DEF 14A of Bright Horizons Family Solutions Inc.

Filed Apr 25, 2024 · FY20230001193125-24-111396

Open on EDGAR

June 5, 2024
| Outstanding Equity Awards at Fiscal Year-End | 47 | | Option Exercises and Stock Vested | 48 | | Nonqualified Deferred Compensation | 48 | | Potential Payments Upon Termination or Change of Control | 49 | | CEO Pay Ratio | 51 | | Pay versus Performance | 53 | | Proposal 2—Advisory Vote on Named Executive Officer 2023 Compensation | 58 | | Audit Committee Matters | 59 | | Audit Committee Report | 59 | | Audit and Other Fees | 61 | | Pre-Approval of Audit and Permitted Non-Audit Services | 61 | | Proposal 3—Ratification of Appointment of Independent Registered Public Accounting Firm | 62 | | Proposal 4—Approval of an Amendment to the Company’s Certificate of Incorporation to Declassify the Board of Directors | 64 | | Proposal 5—Approval of an Amendment to the Company’s Certificate of Incorporation to provide for the Exculpation of Officers as permitted by Delaware law | 66 | | Proposal 6—Approval of an Amendment to the Company’s Certificate of Incorporation to add a Federal Forum Selection Provision and to Update and Clarify the Delaware Forum Selection Provision | 68 | | Proposal 7—Approval of Miscellaneous Amendments to the Company’s Certificate of Incorporation | 70 | | Other Information | 72 | | Shareholder Proposals for the 2025 Annual Meeting | 72 | | 2023 Annual Report | 72 | | Shareholder Account Maintenance | 72 | | Householding of Proxy Materials | 72 | | Other Matters | 73 | | Cost of Solicitation | 73 | | Exhibit A: Proposed Third Amended and Restated Certificate of Incorporation | A-1 | | Exhibit B: Proposed Changes to the Company’s Certificate of Incorporation (marked to show changes) | B-1 | | Appendix A | APP-1 |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Currently, Bright Horizons has a classified Board currently consisting of (1) four directors with terms expiring in 2024 (Class II), (2) three directors with terms expiring in 2025 (Class III), and (3) three directors with terms expiring in 2026 (Class I). At each annual meeting of shareholders, directors in one class are elected for a full term of three years to succeed those directors whose terms are expiring. At the 2024 Annual Meeting, based on feedback previously received from shareholders, we are seeking shareholder approval to amend the Company’s Certificate of Incorporation to declassify our Board (see Proposal 4 in this Proxy Statement). If shareholders approve Proposal 4, starting at the 2025 Annual Meeting, each class of nominees will be elected for one-year terms until the Board is fully declassified beginning with the 2027 Annual Meeting. The Board currently has the following ten members:
ELECTION OF DIRECTORS
| Class I | Class II | Class III | | • Stephen H. Kramer | • Julie Atkinson | • Lawrence M. Alleva | | • Dr. Sara Lawrence-Lightfoot | • Jordan Hitch | • Joshua Bekenstein | | • Cathy E. Minehan | • Laurel J. Richie | • David H. Lissy | | | • Mary Ann Tocio | |
ELECTION OF DIRECTORS
On March 28, 2024, Dr. Lawrence-Lightfoot announced that she will retire from the Board effective as of close of business on June 5, 2024, at which time it is expected that the Board will decrease its size and make other changes to equally balance the membership among the classes of directors. The Board thanks Dr. Lawrence-Lightfoot for her more than 30 years of service. This year, the four Class II director nominees will stand for election to a three-year term expiring at the 2027 Annual Meeting. The persons named as proxies will vote to elect Julie Atkinson, Jordan Hitch, Laurel J. Richie and Mary Ann Tocio as directors unless your proxy is marked otherwise. Each of these nominees has indicated his or her willingness to serve, if elected, and as of the date of this Proxy Statement, the Board is not aware that any nominee is unable or will decline to serve as a director. In the event any nominee is unable to serve as a director at the time of the Annual Meeting, the shares of common stock represented by proxies may be voted for a substitute nominee, if any, who may be designated by the Board to fill the vacancy. We seek nominees with established strong professional reputations, business acumen and experience in multi-site operations and/or contracted business services in the child care, employee benefits and work/life solutions industry. We also seek nominees with experience in substantive areas that are important to our business such as international operations; accounting, finance and capital markets; strategic planning and leadership of complex organizations; human resources and development practices; compliance and risk; marketing strategy; and innovation. The nominees have substantial leadership, management, marketing, digital strategy, finance/capital markets, and industry/education expertise. The diversity of experience of these nominees, as illustrated by the skills described in their biographies below, help drive our strategic priorities. Each nominee brings a unique perspective to our Board that we believe is invaluable.
ELECTION OF DIRECTORS
| Nominees for Election for Class II Directors (Terms Expiring in 2027) |
ELECTION OF DIRECTORS
The individuals listed below, Julie Atkinson, Jordan Hitch, Laurel J. Richie, and Mary Anne Tocio, have been nominated and are standing for election at this year’s Annual Meeting. If elected, they will hold office until our 2027 Annual Meeting and until their successors are duly elected and qualified. All of these directors were previously elected to the Board by shareholders. This year’s nominees are all independent. Each nominee has held senior executive positions in large, complex organizations or with businesses within our industry, and has a broad range of experience that spans different industries and sectors. Each nominee has experience serving on boards and committees of other public companies and all nominees possess an understanding of public company corporate governance practices and trends. All of our nominees have served the Board previously, which has provided them with significant exposure to
ELECTION OF DIRECTORS
| 2024 Proxy Statement | | | 5 |
ELECTION OF DIRECTORS
both our business and the industry in which we operate. Our nominees bring to our Board a variety of skills, qualifications and viewpoints that both strengthen their ability to carry out their oversight role on behalf of our shareholders and bring richness to Board deliberations. We believe that all our nominees possess the professional and personal qualifications necessary for Board service, and we have highlighted particularly noteworthy attributes and qualifications for each director in the individual biographies below.
ELECTION OF DIRECTORS
| Julie Atkinson Age: 50 Director since: 2017 Committees: • Nominating and Corporate Governance Committee | Background: Ms. Atkinson served as Chief Marketing Officer for Chopt Creative Salad Company from October 2019 to January 2023. She previously served as Senior Vice President, Global Digital at Tory Burch LLC from February 2017 to February 2018. Prior to joining Tory Burch, Ms. Atkinson served in various leadership roles at Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), most recently as Senior Vice President, Global Digital from November 2014 to January 2017 and as Vice President of Global Online Distribution from September 2012 until November 2014. Prior to joining Starwood, Ms. Atkinson held multiple roles at Travelocity including marketing and operations. Ms. Atkinson currently serves on the board of directors of Ventoux CCM (Nasdaq: VTAQU). Current public company directorships (including Bright Horizons): 2 Qualifications: Ms. Atkinson’s valuable experience and background in marketing, digital growth strategy, operations and e-commerce make her a key resource for the Board. |
ELECTION OF DIRECTORS
| Jordan Hitch Age: 57 Director since: 2008 Committees: • Compensation Committee, Chair • Nominating and Corporate Governance Committee | Background: Mr. Hitch is currently an active private investor in a wide range of early stage growth companies and renewable infrastructure projects. Previously, Mr. Hitch was a Managing Director at Bain Capital LLP (“Bain Capital”) for 18 years. Mr. Hitch served as a Senior Advisor to Bain Capital following his departure from the firm in 2015 until 2017. Prior to joining Bain Capital, Mr. Hitch was a consultant at Bain & Company where he worked in the financial services, healthcare and utility industries. Mr. Hitch currently serves on the board of directors of Burlington Stores, Inc. (NYSE: BURL) and as Chair of their Compensation Committee. Current public company directorships (including Bright Horizons): 2 Qualifications: Mr. Hitch’s significant professional experience in, and knowledge of, corporate finance, strategic development and capital markets strengthen the collective qualifications, skills and experience of the Board. |
ELECTION OF DIRECTORS
| 6 | | | Bright Horizons |
ELECTION OF DIRECTORS
| Laurel J. Richie Age: 65 Director since: 2019 Committees: • Nominating and Corporate Governance Committee, Chair • Audit Committee | Background: Ms. Richie served as President of the Women’s National Basketball Association LLC (“WNBA”), from May 2011 to November 2015. Prior to her appointment in 2011 to the WNBA, she served as Chief Marketing Officer of Girl Scouts of the United States of America from 2008 to 2011. From 1984 to 2008, she held various positions at Ogilvy & Mather, including Senior Partner and Executive Group Director and founding member of the agency’s Diversity Advisory Board. Ms. Richie is a former trustee of the Naismith Basketball Hall of Fame and Dartmouth College where she served as Chair of the board from 2017 to 2021. She currently serves as a director of Synchrony Financial (NYSE: SYF) and as a member of their Management Development and Compensation Committee and Nominating and Corporate Governance Committee, and she serves as a director of Hasbro, Inc. (Nasdaq: HAS) and as a member of their Compensation Committee and Nominating, Governance and Social Responsibility Committee. She also serves as a leadership consultant to Fortune 100 C-suite executives on matters of personal leadership and corporate culture. Current public company directorships (including Bright Horizons): 3 Qualifications: Ms. Richie’s executive management and leadership experience, her strategic and operational expertise, her considerable background in communications, brand development and marketing and her experience serving on Governance and Social Responsibility Committees make her a key member of the Board. |
ELECTION OF DIRECTORS
| Mary Ann Tocio Age: 76 Director since: 2001 | Background: Ms. Tocio served as Chief Operating Officer of the Company from 1993 and as President and COO from June 2000 until her retirement in June 2015. Ms. Tocio joined Bright Horizons in 1992 as Vice President and General Manager of Child Care Operations. Ms. Tocio has more than 30 years of experience managing multi-site service organizations, more than 20 years of which were with the Company. She was previously the Senior Vice President of Operations for Health Stop Medical Management, Inc. Ms. Tocio currently serves as a member of the board of directors of Burlington Stores, Inc. (NYSE: BURL) and as a member of their Compensation Committee and Chair of their Nominating and Governance Committee. She previously served on the board of 1Life Healthcare, Inc. (NASDAQ: ONEM) from September 2021 to February 2023 and the board of Civitas Solutions, Inc. (The MENTOR Network) (NYSE: CIVI) from October 2015 to March 2019. Current public company directorships (including Bright Horizons): 2 Qualifications: Ms. Tocio’s significant leadership and operational experience, including as former President and Chief Operating Officer of the Company, and her expertise with managing complex and growing organizations as well as other public company board experience render her an invaluable resource as a director. |
