hstm-def14a_20210520.htm

DEF 14A 1 hstm-def14a_20210520.htm DEF 14A hstm-def14a_20210520.htm

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 (Amendment No. )

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[ ]	Definitive Additional Materials

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HEALTHSTREAM, 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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HEALTHSTREAM, INC.

500 11^THAvenue North, Suite 1000

Nashville, Tennessee 37203

(615) 301-3100

NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS

To Be Held May 20, 2021

Dear Shareholder:

On Thursday, May 20, 2021, HealthStream, Inc. will hold its 2021 Annual Meeting of Shareholders. Due to public health concerns regarding the coronavirus pandemic and to assist in protecting the health and well-being of our shareholders and employees, the meeting will be held virtually via the Internet, with no physical in-person meeting. Shareholders of record and holders of shares in “street name,” in each case as of March 29, 2021, will be able to listen, vote and submit questions, regardless of location, via the Internet by following the procedures set forth below in this proxy statement below under “How Do I Attend the Annual Meeting?”. The meeting webcast will begin at 2:00 p.m., Central Daylight Time on May 20, 2021 and we encourage you to access the meeting prior to the start time.

At this meeting, we will consider the following proposals:

to elect the two (2) persons nominated by the Board of Directors identified in this proxy statement as Class III directors to hold office for a term of three (3) years and until their respective successors have been duly elected and qualified;

to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021;

to approve, on an advisory basis, the compensation of the Company’s named executive officers as described in the Company’s proxy statement that accompanies this notice; and

to transact such other business as may properly come before the meeting.

In reliance on SEC rules which allow issuers to make proxy materials available to shareholders on the Internet, we are mailing our shareholders a notice instead of paper copies of our proxy statement and our annual report. The notice contains instructions on how to access those documents on the Internet. The notice also contains instructions on how shareholders can receive a paper copy of our proxy materials, including the proxy statement, our 2020 annual report, and a form of proxy card.

Whether or not you plan to attend the virtual meeting, we request that you vote as soon as possible.

By the Order of the Board of Directors,



Nashville, Tennessee		Robert A. Frist, Jr.
April 6, 2021		Chief Executive Officer and Chairman of the Board

PROXY STATEMENT

TABLE OF CONTENTS

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors9

Board Meetings and Committees12

Executive Sessions14

Independent Directors14

Skills Assessment and Board Evaluation Process15

Leadership Structure15

Lead Independent Director15

Risk Oversight16

Nominating Committee Process and Board Diversity17

Limitations on Other Board Service17

Communication with the Board18

Certain Relationships and Related Transactions18

Compensation Committee Interlocks19

Code of Conduct20

Code of Ethics for Executive Officers and Directors20

Succession Planning20

Director Orientation20

Strategic Planning20

Recoupment Policy20

Anti-Hedging Policy21

Director Compensation21

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis25

Grants of Plan-Based Awards – Fiscal Year 202037

Outstanding Equity Awards at 2020 Fiscal Year End38

Equity Compensation Plan Information39

Potential Payments Upon Termination or Change-in-Control40

CEO Pay Ratio42

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AUDIT COMMITTEE REPORT FOR 2020

PROPOSAL ONE - ELECTION OF DIRECTORS

PROPOSAL TWO - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PROPOSAL THREE - ADVISORY VOTE ON EXECUTIVE COMPENSATION

NON-GAAP FINANCIAL MEASURE INFORMATION AND Reconciliation

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 20, 2021: The Company’s Proxy Statement, Proxy Card, and 2020 Annual Report to Shareholders are available to registered and beneficial shareholders at http://www.edocumentview.com/HSTM. This notice is not a form for voting and presents only an overview of the more complete proxy materials, which contain important information. We encourage all shareholders to access and review the proxy materials before voting.

These materials were made available to shareholders on April 9, 2021.

What is the Purpose of the Annual Meeting?

At HealthStream’s Annual Meeting, shareholders will act upon (i) the election of two (2) persons nominated by the Board of Directors (the “Board”) and identified in this proxy statement as Class III directors, (ii) the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, (iii) the approval, on an advisory basis, of the compensation of the Company’s named executive officers under applicable SEC rules (the “Named Executive Officers”) as described in this proxy statement, and (iv) any other matters that may properly come before the meeting. The Annual Meeting will be held on May 20, 2021 and will begin at 2:00 p.m., Central Daylight Time.

What are the Board’s Recommendations?

Our Board recommends that you vote:

•

FOR the election of each of the nominees set forth in this proxy statement to serve as Class III directors on our Board;

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FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm; and

•

FOR the approval, on an advisory basis, of the compensation of the Company’s Named Executive Officers as described in this proxy statement.

What Happens if I Do Not Give Specific Voting Instructions?

Shareholders of Record. If you are a shareholder of record (that is, if you hold your shares in your own name with our transfer agent) and you:

•

Indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or

•

Sign and return a proxy card without giving specific voting instructions,

then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement.

Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in “street name” (that is, if you hold your shares through a broker, bank, or other nominee), you have the right to direct your broker, bank, or other nominee how to vote your shares, and will receive materials and voting instructions from any such nominee with respect to voting your shares. New York Stock Exchange (“NYSE”) Rule 452 (“Rule 452”) provides that brokers, banks and other nominees may not exercise their voting discretion on specified non-routine matters without receiving instructions from the beneficial owner of the shares. Because Rule 452 applies specifically to securities brokers, virtually all of whom are governed by NYSE rules, Rule 452 applies to all companies listed on a national stock exchange including companies (such as the Company) listed on the Nasdaq Stock Market. Therefore, since proposal one (the election of directors) and proposal three (the non-binding advisory vote on executive compensation) are not considered routine under Rule 452, if you do not issue instructions to your broker, bank or other nominee with respect to these proposals, your broker, bank or other nominee will not be allowed to exercise its voting discretion, and will return a proxy card with no vote (the “non-vote”), with respect to these proposals Broker non-votes will not impact the outcome of proposals one or three. For proposal two, the ratification of the independent registered public accounting firm, absent receiving instructions from you, your broker may vote your shares its discretion on your behalf. If you are shares are held in street name and you do not give your broker, bank or other nominee instructions on how to vote, your shares will still be counted toward the quorum requirement for the Annual Meeting provided that your broker, bank or other nominee votes your shares utilizing its discretionary authority for proposal two as noted above.

How Do I Attend the Annual Meeting?

As the result of public health concerns arising from the COVID-19 pandemic, our Annual Meeting will be held on a virtual basis, meaning that you attend the Annual Meeting via the internet. Shareholders of record, and holders of shares in street name, in each case as of March 29, 2021, may attend the virtual meeting by following the instructions set forth below.

Shareholders of Record. In order to attend the Annual Meeting, shareholders of record must have the information that is printed on their notice or proxy card. Shareholders of record may attend the virtual meeting by logging in at www.meetingcenter.io/224613535 and providing the applicable information set forth on their notice or proxy card along with the password for the Annual Meeting (HSTM2021).

Street Name Holders. In order to attend the Annual Meeting, holders of shares in street name will need to register to attend in advance. To register to attend the Annual Meeting, street name holders must (i) follow the procedures provided by their broker, bank, or other nominee that holds their shares for obtaining a legal proxy; and (ii) register with Computershare by submitting proof of such holder’s legal proxy reflecting such holder’s HealthStream holdings, along with such holder’s name and email address, to Computershare. Requests for registration must be labeled as “Legal Proxy” and must be received no later than 2:00 p.m., Central Daylight Time, on May 17, 2021. Street name holders will receive a confirmation of their registration by e-mail after Computershare has received their registration materials.

Requests for registration should be directed to Computershare by either e-mail or mail as follows:

By e-mail:

Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com

By mail:

Computershare

HealthStream, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

After a street name holder has received confirmation of registration, the street name holder may participate in the meeting by logging in at www.meetingcenter.io/224613535 and entering the control number provided with the confirmation of registration, along with the password for the Annual Meeting (HSTM2021).

Shareholder Questions. We intend to answer questions pertinent to company matters in accordance with our rules of conduct and procedures as time allows during the Annual Meeting. Questions may be submitted over the internet prior to or during the Annual Meeting by holders of record and holders of shares in street name participating in the Annual Meeting on a virtual basis who have logged in to the annual meeting page at www.meetingcenter.io/224613535 and have followed the instructions on such webpage for submitting a question. In order to allow maximum participation, we will limit each holder to one question. If any question submitted by a holder of record or holder in street name is not addressed at the Annual Meeting, such stockholder or holder in street name may contact the Company’s Investor Relations department following the Annual Meeting at 500 11^th Avenue North, Suite 1000, Nashville, Tennessee 37203 or by contacting us at (615) 301-3237 or at ir@healthstream.com.

Other Information. The meeting webcast will begin at 2:00 p.m., Central Daylight Time on May 20, 2021, and we encourage you to access the meeting prior to the start time. Rules of conduct and procedures for the Annual Meeting will be available on the website set forth above once you access the meeting.

If you have difficulty accessing the meeting or have other technical difficulties, please call the technical support number that will be posted on the Annual Meeting log-in page at www.meetingcenter.io/224613535.

For information regarding voting at the Annual Meeting (as well as other methods of voting), see below under “How Do I Vote?”

Who is Entitled to Vote at the Annual Meeting?

The Board has fixed the close of business on Monday, March 29, 2021 as the record date. Shareholders of record of our common stock at the close of business on March 29, 2021 may vote at this meeting.

As of the record date, there were 31,548,860 shares of our voting common stock outstanding. These shares were held by approximately 9,432 record holders. Every shareholder is entitled to one vote for each share of common stock the shareholder held of record on the record date.

Who is Soliciting My Vote?

This proxy solicitation is being made and paid for by HealthStream. In addition, we have retained Computershare and Georgeson Shareholder Communications to assist in the solicitation. We will pay these entities an aggregate of approximately $4,625 plus out-of-pocket expenses for their assistance in connection with the solicitation. Our directors, officers and other employees not specially employed for this purpose may also assist in the solicitation of proxies. They will not be paid additional remuneration for their efforts. We will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of the common stock that the brokers and fiduciaries hold of record. We will reimburse them for their reasonable out-of-pocket expenses.

On What Matters May I Vote?

You may vote on (i) the election of the two (2) persons nominated by the Board and identified in this proxy statement to serve as Class III directors of our Board, (ii) the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, (iii) the approval, on an advisory basis, of the compensation of the Company’s Named Executive Officers as described in this proxy statement, and (iv) any other matters that may properly come before the meeting.

Why Did I Receive a One-Page Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?

Pursuant to rules adopted by the SEC, the Company has elected to provide access to its proxy materials via the Internet. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Material

SEC Form DEF 14A filed by HealthStream, Inc.