UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.     )
 
Filed by the Registrant  x
 
Filed by a Party other than the Registrant  o
  
Check the appropriate box:
o
  Preliminary Proxy Statement
o
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x  Definitive Proxy Statement
o
  Definitive Additional Materials
o
  Soliciting Material Under §240.14a-12
 
CENTENE CORPORATION
(Name of Registrant as Specified In Its Charter)
 
Payment of Filing Fee (Check the appropriate box):
x 
No fee required.
o 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 (1)Title of each class of securities to which transaction applies:
 (2)Aggregate number of securities to which transaction applies:
 (3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 (4)Proposed maximum aggregate value of transaction:
 (5)Total fee paid:
o 
Fee paid previously with preliminary materials.
o 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 (1)Amount previously paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:












                                
Notice of 2021 Annual
Meeting of Stockholders
and Proxy Statement






March 12, 2021


















image23a.jpg






image23a.jpg
Letter from our Chairman, President and CEOCentene Corporation
Centene Plaza
7700 Forsyth Boulevard
St. Louis, Missouri 63105
March 12, 2021
 
Dear Fellow Stockholders:
 
Our 2021 Annual Meeting of Stockholders will be held in a virtual format at 10:00 AM, Central Time, on Tuesday, April 27, 2021 at www.virtualshareholdermeeting.com/CNC2021. Annual meetings play an important role in maintaining communications and understanding among our management, Board of Directors and stockholders, and I hope that you will be able to join us. Stockholders will have the opportunity to submit questions during the virtual meeting using the directions on the meeting website.

On or about March 15, 2021, we will begin mailing to our stockholders a proxy notice containing instructions on how to access our Proxy Statement, Annual Review and Annual Report on Form 10-K, and vote online. Information concerning the matters to be considered and voted upon at the Annual Meeting is set forth in the Notice of 2021 Annual Meeting of Stockholders and Proxy Statement. The notice contains instructions on how you can receive a paper copy of the Proxy Statement, Annual Review and Annual Report on Form 10-K, if you only received a proxy notice by mail.
 
If you are a stockholder of record, you may vote:
via internet;
by telephone;
by mail; or
virtually at the meeting.

To vote by internet or telephone, please follow the instructions on the proxy notice. To vote by mail, request a set of proxy materials as instructed on the proxy notice. You may attend the virtual meeting and vote at the meeting even if you have previously voted.
 
If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions from the holder of record that you must follow in order for your shares to be voted.

Sincerely,

proxygraphic2a01a061.jpg
Michael F. Neidorff
Chairman, President, and Chief Executive Officer
THE ABILITY TO HAVE YOUR VOTE COUNTED AT THE MEETING IS AN IMPORTANT
STOCKHOLDER RIGHT, AND I HOPE YOU WILL CAST YOUR VOTE AT THE VIRTUAL MEETING OR BY PROXY REGARDLESS OF THE NUMBER OF SHARES YOU HOLD.






image23a.jpg
Letter from our Lead Independent DirectorCentene Corporation
Centene Plaza
7700 Forsyth Boulevard
St. Louis, Missouri 63105
March 12, 2021
 
Dear Stockholders:
 
I am pleased to invite you to the Company's 2021 Annual Meeting of Stockholders on Tuesday, April 27, 2021. It is an honor and privilege to continue to serve the Company as Lead Independent Director. My fellow Board members and I are proud to carry out our responsibilities to the Company's stockholders and stakeholders in guiding the Company through extraordinary growth while remaining focused on the Company's core values and commitment to help people live healthier lives. Thank you for your continued trust as we navigate through these transformative times within the healthcare industry.

In 2020, the Company navigated unprecedented times with the global COVID-19 pandemic and continues to respond and adapt to the challenges it brings. My fellow Board members and I have been proud to help guide the Company through key business decisions with a steadfast goal of supporting the Company's valued members, employees, stockholders, and stakeholders. With these challenges come great responsibility, but also a great opportunity for the Company to thrive on its local approach to providing accessible, high-quality healthcare to over 25 million members and to support the Company's employees in carrying out this mission.

Despite the pandemic, the Company remained focused on successful business execution, including the integration of WellCare, the announcement of the pending Magellan acquisition, and our ambition to be a technology company that does healthcare. The Company's performance warranted higher than target bonus payments; however, due to the ongoing pandemic, management and the Board felt it was important that 2020 bonuses not be increased above target.

The global pandemic shed additional light on the importance of supporting social responsibilities in the communities we serve and in the workplace. Centene continues to execute on its commitment to environmental, social, health and governance initiatives and diversity and inclusion in the workplace. This year, the Board established the Environmental and Social Responsibility Committee to oversee the strategic plans for these matters.

We continue to remain focused on shareholder engagement and value input from the Company's stockholders on key topics related to our corporate governance, strategy, compensation structures and corporate responsibilities. In 2020, the Company and the Board conducted extensive outreach to stockholders in an effort to better understand stockholder concerns, in particular as it relates to our executive compensation program, and took action on stockholder feedback. The Board looks forward to a continued partnership with the Company's stockholders as we focus on strong corporate governance, risk management, succession planning and refreshment, and environmental and social responsibilities in the coming months and years. Additional detail on our stockholder outreach can be found in the Compensation Discussion & Analysis section.

Thank you for your continued support and investment in the Company.

Sincerely,
ditmore1.jpg
Robert K. Ditmore
Lead Independent Director



CENTENE CORPORATION
CENTENE PLAZA
7700 FORSYTH BOULEVARD
ST. LOUIS, MISSOURI 63105

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
Time and Date  10:00 AM, Central Time, on Tuesday, April 27, 2021
Website  www.virtualshareholdermeeting.com/CNC2021
Items of Business  During the meeting, we will ask you and our other stockholders to consider and act upon the following matters:
   (1) to elect four Class II Directors to three-year terms;
(2) advisory resolution to approve executive compensation;
(3) to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021;
(4) to approve the amendment to the 2012 Stock Incentive Plan to increase the number of shares of common stock reserved for issuance under the plan;
(5) to approve the Amendment and Restatement of the Company's Certificate of Incorporation to eliminate supermajority voting provisions;
(6) to consider the stockholder proposal to Elect Each Director Annually, if properly presented at the meeting; and
(7) to transact any other business properly presented at the meeting.
Record Date  
You may vote if you were a stockholder of record at the close of business on February 26, 2021.
Proxy Voting  It is important that your shares be represented and voted at the meeting. Whether or not you plan to attend the virtual meeting, please vote by internet, telephone or mail. You may revoke your proxy at any time before its exercise at the meeting. Please reference the proxy notice for additional information.
Stockholder List  A list of stockholders entitled to vote will be available electronically at the meeting. In addition, you may contact our Secretary, Christopher A. Koster, at our address as set forth above, to make arrangements to review a copy of the stockholder list at our offices located at 7700 Forsyth Boulevard, St. Louis, Missouri, before the meeting, between the hours of 8:00 AM and 5:00 PM, Central Time, on any business day from April 17, 2021, up to one hour prior to the time of the meeting.
By order of the Board of Directors,
kostersignature1.jpg
Christopher A. Koster
Secretary
St. Louis, Missouri  
March 12, 2021





image23a.jpg


Date and Time:10:00 AM, Central Time, on Tuesday, April 27, 2021
Location:www.virtualshareholdermeeting.com/CNC2021
Record Date:February 26, 2021



Voting MatterBoard's RecommendationPage
summary1.jpg

Proposal 1
Elect four Class II Directors to three-year terms

FOR
each Nominee

Proposal 2
Advisory resolution to approve executive compensation

FOR

Proposal 3
Ratify the appointment of KPMG LLP

FOR

Proposal 4
Approve the amendment to the 2012 Stock Incentive Plan, As Amended
FOR

Proposal 5
Approve the Amendment and Restatement of the Company's Certificate of Incorporation
FOR

Proposal 6
Consider the stockholder proposal to Elect Each Director Annually

FOR


Table of contents
         Table of Contents




Information About the Meeting
Proposal One: Election of Directors
Nominees and Continuing Directors
Director Candidates
Director Tenure and Commitment to Refreshment
Director Independence
The Board's Role in Succession Planning
Board of Directors Committees
Compensation Committee Interlocks and Insider Participation
Communicating with Independent Directors
Director Compensation
Corporate Governance and Risk Management
Proxy Access
Environmental, Social, Health, and Governance and Corporate Sustainability
The Company's Response to COVID-19
The Company's Ambition to be a Technology Company that does Healthcare
Proposal Two: Advisory Resolution to Approve Executive Compensation
Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm
Proposal Four: Approval of the Amendment to the 2012 Stock Incentive Plan, As Amended
Summary of the 2012 Amended Plan
Proposal Five: Approval of the Amendment and Restatement of the Company's Certificate of Incorporation
Proposal Six: Stockholder Proposal to Elect Each Director Annually
Stockholder Statement Regarding Proposal to Elect Each Director Annually
Board of Directors' Statement in Support to Elect Each Director Annually
Audit Committee Report
Information About Executive Compensation
Compensation Committee Report
Compensation Discussion and Analysis
Equity Compensation Plan Information
Summary Compensation Table
Grants of Plan-Based Awards Table
Outstanding Equity Awards at Fiscal Year-End Table
Option Exercises and Stock Vested Table
Nonqualified Deferred Compensation Table
Potential Payments Upon Termination or Change in Control
CEO to Median Employee Pay Ratio Information
Other Matters
Information About Stock Ownership
Delinquent Section 16(a) Reports
Related Party Transactions
Submission of Stockholder Proposals and Director Nominations for 2022 Annual Meeting
Householding
Appendix
Appendix A - Reconciliation of Non-GAAP Measures
A-1
Appendix B - 2012 Stock Incentive Plan, as Amended
B-1
Appendix C - Amended and Restated Centene Corporation Certificate of Incorporation
C-1


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT THE MEETING

Information About the Meeting
We have sent you a notice of this proxy statement because our Board of Directors (the Board) is soliciting your proxy to vote at our 2021 Annual Meeting of Stockholders or any adjournment or postponement of the meeting.

Virtual Meeting Information
In an effort to protect the health and well-being of Centene stockholders and employees during the COVID-19 outbreak, the Company's 2021 Annual Meeting of Stockholders will be held in a virtual format only.

Virtual meeting date: Tuesday, April 27, 2021
Virtual meeting time: 10:00 AM, Central Time
Virtual meeting link: www.virtualshareholdermeeting.com/CNC2021

Stockholders will have the same opportunities to participate as they would at an in-person meeting and will have the opportunity to submit questions during the virtual meeting using the directions on the meeting website. Stockholders will need their control number to vote or ask questions during the meeting. The control number can be found on the proxy cards, voting instruction forms or other notices. Those without a control number may attend as guests of the meeting, but will not have the option to vote their shares or ask questions.

Access to the Webcast of the Annual Meeting: The live webcast of the 2021 Annual Meeting will begin promptly at 10:00 AM, Central Time. Online access to the webcast will open 15 minutes prior to the start of the 2021 Annual Meeting to allow time for log-in and testing of device systems. We encourage participants to access the meeting in advance of the designated start time.

Log-in Instructions: To be admitted to the virtual 2021 Annual Meeting, participants will enter at the following website: www.virtualshareholdermeeting.com/CNC2021. Those who plan to vote or ask a question will need the 16-digit control number found on the proxy card or voting instruction form mailed or made available to stockholders entitled to vote at the 2021 Annual Meeting.

Technical Assistance: Beginning 15 minutes prior to, and during, the 2021 Annual Meeting, support will be available to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting. If participants encounter any difficulty accessing, or during, the virtual meeting, they should call the support team at the numbers listed on the log-in screen.
THIS PROXY STATEMENT summarizes information about the proposals to be considered at the meeting and other information you may find useful in determining how to vote.
THE PROXY CARD is the means by which you actually authorize another person to vote your shares in accordance with the instructions.

Our directors, officers and employees may solicit proxies virtually or by telephone, mail, electronic mail or facsimile. We will pay the expenses of soliciting proxies, although we will not pay additional compensation to these individuals for soliciting proxies. We will request banks, brokers and other nominees holding shares for a beneficial owner to forward copies of the proxy materials to those beneficial owners and to request instructions for voting those shares. We will reimburse these banks, brokers and other nominees for their related reasonable expenses. The Company has retained Morrow Sodali, LLC and Saratoga Proxy Consulting, LLC to assist in the solicitation of proxies at an estimated cost of $12,500 each, plus expenses.
 
We are making this proxy statement and our 2020 Annual Report available to stockholders for the first time on or about March 15, 2021.
 
Centene Corporation 1


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT THE MEETING
Who is entitled to vote at the meeting?
Holders of record of our common stock at the close of business on February 26, 2021, are entitled to one vote per share on each matter properly brought before the meeting. The proxy notice states the number of shares you are entitled to vote.
 
You may vote your shares at the meeting virtually or by proxy:
TO VOTE AT THE VIRTUAL MEETING, you must login to the virtual meeting at www.virtualshareholdermeeting.com/CNC2021. Stockholders will need their control number to vote at the meeting. The control number can be found on the proxy cards, voting instruction forms or other notices they received previously.
TO VOTE BY PROXY, you must follow the instructions on the proxy notice and then vote by means of the internet, telephone or, if you received your proxy materials by mail, mailing the proxy card in the enclosed postage-paid envelope. Your proxy will be valid only if you vote before the meeting. By voting, you will direct the designated persons to vote your shares at the meeting in the manner you specify. If, after requesting paper materials, you complete the proxy card with the exception of voting instructions for any proposal, then the designated persons will vote your shares in accordance with the recommendations of the Board of Directors. If any other business properly comes before the meeting, the designated persons will have the discretion to vote your shares as they deem appropriate.
 
Even if you vote by means of the internet, telephone, or complete and return a proxy card, you may revoke it at any time before it is exercised by taking one of the following actions:
send written notice to Christopher A. Koster, our Secretary, at our address as set forth in the accompanying Notice of 2021 Annual Meeting of Stockholders;
submit a new vote by means of the mail, internet or telephone; or
attend the meeting, notify our Secretary that you are present, and then vote by ballot.

What is the quorum requirement?
At the close of business on February 26, 2021, there were 581,593,041 shares of our common stock outstanding. Our By-Laws require that a majority of the shares of our common stock issued and outstanding and entitled to vote be represented, through attendance at the virtual meeting or by proxy, at the meeting in order to constitute the quorum we need to transact business. We will count abstentions and broker non-votes in determining whether a quorum exists. A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or other nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.
 
What vote is required to approve each proposal?
Our By-Laws include a majority voting standard for the election of directors in uncontested elections, which are generally defined as elections in which the number of nominees does not exceed the number of directors to be elected at the meeting. Under the majority voting standard, in uncontested elections of directors, such as this election, each director must be elected by the affirmative vote of a majority of the votes cast with respect to such director by the shares represented and entitled to vote therefor at the meeting. A majority of the votes cast means the number of votes cast “FOR” a director nominee exceeds the number of votes cast “AGAINST” that director nominee. In accordance with our Corporate Governance Guidelines, in this election, any director nominee who receives a greater number of votes “AGAINST” his or her election than “FOR” votes must tender his or her resignation to the Board of Directors promptly following certification of the stockholder vote. The Nominating and Governance Committee is required to make a recommendation to the Board of Directors with respect to any such tendered resignation. The Board of Directors will act on the tendered resignation within 90 days from the certification of the vote and will publicly disclose its decision, including an explanation of its decision. Abstentions and broker non-votes will not count as a vote “FOR” or “AGAINST” a director nominee’s election and thus will have no effect in determining whether a director nominee has received a majority of the votes cast.
2 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT THE MEETING

 
The affirmative vote of the holders of a majority of the votes cast at the meeting is necessary to approve on an advisory non-binding basis, the Company's executive compensation, to ratify the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 and to approve the amendment to increase the number of authorized shares under the Company's stock incentive plan. The affirmative vote of at least 75% of the voting power of the shares entitled to vote at an election of directors is required to approve the amendment and restatement of the Certificate of Incorporation to remove the supermajority voting provisions therein. The effect and evaluation of the vote to consider the stockholder proposal on board declassification is disclosed below under the caption for such matter. Abstentions and broker non-votes with respect to each of these proposals will not be considered as votes cast with respect to the matter and thus will have no effect on the vote except (i) with respect to the proposal to approve the amendment to increase the number of authorized shares under the Company's stock incentive plan, where abstentions will have the effect of votes cast "AGAINST" this proposal and (ii) with respect to the proposal to approve the amendment and restatement of the Certificate of Incorporation, where abstentions and broker non-votes will have the effect of votes cast "AGAINST" this proposal.

Will other matters be considered at the meeting?
Our Board of Directors is not aware of any matters that are expected to come before the meeting other than those referred to in this proxy statement. If any other matter should properly come before the meeting, the persons appointed as proxies by the Board of Directors intend to vote the proxies in accordance with their best judgment.
 
The Chairperson of the meeting may refuse to allow the transaction of any business not presented beforehand, or to acknowledge the nomination of any person not made, in compliance with the procedures set forth in our By-Laws.
Centene Corporation 3


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

Proposal One: Election of Directors
Nominees and Continuing Directors
Our Certificate of Incorporation provides that the Board is to be divided into three classes serving for staggered three-year terms. Under our By-Laws, our Board of Directors has the authority to fix the number of directors, provided that the Board must have between five and twelve members. The first proposal on the agenda for the meeting is the election of four nominees to serve as Class II Directors for three-year terms beginning at the meeting and ending at our 2024 Annual Meeting of Stockholders.

No director, including any director standing for election, or any associate of a director, is a party adverse to us or any of our subsidiaries in any material proceeding or has any material interest adverse to us or any of our subsidiaries. No director, including any director standing for election, is related by blood, marriage or adoption to any other director or any executive officer.
  
The Board has nominated Jessica L. Blume, Frederick H. Eppinger, David L. Steward, and William L. Trubeck for re-election to the Board. We expect that Ms. Blume, Mr. Eppinger, Mr. Steward, and Mr. Trubeck will be able to serve if elected. If any of them are not able to serve, proxies may be voted for a substitute nominee or nominees.

The Board believes the election of these four nominees is in our best interests and the best interests of our stockholders and recommends a vote “FOR” the election of the four nominees.
Class II Directors - Standing For Election for Term Expiring in 2024
Jessica L. Blume
Principal Occupation: Retired Vice Chairman of Deloitte LLP
First Became Director: February 2018
Age: 66
Ms. Blume was Vice Chairman of Deloitte LLP from 2012 until her retirement in 2015. She served in various leadership positions during her 26 years at Deloitte including serving on the Board of Directors, as the Chair of the Executive Compensation and Evaluation Committee, and a member of the Finance, Governance, Strategic Investment and Risk Committees. Ms. Blume currently serves as a director of Publix Super Markets, Inc.
Qualifications: Ms. Blume's range of experience includes, in particular, public accounting, technology and organizational development expertise.

Frederick H. Eppinger
Principal Occupation: Director, President and Chief Executive Officer of Stewart Information Services Company
First Became Director: April 2006
Age: 62
Mr. Eppinger has served as Director, President and Chief Executive Officer of Stewart Information Services Company since September 2019. He served as Director, President and Chief Executive Officer of The Hanover Insurance Group, Inc. (insurance and financial services industries) from 2003 to 2016. Mr. Eppinger serves as a director of QBE Insurance Group Limited.
Qualifications: Mr. Eppinger's range of experience includes, in particular, his experience as a chief executive officer, as well as organizational development and insurance industry expertise.
4 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
David L. Steward
Principal Occupation: Founder and Chairman of World Wide Technology, Inc.
First Became Director: May 2003
Age: 69
Mr. Steward is the founder of World Wide Technology, the largest Black-owned, privately held business (digital transformation solutions provider) and has served as its Chairman since its founding in 1990. In addition, Mr. Steward has served as Chairman of Telcobuy.com (an affiliate of World Wide Technology, Inc.), since 1997. Mr. Steward is also the founder and Chairman of Kingdom Capital, a Black-owned, values-driven private investment company accelerating innovative artificial intelligence solutions for healthcare, cybersecurity, and social justice, since 2016. He also served as a director of First Banks, Inc., a registered bank holding company, from 2000 to 2013.
Qualifications: Mr. Steward's range of experience includes, in particular, his experience as a chief executive officer, political and regulatory relationships, technology expertise and community involvement.

