DEF 14A of Western Union CO
Filed Apr 2, 2024 · FY20230001206774-24-000329
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
| Executive Compensation | 51 | | 2023 Summary Compensation Table | 51 | | 2023 All Other Compensation Table | 52 | | 2023 Grants of Plan-Based Awards Table | 53 | | 2023 Outstanding Equity Awards at Fiscal Year-End Table | 55 | | 2023 Option Exercises and Stock Vested Table | 57 | | 2023 Nonqualified Deferred Compensation Table | 57 | | Potential Payments upon Termination or Change-In-Control | 58 | | Payments upon Termination or Change-in-Control Tables | 61 | | Risk Management and Compensation | 63 | | CEO Pay Ratio | 64 | | Pay Versus Performance | 65 | | Proposal 2—Advisory Vote to Approve Executive Compensation | 70 | | Proposal 3—Ratification of Selection of Auditors | 72 | | Proposal 4—Approval of The Western Union Company 2024 Long-Term Incentive Plan | 73 | | Equity Compensation Plan Information | 80 | | Stock Beneficially Owned by Directors, Executive Officers and Our Largest Stockholders | 81 | | Certain Transactions and Other Matters | 83 | | Annex A | A-1 | | Reconciliation of Non-GAAP Measures | A-1 | | Annex B | B-1 | | The Western Union Company 2024 Long-Term Incentive Plan | B-1 |
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
| Julie M. Cameron-Doe Independent | | Martin I. Cole Independent | | Suzette M. Deering Independent | | | | Age 54 Director Since 2023 | | Age 67 Director Since 2015 | | Age 54 Director Since 2023 | | Committee(s) • Audit Committee • Compliance Committee | | Committee(s) • Compensation and Benefits Committee • Corporate Governance, ESG, and Public Policy Committee | | Committee(s) • Compensation and Benefits Committee • Compliance Committee | | | Betsy D. Holden Independent | | Jeffrey A. Joerres Independent | | Devin B. McGranahan | | | | Age 68 Director Since 2006 | | Age 64 Director Since 2015 Chair of the Board | | Age 55 Director Since 2021 | | Committee(s) • Compensation and Benefits Committee • Corporate Governance, ESG, and Public Policy Committee Chair | | Committee(s) • None | | Committee(s) • None | | | Michael A. Miles, Jr. Independent | | Timothy P. Murphy Independent | | Jan Siegmund Independent | | | | Age 62 Director Since 2006 | | Age 62 Director Since 2020 | | Age 59 Director Since 2019 | | Committee(s) • Compensation and Benefits Committee Chair • Corporate Governance, ESG, and Public Policy Committee | | Committee(s) • Audit Committee • Compliance Committee Chair | | Committee(s) • Audit Committee Chair • Compliance Committee | | | Angela A. Sun Independent | | Solomon D. Trujillo Independent | | | | | | Age 49 Director Since 2018 | | Age 72 Director Since 2012 | | | | Committee(s) • Audit Committee • Compensation and Benefits Committee | | Committee(s) • Audit Committee • Compliance Committee | | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| CEO Experience Regulated Industry/ Government Financial Literacy Emerging Markets Global Operational Experience | MARTIN I. COLE | | | | | | Former Chair of the Board and Interim CEO of Cloudera, Inc. | | | | | | Age | 67 | Committee(s) | Compensation and Benefits Committee, Corporate Governance, ESG, and Public Policy Committee | | | Director Since | 2015 | Term Expires | 2024 | | | Other Public Directorship | Western Digital Corporation | | | | | PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS Mr. Cole served as Chair of the Board of Magnitude Software Inc., a provider of enterprise application data integration and analytics solutions to businesses from 2020 to 2021 and served as its Interim Chief Executive Officer in 2020. Previously, Mr. Cole served as the Chair of the Board of Directors and Interim Chief Executive Officer of Cloudera, Inc., an enterprise data cloud company from 2019 to 2020, and served as a director of Cloudera, Inc. from 2014 to 2020. Prior to that, Mr. Cole served as Chief Executive of the Technology Group at Accenture plc (“Accenture”), a professional services company, from 2012 until his retirement from Accenture in 2014. During his career at Accenture, Mr. Cole also served as the Chief Executive of the Communications, Media & Technology Operating Group from 2006 to 2012, Chief Executive of the Government Operating Group from 2004 to 2006, Managing Partner of the Outsourcing and Infrastructure Delivery Group from 2002 to 2004 and Partner in the Outsourcing and Government Practices Group from 1989 to 2002. Mr. Cole joined Accenture in 1980. Mr. Cole has served as a director of Western Digital Corporation since 2014. | | | | | | EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANY’S BOARD Mr. Cole brings to the Board experience as a former chief executive and chair of the board of directors of an enterprise data cloud company and a provider of enterprise application data integration and analytics solutions, and as a former executive officer of a multinational management consulting, technology services, and outsourcing company, leading various practice groups, including: outsourcing and infrastructure; communications, media, and technology; and government services and technology. Mr. Cole also brings to the Board his experience as a member of the board of directors of a large multinational manufacturer of computer storage products and solutions and a software company. | | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| Financial Literacy Global Operational Experience | MICHAEL A. MILES, JR. | | | | | | Advisory Director, Berkshire Partners and Former President and Chief Operating Officer, Staples, Inc. | | | | | | Age | 62 | Committee(s) | Compensation and Benefits Committee Chair, Corporate Governance, ESG, and Public Policy Committee | | | Director Since | 2006 | Term Expires | 2024 | | | Other Public Directorships | Portillo’s Inc. | | | | | PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS Since 2013, Mr. Miles has served as an Advisory Director for Berkshire Partners, a private equity firm. Previously, he was President and Chief Operating Officer of Staples, Inc., an office products provider, from 2006 until 2013, and Chief Operating Officer from 2003 to 2006. Prior to that, Mr. Miles was Chief Operating Officer, Pizza Hut for Yum! Brands, Inc. from 2000 to 2003. From 1996 to 1999, he served Pizza Hut as Senior Vice President of Concept Development & Franchise. Mr. Miles also serves as Chair of the Board of Portillo’s Inc. | | | | | | EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANY’S BOARD Mr. Miles has experience as an executive of an international consumer goods retailer with large acquisitions outside of the United States and franchise distribution networks, which are similar to the Company’s agent network. Mr. Miles also brings U.S. and global operational expertise to the Board discussions. | | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| CEO Experience CFO Experience Financial Literacy Regulated Industry/ Government | TIMOTHY P. MURPHY | | | | | | Former President and Chief Executive Officer of Consortium Networks | | | | | | Age | 62 | Committee(s) | Compliance Committee Chair, Audit Committee | | | Director Since | 2020 | Term Expires | 2024 | | | Other Public Directorships | None | | | | | PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS Mr. Murphy served as President and Chief Executive Officer of Consortium Networks, a cybersecurity and networking company, from 2019 through 2023. Previously, he served as President of Thomson Reuters Special Services, a wholly-owned subsidiary of Thomson Reuters (“TRSS”), from 2015 to 2019. TRSS provides management consulting services to help customers with intelligence collection and analysis, network analysis, insider threat, and global risk management solutions. Mr. Murphy currently serves as Chair of the Board of Directors for TRSS and served on the Board of Directors of Genius Group Limited from 2022 to 2023. From 1988 to 2011, Mr. Murphy served in the United States Federal Bureau of Investigation (the “FBI”), where he held various positions of increasing responsibility until retiring from the FBI in 2011 as Deputy Director. | | | | | | EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANY’S BOARD Mr. Murphy has substantial global law enforcement, cybersecurity, intelligence, counterterrorism, and business and operational experience gained through his time as chief financial officer and chief operating officer at the FBI and as president and chief executive officer of a cybersecurity and networking company. Mr. Murphy also brings experience in intelligence collection and analysis, network analysis, and insider threat and global risk management gained during his tenure with TRSS. | | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| CFO Experience Financial Literacy Eligible for Audit Committee Financial Expert Global Operational Experience | JAN SIEGMUND | | | | | | Former Chief Financial Officer of Cognizant Technology Solutions Corporation | | | | | | Age | 59 | Committee(s) | Audit Committee Chair, Compliance Committee | | | Director Since | 2019 | Term Expires | 2024 | | | Other Public Directorships | None | | | | | PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS Mr. Siegmund served as Chief Financial Officer of Cognizant Technology Solutions Corporation, a professional services company, from 2020 through 2023. Prior to that, Mr. Siegmund served as Corporate Vice President and Chief Financial Officer of Automatic Data Processing, Inc. (“ADP”), a global provider of cloud-based human capital management solutions, from 2012 to 2019. Prior to his appointment as Chief Financial Officer in 2012, he served as President, Added Value Services and Chief Strategy Officer of ADP from 2009 to 2012. Prior to that time, Mr. Siegmund held various positions of increasing responsibility with ADP. Mr. Siegmund joined ADP in 1999. | | | | | | EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANY’S BOARD Mr. Siegmund brings to the Board experience as a former chief financial officer of a professional services provider and former chief financial officer and chief strategy officer of a global provider of cloud-based human capital management solutions. | | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
| Financial Literacy Regulated Industry/ Government Emerging Markets Global Operational Experience | ANGELA A. SUN | | | | | | Former Chief Operations Officer & Partner, Alpha Edison | | | | | | Age | 49 | Committee(s) | Audit Committee, Compensation and Benefits Committee | | | Director Since | 2018 | Term Expires | 2024 | | | Other Public Directorships | Cushman & Wakefield plc | | | | | PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, AND DIRECTORSHIPS Ms. Sun is an investor in early stage companies. Previously, she served as Chief Operations Officer and Partner of Alpha Edison, a venture capital firm, from 2019 to 2021. Prior to that, Ms. Sun served as Global Head of Strategy and Corporate Development for Bloomberg L.P, a privately held financial software, data, and media company, from 2014 to 2017, where she led new business development, and acquisitions and commercial partnerships across the company’s media, financial products, enterprise and data businesses. From 2008 to 2014, Ms. Sun served as Chief-of-Staff to Bloomberg’s former CEO. Prior to joining Bloomberg, L.P., Ms. Sun served as a Senior Policy Advisor in the Bloomberg Administration where she oversaw a citywide portfolio of economic development agencies and led urban planning and real estate development projects. From 2001 to 2005, Ms. Sun served as a management consultant at McKinsey & Company, where she focused on the Financial Services and Healthcare sectors. Prior to McKinsey, from 1996 to 1998, Ms. Sun was an investment banker at J.P. Morgan and in 2001 was a Visiting Associate at the Henry L. Stimson Center, a non-partisan international security and defense analysis think tank in Washington, D.C. Ms. Sun currently serves on the board of Cushman & Wakefield plc and served on the board of Apollo Strategic Growth Capital II from 2021 to 2023. | | | | | | EXPERIENCE, QUALIFICATIONS, ATTRIBUTES, AND SKILLS SUPPORTING DIRECTORSHIP POSITION ON THE COMPANY’S BOARD Ms. Sun brings to the Board substantial operations management experience and valuable insight into the technology industry. Ms. Sun also has extensive strategic, operational, and government experience from her time in the Bloomberg Administration and at Bloomberg L.P. Ms. Sun also gained financial services experience at McKinsey & Company and J.P. Morgan. | | | |
PROPOSAL 1 ELECTION OF DIRECTORS
PROPOSAL 1 ELECTION OF DIRECTORS At the 2024 Annual Meeting, all director nominees will be elected for one-year terms. The terms of each director if elected or re-elected, as the case may be, will expire at the 2025 Annual Meeting of Stockholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal. See the “Board of Directors Information” section of this Proxy Statement for information concerning all nominees. The Board currently consists of eleven directors. The Company’s By-Laws require that directors be elected by the majority of votes cast with respect to such director in uncontested elections (the number of shares voted “for” a director must exceed the number of votes cast “against” that director, with abstentions and broker non-votes not counted as cast either “for” or “against”). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. Under the Company’s By-Laws, if an incumbent director does not receive the majority of votes cast, the director will promptly tender his or her resignation to the Board of Directors. The Corporate Governance, ESG, and Public Policy Committee, or such other committee as may be designated by the Board of Directors, will make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors will act on the resignation, taking into account the Corporate Governance, ESG, and Public Policy Committee’s recommendation, and publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days following certification of the election results. If such incumbent director’s resignation is not accepted by the Board of Directors, such director will continue to serve until the next annual meeting and until his or her successor is duly elected or his or her earlier resignation or removal. In the case of a vacancy, the Board of Directors may appoint a new director as a replacement, may leave the vacancy unfilled or may reduce the number of directors on the Board. Your shares will be voted as you instruct via the voting procedures described on the Proxy Card or the Notice of Internet Availability of Proxy Materials, or as you specify on your Proxy Card(s) if you elect to vote by mail. If unforeseen circumstances (such as death or disability) require the Board of Directors to substitute another person for any of the director nominees, your shares will be voted for that other person.
