DEF 14A of Iron Mountain Inc
Filed Apr 3, 2020 · FY20190001206774-20-001055
Your Vote is Important Regardless of the Number of Shares that You Beneficially Own
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | | Jennifer Allerton | $103,500 | $159,997 | $— | $263,497 | | Ted R. Antenucci | $103,500 | $159,997 | $97,413(3) | $360,910 | | Pamela M. Arway | $117,500 | $159,997 | $10,010(3) | $278,151 | | Clarke H. Bailey | $112,000 | $159,997 | $120,985(3) | $392,982 | | Kent P. Dauten | $125,500 | $159,997 | $— | $285,497 | | Paul F. Deninger | $102,500 | $159,997 | $4,759(3) | $262,497 | | Monte Ford | $119,490 | $159,997 | $— | $279,487 | | Per-Kristian Halvorsen | $102,500 | $159,997 | $70,960(3) | $333,458 | | Robin Matlock | $51,250 | $143,340 | $— | $194,590 | | Wendy J. Murdock | $102,500 | $159,997 | $14,788(3) | $277,285 | | Walter Rakowich | $124,599 | $159,997 | $— | $284,596 | | Alfred J. Verrecchia | $227,000 | $159,997 | $100,034(3) | $487,031 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2)(3) | Option Awards ($)(3)(4) | Non–Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | William L. Meaney(7) President and Chief Executive Officer | 2019 | $1,097,657 | $— | $7,057,856 | $1,237,537 | $1,439,000 | $56,899 | $10,888,949 | | | 2018 | $1,083,077 | $— | $7,001,041 | $1,237,384 | $1,910,700 | $55,070 | $11,287,272 | | | 2017 | $1,000,000 | $— | $5,089,432 | $2,024,791 | $1,806,000 | $48,816 | $9,969,039 | | Stuart Brown(8) Executive Vice President and Chief Financial Officer | 2019 | $550,000 | $— | $1,454,303 | $255,005 | $382,140 | $14,732 | $2,656,180 | | | 2018 | $550,000 | $— | $1,272,907 | $224,978 | $498,960 | $11,602 | $2,558,447 | | | 2017 | $550,000 | $— | $1,040,964 | $239,973 | $516,120 | $21,504 | $2,368,561 | | Ernest Cloutier Executive Vice President and General Manager, Records and Information Management | 2019 | $495,192 | $— | $769,898 | $135,002 | $414,900 | $1,782,123 | $3,597,115 | | | 2018 | $475,000 | $— | $636,437 | $112,487 | $487,730 | $1,081,469 | $2,793,123 | | | 2017 | $475,000 | $— | $650,574 | $149,981 | $465,928 | $644,167 | $2,385,650 | | Patrick Keddy(9)(10) Executive Vice President, Business Development and Transformation | 2019 | $587,420 | $— | $1,026,590 | $180,003 | $456,719 | $115,982 | $2,366,714 | | | 2018 | $587,576 | $— | $1,018,299 | $179,981 | $740,346 | $100,553 | $2,626,755 | | | 2017 | $431,614 | $— | $693,948 | $159,980 | $444,043 | $88,265 | $1,817,850 | | Fidelma Russo(11)(12) Executive Vice President, Chief Technology Officer | 2019 | $537,500 | $— | $727,115 | $127,501 | $335,720 | $11,732 | $1,739,568 | | | 2018 | $485,000 | $— | $793,978 | $104,988 | $393,141 | $11,602 | $1,788,709 | | | 2017 | $391,731 | $— | $1,526,696 | $140,015 | $301,900 | $5,577 | $2,365,919 | | John Tomovcsik Executive Vice President, Chief Operating Officer | 2019 | $470,193 | $— | $727,115 | $127,501 | $323,190 | $47,265 | $1,695,264 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| For a list of 2019 stock and option awards, see the “Grants of Plan Based Awards” table below.(3) | | The amounts reported in the “Option Awards” column reflect the aggregate grant date fair value of stock options granted in the year indicated computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 2 to the Company’s Consolidated Financial Statements included in the Company’s Annual Reports on Form 10-K for the fiscal years ended December 31, 2017, 2018 and 2019. These amounts were not paid out or realized in the year indicated.(4) | | The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect amounts paid to our NEOs under our non-equity incentive compensation plans based on the achievement of selected performance targets earned in the specified year and paid in the following year. Non-equity incentive compensation awards are calculated based on the applicable NEO’s base salary earnings before any deductions or deferrals, such as 401(k) contributions or deferred compensation plan contributions. Details regarding the calculation of these payments are included in the “Compensation Discussion and Analysis” section of this Proxy Statement.(5) | | The amounts reported in the “All Other Compensation” column include 401(k) Plan Company match, income on premiums paid with respect to group term life insurance, parking fees paid and certain expenses associated with hosting the Company's annual business recognition event and related tax gross-ups.(6) | | With respect to Mr. Meaney, the amounts reported in the “All Other Compensation” column include payment for medical insurance in Switzerland. Mr. Meaney’s spouse occasionally accompanied him on business related travel on private aircraft. In 2017, this travel resulted in nominal incremental cost to the Company, and this cost is included in “All Other Compensation” column for 2017 only. There were no incremental costs associated with spousal travel on the company aircraft in 2018 or 2019. The “Swiss Benefits” have been converted to U.S. dollars using the average exchange rate for each year (1 Swiss Franc to $1.0083 for 2019, 1 Swiss Franc to $1.0228 for 2018, and 1 Swiss Franc to $1.0159 for 2017; collectively, “the Swiss Exchange Rates”). |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| With respect to Mr. Cloutier, the amounts reported in the “All Other Compensation” column include costs of his assignment related benefits while in Switzerland and associated estimated tax equalization payments for 2018 and 2019 tax liabilities, all in connection with his appointment as Executive Vice President & GM, International in 2017 and in accordance with the Cloutier Letter (as defined below). As part of Mr. Cloutier’s tax equalization benefits, the Company makes payments to various tax authorities such that Mr. Cloutier’s tax liability is substantially the same as it would have been had he remained in the United States and not received any assignment-related benefits. With respect to Mr. Keddy, the amounts reported in the “All Other Compensation” column include amounts related to his international role which include tax preparation, spousal travel associated with Mr. Keddy’s U.S. based responsibilities and related tax gross-ups, and tax gross-ups related to hotel lodging expense deemed taxable in the United Kingdom, all in accordance with the Keddy Employment Contract (as defined below). The hotel lodging expense is not reported in the “All Other Compensation” because it is directly and integrally related to performing job duties, notwithstanding its taxability within the United Kingdom. The charts below set forth a more detailed breakdown of “All Other Compensation” for 2019. |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | William L. Meaney | Stuart Brown | Fidelma Russo | John Tomovcsik | | 401(k) Match | $5,600 | $5,600 | $5,600 | $5,600 | | Life Insurance | $222 | $222 | $222 | $222 | | Parking | $7,800 | $5,910 | $5,910 | $— | | Company Recognition Event Expenses | $3,453 | $— | $— | $— | | Tax Gross-Up for Company Recognition Event Expenses | $2,718 | $— | $— | $— | | Company-Paid Physical | $— | $3,000 | $— | $— | | Vacation Accrual Cash Out(13) | $— | $— | $— | $41,443 | | Swiss Benefits | $9,882 | $— | $— | $— | | Swiss Medical Insurance | $27,224 | $— | $— | $— | | Total | $56,899 | $14,732 | $11,732 | $47,265 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | Ernest Cloutier | Patrick Keddy | | 401(k) Match | $5,600 | $— | | Pension Allowance | $— | $36,687 | | Life Insurance | $222 | $2,967 | | Company Recognition Event Expenses | $4,906 | $3,453 | | Tax Gross-Up for Company Recognition Event Expenses | $383 | $4,081 | | Tax Gross-Up for Travel Related to International Role (Lodging and Spousal Travel) | $— | $21,832 | | Spousal Travel Related to International Role | $— | $18,706 | | Tax Preparation Related to International Role | $— | $5,721 | | Car Allowance | $— | $12,259 | | Fuel Allowance | $— | $2,554 | | Company-Paid Physical | $— | $3,700 | | Medical | $— | $4,021 | | Vacation Accrual Cash Out(13) | $30,832 | $— | | International Assignment Costs(14) | $1,740,180 | $— | | Total | $1,782,123 | $115,981 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Mr. Meaney’s 2019, 2018 and 2017 salary includes 100,000 Swiss Francs paid in accordance with the Swiss Employment Agreement, converted to U.S. dollars using the Swiss Exchange Rates.