DEF 14A of Huron Consulting Group Inc.
Filed Mar 22, 2024 · FY20230001289848-24-000094
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
BOARD OF DIRECTORS The Company’s Restated Certificate of Incorporation previously divided the Company’s board of directors into three classes, with each class being elected to a three-year term. At the 2023 Annual Meeting of Stockholders, the stockholders approved an amendment to the Company's certificate of incorporation to declassify the board of directors. Therefore, the directors nominated to stand for election at the 2024 Annual Meeting will serve a one-year term if elected. The board of directors has nominated C. Mark Hussey, Hugh E. Sawyer and Debra Zumwalt as Class II Directors to be voted upon at the 2024 Annual Meeting. Peter K. Markell, John McCartney, and Ekta Singh-Bushell are Class III Directors serving terms ending at the 2025 Annual Meeting. Joy T. Brown, H. Eugene Lockhart and James H. Roth are Class I Directors serving terms ending at the 2026 Annual Meeting. This Proxy Statement relates only to the solicitation of proxies from the stockholders with respect to the election of the three nominees as Class II Directors and the other matters described herein. The board of directors knows of no reason that Mr. Hussey, Mr. Sawyer or Ms. Zumwalt might be unavailable to serve as Class II Directors, and each has expressed an intention to serve, if elected. If Mr. Hussey, Mr. Sawyer or Ms. Zumwalt is unable to serve, the shares represented by all valid proxies will be voted “FOR” the election of such substitute nominee as the board of directors may recommend. There are no arrangements or understandings between any of the persons nominated to be a Class II Director and any other person pursuant to which any of such nominees were selected. The election of a director requires the affirmative vote of a plurality of the shares of common stock present in person or represented by proxy at the Annual Meeting that are voted, provided that a quorum is represented at the Annual Meeting. A “plurality” means that the individuals who receive the largest number of votes are elected as directors up to the maximum number of directors to be elected at the Annual Meeting. Therefore, abstentions and “broker non-votes” will have no impact on the election of directors. Properly executed proxies submitted pursuant to this solicitation will be voted “FOR” the election of Mr. Hussey, Mr. Sawyer and Ms. Zumwalt as Class II Directors, unless specified otherwise. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF MR. HUSSEY, MR. SAWYER AND MS. ZUMWALT AS CLASS II DIRECTORS.
ABOUT THE BOARD
ABOUT THE BOARD
ABOUT THE BOARD
| Name | Principal Occupation | | Indepen-dent | A | C | N&CG | Tech | F&CA | | C. Mark Hussey Age 63, Director since 2023 | Chief Executive Officer and President, Huron Consulting Group Inc. and Huron Consulting Services, our principal operating subsidiary | Class II 2024 | | | | | | | | Hugh E. Sawyer Age 69, Director since 2018 | Retired Chairman, President and Chief Executive Officer, Regis Corporation | Class II 2024 | • | • | •c | | | • | | Debra Zumwalt Age 68, Director since 2014 | Vice President and General Counsel, Stanford University | Class II 2024 | • | | • | • | • | | | Not Standing for Election | | | | | | | | | | John McCartney Age 71, Director since 2004 | Non-executive Chairman, Huron Consulting Group Inc. | Class III 2025 | • | • | | • | | | | Peter K. Markell Age 68, Director since 2022 | Executive Vice President and CFO, Lifespan Health System | Class III 2025 | • | •c | | • | • | | | Ekta Singh-Bushell Age 52, Director since 2019 | Strategic adviser to DecisionGPS, LLC | Class III 2025 | • | | | •c | • | • | | Joy T. Brown Age 45, Director since 2022 | SVP, Chief Digital Information Officer, Boston Medical Center Health System | Class I 2026 | • | | • | | •c | • | | H. Eugene Lockhart Age 74, Director since 2006 | Chairman Emeritus & General Partner, MissionOG LLC | Class I 2026 | • | • | • | | | •c | | James H. Roth Age 66, Director since 2009 | Vice Chairman, Client Services, Huron Consulting Group Inc.2 | Class I 2026 | | | | | | |
ABOUT THE BOARD
A – Audit Committee c – Chairperson C – Compensation Committee N&CG – Nominating and Corporate Governance Committee Tech – Technology and Information Security Committee F&CA – Finance and Capital Allocation Committee 2 James H. Roth was appointed Vice Chairman, Client Services, of the Board effective January 1, 2023 at which time C. Mark Hussey was appointed Director and Chief Executive Officer. The below table summarizes the core competencies and relevant capabilities that our directors bring to the board. More detailed information on each of the director’s experience, qualifications, attributes and skills is more thoroughly described in the biographies following this table. Huron is currently in the process of determining the appropriate standard for ESG expertise and it is our intention to include this line item in our proxy statement next year.
Education
Education Mr. Hussey received a B.S. in Accountancy from the University of Illinois, Urbana-Champaign and an M.B.A. in Finance from the University of Chicago Graduate School of Business. He holds professional designations as a Chartered Financial Analyst, Certified Management Accountant, and Certified Public Accountant. Through his distinguished career at Huron, Mr. Hussey brings to the board his hands-on perspective of the Company's strategy and operation. Mr. Hussey contributes to the board a unique understanding of the Huron organization, the consulting business, and the businesses of our clients.
Education
| | Hugh E. Sawyer Director since February 2018 Compensation Committee (Chair) Audit Committee (Member) Finance and Capital Allocation Committee (Member) |
Education
Mr. Sawyer served as chairman, president and chief executive officer of Regis Corporation beginning in April 2017, a corporation that owns, franchises and operates beauty salons worldwide, until his retirement in October 2020. Mr. Sawyer previously served as a managing director at Huron, starting in January 2010, and led the Operational Improvement Service Line for Huron's Business Advisory Practice. He has more than 40 years of experience leading operational improvements, turnarounds, mergers and acquisitions and strategic transformations for both public and private companies across a diverse group of industries. While at Huron, he served as interim president and chief executive officer of JHT Holdings, Inc., a provider of specialized transportation and logistics services, from January 2010 to March 2012; as the chief administrative officer of Fisker Automotive Inc. (now known as Fisker Inc.), a manufacturer of hybrid electric vehicles, from January 2013 to March 2013; as chief restructuring officer of Fisker Automotive from March 2013 to October 2013; and as interim president of Euramax International, Inc., a global manufacturer of building products, from February 2014 to August 2015. Including Regis, he has served as the president or chief executive officer of nine companies, including Wells Fargo Armored Service Corporation, The Cunningham Group, Inc., National Linen Service, Inc., Aegis Communications Group, Inc., Allied Holdings, Inc., and Legendary Holdings, Inc.
Board Service
Board Service During the last five years, Mr. Sawyer previously served on the board of Regis Corporation from April 2017 to October 2020. Mr. Sawyer also previously served on the boards of JHT Holdings, Inc. from October 2011 to June 2018, Energy Future Competitive Holdings Company LLC and its subsidiary, Texas Competitive Electric Holdings Company LLC, and on the board of managing trustees of the Edison Mission Energy Reorganization Trust.
Education
Education Mr. Sawyer received a B.A. with honors from the University of Florida and was previously a Certified Turnaround Professional. Mr. Sawyer is a proven executive with more than 40 years of experience leading complex strategic transformations, operational improvement initiatives, turnarounds, and mergers and acquisitions for both public and private companies across a diverse group of industries. He has provided leadership as president or chief executive officer of nine companies. Mr. Sawyer has also served on fourteen public or private boards of directors and as chairman. He has significant governance experience as a member of numerous board committees including audit, compensation, nomination and governance and various special committees.
