UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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PREMIER, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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2022 Notice of Annual Meeting & Proxy Statement

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

 

DATE & TIME

ACCESS

RECORD DATE

Friday, December 2, 2022, 10:00 a.m. Eastern Standard Time

www.virtualshareholdermeeting.com/PINC2022 See “Frequently Asked Questions” for details on how to attend

Holders of common stock at the close of business on our record date of October 5, 2022, are entitled to notice of and to vote at the Annual Meeting.

Our Board of Directors has determined that the Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. At the virtual Annual Meeting, stockholders will be able to attend, vote and submit questions from any location via the Internet.

At the Annual Meeting, stockholders will consider and vote on the following:

 

•

Item 1: The election of four Class III Directors to the Board of Directors to serve until our 2025 annual meeting of stockholders;

 

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Item 2: The ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for our fiscal year 2023; and

 

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Item 3: Advisory vote to approve the compensation of our Named Executive Officers.

In addition, stockholders will consider and vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

Our Board of Directors recommends that you vote FOR the election of each of the nominees under Item 1 and FOR Items 2 and 3. Information about the matters to be considered at the Annual Meeting follows in the accompanying Proxy Statement.

Voting Your Shares:

Holders of Premier, Inc. common stock, par value $0.01 per share, at the close of business on our record date of October 5, 2022, are entitled to notice of and to vote at the Annual Meeting and any postponement or adjournment of the meeting.

 

Your vote is important. Holders of common stock should vote in one of these ways:

INTERNET Go to www.proxyvote.com and follow the instructions. You will need to enter the control number printed on your proxy card.

TELEPHONE Call toll-free 1-800-690-6903 and follow the instructions. You will need to enter the control number printed on your proxy card.

MAIL Complete, sign, date and promptly return your proxy card in the enclosed envelope.

In addition, holders of common stock may vote online at the virtual Annual Meeting.

For a period of at least 10 days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be open for examination by any stockholder for any purpose germane to the meeting during regular business hours at our corporate headquarters located at 13034 Ballantyne Corporate Place, Charlotte, North Carolina. To access the list of stockholders during the Annual Meeting, please visit www.virtualshareholdermeeting.com/PINC2022 and enter the control number provided on your proxy card.

 

Important Notice Regarding the Availability of Proxy Materials

For the Annual Meeting of Stockholders to be Held on December 2, 2022

Premier, Inc.’s proxy statement on Schedule 14A, form of proxy card and Annual Report on Form 10-K for the fiscal year ended June 30, 2022, are available at www.proxyvote.com after entering the control number printed on your proxy card.

By order of the Board of Directors,

 

Sheila B. Goulding

Corporate Secretary

October 19, 2022

 

		October 19, 2022   Dear Premier Stockholders:   I am pleased to invite you to attend the Premier, Inc. 2022 Annual Meeting of Stockholders (the “Annual Meeting”). The meeting will be held virtually via the Internet on Friday, December 2, 2022 at 10:00 a.m., Eastern Standard Time.   The Board of Directors has determined that holding a virtual annual meeting will best facilitate stockholder attendance and participation, which also allows you to vote your shares electronically and submit questions.   At the Annual Meeting, we will consider the items of business described in the Notice of 2022 Annual Meeting of Stockholders and in the proxy statement accompanying this letter. The proxy statement contains important information about the matters to be voted on and the process for voting, along with information about Premier and its management and directors.   Every stockholder’s vote is important to us. Even if you plan to attend the virtual meeting, please promptly vote by submitting your proxy by phone, by Internet or by mail. The “Frequently Asked Questions” section of the proxy statement and the enclosed proxy card contain detailed instructions for submitting your proxy. Our Annual Meeting can be accessed virtually via the Internet at www.virtualshareholdermeeting.com/PINC2022. To participate, you will need the 16-digit control number provided on your Notice of Internet Availability of Proxy Materials or proxy card.   On behalf of the directors, management and employees of Premier, thank you for your continued support of and ownership in our Company.   Sincerely,     Terry D. Shaw Chair of the Board of Directors

 

PROXY STATEMENT

The Board of Directors (the “Board” or the “Board of Directors”) of Premier, Inc. (“Premier” or the “Company”) is providing this Proxy Statement in connection with the Annual Meeting of Stockholders to be held on December 2, 2022, at 10:00 a.m., Eastern Time and at any adjournment or postponement thereof. Stockholders holding shares of common stock, par value $0.01 per share, of the Company as of the close of business on October 5, 2022 (the “Record Date”) are entitled to vote at the Annual Meeting. Proxy materials or a Notice of Internet Availability were first made available, sent, or given to the Company’s stockholders on or about October 19, 2022.

Table of Contents

 

 

 

PROXY SUMMARY

Voting Recommendations of the Board

 

Items for Your Vote				FOR		AGAINST		Page
1		The election of four Class III Directors to the Board of Directors to serve until our 2025 annual meeting of stockholders.		✔				10
2		The ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for our fiscal year 2023.		✔				41
3		The approval, on an advisory basis, of the compensation of our named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission.		✔				43

ABOUT PREMIER

Premier at a Glance

Premier is a leading healthcare improvement company uniting an alliance of more than 4,400 U.S. hospitals and health systems and nearly 250,000 other providers and organizations to transform healthcare from the inside out – making it smarter, faster and better. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, we enable better healthcare and outcomes at lower costs. We play a critical role in the rapidly evolving healthcare industry, helping to shape everything from healthcare policy for populations to quality of life for patients. We do this by collaborating with our members and leveraging the power of our data and technology and consulting platform to co-develop innovative, long-term solutions that are reinventing and improving the way care is delivered to patients nationwide.

Committed to Making a Difference

Transforming healthcare is more than our vision – it’s in our DNA. At Premier, we’re dedicated to ensuring better healthcare and making a positive impact on society.

 

OUR VISION				OUR MISSION
Through the collaborative power of the Premier alliance, we will lead the transformation to high-quality, cost-effective healthcare				To improve the health of communities

OUR VALUES
Innovation		Integrity		Passion for Performance		Focus on People
Seeking breakthrough opportunities, taking risks and initiating meaningful change		Integrity of the individual, the enterprise and the alliance		A passion for performance and a bias for action, creating real value for all stakeholders and leading the pace		Demonstrating respect for all, and mutual commitment to the success of the alliance, our employees, our business partners and the communities we serve

 

 

 

						2022 Proxy Statement		1

 

PERFORMANCE HIGHLIGHTS

Fiscal 2022 Performance Highlights*

 

 

 

*

Fiscal 2022 Net Revenue performance includes the impact of continued normalization of demand for personal protective equipment, or PPE, and other high demand supplies primarily due to the COVID-19 pandemic. See Appendix A for the definitions of Non-GAAP Adjusted EBITDA and Non-GAAP EPS and reconciliations of these non-GAAP financial measures to their comparable GAAP measures.

 

 

 

2		2022 Proxy Statement

 

STOCKHOLDER ENGAGEMENT AND

CORPORATE GOVERNANCE

Our 2021 Stockholder Say-on-Pay Vote

At our 2021 Annual Meeting of Stockholders, we sought stockholder approval, on an advisory basis, of the compensation of our NEOs as disclosed in our 2021 proxy statement (“say-on-pay” vote). We hold our say-on-pay vote annually. In 2021, we did not receive majority support for our executive compensation program for the first time in our history as a public company. Our Compensation Committee and Board of Directors take this vote outcome seriously, and we have undertaken an extensive Board-led effort to engage with our stockholders to better understand their perspectives on our executive compensation program.

Our engagement team included a director who sits on both the Compensation Committee and Nominating and Governance Committee of the Board of Directors and members of management, including representatives from our finance, human resources and investor relations teams. As part of our expanded stockholder engagement effort in advance of, and following, the 2021 annual meeting, we contacted stockholders representing approximately 52% of our outstanding common stock. Ultimately, our engagement team met with stockholders representing more than 37% of our outstanding common stock, of which a majority voted against our executive compensation program. These stockholder engagement meetings have helped shape our thoughts on disclosure and compensation going forward.

Stockholders generally supported the overall structure of our executive compensation program. However, some stockholders requested that we provide a deeper explanation of the discretionary adjustments that were made regarding the payout of the 2019-2021 performance shares.

The goals for the 2019-2021 performance shares were established at the beginning of FY2019 (summer of 2018). Subsequently, the Board approved material transactions that it believes are in the long-term interests of the Company and its stockholders, but which had a negative impact on the performance metrics previously established by the Compensation Committee and the Board for the 2019-2021 performance shares. One transaction was the acquisition of Acurity and Nexera in February 2020, which for the first time secured direct long-term Group Purchasing Organization (“GPO”) agreements between Premier and Acurity’s former members, as well as adding Nexera’s outsourced supply chain management capabilities to Premier’s service offerings, as set forth in our Form 8-K filed on February 4, 2020. Another multi-faceted transaction was Premier’s corporate restructuring and the amendment and extension of GPO agreements, which were effective July 1, 2020, with the vast majority of Premier’s remaining members, as set forth in our Form 8-K filed on August 11, 2020. The corporate restructuring resulted in a more simplified ownership structure and financial reporting, among other long-term value enhancements. The Acurity acquisition and amendment and extension of GPO agreements secured long-term, no-break contracts with members representing over 90% of Premier’s consolidated member net administrative fee revenue with significant opportunities to expand our overall business relationships with those members. However, the increase in average administrative fee share paid to members under such contracts resulted in a decrease in FY2021 Adjusted EPS. In addition, the unprecedented and unforeseen COVID-19 pandemic had a net negative impact on FY2021 Adjusted EPS, primarily due to lower utilization of healthcare services and associated lower demand for supplies resulting from deferred elective surgeries and other non-COVID-19 related procedures that was only partially offset by increased demand for certain low-margin personal protective equipment and other supplies required to treat patients with COVID-19. As fiscal 2021 progressed, it became increasingly difficult to identify specific COVID-19 pandemic impacts on our overall business given the nature and duration of the pandemic that continued through the entirety of fiscal year 2021. We did not believe that it was possible to state with specificity or accuracy how much of healthcare or other provider purchasing was actually impacted by the pandemic given the fluid and dynamic nature of business activity throughout fiscal year 2021.

The Compensation Committee, in consultation with its independent consultant Mercer, made discretionary adjustments to the 2019-2021 performance share achievement in recognition of the negative impact to FY2021 Adjusted EPS resulting from: (i) the Acurity and Nexera acquisition, as set forth in our Form 8-K filed on February 4, 2020; (ii) the corporate restructuring and amended and extended GPO agreements, as set forth in our Form 8-K filed

 

 

 

						2022 Proxy Statement		3

STOCKHOLDER ENGAGEMENT AND CORPORATE GOVERNANCE

 

on August 11, 2020; and (iii) the estimated impact of COVID-19 on fiscal year 2021 results determined by management and the Compensation Committee when we established our fiscal year 2021 financial plan in the summer of 2020. These material transactions are expected to result in long-term value creation for the Company and our stockholders. We also recognized the significant efforts made by Premier employees, including those who receive performance shares below the executive level.

The Compensation Committee determined these discretionary adjustments were appropriate given the extraordinary circumstances in which significant strategic decisions unanticipated at the time of goal setting and an unforeseen pandemic affected achievements of the goals in ways that our employees could not control and that their best efforts could not fully counteract. In this regard, the Compensation Committee recognized the important need to retain desired talent throughout the organization during an exceptionally challenging environment and ongoing labor market conditions so that we can successfully execute our mission – to improve the health of communities.

In addition to stockholder perspectives on the discretionary adjustments to the 2019-2021 performance shares payout, our engagement team gained additional valuable feedback from our stockholders, which was conveyed to the full Compensation Committee and the Board of Directors. As a result of these discussions, we are taking measured steps to enhance transparency, disclosures and incorporate certain other items in executive compensation in future years, as described below.

