DEF 14A of Covista Inc.
Filed Oct 17, 2024 · FY20240001558370-24-013376
OUR NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
OUR NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS Diverse mix of backgrounds, current and former CEOs, a medical professional, a former finance executive at a leading global company, and corporate and academic leadership expertise.
OUR NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
| | | | Director Since | Other Public Company Boards | Committee Memberships | | | | | | | Name and Principal Occupation | Age | | | AQC | AUD | COM | ER | NG | | | Stephen W. Beard President and CEO Adtalem Global Education Inc. | 53 | 2021 | | | | | | | | | William W. Burke, INDEPENDENT President and Founder, Austin Highlands Advisors, LLC | 65 | 2017 | 2 | | | | | | | | Donna J. Hrinak, INDEPENDENT Retired Senior Vice President, Corporate Affairs, Royal Caribbean Group | 73 | 2018 | | | | | | | | | Georgette Kiser, INDEPENDENT Former Managing Director and CIO, The Carlyle Group | 56 | 2018 | 2 | | | | | | | | Liam Krehbiel, INDEPENDENT Chief Executive Officer and Founder, Topography Hospitality, LLC | 48 | 2022 | | | | | | | | | Michael W. Malafronte, INDEPENDENT Chairman of the Board Adtalem Global Education Inc. Senior Advisor, Derby Copeland Capital | 50 | 2016 | | | | | | | | | Sharon L. O’Keefe, INDEPENDENT Retired President, University of Chicago Medical Center | 72 | 2020 | 1 | | | | | | | | Kenneth J. Phelan, INDEPENDENT Senior Advisor Oliver Wyman Inc. | 65 | 2020 | 1 | | | | | | | | Betty Vandenbosch, INDEPENDENT Former Senior Advisor Coursera, Inc. | 67 | 2024 | | | | | | | | | Lisa W. Wardell Former Chairman of the Board Adtalem Global Education Inc. | 55 | 2008 | 1 | | | | | |
OUR NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
| | | | | | | | | Academic Quality Committee | Audit and Finance Committee | Compensation Committee | External Relations Committee | Nominating & Governance Committee | Audit Committee Financial Expert | Committee Chair |
OUR NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
| Adtalem Global Education Inc. | 2024 Proxy Statement 3 |
Election of Directors
Election of Directors The Board has nominated ten of Adtalem’s eleven sitting directors and recommends their re-election, each for a term to expire at the 2025 Annual Meeting. All of the nominees have consented to serve as directors if elected at the Annual Meeting. Mr. Mayur Gupta has informed the Board that he is not standing for re-election and will retire from the Board at the Annual Meeting. Mr. Gupta has served on the Board since 2021 and the Board sincerely appreciates Mr. Gupta’s service to Adtalem. Mr. Gupta’s decision to not stand for re-election is not the result of any disagreement with the Company. It is intended that all shares represented by proxy at the Annual Meeting will be voted for the election of each of Stephen W. Beard, William W. Burke, Donna J. Hrinak, Georgette Kiser, Liam Krehbiel, Michael W. Malafronte, Sharon L. O’Keefe, Kenneth J. Phelan, Betty Vandenbosch, and Lisa W. Wardell as directors unless otherwise specified in such proxy. A proxy cannot be voted for more than ten persons. In the event that a nominee becomes unable to serve as a director, the proxy committee (appointed by the Board) will vote for the substitute nominee that the Board designates. The Board has no reason to believe that any of the nominees will become unavailable for election. Each nominee for election as a director is listed below, along with a brief statement of his or her current or most recent principal occupation, business experience, and other information, including directorships in other public companies held as of the date of this Proxy Statement or within the previous five years. Under the heading “Relevant Experience,” we describe briefly the particular experience, qualifications, attributes, or skills that led to the conclusion that these nominees should serve on the Board. As explained below under the caption “Director Nominating Process,” the Nominating & Governance Committee looks at the Board as a whole, attempting to ensure that it possesses the characteristics that the Board believes are important to effective governance.
APPROVAL BY SHAREHOLDERS
APPROVAL BY SHAREHOLDERS You have the option to vote FOR, AGAINST or ABSTAIN with respect to the election of each director nominee. The election of each of the ten nominees for director listed below requires the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Adtalem maintains a majority voting standard for uncontested elections (when the number of nominees is the same as the number of directors to be elected), so for a nominee to be elected as a member of the Board, the nominee must receive the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Abstentions, if any, will be counted as votes AGAINST each director nominee, and broker non-votes, if any, will not be counted as votes represented and entitled to vote and, therefore, will have no effect on the results of the vote for this proposal. See VOTING INFORMATION - Effect of Not Casting Your Vote. Shareholders may not cumulate their votes in the election of directors. If a nominee for re-election fails to receive the requisite majority vote when the election is uncontested, such director must promptly tender his or her resignation to Adtalem’s Chairman or Adtalem’s General Counsel and Corporate Secretary, subject to acceptance by the Board. Unless otherwise indicated on the proxy, the shares will be voted FOR each of the nominees identified below.
APPROVAL BY SHAREHOLDERS
| | The Board of Directors recommends a vote FOR each of the nominees identified below. |
APPROVAL BY SHAREHOLDERS
| 12 2024 Proxy Statement | Adtalem Global Education Inc. |
BOARD COMPOSITION
BOARD COMPOSITION Director Nominees
BOARD COMPOSITION
| | Stephen W. Beard, Chief Executive Officer President and CEO, Adtalem Global Education Inc. Age: 53 Director since: 2021 |
Career Highlights
Career Highlights Mr. Beard was appointed Adtalem’s President and CEO and a director on our Board in September 2021. Previously, Mr. Beard served as Adtalem’s Chief Operating Officer (COO), responsible for the vision, leadership, and financial performance of Adtalem’s former Financial Services vertical. In addition, Mr. Beard led the company’s strategy, corporate development, government and regulatory affairs, investor relations, communications and civic engagement activities and mobilized a variety of operational and corporate initiatives to accelerate Adtalem’s global performance. Prior to taking on the responsibility of COO in 2019 and responsibility for the former Financial Services vertical in 2020, Mr. Beard served as Senior Vice President, General Counsel and Corporate Secretary in 2018. Prior to Adtalem, Mr. Beard was executive vice president, chief administrative officer and general counsel of Heidrick & Struggles International, Inc. (NASDAQ: HSII), where he directed global legal operations for the company and oversaw a variety of enterprise-level functions including strategy and corporate development. Prior to joining Heidrick & Struggles, Mr. Beard was in private practice with Schiff Hardin, LLP in Chicago, where he was a member of the firm’s corporate and securities group, advising public and private companies in mergers and acquisitions, corporate finance and corporate governance matters. Mr. Beard began his legal career as a law clerk for the Honorable Frank Sullivan, Jr. (ret.), associate justice of the Indiana Supreme Court. Mr. Beard has been active in a variety of community and civic matters and currently serves on the board of the venture philanthropy fund, A Better Chicago. Mr. Beard received his bachelor’s degree from the University of Illinois at Urbana-Champaign and his juris doctor degree from the Maurer School of Law at Indiana University.
Relevant Experience
Relevant Experience Mr. Beard’s experience as our CEO and his prior service as Adtalem’s COO and General Counsel give him deep knowledge of Adtalem’s operations and strategy. Mr. Beard’s experience in refining Adtalem’s portfolio strategy, executing the DeVry University, Carrington College and Adtalem Brazil divestitures, and spearheading the acquisition of Walden University, coupled with his success in leading the Financial Services segment prior to its divestiture, have played an integral role in positioning Adtalem for long-term growth.
Relevant Experience
| Adtalem Global Education Inc. | 2024 Proxy Statement 13 |
Relevant Experience
| | William W. Burke, Independent President and Founder, Austin Highlands Advisors, LLC Age: 65 Director since: 2017 Committees: Audit and Finance (Chair) Compensation | | Career Highlights Mr. Burke has been a director of Adtalem since January 2017. He served as our Lead Independent Director from July 2019 through November 2022. From November 2015 to June 2024, Mr. Burke served as President of Austin Highlands Advisors, LLC, a provider of corporate advisory services. He served as Executive Vice President & Chief Financial Officer of IDEV Technologies, a peripheral vascular devices company, from November 2009 until the company was acquired by Abbott Laboratories in August 2013. From August 2004 to December 2007, he served as Executive Vice President & Chief Financial Officer of ReAble Therapeutics, a diversified orthopedic device company which was sold to The Blackstone Group in a going private transaction in 2006 and subsequently merged with DJO Incorporated in November 2007. Mr. Burke remained with ReAble Therapeutics until June 2008. From 2001 to 2004, he served as Chief Financial Officer of Cholestech Corporation, a medical diagnostic products company. Mr. Burke received his bachelor’s degree in Finance from the University of Texas at Austin and an MBA from the Wharton School of the University of Pennsylvania. Board Service Mr. Burke has served on numerous public and private company boards including serving as a board chairman and a lead independent director. He has served on the board of Tactile Systems Technology, Inc. (NASDAQ: TCMD) since 2015 and currently serves as Chairman of the Board and as a member of its nominating and governance committee. Since 2022, he has served on the board of directors of Ceribell Inc., (NASDAQ: CBLL), a medical technology company. Mr. Burke also currently chairs Ceribell’s audit committee and serves on the nominating and governance committee. In 2024, he joined the board of Nalu Medical, Inc., a privately-held, medical technology company. He previously served on the board of Invuity, Inc. (acquired by Stryker Corp. in 2018), LDR Holding Corporation (acquired by Zimmer Biomet in 2016), and Medical Action Industries (acquired by Owens & Minor in 2014). Relevant Experience Mr. Burke has significant experience as a senior executive and as a board member of multiple public companies, including growth-oriented healthcare technology companies. His extensive understanding of culture, financing, and operating strategy enhances the Board’s corporate governance and strategy capabilities. | |
Relevant Experience
| 14 2024 Proxy Statement | Adtalem Global Education Inc. |
Relevant Experience
| | Donna J. Hrinak, Independent Retired Senior Vice President, Corporate Affairs, Royal Caribbean Group Age: 73 Director since: 2018 Committees: External Relations (Chair) Audit and Finance Nominating & Governance | | Career Highlights Ms. Hrinak has been a director of Adtalem since October 2018. Ms. Hrinak served as Senior Vice President, Corporate Affairs, Royal Caribbean Group from 2020 through 2023. Previously she served as President of Boeing Latin America (2011-2020) where she opened Boeing’s first three offices in the region and oversaw all aspects of operations, from commercial and defense product sales to research and technology. Prior to Boeing, she served as Vice President Global Public Policy and Governmental Affairs/Vice President for Public Policy at PepsiCo (2008-2011) and also held a role at Kraft Foods (2006-2008), where she managed the Latin American and European Corporate Affairs teams. Prior to that, she served as a Senior Counselor for Trade and Competition at the law firm of Steel Hector & Davis and held a role with the strategic advisory firm of Kissinger McLarty Associates. Before entering the private sector, Ms. Hrinak was a career officer in the U.S. Foreign Service, and served as U.S. Ambassador to Brazil, Venezuela, Bolivia, and the Dominican Republic, as well as Deputy Assistant Secretary in the State Department. She holds a bachelor’s degree in Multidisciplinary Social Science from Michigan State University and also attended The George Washington University and the University of Notre Dame School of Law. Relevant Experience Ms. Hrinak’s extensive experience at a senior level in both the public and private sectors overseeing complex multi-cultural organizations and regulatory policy brings insight to the Board directly applicable to Adtalem’s regulatory environment and the international operations of its institutions. | |
Relevant Experience
| Adtalem Global Education Inc. | 2024 Proxy Statement 15 |
Relevant Experience
| | Georgette Kiser, Independent Former Managing Director and CIO, The Carlyle Group Age: 56 Director since: 2018 Committees: Academic Quality (Chair) Nominating & Governance | | Career Highlights Ms. Kiser has been a director of Adtalem since May 2018. Ms. Kiser is an operating executive/independent advisor who helps lead due diligence and technical strategies across various private equity and venture capital firms. Previously, she was managing director and chief information officer (CIO) at The Carlyle Group, responsible for leading the firm’s global technology and solutions organization and driving IT strategies. Prior to her role at The Carlyle Group, she was in various executive roles at T. Rowe Price from 1996 to 2015, including Vice President and Head of Enterprise Solutions and Capabilities. She was a consultant and Software Engineer at Martin Marietta Management Data Systems from 1993 to 1995, and a Software Design Engineer in the Aerospace Division of the General Electric Company from 1989 to 1993. Ms. Kiser received a bachelor’s degree in Mathematics with a concentration in Computer Science from the University of Maryland, a M.S. in Mathematics from Villanova University, and an MBA from the University of Baltimore. Board Service Since 2019, Ms. Kiser has served on the boards of Aflac Incorporated (NYSE: AFL), a leading supplemental insurer, and Jacobs Solutions, Inc. (NYSE: JEC), a leading, global professional services company. She serves on the audit and risk committee and compensation committee for Aflac, and the compensation committee and nominating and corporate governance committee for Jacobs. She served on the board of NCR Corporation (NYSE: NCR), an American software, professional services, consulting and tech company from 2019 through 2024. Relevant Experience Ms. Kiser’s experience in information technology at the senior leadership level in organizations with an international reach brings expertise to Adtalem which will enhance both the Board’s oversight of its business as well as Adtalem’s internal technology matters. | |
Relevant Experience
| 16 2024 Proxy Statement | Adtalem Global Education Inc. |
Relevant Experience
| | Liam Krehbiel, Independent Chief Executive Officer and Founder, Topography Hospitality, LLC Age: 48 Director since: 2022 Committees: Compensation External Relations | | Career Highlights Mr. Krehbiel has been a director of Adtalem since June 2022. In 2021, Mr. Krehbiel founded Topography Hospitality, LLC, and has served as its Chief Executive Officer since then. He is also the co-owner of Ballyfin Demesne, a luxury hotel in Ireland, which opened in 2011. In 2010, Mr. Krehbiel founded A Better Chicago, a nonprofit venture philanthropy fund, and served as its CEO until 2019. A Better Chicago invests in the most promising nonprofits helping children escape poverty. . From 2007 to 2010, Mr. Krehbiel was a management consultant at Bain and Company. Prior to joining Bain, Mr. Krehbiel worked with the Edna McConnell Clark Foundation in New York. Mr. Krehbiel received a Master of Business Administration degree with a major in business administration and a double concentration in finance and marketing from Northwestern University's Kellogg School of Management. He received his Bachelor of Arts degree from Dartmouth College. Board Service Mr. Krehbiel is a director of A Better Chicago and One Future Illinois. Relevant Experience Mr. Krehbiel’s commitment to improving equity in education for underserved communities closely aligns with Adtalem’s mission of expanding access to education and improving health equity. Mr. Krehbiel has spent most of his career as a venture philanthropist dramatically improving educational opportunities for low-income students by funding and scaling the most effective schools and programs in the Chicago area. This experience adds depth and insight as Adtalem continues to focus on serving its students and employers in the growing healthcare education industry. | |
