DEF 14A of Iridium Communications Inc.
Filed Apr 1, 2024 · FY20230001418819-24-000018
Board Nominees and Demographics
Board Nominees and Demographics Our director nominees exhibit a variety of competencies, professional experience and backgrounds, and each nominee brings a unique skill set and contributes diverse viewpoints and perspectives to our Board. While the Board benefits from the experience and institutional knowledge of our longer-serving directors, it also recognizes the value of new perspectives and ideas and has added three new directors in the last three years. Of our ten nominees, three are women, and one is ethnically/racially diverse.
Board Nominees and Demographics
| | Age | Director Since | Independent | Committees | | | Other Current Public Company Boards | | Name | | | | AC | CC | NGC | | | Robert H. Niehaus | 68 | 2008 | X | M | — | — | Zeta Global Holdings Corp. | | Thomas C. Canfield | 68 | 2008 | X | M | — | M | — | | Matthew J. Desch | 66 | 2009 | — | — | — | — | Unisys Corporation | | Thomas J. Fitzpatrick | 66 | 2013 | — | — | — | — | — | | L. Anthony Frazier | 53 | 2021 | X | C | — | — | — | | Alvin B. Krongard | 87 | 2009 | X | — | M | C | Apollo Asset Management, Inc., Icahn Enterprises L.P. | | Suzanne E. McBride | 55 | 2020 | — | — | — | — | Skyworks Solutions, Inc. | | Admiral Eric T. Olson (Ret.) | 72 | 2011 | X | — | C | — | Under Armour, Inc., Sarcos Technology and Robotics Corporation | | Kay N. Sears | 57 | 2022 | X | — | M | — | — | | Jacqueline E. Yeaney(1) | 55 | 2023 | X | — | — | M | Talkspace, Inc. |
Board Nominees and Demographics
____________________________________ (1)Ms. Yeaney is currently serving on the Nominating and Corporate Governance Committee. If re-elected as a director, she will also serve on the Audit Committee. AC = Audit Committee; CC = Compensation Committee; NGC = Nominating and Corporate Governance Committee; C = Chairman; M = Member
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Board of Directors currently consists of eleven directors, and there are ten nominees for director this year. Each director to be elected and qualified will hold office until the next annual meeting of stockholders and until his or her successor is elected, or, if sooner, until the director’s death, resignation or removal. Each of the nominees listed below is currently a director who was previously elected by our stockholders at our 2023 annual meeting. One of our current directors, Jane Harman, is not standing for re-election at the annual meeting, and her term as a director will end at the conclusion of the annual meeting. It is our policy to encourage nominees for director to attend the annual meeting. All of our directors who were then nominees or serving attended the 2023 annual meeting. Directors are elected by a plurality of the votes of the holders of shares present virtually at the meeting or represented by proxy and entitled to vote on the election of directors. Proxies may not be voted for more than ten nominees. The ten nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the ten nominees named below. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by us. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve. Our Corporate Governance Guidelines provide that any nominee who receives a greater number of votes “withheld” than votes “for” must submit an offer of resignation to our Nominating and Corporate Governance Committee. The committee will consider the facts and circumstances and recommend to the Board of Directors the action to be taken with respect to such offer of resignation. The Board of Directors will then act on the committee’s recommendation.
NOMINEES
NOMINEES The Nominating and Corporate Governance Committee of our Board seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting a diverse group of members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the Board. The biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate Governance Committee to recommend that person as a nominee for director. However, each member of the committee may have a variety of reasons why he or she believes a particular person would be an appropriate nominee for the Board, and these views may differ from the views of other members. Robert H. Niehaus, age 68, has served as a director of our company since 2008 and as Chairman of our Board of Directors since 2009. Mr. Niehaus also served as our Chief Executive Officer for a brief period in 2009. Mr. Niehaus is the founder and Chairman of GCP Capital Partners LLC, an investment firm formed in 2009 as the successor to Greenhill Capital Partners, the merchant banking business of Greenhill & Co., Inc. Mr. Niehaus joined Greenhill & Co. in 2000 to begin the formation of Greenhill Capital Partners and served as its Chairman and Chair of its Investment Committee from 2000 to 2009. Prior to joining Greenhill, Mr. Niehaus spent 17 years at Morgan Stanley & Co., where he was a Managing Director in the merchant banking department from 1990 to 1999. Mr. Niehaus was Vice Chairman and a director of the private equity investment funds Morgan Stanley Leveraged Equity Fund II, L.P. and Morgan Stanley Capital Partners III, L.P. Mr. Niehaus was also the Chief Operating Officer of Morgan Stanley’s merchant banking department from 1996 to 1998. Mr. Niehaus currently serves as a director of Zeta Global Holdings Corp. and several private portfolio companies of GCP Capital Partners. Mr. Niehaus received a Bachelor of Arts degree in International Affairs from the Woodrow Wilson School at Princeton University and a Master of Business Administration degree from the Harvard Business School, from which he graduated with high distinction as a Baker Scholar. Our Board of Directors believes Mr. Niehaus’s qualifications to serve on our Board include his extensive corporate management experience, his financial and investment banking expertise and his experience serving on the boards of directors of numerous companies, particularly in the telecommunications industry. Thomas C. Canfield, age 68, has served as a director of our company since 2008. Since 2007, Mr. Canfield has served as Senior Vice President, General Counsel and Secretary of Spirit Airlines, Inc. From 2006 to 2007, Mr. Canfield served as General Counsel and Secretary of Point Blank Solutions, Inc., a manufacturer of antiballistic body armor. Prior to Point Blank, from 2004 to 2007, he served as Chief Executive Officer and Plan Administrator of AT&T Latin America Corp., a public company formerly known as FirstCom Corporation, which developed high-speed fiber networks in Latin American cities. Mr. Canfield also served as General Counsel and Secretary at AT&T Latin America Corp. from 1999 to 2004. Previously, Mr. Canfield was Counsel in the New York office of the law firm Debevoise & Plimpton LLP. Our Board of Directors believes Mr. Canfield’s qualifications to serve on our Board include his management experience in the telecommunications and aviation industries and his particular familiarity with serving as a director of technology companies. Matthew J. Desch, age 66, has served as our Chief Executive Officer and a director of our company since 2009 and previously served as Chief Executive Officer of our predecessor, Iridium Holdings LLC, from 2006 to 2009. From 2002 to 2005, Mr. Desch served as Chief Executive Officer of Telcordia Technologies, Inc., a telecommunications software services provider that is now part of Ericsson. Previously, he spent 13 years at Nortel Networks Corporation, including as President of its global wireless networks business, and as President of Global Carriers. Mr. Desch serves on the President’s National Security Telecommunications Advisory Committee. He has served as a director of Unisys Corporation, a publicly traded global information technology company, since 2019 and is a member of its Compensation Committee. Mr. Desch received a Bachelor of Science degree in Computer Science from The Ohio State University and a Master of Business Administration degree from the University of Chicago. Our Board of Directors believes Mr. Desch’s qualifications to serve on our Board include his deep knowledge of Iridium gained from his position as our Chief Executive Officer, as well as his extensive experience in the telecommunications industry. Thomas J. Fitzpatrick, age 66, has served as our Chief Financial Officer since 2010 and as our Chief Administrative Officer and a director of our company since 2013. From 2002 to 2009, Mr. Fitzpatrick was Executive Vice President and Chief Financial Officer of Centennial Communications Corp., a publicly traded telecommunications company that was acquired by AT&T. Previously, Mr. Fitzpatrick served as Chief Financial Officer of a number of privately held and publicly traded companies in the telecommunications and technology industries and was a Vice President with Bell Atlantic Corporation (now Verizon). Mr. Fitzpatrick graduated with a Bachelor of Business Administration degree from Pennsylvania State University and a Master of Business Administration degree from Villanova University. Mr. Fitzpatrick is also a Certified Public Accountant. Our Board of Directors believes Mr. Fitzpatrick’s qualifications to serve on our Board include his deep knowledge of Iridium gained from his position as our Chief Financial Officer and Chief Administrative Officer, as well as his extensive financial experience in the telecommunications industry.
NOMINEES
L. Anthony Frazier, age 53, has served as a director of our company since March 2021. Mr. Frazier has served as Chief Executive Officer and director of LeoLabs, a commercial provider of Space Situational Awareness and Space Domain Awareness services, since March 2024. Mr. Frazier served as Executive Vice President and General Manager of Public Sector Earth Intelligence for Maxar Technologies Inc. until October 2023, following Maxar’s acquisition by a private equity firm. He previously served as Maxar’s Executive Vice President of Global Field Operations and President of Radiant Solutions, Maxar’s Geospatial Services business. Mr. Frazier joined Maxar in 2017 following that company’s acquisition of DigitalGlobe. Mr. Frazier served as Senior Vice President, General Manager of DigitalGlobe’s Services business from 2013 to 2017 and prior to DigitalGlobe’s acquisition of GeoEye, Inc. in 2013, had served as GeoEye’s Senior Vice President of Marketing since 2010. He previously served as Senior Director of Product Management at Cisco Systems and also held senior marketing roles at Infor, iPhrase Technologies and pcOrder.com. Mr. Frazier began his career in strategic consulting at Bain & Company. Mr. Frazier received a Bachelor of Science in Engineering degree in Systems Engineering from the University of Pennsylvania and a Master of Business Administration degree, with distinction, from Harvard Business School. Our Board of Directors believes Mr. Frazier’s qualifications to serve on our Board include his extensive satellite industry and operational expertise. Alvin B. Krongard, age 87, has served as a director of our company since 2009 and previously served as a director of our predecessor, Iridium Holdings, from 2006 until 2009. Since 2004, Mr. Krongard has been pursuing personal interests. He served as Executive Director of the Central Intelligence Agency from 2001 to 2004 and as counselor to the Director of the Central Intelligence Agency from 1998 to 2001. Mr. Krongard previously served in various capacities at Alex.Brown, Incorporated, including as Chief Executive Officer and Chairman of the Board. Upon the merger of Alex.Brown with Bankers Trust Corporation, Mr. Krongard became Vice Chairman of the Board of Bankers Trust and served in that capacity until joining the Central Intelligence Agency. He currently serves as a director and member of the audit committee of Apollo Global Management, Inc., and as a director and member of the audit committee of Icahn Enterprises L.P. and its general partner, Icahn Enterprises G.P., Inc. He served as a member of the board of directors of Under Armour, Inc. from 2005 to May 2020, including serving as its lead independent director and as chairman of the audit committee, and also previously served as the Vice Chairman of the Johns Hopkins Health System. Mr. Krongard graduated with honors from Princeton University and received a Juris Doctor degree from the University of Maryland School of Law, where he graduated with honors. Our Board of Directors believes Mr. Krongard’s qualifications to serve on our Board include his past leadership experience with a large publicly traded investment banking firm, including as Chief Executive Officer and Chairman of the board of directors, his past leadership experience with the Central Intelligence Agency, including serving as Executive Director responsible for overall operations of the agency, and his deep knowledge of our company from his long tenure as a director. Suzanne E. McBride, age 55, has served as our Chief Operations Officer since February 2019 and as a director of our company since May 2020. Ms. McBride served as Chief Operating Officer of OneWeb, Ltd., a privately held company building a space-based global communications network, from October 2018 to January 2019 and as its Senior Vice President from 2016 to October 2018. OneWeb filed a voluntary petition for Chapter 11 bankruptcy protection in March 2020. Previously, she was employed by Iridium Satellite LLC, our primary operating subsidiary, in a series of positions with increasing responsibility from 2007 until 2016, most recently serving as Vice President, Program Management Office and Launch Services, a role in which she oversaw the launch program for our second-generation constellation. Ms. McBride has more than 30 years of experience in the satellite industry, including as a senior engineer at Motorola’s Satellite Communications Group during the building and launching of the original Iridium satellite constellation in the 1990s. Since February 2022, she has served as a director of the publicly held company Skyworks Solutions, Inc. Ms. McBride also serves on the board of directors of Descartes Labs. Ms. McBride received her Master of Business Administration from the University of Tennessee in the Executive Aerospace and Defense program, and her dual undergraduate degrees are from Columbia University in Industrial Engineering and Claremont McKenna College in Management Engineering. Our Board of Directors believes Ms. McBride’s qualifications to serve on our Board include her deep knowledge of Iridium gained from her position as our Chief Operations Officer, as well as her extensive experience in the satellite industry. Admiral Eric T. Olson (Ret.), age 72, has served as a director of our company since 2011. Admiral Olson retired from the United States Navy in 2011 as a full Admiral after 38 years of military service. Admiral Olson’s career culminated as the head of the United States Special Operations Command from 2007 to 2011, where he was responsible for the mission readiness of all Army, Navy, Air Force and Marine Corps special operations forces. In this position, he led more than 65,000 people and managed an annual budget in excess of $10 billion. As President and Managing Member of ETO Group, LLC since September 2011, Admiral Olson also acts as an independent national security consultant supporting a wide range of private and public sector organizations. From June 2019 to May 2020, Admiral Olson served as Chief Executive Officer of Hans Premium Water, a privately held company. He serves on the board of directors of Under Armour, Inc. and is the chair of its corporate governance and sustainability committee, and he also serves on the board of directors of Palladyne AI Corp. (f/k/a Sarcos Technology and Robotics Corporation) and is the chair of its compensation committee and a member of its audit committee. Admiral Olson graduated from the United States Naval Academy in 1973 and earned a Master of Arts degree in National Security Affairs at the Naval Postgraduate School. For seven years, he was an Adjunct Faculty Member in the School of International and Public Affairs at Columbia University. Our Board of Directors believes Admiral Olson’s qualifications to serve on our Board include his past leadership experience as an Admiral in the United States Navy, including his leadership and management of a large and complex organization as head of the United States Special Operations Command.