 

		What We Heard				What We Are Doing
		Stockholders asked for more detailed disclosure regarding discretionary adjustments to annual incentive and performance share award results.				We have substantially enhanced our disclosure practices as reflected in this proxy statement (see above) and will continue to do so going forward.
		Stockholders indicated a desire for additional measures, such as free cash flow and return on invested capital targets, to be included in executive compensation.				The Compensation Committee and Management is tracking the hypothetical results of a free cash flow metric to determine the appropriateness of inclusion in future executive compensation, and we will provide updates to our stockholders.
		Stockholders commented that any Environmental, Social and Governance (“ESG”) business practices and initiatives should align with our vision, mission and values and support our long-term, strategic goals to create long-term, stockholder value.				We continue to incorporate sustainable business practices and ESG-related initiatives into our daily operations and enhance our disclosures to reflect and clarify how they align with our vision, mission and values as well as support our strategy to achieve our longer-term goals and create stockholder value.
		Stockholders would like to see ESG-related targets, particularly around climate change and greenhouse gas (GHG) emissions, incorporated in executive compensation.				We are currently quantifying our GHG emissions to determine baselines, having conducted an environmental assessment of Scope 1 and Scope 2 GHG emissions in CY2022; we anticipate assessing and benchmarking our Scope 3 GHG emissions in CY2023 to determine our approach to reducing emissions as appropriate to our business.   Please refer to our 2022 Sustainability Report for more details regarding our environmental assessment and approach to protecting and enhancing the environment.   Beginning in fiscal FY2023, the Compensation Committee approved the inclusion of two ESG-related metrics in Premier’s annual incentive plan (“AIP”). First, as a part of its strategic goals, the Company is targeting an increase of GPO-member spend through diverse suppliers. Second, to help foster a high-performance culture, Premier is including an overall employee engagement score target and will measure employee responses to certain diversity-related topics/questions. The Compensation Committee will consider employees’ performance against these measures as part of its review of AIP award payouts.
		Stockholders asked the Company to adopt a relative incentive plan performance metric				Premier did not adopt a relative performance metric since there is a lack of other public companies with a similar profile that includes GPO, direct sourcing, healthcare technology and advisory services businesses.

 

 

 

4		2022 Proxy Statement

STOCKHOLDER ENGAGEMENT AND CORPORATE GOVERNANCE

 

		What We Heard				What We Are Doing
		Stockholders requested more transparency on the Strategic Milestones component of our AIP.				The milestones for our 2022 AIP were: (i) inclusion of the adoption and use of the Remitra electronic invoicing and payment platform; (ii) expansion of covered lives in our Contigo Health business; (iii) achievement of targeted revenue growth levels in our adjacent markets businesses; (iv) increased participation in our high compliance GPO programs; (v) increased contract penetration; and (vi) accelerated revenue growth for our Conductiv solutions. Changes to strategic milestones from 2022 to 2023 for our AIP include the addition of an initiative focused on diversity, equity, inclusion and belonging (“DEIB”) while incorporating the focus on Conductiv growth into the overall contract penetration objective.

As discussed in the “Executive Summary” section of the “Compensation Discussion and Analysis,” the Compensation Committee carefully considered stockholder concerns. Furthermore, as part of its compensation evaluation, the Compensation Committee approved the following:

 

•

Replacing a cost goal with a savings goal as part of our AIP’s financial measures

 

•

Eliminating the one-year performance measure in the performance shares and using three-year measures only, better aligning with long-term performance

The Company anticipates that it will continue to engage with stockholders as part of its efforts to learn more about their perspectives and enhance its practices as appropriate to the business and value creation.

 

 

 

						2022 Proxy Statement		5

 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

Premier is committed to being a good corporate citizen and to doing the right thing. We are known as a company that is governed responsibly and behaves ethically, is open and transparent in our business dealings, seeks to make a positive social impact and protect the environment, and provides a work environment where our employees have a voice and are given the opportunity to be all they can be. By growing our Company responsibly, we earn the trust on which our business is based, and we build the relationships on which our future depends.

Our Board of Directors and leadership team recognize the importance of solid governance, environmental stewardship and social responsibility, with five areas fundamental to our business:

 

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Governance and Responsible Business Practices: Integrity forms the basis of our business operations and underpins all our business relationships.

 

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Our People and Culture: To effectively transform healthcare, we rely on our most important resource–our employees.

 

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Our Social Responsibility: Our mission is quite simple–to improve the health of communities.

 

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Responsible Supply Chain Management: We help our members deliver better health care and outcomes at a lower cost for the patients they serve by improving the efficiency, effectiveness and resilience of the healthcare supply chain and by providing our members and other customers with meaningful solutions based on industry-leading data analytics backed by one of the nation’s largest repositories of clinical data.

 

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Environmental Stewardship: We are committed to pursuing business practices that contribute to protecting and enhancing the environment.

For details on these five fundamental areas, we encourage you to read our 2022 Sustainability Report located at https://www.premierinc.com/sustainability. For your convenience, we have summarized some key points from the report.

Governance and Responsible Business Practices

Our Board is ultimately responsible for oversight of our “ESG” initiatives. The Nominating and Governance Committee recently assumed responsibility for ESG oversight and will make periodic reports to the Board regarding ESG matters.

The Compensation Committee has oversight of human capital management as well as our “DEIB” initiatives. In response to stockholder feedback and to support progress toward our sustainability priorities, beginning in fiscal 2023, the Compensation Committee approved the inclusion of the following two ESG-related metrics in the Company’s annual incentive plan:

 

•

Supplier Diversity: This performance metric measures GPO-member spend against a preset target to incentivize increasing supplier diversity and driving equitable access to business opportunities.

 

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Employee Engagement: To help foster a high-performance culture, the Company is including an overall employee engagement score target and will measure employee responses to certain DEIB topics/questions.

Premier believes these elements are additive to supporting our mission to improve the health of communities and achieving our vision to lead the transformation to high-quality, cost-effective healthcare. Following completion of the fiscal 2023 performance period, the Compensation Committee will carefully review employee/executive performance against these and other “AIP” targets to determine the level of achievement and resulting payout under the AIP.

The Audit and Compliance Committee has oversight over our social responsibility audits and general compliance with laws, applicable laws, including SEC and those affecting ESG issues. In carrying out its responsibilities for ESG oversight, the Nominating and Governance Committee will coordinate with the Compensation Committee and the Audit and Compliance Committee on ESG-related subjects.

 

 

 

6		2022 Proxy Statement

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

 

Our Board sets high standards for our employees, officers and directors. Implicit in their commitment is the importance of sound corporate governance. It is the duty of our Board to serve as a prudent fiduciary for our stockholders and to oversee the management of our business.

Our Board believes that diversity allows different perspectives and ideas to be heard, mitigates against group think and improves oversight, decision-making and governance. Our Board considers diversity to include gender, ethnicity, age, persons with disabilities, sexual orientation, status as a diverse director under Nasdaq requirements and other characteristics that contribute to diverse viewpoints. We have a Board Diversity Policy within our Corporate Governance Guidelines. Our Board composition already complies with NASDAQ’s recently adopted Board Diversity Rule that requires its member companies to have at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+. We have also provided a Diversity Matrix on page 29 of this proxy statement ahead of the timing requirements under the NASDAQ’s Board Diversity Rules.

We have a Corporate Code of Conduct that applies to all employees and officers. Every employee is provided with the Code and receives training as part of our annual compliance education. Our directors are subject to a Board Code of Ethics and Board Conflict of Interest Policy and Disclosure Statement.

To further promote a culture of ethical behavior, the Audit and Compliance Committee established a Whistleblower Policy, including an anonymous ethics hotline. This policy and hotline are designed to encourage open communication of concerns regarding potentially unethical or illegal business practices and conduct. The policy ensures any individual making a report will be protected from discrimination, retaliation, harassment or other reprisals for raising concerns regarding potentially inappropriate conduct.

For the 15th consecutive year, we were named by the Ethisphere^® Institute as one of the World’s Most Ethical Companies. We were selected for this honor from among tens of thousands of companies around the world. A global leader in defining and advancing the standards of ethical business practices, the Ethisphere^® Institute recognized us for continuing to raise the bar on ethical leadership and corporate behavior.

Our People and Culture

To effectively transform healthcare, we rely on our most important resource: our employees. Our values—integrity, innovation, passion for performance and a focus on people—guide every business decision we make. Throughout our entire organization, there exists a shared commitment to transforming the healthcare industry. It is our unique blend of employee compassion and innovation that we believe makes our solutions stand out. Our people play a core role in our long-term value creation by upholding our mission to improve the health of communities.

Like our Board of Directors, our workforce requires diversity of thought, cross-cultural representation and engagement to solve the complex challenges we face. We know that a diversity of perspectives, experiences and backgrounds is a powerful way to unlock new ideas and better understand the needs of others. We are committed to a workforce representing different generations, ethnicities, genders, races, orientations, cultures and life experiences. Our values speak to our commitment to treat others fairly, equitably and consistently while affirming that respect for our differences creates our strength.

We support Employee Resource Groups (“ERGs”) as a vital part of our culture, helping us build an environment of belonging, equity, inclusion, diversity awareness and a sense of company pride. Our ERGs encourage our employees to network with peers of similar interests, which helps foster a sense of belonging throughout the Company, even while many of us are working from home. Through our ERGs and other company programs, we provide opportunities for our colleagues to listen, learn, mentor and grow.

Our Social Responsibility

Our mission is quite simple: to improve the health of communities. This is not only our mission but also our responsibility. Ultimately, we are successful because every day our employees are willing to go above and beyond for our customers and members—the hospitals, nursing homes, urgent care centers and physicians that they and their families use. Without that willingness to serve, our ability to deliver value would be greatly diminished.

 

 

 

						2022 Proxy Statement		7

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

 

We play a critical role in the rapidly evolving healthcare industry, collaborating with our member alliance of more than 4,400 U.S. hospitals and health systems and approximately 250,000 providers and other organizations to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Through the collaborative power of our healthcare alliance approach, we are leading the transformation to high-quality, cost-effective healthcare.

With our differentiated combination of integrated data and analytics, collaboratives, supply chain solutions and advisory and other services, we are uniquely positioned to transform healthcare by enabling better care and outcomes at a lower cost. Additionally, we are an active advocate for shaping healthcare policies for long-lasting improvements to benefit the U.S. healthcare system.

Responsible Supply Chain Management

We are dedicated to improving the healthcare industry by collaborating with our members on long-term innovations. Our portfolio of approximately 3,000 contracts with more than 1,460 suppliers provides our members with access to a wide range of products and services. With our integrated and comprehensive solutions, we improve the efficiency and effectiveness of the healthcare supply chain.

Our contracting process is guided by one of the industry’s most comprehensive Codes of Conduct, which supports healthy competition while encouraging new and innovative products to enter the market. Our sourcing process ensures that factors beyond price are given serious and appropriate consideration. Clinical efficacy and improved patient care are especially important to us and our members.

We created a Supplier Diversity Program to provide minority-, women- and veteran-owned small businesses the opportunity to partner with us as we continue leading the way in healthcare innovation. Our Supplier Diversity Program supports our members by:

 

•

Ensuring diverse suppliers are proactively considered for contracting opportunities;

 

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Supporting and facilitating procurement from diverse suppliers;

 

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Encouraging contracted suppliers to support and procure from diverse suppliers; and

 

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Including diverse suppliers in our contract portfolio.

Environmental Stewardship

Addressing the enormous challenge of improving healthcare’s environmental footprint can only be solved by close cooperation. We are committed to working with our members to define environmentally preferable purchasing (EPP) and to promote contracted suppliers with products that maximize safety and environmental sustainability. We actively assist members in identifying available environmentally preferable contracts and promoting conversion to safer, environmentally preferred products under contract.

