UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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HEALTHCARE SERVICES GROUP, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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HEALTHCARE SERVICES GROUP, INC.

3220 Tillman Drive

Suite 300

Bensalem, Pennsylvania 19020

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

~~May 28, 2019~~

June 1, 2021

To the Shareholders of

HEALTHCARE SERVICES GROUP, INC.

NOTICE IS HEREBY GIVEN that the Annual Meeting (the “Annual Meeting”) of Shareholders of Healthcare Services Group, Inc. (the “Company”) will be held at the Courtyard Philadelphia Bensalem, 3280 Tillman Drive, Bensalem, Pennsylvania 19020, on ~~May 28, 2019,~~June 1, 2021, at 10:00 A.M. (EDT), for the following purposes:


1 (1)						To elect ~~ten~~nine directors;

2 (2)						To approve and ratify the selection of Grant Thornton LLP as the independent registered public accounting firm of the Company for its current fiscal year ending December 31, ~~2019;~~ 2021;

3 (3)						To consider an advisory vote on a non-binding resolution to approve the compensation of certain of our executive officers disclosed in this Proxy Statement; ~~and~~

4 (4)						To consider and act upon such other business as may properly come before the Annual Meeting and any adjournment or postponement.

Only shareholders of record at the close of business on ~~April 1, 2019~~March 31, 2021 will be entitled to notice of and to vote at the Annual Meeting.

Important Notice Regarding the Availability of

Proxy Materials for the Shareholders

~~meeting~~Meeting to be held on ~~May 28, 2019~~

June 1, 2021

The proxy statement and annual report to shareholders are available under ~~“2019~~“2021 Investor Materials” at www.proxydocs.com/hcsg.

Note Regarding Special Accommodation Due to Coronavirus (COVID-19)

~~While~~In light of the COVID-19 health risks associated with crowds of people in close proximity with one another, we ~~encourage~~recognize that some of our shareholders who might normally attend the meeting in person might also be reluctant to do so because of the health risks. For anyone who elects not to attend the annual meeting but would still like to listen to the business portion of the annual meeting, and any other remarks made about the Company, we are making available an audio recording which we will post the following day on our website, investor.hcsgcorp.com, under the heading “Events & Presentations.” For those shareholders, we would remind you to cast your votes by proxy, following the instructions within this Proxy Statement.

In the event we determine it is not possible or advisable to hold our Annual Meeting in person, we will publicly announce alternative arrangements as promptly as practicable before the meeting. Please monitor our website at investor.hcsgcorp.com for updated information.

Whether or not you expect to attend the Annual Meeting, shareholders can sign and promptly mail the enclosed proxy ~~whether or not you expect to attend the Annual Meeting,~~ in order that your shares may be voted for you. A return envelope is provided for your convenience.


By Order of the Board of Directors,

JUDE VISCONTO Chairman


Dated:						April ~~19, 2019~~23, 2021
						Bensalem, Pennsylvania

Table of Contents


Proxy Statement Summary			1
	~~Proposals~~Directors, Executive Officers and Corporate Governance	43
	~~Corporate Governance~~Board Leadership	85
	Board Qualifications	86
	Board ~~Leadership~~	9
	~~Board~~ Committees	97
	Code of Ethics and Business Conduct	118
	Board Role in Risk Oversight	119
	Directors' Compensation and Fees	1210
	Procedures for Contacting Directors	1210
	~~Other~~Non-Director Executive Officers	13
	~~Section 16(a) Compliance~~	13
	~~Sarbanes-Oxley Act Compliance~~	13
	~~Audit Committee Report~~	14
	~~Nominating, Compensation and Stock Option~~ ~~Committee Report~~	1511
	Executive Compensation	1611
	Summary Compensation ~~and~~Table	20
	Grant of Plan-Based Awards	2421
	Outstanding Equity Awards	2622
	Option Exercise and Stock Vested	2723
	Non-Qualified Deferred Compensation	2723
	Pay Ratio Disclosure	23
	Proposal No. 1 - Election of Directors	25
	Proposal No. 2 - Independent Registered Accounting Firm	26
	Principal Accountant Fees and Services	26
	Proposal No. 3 - Advisory Vote on Executive Compensation	27
	Audit Committee Report	28
	Nominating, Compensation and Stock Option Committee Report	29
	Security Ownership of Certain Beneficial Owners and Management	2830
	~~Certain Relationships and related transactions and Director independence~~General Information	3032
	Director Independence	3033
	Compensation ~~interlocks~~Committee Interlocks and Insider Participation	3034
	~~Principle Accountant Fees~~Certain relationships and ~~Services~~transactions with related parties	3134
	Other Matters	3234
	Annual Report	3335

HEALTHCARE SERVICES GROUP, INC.

3220 Tillman Drive

Suite 300

Bensalem, Pennsylvania 19020

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

~~May 28, 2019~~ June 1, 2021

SUMMARY OF THIS PROXY STATEMENT

This Proxy Statement contains information related to the annual meeting of shareholders (the “Annual Meeting”) of Healthcare Services Group, Inc. (the “Company,” “we,” “us” or “our”), to be held on Tuesday, ~~May 28, 2019,~~June 1, 2021, beginning at 10:00 a.m. (EDT), at the Courtyard Philadelphia Bensalem, 3280 Tillman Drive, Bensalem, Pennsylvania 19020, and at any postponements or adjournments thereof.

~~QUESTIONS AND ANSWERS ABOUT OUR ANNUAL MEETING~~

~~What is the Purpose of the Annual Meeting~~

At the Annual Meeting, shareholders will hear an update on the Company’s operations, have a chance to meet some of our directors and executives and will act on the following matters:

1 Proposal No.

Proposal Description

Recommendation of the Board

(1)

To elect ~~ten~~nine directors;

FOR

each of the nominees

2 (2)

To approve and ratify the selection of Grant Thornton LLP as the independent registered public accounting firm of the Company for its current fiscal year ending December 31, ~~2019;~~2021; and

FOR

3 (3)

To consider an advisory vote on a non-binding resolution to approve the compensation of certain of our executive officers disclosed in this Proxy ~~Statement; and~~Statement.

FOR

~~To consider and act upon such other business as may properly come before the Annual Meeting and any adjournment or postponement.~~

~~Who May Vote; Date of Mailing~~

Only holders of record of our Common Stock, $.01 par value (the “Common Stock”) at the close of business on ~~April 1, 2019~~March 31, 2021 (the “Record Date”), are entitled to notice of and to vote at the Annual Meeting. On the Record Date, there were issued and outstanding approximately ~~74,058,000~~74,721,000 shares of our Common Stock.

Each share of Common Stock entitles the holder thereof to one vote. This Proxy Statement is being mailed to shareholders on or about April ~~26, 2019.~~

~~What constitutes a quorum?~~

In order to carry on the business of the Annual Meeting, we must have a quorum. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of our Common Stock is required to constitute a quorum at the Annual Meeting.

~~How many votes are required to approve each proposal?~~

~~Election of Directors~~

The affirmative vote of a plurality of the shares of Common Stock entitled to vote and present in person or by proxy at the Annual Meeting is required for the election to our Board of Directors (the "Board") of each of the nominees for director. Shareholders do not have the right to cumulate their votes in the election of directors.


						~~Proxy Statement Summary~~

~~Ratification of Independent Registered Public Accounting Firm and Approval of Executive Compensation~~

~~The affirmative vote of the holders of a majority of the votes cast at the Annual Meeting in person or by proxy and entitled to vote is required for approval of Proposal No. 2 and Proposal No. 3.~~

~~How are votes counted?~~

You may either vote ‘FOR’ or ‘WITHHOLD’ authority to vote for each nominee for election to the Board. You may vote ‘FOR,’ ‘AGAINST’ or ‘ABSTAIN’ on Proposal No. 2 and Proposal No. 3. Abstentions will be counted as present for purposes of determining the existence of a quorum, but will have no effect on the vote of the particular proposal. If you sign and submit a proxy card without voting instructions, your shares will be voted ‘FOR’ each director nominee, ‘FOR’ Proposal No. 2 and Proposal No. 3 and ‘FOR’ or ‘AGAINST’ any other proposal as recommended by the Board.

~~What is a broker non-vote?~~

If shareholders do not give their brokers instructions as to how to vote shares held in street name, the brokers have discretionary authority to vote those shares on ‘routine’ matters, such as the ratification of the independent registered public accounting firm, but not on ‘non-routine’ proposals, such as the election of directors and the advisory vote regarding executive compensation. As a result, if you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote. Shares held by brokers who do not have discretionary authority to vote on a particular matter and who have not received voting instructions from their customers will be counted as present for the purpose of determining whether there is a quorum at the Annual Meeting, but will not be counted or deemed to be present in person or by proxy for the purpose of determining whether our shareholders have approved that matter.

~~How to Vote~~

~~You may vote in person at the Annual Meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the Annual Meeting. You can always change your vote at the Annual Meeting.~~

~~How Proxies Work~~

~~Our Board is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the Annual Meeting in the manner you direct.~~

Proxies submitted will be voted by the individuals named on the proxy card in the manner you indicate. If you give us your proxy but do not specify how you want your shares voted, they will be voted in accordance with the Board's recommendations.

You may receive more than one proxy or voting card depending on how you hold your shares. If you hold shares through someone else, such as a stockbroker, you may get materials from them asking how you want to vote. The latest proxy card we receive from you will determine how we will vote your shares.

~~Revoking a Proxy~~

A proxy may be revoked by delivery of a written statement to the Secretary of the Company stating that the proxy is revoked, by a subsequent proxy executed by the person executing the prior proxy and presented to the Annual Meeting, or by voting in person at the Annual Meeting.

~~Attending in Person~~

Only shareholders, their proxy holders, and our invited guests may attend the Annual Meeting. For security purposes, all persons attending the Annual Meeting must bring identification with photo. If you wish to attend the Annual Meeting in person but you hold your shares through someone else, such as a stockbroker, you must bring proof of your ownership to the Annual Meeting. For example, you could bring an account statement showing that you owned shares of the Company’s Common Stock as of the Record Date as acceptable proof of ownership.


						~~Proxy Statement Summary~~

~~Expenses; Proxy Solicitation~~

All expenses in connection with this solicitation will be borne by the Company. It is expected that solicitation will be made primarily by mail, but regular employees or representatives of the Company may also solicit proxies by telephone, facsimile, email or in person, without additional compensation, except for reimbursement of out-of-pocket expenses.


						~~Proxy Statement Summary~~

~~PROPOSAL NO. 1~~

~~ELECTION OF DIRECTORS~~

At the Annual Meeting, ten directors of the Company are to be elected, each to hold office for a term of one year. All nominees currently serve as Directors. Unless authority is specifically withheld, management proxies will be voted FOR the election of the nominees named below to serve as directors until the next annual meeting of shareholders and until their successors have been chosen and qualified. Should any nominee not be a candidate at the time of the Annual Meeting (a situation which is not now anticipated), proxies will be voted in favor of the remaining nominees and may also be voted for substitute nominees. If a quorum is present, the candidate or candidates receiving the highest number of votes will be elected. Brokers that do not receive shareholder instructions are not entitled to vote for the election of directors because an uncontested election is considered a “non-routine” matter. Hence, shareholders who hold their shares through brokerage accounts and who would like to vote in favor of the director nominees will need to instruct their brokerage firm to vote for the Company’s nominees.23, 2021.

~~The Board of Directors recommend a vote “FOR” all nominees.~~

Healthcare Services Group, Inc. | 2021 Proxy Statement | 1


						~~Proposal No. 1~~

~~The nominees are as follows:~~

Name, Age and Principal Occupations and Public Directorships for the past five years Director Since
1 Robert L. Frome, Esq., 81, Robert L. Frome, Esq., 81, is Counsel to the law firm of Olshan Frome Wolosky LLP and prior thereto was a partner at such Firm for more than five years. 1983
2 Robert J. Moss, Esq., 81, is the retired President and CEO of Moss Associates, a law firm. Previously, Mr. Moss served as a Court Officer of the First Judicial District of Pennsylvania from 2006 to 2007. 1992
¹
3 John M. Briggs, CPA, 68, serves as the Company’s lead independent director. Mr. Briggs was the Treasurer of the Philadelphia Affiliate of Susan G. Komen for the Cure from 2005 through 2011. Additionally, he is the founder and formerly a Partner of Briggs, Bunting & Dougherty, LLP, a registered public accounting firm. Mr. Briggs is currently a board member of Crossmark Global Investments of Regulated Investment Funds. 1993
¹^,²
4 Dino D. Ottaviano, 71, is the retired Principal of D2O Marketing, Inc., a provider of internet productivity tools founded in 2006. Previously, Mr. Ottaviano was employed for 23 years with Transcontinental Direct (successor to Communication Concepts, Inc.), a publicly held outsourcing printer, retiring in 2002 as Vice President of Business Development. 2007
¹
5 Theodore Wahl, 45, has been the President and Chief Executive Officer, since May 2015. Mr. Wahl joined the Company in 2004. Prior to his appointment to President and Chief Executive Officer, Mr. Wahl served as President and Chief Operating Officer, Executive Vice President & Chief Operating Officer, Vice President of Finance, Regional Manager, Regional Sales Director, District Manager and Facility Manager. Prior to joining the Company, Mr. Wahl was a Senior Manager with Ernst & Young’s Transaction Advisory Group. 2011
6 Michael E. McBryan, 54, has been the Executive Vice President and Chief Revenue Officer since April 2012. Mr. McBryan joined the Company in 1988. Prior to becoming Executive Vice President and Chief Revenue Officer, Mr. McBryan served as Senior Vice President, Divisional Vice President, Regional Sales Director, District Manager and Facility Manager. 2011
7 Diane S. Casey, RN, 65, has been a Clinical Nursing Coordinator (CNC) of Endoscopy at Huntingdon Valley Surgery Center, an AAAHC accredited healthcare facility, where she has worked for more than the past five years. Previously, Ms. Casey was employed at Holy Redeemer Health Systems in various surgical nursing and management positions. 2011
³
8 John J. McFadden, 57, has been the Principal of Global Circulation Services, a provider of marketing and advertising services to Media and Publishing companies founded since 2008. Mr. McFadden previously worked at The McGraw-Hill Companies (parent company of Standard and Poor’s) where he held management positions within their global circulation, sales and outsourcing services departments for approximately 15 years. 2012
³
9 Jude Visconto, 45, has been a Principal of American Property Holdings, a real estate investment firm focused on the acquisition, development and management of multi-family/senior housing and commercial assets, for more than the past five years. Mr. Visconto is an active member of the real estate community and participates in a variety of industry-related associations including The American Senior Housing Association, The Association of the National Investment Center for Senior Housing and Care, and The National Association of Realtors. 2015
⁴
10 Daniela Castagnino, 44, is an Information Specialist at United Spinal Association, a national 501(c)(3) non-profit membership organization dedicated to enhancing the quality of life of all people living with spinal cord injuries and disorders (SCI/D), for more than the past five years. Previously, Ms. Castagnino was an international consultant for Lazos Profesionales Asociación Civil and the Inter-American Development Bank. 2018
Our Company

^1.~~Member~~Healthcare Services Group, HCSG, has over 40 years as an experienced partner in managing housekeeping, laundry, dining, and nutritional services in hospitals, nursing homes, rehabilitation centers, and retirement homes in communities across the United States. Our housekeeping and laundry departments support Infection Prevention and Control initiatives, our experienced and expertly trained Registered Dietitians work in close collaboration with Medical Directors, Administrators, Directors of ~~Audit Committee.~~Nursing, and Dining Managers to deliver people-centered nutritional care, assisted by Dining Services programs that source premium food products – those produced locally as well as familiar, national brands, recognizing resident preferences and dietary restrictions.

^2.~~Lead Independent Director.~~This year saw increasing demands on our employees, under conditions related to the pandemic that were often challenging.

^3.~~Member~~We appreciate and are deeply grateful for the efforts of ~~Nominating, Compensation~~our over 42,000 employees, who provided consistent exemplary care, and ~~Stock Option Committee.~~

^4.C~~hairman of~~recognize HCSG's frontline leaders for their extraordinary leadership, courage, and grit over the ~~Board of the Company.~~past year.

If Messrs. Briggs, Moss and Ottaviano are re-elected as Directors of the Company, it is anticipated that such individuals will continue to comprise the Audit Committee following the Annual Meeting with Mr. Briggs serving as the chairman of such committee.

If Ms. Casey and Mr. McFadden are re-elected as Directors of the Company, it is anticipated that such individuals will continue to comprise the Nominating, Compensation and Stock Option Committee following the Annual Meeting with Ms. Casey serving as the chairwoman of such committee.


						~~Proposal No. 1~~

~~PROPOSAL NO. 2~~

~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

The accounting firm of Grant Thornton LLP was selected by the Audit Committee of the Board as the Independent Auditors of the Company for the fiscal year ending December 31, 2019. Said firm has no other relationship to the Company. The Board recommends the ratification of the selection of the firm of Grant Thornton LLP to serve as the Independent Auditors of the Company for the year ending December 31, 2019. A representative of Grant Thornton LLP, which has served as the Company’s Independent Auditors since December 1992, will be present at the forthcoming shareholders’ meeting with the opportunity to make a statement if so desired and such representative will be available to respond to appropriate questions. The approval of the proposal to ratify the appointment of Grant Thornton LLP requires the affirmative vote of a majority of the votes cast by all shareholders represented and entitled to vote thereon. An abstention, therefore, will not have the same legal effect as an “against” vote and will not be counted in determining whether the proposal has received the required shareholder vote. However, brokers that do not receive instructions on this proposal are entitled to vote for the selection of the independent registered public accounting firm.Our Employees

We support our employees by investing in education, opportunities for advancement and engagement and recognition.Some of our programs include:

~~The Board~~•Proactive and ongoing training focused on the safety of ~~Directors recommend~~our workforce, assessing developing risks, and providing appropriate personal protective equipment and instituting other measures to safeguard our employees

•Career development and promotional pathways for all employees, with a ~~vote “FOR” the approval~~staunch commitment to promotion from within

•Access to a Manager-In-Training Program for all qualified and ~~ratification~~motivated employees, regardless of ~~the selection of Grant Thornton LLP as the independent registered public accounting firm of the Company~~formal education level achieved

•Employee Engagement and Recognition Program, including Going Beyond Awards, recognition pins for ~~its current fiscal year ending December 31, 2019.~~


						~~Proposal No. 2~~

~~PROPOSAL NO. 3~~

~~ADVISORY VOTE ON EXECUTIVE COMPENSATION~~

The Board of Directors recognizes the significant interest of shareholders in executive compensation matters. Pursuant to amendments to Section 14A of the Securities Exchange Act, as amended (the “Exchange Act”)company tenure and military service, and the ~~shareholder vote on the frequency~~implementation of the advisory vote on executive compensation at our 2017 Annual Meeting of Shareholders, we are providing our shareholders with an annual opportunity to cast an advisory vote (commonly referred to as “say-on-pay”) to approve the compensation of our Named Executive Officers.retention and referral bonuses.

