DEF 14A of Fti Consulting, Inc

Filed Apr 19, 2024 · FY20230001140361-24-020675

Open on EDGAR

INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
The Director Nominees
The Director Nominees Our nine director nominees are a diverse group of experienced business leaders who provide unique perspectives to the Company’s business discussions and strategic plans, which we believe is critical to maintaining a high-functioning Board. Collectively, the tenure of our director nominees balances deep experience at the Company with fresh perspectives.
The Director Nominees
| 89% Independent Directors | 33% Female Directors | 22% Racially Diverse Directors | 10 Years Average Tenure (Range: 1 to 20 years) | 66 Average Age | 22% Directors Based Outside of U.S. |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR All of the nine nominees were elected as directors of the Company at the 2023 Annual Meeting. Information about each of the nine directors nominated to stand for election at the Annual Meeting is detailed below:
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| 2024 NOMINEES FOR DIRECTOR | PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| Brenda J. Bacon Independent Director Director Since: 2006 Age: 73 | Brenda J. Bacon is the past President and Chief Executive Officer of Brandywine Senior Living LLC, a premier operator of luxury senior living communities in the Mid- Atlantic region, serving in such executive officer positions from July 2004 until December 2023. Ms. Bacon co-founded Brandywine Senior Living LLC in 1996, growing the company from one location to 32 communities in seven states, with over 2,500 team members prior to its sale in December 2023. Ms. Bacon served as Chief of Management and Planning, a cabinet-level position for the state of New Jersey, under former New Jersey Governor James J. Florio from 1989 to 1993. During President William J. Clinton’s first term, Ms. Bacon was on loan to the Presidential Transition Team as co-chair for the transition of the Department of Health and Human Services. Other Public Company Directorships and Committees: Hilton Grand Vacations Inc. [Member of Audit Committee and Member of Nominating and Corporate Governance Committee] Select Current Non-Public Directorships and Committees: Argentum [Director] Rowan University [Trustee] Chair of Risk Management Committee and Member of University Advancement Committee] | | Mark S. Bartlett Independent Director Director Since: 2015 Age: 73 | Mark S. Bartlett has extensive accounting and financial services experience, having retired as a Partner of Ernst & Young LLP (“Ernst & Young”), a leading accounting firm, in June 2012. Mr. Bartlett joined Ernst & Young in 1972 and worked there until his retirement, serving as Managing Partner of the firm’s Baltimore office and Senior Client Service Partner for the Mid-Atlantic region. He is a certified public accountant. Other Public Company Directorships and Committees: T. Rowe Price Group, Inc. [Chair of Audit Committee and Member of Executive Compensation and Management Development Committee] WillScot Mobile Mini Holdings Corp. [Chair of Audit Committee and Member of Compensation Committee] Zurn Elkay Water Solutions Corporation [Lead Independent Director] [Member of Audit Committee and Member of Executive Committee] |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| 2024 NOMINEES FOR DIRECTOR | PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| Elsy Boglioli Independent Director Director Since: 2023 Age: 42 | Elsy Boglioli is the founder and has been Chief Executive Officer of Bio-Up, a consulting firm providing advisory services to companies in the healthcare technology field, since September 2019. From December 2017 to August 2019, Ms. Boglioli was Executive Vice President and Chief Operating Officer of Cellectis, a clinical-stage biopharmaceutical company focusing on cell therapies. Ms. Boglioli has extensive experience in the consulting services industry, having been employed by The Boston Consulting Group, a leading business strategy consulting services firm, from January 2006 to November 2017, holding various positions, including Partner and Managing Director and leader of its biotech-focused business in Europe, and serving as a member of its global Strategy and Biopharma Practice leadership teams. Other Foreign Public Company Directorships and Committees: GenSight Biologics S.A. [Chair of Nominating Committee] OSE Immunotherapeutics SA [Member of Nominating and Remuneration Committee] Select Current Foreign Non-Public Company Directorships and Committees: Treefrog Therapeutics [Chair] Inova.io Metafora Biosystems Womed Tech | | Claudio Costamagna Independent Director Director Since: 2012 Age: 68 | Claudio Costamagna is Chairman of CC e Soci S.r.l., a financial advisory firm he founded in June 2007, and CC Holdings S.r.l., its parent. Mr. Costamagna has extensive experience in investment banking, having served for 18 years, until April 2006, in various positions with The Goldman Sachs Group, Inc., culminating as Chairman of the Investment Banking Division in Europe, the Middle East and Africa from December 2004 to March 2006. Select Past Foreign Public Company Directorships: REVO S.p.A [Chairman] Cassa Depositi e Prestiti [Chairman] Select Current Foreign Non-Public Directorships and Committees: CC e Soci S.r.l. [Chairman] Ferragamo Finanziaria S.p.A. Finavedi S.p.A. Italiana Petroli S.p.A. Salini Costruttori S.p.A. Unopiù S.p.A. [Chairman] |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| 2024 NOMINEES FOR DIRECTOR | PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| Nicholas C. Fanandakis Independent Director Director Since: 2014 Age: 67 | Nicholas C. Fanandakis served as Senior Adviser to the Chief Executive Officer of DuPont de Nemours, Inc. (“DuPont”), a leading global research and technology-based science company, from February 2020 to December 2020. In June 2019, Mr. Fanandakis retired as an Executive Vice President of DuPont after 40 years of service. Mr. Fanandakis helped lead the company through the merger with The Dow Chemical Company and subsequent business separations. From November 2009 to June 2019, Mr. Fanandakis served as Chief Financial Officer and Executive Vice President of DuPont and led the company through major portfolio transformations. Mr. Fanandakis joined DuPont in 1979 as an accounting and business analyst. Since then, he has served in a variety of plant, marketing, product management and business director roles. Mr. Fanandakis served as Group Vice President of DuPont Applied BioSciences from 2008 to 2009. Mr. Fanandakis also served as Vice President and General Manager of DuPont Chemical Solutions Enterprise from 2003 until February 2007, when he was named Vice President of DuPont Corporate Plans. In 2023, Mr. Fanandakis received the CERT Certificate in Cybersecurity Oversight from the Software Engineering Institute of Carnegie Mellon University. Other Public Company Directorships and Committees: Duke Energy Corp. [Member of Audit Committee and Member of Finance and Risk Management Committee] ITT Inc. [Member of Audit Committee and Member of Compensation and Personnel Committee] | | Steven H. Gunby Director Since: 2014 Age: 66 | Steven H. Gunby joined the Company as its President and Chief Executive Officer on January 20, 2014. Mr. Gunby has extensive experience in the consulting services industry, having formerly been employed by The Boston Consulting Group, a leading business strategy consulting services firm, for more than 30 years, beginning in August 1983. The positions he held with The Boston Consulting Group include Global Leader, Transformation, from January 2011 to January 2014, and Chairman, North and South America, from December 2003 to December 2009. He also held other major managerial roles in his capacity as a Senior Partner and Managing Director since 1993, including serving as a member of The Boston Consulting Group’s Executive Committee. Other Public Company Directorships and Committees: Arrow Electronics, Inc. [Chairman] |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| 2024 NOMINEES FOR DIRECTOR | PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| Gerard E. Holthaus Independent Director Chairman of the Board Since: 2013 Director Since: 2004 Age: 74 | Gerard E. Holthaus has served as the Lead Independent Director of WillScot Mobile Mini Holdings Corp., a leading provider of modular space solutions in North America, since July 2020. Mr. Holthaus served as independent non-executive Chairman of the Board of Directors of WillScot Corp. from November 2017 up to and until the merger of Mobile Mini Corp. into WillScot Corp. in July 2020. Prior to November 2017, Mr. Holthaus served as non-executive Chairman of the Board of Directors of Algeco Scotsman Global S.a.r.l. and its holding company, Algeco/Scotsman Holdings S.a.r.l., a leading global provider of modular space solutions, positions that he held since April 2010. From October 2007 to April 2010, Mr. Holthaus held the positions of Executive Chairman of the Board of Directors and Chief Executive Officer of Algeco Scotsman Global S.a.r.l. Other Public Company Directorships and Committees: WillScot Mobile Mini Holdings Corp. [Lead Independent Director] [Member of Audit Committee, Chair of Nominating and Corporate Governance Committee and Member of Related Party Transactions Committee] Select Past Public Company Directorships: Algeco Scotsman Global S.a.r.l. BakerCorp International, Inc. Nesco Holdings, Inc. WillScot Corp. Select Non-Public Directorships and Committees: Loyola University Maryland [Chairman] Saint Joseph Hospital [Chairman] The Baltimore Life Companies [Chairman of the Board] [Member of Nominating and Corporate Governance Committee] | | Stephen C. Robinson Independent Director Director Since: 2022 Age: 67 | Stephen C. Robinson is a retired partner of Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), a multinational law firm. Mr. Robinson joined Skadden in 2010 practicing in its litigation department, with a focus on government enforcement and white-collar crime, until his retirement in 2021. Mr. Robinson previously served as a U.S. District Judge for the U.S. District Court for the Southern District of New York from 2003 to 2010, for which he was nominated by President George W. Bush. Prior to serving on the Southern District court, Mr. Robinson held several other positions in government. From 1998 to 2001, he served as a U.S. Attorney for the District of Connecticut, for which he was nominated by President William J. Clinton. From 1993 to 1995, he served as Principal Deputy General Counsel for the Federal Bureau of Investigation. Mr. Robinson has also served in multiple leadership and management roles, including as the Chief Executive Officer of Empower New Haven, a non-profit agency focused on urban development social services, from 2002 to 2003, and as the Chief Compliance Officer of Aetna U.S. Healthcare, a managed health care company, from 1996 to 1998. In 2023, Mr. Robinson completed the Certificate program in Navigating Emerging Technologies and More in a Complex World from the Cornell Tech Board Institute. Other Public Company Directorships and Committees: Dycom Industries, Inc. [Member of Audit Committee and Member of Finance Committee] Select Non-Public Directorships and Committees: Cornell University [Trustee] Lincoln Center for the Performing Arts [Trustee] The New York Community Trust [Trustee] Weill Cornell Medicine [Fellow] |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| 2024 NOMINEES FOR DIRECTOR | PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE |
INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
| Laureen E. Seeger Independent Director Director Since: 2016 Age: 62 | Laureen E. Seeger is Chief Legal Officer of the American Express Company, a diversified financial services company, having previously held the title of Executive Vice President and General Counsel from July 2014 to July 2018. From March 2006 through June 2014, Ms. Seeger served as Executive Vice President, General Counsel and Chief Compliance Officer at McKesson Corporation, a global diversified healthcare services company, where she led the Law, Public Affairs, Compliance and Corporate Secretary functions while guiding the company through complex legal and regulatory environments and contributing to its financial growth. Ms. Seeger joined McKesson in 2000 as General Counsel of its Technology Division. In this role, she provided leadership through complex merger and acquisition transactions and product evolutions while building the Law Department and enhancing client service. Select Non-Public Directorships and Committees: Central Park Conservancy [Trustee] University of Wisconsin Foundation and Alumni Association [Chair of Governance Committee] |
Functions of the Nominating, Corporate Governance and Social Responsibility Committee
| ■ | identifies and qualifies the annual slate of directors for nomination by the Board; | | ■ | reviews non-employee director compensation and recommends changes to the Board for approval; | | ■ | assesses the independence of directors for the Board and Committees; | | ■ | identifies and qualifies the candidates for Chairman of the Board and for membership and chairmanship of the Committees for election by the Board; | | ■ | identifies and qualifies candidates to fill vacancies occurring between annual meetings of shareholders for election by the Board; | | ■ | monitors compliance with, and reviews proposed changes to, our Corporate Governance Guidelines, the Charters of the Committee, and other policies and practices relating to corporate governance for submission to the Board for approval; | | ■ | monitors and reviews responses to shareholder communications with non-management directors together with the independent Chairman of the Board or presiding director, as applicable; | | ■ | oversees the process for director education; | | ■ | oversees the process for Board and Committee annual self-evaluations; | | ■ | oversees the process for performance evaluations of our executive officers in conjunction with our independent Chairman of |
COMPENSATION OF NON-EMPLOYEE DIRECTORS AND POLICY ON NON-EMPLOYEE DIRECTOR EQUITY OWNERSHIP
COMPENSATION OF NON-EMPLOYEE DIRECTORS AND POLICY ON NON-EMPLOYEE DIRECTOR EQUITY OWNERSHIP
Non-Employee Director Compensation
Non-Employee Director Compensation The following table describes the components of non-employee director compensation for 2023:
Non-Employee Director Compensation
| COMPENSATION ELEMENTS | 2023 DIRECTOR COMPENSATION VALUES (1) (5) ($) | ALTERNATIVE FORMS OF PAYMENT | | Annual Retainer: (2) (5) (6) | 50,000 | Cash or Deferred Stock Units | | Annual Committee Chair Fees: (2) (5) | 10,000 — Chair of Audit Committee 7,500 — Chair of Compensation Committee 5,000 — Chair of Nominating, Corporate Governance and Social Responsibility Committee | Cash or Deferred Stock Units | | Additional Annual Non-Employee Chairman of the Board Fee: (2) (5) | 200,000 | Cash or Deferred Stock Units | | Annual Equity Award: (2) (3) (4) (5) (6) | 250,000 | Restricted Stock, Restricted Stock Units, Deferred Restricted Stock Units or Cash |
Non-Employee Director Compensation
| (1) Continuing non-employee directors receive payment of the annual retainer and annual equity award, and Chairman of the Board or Committee Chair fee, if applicable, as of the date of each annual meeting of shareholders. A new non-employee director receives a prorated annual retainer and equity award upon first being elected to the Board other than at an annual meeting. A non-employee director, who is appointed as a chair other than following an annual meeting, receives a prorated non-executive Chairman of the Board or Committee Chair fee, as applicable. |
Non-Employee Director Compensation