Our sourcing committees include environmental impact data in their contracting decisions. Enabled by our data-driven approach, forward-thinking supply chain teams are driving continued green innovations in healthcare that are cutting costs over the long term, reducing environmental impact and minimizing negative consequences to public health.

We work with suppliers to ensure environmental sustainability information is made available before purchasing decisions are made. We request extensive information from our suppliers on environmentally preferable policies and practices and are guided by our EPP Council, a representative group of our members’ sustainability professionals. Our EPP Council provides vital input to ensure that our efforts reflect their goals, and that supplier documentation is fit for purpose.

We work with member health systems to support their varying organizational EPP initiatives, including efforts to eliminate certain chemicals from their health systems, reduce their environmental footprint through reprocessing, utilize products with recyclable packaging and content to eliminate waste and greenhouse gas emissions, and reduce energy usage through the purchase of energy efficient electronics.

 

 

 

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

 

Through these efforts, we are working to address healthcare’s role in climate change.

For more information on Premier’s ESG initiatives, please visit the Sustainability section of our corporate website at https://www.premierinc.com/sustainability.

 

 

 

						2022 Proxy Statement		9

 

ITEM 1 – ELECTION OF DIRECTORS

The current term of office for our Class III Directors expires at the Annual Meeting, while the term for our Class I Directors expires at the 2023 annual meeting and the term for our Class II Directors expires at the 2024 annual meeting. Upon unanimous recommendation by the Nominating and Governance Committee of the Board of Directors, the Board proposes that the following nominees be elected for new terms of three years and until their successors are duly elected and qualified as Class III Directors: Michael J. Alkire, Jody R. Davids, Peter S. Fine and Marvin R. O’Quinn. Each nominee has consented to serve if elected, and each nominee is currently a member of our Board of Directors. If any of them becomes unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxy holders will vote for the substitute nominee designated by the Board.

 

				Board Recommendation
				The Board of Directors unanimously recommends a vote “FOR” the election of each of the Class III directors

Directors Standing for Election

Nominees to Serve as Class III Directors until the 2025 Annual Meeting

 

Age: 59   Director Since: 2021   Committee Membership: Member Agreement Review Committee   Employee-Director		Michael J. Alkire   Experience:   •  Chief Executive Officer of Premier since May 2021 and President of Premier since April 2019 •  Chief Operating Officer of Premier (2013 to April 2019), and of PHSI and Premier LP since 2011 •  Senior Vice President of Premier from 2004 to 2006 and President of Premier LP from 2006 to 2011 •  Member of the board of directors of Premier’s predecessors from 2011 to 2013 •  Member of the board of directors of FFF Enterprises, Inc., a distributor of plasma products, vaccines, biosimilars and other specialty pharmaceuticals and biopharmaceuticals, from 2016 to 2018 •  Prior executive experience includes positions at Deloitte & Touche LLP and Cap Gemini Ernst & Young •  Past director on the boards of directors of Global Healthcare Exchange, LLC and the Healthcare Supply Chain Association •  Obtained a bachelor’s degree from Indiana State University and a Master of Business Administration from Indiana University
Skills/Qualifications:   We believe Mr. Alkire’s qualifications to serve on our Board of Directors include his approximately 33 years of experience, including executive leadership, supply chain and healthcare system strategy, large-scale operations, technology, quality improvement and business transformation.

 

 

 

10		2022 Proxy Statement

ITEM 1 – ELECTION OF DIRECTORS

 

Age: 66   Director Since: 2015   Committee Memberships: Audit and Compliance Committee and Nominating  and Governance Committee    Independent Director		Jody R. Davids   Experience:   •  Retired •  Senior Vice President and Global Chief Information Officer of PepsiCo, Inc., a NYSE-listed company that has a global portfolio of food and beverage brands, from April 2016 to October 2019 •  Chief Information Officer of Agrium, Inc., a NYSE-listed company and Toronto Stock Exchange-listed company that is a global producer and marketer of nutrients for agricultural and industrial markets, from April 2014 to April 2016 •  Various executive and consulting roles with Agrium, Best Buy, Inc., a NYSE-listed company, and Cardinal Health, Inc., a NYSE-listed company, during the period from 2000 to 2014 •  Obtained a bachelor’s degree and a Master of Business Administration from San Jose State University •  National Association of Corporate Directors “Board Leadership Fellow” •  CERT Certificate in Cybersecurity Oversight from the Carnegie Mellon University Software Engineering Institute
Skills/Qualifications:   We believe that Ms. Davids’ qualifications to serve on our Board of Directors include her strong background in information technology, cybersecurity risk management, supply chain, logistics and distribution and her leadership experience serving in corporate senior executive positions of other publicly traded companies.

 

Age: 70   Director Since: 2013   Committee Membership: Audit and Compliance Committee and Finance Committee (Chair)   Independent Director		Peter S. Fine   Experience:   •  President and Chief Executive Officer of Banner Health since 2000 •  Member of the board of directors of Banner Health •  Member of the board of directors of Premier’s predecessors from 2003 through 2009 •  Previously served on the boards of directors of Accuray Incorporated and the Translational Genomics Research Institute and as member of the Heard Museum board of trustees •  Obtained a bachelor’s degree from Ohio University and Master of Arts in Healthcare Administration from George Washington University
Skills/Qualifications:   We believe Mr. Fine’s qualifications to serve on our Board of Directors include his approximately 44 years of experience in the healthcare industry, his strong background in healthcare, healthcare management and healthcare plans, and his leadership experience serving in executive positions at a large healthcare system.

 

 

 

						2022 Proxy Statement		11

ITEM 1 – ELECTION OF DIRECTORS

 

Age: 70   Director Since: 2015   Committee Membership: Compensation Committee and Finance Committee   Independent Director		Marvin R. O’Quinn   Experience:   •  President and Chief Operating Officer of CommonSpirit Health since February 2019 •  Senior Executive Vice President and Chief Operating Officer of Dignity Health in San Francisco, California since 2009 •  Previous executive roles with Jackson Health System, Atlantic Health System, New York Presbyterian Health System, Providence Medical Center and Providence Milwaukee Hospital •  Additional key positions with other hospitals and medical centers in Portland, Fresno and Seattle •  Held board appointments with Charles Drew University of Medicine and Science (Chair), PriMed/Hill Physicians, Francisco Partners and Ministry Leadership Center •  Obtained a bachelor’s degree and a Master of Health Administration from the University of Washington
Skills/Qualifications:   We believe that Mr. O’Quinn’s qualifications to serve on our Board of Directors include his approximately 42 years of experience in the healthcare industry, his strong background in healthcare and healthcare management and his leadership experience serving in executive positions at large healthcare systems.

 

 

 

12		2022 Proxy Statement

ITEM 1 – ELECTION OF DIRECTORS

 

Other Directors Not Standing for Election at this Meeting

Directors who will continue to serve after the 2022 Annual Meeting are:

Class I Directors with Terms Expiring at the 2023 Annual Meeting

 

Age: 68   Director Since: 2019   Committee Memberships: Audit and Compliance Committee and Finance Committee   Independent Director		John T. Bigalke   Experience:   •  Chief Executive Officer of Second Half Health Advisors, a healthcare strategy firm, since 2016 •  Previously with Deloitte USA LLP from 1998 to 2016, including serving as Vice Chairman and National Industry Leader for the Health Care and Life Science Practice from 2002 until 2012 and Vice Chairman and Senior Partner, Global Health Care Practice from 2012 to 2016 •  Director, Chairman of the Audit and Corporate Responsibility Committee and member of the Finance Committee of AdventHealth •  Former director, Audit Committee Chair and member of the Nominating/Corporate and Governance Committee and Chair of the Special Committee of Biora Therapeutics, Inc. (formerly Progenity, Inc.), NASDAQ BIOR •  Obtained a bachelor’s degree from Clemson University and completed the Leadership Development Program at Columbia University Graduate School of Business and the Executive Leadership Program at the Wharton School of the University of Pennsylvania •  National Association of Corporate Directors “Board Leadership Fellow” •  CERT Certificate in Cybersecurity Oversight from the Carnegie Mellon University Software Engineering Institute •  Certified Public Accountant
Skills/Qualifications:   We believe Mr. Bigalke’s qualifications to serve on our Board of Directors include his strong financial, corporate accounting, business development, risk management and leadership experience and his service on the boards and audit committees at several privately held and publicly traded companies.

 

Age: 56   Director Since: 2020   Committee Membership: Compensation Committee and Member Agreement Review Committee (Chair)   Independent Director		Helen M. Boudreau   Experience:   •  Retired •  Chief Operating Officer of the Bill & Melinda Gates Medical Research Institute, a nonprofit medical research organization, from June 2018 to June 2019 •  Previously served as the Chief Financial Officer at each of Proteostasis Therapeutics, Inc., a NASDAQ-listed biopharmaceutical company, from July 2017 to June 2018, and FORMA Therapeutics, Inc., a privately held biotechnology company, from October 2014 to June 2017 •  Prior experience includes executive positions with Novartis Corporation and Pfizer, Inc. and leadership roles with Pepsico/Yum! Brands, Inc., McKinsey & Company, Inc. and Bank of America Corporation •  Serves on the board of directors and as Chair of the Audit Committee and member of the Compensation Committee of each of Shattuck Labs, Inc., a NASDAQ-listed company, and Reunion Neuroscience, Inc. (formerly Field Trip Health Ltd.), a company listed on NASDAQ and the Toronto Stock Exchange •  Serves on the board of directors and as Chair of the Audit Committee of Rallybio Corporation, a NASDAQ-listed biotech company •  Served on the board of directors and as chair of the Audit Committee of Evaxion Biotech, a NASDAQ-listed company, from 2020 to 2021 and on the board of directors and as Chair of the Audit Committee and member of the Compensation Committee for Proteostasis Therapeutics, Inc. from 2016 to 2017 •  NACD Directorship CertifiedTM by the National Association of Corporate Directors •  Obtained a bachelor’s degree from the University of Maryland and a Master of Business Administration from the University of Virginia Darden Graduate School of Business
Skills/Qualifications:   We believe Ms. Boudreau’s qualifications to serve on our Board of Directors include her strong financial background and broad understanding of the healthcare ecosystem through her work across multiple different healthcare and biopharmaceutical companies.

 

 

 

						2022 Proxy Statement		13

ITEM 1 – ELECTION OF DIRECTORS

 

Age: 52   Director Since: 2015   Committee Membership: Compensation Committee (Chair) and Finance Committee   Independent Director		Marc D. Miller   Experience:   •  Chief Executive Officer and President of Universal Health Services, Inc., a NYSE-listed company headquartered in King of Prussia, Pennsylvania, serving as CEO since 2021 and President since 2009 •  Prior service in various executive roles and key positions with Universal Health Services, Central Montgomery Medical Center, Wellington Regional Medical Center, The George Washington University Hospital and Mayo Clinic •  Member of the board of directors of Universal Health Services, Inc. since 2006 and of the board of trustees of its affiliated entity Universal Health Realty Income Trust, a NYSE-listed company, since 2008 •  Obtained a bachelor’s degree from the University of Vermont and a Master of Business Administration with a concentration in healthcare management and finance from The Wharton School at the University of Pennsylvania
Skills/Qualifications:   We believe that Mr. Miller’s qualifications to serve on our Board of Directors include his approximately 26 years of experience in the healthcare industry, his strong background in healthcare and healthcare management, his leadership experience serving in executive positions at large healthcare systems and his public company experience.

