DEF 14A of Price T Rowe Group Inc
Filed Mar 18, 2024 · FY20230001104659-24-035429
Election of Directors
Election of Directors
Director Nominee Demographics
Director Nominee Demographics
Director Nominee Demographics
| INDEPENDENCE | DIVERSITY | TENURE | | ● Nine of 11 director nominees are independent under the NASDAQ Global Select Market standards ● All directors serving on the Audit, Executive Compensation and Management Development and Nominating and Corporate Governance Committees are independent ● A well-empowered lead independent director provides independent leadership to our Board | Of our independent director nominees: | ● Balanced mix of short- and long-tenured directors ● The tenure of our independent director nominees ranges from 5 months to 14 years, with an average tenure of approximately six years ● Longer-tenured directors in leadership roles |
Director Nominee Demographics
| QUALIFICATIONS, SKILLS, AND EXPERIENCE | | | | | | BOARD ENGAGEMENT | | | 100% Executive Leadership | | 100% Financial Management | | 64% Investment Management | ● The Board held six meetings in 2023 ● Each director attended at least 75% of the combined total number of meetings of the Board and Board committees of which he or she was a member ● The independent directors met in executive session at all six of the Board meetings in 2023 ● All directors were at the 2023 annual meeting of stockholders and were available to respond to questions from our stockholders | | | 82% International | | 73% Accounting and Financial Reporting | | 100% Strategy and Execution | | | | 91% Marketing and Distribution | | 45% Government and Regulatory | | 36% Technology | |
Director Nominee Demographics
| | Recommendation of the Board | Vote Required | | | We recommend that you vote FOR all the director nominees under Proposal 1. | |
Director Nominee Demographics
| 2024 Proxy Statement | 3 |
Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2024
| Outstanding Equity Awards Table at December 31, 2023 | 66 | | 2023 Options Exercises and Stock Vested Table | 68 | | 2023 Nonqualified Deferred Compensation Table | 69 | | Potential Payments on Termination or Change in Control | 70 | | Chief Executive Officer Pay Ratio | 70 | | Pay Versus Performance | 71 | | Proposal 2 Advisory Vote on the Compensation Paid to Our Named Executive Officers | 74 | | Audit Matters | 75 | | Disclosure of Fees Charged by the Independent Registered Public Accounting Firm | 75 | | Audit Committee Preapproval Policies | 76 | | Report of the Audit Committee | 77 | | Proposal 3 Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2024 | 78 | | Stock Ownership and Related Transactions | 79 | | Equity Compensation Plan Information | 79 | | Security Ownership of Certain Beneficial Owners and Management | 79 | | Delinquent Section 16(a) Reports | 81 | | Certain Relationships and Related Transactions | 81 | | Questions and Answers About the Proxy Materials and the Annual Meeting | 82 | | Stockholder Proposals for the 2025 Annual Meeting | 88 |
Nominee Biographies
Nominee Biographies Each of our director nominees provides significant individual attributes important to the overall makeup and functioning of our Board, which are described in the biographical summaries provided below:
Glenn R. August, 62
Glenn R. August, 62
Glenn R. August, 62
| Chief Executive Officer of OHA T. Rowe Price Group, Inc. Director since: 2021 Committee Memberships: • Management Committee | Mr. August has been a director of Price Group, a vice president, and an employee since 2021. He is the founder and chief executive officer of Oak Hill Advisors, L.P. (OHA), an alternative investment firm specializing in performing and distressed credit investments, which was acquired by, and operates within, T. Rowe Price. Mr. August is a member of the Management Committee. Prior to founding OHA, and cofounding its predecessor investment firm in 1987, Mr. August worked at Morgan Stanley in New York and London. Mr. August earned a B.S. in industrial and labor relations from Cornell University and an M.B.A. from Harvard Business School, where he was a Baker Scholar. Mr. August is a member of the board of directors of Lucid Group, Inc., where he serves on the audit, nominating/corporate governance, and pricing committees, as well as a member of the board of directors for MultiPlan, Inc., where he serves on the nominating/corporate governance committee. He is a member of the board of trustees of Horace Mann School, where he co-chairs the investment committee and serves on the executive committee. He is a member of the board of trustees of The Mount Sinai Medical Center, where he serves on the finance, human capital management and IT committees. He is a member of the board of directors of Partnership for New York City and the 92nd Street Y, where he co-chairs the governance committee. Mr. August is also a member of the Council on Foreign Relations and the Akbank International Advisory Board. Mr. August brings to our Board insight into the alternative investment area of our business based on his role at OHA and his decades-long success in growing the OHA platform. |
Mark S. Bartlett, 73
Mark S. Bartlett, 73
Mark S. Bartlett, 73
| Retired Managing Partner Ernst & Young Independent Director since: 2013 Committee Memberships: • Audit (Chair) • Executive Compensation and Management Development | Mr. Bartlett has been an independent director of Price Group since 2013 and serves as chair of the Audit Committee and as a member on the Executive Compensation and Management Development Committee. He was a partner at Ernst & Young, serving as managing partner of the firm's Baltimore office and senior client service partner for the mid-Atlantic region. Mr. Bartlett began his career at Ernst & Young in 1972, serving until 2012, and has extensive experience in financial services, as well as other industries. Mr. Bartlett earned a B.S. in accounting from West Virginia University and attended the Executive Program at the Kellogg School of Business at Northwestern University. He also earned the designation of certified public accountant. Mr. Bartlett is a member of the board of directors, chair of the audit committee, and a member of the compensation committee of WillScot Mobile Mini Holdings Corp. He is also a member of the board of directors and a member of the audit committees of FTI Consulting, Inc., and Zurn Elkay Water Solutions Corp., and also serves as Zurn Elkay Water Solutions Corp.'s lead independent director. Mr. Bartlett offers our Board additional perspective on mergers and acquisitions, significant accounting and financial reporting experience, as well as expertise in the accounting-related rules and regulations of the SEC from his experience as a partner of a multi-national audit firm. He has extensive finance knowledge, with a broad range of experience in financing alternatives, including the sale of securities, debt offerings, and syndications. |
Mark S. Bartlett, 73
| 2024 Proxy Statement | 9 |
William P. Donnelly, 62
William P. Donnelly, 62
William P. Donnelly, 62
| Retired Executive Vice President Mettler-Toledo International Inc. Independent Director since: 2023 Committee Memberships: • Audit • Executive Compensation and Management Development | Mr. Donnelly has been an independent director of Price Group since 2023 and serves as a member on the Audit Committee and the Executive Compensation and Management Development Committee. Mr. Donnelly was the executive vice president responsible for finance, investor relations, supply chain and information technology of Mettler-Toledo International Inc. from 2014 until his retirement in 2018. From 1997 to 2002 and from 2004 to 2014, Mr. Donnelly served as Mettler-Toledo's chief financial officer. From 2002 to 2004, he served as division head of Mettler-Toledo's product inspection and certain lab businesses. From 1993 to 1997, Mr. Donnelly served in various senior financial roles, including chief financial officer, of Elsag Bailey Process Automation, NV and prior to that, he was an auditor with PricewaterhouseCoopers LLP from 1983 to 1993. Mr. Donnelly earned a B.S. in business administration from John Carroll University. Mr. Donnelly serves on the board of directors of Ingersoll Rand, Inc., where he serves as the lead independent director, the chair of the nominating and corporate governance committee and a member of the audit committee, and on the board of directors of Quanterix Corporation. Mr. Donnelly brings to our Board substantial expertise with respect to corporate finance, operations, information technology and mergers and acquisitions gained throughout his career as executive vice president and chief financial officer of a public company. |
Dina Dublon, 70
Dina Dublon, 70
Dina Dublon, 70
| Retired Executive Vice President and Chief Financial Officer JPMorgan Chase & Co. Independent Director since: 2019 Committee Memberships: • Audit • Executive Compensation and Management Development | Ms. Dublon has been an independent director of Price Group since 2019 and serves as a member on the Audit Committee and the Executive Compensation and Management Development Committee. She was the executive vice president and chief financial officer of JPMorgan Chase & Co., a financial services company, from 1998 to 2004. Ms. Dublon previously held numerous positions at JPMorgan Chase & Co. and its predecessor companies, including corporate treasurer, managing director of the financial institutions' division, and head of asset liability management. Ms. Dublon earned a B.A. in economics and mathematics from Hebrew University of Jerusalem and an M.S. from Carnegie Mellon University. Ms. Dublon has been a member of the board of directors of PepsiCo, Inc., since 2005, where she serves as a member of the sustainability, diversity, and public policy committee and the compensation committee. She previously served as chair of the audit and the sustainability and public policy committees. She serves as a member of the independent audit quality committee of Ernst & Young USA, since 2020, and is chair of the board of advisors of Columbia University's Mailman School of Public Health. She also serves on the boards of the Hastings Center and Westchester Land Trust. From 2020 to 2023 she served as a member of board of directors of Motive Capital Corp. I and II, as chair of the audit committees and as a member of the compensation and nominations and governance committees. From 2002 to 2017, Ms. Dublon served as a director of Accenture PLC; from 2013 to 2018, as a director of Deutsche Bank AG; from 2005 to 2014, as a director of Microsoft Corporation; and from 1999 to 2002, as a director of Hartford Financial Services Group, Inc. She previously served on the faculty of Harvard Business School and on the boards of several nonprofit organizations, including the Women's Refugee Commission and Global Fund for Women. Ms. Dublon brings to our Board significant governance experience from serving on boards of global companies, accounting and financial reporting experience, as well as substantial expertise with respect to the financials sector, mergers and acquisitions, global markets, public policy, and corporate finance gained throughout her career in the financial services industry, particularly her role as executive vice president and chief financial officer of a major financial institution. |
Dina Dublon, 70
| 10 | T. Rowe Price Group |
Robert F. MacLellan, 69
Robert F. MacLellan, 69
Robert F. MacLellan, 69
| Non-Executive Chairman Northleaf Capital Partners Independent Director since: 2010 Committee Memberships: • Audit • Executive • Executive Compensation and Management Development (Chair) | Mr. MacLellan has been an independent director of Price Group since 2010 and serves as chair of the Executive Compensation and Management Development Committee and as a member on the Audit Committee and Executive Committee. He is the non-executive chairman of Northleaf Capital Partners, an independent global private markets fund manager and advisor. Mr. MacLellan served as chief investment officer of TD Bank Financial Group (TDBFG) from 2003 to 2009, where he was responsible for overseeing the management of investments for its Employee Pension Fund, The Toronto-Dominion Bank, TD Mutual Funds, and TD Capital Group. Earlier in his career, he was managing director of Lancaster Financial Holdings, a merchant banking group acquired by TDBFG in March 1995. Prior to that, Mr. MacLellan was vice president and director at McLeod Young Weir Limited (Scotia McLeod) and a member of the corporate finance department responsible for many corporate underwritings and financial advisory assignments. Mr. MacLellan earned a B.Com. from Carleton University and an M.B.A. from Harvard Business School. He also earned the designation of certified public accountant. Mr. MacLellan is the non-executive chair of the board of directors and a member of the technology committee of Magna International, Inc., a public company based in Aurora, Ontario. From 2012 to 2018, he was the chair of the board of Yellow Media, Inc., a public company based in Montreal. Mr. MacLellan brings substantial experience and perspective to the Board with respect to the financial services industry, particularly his expertise with respect to investment-related matters, including those relating to the mutual fund industry and the institutional management of investment funds, based on his tenure as chief investment officer of a major financial institution. He also brings an international perspective to the Board as well as significant accounting and financial reporting experience. |
Eileen P. Rominger, 69
Eileen P. Rominger, 69
Eileen P. Rominger, 69