We celebrate diversity among our teams. Our workforce consists of 71% females and 64% minorities.

•Our field-based management positions are ~~asking~~comprised of 74% women and 49% minorities

•Women and minorities are among our ~~shareholders to provide advisory approval~~top quartile of the compensation of our Named Executive Officers (which consist of our President and Chief Executive Officer, Chief Financial Officer, and our other three highest paid executive officers), as such compensation is disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in this Proxy Statement. Our executive compensation programs are designed to enable us to attract, motivate and retain executive talent, who are critical to our success. Our compensation philosophy and framework have resulted in compensation for ~~our Named Executive Officers that is tied to the Company’s financial results~~employees at 62% and the other performance factors described in the section of this Proxy Statement entitled Compensation Discussion and Analysis. These programs focus on rewarding the types of performance that increase shareholder value, link executive compensation to the Company’s long-term strategic objectives and align executive officers’ interests with those of our shareholders. The Company believes that its executive compensation programs, which emphasize long-term equity awards and variable compensation, satisfy these goals. A substantial portion of each executive’s total compensation is intended to be variable and delivered on a pay-for-performance basis.

Our Board of Directors believes that the information provided above and within the “Executive Compensation” section of this Proxy Statement demonstrates that our executive compensation program was designed appropriately and is working to ensure that management’s interests are aligned with our shareholders’ interests and support long-term value creation.

57%, respectively

~~The Board of Directors recommend a vote “FOR” the adoption of the following non-binding resolution:~~Environmental Commitment

~~RESOLVED,~~We continue to seek ways to reduce our environmental footprint and utilize chemicals and supplies that are safer for employees and for those we serve:

•Using concentrated chemicals, which reduce water use and transportation loads (with the ~~shareholders~~attendant reduction in fuel consumption and emissions)

•Leveraging chemicals and supplies with an array of ~~the Company approve, on an advisory basis, the compensation~~environmental certifications, such as Green Seal, UL ECOLOGO, USDA Certified Biobased Products, and Green Guard Gold

•Utilizing paper products that are 99% ECOLOGO certified, 50% compostable, 90% EPA compliant, and Green Seal Certified

•Technology such as Electrostatic Sprayers that offer eco-friendly touchless application for sufficient and even coverage of ~~the Company’s Named Executive Officers,~~chemical, while reducing cross-contamination

•Locally sourced produce, bakery, and dairy, as ~~disclosed in the Compensation Discussion~~available and ~~Analysis, compensation tables~~utilizing proprietary food production software and ~~narrative discussion set forth in this Proxy Statement.~~menu design to minimize food waste

~~This say-on-pay vote is advisory, and therefore not binding on the Company, the Nominating, Compensation and Stock Option Committee or our Board of Directors.~~

Healthcare Services Group, Inc. | 2021 Proxy Statement | 2


						~~Proposal No. 3~~

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Company operates within a comprehensive plan of corporate governance for the purpose of defining responsibilities, setting high standards of professional and personal conduct and assuring compliance with such responsibilities and standards. The Company regularly monitors developments in the area of corporate governance. These include corporate governance standards and disclosure requirements resulting from the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). In addition, the NASDAQ Stock Market LLC (“NASDAQ”) also has corporate governance and listing requirements. Our corporate governance policies are available on our website at http://investor.hcsgcorp.com/~~corporate-governance.~~governance.

BOARD OF DIRECTORS. The business of the Company is managed under the direction of the ~~Board.~~Board of Directors (the “Board”). The Board meets on a regularly scheduled basis during the Company’s fiscal year to review significant developments affecting the Company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings and also acts by unanimous written consent when necessary and appropriate. The Board met four times during the fiscal year ended December 31, ~~2018.~~2020. During ~~2018,~~2020, each member of the Board attended or participated in 75% or more of the aggregate of (i) the total number of meetings of the Board held during ~~2018,~~2020, and (ii) the total number of meetings held by each committee of the Board on which such member served during ~~2018.~~2020.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 3

The 2021 nominees to serve on the Board are as follows:


Name, Age and Principal Occupations and Public Directorships for the past five years	Director Since
John M. Briggs, CPA, 70, serves as the Company's lead independent Director. Mr. Briggs is the retired founder and a former Partner of BBD, LLP, a registered public accounting firm. Mr. Briggs was a board member and audit chairman of Crossmark Steward Funds, a Regulated Investment Company, from 2006 to 2016.	1993	1,2
Diane S. Casey, RN, 67, is a retired Clinical Nursing Coordinator (CNC) of Endoscopy at Huntingdon Valley Surgery Center, an AAAHC accredited healthcare facility, where Ms. Casey worked for the past five years before her retirement in 2019. Previously, Ms. Casey was employed at Holy Redeemer Health Systems in various surgical nursing and management positions.	2011	3,4
Daniela Castagnino, 46, is an Information Specialist at United Spinal Association, a national 501(c)(3) non-profit membership organization dedicated to enhancing the quality of life of all people living with spinal cord injuries and disorders (SCI/D), for more than the past five years. Previously, Ms. Castagnino was an international consultant for Lazos Profesionales Asociación Civil and the Inter-American Development Bank.	2018
Robert L. Frome, Esq., 83, has been Counsel to the law firm of Olshan Frome Wolosky LLP since 2018 and prior thereto was a partner at such Firm for more than five years.	1983
Laura Grant, 41, is the Chief Operating Officer of Chatham Financial. Ms. Grant's previous roles at Chatham Financial include Managing Director in the Global Real Estate practice and co-head of Chatham's European business. Ms. Grant has concentrated on risk management strategies for Real Estate Investment Trusts (REITs), specializing in interest rate and foreign currency hedging. Prior to joining Chatham, Laura worked at Booz Allen Hamilton in the Capital Asset Management group.	2020	1
John J. McFadden, 59, has been the Principal of Global Circulation Services, a provider of marketing and advertising services to Media and Publishing companies since 2008. Mr. McFadden previously worked at The McGraw-Hill Companies (parent company of Standard and Poor’s) where he held management positions within their global circulation, sales and outsourcing services departments for approximately 15 years.	2012	3
Dino D. Ottaviano, 73, is the retired Principal of D2O Marketing, Inc., a provider of internet productivity tools founded in 2006. Previously, Mr. Ottaviano was employed for 23 years with Transcontinental Direct (successor to Communication Concepts, Inc.), a publicly held outsourcing printer, retiring in 2002 as Vice President of Business Development.	2007	1
Jude Visconto, 47, has been a Principal of American Property Holdings, a real estate investment firm focused on the acquisition, development and management of multi-family/senior housing and commercial assets, for more than the past five years. Mr. Visconto is an active member of the real estate community and participates in a variety of industry-related associations including: The American Senior Housing Association, The Association of the National Investment Center for Senior Housing and Care and The National Association of Realtors.	2015	5
Theodore Wahl, 47, has been the President and Chief Executive Officer of the Company, since May 2015. Mr. Wahl joined the Company in 2004. Prior to his appointment to President and Chief Executive Officer, Mr. Wahl served as President and Chief Operating Officer, Executive Vice President & Chief Operating Officer, Vice President of Finance, Regional Manager, Regional Sales Director, District Manager and Facility Manager. Prior to joining the Company, Mr. Wahl was a Senior Manager with Ernst & Young’s Transaction Advisory Group.	2011

1.Member of Audit Committee.

2.Chairman of the Audit Committee.

3.Member of Nominating, Compensation and Stock Option Committee.

4.Chairwoman of the Nominating, Compensation and Stock Option Committee.

5.Chairman of the Board of the Company.

If Messrs. Briggs and Ottaviano and Ms. Grant are re-elected, it is anticipated that such individuals will comprise the Audit Committee following the Annual Meeting with Mr. Briggs serving as the chairman of such committee.

If Ms. Casey and Mr. McFadden are re-elected, it is anticipated that such individuals will continue to comprise the Nominating, Compensation and Stock Option Committee (the “NCSO Committee”) following the Annual Meeting with Ms. Casey serving as the chairwoman of such committee.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 4

Board Leadership

Jude Visconto was appointed Chairman of the Board of Directors in 2017 and has served as an independent director since 2015. The Board believes that Mr. Visconto’s financial background and management experience are qualifications for the role of Chairman of the Board. In addition, Mr. Visconto’s experience brings additional perspective to the Board as the Company continues its growth and dedication to continued operational excellence in providing services to the post-acute, skilled nursing and senior living markets.

If Mr. Visconto is re-elected to the Board, it is the intention of the Board that he continue to serve as Chairman of the Board. As Chairman of the Board, Mr. Visconto’s duties include: (i) approving agendas, schedules and supporting information provided to the Board; (ii) ensuring the Board has full, timely and relevant information to support its decision-making requirements; (iii) performing the duties of the Chairman at Board meetings; (iv) consulting on the effectiveness of Board committees; (v) at his sole discretion, when necessary and appropriate, calling meetings of the Board’s non-employee directors; (vi) consulting as to the timeliness of the flow of information from the Company that is necessary for the directors to effectively perform their duties; (vii) serving as principal liaison between the non-employee, independent directors and the President and Chief Executive Officer; (viii) if requested by shareholders, being available for consultation and direct communication; and (ix) other duties requested by the Board. In addition, Mr. Visconto presides at executive sessions of the Board without the presence of management. We believe that including an independent chairman in our Board structure enhances the effectiveness of our Board. This structure strengthens our corporate governance by promoting active engagement, objectivity, independence and oversight of management.

The independent directors of the Board have also unanimously re-appointed John M. Briggs as the lead independent director. In the absence of the Chairman, the lead independent director will assume the responsibilities of the Chairman.

Our Board conducts an annual evaluation in order to determine whether it and its committees are functioning effectively. As part of this annual self-evaluation, the Board evaluates whether the current leadership structure continues to be optimal for the Company and our shareholders.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 5

Board Qualifications

We believe that the collective skills, experiences and qualifications of our directors provide our Board with the expertise and experience necessary to advance the interests of our shareholders. While the ~~Nominating, Compensation and Stock Option~~NCSO Committee ~~of our Board~~ has not established any specific, minimum qualifications that must be met by each of our directors, it uses a variety of criteria to evaluate the qualifications and skills necessary for each member of the Board. In addition to the individual attributes of each of our current directors described below, we believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience in the industry the Company serves at the policy-making level in business, exhibit commitment to enhancing shareholder value and have sufficient time to carry out their duties and to provide insight and practical wisdom based on their ~~past~~ experience. The below matrix highlights each director nominees' individual strengths and focuses that they may contribute to the Board as a whole. The absence of a “check” for a particular expertise or experience also does not indicate the director in question is unable to contribute to the decision-making process in that area.

~~Messrs.~~

Independent

Executive Experience

Financial
Expertise

Industry Experience

Operational Experience

Real Estate Experience

John M. Briggs1

Diane S. Casey2

Daniela Castagnino

Robert L. Frome

Laura Grant

John J. McFadden

Dino D. Ottaviano

Jude Visconto3

Theodore Wahl

1.Chairman of the Audit Committee.

2.Chairwoman of the Nominating, Compensation and Stock Option Committee.

3.Chairman of the Board of Directors.

Mr. Wahl ~~and McBryan,~~ and Mmes. Casey and Castagnino have extensive experience in the healthcare services industry. Each of the aforementioned persons’ operational experience, in addition to Mr. Wahl’s financial expertise, enables them to provide guidance with respect to our operations. Also, ~~we believe~~ since Mmes. Casey and Castagnino have not been employees of the Company and have served their careers in patient care and advocacy, respectively, we believe they bring a patient care perspective to the Company. For instance, Mmes. Casey and Castagnino may become aware of new developments related to the healthcare services industry before the Company’s management learns of such developments and their impact on patient-related issues. Additionally, Ms. Castagnino's experience with non-governmental and ~~not-for profit~~not-for-profit institutions provides valuable insight into a customer segment that supports the Company's growth strategy.

Mr. Visconto ~~has~~and Ms. Grant have real estate experience as a Principal of American Property Holdings ~~with a~~and Chief Operating Officer of Chatham Financial, respectively. Mr. Visconto has specific ~~focus on~~experience in the acquisition, development and management of multi-family, senior housing and commercial assets. Mr. Visconto also has extensive experience with licensed operators, management companies and property owners, all of which align with our customer base. Among other qualifications, Ms. Grant has extensive experience with risk management strategies specific to Real Estate Investment Trusts (REITs) and the REITs industry as well as financial expertise in the areas of capital and asset management.

~~Messrs.~~Mr. Frome ~~and Moss have~~has extensive legal experience. In addition, Mr. Frome has also served as a member of the board of directors of other public companies and has extensive corporate finance experience, Securities and Exchange Commission (“SEC”) compliance experience and mergers and acquisitions experience, which ~~experience~~ aids his service to the Board. ~~Both~~Furthermore, Mr. Frome ~~and Mr. Moss~~ also ~~have~~has extensive executive experience as ~~they both~~he served as the managing ~~partners~~partner of ~~their respective firms.~~his law firm.

Mr. Briggs’ ~~years of~~ experience as a certified public accountant ~~provide~~provides him with extensive financial and accounting expertise obtained from over thirty years in public accounting. Mr. Briggs qualifies as an audit committee financial expert under SEC guidelines. Mr. Briggs also brings executive experience to the Board as he served as a partner at his accounting firm.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 6

Mr. Ottaviano, through his experience as a top-level marketing and operations executive for many years for two different companies, one of which was a public company, has a comprehensive understanding of business operations, including business development, as well as the compliance obligations of public companies.

Mr. McFadden has sales and marketing experience both as a Principal of his consulting company and through his experience at The McGraw Hill Companies that provide him with an understanding of a large public company’s operations, as well as the compliance obligations of a public company.


						~~Directors, Executive Officers and Corporate Governance~~

~~Board Leadership~~

Jude Visconto was appointed Chairman of the Board of Directors in May, 2017 and has served as an independent director since May 2015. The Board believes that Mr. Visconto’s financial background and management experience are qualifications for the role of Chairman of the Board. In addition, Mr. Visconto’s more recent business experience is expected to bring additional perspective to the Board as the Company continues its growth and evolution.

Board Committees

The Board has established an Audit Committee and a ~~Nominating, Compensation and Stock Option~~NCSO Committee to devote attention to specific subjects and to assist in the discharge of its responsibilities. The functions of those committees, their current members and the number of meetings held during ~~2018~~2020 with respect to the Audit Committee and the ~~Nominating, Compensation and Stock Option~~NCSO Committee are described below:

AUDIT COMMITTEE. The Audit Committee’s primary responsibilities, as described in the Amended and Restated Audit Committee Charter (a copy of which is available on the Company’s website, www.hcsg.com) include:

a.appointment, compensation and oversight of the Company’s Independent Registered Public Accounting Firm, who report directly to the Audit Committee, including (i) prior review of the Independent Registered Public Accounting ~~Firm’~~Firm’s plan for the annual audit, (ii) pre-approval of both audit and non-audit services to be provided by the Independent Registered Public Accounting Firm and (iii) annual assessment of the qualifications, performance and independence of the Independent Registered Public Accounting Firm;

b.overseeing and monitoring the Company’s accounting and financial reporting processes and internal control system, audits of the Company’s financial statements and the quality and integrity of the financial reports and other financial information issued by the Company;

c.providing an open avenue of communication among the Independent Registered Public Accounting Firm and financial and other senior management and the Board;

d.reviewing with management and, where applicable, the Independent Registered Public Accounting Firm, prior to release, required annual, quarterly and interim filings by the Company with the SEC and the type and presentation of information to be included in earnings press releases;


						~~Directors, Executive Officers and Corporate Governance~~

e.reviewing material issues, and any analysis by management or the Independent Registered Public Accounting Firm, concerning accounting principles, financial statement presentation, certain risk management issues, such as the adequacy of the Company’s internal controls and significant financial reporting issues and judgments and the effect of regulatory and accounting initiatives on the Company’s financial statements;

f.reviewing with the Company’s legal counsel any legal matters that could have a significant effect on the Company’s financial statements, compliance with applicable laws and regulations and inquiries from regulators or other governmental agencies;

g.reviewing and approving all related party transactions between the Company and any director, executive officer, other employee or family member;

h.reviewing and overseeing compliance with the Company’s Code of Ethics and Business Conduct;

i.establishing procedures regarding the receipt, retention and treatment of, and the anonymous submission by employees of the Company of, complaints regarding the Company’s accounting, internal controls or auditing matters; and

j.reporting Audit Committee activities to the full Board and issuing annual reports to be included in the Company’s Proxy Statement.

~~Each~~If elected, each of Messrs. ~~Moss,~~ Ottaviano and Briggs ~~is an~~and Ms. Grant are independent ~~director~~directors as such term is defined by Rule 5605(a)(2) of the NASDAQ listing standards and Rule 10A-3 of the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”). Mr. Briggs has been designated as an “audit committee financial expert” and he satisfies the attributes required of an audit committee financial ~~experts~~expert pursuant to Section 407 of Sarbanes-Oxley.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 7

The Audit Committee met ~~five~~seven times during fiscal year ~~2018.~~2020. The report of the Audit Committee for the fiscal year ended December 31, ~~2018~~2020 is included herein under “Audit Committee Report” below.

NOMINATING, COMPENSATION AND STOCK OPTION COMMITTEE. The ~~Nominating, Compensation and Stock Option~~NCSO Committee (currently composed of Ms. Casey and Mr. McFadden) assists the Board by:

a.developing and recommending to the Board a set of effective corporate governance policies and procedures applicable to the Company;

b.identifying, reviewing and evaluating individuals qualified to become Board members and recommending that the Board select director nominees for each annual meeting of the Company’s shareholders;

c.discharging the Board’s responsibilities relating to the compensation of Company executives; and

d.administering the Company’s ~~stock option plan and other~~ equity-based compensation plans.

Each of Ms. Casey and Mr. McFadden are independent directors as such term is defined by Rule 5605(a)(2) of the NASDAQ listing standards. The ~~Nominating, Compensation and Stock Option~~NCSO Committee met once during fiscal year ~~2018~~2020 and also acts by unanimous written consent when necessary and appropriate.