ELECTION OF DIRECTORS
The Company has a majority voting requirement for the uncontested election of directors, which increases our Board’s accountability to our shareholders. A majority of the votes cast at the Annual Meeting will be required for the election of each of the Class II director nominees. A nominee for director will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election. Broker non-votes and abstentions are not considered votes cast for the foregoing purpose, and will have no effect on the outcome of the election of the nominees.
ELECTION OF DIRECTORS
| ☑ | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE CLASS II NOMINEES AS DIRECTOR. |
ELECTION OF DIRECTORS
| 2024 Proxy Statement | | | 7 |
ELECTION OF DIRECTORS
| Biographies of Directors Not Standing for Election |
Class III Directors with Terms Expiring in 2025
Class III Directors with Terms Expiring in 2025
Class III Directors with Terms Expiring in 2025
| Lawrence M. Alleva Age: 74 Director since: 2012 Committees: • Audit Committee, Chair • Compensation Committee | Background: Mr. Alleva is a Certified Public Accountant (inactive) and spent his professional career with PricewaterhouseCoopers LLP (“PwC”), including 28 years as a partner, from 1971 until his retirement in 2010. At PwC he served clients ranging from Fortune 500 and multinational companies to rapid-growth companies pursuing initial public offerings. Mr. Alleva also served in a senior national leadership role for PwC’s Ethics and Compliance Group to manage the design and implementation of best practice procedures, internal controls and monitoring activities, including PwC’s response to inspection reports issued by the Public Company Accounting Oversight Board. Mr. Alleva currently serves as a director and Chair of the audit committees of Adaptimmune Therapeutics PLC (Nasdaq: ADAP), Mersana Therapeutics Inc. (Nasdaq: MRSN) and Galera Therapeutics, Inc. (Nasdaq: GRTX) as well as a member of the Galera Compensation Committee and the Mersana Nominating Committee. He previously served in a similar capacity as audit Chair for Tesaro Inc. (Nasdaq: TSRO), Mirna Therapeutics, Inc. (Nasdaq: MIRN) and GlobalLogic, Inc. He served as a trustee of Ithaca College for over 20 years, including in the Vice-Chair role for 10 years. Current public company directorships (including Bright Horizons): 4 Qualifications: Mr. Alleva brings valuable experience to the Board through his audit assurance and Sarbanes-Oxley Act expertise, and his professional focus on areas such as corporate governance, business strategy, risk, internal controls and financial reporting best practices. |
Class III Directors with Terms Expiring in 2025
| Joshua Bekenstein Age: 65 Director since: 1986 Committees: • Compensation Committee | Background: Mr. Bekenstein has been a Senior Advisor at Bain Capital since January 1, 2023. Previously, he was Managing Director at Bain Capital since 1986. Mr. Bekenstein serves as a director of BRP Inc. (TSX: DOO) and Dollarama Inc. (OTC: DLMAF). He previously served on the boards of The Michaels Companies, Inc. (Nasdaq: MIK) until January 2022, and Canada Goose Holdings Inc. (NYSE: GOOS) until September 2023. Current public company directorships (including Bright Horizons): 3 Qualifications: Mr. Bekenstein brings to the Board many years of experience both as a senior executive of a large investment firm and as a director of public companies in various business sectors. |
Class III Directors with Terms Expiring in 2025
| 8 | | | Bright Horizons |
Class III Directors with Terms Expiring in 2025
| David H. Lissy Age: 58 Director since: 2001 Position: • Chair of the Board | Background: Mr. Lissy is the current Chair of the Board. He served as Executive Chairman of the Company from January 2018 through December 2019 and has served as a director of the Company since 2001. Mr. Lissy served as Chief Executive Officer of the Company from January 2002 to January 2018 and previously served as Chief Development Officer from July 1998 until January 2002 and as Executive Vice President from June 2000 to January 2002. Prior to joining Bright Horizons in 1997, Mr. Lissy served as senior vice president/general manager at Aetna U.S. Healthcare in the New England region. Mr. Lissy has served on the board of Redfin Corporation (Nasdaq: RDFN) since 2018 and as Chair since 2020. He also serves on the boards of private companies, BeneLynk, Inc. and Scripta Insights, Inc., and as Chair of the Board of Trustees of Ithaca College. Current public company directorships (including Bright Horizons): 2 Qualifications: Mr. Lissy’s prior experience, his leadership at many charitable, business services and educational organizations, and his leadership and prior management of the Company provide him with the considerable experience and breadth of management skills to serve as Chair of the Board. |
Class I Directors with Terms Expiring in 2026
Class I Directors with Terms Expiring in 2026
Class I Directors with Terms Expiring in 2026
| Stephen H. Kramer Age: 53 Director since: 2018 Position: • Chief Executive Officer and President | Background: Mr. Kramer has served as Chief Executive Officer and a director of the Company since January 2018 and as President of the Company since January 2016. Mr. Kramer served as the Chief Development Officer from January 2014 until January 2016 and as Senior Vice President, Strategic Growth & Global Operations from January 2010 until December 2013. He served as Managing Director, Europe from January 2008 until December 2009. He joined Bright Horizons in September 2006 through the acquisition of College Coach, which he co-founded and led for eight years. Current public company directorships (including Bright Horizons): 1 Qualifications: Mr. Kramer’s long career with Bright Horizons and his leadership and management of the Company’s day-to-day operations and strategic direction provides the Board with a deeper understanding of the Company’s business processes, strategic plan and operations making him a necessary and vital member of the Board. |
Class I Directors with Terms Expiring in 2026
| 2024 Proxy Statement | | | 9 |
Class I Directors with Terms Expiring in 2026
| Dr. Sara Lawrence-Lightfoot Age: 79 Director since: 1993 Committees: • Nominating and Corporate Governance Committee | Background: Dr. Lawrence-Lightfoot, a MacArthur winning sociologist, is the Emily Hargroves Fisher Research Professor of Education at Harvard University and has been on the faculty since 1972. She retired from teaching in 2019. She is the first African American woman in Harvard’s history to have an endowed chair named in her honor. Dr. Lawrence-Lightfoot served as a director of the John D. and Catherine T. MacArthur Foundation from 1991 to 2007 and as chair from 2001 to 2007. She was deputy Chair of the board of directors of Atlantic Philanthropies, where she served from 2007 to 2021, and previously served as Chair of the Academic Affairs Committee of the board of trustees of Berklee College of Music from September 2007 until March 2012. She was re-elected to the Berklee board of trustees in March 2014 and served until 2022. She served as trustee of the WGBH Educational Foundation from 2001 through 2019. Dr. Lawrence-Lightfoot is an elected Fellow of the American Philosophical Society, the American Academy of Arts and Sciences, the American Academy of Political and Social Sciences, and the National Academy of Education. Current public company directorships (including Bright Horizons): 1 Qualifications: Dr. Lawrence-Lightfoot’s extensive research and expertise in child development, teacher training, classroom structures and processes, curriculum development, parent/teacher relationships, educational policies and organizational structures and her position in academia provide an invaluable and unique perspective to the Board. Retirement: Dr. Lawrence-Lightfoot has announced she will retire from the Board effective as of close of business on June 5, 2024. |
Class I Directors with Terms Expiring in 2026
| Cathy E. Minehan Age: 77 Director since: 2016 Committees: • Audit Committee | Background: Ms. Minehan has been the Managing Director of Arlington Advisory Partners LLC, a private company, since 2016. Ms. Minehan retired as Dean of the School of Management of Simmons College in June 2016 having held that position since August 2011. Ms. Minehan retired from the Federal Reserve Bank of Boston in July 2007, after serving 39 years with the Federal Reserve System. From July 1994 until her retirement, she was the President and Chief Executive Officer of the Federal Reserve Bank of Boston and served on the Federal Open Market Committee. She also was the first Vice President and Chief Operating Officer of the Federal Reserve Bank of Boston from July 1991 to July 1994. Ms. Minehan currently serves on the board of directors and as Chair of the audit committee of MITRE, a federally funded research and development corporation. She is also a trustee of the Brookings Institution, an honorary trustee and Chair of the Nominations and Governance Committee of Massachusetts General Hospital’s board of trustees, co-chair of the Institutional Conflict Committee of Partners Healthcare System, co-chair of the Boston Women’s Workforce Council, Chair of the board of the Museum of Fine Arts Boston, president of the National Association of Corporate Directors New England Chapter and Vice-Chair of WGBH. She previously served on the board of directors of Visa, Inc. (NYSE: V) and as a member of its audit committee and the board of directors of MassMutual Life Insurance Company. Ms. Minehan is also a member of the University of Rochester’s board of trustees and is an elected fellow of the American Academy of Arts and Sciences. Current public company directorships (including Bright Horizons): 1 Qualifications: Ms. Minehan, through her past leadership roles, her financial knowledge and her experience with risk management issues and best practices for audit committees and boards as well as her long-tenure with the Federal Reserve System, lends considerable financial, risk management, policy-making and operational expertise to the Board. |
Class I Directors with Terms Expiring in 2026
| 10 | | | Bright Horizons |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Company’s director compensation program for non-employee directors, as further described below, is intended to be competitive in attracting and recruiting new Board candidates, as well as retaining current Board members, and to align our directors’ interests with those of our shareholders.
DIRECTOR COMPENSATION
| Annual Cash Compensation |
DIRECTOR COMPENSATION
Our non-employee directors receive an annual retainer of $50,000 for their service on the Board and receive the following additional annual retainers for their service on Board committees:
DIRECTOR COMPENSATION
| Committee | Chair(1) | Member | | Audit Committee | $25,000 | $10,000 | | Compensation Committee | $15,000 | $7,500 | | Nominating and Corporate Governance Committee | $10,000 | $5,000 | | Special Committee | $5,000 | $5,000 |
DIRECTOR COMPENSATION
(1) Committee Chairs do not receive an additional committee member retainer. If a non-employee director does not serve on the Board or a Board committee for the full year, the Board and any applicable committee retainers and equity grants, as described below, are generally pro-rated. The current non-employee Chair of the Board, Mr. Lissy, receives a total annual retainer of $225,000 in recognition of the leadership, expertise, and industry experience that he brings to the role as well as his counsel and assistance on various strategic initiatives.
DIRECTOR COMPENSATION
| Annual Equity Grant |
DIRECTOR COMPENSATION
