Document

DEF 14A 1 inov2021proxy.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 x

Filed by a Party other than the Registrant o

Check the appropriate box:


o			Preliminary Proxy Statement
o			Confidential, for Use of the Commission Only (as permitted by Rule 14a‑6(e)(2))
x			Definitive Proxy Statement
o			Definitive Additional Materials
o			Soliciting Material Pursuant to §240.14a‑12


Inovalon Holdings, 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):
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		(2) Form, Schedule or Registration Statement No.:
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2021 Annual Meeting of Stockholders

The 2021 Annual Meeting of Stockholders of Inovalon Holdings, Inc. (the "2021 Annual Meeting") will be held virtually on June 2, 2021. Due to the ongoing COVID-19 pandemic, we are holding the 2021 Annual Meeting virtually in order to protect the health and safety of our stockholders and employees. You will be able to attend the 2021 Annual Meeting, vote and submit questions during the 2021 Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/inov2021 and entering the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card.

On or about April 12, 2021, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials that contains instructions on how to access our proxy materials on the Internet, how to vote at the meeting, and how to request printed copies of the proxy materials and 2020 Annual Report.

2021 Annual Meeting of Stockholders

Admission requirements

See Part 8 – “Information About the Meeting” for details on admission requirements to virtually attend the 2021 Annual Meeting of Stockholders.


Proxy Voting Options Your vote is important! Whether or not you expect to attend virtually, we urge you to vote your shares by phone, via the Internet, or by signing, dating, and returning the enclosed proxy card or voting instruction form at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares will save us the expense and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your stock at the meeting if you desire to do so, as your vote by proxy is revocable at your option. Voting by the Internet or telephone is fast and convenient, your vote is immediately confirmed and tabulated, and helps us reduce postage and proxy tabulation costs. If you prefer, you can vote by mail by returning the enclosed proxy card or voting instruction form in the addressed, prepaid envelope provided. Please do not return the enclosed paper ballot if you are voting via the Internet or by telephone.						Vote by Internet www.proxyvote.com 24 hours a day / 7 days a week Instructions: 1. Read the accompanying Proxy Statement. 2. Go to the following website: www.proxyvote.com. 3. Have your proxy card or voting instruction form in hand and follow the instructions. You can also register to receive all future stockholder communications electronically, instead of in print. This means that the annual report, Proxy Statement, and other correspondence will be delivered to you via e‑mail.

						Vote by Telephone +1‑800‑690‑6903 via touch tone phone toll‑free 24 hours a day / 7 days a week. Instructions: 1. Read the accompanying Proxy Statement. 2. Call toll‑free: +1‑800‑690‑6903. 3. Have your proxy card or voting instruction form in hand and follow the instructions.

April 12, 2021

Dear Stockholder,

You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”) of Inovalon Holdings, Inc., which will be held virtually on June 2, 2021, at 10:00 a.m. Eastern Time. Due to the ongoing COVID-19 pandemic, we are holding the 2021 Annual Meeting virtually in order to protect the health and safety of our stockholders and employees. In order to attend, vote and submit questions during the 2021 Annual Meeting, visit www.virtualshareholdermeeting.com/inov2021 and enter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting. A virtual meeting will have no impact on stockholders’ ability to provide their proxy by using the Internet or telephone or by completing, signing, dating and mailing their proxy card, each as explained in this Proxy Statement.

The matters expected to be acted upon at the virtual meeting are described in detail in the accompanying Notice of 2021 Annual Meeting of Stockholders and Proxy Statement.

Your vote is important. Please cast your vote as soon as possible over the Internet, by telephone, or by completing and returning the proxy card to ensure that your shares are represented. Your vote by written proxy will ensure your representation at the 2021 Annual Meeting regardless of whether or not you attend virtually. Returning the proxy does not deprive you of your right to virtually attend the 2021 Annual Meeting and to vote your shares.

On behalf of our Board of Directors and our employees, we thank you for your continued interest in and support of Inovalon.

Sincerely,

Keith R. Dunleavy, M.D.

Chairman and Chief Executive Officer

INOVALON HOLDINGS, INC.

4321 Collington Road, Bowie MD 20716

Notice of 2021 Annual Meeting of Stockholders


Date:			June 2, 2021

Time:			10:00 am Eastern Time

Virtual Only:			www.virtualshareholdermeeting.com/inov2021

Record Date:			April 5, 2021. Only Class A and Class B common stockholders of record at the close of business on the record date are entitled to receive notice of, and to vote at, the 2021 Annual Meeting. As of the record date, there were 77,565,331 shares of Class A common stock entitled to vote at the meeting and 78,331,591 shares of Class B common stock entitled to vote at the meeting.

Proxy Voting:			Important. Please vote your shares promptly to ensure the presence of a quorum at the meeting. Voting your shares now via the Internet, by telephone, or by signing, dating, and returning the enclosed proxy card or voting instruction form, will save the expenses and extra work of additional solicitation. If you wish to vote by mail, we have enclosed an addressed envelope that is postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares at the meeting as your proxy is revocable at your option.

Voting Rights:			Holders of our Class A common stock and Class B common stock have identical voting rights, except that holders of our Class A common stock are entitled to one vote per share and holders of our Class B common stock are entitled to ten votes per share. Holders of shares of Class A common stock and Class B common stock will vote together as a single class on proposals presented at the 2021 Annual Meeting.

Items of Business:			• To elect seven directors from among the nominees described in this Proxy Statement;
			• To ratify the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021; • To conduct a non-binding advisory vote to approve the compensation of our Named Executive Officers (as defined in this Proxy Statement); and • To transact such other items of business as may properly come before the meeting.

Admission to Virtual Meeting:			Proof of share ownership will be required to enter the virtual 2021 Annual Meeting. See Part 8 – “Information About the Meeting” for details.


Notice of Internet Availability of Proxy Materials:			In accordance with the rules of the Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials, including this Proxy Statement and our 2020 Annual Report to Stockholders (“2020 Annual Report”), primarily via the Internet. On or about April 12, 2021, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) that contains instructions on how to access our proxy materials on the Internet, how to vote at the meeting, and how to request printed copies of the proxy materials and 2020 Annual Report. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our annual meetings. Our Proxy Statement and 2020 Annual Report are available at investors.inovalon.com under the “SEC Filings” section.

By order of the Board of Directors,

/s/ Kamyar Daneshvar

Kamyar Daneshvar

Corporate Secretary

April 12, 2021

PROXY STATEMENT TABLE OF CONTENTS


PART 1 – CORPORATE GOVERNANCE AT INOVALON
Corporate Governance Principles and Practices			1
Corporate Governance Profile			1
Board Leadership Structure			1
Director Independence			1
Risk Oversight			2
Code of Business Conduct and Ethics			2
PART 2 – BOARD OF DIRECTORS
Director Nominations and Qualifications			4
Director Selection Process			4
Board Membership Criteria			4
Director Candidates Submitted by Stockholders			5
Our Director Nominees			6
Meetings and Meeting Attendance			9
Board Committees			10
Committees of the Board			10
Audit Committee			10
Compensation Committee			11
Nominating and Corporate Governance Committee			11
Security and Compliance Committee			11
Communicating with the Board			12
Director Compensation			12
Fiscal Year 2020 Director Compensation			12
Certain Relationships and Related Transactions			13
Stockholders’ Agreement			13
Indemnification Agreements			13
Equity Grants to Executive Officers and Directors			13
Review, Approval, or Ratification of Transactions with Related Parties			13
PART 3 – EXECUTIVE OFFICERS
Backgrounds			14
Election of Officers			15
PART 4 – COMPENSATION DISCUSSION & ANALYSIS
Overview			16
Advisory Votes on Compensation			16
Executive Compensation Philosophy, Objectives & Design			17
Compensation Setting Process			18
Compensation Consultant			19
Peer Group			19
CEO Compensation			20
CEO Pay Ratio			20
Executive Compensation Program Elements			20
Base Salaries			20
Cash Bonus			21
Long-Term Equity Incentive Awards			22
Employee Stock Purchase Plan			23
Change in Control Payments			23


Welfare and Other Benefits			24
Other Compensation Policies			24
Executive Stock Ownership Guidelines			24
Policy Regarding the Pricing and Timing of Equity Awards			25
Insider Trading Policy and Rule 10b5-1 Sales Plans			25
Tax and Accounting Considerations			25
Risks Related to Compensation Policies and Practices			25
PART 5 – NAMED EXECUTIVE OFFICER COMPENSATION
Fiscal Year 2020 Compensation Tables			27
Summary Compensation Table – 2020			27
Grants of Plan-Based Awards in 2020			27
Outstanding Equity Awards at Fiscal Year‑End			28
Option Exercises and Stock Vested in 2020			29
Employment Agreements			29
Potential Payments upon Termination or Change of Control			30
Equity Compensation Plan Information as of December 31, 2020			31
Compensation Committee Interlocks and Insider Participation			31
Report of the Compensation Committee of the Board of Directors			32
Principal Stockholders			33
PART 6 – AUDIT COMMITTEE MATTERS
Audit Committee Report			35
Fees Billed by Deloitte & Touche LLP			37
Policy on Audit Committee Pre‑Approval of Audit and Permissible Non‑Audit Services of Independent Auditor			37
PART 7 – PROPOSALS TO BE VOTED ON AT THE MEETING
Election of Directors			38
Ratification of Independent Auditor			38
Non-Binding Advisory Vote to Approve the Compensation of our Named Executive Officers			38
Proposals of Stockholders for 2022 Annual Meeting of Stockholders			39
PART 8 – INFORMATION ABOUT THE MEETING
Proof of Ownership Required to Attend Virtual Meeting			41
Solicitation of Proxies			41
Householding			41
Election of Directors			42
Voting Procedures			42
Voting Rights			42
Vote Required; Effect of Abstentions and Broker Non‑Votes			42
Where to Find More Proxy Voting Information			43
Where to Find Our Corporate Governance Documents			43
Other Business			43


Table of Contents			i

PROXY SUMMARY

This summary highlights information contained elsewhere in the Proxy Statement. This summary does not contain all of the information you should consider. Please read the entire Proxy Statement carefully before voting. For the purposes of this summary and the Proxy Statement, Inovalon Holdings, Inc. may also be referred to as “us”, “our”, and the “Company” and, together with its subsidiaries, as “Inovalon.”

2021 Annual Meeting of Stockholders


Date:			June 2, 2021

Time:			10:00 am Eastern Time

Virtual Only:			www.virtualshareholdermeeting.com/inov2021

Record Date:			April 5, 2021

Voting:			Stockholders of record as of the record date are entitled to vote. Each share of Class A common stock is entitled to one vote for each director nominee, one vote for the ratification of the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021, and one non-binding advisory vote to approve compensation of our Named Executive Officers. Each share of Class B common stock is entitled to ten votes for each director nominee, ten votes for the ratification of the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021, and ten non-binding advisory votes to approve compensation of our Named Executive Officers.

Admission To Virtual Meeting:			Proof of share ownership will be required to enter the virtual 2021 Annual Meeting. See Part 8 – “Information About the Meeting” for details.

Meeting Agenda:			• Election of seven directors. • Ratification of the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021. • Non-binding advisory vote to approve the compensation of our Named Executive Officers. • Transact other business that may properly come before the meeting.


Proxy Summary			I

Voting Matters and Vote Recommendation

See Part 7 – “Proposals to be voted on at the meeting” for more information.

