DEF 14A of Artisan Partners Asset Management Inc.
Filed Apr 29, 2024 · FY20230001517302-24-000035
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(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant) Payment of Filing Fee (Check the appropriate box): ☑ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ☐ Fee paid previously with preliminary materials. ☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: April 29, 2024 Dear Stockholder: On behalf of the Board of Directors of Artisan Partners Asset Management Inc., we cordially invite you to participate in the 2024 Annual Meeting of Stockholders, which will be held virtually on Friday, June 14, 2024, at 11:00 a.m. Central Time. The matters to be considered by stockholders at the Annual Meeting, as well as instructions for accessing the virtual meeting platform online, are described in detail in the accompanying materials. Representatives from our Board of Directors and certain of our executive officers, as well as representatives from our independent registered public accounting firm, will be available at the Annual Meeting to respond to appropriate questions from stockholders. Information about how to access and review our proxy statement and 2023 Annual Report on Form 10-K is included in the Notice of Internet Availability of Proxy Materials that you will receive in the mail. The notice also explains how you may submit your vote. Whether or not you plan to attend the Annual Meeting, please submit your vote at your earliest convenience. Thank you for your continued support as a stockholder of Artisan Partners.
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| Sincerely, | | | | Stephanie G. DiMarco Independent Chair of the Board |
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Notice of 2024 Annual Meeting of Stockholders
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| Date and Time | Record Date | Virtual Meeting | | Friday, June 14, 2024 11:00 a.m. Central Time | Stockholders of record as of the close of business on April 19, 2024 are entitled to attend, and vote at, the Annual Meeting. | The Annual Meeting will be held virtually at https://web.lumiconnect.com/223044778. |
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| PROPOSALS | | BOARD VOTING RECOMMENDATION | | 1 | The election of seven directors to serve until the 2025 annual meeting of stockholders | FOR each nominee | | 2 | An advisory vote to approve the compensation of our named executive officers | FOR | | 3 | The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 | FOR |
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Stockholders will also transact such other business as may properly come before the Annual Meeting or any adjournments thereof. We encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. You may vote your shares by Internet or, if you received printed proxy materials, by mailing the completed proxy card. Please refer to the section "How do I vote?” for detailed voting instructions. By Order of the Board of Directors,
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| | | Laura E. Simpson Corporate Secretary Milwaukee, Wisconsin April 29, 2024 |
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held virtually on Friday, June 14, 2024, at 11:00 a.m. Central Time. Our proxy statement and 2023 Annual Report on Form 10-K are available at www.astproxyportal.com/ast/18158. Table of Contents
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| GENERAL INFORMATION | 1 | | Matters to be voted on at the Annual Meeting | 1 | | QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING | 2 | | PROPOSAL 1: ELECTION OF DIRECTORS | 5 | | Recommendation of the Board | 6 | | Director Nominees | 6 | | BOARD COMPOSITION AND LEADERSHIP | 9 | | Director Independence | 9 | | Board Leadership Structure | 9 | | Committees of the Board | 10 | | Board and Committee Meetings | 11 | | Compensation Committee Interlocks and Insider Participation | 11 | | Director Compensation | 11 | | CORPORATE GOVERNANCE AND SUSTAINABILITY | 13 | | Corporate Governance Guidelines | 13 | | Board Effectiveness | 13 | | Code of Business Conduct | 13 | | Board Oversight of Risk Management | 13 | | Nomination of Directors | 14 | | Stockholder Proposals and Director Nominations for the 2025 Annual Meeting | 15 | | Communications with the Board | 16 | | Sustainability | 16 | | EXECUTIVE OFFICERS | 16 | | COMPENSATION DISCUSSION AND ANALYSIS | 19 | | EXECUTIVE COMPENSATION TABLES | 41 | | PROPOSAL 2: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | 51 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 52 | | RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 55 | | Transactions in Connection with our IPO | 55 | | Indemnification Agreements | 60 | | Investments in our Funds | 60 | | Review and Approval of Transactions with Related Persons | 61 | | AUDIT COMMITTEE REPORT | 61 | | PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024 | 63 | | Recommendation of the Board | 63 | | Fees Paid to the Independent Registered Public Accounting Firm | 63 | | Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services | 64 | | ADDITIONAL INFORMATION | 64 |
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875 E. Wisconsin Avenue, Suite 800 Milwaukee, Wisconsin 53202 Proxy Statement General Information We are providing you this proxy statement in connection with the solicitation of proxies by our Board of Directors to be voted at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournments thereof. The Annual Meeting will be held virtually on Friday, June 14, 2024, at 11:00 a.m. Central Time. Please note that you will be able to attend the meeting only by means of remote communication. Representatives from our Board of Directors, certain of our executive officers, and representatives from our independent registered public accounting firm will be available at the Annual Meeting to respond to appropriate questions from stockholders. We provide our stockholders with access to proxy materials on the Internet instead of mailing a printed copy of the materials to each stockholder. On or about April 29, 2024, we will mail to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access this proxy statement and our 2023 Annual Report on Form 10-K online. The notice also provides instructions on how to vote online and how to request a printed set of proxy materials. As used in this proxy statement, “Company” refers to Artisan Partners Asset Management Inc. and, unless the context otherwise requires, its consolidated subsidiaries. MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
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| Proposal | Board Recommendation | Vote Required | | Election of Directors | FOR each nominee | Plurality of the votes present in person or by proxy | | Advisory Vote to Approve Named Executive Officer Compensation | FOR | Majority of the votes present in person or by proxy | | Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2024 | FOR | Majority of the votes present in person or by proxy |
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Questions and Answers About the Proxy Materials and Annual Meeting Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a printed set of materials? We have decided to provide access to our proxy materials over the Internet under the Securities and Exchange Commission’s “notice and access” rules. Information about how to access and review our proxy materials is included in the notice you received in the mail. The notice also explains how you may submit your vote over the Internet. You will not receive printed copies of our proxy materials unless you request them by following the instructions on the notice. If you own shares of stock in more than one account—for example, in a joint account with your spouse and in your individual brokerage account—you may receive more than one notice. To vote all of your shares, please follow the instructions provided on each notice you receive. What information does the notice contain? The notice provides information about: ▪the date, time and virtual format of the Annual Meeting; ▪the proposals to be voted on at the Annual Meeting and our Board’s recommendation with regard to each item; ▪the website where our proxy materials can be viewed; ▪instructions on how to request a paper copy of the proxy materials; and ▪instructions on how to vote by Internet, by mail or during the virtual Annual Meeting. What proposals will be voted on at the Annual Meeting? There are three proposals to be considered and voted on at the Annual Meeting. ▪The election of seven directors to serve until the 2025 annual meeting of stockholders ▪An advisory vote to approve named executive officer compensation ▪The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 Our Board is not aware of any other matters to come before the Annual Meeting. If any other matter should be properly presented for consideration at the Annual Meeting, the persons named as proxies will vote the shares represented by all valid proxy cards in accordance with their best judgment. How does the Board recommend I vote? Our Board recommends that you vote: ▪FOR each of the nominees to the Board; ▪FOR the approval of named executive officer compensation; and ▪FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. What shares can be voted at the Annual Meeting? All holders of our common stock at the close of business on April 19, 2024, are entitled to vote in connection with the Annual Meeting. On that day, we had the following numbers of shares outstanding:
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| Class A common stock | 69,906,602 | | Class B common stock | 1,718,821 | | Class C common stock | 8,749,411 | | Total shares of common stock | 80,374,834 |
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Each share of Class A, Class B and Class C common stock entitles its holder to one vote. The holders of our common stock will vote together as a single class on all matters presented to the stockholders. Pursuant to our stockholders agreement, a three-member stockholders committee, currently consisting of Eric R. Colson (Director and Chief Executive Officer), Charles J. Daley, Jr. (Executive Vice President, Chief Financial Officer and Treasurer) and Gregory K. Ramirez (Executive Vice President), has an irrevocable proxy to vote all of the shares of Class B common stock and those shares of Class A common stock that we have granted to, and are held by, our employees. Those shares that are subject to the stockholders agreement represented approximately 10.3% of the combined voting power of our common stock as of the record date, though the percentage of shares actually voted by the stockholders committee in connection with the Annual Meeting may be less than 10.3%. For more information on our stockholders agreement and stockholders committee, see “Relationships and Related Party Transactions—Transactions in Connection with our IPO—Stockholders Agreement”. How do I hold my stock? Most of our stockholders hold shares as beneficial owner through a broker or other nominee rather than directly in their own name on the records of our transfer agent. There are distinctions between shares held of record and those owned beneficially, which are highlighted below. ▪Stockholder of Record. If you hold stock that is registered directly in your name on the records of our transfer agent, Equiniti Trust Company, LLC, you are a stockholder of record. ▪Beneficial Owner. If you hold stock in an account through a broker, bank or similar institution, you are considered a beneficial owner of shares held in street name. How do I vote? If you are a stockholder of record, you may vote in one of three ways. ▪By Internet. Go to www.astproxyportal.com/ast/18158 and follow the instructions for Internet voting. You will need the control number located on your notice or proxy card, as applicable. Internet voting is available 24 hours a day. If you choose to vote by Internet, you do not need to return a proxy card. To be valid, your vote by Internet must be received by 11:59 p.m. ET, on June 13, 2024. ▪By Mail. If you request a printed copy of the proxy materials, you will receive a proxy card. You may then vote by signing, dating and mailing the proxy card in the envelope provided. To be valid, your vote by mail must be received by 11:59 p.m. ET, on June 13, 2024. ▪Virtually at the Annual Meeting. You may vote at the Annual Meeting. (See “How can I attend and vote my shares at the virtual Annual Meeting?” below.) If you are the beneficial owner of shares held in street name, you will receive voting instructions from the institution holding your shares. The availability of telephone or Internet voting will depend upon that particular institution’s voting processes. You may also attend and vote at the Annual Meeting if you register in advance. See “How can I attend and vote my shares at the virtual Annual Meeting?” below. How many votes must be present to transact business at the Annual Meeting? To conduct business at the Annual Meeting, a majority of the votes entitled to be cast must be present or represented by proxy at the virtual meeting. This is called a quorum. Abstentions will be counted as present and entitled to vote for purposes of establishing a quorum. If I submit a proxy by Internet or mail, how will my shares be voted? If you properly submit your proxy by Internet or mail and do not subsequently revoke your proxy, your shares will be voted in accordance with your instructions. If you sign, date and return a proxy card but do not give voting instructions, your shares will be voted: ▪FOR each of the nominees to the Board; ▪FOR the approval of named executive officer compensation; and ▪FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. If I am the beneficial owner of shares held in street name and do not provide voting instructions, can my broker still vote my shares? If you hold shares in street name and do not provide specific voting instructions, your broker may vote your shares with respect to the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. However, the other proposals are considered “non-routine” matters, which means that your broker may not vote your shares on these proposals without receiving voting instructions from you. When your broker submits its proxy on routine matters, but does not vote on other matters, a broker non-vote occurs with respect to those matters not voted upon. What is the vote required for each proposal? With respect to the election of directors, a plurality of the votes cast by the holders of the shares present virtually or represented by proxy and entitled to vote on the matter is required for the election of each of the seven nominees. This means that the seven nominees receiving the highest number of votes will be elected regardless of whether the number of votes received by any such nominee constitutes a majority of the number of votes cast. All of the other proposals require the affirmative vote of the holders of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will be counted as shares entitled to vote and therefore will have the effect of negative votes with respect to each proposal requiring a majority vote. Broker non-votes will not be counted as shares entitled to vote with respect to each proposal and therefore will have no effect on the voting results. How can I attend and vote my shares at the virtual Annual Meeting? If you are a stockholder of record on April 19, 2024, you can attend as well as vote at the virtual Annual Meeting by visiting https://web.lumiconnect.com/223044778 and entering the meeting password and the control number listed on your Notice Regarding the Availability of Proxy Materials. If you are the beneficial owner of shares held in street name and would like to attend and vote at the virtual Annual Meeting, you must register in advance. To register, you must obtain a legal proxy from the institution holding your shares. You must then submit a request for registration to Equiniti Trust Company, LLC by: (1) email to proxy@equiniti.com; (2) facsimile to 718.765.8730, or (3) mail to Equiniti Trust Company, LLC, Attn: Proxy Tabulation Department, 55 Challenger Road, Suite 200B, 2nd Floor, Ridgefield Park, NJ 07660. Requests for registration must be labeled as “Legal Proxy” and received by Equiniti Trust Company, LLC no later than 5:00 p.m. ET on June 10, 2024. Please contact your broker for more information. How can I change my vote or revoke a proxy? If you are a stockholder of record you may change your vote or revoke a proxy at any time prior to the Annual Meeting by submitting a written notice of revocation or a proxy bearing a later date to the attention of the Company’s Corporate Secretary at 875 East Wisconsin Avenue, Suite 800, Milwaukee, WI 53202, no later than the deadline specified on the notice or proxy card, or by voting at the virtual Annual Meeting. If you are the beneficial owner of shares held in street name you may change your vote or revoke a proxy in accordance with the instructions provided by the institution through which you hold your shares. Will I be able to ask questions during the virtual Annual Meeting?
