes available to the compensation committee his recommendations and evaluations of potential successors, along with his review of any development plans recommended for such individuals.

In line with the Board’s succession planning, in December 2021, we announced the appointment of Mr. Sedgwick as our Chief Executive Office effective January 2022. Mr. Sedgwick succeeds founding Chairman and Chief Executive Officer, Mr. Stapley, who is continuing to serve as our Executive Chairman.

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CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

We believe that sustainable development practices and consistent attention to social and governance priorities will help enhance long-term value for stockholders. In addition, our Board of Directors recognizes the importance of our sustainability initiatives and the need to provide effective oversight of those initiatives. In support of these initiatives, in 2020, we established the SCR committee, an ad hoc committee of the Board, and an internal environmental, social and governance steering committee (“ESG committee”), which is made up of a representative group of our employees. For more information on the SCR committee, see “Corporate Governance — Committees of the Board of Directors.” Our ESG committee is an internal, multi-disciplinary body formed to support the Company’s on-going commitment to the environmental, health and safety, corporate social responsibility, corporate governance, sustainability, and other public policy matters relevant to the Company (collectively, “ESG Matters”). The ESG committee, among other things, assists the Company’s senior management in setting the Company’s general strategy related to ESG Matters and develops, proposes, implements and monitors initiatives and policies at the Company based on that strategy.

In 2021, we published our inaugural Corporate Social Responsibility Report, which reflects our commitment to provide regular and transparent reporting on ESG Matters. We also codified many of our existing sustainability practices and philosophies by adopting a set of ESG policies and programs that address concerns such as human rights and climate change. A summary of these policies is provided below. In addition, copies of these ESG policies and our Corporate Social Responsibility Report are posted on our website at www.caretrustreit.com under the Investors — Corporate Governance section.

•Environmental, Social & Governance Policy. This policy sets forth, among other things, our commitment to reducing the environmental risks from our buildings and our business operations, our commitment to advancing our ESG priorities through our incentive compensation plans and our operational and social and governance best practices.

•Policy on Human Rights & Responsibilities. We are committed to the dignity and rights of all people, especially those whose lives may be impacted by our properties and business activities. Our Policy on Human Rights and Responsibilities addresses, among other things, child labor, forced labor, the basic dignity of each resident and patient at our facilities, occupational health and safety, discrimination and the compensation and promotion of our employees.

•Policy on Human Capital. Our employees are at the heart of our Company and we are committed to their health, professional development and workplace satisfaction. Our core philosophies and policies in this regard, which are outlined in our Policy on Human Capital, relate to, among other things, the diversity of our workforce and our commitment to maintaining a workplace free of unlawful discrimination, competitive compensation and benefits for our employees, and our commitment to employee retention, training, engagement and satisfaction.

•Policy on Environmental Sustainability. We strive in our corporate offices, and encourage the operators of our net-leased properties, to more efficiently use resources and avoid or reduce practices that carry environmental risks or negative impacts. As part of our Policy on Environmental Sustainability, we have implemented several corporate office initiatives to promote environmental sustainability.

•Tenant Code of Conduct & Corporate Responsibility. Our Tenant Code of Conduct & Corporate Responsibility (the “Tenant Code”) aims to assist our triple-net tenants in maintaining, renovating, developing and operating their facilities in a manner consistent with generally accepted standards of sound governance. The Tenant Code establishes our Tenant ESG Program and outlines environmental risks and opportunities facing our tenants, such as greenhouse gas emissions, energy and system efficiency and health indoor environmental quality. Through our Tenant ESG Program, we offer subsidies and other

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incentives to tenants who wish to participate in the program and we help facilitate environmentally sound improvements to our properties.

•Vendor Code of Conduct & Business Ethics. We expect our partners, suppliers and vendors, as well as their employees, agents and subcontractors, to comply with our Vendor Code of Conduct & Business Ethics (the “Vendor Code”). Our Vendor Code addresses, among other topics, confidentiality and data protection, human rights and labor standards, health and safety, fair competition and other business practices.

EXECUTIVE OFFICERS

The following table presents information regarding our current executive officers. The information is current as of the date of this Proxy Statement:

Name

Age

Position

Gregory K. Stapley

Executive Chairman

David M. Sedgwick

President and Chief Executive Officer

William M. Wagner

Chief Financial Officer and Treasurer

Mark D. Lamb

Chief Investment Officer

Information on the business background of Gregory K. Stapley is set forth under “Proposal 1: Election of Directors.”

David M. Sedgwick has served as our Chief Executive Officer since January 2022 and as our President since February 2021. He previously served as our Chief Operating Officer from August 2018 through 2021, and as our Vice President-Operations from our formation in 2014 through August 2018. He is a licensed nursing home administrator and, prior to joining CareTrust REIT, served in several key leadership roles at Ensign since 2001. During 2013, he supported Ensign’s skilled nursing operations in Colorado. During 2012, he served as President of Ensign’s Maryland-based urgent care franchise venture, Doctors Express. From 2007 to 2012, Mr. Sedgwick served as Ensign’s President of Facility Services and Chief Human Capital Officer and was responsible for overall facility support services, new acquisition integration, and Ensign University, which included Ensign’s facility Chief Executive Officer recruiting and training program. From 2002 to 2007, he operated three Ensign skilled nursing facilities in two states. Mr. Sedgwick holds a B.S. in Accounting from Brigham Young University and an M.B.A. from the University of Southern California. Mr. Sedgwick is Mr. Stapley’s brother-in-law.

William M. Wagner has served as our Chief Financial Officer and Treasurer since December 2013 and also serves as our principal accounting officer. Mr. Wagner served as our Secretary from December 2013 to October 2016 and from October 2017 to February 2021. Mr. Wagner served as Chief Financial Officer of First Team Real Estate, a private real estate brokerage company, from 2012 to 2013. From 2008 to 2012, Mr. Wagner served as Senior Vice President and Chief Accounting Officer of Nationwide Health Properties, Inc., a healthcare REIT. From 2004 to 2008, Mr. Wagner served as Senior Vice President and Chief Accounting Officer of Sunstone Hotel Investors, Inc., a lodging REIT. From 2001 to 2004, Mr. Wagner served as Vice President, Financial Reporting of The TriZetto Group, Inc. From 1999 to 2001, Mr. Wagner worked for two internet start-up ventures. From 1997 to 1999, Mr. Wagner served as Director, Financial Reporting of Irvine Apartment Communities, Inc., a multifamily REIT. From 1990 to 1997, Mr. Wagner worked for EY Kenneth Leventhal Real Estate Group and served real estate clients including several REITs. Mr. Wagner received a B.A. in Business Administration from the University of Washington and is a Certified Public Accountant (inactive) in the State of California.

