DEF 14A of Jacobs Solutions Inc.
Filed Dec 15, 2023 · FY20230001193125-23-295881
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
PROPOSAL NO. 1 — ELECTION OF DIRECTORS At the Annual Meeting, shareholders will be asked to elect thirteen (13) directors to serve on the Board of Directors. The Board of Directors has nominated Steven J. Demetriou, Christopher M.T. Thompson, Priya Abani, General Vincent K. Brooks, General Ralph E. Eberhart, Manny Fernandez, Georgette D. Kiser, Barbara L. Loughran, Robert A. McNamara, Louis V. Pinkham, Robert V. Pragada, Peter J. Robertson, and Julie A. Sloat for election as directors for 1-year terms expiring at the 2025 Annual Meeting. When elected, directors serve until their successors have been duly elected and qualified or until any such director’s earlier resignation or removal. If, for any reason, any nominee is unable to serve or will not serve, proxies may be voted for such substitute nominee as the proxy holder may determine. The Company is not aware of any nominee who will be unable to or will not serve as a director.
Director Biographies
Director Biographies
Director Biographies
| | Steven J. Demetriou (he, him) Executive Chair Director Since: 2015 Age: 65 Executive Chair of the Board | | Mr. Demetriou brings international business perspectives and more than 35 years of experience in leadership and senior management roles to the Board, including over 20 years in the role of Chief Executive Officer. Over the course of his career, he has gained experience in a variety of industries. His breadth of experience is particularly valuable, given the variety of industries in which the Company’s clients operate. Business Experience • Chief Executive Officer of the Company (2015-2023); Chair of the Board (2016-present) • Chairman and Chief Executive Officer of Aleris Corporation (2004-2015) • Chief Executive Officer of Noveon, Inc. (2001-2004) • Executive Vice President of IMC Global Inc. (1999-2001) • Various leadership positions with Cytec Industries Inc. and ExxonMobil Corporation (1981-1999) Education • Bachelor of Science (BS) in Chemical Engineering from Tufts University Public Company Boards • Arcosa, Inc. (2023-present) • FirstEnergy Corp. (2017-present) • C5 Acquisition Corp. (SPAC) (Chair) (2021-October 2023) • Kraton Performance Polymers (2009-2017) • Non-Executive Chairman of Foster-Wheeler (2011-2014) • OM Group (2005-2015) Private Boards & Community Involvement • Director of PA Consulting Group Limited • Co-Chairman of US-Saudi Arabian Business Council • Board Member of Cuyahoga Community College Foundation • Board Member of Dallas Citizen’s Council | |
Director Biographies
| | Christopher M.T. Thompson (he, him) Former Chairman and Chief Executive Officer of Gold Fields Ltd. Director Since: 2012 Independent Age: 75 Lead Independent Director Board Committees: • Audit • Nominating & Corporate Governance | | Mr. Thompson has an extensive background in international operations, finance and strategic leadership in a range of industries, including investments and mining. As Lead Independent Director, he brings valuable insight and independent leadership to the Board regarding the day-to-day operations of large global organizations, risk management and corporate best practices. Business Experience • Director, Chairman and Chief Executive Officer of Gold Fields Ltd. (1998-2005) • Chairman of the World Gold Council (2002-2005) • Founder and Chief Executive Officer of Castle Group Ltd. (1992-1998) Education • Bachelor’s degree in Law and Economics from Rhodes University, South Africa • Master’s degree in Business Management from Bradford University, United Kingdom Public Company Boards • Royal Gold, Inc. (2013-2020) • Teck Resources Limited (2003-2014) • Golden Star Resources Ltd. (2010-2015) • Various public portfolio companies of Castle Group (1985-1999) Private Boards & Community Involvement • Board member of The Colorado School of Mines Foundation (2013-2017) • Board member and Vice President of South African Chamber of Mines (1998-2002) • Board member of Business Against Crime South Africa (1998-2002) | |
Director Biographies
| 8 | | 2024 Proxy Statement |
Director Biographies
| | Priya Abani (she, her) CEO & President, Member of Board of Directors at AliveCor Director Since: 2021 Independent Age: 48 Board Committees: • Audit • Nominating & Corporate Governance | | Ms. Abani is the Chief Executive Officer and President at AliveCor, a health tech company that is advancing patient-centric remote cardiological care using deep machine learning and AI. She has more than 20 years of experience building high-performing organizations, launching innovative products, and leading strategic alliances across industries. Under her leadership, the company has built the largest AI-driven consumer subscription service in the world for cardiovascular care, with its technology in the hands of more than 2.9 million people in 42 countries around the world. She also led the company’s recent growth into enterprise markets with reimbursed cardiac monitoring services for healthcare providers and is overseeing the development of a comprehensive condition management service offering for cardiology. Ms. Abani was recognized in The Healthcare Technology Report’s Top 50 Healthcare Technology CEOs of 2022. Her experience is particularly valuable to the Board given the Company’s focus on delivering technology-based solutions and innovations to its clients around the world. Business Experience • AliveCor, Inc., CEO & President, Member of Board of Directors (2019-present) • Amazon.com, Inc., General Manager, Alexa Voice Service (2016-2019) • Intel Corporation (Engineer, 1998-2001; Manager, 2002-2006, Senior Manager, 2008-2011; Senior Director 2012-2016) • Marvell, Senior Product Manager (2006-2008) Education • BE in Computer Engineering from VJTI, Mumbai, India • MS in Computer Science from Clarkson University, NY • MBA in Entrepreneurship, Babson College, Boston, MA Private Boards & Community Involvement • Director of AliveCor, Inc. • Board of Trustees at TIAA • Senior Advisor for President’s Council on Jobs and Competitiveness (2011) | |
Director Biographies
| | General Vincent K. Brooks (U.S. Army, Retired) (he, him) Principal of WestExec Advisors Director Since: 2020 Independent Age: 65 Board Committees: • Human Resource & Compensation • Nominating & Corporate Governance | | General Vincent K. Brooks brings valuable leadership skills developed through his military service. His areas of expertise include leadership in complex organizations, inclusion and diversity, national security, international relations, military operations, combating terrorism and countering the proliferation of weapons of mass destruction. His 42-year military career provides the Board with valuable experience and knowledge of government and the military, which is particularly valuable given the Company’s government and national security clients and international operations. National Security Experience • Former 4-Star General in the United States Army (retired 2019) • Commander of Korean and U.S. combined forces in the Republic of Korea (2016-2018) • Numerous high-level command and staff positions within the Armed Forces (1980-2019) • Principal of WestExec Advisors (2020-present) Education • BS in Engineering from West Point Military Academy • Master of Military Art and Science from U.S. Army School of Advanced Military Studies at Fort Leavenworth, Kansas • Honorary Doctor of Laws from New England School of Law • Honorary Doctor of Humanities from New England Law | Boston Public Company Boards • Diamondback Energy Inc. (2020-present); Chair, Nominating and Corporate Governance Committee • Verisk (2020-present) Private Boards & Community Involvement • Member of the Defense Advisory Committee on Diversity and Inclusion • Class of 1951 Chair for the Study of Leadership at the U.S. Military Academy at West Point. • Vice Chairman of the Gary Sinise Foundation • Former Chairman and President of the Korea Defense Veterans Association • Life Member of the Council on Foreign Relations • Visiting Senior Fellow at Harvard Kennedy School (Belfer Center for Science and International Affairs) • Distinguished Fellow at the University of Texas at Austin (Clements Center for National Security, and Strauss Center for International Security and Law) | |
Director Biographies
| 2024 Proxy Statement | | 9 |
Director Biographies
| | General Ralph E. (“Ed”) Eberhart (USAF, Retired) (he, him) Chair of VSE Corp. Director Since: 2012 Independent Age: 76 Board Committees: • ESG & Risk • Human Resource & Compensation • Nominating & Corporate Governance (Chair) | | General Eberhart brings extensive leadership skills developed through his military service. His 36-year military career provides the Board with valuable insights and knowledge of government and the military, which is particularly valuable given the Company’s government and military contracts. Leadership, Military & International Experience • Former General Officer of the United States Air Force (1997-2005) • Numerous high-level command and staff positions within the Air Force and the Department of Defense (1968-2005) • Former Commander of US Northern Command, North American Aerospace Defense Command (NORAD), US Space Command, Air Force Space Command, Air Combat Command & U.S. Forces, Japan. He also served as Vice Chief of the United States Air Force. Education • BS in Political Science from the United States Air Force Academy • Master’s in Political Science from Troy State University Public Company Boards • VSE Corporation (2007-present), Chair (2019-present) • Triumph Group, Inc. (2010-2022) • Rockwell Collins (2007-2018) Private Boards & Community Involvement • Chair, American Air Museum in Britain • Trustee, Air Force Academy Endowment • Director, Segs4Vets • Director, TERMA North America Inc. • Member, Council of Foreign Relations • Member, Colorado Thirty Group | |
Director Biographies
| | Manny Fernandez (he, him) Former Managing Partner with KPMG LLP Director Since: 2020 Independent Age: 61 Board Committees: • Audit • Human Resource & Compensation | | Mr. Fernandez was KPMG LLP’s managing partner of the Dallas office and the Southwest region leader across audit, tax and consulting. He brings more than 36 years of experience advising large multi-national public and private companies in areas of business and financial operations, risk management and M&A. Mr. Fernandez’s broad industry experience brings in-depth knowledge across a variety of sectors, including industrial manufacturing, consumer products, retail, media and professional services. Mr. Fernandez also brings a strong focus on talent management, including talent acquisition and inclusion and diversity. Business Experience • KPMG LLP (KPMG) (1984-2020; Partner 1996-2020) • KPMG Managing Partner, Dallas (2009-2020) • KPMG National Managing Partner, Talent Acquisition (2006-2009) Education • BS in Accounting from Fairleigh Dickinson University Public Company Boards • HF Sinclair Corp. (2020-present) Private Boards & Community Involvement • Director of Latino Corporate Directors Association (LCDA) • Dallas National Golf Club • Member of the American Institute of Public Accountants • American Heart Association – past • Dallas Holocaust and Human Rights Museum – past • Dallas Regional Chamber of Commerce – past • KERA (Dallas Public Television) – past | |
Director Biographies
| 10 | | 2024 Proxy Statement |
Director Biographies
| | Georgette D. Kiser (she, her) Former Chief Information Officer and Managing Director at The Carlyle Group Director Since: 2019 Independent Age: 56 Board Committees: • ESG & Risk • Human Resource & Compensation • Nominating & Corporate Governance | | Ms. Kiser is an independent advisor who helps lead due diligence and technical strategies across various private equity and venture capital firms. Previously, she was managing director and chief information officer (CIO) at The Carlyle Group, leading the firm’s global technology and solutions organization and driving the IT strategies. From 1996 until 2015, she was with T. Rowe Price Associates, where she served as Vice President and Director of Enterprise Solutions and Capabilities where she headed Enterprise Solutions and Capabilities within the Services and Technology Organization. She led and managed teams that provided creative solutions and leveraged technology for investment front office, trading, and back office operations. Prior to T. Rowe Price, Ms. Kiser worked for General Electric within their Aerospace Unit. Ms. Kiser brings extensive experience in developing and executing business initiatives in financial services and defense organizations to the Board of Directors. Business Experience • Operating Executive, The Carlyle Group (2019–Present) • Broard Sky Partners (2021-Present) • Chief Information Officer, Managing Director, The Carlyle Group (2015-2019) • Vice President, T. Rowe Price Associates (1996-2015) Education • BS in Mathematics from University of Maryland • MBA from University of Baltimore • Master of Science (MS) in Mathematics from Villanova Public Company Boards • NCR Corporation (2020-present) • Aflac Inc. (2019-present) • Adtalem Global Education (2018-present) Private Boards & Community Involvement • Director, Claritas (Data driven marketing company) (2018-Present) • Advisor, BusinessOptix (Automated business process company) (2020-Present) • Member of Board of YearUp.org | |