William L. Trubeck
Principal Occupation: Retired Executive Vice President and Chief Financial Officer, H&R Block, Inc.
First Became Director: January 2020
Age: 74
Mr. Trubeck served as Interim Executive Vice President and Chief Financial Officer of YRC Worldwide from March 2011 to July 2011 and served as Executive Vice President and Chief Financial Officer of H&R Block, Inc. from 2004 to 2007. Mr. Trubeck also served as Executive Vice President and Chief Financial Officer of Waste Management, Inc. and Senior Vice President and Chief Financial Officer of International Mutlifoods, Inc. Mr. Trubeck served on the WellCare Board of Directors since 2010 and joined Centene's board of Directors upon the closing of the WellCare acquisition.
Qualifications: Mr. Trubeck's range of experience includes, in particular, public company governance, healthcare, companies with revenues greater than $1 billion, and chief financial officer roles.
Class I Directors - Term Expiring in 2023
Michael F. Neidorff
Principal Occupation: Chairman, President and Chief Executive Officer (CEO) of Centene Corporation
First Became Director: May 1996
Age: 78
Mr. Neidorff has served as our Chairman, President and Chief Executive Officer since April 2019. From November 2017 to April 2019, he served as our Chairman and Chief Executive Officer. From May 2004 to November 2017, Mr. Neidorff served as Chairman, President and Chief Executive Officer. From May 1996 to May 2004, Mr. Neidorff served as President, Chief Executive Officer and as a member of our Board of Directors. Mr. Neidorff previously served as a director of Caleres, Inc.
Qualifications: Mr. Neidorff's range of experience includes, in particular, experience as a chief executive officer, as well as healthcare, investment banking, organizational development expertise and community involvement.

Robert K. Ditmore
Principal Occupation: Retired Director, President and Chief Operating Officer of United Healthcare Corporation
First Became Director: 1996
Age: 87
Mr. Ditmore is a retired Director, President and Chief Operating Officer of United Healthcare Corporation (managed care industry), now known as UnitedHealth Group, Inc.
Qualifications: Mr. Ditmore's range of experience includes, in particular, chief executive officer roles and extensive healthcare and service industry expertise.
Centene Corporation 5


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS


Richard A. Gephardt
Principal Occupation: Chief Executive Officer and President of Gephardt Group, LLC; Former Majority Leader of the U.S. House of Representatives
First Became Director: December 2006
Age: 80
Mr. Gephardt has served as Chief Executive Officer and President of Gephardt Group, LLC (consulting business) since 2005. Mr. Gephardt served as a Member of the U.S. House of Representatives from 1977 to 2005; he was House Majority Leader from 1989 to 1995 and Minority Leader from 1995 to 2003. He also serves as a director for Spirit Aerosystems Holdings, Inc. Mr. Gephardt previously served as a director for Ford Motor Company, CenturyLink and US Steel Corporation.
Qualifications: Mr. Gephardt's range of experience includes, in particular, political and regulatory relationships as well as investment banking and healthcare expertise.

Lori J. Robinson
Principal Occupation: Retired United States Air Force General
First Became Director: October 2019
Age: 62
General Robinson served in the Air Force until her retirement in July 2018 following a 36-year military career, including Commander of North American Aerospace Defense Command (NORAD) and U.S. Northern Command (NORTHCOM). General Robinson currently serves on the Board of Directors of Korn Ferry and NACCO Industries, Inc.
Qualifications: General Robinson’s range of experience includes, in particular, organizational development expertise and military service.

Class III Directors - Term Expiring in 2022
Orlando Ayala
Principal Occupation: Retired Chairman and Corporate Vice President of Emerging Businesses for Microsoft Corporation
First Became Director: September 2011
Age: 64
Mr. Ayala served as Chairman and Corporate Vice President of Emerging Businesses for Microsoft Corporation until August of 2016. He joined Microsoft in 1991 as Senior Director of the Latin America region and from 1998 to 2003 was in charge of Global Sales, Marketing and Services as Executive VP. For more than 30 years, Mr. Ayala held increasingly senior leadership roles in the technology sector. Mr. Ayala has also served as a Director for Ecopetrol since 2019.
Qualifications: Mr. Ayala's range of experience includes, in particular, technology, organizational development and international expertise. 

6 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
H. James Dallas
Principal Occupation: Former Senior Vice President, Quality and Operations, Medtronic Public Limited Company
First Became Director: January 2020
Age: 62
Mr. Dallas has served as Chief Executive Officer and President of James Dallas & Associates (information technology consulting) since 2013. From March 2006 until September 2013, Mr. Dallas was with Medtronic Public Limited Company, a manufacturer of cardiac and other specialized medical devices. He served as Senior Vice President, Quality and Operations from 2008 to 2013. From 2006 to 2014, he served as Senior Vice President and Chief Information Officer. Prior to joining Medtronic, he was with Georgia-Pacific Corporation from 1984 to 2006 in various roles of increasing responsibility, including its Vice President and Chief Information Officer. Mr. Dallas also served as Former Vice President and Chief Financial Officer, Georgia-Pacific Corporation. Mr. Dallas served on the WellCare Board of Directors since 2016 and joined Centene's board of Directors upon the closing of the WellCare acquisition. Mr. Dallas currently serves on the Board of Directors of KeyCorp and Strategic Education, Inc. He previously served as a director of the Capella Education Company.
Qualifications: Mr. Dallas’ range of experience includes, in particular, technology, healthcare and companies with revenues greater than $1 billion.

John R. Roberts
Principal Occupation: Retired Regional Managing Partner, Arthur Andersen LLP
First Became Director: March 2004
Age: 79
Mr. Roberts is a retired Managing Partner, Mid-South Region, of Arthur Andersen LLP. He previously served as Director and Chairman of the Audit Committee of Energizer Holdings, Inc. for 14 years and as Director and Chairman of the Audit Committee for Regions Financial Corporation for 13 years.
Qualifications: Mr. Roberts' range of experience includes, in particular, public accounting expertise as well as experience in financial service industries, public company governance and experience with companies with revenues greater than $1 billion.

Tommy G. Thompson
Principal Occupation: Chairman and Chief Executive Officer of Thompson Holdings; Interim President of the University of Wisconsin System; Retired Partner of Akin Gump Strauss Hauer & Feld LLP; Former Governor of the State of Wisconsin; Former Health and Human Services Secretary
First Became Director: April 2005
Age: 79
Mr. Thompson has served as Chairman and Chief Executive Officer of Thompson Holdings since 2012. Mr. Thompson has served as Interim President of the University of Wisconsin System since 2020. Mr. Thompson served as Partner of Akin Gump Strauss Hauer & Feld LLP (law firm) in Washington, D.C. from 2005 to 2012 and as President of Logistics Health, Inc. from 2005 to 2011. From 2001 to 2005, Mr. Thompson served as Secretary of U.S. Department of Health & Human Services. From 1987 to 2001, Mr. Thompson served as Governor of the State of Wisconsin. He also serves as a director of TherapeuticsMD Inc., Physicians Realty Trust, and United Therapeutics Corp. Mr. Thompson also previously served as a director of Tyme Technologies, C.R. Bard, Inc., and Cytori Therapeutics, Inc.
Qualifications: Mr. Thompson's range of experience includes, in particular, experience as a chief executive officer, political and regulatory relationships and healthcare expertise.

Centene Corporation 7


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

Director Candidates
The process followed by the Nominating and Governance Committee to identify and evaluate Director candidates includes requests to Board members and others for recommendations, meetings from time to time to evaluate potential candidates and interviews of selected candidates by members of the Nominating and Governance Committee and the Board.
 
In considering whether to recommend any particular candidate for inclusion in the Board's slate of recommended director nominees, the Nominating and Governance Committee will apply the criteria set forth in our Corporate Governance Guidelines. These criteria include the candidate's integrity, business acumen, knowledge of our business and industry, age, experience, diligence, conflicts of interest and the ability to act in the interests of all stockholders. The Nominating and Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.

We believe that it is important that our directors understand the diverse populations that we serve. Indeed, Board membership should reflect diversity in its broadest sense, including persons diverse in background, geography, perspective, gender, and ethnicity and the candidate pool always reflects these attributes. The Board is particularly interested in maintaining a mix that includes the following backgrounds:
Public company governance                    
Healthcare
Service and insurance industry
Companies with revenues greater than $1 billion
Public accounting
Community involvement
Military service
Investment banking

International
Financial services
Technology
Organizational development
Political and regulatory relationships
Experience as a Chief Executive Officer
Experience as a Chief Financial Officer
                                

8 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    

Our Board reflects a mix of these skills as follows:
Board Member
pic001.jpg
pic11.jpg
pic21.jpg
pic31.jpg
pic41.jpg
pic51.jpg
pic61.jpg
pic71.jpg
pic81.jpg
pic91.jpg
pic101.jpg
desk1.jpg
pic111.jpg
pic121.jpg
pic131.jpg
Michael F. Neidorffüüüüüüüüüü
Orlando Ayalaüüüüüüü
Jessica L. Blumeüüüüüüü
H. James Dallasüüüüüüüü
Robert K. Ditmoreüüüüüüü
Frederick H. Eppingerüüüüüüüü
Richard A. Gephardtüüüüüüüüü
John R. Robertsüüüüüüüüü
Lori J. Robinsonüüüüü
David L. Stewardüüüüüüüüü
Tommy G. Thompsonüüüüüüüüüü
William L. Trubecküüüüüüüüüüü

skills11.jpg
Public company governanceHealthcareService and insurance industryHigh revenue companiesPublic accountingCommunity involvementMilitary serviceInvestment banking
skills21.jpg
InternationalFinancial servicesTechnologyOrganizational developmentPolitical and regulatory relationshipsCEO experienceCFO experience

Stockholders may recommend individuals to the Nominating and Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials to Nominating and Governance Committee, c/o Corporate Secretary, Centene Corporation, 7700 Forsyth Boulevard, St. Louis, Missouri 63105. Assuming that appropriate biographical and background material has been provided on a timely basis in accordance with the procedures set forth in our By-Laws, the Nominating and Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process and applying substantially the same criteria as it follows for candidates submitted by others.
Centene Corporation 9


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

Director Tenure and Commitment to Refreshment
We are proud of our Board of Directors, which for years has maintained excellent chemistry and internal working dynamics while having members with differing political affiliations and diverse backgrounds. We believe that the existing members of our Board continue to provide valuable insights and have contributed significantly to the success of our Company. The Board recognizes, however, the importance of planning for the succession of Board leadership and of bringing on new members. We followed through on this commitment to refreshment through the recent addition of three new members to our Board of Directors, which represents 25% refreshment in the last 18 months.

Our Board is focused on refreshment and diversity efforts.
Recent Board Refreshment
H. James Dallas (Appointed January 2020)
Chief Executive Officer and President, James Dallas & Associates since 2013
Former Senior Vice President, Quality and Operations, Medtronic Public Limited Company
William Trubeck (Appointed January 2020)
Former Interim Executive Vice President and Chief Financial Officer, YRC Worldwide (2011)
Former Executive Vice President and Chief Financial Officer, H&R Block (2004 - 2007)
Lori Robinson (Appointed October 2019)
Served in the Air Force until her retirement in July 2018 following a 36-year military career
Positions included Commander of North American Aerospace Defense Command and U.S. Northern Command
chart-4238625c90f141c99bd1.jpg
Director Independence
Our Board of Directors has affirmatively determined that all directors and director nominees except Michael F. Neidorff, our Chairman, President and CEO, as well as all of the members of each of the Board's committees, are independent as defined under the rules of the New York Stock Exchange (NYSE), including, in the case of all members of the Audit Committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act and in the case of all members of the Compensation Committee, the enhanced independence requirements under the rules of the NYSE. In the course of the Board's determination regarding the independence of each non-employee director and director nominee, it considered any transactions, relationships and arrangements as required by the rules of the NYSE.

No director or director nominee, excluding Michael F. Neidorff, has a direct or indirect material relationship with us except for their role as a director or stockholder. The Board also broadly considers what it deems to be all relevant facts and circumstances in determining the independence of its members.
10 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
The Board's Role in Succession Planning
As reflected in our Corporate Governance Guidelines, the Board's primary responsibilities include planning for CEO succession and monitoring and advising on succession planning for other executive officers. The Board's goal is to have a long-term and continuous program for effective senior leadership development and succession. The Board also has contingency plans in place for emergencies such as departure, death, or disability of the CEO or other executive officers.

The Board is confident that effective leadership of the Company would be assured
and a highly qualified successor could be selected whenever needed.

Comprehensive Succession Planning Process

Our Board recognizes that one of its most important duties is to ensure continuity in Centene's senior leadership by overseeing the development of executive talent and planning for the efficient succession of the CEO.

This involves extensive planning and oversight, including:
The entire Board works with Nominating and Governance Committee (NGC) to nominate and evaluate potential successors to the CEO.
The CEO regularly evaluates and recommends potential successors, and recommends development plans for such individuals to the NGC.
High potential executives are regularly challenged with additional responsibilities to expose them to our diverse operations, as we strive to develop well-rounded and experienced senior leaders.
Potential successors interact frequently with the Board in both formal and informal settings, so directors can get to know and evaluate them.
The NGC formally reports to the full Board at least annually on succession planning, and the Board discusses succession planning regularly at scheduled meetings, including in executive session, as appropriate.
Board of Directors Committees
Our Board of Directors has established three primary committees: Audit, Compensation, and Nominating and Governance, each of which operates under a charter that has been approved by our Board. Current copies of each committee's charter are posted on our website, https://investors.centene.com. The current composition of these committees is provided in the following table.
Centene Corporation 11


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

Board MemberBoard of DirectorsAudit CommitteeCompensation CommitteeNominating and Governance Committee
Michael F. NeidorffChairman
Orlando Ayalaüü
Jessica L. Blumeüü
H. James Dallasüü
Robert K. DitmoreLead Independent DirectorChairmanü
Frederick H. Eppingerüü
Richard A. Gephardtüü
John R. RobertsüChairman
Lori J. Robinsonüü
David L. StewardüüChairman
Tommy G. Thompsonüüü
William L. Trubeckü
Meetings held in 202011562
 
All of our directors attended 75% or more of the meetings of the Board and any committees thereof on which they served. Our Corporate Governance Guidelines provide that directors are expected to attend the 2021 Annual Meeting of Stockholders. All directors attended the 2020 Annual Meeting of Stockholders.

Board of Directors

Our Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations. The Board's primary responsibility is to oversee the management of the Company and, in doing so, serve the best interests of the Company and its stockholders. The Board selects, evaluates and provides for the succession of executive officers and, subject to stockholder election, directors. It reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed major commitments of corporate resources. Management keeps the directors informed of its activities through regular written reports and presentations at Board and committee meetings.
 
The Board currently combines the role of Chairman of the Board with the role of CEO, coupled with a Lead Independent Director position to further strengthen the governance structure. The Board believes this provides an efficient and effective leadership model for the Company. Combining the Chairman and CEO roles fosters clear accountability, effective decision-making, and alignment on corporate strategy. The Board periodically reviews its leadership structure. To ensure effective independent oversight, the Board has adopted a number of governance practices, including:
a strong, independent, clearly-defined Lead Independent Director role;
executive sessions of the independent directors in connection with every Board meeting; and
annual performance evaluations of the Chairman, President and CEO by the independent directors.

Our Board of Directors has appointed Robert K. Ditmore Lead Independent Director to preside at all executive sessions of “non-management” directors, as defined under the rules of the NYSE. The Lead Independent Director's role includes leading the Board's processes for selecting and evaluating the CEO and presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors.

Our Corporate Governance Guidelines require the Board to conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nominating and Governance Committee receives comments from all directors and reports annually to the Board with an assessment of the Board’s performance. This is discussed with the full Board following the end of each fiscal year. The assessment
12 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
focuses on the Board’s contribution to the Company and specifically focuses on areas in which the Board or management believes that the Board could improve.

Audit Committee

The Audit Committee's responsibilities include:
appointing, retaining, evaluating, terminating, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from the independent registered public accounting firm;
reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
overseeing our internal audit function;
discussing our risk management policies;
establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting-related complaints and concerns;
meeting independently with our internal audit staff, independent registered public accounting firm and management; and
preparing the Audit Committee report required by Securities and Exchange Commission (SEC) rules.

The Board has determined that John R. Roberts, Jessica L. Blume and Frederick H. Eppinger are “audit committee financial experts” as defined in Item 407(d)(5) of Regulation S-K and that each member of the Audit Committee is "financially literate" under the applicable NYSE rules.

Compensation Committee

The Compensation Committee oversees our activities in the area of compensation and benefits (generally with regard to all employees and specifically with regard to our Named Executive Officers, or NEOs, identified in the Summary Compensation Table, as well as other officers) and reviews and makes recommendations concerning compensation-related matters to be submitted to the Board and/or stockholders for approval. The Board has determined that each of the members of the Compensation Committee is “independent,” as defined under the rules of the NYSE. The Compensation Committee's responsibilities include:
evaluating compensation policies and practices to determine if they may be influencing employees to take excessive risks;
annually reviewing and approving corporate goals and objectives relevant to our CEO's compensation;
reviewing and making recommendations to the Board with respect to our CEO's compensation;
reviewing and approving, or making recommendations to the Board, with respect to the compensation of our other executive officers;
overseeing an evaluation of our senior executives;
overseeing and administering our equity incentive plans;
reviewing and making recommendations to the Board with respect to director compensation;
Centene Corporation 13


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

reviewing and discussing with management the compensation, discussion and analysis section of the proxy statement;
reviewing the results of any advisory shareholder vote on executive compensation and considering whether to make or recommend adjustments to the Company's executive compensation as a result of such vote; and
retaining and terminating any compensation consultant to be used to assist the Compensation Committee in the evaluation of executive compensation.

Members of management assist the Compensation Committee in its responsibilities by providing recommendations for the Compensation Committee's approval concerning the design of our compensation program for our executive officers other than our CEO, including our NEOs, as well as recommended award levels. The design of our compensation program for our CEO is recommended by the Compensation Committee and approved by the Board without any approval of the Chairman, who is the Company's CEO.

The Compensation Committee considered information and data regarding executive compensation supplied by management and by Exequity, LLP, compensation consultants that were engaged directly by the Compensation Committee to provide advice with respect to base salaries, bonus targets and long-term incentives. The consultants analyzed the compensation levels of the NEOs of the industry peer group developed by Exequity, LLP for the most recently completed fiscal year. As discussed under the Compensation Discussion and Analysis (CD&A), the Compensation Committee considered this information, along with a variety of other factors, in reviewing executive compensation in 2020.
  
The Compensation Committee has reviewed the independence of Exequity, LLP in light of SEC rules and NYSE listing standards, including the following factors: (1) other services provided to us by the consulting firm; (2) fees paid by us as a percentage of consulting firm's total revenue; (3) policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; (4) any business or personal relationships between the compensation consultant and a member of the Compensation Committee; (5) any company stock owned by the compensation consultant; and (6) any business or personal relationships between our executive officers and the senior advisor. The Compensation Committee discussed these considerations and concluded that the compensation consultant's work for the committee does not raise any conflict of interest.

The Compensation Committee delegates to management the authority to grant certain stock options and restricted stock units under the 2012 Stock Incentive Plan. Our CEO is authorized to issue awards (other than to himself) of up to 60,000 shares to any newly hired executive and up to 24,000 shares to any one person during a calendar year, and is required to report any such grants to the Compensation Committee at the following Compensation Committee meeting. The delegation of authority may be terminated by the Compensation Committee at any time and for any reason. All internal promotions and equity grants to any “Executive Officer” (as defined by Rule 3b-7 under the Exchange Act) require Compensation Committee approval.

Nominating and Governance Committee

The Nominating and Governance Committee's responsibilities include:
identifying individuals qualified to become members of the Board;
recommending to the Board the persons to be nominated for election as directors and to each of the Board's committees;
reviewing and making recommendations to the Board with respect to management succession planning;
reviewing and recommending to the Board corporate governance principles; and
overseeing an annual evaluation of the Board's performance.