(7) | | Mr. Brown served as our Chief Financial Officer through December 31, 2019. See the “Termination and Change in Control Arrangements – Brown Separation Agreement” heading of the Compensation Discussion and Analysis section of this Proxy Statement.(8) | | Mr. Keddy was an executive officer and served as Executive Vice President and General Manager, North America and Western Europe through October 31, 2019. Mr. Keddy continues to serve as Executive Vice President, Business Development and Transformation, as disclosed under the “Employment Agreements” heading of the Compensation and Discussion and Analysis section of this Proxy Statement.(9) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 57 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2019 compensation for Mr. Keddy, except for certain tax planning services denominated in U.S. dollars, was converted to U.S. dollars using the UK Conversion Rate. The corresponding conversion rate for 2018 and 2017 compensation, determined on the same basis, was £1.00 to $1.3354 and £1.00 to $1.2884, respectively.(10) | | Ms. Russo’s 2019 and 2018 salaries include $80,494 and $46,635 in non-qualified deferred compensation contributions, respectively. Ms. Russo made no such contributions in 2017.(11) | | Ms. Russo served as our Chief Technology Officer and an Executive Vice President through December 31, 2019. On March 26, 2020, Ms. Russo informed the Company of her decision to resign, effective May 3, 2020.(12) | | In 2016, the Company changed its U.S. vacation policy by offering discretionary paid time off for certain levels of employees and froze their associated vacation accrual balances. In 2019, the Company offered to pay 50% of the vacation accrual balances under a one-time program for the executive team. Amounts shown reflect payments made under the program, except for Mr. Meaney who elected to have his balance removed without receiving the associated $41,533 payment.(13) | | Includes the following expatriate benefits in connection with Mr. Cloutier’s assignment in Switzerland: $1,107,188 in tax equalization amounts, $174,558 in company-paid housing-related expenses, $125,797 in tax gross-ups paid on Mr. Cloutier’s behalf, net of additional amounts withheld from his other compensation, $100,586 for home leave for Mr. Cloutier and his family, a $84,309 cost of living adjustment, $82,021 in childcare and tuition expenses, $28,097 for medical insurance, $22,066 for car allowance and insurance, $8,050 for tax preparation, and $7,509 for miscellaneous expenses related to his assignments (such as language training, immigration expenses, and other expenses). Values converted to U.S. dollars using the average exchange rate for each year (1 Swiss Franc to $1.0083 and 1 Euro to $1.1196 for fiscal year 2019).(14) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Grants of Plan-Based Awards For 2019 The following table sets forth certain information concerning the grants of plan-based awards to our NEOs during the year ended December 31, 2019. For a description of these awards, see the “Compensation Discussion and Analysis — 2019 Compensation of Named Executive Officers — Long-Term Incentive Compensation” section of this Proxy Statement.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Closing Market Price on the Date of Grant ($) | Grant Date Fair Value of Stock and Option Awards ($) | | Named Executive Officer | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | | William L. Meaney | n/a | $ — | $1,650,000 | $2,814,900 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 127,029 | 285,815 | 69,288 | 345,295 | $35.72 | n/a | $8,295,393 | | Stuart Brown(5) | n/a | $ — | $495,000 | $844,470 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 26,175 | 58,893 | 14,277 | 71,151 | $35.72 | n/a | $1,709,308 | | Ernest Cloutier | n/a | $ — | $450,000 | $767,700 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 13,857 | 31,178 | 7,558 | 37,668 | $35.72 | n/a | $904,900 | | Patrick Keddy | n/a | $ — | $734,275 | $1,252,673 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 18,477 | 41,573 | 10,078 | 50,224 | $35.72 | n/a | $1,206,593 | | Fidelma Russo(6) | n/a | $ — | $385,000 | $656,810 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 13,087 | 29,445 | 7,138 | 35,575 | $35.72 | n/a | $854,616 | | John Tomovcsik | n/a | $ — | $332,500 | $567,245 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | | 2/20/2019 | n/a | n/a | n/a | — | 13,087 | 29,445 | 7,138 | 35,575 | $35.72 | n/a | $854,616 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| The amounts reported in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column, sub-column “Threshold” and sub-column “Maximum,” reflect the minimum and maximum payment level of short-term incentive compensation for each of our NEOs, which is zero and 170.6% of target, respectively. The specific components of our non-equity incentive plans are described under the “2019 Compensation of Named Executive Officers — Short-Term Performance-Based Incentive Compensation” heading in the Compensation Discussion and Analysis section of this Proxy Statement. Non-equity incentive plan awards actually paid by the Company for services rendered in 2019 are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.(1) | | The amounts reported in “Estimated Future Payouts Under Equity Incentive Plan Awards” column, sub-column “Maximum,” reflect that the PUs awarded in 2019 provide the potential to earn up to 225% of target, as described under the “2019 Compensation of Named Executive Officers—Long-Term Incentive Compensation” heading in the Compensation Discussion and Analysis section of this Proxy Statement.(2) | | Each RSU award was granted under the 2014 Plan, and each RSU award vests in three substantially equal annual installments beginning on the first anniversary of the grant date. Each RSU award is settled in shares of Common Stock on each vesting date.(3) | | Each stock option award was granted under the 2014 Plan, and each stock option award vests in three substantially equal annual installments beginning on the first anniversary of the grant date.(4) | | Mr. Brown served as our Chief Financial Officer through December 31, 2019. See the “Termination and Change in Control Arrangements – Brown Separation Agreement” heading of the Compensation Discussion and Analysis section of this Proxy Statement.