PROPOSAL 1 ELECTION OF DIRECTORS
| THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO RE-ELECT MR. COLE, MS. HOLDEN, MR. JOERRES, MR. MCGRANAHAN, MR. MILES, MR. MURPHY, MR. SIEGMUND, MS. SUN, AND MR. TRUJILLO, AND ELECT MS. CAMERON-DOE AND MS. DEERING, EACH TO SERVE UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL HIS OR HER RESPECTIVE SUCCESSOR IS ELECTED AND QUALIFIED. |
CODE OF ETHICS
| 2023 DIRECTOR COMPENSATION | | | | | | | NAME | FEES EARNED OR PAID IN CASH ($000)(1) | STOCK AWARDS ($000)(2) | OPTION AWARDS ($000)(3) | ALL OTHER COMPENSATION ($000)(4) | TOTAL ($000)(5) | | Julie M. Cameron-Doe(6) | 4.6 | 8.8 | — | — | 13.4 | | Martin I. Cole | 105.0 | 160.0 | — | 10.0 | 275.0 | | Suzette Deering(7) | 29.3 | 44.7 | — | — | 74.0 | | Richard A. Goodman(8) | 39.8 | — | 34.2 | — | 74.0 | | Betsy D. Holden | 118.5 | 160.0 | — | 35.0 | 313.5 | | Jeffrey A. Joerres | 125.0 | 360.0 | — | — | 485.0 | | Michael A. Miles, Jr. | 120.0 | 160.0 | — | — | 280.0 | | Timothy Murphy | 130.0 | 160.0 | — | — | 290.0 | | Joyce A. Phillips(8) | 38.0 | 34.2 | — | — | 72.2 | | Jan Siegmund | 125.0 | 160.0 | — | 25.0 | 310.0 | | Angela A. Sun | 110.0 | 160.0 | — | 4.5 | 274.5 | | Solomon D. Trujillo | 110.0 | 80.0 | 80.0 | — | 270.0 |
CODE OF ETHICS
| DETERMINATION OF DIRECTOR COMPENSATION |
EXECUTIVE COMPENSATION FRAMEWORK
| WHAT WE DO | | Pay-for-performance and at-risk compensation. A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by our Company’s strategy. For 2023, performance-based compensation comprised approximately 76% of the targeted annual compensation for our CEO and, on average, approximately 55% of the targeted annual compensation for our other NEOs. The remaining components of such NEOs’ 2023 targeted annual compensation consisted of base salary and service-based RSUs, with the Compensation Committee viewing the service-based RSUs as at-risk as their value fluctuates based on our stock price performance. Align compensation with stockholder interests. Performance measures for incentive compensation are linked to the overall performance of the Company and are designed to be aligned with the creation of long-term stockholder value. Emphasis on future pay opportunity vs. current pay. Our long-term incentive awards are equity-based, use performance and multi-year vesting provisions to encourage retention, and are designed to align our NEOs’ interests with long-term stockholder interests. For 2023, long-term equity compensation comprised approximately 78% of the targeted annual compensation for our CEO and, on average, approximately 55% of the targeted annual compensation for our other NEOs. Mix of performance metrics. The Company utilizes a mix of performance metrics that emphasize both absolute performance goals, which provide the primary links between incentive compensation and the Company’s strategic operating plan and financial results, and a relative payout modifier, which measures the Company’s relative TSR versus the S&P 500 Index. Stockholder engagement. The Compensation Committee chair and members of management engage with stockholders regularly to discuss and understand their perceptions or concerns regarding our executive compensation program. “Clawback” policies. Pursuant to the Company’s Dodd-Frank Policy, the Company is required to recoup certain incentive compensation from covered officers in the event of a financial restatement. In addition, the Company maintains a separate Misconduct Policy which provides that the Company may, in its sole discretion, recoup certain incentive compensation, including time-based equity awards, from covered officers in the event the covered officer engages in compliance misconduct or detrimental conduct, which may include actions that resulted in a financial restatement. Robust stock ownership guidelines. We require our executive officers to own a meaningful amount of Company stock to align them with long-term stockholder interests (6x base salary in the case of our CEO and 3x base salary for our other NEOs). Include ESG metrics in compensation program. Our annual incentive program incorporates ESG metrics, which qualitatively assess progress towards the Company’s three ESG pillars - Integrity of Global Money Movement, Economic Prosperity, and Diversity, Equity, Inclusion, and Belonging. In addition, our annual incentive program incorporates compliance and leadership metrics. Multi-year vesting and/or performance periods for long-term incentive awards. Independent compensation consultant retained by the Compensation Committee. “Double trigger” severance benefits in the event of a change-in-control. Maximum payout caps for annual cash incentive compensation and PSUs. |
EXECUTIVE COMPENSATION FRAMEWORK
| WHAT WE DON’T DO | | ✘ No repricing or buyout of underwater stock options without stockholder approval. ✘ No change-in-control tax gross-ups. ✘ Prohibition against pledging and hedging of Company securities by senior executives and directors. ✘ No dividends or dividend equivalents paid on unvested or unearned PSUs or RSUs. ✘ No service-based defined benefit pension plan. |
CHIEF EXECUTIVE OFFICER COMPENSATION
CHIEF EXECUTIVE OFFICER COMPENSATION Mr. McGranahan’s 2023 base salary and annual incentive award target remained unchanged from the levels set at the time he joined the Company in December 2021, while Mr. McGranahan’s long-term incentive award target increased from $8,000,000 to $9,500,000. In February 2023, the Compensation Committee approved (and the independent members of the Board ratified) this increase based on their assessment of his performance, and consideration of relevant market data (as provided by the Compensation Committee’s independent consultant, Meridian). In approving the adjustment, the Compensation Committee elected to deliver the entire increase in Mr. McGranahan’s total direct compensation in the form of long-term incentive awards to further align his interests with stockholders through the risks and rewards of equity ownership and to further support the execution of the Company’s long-term strategy. Following this adjustment, Mr. McGranahan’s 2023 target compensation was aligned with median compensation for chief executive officers in the 2023 peer group, based on the most recent publicly available information, as compiled by the Company’s independent consultant. For 2023 performance, Mr. McGranahan received an annual incentive payout of $1,870,000; reflecting a payout of 110% of target, as further described on pages 42-44. In 2023, Mr. McGranahan’s long-term incentive allocation was comprised of 60% PSUs, 20% stock options and 20% service-based RSUs. Further information with respect to the 2023 long-term incentive awards can be found on pages 44-48. Mr. McGranahan’s 2023 total target direct compensation (which includes base salary, target bonus opportunity and the 2023 long-term incentive grant value) was weighted significantly toward variable and performance-based incentive pay over fixed pay, and long-term, equity-based pay over annual cash compensation, because the Compensation Committee desired to tie a significant level of the CEO’s compensation to the performance of the Company. The percentage of compensation delivered in the form of performance-based compensation in 2023 was higher for Mr. McGranahan as compared to our other NEOs because the Compensation Committee believes that the CEO’s leadership is one of the key drivers of the Company’s success and that a greater percentage of the CEO’s total compensation should be variable as a reflection of the Company’s level of performance. Market data provided by the Compensation Committee’s independent compensation consultant supported this practice as well. The following chart illustrates our CEO pay philosophy of heavily weighting targeted CEO compensation toward variable, performance-based pay elements.
OUR EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
| Our Executive Compensation Philosophy The Compensation Committee believes the Company’s executive compensation program should reward actions and behaviors that build a foundation for the long-term strength and performance of the Company, while also rewarding the achievement of short-term performance goals informed by the Company’s strategy. | | | Objectives | • Align executive goals and compensation with stockholder interests • Attract, retain and motivate outstanding executive talent • Pay-for-performance – Hold executives accountable and reward them for achieving financial, strategic and operating goals | | Guiding Principles | • Pay-for-Performance: Pay is significantly performance-based and at-risk, with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by the Company’s strategy. • Align Compensation with Stockholder Interests: Link incentive payouts with the overall performance of the Company, including achievement of financial and strategic objectives, as well as individual performance and contributions, to create long-term stockholder value. • Stock Ownership Guidelines: Our program requires meaningful stock ownership by our executives to align them with long-term stockholder interests. • Emphasis on Future Pay Opportunity vs. Current Pay: Our long-term incentive awards are delivered in the form of equity-based compensation with multi-year vesting provisions to encourage retention. • Hire, Retain and Motivate Top Talent: Offer market-competitive compensation which clearly links payouts to actual performance, including rewarding appropriately for superior results, facilitating the hire and retention of high-caliber individuals with the skills, experience and demonstrated performance required for our Company. • Principled Programs: Structure our compensation programs considering corporate governance best practices and in a manner that is understandable by our participants and stockholders. |
COMPENSATION CONSULTANTS
COMPENSATION CONSULTANTS During 2023, Meridian continued to provide executive and director compensation consulting services to the Compensation Committee. Meridian is retained by and reports directly to the Compensation Committee and participates in committee meetings. Meridian informs the committee on market trends, as well as regulatory issues and developments and how they may impact the Company’s executive compensation program. Meridian also:
COMPENSATION CONSULTANTS
| • | Participates in the design of the executive compensation program to help the committee evaluate the linkage between pay and performance; | | • | Reviews market data and advises the committee regarding the compensation of the Company’s executive officers; | | • | Reviews and advises the committee regarding outside director compensation; and |
COMPENSATION CONSULTANTS
| • | Performs an annual risk assessment of the Company’s compensation program, as described in the “Executive Compensation—Risk Management and Compensation” section of this Proxy Statement. |
COMPENSATION CONSULTANTS
Meridian does not provide any other services to the Company. The Compensation Committee has assessed the independence of Meridian pursuant to the NYSE rules and the Company concluded that the work performed by Meridian for the Compensation Committee did not raise any conflict of interest. During 2023, management retained the services of Willis Towers Watson PLC (“WTW”) to assist the Company in evaluating the Company’s annual and long-term incentive programs. The Compensation Committee has assessed the independence of WTW pursuant to the NYSE rules and the Company concluded that WTW’s work did not raise any conflict of interest.
MARKET COMPARISON
MARKET COMPARISON For 2023, the Compensation Committee considered market pay practices when setting executive compensation, but did not target percentile ranks of specific compensation elements or total target direct compensation against the market data. Instead, the committee used market data to assess the overall competitiveness and reasonableness of the Company’s executive compensation program. While the Compensation Committee considers relevant market pay practices when setting executive compensation, it does not believe it is appropriate to establish compensation levels based only on market practices. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company and individual performance and peer compensation levels. The factors that influence the amount of compensation awarded include, but are not limited to:
MARKET COMPARISON
| • | Market competition for a particular position; | | • | Experience and past performance inside or outside the Company; | | • | Role and responsibilities within the Company; | | • | Tenure with the Company and associated institutional knowledge; | | • | Long-term potential with the Company; | | • | Innovative thinking and leadership; | | • | Money transfer or financial services industry expertise; | | • | Personal performance and contributions; | | • | Succession planning; | | • | Past and future performance objectives; and | | • | Value of the position within the Company. |
MARKET COMPARISON
As further discussed below, the Compensation Committee considered market data from both an executive compensation peer group and a general industry compensation survey, but did not assign a specific weight to either data source. The Compensation Committee believes that the Company’s executive compensation peer group should reflect the markets in which the Company competes for business, executive talent and capital. Accordingly, the Company’s peer group includes companies meeting either of the following criteria:
MARKET COMPARISON
| • | Global brands providing virtual products or services; or | | • | Companies involved with payment and/or processing services. |
MARKET COMPARISON
The executive compensation peer group used for evaluating 2023 compensation decisions consisted of the companies below, which was the same executive compensation peer group used to evaluate 2022 compensation decisions. Meridian compiled compensation information from the peer group based on the publicly filed documents of each member of the peer group. Based on the information below, the Company estimates that it is between the 25th and 50th percentiles of the peer group in terms of revenues, above the 75th percentile of the peer group in terms of percentage of total revenues outside of the US, and below the 25th percentile of the peer group in terms of market capitalization.