 

 

 

14		2022 Proxy Statement

ITEM 1 – ELECTION OF DIRECTORS

 

Class II Directors with Terms Expiring at the 2024 Annual Meeting

 

Age: 60   Director Since: 2013   Committee Membership: Nominating and Governance Committee   Independent Director		Terry D. Shaw   Experience:   •  Chief Executive Officer of AdventHealth (f/k/a Adventist Health System), a nine-state health system headquartered in Florida, since 2017 •  Previously served with AdventHealth since 2000, including as the Executive Vice President, Chief Financial Officer and Chief Operations Officer from 2010 to 2017 •  Chair of the Board of Directors of Premier since August 2019, Vice Chair of the Board of Directors of Premier from July 2015 to August 2019, and member of the board of directors of Premier and its predecessors since 2012 •  Member of the American College of Healthcare Executives and the Healthcare Leadership Council •  Member of the board of directors of AdventHealth •  Obtained a bachelor’s degree from Southern Adventist University and a Master of Business Administration from the University of Central Florida
Skills/Qualifications:   We believe Mr. Shaw’s qualifications to serve on our Board of Directors include his approximately 37 years of experience in the healthcare industry, his strong background in finance, healthcare and healthcare management and his leadership experience serving in executive positions at a large healthcare system and chairing the board of a public company.

 

Age: 65   Director Since: 2013   Committee Memberships:   Compensation Committee and Nominating and Governance Committee (Chair)   Independent Director		Richard J. Statuto   Experience:   •  Retired •  Advisor to Bon Secours Mercy Health, primarily focused on strategic growth and innovation, from September 2018 through August 2019 •  President and Chief Executive Officer of Bon Secours Health System from 2005 to September 2018 •  Chair of the Board of Directors of Premier from 2013 to August 2019, and member of the board of directors of Premier and its predecessors since 2011 •  Previously served as President and Chief Executive Officer of St. Joseph Health System •  Member of the boards of directors of the Catholic Medical Mission Board and the Innovation Institute •  Previous service as Chair of the board of directors of the Catholic Health Association and as Vice Chair of the board of directors of Christus Health System •  Obtained a bachelor’s degree in chemical engineering from Vanderbilt University and a Master of Business Administration from Xavier University
Skills/Qualifications:   We believe Mr. Statuto’s qualifications to serve on our Board of Directors include his approximately 36 years of experience in the healthcare industry, his strong background in healthcare and healthcare management, his leadership experience serving in executive positions at large healthcare systems and chairing a public company board through complex matters, and his marketing and branding experience.

 

 

 

						2022 Proxy Statement		15

ITEM 1 – ELECTION OF DIRECTORS

 

Age: 68   Director Since: 2013   Committee Memberships: Audit and Compliance Committee (Chair) and Member Agreement Review Committee   Independent Director		Ellen C. Wolf   Experience:   •  Retired •  Previously served as Chief Financial Officer of American Water Works Company, Inc., the largest investor-owned U.S. water and wastewater company, as Senior Vice President and Chief Financial Officer of USEC, Inc. and as Vice President and Chief Financial Officer of American Water Works •  Former director of Connecticut Water, a NASDAQ-listed company, from 2015 until its sale in 2019, and former director and Chair of the audit committee of InfraREIT, L.L.C., a company listed on the New York Stock Exchange (“NYSE”), from 2014 until its sale in 2019 •  Former director of Airgas, Inc., a NYSE-listed company, and the Philadelphia Zoo •  Obtained a bachelor’s degree from Duke University and a Master of Business Administration from the Wharton School of the University of Pennsylvania
Skills/Qualifications:   We believe that Ms. Wolf’s qualifications to serve on our Board of Directors include her strong financial, corporate accounting, business development, risk management and leadership experience through her service in corporate senior executive positions and her prior service on the audit committees of other publicly traded and privately held companies.

There are no family relationships between any of our executive officers, directors and director nominees. The business address of each of our directors and director nominees is 13034 Ballantyne Corporate Place, Charlotte, NC 28277

 

 

 

16		2022 Proxy Statement

 

BOARD SKILLS AND DIVERSITY

Board Skills and Experience Matrix

The table below is intended to highlight core skills, competencies, and experience each director possesses, but it should not be interpreted to mean that each director does not also possess those that are not marked. Our Board considers many factors in its review of how each director contributes significantly to the overall Board skill set, including, but not limited to, the factors below. Director and nominee biographies under “Item 1—Election of Directors” describe each person’s background and relevant experience in more detail.

 

Skill and Experience

Michael  Alkire

John  Bigalke

Helen  Boudreau

Jody  Davids

Peter  Fine

Marc  Miller

Marvin  O’Quinn

Terry  Shaw

Richard  Statuto

Ellen  Wolf

Executive Leadership

●

●

●

●

●

●

●

●

●

●

Healthcare Industry

●

●

●

●

●

●

●

●

●

Digital Technology

●

●

Operations

●

●

●

●

●

●

Treasury

●

●

●

●

●

Capital Allocation

●

●

●

●

●

Finance/ Accounting/ Auditing

●

●

●

●

●

M&A/ Corporate Development

●

●

●

Corporate Governance

●

●

Supply Chain/ Logistics

●

●

Risk Assessment and Management

●

●

Board Diversity Policy

We recognize and value the benefits that diversity can bring to the Board, and our Corporate Governance Guidelines include a formal Board Diversity Policy. The Board believes that the inclusion of different perspectives and ideas helps mitigate against group-think and improves oversight, decision-making and governance. Board diversity also demonstrates our commitment to diversity at all levels within our Company. While all appointments to the Board are based on merit, the Board considers the benefits of diversity in identifying potential directors. At all times, we seek to maintain a Board comprised of talented and dedicated directors with a diverse mix of experience, skills and backgrounds who can collectively reflect the strategic needs of the business and the nature of the environment in which we operate. For purposes of our Board Diversity Policy, diversity includes gender, ethnicity, age, persons with disabilities, sexual orientation, status as a diverse director under any NASDAQ requirements and other personal characteristics that would contribute to diverse viewpoints on the Board.

 

 

 

						2022 Proxy Statement		17

BOARD SKILLS AND DIVERSITY

 

Board Diversity Matrix

The table below provides certain information regarding the diversity of our Board of Directors as of the Record Date, October 5, 2022.

 

Board Diversity Matrix
Total Number of Directors		10
		Female		Male		Non-Binary		Did Not     Disclose     Gender
Part I: Gender Identity
Directors		3		7		0		0
Part II: Demographic Background
African American or Black		0		1		0		0
Alaskan Native or Native American		0		0		0		0
Asian		0		0		0		0
Hispanic or Latino		0		0		0		0
Native Hawaiian or Pacific Islander		0		0		0		0
White		3		6		0		0
Two or More Races or Ethnicities		0		0		0		0
LGBTQ+		0
Did Not Disclose Demographic Background		0

In addition, we had no director identify as a military veteran and/or as having a disability.

 

 

 

18		2022 Proxy Statement

 

CORPORATE GOVERNANCE AND BOARD STRUCTURE

Corporate Governance

Our corporate governance practices are established, monitored and regularly assessed by our Board of Directors with assistance from the Nominating and Governance Committee. The Board of Directors considers current and proposed legal requirements and governance best practices in connection with its oversight of our corporate governance practices.

Corporate Governance Guidelines

To assist the Board of Directors in the exercise of its duties and responsibilities and to serve the best interests of us and our stockholders, the Board of Directors has adopted Corporate Governance Guidelines. Under its charter, the Nominating and Governance Committee, in consultation with the Chair of the Board and the Chief Executive Officer, periodically reviews the Corporate Governance Guidelines, suggesting changes when appropriate. The Corporate Governance Guidelines set forth various roles and responsibilities, including the following areas:

 

Management and Business Oversight

•  Job description and specific functions of the Board and its committees

•  Annual review and evaluation of the CEO led by the Chair of the Board in collaboration with the Compensation Committee

•  Annual evaluations of executives

•  Annual review of succession planning

•  Risk management and oversight by the Audit and Compliance Committee

•  Board self- and peer-assessments, led by the Nominating and Governance Committee, to evaluate the performance of each director

Director Nomination and Qualification

•  Methods for director nomination

•  Succession planning for all directors, including leadership positions

•  Multi-factorial screening process

•  Attribute-based guidelines, including skills, competencies, experience, personal traits and diversity characteristics

•  Board Diversity Policy, which requires assessing Board composition or identifying suitable candidates for appointment or re-election to the Board using objective criteria having due regard to the benefits of diversity and the needs of the Board.

 

 

 

						2022 Proxy Statement		19

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Director Requirements and Responsibilities

•  Exercise fiduciary duties to stockholders and personal accountability through investment of time and energy in our business

•  Commitment to support the needs of the Board and fully serve out the established Board term

•  Limits on other board service (i.e., no over-boarding)

•  Director orientation and continuing education

•  Director mentorship program

•  Notice of changes in principal employment or changes in independence

•  Director compensation and stock ownership

Independence and Leadership

•  Director adherence to independence standards

•  Annual election of a non-management director as Board Chair (or Lead Independent Director)

•  Annual election of Company officers, including a president, chief executive officer and secretary

•  Clear duties and role expectations of the Board Chair, Lead Independent Director and Corporate Secretary

Board Accountability, Ethics and Integrity

•  Adherence to the Board’s Conflict of Interest Policy

•  Adherence to our Code of Conduct and the Board Code of Ethics

Board Structure

•  Board size and functional review

•  Board class structure and term of each class

•  Age and term limits

•  Resignation and failure to be re-elected

 

Board Committees

•  Standing committees and committee structure

•  Independence requirements and qualifications of committee members

•  Assignment and rotation of committee members and Chairs

•  Committee Chair job description

•  Committee meeting frequency, length and agenda

 

 

 

20		2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Board Meetings, Agenda and Information

•  Regular meeting attendance expectations

•  Board agenda process

•  Board information flow, materials and presentations

•  Regularly held executive sessions outside the presence of management

•  Board access to and retention of independent advisors

•  Director access to management

•  Right to call a special meeting of the Board and related procedures

•  Annual stockholder meeting and attendance

 

Stockholder Input and Communications

•  Board interaction with stockholders, analysts, institutional investors, member owners and the media where appropriate

•  Board responsiveness to stockholder proposals that receive meaningful support

Code of Ethics

We have adopted a Corporate Code of Conduct, as well as a Board Code of Ethics and a Board Conflict of Interest Policy and Disclosure Statement, together our “code of ethics,” that apply, as applicable, to all employees, directors and officers, including our principal executive officer, principal financial officer and chief accounting officer, or persons performing similar functions. The purpose of the code of ethics is to deter wrongdoing and promote:

 

•

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

 

•

full, fair, accurate, timely and understandable disclosure in reports required to be filed with or submitted by us to the SEC and in other public communications;

 

•

compliance with all applicable rules and regulations that apply to us and our officers and directors;

 

•

the prompt internal reporting of violations of the code of ethics to an appropriate person or persons identified in the code of ethics; and

 

•

accountability for adherence to the code of ethics.

We will disclose any future amendments to, or waivers from, certain provisions of these ethical policies and standards for officers and directors on the “Investors” section of our website at http://investors.premierinc.com promptly following the date of such amendment or waiver. Upon written request to our Corporate Secretary, we will also provide a copy of the code of ethics free of charge.

 

 

 

						2022 Proxy Statement		21

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Corporate Website

In our corporate website (www.premierinc.com), we maintain a “Corporate Governance” area within the “Investors” section, “Ethics and Compliance” area within the “About Premier” section and “Sustainability” section on our website where you can find copies of our principal governance documents, ethics policies and sustainability report. You may also request copies of these documents by contacting our Corporate Secretary at 13034 Ballantyne Corporate Place, Charlotte, North Carolina, 28277, or by calling 1-704-357-0022. Our “Corporate Governance,” “Compliance and Ethics” and “Sustainability” areas of our website are located at http://investors.premierinc.com/corporate-governance/, https://www.premierinc.com/compliance-and-ethics and https://www.premierinc.com/sustainability, respectively, and include the following documents, among others:

 

Documents on our Website
•  Certificate of Incorporation		•  Board Code of Ethics
•  Bylaws		•  Board Conflict of Interest Policy and Disclosure Statement
•  Corporate Governance Guidelines (includes our Lead Independent Director Policy)		•  Audit and Compliance Committee Charter
		•  Nominating and Governance Committee Charter
•  Whistleblower Policy		•  Finance Committee Charter
•  Insider Trading Policy		•  Compensation Committee Charter
•  Code of Conduct		•  Member Agreement Review Committee Charter
•  Group Purchasing Code of Conduct		•  ESG Sustainability Report

We encourage our stockholders to read our governance documents, as we believe they illustrate our commitment to good governance practices and ethical business conduct.

