Centene : 2025 Proxy Statement & 2024 Annual Report
CNC
Our Mission
Transforming the health of the communities we serve, one person at a time.
Since its founding as a single local healthcare plan in 1984, Centene's heart and soul has been linked to supporting the health of the communities we proudly serve. We are committed to providing access to quality, culturally sensitive care for our members and communities.
Now, forty years later, this long-held commitment to supporting the health and health care of our members is encapsulated in our mission: Transforming the health of the communities we serve, one person at a time.
Our Values
Accountability - Courage - Curiosity - Trust - Service
These values support our efforts to realize our mission.
Our Culture
Letter from Our CEO and Our Chairman
Letter to Stockholders
From Our Chief Executive Officer and Our Chairman of the Board
March 27, 2025
Dear Stockholders:
In these early months of 2025, healthcare policy headlines are dominating the news and creating market uncertainty for investors. From where we stand, this volatility - while temporary - only reinforces the importance of Centene's focused and intense work over the last three years to improve our operational agility and strengthen our infrastructure, fostering resilience and readiness as an organization and as an essential member of the healthcare community.
Looking back, 2024 was a capstone year in our value creation journey, and rife with industry turbulence of its own. And yet, surrounded by landscape challenges, we delivered significant operational milestones and outperformed our top and bottom-line financial commitments in 2024 positioning our business well for the future.
A couple of key highlights:
• Thanks to an ongoing emphasis on and commitment to quality performance and operational excellence, we delivered substantial improvements in our Medicare STAR ratings, effectively positioning our Medicare business on a path to breakeven in 2027.
• We delivered another year of solid, profitable growth in our Individual business. Capitalizing on our leading market position, we pioneered program integrity changes that proactively reduced fraud, waste and abuse. In early 2024, our team introduced the "Agent of Record Lock" policy, setting the tone for the Centers for Medicare and Medicaid Services (CMS) to make this and other program integrity measures a market mandate heading into the Open Enrollment period.
• In our Medicaid business, we navigated a historic level of eligibility redetermination, partnering closely across 30 states to navigate membership and acuity shifts impacting millions of lives, while at the same time delivering an impressive string of RFP wins thereby securing the majority of our Medicaid business through the end of the decade.
• And, finally, we continued our work to build an industry-leading culture, operating as "One CenTeam" by focusing on service - to our partners, to our members, and to each other.
In 2024, we proved that our business has the fortitude to not only survive challenges, but thrive, continuing to evolve to better serve our customers and stakeholders.
We enter 2025 structurally stronger, more talented, more agile, and better positioned to execute against a pipeline of exciting growth opportunities.
Operationally, in 2025 we expect to collaborate with our state partners to more closely align Medicaid rates with the post-redeterminations book of business. Our Medicare Advantage business, following successful execution during the Annual Enrollment Period, will focus on key clinical and operational initiatives to advance our progress to break even in 2027. And, as the category leader, our Marketplace team will once again offer access to high quality and affordable healthcare - this year to approximately 5 million Americans - while expanding our movement into the emerging Individual Coverage Health Reimbursement Arrangement (ICHRA) market.
We are already in-motion on initiatives that leverage AI to drive quality and efficiency in our business and these will accelerate in 2025. For example, we are deploying AI within our provider contracting operations to reduce the manual labor associated with configuring and maintaining contracts, while enabling further automation and speed in processing payments to providers.
Letter from Our CEO and Our Chairman
AI is also helping us strengthen our analytics - an important lever for advancing initiatives such as Value Based Care across our businesses. Value-based payment models align the success of our providers with the well-being of our members. With more than 40% of our medical membership associated with value-based arrangements, we are better able to coordinate and support critical healthcare services - both big and small - for the lives we serve.