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Stockholders will be able to transmit questions through the virtual meeting website. The Company will answer appropriate questions during the meeting or by following up with a stockholder if the stockholder provides contact information when transmitting the question through the virtual meeting website. How can I obtain technical support during the virtual Annual Meeting? Help and technical support will be available on the day of the meeting at https://go.lumiglobal.com/faq. Where and when will the voting results be available? We will file the official voting results on a Form 8-K within four business days following the Annual Meeting. If the final results are not available at that time, we will provide preliminary voting results in the Form 8-K and final results in an amendment to the Form 8-K when they become available. Who pays for the expenses of this proxy solicitation? We will pay all expenses incurred in connection with the solicitation of proxies. Proposal 1: Election of Directors Under our amended and restated bylaws, our Board sets the number of directors who may serve on the Board. The size of our Board is currently set at eight directors. On November 27, 2023, Andrew A. Ziegler retired from the Board, resulting in a vacancy. The Board has not nominated an individual to fill the vacancy and therefore the Board presently consists of seven directors. On the recommendation of the Governance and Sustainability Committee, each of our seven current directors is nominated for re-election for a one-year term expiring at our 2025 annual meeting of stockholders. Each director will hold office until his or her successor is duly elected and qualified or until the director’s earlier resignation or removal. Proxies cannot be voted for a greater number of individuals than the seven nominees named in this proxy statement. Holders of proxies solicited by this proxy statement will vote the proxies received by them as directed or, if no direction is made, for the election of the Board’s seven nominees. If any nominee is unable or declines to serve at the time of the Annual Meeting, the proxy holders may vote for a nominee designated by the Board to fill the vacancy. The Board may also determine to leave the vacancy temporarily unfilled or reduce the size of the Board in accordance with our amended and restated bylaws. Under the terms of our stockholders agreement, our stockholders committee is required to vote the shares subject to the agreement for the election of each of Mr. Barger and Mr. Colson. Under the agreement, we are required to use our best efforts to elect Mr. Barger and Mr. Colson, which efforts must include soliciting proxies for, and recommending that our stockholders vote in favor of, the election of each. The Board recommends that you vote FOR the election of each of the nominees. DIRECTOR NOMINEES
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| Independence ▪The Board is led by an Independent Chair ▪Six of the seven members of the Board are independent under the NYSE listing standards ▪All directors serving on the Audit, Compensation and Governance and Sustainability Committees are independent ▪Independent directors meet regularly without management present | Diversity ▪Of our independent directors: ▪50% are women ▪17% are ethnically diverse ▪17% identify as members of the LGBTQ+ community ▪50% of the Board's leadership positions are held by women | Tenure ▪Appropriate mix of short- and long-tenured directors ▪Two independent directors have served on the Board or in an advisory role since our founding ▪Two independent directors joined the Board in connection with our 2013 IPO ▪Two independent directors have joined in the last four years | | | | | | Knowledge, Experience and Skills of Our Board | | | | 86% Executive Leadership | 86% International Business | 71% Risk Management & Compliance | | 100% Investment Management Industry | 57% Human Capital Management | 57% Information Technology Matters | | 100% Financial Management & Reporting | 86% ESG/Sustainability Matters | 43% Government & Regulatory Matters |
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1 Leadership roles include the independent Chair of the Board and the chair of each standing Board committee. The names of our directors and their ages, positions and biographies are set forth below.
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| Name | Age | Position with the Company | | Jennifer A. Barbetta | 51 | Independent Director | | Matthew R. Barger | 66 | Independent Director | | Eric R. Colson | 55 | Director and Chief Executive Officer | | Tench Coxe | 66 | Independent Director | | Stephanie G. DiMarco | 66 | Independent Chair of the Board | | Jeffrey A. Joerres | 64 | Independent Director | | Saloni S. Multani | 45 | Independent Director |
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| | Ms. Barbetta has served on our Board and on the Governance and Sustainability Committee since October 2020. She also serves on the Compensation Committee. She is currently a managing director and chief operating officer at TA Associates. Prior to joining TA Associates in 2022, she was a senior managing director and chief operating officer at Starwood Capital Group. Prior to joining Starwood in 2019, she was a partner and managing director at Goldman Sachs. Ms. Barbetta spent more than 23 years at Goldman Sachs where she served in a variety of leadership roles within Goldman Sachs Asset Management. She currently serves on the Dean’s Advisory Council for the Villanova School of Business and the Board of Trustees of the Montclair Kimberley Academy, and formerly served on the board of directors of Queen’s Gambit Growth Capital. Through her substantial experience in the investment management industry, Ms. Barbetta brings strong leadership skills as well as deep knowledge of operational and strategic matters to the Board. | | | Mr. Barger has served on our Board since February 2013. Mr. Barger is chair of the Governance and Sustainability Committee and also serves on the Audit Committee. He is currently the managing member of MRB Capital, LLC, and he has been a senior advisor at Hellman & Friedman LLC (“H&F”) since 2007. Prior to 2007, he served in a number of roles at H&F, including managing general partner and chairman of the investment committee. Mr. Barger was a member of the advisory committee of Artisan Partners Holdings from January 1995 to the completion of our initial public offering in March 2013. Prior to joining H&F, Mr. Barger was an associate in the corporate finance department of Lehman Brothers Kuhn Loeb. He has been a director of Hall Capital Partners LLC since 2007. Mr. Barger’s expertise in the investment management industry and his broad experience in public and private directorships, finance, corporate strategy and business development provide valuable insight to the Board. | | | Mr. Colson has been chief executive officer and a director of Artisan Partners Asset Management since March 2011. Mr. Colson served as president of Artisan Partners Asset Management from March 2011 to January 2021 and as chairman of the Board from August 2015 to August 2021. He was a director of Artisan Partners Funds, Inc. from November 2013 to December 2022. Mr. Colson has served as chief executive officer of Artisan Partners since January 2010. Before serving as Artisan Partners’ chief executive officer, Mr. Colson served as chief operating officer for investment operations from March 2007 through January 2010. Mr. Colson has been a managing director of Artisan Partners since he joined the firm in January 2005. Mr. Colson’s experience as our chief executive officer makes him well qualified to serve as a director of the Board. Our Board values his substantial experience in the investment management industry and his extensive knowledge of our business. |
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| | Mr. Coxe has served on our Board since February 2013 and currently serves on the Compensation Committee and Governance and Sustainability Committee. He was a managing director of Sutter Hill Ventures from 1989 through December 2020 and joined that firm in 1987 following his tenure with Digital Communications Associates in Atlanta. Prior to that, Mr. Coxe worked with Lehman Brothers in New York City, where he was a corporate finance analyst specializing in mergers and acquisitions as well as debt and equity financing. Mr. Coxe was a member of Artisan Partners Holdings’ advisory committee from January 1995 to the completion of our initial public offering in March 2013. He currently serves on the board of directors of Nvidia Corporation and is a former director of Mattersight Corporation and PINC Solutions. Mr. Coxe’s wide-ranging leadership experience and his experiences with both public and private directorships enable him to provide additional insight to our Board and its committees. | | | Ms. DiMarco has served on our Board since February 2013 and as Independent Chair of the Board since August 2021. Ms. DiMarco founded Advent Software, Inc. in June 1983 and served Advent in various capacities over time, including as chair of its board of directors (September 2013 to July 2015), chief executive officer (May 2003 to June 2012) and chief financial officer (July 2008 to September 2009). She currently serves on the advisory board of the College of Engineering at the University of California Berkeley and the board of directors of Summer Search, a non-profit organization. She is a member of several private company boards and is an advisor to NYCA, a venture capital firm. She is a former member of the board of trustees of the University of California Berkeley Foundation, a former advisory board member of the Haas School of Business at the University of California Berkeley and a former trustee of the San Francisco Foundation where she chaired the investment committee. Ms. DiMarco’s extensive experience in technological developments for the investment management industry provides useful insight to our Board and her management experience as a founder, officer and director of Advent provide perspective on the management and operations of a public company. | | | Mr. Joerres has served on our Board since February 2013. He is currently chair of the Compensation Committee and serves as a member of the Audit Committee. Mr. Joerres was executive chairman and chairman of the board of directors of ManpowerGroup until his retirement in December 2015. From April 1999 until May 2014, he served as chief executive officer of ManpowerGroup. Mr. Joerres currently serves on the boards of directors of ConocoPhillips and Western Union. He is also past chairman and director of the Federal Reserve Bank of Chicago, a former director of Johnson Controls International plc, and a former trustee of the U.S. Council for International Business. Our Board values Mr. Joerres’s global operating and leadership experience and his innovative approach to optimizing human capital. In addition, his substantial experience on public company boards enables him to provide guidance to our Board with respect to the management and operations of a public company. |
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| | Ms. Multani has served on our Board since August 2021 and is currently chair of the Audit Committee. Ms. Multani is currently a partner at Galvanize Climate Solutions, a climate-focused investment firm based in San Francisco. Prior to that, Ms. Multani served as the Chief Financial Officer of the Joe Biden presidential campaign, a position she held between May and November of 2020. Between December 2016 and April 2020, Ms. Multani focused on investing in companies in the sustainability ecosystem, working with Three Cairns Group, a family office and Congruent Ventures, an early stage venture firm. During 2016, Ms. Multani served as a consultant at Hellman & Friedman LLC, after having also worked there from 2006 to 2012. Between her time at Hellman & Friedman, Ms. Multani was a partner and investment team member at SPO Partners, a specialty long-only investment firm. She began her career in 2000 as an analyst at Blackstone. Ms. Multani brings substantial experience with investment management operations to the Board, as well as a deep knowledge of sustainability and climate-focused investing. In addition, her extensive financial and accounting experience strengthens our Board through her understanding of accounting principles, financial reporting rules and regulations, and internal controls. |
