ENCOMPASS HEALTH CORP (EHC)
Sector: Health Care
2026 Annual Meeting Analysis
ENCOMPASS HEALTH CORP · Meeting: May 7, 2026
Directors FOR
10
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of 10 Directors to Serve Until the 2027 Annual Meeting of Stockholders
Independent chairman with extensive financial and technology leadership experience; EHC's 3-year stock return of +101.2% outperforms the peer group median by +59.4 percentage points, well above the 65pp threshold required to trigger an against vote, and no other policy flags apply.
Joined the board in November 2023, which is within the 24-month exemption window, making him exempt from the TSR trigger; he brings substantial CFO and public-company leadership experience and qualifies as an audit committee financial expert.
Elected to the board on January 30, 2026, well within the 24-month new-director exemption; he brings deep healthcare payor and financial services experience relevant to EHC's business.
Long-tenured director with deep healthcare industry and managed care expertise; EHC's strong stock outperformance versus the peer group (+59.4pp vs. the 65pp threshold) means the TSR trigger does not apply, and no other policy flags are present.
Long-tenured director with extensive CFO and healthcare-sector financial experience; qualifies as an audit committee financial expert, and EHC's peer-relative TSR outperformance of +59.4pp does not meet the 65pp threshold needed to trigger an against vote.
Joined the board in March 2022, giving him approximately four years of tenure; EHC's 3-year stock return substantially outperforms the peer group, and he brings significant legal, compliance, and healthcare governance experience with no other policy flags.
Former CFO of a major global medical technology company with deep finance, accounting, and cybersecurity oversight experience; qualifies as an audit committee financial expert, and EHC's TSR outperformance means the TSR trigger does not fire.
Former CEO of a major integrated health system with extensive healthcare provider leadership experience directly relevant to EHC's business; EHC's strong peer-relative stock performance means no TSR trigger applies.
CEO-director with over 30 years of experience operating inpatient rehabilitation hospitals; as an executive director he is subject to the same TSR trigger as other directors, but EHC's 3-year return of +101.2% outperforms the peer group by +59.4pp, which does not meet the 65pp threshold, so no against vote is triggered.
Current CEO of a large insurance and financial services company with broad marketing, sales, and regulated-industry experience; joined the board in January 2020, and EHC's strong TSR outperformance relative to peers means no TSR trigger applies.
All 10 director nominees receive a FOR vote. EHC's 3-year stock return of +101.2% outperforms the compensation peer group median by +59.4 percentage points — below the 65pp underperformance threshold required under the policy to trigger an against vote for directors with strong positive absolute returns. Two directors (Christie and Hayes) are also independently exempt as new directors within the 24-month window. No overboarding, attendance, independence, or familial-relationship flags were identified for any nominee.
Say on Pay
✓ FORCEO
Mark J. Tarr
Total Comp
$10,297,258
Prior Support
97.6%%
CEO total compensation of approximately $10.3 million is reasonable for a healthcare company of EHC's size and scope, and the pay structure is heavily performance-oriented — roughly 73% of the CEO's total pay is variable and performance-based, well above the 50-60% minimum the policy looks for. The long-term incentive program uses rigorous multi-year metrics (three-year earnings per share, return on invested capital, and a relative total shareholder return modifier), directly linking executive rewards to outcomes shareholders experience, and the 2023 performance stock awards paid out at 200% of target because the company's actual results, including a 91.4% three-year stock return that ranked at the 83.7th percentile of peers, genuinely earned that payout. The company also maintains a strong clawback policy, robust equity ownership requirements, and received 97.6% shareholder support in 2025, indicating broad investor endorsement of the program.
Auditor Ratification
✓ FORAuditor
PricewaterhouseCoopers LLP
Tenure
N/A
Audit Fees
$3,360,000
Non-Audit Fees
$260,000
Non-audit fees of approximately $260,000 represent only about 7.7% of audit fees of $3,360,000, far below the 50% threshold that would raise independence concerns; PwC is a Big 4 firm fully appropriate for a company of EHC's size and complexity; auditor tenure is not disclosed in the proxy so the tenure trigger cannot fire under policy, and no material restatements were identified.
Overall Assessment
Encompass Health's 2026 annual meeting presents a clean ballot with three standard proposals and no stockholder proposals. All director nominees, the auditor ratification, and the say-on-pay proposal receive FOR votes, supported by EHC's strong 3-year stock return of +101.2% (outperforming both the compensation peer group and the IHF — iShares U.S. Healthcare Providers ETF benchmark), a well-structured performance-based compensation program with 97.6% prior-year shareholder approval, and a low non-audit fee ratio that poses no auditor independence concerns.
Compensation Peer Group
20 companies disclosed in 2026 proxy filing