Document

DEF 14A 1 a2021proxydef14a.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

________________________________________________________________

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

Surgery Partners, 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):


x	No fee required.

o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)	Title of each class of securities to which transaction applies:

	(2)	Aggregate number of securities to which transaction applies:

	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)	Proposed maximum aggregate value of transaction:

	(5)	Total fee paid:


o	Fee paid previously with preliminary materials.

o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)	Amount previously paid:

	(2)	Form, Schedule or Registration Statement No:

	(3)	Filing party:

	(4)	Date Filed:

April 15, 2021

TO OUR STOCKHOLDERS:

You are cordially invited to attend the 2021 annual meeting of stockholders of Surgery Partners, Inc., to be held on May 26, 2021, at 8:00 a.m. (Central Daylight Time). As part of our ongoing efforts to maintain a healthy and safe environment in light of the COVID-19 pandemic, the annual meeting will be held solely by remote communication in a virtual meeting format. If you attend the annual meeting virtually by following the instructions set forth in the proxy materials, you will be considered present at the meeting.

In accordance with rules adopted by the Securities and Exchange Commission, we are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of the Proxy Statement, the proxy card and our Annual Report to Stockholders. The Notice of Internet Availability of Proxy Materials contains instructions on how stockholders can access the proxy materials over the internet as well as request a paper or email copy if desired.

It is important that your shares be represented at the annual meeting. Whether or not you plan to attend the annual meeting, we would greatly appreciate your efforts to vote your shares as soon as possible by following the instructions located in the Notice of Internet Availability of Proxy Materials or in our proxy statement. If you attend the annual meeting and wish to vote at that time, you may withdraw your proxy and vote your shares personally.

Sincerely,

/s/ Wayne S. DeVeydt

Wayne S. DeVeydt

Executive Chairman of the Board of Directors

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

MAY 26, 2021

DATE: May 26, 2021

TIME: 8:00 a.m. CDT

PLACE: The annual meeting will be held solely by remote communication in a virtual meeting format. You will be able to

attend the annual meeting by visiting www.meetingcenter.io/248273463 using the password SGRY2021 and entering the 15-digit control number found on the proxy card or voting instruction form. If you attend the annual meeting virtually, you will be considered present at the meeting.

ITEMS OF BUSINESS:

1.To elect the four Class III director nominees named in this Proxy Statement to the Board of Directors of Surgery Partners, Inc. (the "Company") for a term of three years;

2.To approve, on an advisory basis, the compensation paid by the Company to its named executive officers;

3.To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;

4.To approve an amendment to the Company's 2015 Omnibus Incentive Plan, as amended and restated effective January 1, 2020 (the "Omnibus Incentive Plan"), to increase the number of authorized shares reserved for issuance under the Omnibus Incentive Plan and to provide for the sale of shares on the market to cover required tax-withholdings under awards; and

5.To consider and act upon any other business that may properly come before the 2021 annual meeting of stockholders and at any adjournment or postponement thereof.

Information relating to the matters to be considered and voted on at the annual meeting is set forth in the enclosed proxy materials.

RECORD DATE: Holders of shares of our common stock of record at the close of business on April 8, 2021 are entitled to receive notice of and vote at the annual meeting and at any adjournment or postponement thereof.

ANNUAL REPORT: The Company's Annual Report to Stockholders for the fiscal year ended December 31, 2020, which is not part of the proxy soliciting materials, is available to you on the internet or, upon request, will be delivered to you by mail or email.

PROXY VOTING: It is important that your shares be represented and voted at the meeting. You can vote your shares by phone or online, or if you request a printed copy, by completing and returning the proxy card sent to you. You can revoke a proxy at any time prior to its exercise at the annual meeting by following the instructions in the attached Proxy Statement. If you decide to attend the annual meeting and wish to change your proxy, you may do so by voting during the meeting.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, AFTER REVIEWING THE PROXY MATERIALS, PLEASE VOTE BY PHONE OR ONLINE BY FOLLOWING THE INSTRUCTIONS SET FORTH IN THE FOLLOWING PROXY MATERIALS, OR IF YOU REQUESTED A PRINTED COPY, PLEASE COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.

The Board of Directors unanimously recommends that you vote: (i) "FOR" the election of the four Class III director nominees named in the Proxy Statement, (ii) "FOR" the approval, on an advisory basis, of the compensation paid by the Company to its named executive officers, (iii) "FOR" ratification of the Audit Committee’s appointment of Deloitte & Touche LLP as the Company's

independent registered public accounting firm, and (iv) "FOR" the amendment to the Omnibus Incentive Plan.