Relevant Experience
| Adtalem Global Education Inc. | 2024 Proxy Statement 17 |
Relevant Experience
| | Michael W. Malafronte, Independent Chairman of the Board, Adtalem Global Education Inc. Senior Advisor, Derby Copeland Capital Former Managing Partner, International Value Advisers and President of IVA Funds Age: 50 Director since: 2016 Committees: Compensation (Chair) | | Career Highlights Mr. Malafronte has been a director of Adtalem since June 2016. Mr. Malafronte has served as a Senior Advisor to Derby Copeland Capital since September 2022. Derby Copeland is a private equity firm that specializes in opportunistic real estate related debt financing and equity investment. Mr. Malafronte is a Founding Partner of International Value Advisers, LLC (“IVA”) and served as Managing Partner for 13 years until December 2020. He was responsible for overseeing all aspects of IVA, including company strategy and managing resources. He also served as President of IVA Funds. Prior to founding IVA in 2007, Mr. Malafronte was a Senior Vice President at Arnhold & S. Bleichroeder Advisers, LLC where he worked for two years as a senior analyst for the First Eagle Funds. There he worked under Charles de Vaulx and Jean-Marie Eveillard within the Global Value Group for the value funds, including the First Eagle Overseas, Global, U.S. Value Funds as well as the offshore funds, inclusive of the Sofire Fund Ltd. Similarly, he was responsible for covering the oil and gas, media, real estate, financial services, and retail industries on a global basis, as well as companies within the United Kingdom, Germany, and Japan. Moreover, Mr. Malafronte was responsible for covering the larger names within the portfolio such as Pargesa Holdings, ConocoPhillips, Petroleo Brasileiro, SK Corp., News Corp., Dow Jones, and Comcast. Prior to the First Eagle Funds, Mr. Malafronte worked for nine years as a Portfolio Manager at Oppenheimer & Close, a dually-registered broker dealer and investment adviser; an adviser on three domestic hedge funds, one offshore partnership and a registered investment adviser and broker dealer. While at Oppenheimer & Close, Mr. Malafronte assisted in the launch of a domestic hedge fund in 1996 and an offshore partnership in 1998. Mr. Malafronte was responsible for all facets of portfolio management for the investment partnerships, including idea generation, in-depth research, and stock selection. In addition, he was also responsible for hiring and training both operations staff and research analysts. Mr. Malafronte earned his bachelor’s degree in Finance from Babson College. Board Service Mr. Malafronte has previously served on the boards of two publicly traded companies: Bresler & Reiner Inc. (2002-2008) and Century Realty Trust (2005-2006). Relevant Experience Mr. Malafronte’s experience as a financial analyst covering institutions globally, and as a founder of a global investment firm, provides the Board with a firm understanding of Adtalem’s shareholders’ perspective and deeply informs Adtalem’s financial planning. | |
Relevant Experience
| 18 2024 Proxy Statement | Adtalem Global Education Inc. |
Relevant Experience
| | Sharon L. O’Keefe, Independent Retired President, University of Chicago Medical Center Age: 72 Director since: 2020 Committees: Nominating & Governance (Chair) Compensation | | Career Highlights Ms. O’Keefe served as the President of the University of Chicago Medical Center from February 2011 through July 2020. From April 2009 through February 2011, Ms. O’Keefe served as President of Loyola University Medical Center. Prior to her role at Loyola, she served from July 2002 to April 2009 as Chief Operating Officer for Barnes Jewish Hospital, a member of BJC Healthcare, St. Louis. In addition, Ms. O’Keefe has served in a variety of senior management roles at The Johns Hopkins Hospital, Montefiore Medical Center, University of Maryland Medical System, and Beth Israel Deaconess Medical Center in Boston, a teaching affiliate of Harvard Medical School. She has also served as a healthcare consultant with Ernst & Young. In addition, Ms. O’Keefe has served on the National Institutes of Health Advisory Board for Clinical Research, the Finance Committee of the National Institutes of Health Advisory Board, the Board of Trustees of the Illinois Hospital Association, and an Examiner for the Malcolm Baldrige National Quality Award. Ms. O’Keefe holds a M.S. degree in Nursing from Loyola University of Chicago and a bachelor’s degree in Nursing from Northern Illinois University. Board Service Since March 2022, Ms. O’Keefe has served on the board of directors of Conva Tec Group PLC, a global medical products and technologies company focused on therapies for the management of chronic conditions. From July 2022 to May 2023, Ms. O’Keefe served on the board of directors of Apollo Endosurgery, a medical technology company focused on development of minimally invasive devices for advanced endoscopy therapies. From 2012 until February 2022, Ms. O’Keefe served on the board of directors of Vocera Communications Inc., a provider of communication and clinical workforce solutions, where she was a member of the compensation committee. Ms. O’Keefe previously served on the board of Aviv Reit Inc. from 2013 to 2015. Relevant Experience Ms. O’Keefe’s prior leadership roles at numerous medical centers including the University of Chicago Medical Center and Loyola University of Chicago Medical Center and as a board member of other public companies provide the Board with insights into how Adtalem can best serve the needs of our employer partners and drive superior student outcomes for our healthcare and medical students and graduates. | |
Relevant Experience
| Adtalem Global Education Inc. | 2024 Proxy Statement 19 |
Relevant Experience
| | Kenneth J. Phelan, Independent Senior Advisor, Oliver Wyman Inc. Age: 65 Director since: 2020 Committees: Audit and Finance External Relations | | Career Highlights Mr. Phelan has been a Senior Advisor at Oliver Wyman Inc., a global management consulting firm, since 2019. Prior to that he served as the first Chief Risk Officer for the U.S. Department of the Treasury (“Treasury”) from 2014 to 2019. As Chief Risk Officer of the Treasury, he was responsible for establishing and building the Treasury’s Office of Risk Management to provide senior Treasury and other administration officials with analysis of key risks including credit, market, liquidity, operational, governance, and reputational risk. From 2018 to 2019, Mr. Phelan also served as Acting Director for the Office of Financial Research, an independent bureau within the Treasury charged with supporting the Financial Stability Oversight Council and conducting research about systemic risk. Prior to joining the Treasury, Mr. Phelan served as the chief risk officer for RBS America from 2011 to 2014, as chief risk officer for Fannie Mae from 2009 to 2011, and as chief risk officer for Wachovia Corporation from 2008 to 2009. Earlier in his career, Mr. Phelan held a variety of senior risk roles at JPMorgan Chase, UBS, and Credit Suisse. Mr. Phelan holds a bachelor’s degree in Business Administration and Finance from Old Dominion University, a M.S. in Economics from Trinity College, Dublin, and a J.D. from Villanova University. Board Service Since 2019 Mr. Phelan has served as a director of Huntington Bancshares, Inc. (NASDAQ. HBAN), a regional bank holding company whose primary subsidiary is The Huntington National Bank. Mr. Phelan is the Chair of Huntington’s risk committee and serves on its human resources and compensation committee. Relevant Experience Mr. Phelan possesses broad risk oversight expertise and risk management experience. His knowledge and experience strengthen the Board’s governance and risk oversight. | |
Relevant Experience
| 20 2024 Proxy Statement | Adtalem Global Education Inc. |
Relevant Experience
| | Betty Vandenbosch, Independent Former Senior Advisor, Coursera, Inc. Age: 67 Director since: 2024 Committees: Academic Quality | | Career Highlights Dr. Vandenbosch has been a director of Adtalem since January 2024. She served as the Senior Advisor to the Chief Executive Officer of Coursera, Inc., an online university course provider and facilitator, from 2022 to 2023. Dr. Vandenbosch joined Coursera in 2020 and served as a Senior Vice President and Chief Content Officer from 2020 to 2022. Prior to Coursera, Dr. Vandenbosch was the Chancellor of Purdue University Global from 2018 to 2020, where she oversaw academics for nearly 30,000 students, most of whom earned their degrees online. From 2008 to 2018, Dr. Vandenbosch held several roles of increasing responsibility at Kaplan University, including Provost from 2013-2014, and President from 2015 through 2018. From 1993 through 2008, Dr. Vandenbosch served in a variety of roles at Case Western University, including Associate Dean of Executive Education Programs and Associate Dean of External Relations. Dr. Vandenbosch earned a PhD in Management Information Systems from the Ivey Business School at Western University. She also earned a Bachelor of Science degree in computer science and a Master of Business Administration degree from Western University. Relevant Experience Dr. Vandenbosch brings nearly thirty years of corporate and academic leadership, research and teaching experience to the Adtalem Board. She is a leading expert on bringing successful degree and nondegree programs to market with a strong perspective on marketing data and analytics to drive growth, student success, and positive completion outcomes. | |
Relevant Experience
| Adtalem Global Education Inc. | 2024 Proxy Statement 21 |
Relevant Experience
| | Lisa W. Wardell Former Chairman of the Board, Adtalem Global Education Age: 55 Director since: 2008 Committees: External Relations | | Career Highlights Ms. Wardell has been a director of Adtalem since November 2008. She is a business executive with more than 25 years of experience managing business strategy, operations, finance, and mergers and acquisitions, while driving shareholder value, stakeholder engagement, and company mission. After a successful five-year run as Adtalem’s president and CEO (2016-2019) she transitioned to CEO and Chairman (2019-2021) and Executive Chairman (2021-2022). Through her commitment to high performance and positive social impact, Ms. Wardell’s leadership has resulted in superior outcomes for Adtalem’s students and significant value creation for shareholders and positioned the company for long-term growth. Under her leadership, gender and ethnic diversity increased at the Adtalem Board to 67%. Ms. Wardell has also led the higher education sector in implementing new standards in transparency and financial literacy, and in cultivating quality partnerships to fill critical global healthcare workforce needs. Prior to Adtalem, Ms. Wardell was executive vice president and chief operating officer for The RLJ Companies. During her tenure at RLJ, Ms. Wardell managed acquisitions and executed the formation of RML Automotive, a dealership network spanning seven states with over $1.5 billion in annual revenues. She also worked extensively in the media, entertainment, sports, gaming, and hotel industries, which included assisting with the founding and managing of Our Stories Films Studio and managing the now Charlotte Hornets (previously Charlotte Bobcats). Ms. Wardell also served on the board of the NBAPA, Inc., the for-profit portion of the NBA Players Association, from 2018 to 2021. Prior to joining The RLJ Companies, Ms. Wardell was a principal at Katalyst Venture Partners, a private equity firm that invested in start-up technology companies, and a senior consultant at Accenture in the organization’s communication and technology practice. Ms. Wardell earned her bachelor’s degree from Vassar College and her law degree from Stanford Law School. She earned her MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania. Ms. Wardell has been featured on CNBC and Cheddar as well as in The Wall Street Journal, Washington Post, Business Insider, Black Enterprise, and other publications. Board Service Ms. Wardell has served on the board of American Express Company (NYSE:AXP) since 2021, where she is a member of the . audit and compliance and risk committees. She served on the board of Lowe’s Companies, Inc. (NYSE:LOW) from March 2018 to March 2021 and GIII Apparel Group, Ltd. (NASDAQ:GIII) from March 2022 to June 2023. She is a member of The Business Council, and Co-Chair of the Alvin Ailey DC Foundation. A fierce advocate for diversity and inclusion, and access to education at scale across diverse communities, Ms. Wardell also is a member of the board of the Economic Club of Chicago, the Executive Leadership Council, and the Fortune CEO Initiative. Relevant Experience Ms. Wardell’s prior roles as CEO and Executive Chairman give her deep knowledge of Adtalem’s academic and business operations and strategy and enhances the Board’s operations. Additionally, her experience as a senior business executive in private equity, operations, and strategy and financial analysis, including mergers and acquisitions, gives her important perspectives on the issues that come before the Board, including business, strategic, financial, and regulatory matters. | |
Relevant Experience
| 22 2024 Proxy Statement | Adtalem Global Education Inc. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The competitiveness of the director compensation program is reviewed annually by the Compensation Committee with the assistance and input of Meridian Compensation Partners (“Meridian”), the Compensation Committee’s independent compensation consultant. Meridian’s last review in 2023 resulted in revisions to director compensation during the second half of 2023. No changes were made to the director compensation program in fiscal year 2024. Each non-employee director annually receives RSUs with an approximate value of $140,000. The RSUs are granted immediately following the Annual Meeting of Shareholders. Each RSU represents the right to receive one share of Common Stock following the satisfaction of the vesting period, which is the one-year anniversary of the grant date. In addition to the RSUs, in fiscal year 2024, non-employee directors received an annual retainer of $85,000, paid quarterly. The Chair of the Audit and Finance Committee received an additional annual retainer of $25,000, the Chair of the Compensation Committee received an additional annual retainer of $17,500, and the chairs of each of the other committees received an additional annual retainer of $12,500 for their roles as committee chairs. The Chairman of the Board is entitled to an additional annual retainer of $120,000 for his service. Directors were reimbursed for any reasonable and appropriate expenditures attendant to Board membership. Under the Adtalem Nonqualified Deferred Compensation Plan, a director may elect to defer all or a portion of the cash retainer. Any amount so deferred is, at the director’s election, valued as if invested in various investment choices made available by the Compensation Committee for this purpose, and is payable in cash installments, or as a lump-sum on or after termination of service as a director, or at a later date specified by the director. No non-employee directors deferred any portion of their compensation in fiscal year 2024.