14 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
Additional Committees

Our Board of Directors has also established a Government and Regulatory Affairs Committee, which is co-chaired by Richard A. Gephardt and Tommy G. Thompson; a Technology Committee chaired by Orlando Ayala; a Compliance Committee chaired by Michael Neidorff and an Environmental and Social Responsibility Committee chaired by James Dallas.

The Government and Regulatory Affairs Committee’s primary responsibility is to assist the Board in identifying, evaluating and monitoring legislative, political and regulatory trends and addressing public policy issues and concerns that affect or could affect the Company. The Government and Regulatory Affairs Committee’s responsibilities include, among others:
making recommendations to the Board regarding the amendment and/or adoption of new policies, procedures and/or practices by the Company;
reviewing and reporting on the Company’s position on key public policy issues under consideration in federal and state legislative, regulatory and judicial forums;
reviewing, reporting and making recommendations with respect to the Company's relationships with public interest groups, legislatures and governmental agencies as they relate to issues of public policy and its efforts to affect identified public issues through analysis, lobbying efforts, political contributions and other political advocacy efforts;
periodically reviewing the political activities and expenditures of the Company and its political action committees;
reviewing the Company's Political Activity Report prior to its public disclosure;
overseeing the Company's Political Contributions Policy; and
overseeing the management of risks as they relate to the Company’s compliance with regulatory requirements and rapidly changing healthcare, insurance and other legislation.

The Technology Committee’s primary responsibility is to assist the Board in reviewing the Company’s information technology (IT) programs and strategy, including significantly streamlining our technology footprint to create a digitized and seamless member experience. The Technology Committee’s responsibilities include, among others:
reviewing the status of the existing IT programs;
reviewing significant technology opportunities and monitoring the progress of special initiatives;
making recommendations to the Board with respect to IT related projects and investments that require Board approval; and
in conjunction with the Audit Committee, assisting in the oversight of risks associated with our systems and technology, including risks related to cybersecurity, privacy, critical infrastructure and disaster recovery, as well as identifying the potential likelihood, frequency and severity of cyberattacks and breaches.

The Compliance Committee’s primary responsibility is to provide overall compliance oversight of the Company. The Compliance Committee’s responsibilities include, among others:
reviewing the Compliance Program structure;
remaining informed of Compliance Program outcomes, including audit results and governmental enforcement activities;
receiving quarterly reports from the Senior Vice President of Internal Audit, Compliance and Risk Management of the Company, and other members of management in executive session;
reviewing the results of performance audits and monitoring of Medicare operations, as well as effectiveness assessments of the Medicare Compliance Program;
Centene Corporation 15


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

approving and amending as necessary the annual Compliance Program and audit and monitoring schedule;
providing specific guidance and directives to Management for the remediation and implementation of Compliance Program initiatives and updates; and
receiving and considering the reports required to be made by the compliance function regarding critical compliance policies and practices.

The Environmental and Social Responsibility Committee was recently formed in July of 2020 to assist the Board in the development of the Company's strategic plan related to issues of environmental and social importance. The Environmental and Social Responsibility Committee's responsibilities include, among others:
making recommendations to the Board regarding the Company's position on key public policy issues related to environmental and social responsibility, diversity and inclusion, social determinants of health, healthcare reform, correctional healthcare and criminal justice reform, as well as related risks and opportunities; and
making recommendations to the Board regarding the Company's strategy to further develop transparent, industry-leading principles related to the correctional healthcare operations conducted by Centurion, LLC and its affiliated entities (Centurion).

Compensation Committee Interlocks and Insider Participation

Orlando Ayala, Robert K. Ditmore (Chair), Richard A. Gephardt, and David L. Steward are members of the Compensation Committee. During 2020, none of our executive officers served as a director or member of the Compensation Committee, or committee serving an equivalent function of any other entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee. No member of the Compensation Committee had a relationship that must be described under SEC rules relating to disclosure of related person transactions. None of the current members of our Compensation Committee have ever been an officer or employee of Centene or any of our subsidiaries.

Communicating with Independent Directors

The Board will give appropriate attention to written communications that are submitted by stockholders and other interested parties and will respond as appropriate. The Chairman of the Nominating and Governance Committee, with the assistance of our CEO, is primarily responsible for monitoring communications from stockholders and other interested parties and for providing copies or summaries to the other directors as he or she considers appropriate. Under procedures approved by a majority of the independent directors, communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments considered to be important for the directors to know.

Stockholders and interested parties who wish to send communications on any topic to the Board should address such communications to Board of Directors c/o Corporate Secretary, Centene Corporation, 7700 Forsyth Boulevard, St. Louis, Missouri 63105. Any stockholder or interested party who wishes to communicate directly with our Lead Independent Director, or with our non-employee directors as a group, should also follow the foregoing method.
16 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
Director Compensation

The following table summarizes the compensation of our non-employee directors for the fiscal year ended December 31, 2020:
NameFees Earned or
Paid in Cash
($)
Stock 
Awards 
($) 1
Option 
Awards 
($) 1
All Other Compensation
($) 2
Total
($)
Orlando Ayala$117,000 $233,706 $— $— $350,706 
Jessica L. Blume110,000 233,706 — 27,020 370,726 
H. James Dallas13,750 350,978 197,970 25,402 588,100 
Robert K. Ditmore10,000 403,706 — 139,181 552,887 
Frederick H. Eppinger10,000 358,706 — 27,020 395,726 
Richard A. Gephardt123,000 233,706 — 27,020 383,726 
John R. Roberts40,000 358,706 — 27,020 425,726 
Lori J. Robinson110,000 233,706 — — 343,706 
David L. Steward8,000 373,706 — 31,078 412,784 
Tommy G. Thompson8,000 373,706 — 27,020 408,726 
William Trubeck10,000 350,978 197,970 25,402 584,350 
1The amounts reported as Stock Awards and Option Awards reflect the grant date fair value of grants made during the current year under the 2012 Stock Incentive Plan and Non-Employee Directors Deferred Stock Compensation Plan in accordance with ASC 718. There can be no assurance that the grant date fair value of Stock Awards or Option Awards will ever be realized.
2All other compensation includes group excess liability insurance policy premiums paid by the Company. Mr. Ditmore's all other compensation includes $112,161 for personal use of company provided aircraft. In addition, all other compensation includes the Company match of charitable contributions of $25,000 made or pledged during 2020 under the Company's Board of Directors Charitable Matching Gift Program for Ms. Blume, Mr. Dallas, Mr. Ditmore, Mr. Eppinger, Mr. Gephardt, Mr. Roberts, Mr. Steward, Mr. Thompson, and Mr. Trubeck.
 
Non-employee directors currently receive a quarterly retainer fee of $31,250, provided that the director elects to receive 100% of the fee in Company stock and defers settlement of the fee until retirement or termination of the Board under the Company's Non-Employee Directors Deferred Stock Compensation Plan. Directors not making this election receive a quarterly cash retainer fee of $25,000. In addition, the Chairman of the Audit Committee receives a quarterly fee of $7,500, the Chairman of the Compensation Committee receives a quarterly fee of $5,000, and the Chairman of the Nominating and Governance Committee, Government and Regulatory Affairs Committee, Technology Committee, and Environmental, Social, Health and Governance Committee each receives a quarterly fee of $3,750. The Company also pays a quarterly fee of $6,250 to the Lead Independent Director of the Board. All fees are eligible for deferral under the Non-Employee Directors Deferred Stock Compensation Plan. Expense recognized in conjunction with the deferred stock election is included in the “Stock Awards” column in the Director Compensation Table above.

The Board receives additional variable compensation dependent on the number of meetings held annually. Once the number of full Board of Director meetings held exceeds six, non-employee directors receive $2,000 per meeting, not to exceed $20,000 annually. The variable compensation is included within Fees Earned or Paid in Cash in the table above.

As part of non-employee director compensation and to recognize each member's stock holding requirement of 7.5 times the annual cash retainer, each director receives an annual stock grant valued at $200,000 based on the first quarter average stock price prior to the grant. In April 2020, each current member of the Board received a grant of 3,300 Restricted Stock Units (RSUs) of our common stock (target value of $200,000). The Restricted Stock Units vest on the April 2021 Annual Meeting of Stockholders, subject to meeting Board of Director meeting attendance conditions. In addition, each new non-employee director is granted an option under our 2012 Stock Incentive Plan to purchase 10,000 shares of our common stock, vesting in three equal annual installments commencing on the first anniversary of the grant date. Mr. Dallas and Mr. Trubeck both received a grant of an option to purchase 10,000 shares in February 2020, representing a grant date fair value of $197,970 as displayed in the table above.
Centene Corporation 17


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS


The following table shows the number of shares covered by exercisable and unexercisable options and unvested restricted stock held by our non-employee directors on December 31, 2020.
NameOption AwardsStock Awards
Number of Securities Underlying Unexercised Options (Exercisable)Number of Securities Underlying Unexercised Options (Unexercisable)Number of Shares or Units of Stock That Have Not Vested
Orlando Ayala— — 3,300 
Jessica L. Blume13,332 6,668 3,300 
H. James Dallas— 10,000 3,300 
Robert K. Ditmore— — 3,300 
Frederick H. Eppinger— — 3,300 
Richard A. Gephardt— — 3,300 
John R. Roberts— — 3,300 
Lori J. Robinson3,333 6,667 3,300 
David L. Steward— — 3,300 
Tommy G. Thompson— — 3,300 
William Trubeck— 10,000 3,300 
The Board of Directors has approved the Board of Directors Charitable Matching Gift Program. Under the program, the Company will match a Board member's qualifying charitable donations of up to $25,000 per calendar year. Charitable donations must be made to a qualified tax exempt U.S. organization under the Internal Revenue Code Section 501(c)(3) and within the Company's charitable contribution guidelines. The Company also provides a group excess liability insurance policy at no cost to the directors.

Directors are reimbursed for all reasonable expenses incurred in connection with their service. Directors who are also our employees receive no additional compensation for serving on our Board of Directors.

18 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
Corporate Governance and Risk Management

We believe that sound corporate governance is important to ensure that we are managed for the long-term benefit of our stockholders. We also recognize the connection between sound corporate governance and our ability to create and sustain value for our stockholders. Our Ethics and Compliance Program provides methods by which we further enhance operations, safeguard against fraud and abuse and help ensure that our values are reflected in everything we do. We have also reviewed and believe we are in compliance with the provisions of the Sarbanes-Oxley Act of 2002, the applicable SEC rules, and the listing standards of the NYSE. Our Board of Directors has adopted Corporate Governance Guidelines addressing, among other things, director qualifications and responsibilities, duties of key Board Committees, director compensation and management succession. A current copy of the Corporate Governance Guidelines is posted on our website, https://investors.centene.com/corporate-governance/highlights.

Our Board of Directors has adopted a Business Ethics and Code of Conduct Policy (the Policy) which is applicable to all directors, officers and employees of the Company, including the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. While no policy can replace the thoughtful behavior of an ethical director, officer or employee, we believe the Policy will, among other things, focus our Board and management on areas of ethical risk, provide guidance for recognizing and responding to ethical issues, provide mechanisms to report unethical conduct and generally help foster a culture of honesty and accountability. Any amendment to, or waiver of, the Policy involving a director or executive officer may only be made by the Board or a committee of the Board. A current copy of the Policy is posted on our website, https://investors.centene.com/corporate-governance/highlights. Any future amendments of the Policy will be promptly disclosed on our website.
 
Our policy concerning pre-approval of related party transactions is part of our Conflicts of Interest policy that is incorporated into the provisions of the Policy. As part of the Policy, our directors, officers and employees are responsible for disclosing any transaction or relationship that reasonably could be expected to give rise to a conflict of interest to the Ethics and Compliance department of the Company or the Board of Directors, in the case of an executive officer or director, which shall be responsible for determining whether such transaction or relationship constitutes a conflict of interest.

The Board of Directors oversees execution of the Company’s enterprise risk management framework with assistance provided by Board Committees. This oversight is enabled by quarterly risk reporting from executive management that is designed to provide visibility into the identification, assessment, monitoring and management of critical risks, from key areas such as strategy, operations, finance (including investment risk), compliance, and information security. The Board and its committees also consider compensation risk, as well as exposures from regulatory changes and the environment, including climate change and its impact on our business model. In addition, the Board and its committees are informed of emerging risks and opportunities which could impact the Company’s risk profile. Furthermore, this information is combined with other data to evaluate the Company’s performance in relation to tolerance levels established in Centene’s risk appetite framework on a quarterly basis. Management is responsible for executing day-to-day risk activities, and ensuring that enterprise risk management is integrated with strategic decision-making and financial budgeting processes.

As noted above, the Board uses its Committees to assist in its risk oversight function:
Our Audit Committee assists in the oversight of risks related to financial reporting, disclosures, investments, business ethics and conduct, and management policies. The Company's Senior Vice President of Internal Audit, Compliance & Risk Management, who reports to the Audit Committee and CEO, assists the Company in identifying and evaluating risk management controls and methodologies to address risks and provides reports to the Audit Committee quarterly. The Audit Committee also meets privately with representatives from the Company's independent registered public accounting firm and the Company's Senior Vice President of Internal Audit, Compliance & Risk Management.
Centene Corporation 19


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

Our Compensation Committee assists in the oversight of risks associated with our compensation plans and policies. Please see the discussion in the Compensation Discussion & Analysis under the heading “Risk Disclosure” for a discussion of elements intended to mitigate excessive risk taking by our employees.
Our Nominating and Governance Committee assists in the oversight of Board processes and corporate governance-related risk.
Our Government and Regulatory Affairs Committee assists in the oversight of political and regulatory risks.
Our Technology Committee assists in the oversight of risks associated with our systems and technology, including risks related to cybersecurity.
Our Compliance Committee assists in the oversight of overall compliance risks.
In 2020, we established an Environmental and Social Responsibility Committee to oversee and advance our Environmental, Social, Health and Governance (ESHG) initiatives throughout the organization, including diversity and inclusion, social determinants of health, healthcare reform, correctional healthcare and criminal justice reform.

Our Board of Directors and its Committees are supported by our Management Oversight Committee, which formally oversees our enterprise and security risk management functions. The Management Oversight Committee is a cross-functional governance group comprised of certain members of our executive leadership team. The duties of the Management Oversight Committee include:
Oversight of the processes used to identify, assess, respond, and report on risk and compliance issues;
Determine Centene’s risk appetite and risk tolerance levels. All changes are reviewed by the Board;
Review of performance measures against established risk tolerances and recommend corrective action where appropriate;
Review of findings from internal audit activities for accuracy and clarity;
Provide direction for resource allocation to address internal audit findings and/or gaps identified through enterprise and security risk management and Corporate Compliance activities; and
Validate assignment of risk owners associated with identified exposures and monitor plans to address documented findings/gaps.

Proxy Access

Proxy access allows stockholders who meet minimum stock ownership and holding period requirements, and who comply with specified procedural and disclosure requirements, the opportunity to include their director nominees in the Company’s proxy materials. We believe proxy access gives our long-term stockholders a valuable right and enables them to have an important voice in director elections. The following is a summary outlining key details of requirements related to our proxy access By-Law:
Ownership Thresholdat least 3% of the Company's outstanding common stock
Group Ownership a group of 20 or less holders
Ownership Periodat least 3½ years of continuous ownership
Number of Nomineesthe greater of two individuals or 20% of the Board (not to exceed one-half of the number of directors up for election at the annual meeting)
20 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
Environmental, Social, Health and Governance and Corporate Sustainability
esgimage1.jpg

Centene's steadfast commitment to the environment, the health and social well-being of our communities, and our culture of sound and ethical corporate governance extends far beyond individual programs or initiatives. Through the delivery of high-quality health services to at-risk populations, our responsibilities to members, stakeholders, and our planet serve as a living expression of our purpose – transforming the health of communities, one person at a time. Continued focus on environmental, social, and governance (ESG) matters remain foundational to supporting our strategy, long-term sustainability and value creation. A central theme to Centene’s purpose, mission, pillars, and beliefs is the opportunity to shape a better world of healthcare. When discussing corporate sustainability, ‘health’ is included as a separate pillar of reporting on ESHG topics. Throughout 2020, significant progress was made towards improved ESHG reporting. Some of these accomplishments included:
Established the Environmental and Social Responsibility Committee of the Centene Board of Directors. This committee assists the Board of Directors in the oversight of the strategic plan related to environmental and social matters.
Established an ESHG Strategic Framework. This Framework expresses Centene’s commitments to Protect Our Planet, Serve Our Communities, Cultivate Healthier Lives, and Live Our Values while identifying key business areas essential to our success.
Formalized an ESHG Work Group. This group of executives from key corporate functional areas and business units across the enterprise was organized to advance ESHG initiatives throughout the organization.
Became a founding signatory to the Ethical Principles in Health Care (EPiHC). EPiHC is a collaborative effort between the International Finance Corporation and the World Bank to develop a set of principles to promote ethical conduct and to support ethical standards for healthcare delivery.
Became a signatory to the UN Global Compact at the Participant level. The UN Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals.
Became a signatory to the United Nations Women’s Empowerment Principles (WEPs). The WEPs are a set of principles offering guidance to business on how to promote gender equality and
Centene Corporation 21


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

women’s empowerment in the workplace, marketplace, and community. By joining the WEPs community, Centene signals commitment to this agenda at the highest levels of the company and to work collaboratively in multi-stakeholder networks to foster business practices that empower women.
Issued a Political Activity Report. Centene has engaged and will continue to thoughtfully engage in public policy activities, including political contributions that have the potential to improve the delivery of healthcare, and affect our business, employees, and the communities in which we operate. This report sets forth details about political contributions, lobbying efforts, and membership in industry trade associations.
Published a Diversity & Inclusion 2020 Annual Report. Centene's culture stems from a commitment to diversity and inclusion. The launch of this new annual report highlights and communicates our commitment to sustain and advance our vision of conscious inclusion for talent, community engagement, supplier diversity, and stakeholder collaboration. To view or download a copy of our C-Index Diversity & Inclusion Report, please see www.centene.com/who-we-are/corporate-facts-reports.html.
Issued a 2020 ESHG Report to the Community. This report details the key partnerships, initiatives, and programs that exemplify our commitment to the health of our planet, our people, and our enterprise. To view or download a copy of our Report to the Community, please see www.centene.com/who-we-are/corporate-facts-reports.html.

The 2020 ESHG Report to the Community (the Report) establishes a baseline from which Centene will regularly disclose key sustainability information and metrics. The 2020 Report contains relevant ESHG metrics including diversity and employee engagement percentages, community investment, and research and development contributions to enhance access to healthcare. We are continually expanding sustainability reporting and leveraging use of relevant frameworks and standards. Updated and new ESHG and sustainability information will be periodically posted to our external website.


