Claritev Corp announces executive compensation changes

Claritev Corp (NYSE:CTEV), a business services company with a market capitalization of $312 million, disclosed updates to its executive compensation arrangements in a recent SEC filing. The amendments, effective as of last week, involve changes to the employment agreements of the Chief Financial Officer (CFO) Douglas M. Garis and Chief Executive Officer (CEO) Travis S. Dalton, as well as severance agreements with certain other executives. According to InvestingPro data, the company currently operates with a significant debt burden, with a debt-to-equity ratio of 54.09, while maintaining an EBITDA of $531 million.

According to the filing, if Garis or Dalton are terminated without cause or resign for good reason within a year following a change in control, they will receive severance payments of one and a half times and two times their base salary plus target bonus, respectively. These payments will be made in monthly installments, and the company will cover health insurance premiums for the duration of the severance period.

Dalton's 2025 annual equity grant will consist of time-based restricted stock units (RSUs) with a four-year vesting period valued at approximately $2.67 million, and cash-settled RSUs worth $8 million, both subject to specific terms outlined in the filing.

The severance letters for the other executives stipulate that they will receive severance payments ranging from half to one and a half times their base salary and annual target bonus, depending on the circumstances of their termination. These payments will also be made in monthly installments, and health insurance premiums will be reimbursed for the severance period. This comes as the company faces financial challenges, with InvestingPro analysis showing a current ratio of 0.82, indicating that short-term obligations exceed liquid assets. For deeper insights into Claritev's financial health and extensive metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The company's 2025 annual awards for executive officers will be a mix of time-based RSUs with a four-year vesting schedule and cash-settled RSUs with a two-year vesting schedule. These awards have a cap on settlement value but may result in an additional payment if a change in control occurs within five years of the grant date.

In case of termination due to death or disability, the unvested RSUs will fully vest. A pro-rata portion of the next vesting tranche will vest if an executive is terminated without cause outside of a change in control period. Similar protections apply to the CEO if he resigns for good reason.

The changes in executive compensation come as Claritev Corp continues to adapt its corporate governance practices and align executive incentives with shareholder interests. The stock has shown significant volatility, with a 92.5% gain over the past six months despite an 18% decline in the past week. The information is based on the latest SEC filing by the company and InvestingPro data, which offers 11 additional investment tips and comprehensive analysis for this stock.

In other recent news, Claritev Corp, formerly known as Multiplan, reported mixed financial results for Q4 2024, with revenue totaling $232.1 million and a full-year revenue of $930.6 million, marking a 3.2% decline from the previous year. Despite this decrease, the company has been actively pursuing a comprehensive transformation program aimed at reducing operating costs by 10-15% and focusing on high-growth segments like HST and Data/Decision Science. Claritev's adjusted EBITDA for FY 2024 was $576.7 million, a 6.7% decrease from the prior year, with an adjusted EBITDA margin of 62%.

Citi analysts recently increased the company's stock price target to $21 from $12.50, maintaining a Neutral rating, following Claritev's Q4 results and fiscal year 2025 guidance. The company has made notable progress in its transformation plan, highlighted by a $34 million Total (EPA:TTEF) Contract Value client signing and a significant client contract renewal. However, Citi analysts remain cautious, noting that growth challenges persist, with approximately $60 million in attrition expected in 2025.

Claritev's guidance for 2025 suggests potential revenue decline of up to 2% or flat growth compared to 2024, with expectations for sequential revenue and EBITDA growth throughout the year. The company continues to focus on innovation and operational efficiency, aiming to improve its market position amid competitive pressures. Despite these challenges, Claritev's recent rebranding and strategic initiatives reflect its commitment to long-term sustainable growth.

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