The ~~Nominating, Compensation and Stock Option~~NCSO Committee has not adopted a policy or process by which shareholders may make recommendations to the ~~Nominating, Compensation and Stock Option~~NCSO Committee of candidates to be considered by this ~~Nominating, Compensation and Stock Option~~NCSO Committee for nomination for election as Directors. The ~~Nominating, Compensation and Stock Option~~NCSO Committee has determined that it is not appropriate to have such a policy because such recommendations may be informally submitted to and considered by the ~~Nominating, Compensation and Stock Option~~NCSO Committee under its Charter. Shareholders may make such recommendations by giving written notice to Healthcare Services Group, Inc., 3220 Tillman Drive, Suite 300, Bensalem, PA 19020, Attention: Corporate Secretary either by personal delivery or by United States ~~mail, postage prepaid.~~mail. The Charter of the ~~Nominating, Compensation and Stock Option~~NCSO Committee is provided on the Company’s website, www.hcsg.com. The ~~Nominating, Compensation and Stock Option~~NCSO Committee has not established a formal process for identifying and evaluating nominees for Director, although generally the ~~Nominating, Compensation and Stock Option~~NCSO Committee may use multiple sources for identifying and evaluating nominees for Director, including referrals from current Directors and shareholders. The ~~Nominating, Compensation and Stock Option~~NCSO Committee has identified certain qualifications it believes an individual should possess before it recommends such person as a nominee for election to the Board of Directors.


						~~Directors, Executive Officers and Corporate Governance~~

The ~~Nominating, Compensation and Stock Option~~NCSO Committee believes that nominees for Director should possess the highest personal and professional ethics, integrity, values and judgment and be committed to representing the long-term interests of the Company’s shareholders. The ~~Nominating, Compensation and Stock Option~~NCSO Committee does not have a formal policy with respect to considering diversity in identifying nominees for ~~directors. The Nominating, Compensation and Stock Option Committee~~directors however believes that ~~racial and gender~~ diversity ~~are~~is an important ~~factors~~factor in assessing potential board members ~~but not at~~along with the ~~expense of~~ particular qualifications and experience required to meet the needs of the Board. Furthermore, as part of the ~~Nominating, Compensation and Stock Option~~NCSO Committee’s review of board composition, the board also considers diversity of experience and background in an effort to ensure that the composition of directors ensures a strong and effective board. The ~~Nominating, Compensation and Stock Option~~NCSO Committee seeks to ensure that the composition of the Board at all times adheres to the independence requirements of the NASDAQ listing standards and reflects a range of talents, skills, and expertise, particularly in the areas of management, leadership, and experience in the Company’s and related industries, sufficient to provide sound and prudent guidance with respect to the operations and interests of the Company.

The report of the ~~Nominating, Compensation and Stock Option~~NCSO Committee regarding executive compensation for the fiscal year ended December 31, ~~2018~~2020 is included herein under the “Nominating, Compensation and Stock Option Committee Report” below.

Code of Ethics and Business Conduct

We have also adopted a Code of Ethics and Business Conduct for directors, officers and employees of the Company. It is intended to promote honest and ethical conduct, full and accurate reporting and compliance with laws as well as other matters. A copy of the Code of Ethics and Business Conduct is posted on our website at www.hcsg.com.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 8

Board Role in Risk Oversight

Our Board is responsible for overseeing the Company’s risk management process. The Board focuses on the Company’s general risk management strategy, including the most significant risks facing the Company, and ensures that appropriate risk mitigation strategies are implemented by management. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters.

The Board has delegated to the Audit Committee oversight of certain aspects of the Company’s risk management process. Among its duties, the Audit Committee oversees the Company’s compliance with legal and regulatory requirements and the Company’s system of disclosure controls and system of internal financial, accounting and legal compliance controls. The Board receives a quarterly update from the Audit Committee, which includes a review of items addressed during prior quarters. Our ~~other Board committee~~NCSO Committee also considers and addresses risk as it performs its committee responsibilities. All committees report to the full Board as appropriate, including when a matter rises to the level of a material risk.

The Company’s management is responsible for day-to-day risk management under the direction of Jason J. Bundick, the Company’s Executive Vice President, Chief Compliance Officer, General Counsel and Secretary. Our internal audit department serves as the primary monitoring and testing function for Company-wide policies and procedures, and manages the day-to-day oversight of the risk management strategy for the ongoing business of the Company. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, ESG, compliance and reporting levels. The Company conducts an annual review of the Company’s disclosure controls and procedures, code of ethics and billing and sales compliance. To the extent deemed necessary, the Company revises such procedures and policies. ~~The Company also assesses environmental, social and governance risks and opportunities.~~

We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing the Company and that our Board leadership structure supports this approach.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 9


						~~Directors, Executive Officers and Corporate Governance~~

Directors’ Compensation

Directors who are also our employees are not separately compensated for their service as directors. Our non-employee directors received the following aggregate amounts of compensation for the year ended December 31, ~~2018:~~2020:

Name Fees Earned or Paid in Cash
Option Awards¹^,²
Total
John M. Briggs ³
$ 50,000 $ 52,410 $ 102,410
Robert L. Frome ⁴
$ 4,000 $ 52,410 $ 56,410
Robert J. Moss ⁵
$ 9,000 $ 52,410 $ 61,410
Dino D. Ottaviano ⁶
$ 9,000 $ 52,410 $ 61,410
Diane S. Casey ⁷
$ 5,000 $ 52,410 $ 57,410
John J. McFadden ⁸
$ 5,000 $ 52,410 $ 57,410
Jude Visconto ⁹
$ 44,000 $ 52,410 $ 96,410
Daniela Castagnino ¹⁰
$ 2,000 — 2,000


Name	Fees Earned or Paid in Cash		Option Awards 1,2		Total
John M. Briggs 3	$	58,000	$	23,096	$	81,096
Diane S. Casey 4	$	11,500	$	23,096	$	34,596
Daniela Castagnino 5	$	7,000	$	23,096	$	30,096
Robert L. Frome 6	$	7,000	$	23,096	$	30,096
Laura Grant7	$	15,000	$	30,734	$	45,734
John J. McFadden 8	$	11,500	$	23,096	$	34,596
Robert J. Moss 9	$	6,000	$	23,096	$	29,096
Dino D. Ottaviano 10	$	21,000	$	23,096	$	44,096
Jude Visconto 11	$	54,000	$	23,096	$	77,096

1.The amounts in this column do not reflect compensation actually received by the Director, nor do they reflect the actual value that will be recognized by the Director. Instead, the amounts represent the expense to be recognized for financial statement reporting purposes with respect to the grant date fair value of the ~~2018~~2020 option awards made to each Director. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, the fair value of the options was estimated using the Black-Scholes option valuation model.

2.All option awards granted in ~~2018~~2020 become vested and exercisable ratably over a ~~five year~~five-year period on each yearly anniversary date of the grant.

3.Mr. Briggs had vested options to purchase ~~23,782~~30,008 shares of Common Stock outstanding as of December 31, ~~2018.~~2020.

4.Ms. Casey had vested options to purchase 15,003 shares of Common Stock as of December 31, 2020

5.Ms. Castagnino had vested options to purchase 1,001 shares of Common Stock as of December 31, 2020.

6.Mr. Frome had vested options to purchase ~~32,510~~30,008 shares of Common Stock outstanding as of December 31, ~~2018.~~2020.

5.7.~~Mr. Moss~~Ms. Grant had no vested options ~~to purchase~~ ~~8,004 shares of Common Stock outstanding~~ as of December 31, ~~2018.~~

6.~~Mr. Ottaviano had vested options to purchase~~ ~~15,957 shares of Common Stock as of December 31, 2018.~~

^7.~~Ms. Casey~~ ~~had vested options to purchase 5,001 shares of Common Stock as of December 31, 2018.~~2020.

8.Mr. McFadden had vested options to purchase ~~15,006~~25,007 shares of Common Stock as of December 31, ~~2018.~~2020.

9.On May 26, 2020, Mr. Moss retired from the Board and at the time of his retirement had vested options to purchase 18,006 shares of Common Stock outstanding.

10.Mr. Ottaviano had vested options to purchase 25,659 shares of Common Stock as of December 31, 2020.

11.Mr. Visconto had vested options to purchase ~~3,002~~10,004 shares of Common Stock as of December 31, ~~2018.~~

~~10.Ms. Castagnino~~ ~~had no vested options as of December 31, 2018.~~2020.

Directors’ Fees

~~The~~During 2020, the Company ~~pays~~updated its board compensation structure from paying each non-employee director $1,000 for each regular or committee meeting of the Board ~~attended. In addition, Messrs. Visconto~~attended, to a quarterly retainer structure. Under the Company's updated policy, the Chairman of the Board and ~~Briggs~~Chairman of the Audit Committee each receive a quarterly retainer of ~~$10,000 with respect to Mr. Visconto’s services as Chairman~~$15,000. Non-chair members of the ~~Board~~audit committee receive a quarterly retainer of ~~Directors and Mr. Briggs’s services as Chairman~~$7,500. Members of the ~~Audit~~NCSO Committee ~~and as an audit~~receive a quarterly retainer of $3,750. Directors who do not sit on a committee ~~financial expert.~~receive a quarterly retainer of $2,500. In addition ~~as indicated above under Directors’ Compensation, Directors~~to the quarterly retainers our directors also receive ~~option~~equity awards.

Procedures for Contacting Directors

The Board has established a process for shareholders to send communications to the Board. Shareholders may ~~communicate with~~send communications to the Board generally or to a specific director at any time by writing to: Healthcare Services Group, Inc., 3220 Tillman Drive, Suite 300, Bensalem, PA 19020, Attention: Corporate Secretary. The Company reviews all messages received, and forwards any message that reasonably appears to be a communication from a shareholder about a matter of shareholder interest that is intended for communication to the Board. Communications are sent as soon as practicable to the director to whom they are addressed, or if addressed to the Board generally, to the ~~chairman~~chairwoman of the ~~Nominating, Compensation and Stock Option~~NCSO Committee. Because other appropriate avenues of communication exist for matters that are not of shareholder interest, such as general business complaints or employee grievances, communications that do not relate to matters of shareholder interest are not forwarded to the Board.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 10


						~~Directors, Executive Officers and Corporate Governance~~

~~Non Director~~Non-Director Executive Officers

Our non-director executive officers for the ~~2018~~2020 fiscal year are listed below. For biographical information relating to ~~Messrs.~~Mr. Wahl, ~~and McBryan,~~ please refer to the Company’s Board nominees under Proposal 1 and the Board Qualifications section of this Proxy Statement.


Name, Age and Principal Occupations
John C. Shea, MBA, CPA, ~~47,~~49, Executive Vice President and Chief Financial Officer since April 2012. Mr. Shea had previously served as Secretary, Vice President of Finance & Chief Accounting Officer. Mr. Shea joined the Company in 2009 as the Director of Regulatory Reporting. Prior to joining the Company, Mr. Shea was a Senior Manager with Ernst & Young’s Transaction Advisory Services.
Michael E. McBryan, 56, was the Executive Vice President and Chief Revenue Officer of the Company, from April 2012 to December 2020. Mr. McBryan joined the Company in 1988. Prior to his appointment to Executive Vice President and Chief Revenue Officer, Mr. McBryan served as Senior Vice President, Divisional Vice President, Regional Sales Director, District Manager and Facility Manager. Mr. McBryan retired from his position as Executive Vice President and Chief Revenue Officer of the Company on December 31, 2020. Mr. McBryan has continued to serve in an advisory capacity and as a member of the Board since his retirement however Mr. McBryan has decided not to stand for re-election at the Company's 2021 Annual Meeting.
Jason J. Bundick, Esq., ~~42,~~44, Executive Vice President, Chief Compliance Officer, General Counsel & Secretary since December 2013. Mr. Bundick joined the Company in 2012 as Corporate Counsel. Prior to joining the Company, Mr. Bundick was an attorney with the law firm of Drinker Biddle & Reath LLP for more than five years.
~~David Hurlock, 44,~~Andrew W. Kush, 43, Executive Vice President and Chief Operating Officer since ~~July 2017.~~February 2020. Mr. ~~Hurlock~~Kush had previously served as ~~Senior Vice President of Operations since January 2013. Mr. Hurlock joined the Company in 1997.~~
~~Andrew W. Kush, 41,~~ Executive Vice President and Chief Administrative Officer since June ~~2017. Mr. Kush had previously served~~2017, and as Senior Vice President of Human Resources & Risk Management ~~since January 2013.~~from 2013 to 2017. Mr. Kush joined the Company in 2010 as the Vice President of Human Resources. Prior to joining the Company, Mr. Kush was a Vice President of Risk Management with PNC Financial Services Group, Inc.

~~Section 16(a) Beneficial Ownership Reporting Compliance~~

Section 16(a) of the Exchange Act requires the Company’s Directors, executive officers and 10% shareholders to file with the SEC and NASDAQ initial reports of ownership and reports of changes in ownership of the Company’s Common Stock. Directors and executive officers are required to furnish the Company with copies of all Section 16(a) reports which they file.

To the Company’s knowledge, based solely on review of the copies of these reports furnished to the Company and written representations that no other reports were required, during 2018 all Section 16(a) filing requirements applicable to its directors and executive officers were complied with, other than a filing by Mr. Wahl which was two days late.

~~Sarbanes-Oxley Act Compliance~~

~~Sarbanes-Oxley sets forth various requirements for public companies and directs the SEC to adopt additional rules and regulations.~~

Currently, the Company believes it is in compliance with all applicable laws, rules and regulations arising from Sarbanes-Oxley. The Company intends to comply with any additional rules and regulations adopted by the SEC pursuant to Sarbanes-Oxley no later than the time they become applicable to the Company.


						~~Directors, Executive Officers and Corporate Governance~~

~~Audit Committee Report~~

The members of the Audit Committee from January 1, 2018 to December 31, 2018 were Messrs. Briggs, Moss and Ottaviano. The Audit Committee met five times during the fiscal year ended December 31, 2018. The Audit Committee is responsible for the appointment of the Independent Auditors for each fiscal year, recommending the discharge of the Independent Auditors to the Board and confirming the independence of the Independent Auditors. It is also responsible for: reviewing and approving the scope of the planned audit, the results of the audit and the Independent Auditors’ compensation for performing such audit; reviewing the Company’s audited financial statements; and reviewing and approving the Company’s internal accounting controls and disclosure procedures, and discussing such controls and procedures with the Independent Auditors.

~~A copy of the Company's Amended and Restated Audit Committee Charter is available on the Company’s website at www.hcsg.com.~~

The Company’s Independent Registered Public Accounting Firm are responsible for auditing the financial statements, as well as auditing the Company’s internal controls over financial reporting. The activities of the Audit Committee are in no way designed to supersede or alter those traditional responsibilities. The Audit Committee’s role does not provide any special assurances with regard to the Company’s financial statements, nor does it involve a professional evaluation of the quality of the audits performed by the Independent Auditors.

In connection with the audit of the Company’s financial statements for the year ended December 31, 2018, the Audit Committee met with representatives from Grant Thornton LLP, the Company’s Independent Auditors, and the Company’s internal auditor. The Audit Committee reviewed and discussed with Grant Thornton LLP and the Company’s internal auditor, the Company’s financial management and financial structure, as well as the matters relating to the audit required by the Public Company Accounting Oversight Board Auditing Standard.

The Audit Committee and Grant Thornton LLP also discussed Grant Thornton LLP’s independence. In November 2018, the Audit Committee received from Grant Thornton LLP the written disclosures and the letter regarding Grant Thornton LLP’s independence required by Public Company Accounting Oversight Board Rule 3526.

In addition, the Audit Committee reviewed and discussed with management the Company’s audited financial statements for the fiscal year ended December 31, 2018, as well as management’s assessment of internal controls over financial reporting.

Based upon the review and discussions described above, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the Company’s financial statements audited by Grant Thornton LLP, as well as the audit of the Company’s internal controls over financial reporting be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

~~AUDIT COMMITTEE~~

~~John M. Briggs, Chairman~~

~~Robert J. Moss~~

~~Dino D. Ottaviano~~


						~~Audit Committee Report~~

~~Nominating, Compensation and Stock Option Committee Report~~

The compensation of the President and Chief Executive Officer of the Company is determined by the Nominating, Compensation and Stock Option Committee. Such Committee’s determinations regarding such compensation are based on a number of factors including, in order of importance:

•~~Consideration of the operating and financial performance of the Company, primarily its income before income taxes~~.;

•~~Attainment of a level of compensation designed to retain a superior executive in a highly competitive environment; and~~

•~~Consideration of the individual’s overall contribution to the Company.~~

In consultation with the President and Chief Executive Officer of the Company, the Nominating, Compensation and Stock Option Committee develops guidelines and reviews the compensation and performance of the other executive officers of the Company, and sets the compensation of the executive officers of the Company and/or any management fees paid by the Company for executives services when needed. In addition, the Nominating, Compensation and Stock Option Committee makes recommendations to the Board with respect to incentive-compensation plans and equity-based plans, and establishes criteria for the granting of options in accordance with such criteria; and administers such plans. The Nominating, Compensation and Stock Option Committee reviews major organizational and staffing matters. In consultation with the President and Chief Executive Officer of the Company, the Nominating, Compensation and Stock Option Committee oversees the development and growth of executive management personnel. With respect to director compensation, the Nominating, Compensation and Stock Option Committee designs a director compensation package of a reasonable total value based on comparisons with similar firms and aligned with long-term shareholder interests. Finally, the Nominating, Compensation and Stock Option Committee reviews director compensation levels and practices, and may recommend, from time to time, changes in such compensation levels and practices to the Board, with equity ownership in the Company encouraged. The Nominating, Compensation and Stock Option Committee’s charter provides that the Nominating, Compensation and Stock Option Committee shall have the authority to obtain advice and seek assistance from internal and external legal, accounting and other advisors.

The Nominating, Compensation and Stock Option Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

~~NOMINATING, COMPENSATION AND STOCK OPTION COMMITTEE~~

~~Diane S. Casey, Chairwoman~~

~~John J. McFadden~~


						~~Nominating, Compensation and Stock Option Committee Report~~

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Company

Healthcare Services Group provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. We believe we are the largest provider of housekeeping and laundry management services to the long-term care industry in the United States, rendering such services to over 3,000 facilities throughout the continental United States as of December 31, 2020.