Each non-employee director receives an annual equity grant of restricted stock units (“Director RSUs”) valued at $100,000 and our Chair receives an annual equity grant of Director RSUs valued at $150,000, with the number of stock units determined by dividing the grant value by the closing price of the Company’s common stock on the NYSE on the date of grant. These Director RSUs are fully vested on the grant date and are settled on the earliest of (1) the director’s termination of service as a member of the Board, (2) the fifth anniversary of the grant date, or (3) a change of control of the Company.
DIRECTOR COMPENSATION
| Expense Reimbursements |
DIRECTOR COMPENSATION
The Company reimburses Board members for reasonable out-of-pocket expenses incurred in attending Board and Board committee meetings.
DIRECTOR COMPENSATION
| Stock Ownership Guidelines |
DIRECTOR COMPENSATION
The Board has adopted minimum stock ownership guidelines for non-employee directors. Non-employee directors are expected to own Company shares with a market value equal to five times (5x) the annual Board cash retainer and have five years from the date of their appointment to the Board to achieve this threshold. As of December 31, 2023, each of our non-employee directors have met or exceeded this stock ownership requirement.
DIRECTOR COMPENSATION
| 2024 Proxy Statement | | | 11 |
DIRECTOR COMPENSATION
| 2023 Director Compensation |
DIRECTOR COMPENSATION
The following table sets forth information concerning the compensation earned by our non-employee directors during the fiscal year ended December 31, 2023. Compensation for Mr. Kramer in 2023, as Chief Executive Officer, is included in the Summary Compensation Table and the supplemental tables under the heading Executive Compensation included elsewhere in this Proxy Statement. Mr. Kramer did not receive any additional compensation for serving on the Board during 2023.
DIRECTOR COMPENSATION
| Director | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) | | Lawrence M. Alleva | 87,500 | 100,000 | 187,500 | | Julie Atkinson | 55,000 | 100,000 | 155,000 | | Joshua Bekenstein | 57,500 | 100,000 | 157,500 | | Jordan Hitch | 75,000 | 100,000 | 175,000 | | Dr. Sara Lawrence-Lightfoot | 55,000 | 100,000 | 155,000 | | David H. Lissy | 230,000 | 150,000 | 380,000 | | Cathy E. Minehan | 60,000 | 100,000 | 160,000 | | Laurel J. Richie | 75,000 | 100,000 | 175,000 | | Mary Ann Tocio | 50,000 | 100,000 | 150,000 |
DIRECTOR COMPENSATION
| (1) Amounts include annual retainer fees as well as fees for service on a special committee during 2023 for Messrs. Alleva, Hitch and Lissy, and Ms. Richie. |
DIRECTOR COMPENSATION
| (2) Amounts shown reflect the grant date fair value of Director RSUs granted to our non-employee directors in 2023, based on the value of the awards as determined in accordance with FASB ASC Topic 718. Refer to Note 15 to our audited consolidated financial statements included in our 2023 Annual Report for additional information. |
DIRECTOR COMPENSATION
| (3) As of December 31, 2023, Messrs. Alleva, Bekenstein and Hitch, Mses. Atkinson, Minehan and Tocio, and Dr. Lawrence-Lightfoot each held 4,597 Director RSUs; Ms. Richie held 4,795 Director RSUs; and Mr. Lissy held 5,786 Director RSUs. All Director RSUs are fully vested on the grant date and are settled as described above. |
DIRECTOR COMPENSATION
| 12 | | | Bright Horizons |
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
| • | Assist the Board in fulfilling its responsibilities relating to oversight of the compensation of our directors, executive officers and other employees and the administration of our benefits and equity-based compensation programs. |
Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee
Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee The Nominating and Corporate Governance Committee is responsible for recommending candidates to stand for election to the Board at the Company’s annual meeting of shareholders and for recommending candidates to fill vacancies on the Board that may occur between annual meetings. The Nominating and Corporate Governance Committee receives suggestions for new directors from a number of sources, including other Board members and our Chief Executive Officer. It also may, in its discretion, employ a third-party search firm to assist in identifying candidates for director. Our Corporate Governance Guidelines provide that the Board shall review the appropriate skills and characteristics required of Board members in the context of its current make-up. It is the policy of the Board that directors should possess the highest personal and professional ethics, integrity and values. Board
Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee
| 22 | | | Bright Horizons |
Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee
members are expected to become and remain informed about the Company, its business and its industry and rigorously prepare for, attend and participate in all Board and applicable committee meetings. The Nominating and Corporate Governance Committee evaluates each individual in the context of the skills, character, diversity and expertise of the Board as a whole, with the objective of recommending a group that can best continue the success of our business and represent shareholder interests through the exercise of sound judgment using its diversity of experience. The Board seeks the best director candidates based on the skills and characteristics required without regard to race, color, national origin, religion, disability, marital status, age, sexual orientation, gender, gender identity and expression, or any other basis protected by federal, state or local law. Our Corporate Governance Guidelines provide that our Board seeks to represent diversity as to experience, gender and ethnicity/race as well as be committed to a diversified membership, in terms of both the individuals involved as well as their various experiences and areas of expertise. Our Corporate Governance Guidelines also provide that the Nominating and Corporate Governance Committee include, and has any search firm that it engages include, women and racially and ethnically diverse candidates in the pool from which director candidates are selected. The Nominating and Corporate Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills that are identified in the biographical information contained under Proposal 1—Election of Directors.
Procedures for Recommendation of Director Nominees by Shareholders
Procedures for Recommendation of Director Nominees by Shareholders The Nominating and Corporate Governance Committee considers properly submitted recommendations for candidates to the Board from shareholders in accordance with our Bylaws. Any shareholder may submit in writing a candidate for consideration for each shareholder meeting at which directors are to be elected by no later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary date of the prior year’s annual meeting. Any shareholder recommendations for consideration by the Nominating and Corporate Governance Committee should include the candidate’s name, biographical information, and the information required by Section 1.2 of our Bylaws. Recommendations should be sent to c/o Corporate Secretary, Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, MA 02459. The Nominating and Corporate Governance Committee evaluates candidates for the position of director recommended by shareholders or others in the same manner as candidates from other sources. The Nominating and Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.
Procedures for Recommendation of Director Nominees by Shareholders
| Majority Voting |
Procedures for Recommendation of Director Nominees by Shareholders
Our Bylaws include a majority voting requirement for the election of directors at uncontested meetings of shareholders to increase our Board’s accountability to our shareholders. Under the Company’s majority voting standard, a nominee for director in an uncontested election will be elected to the Board if the votes cast “for” such nominee’s election exceed the votes cast “against” such nominee’s election (disregarding abstentions and broker non-votes). Directors are elected by plurality vote in a contested election of directors (as defined in our Bylaws). Our Bylaws provide that, to the extent that an irrevocable resignation has not been previously received by the Board from an incumbent director, in an uncontested election, such director will promptly tender his or her resignation to the Board upon failure to receive at least the majority of votes cast with respect to his or her election. Based on a recommendation by the Nominating and Corporate Governance Committee, the Board shall act on the resignation, taking into account the committee’s recommendation, and publicly disclose its decision regarding the resignation and the rationale behind the decision, within 90 days following certification of the election results. The Nominating and Corporate Governance Committee, in making its recommendation, and the Board, in making its decision, each may consider any factors and other information that they consider appropriate and relevant. If the Board does not accept the resignation, the incumbent director will continue to serve until the next annual meeting and until his or her successor is duly elected, or earlier resignation or removal.
Procedures for Recommendation of Director Nominees by Shareholders
| Policies Relating to Directors and Limits on Board Service |
Procedures for Recommendation of Director Nominees by Shareholders
It is our policy that directors, who are also employees of the Company (other than Chief Executive Officer) shall offer their resignation from the Board at the same time they retire from employment with the Company. In addition, it is our policy that directors who retire or otherwise change from the principal occupation or background association they held when they were originally invited to the Board should provide notice to the Board and offer to resign. The Board does not believe that such directors should necessarily leave the Board, but it is our policy that there should be an opportunity for the Board to review the continued appropriateness of such director’s membership under these circumstances.
Procedures for Recommendation of Director Nominees by Shareholders
| 2024 Proxy Statement | | | 23 |
Procedures for Recommendation of Director Nominees by Shareholders
We believe that no director should serve on more than four boards of public companies (including our Board) and that our Chief Executive Officer should serve on no more than two boards of public companies (including our Board). All directors currently comply with these requirements.
Procedures for Recommendation of Director Nominees by Shareholders
| Current Limits on Board Service | | | | Directors | No more than 4 | ☑ | | Chief Executive Officer | No more than 2 | ☑ |
Procedures for Recommendation of Director Nominees by Shareholders
Pursuant to our Audit Committee charter and NYSE Rules, members may serve on no more than three separate public company audit committees simultaneously without prior review and determination by the Board that such simultaneous service would not impair the ability of such member to effectively serve on the Company’s Audit Committee. Mr. Alleva, a retired partner at PwC, currently serves on the audit committees of four public companies (including Bright Horizons). The Board, after due consideration of the facts and in light of Mr. Alleva’s dedication to, and stewardship of, the Company’s Audit Committee, has determined that Mr. Alleva’s service on the audit committees of four public companies would not impair his ability to effectively serve on the Company’s Audit Committee.
Procedures for Recommendation of Director Nominees by Shareholders
| Director Education |
