HealthEquity, Inc.
15 W. Scenic Pointe Dr., Ste. 100
Draper, UT 84020
Notice of Annual Meeting
of Stockholders
To Be Held at 10:00 a.m. Mountain Time on Thursday, June 27, 2024
Dear Stockholder:
You are cordially invited to attend the 2024 annual meeting of stockholders (the "Annual Meeting") of HealthEquity, Inc., a Delaware corporation ("we," "us," "HealthEquity" or the "Company"). The Annual Meeting will be held on Thursday, June 27, 2024, at 10:00 a.m. Mountain Time, for the following purposes, as more fully described in the accompanying proxy statement:
1. | To elect 10 directors to serve until the 2025 annual meeting of stockholders and until their successors are duly elected |
and qualified | |
2. | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our |
fiscal year ending January 31, 2025 | |
3. | To approve, on a non-binding, advisory basis, the fiscal 2024 compensation paid to the Company's named executive |
officers, as described in the accompanying proxy statement | |
4. | To approve the HealthEquity, Inc. 2024 Equity Incentive Plan |
5. | To transact such other business as may properly come before the Annual Meeting or any adjournments or |
postponements thereof | |
Our board of directors has fixed the close of business on May 3, 2024, as the record date for the Annual Meeting. Only stockholders of record on May 3, 2024, are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.
On or about May 17, 2024, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access our proxy statement and our annual report. The Notice provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the Internet address listed on the Notice.
We will be holding the Annual Meeting solely in a virtual meeting format. To attend the Annual Meeting, please visit: www.virtualshareholdermeeting.com/HQY2024. As always, we encourage you to vote your shares prior to the Annual Meeting.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible so that your shares can be voted at the Annual Meeting in accordance with your instructions.
Thank you for your continued support of HealthEquity.
By order of the Board of Directors,
Robert Selander
Chairman of the Board of Directors
Draper, Utah
May 17, 2024
HealthEquity, Inc.
Proxy Statement for 2024 Annual Meeting of Stockholders
To Be Held at 10:00 a.m. Mountain Time on Thursday, June 27, 2024
This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at our 2024 annual meeting of stockholders (the "Annual Meeting"), and any postponements, adjournments or continuations thereof. The Annual Meeting will be held on Thursday, June 27, 2024, at 10:00 a.m. Mountain Time. We will be holding the Annual Meeting solely in a virtual meeting format. To attend the Annual Meeting, please visit: www.virtualshareholdermeeting.com/HQY2024.
The Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access this proxy statement and our annual report is first being mailed on or about May 17, 2024, to all stockholders entitled to receive notice of and to vote at the Annual Meeting.
The board of directors does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented at the Annual Meeting, the persons named on the enclosed proxy card will have discretion to vote the shares of common stock they represent in accordance with their own judgment on such matters.
It is important that your shares of common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, urged to vote over the Internet or by telephone as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.
THE BOARD OF DIRECTORS
Draper, Utah
May 17, 2024
Table of Contents
Retiring Director | 13 |
Board Effectiveness and Long-Term Planning | 13 |
Director Independence | 14 |
Board Leadership Structure | 14 |
Board Meetings and Committees | 15 |
Board Diversity Matrix | 18 |
Stockholder Recommendations for Nominations to | 18 |
the Board of Directors | |
Director Compensation | 19 |
Vote Required | 21 |
Additional Corporate Governance Matters | 21 |
Proposal No. 2 Ratification of | |
Appointment of Independent Registered | |
Public Accounting Firm | 25 |
Recommendation | 25 |
Fees Paid to the Independent Registered Public | 26 |
Accounting Firm | |
Auditor Independence | 26 |
Audit and Risk Committee Policy on Pre-Approval | |
of Audit and Permitted Non-Audit and Tax | |
Services of Independent Registered Public | 26 |
Accounting Firm | |
Vote Required | 26 |
Audit and Risk Committee Report | 27 |
Proposal No. 3 Advisory Vote on | |
Compensation Paid to Our Named | |
Executive Officers | 28 |
Recommendation | 28 |
Vote Required | 28 |
Executive Officers | 29 |
Talent, Compensation and Culture | |
Committee Report | 32 |