With more than 40 years of industry experience, HCSG aims to deliver improved operational, regulatory, and financial outcomes. We achieve this by designing and implementing the most efficient systems, holding our teams accountable, measuring and reporting our results, and designing quality assurance programs to continually assess and improve our programs. We pursue excellence via an ever-evolving and expanding focus on training and the development of team members at every level.

Our Named Executive Officers

We refer to our President and Chief Executive Officer, the Chief Financial Officer, and ~~each of~~ our ~~other~~ three most highly compensated executive officers who were serving as executive officers at the end of our latest fiscal year as our Named Executive Officers (“NEOs”). In ~~2018~~2020, our NEOs were as follows:


Named Executive Officer						Role
Theodore Wahl						President, & Chief Executive Officer & Director
John C. Shea						Executive Vice President & Chief Financial Officer
Michael E. McBryan						Executive Vice President, & Chief Revenue Officer & Director
~~David Hurlock~~						~~Executive Vice President & Chief Operating Officer~~
Andrew W. Kush						Executive Vice President & Chief ~~Administrative~~Operating Officer
Jason J. Bundick						Executive Vice President, Chief Compliance Officer, General Counsel & Secretary

Healthcare Services Group, Inc. | 2021 Proxy Statement | 11

2020 Business Highlights

In 2020, the long-term and post-acute care industry continued to work through a challenging cycle that negatively impacted overall industry fundamentals. On-going occupancy pressures, lease costs issues, reimbursement uncertainty, and the global COVID-19 pandemic led to an unprecedented level of ownership turnover within the industry. Notwithstanding the industry challenges, from an overall operational and financial stewardship point of view, the Board and NCSO Committee believed that in 2020, management performed well in a challenging environment involving high levels of industry stress and difficult market conditions. Management showed proactivity and innovation in identifying solutions, especially in innovating around the COVID-19 pandemic, while also setting the Company up for future success.

Key 2020 accomplishments included the following:

•COVID-19 Response:

◦Guided by our Company Purpose of Fostering Fulfillment in Communities our Managers and Associates led and served on the frontlines through one of the most trying periods for our industry and country, while tirelessly supporting our customers and helping to ensure the well-being of America’s most vulnerable.

◦Demonstrated remarkable business resilience, producing extraordinary operational outcomes and delivering strong financial results – underscoring our ability to thrive in even the most challenging environments.

◦Awarded tens of millions of dollars of “hero-pay” - including over $7.0 million of special leadership bonuses - for heroic efforts working through the challenges brought onto our business from the pandemic during 2020.

•Successfully transitioned a record number of over 700 facility ownership changes;

•Generated record operating cash flow of $217.2 million, an increase of over 232% from the prior year;

•Paid out record cash dividends of $60.7 million, with the fourth quarter of 2020 representing the 70th consecutive quarterly increase;

•Demonstrated continued financial discipline and efficiency with return on assets of 12.6%, return on equity of 20.5% and return on invested capital of 41.4%;

•Continued transition of customer payment terms from monthly to semimonthly or weekly, resulting in over 55% of customers on an increased payment frequency model; and

•Further reduced workers compensation claim scope and severity resulting in favorable loss development trends and decreased expense.

We did not make any adjustments to executive compensation in 2020 in response to the pandemic, as the metrics we utilized in determining incentive awards have proven to be resilient and relevant. The base salary of our CEOs and most other NEOs remained flat outside of promotions or an adjustment of significantly below market compensation (Our CEO’s base salary has been unchanged for the past 5 years). We did, however, add PSUs to our long-term incentive awards which also include stock options and RSUs, as a direct result of shareholder feedback. The detail below more fully describes our structure and compensation paid in fiscal year 2020.

Compensation Objectives

NEO compensation is based on a combination of ~~company~~Company and individual contributions to our performance, along with each NEO's level and scope of responsibility. Our ~~Nominating, Compensation and Stock Option~~NCSO Committee ~~(“NCSO Committee”)~~ believes that the compensation paid is consistent with our overarching principle that compensation plans of senior operational officers should be closely aligned with our performance on both a short-term and long-term basis to create value for shareholders, and that such compensation should assist us in attracting and retaining key executives critical to our long-term success.

In establishing compensation for executive officers, the following are the objectives of the Company and the NCSO Committee:

•Attract and retain individuals of superior ability and managerial talent;

•~~Aim to~~ ~~ensure officer~~Align executive compensation ~~is aligned~~ with our corporate strategies, business objectives and the long-term interests of our shareholders; and

•Enhance the officers’ incentive to maximize shareholder value, as well as promote retention of key personnel, by providing a portion of total compensation for management in the form of direct ownership in the Company through ~~stock options and other stock-based compensation plans.~~equity compensation.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 12

To support these objectives, the Company’s executive compensation program has the following characteristics:

What we do:

What we don’t do:

Significant share ownership requirements for senior executives

No employment agreements containing special severance payments such as golden parachutes

Double-trigger requirements for vesting of ~~time-based~~equity awards on a change in control

No hedging or engaging in derivative transactions related to Company shares

A cap on the annual incentive payout for the Chief Executive Officer

No gross-up payments to cover income taxes related to executive compensation

Majority of NEO compensation is “at-risk”

No repricing or backdating of stock options

Operate a clawback policy that applies to “at-risk” variable compensation ~~(new for 2019)~~

No retirement programs that are specific to executive officers

Balance ~~"at risk"~~“at-risk” compensation across short-term and long-term time horizons

Company engages an independent compensation consultant

Compensation Oversight

Among its duties, the NCSO Committee is accountable for discharging the Board’s responsibilities relating to the compensation of Company executives. Accordingly, the NCSO Committee conducts an annual review of the aggregate level of our executive compensation, as well as the mix of elements used to compensate our executive officers.

To achieve these objectives, our overall compensation program aims to pay our NEOs competitively, consistent with our success and their contribution to that success. To accomplish this we rely on programs that provide compensation in the form of

both cash and equity. Although our NCSO Committee has not adopted any formal guidelines for allocating total compensation between cash and equity, the NCSO Committee considers the balance between providing short-term and long-term incentives which are designed to help align the interests of management with the interests of shareholders.

Determination of Compensation Awards

The compensation of the President and Chief Executive Officer of the Company is determined by the NCSO Committee. Such ~~determinations regarding compensation are~~determination is based on a number of factors including, in order of importance:

•Consideration of the operating and financial performance of the Company, primarily its income before income ~~taxes~~;taxes;

•Attainment of a level of compensation designed to retain a superior executive in a highly competitive environment; and

•Consideration of the individual’s overall contribution to the Company.

The NCSO Committee has also historically taken into account input from other independent members of our Board in determining the compensation of the President and Chief Executive Officer. Compensation for the other NEOs is recommended by the President and Chief Executive Officer and reviewed by the NCSO Committee, taking into account the same factors described above.

The Company engages an independent compensation consultant who provides advice as requested in areas such as peer group composition, market benchmarking and executive compensation policy design.

Beyond the NEOs the Company applies a consistent approach to compensation for all employees, including senior management. This approach is based on the belief that the achievements of the Company result from the coordinated efforts of all employees working toward common objectives.

Review of Compensation

In conducting the annual review of compensation, publicly available data relating to the compensation practices and policies of other companies within and outside our industry is collected to the extent it is available. The NCSO Committee believes that gathering information about the compensation practices of other companies is an important part of our compensation-related decision-making process.

Given the challenge that there are no other U.S. publicly-traded companies specifically engaged in the Company’s business, which provides housekeeping and food services solely to the healthcare industry and primarily to the long-term care segment of the industry, our comparator group has been developed looking at a broader cross-section of service industry companies. The committee reviews the peer group annually to identify relevant companies for comparison. The following companies have been

Healthcare Services Group, Inc. | 2021 Proxy Statement | 13

selected as reasonable comparators for talent as they operate in similar industries, are of similar size and scope, and/or have similar employee bases. That group consists of the following:


l	ABM Industries Incorporated	l	J&J Snack Foods Corp.
l	Amedisys, Inc.	l	~~ServiceMaster~~Terminix Global Holdings, Inc.
l	AMN Healthcare Services, Inc.	l	~~Snyder’s-Lance, Inc.~~The Brink’s Company
l	Chemed Corporation	l	~~The Brink’s Company~~Modivcare, Inc.
l	Clean Harbors, Inc.	l	~~The Providence Service~~UniFirst Corporation
l	CoreCivic, Inc.	l	~~UniFirst Corporation~~

~~Based on the Company’s size relative to the peer group (58th percentile for both revenue and market cap), the NCSO Committee referenced a range around the peer group 50~~^th ~~percentile when reviewing total compensation levels for the President and Chief Executive Officer.~~

Given the challenges noted above in identifying directly comparable companies, if and when collected, market data is just one factor that the NCSO Committee considers in reaching decisions. Such other factors considered include individual performance, the trends in Company performance relative to broader market indices, the industry in which we operate, tax implications, and achievements in the Company’s social and sustainability efforts.

Incorporating Shareholder ~~Views~~Feedback

During the course of 2017, 2018 and 2019, the NCSO Committee made a number of changes to the Company’s executive compensation programs in response to feedback. These conclusions, and where applicable resulting changes, of the review, are summarized below:

~~Compensation Program Review~~

~~Highlights~~

~~Rationale~~

~~Formalization of annual incentive program~~

~~(Effective FY 2017)~~

~~Primary performance metric of income before income taxes for President and CEO, and the other NEOs~~

~~Desire to increase transparency and demonstrate objectivity in determining annual incentive payments~~

~~Additional quantifiable operational performance metrics used to validate outcomes for other NEOs~~

~~Feedback suggested consideration of annual incentive arrangements that were not wholly discretionary~~

~~Individual opportunities defined as percentage of the Company’s income before income taxes~~

~~Income before income taxes is an important financial metric to the Company and our shareholders~~

~~Maximum payment for the President and CEO of two-times salary~~

~~The ability for the President and CEO to take bonus in the form of stock, reinforces our ownership culture as we transition away from a founder President and CEO~~

~~President and CEO can elect to receive part of the annual incentive in stock~~

~~Assessment of Long-Term Equity Award Approach~~

~~(Under ongoing review and discussion)~~

The NCSO Committee believes that the use of stock options continues to provide direct alignment to sustainable shareholder value creation, aligning our NEOs’ interests with those of our shareholders, reinforced by the use of restricted stock units which also helps retain our successful leadership team

~~In light of feedback, the NCSO Committee has reviewed the current practice of awarding long-term equity as a mix of stock options and restricted stock units~~

~~Given the Company currently does not provide guidance or set targets externally, the NCSO Committee determined the current approach remains optimal~~

~~Furthermore, the NCSO Committee believes a five-year vesting period for all awards further enhances the focus on long-term sustainable performance~~

~~Share Ownership Guidelines~~

~~(Effective FY2018)~~

~~Adopted share ownership guidelines and a retention requirement for executive officers with effect from January 1, 2018~~

Due to a pre-existing ‘ownership culture’, which meant there were significant levels of stock ownership among the leadership team, the NCSO Committee had not historically seen the need to adopt formal guidelines

~~President and CEO required to hold stock worth six-times base salary~~

~~However, to be responsive to shareholder feedback the NCSO has formalized a guideline from 2018~~

~~Other NEOs required to hold stock worth two-times base salary~~

~~Retention requirements apply if guideline not achieved within five years~~

~~All NEOs already exceed their respective stock ownership guideline~~

~~Adoption of double trigger requirements on a change in control~~

~~(Effective FY2018)~~

~~On a change in control, stock awards will now be subject to double trigger requirements~~

~~Review of market practices, investor guidelines and shareholder feedback indicated a shift to double-trigger would be appropriate~~

~~Adoption of a clawback policy~~

~~(Effective FY2019)~~

~~“At-risk” compensation (performance-based compensation and equity awards) will now be subject to clawback at the discretion of the NCSO Committee~~

~~Review of market practices, investor guidelines and shareholder feedback indicated the adoption of a clawback policy would be appropriate~~

~~A clawback could be affected in the event of a restatement of Company financial statements~~

~~Desire to provide greater risk mitigation power to the Board of Directors~~

The NCSO Committee was pleased ~~to see~~ that ~~the overwhelming majority~~approximately 96% of votes cast at the ~~2018~~2020 Annual Meeting of Shareholders approved, on an advisory basis, the compensation of the Company’s NEOs (“say-on-pay”). The NCSO Committee considered that support in its efforts to align the Company’s executive compensation policies with long-term shareholder interests.

~~Since~~Over the ~~Annual Meeting of Shareholders~~last three years the NCSO Committee has ~~continued~~made a series of changes to ~~keep under review our ability~~the Company’s executive compensation programs in response to ~~set meaningful long-term~~feedback. These changes have included:

•In 2018, we introduced formal share ownership guidelines and retention requirements, and updated all change in control provisions to be double trigger.

•In 2019, we approved a formal clawback policy applying to ‘at risk’ compensation.

•In 2020, formalizing the structure of performance ~~targets, and accordingly our ability to use long-term performance-based equity. The Committee remains~~stock equity awards which are a part of the ~~view~~Company's 2021 executive compensation program.

Long-term equity awards are currently made in a combination of stock options that generate value based on the performance of the Company’s share price and restricted stock units. Performance share units complement these vehicles by providing a formal multi-year performance requirement and augmenting our focus on long-term sustainable value creation and retention of critical talent. This change is further summarized below.

Compensation Program Review

Highlights

Rationale

Introduction of performance-based long-term equity award

(Effective FY 2021)

Introduce performance stock units (PSUs) to be granted alongside stock options and restricted stock units (RSUs).

PSUs complement the existing long-term equity vehicles, which remain important tools for incentivizing sustainable stock price growth and retention.

Vesting of PSUs will be assessed based on a three-year relative Total Shareholder Return (TSR) performance condition, with comparisons made to the S&P MidCap 400 Index given the absence of a sufficiently large enough group of directly relevant peers.

Given the Company currently does not provide guidance or set targets externally, a relative TSR performance condition is believed to be the most appropriate measure of performance (no requirement for Company-based targets to be set). It also aligns with our compensation objectives with its direct alignment to shareholder interests.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 14

Alignment of Pay and Performance

The NCSO Committee believes that including stock options and restricted stock units ~~best achieve our~~as a significant component of compensation ~~objectives and~~has successfully ~~align~~aligned pay with performance. This is evidenced through the fact that ~~over~~during the ~~last three years (the~~ tenure of our current ~~CEO)~~CEO, the outcome under the annual incentive plan and value of equity awarded has generally trended in line with operating performance. This will be further enforced with the inclusion of PSUs as part of executive compensation in 2021.

The chart below shows the value of equity granted to the ~~CEO~~President and Chief Executive Officer in ~~each of 2016, 2017, and 2018~~the last three years versus the change in ~~Total Shareholder Return~~our TSR and Operating Income (indexed to 100%) over the period. When the value of equity is calculated as of the vesting date or as of ~~April 1, 2019,~~March 15, 2021, there is a stronger correlation with performance than when Summary Compensation (grant date fair value) totals are used. This demonstrates the alignment of pay and performance as the value of long-term awards decreases as the stock price does.

~~Note:~~ Equity data collected from applicable proxy filings. Financial data are sourced from the S&P Capital IQ financial database. Summary Compensation Table “SCT” values represent the grant-date fair value of the awards as disclosed in the applicable proxy filing. “Value ~~at vesting” reflects~~(3/15/2021)” shows the ~~intrinsic~~realizable value, for award tranches that have vested as of 12/31/2018 using the close price for the estimated day of vesting; for award tranches that are unvested as of 12/31/2018, the closing stock price as of 04/01/2019 is used. “Value (4/1/2019)”which reflects the intrinsic value of ~~the entire award~~awards granted in each year using the closing stock price as of ~~04/01/2019.~~3/15/2021. Note in 2018 and 2019, the realizable value is significantly below the SCT value due to the decrease in stock price. However, in 2020, realizable pay has surpassed the SCT value due to stock price appreciation in the most recent year.

This analysis reinforces the NCSO Committee’s view that pay and performance ~~remain~~have been suitably aligned despite the historic absence of a long-term plan with formal performance requirements beyond share price ~~appreciation which is an implicit requirement under the stock option plan. The Committee will continue to keep this position and the alignment of pay and performance under review.~~appreciation.

Elements of Compensation

Base Salary. Base salaries for our executives are established based on the scope of their responsibilities and individual experience, taking into account competitive market compensation paid by companies in our industry. Base salaries are reviewed annually, and may be adjusted to take account of changes in responsibilities, individual performance, experience, practices in our compensation comparator group, and the state of our industry more broadly.

For our NEOs, salaries that were paid in ~~2018~~2020 were approved on ~~12/14/2017.~~December 17, 2019. Mr. Wahl's base salary as President and Chief Executive Officer was unchanged from ~~2017~~2019 and he has not received an increase for the last ~~three~~five years. Messrs. Shea and McBryan salaries were also unchanged from 2019. Mr. ~~Shea's~~Kush's salary increased to $600,000 reflecting his promotion to Chief Operating Officer in 2020. Mr. Bundick's increase in base salary ~~as Chief Financial Officer~~ was ~~increased from 2017~~ to better align ~~his~~ compensation with that of other ~~Chief Financial Officers~~executive officers within the Company's peer group. Mr. Shea's base salary previously had been unchanged since 2015. Mr. McBryan's compensation structure, including base salary, as Chief Revenue Officer was adjusted from 2017 to transition his compensation from a majority bonus structure to a base salary and a target performance-based compensation structure that was more aligned with the Company's other executive officers.

Messrs. Hurlock and Kush both received increases in their base salaries to reflect internal promotions to Chief Operating Officer and Chief Administrative Officer during 2017, respectively. Previously Mr. Hurlock was a Senior Vice President of Operations, and Mr. Kush was a Senior Vice President of Human Resources & Risk Management for the Company.

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Performance-Based Compensation. We structure our annual incentive program to reward ~~certain~~ executive officers based on the Company’s performance and our evaluation of the individual executive’s contribution to that performance. This allows executive officers to receive a significant portion of their compensation based on the results that they helped us to achieve.

Performance-based compensation for our executive officers is defined as a percentage of the Company’s ~~operating income.~~income before income taxes. This approach reflects the importance of ~~operating~~ income before income taxes in assessing our overall performance, providing line of sight to both top-line growth and the appropriate management of costs. This performance-based compensation structure aligns with our strategic focus and Company Vision - To Be THE Choice For Our Customers - resulting in retention of and growth in relationships through good customer service, expansion of our services, effective execution in all that we do, and cost management.