| (2) U.S. non-employee directors are permitted to voluntarily defer annual retainer payments (including any annual fee to the non-executive Chairman of the Board or a Committee Chair) and/or annual equity compensation awards in the form of deferred stock units or deferred restricted stock units, respectively. Deferred stock units awarded on account of deferred annual retainer and Chairman of the Board and/or Committee Chair fees are vested in full on the grant date. Deferred restricted stock units granted on account of deferred annual equity compensation awards vest in full on the first anniversary of the grant date unless vesting is accelerated as described in footnote (4) below. Each deferred stock unit and deferred restricted stock unit represents the right to receive one share of Common Stock upon the earliest of (i) a separation from service event, (ii) an elected payment date and (iii) certain other permissible payment events, in each case, in accordance with Section 409A (“Code Section 409A”) of the U.S. Internal Revenue Code of 1986, as amended. |
Non-Employee Director Compensation
| (3) The annual equity award, unless deferred, is in the form of shares of restricted stock in the case of U.S. non-employee directors and restricted stock units in the case of non-U.S. non-employee directors. Each restricted stock unit represents the right to receive one share of Common Stock upon vesting. Annual equity awards are non-transferable and vest in full on the first anniversary of the grant date unless vesting is accelerated as described in footnote (4) below. |
Non-Employee Director Compensation
| (4) All unvested shares of restricted stock and restricted stock units will immediately vest in full upon a non-employee director’s (i) death, (ii) “Disability” (as defined in the Director Plan), (iii) cessation of service within one year following a Change in Control unless other accommodations are made with respect to such awards (iv) cessation of service at the expiration of a director’s term due to the Company’s failure to renominate such director for service on the Board (other than for “Cause” (as determined by the Board, in its good-faith discretion), due to the request of such director or as a result of a voluntary resignation) or (v) cessation of service due to failure of the Company’s shareholders to elect such director for service on the Board (other than for “Cause” (as determined by the Board, in its good-faith discretion)). |
Non-Employee Director Compensation
| (5) The number of (i) deferred stock units awarded to a non-employee director as annual retainer compensation (including any annual fee to the non-executive Chairman of the Board or a Committee Chair) and (ii) shares of restricted stock, restricted stock units and deferred restricted stock units awarded to a non-employee director as annual equity compensation, in each case will be determined by dividing (a) the U.S. dollar value of such award by (b) the closing price per share of Common Stock reported on the NYSE for the grant date. Fractional restricted shares, restricted stock units, deferred stock units and deferred restricted share units are rounded down to the nearest whole share. |
Non-Employee Director Compensation
| (6) If we do not have sufficient shares of Common Stock authorized under our shareholder-approved equity compensation plan to fund annual retainer and equity awards in stock-based awards, such awards will be funded in cash. The payout of such cash amounts will be subject to the terms of the applicable deferred compensation payment and vesting and accelerated vesting conditions, including the requirements of Code Section 409A. Such cash amounts generally will accrue interest at the rate of 6% per annum. |
Director Summary Compensation Table
| NAME | ANNUAL RETAINER AND CHAIR FEE EARNED OR PAID IN CASH ($) (a) | STOCK AWARDS (1) ($) (b) | OPTION AWARDS (1) ($) (c) | ALL OTHER COMPENSATION (2) ($) (d) | TOTAL ($) (e) |
SHAREHOLDER NOMINEES FOR DIRECTOR
SHAREHOLDER NOMINEES FOR DIRECTOR We did not receive any notices of shareholder nominees for director prior to the deadline for 2024 nominations required by our Bylaws and described in our proxy statement for our 2023 Annual Meeting. Under our current Bylaws, nominations for director at an annual meeting of shareholders may be made by a shareholder who is (a) a shareholder of record on the record date set by the Board for the purpose of determining shareholders entitled to vote at the annual meeting at the time of giving of notice by the shareholder and at the time of the annual meeting (and any postponement or adjournment thereof) and (b) entitled to vote at the meeting in the election of each individual so nominated or on any other business; provided such shareholder delivers notice along with the additional information and materials required by our current Bylaws (which includes information required under Rule 14a-19) to the Corporate Secretary at our principal executive office of the Company located at 555 12th Street NW, Suite 700, Washington, D.C. 20004, not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting of shareholders. For the annual meeting of shareholders in 2025, you must deliver this notice no earlier than November 20, 2024 and no later than December 20, 2024. In the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting of shareholders, or if no annual meeting of shareholders was held in the preceding year, notice by the shareholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the 10th day following the day on which public announcement of the date of such meeting is first made. In the event that the number of directors to be elected to the Board is increased and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting, a shareholder’s notice will also be considered timely but only with respect to nominees for any new positions created by such increase, if it is delivered to the Corporate Secretary at our principal executive office, not later than 5:00 p.m., Eastern Time, on the 10th day following the day on which we first make such public announcement. The postponement or adjournment of an annual meeting (or the public announcement thereof) shall not commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. You may obtain a copy of our Bylaws, without charge, from our Corporate Secretary at FTI Consulting, Inc., 16701 Melford Blvd., Suite 200, Bowie, MD 20715, phone no. +1.410.951.4867, or by email to FTI2024annualmeeting@fticonsulting.com. We filed a copy of our Bylaws, adopted on February 20, 2023, with the SEC on February 21, 2023 as an exhibit to our Current Report on Form 8-K dated February 20, 2023. Our Bylaws are incorporated by reference as an exhibit to our 2023 Annual Report filed with the SEC on February 22, 2024.
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
| NON-DIRECTOR EXECUTIVE OFFICERS and KEY EMPLOYEES | PRINCIPAL BUSINESS EXPERIENCE |
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
| | Ajay Sabherwal Chief Financial Officer Officer Since: 2016 Age: 58 | Ajay Sabherwal joined the Company in August 2016 as Chief Financial Officer. He held the additional office of Treasurer from March 2022 to December 2022. From July 2010 to August 2016, Mr. Sabherwal was the Executive Vice President and Chief Financial Officer of FairPoint Communications, Inc., a provider of telecommunications services primarily in Northern New England. Mr. Sabherwal is a former director of Prairie Provident Resources Inc., a foreign public company. | | | Paul Linton Chief Strategy and Transformation Officer Officer Since: 2014 Age: 53 | Paul Linton joined the Company in August 2014 as Chief Strategy and Transformation Officer. From September 2000 to August 2014, Mr. Linton was a management consultant with The Boston Consulting Group, a leading business strategy consulting services firm, where he was most recently a Partner and Managing Director. | | | Curtis P. Lu General Counsel Officer Since: 2015 Age: 58 | Curtis Lu joined the Company in June 2015 as General Counsel. From June 2010 to June 2015, Mr. Lu was the General Counsel of LightSquared, Inc., a wireless Internet services company. Mr. Lu began his legal career at Latham & Watkins LLP, an international law firm, where he was a litigation partner. | | | Holly Paul Chief Human Resources Officer Officer Since: 2014 Age: 53 | Holly Paul joined the Company in August 2014 as Chief Human Resources Officer. From 2013 to August 2014, Ms. Paul was Senior Vice President and Chief Human Resources Officer of Vocus, Inc., a publicly traded company offering marketing and public relations software. Prior to 2013, Ms. Paul spent 18 years with PricewaterhouseCoopers LLP, a global public accounting firm, serving in various roles, ultimately rising to become the firm’s most senior talent acquisition leader. | | | Brendan J. Keating Chief Accounting Officer and Controller Officer Since: 2019 Age: 60 | Brendan Keating has held the positions of Chief Accounting Officer and Controller since March 2019. From September 2011 to March 2019, Mr. Keating was Vice President – Assistant Controller of the Company. Mr. Keating served as a Senior Vice President of Accounting Policy and Reporting at Discovery, Inc., a mass media company, from 2008 to 2011. | | | Matthew Pachman Vice President – Chief Risk and Compliance Officer Officer Since: 2012 Age: 59 | Matthew Pachman has held the position of Vice President – Chief Risk and Compliance Officer since June 2016. Prior to assuming the duties of Chief Risk Officer of the Company in February 2015, Mr. Pachman also held the position of Vice President and Chief Ethics and Compliance Officer from July 2012 to June 2016. Prior to joining FTI Consulting, Mr. Pachman built and led compliance programs at various other companies, including Altegrity Risk International, Inc., a global risk consulting and information services company, the Federal Home Loan Mortgage Corporation, a public government-sponsored enterprise operating in the secondary mortgage market, and MCI Communications Corp., a telecommunications company. |
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
Our officers are elected by, and serve at the pleasure of, our Board, subject to the terms of the written employment arrangements that we have with them.
2023 Company Performance Update
| (1) See Appendix A for the definitions of earnings per diluted share (“EPS”), as adjusted (“Adjusted EPS”), EBITDA, as adjusted (“Adjusted EBITDA”), and other financial measures used for financial reporting purposes referred to in this proxy statement (“Proxy Statement”), which have not been presented or prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) that are considered not in conformity with GAAP (“non-GAAP”), and the reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the reasons management believes these non-GAAP financial measures provide useful information to investors. For purposes of determining annual incentive pay (“AIP”) for the year ended December 31, 2023 (“2023 AIP”), the Compensation Committee further adjusted the Adjusted EBITDA financial performance metric defined in Appendix A to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. The Compensation Committee did not further adjust the Adjusted EPS financial performance metric defined in Appendix A to determine 2023 AIP. See the section of this CD&A titled “— 2023 Pay Outcomes — 2023 Annual Incentive Pay — Financial Metrics” beginning on page 51 and Appendix B for the definitions of the non-GAAP financial measures, including the description of the further adjustment to Adjusted EBITDA, for determining 2023 AIP of our NEOs and the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures. |
Our Executive Compensation Practices
| ■ | PAY-FOR-PERFORMANCE ALIGNMENT: Total at-risk compensation for our CEO and other NEOs was 88.9% and 66.7%, respectively, in 2023. | | ■ | FOCUS ON FINANCIAL PERFORMANCE: The weighting of AIP opportunity based on financial performance metrics for our CEO and other NEOs was 75% and 66.7%, respectively, in 2023. | | ■ | FOCUS ON INDIVIDUAL PERFORMANCE: The individual performance component of AIP opportunity for our CEO and other NEOs was 25% and 33.3%, respectively, in 2023. The CD&A provides detailed quantitative and qualitative disclosures to support the individual performance component of our AIP opportunity for our CEO and other NEOs. | | ■ | PERFORMANCE-BASED EQUITY AWARDS: Percentage of performance-based restricted stock units (“Performance RSU”) in the long-term incentive pay (“LTIP”) opportunity to our CEO and other NEOs was 66.7% and 60%, respectively, in 2023, with the balance in awards of restricted stock units (“RSU”) in the case of our CEO and restricted stock awards (“RSA”) in the case of our other NEOs. | | ■ | RIGOROUS PERFORMANCE LTIP METRIC: Performance metric based on FTI Consulting’s TSR compared with the TSR of the adjusted S&P 500 Index (“Relative TSR”), at target and maximum was set at the 55th and 80th percentiles for our CEO, and the 50th and 75th percentiles for the other NEOs, respectively, in 2023. | | ■ | CAPPED LTIP PAYOUTS FOR NEGATIVE COMPANY RELATIVE TSR: CEO and other NEO payouts when the Company’s TSR is negative are capped at 100% of target. | | ■ | PEER GROUP BENCHMARKING: CEO compensation is benchmarked to chief executive officer compensation of our peer group companies every other year. |
CEO COMPENSATION
| AWARD | FORM | PERFORMANCE METRICS | 2023 FINAL PAY OUTCOME |
CEO COMPENSATION
| Annual Cash Base Salary | Fixed Cash $1,000,000 | N/A | $1,000,000 | | Total AIP Opportunity at Target $2,000,000 (2.0x Annual Cash Base Salary) | | | | | AIP | AIP Target Opportunity as % of Annual Cash Base Salary Threshold – 100% ($1,000,000) Target – 200% ($2,000,000) Maximum – 300% ($3,000,000) | Metric as % of Total AIP Opportunity Adjusted EPS – 37.5% Adjusted EBITDA – 37.5% Individual Performance – 25% | $2,474,965 (124% of Target) | | | Form of Payment as % of Total AIP Cash – 75% RSAs – 25% | | | | Total LTIP Opportunity at Target $6,000,000 (6.0x Annual Cash Base Salary) | | | | | LTIP | Time-Based RSUs | | | | | Time-Based RSU Opportunity as % of Total LTIP Opportunity at Target 33.33% ($2,000,000) | N/A | Three-Year Pro Rata Vesting Period | | | Performance RSUs | | | | | Performance RSU Opportunity as % of Total LTIP Opportunity at Target 66.67% ($4,000,000) (“CEO Performance RSU Target”) Performance RSU Payout Opportunity as % of CEO Performance RSU Target Threshold – 50% ($2,000,000) Target – 100% ($4,000,000) Maximum – 150% ($6,000,000) | Company Relative TSR Threshold – 25th Percentile Target – 55th Percentile Maximum – 80th Percentile | Three-Year Performance Period Ending 12/31/2025 |
NEOs (Other than CEO) COMPENSATION
| AWARD | FORM | PERFORMANCE METRICS | 2023 FINAL PAY OUTCOME |
NEOs (Other than CEO) COMPENSATION
| Annual Cash Base Salary | Fixed Cash $700,000 | N/A | $700,000 | | Total AIP Opportunity at Target $700,000 (1.0x Annual Cash Base Salary) | | | | | AIP | AIP Target Opportunity as % of Annual Cash Base Salary Threshold – 50% ($350,000) Target – 100% ($700,000) Maximum – 150% ($1,050,000) | Metric as % of Total AIP Opportunity Adjusted EPS – 33.33% Adjusted EBITDA – 33.33% Individual Performance – 33.34% | CFO, CSTO, GC, CHRO $886,654 (127% of Target) | | | Form of Payment as % of Total AIP Cash – 100% | | | | Total LTIP Opportunity at Target $700,000 (1.0x Annual Cash Base Salary) | | | | | LTIP | Time-Based RSAs | | | | | Time-Based RSA Opportunity as % of Total LTIP Opportunity at Target 40% ($280,000) | N/A | Three-Year Pro Rata Vesting Period | | | Performance RSUs | | | | | Performance RSU Opportunity as % of Total LTIP Opportunity at Target 60% ($420,000) (“NEO Performance RSU Target”) Performance RSU Payout Opportunity as % of NEO Performance RSU Target Threshold – 50% ($210,000) Target – 100% ($420,000) Maximum – 150% ($630,000) | Company Relative TSR Threshold – 25th Percentile Target – 50th Percentile Maximum – 75th Percentile | Three-Year Performance Period Ending 12/31/2025 |
Most Recent Say-on-Pay Vote Results