Director Biographies
| | Barbara L. Loughran (she, her) Former Partner with PricewaterhouseCoopers Director Since: 2019 Independent Age: 60 Board Committees: • Audit (Chair) • ESG & Risk | | Ms. Loughran was a Partner with PricewaterhouseCoopers LLP (PwC) and brings more than 30 years of experience working with Fortune 500 executives and boards as they navigated strategic, transformational and operational issues. She has served in a number of leadership roles, including PwC’s Industrial Products Business Unit Leader for NY Metro; partner in PwC’s National Office working with the Securities and Exchange Commission and clients as they accessed the capital markets and responded to regulatory requirements; and later consulted on complex financial control matters. She also led the National Office effort focused on leveraging new and innovative technologies. Ms. Loughran’s broad industry experience brings in-depth knowledge in the professional services, manufacturing, pharmaceuticals, technology and consumer products sectors. Business Experience • PricewaterhouseCoopers LLP (PwC) (1985-2018; Partner 1998-2018) • PwC National Office Partner (2015-2018 and 2000-2003) • PwC NY Metro Industrial Products Business Unit Leader (2013-2015) • PwC NY Metro Retail & Consumer Business Development Leader (2010-2012) Education • BA from Franklin & Marshall College • MBA from University of Pennsylvania, Wharton School • Certified Public Accountant Public Company Boards • Armstrong World Industries (2019-present) Private Boards & Community Involvement • United Way of Morris County, Board of Directors (1998-2007); Executive Committee, Finance Committee (Chair), Audit Committee, Treasurer, Assistant Treasurer | |
Director Biographies
| 2024 Proxy Statement | | 11 |
Director Biographies
| | Robert A. McNamara (he, him) Retired Group Chief Risk Officer of Lendlease Corporation (ASX) Director Since: 2017 Independent Age: 69 Board Committees: • Audit • ESG & Risk (Chair) | | Mr. McNamara has over 35 years of experience managing global businesses in the development, design and delivery of projects in the government, institutional, infrastructure and industrial sectors in senior leadership positions. While at Lendlease, Mr. McNamara was responsible for ensuring Lendlease achieved world’s best practices in risk management and operational excellence. He also oversaw Lendlease’s Building, Engineering, and Services businesses in Australia. Prior to this role, Mr. McNamara was Chief Executive Officer, Americas of Lendlease. Business Experience • Group Chief Risk Officer, Lendlease Corporation (2014-2017) • Chief Executive Officer, Americas of Lendlease (2010-2014) • Chairman and Chief Executive Officer of Penhall/LVI International (PLI) (2006-2010) • Senior Group President of Fluor Corporation (1996- 2006) • President and Chief Operating Officer of Marshall Contractors (1977-1996) Education • Bachelor’s degree in Economics from Brown University • Completed the Consortia 1 Program at Thunderbird International Business School • Certification as a Public Board Director from the UCLA Anderson School of Management Public Company Boards • UDR, Inc. (2014-present) Private Boards & Community Involvement • Past Board member of the US China Business Council • Past Chairman for the Construction Industry Institute’s Technology Implementation Task Force | |
Director Biographies
| | Louis V. Pinkham (he, him) Chief Executive Officer, Member of Board of Directors at Regal Rexnord Corporation Director Since: 2023 Independent Age: 52 | | Mr. Pinkham is the Chief Executive Officer of Regal Rexnord Corporation, a global leader in the engineering and manufacturing of automation sub-systems, industrial powertrain solutions, electric motors and air moving products, with over $7 billion in sales. His areas of focus are innovation and growth initiatives, including leading the combination of Regal Beloit with Rexnord’s Process & Motion Control segment and the 2023 acquisition of Altra Industrial Motion Corporation. Mr. Pinkham brings over 20 years of experience in leadership, strategy and transformation. His experience is particularly valuable to the Board as the Company executes its operational transformation and its long-term business strategy. Business Experience • Regal Rexnord Corporation, Chief Executive Officer and Member of the Board (2019-present) • Crane Company, Senior Vice President (2014-2019); Group President (2012-2014) • Eaton Corporation, Senior Vice President (2011- 2012), Various Leadership Positions (1999-2011) Education • BS in Engineering from Duke University • MS in Engineering Management from Northwestern University • MBA from the Kellogg School of Management at Northwestern University Public Company Boards • Regal Rexnord Corporation (2019-present) Private Boards & Community Involvement • Board of Trustees at The University of Chicago Medical Center • Board of Trustees at the Museum of Science and Industry in Chicago • Board of Trustees at Manufacturers Alliance for Productivity and Innovation | |
Director Biographies
| * Effective January 2024, Mr. Pinkham will be added as a member of the Human Resource and Compensation Committee and the Nominating and Corporate Governance Committee. |
Director Biographies
| 12 | | 2024 Proxy Statement |
Director Biographies
| | Robert V. Pragada (he, him) Chief Executive Officer of Jacobs Solutions Inc. Director Since: 2023 Age: 55 | | Mr. Pragada brings over 30 years of experience in international business leadership and military service to the Board. In January 2023, Mr. Pragada succeeded Mr. Demetriou as the Chief Executive Officer of the Company. He initially joined Jacobs in 2006 and served as the President and Chief Operating Officer from 2019 to 2023. Prior to 2019, he served in various leadership roles at Jacobs, including President of both People & Places Solutions and Global Industrial and Buildings & Infrastructure Groups. Mr. Pragada has been instrumental in developing and leading the successful execution of the Company’s business strategy, as well as driving global integrated delivery of its operations around the world as a differentiator in the industry. Mr. Pragada’s diverse leadership experience and in-depth knowledge of Jacobs are particularly valuable, given the Company’s expansive services and goal of providing data-driven solutions to clients. Business Experience • Chief Executive Officer of the Company (2023- present) • Various leadership positions within the Company, including President and Chief Operating Officer (2006-2014, 2016-2023) • President and Chief Executive Officer of the Brock Group (2014-2016) • Chief Operating Officer of Kinetics (1999-2005) • Civil Engineer Corps and Seabee Officer in U.S. Navy (1990-1999) Education • BS in Systems Engineering from United States Naval Academy • MS in Engineering and Management from Stanford University Public Company Boards • Eaton Corporation plc (2021-present) Private Boards & Community Involvement • Director of PA Consulting Group Limited • Board Director of U.S. Naval Academy Foundation • Board Director of Dallas Regional Chamber (Chair, 2022) • Advisory Council Member of Dallas Mavericks | |
Director Biographies
| | Peter J. Robertson (he, him) Former Executive Vice President, Director and Vice Chairman of the Board of Directors of Chevron Corporation Director Since: 2009 Independent Age: 76 Board Committees: • ESG & Risk • Human Resource & Compensation (Chair) | | Mr. Robertson brings vital knowledge and experience to the Board from his 36-year career at Chevron Corporation. He also brings valuable international experience in developed and developing countries, including interactions with governments at the highest levels, from his executive experience and the multiple chairmanship and director positions he has held and currently holds. Mr. Robertson also has extensive experience on the boards of not-for-profit entities and public company boards, both with global reach, as well as important accounting know-how and experience with public company financial statements, disclosures and accounting rules from his service as Chief Financial Officer of Chevron USA. Business Experience • Executive Vice President, Director and Vice Chairman of Chevron Board (2002-2009) • President of Chevron’s worldwide exploration, production and global gas businesses (2002-2004) • President of Chevron’s overseas exploration and production businesses (2000-2002) • President of Chevron’s North America exploration and production businesses (1996-2000) • President of Chevron’s natural gas processing business (1990-1994) • Chief Financial Officer of Chevron USA (1985-1990) Education • BS in Mechanical Engineering from the University of Edinburgh • MBA from the University of Pennsylvania, Wharton School, where he was a Thouron Scholar Public Company Boards • Vice Chairman of the Board for Chevron Corporation (2002-2009) • Sasol Limited (2012-2021) • Dynegy Inc. (1996-2000) Private Boards & Community Involvement • Director International House at Berkeley, 2003-Present • Director, Sylvan Source, Inc. (2016-present) • Co-chairman of the US Saudi Arabian Business Council (2009-2018) • Chairman of the World Affairs Council of Northern California (2009-2018) • Chairman of the US Energy Association (2006-2008) | |
Director Biographies
| 2024 Proxy Statement | | 13 |
Director Biographies
| | Julie A. Sloat (she, her) President, Chief Executive Officer and Chairman of the Board at American Electric Power Company, Inc. Director Since: 2023 Independent Age: 54 | | Ms. Sloat is the President, Chief Executive Officer and Chairman of the Board of Directors at American Electric Power Company, Inc., an electric energy company with the nation’s largest electric transmission network. She is leading the company’s energy transition, expanding its renewable energy generation portfolio, and its development of new offerings. Ms. Sloat brings over 20 years of experience at American Electric Power leading multiple finance teams, including investor relations, and serving as Chief Financial Officer. Her focus on diversity, equity and inclusion in the workforce, in addition to her leadership experience, greatly contribute to the Company’s focus on its strategy, and sustainability and ESG initiatives. Business Experience • American Electric Power Company Inc., President, Chief Executive Officer, and Chair of the Board (2023- present), President and Chief Financial Officer (2022), Executive Vice President and Chief Financial Officer (2021-2022), Various Leadership Positions (1999-2008, 2009-2020, including AEP Ohio President & COO 2016-2018) • Vice President, Corporate Finance and Investor Relations at Tween Brands, Inc. (acquired by Dress Barn) (2008-2009) • Analyst, Equity Research and Bank Debt Underwriter at Bank One Corporation (1995-1999) • Senior Loan Analyst, M&T Mortgage Corp (1993- 1994) Education • BS from Ohio State University • MBA from Ohio State University Public Company Boards • American Electric Power Company Inc. (2023- present) • Evoqua Water Technologies Corporation (acquired by Xylem Inc.) (2022-2023) • Park National Corporation (2015-2021) Private Boards & Community Involvement • Chair of the Board of Directors – Foundation Board for The Arthur G. James Cancer Hospital and Richard J. Solove Research Institute • Board Director of Columbus Downtown Development Corporation • Board Director of Edison Electric Institute • Board Director of Ohio Business Roundtable • Board Directors of Pelotonia • Board Director of The Columbus Partnership • Board Director of U.S. Business Roundtable | |
Director Biographies
| * Effective January 2024, Ms. Sloat will be added as a member of the Audit Committee and the ESG and Risk Committee. |
Director Biographies
| 14 | | 2024 Proxy Statement |
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Highlights
Highlights Jacobs has a strong track record of integrity and corporate governance practices that promote thoughtful leadership by its officers and Board of Directors to facilitate profitable growth while strategically balancing risk to maximize long-term shareholder value. Below is a summary of certain information about our Board, our Director Nominees and the governance best practices employed by the Company for fiscal 2023.