For NEOs other than the President and Chief Executive Officer, percentages can be modified up or down based on other aspects of quantifiable financial and operational performance for which the executive officers are ~~accountable for.~~accountable. Examples of the performance taken into account include ~~facility~~ growth in the number of facilities serviced, profitability, client retention and satisfaction, and overall management of their functional area. No ~~judgment~~discretion is applied in determining the total value of performance-based compensation for the President and Chief Executive Officer given his direct accountability to shareholders for our overall financial performance.

In 2018 the long-term and post-acute care industry encountered difficult market conditions and unanticipated developments that adversely affected overall industry fundamentals. The provider community struggled to adapt to a rapidly changing environment fueled by declining census, tightening labor markets, Medicare Advantage pressures, and state-level Medicaid rates that frequently did not cover the cost of care. These industry dynamics directly impacted certain of our customer's capacity to pay the entirety of amounts owed to us and as a result, unfavorably impacted our 2018 financial results, in particular operating income which decreased 25% to $99.9 million, primarily due to the increase in our allowance for doubtful accounts. Notwithstanding the industry challenges, from an overall operational and financial stewardship point of view, the Board and NCSO believed that in 2018, management performed well in a challenging environment involving high levels of industry stress and difficult market conditions. The leadership team showed proactivity in managing the situation, and innovation in identifying solutions to set the Company up for future success.

~~Key 2018 accomplishments included the following:~~

•~~Increased revenues 7.6%, adding over 400 new service agreements~~

•~~Achieved customer~~ ~~retention rate of greater than 90%~~

•~~Increased year-over-year housekeeping and dining operating segment income by 13.4% and 31.6%, respectively~~

•~~Continued transition of customer payment terms from monthly to semimonthly or weekly, resulting in over 40% of customers on increased payment frequency model~~

•~~Increased quality and quantity of management candidates in both segments and across majority of operating divisions~~

•~~Reduced workers compensation claim frequency, scope and severity, resulting in favorable loss development trends and decreased expense~~

•~~Designed and implemented Workday~~^® ~~Cloud ERP financial management module~~

•G~~enerated record operating cash flow of over $80 million, including over $52 million in the second half of 2018~~

•~~Paid out record cash dividends of over $57~~ ~~million~~

•~~Demonstrated exceptional financial discipline and efficiency with~~ ~~ROA of 12.1%, ROE of 18.9% and ROIC of 22.7%~~

For the President and Chief Executive Officer, performance-based compensation is subject to an overall maximum of ~~two-times~~two times base salary. The total performance-based compensation earned by Mr. Wahl for ~~2018~~2020 was ~~$749,325.~~$968,895, equating to 96% of base salary. Mr. Wahl elected to receive ~~two-thirds~~one-half of this compensation ($~~499,532)~~484,431) in the form of shares of Company ~~stock~~Common Stock in early ~~2019, further demonstrating the strong ownership culture that exists.~~2021. The balance of ~~$249,793~~Mr. Wahl's 2020 performance-based compensation ($484,464) was paid in cash.

Performance-based compensation outcomes for the other NEOs were validated against the operational performance achievements towards which they ~~contributed towards.~~contributed. The NCSO Committee agreed with the President and Chief Executive ~~Officer's~~Officer’s assessment that the outcome was an appropriate reflection of performance in the year, and so no upward or downward modification was applied. Accordingly the following payments were approved for our NEOs inwith respect ~~of 2018~~to 2020 performance:


Named Executive Officer	Named Executive Officer	2018 Cash Performance-Based Compensation		2018 Equity Performance-Based Compensation		2018 Performance Based Compensation (% of salary)	Named Executive Officer	2020 Cash Performance-Based Compensation		2020 Equity Performance-Based Compensation		2020 Performance Based Compensation (% of salary)
Theodore Wahl	Theodore Wahl	$	249,793	$	499,532	75%	Theodore Wahl	$	484,464	$	484,431	96%
John C. Shea	John C. Shea	$	99,911	$	—	19%	John C. Shea	$	161,483	$	—	29%
Michael E. McBryan	Michael E. McBryan	$	149,867	$	—	18%	Michael E. McBryan	$	193,779	$	—	23%
David Hurlock		$	199,822	$	—	46%
Andrew W. Kush	Andrew W. Kush	$	199,822	$	—	53%	Andrew W. Kush	$	258,372	$	—	43%
Jason J. Bundick							Jason J. Bundick	$	103,349	$	—	24%

Discretionary Long-Term Equity Incentive Awards. The NCSO Committee is responsible for approving the population of individuals who will be granted equity awards, the number of equity awards each individual will receive, the option price per share (if applicable), and the ~~vesting and~~ exercise period (if applicable) and vesting of each award. Guidelines for the number of equity awards granted to each executive officer are determined using a procedure approved by the NCSO Committee based upon several factors, including the executive officer’s salary level, individual contributions to the Company’s performance and the value of the equity award at the time of grant. We grant equity awards at the fair market value of the underlying stock on the date of grant.

Long-term equity incentive awards are currently granted as a combination of stock options and restricted stock units. ~~Given~~As noted previously, performance stock units will be introduced to the ~~Company does not provide guidance or set targets externally, the NCSO Committee determined that this approach remains appropriate.~~equity mix in 2021. The NCSO Committee believes that the use of stock options and restricted stock units ~~provides~~provide a clear incentive to the NEOs to deliver long-term sustainable and profitable growth which translates into value creation for our shareholders, in a responsible way. The vesting of awards is phased over a period of ~~five-years~~five years to reinforce this long-term focus.

In making its decision to grant these awards, the NCSO Committee considered the competitive challenges to our business and the resulting focus, efforts and expertise our executive officers have expended to meet these challenges and foster the growth and financial position of the Company. In determining ~~the~~ award values the NCSO ~~takes into account~~Committee considers a range of factors including not just competitive market data, but also the performance of the ~~company~~Company more generally and the contributions of individuals to our performance accomplishments in the prior year.

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The following awards were approved and granted during ~~2018~~2020 to our NEOs:


Named Executive Officer	Named Executive Officer	Stock Options (#)	Stock Option Grant Date Fair Value		Restricted Stock Units (#)	Restricted Stock Units Grant Date Fair Value		Total Grant Date Fair Value¹		Named Executive Officer	Stock Options (#)	Stock Option Grant Date Fair Value		Restricted Stock Units (#)	Restricted Stock Units Grant Date Fair Value		Total Grant Date Fair Value1
Theodore Wahl	Theodore Wahl	50,000	$	524,000	30,000	$	1,561,800	$	2,085,800	Theodore Wahl	50,000	$	230,910	77,736	$	1,899,090	$	2,130,000
John C. Shea	John C. Shea	10,000	$	104,800	6,000	$	312,360	$	417,160	John C. Shea	17,721	$	81,839	14,088	$	344,170	$	426,009
Michael E. McBryan	Michael E. McBryan	10,000	$	104,800	6,000	$	312,360	$	417,160	Michael E. McBryan	17,721	$	81,839	14,088	$	344,170	$	426,009
David Hurlock		10,000	$	104,800	6,000	$	312,360	$	417,160
Andrew W. Kush	Andrew W. Kush	10,000	$	104,800	6,000	$	312,360	$	417,160	Andrew W. Kush	17,721	$	81,839	14,088	$	344,170	$	426,009
Jason J. Bundick										Jason J. Bundick	17,721	$	81,839	14,088	$	344,170	$	426,009

1.All awards granted vest and are exercisable ratably over a five-year period on each yearly anniversary of the grant date of the award.

In January 2020, 2019 ~~2018~~ and ~~2017,~~2018, the NCSO Committee granted options to purchase an aggregate of approximately ~~130,000, 125,000~~166,000, 140,000 and ~~95,000~~135,000 shares of Common Stock, respectively, to our ~~current~~ NEOs and directors. In January 2020, 2019 ~~2018~~ and ~~2017,~~2018, the NCSO Committee granted restricted stock units of an aggregate of approximately ~~76,500, 54,000,~~134,100, 85,000, and ~~59,000~~60,000 shares, respectively, to our NEOs. See the table entitled Grant of Plan-Based Awards included in this Proxy Statement for more information on the ~~2018~~2020 grants. The NCSO Committee has also granted awards to all other levels of Company management and key employees providing collective alignment.

Deferred Compensation Plan. We have a Supplemental Executive Retirement Plan (the “SERP”) for certain executives and key employees. The SERP is not qualified under Section 401 of the Internal Revenue Code of 1986, as amended. The SERP

allows participants to defer up to 25% of their earned income on a pre-tax basis. As of the last day of each plan year, each participant will receive a 25% match of up to 15% of their deferral in the form of our Common Stock based on the then current market value. SERP participants fully vest in our matching contribution three years from the first day of the initial year of participation. The income deferred and our matching contributions are unsecured and subject to the claims of our general creditors.

Under the SERP, we are authorized to issue up to 1,013,000 shares of our Common Stock to our employees. Pursuant to such authorization, approximately ~~385,000~~346,000 shares are available for future grant at December 31, ~~2018.~~2020. As of December 31, ~~2018~~2020, and since the initiation of the SERP, the Company’s 25% match has resulted in approximately ~~627,000~~667,000 shares being issued to the trustee. At the time of issuance, such shares are accounted for at cost, as treasury stock. At December 31, ~~2018,~~2020, approximately ~~277,000~~298,000 of such shares are vested and remain in the respective active participants’ accounts.

Employee Stock Purchase Plan. We have an Employee Stock Purchase Plan (“ESPP”) for all eligible employees. All full-time and certain part-time employees who have completed two years of continuous service with us are eligible to participate. In August 2016, the Board of Directors extended the ESPP for an additional five offerings through 2021. Annual offerings commence and terminate on the respective year’s first and last calendar day. Under the ESPP, we are authorized to issue up to 4,050,000 shares of our Common Stock to our employees. Pursuant to such authorization, we have ~~2,202,000~~2,054,000 shares available for future grant at December 31, ~~2018.~~2020. Furthermore, under the terms of the ESPP, eligible employees may contribute through payroll deductions up to $21,250 (85% of IRS limitation) of their compensation toward the purchase of the Company’s Common Stock. No employee may purchase Common Stock which exceeds $25,000 in fair market value (determined on the date of grant) for each calendar year. The price per share is equal to the lower of 85% of the fair market price on the first day of the offering period or 85% of the fair market price on the day of purchase.

Other Elements of Compensation and Perquisites.

Medical Insurance. We provide to each NEO and their respective spouses and children such health, dental and optical insurance as we may from time to time make available to our management employees. This insurance requires an employee co-payment of the insurance premium.

Life and Disability Insurance. We provide to each NEO such disability and/or life insurance as we in our sole discretion may from time to time make available to our other management employees.

Automobile Allowance. We provide some NEOs with an automobile allowance during the term of their employment with us as we in our sole discretion may from time to time make available to our other management employees.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 17

Sporting Event Tickets. We obtain season tickets for several Philadelphia sports teams. Although these tickets are intended to be used for entertaining clients, unused tickets are made available to employees, including the NEOs, for personal use.

Compensation Risks

We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company. In addition, the NCSO Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks.

The Company has structured its compensation program so that certain employees are incentivized primarily on their ability to achieve revenue and profit objectives of the customer accounts under their supervision and generate new business. Additionally, incentive compensation is earned on the achievement of certain non-financial objectives at levels across the Company, such as recruiting and developing future management personnel, reviewing subordinate employees, maintaining good client relations and compliance with Company operational reporting requirements. The Company believes that elements of this incentive policy may be subject to abuse. Specifically, the Company recognizes that incentivizing employees for new business generation could result in employees entering into agreements without conducting proper due diligence or an appropriate analysis of the creditworthiness of the prospective client. Similarly, employees may be tempted to hire employees prior to their quarterly review in order to meet their recruitment goals. The Company recognizes that managers may be tempted to give better performance reviews of their subordinates in order to boost the appearance of their own performance. Also, the Company recognizes that in preparing budgets upon which an employee will be reviewed, an employee may seek to be too conservative in his or her estimates in order to more easily achieve performance targets. The Company has carefully designed its compensation policies and practices to diminish the potential abuses inherent in such programs to avoid unnecessary risks to the Company and its shareholders.

One of the ways in which the NCSO Committee believes the chance of inappropriate risk-taking is indirectly mitigated is the high levels of stock ownership among our senior leaders. In response to feedback, the NCSO Committee has adopted a formal stock ownership program, detailed below.

Stock Ownership Guidelines

~~As of January 1, 2018, the NCSO Committee adopted stock ownership guidelines for the Company’s executive officers. The guidelines provide that for the Company’s executive~~Executive officers ~~in place as of January 1, 2018, the executive officers should~~are expected to hold an amount of Company ~~stock~~Common Stock with a value that is at least equal to a specified multiple of their base salary within five years of the adoption of the ~~guidelines. Future~~guidelines (January 1, 2018). Newly appointed executive officers must attain the guideline ownership within five years of the date that ~~the~~they become executive ~~officer becomes an executive officer.~~officers. In accordance with this policy, the President and Chief Executive Officer is required to hold stock with a value of at least six times his base salary, while the Company’s other executive officers are required to hold stock with a value of at least two times their base salary.

Stock ownership includes shares owned outright, unvested restricted stock and restricted stock units, and stock equivalents held under deferred compensation arrangements. Additionally, one-half of the guidelines may be met by vested, in-the-money stock options held by the executive. If an executive does not meet their ownership requirement on the applicable measurement date, the executive must retain all net shares from the exercise of stock options and the vesting of restricted stock and restricted stock units until compliance is achieved. ~~As of December 31, 2018, all~~The following table indicates our active NEOs ~~had stock holdings that were in~~and their compliance status with the stock ownership ~~guidelines.~~guidelines as of December 31, 2020.


Named Executive Officer	Named Executive Officer	Ownership Requirement (% of salary)	Current Ownership (% of salary)	Current Ownership (% of requirement)	Named Executive Officer	Ownership Requirement (% of salary)	Current Ownership (% of salary)
Theodore Wahl	Theodore Wahl	600%	1,431%	239%	Theodore Wahl	600%	1,472%
John C. Shea	John C. Shea	200%	253%	127%	John C. Shea	200%	284%
Michael E. McBryan	Michael E. McBryan	200%	493%	246%	Michael E. McBryan	200%	379%
David Hurlock		200%	287%	144%
Andrew W. Kush	Andrew W. Kush	200%	355%	178%	Andrew W. Kush	200%	231%
Jason J. Bundick					Jason J. Bundick	200%	284%

Change of Control

~~In April 2018, the Board, through the adoption of the second Amended and Restated 2012 Equity~~The Company's 2020 Omnibus Incentive Plan ~~amended the terms of the 2012 Equity Incentive Plan to include~~includes a ~~“double trigger”~~“double-trigger” approach to vesting of stock awards upon a change in control, ~~rather than providing vesting solely upon such change in control (a “single trigger” approach). Under a double trigger approach,~~meaning vesting would occur if a change in control occurs and the outstanding equity awards are not fully assumed, or where the outstanding equity awards are fully assumed by the resulting entity and the participant is subsequently terminated or resigns for good reason. Such provisions were also included in the Company’s 2020 Omnibus Incentive Plan. We believe a ~~double trigger~~double-trigger approach provides adequate employment protections and reduces, for the ~~stockholders’~~shareholders’ benefit, potential transaction costs associated with the awards.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 18

Clawback Policy

InSince April 2019, the ~~Board of Directors approved and implemented a clawback policy that provides the~~ NCSO Committee ~~with~~has the discretion to clawback performance-based and equity compensation in the event of restatement of Company financial statements. The NCSO Committee will review all performance-based and equity compensation awarded to or earned by orour officers subject to Section 16(b) toof the ~~Securities~~ Exchange Act ~~1934~~ during the three-year period prior to any to restatement of the Company’s financial results. If the NCSO Committee determines such officer engaged in intentional or unlawful misconduct which materially contributed to the need for such restatement, the NCSO Committee may determine that a clawback is appropriate.

Stock Trading Black-Out Period and Anti-Hedging Policy

Under the Company’s insider trading policy, officers, non-employee directors and key personnel may purchase or sell our securities only during “non black-out periods”, which begin on the second business day following the date of each quarterly earnings announcement and ends at the close of trading on the Monday of the third week in the third month of the fiscal quarter. Additionally, the Company has adopted a policy which prohibits our officers, non-employee directors, and key personnel from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our Common Stock.

23Healthcare Services Group, Inc. | 2021 Proxy Statement | 19

Summary Compensation Table

The following table sets forth certain information regarding compensation paid or accrued during the Company’s prior three fiscal years, as applicable, for the Company’s ~~NEOs serving at the end of 2018.~~NEOs.