| Former Senior Advisor CamberView Partners, LLC Independent Director since: 2021 Committee Memberships: • Executive Compensation and Management Development • Nominating and Corporate Governance | Ms. Rominger has been an independent director of Price Group since 2021 and serves as a member on the Executive Compensation and Management Development Committee and the Nominating and Corporate Governance Committee. She was a senior advisor to CamberView Partners, LLC, a provider of investor-led advice for management and boards of public companies on shareholder engagement and corporate governance, from 2013 to 2018. Ms. Rominger also was the director of the Division of Investment Management at the Securities and Exchange Commission (SEC) from 2011 to 2012 and was the global chief investment officer from 2008 to 2011 and a partner from 2004 to 2011 at Goldman Sachs Asset Management. She began her career in 1981 at Oppenheimer Capital, where she worked for 18 years as a securities analyst and then as an equity portfolio manager, serving as a managing director and a member of the executive committee. Ms. Rominger earned a B.A. in English from Fairfield University and an M.B.A. in finance from the University of Pennsylvania, The Wharton School. Ms. Rominger served as a member of the board of directors of Swiss Re from 2018 to 2020 and served as a director on several of its subsidiaries until 2022. She previously served on the board of directors of Permal Asset Management, Inc., a private company, from 2012 to 2013. Ms. Rominger brings a broad range of valuable leadership and investment management experience to our Board. She also has extensive experience with complex issues relevant to the Company's business, including budget and fiscal responsibility, economic, regulatory policy, and women's issues. |
Eileen P. Rominger, 69
| 2024 Proxy Statement | 11 |
Robert W. Sharps, 52
Robert W. Sharps, 52
Robert W. Sharps, 52
| Chief Executive Officer and President T. Rowe Price Group, Inc. Director since: 2021 Committee Memberships: • Executive (Chair) • Management (Chair) | Mr. Sharps has been a director of Price Group since 2021. He is the chief executive officer (CEO) and president of Price Group and is the chair of the Company's Executive, Management, and Management Compensation and Development Committees. Mr. Sharps has been with Price Group since 1997, beginning as an analyst specializing in financial services stocks, including banks, asset managers, and securities brokers, in the U.S. Equity Division. He was the lead portfolio manager of the Institutional Large-Cap Growth Equity Strategy from 2001 to 2016. In 2016, Mr. Sharps stepped down from portfolio management to assume an investment leadership position as co-head of Global Equity, at which time he joined the Management Committee. He was head of Investments and group chief investment officer from 2017 to 2021. In February 2021, Mr. Sharps became President of Price Group and then CEO in January 2022. Prior to Price Group, he completed an internship as an equity research analyst at Wellington Management. Mr. Sharps also was employed by KPMG Peat Marwick as a senior management consultant, where he focused on corporate transactions, before leaving to pursue his M.B.A. in 1995. Mr. Sharps earned a B.S., summa cum laude, in accounting from Towson University and an M.B.A. in finance from the University of Pennsylvania, The Wharton School. He also has earned the Chartered Financial Analyst® designation. Mr. Sharps currently serves on the board of directors of the Baltimore Curriculum Project. He previously served on the St. Paul's School board of trustees and was chair of the investment committee from July 2015 to June 2020. He also spent six years on Towson University's College of Business and Economics alumni advisory board. Mr. Sharps brings to our Board insight into the critical investment component of our business based on the leadership roles he has held in the Equity Division of Price Group and his over 25-year career with the Company. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. |
Election of Directors
Election of Directors In this proxy statement, 11 director nominees are presented pursuant to the recommendation of the Nominating and Corporate Governance Committee. All have been nominated by the Board to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualify.
Election of Directors
| | Recommendation of the Board | Vote Required | | | We recommend that you vote FOR all the director nominees under Proposal 1. | |
Election of Directors
If any director nominee becomes unable or unwilling to serve between now and the Annual Meeting, proxies will be voted FOR the election of a replacement recommended by the Nominating and Corporate Governance Committee and approved by the Board.
Election of Directors
| 2024 Proxy Statement | 19 |
Election of Directors
Corporate Governance
Compensation of Directors
Compensation of Directors The Nominating and Corporate Governance Committee is responsible for periodically reviewing non-employee director compensation and benefits and recommending changes, if appropriate, to the full Board. Our non-employee director compensation program is designed to accomplish a number of objectives:
Compensation of Directors
| • | Align the interests of our non-employee directors with those of our stockholders; | | • | Provide competitive compensation for service to the Board by our non-employee directors; | | • | Maintain appropriate consistency with our approach to compensation for our executive officers and senior employees; and | | • | Attract and retain a diverse mix of capable and highly qualified directors. |
Compensation of Directors
We provide both cash and equity compensation annually to our directors and believe that, over time, cash and equity compensation should reflect approximately 40% and 60%, respectively, of the total compensation paid to our directors. The cash compensation component is based primarily on an annual retainer coupled with fees for committee attendance, lead director role, and committee chair roles. The equity compensation component is in the form of full-value awards and the possibility of electing restricted stock units (RSUs), as further explained below. We believe our total compensation package and compensation structure is comparable to and in line with other major financial services companies. The Nominating and Corporate Governance Committee periodically reviews and considers competitive market practices. In 2023, there were no changes to the compensation program for our non-employee directors.
2023 Director Compensation(1)
2023 Director Compensation(1) The following table sets forth information regarding the compensation earned by, or paid to, directors who served on our Board during 2023. As officers of Price Group, Mr. Sharps and Mr. August did not receive separate directors' fees so they have been omitted from this table. Mr. Sharps and Mr. August each appear in our Summary Compensation Table as NEOs.
2023 Director Compensation(1)
| NAME | FEES EARNED OR PAID IN CASH | STOCK AWARDS(3)(4) | ALL OTHER COMPENSATION(5) | TOTAL | | Mark S. Bartlett | $136,500 | $200,047 | $10,000 | $346,547 | | Mary K. Bush(2) | $47,667 | $18,960 | $10,000 | $76,627 | | Dina Dublon | $121,500 | $240,802 | $10,000 | $372,302 | | William P. Donnelly | $– | $324,382 | $10,000 | $334,382 | | Dr. Freeman A. Hrabowski, III | $125,000 | $297,749 | $10,000 | $432,749 | | Robert F. MacLellan | $– | $376,701 | $9,883 | $386,584 | | Eileen P. Rominger | $118,583 | $200,047 | $10,000 | $328,630 | | Cynthia F. Smith | $49,750 | $300,061 | $– | $349,811 | | Robert J. Stevens | $– | $376,769 | $– | $376,769 | | William J. Stromberg | $450,000 | $– | $– | $450,000 | | Richard R. Verma(2) | $28,000 | $– | $10,000 | $38,000 | | Sandra S. Wijnberg | $– | $362,680 | $10,000 | $372,680 | | Alan D. Wilson | $– | $458,152 | $– | $458,152 |
2023 Director Compensation(1)
| 30 | T. Rowe Price Group |
2023 Director Compensation(1)
| (1) Includes only those columns relating to compensation awarded to, earned by, or paid to non-employee directors for their services in 2023. All other columns have been omitted. | | (2) Represents the fees earned by Ms. Bush before her retirement at the 2023 Annual Meeting and by Mr. Verma prior to his resignation in March 2023. | | (3) The following table represents the equity awards granted in 2023 to certain of the non-employee directors named above. Represents the full grant date fair value of RSUs granted in accordance with FASB ASC Topic 718. The fair value was computed using the market price per share of Price Group common stock on the date of grant multiplied by the target number of units, as this was considered the probable outcome. In accordance with the 2017 Director Plan, each non-employee director was awarded a grant date value of $200,000. In addition, pursuant to our 2017 Director Plan, some directors elected to have their fees, which are typically paid semi annually, deferred into RSUs. The holders of RSUs also receive dividend equivalents in the form of additional vested RSUs on each of the Company's quarterly dividend payment dates. The award value or dividend equivalent value was converted to awards or RSUs, using the closing stock price of our common stock on the date of grant. Fractional shares were rounded up to the nearest whole share. |
2023 Director Compensation(1)
| DIRECTOR | GRANT DATE | NUMBER OF RESTRICTED SHARES | NUMBER OF RSUs | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS | | Mark S. Bartlett | 5/10/2023 | 1,890 | | $200,047 | | Mary K. Bush | 3/30/2023 | | 172 | $18,960 | | William P. Donnelly | 11/2/2023 | | 3,182 | $300,000 | | | 12/29/2023 | | 227 | $24,382 | | Dina Dublon | 3/30/2023 | | 91 | $10,020 | | | 5/10/2023 | 1,890 | | $200,047 | | | 6/29/2023 | | 91 | $10,131 | | | 9/28/2023 | | 98 | $10,242 | | | 12/29/2023 | | 96 | $10,362 | | Dr. Freeman A. Hrabowski, III | 3/30/2023 | | 202 | $22,301 | | | 5/10/2023 | | 1,890 | $200,047 | | | 6/29/2023 | | 224 | $24,854 | | | 9/28/2023 | | 241 | $25,126 | | | 12/29/2023 | | 236 | $25,421 | | Robert F. MacLellan | 3/30/2023 | | 97 | $10,751 | | | 5/10/2023 | 1,890 | | $200,047 | | | 6/29/2023 | | 98 | $10,870 | | | 6/30/2023 | | 581 | $65,000 | | | 9/28/2023 | | 112 | $11,698 | | | 12/29/2023 | | 728 | $78,335 | | Eileen P. Rominger | 5/10/2023 | 1,890 | | $200,047 | | Cynthia F. Smith | 8/1/2023 | 2,478 | | $300,061 | | Robert J. Stevens | 3/30/2023 | | 119 | $13,151 | | | 5/10/2023 | | 1,890 | $200,047 | | | 6/29/2023 | | 140 | $15,602 | | | 6/30/2023 | | 500 | $56,010 | | | 9/28/2023 | | 157 | $16,384 | | | 12/29/2023 | | 702 | $75,575 | | Sandra S. Wijnberg | 3/30/2023 | | 89 | $9,779 | | | 5/10/2023 | 1,890 | | $200,047 | | | 6/29/2023 | | 89 | $9,887 | | | 6/30/2023 | | 536 | $60,043 | | | 9/28/2023 | | 102 | $10,650 | | | 12/29/2023 | | 672 | $72,274 |
2023 Director Compensation(1)
| 2024 Proxy Statement | 31 |
2023 Director Compensation(1)
| DIRECTOR | GRANT DATE | NUMBER OF RESTRICTED SHARES | NUMBER OF RSUs | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS | | Alan D. Wilson | 3/30/2023 | | 267 | $29,430 | | | 5/10/2023 | | 1,890 | $200,047 | | | 6/29/2023 | | 288 | $32,062 | | | 6/30/2023 | | 567 | $63,515 | | | 9/28/2023 | | 318 | $33,105 | | | 12/29/2023 | | 929 | $99,993 |
2023 Director Compensation(1)
| (4) The following table represents the aggregate number of equity awards outstanding as of December 31, 2023. |
2023 Director Compensation(1)
| DIRECTOR | UNVESTED STOCK AWARDS | UNVESTED RSUs | UNEXERCISED OPTION AWARDS | TOTAL | VESTED RSUs | | Mark S. Bartlett | 1,890 | – | – | 1,890 | – | | William P. Donnelly | – | 3,218 | – | 3,218 | – | | Dina Dublon | 1,890 | – | – | 1,890 | 8,590 | | Dr. Freeman A. Hrabowski, III | – | 1,955 | 26,408 | 28,363 | 19,118 | | Robert F. MacLellan | 1,890 | – | 26,408 | 28,298 | 10,429 | | Eileen P. Rominger | 1,890 | – | – | 1,890 | – | | Cynthia F. Smith | 2,478 | – | – | 2,478 | – | | Robert J. Stevens | – | 1,955 | – | 1,955 | 12,333 | | William J. Stromberg | – | 62,172 | – | 62,172 | – | | Sandra S. Wijnberg | 1,890 | – | – | 1,890 | 9,504 | | Alan D. Wilson | – | 1,955 | – | 1,955 | 26,427 |
2023 Director Compensation(1)
| (5) The amounts represent personal gifts matched by our sponsored T. Rowe Price Foundation to qualified charitable organizations. |
2023 Director Compensation(1)
| 32 | T. Rowe Price Group |
2023 Director Compensation(1)
Risk Management Oversight
2023 Compensation Decisions for Our Chief Executive Officer and Other NEOs
| • | For 2023, Mr. Sharps' total compensation decreased 7.2% over the prior year resulting from a decline in both the value of his annual bonus and long-term equity awards. The lower total compensation aligns with the Company's overall performance during 2023, though consideration was also given to Mr. Sharps' contributions to the achievement of longer-term financial and strategic results discussed below. Consideration was also given to Mr. Sharps' pay relative to his industry peers and the anticipated reduction of competitive compensation for industry peers during the current market cycle. |
2023 Compensation Decisions for Our Chief Executive Officer and Other NEOs
| • | Our AICP in which the majority of our NEOs participate, is funded as a percentage of net operating income (adjusted), and long-term variable awards granted to nearly all of the NEOs were split equally between performance-based RSUs subject to a three-year performance goal followed by two-year time based vesting, and time-based RSUs subject to a three-year vesting schedule. |
2023 Compensation Decisions for Our Chief Executive Officer and Other NEOs
| • | Annual compensation for Mr. August includes a separate bonus opportunity and long-term variable compensation components due to his leadership of our OHA subsidiary and is determined separately from our other NEOs, as described further below. |
Executive Compensation Practices