(5) | | Ms. Russo served as our Chief Technology Officer and an Executive Vice President through December 31, 2019. On March 26, 2020, Ms. Russo informed the Company of her decision to resign, effective May 3, 2020.(6) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 59 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Outstanding Equity Awards at Fiscal Year End for 2019 The following table sets forth certain information with respect to outstanding equity awards held by our NEOs at December 31, 2019. The market value amounts reported in the Stock Awards columns heading were determined using the closing price per share of Common Stock on the NYSE on December 31, 2019 of $31.87.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | Option Awards | | | | Stock Awards | | | | | Named Executive Officer | Number of Securities Underlying Unexercised Options: Exercisable (#)(1) | Number of Securities Underlying Unexercised Options: Unexercisable (#)(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) | | William L. Meaney | 10,002 | — | $29.99 | 1/7/2023 | | | | | | | 273,184 | — | $31.00 | 2/13/2024 | | | | | | | 349,247 | — | $48.54 | 2/19/2025 | | | | | | | 829,506 | — | $36.59 | 2/18/2026 | | | | | | | 307,489 | 154,207(1) | $37.00 | 2/16/2027 | | | | | | | 113,961 | 228,267(2) | $33.72 | 2/15/2028 | | | | | | | — | 345,295(3) | $35.72 | 2/20/2029 | 18,280(4) | $582,584 | | | | | | | | | 48,957(5) | $1,560,260 | | | | | | | | | 69,288(6) | $2,208,209 | | | | | | | | | | | 36,486(7) | $1,162,809 | | | | | | | | | 36,486(8) | $1,162,809 | | | | | | | | | 134,564(9) | $4,288,555 | | | | | | | | | 127,029(10) | $4,048,414 | | Stuart Brown(11) | 21,673 | — | $41.11 | 7/25/2026 | | | | | | | 36,442 | 18,277(1) | $37.00 | 2/16/2027 | | | | | | | 20,720 | 41,503(2) | $33.72 | 2/15/2028 | | | | | | | — | 71,151(3) | $35.72 | 2/20/2029 | 3,250(4) | $103,578 | | | | | | | | | 8,902(5) | $283,707 | | | | | | | | | 14,277(6) | $455,008 | | | | | | | | | | | 8,108(7) | $258,402 | | | | | | | | | 8,108(8) | $258,402 | | | | | | | | | 24,466(9) | $779,731 | | | | | | | | | 26,175(10) | $834,197 | | Ernest Cloutier | 24,965 | — | $38.83 | 2/19/2025 | | | | | | | 22,776 | 11,423(1) | $37.00 | 2/16/2027 | | | | | | | 10,359 | 20,752(2) | $33.72 | 2/15/2028 | | | | | | | — | 37,668(3) | $35.72 | 2/20/2029 | | | | | | | | | | | 2,032(4) | 64,760 | | | | | | | | | 4,451(5) | 141,853 | | | | | | | | | 7,558(6) | 240,873 | | | | | | | | | | | 5,067(7) | $161,485 | | | | | | | | | 5,067(8) | $161,485 | | | | | | | | | 12,233(9) | $389,866 | | | | | | | | | 13,857(10) | $441,623 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | Option Awards | | | | Stock Awards | | | | | Named Executive Officer | Number of Securities Underlying Unexercised Options: Exercisable (#)(1) | Number of Securities Underlying Unexercised Options: Unexercisable (#)(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($) | | Patrick Keddy | 7,133 | — | $38.83 | 2/19/2025 | | | | | | | 22,102 | — | $36.91 | 5/27/2025 | | | | | | | 32,884 | — | $29.27 | 2/18/2026 | | | | | | | 24,295 | 12,184(1) | $37.00 | 2/16/2027 | | | | | | | 16,576 | 33,202(2) | $33.72 | 2/15/2028 | | | | | | | — | 50,224(3) | $35.72 | 2/20/2029 | | | | | | | | | | | 2,167(4) | $69,062 | | | | | | | | | 7,121(5) | $226,946 | | | | | | | | | 10,078(6) | $321,186 | 5,405(7) | $172,257 | | | | | | | | | 5,405(8) | $172,257 | | | | | | | | | 19,572(9) | $623,760 | | | | | | | | | 18,477(10) | $588,862 | | Fidelma Russo(12) | 24,582 | 12,328(13) | $34.01 | 3/13/2027 | | | | | | | 9,669 | 19,368(2) | $33.72 | 2/15/2028 | | | | | | | — | 35,575(3) | $35.72 | 2/20/2029 | | | | | | | | | | | 10,902(14) | $347,447 | | | | | | | | | 8,110(5) | $258,466 | | | | | | | | | 7,138(6) | $227,488 | | | | | | | | | | | 5,145(7) | $163,971 | | | | | | | | | 5,145(8) | $163,971 | | | | | | | | | 11,417(9) | $363,860 | | | | | | | | | 13,087(10) | $417,083 | | John Tomovcsik | 24,965 | — | $38.83 | 2/19/2025 | | | | | | | 46,014 | — | $29.27 | 2/18/2026 | | | | | | | 21,258 | 10,661(1) | $37.00 | 2/16/2027 | | | | | | | 9,669 | 19,368(2) | $33.72 | 2/15/2028 | | | | | | | — | 35,575(3) | $35.72 | 2/20/2029 | | | | | | | | | | | 1,896(4) | $60,426 | | | | | | | | | 4,154(5) | $132,388 | | | | | | | | | 7,138(6) | $227,488 | | | | | | | | | | | 4,729(7) | $150,713 | | | | | | | | | 4,729(8) | $150,713 | | | | | | | | | 11,417(9) | $363,860 | | | | | | | | | 13,087(10) | $417,083 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 61 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Options vested on February 16, 2020.(1) | | Options vest in two substantially equal installments on February 15, 2020 and February 15, 2021.(2) | | Options vest in three substantially equal installments on February 20, 2020, February 20, 2021 and February 20, 2022.(3) | | RSUs vested on February 16, 2020.(4) | | RSUs vest in two substantially equal installments on February 15, 2020 and February 15, 2021.(5) | | RSUs vest in three substantially equal installments on February 20, 2020, February 20, 2021 and February 20, 2022.(6) | | The number of PUs based on storage revenue and ROIC and awarded in 2017 included in the table reflects target performance. After the end of the 2019 fiscal year, the Company’s performance was determined resulting in a payout of 95.6% of target. The actual earned PUs vested in one installment on February 16, 2020.(7) | | The number of TSR-Based PUs awarded in 2017 included in the table reflects target performance. After the end of the 2019 fiscal year, the Company’s performance was determined resulting in a payout of 99.8% of target. The actual earned TSR-Based PUs awarded in 2017 vested in one installment on February 16, 2020.(8) | | The number of PUs based on Revenue, EBITDA & ROIC awarded in 2018 included in the table reflects target performance. The Company’s performance will be determined at the end of 2020. The number of TSR-Based PUs awarded in 2018 included in the table reflects target performance. Final TSR performance will be determined at the end of 2020. Earned PUs, if any, will vest in one installment on February 15, 2021.(9) | | The number of PUs based on Revenue, new product exit rate & ROIC awarded in 2019 included in the table reflects target performance. The Company’s performance will be determined at the end of 2021. The number of TSR-Based PUs awarded in 2019 included in the table reflects target performance. Final TSR performance will be determined at the end of 2021. Earned PUs, if any, will vest in one installment on February 20, 2022.(10) | | Mr. Brown served as our Chief Financial Officer through December 31, 2019. See the “Termination and Change in Control Arrangements – Brown Separation Agreement” heading of the Compensation Discussion and Analysis section of this Proxy Statement.(11) | | Ms. Russo served as our Chief Technology Officer and an Executive Vice President through December 31, 2019. On March 26, 2020, Ms. Russo informed the Company of her decision to resign, effective May 3, 2020.(12) | | Options vested on March 13, 2020.(13) | | RSUs vested on March 13, 2020.(14) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Option Exercises and Stock Vested at Fiscal Year End for 2019
