DEF 14A of EPAM Systems, Inc.
Filed Apr 16, 2024 · FY20230001193125-24-097726
Director Nominees
Director Nominees
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected The Board nominees possess specific experience, qualifications, attributes or skills that led the Nominating and Governance Committee to the conclusion that such persons should serve as directors of EPAM, in light of our business and structure.
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| Age: 63 Director Since: 2002 Birthplace: Belarus Key Qualifications: Leadership, Global Business, Human Capital, Technology & Innovation, Mergers & Acquisitions | Our Board believes Mr. Dobkin’s experience as an IT professional and executive in the IT services industry coupled with his in-depth understanding of our global delivery model provide him with the necessary skills to serve as a member of our Board and will enable him to provide valuable insight to the Board and our management team regarding operational, strategic and management issues as well as general industry trends. | | | | Career Highlights EPAM Systems, Inc. • Co-Founder (1993 – Present) • Chairman and CEO (2002 – Present) Board Roles & Committees • Chairman | Select Professional & Community Contributions • GLOBSEC Tatra Summit Business Leadership Award, 2021 • Ernst & Young World Entrepreneur of the Year Academy (Inducted 2015) Other Public Company Boards None |
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| Age: 55 Director Since: 2012 Birthplace: USA Independent Director Key Qualifications: Financial, Leadership, Human Capital, Technology & Innovation, Mergers & Acquisitions | Our Board believes Mr. Segert’s 20-plus years of experience as an executive in the business services and consulting industry provide him with the necessary skills to serve as a member of our Board and enable him to provide valuable insight to the Board regarding financial and investor relations issues. | | | | Career Highlights athenahealth, Inc. • Chairman and CEO (2019 – Present) Virence Health Technologies • Chairman and CEO (2018 – 2019) Aspect Software • Executive Chairman (2016 – 2018) Expert Global Solutions, Inc. • President and CEO (2014 – 2016) GXS Worldwide, Inc. • President and CEO (2008 – 2014) | Board Roles & Committees • Chair – Nominating and Corporate Governance Committee Other Public Company Boards None |
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| 10 | 2024 Proxy Statement | |
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| Age: 63 Director Since: 2023 Birthplace: USA Independent Director Key Qualifications: Leadership, Global Business, Technology & Innovation, Sales & Marketing, Public Company Board | Our board believes Ms. Aguirre is qualified to serve as a director based on more than 30 years of experience in leadership roles in the global strategy and technology consulting industry along with her experience as a member of both public and private company boards and their committees. | | | | Career Highlights PricewaterhouseCoopers • Managing Partner (2015 – 2020) • North America Strategy Business • Health Strategy Business • Global Leader – Katzenbach Center Booz Allen & Hamilton, Inc./Booz & Co. • Global and Regional Leadership Positions (1996 – 2015) • Global Co-Leader – Organization & Strategic Leadership Business • Technology Leader – Southern Cone • Global Chief Human Resources Officer | Board Roles & Committees • Member – Nominating and Corporate Governance Committee Select Professional & Community Contributions • Cisive – Director Other Public Company Boards • Hercules Capital, Inc. |
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| Age: 57 Director Since: 2023 Birthplace: USA Independent Director Key Qualifications: Financial, Leadership, Global Business, Technology & Innovation | Our board believes Ms. McMahon is qualified to serve as a director based on her breadth of experience in cybersecurity, information technology solutions, and enterprise resiliency and her executive leadership roles in the health, telecommunications, and defense industries, which enable her to provide valuable insight to the Board regarding information security and business strategy issues. | | | | Career Highlights CVS Health • Senior Vice President and Chief Information Security Officer (2020 – Present) Verizon Communications • Senior Vice President and Chief Information Security Officer (2015 – 2020) Lockheed Martin • Vice President and Chief Information Security Officer • Vice President of Commercial Markets • President of Corporate Properties | Board Roles & Committees • Member – Audit Committee Other Public Company Boards None |
Class III Directors with Terms Expiring at the Annual Meeting in 2024 or in 2027 if elected
| 11 | 2024 Proxy Statement | |
Continuing Directors
Continuing Directors
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 61 Director Since: 2013 Birthplace: USA Independent Director Key Qualifications: Financial, Leadership, Human Capital, Technology & Innovation, Sales & Marketing | Our Board believes that Mr. Mayoras is qualified to serve as a director based on his prior executive leadership roles in the IT services industry and his experience and prior service as a member of the boards of directors of technology companies, which enable him to provide valuable insight to the Board regarding financial and business strategy issues. | | | | Career Highlights OnSolve, LLC • Executive Chairman (2018 – Present) RedPrairie Corporation • President and CEO (2007 – 2013) • Various executive roles (2004 – 2007) DigiTerra, Inc. • President (2001 – 2004) | Board Roles & Committees • Member – Compensation Committee • Member – Nominating and Corporate Governance Committee Select Professional & Community Contributions • Softeon Inc. – Director Other Public Company Boards None |
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 61 Director Since: 2004 Birthplace: United Kingdom Independent Director Key Qualifications: Leadership, Global Business, Technology & Innovation, Sales & Marketing, Public Company Board | Our Board believes that Mr. Robb’s extensive experience in and knowledge of the IT services industry in North America and Europe, as well as his experience starting two software companies and his extensive service and responsibilities at EPAM prior to his retirement, provide him with the necessary skills to serve as a member of our Board. Our Board also believes this background enables Mr. Robb to provide valuable insight to the Board regarding strategy, business development, sales, operational and management issues, and general industry trends. | | | | Career Highlights EPAM Systems, Inc. • Executive Vice President and President of EU Operations (2004 – 2015) Fathom Technology Kft. • Co-Founder (2001 – 2004) Board Roles & Committees None | Select Professional & Community Contributions • Ajax Systems – Director • Visiquate, Inc. – Director Other Public Company Boards • Current – None • Past Five Years – Noventiq Holdings plc |
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 56 Director Since: 2018 Birthplace: USA Independent Director Key Qualifications: Financial, Leadership, Global Business, Mergers & Aquisitions, Sales & Marketing | Our Board believes Ms. Shan’s financial management expertise, as well as her previous experience in global strategy development and execution, provide her with the necessary skills to serve as a member of our Board and enable her to contribute valuable insight regarding financial and strategic business issues. | | | | Career Highlights FactSet Research Systems • Executive Vice President and Chief Revenue Officer (2021 – Present) • Executive Vice President and Chief Financial Officer (2018 – 2021) Mercer • Chief Financial Officer (2014 – 2018) Marsh & McLennan Companies • Vice President and Treasurer (2013 – 2014) | Board Roles & Committees • Chair – Audit Committee • Member – Compensation Committee Select Professional & Community Contributions • S.C. Johnson College of Business, Cornell University – Member of Johnson Advisory Council Other Public Company Boards None | | Class II with Terms Expiring at the Annual Meeting in 2026 | | |
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 66 Director Since: 2020 Birthplace: Canada Independent Director Key Qualifications: Financial, Leadership, Global Business, Technology & Innovation, Mergers & Aquisitions | Our Board believes that Mr. Roman’s more than 35 years of experience as an information technology and telecommunications executive in the retail and business services industries and his financial background provide him with the necessary skills to serve as a member of our Board and enable him to provide valuable insight to the Board regarding technology, financial, and strategic issues. | | | | Career Highlights Design AI Ltd. • Principal (2019 – Present) Metrolinx • Chief Information Officer (2020-2021) Canadian Tire Corporation • Executive Vice President (2012 – 2018) Nortel Networks Corporation, Bell Canada Enterprises Inc., and Open Text Corporation • Progressively senior business and technology roles Board Roles & Committees • Member – Audit Committee | Select Professional & Community Contributions • Lakeland Holding Ltd. – Director • Community Trust Co. – Director • York University – Board of Governors • Finance and Audit Committee • Governance and Human Resources Committee Other Public Company Boards • Current – None • Past Five Years – The Stars Group |
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 64 Director Since: 2016 Birthplace: USA Independent Director Key Qualifications: Leadership, Global Business, Human Capital, Public Company Board | Our Board believes Ms. Smart’s industry experience, more than 20 years of consulting experience, and human resources leadership expertise enable Ms. Smart to provide valuable insight to the Board regarding human capital, executive compensation, and strategy. | | | | Career Highlights National Academy of Human Resources • President Emeritus (2023 – 2024) • President (2015 – 2023) JBSmart Consulting, LLC • Founder and CEO (2021 – Present) Accenture • Chief Human Resources Officer (2004-2014) • Various positions of increasing authority (1981 – 2004) Board Roles & Committees • Chair – Compensation Committee | Select Professional & Community Contributions • AlixPartners – Director • Cerity Partners – Advisory Board Member • Certree – Advisory Board Member • SucceedSmart – Advisory Board Member • University of Illinois Chicago Athletic Advisory Board and Gies College of Business Dean’s Business Council – Member Other Public Company Boards • World Kinect Corporation • HireRight Holdings Corporation |
Class I with Terms Expiring at the Annual Meeting in 2025
| Age: 70 Director Since: 2012 Birthplace: USA Independent Director Key Qualifications: Financial, Leadership, Global Business, Mergers & Acquisitions, Public Company Board | Our Board believes Mr. Vargo’s 30-plus years of experience as a financial and business executive, and his experience serving as a member of the board of directors of other public companies, provide him with the necessary skills to serve as a member of our Board and enable him to provide valuable insight to the Board regarding strategic, financial, compliance and investor relations issues. | | | | Career Highlights ICF International, Inc. • Executive Vice President and CFO (2010 – 2011) Electronic Data Systems Corporation • Executive Vice President and CFO (2006 – 2008) • Vice President and Treasurer (2004 – 2006) TRW, Inc. • Vice President (1991 – 2003) • Investor Relations and Treasurer (1991 – 1994, 1999 – 2002) • Strategic Planning and Business Development (1999 – 2002) | Board Roles & Committees • Lead Independent Director • Member – Audit Committee • Member – Nominating and Corporate Governance Committee Other Public Company Boards • Current – Enersys • Past Five Years – Ferro Corporation |
Code of Ethical Conduct & Corporate Governance Guidelines
| • | director compensation; |
Balazs Fejes
Balazs Fejes Balazs Fejes is our President of Europe and APAC Markets, where he heads market activities across the regions and co-leads global business operations. Mr. Fejes also oversees the strategy of our Banking and Financial Services Industry business unit, helping to drive evolution of key service lines across the unit’s global portfolio. From 2015 through March 2021, Mr. Fejes was our Executive Vice President, Co-Head of Global Business, and before that, he held the position of Senior Vice President, Global Head of Banking and Financial Services business unit from 2012 to 2015. From 2004 to August 2012, Mr. Fejes served as EPAM’s Chief Technology Officer (“CTO”) and was responsible for ensuring that all global offshore and nearshore software development centers of EPAM were at the leading edge of industry standards for efficiency and quality. Mr. Fejes joined EPAM in 2004 as part of the acquisition of Fathom Technology, a Hungarian software engineering firm which he co-founded and where he served as CTO. Prior to co-founding Fathom Technology, Mr. Fejes was a chief software architect/line manager with Microsoft Great Plains (Microsoft Business Solutions). He also served as chief software architect of Scala Business Solutions. He is the recipient of numerous awards for programming excellence and has worked extensively in the US and Russia.