Proposal

Matter

Board Vote
Recommendation

Votes Required for
Approval

Abstentions

Uninstructed
Shares

Election of 7 directors

For each director nominee

Plurality

Not voted

Ratification of the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021

For

Majority of voting power represented in person or by proxy

Not voted

Discretionary vote

Non-binding advisory vote to approve the compensation of our Named Executive Officers

For

Majority of voting power represented in person or by proxy*

Not voted

____________________________________________________________________________________________________

* A majority of the votes properly cast is required to approve the compensation of our Named Executive Officers. Since this proposal is an advisory vote, the result will not be binding on our Board of Directors (“Board”), the compensation committee of our Board (the “Compensation Committee”), or the Company. The Board and the Compensation Committee will consider the outcome of the vote when determining the compensation of our Named Executive Officers.


Proxy Summary			II

Our Director Nominees

See Part 2 – “Board of Directors” for more information.

The following table provides summary information about each director nominee. Each director is elected annually by a plurality of votes cast.


Name	Age	Director Since	Occupation	Independent	Other Public Boards	Committee Memberships
						AC	CC	NCG	SCP
Keith R. Dunleavy, M.D.	51	2006	CEO, Inovalon	No	—	—	—	—	M
Denise K. Fletcher	72	2012	Fmr. EVP, Finance of Vulcan Inc.; Fmr. CFO of DaVita, Inc. & MasterCard International, Inc.	Yes	1	C, F	M	M	—
William D. Green	67	2016	Fmr. Chairman & CEO of Accenture plc	Yes	3	—	M	C	—
Isaac (Zak) Kohane, M.D., Ph.D.	60	2019	Marion V. Nelson Professor of Biomedical Informatics at Harvard Medical School	Yes	—	—	—	—	M
Mark A. Pulido	68	2018	Fmr. Chairman & CEO of ABILITY Network Inc.; Fmr. Pres. & CEO of McKesson Corp.	Yes	—	—	—	—	M
Lee D. Roberts	68	2012	Pres. & CEO of Bluewater Consulting; Fmr. Chairman & CEO of FileNet Corp.	Yes	2	M, F	C	—	—
William J. Teuber, Jr.	69	2013	Fmr. Vice Chairman of EMC Corporation	Yes	—	M, F	M	M	C


AC	Audit Committee	C	Chair
CC	Compensation Committee	M	Member
NCG	Nominating and Corporate Governance Committee	F	Financial expert
SCP	Security and Compliance Committee

Attendance

Each director nominee is a current director. Each director attended at least 75% of the aggregate of all fiscal year 2020 meetings of our Board and each committee on which he or she served during the period in which he or she served as a director. All of our directors who were serving as directors at the time attended our 2020 annual meeting of stockholders.


Proxy Summary			III

Auditors

See Part 6 – “Audit Committee Matters” for more information.

We ask that our stockholders ratify the selection of Deloitte & Touche LLP as our independent auditor for fiscal year 2021. Below is summary information about Deloitte & Touche LLP’s fees for services provided in fiscal years 2020 and 2019 (in thousands).


	Year ended December 31,
	2020		2019
Audit	$	1,441	$	1,669
Audit-related fees	—		—
Tax fees	911		629
All other fees	—		—
Total	$	2,352	$	2,298

Non-Binding Advisory Vote to Approve Named Executive Officer Compensation

See Part 7 – “Proposals to be Voted on at the Meeting” for more information.

We ask that our stockholders approve, on a non-binding advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement in accordance with the compensation rules of the SEC. As described in detail under the heading “Compensation Discussion and Analysis,” we seek to closely align the interests of our Named Executive Officers with the interests of our stockholders.

2022 Annual Meeting of Stockholders

Stockholder proposals submitted for inclusion in our 2022 proxy statement pursuant to Rule 14a‑8 of the rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be received by us no later than the close of business on December 13, 2021; provided however, in the event that the date of the 2022 Annual Meeting of Stockholders (“2022 Annual Meeting”) is more than 30 days prior to or delayed by more than 30 days after the anniversary of the 2021 Annual Meeting, stockholder proposals submitted for inclusion in our 2022 proxy statement pursuant to Rule 14a-8 must be received within a reasonable time before we begin to print and send proxy materials relating to the 2022 Annual Meeting.

In addition, any stockholder who wishes to propose a nominee to the Board or propose any other business to be considered by the stockholders, other than a stockholder proposal included in our proxy materials pursuant to Rule 14a‑8 of the rules promulgated under the Exchange Act, must comply with the advance notice provisions and other requirements of Article I, Section 1 of our bylaws, which are on file with the SEC and may be obtained from our Secretary upon request. These notice provisions require that nominations of persons for election to the Board and the proposal of business to be considered by the stockholders for the 2022 Annual Meeting must be received no earlier than the close of business on February 2, 2022 and no later than the close of business on March 4, 2022; provided however, in the event that the date of the 2022 Annual Meeting is more than 30 days prior to or delayed by more than 30 days after the anniversary of the 2021 Annual Meeting, notice by the stockholder to be timely must be so received no earlier than the close of business on the 120th day prior to the 2022 Annual Meeting and no later than the close of business on the later of the 90th day prior to the 2022 Annual Meeting or the 10th day following the day on which public announcement of the date of the meeting is first made.


Proxy Summary			IV

Note about Forward-Looking Statements

This Proxy Statement includes estimates, projections and statements relating to our business plans, objectives and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act. Forward-looking statements may appear throughout this Proxy Statement, including in “Compensation Discussion and Analysis.” These forward-looking statements generally are identified by the words “believe,” “see,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” of our annual reports on Form 10-K and quarterly reports on Form 10-Q. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.


Proxy Summary			V

PART 1 – CORPORATE GOVERNANCE AT INOVALON

Corporate Governance Principles and Practices

Corporate Governance Profile

We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance structure include the following:

• the Board is not classified, with each of our directors subject to re-election annually;

• six of our seven directors satisfy the listing standards for independence of the NASDAQ Global Select Market (“NASDAQ”);

• our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are each comprised entirely of independent directors;

• each of our Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC;

• we have designated a lead independent director;

• we comply with the applicable corporate governance listing standards of NASDAQ;

• we maintain a commitment to gender, age, and ethnic diversity through our Board Nominating & Diversity Policy;

• we do not have a stockholder rights plan; and

• our independent directors meet regularly in executive sessions without the presence of our corporate officers or non-independent directors.

Board Leadership Structure

Keith R. Dunleavy, M.D., our CEO, serves as Chairman of the Board and presides over meetings of the Board and holds such other powers and carries out such other duties as are customarily carried out by the Chairman of the Board. Dr. Dunleavy brings valuable insight to the Board due to the perspective and experience that he brings as our founder and CEO and his extensive experience in the technology and healthcare industries. The Board has determined that as the individual primarily responsible for the day-to-day management of business operations, Dr. Dunleavy is best positioned to chair regular Board meetings as the directors discuss key business and strategic issues. The Board’s administration of its risk oversight function is not affected by the Board’s leadership structure.

In addition, in February 2021, the Board established the position of lead independent director (the "Lead Independent Director") and selected Mr. Teuber to serve in that role. The Lead Independent Director's authority, responsibilities and duties are detailed in the Lead Independent Director Guidelines, which are posted on the Company's investor relations website at investors.inovalon.com under the “Governance” section. Among other things, the Lead Independent Director has authority to call meetings of the independent directors, authorize the retention of advisors and consultants who report directly to the Board, work with the Chairman to propose and review Board meeting agendas, lead, along with the Nominating and Corporate Governance Committee, the annual performance evaluation of the CEO, and where appropriate, have direct communication with stockholders.

Director Independence

The listing rules of NASDAQ generally require that a majority of the members of a listed company’s board of directors be independent within specified periods following the closing of an initial public offering. The Board has determined that none of our non-employee directors has a relationship that would interfere with the exercise of independent judgment in carrying


Corporate Governance at Inovalon			1

out the responsibilities of a director and that each of our non-employee directors is “independent” as that term is defined under NASDAQ Marketplace Rule 5605(a)(2).

Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or be an affiliated person of the listed company or any of its subsidiaries. Our Board has concluded that all of the members of the Audit Committee are independent under Rule 10A-3. Compensation Committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act and the listing standards adopted pursuant to Rule 10C-1. In order to be considered independent for purposes of Rule 10C-1, a listed company’s board of directors must consider the sources of compensation of the member of the compensation committee, including any consulting, advisory, or other compensatory fee paid by the Company to the member, and whether the member is affiliated with the Company or any of its subsidiaries or their affiliates. Our Board has concluded that all of the members of the Compensation Committee are independent under Rule 10C-1.

Risk Oversight

One of the key functions of the Board is informed oversight of our risk management process. The Board administers this oversight function directly, with support from its four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Security and Compliance Committee, each of which addresses risks specific to their respective areas of oversight.

In particular, our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs have the potential to encourage excessive risk-taking. Our Nominating and Corporate Governance Committee monitors the effectiveness of our Board of Directors Corporate Governance Charter and code of business conduct and ethics, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Security and Compliance Committee monitors the effectiveness of our physical and cybersecurity and related policies, as well as our compliance with legal and regulatory requirements.

Code of Business Conduct and Ethics

The Board has adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors. Additionally, the Board has adopted a supplemental code of ethics for senior financial officers, which applies to our Chief Executive Officer, Chief Financial Officer, and other senior financial officers, who have been designated by our Chief Executive Officer. Among other matters, our code of business conduct and ethics and supplemental code of ethics for senior financial officials are designed to deter wrongdoing and to promote:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosures in our SEC reports and other public communications;

• compliance with applicable laws, rules, and regulations;

• prompt internal reporting of violations of the code to appropriate persons identified in the code; and

• accountability for adherence to the code of business conduct and ethics.

Any waiver of the code of conduct for our executive officers or directors must be approved by the Board or a committee thereof, and any such waiver will be promptly disclosed as required by law or NASDAQ regulations.

The full text of our code of business conduct and ethics and supplemental code of ethics for senior financial officers is posted on our website at investors.inovalon.com under the “Governance” section. The reference to our website address in this Proxy Statement does not include or incorporate by reference the information on our website into this Proxy Statement. We intend


Corporate Governance at Inovalon			2

to disclose future amendments to our code of conduct, or waivers of these provisions, that are required to be disclosed under the rules of the SEC or NASDAQ on our website or in public filings.


Corporate Governance at Inovalon			3

PART 2 – BOARD OF DIRECTORS

Seven directors have been nominated for election at the 2021 Annual Meeting to hold office until the 2022 Annual Meeting. Information about their professional backgrounds, qualifications, and other board memberships follows.

Director Nominations and Qualifications

Director Selection Process

The Nominating and Corporate Governance Committee is responsible for, among other things, the selection and recommendation to the Board of nominees for election as directors. In accordance with the Nominating and Corporate Governance Committee Charter, our Board Diversity Policy, and our Board of Directors Corporate Governance Charter, the Nominating and Corporate Governance Committee develops on an annual basis guidelines and criteria for the selection of candidates for directors of the Board.

The Nominating and Corporate Governance Committee considers whether a potential candidate for director has the time available, in light of other business and personal commitments, to perform the responsibilities required for effective service on the Board. Applying these criteria, the Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and the Chairman of the Board and Chief Executive Officer as well as by stockholders. After completing the identification and evaluation process described above, the Nominating and Corporate Governance Committee recommends the nominees for directorship to the Board. Taking the Nominating and Corporate Governance Committee’s recommendation into consideration, the Board then approves the nominees for directorship for stockholders to consider and vote upon at the annual meeting of stockholders.