NOMINEES
Kay N. Sears, age 57, has served as a director of our company since May 2022. Since November 2022, she has served as Vice President and General Manager of Space, Intelligence & Weapon Systems for The Boeing Company, having previously served as Vice President and General Manager of Autonomous Systems for Boeing’s Defense, Space & Security unit from February 2022 to November 2022. In this role, she oversees development of cutting-edge autonomous technologies, intelligence capabilities and networking solutions for government and commercial customers. Prior to joining Boeing, she was the Vice President and General Manager of the Military Space line of business within Lockheed Martin Space from 2018 to February 2022, a role in which she was responsible for critical national security space programs and mission areas, including global navigation satellite systems, space-based missile warning, protected communications, space protection and operations, logistics and sustainment. She joined Lockheed Martin Space in 2016, serving as its Vice President of Strategy and Business Development. Prior to joining Lockheed Martin, Ms. Sears served as President of Intelsat General Corporation from 2006 to 2016. Before that, she served as Senior Vice President at PanAmSat Corporation and as Vice President at Verestar. In 2009, she was appointed to the President’s National Security Telecommunications Advisory Committee to provide information, technical expertise, advice and guidance regarding issues that may affect national security telecommunications capabilities. Ms. Sears received a bachelor's degree in business and economics from the University of Richmond and a Master of Business Administration degree in information systems from The George Washington University. Our Board of Directors believes Ms. Sears’s qualifications to serve on our Board include her extensive expertise in the aerospace and defense industries. Jacqueline E. Yeaney, age 55, has served as a director of our company since May 2023. In April 2023, Ms. Yeaney co-founded CMO Collaborative, a member organization for marketing professionals. From September 2022 to June 2023, Ms. Yeaney served as a strategic advisor for vorteXplore Ltd, a company providing behavioral science employee listening tools. She served as Chief Marketing Officer of Tableau Software, a Salesforce company that specializes in data visualization, from August 2019 to September 2022, including involvement in the acquisition of Tableau by Salesforce in 2019. Previously, she was Chief Marketing Officer of Ellucian, a privately held software and services company, from 2017 to April 2019. Prior to joining Ellucian, she was Executive Vice President, Strategy and Marketing at Red Hat, Inc., a publicly traded provider of open-source software solutions, from 2011 to 2016. Ms. Yeaney started her career as an officer in the U.S. Air Force, and then spent several years as a management consultant at the Boston Consulting Group. In 2002, she joined Delta Air Lines Inc. as Managing Director of Consumer Marketing. From 2004 to 2007, she was Executive Vice President and Chief Marketing Officer at HomeBanc Mortgage Corporation (HBMC), a retail residential mortgage lender. In 2007, she joined EarthLink, Inc., a publicly traded internet service provider, as Senior Vice President and Chief Marketing Officer. From 2008 to 2010, she served as Executive Vice President and Chief Marketing Officer at Premiere Global Services, Inc., a publicly traded provider of web conferencing, online meetings, and webcasting. In September 2023, Ms. Yeaney joined the board of Plan International USA, a development and humanitarian organization that works in over 75 countries across Africa, the Americas, and Asia to advance children's rights and equality for girls. Ms. Yeaney has served on the board of Talkspace, Inc., a publicly traded virtual therapy company, since 2021, where she serves on the audit committee and is chair of the nomination and governance committee. Ms. Yeaney also served as a member of the board of directors of Avaya Holdings Corp., a publicly traded technology and cloud-based communications company, from 2019 until May 2023. She previously served on the board of directors for Promethean World PLC, a publicly traded global education technology company, prior to its acquisition in 2015. Ms. Yeaney holds a Bachelor of Science degree in electrical engineering from Rensselaer Polytechnic Institute and a Master of Business Administration degree from the Massachusetts Institute of Technology. Our Board of Directors believes that Ms. Yeaney is qualified to serve as a member of our Board due to her extensive experience as an executive of high-growth technology companies, her extensive marketing experience, and her experience as a board member of public companies. A VOTE “FOR” EACH NAMED NOMINEE.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
EXECUTIVE OFFICERS WHO ARE NOT DIRECTOR NOMINEES
EXECUTIVE OFFICERS WHO ARE NOT DIRECTOR NOMINEES Bryan J. Hartin, age 60, has served as our Executive Vice President, Sales and Marketing since 2012. From 2009 to 2012, Mr. Hartin served as Senior Vice President of Sales, Distribution and Business Development of LightSquared, a telecommunications company. From 2008 to 2009, Mr. Hartin worked as an independent consultant to companies in the wireless telecommunications industry. From 2003 to 2008, Mr. Hartin was Vice President—Indirect Distribution of Sprint Nextel Corporation. Mr. Hartin received a Bachelor of Science degree in Business Administration from LeMoyne College and a Master of Business Administration degree from The American University. Kathleen A. Morgan, age 56, has served as our Chief Legal Officer since January 2022 and served as Vice President, Corporate Law, of Iridium Satellite LLC from 2008 until her assumption of the Chief Legal Officer role. Ms. Morgan previously served as Assistant General Counsel and then Plan Administrator at Teleglobe USA Inc. and as Assistant Corporate Counsel at MCI Corporation. Ms. Morgan began her legal career at Dickstein Shapiro LLP practicing corporate and securities law. Ms. Morgan holds a Juris Doctorate from Georgetown University and a Bachelor of Science degree in Business Administration, with honors, from the University of North Carolina at Chapel Hill. Scott T. Scheimreif, age 55, has served as our Executive Vice President, Government Programs since 2012 and previously served as Vice President, Government Programs from 2008 to 2012. Mr. Scheimreif received his Bachelor of Science degree in Business Administration from Salisbury University.
Background
We present our Compensation Discussion and Analysis in the following sections: 1. Executive Summary (page 27). In this section, we provide an overview of our business and 2023 performance highlights, discuss certain aspects of our executive compensation program, and discuss the response of our Compensation Committee to the 2023 stockholder advisory vote on named executive officer compensation. 2. Executive Compensation Program (page 31). In this section, we describe our executive compensation philosophy, the use of a compensation consultant and peer group data, and the material components of our executive compensation program. We also describe the reasons for providing, and manner of structuring, the key compensation elements in 2023. 3. Other Executive Compensation Matters (page 42). In this section, we provide a brief overview of our policies related to equity compensation grants and prohibition of hedging and pledging transactions involving our stock, minimum stock ownership, change in control, severance and employee benefits, and executive compensation clawbacks. We also review the accounting and tax treatment of compensation and the relationship between our compensation program and risk.
Executive Summary
•Meaningful Executive Stock Ownership Guidelines – As further described below, our executives are required to comply with our stock ownership guidelines, which we adopted more than a decade ago. Under these guidelines, our chief executive officer is required to accumulate shares of our common stock with a value equal to four times his annual base salary, and our executive vice presidents, including our chief financial officer, chief operations officer and chief legal officer, are required to accumulate shares of our common stock with a value equal to two times their annual base salaries. •Prohibition of Hedging and Pledging Transactions – Our insider trading policy prohibits our employees, including our executives, directors and consultants, from hedging or pledging the economic interest in the Iridium shares they hold. •Use of Independent Compensation Consultant – Our Compensation Committee has retained an independent third-party compensation consultant for guidance in making compensation decisions. •Use of Peer Group and Market Data – Our Compensation Committee reviews market practices and makes internal comparisons among our executives when making compensation decisions. •Incentive Compensation Recovery Policy – In connection with the implementation of SEC and stock exchange clawback policy requirements, our Board adopted a new compensation recovery policy effective in October 2023 that would require us to recover cash and equity compensation from an executive officer in the event we are required to restate our financial results due to material noncompliance with financial reporting requirements effective for compensation received after October 2, 2023, which is compliant with the new requirements. Our prior compensation recovery policy, adopted in 2019, will remain in effect for periods prior to the applicability of the new policy. •Appropriate Compensation Risk – We structure our executive compensation programs to minimize the risk of inappropriate risk-taking by our executives. Pay-for-Performance Philosophy. Our Compensation Committee applies a pay-for-performance philosophy and structures a significant portion of our named executive officers’ target total direct compensation to be variable, at risk and tied directly to our performance over the short- and long-term. Our 2023 annual incentive bonus plan and performance-based equity award payouts illustrate this core objective. The performance goals for our annual incentive plan and the performance goals for our performance-based RSU program, each as discussed below, were adopted by our Compensation Committee in February 2023. Our chief executive officer and our other executive officers received a payout of 89% of their target bonuses under our 2023 incentive bonus plan. The payout was the result of achieving 98.2% of our 2023 operational EBITDA financial target, as well as achieving some, but not all, of our strategic and operational goals set forth in the bonus plan for 2023. As described above, the measurement of operational EBITDA was determined excluding the impact of the change in accounting estimate for the useful lives of our satellites that was effective in the fourth quarter of 2023. Consistent with prior years, the Compensation Committee assigned a significant weight to the operational EBITDA goal in 2023, which represented 65% of the target incentive bonus, with a possible increase for exceeding the operational EBITDA target, scaling up to an additional 65% for achievement up to 105.6% of the target level. Under the terms of our 2023 annual incentive bonus plan, 60% of each executive’s target incentive bonus earned for the 2023 calendar year was paid in the form of shares of our common stock pursuant to RSUs granted under our Amended and Restated 2015 Equity Incentive Plan, or our 2015 Plan, with the remaining amount paid in cash. The number of RSUs subject to the target awards was calculated by dividing a dollar value target by the closing price of our common stock on March 1, 2023, the date of grant for such awards. Paying a portion of our executives’ target annual incentive bonus awards in the form of equity awards further aligns our compensation program with the interests of our stockholders because the awards only vest based upon achievement of our key corporate objectives and the value of the award can increase or decrease with the value of our stock price. We also maintain a performance-based RSU program for our executives, including our named executive officers, to link our equity-based awards to achievement of specific financial performance targets and further align the interests of our executives with those of our stockholders. Achievement of these awards is determined on a sliding scale based on specified achievement levels for the performance metrics over a two-year performance period. Since inception of this program in 2013, the percentage of these performance-based RSUs that have vested, as a percentage of the target achievement, by grant year through 2022, is as follows: Once the level of performance has been determined for the two-year performance period, these performance-based RSUs are subject to further time-based vesting for retention purposes, with 50% eligible to vest on March 1, shortly after the performance goal achievement is certified, and 50% eligible to vest one year later. We believe that the structure of this program underscores the emphasis on rewarding our executive officers based on actual company performance. We continue to grant awards under this program because we believe performance-based equity contributes to our goal of heavily weighting executive compensation toward performance-based compensation. The achievement percentage for awards granted in 2023 will be determined in 2025, and for awards granted in 2024, it will be determined in 2026. During 2023, we also granted long-term incentives in the form of RSUs subject to time-based vesting to promote retention and long-term decision-making. The value that may be realized from these equity awards is directly tied to our stock price performance over a multi-year period, during which time a named executive officer must continue to provide effective and satisfactory services to us for such equity awards to vest. 2023 Say-on-Pay Vote. We conduct an advisory vote on executive compensation, or say-on-pay vote, on an annual basis. At our annual meeting of stockholders in 2023, approximately 96.2% of the votes cast on the say-on-pay proposal supported the proposal, which we believe indicates strong support for our executive compensation program as currently structured. Our Board and our Compensation Committee value the opinions of our stockholders, and we believe that it is important for our stockholders to have an opportunity to vote on this proposal annually, which is consistent with the frequency preferred by our stockholders who voted on the preferred frequency at our stockholder meeting in 2023. Our Compensation Committee’s decisions regarding compensation for 2023 reflected our say-on-pay vote in 2022, which was supported by approximately 95.5% of the votes cast on the proposal. In addition to our annual advisory vote on executive compensation, we are committed to ongoing engagement with our stockholders on executive compensation and corporate governance issues.