Mark D. Lamb has served as our Chief Investment Officer since August 2018. He previously served as our Director of Investments from July 2014 to August 2018, and has been instrumental in building the post-spinoff portion of the Company’s portfolio. He is a licensed nursing home administrator and, prior to joining the Company in 2014, served as an administrator at one of Plum Healthcare’s flagship post-acute facilities from 2011 to 2014. Mr. Lamb served as Director of Investments at Nationwide Healthcare Properties, Inc., a healthcare REIT, from

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2008 until Nationwide Healthcare Properties, Inc.’s acquisition by Ventas, Inc. in 2011. From 2004 to 2008, he worked in multi-family for The Bascom Group and J&B Asset Management in both acquisition and portfolio management capacities. From 2001 to 2004, he served as the Senior Administrator overseeing two skilled nursing facilities for North American Healthcare, Inc. Mr. Lamb holds a B.A. from Pepperdine University and an M.B.A. from the University of Southern California.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes the material elements of the Company’s named executive officer compensation program and analyzes the compensation decisions made for our executive officers included in the Summary Compensation Table below (the “named executive officers”).

2021 Named Executive Officers

Our named executive officers for 2021 were:

Gregory K. Stapley — Chairman and Chief Executive Officer*

David M. Sedgwick — President and Chief Operating Officer*

William M. Wagner — Chief Financial Officer and Treasurer

Mark D. Lamb — Chief Investment Officer

*Mr. Sedgwick was appointed as our Chief Executive Officer in January 2022 succeeding Gregory K. Stapley in that role.

Because only four individuals served as our executive officers at any time during 2021, we have only four named executive officers for 2021.

Introduction

During 2021, our named executive officers continued to navigate through the negative impacts of the COVID-19 pandemic and its effects on our tenants and the industry more generally, and have positioned our company for future growth with a strong balance sheet and capital options available to fund opportunistic growth. Our operating and financial performance highlights achieved in 2021 included:

• Collecting 100% of contractual cash rents from our tenants during 2021;

• Posting net income per diluted common share of $0.74 (compared to $0.85 in 2020), and increasing normalized funds from operations (“FFO” and as normalized “NFFO”) per diluted common share to $1.49 in 2021 (from $1.38 in 2020) and normalized funds available for distribution (“FAD”) per diluted common share to $1.59 in 2021 (compared to $1.43 in 2020);1

• Increasing our common dividend by $0.06 to $1.06 from $1.00, even as certain other healthcare REITs continued to decrease their dividends;

• Maintaining an impressive 3.69x average quarterly net debt at December 31, 2021 to normalized run rate earnings before interest expense, income tax, depreciation and amortization and amortization of stock-based compensation (“EBITDA”) for the year ended December 31, 2021;1

• Acquiring 10 properties (consisting of four skilled nursing facilities, four multi-service campuses and two assisted living facilities), expanding four existing net-lease tenant relationships and starting one new net-lease tenant relationship; and

• Investing approximately $201.7 million (inclusive of transaction costs) in new investment and revenue producing capital expenditures.

(1) See Appendix A for a reconciliation of normalized FFO, normalized FAD and normalized EBITDA to net income computed in accordance with accounting principles generally accepted in the United States (“GAAP”) and the calculation of net debt to normalized run rate EBITDA.

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Executive Compensation Program Highlights

Highlights of our executive compensation program for 2021 include:

•Our executive compensation program is structured so that more than two-thirds of the named executive officers’ total annual compensation opportunity is at risk and tied to both short-term and long-term performance;

•Annual equity and cash incentive bonuses are performance based and tied to the achievement of performance metrics that we believe are aligned with the Company’s corporate strategies, business objectives and the creation of long-term value for our stockholders;

•Similar to 2020, the 2021 long-term equity incentive awards to the named executive officers are divided equally between time-based and performance-based awards. The performance-based equity awards granted under this program for 2021 include several improvements over our prior plan design, including (1) awards will now cliff-vest at the end of three years, rather than being eligible to vest on an annual basis over the length of the performance period, (2) the “catch-up” vesting opportunity for missed performance years in our prior year plan design has been eliminated, (3) awards will now have a different performance metric (the Company’s TSR performance relative to a custom TSR peer group consisting of 16 other publicly traded healthcare REITS) than any of the performance metrics used to measure performance for our annual cash incentive awards, and (4) awards will become earned solely based on our TSR performance, which we believe creates a direct link between the value realized by our named executive officers and our stockholders; and

•Beginning with our executive compensation program for 2020, we added an additional incentive component to the performance metrics for the Chief Executive Officer’s annual incentives that required the achievement of certain measurable environmental, social and governance objectives (“ESG Incentives”), and for 2021 we included ESG Incentives as a performance metric for the annual cash incentive bonus opportunity for our President and Chief Operating Officer in addition to our Chief Executive Officer.

Objectives of Our Executive Compensation Program

Our executive compensation program is designed to achieve the following objectives:

•Attract, motivate and retain quality executive officers to ensure the success and growth of the Company;

•Align executive compensation with the Company’s corporate strategies, business objectives, corporate responsibility initiatives and the creation of long-term value for our stockholders;

•Connect short- and long-term incentive awards to performance metrics that we believe drive the performance of our Common Stock over the long-term;

•Utilize various performance metrics to minimize the potential for risk associated with over-weighting any particular performance metric; and

•Link our named executive officers’ interests with our stockholders’ interests by tying executive compensation to our performance and increases in long-term stockholder value.

Role of the Compensation Committee

Pursuant to its charter, the compensation committee has the authority to determine the amount of compensation given to each of the named executive officers. The compensation committee annually evaluates the performance of each of the named executive officers and determines compensation levels based on its performance evaluation. The compensation committee also, among other things, approves our executive compensation plans and

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policies, and is responsible for administering our equity incentive plan, with authority to approve award grants under the plan. In performing its duties, the compensation committee is authorized to consider the recommendations of our Chief Executive Officer when determining the compensation of the other named executive officers.