MARKET COMPARISON
| PEER GROUP | FISCAL YEAR 2022 REVENUES* (IN MILLIONS) | INTERNATIONAL BUSINESS (% OF TOTAL REVENUES OUTSIDE OF THE US) | MARKET CAP (AS OF 12/31/2022) (IN MILLIONS) | | Bread Financial Holdings, Inc. | $2,232 | ** | $1,877 | | Broadridge Financial Solutions, Inc. | $5,709 | 13% | $15,781 | | CME Group Inc. | $5,009 | ** | $60,492 | | Discover Financial Services | $10,978 | 0% | $26,730 | | eBay Inc. | $9,795 | 51% | $22,504 | | Euronet Worldwide, Inc. | $3,359 | 75% | $4,681 | | Fidelity National Information Services, Inc. | $14,528 | 24% | $40,261 | | Fiserv, Inc. | $17,737 | 14% | $64,182 | | FLEETCOR Technologies, Inc. | $3,427 | 39% | $13,547 | | Genpact Limited | $4,371 | 76% | $8,489 | | Global Payments Inc. | $8,976 | 16% | $26,856 | | Intercontinental Exchange, Inc. | $7,292 | 33% | $57,302 | | Jack Henry & Associates, Inc. | $1,943 | 0% | $12,807 | | MoneyGram International, Inc. | $1,310 | 58% | $1,051 | | Nasdaq, Inc. | $6,226 | 18% | $30,140 | | Paychex, Inc. | $4,612 | 1% | $41,656 | | PayPal Holdings, Inc. | $27,518 | 43% | $81,193 | | SS&C Technologies Holdings, Inc. | $5,283 | 29% | $13,114 | | 25th Percentile | $3,663 | 14% | $12,884 | | 50th Percentile | $5,496 | 27% | $24,617 | | 75th Percentile | $9,590 | 45% | $41,307 |
MARKET COMPARISON
| * All data was compiled by Meridian who obtained peer company financial market intelligence from S&P Capital IQ. | | ** Data not available for this metric. |
MARKET COMPARISON
The Compensation Committee also referenced general industry compensation survey data in evaluating executive pay in order to consider a broader perspective on market practices. To assist the Compensation Committee in its review of the general industry compensation survey data, Meridian extracts compensation information from the surveys with respect to companies with annual revenues generally ranging from $3 billion to $6 billion. For the 2023 compensation review, Meridian compiled compensation data from general industry executive pay surveys provided by WTW (which included data from companies with annual revenues between $3 billion and $6 billion), and peer group data taken directly from peer group proxy statements or from the Equilar Top 25 database. Executive positions were matched to the peer group proxy data and third-party survey data based on role, responsibility, and reporting relationships.
Pay-For-Performance and At-Risk Compensation
Pay-For-Performance and At-Risk Compensation The principal components of the Company’s 2023 annual executive compensation program were annual base salary, annual incentive awards, and long-term incentive awards in the form of PSUs, stock options (for Mr. McGranahan) and RSUs. The Compensation Committee designed the 2023 executive compensation program so that performance-based pay elements (Annual Incentive Plan awards, PSUs and, if applicable, stock options) would constitute a significant portion of the executive compensation awarded, determined at target levels. The following charts illustrate the mix of the targeted annual compensation for Mr. McGranahan and the average targeted annual compensation for the other NEOs, and the portion of that compensation that is performance-based and/or at-risk. For purposes of these charts, the percentage of targeted annual compensation was determined based on the annual base salary and target incentive opportunities applicable to the NEOs as of December 31, 2023.
ELEMENTS OF 2023 EXECUTIVE COMPENSATION PROGRAM
| | Fixed | | At-Risk / Performance-Based | | | | | | | | | Base Salary | | Annual Incentive Awards | | PSUs | | Stock Options (CEO only) | | RSUs | | Key Characteristics | Fixed compensation component payable in cash. | | Variable compensation component payable in cash based on performance against annually established performance objectives. | | PSUs vest based on the Company’s achievement of financial performance and operational efficiency objectives, with a payout modifier based on the Company’s relative TSR performance. The value of PSUs is also dependent on our stock price over the performance period. PSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. | | Non-qualified stock options granted with an exercise price equal to fair market value on the date of grant that expire 10 years after grant and become exercisable in 25% annual increments over a four-year vesting period based on continued service during the vesting period. The value of stock options is dependent on our stock price over the option term. | | RSUs vest in one-third annual increments based on continued service during the vesting period. The value of RSUs is dependent on our stock price over the vesting period. RSUs accrue dividend equivalents, with dividend equivalents paid only to the extent the underlying shares vest. | | Why We Pay This Element | Establish a pay foundation at competitive levels to attract and retain talented executives. | | Motivate and reward executives for performance on key financial, strategic, business unit and compliance, and/or individual performance goals over the year. Hold our executives accountable, with payouts based on actual performance against pre-established and communicated performance goals. | | Align the interests of executives with those of our stockholders by focusing the executives on the Company’s financial, operational efficiency, and TSR performance over a multi-year performance period. Hold our executives accountable, with payouts varying from target based on actual performance against pre-established and communicated performance goals. | | Align interests of the CEO with those of our stockholders by focusing on long-term stock price appreciation over the option term. | | Competitive with market practices in order to attract and retain top executive talent. Align the interests of executives with those of our stockholders by focusing the executives on long-term objectives over a multiyear vesting period, with the value of the award fluctuating based on stock price performance. | | How We Determine Amount* | Experience, job scope, responsibilities, market data, internal equity, and individual performance. | | Internal pay equity, market practice, corporate and individual performance. Cash payouts ranging from 0% to 200% of target based on the achievement of financial and strategic goals (inclusive of an additional +/- 25% modifier for participants other than Mr. McGranahan based on individual leadership and impact as measured across areas such as customer focus, ESG and team engagement). Payouts are capped at a total of 200% of target. | | Internal pay equity, market practice and individual performance. PSUs are subject to vesting ranging from 0% to 200% of target based on revenue growth and operational efficiency goals during the performance period. The number of PSUs scheduled to vest based on our achievement will be multiplied by a payout modifier (ranging from 75% to 125%), based on the Company’s relative TSR versus the S&P 500 Index over the 2023-2025 performance period. | | Internal pay equity, market practice and individual performance. | | Internal pay equity, market practice and individual performance. |
Annual Incentive Compensation
Annual Incentive Compensation Our Annual Incentive Plan is designed to motivate and reward our NEOs for achieving short-term performance objectives. We believe the program supports our “pay-for-performance” culture. Specifically, in designing the 2023 Annual Incentive Plan, the Compensation Committee established goals designed to further align the plan with the Company’s long-term business strategy and key growth enablers, incentivize the achievement of financial commitments made at the Company’s 2022 Investor Day, drive greater accountability for business unit or functional outcomes and properly reward participants for Company, team and individual results. Target payout opportunities under the Annual Incentive Plan are expressed as a percentage of a participant’s annual base salary. For 2023, in connection with Mr. Cagwin’s appointment to the position of CFO, the Compensation Committee increased his target bonus opportunity from 50% to 100% of base salary in order to align his annual incentive target with market data and the Company’s historical compensation practices. None of our other NEOs received an Annual Incentive Plan target increase with respect to 2023. Potential payouts ranged from 0% to 200% of target based on the achievement of pre-established financial, strategic, and business unit and compliance goals. To measure individual performance against key objectives for the Company as well as the executive’s success in fulfilling the executive’s responsibilities, the total payout under the Annual Incentive Plan for the NEOs other than Mr. McGranahan was subject to a +/- 25% modifier based on the Compensation Committee’s assessment of performance on metrics relating to leadership, ESG, and customer focus. In addition to the specific ESG metrics included in the program, the Compensation Committee believes the compliance and leadership metrics support key ESG initiatives for the Company. Payouts for the NEOs were capped at 200% of each individual’s target bonus opportunity. The Annual Incentive Plan was based on the achievement of financial, strategic, and business unit and compliance goals weighted 50%, 30%, and 20%, respectively. The weighting of the performance measures reflects the desire of the Compensation Committee to tie a significant portion of annual incentive compensation to performance measures that the committee believes are meaningful to and readily accessible by our investors, while at the same time emphasizing strategic performance objectives focused on the Company’s growth imperatives and execution of its longterm strategic plan and compliance objectives. Financial Performance and Goal Setting. Consistent with prior years, the Compensation Committee set the annual incentive targets for the 2023 Annual Incentive Plan in February 2023. In order to better align the incentives with the Company’s long-term strategy, for 2023, the Compensation Committee approved certain modifications to the financial component of the Annual Incentive Plan. In particular, the financial component of the 2023 Annual Incentive Plan measured performance based on adjusted revenue and adjusted EPS targets, weighted 40% and 60%, respectively, as compared to the 2022 design of measuring performance with respect to adjusted revenue, adjusted profit margin, and adjusted earnings per share weighted 50%, 30% and 20% respectively. The changes to the performance metrics were made to focus on performance measures aligned with the Company’s long-term strategy and measures viewed as meaningful to and readily accessible by our investors. The Compensation Committee believed at the time that the performance targets were rigorous yet achievable, and therefore established the targets so that they would be achieved, at the target performance level, if the Company successfully executed against its operating plan for 2023. In addition, the 2023 annual incentive targets were set based on the Company’s “Evolve 2025” strategy and related publicly announced 2023 financial projections. At the time the targets were set, they were designed to be challenging based on the operating environment and projections at the time, but achievable with the successful execution of our operating strategy.
Annual Incentive Compensation
| | 2023 TARGET* | 2023 INCENTIVE RESULTS | ACHIEVEMENT (%) | | Adjusted Revenue Growth | 1.0% | 1.5% | 124% | | Adjusted EPS | $1.60 | $1.74 | 200% | | Financial Performance Achievement | | | 85% |
Annual Incentive Compensation
| * 2023 target and actual results for total revenue growth exclude Argentina inflation and Business Solutions revenue and are shown on a constant currency basis, calculated assuming no changes in the currency exchange rates from 2022 currency exchange rates. 2023 target and actual results for EPS exclude special items, such as acquisition and separation costs, the gain on the sale of Business Solutions, severance and other expenses from our operating expense redeployment program, and the income tax impact of these and other tax adjustments. The performance curve provided payout opportunities for performance ranging from (3.0)% to 3.0% for revenue growth and $1.55 to $1.70 for adjusted EPS. |
Annual Incentive Compensation
When the financial performance measures were established, the Compensation Committee determined that the items described in the footnote to the table immediately above should be excluded from both the establishment of goals as well as the determination of payout calculations, to more closely align with the underlying operating performance of the business. As described above, the Compensation Committee set the 2023 financial performance goals by establishing payout ranges based on the Company’s revenue and EPS. The Compensation Committee established the performance goals and corresponding payout percentages based upon input from management regarding the Company’s expected performance in the upcoming year and considering the Company’s new long-term strategy. The Compensation Committee designed the goals to encourage strong, focused performance by our executives, with the intention of encouraging profitable revenue growth while placing an emphasis on EPS. The 2023 performance goals provided a maximum initial payout level of 200% of target if adjusted revenue grew by 3.0% as compared to 2022 adjusted performance and adjusted EPS was equal to or greater than $1.70. Strategic Performance and Goal Setting. Participants in the 2023 Annual Incentive Plan had 30% of their award opportunity allocated to the achievement of pre-established performance objectives based upon the Company’s strategic operating plan, with goals relating to retail customer retention, new digital customer growth, digital bank/wallet customer growth, and omnichannel customer growth. The strategic performance objectives were designed to be achievable, but required the coordinated, cross-functional focus and effort of the executives. Based on the achievement of the strategic performance objectives, the Compensation Committee certified a payout equal to 19% of each NEO’s target allocated to the strategic performance objectives. Business Unit and Compliance Performance and Goal Setting. In order to emphasize regional and functional accountability and compliance as a continued priority throughout the organization, participants in the 2023 Annual Incentive Plan had 20% of their award opportunity allocated to the achievement of pre-established regional adjusted revenue and adjusted contribution margin targets (or, for non-regional specific dedicated individuals, average achievement of regional targets), as well as compliance/enterprise risk goals. Performance levels of the objectives were designed to be achievable, but required the coordinated, cross-functional focus and effort of the executives. Based on the achievement of the business unit and compliance objectives, the Compensation Committee certified a payout equal to 14%-15% of each continuing NEO’s target allocated to the business unit and compliance performance objectives. Individual Performance Modifier and Goal Setting. Other than for Mr. McGranahan, each NEO’s payout under the 2023 Annual Incentive Plan was subject to a +/- 25% modifier based on the Compensation Committee’s assessment of individual performance. In making its assessment, the Compensation Committee considered the recommendations of Mr. McGranahan based on his review of the performance of each NEO against the objectives established by the Compensation Committee at the beginning of the year with respect to the individual performance modifier. For 2023, the application of the individual performance modifier was determined based on performance with respect to individual leadership and impact as measured across areas such as customer focus, the achievement of our ESG pillars (with a focus on diversity, equity, inclusion, and belonging) and team engagement. The Compensation Committee believes that the performance objectives established for the individual performance modifier are indicators of our executives’ success in fulfilling their responsibilities to the Company, supporting the Company’s strategic operating plan and executing on key Company initiatives. The committee believes that including an assessment of contributions towards the Company’s progress on the Company’s three ESG pillars (Integrity of Global Money Movement, Economic Prosperity, and Diversity, Equity, Inclusion, and Belonging) reinforces these objectives as priorities throughout the organization. The performance required to receive a positive adjustment under the individual performance modifier was designed to be achievable, but required strong and consistent performance by the executive. Based on the Compensation Committee’s assessment of individual and business unit performance, the committee did approve individual performance modifiers for certain of the NEOs ranging from (10)% to 11%. Compliance Evaluation. The 2023 award agreements under the Annual Incentive Plan are subject to the Company’s Misconduct Clawback and Forfeiture Policy (as amended effective as of October 2, 2023), which specifically authorizes the clawback of annual incentive payments due to compliance failures. In early 2024, the Compensation Committee determined that each NEO met the compliance-related evaluation criteria and therefore determined that each NEO remained eligible for a bonus with respect to 2023. NEO Payouts Under the 2023 Annual Incentive Plan. The following table sets forth each NEO’s 2023 target award opportunity expressed (i) as a percentage of 2023 base salary and (ii) in dollars and (iii) the annual incentive payouts received by each NEO. As described above, based on the Company’s total revenue and adjusted EPS results as compared to the pre-established goals, the overall achievement for the financial component of the annual incentive plan was 118%-119% for the continuing NEOs. The Company’s achievement level was, in part, impacted by a change in monetary policy by the Central Bank of Iraq, which resulted in an increase in demand for the Company’s services in that region. Although the formulaic results equated to an achievement level of 118%-119%, management recommended that the Compensation Committee consider the use of negative discretion to take into account that the change in Iraq monetary policy was not within the control of management, although still recognizing that our network of agents and infrastructure positioned the Company to benefit from the change in monetary policy. After considering management’s recommendation as well as the overall performance of the Company, the Compensation Committee approved 109%-110% as the overall achievement level for the financial component of the annual incentive plan, reflecting a 9% reduction in the formulaic achievement level.