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | Option Awards | | Stock Awards | | | Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | William L. Meaney | N/A | N/A | 119,884 | $4,236,096 | | Stuart Brown | N/A | N/A | 23,202 | $773,236 | | Ernest Cloutier | 67,051 | $578,620 | 17,696 | $625,662 | | Patrick Keddy | N/A | N/A | 20,124 | $711,229 | | Fidelma Russo | N/A | N/A | 14,916 | $525,480 | | John Tomovcsik | N/A | N/A | 17,413 | $615,686 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Includes the payout of accrued cash dividend equivalents.(1) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Non-Qualified Deferred Compensation for 2019 EXECUTIVE DEFERRED COMPENSATION The Company provides certain of its highly compensated employees in the United States, including our NEOs, with the opportunity to defer between 5% and 100% of any 2019 non-equity incentive compensation and/or up to between 5% and 50% of base salary through the Executive Deferred Compensation Plan (the “EDCP”). This benefit is offered to these employees in part because they are limited by the Code and applicable nondiscrimination testing rules in the amount of 401(k) contributions they can make under the Company’s 401(k) Plan. Deferral elections and elections relating to the timing of payments are made prior to the period in which the salary and/or incentive compensation bonuses are earned. The Company does not contribute any matching, profit sharing or other funds to the EDCP for any employee. Participants in the EDCP can elect to invest their deferrals in funds that mirror, as closely as possible, the investment options available under the Company’s 401(k) Plan. The EDCP does not pay any above market rates and is administered by the Compensation Committee. Participants may elect to receive benefits when they separate from service or on a specified date in the future. Benefits are distributed either in a lump sum or in five or 10 annual payments. Participants may choose from an array of investment options that generally mirror the investment options available in the 401(k) plan. While the assets are held in a Rabbi Trust, the responsibility to pay benefits are unfunded and unsecured obligations of the Company. Fidelma Russo is the only NEO who participated in the EDCP during the year ended December 31, 2019.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Named Executive Officer | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions in Last FY ($) | Aggregate Balance at Last FYE ($)(1) | | Fidelma Russo | $80,494 | N/A | $14,137 | N/A | $138,382 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Deferred compensation accounts are deemed invested in mutual funds managed by third party administrators.(1) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Employment Agreements WILLIAM L. MEANEY In connection with his appointment as CEO, the Company entered into an offer letter with Mr. Meaney dated November 30, 2012 (the “CEO Offer Letter”). In addition to standard TDC elements (salary and short and long-term incentives), the CEO Offer Letter includes the following provisions:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | Mr. Meaney’s employment with the Company is on an at-will basis; |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 63 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | The Company agreed to pay Mr. Meaney a portion of his salary in Swiss Francs because Mr. Meaney is a Swiss citizen and, as a result of his responsibilities associated with the significant international focus of the Company, he works a portion of his time in Switzerland; | | ● | The Company agreed to reimburse Mr. Meaney for the cost of his Swiss medical insurance; and | | ● | Mr. Meaney is eligible for the Iron Mountain Companies Severance Plan and Severance Program No. 2 (the “CEO Severance Program”) as described under the “Termination and Change in Control Arrangements” heading below. |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
In December 2013, in order to implement the Swiss Franc salary payments agreed to in the CEO Offer Letter, and due to the customary nature of such agreements in Switzerland, a Swiss subsidiary of the Company entered into an employment agreement with Mr. Meaney (the “Swiss Employment Agreement”). As required by Swiss law, the Company, or one of its Swiss subsidiaries, funds certain benefits on Mr. Meaney’s behalf in connection with his Swiss employment, including an occupational benefit plan and occupational accident insurance. The Company’s contribution levels reflect amounts required by Swiss law and are quantified in the Summary Compensation Table. The Swiss Employment Agreement has no fixed term and is terminable by either party following a one-month notice period (except for certain acts identified by Swiss law). We do not have any agreements with Mr. Meaney or any other executive that provide for excise tax gross-up payments in connection with a change in control. ERNEST CLOUTIER In connection with his appointment as EVP & GM, International, of the Company, effective April 1, 2017, Mr. Cloutier relocated to Switzerland in July 2017 and the Company entered into a letter agreement with Mr. Cloutier, dated March 27, 2017 (the “Cloutier Letter”) confirming the terms of Mr. Cloutier’s international assignment. The Cloutier Letter is not a contract of employment but is intended to summarize the terms and benefits of Mr. Cloutier’s international assignment. Under the terms of Mr. Cloutier’s appointment, as described in the Cloutier Letter, the Company provides the following benefits during his international assignment:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | Relocation support to allow efficient transfer of working location to Switzerland including work permit/visa expenses, moving expenses, home search assistance, cultural/language training and property management of Mr. Cloutier’s home in the United States; | | ● | Allowances while on assignment in Switzerland, including housing related costs, cost of living differential, education and childcare assistance, car allowance and home leave; and | | ● | Tax equalization benefits that provide tax-related payments designed to prevent Mr. Cloutier from paying more individual income tax as a result of his foreign assignment than he would have paid if no such assignment occurred. |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
As detailed in the introduction to this Compensation Discussion and Analysis, Mr. Cloutier’s role changed on November 1, 2019 to Executive Vice President and General Manager, Global Records and Information Management. Unless otherwise extended, Mr. Cloutier’s international assignment is due to end in July 2020. PATRICK KEDDY In connection with his appointment as EVP & GM, North America & Western Europe of the Company in April 2015, the Company entered into an amended and restated employment contract with Mr. Keddy (the “Keddy Employment Contract”) as is customary for executives in England, where Mr. Keddy is based. In addition to base salary and short-term incentive compensation, Mr. Keddy receives a car allowance, a corresponding allowance for fuel costs, a UK pension contribution, or cash payment in lieu thereof, and a UK life insurance benefit. Mr. Keddy is eligible to receive severance benefits under the Severance Program No. 1. Mr. Keddy is also eligible for benefits to accommodate his dual working location between the United Kingdom and the United States. The Keddy Employment Contract has no fixed term and is terminable by either party with appropriate notice. The Keddy Employment Contract superseded and replaced Mr. Keddy’s prior employment contract with the Company, which terminated automatically upon the effectiveness of the Keddy Employment Contract. Subsequent to the announcement on October 31, 2019 of Mr. Keddy’s planned retirement in 2021, his role changed to Executive Vice President, Business Development and Transformation. The Keddy Employment Contract will continue in effect until the effective date of his planned retirement.