DEF 14A of Science Applications International Corp
Filed Apr 24, 2024 · FY20240001571123-24-000069
Dana S. Deasy
Dana S. Deasy
Dana S. Deasy
| | Age: 64 Director since: 2023 Independent | Select Qualifications and Skills: Leadership and Industry Management Experience: The Honorable Dana Deasy has over 40 years of professional experience leading the delivery of large-scale IT strategies and solutions both in the public and private sectors. Most recently, he served as Chief Information Officer for the U.S. Department of Defense (DoD) from May 2018 until January 2021, Global Chief Information Officer and Managing Director for J.P. Morgan Chase, an international financial services firm, from 2013 until 2017, and Global Chief Information Officer & Group Vice President for British Petroleum (BP), an international oil and gas company, from 2007 until 2013, as well as various senior leadership positions across industry. Hon. Deasy possesses extensive experience in managing the constantly evolving cyber threat environment as well as leading crisis-response teams. He has led technology for a number of large multinational corporations and most notably while at the DoD led the largest and most complex technology organization in the world. While serving in the government, he was recognized for his service by receiving the highest civilian service awards from both the DoD and the National Security Agency (NSA). Director Experience: Hon. Deasy has served on the Board of Directors of Deutsche Bank USA since March 2022, and currently serves as the Non-Executive Chairman for Intangic, a private cyber insurance company, as well as a Senior Advisor for Brighton Parks Capital, Beacon Global Strategy, Hypori and Anomali Software, a cyber security software company. Hon. Deasy's extensive experience on national security, defense, and technology matters while serving in high-ranking positions at the DoD provide valuable insight and important contributions to the Board. | | Committees: Risk Oversight | | |
Dr. Garth N. Graham
Dr. Garth N. Graham
Dr. Garth N. Graham
| | Age: 49 Director since: 2021 Independent | Select Qualifications and Skills: Leadership and Executive Management Experience: Since January 2021, Dr. Graham has served as the Director and Global Head of Healthcare for YouTube, LLC, an online video-sharing platform and subsidiary of Alphabet Inc. (Nasdaq: GOOGL). From 2019 until 2021, Dr. Graham served as the Chief Community Health Officer for CVS Health Corporation (NYSE: CVS), a diversified health services company, and from 2013 until 2019, he served in various roles for Aetna Inc., a health insurance company, including as the President of the Aetna Foundation and the Vice President for Community Health. In April 2021, Dr. Graham became a member of the Board of Directors for Modivcare Inc. (Nasdaq: MODV), a technology-enabled healthcare services company. Healthcare and Industry Expertise: Dr. Graham holds a medical degree from Yale School of Medicine, and a Master of Public Health from Yale School of Public Health. A cardiologist and professor of medicine, he was Deputy Assistant Secretary to the U.S. Health and Human Services Department under Presidents Barack Obama and George W. Bush, in addition he led the Office of Minority Health and the federal government’s first National Health Disparities Plan. An elected member of the National Academy of Medicine, he contributes to several boards including the Institute of Medicine Board on Population Health, the National Quality Forum, and the National Heart, Lung, and Blood Institute Advisory Council. The Board believes that Dr. Graham’s extensive healthcare expertise and leadership qualifications in various senior roles within the healthcare arena provides a unique and dynamic skill set to the Board. | | Committees: Compensation; Risk Oversight | | |
Dr. Garth N. Graham
| Science Applications International Corporation | | 2024 Proxy Statement | 10 |
Carolyn B. Handlon
Carolyn B. Handlon
Carolyn B. Handlon
| | Age: 66 Director since: 2022 Independent | Select Qualifications and Skills: Leadership and Executive Management Experience: Served in various financial leadership roles for over 35 years, including 17 years as Executive Vice President, Finance and Treasurer, with Marriott International, Inc. Prior to joining Marriott, Ms. Handlon worked for the Overseas Private Investment Corporation and for the Continental Illinois National Bank and Trust. Financial Expertise: Over 40 years of financial experience in the areas of global capital markets, global investment and real estate lending, financial strategy and risk management, global cash operations, mergers and acquisitions, and corporate finance. Director Experience: Ms. Handlon currently serves on the Board of Directors for Invesco Mortgage Capital and Apple Hospitality REIT, Inc. (Nasdaq: APLE). Ms. Handlon's extensive background in the financial and global market industry along with her senior leadership experience provide significant value to our Board. | | Committees: Audit; Nominating | | |
Yvette M. Kanouff
Yvette M. Kanouff
Yvette M. Kanouff