Procedures for Recommendation of Director Nominees by Shareholders
Our director orientation and continuing education program consists of visits to Bright Horizons centers, background material on the Company, education regarding our Code of Business Conduct and Ethics and other policies and practices relevant to our business and operations, and meetings with, and presentations by, senior management. In addition, we provide updates on relevant topics of interest to the Board. We also encourage directors to attend director education programs sponsored by various educational institutions and all Board members are eligible to receive a National Association of Corporate Directors membership.
Procedures for Recommendation of Director Nominees by Shareholders
| Code of Business Conduct and Ethics |
Procedures for Recommendation of Director Nominees by Shareholders
Bright Horizons demands integrity and is committed to upholding high ethical standards. We have a written Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees and a written Code of Ethics for Senior Managers and Financial Management Team, which are designed to ensure that our business is conducted with integrity. These codes cover, among other things, professional conduct, conflicts of interest, accurate recordkeeping and reporting, public communications and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. Copies of these codes can be found under “Governance & Responsibility—Governance Documents” in the Investor Relations section of our website, www.brighthorizons.com. We intend to disclose any future amendments to, or waivers from, these codes of ethics for Bright Horizons executive officers within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.
Procedures for Recommendation of Director Nominees by Shareholders
| Online Availability of Information and Governance Documents |
Procedures for Recommendation of Director Nominees by Shareholders
The current versions of our Corporate Governance Guidelines, Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees, Code of Ethics for Senior Managers and Financial Management Team and charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available under “Governance & Responsibility—Governance Documents” in the Investor Relations section of our website, www.brighthorizons.com. These materials are also available in print free of charge to shareholders upon written request to c/o Corporate Secretary, Bright Horizons Family Solutions Inc., 2 Wells Avenue, Newton, Massachusetts 02459.
Procedures for Recommendation of Director Nominees by Shareholders
| 24 | | | Bright Horizons |
Overview of Compensation Program
Overview of Compensation Program Our NEOs’ compensation is determined by the Compensation Committee and is reviewed annually. Our executive compensation program is designed to attract and retain high-quality leadership and incentivize our executive officers and other key employees to achieve company performance goals and strong individual performance. Our pay-for-performance approach places a greater emphasis on long-term equity incentive grants than on other forms of compensation, reflecting our focus on long-term value creation, and serving to align the interests of our executive officers with those of our shareholders. Our long-term equity incentive program (“LTIP”) consists of equity awards in the form of performance-based restricted stock units (“PRSUs”), time-based restricted stock units (“RSUs”) and stock options. Equity awards under our LTIP seek to align executive compensation to performance by tying the vesting of such equity awards to pre-established Company performance metrics.
2023 Compensation Impacts
| • | Approved a new LTIP to add performance-based equity awards to incentivize our NEOs, promote the successful execution of the Company’s longer term growth and performance strategy, and align more closely with market practice. For 2023, each NEOs’ LTIP award was composed of 25% stock options, 25% PRSUs and 50% RSUs by target value. |
2023 Compensation Impacts
| • | Maintained approximate equity award target values for all NEOs with the following exceptions: (1) a modest increase in the LTIP target value for Ms. Marshall to reflect her promotion as an executive officer and to better align with other NEOs and (2) an increase in the LTIP target value for Mr. Kramer to $3,500,000 (up from $2,176,900) to better align with market levels. |
2023 Compensation Impacts
| • | Maintained the total target annual bonus opportunity consistent with 2022 levels for all NEOs, and retained a range of bonus payouts applicable to the 50% portion of the annual bonus award tied to corporate performance, with bonus payouts ranging from 50-100% based on achievement of a percentage of targeted growth over 2022 performance. The performance range was designed to establish appropriately rigorous performance targets in light of the continuing uncertain operating environment. |
Compensation and Governance Best Practices
| What We Do: | | What We Don’t Do: | | | ☑ | Limit incentive compensation—a 3x cap on the maximum payout of the portion of annual cash bonuses tied to Company performance. | ☒ | No tax gross-ups—we do not provide tax gross-ups to our executive officers. | | ☑ | Maintain stock ownership guidelines—we have robust stock ownership guidelines for directors, our Chief Executive Officer and our other NEOs. | ☒ | No repricing of options—we do not allow repricing of underwater stock options unless approved by our shareholders. | | ☑ | Set challenging performance goals—we set rigorous corporate performance targets for our annual incentive bonuses and PRSUs that we believe motivate our executives to deliver value to our shareholders. | ☒ | No defined benefit pension—we do not maintain a defined benefit pension plan for our executive officers. | | ☑ | Grant performance-based equity and tie incentive compensation to achievement of financial performance metrics—we disclose the financial performance metrics used in our incentive bonuses and PRSUs and maintain a pay mix that is weighted to performance-based compensation. | ☒ | Restrictions on Dividends and Dividend Equivalents—our Equity Plan prohibits participants from receiving current dividends that are paid before the underlying award vests and is paid. | | ☑ | Minimum vesting requirement—awards granted under the Equity Plan have a one-year minimum vesting requirement (subject to a 5% carve-out). | ☒ | Do not incentivize excessive risk taking—we annually assess our compensation program to mitigate compensation-related risks. | | ☑ | Clawback policy—clawback policy providing for the mandatory recoupment of erroneously awarded incentive-based compensation received by covered current and former executive officers in the event of an accounting restatement. | ☒ | Limited perks—we provide only modest perquisites to our executive officers and most benefits are available to all eligible employees. | | ☑ | Limits on non-employee director compensation—our Equity Plan contains a separate limit on the value of equity awards and cash fees that may be awarded annually to non-employee directors. | ☒ | Anti-hedging and anti-pledging policy—hedging and pledging transactions are strictly prohibited under our Amended and Restated Insider Trading Policy. |
Elements of Executive Compensation
| Compensation Element | Compensation Objectives and Approach | | Fixed: Base Salary and Benefits | • Recognizes performance of job responsibilities. • Aims to attract and retain key employees. • Reflects experience and contributions of individual NEOs. • Benefits are generally made available to all eligible employees. | | Incentive: Annual Cash Bonus | • At-risk pay designed to motivate achievement of annual corporate performance goals. • Based on achievement of corporate and individual achievement against stated strategic goals. | | At-Risk: Long-Term Equity Incentive Awards • 50% Time-Based RSUs • 25% Performance-Based RSUs • 25% Stock Options | • Places a greater emphasis on long-term incentive with three-year vesting. • Reflects our focus on long-term value creation and serving to align the interests of our NEOs with those of our shareholders. • PRSUs awarded based on performance of the Company. |
Other NEOs 2023 Pay Mix
Other NEOs 2023 Pay Mix Our NEOs are also entitled to certain compensation and benefits upon a qualifying termination of employment pursuant to severance agreements, which are more fully described in Potential Payments Upon Termination or Change of Control found elsewhere in this Proxy Statement. Salary. Salaries for our NEOs provide a fixed, base level of cash compensation. It is our philosophy to maintain a conservative level of base cash compensation, with greater emphasis placed on short-term and long-term incentive compensation. Salaries are reviewed annually by the Compensation Committee. When reviewing salaries, the Compensation Committee considers factors such as each officer’s experience and individual performance, the Company’s performance as a whole and general industry conditions, but does not assign specific weighting to any factor. Consistent with the philosophy of maintaining a conservative level of base cash compensation, we have generally provided for modest salary increases on an annual basis.
Other NEOs 2023 Pay Mix
| Annual Cash Bonus. Our annual cash bonus program under our Annual Incentive Plan was established to promote and reward the achievement of key strategic and business goals as well as individual performance and is designed to motivate our executive officers to meet or exceed annual performance goals and ensure that a portion of each NEOs’ annual compensation is at-risk and dependent on overall company performance. For 2023, 50% of the cash bonus awards granted were based on the achievement of pre-established corporate performance goals and 50% were based on a qualitative assessment of individual performance goals. | |
Other NEOs 2023 Pay Mix
Under the annual cash bonus program, each NEO receives a target award opportunity expressed as a percentage of salary. Each executive’s target award opportunity is established by the Compensation Committee based on the individual’s scope of responsibilities and his or her potential contributions to the achievement of the Company’s strategic goals. The table below summarizes the target award bonus opportunity for our NEOs for 2023 as approved by the Compensation Committee:
Other NEOs 2023 Pay Mix
| Named Executive Officer | 2023 Target Bonus Opportunity (% of salary) | 2022 Target Bonus Opportunity (% of salary) | | Stephen H. Kramer | 145% | 145% | | Elizabeth J. Boland | 100% | 100% | | Mary Lou Burke Afonso | 100% | 100% | | Mandy Berman(1) | 100% | — | | Rosamund Marshall(2) | 75% | 50%/75% |
Other NEOs 2023 Pay Mix
| (2) Ms. Marshall became an executive officer effective July 1, 2022. In connection with Ms. Marshall’s promotion, her target cash bonus opportunity was increased from 50% to 75% of base salary effective July 1, 2022. |
Other NEOs 2023 Pay Mix