You are welcome to attend the annual meeting by visiting www.meetingcenter.io/248273463 using the password SGRY2021 and entering the 15-digit control number found on the proxy card or voting instruction form. Once admitted, you may submit questions, vote or view our list of stockholders during the annual meeting by following the instructions that will be available on the meeting website.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the annual meeting virtually on the internet. To register to attend the annual meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Company holdings along with your name and email address to Computershare, Inc. (a subsidiary of Computershare Trust Company, N.A.), the Company’s transfer agent. Requests for registration must be labeled as “Legal Proxy” and be received no later than 4:00 p.m., Central Daylight Time, on May 21, 2021. You will receive a confirmation of your registration by email after we receive your registration materials.

If you have any questions on how to attend the annual meeting, please contact Investor Relations at 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027, (615) 234-5900 or email ir@surgerypartners.com.

Thank you for your ongoing support of and interest in Surgery Partners, Inc.

By Order of the Board of Directors,

/s/ Wayne S. DeVeydt

Wayne S. DeVeydt

Executive Chairman of the Board of Directors

Brentwood, Tennessee

April 15, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 26, 2021:

THE PROXY STATEMENT, THE PROXY CARD AND OUR ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 ARE AVAILABLE TO YOU ON THE INTERNET OR, UPON YOUR REQUEST WILL BE DELIVERED TO YOU BY MAIL OR EMAIL, IN CONNECTION WITH THE SOLICITATION OF PROXIES BY THE BOARD OF DIRECTORS OF THE COMPANY TO BE VOTED ON AT THE ANNUAL MEETING. THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS IS SCHEDULED TO BE DISTRIBUTED ON OR ABOUT APRIL 15, 2021 TO STOCKHOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON APRIL 8, 2021.

THE PROXY STATEMENT, THE PROXY CARD AND OUR ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 ARE AVAILABLE ON THE INTERNET AT WWW.INVESTORVOTE.COM/SGRY.

TABLE OF CONTENTS


			Page

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING			1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			5
PROPOSAL NO. 1: ELECTION OF DIRECTORS			8
CORPORATE GOVERNANCE			11
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION			16
EXECUTIVE OFFICERS			17
COMPENSATION DISCUSSION AND ANALYSIS			19
REPORT OF THE COMPENSATION COMMITTEE			29
EXECUTIVE COMPENSATION			30
DIRECTOR COMPENSATION			43
PROPOSAL NO. 3: RATIFICATION OF THE AUDIT COMMITTEE'S APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			44
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			45
REPORT OF THE AUDIT COMMITTEE			46
PROPOSAL NO. 4: AMENDMENT TO THE COMPANY'S OMNIBUS INCENTIVE PLAN			47
EQUITY COMPENSATION PLANS			50
RELATED PERSON TRANSACTIONS			51
GENERAL MATTERS			51
APPENDIX A			A-1
APPENDIX B			B-1


Title of Class	Name of Beneficial Owner	Number of Shares of Common Stock Beneficially Owned	Percentage of Common Stock Beneficially Owned
Common Stock
	Beneficial owners of 5% or more of our common stock:
	BCPE Seminole Holdings LP (1)(2)	49,193,422	59.5 %
	Fidelity Management & Research Company LLC (3)	5,392,300	9.0	%
	Clearbridge Investments, LLC (4)	3,690,735	6.2	%
	Directors and Named Executive Officers:
	Brent Turner (5)	47,686	*
	Teresa DeLuca, M.D.	31,141	*
	Andrew T. Kaplan (6)	—	—
	T. Devin O'Reilly (6)	—	—
	Blair E. Hendrix (6)	—	—
	John A. Deane	12,999	*
	Clifford G. Adlerz	36,181	*
	Patricia A. Maryland, Dr.PH	3,330	*
	Wayne S. DeVeydt (7)	858,237	1.4	%
	J. Eric Evans (8)	542,453	*
	Thomas F. Cowhey (9)	303,072	*
	Jennifer B. Baldock (10)	266,364	*
	George M. Goodwin (11)	180,315	*
	Anthony W. Taparo (12)	221,803	*
	All executive officers and directors as a group (15 persons) (13)	2,612,232	4.3	%

Preferred Stock
	Beneficial owners of 5% or more of our preferred stock:
	BCPE Seminole Holdings LP (2)	310,000	100	%


Name	Age	Position
John A. Deane	59	Class I Director
Teresa DeLuca, M.D.	55	Class I Director
Wayne S. DeVeydt	51	Class I Director, Chairman
Patricia A. Maryland, Dr.PH	67	Class II Director
T. Devin O'Reilly	46	Class II Director
Brent Turner	55	Class II Director
Clifford G. Adlerz	67	Class III Director
J. Eric Evans	44	Class III Director
Andrew T. Kaplan	36	Class III Director