Education
| | Debra Zumwalt Director since October 2014 Compensation Committee (Member) Nominating and Corporate Governance Committee (Member) Technology and Information Security Committee (Member) |
Education
Since 2001, Ms. Zumwalt has been the vice president and general counsel of Stanford University and is in charge of the legal services provided to the University and its affiliated hospitals with combined annual revenues of over $12 billion. Ms. Zumwalt is a member of the University Cabinet and provides governance, legal and strategic advice to the boards of the University, Stanford Health Care, Lucile Packard Children’s Hospital at Stanford, and Stanford Management Company, which manages over $30 billion in assets. Ms. Zumwalt is also a member of the board of overseers for SLAC National Accelerator Laboratory at Stanford, and a director of SUMIT Holding International, LLC, SUMIT Insurance Company Ltd. and PEAC, a holding company, and insurance companies providing insurance coverage for the Stanford hospitals and physicians. From 1993 to 2001, Ms. Zumwalt was a partner at Pillsbury Winthrop LLP, where she specialized in complex civil litigation and higher education law, and served as managing partner of the Silicon Valley office and a member of the firm’s governing board. Previously, from 1987 to 1993, Ms. Zumwalt was Senior University Counsel at Stanford, responsible for advising and representing the University in connection with congressional hearings, criminal and civil investigations, negotiations and litigation matters. Prior to joining Stanford in 1987, Ms. Zumwalt worked as litigation counsel for Chevron Chemical Company and as a litigation associate for Pillsbury Winthrop LLP in San Francisco.
Board Service
Board Service Ms. Zumwalt currently serves on the board of Exponent, Inc., a publicly-traded engineering and scientific consulting company, and on the board of the American University of Afghanistan. Ms. Zumwalt previously served on other nonprofit boards in education and legal services.
Education
Education Ms. Zumwalt received a B.S. in Political Science from Arizona State University and a J.D. from Stanford Law School. Given the many roles she serves in connection with her position as chief legal officer of a university with three affiliated hospitals, Ms. Zumwalt is uniquely qualified to share with the Huron board her experience with navigating the challenges faced by both higher education and healthcare organizations. Ms. Zumwalt also contributes to the Huron board a perspective on the law and governance through her background as a former partner of a prominent law firm and her current membership on the boards of corporate and academic organizations.
DIRECTORS NOT STANDING FOR ELECTION
DIRECTORS NOT STANDING FOR ELECTION
DIRECTORS NOT STANDING FOR ELECTION
| | Joy T. Brown Director since September 2022 Technology and Information Security Committee (Chair) Compensation Committee (Member) Finance and Capital Allocation Committee (Member) |
DIRECTORS NOT STANDING FOR ELECTION
Joy T. Brown was elected to Huron’s board of directors on September 13, 2022. Ms. Brown is the SVP and Chief Digital Information Officer for Boston Medical Center Health System, responsible for evolving the health system's digital capabilities and improving healthcare access, efficiency, and outcomes. She leads the health system's digital, technology, cybersecurity, and information strategy to enhance operations for patients and members. Ms. Brown served as Chief Data Officer for Verizon's Media business line from September 2020 to February 2022. Previously she led Capital One’s credit card Global Data, Analytics and Machine Learning function helping the company make better credit decisions, optimize operations, and increase customer engagement. Earlier in her career, she spent time at UnitedHealth Group, Vanguard, and had formative experiences at General Electric in the financial services businesses and corporate operations.
Board Service
Board Service Ms. Brown currently serves on the board of directors and audit committee of Tractor Supply Company, a publicly-traded company. She also serves on the board of ESO and ValidiFI.
Education
Education Ms. Brown received her Bachelor of Science in Information Systems and Data Engineering from Virginia Commonwealth University and Master of Business Administration from Saint Joseph’s University in Philadelphia. She also received her Director Certificate from Harvard Business School for her studies in New Era of Governance. Ms. Brown is a technology executive with a successful track record guiding Fortune 100 global organizations through innovative digital transformation in a world where data and artificial intelligence are key drivers of achieving B2B and B2C growth and delivering value to consumers, achieving key business results, increasing stockholder value, establishing consumer-focused 360-degree leading-edge capabilities, and attaining corporate performance objectives. These experiences will enable her to contribute a unique perspective to Huron’s efforts in various industries.
Education
| | John McCartney Director since October 2004 Non-executive Chairman of the Board (May 2010) Audit Committee (Member) Nominating and Corporate Governance Committee (Member) |
Education
Mr. McCartney joined the executive management team of US Robotics in March 1984 as vice president and chief financial officer. At US Robotics, he served in various executive capacities, including as executive vice president, International, until serving as president and chief operating officer from January 1996 until its merger with 3Com Corporation in June 1997. From June 1997 to March 1998, Mr. McCartney held the position of president of 3Com Corporation’s Client Access Unit.
Board Service
Board Service Since July 2019, Mr. McCartney has served as a director of EQT, Corp., the largest natural gas producer in the United States. From July 2019 until May 2020, he served as chairman of the board and currently serves as a member of the nominating and corporate governance and the environmental and public policy committees. Since October 2022, Mr. McCartney has been a director of Granite Ridge Resources, Inc., a publicly-traded company which holds non-operating interests in oil and gas producing leases in various basins throughout the United States. He serves as a member of the audit and compensation committees and as lead independent director since November 2022. From October 2007 to July 2023, Mr. McCartney served as a director of Datatec Limited, a publicly traded networking technology and services company where he most recently served on the nominating committee. From 1998 until May 2004, he served Datatec as vice chairman of the board of directors. In addition, Mr. McCartney served as chairman of the board of trustees of Davidson College from 2004 to 2008.
Education
Education Mr. Roth received a B.A. in Political Science and Economics from Vanderbilt University and an M.B.A. from Southern Methodist University. Through his distinguished career as both an officer and consultant at Huron, Mr. Roth brings to the board his hands-on perspective of the strategy and operations of institutions of higher education and academic medical centers, including their research facilities. Twice named by Consulting magazine as one of the Top 25 Most Influential Consultants, Mr. Roth contributes to the board a unique understanding of the Huron organization, the consulting business, and the businesses of our clients.
Education
| | Ekta Singh-Bushell Director since May 2019 Nominating and Corporate Governance Committee (Chair) Technology and Information Security Committee (Member) Finance and Capital Allocation Committee (Member) |
Education
Ms. Singh-Bushell was the chief operating officer, executive office at the Federal Reserve Bank of New York from 2016 to 2017. Prior to that, she spent over 17 years at Ernst & Young (“EY”), where she served in various leadership roles, including Global Coordinating Partner, Americas Innovation & Digital Strategy Leader, Global/Americas Tech Ops Executive, Global Information Security Officer and Northeast Advisory People Leader. During her tenure at EY she led transformations of companies across multiple industries through technological and digital change. Cranfield University nominated her to the 2017 Female FTSE Index: 100 Women to Watch, and in 2013, the Council of Urban Professionals recognized her contributions with a Catalyst Change Agent award.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS The Huron non-employee director compensation program is designed to enhance our ability to attract and retain highly qualified directors and to align their interests with the long-term interests of our stockholders. The program consists of both a cash component, designed to compensate non-employee directors for their service on the board and its committees, and an equity component, designed to align the interests of non-employee directors and stockholders. Neither Mr. Roth nor Mr. Hussey receive compensation for their service on the board. Effective January 1, 2023, the director compensation program is comprised of the following elements:
COMPENSATION OF DIRECTORS
| Compensation Element | Compensation | | | Non-executive Chairman - $160,000 | | Annual cash retainer(1)(2) | Vice Chairman - $85,000(3) | | | All non-employee directors including the Chairman - $75,000 | | Annual restricted stock grant | $170,000 in the form of restricted stock(4) | | Annual committee chairperson retainer | Audit - $25,000 | | | Compensation - $20,000 | | | Nominating and Corporate Governance - $15,000 | | | Technology and Information Security - $15,000 | | | Finance and Capital Allocation - $15,000 | | Annual committee membership retainer, other than the chair | Audit - $10,000 | | | Compensation - $10,000 | | | Nominating and Corporate Governance - $7,500 | | | Technology and Information Security - $7,500 | | | Finance and Capital Allocation - $7,500 | | Stock ownership requirement | Non-employee directors are expected to own Huron stock equal to five times the annual cash retainer of $75,000 |
COMPENSATION OF DIRECTORS
(1)The non-executive chairman of the board is eligible for committee chair and committee membership fees. (2)All directors are reimbursed for out-of-pocket expenses for attending board and committee meetings. (3)Mr. Roth, Vice Chairman, client services, is an employee, therefore, is not eligible for the Vice Chairman retainer. (4)Granted on the date of the Company’s annual meeting and priced based upon the closing stock price on the date of grant which vests ratably over 12 quarters. If a new non-employee director joins the board after the Company’s annual meeting, the award is prorated as follows: •If the new director joins within six months of the Company’s annual meeting, the director will receive half of the annual grant. •If the new director joins over six months after the Company’s annual meeting, no grant will be made. Directors are eligible to participate in our deferred compensation plan, which is described under the caption “EXECUTIVE COMPENSATION—2023 Nonqualified Deferred Compensation.” One director participated from 2013 through 2018, and a second director elected to participate beginning in 2015.