Board Membership Criteria

The Nominating and Corporate Governance Committee works with the Board to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members, with the objective of having a Board with diverse backgrounds and experience in business, education, and public service. Characteristics expected of all directors include integrity, high personal and professional ethics, financial literacy, sound business judgment, mature confidence and personal accountability, high performance standards, and the ability and willingness to commit sufficient time to the Board.

In evaluating the suitability of individual Board members, our Board considers many factors, including general understanding of marketing, finance, and other disciplines relevant to the success of a publicly-traded company in today’s business environment; understanding of our business and technology; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity. Our Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience.

In addition, no person shall be nominated by the Board to serve as a director after he or she has passed his or her 75th birthday, unless the Nominating and Corporate Governance Committee has voted, on an annual basis, to waive or to continue to waive, the mandatory retirement age of such person as a director.

With respect to the current director nominees, the table below summarizes key qualifications, skills, or attributes most relevant to the decision to nominate him or her to serve on the Board. A mark indicates a specific area of focus or expertise on which the Board relies most. The lack of a mark does not mean the director nominee does not possess that qualification or skill. Each director nominee biography below describes these qualifications and relevant experience in more detail.


Board Of Directors			4

Experience, Expertise or Attribute

Dunleavy

Fletcher

Green

Kohane

Pulido

Roberts

Teuber

Technology

Healthcare

Leadership

Government and Regulatory

Financial

Public Company Board Service and Governance

Sales and Marketing

Research and Academic

Geographic, Gender, Age, Ethnic or Other Diversity

Director Candidates Submitted by Stockholders

The Nominating and Corporate Governance Committee does not solicit director nominations but will consider stockholder recommendations sent to the Chair of the Nominating and Corporate Governance Committee c/o Inovalon Holdings, Inc., 4321 Collington Road, Bowie, Maryland 20716. Any such recommendation must include the candidate’s name, home and business contact information, detailed biographical data and qualifications, and an explanation of the reasons why the stockholder believes this candidate is qualified for service on the Board. The stockholder must also provide such other information about the candidate that would be required by SEC rules to be included in a proxy statement. In addition, the stockholder must include the consent of the candidate and describe any arrangements or undertakings between the stockholder and the candidate regarding the nomination. The stockholder must also submit proof of the stockholder’s holding of Company stock.

Recommendations by stockholders that are made in this manner will be evaluated in the same manner as other candidates.

Stockholders wishing to nominate directors directly for election to the Board must follow the procedures described in Article I, Section 1 of our bylaws, including (among other requirements) the giving of written notice of the nomination to our Secretary no earlier than 120 days and no later than 90 days prior to the first anniversary of the date of the previous year’s annual meeting of stockholders. The stockholder’s notice must set forth as to each nominee all information relating to the person that would be required to be disclosed in a solicitation of proxies for election of directors pursuant to Regulation 14A under the Exchange Act if the candidate had been nominated by or on behalf of the Board.


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Our Director Nominees


			Keith R. Dunleavy, M.D. Age 51 Director since 2006 Inovalon Committees • Security and Compliance			Other Public Company Directorships • None

Dr. Dunleavy has served as our Chief Executive Officer since his organization of our predecessor companies in 1998, as Chairman of the Board since the creation of the Board in 2006, and as President from our foundation until May of 2014. Dr. Dunleavy is responsible for the overall execution of our business plan, strategic relationships, and the identification and realization of our product strategy and vision. During his tenure building Inovalon, Dr. Dunleavy has worked extensively with a wide array and number of healthcare organizations, regulatory and oversight bodies, and technology companies examining the growing role of data within healthcare, and its ability to drive meaningful insight and improvement for its constituents. Dr. Dunleavy received a Bachelor’s degree in Biology modified with Engineering with High Honors from Dartmouth College, where his studies and work focused upon the neurosciences, computer sciences and engineering, and his honors thesis focused on the computer simulation of artificial human cerebellar functional units. He earned his doctorate in medicine from Harvard Medical School, completed his medical residency at The Johns Hopkins Hospital in Baltimore, Maryland, and practiced and was Board Certified in Internal Medicine. Dr. Dunleavy serves as a Director on the Dartmouth Medical School Board of Advisors.

We believe that Dr. Dunleavy’s knowledge of Inovalon and its business and his extensive experience in the technology and healthcare industries uniquely qualifies him to serve as the Chairman of the Board.


			Denise K. Fletcher Age 72 Director since 2012 Inovalon Committees • Audit • Compensation • Nominating and Corporate Governance			Other Public Company Directorships • Unisys

Ms. Fletcher has served as a director of Inovalon since 2012. Ms. Fletcher is a former Executive Vice President, Finance of Vulcan Inc., an investment and project company organized by Microsoft co-founder Paul Allen, a position she held from 2005 to 2008. From 2004 to 2005, she served as Chief Financial Officer of DaVita, Inc., a provider of dialysis services in the United States. From 2000 to 2003, she was Executive Vice President and Chief Financial Officer of MasterCard International, an international payment solutions company. Before joining MasterCard, she served as Chief Financial Officer of Bowne Inc., a global document management and information services provider. Ms. Fletcher is a director of Unisys, a worldwide information technology company, a member of the supervisory board of Mazars Group, an international organization that specializes in audit, accounting, tax, legal, and advisory services, and a director of Enterra Holdings, Ltd., which through its subsidiary, Golder Associates, provides global ground engineering and environmental services. During 2004 and 2005, she served as a director of Sempra Energy and of Orbitz, Inc.

We believe Ms. Fletcher's significant achievements as a senior corporate financial and operating officer with a wide range of industry experiences, coupled with her service as a director for other public companies, qualifies her to serve as one of our directors and the chairperson of our Audit Committee. Ms. Fletcher graduated Phi Beta Kappa from Wellesley College and received her master's degree from Harvard University.


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			William D. Green Age 67 Director since 2016 Inovalon Committees • Compensation • Nominating and Corporate Governance			Other Public Company Directorships • Dell Technologies, Inc. • S&P Global, Inc. • GTY Technology Holdings, Inc.

Mr. Green has served as a director of Inovalon since 2016. Mr. Green was previously a member of the board of directors of EMC Corporation from 2013 until September 2016, when EMC Corporation was acquired by Dell Technologies, Inc. Prior to joining the board of directors of EMC Corporation, Mr. Green served as the Chairman of the Board of Accenture plc, a global management consulting, technology services, and outsourcing company. Mr. Green joined Accenture plc in 1977 and became a partner in 1986, after which he went on to serve in multiple roles including chief operating officer and the chief executive of the resource operating group, and ultimately went on to serve as the company’s Chief Executive Officer from September 2004 through December 2010, and Chairman of the Board from 2006 to 2013.

Mr. Green is a member of the board of directors of Dell Technologies, Inc., S&P Global, Inc., and GTY Technology Holdings, Inc. Mr. Green holds an MBA degree and an Honorary Doctor of Laws from Babson College. He attended Dean College, where he is a member of the college’s Board of Trustees.

We believe that Mr. Green’s significant leadership, management and operating expertise; his understanding of the information technology industry, large-scale system outsourcing implementations and global organizational growth; his insight into the cloud computing technology marketplace; and his experience providing strategic direction to a large public technology company, qualify Mr. Green to serve as one of our directors.


			Isaac (Zak) S. Kohane, M.D., Ph.D. Age 60 Director since 2019 Inovalon Committees • Security and Compliance			Other Public Company Directorships • None

Dr. Kohane has served as a director of Inovalon since January 2019. Dr. Kohane is the inaugural Chair of the Department of Biomedical Informatics and the Marion V. Nelson Professor of Biomedical Informatics at Harvard Medical School, a position he has held since 2015. He served as co-author of the Institute of Medicine Report on Precision Medicine that has been the template for national efforts. He is an industry leader in the development and application of computational techniques to address disease at multiple scales, from whole healthcare systems as “living laboratories” to functional genomics. Dr. Kohane leads the Informatics for Integrating Biology and the Bedside (i2b2) project, a National Institute of Health (NIH)-funded National Center for Biomedical Computing (NCBC) initiative based in Boston, which is currently deployed internationally to more than 120 major academic health centers. Dr. Kohane also currently leads several NIH-funded projects including a Center of Excellence in Big Data to Knowledge.

Dr. Kohane received his International Baccalaureate from the International School of Geneva. He received a Bachelor of Science in Biology with a concentration in computer science with honors from Brown University, undertook pre-clinical studies at Boston University School of Medicine and undertook his doctoral work at Boston University in the Clinical Decision Making Group of Massachusetts Institute of Technology lab for Computer Science. He received his medical degree and doctorate from Boston University. Dr. Kohane performed his postdoctoral training at Children’s Hospital in Boston, MA. He holds or has held academic appointments at Harvard Medical School, Children’s Hospital Boston, the Dana-Farber Cancer Institute in Boston, and the Brigham and Women’s Hospital in Boston.

We believe Dr. Kohane's industry-leading vision and experience in the field of healthcare big data, machine learning, artificial intelligence, and computer-assisted medical decision making qualifies him to serve as one of our directors.


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			Mark A. Pulido Age 68 Director since 2018 Inovalon Committees • Security and Compliance			Other Public Company Directorships • None

Mr. Pulido has served as a director of Inovalon since April 2018. Prior to joining Inovalon's Board, Mr. Pulido served on the Board, from 2011, as Chairman of the Board, from 2014, and as CEO, from 2015, of ABILITY Network, a national leader in cloud-based solutions for the healthcare provider marketplace until Inovalon's acquisition of ABILITY Network in April 2018.

Prior to his role at ABILITY, Mr. Pulido focused on private equity and investing initiatives as an industry executive at Freeman Spogli & Company from 2004 to 2015. From 2000 to 2002, he served as the Chairman of BenefitPoint, Inc., a venture capital-backed employee benefits technology company, where he also served as its President and Chief Executive Officer. Prior to that, Mr. Pulido served as President and CEO of McKesson Corporation, a Fortune 15 healthcare services and information technology company, from 1996 to 1999; President and Chief Executive Officer of Novartis Pharmaceuticals Corporation, USA (formerly Sandoz), a research-based pharmaceutical manufacturer, from 1994 to 1996; and Chairman, President and CEO of Red Line Healthcare Corporation, a specialty long-term care distribution and medical billing company, from 1990 to 1994. Mr. Pulido also previously served as Chairman of the Board of Directors of Quidel Corporation, a manufacturer of diagnostic testing solutions and as a board member of several healthcare and technology companies, including Sunrise Medical Inc., a medical equipment manufacturer; Smile Brands Group, a dental practice management company; Charles Schwab Corporation, a financial services company; and Imation Corporation, a technology company. Mr. Pulido is currently a board member of EHE Health, a preventive healthcare services company.

Mr. Pulido holds a Bachelor of Science degree in Pharmacy from the University of Arizona, College of Pharmacy, and a Masters of Science degree in Pharmacy Administration from the University of Minnesota. He was a National Trustee of Boys & Girls Clubs of America and is past President of the Board of Trustees, The Bishop’s School, La Jolla, CA, a leading independent school.

We believe Mr. Pulido's more than three decades of leadership experience and nationally recognized expertise in healthcare qualify him to serve as one of our directors.