Annual Incentive Compensation
| EXECUTIVE | TARGET BONUS AS A % OF BASE SALARY | TARGET AWARD OPPORTUNITY ($000) | FINAL BONUS ($000) | | Devin McGranahan | 170% | 1,700.0 | 1,870.0 | | Matt Cagwin | 100% | 525.0 | 635.3 | | Andrew Walker | 90% | 495.0 | 490.1 | | Benjamin Adams | 90% | 405.0 | 423.2 | | Giovanni Angelini | 100% | 442.3 | 535.2 | | Jean Claude Farah* | 110% | 550.0 | 709.5 |
Annual Incentive Compensation
| * As discussed under “Potential Payments Upon Termination or Change-in-Control – Executive Severance Policy,” Mr. Farah received a bonus payment with respect to the 2023 Annual Incentive Plan under the terms of his Release and Waiver Agreement. The bonus payment was based on projected achievement under the 2023 Annual Incentive Plan at the time that he entered into the Release and Waiver Agreement. |
Long-Term Incentive Compensation
Long-Term Incentive Compensation The objectives for the long-term incentive awards for 2023 were to:
Long-Term Incentive Compensation
| ● | Align the interests of our executives with the interests of our stockholders by focusing on objectives that support stock price appreciation and building a sustainable business for our stockholders; | | ● | Increase cross-functional executive focus in the coming years on Company performance through PSU awards with vesting tied to the achievement of absolute performance goals; | | ● | Continue executive focus on stockholder returns through the use of a relative TSR payout modifier; and | | ● | Retain the services of executives through multi-year vesting provisions. |
Long-Term Incentive Compensation
The Company’s stockholder-approved Long-Term Incentive Plan allows the Compensation Committee to award various forms of long-term incentive grants, including stock options, RSUs, and performance-based equity and cash awards. The Compensation Committee approves all equity grants made to our senior executives, with the equity grants made to the CEO ratified by the independent members of the Board. In addition to the factors listed in the table under “Elements of 2023 Executive Compensation Program,” the Compensation Committee also considers dilution of the Company’s outstanding shares when making equity grants. 2023 Annual Long-Term Incentive Awards. In early 2023, the Compensation Committee approved the NEOs longterm incentive targets under the Long-Term Incentive Plan. Mr. McGranahan received a long-term incentive award target increase from the level established when he joined the Company in 2021, the value of which was determined based on their assessment of his performance, and consideration of relevant market data (as provided by Meridian). In approving the adjustment, the Compensation Committee elected to deliver the entire increase in Mr. McGranahan’s total direct compensation in the form of long-term incentive awards to further align his interests with stockholders through the risks and rewards of equity ownership and to further support the execution of the Company’s long-term strategy. Mr. Cagwin also received a long-term incentive award target increase with respect to 2023 in connection with his appointment to the position of CFO, with the value determined after considering market data and the Company’s historical compensation practices for the CFO role. Mr. Farah’s long-term incentive award target was adjusted to reflect the scope of his role relative to the competitive market. The table sets forth the target award value and actual grant value, as of the date of grant, of the 2023 long-term incentive awards received by each NEO. In approving the actual grant value, the Compensation Committee may approve adjustments from the target award level to reflect individual performance, expanded responsibilities, retention concerns, or other factors considered relevant by the Compensation Committee.
Long-Term Incentive Compensation
| EXECUTIVE | 2023 LTI TARGET VALUE ($000) | 2023 LTI GRANT VALUE ($000) | | Devin McGranahan | 9,500.0 | 9,500.0 | | Matt Cagwin | 2,150.0 | 2,150.0 | | Andrew Walker | 1,200.0 | 1,200.0 | | Benjamin Adams* | 1,060.0 | 1,300.0 | | Giovanni Angelini* | 800.0 | 840.0 | | Jean Claude Farah | 1,050.0 | 1,050.0 |
Long-Term Incentive Compensation
| * The Compensation Committee increased Mr. Adams’ 2023 LTI grant value by $240,000 as compared to the target value to reflect his expanded duties as Interim Chief People Officer. In addition, Mr. Angelini’s 2023 LTI grant value was increased as compared to the target value by $40,000. Both of the adjustments to Messrs. Adams’ and Angelini’s LTI awards were intended to be one time in nature. |
Long-Term Incentive Compensation
The 2023 LTI grant value was then allocated among PSUs, RSUs and stock options, as applicable. In 2023, the Compensation Committee granted the long-term incentive allocation indicated below to each of the NEOs:
Long-Term Incentive Compensation
| CEO 2023 LONG-TERM INCENTIVE AWARDS | OTHER NEO 2023 LONG-TERM INCENTIVE AWARDS |
Long-Term Incentive Compensation
The Compensation Committee believes that this mix is appropriate because it is designed to align the interests of our NEOs with the interests of our stockholders, drive long-term performance with respect to strategic measures, support retention of our NEOs and align with market practices as reported by Meridian. The Compensation Committee believes that this mix also represents a balanced reflection of stockholder returns and financial performance. 2023 PSU Awards. The 2023 PSUs will vest based on performance against goals with respect to (i) adjusted revenue growth (based on GAAP revenue, measured on a constant currency basis, and excluding the impact of Argentina inflation and material acquisitions and dispositions), weighted 50%, (ii) Consumer Services adjusted revenue growth (based on all non-transactional money transfer revenue, measured on a constant currency basis and excluding the impact of Argentina inflation), weighted 25%, and (iii) operational efficiency (evaluated based on cost savings as compared to 2022), weighted 25%. Consistent with the 2022 PSUs, the 2023 PSUs include an overall +/- TSR payout modifier, with the number of PSUs scheduled to vest based on the Company’s revenue and capital efficiency performance multiplied by a payout modifier ranging from 75% to 125%, determined based on our TSR relative to the S&P 500 Index and subject to a maximum payout of 200% of target. The performance goals represent a change from the goals set in 2022 for the PSU program, which was determined based solely on consolidated revenue with the TSR modifier. The committee approved this design change in order to encourage management focus on building a sustainable business for stockholders through an emphasis on growing non-money transfer revenue and driving cost efficiencies rather than focusing solely on consolidated revenue. For 2023 and consistent with the 2022 design, the Compensation Committee approved a PSU design that will measure financial performance annually during each year of the three-year performance period, with each performance year equally weighted, the goals for each year established at the beginning of each of the three years in the performance period and the payout based on an average of the performance during each year over the three-year performance period. While financial performance will be measured on an annual basis, the TSR payout modifier will be determined based on a three-year performance period and the PSUs will remain subject to a full three years of stock price fluctuations as the awards do not vest until the third anniversary of the grant date (February 2026), except as otherwise provided under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. For the first year of the three-year performance period, the Compensation Committee required adjusted revenue growth compared to prior year ranging between -1% and 1%, Consumer Services adjusted revenue growth compared to prior year of 10%, and operational efficiency savings of $30M in order to achieve target level performance for each of the performance goals with respect to the portion of the PSUs allocated to the first year of the three-year performance period. Similar to the Annual Incentive Plan design, for purposes of the adjusted revenue goal, the committee approved a target payout range rather than having one performance goal equating to target payout. The adjusted revenue, Consumer Services adjusted revenue, and operational efficiency goals were certified at 46%, 50%, and 50%, respectively, of target achievement, resulting in 146% of the portion of the 2023 PSUs attributable to the first year of the three-year performance period eligible for vesting. With respect to the TSR payout modifier, relative TSR results between the 25th and 75th percentiles of the S&P 500 Index will be interpolated linearly (i.e., +/- 1% change from the 50th percentile), such that relative TSR results for 50th percentile performance will not result in the application of any TSR modifier (whereas relative TSR results for 60th percentile performance would result in the application of 110% of the TSR payout modifier). The Compensation Committee approved the use of adjusted revenue growth, Consumer Services adjusted revenue growth, and operational efficiency in conjunction with the TSR modifier in order to place an emphasis on absolute Company performance and growing non-money transfer revenue and driving cost efficiencies while aligning to stockholder interests. The Compensation Committee utilized revenue as an element in both the Company’s Annual Incentive Plan and long-term incentive program. When designing the Company’s 2023 executive compensation program, the Compensation Committee evaluated a range of performance metrics for purposes of the Company’s incentive programs and considered input from management and Meridian. Based on such review, the Compensation Committee determined that while revenue continues to be viewed as a core driver of the Company’s performance and stockholder value creation and should remain a component in both the Annual Incentive Plan and long-term incentive program, the 2023 long-term incentive plan should be designed to focus management on building a sustainable business for our stockholders by incorporating performance goals which promote cost savings through operational efficiencies as well as non-transactional money transfer revenue. The following table sets forth each NEO’s threshold, target and maximum award opportunity with respect to the 2023 PSUs:
Long-Term Incentive Compensation
| | 2023 PSU WITH TSR MODIFIER AWARD OPPORTUNITY | | | | EXECUTIVE | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | Devin McGranahan | 128,862 | 429,541 | 859,082 | | Matt Cagwin | 28,773 | 95,911 | 191,822 | | Andrew Walker | 16,060 | 53,532 | 107,064 | | Benjamin Adams | 17,398 | 57,993 | 115,986 | | Giovanni Angelini | 11,242 | 37,473 | 74,946 | | Jean Claude Farah* | 14,052 | 46,841 | 93,682 |
Long-Term Incentive Compensation
| * In connection with Mr. Farah’s separation from the Company and in accordance with the underlying award agreement, Mr. Farah will be eligible to receive prorated vesting of his 2023 PSU award based upon his period of service during the vesting period and actual performance during the performance period (resulting in a threshold, target, and maximum award opportunity of 4,770 units, 15,899 units, and 31,798 units, respectively). |
Long-Term Incentive Compensation
Annual RSU Awards. Service-vesting RSUs are granted to our NEOs to support retention and alignment of our NEOs’ interests with the interests of our stockholders. The 2023 annual RSU grants vest in one-third annual increments, subject to the NEO’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. The following table sets forth each NEO’s 2023 annual RSU grant:
Long-Term Incentive Compensation
| EXECUTIVE | ANNUAL RSU GRANT (#) | | Devin McGranahan | 143,181 | | Matt Cagwin | 63,941 | | Andrew Walker | 35,688 | | Benjamin Adams | 38,662 | | Giovanni Angelini | 24,982 | | Jean Claude Farah* | 31,227 |
Long-Term Incentive Compensation
| * In connection with Mr. Farah’s separation from the Company and in accordance with the underlying award agreement, Mr. Farah received prorated vesting of his 2023 RSU award based upon his period of service during the vesting period. |
Long-Term Incentive Compensation
Stock Option Award. With respect to Mr. McGranahan, stock options were granted to further emphasize the achievement of long-term objectives and encourage long-term value creation as the stock options will have value to Mr. McGranahan only if the Company’s stock price appreciates from the date of grant. The stock options have a 10-year term and vest in 25% annual increments over four years, subject to Mr. McGranahan’s continued service or as otherwise provided for under the Company’s Executive Severance Policy or the Long-Term Incentive Plan and related award agreement. For 2023, Mr. McGranahan received a stock option award representing the right to purchase 909,091 shares of the Company’s common stock, subject to the satisfaction of the underlying service-based vesting conditions. 2021 PSU Awards. Under the terms of the 2021 PSUs, 2023 represented the final year of the three-year performance period for the 2021 Financial PSUs and the 2021 TSR PSUs. The 2021 Financial PSU awards were scheduled to vest based on performance metrics relating to a targeted constant currency growth rate for revenue, excluding the impact of Argentina inflation, and operating margin (each weighted 50%), measured annually during each year of the three-year performance period, with each performance year equally weighted. The 2021 TSR PSUs had performance and payouts determined based on performance over the three-year cumulative performance period ending December 31, 2023. The 2021 Financial PSU and 2021 TSR PSU performance objectives and the achievement levels are set forth in the tables below. While the performance periods for the 2021 PSUs concluded as of December 31, 2023, these awards remained subject to service-based vesting conditions until the third anniversary of the grant date (February 2024). Pursuant to the terms of the underlying award agreements and consistent with the adjustment methodology used in prior years, the Compensation Committee excluded from the 2021 Financial PSU payout calculations costs incurred in connection with the Company’s acquisition and divestiture activity from 2021 through 2023. Exclusions in 2022 also included the impact of Business Solutions operating results, severance and other expenses from our operating expense redeployment program, Russia/Belarus exit costs and the impact of Russia/Belarus operating results. Exclusions in 2023 included: the impact of Business Solutions operating results and severance and other expenses from our operating expense redeployment program.