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE The following table summarizes the fees paid and the aggregate grant date fair value of shares granted to each of the non-employee directors in 2023. Directors who are also officers or employees of the Company receive no compensation for duties performed as a director. For a discussion of Mr. Roth's senior management agreement and employee compensation for 2023, please see the section of this Proxy Statement titled Certain Relationships and Related Transactions. For a discussion of Mr. Hussey's senior management agreement and employee compensation for 2023, please see the section of this Proxy Statement titled Executive Compensation.
DIRECTOR COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($)(6) | Stock Awards ($)(1) | Total ($) | | Joy T. Brown(2) | 102,000 | 170,024 | 272,024 | | H. Eugene Lockhart(3) | 119,750 | 170,024 | 289,774 | | Peter K. Markell(4) | 107,750 | 170,024 | 277,774 | | John McCartney(3)(5) | 247,500 | 170,024 | 417,524 | | Hugh E. Sawyer(3) | 113,500 | 170,024 | 283,524 | | Ekta Singh-Bushell(3) | 116,000 | 170,024 | 286,024 | | Debra Zumwalt(3) | 111,000 | 170,024 | 281,024 |
DIRECTOR COMPENSATION TABLE
(1)This column represents the aggregate grant date fair value of shares granted to our directors in 2023. Grant date fair value is based on the closing price of Huron stock on the day of grant. Each of these grants vests ratably over the 12 calendar quarters following the grant. (2)On December 31, 2023, Ms. Brown held 4,209 unvested restricted stock units. (3)On December 31, 2023, each of Mr. Lockhart, Mr. McCartney, Mr. Sawyer, Ms. Singh-Bushell, and Ms. Zumwalt held 500 shares of unvested restricted stock and 3,358 unvested restricted stock units. (4)On December 31, 2023, Mr. Markell held 5,146 unvested restricted stock units. (5)Mr. McCartney has access to office space at the Company’s principal business offices in Chicago. The Company does not incur any incremental costs in connection with the provision of this office space. (6)Includes cash board fees deferred by non-employee directors under our Deferred Compensation Plan, as further described under the heading "Deferred Compensation Plan" within the Compensation Discussion and Analysis of this Proxy Statement. During 2023, Ms. Zumwalt was the only non-employee director to make deferrals of her cash board fees in the Deferred Compensation Plan. Ms. Zumwalt and Mr. McCartney have account balances in the Deferred Compensation Plan. The earnings on Ms. Zumwalt's and Mr. McCartney’s account balances in the Deferred Compensation Plan were $154,737.68 and $196,485.36, respectively, in 2023.
COMPENSATION BEST PRACTICES
| | What We Do | | What We Do Not Do | | ✓ | Align pay with performance with a significant majority of compensation at-risk and based on objective financial performance measures | ✗ | No excise tax gross-ups | | ✓ | Appropriately balance short-term and long-term incentives | ✗ | No hedging or pledging of Huron stock | | ✓ | Align executive compensation with stockholder returns through performance-based equity grants that include minimum time- vesting requirements | ✗ | No stock grants are "timed" or awards to be repriced | | ✓ | Establish rigorous, achievable, and predominantly quantitative goals, that ensure focus, measurable progress and overall organizational advancement | ✗ | No material executive perquisites not commonly available to the broader Huron employee population or to similarly situated key management employees |
COMPENSATION BEST PRACTICES
| ✓ | Require the annual incentive program funding to be capped at target payout if total shareholder return for the year is negative | ✗ | No "evergreen" features or liberal share counting provisions within our equity plan | | ✓ | Perform an annual risk assessment of our compensation programs | ✗ | No automatic grants to any participant within the equity plan | | ✓ | Maintain robust stock ownership guidelines | | | | ✓ | Provide only double-trigger benefits in a change of control event | | | | ✓ | Maintain a clawback policy providing for recoupment of incentive-based compensation | | | | ✓ | Retain an independent compensation consultant to the board | | | | ✓ | Administer the equity plans through the Compensation Committee, which is comprised entirely of independent directors | | | | ✓ | Mitigate potential dilution of equity award grants through our share repurchase program | | | | ✓ | Solicit investor feedback on our compensation program and potential enhancements through an extensive stockholder engagement program | | |
EXECUTIVE COMPENSATION PAY COMPONENTS
| Compensation Element | Form | Compensation Philosophy Alignment | What it Rewards | | Base Salary | 100% Cash | Provide market competitive base pay that reflects role and responsibilities, ability to effect Company results, executive's experience and individual performance. | Accomplishment of day-to-day responsibilities, individual performance and the executive's experience and the competitiveness of the talent market. | | Annual Incentive | 100% Cash | Set challenging, but attainable, goals that motivate exceptional performance against the annual operating plan and serves as key compensation vehicle for differentiating performance each year. | Achievement of predefined financial, operational and strategic measures that are commensurate with performance against the annual operating plan. | | Long-Term Incentive | 70% PSUs | Focus executives on the achievement of strong performance against long-term strategic and financial goals to directly align executive's interests with the long-term interests of stockholders. | Alignment of stockholder interests with the attainment of long-term financial goals and share price appreciation. | | | 30% RSUs | Provide for long-term executive retention. | |
Role of Compensation Committee
Role of Compensation Committee The Compensation Committee is primarily responsible for administering our executive compensation program in a manner consistent with our compensation philosophy and objectives. The principal functions of the Compensation Committee are to: •set salaries and annual and long-term incentive levels for the CEO and other named executive officers, so that the program is promoting stockholder value; •evaluate annually the performance of the CEO (in coordination with the full board) and review the CEO evaluation of the other named executive officers; •review and approve the design and competitiveness of our executive compensation plans, including benefits and perquisites; •review the design, competitiveness and pay equity of our Company-wide compensation plans, including benefits; •review and approve the total cash and stock bonus pools for the organization, and approve the individual incentive payout awards for the named executive officers; •review director compensation and make recommendations to the board; •review and approve goals used for the annual and long-term incentive plans; •retain or terminate, in its sole discretion, any independent compensation consultant used to assist the Compensation Committee; •review and evaluate compensation arrangements to assess whether they could encourage undue risk-taking; and •create a Compensation Committee report on executive compensation for inclusion in the Proxy Statement. The Compensation Committee exercises its judgment on an independent basis and works closely with our board of directors and the executive management team in making many of its decisions. To support its decision making, the Compensation Committee has retained the services of an independent compensation consultant. The Compensation Committee has the sole authority to amend or terminate the services of its independent consultant. The Compensation Committee is comprised entirely of independent directors.
Role of Management
Role of Management Our CEO, along with the chief human resources officer and other members of senior leadership, support the Compensation Committee's design, review and evaluation of the executive compensation program. The executive officers provide recommendations for the financial and strategic measures within the annual incentive and long-term incentive programs, which are grounded in Huron's long-term growth strategy and market data. Additionally, our CEO provides a review of each named executive officer's annual performance but does not participate in the decisions related to his own compensation. The Compensation Committee carefully reviews and deliberates all recommendations provided by management. Additionally, to support the Compensation Committee's review and approval of the total cash and stock bonus pools available for the organization, and to ensure the Company-wide compensation programs appropriately balance stockholder returns and employee retention, the executive officers regularly review Company, Industry and Capability performance with the Compensation Committee.