DIRECTOR COMPENSATION
| 32 2024 Proxy Statement | Adtalem Global Education Inc. |
DIRECTOR COMPENSATION
This table discloses all non-employee director compensation provided in fiscal year 2024 to the directors of Adtalem for their service as directors.
DIRECTOR COMPENSATION
| | Fees Earned or | Stock | | | | Paid in Cash | Awards | Total | | Name | ($) | ($)(1) | ($) | | William W. Burke | 110,000 | 139,960 | 249,960 | | Charles DeShazer(2) | 63,750 | — | 63,750 | | Mayur Gupta | 85,000 | 139,960 | 224,960 | | Donna J. Hrinak | 97,500 | 139,960 | 237,460 | | Georgette Kiser | 97,500 | 139,960 | 237,460 | | Liam Krehbiel | 85,000 | 139,960 | 224,960 | | Michael W. Malafronte | 166,875 | 139,960 | 306,835 | | Sharon L. O’Keefe | 97,500 | 139,960 | 237,460 | | Kenneth J. Phelan | 89,375 | 139,960 | 229,335 | | Betty Vandenbosch(3) | 54,876 | — | 54,876 | | Lisa W. Wardell(4) | 133,000 | 139,960 | 272,960 |
DIRECTOR COMPENSATION
| (1) The amounts reported in the Stock Awards column represent the grant date fair value of 2,530 RSUs granted on November 8, 2023 to each of the directors named above, computed in accordance with FASB ASC Topic 718. The assumptions made in determining the valuations of these awards can be found at Note 18: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2024. The number of RSUs granted to each of the directors named above was determined by dividing $140,000 by $55.32, which represents the fair market value of a share of Common Stock on the November 8, 2023 award date and rounding to the nearest 10 shares. |
DIRECTOR COMPENSATION
| (2) Dr. DeShazer served as a member of the Board until November 8, 2023 but did not stand for re-election at the 2023 Annual Meeting of Shareholders. |
DIRECTOR COMPENSATION
| (3) Dr. Vandenbosch was appointed to the Board effective January 8, 2024. |
DIRECTOR COMPENSATION
| (4) Ms. Wardell’s fees include $24,000 for her service on the Chamberlain University Board of Trustees and $24,000 for her service on the Walden University Board of Managers. |
DIRECTOR COMPENSATION
| Adtalem Global Education Inc. | 2024 Proxy Statement 33 |
COMPENSATION DISCUSSION & ANALYSIS
| ● | Total Shareholder Return exceeded that of our peer group |
PAY-FOR-PERFORMANCE FOCUS
| ● | The actual value realized from the annual MIP award can range from zero, if threshold performance targets are not met, to up to 250% of targeted amounts for exceptional organizational and individual performance. |
PAY-FOR-PERFORMANCE FOCUS
| ● | Our regular long-term incentive program consists of equity-based awards whose value ultimately depends on our stock price performance. Beginning with fiscal year 2023, the Compensation Committee determined that it would no longer grant stock options. The elimination of stock options was intended to simplify the long-term incentive program and to shift more of the equity mix to performance-based equity awards. As a result, a significant portion of the equity-based awards granted under the annual long-term incentive program (60% of the executive officers’ annual awards) is granted in the form of PSUs, the number of which earned is based on achievement of three-year financial performance goals. For the PSUs granted in fiscal year 2024, the Committee approved the use of revenue growth and adjusted EBITDA margin as the financial performance measures as these financial performance metrics for the PSUs better align the long-term incentive program with Adtalem’s long-term growth strategy. If the minimum levels of performance are not met, no PSUs are earned; if the minimum levels of performance are met, payout can range from 50% to 200% of the target number of PSUs. |
Key Fiscal Year 2024 Compensation Decisions
| BASE SALARY Page 44 | | Adtalem is committed to offering market competitive compensation to our key executives, including competitive base salaries. In fiscal year 2024, the Board and/or the Compensation Committee approved merit increases in base salaries of 8.9% for Mr. Beard and 2% for each of our other NEOs as part of our normal compensation review process which takes into account market competitiveness and individual performance. The base salary of Mr. Beard was increased from $918,000 to $1,000,000, the base salary of Mr. Phelan was increased from $489,600 to $499,392, the base salary of Mr. Beck was increased from $525,300 to $535,806, the base salary of Mr. Betz was increased from $540,000 to $550,800, and the base salary of Mr. Herrera was increased from $443,700 to $452,574. |
Key Fiscal Year 2024 Compensation Decisions
| ANNUAL INCENTIVES Page 45 | | For Mr. Beard, Mr. Phelan, and Mr. Beck, the fiscal year 2024 MIP award was based on financial performance at Adtalem (45% based on Adtalem revenue and 55% based on Adtalem adjusted earnings per share). For Mr. Betz, as the President of Walden University, the fiscal year 2024 MIP award was based on financial performance at Walden University (60% based on Walden University revenue and 40% based on Walden University adjusted operating income). For Mr. Herrera, as the Chief Marketing Officer, the fiscal year 2024 MIP award was based on the financial performance at Adtalem (60% on Adtalem revenue and 40% based on adjusted operating income for all institutions prior to corporate overhead expense allocations). The resulting MIP award for Mr. Beard and the other NEOs, as determined based on the respective financial performance, was then adjusted for individual performance by an individual performance modifier which can range from 0% to 125%. Awards under the fiscal year 2024 MIP for financial performance as a percentage of MIP target were earned at 171% of the MIP target for Mr. Beard, 171% for Mr. Phelan, 171% for Mr. Beck, 200% for Mr. Betz, and 131% for Mr. Herrera. The MIP awards as determined based on financial performance for Mr. Beard and the other NEOs were then each adjusted by an individual performance modifier to reflect individual performance. The individual performance modifiers were 125% for Mr. Beard, 95% for Mr. Phelan, 110% for Mr. Beck, 120% for Mr. Betz, and 95% for Mr. Herrera. The resulting MIP awards were earned at 213% of the MIP target for Mr. Beard, 162% for Mr. Phelan, 188% for Mr. Beck, 240% for Mr. Betz, and 124% for Mr. Herrera. |
Key Fiscal Year 2024 Compensation Decisions
| LONG-TERM INCENTIVES Page 50 | | In fiscal year 2024, Mr. Beard and the other NEOs received annual long-term incentive awards consisting of performance-vesting PSUs and service-vesting RSUs. In addition, in connection with Adtalem’s multi-year transformational strategy (“Growth with Purpose”), the Compensation Committee approved a supplemental incentive program, the Growth with Purpose Incentive Program, early in fiscal year 2024, under which NEOs were granted additional performance-vesting PSUs. In addition to the PSUs granted in fiscal year 2024, PSUs granted to NEOs(1) in November 2021 for the fiscal year 2022 through fiscal year 2024 three-year performance period vested in August 2024 based on the achievement of Return on Invested Capital (ROIC) and Free Cash Flow (FCF) per share targets that were assessed over the three-year performance period. Based on our financial performance for the three-year performance period, the ROIC and FCF per share PSUs vested with an overall payout of 55.0% and 71.2% of target, respectively. (1) Excluding Mr. Beard who did not receive a grant of PSUs for the fiscal year 2022 through fiscal year 2024 performance period and Mr. Betz and Mr. Herrera, who were not employed by Adtalem at the time of grant. Mr. Beard was appointed CEO in September 2021 and in lieu of a grant of PSUs for the fiscal year 2022 through fiscal year 2024 performance period, Mr. Beard received a separate long-term incentive award consisting of stock options, RSUs and PSUs in connection with his appointment. |
Factors Guiding our Decisions
| ● | Advice of our independent outside compensation consultant. |
EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES
| WHAT WE DO | WHAT WE DON’T DO | | ✓ Pay for financial and academic performance ✓ Solicit and value shareholder opinions about our compensation practices ✓ Deliver total direct compensation primarily through variable pay ✓ Set challenging short- and long-term incentive award goals ✓ Provide strong oversight that ensures adherence to incentive grant regulations ✓ Maintain robust stock ownership requirements ✓ Adhere to an incentive compensation recoupment (clawback) policy ✓ Offer market-competitive benefits ✓ Consult with an independent advisor on executive pay practices, plan designs, and competitive pay levels | ✘ Provide guaranteed salary increases ✘ Provide tax gross-ups on severance or other payments in connection with a change in control ✘ Provide single-trigger change-in-control severance ✘ Re-price stock options or exchange underwater options for other awards or cash, without shareholder approval ✘ Pay dividends on unvested performance-based awards ✘ Provide excessive perquisites ✘ Offer a defined benefit pension or supplemental executive retirement plan ✘ Permit hedging or pledging of Adtalem Common Stock ✘ Reward executives without a link to performance |
PRINCIPLES OF EXECUTIVE COMPENSATION
| Principle | Purpose | | Stewardship/Sustainability | ● Reinforce Adtalem’s purpose and long-term vision ● Motivate and reward sustained long-term growth in shareholder value ● Uphold long-term interests of all stakeholders (including students, employees, employers, shareholders, and taxpayers) ● Focus on sustaining and enhancing the quality and outcomes of education programs ● Promote continued differentiation and expansion of Adtalem’s programs | | Accountability | ● Ensure financial interests and rewards are tied to executive’s area of impact and responsibility (division, geography, and function) ● Require timing of performance periods to match timing of employee’s impact and responsibility (short-, medium-, and long-term) ● Emphasize quality, service, and academic and career results ● Articulate well defined metrics, goals, ranges, limits, and results ● Motivate and reward achievement of strategic goals, with appropriate consequences for failure ● Comply with legislation and regulations | | Alignment | ● Promote commonality of interest with all stakeholders (including students, employees, employers, shareholders, and taxpayers) ● Reflect and reinforce Adtalem’s values and culture ● Promote commonality of interests across business units, geography, and up, down and across the chain of command ● Provide a balance between short- and long-term performance | | Engagement | ● Attract and retain high quality talent and provide for organizational succession ● Provide market competitive total compensation and benefits packages at all levels ● Promote consistent employee development at all levels ● Motivate urgency, creativity, and dedication to Adtalem’s purpose ● Clearly communicate the link between pay and performance | | Transparency | ● Clearly communicate compensation structure, rationale, and outcomes to all employees and shareholders ● Provide a simple and understandable structure that is easy for internal and external parties to understand ● Maintain a reasonable and logical relationship between pay at different levels ● Base plan on systematic goals that are objective and clear, with appropriate level of discretion |
2024 COMPENSATION SNAPSHOT
| | | Objective | Time Horizon | Performance Measures | Additional Explanation | | Salary (cash) | Base Salary | Reflect experience, market competition and scope of responsibilities | Reviewed Annually | ● Assessment of performance in prior year. | ● Represents, 9% and 29% (on average) of target Total Direct Compensation for Mr. Beard and other NEOs, respectively. | | Annual Incentive (cash) | Management Incentive Plan (“MIP”) | Reward achievement of short-term operational business priorities | 1 year | ● Revenue* ● Adjusted earnings per share* ● Individual performance modifier | ● Represents, 25% to 35% (on average) of target Total Direct Compensation for Mr. Beard and other NEOs, respectively. | | Long-Term Incentive (equity) | RSUs | Align interests of management and shareholders, and retain key talent | 3 year ratable vest | ● Stock price growth | ● Represents 40% of NEO regular annual LTI granted in FY24.** | | | Revenue Growth PSUs | Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent | 3 year cliff vest | ● Revenue Growth | ● Represents 30% of NEO regular annual LTI granted in FY24.** | | | EBITDA Margin PSUs | | | ● EBITDA Margin | ● Represents 30% of NEO regular annual LTI granted in FY24.** |
2024 COMPENSATION SNAPSHOT
| * The MIP payout for executive leadership of the institutions is based on revenue and adjusted operating income at such executive’s institution(s). |
2024 COMPENSATION SNAPSHOT
| ** The total regular annual long-term incentive award consisting of both RSUs and PSUs represents 66% of target Total Direct Compensation for Mr. Beard and 36% of target Total Direct Compensation for other NEOs (on average), respectively. |
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation
| The annual cash incentive, delivered through the MIP, provides the NEOs with the opportunity to earn rewards based on the achievement of organizational and institutional performance, as well as individual performance. How the MIP Works MIP target award opportunities for each NEO are set by the Compensation Committee, and in the case of Mr. Beard, by the independent members of the Board, based on factors including external surveys of peer company practices for positions with similar levels of responsibility. These targets, which are expressed as a percentage of base salary, are then reviewed at the beginning of each fiscal year based on updated market compensation data. For fiscal year 2024, the MIP provided Mr. Beard with a target award opportunity of 125% of base salary and the other NEOs with a target award opportunity ranging from 60% to 80% of base salary. The target award opportunity for Mr. Beard was increased from 120% in fiscal year 2023 to 125% of base salary in fiscal year 2024 based on a review of market competitiveness. No other changes were made to the MIP target award opportunity as a percentage of base salary for the other NEOs. For fiscal year 2024, the financial performance measures for the MIP, and the weightings of such measures, were Adtalem revenue (45%) and adjusted earnings per share (55%) for Mr. Beard, Mr. Phelan, and Mr. Beck, institution revenue (60%) and institution adjusted operating income (40%) for Mr. Betz and Adtalem revenue (60%) and all institution adjusted operating income prior to corporate overhead expense allocations (40%) for Mr. Herrera. The financial performance measures were unchanged from fiscal year 2023. In addition, there was no change to the structure and application of the individual performance component of the MIP. The individual performance modifier can adjust the MIP award determined based on the financial performance results by a factor that can range from 0% to 125%. The weightings of the financial performance measures and the application of an individual performance modifier are intended to place emphasis on the financial performance results while continuing to incorporate individual performance into the MIP award. | Creating a Strong Link to Pay-for-Performance We believe the MIP payouts made to our NEOs for fiscal year 2024 support our executive compensation objective of pay-for-performance by rewarding our NEOs to the extent they met or exceeded pre-established financial and individual performance goals. |
Annual Cash Incentive Compensation
| Actual MIP awards can be higher or lower than the target opportunity based on the results of each financial performance measure. Performance below the threshold for the goal will result in no payment for that performance goal. Performance at or above threshold can earn an award ranging from 50% of the target amount to a maximum of 200% of the target amount for maximum performance. In addition to the actual financial results achieved, the Compensation Committee, or the independent members of the Board in the case of Mr. Beard, also considers individual performance over the course of the fiscal year for each NEO and may increase or decrease the MIP award by applying an individual performance modifier of between 0% and 125%, which could result in a maximum MIP payout of 250% of the target amount. Individual performance goals that factor into the individual performance modifier reflect functional results and/or institution performance appropriate for the NEO, as well as academic outcomes, organizational strength, and the advancement of Adtalem’s core values. Individual performance goals are designed to drive initiatives that support Adtalem’s strategy and further align leadership with Adtalem’s student-focused purpose. The maximum amount of 250% of target rewards exceptional performance compared to expectations, over-delivery of strategic initiatives, and/or achievement of initiatives not contemplated at the time goals were set. Actual earned MIP awards are determined after the fiscal year has ended and audited financial results have been completed (i.e., in the first quarter of the next fiscal year). Thus, MIP awards for fiscal year 2024 were determined and paid in the early part of fiscal year 2025, after the results for the fiscal year ended June 30, 2024 were confirmed. MIP financial performance measures and | MIP Performance Measures The Compensation Committee determined that Adtalem revenue and adjusted earnings per share, along with institution revenue and adjusted operating income, effectively balance top line revenue growth and bottom-line profitability and results and are the most appropriate short-term metrics to support our business objectives. |
Annual Cash Incentive Compensation
| Adtalem Global Education Inc. | 2024 Proxy Statement 45 |
Annual Cash Incentive Compensation
| goals are typically set by the Compensation Committee in the first quarter of the year in which the performance is measured. |
Annual Cash Incentive Compensation
In measuring financial performance, the Compensation Committee may adjust results for certain unusual, non-recurring, or other items to ensure the MIP rewards true operational performance as it is perceived by investors and as consistently measured. Appendix A details the adjustments made in the last three fiscal years. In instances where an institution has not demonstrated performance commensurate with the potential award, the Compensation Committee may exercise negative discretion and reduce MIP payouts for individuals with oversight over the applicable institution. In the case of acquisitions and dispositions, the Compensation Committee generally does not include revenue, and corresponding earnings per share or operating income, in its evaluation of achievement against targets unless such expected revenue, and corresponding earnings per share or operating income, had been factored into the performance target. Similarly, revenue, and corresponding earnings per-share or operating income performance is typically adjusted for dispositions during the year. The percentages assigned to the financial performance measures for each NEO for fiscal year 2024 are as follows:
Annual Cash Incentive Compensation
| | | Adtalem | | Institution | | | Adtalem | Adj. Earnings | Institution | Adj. Operating | | Name | Revenue | Per Share | Revenue | Income (1) | | Stephen W. Beard | 45% | 55% | | | | Robert J. Phelan | 45% | 55% | | | | Douglas G. Beck | 45% | 55% | | | | Michael Betz | | | 60% | 40% | | Maurice Herrera | 60% | | | 40% |
Annual Cash Incentive Compensation
| (1) The adjusted operating income for Mr. Betz was based on Walden University and the adjusted operating income for Mr. Herrera was based on all institutions prior to corporate overhead expense allocations. |
2024 Performance Goals
2024 Performance Goals Financial goals set for our MIP participants are derived from Adtalem’s fiscal year operating plans, which are recommended by Adtalem’s executive management team and approved by the Board at the beginning of each fiscal year. For fiscal year 2024, these plans translated to financial performance goals of $1,558 million of revenue and $4.45 of adjusted earnings per share.