| | | | WHAT WE DO | WHAT WE DON’T DO | | a Include all independent directors on the Compensation Committee. a Impose stock ownership and retention requirements on our independent directors, executive officers, and other select members of senior management. a Emphasize variable compensation based on performance, including long-term equity incentive compensation. a Grant 50% of NEOs’ long-term equity award value as performance-based RSUs, with a three-year objective performance goal and two additional years of time-based vesting. a Impose double-trigger vesting on acceleration of awards granted under our 2020 Long-Term Incentive Plan (2020 Plan) in the event we are acquired by another company. a Engage an independent compensation consultant who provides services only to the Board and provides no other services to the Company or its management. a Use a comprehensive risk management program designed to identify, evaluate, and control risks and our compensation and stock ownership programs work within this risk management framework. a Have recoupment policies for both cash and equity incentive compensation in place for executive officers in the event of a material restatement of our financial results within three years of the original reporting. | X Allow executives or independent directors to short-sell the Company stock or hedge to offset a possible decrease in the market value of Company stock held by them. X Provide excise tax gross-ups. X Pay dividends on unearned performance-based RSUs. X Accelerate the vesting of equity awards on an executive officer’s retirement. X Permit the repricing or exchange of equity awards in any scenario without stockholder approval. X Sponsor any supplemental executive retirement plans or provide significant perquisites and other personal benefits to our executive officers. |
Executive Compensation Philosophy and Objectives
| • | maintain alignment of interests between our professionals and our stockholders by focusing on long-term performance and value creation, emphasizing appropriate risk-taking, reinforcing a "client focused" and collaborative culture, and rewarding associates for the achievement of strategic goals. |
Annual Incentive Compensation Plan Bonus Pool
Annual Incentive Compensation Plan Bonus Pool The AICP provides that, unless otherwise approved by the Compensation Committee, the maximum bonus pool for participating executives is equal to 5% of the Company's net operating income adjusted to exclude, if any, (i) the effects of goodwill impairment; (ii) the cumulative effect of changes in accounting policies or principles; (iii) gains or losses from discontinued operations; and (iv) unusual or nonrecurring gains, losses, or expenses. The Compensation Committee also established maximum individual bonuses as a percentage of the AICP formula; however, they retained the right to award an amount that was less than each NEO's maximum. The amounts awarded under the AICP are part of the Company's annual bonus program applicable to all employees other than those supporting the OHA business. The OHA CEO along with all OHA employees are not eligible to participate in the AICP, as they participate in a separate incentive program that was contractually agreed to at the time of the acquisition. The Company's annual bonus program is managed by the Compensation Committee and the Management Compensation and Development Committee and is funded based on the Company's financial results. Additional considerations include the Company's investment performance, service quality for clients, and progress toward stated objectives relating to the Company's long-term strategies.
Long-Term Variable Incentive Compensation
Long-Term Variable Incentive Compensation
Long-Term Equity Awards
Long-Term Equity Awards We believe our long-term equity program is a significant factor in maintaining a strong correlation between the compensation of our top managers and professionals, including our NEOs, and the long-term interests of our clients and stockholders. In the case of our NEOs, we split the long-term equity awards equally between time-based and performance-based awards to emphasize long-term stockholder alignment for our NEOs. The performance-based RSUs are subject to a three-year performance period that begins on January 1 of the year following the grant and ends on December 31 of the third year following the grant. The performance goal for the performance-based RSUs is the Company's operating margin relative to peers. The number of performance-based RSUs earned, if any, is determined by comparing the Company's operating margin with the average operating margin of a peer group for the same period. Any performance-based RSUs earned after the three-year performance period will vest in equal annual installments beginning in December of the year following the end of the performance period (years four and five
Long-Term Equity Awards
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Long-Term Equity Awards
after the grant). The time-based RSUs awarded to our NEOs vest in equal annual installments over three years beginning in December in the year following the grant. Equity awards reflect long-term value added by the individual as well as their potential for future contributions. The total award granted to an NEO from year to year also reflects individual performance and an assessment of compensation positioning versus the market. The ultimate value realized from an equity award fluctuates with the Company's stock price, thus aligning NEO pay with stockholder interests. The Compensation Committee did not approve any long-term equity awards to Mr. August in 2023, due to Mr. August's compensation being directly tied to OHA results in the form of carried interest.
Mutual Fund Unit Plan (MFUP)
Mutual Fund Unit Plan (MFUP) As a component of compensation for NEOs employed by TRPIL, our UK subsidiary, the Compensation Committee has adopted the MFUP. Pursuant to the MFUP, Mr. Thomson is eligible to receive grants of MFUs in lieu of time-based RSUs. Mr. Thomson's MFU award represents 50% of his annual long-term incentive compensation. The MFUs vest ratably over a three-year period, and are settled in cash. The MFUs represent hypothetical investments in products managed by TRPIL in order to satisfy the regulatory requirements affecting that entity. Once granted, the MFUs are not forfeitable and are not subject to such NEO's continued employment with the Company, but they are subject to certain clawback provisions.
Supplemental Savings Plan
Supplemental Savings Plan The Supplemental Savings Plan provides certain senior officers the opportunity to defer receipt of a portion of their cash incentive compensation earned for a year during which services are provided. The amounts deferred are adjusted in accordance with the hypothetical investments chosen by the officer from the list of products offered under our U.S. retirement program. Prior to 2021, any amounts deferred were required to be deferred for a period of at least two years but could be deferred for a longer period or until termination of employment. In 2020, the Supplemental Savings Plan was
Supplemental Savings Plan
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Supplemental Savings Plan
amended, with the changes beginning with deferrals of 2021 compensation. The changes include reducing limits on the maximum permitted deferral to be the lesser of 50% of cash incentive compensation or $2 million, increasing the minimum deferral period to at least five years, reducing the maximum number of installment payments to 10 years, and to providing for an automatic lump-sum payment upon termination prior to age 58 (or age 55 for our UK associates). For deferrals in 2023, the automatic lump-sum payment upon termination prior to age 55 will apply to all employees. All NEOs, except for Mr. August, were eligible to participate in the Supplemental Savings Plan in 2023. See our Nonqualified Deferred Compensation Table on page 69 for more information.
Overview of Compensation Elements
| ELEMENT | KEY FEATURES | PURPOSE | | AICP | • Performance based and represents a material portion of the NEO’s total compensation. • Administered by the Compensation Committee. • The AICP is part of the Company’s annual bonus pool, in which most employees participate. Executive officers and other employees engaged in the OHA business participate in the OHA Pool and not the AICP or the Company’s overall bonus pool. • The AICP sets an aggregate maximum bonus pool for eligible NEOs based solely on Company financial performance in the current year. The Compensation Committee annually determines the maximum percentage of the total AICP pool that can be awarded to each NEO. This is a limit on the amount that can be awarded to each NEO that is tied to financial performance. • Actual bonus amounts reflect the Company’s financial and operating performance relative to annual goals and objectives plus individual performance and contributions. • Actual bonus amounts for each NEO are typically lower than the maximum amount under the plan. | • Provides structure for incentive compensation and, coupled with the use of judgment by the Compensation Committee, aligns cash compensation to the Company’s annual performance. • Rewards NEOs for achievement of annual Company goals and objectives of our long-term strategy. • Provides competitive cash compensation to attract and retain diverse high-quality talent. | | OHA Employees Only | | | | OHA Pool | • Represents a fixed percentage of the management fees and current performance fees earned from OHA managed funds. • The OHA Pool represents an annual bonus program for all OHA employees. | • Creates a strong link between realized compensation for an NEO who is an executive of OHA and performance of the OHA managed funds. |
Long Term Variable Incentive Compensation
Long Term Variable Incentive Compensation
Long Term Variable Incentive Compensation
| ELEMENT | KEY FEATURES | PURPOSE | | Long-Term Equity Awards | • Represents a significant portion of total compensation and are earned over five years. • The grant value for each NEO reflects level of corporate management and functional responsibility, competitive assessment of similar roles within the marketplace, individual performance, and expected future long-term contributions. • For 2023, 50% of the long-term equity award for NEOs were in performance-based RSUs tied to the attainment of a three-year objective performance goal. An NEO can earn from 0-100% of the performance RSUs based on the Company’s operating margin relative to the average operating margin for peers over the same period. If the Company achieves the three-year objective performance goal for the period 2024 through 2026, these awards would vest 50% per year starting in December 2027. • The remaining 50% of the long-term equity award for NEOs were in time-based RSUs that vest at 33⅓% per year starting in December 2024. • Grants are awarded at the regularly scheduled December meeting of the Compensation Committee. | • Creates a strong link between NEO realized compensation and stock performance. • Provides a significant incentive to protect and enhance stockholder value and profitability. • Enhances the link between compensation and long-term Company performance through performance-based RSUs. • Provides competitive compensation to attract and retain diverse high-quality talent. | | UK Based NEOs Only | | |
Long Term Variable Incentive Compensation
| MFUP | • For NEOs in the UK, a portion of their variable compensation is deferred into the MFUP, in the form of MFUs. • Administered by the Compensation Committee. • MFUs are measured against a basket of strategies managed by TRPIL. • MFUs will vest ratably over three years and are settled in cash. | • Designed to meet regulatory requirements for NEOs located in the UK. • The MFUP is designed to align the interests of NEOs with the performance of the investments managed by TRPIL. | | OHA Employees Only | | | | Carried Interest | • Represents the amount of net proceeds of an OHA fund that is available for distribution pursuant to the partnership agreement for the fund, as determined by the general partner of the fund in its discretion, and distributed in accordance with the allocation provisions set forth in the partnership agreement for the fund. | • Creates a strong link between realized compensation of an NEO who is an executive of OHA and performance of the business they manage. |
Compensation Recoupment Policies
Compensation Recoupment Policies Our Board has adopted a Policy for Recoupment of Incentive Compensation for executive officers of the Company. This policy provides that, in the event of a determination of a need for a material restatement of the Company's financial results within three years of the original reporting, the Board will review the facts and circumstances that led to the requirement for the restatement and will take actions it deems necessary and appropriate. The Board will consider whether any executive officer received incentive compensation, including equity awards, based on the original financial statements that in fact was not warranted based on the restatement. The Board will also consider the accountability of any executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement. The actions the Board could elect to take against a particular executive officer include: the recoupment of all or part of any bonus or other incentive compensation paid to the executive officer, including recoupment in whole or in part of equity awards; disciplinary actions, up to and including termination; and/or the pursuit of other available remedies, at the Board's discretion. In addition, effective for compensation awarded for periods beginning on or after October 2, 2023, the Board adopted an Erroneously Awarded Compensation Recoupment Policy ("Recoupment Policy") as required by the Sarbanes-Oxley Act. The Recoupment Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation following accounting restatements from persons who served as an executive officer of the Company at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the Company is required to prepare an accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results. Recovery will be required on a "no fault" basis, without regard to whether any misconduct occurred and without regard to whether an executive officer was responsible for the erroneous financial statements.