Objectives of Our Executive Compensation Program
Objectives of Our Executive Compensation Program Our executive compensation program emphasizes a total compensation philosophy, focused on pay-for-performance, inclusive of both cash and equity incentives, and a mix of long-term and annual compensation. We design our executive compensation programs to: •provide a competitive compensation package to attract and retain talented individuals to manage and operate all aspects of our business; •motivate our executives to achieve corporate and individual objectives that promote the growth and profitability of our business, as measured by objective goals; and •align the interests of our executive officers with those of our stockholders. To meet these objectives, we provide fixed base salary, performance-based annual incentives, in both cash and RSUs, performance-based and time-based long-term equity incentive awards, broad-based employee benefits with limited perquisites, and responsible severance benefits. We do not have formal policies for allocating compensation between long-term and currently paid-out compensation, or between cash and non-cash compensation, but rather, the Compensation Committee makes determinations regarding the allocation of compensation based on the best interests of our company, with the goal of encouraging and rewarding performance. Aggregate equity incentive award target values for our executive officers, expressed in dollars, are generally allocated 50% to time-based vesting awards and 50% to awards under our performance-based RSU program to provide retentive value and reward achievement of our corporate strategic objectives.
Use of Compensation Consultant
Use of Compensation Consultant In the fall of 2022, our Compensation Committee engaged ClearBridge Compensation Group LLC (“ClearBridge”), a national executive compensation consulting firm, as its independent compensation consultant to assist the Compensation Committee with evaluating our executive and director compensation programs and to make recommendations for our 2023 compensation program to ensure that our programs remain competitive in attracting and retaining talented executives, directors and employees. In general, as part of its review in advance of our 2023 calendar year, ClearBridge provided the Compensation Committee with the following services: •assisted the Compensation Committee with evaluating our executive and director compensation programs and made recommendations for our 2023 compensation programs to ensure that our programs remain competitive in attracting and retaining talented executives, directors and employees; •assisted the Compensation Committee in reviewing and developing an updated group of peer companies to use as a reference in making 2023 compensation decisions; •assisted with the further development of the Compensation Committee’s executive pay philosophy; •evaluated corporate governance best practices; •reviewed our equity incentive plan utilization; •prepared an analysis of our compensation practices with respect to base salaries, annual bonuses and long-term incentive grants against market practices; and •reviewed and provided recommendations on the compensation program for our non-employee directors. In the fall of 2023, ClearBridge performed a similar set of services for our Compensation Committee in making its 2024 compensation decisions. The Compensation Committee has the authority to hire and terminate its compensation consultant. We pay the cost for the consultant’s services. Representatives of the compensation consultant attend meetings of the Compensation Committee at the request of the Compensation Committee. The Chairman of the Compensation Committee also communicates separately with the compensation consultant at his discretion. If and as requested by the Compensation Committee, the compensation consultant gathers information from management necessary to perform its duties to the Compensation Committee. In addition, as described above, members of our legal department also meet separately with the compensation consultant to convey information on proposals that management may make to the Compensation Committee. ClearBridge has not provided any other services to us related to executive compensation or non-executive director compensation. The Compensation Committee regularly reviews the performance and independence of its compensation consultant and of each individual employee of the consulting firm who directly provides services to us. The Compensation Committee annually considers whether the compensation consultant should continue to serve as its independent advisor. The Compensation Committee requested information from the compensation consultant about potential conflicts of interest, and in particular, considered the fact that ClearBridge has not provided other executive compensation services to us and that the individual representatives of ClearBridge who work directly with the Compensation Committee have no other business or personal relationships with us, our management or the Board. The Compensation Committee also considered ClearBridge’s policies on ethics, stock ownership and conflicts of interest, and the fact that the total revenue that ClearBridge received from us in 2023 did not constitute a material percentage of its gross revenues. As a result, the Compensation Committee concluded that there was no conflict of interest with respect to ClearBridge providing services to the Compensation Committee.
Use of Peer Data
Use of Peer Data In the fall of 2022, the Compensation Committee engaged ClearBridge to review and provide recommendations for updating our peer group in preparation for compensation decisions made for 2023. Based on ClearBridge’s recommendations, our revised peer group used for 2023 compensation decisions included 16 public companies in the satellite/communications, aerospace/defense and technology industries with revenues generally comparable to ours. The revised peer group reflected the removal of two companies, Vonage Holdings Corporation and ORBCOMM Inc., from the prior peer group that had been acquired or were no longer public. Our peer group used for 2023 compensation decisions consisted of the following companies:
Peer Group Companies Used for 2023 Compensation Decisions
Peer Group Companies Used for 2023 Compensation Decisions
Peer Group Companies Used for 2023 Compensation Decisions
| 8x8, Inc | Hexcel Corporation | | AeroVironment, Inc. | Kratos Defense & Security Solutions, Inc. | | Axon Enterprise, Inc. | ManTech International Corporation | | Bandwidth, Inc. | Maxar Technologies Inc. | | Calix, Inc. | Mercury Systems, Inc. | | Cogent Communications Holdings, Inc. | Shenandoah Telecommunications Company | | Commvault Systems, Inc. | Tenable Holdings, Inc. | | Echostar Corporation | Viasat, Inc. |
Peer Group Companies Used for 2023 Compensation Decisions
In the fall of 2023, ClearBridge again reviewed and updated its recommendations for our peer group. Based on ClearBridge’s recommendations, our revised peer group used for 2024 compensation decisions included 16 public companies in the satellite/communication, aerospace/defense and technology industries with revenues generally comparable to ours. The revised peer group reflects the removal of two companies, ManTech International Corporation and Maxar Technologies Inc., from the prior peer group that had been acquired, and the addition of two companies that met the appropriate selection criteria for inclusion. The selected companies were:
Peer Group Companies Used for 2024 Compensation Decisions
Peer Group Companies Used for 2024 Compensation Decisions
Peer Group Companies Used for 2024 Compensation Decisions
| 8x8, Inc. | Hexcel Corporation | | AeroVironment, Inc. | Kratos Defense & Security Solutions, Inc. | | Axon Enterprise, Inc. | Lumentum Holdings Inc. | | Bandwidth, Inc. | Mercury Systems, Inc. | | Calix, Inc. | Nutanix, Inc. | | Cogent Communications Holdings, Inc. | Shenandoah Telecommunications Company | | Commvault Systems, Inc. | Tenable Holdings, Inc. | | EchoStar Corporation | Viasat, Inc. |
Peer Group Companies Used for 2024 Compensation Decisions
Our Compensation Committee does not make decisions solely based on peer data but refers to peer data to help ensure that target compensation amounts selected by the Compensation Committee do not materially deviate from market practices and that target amounts provide fair compensation given individual and company performance. In particular, for 2023 compensation decisions, the Compensation Committee requested data from ClearBridge at the 25th percentile, median and 75th percentile of the peer group for base salary, target annual incentive bonus, aggregate equity award value, and total target compensation. However, individual compensation decisions may deviate from peer data, as our Compensation Committee discussed the peer data and made the 2023 compensation decisions in the context of: •the differences in our executives’ responsibilities and tenure, as compared to the executives in our peer group, as title is not always determinative of the comparability of role from one organization to another; •the experiences, knowledge and business judgment of each executive; •corporate and individual performance, which includes setting target compensation opportunities after taking into account, in a subjective fashion, performance in the prior year, as well as the anticipated demands on the executive in the coming year; •the desire to maintain target pay opportunities and allocations between cash and equity at levels that were consistent with historical pay levels for each of our executives, given the responses to our past say-on-pay proposals; •the Compensation Committee’s desire to increase the base salaries of our named executive officers from their fiscal 2022 levels, which had been frozen since 2020, in order to better align with market competitive data and reflect each executive officer’s responsibilities for 2023; and •internal pay equity, which we view from the perspective that (1) the target total compensation of our executive officers, other than our chief executive officer, should be within two separate relatively narrow ranges, and (2) the target total compensation of our chief executive officer should be meaningfully higher than that of our other officers, in each case, given the relative weight of their responsibilities and ability to impact our corporate performance.