2023 Individual Performance Assessment. During the first quarter of 2024, the Compensation Committee evaluated the individual performance of our NEOs for 2023 and considered the various individual and business factors outlined above, each person’s strategic and operational decisions and their contributions to our achievement of the corporate performance goals, and their other efforts to strengthen the Company’s performance. The Compensation Committee determined that each NEO earned 100% of the 50% portion of the 2023 annual cash bonus award based on individual performance. Corporate Performance. The corporate performance goals are designed to be challenging targets that we believe motivate and incentivize our executive officers to deliver value to our shareholders. For the 50% portion of the cash bonus awards based on the achievement of pre-established corporate performance goals, Adjusted EBITDA and Adjusted EPS were selected as the corporate performance metrics for 2023. The Compensation Committee selected Adjusted EBITDA as it reflects the Company’s cash flow generation on a consistent basis and is a strong overall indicator of the Company’s operational performance. Adjusted EPS was selected as a corporate performance metric as it reflects the Company’s overall operating and financial achievements adjusted for the impact of certain non-cash charges and non-recurring transactions. At the beginning of 2023, the Compensation Committee established target Adjusted EBITDA and Adjusted EPS corporate performance goals. The Compensation Committee determined to equally weight these goals for the corporate performance portion of the bonus award such that 50% was based on meeting an Adjusted EBITDA target and 50% was based on meeting an Adjusted EPS target. The Compensation Committee established a bonus payout range applicable to the corporate performance portion of the bonus award. Each target corporate performance level represents a growth target of Adjusted EBITDA and a growth target of Adjusted EPS over 2022 performance (each, a “Target”). The Targets were designed to establish a rigorous performance metric that also considered the continuing uncertain operating environment. NEOs were eligible to receive bonus payouts ranging from 50-100% if the Company achieved Adjusted EBITDA and Adjusted EPS of between 25%-100% of the applicable Targets as follows:
Other NEOs 2023 Pay Mix
| • | Achievement below 25% of respective Targets represents a 0% payout. |
Other NEOs 2023 Pay Mix
| • | Achievement at 25% of respective Targets represents a 50% bonus payout. |
Other NEOs 2023 Pay Mix
| • | Achievement between 25%-100% of respective Targets represents a bonus payout on a sliding scale between 50%-100%. |
Other NEOs 2023 Pay Mix
| • | Achievement at respective Targets equals a 100% bonus payout. |
Other NEOs 2023 Pay Mix
| • | Outperformance of respective Targets represents a bonus payout on a sliding scale with the maximum amount to be paid capped at three times (300%) the portion of the annual cash bonus based on corporate performance. |
Other NEOs 2023 Pay Mix
While the Compensation Committee has discretion to include, exclude or adjust for certain non-recurring or isolated charges, or to adjust the amount that each named executive officer earns with respect to his or her annual cash bonus based on other factors it deems appropriate, the Compensation Committee did not make any such adjustments in awarding 2023 cash bonuses. A weighted average performance achievement as outlined below resulted in the Compensation Committee determination that each NEO earned 31.8% of the 50% portion of the 2023 annual cash bonus award based on corporate performance. 2023 Annual Cash Bonus Payout. During the first quarter of 2024, the Compensation Committee assessed (1) the achievement of individual performance goals for each NEO, including the strategic and operational decisions made to achieve the Company’s financial performance targets and (2) the overall corporate performance achievement. Based on individual performance and corporate performance levels as described above, the Compensation Committee determined that our NEOs would receive the following total cash bonuses for 2023 under our annual cash bonus plan:
Other NEOs 2023 Pay Mix
| Named Executive Officer | Target Bonus Opportunity as % of Salary | Individual Performance (50%) | Corporate Performance (50%) | | | Weighted Average Total Bonus Earned | Actual Bonus Paid as % of Salary | | | | | Adjusted EBITDA (25%) | Adjusted EPS (25%) | Weighted Average Achievement | | | | Stephen H. Kramer | 145% | 100% | 66.6% | 60.5% | 31.8% | 81.8% | 118.6% | | Elizabeth J. Boland | 100% | 100% | 66.6% | 60.5% | 31.8% | 81.8% | 81.8% | | Mary Lou Burke Afonso | 100% | 100% | 66.6% | 60.5% | 31.8% | 81.8% | 81.8% | | Mandy Berman(1) | 100% | 100% | 66.6% | 60.5% | 31.8% | 81.8% | 81.8% | | Rosamund Marshall | 75% | 100% | 66.6% | 60.5% | 31.8% | 81.8% | 61.4% |
Other NEOs 2023 Pay Mix
| (1) Ms. Berman joined the Company effective February 21, 2023. Her paid bonus for 2023 was based on a pro-rated salary from her date of hire. |
Other NEOs 2023 Pay Mix
Equity Awards. The largest single component of our executive compensation program has been the annual granting of equity-based awards. As noted above, the Compensation Committee made certain changes to 2023 compensation program, including replacing the Company’s prior Equity Choice Plan and approving a new LTIP to add performance-based equity awards. We believe these changes serve to appropriately incentivize our NEOs, promote the successful execution of the longer term growth and performance strategy, and to tie additional compensation to performance. Beginning in 2023, under the Company’s LTIP, our executive officers and other key employees were awarded annual long-term equity incentive awards, including stock options, RSUs, and PRSUs. Each NEOs’ LTIP award was composed of 25% stock options, 25% PRSUs and 50% RSUs by target value. The 2023 LTIP awards
Other NEOs 2023 Pay Mix
were granted in February 2023. Prior to 2023, the Company granted long-term equity incentive awards under the prior Equity Choice Plan in the form of stock options and/or purchased restricted stock. Executive officers were awarded a choice between stock options and/or purchased restricted stock with purchased restricted stock awards requiring a payment by our executive officers in an amount equal to 50% of the fair market value of the shares on the date of the award. The Compensation Committee believes the LTIP equity awards serve to align the interests of our executive officers with those of our shareholders, encourage retention and promote a longer-term, strategic view. We believe the following terms of our LTIP awards align the interests of our executive officers with those of our shareholders:
Other NEOs 2023 Pay Mix
| ☑ | Performance-Based Restricted Stock Units | • 25% of the LTIP award is performance-based with a three-year cliff-vesting upon the achievement of the three-year average of annual Adjusted EBITDA growth goals. | | ☑ | 3-Year Vesting for RSUs | • 50% of the LTIP award is RSUs with three-year cliff-vesting, with such shares being subject to forfeiture in the event the recipient leaves the Company before the vesting date. | | ☑ | 3-Year Vesting for Stock Options | • Three-year vesting schedule for stock options, vesting in three equal installments on the first, second and third anniversary of grant date, with such unvested options being subject to forfeiture in the event the recipient leaves the Company before the applicable vesting date. • We consider stock options to be performance-based because no value is created unless (1) the value of our common stock appreciates after grant and (2) the same value is created for our shareholders. |
Other NEOs 2023 Pay Mix
Vesting of Awards. Under the LTIP, RSUs vest in full on the third anniversary of the grant date (subject to continued service with the Company through the vesting date). Stock options vest over three years in three equal installments on the first, second and third anniversaries of the grant date (subject to continued service with the Company through each applicable vesting date). PRSUs vest on the third anniversary of the grant date based on the three-year average of the achievement of annual Adjusted EBITDA growth goals (subject to continued service with the Company through the vesting date). The Compensation Committee applies three-year vesting periods to all LTIP awards to encourage retention and long-term focus on the Company’s overall performance. The performance objectives and the level of achievement for the 2023 PRSUs were set as follows:
Other NEOs 2023 Pay Mix
| Performance Measure | % of PRSUs Vesting upon Achievement | | | | Annual Adjusted EBITDA Growth | Threshold Payout | Target Payout | Maximum Payout | | | 50% | 100% | 200% | | Annual Adjusted EBITDA growth is measured annually over the three-year performance period with vesting determined at the end of the performance period based on the average of the annual growth achievement for the performance period. | | | |
Other NEOs 2023 Pay Mix
Target Incentive Compensation Value. In the first quarter of 2023, the Compensation Committee granted equity awards under the 2023 LTIP with aggregate target incentive compensation values equal to the amounts below. Under the prior Equity Choice Plan, the target value of equity awards equaled a percentage of salary. Under the 2023 LTIP, the Compensation Committee set the target value of equity awards as a fixed dollar value. In setting the 2023 target values, the Compensation Committee maintained approximate target values for all NEOs with the following exceptions: (1) a modest increase in the target value for Ms. Marshall to reflect her promotion as an executive officer in July 2022 and (2) an increase in the target value for Mr. Kramer to $3,500,000 (up from $2,176,900) to better align with market levels and to promote longer-term retention during continued execution of the Company’s long-term growth strategy. Each award contains certain provisions to align the interests of our executive officers with those of our shareholders as further described above.
Other NEOs 2023 Pay Mix
| Named Executive Officer | 2023 Target Value of Equity Awards | 2022 Target Value of Equity Awards(*) | | Stephen H. Kramer | $3,500,000 | $2,176,900 | | Elizabeth J. Boland | $1,100,000 | $1,064,200 | | Mary Lou Burke Afonso | $1,100,000 | $1,063,300 | | Mandy Berman(1) | $1,100,000 | — | | Rosamund Marshall | $750,000 | $617,500 |
Other NEOs 2023 Pay Mix
Determination of Share Amounts. Under the LTIP, executives are awarded a fixed target dollar value and each NEOs’ LTIP award is composed of 25% stock options, 25% PRSUs and 50% RSUs by target value. The number of shares of our common stock subject to each stock option award is determined based on the target value divided by the Black-Scholes value of an option on the date of grant. The number of shares of RSUs and PRSUs is determined based on the target value divided by the fair market value of a share of common stock on the date of grant. For 2023, the Compensation Committee granted the following awards under the LTIP to our NEOs:
Other NEOs 2023 Pay Mix
| Named Executive Officer | PRSU Target Value | Target # of PRSUs Granted | RSU Target Value | # of RSUs Granted | Stock Option Target Value | # of Stock Options Granted | | Stephen H. Kramer | $875,000 | 11,219 | $1,750,000 | 22,439 | $875,000 | 26,174 | | Elizabeth J. Boland | $275,000 | 3,526 | $550,000 | 7,052 | $275,000 | 8,226 | | Mary Lou Burke Afonso | $275,000 | 3,526 | $550,000 | 7,052 | $275,000 | 8,226 | | Mandy Berman | $275,000 | 3,526 | $550,000 | 7,052 | $275,000 | 8,226 | | Rosamund Marshall | $187,500 | 2,404 | $375,000 | 4,808 | $187,500 | 5,609 |
Other NEOs 2023 Pay Mix
Change of Control / Severance Agreements. All our NEOs have severance agreements or similar arrangements with the Company, which include severance, change of control, and restrictive covenant provisions. We believe that change of control arrangements provide our executives with security that will likely reduce any reluctance they may have to pursue a change of control transaction that could be in the best interests of our shareholders. We also believe that reasonable severance and change of control benefits are necessary in order to attract and retain high-quality executive officers. For more information on the severance arrangements with our NEOs, please see the description in Potential Payments Upon Termination or Change of Control found elsewhere in this Proxy Statement.
Risk Assessment of Overall 2023 Compensation Program