Variable Compensation
| Investment Performance and Capabilities • Sustain excellent long-term investment performance across the franchise, and improve performance in growth equity strategies and core fixed income. • Turn around underperforming strategies and continue to deliver long-term performance for clients. • Expand ESG capabilities, including team buildout and supporting data. • For OHA, outperform benchmarks in flagship liquid strategy funds and exceed target returns in flagship private strategy funds. • Support execution of key tech/ops related initiatives to reduce reliance on legacy/end-of-life systems and build/improve the investment data platform. | Distribution and Product Capabilities • Improve aggregate gross and net flow results and execute key distribution initiatives across all channels. • Increase segment and asset class diversification, while preserving existing business. • Drive U.S. Retirement Insured & Sales initiatives. • Explore ways to enhance our fixed income go-to-market approach. • Establish a disciplined sales framework for engaging prospects and clients. • Expand institutional distribution for OHA products, and launch new OHA products. | | Corporate Strategy and Financial Results • Complete execution plans for new strategic pillars, including defining accountability, expected outcomes and metrics. • Manage expenses in the face of market uncertainty to balance investment in the business with near-term impact on operating income, EPS, return of capital and capacity for M&A. • Continue integration of OHA corporate systems and processes. | Operations, Technology and Talent • Define our data and architecture strategy, and begin execution. • Execute technology development plans aligned to our strategic and ongoing initiatives. • Advance firm data strategy, build out data team, and mature analytics capabilities around the firm. • Modernize Investments technology foundation. • Manage transformation program and deliver milestones for key strategic programs. • Strengthen regional operating model to improve local decision making and accountability. • Remain an employer of choice for diverse top talent. |
Investment Performance(1)
(4) Passive Peer Median was created by T. Rowe Price using data from Morningstar. Primary share class only. Excludes money market mutual funds, funds with an operating history of less than one year, funds with fewer than three peers, T. Rowe Price passive funds, and T. Rowe Price funds that are clones of other funds. This analysis compares T. Rowe Price active funds with the applicable universe of passive/index open-end funds and ETFs of peer firms. The top chart reflects the percentage of T. Rowe Price funds with 1 year, 3 year, 5 year, and 10 year track record that are outperforming the passive peer universe. The bottom chart reflects the percentage of T. Rowe Price funds AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $307B for 1 year, $272B for 3 years, $271B for 5 years, and $263B for 10 years. (5) Composite net returns are calculated using the highest applicable separate account fee schedule. Excludes money market composites. All composites compared to official GIPS composite primary benchmark. The top chart reflects the percentage of T. Rowe Price composites with 1 year, 3 year, 5 year, and 10 year track record that are outperforming their benchmarks. The bottom chart reflects the percentage of T. Rowe Price composite AUM that has outperformed for the time periods indicated. Total AUM included for this analysis includes $1,280B for 1 year, $1,264B for 3 years, $1,255B for 5 years, and $1,222B for 10 years. (6) The Morningstar Rating(TM) for funds is calculated for funds with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. Morningstar gives its best ratings of 5 or 4 stars to the top 32.5% of all funds (of the 32.5%,10% get 5 stars and 22.5% get 4 stars). The Overall Morningstar Rating(TM) is derived from a weighted average of the performance figures associated with a fund's 3, 5, and 10 year (if applicable) Morningstar Rating(TM) metrics.
Annual Incentive Compensation
Annual Incentive Compensation At the beginning of the year, the Compensation Committee established each participating NEO's maximum payout percentage from the AICP bonus pool. The established payout percentages reflect the Compensation Committee's decision to impose a financial-based limit on the maximum payout to each NEO and the Compensation Committee's expectation of each NEO's relative contribution to the Company's performance. The Compensation Committee has the discretion to reduce or eliminate the share of the bonus pool payable to any NEO. Mr. August did not participate in the AICP for 2023, and did not receive an annual bonus payment from the OHA compensation pool for 2023. The table below shows the maximum payout (in millions) for each NEO who participated in the AICP and the actual bonus awards (in millions) made by the Compensation Committee for 2023 and 2022.
Annual Incentive Compensation
| NAME | 2023 MAXIMUM PAYOUT BASED ON THE TOTAL POOL | 2023 ANNUAL INCENTIVE PAYMENT | 2022 ANNUAL INCENTIVE PAYMENT | 2023 PAYMENT PERCENTAGE CHANGE OVER 2022 | | Robert W. Sharps | $12.7 | $7.3 | $8.0 | (8.8)% | | Jennifer B. Dardis | $6.3 | $2.2 | $2.3 | (5.4)% | | Justin Thomson(1) | $6.3 | $2.1 | $2.5 | (13.6)% | | Eric L. Veiel | $10.6 | $5.5 | $6.0 | (8.3)% |
Annual Incentive Compensation
(1)Mr. Thomson received bonus amounts denominated in British pounds of £1.7 million in 2023 and £2.0 million in 2022.
Annual Incentive Compensation
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Annual Incentive Compensation
Consistent with past practice, the Compensation Committee exercised negative discretion and awarded less than the maximum payout to the NEOs above. Exercising negative discretion maintains alignment between the bonus amounts paid to the NEOs and bonuses and compensation paid at our competitors. For the NEOs who participate in the AICP, the Compensation Committee has the power to authorize additional annual incentive compensation or bonuses outside the AICP but did not do so in 2023.
Long-Term Variable Incentive Compensation
Long-Term Variable Incentive Compensation
Equity Awards
Equity Awards Generally, long-term equity awards are split equally between performance-based and time-based awards to our NEOs. Grants to Messrs. Sharps and Veiel and Ms. Dardis were split equally between performance-based and time-based RSUs. For Mr. Thomson, the awards were split equally between performance-based RSUs and MFUs (see Mutual Fund Unit Plan below). The grant value of performance-based or time-based RSUs was converted to units using the closing stock price of our common stock on the date of grant ($100.55 for 2023). The NEOs were granted the following long-term incentive values (in millions) in 2023. Mr. August did not receive any long-term equity awards in 2023.
Equity Awards
| NAME | 2023 EQUITY INCENTIVE VALUE | 2023 PERFORMANCE- BASED RESTRICTED STOCK UNITS | 2023 TIME- BASED RESTRICTED STOCK UNITS(1) | 2022 EQUITY INCENTIVE VALUE | 2023 LTI AWARD VALUE CHANGE OVER 2022 | | Robert W. Sharps | $5.1 | 25,361 | 25,361 | $5.4 | (5.6)% | | Jennifer B. Dardis | $1.3 | 6,341 | 6,341 | $1.4 | (5.6)% | | Justin Thomson | $1.6 | 15,915 | — | $1.9 | (16.6)% | | Eric L. Veiel | $3.0 | 14,918 | 14,918 | $3.2 | (4.8)% |
Equity Awards
(1) Time-based RSU's vest in equal installments over the three years beginning in December in the year after the grant date.
Performance-Based RSUs—Performance Thresholds and Vesting
Performance-Based RSUs—Performance Thresholds and Vesting The performance thresholds established by the Compensation Committee for 2023 performance-based RSUs were based on the Company's operating margin for the three-year performance period compared with the average operating margin of a designated group of public company peers (Industry Average Margin) that was composed of:
Performance-Based RSUs—Performance Thresholds and Vesting
| Affiliated Managers Group, Inc. AllianceBernstein L.P. BlackRock, Inc. | Federated Investors Franklin Resources, Inc. | Janus Henderson Group Invesco Ltd. |
Performance-Based RSUs—Performance Thresholds and Vesting
The peer group listed above is similar to the peer group used in evaluating the competitive positioning of our compensation program, but consists of independent asset management firms that align with our business. The Compensation Committee selected operating margin as the sole performance metric because it is a key indicator of profitability and relative financial performance in the asset management industry. Operating margin is determined by dividing net operating income by total revenues for the performance period, as reported in the consolidated financial statements filed with the SEC or, if such financial statements are not available for a peer company at the time of determination, as otherwise disclosed in a press release by the peer company. In each case, net operating income is adjusted to exclude the effects of goodwill impairment, the cumulative effect of changes in accounting policies or principles, and gains or losses from discontinued operations, as each is reflected on the face of or in the notes to the relevant financial statements. For performance-based RSU awards made in 2023, the number of RSU's earned will be determined by comparing the Company's operating margin for the three-year performance period with the average operating margin of the peer group for the period, and thereafter vest over the following two years (years four and five after the grant date).
Performance-Based RSUs—Performance Thresholds and Vesting
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Performance-Based RSUs—Performance Thresholds and Vesting
The following table shows the performance thresholds and related percentage of RSUs eligible to be earned that were established by the Compensation Committee for the 2023 awards.
Performance-Based RSUs—Performance Thresholds and Vesting
| TROW Operating Margin as Percent of Industry Average Margin | >100% | 90%-99% | 80%-89% | 70%-79% | 60%-69% | 50%-59% | <50% | | Amount of RSUs Eligible to Be Earned | 100% | 90% | 80% | 70% | 60% | 50% | 0% |
Performance-Based RSUs—Performance Thresholds and Vesting
| GRANT DATE | PERFORMANCE PERIOD | TROW OPERATING MARGIN AS PERCENT OF INDUSTRY AVERAGE MARGIN | AMOUNT EARNED AND SUBJECT TO STANDARD VESTING SCHEDULE | VESTING START MONTH/YEAR | | December 2023 | January 1, 2024 to December 31, 2026 | Not determinable at this time | | December 2027 |
Performance-Based RSUs—Performance Thresholds and Vesting
Performance-based RSUs earned by each NEO following the completion of the relevant performance period vest at a rate of 50% per year, beginning in the month and year in the chart above, once the Compensation Committee certifies the number of RSUs earned.
Payout of Performance-Based RSUs Granted in 2020
Payout of Performance-Based RSUs Granted in 2020 While the Compensation Committee does not consider these amounts to be compensation for fiscal year 2023, in February 2024 the Compensation Committee certified performance for performance-based RSUs granted in 2020 to Messrs. Sharps and Veiel. The number of RSU's earned was based on the 2021-2023 performance period and upon the achievement of operating margin for the three-year performance period compared with the average operating margin of a designated group of public company peers. The Company achieved 100% of the performance goal for that award, and Messrs. Sharps and Veiel will have 18,118 and 11,426 shares, respectively, vest in equal installments in December 2024 and December 2025.
