Humana Announces Board of Directors Refreshment Plan

Company to Continue Refreshment Efforts with Appointment of Two New Independent Directors

Effort Part of Constructive Engagement with Large Shareholder, Starboard Value

Reiterates Long-Term Adjusted Earnings Growth Targets

LOUISVILLE, KY (STL.News) Humana Inc. (NYSE: HUM) (“Humana” or the “Company”) today announced a Board refreshment plan under which the Company will add two new independent directors to its Board of Directors as part of a cooperation agreement with Starboard Value LP (together with certain of its affiliates, “Starboard”).

As part of the refreshment plan, the Humana Board will appoint two new independent directors mutually agreed upon by the Company and Starboard, the first before Humana’s 2022 Annual Meeting of Shareholders (“Annual Meeting”) and the second following.  In keeping with Humana’s active Board refreshment process, one incumbent director will not stand for re-election at the 2022 Annual Meeting, and a second incumbent director will not stand for re-election at the 2023 Annual Meeting.

In connection with today’s announcement, Humana reiterated its goal of delivering long-term adjusted earnings per share growth of 11 to 15 percent by growing individual Medicare Advantage market share while improving pre-tax margins, driving accelerated growth in its Healthcare Services businesses, reducing operating costs, and optimizing capital deployment.  The Company will accomplish this in part by achieving the previously announced $1 billion value creation target by 2023 while ensuring it maintains operational discipline and drives sustainable operating cost leverage long-term, and expects to improve individual Medicare Advantage pre-tax margins by at least 50 basis points in 2022.

“At Humana, we pride ourselves on our commitment to best-in-class corporate governance, board refreshment, and active shareholder engagement and look forward to welcoming two new independent directors to our Board,” said Bruce D. Broussard, President and CEO of Humana.  “With these anticipated appointments, we will have added seven new independent directors over the last three years, continuing our planned transition considering the Company’s historical experience and necessary skills and capabilities to affect our strategy going forward.  This is an important time for our company as we focus on delivering growth in Medicare Advantage and our Healthcare Services businesses.  We have enjoyed the constructive relationship with Starboard and look forward to benefitting from the valuable insights and fresh perspectives that these new additions to the Board will bring.  We will prioritize adding individuals who can complement our Board’s diverse mix of skills and experiences and help us continue to drive growth and deliver long-term shareholder value.”

Jeff Smith, CEO of Starboard, commented, “We believe Humana is well-positioned to continue delivering Medicare Advantage market share gains, improved profitability, and earnings growth as it executes on its strategies, capture the significant opportunities ahead, and enhances value for shareholders.  We appreciate the constructive dialogue we have had with Humana and are pleased to reach this agreement for the benefit of all shareholders.  We look forward to working with the Board to identify two exemplary directors who will further enhance our common goal of significantly increasing shareholder value.”

The full agreement between Starboard and Humana will be filed on a Form 8-K with the U.S. Securities and Exchange Commission (the “SEC”).