Health Catalyst Inc

This advisory proposal asks stockholders to approve, on a non-binding basis, the Company’s executive compensation program as disclosed in the proxy statement, including the Compensation Discussion and Analysis, compensation tables, and narrative disclosures. Management is seeking this vote to obtain stockholder feedback on pay-for-performance alignment and the structure of base salary, annual incentive PRSUs/bonuses, and long-term RSU and PRSU awards that constitute a large portion of NEO pay. The Company’s compensation program emphasizes variable pay tied to short-term corporate metrics (including client measures and Adjusted EBITDA) and multi-year PRSU metrics (TSR, revenue growth, and Adjusted EBITDA margin) to align executive incentives with stockholder interests. The board and compensation committee recommend a “FOR” vote, citing that the program promotes retention, aligns with the peer group benchmarking performed with Aon, and ties a majority of target pay to performance and equity. Key contextual factors include 2025 performance (net new Platform Clients, revenue modestly up, Adjusted EBITDA improvement, but a large GAAP net loss due largely to goodwill impairment) and prior strong stockholder support for say-on-pay in 2025 (approx. 98% support). Because the vote is advisory, it will not change contractual pay arrangements directly, but the board and compensation committee state they will consider the outcome when making future compensation decisions. Risks and potential criticisms include the high proportion of pay tied to equity and multi-year market-based metrics which can decouple realized pay from short-term operating results, and the use of non-GAAP measures (Adjusted EBITDA) as a primary performance metric. For a sophisticated analyst, evaluation should weigh the program’s multi-year alignment mechanisms, the specifics of threshold/target/stretch levels and caps, the board’s responsiveness to previous stockholder feedback, and whether disclosed severance/change-in-control protections meaningfully affect incentives.

This proposal asks stockholders to approve a Restated Charter to phase out the Company’s classified board and transition to annual director elections beginning with directors elected at or after the 2029 annual meeting. Management seeks shareholder approval to implement a multi-year declassification plan that preserves incumbent terms while converting the board to annual elections over a three-year schedule; the Restated Charter does not shorten any existing director’s term. The board initiated this process after a prior advisory, non-binding declassification vote in 2025 in which stockholders overwhelmingly expressed support, and it points to engagement with stockholders as part of its rationale. The change affects governance and shareholder power: declassification generally increases board accountability and makes it easier for stockholders to effect board turnover in response to performance or governance concerns. The Restated Charter also modifies removal provisions and preserves a supermajority (66 2/3%) requirement to amend certain charter provisions, which maintains some entrenchment protections while implementing annual elections. Voting for the proposal requires a supermajority of outstanding shares (66 2/3%) and abstentions or broker non-votes count as votes against, so passage requires broad support. For analysts, the assessment should balance improved accountability from annual elections against the continued presence of protective charter provisions and the board’s stated intent to phase the structure out gradually to avoid disrupting governance continuity. The board’s recommendation and prior stockholder advisory support reduce the likelihood of major opposition, but evaluation should consider whether the residual supermajority and removal provisions sufficiently limit stockholder influence post-declassification and whether the phased approach aligns with long-term succession and strategic planning.