Each element of our executive compensation program was unanimously approved by the compensation committee. All compensation committee members are independent under applicable Nasdaq rules. None of our named executive officers is a member of our compensation committee or otherwise had any role in determining the compensation of our other named executive officers, other than the Chief Executive Officer’s recommendations to the compensation committee as to the compensation of the other named executive officers.

Role of the Compensation Consultant

Pursuant to its charter, the compensation committee is authorized to retain or obtain the advice of compensation consultants, outside counsel, experts or other advisors to advise the compensation committee with respect to amounts or forms of executive compensation or in carrying out its other responsibilities. In 2021, the compensation committee retained Pearl Meyer as its independent compensation consultant, who has served as the committee’s compensation consultant since 2020. The compensation committee also retained Infinite Equity as an additional independent compensation consultant in 2021 to provide valuation and design support for our new relative TSR performance-based equity awards that were introduced into our executive compensation program for 2021. The compensation committee was directly responsible for the appointment, compensation and oversight of Pearl Meyer’s and Infinite Equity’s work. The compensation committee has assessed the independence of Pearl Meyer and Infinite Equity pursuant to applicable SEC and Nasdaq rules and concluded that no conflict of interest existed with respect to Pearl Meyer’s or Infinite Equity’s services to the compensation committee. Neither Pearl Meyer nor Infinite Equity has performed any services for us, except for compensation-related services on behalf of, and as instructed by, the compensation committee.

Pearl Meyer’s services related to 2021 compensation included providing advice on a newly constructed peer group described below that was approved in the beginning of 2021 and conducting an independent review of our executive compensation program at the end of 2020 to provide a competitive reference on pay levels, design, structure and performance alignment for our 2021 executive compensation program. As part of its review at the end of 2020, Pearl Meyer analyzed the salaries, target bonus opportunities, target cash compensation opportunities, equity award opportunities and targeted total direct compensation paid by our peer group of companies described below.

Peer Companies

At the end of 2020, the compensation committee engaged Pearl Meyer to provide advice on a newly constructed peer group that would be used by Pearl Meyer in its independent review of our executive compensation program. In constructing our new peer group, Pearl Meyer and the compensation committee determined to select (1) publicly traded REITs that had greater overlap with the peer companies used by proxy advisory firms to evaluate our executive compensation program, and (2) publicly traded REITs that had a comparable market capitalization to us as of August 1, 2020.

The compensation committee selected the following companies as our new peer group for 2021 (the “2021 Peer Group”):

2021 Peer Group

Agree Realty Corporation

Community Healthcare Trust Incorporated

EPR Properties

Four Corners Property Trust, Inc.

Healthcare Realty Trust Incorporated

Healthcare Trust of America, Inc.

Investors Real Estate Trust

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LTC Properties, Inc.

National Health Investors, Inc.

Omega Healthcare Investors, Inc.

Pebblebrook Hotel Trust

Physicians Realty Trust

Piedmont Office Realty Trust, Inc.

Retail Opportunity Investments Corp.

Sabra Health Care REIT, Inc.

Terreno Realty Corporation

Washington Real Estate Investment Trust

The information in the Pearl Meyer compensation survey was used by the compensation committee to inform its decision-making process with respect to the 2021 compensation amounts for the named executive officers. While the compensation committee does not rigidly adhere to a peer-based benchmarking strategy in setting compensation amounts for our named executive officers, the compensation committee’s philosophy is to target our named executive officers’ total targeted direct compensation (which is base salary + target annual cash incentive + target grant date value of long-term equity awards) at approximately the 50th percentile of total targeted direct compensation provided by our peer group companies to their similarly situated executives. Based on the Pearl Meyer compensation survey, we believe the named executive officers’ total targeted direct compensation for 2021 approximated the 50th percentile of total targeted direct compensation provided by our peer group companies to their similarly situated executives.

When reviewing our Summary Compensation Table this year, however, stockholders should take into account that the named executive officers received the following three annual equity awards in 2021 (each of which included time-based and performance-based vesting components): (1) an award granted in 2021 for 2020 performance under our prior philosophy of tying the value of each year’s equity award to our performance against the performance metrics used under our annual cash incentive plan for that year; (2) an annual equity award opportunity for 2021 that was granted in February 2021 under our new philosophy of awarding each named executive officer a competitive targeted annual equity award each year; and (3) an annual equity award opportunity for 2022 that was granted in December 2021 also under our new award philosophy but reflecting a new annual equity grant schedule we transitioned to beginning with the equity awards for 2022. We believe making annual equity awards in the fourth quarter of each calendar year (instead of during the first quarter of each calendar year) will better allow us to take our performance for the calendar year into account when determining the level of equity awards to be granted for the calendar year, while also ensuring that the applicable service period for those awards commences after their grant date. We believe this is a one-time impact created by our change in equity grant philosophy and the change in timing of the annual equity grants that will normalize in 2022 and future years, with future annual equity grants expected to be made late in the fourth quarter of each calendar year.

Role of Stockholder Say-on-Pay Votes

At the Annual Meeting, we will be providing our stockholders with the opportunity to cast a non-binding, advisory vote on the compensation of our named executive officers. This vote is known as the “say-on-pay” proposal. Stockholders have overwhelmingly voted in favor of our say-on-pay proposal since they first had an opportunity to do so at our 2017 annual meeting of stockholders, with over 99% of the votes cast in favor of our say-on-pay proposal at our 2021 annual meeting of stockholders, and over 97% of the votes cast in favor of our say-on-pay proposal at each of our previous annual meetings of stockholders since 2017. We believe the overwhelmingly positive support demonstrates that stockholders support the structure and objectives of our executive compensation program. We believe the refinements introduced into our executive compensation program in 2021 continue to improve the performance-based design of our program, and that our new relative TSR long-term equity awards further link the interests of our named executive officers and our stockholders. The compensation committee will consider the outcome of this year’s say-on-pay proposal when making future compensation decisions for the named executive officers.

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Material Elements of Compensation

2021 Base Salaries

We pay each named executive officer a fixed base salary to provide each executive with a minimum level of cash compensation. One aspect of our executive compensation philosophy is to pay a base salary level that, when combined with the annual performance-based cash bonus opportunity and the target value of annual long-term equity awards, results in more than two-thirds of the named executive officers’ total annual compensation opportunity being at risk and tied to performance metrics and/or the price of our Common Stock.