Compensation Discussion and Analysis | 33 |
Executive Summary | 33 |
FY24 Executive Officer Changes | 36 |
Executive Compensation Philosophy and Program | 36 |
Design | |
Governance of Executive Compensation Program | 37 |
Individual Compensation Elements | 39 |
Other Compensation Policies and Practices | 47 |
Tax and Accounting Considerations | 49 |
Executive Compensation | 50 |
Compensation of Named Executive Officers | 50 |
Summary Compensation Table | 50 |
Fiscal 2024 Grant of Plan-Based Awards Table | 52 |
Narrative to Fiscal 2024 Summary | |
Compensation Table and Fiscal 2024 Grant of | 53 |
Plan-Based Awards Table | |
Fiscal 2024 Outstanding Equity Awards at | 54 |
Fiscal Year-End Table | |
Fiscal 2024 Option Exercises and Stock Vested | 56 |
Table | |
Pension Benefits | 56 |
Non-Qualified Deferred Compensation | 56 |
Potential Payments Upon Termination or | 56 |
Change In Control | |
CEO Pay Ratio | 59 |
Pay versus Performance | 59 |
Equity Compensation Plan Information | 64 |
Proposal No. 4 Approval of the | |
HealthEquity, Inc. 2024 Equity Incentive | |
Plan | 65 |
Recommendation | 65 |
Key Features of the 2024 Plan | 65 |
Key Data | 66 |
Summary of the 2024 Plan | 67 |
Federal Income Tax Consequences | 71 |
New Plan Benefits | 72 |
Vote Required | 72 |
Security Ownership of Certain Beneficial | |
Owners and Management | 73 |
Other Matters | 76 |
Section 16(a) Beneficial Ownership Reporting | 76 |
Compliance | |
Available Information | 76 |
Questions and Answers About the Annual Meeting | 76 |
Company Website | 84 |
Exhibit A-Non-GAAP Financial | |
Information | A-1 |
Exhibit B-HealthEquity, Inc. 2024 Equity | |
Incentive Plan | B-1 |
Proxy Statement Summary
Annual Meeting Information
- Date and Time: Thursday, June 27, 2024 at 10:00 a.m. Mountain Time
- Location: Virtual. To attend the Annual Meeting, please visit www.virtualshareholdermeeting.com/HQY2024.
- Record Date: May 3, 2024
Proposals
This proxy statement summary highlights information regarding HealthEquity and certain information included elsewhere in this proxy statement. You should read the entire proxy statement before voting. You should also review our annual report to stockholders for detailed information regarding our financial and operating performance in the fiscal year ended January 31, 2024, including the audited financial statements and related notes included in the report.
Proposal | Page | Board | Vote Required to Adopt Proposal | |
Number | Recommendation | |||
2. | Ratification of appointment of | 25 | FOR | The vote of the holders of a majority of the |
independent registered public | shares of the Company's common stock | |||
accounting firm | present in person or by proxy at the Annual | |||
Meeting and entitled to vote thereon | ||||
3. | Non-binding advisory vote on | 28 | FOR | The vote of the holders of a majority of the |
fiscal 2024 compensation | shares of the Company's common stock | |||
paid to our named executive | present in person or by proxy at the Annual | |||
officers | Meeting and entitled to vote thereon | |||
4. | Approval of the HealthEquity, | 65 | FOR | The vote of the holders of a majority of the |
Inc. 2024 Equity Incentive | shares of the Company's common stock | |||
Plan | present in person or by proxy at the Annual | |||
Meeting and entitled to vote thereon |
Fiscal Year 2024 Business Highlights
During the fiscal year ended January 31, 2024, we continued to execute on our core financial and business objectives. Our key financial and operational results were as follows:
- Overall revenue of $999.6 million, representing an increase of 16% from the fiscal year ended January 31, 2023
- Net income of $55.7 million, compared to net loss of $26.1 million in the fiscal year ended January 31, 2023
- Net income per diluted share of $0.64, compared to net loss per diluted share of $0.31 for the fiscal year ended January 31, 2023
- Adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA")(1) of $369.2 million, representing an increase of 36% from the fiscal year ended January 31, 2023
- 8.7 million health savings accounts ("HSAs") at the end of the fiscal year ended January 31, 2024, representing an increase of 9% compared to the fiscal year ended January 31, 2023
- New HSAs from sales of 949,000
- 15.7 million Total Accounts, including both HSAs and complementary CDBs, an increase of 5% compared to the fiscal year ended January 31, 2023
- Adjusted EBITDA is not a generally accepted accounting principles ("GAAP") financial measure. The definition of this non-GAAP financial measure, and a reconciliation to the most comparable GAAP measure, is included as Exhibit A to this proxy statement.