Viktar Dvorkin
Viktar Dvorkin Viktar Dvorkin is our Senior Vice President, Head of Global Delivery, and is responsible for the strategy and operation of the company’s Delivery Organization as well as our Solution Practices and Competency Centers. In his current role, Mr. Dvorkin also oversees EPAM’s Advanced Technology programs including EngX and Delivery Excellence. Prior to his current role, he led the North American business unit, where he oversaw the operation of EPAM’s largest book of business, with overall responsibility for services delivered in the North American region. Mr. Dvorkin joined EPAM in 1997 and has been instrumental in driving our growth in key technology and solution practices, and in helping EPAM to build and deploy multi-disciplinary teams for successful client engagements. Having worked and lived in the United States and Eastern Europe, Mr. Dvorkin has in-depth understanding of global delivery models and brings hands-on technology experience and working knowledge of multiple industries including travel, healthcare, insurance and oil & gas. Mr. Dvorkin holds a master’s degree in Applied Mathematics from the Belarusian National Technical University.
Viktar Dvorkin
| 23 | 2024 Proxy Statement | |
Jason Peterson
Jason Peterson Jason Peterson joined EPAM in 2017 and is our Senior Vice President, Chief Financial Officer and Treasurer. Mr. Peterson leads EPAM’s Global Finance, Corporate Development, and Procurement organizations and has over 25 years of finance experience. From 2008 to 2017, he was employed by Cognizant Technology Solutions, and in his most recent role, he was Vice President of Finance, M&A and Due Diligence, a position that he held while leading a large-scale corporate business process transformation program. Prior to that, he was CFO of the Emerging Business Accelerator and led the Corporate Financial Planning and Analysis Function. Before joining Cognizant, Mr. Peterson was the CFO for E&C Medical Intelligence, a venture-backed software and services company, and prior to that, he served in various accounting and finance roles at ATI Technologies, Philips Semiconductors, and Hewlett-Packard. Mr. Peterson holds an MBA from Columbia Business School and a Bachelor’s degree in economics from Claremont McKenna College.
Edward Rockwell
Edward Rockwell Edward Rockwell joined EPAM in October of 2018 and is our Senior Vice President, General Counsel and Corporate Secretary overseeing the legal activities of the organization and providing strategic counsel and legal guidance to senior leadership and EPAM’s Board of Directors. From June 2014 to October 2018, Mr. Rockwell served as Vice President & Assistant General Counsel at Red Hat, a leading global provider of open source, enterprise IT solutions where he led a global team of legal professionals that supported all sales and operations during a period of significant company growth. From April 2012 to January 2014, Mr. Rockwell was General Counsel and Vice President, Legal and Human Resources for DDN Storage. He previously served as Vice President and Associate General Counsel at Hewlett-Packard Company (HP) with roles that included General Counsel for HP Services, HP Americas, and HP Software. Additionally, he spent five years in Milan, Italy, where he served as Director and Managing Counsel for HP’s Outsourcing Services business in EMEA and later Senior Director and Managing Counsel for Outsourcing Services worldwide. Mr. Rockwell is a member of the board of directors of the Greater Philadelphia Chapter of the Association of Corporate Counsel. Mr. Rockwell received a BA degree in Foreign Affairs from University of Virginia and a JD from the University of Richmond School of Law.
Elaina Shekhter
Elaina Shekhter Elaina Shekhter is our Senior Vice President, Chief Marketing and Strategy Officer. Ms. Shekhter had been our Chief Marketing Officer from March 2015 through March 2021. In her role, Ms. Shekhter works to integrate a variety of functions that influence EPAM’s strategy, positioning and messaging. Ms. Shekhter has been with EPAM since 2001 in a number of roles, including the Global Head of Business Development and prior to that, the Global Head of our Travel and Consumer Business Unit. Ms. Shekhter is an advisory board member for the MACH Alliance and is active in the software startup and emerging technology communities, representing EPAM in its investment in the Go Philly Fund and as a board member of the EPAM seed investment, Sigma Ledger. Additionally, Ms. Shekhter takes a special interest in artificial intelligence and sustainability initiatives. Before joining EPAM, Ms. Shekhter was with the global hospitality and travel company Carlson Companies, in a number of operational and business development roles including Head of Retail and Entertainment for 24K, a spin-off of Carlson Marketing Group. Prior to Carlson, Ms. Shekhter was a Manager with Ernst & Young Consulting, specializing in CRM and analytics engagements. Ms. Shekhter holds an MS degree in Information Systems and BS/BA degreesin Economic Theory and Political Science from The American University.
Boris Shnayder
Boris Shnayder Boris Shnayder is our Senior Vice President, Co-Head of Global Business with a primary focus on operations in the Americas. Mr. Shnayder joined EPAM in July 2015 and is responsible for a portfolio of business in the region, including oversight of service programs and client acquisition. Mr. Shnayder also oversees strategy and execution of our emerging verticals portfolio. With over 20 years of experience in the IT and telecommunications industries, Mr. Shnayder brings both industry and global operations leadership. Prior to his role at EPAM, Mr. Shnayder served in a variety of roles at GlobalLogic, Inc. from 2007 to 2015, including Chief Delivery Officer, Senior Vice President, Head of Telecom & Healthcare and General Manager, and Vice President of Telecommunications. He also held senior software management positions at Motorola and Telcordia, managing teams throughout the United States, China, India and Russia. Mr. Shnayder received his MS degree in Mechanical Engineering from the Lyiv University in Ukraine.
Boris Shnayder
| 24 | 2024 Proxy Statement | |
Larry Solomon
Larry Solomon Larry Solomon is our Senior Vice President, Chief People Officer, responsible for overseeing all aspects of talent management, talent acquisition, workforce planning and management, as well as other human resource related functions within EPAM globally. Mr. Solomon joined EPAM in October 2016, and prior to that he held a number of leadership positions at Accenture beginning in 1986. His most recent responsibilities as Senior Managing Director and North America Operating Officer from 2013 to 2016 included overseeing and managing the full employee life cycle of all Accenture people in the United States and Canada, resource planning, recruitment, staffing and deployment, and performance management. Prior to that, he was Accenture’s Global COO of Human Resources from 2011 to 2013, with overall responsibility for human resources operations. Mr. Solomon received a bachelor’s degree in Business Administration from the State University of New York at Albany with a Finance/MIS major and Spanish language minor. He graduated with Magna Cum Laude distinction in 1986.
