Encompass Health execs get pay boost, CEO’s aircraft allowance up

Encompass Health Corporation (NYSE:EHC), currently trading near its 52-week high of $104.55 and maintaining a "GREAT" financial health score according to InvestingPro, has reported changes in executive compensation, including an increase in the annual allowance for personal use of the company’s aircraft for its President and Chief Executive Officer, Mark Tarr. The adjustments were disclosed in a recent 8-K filing with the Securities and Exchange Commission.

The Board of Directors and its Compensation and Human Capital Committee, after a regular review on February 19-20, 2025, approved the compensation increases for the upcoming year. The changes come as the company demonstrates strong performance, with revenue growth of nearly 12% over the last twelve months and maintaining dividend payments for 13 consecutive years. Mark Tarr’s base salary will rise from $1,050,000 in 2024 to $1,100,000 in 2025. His target cash bonus opportunity is set to increase from $1,260,000 to $1,485,000, and his target long-term equity award opportunity will grow from $5,425,000 to $6,000,000.

Furthermore, Tarr’s allowance for personal usage of the corporation’s aircraft will increase from approximately $75,000 to $100,000 annually.

Other named executive officers also received compensation increases. Executive Vice President and Chief Financial Officer Douglas E. Coltharp’s base salary will go from $700,000 to $750,000, with his target cash bonus and equity award opportunities also seeing a rise. Executive Vice President, General Counsel and Secretary Patrick Darby will maintain his base salary of $625,000, but his bonus and equity awards will increase. Chief Medical (TASE:BLWV) Officer Elissa J. Charbonneau, D.O., will see her base salary increase from $415,000 to $435,000, along with hikes in her bonus and equity awards.

The compensation adjustments reflect the company’s ongoing efforts to align executive pay with performance and market standards. The information is based on a press release statement filed with the SEC. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value calculations, with analysts maintaining a strong buy consensus. For deeper insights into EHC’s valuation and performance metrics, including exclusive ProTips and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro.

In other recent news, Encompass Health Corporation announced a quarterly cash dividend of $0.17 per share, payable on April 15, 2025, to shareholders on record as of April 1, 2025. This move is consistent with the company’s strategy to return value to its shareholders. Encompass Health’s recent fourth-quarter earnings have impressed analysts, with KeyBanc Capital Markets noting that the company’s EBITDA exceeded Wall Street expectations by 7% and grew 14% year-over-year. As a result, KeyBanc analyst Matthew Gillmor raised the price target for Encompass Health to $120, maintaining an Overweight rating and highlighting the company’s strong growth strategy through new developments and joint ventures.

KeyBanc also expressed an optimistic outlook for the healthcare sector in 2025, noting that Encompass Health is well-positioned to benefit from increased demand for inpatient rehabilitation services. The firm’s analysis suggests that Encompass Health has a structural margin advantage over smaller nonprofit units in the industry. While KeyBanc is optimistic about the healthcare sector, it cautions that policy uncertainties could still affect investor sentiment. Despite these challenges, Encompass Health remains a favored stock for its potential growth and resilience against policy changes.

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