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We believe that our directors collectively have the skills and experience to oversee and guide our business. Each director has the integrity, business judgment and collegiality that are among the essential characteristics for membership on our Board. Additionally, each director is a committed and engaged member of the Board. Our directors bring highly developed skills and substantial knowledge in, among other areas, finance, business operations, corporate strategy and business development. In addition, members of our Board have had a great diversity of experiences and bring to our Board a wide variety of perspectives that enhance their ability to provide direction to the Company. They have had wide-ranging leadership experience and extensive involvement across a range of industries and in the investment management and financial services industries in particular. Board Composition and Leadership DIRECTOR INDEPENDENCE Our Corporate Governance Guidelines provide that a majority of our directors must satisfy the criteria for independence under the NYSE listing standards and not have any material relationship with the Company. Seven of the eight directors who held office during 2023 were independent directors. Our Board determined that each of Jennifer A. Barbetta, Matthew R. Barger, Tench Coxe, Stephanie G. DiMarco, Jeffrey A. Joerres, Saloni S. Multani and Andrew A. Ziegler were independent in accordance with the NYSE listing standards and our Corporate Governance Guidelines. The Board presently consists of seven directors, six of whom are independent. On November 27, 2023, Andrew A. Ziegler retired from the Board, resulting in a vacancy. The Board has not nominated an individual to fill the vacancy and therefore the Board presently consists of seven directors, six of whom are independent. BOARD LEADERSHIP STRUCTURE Ms. DiMarco has served as independent Chair of the Board since August 2021. The independent Board Chair’s principal responsibilities include: assisting with the development of the agenda for and chairing Board meetings, serving as a key source of communication between the independent directors and the Chief Executive Officer; ensuring the quality, quantity and timeliness of information from executive management to independent directors; and coordinating the agenda for and leading executive sessions and meetings of the independent directors. The Board believes that this leadership structure is the most appropriate structure for the Company at this time because it promotes balance between the Board’s independent authority to oversee the business and the Chief Executive Officer and management team who manage the business on a day-to-day basis. COMMITTEES OF THE BOARD The Board conducts its business through meetings of the Board and its committees. The Board has three standing committees: the Audit Committee, the Compensation Committee and the Governance and Sustainability Committee. Each committee operates in accordance with a written charter, which is approved by the Board. The charters are available on our website at www.apam.com. The current members and chairs of the committees are:
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| Director | Audit Committee | Compensation Committee | Governance and Sustainability Committee | | Jennifer A. Barbetta | | X | X | | Matthew R. Barger | X | | Chair | | Eric R. Colson | | | | | Tench Coxe | | X | X | | Stephanie G. DiMarco | | | | | Jeffrey A. Joerres | X | Chair | | | Saloni S. Multani | Chair | | | | | 100% Independent | 100% Independent | 100% Independent |
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Audit Committee The Audit Committee is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. It is comprised solely of directors who meet the independence requirements under the NYSE listing standards and the Exchange Act, and who are “financially literate” under the NYSE rules. The Board has determined that each member of the Audit Committee has “accounting or related financial management expertise” and qualifies as an “audit committee financial expert”. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to, among other matters: ▪the integrity and quality of our financial statements; ▪our compliance with legal and regulatory requirements; ▪the independent auditor’s qualifications, independence and performance; and ▪our internal audit function. Governance and Sustainability Committee The Governance and Sustainability Committee is comprised solely of directors who meet the independence requirements under the NYSE listing standards. The responsibilities of the Governance and Sustainability Committee include: ▪making recommendations to the Board regarding the selection of candidates for service on the Board and the suitability of proposed nominees as directors; ▪periodically reviewing the Company’s Corporate Governance Guidelines and recommending changes to the Board, as needed; ▪overseeing the evaluation of the Board and its committees; and ▪overseeing the Company’s approach to sustainability matters, including environmental, social and governance (ESG), and diversity, equity and inclusion (DEI) matters that are significant to the Company. Compensation Committee Each member of the Compensation Committee is independent under the NYSE listing standards. Among other things, the Compensation Committee: ▪reviews and approves, or makes recommendations to our Board with respect to, the compensation of our executive officers; ▪oversees and makes recommendations to our Board with respect to incentive compensation plans; and ▪makes recommendations to our Board with respect to director compensation. BOARD AND COMMITTEE MEETINGS During 2023, our Board held five meetings, the Audit Committee held nine meetings, the Compensation Committee held five meetings and the Governance and Sustainability Committee held five meetings. As a matter of policy, it is expected that all directors should make every effort to attend meetings of the Board and meetings of the committees of which they are members. During 2023, seven of eight directors attended at least 75% of the aggregate number of meetings of the Board and meetings of the committees of which he or she was a member. Tench Coxe attended 69% of such meetings. Executive sessions of our independent directors are generally held in connection with each regularly scheduled Board meeting. Our independent Chair of the Board presides over all executive sessions of independent directors. We encourage all of our directors to attend our annual meetings of stockholders. Five of our directors attended the 2023 annual meeting. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The members of the Compensation Committee during fiscal year 2023 were Jennifer A. Barbetta, Tench Coxe, and Jeffrey A. Joerres (Chair). Each member of the Compensation Committee is an independent director under the rules of the NYSE and our Corporate Governance Guidelines. None of the members of the Compensation Committee has been an officer or employee of the Company. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board. In connection with our initial public offering, we entered into agreements with the limited partners of Artisan Partners Holdings, including with entities associated with Tench Coxe. Information about the agreements, and transactions thereunder, are more fully discussed in “Relationships and Related Party Transactions—Transactions in Connection with our IPO”. Members of our Compensation Committee from time to time invest in the firm’s investment vehicles, including mutual funds, Artisan-sponsored private funds or Artisan-branded collective investment trusts. These transactions are more fully discussed in “Relationships and Related Party Transactions—Investments in our Funds.” DIRECTOR COMPENSATION The Compensation Committee is responsible for periodically reviewing non-employee director compensation and recommending changes, if appropriate, to the full Board. In connection with this review, the Compensation Committee considers information provided by McLagan, our compensation consultant, including data regarding the total compensation paid to directors at peer companies, as well as information on the individual components of that compensation. The objective of our director compensation program is to compensate our highly qualified non-employee directors for their time, efforts and contributions, and to attract highly qualified non-employee director candidates for potential future service on the Board. For fiscal year 2023, the director compensation program entitled non-employee directors to a cash component, designed to compensate directors for their service on the Board, and an equity component, designed to align the interests of the directors with those of the Company’s stockholders. For 2023, the standard equity component of the Company’s director compensation program consisted of $125,000 of restricted stock units for each of the non-employee directors awarded under the Artisan Partners Asset Management Inc. 2013 Non-Employee Director Compensation Plan. Each outstanding restricted stock unit entitles the holder to dividend equivalent rights on one outstanding share of Class A common stock. The shares of Class A common stock underlying the restricted stock units will be delivered on the earlier to occur of (i) a change in control of the Company and (ii) the termination of the director’s service on the Board. During 2023, each of Ms. Barbetta, Mr. Barger, Mr. Coxe, Ms. DiMarco, Mr. Joerres and Ms. Multani was entitled to receive a cash payment of $75,000, paid in four quarterly installments. Our independent Chair of the Board was entitled to receive an additional cash retainer of $125,000. The chair of our Audit Committee was entitled to receive an additional cash retainer of $50,000, and the chairs of each of the Compensation Committee and Governance and Sustainability Committee were entitled to receive an additional cash retainer of $40,000. Each of Ms. Barbetta, Mr. Barger, Mr. Coxe, Ms. DiMarco, Mr. Joerres and Ms. Multani elected to receive the value of this cash compensation in the form of additional restricted stock units. As a result, an additional number of restricted stock units were granted to each of them in January 2023, the value of which equaled the amount of cash compensation to which each director was entitled. One-quarter of the units awarded to each director in lieu of cash compensation vested in each quarter of 2023. Andrew A. Ziegler retired from the Board on November 27, 2023. For his service during 2023, Mr. Ziegler received both the equity component and cash component of the 2023 director compensation program. Upon his resignation, his 53,897 outstanding restricted stock units were canceled and the Class A common shares underlying the restricted stock units were delivered to him. All directors are reimbursed for reasonable out-of-pocket expenses incurred by them in connection with attending Board, committee and stockholder meetings, including those for travel, meals and lodging. These reimbursements are not reflected in the table below. Mr. Colson does not receive any additional compensation for serving on the Board.