Changes to Compensation Program in 2024
| • | Performance metrics incorporating and balancing financial, client, strategic and organizational objectives |
Changes to Compensation Program in 2024
| • | Continued performance alignment through emphasis on long-term equity compensation |
Committee Procedures
Committee Procedures Early each year, the Compensation Committee meets with the CEO and President and members of senior management in order to discuss goals and objectives for the year, including goals and objectives for the NEOs. In addition, the Compensation Committee determines eligibility for the AICP bonus pool and sets forth the maximum percentage that may be paid to each participant. At its meeting in December, the Compensation Committee evaluates the Company's and executive's performance as part of its determination of appropriate cash and long-term incentive awards. The set of metrics includes those that reflect the actions of our management team and employees on the Company's performance, such as net revenue and operating margin, together with metrics that are heavily influenced by factors outside the management team's control but are heavily correlated to the returns experienced by our stockholders, such as one-year total stockholder return. The Compensation Committee believes that evaluating performance against a combination of metrics and strategic goals most effectively drives the behavior for the long-term results that we want our executive team to strive for and produce, as well as tightly links pay outcomes to performance. The Compensation Committee awards annual equity incentive grants to employees from stockholder-approved long-term incentive plans as part of the Company's annual compensation program.
Role of Independent Compensation Consultant
Role of Independent Compensation Consultant Johnson Associates serves as the Compensation Committee's independent compensation consultant and attended all Compensation Committee meetings during 2023, and regularly meets with the Compensation Committee in executive session. The Compensation Committee benefited from the consultant's broad experience in advising other compensation committees, in-depth understanding of investor perspectives on compensation, and familiarity with our compensation programs and policies and those of peer companies in the asset management and financial services industry. Johnson Associates provides the Compensation Committee with information about the competitive market for senior management in the investment management and financial services industries and compensation trends across industries. Specifically in 2023, Johnson Associates advised the Compensation Committee on the structure for CEO compensation for 2024. In addition, the consultant periodically updated the Compensation Committee on trends and projected implications for industry compensation practices and potential changes to competitive rates of pay during the period.
Role of Independent Compensation Consultant
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Role of Independent Compensation Consultant
Johnson Associates has no relationship with Price Group other than as the Compensation Committee's compensation consultant. Johnson Associates has not provided any services to the Company other than those provided to the Compensation Committee in its role as independent consultant. The Compensation Committee has assessed the independence of Johnson Associates pursuant to SEC rules and concluded that the work performed by the advisor does not raise any conflicts of interest. The Compensation Committee will continue to periodically review its relationship with Johnson Associates and its continued appointment as the Compensation Committee's independent consultant. Many of our key competitors are not publicly traded or are subsidiaries of larger companies. These competitors generally do not publicly disclose the compensation data of their top executive officers. During the year, Johnson Associates presented a report of expected competitive pay for each NEO based on current industry trends and their market evaluation of each NEO's role. This data, along with competitive market data provided to management by McLagan Data Analytics and input from the CEO and President and other senior executives of the Company, provided context to the Compensation Committee in their compensation decisions for each NEO for 2023. McLagan has an extensive database on compensation for most investment management companies, including private companies for which information is not otherwise generally available. McLagan summarizes data by role across multiple companies without specifically identifying information for a particular company. Management uses the summary information from McLagan for a reasonable estimation of compensation levels in the industry for persons with specific roles relevant to our business (e.g., portfolio manager, analyst, client service manager, etc.). Relevant portions of this information are shared by executive management with the Compensation Committee. McLagan works with management and does not act as a compensation consultant to the Compensation Committee.
Competitive Positioning
Competitive Positioning The Compensation Committee annually reviews competitive data regarding compensation at peer companies in the investment management industry with their independent compensation consultant and management. We do not set compensation levels to fall within specific ranges compared with benchmark data. Instead, we use the information provided by Johnson Associates, proxy data for peer group companies listed below, and survey data provided by McLagan and others about the competitive market for senior management to gain a general understanding of current practices and to assist in the development of compensation programs and setting compensation levels. Below is the list of the 2023 companies used by the Compensation Committee peer group for all executives, and we note that J.P. Morgan Asset Management, Morgan Stanley Asset Management, and Goldman Sachs Asset Management are included with the other firms only when considering a peer group for the CEO and President:
Competitive Positioning
| • Affiliated Managers Group, Inc. • AllianceBernstein L.P. • Ameriprise Financial, Inc. | • BlackRock Inc. • Charles Schwab Corporation • Franklin Resources, Inc. | • Invesco Ltd. • Northern Trust • TIAA | • CEO Only: — J.P. Morgan Asset Management — Morgan Stanley Asset Management — Goldman Sachs Asset Management |
Competitive Positioning
The companies making up the peer group listed above were selected because they are asset managers, as well as comparable financial services and brokerage companies, whose executive compensation information is publicly available. The CEO Only firms listed above were selected because they are large asset management subsidiaries of publicly traded firms with significant AUM. The Compensation Committee will continue to review the composition of this peer group to analyze our executive compensation program and determine whether any changes should be made in the future. In addition to specific information on these companies, the Compensation Committee reviewed aggregated summary compensation data based on information from surveys that include some of the peer companies listed above as well as other public and nonpublic companies with which we compete for executive talent, including the Capital Group Companies Inc., Fidelity Investments, Goldman Sachs Asset Management, Janus Henderson Investors, J.P. Morgan Asset Management, MFS Investment Management, Pacific Investment Management Company LLC, The Vanguard Group Inc., Wellington Management Company LLP, and Western Asset Management Co.
Competitive Positioning
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Competitive Positioning
In light of our overall performance in 2023, the Compensation Committee believes that the compensation paid to our CEO and President and other NEOs is reasonable in relation to the compensation paid by our peer companies both on an absolute basis and in comparison to relevant financial performance metrics.
Risk Management and the Alignment of Management with our Stockholders
Risk Management and the Alignment of Management with our Stockholders The Compensation Committee considers whether the executive compensation program rewards reasonable risk-taking and if incentive opportunities achieve the proper balance between rewarding employees and managing risk and protecting stockholder returns. While the design of our executive compensation program is primarily performance-based, we believe that it does not encourage inappropriate risk-taking. Ongoing and active discussions with management regarding progress on short-term and long-term goals enables informed decisions while avoiding the risks that can be associated with managing short-term results to achieve predetermined formulaic outcomes. Our compensation programs are designed to provide executive officers with appropriate incentives to create long-term value for stockholders while taking thoughtful and prudent risks to grow value over time. Our NEOs' salaries are fixed in amount, and the U.S. maximum base salary has not increased since 2005. In addition, the majority of our NEO compensation is variable and performance-based. Annual incentive compensation is linked to overall corporate performance along with individual goals. Further, a substantial portion of our NEOs' compensation is in the form of long-term equity awards that further align the NEOs' interests with those of our stockholders. Since the long-term equity awards are not earned in one year and vest only upon the achievement of certain performance goals and continued employment at the Company, we believe NEOs are discouraged from excessive or inappropriate risk-taking. We believe that our equity program, our stock ownership guidelines, and the significant stock ownership of our most tenured NEOs create important links between the financial interests of our executives and long-term performance and mitigate any incentive to disregard risks in return for potential short-term gains. To further ensure the alignment of compensation with long-term performance, we have adopted a policy for the clawback of incentive compensation from NEOs in the event an NEO's acts or omissions contribute to a need for a restatement of our financial results. In addition, we have a robust risk management program designed to identify, evaluate, and control risks. Through this program, we take a Company-wide view of risks and have a network of systems and oversight to ensure that risks are not viewed in isolation and are appropriately controlled and reported, including a system of reporting to the CEO, the Audit Committee, and the full Board. We believe that our compensation and stock ownership programs work effectively within this risk management program. We have considered the risks created by our compensation policies and practices, including mitigating factors, and, based on this review, do not believe that our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.
Summary Compensation Table
Summary Compensation Table The following table summarizes the total compensation of our NEOs, who are the chief executive officer, the chief financial officer, and our three other most highly compensated executive officers.(1)
Summary Compensation Table
| | | | | NON-EQUITY | | | | | | | STOCK | INCENTIVE PLAN | ALL OTHER | | | NAME AND PRINCIPAL POSITION | YEAR | SALARY | AWARDS(3) | COMPENSATION(4) | COMPENSATION(5) | TOTAL | | Robert W. Sharps | 2023 | $350,000 | $5,100,097 | $7,300,000 | $91,834 | $12,841,931 | | Chief Executive Officer and President | 2022 | $350,000 | $5,400,156 | $8,000,000 | $88,457 | $13,838,613 | | | 2021 | $350,000 | $6,850,356 | $10,300,000 | $86,103 | $17,586,459 | | Jennifer B. Dardis | 2023 | $350,000 | $1,275,175 | $2,175,000 | $91,603 | $3,891,778 | | Chief Financial Officer and Treasurer | 2022 | $350,000 | $1,350,160 | $2,300,000 | $88,104 | $4,088,264 | | | 2021 | $347,083 | $1,200,405 | $2,100,000 | $86,243 | $3,733,731 | | Glenn R. August | 2023 | $350,000 | $— | $— | $12,082,629 | $12,432,629 | | Chief Executive Officer of Oak Hill Advisors, L.P. | 2022 | $350,000 | $— | $— | $11,679,929 | $12,029,929 | | Justin Thomson(2) | 2023 | $299,256 | $1,600,253 | $3,738,185 | $1,405,666 | $7,043,360 | | Head of International Equity and CIO | 2022 | $295,899 | $1,918,591 | $4,392,832 | $1,408,733 | $8,016,055 | | | 2021 | $330,200 | $2,850,094 | $7,910,600 | $31,214 | $11,122,108 | | Eric L. Veiel | 2023 | $350,000 | $3,000,010 | $5,500,000 | $92,924 | $8,942,934 | | Head of Global Investments and CIO | 2022 | $350,000 | $3,150,212 | $6,000,000 | $88,154 | $9,588,366 | | | 2021 | $350,000 | $4,200,397 | $8,250,000 | $86,018 | $12,886,415 |
Summary Compensation Table
| (1) Includes only those columns relating to compensation awarded to, earned by, or paid to the NEOs in 2023, 2022, and 2021. All other columns have been omitted. Mr. August became an NEO in 2022; therefore, the amounts for 2021 have been omitted. |
Summary Compensation Table
| (2) Cash amounts, including salary and AICP bonus, received by Mr. Thomson pursuant to his employment agreement were paid in British pounds. In calculating the U.S. equivalent for amounts that are not denominated in U.S. dollars (USD), the Company converts each payment to Mr. Thomson into U.S. dollars based on an average monthly revaluation rate during the applicable year. The average exchange rate for 2023 revaluation was £1 to $1.2469. |
Summary Compensation Table
| (3) Represents the full grant date fair value of performance-based and time-based RSUs granted in accordance with FASB ASC Topic 718. The fair value was computed using the market price per share of Price Group common stock on the date of grant multiplied by the target number of units, as this was considered the probable outcome. See the Grants of Plan-Based Awards Table for the target number of units for 2023. |
Summary Compensation Table