Most Recent Say-on-Pay Vote Results At our annual meeting of shareholders on June 7, 2023 (the “2023 Annual Meeting”), our shareholders expressed support for our executive compensation program with approximately 88% of the votes cast in favor of our say-on-pay proposal approving NEO compensation for the year ended December 31, 2022. Our 2023 compensation decisions were informed by shareholder discussions conducted in late 2022 and early 2023, facilitated through outreach to our top 20 non-executive shareholders, representing approximately 70% of our outstanding shares. Discussions with our shareholders reinforced our belief that the changes we have adopted over the past several years were responsive to our shareholders’ feedback. See the sections of this CD&A titled “— What Guides Our Program — Compensation Philosophy” and “— What Guides Our Program — How We Make Compensation Decisions — The Decision-Making Process” for discussions of our guiding compensation principles on page 44 and page 45, respectively. Following our 2023 Annual Meeting, feedback on the compensation changes we enacted over the past several years was positive. We continued to reach out to our top 20 non-executive shareholders throughout 2023, representing an aggregate of approximately 70% of our outstanding shares of Common Stock as of December 31, 2023, to offer them one-on-one meetings where we discussed key topics, including our executive compensation program, equity compensation, disclosure, peer group selection, and environmental-, social- and governance-related topics. See the sections of this CD&A titled “— What Guides Our Program — Compensation Philosophy” and “— What Guides Our Program — How We Make Compensation Decisions — Role of Peer Companies” for discussions of our guiding compensation principles and our peer group on page 44 and beginning on page 47, respectively.
Compensation Governance Practices
| ✔ | Appropriate balance between short-term and long-term pay. |
Compensation Governance Practices
| ✔ | No automatic acceleration of equity awards on a “Change in Control” (as defined in the applicable equity compensation plan). |
Compensation Philosophy
| ■ | ATTRACTING executive officer candidates with competitive compensation opportunities that are appropriate for our business, size and geographic diversity. | | ■ | MAINTAINING CONTINUITY of executive management by delivering opportunities for our NEOs to earn competitive compensation. | | ■ | Structuring our executive compensation program to ALIGN THE INTERESTS of our NEOs with those of our shareholders by encouraging solid corporate growth and the prudent management of risks and rewards. | | ■ | BALANCING the emphasis on short-term and long-term compensation opportunities, focusing on the attainment of financial and strategic goals that contribute to the creation of shareholder value. | | ■ | Placing a significant percentage of each NEO’s total compensation opportunity AT-RISK and subject to the attainment of financial- or market-based goals that drive or measure the creation of shareholder value. | | ■ | Paying for PERFORMANCE. | | ■ | Managing our executive compensation program for our non-CEO executives CONSISTENTLY among our participating NEOs. | | ■ | LIMITING PERQUISITES and other non-performance-based entitlements. |
The Decision-Making Process
| ■ Management/Board review business strategy, Company performance and competitive environment ■ Compensation Committee evaluates executive compensation financial performance metrics against Company financial results | ■ Every other year, Compensation Committee selects peer group with advice of its independent compensation adviser ■ Every other year, independent compensation adviser conducts a competitive market analysis of chief executive officer and other executive officer compensation of the applicable peer group companies and reviews and discusses with Compensation Committee | ■ Management makes executive compensation program design and payment opportunity recommendations for upcoming year ■ Compensation Committee develops or adopts changes to the annual executive compensation program with advice from its independent compensation adviser | ■ Compensation Committee consults the Audit Committee to evaluate Company financial performance prior to formal announcement of year-end financial results ■ Compensation Committee evaluates CEO individual performance ■ CEO evaluates individual performance of other NEOs and advises Compensation Committee ■ Compensation Committee establishes payments for applicable bonus year ■ Compensation Committee considers the latest competitive market analysis of chief executive officer compensation of the applicable peer group companies to inform CEO compensation decisions ■ Management presents budget for upcoming fiscal year ■ Compensation Committee finalizes executive compensation program design and payment opportunities for current fiscal year with advice from its independent compensation adviser ■ Compensation Committee sets CEO annual individual performance goals ■ CEO sets annual individual performance goals of other NEOs |
Role of the Compensation Advisers
Role of the Compensation Advisers Under the Charter of the Compensation Committee, the Compensation Committee is authorized to select, retain and direct the activities, and terminate the services, of compensation advisers, as well as approve fees and expenses of such advisers. During 2023, the Compensation Committee retained the services of Pearl Meyer & Partners, LLC (“Pearl Meyer”) to provide advice to the Compensation Committee on certain executive compensation matters. In addition, during 2023, the Compensation Committee consulted Dechert LLP (“Dechert”) on certain legal aspects of executive officer compensation. During 2023, the Compensation Committee requested advice on a variety of issues from Pearl Meyer, including our annual and long-term executive incentive compensation program structures, performance metrics and individual award levels, CEO pay-for-performance, equity award accelerated vesting terms, non-employee director compensation, the voting policies of proxy advisers and the composition of our compensation peer group, as well as our say-on-pay proposal and other compensation disclosures included in our proxy statement for our 2023 Annual Meeting. Neither Pearl Meyer nor the Company provided any services to the other during 2023, apart from the advisory services provided by Pearl Meyer to the Compensation Committee. Dechert provided services to the Company as outside executive compensation counsel. In such capacity, Dechert advised the Company regarding general governance inquiries related to executive compensation matters, periodic securities law advice regarding equity grant practices and employment matters, periodic tax advice relating to non-qualified deferred compensation and equity grants, and general advice regarding our say-on-pay proposal and other compensation disclosures in our proxy statement for our 2023 Annual Meeting. The Company routinely is engaged by Dechert to provide services to it or its clients in the ordinary course of our business. After consideration of the above factors, including any relationships with any Compensation Committee member or executive officer of the Company, if applicable, as well as information supplied by Pearl Meyer, including its independence letter, the Compensation Committee concluded that Pearl Meyer was independent and not subject to any conflicts of interest when providing services to the Compensation Committee. After considering Dechert’s relationships with the Company and its subsidiaries, and Dechert’s conflicts of interest policy and practices, the Compensation Committee concluded that Dechert is not independent but determined that it offers unique, well-rounded perspectives on our executive officer compensation and other matters and that the legal advice it provides is aligned with the interests of the Company. The Compensation Committee currently intends to continue to consult with Pearl Meyer and applicable outside counsel on executive officer compensation and other matters from time to time.
Role of Peer Companies
Role of Peer Companies The Compensation Committee periodically reviews various data sources to understand the competitive pay environment. One such data source is a custom peer group of publicly traded companies. The Compensation Committee determined that the development of a peer group and the related competitive market analysis would occur every other year and for 2022 and 2023 the applicable analysis was conducted in 2021:
Role of Peer Companies
| Peer Group Development and Pay Study Conducted during: | Informs NEO Pay Decisions with Respect to the Following Years: | Process and Outcome Disclosed in the Following Years: | | 2021 | 2022 and 2023 | 2023 and 2024 |
Role of Peer Companies
Accordingly, 2023 executive compensation decisions were informed by a competitive market analysis conducted by the Compensation Committee’s independent compensation adviser, Pearl Meyer, during 2021 using an updated peer group that was also recommended by Pearl Meyer and approved by the Compensation Committee in 2021. Regarding the executive compensation peer group, the following companies that were included in the previous peer group prior to 2021 have been acquired and, therefore, no longer qualify for inclusion in the final group of companies selected as FTI Consulting’s executive compensation peer group in 2021 (the “2021 Peer Group”): Eaton Vance Corp., Legg Mason, Inc. and Navigant Consulting, Inc. In addition to the above changes, Pearl Meyer recommended and the Compensation Committee approved the following changes for 2021 Peer Group purposes:
Role of Peer Companies
| Removed Greenhill & Co., Inc. Oppenheimer Holdings, Inc. Piper Sandler Companies | Added Booz Allen Hamilton Holding Corporation Exponent, Inc. ICF International, Inc. Jefferies Financial Group, Inc. LPL Financial Holdings, Inc. |
Role of Peer Companies
The following companies constitute the 2021 Peer Group that was used for the 2021 competitive market study and to inform 2022 and 2023 NEO compensation decisions:
Role of Peer Companies
| Affiliated Managers Group, Inc. Artisan Partners Asset Management Inc. Booz Allen Hamilton Holding Corporation CRA International, Inc. Evercore Inc. | Franklin Resources, Inc. Houlihan Lokey, Inc. Huron Consulting Group, Inc. ICF International, Inc. Invesco Ltd. Jefferies Financial Group, Inc. | Lazard Ltd. LPL Financial Holdings, Inc. Moelis & Co. PJT Partners, Inc. Stifel Financial Corp. T. Rowe Price Group, Inc. |
Role of Peer Companies
While developing the peer group, Pearl Meyer and the Compensation Committee reviewed and considered a variety of factors, including the following:
Role of Peer Companies
| ■ | Data Availability: publicly traded companies with comprehensive pay disclosures in the U.S. | | ■ | Industry Relevance: expert consulting, professional services and financial services | | ■ | Size Relevance: revenues, earnings before taxes, number of employees | | ■ | Valuation Characteristics: market cap, P/E ratio | | ■ | Peer Group Overlap: companies that disclose FTI Consulting as a peer, companies included by third parties as “peers” for FTI Consulting |
Role of Peer Companies
The below chart ranks the Company as compared with the 2021 Peer Group by revenues and market capitalization as of April 30, 2021.
FTI Consulting vs. 2021 Peer Group (1)
FTI Consulting vs. 2021 Peer Group (1)
FTI Consulting vs. 2021 Peer Group (1)
| (1) Reflects trailing 12-month revenues (LTM) as of April 1, 2021 (the year in which the 2021 Peer Group was developed). |
FTI Consulting vs. 2021 Peer Group (1)
The Compensation Committee will continue to use a variety of sources, including compensation surveys and Peer Company data, to establish market practices and will consider this data when assessing the competitiveness of the Company’s executive compensation. Although the type of review may change over time, the Compensation Committee generally reviews salaries, annual incentives, long-term incentives, incentive designs, severance practices, change in control practices, employment contract provisions and other pay features as needed to assess the Company’s pay programs and consider whether they support the Company’s strategic objectives and remain competitive with the market. When setting 2023 CEO compensation, the Compensation Committee continued to reference the 2021 Peer Group and study results through April 2021, which included the findings that the elements of our executive compensation program were substantially consistent with those offered by such peers. Our CEO’s target compensation for 2023 ranked between the 25th and 50th percentiles as compared with the 2021 Peer Group, and our other NEOs’ target compensation for 2023 ranked below the 25th percentile as compared with the 2021 Peer Group. Regarding 2023 NEO compensation decisions, the Compensation Committee did not rely solely on data from the competitive market analysis of the 2021 Peer Group that was performed in 2021. Furthermore, the Compensation Committee does not target a specific competitive position versus the market in determining the compensation of such other NEOs. The Compensation Committee believes that, because of the Company’s diverse mix of services, strictly benchmarking against the 2021 Peer Group would not provide a meaningful basis for establishing compensation. While the Compensation Committee believes the data from the 2021 competitive market analysis of the 2021 Peer Group is helpful in assessing our competitive position, it also considers a variety of other factors when making pay decisions, including overall Company performance, individual NEO performance and internal equity among such other NEOs. The Compensation Committee will continue to periodically consider the executive compensation information of the Company’s self-selected peer group, as well as competitor pay, alongside our pay-for-performance and long-term value creation objectives, in determining the compensation for our executive officers that best aligns compensation and shareholder interests in the future.
Components of Compensation
| | PAY COMPONENT | RATIONALE | | Annual | Cash Base Salary | ■ Attracts and retains qualified talent | | | | ■ Fairly compensates the executive based on experience, skills, responsibilities and abilities | | | | ■ Provides only fixed source of cash compensation | | | AIP Opportunity | ■ Motivates and rewards executive to achieve key financial and individual objectives | | | | ■ Aligns executive and shareholder interests through performance measures that contribute to shareholder value creation | | | | ■ Measures executive performance on accomplishment of pre-established strategic objectives | | Long-Term | Performance RSU Opportunity | ■ Incentivizes and rewards for strong market performance as measured over a three-year period | | | | ■ Three-year performance measurement period supports our leadership retention/stability objectives | | | Time-Based RSU (CEO) and Time- Based RSA (Other NEOs) Opportunity | ■ Aligns interest of the executive with those of shareholders and provides a direct link to growth in shareholder value | | | | ■ Three-year vesting period supports our leadership retention/stability objectives |
2023 Annual Incentive Pay
2023 Annual Incentive Pay
AIP PROGRAM DESIGN — CEO
AIP PROGRAM DESIGN — CEO
AIP PROGRAM DESIGN — CEO
| PERFORMANCE METRICS (1) | OPERATING AND STRATEGIC OBJECTIVES | RATIONAL FOR USING PERFORMANCE METRIC | % OF TOTAL AIP OPPORTUNITY BASED ON PERFORMANCE METRICS | TARGET AIP OPPORTUNITY AS % OF ANNUAL CASH BASE SALARY |
AIP PROGRAM DESIGN — CEO
| Adjusted EBITDA | Deliver Adjusted EBITDA growth | Measures the Company’s operating performance, excluding the impact of certain items (1) | 37.5% | 200.0% | | Adjusted EPS | Deliver Adjusted EPS growth | Measures the Company’s ability to generate income per share, excluding the impact of certain items, which is indicative of shareholder value (1) | 37.5% | | | Individual Performance | Incentivize executives to achieve pre-established short-term and long-term strategic and business objectives | Measures CEO success | 25.0% | |
AIP PROGRAM DESIGN — Other NEOs
AIP PROGRAM DESIGN — Other NEOs
AIP PROGRAM DESIGN — Other NEOs