22 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
Additional Environmental, Social, Health and Governance and Corporate Sustainability highlights:

EnvironmentalSocial

Employee United Way contributions raised $4.3 million, with 70% employee participation in 2020

Inclusive and Responsible Workplace required training was paired with Unconscious Bias 101 training cascaded throughout the organization

Employee Inclusion Groups encompass multicultural, veterans and military, LGBTQ+, and networks for women and people with disabilities

50% of the workforce identify as people of color and 75% of the workforce are women*

36% of supervisory positions are held by people of color and 64% of supervisory positions are held by women*

Strong employee engagement demonstrated by results of the 2020 Shaping Centene Employee Engagement Survey, in which 88% of employees reported strong engagement. This surpasses the 75th percentile of Fortune 100 benchmark companies, and is based on responses from more than 92% of Centene employees*

Diversity & Inclusion 2020 Annual Report is posted on our Corporate website
Global headquarters - St. Louis, Missouri highlights:
The newest tower within our corporate headquarters space is LEED Gold certified
36,000 sq. ft. of vegetated roof and over 3,000 sq. ft. of native plantings decreasing energy consumption and water use
Building expansions utilize Sustainable Action Plans
West Coast headquarters Natomas, California highlights:
Electric vehicle charging stations on site for employee use
Low flush and flow fixtures reduce indoor water use by 41%
Energy efficient lighting and HVAC systems reduce energy consumption by 17%
Ribera Salud highlights:
Torrevieja, Vinalopo, Torrejon and Povisa hospitals renewed UNE-EN ISO 14064-1 Certification at the organization level for quantification and reporting of greenhouse gas (GHG) emissions and removals
HealthGovernance
51 Centene subsidiaries hold one or more National Committee for Quality Assurance accreditation
Board responsiveness to feedback, including ongoing stockholder engagement, with director participation, informing Board-level discussion of our practices

11 of 12 directors are independent
6 Centene specialty companies are accredited by URAC
Telemedicine visits increased over 3,000% during the COVID-19 pandemic, enabling access to care
Refreshed Board with 4 of 12 directors appointed since 2018

Member of the CARIN alliance - a bipartisan, multi-sector collaborative working to advance consumer-directed exchange of health information

Provider Accessibility Initiative – This program's goal is to increase the percentage of Centene's providers that meet minimum federal and state disability access standards and received the 2019 Health Equity Award from the Office of Minority Health

Ribera Salud obtained 13 “Top 20 Hospital awards” related to the best global management and medical specialties
Only independent directors serve on the Audit, Compensation, and Nominating and Governance Committees
Government and Regulatory Affairs, Environmental and Social Responsibility, Technology, and Compliance Committees in place in addition to required board committees
The 186 external members of the governing boards of our regulated health plans represent diversity as follows:
l65% Caucasianl8% Hispanic
l39% Femalel5% Asian
l21% African Americanl1% Disability
l11% Veteranl1% Native American
Political Activity Report and policies supporting political activities posted on our corporate website http://investors.centene.com/corporate-governance/highlights
All employees are required to complete annual Privacy and Confidentiality training
*Reflects U.S. employee base

Centene Corporation 23


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

We have received various awards and recognitions reflecting our commitment to ESHG efforts:
Fortune's World's Most Admired Companies - 2021
Bloomberg Gender Equality Index - 2021
Human Rights Campaign Corporate Equality Index Best Places to Work for LGBTQ Equity - 2021
Fortune Change the World List - 2020
Diversity Inc. Top 50 Companies for Diversity - 2020
Diversity Inc. Top Companies for Talent Acquisition for Women of Color - 2020
Disability Equality Index Best Places to Work for Disability Inclusion - 2020
Global Finance Outstanding Crisis Leadership in the "Overall Excellence - Corporate" category - 2020
U.S. Veterans Magazine Top Veteran-Friendly Company - 2020

The Company's Response to COVID-19

Our Business ResponseSupporting Providers and MembersSupporting our Employees

Have taken proactive measures, strengthening liquidity and enabling us to meet operational and strategic needs

Leveraged pre-existing business continuity plans to transition ~90% of our workforce to working from home

Redeployed staff to critical projects

Delivered on key enterprise initiatives

Despite transition to a remote work environment, key operational metrics remain consistent

Waiving of prior authorizations and cost sharing related to COVID-19

Facilitating sourcing, ordering and shipping of ~$15 million of PPE

Providing ~$10 million of community relief funding to food banks, as well as gift cards to purchase essential items

Expanding telehealth services and taking additional steps to support the disability community

Created digital learning experience focused on remote workforce effectiveness

Investing in office enhancements for employee safety and work from home enablement

Covering COVID-19 related cost

Established Medical Reserve Leave policy

Holding virtual career fairs and interviews as we continue to hire for open positions


Also, in response to the COVID-19 pandemic and the Company's decision to spend additional funding to support our members, providers, and employees, management and the Board felt it was important that 2020 bonuses not be increased above target levels.

24 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL ONE: ELECTION OF DIRECTORS

    
The Company's Ambition to be a Technology Company that does Healthcare
Over the next 10 years, we envision the practice of healthcare to change meaningfully. Technology will play a central role in healthcare, including the diagnosis, management and treatment of disease. Drugs and therapies will be developed and designed specifically for each person given their unique genome, proteome and metabolism, and care will be provided virtually and in an increasingly noninvasive manner. In this new world, Centene will be a trusted convener and partner in health, and a leader in the discovery and use of novel approaches to bring about individual well-being throughout life.

We are in a unique inflection point in the digital evolution of healthcare and transformation in this industry. We continue to digitize the administration of healthcare and accelerate innovation and modernization across the enterprise. We can leverage AI capabilities and data science to transform our advanced technology efforts and enrich Centene applications and services. We have the opportunity to lead the digital transformation of healthcare and to create a seamless experience for our members and providers.

We intend for the Centene member experience to be unique for each beneficiary. Benefits will be precisely tailored to achieve the desired well-being. Our goal will be a lack of administrative friction, with operational and payment activities largely automated in the background. We believe that deeper innovation at Centene is a catalyst in the creation of a healthcare learning and discovery platform.

It is through these innovative solutions that we plan to bring about a unique personalized digital healthcare experience for each member, to deliver better health outcomes, and becoming an even more efficient technology organization that does healthcare.
Centene Corporation 25


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL TWO: ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION
Proposal Two: Advisory Resolution to Approve Executive Compensation
At our 2020 Annual Meeting of Stockholders, our stockholders approved the Company's executive compensation. Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are again holding an advisory vote on the Company's executive compensation, as described in this Proxy Statement (commonly referred to as "say-on-pay"). In accordance with the results of the vote we conducted at the 2017 Annual Meeting on the frequency of say-on-pay votes, we present a say-on-pay vote every year.

We encourage stockholders to review the Compensation Discussion and Analysis included in this Proxy Statement. Our executive compensation program has been designed to implement the Company's compensation philosophy of paying for performance by making decisions based on promoting the Company's corporate mission statement and creating long-term stockholder value. As discussed in Section 4 of CD&A, the following principles guide the Company's compensation philosophy:
Pay for Performance;
Create Long-Term Stockholder Value;
Foster a Culture of Risk Management and Compliance; and
Attract and Retain Top Executive Talent.

This philosophy is evidenced by the following:
We provide a significant part of executive compensation in the form of at-risk annual incentive and long-term incentive compensation.
Our annual incentive and long-term incentive opportunities are substantially based on corporate financial measures closely correlated with achieving long-term stockholder value, such as earnings per share, revenue growth targets, pre-tax operating margins and total shareholder return. Annual incentive opportunities are also based on meeting individual goals around compliance, quality and operational excellence. We have withheld or reduced payments under our incentive programs when financial, quality or compliance measures have not been fully achieved.
We provide a mix of short-term, long-term, cash and non-cash compensation that we believe allows us to strike a balance between offering competitive executive compensation packages, motivating our executives without fostering excessive risk-taking and linking Executive Officer compensation with the creation of long-term stockholder value.

The Board of Directors strongly endorses the Company's executive compensation program and recommends that stockholders vote in favor of the following resolution:

RESOLVED, that the stockholders approve the compensation of those NEOs listed in the Summary Compensation Table of this proxy statement, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis and the tabular and narrative disclosure included herein under “Information about Executive Compensation.”





26 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL TWO: ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

Because the vote is advisory, it will not be binding upon the Board of Directors or the Compensation Committee and neither the Board of Directors nor the Compensation Committee will be required to take any action as a result of the outcome of the vote on this proposal. The Compensation Committee strongly considers the views of the Company's stockholders when making compensation decisions. Additionally, the Compensation Committee monitors the results of the annual advisory “say-on-pay” proposal and incorporates such results as one of many factors considered in connection with the discharge of its responsibilities.

The Board recommends a vote “FOR” the approval of the compensation of the NEOs, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
Centene Corporation 27


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal Three: Ratification of Appointment of Independent Registered Public Accounting Firm
KPMG LLP audited our financial statements for the fiscal year ended December 31, 2020. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent external audit firm retained to audit our financial statements. The Audit Committee has appointed KPMG LLP to serve as our independent registered public accounting firm for the current fiscal year, and we are asking stockholders to ratify this appointment. KPMG LLP has been retained as our external auditor continuously since 2005. Stockholder ratification of this selection is not required by our By-Laws or other applicable legal requirements. Our Board of Directors is, however, submitting the selection of KPMG LLP to stockholders for ratification as a matter of good corporate practice. In the event that stockholders fail to ratify the selection, the Audit Committee will consider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee believes that a change would be in the best interests of the Company and our stockholders.

We expect that representatives of KPMG LLP will be present at our Annual Meeting of Stockholders to answer appropriate questions. They will have the opportunity to make a statement if they desire to do so.

The affirmative vote of the holders of a majority of the votes cast at the meeting is being sought to ratify the selection of KPMG LLP as our independent registered public accounting firm for the current fiscal year. The Committee believes the continued retention of KPMG LLP to serve as our independent registered public accounting firm is in the best interests of the Company and our stockholders.
 
The following table discloses the aggregate fees for services related to 2020 and 2019 by KPMG LLP, our independent registered public accounting firm ($ in thousands):
 KPMG
20202019
Audit Fees$16,915$11,821
Audit-Related Fees1,5811,448
Tax Fees615189
 
Audit-related fees in 2020 and 2019 consist primarily of fees for operational control reviews. The Audit Committee is responsible for the audit fee negotiations associated with our retention of KPMG LLP. Tax fees included in the table above relate to tax planning associated with the expansion of our corporate headquarters and international tax matters.

When assessing services rendered by our auditor and evaluating the quality of their work, the Audit Committee considers a variety of factors, including: independence, insight provided to the Audit Committee, ability to meet deadlines and respond to issues, management feedback, and relative costs of services.

In order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent audit firm. The Committee ensures that the mandated rotation of KPMG LLP’s personnel occurs routinely and is directly involved in the selection of KPMG LLP’s lead engagement partner.

The Audit Committee has adopted policies and procedures relating to the approval of all audit, audit-related, tax and other services that are to be performed by our independent registered public accounting firm. This policy generally provides that the Company will not engage its independent registered public accounting firm to render audit, audit-related, tax or other services unless the service is specifically approved in advance by the Audit Committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.
 
28 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

From time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to the Company by its independent registered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.
 
The Audit Committee has also delegated to the Chairman of the Audit Committee the authority to approve audit, audit-related, tax or other services to be provided to the Company by its independent registered public accounting firm. Any approval of services by the Chairman of the Audit Committee pursuant to this delegated authority is reported at the next meeting of the Audit Committee. All audit, audit-related and tax fees for 2020 and 2019 were pre-approved by the Audit Committee or the Audit Committee Chairman, and no fees were paid under the de minimis exception to the Audit Committee pre-approval requirements.

The Board recommends that stockholders vote “FOR” the ratification of the selection of KPMG LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021.
Centene Corporation 29


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
Proposal Four: Approval of the Amendment to the 2012 Stock Incentive Plan, As Amended

The Company's 2012 Stock Incentive Plan, as amended (the 2012 Amended Plan) is comprised of the following:
9,200,000 shares of common stock initially approved;
7,000,000 shares of common stock approved in April 2014;
4,422,812 shares of common stock under the 2003 Stock Incentive Plan that were previously cancelled and converted to shares available under the 2012 Amended Plan;
13,800,000 shares of common stock approved in April 2017, and
10,658,431 shares of common stock assumed with the WellCare Acquisition and converted to shares available under the 2012 Amended Plan.

In January 2020, the Company completed the acquisition of WellCare. In connection with the acquisition, 10,658,431 shares were assumed by the Company from WellCare's 2019 Incentive Compensation Plan and WellCare's 2013 Incentive Compensation Plan (collectively, the WellCare Pool) and consolidated into the 2012 Amended Plan. Shares assumed by Centene from the WellCare Pool into the 2012 Amended Plan are only available for awards to legacy WellCare employees and employees joining the Company after January 23, 2020. A roll forward of the 2012 Amended Plan activity as of December 31, 2020 is shown below:

Total Shares AuthorizedTotal Shares Available
Shares approved under the 2012 Amended Plan30,000,000 5,059,244 
Shares converted from the 2003 Stock Incentive Plan4,422,812 759,452 
Total Shares under the 2012 Amended Plan, prior to the WellCare Acquisition34,422,812 5,818,696 
Assumption of WellCare Pool into the 2012 Amended Plan10,658,431 9,781,184 
Total Shares under the 2012 Amended Plan as of December 31, 202045,081,243 15,599,880 

As of December 31, 2020, a total of 15,599,880 shares were available for future awards under the Company's 2012 Amended Plan, of which 9,781,184 shares are restricted for grant to legacy WellCare employees and employees joining the Company after January 23, 2020.

In February 2021, the Compensation Committee (the Committee) of our Board of Directors adopted amendments to our 2012 Amended Plan (the Amendment) that would (i) increase the number of shares of common stock issuable under the 2012 Amended Plan by up to 15,000,000, subject to adjustment in the event of stock splits and other similar events, (ii) extend the term of the 2012 Amended Plan by approximately ten additional years, through February 22, 2031 and (iii) provide that the maximum number of shares that may be issued pursuant to the exercise of incentive stock options under the 2012 Amended Plan shall be equal to 50,730,061, the total number of shares authorized to be issued under the 2012 Amended Plan. Upon approval of the Amendment, shares remaining under the WellCare Pool will be terminated, resulting in an incremental share increase of 5,218,816, and the shares available under the 2012 Amended Plan will be available to be granted to all employees of the Company. A reconciliation of the Amendment is shown below:
Proposed increase to the 2012 Amended Plan15,000,000 
Termination of net remaining available shares in the WellCare Pool in the 2012 Plan(9,781,184)
Net proposed increase in 2012 Amended Plan5,218,816 
30 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED

A summary of shares available and outstanding as of December 31, 2020 as adjusted to reflect the approval of the Amendment is as follows:
Shares Available, as adjustedShares outstanding
Options outstanding1
Shares approved in connection with this amendment15,000,000 — — 
Shares under the 2012 plan, excluding those assumed in connection with WellCare5,818,696 4,617,968 227,500 
Shares assumed in connection with the WellCare acquisition into the 2012 Plan— 1,307,249 — 
Shares assumed in connection with the WellCare acquisition under the WellCare Stock Incentive Plan— 1,993,835 — 
Total20,818,696 7,919,052 227,500 
1 Options have a weighted-average exercise price of $58.35 and a weighted-average remaining life of 9.4 years.

In considering whether to approve the Amendment, the Committee considered a number of factors including the following:
the number of shares remaining for new awards under the 2012 Amended Plan, taking into account the number only available for awards to legacy WellCare employees and employees joining the Company after January 23, 2020;
the Company's desire to have what it expects to be sufficient capacity under the 2012 Amended Plan to grant equity awards for the next three years;
the Company's historical dilution (the sum of (x) the number of shares subject to equity awards outstanding at the end of the fiscal year and (y) the number of shares available for future grants, divided by the number of shares outstanding at the end of the fiscal year);
the restrictions on granting to all employees from the WellCare Pool; and
the remaining term of the 2012 Plan which prior to the Amendment, would have terminated on April 24, 2022.

The Company attempts to manage the overall dilution resulting from our use of equity compensation while maintaining the ability to attract, motivate and retain talented employees and executive officers. For the three years 2018-2020, the Company’s average gross burn rate, equity overhang and dilution were 0.7%, 1.6%, and 4.0%, respectively. Average dilution for 2018-2020 excluding legacy WellCare shares that are restricted under the terms of the merger agreement was 3.3%.

Based on its review of the relevant considerations, including the fact that the Company’s three-year average gross burn rate based on the 2020 Institutional Shareholder Services calculation was 1.47%, compared to the benchmark of 2.22% for our industry group, the Committee determined that the proposed share increase to the 2012 Amended Plan is in line with our peers as well as necessary to retain equity compensation as an important recruiting and retention tool. The Committee determined in light of these factors, among others including but not limited to those listed above, that it was appropriate to recommend that the Board adopt the Amendment.

The increase in reserved shares under the 2012 Amended Plan will be effective subject to the approval of our stockholders. For a more complete description of the 2012 Amended Plan, as proposed, please see “Summary of the 2012 Amended Plan” below and the copy of the 2012 Amended Plan, included as Appendix B to this proxy statement.
Centene Corporation 31


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED

We use the 2012 Amended Plan to attract and retain talented employees in a highly competitive employment market. Our management carefully considers all proposed grants under the 2012 Amended Plan, and the Committee or Chairman, President and Chief Executive Officer, with authority delegated from our Board, approves all awards.

Our Board believes that our future success depends, in large part, upon our ability to maintain a competitive position to:
attract new employees and executives with competitive compensation packages;
retain our existing executives who are attractive candidates to other companies in our industries;
motivate and recognize our high performing individuals; and
ensure the availability of stock incentives for employees we hire as a result of acquisitions.

In considering the extension of the term of the 2012 Amended Plan, the Committee determined to extend for the maximum period (10 years) consistent with granting incentive stock options thereunder. The Committee also determined to include a cap on the number of incentive stock options, consistent with applicable law.

Accordingly, our Board of Directors believes the 2012 Amended Plan is in our best interests and the best interests of our stockholders and recommends a vote “FOR” the Amendment. In the event the 2012 Amended Plan is not approved at the meeting, the Board will reconsider the alternatives available to help attract, retain and motivate key individuals who are currently our employees or who become employees as the result of any future acquisitions, and the 2012 Amended Plan would continue in effect in accordance with its existing terms.

Summary of the 2012 Amended Plan

The following is a brief summary of the 2012 Amended Plan, as proposed to be amended. A copy of the 2012 Amended Plan, is included as Appendix B to this proxy statement and the following summary is qualified in its entirety by reference to Appendix B.

Types of Awards

The 2012 Amended Plan provides for the grant of:
incentive stock options intended to qualify under Section 422 of the Internal Revenue Code;
non-statutory stock options;
restricted stock and restricted stock units, collectively referred to herein as restricted stock awards;
stock appreciation rights; and
other stock based awards.

Options. Optionees receive the right to purchase a specified number of shares of our common stock at a specified option price and are subject to such other terms and conditions as are specified in connection with the option grant. We may grant options only at an exercise price that is equal to or greater than the fair market value of our common stock on the date of grant. Under present law, incentive stock options and options intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code may not be granted at an exercise price less than the fair market value of our common stock on the date of grant or less than 110% of the fair market value in the case of incentive stock options granted to optionees holding more than 10% of the voting power of the Company. The 2012 Amended Plan permits the following forms of payment of the exercise price of options:
32 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
payment by cash, check or in connection with a "cashless exercise" through a broker;
surrender of shares of our common stock;
any other lawful means (other than promissory notes); or
any combination of these forms of payment.

Restricted Stock. Awards of restricted stock entitle recipients to acquire shares of our common stock, subject to our right to repurchase all or part of such shares from the recipient at the issue price or other stated formula or price in the event that the conditions specified in the applicable award are not satisfied before the end of the applicable restriction period established for such award.

Restricted Stock Units. Restricted stock unit awards entitle recipients to acquire shares of our common stock in the future, and we promise to complete the issuance of stock to the recipient promptly after the award vests. The right to acquire the stock will be subject to terms and conditions established by the Compensation Committee and the shares received may be subject to restrictions or repurchase.

Stock Appreciation Rights. A stock appreciation right, or SAR, is an award entitling the holder upon exercise to receive an amount in common stock determined in whole or in part by reference to appreciation, from and after the date of grant, in the fair market value of a share of common stock. SARs may be based solely on appreciation in the fair market value of common stock or on a comparison of such appreciation with some other measure of market growth such as appreciation in a recognized market index. SARs may be issued in tandem with options or as stand-alone rights. We may grant SARs only at an exercise price that is equal to or greater than the fair market value of our common stock on the date of grant.

Other Stock Based Awards. The Compensation Committee has discretion to issue other stock based awards that have a value based on the value of shares, including but not limited to grants of stock and grants of rights to receive stock in the future. The terms and conditions of other stock based awards, if any, will be determined by the Compensation Committee.

Performance Measures

With respect to restricted stock awards, the Compensation Committee may set performance measures designed to satisfy the requirements of Code Section 162(m) which will be set forth in the award agreement pertaining to the grant of the award. The time period during which the performance measures must be met is called the “performance period.”
net earnings or net income (before or after taxes);
net sales or revenue growth;
net operating profit (before and after taxes);
return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);
cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);
earnings before or after taxes, interest, depreciation, and/or amortization;
gross or operating margins;
productivity ratios;
share price (including, but not limited to, growth measures and total stockholder return);
expense targets;
margins;
operating efficiency;
market share;
Centene Corporation 33


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
customer satisfaction;
working capital targets; and
economic value added (net operating profit after tax minus (the sum of capital multiplied by the cost of capital).