| (4) Represents cash amounts awarded by the Compensation Committee and paid to NEOs under the 2023 AICP or the OHA Pool for Mr. August. Mr. Thomson's amount also includes the MFUs grant date award value of $1,600,250. See our CD&A and the Grants of Plan-Based Awards Table for more details regarding the workings of these plans. These amounts also include amounts elected, if any, to be deferred under the Supplemental Savings Plan. See the Nonqualified Deferred Compensation Table for further details. |
Summary Compensation Table
| (5) The following types of compensation are included in the "All Other Compensation" column for 2023: |
Summary Compensation Table
| NAME | CONTRIBUTIONS TO RETIREMENT PROGRAM | RETIREMENT PROGRAM LIMIT BONUS(a) | MATCHING CONTRIBUTIONS TO STOCK PURCHASE PLAN(b) | MATCHING GIFTS TO CHARITABLE ORGANIZATIONS(c) | CARRIED INTEREST DISTRIBUTIONS | FIXED SUPPLEMENTAL PAYMENT ALLOWANCE | PERQUISITES AND OTHER PERSONAL BENEFITS(d) | TOTAL | | Robert W. Sharps | $43,500 | $5,391 | $4,000 | $25,000 | $— | $— | $13,943 | $91,834 | | Jennifer B. Dardis | $43,500 | $5,391 | $4,000 | $25,000 | $— | $— | $13,712 | $91,603 | | Glenn R. August | $43,500 | $5,391 | $ — | $25,000 | $11,997,457 | $— | $11,281 | $12,082,629 | | Justin Thomson | | $27,995 | $ — | $ — | $— | $1,373,465 | $4,206 | $1,405,666 | | Eric L. Veiel | $43,500 | $5,391 | $4,000 | $25,000 | $— | $— | $15,033 | $92,924 |
Summary Compensation Table
| 64 | T. Rowe Price Group |
Summary Compensation Table
| (a) Cash compensation for the amount calculated under the U.S. retirement program that could not be credited to their retirement accounts in 2023 due to the contribution limits imposed under Section 415 of the Internal Revenue Code. For Mr. Thomson, the amount represents cash paid in lieu of a contribution to the UK pension program as result of a Fixed Protection election he made with the UK tax authorities, which required him to opt out of the UK pension program. This amount is based on the contribution formula in the pension program and is equal to the amount he would have received had he stayed in the pension program. |
Summary Compensation Table
| (b) Matching contributions paid under our ESPP offered to all employees of Price Group and its subsidiaries, other than OHA employees. |
Summary Compensation Table
| (c) NEOs, directors, and all employees of Price Group and its subsidiaries are eligible to have personal gifts up to an annual limit to qualified charitable organizations matched by our sponsored T. Rowe Price Foundation, in the case of U.S. employees, and Price Group, in the case of employees outside the U.S. For 2023, all of the NEOs were eligible to have up to $25,000 matched. |
Summary Compensation Table
| (d) Costs incurred by Price Group under programs available to all senior officers, including the NEOs, for executive health benefits and parking, as well as costs covered by Price Group related to spousal participation in events held in connection with the Price Group Board meetings. For Mr. August, the amount includes costs incurred by a Price Group subsidiary related to services provided to unconsolidated OHA affiliated entities in which Mr. August has a controlling partnership stake. |
2023 Grants of Plan-Based Awards Table
2023 Grants of Plan-Based Awards Table The following table provides information concerning each plan-based award granted in 2023 to the executive officers named in the Summary Compensation Table and other information regarding their grants.(1)
2023 Grants of Plan-Based Awards Table
| | | DATE OF COMPENSATION COMMITTEE MEETING AT | NUMBER OF NON-EQUITY INCENTIVE PLAN UNITS | ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(2) | | ESTIMATED POSSIBLE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(3) | | GRANT DATE FAIR VALUE | | | | WHICH GRANT | GRANTED | TARGET | MAXIMUM | TARGET | MAXIMUM | OF STOCK | | NAME | GRANT DATE | WAS APPROVED | (#) | ($) | ($) | (#) | (#) | AWARDS(4) | | Robert W. Sharps | 2/6/2023 | | | | $12,679,000 | | | | | | 12/5/2023 | 12/4/2023 | | | | 50,722 | 50,722 | $5,100,097 | | Jennifer B. Dardis | 2/6/2023 | | | | $6,340,000 | | | | | | 12/5/2023 | 12/4/2023 | | | | 12,682 | 12,682 | $1,275,175 | | Justin Thomson | 2/6/2023 | | | | $6,340,000 | | | | | | 12/5/2023 | 12/4/2023 | 126,739 | $1,600,250(5) | | 15,915 | 15,915 | $1,600,253 | | Eric L. Veiel | 2/6/2023 | | | | $10,566,000 | | | | | | 12/5/2023 | 12/4/2023 | | | | 29,836 | 29,836 | $3,000,010 |
2023 Grants of Plan-Based Awards Table
| (1) Includes only those columns relating to plan-based awards granted during 2023. All other columns have been omitted. Mr. August did not participate in the 2023 AICP and was not granted any equity awards in 2023. |
2023 Grants of Plan-Based Awards Table
| (2) The maximum represents the highest possible amount that could have been paid to each of these individuals under the 2023 AICP based on our 2023 audited financial statements. The Compensation Committee has discretion to award no bonus under this program or to award up to the maximum bonus. As a result, there is no minimum amount payable even if performance goals are met. For 2023, the Compensation Committee awarded less than the maximum amount to the NEOs and the actual amount awarded has been disclosed in the Summary Compensation Table under "Non-Equity Incentive Plan Compensation." See our CD&A for additional information regarding the AICP. |
2023 Grants of Plan-Based Awards Table
| (3) Represents both time-based RSUs and performance-based RSUs granted as part of the Company's annual equity incentive program from its 2020 Plan. The annual grant value awarded to the NEOs, except for Mr. Thomson, is equally split between time-based RSUs and performance-based RSUs. The time-based RSU vesting occurs 33% on each of December 10, 2024, December 10, 2025 and December 10, 2026. The performance-based RSUs are subject to a performance-based vesting threshold with a three-year performance period, which for the December 2023 grant will run from January 1, 2024 to December 31, 2026. For each performance-based RSU, the target payout represents the number of RSUs to be earned by the NEO if the Company's operating margin for the performance period is at least 100% of the average operating margin of a designated peer group. The Company's operating margin performance below this target threshold results in forfeiture of some or all of the performance-based RSUs. The performance-based RSUs earned by the NEO are then subject to time-based vesting, which occurs 50% on December 10, 2027, and December 8, 2028. Dividends on time-based RSUs are paid during the vesting period and for performance-based RSUs are accrued during the performance period and are only paid on earned units. Additional information related to these performance-based RSUs, including a list of companies in the designated peer group, are included in our CD&A. The grant agreements include a provision that allows for the continued vesting of the grant, from the date of separation if certain age and service criteria are met for the NEOs. |
2023 Grants of Plan-Based Awards Table
| (4) Represents the grant date fair value of the time-based RSUs and performance-based RSUs granted in 2023 in accordance with FASB ASC Topic 718. The grant date fair value of the awards was measured using the market price per share of Price Group common stock on the date of grant multiplied by the target number of units noted in the table, as this was considered the probable outcome. |
2023 Grants of Plan-Based Awards Table
| (5) Represents the mutual fund units awarded to Mr. Thomson in 2023. The mutual fund units award value of $1,600,250 was converted to 126,739 units based on the net asset value of the hypothetical investments on the grant date. The award value will be adjusted up or down in accordance with the basket of hypothetical investments the units are indexed against and settled in cash at the end of the vesting period. |
2023 Grants of Plan-Based Awards Table
| 2024 Proxy Statement | 65 |
Outstanding Equity Awards Table at December 31, 2023(1)
Outstanding Equity Awards Table at December 31, 2023(1) The following table shows information concerning equity incentive awards outstanding at December 31, 2023, for each NEO. The grant agreements for all unexercisable option awards and unvested stock awards include a provision that allows for continued vesting from the date of separation utilizing a tiered approach with three different age and service criteria, each having separate periods of continued vesting. The provision was modified in 2021 for 2021 grants and thereafter to allow continued vesting for all unvested awards to all associates who meet certain age and service criteria.
Outstanding Equity Awards Table at December 31, 2023(1)
| | | OPTION AWARDS | | | STOCK AWARDS | | | | | | | | | | | | EQUITY | | | | | | | | | MARKET | INCENTIVE | | | | | | | | NUMBER | VALUE OF | PLAN | EQUITY | | | | | | | OF SHARES | SHARES | AWARDS: | INCENTIVE | | | | NUMBER OF | | | OR UNITS | OR UNITS | NUMBER OF | PLAN AWARDS: | | | | SECURITIES | | | OF STOCK | OF STOCK | UNEARNED | MARKET VALUE | | | | UNDERLYING | | | THAT | THAT | UNITS | OF UNEARNED | | | | UNEXERCISED | OPTION | OPTION | HAVE NOT | HAVE NOT | THAT HAVE | UNITS THAT | | | GRANT | OPTIONS: | EXERCISE | EXPIRATION | VESTED | VESTED | NOT VESTED | HAVE NOT | | NAME | DATE | EXERCISABLE | PRICE | DATE | (#) | ($)(2) | (#) | VESTED ($)(2) | | Robert W. Sharps | 2/19/2015 | 1,254 | $79.71 | 2/19/2025 | — | — | — | — | | | 12/11/2018 | — | | | 8,911(3a) | $959,626(3a) | — | — | | | 12/3/2019 | — | | | 10,245(3b) | $1,103,284(3b) | — | — | | | 12/8/2020 | — | | | — | — | 18,118(4a) | $1,951,127(4a) | | | 12/7/2021 | — | | | 5,591(5a) | $602,095(5a) | 16,772(4b) | $1,806,177(4b) | | | 12/6/2022 | — | | | 14,836(5b) | $1,597,689(5b) | 22,254(4c) | $2,396,533(4c) | | | 12/5/2023 | — | | | 25,361(5c) | $2,731,126(5c) | 25,361(4d) | $2,731,126(4d) | | Jennifer B. Dardis | 12/3/2019 | — | | | 745(5a) | $80,229(5a) | — | — | | | 12/8/2020 | — | | | 1,306(5b) | $140,643(5b) | — | — | | | 12/7/2021 | — | | | 980(5a) | $105,536(5a) | 2,939(4b) | $316,501(4b) | | | 12/6/2022 | — | | | 3,709(5b) | $399,422(5b) | 5,564(4c) | $599,187(4c) | | | 12/5/2023 | — | | | 6,341(5c) | $682,862(5c) | 6,341(4d) | $682,862(4d) | | Justin Thomson | 9/9/2014 | 11,969 | $77.24 | 9/9/2024 | — | — | — | — | | | 2/19/2015 | 13,530 | $79.71 | 2/19/2025 | — | — | — | — | | | 9/10/2015 | 13,201 | $69.84 | 9/10/2025 | — | — | — | — | | | 12/3/2019 | — | | | 3,254(5a) | $350,423(5a) | — | — | | | 12/8/2020 | — | | | 6,006(5b) | $646,786(5b) | — | — | | | 12/7/2021 | — | | | 2,326(5a) | $250,487(5a) | 6,978(4b) | $751,461(4b) | | | 12/6/2022 | — | | | — | — | 15,813(4c) | $1,702,902(4c) | | | 12/5/2023 | — | | | — | — | 15,915(4d) | $1,713,886(4d) | | Eric L. Veiel | 12/3/2019 | — | | | 6,520(3b) | $702,139(3b) | | — | | | 12/8/2020 | — | | | — | — | 11,426(4a) | $1,230,466(4a) | | | 12/7/2021 | — | | | 3,428(5a) | $369,161(5a) | 10,284(4b) | $1,107,484(4b) | | | 12/6/2022 | — | | | 8,655(5b) | $932,057(5b) | 12,982(4c) | $1,398,032(4c) | | | 12/5/2023 | — | | | 14,918(5c) | $1,606,519(5c) | 14,918(4d) | $1,606,519(4d) |
Outstanding Equity Awards Table at December 31, 2023(1)
| (1) Includes only those columns that related to outstanding equity awards at December 31, 2023. All other columns have been omitted. Mr. August does not have any outstanding equity awards, so he has been excluded from the table. |
Outstanding Equity Awards Table at December 31, 2023(1)
| (2) The market value of these stock units was calculated using the closing market price per share of Price Group's common stock on December 31, 2023. |
Outstanding Equity Awards Table at December 31, 2023(1)
| (3) For each performance-based RSU award earned and not vested at December 31, 2023, the following table includes the date of the meeting or unanimous consent at which the Compensation Committee certified that the performance threshold was met, the awards' performance period, and the awards remaining vesting schedule. |
Outstanding Equity Awards Table at December 31, 2023(1)
| | | PERFORMANCE | | REMAINING | | | | DATE | PERIOD | PERFORMANCE | PERCENTAGE | | | FOOTNOTE | CERTIFIED | START DATE | PERIOD END DATE | VESTING | VEST DATES | | 3a | Feb-2020 | 1/1/2019 | 12/31/2019 | 100% | 2/28/2024 | | 3b | Feb-2023 | 1/1/2020 | 12/31/2022 | 100% | 12/10/2024 |
Outstanding Equity Awards Table at December 31, 2023(1)
| 66 | T. Rowe Price Group |
Outstanding Equity Awards Table at December 31, 2023(1)
| (4) For each performance-based RSU award unearned and not vested at December 31, 2023, the following table includes the award's performance period, and the award's remaining vesting schedule. In 2023, all our NEOs received 50% of their equity award value in performance-based RSUs with a three-year performance period, which, if earned, would vest in 2026 and 2027. |
Outstanding Equity Awards Table at December 31, 2023(1)
| | | PERFORMANCE | | REMAINING | | | | | DATE | PERIOD | PERFORMANCE | PERCENTAGE | | | | FOOTNOTE | CERTIFIED | START DATE | PERIOD END DATE | VESTING | VEST DATES | | | 4a | Feb-2024 | 1/1/2021 | 12/31/2023 | 50% | 12/10/2024 | 12/10/2025 | | 4b | N/A | 1/1/2022 | 12/31/2024 | 50% | 12/10/2025 | 12/10/2026 | | 4c | N/A | 1/1/2023 | 12/31/2025 | 50% | 12/10/2026 | 12/10/2027 | | 4d | N/A | 1/1/2024 | 12/31/2026 | 50% | 12/10/2027 | 12/8/2028 |
Outstanding Equity Awards Table at December 31, 2023(1)
| (5) The following table represents the vesting schedules of the outstanding stock awards as of December 31, 2023. |
Outstanding Equity Awards Table at December 31, 2023(1)
| | REMAINING | | | | | | PERCENTAGE VESTING | | | VEST DATES | | 5a | 100% | 12/10/2024 | | | | 5b | 50% | 12/10/2024 | 12/10/2025 | | | 5c | 33% | 12/10/2024 | 12/10/2025 | 12/10/2026 |
Outstanding Equity Awards Table at December 31, 2023(1)
| 2024 Proxy Statement | 67 |
2023 Options Exercises and Stock Vested Table
2023 Options Exercises and Stock Vested Table The following table shows aggregate stock option exercises and restricted stock awards vesting in 2023 and the related value realized for each of the NEOs. Mr. August is omitted from the table because he does not have any outstanding equity awards.