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| (1) On December 31, 2023, Ms. Barbetta had 13,809 restricted stock units outstanding. | | (2) On December 31, 2023, Mr. Barger had 56,955 restricted stock units outstanding. | | (3) On December 31, 2023, Mr. Coxe had 46,612 restricted stock units outstanding. | | (4) On December 31, 2023, Ms. DiMarco had 63,465 restricted stock units outstanding. | | (5) On December 31, 2023, Mr. Joerres had 56,955 restricted stock units outstanding. | | (6) On December 31, 2023, Ms. Multani had 13,080 restricted stock units outstanding. | | (7) Upon his resignation on November 27, 2023, Mr. Ziegler’s 53,897 restricted stock units were canceled and the Class A shares underlying the restricted stock units were delivered. On December 31, 2023, Mr. Ziegler was no longer a director and had no restricted stock units outstanding. |
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| What we do | | What we don't do | | | • | Align pay with performance; majority of compensation is performance based | • • | Employment agreements Bonus guarantees | | • | Require that approximately 1/2 of all equity awarded includes career vesting conditions | • | Retirement income or pension plans other than the same 401(k) plan available to all employees | | • | Utilize double-trigger change in control provisions on all equity awarded to named executive officers | • | Benefit plans or perquisites that cover only one or more of our executive officers | | • | Maintain equity ownership guidelines requiring a significant amount of Company equity be held by executive officers | • • | Allow for short sales or hedging of Company stock “Golden parachute” tax gross ups | | • | Maintain a clawback policy that complies with applicable law | | | | • | Retain an independent compensation consultant | | | | • | Impose restrictions on the pledging of Company stock | | |
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2023 Executive Compensation Overview The core elements of our named executive officers’ compensation are cash-based salary, a performance-based cash bonus and long-duration equity awards, one-half of which contain career vesting provisions. For 2023, 92% of our Chief Executive Officer’s compensation was based on performance. For our other named executive officers, performance-based compensation ranged from 86% to 94%. The following table shows the elements of compensation paid to our named executive officers with respect to 2023, 2022 and 2021. The amounts in this table vary from the data and reporting conventions required by SEC rules in the Summary Compensation Table.
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| | | | Performance-Based Compensation | | | | | | | | | | Equity Awards | | | | | Name & Principal Position | Year | Salary | Cash Bonus | Standard Grant | Career Grant | Total Direct Compensation | Performance- Based as % of Total | | Eric R. Colson | 2023 | $500,000 | $4,000,000 | $753,434 | $753,434 | $6,006,868 | 92% | | Chief Executive Officer | 2022 | 500,000 | 4,235,000 | 997,040 | 997,040 | 6,729,080 | 93% | | | 2021 | 500,000 | 5,500,000 | 962,358 | 962,358 | 7,924,716 | 94% | | Charles J. Daley, Jr. | 2023 | 300,000 | 1,613,000 | 404,327 | 404,327 | 2,721,654 | 89% | | Chief Financial Officer | 2022 | 300,000 | 1,613,000 | 402,770 | 402,770 | 2,718,540 | 89% | | | 2021 | 300,000 | 2,250,000 | 351,373 | 351,331 | 3,252,704 | 91% | | Jason A. Gottlieb | 2023 | 300,000 | 3,200,000 | 753,434 | 753,434 | 5,006,868 | 94% | | President | 2022 | 300,000 | 3,058,000 | 706,798 | 706,798 | 4,771,596 | 94% | | | 2021 | 300,000 | 3,300,000 | 962,358 | 962,358 | 5,524,716 | 95% | | Christopher J. Krein | 2023 | 300,000 | 1,650,000 | 444,524 | 444,524 | 2,839,048 | 89% | | Head of Global Distribution | 2022 | 300,000 | 1,800,000 | 442,064 | 442,064 | 2,984,128 | 90% | | | 2021 | 300,000 | 2,000,000 | 641,679 | 641,679 | 3,583,358 | 92% | | Eileen L. Kwei1 | 2023 | 300,000 | 1,250,000 | 311,427 | 311,427 | 2,172,854 | 86% | | Chief Administrative Officer | | | | | | | | | 1 Ms. Kwei was not a named executive officer in 2022 or 2021. | | | | | | | |
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▪Base salaries for our named executive officers have remained unchanged since 2018. ▪2023 performance-based compensation (i.e., cash bonus and equity awards) paid to our chief executive officer for 2023 decreased 12% relative to 2022, reflecting a slight decline in our financial results and a less than anticipated improvement in net client cash outflows. Changes in performance-based compensation paid to our other named executive officers for 2023 ranged from a 5% decrease to a 5% increase compared to 2022, based on the key accomplishments of each named executive officer. EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES Fundamental to our executive compensation program is the belief that, for the benefit of all our stakeholders, executive compensation should be tied to the firm’s purpose and the drivers of its long-term success. The firm’s purpose is—and has been since its founding—to generate and compound wealth over the long term for its clients. To achieve our purpose, we must continue to thoughtfully grow our business over the long term while preserving a stable environment in which our talented investment professionals and associates can thrive. Maintaining our talent-driven business model and investment-focused culture is critical to generating sustainable, long-term outcomes for clients, which in turn is critical to generating sustainable long-term outcomes for stockholders. Our executive compensation program is designed to keep executive officers oriented on the firm’s long-term success. Our Compensation Committee structures executive compensation over long time horizons and evaluates executive officers’ performance based on the quality and execution of the firm’s long-term strategic objectives and key priorities.
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| Predetermined formulas and quantitative targets are avoided because they all too often result in inhibiting innovation and engineering short-term financial results. Predetermined formulas could also limit the Compensation Committee’s ability to modify levels of performance-based compensation in response to rapidly changing market or economic conditions that are outside the firm’s control. | Our proven approach to executive compensation appropriately reflects our unique business model, history and culture. We avoid a “one-size-fits-all” approach in favor of a tailored executive compensation program that has consistently worked well for us. |
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The Compensation Committee’s approach to evaluating executive officers’ performance and determining the amount and mix of performance-based compensation reflects the following key principles, which are embedded within our annual executive compensation process. Key Principles 1.The amount of performance-based compensation should initially be considered based on the accomplishment of strategic objectives and key priorities. 2.The amount of performance-based compensation should then be adjusted to reflect the firm’s financial and operating results. 3.The mix of equity and cash performance-based compensation should serve to align executive officers’ interests with those of the firm’s clients, stockholders and key investment professionals. 4.Our approach to compensation should reflect Who We Are as a firm—a high value-added investment firm, designed for investment talent to thrive, and committed to thoughtful growth over the long term. PROCESS FOR DETERMINING EXECUTIVE COMPENSATION The Compensation Committee has established a comprehensive process for determining executive compensation as shown below and discussed in detail under “2023 Executive Compensation Process and Decisions”.
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| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | | ▪Review strategic objectives and establish key priorities for year ▪Confirm key measures used to assess the firm’s financial and operational performance for the year ▪Approve aggregate and individual maximum amounts of performance-based compensation for the year ▪Consider shareholder feedback | ▪Discuss status of strategic objectives and key priorities ▪Review key measures over multiple time horizons to assess firm's performance ▪Consider shareholder feedback | ▪Discuss status of strategic objectives and key priorities ▪Review key measures over multiple time horizons to assess firm's performance ▪Review say-on-pay vote result and consider shareholder feedback | ▪Discuss status of strategic objectives and key priorities ▪Review key measures over multiple time horizons to assess firm's performance ▪Consider McLagan's market analysis ▪Consider shareholder feedback | | ▪Review executive officers' key accomplishments vis-à-vis strategic objectives and key priorities and consider amount of performance-based compensation ▪Review key measures used to assess performance of the firm and adjust performance-based compensation accordingly ▪Determine cash/equity mix of performance-based compensation | | | |
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Role of the Board of Directors and Chief Executive Officer Our Chief Executive Officer evaluates the performance of, and makes recommendations to, our Compensation Committee regarding the compensation of our other executive officers. Our Compensation Committee, which is comprised solely of directors who qualify as independent under applicable SEC and NYSE rules, generally has ultimate responsibility for compensation decisions relating to all of our executive officers. Other members of the Board regularly attend and participate in meetings of the Compensation Committee, and the members of the Compensation Committee and Board regularly meet in executive session without management present. The decisions of the Compensation Committee are reported to the full Board and the full Board approves the annual long-term incentive award upon the recommendation of the Compensation Committee. Role of the Independent Compensation Consultant Our Compensation Committee has retained McLagan as its independent compensation consultant. McLagan provides the Compensation Committee with information on competitive pay levels for our executive officers vis-à-vis an executive reference group consisting of both public and private asset management firms, as well as a proxy peer group. McLagan also provides the Compensation Committee with information about compensation trends in the investment management industry generally. The Compensation Committee considers the information provided by McLagan within the context of our differentiated philosophy and approach to executive compensation. Our Compensation Committee has assessed the independence of McLagan pursuant to SEC rules and concluded that no conflict of interest exists that prevents McLagan from independently advising the Compensation Committee. Peer Group Compensation Review We do not seek to benchmark our executive compensation to that of our peers. Instead, the Compensation Committee regards peer group pay levels and performance information as a reasonable reference point and one of multiple perspectives considered when determining executive compensation. Stakeholder Feedback In an effort to further a comprehensive understanding of our executive compensation philosophy and approach, we initiated targeted engagement efforts in 2023. We invited our top 20 active and top five passive institutional stockholders, representing, as of December 31, 2022, approximately 57% of our outstanding shares, and approximately 72% of our publicly held Class A shares to participate in a call with members of our executive management team. In response to our invitation, we met with five of our active institutional stockholders (representing just over 11% of our publicly held Class A shares). No issues regarding the structure of our executive compensation program or the amounts of compensation paid were raised during these meetings. We also regularly engage with our employees, who collectively held approximately 10.3% of our outstanding common stock as of the record date. And we reach out to our Class C stockholders, who collectively held approximately 10.9% of our outstanding common stock as of the record date, on a quarterly basis. We expect to continue to engage with all of our stockholders on a regular basis to further a comprehensive understanding of, and foster an open dialogue about, our executive compensation program. The Compensation Committee will continue to consider enhancements to the executive compensation program in the future based on the feedback we receive. The Compensation Committee also considers the results of the Company’s advisory vote on compensation when determining the amount and form of compensation paid to the named executive officers and the structure of the executive compensation program generally. At the 2023 annual meeting of stockholders, the advisory vote on executive compensation received stockholder support with approximately 92.5% of the votes cast in favor of our named executive officers’ compensation. The Compensation Committee values this input from our stockholders. Tax and Accounting Considerations When it reviews compensation matters, our Compensation Committee considers the anticipated tax and accounting treatment of various payments and benefits to the Company and, when relevant, to its executive officers. The Compensation Committee believes that accounting and tax considerations are only one of many aspects of determining executive compensation and therefore such considerations should not unduly influence the overall design of the executive compensation program. 2023 EXECUTIVE COMPENSATION PROCESS AND DECISIONS Establish 2023 Executive Compensation Framework ✓ During the first quarter of 2023, the Compensation Committee and, with respect to the approval of the key priorities, the Board: ▪Determined that the aggregate maximum amount of executive officers’ performance-based compensation for 2023 would be 8% of Artisan’s 2023 adjusted operating income, further adjusted to add back long-term incentive compensation expense and executive performance-based cash bonuses. ▪Determined that the maximum performance-based cash bonus for each executive officer would be 200% of their total 2022 performance-based compensation (cash bonus and equity award combined). ▪Agreed upon the key measures that would be used to assess the firm’s operating and financial performance for the year and over the long term, which continued to be as follows:
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| Long-Term Growth and Value Creation Measures | Stability and Predictability Measures | | - AUM Growth | - Adjusted Operating Margin | | - Revenue Growth | - Weighted Average Management Fee | | - Sales Growth | - Investment Performance |
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▪Approved a set of strategic objectives for the firm and key priorities for the members of the executive management team, as follows:
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| Our Purpose: Generate and compound wealth over the long term for our clients | | | | | Investments | Business Management | Financials | Sustainability | | Strategic Objective: ▪Maintain our talent-driven business model and investment-focused culture by managing the alignment of, and resources for, the firm’s investment professionals. | Strategic Objective: ▪Provide a distraction-free investment environment that allows our investment professionals to focus on delivering high value-added investment results. | Strategic Objective: ▪Navigate short-term market volatility with our financial model that emphasizes variable expenses, healthy operating margins and fee levels reflective of our high value-added investment. | Strategic Objective: ▪Promote and improve the sustainability of the firm, both in terms of its business model and investment activities. | | Key Priorities: ▪Continue to build and manage investment operations to support the growing range of investment capabilities focusing on credit, privates and China. ▪Focus the Investment Strategy Group on the capitalization of early-stage growth strategies. ▪Opportunistically evaluate new investment teams and talent in pursuit of thoughtful growth. | Key Priorities: ▪Continue to evolve the distribution structure to align with investment teams and breadth of strategies. ▪Focus on building a foundational asset base in early-stage growth strategies. ▪Evolve the marketing and communication group to manage increased digital communication and strengthen sales support. ▪Formalize the Chief Operating Officer role with focus on supporting the increasing breadth and complexity of investments. ▪Develop a holistic approach to human capital that integrates talent management, working environment, resources and communication. | Key Priorities: ▪Manage financial alignment to our business model. | Key Priorities: ▪Execute on the firm's sustainability initiatives. |
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Strategic objectives are broad statements that reflect how the firm will achieve its purpose and further its long-term strategy for sustainable growth. The strategic objectives are shaped by Who We Are and our belief that steadfast adherence to our business and financial models will minimize risk and provide opportunities for long-term growth and value creation. Accordingly, the strategic objectives generally remain consistent year over year. Key priorities address areas of opportunity and disruption that warrant management’s focus—whether for purposes of pursuing long-term value creation or managing risk. The key priorities are more tactical in nature and may have long time horizons, with progress towards goals evaluated on an annual basis. The key priorities approved by the Board in January 2023 were communicated to the executive officers. At each subsequent quarterly meeting in 2023, the Compensation Committee discussed the status of the key priorities and considered the key measures year-to-date and over the long term to assess the Company’s business and financial performance. Review Key Accomplishments and Consider Performance-Based Pay ✓
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| At the end of the year, the Compensation Committee, together with the full Board, assessed the executive officers’ performance based on their continued adherence to the strategic objectives and their accomplishment of key priorities over both annual and long-term time horizons. The Board strongly believes that executive officers’ performance must be evaluated in terms of long-term value creation—not only short-term results. | Successful outcomes for clients and stockholders result from years of thoughtfully developing and evolving the business; then remaining patient and disciplined while growth is realized. |
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Key accomplishments relative to 2023 strategic objectives and key priorities consisted of the following:
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| Our Purpose: Generate and compound wealth over the long term for our clients | | | | | Investments | Business Management | Financials | Sustainability | | Key Accomplishments Consistent with our key priorities: ▪Closed on $130 million in commitments for the Dislocation Opportunities Fund, the Credit team’s first closed-end, drawdown vehicle. ▪Funded new accounts for EMsights Capital Group’s investment strategies. ▪Continued to broaden investment teams and further expand their investment capabilities. ▪Evaluated potential new investment teams and talent across traditional and alternatives asset classes. ▪Completed a significant industrialization of investment operations, vehicles, technology, data, trading oversight, and performance & portfolio analytics. | Key Accomplishments Consistent with our key priorities: ▪Evolved our distribution structure, resources and operations to better align our dedicated distribution teams and centralized sales functions across servicing and sales. ▪Won new relationships in early-stage strategies managed by the Credit team and EMsights Capital Group. ▪Secured strong pipeline and increased interest in certain strategies not yet at scale. ▪Began to explore and plan for the evolution of the marketing and communications group. ▪Established the Chief Operating Officer role, with a focus on expanding and organizing investment operations. ▪Expanded the Chief Administrative Officer role to encompass IT and data, and a broader focus on communications. ▪Executed on the succession plan within the Legal team, including the transition of the Chief Legal Officer role and the onboarding of a new Global Chief Compliance Officer. | Key Accomplishments Consistent with our key priorities: ▪Earned $975.1 million in revenue. ▪Maintained a weighted average management fee rate of approximately 70 bps. ▪Returned a total of $228 million to shareholders in the form of dividends and distributions. ▪Declared $2.78 of dividends per share with respect to 2023. ▪Maintained focus on expense management while continuing to make investments to support our strategic growth initiatives. ▪Managed balance sheet to maintain the financial flexibility needed to navigate uncertainty in the financial markets. | Key Accomplishments Consistent with our key priorities: ▪Continued to support investment teams’ sustainability research, decision-making and client communications with relevant data, research and guidance. ▪Continued to make progress on the firm’s sustainability initiatives including the voluntary disclosure of Scope 1 and 2 GHG emissions and further enhancements to the firm’s Corporate Sustainability Report. ▪Continued execution on the firm’s diversity, equity and inclusion efforts. |
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After assessing executive officers’ performance, the Compensation Committee considered an appropriate amount of performance-based compensation (i.e., cash bonus and equity awards) for Mr. Colson, as well as his recommendations with respect to the performance-based pay for each other executive officer. In doing so, the Compensation Committee referred to the maximum amount of performance-based compensation for executive officers in the aggregate and the maximum performance-based cash bonus for each executive officer individually, each as established by the Compensation Committee in January 2023. ▪The maximum amount of performance-based compensation for executive officers in the aggregate for 2023 was determined to be $30.4 million. This amount represents 8% of 2023 adjusted operating income, further adjusted to add back long-term incentive compensation expense and executive performance-based cash bonuses.1 ▪The maximum performance-based cash bonus for each executive officer was equal to 200% of their total 2022 performance-based compensation (cash bonus and equity award combined), as shown below. 1 Adjusted measures are non-GAAP measures. See Annex A for non-GAAP reconciliations.
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| Name | 2023 Maximum Performance-Based Cash Bonus ($) | | Eric R. Colson | $12,458,160 | | Charles J. Daley, Jr. | 4,837,080 | | Jason A. Gottlieb | 8,943,192 | | Christopher J. Krein | 5,368,254 | | Eileen L. Kwei | 3,583,766 |
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The Committee agreed that 2023 performance-based compensation for each named executive officer would ultimately be determined by applying negative discretion to the maximum amounts of performance-based compensation set forth above after assessing the key accomplishments and considering the firm’s financial and operating results as follows. Align Performance-Based Pay with Financial and Operating Results ✓
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| In keeping with the process described above, the Compensation Committee then sought to align the amount of performance-based compensation with the Company’s current year financial and operating results. The Compensation Committee used a number of key financial and non-financial measures to evaluate how the firm’s performance compares to its historical performance and the performance of its peers. Consistent with the drivers of the firm’s long-term success, these key measures are focused on either (i) long-term growth and value creation or (ii) the preservation of a stable and predictable environment. In all cases, these measures are considered over both annual and longer-term time horizons, focusing on the long-term health and sustainability of the firm. | The assessment of the firm’s performance also informs management’s recommendation and the Board’s decision regarding the size of the firm’s annual long-term incentive award, which consists of both the annual franchise capital award for investment team members and the annual APAM equity award. |
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Long-Term Growth and Value Creation Measures ▪Assets Under Management (AUM) Growth Trends. Changes in our AUM is the primary driver of changes in revenue. Over short-term periods, the amount and composition of our AUM is influenced by a variety of factors, including, among others: •Investment performance, relating to fluctuations in global financial markets as well as our own investment decisions; •Flows into and out of our investment strategies and vehicles; •Our decision to limit capacity in certain strategies and vehicles; and •Industry trends and investor sentiment. Over the long-term, we expect to generate AUM growth primarily through investment returns, which is consistent with our historical experience. In billions. "New Strategies" refers to strategies launched during the indicated periods. ▪Revenue Growth Trends. The firm derives nearly all of its revenue from investment advisory fees, the vast majority of which are based on average AUM. As a result, changes in our AUM for whatever reason have a direct and significant impact on our revenue. ▪Sales Growth Trends. The sales growth rate represents flows of client assets into and out of the firm’s investment strategies and vehicles. In recent years, market trends and other forces, including the current regulatory environment, have created headwinds for traditional asset management firms. Passive and alternative investment options continue to grow organically while traditional strategies have experienced net outflows. In response, we have continued to build out our alternatives capabilities and increased degrees of investment freedom within our existing investment strategies. We also regularly evaluate potential new investment teams and talent to enhance and expand our investment platform. Stability and Predictability Measures ▪Adjusted Operating Margin. We seek to maintain healthy operating margins reflective of the firm’s highly variable cost structure. This cost structure is an essential component of our transparent and predictable financial model, which provides consistency and stability, even in times of market volatility. Investments in strategic growth initiatives, like those we made in 2022 and 2023, generally cause the portion of expenses that are fixed to increase causing operating margins to decline. These declines may be amplified when combined with difficult market conditions that lead to a decrease in revenue. Despite the impact our recent investments had on our adjusted operating margin, we are committed to reinvesting in the business to support our long-term growth.