Long-Term Incentive Compensation
| 2021 FINANCIAL PSUs (PERFORMANCE PERIOD 2021-2023) | | | | PERFORMANCE OBJECTIVES* | TARGET PERFORMANCE GOALS | ACTUAL PERFORMANCE** | | Revenue growth (comparing 2021 adjusted performance against 2020 adjusted performance) and operating margin (each weighted 50%) | Revenue growth rate: 6.6% - 7.3% Operating margin: 21.4% - 21.6% | Revenue growth rate: 3.7% Operating margin: 22.5% | | Revenue growth (comparing 2022 adjusted performance against 2021 adjusted performance) and operating margin (each weighted 50%) | Revenue growth rate: 4.9% Operating margin: 22.6% | Revenue growth rate: Below threshold Operating margin: 22.0% | | Revenue growth (comparing 2023 adjusted performance against 2022 adjusted performance) and operating margin (each weighted 50%) | Revenue growth rate: 5.6% Operating margin: 22.9% | Revenue growth rate: Below threshold Operating margin: Below threshold | | Overall Attainment Level 52% | | |
Long-Term Incentive Compensation
| * Each year equally weighted at 33.3% in determining the overall attainment level. | | ** At constant currency, calculated assuming no changes in the currency exchange rates from the prior year’s currency exchange rates. |
Long-Term Incentive Compensation
| 2021 TSR PSUs (PERFORMANCE PERIOD 2021-2023) | | | | | | | PERFORMANCE GOALS | | | | | PERFORMANCE OBJECTIVE | THRESHOLD | TARGET | MAXIMUM | ACTUAL PERFORMANCE | | TSR relative to S&P 500 Index* | 30th percentile | 60th percentile | 90th percentile | 6th percentile | | | Overall Attainment Level 0% | | | |
Long-Term Incentive Compensation
| * Relative TSR performance for purposes of the 2021 TSR PSUs was calculated based on the terms of the 2021 TSR PSU award agreement, which requires using a beginning stock price calculated as the average company closing stock price for all trading days during December 2020 and an ending stock price calculated as the average company closing stock price for all trading days during December 2023. In determining the TSR for the companies in the S&P 500 Index, the S&P companies comprising the S&P 500 Index on December 31, 2023 were used. |
Long-Term Incentive Compensation
Based on performance over the three-year performance period, as described above, the 2021 PSUs vested as follows for each of the participating NEOs:
Long-Term Incentive Compensation
| EXECUTIVE* | 2021 TARGET FINANCIAL PSUs (#) | 2021 EARNED FINANCIAL PSUs (#) | 2021 TARGET TSR PSUs (#) | 2021 EARNED TSR PSUs (#) | | Giovanni Angelini | 14,547 | 7,565 | N/A | N/A | | Jean Claude Farah* | 31,915 | 16,596 | 12,127 | — |
Long-Term Incentive Compensation
| * Messrs. McGranahan, Cagwin, Walker, and Adams commenced employment with the Company following the commencement of the performance period and, accordingly, did not receive 2021 PSUs. |
Long-Term Incentive Compensation
2022 PSU Awards. Under the terms of the 2022 PSUs, 2023 represented the second year of the three-year performance period. The 2022 PSUs are scheduled to vest based on performance against revenue growth goals, measured on a constant currency basis and excluding the impact of Argentina inflation and Business Solutions results, with a +/- TSR payout modifier for TSR relative to the S&P 500 Index and subject to a maximum payout of 200% of target. Based on 2023 performance, the Company experienced a decrease in revenue of (2.6)%, resulting in 92% of the portion of the 2022 PSUs attributable to the second year of the three-year performance period eligible for vesting based on the NEO’s continued service through February 2025. As previously disclosed in the Company’s Proxy Statement filed with the Securities and Exchange Commission on March 28, 2023, the Company’s revenue performance in 2022 resulted in 0% of the portion of the 2022 PSUs attributable to the first year of the three-year performance period being eligible for vesting.
Other Elements of Compensation
| BENEFIT OR PERQUISITE | NAMED EXECUTIVE OFFICERS | OTHER OFFICERS AND KEY EMPLOYEES | ALL FULL-TIME AND REGULAR PART-TIME EMPLOYEES | | 401(k) Plan | ✔ | ✔ | ✔ | | Supplemental Incentive Savings Plan (a nonqualified defined contribution plan) | ✔ | ✔ | | | Severance and Change-in-Control Benefits (Double-Trigger) | ✔ | ✔ | ✔ | | Health and Welfare Benefits | ✔ | ✔ | ✔ | | Limited Perquisites | ✔ | ✔ | |
Other Elements of Compensation
Severance and Change-in-Control Benefits. The Company has an Executive Severance Policy for our executive officers. The Executive Severance Policy helps accomplish the Company’s compensation philosophy of attracting and retaining exemplary talent. The Compensation Committee believes it is appropriate to provide executives with the rewards and protections afforded by the Executive Severance Policy. This policy reduces the need to negotiate individual severance arrangements with departing executives and protects our executives from termination for circumstances not of their doing. The committee also believes the Executive Severance Policy promotes management independence and helps retain, stabilize, and focus the executive officers in the event of a change-in-control. In the event of a change-in-control, the Executive Severance Policy’s severance benefits are payable only upon a “double trigger.” This means that severance benefits are triggered only when an eligible executive is involuntarily terminated (other than for cause, death, or disability), or terminates his or her own employment voluntarily for “good reason” (including a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles without consent) within 24 months after the date of a change-in-control. Severance benefits under this policy are conditioned upon the executive executing an agreement and release that includes, among other things, non-solicitation and non-competition restrictive covenants and a release of claims against the Company. The Executive Severance Policy was amended and restated in February 2023 to make various modifications to the plan, including modifications to align with market practices, as well as to eliminate the legacy tax gross-up provision with respect to change-in-control benefits, a provision which no longer had any operative effect at the time of amendment. Accordingly, no executive officer of the Company is eligible for excise tax gross-up payments under the Executive Severance Policy or otherwise. As noted below, Mr. Farah was subject to an employment agreement, which is a customary practice for executives located in the United Arab Emirates (“UAE”). Under the terms of Mr. Farah’s employment agreement, he was required to receive three months’ notice of involuntary termination of employment or, in lieu of such notice, three months of pay. In addition, Mr. Farah was also eligible for statutory end of service gratuity/severance amounts in accordance with local law, with any statutory payments to reduce any amounts payable to Mr. Farah under the Executive Severance Policy. In connection with his involuntary termination of employment, Mr. Farah became eligible for benefits under the Executive Severance Policy as well as statutory end of service gratuity/severance in accordance with local law. Because the statutory severance amounts exceeded the amounts due to Mr. Farah under the Executive Severance Policy, Mr. Farah received his statutory severance amounts in lieu of the cash severance under the Executive Severance Policy. Our executive officers are also entitled to severance amounts if required to comply with local law, with the amounts paid under local law coordinated with and offsetting any amounts payable under the Executive Severance Policy. Please see the “Executive Compensation—Potential Payments Upon Termination or Change-in-Control” section of this Proxy Statement for further information regarding the Executive Severance Policy, including the treatment of awards upon qualifying termination events or a change-in-control, as well as the amounts to be received by Mr. Farah in connection with his separation. Employment Arrangements. The Company generally executes an offer of employment before an executive joins the Company. This offer describes the basic terms of the executive’s employment, including his or her start date, starting salary, annual incentive target and long-term incentive award target. The terms of the executive’s employment are based thereafter on sustained good performance rather than contractual terms, and the Company’s policies, such as the Executive Severance Policy, will apply as warranted. Under certain circumstances, the Compensation Committee recognizes that special arrangements with respect to an executive’s employment may be necessary or desirable. For example, Mr. Farah and a subsidiary of the Company entered into an employment contract in June 2008 with respect to Mr. Farah’s employment with the Company and Mr. Angelini and a subsidiary of the Company entered into an employment contract in December 2020 with respect to Mr. Angelini’s employment with the Company. Employment contracts are a competitive market practice in the UAE where Mr. Farah resides and in Italy where Mr. Angelini resides, and the Compensation Committee believes the terms of these contracts were consistent with those for similarly situated executives in the UAE and Italy. The terms of Messrs. Angelini’s and Farah’s employment agreements provided for (i) eligibility to participate in an annual incentive program and Long-Term Incentive Plan and (ii) eligibility to participate in retirement, health, and welfare benefit programs on the same basis as similarly situated employees in their locations. The employment agreements with Messrs. Angelini and Farah also included non-competition, non-solicitation, and confidentiality provisions. Retirement Savings Plans. The Company executives on U.S. payroll are eligible for retirement benefits through a qualified defined contribution 401(k) plan, the Incentive Savings Plan, and a nonqualified defined contribution plan, the Supplemental Incentive Savings Plan (“SISP”). The SISP provides a vehicle for additional deferred compensation with contributions from the Company. We maintain the Incentive Savings Plan and the SISP to encourage our employees to save some percentage of their cash compensation for their eventual retirement. The Compensation Committee believes that these types of savings plans are consistent with competitive pay practices, and are an important element in attracting and retaining talent in a competitive market. Please see the 2023 Nonqualified Deferred Compensation Table in the “Executive Compensation” section of this Proxy Statement for further information regarding the Company’s retirement savings plans. Retention Arrangement. In 2023, the Compensation Committee granted Mr. Angelini a cash retention award of $100,000. The first installment of $50,000 was paid in May 2023 and the second installment was paid in January 2024. This retention award was provided to incentivize Mr. Angelini to remain with the Company, particularly during a period of leadership transition. Benefits and Perquisites. The Company’s global benefit philosophy for employees, including executives, is to provide a package of benefits consistent with local practices and competitive within individual markets. While employed with the Company, each of our NEOs participates in the health and welfare benefit plans and fringe benefit programs generally available to all other Company employees in the individual market in which they are located. For example, Mr. Farah resides in the UAE where it is customary to provide certain fringe benefits, including annual housing, education, transportation, health and wellness and technology allowances.
