CHEMED CORP (CHE)
Sector: Health Care
2026 Annual Meeting Analysis
CHEMED CORP · Meeting: May 18, 2026
Directors FOR
1
Directors AGAINST
8
Say on Pay
FOR
Auditor
AGAINST
Director Elections
Election of Directors
Against Analysis
CHE's 3-year stock return of -26.6% trails the company-disclosed peer group median of +99.8% by 126.4 percentage points, far exceeding the 20pp trigger threshold applicable to negative absolute TSR; additionally, McNamara's son serves as a VP and Chief Strategy Officer, creating a familial relationship to senior management that is a separate concern under the director elections policy.
DeLyons has served since 2020, well beyond the 24-month exemption window, and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger; the 5-year gap of -79.6pp also exceeds the applicable 20pp threshold, so the 5-year mitigant does not apply.
Grace has served since 1996 and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger threshold; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
Heaney has served since 2020, beyond the 24-month new-director exemption, and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
Hutton has served since 1985 and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger threshold; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
Lindell has served since 2008 and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger threshold; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
Mount has served since 2022, which is beyond the 24-month exemption window, and CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
Walsh has served since 1995 and as Chairman bears particular accountability for board oversight; CHE's 3-year stock return trails the peer group median by 126.4 percentage points, far exceeding the 20pp trigger threshold; the 5-year gap of -79.6pp also exceeds the 20pp threshold, so the 5-year mitigant does not apply.
For Analysis
McCarthy joined in 2023, which is within 24 to 36 months of the meeting date — her tenure covers less than the full 3-year underperformance period, and under the policy, directors who joined within 24 months are fully exempt; as she joined in 2023 (approximately 3 years ago but with tenure covering less than the full underperformance window), the policy flags but does not automatically vote No, and given her limited tenure overlap the vote is FOR.
CHE's 3-year stock return of -26.6% dramatically underperforms the company-disclosed peer group median of +99.8% by 126.4 percentage points — far beyond the 20pp trigger threshold for negative absolute TSR. The 5-year gap of -79.6pp also exceeds the threshold, so the longer-term mitigant does not rescue any director. Eight of nine directors receive AGAINST votes on TSR grounds; newly joined director Eileen McCarthy (2023) receives a FOR vote as her tenure covers less than the full underperformance period. An additional concern applies to CEO McNamara as a director due to a familial relationship (son employed as VP). Note that the IHF benchmark shows a smaller gap of only -12.4pp (below the 30pp ETF trigger), but the policy requires using the named peer group as the primary benchmark, and that peer group comparison triggers the vote.
Say on Pay
✓ FORCEO
K.J. McNamara
Total Comp
$12,904,720
Prior Support
88.63%%
The CEO's total compensation of approximately $12.9 million is within a reasonable range for a healthcare services company of Chemed's size and complexity, and about 72.9% of his pay is performance-based (variable), well above the 50-60% minimum threshold. The annual bonus paid out at only 60% of target because the company missed its Adjusted EPS and Return on Assets goals, demonstrating that the incentive structure does reduce pay when performance falls short; additionally, the company has a meaningful clawback policy compliant with NYSE requirements, and the prior year Say on Pay vote received strong 88.63% shareholder support.
Auditor Ratification
✗ AGAINSTAuditor
PricewaterhouseCoopers LLP
Tenure
55 yrs
Audit Fees
$2,637,000
Non-Audit Fees
$180,000
PricewaterhouseCoopers has served as Chemed's auditor since 1971 — a relationship of approximately 55 years — which far exceeds the policy's 25-year tenure threshold for a No vote. The non-audit fee ratio is only about 6.8% of audit fees (well below the 50% threshold), and the auditor is a Big 4 firm appropriate for a company of this size, so those screens pass cleanly; however, the extreme length of the auditor tenure raises meaningful independence concerns that the proxy's stated justification ('substantial working knowledge') does not overcome under the policy.
Overall Assessment
The 2026 Chemed annual meeting ballot presents three standard proposals: director elections, auditor ratification, and Say on Pay. The dominant issue on this ballot is severe stock price underperformance — CHE's 3-year return of -26.6% trails its own disclosed peer group median by over 126 percentage points, triggering AGAINST votes for eight of nine director nominees; the auditor ratification also fails due to PricewaterhouseCoopers' 55-year tenure, far exceeding the policy's 25-year limit; only the Say on Pay proposal earns a FOR vote, as the pay structure is performance-linked and pay was appropriately reduced when targets were missed.
Compensation Peer Group
15 companies disclosed in 2026 proxy filing