As an organization we subscribe to a philosophy that we can always do something more - more for our members, more for our state and federal partners and more for our shareholders. As we look ahead to 2025, new initiatives are scheduled to launch that aim to personalize and better facilitate care for our members. Our Illinois health plan is offering members with uncontrolled high blood pressure a 12-week comprehensive "Food Is Medicine" program. The program includes nutrition counseling along with an intentional combination of medically tailored meals, healthy food boxes and fresh produce vouchers. By creating sustainable changes in eating habits, our members can better support the treatment of their chronic disease - both inside and outside of the doctor's office.
In 2025, our recently announced partnership with the National Association of Community Health Centers (NACHC) will support value-based payment model adoption and improve maternal and child health outcomes. Community Health Centers uniquely serve our populations and share our strategy of delivering deeply local, integrated care. By working closely together, our goal is to drive differentiated health outcomes and transform the health of our shared communities at national scale.
Managed care organizations play a vital and often misunderstood role in the United States healthcare ecosystem. As stewards of taxpayer dollars, our charge is to lower healthcare costs while ensuring high-quality access to care. To do this, we focus on prevention, early intervention, and efficient care coordination. Investing in home health for our members can reduce the need for expensive (and often unnecessary) hospitalization. Connecting our members to resources that promote and protect health minimizes the need for more health care - things like access to healthy foods, transportation, and childcare. Over more than 40 years, Centene has worked to improve health care for low income and working Americans. But we believe there is more we can do to transform the communities we serve by focusing on a more holistic, comprehensive, and outcomes-oriented approach to health, instead of just health care. We intend to leverage our platform that today serves 28 million Americans to advocate on their behalf for system-wide changes that bring more seamless experiences and improved outcomes to those with the fewest resources and the most complex needs.
We look forward to delivering on our mission for our customers and our shareholders, as well as advancing the agenda nationally to make healthcare work better in 2025 and beyond.
Sincerely,
Sarah M. London
Chief Executive Officer
Frederick H. Eppinger
Chairman of the Board of Directors
Notice of 2025 Annual Meeting of Stockholders
Notice of 2025 Annual Meeting of Stockholders
Time and Date
10:00 AM, Central Time, on Tuesday, May 13, 2025
Place
Centene Plaza
Record Date
7700 Forsyth Boulevard St. Louis, Missouri 63105 Centene Auditorium
Stockholders as of March 14, 2025 are entitled to vote
Voting Items Proposal
Board Vote Recommendation For Further Details
(1) To elect eleven directors to hold office until the 2026 Annual Meeting of Stockholders or until their successors are duly elected and qualified;
FOR each Page 26
director nominee
(2) To cast a non-binding advisory vote on the compensation of the Company's Named Executive Officers;
FOR
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(3) To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025;
(4) To approve the Company's 2025 Stock Incentive Plan; and
FORFOR
Page 114
Page 120
(5) and (6) Stockholder proposals
AGAINST
Page 130
Stockholders will also transact such other business as may properly come before the Annual Meeting or at any convening or reconvening of the Annual Meeting following a postponement or adjournment of the Annual Meeting.
Stockholders or their legal proxy holders who wish to attend the Annual Meeting must preregister. Requests for preregistration must be received by us no later than 11:59 AM Eastern Time on May 9, 2025. For complete instructions for preregistering, see page 138 of this proxy statement.
On or about March 27, 2025, we mailed to our stockholders either 1) a copy of our proxy statement, a proxy card and 2024 Annual Report on Form 10-K or 2) a Notice of Internet Availability of Proxy Materials (Availability Notice), which indicates how to access the proxy materials on the internet. We believe furnishing proxy materials to our stockholders on the internet provides our stockholders with the information they need while lowering the costs of delivery and reducing the environmental impact of the distribution process.
By order of the Board of Directors,
Christopher A. Koster
Secretary and General Counsel
St. Louis, Missouri March 27, 2025
Important Notice Regarding the Availability of Proxy Materials for the 2025 Annual Meeting of Stockholders to be held on
May 13, 2025: The accompanying proxy statement and the 2024 Annual Report on Form 10-K are available atwww.ProxyVote.com.