| PERFORMANCE METRICS (1) | OPERATIONAL OR STRATEGIC OBJECTIVES | RATIONAL FOR USING PERFORMANCE METRIC | % OF TOTAL AIP OPPORTUNITY BASED ON PERFORMANCE METRICS | TARGET AIP OPPORTUNITY AS % OF ANNUAL CASH BASE SALARY |
AIP PROGRAM DESIGN — Other NEOs
| Adjusted EBITDA | Deliver Adjusted EBITDA growth | Measures the Company’s operating performance, excluding the impact of certain items (1) | 33.3% | 100.0% | | Adjusted EPS | Deliver Adjusted EPS growth | Measures the Company’s ability to generate income per share, excluding the impact of certain items, which is indicative of shareholder value (1) | 33.3% | | | Individual Performance | Incentivize executives to achieve pre-established short-term and long-term strategic and business objectives | Measures individual NEO success | 33.4% | |
AIP PROGRAM DESIGN — Other NEOs
| (1) For purposes of determining 2023 AIP, the Compensation Committee further adjusted the Adjusted EBITDA financial performance metric defined in Appendix A to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. The Compensation Committee did not further adjust the Adjusted EPS financial performance metric defined in Appendix A to determine 2023 AIP. See the section of this CD&A titled “— 2023 Pay Outcomes — 2023 Annual Incentive Pay — Financial Metrics” beginning on page 51 and Appendix B for the definitions of the non-GAAP financial measures, including the description of the further adjustment to Adjusted EBITDA, for determining 2023 AIP of our NEOs, and the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures. |
AIP PROGRAM DESIGN — Other NEOs
During the first quarter of 2023, the Compensation Committee set the targets for each of the financial metrics applicable to all NEOs and outlined the key individual performance goals for our CEO for the 2023 bonus year. For the other NEOs, the CEO established their individual performance goals in consultation with them and with the direction of the Compensation Committee. Financial Metrics During the first quarter of 2023, the Compensation Committee set the target for the financial metrics of Adjusted EBITDA and Adjusted EPS and outlined the key individual performance goals for our CEO for the 2023 bonus year. For other NEOs, the CEO established their individual performance goals in consultation with them and with the direction of the Compensation Committee. The financial metrics were set taking into account the Company’s strategic initiatives, historical financial performance, internal budgeting for the relevant year, external guidance, and expected business and market conditions. The Compensation Committee believes that the financial metrics and AIP opportunities set by the Compensation Committee for 2023 AIP focused the NEOs’ attention on factors that drive business growth and shareholder value. The 2023 target for Adjusted EBITDA of $397.9 million was set above the actual Adjusted EBITDA of $357.6 million reported by the Company for the year ended December 31, 2022 and was set at the same time as the 2023 target for Adjusted EPS. The threshold and maximum Adjusted EBITDA metrics were set at 20% below and above the target at $318.5 million and $477.5 million, respectively. The 2023 target for Adjusted EPS of $7.25 was set above the actual Adjusted EPS of $6.77 reported by the Company for the year ended December 31, 2022. The 2023 target for Adjusted EPS was established at the midpoint of the external guidance range announced by the Company on February 24, 2023. The threshold and maximum Adjusted EPS metrics were set at 20% below and above the target at $5.80 and $8.70, respectively. For purposes of determining 2023 AIP, the financial performance metrics of Adjusted EBITDA and Adjusted EPS are defined consistently with the definitions of similarly titled financial measures that are considered non-GAAP reported in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2023 (the “2023 Form 10-K”), subject to further adjustments, and the Adjusted EBITDA financial performance metric was further adjusted, as follows:
AIP PROGRAM DESIGN — Other NEOs
| ■ | We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt, subject to further adjustments, in the sole discretion of the Compensation Committee, to exclude: (1) operating results, including costs and expenses, of operations (including minority interest) discontinued, sold or acquired; (2) the impact of foreign exchange rates different from budget (i.e. – constant currency costs); (3) costs and expenses related to financing activity and gains or losses related to financing activity; (4) unplanned severance costs and (5) litigation settlements and costs. | | ■ | We define Adjusted EPS, a non-GAAP financial measure, as earnings per diluted share, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business, subject to further adjustments, in the sole discretion of the Compensation Committee, to: (1) exclude operating results, including costs and expenses, of operations (including minority interest) discontinued, sold or acquired; (2) exclude the impact of foreign exchange rates different from budget (i.e. – constant currency costs); (3) exclude costs and expenses related to financing activity and gains or losses related to financing activity; (4) exclude unplanned severance costs; (5) exclude litigation settlements and costs; (6) exclude any gain or loss reflected in the Company’s Consolidated Statement of Income as a result of any sale or other disposition of any business or business segment of the Company in part or in its entirety completed in 2023, to the extent that such gain or loss is not already excluded from Adjusted EPS and (7) include, in the event of a sale or disposition of part of any business or business segment of the Company completed in 2023, the minority interest of such business or business segment subsequent to the closing of the sale or disposition. In the event of any sale or other disposition of any business or business segment of the Company in its entirety completed in 2023, the Adjusted EPS performance metrics may be reduced by an amount equal to the budgeted operating income for such business or business segment for the portion of 2023 subsequent to the closing of such transaction. | | ■ | For the year ended December 31, 2023, accrued interest income on forgivable loans is recorded as a reduction to the “direct costs of revenues” and “selling, general and administrative expenses” line items of operating expenses, which had a positive impact on the calculation of Adjusted EBITDA. Previously, these transactions were recorded to “interest income and other.” The change has been applied on a prospective basis and prior period financial information has not been recast. For purposes of determining 2023 AIP, the Compensation Committee further adjusted the Adjusted EBITDA performance metric to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. | | ■ | The change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the annual and quarterly period ended December 31, 2023 had no impact on Adjusted EPS and no further adjustments to Adjusted EPS were authorized by the Compensation Committee for 2023 AIP purposes. | | ■ | See Appendix B for the reconciliations of Adjusted EBITDA (as further adjusted) and Adjusted EPS for 2023 AIP purposes to the most directly comparable GAAP financial measures. |
AIP PROGRAM DESIGN — Other NEOs
At the time that the Company’s initial full-year guidance was provided on February 23, 2023, the 2023 AIP financial performance metrics set by the Compensation Committee were informed by:
AIP PROGRAM DESIGN — Other NEOs
| ■ | An expectation for revenue growth in all business segments. With the additional capacity added in 2022, the Company anticipated that newly hired billable professionals would contribute to revenue growth. | | ■ | An expectation for headcount growth in 2023 to be similar to levels achieved in 2022. In 2022, the Company experienced 12.2% billable headcount growth. | | ■ | An expectation for restructuring activity to remain elevated through 2023. The expectation for a continuation of elevated activity in our Restructuring practice within our Corporate Finance & Restructuring (“Corporate Finance”) segment, which is our highest-margin business. | | ■ | An expectation for mergers and acquisition (“M&A”) activity to be slower in 2023. The expectation for a slowing of the M&A market, which drives demand for M&A-related Antitrust services in our Economic Consulting segment, “Second Request” services in our Technology segment and Transactions services in our Corporate Finance segment. | | ■ | An expectation for growth in Selling, General and Administrative (“SG&A”) expenses to normalize. From 2019 through 2021, |
AIP PROGRAM DESIGN — Other NEOs
| | certain aspects of SG&A, such as travel and entertainment (“T&E”) expenses, remained depressed due to the pandemic. This trend reversed in 2022, when we saw a return of such T&E expenses, with SG&A expenses increasing 19% compared with 2021. Our expectation was that in 2023, SG&A expenses would neither revert to the lower levels we saw during the pandemic nor grow at the rate we experienced in 2022. | | ■ | An expectation for a considerably higher tax rate for 2023 compared with 2022. At the time of the initial announcement of full-year guidance on February 23, 2023, the Company expected our 2023 tax rate to range between 24.0% and 26.0%, which compared with 20.9% in 2022. |
AIP PROGRAM DESIGN — Other NEOs
Individual Performance Metrics For 2023 AIP, 25% of the CEO’s 2023 AIP was contingent upon achieving individual performance goals specific to the CEO, and one-third of each other NEO’s 2023 AIP was contingent upon achieving individual performance goals specific to such NEO. For the CEO, these goals were established by the Compensation Committee in February 2023 and communicated to him. For all other NEOs, the CEO established the goals with review and input from the applicable NEO and with the direction of the Compensation Committee. At the end of 2023, the CEO assessed the performance of each NEO and presented his recommendations on the NEO’s individual performance to the Compensation Committee in the first quarter of 2024 for approval. The Compensation Committee exclusively assesses the CEO’s performance. As part of the assessment of the individual performance portion of the 2023 AIP, the Compensation Committee has the authority to reduce the actual amount payable to the CEO and each other NEO under their awards. For 2023, the CEO and each other NEO were awarded 2023 AIP for individual performance at 150% of target. These awards are reflective of both the Company’s financial performance in 2023 and the CEO’s and other NEOs’ tangible evidence of accomplishing or exceeding individual performance goals. The 2023 performance assessments — noting both 2023 goals and achievements for the CEO and each other NEO — are detailed on the following pages:
2023 Annual Incentive Payout Amounts
2023 Annual Incentive Payout Amounts The tables below set forth the 2023 AIP paid out to the CEO and each other NEO based on the achievement of Adjusted EBITDA, Adjusted EPS and individual performance goals:
2023 Annual Incentive Payout Amounts
| CEO | Adjusted EBITDA * (1) Payout as % of Target (37.5% of Total AIP Opportunity) | | | Adjusted EPS (1) Payout as % of Target (37.5% of Total AIP Opportunity) | | | Individual Performance Payout as % of Target (25.0% of Total AIP Opportunity) | | | Total Target Incentive Opportunity | 2023 Earned AIP (2) (3) | 2023 AIP Payout | | | Threshold $318.3 M | Target $397.9 M | Maximum $477.5 M | Threshold $5.80 | Target $7.25 | Maximum $8.70 | Threshold $250,000 | Target $500,000 | Maximum $750,000 | ($) | ($) | (% of Target) | | Steven H. Gunby | 50 | 100 | 150 | 50 | 100 | 150 | 50 | 100 | 150 | 2,000,000 | 2,474,965 | 124 |
2023 Annual Incentive Payout Amounts
| Other NEOs | Adjusted EBITDA * (1) Payout as % of Target (33.3% of Total AIP Opportunity) | | | Adjusted EPS (1) Payout as % of Target (33.3% of Total AIP Opportunity) | | | Individual Performance Payout as % of Target (33.4% of Total AIP Opportunity) | | | Total Target Incentive Opportunity | 2023 Earned AIP (2) (3) | 2023 AIP Payout | | | Threshold $318.3 M | Target $397.9 M | Maximum $477.5 M | Threshold $5.80 | Target $7.25 | Maximum $8.70 | Threshold $116,666 | Target $233,334 | Maximum $350,000 | ($) | ($) | (% of Target) | | Ajay Sabherwal | 50 | 100 | 150 | 50 | 100 | 150 | 50 | 100 | 150 | 700,000 | 886,654 | 127 | | Paul Linton | 50 | 100 | 150 | 50 | 100 | 150 | 50 | 100 | 150 | 700,000 | 886,654 | 127 | | Curtis P. Lu | 50 | 100 | 150 | 50 | 100 | 150 | 50 | 100 | 150 | 700,000 | 886,654 | 127 | | Holly Paul | 50 | 100 | 150 | 50 | 100 | 150 | 50 | 100 | 150 | 700,000 | 886,654 | 127 |
2023 Annual Incentive Payout Amounts
| * For purposes of the above tables, “M” = millions. |
2023 Annual Incentive Payout Amounts
| (1) See Appendix A for the definitions of Adjusted EBITDA, Adjusted EPS and other non-GAAP financial measures used for financial reporting purposes referred to in this CD&A and the reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the reasons management believes these non-GAAP financial measures provide useful information to investors. For purpose of determining 2023 AIP, the Compensation Committee further adjusted the Adjusted EBITDA financial performance metric defined in Appendix A to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. The Compensation Committee did not further adjust the Adjusted EPS financial performance metric defined in Appendix A to determine 2023 AIP. See the section of this CD&A titled “— 2023 Pay Outcomes — 2023 Annual Incentive Pay — Financial Metrics” beginning on page 51 and Appendix B for the description of the further adjustment to Adjusted EBITDA for determining 2023 AIP of our NEOs and the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures. |
2023 Annual Incentive Payout Amounts
| (2) The Compensation Committee approved actual Adjusted EBITDA and Adjusted EPS for the year ended December 31, 2023 of $420.4 million, or 105.7% of target, and $7.71, or 106.3% of target, respectively, and CEO and other NEO individual performance of 150% of target. |
2023 Annual Incentive Payout Amounts
| (3) Mr. Gunby’s 2023 AIP was paid 75% in cash and 25% in the form of an RSA granted on March 6, 2024, which will vest on March 6, 2025, the first anniversary of the date of grant. The other NEOs’ 2023 AIP was paid 100% in cash. |
Annual Long-Term Incentive Pay
Annual Long-Term Incentive Pay The annual LTIP opportunity is intended to incentivize strong financial performance over a three-year measurement period aligning NEOs’ interests with those of our shareholders. Additionally, the LTIP acts as a retention tool by providing the executives with equity ownership that vests or is earned over multiple years.
LTIP Awards for Year Ended December 31, 2023
LTIP Awards for Year Ended December 31, 2023 LTIP grants for the year ended December 31, 2023 (“2023 LTIP”) were awarded in the form of Performance RSUs to all NEOs, and time-based RSUs (to the CEO) and time-based RSAs (to the other NEOs). Our CEO and other NEOs may earn 2023 LTIP based on Relative TSR performance for the three-year performance measurement period beginning January 1, 2023 and ending December 31, 2025. In the case of our CEO, Performance RSUs represented 66.67% and time-based RSUs represented 33.33% of the total 2023 LTIP opportunity. In the case of our other NEOs, Performance RSUs represented 60% and time-based RSAs represented 40% of the total 2023. For 2023 LTIP, our CEO’s, on the one hand, and each other NEO’s, on the other hand, total target opportunity was six times (6.0x) annual cash base salary and one times (1.0x) annual cash base salary, respectively. Payouts to our NEOs under the 2023 LTIP Performance RSUs when our Relative TSR is negative are capped at 100% of target. Linear interpolation will be applied to determine the Performance RSUs earned as 2023 LTIP for performance between payout levels. The date of grant of the awards of the time-based RSUs (to our CEO) and time-based RSAs (to other NEOs) and Performance RSUs to all NEOs as 2023 LTIP was March 8, 2023.