Any of the preceding performance measures that are financial metrics, may be determined in accordance with United States Generally Accepted Accounting Principles (GAAP) or may be adjusted when established (or to the extend permitted under Section 162(m) of the Code, at any time thereafter) to include or exclude any items otherwise includable or excludable under GAAP.

The Compensation Committee may use these performance measure(s) to:
measure our performance, or the performance of any of our subsidiaries and/or affiliates, as a whole or measure the performance of any of our business units, or any of the business units of our subsidiaries and/or affiliates, or any combination thereof, as the Compensation Committee may deem appropriate;
compare any of the foregoing performance measures to the performance of a group of comparator companies, or a published or special index that the Compensation Committee deems appropriate; or
compare our share price (including, but not limited to, growth measures and total stockholder return) to various stock market indices.

Performance measures may vary from performance period to performance period and from participant to participant and may be established on a stand-alone basis, in tandem or in the alternative. The Compensation Committee will have the discretion to adjust the amount payable on a corporation-wide or divisional basis or to reflect individual performance and/or unanticipated factors; however, awards that are designed to meet the performance-based criteria of Code Section 162(m) may not be adjusted upward. Stockholder approval of the 2012 Amended Plan will be deemed to include approval of the various performance award measures identified above.

If applicable tax and/or securities laws change to permit Compensation Committee discretion to alter the governing performance measures without obtaining stockholder approval of such changes, then the Compensation Committee, in its sole discretion, may make such changes without obtaining stockholder approval, provided the exercise of such discretion does not violate Code Section 409A. In addition, if the Compensation Committee determines that it is advisable to grant awards that will not meet the performance-based criteria, then the Compensation Committee may make such grants without satisfying the requirements of Code Section 162(m).

Eligibility to Receive Awards

Our employees, officers, directors, consultants and advisors are eligible to be granted awards under the 2012 Amended Plan. Under present law, however, incentive stock options may only be granted to employees of the Company or any of its subsidiaries. The maximum number of shares with respect to which awards may be granted, including options and stock appreciation rights, to any participant under the 2012 Amended Plan may not exceed 2,000,000 in any calendar year. Assuming the Amendment is adopted, the maximum number of shares that may be issued pursuant to the exercise of incentive stock options under the 2012 Amended Plan will be equal to 50,730,061, the total number of shares authorized to be issued under the 2012 Amended Plan.

Plan Benefits

As of February 26, 2021, almost all employees and eleven non-employee directors were eligible to receive awards under the 2012 Amended Plan, including our ten executive officers. The closing price of our common stock on February 26, 2021 was $58.54.

34 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
The granting of awards under the 2012 Amended Plan is discretionary, and we cannot now determine the number or type of awards to be granted in the future to any particular person or group. Such awards will be granted at the discretion of our Compensation Committee and at this time the Compensation Committee has not determined future awards or who might receive them. Therefore, it is not possible to determine the amount or form of any award that will be granted to any individual in the future. We note that the number of awards granted to our named executive officers in 2020 is disclosed in the Grants of Plan-Based Awards Table and the grant date fair value of such awards are included in the Summary Compensation Table.

Administration

Our Compensation Committee will administer the 2012 Amended Plan. The Compensation Committee will have the authority to grant awards and adopt, amend and repeal the administrative rules, guidelines and practices relating to the 2012 Amended Plan. The Compensation Committee may correct any defect, supply any omission or reconcile any inconsistency in the 2012 Amended Plan or any award under the 2012 Amended Plan. Pursuant to the terms of the 2012 Amended Plan, the Compensation Committee may delegate authority under the 2012 Amended Plan to one or more committees or subcommittees of the Board or one or more of our executive officers, provided that the Board fixes the terms of the awards and the maximum number of shares that any executive officer may grant. Discretionary awards to independent directors may only be recommended by a committee comprised solely of independent directors, and awards made to the CEO must be approved only by a majority of the independent directors of the Board.

Subject to any applicable limitations contained in the 2012 Amended Plan, the Compensation Committee or any committee to which the Compensation Committee delegates authority, as the case may be, will select the recipients of awards and determine:
the number of shares of our common stock covered by options and the dates upon which such options become exercisable;
the exercise price of options;
the duration of options; and
the number of shares of our common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards, including conditions for repurchase, issue price and repurchase price, subject to the restriction on re-pricing described below.

No more than 10% of the total time vested awards, other than (x) a director award or (y) an award granted through the settlement, assumption or substitution of outstanding awards, or through obligations to grant future awards, as a condition of the Company acquiring another entity (Acquisition Awards), granted to an employee may vest or become exercisable in increments greater than one-third of the total award in any period of twelve consecutive months. The Compensation Committee is required to make appropriate adjustments in connection with the 2012 Amended Plan and any outstanding awards to reflect stock splits, reverse stock splits, stock dividends, recapitalizations, combination of shares, reclassification of shares, spin-off, any reorganization and other similar changes in capitalization.

Unless such action is approved by our stockholders and does not cause an outstanding award to become subject to Section 409A of the Code:
no outstanding award granted under the 2012 Amended Plan may be amended to provide for an exercise price per share that is less than the then-existing exercise price per share of such outstanding award (other than in connection with changes in capitalization as described above);
the Compensation Committee may not cancel any outstanding award (whether or not granted under the 2012 Amended Plan) and grant in substitution therefore new awards under the 2012 Amended Plan covering the same or a different number of shares and having an exercise price per share less than the then-existing exercise price per share of the cancelled award; and
no outstanding award granted under the 2012 Amended Plan may be repurchased by the Company at a price greater than the current fair market value of the outstanding award.

Centene Corporation 35


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
Transferability

Transfers of awards under the 2012 Amended Plan will be limited to transfers by will or the laws of descent and distribution, pursuant to qualified domestic relations orders and if permitted by the Compensation Committee, gratuitous transfers for the benefit of immediate family members, family trusts or family partnerships.

Amendment or Termination

No award may be made under the 2012 Amended Plan after February 22, 2031, but awards previously granted may extend beyond that date. The Compensation Committee may at any time amend, suspend or terminate the 2012 Amended Plan, except that:
all material revisions (as defined by the applicable rules of the New York Stock Exchange) to the 2012 Amended Plan will be subject to stockholder approval; and
no award designated as subject to Section 162(m) of the Internal Revenue Code by the Board after the date of such amendment will become exercisable, realizable or vested (to the extent such amendment was required to grant such award) unless and until such amendment will have been approved by our stockholders to the extent such approval is required under Section 162(m).

Termination of Status

The Compensation Committee will determine the effect on an award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a participant and the extent to which, and the period during which, the participant (or the participant's legal representative, conservator, guardian or designated beneficiary) may exercise rights under the award.

Change In Control

Unless otherwise provided in the award agreement, upon the occurrence of a Change in Control (as defined in the 2012 Amended Plan):
any and all outstanding stock options and stock appreciation rights will become immediately exercisable; and
any and all outstanding restricted stock awards that are not vested will vest and any restrictions will lapse.

Notwithstanding the foregoing, in connection with certain types of Changes in Control, the Compensation Committee may instead provide that all outstanding options will terminate and each participant will receive, in exchange therefore, a cash payment equal to the amount (if any) by which (A) the acquisition price multiplied by the number of shares of common stock subject to such outstanding options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such options and (ii) each participant awarded any other award which is denominated in shares of common stock will be paid in cash as determined by the Board in its sole discretion to be consistent with the treatment of options.

U.S. Federal Income Tax Consequences

The following is a summary of the United States federal income tax consequences that generally will arise with respect to awards granted under the 2012 Amended Plan and with respect to the sale of common stock acquired under the 2012 Amended Plan. A participant will be subject to applicable statutory tax withholding by the Company. This summary is based on the federal tax laws in effect as of the date of this proxy statement. Changes to these laws could alter the tax consequences described below. This summary is not intended to be a complete discussion of all the federal income tax consequences associated with the 2012 Amended Plan. Accordingly, for precise advice as to any specific transaction or set of circumstances, participants should consult with their own tax and legal advisors. Participants should also consult with their own tax and legal advisors regarding the application of any state, local and foreign taxes and any federal gift, estate and inheritance taxes.
36 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED

Incentive Stock Options. In general, a participant will not recognize taxable income upon the grant or exercise of an incentive stock option, provided the participant is an employee on the date of exercise or his or her last day of employment was no more than three months (or 12 months if the participant is disabled) before the date of exercise. Instead, a participant will recognize taxable income with respect to an incentive stock option only upon the sale of common stock acquired through the exercise of the option, referred to below as ISO Stock. The exercise of an incentive stock option, however, may subject the participant to the alternative minimum tax.

Generally, the tax consequences of selling ISO Stock will vary depending on the date on which it is sold. If the participant sells ISO Stock more than two years from the date the option was granted and more than one year from the date the option was exercised, then the participant will recognize a long term capital gain in an amount equal to the excess of the sale price of the ISO Stock over the exercise price.

If the participant sells ISO Stock before satisfying the above waiting periods, called a disqualifying disposition, then all or a portion of the gain recognized by the participant will be ordinary compensation income and the remaining gain, if any, will be a capital gain. The amount of the ordinary gain will be: (1) the lesser of (a) the amount realized on the disposition of the shares or (b) the fair market value of the shares on the date of exercise; minus (2) the exercise price of the stock. The amount of capital gain will be the amount not already realized as ordinary gain that the participant realizes upon disposition of the shares that exceeds the fair market value of those shares on the date the participant exercised the option. This capital gain will be a long term capital gain if the participant has held the ISO Stock for more than one year before the date of sale.

If a participant sells ISO Stock for less than the exercise price, then the participant will recognize a capital loss in an amount equal to the excess of the exercise price over the sale price of the ISO Stock. This capital loss will be a long term capital loss if the participant has held the ISO Stock for more than one year before the date of sale.

Non-Statutory Stock Options. As in the case of an incentive stock option, a participant will not recognize taxable income upon the grant of a non-statutory stock option. Unlike the case of an incentive stock option, however, a participant who exercises a non-statutory stock option generally will recognize ordinary compensation income in an amount equal to the excess of the fair market value of the common stock acquired through the exercise of the option, referred to below as NSO Stock, on the exercise date over the exercise price.

With respect to any NSO Stock, a participant will have a tax basis equal to the exercise price plus any income recognized upon the exercise of the option. Upon selling NSO Stock, a participant generally will recognize a capital gain or loss in an amount equal to the difference between the sale price of the NSO Stock and the participant’s tax basis in the NSO Stock. This capital gain or loss will be a long term gain or loss if the participant has held the NSO Stock for more than one year before the date of the sale.

Early-Exercise Alternative. The Compensation Committee may permit a participant to exercise the unvested portion of an option, subject to our right to repurchase the unvested shares. In general, a participant who exercises the unvested portion of an option and then makes a valid election under Section 83(b) of the Internal Revenue Code within 30 days of the exercise date should be taxed as if the underlying shares were vested shares with the consequences described above under “Incentive Stock Options” or “Non-Statutory Stock Options” (whichever is applicable). A participant who exercised the unvested portion of an option and does not make a valid Section 83(b) election within 30 days of the exercise date generally will be treated as having exercised the option to the extent that our repurchase right lapses with respect to the underlying shares. Otherwise, the participant will be taxed as described above under “Incentive Stock Options” or “Non-Statutory Stock Options,” whichever is applicable.

Restricted Stock. A participant will not recognize taxable income upon the grant of an award of restricted stock unless the participant makes a Section 83(b) election. If the participant makes a valid Section 83(b) election within 30 days of the date of the grant, then the participant will recognize ordinary compensation income, for the year in which the award is granted, in an amount equal to the difference between the fair
Centene Corporation 37


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
market value of our common stock at the time the award is granted and the purchase price paid for the common stock. If a valid Section 83(b) election is not made, then the participant will recognize ordinary compensation income, at the time that the forfeiture provisions or restrictions on transfer lapse, in an amount equal to the difference between the fair market value of our common stock at the time of such lapse and the original purchase price paid for the common stock. The participant will have a tax basis in the common stock acquired equal to the sum of the price paid and the amount of ordinary compensation income recognized.

Upon the disposition of the common stock acquired pursuant to an award of restricted stock, the participant will recognize a capital gain or loss equal to the difference between the sale price of the common stock and the participant’s tax basis in the common stock. This capital gain or loss will be a long term capital gain or loss if the shares are held for more than one year from the earlier of the date that the participant made a Section 83(b) election or the forfeiture provisions and restrictions on transfer lapsed.

Restricted Stock Units. A participant will not have income upon the grant of a restricted stock unit. A participant will have compensation income in the amount of any cash delivered and the fair market value of any common stock delivered in payment of an amount due under the restricted stock unit. When stock distributed in settlement of a restricted stock unit is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the date the award was settled. Any capital gain or loss will be long term if the participant held the stock for more than one year, and otherwise will be short term.

Stock Appreciation Rights. A participant will not have income upon the grant of a SAR. A participant will have compensation income upon the exercise of a SAR equal to the appreciation in the value of the stock underlying the SAR. When the stock distributed in settlement of the SAR is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the date of exercise. Any capital gain or loss will be long term if the participant held the stock for more than one year, and otherwise will be short term.

Other Stock Based Award. The tax consequences associated with any other stock based award will vary depending on the specific terms of the award, including whether the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, any applicable holding period and the participant’s tax basis.

Section 409A. Acceleration of income inclusion, additional taxes and interest apply to nonqualified deferred compensation that is not compliant with Section 409A of the Internal Revenue Code. To be compliant with Section 409A, rules with respect to the terms of awards, timing of elections to defer compensation, distribution events and funding must all be satisfied. Most awards under the 2012 Amended Plan are exempt from the Section 409A rules. However, with respect to those awards under the 2012 Amended Plan which could be subject to the Section 409A rules, the 2012 Amended Plan includes provisions which are intended to prevent awards under the Plan from triggering the adverse tax consequences applicable to deferred compensation under Section 409A.

Section 280G and Section 4999. Under Section 280G of the Internal Revenue Code and Section 4999 of the Internal Revenue Code, the Company is prohibited from deducting any “excess parachute payment” to an individual, and the individual must pay a 20% excise tax on any “excess parachute payment.” An individual’s “parachute payments” which exceed his or her average annual compensation will generally be treated as “excess parachute payments” if the present value of such payments equals or exceeds three times the individual’s average annual compensation. A payment generally may be considered a “parachute payment” if it is contingent on a change in control of the Company.

Tax Consequences to Centene

The grant of an award under the 2012 Amended Plan generally will have no tax consequences to us. Moreover, in general, neither the exercise of an incentive stock option nor the sale of any common stock acquired under the 2012 Amended Plan will have any tax consequences to us. We generally will be entitled to a business-expense deduction, however, with respect to any ordinary compensation income recognized by a participant under the 2012 Amended Plan, including in connection with a restricted stock award or SAR
38 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FOUR: APPROVAL OF THE AMENDMENT TO THE 2012 STOCK INCENTIVE PLAN, AS AMENDED
or as a result of the exercise of a non-statutory stock option or a disqualifying disposition. Tax deduction of compensation is generally subject to the limits of Section 162(m) of the Internal Revenue Code. Section 162(m)(6), which was enacted as part of the Patient Protection and Affordable Care Act, amended the Code to limit the amount that certain healthcare insurers and providers, including the Company, may deduct for compensation to any employee in excess of $500,000. This legislation does not create any exceptions for performance-based compensation.

Centene Corporation 39


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FIVE: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
Proposal Five: Approval of the Amendment and Restatement of the Company's Certificate of Incorporation

The Board has adopted, and unanimously recommends that the Company's stockholders approve, a resolution proposing the amendment and restatement of the Company’s Certificate of Incorporation (the Certificate of Incorporation) providing for the removal of the supermajority voting provisions described herein. The full text of the proposed amendment and restatement of the Certificate of Incorporation is set forth in Appendix C to this proxy statement (proposed new text is underlined and proposed deleted text is crossed out) (hereinafter referred to as the Amended and Restated Certificate of Incorporation).

Background

The Company is committed to reviewing and adopting corporate governance practices that are in the interests of both the Company and our stockholders. After reviewing our governance practices and the views of our stockholders, including consideration of the vote on a stockholder proposal on the issue at the Company’s 2020 annual meeting, the Board has decided to adopt amendments to the Certificate of Incorporation to remove the provisions that require a supermajority voting threshold, and has resolved to submit the amendments to the Certificate of Incorporation to our stockholders for consideration.

Proposed Amended and Restated Certificate of Incorporation

The Company’s Certificate of Incorporation currently contains the following supermajority provisions:
Article FIFTH of the Certificate of Incorporation currently states that stockholders may remove a director upon the affirmative vote of at least a 75% of all the issued and outstanding shares of capital stock entitled to vote generally in the election of directors.
Article TWELFTH of the Certificate of Incorporation currently states that the affirmative vote of at least 75% of the voting power of the shares entitled to vote at an election of directors is required to adopt, amend, alter or repeal the Company’s By-Laws.
Article THIRTEENTH of the Certificate of Incorporation currently states that the affirmative vote of at least 75% of the voting power of the shares entitled to vote at an election of directors is required to amend, alter, change or repeal, or adopt any provision inconsistent with the purpose and intent of Articles FIFTH, TWELFTH and THIRTEENTH of the Certificate of Incorporation.

If the Amended and Restated Certificate of Incorporation is adopted, then, upon the affirmative vote of a majority of the holders of record of outstanding shares of common stock of the Company then entitled to vote generally in the election of directors, stockholders may:
remove any director, with or without cause, provided that if the Board is then classified, a director may be removed only for cause;
adopt, amend, alter or repeal any provision or provisions of the By-Laws; and
amend, alter, change or repeal, or adopt any provision of the Certificate of Incorporation, including amending any provision of the Certificate of Incorporation to require approval of a larger portion of the voting power of the shares of common stock than is required by Delaware law.

This general description of the proposed changes to the Certificate of Incorporation is qualified in its entirety by reference to the proposed Amended and Restated Certificate of Incorporation set forth in Appendix C to this Proxy Statement.

If the Amended and Restated Certificate of Incorporation is approved by our stockholders, then the Amended and Restated Certificate of Incorporation will become effective upon its filing with the Delaware Secretary of State. The Board has also unanimously approved certain conforming changes to the Company’s Amended and Restated By-Laws (the By-Laws), contingent upon stockholder approval of the
40 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL FIVE: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
Amended and Restated Certificate of Incorporation. If the Amended and Restated Certificate of Incorporation is not approved by the stockholders, then the Certificate of Incorporation and the By-Laws will remain unchanged and the supermajority provisions will remain in place.

Vote Required. The affirmative vote of at least 75% of the voting power of the shares entitled to vote at an election of directors is required to approve the amendment and restatement of the Certificate of Incorporation.

The Board unanimously recommends a vote “FOR” the amendment and restatement of the Certificate of Incorporation to remove supermajority provisions.


Centene Corporation 41


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL SIX: STOCKHOLDER PROPOSAL TO ELECT EACH DIRECTOR ANNUALLY
Proposal Six: Stockholder Proposal to Elect Each Director Annually

In November 2020, the Company received correspondence from a shareholder, John Chevedden, beneficial owner of Centene common stock, regarding a proposal to elect each director annually as described below.

John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, beneficial owner of no less than 100 shares of Centene common stock as of September 1, 2020, intends to propose the following resolution at the annual meeting.
Stockholder Statement Regarding Proposal to Elect Each Director Annually

Proposal 6 - Elect Each Director Annually

RESOLVED, shareholders ask that our Company take all the steps necessary to reorganize the Board of Directors into one class with each director subject to election each year for a one-year term.

Although our management can adopt this proposal in one-year and implementation in one-year is a best practice, this proposal allows the option to phase it in over 3-years.

Classified Boards like the Centene Board have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to "What Matters in Corporate Governance" by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School.

This is another best practice good governance proposals in the same spirit as the 2020 simple majority vote proposal which received our 93%-support in 2020.

Arthur Levitt, former Chairman of the Securities and Exchange Commission said, "In my view it's best for the investor if the entire board is elected once a year. Without annual election of each director shareholders have far less control over who represents them."