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
| NAME AND PRINCIPAL POSITION | YEAR | SALARY ($000)(1) | BONUS ($000)(2) | STOCK AWARDS ($000)(3) | OPTION AWARDS ($000)(3) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($000)(4) | CHANGE IN PENSION VALUE AND NON-QUALIFIED DEFERRED COMPENSATION EARNINGS ($000) | ALL OTHER COMPENSATION ($000)(5) | TOTAL ($000) | | Devin McGranahan | 2023 | 1,000.0 | — | 5,033.4 | 1,900.0 | 1,870.0 | — | 163.5 | 9,966.9 | | President and Chief Executive Officer | 2022 | 1,000.0 | — | 3,407.1 | 1,600.0 | 986.0 | — | 248.6 | 7,241.7 | | | 2021 | 17.4 | 1,000.0 | 6,500.0 | 6,600.0 | — | — | — | 14,117.4 | | Matt Cagwin | 2023 | 525.6 | — | 1,386.9 | — | 635.3 | — | 193.2 | 2,741.0 | | Executive Vice President, Chief Financial Officer | 2022 | 234.5 | — | 1,091.5 | — | 56.4 | — | 118.8 | 1,501.2 | | | 2021 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Andrew Walker | 2023 | 550.0 | — | 876.8 | — | 490.1 | — | 21.4 | 1,938.3 | | Executive Vice President, Chief Operations Officer | 2022 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 2021 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Benjamin Adams | 2023 | 450.0 | — | 797.6 | — | 423.2 | — | 128.7 | 1,799.5 | | Executive Vice President, Chief Legal Officer | 2022 | 262.5 | — | 1,500.0 | — | 234.9 | — | 61.0 | 2,058.4 | | | 2021 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Giovanni Angelini(6) | 2023 | 440.3 | 50.0 | 602.8 | — | 535.2 | — | 29.7 | 1,658.0 | | President, Europe & Africa | 2022 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 2021 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | Jean Claude Farah(6) | 2023 | 500.0 | — | 850.5 | — | 709.5 | — | 161.1 | 2,221.1 | | President, Middle East and Asia Pacific | 2022 | 500.0 | — | 942.5 | — | 264.0 | — | 176.0 | 1,882.5 | | | 2021 | 500.0 | — | 1,500.0 | — | 429.0 | — | 175.7 | 2,604.7 |
2023 SUMMARY COMPENSATION TABLE
Footnotes:
2023 SUMMARY COMPENSATION TABLE
| (1) Except with respect to salary adjustments in connection with promotions (or, in the case of Mr. Angelini, a base salary increase in accordance with the local collective bargaining agreement to which he and similarly situated employees are subject), any salary adjustments are effective as of March of each reporting year. With respect to Mr. Cagwin, this amount also includes the monthly stipend of $6,129 for his service as interim CFO in January. |
2023 SUMMARY COMPENSATION TABLE
| (2) The amount reported in this column for Mr. Angelini for 2023 represents the first installment of a cash retention award of $100,000, which was paid in May 2023, with the second installment paid in January 2024 and which will be reflected as 2024 compensation. |
2023 SUMMARY COMPENSATION TABLE
| (3) The amounts reported in these columns for 2023 represent equity grants to the NEOs under the Long-Term Incentive Plan. The amounts reported in these columns are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The amounts included in the Stock Awards column for the PSUs granted during 2023 are calculated based on the probable satisfaction of the performance conditions for such awards as of the date of grant. In accordance with FASB ASC Topic 718, the amount reported for 2023 is based on one-third of the full number of shares subject to the 2023 PSUs and 2022 PSUs for which the target financial performance goals were established in 2023. Assuming the highest level of performance is achieved for the 2023 PSUs and 2022 PSUs, the maximum value for |
2023 SUMMARY COMPENSATION TABLE
the portion of the 2023 PSUs and 2022 PSUs reflected as 2023 compensation in this column under FASB ASC Topic 718 would be as follows ($000): Mr. McGranahan -$6,266.7; Mr. Cagwin -$1,053.7; Mr. Walker -$793.6; Mr. Adams -$555.2; Mr. Angelini -$533.6; and Mr. Farah -$860.9. Dividend equivalents with respect to the 2023 PSUs and 2023 RSUs will be paid to the extent the underlying PSUs and RSUs are earned. See Note 16 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the years ended December 31, 2023, 2022 and 2021, respectively, for a discussion on the relevant assumptions used in calculating the amounts reported for the applicable year.
2023 SUMMARY COMPENSATION TABLE
| (4) For 2023, the amounts reflect the actual cash bonus received under the Annual Incentive Plan. |
2023 SUMMARY COMPENSATION TABLE
| (5) Amounts included in this column for 2023 are set forth by category in the 2023 All Other Compensation Table below. |
2023 SUMMARY COMPENSATION TABLE
| (6) For 2023, Mr. Angelini’s salary was denominated in U.S. dollars but was paid to or on behalf of Mr. Angelini in euros, based on a conversion rate of 1.1. Mr. Farah’s salary was denominated in U.S. dollars but was paid to or on behalf of Mr. Farah in Emirati dirham, based on a conversion rate of 0.272261. Contributions made to the Caisse des Français de l’Etranger (the “CFE Retirement Fund”) on behalf of Mr. Farah were denominated in euros and converted to U.S. dollars for disclosure in this Proxy Statement. The conversion rates of 1.086726163, 1.077545676, 1.093810841, and 1.085142548 were applied for quarters one, two, three, and four, respectively. |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
2023 GRANTS OF PLAN-BASED AWARDS TABLE
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| NAME | GRANT DATE | APPROVAL DATE | ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#)(3) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS (#)(4) | EXERCISE OR BASE PRICE OF OPTION AWARDS ($/Sh) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($000)(5) | | | | | TARGET ($000) | MAXIMUM ($000) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | | | | | Devin McGranahan | | | 1,700.0 | 3,400.0 | | | | | | | | | | 2/24/2023 | 2/24/2022 | | | 25,779 | 85,929 | 171,858 | | | | 1,118.8 | | | 2/23/2023 | 2/23/2023 | | | 42,954 | 143,181 | 286,362 | | | | 2,014.6 | | | 2/23/2023 | 2/23/2023 | | | | | | 143,181 | | | 1,900.0 | | | 2/23/2023 | 2/23/2023 | | | | | | | 909,091 | 13.27 | 1,900.0 | | Matt Cagwin | | | 525.0 | 1,050.0 | | | | | | | | | | 2/23/2023 | 8/1/2022 | | | 1,527 | 5,091 | 10,182 | | | | 67.8 | | | 2/22/2023 | 2/22/2023 | | | 9,591 | 31,971 | 63,942 | | | | 459.1 | | | 2/22/2023 | 2/22/2023 | | | | | | 63,941 | | | 860.0 | | Andrew Walker | | | 495.0 | 990.0 | | | | | | | | | | 2/23/2023 | 3/16/2022 | | | 3,168 | 10,560 | 21,120 | | | | 140.6 | | | 2/22/2023 | 2/22/2023 | | | 5,353 | 17,844 | 35,688 | | | | 256.2 | | | 2/22/2023 | 2/22/2023 | | | | | | 35,688 | | | 480.0 | | Benjamin Adams | | | 405.0 | 810.0 | | | | | | | | | | 2/22/2023 | 2/22/2023 | | | 5,799 | 19,331 | 38,662 | | | | 277.6 | | | 2/22/2023 | 2/22/2023 | | | | | | 38,662 | | | 520.0 | | Giovanni Angelini | | | 442.3 | 884.6 | | | | | | | | | | 2/23/2023 | 2/23/2022 | | | 1,970 | 6,567 | 13,134 | | | | 87.4 | | | 2/22/2023 | 2/22/2023 | | | 3,747 | 12,491 | 24,982 | | | | 179.4 | | | 2/22/2023 | 2/22/2023 | | | | | | 24,982 | | | 336.0 | | Jean Claude Farah | | | 550.0 | 1,100.0 | | | | | | | | | | 2/23/2023 | 2/23/2022 | | | 4,649 | 15,496 | 30,992 | | | | 206.3 | | | 2/22/2023 | 2/22/2023 | | | 4,684 | 15,614 | 31,228 | | | | 224.2 | | | 2/22/2023 | 2/22/2023 | | | | | | 31,227 | | | 420.0 |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
Footnotes:
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (1) These amounts consist of the target and maximum cash award levels set in 2023 under the Annual Incentive Plan. The amount actually paid to each NEO is included in the Non-Equity Incentive Plan Compensation column in the 2023 Summary Compensation Table. Please see “Compensation Discussion and Analysis” for further information regarding the Annual Incentive Plan. |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (2) These amounts represent the threshold, target and maximum PSUs granted under the Long-Term Incentive Plan. As noted above, with respect to the 2022 and 2023 PSUs, the Compensation Committee establishes annual performance goals for each year of the three-year performance period at the beginning of each applicable year during the performance period. In accordance with FASB ASC Topic 718, reported in this table is one-third of the full number of shares subject to the 2022 and 2023 PSUs for which target financial performance goals were established in 2023. Accordingly, in accordance with FASB ASC Topic 718, only 143,181 of the 429,541 shares (at target) subject to the 2023 PSU award granted to Mr. McGranahan on February 23, 2023 are reflected in this table, with the remaining shares subject to Mr. McGranahan’s 2023 PSU award to be reflected in the 2024 and 2025 Grants of Plan-Based Awards Tables. For further details regarding the 2023 PSUs granted to our NEOs, please see pages 44-48 of this proxy statement. The 2022 PSUs are generally scheduled to vest on February 23, 2025 (or, in the case of Mr. McGranahan, February 24, 2025, and Mr. Cagwin on August 5, 2025), and the 2023 PSUs are generally scheduled to vest on February 22, 2026 (or, in the case of Mr. McGranahan, February 23, 2026), each subject to the achievement of financial performance metrics during 2022 and 2023, respectively, and a payout modifier (ranging from 75% to 125%) for our TSR performance over the three-year performance periods. |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
To determine vesting level for the 2022 PSUs and 2023 PSUs, financial results for the three-year performance period will be averaged and then multiplied by the TSR payout modifier. In connection with Mr. Farah’s departure and in accordance with his underlying award agreement, Mr. Farah will be eligible to receive prorated vesting of his 2023 PSUs based on actual performance results and his period of service during the vesting period. Please see “Compensation Discussion and Analysis” for further information regarding this award. The PSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to Company common stock subject to the award during the PSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying PSUs.