				Salary		Stock Awards¹		Option Awards¹		Non-Equity Incentive Plan Compensation²		Nonqualified Deferred Compensation Earnings		All Other Compensation³		Total										Salary						Stock Awards1						Option Awards1						Non-Equity Incentive Plan Compensation2						Nonqualified Deferred Compensation Earnings						All Other Compensation3						Total
Name and Principal Position	Name and Principal Position	Year		($)		($)		($)		($)		($)		($)		($)	Name and Principal Position			Year						($)						($)						($)						($)						($)						($)						($)
Theodore Wahl	Theodore Wahl	2018		1,005,108		2,073,709		524,000		249,793		37,692		10,796		3,901,098	Theodore Wahl			2020						1,005,108						2,385,792						233,000						484,464						65,810						8,100						4,182,274
President & Chief Executive Officer & Director	President & Chief Executive Officer & Director	2017		1,005,108		1,799,983		255,600		333,084		37,692		10,095		3,441,562	President & Chief Executive Officer & Director			2019						1,005,108						2,150,050						409,000						212,740						37,729						12,257						3,826,884
			2016		1,005,108		512,100		111,900		—		37,692		10,900			1,677,700	President & Chief Executive Officer & Director				2018						1,005,108						2,073,709						524,000						249,793						37,692						10,796						3,901,098
President & Chief Executive Officer & Director
	John C. Shea	2018		523,558		312,360		104,800		99,911		22,798		12,340		1,075,767	John C. Shea			2020						564,375						344,170						82,580						161,483						25,171						11,274						1,189,053
																	Executive Vice President & Chief Financial Officer			2019						564,375						344,165						81,800						106,370						22,822						13,924						1,133,456
Executive Vice President & Chief Financial Officer	Executive Vice President & Chief Financial Officer	2017		450,000		380,017		14,058		66,483		18,718		5,822		935,098				2018						523,558						312,360						104,800						99,911						22,798						12,340						1,075,767
			2016		450,000		73,401		12,309		—		16,875		5,832			558,417		Executive Vice President & Chief Financial Officer
Michael E. McBryan	Michael E. McBryan	2018		811,413		320,443		104,800		149,867		36,975		20,312		1,443,810	Michael E. McBryan		2020						850,000						346,440						82,580						193,779						37,064						21,474						1,531,337
Executive Vice President & Chief Revenue Officer & Director	Executive Vice President & Chief Revenue Officer & Director	2017		102,492		123,063		127,800		888,000		37,143		12,150		1,290,648	Executive Vice President & Chief Revenue Officer & Director		2019						850,000						347,916						81,800						127,644						37,006						21,054						1,465,420
			2016		102,492		106,688		111,900		888,000		37,143		12,100			1,258,323	Executive Vice President & Chief Revenue Officer & Director					2018						811,413						320,443						104,800						149,867						36,975						20,312						1,443,810
David Hurlock⁴		2018		434,135		316,149		104,800		199,822		22,585		9,900		1,087,391
Executive Vice President & Chief Revenue Officer & Director																	Executive Vice President & Chief Revenue Officer & Director
																					2020						600,000						344,170						82,580						258,372						22,010						11,274						1,318,406
	Executive Vice President & Chief Operating Officer	2017		286,058		380,011		63,900		189,644		17,302		12,700		949,615				2019						403,125						344,165						81,800						170,192						21,014						11,461						1,031,757
Executive Vice President & Chief Operating Officer																				Executive Vice President & Chief Operating Officer					2018						374,038						312,360						104,800						199,822						21,007						10,112						1,022,139
	Andrew W. Kush⁵	2018		374,038		312,360		104,800		199,822		21,007		10,112		1,022,139
Executive Vice President & Chief Administrative Officer		2017		324,518		334,730		51,120		199,448		12,562		—		922,378

Executive Vice President & Chief Operating Officer																	Executive Vice President & Chief Operating Officer
																						2020						433,063						344,170						82,580						103,349						6,348						7,725						977,235
																						2019						387,500						344,165						81,800						85,096						5,866						11,462						915,889
Executive Vice President & Chief Compliance Officer & General Counsel & Secretary																	Executive Vice President & Chief Compliance Officer & General Counsel & Secretary			2018						367,500						312,360						104,800						99,911						5,866						9,001						899,438

^1.The total amounts in these columns do not reflect compensation actually received by the NEO, nor do they reflect the actual value that will be recognized by the NEO. Instead, the amounts reflect the aggregate grant date fair value of restricted stock and restricted stock unit awards, incentive awards received in stock, ESPP awards and stock option awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. A more detailed discussion of the assumptions used in calculating these values may be found in Note 10 of the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2020. Refer also to the Compensation Discussion and Analysis for further information.

^2.Amounts shown in this column represent annual performance-based cash payments under the annual incentive program, as described in the Compensation Discussion and Analysis. No future pay-outs will be made with respect to any of the plan-based awards under the plan.

^3.Includes automobile allowance and contributions paid by the Company towards employee’s health insurance ~~premiums~~premiums.

4.Mr. Kush was appointed Executive Vice President and ~~personal use of tickets for sporting events.~~

^4.~~Mr. Hurlock became an executive officer in 2017.~~Chief Operating Officer on February 11, 2020. Prior thereto, he was ~~a Senior~~Executive Vice President ~~of Operations.~~

^5.~~Mr.~~ ~~Kush became an executive officer in~~and Chief Administrative Officer, a position he has held since 2017. ~~Prior thereto, he was the Senior Vice President of Human Resources & Risk Management.~~

24Healthcare Services Group, Inc. | 2021 Proxy Statement | 20

Grant of Plan-Based Awards

The following table sets forth information concerning grants of plan-based awards made by us during the year ended December 31, ~~2018,~~2020, to each of the NEOs.


		Grant Date	Date Award Approved	Estimated Future Payouts Under Equity Incentive Plan Awards¹	All Other Stock Awards: Number of Shares of Stock or Units	All Other Option Awards: Number of Securities Underlying Options	Exercise or Base Price of Options Awards		Grant Date Fair Value of Stock and Option Awards				Grant Date	Date Award Approved		Estimated Future Payouts Under Equity Incentive Plan Awards1		All Other Stock Awards: Number of Shares of Stock or Units		All Other Option Awards: Number of Securities Underlying Options		Exercise or Base Price of Options Awards				Grant Date Fair Value of Stock and Option Awards
Name	Name				Target (#)	(#)	(#)		($/sh)			($)			Date Award Approved		Target (#)		(#)		(#)			($/sh)				($)
Theodore Wahl	Theodore Wahl	1/4/2018	12/12/2017	—	30,000	50,000	$	52.06	$	2,085,800	Theodore Wahl		1/3/2020			12/17/2019			77,736		50,000			$	24.43			$	2,130,000
		12/31/2018	12/12/2017	16,088	—	—	$	31.05	$	499,532			12/31/2020	12/17/2019		16,950		—		—		$	28.58			$	484,431
John C. Shea	John C. Shea	1/4/2018	12/12/2017	—	6,000	10,000	$	52.06	$	417,160	John C. Shea		1/3/2020	12/17/2019		—		14,088		17,721		$	24.43			$	426,009
Michael E. McBryan	Michael E. McBryan	1/4/2018	12/12/2017	—	6,000	10,000	$	52.06	$	417,160	Michael E. McBryan		1/3/2020	12/17/2019		—		14,088		17,721		$	24.43			$	426,009
David Hurlock		1/4/2018	12/12/2017	—	6,000	10,000	$	52.06	$	417,160
Andrew W. Kush	Andrew W. Kush	1/4/2018	12/12/2017	—	6,000	10,000	$	52.06	$	417,160	Andrew W. Kush		1/3/2020	12/17/2019		—		14,088		17,721		$	24.43			$	426,009
Jason J. Bundick											Jason J. Bundick		1/3/2020	12/17/2019		—		14,088		17,721		$	24.43			$	426,009

^1.Re~~presents~~Represents the shares received during ~~2019~~2021 as a result of Mr. Wahl's election to receive a portion of his ~~2018 performance based~~2020 performance-based compensation in Company ~~stock.~~Common Stock. The grant date of such shares is reflected as the date in which the total amount of such ~~performance based~~performance-based compensation is earned by Mr. Wahl.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

The Company has ~~not entered into~~no employment ~~contracts~~agreements with any of the NEOs. No previously granted options or other equity-based awards were re-priced or otherwise materially modified during the fiscal year ended December 31, ~~2018.~~2020. As set forth above in the “Compensation Discussion and Analysis,” the Company believes that part of the compensation for the NEOs should be in the form of long-term equity grants so as to align the interests of the NEOs with the Company’s shareholders. In accordance with these objectives, Mr. Wahl received stock options to purchase 50,000 shares of Common Stock and restricted stock units of ~~30,000.~~77,736. Messrs. Shea, McBryan, ~~Hurlock,~~Kush, and ~~Kush~~Bundick each received stock options to purchase ~~10,000~~17,721 shares of Common Stock and 14,088 restricted stock ~~units of 6,000.~~units. These stock options and restricted stock units vest over five years, as an incentive to the NEOs to increase the long-term value of the Company and thereby increase the value of its Common Stock.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 21

Outstanding Equity Awards at December 31, ~~2018~~ 2020

The following table summarizes the outstanding equity awards of each of the NEOs as of December 31, ~~2018:~~2020:


			Option Awards										Stock Awards						Option Awards			Stock Awards
Name	Name	Grant Date¹	Vested, Exercisable	Unvested	Option Exercise Price		Option Expiration Date	Unvested²	Market Value of Unvested³		Name	Grant Date1		Vested, Exercisable	Unvested	Option Exercise Price		Option Expiration Date	Unvested2	Market Value of Unvested3
Theodore Wahl	Theodore Wahl	1/4/2010	11,250	—	$	14.3067	1/4/2020	—	$	—	Theodore Wahl	1/5/2012		15,000	—	$	17.50	1/5/2022	—	$	—
		1/6/2011	15,000	—	$	16.1100	1/6/2021	—	$	—		1/4/2013		15,000	—	$	23.50	1/4/2023	—	$	—
		1/5/2012	15,000	—	$	17.5000	1/5/2022	—	$	—		1/3/2014		15,000	—	$	28.02	1/3/2024	—	$	—
		1/4/2013	15,000	—	$	23.5000	1/4/2023	—	$	—		1/5/2015		15,000	—	$	30.30	1/5/2025	—	$	—
		1/3/2014	12,000	3,000	$	28.0200	1/3/2024	750	$	30,135		1/4/2016		15,000	3,000	$	34.14	1/4/2026	3,000	$	84,300
		1/5/2015	9,000	6,000	$	30.3000	1/5/2025	3,000	$	120,540		1/4/2017		18,000	12,000	$	39.38	1/4/2027	12,000	$	337,200
		1/4/2016	6,000	9,000	$	34.1400	1/4/2026	9,000	$	361,620		1/4/2018		20,000	30,000	$	52.06	1/4/2028	18,000	$	505,800
		1/4/2017	6,000	24,000	$	39.3800	1/4/2027	24,000	$	964,320		1/4/2019		10,000	40,000	$	40.49	1/4/2029	34,000	$	955,400
		1/4/2018	—	50,000	$	52.0600	1/4/2028	30,000	$	1,205,400		1/3/2020		—	50,000	$	24.43	1/3/2030	77,736	$	2,184,382

John C. Shea	John C. Shea	1/5/2012	5,000	—	$	17.5000	1/5/2022	—	$	—	John C. Shea	1/5/2012		5,000	—	$	17.50	1/5/2022	—	$	—
		1/4/2013	5,000	—	$	23.5000	1/4/2023	—	$	—		1/4/2013		5,000	—	$	23.50	1/4/2023	—	$	—
		1/3/2014	5,000	1,250	$	28.0200	1/3/2024	125	$	5,023		1/3/2014		6,250	—	$	28.02	1/3/2024	—	$	—
		1/5/2015	990	660	$	30.3000	1/5/2025	660	$	26,519		1/5/2015		1,650	—	$	30.30	1/5/2025	—	$	—
		1/4/2016	660	990	$	34.1400	1/4/2026	1,290	$	51,832		1/4/2016		1,320	330	$	34.14	1/4/2026	430	$	12,083
		1/4/2017	330	1,320	$	39.3800	1/4/2027	7,720	$	310,190		1/4/2017		990	660	$	39.38	1/4/2027	3,860	$	108,466
		1/4/2018	—	10,000	$	52.0600	1/4/2028	6,000	$	241,080		1/4/2018		4,000	6,000	$	52.06	1/4/2028	3,600	$	101,160
												1/4/2019		2,000	8,000	$	40.49	1/4/2029	6,800	$	191,080
												1/3/2020		—	17,721	$	24.43	1/3/2030	14,088	$	395,873

Michael E. McBryan	Michael E. McBryan	1/6/2011	15,000	—	$	16.1100	1/6/2021	—	$	—	Michael E. McBryan	1/5/2012		15,000	—	$	17.50	1/5/2022	—	$	—
		1/5/2012	15,000	—	$	17.5000	1/5/2022	—	$	—		1/4/2013		15,000	—	$	23.50	1/4/2023	—	$	—
		1/4/2013	15,000	—	$	23.5000	1/4/2023	—	$	—		1/3/2014		15,000	—	$	28.02	1/3/2024	—	$	—
		1/3/2014	12,000	3,000	$	28.0200	1/3/2024	375	$	15,068
		1/5/2015	9,000	6,000	$	30.3000	1/5/2025	1,000	$	40,180
		1/4/2016	6,000	9,000	$	34.1400	1/4/2026	1,875	$	75,338
		1/4/2017	3,000	12,000	$	39.3800	1/4/2027	2,500	$	100,450
		1/4/2018	—	10,000	$	52.0600	1/4/2028	6,000	$	241,080

David Hurlock		1/4/2013	5,000	—	$	23.5000	1/4/2023	—	$	—
		1/3/2014	5,000	1,250	$	28.0200	1/3/2024	125	$	5,023		1/5/2015		15,000	—	$	30.30	1/5/2025	—	$	—
		1/5/2015	4,500	3,000	$	30.3000	1/5/2025	450	$	18,081		1/4/2016		12,000	3,000	$	34.14	1/4/2026	625	$	17,563
		1/4/2016	3,000	4,500	$	34.1400	1/4/2026	900	$	36,162		1/4/2017		9,000	6,000	$	39.38	1/4/2027	1,250	$	35,125
		1/4/2017	1,500	6,000	$	39.3800	1/4/2027	1,200	$	48,216		1/4/2018		4,000	6,000	$	52.06	1/4/2028	3,600	$	101,160
		9/7/2017	—	—	$	50.1000	—	5,124	$	205,882		1/4/2019		2,000	8,000	$	40.49	1/4/2029	6,800	$	191,080
		1/4/2018	—	10,000	$	52.0600	1/4/2028	6,000	$	241,080		1/3/2020		—	17,721	$	24.43	1/3/2030	14,088	$	395,873

Andrew W. Kush	Andrew W. Kush	1/6/2011	2,000	—	$	16.1100	1/6/2021	—	$	—	Andrew W. Kush	1/5/2012		5,000	—	$	17.50	1/5/2022	—	$	—
		1/5/2012	5,000	—	$	17.5000	1/5/2022	—	$	—		1/4/2013		5,000	—	$	23.50	1/4/2023	—	$	—
		1/4/2013	5,000	—	$	23.5000	1/4/2023	—	$	—		1/3/2014		5,000	—	$	28.02	1/3/2024	—	$	—
		1/3/2014	4,000	1,000	$	28.0200	1/3/2024	70	$	2,813		1/5/2015		5,000	—	$	30.30	1/5/2025	—	$	—
		1/5/2015	3,000	2,000	$	30.3000	1/5/2025	250	$	10,045		1/4/2016		4,800	1,200	$	34.14	1/4/2026	200	$	5,620
		1/4/2016	2,400	3,600	$	34.1400	1/4/2026	600	$	24,108		1/4/2017		3,600	2,400	$	39.38	1/4/2027	3,400	$	95,540
		1/4/2017	1,200	4,800	$	39.3800	1/4/2027	6,800	$	273,224		1/4/2018		4,000	6,000	$	52.06	1/4/2028	3,600	$	101,160
		1/4/2018	—	10,000	$	52.0600	1/4/2028	6,000	$	241,080		1/4/2019		2,000	8,000	$	40.49	1/4/2029	6,800	$	191,080
												1/3/2020		—	17,721	$	24.43	1/3/2030	14,088	$	395,873

Jason J. Bundick											Jason J. Bundick	1/4/2013		700	—	$	23.50	1/4/2023	—	$	—
												1/3/2014		3,000	—	$	28.02	1/3/2024	—	$	—
												1/5/2015		5,000	—	$	30.30	1/5/2025	—	$	—
												1/4/2016		4,800	1,200	$	34.14	1/4/2026	200	$	5,620
												1/4/2017		3,600	2,400	$	39.38	1/4/2027	3,400	$	95,540
												1/4/2018		4,000	6,000	$	52.06	1/4/2028	3,600	$	101,160
												1/4/2019		2,000	8,000	$	40.49	1/4/2029	6,800	$	191,080
												1/3/2020		—	17,721	$	24.43	1/3/2030	14,088	$	395,873

^{Healthcare Services Group, Inc. | 2021 Proxy Statement | 22}

1.Options and stock awards vest 20% per year on the anniversary of the grant date for each of the five years subsequent to the grant date.

^2.Unless otherwise noted herein, restricted stock awards and restricted stock units vest at the rate of 20% annually, commencing on the first anniversary from the grant date, subject to accelerated vesting upon certain terminations of employment following certain corporate transactions involving the Company. The shares of ~~common stock~~Common Stock underlying the restricted stock awards and restricted stock units will be issued upon vesting.

^3.Valued based on the closing price of a share of the Company’s ~~common stock~~Common Stock on December 31, ~~2018~~2020 as reported on the NASDAQ Global Select Market ($~~40.18)~~28.10).

Option Exercises and Stock Vested During ~~2018~~ 2020

The following table sets forth information concerning the option exercises and stock awards vested of each of the NEOs during the year ended December 31, ~~2018:~~2020:


		Stock Option Awards			Restricted Stock and Restricted Stock Units					Stock Option Awards			Restricted Stock and Restricted Stock Units
		Number of Shares Acquired On Exercise	Value Realized on Exercise	Number of Shares Acquired On Vesting	Value Realized on Vesting		Number of Shares Acquired On Exercise	Value Realized on Exercise		Number of Shares Acquired On Vesting	Value Realized on Vesting
Name	Name	(#)	($)	(#)	($)	Name	(#)	($)		(#)	($)
Theodore Wahl	Theodore Wahl	7,500	282,400	11,450	597,992	Theodore Wahl	15,000	$	105,300	25,000	$	610,750
John C. Shea	John C. Shea	—	—	2,885	150,619	John C. Shea	—	$	—	5,590	$	136,564
Michael E. McBryan	Michael E. McBryan	—	—	2,325	121,655	Michael E. McBryan	15,000	$	112,300	4,650	$	113,600
David Hurlock		—	—	2,302	106,549
Andrew W. Kush	Andrew W. Kush	—	—	2,095	109,223	Andrew W. Kush	2,000	$	14,860	4,925	$	120,318
Jason J. Bundick						Jason J. Bundick	—	$	—	4,925	$	120,318

~~Nonqualified~~Non-Qualified Deferred Compensation

The following table sets forth information concerning the non-qualified deferred compensation of each of the NEOs during the year ended December 31, ~~2018,~~2020, as well as the aggregate balance of non-qualified deferred compensation as of December 31, ~~2018.~~2020.


Name	Name	Executive Contributions in Last FY		Registrant Contributions in Last FY		Aggregate Loss in Last FY		Aggregate Balance at Last FYE		Name	Executive Contributions in Last FY		Registrant Contributions in Last FY		Aggregate Gains in Last FY		Aggregate Balance at Last FYE
Theodore Wahl	Theodore Wahl	$	150,766	$	37,692	$	(246,453)	$	2,081,443	Theodore Wahl	$	249,399	$	62,350	$	857,301	$	3,823,397
John C. Shea	John C. Shea	$	91,193	$	22,798	$	(88,098)	$	775,870	John C. Shea	$	108,821	$	27,205	$	189,014	$	1,352,204
Michael E. McBryan	Michael E. McBryan	$	246,501	$	36,975	$	(608,905)	$	5,236,204	Michael E. McBryan	$	257,574	$	38,636	$	1,436,467	$	7,655,961
David Hurlock		$	90,341	$	22,585	$	(129,229)	$	1,074,958
Andrew W. Kush	Andrew W. Kush	$	84,026	$	21,007	$	(57,515)	$	423,943	Andrew W. Kush	$	127,790	$	31,947	$	21,284	$	747,513
Jason J. Bundick										Jason J. Bundick	$	28,105	$	7,026	$	88,638	$	412,108

Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is providing the following information about the relationship of the annual total compensation of the Company’s employees and the annual total compensation of the President and Chief Executive Officer. The CEO pay ratio figures below are a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act.