Sergey Yezhkov
Sergey Yezhkov Sergey Yezhkov is our Senior Vice President, Co-Head of Global Business, focusing on a North American book of business. Mr. Yezhkov also oversees strategy and operation of our Life Science & Healthcare portfolio. Prior to his current role, Mr. Yezhkov served as Co-Head of Global Delivery where he oversaw delivery operations across EPAM’s diverse geographic footprint with overall responsibility for building and growing professional software engineering skills and delivery know-how. Mr. Yezhkov joined EPAM in 2006 as part of the acquisition of Vested Development Inc. (VDI), where he served as Managing Director and CTO. Through his work with EPAM’s Independent Software Vendors business unit, Mr. Yezhkov brings an in-depth understanding of commercial software product development and agile approaches as well as a working knowledge of the healthcare, life science and high-tech industries. Mr. Yezhkov has an MS in Computational Mathematics from Lomonosov Moscow State University.
Gary Abrahams
Gary Abrahams Gary Abrahams is our Vice President, Corporate Controller, and Chief Accounting Officer. Mr. Abrahams joined EPAM in June of 2016, after having served as an independent contractor for EPAM starting in March of 2016. He was named Chief Accounting Officer in April 2017. Mr. Abrahams has over 25 years of experience in global corporate financial management and public accounting. From December 2015 to March 2016, Mr. Abrahams worked as an independent contractor at CMF Associates, LLC, a management and financial services advisory firm. From June 2014 to April 2015, he served as Senior Vice President, Chief Accounting Officer at Preferred Sands, a producer of high-performance sands and proppant materials used in the oil and gas industry. From May 2006 to April 2014, Mr. Abrahams served in several senior finance roles at Shire Pharmaceuticals, a global biotechnology company, last serving as Vice President, Finance Operations - The Americas, where he was responsible for leading the Controller’s teams in North and South America and enhancing the finance infrastructure to support the growth of the multinational business. Before joining Shire, Mr. Abrahams held finance and Controller positions at Bracco Diagnostics, a subsidiary of a multinational healthcare company, from 1994 to 2006. He began his career at Arthur Andersen LLP in New York City. Mr. Abrahams holds a BBA in Accounting from Hofstra University.
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| 25 | 2024 Proxy Statement | |
Gary Abrahams
Security Ownership of Certain Beneficial Owners & Management As of March 14, 2024, there were 57,995,329 shares of our Common Stock issued and outstanding. The following table sets forth certain information with respect to the beneficial ownership of our Common Stock for:
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| • | each of our directors and executive officers individually; |
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| • | all directors and executive officers as a group; and |
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| • | each stockholder known by us to be the beneficial owner of more than 5% of our outstanding Common Stock. |
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We have calculated beneficial ownership in accordance with the rules of the SEC, and such ownership includes voting and dispositive power with respect to shares. In the table below, shares of Common Stock issuable pursuant to options currently exercisable or exercisable within 60 days of March 14, 2024, shares of Common Stock issuable upon settlement of restricted stock units, and restricted Common Stock are deemed to be outstanding for calculating the percentage of outstanding shares beneficially owned by the person holding those options, but are not deemed to be outstanding for computing the percentage of shares beneficially owned by any other person. To our knowledge, except as indicated, the stockholders named in the table have sole voting and dispositive power with respect to all shares of Common Stock beneficially owned by them, based on the information provided to us by such stockholders. Unless otherwise indicated, the address for each director and executive officer is c/o EPAM Systems, Inc., 41 University Drive, Suite 202, Newtown, Pennsylvania 18940.
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| | Shares Beneficially Owned | | | Name and Address of Beneficial Owner | Number | Percent | | Named Executive Officers and Directors | | | | Arkadiy Dobkin (1) | 2,033,450 | 3.5% | | Jason Peterson (2) | 46,443 | * | | Balazs Fejes (3) | 44,395 | * | | Boris Shnayder (4) | 59,712 | * | | Elaina Shekhter (5) | 41,323 | * | | Larry Solomon (6) | 37,846 | * | | Viktar Dvorkin (7) | 82,017 | * | | Sergey Yezhkov (8) | 68,177 | * | | Edward Rockwell (9) | 14,007 | * | | Gary Abrahams (10) | 2,528 | * | | DeAnne Aguirre | 1,214 | * | | Richard Michael Mayoras | 8,270 | * | | Chandra McMahon | 1,335 | * | | Eugene Roman | 930 | * | | Karl Robb | 5,316 | * | | Robert Segert (11) | 17,298 | * | | Helen Shan | 3,876 | * | | Jill B. Smart | 6,901 | * | | Ronald Vargo | 8,503 | * | | All executive officers and directors as a group (18 people) | 2,483,541 | 4.3% | | 5% Stockholders | | | | The Vanguard Group (12) | 6,825,589 | 11.83% | | Capital Research Global Investors (13) | 7,698,930 | 13.3% | | BlackRock, Inc. (14) | 4,722,559 | 8.2% |
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| * Denotes less than 1% of the shares of Common Stock beneficially owned. |
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| 26 | 2024 Proxy Statement | |
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| (1) Includes: (i) 1,284,611 shares of Common Stock held directly by Mr. Dobkin; (ii) 312,650 shares of Common Stock issuable to Mr. Dobkin upon exercise of options exercisable within 60 days of March 14, 2024; and (iii) 436,189 shares of Common Stock held by the Arkadiy Dobkin GST Exempt Grantor Trust (the “Dobkin Grantor Trust”) for the benefit of Mr. Dobkin’s children, for which Mr. Dobkin’s spouse acts as the trustee. Mr. Dobkin may be deemed to have shared power to vote or to direct the vote, and shared power to dispose or to direct the disposition of the shares held by the Dobkin Grantor Trust and identified as beneficially owned by him above. Mr. Dobkin disclaims beneficial ownership of the securities held by the Dobkin Grantor Trust except to the extent of his pecuniary interest therein. |
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| (2) Includes 22,793 shares of Common Stock issuable to Mr. Peterson upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (3) Includes 31,063 shares of Common Stock issuable to Mr. Fejes upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (4) Includes 50,426 shares of Common Stock issuable to Mr. Shnayder upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (5) Includes 34,516 shares of Common Stock issuable to Ms. Shekhter upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (6) Includes 25,729 shares of Common Stock issuable to Mr. Solomon upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (7) Includes: (i) 10,333 shares of Common Stock held directly by Mr. Dvorkin; (ii) 55,947 shares of Common Stock issuable to Mr. Dvorkin upon exercise of options exercisable within 60 days of March 14, 2024; and (iii) 15,737 shares of Common Stock held by the Dvorkin Family Trust for the benefit of Mr. Dvorkin’s children, for which Mr. Dvorkin’s spouse acts as the trustee. Mr. Dvorkin may be deemed to have shared power to vote or to direct the vote, and shared power to dispose or to direct the disposition of the shares held by the Dvorkin Family Trust and identified as beneficially owned by him above. Mr. Dvorkin disclaims beneficial ownership of the securities held by the Dvorkin Family Trust except to the extent of his pecuniary interest therein. |
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| (8) Includes 55,407 shares of Common Stock issuable to Mr. Yezhkov upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (9) Includes 9,087 shares of Common Stock issuable to Mr. Rockwell upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (10) Includes 471 shares of Common Stock issuable to Mr. Abrahams upon exercise of options exercisable within 60 days of March 14, 2024. |
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| (11) Includes: (i) 3,554 shares of Common Stock held directly by Mr. Segert; and (ii) 13,744 shares of Common Stock held in a revocable living trust in which Mr. Segert and his spouse are trustees. Mr. Segert has beneficial ownership of the shares held in the trust. |
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| (12) Information based on a Schedule 13G/A filed with the SEC on February 13, 2024. The Vanguard Group has sole voting power over 0 shares, shared voting power over 75,863 shares, sole dispositive power over 6,578,867 shares and shared dispositive power over 246,722 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
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| (13) Information based on a Schedule 13G/A filed with the SEC on February 9, 2024. Capital Research Global Investors (“CRGI”) is a division of Capital Research and Management Company (“CRMC”), as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company, Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K., and Capital Group Private Client Services, Inc. (together with CRMC, the “investment management entities”). CRGI’s divisions of each of the investment management entities collectively provide investment management services under the name “Capital Research Global Investors.” CRGI is deemed to be the beneficial owner of 7,698,930 shares. CRGI has sole voting power over 7,694,126 shares, shared voting power over 0 shares, sole dispositive power over 7,698,930 shares, and shared dispositive power over 0 shares. The address of CRGI is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071. |
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| (14) Information based on a Schedule 13G/A filed with the SEC on January 25, 2023. BlackRock, Inc., a parent holding company, reports on behalf of the following subsidiaries which hold the shares: BlackRock Life Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia Limited, BlackRock (Singapore) Limited, and BlackRock Fund Managers Ltd. BlackRock, Inc. has sole voting power over 4,353,085 shares, shared voting power over 0 shares, sole dispositive power over 4,722,559 shares, and shared dispositive power over 0 shares. The address of BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. |