Named Executive Officer			Title
Wayne S. DeVeydt(1)			Executive Chairman
J. Eric Evans(1)			Chief Executive Officer
Thomas F. Cowhey			Executive Vice President and Chief Financial Officer
Jennifer B. Baldock			Executive Vice President, Chief Administrative and Development Officer
George M. Goodwin			President, ASC Group
Anthony W. Taparo			Chief Growth Officer


Acadia Healthcare Company, Inc.	Hanger	Mednax, Inc.
Amedisys, Inc.	Chemed Corporation	Quorum Health Corporation
Encompass Health (formerly HealthSouth Corporation)	LHC Group, Inc.	The Ensign Group, Inc.
Genesis Healthcare


Named Executive Officer	2019 Base Salary	2020 Base Salary (1)
Wayne S. DeVeydt	$1,250,000	$250,000
J. Eric Evans	600,000	1,050,000
Thomas F. Cowhey	450,000	500,000
Jennifer B. Baldock	400,000	420,000
George M. Goodwin	400,000	440,000
Anthony W. Taparo	400,000	410,000


2020 Cash Incentive Plan Performance Goals	Threshold	Target	Above Target	Maximum
Adjusted EBITDA (in millions)	$271.0	$285.0	$290.0	$303.0
Payout	25%	100%	110%	200%


Revised 2020 Cash Incentive Plan Performance Goals	Threshold	Target	Maximum
Adjusted EBITDA (in millions)	$229.6	$252.6	$266.6
Payout	25%	100%	200%


Named Executive Officer			2020 Cash Incentive Award Earned (1)
Wayne S. DeVeydt			$250,000
J. Eric Evans			750,000
Thomas F. Cowhey			375,000
Jennifer B. Baldock			252,000
George M. Goodwin			264,000
Anthony W. Taparo			246,000


Named Executive Officer			2021 Short-Term Incentive Award Target
Wayne S. DeVeydt			$250,000
J. Eric Evans			750,000
Thomas F. Cowhey			393,750
Jennifer B. Baldock			252,000
George M. Goodwin			264,000
Anthony W. Taparo			246,000


Named Executive Officer	Time-based restricted stock		PSUs (at Target)
	$ value	# shares of Company stock	$ value	# units of Company stock
Wayne S. DeVeydt	—	—	—	—
J. Eric Evans	625,000	97,809	625,000	97,809
Thomas F. Cowhey	250,000	39,123	250,000	39,123
Jennifer B. Baldock	225,000	35,211	225,000	35,211
George M. Goodwin	220,000	34,428	220,000	34,428
Anthony W. Taparo	205,000	32,081	205,000	32,081


Name and Principal Position	Year	Salary	Bonus	Stock Awards(4)(5)	Option Awards(6)	Non-Equity Incentive Plan Compensation (7)	Change in Pension Value and Nonqualified Deferred Compensation Earnings	All Other Compensation (8)	Total
Wayne S. DeVeydt Executive Chairman (1)	2020	$304,397	$—	$125,000	$—	$125,000	$—	$5,131	$559,528
	2019	1,332,339	—	1,993,750	301,366	—	—	3,785	3,631,240
	2018	1,240,385	—	3,314,513	6,418,500	437,500	—	900	11,411,798
J. Eric Evans Chief Executive Officer (1)	2020	915,963	—	2,250,000	—	375,000	—	900	3,541,863
	2019	435,157	300,000(3)	1,382,500	2,526,598	—	—	675	4,644,930
Thomas F. Cowhey Executive Vice President and Chief Financial Officer	2020	481,581	—	937,500	—	187,500	—	3,323	1,609,904
	2019	469,030	—	500,000	1,632,464	286,875	—	900	2,889,269
	2018	339,231	—	1,572,517	—	200,000	—	103,116	2,214,864
Jennifer B. Baldock Executive Vice President, Chief Administrative and Development Officer	2020	411,097	—	576,000	—	126,000	18,963	14,600	1,146,659
	2019	440,481	—	450,000	766,372	170,000	27,991	14,500	1,869,343
	2018	400,000	—	564,197	—	160,000	(8,594)	12,842	1,128,445
George M. Goodwin President, ASC Group	2020	427,268	—	572,000	—	132,000	83,822	14,437	1,229,527
	2019	442,563	—	350,000	594,047	170,000	116,685	14,500	1,687,795
	2018	389,646	—	350,000	—	160,000	(37,674)	12,937	874,909
Anthony W. Taparo Chief Growth Officer (2)	2020	404,230	—	533,000	—	123,000	76,749	13,577	1,150,556


Named Executive Officer	Exchange/ Grant Date	Target Number of LPUs to be replaced with Option Award Shares on Grant Date	Stock Option Grants
Wayne S. DeVeydt	3/15/2019	59,206	490,000
Thomas F. Cowhey	3/15/2019	29,603	403,500
Jennifer B. Baldock	3/15/2019	22,943	199,500
George M. Goodwin	3/15/2019	17,985	148,500