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 64 | |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Termination and Change in Control Arrangements The Company maintains various contracts and agreements that require payments to each NEO in connection with (1) any termination of such NEO, (2) a change in control of the Company, or (3) a change in such NEO’s responsibilities. This section describes the benefits that may become payable to our NEOs in connection with a termination of their employment with the Company and/or a change in control of the Company under arrangements in effect on December 31, 2019. EQUITY TREATMENT AT RETIREMENT In 2018, the Compensation Committee reviewed and approved changes to the definition of “retirement” and the related treatment of outstanding equity awards under the 2014 Plan. These changes are effective for grants made on or after February 20, 2019. Upon an employee’s retirement on or after attaining age 58, if the sum of (i) the age at retirement plus (ii) years of service at the Company totals at least 70, then such employee will be entitled to continued vesting of any outstanding equity awards. If retirement occurs on or after July 1, equity award recipients are entitled to full vesting of time-vested stock options and time-vested RSUs. These awards will continue vesting on the original vesting schedule, and the options would remain exercisable up to three years after retirement, or the original expiration date, if earlier. The stock option treatment was later amended for awards granted after January 1, 2020 to remain exercisable up to the original term of the stock option award. PUs will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. Participants must remain employed through July 1 of each grant year for the grant made in that year to be eligible for the retirement provisions described above. Prior to February 20, 2019, PU awards made to executives, including our NEOs, and other employees who subsequently terminate their employment (i) during the applicable performance period, (ii) after attaining age 55 and (iii) after completing ten years of employment with the Company, are eligible for pro-rated vesting based on the number of full years completed following the grant date, although the shares underlying the PU award will, nevertheless, be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. EQUITY TREATMENT IN CONNECTION WITH TERMINATION OR A CHANGE OF CONTROL All unvested stock options and other equity awards granted under the 2002 Plan or the 2014 Plan vest immediately should an employee terminate his or her own employment for “good reason” or be terminated by the Company, in connection with a “vesting change in control,” as such terms are defined in the 2002 Plan and 2014 Plan, within 14 days prior or 12 months after such vesting change of control. This provision applies to all outstanding options and unvested RSUs or PUs held by employees of the Company, including our NEOs. CEO SEVERANCE PROGRAM As provided for in the CEO Offer Letter, Mr. Meaney is a participant in the CEO Severance Program No. 2. Mr. Meaney is entitled to the benefits under the CEO Severance Program No. 2 in the event of a “qualifying termination,” which is generally defined as the termination of an eligible employee’s employment without “cause” or termination by the eligible employee for “good reason.” “Cause” is generally defined in the CEO Severance Program No. 2 as any of: (1) fraud, embezzlement or theft against the Company; (2) being convicted of, or pleading guilty or no contest to, a felony; (3) breach of a fiduciary duty owed to the Company; (4) material breach of any material policy of the Company; (5) willful failure to perform material assigned duties (other than by reason of illness); or (6) committing an act of gross negligence, engaging in willful misconduct or otherwise acting with willful disregard for the best interests of the Company. “Good reason” in the CEO Severance Program means that the Company has, without Mr. Meaney’s consent: (1) materially diminished the sum of his base compensation plus target nonequity incentive compensation; (2) required Mr. Meaney to be based at an office or primary work location that is greater than 50 miles from Boston, Massachusetts; (3) materially diminished Mr. Meaney’s authority
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 65 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
and/or responsibilities and/or assigned Mr. Meaney to duties and responsibilities that are generally inconsistent with his position with Iron Mountain prior to the change; (4) ceased to have Mr. Meaney report directly to the Board; or (5) materially breached the CEO Severance Program No. 2 or the CEO Offer Letter. In the event of a qualifying termination under the CEO Severance Program No. 2, Mr. Meaney is entitled to certain severance benefits, including: (1) cash compensation consisting of (a) the sum of one year’s base salary, (b) a bonus payment equal to the annual target performance-based cash bonus for the year of termination, and (c) a pro-rated bonus in the year of termination; (2) one year of group health benefit continuation, and (3) 12 months outplacement. Mr. Meaney does not receive equity acceleration benefits under the CEO Severance Program No. 2. In accordance with the CEO Severance Program No. 2, if Mr. Meaney’s termination is in connection with a change in control, he will be eligible for two years’ base salary and target bonus (rather than one year) and 18 months of group health benefit continuation (rather than 12 months), and the other benefits he would otherwise be entitled to remain unchanged. The CEO Severance Program No. 2 also modifies the determination of a Vesting Change in Control where termination following a Change in Control is directed by a third party, within 90 days prior to the Change in Control (rather than 14 days) or within two years following the Change in Control (rather than 12 months). NEO SEVERANCE PROGRAM Messrs. Brown, Cloutier, Keddy and Tomovcsik and Ms. Russo are entitled to the benefits under the Severance Program No. 1 in the event of a “qualifying termination,” which is generally defined as the termination of an eligible employee’s employment without “cause” or termination by the eligible employee for “good reason.” The definition of “cause” for the purposes of the Severance Program No. 1 is substantially the same as the definition of “cause” in the CEO Severance Program No. 2, as described above. The definition of “good reason” in the Severance Program No. 1 is substantially the same as “good reason” under the 2002 Plan and the 2014 Plan with an additional component that could result in an acceleration if the eligible employee were to terminate his or her employment within 14 days prior to or 12 months after a vesting change of control. The additional component is