2024 Performance Goals
| | Plan | | | | Metric | Threshold | Target | Maximum | | Adtalem Revenue | $1,402 | $1,558 | $1,635 | | Adtalem Adjusted EPS | $3.56 | $4.45 | $4.90 |
2024 Performance Goals
The fiscal year 2024 revenue target under the MIP was 7.4% higher than fiscal year 2023 actual results of $1,451 million, which reflected expected growth from all three reportable segments. The fiscal year 2024 adjusted earnings per share target goal under the MIP was 2.3% higher than fiscal year 2023 actual results of $4.35, which, again reflected expected growth from all segments, lower interest expense, as well as the expected effect of cost control measures across all segments and home office. The Compensation Committee considers the organization’s performance goals to represent the best estimate of what the organization could deliver if management, individually and collectively, were to materially satisfy its goals and objectives for the year. All goals are designed to be aggressive yet achievable, with the expectation that it would take extraordinary performance on the part of management to exceed them to the extent necessary to yield maximum incentive payouts under the MIP. The Compensation Committee approves individual performance goals and objectives for the CEO at the beginning of each fiscal year. The CEO also works collaboratively with the other NEOs in developing their respective individual performance goals and in assigning weightings to such goals to place additional emphasis on higher priorities. Individual performance goals are factors in determining base salary adjustments, annual cash incentive compensation, and future awards of long-term incentive compensation. Individual performance goals intentionally include elements that can be rated objectively as well as, to a lesser extent, elements that are of a subjective nature. Individual performance goals are used to drive stretch performance across a broad range of areas considered critical to our strategy and purpose. This mix of objective and subjective criteria allows the evaluator — the independent members of the Board in the case of the CEO, and the CEO with input and approval from the Compensation Committee in the case of the other NEOs — to assess the individual’s performance against objective criteria, while utilizing his or her discretion to make adjustments based on the individual’s perceived contributions and other subjective criteria.
2024 Performance Goals
| 46 2024 Proxy Statement | Adtalem Global Education Inc. |
2024 Performance Goals
A summary of the primary 2024 individual performance goals and objectives established for each of our NEOs follows:
2024 Performance Goals
| | ● ● ● | | Stephen W. Beard (President and Chief Executive Officer) | ● Achieve fiscal year 2024 operating metrics, including revenue up 9.2 percent year-over-year ● Improve academic outcomes and customer experience ● Strengthen performance against CEO competencies of strategy, stakeholder management, people management, leadership, and culture | | Robert J. Phelan (Senior Vice President, Chief Financial Officer) | ● Deliver fiscal year 2024 operating plan ● Drive efficiencies and sustainable synergies providing the ability to invest for future growth ● Accelerate growth through people ● Improve operational and compliance function | | Douglas G. Beck (Senior Vice President, General Counsel, Corporate Secretary and Institutional Support Services) | ● Further develop relationship with Department of Education ● Protect Walden’s graduate programs ● Strengthen our relationships with accreditors in US and Caribbean ● Enhance Legal, Regulatory Affairs and ISS teams to deliver high quality service | | Michael Betz (President, Walden University) | ● Achieve Walden University financial results ● Improve Walden University operating metrics ● Improve student experience | | Maurice Herrera (Senior Vice President, Chief Marketing Officer) | ● Deliver fiscal year 2024 operating plan ● Grow new student enrollments ● Elevate consumer centricity ● Integrate marketing innovation |
2024 Performance Goals
| Adtalem Global Education Inc. | 2024 Proxy Statement 47 |
Fiscal Year 2024 MIP Decisions
Fiscal Year 2024 MIP Decisions Based on an evaluation of organizational performance relative to MIP measures set at the beginning of fiscal year 2024, the final MIP awards were based on the following financial results, as adjusted for special items described in Appendix A:
Fiscal Year 2024 MIP Decisions
| ● | Adtalem achieved 101.7% performance relative to Plan which resulted in a payout of 134.8% for the fiscal year 2024 revenue component; and |
Fiscal Year 2024 MIP Decisions
| ● | Adtalem achieved 112.6% performance relative to Plan which resulted in a payout of 200% for the fiscal year 2024 adjusted earnings per share component. |
Fiscal Year 2024 MIP Decisions
*Adjusted results exclude impact of special items. See Appendix A for a reconciliation to reported results. The table below shows the threshold, target, and maximum goals for revenue and adjusted earnings per share under the fiscal year 2024 MIP, the performance achieved, and the resulting payout.
Fiscal Year 2024 MIP Decisions
| | Target Award | | | | Actual Results | Performance | Payout as | | | Opportunity | Plan | | | (excluding | Relative | % of | | Metric | (Weighting) | Threshold | Target | Maximum | special items)(1) | to Plan | Target | | Adtalem Revenue | 45% | $1,402 | $1,558 | $1,635 | $1,585 | 101.7% | 134.8% | | Adtalem Adjusted EPS | 55% | $3.56 | $4.45 | $4.90 | $5.01 | 112.6% | 200.0% | | Organization Performance | 100% | | | | | 107.7% | 170.7% |
Fiscal Year 2024 MIP Decisions
| (1) See Appendix A for a reconciliation to reported results. |
Fiscal Year 2024 MIP Decisions
Final MIP award calculations also took into consideration evaluations of individual performance for each NEO during the fiscal year. In the case of each of the NEOs, including Mr. Beard, the MIP award calculations included the application of an individual performance modifier which were 125% for Mr. Beard, 95% for Mr. Phelan, 110% for Mr. Beck, 120% for Mr. Betz, and 95% for Mr. Herrera. The independent directors, in the case of Mr. Beard, and the Compensation Committee, in the case of the other NEOs and taking into account the recommendations of Mr. Beard, determined that the individual performance modifiers were appropriate based on the individual performance and contributions of each of the NEOs in fiscal year 2024 as described below. Based on all of these applicable factors, the Compensation Committee approved the following MIP awards to the NEOs:
Fiscal Year 2024 MIP Decisions
| | Annual | | | | | | Target as a | | | | | | Percentage of | Target Award | Actual | Percent of | | Name | Base Salary | Opportunity | Award | Target Earned | | Stephen W. Beard | 125% | $1,250,000 | $2,666,563 | 213% | | Robert J. Phelan | 80% | $399,514 | $647,719 | 162% | | Douglas G. Beck | 70% | $375,064 | $704,093 | 188% | | Michael Betz | 75% | $413,100 | $991,440 | 240% | | Maurice Herrera | 60% | $271,544 | $337,008 | 124% |
Fiscal Year 2024 MIP Decisions
| 48 2024 Proxy Statement | Adtalem Global Education Inc. |
Fiscal Year 2024 MIP Decisions
Set forth below, as an example of the MIP calculation for NEOs, is a summary of the calculation of the fiscal year 2024 award for Mr. Beard:
Fiscal Year 2024 MIP Decisions
| | | | | | Payout | | | | | | | | | as a % of | | | | | | | | | Target Award | | | | | | | | | Opportunity | | | | | | | Performance | | Based on | | | | | Target Award | | Achieved | Performance | Performance | Target Award | | | | Opportunity | | (Excluding | Relative | Relative | Opportunity | Actual | | Metric | (Weighting) | Target | Special Items) | to Target | to Target | (Amount) | Award | | Adtalem Revenue | 45% | $1,557 | $1,585 | 101.7% | 134.8% | $562,500 | $758,250 | | Adtalem Adjusted EPS | 55% | $4.45 | $5.01 | 112.6% | 200.0% | $687,500 | $1,375,000 | | Organizational Performance | 100% | | | | 107.7% | $1,250,000 | $2,133,250 | | Individual Performance Modifier | | | | | 1.25x | $— | $533,313 | | Total | | | | | 213.0% | $1,250,000 | $2,666,563 |
Fiscal Year 2024 MIP Decisions
In reviewing Mr. Beard’s performance, the independent members of the Board evaluated his performance against each of his individual goals and determined that the application of a 125% individual performance modifier was warranted and appropriate given the financial, operational, and strategic results achieved during fiscal year 2024, as noted below:
Fiscal Year 2024 MIP Decisions
| ● | Revenue exceeded operating plan by $27M. |
Fiscal Year 2024 MIP Decisions
| ● | Adjusted EPS exceeded operating plan by $0.56 per share. |
Fiscal Year 2024 MIP Decisions
| ● | Increased year-end total enrollment and accelerated growth every quarter. |
Fiscal Year 2024 MIP Decisions
| ● | Both Walden and Chamberlain exceeded plan on total enrollment. |
Fiscal Year 2024 MIP Decisions
| ● | Med/Vet continued sequential improvement meeting expectations. |
Fiscal Year 2024 MIP Decisions
| ● | Total Shareholder Return over past three years was 90%+. |
Fiscal Year 2024 MIP Decisions
| ● | Continued record high first-time residency attainment rates at medical schools (98%+).(6) |
Fiscal Year 2024 MIP Decisions
| ● | Persistence improved year-over-year across 4 of 5 institutions. |
Fiscal Year 2024 MIP Decisions
| ● | Strong execution against “Growth with Purpose” organic growth strategy with results of operations exceeding the top-end targets of year-one bankable plan. |
Fiscal Year 2024 MIP Decisions
| ● | Led rapid and authoritative response to short seller and successfully maintained and enhanced investor confidence |
Fiscal Year 2024 MIP Decisions
| ● | Led a step-change increase in government relations engagement and visibility with key governmental constituents. |
Fiscal Year 2024 MIP Decisions
| ● | Demonstrated commitment to high performance with high integrity through ongoing upgrades to senior leadership team. |
Fiscal Year 2024 MIP Decisions
| ● | Demonstrated our commitment to measuring our progress in creating a thriving, high-performance culture as measured by Organizational Health Index, Employee Engagement and home office Net Promoter Scores. |
Fiscal Year 2024 MIP Decisions
| ● | Launched several new employee resource groups in service of our commitment to diversity, equity and inclusion. |
Fiscal Year 2024 MIP Decisions
(6) First-time residency attainment rate is the percent of students attaining a 2024-25 residency position out of all graduates or expected graduates in 2023-24 who were active applicants in the 2024 National Resident Matching Program (“NRMP”) match or who attained a residency position outside the NRMP match.