Decisions regarding adjustments to base salaries are made at the discretion of our compensation committee, after considering each executive’s current base salary, job responsibilities, performance, the base salaries paid by our 2021 Peer Group companies to similarly situated executives and our base salary compensation philosophy described above. No named executive officers are entitled to any automatic base salary increases.

The compensation committee reviewed each named executive officer’s base salary in March 2021 and increased the 2021 base salary of each named executive officer as follows: Mr. Stapley’s base salary was increased from $675,000 to $742,500; Mr. Sedgwick’s base salary was increased from $470,000 to $495,000; Mr. Wagner’s base salary was increased from $465,000 to $472,500; and Mr. Lamb’s base salary was increased from $450,000 to $472,500. Following a review of the Pearl Meyer study, the compensation committee determined the base salary increases were appropriate to adjust for approximate cost of living increases and, for each named executive officer, a merit increase based on 2020 performance and reflecting the response to the COVID-19 pandemic.

2021 Annual Cash Incentive Awards

In General. We provide our named executive officers with a performance-based annual cash incentive compensation opportunity to motivate and reward the executives for their achievement of annual financial and operational goals and other strategic objectives measured over the year. We believe the annual cash incentive opportunity helps further our compensation objective of aligning executive compensation with achievement of the Company’s corporate strategies, business objectives and the creation of long-term value for our stockholders.

Design. Based on input from Pearl Meyer, the compensation committee redesigned the structure of the annual cash incentive program for 2021 to more closely reflect peer group practices. The principal change to the named executive officers’ 2021 cash incentive opportunity was that the compensation committee determined to approve a predetermined target bonus amount for each named executive officer, rather than having percentage values for each performance metric that are multiplied by an executive’s base salary in order to determine the bonus payout. We believe that having a predetermined target bonus amount, coupled with upside and downside leverage, is more consistent with the practices of our peer group based on Pearl Meyer’s study. As further described below, the compensation committee determined to retain the key incentive metrics used for annual cash incentive opportunities in prior years. The compensation committee believes that these incentive metrics have served to effectively incentivize our named executive officers’ performance. For 2021, the compensation committee also determined to continue use of a separate ESG Incentives metric for our Chief Executive Officer, but to also include this component

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as an additional performance metric for the annual cash incentive bonus opportunity for our President and Chief Operating Officer.

Incentive Targets. For 2021, following a review of peer group information based on Pearl Meyer’s study, the compensation committee established the following annual cash incentive bonus targets for each named executive officer:


Named Executive Officer	Annual Cash Incentive Bonus Target
Gregory K. Stapley	$	1,110,000
David M. Sedgwick	$	475,000
William M. Wagner	$	472,500
Mark D. Lamb	$	450,000

Incentive Metrics. Under our annual cash incentive plan design for 2021, the compensation committee selected the following performance measures to evaluate executive incentive performance:

(1) NFFO per share for 2021;

(2) capital deployment;

(3) average net debt to normalized run rate EBITDA calculated at each quarter end during 2021; and

(4) for our Chief Executive Officer and President, certain ESG Incentives as further described below.

FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is an important supplemental measure not computed in accordance with GAAP and measures operating performance for a REIT. FFO is defined by Nareit as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, real estate depreciation and amortization and impairment charges, and adjustments for unconsolidated partnerships and joint ventures. We compute FFO in accordance with Nareit’s definition. NFFO adjusts FFO for certain revenue and expense items that we do not believe are indicative of our ongoing operating results, such as effect of the senior unsecured notes payable redemption, recovery of previously reversed rent, lease termination revenue, accelerated amortization of stock-based compensation, non-routine transaction costs, loss on extinguishment of debt and property operating expenses. Normalized EBITDA represents net income before interest expense (including amortization of deferred financing costs) and amortization of stock-based compensation, and depreciation and amortization, adjusted for certain income and expense items we do not believe are indicative of our ongoing operating results, such as lease termination revenue, property operating expenses, gains and losses on sale of real estate, non-routine transaction costs and loss on extinguishment of debt. These performance measures are non-GAAP financial measures for which net income is the most directly comparable financial measure reported under GAAP.

The compensation committee chose NFFO per share as a performance metric because the committee believes it is a common performance metric used by investors to evaluate the performance of REITs, and the committee believes that motivating the executives to drive growth in our NFFO per share performance will in turn benefit stockholders in the form of increased stockholder returns. The compensation committee determined the threshold, target and high performance levels for our 2021 NFFO per share by measuring them against our NFFO per share expected to be achieved and as communicated to investors as part of our 2021 guidance, and then building in appropriate increases to incentivize the executives to continue to grow our NFFO per share. The compensation committee determined a target level for our 2021 NFFO per share performance that represented an approximate 2.5% increase over the mid-point of our 2021 NFFO per share guidance. In addition, in order to achieve the threshold NFFO per share performance for 2021, we were required to achieve a slightly greater than 1.0% increase in our NFFO per share over the mid-point of our 2021 NFFO per share guidance, and the maximum performance level for the NFFO per share performance metric could be achieved only if our 2021 NFFO per share exceeded our 2021 NFFO per share guidance results by approximately 3.2%. The compensation committee believed the target NFFO per share level would require the named executive officers to successfully execute our business plan during 2021, while it believed the maximum bonus opportunity for the NFFO per share performance metric was a stretch goal that was meant to be difficult to attain. The compensation committee determined that the relative increases over

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our midpoint 2021 NFFO per share guidance for each of the threshold, target and high levels compared to prior years was appropriate in light of the ongoing COVID-19 pandemic and uncertainties about its impact on our tenants and their ability to pay rent as well as uncertainties created by industry dynamics that had disrupted regular patterns of investment growth.

The compensation committee chose our capital deployment and our 2021 average quarterly net debt to normalized run rate EBITDA ratio as performance metrics because it wanted to motivate the executives to grow our portfolio and pursue new tenant relationships with quality operators to further diversify our revenue stream, while at the same time motivating the executives to responsibly manage our leverage ratios and our overall capital structure.