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (3) These amounts represent RSUs granted under the Long-Term Incentive Plan to the NEOs and which vest in three substantially equal installments on the first, second and third anniversaries of the grant date, provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the underlying equity award agreement. In connection with his departure and in accordance with his underlying award agreement, Mr. Farah was eligible to receive prorated vesting of his 2023 RSUs based on his period of service during the vesting period. Please see “Compensation Discussion and Analysis” for further information regarding these RSU grants. Each RSU award includes cash dividend equivalent rights entitling the recipient to cash dividend equivalents for dividends paid with respect to the Company common stock subject to the award during the RSU vesting period. The cash dividend equivalents are subject to the same vesting conditions as the underlying RSUs. |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (4) This amount represents stock options granted under the Long-Term Incentive Plan to Mr. McGranahan. These options were granted subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant, in each case, provided that Mr. McGranahan is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the underlying equity award agreement. Please see “Compensation Discussion and Analysis” for further information regarding these awards. |
2023 GRANTS OF PLAN-BASED AWARDS TABLE
| (5) The amounts shown in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. In the case of the PSUs, in accordance with FASB ASC Topic 718, the aggregate grant date fair value computed for the 2022 PSUs and 2023 PSUs is based on one-third of the full number of shares subject to the applicable award for which target financial performance goals were established in 2023. The remaining portion of the 2022 PSUs and 2023 PSUs that will be linked to goals for subsequent years will be reported in the Grants of Plan-Based Awards Table for those years in which the goals are established. See Note 16 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the relevant assumptions used in calculating the amounts. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | OPTION AWARDS | | | | STOCK AWARDS | | | | | NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | 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 ($000)(1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($000)(1) | | Devin McGranahan | | 909,091(2) | 13.27 | 2/23/2033 | 143,181(5) | 1,706.7 | | | | | 115,274 | 345,822(3) | 18.62 | 2/24/2032 | 57,287(6) | 682.9 | | | | | 1,074,919 | 1,074,919(4) | 17.70 | 12/27/2031 | | | 286,362(13) | 3,413.4 | | | | | | | | | 171,859(14) | 2,048.6 | | Matt Cagwin | | | | | 63,941(5) | 762.2 | | | | | | | | | 40,726(9) | 485.5 | | | | | | | | | | | 63,942(13) | 762.2 | | | | | | | | | 10,181(14) | 121.4 | | Andrew Walker | | | | | 35,688(5) | 425.4 | | | | | | | | | 14,080(7) | 167.8 | | | | | | | | | | | 35,688(13) | 425.4 | | | | | | | | | 21,120(14) | 251.8 | | Benjamin Adams | | | | | 38,662(5) | 460.9 | | | | | | | | | 55,929(10) | 666.7 | | | | | | | | | | | 38,662(13) | 460.9 | | Giovanni Angelini | | | | | 24,982(5) | 297.8 | | | | | | | | | 26,534(8) | 316.3 | | | | | | | | | 8,756(6) | 104.4 | | | | | | | | | 4,849(11) | 57.8 | | | | | | | | | 7,565(12) | 90.2 | | | | | | | | | | | 24,982(13) | 297.8 | | | | | | | | | 13,134(14) | 156.6 | | Jean Claude Farah | 44,818 | | 19.27 | 2/19/2025 | 31,227(5) | 372.2 | | | | | 10,127 | | 15.99 | 2/20/2024 | 20,662(6) | 246.3 | | | | | | | | | 19,149(11) | 228.3 | | | | | | | | | 16,596(12) | 197.8 | | | | | | | | | | | 31,228(13) | 372.2 | | | | | | | | | 30,992(14) | 369.4 |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (1) The market value of shares or units of stock that have not vested reflects the closing stock price of $11.92 per share on December 29, 2023. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (2) These options were awarded on February 23, 2023, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (3) These options were awarded on February 24, 2022, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (4) These options were awarded on December 27, 2021, subject to vesting in 25% increments on each of the first through fourth year anniversaries of the date of grant; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (5) Represents RSUs that are scheduled to vest in three substantially equal installments on the first, second and third anniversaries of the grant date commencing on February 22, 2023 (or, in the case of Mr. McGranahan, February 23, 2023); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. In connection with Mr. Farah’s separation from the Company, Mr. Farah received prorated vesting of his 2023 RSU award in accordance with the terms of his underlying award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (6) Represents RSUs that are scheduled to vest in three substantially equal installments on the first, second and third anniversaries of the grant date commencing on February 23, 2022 (or, in the case of Mr. McGranahan, February 24, 2022); provided that the executive is still employed by the Company on the vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. In connection with Mr. Farah’s separation from the Company, Mr. Farah received prorated vesting of his 2022 RSU award in accordance with the terms of his underlying award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (7) Represents RSUs that were awarded on April 18, 2022, which vest in three substantially equal installments on the first, second and third anniversaries of the grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (8) Represents RSUs that were awarded on May 6, 2022, which vest on the second anniversary of the grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (9) Represents RSUs that were awarded on August 5, 2022, which vest in three substantially equal installments on the first, second and third anniversaries of the grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (10) Represents RSUs that were awarded on June 1, 2022, which vest in three substantially equal installments on the first, second and third anniversaries of the grant date; provided that the executive is still employed by the Company on the applicable vesting date or as otherwise provided for pursuant to the Executive Severance Policy, the Long-Term Incentive Plan or the equity award agreement. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (11) Represents RSUs that vested on February 18, 2024. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (12) Represents PSUs that vested on February 18, 2024 based on the Company’s revenue and operating margin performance, measured annually during the 2021-2023 performance period. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (13) Based on financial performance target attainment through 2023, the first tranche of the PSUs granted in 2023 which are scheduled to vest on February 22, 2026 (or, in the case of Mr. McGranahan, February 23, 2026) are reported based on the achievement of the maximum performance level. Additionally, excluded from this table are 286,360, 63,940, 35,688, 38,662, 24,982 and 31,227 PSUs (at target) for Mr. McGranahan, Mr. Cagwin, Mr. Walker, Mr. Adams, Mr. Angelini, and Mr. Farah respectively, with respect to the portion of the 2023 PSUs associated with performance goals to be established in 2024 and 2025. To determine vesting level for the 2023 PSUs, results for the three-year performance period will be averaged and then multiplied by the TSR payout modifier. In connection with his separation from the Company, Mr. Farah’s 2023 PSUs will vest on a prorated basis based upon his period of service during the vesting period and actual performance during the performance period. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (14) Based on financial performance target attainment through 2023, the first and second tranches of the PSUs granted in 2022 which are scheduled to vest on February 23, 2025 (or, in the case of Mr. McGranahan, February 24, 2025, and Mr. Cagwin on August 5, 2025) are reported based on the achievement of the 100% performance level. Additionally, excluded from this table are 85,929, 5,091, 10,560, 6,567 and 15,496 PSUs (at target) for Mr. McGranahan, Mr. Cagwin, Mr. Walker, Mr. Angelini, and Mr. Farah, respectively, with respect to the portion of the 2022 PSUs associated with performance goals to be established in 2024. To determine the vesting level for the 2022 PSUs, results for the three-year performance period will be averaged and then multiplied by the TSR payout modifier. In connection with his separation from the Company, Mr. Farah’s 2022 PSUs will vest on a prorated basis based upon his period of service during the vesting period and actual performance during the performance period. |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
The following table provides information concerning the exercise of stock options and vesting of stock awards during 2023 for each of the NEOs.
2023 OPTION EXERCISES AND STOCK VESTED TABLE
2023 OPTION EXERCISES AND STOCK VESTED TABLE
2023 OPTION EXERCISES AND STOCK VESTED TABLE
| NAME | OPTION AWARDS | | STOCK AWARDS | | | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($000) | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($000) | | Devin McGranahan | — | — | 212,259 | 2,976.8 | | Matt Cagwin | — | — | 20,362 | 243.1 | | Andrew Walker | — | — | 7,040 | 77.7 | | Benjamin Adams | — | — | 27,964 | 322.7 | | Giovanni Angelini | — | — | 27,750 | 372.9 | | Jean Claude Farah | — | — | 29,152 | 394.8 |
2023 OPTION EXERCISES AND STOCK VESTED TABLE
The following table provides information regarding compensation that has been deferred by our NEOs pursuant to the terms of our SISP.
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| NAME | EXECUTIVE CONTRIBUTIONS IN LAST FY ($000)(1) | REGISTRANT CONTRIBUTIONS IN LAST FY ($000)(2) | AGGREGATE EARNINGS/ (LOSS) IN LAST FY ($000) | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($000) | AGGREGATE BALANCE AT LAST FYE ($000)(3) | | Devin McGranahan | 148.6 | 66.2 | 82.3 | — | 449.1 | | Matt Cagwin | 173.7 | 10.0 | 32.0 | — | 271.8 | | Andrew Walker | — | — | — | — | — | | Benjamin Adams | — | — | — | — | — | | Giovanni Angelini | — | — | — | — | — | | Jean Claude Farah | — | — | — | — | — |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
Footnotes:
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| (1) These amounts represent deferrals of the NEO’s salary and compensation received under the Annual Incentive Plan and are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the 2023 Summary Compensation Table. |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| (2) These amounts are included in the “All Other Compensation” column in the 2023 Summary Compensation Table. |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| (3) Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for 2022 (in $000): Mr. McGranahan – $90.0; Mr. Cagwin – $56.4. |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| INCENTIVE SAVINGS PLAN |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
We maintain a defined contribution retirement plan (the “Incentive Savings Plan” or “ISP”) for our employees on United States payroll, including each of our NEOs other than Messrs. Angelini and Farah. The ISP is structured with the intention of qualifying under Section 401(a) of the Internal Revenue Code. Under the ISP, participants are permitted to make contributions up to the maximum allowable amount under the Internal Revenue Code. For 2023, each participating NEO was eligible to receive a Company contribution equal to 4% of his or her eligible compensation. During 2023, Mr. Farah participated in the CFE Retirement Fund, which provides for continued coverage under the French State Social Security System for French citizens who work outside of France. On behalf of the employee, the CFE Retirement Fund contributes to the National Retirement Insurance Fund (“CNAV”) allowing the employee to receive pension benefits from the CNAV upon retirement.
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
| SUPPLEMENTAL INCENTIVE SAVINGS PLAN |
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
We maintain a nonqualified supplemental incentive savings plan, the SISP, for certain of our employees on U.S. payroll, including each of our NEOs other than Messrs. Angelini and Farah. Under the SISP, participants may defer up to 80% of their salaries, including commissions and incentive compensation (other than annual bonuses), and may make a separate election to defer up to 80% of any annual bonuses and up to 100% of any performance-based cash awards they may earn. The SISP also provides participants the opportunity to receive credits for matching contributions equal to the difference between the Company contributions that a participant could receive under the ISP but for the contribution and compensation limitations imposed by the Internal Revenue Code, and the Company contributions allowable to the participant under the ISP. Participants are generally permitted to choose from among the mutual funds available for investment under the ISP for purposes of determining the imputed earnings, gains, and losses applicable to their SISP accounts. The SISP is unfunded. Participants may specify the timing of the payment of their accounts by choosing either a specified payment date or electing payment upon separation from service (or a date up to five years following separation from service), and in either case may elect to receive their accounts in a lump sum or in annual or quarterly installments over a period of up to ten years. With respect to each year’s contributions and imputed earnings, the participant may make a separate distribution election. Subject to the requirements of Section 409A of the Internal Revenue Code, applicable Internal Revenue Service guidance, and the terms of the SISP, participants may receive an early payment in the event of a severe financial hardship and may make an election to delay the timing of their scheduled payment by a minimum of five years.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| EXECUTIVE SEVERANCE POLICY |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
In 2023, we maintained the Executive Severance Policy for the payment of certain benefits to senior executives, including each of our NEOs upon termination of employment from the Company and upon a change in control of the Company. As noted above under “Other Elements of Compensation - Severance and Change-in- Control Benefits,” the Executive Severance Policy was amended and restated in February 2023 to make various modifications to the plan, including modifications to align with market practices, as well as to eliminate legacy tax gross-up provisions with respect to change-in-control benefits. Under the Executive Severance Policy, an eligible executive will become eligible for benefits if (i) prior to a change-in-control or more than 24 months following a change-in-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or (ii) on or within 24 months after a changein-control, he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or he or she terminates employment voluntarily for “good reason” (which may arise from a material reduction in title or position, reduction in base salary or bonus opportunity or an increase in the executive’s commute to his or her current principal working location of more than 50 miles without consent). Under the Executive Severance Policy, a change-in-control is generally defined to include:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | The acquisition by a person or entity of 35% or more of either the outstanding shares of the Company or the combined voting power of such shares, with certain exceptions; |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | An unapproved change in a majority of the Board members within a 24-month period; and |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Certain corporate restructurings, including certain mergers, dissolution and liquidation. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The Executive Severance Policy provided for the following severance and change-in-control benefits as of December 31, 2023:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | A lump sum severance payment equal to the eligible executive’s base salary as of their termination date (or, if applicable, the base salary in effect prior to a reduction under circumstances constituting good reason) multiplied by 1.0 (or, in the case of the CEO, 1.5), provided that in the case of an eligible executive who, as of their termination date, has been employed by the Company for six months or less, the amount of severance pay otherwise payable to such individual will be reduced to an amount equal to 0.5 multiplied by the eligible executive’s base severance pay. However, in the event of a change-in-control termination, the eligible executive will be entitled to receive an amount equal to 2.0 multiplied by the sum of the eligible executive’s base salary plus the eligible executive’s target bonus for the year in which the termination date occurs. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | A cash payment equal to the bonus which would have been paid to the eligible executive under the Annual Incentive Plan for the year in which the termination occurs, based on actual performance during such year and prorated based on number of days the eligible executive was employed during such year. No bonus will be payable unless the Compensation Committee certifies that the performance goals under the Annual Incentive Plan have been achieved for the year in which the termination occurs (except for eligible terminations following a change-in-control). |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | A lump sum payment for medical and dental coverage equal to: (i) up to $18,000 for the CEO; (ii) up to $12,000 for all other eligible executives if they have been employed for more than six months; and (iii) up to $6,000 for all other eligible executives if they have been employed by the Company for six months or less. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Outplacement benefits. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Subject to any more favorable treatment set forth in an award agreement, with respect to awards made pursuant to the Long-Term Incentive Plan, if an eligible executive is involuntarily terminated without cause and no change-incontrol has occurred, awards granted pursuant to our Long-Term Incentive Plan generally will vest on a prorated basis based on the period served during the vesting period |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| and, in the case of performance-based awards, based on actual performance, and stock options will remain exercisable until the end of severance period under the Executive Severance Policy, but not beyond the applicable expiration date for the stock options. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | With respect to awards made pursuant to the Long-Term Incentive Plan, if an eligible executive experiences a qualifying termination of employment during the 24 month period following a change-in-control, then all time-vested awards will become fully vested and exercisable as of such termination date, and all performance-vested awards will become fully vested and exercisable effective as of the termination date based on the greater of target or actual performance (as estimated based on performance through the termination date). |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Any benefits triggered by a change-in-control are subject to an automatic reduction to avoid the imposition of excise taxes under Section 4999 of the Internal Revenue Code in the event such reduction would result in a better after-tax result for the executive. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The provision of severance benefits under the Executive Severance Policy is conditioned upon the executive executing an agreement and release which includes, among other things, non-competition and non-solicitation restrictive covenants, as well as a release of claims against the Company. These restrictive covenants vary in duration, but generally do not exceed two years. As discussed in the “Compensation Discussion and Analysis,” Mr. Farah ceased serving as President, Middle East & Asia Pacific, effective as of December 1, 2023, but remained with the Company as a non-executive employee through February 29, 2024 to assist with the transition of his job duties. Upon his departure in February 2024, Mr. Farah (i) became eligible for benefits under the Executive Severance Policy for an involuntary termination other than for death, disability, or cause, and (ii) entered into a Release and Waiver Agreement to memorialize his entitlement to benefits under his employment contract and the Executive Severance Policy as a result of his termination of employment by the Company. Under the terms of the Release and Waiver Agreement, Mr. Farah became eligible to receive statutory end of service gratuity/severance amounts in accordance with local law equal to $971,575. Because the statutory severance amounts exceeded the cash severance under the Executive Severance Policy, Mr. Farah did not receive cash severance under the Executive Severance Policy. In addition, in light of his continued service through February 29, 2024, under the terms of Mr. Farah’s Release and Waiver Agreement, Mr. Farah received a bonus payment equal to $709,500 with respect to the 2023 Annual Incentive Plan. Due to his satisfaction of the age and service requirements under his outstanding equity award agreements, Mr. Farah became eligible for retirement vesting in accordance with the terms of these agreements (estimated value $565,723 based on the closing stock price on December 29, 2023 of $11.92 per share and assuming target payout for the PSUs). Additionally, as noted earlier, Mr. Angelini is subject to an employment agreement. Under the terms of this agreement, upon an involuntary termination of employment, Mr. Angelini is required to receive any notice period required by applicable law or by the provisions of the National Collective Bargaining for executives of the Trade Sector in Italy or, to the extent permissible, to receive an indemnity in lieu of notice. Mr. Angelini’s employment agreement further provides that in the event of his termination of employment, then for six months following this termination, he will be entitled to receive an indemnity equal to 30% of one month of base salary per month, provided that he complies with certain non-competition covenants set forth in his employment agreement during this period. Thirty percent (30%) of this indemnity is payable upon Mr. Angelini’s termination of employment, with the remainder payable upon the expiration of the six-month period. For each of the NEOs serving as executive officers as of December 31, 2023, we have quantified the potential payments upon termination under various termination circumstances in the tables set forth below. These tables assume that the covered termination took place on December 31, 2023. As of December 31, 2023, none of our continuing NEOs were eligible for retirement vesting.