Reasons for Providing, and Manner of Structuring, the Key Compensation Elements in 2023
| Element | Purpose | Key Characteristics | | Base Salary | Provides a fixed level of compensation for performing the essential day-to-day elements of the job; gives executives a degree of certainty in light of having a majority of their compensation at risk. | Fixed compensation that is reviewed annually and adjusted if and when appropriate; reflects each executive officer’s performance, experience, skills, level of responsibility, and the breadth, scope and complexity of the position as well as the competitive marketplace for executive talent specific to our industry. | | Annual Incentive Bonus Program | Motivates executive officers to achieve corporate and individual business goals, which we believe increase stockholder value, while providing flexibility to respond to opportunities and changing market conditions. | Annual incentive award based on corporate and individual performance compared to pre-established goals, with a portion of the target award paid in the form of RSUs subject to vesting based on attainment of performance goals and continued service through vesting date. Corporate goals focus on overarching objectives for the organization, while individual objectives represent key performance expectations at the departmental or individual level. Corporate goals were derived from our Board-approved operating plan for 2023 and aligned with our business strategy and weighted by relative importance in 2023 so that achievement can be objectively measured. | | Long-Term Equity Incentives (RSUs) | Motivates executive officers to achieve our business objectives by tying compensation to the performance of our common stock over the long term and, with respect to performance-based RSUs, the achievement of key performance goals selected by our Compensation Committee. | RSU awards vesting based upon achievement of specified corporate goals measured over a two-year period and further subject to additional time-based vesting, as well as RSUs vesting over four years based on continued service; the ultimate value realized varies with the price of our common stock. In determining the aggregate size of equity grants in any given year, the Compensation Committee considers the factors described above under “Base Salaries” as well as data from our peer group and performance of the individual executive. | | Other Compensation | Provides benefits that promote employee health and welfare, which assists in attracting and retaining our executive officers. | Indirect compensation element consisting of programs such as medical, vision, dental, life and accidental death and disability insurance, as well as a 401(k) plan with a company matching contribution and other plans and programs made available to eligible employees, such as financial planning. |
2023 Bonuses
2023 Bonuses 2023 Bonus Plan. In February 2023, the Compensation Committee approved our 2023 performance bonus plan, or our 2023 bonus plan, which operated under the terms of our 2015 Plan. Our 2015 Plan, which was most recently approved by our Board and our stockholders in 2023, allows for the granting of performance-based compensation opportunities as amounts paid contingent upon the achievement of pre-established stockholder-approved performance goals. The Compensation Committee had the discretion to increase or reduce the amount of any bonus award payable to any participant in the 2023 bonus plan. Target Bonus Opportunities. In February 2023, the Compensation Committee approved a target incentive bonus award opportunity for each executive, defined a minimum bonus award as zero, set corporate target and stretch goals that could result in achievement up to 180% of target bonus opportunity, which amount could then be decreased or increased by the Compensation Committee based on an individual performance factor ranging from 0% to 150%, subject to a maximum award equal to 200% of the overall target level. Based on the Compensation Committee’s review of competitive market data and internal pay equity, and consistent with our philosophy that a significant portion of each executive’s total target compensation should be performance-based, the target bonus opportunities (expressed as a percentage of annual base salary) for 2023 for the CEO and the other named executive officers were increased by 10% and 5%, respectively, as compared to 2022 levels. The respective target bonus opportunities for 2023 for our named executive officers were:
2023 Bonuses
| Name | 2023 Target Bonus Opportunity ($)(1) | 2023 Target Bonus Opportunity (% of salary) | | Matthew J. Desch | 981,033 | 100% | | Thomas J. Fitzpatrick | 470,896 | 80% | | Suzanne E. McBride | 359,594 | 80% | | Bryan J. Hartin | 251,084 | 65% | | Scott T. Scheimreif | 243,909 | 65% |
2023 Bonuses
(1) Derived from actual salary paid as reflected in our 2023 Summary Compensation Table multiplied by the target bonus opportunity. 2023 Bonus Plan Structure and Metrics. As adopted, the 2023 bonus plan contained both metrics to judge performance and methodology for calculating actual bonuses paid, as follows: •The dollar value of the actual bonus award for each executive under the 2023 bonus plan was to be calculated by multiplying the executive’s target bonus opportunity (as adjusted based on actual salary earned) by a corporate performance factor determined by the Compensation Committee, which could range from 0% to 180% based on the level of achievement of the corporate performance goals discussed below. •The corporate performance factor would equal the sum of the level of achievement of one financial, several strategic and several operational performance goals. •The resulting amount could then be reduced or increased by the Compensation Committee based on an individual performance factor ranging from 0% to 150% (the final amount, representing the product of (x) the executive’s target bonus opportunity, (y) the corporate performance factor, and (z) the individual performance factor, being the “Actual Bonus Award”), subject to a maximum Actual Bonus Award equal to 200% of the target level. •Sixty percent of each executive’s target bonus opportunity was granted in the form of RSUs, or the Bonus RSUs, that were eligible to vest on March 2, 2024, upon the Compensation Committee certifying achievement of the performance goals in February 2024. The number of Bonus RSUs was calculated by dividing the target dollar amount by the closing price of the Company’s common stock on March 1, 2023, the date of grant of the Bonus RSUs. •To the extent the Actual Bonus Award calculated according to the methodology above would exceed the dollar value of the Bonus RSUs on the date of grant, the excess amount would be paid to the executive in cash. •To the extent the Actual Bonus Award calculated according to the methodology above would be less than the dollar value of the Bonus RSUs on the date of grant, the excess Bonus RSUs that did not vest would be forfeited by the executive. •To be eligible for a bonus under the 2023 bonus plan, the executive was required to remain employed by us through the date upon which the Bonus RSUs actually vested in the first quarter of 2024, after the Compensation Committee certified achievement of the performance goals, and the date any amount of the Actual Bonus Award that exceeded the dollar value of the Bonus RSUs was to be paid in cash, except as otherwise provided in an executive’s employment agreement in connection with a termination of employment. •For 2023, the corporate performance factor was the sum of the achievement levels of the following corporate goals, as further described below:
2023 Bonuses
| Performance Goal | Target Performance Weighting | Potential Excess Achievement | Actual Achievement | | Operational EBITDA(1) | 65% | 0% to 65% on a sliding scale | 59% | | Strategic Goals | 20% | 0% to 10% | 15% | | Network and Quality Metrics | 15% | 0% to 5% | 15% | | Total of Target Weighting | 100% | — | | | Total of Excess Potential Achievement Weightings | — | 80% | | | Maximum Corporate Performance | | 180% | | | Actual Performance(2) | | | 89% |
2023 Bonuses
____________________________________ (1) “Operational EBITDA” or “OEBITDA” is defined to equal the OEBITDA we report as full-year performance, as determined by the Compensation Committee, which, for 2023 only, excluded the impact of the change in accounting estimate for the useful lives of our satellites described above. OEBITDA is defined as earnings before interest, income taxes, depreciation and amortization, income (loss) on equity method investments, net, and share-based compensation expenses. We consider the loss on early extinguishment of debt to be financing-related costs associated with interest expense or amortization of financing fees, which by definition are excluded from OEBITDA. (2) Our 2023 bonus plan specified that payouts would be rounded to the closest payout percentage integer. •Operational EBITDA: •An operational EBITDA target of $473.5 million, weighted at 65%, with a potential stretch payout for performance above the target level, with a maximum additional payout of 65% for performance at or above 105.6% of the target, and a potential lesser payout for performance below target level, with zero payout below 93.8% of the target. •Strategic Goals: •U.S. Government Contractual Milestones – a 5% target weighting for achieving specified development and contractual milestones with the U.S. government, with a potential stretch payout of an additional 5% for earning a specified average payout for all fees received from the contract awarded by the government; •New Product Launch – a 5% target weighting for keeping a specified new product on track for a launch date; •Strengthen Iridium’s Workforce – a 5% target weighting for hiring high-quality employees within a specified number of days, on average, between the date the position is requested and the date the employment offer is accepted, with a potential stretch payout of an additional 5% for achieving a specified percentage of new hires receiving positive performance ratings; and •Enable Direct-to-Device Technology – a 5% target weighting for completing our billing, engineering and provisioning requirements to support a partner rollout of a smartphone using our technology. •Network and Quality Metrics: •Service Availability – a 5% target weighting for exceeding specified levels of service availability, with a potential stretch payout of an additional 5% for having no more than a specified number, type and duration of outages in 2023; •Over-the-Air, or OTA, Software – a 5% target weighting for ensuring certain OTA software is deployed by a specified date; and •Internal System – a 5% target weighting for migrating internal systems onto new services and taking steps to migrate and centralize internal systems toward an improved system design. At the time the Compensation Committee set our goals for 2023, the Compensation Committee believed that each of the 2023 bonus plan goals was achievable at the target level, but only with significant effort. Our operational EBITDA target for 2023 reflected an approximately 12% increase over our actual results for 2022. Other targets represented the achievement of significant new product milestones and software upgrades, as well as continued improvement across several operational areas. Performance and Bonus Payouts under 2023 Bonus Plan. In 2023, our performance against our corporate goals resulted in an aggregate corporate performance factor under our 2023 bonus plan of 89%, calculated as follows: •We achieved operational EBITDA of $463.1 million; this amount was negatively affected by the change in accounting estimate for the useful lives of our satellites in the fourth quarter of 2023, which reduced full-year operational EBITDA by $2.3 million. Because the operational EBITDA target had been set using the previous expected useful satellite life in effect prior to the change in estimate, which was not foreseeable at the time the performance target was set, the Compensation Committee determined that, for purposes of assessing performance of this goal, the achievement would be based on operational EBITDA of $465.4 million, which was 98.2% of our operational EBITDA target, yielding 59% credit under the 2023 bonus plan; •With respect to our strategic goals, we achieved the target goals for specified U.S. government contractual milestones (yielding 5% credit); the specified time-to-hire improvement (yielding an additional 5% credit); and completion of our billing, engineering and provisioning requirements to support the rollout of a smartphone using our technology (yielding an additional 5% credit), resulting in a combined 15% credit under our strategic goals for 2023; and •With respect to our network and quality metrics, we achieved the target goal for service availability (yielding 5% credit); the stretch goal for limiting specified type and duration of outages (yielding an additional 5% credit); and the target goal for internal system improvements (yielding an additional 5% credit), resulting in a combined 15% credit under our network and quality metrics for 2023. In the first quarter of 2024, our chief executive officer shared his evaluations of the individual performance of each of our other named executive officers with the Compensation Committee. Based upon our chief executive officer’s recommendations, the Compensation Committee’s own observations and, with respect to our chief executive officer, based solely upon the Compensation Committee’s review of our chief executive officer’s performance, the Compensation Committee concluded that each executive would receive an individual performance factor of 100%. As a result, the Bonus RSUs vested in full, and executives received the remainder of their earned bonuses in cash, as follows:
2023 Bonuses
| Name | Actual Target Bonus Level ($)(1) | 60% of Target Bonus Payable in RSUs ($)(2) | RSUs Granted with Fair Value(3) Equal to 60% of Target Bonus (#) | Corporate Performance (%) | Individual Performance (%) | RSUs Vested (#) | Cash Bonus Paid ($)(4) | Actual Bonus Earned ($)(5) | | Matthew J. Desch | 981,033 | 571,432 | 9,278 | 89 | 100 | 9,278 | 301,687 | 873,119 | | Thomas J. Fitzpatrick | 470,896 | 274,260 | 4,453 | 89 | 100 | 4,453 | 144,837 | 419,097 | | Suzanne E. McBride | 359,594 | 202,077 | 3,281 | 89 | 100 | 3,281 | 117,962 | 320,039 | | Bryan J. Hartin | 251,084 | 146,215 | 2,374 | 89 | 100 | 2,374 | 77,250 | 223,465 | | Scott T. Scheimreif | 243,909 | 142,027 | 2,306 | 89 | 100 | 2,306 | 75,052 | 217,079 |
2023 Bonuses
(1)Derived from actual salary paid as reflected in our 2023 Summary Compensation Table multiplied by the applicable target bonus opportunity. (2)Represents fair value of shares granted, which was derived from base salary as of March 1, 2023, the date of grant of the Bonus RSUs, using a 260-workday year. (3)Based on the closing price of our common stock of $61.59 per share on March 1, 2023, the date of grant of the Bonus RSUs, with amount rounded down to the nearest whole share. (4)Reflects 89% of actual target bonus less the grant date fair value of the Bonus RSUs. (5)Equal to cash bonus paid plus the grant date fair value of the Bonus RSUs. Because each named executive officer earned an actual bonus equal to 89% of the executive’s target bonus for the 2023 performance year, all of the Bonus RSUs granted to each named executive officer in March 2023 pursuant to the 2023 bonus plan vested in full in March 2024, and the full number of shares of common stock underlying the Bonus RSUs (representing 60% of the target bonus) were issued to the named executive officers, net of any shares withheld for the required payment of withholding taxes. The remaining 29% of each named executive officer’s bonus was paid in cash in March 2024. 2024 Bonus Plan Structure. In February 2024, our Compensation Committee adopted a similar bonus plan for 2024, or the 2024 bonus plan, for our executives. The Compensation Committee approved a target incentive bonus award opportunity for each executive, defined a minimum bonus award as zero, capped the maximum corporate payout at 190% and capped the maximum bonus award payable at 200% of the overall target level, after taking into account an individual performance factor ranging from 0 to 150%. Pursuant to the 2024 bonus plan, the first 60% of each executive’s target annual performance bonus for the 2024 calendar year, if earned based upon achievement of the performance goals approved by the Compensation Committee, will be paid in the form of RSUs. Accordingly, on March 1, 2024, each of our named executive officers was granted RSUs under our 2015 Plan, which will vest, if at all, based upon our corporate performance and each executive’s individual performance as set forth under our 2024 bonus plan as certified by our Compensation Committee in the first quarter of 2025, subject to each executive’s continued service with us through the vesting date in March 2025. The portion of each executive’s annual performance bonus that exceeds 60% of target, if any, will be paid in cash in March 2025.
