AMN 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS Components of Our Compensation Program In line with our core value of continuous improvement, we (1) listen to our shareholders, (2) review the latest trends in executive compensation practices, (3) evaluate whether certain pay practices are viewed with disfavor by shareholders or proxy advisory services and (4) review our pay practices to ensure that we have designed and implemented compensation programs that we believe will create value for our shareholders with a balance of short- and long-term incentives. The principal components of our executive compensation program include: (1) base salary, (2) short-term or annual performance awards in the form of cash bonuses, (3) long-term incentive awards, (4) a non-qualified deferred compensation plan as well as benefits generally available to all of our employees, and (5) for our CEO, an employment agreement with severance provisions and, for our other named executive officers, severance arrangements. BASE SALARY Base salary serves as the first component of our executive compensation program. In setting base salaries, the Compensation Committee considers a number of factors, including: (1) the market salary for similarly situated executives within our peer group and other companies of similar revenue size and market capitalization, (2) our operational and financial performance, (3) our stock performance, (4) individual performance, skills, knowledge, tenure, experience and responsibilities, and (5) for those who report to her, the recommendations of our CEO. We manage salary changes to fall within our annual budget. We evaluate our operational and financial performance in light of our annual internal objectives and our annual operating plan, the healthcare staffing industry performance and peer benchmarking data. We evaluate our stock performance against our peer group and the Russell 2000 Index. Our CEO bases her recommendations on the same factors the Compensation Committee considers, and her recommendations are particularly helpful for the Compensation Committee to evaluate the other executive officers’ performance, knowledge, skills, experience and responsibilities. CASH INCENTIVE PERFORMANCE BONUS Annual cash performance bonus opportunities serve as the second component of our executive compensation program. The Bonus Plan is the mechanism by which the Compensation Committee provides such opportunities. We intend our Bonus Plan to provide a strong incentive for our officers to achieve annual financial objectives that support our strategic objectives. Although certain details of the annual bonus incentive may change from year to year based upon the Compensation Committee’s focus, a few key components comprise its general structure, including specific financial goals based on our annual operating plan. The metrics typically include such financial measures as consolidated revenue and consolidated AEBITDA. The Compensation Committee sets threshold, “target” (i.e., 100%) and maximum amounts for bonuses and a weight for each metric that corresponds to the level of achievement we require to trigger a threshold, target or maximum bonus for the named executive officer under such metric. The AMN HEALTHCARE SERVICES, INC. ⎪ 2018 Proxy Statement 37