Our Board and Director Nominees
Our Board and Director Nominees
Our Board and Director Nominees
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Compensation of Directors
Compensation of Directors Compensation Philosophy
Compensation of Directors
| • | Attract and retain highly qualified directors having a diverse range of backgrounds, skills and experience by offering compensation that is competitive with the Company’s peer group and the broader market of other similarly-sized companies. |
Compensation of Directors
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Compensation of Directors
| • | Align the interests of directors with our shareholders by providing a significant portion of compensation in equity and requiring directors to comply with robust stock ownership guidelines and policies prohibiting hedging, shorting or pledging Company stock. |
Compensation of Directors
| • | Provide a compensation program that reflects individual director responsibilities and time commitments. |
Compensation of Directors
| • | Provide compensation that is simple and transparent. |
Compensation of Directors
Determination of Non-Employee Director Compensation Each year, the Board determines non-employee director compensation based upon the recommendation of the Nominating and Corporate Governance Committee. In making a recommendation, the Nominating and Corporate Governance Committee considers market data for the Company’s peer group, which is the same peer group used for the Company’s executive compensation benchmarking, as well as data for a broader market of similarly-sized companies, and input regarding market practices for director compensation from Farient Advisors, which is the same independent consultant that is retained by the Compensation Committee. Components of Non-Employee Director Compensation
Compensation of Directors
| Compensation Component | Calendar Year 2022 | Calendar Year 2023 | Purpose | | Cash Retainer | $125,000 | $125,000 | Provide a competitive cash retainer. | | Lead Independent Director Additional Cash Retainer | $100,000 | $100,000 | Provide additional compensation that takes into account the increased responsibilities and time commitments of the Lead Independent Director. | | Committee Chair Additional Cash Retainer | $25,000 | $25,000 | Provide additional compensation that takes into account the increased responsibilities and time commitments of the Chair of each of the Board’s standing Committees. Each Committee Chair also serves on the ESG & Risk Committee. | | Special Meeting Fees (beginning with ninth meeting for the Board or a standing Committee, and the third meeting for any Special Committee, in each case during a twelve-month period) | $2,000/meeting | $2,000/meeting | Provide compensation for periods of unusually high meeting activity. | | Equity Grant (RSUs that vest on the earlier of 1 year after grant or the next annual shareholder meeting) | $190,000 | $190,000 | Align interests of directors with the long-term interests of the Company’s shareholders. Directors restricted from selling shares until reaching stock ownership guidelines level (5x annual cash retainer). |
Compensation of Directors
Equity For 2023, the Board set the annual equity value to be awarded to independent directors at approximately $190,000, and, accordingly, granted each independent director an award of 1,559 RSUs on January 25, 2023. Such grants were made pursuant to the Company’s 1999 Outside Director Stock Plan, as amended and restated (the 1999 Outside Director Plan). Each RSU grant vests upon the earlier of (1) the next annual shareholder meeting or (2) the 1-year anniversary of the grant date.
Compensation of Directors
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Compensation of Directors
If the Company pays a cash dividend on its outstanding common stock, RSUs will be credited with cash dividend equivalent rights (Dividend Equivalents) paid to the applicable director upon the vesting of the RSUs and distribution of the underlying shares of common stock as described below in the section entitled “Executive Compensation — Narrative Disclosure to Summary Compensation Table” and “Grants of Plan Based Awards Table — Payment of Dividends and Dividend Equivalent Rights.” Each director also receives cash dividends with respect to each outstanding restricted stock award (RSA), if any, as and when paid to shareholders of common stock. Additional Director Compensation for Periods of Unusually High Board or Committee Activity The Board has adopted a policy under which non-employee directors may receive additional compensation for periods of unusually high Board or committee activity. The intention of this policy is to adequately compensate directors for additional services rendered during periods of unusually high activity and will not be paid for ordinary course of business responsibilities. The Corporate Governance Guidelines provide that there will be five to six regularly scheduled Board meetings per year, and the policy provides that, for each Board or committee meeting in excess of eight meetings for the Board or applicable standing committee during a twelve-month period, the Company will pay an additional $2,000 special fee for each meeting to the non-employee directors in attendance. In the event the Board forms a special committee, the Company will pay the additional $2,000 special fee for each special committee meeting beginning in excess of two special committee meetings in a twelve-month period. No special fees were earned by non-executive directors for additional meetings of the Board in fiscal 2023. Director Deferral Plan Additionally, independent directors are eligible to participate in the Jacobs Director Deferral Plan, pursuant to which each director may defer all or a portion of such director’s cash retainer and/or RSUs. Non-Employee Director Compensation During Fiscal 2023 The table below sets forth the compensation earned by each of the Company’s independent directors during fiscal 2023. Neither Mr. Pragada, our CEO and a director on the Board, nor Mr. Demetriou, the Executive Chair of the Board, received compensation for their service as directors. The compensation paid to Mr. Pragada and Mr. Demetriou as employees of the Company during fiscal 2023 is set forth in the “Summary Compensation Table” below.
Compensation of Directors
| Name | Fees Earned or Paid in Cash (1) ($) | Stock Awards (2) ($) | Option Awards (3) ($) | All Other Compensation (4) ($) | Total ($) | | Priya Abani | 125,000 | 190,042 | — | 1,554 | 316,596 | | General Vincent K. Brooks | 125,000 | 190,042 | — | 1,391 | 316,433 | | General Ralph E. Eberhart | 150,000 | 190,042 | — | 1,391 | 341,433 | | Manny Fernandez | 125,000 | 190,042 | — | — | 315,042 | | Georgette D. Kiser | 125,000 | 190,042 | — | 759 | 315,801 | | Barbara L. Loughran | 150,000 | 190,042 | — | — | 340,042 | | Robert A. McNamara | 150,000 | 190,042 | — | 1,391 | 341,433 | | Louis V. Pinkham (5) | — | — | — | — | — | | Peter J. Robertson | 150,000 | 190,042 | — | 1,391 | 341,433 | | Julie A. Sloat (5) | — | — | — | — | — | | Christopher M.T. Thompson | 225,000 | 190,042 | — | — | 415,042 |
Compensation of Directors
| (1) Represents director fees earned during fiscal 2023. No special fees were earned by non-executive directors for additional meetings of the Board in fiscal 2023. |
Compensation of Directors
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Compensation of Directors
| (2) Represents the grant date fair value of the RSU grants under the 1999 Outside Director Plan during fiscal 2023 in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (FASB ASC Topic 718). The aggregate number of shares of RSUs outstanding at September 29, 2023, for each independent director was as follows: P. Abani — 1,559; V. Brooks — 1,559; R. Eberhart — 8,368; M. Fernandez — 5,244; G. Kiser — 4,363; B. Loughran — 8,008; R. McNamara — 1,559; L. Pinkham — 0; P. Robertson — 11,368; J. Sloat — 0; and C. Thompson — 15,691. |
Compensation of Directors
| (3) The Company has not granted options to independent directors since fiscal 2016. The aggregate number of options outstanding at September 29, 2023, for each independent director was as follows: P. Abani — 0; V. Brooks — 0; R. Eberhart — 10,500; M. Fernandez — 0; G. Kiser — 0; B. Loughran — 0; R. McNamara — 0; L. Pinkham — 0; P. Robertson — 7,000; J. Sloat — 0; and C. Thompson — 10,500. |
Compensation of Directors
| (4) Represents dividend equivalent payments on RSUs that vested during the fiscal year. These amounts do not include accumulated dividend equivalent rights on vested and deferred RSUs that have not yet been distributed to each independent director as follows: P. Abani — $0; V. Brooks — $0; R. Eberhart — $37,041; M. Fernandez — $5,926; G. Kiser — $4,105; B. Loughran — $14,438; R. McNamara — $0; P. Robertson — $53,361; J. Sloat — $0; and C. Thompson — $56,550. |
Compensation of Directors
| (5) Mr. Pinkham and Ms. Sloat were each appointed to the Board effective as of December 1, 2023. Accordingly, neither Mr. Pinkham nor Ms. Sloat received any compensation related to his or her service on the Board in fiscal 2023. |
Our Executive Compensation Philosophy
| ✓ | Rewards executives for superior annual Company performance through our Leadership Performance Plan (“LPP”), a short-term cash incentive program that places a substantial component of pay at risk, with specific measures and targets assigned to each participant based on their role in the Company; and |
Our Executive Compensation Philosophy
| ✓ | Aligns our executives’ interests with those of our shareholders through long-term equity-based awards. |
The Compensation Decision Process
The Compensation Decision Process The Compensation Committee may, from time to time, directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. In fiscal 2023, the Compensation Committee engaged the services of Farient Advisors (the “Independent Consultant”), a global executive compensation consulting firm, to review and provide recommendations concerning all components of the Company’s executive compensation programs. The Independent Consultant performs services on behalf of the Compensation Committee and has no relationship with the Company or its executives except as it may relate to performing such services. The Independent Consultant also advises the Nominating and Corporate Governance Committee on non-employee director compensation. The Compensation Committee has assessed the independence of the Independent Consultant pursuant to the rules of the SEC and the NYSE and concluded that the Independent Consultant is independent, and no conflict of interest exists with respect to the services provided by the Independent Consultant to the Compensation Committee. During fiscal 2023, the CEO and other members of our senior executive team worked with the Compensation Committee to help ensure that our executive compensation programs are competitive, ethical, and aligned with the Company’s values. For fiscal 2023, compensation decisions for the NEOs (other than our CEO and our Executive Chair) were made by the Compensation Committee after consultation with the CEO, and compensation decisions with respect to our CEO and our Executive Chair were approved by the full Board upon recommendation from the Compensation Committee. We also take shareholder feedback into account when making decisions about our executive compensation program. For fiscal 2023, in response to shareholder feedback and in an effort to reduce the complexity of our long-term incentive plan design, a full three-year performance period was applied to all PSU grants beginning with those awarded in fiscal 2023. This change resulted in the removal of the “lock-in” component for new PSU grants, which allowed for awards to be “locked in” and no longer forfeitable if the Company met certain performance targets in years 1 or 2 of the three-year performance period, and if the employee did not have a separation of service prior to the vesting date. At the 2023 annual meeting of shareholder, approximately 96% of our shareholders approved of our executive compensation program by voting in favor of our “say on pay” proposal.
