Encompass Health Corporation (EHC) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Encompass Health Corporation. Our host for today's call is Lee Higdon, Chairman of the Board. [Operator Instructions] I will now turn the call over to your host, Mr. Higdon. You may begin, sir.

Good morning, ladies and gentlemen. And let me add my welcome to the 2020 Annual Meeting of Stockholders of Encompass Health. I'm Lee Higdon, Chairman of the Board, and I now call this meeting to order. Before we proceed to the formal business of the meeting, I'd like to thank all our stockholders and my fellow members of the Board of Directors for participating in this virtual meeting in order to accommodate social distancing demands during this COVID-19 crisis. We intended to hold an in-person meeting at our Corporate Office in Birmingham, as is our usual practice, but obviously, our concern for everyone's safety and well-being and the state and local shelter-in-place orders necessitated this virtual meeting format. As we organize this meeting with most speakers on short notice, I ask everyone to please bear with us. This is a first for us. We all hope this crisis passes soon. And I'd like to express my own best wishes and thoughts that everyone remains well during this very trying time. In order to provide time for our shareholders in attendance to submit votes on the virtual meeting website, should they desire to do so, I hereby declare the polls open as of 10:32 Central Time. If you previously voted by proxy, you do not need to vote again, unless you wish to change your vote. However, if any shareholder present has not yet cast a vote or wishes to change a prior vote, you may do so by clicking on the Vote Here link button. [Voting]

Okay. We will now proceed with the business of this meeting. The agenda and the rules of conduct for the meeting are posted on the virtual meeting website. I will preside at today's meeting with Patrick Darby, who will act as our Secretary. Mr. Secretary, will you please report on the procedural formalities?

Thank you, Mr. Chairman. I have an affidavit from the firm responsible for mailing our proxy material confirming that the notice of annual meeting and proxy materials were duly mailed to stockholders of record as of March 9, 2020. A list of those stockholders is posted on the virtual meeting website and available for inspection. The list has been available for a period in excess of 10 days. The company has appointed Debra Baker as the inspector of election for this meeting. Ms. Baker has taken and signed an oath to execute faithfully the duties of inspector of election. I also report that the preliminary vote count indicates a quorum is present at this meeting. The 3 items to be voted on at this meeting are listed in the agenda. These items were more fully described in the proxy statement previously made available to stockholders. The company did not receive any stockholder nominations or proposals for this meeting.

Okay. Thank you, Mr. Secretary. The first item of business to be voted on today is the election of 14 directors to serve until our 2021 Annual Meeting of Stockholders. The Board of Directors nominees are the only person standing for election. So I declare that the nominations are now closed.

And I second the nominations.

Okay. Our second proposal is the ratification of the appointment of our independent public accountants. The ratification of the appointment of the -- by the Audit Committee of PricewaterhouseCoopers LLP as our independent registered public accounting firm is the second item of business to be voted on. I move for approval of this proposal.

I second it.

And our third proposal is an advisory vote on executive compensation. This item is to be voted on today as the approval of compensation for our named executive officers. I move for approval of this proposal.

I second it.

Okay. We will now proceed to the period set aside for questions regarding the proposals only. I now ask Crissy Carlisle, our Chief Investor Relations Officer, to let us know if any questions have been submitted on the virtual meeting website.

Mr. Chairman, there are no questions regarding the proposals.

Okay. Thank you, Crissy. We will now proceed 1 additional minute for any shareholder who wishes to vote during the meeting to finish doing so on the virtual meeting website. We want to give you some time. So we will pause here. [Voting]

Okay. I declare the polls closed as of 10:36 Central Time. I ask that the inspector the elections prepare a report on the final voting results and submit it to the secretary when complete. I'm now going to ask the secretary present the preliminary voting results.

Mr. Chairman, based on the preliminary results received from the inspector of election, the stockholders overwhelmingly have elected each of the 14 nominees to serve on the Board of Directors until the 2021 Annual Meeting of Stockholders, ratified the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm, and approved the compensation of our named executive officers.

Very good. I will now open the floor for general questions. I again ask Ms. Carlisle to let us know if any general questions have been submitted on the virtual meeting website.

Mr. Chairman, there are no questions.

Thank you, Crissy. There being no questions, the formal portion of this meeting is now complete. So I move to adjourn the meeting.

I second the motion.

With that, I declare this 2020 Annual Meeting of Stockholders adjourned. Okay. So our meeting is concluded. Let me move on to the next topic. It now gives me great honor and pleasure on behalf of the entire Board of Directors and management to recognize and thank all of the company's employees who have worked so diligently and consistently to make Encompass Health one of the preeminent providers of post-acute health care services in our country. My appreciation and pride has grown significantly upon seeing how they have responded in this current pandemic crisis. Now more than ever, the Board appreciates their personal sacrifices as well as their dedication and hard work, helping our patients recover from injury and illness. The Outstanding Employee Achievement Award allows us to recognize the extraordinary efforts and contributions of our employees who are the foundation of this company's success. Each year, one outstanding employee is chosen from every hospital based on 4 criteria: contributions to extraordinary patient experience; team spirit and cooperation; commitment to continuous quality improvement; and last, going above and beyond the call of duty. From these hospital winners, each regional leadership team selects a regional outstanding employee. We, on the Board of Directors, surely miss holding our Annual Dinner Gala to celebrate these winners this year. It is really a shame that we will not be able to recognize them in person. Getting to meet these extraordinary individuals is truly one of the highlights of our year. We hope that this pandemic crisis is resolved soon and that we can again celebrate our exemplary employees in person next year. Now at this time, I'm going to ask our President and CEO, Mark Tarr, to introduce this year's winners. Mark?