At December 31, ~~2018,~~2020, we had over ~~53,000~~42,000 employees (full-time and part-time), all located in the United States. Our diverse employee population varies significantly in experience, education, specialized training and status (full-time, part-time or temporary). Regardless of the employee’s role in the organization or their location, the process for setting employee compensation is the same: local market competitive data is reviewed to set base pay rates. Individual compensation is then adjusted from these base pay rates to reflect the individual’s role and responsibilities, as well as his or her experience, education, specialized training and overall performance.

We determined the total annual compensation for our employees for the year ended December 31, ~~2018~~2020 using data from our payroll records for the month of December ~~2018,~~2020, which we then extrapolated for the full year of ~~2018.~~2020. The components of total annual compensation for our employees are the same as those used to determine the total compensation of our NEOs for the purposes of the ~~Summary Compensation table.~~SCT. We did not ~~annualize the compensation for employees in temporary positions or~~ make any full-time equivalent ~~adjustments.~~adjustments for part-time employees. The results were then ranked, excluding the President and Chief Executive Officer, from lowest to highest, and the median employee was identified. We then compared the total annual compensation of the median employee to that of the President and Chief Executive Officer. The total annual compensation of the median employee for the year ended December 31, ~~2018~~2020 was ~~$22,338.~~$26,000. For the year ended December 31, ~~2018,~~2020, the ratio of our President and Chief Executive Officer’s total annual compensation to that of our median employee was approximately ~~175:~~161:1.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 23

The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 24

PROPOSAL NO. 1

ELECTION OF DIRECTORS

At the Annual Meeting, nine directors of the Company are to be elected, each to hold office for a term of one year. All nominees currently serve as Directors. Unless authority is specifically withheld, management proxies will be voted FOR the election of the nominees named in Directors, Executive Officers and Corporate Governance above to serve as directors until the next annual meeting of shareholders and until their successors have been chosen and qualified. Should any nominee not be a candidate at the time of the Annual Meeting (a situation which is not now anticipated), proxies will be voted in favor of the remaining nominees and may also be voted for substitute nominees. If a quorum is present, the candidate or candidates receiving the highest number of votes will be elected. Brokers that do not receive shareholder instructions are not entitled to vote for the election of directors because an uncontested election is considered a “non-routine” matter. Hence, shareholders who hold their shares through brokerage accounts and who would like to vote in favor of the director nominees will need to instruct their brokerage firm to vote for the Company’s nominees.

The Board of Directors recommend a vote “FOR” all nominees.

Vote Required

The Company has implemented plurality voting in uncontested elections of directors. Accordingly, the Company's bylaws provide that in an uncontested election of directors the affirmative vote of (a) a plurality of the shares of Common Stock entitled to vote and present in person or by proxy at the Annual Meeting and (b) a majority of the shares required to constitute a quorum is required to elect a director.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 25

PROPOSAL NO. 2

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The accounting firm of Grant Thornton LLP was selected by the Audit Committee of the Board as the Independent Registered Public Accounting Firm of the Company for the fiscal year ending December 31, 2021. Said firm has no other relationship to the Company. The Board recommends the ratification of the selection of the firm of Grant Thornton LLP to serve as the Independent Registered Public Accounting Firm of the Company for the year ending December 31, 2021. A representative of Grant Thornton LLP, which has served as the Company’s Independent Registered Public Accounting Firm since December 1992, will be present at the forthcoming shareholders’ meeting with the opportunity to make a statement if so desired and such representative will be available to respond to appropriate questions. The approval of the proposal to ratify the appointment of Grant Thornton LLP requires the affirmative vote of a majority of the votes cast by all shareholders represented and entitled to vote thereon. An abstention, therefore, will not have the same legal effect as an “against” vote and will not be counted in determining whether the proposal has received the required shareholder vote. However, brokers that do not receive instructions on this proposal are entitled to vote for the selection of the independent registered public accounting firm.

The Board of Directors recommend a vote “FOR” the approval and ratification of the selection of Grant Thornton LLP as the independent registered public accounting firm of the Company for its current fiscal year ending December 31, 2021.

Vote Required

Approval of Proposal No. 2 requires the affirmative vote of (a) the holders of a majority of the votes cast at the Annual Meeting in person or by proxy and entitled to and (b) a majority of the shares required to constitute a quorum.

Fees Paid to Auditors

The following table sets forth the fees billed by the Company’s independent registered public accounting firm during fiscal years 2020 and 2019:


	2020		2019
Audit fees 1	$	1,164,000	$	1,047,000

Audit-related fees	—		—
Tax fees	—		—
All other fees	—		—
	$	1,164,000	$	1,047,000

1.Audit fees billed by Grant Thornton LLP related to the audits of the Company’s annual financial statements and internal control over financial reporting; the review of the Company’s financial statements included in the Quarterly Reports on Form 10-Q; review of documents filed with the SEC; and reimbursement for direct out-of-pocket expenses.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 26

PROPOSAL NO. 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board of Directors recognizes the significant interest of shareholders in executive compensation matters. Pursuant to amendments to Section 14A of the Exchange Act and the shareholder vote on the frequency of the advisory vote on executive compensation at our 2017 Annual Meeting of Shareholders, we are providing our shareholders with an annual opportunity to cast an advisory vote (commonly referred to as “say-on-pay”) to approve the compensation of our Named Executive Officers.

We are asking our shareholders to provide advisory approval of the compensation of our Named Executive Officers (which consist of our President and Chief Executive Officer, Chief Financial Officer and our other three highest paid executive officers in 2020), as such compensation is disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in this Proxy Statement. Our executive compensation programs are designed to enable us to attract, motivate and retain executive talent, who are critical to our success. Our compensation philosophy and framework have resulted in compensation for our Named Executive Officers that is tied to the Company’s financial results and the other performance factors described in the section of this Proxy Statement entitled Compensation Discussion and Analysis. These programs focus on rewarding the types of performance that increase shareholder value, link executive compensation to the Company’s long-term strategic objectives and align executive officers’ interests with those of our shareholders. The Company believes that its executive compensation programs, which emphasize long-term equity awards and variable compensation, satisfy these goals. A substantial portion of each executive’s total compensation is intended to be variable and delivered on a pay-for-performance basis.

The Board of Directors recommend a vote “FOR” the adoption of the following non-binding resolution:

RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth in this Proxy Statement.

This say-on-pay vote is advisory, and therefore not binding on the Company, the Nominating, Compensation and Stock Option Committee or our Board of Directors.

Vote Required

Approval of Proposal No. 3 requires the affirmative vote of (a) the holders of a majority of the votes cast at the Annual Meeting in person or by proxy and entitled to and (b) a majority of the shares required to constitute a quorum.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 27

Audit Committee Report

The members of the Audit Committee from January 1, 2020 to December 31, 2020 were Messrs. Briggs, Ottaviano and Moss and Ms. Grant. Mr. Moss served on the Audit Committee until his retirement on May 26, 2020 at which time Ms. Grant was elected by the shareholders at the Annual Meeting and appointed to the Audit Committee for the remainder of fiscal year 2020. The Audit Committee met seven times during the fiscal year ended December 31, 2020. The Audit Committee is responsible for the appointment of the Independent Registered Public Accounting Firm for each fiscal year, recommending the discharge of the Independent Registered Public Accounting Firm to the Board and confirming the independence of the Independent Registered Public Accounting Firm. It is also responsible for: reviewing and approving the scope of the planned audit, the results of the audit and the Independent Registered Public Accounting Firm’s compensation for performing such audit; reviewing the Company’s audited financial statements; and reviewing and approving the Company’s internal accounting controls and disclosure procedures, and discussing such controls and procedures with the Independent Registered Public Accounting Firm.

A copy of the Company's Amended and Restated Audit Committee Charter is available on the Company’s website at www.hcsg.com.

The Company’s Independent Registered Public Accounting Firm is responsible for auditing the financial statements, as well as auditing the Company’s internal controls over financial reporting. The activities of the Audit Committee are in no way designed to supersede or to alter those traditional responsibilities. The Audit Committee’s role does not provide any special assurances with regard to the Company’s financial statements, nor does it involve a professional evaluation of the quality of the audits performed by the Independent Registered Public Accounting Firm.

In connection with the audit of the Company’s financial statements for the year ended December 31, 2020, the Audit Committee met with representatives from Grant Thornton LLP, the Company’s Independent Registered Public Accounting Firm, and the Company’s internal auditors. The Audit Committee reviewed and discussed with Grant Thornton LLP and the Company’s internal auditors, the Company’s financial management and financial structure, as well as the matters relating to the audit required by the Public Company Accounting Oversight Board Auditing Standard.

The Audit Committee and Grant Thornton LLP also discussed Grant Thornton LLP’s independence. In December 2020, the Audit Committee received from Grant Thornton LLP the written disclosures and the letter regarding Grant Thornton LLP’s independence required by Public Company Accounting Oversight Board Rule 3526.

In addition, the Audit Committee reviewed and discussed with management the Company’s audited financial statements for the fiscal year ended December 31, 2020, as well as management’s assessment of internal controls over financial reporting.

AUDIT COMMITTEE

John M. Briggs, Chairman

Dino D. Ottaviano

Laura Grant

Healthcare Services Group, Inc. | 2021 Proxy Statement | 28

Nominating, Compensation and Stock Option Committee Report

•Consideration of the operating and financial performance of the Company, primarily its income before income taxes;

•Attainment of a level of compensation designed to retain a superior executive in a highly competitive environment; and

•Consideration of the individual’s overall contribution to the Company.

In consultation with the President and Chief Executive Officer of the Company, the Nominating, Compensation and Stock Option Committee develops guidelines and reviews the compensation and performance of the other executive officers of the Company, and sets the compensation of the executive officers of the Company and/or any management fees paid by the Company for executive services when needed. In addition, the Nominating, Compensation and Stock Option Committee makes recommendations to the Board with respect to incentive-compensation plans and equity-based plans, establishes criteria for the granting of options in accordance with such criteria and administers such plans. The Nominating, Compensation and Stock Option Committee reviews major organizational and staffing matters. With respect to director compensation, the Nominating, Compensation and Stock Option Committee designs a director compensation package of a reasonable total value based on comparisons with similar firms and aligned with long-term shareholder interests. Finally, the Nominating, Compensation and Stock Option Committee reviews director compensation levels and practices, and may recommend, from time to time, changes in such compensation levels and practices to the Board, with equity ownership in the Company encouraged. The Nominating, Compensation and Stock Option Committee’s charter provides that the Nominating, Compensation and Stock Option Committee shall have the authority to obtain advice and seek assistance from internal and external legal, accounting and other advisors.

NOMINATING, COMPENSATION AND STOCK OPTION COMMITTEE

Diane S. Casey, Chairwoman

John J. McFadden

Healthcare Services Group, Inc. | 2021 Proxy Statement | 29

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of ~~April 1, 2019,~~March 31, 2021, regarding the beneficial ownership of Common Stock by each person or group known by the Company to own: (i) 5% or more of the outstanding shares of Common Stock, (ii) each director and director ~~nominee of the Company,~~nominees, (iii) the Named Executive Officers as defined in Item 402(a)(3) of Regulation S-K and (iv) all current directors and executive officers of the Company as a group. The persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned by them, unless otherwise noted.


Name and Beneficial Owner or Group¹	Name and Beneficial Owner or Group¹	Amount and Nature of Beneficial Ownership				Percent of Class²			Name and Beneficial Owner or Group1		Amount and Nature of Beneficial Ownership				Percent of Class2
BlackRock, Inc.³	BlackRock, Inc.³	8,497,753	4	11.5	%		BlackRock, Inc.3	8,197,113		4		11.0	%
The Vanguard Group, Inc.³	The Vanguard Group, Inc.³	7,393,187	5	10.0	%		The Vanguard Group, Inc.3	7,003,918		5		9.4	%
Janus Henderson Group, plc.³		4,255,811	6	5.7	%
William Blair Investment Management, LLC.³		4,176,253	7	5.6	%
T. Rowe Price Associates, Inc.³		3,697,909	8	5.0	%
Riverbridge Partners, LLC3							Riverbridge Partners, LLC3	5,165,222		6		6.9	%
Mackenzie Financial Corporation3							Mackenzie Financial Corporation3	4,522,875		7		6.1	%
Theodore Wahl	Theodore Wahl	382,520	9	-		22	Theodore Wahl	542,427		8		-		22
Michael E. McBryan	Michael E. McBryan	144,854	10	-		22	Michael E. McBryan	170,757		9		-		22
John M. Briggs							John M. Briggs	50,175		10		-		22
Andrew W. Kush							Andrew W. Kush	61,932		11		-		22
Robert L. Frome	Robert L. Frome	58,011	11	-		22	Robert L. Frome	39,915		12		-		22
John M. Briggs		47,418	12	-		22
David Hurlock		41,813	13	-		22
Andrew W. Kush		36,092	14	-		22
John C. Shea	John C. Shea	33,838	15	-		22	John C. Shea	58,225		13		-		22
Robert J. Moss		13,005	16	-		22
Jason J. Bundick							Jason J. Bundick	47,510		14		-		22
Dino D. Ottaviano	Dino D. Ottaviano	21,501	17	-		22	Dino D. Ottaviano	26,093		15		-		22
John J. McFadden	John J. McFadden	20,006	18	-		22	John J. McFadden	25,007		16		-		22
Diane S. Casey	Diane S. Casey	10,002	19	-		22	Diane S. Casey	15,003		17		-		22
Jude Visconto	Jude Visconto	6,003	20	-		22	Jude Visconto	10,004		18		-		22
Daniela Castagnino	Daniela Castagnino	-		-		22	Daniela Castagnino	1,001		19		-		22
Directors and Executive Officers as a group (14 persons)		836,357	21	1.1	%
Laura Grant							Laura Grant	—		20		-		22
Directors and Executive Officers as a group (13 persons)							Directors and Executive Officers as a group (13 persons)	1,048,049		21		1.4	%

^1.Unless otherwise indicated, the address of all persons is c/o Healthcare Services Group, Inc., 3220 Tillman Drive, Suite 300, Bensalem, PA 19020.

^2.Based on ~~74,058,000~~74,721,000 shares of Common Stock outstanding at ~~April 1, 2019.~~March 31, 2021.

^3.The address of Blackrock, Inc. is 55 East 52nd Street, New York, NY 10055.

The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.

The address of ~~Janus Henderson Group, plc.~~Riverbridge Partners, LLC. is ~~201 Bishopsgate EC2M 3AE, United Kingdom.~~80 South Eighth St., Suite 1200, Minneapolis, MN 55402.

The address of ~~William Blair Investment Management, LLC.~~Mackenzie Financial Corporation is ~~150 North Riverside Plaza, Chicago, IL 60606.~~180 Queen Street West, Toronto, Ontario A6 M5V 3K1.

~~The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.~~

^4.According to a Schedule 13G filed by BlackRock, Inc. on January ~~28, 2019,~~27, 2021, it has total beneficial ownership of ~~8,497,753~~8,197,113 shares. Such beneficial ownership includes sole voting power with respect to ~~8,163,477~~8,117,911 shares, and sole dispositive power with respect to ~~8,497,753~~8,197,113 shares.

^5.According to a Schedule 13G filed by The Vanguard Group, Inc. on ~~January~~February 10, ~~2019,~~2021, it has total beneficial ownership of ~~7,393,187~~7,003,918 shares. Such beneficial ownership includes shared voting power with respect to 172,144 shares, sole dispositive power with respect to 6,771,879 shares and shared dispositive power with respect to 232,039 shares.

6.According to a Schedule 13G filed by Riverbridge Partners, LLC on January 25, 2021, it has total beneficial ownership of 5,165,222 shares. Such beneficial ownership includes sole voting power with respect to ~~153,124~~3,944,834 shares ~~shared voting power with respect to 15,255 shares,~~and sole dispositive power with respect to ~~7,231,908 shares and shared dispositive power with respect to 161,279~~5,165,222 shares.

287.


						~~Security Ownership of Certain Beneficial Owners and Management~~

^6.According to a Schedule 13G filed by ~~Janus Henderson Group, plc.~~Mackenzie Financial Corporation on February 12, ~~2019,~~2021, it has total beneficial ownership of ~~4,255,811 shares. Such beneficial ownership includes shared voting and dispositive power with respect to 4,255,811 shares.~~

^7.~~According to a Schedule 13G filed by~~ ~~William Blair Investment Management, LLC. on February 13, 2019, it has total beneficial ownership of 4,176,253~~4,522,875 shares. Such beneficial ownership includes sole voting power with respect to ~~3,814,247~~4,522,875 shares and sole dispositive power with respect to ~~4,176,253~~4,522,875 shares.

^8.~~According to a Schedule 13G filed by~~ ~~T. Rowe Price Associates,~~

Healthcare Services Group, Inc. on February 14, 2019, it has total beneficial ownership of 3,697,909 shares. Such beneficial ownership includes sole voting power with respect to 679,556 shares, and sole dispositive power with respect to 3,697,909 shares.| 2021 Proxy Statement | 30

^9.8.Theodore Wahl’s beneficial ownership includes incentive stock options to purchase ~~54,056~~23,081 shares, and ~~nonqualified~~non-qualified stock options to purchase ~~60,194~~135,919 shares, all currently exercisable, and ~~12,391~~18,228 shares credited to Mr. Wahl’s account (but unissued) in connection with the Company’s SERP. Additionally, it includes ~~83,725~~83,098 and ~~32,045~~39,389 shares held by Mr. Wahl’s wife and minor children, respectively.

^10.9.Michael E. McBryan’s beneficial ownership includes incentive stock options to purchase ~~23,846~~22,798 shares and ~~nonqualified~~non-qualified stock options to purchase ~~65,154~~77,747 shares, all currently exercisable, and ~~36,397~~41,746 shares credited to Mr. McBryan’s account (but unissued) in connection with the Company’s SERP.