Role of the Peer Group
Role of the Peer Group The Compensation Committee reviews external market data to inform its decisions about executive compensation, specifically to determine a range of pay, inclusive of salary, target annual incentives, and target long-term incentive awards. Total direct compensation, as well as the components thereof, are compared to similar roles and responsibilities for those of the Compensation Committee-approved peer group described below, as well as Radford Global Technology survey data for companies with comparable total revenues as Huron. Individual target pay is benchmarked against these external market sources, but can and does vary based on several factors including each individual executive officer's experience, qualifications and performance. We note that the Compensation Committee does not target NEOs’ pay to a specified percentile relative to the below Compensation Peer Group, but rather reviews peer group compensation data for each element of compensation, including base salary, cash annual incentive, long-term incentive targets, and target total compensation (target total cash plus long-term incentive compensation). The peer group is comprised of U.S.-based companies who are business-to-business service providers in the Research and Consulting Services, Human Resource and Employment Services, Health Care Technology, Health Care Services, or IT Consulting and Other Services industry sectors with revenues within 0.1x to 5.5x of Huron’s revenues and market capitalization within 0.1x to 5.5x of Huron’s market capitalization as of the review date. Annually, the Compensation Committee reviews the composition of the peer group to determine whether any changes should be made. For 2023 executive compensation decisions, the Compensation Committee approved the addition of two new peers, Dun & Bradstreet Holdings, Inc. and Evolent Health, Inc. The addition of these two companies further aligns Huron's strategy of accelerating growth in our Healthcare and Education core markets and advancing our digital and analytics platform of technology services and products with the offerings of our peer group as both of these companies are digital-focused with offerings in our core industries. Below is the list of fourteen (14) companies that comprised our peer group for 2023 compensation.
Role of the Peer Group
| 2023 Peer Group | | | CBIZ, Inc. | ICF International, Inc. | | CRA International, Inc. | Korn Ferry | | Dun & Bradstreet Holdings, Inc. | LiveRamp Holdings, Inc. | | Evolent Health, Inc. | NextGen Healthcare, Inc. | | Exponent, Inc. | Premier, Inc. | | FTI Consulting Inc. | Resources Connection, Inc. | | Heidrick & Struggles International, Inc. | Veradigm, Inc. |
Role of the Peer Group
Huron's relative positioning of revenue and market capitalization to the selected peer group as of October 2022 when the peer group was approved:
2024 Peer Group and Pay Positioning
2024 Peer Group and Pay Positioning During the Compensation Committee's annual review of the peer group in October 2023, additional enhancements to the peer group were made for the 2024 executive compensation cycle. A comprehensive examination of our business results and growth strategy constituted the cornerstone for our 2023 analysis, culminating in a refinement of the industry peer group composition to recognize Huron's expanding portfolio of software and digital services offerings, which now represent over 40% of the Company's revenues. For 2024 executive compensation decisions, the Compensation Committee approved the addition of two new peers, Perficient, Inc. and R1 RCM, Inc., as well as the removal of Veradigm, Inc. Below is the approved list of fifteen (15) companies that comprised our peer group for 2024 compensation as well as Huron's relative positioning of revenue and market capitalization to the selected peer group as of October 2023 when the peer group was approved. We note Huron's relative positioning within this peer group and the median total direct compensation of the executive officers within the peer group, was not materially impacted by the changes made. Below is the list of 15 companies that comprises our peer group for 2024 compensation.
2024 Peer Group and Pay Positioning
| 2024 Peer Group | | | CBIZ, Inc. | Korn Ferry | | CRA International, Inc. | LiveRamp Holdings, Inc. | | Dun & Bradstreet Holdings, Inc. | NextGen Healthcare, Inc. | | Evolent Health, Inc. | Premier, Inc. | | Exponent, Inc. | Perficient, Inc. | | FTI Consulting Inc. | R1 RCM, Inc. | | Heidrick & Struggles International, Inc. | Resources Connection, Inc. | | ICF International, Inc. | |
2024 Peer Group and Pay Positioning
Huron's relative positioning of revenue and market capitalization to the selected peer group as of October 2023 when the peer group was approved:
2023 NEO Target Compensation Opportunity
| Name and Position | Base Salary | Target Annual Incentive Opportunity (% of Salary) | Target Long-Term Incentive Opportunity (% of Salary) | | C. Mark Hussey | $925,000 | 125% | 225% | | J. Ronald Dail | $650,000 | 90% | 125% | | John D. Kelly | $575,000 | 100% | 175% | | Ernest W. Torain, Jr. | $450,000 | 75% | 125% |
2023 Annual Incentive Program
2023 Annual Incentive Program The Compensation Committee continues to believe that the NEOs should be critically focused on improving stockholder value by driving and executing on the growth strategy of the organization and delivering results against the annual operating plan. As such, the Compensation Committee retained Organic Revenue Growth4 and Adjusted EBITDA Margin as the primary annual incentive financial metrics, and aligned the strategic measures to the core principles of Huron's business strategy. As in the prior year, the combination of the financial metrics and the enumerative strategic measures results in approximately 90% of the total annual incentive opportunity tied to metrics that use predefined quantitative goals. Performance against each metric is measured independently. Each performance metric is measured in a range of 0 to 200%, with threshold performance achieving a 50% payout. While the annual incentive program requires the annual incentive payout to be capped at target if total shareholder return (TSR) is not positive for the year; the cap was not triggered in 2023 as TSR was 41.6%. Additional detail on the 2023 annual incentive goals and performance achieved follows. As a result of the exceptional performance achieved, the Compensation Committee approved a total payout of 145% of target for the 2023 annual incentive program.
2023 Annual Incentive Goals
2023 Annual Incentive Goals
2023 Annual Incentive Goals
| Performance Measure | Weighting | Threshold | Target | Maximum | Actual | Payout % of Target | | Organic Revenue Growth | 40% | $1,175M | $1,250M | $1,360M | $1,362M | 200% | | Adjusted EBITDA Margin | 35% | 11.3% | 12.3% | 13.3% | 12.3% | 100% | | Strategic Measures | 25% | Varies by measure - details below | | | | 120% | | Total | 100% | | | | | 145% |
2023 Strategic Measures
2023 Strategic Measures The portfolio of strategic measures applied to the 2023 annual incentive program directly aligned to the growth strategy of the organization through the following four principles: Grow Revenue, Grow Margins, Grow People and Financial Strength. Each of these goal's performance was assessed against pre-approved, defined measures of success, of which a majority were objective, quantifiable goals. In total, 60% of the strategic measures within the 2023 annual incentive program were assessed against objective, quantifiable goals. The following chart outlines the 2023 goals as well as their weighting, alignment to strategy and actual levels of achievement.
2023 Long-Term Incentive Program
2023 Long-Term Incentive Program Under the 2023 long-term incentive program, which was unchanged from the prior year, 70% of the target long-term incentive program value was granted in the form of performance share units (PSUs) and 30% was granted in the form of restricted stock units (RSUs), both with a three-year vesting period. The final payout of the PSUs granted in 2023 will be determined at the end of the full three-year performance period based on performance against predetermined, cumulative three-year goals for Adjusted Diluted EPS and Revenue Growth, with fifty-fifty weighting. As in prior years, we cannot disclose the details of the three-year goals at this time due to their material, non-public nature.
Previously Awarded Performance-Based Long-Term Incentive Programs
Previously Awarded Performance-Based Long-Term Incentive Programs
2021-2023 Performance Cycle
2021-2023 Performance Cycle Given the uncertainty of the impact of the COVID-19 pandemic and the Compensation Committee's desire to still provide a competitive earning opportunity aligned with stockholder value during that unprecedented period, the 2021 PSUs were granted under a temporarily modified long-term incentive program. The 2021-2023 long-term incentive program set goals annually for both Adjusted Diluted EPS and Revenue Growth, and then applied a multiplier in a range of 90% to 110% based on performance against Compensation Committee-approved three-year Revenue Growth goals. The final payout was determined at the end of 2023 by averaging each year's actual annual performance against the annual target set for that year, and then applying the three-year Revenue Growth multiplier. See below for details on the 2023 annual goals and the three-year Revenue Growth goals approved by the Compensation Committee. The 2021 and 2022 annual goals were reported in the proxy statements covering the respective performance period.