We required a 2021 NFFO per share amount of $1.425 to earn the threshold bonus amount, $1.445 to earn the target bonus amount, and $1.465 to earn the high bonus amount payable with respect to this performance measure. We required capital deployment during 2021 of $100 million to earn the threshold bonus amount, $150 million to earn the target bonus amount, and $200 million to earn the high bonus amount payable with respect to this performance measure. Additionally, a super high performance measure was included as part of the capital deployment objective, which required capital deployment of $400 million to earn the super high bonus amount payable with respect to this performance measure. We required a 2021 average quarterly ratio of net debt to normalized run rate EBITDA to be 4.25x to earn the threshold bonus amount, 4.0x to earn the target bonus amount, and 3.75x to earn the high bonus amount payable with respect to this performance measure. The NFFO per share targets were higher for 2021 than 2020 at each of the three performance levels. The capital deployment targets were held constant compared to 2020, except that the capital deployment target was lower at the super high amount compared to 2020. The net debt-to-normalized EBITDA ratio targets were lower (and thus more difficult to achieve) compared to 2020, except that the target for the high bonus amount was held constant compared to 2020. As noted above, we believe these capital deployment and ratio of net debt to normalized EBITDA targets operated in tandem to motivate the executives to grow and diversify our portfolio while at the same time motivating them to responsibly manage our capital structure and use of leverage. The following table illustrates the performance metrics set forth above for the named executive officers at the threshold, target, high and super high bonus levels.


Performance Measure	Threshold		Target		High		Super High
NFFO per share	$	1.425	$	1.445	$	1.465	$	—
Capital Deployment (in millions)	$	100	$	150	$	200	$	400
Average Quarterly Net Debt to Normalized Run Rate EBITDA	4.25x		4.0x		3.75x		—

In addition to the performance metrics above, the compensation committee decided to continue the ESG Incentives for our Chief Executive and introduce them for our President in 2021 in order to be at the forefront of corporate governance practices for triple-net REITs and reinforce the Company’s commitment to achieving its ESG targets. The ESG Incentives that each of our Chief Executive Officer and President were required to achieve to receive the ESG Incentives amount at either a threshold, target or high level were as follows for 2021:

•ESG Incentives Threshold: Successfully conduct Phase I of the Company’s 50-property benchmarking initiative for 2021.

•ESG Incentives Target: Meet threshold requirement above plus a full rollout of the Company’s Tenant Code with at least three projects thereunder committed and/or commenced in 2021.

•ESG Incentives High: Meet target requirement above plus (i) prepare and publish the 2021 Corporate Social Responsibility Report, with the draft substantially complete by February 15, 2022, and (ii) commence the Phase II benchmarking study extension for 2022.

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The following table illustrates the weighting of each performance measure for each named executive officer at the threshold, target, high and super high bonus levels.

Performance Measure Weighting


Name	Level	NFFO per share		Capital Deployment		Net Debt to Normalized Run Rate EBITDA		ESG Incentives		Total
Gregory K. Stapley	Threshold	25	%	15	%	20	%	5	%	65	%
	Target	40	%	25	%	27.5	%	7.5	%	100	%
	High	55	%	35	%	35	%	10	%	135	%
	Super High	55	%	75	%	35	%	10	%	175	%
David M. Sedgwick	Threshold	25	%	15	%	20	%	5	%	65	%
	Target	40	%	25	%	27.5	%	7.5	%	100	%
	High	55	%	35	%	35	%	10	%	135	%
	Super High	55	%	75	%	35	%	10	%	175	%
William M. Wagner	Threshold	35	%	10	%	20	%	—	%	65	%
	Target	50	%	25	%	25	%	—	%	100	%
	High	65	%	40	%	30	%	—	%	135	%
	Super High	65	%	75	%	30	%	—	%	170	%
Mark D. Lamb	Threshold	30	%	25	%	10	%	—	%	65	%
	Target	40	%	40	%	20	%	—	%	100	%
	High	50	%	55	%	30	%	—	%	135	%
	Super High	50	%	100	%	30	%	—	%	180	%

The actual annual cash incentive earned by each named executive officer is determined by the sum of the percentage values for each metric at the level achieved for that metric multiplied by each executive’s target bonus amount. If the actual performance level achieved for any metric falls below the threshold level, no percentage is awarded for that metric. If the actual performance is above the high level, high level is awarded for that metric (except for capital deployment, where there is a super high opportunity). If actual performance is in between, the percentage for each metric is calculated using straight line linear interpolation.

In January 2022, the compensation committee assessed performance based on actual results achieved for 2021. The compensation committee determined that the Company achieved a 2021 NFFO per share amount of $1.494, 2021 capital deployment of approximately $201.7 million, and a 2021 average quarterly net debt to normalized run rate EBITDA ratio of 3.69x. Despite the business impacts of the COVID-19 pandemic during 2021, the compensation committee determined not to make any adjustments to the original performance targets, as it believed it was important for the named executive officers’ performance to be measured against the original targets.

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The following table illustrates the percentage value actually achieved for each performance metric based on our 2021 performance.


Performance Metric	Threshold			Target			High			Actual
NFFO per share	$	1.425		$	1.445		$	1.465		$	1.494
Gregory K. Stapley	25		%	40		%	55		%	55		%
David M. Sedgwick	25		%	40		%	55		%	55		%
William M. Wagner	35		%	50		%	65		%	65		%
Mark D. Lamb	30		%	40		%	50		%	50		%
Capital Deployment	$100 million			$150 million			$200 million			$201.7 million
Gregory K. Stapley	15		%	25		%	35		%	35		%
David M. Sedgwick	15		%	25		%	35		%	35		%
William M. Wagner	10		%	25		%	40		%	40		%
Mark D. Lamb	25		%	40		%	55		%	55		%
Net Debt to Normalized Run Rate EBITDA	4.25x			4.00x			3.75x			3.69x
Gregory K. Stapley	20		%	27.5		%	35		%	35		%
David M. Sedgwick	20		%	27.5		%	35		%	35		%
William M. Wagner	20		%	25		%	30		%	30		%
Mark D. Lamb	10		%	20		%	30		%	30		%
ESG Incentives	See “ESG Incentives” above
Gregory K. Stapley	5		%	7.5		%	10		%	10		%
David M. Sedgwick	5		%	7.5		%	10		%	10		%
William M. Wagner	—		%	—		%	—		%	—		%
Mark D. Lamb	—		%	—		%	—		%	—		%


Total Annual Cash Incentive Award	Threshold		Target		High		Super High		Actual
Gregory K. Stapley	65	%	100	%	135	%	175	%	135	%
David M. Sedgwick	65	%	100	%	135	%	175	%	135	%
William M. Wagner	65	%	100	%	135	%	170	%	135	%
Mark D. Lamb	65	%	100	%	135	%	180	%	135	%