2023 Options Exercises and Stock Vested Table
| | OPTION AWARDS | | STOCK AWARDS | | | | NUMBER OF SHARES | VALUE REALIZED | NUMBER OF SHARES | VALUE REALIZED | | NAME | ACQUIRED ON EXERCISE(1)(6) | ON EXERCISE(2) | ACQUIRED ON VESTING(6) | ON VESTING | | Robert W. Sharps | 2,757 | $128,939 | 44,196(3)(4) | $4,589,972(3)(4) | | Jennifer B. Dardis | — | $— | 4,884(4) | $488,107(4) | | Justin Thomson | 35,907 | $1,408,531 | 12,278(5) | $1,211,917(5) | | Eric L. Veiel | — | $— | 24,157(4) | $2,414,251(4) |
2023 Options Exercises and Stock Vested Table
| (1) Represents the total number of shares underlying the exercised stock options. |
2023 Options Exercises and Stock Vested Table
| (2) Computed using the difference between the market price of Price Group's common stock on the date of exercise and the exercise price, multiplied by the number of shares acquired. |
2023 Options Exercises and Stock Vested Table
| (3) Reflects Mr. Sharp's number of shares underlying the performance-based RSUs earned and vested. The value realized for awards vesting is computed using the closing market price per share of Price Group's common stock the day before the vest date multiplied by the number of RSUs vesting. The following table shows the aggregate RSUs by Mr. Sharps listed in the table above by date of award: |
2023 Options Exercises and Stock Vested Table
| | PERFORMANCE PERIOD | | NUMBER OF SHARES | MARKET PRICE | VALUE REALIZED | | DATE OF AWARD | COMPLETION DATE | VESTING DATE | ACQUIRED ON VESTING | AT VEST | ON VESTING | | 12/6/2017 | 12/31/2018 | 2/28/2023 | 5,993 | $111.55 | $668,519 | | 12/11/2018 | 13/31/2019 | 2/28/2023 | 8,910 | $111.55 | $993,911 | | 12/3/2019 | 12/31/2022 | 12/8/2023 | 10,246 | $99.94 | $1,023,985 |
2023 Options Exercises and Stock Vested Table
| (4) The table below shows, by date of the award, the number of time-vested RSUs and value realized that are included in the table above. The value realized was computed using the closing market price per share of Price Group's common stock on the day before the vest date multiplied by the number of RSUs vesting. |
2023 Options Exercises and Stock Vested Table
| | | NUMBER OF SHARES | MARKET PRICE | VALUE REALIZED | | DATE OF AWARD | VESTING DATE | ACQUIRED ON VESTING | AT VEST | ON VESTING | | 12/11/2018 | 12/8/2023 | 6,086 | $99.94 | $608,235 | | 12/12/2018 | 12/8/2023 | 639 | $99.94 | $63,862 | | 12/3/2019 | 12/8/2023 | 745 | $99.94 | $74,455 | | 12/8/2020 | 12/8/2023 | 10,501 | $99.94 | $1,049,470 | | 12/7/2021 | 12/8/2023 | 9,997 | $99.94 | $999,100 | | 12/6/2022 | 12/8/2023 | 13,600 | $99.94 | $1,359,184 |
2023 Options Exercises and Stock Vested Table
| (5) The table below shows, by date of the award, the number of time-vested RSUs and value realized that are included in the table above. The value realized was computed using an average sales price from the Price Group common stock sold for Mr. Thomson's taxes on vest date. |
2023 Options Exercises and Stock Vested Table
| | | NUMBER OF SHARES | MARKET PRICE | VALUE REALIZED | | DATE OF AWARD | VESTING DATE | ACQUIRED ON VESTING | AT VEST | ON VESTING | | 12/11/2018 | 12/8/2023 | 3,695 | $98.71 | $364,720 | | 12/3/2019 | 12/8/2023 | 3,253 | $98.71 | $321,092 | | 12/8/2020 | 12/8/2023 | 3,004 | $98.71 | $296,514 | | 12/7/2021 | 12/8/2023 | 2,326 | $98.71 | $229,591 |
2023 Options Exercises and Stock Vested Table
| 68 | T. Rowe Price Group |
2023 Options Exercises and Stock Vested Table
| (6) The number of shares actually acquired was less than the number presented in the tables above as a result of tendering shares for payment of the exercise price and the withholding of shares to pay taxes. The total net shares received by each NEO listed in the table is as follows: |
2023 Options Exercises and Stock Vested Table
| | NET SHARES ACQUIRED | NET SHARES ACQUIRED | | NAME | ON EXERCISE | ON VESTING | | Robert W. Sharps | 1,091 | 22,848 | | Jennifer B. Dardis | — | 2,524 | | Justin Thomson | 35,907 | 12,278 | | Eric L. Veiel | — | 12,580 |
2023 Nonqualified Deferred Compensation Table
2023 Nonqualified Deferred Compensation Table The amounts in the following table represent each NEO's account activity under the Supplemental Savings Plan, which was effective on January 1, 2015.
2023 Nonqualified Deferred Compensation Table
| | EXECUTIVE’S | REGISTRANTS | AGGREGATE | AGGREGATE | AGGREGATE | | | CONTRIBUTIONS | CONTRIBUTIONS | EARNINGS IN | WITHDRAWALS/ | BALANCE AT | | NAME | IN LAST FY(1) | IN LAST FY | LAST FY(2) | DISTRIBUTIONS | LAST FYE(3) | | Robert W. Sharps | $800,000 | $— | $4,867,997 | $— | $31,967,760 | | Justin Thomson(4) | $1,709,294 | $— | $1,707,060 | $— | $27,571,542 | | Eric L. Veiel | $1,500,000 | $— | $6,279,457 | $— | $40,013,466 |
2023 Nonqualified Deferred Compensation Table
| (1) These amounts represent a portion of the bonus awarded to each NEO under the 2023 AICP and/or our 2022 AICP a portion of which was paid in 2023, are reported as Non-Equity Incentive Plan Compensation in the Summary Compensation Table. The contributions in the last FY includes $1.1 million for Justin Thomson and $1.5 million for Eric Veiel that were paid as part of the 2023 AICP and reported as Non-Equity Incentive Plan Compensation in the Summary Compensation Table for 2023. All the remaining contribution amounts and the aggregate balance at last FYE were previously reported as compensation in Summary Compensation Table for prior years. Under the Supplemental Savings Plan, beginning in 2021, certain senior officers have the opportunity to defer receipt of up to the lesser of (i) 50% of their cash incentive compensation earned for a respective calendar year during which services are provided or (ii) $2 million. Prior to 2021, these senior officers had the opportunity to defer receipt up to 100% of their cash incentive compensation earned for a respective calendar year during which services were provided. Mr. August was not eligible to participate in the Supplemental Savings Plan for 2023. |
2023 Nonqualified Deferred Compensation Table
| (2) Each participant has the ability to allocate their account balance across a number of Price funds and the flexibility to rebalance their account as often as they would like. The amounts deferred are adjusted daily based on the investments chosen by the participant and, therefore, are not above market or preferential. As such, the earnings reported in this column are not included in the Summary Compensation Table. |
2023 Nonqualified Deferred Compensation Table
| (3) These amounts represent the aggregate balances in each NEO's account as of December 31, 2023. The aggregate balance for each NEO at last fiscal year-end includes amounts previously reported as Non-Equity Incentive Plan Compensation in a prior-year Summary Compensation table. |
2023 Nonqualified Deferred Compensation Table
| (4) In addition to the above amounts related to the Supplemental Savings Plan, Mr. Thomson was granted MFUs totaling $1,600,250, on December 5, 2023. |
2023 Nonqualified Deferred Compensation Table
| 2024 Proxy Statement | 69 |
Potential Payments on Termination or Change in Control
Potential Payments on Termination or Change in Control All agreements for stock options and stock awards granted to associates from our equity incentive plans include provisions that may result in vesting acceleration of outstanding equity awards in connection with a change in control of Price Group or upon the grantee's death or termination of employment due to total disability. See the "Post-employment Payments" section of the CD&A for more details on these vesting acceleration provisions. Assuming that an event caused the acceleration of vesting of all outstanding unvested stock options and stock awards on December 31, 2023, the amount that would be realized upon the exercise of these stock options and vesting of restricted stock awards and units held by our NEOs are shown in the table below. In addition, all agreements for stock options and stock awards granted on and after December 11, 2018, include a provision that allows for continued vesting following the grantee's date of termination for a period of 24, 36, or 60 months based on one of three different combinations of age and service requirements. Agreements for awards granted to associates on or after December 7, 2021, include a provision that allows for continued vesting following the grantee's date of termination for a period of 60 months based on the participant reaching a combined age and service of 65, with a minimum age of 55 and minimum service of five years. Under the terms of Mr. August's employment agreement, he is entitled to severance benefits that are indicated in the table below under the Termination column. The amounts in the table below, with the exception of the Termination column, are calculated using the closing price of our common stock on December 31, 2023, for outstanding restricted stock awards and units and the difference between the closing price of our common stock on December 31, 2023, and the exercise price for outstanding stock options.