Thank you, Lee. As you know, it's disappointing that we can't have them here this year, but we thought it appropriate, and given our past tradition, to announce the -- each regional winner. We did change the format this year. We don't have a single company winner, but we want to recognize each regional winner. And let me start out first with the Central region. [ Rachel Skelly ] is the winner from the Central region. She is an RN. We know [ Rachel ] has been busy because she is an Infection Preventionist at our hospital in Topeka, Kansas. Just a little bit of her background or a little snippet that was sent in on [ Rachel ]. She's available 24/7. Leadership during the COVID-19 pandemic has been the #1 factor for safety of staff and patients and her calming effect on our patient care team. We are lucky to have [ Rachel ] on our team. [ Rachel ] is truly deserving of her employee of the year award. Next up in the Mid-Atlantic region, we have [ Pam Smith ], LPN. She works in our Huntington, West Virginia facility. At the hospital in Huntington, where [ Pam Smith ] works as an LPN, their CEO says, "He hopes every Encompass Health hospital has someone on their staff like [ Pam ]. It's quite common to hear [ Pam's ] name more than any other staff member's name during the daily senior team rounds on patients. [ Pam's ] coworkers say that they can go on and on sharing stories of how [ Pam ] goes above and beyond exemplifying CPR." Next step from the Northeast region is [ Quami Kapoor ], Rehab Nursing Tech from our Worcester, Massachusetts hospital, Fairlawn. [ Quami Kapoor ] has been a Nursing Tech with Fairlawn for 2.5 years. He is guided by empathy for his patients. One afternoon, one of [ Quami's ] coworkers witnessed him quietly singing to a patient while providing care in the patient's room. Although he had many other patients to assist, [ Quami ] was taking the time to do that because the patient was blind. [ Quami ] felt that singing was a calming positive way to ensure that the patient knew he was still in the room. Next up, from our South Central region is [ Bria Pierre ], Case Manager. She works in our Phoenix City, Alabama hospital. [ Bria ] started with Encompass Health in 2008 as a -- at a hospital in Florida as a Nursing Tech and has steadily continued her education and professional growth. She is now a CRRN and Case Manager there in Phoenix City and epitomizes all of our core values, but especially stronger together, do the right thing and lead with empathy. [ Bria ] has a heart of hearts for patients and our CPR skills are reflected in her patient satisfaction scores. They consistently exceed 90%. She is concerned for others and is known for her giving heart. During the COVID crisis, she delivered Easter dinner to a nurse of our team who has been impacted by the illness. Next up from the Southeast region is [ Carrie House ], who's an RN Wound Care Coordinator. She works at our hospital in Savannah, Georgia. [ Carrie ] is our Wound Care Coordinator there in Savannah. She consistently provides professional, compassionate and personal care to both our patients and their families. Her commitment to our patients is evident and that she continues to keep in contact and follows their progress even after they leave our hospital. In addition to the significant impact she's had at our hospital, she has, for several years, been an active participant in a community program called a night to shine, which is a program that provides a prom night for special needs teens and young adults. Out in the Southwest region, we have [ Nate Moyer ], PT Assistant. [ Nate ] works at our Fort Worth, Texas hospital. There he leads with empathy each day. One example, a stroke survivor's son recently called the hospital CEO after his mother's discharge, and his comments succinctly sum up [ Nate's ] contributions to our care team. The son stated that [ Nate ] somehow managed to reach his mother in ways that neither he nor any of his siblings had achieved since she suffered her stroke. He called out [ Nate's ] loving patience and persistence as the difference-maker in his mother's stroke recovery. And then finally, representing the West region, we have [ Connie South ], who's a Physical Therapist there at our hospital in Sandy, Utah. She's been described by her teammates as a proactive, highly motivated and fault agent of positive change regardless of the situation. Unafraid in her pursuit of an improved plan of care to ensure the patients return home. A light to all. Finally, as perfectly stated by a rehab observer, she is like the LeBron James of therapy. She makes everyone around her better. So we want to congratulate each of those regional winners. And once again, thank them for their commitment to their facilities and, most of all, to our patients. With that, Lee, I'll turn it back over to you.

Yes. Thank you very much. Let me just add my congratulations on behalf of my Board colleagues to all of the winners. It's just an outstanding job, as you can tell from Mark's testimonials on each of the individuals. So again, thanks each and every one of you for all of the good work that you do. Well, now we have included the entire agenda for this meeting. So I want to thank everybody for attending today virtually. And I would now call the meeting to a close. Thank you.

This now concludes the meeting. Thank you for joining. And have a pleasant day.