Fiscal Year 2024 MIP Decisions
| Adtalem Global Education Inc. | 2024 Proxy Statement 49 |
Fiscal Year 2024 MIP Decisions
In determining MIP awards for the other NEOs, the Compensation Committee evaluated the NEOs against their individual goals taking into consideration the following performance highlights:
Fiscal Year 2024 MIP Decisions
| Robert J. Phelan ● Achieved annual financial results and operating plan which beat expectations each quarter as well full year guidance. ● Aligned with and supported the transformation office in driving execution of the Growth with Purpose strategy which resulted in significant achievement of strategic initiatives during the year. ● Implemented initiatives that improved the customer focus and operational efficiency of the Finance team. Made changes to the senior leadership team that resulted in improved support provided to the institutions. ● Through audit and review, improved the company’s cybersecurity and enterprise risk management processes. | | Douglas G. Beck ● Settled outstanding litigation on favorable terms with no additional litigation targeting Walden’s graduate programs. ● Strengthening relationships with Department of Education and our accreditors in the US and Caribbean. ● Focused on improving the level of customer service provided by the Legal, Regulatory and ISS teams and made marked improvements during the year based on customer feedback. | | Michael Betz ● Increased Walden year-over-year revenue by 11.2% and beat plan by over $30M. ● Improved Walden growth while also improving operating income margins. Improved operating income by 15.5% vs prior year, beat plan by $26M, and expanded year-over-year operating income margins. ● Achieved increase in new student growth with growth across all programs and degree levels. ● Achieved positive year-over-year total enrollment growth. ● Achieved significant improvement in retention rates with persistence at an all-time high. ● Achieved a significant increase in NPS score from prior year with 24% increase over highest ever recorded NPS score. ● Achieved strong gains in NPS areas identified as a weakness last year, e.g., Nursing, field experience. | | Maurice Herrera ● Implementation of Growth with Purpose initiatives contributed significant revenue and adjusted EBITDA to fiscal year 2024 operating plan. ● Generated significant cost savings to FY24 operating plan through marketing and advertising initiatives. ● Exceeded enterprise new student enrollments with 18% year-over-year growth. ● Grew organic inquiries at Walden and Chamberlain by double digits. ● Launched ad campaigns that drove increase in marketing ROI. ● Initiated category segmentations for nursing and social good that are better enabling content and media planning. ● Integrated brand health and equity studies. ● Crafted framework for marketing organization optimization. ● Architected new approach to creative agencies that is both efficient and effective at campaign ideation. ● Spearheaded enterprise rebranding effort with new vendor to begin in fiscal year 2025. |
Long-Term Incentive Compensation
Long-Term Incentive Compensation Long-term incentive compensation at Adtalem consists of different forms of equity-based awards. Beginning with fiscal year 2023, the Compensation Committee determined that it would no longer grant stock options and would grant equity-based awards only in the form of RSUs and PSUs. The elimination of stock options was intended to simplify the long-term incentive program and to shift more of the equity mix to performance-based equity awards. As a result, a significant portion of the equity-based awards granted under the annual long-term incentive program (60% of the executive officers’ annual awards) is granted in the form of PSUs with the remaining 40% granted in the form of RSUs. The Compensation Committee targets the value of long-term incentive compensation for NEOs to represent a substantial percentage of their total compensation opportunity. These incentives are intended to serve three complementary objectives of our compensation program:
Long-Term Incentive Compensation
| ● | Align executives’ long-term interests with those of our shareholders; |
Long-Term Incentive Compensation
| ● | Drive achievement of and reward executives for the delivery of long-term business results; and |
Long-Term Incentive Compensation
| ● | Promote long-term retention of key executives who are critical to our operations. |
How the Long-Term Incentive Plan Works
How the Long-Term Incentive Plan Works The Compensation Committee granted equity-based awards to each of the NEOs, including Mr. Beard, in August 2023 in the form of RSUs and in November 2023 in the form of PSUs based on both retrospective and prospective considerations and organizational and individual considerations. The PSU grants were made in November 2023 to give the leadership team and the Compensation Committee time to complete Adtalem’s long-term strategic plan and set goals that would achieve the long-term strategic plan and that properly aligned management and shareholder interests. The Compensation Committee considered the same seven criteria described in the "Annual Base Salary Review" section above in determining the amount of these awards. Annual equity awards were delivered through a mix of RSUs and PSUs to provide a reasonable balance to the equity portfolio.
How the Long-Term Incentive Plan Works
| 50 2024 Proxy Statement | Adtalem Global Education Inc. |
How the Long-Term Incentive Plan Works
All of the NEOs, including Mr. Beard, received an equity-based award with 60% of the long-term incentive opportunity granted as PSUs and 40% of the long-term incentive opportunity granted as RSUs.
How the Long-Term Incentive Plan Works
| Restricted Stock Units (RSUs): RSUs align the interests of management with those of shareholders and reward long-term value creation. To promote retention, RSUs vest in equal annual installments over a three-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem. Performance Share Units (PSUs): PSUs are designed to reward strong performance based on two financial performance measures. For fiscal year 2024, the Compensation Committee selected revenue growth and adjusted EBITDA margin as the financial performance measures to focus executives on growth and profitability. In fiscal year 2024, PSUs granted to the NEOs were split equally among these two financial performance measures. These PSUs vest after three years based on the achievement of revenue growth and EBITDA margin performance as compared to the goals set by the Compensation Committee based on performance averaged over the three-year period. The goals for the PSUs are based on the multi-year strategic plan. In some cases, stretch goals are built in to help bridge to anticipated future year targets to ensure we are appropriately working towards our long-term strategic plan. | Focusing on Long-Term Results The Compensation Committee believes that long-term equity compensation is an important retention tool and, therefore, chose to use a three-year ratable vesting schedule for grants of RSUs and a three-year cliff vesting schedule for PSUs, to encourage longer-term focus and retention. |
Fiscal Year 2024 Long-Term Incentive Decisions
Fiscal Year 2024 Long-Term Incentive Decisions For fiscal year 2024, NEOs received the following stock-based awards:
Fiscal Year 2024 Long-Term Incentive Decisions
| | | | 2024 Long-Term | | Name | RSUs | PSUs | Incentive Grant | | Stephen W. Beard | $2,800,147 | $4,199,894 | $7,000,041 | | Robert J. Phelan | $372,207 | $557,626 | $929,833 | | Douglas G. Beck | $223,066 | $335,240 | $558,306 | | Michael Betz | $269,914 | $404,942 | $674,856 | | Maurice Herrera | $221,777 | $333,026 | $554,803 |
Payouts from Fiscal Year 2022 PSU Awards
Payouts from Fiscal Year 2022 PSU Awards PSU awards granted to Mr. Phelan and Mr. Beck in November 2021 vested in August 2024. The PSU awards were split evenly between ROIC and FCF per share targets over the three-year performance period. Mr. Beard, Mr. Betz, and Mr. Herrera did not receive similar PSUs in November 2021. For the November 2021 PSUs, the payout earned for ROIC was 55.0% of the target number of PSUs granted and the payout earned for FCF per share was 71.2% of the target number of PSUs granted. The tables below show the performance measures and targets established for the November 2021 PSUs, the performance achieved, and the resulting payout.
Payouts from Fiscal Year 2022 PSU Awards
| | | Performance Goals | | | Payout (as a % of Target) | | Goal | | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | | | ROIC | FY22-24 (3-year average) | | | | 55.0% | | FCF per share | FY22-24 (3-year average) | | | | 71.2% |
Special Supplemental Long-Term Incentive Program
Special Supplemental Long-Term Incentive Program In connection with Growth with Purpose, Adtalem’s multi-year transformational strategy, the Compensation Committee has provided supplemental compensation opportunities to a select group of Adtalem employees to motivate and reward the successful execution of the Growth with Purpose transformation, a multi-year, operational excellence focused strategy designed to accelerate Adtalem’s performance and preserve its dominant market position. In furtherance of this objective, to strengthen the alignment of management’s and shareholders’ interests and motivate and retain personnel critical to the execution of the Growth with Purpose transformation, the Compensation Committee approved a special supplemental incentive program, the Growth with Purpose Incentive Program, in early fiscal year 2024. The program will reward participating employees for achieving specific transformation initiatives and superior financial results that will result in a step change in the organic growth trajectory of the business for which there is no recent precedent in Adtalem’s history. The Growth with Purpose transformation seeks to drive substantially higher enrollment, expand the scale of Adtalem’s educational platform, deliver record levels of profitability and drive
Special Supplemental Long-Term Incentive Program
| Adtalem Global Education Inc. | 2024 Proxy Statement 51 |
Special Supplemental Long-Term Incentive Program
substantial long-term value creation for shareholders. We are pleased to be delivering on these exceptional results and we expect to continue to do so in fiscal year 2025. The Growth with Purpose Incentive Program is based on a two-year performance period covering fiscal years 2024 and 2025 and includes several different tiers of participating employees, with each tier provided a different level of equity and/or cash incentive award opportunity. Each of Adtalem’s current executive officers, including Mr. Beard and the other NEOs, are participants in the top tier of the Growth with Purpose Incentive Program which provides for a grant of PSUs equal in value to 50% of the executive officer’s fiscal year 2024 annual long-term incentive award target opportunity as shown in the table below (for any executive officer hired subsequent to the initial grant date, such executive officer received a pro-rated PSU award based on date of hire).
Special Supplemental Long-Term Incentive Program
| NEO | Growth with Purpose PSU Grant Value | Growth with Purpose Target # of PSUs (1) | | Stephen W. Beard | $3,499,862 | 81,430 | | Robert J. Phelan | $499,428 | 11,620 | | Douglas G. Beck | $227,794 | 5,300 | | Michael Betz | $275,502 | 6,410 | | Maurice Herrera | $226,074 | 5,260 |
Special Supplemental Long-Term Incentive Program
| (1) PSUs were granted on August 23, 2023 based on Adtalem share price of $42.98. |
Special Supplemental Long-Term Incentive Program
In aggregate, the executive officers were awarded $5.78 million in PSUs, which represents less than 0.34 percent of common stock outstanding (at target). The Compensation Committee elected to grant the awards to executive officers solely in PSUs to drive performance, strengthen alignment with shareholders, support enhanced share ownership and be consistent with the Compensation Committee’s focus on pay-for-performance. The PSUs may be earned based on the achievement of two equally weighted measures: revenue growth and adjusted EBITDA margin. Payouts are based upon actual financial performance as measured following the completion of fiscal year 2025 and, if earned, will vest on August 23, 2025. All PSUs granted to executive officers will be earned only if our team delivers results that meet or exceed performance criteria. As with the PSUs that are granted annually under Adtalem’s long-term incentive program, the PSUs granted under the Growth with Purpose Incentive Program provide for no payout if actual financial performance is below threshold and for an increased payout if financial performance is above target (up to 200% of the target number of PSUs granted). Although the financial performance measures for the Growth with Purpose Incentive Program PSUs are the same financial performance measures as for the annual PSUs that were granted in fiscal year 2024 (revenue growth and adjusted EBITDA margin), the Growth with Purpose Incentive Program is designed to be supplemental to the annual PSU program and, accordingly, is based on the achievement of challenging performance goals that reflect substantially higher levels of revenue and adjusted EBITDA as of the end of fiscal year 2025. For participants to receive a payout of the PSUs granted to them under the Growth with Purpose Incentive Program, Adtalem’s financial performance for revenue and adjusted EBITDA must exceed the goals set for the annual PSUs and meet the higher level of goals under Growth with Purpose. Such significant financial performance will redound to the benefit of Adtalem’s shareholders. The design of the Growth with Purpose Incentive Program acknowledges the increased efforts required of our executive officers to lead the successful execution of our strategic transformation and focuses our employees on achieving key operational and financial targets by the end of fiscal year 2025- the pivotal year of our multi-year business transformation. The Compensation Committee views the Growth with Purpose Incentive Program as an appropriate structure aligned to support Adtalem’s current strategic objectives. The supplemental PSU awards granted to executive officers under the Growth with Purpose Incentive Program are not intended to become an element of the ongoing executive compensation program.
Role of the Compensation Committee
Each year, the Compensation Committee recommends CEO compensation to the independent members of the Board, taking into consideration the CEO’s performance evaluation and advice from the independent executive compensation consulting firm engaged by the Compensation Committee. In determining the CEO’s long-term incentive compensation, the Compensation Committee considers Adtalem’s absolute and relative performance, incentive awards to CEOs at comparable companies, past awards, and the CEO’s expected future contributions, as well as other factors it deems appropriate. The Compensation Committee approves base salary, annual cash incentive, and long-term incentive compensation for Adtalem’s NEOs, except for the CEO whose compensation package is recommended by the Compensation Committee and approved by the independent members of the Board during executive session.