LTIP Awards for Year Ended December 31, 2023
| % OF TARGET SHARES GRANTED | RELATIVE TSR PERFORMANCE PERCENTILE | RELATIVE TSR PERFORMANCE PERCENTILE | | | CEO | Other NEOs | | Threshold – 50% | 25th | 25th | | Target – 100% | 55th | 50th | | Maximum – 150% | 80th | 75th |
LTIP Awards for Year Ended December 31, 2023
The CEO and other NEOs were awarded the following 2023 LTIP:
LTIP Awards for Year Ended December 31, 2023
| NAME | 2023 PERFORMANCE RSUS (1) | | | 2023 TIME-BASED RSUS (CEO)/TIME- BASED RSAS (OTHER NEOs) | | | THRESHOLD (50%) | TARGET (100%) | MAXIMUM (150%) | | | Steven H. Gunby | | | | | | Number of LTIP Awards | 9,702 | 19,405 | 29,107 | 11,069 | | Grant Date Fair Value | $2,000,000 | $4,000,000 | $6,000,000 | $2,000,000 | | Ajay Sabherwal | | | | | | Number of LTIP Awards | 996 | 1,992 | 2,988 | 1,549 | | Grant Date Fair Value | $210,000 | $420,000 | $630,000 | $280,000 | | Paul Linton | | | | | | Number of LTIP Awards | 996 | 1,992 | 2,988 | 1,549 | | Grant Date Fair Value | $210,000 | $420,000 | $630,000 | $280,000 | | Curtis P. Lu | | | | | | Number of LTIP Awards | 996 | 1,992 | 2,988 | 1,549 | | Grant Date Fair Value | $210,000 | $420,000 | $630,000 | $280,000 | | Holly Paul | | | | | | Number of LTIP Awards | 996 | 1,992 | 2,988 | 1,549 | | Grant Date Fair Value | $210,000 | $420,000 | $630,000 | $280,000 |
LTIP Awards for Year Ended December 31, 2023
| (1) See “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 1 — Description of Business and Summary of Significant Accounting Policies — Share-Based Compensation” and “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 7 — Share-Based Compensation” of the 2023 Form 10-K for a discussion of the Monte Carlo simulation method used to determine the number of Performance RSUs subject to the performance-based 2023 LTIP awards. |
Performance of LTIP Awards Awarded for the Year Ended December 31, 2021 as Measured as of December 31, 2023
Performance of LTIP Awards Awarded for the Year Ended December 31, 2021 as Measured as of December 31, 2023 The performance measurement period for the LTIP awards subject to financial metrics based on Relative TSR performance granted for the year ended December 31, 2021 (“2021 LTIP”) began on January 1, 2021 and ended on December 31, 2023 (the “2021 LTIP Awards”). For the measurement period, FTI Consulting achieved Relative TSR at the 90th percentile resulting in our CEO and other NEOs earning a percentage payout of approximately 150% of the shares of Common Stock at target. The following table sets forth the number of shares of Common Stock earned by the CEO and other NEOs under the 2021 LTIP Awards, certified as final by the Compensation Committee on February 19, 2024:
Performance of LTIP Awards Awarded for the Year Ended December 31, 2021 as Measured as of December 31, 2023
| NAME | PAYOUT PERCENTAGE OF TARGET AS OF DECEMBER 31, 2023 | PAYOUT METHOD (# OF COMMON SHARES) | | Steven H. Gunby | 150% | 32,677 | | Ajay Sabherwal | 150% | 3,833 | | Paul Linton | 150% | 3,833 | | Curtis P. Lu | 150% | 3,833 | | Holly Paul | 150% | 3,833 |
Timing of Equity Grants
Timing of Equity Grants The Compensation Committee is the administrator of our equity compensation plans and programs. The Compensation Committee makes annual equity grants to our NEOs in the form of stock-based awards, including time-based RSUs (to CEO) or time-based RSAs (to other NEOs) and Performance RSUs (to all NEOs). Since 2017, the Compensation Committee has not granted stock options or SARs as equity compensation to NEOs. When granted, option awards have been made at an exercise price equal to or exceeding the fair market value per share of our Common Stock on the grant date and have a 10-year term. The Compensation Committee typically makes annual short-term and long-term incentive compensation pay decisions during the first quarter of the year to allow dissemination of our fourth-quarter and year-end earnings announcements prior to the grant dates of such awards. In some cases, the Compensation Committee will grant awards that are contingent, which conditions precedent may include commencement of employment or the execution and delivery of employment or other documents, or may authorize awards as of future grant dates. The equity awards to the NEOs are subject to contractual provisions governing the acceleration of vesting on specified events. The Compensation Committee has not delegated its authority to make equity awards or prescribe the terms (including vesting terms) to our management.
Termination Payments
Termination Payments We have entered into employment arrangements with our CEO and other NEOs that broadly provide for the parameters of their employment with the Company and entitle them to receive specified severance payments and benefits upon certain qualifying terminations of employment. Under the employment agreement with the CEO dated as of December 13, 2013, as amended from time to time (the “CEO Employment Agreement”), in connection with a termination by the Company without “Cause” or termination by the CEO with “Good Reason” (each, as defined in the CEO Employment Agreement), subject to the execution of a release of claims (a “Release”), the CEO generally will be eligible to receive (i) pro rata cash AIP for the year of termination, (a) for the financial components of AIP, an amount determined based on the actual performance of operating financial performance metric(s) established for the year of termination (with no exercise of negative discretion), payable when such AIP is paid to other executives of the Company plus (b) based on individual performance (if an applicable performance metric for the year of termination), in an amount determined based on the CEO’s individual performance AIP awarded and paid in the year prior to the year of termination, payable within two and one-half months following the effective date of the CEO’s termination and (ii) a lump sum cash severance payment equal to two times (2.0x) the sum of the CEO’s annual cash base salary and target bonus, payable within 15 days of execution of a Release. The pro rata cash AIP component of the foregoing severance package described in clause (i) above is also payable in connection with a termination of the CEO as a result of the CEO’s “Disability” (as defined in the CEO Employment Agreement) and death. The foregoing severance opportunity is consistent with survey market data provided by the compensation adviser. In connection with the 2023 LTIP equity award grant process, the Compensation Committee, in consultation with its outside compensation adviser, determined that it was appropriate to add new retirement vesting protections to the LTIP awards for our CEO with respect to LTIP awards granted to our CEO in 2023 and later years. “Retirement” has been defined in the LTIP equity award agreements to mean the CEO’s voluntary resignation of service with the Company for any reason on or after April 1, 2025 where circumstances constituting grounds for the Company to terminate the CEO’s Service for Cause (as defined in the CEO Employment Agreement) do not exist. Under such awards, in the event of our CEO’s termination of employment due to retirement, unvested time-based RSUs will continue to vest and settle following the time of termination due to the CEO’s retirement in accordance with the original vesting schedule under the award agreement, subject to continued compliance with all applicable restrictive covenants. With respect to Performance RSUs granted to the CEO as LTIP in 2023 and later years, unearned and unvested Performance RSUs at the time of termination due to the CEO’s retirement prior to a Change in Control will remain outstanding and become vested (and settled) or forfeited based on the achievement of the applicable performance conditions upon the earlier to occur of the date of the original final determination for the achievement of the applicable performance conditions and a Change in Control, subject to continued compliance with all applicable restrictive covenants. If the termination of the CEO due to retirement occurs on or following a Change in Control, the unearned and unvested Performance RSUs will convert to a right to receive cash on the original final performance determination date, the date for determining achievement of the applicable performance goals will accelerate and the cash value payable to the CEO will be determined by multiplying the (x) number of such cash units by (y) the closing price per share of Common Stock reported on the NYSE for the date of the consummation of such Change in Control. In order for the CEO to be eligible for the retirement vesting protection, the CEO must provide at least six months of advance written notice of his intended retirement date and must be available to assist in succession planning efforts during such notice period. See the section titled “Information About Our Executive Officers And Compensation — Employment Agreements And Termination And Change In Control Payments — Termination Payments — Termination And Change In Control Payment Amounts” beginning on page 77 of this Proxy Statement. Under the employment letters with each of the CFO, CSTO, GC and CHRO, as amended from time to time (in each case, an “Officer Employment Letter,” and, collectively, the “Officer Employment Letters”), in connection with a termination by the Company without “Cause” or termination by such applicable executive officer with “Good Reason” (each as defined in the applicable Officer Employment Letter), subject to the execution of a Release, each such applicable executive officer generally will be entitled to one times (1.0x) annual cash base salary continuation for a period of 12 months following such termination, provided that such amount will be increased to one times (1.0x) the sum of (i) 12 months annual cash base salary plus (ii) target bonus for the year of termination, if such applicable executive officer’s employment is terminated by the Company (or its successor) without Cause or by such applicable executive officer with Good Reason during the 18-month period following a “Change in Control” (as defined in the applicable shareholder approved equity compensation plan of the Company then in effect). In addition to the foregoing, each such applicable executive officer generally will be eligible to receive pro rata cash AIP for the year of termination consisting of: (i) for the financial components of AIP, an amount determined based on the actual performance of operating financial performance metric(s) established for the year of termination (with no exercise of negative discretion), payable when such AIP is paid to other executives of the Company plus (ii) for the individual component of AIP (if an applicable performance measure for the year of termination) an amount determined based on such applicable executive officer’s individual performance awarded and paid in the year prior to the year of termination, payable within two and one-half months following the effective date of such other NEO’s termination. The severance package is also payable in connection with a termination of such applicable executive officer as a result of “Disability” (as defined in the applicable Officer Employment Letter) and death. We believe that it is in the best interests of the Company to have these employment arrangements and provide for the termination protections described above as they tie the interests of the NEOs to those of the Company, secure the services of the NEOs and serve as a deterrent to an NEO voluntarily leaving the Company’s employ for no reason (other than for the CEO’s retirement). In addition, the employment arrangements serve as consideration for the agreements of the NEOs not to compete with the Company, not to solicit employees and clients of the Company, and not to use or disclose proprietary information of the Company. For more detail on the terms and conditions of the CEO Employment Agreement and the Officer Employment Arrangements and the potential values associated with the foregoing described severance packages, see the section titled “Information About Our Executive Officers And Compensation — Employment Agreements And Termination And Change In Control Payments — Employment Arrangements” beginning on page 76 of this Proxy Statement.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table summarizes the compensation of our NEOs for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 applying the SEC’s required disclosure rules. Footnotes (2), (3) and (6) to the table describe the vesting and performance conditions associated with the stock-based awards granted in 2023 that are reported in this table, none of which vested upon grant. Performance-based awards in this table are reported at target value. An NEO may not realize any value from an equity-based award, and any realized value upon the vesting, exercise or the end of the applicable performance period may be higher or lower than reported in this table, depending upon the price per share of our Common Stock on the vesting date or Company performance for the performance period, and such differences could be significant.
SUMMARY COMPENSATION TABLE
| NAME AND PRINCIPAL POSITION | YEAR | SALARY (1) | BONUS | STOCK AWARDS (2) (3) | OPTION AWARDS | NON-EQUITY INCENTIVE PLAN COMPENSATION (1) (4) | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS | ALL OTHER COMPENSATION (1) (5) | TOTAL | | | (a) | ($) (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) | ($) (g) | ($) (h) | ($) (i) | | Steven H. Gunby (6) (7) President and Chief Executive Officer | 2023 2022 2021 | 1,000,000 1,000,000 1,000,000 | — — — | 6,499,708 6,620,594 5,033,629 | — — — | 1,856,224 1,499,721 1,862,392 | — — — | 16,632 15,372 14,616 | 9,372,564 9,135,687 7,910,637 | | Ajay Sabherwal Chief Financial Officer | 2023 2022 2021 | 700,000 671,539 600,000 | — — — | 699,873 699,909 599,931 | — — — | 886,654 699,884 762,183 | — — — | 16,632 15,372 14,616 | 2,303,159 2,086,704 1,976,730 | | Paul Linton Chief Strategy and Transformation Officer | 2023 2022 2021 | 700,000 671,539 600,000 | — — — | 699,873 699,909 599,931 | — — — | 886,654 699,884 762,183 | — — — | 16,632 15,372 14,616 | 2,303,159 2,086,704 1,976,730 | | Curtis P. Lu General Counsel | 2023 2022 2021 | 700,000 671,539 600,000 | — — — | 699,873 699,909 599,931 | — — — | 886,654 816,550 762,183 | — — — | 16,632 15,372 14,616 | 2,303,159 2,203,370 1,976,730 | | Holly Paul Chief Human Resources Officer | 2023 2022 2021 | 700,000 671,539 600,000 | — — — | 699,873 699,909 599,931 | — — — | 886,654 699,884 762,183 | — — — | 16,632 15,372 14,616 | 2,303,159 2,086,704 1,976,730 |
SUMMARY COMPENSATION TABLE
| (1) All cash compensation is presented in Columns (b), (f) and (h). |
SUMMARY COMPENSATION TABLE
| (2) The aggregate grant date fair market values of the time-based RSUs (to our CEO) and time-based RSAs (to our other NEOs) reported in Column (d) as 2023 LTIP have been computed in accordance with FASB Topic 718, Compensation — Stock Compensation. For a discussion of the assumptions and methodologies used to value the time-based RSUs and time-based RSAs, see “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 1 — Description of Business and Summary of Significant Accounting Policies — Share-Based Compensation” and “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 7 — Share-Based Compensation” of the Company’s 2023 Form 10-K. All time-based RSUs and time-based RSAs awarded as 2023 LTIP are subject to time-based pro rata annual vesting over three years beginning with the first anniversary of the grant date. For additional information, see the section of this Proxy Statement captioned “Information About Our Executive Officers And Compensation — Equity Compensation Plans—Grants of Plan-Based Awards For Fiscal Year Ended December 31, 2023” beginning on page 71 of this Proxy Statement. The following table sets forth the time-based RSUs and time-based RSAs granted as 2023 LTIP at grant date dollar values: |
SUMMARY COMPENSATION TABLE
| NAME | TIME-BASED RSUS (CEO) AND TIME-BASED RSAS (OTHER NEOS) ($) |
SUMMARY COMPENSATION TABLE