 

 

 

22		2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Role of the Board in the Oversight of Risk

Our Board of Directors plays an active role in overseeing the management of our risks. We have identified five primary areas of enterprise risk across our operations that are monitored and managed by our Board of Directors, management and internal auditors. These areas include risks associated with strategic, operational, financial, legal and information technology and systems, including cybersecurity. In conjunction with its management of these specific risk areas, our Board of Directors manages reputational risks across all of our operations. Our Board of Directors is primarily responsible for oversight of the strategic, operational and information technology and systems risks that we may encounter. The committees of our Board of Directors assist our full Board in risk oversight by addressing specific matters within the purview of each committee, as illustrated below:

 

 

While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our full Board of Directors remains regularly informed regarding such risks through committee reports and otherwise. In addition, our Board and its committees receive regular reports from our President and Chief Executive Officer; Chief Administrative Officer, Chief Financial Officer and Treasurer; General Counsel; Chief Ethics and Compliance Officer and other members of senior management regarding areas of significant risk to us, including strategic, operational, financial, legal and regulatory, information technology and systems, cyber and reputational risks. We believe the leadership structure of our Board of Directors supports and promotes effective risk management and oversight.

The Compensation Committee reviews and considers our compensation policies and programs in light of the Board of Directors’ risk assessment and oversight responsibilities on an annual basis. Our human resources department in consultation with Mercer (US) Inc. (“Mercer”) prepared and presented to the Compensation Committee a risk assessment report that addressed the incentive compensation structure, plans and processes. The assessment included, among other things, a review of pay mix (fixed versus variable, cash versus equity and short- versus long-term), performance metrics, target setting, performance measurement practices, pay determination, mitigation practices such as our compensation recoupment policy, and overall governance and administration of pay programs. After reviewing this report and making inquiries of management, the Compensation Committee determined we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on our Company.

 

 

 

						2022 Proxy Statement		23

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Communications to Directors

Stockholders and other parties interested in communicating directly to the Board of Directors, any committee or any non-employee director may do so by writing to the address listed below:

PREMIER, INC.

BOARD OF DIRECTORS

13034 BALLANTYNE CORPORATE PLACE

CHARLOTTE, NORTH CAROLINA 28277

ATTENTION: [Addressee*]

C/O SHEILA B. GOULDING, CORPORATE SECRETARY

* Including the name of the specific addressee(s) will allow

us to direct the communication to the intended recipient.

All communications received as set forth in this paragraph will be reviewed by the office of our General Counsel for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service, or patently offensive material will be forwarded promptly to the addressee. In the case of communications to the Board of Directors or any group or committee of directors, the General Counsel’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope is addressed.

Board Structure

Board Structure and Meetings

The Board’s overarching responsibility is to advise and oversee the management and conduct of our business by our Chief Executive Officer and other members of management charged with the health and overall success of Premier’s business. On August 31, 2021, our Board approved a decrease in its maximum size from 15 directors to 11 directors, along with accepting the resignation of five directors. As a result, our Board currently has 10 directors. Our Board size may not exceed 11 directors and must consist of a majority of independent directors in order to satisfy the NASDAQ listing standards discussed below.

Nine of our current Board members are independent, in accordance with NASDAQ listing rules, and one director is our President and Chief Executive Officer, Mr. Alkire. The Board is divided into three classes (Class I, Class II and Class III) with staggered terms of three years each. The term of one class expires at each annual meeting of stockholders; thus, directors typically stand for election after three years, unless they are filling an unexpired term.

Our Bylaws and Corporate Governance Guidelines provide that the Chair of the Board shall not be one of our officers. We believe that having a non-executive Chair of our Board creates an independent environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board of Directors to monitor whether management’s actions are in the best interests of the Company and our stockholders. Our Chief Executive Officer and Board Chair work together to set the Board agenda. Board members are invited to make agenda suggestions, and the Board approves the annual schedule of Board and committee task and agenda items. The Board Chair presides over Board meetings, coordinates the work of the committees of our Board of Directors and performs other duties delegated to the Chair by our Board of Directors. Committee assignments and designation of the committee Chair are made by the Board based upon recommendations of the Board Chair and Nominating and Governance Committee.

Since the Chair of the Board is an independent director, the Board does not currently have a Lead Independent Director. In the event that the Board Chair is not an independent director, our Corporate Governance Guidelines state that the independent directors of the Board shall elect annually a Lead Independent Director upon the recommendation of the Nominating and Governance Committee. The Lead Independent Director would serve as a liaison between the Board Chair and the independent directors and perform other responsibilities as assigned by the Board.

 

 

 

24		2022 Proxy Statement

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

Executive sessions of independent directors, held outside the presence of employee Board members, are scheduled at each in-person Board meeting and may be called at any other Board or committee meeting. The Chair presides over these independent-only executive sessions. Members of our Board of Directors are kept informed of our business through discussions with our Chief Executive Officer and other officers, by reviewing materials provided to them, by visiting our offices and by participating in meetings of the Board of Directors and its committees.

Under our Corporate Governance Guidelines, Board members are expected to prepare for and attend at least 75% of all Board and applicable committee meetings. The Board of Directors met 10 times during fiscal year 2022. In connection with those meetings, the board held eight executive sessions without management (other than Mr. Alkire) present and the independent directors held two executive sessions without Mr. Alkire. Each incumbent member of the Board of Directors attended 75% or more of the meetings of the Board of Directors and of the committees on which he or she served that were held during the period for which he or she was a director or committee member, respectively. In addition, under our Corporate Governance Guidelines, directors are encouraged to attend each annual meeting of stockholders. All current directors who were serving as directors at the time of our 2021 Annual Meeting of Stockholders held on December 3, 2021, other than Peter Fine, virtually attended such annual meeting. We expect all of our directors to virtually attend the 2022 Annual Meeting.

Criteria for Board Members

Our Corporate Governance Guidelines provide multi-factorial criteria applicable to both the composition of the Board as a whole and individual directors to ensure that each director serving on our Board will be aligned with the Company’s strategic plan and bring appropriate skills and experiences that complement the other directors. The Board applies the Attribute-Based Guidelines summarized below in recommending to the stockholders the election of directors:

 

Premier-Specific Criteria

•  Ability to represent, on a fiduciary basis, all stockholders and not a particular constituency or organization

•  Demonstrated willingness to commit sufficient time to Premier, with prior committee service strongly preferred

•  Held in high regard, as evidenced by other elected positions of leadership in national organizations

•  Knowledge of and demonstrated engagement with our services

•  Ability to offer constructive advice to management concerning business lines, new products and services and strategic decisions

•  Willingness to engage in continuing education

•  Demonstrated responsiveness to stockholder concerns and interests

 

Skills, Competencies and Experience

•  C-level leadership experience

•  Group purchasing, value-based purchasing and supply chain operations

•  Healthcare transformation, healthcare continuum of care and population health management

•  Performance and clinical quality improvement, patient safety, outcomes management, risk management and healthcare measurement

•  Technology, information technology and knowledge management

•  Data sciences/analytics and artificial intelligence

•  Outsourcing services

•  Finance, audit and major transactions/M&A/private equity/public equity

•  National perspective on healthcare policy and advocacy

 

 

 

						2022 Proxy Statement		25

CORPORATE GOVERNANCE AND BOARD STRUCTURE

 

•  Healthcare insurance and payment systems

•  Academic medical experience

 

Personal Traits

•  Strong strategic planning orientation, including the ability to view our goals and plans strategically

•  Ability to effectively oversee risk and innovation, thus safeguarding our mission and stockholder interests

•  Knowledge of effective governance policies and practices

•  Proven leadership skills as an executive in a successful organization

•  Ability to listen, engage, reflect and generally work effectively with other directors and management

•  Willingness to ask management and each other tough questions and challenge traditional thinking

•  Adeptness at managing change, ambiguity and complexity

•  Integrity backed by a record of ethical conduct

•  Understanding of the importance and implications of compliance with regulatory requirements

•  Interest and ability to serve in a Board leadership position (e.g., Board Chair, Lead Independent Director, committee Chair) in the future

•  Ability to make a priority commitment to support the needs of the Board and to fully serve out the established Board term

 

Diversity Characteristics

•  Gender

•  Ethnicity

•  Age

•  Disabled status

•  Sexual orientation

•  Status as a diverse director under any requirements of NASDAQ

•  Other personal characteristics that would contribute to diverse viewpoints on the Board

Changes in Principal Employment or Independence; Vacancies

Under our Corporate Governance Guidelines, our non-management directors must submit a letter of resignation upon resignation or retirement from, or termination of, the director’s principal current employment, or other similarly material changes in professional occupation or association. The Board is free to accept or reject the letter of resignation based on the best interests of the Board and stockholders and shall promptly notify such director of its decision.

A director appointed by the Board to fill a vacancy, including a vacancy created by a resignation, will serve until the next election of the class for which such director has been appointed and until his or her successor is elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.

Service on Multiple Boards or Audit Committees

As outlined in our Corporate Governance Guidelines, the Board recommends that directors serve on no more than four public company boards, including our Board. Directors who also serve as a Named Executive Officer of a publicly traded company should serve on no more than two public company boards, including our Board. Directors

 

 

 

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are required to notify the Board Chair and the Nominating and Governance Committee Chair when they become a Named Executive Officer of a publicly traded company, when they become aware that a company for which they serve as a director is becoming publicly traded or in advance of accepting an invitation to serve on another public company board or an appointment to serve on the audit or compensation committee of another public company board. The Board shall determine each director’s ability to serve effectively on our Board while simultaneously serving as a Named Executive Officer of another publicly traded company or on other public company boards, and whether the other public companies are affiliated entities. The Board will also consider the voting policies of proxy advisors and significant institutional investors when evaluating director commitments and appropriate limits.

In accordance with the requirements of the SEC, if an Audit and Compliance Committee member simultaneously serves on the audit committee of more than three public companies, the Board must determine that such simultaneous service will not impair the ability of the director to effectively serve on our Audit and Compliance Committee. The determination will then be disclosed in our proxy statement for the annual meeting of stockholders or as otherwise required by applicable listing standards, rules and regulations.

Director Succession and Nomination Process

The Board delegates to the Nominating and Governance Committee, in consultation with the Board Chair, responsibility for establishing and maintaining an ongoing and transparent succession plan for Premier directors, Board leadership and Board committee members. The succession planning process is multi-factorial, encompassing Premier-specific criteria, subject-matter competencies, personal traits and membership-diversity criteria. The Board seeks to have a composition that includes needed competencies and is also diverse, as described above.

Internal Process for Identifying Candidates

The Nominating and Governance Committee annually reviews, updates and submits to the Board for approval the Board’s job description and Attribute-Based Guidelines. The Nominating and Governance Committee also annually reviews a profile of the current Board members against the Attribute-Based Guidelines, considers expected vacancies, identifies gaps and agrees on the most important competencies and other attributes to seek in evaluating prospective members. The Committee seeks broad input to identify prospective directors, requesting recommendations from the full Board, management and others as they deem appropriate. The Committee may also from time to time use its authority under its charter to retain, at our expense, one or more search firms to identify candidates.

The Nominating and Governance Committee also evaluates the performance of directors who are eligible for election to an additional term before recommending their re-election. Consideration is given to attendance, active participation, substantive contributions, assessments from peers, assessments from management and any feedback received from stockholders.