Assessing Compensation Competitiveness
Assessing Compensation Competitiveness The Compensation Committee, with the help of the Independent Consultant, regularly updates, and uses a peer group to benchmark the Company’s compensation program. For fiscal 2023, as part of its annual review, the Compensation Committee determined that the peer group should be comprised of (1) companies from a range of industries, including professional services, technology, defense and engineering that are competitive with the Company for business and executive management talent or (2) companies that provide IT consulting or technical services to government and large commercial clients. For fiscal 2023, the Company’s peers are generally within one-quarter to four times the size of the Company in terms of revenue and market capitalization. Similar to prior years, to assess compensation competitiveness compared to the peer group, the Independent Consultant utilized comparative data disclosed in publicly available proxy statements, other documents filed with the SEC, and data from a comprehensive database of pay survey information.
Assessing Compensation Competitiveness
* Percentile rank calculation includes Jacobs. Source: Bloomberg Mkt Cap Date: 9/29/2023 For fiscal 2024, as part of its annual peer group review, the Compensation Committee, in consultation with the Independent Consultant, maintained the peer group used in fiscal 2023.
Compensation Elements
Total target direct compensation refers to base salary, short-term incentive compensation (measured at target for the fiscal year) and long-term equity incentive compensation based on grant date fair values (measured at target for PSUs). In determining an executive’s overall compensation, the Compensation Committee considers the absolute and relative value of each compensation component and the overall mix. As with prior years, the Compensation Committee allocated the annual long-term incentive awards for the NEOs with 60% of the value as PSUs and 40% of the value as RSUs (other than Mr. Demetriou’s whose annual long-term incentive award consisted 100% of RSUs) in accordance with our philosophy to emphasize pay for performance. In determining the amount of each component of compensation, the Compensation Committee also considers the fact that the Company provides limited perquisites. This stems from the Compensation Committee’s belief that focusing on the three core elements of compensation (base salary and short- and long-term incentive compensation) results in a transparent and easier-to-administer pay system that is consistent with the Company’s culture. For example, the Company’s currently available retirement program in the U.S. consists solely of a tax-qualified 401(k) plan with matching contributions and a non-qualified deferred compensation plan that provides non-enhanced market returns. Perquisites are generally limited to financial planning and annual health assessments. Base Salary After considering proxy data from our peer group and other market survey information, including information provided by the Independent Consultant, in November 2022, the Compensation Committee adjusted the base salary for certain of our NEOs for fiscal 2023.
Compensation Elements
Short-Term Incentives The LPP continues to reinforce our commitment to profitable growth and effective cash management using specific measures and targets assigned to each participant based on his or her respective role in the organization. As described below, the LPP provides for cash incentive payouts to eligible employees based on the level of achievement of certain Company-wide and line of business-specific target goals and the results of the Company’s “Corporate Scorecard.” For fiscal 2023, select officers and leaders of the Company, including the NEOs, were eligible to participate in the LPP. As shown in the following chart, an employee’s target LPP award is calculated by multiplying (1) the NEO’s annual base salary as of July 1 of the applicable fiscal year (other than Messrs. Demetriou and Pragada), by (2) the NEO’s target bonus percentage. For the calculation of Messrs. Demetriou’s and Pragada’s target awards, the base salary amounts and target bonus percentages were pro-rated based on the amount of time each of Messrs. Demetriou and Pragada served in each position during the fiscal year. The NEO’s actual LPP award amount is calculated by multiplying (1) the NEO’s target LPP award by (2) the corporate performance achievement factor, which includes the results of the “Corporate Scorecard.”
Compensation Elements
| Named Executive Officer | Annual Incentive Target as a % of Base Salary | | | | Fiscal 2022 | Fiscal 2023 (1) | | Robert V. Pragada | 120% | 150% | | Steven J. Demetriou | 165% | 100% | | Claudia Jaramillo | 90% | 100% | | Kevin C. Berryman | 110% | 110% | | Steve A. Arnette | 100% | 100% | | Joanne E. Caruso | 110% | 110% | | Patrick X. Hill | 100% | 100% |
Compensation Elements
| (1) Target percentages reflected in this column represent the percentages as of the end of the 2023 fiscal year. The annual incentive targets for Messrs. Pragada and Demetriou and Ms. Jaramillo were adjusted in connection with the changes to their respective roles and in each case, the target percentage was pro-rated based on the amount of time in each position during the fiscal year. |
Compensation Elements
Fiscal 2023 — Corporate Performance Achievement Factor Results Each year, the Company establishes performance achievement factors for each participant based on his or her role in the Company. All NEOs’ bonus opportunities for fiscal 2023 were tied entirely to Company-wide metrics and the results of the Company’s “Corporate Scorecard.” The fiscal 2023 performance achievement factor results are reflected in the tables below.
Compensation Elements
| Performance Metrics | 2023 Actual Results | Performance Levels | | | 2023 Actual Performance Level Achievement (1) (% of Payout) | Relative Weighting (%) | 2023 Actual Performance Achievement (% of Target) | | | | Minimum (25% Payout) | Target (100% Payout) | Maximum (200% Payout) | | | | | Consolidated Operating Profit | $1,432.4M | $1,223.9M | $1,439.9M | $1,655.9M | 97.4% | 60% | 58.4% | | Consolidated DSO | 59.1 | 62.8 | 59.8 | 56.8 | 123.4% | 10% | 12.3% | | Consolidated GP in Backlog | $6,552.3M | $6,323.7M | $6,656.5M | $6,989.3M | 76.5% | 15% | 11.5% | | DVS B/U OP | $26.9M | $22.5M | $26.4M | $30.4M | 112.6% | 10% | 11.3% | | Culture Survey Inclusion Composite Score (2) | 77.3 | 73.8 | 74.5 | 76.0 | 200.0% | 5% | 10% | | Total | | | | | | 100% | 103.5% |
Compensation Elements
| (1) Actual performance level achievement is calculated by linear interpolation between approved performance levels to determine the payout percentages. |
Compensation Elements
| Forms of 2023 Long-Term Incentive Grants(1) | Weight | Performance Metrics and Vesting Period | | PSUs | 60% | Performance Metrics: - 50% to vest based upon Adj. EPS growth over 3-year period - 50% to vest based upon ROIC over 3-year period | | RSUs | 40% | 25% annual vesting over 4-year period |
Compensation Elements
| (1) Mr. Demetriou’s fiscal 2023 annual equity-based compensation consisted 100% of RSUs with a one-year vesting period. |
Compensation Elements
In addition, in November 2022, due to ongoing economic uncertainty, and in particular the impact of global economic conditions on the Company’s performance in the second half of the fiscal year, and the Company’s efforts to manage costs, the Compensation Committee exercised negative discretion in the payout of the fiscal 2022 LPP awards and determined that approximately 55% of the payout would be made in the form of cash. Rather than reduce the payout to that amount, however, the Compensation Committee determined that to incentivize retention, the remaining 45% would be made in the form of a one-time special grant of time-based RSUs with a three-year ratable vesting schedule under the Company’s Stock Incentive Plan, as amended (the “Stock Incentive Plan”). These grants, which were made on December 1, 2022, provide for accelerated vesting in the event of Retirement, death or Disability, an involuntary termination other than for Cause (each as defined in the Stock Incentive Plan), or as otherwise provided in the Company’s Executive Severance Plan. The Compensation Committee currently intends for future LPP payouts to be made entirely in cash, although it retains the discretion to modify this practice.
Compensation Elements
| Named Executive Officer | Grant Date | Reason for Grant | Target PSUs Awarded (1) | Target PSU Value Awarded (2) | RSUs Awarded (2) | RSU Value Awarded (2) | Total Value of All Awards (2) | | Robert V. Pragada | 11/16/2022 | Annual Grant | 36,034 | $4,499,926 | 24,024 | $3,000,117 | $7,939,420 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 3,528 | $439,377 | | | Steven J. Demetriou | 11/16/2022 | Annual Grant | | | 20,020 | $2,500,098 | $3,430,785 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 7,473 | $930,687 | | | Claudia Jaramillo | 11/16/2022 | Annual Grant | 9,130 | $1,140,154 | 6,085 | $759,895 | $1,958,209 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 467 | $58,160 | | | Kevin C. Berryman | 11/16/2022 | Annual Grant | 16,816 | $2,099,982 | 11,211 | $1,400,030 | $3,874,504 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 3,007 | $374,492 | | | Stephen A. Arnette | 11/16/2022 | Annual Grant | 5,766 | $720,058 | 4,245 | $530,116 | $1,463,647 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 1,312 | $163,396 | | | Joanne E. Caruso | 11/16/2022 | Annual Grant | 9,370 | $1,170,126 | 6,245 | $779,876 | $2,246,157 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 2,378 | $296,156 | | | Patrick X. Hill | 11/16/2022 | Annual Grant | 7,208 | $900,135 | 4,804 | $599,924 | $1,738,677 | | | 12/01/2022 | Fiscal 2022 LPP Award | | | 1,916 | $238,619 | |
Compensation Elements
| (1) Represents the target payout shares as described under “Executive Compensation — 2023 Grants of Plan Based Awards” below. PSUs can payout from 0-200% of target. |
Compensation Elements
| (2) Represents the grant date fair value of PSUs (assuming target level of shares) and RSUs granted (including the fiscal 2022 LPP awards) under the Company’s Stock Incentive Plan computed in accordance with FASB ASC Topic 718. The grant date fair value per share for the November 16, 2022 awards was $124.88 and the grant date fair value per share for the December 1, 2022 awards was $124.54. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts. See “— Narrative Disclosure to Summary Compensation Table — Payment of Dividends and Dividend Equivalent Rights” and “Compensation Discussion and Analysis — Compensation Elements — Equity-Based Compensation — Dividend Equivalents” for more information regarding Dividend Equivalents. Amounts reported in this column represent the combined value of the annual grant and the fiscal 2022 LPP grant. |
Compensation Elements
Fiscal 2023 Equity Awards PSU Awards Fiscal 2023 PSU awards will vest, following a 3-year performance period (starting on the first day of fiscal 2023 and ending on the last day of fiscal 2025), based on achievement of the following performance metrics:
Compensation Elements
| - | 50% of the PSUs will vest based on the Company’s level of achievement of a specified adjusted EPS goal over a 3-year performance period (the “EPS Based PSU Awards”) |
Compensation Elements
| - | 50% of the PSUs will vest based on the Company’s level of achievement of a specified ROIC goal over the same 3-year performance period (the “ROIC Based PSU Awards”) |
Compensation Elements
The payout is determined by linear interpolation for performance achievement between the approved ranges for each year of the 3-year performance period. EPS Based PSU Awards: The Compensation Committee believes that Adjusted EPS is a key indicator of a company’s performance for shareholders. It is the predominant metric used in performance-based equity awards of the Company’s peers and its use is intended to improve the focus on profitability, growth, and financial discipline, while aligning the interests of the Company’s senior executives with the long-term interests of shareholders.