| Steven H. Gunby | 1,999,947 | | Ajay Sabherwal | 279,873 | | Paul Linton | 279,873 | | Curtis P. Lu | 279,873 | | Holly Paul | 279,873 |
SUMMARY COMPENSATION TABLE
| (3) The Performance RSUs reported in Column (d) for 2023 include the target aggregate values of the Performance RSUs awarded to each participating NEO as 2023 LTIP, based upon the probable outcome of the performance condition based on FTI Consulting’s Relative TSR, consistent with the estimate of aggregate compensation costs to be recognized over the service period, excluding the effect of estimated forfeitures. Performance RSUs awarded as 2023 LTIP measure performance based on Relative TSR over three years from January 1, 2023 through December 31, 2025. The fair value per unit of the Performance RSUs has been calculated using a Monte Carlo simulation method in accordance with FASB Topic 718 for equity awards with market-based conditions, which assesses probabilities of various outcomes of the performance market condition(s). The NEOs’ Performance RSUs have been valued using the grant date fair market value of $180.68 per share (the closing price per share reported on the NYSE for the grant date of March 8, 2023) as one of the initial inputs. The resulting fair value per Performance RSU granted to (i) our CEO was $206.13 and (ii) our other NEOs was $210.83. These values were used to calculate the number of Performance RSUs awarded to our CEO and other NEOs, respectively. For a discussion of the assumptions and methodologies used to value such awards, see “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 1 — Description of Business and Summary of Significant Accounting Policies — Share-Based Compensation” and “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 7 — Share-Based Compensation” of the Company’s 2023 Form 10-K. For additional information, see the section of this Proxy Statement captioned “Information About Our Executive Officers And Compensation — Equity Compensation Plans — Grants of Plan-Based Awards For Fiscal Year Ended December 31, 2023” beginning on page 71 of this Proxy Statement. |
SUMMARY COMPENSATION TABLE
The following table sets forth the Performance RSUs granted to our CEO and other NEOs as 2023 LTIP at target and maximum grant date dollar values:
SUMMARY COMPENSATION TABLE
| NAME | TARGET PERFORMANCE RSU VALUES ($) | MAXIMUM PERFORMANCE RSU VALUES ($) |
SUMMARY COMPENSATION TABLE
| Steven H. Gunby | 3,999,953 | 5,999,826 | | Ajay Sabherwal | 419,973 | 629,960 | | Paul Linton | 419,973 | 629,960 | | Curtis P. Lu | 419,973 | 629,960 | | Holly Paul | 419,973 | 629,960 |
SUMMARY COMPENSATION TABLE
| (4) The “Non-Equity Incentive Plan Compensation” reported in Column (f) includes the cash incentive compensation awarded as 2023 AIP in 2024. |
SUMMARY COMPENSATION TABLE
| (5) “All Other Compensation” in Column (h) includes matching contributions provided to the NEOs under the Company’s 401(k) Plan and excludes other benefits provided to the NEOs on the same basis as provided to all full-time U.S. employees of the Company. Excluding the matching contributions under the 401(k) Plan, no NEO received perquisites aggregating more than $10,000 in 2023. |
SUMMARY COMPENSATION TABLE
| (6) Column (d) includes the portion of AIP for the year ended December 31, 2022 (“2022 AIP”) that was paid to our CEO in 2023 through the award of 2,766 shares of restricted stock with a grant date fair value of $499,761 (based on the closing price per share of Common Stock of $180.68 reported on the NYSE for the grant date of March 8, 2023), which vested in full on March 8, 2024. |
SUMMARY COMPENSATION TABLE
| (7) Column (d) excludes the award of 25% of 2023 AIP paid to our CEO in 2024 through the award of 2,996 shares of restricted stock with a grant date fair value of $618,674, based on the closing price per share of Common Stock of $206.50 reported on the NYSE for the grant date of March 6, 2024, which will vest on the first anniversary of the date of grant and will be reported as compensation in Column (d) of the Summary Compensation Table for the year ending December 31, 2024. |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023 The following table provides information on (i) performance-based cash awards granted as 2023 AIP, (ii) equity-based awards granted as 2023 LTIP and (iii) RSAs granted during the year ended December 31, 2023. There can be no assurance that the grant date fair market value of these awards will ever be realized.
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| NAME | GRANT DATE | COMPENSATION COMMITTEE APPROVAL DATE | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (1) | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (2) | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR STOCK UNITS | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS | EXERCISE OR BASE PRICE OF OPTION AWARDS | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS (3) | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | | | | ($) | ($) | ($) | ($) | ($) | ($) | (#) | (#) | ($/Sh) | ($) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | | Steven H. Gunby | 2/20/23 3/8/23 3/8/23 3/8/23 | 2/20/23 3/8/23 3/8/23 3/8/23 | 1,000,000 — — — | 2,000,000 — — — | 3,000,000 — — — | — — 2,000,000 — | — — 4,000,000 — | — — 6,000,000 — | — 2,766 — 11,069 | — — — — | — — — — | — 499,761 — 1,999,947 | | Ajay Sabherwal | 2/20/23 3/8/23 3/8/23 | 2/20/23 3/8/23 3/8/23 | 350,000 — — | 700,000 — — | 1,050,000 — — | — 210,000 — | — 420,000 — | — 630,000 — | — — 1,549 | — — — | — — — | — — 279,873 | | Paul Linton | 2/20/23 3/8/23 3/8/23 | 2/20/23 3/8/23 3/8/23 | 350,000 — — | 700,000 — — | 1,050,000 — — | — 210,000 — | — 420,000 — | — 630,000 — | — — 1,549 | — — — | — — — | — — 279,873 | | Curtis P. Lu | 2/20/23 3/8/23 3/8/23 | 2/20/23 3/8/23 3/8/23 | 350,000 — — | 700,000 — — | 1,050,000 — — | — 210,000 — | — 420,000 — | — 630,000 — | — — 1,549 | — — — | — — — | — — 279,873 | | Holly Paul | 2/20/23 3/8/23 3/8/23 | 2/20/23 3/8/23 3/8/23 | 350,000 — — | 700,000 — — | 1,050,000 — — | — 210,000 — | — 420,000 — | — 630,000 — | — — 1,549 | — — — | — — — | — — 279,873 |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| (1) 2023 AIP payments were based on (i) Adjusted EPS results of $7.71, as reported in the Company’s 2023 Form 10-K, (ii) Adjusted EBITDA results of $420.4 million (as further adjusted to exclude the positive impact attributable to the change to the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the annual period ended December 31, 2023) and (ii) the individual performance of our CEO and our CFO, CSTO, GC and CHRO. Based on the above financial and individual performance results, aggregate 2023 AIP to our CEO and each of the other NEOs was as follows: |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| NAME | TOTAL (i) ($) |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| Steven H. Gunby | 2,474,965 | | Ajay Sabherwal | 886,654 | | Paul Linton | 886,654 | | Curtis P. Lu | 886,654 | | Holly Paul | 886,654 |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| (i) 2023 AIP to the CEO was paid 75% in cash and 25% through the award of 2,996 shares of restricted stock with a grant date fair value of approximately $618,674, based on the closing price per share of Common Stock of $206.50 reported on the NYSE for the grant date of March 6, 2024, which will vest on the first anniversary of the date of grant and will be reported as compensation in the Summary Compensation Table for the year ending December 31, 2024. 2023 AIP for the other NEOs was paid 100% in cash. |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| (2) Columns (f), (g) and (h) include the values of the Performance RSUs awarded to our CEO and other NEOs as 2023 LTIP based upon the threshold, target and maximum outcomes of the performance condition based on Relative TSR, consistent with the estimate of aggregate compensation costs to be recognized over the service period, excluding the effect of estimated forfeitures. Performance RSUs awarded as 2023 LTIP measure performance based on Relative TSR over three years beginning January 1, 2023 and ending December 31, 2025. The fair value per unit of the Performance RSUs has been calculated using a Monte Carlo simulation method in accordance with FASB Topic 718 for equity awards with market-based conditions. The NEOs’ Performance RSUs have been valued using the grant date fair market value of $180.68 (the closing price per share reported on the NYSE for the grant date of March 8, 2023) as one of the initial inputs. The resulting fair values per Performance RSU granted to (i) our CEO was $206.13 and (ii) each other NEO was $210.83. These values were used to calculate the number of Performance RSUs awarded to our CEO and other NEOs, respectively, as 2023 LTIP. |
Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023
| (3) Column (l) reports the aggregate grant date fair values of time-based RSUs awarded to our CEO and time-based RSAs awarded to our other NEOs as 2023 LTIP in accordance with FASB Topic 718. For a discussion of the assumptions and methodologies used to value these awards, see the discussion of stock awards contained in “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 1 — Description of Business and Summary of Significant Accounting Policies — Share-Based Compensation” and “Part II, Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 7 — Share-Based Compensation” of the Company’s 2023 Form 10-K. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table shows the number of shares covered or used as references for (i) exercisable and unexercisable stock options, (ii) unvested RSUs, RSAs and Performance RSUs, (iii) full-value cash units and (iv) cash-based performance units, if held by our NEOs on December 31, 2023:
Outstanding Equity Awards at Fiscal Year End
| Name | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Number of Shares or Full- Value Units That Have Not Vested | Market Value of Shares or Full-Value Units That Have Not Vested (1) | Equity and Non-Equity Incentive Plan Awards: Number of Unearned Shares, Full-Value Units or Other Rights That Have Not Vested | Non-Equity Incentive Plan Awards: Market OR Payout Value of Unearned Shares, Full- Value Units or Other Rights That Have Not Vested (1) | | | (#) Exercisable (a) | (#) Unexercisable (b) | (#) (c) | ($/Sh) (d) | (e) | (#) (f) | ($) (g) | (#) (h) | ($) (i) |
Outstanding Equity Awards at Fiscal Year End
| Steven H. Gunby | 75,223 (2) 74,291 (3) 78,390 (4) — — — — — — — | — — — — — — — — — — | — — — — — — — — — — | 36.87 34.33 40.36 — — — — — — — | 3/1/2025 3/1/2026 3/6/2027 — — — — — — — | — — — 3,976 (5) — 9,150 (7) — 2,766 (9) 11,069 (10) — | — — — 791,820 — 1,822,222 — 550,849 2,204,391 — | — — — — 21,784 (6) — 25,601 (8) — — 19,405 (11) | — — — — 4,338,283 — 5,098,439 — — 3,864,506 | | Ajay Sabherwal | 13,065 (4) — — — — — — | — — — — — — — | — — — — — — — | 40.36 — — — — — — | 3/6/2027 — — — — — — | — 636 (5) — 1,281 (7) — 1,549 (10) — | — 126,659 — 255,111 — 308,483 — | — — 2,555 (6) — 2,627 (8) — 1,992 (11) | — — 508,828 — 523,167 — 396,707 | | Paul Linton | 53,552 (12) 13,540 (2) 14,858 (3) 10,855 (4) — — — — — — | — — — — — — — — — — | — — — — — — — — — — | 36.75 36.87 34.33 40.36 — — — — — — | 8/25/2024 3/1/2025 3/1/2026 3/6/2027 — — — — — — | — — — — 636 (5) — 1,281 (7) — 1,549 (10) — | — — — — 126,659 — 255,111 — 308,483 — | — — — — — 2,555 (6) — 2,627 (8) — 1,992 (11) | — — — — — 508,828 — 523,167 — 396,707 | | Curtis P. Lu | 4,953 (3) 8,710 (4) — — — — — — | — — — — — — — — | — — — — — — — — | 34.33 40.36 — — — — — — | 3/1/2026 3/6/2027 — — — — — — | — — 636 (5) — 1,281 (7) — 1,549 (10) — | — — 126,659 — 255,111 — 308,483 — | — — — 2,555 (6) — 2,627 (8) — 1,992 (11) | — — — 508,828 — 523,167 — 396,707 | | Holly Paul | — — — — — — | — — — — — — | — — — — — — | — — — — — — | — — — — — — | 636 (5) — 1,281 (7) — 1,549 (10) — | 126,659 — 255,111 — 308,483 — | — 2,555 (6) — 2,627 (8) — 1,992 (11) | — 508,828 — 523,167 — 396,707 |
Outstanding Equity Awards at Fiscal Year End
| (1) All cash values in Columns (g) and (i) have been computed by multiplying $199.15 (the closing price per share of Common Stock reported by the NYSE for December 29, 2023) by the number of RSAs or RSUs that have not yet vested. |
Outstanding Equity Awards at Fiscal Year End
| (2) Represents option shares that may be acquired upon exercise of the vested and exercisable stock options, which were awarded to certain NEOs as LTIP for the year ended December 31, 2015 by the Compensation Committee under the 2009 Plan, with a grant date of March 1, 2015. The stock options represent the right to acquire option shares following the applicable vesting date, upon exercise and payment of the exercise price, equal to the number of option shares for which the applicable stock option is being exercised by the holder on such date. The stock options became fully vested and exercisable as of March 1, 2018. |
Outstanding Equity Awards at Fiscal Year End
| (3) Represents option shares that may be acquired upon exercise of the vested and exercisable stock options, which were awarded to certain NEOs as LTIP for the year ended December 31, 2016 by the Compensation Committee under the 2009 Plan, with a grant date of March 1, 2016. The stock options became fully vested and exercisable as of March 1, 2019. |
Outstanding Equity Awards at Fiscal Year End
| (4) Represents option shares that may be acquired upon exercise of the vested and exercisable stock options, which were awarded to the NEOs as LTIP for the year ended December 31, 2017 by the Compensation Committee under the 2009 Plan, with a grant date of March 6, 2017. The stock options became fully vested and exercisable as of March 6, 2020. |
Outstanding Equity Awards at Fiscal Year End
| (5) Represents the unvested time-based RSAs, which were awarded to our NEOs as 2021 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 10, 2021. Such unvested time-based RSAs became fully vested as of March 10, 2024. |
Outstanding Equity Awards at Fiscal Year End
| (6) Represents the target number of unearned Performance RSUs, which were awarded to our NEOs as 2021 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 10, 2021 (subject to performance conditions based on Relative TSR for the three-year performance measurement period beginning January 1, 2021 and ended December 31, 2023). The following table sets forth the number of shares of Common Stock on account of the Performance RSUs that were issued to our NEOs on February 19, 2024: |
Outstanding Equity Awards at Fiscal Year End
| NAME | SHARES OF COMMON STOCK ISSUED ON ACCOUNT OF PERFORMANCE RSUS AWARDED ON ACCOUNT OF 2021 LTIP |
Outstanding Equity Awards at Fiscal Year End
| Steven H. Gunby | 32,677 | | Ajay Sabherwal | 3,833 | | Paul Linton | 3,833 | | Curtis P. Lu | 3,833 | | Holly Paul | 3,833 |
Outstanding Equity Awards at Fiscal Year End
| (7) Represents the unvested time-based RSAs, which were awarded to our NEOs as 2022 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 9, 2022. Portions of the time-based RSAs vested on a pro rata basis on March 9, 2023 and March 9, 2024, and the unvested time-based RSAs will be fully vested as of March 9, 2025. |
Outstanding Equity Awards at Fiscal Year End
| (8) Represents the target number of unearned Performance RSUs, which were awarded to our NEOs as 2022 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 9, 2022 (subject to performance conditions based on Relative TSR for the three-year performance measurement period beginning January 1, 2022 and ending December 31, 2024). The following table sets forth the maximum number of Performance RSUs awarded by the Compensation Committee to our NEOs on March 9, 2022: |
Outstanding Equity Awards at Fiscal Year End
| NAME | MAXIMUM NUMBER OF PERFORMANCE RSUS |
Outstanding Equity Awards at Fiscal Year End
| Steven H. Gunby | 38,402 | | Ajay Sabherwal | 3,941 | | Paul Linton | 3,941 | | Curtis P. Lu | 3,941 | | Holly Paul | 3,941 |
Outstanding Equity Awards at Fiscal Year End