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| Change | 1.2% | -0.8% | -1.3% | 4.3% | 4.3% | -9.8% | -2.7% |
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| Adjusted Operating Margin is calculated by dividing adjusted operating income by total revenues. Adjusted operating income for 2016 and 2017 excluded the impact of certain pre-offering compensation expense and for 2021 through 2023 excluded compensation expense related to market valuation changes within long-term incentive compensation plans. GAAP Operating Margin was 32.5%, 36.0%, 36.8%, 35.5%, 39.8%, 44.0%, 34.6% and 31.1% for 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively. Adjusted measures are non-GAAP measures. See Annex A for non-GAAP reconciliations. |
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▪Weighted Average Management Fee. Over time, our weighted average management fee has declined, primarily as a result of a decrease in the proportion of our AUM managed in higher fee pooled investment vehicles. However, in general the firm has been successful in maintaining an attractive overall rate of fee due to the strength of our investment performance and our focus on limited capacity, high value-added investment strategies.
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| Change | -1.7 | -0.5 | -1.0 | -0.7 | -0.2 | -0.5 | -0.4 |
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▪Investment Performance. We evaluate investment performance in a variety of ways, always focusing on the long-term results generated for our clients. Among other measures and methodologies, we assess the performance of each Artisan investment strategy relative to its respective benchmark (i.e., value-added) and we consider the percentage of our AUM that is managed in strategies for which the average annual gross composite return exceeded its benchmark return.
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| Represents the amount in basis points by which the average annual gross composite returns of Artisan investment strategies, in the aggregate, outperformed or underperformed their respective benchmarks, over the time periods indicated. Trailing Asset Weighted Value-Added Returns is calculated based on the monthly gross composite performance of each Artisan strategy against its respective benchmark and weighted by the beginning of period AUM. Additional information regarding the calculation of investment performance can be found in Annex A. |
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| Represents the percentage of our assets under management managed in strategies for which the average annual gross composite return exceeded the strategy's respective benchmark. Performance is measured for the average annual periods ended on the indicated dates. Includes assets under management in all strategies in operation throughout the period. The percentage of AUM since inception period for 2020, 2021, 2022 and 2023 is rounded up to 100% from 99.99%, 99.76%, 99.60% and 99.64%, respectively. |
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The executive team made excellent progress on the firm’s strategic objectives and key priorities during 2023, focusing on those priorities that are vital to the firm’s long-term success. Significant strides were made in terms of expanding our investment capabilities and building out our operating platform. In addition, we made significant progress toward the multi-year evolution of our distribution model, resulting in a new distribution structure and approach that enhances the alignment of resources across servicing and sales functions. The investments made to achieve these goals, however, negatively impacted our adjusted operating margin in the short term—an expected outcome of focusing on long-term value creation and our sustainable growth. Additionally, despite making progress toward the evolution of our distribution model during the year, net client cash outflows for 2023 remained higher than anticipated. During 2023, our assets under management increased to $150.2 billion, an increase of $22.3 billion, or 17%, compared to $127.9 billion at December 31, 2022. Average assets under management for 2023 were $139.3 billion, a decrease of 1.6% from the average of $141.5 billion for the prior year. Tracking the decrease in average assets under management, we earned $975.1 million in revenue for 2023, a 2% decrease from revenues of $993.3 million for 2022. Based on the process described above, the Compensation Committee determined the total amount of performance-based compensation for each named executive officer as follows:
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| Name | 2023 Total Performance-Based Compensation ($) | Percentage Change 2023 v. 2022 | | Eric R. Colson | $5,506,868 | (12)% | | Charles J. Daley, Jr. | $2,421,654 | —% | | Jason A. Gottlieb | $4,706,868 | 5% | | Christopher J. Krein | $2,539,048 | (5)% | | Eileen L. Kwei | $1,872,854 | 5% |
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Over the years, this evaluation process has ensured that executive compensation is aligned with the firm's financial results and is appropriate in light of the then-current market and economic conditions impacting our business. Given how rapidly these conditions, and therefore our performance, can change, the ability to make adjustments that are not driven by predetermined formulas is critical. And our proven process provides the measured flexibility needed to do so. Determine Mix of Performance-Based Pay ✓ Once the amount of performance-based compensation was set, the Compensation Committee determined the appropriate mix of equity and cash for each executive officer. In making this determination, the Compensation Committee considered (i) the amount of equity available to be granted to executive officers and (ii) the alignment of executive officers’ interests with the firm’s clients, stockholders and key investment professionals.
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| The amount of equity available to be granted to executive officers is impacted by the firm’s long-standing philosophy on the allocation of long-term incentive awards. Artisan Partners is a people business. The firm’s success is dependent on the talented investment professionals who manage its investment strategies and have been primarily responsible for the strong investment returns achieved for clients. Therefore, we believe it is critically important that we provide compensation that attracts, motivates and retains these investment professionals and aligns their long-term economics with those of the firm’s clients and stockholders in a way that is sustainable over time. To that end, the vast majority of long-term incentive awards (generally 85% to 90%) are awarded to the firm’s investment professionals—none of whom are executive officers. The remaining award, in the form of equity, is then allocated to key leaders and members of the firm’s management team, including the executive officers. | Annual Long-Term Incentive Award Our annual long-term incentive award consists of equity-based awards (described below) and franchise capital awards. Franchise capital awards are cash awards granted to investment professionals that are subject to the same long-term vesting and forfeiture provisions as our equity-based awards. Prior to vesting, franchise capital awards are generally invested in one or more of the investment strategies managed by the grantee’s investment team, thereby enhancing the alignment between our investment professionals and clients. When determining the size of the annual long-term incentive award, we first establish the amount of the investment teams' franchise capital award, which we currently expect to equal approximately 4% of the prior year's management fee revenue. The balance of the long-term incentive award—an amount that is largely determined by the firm's performance—consists of equity-based awards granted to our associates, including certain investment professionals, the executive officers, and other key leaders. |
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This approach results in a limited amount of equity available to be granted to executive officers each year and, generally, a larger proportion of performance-based compensation being paid in cash. This outcome has several advantages. Receiving a significant performance-based cash bonus each year mitigates the incentives executive officers may otherwise have to sell equity upon vesting for liquidity or tax reasons. Instead, the majority of equity awards continue to be held by executive officers long after they vest. In addition, larger performance-based cash bonuses provide executive officers with the capital required to make meaningful investments in the firm’s investment strategies—a practice that is strongly encouraged. The Compensation Committee believes that executive officers should hold a significant amount of equity in the firm relative to their total annual compensation and that a substantial portion of that equity should remain at risk throughout their career with the firm. The amount of equity considered significant varies for each executive officer depending on his or her specific circumstances and it may take a number of years for an executive to reach an amount that is truly significant. Executive officers with a long tenure at the firm already have a significant amount of equity at risk given the long-duration nature of the firm’s equity-based awards. When allocating equity, such an executive officer may receive a larger proportion of their annual performance-based compensation as a cash bonus so that a larger amount of equity can be awarded to those executive officers that are still building an equity stake in the firm. The Compensation Committee determined that 27% of Mr. Colson’s 2023 performance-based compensation should be awarded in equity, with the balance paid in cash. For the other executive officers, the percentage of performance-based compensation awarded in equity ranged from 32% to 35% with the balances paid in cash. In January 2024, the Compensation Committee recommended, and the Board approved, an aggregate long-term incentive award with a grant date fair value of approximately $59.2 million, consisting of $20.9 million of equity-based awards and $38.4 million of franchise capital awards for investment professionals. The equity portion of the long-term incentive award consisted of 497,053 restricted share-based awards, of which a total of 127,128 restricted shares (9% of the total long-term incentive award and 26% of the total equity grant) were awarded to our named executive officers. The balance of each named executive officer’s performance-based compensation was paid in cash in February 2024.
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| | Equity Award | | | | | | Standard Award ($) | Career Award ($) | Performance-Based Cash Bonus ($) | Total Performance-Based Compensation ($) | | Eric R. Colson | 753,434 | 753,434 | 4,000,000 | 5,506,868 | | Charles J. Daley, Jr. | 404,327 | 404,327 | 1,613,000 | 2,421,654 | | Jason A. Gottlieb | 753,434 | 753,434 | 3,200,000 | 4,706,868 | | Christopher J. Krein | 444,524 | 444,524 | 1,650,000 | 2,539,048 | | Eileen L. Kwei | 311,427 | 311,427 | 1,250,000 | 1,872,854 |
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Our equity awards are described in more detail within “Elements of Our Named Executive Officer Compensation”.