^11.~~Robert L. Frome’s beneficial ownership includes nonqualified stock options to purchase~~ 10.~~37,510 shares, all currently exercisable.~~

^12.John M. Briggs’ beneficial ownership includes ~~nonqualified~~non-qualified stock options to purchase ~~28,782~~30,008 shares, all currently exercisable.

^13.~~David Hurlock’s beneficial ownership includes incentive stock options to purchase~~ 11.15,253 shares and nonqualified stock options to purchase 11,497 shares, all currently exercisable and 6,900 shares credited to Mr. Hurlock’s account (but unissued) in connection with the Company’s SERP.

^14.Andrew W. Kush’s beneficial ownership includes incentive stock options to purchase ~~22,419~~25,974 shares and ~~nonqualified~~non-qualified stock options to purchase ~~6,581~~18,371 shares, all currently exercisable, and ~~2,642~~4,889 shares credited to Mr. Kush’s account (but unissued) in connection with the Company’s SERP.

^15.12.Robert L. Frome’s beneficial ownership includes non-qualified stock options to purchase 30,008 shares, all currently exercisable.

13.John C. Shea’s beneficial ownership includes incentive stock options to purchase ~~19,809~~24,176 shares and non-qualified stock options to purchase 10,239 shares, all currently exercisable, and ~~4,334~~6,659 shares credited to Mr. Shea’s account (but unissued) in connection with the Company’s SERP.

^16.~~Robert~~14.Jason J. ~~Moss’~~Bundick’s beneficial ownership includes ~~nonqualified~~incentive stock options to purchase ~~13,005~~15,951 shares and non-qualified stock options to purchase 17,094 shares, all currently ~~exercisable.~~exercisable, and 1,627 shares credited to Mr. Bundick’s account (but unissued) in connection with the Company’s SERP.

^17.15.Dino D. Ottaviano’s beneficial ownership includes ~~nonqualified~~non-qualified stock options to purchase ~~20,957~~25,659 shares, all currently exercisable.

^18.16.John J. McFadden’s beneficial ownership includes ~~nonqualified~~non-qualified stock options to purchase ~~20,006~~25,007 shares, all currently exercisable.

^19.17.Diane S. Casey’s beneficial ownership includes ~~nonqualified~~non-qualified stock options to purchase ~~10,002~~15,003 shares, all currently exercisable.

^20.18.Jude Visconto’s beneficial ownership includes ~~nonqualified~~non-qualified stock options to purchase ~~6,003~~10,004 shares, all currently exercisable.

^{19.Daniela Castagnino's beneficial ownership includes non-qualified stock options to purchase 1,001 shares, all currently exercisable.}

20.Laura Grant's beneficial ownership includes unvested non-qualified stock options.

21.Includes ~~432,185~~508,040 shares underlying stock options granted to this group. All stock options reflected in the security ownership table are currently exercisable; also includes ~~63,701~~73,149 shares credited to the accounts of the executive officers (but unissued) in connection with the Company’s SERP.

^22.Less than 1% of the outstanding shares.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 31

GENERAL INFORMATION

2021 Annual Meeting of Shareholders


Courtyard Philadelphia						~~Security Ownership of Certain Beneficial Owners and Management~~June 1, 2021
Bensalem, Pennsylvania 19020						10:00 a.m. Eastern Daylight Time

The Record Date for the Annual Meeting is March 31, 2021. Only shareholders of record as of the close of business on this date are entitled to vote at the Annual Meeting. You are invited to vote on the proposals described in this Proxy Statement because you were a Healthcare Services Group, Inc. shareholder on the Record Date, March 31, 2021.

What constitutes a quorum?

How many votes are required to approve each proposal?

Election of Directors

The affirmative vote of a plurality of the shares of Common Stock entitled to vote and present in person or by proxy at the Annual Meeting is required for the election to our Board of Directors of each of the nominees for director. Shareholders do not have the right to cumulate their votes in the election of directors.

Ratification of Independent Registered Public Accounting Firm and Approval of Executive Compensation

The affirmative vote of the holders of a majority of the votes cast at the Annual Meeting in person or by proxy and entitled to vote is required for approval of Proposal No. 2 and Proposal No. 3.

How are votes counted?

What is a broker non-vote?

How to Vote

You may vote in person at the Annual Meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the Annual Meeting. You can always change your vote at the Annual Meeting.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 32

~~CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~How Proxies Work

~~The Company’s Audit Committee~~Our Board is ~~responsible~~asking for ~~reviewing and approving all related party transactions involving~~your proxy. Giving us your proxy means you authorize us to vote your shares at the Company and any director, executive officer, other employee or family member thereof. The Audit Committee does not have a formal written policy which sets forth its policies and procedures with respect to reviewing a related party transaction. The Audit Committee, however, will not approve any transaction unlessAnnual Meeting in the ~~transaction is on terms comparable to those available to unaffiliated third parties and have terms reasonably expected to benefit the Company.~~manner you direct.

~~Matthew J. McKee, MBA,~~Proxies submitted will be voted by the ~~brother-in-law~~individuals named on the proxy card in the manner you indicate. If you give us your proxy but do not specify how you want your shares voted, they will be voted in accordance with the Board’s recommendations.

Revoking a Proxy

A proxy may be revoked by delivery of ~~Theodore Wahl, joined~~a written statement to the Secretary of the Company ~~in 2004 and~~stating that the proxy is ~~currently employed~~revoked, by a subsequent proxy executed by the Company as Chief Communications Officer. During 2018, Mr. McKee earned total compensation for such service of approximately $677,000, consisting of $296,000 in base salary, $93,000 of incentive compensation, $182,000 of stock awards, $79,000 in option awards, $15,000 in nonqualified deferred compensation earningsperson executing the prior proxy and ~~$12,000 of other compensation. Management believes that the compensation earned by Mr. McKee is comparable~~presented to the ~~compensation~~Annual Meeting or by voting in person at the Annual Meeting.

Attending in Person

Only shareholders, their proxy holders and our invited guests may attend the Annual Meeting. For security purposes, all persons attending the Annual Meeting must bring photo identification. If you wish to attend the Annual Meeting in person but you hold your shares through someone else, such as a stockbroker, you must bring proof of your ownership to the Annual Meeting. For example, you could bring an account statement showing that you owned shares of the Company’s Common Stock as of the Record Date as acceptable proof of ownership.

Expenses; Proxy Solicitation

All expenses in connection with this solicitation will be borne by the Company. It is expected that solicitation will be made primarily by mail, but regular employees or representatives of the Company ~~would pay to a non-relative employee~~may also solicit proxies by telephone, facsimile, email or in ~~a similar position.~~person, without additional compensation, except for reimbursement of out-of-pocket expenses.

Deadline for Shareholder Proposals

Under our Second Amended and Restated By-laws, a shareholder who wishes to nominate an individual for election to the Board of Directors directly at an annual meeting, or to propose any business to be considered at an annual meeting, must deliver advance notice of such nomination or business to the Company. The shareholder must be a shareholder as of the date the notice is delivered and at the time of the annual meeting and must be entitled to vote at the meeting. The notice must be in writing and contain the information specified in our Second Amended and Restated By-laws for a director nomination or other business. With respect to the 2022 annual meeting, such notice must be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices no later than the close of business on December 24, 2021 (the 120th day prior to the first anniversary of the mailing date of the proxy statement for the preceding year’s annual meeting). Shareholders who desire to present a proposal to be included in our proxy statement for our 2022 annual meeting must submit the proposal to us no later than December 24, 2021 and must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act. Any such proposal must be sent in writing to the Secretary of the Company at the principal executive offices.

Director Independence

In accordance with the listing requirements of NASDAQ, a majority of the current members of the Company’s Board of Directors are independent, namely: John M. Briggs, Diane S. Casey, Robert L. Frome, Laura Grant, John J. McFadden, ~~Robert J. Moss,~~ Dino D. Ottaviano, Daniela Castagnino and Jude Visconto. Accordingly, if Messrs. Briggs, Frome, McFadden, ~~Moss,~~ Ottaviano and Visconto and Mmes. Casey, Castagnino and ~~Castagnino~~Grant are re-elected as members of the Board of Directors, a majority of the members of the Company’s Board of Directors will continue to be independent.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 33

Compensation Committee Interlocks and Insider Participation

No member of the ~~Nominating, Compensation and Stock Option Committee~~NCSO was an officer or employee of the Company or any subsidiary of the Company during the fiscal year ended December 31, ~~2018.~~2020. No member of the ~~Nominating, Compensation and Stock Option~~NCSO Committee was a member of the compensation committee of another entity during the fiscal year ended December 31, ~~2018.~~2020. None of our executive officers was a director or a member of the ~~Nominating, Compensation and Stock Option~~NCSO Committee of another entity during the fiscal year ended December 31, ~~2018.~~2020. There were no transactions between any member of the ~~Nominating, Compensation and Stock Option~~NCSO Committee and the Company during the fiscal year ended December 31, ~~2018~~2020 requiring disclosure pursuant to Item 404 of Regulation S-K promulgated under the Exchange Act.


						~~Certain Relationships and Related Transactions, and Director Independence~~

~~PRINCIPAL ACCOUNTANT FEES AND SERVICES~~Certain relationships and transactions with related parties

The ~~accounting firm of Grant Thornton LLP was selected by the~~Company’s Audit Committee ~~of the Board as the Independent Auditors of~~is responsible for reviewing and approving all related party transactions involving the Company ~~for~~and any director, executive officer, other employee or family member thereof. The Audit Committee does not have a formal written policy which sets forth its policies and procedures with respect to reviewing a related party transaction. The Audit Committee, however, will not approve any transaction unless the ~~fiscal year ending December 31, 2019. Said firm has no other relationship~~transaction is on terms comparable to those available to unaffiliated third parties and have terms reasonably expected to benefit the Company.

~~The following table sets forth~~Matthew J. McKee, MBA, the ~~fees billed~~brother-in-law of Theodore Wahl, joined the Company in 2004 and is currently employed by the Company as Chief Communications Officer. During 2020, Mr. McKee earned total compensation for such service of approximately $731,000, consisting of $364,000 in base salary, $97,000 of incentive compensation, $209,000 of stock awards, $52,000 in option awards, nothing in non-qualified deferred compensation earnings and $9,000 of other compensation. Management believes that the compensation earned by Mr. McKee is comparable to the compensation the Company ~~by Grant Thornton LLP during fiscal years 2018 and 2017:~~

2018 2017
Audit fees¹
$ 1,498,000 $ 988,000
Audit-related fees ²
— —
Tax fees³
28,000 40,000
All other fees ⁴
— —
$ 1,526,000 $ 1,028,000

^1.~~Audit fees billed by Grant Thornton LLP related~~would pay to ~~the audits of the Company’s annual financial statements and internal control over financial reporting; the review of the Company’s financial statements included~~a non-relative employee in ~~the quarterly reports on Form 10-Q; review of documents filed with the SEC;~~ ~~and reimbursement for direct out-of-pocket expenses.~~

^2.~~Audit-related fees relate to professional services that are reasonably related to the performance of the audit or review of~~ ~~the Company’s financial statements.~~

^3.~~Tax fees billed by Grant Thornton LLP for services relating to tax compliance, tax advice and tax planning.~~

^4.~~All other fees relate to professional services not included in the categories above, including services related to other regulatory reporting requirements.~~

a similar position.

Section 16(a) Beneficial Ownership Reporting Compliance


						~~Principal Accountant Fees and Services~~

~~OTHER MATTERS~~

In accordance with Subsection 229.405 (Item 405) of Regulation S-K, the Company is aware of one delinquent Section 16(a) report which was filed on November 27, 2020. The delinquent filing was a Form 4 disclosing three November 23, 2020 transactions in which Theodore Wahl, President and Chief Executive Officer of the Company, and two of his family members cumulatively acquired 11,321 shares of the Company's Common Stock. The Company is not aware of any additional delinquent Section 16(a) reports nor is it aware of any known failures to file for the year ended December 31, 2020.

Other Matters

So far as is now known, there is no business other than that described above to be presented for action by the shareholders at the Annual Meeting, but it is intended that the proxies will be exercised upon any other matters and proposals that may legally come before the Annual Meeting, or any adjournment or postponement thereof, in accordance with the discretion of the persons named therein.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 34

~~DEADLINE FOR SHAREHOLDER PROPOSALS~~

Under our Second Amended and Restated By-laws, a shareholder who wishes to nominate an individual for election to the Board of Directors directly at an annual meeting, or to propose any business to be considered at an annual meeting, must deliver advance notice of such nomination or business to the Company. The shareholder must be a shareholder as of the date the notice is delivered and at the time of the annual meeting and must be entitled to vote at the meeting. The notice must be in writing and contain the information specified in our Second Amended and Restated By-laws for a director nomination or other business. With respect to the 2020 annual meeting, such notice must be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices no later than the close of business on December 26, 2019 (the 120th day prior to the first anniversary of the mailing date of the proxy statement for the preceding year’s annual meeting). Shareholders who desire to present a proposal to be included in our proxy statement for our 2020 annual meeting must submit the proposal to us no later than December 26, 2019 and must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act. Any such proposal must be sent in writing to the Secretary of the Company at the principal executive offices.


						~~Other Matters~~

ANNUAL REPORT

The ~~2018~~2020 Annual Report to Shareholders, including financial statements, is available under ~~“2018~~“2020 Proxy Materials” at ~~www.proxydocs.com/~~www.proxydocs.com/HCSG. Certain information contained in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2020, filed on ~~March 18, 2019,~~February 25, 2021, is incorporated by reference to this Proxy Statement.



By Order of the Board of Directors,
JUDE VISCONTO Chairman


Dated:						April ~~19, 2019~~23, 2021
						Bensalem, Pennsylvania

A copy of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2020, as filed with the Securities and Exchange Commission, may be obtained without charge by any shareholder of record on the record date upon written request addressed to: Secretary, Healthcare Services Group, Inc., 3220 Tillman Drive, Suite 300, Bensalem, PA 19020 or by visiting the Company’s website at www.hcsg.com.

Healthcare Services Group, Inc. | 2021 Proxy Statement | 35


						~~Annual Report~~


	Name, Age and Principal Occupations and Public Directorships for the past five years	Director Since
1	Robert L. Frome, Esq., 81, Robert L. Frome, Esq., 81, is Counsel to the law firm of Olshan Frome Wolosky LLP and prior thereto was a partner at such Firm for more than five years.	1983
2	Robert J. Moss, Esq., 81, is the retired President and CEO of Moss Associates, a law firm. Previously, Mr. Moss served as a Court Officer of the First Judicial District of Pennsylvania from 2006 to 2007.	1992	¹
3	John M. Briggs, CPA, 68, serves as the Company’s lead independent director. Mr. Briggs was the Treasurer of the Philadelphia Affiliate of Susan G. Komen for the Cure from 2005 through 2011. Additionally, he is the founder and formerly a Partner of Briggs, Bunting & Dougherty, LLP, a registered public accounting firm. Mr. Briggs is currently a board member of Crossmark Global Investments of Regulated Investment Funds.	1993	¹^,²
4	Dino D. Ottaviano, 71, is the retired Principal of D2O Marketing, Inc., a provider of internet productivity tools founded in 2006. Previously, Mr. Ottaviano was employed for 23 years with Transcontinental Direct (successor to Communication Concepts, Inc.), a publicly held outsourcing printer, retiring in 2002 as Vice President of Business Development.	2007	¹
5	Theodore Wahl, 45, has been the President and Chief Executive Officer, since May 2015. Mr. Wahl joined the Company in 2004. Prior to his appointment to President and Chief Executive Officer, Mr. Wahl served as President and Chief Operating Officer, Executive Vice President & Chief Operating Officer, Vice President of Finance, Regional Manager, Regional Sales Director, District Manager and Facility Manager. Prior to joining the Company, Mr. Wahl was a Senior Manager with Ernst & Young’s Transaction Advisory Group.	2011
6	Michael E. McBryan, 54, has been the Executive Vice President and Chief Revenue Officer since April 2012. Mr. McBryan joined the Company in 1988. Prior to becoming Executive Vice President and Chief Revenue Officer, Mr. McBryan served as Senior Vice President, Divisional Vice President, Regional Sales Director, District Manager and Facility Manager.	2011
7	Diane S. Casey, RN, 65, has been a Clinical Nursing Coordinator (CNC) of Endoscopy at Huntingdon Valley Surgery Center, an AAAHC accredited healthcare facility, where she has worked for more than the past five years. Previously, Ms. Casey was employed at Holy Redeemer Health Systems in various surgical nursing and management positions.	2011	³
8	John J. McFadden, 57, has been the Principal of Global Circulation Services, a provider of marketing and advertising services to Media and Publishing companies founded since 2008. Mr. McFadden previously worked at The McGraw-Hill Companies (parent company of Standard and Poor’s) where he held management positions within their global circulation, sales and outsourcing services departments for approximately 15 years.	2012	³
9	Jude Visconto, 45, has been a Principal of American Property Holdings, a real estate investment firm focused on the acquisition, development and management of multi-family/senior housing and commercial assets, for more than the past five years. Mr. Visconto is an active member of the real estate community and participates in a variety of industry-related associations including The American Senior Housing Association, The Association of the National Investment Center for Senior Housing and Care, and The National Association of Realtors.	2015	⁴
10	Daniela Castagnino, 44, is an Information Specialist at United Spinal Association, a national 501(c)(3) non-profit membership organization dedicated to enhancing the quality of life of all people living with spinal cord injuries and disorders (SCI/D), for more than the past five years. Previously, Ms. Castagnino was an international consultant for Lazos Profesionales Asociación Civil and the Inter-American Development Bank.	2018


Name	Fees Earned or Paid in Cash		Option Awards¹^,²		Total
John M. Briggs ³	$	50,000	$	52,410	$	102,410
Robert L. Frome ⁴	$	4,000	$	52,410	$	56,410
Robert J. Moss ⁵	$	9,000	$	52,410	$	61,410
Dino D. Ottaviano ⁶	$	9,000	$	52,410	$	61,410
Diane S. Casey ⁷	$	5,000	$	52,410	$	57,410
John J. McFadden ⁸	$	5,000	$	52,410	$	57,410
Jude Visconto ⁹	$	44,000	$	52,410	$	96,410
Daniela Castagnino ¹⁰	$	2,000	—		2,000


	2018		2017
Audit fees¹	$	1,498,000	$	988,000

Audit-related fees ²	—		—
Tax fees³	28,000		40,000
All other fees ⁴	—		—
	$	1,526,000	$	1,028,000