Long-Term Equity-Based Incentive Compensation
Long-Term Equity-Based Incentive Compensation In 2023, as in past years, we awarded equity in the form of RSUs, which vest based on continued service over a four-year period, as well as equity under our performance share program, which provides for the grant of performance-based RSUs. The Compensation Committee established our performance share program in 2012 to (1) focus key employees on achieving specific performance targets, (2) reinforce a team-oriented approach, (3) provide significant award potential for achieving outstanding performance, and (4) enhance our ability to attract and retain highly talented individuals. Under this program, the Compensation Committee grants awards to designated key employees, with each award representing a specified maximum number of shares of common stock that may ultimately be earned under each award. The maximum award is calculated by reference to the target award dollar value, which is then converted into a number of shares underlying the RSUs based on the closing price of our common stock on the date of grant. The number of shares ultimately earned and vested under the award is determined based on achievement of performance goals over a two-year performance period and is subject to additional time-based vesting thereafter. The Compensation Committee sets the performance goals to be achievable, but only with significant effort, as illustrated by the lack of vesting and partial vesting of prior year performance-based RSUs, as detailed under the section titled “Compensation Discussion and Analysis—Executive Summary—Pay-for-Performance Philosophy” above. The Compensation Committee determined an aggregate target award size for each executive in 2023 based principally on (1) the peer data provided by ClearBridge, (2) our internal equity budget for grants for 2023, (3) internal pay equity and individual performance, (4) the recommendations of our chief executive officer and (5) retention of individual executives. In determining these aggregate target award sizes, the Compensation Committee also took into consideration the significant achievements of the executive team during 2022, which included, among other things, (1) generating record total revenue of $721.0 million, a 17% year-over-year increase, and operational EBITDA of $424.0 million, a 12% year-over-year increase, (2) ending the year with 1,999,000 worldwide subscribers, a 16% year-over-year increase, which was driven by growth in commercial IoT, (3) the repurchase of $257 million of our common stock under our repurchase program during 2022, and (4) the Board’s approval in December 2022 of the initiation of a quarterly dividend on our common stock in the first quarter of 2023. Based on the recommendations of ClearBridge, the Compensation Committee allocated 50% of the target dollar value of each award in the form of RSUs subject to a four-year vesting schedule, and 50% in the form of performance-based RSUs. The Compensation Committee determined that this mix of time-based and performance-based RSUs for 2023 was appropriate to promote our retention, motivation and stockholder alignment goals. RSU Grants. As described above, the Compensation Committee approved the March 1, 2023 grant of RSUs to each of our executive officers that would be subject to vesting based on continued service over four years, with one-quarter vesting on March 1, 2024, and the remainder vesting thereafter in twelve equal quarterly installments. The vesting of these awards may be accelerated in connection with a qualified retirement under our “sum of 70” program described below under “Compensation Discussion and Analysis—Other Executive Compensation Matters—Employee Benefits.” The number of RSUs granted was equal to the target grant value divided by $61.59, the closing price of our common stock on March 1, 2023, the date of grant of the RSUs, rounded down to the nearest whole share. The service-based RSUs granted to our named executive officers in 2023 were as follows:
Long-Term Equity-Based Incentive Compensation
| Name | Target Value ($) | Number of Shares Underlying RSU Grant | | Matthew J. Desch | 3,500,000 | 56,827 | | Thomas J. Fitzpatrick | 1,250,000 | 20,295 | | Suzanne E. McBride | 1,250,000 | 20,295 | | Bryan J. Hartin | 750,000 | 12,177 | | Scott T. Scheimreif | 750,000 | 12,177 |
Long-Term Equity-Based Incentive Compensation
Performance-Based RSU Grants. In addition, as described above, the Compensation Committee approved target performance-based share awards for our executive officers. The number of RSUs subject to the target performance-based share awards was equal to the target grant value divided by $61.59, the closing price of our common stock on March 1, 2023, the date of grant of the performance-based share awards, rounded down to the nearest whole share. The performance-based RSUs granted to our named executive officers in 2023 were as follows:
Long-Term Equity-Based Incentive Compensation
| Name | Target Value ($) | Number of Shares Underlying RSU Grant | | Matthew J. Desch | 3,500,000 | 56,827 | | Thomas J. Fitzpatrick | 1,250,000 | 20,295 | | Suzanne E. McBride | 1,250,000 | 20,295 | | Bryan J. Hartin | 750,000 | 12,177 | | Scott T. Scheimreif | 750,000 | 12,177 |
Long-Term Equity-Based Incentive Compensation
The actual awards to be earned by each executive will be determined based on the achievement of a specified average percentage increase in our service revenue calculated in accordance with generally accepted accounting principles in the United States, excluding contributions from our Russian subsidiaries, due to the uncertainties surrounding the ongoing war between Russia and Ukraine. For 2023 and 2024, the Compensation Committee also determined to exclude the impact of the accounting change in estimate for the useful lives of our satellites, which had the effect of reducing service revenue in those periods, as described in “Compensation Discussion and Analysis—Executive Summary—2023 Business Highlights” above. The resulting amount after those two adjustments, which we refer to as adjusted service revenue, will be measured for 2023 and 2024 in terms of growth over the immediately preceding year (i.e., we will calculate the average of (i) the percentage increase in adjusted service revenue from 2022 to 2023 and (ii) the percentage increase in adjusted service revenue from 2023 to 2024), with different levels of achievement resulting in vesting as follows:
Long-Term Equity-Based Incentive Compensation
| Awards Earned by Executives | | | Average Increase in Adjusted Service Revenue (%) | Target Shares to Vest (%) | | < 7% | 0% | | 7% | 50% | | 9% | 100% | | 11% | 150% |
Long-Term Equity-Based Incentive Compensation
Achievement between 7% and 11% will be interpolated linearly. Once the level of performance for adjusted service revenue has been determined, the actual awards earned will also be subject to additional time-based vesting, with 50% of the earned shares vesting when the Compensation Committee determines our level of achievement of the performance goals, which will occur in the first quarter of 2025, and the remaining 50% vesting one year thereafter in the first quarter of 2026. If a change in control were to occur before the date the Compensation Committee determines our level of achievement of the performance goals, then, effective as of immediately prior to the change in control, each executive officer’s actual award would vest at the target level, and the actual awards would be subject to the same time-based vesting schedule, with the first vesting date being March 1, 2025 and the second vesting date being March 1, 2026. Performance-based RSU awards may be accelerated in connection with a qualified retirement under our “sum of 70” program, which is described below under “Compensation Discussion and Analysis—Other Executive Compensation Matters—Employee Benefits.” The service-based RSUs granted to our named executive officers and other employees in 2023 and the performance-based RSUs granted to our named executive officers in 2023 include dividend equivalent rights with respect to vested shares, which allow for a cash payment upon vesting of the RSU award equal to the amount that would have been paid in dividends during the vesting period had the shares underlying the RSU award been outstanding on the dividend payment dates (without payment of any interest). For clarity, with respect to the performance-based RSUs, no dividend equivalents will be paid in cash if the underlying shares do not vest.
Equity Compensation Policies
Equity Compensation Policies As a general matter, the Compensation Committee makes compensatory equity grants no more frequently than on March 1, June 1, October 1 and December 1 of each year. As necessary to meet business needs, the Compensation Committee or the Board may grant equity awards outside of these regularly scheduled dates. Our Compensation Committee followed this schedule in 2023 and made the March 1, 2023 equity grants described above to each of our named executive officers.
Change in Control and Severance Benefits
Change in Control and Severance Benefits Under the terms of the employment agreements with each of our executive officers, either we or the executive may terminate the executive’s employment at any time. Each of our named executive officers is eligible, under the terms of his or her respective employment agreement, to receive, in exchange for a release of claims, severance benefits upon the termination of employment either by us without cause or by him or her for good reason, with additional severance benefits provided in the event the termination is in connection with a change in control. The terms and conditions of severance provisions are discussed more fully below under the heading “—Potential Payments upon Termination or Change in Control.” We do not provide any excise tax gross-ups on change-in-control benefits. These agreements reflect the negotiations with our named executive officers at the time we entered into the agreements, as well as our desire to have a consistent set of benefits across the executive team. Our Compensation Committee considers these severance benefits critical to attracting and retaining high-caliber executives. Additionally, our Compensation Committee believes that additional change-in-control severance benefits minimize the distractions to an executive in connection with a corporate transaction and reduce the risk that an executive officer departs before a transaction is completed. We believe that our existing arrangements allow our executive officers to focus on continuing normal business operations and, in the case of change-in-control benefits, on the success of a potential business combination, rather than worry about how business decisions that may be in our best interest will impact their own financial security. These existing arrangements help ensure stability among our executive officer ranks and are designed to enable our executives to maintain a balanced perspective in making overall business decisions during periods of uncertainty.
Employee Benefits
Employee Benefits We provide broad-based medical insurance, dental insurance, vision coverage, and accidental death and dismemberment insurance benefits to our employees, including our named executive officers. We also provide our employees, including our named executive officers, with the opportunity to participate in our 401(k) plan. We match eligible employee contributions dollar for dollar up to 5% of an employee’s salary, with a maximum match per employee of $16,500 in 2023. We believe these insurance and retirement savings benefits are consistent with practices of similarly sized companies and help to recruit and retain key talent at a minimal cost to us. Beginning in 2022, we offer a company-wide program that provides accelerated vesting of RSU awards held by eligible participants who retire on or after the six-month anniversary (or a later anniversary, in the case of our executive officers, as described below) of the RSU award’s grant date. To be an eligible participant, at the time of retirement, the employee must have attained (1) a minimum age of 55, (2) a minimum of 10 years of continuous service with us or one of our subsidiaries, and (3) a minimum of 70 combined years of age and continuous service with us or one of our subsidiaries. We refer to this as our “sum of 70” program. With respect to RSU awards granted in 2022, under our sum of 70 program, our chief executive officer must retire on or after the two-year anniversary of the RSU award’s grant date, and our other executive officers must retire on or after the one-year anniversary of the RSU award’s grant date, in order to be eligible for this retirement benefit. With respect to RSU awards granted in 2023, all of our executive officers must retire on or after the one-year anniversary of the RSU award’s grant date in order to be eligible for this retirement benefit. With respect to RSU awards granted in 2024, as well as any future grants, all of our executive officers must retire on or after the six-month anniversary of the RSU award’s grant date in order to be eligible for this retirement benefit. With respect to awards granted under our performance-based RSU program, upon the retirement of an eligible participant under our sum of 70 program, each eligible award held by such participant will vest at the actual award level in accordance with the original vesting schedule set forth in the award agreement, notwithstanding such participant’s termination of employment. Further, beginning with RSU awards granted in 2023, unvested RSUs accelerate upon a participant’s death or “disability” (as such term is defined in the 2015 Plan). Our executive officers do not receive any supplemental retirement benefits.