Proposals for Director Nominees by Stockholders

The Nominating and Governance Committee will consider written proposals from stockholders for director nominees that are timely and properly noticed. In considering candidates submitted by stockholders, the Nominating and Governance Committee will take into consideration the needs of the Board of Directors and the qualifications of the candidate. In accordance with Article I, Section 12 of our Bylaws, to be timely, stockholder notice must be delivered to or mailed and received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 70 days, from such anniversary, proposed nominee(s) and related notice, in order to be timely, must be received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The Nominating and Governance Committee received no nominee recommendations from stockholders for the Annual Meeting. Stockholder nominations for our 2023 annual meeting of stockholders must be received at our principal executive offices on or after August 4, 2023 and not later than September 2, 2023. A stockholder’s notice must be in the form set forth in Article I, Section 12 of our Bylaws and must be addressed to Premier, Inc., 13034 Ballantyne Corporate Place, Charlotte, North Carolina 28277, Attention: Corporate Secretary.

 

 

 

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Article I, Section 12 of our Bylaws requires, among other things, that the notice must set forth:

(1) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected;

(2) the name and record address of the stockholder giving notice and the beneficial owner, if any, on whose behalf the nomination is being made;

(3) the class and number of shares of our stock which are owned beneficially and of record by such stockholder and such beneficial owner;

(4) a representation that the stockholder intends to appear in person or by proxy at the meeting to propose such nomination;

(5) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of our outstanding capital stock required to elect the nominee and/or (ii) solicit proxies from stockholders in support of such nominee;

(6) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder;

(7) a description of any agreement, arrangement or understanding with respect to the nomination and/or the voting of shares of any class or series of our stock between or among the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination is made, any of their respective affiliates or associates and/or any others acting in concert with any of the foregoing (collectively, “proponent persons”); and

(8) a description of any agreement, arrangement or understanding (including without limitation any contract to purchase or sell, acquisition or grant of any option, right or warrant to purchase or sell, swap or other instrument) the intent or effect of which may be (i) to transfer to or from any proponent person, in whole or in part, any of the economic consequences of ownership of any security of ours; (ii) to increase or decrease the voting power of any proponent person with respect to shares of any class or series of our stock and/or (iii) to provide any proponent person, directly or indirectly, with the opportunity to profit or share in any profit derived from, or to otherwise benefit economically from, any increase or decrease in the value of any security of ours.

A stockholder proposing a nominee for the annual meeting must update and supplement the notice required by Article I, Section 12 of our Bylaws so that the information in the notice is true and correct as of the record date for the annual meeting and as of the date that is 15 days prior to the annual meeting or any adjournment or postponement thereof; such update and supplement shall be delivered in writing to the Corporate Secretary at our principal executive offices not later than five days after the record date for the meeting (in the case of any update and supplement required to be made as of the record date), and not later than 10 days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update and supplement required to be made as of 15 days prior to the meeting or any adjournment or postponement thereof). We may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of such proposed nominee to serve as a director. Any stockholder that intends to submit a nominee should read the entirety of the requirements in our Bylaws, particularly Article I, Section 12, which can be found under the “Corporate Governance” area within the “Investors” section of our website at http://investors.premierinc.com/corporate-governance/.

Evaluation of Candidates

The Nominating and Governance Committee will consider all candidates identified through the processes described above, and will evaluate each of them, including incumbents, based on the same criteria. The selection process involves rigorous vetting of both independent and non-independent director candidates by the Nominating and Governance Committee, the Chair of the Board and senior management to ensure the best qualified individuals are

 

 

 

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appointed to the Board. Ultimately, background and reference checks will be conducted, and the Committee will meet to finalize its list of recommended candidates for the Board’s consideration.

Director Independence

Review of Director Independence and Standards for Independence

On August 4, 2022, the Board of Directors undertook its review of the independence of its directors and director nominees as independent directors based on our Corporate Governance Guidelines. Independent directors must meet the standards of independence established by NASDAQ. The Board reviews annually the independence of each director, taking into consideration the recommendations of the Nominating and Governance Committee. Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as independent.

The Board of Directors assessed whether any director had a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of such director. In addition, the Board assessed whether any of the following relationships existed between us and the director or the director’s family members (i.e., spouse, parents, children and siblings or anyone residing in the director’s home) that would prohibit a finding of independence under NASDAQ rules:

 

•

at any time during the past three years was the director employed by us;

 

•

has the director or a family member of the director accepted any compensation from us in excess of $120,000 during any period of 12 consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for Board or Board committee service; (ii) compensation paid to a family member who is our employee (other than an executive officer) or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation;

 

•

does the director have a family member who is, or at any time during the past three years was, employed by us as an executive officer;

 

•

is the director or his or her family member a partner in, or a controlling stockholder or an executive officer of, any organization to which we made, or from which we received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in our securities or (ii) payments under non-discretionary charitable contribution matching programs;

 

•

is the director or his or her family member employed as an executive officer of another entity where at any time during the past three years any of our executive officers served on the compensation committee of such other entity; or

 

•

is the director or his or her family member a current partner of our outside auditor or was a partner or employee of our outside auditor who worked on our audit at any time during any of the past three years.

In addition to the analysis above, the Board considered the following in connection with its independence assessment of directors that have been historically classified as “member-directors”:

 

•

the fact that the directors historically classified as “member-directors” have met and do meet the NASDAQ independence definition;

 

•

the loss of our status as a “controlled company” under NASDAQ rules in July 2019;

 

•

the shift of the composition of the Board to a majority of non-member-directors in July 2020;

 

•

in connection with our corporate restructuring, the termination of the Voting Trust for our Class B common stock, previously held solely by member owners;

 

•

member owners no longer have the same type of control position with respect to us that might previously have been viewed in the past by the Board as interfering with the exercise of independent judgment by the member-directors;

 

 

 

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•

to our knowledge, no member owner holds a controlling interest in our common stock and no member owner or group of member owners has filed with the SEC a Schedule 13D with respect to the common stock; and

 

•

the advice of outside legal counsel regarding the Board’s ability to conclude that a member-director’s employment by a member owner should not, in and of itself, conclusively disqualify such director from classification as independent under NASDAQ rules.

In connection with this determination, on an annual basis, each director and executive officer is required to complete a questionnaire which requires disclosure of any transactions with us in which the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest. There were no such transactions indicated for fiscal year 2022.

Determination of Director Independence

Based on its review at the August 4, 2022 meeting, the Board of Directors affirmatively determined that each of John T. Bigalke, Helen M. Boudreau, Jody R. Davids, Peter S. Fine, Marc D. Miller, Marvin R. O’Quinn, Terry D. Shaw, Richard J. Statuto and Ellen C. Wolf is an independent director in accordance with NASDAQ rules and our Corporate Governance Guidelines. Mr. Alkire, who is our President and Chief Executive Officer, was not deemed to be independent under NASDAQ rules.

Each of our independent directors satisfies the definition of “independent director” contained in Rule 5605 of the NASDAQ listing standards. As a result of the review and determination above, the Board determined that:

 

•

each member of the Audit and Compliance Committee is an independent director under our Corporate Governance Guidelines and otherwise meets the qualifications for membership on such committee imposed by NASDAQ, the SEC and other applicable laws and regulations; and

 

•

each member of the Audit and Compliance Committee has accounting or related financial management expertise and is financially literate, and otherwise meets the audit committee membership requirements imposed by NASDAQ, our Corporate Governance Guidelines and other applicable laws and regulations; and that each of Mr. Bigalke, Mr. Fine and Ms. Wolf qualifies as an “audit committee financial expert” within the meaning of SEC regulations.

In addition, there are no arrangements or understandings known to us between any of the directors nominated for election to the Board of Directors and any other person pursuant to which a director was or is to be elected as a director or nominee, other than any arrangements or understandings with our directors or officers acting solely in their capacities as such. None of our directors, nominees or executive officers is a party to any material proceedings adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

Committees of the Board of Directors

Committee Memberships and Meetings

The Board reviews and determines the membership of our Board committees at least annually, with input from the Nominating and Governance Committee. Our Board of Directors has the following five standing committees, each of which is governed by a charter and reports its actions and recommendations to the Board of Directors: Audit and Compliance Committee, Compensation Committee, Nominating and Governance Committee, Finance Committee and Member Agreement Review Committee.

 

 

 

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The following table shows the number of meetings held in fiscal year 2022 and the current membership of each of the five Board committees.

 

Director		Audit and Compliance(1)		Compensation		Nominating and Governance		Finance		Member Agreement Review
Michael Alkire										●
John Bigalke		●						●
Helen Boudreau				●						C
Jody Davids		●				●
Peter Fine		●						C
Marc Miller				C				●
Marvin O’Quinn				●				●
Terry Shaw						●
Richard Statuto				●		C
Ellen Wolf		C								●
Number of Meetings		9		8		4		6		3

C Chair        ● Member

 

(1)	The Audit and Compliance Committee also oversees a Disclosure Committee that includes, among others, our General Counsel, Corporate Controller and Chief Ethics and Compliance Officer.

Board Committee Charters

As discussed in more detail in the descriptions of each of our Board committees below, each of our Board committees operates under a written charter adopted by the Board. The charters set forth the purpose, objectives and responsibilities of the respective committee and discuss matters such as committee membership requirements, number of meetings and the setting of meeting agendas. The charters are assessed periodically by the Nominating and Governance Committee and the respective committee and are updated by the Board as needed. The Board committee charters are available under the “Corporate Governance” area within the “Investors” section of our website at http://investors.premierinc.com/corporate-governance/. You may also request copies by contacting our Corporate Secretary at 13034 Ballantyne Corporate Place, Charlotte, North Carolina, 28277, or by calling 1-704-357-0022.

Audit and Compliance Committee

Our Audit and Compliance Committee is intended to meet the requirements of a separately designated standing audit committee as defined under Section 3(a)(58)(A) of the Exchange Act. The Audit and Compliance Committee must consist of at least three members of the Board, with each member satisfying the independence requirements for directors and audit committee members under NASDAQ rules and Rule 10A-3 of the Exchange Act. Each member of the Audit and Compliance Committee must be financially literate, and at least one member of the Audit and Compliance Committee must have past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background demonstrating financial management experience, as each such qualification is interpreted by the Board in its business judgment. In addition, to the extent practicable, at least one member of the Audit and Compliance Committee shall be an “audit committee financial expert” as such term is defined by the SEC.