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| 27 | 2024 Proxy Statement | |
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Certain Relationships & Related Transactions
Pre-Cleared Transaction Categories
| • | director compensation arrangements that have been approved by the Board |
The Audit Committee
| Non-Employee Director Compensation Elements | Committee & Additional Meeting Fees | | | |
The Audit Committee
| Name | Fees earned or paid in cash ($) | Stock awards(1) (2) ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Non-qualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | DeAnne Aguirre | $59,211 (3) | $323,023 | – | – | – | – | $382,231 | | Richard Michael Mayoras | $84,000 (4) | $227,453 | – | – | – | – | $311,453 | | Chandra McMahon | $39,433 (5) | $304,180 | – | – | – | – | $343,613 | | Karl Robb | $67,000 (6) | $227,453 | – | – | – | $94,000 (7) | $388,453 | | Eugene Roman | $80,000 (8) | $227,453 | – | – | – | – | $307,453 | | Robert E. Segert | $82,000 (9) | $227,453 | – | – | – | – | $309,453 | | Helen Shan | $101,000 (10) | $227,453 | – | – | – | – | $328,453 | | Jill Smart | $87,000 (11) | $227,453 | – | – | – | – | $314,453 | | Ronald Vargo | $123,000 (12) | $227,453 | – | – | – | – | $350,453 |
2023 Executive Compensation Notes
| • | Excluding a one-time retention RSU award to our CFO with a grant date value of approximately $3,000,000, when compared to 2022, 2023 total compensation for our NEOs grew approximately 14.6% as a group and 13.7% on average, primarily due to increased long-tern incentive grants, reflecting our overall approach that ties pay to performance and keeps compensation competitive for our talented leaders. |
2023 Executive Compensation Notes
| • | Executive short-term, performance-based cash incentives for 2023 were paid at 47% of target, continuing our focus on paying for performance during a time of volatility in demand and macro-economic conditions while information technology spending by customers generally reduced. |
2023 Executive Compensation Notes
| • | In determining annual performance-based cash incentives for our NEOs, the Compensation Committee used a structured formula that assigns greater weight to corporate performance indicators and puts less emphasis on individual contributions. The Compensation Committee formulaically funded the executive bonuses (including for our NEOs) based on revenue growth and profitability. |
2023 Executive Compensation Notes
| • | 2023 annual equity grants to our NEOs were comprised of stock option and restricted stock unit awards of approximately equal value at grant date (based on a grant date value of restricted stock unit awards calculated using the 30-day average closing price of our stock on the date prior to grant), balancing retention and compensation incentives. In March 2024, the Board and Compensation Committee approved the grants of performance stock units (“PSUs”) to the executive team, including our NEOs. In the future, the PSUs will comprise a significant portion of the NEOs’ overall compensation package (50% of long-term incentive compensation mix for our CEO) and are tied to the Company’s long-term performance. |
2023 Executive Compensation Notes
| • | Overall, the total compensation packages for our NEOs continue to be significantly performance- and results-based in the forms of short-term cash incentives heavily dependent on company performance and equity-based compensation directly linked to the future performance of EPAM Common Stock. |
2023 Executive Compensation Notes
| | | | WHAT WE DO | WHAT WE DON‘T DO | | • Align our executive pay with performance • Appropriately balance short- and long-term incentives • Provide for “double trigger” change of control vesting for all equity grants • Award equity grants which vest over a four-year term • Hold an annual “say-on-pay” advisory vote to approve executive compensation • Award PSUs tied to our long-term performance as a significant portion of our NEO’s overall compensation • Maintain meaningful stock ownership guidelines for executives, members of senior management and directors • Maintain a robust compensation recoupment or “clawback” policy that complies with SEC and corresponding NYSE Listed Company Manual requirements • Retain and utilize an independent compensation consultant to advise the Compensation Committee | • No contracts with multi-year guaranteed salary increases or bonus arrangements • No excise tax gross-ups upon a change of control • No “single trigger” change of control vesting for equity awards • No “golden parachutes” or automatic change of control severance payments • No supplemental executive retirement plan or supplemental pension benefits • No repricing of equity awards without stockholder approval • No hedging, pledging, and speculative transactions in our securities by our executive officers, employees and directors • No perquisites for our named executive officers |
Compensation Philosophy and Objectives
| • | Attract, motivate, develop and retain quality executives who will increase long-term stockholder value. |
Compensation Philosophy and Objectives
| • | Provide total compensation to each of our NEOs that is commensurate with position and experience, largely in annual incentive and long-term incentives aligned with the long-term interests of stockholders. |
Compensation Philosophy and Objectives
| • | Grant performance-based equity awards to align executive interests with long-term interests of EPAM stockholders (beginning with grants awarded in 2024). |
Compensation Philosophy and Objectives
| • | Reward exceptional performance and long-term commitment to EPAM. |
Compensation Philosophy and Objectives
| | Component | Objective | Alignment with Stockholder Value Creation | | | Base Salary | Provide a base amount of fixed compensation to attract and retain highly qualified executives Reflects individual seniority, skills, prior experience, scope and responsibility | Salary levels and year-over-year increases set at appropriate, but generally conservative, levels to manage fixed pay | | | Performance-based Cash Incentives | Reward executives for a combination of strong corporate performance and individual contributions to our success | Short-term cash incentives for executives funded based on our operational and financial results, with annual awards for our NEOs determined based on these performance measures as well as individual performance and collaboration | | | Equity Awards | For 2023, provide annual awards to executives in equal proportions (based on grant date value) via two types of equity vehicles, stock options and time-vested RSUs, to realize future stock price appreciation and serve as a retention tool for highly qualified executive leadership. For grants in 2024, executive awards to those other than our CEO are granted in the form of stock options, time-vested RSUs, and performance-vested PSUs, each representing one-third of the grant. The CEO awards are granted 50% in the form of performance-vested PSUs, 17% in the form of stock options and 33% in the form of time-vested RSUs. Reward executives for long-term success | Ultimate value of equity awards based on sustained, long-term EPAM stock price appreciation and financial performance | | | Benefits and Perquisites | Lack of special perquisites for executives promotes EPAM’s approach and culture | EPAM does not provide supplemental executive perquisites or retirement benefits EPAM provides its executives with broad-based, non-discriminatory benefit plans available to all employees to focus executive pay on incentive-based cash or equity compensation | | | Post-employment Compensation | Lack of pension plans, retiree benefits and other post-employment benefits keeps fixed compensation costs conservative Beginning with 2021 grants, equity awards vest upon death or disability (100% in the case of two or more years of service, and 50% in case of less than 2 years of service) Beginning with 2022 grants, equity awards held for at least one year from the date of grant accelerate upon retirement for Section 16 officers who retire with a combined age and service of 70 (minimum age 60 and minimum tenure 5 years) | No pre-set severance terms or employment agreements Double-trigger change of control requirements for acceleration of unvested equity awards Equity vesting in death, disability, or retirement intended to provide programmatic vesting of equity in limited circumstances to minimize need for Committee discretion | | | Employee Stock Purchase Plan (ESPP) | EPAM maintains an ESPP for eligible employees, including our executive officers (available in select countries) with a market competitive design | Creates incentive for employees to share in EPAM’s value creation |
84% Variable Compensation
| • | Excludes a one-time retention RSU award to our CFO with a grant date value of approximately $3,000,000. |
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee uses the services of Pay Governance as its independent compensation consultant. At the Compensation Committee’s request during 2023, Pay Governance prepared analyses and reports on market pay for named executive officers, a competitive review of peer company share usage and dilution, peer group composition, information on trends and policies relating to compensation, and assisted with the design of our PSU program. In addition, Pay Governance provided advice on the Compensation Discussion and Analysis included in this Proxy Statement. Pay Governance attends meetings as appropriate at the invitation of the Compensation Committee and meets with our management from time to time to collect compensation data and information about the business. To ensure the independence of Pay Governance, the Compensation Committee annually reviews its work, fees and relationship. During 2023, Pay Governance did not perform any other services for EPAM or any of its affiliates and the Compensation Committee concluded that there was no conflict of interest within the meaning of Section 10C-1 of the Exchange Act affecting Pay Governance’s independence.