			Lee D. Roberts Age 68 Director since 2012 Inovalon Committees • Audit • Compensation			Other Public Company Directorships • QAD, Inc. • Unisys

Mr. Roberts has served as a director of Inovalon since 2012. Since 2008, Mr. Roberts has served as President and Chief Executive Officer of Bluewater Consulting, an information technology management consulting company. From 2006 to 2008, Mr. Roberts was the Vice President and General Manager, IBM Document & Content Management for IBM Corporation. In 2006, IBM acquired FileNET Corporation, where Mr. Roberts had served as President and Chief Executive Officer from 1997 through 1999, and as Chairman and Chief Executive Officer from 2000 until its acquisition in 2006. Mr. Roberts currently serves on the boards of QAD, Inc., a publicly-traded provider of enterprise resource planning and supply chain software, and Unisys, a worldwide information technology company. Mr. Roberts has also served on the boards of a number of other public and private companies, including, most recently, Varolii Corporation, a privately-held provider of on-demand communications software services.

We believe Mr. Roberts’ decades of leadership experience with technology companies and deep understanding of information technology, technology trends and customer requirements qualify him to serve as one of our directors. Mr. Roberts earned Bachelor’s degrees in Economics, Biology, and Chemistry at California State University, San Bernardino and his MBA


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degree with honors at the University of California, Riverside. He completed IBM’s Executive International Management Program in Belgium and Executive Management Development programs at Harvard University.


			William J. Teuber, Jr. Age 69 Director since 2013 Inovalon Committees • Audit • Compensation • Nominating and Corporate Governance • Security and Compliance			Other Public Company Directorships • None

Mr. Teuber has served as a director of Inovalon since 2013. Mr. Teuber is the former Vice Chairman of EMC Corporation, where he held the role from May 2006 until September 2016, when EMC Corporation was acquired by Dell Technologies, Inc. As Vice Chairman of EMC Corporation, Mr. Teuber focused on strategy and business development in emerging markets, assisted with government relations and worked closely with the Board of Directors. From 2006 to 2012, he oversaw EMC Corporation’s global sales and distribution organization, responsible for driving EMC Corporation’s growth and market leadership worldwide. Before that, he was EMC Corporation’s Chief Financial Officer from 1996 to 2006, responsible for the global financial operations of EMC Corporation’s consolidated business worldwide, including financial planning and reporting, balance sheet management, foreign exchange, audit, tax, treasury, investment banking, governance and investor relations programs. Prior to joining EMC Corporation, Mr. Teuber was a partner in the Audit and Financial Advisory Services practice of Coopers & Lybrand LLP from 1998 to 1995.

Mr. Teuber previously served as a member of the board of directors of CRH, a global diversified building materials group based in Ireland from 2016 to 2019, and he also served as a member of the board of directors of Popular Inc., a diversified financial services company based in Puerto Rico that includes Banco Popular as a holding from 2004 to 2019, where he served as Lead Independent Director from 2011 to 2019. He currently serves as a Senior Operating Principal at Bridge Growth Partners, a private equity firm based in New York.

We believe that Mr. Teuber’s significant financial and accounting expertise, his extensive insight into the global big data and cloud computing technology marketplace, and his experience providing strategic direction to a large public technology company qualify Mr. Teuber to serve as one of our directors. Mr. Teuber holds an MBA degree from Babson College, a Master of Science in Taxation from Bentley College, and an A.B. degree from The College of the Holy Cross.

Meetings and Meeting Attendance

During 2020, the Board met seven times, our Audit Committee met eight times, our Compensation Committee met four times, our Nominating and Corporate Governance Committee met four times, and our Security and Compliance Committee met four times. All of our directors attended 75% or more of the aggregate of all Board meetings and meetings of the committees on which he or she served during the last fiscal year during the period in which he or she served as a director. Directors are expected to attend our annual meeting of stockholders.


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Board Committees

The Board has established four standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Security and Compliance Committee. Each of these committees has the composition and responsibilities described below. Members serve on these committees until their resignations or until otherwise determined by the Board.

Committees of the Board

Name

Audit

Compensation

Nominating and
Corporate Governance

Security and
Compliance

Keith R. Dunleavy, M.D.

Member

Denise K. Fletcher

Chair

Member

William D. Green

Member

Chair

Isaac S. Kohane, M.D., Ph.D.

Member

Mark A. Pulido

Member

Lee D. Roberts

Member

Chair

William J. Teuber, Jr.

Member

Chair

Below is a description of each standing committee. Each committee has authority to engage legal counsel or other advisors or consultants as it deems appropriate to carry out its responsibilities.

Audit Committee

The composition of our Audit Committee meets the requirements for independence under the current NASDAQ and SEC rules and regulations. Each member of our Audit Committee can read and understand fundamental financial statements in accordance with applicable requirements. In addition, the Board has determined that Ms. Fletcher, Mr. Teuber, and Mr. Roberts are “audit committee financial experts” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act. This designation does not impose on them any duties, obligations, or liabilities that are greater than are generally imposed on members of our Audit Committee and the Board. Our Audit Committee is responsible for, among other things, oversight related to:

• our accounting and financial reporting processes;

• the integrity of our financial statements;

• our policies and procedures to fulfill our responsibilities regarding the fair and accurate presentation of our financial statements;

• the audit of our financial statements;

• major issues regarding accounting principles and financial statement presentations;

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

• the review of all related party transactions for potential conflict of interest situations on an ongoing basis and the approval of all such transactions.

The Audit Committee is also responsible for the appointment, compensation, retention, and oversight of the work of any accounting firm engaged (including resolution of disagreements between management and such firm regarding financial reporting) for the purpose of performing audit, review, or attestation services for the Company; for the review with our independent registered public accounting firm of any audit problems or difficulties and management’s response; and for assisting the Board in its oversight of our compliance with legal and regulatory requirements. Finally, the Audit Committee prepares the Audit Committee report required by SEC regulations to be included in our annual proxy statement.


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Compensation Committee

The composition of our Compensation Committee meets the requirements of independence under NASDAQ Marketplace Rule 5605(a)(2). Our Compensation Committee is responsible for, among other things:

• approving and recommending to the Board for review and approval by a majority of the independent directors, the annual compensation of the CEO and other officers, including salary, bonus, equity compensation awards and other benefits, based on the evaluation of the performance of the CEO and other officers;

• determining the objectives of our officer compensation programs, identifying what the programs are designed to reward, and modifying (or recommending that the Board modify) the programs as necessary, consistent with such objectives and intended rewards;

• ensuring appropriate corporate performance objectives regarding compensation of our officers are set and determining the extent to which they are achieved and any related compensation earned;

• administering our incentive compensation plans and equity-based plans as in effect and as adopted from time to time by the Board;

• preparing a Compensation Committee report on executive compensation to be included in our annual proxy statement; and

• reviewing, approving, or recommending to the Board for approval any new equity compensation plan or any material change to an existing plan and conducting any valuations required under an equity compensation plan.

Nominating and Corporate Governance Committee

The composition of our Nominating and Corporate Governance Committee meets the requirements of independence under Nasdaq Marketplace Rule 5605(a)(2). Our Nominating and Corporate Governance Committee is responsible for, among other things:

• identifying and recommending candidates for membership on the Board;

• reviewing and recommending our corporate governance guidelines and policies;

• reviewing proposed waivers of the code of conduct for directors and executive officers;

• overseeing the process of evaluating the performance of the Board; and

• assisting the Board on corporate governance matters.

Security and Compliance Committee

Our Security and Compliance Committee is directly responsible for, among other things, oversight related to:

• our compliance with law, rules and regulations, including the health insurance portability and accountability act (“HIPAA”);

• our privacy and security programs, including:

◦the security and protection of protected health information (“PHI”);

◦physical security of our properties, including our datacenters; and

◦security of platform, network and big data systems and software;

• the periodic review and assessment of the adequacy and functionality of our privacy and security programs;


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• ensuring that our privacy and security programs are aligned with our and our clients’ business objectives and goals;

• our disaster recovery and business continuity plans; and

• in conjunction with the Board and our Chief Executive Officer, the roles and responsibilities of our Chief Information Security Officer, Chief Compliance Officer, and Chief Privacy Officer.

Communicating with the Board

The Board provides a process for stockholders and all other interested parties to send communications to the Board. Any stockholder and all other interested parties who wish to communicate with the Board or any specific director, including the Chairman, may write to:

Inovalon Holdings, Inc.

Attention: Board of Directors

c/o Corporate Secretary

4321 Collington Road

Bowie, Maryland 20716

Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Audit Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters. Instructions for making a report are also available at http://investors.inovalon.com.

Director Compensation

Fiscal Year 2020 Director Compensation

This table describes the cash and equity portions of the annual retainer paid to each non-employee director in fiscal year 2020. Dr. Dunleavy, who is our Chief Executive Officer, receives no compensation for his service as a director. The compensation received by Dr. Dunleavy as an employee is described in Part 5 – “Named Executive Officer Compensation – Summary Compensation Table.”


Name	Fees Earned or paid in cash(1) ($)	Equity awards(2) ($)	Total ($)
Denise K. Fletcher(3)	75,000	175,000	250,000
William D. Green(4)	75,000	175,000	250,000
André S. Hoffmann(5)	37,500	175,000	212,500
Mark Pulido(6)	75,000	175,000	250,000
Lee D. Roberts(7)	75,000	175,000	250,000
William J. Teuber, Jr.(8)	75,000	175,000	250,000
Isaac S. Kohane, M.D., Ph.D.(9)	75,000	175,000	250,000

(1) Represents retainer for service as a director, which is paid in quarterly installments of $18,750.

(2) The valuation of equity awards is based on the grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). The assumptions used to calculate the fair value of equity awards are set forth in the section entitled “Critical Accounting Policies” under Item 7 and Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. During 2020, each non-employee director received an equity award that had a value of approximately $175,000, calculated by dividing $175,000 by the closing price per share of our Class A common stock on the date of the grant. The number of RSUs was calculated by dividing $175,000 by the closing price per share of our Class A common stock on the date of grant, which equaled $19.10 per share, for an aggregate grant date fair value of $175,051. On June 18, 2020, the Company granted each non-employee director 9,165 RSUs. All of the RSUs were granted pursuant to the Company's Amended & Restated 2015 Omnibus Incentive Plan, and fully vest upon the one-year anniversary of the grant date, subject to continued service as a director through the vesting date. Upon vesting, the Company will deliver shares of the Company’s Class A common stock to the director unless a deferral election has been timely made.

(3) As of December 31, 2020, Ms. Fletcher held a stock option to purchase 14,745 shares of our Class B common stock and 9,165 RSUs.

(4) As of December 31, 2020, Mr. Green held 9,165 RSUs.

(5) Mr. Hoffmann resigned from the Company's Board on July 29, 2020. Approximately $5,625 of Mr. Hoffmann's cash compensation was withheld to satisfy tax laws related to Mr. Hoffmann's status as a resident of Switzerland.

(6) As of December 31, 2020, Mr. Pulido held 9,165 RSUs.

(7) As of December 31, 2020, Mr. Roberts held 9,165 RSUs.

(8) As of December 31, 2020, Mr. Teuber held a stock option to purchase 14,745 shares of our Class B common stock and 9,165 RSUs.

(9) As of December 31, 2020, Dr. Kohane held 9,165 RSUs.


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In 2020, each non-employee director received an annual cash retainer of $75,000 and an annual award of $175,000 payable in equity. Mr. Hoffmann received 50% of his cash retainer as he resigned from the Company's Board on July 29, 2020. The annual award payable in equity is granted in the form of RSUs, which fully vest on the first anniversary of the grant date, subject to continued service as a director through the vesting date. Directors are permitted to elect to defer delivery of shares that would otherwise be issued when their RSUs vest. Directors are also entitled to reimbursement for his or her reasonable out-of-pocket expenses incurred in attending meetings of the Board and its committees, and the protection provided by their indemnification agreements and the indemnification provisions in our certificate of incorporation and bylaws.