a material diminution in the responsibilities or title or position with the Company and/or the assignment of duties and responsibilities that are generally inconsistent with such eligible employee’s position with the Company immediately prior to the vesting change in control. In the event of a qualifying termination under the Severance Program No. 1, the eligible employee is entitled to certain severance benefits paid in equal installments over the Severance Period, including: (1) cash compensation consisting of one year’s base salary and a bonus payment generally equal to the annual target bonus for the eligible employee for the year of termination multiplied by such employee’s average payout percentage over the prior three years; (2) the Company’s payment of (a) the employer share of the cost of medical and dental coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) coverage until the earlier of (i) the first anniversary of such employee’s termination and (ii) the date on which COBRA coverage ends and (b) outplacement services for 12 months following termination; (3) accelerated vesting of outstanding RSUs and stock options scheduled to vest within 12 months following termination; and (4) pro-rated vesting of outstanding PUs based on actual performance using the following schedule and payable at the original vesting date, if earned as calculated at the end of the performance period:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | PUs outstanding for less than 12 months—33% vested | | ● | PUs outstanding between 12 and 24 months—67% vested | | ● | PUs outstanding 24 months or longer—100% |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
GENERAL It is a condition to receipt of severance benefits under each of (1) the CEO Severance Program No. 2 and (2) the Severance Program No. 1 that the employee receiving severance benefits under such program or agreement execute, deliver and not revoke a separation and release agreement and a confidentiality and non-competition agreement. The receipt of the employer share of the cost of medical and dental coverage under COBRA is conditioned on the employee not being in breach of either of the separation and release agreement or the confidentiality and non-competition agreement.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
BROWN SEPARATION AGREEMENT On November 22, 2019, the Company and Stuart Brown agreed on the terms of Mr. Brown’s departure and entered into a separation agreement on November 26, 2019 (the “Brown Separation Agreement”), pursuant to which Mr. Brown continued to serve as the Company’s principal financial officer until December 31, 2019 and remained with the Company for transition purposes through February 20, 2020 (the “Termination Date”). The Brown Separation Agreement provided that Mr. Brown, in connection with his departure, was entitled to the following benefits under the Severance Program No.1:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | One year of salary continuation in the amount of $550,000 following the Termination Date; | | ● | Earned bonus in 2019 in the amount of $382,140; | | ● | The target bonus at termination (90% of base salary, or $495,000) multiplied by the average payout for the last three years (96.1%), which equals $475,860; | | ● | Acceleration of 9,217 RSUs, plus accrued dividends, representing RSUs that were scheduled to vest within 12 months of Mr. Brown’s separation. The RSUs were valued on the vesting date, February 20, 2020, at $349,596, including accrued dividends in the amount of $33,177; | | ● | Acceleration of 44,500 stock options, representing the stock options that were schedule to vest within 12 months of Mr. Brown’s separation. The stock options were valued on the vesting date, February 20, 2020, at $12,678. Mr. Brown will have 60 days to exercise such outstanding options before they forfeit; | | ● | Outstanding PUs pro-rated based on the Termination Date and payable at the original vesting date, if earned as calculated at the end of the performance period; and | | ● | Twelve months of COBRA ($20,394) and outplacement benefits ($40,000). |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
The above payments were calculated as of the Termination Date and therefore they do not match information provided in the following termination tables which are calculated as of December 31, 2019. Estimated Benefits Upon A Qualifying Termination Under the Applicable Severance Program The table below reflects the amount of compensation that would be paid to each NEO in the event of a qualifying termination under the CEO Severance Program No. 2 (in the case of Mr. Meaney) or the Severance Program No. 1 (in the case of the other NEOs). The amounts shown assume that such termination was effective as of December 31, 2019.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Named Executive Officer | Cash Severance ($) | Continuation of Benefits and Outplacement Services ($) | Acceleration of Unvested Options, RSUs and PUs ($)(1) | Total ($) | | William L. Meaney | $4,400,000 | $61,496 | N/A | $4,461,496 | | Stuart Brown(2) | $1,063,480 | $60,394 | $1,937,079 | $3,060,953 | | Ernest Cloutier | $1,036,092 | $68,097 | $1,073,505 | $2,177,694 | | Patrick Keddy(3) | $1,400,984 | $44,021 | $1,408,013 | $2,853,018 | | Fidelma Russo(4) | $985,435 | $63,420 | $1,452,100 | $2,500,955 | | John Tomovcsik | $854,493 | $63,420 | $1,004,521 | $1,922,434 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| These amounts are based on a price per share of our Common Stock of $31.87, the closing price per share of Common Stock on the NYSE on December 31, 2019, and reflect the value of earned PUs for the PUs which were granted in 2017 and the value of PUs that would be earned if the Company achieved target performance for PUs granted after 2017.(1) | | Mr. Brown served as our Chief Financial Officer through December 31, 2019. See the “Termination and Change in Control Arrangements – Brown Separation Agreement” heading of the Compensation Discussion and Analysis section of this Proxy Statement.(2) | | Mr. Keddy’s estimated benefits, except for elements denominated in U.S. dollars, were converted to U.S. dollars using the UK Conversion Rate.(3) | | Ms. Russo served as our Chief Technology Officer and an Executive Vice President through December 31, 2019. On March 26, 2020, Ms. Russo informed the Company of her decision to resign, effective May 3, 2020.(4) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| 2020 PROXY STATEMENT | 67 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Estimated Benefits Upon A Qualifying Termination Under the Applicable Severance Program in Connection with a Change in Control The table below reflects the amount of compensation that would be paid to each NEO in the event of termination of employment upon a qualifying termination under the CEO Severance Program No. 2 (in the case of Mr. Meaney) or the Severance Program No. 1 (in the case of Ms. Russo and Messrs. Brown, Cloutier, Keddy and Tomovcsik). The amounts shown assume that such termination was effective as of December 31, 2019.