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| Skin in the Game | | In addition to having significant equity in the firm, Artisan’s executive officers have historically made, and continue to make, significant investments of their own after-tax capital in the strategies managed by the firm’s investment teams. We encourage these investments because we believe that it further aligns executive officers' financial interests with those of the clients that invest in Artisan’s investment strategies and the investment professionals that are responsible for the strategies’ success. Furthermore, the firm relies upon executive officers’ investments to provide seed capital that supports the launch of new strategies and products. | | Through ownership of both equity in the firm and investments in Artisan’s strategies, executive officers generally have a considerable amount of their net worth invested in the success of the firm. Ownership of firm equity and Artisan investments align executive officers’ interests with those of the firm’s stockholders, clients and key investment professionals. And together, these investments result in significant skin in the game. |
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PAYOUT OF PERFORMANCE SHARE UNITS GRANTED IN 2020 During the first quarter of 2023, the Compensation Committee assessed the achievement of the performance conditions with respect to the 30,000 performance share units granted to each of Mr. Colson and Mr. Gottlieb in 2020. The Compensation Committee determined that each of the service, relative adjusted operating margin, and relative total shareholder return conditions were met for the January 1, 2020 through December 31, 2022 performance period and therefore 45,000, or 150%, of the PSUs granted to Mr. Colson and Mr. Gottlieb in 2020 became eligible to vest. One-half, or 22,500, of the eligible PSUs vested and the underlying shares were delivered to each of Mr. Colson and Mr. Gottlieb in February 2023. The other half of the PSUs remain subject to career vesting conditions that, with certain exceptions, means the PSUs will vest and the underlying shares will be delivered only upon a qualifying retirement as described below. See “Compensation Discussion and Analysis—Elements of our Named Executive Officers’ Compensation” for a detailed description of the PSUs. The Compensation Committee does not consider the vesting and payout of PSUs granted in 2020 to be compensation with respect to 2023. ELEMENTS OF OUR NAMED EXECUTIVE OFFICERS' COMPENSATION The elements of our named executive officer compensation program include:
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| Pay Element | Type | Purpose | | Fixed Base Salary | Cash | ▪Provide a degree of financial certainty and stability that does not depend on performance | | Variable Performance-Based Compensation | Equity Award | ▪Incent and reward long-term value creation and sustainable growth ▪Enhance the alignment of executive officers’ interests with interests of long-term stockholders ▪Encourage retention and well-planned succession with career vesting awards | | | Cash Bonus | ▪Incent and reward long-term value creation and sustainable growth ▪Provide a source of capital for executive officers' investments in the firm's strategies and vehicles, which aligns executives' interests with those of clients and investment professionals |
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Base Salary Our named executive officers’ base salaries represent a relatively small portion of their overall total direct compensation. We believe that the majority of their pay should be based on performance. The base salary for our Chief Executive Officer is $500,000 and for all other executive officers is $300,000. These base salaries are below the peer median and have not been increased since 2018. Throughout the firm’s history, executive salaries have only been increased one time—the 2018 increase. Performance-Based Compensation—Equity Awards Equity awards are determined after the end of each year consistent with the process detailed above.
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| The equity granted to our named executive officers is subject to long-term time vesting and, historically, in certain cases, performance vesting conditions. In addition, generally one-half of all equity awarded to our named executive officers contains career vesting conditions, which are described in more detail below. Subjecting one-half of each equity award to career vesting conditions results, over the long-term, in a substantial portion of executive officers’ equity being at risk for the duration of their career. This result is achieved while issuing fewer shares to executives, resulting in less dilution for the firm’s stockholders. | The firm’s pre-IPO equity interests illustrated the benefits of a keen focus on long-term interest alignment, advance notice of retirement to facilitate well-planned succession and a strong equity ownership culture. Therefore, since the firm’s IPO, long-term incentives have been designed with those features in mind. |
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The Case for Career Awards Relative to the typical equity awards used by public companies, we believe our career awards provide much better alignment of executive officers’ long-term financial interests with those of the firm’s clients and stockholders. To illustrate, assume our CEO receives a $1 million equity award each year, with one-half of each award subject to career vesting terms and the other half subject to a five-year time-vesting schedule. Assume the CEO of a hypothetical peer also receives a $1 million equity award over the same time period, but subject only to a three-year time-vesting condition, which is generally the average vesting period amongst our public company peers. At year five, our CEO has over $4.2 million of equity at risk, while the CEO of the hypothetical peer has less than $2.1 million at risk. At year ten, the CEO of the hypothetical peer still has less than $2.1 million at risk, while our CEO has nearly $7.3 million at risk.
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| | Total Equity at Risk | | | | | | | | | Year One | Year Two | Year Three | Year Four | Year Five | ... | Year Ten | | Artisan | $1.00 | $1.93 | $2.78 | $3.54 | $4.22 | ... | $7.29 | | % of total compensation | 14% | 28% | 40% | 51% | 60% | | 104% | | Hypothetical Peer | $1.00 | $1.69 | $2.04 | $2.04 | $2.04 | ... | $2.04 | | % of total compensation | 14% | 24% | 29% | 29% | 29% | | 29% | | Dollars in millions. Equity at risk assumes a 3% growth rate. Percent of total compensation assumes total annual compensation of $7 million. | | | | | | | |
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Although our hypothetical peer may award more equity as a percentage of total annual compensation, its CEO is incentivized to manage for short-term results and to mitigate their exposure to risk by selling equity as it vests. Conversely, our relatively smaller equity awards that are subject to career vesting terms incentivize our CEO (and other executive officers) to manage for the creation of sustainable, long-term value. And our relatively larger performance-based cash bonuses may mitigate their incentives to sell equity upon vesting for liquidity reasons and provide executives with the capital required to make meaningful after-tax investments in Artisan’s investment strategies. We believe our career vesting awards are the ultimate performance-based awards given the long-duration alignment created. Our continued use of these awards illustrates the unique and differentiated way in which we approach executive compensation—avoiding generic "check-the-box" exercises in favor of a tailored approach that remains true to our long-term orientation and the fundamental principles that represent Who We Are. Restricted Stock. Restricted stock awarded to our named executive officers consists of standard restricted shares and career shares. Our standard restricted shares vest pro-rata over the five years following the year of grant, subject to continued employment. With certain exceptions, career shares will only vest once they have become eligible to vest and a qualifying retirement occurs, as follows: ▪Vesting Eligibility: 20% of each career share award becomes eligible to vest in each of the five years following the year of grant. ▪Qualifying Retirement: Requires that the award recipient (i) has been employed by us for at least 10 years at the time of retirement; (ii) has provided, for named executive officers, 18 months’ notice of retirement (subject to our right to accept a shorter period of notice); and (iii) has remained at the Company through the retirement notice period. If a named executive officer has a qualifying retirement (as described above) and has attained a combination of years of service plus age of at least 70 as of the retirement date, the restricted stock granted in January 2024 and subsequent years will vest, without regard to the pro rata vesting eligibility condition noted above. Career shares and standard restricted shares will also vest upon a termination of employment due to death or disability and after a change in control if the Company terminates a named executive officer without cause or they resign for good reason, in either case, within two years of the change in control. In addition, after the fifth anniversary of the grant date, if the Company terminates a recipient without cause, eligible career shares will vest, provided that the recipient has at least 10 years of service with the Company at the time of termination. Performance Share Units (PSUs). Certain of our named executive officers received PSUs in 2020, 2021 and 2022 in lieu of restricted stock awards. PSUs have a three-year performance period, after which achievement of the performance conditions is assessed by the Compensation Committee. PSUs will be eligible to vest if performance conditions are met, as determined by the Compensation Committee after completion of the performance period, as follows: ▪50% of the PSUs will be eligible to vest if the recipient remains employed by Artisan through the performance period. ▪100% of the PSUs will be eligible to vest if the recipient satisfies the service condition and either (i) the firm’s adjusted operating margin during the performance period exceeds the median for a defined peer group2 or (ii) the firm’s total shareholder return during the performance period exceeds the median of the peer group. ▪150% of the PSUs will be eligible to vest if the recipient satisfies the service condition and both the operating margin and total shareholder return performance conditions. Once the Compensation Committee has determined the number of PSUs that are eligible to vest with respect to a performance period, one-half of the total PSUs eligible to vest will vest and the underlying shares will be delivered. The other half of PSUs eligible to vest will be further subject to career vesting conditions that, with certain exceptions, means the PSUs will vest and the underlying shares will be delivered only upon a qualifying retirement as described above. Similar to the restricted stock, PSUs will also vest upon a termination of employment due to death or disability and after a change in control if the Company terminates a named executive officer without cause or they resign for good reason, in either case, within two years of the change in control. In addition, after the fifth anniversary of the grant date, if the Company terminates a recipient without cause, all career PSUs previously determined to be eligible to vest but not having vested will vest, provided that the recipient has at least 10 years of service with the Company at the time of termination. The peer group for purposes of the 2022 PSUs, which remain subject to the performance conditions described above, consists of the following publicly traded asset management companies.