2021-2023 Performance Cycle
| Performance Measure | Weighting | Threshold | Target | Maximum | Actual | Payout % of Target | | 2023 Annual Goals | | | | | | | | Adjusted Diluted EPS | 50% | $3.60 | $4.00 | $4.50 | $4.91 | 200% | | Revenue Growth | 50% | $1,210M | $1,250M | $1,315M | $1,362M | 200% | | Total | 100% | | | | | 200% | | 2021-2023 Cumulative Revenue Growth Goals | | | | | | | | Revenue Growth | 100% | $2,632M | $2,738M | $2,847M | $3,400M | 110% |
2021-2023 Performance Cycle
| Performance Measure | Overall Weighting | Adjusted Diluted EPS Payout % of Target Earned (50% Weighting) | Revenue Growth Payout % of Target Earned (50% Weighting) | Total Payout % of Target Earned | | Annual Performance | | | | | | 2021 | 33% | 122% | 170% | 146% | | 2022 | 33% | 166% | 200% | 183% | | 2023 | 33% | 200% | 200% | 200% | | Total | 100% | | | 176% | | 2021-2023 Cumulative Revenue Growth Multiplier | | | | | | Revenue Growth | | | | 110% | | Total | | | | 194% |
2024 EXECUTIVE COMPENSATION DETAILS
| Name and Position | Base Salary | Target Annual Incentive Opportunity (% of Salary) | Target Long-Term Incentive Opportunity (% of Salary) | | C. Mark Hussey | $950,000 | 140% | 375% | | J. Ronald Dail | $675,000 | 90% | 140% | | John D. Kelly | $600,000 | 115% | 220% |
Employment Agreements
Employment Agreements Huron has entered into agreements with each of the named executive officers that provide for benefits upon termination of employment under certain circumstances, including in connection with a change of control of the Company. Huron provides these benefits as a means of remaining competitive, retaining executive officers, focusing executive officers on stockholder interests when considering strategic alternatives and providing income protection in the event of involuntary loss of employment. In general, these arrangements provide for severance benefits upon Huron’s termination of the executive’s employment without cause or resignation by the executive for good reason (constructive termination). In the event of a change of control of Huron and if the executive’s employment is terminated without cause or he resigns for good reason, the executive will receive enhanced severance benefits. Huron provides these enhanced severance benefits only with a "double trigger" because the Company believes that the executive officers would be materially harmed in a change of control only if it results in reduced responsibilities or compensation or loss of employment for the executive. Huron employment agreements do not provide for any gross-ups. More information on our use of employment agreements, including the estimated payments and benefits payable to the named executive officers, is provided under the "Potential Payments Upon Termination or Change of Control" section of this Proxy Statement.
Tax Considerations
Tax Considerations Section 162(m). Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation paid in excess of $1 million for any fiscal year to a company’s "covered employees". The Compensation Committee expects in the future to authorize compensation in excess of $1 million to employees that will not be deductible under Section 162(m) when it believes doing so is in the best interests of the Company and its stockholders. The Company considers it important to retain the flexibility to design a compensation program that is in the best long-term interests of the Company and its stockholders, even if certain payments under the program are not deductible under Section 162(m). Section 280G. Section 280G of the Code disallows a company’s tax deduction for certain payments in connection with a change of control defined as "excess parachute payments," and Section 4999 of the Code imposes a 20% excise tax on certain persons who receive excess parachute payments. The senior management agreements in effect ensure that any covered payments would be reduced to the extent necessary so that no portion of such payments is subject to the excise tax.
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
2023 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Non Equity Incentive Plan Compensation ($) | Stock Awards ($)(2)(3)(4) | All Other Compensation ($)(5) | Total Compensation ($) | | C. Mark Hussey(6) President and Chief Executive Officer | 2023 | 919,792 | 430,000 | 1,676,563 | 2,642,725 | 37,323 | 5,706,403 | | | 2022 | 800,000 | 430,000 | 1,104,000 | 1,643,228 | 38,603 | 4,015,831 | | | 2021 | 800,000 | — | 800,000 | 840,005 | 35,394 | 2,475,399 | | J. Ronald Dail(7)(8)(9) Executive Vice President and Chief Operating Officer | 2023 | 650,000 | — | 964,316 | 812,465 | 26,923 | 2,453,704 | | | 2022 | 612,500 | — | 766,487 | 882,726 | 26,154 | 2,287,867 | | John D. Kelly Executive Vice President, Chief Financial Officer and Treasurer | 2023 | 572,917 | 205,000 | 833,750 | 1,322,087 | 29,956 | 2,963,710 | | | 2022 | 525,000 | 205,000 | 652,050 | 1,029,306 | 29,034 | 2,440,390 | | | 2021 | 525,000 | — | 472,500 | 472,463 | 26,977 | 1,496,940 | | Ernest W. Torain, Jr.(10) Executive Vice President, General Counsel and Corporate Secretary | 2023 | 447,917 | 80,000 | 489,375 | 692,411 | 34,516 | 1,744,219 | | | 2022 | 398,333 | 80,000 | 276,000 | 516,327 | 33,486 | 1,304,146 | | | 2021 | 360,000 | — | 180,000 | 194,414 | 31,024 | 765,438 |
2023 SUMMARY COMPENSATION TABLE
(1)The bonus amounts paid in 2022 and 2023 represent the first and second installments of the three-year cash retention awards, which were awarded in 2021 to retain the NEOs continued leadership through the COVID-19 pandemic and in recognition of their exceptional performance during 2020.The final installment was paid in March 2024. (2)This column represents the aggregate grant date fair value of restricted stock and/or performance share unit and/or performance-based stock option awards. The value of the performance share units and performance-based stock options in the table is consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718. (3)The stock awards granted in 2022 and 2023 include the full value awarded under the 2022 and 2023 long-term incentive programs and one-third of the overall value awarded as performance share units under the 2021 long-term incentive program. The 2021 long-term incentive program retains a three-year cumulative performance cycle, but sets annual goals for both Adjusted Diluted EPS and Revenue Growth. Upon the Compensation Committee's approval of the 2022 and 2023 annual goals for the 2021 long-term incentive program, one-third of the overall value awarded in 2021 was deemed granted in February 2022 and February 2023 pursuant to FASB ASC Topic 718. (4)The stock awards granted in 2021 include one-third of the overall value awarded as performance share units under the 2021 long-term incentive program as the Compensation Committee had not yet approved the 2022 and 2023 annual goals against which the second and third components of the award would be measured. The 2022 and 2023 annual goals were approved by the Compensation Committee in February 2022 and February 2023, respectively, at which time the shares were deemed granted pursuant to FASB ASC Topic 718. (5)All Other Compensation for 2023 is detailed in the table below. (6)Mr. Hussey served as president and chief operating officer through June 30, 2022, at which time he was succeeded by Mr. Dail effective July 1, 2022. Mr. Hussey continued to serve as president through December 31, 2022, and effective January 1, 2023, began serving as president and chief executive officer. (7)Mr. Dail has served as executive vice president and chief operating officer since July 1, 2022, prior to which he led Huron’s healthcare performance improvement business unit. (8)Mr. Dail's 2022 non-equity incentive plan compensation includes his earned non-equity incentive compensation under the NEO annual incentive plan and Healthcare Managing Director annual incentive plan, prorated for his time served as a managing director in the Healthcare business unit. Additionally, this total includes $122,837 earned under the Healthcare Managed Services incentive program, a commission-based program for the Healthcare Managed Services offering that is determined based on the revenue generated on certain engagements which Mr. Dail is eligible for based on his prior role as the leader of Huron's healthcare performance improvement business unit through July 1, 2022. Mr. Dail is eligible for this incentive compensation through 2026 as per the terms of the Healthcare Managed Services incentive program structure. (9)Mr. Dail's 2023 non-equity incentive plan compensation includes his earned non-equity incentive compensation under the NEO annual incentive plan and $116,066 earned under the Healthcare Managed Services incentive program, a commission-based program for the Healthcare Managed Services offering that is determined based on the revenue generated on certain engagements which Mr. Dail is eligible for based on his prior role as the leader of Huron's healthcare performance improvement business unit through July 1, 2022. Mr. Dail is eligible for this incentive compensation through 2026 as per the terms of the Healthcare Managed Services incentive program structure. (10)On March 11, 2024, Huron announced that Mr. Torain was leaving the Company effective March 15, 2024 and Hope Katz, Corporate Vice President, Legal Affairs and Corporate Secretary would assume the majority of Mr. Torain's responsibilities. Additional information is provided above under the caption "Executive Officers - Executive Leadership Transitions."
2023 GRANTS OF PLAN-BASED AWARDS
2023 GRANTS OF PLAN-BASED AWARDS The following table summarizes the grants of equity awards and annual cash incentive awards for 2023 to each named executive officer.