The specific responsibilities of the Audit and Compliance Committee set forth under its charter are, among others, to:

 

•

review and discuss with management and the independent auditors the annual audited and quarterly financial statements and other related disclosure prior to filing our annual report on Form 10-K and quarterly reports on Form 10-Q, including our disclosures under Management’s Discussion and Analysis of Financial Condition and Results of Operations;

 

 

 

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•

Investigate, review and evaluate any potential “conflict of interest” (as defined below) and determine what action, if any, should be taken with respect to the matter. Regularly review and assess the effectiveness of the Board Conflict of Interest Policy and recommend any changes to the Board for approval. As used in this Charter, the term “conflicts of interest” refers to (a) any matter that the Board or management believes may involve the appearance or potential of a conflict of interest between Premier, Inc. or any of its affiliates and any officer or director of the Company or affiliate of an officer or director and (b) any material Related Party transaction (as such term is defined in the Board Conflict of Interest Policy), including transactions between the Company or any of its affiliates and any officer or director of the Company or affiliate officer or director of the Company;

 

•

review any significant issues regarding, or proposed changes to, our auditing and accounting principles and practices identified by the independent auditors, the internal auditors or management;

 

•

review financial and business risk exposures and the steps management has undertaken to monitor and control such exposures, including our procedures and any related policies with respect to risk assessment and risk management;

 

•

have responsibility for the appointment, compensation, retention, termination (when appropriate) and oversight of the work of the independent auditors and the internal auditors;

 

•

pre-approve all audit and permitted non-audit related services (including the fees and terms thereof) to be performed for us by our independent auditors, subject to the de minimis exception set forth in Section 10A(i)(1)(B) of the Exchange Act;

 

•

at least annually, review a report by our independent auditors regarding their internal quality control procedures, material issues raised by certain reviews, inquiries or investigations relating to independent audits within the last five years and relationships between the independent auditors and us;

 

•

consider at least annually the independence of the independent auditors, discussing with the independent auditors, if necessary, relationships identified in the auditors’ report, review the experience and qualifications of the lead partner each year and determine that all partner rotation requirements are executed;

 

•

discuss with management and the independent auditors, as appropriate, our earnings press releases and corporate policies with respect to the type and presentation of information to be included in earnings releases (paying particular attention to any use of “pro forma” or “adjusted” non-GAAP (as defined below) financial information) and our financial information and earnings guidance provided to investors, analysts and rating agencies;

 

•

receive reports from the independent auditors and management regarding, and review the adequacy and effectiveness of, our internal controls, including any significant deficiencies or material weaknesses in internal controls and significant changes in such controls reported to the committee by the independent auditors, the internal auditor or management, and any special audit steps adopted in light of material deficiencies; receive reports from management regarding, and review the adequacy and effectiveness of, our disclosure controls and procedures, including our policies and procedures to assess, monitor and manage business risk and other legal and ethical compliance programs;

 

•

receive and review reports from the independent auditors on: (i) our critical accounting policies and practices; (ii) material alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with our management, including the ramifications of the use of such alternative treatments and the disclosures or treatments preferred by the independent auditors, and (iii) other material written communications between the independent auditors and management;

 

•

establish procedures in coordination with our Chief Ethics and Compliance Officer, for the receipt, retention and treatment of complaints received by our directors, officers and employees regarding illicit or illegal business practices and conduct and establish a process for investigation and proper resolution of any issues so raised;

 

•

review and approve, in accordance with our Code of Conduct, all “related party transactions” requiring disclosure under SEC Regulation S-K, Item 404;

 

•

review with our General Counsel and independent auditors (i) legal matters that may have a material impact on our financial statements; (ii) any fraud involving our management or other employees who have a significant role in our internal controls; (iii) compliance policies and (iv) material reports or inquiries received from regulators or

 

 

 

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governmental agencies that raise material issues regarding our financial statements and accounting or compliance policies; and

 

•

advise the Board with respect to our policies and procedures for compliance with applicable laws and regulations, and in collaboration with our Chief Ethics and Compliance Officer, provide general oversight of our corporate ethics and compliance policies.

As noted above, the Audit and Compliance Committee also oversees our cyber risk management program, which is designed to monitor, mitigate and respond to cyber risks, threats and incidents and reviews periodic reports from the Company’s Chief Information Security Officer, including developments in cyber threat environment and cyber risk mitigation efforts.

The Audit and Compliance Committee has established a whistleblower policy to (i) facilitate reporting in good faith any complaint of inappropriate conduct and participation in the investigation of such complaint, (ii) encourage proper individual conduct, (iii) alert the Audit and Compliance Committee of potential issues before such inappropriate conduct has serious adverse consequences and (iv) instill protections for bringing such inappropriate conduct to our Company’s attention.

For additional information on the Audit and Compliance Committee’s role and its oversight of the independent auditors during fiscal year 2022, see “Report of the Audit and Compliance Committee.”

In connection with its duties, the Audit and Compliance Committee reviews and evaluates, at least annually, the performance of the committee and its members, may obtain the advice and assistance of outside advisors, including consultants and legal and accounting advisors, and performs all acts reasonably necessary to fulfill its responsibilities and achieve its objectives.

On August 5, 2021, the Board, based on the recommendation of the Audit and Compliance Committee and in order to reduce the complexity of the Board committee structure and enhance efficiency of Board meetings, terminated the Conflict Advisory Committee. The responsibilities of the Conflict Advisory Committee were merged into the Audit and Compliance Committee.

Compensation Committee

We have a separately standing Compensation Committee which has a charter requiring no fewer than three members, each of whom satisfies the independence requirement for directors under NASDAQ rules and qualifies as a “non-employee director” within the meaning of SEC Rule 16b-3 under the Exchange Act.

The Compensation Committee’s purpose and objectives are to discharge the Board’s responsibilities related to the compensation of our and our subsidiaries’ executive officers. The committee has overall responsibility for approving and evaluating all of our and our subsidiaries’ compensation plans, policies and programs as applicable to the executive officers.

The specific responsibilities of the Compensation Committee are, among others, to:

 

•

at least annually, review and approve the annual base salaries and annual incentive opportunities of the executive officers; and periodically and as and when appropriate, review and approve the following items as they affect the executive officers: (i) all other incentive awards and opportunities, including both cash-based and equity-based awards and opportunities; (ii) any employment agreements and severance arrangements; (iii) any change in control agreements and change in control provisions affecting any elements of compensation and benefits; and (iv) any special or supplemental compensation and benefits for the executive officers and individuals who formerly served as executive officers, including supplemental retirement benefits and perquisites provided to them during and after employment;

 

•

make recommendations to the Board with respect to the structure of overall incentive and equity-based plans and adopt, amend or terminate plans consistent with the approved structure;

 

•

take all permitted actions to administer and interpret our equity compensation plans and other long-term compensation plans and programs covering executive officers;

 

 

 

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•

review, approve and oversee all equity award granting practices, and the stock ownership guidelines for senior management and directors and monitor compliance with such guidelines;

 

•

review and recommend to the Board the compensation of the non-management directors from time to time;

 

•

review and discuss with management the Compensation Discussion and Analysis and related disclosures as may be required by the rules and regulations of the SEC;

 

•

determine annually whether any conflicts of interest exist on the part of any executive compensation consultants retained by the Committee, and if so, ensure disclosure of such conflicts, including the nature of the conflict and how it was addressed, in our proxy statement;

 

•

evaluate the outcome of the advisory vote of the stockholders regarding “say-on-pay” and make recommendations or take appropriate actions in response to such advisory vote;

 

•

oversee the evaluations of our senior management;

 

•

in conjunction with the Board, oversee the management development and succession planning process (including succession planning for emergencies) for the Chief Executive Officer and the Chief Executive Officer’s direct reports;

 

•

monitor our compliance with the requirements under the Sarbanes-Oxley Act of 2002 relating to loans to directors and officers, and with all other applicable laws affecting employee compensation and benefits;

 

•

review and assess risks arising from our compensation policies and practices; and

 

•

delegate authority to one or more subcommittees as it deems appropriate to carry out its responsibilities.

In connection with its duties, the Compensation Committee reviews and evaluates, at least annually, the performance of the Committee and its members, may obtain the advice and assistance of outside advisors, including consultants and legal and accounting advisors, and performs all acts reasonably necessary to fulfill its responsibilities and achieve its objectives. The Compensation Committee has the sole authority to set the compensation for, and to terminate the services of, its advisors. As discussed in further detail below under “Compensation Committee Report—Executive Compensation—Role of the Compensation Consultant,” the Compensation Committee directly engaged Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), to provide advice and recommendations to the Compensation Committee on the amount and form of executive officer and Board of Director compensation. The Compensation Committee has reviewed the services that Mercer provides to the Compensation Committee and otherwise to us and our management, as well as the services that each individual employee of Mercer provides to us. Based on this review, the Compensation Committee has determined Mercer has no conflict of interest in providing advisory services to us.

Nominating and Governance Committee

We have a separately standing Nominating and Governance Committee. The Nominating and Governance Committee must be comprised of three or more directors as determined by the Board, in accordance with all applicable rules, regulations and stock exchange requirements. Each member of the Nominating and Governance Committee must satisfy the independence requirements for directors under the NASDAQ rules.

The purpose of the Nominating and Governance Committee is to (i) assist the Board by identifying and nominating individuals qualified to become directors, consistent with criteria approved by the Board; (ii) take a leadership role in shaping the corporate governance of the Company; (iii) oversee the evaluation of the Board and management; (iv) recommend to the Board director nominees for each of the Board’s committees; and (v) oversee the Company’s environmental, social and governance (ESG) initiatives. The Nominating and Governance Committee has authority to retain and terminate search firms used to identify director candidates and to approve any such search firm’s fees and other retention terms.

The specific responsibilities of the Nominating and Governance Committee are, among others, to:

 

•

recommend the criteria and qualifications for membership on the Board;

 

•

identify, consider, recommend, recruit and select, or recommend that the Board select, candidates to fill open positions on the Board, including nominees recommended by stockholders;

 

 

 

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•

develop and periodically evaluate policies with regard to the consideration of director candidates recommended by stockholders;

 

•

oversight of the Company’s “ESG” initiatives;

 

•

establish a process for identifying and evaluating nominees for director;

 

•

conduct appropriate inquiries into the backgrounds and qualifications of possible candidates;

 

•

recommend director nominees for approval by the stockholders;

 

•

recommend director nominees for each of the Board’s committees;

 

•

review and recommend proposed changes to our Certificate of Incorporation and Bylaws;

 

•

oversee the Board committee charters and policies;

 

•

periodically review, revise, interpret and confirm compliance with the Corporate Governance Guidelines;

 

•

establish and maintain an ongoing succession planning process for directors, Board leaders and Board committee members;

 

•

recommend ways to enhance services to, and improve communications and relations with, stockholders;

 

•

oversee periodic self-evaluations by the Board of its performance;

 

•

evaluate the size, needs and effectiveness of the Board;

 

•

recommend improvements to our corporate governance;

 

•

oversee the Board orientation process for new directors and the development by the Chief Executive Officer of programs for continuing education for all directors;

 

•

monitor the functions of the various committees of the Board and conduct periodic reviews of their contributions;

 

•

conduct director self- and peer-assessments on a regular basis/interval and regularly review each independent director’s continuation on the Board through this process;

 

•

establish criteria for an annual performance evaluation of the Committee by the Board; and

 

•

participate in evaluating the performance of the Chief Executive Officer.

In connection with its duties, the Nominating and Governance Committee reviews and evaluates, at least annually, the performance of the Committee and its members, may obtain the advice and assistance of outside advisors, including consultants and legal and accounting advisors, and performs all acts reasonably necessary to fulfill its responsibilities and achieve its objectives.

Finance Committee

We have a separately standing Finance Committee. The Finance Committee must be comprised of at least three directors. The purpose of the Finance Committee is to assist the Board in its oversight of our financial condition, strategies and capital structure.

The specific responsibilities of the Finance Committee are, among others, to:

 

•

provide oversight of our financial affairs, including: (i) reviewing the financial condition of us and our subsidiaries and (ii) reviewing, advising and making recommendations to the Board regarding proposed operating budgets for us and our subsidiaries;

 

•

review our financial policies as they relate to the Committee’s responsibilities;

 

•

review and recommend annual limits for expenditures and borrowings;

 

•

review, recommend and monitor significant mergers, acquisitions, divestitures, joint ventures, minority investments and other debt and equity investments;

 

 

 

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•

review and recommend to the Board management’s recommendations to the Committee for significant capital expenditures, including for real estate, facilities and information technology;

 

•

review management’s plans and objectives for our capitalization, including (i) the structure and amount of equity and debt desired to meet our financing needs; (ii) anticipated sources and uses of cash and (iii) our target credit rating;

 

•

review and make recommendations to the Board regarding management’s recommendations to the Committee with respect to (i) new offerings of equity and debt securities, stock splits, credit agreements, including material changes thereto, and our investment policies; (ii) dividends declared by us and distributions by Premier LP; (iii) any authorization for repurchases of our stock and (iv) our Corporate Cash Investment Policy;

 

•

review with management our strategies for managing significant financial risks and contingent liabilities including the use of hedges, derivative instruments, insurance coverage and related costs and other similar risk management techniques; and

 

•

carry out such other activities within the scope of its primary purpose or as the Board may from time to time delegate to it.