Summary Compensation Table
Summary Compensation Table The following table shows the total compensation earned by the named executive officers in 2023, 2022 and 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Matthew J. Desch, | 2023 | 981,033 | — | 7,571,432 | 301,687 | 163,121 | 9,017,273 | | Chief Executive Officer | 2022 | 952,460 | — | 5,514,317 | 497,196 | 19,011 | 6,982,984 | | | 2021 | 956,123 | — | 3,714,316 | 716,211 | 16,281 | 5,402,931 | | Thomas J. Fitzpatrick, | 2023 | 588,620 | — | 2,774,260 | 144,837 | 85,464 | 3,593,181 | | Chief Financial Officer and | 2022 | 571,475 | — | 2,757,139 | 248,616 | 40,933 | 3,618,163 | | Chief Administrative Officer | 2021 | 573,674 | — | 2,007,154 | 358,105 | 31,951 | 2,970,884 | | Suzanne E. McBride | 2023 | 449,492 | — | 2,702,077 | 117,962 | 91,439 | 3,360,970 | | Chief Operations Officer | 2022 | 421,070 | — | 2,651,554 | 221,094 | 33,856 | 3,327,574 | | | 2021 | 422,690 | 50,000(5) | 1,901,541 | 211,121 | 30,478 | 2,615,830 | | Bryan J. Hartin, | 2023 | 386,283 | — | 1,646,215 | 77,250 | 70,977 | 2,180,725 | | Executive Vice President, | 2022 | 375,032 | — | 1,384,983 | 130,539 | 34,456 | 1,925,010 | | Sales & Marketing | 2021 | 376,474 | — | 1,034,968 | 188,024 | 31,951 | 1,631,417 | | Scott T. Scheimreif | 2023 | 375,244 | — | 1,642,027 | 75,052 | 53,847 | 2,146,170 | | Executive Vice President, | 2022 | 364,315 | — | 1,381,123 | 126,812 | 14,406 | 1,886,656 | | Government Programs | 2021 | 365,716 | — | 1,031,112 | 182,649 | 31,951 | 1,611,428 |
Summary Compensation Table
_____________________ (1)The amounts in this column reflect the actual salary earned in the applicable year. These may be greater than the annual base salaries approved by the Compensation Committee when the number of actual work days in the year exceeds 260. (2)The amounts in this column reflect the aggregate grant date fair value of RSUs and performance-based RSUs (including Bonus RSUs) granted in the applicable year, computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718 for stock-based compensation transactions, or Topic 718. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions, and, for performance-based RSUs, the amounts represent the value based on the probable outcome of the performance conditions in accordance with FASB ASC Topic 718. For the performance-based RSUs included in this column for 2023, the grant date fair values based on the target level of achievement, which was considered to be the probable outcome on the date of grant, were $4,071,432 for Mr. Desch, $1,524,260 for Mr. Fitzpatrick, $1,452,077 for Ms. McBride, $896,215 for Mr. Hartin and $892,027 for Mr. Scheimreif. Assuming the highest level of achievement of all performance-based RSUs granted in 2023, the grant date values for performance-based RSUs would be $5,821,432 for Mr. Desch, $2,149,260 for Mr. Fitzpatrick, $2,077,077 for Ms. McBride, $1,271,215 for Mr. Hartin and $1,267,027 for Mr. Scheimreif. Assumptions used in the calculation of these amounts are included in Note 9 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. A portion of the performance-based RSUs included in these amounts reflect the equity incentive bonuses earned for a performance period that ended as of the end of the respective year but were paid during the first quarter of the following year. (3)The amounts in this column reflect cash incentive bonuses earned during the respective year and paid during the first quarter of the following year. See “Compensation Discussion and Analysis—Executive Compensation Program—Reasons for Providing, and Manner of Structuring, the Key Compensation Elements in 2023—Annual Incentive Bonus Program” for additional information. (4)Consists of (i) 401(k) matching contributions of $16,500, $15,250 ($11,935 for Mr. Scheimreif), and $14,500 for fiscal years 2023, 2022, and 2021, respectively, (ii) life, accident and long-term disability insurance premiums paid on behalf of the executive officer, (iii) financial counseling services provided to executives, other than Mr. Desch (who is not eligible for such services) and Mr. Fitzpatrick (who did not receive such services in 2023) and Mr. Scheimreif (who did not receive such services in 2023 or 2022), the value of which was approximately $17,000 in 2023 and approximately $16,000 for each of 2022 and 2021 (for Ms. McBride the value in 2023 was approximately $8,500) and (iv) for fiscal year 2023, the dollar value of dividend equivalents credited with respect to unvested RSUs at the same rate as cash dividends paid on the Company’s common stock in the amount of $141,029 for Mr. Desch, $63,373 for Mr. Fitzpatrick and Ms. McBride, and $34,276 for Messrs. Hartin and Scheimreif. (5)Ms. McBride’s employment agreement entered into in 2019 provided for an annual cash bonus of $50,000 through 2021.
Grants of Plan-Based Awards for 2023
Grants of Plan-Based Awards for 2023 The following table sets forth information relating to grants of plan-based incentive awards to the named executive officers in 2023.
Grants of Plan-Based Awards for 2023
| Name | Grant Date | Grant Type | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards ($) | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) | | | | | Target | Maximum | Threshold | Target | Maximum | | | | Matthew J. Desch | 3/1/2023 | (1) | | | 28,413 | 56,827 | 85,240 | | 3,500,000 | | | 3/1/2023 | (2) | 409,601 | 1,390,634 | | 9,278 | | | 571,432 | | | 3/1/2023 | (3) | | | | | | 56,827 | 3,500,000 | | Thomas J. Fitzpatrick | 3/1/2023 | (1) | | | 10,147 | 20,295 | 30,442 | | 1,250,000 | | | 3/1/2023 | (2) | 196,636 | 667,532 | | 4,453 | | | 274,260 | | | 3/1/2023 | (3) | | | | | | 20,295 | 1,250,000 | | Suzanne E. McBride | 3/1/2023 | (1) | | | 10,147 | 20,295 | 30,442 | | 1,250,000 | | | 3/1/2023 | (2) | 157,517 | 517,111 | | 3,281 | | | 202,077 | | | 3/1/2023 | (3) | | | | | | 20,295 | 1,250,000 | | Bryan J. Hartin | 3/1/2023 | (1) | | | 6,088 | 12,177 | 18,265 | | 750,000 | | | 3/1/2023 | (2) | 104,869 | 355,953 | | 2,374 | | | 146,215 | | | 3/1/2023 | (3) | | | | | | 12,177 | 750,000 | | Scott T. Scheimreif | 3/1/2023 | (1) | | | 6,088 | 12,177 | 18,265 | | 750,000 | | | 3/1/2023 | (2) | 101,882 | 345,791 | | 2,306 | | | 142,027 | | | 3/1/2023 | (3) | | | | | | 12,177 | 750,000 |
Grants of Plan-Based Awards for 2023
_____________________ (1)Performance RSU: Share amounts in this row represent threshold (50% of target), target and maximum (150% of target) payouts for each named executive officer for grants made in 2023 under our 2023 performance-based restricted stock unit award program, as described above under “Compensation Discussion and Analysis—Executive Compensation Program—Reasons for Providing, and Manner of Structuring, the Key Compensation Elements in 2023—Long-Term Equity-Based Incentive Compensation—Performance-Based RSU Grants.” (2)2023 Bonus Plan: As described above under “Compensation Discussion and Analysis—Executive Compensation Program—Reasons for Providing, and Manner of Structuring, the Key Compensation Elements in 2023—2023 Bonuses,” each executive could earn an annual bonus of up to 180% of target based on corporate performance and a maximum bonus award of 200% of such executive’s target bonus after also taking into account personal performance. Achievement of up to 60% of the target bonus was payable by the vesting of the RSUs included in this row under “Estimated Future Payouts under Equity Incentive Plan Awards.” Bonus awards in excess of 60% of target were payable in cash. There was no threshold amount of payout. Target amounts reported in this row under “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” represent 40% of the executive’s target bonus, which is the amount of cash that could be paid to the executive if the bonus were achieved at 100% of target. Maximum amounts reported in this row under “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” represent 140% of the executive’s target bonus, which was the maximum possible amount of cash that could be paid to the executive under the annual bonus plan. As described above for 2023, each executive actually earned 89% of his or her target bonus amount, as a result of which 100% of the shares reported under the “Target” column vested in March 2024 (representing 60% of target bonus), and the remainder (29% of target bonus) was paid in cash at that time. (3)Service-Based RSU: Share amounts in this row are subject to vesting based on continued service over four years, with one-quarter of the shares vesting on March 1, 2024, and the remainder scheduled to vest thereafter in twelve equal quarterly installments subject to the executive’s continued employment with us on the applicable vesting date. The vesting of these awards may be accelerated in connection with a qualified retirement under our “sum of 70” program, described above under “Compensation Discussion and Analysis—Other Executive Compensation Matters—Employee Benefits”.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth the equity-based awards held by the named executive officers that were outstanding on December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | 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 (1) | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(2) | | Matthew J. Desch | 149,253 | — | 9.45 | 3/2/2025 | | | | | | | | | | | 2,886(3) | 118,788 | | | | | | | | | 11,931(4) | 491,080 | | | | | | | | | 36,068(5) | 1,484,559 | | | | | | | | | 56,827(6) | 2,338,999 | | | | | | | | | 28,633(7) | 1,178,534 | | | | | | | | | 96,178(8) | 3,958,686 | | | | | | | | | | | 56,827(9) | 2,338,999 | | | | | | | 9,278(10) | 381,882 | | | | Thomas J. Fitzpatrick | 49,570 | — | 9.45 | 3/2/2025 | | | | | | | | | | | 1,617(3) | 66,556 | | | | | | | | | 6,525(4) | 268,569 | | | | | | | | | 17,293(5) | 711,780 | | | | | | | | | 20,295(6) | 835,342 | | | | | | | | | 15,659(7) | 644,524 | | | | | | | | | 46,772(8) | 1,925,136 | | | | | | | | | | | 20,295(9) | 835,342 | | | | | | | 4,453(10) | 183,285 | | | | Suzanne E. McBride | 27,154 | — | 23.15 | 3/1/2029 | | | | | | | | | | | 1,617(3) | 66,556 | | | | | | | | | 6,525(4) | 268,569 | | | | | | | | | 18,034(5) | 742,279 | | | | | | | | | 20,295(6) | 835,342 | | | | | | | | | 15,659(7) | 644,524 | | | | | | | | | 48,088(8) | 1,979,302 | | | | | | | | | | | 20,295(9) | 835,342 | | | | | | | 3,281(10) | 135,046 | | | | Bryan J. Hartin | | | | | 1,039(3) | 42,765 | | | | | | | | | 3,356(4) | 138,133 | | | | | | | | | 8,646(5) | 355,869 | | | | | | | | | 12,177(6) | 501,205 | | | | | | | | | 8,053(7) | 331,461 | | | | | | | | | 23,385(8) | 962,527 | | | | | | | | | | | 12,177(9) | 501,205 | | | | | | | 2,374(10) | 97,714 | | | | Scott T. Scheimreif | | | | | 1,039(3) | 42,765 | | | | | | | | | 3,356(4) | 138,133 | | | | | | | | | 8,624(5) | 354,964 | | | | | | | | | 12,177(6) | 501,205 | | | | | | | | | 8,053(7) | 331,461 | | | | | | | | | 23,346(8) | 960,921 | | | | | | | | | | | 12,177(9) | 501,205 | | | | | | | 2,306(10) | 94,915 | | |
Outstanding Equity Awards at Fiscal Year-End
(1)The expiration date of each stock option is ten years from the date of grant. (2)The market value amount is calculated based on the closing price of our common stock of $41.16 on December 31, 2023. (3)These shares represent time-based RSUs outstanding at December 31, 2023 which were granted on March 1, 2020 and vested 25% on the first anniversary of their grant date, with the remaining 75% vesting thereafter in 12 equal quarterly installments. The share amounts shown in the table vested in full on March 1, 2024, and the shares underlying the RSUs were issued to the named executive officer on that date, net of shares withheld to satisfy tax withholding obligations. (4)These shares represent time-based RSUs outstanding at December 31, 2023 which were granted on March 1, 2021 and vested 25% on the first anniversary of their grant date, with the remaining 75% vesting thereafter in 12 equal quarterly installments. (5)These shares represent time-based RSUs outstanding at December 31, 2023 which were granted on March 1, 2022 and vested 25% on the first anniversary of their grant date, with the remaining 75% vesting thereafter in 12 equal quarterly installments. (6)These shares represent time-based RSUs outstanding at December 31, 2023 which were granted on March 1, 2023 and vested 25% on the first anniversary of their grant date, with the remaining 75% vesting thereafter in 12 equal quarterly installments. (7)These shares represent RSUs granted in March 2021 as performance-based grants, with a performance period through December 31, 2022. In February 2023, the Compensation Committee determined the level of performance achievement, and the awards remained subject to time-based vesting as of December 31, 2023. The share amounts shown in the table vested in full on March 1, 2024, and the shares underlying the RSUs were issued to the named executive officer on that date, net of shares withheld to satisfy tax withholding obligations. (8)These shares represent RSUs granted in March 2022 as performance-based grants, with a performance period through December 31, 2023. This amount represents 150% of the original grant, which the Compensation Committee determined in February 2024 to be the level of performance achievement, based on actual performance. One-half of the shares reported in the table vested on March 1, 2024, and the vested shares were issued to the named executive officer on that date, net of shares withheld to satisfy tax withholding obligations, and the remainder will vest on March 1, 2025, subject to the executive’s continued service through such date or qualified retirement under our “sum of 70” program. (9)These shares represent RSUs granted in March 2023 as performance-based grants, with a performance period through December 31, 2024. The number of shares not yet earned is based on the target amount. Upon the Compensation Committee’s determination of the level of performance achievement, which is expected to occur in the first quarter of 2025, the earned awards, if any, will vest in March 2025 and March 2026, subject to the executive’s continued service or qualified retirement under our “sum of 70” program. (10)These shares represent RSUs granted in March 2023 under the 2023 bonus plan. The amount reported in the table is equal to 100% of the original grant amount. In February 2024, the Compensation Committee determined that the performance criteria for vesting had been achieved, as a result of which these RSUs vested in full on March 2, 2024, and the shares underlying the RSUs were issued to the named executive officer on that date, net of shares withheld to satisfy tax withholding obligations.