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee retains ultimate responsibility for compensation-related decisions. To add objectivity to the review process and inform the Compensation Committee of market trends and practices, the Compensation Committee engages the services of an independent executive compensation advisory firm. For fiscal year 2024, the Compensation Committee engaged Meridian as its independent executive compensation consultant. Meridian reviewed Adtalem’s executive compensation structure and incentive plan designs and assessed whether the executive compensation program is competitive and supports the Compensation Committee’s goal to align the interests of executive officers with those of shareholders. For fiscal year 2024, Meridian’s primary areas of assistance were:
Role of the Compensation Consultant
| ● | Gathering information related to current trends and practices in executive compensation, including peer group and broader market survey data; |
Role of the Compensation Consultant
| ● | Reviewing, analyzing, and providing recommendations for Adtalem’s list of peer group companies; |
Role of the Compensation Consultant
| ● | Benchmarking competitive pay levels for NEOs and other executives; |
Role of the Compensation Consultant
| ● | Advising on short-term and long-term incentive plan designs; |
Role of the Compensation Consultant
| ● | Reviewing information and recommendations developed by management for the Compensation Committee and providing input on such information and recommendations to the Compensation Committee; |
Role of the Compensation Consultant
| ● | Attending and participating in all Compensation Committee meetings and most non-employee director executive sessions, as well as briefings with the Compensation Committee chair and management prior to meetings; |
Role of the Compensation Consultant
| ● | Reviewing with management and the Compensation Committee the materials to be used in Adtalem’s Proxy Statement; and |
Role of the Compensation Consultant
| ● | Benchmarking the non-employee director compensation program. |
Role of the Compensation Consultant
The Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and terms of engagement. Thus, the Compensation Committee annually reviews its relationship with, and assesses the independence of, its independent consultant to ensure executive compensation consulting independence. The process includes a review of the services the independent consultant provides, the quality of those services, and fees associated with the services during the fiscal year. The Compensation Committee has assessed the independence of its independent consultants pursuant to applicable SEC rules and NYSE listing standards and has concluded that the independent consultants’ work for the Compensation Committee does not raise any conflict of interest.
Executive Compensation Peer Group
Executive Compensation Peer Group To ensure Adtalem continues to provide total executive compensation that is fair and competitively positioned in the marketplace, the Compensation Committee reviews the pay level, mix, and practices of peer group companies. The Compensation Committee does not target any specific percentile levels in establishing compensation levels and opportunities. While including all large publicly-held, private sector higher education organizations, Adtalem’s peer group also includes a broader group of organizations in order to provide more comprehensive compensation data. Adtalem’s expanded peer group includes publicly-held organizations that provide services over an extended period of time. In consideration of Adtalem’s significant focus on healthcare education, which requires attracting and retaining seasoned healthcare professionals and executives, the peer group also includes healthcare services companies. Revenue of most of the peer group organizations is generally between one-half and two times Adtalem’s revenue.
Executive Compensation Peer Group
| Adtalem Global Education Inc. | 2024 Proxy Statement 53 |
Executive Compensation Peer Group
The following peer group was used to inform compensation decisions for fiscal year 2024
Executive Compensation Peer Group
| 2U Inc. | Chegg | John Wiley & Sons | | Amedisys | Chemed | Laureate Education | | American Public Education | Cross Country Healthcare | MEDNAX, Inc. | | AMN Healthcare | Ensign Group | Perdoceo Education | | Bright Horizons Family Solutions LLC | Graham Holdings Company | Strategic Education | | Brookdale Senior Living Inc. | Grand Canyon Education, Inc. | Stride |
Executive Compensation Peer Group
ADDITIONAL EXECUTIVE COMPENSATION PRACTICES
Employment Agreements
Employment Agreements Adtalem has entered into employment agreements with each NEO that provide for:
Employment Agreements
| ● | Initial annual base salary, subject to annual increases (no decreases except in the case of an across-the-board reduction affecting all executives equally); |
Employment Agreements
| ● | Annual cash incentive opportunity under the MIP, targeted at a percentage of base salary; |
Employment Agreements
| ● | Eligibility to receive annual equity awards under Adtalem’s equity award plans; |
Employment Agreements
| ● | Reimbursement of expenses consistent with Adtalem’s policy in effect at the time; and |
Employment Agreements
| ● | Severance benefits that will be provided upon certain terminations of employment, as further described on page 62 under the caption “2024 Potential Payments Upon Termination or Change-in-Control.” |
Employment Agreements
| 54 2024 Proxy Statement | Adtalem Global Education Inc. |
Employment Agreements
| Employment Agreements Employment agreements provide NEOs with a defined level of financial protection upon loss of employment. Adtalem believes that providing for such income continuity facilitates the hiring of qualified executives and results in greater management stability and lower unwanted management turnover. The Compensation Committee believes that the employment agreements provide: ● Security and incentives that help retain and attract top executives; ● Greater ability for Adtalem to retain key executives following an extraordinary corporate transaction; and ● Benefits to Adtalem including non-competition and non-solicitation covenants by NEOs. |
Change-in-Control
Change-in-Control Adtalem provides benefits to its NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (e.g., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, Adtalem’s equity compensation plans, and the award agreements used to implement them, provide for accelerated vesting of outstanding equity awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control. See “2024 Potential Payments Upon Termination or Change-in-Control” beginning on page 62 for a detailed description of potential payments and benefits to the NEOs under Adtalem’s compensation plans and arrangements upon termination of employment or a change of control of Adtalem.
OTHER EXECUTIVE COMPENSATION CONSIDERATIONS AND POLICIES
Our directors and executive officers have five years following their initial election, date of appointment, or promotion to an executive officer position, as the case may be, to achieve their stock ownership level. Shares that count toward satisfaction of the guidelines include Adtalem’s Common Stock directly and/or beneficially owned, Adtalem’s Common Stock held in Adtalem’s Retirement Plan, Adtalem’s Common Stock held in Adtalem’s Nonqualified Deferred Compensation Plan, and the pre-tax value of unvested RSUs. Shares that do not count towards satisfaction of the guidelines include unvested PSUs and stock options. Our stock ownership guidelines are deemed to continue to be met by an individual who has achieved the required ownership level but then falls below solely due to a decline in the stock price of Adtalem’s Common Stock. Absent extenuating circumstances, executives who have not yet met the guidelines at the end of their five-year phase-in period are required to retain, until the guidelines are satisfied, 100% of the after-tax shares received from option exercises or the vesting of RSUs or PSUs.
Incentive Compensation Recoupment Policy
basis, erroneously awarded incentive-based compensation received by any current or former executive officer during the three-year period preceding the date on which we are required to prepare an accounting restatement (i) due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or (ii) that corrects an error that is not material to previously issued financial statements, but would result in a material misstatement if the error were not corrected in the current period or left uncorrected in the current period. As indicated in Note 1 to the Consolidated Financial Statements contained in our 2024 Annual Report on Form 10-K, we revised our prior financial statements to correct an error relative to miscalculation of certain line items in the 2023 Consolidated Balance Sheet and Consolidated Statement of Cash Flows. The error was not material to the previously issued financial statements. Although technically a “restatement,” no recovery analysis was required under our Recovery Policy because the metrics upon which incentive compensation had been earned were not affected by the revisions to the previously issued financial statements and, therefore, there was no recoverable incentive compensation. In addition, our Recovery Policy permits recovery of incentive compensation if an officer violates a restrictive covenant or causes reputational damage to the Company. Although this goes beyond what is required by the SEC and NYSE, it further protects the Company and its shareholders. The Board retains sole discretion whether to seek recoupment in these instances. The full text of our Recovery Policy can be found at atge_incentive_compensation_recovery_policy_nov2023.pdf (adtalem.com). It can also be found as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024. In addition, our equity award agreements authorize the Compensation Committee in its sole discretion to recoup from any officer receiving an equity award the portion of an award that was granted, vested, otherwise settled based on financial results that were restated due to the conduct of the officer that was knowing, intentionally fraudulent or illegal.
Compensation Risk Analysis
| ● | Adtalem’s compensation programs are well-designed to encourage behaviors aligned with the long-term interests of shareholders. |
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE This table shows the compensation of each of our NEOs for fiscal years ended June 30, 2024, 2023, and 2022.
2024 SUMMARY COMPENSATION TABLE
| | | | | | | Non-Equity | | | | | | | | Stock | Option | Incentive Plan | All Other | | | Name and | Fiscal | Salary | Bonus | Awards | Awards | Compensation | Compensation | Total | | Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($) | | Stephen W. Beard | 2024 | 987,385 | — | 10,499,903 | — | 2,666,563 | 148,730 | 14,302,581 | | President and | 2023 | 949,846 | — | 5,808,957 | — | 1,205,839 | 89,452 | 8,054,094 | | Chief Executive Officer | 2022 | 828,466 | — | 6,916,139 | 1,103,560 | 258,388 | 97,779 | 9,204,332 | | Robert J. Phelan | 2024 | 497,885 | — | 1,429,261 | — | 807,719 | 22,408 | 2,757,273 | | Senior Vice President, | 2023 | 506,585 | — | 929,694 | — | 528,743 | 22,044 | 1,987,066 | | Chief Financial Officer | 2022 | 436,615 | — | 651,785 | 38,089 | 106,635 | 67,295 | 1,300,419 | | Douglas G. Beck | 2024 | 534,190 | — | 786,100 | — | 864,093 | 81,213 | 2,265,596 | | Senior Vice President, | 2023 | 543,523 | — | 498,567 | — | 502,505 | 61,977 | 1,606,572 | | General Counsel, Corporate Secretary and Institutional Support Services | 2022 | 512,115 | 170,000 | 479,934 | 120,070 | 129,780 | 30,084 | 1,441,983 | | Michael Betz | 2024 | 549,139 | — | 950,358 | — | 1,151,440 | 34,456 | 2,685,393 | | President, | | | | | | | | | | Walden University | | | | | | | | | | Maurice Herrera | 2024 | 451,209 | — | 780,877 | — | 497,008 | 123,379 | 1,852,473 | | Senior Vice President, | 2023 | 459,092 | — | 421,493 | — | 391,411 | 116,163 | 1,388,159 | | Chief Marketing Officer | 2022 | 284,423 | 475,000 | 999,972 | — | 60,409 | 62,087 | 1,881,891 |
2024 SUMMARY COMPENSATION TABLE
| (1) This column shows the salaries paid by Adtalem to its NEOs in fiscal years 2024, 2023, and 2022. The following NEOs have elected to defer a portion of their salaries under the Nonqualified Deferred Compensation Plan: Mr. Beard ($169,322 for 2024, $120,823 for 2023, and $144,767 for 2022); Mr. Beck ($56,228 for 2024, $45,589 for 2023, and $14,262 for 2022); and Mr. Betz ($16,524 for 2024). Amounts shown are inclusive of these deferrals. The base salaries shown in 2024 reflect 26 pay periods and the base salaries shown in 2023 reflect 27 pay periods. |
2024 SUMMARY COMPENSATION TABLE
| (2) This column includes the $170,000 sign-on bonus paid to Mr. Beck in fiscal year 2022 and the $475,000 sign-on bonus paid to Mr. Herrera in fiscal year 2022. |
2024 SUMMARY COMPENSATION TABLE
| (3) The amounts reported in the Stock Awards column represents the grant date fair value of awards of both RSUs and PSUs, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years 2024, 2023, and 2022 calculations can be found at Note 18: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the years ended June 30, 2024 and 2023 and Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2022, respectively. The grant date fair values of the PSUs are based on the probable outcome of the performance conditions to which the PSUs are subject, and the shares the recipient would receive under such outcome. The 2024 Grants of Plan-Based Awards shows the values of PSU awards, assuming that the highest levels of the performance conditions are achieved. The grant date fair value of the 2024 annual PSUs is $55.32 and $42.98 for the 2024 special Growth with Purpose PSUs. The grant date fair value of the PSU awards assuming achievement of maximum performance would be: Mr. Beard – $15,399,512; Mr. Phelan – $2,114,106; Mr. Beck – $1,126,066; Mr. Betz – $1,118,202; and Mr. Herrera – $1,360,888. This column includes a sign-on grant value of $500,155 to Mr. Phelan and $999,972 to Mr. Herrera delivered in RSUs in fiscal year 2022. |
2024 SUMMARY COMPENSATION TABLE
| (4) The amounts reported in the Options Awards column represent the grant date fair value, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal year 2022 calculations can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2022. |
2024 SUMMARY COMPENSATION TABLE
| (5) The MIP compensation reported in this column was earned in fiscal years 2024, 2023, and 2022 and paid in fiscal years 2025, 2024, and 2023, respectively, based upon the MIP guidelines. Mr. Betz has elected to defer a portion of his MIP compensation under the Nonqualified Deferred Compensation Plan ($99,144). In addition to the MIP shown in this column, Mr. Phelan, Mr. Beck, and Mr. Herrera each received $100,000 in fiscal year 2023 and $160,000 in fiscal year 2024, and Mr. Betz received $160,000 in fiscal year 2024 related to the value capture bonus. |
2024 SUMMARY COMPENSATION TABLE
| (6) The amounts indicated in the “all other compensation” column for 2024 include the following: |
2024 SUMMARY COMPENSATION TABLE
| ● | Matching contributions credited under the Retirement Plan for Mr. Beard ($20,700); Mr. Phelan ($20,094); Mr. Beck ($20,115); Mr. Betz ($20,124); and Mr. Herrera ($16,649). |
2024 SUMMARY COMPENSATION TABLE
| ● | Company contributions credited under the Nonqualified Deferred Compensation Plan for Mr. Beard ($109,333); and Mr. Beck ($45,686). |
2024 SUMMARY COMPENSATION TABLE
| ● | Group life insurance premiums paid by Adtalem for Mr. Beard ($1,242); Mr. Phelan ($2,314); Mr. Beck ($2,322); Mr. Betz ($1,242); and Mr. Herrera ($1,592). |
2024 SUMMARY COMPENSATION TABLE
| ● | Personal financial planning services for Mr. Beard ($17,455); Mr. Beck ($13,090); and Mr. Betz ($13,090). |
2024 SUMMARY COMPENSATION TABLE
| ● | As part of Mr. Herrera’s offer of employment, and to cover the cost of Mr. Herrera’s relocation to the Company’s headquarters location, the Company agreed to provide and gross-up a monthly housing allowance. The total housing allowance and related tax gross-up provided to Mr. Herrera in fiscal year 2024 totaled $105,138. |
2024 SUMMARY COMPENSATION TABLE
| 58 2024 Proxy Statement | Adtalem Global Education Inc. |
2024 SUMMARY COMPENSATION TABLE
Employment Agreements with Chief Executive Officer and Other Named Executive Officers Adtalem has entered into employment agreements with each of its NEOs, which are described on pages 62-64 under the caption “Employment Agreements.”