2023 GRANTS OF PLAN-BASED AWARDS
| | | | Estimated Future Payouts Under Non Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Name | Grant Date | Date of Compensation Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock (#) | Full Grant Date Fair Value of Each Award ($)(5) | | C. Mark Hussey | 2/23/2023 | 2/23/2023 | — | — | — | 586 | 5,210 | 11,462 | — | 561,498(2) | | | 3/1/2023 | 2/23/2023 | — | — | — | 4,467 | 17,867 | 35,734 | — | 1,456,875(3) | | | 3/1/2023 | 2/23/2023 | — | — | — | — | — | — | 7,657 | 624,352(4) | | | | | 144,531 | 1,156,250 | 2,312,500(1) | — | — | — | — | — | | J. Ronald Dail | 3/1/2023 | 2/23/2023 | — | — | — | 1,744 | 6,975 | 13,950 | — | 568,742(3) | | | 3/1/2023 | 2/23/2023 | — | — | — | — | — | — | 2,989 | 243,723(4) | | | | | 73,125 | 585,000 | 1,170,000(1) | — | — | — | — | — |
2023 GRANTS OF PLAN-BASED AWARDS
| John D. Kelly | 2/23/2023 | 2/23/2023 | — | — | — | 330 | 2,931 | 6,448 | — | 315,883(2) | | | 3/1/2023 | 2/23/2023 | — | — | — | 2,160 | 8,638 | 17,276 | — | 704,343(3) | | | 3/1/2023 | 2/23/2023 | — | — | — | — | — | — | 3,702 | 301,861(4) | | | | | 71,875 | 575,000 | 1,150,000(1) | — | — | — | — | — | | Ernest W. Torain, Jr. | 2/23/2023 | 2/23/2023 | — | — | — | 136 | 1,205 | 2,651 | — | 129,867(2) | | | 3/1/2023 | 2/23/2023 | — | — | — | 1,207 | 4,829 | 9,658 | — | 393,756(3) | | | 3/1/2023 | 2/23/2023 | — | — | — | — | — | — | 2,070 | 168,788(4) | | | | | 42,188 | 337,500 | 675,000(1) | — | — | — | — | — |
2023 GRANTS OF PLAN-BASED AWARDS
(1)The target, threshold and maximum represent the range of cash award that could be earned under the 2023 NEO annual incentive program. There is no payout if a threshold level of performance is not achieved for all financial or strategic measures. The minimum amount that could be paid is 12.5% of target, calculated as threshold payout of 50% for the lowest weighted component. Maximum payout represents 200% of target. Based on the achievement of specific financial goals and strategic measures, the Compensation Committee determined that 145% of the target award was earned for 2023. (2)The February 23, 2023 grant of performance stock units (PSUs) represents the third component of the 2021 long-term incentive award that is funded based on performance during the 2021-2023 performance cycle. The funding of this third component is based on 2023 annual performance against predefined financial measures of Adjusted Diluted EPS and Revenue Growth, as well as the performance against a cumulative three-year Revenue Growth measure. The minimum amount that could be earned is 11.25% of target, calculated as threshold payout of 25% on only one of the annual financial measures multiplied by the threshold multiplier of 0.9x for threshold performance on the three-year Revenue Growth measure. Maximum payout represents 220% of target, calculated as maximum payout of 200% on all financial measures multiplied by the maximum multiplier of 1.1x for maximum payout on the three-year Revenue Growth measure. Based on the achievement of the specific annual and three-year measures for all three components of the 2021 long-term incentive award, the Compensation Committee determined that 194% of the entire target award was earned and vested on March 1, 2024. These PSUs were granted under the Company's 2012 Omnibus Incentive Plan. (3)The March 1, 2023 grant of PSUs is based on the performance against predefined financial measures of Adjusted Diluted EPS and Revenue Growth over the three-year performance cycle from 2022-2024. The minimum amount that could be earned is 25% of target, calculated as threshold payout of 50% on only one of the financial measures; and, if threshold performance is not achieved for all financial measures, the award will be forfeited. The PSUs can be earned up to 200% of target for maximum performance on all financial measures. The PSUs that are earned will vest on March 1, 2025. These PSUs were granted under the Company's 2012 Omnibus Incentive Plan. (4)This grant of restricted stock units (RSUs) was made under the 2023 NEO long-term incentive program and includes a three-year annual vesting period. The restricted stock was granted under the Company’s 2012 Omnibus Incentive Plan. (5)The full grant date fair value of all RSU and PSU grants are based on the closing price of Huron stock on the date of grant, which was $70.44 and $81.54 on February 23, 2023 and March 1, 2023, respectively; and for performance-based awards, the estimate of expected funding as of the grant date. As of the grant date, the PSUs granted under the 2021 and 2023 NEO long-term incentive programs were estimated to be earned at 153% and target, respectively. The total number of PSUs to be earned is contingent on meeting specific financial targets as described in Notes 2 and 3 above.
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth certain information concerning outstanding stock and option awards as of December 31, 2023 for each named executive officer. Market value is based on the closing price of Huron stock of $102.80 on December 29, 2023, the last trading day of the fiscal year.
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | 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 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Yet Vested ($) | | C. Mark Hussey | 3/1/2021 | — | — | — | — | 3,474 (1) | 357,127 | — | — | | | 3/1/2021 | — | — | — | — | 30,318 (3) | 3,116,723 | — | — | | | 3/1/2022 | — | — | — | — | 5,807 (2) | 596,960 | — | — | | | 3/1/2022 | — | — | — | — | — | — | 40,648 (4) | 4,178,614 | | | 3/1/2023 | — | — | — | — | 7,657 (2) | 787,140 | — | — | | | 3/1/2023 | — | — | — | — | — | — | 17,867 (5) | 1,836,728 | | J. Ronald Dail | 3/1/2020 | — | — | — | — | 1,608 (6) | 165,302 | — | — | | | 3/1/2021 | — | — | — | — | 1,654 (6) | 170,031 | — | — | | | 3/1/2022 | — | — | — | — | 3,971 (6) | 408,219 | — | — | | | 3/1/2022 | — | — | — | — | 2,593 (7) | 266,560 | — | — | | | 3/1/2022 | 1,226 (7) | 2,451 (7) | 48.22 | 3/1/2029 | — | — | — | — | | | 7/1/2022 | — | — | — | — | 1,233 (2) | 126,752 | — | — | | | 7/1/2022 | — | — | — | — | — | — | 15,332 (4) | 1,576,130 | | | 3/1/2023 | — | — | — | — | 1,576 (6) | 162,013 | — | — | | | 3/1/2023 | — | — | — | — | 2,989 (2) | 307,269 | — | — | | | 3/1/2023 | — | — | — | — | — | — | 6,975 (5) | 717,030 | | John D. Kelly | 3/1/2020 | — | — | — | — | 12,639 (8) | 1,299,289 | — | — | | | 3/1/2021 | — | — | — | — | 1,954 (1) | 200,871 | — | — | | | 3/1/2021 | — | — | — | — | 17,055 (3) | 1,753,207 | — | — | | | 3/1/2022 | — | — | — | — | 3,703 (2) | 380,668 | — | — | | | 3/1/2022 | — | — | — | — | — | — | 25,912 (4) | 2,663,754 | | | 3/1/2023 | | | | | 3,702 (2) | 380,566 | — | — | | | 3/1/2023 | — | — | — | — | — | — | 8,638 (5) | 887,986 | | Ernest W. Torain, Jr. | 3/1/2021 | — | — | — | — | 804 (1) | 82,651 | — | — | | | 3/1/2021 | — | — | — | — | 7,017 (3) | 721,346 | — | — | | | 3/1/2022 | — | — | — | — | 1,909 (2) | 196,245 | — | — | | | 3/1/2022 | — | — | — | — | — | — | 13,356 (4) | 1,372,997 | | | 3/1/2023 | — | — | — | — | 2,070 (2) | 212,796 | — | — | | | 3/1/2023 | — | — | — | — | — | — | 4,829 (5) | 496,421 |
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1)Consists of unvested restricted stock awards as of December 31, 2023 that vests 33% annually over three years from the date of grant provided the individual is still employed by Huron on the applicable vesting date or is eligible for retirement under the Company's equity incentive plan. (2)Consists of unvested restricted stock units as of December 31, 2023 that vests 33% annually over three years from the date of grant, provided that the individual is still employed by Huron on the applicable vesting date or is eligible for retirement under the Company's equity incentive plan. (3)Consists of the 2021 grant of PSUs that vest based on performance for the 2021-2023 performance period. The amount reflected in the table equals 194%, the actual amount earned. The earned amount vested on March 1, 2024. (4)Consists of the 2022 grant of PSUs that vest based on performance for the 2022-2024 performance period. Actual payouts may range from 0% to 200% of target, with 12.5% paid for threshold performance. As of December 31, 2023, it was estimated that the award would be earned at an amount between target and maximum; as such, the amount reflected in the table equals the maximum amount. Once the 2022-2024 performance period is complete, the earned award will vest in its entirety on March 1, 2025. (5)Consists of the 2023 grant of PSUs that vest based on performance for the 2023-2025 performance period. Actual payouts may range from 0% to 200% of target, with 25% paid for threshold performance. The amount reflected in the table equals the target amount based on the estimated funding as of December 31, 2023. Once the 2023-2025 performance period is complete, the earned award will vest in its entirety on March 1, 2026. (6)Consists of unvested restricted stock as of December 31, 2023 that vests 25% annually over four years from the date of grant, provided that the individual is still employed by Huron on the applicable vesting date or is eligible for retirement under the Company's equity incentive plan. (7)Consists of the unvested PSUs and unexercised performance stock options (PSOs) granted in 2022 that were earned based on the 2022 annual performance of the Healthcare business unit. The amount reflected in the table equals the unvested PSUs and unexercised PSOs of the earned amount. The earned awards vest 33% annually over three years from the date of grant provided the individual is still employed by Huron on the applicable vesting date. (8)Consists of unvested restricted stock as of December 31, 2023 that will vest 100% four years from the date of grant, provided that the individual is still employed by Huron on the applicable vesting date.