Compensation Elements
For awards made in fiscal 2023, the number of EPS Based PSU Awards that will vest (and the corresponding number of shares that will be issued) is based on the Company’s average adjusted EPS measured at the end of fiscal 2025. For grants made in fiscal 2022 and previous years, the Company’s average adjusted EPS is measured at the end of each fiscal year and amounts are locked in annually but are not distributed until after the 3-year performance period. For purposes of calculating the payouts for the EPS Based PSU awards: “Adjusted EPS” for any fiscal period is computed by dividing Adjusted Net Earnings by the weighted average number of shares of the Company’s common stock outstanding during the period. “Adjusted Net Earnings” means the net earnings attributable to the Company as reported in its consolidated financial statements for such period determined in accordance with Generally Accepted Accounting Principles (GAAP) (A) as may be adjusted to eliminate the effects of (1) costs associated with restructuring and integration activities; and (2) gains or losses associated with discontinued operations, as determined in accordance with GAAP, but limited to the first reporting period an operation is determined to be discontinued and all subsequent periods (i.e., there will be no retroactive application of the adjustment); (B) as adjusted for all gains or losses associated with events or transactions that the Compensation Committee has determined are unusual in nature, infrequently occurring and otherwise not indicative of the Company’s normal operations, and therefore, not indicative of the underlying Company performance (for these purposes, such events or transactions could include: (1) settlements of claims and litigation, (2) disposals of operations including a disposition of a significant amount of the Company’s assets, (3) losses on sales of investments, (4) changes in laws and/or regulations, and (5) acquisitions, dispositions and/or strategic investments); and (C) exclusion of amortization of purchased intangibles. The “EPS Performance Multiplier” is determined by straight line interpolation between established minimum, target and maximum goals, based upon the Company’s Adjusted EPS as measured against the indicated fiscal periods. The Compensation Committee set these metrics based on the Company’s business plan at the time of grant. ROIC Based PSU Awards: The Compensation Committee believes that ROIC is an effective means of linking executive compensation to value creation that holds leaders accountable for the efficient use of capital and has used this performance metric for awards since fiscal 2017. For grants made in fiscal 2023, the number of ROIC Based PSU Awards that will vest (and the corresponding number of shares to be issued) is based on the Company’s average adjusted ROIC measured at the end of fiscal 2025. For grants made in fiscal 2022 and previous years, the Company’s average adjusted ROIC is measured at the end of each fiscal year and amounts are locked in annually but are not distributed until after the 3-year performance period. For purposes of calculating the payouts for the ROIC Based PSU awards: “Return on Invested Capital,” or ROIC, is computed by dividing Adjusted Net Earnings by the average of beginning and ending invested capital during the period, and where invested capital is the sum of equity plus long-term debt less cash and cash equivalents. The “ROIC Performance Multiplier” is determined by straight line interpolation between established minimum, target and maximum goals, based upon the average Company’s ROIC over the relevant fiscal periods. The Compensation Committee set these metrics based on the Company’s business plan at the time of grant.
Compensation Elements
RSU Awards Vesting of RSU Awards The annual RSU grants awarded to our NEOs on November 16, 2022 (except for Mr. Demetriou) vest 25% per year on each of the first, second, third and fourth anniversaries of the grant date, subject to the NEO’s continuous employment through each such vesting date other than in the case of death, disability or a qualified termination event, in which case, vesting will accelerate. The RSUs granted to Mr. Demetriou on November 16, 2022 vest on the 1-year anniversary of the grant date. The RSUs awarded to our NEOs on December 1, 2022, as part of the fiscal 2022 LPP award vest 33 1/3% per year on each of the first, second and third anniversaries of the grant date subject to the NEO’s continuous employment through each such vesting date other than in the case of death, disability, retirement or a qualified termination event, in which case, vesting will accelerate. Dividend Equivalent Rights All RSU awards are entitled to accumulated dividend equivalent rights that are subject to the same vesting, payment and other terms and conditions as the underlying award to which the dividend equivalent relates. The crediting of dividend equivalents is intended to treat the equity award holders consistently with shareholders and preserve the equity-based incentives intended by the Company when the awards were granted. The dividend equivalents pay in cash upon the vesting and settlement of the underlying RSUs and are forfeited if the underlying RSUs are forfeited. Long-Term Incentive Plan Metrics and Performance Attainment — PSUs with Performance Periods Ending in Fiscal 2023 All of our NEOs, except for Ms. Jaramillo, served as executive officers of the Company in fiscal 2020 and received grants of PSUs at that time. The 2020 PSUs awards were based on a 3-year performance period. If certain thresholds of performance were not attained, then no payout was earned for the awards. The performance metrics associated with these PSUs, as well as weighting and the associated performance period are shown below:
Compensation Elements
2020 EPS Based PSU Awards The 2020 EPS Based PSU awards were tied to Compounded Annual Adj. EPS Growth over a 3-year performance period:
Compensation Elements
| • | The total number of PSUs awarded accumulated over the 3-year performance period in independent segments: |
Compensation Elements
| - | 1/3 of the 2020 EPS Based PSUs were based on Adj. EPS Growth baseline from fiscal 2019 to fiscal 2020 |
Compensation Elements
| - | 2/3 of the 2020 EPS Based PSUs were based on the Compounded Annual Adj. EPS Growth Rate from fiscal 2020 to fiscal 2021 |
Compensation Elements
| - | The final determination as to shares to be distributed pursuant to the 2020 EPS Based PSUs was based on the Compounded Annual EPS Adj. Growth Rate from fiscal 2020 to fiscal 2022 |
Compensation Elements
| | Performance Period | Adj. EPS | Average Annual Adj. EPS Growth | Approved Range | | | EPS Performance Multiplier | Lock-In PSUs (1) | | | | | | Min | Target | Max | | | | Baseline Earnings | FY19 | $4.72 | | | | | | | | Year 1 | FY20 | $5.48 | 16.1% | 13.2% | 16.5% | 19.8% | 91% | 30% | | Year 2 | FY20 - FY21 | $6.29 | 15.4% | 10.6% | 13.3% | 16.0% | 179% | 89% | | Year 3 | FY20 - FY22 | $6.93 | 13.7% | 9.8% | 12.2% | 14.6% | 162% | 42.8% | | | | | | | | | Total | 161.8% |
Compensation Elements
| (1) Percentages in this column represent (i) for Year 1, the product of the EPS Performance Multiplier for Year 1 times 1/3rd of the Target 2020 EPS Based PSU Award, (ii) for Year 2, the product of the EPS Performance Multiplier for Year 2 times 2/3(rds)of the Target 2020 EPS Based PSU Award, less the percentage of Lock-In PSUs for Year 1 and (iii) for Year 3, the product of the EPS Performance Multiplier for Years 1-3 times the total Target 2020 EPS Based PSU Award, less the percentage of Lock-In PSUs for Years 1 and 2. |
Compensation Elements
| Total EPS Based PSUs GrantedX | 3 Year EPS Performance Multiplier | = | 161.8% of Shares to be Distributed |
Compensation Elements
| Participant Name | Vesting Date | EPS Based Awards Granted | % Target Earned | EPS PSU Shares Earned | | Robert V. Pragada | 11/13/2022 | 10,620 | 161.8% | 17,182 | | Steven J. Demetriou | 11/13/2022 | 37,010 | 161.8% | 59,882 | | Kevin C. Berryman | 11/13/2022 | 9,655 | 161.8% | 15,620 | | Stephen A. Arnette | 11/13/2022 | 966 | 161.8% | 1,561 | | Joanne E. Caruso | 11/13/2022 | 4,506 | 161.8% | 7,289 | | Patrick X. Hill | 11/13/2022 | 2,253 | 161.8% | 3,644 |
Compensation Elements
2020 ROIC Based PSU Awards The 2020 ROIC Based PSU awards were tied to average ROIC over a 3-year performance period:
Compensation Elements
| • | The total number of PSUs awarded accumulated over the 3-year performance period in independent segments: |
Compensation Elements
| - | 1/3 of the 2020 ROIC Based PSUs were based on fiscal 2020 ROIC |
Compensation Elements
| - | 2/3 of the 2020 ROIC Based PSUs were based on ROIC from fiscal 2020 to fiscal 2021 |
Compensation Elements
| - | The final determination as to shares to be distributed pursuant to the 2020 ROIC Based PSUs was based on the ROIC from fiscal 2020 to fiscal 2022 |
Compensation Elements
| | Performance Period | ROIC | Average Annual ROIC | Approved Range | | | ROIC Performance Multiplier | Lock-In PSUs (1) | | | | | | Min | Target | Max | | | | Baseline | FY19 | 10.2% | | | | | | | | Year 1 | FY20 | 11.1% | 11.1% | 9.1% | 10.7% | 12.3% | 125% | 42% | | Year 2 | FY20-FY21 | 11.4% | 11.3% | 9.4% | 11.0% | 12.6% | 119% | 36% | | Year 3 | FY20-FY22 | 11.1% | 11.2% | 9.5% | 11.2% | 12.9% | 100% | 22.7% | | | | | | | | | Total | 100.7% |
Compensation Elements
| (1) Percentages in this column represent (i) for Year 1, the product of the ROIC Performance Multiplier for Year 1 times 1/3rd of the Target 2020 ROIC Based PSU Award, (ii) for Year 2, the product of the ROIC Performance Multiplier for Year 2 times 2/3rds of the Target 2020 ROIC Based PSU Award, less the percentage of Lock-In PSUs for Year 1 and (iii) for Year 3, the product of the ROIC Performance Multiplier for Years 1-3 times the total Target 2020 ROIC Based PSU Award, less the percentage of Lock-In PSUs for Years 1 and 2. |
Compensation Elements
| Total ROIC Based PSUs GrantedX | 3 Year ROIC Performance Multiplier | = | 100.7% of Shares to be Distributed |
Compensation Elements
| Named Executive Officer | Vesting Date | ROIC Based Awards Granted | % Target Earned | ROIC PSU Shares Earned | | Robert V. Pragada | 11/13/2022 | 10,620 | 100.7% | 10,692 | | Steven J. Demetriou | 11/13/2022 | 37,010 | 100.7% | 37,268 | | Kevin C. Berryman | 11/13/2022 | 9,655 | 100.7% | 9,721 | | Stephen A. Arnette | 11/13/2022 | 966 | 100.7% | 972 | | Joanne E. Caruso | 11/13/2022 | 4,506 | 100.7% | 4,536 | | Patrick X. Hill | 11/13/2022 | 2,253 | 100.7% | 2,268 |
Other Benefits
Employee Stock Purchase Plans: The Company has qualified employee stock purchase plans in which all employees meeting certain minimum eligibility requirements in certain countries are eligible to participate. The Company adopted a safe-harbor plan design in 2006 that provides for a 5% discount from the closing price of a share of common stock at the end of each purchase period. The safe-harbor plan results in no accounting cost to the Company. Non-Qualified Executive Deferral Plan: Select employees, including the U.S.-based NEOs, meeting certain compensation minimums may elect to participate in the Company’s Executive Deferral Plan (“EDP”) whereby a portion of compensation (including salary, bonus and/or equity compensation) is deferred and paid to the employees at a future date, including upon retirement or death. Participant deferrals are credited with earnings and losses based upon the actual performance of the deemed investments selected by participants with equity compensation deferrals generally being credited with earnings and losses based on the actual performance of the Company’s common stock. See “Executive Compensation — Non-Qualified Deferred Compensation” below for a further description of the EDP. Executive Severance Plan: The Company has adopted an Executive Severance Plan that provides severance benefits to certain key executives designated by the Compensation Committee from time to time, including the NEOs, in the event of either (1) a qualifying termination of employment by the Company that is unrelated to a change of control or (2) a qualifying termination of employment by the Company during the 2-year period following a change of control. Perquisites The Company provides limited perquisites to its executives. They may have spousal travel paid for by the Company only for an approved business purpose, in which case a related tax gross-up is provided. NEOs are also provided with financial planning assistance and annual health assessment benefits. The Company leases a private aircraft to allow certain executive officers, primarily the Chair, and the CEO, and if approved by the CEO, the CFO, to travel for business purposes safely and efficiently. Use of a private aircraft provides a confidential and highly productive environment for executive officers to conduct business while traveling. We do not allow personal usage of the private aircraft at the Company’s expense. Incidental travel by family members of an executive officer in connection with such executive’s business travel is permitted so long as the executive reimburses the Company for the reasonable cost of such travel. Payments Upon Termination or Change in Control Executive Severance Plan: The Company provides an Executive Severance Plan that includes the following severance benefits to certain key executives, including the NEOs, in the event of either (1) a qualifying involuntary termination of employment that is unrelated to a change in control or (2) a qualifying termination of employment during the 2-year period following a change of control. Payments under this plan are conditioned upon the receipt of a customary waiver and general release of claims from the executive. In addition, following termination, the executives will be subject to restrictive covenants, including non-disclosure of confidential information, non-disparagement restrictions and 12-month non-competition and non-solicitation obligations. Payments under this plan do not include any tax gross-ups.