2024 GRANTS OF PLAN-BASED AWARDS
2024 GRANTS OF PLAN-BASED AWARDS This table sets forth information regarding non-equity incentive plan awards and equity incentive plan awards granted to the NEOs in fiscal year 2024.
2024 GRANTS OF PLAN-BASED AWARDS
| | Estimated Future Payouts | | | Estimated Future Payouts | | | All Other | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Stock | | | | Plan Awards(1) | | | Plan Awards(5) | | | Awards: | Grant | | | | | | | | | Number of | Date Fair | | | | | | | | | Shares of | Value of | | | | | | | | | Stock or | Stock | | Name / | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Awards | | Grant Date | ($)(2) | ($)(3) | ($)(4) | (#) | (#) | (#) | (#) | ($)(6) | | Stephen W. Beard | | | | | | | | | | | — | 1,250,000 | 3,125,000 | | | | | | | 8/23/2023 | | | | 40,715 | 81,430 | 162,860 | | 3,499,862 | | 8/23/2023 | | | | | | | 65,150 | 2,800,147 | | 11/8/2023 | | | | 37,960 | 75,920 | 151,840 | | 4,199,894 | | Robert J. Phelan | | | | | | | | | | | — | 399,514 | 998,785 | | | | | | | 8/23/2023 | | | | 5,810 | 11,620 | 23,240 | | 499,428 | | 8/23/2023 | | | | | | | 8,660 | 372,207 | | 11/8/2023 | | | | 5,040 | 10,080 | 20,160 | | 557,626 | | Douglas G. Beck | | | | | | | | | | | — | 375,064 | 937,660 | | | | | | | 8/23/2023 | | | | 2,650 | 5,300 | 10,600 | | 227,794 | | 8/23/2023 | | | | | | | 5,190 | 223,066 | | 11/8/2023 | | | | 3,030 | 6,060 | 12,120 | | 335,240 | | Michael Betz | | | | | | | | | | | — | 413,100 | 1,032,750 | | | | | | | 8/23/2023 | | | | 3,205 | 6,410 | 12,820 | | 275,502 | | 8/23/2023 | | | | | | | 6,280 | 269,914 | | 11/8/2023 | | | | 3,660 | 7,320 | 14,640 | | 404,942 | | Maurice Herrera | | | | | | | | | | | — | 271,544 | 678,860 | | | | | | | 8/23/2023 | | | | 2,630 | 5,260 | 10,520 | | 226,074 | | 8/23/2023 | | | | | | | 5,160 | 221,777 | | 11/8/2023 | | | | 3,010 | 6,020 | 12,040 | | 333,026 |
2024 GRANTS OF PLAN-BASED AWARDS
| (1) Payouts under the MIP were based on performance in fiscal year 2024. Therefore, the information in the “Threshold,” “Target,” and “Maximum” columns reflect the range of potential payouts when the performance goals were set on August 23, 2023. The amounts actually paid under the MIP for fiscal year 2024 appear in the “Non-Equity Incentive Plan Compensation” column of the 2024 Summary Compensation Table. |
2024 GRANTS OF PLAN-BASED AWARDS
| (2) Pursuant to the MIP, performance below a performance goal threshold will result in no payment with respect to that performance goal. |
2024 GRANTS OF PLAN-BASED AWARDS
| (3) The amount shown in this column represents the target incentive payment under the MIP, which is calculated as a set percentage of base salary. |
2024 GRANTS OF PLAN-BASED AWARDS
| (4) Pursuant to the MIP, the amount shown in this column represents the maximum incentive payment, 250% of the target. |
2024 GRANTS OF PLAN-BASED AWARDS
| (5) PSUs were granted under the 2013 Incentive Plan. The PSUs granted on August 23, 2023 were granted under the Growth with Purpose incentive program and based on the performance period fiscal year 2024 through fiscal year 2025. The PSUs granted on November 8, 2023 were the regular annual PSUs based on the performance period fiscal year 2024 through fiscal year 2026. The awards consist of 50% with a target based on revenue growth over a period of three fiscal years and 50% with a target based on EBITDA margin. PSUs will pay out 0% for below threshold performance, and between 50% of target payout for threshold performance and 200% of target for achieving maximum performance or above. Straight-line interpolation will be used to determine achievement between threshold and target. |
2024 GRANTS OF PLAN-BASED AWARDS
| (6) This column shows the grant date fair value of RSUs granted on August 23, 2023 and PSUs (assuming payout at target value) granted on August 23, 2023 and November 8, 2023 in fiscal year 2024, computed in accordance with FASB ASC Topic 718, which was $42.98 for RSUs and $42.98 for the Growth with Purpose PSUs and $55.32 for the regular annual PSUs. |
2024 GRANTS OF PLAN-BASED AWARDS
| Adtalem Global Education Inc. | 2024 Proxy Statement 59 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END This table sets forth information for each NEO with respect to stock options, RSUs, and PSUs held by the NEOs as of June 30, 2024.
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | | | | Stock Awards | | | | | | | | | | | | | Equity | | | | | | | | | | Incentive | | | | | | | | | Equity | Plan | | | | | | | | | Incentive | Awards: | | | | | | | | | Plan | Market or | | | | | | | | | Awards: | Payout | | | | | | | | Market | Number of | Value of | | | Number of | Number of | | | Number of | Value of | Unearned | Unearned | | | Securities | Securities | | | Shares or | Shares or | Shares, | Shares, | | | Underlying | Underlying | | | Units of | Units of | Units or | Units or | | | Unexercised | Unexercised | Option | | Stock That | Stock That | Other Rights | Other Rights | | | Options | Options | Exercise | Option | Have Not | Have Not | That Have | That Have | | | Exercisable | Unexercisable | Price | Expiration | Vested | Vested | Not Vested | Not Vested | | Name | (#) | (#) | ($) | Date(1) | (#)(2) | ($)(3) | (#)(4) | ($)(5) | | Stephen W. Beard | 15,475 | — | 49.05 | 8/22/2028 | | | | | | | 21,550 | 9,432 | 43.39 | 8/28/2029 | | | | | | | 28,293 | 32,839 | 32.03 | 8/26/2030 | | | | | | | 36,687 | 36,688 | 37.79 | 9/8/2031 | | | | | | | | | | | 167,873 | 11,450,618 | 241,670 | 16,484,310 | | Robert J. Phelan | 2,925 | 975 | 32.03 | 8/26/2030 | | | | | | | 1,312 | 1,313 | 36.46 | 8/25/2031 | | | | | | | | | | | 23,688 | 1,615,759 | 38,000 | 2,591,980 | | Douglas G. Beck | 8,275 | 4,138 | 36.46 | 8/25/2031 | | | | | | | | | | | 18,899 | 1,289,101 | 27,460 | 1,873,047 | | Michael Betz | | | | | 9,907 | 675,757 | 21,310 | 1,453,555 | | Maurice Herrera | | | | | 17,930 | 1,223,006 | 17,400 | 1,186,854 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) The table below details the vesting schedule for stock option grants based on the expiration date of the relevant grant. In general, option grants vest 25% on each of the first four anniversaries of the date of grant. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Option Expiration Dates | Grant Dates | Options Vesting Dates | | | | | 8/22/2028 | 8/22/2018 | 8/22/2019 | 8/22/2020 | 8/22/2021 | 8/22/2022 | | 8/28/2029 | 8/28/2019 | 8/28/2020 | 8/28/2021 | 8/28/2022 | 8/28/2023 | | 8/26/2030 | 8/26/2020 | 8/26/2021 | 8/26/2022 | 8/26/2023 | 8/26/2024 | | 8/25/2031 | 8/25/2021 | 8/25/2022 | 8/25/2023 | 8/25/2024 | 8/25/2025 | | 9/8/2031 | 9/8/2021 | 9/8/2022 | 9/8/2023 | 9/8/2024 | 9/8/2025 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (2) The table below details the vesting schedule for RSUs, which vest 25% on each of the first four anniversaries of the date for awards granted prior to fiscal year 2023. Beginning in fiscal year 2023, RSUs vest 33% on each of the first three anniversaries of the date of grant. In addition to the annual grant, Mr. Herrera received a RSU grant on November 10, 2021 as part of an initial sign-on award granted upon his appointment as Chief Marketing Officer, which vests 33% on each of the first, second, and third anniversaries of the date of grant. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Number of RSUs Vesting | | | | | | Name | Grant Date | Year 1 | Year 2 | Year 3 | Year 4 | Total | | Stephen W. Beard | 8/26/2020 | — | — | — | 4,033 | 4,033 | | Stephen W. Beard | 9/8/2021 | — | — | 29,215 | 29,215 | 58,430 | | Stephen W. Beard | 8/24/2022 | — | 20,130 | 20,130 | — | 40,260 | | Stephen W. Beard | 8/23/2023 | 21,716 | 21,717 | 21,717 | — | 65,150 | | Robert J. Phelan | 8/26/2020 | — | — | — | 418 | 418 | | Robert J. Phelan | 8/25/2021 | — | — | 390 | 390 | 780 | | Robert J. Phelan | 11/10/2021 | — | — | 3,695 | 3,695 | 7,390 | | Robert J. Phelan | 8/24/2022 | — | 3,220 | 3,220 | — | 6,440 | | Robert J. Phelan | 8/23/2023 | 2,886 | 2,887 | 2,887 | — | 8,660 | | Douglas G. Beck | 6/14/2021 | — | — | — | 7,785 | 7,785 | | Douglas G. Beck | 8/25/2021 | — | — | 1,235 | 1,235 | 2,470 | | Douglas G. Beck | 8/24/2022 | — | 1,727 | 1,727 | — | 3,454 | | Douglas G. Beck | 8/23/2023 | 1,730 | 1,730 | 1,730 | — | 5,190 | | Michael Betz | 8/24/2022 | — | 1,813 | 1,814 | — | 3,627 | | Michael Betz | 8/23/2023 | 2,093 | 2,093 | 2,094 | — | 6,280 | | Maurice Herrera | 11/10/2021 | — | — | 9,850 | — | 9,850 | | Maurice Herrera | 8/24/2022 | — | 1,460 | 1,460 | — | 2,920 | | Maurice Herrera | 8/23/2023 | 1,720 | 1,720 | 1,720 | — | 5,160 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (3) Represents the value derived by multiplying the number of shares of Common Stock covered by RSUs granted by $68.21 (the closing market price of Adtalem’s Common Stock on June 30, 2024). |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| 60 2024 Proxy Statement | Adtalem Global Education Inc. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (4) The table below details the vesting schedule for PSUs. In general, PSUs vest following the completion of the applicable three-year performance period. |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | Vesting | Number of | | Name | Grant Date | Date | PSUs Vesting | | Stephen W. Beard | 2/15/2023 | 8/24/2025 | 84,320 | | Stephen W. Beard | 8/23/2023 | 8/23/2025 | 81,430 | | Stephen W. Beard | 11/8/2023 | 8/23/2026 | 75,920 | | Robert J. Phelan | 11/10/2021 | 8/25/2024 | 2,800 | | Robert J. Phelan | 2/15/2023 | 8/24/2025 | 13,500 | | Robert J. Phelan | 8/23/2023 | 8/23/2025 | 11,620 | | Robert J. Phelan | 11/8/2023 | 8/23/2026 | 10,080 | | Douglas G. Beck | 11/10/2021 | 8/25/2024 | 8,860 | | Douglas G. Beck | 2/15/2023 | 8/24/2025 | 7,240 | | Douglas G. Beck | 8/23/2023 | 8/23/2025 | 5,300 | | Douglas G. Beck | 11/8/2023 | 8/23/2026 | 6,060 | | Michael Betz | 2/15/2023 | 8/24/2025 | 7,580 | | Michael Betz | 8/23/2023 | 8/23/2025 | 6,410 | | Michael Betz | 11/8/2023 | 8/23/2026 | 7,320 | | Maurice Herrera | 2/15/2023 | 8/24/2025 | 6,120 | | Maurice Herrera | 8/23/2023 | 8/23/2025 | 5,260 | | Maurice Herrera | 11/8/2023 | 8/23/2026 | 6,020 |
2024 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (5) Represents the value derived by multiplying the number of shares of Common Stock covered by the PSUs by $68.21 (the closing market price of Adtalem’s Common Stock on June 30, 2024). The value provided assumes a PSU payout at target value. |
2024 OPTIONS EXERCISES AND STOCK VESTED
2024 OPTIONS EXERCISES AND STOCK VESTED This table provides information for the NEOs concerning stock options that were exercised and RSUs and PSUs that vested during fiscal year 2024.
2024 OPTIONS EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | | Number of | | Number of | | | | Shares Acquired | Value Realized | Shares Acquired | Value Realized | | | on Exercise | on Exercise | on Vesting | on Vesting | | Name | (#) | ($)(1) | (#) | ($)(2) | | Stephen W. Beard | — | — | 99,897 | 4,380,513 | | Robert J. Phelan | — | — | 14,552 | 792,949 | | Douglas G. Beck | — | — | 10,746 | 619,070 | | Michael Betz | — | — | 7,333 | 439,102 | | Maurice Herrera | — | — | 11,310 | 611,422 |
2024 OPTIONS EXERCISES AND STOCK VESTED
| (1) Value Realized on Exercise. If the exercise was executed as part of a cashless transaction where the shares acquired were immediately sold, this represents the difference between the sales price of the shares acquired and the option exercise price multiplied by the number of shares of Common Stock covered by the options exercised. If the exercise was executed as part of a buy and hold transaction, this represents the difference between the closing market price of the Common Stock for the date of exercise of the option and the option exercise price multiplied by the number of shares of Common Stock covered by the options held. |
2024 OPTIONS EXERCISES AND STOCK VESTED
| (2) Value Realized on Vesting. For Mr. Beard, this amount represents RSUs granted in August 2019, August 2020, August 2021, and August 2022 that vested in August 2023; RSUs granted in September 2021 that vested in September 2023; and PSUs granted in November 2020 and November 2021 that vested in August 2023. For Mr. Phelan, this amount represents RSUs granted in August 2020, August 2021, and August 2022; RSUs granted in May 2021 that vested in May 2023; RSUs granted in November 2021 that vested in November 2023; and PSUs granted in November 2020 that vested in August 2023. For Mr. Beck, this amount represents RSUs granted in June 2021 that vested in June 2021 and RSUs granted in August 2021 and August 2022 that vested in August 2023. For Mr. Betz this amount represents RSUs granted in May 2022 that vested in May 2023 and RSUs granted in August 2022 that vested in August 2023. For Mr. Herrera this amount represents RSUs granted in November 2021 that vested in November 2023 and RSUs granted in August 2022 that vested in August 2023. |
2024 OPTIONS EXERCISES AND STOCK VESTED
| Adtalem Global Education Inc. | 2024 Proxy Statement 61 |
2024 NONQUALIFIED DEFERRED COMPENSATION
2024 NONQUALIFIED DEFERRED COMPENSATION This table sets forth information about activity for NEOs in our Nonqualified Deferred Compensation Plan during fiscal year 2024.