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| AllianceBernstein | Franklin Resources | T. Rowe Price Group | | Affiliated Managers Group | Invesco | Victory Capital | | BlackRock | Janus Henderson Investors | Virtus Investment Partners | | Federated Hermes | Lazard | |
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The peer group identified above is different from the executive reference group assembled by McLagan, the compensation consultant, which includes both public and private firms. The Compensation Committee may adjust the peer group used for the PSU awards in the event a merger, acquisition or other material corporate transaction impacts the status of a named peer. We intend to continue to grant annual equity awards to our named executive officers. However, the size and structure of the equity awards previously granted may not be indicative of future awards. We generally expect that one-half of the equity awarded to our executive officers will include career vesting conditions. Performance-Based Compensation—Cash Bonus As described above under “2023 Executive Compensation Process and Decisions”, each year the Compensation Committee first considers the amount of performance-based compensation for each executive officer by applying negative discretion to the maximum performance-based cash bonus amounts after assessing the achievement of the firm’s key priorities and aligning performance-based compensation amounts with the Company’s financial and operating results. The amount of equity available to be awarded to each executive officer is determined and the balance of performance-based compensation for each executive officer is paid as a performance-based cash bonus. Retirement Benefits We believe that providing a cost-effective retirement benefit for the Company’s employees is an important recruitment and retention tool. Accordingly, the Company maintains, and each of the named 2 For purposes of the PSU performance conditions, “adjusted operating margin” represents adjusted (non-GAAP) operating margin, if reported. If adjusted operating margin is not reported, GAAP margin is used. If no operating margin is reported, consolidated revenues and consolidated expenses are used to calculate an operating margin. Additional adjustments may be made to the calculation of adjusted operating margin by the Compensation Committee as needed to improve the comparability amongst Artisan and the peer group. Adjusted measures are non-GAAP measures. See Annex A for the Company's non-GAAP reconciliations. executive officers participates in, a contributory defined contribution retirement plan for all U.S.-based employees, and matches 100% of each employee’s contributions (other than catch-up contributions by employees age 50 and older) up to the annual limit which, for 2023, was $22,500. We also maintain retirement plans or make retirement plan contributions (or equivalent cash payments) for our employees based outside the U.S. The opportunity to participate in a retiree health plan, at the sole expense of the retiree, is available to employee-partners and career share recipients who have at least 10 years of service with us at the time of retirement. Other Benefits Our named executive officers participate in the employee health and welfare benefit programs we maintain, including medical, group life and long-term disability insurance, and health care savings accounts, on the same basis as all U.S. employees, subject to satisfying any eligibility requirements and applicable law. We also generally provide employer-paid parking or transit assistance and, for our benefit and convenience, on-site food and beverages, benefits which our named executive officers enjoy on the same terms as all of our employees. OTHER COMPENSATION POLICIES AND PRACTICES Equity Ownership Guidelines. Executive officers are expected to own shares of the Company’s common stock and/or Class B common units of Artisan Partners Holdings equal in value to eight times base salary for the Chief Executive Officer and three times base salary for all other executive officers. Any individual becoming an executive officer will have a period of five years from the time of his or her designation as an executive officer to comply with the guidelines. As of December 31, 2023, each of our named executive officers held equity in excess of their base salary as follows: 68 times base salary for Mr. Colson; 20 times base salary for Mr. Daley; 28 times base salary for Mr. Gottlieb; 12 times base salary for Mr. Krein and 7 times base salary for Ms. Kwei. Compensation Recovery Policy. In October 2023, the Board approved a new Compensation Recovery Policy, which superseded our pre-existing executive compensation clawback policy. The new policy provides for the mandatory recovery of erroneously awarded incentive-based compensation following accounting restatements from persons who served as an executive officer of the Company at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the Company is required to prepare an accounting restatement. The incentive-based compensation to be recovered is the amount in excess of what otherwise would have been paid based on the restated results. Recovery will be required on a “no fault” basis, without regard to whether any misconduct occurred and without regard to whether an executive officer was responsible for the erroneous financial statements. Hedging and Pledging Policies. Our code of ethics and insider trading policies prohibit our directors and employees, including our executive officers, from engaging in hedging transactions involving any derivative security relating to Company securities, whether or not the instrument is issued by the Company. Our directors and employees are also restricted from pledging Company securities when they are in possession of material, nonpublic information or otherwise are not permitted to trade in Company securities, such as during any black-out period. RISK MANAGEMENT AND OUR COMPENSATION PROGRAM We have identified two primary risks relating to compensation: the risk that compensation will not be sufficient in amount or appropriately structured to attract and to retain talent, and the risk that compensation may provide unintended short-term incentives. To combat the risk that our compensation might not be sufficient or be inappropriately structured, we strive to use a compensation structure, and set compensation levels, for all employees in a way that we believe promotes retention. To avoid unintended short-term incentives, we make equity awards subject to multi-year vesting schedules and, for certain employees (including all of our named executive officers), provide for career vesting conditions on one-half of the equity awards received. In addition, our named executive officers are subject to equity ownership guidelines and a compensation recovery policy. We believe that both the structure and levels of compensation have aided us in attracting and retaining key personnel. And we believe that the long duration nature of our equity awards prioritizes long-term value creation and sustainable growth. We have not seen any employee behaviors motivated by our compensation policies and practices that create increased risks for our stockholders. Based on the foregoing, we do not believe that our compensation policies and practices motivate imprudent risk taking. Consequently, we are satisfied that any potential risks arising from our employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. Our Compensation Committee will continue to monitor the effects of its compensation decisions to determine whether risks are being appropriately managed. COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based upon such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s proxy statement. Compensation Committee: Jeffrey A. Joerres, Chair Jennifer A. Barbetta Tench Coxe
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Executive Compensation Tables SUMMARY COMPENSATION TABLE The following table provides information regarding the compensation of each of our named executive officers. Applicable SEC rules require that for purposes of the Summary Compensation Table, the value of an equity award be reported in the year of grant rather than the year with respect to which the award was made. Accordingly, stock awards reported for 2023, 2022 and 2021 reflect the awards made in January of each of those years. Because we consider the value of the equity awards we make each January to be a part of each named executive officer’s compensation for the prior year, we have included those values in the row for the prior year in the table at the beginning of the Compensation Discussion and Analysis, as well as in the table immediately following the Summary Compensation Table.
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| Name & Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | | Eric R. Colson Chief Executive Officer | 2023 | 500,000 | — | 1,994,080 | 4,000,000 | 176,205 | 6,670,285 | | | 2022 | 500,000 | — | 1,924,716 | 4,235,000 | 96,671 | 6,756,387 | | | 2021 | 500,000 | 5,500,000 | 1,934,599 | — | 171,950 | 8,106,549 | | Charles J. Daley, Jr. Chief Financial Officer | 2023 | 300,000 | — | 805,540 | 1,613,000 | 102,441 | 2,820,981 | | | 2022 | 300,000 | — | 702,704 | 1,613,000 | 80,824 | 2,696,528 | | | 2021 | 300,000 | 2,250,000 | 497,754 | — | 108,804 | 3,156,558 | | Jason A. Gottlieb President | 2023 | 300,000 | — | 1,413,596 | 3,200,000 | 56,524 | 4,970,120 | | | 2022 | 300,000 | — | 1,924,716 | 3,058,000 | 53,982 | 5,336,698 | | | 2021 | 300,000 | 3,300,000 | 1,934,599 | — | 54,668 | 5,589,267 | | Christopher J. Krein Head of Global Distribution | 2023 | 300,000 | — | 884,127 | 1,650,000 | 56,060 | 2,890,187 | | | 2022 | 300,000 | — | 1,283,358 | 1,800,000 | 51,545 | 3,434,903 | | | 2021 | 300,000 | 2,000,000 | 1,289,773 | — | 51,787 | 3,641,560 | | Eileen L. Kwei (5) Chief Administrative Officer | 2023 | 300,000 | — | 619,883 | 1,250,000 | 58,621 | 2,228,504 | | (1) Amounts in this column represent the performance-based cash bonuses earned by our named executive officers in 2021 and paid in December 2021. | | | | | | | | | (2) Amounts reported represent the grant date fair value of the equity granted to each named executive officer in the year indicated. The values reported for restricted shares represent the grant date fair value in accordance with FASB ASC Topic 718 based upon the price of our common stock at the grant date. The values reported for PSUs represent the grant date fair value based upon the probable outcome of the performance conditions. In accordance with FASB ASC Topic 718, grant date fair value of the PSUs is based on satisfying the service condition, achieving the adjusted operating margin condition, and the outcome of the total shareholder return condition using a Monte Carlo valuation. See the Grants of Plan-Based Awards During 2023 table for more information about the 2023 equity awards. Adjusted measures are non-GAAP measures, which are explained in Annex A. | | | | | | | | | (3) Amounts earned by our named executive officers in 2023 and 2022, paid in February 2024 and February 2023, respectively, were paid under the Performance-Based Cash (Non-Equity) Incentive Plan. See the Grants of Plan-Based Awards During 2023 table below for more information about these awards. | | | | | | | | | (4) Amounts in this column represent the aggregate dollar amount of all other compensation received by our named executive officers. All other compensation includes, but is not limited to (a) Company matching contributions to contributory defined contribution plan accounts equal to 100% of their pre-tax contributions (excluding catch-up contributions for named executive officers age 50 and older) up to the limitations imposed under applicable tax rules, which contributions totaled $22,500 for each named executive officer in 2023; (b) health and vision insurance premiums and HSA contributions paid by the Company for plans that are offered to all eligible employees on a nondiscriminatory basis in the aggregate amount of approximately $32,000 for each named executive officer in 2023; and (c) reimbursement for 2023 self-employment payroll tax expense as follows: $116,337 for Mr. Colson and $48,093 for Mr. Daley. Each of the named executive officers invest, from time to time, in funds managed by an affiliate of the Company on terms described under Relationships and Related Party Transactions—Investments in our Funds. | | | | | | | | | (5) Ms. Kwei became a named executive officer in 2023. Amounts for 2022 and 2021 have therefore been omitted. | | | | | | | |
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| Name | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Eric R. Colson | 2023 | 500,000 | — | 1,506,868 | 4,000,000 | 176,205 | 6,183,073 | | | 2022 | 500,000 | — | 1,994,080 | 4,235,000 | 90,476 | 6,819,556 | | | 2021 | 500,000 | 5,500,000 | 1,924,716 | — | 171,950 | 8,096,666 | | Charles J. Daley, Jr. | 2023 | 300,000 | — | 808,653 | 1,613,000 | 102,441 | 2,824,094 | | | 2022 | 300,000 | — | 805,540 | 1,613,000 | 80,824 | 2,799,364 | | | 2021 | 300,000 | 2,250,000 | 702,704 | — | 108,804 | 3,361,508 | | Jason A. Gottlieb | 2023 | 300,000 | — | 1,506,868 | 3,200,000 | 56,524 | 5,063,392 | | | 2022 | 300,000 | — | 1,413,596 | 3,058,000 | 53,982 | 4,825,578 | | | 2021 | 300,000 | 3,300,000 | 1,924,716 | — | 54,668 | 5,579,384 | | Christopher J. Krein | 2023 | 300,000 | — | 889,048 | 1,650,000 | 56,060 | 2,895,108 | | | 2022 | 300,000 | — | 884,127 | 1,800,000 | 51,545 | 3,035,672 | | | 2021 | 300,000 | 2,000,000 | 1,283,358 | — | 51,787 | 3,635,145 | | Eileen L. Kwei | 2023 | 300,000 | — | 622,854 | 1,250,000 | 58,621 | 2,231,475 | | (1) Represents equity awarded with respect to each of fiscal years 2023, 2022 and 2021. | | | | | | | |
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| Year | Summary Compensation Table Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) | Average Compensation Actually Paid to Non-PEO NEOs ($) (2) | Value of Initial Fixed $100 Investment Based on: | | Net Income (in millions) | Company-Selected Measure: Revenue (in millions) | | | | | | | Total Shareholder Return ("TSR") ($) | Peer Group TSR ($) (3) | | | | 2023 | 6,670,285 | 10,281,051 | 3,227,448 | 4,759,834 | 193.23 | 155.89 | 222.3 | 975.1 | | 2022 | 6,756,387 | 4,298,330 | 3,481,157 | 2,468,774 | 120.64 | 126.91 | 206.8 | 993.3 | | 2021 | 8,106,549 | 7,877,028 | 3,671,354 | 3,603,201 | 175.58 | 161.92 | 336.5 | 1,227.2 | | 2020 | 7,528,634 | 9,771,488 | 2,772,098 | 3,741,267 | 170.96 | 115.15 | 212.6 | 899.6 |