Other Benefits
| • | Non-Change in Control Severance Benefits — For fiscal 2023, in the event of a termination of the participant’s employment by the Company other than for cause (as defined in the Executive Severance Plan), the participant will be entitled to receive the following benefits: (1) a lump sum cash payment equal to 1.5 times (for the Executive Chair and the CEO) or 1 times (for the other NEOs and covered executives) the sum of the participant’s (x) base salary and (y) target annual incentive award; (2) a lump sum cash payment equal to the participant’s annual incentive award based on actual performance, pro-rated based on the number of days the participant was employed during the fiscal year of termination and (3) a lump sum cash payment equal to 1.5 times (for the Executive Chair and the CEO) or 1 times (for the other NEOs and covered executives) the sum of (x) the annual premium for continued participation in the Company’s group health plans under the Consolidated Omnibus |
Other Benefits
| Budget Reconciliation Act (COBRA) and (y) the annual fee for continued receipt of financial advisory services. In addition, the participant’s unvested and outstanding equity awards that are scheduled to vest within the nine-month period following the date of termination will remain outstanding and continue to vest in accordance with their original vesting schedule. |
Other Benefits
| • | Change in Control Severance Benefits — In the event of a termination of the participant’s employment by the Company other than for cause or by the participant for good reason (as defined in the Executive Severance Plan), in each case within the 2-year period after a change in control (as defined in the Executive Severance Plan), the participant will be entitled to receive the following benefits: (1) a lump sum cash payment equal to 2 times (for the Executive Chair and the CEO) or 1 times (for the other NEOs and covered executives) the sum of the participant’s (x) base salary and (y) target annual incentive award; and (2) a lump sum cash payment equal to the participant’s annual incentive award based on actual performance, prorated based on the number of days the participant was employed during the fiscal year of termination; and (3) a lump sum cash payment equal to 2 times (for the Executive Chair and the CEO) or 1 times (for the other NEOs and covered executives) the sum of (x) the annual COBRA premium for continued participation in the Company’s group health plans and (y) the annual fee for continued receipt of financial advisory services. In the event such termination occurs, unvested and outstanding equity awards are governed by the Stock Incentive Plan, as described below. |
Other Policies
vesting periods on equity awards, insider-trading prohibitions, and independent Compensation Committee oversight. Based on this review, both for our executive officers and all other employees, the Company and the Independent Consultant concluded that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee reviewed and approved this conclusion.
Summary Compensation Table
Summary Compensation Table The table below summarizes the total compensation earned by the Company’s named executive officers (“NEOs”) in fiscal 2023, 2022, and 2021.
Summary Compensation Table
| Name & Principal Position | Fiscal Year | Salary (1) ($) | Bonus ($) | Stock Awards (2) ($) | Non-Equity Incentive Plan Compensation (3) ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation (4) ($) | Total ($) | | Robert V. Pragada Chief Executive Officer | 2023 | 1,177,404 | — | 7,939,420 | 1,743,141 | — | 38,684 | 10,898,649 | | | 2022 | 905,385 | — | 5,000,068 | 552,417 | — | 34,831 | 6,492,702 | | | 2021 | 838,385 | — | 7,500,115 | 1,372,594 | — | 34,980 | 9,746,073 | | Steven J. Demetriou (5) Executive Chair | 2023 | 1,307,211 | — | 3,430,785 | 1,655,146 | — | 40,632 | 6,433,775 | | | 2022 | 1,411,154 | — | 12,000,106 | 1,170,154 | — | 34,107 | 14,615,521 | | | 2021 | 1,362,375 | — | 11,500,101 | 3,345,697 | — | 67,057 | 16,275,230 | | Claudia Jaramillo Executive Vice President and Chief Financial Officer | 2023 | 677,884 | — | 1,958,209 | 637,732 | — | 67,238 | 3,341,063 | | Kevin C. Berryman (6) Former President and Chief Financial Officer | 2023 | 860,000 | — | 3,874,504 | 979,290 | — | 38,919 | 5,752,712 | | | 2022 | 855,385 | — | 3,200,038 | 470,799 | — | 28,984 | 4,555,206 | | | 2021 | 833,532 | — | 7,000,119 | 1,372,594 | — | 45,100 | 9,251,345 | | Stephen A. Arnette Executive Vice President, President, Critical Mission Solutions | 2023 | 530,769 | — | 1,413,570 | 559,003 | — | 28,408 | 2,531,751 | | Joanne E. Caruso Executive Vice President, Chief Legal and Administrative Officer | 2023 | 654,999 | — | 2,246,157 | 797,095 | — | 39,627 | 3,737,878 | | | 2022 | 670,769 | — | 1,600,092 | 372,260 | — | 16,181 | 2,659,301 | | | 2021 | 635,108 | — | 1,500,091 | 950,714 | — | 18,286 | 3,104,199 | | Patrick X. Hill (7) Executive Vice President, President, People & Places Solutions | 2023 | 595,869 | — | 1,738,677 | 622,389 | — | 16,633 | 2,973,568 | | | 2022 | 602,669 | — | 1,350,132 | 299,932 | — | 16,071 | 2,268,804 |
Summary Compensation Table
| (1) Consists of base salary earned during the fiscal year including any time off with pay. |
Summary Compensation Table
| (2) Represents the grant date fair value of stock awards granted under the Stock Incentive Plan in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (FASB ASC Topic 718). Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts. For the fiscal 2023 amounts, this column reflects the combined value of RSUs and PSUs granted in November and December 2022 (with PSUs reflecting target performance). At the highest level of performance, the value of such fiscal 2023 PSUs on the grant date would be $8,999,852 for Mr. Pragada, $2,280,309 for Ms. Jaramillo $4,199,964 for Mr. Berryman, $1,440,116 for Mr. Arnette, $2,340,251 for Ms. Caruso, and $1,800,270 for Mr. Hill. At the highest level of performance, the value of such fiscal 2022 PSUs on the grant date would be $6,000,198 for Mr. Pragada, $14,400,243 for Mr. Demetriou, $3,839,987 for Mr. Berryman, $1,919,994 for Ms. Caruso, and $2,760,463 for Mr. Hill. At the highest level of performance, the value of such fiscal 2021 PSUs on the grant date would be: $4,200,339 for Mr. Pragada, $13,800,332 for Mr. Demetriou; $3,600,050 for Mr. Berryman; and $1,800,025 for Ms. Caruso. |
Summary Compensation Table
| (3) Represents the annual incentive awards earned in each fiscal year pursuant to the LPP, as determined by the Compensation Committee. See “Compensation Discussion and Analysis — Compensation Elements — Short-Term Incentives” for a description of how non-equity incentive plan compensation is determined for the NEOs. Fiscal 2022 payments were made in the form of 55% cash and 45% RSUs. Amounts shown in this column reflect only the cash portion of the LPP awards. There were no earnings on non-equity incentive plan compensation earned or paid to the NEOs in or for fiscal 2023. |
Summary Compensation Table
| (4) For fiscal 2023: Mr. Pragada received $14,850 associated with a 401(k) Company match, $1,308 for basic life insurance premiums paid for by the Company, $18,051 for financial planning assistance, and $4,475 for an annual health assessment. Mr. Demetriou received $14,850 associated with a 401(k) Company match, $65 for basic life insurance premiums paid for by the Company, $19,455 for financial planning assistance and associated expenses, $5,096 for an annual health assessment, and a gift valued at $854 and $312 in taxes associated with the gift. Ms. Jaramillo received $14,850 associated with a 401(k) Company match, $981 for basic life insurance premiums paid for by the Company, $18,051 for financial planning assistance, $5,144 for an annual health assessment, and $21,342 for relocation expenses, as well as $6,870 in taxes associated with the relocation. Mr. Berryman received $14,850 associated with a 401(k) Company match, $1,126 for basic life insurance premiums paid for by the Company, $18,051 for financial planning assistance, and $4,891 for an annual health assessment. Mr. Arnette received $10,675 associated with a 401(k) Company match, $706 for basic life insurance premiums paid for by |
Summary Compensation Table
| the Company, and $17,027 for financial planning assistance. Ms. Caruso received $14,850 associated with a 401(k) Company match, $916 |
Summary Compensation Table
| 2024 Proxy Statement | | 55 |
Summary Compensation Table
| for basic life insurance premiums paid for by the Company, $14,261 for financial planning assistance, and $9,600 for an annual health assessment. Mr. Hill received Company superannuation contributions (401(k)) of $16,633. |
Summary Compensation Table
| (5) Mr. Demetriou stopped serving as CEO of the Company effective as of January 24, 2023 and is currently serving as our Executive Chair. |
Summary Compensation Table
| (6) Mr. Berryman stopped serving as CFO of the Company effective as of August 14, 2023 and is currently serving as Special Advisor to the CEO. |
Summary Compensation Table
| (7) The amounts for fiscal 2023 reported in this table for Mr. Hill that are paid in AUD have been converted to USD using the actual average exchange rate in September 2023 (1 AUD = 0.6442 USD). |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The table below summarizes all grants of plan-based awards to the NEOs in fiscal 2023:
2023 Grants of Plan-Based Awards