The Finance Committee also reviews and evaluates, at least annually, the performance of the Committee and its members. In connection with its duties, the Finance Committee may obtain the advice and assistance of outside advisors, including consultants and legal and accounting advisors, and perform all acts reasonably necessary to fulfill its responsibilities and achieve its objectives.

Member Agreement Review Committee

We have a separately standing Member Agreement Review Committee. The Member Agreement Review Committee must be comprised of at least three directors including the Chief Executive Officer. The purpose of the Member Agreement Review Committee is to review and provide feedback to our management with respect to non-ordinary course transactions between us or our subsidiaries and our members, particularly entering into member agreements that provide for “savings guarantees” or “fees at risk.” “Savings guarantee” means an arrangement in which we or our subsidiary agree to identify and/or implement a specific amount of savings for a customer and will pay cash for any shortfall. “Fees at risk” means a consulting arrangement in which we agree to identify and/or implement a certain amount of savings and will have our consulting fees reduced on a proportionate basis or will continue to provide consulting resources at no charge to the customer in the event that such savings are not achieved (until such savings are achieved).

The specific responsibilities of the Member Agreement Review Committee are, among others, to:

 

•

assess risks in connection with agreements entered into with members;

 

•

review the status of risk-based agreements on a periodic basis;

 

•

review and address the outcome of significant risk-based proposals; and

 

•

together with the full Board, approve any increase to the aggregate permitted level of risk for management to enter into an agreement that would cause the then-current permitted level of risk to be exceeded.

The Member Agreement Review Committee also reviews and evaluates, at least annually, the performance of the Committee and its members. In connection with its duties, the Member Agreement Review Committee may obtain the advice and assistance of outside advisors, including consultants and legal and accounting advisors, and perform all acts reasonably necessary to fulfill its responsibilities and achieve its objectives.

 

 

 

36		2022 Proxy Statement

 

COMPENSATION OF DIRECTORS

Fiscal 2022 Directors’ Compensation Policy

Our Board has approved and we maintain a Directors’ Compensation Policy to provide an incentive to attract and retain the services of qualified persons to serve as directors. The policy applies to each director who is not an employee of, or compensated consultant to, us or any of our affiliates (“non-employee director”). The policy is designed to achieve the following key objectives:

 

•

align the interests of the non-employee directors and stockholders;

 

•

support overall organizational objectives and encourage the creation of stockholder value;

 

•

attract and retain high quality talent;

 

•

reflect the broad spectrum of talent and diverse sources of market data;

 

•

target median competitive pay levels, as evaluated no less frequently than every three years; and

 

•

be simple to understand and administer.

The Compensation Committee and the Board review the policy from time to time to assess whether any adjustments to the type and amount of director compensation should be made in order to fulfill the objectives of the policy. The Board, based on the recommendation of the Compensation Committee, approved the Directors’ Compensation Policy in June 2019. The Compensation Committee’s recommendation was based upon market analysis of director compensation levels and practices generally and within the Company’s peer group conducted by and discussed with the Compensation Committee’s independent compensation consultant. The Directors’ Compensation Policy was amended in January 2020 to provide compensation to the Board’s then newly established Lead Independent Director.

Under our 2013 Equity Incentive Plan, annual cash fees (including cash retainers and meeting fees) that may be earned and equity compensation that may be granted during a calendar year cannot exceed $500,000.

For fiscal year 2022, the following table sets forth the compensation elements and levels for non-employee directors and reflects the compensation for the enhanced responsibilities and time commitment associated with the positions.

 

		Compensation Element		Compensation Amount
Annual Retainer		Cash Retainer			$80,000
		Equity Retainer (or Cash Award, if applicable)(1)(2)			$155,000/$125,000
Additional Retainer Fees		Board Chair			$60,000
		Lead Independent Director			$30,000
		Committees		Chair				Member
		Audit and Compliance Committee		$	30,000			$	15,000
		Compensation Committee		$	30,000			$	15,000
		Nominating and Governance Committee		$	15,000			$	7,500
		Member Agreement Review Committee		$	15,000			$	7,500
		Finance Committee		$	15,000			$	7,500
		Conflict Advisory Committee(3)		$	15,000			$	7,500
		Short-term Ad Hoc Committee		$	10,000			$	5,000
Other		Charitable Contribution			$1,000

 

(1)

Each non-employee director will receive an annual equity award of restricted stock units valued at $155,000, with the exception of any director whose employer prohibits the receipt by such individual of equity-based awards from Premier. Non-employee directors prohibited from receiving equity-based compensation will receive an annual cash award of $125,000 in lieu of the annual equity award.

 

 

 

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COMPENSATION OF DIRECTORS

 

(2)

The grant date of the annual equity award, and the annual cash award for directors who are prohibited from receiving equity, is the earlier of the first business day following the annual stockholders meeting or December 15. The annual equity award, and any annual cash award granted in lieu of the annual equity award, will vest in full one year after the grant date and immediately upon a change in control.

(3)	The Conflict Advisory Committee was terminated on August 5, 2021, and its responsibilities were merged into the Audit and Compliance Committee.

Directors who are also our employees do not receive cash or equity compensation for service on the Board in addition to compensation payable for their service as employees of the Company.

Fiscal 2022 Components of Director Compensation

Cash Retainer and Fees—The amounts in the “Fees Earned or Paid in Cash” column under the Fiscal Year 2022 Director Compensation Table below are cash retainers earned for serving on our Board, as its Chair or Lead Independent Director, and on its committees and as committee Chairs during fiscal year 2022. All annual retainers are paid quarterly. Each outside director receives his or her cash compensation after first being elected or appointed to the Board on a pro-rated basis for the number of days during which he or she provides service. If an outside director dies, resigns or is removed during any quarter, he or she shall be entitled to a cash payment on a pro-rated basis through his or her last day of service.

Equity or Cash Awards—On December 6, 2021, each non-employee director then serving on the Board received an award of “restricted stock units (RSUs)” with a grant date fair value, computed in accordance with FASB Accounting Standards Codification, Compensation—Stock Compensation (Topic 718), of $155,027, with the exception of any non-employee director whose employer prohibited the receipt by such individual of equity-based awards from Premier. If a director provides a written certification stating that he or she is prohibited by his or her employer from receiving equity-based compensation from Premier, then such director will receive an annual cash award of $125,000 in lieu of the annual equity award. With respect to equity grants, grant date fair value assumptions are consistent with those disclosed in Note 14—Stock-Based Compensation to our Consolidated Financial Statements in our 2022 Form 10-K. In fiscal year 2022, each non-employee director, except Mr. Shaw, was awarded 4,098 RSUs, with a grant date fair market value of $37.83 per share based on the closing price of our common stock on the award date, December 6, 2021. Mr. Shaw received a cash award of $125,000. Each annual equity award, and each annual cash award granted in lieu of the annual equity award, will vest one full year after the grant date. Directors who begin their service mid-year will receive a pro-rated equity or cash award, which will also vest one full year after the grant date, as applicable.

Expense Reimbursement—Each non-employee director will be reimbursed for his or her reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board and its committees or in connection with other business related to the Board. Each non-employee director will also be reimbursed for his or her reasonable out-of-pocket business expenses authorized by the Board or one of its committees that are incurred in connection with attendance at meetings with our management.

Additional Services—On occasion, short-term ad hoc committees may be formed to address a particular oversight need. In the event that an ad-hoc committee is formed, the committee Chair shall be paid an annual retainer of $10,000 and committee members shall be paid a member retainer of $5,000. The Board has the authority to provide additional compensation to directors for ad hoc requests that require a substantial amount of time and/or work.

All Other Compensation—Each director is entitled annually to direct an amount of $1,000 to his or her selected not-for-profit organization during the holiday season. No compensation or benefits other than those described above are payable to any directors for Board service.

Director Education

We believe that we and our stockholders are best served by a Board of Directors comprised of individuals who are well versed in modern principles and “best practices” of corporate governance and other subject matters relevant to board service, including matters related to the healthcare industry, and who thoroughly comprehend the role and responsibilities of board membership. Under our Corporate Governance Guidelines, we provide both internal and external educational opportunities and association memberships for our directors. To encourage continuing director

 

 

 

38		2022 Proxy Statement

COMPENSATION OF DIRECTORS

 

education, we reimburse directors up to $7,500 annually for attending U.S.-based director education programs. Amounts reimbursed include all reasonable costs associated with attending each program, including travel, lodging and meals. Directors serving on multiple boards are encouraged to obtain pro rata reimbursement of their director education expenses from each company that they serve, but we will nonetheless reimburse 100% of the costs if this is not practicable.

Director Stock Ownership Guidelines

Our stock ownership guidelines require our non-employee directors to hold our common stock equal in value to at least three times the annual cash retainer. The non-employee directors are expected to meet the stock ownership guideline level within five years after receipt of their first equity-based award for service to the Board and to continuously own sufficient shares to satisfy the guideline level once attained for as long they remain a member of the Board. If a director provides us with a written certification stating that he or she is prohibited by his or her employer from receiving equity-based compensation from Premier, then such director will not receive equity-based awards from us and, accordingly, will not be subject to the stock ownership guidelines. As of June 30, 2022, each director who is subject to the stock ownership guidelines was in compliance with his or her stock ownership requirements.

Fiscal Year 2022 Director Compensation Table

Compensation in the table below reflects amounts earned in fiscal year 2022 by our non-employee directors serving on our Board for all or a portion of fiscal year 2022. Mr. Alkire, the only director who was an employee during Fiscal 2022, received no additional compensation for serving on the Board.

 

Name		Fees Earned or Paid in Cash ($) (1)					Stock Awards ($) (2)					Cash Awards Under Directors’ Compensation Policy ($) (3)					All Other Compensation ($) (4)					Total
John T. Bigalke				$103,764					$155,027					$0					$4,386					$263,177
Helen M. Boudreau				$109,511					$155,027					$0					$5,290					$269,828
Jody R. Davids				$114,266					$155,027					$0					$4,386					$273,679
Peter S. Fine				$109,008					$155,027					$0					$4,386					$268,421
Marc D. Miller				$113,981					$155,027					$0					$4,386					$273,394
Marvin R. O’Quinn				$99,973					$155,027					$0					$4,386					$259,386
Terry D. Shaw				$148,505					$0					$125,000					$1,000					$274,505
Richard J. Statuto				$111,902					$155,027					$0					$4,386					$271,315
Ellen C. Wolf				$122,799					$155,027					$0					$4,386					$282,212

 

(1)	The amounts reflected in this column are cash retainers earned for service as a director for fiscal year 2022, regardless of when such fees are paid.

(2)

Unless otherwise noted or as stated in note 3 below, each non-employee director received an annual award of 4,098 “RSUs” with a grant date fair value, computed in accordance with FASB Accounting Standards Codification, Compensation—Stock Compensation (Topic 718), of $155,027. The grant date fair value is based on the closing price for our common stock on the award date, December 6, 2021, of $37.83. Grant date fair value assumptions are consistent with those disclosed in Note 14—Stock-Based Compensation to our Consolidated Financial Statements in our 2022 Form 10-K. RSU grants fully vest on the first anniversary of the grant date. A total of 32,784 unvested RSUs granted to non-employee directors were outstanding as of June 30, 2022.

(3)

Cash awards are made pursuant to the Directors’ Compensation Policy and are not made under 2013 Equity Incentive Plan. Mr. Shaw provided a written certification stating that he was prohibited by his employer from receiving equity-based compensation from Premier and accordingly, he received an annual cash award of $125,000 in lieu of the annual equity award.

(4)

All Other Compensation includes (i) dividend equivalents paid for RSUs granted in December 2020 and vested in December 2021; (ii) dividend equivalents accrued during fiscal year 2022 for RSUs granted in December 2021; and (iii) a $1,000 contribution to be made to the charity of choice for each member of the Board of Directors. Charitable contributions are generally made annually in December.

 

 

 

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