2023 OPTION EXERCISES AND STOCK VESTED
2023 OPTION EXERCISES AND STOCK VESTED The following table sets forth certain information concerning stock options exercised and restricted stock vested during 2023 for each named executive officer.
2023 OPTION EXERCISES AND STOCK VESTED
| | Option Exercises | | Stock Awards | | | Name | Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | C. Mark Hussey | — | — | 11,874 | 833,436 | | J. Ronald Dail | — | — | 6,816 | 478,415 | | John D. Kelly | — | — | 6,895 | 483,960 | | Ernest W. Torain, Jr. | — | — | 4,262 | 314,552 |
2023 OPTION EXERCISES AND STOCK VESTED
(1)The value realized on vesting equals the number of shares received on vesting multiplied by the closing price of Huron stock on the most recent business day preceding the vesting date.
2023 NONQUALIFIED DEFERRED COMPENSATION
2023 NONQUALIFIED DEFERRED COMPENSATION The following table sets forth the deferred compensation activity for the named executive officers in 2023.
2023 NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in 2023 ($)(1) | Company Contributions in 2023 ($) | Aggregate Earnings/Losses in 2023 ($) | Aggregate Withdrawals/ Distributions in 2023 ($) | Aggregate Balance as of 12/31/23 ($) | | C. Mark Hussey | — | — | 220,165 | — | 1,752,287 | | J. Ronald Dail | — | — | — | — | — | | John D. Kelly | — | — | — | — | — | | Ernest W. Torain, Jr. | — | — | — | — | — |
2023 NONQUALIFIED DEFERRED COMPENSATION
(1)There were no executive contributions made to the deferred compensation plan for 2023. The Company maintains the deferred compensation plan (the "DCP"), which became effective July 1, 2006, for principals, managing directors, corporate vice presidents, named executive officers and members of the board of directors. The DCP permits eligible employees to defer up to 75% of their base salary and 100% of their annual cash incentive and permits directors to defer up to 100% of their cash compensation. Participants are able to choose from a number of investment alternatives. Earnings are credited based on the returns of the investment options selected by the participant. Huron does not match any amounts deferred or otherwise contribute to the DCP except to make restoration payments to the accounts of participants who do not receive the maximum eligible 401(k) match as a result of participation in the DCP. Deferral elections for base salary and any guaranteed bonus must be made in the calendar year prior to earning such base salary or within 30 days of becoming eligible for the plan. The Company requires that deferral elections of the annual cash incentive must be made 12 months prior to the end of the applicable performance period. Payments from the plan automatically begin upon termination of employment or separation from service as a director. Key employees, including executive officers, must wait six months after termination to receive payment from the plan. Participants may elect payment in a lump sum or annual installments for up to 15 years. Upon proof of financial hardship and approval from the Compensation Committee, a participant may be allowed an early distribution. Participants may also elect to receive payments prior to termination through a scheduled distribution.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control The estimated amount payable or provided to each named executive officer in each situation is summarized below. These estimates are based on the assumption that the various triggering events occurred on the last day of 2023, along with other material assumptions noted below. The actual amounts that would be paid to a named executive officer upon termination or a change of control can only be determined at the time the actual triggering event occurs. The estimated amount of compensation and benefits described below does not take into account compensation and benefits that a named executive officer has earned prior to the applicable triggering event, such as equity awards that have previously vested in accordance with their terms or vested benefits otherwise payable under our compensation programs. The following table and summary set forth potential payments we would be required to make to our named executive officers upon termination of employment or change of control. The table assumes termination of employment on December 31, 2023 and uses a share price of $102.80, the closing price of our stock on December 29, 2023, the last trading day of the fiscal year.
Potential Payments Upon Termination or Change of Control
| Name | Benefit | Voluntary Termination/ Retirement ($) | Termination without Cause or resignation for Good Reason ($) | Permanent Disability or Death ($) | Involuntary Termination Following Change of Control ($) | | C. Mark Hussey | Salary | — | 1,850,000 | — | 2,312,500 | | | Bonus | — | 2,312,500 | — | 2,890,625 | | | Pro rata annual bonus (1) | — | — | 1,156,250 | 1,676,563 | | | Pro rata retention bonus (2) | — | 358,190 | 358,190 | 358,190 | | | Equity acceleration (3) | — | — | 1,741,226 | 1,741,226 | | | Benefits continuation | — | 27,608 | 6,902 | 27,608 | | | Cutback (4) | — | — | — | -3,479,039 | | | Total Value | — | 4,548,298 | 3,262,568 | 5,527,673 | | J. Ronald Dail | Salary | — | 650,000 | — | 975,000 | | | Bonus | — | 585,000 | — | 877,500 | | | Pro rata annual bonus (1) | — | 935,006 | 585,000 | 935,006 | | | Equity acceleration (3) | — | — | 1,339,587 | 1,339,587 | | | Benefits continuation | — | 17,975 | 8,988 | 26,963 | | | Cutback (4) | — | — | — | -191,208 | | | Total Value | — | 2,187,981 | 1,933,575 | 3,962,848 | | John D. Kelly | Salary | — | 575,000 | — | 862,500 | | | Bonus | — | 575,000 | — | 862,500 | | | Pro rata annual bonus (1) | — | 833,750 | 575,000 | 833,750 | | | Pro rata retention bonus (2) | — | 170,765 | 170,765 | 170,765 | | | Equity acceleration (3) | — | — | 2,261,394 | 2,261,394 | | | Benefits continuation | — | 20,225 | 10,113 | 30,338 | | | Cutback (4) | — | — | — | -1,436,170 | | | Total Value | — | 2,174,740 | 3,017,272 | 3,585,077 |
Potential Payments Upon Termination or Change of Control
| Ernest W. Torain, Jr. | Salary | — | 450,000 | — | 675,000 | | | Bonus | — | 337,500 | — | 506,250 | | | Pro rata annual bonus (1) | — | 489,375 | 337,500 | 489,375 | | | Pro rata retention bonus (2) | — | 66,640 | 66,640 | 66,640 | | | Equity acceleration (3) | — | — | 491,692 | 491,692 | | | Benefits continuation | — | 20,225 | 10,113 | 30,338 | | | Cutback (4) | — | — | — | -954,904 | | | Total Value | — | 1,363,740 | 905,945 | 1,304,391 |
Potential Payments Upon Termination or Change of Control
(1)Pro rata bonus for termination without Cause or resignation for Good Reason is based on actual 2023 performance. For retirement eligible individuals, executive would receive the full bonus earned payable at the originally scheduled payout date consistent with other executives and thus is not included in the table. As of December 31, 2023, Mr. Hussey satisfied the age and service retirement criteria for these programs. See the Compensation Discussion and Analysis of this Proxy Statement for disclosure regarding amount earned. (2)Reflects pro rata vesting for the three-year cash retention award granted in 2021. If a named executive officer’s employment is terminated due to death, disability, termination without cause or resignation with good reason, he or his estate will receive payment of a pro-rated portion of the retention award through the date of termination, based on the award agreement. (3)The acceleration of equity varies by grant and type of termination as outlined in the preceding sections. The value shown is equal to the number of accelerated shares times the closing price on the last day of the fiscal year. These amounts do not include the value of stock that continues to vest per the original schedule post termination, including: (a) The 2022 and 2023 performance units would continue to vest for each of the named executive officers with the number of shares determined based on actual performance through December 31, 2023 and prorated for the number of days that the executive was employed during the performance period. (b) All of the 2021 performance units would continue to vest for each of the named executive officers with the number of shares determined based on actual performance through December 31, 2023, which is the conclusion of the performance period. (c) In the event an executive qualifies for an approved retirement, they would receive continued vesting of their stock per the schedule as outlined in the grant agreements. As of December 31, 2023, Mr. Hussey satisfied the age and service retirement criteria for these programs. (c) Time‐based restricted stock awards and restricted stock units are forfeited in the event of a Termination without Cause or Resignation for Good Reason. (4) In the event the total COC severance exceeds the IRC 280G safe harbor amount, then the executive’s total severance is reduced to the maximum safe harbor threshold amount as to not trigger any excise tax.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The Company is providing the following disclosure about the relationship of the annual total compensation of our chief executive officer and other named executive officers to our total shareholder return, peer group shareholder return, our net income and our revenues. The information set forth below was not used by the Compensation Committee in setting compensation for our named executive officers as set forth in the Summary Compensation Table.