| (9) Represents the unvested RSAs, which were awarded to our CEO as 2022 AIP by the Compensation Committee under the 2017 Plan, with a grant date of March 8, 2023. Such unvested RSAs became fully vested as of March 8, 2024. |
Outstanding Equity Awards at Fiscal Year End
| (10) Represents the unvested time-based RSUs (to our CEO) and time-based RSAs (to our other NEOs), which were awarded as 2023 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 8, 2023. Portions of the time-based RSUs and time-based RSAs vested on a pro rata basis on March 8, 2024 and will vest on a pro rata basis on March 8, 2025 and March 8, 2026, such that all unvested time-based RSUs and time-based RSAs will be fully vested as of March 8, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (11) Represents the target number of unearned Performance RSUs, which were awarded to our NEOs as 2023 LTIP by the Compensation Committee under the 2017 Plan, with a grant date of March 8, 2023 (subject to performance conditions based on Relative TSR for the three-year performance measurement period beginning January 1, 2023 and ending December 31, 2025). The following table sets forth the maximum number of Performance RSUs awarded by the Compensation Committee to our NEOs on March 8, 2023: |
Outstanding Equity Awards at Fiscal Year End
| NAME | MAXIMUM NUMBER OF PERFORMANCE RSUS |
Outstanding Equity Awards at Fiscal Year End
| Steven H. Gunby | 29,107 | | Ajay Sabherwal | 2,988 | | Paul Linton | 2,988 | | Curtis P. Lu | 2,988 | | Holly Paul | 2,988 |
Outstanding Equity Awards at Fiscal Year End
| (12) Represents option shares that may be acquired upon exercise of the vested and exercisable portions of the stock option granted by the Compensation Committee as an employment inducement award pursuant to Rule 303A.08 of the NYSE outside the 2009 Plan, on account of a portion of the executive officer’s sign-on bonus for joining the Company. The stock option became fully vested and exercisable as of August 25, 2017. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table shows the number of shares of our Common Stock acquired during the fiscal year ended December 31, 2023 upon the exercise of stock options and SARs and the vesting of restricted stock awards:
Option Exercises and Stock Vested
| NAME | OPTION AND SAR AWARDS | | STOCK AWARDS | | | | NUMBER OF SHARES ACQUIRED ON EXERCISE | VALUE REALIZED ON EXERCISE (1) | NUMBER OF SHARES ACQUIRED ON VESTING | VALUES REALIZED ON VESTING (2) | | | (#) (a) | ($) (b) | (#) (c) | ($) (d) |
Option Exercises and Stock Vested
| Steven H. Gunby | | | | | | Options | — | — | — | — | | Stock Appreciation Rights | 48,392 | 7,195,890 | | | | Stock | — | — | 45,688 | 7,825,147 | | Ajay Sabherwal | | | | | | Options | — | — | — | — | | Stock | — | — | 5,591 | 957,650 | | Paul Linton | | | | | | Options | — | — | — | — | | Stock | — | — | 5,591 | 957,650 | | Curtis P. Lu | | | | | | Options | — | — | — | — | | Stock | — | — | 5,591 | 957,650 | | Holly Paul | | | | | | Options | 2,477 | 333,776 | — | — | | Stock | — | — | 5,591 | 957,650 |
Option Exercises and Stock Vested
| (1) The value realized upon the exercise of stock options and SARs is computed by multiplying (a) the difference between (i) the market price of the underlying shares of Common Stock at the exercise date and (ii) the exercise price of the options or SARs by (b) the number of shares for which the options or SARs were exercised. |
Option Exercises and Stock Vested
| (2) The value realized on vesting of restricted stock is computed by multiplying (a) the market value of the shares of Common Stock at the applicable vesting date by (b) the number of restricted shares that vested on that date. |
PAY VS. PERFORMANCE DISCLOSURE
PAY VS. PERFORMANCE DISCLOSURE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following disclosure of “compensation actually paid,” (“CAP”) as calculated in accordance with SEC rules, to our NEOs and certain Company performance measures for the fiscal years listed below. For information regarding the Company’s pay-for-performance philosophy and how the Company aligns executive pay with performance, refer to our CD&A beginning on page 36.
Pay versus Performance Disclosure Table
Pay versus Performance Disclosure Table
Pay versus Performance Disclosure Table
| | CEO COMPENSATION | | AVERAGE OTHER NEO COMPENSATION | | VALUE OF INITIAL $100 INVESTMENT BASED ON: | | | | | YEAR | AS DISCLOSED IN SUMMARY COMPENSATION TABLE (1) ($) (a) | COMPENSATION ACTUALLY PAID (2) ($) (b) | AS DISCLOSED IN SUMMARY COMPENSATION TABLE (3) ($) (c) | COMPENSATION ACTUALLY PAID (4) ($) (d) | TOTAL SHAREHOLDER RETURN ($) (e) | PEER GROUP TOTAL SHAREHOLDER RETURN (5) (6) ($) (f) | NET INCOME ($000) ($) (g) | ADJUSTED EPS (7) ($) (h) |
Pay versus Performance Disclosure Table
| 2023 | 9,372,564 | 14,812,253 | 2,301,899 | 2,918,345 | 179.97 | 161.63 | 274,892 | 7.71 | | 2022 | 9,135,687 | 12,370,328 | 2,115,869 | 2,489,268 | 143.50 | 139.00 | 235,500 | 6.77 | | 2021 | 7,910,637 | 13,643,454 | 1,976,730 | 2,692,363 | 138.64 | 167.24 | 234,966 | 6.76 | | 2020 | 7,678,086 | 7,456,532 | 1,853,192 | 1,886,728 | 100.96 | 126.01 | 210,682 | 5.99 |
Pay versus Performance Disclosure Table
| (1) The dollar amounts reported in Column (a) are the amounts reported for our CEO in the “Total” compensation column of the Summary Compensation Table (“SCT”) (i) in this Proxy Statement beginning on page 69 for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) in the proxy statement for the 2023 Annual Meeting for the year ended December 31, 2020. |
Pay versus Performance Disclosure Table
| (2) The dollar amounts reported in Column (b) represent the amount of CAP for Mr. Gunby, computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gunby during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Gunby’s total compensation for each year to determine the compensation actually paid: |
Pay versus Performance Disclosure Table
| ADJUSTMENTS TO DETERMINE COMPENSATION ACTUALLY PAID | 2023 | 2022 | 2021 | 2020 |
Pay versus Performance Disclosure Table
| | Amounts Reported under the “Total” Compensation Column in the SCT in (i) this Proxy Statement Beginning on Page 69 for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) the Proxy Statement for the 2023 Annual Meeting for the Year Ended December 31, 2020. | 9,372,564 | 9,135,687 | 7,910,637 | 7,678,086 | | - | Amounts Reported under the “Stock Awards” Column in the SCT in (i) this Proxy Statement Beginning on Page 69 for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) the Proxy Statement for the 2023 Annual Meeting for the Year Ended December 31, 2020. | (6,499,708) | (6,620,594) | (5,033,629) | (5,062,345) | | + | Fair Value of Awards Granted during Year That Remain Unvested as of Year End | 7,129,515 | 7,663,022 | 5,905,812 | 4,047,715 | | +/- | Change in Fair Value from Prior Year End to Current Year End of Awards Granted Prior to Year That Were Outstanding and Unvested as of Year End | 4,275,769 | 2,882,415 | 4,690,574 | (327,967) | | +/- | Change in Fair Value from Prior Year End to Vesting Date of Awards Granted Prior to Year That Vested during Year | 534,113 | (690,202) | 170,060 | 1,121,043 | | | Compensation Actually Paid to CEO | 14,812,253 | 12,370,328 | 13,643,454 | 7,456,532 |
Pay versus Performance Disclosure Table
| (3) The dollar amounts reported in Column (c) represent the average of the amounts reported for the other NEOs in the “Total” compensation column of the SCT (i) in this Proxy Statement beginning on page 69 for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) in the proxy statement for the 2023 Annual Meeting for the year ended December 31, 2020. The names of the NEOs included for purposes of calculating the average amounts in each year are Ajay Sabherwal, Paul Linton, Curtis P. Lu and Holly Paul. |
Pay versus Performance Disclosure Table
| (4) The dollar amounts reported in Column (d) represent the average amount of CAP for the other NEOs as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the other NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the other NEOs for each year to determine the compensation actually paid, using the same methodology described above in footnote (2): |
Pay versus Performance Disclosure Table
| ADJUSTMENTS TO DETERMINE COMPENSATION ACTUALLY PAID | 2023 | 2022 | 2021 | 2020 |
Pay versus Performance Disclosure Table
| | Amounts Reported under the “Total” Compensation” Column in the SCT in (i) this Proxy Statement Beginning on Page 69 for the Years Ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) the Proxy Statement for the 2023 Annual Meeting for the Year Ended December 31, 2020. | 2,301,899 | 2,115,869 | 1,976,730 | 1,853,192 | | - | Amounts Reported under the “Stock Awards” Column in the SCT in (i) this Proxy Statement beginning on page 69 for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 and (ii) the proxy statement for the 2023 Annual Meeting for the year ended December 31, 2020. | (699,873) | (699,909) | (599,931) | (599,962) | | + | Fair Value of Awards Granted during Year That Remain Unvested as of Year End | 768,297 | 810,334 | 711,265 | 485,673 | | +/- | Change in Fair Value from Prior Year End to Current Year End of Awards Granted Prior to Year That were Outstanding and Unvested as of Year End | 483,809 | 347,295 | 588,801 | (29,797) | | +/- | Change in Fair Value from Prior Year End to Vesting Date of Awards Granted Prior to Year That Vested during Year | 64,214 | (84,321) | 15,498 | 177,622 | | | Compensation Actually Paid to Other NEOs | 2,918,345 | 2,489,268 | 2,692,363 | 1,886,728 |
Pay versus Performance Disclosure Table
| (5) The peer groups used to calculate the peer group TSR disclosed in Column (f) are the 2021 Peer Group discussed in the CD&A for 2022 and 2023 and the prior peer group for 2020 and 2021. |
Pay versus Performance Disclosure Table
| (6) Executive compensation decisions for 2020 and 2021 were informed by reference to a different peer group. Three companies: Eaton Vance Corp., Legg Mason, Inc. and Navigant Consulting, Inc. included in the previous peer group were acquired and no longer qualified for inclusion in the 2021 Peer Group. Pearl Meyer recommended and the Compensation Committee approved the following additional changes for 2021 Peer Group purposes: |
Pay versus Performance Disclosure Table
| Removed Greenhill & Co. Oppenheimer Holdings, Inc. Piper Sandler Companies | Added Booz Allen Hamilton Holding Corporation Exponent, Inc. ICF International Jefferies Financial Group, Inc. LPL Financial Holdings, Inc. |
Pay versus Performance Disclosure Table
| (7) The TSR of the prior peer group, based on the same $100 initial investment as in Columns (e) and (f) was $126.01 for 2020 and $167.24 for 2021. We have determined that Adjusted EPS is the financial performance measure that, in our assessment, represents the most important performance measure not otherwise required to be disclosed in the table that is used to link CAP for our NEOs for the most recently completed fiscal year to Company performance. |
Pay versus Performance Disclosure Table
| Most Important Company Performance Measures | | Adjusted EPS (8) | | Adjusted EBITDA (8) | | Total Shareholder Return |
Pay versus Performance Disclosure Table
| (8) See Appendix A for the definitions of Adjusted EPS and Adjusted EBITDA and other non-GAAP financial measures used for financial reporting purposes referred to in this CD&A and the reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the reasons management believes these non-GAAP financial measures provide useful information to investors. For purposes of determining 2023 AIP, the Compensation Committee further adjusted the Adjusted EBITDA financial performance metric defined in Appendix A to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. The Compensation Committee did not further adjust the Adjusted EPS financial performance metric defined in Appendix A to determine 2023 AIP. See the section of this CD&A titled “— 2023 Pay Outcomes — 2023 Annual Incentive Pay — Financial Metrics” beginning on page 51 and Appendix B for the definitions of the non-GAAP financial measures, including the description of the further adjustment to Adjusted EBITDA, for determining 2023 AIP of our NEOs and the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures. |
Pay versus Performance Disclosure Table
The following chart provides a graphical representation of the CAP to our CEO and other NEOs compared with both the Company’s four-year cumulative TSR, as well as the four-year cumulative TSR of our 2021 Peer Group for 2021 and 2023 and the prior period peer group for 2020 and 2021. The following chart provides a graphical representation of the CAP to our CEO and other NEOs compared with net income. The following chart provides a graphical representation of the CAP to our CEO and the other NEOs compared with Adjusted EPS.
Pay versus Performance Disclosure Table
| (1) See Appendix A for the definitions of Adjusted EPS used for financial reporting purposes referred to in this CD&A and the reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the reasons management believes these non-GAAP financial measures provide useful information to investors. For purposes of determining 2023 AIP, the Compensation Committee further adjusted the Adjusted EBITDA financial performance metric defined in Appendix A to exclude the positive impact attributable to the change of the presentation of interest income on forgivable loans |
Pay versus Performance Disclosure Table
on the Company’s Consolidated Statement of Comprehensive Income for the quarter and annual period ended December 31, 2023. The Compensation Committee did not further adjust the Adjusted EPS financial performance metric defined in Appendix A to determine 2023 AIP. See the section of this CD&A titled “— 2023 Pay Outcomes — 2023 Annual Incentive Pay — Financial Metrics” beginning on page 51 and Appendix B for the definitions of the non-GAAP financial measures, including the description of the further adjustment to Adjusted EBITDA, for determining 2023 AIP of our NEOs and the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures.
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K promulgated by the SEC, we are providing the pay ratio of the annual total compensation of our CEO compared with the annual total compensation of our median compensated employee (the “CEO Pay Ratio”) for the year ended December 31, 2023. In order to identify our 2023 median employee, we (i) analyzed annual cash base salary, bonus and overtime compensation of individuals employed as of October 1, 2023, (ii) annualized the compensation of permanent employees hired during 2023 through October 1, 2023, (iii) used year-end exchange rates to convert compensation paid to non-U.S. employees to U.S. dollars and (iv) used the exemption permitted under Item 402(u) of Regulation S-K to exclude employees from 12 countries — Argentina (18), Brazil (63), China (91), Colombia (46), Finland (23), Indonesia (1), Malaysia (10), Mexico (27), Netherlands (64), Saudi Arabia (18) and South Africa (86) and a British Overseas Territory — the British Virgin Islands (3), totaling 450 employees, comprising less than 5% of our total employee population as of October 1, 2023 and resulting in a net employee population of 8,611 out of our original employee population of 9,061 prior to such exclusions. We calculated the 2023 median employee’s annual total compensation for the year ended December 31, 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The total compensation for the 2023 median employee, a U.S.-based senior consultant, includes annual cash base salary, bonus and Company matching contributions under our 401(k) Plan. The 2023 median employee’s total compensation for purposes of determining the CEO Pay Ratio was $135,562; and the 2023 total compensation of our CEO for the purposes of determining the CEO Pay Ratio was $9,372,564. Based on this information, our 2023 CEO Pay Ratio was 69 to 1. We believe that this ratio represents a reasonable estimate calculated in a manner consistent with Item 402(u) and is not intended as a measure of comparison with any other company.