Risk Assessment of Overall 2023 Compensation Program The Compensation Committee has reviewed with management the design and operation of our compensation program for all employees, including our executive officers, for the purpose of determining whether such program might encourage unnecessary or excessive risk-taking. In the case of all employees, salaries are fixed in amount and thus do not encourage risk taking. For eligible employees, including our executive officers and other members of senior management, our equity awards are long-term awards that help align the interests of our employees with those of our shareholders. These awards are made on an annual basis and subject to three-year vesting schedules. The ultimate value of these awards is tied to the Company’s long-term corporate and stock price performance and, based on this long-term focus, we believe these awards should not encourage unnecessary or excessive risk-taking. Our annual cash bonus plan was established to promote and reward the achievement of key annual corporate performance goals as well as individual performance. Each executive officer receives a target award opportunity under this program that is expressed as a percentage of the executive’s salary. While 50% of the annual cash incentive bonus is based on achievement of annual corporate performance goals, and such goals are, by definition, short-term in nature, the Company’s annual incentive program represents only a portion of the total compensation opportunity. Additionally, the maximum amount that can be paid to an executive officer based on the Company’s over-achievement of performance metrics is capped at three times (3x) the portion of the target bonus based on Company performance. In light of the above, the Compensation Committee, after discussion with management, believes that the Company’s compensation program does not create risks that are reasonably likely to have a material adverse effect on the Company.
Risk Assessment of Overall 2023 Compensation Program
| Summary Compensation Table |
Risk Assessment of Overall 2023 Compensation Program
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | | Stephen H. Kramer | 2023 | 650,000 | 471,250 | 2,624,987 | 874,997 | 299,715 | 6,865 | 4,927,814 | | Chief Executive Officer and President | 2022 | 509,232 | 369,193 | 1,210,814 | 1,089,389 | 73,839 | 6,424 | 3,258,891 | | | 2021 | 494,400 | 358,440 | 3,009,591 | — | 358,440 | 16,435 | 4,237,306 | | Elizabeth J. Boland | 2023 | 400,000 | 200,000 | 824,978 | 274,995 | 127,200 | 5,440 | 1,832,613 | | Chief Financial Officer | 2022 | 373,437 | 186,718 | 651,779 | 478,872 | 37,344 | 5,905 | 1,734,055 | | | 2021 | 362,560 | 181,280 | 1,248,541 | 170,856 | 181,280 | 5,557 | 2,150,074 | | Mary Lou Burke Afonso | 2023 | 400,000 | 200,000 | 824,978 | 274,995 | 127,200 | 6,252 | 1,833,425 | | Chief Operating Officer, | 2022 | 373,118 | 186,559 | 265,671 | 715,556 | 37,312 | 7,620 | 1,585,836 | | North America Center Operations | 2021 | 324,450 | 162,225 | 395,159 | 712,656 | 162,225 | 11,436 | 1,768,151 | | Mandy Berman(*) | 2023 | 344,000 | 172,000 | 824,978 | 274,995 | 109,392 | 5,365 | 1,730,730 | | Chief Operating Officer, Back-up Care and Emerging Care Services | | | | | | | | | | Rosamund Marshall(*)(^) | 2023 | 397,888 | 149,208 | 562,464 | 187,509 | 94,896 | 38,456 | 1,430,421 | | Managing Director, International | 2022 | 354,515 | 111,830 | 392,550 | 619,232 | 22,366 | 38,951 | 1,539,444 |
Risk Assessment of Overall 2023 Compensation Program
| Grants of Plan-Based Awards |
Risk Assessment of Overall 2023 Compensation Program
| Outstanding Equity Awards at Fiscal Year-End |
Risk Assessment of Overall 2023 Compensation Program
| Option Exercises and Stock Vested |
Risk Assessment of Overall 2023 Compensation Program
| Nonqualified Deferred Compensation |
Risk Assessment of Overall 2023 Compensation Program
| Potential Payments Upon Termination or Change of Control |
Change of Control / Severance Arrangements
Change of Control / Severance Arrangements The Company has severance agreements with each of Mr. Kramer and Mses. Berman, Boland and Burke Afonso and a service agreement with Ms. Marshall that each provide for certain payments and benefits upon a qualifying termination of the executive’s employment and/or a change of control (as such term is defined in the respective agreements). Change of Control. Pursuant to the severance agreements or service agreement in the case of Ms. Marshall, immediately prior to a change of control, all unvested options then held by the NEO will vest in full. Pursuant to the purchased restricted stock agreements, unvested purchased restricted stock will vest as to 100% of the restricted stock on a change of control. Pursuant to the PRSU agreements, if the participant has been employed for more than two years, the PRSUs will vest as to 100% on a change of control assuming achievement of target and, for participants employed for less than two years, the PRSUs will vest as to 100% only upon a termination without cause or for good reason within 12 months after a change of control and assuming achievement of target. Pursuant to the RSU agreements, if the participant has been employed for more than two years, the RSUs will vest as to 100% on a change of control and, for participants employed for less than two years, the RSUs will vest as to 100% only upon a termination without cause or for good reason within 12 months after a change of control. Additionally, RSUs held by Ms. Marshall prior to 2023 will vest upon a termination without cause or for good reason within 12 months after a change of control. Termination of Employment Without Cause or for Good Reason Within 24 Months Following a Change of Control. If, within 24 months after a change of control (the “Protection Period”), an executive’s employment is terminated by the Company for any reason other than for cause or death or disability, or the executive terminates his or her employment for good reason (as such terms are defined in the respective agreements), the executive will be entitled to receive (a) any accrued but unpaid salary as of termination and a pro-rated portion of any bonus payable for the fiscal year in which the termination occurs, and (b) subject to the executive’s compliance with restricted covenants contained in the agreement severance pay equal to the executive’s total base salary and cash bonus compensation for the prior two years of the executive’s employment in bi-weekly payments for up to two years (and in the event an executive has been employed for less than two years, amounts equal to current salary level and cash bonus compensation for the fiscal year in which termination occurs multiplied by two). If the executive elects, in accordance with applicable federal law, to continue his or her participation in the Company’s health plans following termination of employment, the Company will pay the premiums for such participation for 24 months (or until such earlier date as the executive secures other employment), or if the executive’s continued participation in the Company’s group health plans is not possible under the terms of those plans, the Company will provide the executive and his or her dependents substantially similar benefits or pay the executive an amount equal to the full cash value thereof. Termination of Employment Without Cause or for Good Reason Without a Change of Control. If the Company terminates the executive’s employment without cause or the executive resigns for good reason outside of the Protection Period, in addition to any accrued but unpaid salary and other accrued benefits then due to the executive as of termination, the executive will be entitled to receive bi-weekly severance payments for one year at his or her then current salary level and a pro-rated portion of other accrued benefits due and any bonus payable for the fiscal year in which the termination occurs.
Change of Control / Severance Arrangements
| 2024 Proxy Statement | | | 49 |
Change of Control / Severance Arrangements
Pursuant to the PRSU agreements, the participant’s PRSUs will vest in a pro-rata portion equal to the number of months the participant has been employed during the performance period assuming achievement at target. Termination of Employment Due to Death or Disability. If the executive’s employment terminates due to death or due to the executive becoming disabled, the executive will be entitled to receive accrued but unpaid salary and other accrued benefits then due to the executive as of termination and a pro-rated portion of any bonus payable for the fiscal year in which the termination occurs. In addition, in the case of Ms. Marshall and a termination due to disability, pursuant to her service agreement, Ms. Marshall may (i) be placed on garden leave during all or part of her contractual notice period; or (ii) be paid in lieu of all or part of her contractual notice period, in each case equal to three months’ salary. Pursuant to the purchased restricted stock agreements, any unvested purchased restricted stock will vest as to 100% of the restricted stock on a termination of the executive officer’s employment by reason of death or disability. Pursuant to the PRSU agreements, the participant will vest in a pro-rata portion of PRSUs equal to the number of months the participant has been employed during the performance period assuming achievement at target. Other Termination of Employment. If the executive’s employment is terminated by the Company for cause or the executive voluntarily resigns without good reason, the executive will only be entitled to receive accrued but unpaid salary and any other accrued benefits then due to the executive as of termination. Treatment of Purchased Restricted Stock Awards. In the event the executive’s employment with the Company terminates prior to the vesting date, in certain circumstances, the Company may, but is not obligated to, repurchase the shares subject to the award at a price equal to the lesser of cost or fair market value. Restrictive Covenants. Under the terms of their respective severance agreements or service agreement in the case of Ms. Marshall, each of our NEOs has agreed to confidentiality obligations during and after employment and to non-competition, non-solicitation, and non-hire obligations during the severance payment period (as such term is defined in the respective agreements). Generally, the executive’s right to receive severance pay and benefits described above is subject to his or her execution of an effective release of claims in favor of the Company. The following table summarizes the payments that would have been made to our NEOs upon the occurrence of a qualifying termination of employment or change of control, assuming that each NEOs’ termination of employment or a change of control occurred on December 31, 2023 (the last day of our fiscal year). In the case of a termination of employment by the Company without cause or by the executive for good reason, severance amounts and benefits have been calculated assuming that the termination occurred within the 24-month Protection Period described above. If a termination of employment had occurred on December 31, 2023, severance payments and benefits would have been determined under the executive officer’s severance agreement, or service agreement in the case of Ms. Marshall, as in effect on such date and as described above. Amounts shown do not include (i) accrued but unpaid salary and vested benefits and (ii) other benefits earned or accrued during employment that are available to all salaried employees and that do not discriminate in scope, terms or operations in favor of executive officers.
Change of Control / Severance Arrangements