Director Stock Ownership Guidelines – The Board has adopted stock ownership guidelines for the non-employee directors. Each non-employee director is required, within the later of (i) five years from his or her initial election or appointment to the Board or (ii) March 21, 2021, which is five years from the effective date of the stock ownership guidelines, to own an amount of the Company’s Class A common stock (or shares convertible into Class A common stock including the Company’s Class B common stock) having an aggregate value equal to at least five times the annual cash retainer component of the non-employee director’s compensation. Time-vested restricted stock and time-vested restricted stock units will be included when determining an individual’s stock ownership. Time-vested but unexercised stock options that are in-the-money will also be included when determining an individual’s stock ownership to the extent of their intrinsic value (i.e., the difference between the strike price and the current market price of the Company’s Class A common stock, multiplied by the number of vested stock options). Unvested restricted stock or restricted stock units, unvested options, and vested but unexercised options that are not in-the-money will not be counted toward meeting the stock ownership guidelines. Currently, we believe that all non-employee directors are on track to meet or have met the stock ownership guidelines within the required time periods.

Certain Relationships and Related Transactions

In addition to the executive officer and director compensation arrangements discussed elsewhere in this Proxy Statement, since January 1, 2020, there have not been any transactions to which we have been a participant, in which the amount involved in the transaction exceeds or will exceed $120,000 and in which any of our directors, executive officers, or holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

Stockholders’ Agreement

We are a party to the Second Amended and Restated Stockholders Rights Agreement, dated September 15, 2014 (“Stockholders’ Agreement”), with the existing holders of our Class B common stock, including Keith R. Dunleavy, M.D., our CEO and Chairman, André S. Hoffmann, a former member of the Board, Denise K. Fletcher, a member of the Board, and William J. Teuber, a member of the Board. In addition, any of our executive officers or directors who exercise options to purchase our Class B common stock will become a party to the Stockholders’ Agreement at such time. These stockholders are entitled to rights with respect to the registration of their shares for resale.

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements and our bylaws require us to indemnify our directors to the fullest extent not prohibited by Delaware law. Subject to certain limitations, our restated bylaws also require us to advance expenses incurred by our directors and officers.

Equity Grants to Executive Officers and Directors

We have granted equity awards to our executive officers and directors, as more fully described in the sections of this Proxy Statement entitled “Named Executive Officer Compensation” and “Director Compensation,” respectively.

Review, Approval, or Ratification of Transactions with Related Parties

Our policy and the charters of our Audit Committee and our Nominating and Corporate Governance Committee require that any transaction with a related party that must be reported under applicable rules of the SEC (other than compensation-related matters) must be reviewed and approved or ratified by the Audit Committee, unless the related party is, or is associated with, a member of that committee, in which event the transaction must be reviewed and approved by the Nominating and Corporate Governance Committee.


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PART 3 – EXECUTIVE OFFICERS

Backgrounds

The following table provides information regarding our executive officers.


Name	Age	Position
Keith R. Dunleavy, M.D.	51	Chief Executive Officer and Chairman of the Board
Jonathan R. Boldt, C.P.A.	36	Chief Financial Officer
Jason B. Capitel	49	Chief Commercial Officer
Peter De Bock	58	Chief Administrative Officer

Set forth below is a description of the background of our executive officers, except Dr. Dunleavy. Dr. Dunleavy’s background is described above under Part 2 – “Board of Directors – Our Director Nominees.”

Jonathan R. Boldt, C.P.A., Chief Financial Officer

Mr. Boldt has served as our Chief Financial Officer since January 14, 2019. Mr. Boldt previously served as the Company’s interim Chief Financial Officer and Vice President of Finance for corporate financial planning and analysis since March 16, 2018. As Chief Financial Officer, Mr. Boldt is responsible for the management, planning, implementation and execution of all financial activities, forecasting, reporting, audit, treasury, tax, and related compliance obligations of the Company.

Since joining the Company in 2012, Mr. Boldt has served in numerous expanding financial positions playing integral roles in the Company’s Initial Public Offering in 2015, and the acquisitions of Avalere Health, Inc. in 2015, Creehan Holding Co., Inc. in 2016, and ABILITY Network Inc. and its associated term loan financing facility in 2018. Prior to joining the Company in 2012, Mr. Boldt served in a number of escalating roles at Deloitte & Touche, LLP, ultimately holding the position of attestation manager for public and private, domestic and international clients in information technology, government contracting, professional services, and manufacturing industries at various growth stages and scale ranging from $200 million to $20 billion in annual revenue.

Mr. Boldt graduated magna cum laude from Loyola University in Maryland with a Bachelor's degree in accounting and a masters of business administration degree with an information technologies concentration. He serves on the Loyola University of Maryland Sellinger School of Business Joint Advisory Board. Mr. Boldt is an active certified public accountant in the State of Maryland, a status which he has held since 2008.

Jason B. Capitel, Chief Commercial Officer

Mr. Capitel has served as the Company's Chief Commercial Officer since August 2020. Mr. Capitel was most recently the Company's Chief Operating Officer, a position he held since April 2018, and previously Chief Revenue Officer, a position he held since January 2018. As Chief Commercial Officer, Mr. Capitel leads the Company’s go-to-market organization and is responsible for the full span of the achievement of the Company’s commercial expansion goals. As such, Mr. Capitel oversees and is responsible for planning, implementation, execution, and scaling of all marketing, sales, and adoption for the products, solutions, and services of the Company and its affiliates, inclusive of all, channel relationships, strategic partnerships, and alliances, and the ultimate commercial success of the Company.

Prior to joining Inovalon, Mr. Capitel served as the Chief Revenue Officer for SecureWorks, a global leader in the MSSP space and division of Dell Technologies, from January 2017 to October 2017. Prior to this role, Mr. Capitel served in expanding sales and operations roles at EMC Corporation, a global leader in enabling business and service providers to transform their operations and deliver IT as a service, from 2003 through 2017, culminating in his serving as Chief Revenue Officer for EMC's Enterprise Content Division, where he was responsible for all global go-to-market and revenue generating activities. Prior to this, Mr. Capitel served as Chief Operating Officer for EMC’s EMEA division overseeing the operations of many EMC business units and functions in EMEA, including its RSA security division, the Information Intelligence Group, inside sales, marketing, channel, service provider, and alliance teams. During his tenure, the EMEA was the fastest growing theater in the world for EMC, registering its first $1 billion quarter and $5 billion year. Prior to his service as COO of the


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EMEA division, Mr. Capitel served as Divisional Vice President of Alliances & Vertices for the Americas at EMC where he oversaw the achievement of $3 billion in revenue responsibility. Prior to this role, Mr. Capitel served in a number of additional expanding roles within EMC. Prior to EMC, Mr. Capitel served in various roles at Parametric Technology Corp, Inktomi Corp., and Imagetic.

Mr. Capitel received his Bachelor’s of Science Degree from Southern Illinois University.

Peter De Bock, Chief Administrative Officer

Mr. De Bock joined Inovalon on February 13, 2019 as the Company's Chief Administrative Officer. As Chief Administrative Officer, Mr. De Bock is responsible for the management, planning, implementation and execution of all administrative departments and responsibilities of the Company, including those of the departments of finance, human resources, legal, facilities, procurement, security, and other such departments and responsibilities.

Prior to joining the Company, Mr. De Bock most recently served as the Chief Financial Planning Officer for CA Technologies, Inc., one of the world’s largest software companies with $4.2 billion in annual revenue, 11,000 employees, and operations in 48 countries prior to its acquisition by Broadcom in 2018. In this role, Mr. De Bock led global financial planning and analysis, development of long term planning and budgeting processes, analysis of financial and strategic operational results, and a wide number of administrative and transformation initiatives. Prior to this role, Mr. De Bock served in multiple roles at CA Technologies including CFO of Latin America and CFO of Europe, Middle East, and Africa, where, in addition to his financial responsibilities, he drove a wide array of administrative, strategic, and operational initiatives regarding performance improvement, reporting transparency, and process efficiency. Prior to serving in a CFO position, Mr. De Bock held various ascending roles overseeing responsibilities at multiple individual country-levels and multi-country regional-levels. Mr. De Bock began working at CA Technologies, Inc. in 1990. Preceding to his tenure at CA Technologies, Mr. De Bock held various roles at European Mergers & Acquisitions Corp, the Estee Lauder Companies, and Ernst & Young.

Mr. De Bock graduated from the University of Antwerp, Belgium with a Bachelor of science degree in business administration and economics.

Election of Officers

Our executive officers are elected by, and serve at the discretion of, the Board. There are no family relationships among any of our directors or executive officers.


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PART 4 – COMPENSATION DISCUSSION AND ANALYSIS

Overview

Our Compensation Discussion and Analysis describes our executive compensation program and the decisions in fiscal year 2020 regarding the compensation for:

•Keith R. Dunleavy, M.D., our Chief Executive Officer and Chairman of the Board;

•Robert A. Wychulis, our former President(1);

•Jonathan R. Boldt, our Chief Financial Officer;

•Jason B. Capitel, our Chief Commercial Officer; and

•Peter De Bock, our Chief Administrative Officer

(1) Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

We refer to these executive officers collectively in this Compensation Discussion and Analysis and the accompanying compensation tables as the "Named Executive Officers" for 2020.

We believe our 2020 Named Executive Officer compensation demonstrates our commitment to aligning executive pay with Company performance as well as the longer-term goals of the Company. While in the context of the COVID-19 pandemic some of the Company's non-platform-based offerings were impacted, the Inovalon team achieved many positives in 2020, including strong advances in our platform capabilities, the reach of our connectivity, breadth of our datasets, performance of our salesforce, streamlining of our implementation capabilities, innovation and launch of new product offerings, and very strong sales and associated implementations, resulting in strong continued growth of the Company's platform-based business and positive positioning of the Company for meaningful growth going forward. We believe that our Named Executive Officers, individually and collectively with their business units, drove and supported initiatives leading to the foregoing positive achievements in 2020 and positive transformations for the Company believed to be key for performance in 2021 and beyond. As a result, we did not modify our overall compensation programs in 2020 due to the COVID-19 pandemic. As such, reflecting the fact that our overall 2020 results met some, but not all of our original goals, but still nevertheless positioned the Company for more positive forward performance, short-term cash bonus compensation awards for our Named Executive Officers were awarded below available target opportunity levels in 2020, and we continued to award a large portion of compensation in the form of long-term equity. We believe such 2020 compensation reflects strong Company performance levels for 2020 under challenging conditions, with equity awards providing opportunities for our Named Executive Officers to benefit from future successes in our business through the appreciation of the value of their long-term equity awards, increasing the alignment of our Named Executive Officers’ interests and contributions with the long-term interests of our stockholders.

This Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and each element of compensation that we provide. In addition, we explain how and why the Compensation Committee arrived at the specific compensation policies and decisions involving our Named Executive Officers during fiscal year 2020.

Advisory Votes on Compensation

At the 2020 Annual Meeting, we submitted a non-binding advisory proposal to our stockholders to vote to approve the compensation of the Named Executive Officers as disclosed in the proxy statement for the 2020 Annual Meeting.