Role of the Compensation Consultant
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Factors Considered in Determining Compensation
Factors Considered in Determining Compensation We do not typically enter into employment agreements with our executives unless required by local law, so we are generally not contractually obligated to pay our executives particular amounts or structure compensation based on minimums in employment agreements. Instead, the Compensation Committee reviews executive target pay levels for the NEOs annually to ensure that they remain competitive, overall, within our industry The Committee also considers historical and current compensation for each member of management. The Compensation Committee also considers information provided by Pay Governance in making its compensation decisions but does not specifically target a percentile against the broader market or our peer group. The overall value of the compensation package for each NEO is determined by the Compensation Committee in consultation with the CEO and Chief People Officer (other than as to themselves). In these consultations, the Compensation Committee, CEO and Chief People Officer consider the overall performance of EPAM, as well as subjective factors including the individual performance of the other NEOs and their contributions to EPAM achievements. EPAM uses a compensation peer group to help us understand pay levels and compensation program design for similarly sized publicly traded companies. We have focused on technology companies of similar revenue and market cap size to EPAM that also generally have strong historical revenue growth rates and significant international operations, since there are relatively few direct competitors of similar size to EPAM. The list for the most recent year (see box to the right) is subject to change from time to time depending on the continued appropriateness of the companies in terms of the factors described above and other factors. The Compensation Committee reviews the criteria, adjusts, if appropriate, and confirms the companies to be included in the peer group annually. In 2023, we removed Citrix Systems, Inc. from the compensation peer group due to its acquisition. The Compensation Committee and management use peer group information to better understand the external marketplace; however, industry peer information is not the only factor used to determine executive pay levels. The Compensation Committee and our management consider other factors including experience, contribution, internal equity, and past compensation in addition to the peer group information.
Elements of Compensation
Elements of Compensation The fundamental elements of our compensation program are base salary, short-term cash incentive awards, long-term equity incentives and other broad-based benefits. Although we expect these to remain the elements of our compensation program going forward, the relative weighting of each element and specific plan and award designs may evolve, as evidenced by the introduction of PSUs for 2024. We have selected these elements as the principal components of our executive compensation program because we have found them to be effective in recruiting, retaining and motivating our NEOs within the context of our business and operating environment. Each NEO’s compensation package is individually tailored and is intended to encourage executive performance that supports our organizational strategy, while at the same time remaining aligned with our compensation philosophy and the components described above. The Compensation Committee and the Board continue to evaluate the compensation components, the mix of long- and short-term compensation, and decision-making processes for cash incentives and equity awards to ensure we are motivating our leadership and rewarding performance and creation of stockholder value.
Short-Term Cash Incentive Awards
Short-Term Cash Incentive Awards Short-term cash incentive awards are intended to be a meaningful component of our NEOs’ total compensation package. The Compensation Committee uses a senior management incentive framework that is designed to reward executives for achieving short-term (annual) performance goals, taking corporate performance and, to a lesser extent, individual performance into account. Actual cash incentives paid to our NEOs, except the CEO, are based 65% on corporate performance and 35% on individual contributions to EPAM’s success. The cash incentive paid to our CEO is based solely on corporate performance. Under this standard framework, the Compensation Committee approves:
Short-Term Cash Incentive Awards
| • | corporate performance measures and goals (and any deviation from them); |
Short-Term Cash Incentive Awards
| • | the aggregate funding level, based on EPAM’s revenue and profitability performance for the year, and considering management’s recommendation for any adjustments based on structured judgment; |
Short-Term Cash Incentive Awards
| • | individual annual cash incentive targets for the NEOs; and |
Short-Term Cash Incentive Awards
| • | actual annual cash incentive awards for each NEO. |
Short-Term Cash Incentive Awards
Our CEO and Chief People Officer provide recommendations as to the other NEOs’ annual targets and individual performance component of actual awards. The corporate performance funding level for executives focused equally on revenue growth and profitability as measured by adjusted income from operations. In setting the revenue and profitability targets used for incentive pool funding, the Compensation Committee considered EPAM’s publicly disclosed earnings guidance, market forces on the industry and macro-economic factors. The Compensation Committee believed that the targets and funding formula set appropriately challenging, incentivizing and attractive goals that align corporate and stockholder interests. The following table sets forth the target and actual 2023 results for each element.
Short-Term Cash Incentive Awards
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Short-Term Cash Incentive Awards
To get to the funding coefficient, we use linear interpolation from the target to the results for both revenue and profitability, as they are dependent variables. The Compensation Committee reviews the formulaic funding coefficient resulting from the linear calculation based on both revenue and profitability, from 0% to 200%, and determines whether it is appropriate given the performance of the Company for the year. For the executive short-term incentive compensation, based on the formulaic calculation using our 2023 operating results, the Compensation Committee applied the resulting 47% funding level for corporate performance. For each NEO other than the CEO, the Compensation Committee also assessed individual performance to determine the final incentive payment amount.
Short-Term Cash Incentive Awards
| Measure | Target for 100% Funding | Actual 2023 Results | | Revenue growth (year over year) | 11.9% | (2.8)% | | Adjusted income from operations (as a percentage of revenue)* | 16.4% | 16.3% |
Short-Term Cash Incentive Awards
*Adjusted income from operations is a non-GAAP financial measure. Refer to Appendix A: Reconciliation of Non-GAAP Financial Measures for additional information. 2023 target cash incentive award levels for each NEO, the maximum cash incentive award (200% of target), and the actual 2023 cash incentive award are set forth in the table below.
Short-Term Cash Incentive Awards
| NEO | 2023 cash incentive target | 2023 cash incentive maximum | 2023 cash incentive award – actual ($) | Payout as a percentage of target (%) | | Arkadiy Dobkin | $1,062,500 | $2,125,000 | $500,000 | 47% | | Jason Peterson | $600,000 | $1,200,000 | $282,000 | 47% | | Balazs Fejes | $600,000 | $1,200,000 | $282,000 | 47% | | Viktar Dvorkin | $450,000 | $900,000 | $212,000 | 47% | | Larry Solomon | $450,000 | $900,000 | $212,000 | 47% |
Long Term Equity Incentives
Long Term Equity Incentives Our NEOs receive long-term equity-based awards in the form of stock options and restricted stock units under EPAM’s 2015 Long Term Incentive Plan (the “2015 Plan”). These awards provide our NEOs with a personal financial interest in EPAM’s success through stock ownership, aligning their interests with that of our stockholders. Stock-based awards also enhance their long-term commitment to EPAM’s building of shareholder value, as the potential realized value of the awards is determined by stock price appreciation from the date of grant. These equity awards generally occur in the first quarter of each year and vest in equal annual installments over a four-year period commencing on the grant date. In addition to annual grants of equity-based awards, awards under the 2015 Plan may be made in connection with the start of employment, or to reward an extraordinary contribution to EPAM’s success at another “off-cycle” time. EPAM’s Board, taking the recommendation of the Compensation Committee into consideration, approves awards of long-term equity incentives to our NEOs annually based on our performance and consideration of individual performance. In general, the amounts of each 2023 grant were similar to prior years, with adjustments to reflect current market conditions, retention needs, and corporate and individual performance. In addition to the annual awards to NEOs in 2023, the Board approved a one-time award of RSUs vesting over three years to Mr. Peterson for retention purposes.
Long Term Equity Incentives
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Long Term Equity Incentives
Historically and including 2023, annual long-term equity incentive awards to our NEOs typically consist of 50% stock options and 50% restricted stock units based on grant date fair value of the awards. The Compensation Committee has determined and recommended to the Board that this mix of equity award types aligns with EPAM’s philosophy to retain and incentivize our NEOs and reward absolute long-term stock appreciation. Through service-based vesting and forfeiture provisions included in our option and restricted stock unit award agreements, we believe that we provide an additional incentive to our leadership to act in furtherance of our long-term success and our stockholders’ interests, strongly linking pay with EPAM’s performance. As noted above, the Compensation Committee engages in ongoing evaluation of our executive compensation programs and considers adjustments to improve alignment with our compensation philosophy. In 2024, the Compensation Committee strengthened the link between executive pay and company performance by commencing a PSU program. In the 2024 executive compensation cycle, the Compensation Committee approved awarding PSUs to our NEOs and certain other members of EPAM’s senior management. The number of PSUs that are actually earned and eligible to vest under a PSU award agreement will be determined as a percentage of the target number, between 50% (subject to threshold performance) and 200% for maximum performance, based on our level of achievement of certain performance criteria. The performance criteria for the 2024 awards include adjusted revenue growth (weighted at 37.5%), adjusted earnings per share (“EPS”) (weighted at 37.5%) and relative total shareholder return (“TSR”; weighted at 25%). The adjusted revenue growth and adjusted EPS targets are one year metrics set annually by the Compensation Committee due to the challenge in forecasting and setting long-term goals in a volatile information technology spending environment, while the relative TSR target is a three-year metric set prior to the grant date. In addition to the performance metrics described above, except in limited termination scenarios, PSUs are also subject to the continued employment of each NEO through the applicable performance period. For our CEO, the 2024 PSU grant will be valued at 50% of his overall equity compensation package, and for our other NEOs, the PSUs will represent one-third of their equity compensation for 2024.
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation of our NEOs for services rendered to us in all capacities for 2023, 2022, and 2021.