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Named Executive Officer | Cash Severance ($) | Continuation of Benefits and Outplacement Services ($) | Acceleration of Unvested Options, RSUs and PUs ($)(1) | Total ($) | | William L. Meaney | $7,150,000 | $72,244 | $16,669,167 | $23,891,411 | | Stuart Brown(2) | $1,063,480 | $60,394 | $3,298,645 | $4,422,519 | | Ernest Cloutier | $1,036,092 | $68,097 | $1,780,813 | $2,885,002 | | Patrick Keddy(3) | $1,400,984 | $44,021 | $2,411,767 | $3,856,772 | | Fidelma Russo(4) | $985,435 | $63,420 | $2,188,941 | $3,237,796 | | John Tomovcsik | $854,493 | $63,420 | $1,670,017 | $2,587,930 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| These amounts are based on a price per share of our Common Stock of $31.87, the closing price per share of Common Stock on the NYSE on December 31, 2019, and reflect the value of earned PUs for the PUs which were granted in 2017 and the value of PUs that would be earned if the Company achieved target performance for PUs granted after 2017.(1) | | Mr. Brown served as our Chief Financial Officer through December 31, 2019. See the “Termination and Change in Control Arrangements – Brown Separation Agreement” heading of the Compensation Discussion and Analysis section of this Proxy Statement.(2) | | Mr. Keddy’s estimated benefits, except for elements denominated in U.S. dollars, were converted to U.S. dollars using the UK Conversion Rate.(3) | | Ms. Russo served as our Chief Technology Officer and an Executive Vice President through December 31, 2019. On March 26, 2020, Ms. Russo informed the Company of her decision to resign, effective May 3, 2020.(4) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
MEDIAN EMPLOYEE TO CEO PAY RATIO As required by Item 402(u) of Regulation S-K, we are providing the following information about the ratio of compensation provided to Mr. Meaney, our President and CEO, to the annual total compensation of the Company’s median employee. The Company identified the median employee as of October 1, 2017 and there have been no material changes in the Company’s employee population or employee compensation arrangements that the Company reasonably believes would result in a significant change to our pay ratio disclosure; therefore, we used the median employee identified as of October 1, 2017 to complete the 2019 calculation. Project Summit commenced in the fourth quarter of 2019, and the Company did not view the resulting changes to the employee population as material as of December 31, 2019. For the year ended December 31, 2019:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| ● | The median employee’s annual total compensation was $39,267; | | ● | The annual total compensation of our CEO was $10,888,949; and | | ● | Based on this information, the ratio of the annual total compensation of our CEO to the median employee is estimated to be 278 to 1. |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify our median employee, we began by considering each individual employed by us worldwide on the determination date, except that we excluded approximately 1,199 employees located outside the United States as permitted by the de minimis exception within the SEC rules. Based on the de minimis exception, we excluded all individuals located in five (5) countries, which constituted approximately 4.80% of the 24,975 total individuals that we employed globally as of October 1, 2017. The excluded countries and the number of our employees in each excluded country are as follows as of October 1, 2017: China (166), India (910), Indonesia (62), Serbia (60) and South Korea (1). For purposes of identifying the median employee from our employee population (other than those we excluded by reason of the de minimis exception), we considered base salary and base wages, as compiled from our payroll and employment records. We selected base salary and base wages to identify the median employee because these components represent the principal form of compensation delivered to all of our employees other than our CEO and this information is readily available across our workforce. Compensation paid in foreign currencies was converted to U.S. dollars based on exchange rates in effect on December 15, 2019. Using the same approach for the calculation as we have since we began calculating this ratio in 2017, we aggregated all of the elements of that employee’s compensation for 2019 in the same way that we calculate the annual total compensation of our NEOs in the Summary Compensation Table, except that the CEO’s and median employee’s annual total compensation includes company-paid healthcare benefit amounts of $14,049 and $3,434, respectively. This amount for the CEO is not included in the Summary Compensation Table because the SEC allows companies to exclude items related to Company-paid healthcare benefits, which are available generally to all salaried employees of the Company. To calculate our ratio, we divided the CEO’s annual total compensation by the median employee’s annual total compensation. We believe this ratio is a reasonable estimate calculated in a manner consistent with SEC rules. ADDITIONAL INFORMATION Compensation Committee Interlocks and Insider Participation No member of the Compensation Committee was, during 2019, an officer or employee of the Company or was formerly an officer of the Company or had any relationship requiring disclosure by us under Item 404 of Regulation S-K of the Exchange Act. Please refer to “Certain Relationships and Related Party Transactions,” above, for additional information. None of our Executive Officers (as defined below) served as a member of the compensation committee (or its equivalent) of another entity or as a director of another entity, one of whose executive officers served on our Compensation Committee. None of our Executive Officers served as a member of the compensation committee (or its equivalent) of another entity, one of whose executive officers served as one of our directors.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
AUDIT MATTERS
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| PROPOSAL 3 | | RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | | | | The Board recommends that you vote FOR the ratification of the appointment of Deloitte & Touche LLP. |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
Subject to ratification by the stockholders, the Audit Committee has appointed the firm of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2020. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent auditors for the purpose of preparing or issuing audit reports or performing other audit reviews or attest services. Our independent auditors report directly to the Audit Committee, and the Audit Committee has executive sessions with the independent auditors at each regularly scheduled Audit Committee meeting. The Audit Committee evaluates the performance of the Company’s independent auditors each year and determines whether to reengage the current independent auditors or consider other audit firms. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the auditors and the auditors’ technical expertise and knowledge of the Company’s operations and industry. In accordance with the Audit Committee charter, the Audit Committee also evaluates the independence of the independent auditors and discusses with the auditor its independence from the Company and its management. The Audit Committee also oversees compliance with the mandated five-year rotation of the independent auditors’ lead engagement partner and reviews and evaluates the lead audit partner, and the chair of the Audit Committee is directly involved in the selection of any new lead engagement partner. Based on this evaluation, the Audit Committee has appointed Deloitte & Touche LLP to serve as independent registered auditors for the year ending December 31, 2020. Deloitte & Touche LLP has served as the Company’s independent auditors since 2003 and is considered by management and the Audit Committee to be well qualified. Further, the Audit Committee and the Board believe that the continued retention of Deloitte & Touche LLP to serve as the independent registered public accounting firm is in the best interests of the Company and its stockholders. The Audit Committee has determined to submit its appointment of the independent auditors to the Company’s stockholders for ratification. This vote will ratify prior action by the Audit Committee and will not be binding upon the Audit Committee. However, the Audit Committee may reconsider its prior appointment of the independent auditors or consider the results of this vote when it determines to appoint the Company’s independent auditors in the future. The Audit Committee oversees and is ultimately responsible for the outcome of audit fee negotiations associated with the Company’s retention of its independent auditors. The fees we paid to Deloitte & Touche LLP in 2019 are shown in the table appearing on page 72 of this Proxy Statement. Representatives of Deloitte & Touche LLP are expected to be present at the virtual Annual Meeting. They will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. If the stockholders do not ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, the appointment of accountants will be reconsidered by the Audit Committee. The affirmative vote of holders of a majority of the votes properly cast at the Annual Meeting is required to ratify the selection of Deloitte & Touche LLP to serve as the Company’s independent registered public accounting firm for the current fiscal year. For purposes of determining the number of votes cast, only those cast “For” or “Against” are included. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Company has submitted the appointment of the Company’s independent registered public accounting firm to a stockholder vote, as set forth in Proposal 3 of this Proxy Statement. The Audit Committee has established policies and procedures that are intended to control the services provided by our independent registered public accounting firm and to monitor its continuing independence. Under these policies, no audit or non-audit services may be undertaken by our independent registered public accounting firm unless the engagement is specifically pre-approved by the Audit Committee. The Audit Committee may delegate to one or more members the authority to grant the pre-approvals required by its policies and procedures. The decisions of any member to whom authority is delegated to pre-approve an activity under this paragraph must be presented to the full Audit Committee at each of its scheduled meetings. The fees for services provided by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”) to us for the fiscal years ended December 31, 2018 and December 31, 2019 were as follows:
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| | FY 2018 | FY 2019 | | Audit Fees(1) | $6,297,000 | $$5,530,000 | | Audit-Related Fees(2) | 354,000 | 0 | | Tax Fees(3) | 1,488,000 | 1,291,000 | | Deloitte & Touche LLP Total Fees | $$8,139,000 | $$6,821,000 |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
| Audit Fees consist of fees billed for professional services rendered by the independent registered public accounting firm for the audit of the Company’s annual consolidated financial statements, audit of the internal controls over financial reporting, and reviews of the consolidated financial statements included the Company’s Quarterly Reports on Form 10-Q. Audit Fees also consist of services that are normally provided by the independent registered public accounting firm in connection with statutory audits and regulatory filings, review of documents filed with the SEC, and providing consents in connection with SEC filings and comfort letters in connection with offerings of registered and unregistered securities.(1) | | Audit-Related Fees for 2018 include audit fees related to our acquisition of IO Data Centers.(2) | | Tax Fees include tax compliance work, consulting and other tax planning matters.(3) |
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
The Audit Committee will not approve engagements of our independent registered public accounting firm to perform non-audit services for us if doing so will cause our independent registered public accounting firm to cease to be independent within the meaning of applicable SEC or NYSE rules. In other circumstances, the Audit Committee considers, among other things, whether our independent registered public accounting firm is able to provide the required services in a more or less effective and efficient manner than other available service providers. The total fees billed to us from Deloitte for services in 2018 and 2019 are set forth above. All the services provided by Deloitte described above were pre-approved by our Audit Committee. The Audit Committee approved the engagement of Deloitte to provide non-audit services because they determined that Deloitte’s providing these services would not compromise its independence and that its familiarity with our record keeping and accounting systems would permit it to provide these services with equal or higher quality, quicker and at a lower cost than we could obtain these services from other providers.
Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
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Pamela M. Arway, Chair Paul Deninger Monte Ford Per Kristian Halvorsen Robin Matlock Wendy J. Murdock Doyle Simmons
AUDIT COMMITTEE REPORT Management is responsible for the Company’s financial reporting process, including its system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’s independent registered public accounting firm is responsible for auditing those financial statements. The Audit Committee’s responsibility is to monitor and review these processes. The Audit Committee has reviewed and discussed with the independent registered public accounting firm and management the plan and results of the auditing engagement and the audited financial statements for the year ended December 31, 2019. The Audit Committee has reviewed with management the scope and nature of the Company’s internal controls and has discussed with the independent registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301, Communications With Audit Committees. In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and discussed with the independent registered public accounting firm its independence from the Company and its management. The Audit Committee considered whether the provision of non-audit services by the independent registered public accounting firm is compatible with maintaining the independent registered public accounting firm’s independence and concluded that it was acceptable at this time. The Audit Committee has reported to the Board its activities, conclusions and recommendations. Specifically, in reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 13, 2020. The Audit Committee has approved the reappointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020.