| Name | Grant Date | Estimated Future Payouts under Non-Equity Incentive Plan Awards ($) (1) | | | Estimated Future Payouts under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (3) | Grant Date Fair Value of Stock Awards (6) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Robert V. Pragada | 11/16/2022 | | | | | | | 24,024 | 3,000,117 | | | 11/16/2022 | | | | 4.504 | 18,017(4) | 36,034(4) | | 2,249,963 | | | 11/16/2022 | | | | 4.504 | 18,017(5) | 36,034(5) | | 2,249,963 | | | 12/01/2022 | | | | | | | 3,528 | 439,377 | | | | 420,971 | 1,683,884 | 3,367,769 | | | | | | | Steven J. Demetriou | 11/16/2022 | | | | | | | 20,020 | 2,500,098 | | | 12/01/2022 | | | | | | | 7,473 | 930,687 | | | | 399,720 | 1,598,881 | 3,197,762 | | | | | | | Claudia Jaramillo | 11/16/2022 | | | | | | | 6,085 | 759,895 | | | 11/16/2022 | | | | 1,441 | 4,565(4) | 9,130(4) | | 570,077 | | | 11/16/2022 | | | | 1,441 | 4,565(5) | 9,130(5) | | 570,077 | | | 12/01/2022 | | | | | | | 467 | 58,160 | | | | 154,013 | 616,053 | 1,232,105 | | | | | | | Kevin C. Berryman | 11/16/2022 | | | | | | | 11,211 | 1,400,030 | | | 11/16/2022 | | | | 2,102 | 8,408(4) | 16,816(4) | | 1,049,991 | | | 11/16/2022 | | | | 2,102 | 8,408(5) | 16,816(5) | | 1,049,991 | | | 12/01/2022 | | | | | | | 3,007 | 374,492 | | | | 236,500 | 946,000 | 1,892,000 | | | | | | | Stephen A. Arnette | 11/16/2022 | | | | | | | 4,245 | 530,116 | | | 11/16/2022 | | | | 721 | 2,883(4) | 5,766(4) | | 360,029 | | | 11/16/2022 | | | | 721 | 2,883(5) | 5,766(5) | | 360,029 | | | 12/01/2022 | | | | | | | 1,312 | 163,396 | | | | 135,000 | 540,000 | 1,080,000 | | | | | | | Joanne Caruso | 11/16/2022 | | | | | | | 6,245 | 779,876 | | | 11/16/2022 | | | | 1,171 | 4,685(4) | 9,370(4) | | 585,063 | | | 11/16/2022 | | | | 1,171 | 4,685(5) | 9,370(5) | | 585,063 | | | 12/01/2022 | | | | | | | 2,378 | 296,156 | | | | 192,500 | 769,999 | 1,539,998 | | | | | | | Patrick X. Hill (7) | 11/16/2022 | | | | | | | 4,804 | 599,924 | | | 11/16/2022 | | | | 901 | 3,604(4) | 7,208(4) | | 450,068 | | | 11/16/2022 | | | | 901 | 3,604(5) | 7,208(5) | | 450,068 | | | 12/01/2022 | | | | | | | 1,916 | 238,619 | | | | 150,308 | 601,232 | 1,202,464 | | | | | |
2023 Grants of Plan-Based Awards
| (1) Amounts represent the 2023 projected award under the Leadership Performance Plan (LPP) based on the Company’s internal plan at the start of fiscal 2023. See “Compensation Discussion and Analysis — Compensation Elements — Short-Term Incentives” above for a description of the LPP and the way bonuses are computed. The amounts reported in the “Threshold,” “Target” and “Maximum” columns reflect estimated future payouts under the LPP. |
2023 Grants of Plan-Based Awards
| (2) Amounts represent the threshold, target and maximum payout shares of awards of EPS Based PSUs and ROIC Based PSUs granted under the Stock Incentive Plan in fiscal 2023. |
2023 Grants of Plan-Based Awards
| (3) Represents the RSUs granted under the Stock Incentive Plan. |
2023 Grants of Plan-Based Awards
| (4) Represents the threshold, target and maximum payout shares of the grants of the EPS Based PSUs that each NEO could earn under the Stock Incentive Plan. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis — Compensation Elements — Equity Based Compensation — Fiscal 2023 Equity Awards — EPS Based Awards” for a discussion of how the number of shares ultimately issued will be determined. |
2023 Grants of Plan-Based Awards
| (5) Represents the threshold, target and maximum payout shares of the grants of the ROIC Based PSUs that each NEO could earn under the Stock Incentive Plan. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Compensation Discussion and Analysis — Compensation Elements — Equity Based Compensation — Fiscal 2023 Equity Awards — ROIC Based Awards” for a discussion of how the number of shares ultimately issued will be determined. |
2023 Grants of Plan-Based Awards
| (6) Represents the grant date fair value of RSUs and PSUs granted (assuming target level of shares) under the Stock Incentive Plan computed in accordance with FASB ASC Topic 718. The grant date fair value for those awards granted on November 16, 2022 was $124.88 per share, and the grant date value for the awards granted on December 1, 2022 was $124.54 per share. Please refer to Note 2, Significant Accounting Policies, of Notes to Consolidated Financial Statements included in the Company’s 2023 Annual Report on Form 10-K for a discussion of the assumptions used to calculate these amounts. See “— Narrative Disclosure to Summary Compensation Table — Payment |
2023 Grants of Plan-Based Awards
| 2024 Proxy Statement | | 57 |
2023 Grants of Plan-Based Awards
| of Dividends and Dividend Equivalent Rights” above and “Compensation Discussion and Analysis — Compensation Elements — Equity-Based Compensation — Dividend Equivalents” above for more information regarding Dividend Equivalents. |
2023 Grants of Plan-Based Awards
| (7) Amounts reported for Mr. Hill under the column “Estimated Future Payouts under Non-Equity Incentive Plan Awards” have been converted from AUD to USD using the actual average exchange rate in September 2023 (1 AUD = 0.6442 USD). |
2023 Grants of Plan-Based Awards
| 58 | | 2024 Proxy Statement |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| Outstanding Equity Awards at Fiscal Year-End for 2023 | | | | | | | | | | | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (1) | | Option Exercise Price ($) (2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (3) | Market Value of Shares or Units of Stock That Have Not Vested ($) (4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights That Have Not Vested ($) (6) | | Name/Grant Date | Exercisable (#) | Unexercisable (#) | | | | | | | | Robert V. Pragada | | | | | | | | | | 11/13/2019 | | | | | 3,541 | 483,347 | | | | 11/18/2020 | | | | | 6,651 | 907,862 | 9,978 | 2,723,994 | | 11/18/2020 | | | | | | | 9,978 | 1,361,997 | | 03/08/2021 | | | | | 33,827 | 4,617,386 | | | | 11/17/2021 | | | | | 10,316 | 1,408,134 | 10,316 | 1,408,134 | | 11/17/2021 | | | | | | | 10,316 | 1,408,134 | | 11/16/2022 | | | | | 24,024 | 3,279,276 | 18,017 | 2,459,321 | | 11/16/2022 | | | | | | | 18,017 | 4,918,641 | | 12/01/2022 | | | | | 3,528 | 481,572 | | | | Steven J. Demetriou | | | | | | | | | | 11/13/2019 | | | | | 12,337 | 1,684,001 | | | | 11/18/2020 | | | | | 21,855 | 2,983,208 | 32,783 | 8,949,759 | | 11/18/2020 | | | | | | | 32,783 | 4,474,880 | | 11/17/2021 | | | | | 24,758 | 3,379,467 | 24,758 | 3,379,467 | | 11/17/2021 | | | | | | | 24,758 | 3,379,467 | | 11/16/2022 | | | | | 20,020 | 2,732,730 | | | | 12/01/2022 | | | | | 7,473 | 1,020,065 | | | | Claudia Jaramillo | | | | | | | | | | 07/01/2022 | | | | | 5,934 | 809,991 | 4,272 | 583,128 | | 07/01/2022 | | | | | 4,273 | 583,265 | 4,272 | 583,128 | | 11/16/2022 | | | | | 6,085 | 830,603 | 4,565 | 623,123 | | 11/16/2022 | | | | | | | 4,565 | 1,246,245 | | 12/01/2022 | | | | | 467 | 63,746 | | | | Kevin C. Berryman | | | | | | | | | | 05/28/2015 | 17,000 | | 43.34 | 05/28/2025 | | | | | | 11/13/2019 | | | | | 3,218 | 439,257 | | | | 11/18/2020 | | | | | 5,702 | 778,323 | 8,552 | 2,334,696 | | 11/18/2020 | | | | | | | 8,552 | 1,167,348 | | 03/08/2021 | | | | | 33,827 | 4,617,386 | | | | 11/17/2021 | | | | | 6,603 | 901,310 | 6,602 | 901,173 | | 11/17/2021 | | | | | | | 6,602 | 901,173 | | 11/16/2022 | | | | | 11,211 | 1,530,302 | 8,408 | 1,147,692 | | 11/16/2022 | | | | | | | 8,408 | 2,295,384 | | 12/01/2022 | | | | | 3,007 | 410,456 | | | | Stephen A. Arnette | | | | | | | | | | 11/13/2019 | | | | | 322 | 43,953 | | | | 11/18/2020 | | | | | 618 | 84,357 | 927 | 253,071 | | 11/18/2020 | | | | | | | 927 | 126,536 | | 03/04/2021 | | | | | 443 | 60,470 | | | | 11/17/2021 | | | | | 671 | 91,592 | 671 | 91,592 | | 11/17/2021 | | | | | | | 671 | 91,592 | | 03/02/2022 | | | | | 1,601 | 218,537 | 1,601 | 218,537 | | 03/02/2022 | | | | | | | 1,601 | 218,537 | | 11/16/2022 | | | | | 4,245 | 579,443 | 2,883 | 393,530 | | 11/16/2022 | | | | | | | 2,883 | 787,059 | | 12/01/2022 | | | | | 1,312 | 179,088 | | | | Joanne E. Caruso | | | | | | | | | | 11/13/2019 | | | | | 1,502 | 205,023 | | | | 11/18/2020 | | | | | 2,851 | 389,162 | 4,276 | 1,167,348 | | 11/18/2020 | | | | | | | 4,276 | 583,674 | | 11/17/2021 | | | | | 3,302 | 450,723 | 3,301 | 450,587 | | 11/17/2021 | | | | | | | 3,301 | 450,587 | | 11/16/2022 | | | | | 6,245 | 852,443 | 4,685 | 639,503 | | 11/16/2022 | | | | | | | 4,685 | 1,279,005 | | 12/01/2022 | | | | | 2,378 | 324,597 | | | | Patrick X. Hill | | | | | | | | | | 11/13/2019 | | | | | 751 | 102,512 | | | | 11/18/2020 | | | | | 1,901 | 259,487 | 2,851 | 778,323 | | 11/18/2020 | | | | | | | 2,851 | 389,162 |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
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Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| Outstanding Equity Awards at Fiscal Year-End for 2023 | | | | | | | | | | | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (1) | | Option Exercise Price ($) (2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (3) | Market Value of Shares or Units of Stock That Have Not Vested ($) (4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (5) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights That Have Not Vested ($) (6) | | Name/Grant Date | Exercisable (#) | Unexercisable (#) | | | | | | | | 11/17/2021 | | | | | 2,785 | 380,153 | 2,786 | 380,289 | | 11/17/2021 | | | | | | | 2,786 | 380,289 | | 11/16/2022 | | | | | 4,804 | 655,746 | 3,604 | 491,946 | | 11/16/2022 | | | | | | | 3,604 | 983,892 | | 12/01/2022 | | | | | 1,916 | 261,534 | | |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (1) All stock options have a total term of 10 years from the date of grant. |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (2) All outstanding employee stock options were granted under the Stock Incentive Plan with an exercise price equal to the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the grant date. |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (3) Represents the number of unvested shares of RSUs granted under the Stock Incentive Plan. The RSUs awarded on December 1, 2022 recognize earnings as part of the fiscal 2022 LPP award and vest ratably over 3 years beginning with the first anniversary of the grant date. The RSUs granted on November 16, 2022 to our NEOs (other than Mr. Demetriou) vest ratably over 4 years beginning on the first anniversary of the grant date, and the RSUs granted to Mr. Demetriou on November 16, 2022 vest on the 1-year anniversary of the grant date. In addition, the RSUs granted on March 8, 2021 to Messrs. Berryman and Pragada vest in full on the third anniversary of the grant date. Finally, the 4,273 RSUs granted on July 1, 2022 to Ms. Jaramillo vest ratably over 4 years beginning on the first anniversary of the grant date, and the 5,934 RSUs granted on the same date to Ms. Jaramillo vest ratably over 2 years beginning on the first anniversary of the grant date. RSU grants include dividend equivalent rights that accumulate and vest on the same schedule as the RSU to which they relate and will be paid to the award holder in cash at the same time the share of common stock underlying the RSU is delivered to the award holder. |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (4) The market value of outstanding awards of RSUs is computed using the closing price of the Company’s common stock as quoted by the NYSE Composite Price History on September 29, 2023, which was $136.50. |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (5) Represents the number of unvested target shares of PSUs (EPS Based PSUs and ROIC Based PSUs) granted under the Stock Incentive Plan. The awards of PSUs vest based on actual performance over a three-year performance period. |