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| TERMINATION FOLLOWING A CHANGE-IN-CONTROL(1) | | | | | | | | | NAME | SEVERANCE ($000)(2) | WELFARE BENEFITS ($000)(3) | LONG-TERM INCENTIVES(4) | | | DEU ACCRUAL ($000) | TOTAL ($000) | | | | | STOCK OPTIONS ($000) | PSUs ($000) | RSUs ($000) | | | | Devin McGranahan | 7,270.0 | 18.0 | — | 8,192.9 | 2,389.6 | 1,130.7 | 19,001.2 | | Matt Cagwin | 2,157.8 | 6.0 | — | 1,325.3 | 1,247.7 | 679.9 | 5,416.7 | | Andrew Walker | 2,277.0 | 12.0 | — | 1,015.7 | 593.2 | 158.7 | 4,056.6 | | Benjamin Adams | 1,774.1 | 12.0 | — | 691.3 | 1,127.6 | 121.7 | 3,726.7 | | Giovanni Angelini | 2,304.4 | — | — | 771.7 | 776.3 | 190.3 | 4,042.7 |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| INVOLUNTARY TERMINATION OTHER THAN FOR DEATH, DISABILITY, OR CAUSE | | | | | | | | | NAME | SEVERANCE ($000)(2) | WELFARE BENEFITS ($000)(3) | LONG-TERM INCENTIVES(4) | | | DEU ACCRUAL ($000) | TOTAL ($000) | | | | | STOCK OPTIONS ($000) | PSUs ($000) | RSUs ($000) | | | | Devin McGranahan | 5,920.0 | 18.0 | — | 1,892.5 | 289.4 | 344.1 | 8,464.0 | | Matt Cagwin | 1,685.3 | 6.0 | — | 85.2 | 98.1 | 21.7 | 1,896.3 | | Andrew Walker | 1,535.1 | 12.0 | — | 214.3 | 59.0 | 37.7 | 1,858.1 | | Benjamin Adams | 1,278.2 | 12.0 | — | — | 194.0 | 26.8 | 1,511.0 | | Giovanni Angelini | 1,419.8 | — | — | 310.6 | 355.8 | 116.9 | 2,203.1 |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| DEATH OR DISABILITY | | | | | | | | | NAME | SEVERANCE ($000) | WELFARE BENEFITS ($000) | LONG-TERM INCENTIVES(4) | | | DEU ACCRUAL ($000) | TOTAL ($000) | | | | | STOCK OPTIONS ($000) | PSUs ($000) | RSUs ($000) | | | | Devin McGranahan | — | — | — | 8,192.9 | 2,389.6 | 1,130.7 | 11,713.2 | | Matt Cagwin | — | — | — | 1,325.3 | 1,247.7 | 679.9 | 3,252.9 | | Andrew Walker | — | — | — | 1,015.7 | 593.2 | 158.7 | 1,767.6 | | Benjamin Adams | — | — | — | 691.3 | 1,127.6 | 121.7 | 1,940.6 | | Giovanni Angelini | — | — | — | 771.7 | 776.3 | 190.3 | 1,738.3 |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
Footnotes:
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| (1) Under the Executive Severance Policy, an eligible executive will become entitled to severance benefits if he or she is involuntarily terminated by the Company other than on account of death or disability or for cause, or he or she terminates employment voluntarily for good reason within 24 months after the date of the change-in-control. |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| (2) In accordance with the Executive Severance Policy, amounts in this column represent severance payments equal to (i) in the case of a qualifying termination where no change-in-control has occurred, the NEO’s base salary as of December 31, 2023 multiplied by 1.0 (or, in the case of Mr. McGranahan, 1.5), plus a prorated portion of the NEO’s bonus for 2023 based on actual performance, and (ii) in the case of a qualifying termination during the 24 month period following a change-in-control, a multiple of 2.0 times the sum of the NEO’s base salary as of December 31, 2023 and the NEO’s target bonus for 2023, plus a prorated portion of the NEO’s bonus for 2023 based on actual performance. This amount also includes, for Mr. Angelini, an amount equal to 15% of Mr. Angelini’s base salary as of December 31, 2023, representing the amount to which he would be entitled for complying with the non-competition covenants under his employment agreement for six months following his termination of employment. |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| (3) Amounts in this column represent a lump sum cash payment for each of the NEOs based upon the health and dental coverage in which each such individual was enrolled as of December 31, 2023. |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| (4) Amounts in these columns reflect the long-term incentive awards to be received upon a termination or a change-in-control calculated in accordance with the Executive Severance Policy and the Long-Term Incentive Plan. In the case of stock grants, the equity value represents the value of the shares determined by multiplying the closing stock price of $11.92 per share on December 29, 2023 by the number of unvested RSUs or, in the case of PSUs, by the number of shares to be awarded based on target achievement. In the case of option awards, the equity value was determined by multiplying (i) the spread between the exercise price and the closing stock price of $11.92 per share on |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| December 29, 2023 and (ii) the number of unvested option shares that would vest following a qualifying termination or termination due to death or disability. The calculation with respect to unvested long-term incentive awards reflects the following additional assumptions under the Executive Severance Policy and the Long-Term Incentive Plan: |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| EVENT | STOCK OPTIONS** | RSUs** | PSUs | | Change-in-control and qualifying termination within subsequent 24-month period | Accelerate | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | Accelerated vesting and award is payable to the extent earned based on the greater of (i) target and (ii) actual performance results Accrued dividend equivalents would be distributed on accelerated PSUs (excluding PSUs with vesting based solely on TSR performance and granted prior to 2022). | | Change-in-control (without termination of employment) | Vesting continues under normal terms | Vesting continues under normal terms | Vesting continues under normal terms | | Involuntary termination without cause (outside the 24-month period following a change-in-control)* *If the NEO would satisfy the age and service requirements for retirement, then the NEO would receive retirement vesting under this termination scenario. | Prorated vesting by grant based on period served during vesting period | Prorated vesting by grant based on period served during vesting period; with respect to awards granted prior to February 22, 2023, if termination occurs prior to the one-year anniversary of the grant date, the awards are forfeited Accrued dividend equivalents would be distributed on accelerated RSUs. | With respect to awards granted prior to February 22, 2023, prorated vesting by grant based on actual performance results and period served during vesting period; if termination occurs prior to the one-year anniversary of the grant date, the awards are forfeited. With respect to awards granted on or after February 22, 2023, prorated vesting calculated on a grant-by-grant basis in accordance with the applicable award agreement. Accrued dividend equivalents would be distributed on accelerated PSUs (excluding PSUs with vesting based solely on TSR performance and granted prior to 2022). | | Death or disability | Accelerate | Accelerate Accrued dividend equivalents would be distributed on accelerated RSUs. | Accelerated vesting and award is payable to the extent earned based on actual performance results Accrued dividend equivalents would be distributed on accelerated PSUs (excluding PSUs with vesting based solely on TSR performance and granted prior to 2022). | | Retirement | Prorated vesting by grant based on period served during vesting period, with an exercise period equal to the earlier of (i) two years post-termination (three years, in the case of the CEO if termination is a severance-eligible event) and (ii) the expiration date | Prorated vesting by grant based on period served during vesting period Accrued dividend equivalents would be distributed on accelerated RSUs. | Prorated vesting by grant based on actual performance results and period served during vesting period Accrued dividend equivalents would be distributed on accelerated PSUs (excluding PSUs with vesting based solely on TSR performance and granted prior to 2022). |
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL TABLES
| ** The new hire awards for Mr. McGranahan provide for accelerated vesting in the event of a termination by the Company other than for cause or by Mr. McGranahan for good reason or in the event of a change in control in which the awards are not assumed by the surviving company. |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. McGranahan, our CEO. To understand this disclosure, we think it is important to give context to our operations. As noted above, The Western Union Company provides people and businesses with fast, reliable, and convenient ways to send money and make payments around the world. As a global organization, approximately 85% of our employees are located outside of the United States, with our employees located in more than 50 countries. We strive to create a competitive global compensation program in terms of both the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market, in order to allow us to provide a competitive total rewards package. Given the leverage of our executive compensation program towards performance-based elements, we expect that our pay ratio disclosure will fluctuate year-to-year based on the Company’s performance against the pre-established performance goals.
Identification of Median Employee
| PAY VERSUS PERFORMANCE | | | | | | | | | | | | YEAR(1) | SUMMARY COMPENSATION TABLE TOTAL FOR MCGRANAHAN ($000)(2) | SUMMARY COMPENSATION TABLE TOTAL FOR ERSEK ($000)(2) | COMPENSATION ACTUALLY PAID TO MCGRANAHAN ($000)(3) | COMPENSATION ACTUALLY PAID TO ERSEK ($000)(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOS ($000)(2) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOS ($000)(3) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON:(4) | | NET INCOME ($000,000) | ADJUSTED REVENUE ($000,000)(6) | | | | | | | | | TOTAL StockHOLDER RETURN ($) | PEER GROUP TOTAL StockHOLDER RETURN ($)(5) | | | | 2023 | 9,966.9 | N/A | 7,603.1 | N/A | 2,071.6 | 2,000.5 | 55.70 | 133.20 | 626.0 | 4,342 | | 2022 | 7,241.7 | N/A | 782.4 | N/A | 1,975.9 | 1,109.0 | 59.44 | 118.77 | 910.6 | 4,512 | | 2021 | 14,117.4 | 10,834.6 | 9,871.5 | 639.4 | 3,277.1 | 1,402.5 | 72.40 | 132.75 | 805.8 | 5,012 | | 2020 | N/A | 10,336.4 | N/A | (7,515.9) | 3,566.7 | 1,069.0 | 85.33 | 98.31 | 744.3 | 4,918 |
Identification of Median Employee
| (3) To calculate compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Messrs. McGranahan and Ersek and for the average of the other NEOs is set forth following the footnotes to this table. |
COMPENSATION ACTUALLY PAID (CAP) VS WESTERN UNION AND PEER GROUP TSR
COMPENSATION ACTUALLY PAID (CAP) VS WESTERN UNION AND PEER GROUP TSR
COMPENSATION ACTUALLY PAID (CAP) VS ADJUSTED REVENUE
COMPENSATION ACTUALLY PAID (CAP) VS ADJUSTED REVENUE
COMPENSATION ACTUALLY PAID (CAP) VS NET INCOME
COMPENSATION ACTUALLY PAID (CAP) VS NET INCOME
Plan Highlights
| • | Annual non-employee director compensation limit, which cannot be amended without stockholder approval; |