Table of Contents
Table of Contents
Letter from Our CEO and Our Chairman3
Notice of2025Annual Meeting of Stockholders5
Who We Are7
Company Overview8
2024Financial and Business Highlights9
Execution of Strategy9
Our Competitive Strengths 11
Corporate Sustainability 11
Proxy Summary 16
Board Information 16
2024 Stockholder Engagement and Response 19
Governance Highlights 20
Executive Compensation Overview 21
Compensation Best Practices 24
Board and Governance Matters 26
Proposal 1 - Election of Directors 26
Board Overview 27
2025 Director Nominees 31
Independence of Directors 43
Director Nomination Process 44
Stockholder Recommendations of Director Candidates 44
Corporate Governance 45
Corporate Governance Guidelines 45
Proxy Access 46
Board and Committee Structure 47
Director Engagement 53
Board Oversight of Risk Management 55
Oversight of Corporate Sustainability 60
Stockholder Engagement 61
Other Governance Policies and Practices 64
Related Party Transactions 64
Compensation of Directors 65
Executive Officers 68
Proposal 2 - Advisory Resolution to Approve
Executive Compensation 69
Executive Compensation 70
Compensation Discussion and Analysis 70
Compensation and Talent Committee Report 98
Executive Compensation Tables 99
Pay Versus Performance 110
CEO to Median Employee Pay Ratio Information 113
Proposal 3 - Ratification of Appointment of
Independent Registered Public Accounting Firm 114
Proposal 4 - Approval of the 2025 Stock
Incentive Plan 120
Proposal 5 - Stockholder Proposal 130
Proposal 6 - Stockholder Proposal 133
Security Ownership of Certain Beneficial Owners
and Management 135
Five Percent Beneficial Owners of Common Stock 135
Delinquent Section 16(a) Reports 136
Equity Compensation Plan Information 137
Commonly Asked Questions and Answers About the
Annual Meeting 138
Other Matters 143
Committee Reports 143
Proxy Solicitation Costs 143
Stockholder Proposals and Director Nominations 143
Multiple Stockholders Having the Same Address 144
Requests for Additional Information 144
Forward-Looking Statements 145
Appendix A - Reconciliation of Non-GAAP Measures 146
Appendix B - 2025 Stock Incentive Plan 149
Who We Are
Today, Centene is the largest Medicaid managed care organization, the largest carrier on the Health Insurance Marketplace and the largest stand-alone Medicare Prescription Drug Plan (PDP) provider in the country, while also having an established Medicare presence. In addition, Centene has increased its market density to serve other low-income and medically complex populations and is uniquely positioned to serve individuals who are dually eligible for both Medicaid and Medicare.
#1 carrier in the nation
2025 Footprint
on the Health Insurance Marketplace
$35.5 billion
$145.5 billion
in cash and investments*
premium and service
revenues in 2024
60,500
28.6 million
employees*
members*
#46
#22
in 2024 Fortune Global 500
in 2024 Fortune 500
* As of December 31, 2024
More than 1 in 15 individuals across all 50 states
Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare PDP) as well as individuals and families served by the Health Insurance Marketplace.
Addressing member needs through innovation
Advanced Technology Systems and Tools
Incentives for Healthier Living
Personal Member Outreach and Support
Helping Mothers and their Babies
Company Overview
Centene is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach - with local brands and local teams - to provide fully integrated, high-quality and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare PDP) as well as individuals and families served by the Health Insurance Marketplace. Our mission is to transform the health of the communities we serve, one person at a time.
Centene provides access to high-quality healthcare, innovative programs and a wide range of health solutions that help families and individuals get well, stay well and be well. Centene treats the whole person, an approach that is delivered locally and backed by the scale of Centene's expertise, data and resources. Through this approach and our commitment to sustainable partnerships, we work with local community organizations to realize our mission.