Outstanding Equity Awards of NEOs at 2023 Fiscal Year-End
| (6) The market value of outstanding PSUs (EPS Based PSUs and ROIC Based PSUs) was computed by using $136.50, the closing price of the Company’s common stock as quoted by the NYSE Composite Price History on September 29, 2023. |
Option Exercises and Stock Vested in Fiscal 2023
Option Exercises and Stock Vested in Fiscal 2023 The following table provides information on stock options that were exercised and on restricted stock that vested in fiscal 2023 for our NEOs:
Option Exercises and Stock Vested in Fiscal 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) (2) | | Robert V. Pragada | — | — | 40,897 | 5,095,685 | | Steven J. Demetriou | 102,259 | 8,304,454 | 141,641 | 17,628,583 | | Claudia Jaramillo | — | — | 7,358 | 874,793 | | Kevin C. Berryman | — | — | 36,514 | 4,547,178 | | Stephen A. Arnette | — | — | 4,389 | 544,780 | | Joanne E. Caruso | — | — | 17,460 | 2,173,045 | | Patrick X. Hill | — | — | 9,283 | 1,155,989 |
Option Exercises and Stock Vested in Fiscal 2023
| (1) Value is based on the closing price of a share of the Company’s common stock as quoted by the NYSE Composite Price History on the vesting date. |
Option Exercises and Stock Vested in Fiscal 2023
| (2) Pursuant to the Company’s Executive Deferral Plan and included below in the Non-Qualified Deferred Compensation table, Mr. Berryman elected to defer the receipt of some of his equity awards until a later date. Mr. Berryman elected to defer equity that vested in November 2022 – 2,904 RSUs, with a value of $345,315. |
Option Exercises and Stock Vested in Fiscal 2023
| 60 | | 2024 Proxy Statement |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation As described above, employees, including NEOs, meeting certain compensation minimums may elect to participate in the Company’s executive deferral plans (“EDPs”) whereby a portion of compensation (including salary, bonus and/or equity compensation) is deferred and paid to the employee at some future date. The EDPs are non-qualified deferred compensation programs that provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, and upon retirement or death. Participant contributions are credited with earnings and losses based upon the actual performance of the deemed investments selected by participants. For the EDPs in which the NEOs participate (the “Variable Plans”), accounts are credited (or debited) based on the actual earnings (or losses) of the deemed investments selected by the individual participants. Participation in the EDPs is voluntary. All EDPs operate under a single trust. Although there are certain change-in-control features within the EDPs, no benefit enhancements occur upon a change in control. The investment options are notional and used for measurement purposes only. The NEOs do not own any units in the actual funds. In general, the investment options consist of several mutual and index funds comprising stocks, bonds, and money market accounts. The following table shows the EDP account activity during fiscal 2023 for the NEOs. Prior to fiscal 2018, executive officers were only permitted to defer salary and cash bonus amounts. Beginning in fiscal 2018, executive officers could also defer equity awards.
Non-Qualified Deferred Compensation for 2023
Non-Qualified Deferred Compensation for 2023
Non-Qualified Deferred Compensation for 2023
| Name | Deferred Compensation Plan | Executive Contribution During Last Fiscal Year ($) (1) | Aggregate Earnings During Last Fiscal Year ($) (2) | Aggregate Withdrawals/ Distributions During Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year End ($) (3) | | Robert V. Pragada | Variable Plans | | | | | | Steven J. Demetriou | Variable Plans | | 46,413 | 0 | 433,637 | | Claudia Jaramillo | Variable Plans | | | | | | Kevin C. Berryman | Variable Plans | 452,184 | 2,656,936 | 0 | 13,188,234 | | Stephen A. Arnette | Variable Plans | | 70,955 | 0 | 682,667 | | Joanne E. Caruso | Variable Plans | | | | | | Patrick X. Hill (4) | N/A | | | | |
Non-Qualified Deferred Compensation for 2023
| (1) All executive contributions are included in the Summary Compensation Table under the “Salary” and “Non-Equity Incentive Plan Compensation” columns. |
Non-Qualified Deferred Compensation for 2023
| (2) Earnings are included in the Summary Compensation Table to the extent they exceed 120% of the IRS prescribed applicable federal rate. |
Non-Qualified Deferred Compensation for 2023
| (3) Balances at the end of the fiscal year consist of (1) salary, bonus and equity compensation deferrals, and associated accumulated dividends, made by the executive over time, beginning when the executive first joined the plan, plus (2) all earnings and losses credited on all deferrals, less (3) all pre-retirement distributions, if any, taken by the executive since the executive first joined the plan. |
Non-Qualified Deferred Compensation for 2023
| (4) Because Mr. Hill is not a U.S. citizen, he is not eligible to participate in the EDP. |
Non-Qualified Deferred Compensation for 2023
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Pay Ratio
Pay Ratio The following table sets forth the ratio of our CEO’s total compensation to that of our median employee for fiscal 2023.
Pay Ratio
| CEO total annual compensation | $9,484,157 | | Median Employee total annual compensation | 91,465 | | Ratio of CEO to Median Employee total annual compensation | 104 to 1 |
Pay Ratio
SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported above may not be comparable to the pay ratio reported by other companies, as other companies may have utilized different methodologies and have different employment and compensation practices. The pay ratio above is a reasonable estimate calculated in a manner consistent with SEC rules, as well as the methodology described below. To calculate the fiscal 2023 CEO pay ratio, we used the same median employee that we used for purposes of calculating the CEO pay ratio for fiscal 2022, as there has been no material change in our employee population, employee compensation programs or the median employee compensation that we believe would significantly impact the CEO pay ratio. We calculated such median employee’s total annual compensation in the same manner as we calculated our CEO’s total annual compensation in the Summary Compensation Table on page 55. As we had two different CEOs during fiscal 2023, for purposes of calculating the ratio, we took the total compensation of each of Mr. Demetriou and Mr. Pragada, prorated in each case for the percentage of the year that they served in the CEO role, and combined those amounts.
Pay Ratio
| 64 | | 2024 Proxy Statement |
Pay-versus-Performance
| Year | Summary Compensation Table Total for CEO (Demetriou) (1) | Compensation Actually Paid to CEO (Demetriou) (1) (3) | Summary Compensation Table Total for CEO (Pragada) (2) | Compensation Actually Paid to CEO (Pragada) (2) (3) | Average Summary Compensation Table Total for Other NEOs (4) | Average Compensation Actually Paid to Other NEOs (3) (4) | Value of Initial Fixed $100 Investment Based On: | | Net Income (6) ($MM) | Adj. EPS (7) | | | | | | | | | Jacobs TSR (5) | Peer Group TSR (5) | | | | 2023 | $6,433,775 | $16,401,745 | $10,898,649 | $15,676,003 | $4,128,458 | $7,040,687 | $150 | $122 | $667 | $7.20 | | 2022 | $14,615,521 | $16,124,394 | N/A | N/A | $4,242,112 | $3,513,697 | $119 | $106 | $644 | $6.93 | | 2021 | $16,275,230 | $39,002,853 | N/A | N/A | $6,557,631 | $10,527,045 | $144 | $133 | $477 | $6.29 |
Adjustments to Calculate Compensation Actually Paid
Adjustments to Calculate Compensation Actually Paid
Adjustments to Calculate Compensation Actually Paid
| | | | Equity Awards | | | | | | | | Year | Executive | SCT Total | Deduct SCT Stock & Option Awards | | Add Year-End Value of Unvested Equity Granted in Year (1)(a) | Add Change in Value of Unvested Awards Granted in Prior Years | | Add Change in Value of Vested Equity Granted in Prior Years | Total CAP | | 2023 | CEO (Demetriou) | $6,433,775 | ($ | 3,430,785) | $3,752,795 | | 4,874,636 | $4,771,324 | $16,401,745 | | | CEO (Pragada) | $10,898,649 | ($ | 7,939,420) | $8,679,489 | | 2,658,793 | $1,378,492 | $15,676,003 | | | Average NEO | $4,128,458 | ($ | 2,443,650) | $2,672,056 | | 1,503,269 | $1,180,555 | $7,040,687 | | 2022 | CEO (Demetriou) | $14,615,521 | ($ | 12,000,106) | $8,953,246 | ($ | 5,496,145) | $10,051,878 | $16,124,394 | | | Average NEO | $4,242,112 | ($ | 2,690,085) | $1,663,846 | ($ | 1,202,339) | $1,500,163 | $3,513,697 | | 2021 | CEO (Demetriou) | $16,275,230 | ($ | 11,500,101) | $14,714,972 | | 9,244,782 | $10,267,971 | $39,002,853 | | | Average NEO | $6,557,631 | ($ | 4,550,092) | $5,540,518 | | 1,711,565 | $1,267,423 | $10,527,045 |
Adjustments to Calculate Compensation Actually Paid
| (1) The fair value amounts were computed in a manner consistent with the fair value methodology used to account for share-based payments in the Company’s financial statements. |
Relationship Between CAP and Certain Performance Measures
| - | Jacobs’ TSR has outperformed the Pay versus Performance comparator group, the S&P 1500 IT Consulting & Other Services Index, over the 3-year period and in the latest year. However, our stock price, like that of our sector, declined in 2022, driving CAP down that year. |