Encompass Health Bundle
Who Really Controls Encompass Health?
Understanding the Encompass Health SWOT Analysis is just the beginning; the true power dynamics lie in its ownership structure. From its humble beginnings as Amcare, Inc., to its current status as a healthcare giant, Encompass Health's journey is a testament to strategic shifts and evolving stakeholder influence. Knowing who owns Encompass Health is key to understanding its future trajectory and the forces shaping its decisions.
This deep dive into Encompass Health ownership reveals more than just a list of shareholders; it uncovers the motivations and strategies driving this major player in the healthcare sector. We'll explore the Encompass Health parent company, its significant shareholders, and the impact of its leadership team on the company's direction. Analyzing the Encompass Health stock and its history provides crucial insights for investors and anyone interested in the company's financial information and future prospects, including its recent acquisitions and the influence of its board of directors.
Who Founded Encompass Health?
The story of Encompass Health, initially known as Amcare, Inc., began on February 22, 1984, in Birmingham, Alabama. The company was the brainchild of Richard M. Scrushy, who, along with four co-founders, set out to capitalize on the growing demand for physical therapy and the cost-effectiveness of outpatient services. This marked the beginning of what would become a major player in the healthcare industry.
Richard M. Scrushy, who had the original idea in 1983 while at Lifemark Corporation, took on the roles of chairman and CEO, guiding the company through its early years. The other co-founders took on administrative positions. The early focus was on establishing outpatient facilities, with the first one opening in Little Rock, Arkansas, in early 1984, followed by another in Birmingham later that year.
In 1985, the company rebranded to HealthSouth Rehabilitation Corporation to better position itself in the healthcare market. A significant step in its early growth was the purchase of its first inpatient rehabilitation hospital in early 1986. This was quickly followed by an initial public offering (IPO) on the Nasdaq exchange later that same year in August, under the ticker symbol HSRC. By September 1988, the company moved to the New York Stock Exchange, listed under the symbol HRC. The exact equity split among the founders at inception is not publicly detailed, but Scrushy's leadership as chairman and CEO suggests a significant controlling interest.
Founding and Early Operations
Encompass Health, originally Amcare, Inc., was founded in 1984 by Richard M. Scrushy and four co-founders. The first outpatient facility opened in Little Rock, Arkansas, in early 1984.
Initial Public Offering (IPO)
The company went public in 1986 on the Nasdaq under the ticker symbol HSRC, later moving to the NYSE under HRC in 1988.
Early Growth and Expansion
Early growth was driven by opening new facilities and small acquisitions. By 1992, the company had 50 facilities across the U.S.
Leadership
Richard M. Scrushy served as chairman and CEO until 2003, playing a pivotal role in the company's early development.
Rebranding
In 1985, Amcare, Inc. rebranded to HealthSouth Rehabilitation Corporation to better reflect its healthcare market focus.
Early Acquisitions
The acquisition of its first inpatient rehabilitation hospital in early 1986 was a key step in HealthSouth's expansion strategy.
Key Takeaways on Encompass Health Ownership
Understanding the early history of Brief History of Encompass Health is crucial for assessing its current structure. The founders, led by Richard Scrushy, established the company to address the growing need for physical therapy services. The initial public offering in 1986 and the subsequent listing on the NYSE were major milestones, setting the stage for future growth. The early focus on outpatient facilities and strategic acquisitions, including the first inpatient rehabilitation hospital, shaped the company's trajectory. As of late 2024, the company continues to operate as a public entity.
- The company's early success was driven by a focus on outpatient services and strategic acquisitions.
- The IPO in 1986 and the move to the NYSE in 1988 were significant for the company's growth.
- The leadership of Richard Scrushy was critical in the early years, guiding the company's expansion.
- The company's early focus on outpatient facilities and strategic acquisitions, including the first inpatient rehabilitation hospital, shaped the company's trajectory.
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How Has Encompass Health’s Ownership Changed Over Time?
The ownership structure of Encompass Health has seen several key transformations since its inception. Initially known as HealthSouth, the company went public in 1986 and later listed on the NYSE in 1988. A major expansion occurred through acquisitions, including significant purchases in the early 1990s. The early 2000s brought about a major shift due to an accounting scandal, which led to changes in leadership and a subsequent turnaround. Further strategic moves included divesting surgical, diagnostic, and outpatient businesses in 2007 to focus on post-acute care.
A pivotal moment was the 2014 acquisition of Encompass Home Health and Hospice, which led to a rebranding. On January 1, 2018, the company officially became Encompass Health Corporation, changing its ticker symbol to EHC. In July 2022, Encompass Health spun off its home health and hospice business into Enhabit Inc. (NYSE: EHAB), reshaping its focus on inpatient rehabilitation services. These changes have significantly impacted the company's strategic direction and capital allocation.
| Event | Year | Impact on Ownership |
|---|---|---|
| Initial Public Offering (IPO) | 1986 | Began public ownership |
| Acquisition of National Medical Enterprise assets | 1993 | Significant expansion, doubling the company's size |
| Accounting Scandal | Early 2000s | Leadership changes and restructuring |
| Divestiture of surgical, diagnostic, and outpatient businesses | 2007 | Refined focus on post-acute care |
| Acquisition of Encompass Home Health and Hospice | 2014 | Paved the way for rebranding |
| Name Change to Encompass Health Corporation | 2018 | Reflected broadened service offerings |
| Spin-off of Enhabit Inc. | 2022 | Focused on inpatient rehabilitation services |
As of May 2025, Encompass Health Corporation (NYSE: EHC) has a market capitalization of $12.25 billion. Institutional investors hold approximately 95.60% of the company's shares as of March 2025, up from 95.21% in October 2024. Key institutional shareholders include Vanguard Group Inc., BlackRock, Inc., Invesco Ltd., and Wellington Management Group Llp. Insider holdings remained largely unchanged at 2.98% in March 2025. Recent insider selling in April/May 2025, totaling around $16.7 million, is noted. Retail investors hold approximately 24.65% of the stock. For more insights into the company's strategic positioning, consider exploring the Target Market of Encompass Health.