Approximately 99% of the votes cast were cast in favor of the non-binding advisory vote to approve the compensation of the Named Executive Officers at the 2020 Annual Meeting. The Compensation Committee believes this indicates that our stockholders strongly support the philosophy, strategy, and objectives of our executive compensation programs. After considering this result and following our annual review of our executive compensation philosophy, the Compensation Committee decided to retain our overall approach to executive compensation. The Compensation Committee intends to continue to monitor stockholder concerns, including the results of the annual non-binding advisory votes to approve the


Compensation Discussion & Analysis			16

compensation of the Named Executive Officers, in making future decisions affecting the compensation of the Named Executive Officers.

Executive Compensation Philosophy, Objectives and Design

Our compensation philosophy is to provide an executive compensation program that rewards our management team for meeting our long-term business strategy, while rewarding the individual contributions of the team members. Our executive compensation program is designed to achieve the following objectives:

•attract, motivate and retain employees at the executive level who contribute to our long-term success;

•provide compensation packages to our executives that are competitive, reward the achievement of our business objectives and effectively align their interests with those of our stockholders;

•increase the incentive to achieve key strategic performance measures by linking incentive award opportunities to the achievement of performance objectives and by providing a portion of total compensation for executive officers in the form of ownership in the Company; and

•promote teamwork while also recognizing the individual role each executive officer plays in our success.

Our executive compensation program design uses a mix of compensation elements including base salary, cash bonuses, long-term equity incentive awards, and benefits to attract and maintain key personnel. In 2020, long-term equity incentive compensation took the form of restricted stock awards (“RSAs”) and long-term equity incentive performance awards (“LTI Awards”).

In 2020, each of our Named Executive Officers (other than Dr. Dunleavy and Mr. Capitel, discussed below) was provided with a total target incentive compensation amount determined as a percentage of such Named Executive Officer’s base salary (“Total Target”) and based on individual and corporate performance and job level. Such Total Targets are comprised of the cash bonus opportunity, the RSA opportunity, and the LTI Award opportunity, each of which makes up a percentage of the Total Target. For Mr. Wychulis, the Total Target opportunity was 375% of his base salary, comprised of 75% cash bonus opportunity, 150% RSA opportunity, and 150% LTI Award opportunity. For Mr. De Bock, the Total Target opportunity was 230% of his base salary, comprised of 70% cash bonus opportunity, 110% RSA opportunity, and 50% LTI Award opportunity. For Mr. Boldt, in connection with his base salary increase in November 2020 from $325,000 to $375,000, his Total Target opportunity was also revised in November 2020. Prior to the change in November 2020, Mr. Boldt’s Total Target opportunity was 230% of his base salary, comprised of 70% cash bonus opportunity, 110% RSA opportunity, and 50% LTI Award opportunity. Following his salary increase in November 2020, Mr. Boldt’s Total Target opportunity was increased to 475% of his base salary, comprised of 75% cash bonus opportunity, 200% RSA opportunity, and 200% LTI Award opportunity. To reflect a proration for the in-year change, for 2020 bonus calculation purposes, Mr. Boldt’s prior Total Target opportunity metrics were weighted at 91.7% (for January 2020 through November 2020) and his new Total Target opportunity metrics were weighted at 8.3% (December 2020). The Total Target Incentive Opportunity dollar amounts reflected in the tables below for Mr. Boldt’s 2020 Total Target Incentive Opportunity, 2020 Cash Bonus Target, 2020 Target RSA, and 2020 Target LTI Award, all reflect the prorated dollar values of his target opportunities. For Mr. Capitel, his initial Total Target opportunity was 200% of his base salary, or $900,000, comprised of $450,000 in a cash bonus opportunity and $450,000 in an RSA opportunity, with the foregoing components predicated on the Company achieving certain revenue growth goals in 2020 (with availability for incrementally increased cash bonus and RSA opportunities in $250,000 increments if higher revenue growth goals year-over-year were achieved).

As set forth in the chart below, and discussed in greater detail in the section entitled “Executive Compensation Program Elements,” we believe that our Named Executive Officers’ compensation for fiscal year 2020 reflects individual achievement of goals, objectives and accomplishments of each Named Executive Officer in 2020 as well as overall Company financial performance, which met some, but not all, of our original financial goals.


Compensation Discussion & Analysis			17


Named Executive Officer	2020 Base Salary ($)	2020 Total Target Incentive Opportunity (% of Base Salary)	2020 Total Target Incentive Opportunity ($)	2020 Actual Total Target Incentive Payout (% of Base Salary)(1)	2020 Actual Total Target Incentive Payout ($)(1) (%)(2)
Keith R. Dunleavy, M.D.(3)	205,000	—	—	—	—	—
Robert A. Wychulis(5)	485,000	375%	1,818,750	263%	1,273,125	70%
Jonathan R. Boldt(4)	375,000	230%	938,756	164%	613,190	65%
Jason B. Capitel	450,000	200%	900,000	140%	630,000	70%
Peter De Bock	425,000	230%	977,500	161%	684,250	70%

_________________________________________________________________________________________________________________________________________________________________________________________________

(1)Comprised of cash bonus, value of RSA and value of LTI Award received in February 2021 for performance in 2020, each as discussed in further detail below.

(2)Represents percentage of achievement of Total Target incentive opportunity.

(3)Dr. Dunleavy is, by choice, not eligible for any incentive compensation.

(4)In November 2020, Mr. Boldt's base salary was increased from $325,000 to $375,000 following a compensation analysis undertaken at the request of the Compensation Committee and approved by the Board.

(5)Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

Actual payouts of the Total Targets for each Named Executive Officer (other than Dr. Dunleavy, who by choice is not eligible for incentive compensation) are recommended by the Chief Executive Officer, with consultation and approval by the Compensation Committee, and payment is dependent upon: (i) the Company’s performance (success, profitability, and other metrics) and funding of any bonus pools within the ranges approved by the Board; (ii) performance of the departments and personnel that the executive officer is responsible for supervising, in accordance with the budget, metrics and strategic objectives that may be established by the Board from time to time; and (iii) the executive officer’s individual performance. As with all executive compensation, determination of Total Target opportunity and actual payouts thereon are subject to modification by the Compensation Committee as determined appropriate each year in connection with the Compensation Committee’s duties to review executive compensation. Further, the Compensation Committee continuously looks at the overall compensation package and the relative amount of each element on an individual basis for each Named Executive Officer to determine whether such amounts and mix of components further the basic principles and objectives of our overall compensation program. The COVID-19 pandemic was not a consideration at the time the 2020 Total Targets were set, nor did the Compensation Committee modify the Total Targets during the year due to COVID-19 related circumstances.

As noted above, a significant portion of the compensation opportunity for our Named Executive Officers is weighted towards equity (in the form of RSAs and LTI Awards), as opposed to fixed value compensation (in the form of cash bonuses). Our Compensation Committee believes that making equity awards a key component of executive compensation focuses our leadership team on the achievement of our long-term strategic and financial goals, thereby aligning their interests with those of our stockholders.

As noted in the chart above, in light of the Company's financial performance in 2020, all of our Named Executive Officers received less than 100% of their Total Target Incentive Opportunity.

We evaluate our compensation philosophy and compensation programs as circumstances require, and at a minimum, we review our executive compensation annually. As part of this review process, we apply our values and the objectives outlined above, while also considering whether our proposed compensation ensures that we remain competitive to attract and retain talent, that we meet our retention objectives, and that our cost of replacement for a key employee is reasonable.

Compensation Setting Process

The compensation of our Named Executive Officers is approved and recommended to the Board for approval annually by our Compensation Committee. Our Chief Executive Officer typically provides annual recommendations to the Compensation Committee and discusses with the Compensation Committee the compensation and performance of our executive officers, other than himself. Our Chief Executive Officer bases his recommendations in part upon his review of the performance of our executive officers. Our Compensation Committee may exercise its discretion in modifying any recommended compensation adjustments or awards to executives. Our Compensation Committee reviews the performance of our Chief Executive Officer and meets in executive session without him to evaluate his performance and determine his compensation.


Compensation Discussion & Analysis			18

In addition, Compensation Committee meetings typically have included, for all or a portion of each meeting, not only the committee members and our Chief Executive Officer, but also our Chief Financial Officer.

Compensation Consultant

To support the Compensation Committee in fulfilling its duties, from time to time, the Compensation Committee has retained external compensation consultants, Meridian Compensation Partners (“Meridian”) and Pearl Meyer & Partners ("Pearl Meyer"), to assist with its design and evaluation of compensation for our executive officers and directors. Pursuant to its charter, the Compensation Committee has the sole authority to retain, and replace as needed, compensation consultants to provide independent advice to the Compensation Committee, as well as the sole authority to approve the consultants’ fees and other terms and conditions of retention.

During fiscal year 2020, the Compensation Committee retained Meridian to provide an assessment on Mr. Boldt's compensation as the Company's CFO. Other than such engagement, the Compensation Committee did not retain an executive compensation consultant to provide executive and director compensation consulting services or to provide recommendations for compensation as it relied on the services and advice Pearl Meyer provided in 2018. During fiscal year 2018, Pearl Meyer did not provide any additional services to the Company or the Company’s affiliates other than the compensation consulting services described herein.

In previously electing to engage Pearl Meyer and Meridian, the Compensation Committee took into consideration all factors relevant to Pearl Meyer’s and Meridian's independence from the Company’s management, including those set forth in SEC and NASDAQ rules, and concluded that no conflict of interest existed that would prevent Pearl Meyer or Meridian from independently advising the Compensation Committee.

Peer Group

The Compensation Committee previously consulted market data to better inform its determination of the key elements of our compensation program in order to develop a compensation program that the Compensation Committee believes enables Inovalon to compete effectively for new employees and retain existing employees. In general, this market data consists of compensation information from broad-based third-party compensation surveys, competitive market review data prepared and provided by compensation advisory firms, and peer groups.

Because publicly-filed compensation data is generally limited to those of a company’s chief executive officer, chief financial officer and three most highly paid executive officers (other than the chief executive officer and the chief financial officer), the Compensation Committee also utilized other market data from Pearl Meyer and Meridian, including third-party compensation surveys and competitive market review data, in determining the compensation for our Named Executive Officers.

Historically, the Compensation Committee has selected companies in our peer group and utilized data from third-party compensation surveys because it believes that peer companies competed with us for executive talent and were similar to us in revenue growth rate, market capitalization, industry, and size. The Compensation Committee also determined that the companies in the peer group generally had executive officer positions that are comparable to ours in terms of breadth, complexity and scope of responsibilities. While we compete for executive talent to some degree with companies that have revenues significantly in excess of those represented in the surveys and peer groups historically utilized, we increasingly believe that we similarly compete with larger companies and hence such larger companies are increasingly an appropriate comparison for our employment market.

In addition, as larger and more cloud-based and software-focused companies are believed to increasingly be appropriate comparables for our compensation considerations, the Compensation Committee has periodically reviewed and removed companies that it no longer believes are comparable, and to the extent applicable, have added new comparable companies that have disclosed public information for which the Compensation Committee can compare, including compensation paid by companies in our peer group to executives in positions comparable to those held by our executive officers.