HealthEquity, Inc. 2024 Proxy Statement
1
Proxy Statement Summary
- HSA Assets of $25.2 billion as of January 31, 2024, representing an increase of 14% from the fiscal year ended January 31, 2023
- The Company agreed to acquire the BenefitWallet HSA portfolio
Director Nominee Highlights
The following table sets forth the names, ages as of May 17, 2024, and certain other information for each of the director nominees, each of whom are current directors with terms expiring at the Annual Meeting:
Director | Audit Committee | Committee | Other Public | ||||
Name | Age | Independent | Company | ||||
Since | Financial Expert | Membership | Boards | ||||
Robert Selander, | 73 | 2015 | • | NGCSC | 0 | ||
Chairman | • | TCCC | |||||
Jon Kessler | 56 | 2009 | 0 | ||||
Stephen Neeleman, M.D. | 56 | 2002 | 0 | ||||
Paul Black | 66 | 2022 | • | ARC | 0 | ||
• | TCCC | ||||||
Adrian Dillon | 70 | 2016 | • | ARC* | 0 | ||
• | CTC | ||||||
Evelyn Dilsaver | 69 | 2014 | • | ARC | 2 | ||
• | NGCSC* | ||||||
Debra McCowan | 52 | 2018 | • | NGCSC | 0 | ||
• | TCCC* | ||||||
Rajesh Natarajan | 54 | 2022 | • | ARC | 1 | ||
• | CTC | ||||||
Stuart Parker | 62 | 2020 | • | CTC | 1 | ||
• | TCCC | ||||||
Gayle Wellborn | 64 | 2017 | • | CTC* | 0 | ||
• | NGCSC | ||||||
- Chair
2
HealthEquity, Inc. 2024 Proxy Statement
Proxy Statement Summary
Board Demographics, Skills and Competencies
Our director nominees have a wide range of competencies, professional experiences, and backgrounds, and contribute diverse viewpoints and perspectives to our board of directors.
Director Nominee Demographics
The following charts show the demographic diversity of our director nominees as of May 17, 2024:
Tenure
>10 Years 10%
<5 Years 30%
5-10 Years
60%
Gender
Women 30%
Men 70%
Age
70+ Years
20%
50-59 Years
40%
60-69 Years
40%
Ethnic/Racial
Diverse 30%
Not Diverse 70%
HealthEquity, Inc. 2024 Proxy Statement
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Proxy Statement Summary
Director Nominee Skills and Competencies
Below are the skills and competencies that our nominating, governance and corporate sustainability committee and our board of directors consider important for our directors to possess considering our current business and future market opportunities, and the director nominees who have self-identified as possessing them:
Skills and Competencies Matrix
Robert | Jon | Stephen | Paul | Adrian | Evelyn | Debra | Rajesh | Stuart | Gayle |
Neeleman, | |||||||||
Selander | Kessler | M.D. | Black | Dillon | Dilsaver | McCowan | Natarajan | Parker | Wellborn |
Current or Former CEO
Current or Former Public
Company CFO
Healthcare Payer or Provider
Experience
Healthcare Technology
Experience
Financial Services Experience
Digital Experience
Risk Experience
Regulatory or Policy Experience
Technology Experience
Human Resources Experience
Capital Markets Experience
M&A Experience -Valuation,
Deals & Integration
Business Process Redesign
4
HealthEquity, Inc. 2024 Proxy Statement
Proxy Statement Summary
Corporate Governance Highlights
Key elements of our corporate governance framework include the following:
- Independent chairman
- Committees are composed of only independent directors
- Our board of directors and each committee conducts annual self-assessments
- Each director regularly completes a peer assessment of the other members of the board
- Our board of directors is engaged in an ongoing refreshment process with a plan to increase director diversity
- Our board of directors and each committee holds quarterly executive sessions without management present
- Our board of directors provides oversight of key risks that impact the Company's ability to achieve its strategy
- No director over-boarding
- Our board of directors and its committees provide strategic oversight of material environmental, social and governance matters
- Our board of directors has a separate committee dedicated to providing oversight of cybersecurity matters
- Our board of directors conducts an annual review of committee charters and key governance policies
Executive Compensation Highlights
Our executive compensation program is guided by our overarching philosophy of only paying for demonstrable performance. We believe that our executive compensation program is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executive officers. We emphasize performance-based compensation that appropriately rewards our executive officers for delivering financial, operational, and strategic results that meet or exceed pre-established goals. We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices.
What We Do:
- Independent Compensation Committee. Our talent, compensation and culture committee ("TCCC") is comprised solely of independent directors.