| | Termination of Employment Without Cause/ for Good Reason and Change of Control | | | | Termination of Employment Without Cause/for Good Reason and No Change of Control | | | Termination of Employment Due to Death or Disability | | | Change of Control | | Name | Pro-Rata Bonus | Salary and Bonus Continuation | Medical Benefits Continuation(1) | Accelerated Vesting of Equity Awards (2)(3)(4)(5) | Pro-Rata Bonus | Salary Continuation | Accelerated Vesting of Equity Awards(6) | Garden Leave(7) | Pro-Rata Bonus | Accelerated Vesting of Equity Awards(8) | Accelerated Vesting of Equity Awards (9) | | Stephen H. Kramer | $770,965 | $2,373,229 | $92,627 | $4,701,412 | $770,965 | $650,000 | $352,426 | — | $770,965 | $1,456,581 | $4,701,412 | | Elizabeth J. Boland | $327,200 | $1,324,699 | $39,547 | $1,657,846 | $327,200 | $400,000 | $110,763 | — | $327,200 | $638,066 | $1,657,846 | | Mary Lou Burke Afonso | $327,200 | $1,324,189 | $92,627 | $1,324,942 | $327,200 | $400,000 | $110,763 | — | $327,200 | $305,162 | $1,324,942 | | Mandy Berman(*) | $327,200 | $1,454,400 | $92,627 | $1,130,543 | $327,200 | $400,000 | $92,303 | — | $327,200 | $92,303 | $133,673 | | Rosamund Marshall(**) | $244,104 | $1,130,703 | $13,930 | $1,242,005 | $244,104 | $397,888 | $75,518 | $99,472 | $244,104 | $75,518 | $1,242,005 |
Change of Control / Severance Arrangements
| (*) | Ms. Berman joined the Company effective February 21, 2023. Amounts for Ms. Berman reflect her annual salary level for a full year and her annual cash bonus for a full year in accordance with her severance agreement. |
Change of Control / Severance Arrangements
| (**) | The amounts reported for Ms. Marshall were converted from British pounds to U.S. dollars using an exchange rate of 1.2434 U.S. dollars per 1.00 British pound, which was the average exchange rate for fiscal year 2023. |
Change of Control / Severance Arrangements
| (1) Based on the cost of health premiums in effect for fiscal year 2024. |
Change of Control / Severance Arrangements
| 50 | | | Bright Horizons |
Change of Control / Severance Arrangements
| (2) Includes unvested stock options. The amount associated with option awards is calculated by multiplying the number of unvested stock option awards by the difference between the exercise price of the stock options and $94.24, which was the closing stock price on December 29, 2023 (the last trading day of 2023). Pursuant to the applicable severance or service agreement, all unvested options held by the NEO will vest in full upon a change of control. Amounts reported do not include unvested options that were out-of-the-money for each NEO as of December 31, 2023: 26,800 options for Mr. Kramer; 15,132 options for Ms. Boland; 33,816 options for Ms. Burke Afonso; and 33,300 options for Ms. Marshall. |
Change of Control / Severance Arrangements
| (3) Includes unvested purchased restricted stock awards. The amount associated with purchased restricted stock awards is calculated by multiplying the number of restricted stock awards by the difference between $94.24 and the initial purchase price of the purchased restricted stock awards. The purchase price of restricted stock awards is equal to 50% of the fair market value of our common stock on the date of grant. The purchase price of restricted stock awards granted on February 26, 2021 was $79.83 per share. The purchase price of restricted stock awards granted on February 25, 2022 was $64.405 per share. Pursuant to the purchased restricted stock agreements, restricted stock will vest as to 100% of the restricted stock on the earliest of the third anniversary of the grant date, a change of control, or the termination of the executive officer’s employment by reason of death or disability (subject to continued service with the Company through the applicable vesting date). |
Change of Control / Severance Arrangements
| (4) Includes unvested RSUs. The amount associated with RSUs is calculated by multiplying the number of RSUs by $94.24. Pursuant to the RSU agreements, for NEOs employed for more than two years, the RSUs will vest as to 100% on a change of control and, for NEOs employed for less than two years, the RSUs will vest as to 100% only upon a termination without cause or for good reason within 12 months after a change of control. Additionally, RSUs held by Ms. Marshall prior to 2023 will vest upon a termination without cause or for good reason within 12 months after a change of control. |
Change of Control / Severance Arrangements
| (5) Includes unvested PRSUs. The amount associated with PRSUs is calculated by assuming target performance is achieved and multiplied by $94.24. Pursuant to the PRSU agreements, for NEOs employed for more than two years, the PRSUs will vest as to 100% on a change of control assuming achievement of target and, for NEOs employed for less than two years, the PRSUs will vest as to 100% only upon a termination without cause or for good reason within 12 months after a change of control and assuming achievement of target. |
Change of Control / Severance Arrangements
| (6) Includes pro-rata vesting of unvested PRSUs. Pursuant to the PRSU agreements, an NEO’s PRSUs will vest in a pro-rata portion equal to the number of months the NEO has been employed during the performance period assuming and achievement at target. |
Change of Control / Severance Arrangements
| (7) Pursuant to Ms. Marshall’s service agreement, upon a termination due to disability, the Company may elect to place Ms. Marshall on garden leave during all or part of her three month contractual notice period, or alternatively, make a payment in lieu of all or part of her three month contractual notice, in each case equal to three months’ salary. |
Change of Control / Severance Arrangements
| (8) Includes unvested purchased restricted stock awards (see footnote (3) above regarding treatment). Includes pro-rata vesting of unvested PRSUs (see footnote (6) above for treatment). RSUs and stock options do not accelerate on termination of employment by reason of death or disability. |
Change of Control / Severance Arrangements
| (9) Includes unvested stock options (see footnote (2) above for treatment). Includes unvested purchased restricted stock awards (see footnote (3) above for treatment). For each NEO, with the exception of Ms. Berman, who has been employed by the Company for less than two years and Ms. Marshall with respect to RSUs granted prior to 2023, includes unvested RSUs (see footnote (4) above for treatment). For each NEO, with the exception of Ms. Berman who has been employed by the Company for less than two years, includes unvested PRSUs (see footnote (5) above for treatment). |
Change of Control / Severance Arrangements
| CEO Pay Ratio |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As discussed in our Compensation Discussion and Analysis above, our Compensation Committee has implemented a compensation program designed to link a substantial portion of our NEOs’ compensation to the achievement of Company performance, and to align our executive pay with the interests of our shareholders. Our compensation program aligns executive pay with shareholder interests and links pay to performance through a blend of short- and long-term performance measures.
Pay versus Performance Table
Pay versus Performance Table The following table sets forth additional compensation information for our principal executive officer (“PEO”), Mr. Kramer, and our NEOs other than Mr. Kramer (“Non-PEO NEOs”), calculated in accordance with applicable SEC rules, for fiscal years 2023, 2022, 2021 and 2020.
Pay versus Performance Table
| Year | Summary Compensation Table Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (3) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2)(3) | Value of Initial Fixed $100 Investment Based on: | | | | | | | | | | Total Shareholder Return (BFAM) (4) | Peer Group Total Shareholder Return (Russell Midcap Growth Index) (4) | Net Income ($) (5) | Adjusted EBITDA ($) (6) | | | | | | | | | (in thousands) | | | 2023 (*) | 4,927,814 | 8,111,323 | 1,706,797 | 2,796,763 | $62.67 | $140.97 | 74,223 | 352,117 | | 2022 (*) | 3,258,891 | (3,276,385) | 1,437,903 | (519,387) | $41.97 | $112.00 | 80,641 | 316,994 | | 2021 | 4,237,306 | (70,237) | 1,507,741 | 88,941 | $83.74 | $152.84 | 70,459 | 272,068 | | 2020 | 2,895,627 | 4,888,039 | 1,052,320 | 1,872,690 | $115.09 | $135.59 | 26,992 | 224,396 |
Pay versus Performance Table
| (*) | Amounts included for 2023 include amounts reported for Ms. Marshall converted from British pounds to U.S. dollars using an exchange rate of 1.2434 U.S. dollars per 1.00 British pound, which was the average exchange rate for fiscal year 2023. Amounts included for 2022 include amounts reported for Ms. Marshall converted from British pounds to U.S. dollars using an exchange rate of 1.2374 U.S. dollars per 1.00 British pound, which was the average exchange rate for fiscal year 2022. |
Pay versus Performance Table
| (1) Reflects the total compensation reported for our PEO, Mr. Kramer, in the Summary Compensation Table for each fiscal year presented. Mr. Kramer served as PEO for each of the covered fiscal years presented. |
Pay versus Performance Table
| (2) See below for calculation of “compensation actually paid” or “CAP” to the PEO and Non-PEO NEOs. The dollar amounts reported represent the amount of CAP as computed in accordance with applicable SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to our PEO or Non-PEO NEOs during the covered fiscal year, but reflect (i) the fair value as of the end of the covered fiscal year of all equity awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year, (ii) the change in fair value as of the end of the covered fiscal year (from the end of the prior fiscal year) of any equity awards granted in any prior fiscal year that were outstanding and unvested at the end of the covered fiscal year, and (iii) the change in fair value as of the vesting date (from the end of the prior fiscal year) of any equity awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. |
Pay versus Performance Table
| (3) Reflects the average total compensation reported for our Non-PEO NEOs in the Summary Compensation Table for each fiscal year presented. The other NEOs reflected in the columns above represent compensation for the following individuals for each of the years shown: |
Pay versus Performance Table
2023 - Mandy Berman, Elizabeth Boland, Mary Lou Burke Afonso and Rosamund Marshall. 2022 - Elizabeth Boland, Mary Lou Burke Afonso, John Casagrande and Rosamund Marshall. 2021 - Maribeth Bearfield, Elizabeth Boland, Mary Lou Burke Afonso and John Casagrande. 2020 - Maribeth Bearfield, Elizabeth Boland, Mary Lou Burke Afonso and John Casagrande.
Pay versus Performance Table
| (4) Reflects cumulative total shareholder return if $100 was invested as of December 31, 2019. Reflects the total shareholder return of the Russell Midcap Growth Index, as of December 31, 2023, 2022, 2021 and 2020, respectively, weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. The constituent companies of the Russell Midcap Growth Index are attached to this Proxy Statement on Appendix A . The Russell Midcap Growth Index is the index used by the Company for purposes of Item 201(e) of Regulation S-K under the Exchange Act in the Company’s 2023 Annual Report. The Company selected the Russell Midcap Growth Index as a comparable as there is a lack of public company comparables in our industry, with most of our peers operating as private companies or divisions of larger diversified companies, and there are no widely recognized published industry indices. We determined that an equity index for companies with similar market capitalization and growth objectives would provide for an appropriate peer group, and we believe the Russell Midcap Growth Index provides the best means of comparison to the Company. The Russell Midcap Growth Index is a subset of the Russell 1000 Index and is composed of select companies from the 800 smallest companies of the Russell 1000 Index (Russell Midcap Index) that display higher price-to-book ratios and higher forecasted growth values. Source: Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2024. |