Reflecting the above, during the latter portions of 2019 and throughout 2020, the Compensation Committee used specific peer groups to assess compensation data, including most recently the following peer group companies: Salesforce.com, Inc.; ServiceNow, Inc., Splunk Inc.; Veeva Systems Inc.; Workday, Inc.; Tableau Software, Inc.; Oracle Corporation; Microsoft Corporation; Amazon.com, Inc.; Apple Inc.; Alphabet Inc.; SAP; International Business Machines Corporation; and Adobe Inc. In addition, beginning in 2020, the Company and the Compensation Committee began supplementing compensation


Compensation Discussion & Analysis			19

considerations with the use of competitive market survey data and comparative market review databases that focus on aggregate compensation metrics and data from companies of similar market size, similar industry and similar capitalization to Inovalon, without necessarily identifying companies by name. To that end, in 2020, the Compensation Committee increasingly utilized mid-capitalization sized software and cloud-based business model companies in determining compensation targets, as described in compensation advisory firms’ (such as Meridian) competitive market review databases, and decreasingly utilized previously outlined specific peer groups.

Our Compensation Committee does not target or benchmark compensation to any particular percentile of compensation paid by other companies. Rather, our Compensation Committee considers comparator compensation data as one factor in making its compensation decisions, understanding that such data cannot be applied formulaically. Other factors include Inovalon’s performance and an individual’s contribution, experience and potential. After taking these factors into account, the Compensation Committee exercises its judgment in making compensation decisions to ensure that no individual element of total compensation was below a level that, in the determination of the Compensation Committee, would prevent the Company from effectively competing for talent. We believe that this approach gives the Company the flexibility to make compensation decisions based upon all of the facts and circumstances.

CEO Compensation

As set forth in the Summary Compensation Table that follows, in 2020, Dr. Dunleavy’s compensation was comprised solely of his (i) base salary, (ii) matching contributions under Inovalon’s 401(k) plan, and (iii) premium payments for life insurance, with elements (ii) and (iii) being available to Dr. Dunleavy on the same basis as the benefits provided to all employees. By choice, Dr. Dunleavy does not participate in the Company’s equity compensation programs and he is not eligible for a cash bonus. The Compensation Committee and the independent members of the Board approve the compensation of Dr. Dunleavy. The Company believes that the compensation of Dr. Dunleavy is significantly below competitive levels for the Company’s size and industry. As the founder of Inovalon and its leader since formation, Dr. Dunleavy is focused on building long-term success, and as a significant stockholder in the Company, his personal wealth is tied directly to sustained increases in the Company’s value. Accordingly, we believe that Dr. Dunleavy’s significant equity ownership provides him sufficient motivation to perform his duties as CEO and Chairman of the Board.

CEO Pay Ratio

Dr. Dunleavy, our CEO, had 2020 annual total compensation of $211,827 as reflected in the Summary Compensation Table below. Our median employee’s annual total compensation for 2020 was $72,785. The resulting ratio of our CEO's pay to the pay of our median employee for fiscal year 2020 was 2.9 to 1.

We identified the "median employee" in accordance with Item 402(u) of Regulation S-K by examining the 2020 gross earnings for all individuals (whether employed full-time, part-time, or on a seasonal basis), including base pay, overtime, bonus payout, and equity awards, as derived from our payroll and tax records, excluding our CEO, who were employed by us on December 31, 2020. For such employees identified, we did not make any assumptions, adjustments, or estimates with respect to compensation, and we did not annualize the compensation for any full-time employees that were not employed by us for all of 2020. After identifying the median employee, as required by SEC rules, we calculated annual total compensation for such employee using the same methodology we use for our Named Executive Officers as set forth in the Summary Compensation Table below. The Company believes that the pay ratio included above is a reasonable estimate calculated in a manner consistent with applicable SEC rules.

Executive Compensation Program Elements

Base Salaries

We provide a base salary as a fixed source of compensation for our Named Executive Officers, allowing them a degree of certainty relative to the significant portion of their compensation based on equity awards with values that are generally tied to stock price. Our Compensation Committee recognizes the importance of base salaries as an element of compensation that helps to attract and retain highly qualified executive talent.


Compensation Discussion & Analysis			20

Initial base salaries of our executive officers are established through arm’s length negotiation at the time the individual executive officer is hired, taking into account his or her qualifications, experience, comparable market data and prior salary level. Thereafter, our Compensation Committee generally reviews, and adjusts as necessary, base salaries for each of our Named Executive Officers, at a minimum annually. Our Compensation Committee does not apply specific formulas in setting base salary levels or determining adjustments from year to year; however, our Compensation Committee targets paying each of our Named Executive Officers base salaries believed to be applicably competitive, generally in the upper 50% of our peer group, if such information is available, as the Compensation Committee believes such compensation level is generally required to retain our existing Named Executive Officers and to hire new executive officers when and as required.

Additionally, in setting base salary levels, our Compensation Committee may consider a range of factors, including:

•the individual’s anticipated responsibilities and experience, and cash compensation for similarly-situated executives at our peer group companies,

•our Compensation Committee members’ experience and knowledge in compensating similarly-situated individuals at other companies,

•the value of the Named Executive Officer’s existing equity awards, and

•a general sense of internal pay equity among our Named Executive Officers.

In November 2020, Mr. Boldt's base salary was increased from $325,000 to $375,000 following a compensation analysis undertaken at the request of the Compensation Committee and approved by the Board. In March 2021, Mr. De Bock's salary was increased by 3% to $437,750 as part of his annual review. Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit. Mr. Wychulis' base salary in 2021 is $150,000 per year.


Named Executive Officer	Base Salary in 2020 ($)	Base Salary in 2021 ($)
Keith R. Dunleavy, M.D.	205,000	205,000
Robert A. Wychulis	485,000	150,000
Jonathan R. Boldt	375,000	375,000
Jason B. Capitel	450,000	450,000
Peter De Bock	425,000	437,750

Cash Bonus

To maintain a competitive compensation program, in addition to base salaries, we also provide cash compensation in the form of cash bonuses. Our Named Executive Officers are eligible to receive a target cash bonus equal to a percentage of their base salary based on, among other factors, achievement of corporate financial goals and operational objectives and subject to the discretion of the Compensation Committee. The Compensation Committee believes that the use of performance-based cash bonuses helps motivate our employees, including our Named Executive Officers, to achieve our short-term financial and operational objectives while making progress towards our longer-term growth and other goals.

The Compensation Committee considers multiple factors in making its determination or recommendation as to cash bonus potentials and payouts, including individual performance, the recommendations of our CEO for all Named Executive Officers other than the CEO, and any compensation consultant’s benchmarking report regarding cash bonus potential and total compensation awarded by our peer group, as applicable in any given year. Cash bonuses, as approved by the Compensation Committee, are traditionally awarded in the first quarter for performance in the preceding year.

Based on overall Company performance, which met some, but not all, of our original financial goals, performance of the business unit each Named Executive Officer leads, and individual achievement of professional development goals, objectives and accomplishments of each Named Executive Officer in 2020, as evaluated by the CEO and presented to the Compensation Committee and the Board, annual cash bonuses were paid out in March 2021 for performance in fiscal year 2020 as noted in the table below:


Compensation Discussion & Analysis			21


Named Executive Officer	2020 Cash Bonus Target (% of Base Salary)	2020 Cash Bonus Target ($)	2020 Actual Cash Bonus Payout ($)	2020 Actual Bonus Payout (% of Base Salary)
Keith R. Dunleavy, M.D.	—	—	—	—
Robert A. Wychulis(1)	75%	363,750	254,625	53%
Jonathan R. Boldt	70%	262,500	172,480	46%
Jason A. Capitel	100%	450,000	315,000	70%
Peter De Bock	70%	297,500	208,250	49%

(1) Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

_________________________________________________________________________________________________________________________________________________________________________________________________

For 2020, each of Messrs. Wychulis, Capitel, De Bock, and Boldt were awarded cash bonuses below their target percentage of base salary.

Long-Term Equity Incentive Awards

We believe that providing long-term incentives in the form of equity awards encourages our Named Executive Officers to take a long-term outlook and provides our Named Executive Officers with an incentive to manage our Company from the perspective of an owner with an equity stake in the business. By providing opportunities for our Named Executive Officers to benefit from future successes in our business through the appreciation of the value of their equity awards, the Compensation Committee believes that equity awards align our Named Executive Officers’ interests and contributions with the long-term interests of our stockholders. In addition, the Compensation Committee believes that offering meaningful equity ownership in our Company assists us in retaining our Named Executive Officers and other key employees.

Restricted Stock Awards

Generally, our executive officers are granted equity awards at the time of hire, in the form of RSAs, the size and form of which are determined at the time of hire of the individual executive officer, taking into account the anticipated role, his or her qualifications, experience, comparable market data and prior compensation level. The RSAs granted to our executive officers upon hire generally vest 20% per year over a five-year period, subject to an executive officer’s continued provision of services to the Company through each applicable vesting date.

As noted above, RSAs are awarded to our Named Executive Officers as part of their annual performance evaluation as one component of their Total Target payouts. The Compensation Committee believes that, since the Company’s annual RSAs require an executive officer’s continued provision of services to the Company through each applicable vesting date, the annual RSAs serve as effective retention tools. The annual RSAs generally vest in accordance with the same five-year vesting schedule as the RSAs granted to our executive officers upon hire.

Based on overall Company performance, performance of the business unit each Named Executive Officer leads, and individual achievement of professional development goals, objectives and accomplishments of each Named Executive Officer in 2020, as evaluated by the CEO and presented to the Compensation Committee and the Board, the following RSAs were granted to our Named Executive Officers in February 2021 for performance in fiscal year 2020:


Named Executive Officer	2020 Target RSA (% of Base Salary)	2020 Target RSA ($)	2020 Actual RSA Granted ($)	2020 Actual RSA Granted (% of Base Salary)
Keith R. Dunleavy, M.D.	—	—	—	—
Robert A. Wychulis(1)	150%	727,500	509,250	105%
Jonathan R. Boldt	110%	440,513	287,740	77%
Jason B. Capitel	100%	450,000	315,000	70%
Peter De Bock	110%	467,500	327,250	77%

(1) Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

__________________________________________________________________________________________________________________________________________________________________________________________


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LTI Awards

LTI Awards are comprised of two components: (1) 50% of an LTI Award vests in the event that an employee is still employed by the Company five years following the grant date; and (2) 50% of an LTI Award is contingent upon achieving three-year performance goals and remaining employed through the fifth anniversary of the grant date. If the performance goals are met, the LTI Award holder “earns” the performance-based aspect of the LTI Award, but the award remains subject to the service-based cliff vesting condition until the fifth anniversary of the grant date. LTI Awards are granted in the form of RSAs.

Specifically, as to the performance-based aspect of the LTI Awards, 25% is dependent on achieving a GAAP revenue goal implicated by the Company’s three-year projection, and 25% is dependent on achieving an EBITDA goal implicated by the three-year projection. The Compensation Committee has authority to interpret or apply certain revenue and EBITDA goal adjustments as may be necessary each year to offset for or against various matters that would be outside of the spirit of the LTI Award. The Compensation Committee believes that providing a percentage of long-term equity compensation that is at risk based on pre-determined performance criteria better aligns executive officer compensation to stockholder interests and the long-terms goals of the Company.

Based on overall Company performance, performance of the business unit each Named Executive Officer leads, and individual achievement of professional development goals, objectives and accomplishments of each Named Executive Officer in 2020, as evaluated by the CEO and presented to the Compensation Committee and the Board, the following LTI Awards were granted to our Named Executive Officers in February 2021 for performance in fiscal year 2020:


Named Executive Officer	2020 Target LTI Award (% of Base Salary)	2020 Target LTI Award ($)	2020 Actual LTI Award Granted ($)	2020 Actual LTI Award Granted (% of Base Salary)
Keith R. Dunleavy, M.D.	—	—	—	—
Robert A. Wychulis(2)	150%	727,500	509,250	105%
Jonathan R. Boldt	50%	234,188	152,970	41%
Jason A. Capitel(1)	—	—	—	—
Peter De Bock	50%	212,500	148,750	35%

_________________________________________________________________________________________________________________________________________________________________________________________________

(1)Mr. Capitel's compensation structure as outlined in his Employment Agreement does not contemplate the awarding of LTI Awards; as such, he did not receive any LTI Awards for 2020.