The following table illustrates the actual 2021 cash incentive awards approved by the compensation committee:


Named Executive Officer	Actual Performance		Target Bonus		Cash Incentive Award
Gregory K. Stapley	135	%	$	1,110,000	$	1,498,500
David M. Sedgwick	135	%	$	475,000	$	641,250
William M. Wagner	135	%	$	472,500	$	637,875
Mark D. Lamb	135	%	$	450,000	$	607,500

Long-Term Equity Incentive Awards Granted in 2021

In General. The compensation committee believes that stock-based incentives align the interests of our named executive officers with the interests of our stockholders, and that the long-term compensation of the named executive officers should be linked to the value provided to our stockholders. Our stock-based incentives are structured in the form of full value stock awards payable in shares of our Common Stock that may increase or decrease in value over the multi-year vesting period. Our stock awards are designed to reward long-term

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performance and generally consist of an equal number of time- and performance-based vesting awards. We also use stock-based compensation as a retention tool. Because the stock awards generally vest over a multi-year period subject to continued employment with the Company (and subject to the achievement of the applicable performance-vesting conditions), these awards provide our executives with an ongoing incentive to continue their employment with the Company and to maximize stockholder value.

As part of the design changes for our 2021 equity awards, we have decided to move away from our prior practice of determining the amount of each named executive officer’s long-term equity award based on the achievement of the annual incentive plan performance metrics in the prior year. Instead, based on the advice of Pearl Meyer, we have switched to a philosophy of awarding each named executive officer a target grant date value of long-term equity awards that is consistent with our philosophy of targeting our named executive officers’ total targeted direct compensation at approximately the 50th percentile of total targeted direct compensation provided by our 2021 Peer Group companies to their similarly situated executives. We believe this is consistent with the practice at our 2021 Peer Group companies and will result in each named executive officer receiving a market-based long-term incentive opportunity each year.

In addition, beginning with our equity grants for 2022, we have also decided to change the timing of our annual equity grant schedule to late in the fourth quarter of each calendar year. We believe making annual equity awards in the fourth quarter of each calendar year (instead of during the first quarter of each calendar year) will better allow us to take our performance for the calendar year into account when determining the level of equity awards to be granted for the calendar year, while also ensuring that the applicable service period for those awards commences after their grant date. However, because Pearl Meyer’s review of our executive compensation program did not occur until the end of 2020, our compensation committee was not able to review and finalize changes to the design and structure of the new program until early 2021. As a result, the first annual equity award opportunity under the new program, which related to 2021, was not made until late February 2021. To transition to the new annual equity grant schedule that we expect to follow for 2022 and in future years, the compensation committee made the annual equity awards for 2022 in December 2021.

As a result of the change in award philosophy and due to the change in the timing of the annual equity awards, for Summary Compensation Table reporting purposes, each named executive officer received the following three annual equity awards in 2021: (1) the award granted in 2021 for 2020 performance under our prior philosophy of tying the value of each year’s equity award to our performance against the performance metrics used under our annual cash incentive plan for that year; (2) the annual equity award opportunity for 2021 that was granted in February 2021 under our new philosophy of awarding each named executive officer a competitive targeted annual equity award each year; and (3) an annual equity award opportunity for 2022 that was granted in December 2021 also under our new award philosophy but reflecting the new annual equity grant schedule we transitioned to beginning with the equity awards for 2022. We believe this is a one-time impact created by our change in equity grant philosophy and the change in timing of the annual equity grants that will normalize in 2022 and future years, with future annual equity grants expected to be made late in the fourth quarter of each calendar year.

2020 Annual Equity Awards. As described above, each named executive officer’s annual equity award earned for 2020 performance was granted in the 2021 calendar year under our prior philosophy and design structure for equity awards. 50% of the number of restricted shares awarded for 2020 performance are subject to additional performance-based vesting conditions over a three-year performance period that began in 2021. These performance vesting shares are split into three separate substantially equal tranches, with one tranche eligible to vest on January 31st in each of 2022, 2023, and 2024. In order for any tranche to vest on each applicable vesting date, we must achieve a specified NFFO per share growth target for the prior year. If the applicable NFFO per share growth target is not achieved for any year in the three-year performance period, the tranche of shares eligible to vest for the missed year will be eligible to vest at the end of any subsequent year in the performance period if we are able to achieve or exceed the established cumulative NFFO per share growth target per year during the performance period through the end of the applicable measurement year. Any dividends payable on these performance vesting shares are subject to the same performance vesting conditions as the underlying shares, and will only become payable if the performance vesting conditions for the underlying shares are achieved.

The remaining 50% of the number of restricted shares awarded for 2020 performance are subject to a time-based vesting requirement. These time-based shares are also split into three separate substantially equal tranches so

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that the time-based shares will vest ratably in three equal installments beginning on January 31st in each of 2022, 2023, and 2024.

2021 Annual Equity Awards and 2022 Annual Equity Awards. Similar to the 2020 grants, the 2021 and 2022 long-term equity incentive awards are each divided equally between time-based and performance-based awards. Time-based awards vest ratably over a three-year vesting period so long as the named executive remains employed with the Company. Under our new equity award philosophy, the named executive officers’ 2021 and 2022 performance-based equity awards will be eligible to cliff-vest at the end of a three-year performance period based on the Company’s TSR performance relative to a custom TSR peer group consisting of other publicly traded healthcare REITs. The compensation committee believes this new performance-based award structure includes several improvements over our prior plan design, including (1) awards will now cliff-vest at the end of three years, rather than being eligible to vest on an annual basis over the length of the performance period, (2) the “catch-up” vesting opportunity for missed performance years in our prior plan design has been eliminated, (3) awards will now have a different performance metric (relative TSR) than any of the performance metrics used to measure performance for our annual cash incentive awards, and (4) awards will become earned solely based on our TSR performance, which we believe creates a direct link between the value realized by our named executive officers and our stockholders.

The relative TSR performance-based awards will vest based on our three-year TSR performance relative to the following publicly-traded REITs:

TSR Award Peer Companies

Community Healthcare Trust, Inc.

Diversified Healthcare Trust, Inc.

Global Medical REIT, Inc.