A total of 79 S&P 500 and Fortune 500 companies, worth more than $1 trillion, also adopted this important proposal topic since 2012. Annual election of each director could make directors more accountable, and thereby contribute to improved performance and increased company value at virtually no extra cost to shareholders. Thus it was not a surprise that this proposal topic won 96%-support at United Therapeutics Corporation in 2019.

Annual election of each director can be a first step to make the corporate governance of Centene more competitive and unlock shareholder value.

A number of governance best practices are just waiting to be adopted at Centene by an enlightended Board of Directors. For instance, a shareholder right to call a special shareholder meeting and a shareholder right to act by written consent. Other shareholders can accelerate the adoption of these best practices by submitting shareholder proposals on these important topics.

Please vote yes:
Elect Each Director Annually - Proposal Six
42 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL SIX: STOCKHOLDER PROPOSAL TO ELECT EACH DIRECTOR ANNUALLY

Board of Directors' Statement in Support to Elect Each Director Annually

The Board has carefully considered this proposal and has elected to recommend a vote FOR this proposal, with reservations, as outlined below. Mr. Neidorff abstained from the vote of the Board.

The Board of Directors has evaluated the Company’s classified board structure on numerous occasions to ensure that it is consistent with the best interests of the Company and its stockholders. The Board has consistently determined that a classified board structure provides stability by ensuring that, at any given time, a majority of the directors serving on the Board have substantial knowledge of the Company, its business and its strategic goals. The Board believes that directors who have experience with the Company and deep knowledge about its business and affairs are best positioned to make the fundamental decisions that are key to the Company and its stockholders.

The Board has also concluded that the classified board structure encourages its directors to make decisions in the long-term interest of the Company and its stockholders.

Moreover, the Board believes three-year terms enhance the independence of the non-employee directors by providing them a longer assured term of office, thereby insulating them against pressures from management or from special interest groups who might have an agenda contrary to the long-term interest of stockholders. Finally, as noted above, our By-Laws include a majority voting standard for the election of directors in uncontested elections. As a result, in uncontested elections of directors such as this election, each director must be elected by the affirmative vote of a majority of the votes cast with respect to such director by the shares represented and entitled to vote therefor at the meeting. Therefore, our stockholders can effectively influence the composition of the Board in each annual election by withholding their votes from any nominee for any reason.

Nevertheless, the Board recognizes that, like the proponent, a number of significant stockholders and institutions disagree, and also believes that responsiveness to this perspective is an important matter of corporate governance. Accordingly, after careful consideration of the issue in accordance with its fiduciary duties, the Board has determined to recommend a vote to approve the proposal.

Centene stockholders should be aware that this stockholder proposal is simply a request that the Board take the actions stated in the proposal. Approval of this proposal would not effectuate the declassification of the Board. Under Delaware law and Centene’s Certificate of Incorporation, to change the structure of the Centene Board, the Company’s stockholders must approve an actual amendment to the Company’s Certificate of Incorporation, which amendment requires a recommendation from the Board prior to submission to stockholders. As currently constituted, a 75% vote of the outstanding shares would be required for approval of an amendment the Company’s Certificate of Incorporation to effectuate this change.

The Board will evaluate the results of the vote on this proposal and will consider such an amendment if doing so is consistent with the Board’s fiduciary duty to act in a manner it believes to be in the best interest of Centene and all of its stockholders. If the proposal receives significant shareholder support, the Board anticipates that it would put such an amendment before the stockholders at Centene’s 2022 annual meeting of stockholders, which would give the Board and Centene time to evaluate, plan and implement the change to a declassified structure.

While the Board believes there is a strong argument to the contrary, the Board has elected to recommend that stockholders vote “FOR” the proposal to provide for the annual election of directors.

Centene Corporation 43


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
AUDIT COMMITTEE REPORT
Audit Committee Report

The Audit Committee operates under a written charter adopted by the Company’s Board of Directors. The charter outlines the Audit Committee’s duties and responsibilities. The Audit Committee reviews the charter annually and works with the Board of Directors to amend the charter, as necessary, based on the Audit Committee’s evolving responsibilities. The Audit Committee charter is available on the Company’s website at investors.centene.com/corporate-governance.

The Audit Committee of the Company’s Board of Directors consists of four non-employee directors who are independent under the rules of the NYSE, the rules of the SEC and the Company's Standards for Director Independence. Three of the Audit Committee members are considered Audit Committee Financial Experts as defined by the SEC and all are financially literate under the applicable NYSE rules. The Audit Committee assists the Board of Directors in its oversight of the accounting and financial reporting process of the Company. Specifically, the Audit Committee has responsibility for providing independent objective oversight of the accounting and financial reporting process of the Company, selecting and evaluating the independent registered public accounting firm, which reports directly to the Audit Committee and oversees the performance of the Company's internal audit function.

Management has the primary responsibility for the preparation of the Company's financial statements and the overall reporting process, for maintaining adequate internal control over financial reporting and, with the assistance of the Company's internal auditors, for assessing the effectiveness of the Company's internal control over financial reporting. The Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States)(the PCAOB), expressing an opinion as to the conformity of the financial statements with generally accepted accounting principles in the United States of America, and auditing management's assessment of the effectiveness of internal control over financial reporting. KPMG LLP has served as the Company's independent registered public accounting firm since 2005.

Management represented to the Audit Committee that the financial statements were prepared in accordance with generally accepted accounting principles and that there were no material weaknesses in its internal control over financial reporting. The Audit Committee met and held discussions with management and KPMG LLP to review and discuss the financial statements and the Company's internal control over financial reporting. The Audit Committee has also discussed with KPMG LLP the firm’s judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed by the applicable requirements of the PCAOB and the SEC. KPMG LLP also provided the Audit Committee with the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence. The Audit Committee has discussed with KPMG LLP their independence with respect to the Company, including a review of audit and non-audit fees and services and concluded that KPMG LLP is independent.

In fulfilling its oversight responsibilities for reviewing the services performed by KPMG LLP, the Audit Committee has the sole authority to select, evaluate and replace the outside auditors. The Audit Committee discusses the overall scope of the annual audit, the proposed audit fee, and annually evaluates the qualifications, performance and independence of KPMG LLP as independent registered public accountants and the performance of its lead audit partner. The Audit Committee meets regularly with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their respective examinations, the evaluation of the Company's internal control over financial reporting and the overall quality of the Company's accounting.

44 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
AUDIT COMMITTEE REPORT



Based upon the review and discussions with the Company’s management and KPMG LLP referred to above, and its review of the representations and information provided by management and KPMG LLP, the Audit Committee recommended to the Board that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the Securities and Exchange Commission. The Audit Committee also reappointed KPMG LLP to serve as the Company’s independent registered public accounting firm for 2021.
  
AUDIT COMMITTEE

John R. Roberts, Chair
Jessica L. Blume
Frederick H. Eppinger
Tommy G. Thompson


Centene Corporation 45


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Information About Executive Compensation
Compensation Committee Report

The Compensation Committee, comprised solely of independent directors, has reviewed and discussed the “Compensation Discussion and Analysis” with the Company's management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this proxy statement on Schedule 14A and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
 
COMPENSATION COMMITTEE

Robert K. Ditmore, Chair
Orlando Ayala
Richard A. Gephardt
David L. Steward

46 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This CD&A describes the principles, objectives, and compensation policies and arrangements of our executive compensation program which is generally applicable to each of our senior officers. This CD&A focuses primarily on our Chairman, President, & CEO and the other executive officers included in the Summary Compensation Table, whom we collectively refer to in this proxy as our Named Executive Officers (NEOs). For 2020, our NEOs were:
Michael F. Neidorff, Chairman, President, and Chief Executive Officer
Jeffrey A. Schwaneke, Executive Vice President, Chief Financial Officer
Mark J. Brooks, Executive Vice President, Chief Information Officer
Brandy L. Burkhalter, Executive Vice President, Chief Operating Officer
Jesse N. Hunter, Executive Vice President, Mergers and Acquisitions & Chief Strategy Officer
Kenneth A. Burdick, former Executive Vice President, Markets and Products and former CEO of WellCare Health Plans, Inc.

Centene Corporation 47


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
The contents of this CD&A are organized as follows:
SECTION 1 - Executive Summary
SECTION 2 - Stockholder EngagementlResults of the April 2020 “Say-on-Pay” Vote
lStockholder Outreach and Engagement Efforts
SECTION 3 - 2020 Compensation Decisions
lAlignment of Pay and Performance
l2020 NEO Compensation Overview
lPay Mix
lTarget Pay Review
lBase Salaries
lAnnual Cash Incentive Plan
lAnnual Cash Incentive Performance
lLong-Term Incentive Awards
l2018-2020 Performance-Based Restricted Stock Unit Award Results
l2018-2020 Cash Long-Term Incentive Plan Award Results
SECTION 4 - Compensation Philosophy
lOverview of Compensation Best Practices
lCompetitive Pay Philosophy
– Healthcare Industry Peer Group
– General Industry Group
lBenchmarking Methodology
l2021 Annual Cash Incentive
– Must Meet Adjusted EPS Objective (Funding of Bonus)
– Allocation of Bonus Payout for 2021
l2021-2023 Long-Term Incentives
lComments about Performance Targets
lOther Benefits
SECTION 5 - Other Compensation Policies and InformationlStock Ownership Guidelines
lHedging and Pledging Policies
lRisk Disclosure
lEmployment Contracts, Termination of Employment Arrangements, Change in Control Arrangements, and Retirement Provisions
– CEO Employment Agreement
– Offer Letter Agreement
– Severance and Change in Control Agreements
– Retirement Provisions
lDeductibility of Executive Compensation

48 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

SECTION 1 - Executive Summary

We are a leading multi-national healthcare enterprise that is committed to helping people live healthier lives. We take a local approach - with local brands and local teams - to provide fully integrated, high-quality, and cost-effective services to government sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. We also provide education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services.

In January 2020, we acquired all of the issued and outstanding shares of WellCare Health Plans, Inc. (WellCare) The transaction was valued at $19.6 billion, including the assumption of $1.95 billion of outstanding debt. The combined company creates a premier healthcare enterprise focused on government-sponsored healthcare programs and a leader in Medicaid, Medicare and the Health Insurance Marketplace, with more than 25 million members across all 50 states, or 1 in 15 individuals across the nation.

In 2020, the COVID-19 pandemic created unique and unprecedented challenges. We responded to these challenges by demonstrating our commitment to our members, employees, shareholders and partners through our actions and investments. Despite the challenges brought by the pandemic, the Company successfully executed the closing and integration of WellCare and delivered strong top and bottom line growth. Our financial performance is summarized as follows:
Total revenues of $111.1 billion, an increase of 49% over 2019.
Diluted EPS of $3.12, a decrease of (1)% over 2019 due to acquisition related costs and amortization of acquired intangibles in connection with the WellCare acquisition.
Adjusted Diluted EPS of $5.00, an increase of 13% over 2019.
Operating cash flows of $5.5 billion.
Return on Equity of 9% in 2020, and a three year average of 10%.
Return on Assets of 3% in 2020, and a three year average of 3%.
Return on Invested Capital of 5% in 2020, and a three year average of 6%.
A slight decrease in stock price by (5)%.

Overall, our three-year Compound Annual Growth Rates (CAGR) have been:
Total revenues of 32%;
Diluted EPS of 10% and Adjusted Diluted EPS of 26%;
Net earnings attributable to Centene Corporation of 30%;
Adjusted EBITDA of 40%;
Cash flow from operations of 55%; and,
Stock price of 6%.
chart-21b01dd6c30a48f2ac41.jpg chart-ab3b85c6b9114aa483f1.jpg chart-c50b0fad58f647d48be1.jpg
Refer to Appendix A for reconciliations of non-GAAP measures included throughout this proxy statement.
Centene Corporation 49


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
SECTION 2 - Stockholder Engagement
Results of the April 2020 “Say-on-Pay” Vote

The Compensation Committee monitors the results of the annual advisory “say-on-pay” proposal and considers such results as one of many factors in connection with the discharge of its responsibilities. We were disappointed that, although our 2020 say-on-pay vote was approved by our stockholders with approximately 67% of stockholders voting in support, it was below what the Board and management consider satisfactory.

We actively seek input from stockholders on compensation and governance matters and are always open to new ideas. As discussed below, during 2020, we extended meeting invitations to 31 stockholders (representing approximately 70% of our outstanding shares) and ultimately met with 15 stockholders (representing approximately 53% of our outstanding shares). Stockholders expressed a wide variety of views about executive compensation.
Stockholder Outreach and Engagement Efforts

We believe that regular outreach and engagement with stockholders is a key pillar of strong corporate governance. We seek to better understand the issues that are important to our stockholders and incorporate feedback into the Board's decision-making process. Members of our management team and Board regularly meet with stockholders to gather their perspectives on key topics including our performance and strategy, corporate governance, executive compensation, human capital management and corporate responsibility.

Beyond our governance-focused engagement, our investor relations team and members of our senior management team regularly communicate with investors in connection with quarterly earnings calls, investor and industry conferences, analyst meetings and individual discussions with stockholders.

The Board of Directors was disappointed by the relatively low support for the advisory say-on-pay proposal at our 2020 Annual Meeting. In response, we conducted extensive outreach to understand how we can best address our stockholders' concerns. Richard Gephardt, an independent director and member of the Compensation Committee, personally led a number of these engagements, and feedback from all meetings was presented to the Compensation Committee at our December 2020 meeting.

As described in the diagram below, we report stockholder feedback regularly to our Board, which in turn uses this feedback to evaluate any changes to the Company's practices year-round.


50 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION



Our Year-Round Stockholder Engagement Process

Conduct meetings with our largest stockholders, discussing corporate governance, corporate responsibility and executive compensation matters and solicit feedback.
Share feedback with the Board for discussion and consideration.
outreach51.jpg

Incorporate feedback from stockholder meetings into annual meeting planning, including potential changes to corporate governance practices, the executive compensation
program, and corporate responsibility.
Review stockholder
proposals and determine
next steps.
Review annual meeting results, ongoing stockholder feedback and determine any next steps, including corporate governance and compensation trends to help develop stockholder engagement priorities.Conduct investor meetings in advance of the annual meeting to answer questions about proxy proposals and obtain stockholder feedback.

Who We Engaged With Since our 2020 Annual Meeting

engaged1.jpg
Centene Corporation 51


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
The table below highlights how we responded to stockholder feedback in several areas. We report stockholder feedback to our Board on a regular basis throughout the year.

We received stockholder feedback in the following areas:Our Board responded with the following actions:
Disclosure of Short-and Long-Term Incentive Program StructureWe have increased disclosure regarding the design and structure of our incentive programs, including additional disclosure of our target-setting process and the rigor of goals. For more details, refer to our Annual Cash Incentive Plan discussion.
Eliminating Single-Trigger Equity Acceleration ProvisionBeginning with our December 2020 grants, all equity grants will be subject to a double-trigger vesting acceleration in the event of a change-in-control.
Transparency around Management Succession PlanningWe have substantially expanded our disclosure of Centene's comprehensive succession planning processes, and have provided more detail on the role of the Nominating and Governance Committee in considering potential successors to the CEO.
Environmental Sustainability InitiativesIn July 2020, we formed an Environmental and Social Responsibility committee comprised of independent directors, which is responsible for assisting management in the development of the Company's strategic plans related to issues of environmental and social importance. Additionally, in an effort to further enhance our disclosures, we published a 2020 Report to the Community on ESHG topics.
Board RefreshmentWe have added three new independent directors to the Board within the last 18 months, and our Board is now 42% diverse by gender or ethnicity.
Political ContributionsWe posted the revised political contributions policy on our website to highlight a political activity report that will be reviewed by the Government and Affairs Committee.
COVID-19 ResponseWe demonstrated our commitment to our members and the communities we serve, employees, providers and government partners. For more details, refer to our ESHG and Corporate Sustainability section.



52 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

SECTION 3 - 2020 Compensation Decisions
Alignment of Pay and Performance

In 2020, the Company delivered revenue and adjusted EPS growth, which are key to our strategy to promote long-term shareholder value in a competitive business environment. Our revenues increased 49% over 2019, with a 32% three-year compound annual growth rate. The Company also achieved three-year compound annual growth rates of 10% and 26% for Diluted EPS and Adjusted Diluted EPS, respectively. When reviewing the NEOs' compensation, the Compensation Committee considered the value of our senior executives, who are some of the most talented in our industry. Our NEOs' total incentive compensation opportunities are contingent on their ability to achieve our growth and profitability objectives and create sustainable long-term value for our stockholders. When reviewing the NEOs' compensation with our independent executive compensation consultant, the Compensation Committee considered these aspects in conjunction with our executive compensation program of recognizing pay for performance through the following three primary components:
Base Pay+Cash Awards Under Our Annual Incentive Plan+Long-Term Incentives
Performance-Based RSUs
Time-Based RSUs Stock Options
Cash LTIP

The Company's 2020 performance included the successful integration of WellCare, enterprise-wide operational efficiencies, and continued high growth and profitability during a pandemic where we supported our 25 million members, our providers and our employees.

The Board of Directors acknowledged this success and also the importance of our CEO's leadership, especially in an unprecedented year which involved a transition to work from home for over 90% of our employees. The Board of Directors also recognized his 24 years of tenure in which he has fostered sustained high growth and strong profitability. The Compensation Committee, together with our independent executive compensation consultant, analyzed our CEO's total historical compensation. Based on their review, they determined that total compensation in 2020 continues to mirror the overall growth in revenue, our Total Shareholder Return (TSR), Revenue, and Adjusted Diluted EPS over the last five years.
Centene Corporation 53


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

Our CEO's total compensation alignment with these metrics is illustrated in the following graphs:

chart-41a1b393ea9f460f8bc1.jpg



chart-02f8b07eb41a4cb58be1.jpg
54 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION



chart-7c0fb33a78714b4c98f1.jpg



Centene Corporation 55


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
2020 NEO Compensation Overview

The following is an overview of our 2020 executive compensation program. Our executive compensation plans are designed to attract and retain key executives integral to the Company's success and aggressive growth strategy. Compensation is centered on long-term incentives and variable performance-based compensation designed to align our executive's pay with the Company's long-term objectives and value brought to our shareholders.

chart-3606825f02c849718c81.jpg

Annual Incentive Plan

Performance Measure% Weight
Adjusted Diluted EPS Target70%
General and Administrative Expense Management15%
Individual Performance Objectives15%
Bonus pool is not funded unless EPS objective is achieved.


Long-Term Incentive Plan
Three-Year Performance-Based RSUs (60% of equity)Service-Based RSUs (40% of equity)
Pre-tax Margin (60%)Ratable vesting over three-year period
Compound Annual Revenue Growth (40%)
Three-Year Cash LTIP
Three-year Relative TSR vs. HCI Peer Group (50%)Pre-tax Margin (30%)Compound Annual Revenue Growth (20%)
Increased pre-tax margin target for 2021-2023 Cash LTIP and PSUs. New goal is significantly higher than the prior target and the actual level of achievement during the most recently completed performance cycle.
Aggressive and rigorous goals require strong performance to earn target payout and extraordinary performance to earn maximum payout.

Pay Mix

Our pay for performance philosophy can be further depicted by the following graph, which represents our total compensation mix. This pay mix exemplifies that the fixed amount of compensation is only 7% for our CEO and, on average, 12% for all NEOs, resulting in approximately 88% of pay being variable for all NEOS. The graph below illustrates the 2020 values contained in the Summary Compensation Table as percentages of total compensation. The values in the “All Other Compensation” column of the Summary Compensation Table have been excluded from this illustration. 
56 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION


chart-4c2ea65728d7447d89d1.jpg
Target Pay Review

Consistent with our compensation philosophy, the Compensation Committee reviewed the target compensation and respective market data of two groups: general industry (GI) and our healthcare industry peer group (HCI). The review of the data indicated that Mr. Neidorff's total target 2020 compensation was appropriate for an experienced, seasoned leader who continues to drive out-performance for our stakeholders. In determining his compensation, the Compensation Committee also recognized Mr. Neidorff's 24 years of experience as a CEO; his ability to grow the revenue of Centene during his tenure from approximately $300 million in 2001 at the Company's initial public offering, to over $100 billion in 2020; and, his execution of transforming the healthcare landscape in the United States.