(2)Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

Employee Stock Purchase Plan

Participation in the 2015 Employee Stock Purchase Plan (“ESPP”) is available to all Named Executive Officers on the same basis as our other employees. However, any Named Executive Officers who are 5% stockholders, or would become 5% stockholders as a result of their participation in the ESPP, are ineligible to participate in the ESPP. As a result, Dr. Dunleavy is ineligible to participate in the ESPP. Under the ESPP, eligible employees can purchase shares of our Class A common stock through payroll deductions at a discounted price. The ESPP provides for six-month offer periods. At the end of each offer period, employees are able to purchase shares at 85% of the fair market value of our Class A common stock on the purchase date. We believe that offering the ESPP aligns the interests of our broad employee base, including our Named Executive Officers, with the Company’s long-term objectives, because this discounted purchase price incentivizes our employees to acquire shares of our Class A common stock.

Change in Control Payments

On May 19, 2016, our Board adopted and approved an Executive Change in Control Severance Plan (the “CIC Plan”). The CIC Plan applies to each member of the Company’s (a) executive leadership team, including each of the Named Executive Officers, (b) full-time employees of the Company at the level of associate vice president and above, and (c) other employees designated from time to time by the Board or a committee thereof designated by the Board (each a “Participant”).


Compensation Discussion & Analysis			23

The CIC Plan provides for severance benefits in the event of a qualifying termination (as defined in the CIC Plan) of a Participant’s employment (a) by the Company without cause (as defined in the CIC Plan) within 60 days in advance of or within 24 months following a change in control (as defined in the Company’s 2015 Omnibus Incentive Plan and as limited by the CIC Plan) or (b) by the Participant for good reason (as defined in the CIC Plan) within 24 months following a change in control. Accordingly, the CIC Plan has a “double-trigger” before any payouts are made.

Under the terms of the CIC Plan, subject to the execution and effectiveness of a release of claims against the Company, following a qualifying termination, the Company will provide a Participant a cash payment in an amount equal to the product of the Participant’s applicable severance multiplier (as set forth in the CIC Plan) times the Participant’s base salary in effect on the date of the qualifying termination or, if greater, in effect on the date of the change in control. Participants are each assigned applicable severance multipliers based on their level of employment. As set forth in the CIC Plan, the applicable severance multiplier for all members of the executive leadership team, including each of our Named Executive Officers, is 1.50x. In addition, upon a qualifying termination, a Participant’s unvested time and performance-based equity awards become fully vested.

The CIC Plan does not obligate the Company to provide for a gross-up payment to any Participant to offset any excise taxes that may be imposed on excess parachute payments under Section 4999 of the Internal Revenue Code (the "Code").

For a quantification of the change in control arrangements of our Named Executive Officers, please see the discussion under Part 6, “Named Executive Officer Compensation – Potential Payments Upon Termination or Change in Control.”

Welfare and Other Benefits

We have established a tax-qualified Section 401(k) retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax-advantaged basis. Under this plan, employees may elect to defer their eligible compensation up to the statutory limit and contribute to the plan. Aside from our 401(k) Plan, we do not maintain any pension plan or arrangement under which our Named Executive Officers are entitled to participate or receive post-retirement benefits. We also do not maintain any nonqualified deferred compensation plans or arrangements under which our Named Executive Officers are entitled to participate.

In addition, we provide other employee welfare and benefit programs to our executive officers, including the Named Executive Officers, on the same basis as all of our full-time employees. These benefits include medical, dental, and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance and basic life insurance coverage.

We design our employee welfare and benefit programs to be affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee welfare and benefit programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.

We generally do not provide perquisites to our executive officers, except in limited situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes.

In the future, we may provide perquisites or other personal benefits in circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee.

Other Compensation Policies

Executive Officer Stock Ownership Guidelines


Compensation Discussion & Analysis			24

To further align the long-term interests of our executives and our stockholders, the Board has adopted stock ownership guidelines for our executive officers. Each executive officer of the Company, including our Named Executive Officers, is required, upon the later of (i) five years following his or her date of hire or promotion or (ii) five years from March 21, 2016, the effective date of the stock ownership guidelines, to own an amount of the Company’s Class A common stock (or shares convertible into Class A common stock including the Company’s Class B common stock) having an aggregate value at least equal to:

• CEO – Five times the annual base salary

• All others – Two times the annual base salary

Time-vested restricted stock and time-vested restricted stock units will be included when determining an individual’s stock ownership. Time-vested but unexercised stock options that are in-the-money will also be included when determining an individual’s stock ownership to the extent of their intrinsic value (the difference between the strike price and the current market price of the Company’s Class A common stock, multiplied by the number of vested stock options).

Failure to meet or show sustained progress toward meeting the ownership requirements set forth in the stock ownership guidelines may result in a reduction in future long term incentive grants and/or the requirement to retain all stock obtained through the vesting or exercise of equity grants. Currently, we believe that all Named Executive Officers are on track to meet or have met the stock ownership guidelines within the required time periods.

Policy Regarding the Pricing and Timing of Equity Awards

In 2020, all equity awards to our employees, including our Named Executive Officers, and to our directors were granted at the closing price of our stock on NASDAQ on the date of grant and reflected in our consolidated financial statements, based upon the applicable accounting guidance, based on such price. We have not adopted a policy or practice pertaining to the timing of stock option grants to executive officers relative to the timing of the release of material nonpublic information. We do not currently have any plans to implement such a policy or practice.

Insider Trading Policy and Rule 10b5-1 Sales Plans

We have an insider trading policy that prohibits our officers, directors and certain other persons from engaging in, among other activities, short sales, hedging of stock ownership positions, using our securities as collateral in a margin account, the pledging of our securities as collateral for loans, and transactions involving derivative securities relating to the Company’s common stock. Our insider trading policy permits our officers, directors and employees to enter into trading plans complying with Rule 10b5-1 under the Exchange Act.

Tax Considerations

Section 162(m) of the Code limits the amount that a company may deduct for compensation paid to specified executive officers. Although the Compensation Committee considers the deductibility of compensation as a factor in making compensation decisions, it retains the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation may not be fully tax-deductible.

Clawback Policy

In November 2019, the Company's Compensation Committee recommended and the Board of Directors adopted the Inovalon Holdings, Inc. Policy for Recoupment of Compensation (the "Clawback Policy"). The Clawback Policy is designed to ensure that compensation paid to covered employees ("Affected Officers") is appropriately adjusted and/or recovered in the event that actions taken or decisions made by the Affected Officer in circumstances constituting illegal or intentionally wrongful conduct, gross negligence and/or a material violation of Company policy results in significant financial loss, reputational damage or similar adverse impact to the Company ("Misconduct"). If the Board determines that an Affected Officer has engaged in Misconduct, the Company may seek to recover from the Affected Officer up to the full amount of any compensation received by the Affected Officer after the date the Board determines the Misconduct occurred.

Risks Related to Compensation Policies and Practices


Named Executive Officer Compensation			25

As part of its oversight function, our Board, and our Compensation Committee in particular, along with our management team, considers potential risks when reviewing and approving various compensation plans, including executive compensation. Based on this review, our Board has concluded that such compensation plans, including executive compensation, do not encourage risk taking to a degree that is reasonably likely to have a materially adverse impact on us or our operations.


Named Executive Officer Compensation			26

PART 5 – NAMED EXECUTIVE OFFICER COMPENSATION

Fiscal Year 2020 Compensation Tables

Summary Compensation Table – 2020

The following table sets forth a summary of all compensation that was awarded to, earned by or paid to, as applicable, each of our Named Executive Officers for the years ended December 31, 2020, 2019 and 2018.


Name And Principal Position	Year	Salary ($)	Bonus(1) ($)	Stock Awards(2) ($)	Option Awards ($)	All Other Compensation(3) ($)	Total ($)
Keith R. Dunleavy, M.D.	2020	205,000	—	—	—	6,827	211,827
Chief Executive Officer	2019	205,000	—	—	—	5,551	210,551
	2018	205,000	—	—	—	5,325	210,325
Robert A. Wychulis(4)	2020	485,000	254,625	2,455,041	—	17,298	3,212,594
Fmr. President	2019	485,000	363,750	400,018	—	10,061	1,258,829
	2018	485,000	100,000	960,305	—	12,184	1,557,489
Jonathan R. Boldt(5)	2020	375,000	172,480	5,072,054	—	14,466	5,634,000
Chief Financial Officer	2019	325,000	340,661	2,178,607	—	11,405	2,855,673
	2018	240,000	40,000	670,773	—	10,873	961,556
Jason Capitel	2020	450,000	315,000	3,750,025	—	14,149	4,529,174
Chief Operating Officer	2019	450,000	950,000	500,004	—	49,346	1,949,350
	2018	402,308	210,000	7,000,018	—	52,695	7,665,021
Peter De Bock	2020	425,000	208,250	538,916	—	15,282	1,187,448
Chief Administrative	2019	425,000	229,647	2,100,009	—	112,073	2,866,729
Officer

_________________________________________________________________________________________________________________________________________________________________________________________________

(1) The amounts reported in the “Bonus” column represent the cash portion of the discretionary bonus awarded to the Named Executive Officers (other than Dr. Dunleavy) by our Compensation Committee in March 2021 for service in 2020, in March 2020 for service in 2019, and in March 2019 for service in 2018, respectively.

(2) The amounts reported in the “Stock Awards” column represent the aggregate grant date fair value of awards granted to our Named Executive Officers in the respective fiscal years. The valuation of stock awards is based on the grant date fair value computed in accordance with FASB ASC Topic 718. The assumptions used to calculate the fair value of stock awards are set forth in the section entitled “Critical Accounting Policies” under Item 7 and Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. In 2020, each of Messrs. Boldt, Capitel and Wychulis were granted performance incentive RSAs that require achievement of certain annual revenue and profitability targets, in addition to time-based service, in order for the awards to vest.

(3) With respect to 2020, for Dr. Dunleavy and Messrs. Wychulis, Boldt, Capitel and De Bock such amounts represent matching contributions under our 401(k) plan and premium payments for life insurance.

(4) Effective December 31, 2020, Mr. Wychulis formally transitioned his role from President to a new position as Fellow of the Company's Payer Business Unit.

(5) Per the request of the Compensation Committee and as approved by the Board, in November 2020, Mr. Boldt's salary was increased to $375,000 per year.

Grants of Plan-Based Awards in 2020

The following table sets forth information regarding grants of awards made to our Named Executive Officers during fiscal year 2020.


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Name	Grant Date	All Other Stock Awards: Number of Shares of Stock or units (#)	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)(1)
Keith R. Dunleavy, M.D.	—	—	—	—	—
Robert A. Wychulis	2/13/2020	33,144(2)	—	—	727,510
	2/13/2020	33,144(3)	—	—	727,510
	2/13/2020	45,559(4)	—	—	1,000,020
Jonathan R. Boldt	2/13/2020	17,916(2)	—	—	393,256
	2/13/2020	8,144(3)	—	—	178,760

SEC Form DEF 14A filed by Inovalon Holdings, Inc.