Pay versus Performance Table
| (5) Reflects “Net Income” as reported in the Company’s Consolidated Statement of Income included in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2023, 2022, 2021 and 2020. |
Pay versus Performance Table
| (6) The Company-Selected Measure is Adjusted EBITDA which is further described under “Pay versus Performance: Most Important Measures” below. Adjusted EBITDA is a financial measure not calculated in accordance with GAAP, which is commonly referred to as a “non-GAAP measure.” For fiscal year 2023, Adjusted EBITDA represents EBITDA (which is net income, as determined in accordance with GAAP, before interest expense, income tax expense, depreciation and amortization) adjusted to exclude the impact of stock-based compensation expense, |
Pay versus Performance Table
| 2024 Proxy Statement | | | 53 |
Pay versus Performance Table
| and non-recurring costs, such as impairment losses and value-added tax expense related to prior periods. Please see “Item 7. Management’s Discussion and Analysis of Financial Condition—Non-GAAP Financial Measures and Reconciliation” in our Annual Reports on Form 10-K for 2023, 2022, 2021 and 2020 for additional information on Adjusted EBITDA and a reconciliation of this non-GAAP financial measure to its respective measure determined under GAAP. |
Pay versus Performance Table
To calculate the amounts in the “Compensation Actually Paid to PEO” column in the table above, the following amounts were deducted from or added to (as applicable) our PEO’s “Total” compensation as reported in the Summary Compensation Table for each covered fiscal year:
Pay versus Performance Table
| Year | Summary Compensation Table Total for PEO ($) (1) | Summary Compensation Table Reported Value of Equity Awards for PEO ($) (2)(3) | Fair Value of Equity Awards Granted in the Covered Year ($) (3)(4)(5) | Change in Fair Value of Unvested Equity Awards Granted in Prior Years ($) (5) | Change in Fair Value of Equity Awards from Prior Years that Vested in Covered Year ($) (5) | Compensation Actually Paid to PEO ($) | | 2023 | 4,927,814 | (3,499,984) | 4,237,093 | 2,035,472 | 410,928 | 8,111,323 | | 2022 | 3,258,891 | (2,300,203) | 179,157 | (4,458,298) | 44,068 | (3,276,385) | | 2021 | 4,237,306 | (3,009,591) | 1,736,085 | (3,033,614) | (422) | (70,237) | | 2020 | 2,895,627 | (2,259,271) | 2,342,263 | 1,590,266 | 319,154 | 4,888,039 |
Pay versus Performance Table
| (1) Reflects the total compensation reported for our PEO, Mr. Kramer, in the Summary Compensation Table for each of the years presented. |
Pay versus Performance Table
| (2) Represents the grant date fair value of the equity awards to our PEO as reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each of the years presented. |
Pay versus Performance Table
| (3) Equity values are calculated in accordance with FASB ASC Topic 718. For 2022, 2021 and 2020, the amounts included related to purchased restricted stock awards represent the grant date fair value or measurement date fair value as of the end of the covered fiscal year, as applicable, of all purchased restricted stock awards granted less the 50% purchase price paid by Mr. Kramer for such awards. There were no purchased restricted stock awards granted in 2023. The following amounts were paid in cash on the grant date by Mr. Kramer upon each award of purchased restricted stock and are excluded from the respective columns consistent with the determination of fair value in accordance with FASB ASC Topic 718: |
Pay versus Performance Table
| Year | Purchase Price Paid by PEO ($) | Shares of Restricted Stock (#) | | 2023 | — | — | | 2022 | 1,210,814 | 18,800 | | 2021 | 3,009,591 | 37,700 | | 2020 | 2,259,271 | 26,600 |
Pay versus Performance Table
| (4) Represents the year-end fair value for equity awards to our PEO. No awards vested in the year they were granted. |
Pay versus Performance Table
| (5) Stock option fair values are calculated based on the Black-Scholes option pricing model. The stock option fair values, purchased restricted stock fair values, the PRSU fair values and the RSU fair values are calculated using the stock price as of the applicable measurement date. The change in fair value is calculated using the fair value as of the prior year-end and as of each measurement date in the applicable covered year. The application of the underlying assumptions used in calculating the fair value of the stock option awards did not differ in any material respect from that used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table for the applicable year. |
Pay versus Performance Table
To calculate the amounts in the “Average Compensation Actually Paid to Non-PEO NEOs” column in the table above, the following amounts were deducted from or added to (as applicable) the average of the “Total” compensation of our other NEOs as reporte d in the Summary Compensation Table for each applicable year:
Pay versus Performance Table
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) | Average Summary Compensation Table Reported Value of Equity Awards for Non-PEO NEOs ($) (2)(3) | Average Fair Value of Equity Awards Granted in the Covered Year ($) (3)(4)(5) | Average Change in Fair Value of Unvested Equity Awards Granted in Prior Years ($) (5) | Average Change in Fair Value of Equity Awards from Prior Years that Vested in Covered Year ($) (5) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 1,706,797 | (1,012,473) | 1,225,704 | 701,876 | 174,859 | 2,796,763 | | 2022 | 1,437,903 | (913,202) | 180,437 | (1,242,662) | 18,136 | (519,387) | | 2021 | 1,507,741 | (956,084) | 683,432 | (1,055,642) | (90,506) | 88,941 | | 2020 | 1,052,320 | (664,946) | 841,424 | 418,422 | 225,470 | 1,872,690 |
Pay versus Performance Table
| (1) Reflects the average total compensation reported for our Non-PEO NEOs in the Summary Compensation Table for each of the years presented. |
Pay versus Performance Table
| (2) Represents the average of the grant date fair value of the equity awards to our Non-PEO NEOs as reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each of the years presented. |
Pay versus Performance Table
| (3) Equity values are calculated in accordance with FASB ASC Topic 718. For 2022, 2021 and 2020, the amounts included related to purchased restricted stock awards represent the average grant date fair value or measurement date fair value as of the end of the covered fiscal year, as applicable, of all purchased restricted stock awards granted to our Non-PEO NEOs less the 50% purchase price paid by each for such awards. There were no purchased restricted stock awards granted in 2023. The following amounts were the total paid in cash on the grant |
Pay versus Performance Table
| 54 | | | Bright Horizons |
Pay versus Performance Table
| date by our Non-PEO NEOs upon each award of purchased restricted stock and are excluded from the respective columns consistent with the determination of fair value in accordance with FASB ASC Topic 718: |
Pay versus Performance Table
| Year | Total Purchase Price Paid by Non-PEO NEOs ($) | Total Shares of Restricted Stock (#) | | 2023 | — | — | | 2022 | 981,210 | 15,235 | | 2021 | 2,196,922 | 27,520 | | 2020 | 2,057,126 | 24,220 |
Pay versus Performance Table
| (4) Represents the average year-end fair value for equity awards to our Non-PEO NEOs. No awards vested in the year they were granted. |
Pay versus Performance Table
| (5) Stock option fair values are calculated based on the Black-Scholes option pricing model. The stock option fair values, the purchased restricted stock fair values, the PRSU fair values and the RSU fair values are calculated using the stock price as of the applicable measurement date. The change in fair value is calculated using the fair value as of the prior year-end and as of each measurement date in the applicable covered year. The application of the underlying assumptions used in calculating the fair value of the stock option awards did not differ in any material respect from that used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table for the applicable year. |
Pay versus Performance: Most Important Measures
Pay versus Performance: Most Important Measures The following table identifies the three most important financial performance measures to link the CAP to our PEO and Non-PEO NEOs in 2023, calculated in accordance with applicable SEC regulations, to Company performance. The measures most important in determining pay during 2023 were those most heavily weighted in our annual bonus programs.
Pay versus Performance: Most Important Measures
| Measure | Nature | Explanation | | Adjusted EBITDA (*) | Financial Measure | A non-GAAP financial measure that consists of adjusted earnings before interest, taxes, depreciation and amortization and other non-recurring items reflects the Company’s cash flow generation on a consistent basis and is a strong overall indicator of the Company’s operational performance. | | Adjusted EPS ( *) | Financial Measure | A non-GAAP financial measure that consists of diluted adjusted earnings per common share reflects the Company’s overall operating and financial achievements adjusted for the impact of certain non-cash charges and non-recurring transactions. | | Revenue Growth | Financial Measure | A financial measure that consists of our revenue growth year over year. |
Pay versus Performance: Most Important Measures
| (*) | For fiscal year 2023, Adjusted EBITDA represents EBITDA (which is net income, as determined in accordance with GAAP, before interest expense, income tax expense, depreciation and amortization) adjusted to exclude the impact of stock-based compensation expense, and non-recurring costs, such as impairment losses and value-added tax expense related to prior periods. We calculate Adjusted EPS based on adjusted net income, which represents net income determined in accordance with GAAP, adjusted to exclude the impact of stock-based compensation expense, amortization, and non-recurring costs, such as impairment losses, value-added tax expense related to prior periods and interest on deferred consideration, divided by the diluted weighted average number of our common shares. Please see “Item 7. Management’s Discussion and Analysis of Financial Condition—Non-GAAP Financial Measures and Reconciliation” in our 2023 Annual Report for additional information on Adjusted EBITDA and Adjusted EPS (diluted adjusted earnings per common share) and a reconciliation of these non-GAAP financial measures to their respective measures determined under GAAP. |
Pay versus Performance: Most Important Measures
| 2024 Proxy Statement | | | 57 |

DEF 14A of Bright Horizons Family Solutions Inc.

June 5, 2024

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

Class III Directors with Terms Expiring in 2025

Class III Directors with Terms Expiring in 2025

Class III Directors with Terms Expiring in 2025

Class III Directors with Terms Expiring in 2025

Class III Directors with Terms Expiring in 2025

Class I Directors with Terms Expiring in 2026

Class I Directors with Terms Expiring in 2026

Class I Directors with Terms Expiring in 2026

Class I Directors with Terms Expiring in 2026

Class I Directors with Terms Expiring in 2026

Class I Directors with Terms Expiring in 2026

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee

Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee

Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Procedures for Recommendation of Director Nominees by Shareholders

Overview of Compensation Program

2023 Compensation Impacts

2023 Compensation Impacts

2023 Compensation Impacts

Compensation and Governance Best Practices

Elements of Executive Compensation

Other NEOs 2023 Pay Mix

Other NEOs 2023 Pay Mix

Other NEOs 2023 Pay Mix

Other NEOs 2023 Pay Mix

Other NEOs 2023 Pay Mix

Other NEOs 2023 Pay Mix