The following highlights some of the aggressive and rigorous financial goals met in 2020:
three-year compounded revenue growth of 32%;
shareholder return of 19% on investment from 2018 - 2020, resulting in a payout below target in our long-term cash incentive plan;
strong adjusted pre-tax margin and adjusted diluted EPS growth; and
completion of the acquisition of WellCare in January 2020, creating a $100 billion enterprise.

As shown above, Mr. Neidorff's base pay is only 7% of his total pay mix which indicates the willingness of the Board to only pay when aggressive performance metrics are met. The Board has once again set rigorous growth and financial targets for the 2021-2023 performance cycle.

The HCI peer group and GI peer group are discussed in further detail under Section 3 of the CD&A under the headings "Healthcare Industry Peer Group" and "General Industry Group," respectively.

A similar analysis of peer data sets is performed of the other NEOs' compensation. The Compensation Committee reviews the performance of each individual and aligns compensation based on these results.
Base Salaries
In December 2019, the Compensation Committee evaluated the 2020 base salaries of our NEOs and took into account the Company's 2020 estimated revenue of approximately $100 billion. In 2020, our NEOs' base salaries were compared to competitive market data and the Compensation Committee believed an increase in base salaries was required to reflect the increased size and complexity of the business. The Compensation Committee also recognized the enhanced responsibility of the integration of the WellCare acquisition and made appropriate base salary adjustments effective January 1, 2020 prior to the pandemic.

Centene Corporation 57


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
The NEOs were paid competitive base salaries determined by the evaluation of multiple factors: business results for the prior year, individual performance, and the market value for each specific job. Since Centene is a pay for performance company, only 7% of the CEO’s compensation is comprised of base salary and, on average, only 12% of the other NEOs' compensation is comprised of base salary.

While reviewing market data to determine appropriate annual base salaries, the Compensation Committee also considers:
the CEO's compensation recommendations for all other NEOs;
the scope of responsibility, experience, time in position and individual performance of each officer, including the CEO;
each executive's leadership performance and potential to enhance long-term stockholder value; and
internal equity.
Annual Cash Incentive Plan
The Compensation Committee assigned an annual cash incentive plan target opportunity of 150% of base salary for the CEO and 100% of base salary for the other NEOs based on a review of industry data, as discussed in Section 4: Compensation Philosophy. The Compensation Committee rewards NEOs with an annual cash incentive bonus if the Company achieves its Adjusted Diluted EPS objective.

The Adjusted Diluted EPS objective is established during our annual business planning process. The Compensation Committee approved a target level of performance for each administrative, operating, health plan and subsidiary company that represents a meaningful improvement above our 2019 performance. Our annual business plan is developed each year based on a pay for performance mentality with rigorous performance metrics that the Compensation Committee believes are challenging but attainable for our short-term and long-term incentive programs. In addition, the metrics evaluate our business environment and incorporate initiatives and investments during the year that will have not only have a near-term benefit but also are set for longer-term impact on our business.

While the Company continues to execute on their rigorous growth strategy, the Compensation Committee continues to set metrics that reflect a continued focus on increased profitability. As illustrated below, based upon the approved Adjusted Diluted EPS metrics (excluding WellCare), the Compensation Committee has increased these profitability targets for 2020.

ThresholdTargetMaximumActual Results
% of Target50%100%200%
2020$4.64$4.74$4.90$5.00
2019$4.08$4.17$4.33$4.42

The Committee assessed how each NEO contributed to achieving this Adjusted Diluted EPS objective and other pre-determined objectives approved by the Compensation Committee at the beginning of the year. For NEOs, the Compensation Committee determined that 70% of the 2020 annual bonus payout would be based on reaching specific EPS targets and 15% would be based on general and administrative expense management. In addition, the Committee also determined that at least 15% of an NEO's target award would be aligned with individual performance objectives based on the following factors:
Leadership
Diversified Growth                
Financial Discipline
Operational Excellence
Quality
58 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION


The Compensation Committee then followed a two-step process to determine the bonus earned for 2020:

1.Achievement of EPS Objective. The Company's 2020 Adjusted Diluted EPS was $5.00 and exceeded the target by $0.26 per share. The Compensation Committee assessed these results as exceptional, along with other leadership measures and the successful integration of WellCare.

In response to the COVID-19 pandemic and the Company's decision to spend additional funding to support our members, providers, and employees, the Compensation Committee exercised negative discretion and capped the annual cash incentive payouts. The Company’s performance would have resulted in higher than target bonus payments for our executives; however, given the ongoing pandemic, management and the Board felt it was important that 2020 bonuses not be increased above target.

2.Evaluation of General and Administrative Expenses. The Compensation Committee assessed the management of general and administrative expenses against the Company's annual business plan.

3.Evaluation of Individual Performance. Based on input from management, the Compensation Committee assessed each NEO's individual performance against pre-determined goals and while goals of the NEOs met or exceeded performance targets, the Compensation Committee believed strongly that 2020 bonuses should be limited to the target payout in light of the pandemic. A summary of each NEO's individual performance, along with their total 2020 Annual Cash Incentive follows.

Centene Corporation 59


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Annual Cash Incentive Performance
NameIndividual Performance2020
Annual
Cash Incentive Paid ($)
% of Target Paid
Michael F. Neidorff
Drove total revenues up 49% to $111 billion and increased Adjusted Diluted EPS to $5.00, an increase of 13% over 2019, while achieving a Return on Equity of 9%, Return on Invested Capital of 5% and Return on Assets of 3% for 2020 and an overall three year average of 10%, 6% and 4%, respectively.
Completed the successful closing and integration of the acquisition of WellCare, which was announced in March 2019 and closed in early 2020, creating a premier healthcare enterprise focused on government sponsored health care programs covering more than 25 million members in all 50 states.
In continuing to enhance our people priorities, named to Bloomberg's 2021 Gender-Equality Index, named one of the Best Places to Work by the Human Rights Foundation, and joined the United Nations Global Compact and adopted the Women's Empowerment Principles to Advance Equity.
Supported the business, as well as its members, providers, and employees, through an effective response to COVID-19 that led the company to a placement of 14th in Forbes Top 100 Corporate Responders rankings.
$2,700,000100%
Jeffrey A. Schwaneke
Exceeded consolidated financial performance targets for 2020, including Total Revenues, Adjusted Diluted EPS, and SG&A Ratio.
Successfully executed the closing and integration of WellCare, including the integration of key finance systems, leading the Company to the achievement of projected cost synergies in 2020.
Reduced the Company's overall leverage by more than 150 basis points prior to new acquisitions in the fourth quarter, and refinanced $4.2 billion of senior notes at Company-low interest rates, leading to significant annual savings.
$925,000100%
Mark J. Brooks
Effectively maintained and improved the company's IT infrastructure as the entire organization moved to a work from home disposition and achieved a 98% work from home customer satisfaction rating.
Improved member experience through the implementation of next generation case management software and the successful migration of call center platforms.
Accommodated all new growth, including Marketplace and Medicare expansion, and integration activities by completing all new market plan implementations and expansions timely and within budget, while improving overall systems availability.
$700,000100%
Brandy L. Burkhalter
Successfully led the infrastructure builds for both Health Insurance Marketplace expansion into more than 400 additional counties and two new branded states, as well as Medicare expansion into more than 250 additional counties and two new states.
Achieved all organization synergies and Centene Forward targets for 2020 and placed the Company in a position to deliver significant run rate savings for 2021.
Enhanced the member and provider experience through the improvement of first call resolution rates and established an operational discipline around reducing claims rework, leading to 2020 rework rates that were approximately 20% lower than historical averages.
$825,045100%
Jesse N. Hunter
Led and executed multiple M&A transactions consistent with our strategy and investment criteria in 2020, including the closing of WellCare for $19.6 billion, the related divestiture of three subsidiaries, and the acquisitions of Apixio and PANTHERx in the fourth quarter.
Launched the Company's 2025 strategic plan, which aims to continue expansion into the next generation of healthcare, while further enhancing the service provided to members, providers, and communities.
Successfully executed multiple innovation programs, including SPARK and rural health transformation.
$785,000100%
Kenneth A. Burdick
Advanced the effective integration of WellCare, helping bring the benefits of the strategic combination to our members, communities, employees, and shareholders.
Provided oversight and guidance that helped optimize the performance of the Medicare Advantage product and position the Company for significant product growth in 2021.
Maintained health plan oversight for the Company's growing portfolio, which added more than 30 products in 12 markets and expanded prescription drug coverage to all 50 states during 2020.
$2,100,000100%

60 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

Long-Term Incentive Awards
The Compensation Committee granted long-term incentives to our NEOs in December 2020 based on a review of industry data, as follows:
Performance-based Restricted Stock Units (PSUs) (60% of full value shares granted) - The target metrics for the 2021 - 2023 performance period are pre-tax margin (60% weight) and compound annual revenue growth (40% weight). Threshold, target and maximum metric achievement will result in 50%, 100% or 200% attainment of each metric, respectively. If earned, PSUs will vest in February 2024.
Service-based Restricted Stock Units (RSUs) (40% of full value shares granted) - One-third vest annually based on service to the Company.
Stock Options for Chairman, President & CEO - One-third vest annually based on service to the Company.

In order to more closely align the interests of Mr. Neidorff and our stockholders, the Compensation Committee made the decision to use stock option grants in our CEO’s equity-based pay. We view stock options as inherently performance-based, requiring the management team to drive stock price appreciation in excess of the exercise price before the expiration date, or else the realized value of these stock options will be $0. We also view stock options as easy to understand and as long-term focused.

Our committee strongly believes that stock options encourage retention through the vesting period and incentivize performance since the options only have value to the extent the market value of our stock increases. Under the leadership of Mr. Neidorff, Centene has meaningfully outperformed its peers and the broader market on total stockholder return, and we believe that by granting stock options, this will ensure the long-term success of Centene and our stockholders.

As we continue to look for ways to modify our compensation structures to more closely align with stockholder interests, we expect to introduce this structure to our other NEOs beginning with the December 2021 annual equity grants.

Cash Long-term Incentive Plan (Cash LTIP) - The target metrics for the 2021 - 2023 performance period are pre-tax margin (30% weight), compound annual revenue growth (20% weight), as well as a relative Total Shareholder Return objective (50% weight). Threshold, target and maximum metric achievement will result in 50%, 100% or 200% attainment of each metric, respectively.

The Compensation Committee continues to focus on these key metrics (revenue growth, pre-tax margins and TSR) as they reflect our commitment to top and bottom line growth, as well as, shareholder return. The Compensation Committee has the discretion to evaluate the metrics on an "as adjusted" basis, and exclude certain one-time acquisition related transaction costs, the impact of the health insurer fee moratorium, impairments, and debt extinguishment costs in evaluating the pre-tax margin metric criteria, to align the Company's performance in a manner that is consistent with how we believe investors evaluate our financial results.
Centene Corporation 61


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
2018-2020 Performance-Based Restricted Stock Unit Award Results
In December 2017, the Compensation Committee established the following metrics, targets and weights for the 2018 - 2020 Performance-Based restricted stock awards. The Company met or exceeded both targets as shown below with a total percentage earned at 152.0% of the target:
Metric CriteriaWeight2018 - 2020 ActualMetric Payout of TargetWeighted Payout
ThresholdTargetMaximum
Pre-tax Margin (As Adjusted)2.75%3.25%4.25%60%3.45%120%72.0%
Compound Annual Revenue Growth Rate
7.5%10.0%15.0%40%23.3%200%80.0%
100%152.0%

The amounts earned by each NEO at 152.0% are reflected in the table below:
NameTargetVested Shares
Michael F. Neidorff192,000291,840
Jeffrey A. Schwaneke36,00054,720
Mark J. Brooks17,76026,995
Brandy L. Burkhalter14,40021,888
Jesse N. Hunter25,20038,304
Kenneth A. Burdick 1
1 Mr. Burdick did not have a payout under this performance cycle as he did not join the Company until 2020.

2018-2020 Cash Long-Term Incentive Plan Award Results

In December 2017, the Compensation Committee established the following metrics, targets and weights for the 2018 - 2020 Cash LTIP. The Company exceeded targets for both Pre-tax Margin (As Adjusted) and Compound Annual Revenue Growth but was below target for Relative Total Shareholder Return as shown below resulting in a total percentage earned at 91.8% of the target:
Metric CriteriaWeight2018 - 2020 ActualMetric Payout of TargetWeighted Payout
ThresholdTargetMaximum
Pre-tax Margin (As Adjusted)2.75%3.25%4.25%30%3.45%120.0%36.0%
Compound Annual Revenue Growth Rate
7.5%10.0%15.0%20%23.3%200.0%40.0%
HCI Peer Group Relative Total Shareholder Return Percentile Rank
25th50th90th50%27th 31.6%15.8%
100%91.8%

The amounts earned by each NEO at 91.8% are reflected in the table below:
NameTarget ($)Payout ($)
Michael F. Neidorff$2,250,000$2,065,500
Jeffrey A. Schwaneke725,000665,550
Mark J. Brooks500,000459,000
Brandy L. Burkhalter475,000436,050
Jesse N. Hunter675,000619,650
Kenneth A. Burdick1
1 Mr. Burdick did not have a payout under this performance cycle as he did not join the Company until 2020.

62 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

SECTION 4 - Compensation Philosophy
The following principles guide the Company's compensation philosophy:
Pay for Performance - Our overall compensation philosophy is to pay for performance. Executive compensation is directly linked to performance and the achievement of both Company and individual goals. Superior performance and the achievement of goals results in higher compensation.
Create Long-Term Stockholder Value - Both performance-based and service-based stock and cash awards with meaningful retention requirements are used to encourage sustained stockholder value creation.
Foster a Culture of Risk Management and Compliance - A portion of NEO compensation is based on meeting individual goals that align with our corporate mission statement and promote a culture of compliance with rules, regulations and the Company's vision and values and rewarding those who mitigate business risks.
Attract and Retain Top Executive Talent - We offer competitive pay to attract, motivate and retain industry executives with the skills and experience to drive superior long-term Company performance in a high growth company.
Centene Corporation 63


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Overview of Compensation Best Practices
The Compensation Committee establishes and administers the executive compensation philosophy and program and assists the Board of Directors in the development and oversight of all aspects of executive compensation. Presented in the table below are highlights of our compensation practices:
What We Do
ü
Pay for Performance A significant portion of our NEOs' compensation is tied to performance with clearly articulated financial and performance goals.
ü
Annual Compensation Risk Assessment We regularly analyze risks related to our compensation program and we conduct broad risk assessments.
ü
Competitive Compensation Each component of the NEOs' annual total direct compensation is generally targeted around the 50th percentile for the General Industry peer group.
ü
Stock Ownership Requirements We maintain rigorous stock ownership requirements for our directors, executives and other members of senior management. Our CEO’s requirement is 5x annual base pay; other NEOs’ requirements are 2.5x annual base pay.
ü

Long-Term Incentive Awards reward continuous performance on multiple metrics and vest at the end of three-year period.
ü
Clawbacks We can recover performance-based cash and equity incentive compensation paid to executives in various circumstances.

ü
Formula Based Annual Incentive Plan Awards under the Annual Cash Incentive plan are formula based.
ü
Independent Compensation Consultant The Compensation Committee retains an independent compensation consultant to advise the committee on executive compensation matters.
ü
Tally Sheets Tally sheets and wealth accumulation analyses for each NEO are reviewed annually before making compensation decisions.
What We Don't Do
X
Excessive Risk-Taking in Our Compensation Programs The long-term incentive plans use multiple performance measures, capped payouts and other features intended to minimize the incentive to take overly risky actions.
X
No Hedging or Pledging Directors and executives are prohibited from hedging, pledging or engaging in any derivatives trading with respect to Company stock.
X
No Tax Gross-ups There are no tax “gross-ups” for perquisites or excise tax gross-ups in the event of a change of control related termination.
X
No Backdating or Repricing of Stock Options Stock options are never backdated or issued with below-market exercise prices. Repricing of stock options without stockholder approval is expressly prohibited.
X
No Single-Trigger Employment Agreements Any cash payments in executive employment agreements are subject to a "double-trigger" change in control condition.
X
No Single-Trigger Stock Grants Beginning with our December 2020 grants, equity compensation awards are subject to a "double-trigger" change in control condition.
64 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

Competitive Pay Philosophy
Centene must leverage its compensation and benefit programs to attract the best talent to compete and achieve aggressive operating objectives. Therefore, Centene views both private equity firms and competitors with larger market capitalization as significant competition for talent. Centene also recognizes that our Company is a source for these firms and competitors to recruit talent if the appropriate compensation programs are not in place at Centene.

For the components of target total compensation, the Compensation Committee's competitive objectives are for:
base salaries to approximate the 50th percentile of similarly-sized organizations, based on revenues. The 50th percentile will be targeted in most instances; however, up to the 75th percentile or higher may be considered when retaining key employees and recruiting talent from significantly larger companies and private equity firms or when the experience of the executive dictates a higher base salary;
annual bonus targets to approximate the 50th percentile of similarly-sized organizations; and
long-term incentive targets to approximate the 50th percentile of similarly-sized organizations.

The goal of these objectives is that based on individual performance, actual total compensation will fall at the 50th percentile of total market based compensation for the GI peer group for expected performance and between the 50th and 75th percentile based on extraordinary performance. Exceptions are sometimes made when an individual's experience and impact warrant it, as is the case for our CEO.

In order to achieve these objectives, the Compensation Committee establishes target, market-based total compensation levels (e.g., base salary, annual bonus target and long-term incentives) from market data from two different peer groups.
A. Healthcare Industry Peer Group
Using the Standard and Poor's Global Industry Classification System (GICS) codes and other relevant industry parameters, Exequity, LLP analyzed the managed care industry and determined there are four key segments in the industry:
Managed Healthcare Companies;
Healthcare Services;
Healthcare Distributors; and
Healthcare Facilities.
Centene Corporation 65


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Based on further review by Exequity, LLP, the following companies were included in the Company's Healthcare Industry Managed Care Peer Group for use in determining compensation for NEOs in 2020:
MANAGED HEALTH CAREHEALTHCARE SERVICES
Direct CompetitorsCVS Health Corporation
Anthem, Inc.Davita Healthcare Partners, Inc.
Cigna Corporation
Humana, Inc.HEALTHCARE DISTRIBUTORS
Molina Healthcare, Inc.AmerisourceBergen Corporation
UnitedHealth Group, Inc.Cardinal Health, Inc.
WellCare Health Plans, Inc. (acquired by Centene January 23, 2020)McKesson Corporation
HEALTHCARE FACILITIES
Community Health Systems, Inc.
HCA Holdings, Inc.
Tenet Healthcare Corp.
B. General Industry Group
Since there is a market for executive talent both within and outside our industry, we also benchmark against the general industry. Therefore, the market data the Compensation Committee utilizes includes not only the managed healthcare industry peer group of 14 companies, but also a general industry peer group of approximately 400 companies derived from the Willis Towers Watson's Compensation Database.
Benchmarking Methodology
The Compensation Committee engaged Exequity, LLP, to gather, analyze and summarize the market data from the Willis Towers Watson Executive Compensation Database for the CEO and the other five NEOs.

For this analysis, which is utilized in determining December equity grant awards and compensation for the forthcoming year, including base salaries, annual cash incentive targets and cash LTIP targets, we size adjust the general industry peer data to be in line with our forecasted revenues for the upcoming year.