Healthcare Realty Trust Inc.

Healthcare Trust of America, Inc.

Healthpeak Properties, Inc.

LTC Properties, Inc.

Medical Properties Trust, Inc.

National Health Investors, Inc.

New Senior Investment Group Inc.

Omega Healthcare Investors, Inc.

Physicians Realty Trust

Sabra Health Care REIT, Inc.

Universal Health Realty Income Trust

Ventas, Inc.

Welltower, Inc.

The TSR award peer group companies are the same for both the 2021 TSR awards and the 2022 TSR awards, except that New Senior Investment Group Inc. was removed from the 2022 TSR award peer group because of its acquisition. We selected our TSR award peer group companies based on their similarity to the Company, taking into account their respective businesses and sources of revenue. While there is significant overlap between the TSR award peer group companies and the 2021 Peer Group companies described above, the two peer groups are not identical. This is because the compensation committee believes that the two peer groups are accomplishing different objectives. Many of the TSR award peer group companies have a much larger market capitalization than the Company, which makes them inappropriate to use as peer companies for compensation comparison purposes. However, we believe company size plays a relatively small role in TSR, and that our TSR award peer group companies are valuable comparators to measure our TSR because of the similarity of business models and tenant pools.

The performance period for the 2021 TSR awards is calendar year 2021 through the end of the 2023 calendar year. The performance period for the 2022 TSR awards is calendar year 2022 through the end of the 2024 calendar year. If the Company’s TSR for the three-year performance period compared to the TSRs of the peers for the same period is less than the 25th percentile (the threshold level), 0% of each named executive officers’ TSR awards will vest. If our relative TSR performance is at the 50th percentile (the target level), 100% of each named executive officer’s TSR awards will vest. If the Company achieves relative TSR performance at or above the 85th percentile

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(the maximum level), 200% of each named executive officer’s TSR awards will vest. For performance between target and the threshold and the high levels, the number of TSR awards that vest will be determined by linear interpolation. Any dividends payable on the shares underlying the TSR awards are subject to the same performance vesting conditions as the underlying shares, and will only become payable if the performance vesting conditions for the underlying shares are achieved.

The performance vesting schedule for the TSR awards can be illustrated as follows:


Percentile vs. TSR Award Peers	Performance Level	TSR Awards Earned
>85		200%
85	High/Max	200%
50	Target	100%
25	Threshold	50%
<25	—	—%

Status of Performance-Based Vesting of Prior Long-Term Incentive Awards

In accordance with our long-term equity incentive award program in effect prior to 2021, beginning in 2018 50% of the number of restricted stock awards granted based on the prior year’s performance were subject to additional performance-based vesting conditions based on NFFO growth over a specified performance period (which is either three or four years). The performance period for these awards began in the year the award was granted, with one tranche eligible to vest at the end of each of the calendar years commencing with the year of grant. Similar to the performance-based restricted stock awarded for 2020 performance as described above, each tranche vests at the end of the applicable calendar year only if we achieve a minimum established NFFO per share growth for the year. If the applicable NFFO per share growth target is not achieved for any calendar year in the performance period, the tranche of shares eligible to vest for the missed year will be eligible to vest at the end of any subsequent calendar year in the performance period if we are able to achieve the specified cumulative NFFO per share growth during the performance period through the end of the applicable measurement year. If the NFFO per share growth target is achieved for any calendar year (or on a cumulative basis thereafter during the performance period of the award if the NFFO per share growth target was not achieved in a previous year), the applicable tranche of performance-based restricted stock awards vests and is paid to each named executive officer. At the time of this payment, we also pay each named executive officer a cash amount equal to the dividends that had accrued with respect to the vested performance shares, which dividends only became payable upon achievement of the performance vesting conditions for the underlying shares.

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For 2021, we achieved NFFO per share of $1.494. The following table summarizes the vesting of the previously awarded performance-based restricted stock awards (as determined by the compensation committee following the end of calendar year 2021) based on this NFFO per share achievement:


Award Year	Minimum NFFO Per Share Growth Target for 2021		Number of Shares That Vested for 2021	Number of Shares That Previously Vested	Number of Shares Remaining Eligible to Vest
2018	$	1.438
Gregory K. Stapley			13,808	41,422	—
David M. Sedgwick			5,040	15,120	—
William M. Wagner			6,228	18,682	—
Mark D. Lamb			5,040	15,120	—
2019	$	1.467
Gregory K. Stapley			16,350	8,175	8,175
David M. Sedgwick			5,710	2,855	2,855
William M. Wagner			7,950	3,975	3,975
Mark D. Lamb			5,710	2,855	2,855
2020	$	1.445
Gregory K. Stapley			23,999	—	23,999
David M. Sedgwick			9,322	—	9,322
William M. Wagner			11,252	—	11,252
Mark D. Lamb			9,322	—	9,322
2021	$	1.430
Gregory K. Stapley			14,801	—	29,602
David M. Sedgwick			6,750	—	13,500
William M. Wagner			7,837	—	15,674
Mark D. Lamb			6,750	—	13,500

For more information on the restricted stock awards that were granted to our named executive officers in 2018-2021 based on the prior year’s performance, see our proxy statement filed in those years.

Severance Benefits

We believe that severance protections, particularly in the context of the uncertainty surrounding any potential change in control transaction, play a valuable role in attracting and retaining quality executive officers. Accordingly, in February 2019, we entered into a change in control and severance agreement with each of our named executive officers (each, a “CIC and Severance Agreement”). In connection with his appointment as our Chief Executive Officer in January 2022, we entered into an updated CIC and Severance Agreement with Mr. Sedgwick in December of 2021. We believe that the level of potential benefits helps us to retain our qualified executive team and is more consistent with the severance benefits provided by our 2021 Peer Group companies than our prior practice of providing no severance benefits to the named executive officers.