Summary Compensation Table
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) (1)(2) | Option awards ($) (1) | Non-equity incentive plan compensation ($) (3) | All other compensation ($) (4) | | Total ($) | | Arkadiy Dobkin President and Chief Executive Officer | 2023 | $812,500 | – | $3,118,869 | $3,099,953 | $500,000 | $13,808 | | $7,545,130 | | | 2022 | $775,000 | – | $2,166,810 | $2,500,047 | $1,000,000 | $11,400 | | $6,453,257 | | | 2021 | $687,500 | – | $2,000,063 | $1,999,961 | $1,234,000 | $8,648 | | $5,930,172 | | Jason Peterson Senior Vice President, Chief Financial Officer and Treasurer | 2023 | $525,000 | – | $4,527,159 | $1,499,977 | $282,000 | $14,488 | | $6,848,624 | | | 2022 | $493,750 | – | $1,083,272 | $1,249,959 | $500,000 | $11,400 | | $3,338,381 | | | 2021 | $466,250 | – | $900,177 | $899,961 | $700,000 | $11,600 | | $2,977,988 | | Balazs Fejes President of EU and APAC Markets | 2023 | $587,197(5) | – | $1,509,053 | $1,499,977 | $282,000(5) | | – | $3,878,227 | | | 2022 | $512,201 | – | $1,083,272 | $1,249,959 | $500,000(5) | | – | $3,345,432 | | | 2021 | $488,959 | – | $950,105 | $950,006 | $700,000(5) | | – | $3,089,070 | | Viktar Dvorkin Senior Vice President, Head of Global Delivery | 2023 | $456,250 | – | $1,006,135 | $999,985 | $212,000 | $16,584 | | $2,690,954 | | | 2022 | $437,500 | – | $736,764 | $849,982 | $400,000 | $11,400 | | $2,435,646 | | | 2021 | $392,500 | – | $650,170 | $650,019 | $500,000 | $11,084 | | $2,203,773 | | Larry Solomon Senior Vice President and Chief People Officer | 2023 | $456,250 | – | $1,006,135 | $999,985 | $212,000 | $15,178 | | $2,689,548 | | | 2022 | $437,500 | – | $736,764 | $849,982 | $400,000 | $11,400 | | $2,435,646 | | | 2021 | $392,500 | – | $650,170 | $650,019 | $500,000 | $11,600 | | $2,204,289 |
Summary Compensation Table
| (1) The amounts in these columns represent the aggregate grant date fair value of the restricted stock unit and option awards granted to our named executive officers in 2022 and 2023, respectively, computed in accordance with FASB ASC Topic 718 and excluding the effect of estimated forfeitures. We provide information regarding the assumptions used to calculate the value of these stock-based compensation awards in Note 14 to the audited consolidated financial statements included in our 2023 Annual Report. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon vesting or exercise, as applicable, will approximate the aggregate grant date fair value. |
Summary Compensation Table
| (2) The amounts in this column for stock awards granted in 2021 represent the aggregate grant date fair value of the restricted stock units granted to our named executive officers computed by multiplying the 30-day average closing price of a share of EPAM Common Stock on the New York Stock Exchange by the number of restricted stock units granted to the applicable named executive officer. |
Summary Compensation Table
| (3) The amounts in this column represent cash payout amounts earned under our annual cash incentive program for each of the NEOs for 2023. For additional details regarding the annual cash incentives, see the disclosure under the heading “Elements of Compensation – Short-Term Cash Incentive Awards.” |
Summary Compensation Table
| (4) The amounts in this column represent 401(k) plan matching contributions. |
Summary Compensation Table
| (5) Mr. Fejes’ cash compensation was paid in Swiss francs. For 2023, 2022, and 2021, the applicable exchange rates used were $1.11, $1.05, and $1.09, per Swiss franc, based on the average exchange rates from oanda.com. |
Summary Compensation Table
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Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information regarding grants of plan-based awards to our NEOs for the year ended December 31, 2023.
Grants of Plan-Based Awards
| Name | Grant date | Award approval date (1) | Estimated future payouts under non-equity incentive plan awards | | | All other stock awards: Number of shares of stock or units (#) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards (2) | | | | | Threshold ($) | Target ($) | Maximum ($) | | | | | | Arkadiy Dobkin | 2/21/2023 | 2/21/2023 | – | $1,062,500 | $2,125,000 | | | | | | | 3/31/2023 | 2/21/2023 | | | | | 19,685 (5) | $299 | $3,099,953 | | | 3/31/2023 | 2/21/2023 | | | | 10,431 (3) | | | $3,118,869 | | Jason Peterson | 2/21/2023 | 2/21/2023 | – | $600,000 | $1,200,000 | | | | | | | 3/31/2023 | 2/21/2023 | | | | | 9,525 (5) | $299 | $1,499,977 | | | 3/31/2023 | 2/21/2023 | | | | 5,047 (3) | | | $1,509,053 | | | 3/31/2023 | 2/21/2023 | | | | 10,094 (4) | | | $3,018,106 | | Balazs Fejes | 2/21/2023 | 2/21/2023 | – | $600,000 | $1,200,000 | | | | | | | 3/31/2023 | 2/21/2023 | | | | | 9,525 (5) | $299 | $1,499,977 | | | 3/31/2023 | 2/21/2023 | | | | 5,047 (3) | | | $1,509,053 | | Viktar Dvorkin | 2/21/2023 | 2/21/2023 | – | $450,000 | $900,000 | | | | | | | 3/31/2023 | 2/21/2023 | | | | | 6,350 (5) | $299 | $999,985 | | | 3/31/2023 | 2/21/2023 | | | | 3,365 (3) | | | $1,006,135 | | Larry Solomon | 2/21/2023 | 2/21/2023 | – | $450,000 | $900,000 | | | | | | | 3/31/2023 | 2/21/2023 | | | | | 6,350 (5) | $299 | $999,985 | | | 3/31/2023 | 2/21/2023 | | | | 3,365 (3) | | | $1,006,135 |
Grants of Plan-Based Awards
| (1) On February 21, 2023, the Compensation Committee approved non-equity incentive plan award targets and recommended grants of stock options and restricted stock units to our named executive officers which our Board of Directors then approved. |
Grants of Plan-Based Awards
| (2) The amounts in this column represent the aggregate grant date fair value of the restricted stock unit and option awards granted to our named executive officers in 2022, computed in accordance with FASB ASC Topic 718 and excluding the effect of estimated forfeitures. We provide information regarding the assumptions used to calculate the value of these stock-based compensation awards in Note 14 to the audited consolidated financial statements included in our 2023 Annual Report. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon vesting or exercise, as applicable, will approximate the aggregate grant date fair value. |
Grants of Plan-Based Awards
| (3) These restricted stock units are scheduled to vest as to 25% of the shares on each of March 15, 2024, 2025, 2026, and 2027. |
Grants of Plan-Based Awards
| (4) Represents a one-time retention grant of restricted stock units to Mr. Peterson. These restricted stock units are scheduled to vest as to one-third of the shares on each of March 15, 2024, 2025, and 2026. |
Grants of Plan-Based Awards
| (5) Each stock option will become exercisable as to 25% of the shares on each of March 15, 2024, 2025, 2026, and 2027. |
Grants of Plan-Based Awards
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Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding the holdings of stock options and stock awards that remained outstanding as of December 31, 2023 for each of our NEOs.