All elements of compensation are valued and reviewed in evaluating the relative competitiveness of our compensation practices against both market data and the Compensation Committee's competitive objectives. In addition, the Compensation Committee annually reviews a tally sheet for each NEO, which includes the current value of all outstanding equity-based awards, benefits and perquisites. The Compensation Committee uses the tally sheets to analyze each NEO's base salary, annual incentive target and long-term incentive opportunity in relation to the market and each component of compensation as a percentage of total compensation to determine if there is any risk of retention of key executives.
2021 Annual Cash Incentive
The Compensation Committee rewards NEOs with an annual cash incentive bonus for achieving the Company's EPS objective. Annually, the Committee assesses how each NEO contributed to achieving the EPS objective and other pre-determined objectives approved by the Compensation Committee.
66 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

As mentioned in Section 3, the Adjusted Diluted EPS objective is established during our annual business planning process. The Compensation Committee approves a target level of performance for each administrative, operating, health plan and subsidiary company that represents a meaningful improvement year over year. Our annual business plan is developed each year based on a pay for performance mentality with rigorous performance metrics at target that the Compensation Committee believes are challenging but attainable for our short-term and long-term incentive programs and stretch goals to reach to pay above target. For 2021, the company must first meet its Adjusted EPS threshold before any bonuses are paid out. For NEO's, the variability in annual cash incentives can be defined as follows:
A. Must meet Adjusted EPS Objective (Funding of Bonus)
Metric Criteria
ThresholdTargetMaximum
% of Target50%100%200.0%

If the Company does not meet its threshold performance, no payments are made. In prior years, when the Company did not reach its threshold EPS objective, no annual bonuses were paid.

B. Allocation of Bonus Payout for 2021
MetricWeight
Adjusted EPS35%
Business Goals50%
Leadership, Diversified Growth, Financial Discipline, Operational Excellence Quality
General & Administrative Expense management15%
100%

The Compensation Committee will assess and evaluate how each NEO contributed to achieving this Adjusted Diluted EPS objective and the other pre-determined objectives stated above.

Individual awards under our bonus plan are approved by the Compensation Committee based primarily upon:
business performance versus our business plan;
the effectiveness of each executive's leadership performance and potential to enhance long-term stockholder value;
targeted bonus amounts, which are based upon market data; and
the recommendation of the Chief Executive Officer (for all NEOs other than the CEO).

Overall, 35% of each award is aligned with the Adjusted Diluted EPS target, 50% is aligned with specific goals of each NEO and the remaining 15% of each award is aligned with meeting specific G&A metrics for the year.
Centene Corporation 67


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Annual Cash Incentive Award
Target Incentive OpportunityPerformance
Base SalaryxIndividual Target Award %xAdjusted Diluted EPS Performance

Pool Range:
0% to 200%
+Business Objectives, Budget Controls and Individual Objectives

Pool Range:
0% to 200%
=
(Maximum Pool @ 200% of Target)
Multiplied by 35% WeightMultiplied by 65% Weight

In 2021, we will continue to focus on long-term shareholder value through meeting our financial metrics and continue to emphasize the following factors in meeting our goals:
compliance & quality;
people, talent & leadership;
diversified growth - domestic and international;
financial discipline with a focus on meeting specific margin improvement targets; and,
operational excellence including successful integrations of acquisitions.

As part of our Quality objectives, we have goals that are tied to key metrics such as:
Centers for Medicare & Medicaid Services (CMS) Star ratings;
National Committee for Quality Assurance (NCQA) accreditation;
Healthcare Effectiveness Data and Information Set (HEDIS) measures; and,
Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey results.
2021-2023 Long-Term Incentives
Our long-term incentive compensation is designed to attract and retain key executives, build an integrated management team, reward for innovation and appropriate risk-taking, balance short-term planning with long-term successes and align executive and stockholder interests. TSR, revenue growth, and pre-tax operating margin targets and comparison to competitive market practices are all used by the Compensation Committee in determining long-term incentives.

These long-term incentives take the form of the following:
PSUs (60% of Stock Granted) that are based on meeting pre-determined performance targets (pre-tax margin and revenue growth), vest at the end of the three-year performance period.
Chairman, President & CEO - 150% of Annual Base Salary
Other NEOs - 100% of Annual Base Salary
68 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

Metric CriteriaWeight
ThresholdTargetMaximum
 Pre-tax Margin (As Adjusted)***60%
Compound Annual Revenue Growth Rate
***40%
100%
*While we consider the disclosure of the 2021-2023 metrics proprietary and have excluded them from the table above, the Compensation Committee increased the Pre-Tax Margin (As Adjusted) target from the previous years cycle (2020-2022), recognizing the continuing effort to improve the business.
RSUs (40% of Stock Granted) that vest over three years.
Cash LTIP that is based on meeting three-year relative TSR, pre-tax margin and revenue growth metrics.
Chairman, President & CEO - 150% of Annual Base Salary
Other NEOs - 100% of Annual Base Salary

Metric CriteriaWeightMetric Payout of Target
ThresholdTargetMaximum
Pre-tax Margin (As Adjusted)***30%0%-200%
Compound Annual Revenue Growth Rate
***20%0%-200%
HCI Peer Group Relative Total Shareholder Return Percentile Rank
25th50th90th50%0%-200%
100%
* While we consider the disclosure of the 2021-2023 metrics proprietary and have excluded them from the table above, the Compensation Committee increased the Pre-Tax Margin (As Adjusted) target from the previous years cycle (2020-2022), recognizing the continuing effort to improve the business.

The Compensation Committee utilizes the Cash LTIP to complement the stock incentive plan, manage dilution and supplement the number of shares available under the Company's stock incentive plan.
Stock Options which are granted currently to our Chairman, President & CEO on a limited basis and generally vest over three years. As we continue to look for ways to modify our compensation structures to more closely align with stockholder interests, we expect to introduce this structure to our other NEOs beginning with the December 2021 annual equity grants.

Our Compensation Committee considers options as inherently performance-based, requiring the management team to drive stock price appreciation in excess of the exercise price before the expiration date, or else the realized value of these stock options will be $0. They also believe that it emphasizes our team's view that Centene continues to be a growth stock.

The Compensation Committee strongly believes that stock options encourage retention through the vesting period and incentivize performance since the options only have value to the extent the market value of our stock increases We also view stock options as easy to understand and as long-term focused, Centene has meaningfully outperformed its peers and the broader market on total stockholder return, and we believe that by granting stock options, this will ensure the long-term success of Centene and our stockholders.

Centene Corporation 69


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Long-term incentives are provided both through equity (PSUs at 60% and RSUs at 40%) and cash, while ensuring that the maximum number of shares of common stock granted in any calendar year (excluding shares granted in connection with an acquisition) does not exceed a level associated with competitive practice. Excluding acquisitions, the Company does not annually grant equity compensation exceeding 2% of the outstanding shares of the Company. In recent years, the equity grants have averaged at approximately 0.8% of outstanding shares. Most recently, our run rate has trended around 0.7%. Due to the growth of the Company, the competitive nature of our business and the necessity of retaining key management level employees, equity grants can be awarded to levels below senior executives. For NEOs, PSUs and RSUs are normally granted at the annual December Compensation Committee meeting, but may also be approved at other times for a promotion, extraordinary performance, a newly hired executive or as determined by the Compensation Committee.
Comments about Performance Targets

As mentioned previously, the Compensation Committee sets performance targets at levels it believes to be rigorous and challenging. The performance criteria may include any of the metrics identified in the plan document. We believe the specific performance metrics related to the PSUs and the Cash LTIP plans and the range of awards related to the achievement of such measures are reflective of our overall business strategy and constitute confidential information. We believe disclosing such information would cause us competitive harm. The Compensation Committee may determine that the performance parameters used to measure the appropriate payout include or exclude items which are deemed extraordinary. These items include, but are not limited to, those stated in the plan document.
Other Benefits
We provide our NEOs with a defined contribution 401(k) retirement program, which is the same program that is generally provided to all our employees. We also provide our NEOs with a non-qualified deferred compensation plan to make up for matching contributions that are capped by compensation limits imposed on qualified retirement plans under the Internal Revenue Code. We do not provide our NEOs with a defined benefit retirement program. We also do not provide retiree medical coverage to our NEOs, with the exception of Mr. Neidorff, as specified in his employment agreement.
 
With respect to most other benefits, the benefits provided to NEOs and other executive officers are comparable to those provided to the majority of salaried and hourly Company employees. We require all NEOs to have their tax returns prepared or reviewed by an independent certified public accounting firm. Due to this requirement, costs related to these services are paid by the Company. In addition, each NEO has the option to use a financial advisor for fees that do not exceed $15,000 annually, in total, for both tax preparation and financial advisement. These costs are also fully taxable to them and are not grossed up to cover any personal income tax liability. Additionally, other benefits can include relocation, premiums for life insurance benefits and Company entertainment event tickets
 
The Board of Directors believes that additional security is required for the position of Chairman, President and CEO and other NEOs. Pursuant to a policy implemented by our Board, Mr. Neidorff is required to use Company-provided aircraft for all air travel. We also have an aircraft time sharing agreements with our NEOs that permits them to reimburse us for incremental costs when they use the aircraft for personal travel. In addition, we provide home security services to our NEOs. The personal use of Company provided aircraft and home security services are fully taxable to our NEOs and are not grossed up to cover any personal income tax liability.
70 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

SECTION 5 - Other Compensation Policies and Information
Stock Ownership Guidelines
We utilize stock ownership guidelines for our NEOs, corporate officers and Board. We believe that ownership of our stock helps align the interests of our executives and stockholders, and encourages executives to act in a manner that is expected to increase stockholder value. The stock ownership guidelines for our officers are as follows:
Minimum Ownership Requirement as a Multiple of Base Salary
Chairman, President and Chief Executive Officer5x
Executive Vice Presidents2.5x
Senior Vice Presidents2x
Market & Specialty Company Presidents & other Corporate Executives1x

The Compensation Committee annually reviews the stock ownership levels of the Board and all officers. Future stock awards take into consideration the executive's level of attainment of the suggested stock ownership amount. The Compensation Committee may elect to award the annual incentive to an executive in stock instead of cash if the suggested stock ownership amount is not achieved.
 
Officers who fail to achieve these ownership levels may not be eligible to receive any stock-based awards until they achieve their required ownership level. Shares owned directly by the officer (including those held as a joint tenant or as tenant in common), unvested RSUs, shares owned in a self-directed IRA, “phantom shares” held in the deferred compensation plan and certain shares owned or held for the benefit of a spouse or minor children are counted toward the guidelines. Options and unearned PSUs are not counted toward the ownership guidelines.

The Board has established a policy requiring executive officers to retain ownership of the shares received from the vesting or payout of any RSU award granted under our stock incentive plan (net of any shares used to satisfy tax obligations) for one year following such vesting or payout. An executive may substitute the tax basis of the shares under restriction for other shares held outright.

As of the close of the last fiscal year and the date of this report, all NEOs subject to the ownership guidelines are in compliance with the guidelines. At $60.03 per share (the December 31, 2020 closing stock price), our executive officers held Company stock as of a multiple of their 2020 base salaries as follows:
NameMinimum Ownership Requirement as a Multiple of Base SalaryOwnership as a Multiple of 2020 Base Salary
Michael F. Neidorff5x226x
Jeffrey A. Schwaneke2.5x19.5x
Mark J. Brooks2.5x10.6x
Brandy L. Burkhalter2.5x17.7x
Jesse N. Hunter2.5x31.3x
Kenneth A. Burdick2.5x31.1x

Beginning in 2020, our stock ownership guidelines for members of our Board require them to own 7.5 times the annual cash retainer within five years of being appointed to the Board. As of December 31, 2020, all directors were in compliance with this requirement.
Centene Corporation 71


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
Hedging and Pledging Policies
The Board maintains the Company's insider trading policy, which prohibits pledging of shares by executive officers and members of the Board. Our insider trading policy also prohibits members of the Board and any employees from engaging in short-term or speculative transactions involving our securities. Our insider trading policy provides that members of the Board and employees may not engage in short sales of our securities, including short sales "against the box," or purchase sales of puts or calls for speculative purposes. As of February 26, 2021, all executive officers and directors were in compliance with these policies.
Risk Disclosure
The Compensation Committee is aware of the consequences to companies that have not appropriately balanced risk and rewards in executive compensation. The Compensation Committee believes that the emphasis on long-term performance in the stock incentive plan and the Cash LTIP results in an overall compensation program that does not encourage or reward excessive risk-taking for the Company. Risk is further limited by the ownership guidelines mentioned previously and a clawback provision that provides that any cash bonuses that are paid from the annual incentive plan, Cash LTIP or vesting of PSUs that are a result of material financial impropriety (as defined by the Audit Committee of the Board), including but not limited to financial restatements due to these improprieties, may result in any officers becoming obligated to pay back the amount to the Company.

The Company's compensation strategy is intended to mitigate risk by emphasizing long-term compensation and financial performance measures correlated with growing stockholder value rather than rewarding shorter performance and payout periods. A recent review of the Company's compensation programs by Exequity, LLP did not identify any programs that unduly incentivize employees to take any excessive risks.
Employment Contracts, Termination of Employment Arrangements, Change in Control Arrangements, and Retirement Provisions

CEO Employment Agreement
Michael F. Neidorff serves as Chairman of our Board, President and CEO pursuant to an employment agreement dated November 8, 2004 (as subsequently amended). Under this agreement, we paid Mr. Neidorff a 2020 annual salary of $1.8 million and will pay Mr. Neidorff a 2021 annual salary of $1.8 million, which is subject to an annual review by our Board. Mr. Neidorff is eligible for a target annual incentive of 150% of base salary. The agreement also awarded Mr. Neidorff 4,000,000 RSUs as of November 8, 2004. The RSUs and all of the related shares of common stock shall be distributed to Mr. Neidorff on the later of (a) January 15 of the first calendar year following termination of Mr. Neidorff's employment or (b) the date that is six months after Mr. Neidorff's “separation of service” as defined in the Code. Mr. Neidorff shall continue to vest in all of his outstanding long-term incentive awards while he serves as Chairman of the Board, regardless of whether he is serving as Executive Chairman or Non-Executive Chairman, and shall fully vest in any outstanding long-term incentives (subject to any performance measures to be determined at the end of the applicable performance period) upon his ultimate termination from the Board. Upon a change in control or change in control and termination, depending on the award agreement, any existing equity awards held by Mr. Neidorff will vest in full.

72 Centene Corporation

Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION

In February 2019, the Board and Mr. Neidorff agreed to extend his contract beyond the previous termination date to ensure continuity in the business and provide strategic perspective to continue long-term growth and margin improvement that will continue to result in long-term stockholder value. The Board also firmly believes that Mr. Neidorff's superior leadership is required for an additional period of time as Executive Chair in order to guide the Company through a turbulent and unknown regulatory environment, while at the same time, providing for an orderly transition of leadership as he will move from day-to-day activities into a more strategic and governmental affairs role. The amendment provides that Mr. Neidorff will continue to serve as Chairman and CEO until the 2023 Annual Meeting of Stockholders, and continue serving as Executive Chairman until the 2024 Annual Meeting of Stockholders. Effective with the 2024 Annual Meeting of Stockholders, or other mutually agreed to date, Mr. Neidorff will become Non-Executive Chairman of the Board. Mr. Neidorff did not receive any incremental cash or equity-based compensation for extending his contract. However, in connection with his expected continued involvement with strategic initiatives, community relations and government affairs while with the Company as Executive Chairman and for five years thereafter, he will continue to be subject to the Company’s security policy requiring him to use Company-provided aircraft for all air travel, as well as the same security measures currently applicable to Mr. Neidorff as CEO. In addition, for the remainder of his life, Mr. Neidorff will continue to have an office at the Company’s headquarters and use of one full-time administrative assistant. Mr. Neidorff will also have use of an additional part-time administrative assistant through December 31, 2024.

In addition, Mr. Neidorff has agreed not to compete with us or solicit any of our employees during the term of his employment and for 12 months thereafter. Mr. Neidorff's employment may be terminated by the Company for cause or permanent disability, or by Mr. Neidorff for good reason (as defined in the employment agreement). If Mr. Neidorff is terminated by the Company without cause or if he terminates for good reason prior to the 2023 Stockholders' Meeting, he is entitled to receive salary continuation equivalent to six months of his salary plus the maximum amount he could have earned as a target bonus for the year of termination if all goals and targets were achieved, lifetime medical insurance for him and his spouse, lifetime life insurance coverage, full acceleration of any unvested stock options or other equity awards, subject to any performance measures to be determined at the end of the applicable performance period. The health and welfare benefits that Mr. Neidorff or his spouse would be entitled to, if he is terminated without cause or for good reason, were commitments made in his original employment agreement in 2004.
Offer Letter Agreement
Kenneth A. Burdick served as Executive Vice President, Markets & Products pursuant to the WellCare acquisition and an offer letter agreement dated May 30, 2019 (as subsequently amended in a transition of services agreement). Under this agreement, we paid Mr. Burdick an annual base salary of $1,400,000. Mr. Burdick was eligible for a target annual incentive of 150% of base salary. On the closing date, Mr. Burdick was granted time-based restricted stock units with a grant date fair market value equal to $4,400,000. Mr. Burdick was eligible for annual grants of equity under the terms of the 2012 Stock Incentive Plan with a target amount of annual grant equal to $7,000,000 and with terms and conditions no less favorable than those provided to similar level Centene executives. Under the terms of the transition services agreement, Mr. Burdick's employment with the Company ceased upon Mr. Burdick's retirement, effective as of the first anniversary of the WellCare acquisition date.
Severance and Change in Control Agreements
Jeffrey A. Schwaneke, Mark J. Brooks, Brandy L. Burkhalter, and Jesse N. Hunter serve as executive officers pursuant to executive severance and change in control agreements (the agreements, as amended), and their 2021 annual salaries are $950,000, $725,000, $850,000, and $830,000, respectively.

The agreements generally provide that, if within 24 months following a change in control (as defined in the agreements), the executive's employment is terminated by the Company other than for cause (as defined in the agreements) or by the executive for good reason (as defined in the agreements), the executive will receive a lump sum cash payment equal to the sum of (1) an amount equal to 24 months of salary, (b) the average of the executive's last two annual bonuses multiplied by two, and (c) a prorated annual bonus for the year in which the termination occurs. The executive will also receive 18 months of medical coverage,
Centene Corporation 73


Table of contents
2021 NOTICE OF MEETING AND PROXY STATEMENT
INFORMATION ABOUT EXECUTIVE COMPENSATION
and all existing equity awards will vest in full at the time of a change in control or change in control and termination depending on the award agreement.
     
The agreements also generally provide that, if an executive's employment is terminated by the Company other than for cause (absent a change in control), the executive will receive 12 months of salary continuation, a prorated annual bonus for the year in which the termination occurs, 12 months of medical coverage and 12 months of continued vesting of the executive's existing equity awards. The terms of the agreements do not include tax gross-up benefits for excise taxes payable upon a change in control.

Under the terms of any new executive severance and change in control agreement and Mr. Neidorff's amended employment agreement, if any parts or amounts payable under the agreement are deemed to be “excess parachute payments” within the meaning of Section 280G of the Code or similar provision, the amount shall be reduced to the extent necessary so that no amounts paid shall be deemed excess parachute payments or, if the net benefit is greater, no reduction will be made, but the executive will be required to pay any additional taxes.

In the agreements, the executives agree to non-competition and non-solicitation provisions that extend through the first anniversary of termination of employment, unless the termination was due to a change in control as defined in the agreement.

The Board has determined that it is in the best interests of the Company and our stockholders to ensure that we will have the continued dedication of the executive, notwithstanding the possibility, threat, or occurrence of a change in control. The Board believes it is imperative to diminish the inevitable distraction of the executive by virtue of the personal uncertainties and risks created by a pending or threatened change in control, to encourage the executive's full attention and dedication to the Company, and to provide the executive with compensation and benefits arrangements upon a change in control which (i) will satisfy the executive's compensation and benefits expectations and (ii) are competitive with those of other major corporations.
Retirement Provisions
For all employees, Company stock awards include a qualified retirement definition. Employees who are at least 55 years of age and have 10 years of employment at the time of retirement are eligible for the following:
A pro-rated number of PSUs vesting at the end of the performance period, based on the amount of time employed during the performance period and actual performance outcomes.
A one-year acceleration of vesting of RSUs for individuals who are retirement eligible. RSU's for the Company's executive officers are not accelerated, but will have a one-year continuation of vesting upon a qualified retirement.

Currently, none of our NEOs are eligible for retirement benefits with the exception of Mr. Neidorff, through the provisions of his employment agreement.
Deductibility of Executive Compensation
Section 162(m)(6), which was enacted as part of the Patient Protection and Affordable Care Act, amended the Code to limit the amount that certain healthcare insurers and providers, including the Company