Potential Payments on Termination or Change in Control
| | CHANGE IN | | | | | CONTROL OR | POST-SEPARATION | | | NAME | DEATH/DISABILITY | VESTING | TERMINATION | | Robert W. Sharps | $15,878,783 | $— | $— | | Jennifer B. Dardis | $3,007,242 | $— | $— | | Glenn R. August | $* | $— | $350,000 | | Justin Thomson | $5,415,945 | $4,418,736 | $— | | Eric L. Veiel | $8,952,377 | $— | $— |
Potential Payments on Termination or Change in Control
| * Note: Pursuant to the Value Creation Agreement entered into in connection with the acquisition of OHA, in the event of a change of control, should Mr. August's employment be terminated, the Company would be required to pay $75 million to the participants thereunder. The amount which Mr. August would receive is not determinable at this time pursuant to the terms of the agreement. A copy of the Value Creation Agreement was filed with the SEC on February 24, 2022, as Exhibit 10.26 to our Annual Report on Form 10-K. |
Chief Executive Officer Pay Ratio
Chief Executive Officer Pay Ratio Our CEO pay ratio is calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining the 2023 salary and annual cash bonus paid to all associates, excluding our CEO and President, who were employed on December 31, 2023. All active associates working on a full-time, part-time, or interim basis were included in the sample. To facilitate comparison of all associates in U.S. dollars, compensation paid in foreign currencies was converted to U.S. dollars. We applied a local currency to U.S. dollar exchange rate on the monthly pay date. Each converted monthly salary was combined to determine the cumulative 2023 salary. With respect to annual cash bonuses paid to our non-U.S. associates, we applied a local currency to U.S. dollar exchange rate as of December 31, 2023. We did not make any adjustments or estimates with respect to salary, nor did we annualize the compensation for associates who began employment after the start of the fiscal year. Upon identifying the median associate, total compensation was calculated for this individual using the same methodology we use for our NEOs as set forth in the 2023 Summary Compensation Table. For 2023, Mr. Sharps had an annual total compensation of $12,841,931 as reflected in the Summary Compensation Table. Our median associate's 2023 annual total compensation was $157,096. Thus, Mr. Sharps' 2023 annual total compensation was 82 times that of our median associate.
Chief Executive Officer Pay Ratio
| 70 | T. Rowe Price Group |
Pay Versus Performance
Pay Versus Performance The following table summarizes the compensation actually paid to our principal executive officer (PEO) and average compensation paid to our other NEOs for the past four years. These are presented with respect to each year's NEOs as reported in the 2024, 2023, 2022 and 2021 proxy statements. Fair value amounts below are computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under generally accepted accounting principles. For any awards that are subject to performance conditions, the change in fair value is calculated based upon the probable outcome of such conditions as of the last day of the applicable year. The change in fair value in the tables below compare the fair value at the end of the applicable year with the prior year-end fair value. Total shareholder return has been calculated in a manner consistent with Item 402(v) of Regulation S-K.
Pay Versus Performance
| | | | AVERAGE | | | | | | | | | | SUMMARY | AVERAGE | VALUE OF INITIAL FIXED $100 | | | | | | SUMMARY | | COMPENSATION | COMPENSATION | INVESTMENT BASED ON: | | | | | | COMPENSATION | COMPENSATION | TABLE TOTAL | ACTUALLY PAID | TOTAL | PEER GROUP | NET | NET | | | TABLE TOTAL | ACTUALLY PAID | FOR NON-PEO | TO NON-PEO | SHAREHOLDER | SHAREHOLDER | INCOME | REVENUE(f) | | YEAR | FOR PEO | TO PEO | NEOs | NEOs | RETURN | RETURN(e) | (in millions)(1) | (in millions) | | 2023(a) | $12,841,931 | $13,510,536 | $8,077,675 | $8,191,931 | $102.91 | $174.60 | $1,835.7 | $6,460.5 | | 2022(b) | $13,838,613 | $2,999,756 | $8,430,654 | $5,616,935 | $99.67 | $129.13 | $1,449.6 | $6,488.4 | | 2021(c) | $17,127,330 | $23,404,280 | $9,119,220 | $10,768,644 | $172.50 | $175.40 | $3,098.5 | $7,671.9 | | 2020(d) | $15,337,274 | $19,367,486 | $10,969,887 | $13,917,124 | $127.89 | $118.99 | $2,523.3 | $6,206.7 |
Pay Versus Performance
| (1) Figures shown reflect net income before the impact of net income (loss) attributable to redeemable non-controlling interests for the years ended December 31, 2023, 2022, 2021 and 2020 in the amount of $47.0 million, $(108.3) million, $15.6 million and $150.6 million, respectively. |
Pay Versus Performance
| (a) The adjustments to the Summary Compensation Table totals to arrive to compensation actually paid in 2023 are outlined below. No awards were modified in 2023. These valuations assume a year-end share price of $107.69 and average vest share price of $101.79. During this period Mr. Sharps served as the PEO and Ms. Dardis, Messrs. August, Thomson, and Veiel served as the Non-PEO NEOs. |
Pay Versus Performance
| | | AVERAGE | | | | COMPENSATION FOR | | As of 12/31/2023 | PEO COMPENSATION | NON-PEO NEOs | | Summary Compensation Table—2024 Proxy | $12,841,931 | $8,077,675 | | Subtract Grant Date Fair Value of Stock Awards Granted in 2023 | $(5,100,097) | $(1,468,859) | | Add Year-End Fair Value of Stock Awards Granted and Unvested in 2023 | $5,462,252 | $1,573,162 | | Add Change in Fair Value of Prior Year Grants Unvested and Outstanding | $(132,516) | $(35,248) | | Add Change in Fair Value of Stock Awards (made in prior years) Vested as of Vesting Date in 2023 | $(230,044) | $(97,994) | | Add Dividend Equivalents Paid in 2023 | $669,010 | $143,195 | | Compensation Actually Paid in 2023 | $13,510,536 | $8,191,931 |
Pay Versus Performance
| (b) The adjustments to the Summary Compensation Table totals to arrive to compensation actually paid in 2022 are outlined below. No awards were modified in 2022. These valuations assume a year-end share price of $109.06 and average vest share price of $126.58. During this period Mr. Sharps served as the PEO and Ms. Dardis, Messrs. August, Thomson, and Veiel served as the Non-PEO NEOs. |
Pay Versus Performance
| | | AVERAGE | | | | COMPENSATION FOR | | As of 12/31/2022 | PEO COMPENSATION | NON-PEO NEOs | | Summary Compensation Table—2023 Proxy | $13,838,613 | $8,430,654 | | Subtract Grant Date Fair Value of Stock Awards Granted in 2022 | $(5,400,156) | $(1,604,741) | | Add Year-End Fair Value of Stock Awards Granted and Unvested in 2022 | $4,854,042 | $1,442,455 | | Add Change in Fair Value of Prior Year Grants Unvested and Outstanding | $(8,444,026) | $(1,999,648) | | Add Change in Fair Value of Stock Awards (made in prior years) Vested as of Vesting Date in 2022 | $(2,138,845) | $(749,289) | | Add Dividend Equivalents Paid in 2022 | $290,128 | $97,504 | | Compensation Actually Paid in 2022 | $2,999,756 | $5,616,935 |
Pay Versus Performance
| 2024 Proxy Statement | 71 |
Pay Versus Performance
| (c) The adjustments to the Summary Compensation Table totals to arrive to compensation actually paid in 2021 are outlined below. No awards were modified in 2021. These valuations assume a year-end share price of $196.64 and an average vest share price of $190.44. During this period Mr. Stromberg served as the PEO and Ms. Dardis, and former CFO Ms.Dufétel, and Messrs. Sharps, Thomson, and Veiel served as the Non-PEO NEOs. |
Pay Versus Performance
| | | AVERAGE | | | | COMPENSATION FOR | | As of 12/31/2021 | PEO COMPENSATION | NON-PEO NEOs | | Summary Compensation Table—2022 Proxy | $17,127,330 | $9,119,220 | | Subtract Grant Date Fair Value of Stock Awards Granted in 2021 | $(6,600,390) | $(3,020,250) | | Add Year-End Fair Value of Stock Awards Granted and Unvested in 2021 | $6,355,405 | $2,908,148 | | Add Change in Fair Value of Prior Year Grants Unvested and Outstanding | $4,807,722 | $1,693,273 | | Add Change in Fair Value of Stock Awards (made in prior years) Vested as of Vesting Date in 2021 | $1,110,196 | $958,513 | | Subtract Prior Year LTI Awards Forfeited in 2021 | $— | $(1,223,322) | | Add Dividend Equivalents Paid in 2021 | $604,017 | $333,062 | | Compensation Actually Paid in 2021 | $23,404,280 | $10,768,644 |
Pay Versus Performance
| (d) The adjustments to the Summary Compensation Table totals to arrive to compensation actually paid in 2020 are outlined below. No awards were modified in 2020. These valuations assume a year-end share price of $151.39 and average vest share price of $139.84. During this period Mr. Stromberg served as the PEO and Ms. Dufétel, and Messrs. Sharps, Alderson and Veiel served as the Non-PEO NEOs. |
Pay Versus Performance
| | | AVERAGE | | | | COMPENSATION FOR | | As of 12/31/2020 | PEO COMPENSATION | NON-PEO NEOs | | Summary Compensation Table—2021 Proxy | $15,337,274 | $10,969,887 | | Subtract Grant Date Fair Value of Stock Awards Granted in 2020 | $(5,900,108) | $(3,512,648) | | Add Year-End Fair Value of Stock Awards Granted and Unvested in 2020 | $5,831,543 | $3,471,827 | | Add Change in Fair Value of Prior Year Grants Unvested and Outstanding | $3,066,315 | $1,956,299 | | Add Change in Fair Value of Stock Awards (made in prior years) Vested as of Vesting Date in 2020 | $504,223 | $718,559 | | Add Dividend Equivalents Paid in 2020 | $528,239 | $313,200 | | Compensation Actually Paid in 2020 | $19,367,486 | $13,917,124 |
Pay Versus Performance
| (e) Our peer group total stockholder return is calculated with respect to the NASDAQ Asset Manager Index, which is the same peer group as reported pursuant to Item 201(e) of Regulation S-K. |
Pay Versus Performance
| (f) In no particular order, the following table outlines what we believe to be our NEO's key performance measures. These measures are highlighted on pages 51 and 52. We believe net revenue to be the most significant measure in determining the compensation of our NEOs. |
Pay Versus Performance
| KEY PERFORMANCE MEASURES | | | Assets Under Management | Investment Performance | | Net Income | Net Operating Income | | Net Revenue | Non-GAAP Diluted Earnings per Share | | Operating Margin | |
Pay Versus Performance
| 72 | T. Rowe Price Group |
Pay Versus Performance
The charts below illustrate the correlation between NEO compensation and (i) total stockholder return, (ii) net revenue, and (iii) net income attributable to T. Rowe Price Group, Inc. for 2020 through 2023. The charts below also provide a comparison between the Price Group total shareholder return against the total shareholder return of our peer group.
Pay Versus Performance
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Pay Versus Performance
| 2024 Proxy Statement | 73 |