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table provides certain information with respect to option exercises and RSU vesting for the named executive officers during 2023.
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023
| Name | Option Awards | | Stock Awards | | | | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#)(2) | Value realized on vesting ($)(3) | | Matthew J. Desch | 193,661 | 10,912,797 | 108,264 | 6,346,187 | | Thomas J. Fitzpatrick | 181 | 9,669 | 57,380 | 3,363,175 | | Suzanne E. McBride | — | — | 54,469 | 3,183,426 | | Bryan J. Hartin | 15,032 | 829,217 | 31,443 | 1,842,460 | | Scott T. Scheimreif | 96,348 | 4,974,078 | 31,344 | 1,836,346 |
Option Exercises and Stock Vested in 2023
____________________________________ (1)The value realized on exercise is equal to the number of shares of common stock for which the stock options were exercised multiplied by the excess of the closing price of our common stock on the date of the exercise over the applicable exercise price per share of the stock options. (2)Consists of vesting of performance-based RSU grants made in 2020 and 2021, vesting of RSUs granted under our 2022 Bonus Plan, and other time-based RSUs granted between 2019 and 2022. (3)The value realized on vesting is equal to the closing price of our common stock on the vesting date multiplied by the number of shares vested on that date. Amounts do not represent the value that may be realized by the officer upon sale of the shares.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control The section below describes the payments that may be made to the named executive officers in connection with a change in control or pursuant to specified termination events, pursuant to the terms of the employment agreements between us and them. In addition to the terms described below, beginning with RSU awards granted in 2023 to employees, including those granted to our named executive officers, the vesting of unvested RSUs accelerates upon the participant’s death or “disability” (as defined in the 2015 Plan). Matthew J. Desch. Mr. Desch’s employment agreement, described above, provides that he may be terminated by us for any reason upon written notice. However, the employment agreement provides for payments to him in the event of the termination of his employment in specified termination situations. Termination by reason of death or disability. If Mr. Desch’s employment is terminated due to his death or disability (as defined in his employment agreement), he will receive a bonus based on the amount he would have been entitled to receive if he had remained employed by us throughout the applicable fiscal year and until the applicable payment date, but pro-rated for the number of days he was employed during such year. Termination without cause, for good reason or in connection with a change in control. In the event that we terminate Mr. Desch’s employment without cause, or Mr. Desch terminates his employment for good reason (as these terms are defined in his employment agreement), he will be entitled to receive a sum equal to (i) 18 months of his then-current base salary and (ii) an amount equal to his bonus for the year in which his employment is terminated, based on the actual achievement of the performance goals, pro-rated for the portion of the year that he was employed by us. He also will receive payment of his COBRA premiums (or, if required for us to comply with nondiscrimination rules, a taxable cash payment equal to the amount of his COBRA premiums) until the earlier of (a) 12 months from separation, (b) the expiration of COBRA eligibility or (c) the date he or his dependents become eligible for substantially equivalent health insurance coverage through new employment or self-employment. In the event that such termination occurs within the 12-month period commencing on a change in control (as defined in our 2009 stock incentive plan), then the cash severance amounts described above shall be paid to him in a single lump sum and in addition to such cash severance payment, 100% of his then-outstanding stock options and other equity awards will become vested and exercisable, as applicable, pursuant to the terms of the applicable equity award agreements. These severance payments and benefits are subject to Mr. Desch executing a release of claims in our favor. Thomas J. Fitzpatrick. Mr. Fitzpatrick’s employment agreement, described above, provides that he may be terminated by us for any reason upon written notice. However, the employment agreement provides for payments to him in the event of the termination of his employment in specified termination situations. Termination without cause, for good reason or in connection with a change in control. In the event that we terminate Mr. Fitzpatrick’s employment without cause, or Mr. Fitzpatrick terminates his employment for good reason (as these terms are defined in his employment agreement), he will be entitled to receive a sum equal to (i) one times his then-current base salary and (ii) one times his then-current target bonus, such sum payable in equal installments over a period of 12 months. He will also receive payment of his COBRA premiums (or, if required for us to comply with nondiscrimination rules, a taxable cash payment equal to the amount of his COBRA premiums) until the earlier of (a) 12 months from separation, (b) the expiration of COBRA eligibility or (c) the date he or his dependents become eligible for substantially equivalent health insurance coverage through new employment or self-employment. In the event that such termination occurs within the 12-month period commencing on a change in control (as defined in our 2009 stock incentive plan), then the cash severance amounts described above shall be paid to him in a single lump sum, and in addition to such cash severance payment, 100% of his then-outstanding stock options and other equity awards will become vested and exercisable, as applicable, pursuant to the terms of the applicable equity award agreements. These severance payments and benefits are subject to Mr. Fitzpatrick executing a release of claims in our favor. Suzanne E. McBride. Ms. McBride’s employment agreement, described above, provides that she may be terminated by us at any time and for any reason. However, the employment agreement provides for payments to her in the event of the termination of her employment in specified termination situations. Termination without cause, for good reason or in connection with a change in control. In the event that we terminate Ms. McBride’s employment without cause, or Ms. McBride terminates her employment for good reason (as these terms are defined in her employment agreement), she will be entitled to receive a sum equal to (i) one times her then-current base salary paid in equal installments on our normal payroll schedule over the 12-month period following termination and (ii) an amount equal to her then-current target bonus, pro-rated for the portion of the year that she was employed by us and paid in equal installments on our normal payroll schedule over the 12-month period following termination. She will also receive payment of her COBRA premiums (or, if required for us to comply with nondiscrimination rules, a taxable cash payment equal to the amount of her COBRA premiums) until the earlier of (a) 12 months from separation, (b) the expiration of COBRA eligibility or (c) the date she or her dependents become eligible for health insurance coverage through new employment. In the event that such termination occurs within the period commencing one month before the effective date of a change in control and ending on the date that is 12 months after the effective date of a change in control (as defined in our 2015 equity incentive plan), then the cash severance amounts described above shall be paid to her in a single lump sum and in addition to such cash severance payment, the bonus amount described above shall not be pro-rated and 100% of her then-outstanding time-based vesting equity awards will become vested and exercisable, as applicable, pursuant to the terms of the applicable equity award agreements and her then-outstanding performance-based vesting equity awards will continue to be governed in all respects by the terms of the applicable equity award agreements. These severance payments and benefits are subject to Ms. McBride executing a release of claims in our favor. Bryan J. Hartin. Mr. Hartin’s employment agreement, described above, provides that he may be terminated by us for any reason upon written notice. However, the employment agreement provides for payments to him in the event of the termination of his employment in specified termination situations.
Potential Payments upon Termination or Change in Control
Termination without cause, for good reason or in connection with a change in control. In the event that we terminate Mr. Hartin’s employment without cause, or Mr. Hartin terminates his employment for good reason (as these terms are defined in his employment agreement), he will be entitled to receive a sum equal to (i) one times his then-current base salary paid in equal installments on our normal payroll schedule over the 12-month period following termination and (ii) an amount equal to his bonus for the year in which his employment is terminated, based on the actual achievement of the performance goals, pro-rated for the portion of the year that he was employed by us, paid in equal installments on our normal payroll schedule over the remainder of the 12-month severance period after the date we determine actual performance and the amount of bonus that would have been earned based on such performance. He will also receive payment of his COBRA premiums (or, if required for us to comply with nondiscrimination rules, a taxable cash payment equal to the amount of his COBRA premiums) until the earlier of (a) 12 months from separation, (b) the expiration of COBRA eligibility or (c) the date he or his dependents become eligible for substantially equivalent health insurance coverage through new employment or self-employment. In the event that such termination occurs within the 12-month period commencing on a change in control (as defined in our 2009 stock incentive plan), the bonus amount described above shall not be pro-rated, and in addition to such cash severance payment, 100% of his then-outstanding stock options and other equity awards will become vested and exercisable, as applicable, pursuant to the terms of the applicable equity award agreements. These severance payments and benefits are subject to Mr. Hartin executing a release of claims in our favor. Scott T. Scheimreif. Mr. Scheimreif’s employment agreement, described above, provides that he may be terminated by us for any reason upon written notice. However, the employment agreement provides for payments to him in the event of the termination of his employment in specified termination situations. Termination without cause, for good reason or in connection with a change in control. In the event that we terminate Mr. Scheimreif’s employment without cause, or Mr. Scheimreif terminates his employment for good reason (as these terms are defined in his employment agreement), he will be entitled to receive a sum equal to (i) one times his then-current base salary paid in equal installments on our normal payroll schedule over the 12-month period following termination and (ii) an amount equal to his bonus for the year in which his employment is terminated, based on the actual achievement of the performance goals, pro-rated for the portion of the year that he was employed by us, paid in equal installments on our normal payroll schedule over the remainder of the 12-month severance period after the date we determine actual performance and the amount of bonus that would have been earned based on such performance. He will also receive payment of his COBRA premiums (or, if required for us to comply with nondiscrimination rules, a taxable cash payment equal to the amount of his COBRA premiums) until the earlier of (a) 12 months from separation, (b) the expiration of COBRA eligibility or (c) the date he or his dependents become eligible for substantially equivalent health insurance coverage through new employment or self-employment. In the event that such termination occurs within the 12-month period commencing on a change in control (as defined in our 2012 equity incentive plan), the bonus amount described above shall not be pro-rated, and in addition to such cash severance payment, 100% of his then-outstanding equity awards will become vested and exercisable, as applicable, pursuant to the terms of the applicable equity award agreements. These severance payments and benefits are subject to Mr. Scheimreif executing a release of claims in our favor.
CEO Pay Ratio
CEO Pay Ratio Under the Dodd-Frank Act and related SEC rules, we are required to provide to our stockholders specified disclosure regarding the relationship of CEO total compensation to the total compensation of our median employee, referred to as “pay-ratio” disclosure. For fiscal 2023, the median of the annual total compensation of all employees of our company (other than the CEO) was $183,347 and the annual total compensation of the CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $9,017,273. Based on this information, the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees was 49 to 1. To determine our total population of employees as of December 31, 2023, we included all full-time, part-time, seasonal and temporary employees, including employees of consolidated subsidiaries. Approximately 734 of our 780 employees are located in the United States, while approximately 36 employees were located in Russia, eight were located in the United Kingdom and two were located in Australia. We also did not include any contractors or other non-employee workers in our employee population. To identify our median employee from our employee population as of December 31, 2023, we calculated the aggregate amount of each employee’s 2023 base salary (using the hours worked during 2023 for hourly employees (including overtime pay) and actual salary earned for our remaining employees), the cash amount of annual bonuses for 2023 performance, the grant date fair value of equity awards granted in 2023, our contributions to life, accident and long-term disability benefits for employees and the matching contributions we provide to employees under our 401(k) plan. In making this determination, we annualized the base salary and base wages (but excluded overtime pay) of employees who were employed by us for less than the entire fiscal year. Using this approach, we selected the employee at the median of our employee population, who was based in the United States. We calculated annual total compensation for this median employee to determine our pay ratio calculation for fiscal 2023 using the same methodology we use for our named executive officers in our Summary Compensation Table. The pay ratio above represents our reasonable estimate calculated in a manner consistent with SEC rules and applicable guidance. The SEC rules and guidance provide significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, and as explained by the SEC when it adopted these rules, in considering the pay ratio disclosure, stockholders should keep in mind that the rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay ratio disclosures.
Pay Versus Performance
Pay Versus Performance The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how our company or the Compensation Committee view the link between our company’s performance and named executive officer (“NEO”) pay. For additional information about our pay-for-performance philosophy and how we align executive compensation with company performance, refer to the “Compensation Discussion and Analysis—Executive Summary—Pay-for-Performance Philosophy” section of this Proxy Statement.