2024 NONQUALIFIED DEFERRED COMPENSATION
| | Executive | Registrant | Aggregate | Aggregate | | | Contributions | Contributions | Earnings | Balance at | | | in Last | in Last | in Last | Last Fiscal | | | Fiscal Year | Fiscal Year | Fiscal Year | Year End | | Name | ($)(1) | ($)(2) | ($)(3) | ($)(4) | | Stephen W. Beard | 169,322 | 109,333 | 31,063 | 810,550 | | Robert J. Phelan | — | — | — | — | | Douglas G. Beck | 56,228 | 45,686 | 17,731 | 161,391 | | Michael Betz | 16,524 | — | 879 | 17,403 | | Maurice Herrera | — | — | — | — |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (1) Executive Contributions in Last Fiscal Year. The amount of executive contributions made by each NEO and reported in this column is included in each NEO’s compensation reported on the 2024 Summary Compensation Table, either in the “Salary” or “Non-Equity Incentive Plan Compensation” column. See footnotes 1 and 5 of the 2024 Summary Compensation Table for specific deferrals made by each NEO. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (2) Registrant Contributions in Last Fiscal Year. The amount of Adtalem contributions made and reported in this column is included in each NEO’s compensation reported on the 2024 Summary Compensation Table in the “All Other Compensation” column. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (3) Aggregate Earnings in Last Fiscal Year. These amounts represent the earnings in the Nonqualified Deferred Compensation Plan for fiscal year 2024. These amounts are not reported in the 2024 Summary Compensation Table. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (4) Aggregate Balance at Last Fiscal Year End. The aggregate balance as of June 30, 2024 reported in this column for each NEO reflects amounts that either are currently reported or were previously reported as compensation in the 2024 Summary Compensation Table for current or prior years, except for the aggregate earnings on deferred compensation. |
NONQUALIFIED DEFERRED COMPENSATION PLAN
NONQUALIFIED DEFERRED COMPENSATION PLAN The Nonqualified Deferred Compensation Plan covers directors and selected key employees approved for participation by the Compensation Committee. All of the NEOs are eligible to participate in the Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan as it applies to employees, participants may make an advance election to defer up to 50% of salary and up to 100% of MIP compensation until termination of service with Adtalem or certain other specified dates. Adtalem credits matching contributions to participants’ accounts under the Nonqualified Deferred Compensation Plan to the extent they have elected to defer the maximum amount under Adtalem’s Retirement Plan, and their matching contributions to the Retirement Plan are limited by applicable Code provisions. Adtalem may also credit participants’ accounts with discretionary contributions. Participants are fully vested in their own deferral and matching contributions, plus earnings, and will vest in discretionary contributions, if any, as determined by the Compensation Committee. Participants may elect to have their Nonqualified Deferred Compensation Plan accounts credited with earnings based on various investment choices made available by the Compensation Committee for this purpose. Participants may elect to have account balances paid in a lump sum or in installments. Distributions are generally made or commence in January of the year following termination of employment (but not earlier than six months after termination) or January of the year in which the specified payment date occurs. In the event of death before benefits commence, participants’ accounts will be paid to their beneficiaries in a lump sum.
2024 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
2024 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL Adtalem provides benefits to the NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, Adtalem’s equity compensation plans and the stock award agreements used to implement them provide for accelerated vesting of outstanding stock awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control.
CEO PAY RATIO
CEO PAY RATIO Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of all our employees (except our CEO) and the ratio of the annual total compensation of our CEO as disclosed in the 2024 Summary Compensation Table, to the annual total compensation of our median employee. For fiscal year 2024, we identified the median employee by comparing the annual salary rate of pay for all individuals, excluding our CEO, who were employed by Adtalem on June 25, 2024 using information from our company payroll system. We included all full-time and part-time employees, including adjunct faculty and federal work-study student workers. Compensation was annualized for all employees who were hired by us in fiscal year 2024 but did not work for us for the entire year. No annualization was applied to any adjunct faculty as permitted under the rules. Fiscal year 2024 annual total compensation for the median employee was calculated in the same manner as reflected in the 2024 Summary Compensation Table for our CEO. Based on the methodology described above, we have determined that fiscal year 2024 annual total compensation of our median employee was $51,610 The annual total compensation of our CEO for fiscal year 2024 was $14,302,851. The ratio of our CEO’s fiscal year 2024 annual total compensation to the fiscal year 2024 annual total compensation of our median employee is 277:1. This CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The CEO pay ratio reported by other companies may not be comparable to our CEO pay ratio reported above, because SEC rules for identifying the median
CEO PAY RATIO
| 64 2024 Proxy Statement | Adtalem Global Education Inc. |
CEO PAY RATIO
employee and calculating the pay ratio allow companies to use different methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”) and to our other non-PEO NEOs and certain financial performance of the Company. CAP, as determined under SEC requirements, does not reflect the actual amount of compensation earned, realized or received by our NEOs during a covered year. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion & Analysis. The pay versus performance disclosures include information for fiscal years ended June 30, 2024, 2023, 2022, and 2021.
PAY VERSUS PERFORMANCE TABLE
| | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year | SCT Total for First PEO ($)(1) | SCT Total for Second PEO ($)(1) | CAP to First PEO ($)(2) | CAP to Second PEO ($)(2) | Average SCT Total for non-PEO NEOs ($)(1) | Average CAP to non-PEO NEOs ($)(2) | Adtalem Total Shareholder Return ($)(3) | Peer Group Total Shareholder Return ($)(3) | Net Income ($ in thousands) | Company Selected Measure: Revenue Growth (4) | | 2024 | n/a | 14,302,581 | n/a | 30,032,741 | 2,390,184 | 4,074,936 | 219 | 163 | 136,777 | 9.2% | | 2023 | n/a | 8,054,094 | n/a | 8,364,122 | 1,699,688 | 1,762,437 | 110 | 115 | 93,358 | 5.0% | | 2022 | 6,276,069 | 9,204,332 | 6,757,452 | 8,973,854 | 1,851,310 | 1,867,071 | 115 | 110 | 310,991 | 53.7% | | 2021 | 8,528,433 | n/a | 10,373,072 | n/a | 1,766,966 | 1,433,322 | 114 | 104 | 70,027 | 3.9% |
PAY VERSUS PERFORMANCE TABLE
| (1) Lisa W. Wardell is the First PEO for each of the years shown. Stephen W. Beard is the Second PEO for each of the years shown. The following non-PEO NEOs are included in the average amounts shown: |
PAY VERSUS PERFORMANCE TABLE
2024: Robert J. Phelan, Douglas G. Beck, Michael Betz, Maurice Herrera 2023: Robert J. Phelan, Douglas G. Beck, Maurice Herrera, and Steven Tom 2022: Robert J. Phelan, Douglas G. Beck, John W. Danaher, and Maurice Herrera 2021: Robert J. Phelan, Stephen W. Beard, Douglas G. Beck, Kathy Boden-Holland, and Michael O. Randolfi
PAY VERSUS PERFORMANCE TABLE
| (2) The following tables show amounts deducted from and added to the SCT total to calculate CAP. The fair value of the equity awards was determined consistent with the methodology used to determine the grant date fair value of the awards, with values changing primarily due to the change in stock price and our performance on the metrics applicable to those awards. |
PAY VERSUS PERFORMANCE TABLE
| Adtalem Global Education Inc. | 2024 Proxy Statement 65 |
PAY VERSUS PERFORMANCE TABLE
First PEO SCT Total to CAP Reconciliation:
PAY VERSUS PERFORMANCE TABLE
| Fiscal Year | SCT Total for First PEO ($) | Less: SCT Total Equity (Stock Awards + Option Awards) ($) | Plus: Fair Value as of Fiscal Year-End of Stock and Option Awards Granted in Covered Year ($) | Plus: Fair Value as of Vest Date of Stock and Option Awards Granted and Vested in Covered Year ($) | Plus: Change in Fair Value of Outstanding and Unvested Stock and Option Awards From Prior Years ($) | Plus: Change in Fair Value of Stock and Option Awards From Prior Years that Vested in the Covered Year ($) | Less: Fair Value as of Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year ($) | CAP to First PEO ($) | | 2024 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | 2023 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | 2022 | 6,276,069 | (4,999,803) | 5,167,325 | — | 190,398 | 123,463 | — | 6,757,452 | | 2021 | 8,528,433 | (5,785,373) | 6,891,998 | — | 630,983 | 107,031 | — | 10,373,072 |
PAY VERSUS PERFORMANCE TABLE
Second PEO SCT Total to CAP Reconciliation:
PAY VERSUS PERFORMANCE TABLE
| Fiscal Year | SCT Total for Second PEO ($) | Less: SCT Total Equity (Stock Awards + Option Awards) ($) | Plus: Fair Value as of Fiscal Year-End of Stock and Option Awards Granted in Covered Year ($) | Plus: Fair Value as of Vest Date of Stock and Option Awards Granted and Vested in Covered Year ($) | Plus: Change in Fair Value of Outstanding and Unvested Stock and Option Awards From Prior Years ($) | Plus: Change in Fair Value of Stock and Option Awards From Prior Years that Vested in the Covered Year ($) | Less: Fair Value as of Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year ($) | CAP to Second PEO ($) | | 2024 | 14,302,581 | (10,499,903) | 17,212,207 | — | 8,342,349 | 675,507 | — | 30,032,741 | | 2023 | 8,054,094 | (5,808,957) | 6,417,116 | — | (286,448) | (11,683) | — | 8,364,122 | | 2022 | 9,204,332 | (8,019,699) | 7,168,073 | 625,000 | 53,564 | (57,416) | — | 8,973,854 | | 2021 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
PAY VERSUS PERFORMANCE TABLE
Non-PEO NEOs Average SCT Total to Average CAP Reconciliation:
PAY VERSUS PERFORMANCE TABLE
| Fiscal Year | Average SCT Total for non-PEO NEOs ($) | Less: SCT Total Equity (Stock Awards + Option Awards) ($) | Plus: Fair Value as of Fiscal Year-End of Stock and Option Awards Granted in Covered Year ($) | Plus: Fair Value as of Vest Date of Stock and Option Awards Granted and Vested in Covered Year ($) | Plus: Change in Fair Value of Outstanding and Unvested Stock and Option Awards From Prior Years ($) | Plus: Change in Fair Value of Stock and Option Awards From Prior Years that Vested in the Covered Year ($) | Less: Fair Value as of Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year ($) | Average CAP to non-PEO NEOs ($) | | 2024 | 2,390,184 | (986,649) | 1,609,794 | — | 821,826 | 239,781 | | 4,074,936 | | 2023 | 1,699,688 | (559,281) | 617,862 | — | (36,114) | 40,282 | — | 1,762,437 | | 2022 | 1,851,310 | (1,047,505) | 1,078,377 | — | 3,532 | (18,643) | — | 1,867,071 | | 2021 | 1,766,966 | (1,034,209) | 1,159,225 | — | 58,941 | 22,460 | (540,061) | 1,433,322 |
PAY VERSUS PERFORMANCE TABLE
| (3) Adtalem Total Shareholder Return (“TSR”) and Peer Group TSR assume a respective investment of $100 on June 30, 2020 in common stock and also assumes the reinvestment of dividends. Additionally, the Peer Group is weighted by the market capitalization of each component company. The Peer Group consists of American Public Education, Inc. (APEI), Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), Laureate Education, Inc. (LAUR), Perdoceo Education Corporation (formerly known as Career Education Corporation) (PRDO), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.) (STRA). It is consistent with the Peer Group described in our Form 10-K for fiscal year 2024. |
PAY VERSUS PERFORMANCE TABLE
| (4) Adtalem acquired Walden University on August 12, 2021 (during fiscal year 2022) and the timing of the acquisition is impacting Adtalem’s revenue growth percentages in fiscal year 2022 and 2023. |
RELATIONSHIP BETWEEN “COMPENSATION ACTUALLY PAID” AND COMPANY PERFORMANCE
RELATIONSHIP BETWEEN “COMPENSATION ACTUALLY PAID” AND COMPANY PERFORMANCE Below are graphs showing the relationship between CAP to our First PEO, Second PEO, and the average of the CAP to our non-PEO NEOs in 2021, 2022, 2023, and 2024 and (1) Adtalem TSR, (2) our Net Income, and (3) our Revenue Growth. In addition, the first graph below compares our TSR and peer group TSR for the indicated years.
RELATIONSHIP BETWEEN “COMPENSATION ACTUALLY PAID” AND COMPANY PERFORMANCE
| Adtalem Global Education Inc. | 2024 Proxy Statement 67 |
RELATIONSHIP BETWEEN “COMPENSATION ACTUALLY PAID” AND COMPANY PERFORMANCE
The foregoing disclosures related to Pay Versus Performance shall not be deemed incorporated by reference by any general statement incorporating this Proxy Statement by reference into any other Adtalem filing under the Securities Act or under the Exchange Act, except to the extent that Adtalem specifically incorporates the information by reference.