Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective immediately, on June 16, 2023, the Board of Directors (the “Board”) of Cano Health, Inc. (the “Company”) elected the Company’s current Chief Strategy Officer, Mr. deMarquette (“Mark”) Kent, as the Company’s Interim Chief Executive Officer (the “Interim CEO”).
Mr. Kent will replace Dr. Marlow Hernandez, who tendered his resignation as the Company’s Chief Executive Officer, as well as all positions he holds at the Company’s subsidiaries, effective immediately on June 16, 2023. Dr. Hernandez will remain as a director on the Company’s Board. The Board intends to conduct a search process to identify a permanent Chief Executive Officer.
Kent Letter Agreement
In connection with his appointment as Interim CEO, Mr. Kent and the Company entered into that certain letter agreement, dated as of June 16, 2023 (the “Kent Letter Agreement”). Pursuant to the terms of the Kent Letter Agreement, Mr. Kent will serve as the Company’s Interim CEO on an “at will” basis until the date on which a permanent Chief Executive Officer commences employment (such period, the “Transition Period”), subject to earlier termination. Mr. Kent will be paid a base salary at an annualized rate of $475,000 and he will be eligible to receive $325,000 in target cash incentive compensation in respect of the Company’s 2023 fiscal year, subject to the terms of the Company’s 2023 Executive Incentive Compensation Program. Mr. Kent will also be eligible to receive an annual equity award in respect of the Company’s 2023 fiscal year with a target value of $1,500,000 vesting in shares of the Company’s Class A common stock. In addition, Mr. Kent will be eligible to receive a $1,500,000 award of restricted stock units vesting in shares of the Company’s Class A common stock in full on June 16, 2024, the first anniversary of his election as Interim CEO, subject to his continued employment with the Company or one of its subsidiaries through such time. Following the expiration of the Transition Period, and assuming Mr. Kent remains employed by the Company and/or its subsidiaries in some capacity, Mr. Kent’s base salary and target cash incentive compensation will remain at the levels established under the Kent Letter Agreement and his target long-term incentive opportunity will return to the level in effect prior to his appointment as Interim CEO. As Interim CEO, Mr. Kent will be indemnified to the fullest extent provided by the Company’s organizational documents (which includes advancement of expenses) and covered by the Company’s directors and officers liability policy as an insured in respect of his activities as a Company officer. Mr. Kent is party to an employment agreement with Cano Health, LLC, dated as of December 13, 2022 (the “Kent Existing Employment Agreement”), the terms of which remain unchanged, except as modified by the Kent Letter Agreement. Pursuant to the Kent Existing Employment Agreement, Mr. Kent is eligible to receive a retention bonus in the amount of $3,600,000, which will be payable subject to his continued employment with the Company or any of its subsidiaries through December 13, 2024 (or in the event of an earlier termination without “cause” or resignation with “good reason” (as each such term is defined in the Kent Existing Employment Agreement), subject to his compliance with applicable restrictive covenants through such date).
The descriptions of Mr. Kent’s employment and compensation terms are not complete and are qualified by reference to the Kent Letter Agreement and the Kent Existing Employment Agreement, which are filed as Exhibits 10.1 and 10.2 attached hereto and incorporated herein by reference in their entirety. There are no family relationships between Mr. Kent and any of the Company’s directors or executive officers and there are no related-party transactions as referred to in Item 404(a) of Regulation S-K with Mr. Kent.
Mr. Kent, age 55, has served as the Company’s Chief Strategy Officer since April 5, 2023. Prior to joining the Company in January 2023 as Senior Vice President, Medicare Advantage, Mr. Kent founded three startup healthcare companies which help provider practices operate successfully within value-based arrangements: Care Management Resources, Total Health Medical Centers and Your Partners in Health. He has also held numerous senior executive roles, including having served as CEO of Total Health Medical Centers from 2017 to 2023, as CEO of Women’s Health Care Hospital in Evansville, Indiana from 2014 to 2018 and as CEO & Regional President of all Humana-owned, Florida-based primary care practices, which today are known as Conviva