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2)(3) | Total Shareholder Return ($)(4) | Peer Group Total Shareholder Return ($)(4) | Net Income ($'000s) | Revenues ($'000s) | | 2023 | 5,706,403 | 10,225,755 | 2,387,211 | 4,398,093 | 150 | 126 | 62,479 | 1,362,060 | | 2022 | 6,066,630 | 8,811,255 | 2,637,060 | 3,593,717 | 106 | 122 | 75,552 | 1,132,455 | | 2021 | 3,595,855 | 1,428,917 | 1,579,259 | 709,973 | 73 | 124 | 62,987 | 905,640 | | 2020 | 3,991,446 | 1,314,867 | 1,691,684 | 1,003,158 | 86 | 94 | (23,840) | 844,127 |
PAY VERSUS PERFORMANCE
(1)The principal executive officer (PEO) included in the summary compensation table total and compensation actually paid (CAP) total for 2023 was C. Mark Hussey. The PEO for years 2022, 2021 and 2020 was James H. Roth. (2)The non-PEO NEOs included in the average summary compensation table total and average CAP for each year are as follows: •2023 - J. Ronald Dail, John D. Kelly, and Ernest W. Torain, Jr. •2022 - C. Mark Hussey, J. Ronald Dail, John D. Kelly and Ernest W. Torain, Jr. •2021 - C. Mark Hussey, John D. Kelly and Ernest W. Torain, Jr. •2020 - C. Mark Hussey, John D. Kelly, Ernest W. Torain, Jr. and Diane Ratekin (3)CAP was calculated by subtracting from the summary compensation total the grant date fair value of awards included in the summary compensation total, adding/(subtracting) the year-over-year change in fair value of unvested equity, adding/(subtracting) the year-over-year change in fair value of prior years' unvested equity that vested in the current year (valued as of the vest date), and adding the fair value of equity compensation granted in the current year (valued as of year-end). No dividends were paid in any year presented. Below is additional information on the total amount of equity compensation included in CAP for the PEO and the average amount of equity compensation included in CAP for the non-PEO NEOs for 2023:
PAY VERSUS PERFORMANCE
| | Components of PEO Equity Compensation Included in CAP | | | | Components of non-PEO NEO Equity Compensation Included in CAP | | | | | ($) | Fair Value of Equity Awards Granted in Current Year | Change in Fair Value of Unvested Equity Awards Granted in a Prior Year | Change in Fair Value of Equity Awards Vested in Current Year | Total Fair Value of Equity Awards included in CAP | Fair Value of Equity Awards Granted in Current Year | Change in Fair Value of Unvested Equity Awards Granted in a Prior Year | Change in Fair Value of Equity Awards Vested in Current Year | Total Fair Value of Equity Awards included in CAP | | PSU | 2,875,768 | 3,247,489 | (7,552) | 6,115,705 | 975,429 | 1,311,638 | (3,253) | 2,283,814 | | PSO | — | — | — | — | — | 65,231 | 8,292 | 73,523 | | Restricted Stock | 787,140 | 280,286 | (21,054) | 1,046,372 | 354,215 | 296,715 | (6,048) | 644,882 | | Total | 3,662,908 | 3,527,775 | (28,606) | 7,162,077 | 1,329,644 | 1,673,584 | (1,009) | 3,002,219 |
PAY VERSUS PERFORMANCE
(4)The pay versus performance table above and the graph below compare the cumulative total shareholder return (TSR) on our common stock against the cumulative TSR of the stocks making up an industry peer group from December 31, 2019 through December 31, 2023. The industry peer group, which is consistent with the peer group used by the Company for its S-K Item 201(e) disclosures within the 2023 Annual Report on Form 10-K, is comprised of the following companies: CRA International, Inc. (CRAI), FTI Consulting, Inc. (FCN), ICF International, Inc. (ICFI), Premier, Inc. (PINC) and Resources Connection, Inc. (RGP). The graph and table assume a $100 investment in Huron Consulting Group Inc. common stock and an index of the industry peer group on December 31, 2019. The annual TSR for each member of the peer group assumes all dividends are reinvested and was weighted based on its stock market capitalization at the beginning of each year presented. The below graphs illustrate the relationship between the compensation actually paid (CAP) to the principal executive officer (PEO) and the average of the non-PEO NEOs and i) total shareholder return for Huron and the peer group, ii) revenues and iii) net income from 2020 through 2023. The increase in the PEO and Other NEO CAP in 2022 as compared to 2021 and 2020 is primarily due to the increase in the fair value of equity awards. From December 31, 2021 to December 31, 2022, our stock price increased from $49.90 to $72.60 and the expected funding of the 2020 and 2021 performance-based awards tied to performance against Adjusted Diluted EPS and Revenue Growth metrics increased from 0% to 19% for the 2020 awards and 100% to 153% for the 2021 awards. The increase in the PEO and Other NEO CAP in 2023 also related to the increase in the fair value of equity awards. From December 31, 2022 to December 31, 2023, our stock price increased from $72.60 to $103.80 and the expected funding of the 2021 and 2022 performance-based awards tied to performance against Adjusted Diluted EPS and Revenue Growth metrics increased from 153% to 194% for the 2021 awards and 100% to 182% for the 2022 awards.
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is providing the following disclosure about the relationship of the annual total compensation of our median-paid employee to the annual total compensation of Mr. Hussey, our CEO. We believe that the pay ratio disclosed below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and apply various assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. For 2023: •The annual total compensation of our median employee was $107,781. •Mr. Hussey’s annual total compensation, as reflected in the Summary Compensation Table included in this Proxy Statement, was $5,706,403. •Based on this information, the ratio of the annual total compensation of Mr. Hussey to the annual total compensation of our median employee is estimated to be 52.9 to 1. The calculation of the 2023 CEO Pay Ratio used the same median employee as used in 2022. As permitted by SEC rules, we used the same median employee that was identified in the preparation of our pay ratio in 2022 because there has been no change in our employee population or compensation arrangements that we believe would significantly impact our pay ratio disclosure. In 2022, we identified the median employee by examining the 2022 total cash compensation for all individuals, excluding our CEO, who were employed by us on December 31, 2022. We included all employees, whether employed on a full-time or part-time basis. We annualized the base compensation and bonus for all employees that were not employed by us for all of 2022 unless they were designated as temporary or seasonal positions. In addition, in order to identify our median employee in 2022, we (i) utilized the exemption permitted under Item 402(u) of Regulation S-K to exclude a total of 137 employees from Canada, the United Kingdom, Singapore, and Switzerland (which, in the aggregate, comprised less than 5% of our total employee population as of December 31, 2022), resulting in a net employee population of 5,652, of which 1,575 are located in India and (ii) adjusted non-U.S. employee pay applying foreign currency exchange rates as of December 31, 2022. We calculated 2023 annual total compensation for our median employee using the same methodology we use for our NEOs as set forth in the Summary Compensation Table.