DEF 14A of Fti Consulting, Inc

INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES

The Director Nominees

The Director Nominees

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

INFORMATION ABOUT THE NOMINEES FOR DIRECTOR

Functions of the Nominating, Corporate Governance and Social Responsibility Committee

COMPENSATION OF NON-EMPLOYEE DIRECTORS AND POLICY ON NON-EMPLOYEE DIRECTOR EQUITY OWNERSHIP

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Non-Employee Director Compensation

Director Summary Compensation Table

SHAREHOLDER NOMINEES FOR DIRECTOR

NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES

NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES

NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES

NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES

2023 Company Performance Update

Our Executive Compensation Practices

CEO COMPENSATION

CEO COMPENSATION

NEOs (Other than CEO) COMPENSATION

NEOs (Other than CEO) COMPENSATION

Most Recent Say-on-Pay Vote Results

Compensation Governance Practices

Compensation Governance Practices

Compensation Philosophy

The Decision-Making Process

Role of the Compensation Advisers

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

Role of Peer Companies

FTI Consulting vs. 2021 Peer Group (1)

FTI Consulting vs. 2021 Peer Group (1)

FTI Consulting vs. 2021 Peer Group (1)

Components of Compensation

2023 Annual Incentive Pay

AIP PROGRAM DESIGN — CEO

AIP PROGRAM DESIGN — CEO

AIP PROGRAM DESIGN — CEO

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

AIP PROGRAM DESIGN — Other NEOs

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

2023 Annual Incentive Payout Amounts

Annual Long-Term Incentive Pay

LTIP Awards for Year Ended December 31, 2023

LTIP Awards for Year Ended December 31, 2023