Required Tabular Disclosure of Pay Versus Performance
Required Tabular Disclosure of Pay Versus Performance The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” is required by the SEC’s rules and, as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the “Compensation Discussion and Analysis” section of this Proxy Statement.
Required Tabular Disclosure of Pay Versus Performance
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(3)(4) | Value of Initial Fixed $100 Investment Based On Total Stockholder Return | | Net Income (Loss) ($) (in thousands) | OEBITDA ($)(6) (in thousands) | | | | | | | Total Stockholder Return ($) | Peer Group Total Stockholder Return ($)(5) | | | | 2023 | 9,017,273 | 4,933,670 | 2,820,261 | 1,570,369 | 167.05 | 107.36 | 15,415 | 463,095 | | 2022 | 6,982,984 | 11,449,349 | 2,689,351 | 4,437,963 | 208.60 | 95.61 | 8,722 | 423,999 | | 2021 | 5,402,931 | 7,716,751 | 2,156,616 | 3,084,021 | 167.57 | 127.87 | (9,319) | 378,207 | | 2020 | 4,007,440 | 5,036,000 | 1,800,989 | 2,165,749 | 159.62 | 122.04 | (56,054) | 355,553 |
Required Tabular Disclosure of Pay Versus Performance
(1) Our principal executive officer (“PEO”) was Mr. Desch for all years presented. (2) For Mr. Desch, the following amounts were added to (subtracted from) the respective amounts reported in the Summary Compensation Table for each covered year: (1) the grant date fair value of stock awards granted during the year: 2023 - $(7,571,432); 2022 - $(5,514,317); 2021 - $(3,714,316); 2020 - $(2,671,402); (2) the fair value as of the end of the year of awards granted during the year that remained outstanding and unvested as of the end of the year: 2023 - $4,505,538; 2022 - $8,917,283; 2021 - $4,447,511; 2020 - $2,065,179; (3) the change as of the end of the year (from the end of the prior year) in fair value of awards granted in a prior year that remained outstanding and unvested as of the end of the year: 2023 - $(1,799,127); 2022 – $1,122,570; 2021 - $1,359,162; 2020 - $1,315,609; (4) the change as of the vesting date (from the end of the prior year) in fair value of awards granted in a prior year for which all applicable vesting conditions were satisfied during the year: 2023 - $781,418; 2022 - $(59,171); 2021 - $221,463; 2020 - $346,611; and (5) for awards granted in a prior year that failed to meet the applicable vesting conditions during the year, the fair value of such awards at the end of the prior year: 2023 - $0; 2022 - $0; 2021 - $0; 2020 - $(27,437). (3) Non-PEO NEOs consist of Messrs. Fitzpatrick, Hartin and Scheimreif and Ms. McBride. For 2021 only, non-PEO NEOs also include our former Chief Legal Officer, Thomas Hickey. (4) For our non-PEO NEOs, the following amounts were added to (or subtracted from) the average of the respective amounts reported in the Summary Compensation Table for each covered year: (1) the average grant date fair value of stock awards granted during the year: 2023 - $(2,191,145); 2022 - $(2,043,700); 2021 - $(1,362,310); 2020 - $(1,205,942); (2) the average fair value as of the end of the year of awards granted during the year that remained outstanding and unvested as of the end of the year: 2023 - $1,305,904; 2022 - $3,312,023; 2021 - $1,637,702; 2020 - $916,723; (3) the average change as of the end of the year (from the end of the prior year) in fair value of awards granted in a prior year that remained outstanding and unvested as of the end of the year: 2023 - $(689,549); 2022 – $489,681; 2021 - $577,304; 2020 - $544,258; (4) the average change as of the vesting date (from the end of the prior year) in fair value of awards granted in a prior year for which all applicable vesting conditions were satisfied during the year: 2023 - $324,897; 2022 - $(9,392); 2021 - $74,709; 2020 - $116,466; and (5) for awards granted in a prior year that failed to meet the applicable vesting conditions during the year, the average fair value of such awards at the end of the prior year: 2023 - $0; 2022 - $0; 2021 - $0; 2020 - $(6,745). (5) The peer group used in this disclosure is the Nasdaq Telecommunications Index, which is our peer group used for purposes of Item 201(e) of Regulation S-K. The peer group used by our Compensation Committee for 2023 compensation decisions is described on page 33 of this proxy statement. (6) “Operational EBITDA” or “OEBITDA” is the financial performance measure from the tabular list of 2023 Most Important Measures shown below, which, in our company’s assessment, represents the most important financial performance measure used to link compensation actually paid to our NEOs for 2023 to our performance. OEBITDA is defined as earnings before interest, income taxes, depreciation and amortization, income (loss) on equity method investments, net, share-based compensation expenses, and, for 2020 only, certain expenses associated with the construction of our Iridium NEXT satellite constellation, primarily in-orbit insurance. We consider the loss on early extinguishment of debt to be financing-related costs associated with interest expense or amortization of financing fees, which by definition are excluded from OEBITDA.
Required Disclosure of the Relationship Between Compensation Actually Paid and Financial Performance Measures
Required Disclosure of the Relationship Between Compensation Actually Paid and Financial Performance Measures As required by Item 402(v) of Regulation S-K, we are providing the following graphs to illustrate the relationship between the pay and performance figures that are included in the pay versus performance tabular disclosure above. In addition, the first graph below further illustrates the relationship between our total stockholder return and that of the Nasdaq Telecommunications Index. As noted above, “compensation actually paid” for purposes of the tabular disclosure and the following graphs were calculated in accordance with SEC rules and do not fully represent the actual final amount of compensation earned by or actually paid to our NEOs during the applicable years.
Director Compensation
Director Compensation The table below provides summary information concerning compensation paid or accrued by us during 2023 to or on behalf of our non-employee directors for services rendered during 2023. Messrs. Desch and Fitzpatrick and Ms. McBride, who are executive officers in addition to being directors, did not receive any separate compensation for service in their capacity as a director, and accordingly they are not included in this table. Our compensation policy for non-employee directors is reviewed annually by our Board and periodically amended. Under the policy in effect for 2023, each non-employee director was eligible to receive compensation as outlined below:
Director Compensation
| | Annual Retainer | | | Committee | Chair ($) | Member ($) | | Board of Directors | 50,000(1) | 250,000 | | Audit Committee | 40,000 | 20,000 | | Compensation Committee | 15,000 | 7,500 | | Nominating and Corporate Governance Committee | 10,000 | 5,000 | | Government Advisory Committee | N/A | 15,000 |
Director Compensation
(1) The $50,000 in compensation for chair of the Board of Directors is in addition to the member retainer of $250,000. In the fall of 2022, our Compensation Committee retained ClearBridge to conduct a review of our non-employee director compensation program. As part of its review, ClearBridge provided the Compensation Committee with the following services: •reviewed the companies in our current peer group in relation to non-employee director compensation; •reviewed our non-employee director compensation practices relative to the market; •provided a detailed competitive assessment of our non-employee director compensation program, including cash compensation, equity compensation, additional committee compensation, board chair compensation and equity vesting features; •provided an overview of corporate governance considerations for non-employee director compensation, including stock ownership guidelines; and •provided recommendations for adjustments to our non-employee director compensation program for the following year. Based on ClearBridge’s recommendation, in the fall of 2022, the annual retainer for our non-employee directors was increased to $250,000 beginning in 2023. All other annual retainers were kept at their 2022 levels. At the beginning of each year, each non-employee director can elect to have up to $50,000 of the annual $250,000 retainer for serving on the Board paid in cash, RSUs or a combination of both. The remaining $200,000 of the annual Board retainer is required to be paid entirely in RSUs. In addition, the Chairman of the Board and chairman and member of each committee other than the Government Advisory Committee may elect to have the retainers for their positions paid in RSUs, cash or a combination of both. The retainer for service on the Government Advisory Committee is required to be paid entirely in RSUs. The cash component of director compensation is paid on a quarterly basis, and all RSU awards are granted in January and vest in full on the first anniversary of the grant date. Directors may elect annually whether to receive the shares of our common stock subject to the RSU at the time the RSU vests or to have such vested RSUs settled six months after the termination of the director’s service or upon a specified change in control of our company, if it occurs earlier. Our stockholders approved an annual limit of $700,000 on the maximum grant date fair value of shares of our common stock subject to stock awards that may be granted to any non-employee director during a calendar year, taken together with any cash fees paid to the non-employee director for that calendar year.
2023 Director Compensation Table
2023 Director Compensation Table
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | All Other Compensation ($)(4) | Total ($) | | Thomas C. Canfield | — | 275,000 | 99,437 | 374,437 | | L. Anthony Frazier | — | 270,000 | 2,649 | 272,649 | | Jane L. Harman | 55,000 | 200,000 | 30,617 | 285,617 | | Alvin B. Krongard | — | 282,500 | 45,477 | 327,977 | | Robert H. Niehaus | 50,000 | 265,750 | 61,771 | 377,521 | | Admiral Eric T. Olson (Ret.) | 65,000 | 215,000 | 63,255 | 343,255 | | Parker W. Rush(5) | 50,000 | 240,000 | 82,242 | 372,242 | | Henrik O. Schliemann(6) | 37,500 | 200,000 | 18,997 | 256,497 | | Kay N. Sears | 57,500 | 200,000 | 2,857 | 260,357 | | Barry J. West(6) | 28,750 | 200,000 | 16,068 | 244,818 | | Jacqueline E. Yeaney(7) | 41,250 | 150,000 | 635 | 191,885 |
2023 Director Compensation Table
(1)Amounts in this column represent cash retainers paid to the director for board and committee service. As described above, directors may elect to receive up to $50,000 of their annual board retainer and up to the full amount of their retainers for service on the audit, compensation and nominating and corporate governance committees in the form of RSUs. For board and committee service in 2023, the following directors elected to receive RSUs: 1,411 RSUs in lieu of $75,000 for Mr. Canfield; 1,317 RSUs in lieu of $70,000 for Mr. Frazier; 1,270 RSUs in lieu of $67,500 for Mr. Krongard; 1,318 RSUs in lieu of $72,500 for Mr. Niehaus, 71 of which RSUs were later forfeited upon leaving the compensation committee and joining the audit committee in May 2023; and 752 RSUs in lieu of $40,000 for Mr. Rush. (2)Amounts in this column represent the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718 but excluding estimated forfeitures, of RSU awards issued pursuant to our non-employee director compensation policy on January 5, 2023, including the value of the RSUs elected to be received in lieu of cash set forth in footnote 1 above. (3)The aggregate number of shares underlying unvested RSU awards outstanding at December 31, 2023 and held by each non-employee director was as follows: 5,171 shares for Mr. Canfield; 5,077 shares for Mr. Frazier; 3,760 shares for Ms. Harman; 5,312 shares for Mr. Krongard; 5,007 shares for Mr. Niehaus; 4,042 shares for Admiral Olson; 4,512 for Mr. Rush, 3,760 shares for Ms. Sears; and 2,440 shares for Ms. Yeaney. Additionally, the aggregate number of shares underlying unexercised stock option awards outstanding at December 31, 2023 and held by each non-employee director was as follows: 38,355 shares for Mr. Niehaus and 3,750 shares for Admiral Olson. (4)Amounts in this column represent the dollar value of dividend equivalents credited in the form of additional RSUs. Dividend equivalents are credited at the same rate as cash dividends paid on the Company’s common stock. (5)Mr Rush’s term as a director ended on December 31, 2023, and he did not forfeit any of his RSU awards. (6)Messrs. Schliemann and West did not stand for re-election at our 2023 annual meeting, and their terms as a director ended on May 4, 2023, resulting in the forfeiture of one-half of their RSU awards set forth in the Stock Awards column. (7)Ms. Yeaney was elected as a director and appointed to the Nominating and Corporate Governance Committee on May 4, 2023, and she received three-quarters of the annual board member retainer and three-quarters of the annual Nominating and Corporate Governance Committee member retainer.