Outstanding Equity Awards at Fiscal Year-End
| | Option awards | | | | Stock awards | | | Name (a) | Number of securities underlying unexercised options (#) exercisable (b) | Number of securities underlying unexercised options (#) unexercisable (c) | Option exercise price ($) (d) | Option expiration date (e) | Number of shares or units of stock that have not vested (#) (f) | Market value of shares or units of stock that have not vested (#) (1) (g) | | Arkadiy Dobkin | 80,000 | | $32.08 | 3/31/2024 | | | | | 50,000 | | $61.38 | 3/23/2025 | | | | | 41,026 | | $70.52 | 3/25/2026 | | | | | 39,594 | | $73.27 | 3/24/2027 | | | | | 28,830 | | $112.62 | 3/23/2028 | | | | | 22,733 (2) | | $169.13 | 3/29/2029 | | | | | 18,967 (3) | 6,322 (3) | $175.22 | 3/27/2030 | | | | | 7,074 (4) | 7,073 (4) | $387.74 | 3/26/2031 | | | | | 4,823 (5) | 14,466 (5) | $266.75 | 3/25/2032 | | | | | | 19,685 (6) | $299.00 | 3/31/2033 | | | | | | | | | 21,169 (7) | $6,294,390 | | Jason Peterson | 3,088 (2) | | $169.13 | 3/29/2029 | | | | | 7,295 (3) | 2,431 (3) | $175.22 | 3/27/2030 | | | | | 3,184 (4) | 3,182 (4) | $387.74 | 3/26/2031 | | | | | 2,411 (5) | 7,233 (5) | $266.75 | 3/25/2032 | | | | | | 9,525 (6) | $299.00 | 3/31/2033 | | | | | | | | | 20,148 (7) | $5,990,806 | | Balazs Fejes | 9,093 (2) | | $169.13 | 3/29/2029 | | | | | 7,295 (3) | 2,431 (3) | $175.22 | 3/27/2030 | | | | | 3,360 (4) | 3,360 (4) | $387.74 | 3/26/2031 | | | | | 2,411 (5) | 7,233 (5) | $266.75 | 3/25/2032 | | | | | | 9,525 (6) | $299.00 | 3/31/2033 | | | | | | | | | 10,120 (7) | $3,009,080 |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| | Option awards | | | | Stock awards | | | Name (a) | Number of securities underlying unexercised options (#) exercisable (b) | Number of securities underlying unexercised options (#) unexercisable (c) | Option exercise price ($) (d) | Option expiration date (e) | Number of shares or units of stock that have not vested (#) (f) | Market value of shares or units of stock that have not vested (#) (1) (g) | | Viktar Dvorkin | 12,000 | | $61.38 | 3/23/2025 | | | | | 12,868 | | $73.27 | 3/24/2027 | | | | | 8,649 | | $112.62 | 3/23/2028 | | | | | 6,721 (2) | | $169.13 | 3/29/2029 | | | | | 5,544 (3) | 1,848 (3) | $175.22 | 3/27/2030 | | | | | 2,300 (4) | 2,298 (4) | $387.74 | 3/26/2031 | | | | | 1,640 (5) | 4,918 (5) | $266.75 | 3/25/2032 | | | | | | 6,350 (6) | $299.00 | 3/31/2033 | | | | | | | | | 6,881 (7) | $2,045,997 | | Larry Solomon | 8,649 | | $112.62 | 3/23/2028 | | | | | 6,721 (2) | | $169.13 | 3/29/2029 | | | | | 5,544 (3) | 1,848 (3) | $175.22 | 3/27/2030 | | | | | 2,300 (4) | 2,298 (4) | $387.74 | 3/26/2031 | | | | | 1,640 (5) | 4,918 (5) | $266.75 | 3/25/2032 | | | | | | 6,350 (6) | $299.00 | 3/31/2033 | | | | | | | | | 6,881 (7) | $2,045,997 |
Outstanding Equity Awards at Fiscal Year-End
| (1) The closing market price of our Common Stock on the NYSE on December 29, 2023, the last trading day of 2023, was $297.34. (2) The option became exercisable as to 25% of the total grant on each of March 29, 2020, 2021, 2022 and 2023. |
Outstanding Equity Awards at Fiscal Year-End
| (3) The option became exercisable as to 25% of the total grant on each of March 27, 2021, 2022 and 2023 and will become exercisable as to 25% of the total grant on March 27, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (4) The option became exercisable as to 25% of the total grant on each of March 15, 2022 and 2023 and will become exercisable as to 25% of the total grant on each of March 15, 2024 and 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (5) The option became exercisable as to 25% of the total grant on March 15, 2023 and will become exercisable as to 25% of the total grant on each of March 15, 2024, 2025 and 2026. |
Outstanding Equity Awards at Fiscal Year-End
| (6) The option becomes exercisable as to 25% of the total grant on each of March 15, 2024, 2025, 2026, and 2027. |
Outstanding Equity Awards at Fiscal Year-End
| (7) Represents restricted stock units awarded in 2020 that are scheduled to vest as to 25% of the shares on March 27, 2024; restricted stock units awarded in 2021 that are scheduled to vest as to 25% of the shares on each of March 15, 2024 and 2025; restricted stock units awarded in 2022 that are scheduled to vest as to 25% of the shares on each of March 15, 2024, 2025, and 2026; restricted stock units awarded in 2023 that are scheduled to vest as to 25% of the shares on each of March 15, 2024, 2025, 2026, and 2027; and in the case of Mr. Peterson, 10,094 restricted stock units that are scheduled to vest as to one-third of the shares on each of March 15 2024, 2025, and 2026. |
Outstanding Equity Awards at Fiscal Year-End
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Options Exercised & Stock Vested
Options Exercised & Stock Vested The following table sets forth information regarding the exercise of stock options and shares acquired upon vesting of stock awards by our NEOs during the year ended December 31, 2023.
Options Exercised & Stock Vested
| | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) (1) | Value realized on exercise ($) | Number of shares acquired on vesting (#) (2) | Value realized on vesting ($) (3) | | Arkadiy Dobkin | – | – | 7,539 | $2,133,136 | | Jason Peterson | – | – | 3,141 | $889,556 | | Balazs Fejes | – | – | 3,290 | $931,808 | | Viktar Dvorkin | – | – | 2,352 | $665,851 | | Larry Solomon | – | – | 2,352 | $665,851 |
Options Exercised & Stock Vested
| (1) No options were exercised by our NEOs in the year ending December 31, 2023. |
Options Exercised & Stock Vested
| (2) Represents gross number of shares acquired on vesting. EPAM’s practice is to withhold shares to satisfy the tax withholding requirement arising from the vesting of restricted stock units. |
Options Exercised & Stock Vested
| (3) Calculated based on the closing market price of EPAM Common Stock on the trading day prior to the vest date. |
Potential Payments on Termination and Change of Control
Potential Payments on Termination and Change of Control As discussed above, in 2023 we did not have a formal severance plan or similar arrangement that provides our NEOs (or other employees) with cash severance, equity acceleration, or other payments in connection with a termination of his or her employment with EPAM (except due to death or disability or retirement, provided age and years of service conditions are met) or a change of control of EPAM. In addition, EPAM does not provide excise tax gross-ups to any of our NEOs, and the 2015 Plan expressly prohibits us from providing such gross-ups.
Pay Ratio
Pay Ratio In accordance with the requirements of Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for 2023:
Pay Ratio
| • | the median of the annual total compensation of all our employees (other than our Chief Executive Officer) was $39,153; |
Pay Ratio
| • | the annual total compensation of Chief Executive Officer was $7,545,130; and |
Pay Ratio
| • | the ratio of these two amounts was 193 to 1. |
Pay Ratio
We believe our pay ratio presented above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. As SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, estimates and assumptions, our pay ratio may not be comparable with the pay ratios reported by other companies. As permitted by the Pay Ratio Rule, we have used the same median employee identified in our 2022 Pay Ratio Disclosure section of our definitive proxy statement for our 2023 Annual Meeting (the “2022 Pay Ratio Disclosure”) because during 2023 there was no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to or otherwise significantly impact our pay ratio disclosure. For a full description of the methodology we used to identify our “median employee” and determine the annual total compensation for such median employee, please see our 2022 Pay Ratio Disclosure; however, the information therein is not incorporated by reference into this Proxy Statement.