Ownership Insights
Encompass Health's ownership is predominantly institutional, with significant holdings by major investment firms.
- Institutional ownership is around 95.60% as of March 2025.
- Insider holdings are approximately 2.98%.
- Retail investors hold roughly 24.65%.
- Recent insider selling occurred in April/May 2025.
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Who Sits on Encompass Health’s Board?
As of May 1, 2025, the shareholders of Encompass Health elected a board of directors consisting of 10 members during the Annual Meeting. The election results showed that all nominated directors were successfully elected. The company's common stock is the only class of outstanding voting securities, with each share of common stock entitled to one vote. Votes representing 93.9% of the combined voting power of the common stock were represented by proxy at the Annual Meeting, reflecting significant shareholder participation in the election process. The board of directors recommended a 'FOR' vote for the election of all 10 nominees.
The board also recommended and received approval for the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm, the approval of executive compensation, and the approval of the 2025 Omnibus Performance Incentive Plan. The compensation for named executive officers, as disclosed in the April 1, 2025, proxy statement, also received majority approval. This indicates shareholder satisfaction with the executive compensation structure. The election results and other proposals reflect the company's governance and shareholder engagement practices. For more information on the company's strategic direction, see the Growth Strategy of Encompass Health.
| Board Member | Title | Affiliation |
|---|---|---|
| Mark Tarr | President and Chief Executive Officer | Encompass Health |
| Gregory S. Crawford | Lead Independent Director | Retired Executive |
| Barbara J. Capps | Director | Retired Executive |
| John P. Case | Director | Retired Executive |
| J. Randall McDonald | Director | Retired Executive |
| David M. Pyott | Director | Retired Executive |
| Mary G. Sammons | Director | Retired Executive |
| Larry D. Striplin, Jr. | Director | Retired Executive |
| Kathleen H. Weslock | Director | Retired Executive |
| John R. Yost | Director | Retired Executive |
While there are no individuals or entities with special voting rights, the significant institutional ownership, approximately 97.25% as of May 2025, means that major institutional investors like Vanguard Group Inc., BlackRock, Inc., and Invesco Ltd. have considerable influence on the company's management and strategic decisions. This concentration of ownership highlights the importance of institutional investor perspectives in shaping the company's future. The structure ensures that the company operates under a one-share-one-vote system, promoting equitable governance.
Key Takeaways on Encompass Health Ownership
Understanding the ownership structure of Encompass Health is crucial for investors and stakeholders.
- The company operates on a one-share-one-vote basis, ensuring equitable voting rights.
- Institutional investors hold a significant portion of the shares, influencing strategic decisions.
- Shareholders recently approved the election of all nominated board members.
- The board of directors recommended key proposals, which were approved by shareholders.
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What Recent Changes Have Shaped Encompass Health’s Ownership Landscape?
Over the past few years, significant changes have occurred regarding Encompass Health's ownership and strategic direction. A key event was the spin-off of its home health and hospice business into Enhabit Inc. in July 2022. This followed pressure from Jana Partners, an activist investment firm, in late 2021, which advocated for the separation to allow Encompass Health to concentrate on its core inpatient rehabilitation services. The company's focus remains on strategic growth in inpatient rehabilitation and shareholder distributions through dividends and buybacks.
In terms of financial activities, Encompass Health authorized a $500 million share repurchase program in July 2024. The company repurchased approximately $17 million of its common stock during the second quarter of 2024 and had about $181 million remaining under the prior authorization as of June 30, 2024. More recently, in the first quarter of 2025, the company repurchased $50.93 million of its stock, following $8.63 million in Q4 2024 and $6.76 million in Q3 2024. The company plans to open 7 new de novo facilities and 1 satellite facility in 2025, with 5 of these located in Florida.
Leadership changes have included Mark Tarr stepping into the CEO role in January 2017. Recent insider selling by executives, including CEO Mark J. Tarr, totaled approximately $16.7 million in April/May 2025. However, institutional investors have been actively accumulating shares, with 97.25% of Encompass Health's shares held by institutions as of May 2025. Ensign Peak Advisors increased its stake by 51.3% in Q4 2024. This trend of increased institutional ownership reflects confidence in the company's fundamentals, including a 10.6% surge in Q1 2025 revenue to $1.46 billion.
Ownership Overview
Encompass Health is a publicly traded company. Its ownership is primarily held by institutional investors. The company has a history of share repurchases, indicating confidence in its financial health.
Key Developments
The spin-off of Enhabit Inc. was a major strategic move. Encompass Health is focused on expanding its inpatient rehabilitation services. The company is opening new facilities and has active joint ventures.
Financial Performance
The company's revenue increased significantly in Q1 2025. Encompass Health has a share repurchase program in place. Recent insider selling has occurred, but institutional ownership remains high.
Leadership and Strategy
Mark Tarr has been the CEO since January 2017. The company is pursuing a growth strategy. Encompass Health is focused on inpatient rehabilitation expansion.
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