U S PHYSICAL THERAPY INC /NV 8-K

What Happened
U.S. Physical Therapy (USPH) filed an 8‑K reporting that its Compensation Committee adopted new 2026 incentive programs for senior management, effective March 9, 2026. Named participants include CEO Christopher Reading, President & COO—East Eric Williams, COO—West Graham Reeve, and EVP/General Counsel Rick Binstein. The plans include (1) an Objective Long‑Term Incentive Plan (Objective LTIP) tied to 2026 Adjusted EBITDA, (2) a Discretionary LTIP, (3) an Objective cash/RSA Bonus Plan tied to Adjusted EBITDA, and (4) a Discretionary Cash/RSA Bonus Plan based on individual goals. LTIP RSU grants are expected to be made in Q1 2027 and vest quarterly over 16 quarters beginning May 20, 2027.

Key Details

• Effective date: March 9, 2026; LTIP grants expected in Q1 2027.
• Objective LTIP target RSUs: CEO 12,752; President 5,613; COO‑West 5,080; EVP 4,314. Maximum up to 150% of target.
• Discretionary LTIP maximum RSUs: CEO up to 19,128; President 8,419; COO‑West 7,619; EVP up to 6,473.
• Vesting: RSUs vest in equal quarterly installments over 16 quarters (May 20, 2027 → final vesting March 6, 2030). Dividend equivalents accrue and are paid in cash when units vest. Qualified Retirement (age >65 with ≥8 years’ service and ≥9 months’ notice) may accelerate vesting; vested units paid six months after termination.
• Objective Bonus: Cash or Restricted Stock Awards (RSA) up to 100% of the CEO’s 2026 base salary and up to 75% for the other named executives, paid/awarded by March 15, 2027 if Adjusted EBITDA goals are met.
• Discretionary Bonus: Up to 50% of a participant’s 2026 base salary, awarded as cash or RSAs at the Committee’s discretion.
• Employment condition: Executives must remain employed through the applicable grant date for LTIPs and through December 31, 2026 for the cash/RSA bonuses.
• Performance metric: Objective plans use Adjusted EBITDA (net income before interest, taxes, depreciation & amortization, certain revaluation/impairment items, equity‑based comp expense, and related non‑controlling interest adjustments).

Why It Matters
These actions set the pay‑for‑performance and retention framework for USPH’s top executives for 2026. Investors should note the use of Adjusted EBITDA as the primary performance metric for objective awards, the material potential equity dilution from RSU awards (with specified target and maximum grant sizes), and the multi‑year vesting schedule that links potential payouts to future service and company performance. The Committee retains discretion over discretionary awards and final grant sizing, and bonuses/awards will only be paid if conditions (including continued employment) are satisfied.