Annual Cash Incentive Compensation
Based on individual and Company performance, incentive compensation opportunities are available to a wide range of our employees. We believe that incentive compensation is effective in reinforcing both the overall values of our Company and our specific operating goals.
Incentive compensation programs are designed to focus employees attention on our key performance goals, to identify the expected levels of performance and to reward individuals who meet or exceed our expectations. The aggregate amounts available for incentive awards are determined by our overall financial performance. The actual awards paid to individual recipients, other than to executive officers, are formulated by management, generally payable on an annual basis and reviewed by the committee prior to payment. The committee formulates and determines incentive awards for Named Executive Officers. See Summary Compensation Table below.
For 2017, the Companys Chief Executive Officer, Chief Financial Officer and Chief Operating Officer - West (the Executive Participants) were eligible to receive cash bonus awards under the Companys Objective Cash Bonus Plan and Discretionary Cash Bonus Plan that amounted to a maximum of 125% of their respective base salaries. For a detailed description of these plans, see the Companys Current Report on Form 8-K filed with the SEC on March 30, 2017. Under the Objective Cash Bonus Plan, the Executive Participants were eligible to earn a cash bonus award of up to 75% of their respective base salaries dependent upon the Company achieving pre-tax income in the range of $39,866,800 to $43,726,800 or more. In determining pre-tax income for purposes of the Objective Cash Bonus Plan, the Objective Cash Bonus Plan provides that such determination shall be made before charges or credits for changes in mandatorily redeemable non-controlling interests and any extraordinary items and after the compensation expense required to be reported in 2017 related to the incentive plans applicable to the Executive Participants. Based on the pre-tax earnings of $42,155,000 (after adjustment for charges related to the restatement of our financials and write-off of goodwill, net of non-controlling allocation, attributable to a single clinic partnership) for 2017, the Executive Participants received an Objective Cash Bonus award for 2017 equal to 42% of their respective base salaries. No additional cash award was made to the Executive Participants for 2017 under the Discretionary Cash Bonus Plan. The total cash bonus for the 2017 year, inclusive of the Objective Cash Bonus Plan and Discretionary Cash Bonus Plan, paid to Messrs. Reading, McAfee and McDowell was $304,500, $197,400, and $197,400, respectively. These bonuses were paid on March 9, 2018.
Long-term Equity Incentive Awards
For the 2017 year, the Executive Participants were eligible to receive awards consisting of shares of restricted common stock under the Companys Objective Long-Term Incentive Plan and Discretionary Long-Term Incentive Plan. For a detailed description of these plans, see the Companys Current Reports on Form 8-K filed with the SEC on March 30, 2017 and Form 8-K/A filed on February 9, 2018. Under the Objective Long-Term Incentive Plan, Messrs. Reading, McAfee and McDowell were eligible to earn up to 11,000, 5,500 and 5,500 shares of restricted common stock, respectively, dependent upon the Company achieving pre-tax income in the range of $39,866,800 to $42,414,400 or more. In determining diluted earnings per share for purposes of the Objective Cash Bonus Plan, the Objective Cash Bonus Plan provides that such determination shall be made before charges or credits for changes in mandatorily redeemable non-controlling interests and any extraordinary items and after the compensation expense required to be reported in 2017 related to the incentive plans applicable to the Executive Participants. Based on the pre-tax earnings of $42,155,000 (after adjustment for charges related to the restatement of our financials and write-off of goodwill, net of non-controlling allocation, attributable to a single clinic partnership) for 2017, Messrs. Reading, McAfee and McDowell were awarded 9,250, 4,620 and 4,620 shares of restricted common stock, respectively. Under the Discretionary Long-Term Incentive Plan, Messrs. Reading, McAfee and McDowell were eligible to earn up to 11,000, 5,500 and 5,500 shares of restricted common stock, respectively, based upon a subjective determination of the committee. The committee utilized certain performance criteria as detailed in the plan but generally did not consider it practicable to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific performance criteria it considers in reaching its decision. In considering these performance criteria, the individual members of the committee may have given different weights to different performance criteria. The discretionary performance criteria were not intended to be rigid or formulaic but rather served as a framework under which the committee reviews the total compensation and performance of the Executive Participants to determine what incentive amount is appropriate for any specific year. For 2017, Messrs. Reading, McAfee and McDowell were awarded 11,000, 5,500 and 5,500 shares of restricted common stock, respectively, under the Discretionary Long-Term Incentive Plan. On March 5, 2018, for the 2017 year, Messrs. Reading, McAfee and McDowell were granted an aggregate of 20,240, 10,120 and 10,120 shares of restricted common stock, respectively, representing the total shares