Name	Year	Company 401(k) match contributions (a)	Company contributions under the SERP (b)	Company reimbursements for housing expenses (c)	Other (d)	Total
Wayne S. DeVeydt	2020	$4,231	$—	$—	$900	$5,131
	2019	2,885	—	—	900	3,785
	2018	—	—	—	900	900
J. Eric Evans	2020	—	—	—	900	900
	2019	—	—	—	675	675
Thomas F. Cowhey	2020	2,423	—	—	900	3,323
	2019	—	—	—	900	900
	2018	—	—	102,366	750	103,116
Jennifer B. Baldock	2020	5,700	8,000	—	900	14,600
	2019	5,600	8,000	—	900	14,500
	2018	3,942	8,000	—	900	12,842
George M. Goodwin	2020	5,537	8,000	—	900	14,437
	2019	5,600	8,000	—	900	14,500
	2018	5,400	6,637	—	900	12,937
Anthony W. Taparo	2020	4,677	8,000	—	900	13,577


Name	2020 PSU Awards	2019 PSU Awards	2018 PSU Awards
Wayne S. DeVeydt	$—	$937,494	$—
J. Eric Evans	1,875,000	—	—
Thomas F. Cowhey	750,000	374,982	250,000
Jennifer B. Baldock	450,000	337,500	225,000
George M. Goodwin	440,000	262,495	175,000
Anthony W. Taparo	410,000	—	—


			Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)			Estimated Future Payouts Under Equity Incentive Plan Awards			All other stock awards: Number of shares of stock (# of shares)	Grant Date fair value of stock and option awards
Name	Type of Award	Grant Date	Threshold	Target	Maximum	Threshold (# of shares)	Target (# of shares)	Maximum (# of shares)
Wayne S. DeVeydt	Cash Incentive	—	$62,500	$250,000	$500,000	—	—	—	—	$—
	Unrestricted Stock (2)	3/27/20	—	—	—	—	—	—	112,348	743,744
J. Eric Evans	Cash Incentive	—	187,500	750,000	1,500,000	—	—	—	—	—
	Restricted Stock (5)	3/13/20	—	—	—	—	—	—	97,809	625,000 (6)
	PSUs (3)	3/13/20	—	—	—	24,452	97,809	195,618	—	625,000 (7)
	PSUs (4)	3/13/20	—	—	—	—	97,809	—	—	625,000 (7)
	Unrestricted Stock (2)	3/27/20	—	—	—	—	—	—	57,779	382,497
Thomas F. Cowhey	Cash Incentive	—	93,750	375,000	750,000	—	—	—	—	—
	Restricted Stock (5)	3/13/20	—	—	—	—	—	—	39,123	250,000 (6)
	PSUs (3)	3/13/20	—	—	—	9,781	39,123	78,246	—	250,000 (7)
	PSUs (4)	3/13/20	—	—	—	—	39,123	—	—	250,000 (7)
Jennifer B. Baldock	Cash Incentive	—	63,000	252,000	504,000	—	—	—	—	—
	Restricted Stock (5)	3/13/20	—	—	—	—	—	—	35,211	225,000 (6)
	PSUs (3)	3/13/20	—	—	—	8,803	35,211	70,422	—	225,000 (7)
George M. Goodwin	Cash Incentive	—	66,000	264,000	528,000	—	—	—	—	—
	Restricted Stock (5)	3/13/20	—	—	—	—	—	—	34,428	220,000 (6)
	PSUs (3)	3/13/20	—	—	—	8,607	34,428	68,856	—	220,000 (7)
Anthony W. Taparo	Cash Incentive	—	61,500	246,000	492,000	—	—	—	—	—
	Restricted Stock (5)	3/13/20	—	—	—	—	—	—	32,081	205,000 (6)
	PSUs (3)	3/13/20	—	—	—	8,020	32,081	64,162	—	205,000 (7)


	Option Awards				Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price	Option Expiration Date	Number of shares or units of stock that have not vested (#)	Market value of shares or units of stock that have not vested (14)	Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not yet vested (#)	Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not yet vested (14)
Wayne S. DeVeydt	150,000 (1)	350,000 (1)	$12.90	1/4/2028	—	$—	—	$—
	60,000 (2)	140,000 (2)	12.90	1/4/2028	—	—	—	—
	163,332 (3)	326,668 (3)	13.42	3/15/2029	—	—	—	—
	—	—	—	—	32,301 (4)	937,052	—	—
	—	—	—	—	31,048 (5)	900,702	—	—
	—	—	—	—	46,572 (6)	1,351,054	—	—
J. Eric Evans	166,665 (8)	333,335

SEC Form DEF 14A filed by Surgery Partners, Inc.