Pay Ratio
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Pay Ratio
Pay Versus Performance We structure our compensation using a mix of short-term compensation, in the form of base salaries and annual cash incentive payments, and long-term compensation, in the form of equity-based awards, to meet our NEO compensation objectives of:
Pay Ratio
| • | Attracting, motivating, developing, and retaining quality executives who will increase long-term stockholder value. |
Pay Ratio
| • | Providing total compensation that is commensurate with position and experience, primarily through annual and long-term incentives aligned with the long-term interests of our stockholders. |
Pay Ratio
| • | Rewarding exceptional performance and long-term commitment to EPAM. |
Pay Ratio
| • | And beginning with 2024, grant performance-based equity awards to align executive interests with long-term interests of EPAM stockholders. |
Pay Ratio
Our Compensation Discussion and Analysis that begins on page 35 of this Proxy Statement provides more information on our approach and methodology for making executive compensation decisions. As noted in the Compensation Discussion and Analysis, particularly in the tables starting on page 46, our compensation decisions are made using the value of equity-based awards measured as of the date the equity award was granted, which differs from the values in the table below which are calculated according to prescribed SEC rules. Particularly, the amounts listed in the tables and graphs below labeled as “Compensation Actually Paid” does not represent the value of cash and equity awards that we paid to our NEOs during any year, but rather is an amount calculated under SEC rules and includes, among other things, adjustments to values of unvested and vested equity awards based on year-end stock prices and various accounting valuation assumptions.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| | | | | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (3) | | Value of Initial Fixed $100 | | | | | | | | | | | | Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | | | | | Total Shareholder Return (4) | Peer Group Total Shareholder Return (5) | Net Income (in thousands) (6) | Annual Revenue Growth (7) | | (a) | (b) | (c) | | (d) | (e) | | (f) | (g) | (h) | (i) | | 2023 | $7,545,130 | | 5,251,802 | $4,026,838 | | $4,783,721 | $140.15 | $219.40 | $417,083 | (2.8%) | | 2022 | $6,453,257 | ($ | 13,933,984) | $2,888,776 | ($ | 4,103,371) | $154.48 | $108.30 | $419,416 | 28.4% | | 2021 | $5,930,172 | | 26,698,904 | $2,618,780 | | 9,947,826 | $315.07 | $189.62 | $481,652 | 41.3% | | 2020 | $4,704,626 | | 15,462,041 | $1,875,283 | | 5,775,470 | $168.91 | $147.70 | $327,160 | 24.5% |
Pay Versus Performance Table
| (1) The value associated with the acceleration of outstanding stock options is based on the closing market price of a share of our Common Stock as of December 29, 2023 ($ 297.34 ), the last trading day of 2023, minus the applicable exercise price. |
Pay Versus Performance Table
| (2) The value associated with the acceleration of eligible unvested restricted stock units is based on the closing market price of a share of our Common Stock as of December 29, 2023 ($297.34), the last trading day of 2023. |
Pay Versus Performance Table
| | Year | | | | | | | | | | 2020 | | 2021 | | 2022 | | 2023 | | | SCT Total Compensation | | 4,704,626 | | 5,930,172 | | 6,453,257 | | 7,545,130 | | Subtract equity award values in SCT | ($ | 3,250,908) | ($ | 4,000,024) | ($ | 4,666,857) | ($ | 6,218,822) | | Add year-end value of unvested equity awards granted in the year | | 8,210,331 | | 8,830,693 | | 6,369,771 | | 6,281,375 | | Change in value of unvested equity awards granted in prior years | | 7,457,887 | | 15,195,140 | ($ | 11,264,101) | ($ | 1,188,374) | | Change in value of equity awards granted in prior years which vested in the year | ($ | 1,659,895) | | 742,923 | ($ | 10,826,054) | ($ | 1,167,507) | | Total | | 15,462,041 | | 26,698,904 | ($ | 13,933,984) | | 5,251,802 |
Pay Versus Performance Table
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Pay Versus Performance Table
Stock option grant date fair values included in SCT Total Compensation are estimated using the Black-Scholes option valuation model as of grant date. For the purposes of calculating Compensation Actually Paid, we estimated the stock option fair values using the Black-Scholes option valuation model as of each applicable measurement date using the stock price as of the measurement date and updated assumptions (i.e., expected term, expected volatility, expected dividends, risk-free interest rate) as of the measurement date. Restricted stock unit grant date fair values are calculated as set forth in the footnotes to the Summary Compensation Table. For the purposes of calculating Compensation Actually Paid, adjustments were made using the stock price as of the last trading day of each applicable year and as of each applicable measurement date.
Pay Versus Performance Table
| (3) Column (e) reflects the average Compensation Actually Paid to our four NEOs that are not our CEO in each of 2023, 2022, 2021 and 2020, calculated as set forth in the table below and in accordance with SEC rules. No dividends or other earnings were paid on stock or option awards in any of the covered fiscal years and no equity awards were cancelled due to a failure to meet vesting conditions. The dollar amounts reflected in column (e) of the table above do not reflect the actual amount of compensation earned by or paid to our NEOs during any of the applicable years. For information regarding the decisions made by our Compensation Committee about our NEO’s compensation for each fiscal year, please see the Compensation Discussion and Analysis section of this Proxy Statement and the proxy statements for each of the fiscal years covered in the table above. |
Pay Versus Performance Table
| | Year | | | | | | | | | | 2020 | | 2021 | | 2022 | | 2023 | | | SCT Total Compensation | | 1,875,283 | | 2,618,780 | | 2,888,776 | | 4,026,838 | | Subtract equity award values in SCT | ($ | 1,099,974) | ($ | 1,575,157) | ($ | 1,959,989) | ($ | 1,631,051) | | Add year-end value of unvested equity awards granted in the year | | 2,778,712 | | 3,477,363 | | 2,675,178 | | 3,283,130 | | Change in value of unvested equity awards granted in prior years | | 2,647,489 | | 5,085,424 | ($ | 4,009,358) | ($ | 467,560) | | Change in value of equity awards granted in prior years which vested in the year | ($ | 426,040) | | 341,416 | ($ | 3,697,978) | ($ | 427,636) | | Total | | 5,775,470 | | 9,947,826 | ($ | 4,103,371) | | $4,783,721 |
Pay Versus Performance Table
Stock option fair values and time-vested restricted stock unit fair values as of the applicable measurement date were calculated as set forth in footnote 2.
Pay Versus Performance Table
| (4) Column (f) represents EPAM’s cumulative total shareholder return (EPAM TSR). |
Pay Versus Performance Table
| (5) Column (g) represents the cumulative TSR of the S&P 500 Information Technology Index (“S&P 500 IT Index”) for the year ending December 31, 2023. In the measurement periods ending on December 31, 2020, 2021, and 2022, our identified peer group consisted of Cognizant Technology Solutions Corp. (NASDAQ:CTSH), DXC Technology Company (NYSE:DXC), Endava plc (NYSE:DAVA), Globant S.A. (NYSE:GLOB), Infosys Ltd. (NYSE:INFY), Perficient, Inc. (NASDAQ:PRFT), and Wipro Limited (NYSE:WIT) (together, the “Identified Peer Group”). Beginning in 2023, we elected to replace the Identified Peer Group with the S&P 500 IT Index, the same as our peer group as determined under Item 201(e) of Regulation S-K and described in Item 5 of the Annual Report for the year ending December 31, 2023, because we believe the S&P 500 IT Index represents a more diversified group of companies across the technology industry in which we operate and is more aligned with a comparable group of peer companies. This S&P 500 IT Index will replace our Identified Peer Group in future years. For the year ending December 31, 2023, the Identified Peer Group TSR was $146.70 and the S&P 500 IT Index TSR was $219.40, however, in this transition year both the Identified Peer Group TSR and the S&P 500 IT Index TSR are included in the graphs below. (6) Reflects “Net Income” in our Consolidated Statements of Income included in our Annual Report on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020. |
Pay Versus Performance Table
| (7) Listed below in a tabular list are, in our assessment, the most important financial performance measures we use to link compensation of our NEOs for each year in the table above to EPAM’s performance. The following tabular list represents all of the financial and non-financial measures used to link compensation to performance. |
Pay Versus Performance Table
| Measure | Explanation | | Annual Revenue Growth | Company-Selected Measure and a financial measure of revenue growth generated from year-to-year as a percentage increase over the immediately preceding year | | Adjusted Income from Operations* | A non-GAAP financial measure that consists of income from operations that is then adjusted to eliminate the effect of certain expenses, costs, and impairments and is used to illustrate underlying trends in our business, establish budgets and operational goals, communicate internally and externally, and for managing our business and evaluating our performance |
Pay Versus Performance Table
* Refer to “Appendix A: Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” for additional information.
Pay Versus Performance Table
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Pay Versus Performance Table
Below are graphs showing the relationship of Compensation Actually Paid to our CEO and average Compensation Actually Paid to our NEOs that are not the CEO in 2020, 2021, 2022, and 2023 to the EPAM TSR, Identified Peer Group TSR, S&P 500 IT Index TSR, EPAM’s net income, and EPAM’s annual revenue growth.
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. Revenue Growth (Year-over-Year)
Compensation Actually Paid vs. Revenue Growth (Year-over-Year)
Compensation Actually Paid vs. Revenue Growth (Year-over-Year)
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Compensation Actually Paid vs. Revenue Growth (Year-over-Year)
Independent Registered Public Accounting Firm The Audit Committee, which is composed entirely of independent directors, has selected Deloitte & Touche LLP, independent registered public accounting firm, to audit our financial statements for the year ending December 31, 2024. Deloitte & Touche LLP has served as our independent registered public accounting firm since 2006. Representatives from Deloitte & Touche LLP will attend the Annual Meeting to respond to any appropriate questions and will have the opportunity to make a statement, if they so desire.
Directors
Directors Upon recommendation of the Nominating and Corporate Governance Committee, the Board has nominated each of Arkadiy Dobkin, DeAnne Aguirre, Chandra McMahon, and Robert E. Segert for election as Class III directors at the Annual Meeting. During 2023, the Board retained and paid fees to a third-party search firm to assist the Nominating and Corporate Governance Committee in identifying and evaluating potential director candidates. Consistent with our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee requested that the search firm include candidates of different races, ethnicities, genders, and sexual orientations as well as diverse backgrounds, experiences, and skills, as part of its search. Our two new director nominees, DeAnne Aguirre and Chandra McMahon, were initially recommended to the Nominating and Corporate Governance Committee by the third-party search firm and selected after the committee and the Board held numerous interviews with multiple qualified candidates. Each of these directors will hold office until the annual meeting of stockholders in 2027, or until their respective successors have been elected and qualified. The director nominees have consented to being named in this Proxy Statement as nominees for election as director and have agreed to serve as directors if elected. We did not pay a fee to any third party to identify or evaluate any potential Class III director nominees. Please see the discussion under “Board of Directors” in this Proxy Statement for information concerning each of our nominees for director.