Centene's Path Forward
030201
Focus on Medicaid, Marketplace and Medicare, capitalizing on the significant expansion opportunities in each market
Build from the strength of our market positions, evolve with the market and create significant disruptive growth by leveraging our inherent and differentiated strengths to explore logical extensions to our core lines of business
Transform our business by leveraging industry-leading, mission-driven talent, and continuing to invest in our data analytics and capabilities
2024 Financial and Business Highlights
Our 2024 financial and business results reflect execution in our diverse portfolio across the Company's three major product lines.
2024 Financial Results
$163 billion
$6.31
$7.17
(10)%
Total Revenues, a 6% increase vs. 2023
Diluted Earnings Per Share (EPS) Adjusted Diluted EPS, an increase of 7% vs. 2023
Total Shareholder Return (TSR) 3-Year CAGR
Medicaid
Marketplace
Medicare
We are the largest Medicaid Managed Care Organization
We are the #1 carrier on the Health Insurance Marketplace
Within Medicare Advantage we have the largest concentration of Dual Eligible Special Needs Plans (D-SNP) members compared to our peers
13.0 million members across 30 states
4.4 million members across 29 states
1.1 million Medicare Advantage members across 37 states and 6.9 million PDP members in 50 states
Refer to Appendix A for reconciliations of non-GAAP measures included throughout this proxy statement.
Execution of Strategy
Our growth over the past decade has positioned us to be a leader in the healthcare industry and enabled the Company to stay focused on its mission while also delivering strong financial performance for its stockholders. Centene has a unique and powerful platform, and we are working to fortify its foundation to fuel our next phase of innovation and growth. We are focused on strong, long-term growth grounded in our core product lines, investing in becoming easy to work with by building modern systems and processes, and curating an enhanced network of partnerships designed to drive value across our portfolio.
We are focused on making strategic decisions and investments to create additional value in the short-term and to seek opportunities that position the organization for long-term strength, profitability, growth and innovation. In addition to creating stockholder value, we are modernizing and improving how we work in order to propel our organization to new levels of success and elevate the member and provider experiences. With trends in the personalization of healthcare technology, we continue the use of data and analytics to improve the provider and member experience. We continue to believe we have both the capacity and capability to successfully navigate industry changes to the benefit of our members, customers, providers and shareholders.
10
3 Years of Accomplishments
Over the last three years, we have delivered numerous accomplishments, including:
$27.5 billion growth Investment grade
rating by 2 of the 3 major rating agencies
• Momentum on Stars and quality
'24 vs. '21
Premium and Service Revenue1
• Investing & building in long-term growth areas and opportunities (HIDE/FIDE4, ICHRA)
12% CAGR
11 Divestitures
• Successful PBM transition
Adj. Diluted EPS2 growth Despite Medicare Stars decline & unprecedented Medicaid redeterminations headwinds
• USMM
• PANTHERx
• Ribera Salud
• Magellan Rx
• Ongoing SG&A efficiencies, incorporating simplification of operations
• HealthSmart
• Centurion
101 million
• Magellan Specialty
• Team and talent successes
shares repurchased3
• Apixio
• Circle Health
• Operose Health
• Collaborative Health Systems
1 Premium and Service Revenue growth based on $145.5 billion as of December 31, 2024 compared to $118.0 billion as of December 31, 2021.
2 For purposes of calculating the 3-Year CAGR, using adjusted diluted EPS $7.17 and $5.15 for December 31, 2024 and 2021, respectively. Refer to Appendix A for reconciliations of non-GAAP measures included throughout this proxy statement.
3 Shares repurchased from January 2022 through December 2024.
4 Highly Integrated Dual Eligible (HIDE) and Fully Integrated Dual Eligible (FIDE) plans.
Disclaimer
Centene Corporation published this content on March 27, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 27, 2025 at 21:31:10.447.