As described in more detail below under the heading “Potential Payments Upon Termination or Change in Control,” pursuant to the CIC and Severance Agreement, each of the named executive officers is entitled to severance benefits in the event of a termination of employment by us without “cause” or by the executive for “good reason” (as those terms are defined in each executive’s CIC and Severance Agreement), with the level of severance benefits enhanced if such a termination of employment occurs upon or following a change in control of the Company. None of the severance benefits payable under the CIC and Severance Agreement is a “single trigger” benefit triggered by the occurrence of a change in control, and benefits under the CIC and Severance Agreement are only payable on a “double trigger” basis as a result of a qualifying termination of employment. Also as described in

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more detail below under the heading “Potential Payments Upon Termination or Change in Control,” the CIC and Severance Agreement also entitles each named executive officer to specified benefits if the executive’s employment is terminated as a result of an “authorized retirement” or due to the executive’s death or “disability” (as such terms are defined in each executive’s CIC and Severance Agreement). No named executive officer is entitled to receive a “gross-up” or similar payment for any excise taxes that may become payable in connection with a change in control pursuant to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), and, depending on what results in the best after-tax benefit for the executive, benefits may be “cut back” instead in such circumstances.

In addition, under the terms of our stockholder-approved equity incentive plan, outstanding restricted stock awards will be subject to accelerated vesting in connection with a change in control of the Company (with outstanding performance-based awards vesting at the targeted performance level). Please see the “Potential Payments Upon Termination or Change in Control” section below for additional details.

401(k) Retirement Plan

We adopted a 401(k) retirement plan that was originally effective as of June 1, 2014. Full-time employees who have completed three months of service have the opportunity to participate in the 401(k) plan. Our 401(k) plan is intended to qualify under Section 401 of the Code. Employees are able to elect to defer a portion of their eligible compensation not to exceed the statutorily prescribed annual limit in the form of elective deferral contributions to our 401(k) plan. Our 401(k) plan also has a “catch-up contribution” feature for employees eligible to defer amounts over the statutory limit that applies to all other employees. We provide a “safe harbor” nonelective contribution of 3% of each participant’s compensation per plan year at the end of each plan year. Participants are always vested in their personal contributions to the 401(k) plan, and Company nonelective contributions are also vested once made.

Compensation Governance Practices

Anti-Hedging, Pledging and Derivatives Policy

The Company considers it improper and inappropriate for the Company’s directors, executive officers and other employees to engage in short-term or speculative transactions in the Company’s securities and other transactions in the Company’s securities that create the potential for heightened legal risk or the appearance of improper or inappropriate conduct even if they occur at a time when the individual is not aware of material nonpublic information. Accordingly, the Company prohibits these individuals from engaging in short-term trading of the Company’s securities or in any hedging transactions such as, but not limited to, zero-cost collars, equity swaps and forward sale contracts, absent preclearance. The Company also prohibits these individuals from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan absent preclearance.

Compensation Clawback Policy

The Board has adopted a compensation recoupment policy whereby in the event of a restatement of our financial statements to correct a material error, the compensation committee is required to review our incentive compensation awards and may, if it determines appropriate after considering all relevant facts and circumstances, require the reimbursement of the incremental incentive compensation that an executive officer received as a result of the incorrect financial results. Annual bonus payments, long-term cash incentives, stock options, restricted stock, restricted stock units (including performance stock units) and other equity incentive awards that are granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure are each subject to the terms of this clawback policy.

Executive Officer Stock Ownership Guidelines

The Board has adopted a stock ownership policy that is applicable to our executive officers. We believe that this policy aligns the interests of our executive officers with those of our stockholders by requiring executive officers to have direct ownership in shares of our Common Stock. The policy requires our Chief Executive Officer

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to own shares of our Common Stock having a value equal to at least six times his annual base salary, and each of our other executive officers to own shares of our Common Stock having a value equal to at least five times his annual base salary. Shares subject to stock options are not considered owned by the executive for purposes of the policy. The executives covered by the policy are required to be in compliance with the ownership levels above within five years after adoption of the policy, and are required to retain 50% of the net after-tax shares received in respect of equity awards until they are in compliance. As of December 31, 2021, all of our executive officers had met the minimum required level of ownership.

Policy with Respect to Section 162(m)

In making its compensation decisions, the compensation committee considers the impact of Section 162(m) of the Code. Under Section 162(m), the Company is generally precluded from deducting compensation in excess of $1.0 million per year paid to our current or former named executive officers. Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance measures that were set by the Company’s compensation committee under a plan approved by the Company’s stockholders, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1.0 million deductibility limit. However, because we are taxed as a REIT, Section 162(m) considerations are not as significant for us as for other publicly-traded companies that are not taxed as REITs, and the compensation committee maintains the flexibility to approve compensation for the named executive officers based upon an overall determination of what it believes to be in our best interests, even if the compensation paid may not be deductible.

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COMPENSATION COMMITTEE REPORT

The compensation committee of the Board of Directors has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement. Based upon this review and discussion, the compensation committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement.

COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Spencer G. Plumb (Chair)

Allen C. Barbieri*

Diana M. Laing

*Mr. Barbieri resigned from the Board of Directors on March 10, 2022.

The foregoing report of the compensation committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Barbieri and Plumb and Ms. Laing were members of the compensation committee during all of 2021. Mr. Barbieri subsequently resigned from the Board effective March 10, 2022. During the past fiscal year, none of the members of our compensation committee is or has been an officer or employee of our Company or had any relationships requiring disclosure by the Company under the rules of the SEC requiring disclosure of certain relationships and related party transactions. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our Board of Directors or compensation committee.

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EXECUTIVE COMPENSATION TABLES

Summary Compensation Table — 2019 — 2021

The following table sets forth certain information with respect to compensation for the years ended December 31, 2021, 2020 and 2019, earned by, awarded to or paid to our named executive officers.


Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)(1)	Non-Equity Incentive Plan Compensation ($)(2)	All Other Compensation ($)(3)	Total ($)
Gregory K. Stapley	2021	742,500	—	4,477,306	1,498,500	8,700	6,727,006
Chief Executive Officer and Chairman	2020	675,000	—	1,829,624	1,196,775	8,550	3,709,949
	2019	595,000	—	1,438,800	1,161,738	8,400	3,203,938
David M. Sedgwick	2021	495,000	—	3,404,295	641,250	8,700	4,549,245
Chief Operating Officer and President	2020	450,000	—	710,700	466,763	8,550	1,636,013
	2019	345,000	—	502,480	444,188	8,400	1,300,068
William M. Wagner	2021	472,500	—	3,251,032	637,875	8,700	4,370,107
Chief Financial Officer and Treasurer	2020	465,000	—	857,813	526,148	8,550	1,857,511
	2019	375,000	—	699,600	482,813	8,400	1,565,813
Mark D. Lamb	2021	472,500	—	3,013,752	607,500