- Independent Compensation Committee Advisor. The TCCC engaged its own independent compensation consultant to assist with its compensation review for the fiscal year ended January 31, 2024.
- Annual Executive Compensation Review. The TCCC reviews and approves our compensation strategy, including a review and determination of our compensation peer group to be used for comparative purposes and a review of our compensation- related risk profile, to ensure that our compensation programs do not encourage excessive or inappropriate risk taking and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on us.
- Multi-YearVesting and Earn-OutRequirements. The equity awards granted to our executive officers vest or are earned over multi-year periods, consistent with current market practice and our retention objectives.
- Risk Mitigation. Our executive compensation program is designed, in part, to manage business and operational risk and to discourage short-term risk taking at the expense of long-term results.
- Pay for Performance. A majority of target annual compensation for our named executive officers is "at-risk" compensation, including the performance-based annual cash incentive and long-term equity awards, subject to both performance-based and time-based vesting requirements.
- Limited Executive Perquisites. We limit the number and amount of executive perquisites and other personal benefits provided to our executive officers.
- Double-TriggerVesting of Equity Awards. All outstanding equity awards held by our executive officers provide that such awards will vest only upon a qualifying termination within a 12-month period following a change in control of the Company in which the awards are assumed or substituted by the acquirer.
- Stock Ownership Guidelines. We maintain robust stock ownership guidelines to further align the interests of our executive officers with the interests of our stockholders.
- Clawback Policy. Our board of directors has adopted a clawback policy for the purpose of recouping certain executive compensation.
- Engage with Our Stockholders. We engage with our stockholders to discuss and understand their perceptions or concerns regarding our executive compensation program and other matters.
HealthEquity, Inc. 2024 Proxy Statement
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Proxy Statement Summary
What We Do Not Do:
- No Special Retirement Plans. We do not currently offer, nor do we have plans to provide, pension arrangements, retirement plans or nonqualified deferred compensation plans or arrangements to our executive officers that are not generally available to our other full-time, salaried team members.
- No Special Health or Welfare Benefits. Our executive officers participate in broad-based,company-sponsored health and welfare benefits programs on the same basis as our other full-time, salaried team members.
- No Tax Reimbursements. We do not provide any tax reimbursement payments (including "gross-ups") on any perquisites or other personal benefits to our executive officers.
- No Post-EmploymentTax Reimbursements. We do not provide any tax reimbursement payments (including "gross-ups") on any severance or change-in-control payments or benefits.
- Hedging and Pledging Prohibited. We prohibit our executive officers, directors and certain other team members from hedging or pledging our equity securities.
- No Dividends or Dividend Equivalents on Unvested Performance Awards. We do not pay dividends or dividend equivalents on performance-basedawards unless and until the performance shares are earned and vest.
Questions and Answers about the 2024 Annual Meeting
Please see "Questions and Answers about the Annual Meeting" beginning on page 76 for important information about the Annual Meeting, proxy materials, voting, deadlines for stockholder proposals and other important information.
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HealthEquity, Inc. 2024 Proxy Statement
Proposal No. 1
Election of Directors
Our board of directors is currently composed of 11 members. At the Annual Meeting, 10 directors are to be elected, each to hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified.
Recommendation
The board of directors unanimously recommends a vote "FOR" the election of each of the 10 directors nominated by our board of directors and named in this proxy statement as directors to serve until the next annual meeting of stockholders and until his or her successor is elected and qualified.
Director Nominees
Our nominating, governance and corporate sustainability committee has recommended, and our board of directors has approved, Robert Selander, Jon Kessler, Stephen Neeleman, M.D., Paul Black, Adrian Dillon, Evelyn Dilsaver, Debra McCowan, Rajesh Natarajan, Stuart Parker and Gayle Wellborn as nominees for election as directors at the Annual Meeting. If elected, each such nominee will serve as a director until the 2025 annual meeting of stockholders and until his or her successor is duly elected and qualified. One current director, Frank Corvino, is not standing for election, and accordingly, his term will expire immediately after the Annual Meeting.
If you are a stockholder of record and you sign your proxy card or vote over the Internet or by telephone but do not give instructions with respect to the voting of directors, your shares will be voted FOR the re-election of each of the nominees. We expect that each nominee will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by our board of directors to fill such vacancy. If you are a beneficial owner of shares of our common stock and you do not give voting instructions to your broker, bank or other nominee, then your broker, bank or other nominee will leave your shares unvoted on this matter.
HealthEquity, Inc. 2024 Proxy Statement
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HealthEquity Inc. published this content on 21 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2024 13:40:18 UTC.