| | Age: 58 Director since: 2019 Independent | Select Qualifications and Skills: Leadership Experience: Currently serves as a Partner for JC2 Ventures, a Silicon Valley based venture capital firm. Prior to her current role, Ms. Kanouff served from 2014 to 2019 as the Senior Vice President and General Manager for the service provider business line of Cisco Systems, Inc., a global leader in information technology, networking and cybersecurity solutions. Prior to her role with Cisco, from 2012 to 2014, Ms. Kanouff served as Executive Vice President of Engineering and Technology for Cablevision Systems Corporation, a cable television provider and multiple system operator, and from 2010 to 2012, served as President of SeaChange International, a video management solutions provider. Director Experience: Ms. Kanouff has served on the Board of Directors for Entegris, which manufactures and supplies microcontamination control products, specialty chemicals, and advanced materials handling solutions for manufacturing processes in the semiconductor and other high-technology industries, since 2021. She has served on the board of Sprinklr, a firm that develops software for customer experience management, since 2018, and Amdocs, a software and services provider to communications and media companies, since 2020. Ms. Kanouff also serves on boards of private companies as a part of her role at JC2 Ventures. Ms. Kanouff holds a Corporate Board Certificate from Harvard Business School. The Board believes that Ms. Kanouff’s diverse background in the technology industry, with over 25 years of extensive leadership positions and experience, combined with a solid strategy and investment background, provide great insight and value to our Board. | | Committees: Audit; Risk Oversight (Chair) | | |
Yvette M. Kanouff
| | Age: 65 Director since: 2015 Independent | Select Qualifications and Skills: Leadership Experience: Previously served as President and Chief Executive Officer of the Federal National Mortgage Association, known as Fannie Mae, from June 2012 until October 2018. Appointed by the FDIC following the failure of Silicon Valley Bank. N.A, to serve as President and Chief Executive Officer of Silicon Valley Bridge Bank, N.A for a period of weeks in March 2023. Served as President of Blend Labs, Inc., a Silicon Valley enterprise software company, from April 2019 until March 2023. Executive Management and Legal Expertise: In addition to his recent executive leadership roles as President of Blend Labs and President and CEO of Fannie Mae, Mr. Mayopoulos was Chief Administrative Officer of Fannie Mae from 2010 to 2012, and General Counsel and Corporate Secretary of Fannie Mae from 2009 to 2012. Prior to joining Fannie Mae, he was Executive Vice President and General Counsel of Bank of America Corporation. Financial Expertise: Mr. Mayopoulos has held executive leadership roles in financial institutions that have required significant financial expertise and capital markets knowledge. He also serves on the Credit Risk and Finance Committee, previously served on the Audit Committee and Chairs the Operational Risk Committee of the Board of Directors of Lending Club Corporation, a fintech marketplace bank. Director Expertise: In addition to Mr. Mayopoulos' service as a member of the Board of Directors for Lending Club Corporation, he also serves on the Board of Directors for Blend Labs, Inc., a digital lending platform, and the Board of Directors for Valon Technologies, Inc., a digital mortgage servicing company, and Bilt Technologies, a payments and credit card company. Mr. Mayopoulos has over 30 years of professional experience. His valuable contributions to our Board include his executive management experience, his experience in finance and capital markets, his legal background and his experience operating in highly regulated businesses. | | Committees: Audit; Compensation; Nominating | | |
Katharina G. McFarland
Katharina G. McFarland
Katharina G. McFarland
| | Age: 64 Director since: 2019 Independent | Select Qualifications and Skills: Leadership Experience: With over 30 years of government service, Katharina (Katrina) McFarland is widely recognized as a leading subject-matter expert on government procurement, science and technology as Chair of the Board of Army Research and Development at the National Academies of Science, IT and AI as Commissioner of the National Security Commission on Artificial Intelligence, and Procurement as a Director on the Procurement Round Table. She currently serves as the Vice Chair of the Army Science Board. She was previously the Assistant Secretary of Defense for Acquisition (2012 to 2017) and acting Assistant Secretary of the Army (Acquisition, Logistics & Technology) (2016 to 2017). She was President of the Defense Acquisition University from 2010 to 2012. From 2006 to 2010, Ms. McFarland was the Director of Acquisition, Missile Defense Agency. Director Experience: Ms. McFarland serves as an advisor or is a member of the Board of advisors to several companies including: Cypress International Senior Strategy Group, DataRobot, Anduril, Willcor, Inc. and Sehlke, Inc. Senior Advisory Board. Ms. McFarland was a Director for Engility from 2017 to January 2019. She has served on the Board of Directors for Transphorm Inc. since January 2021 and served on the Board of Directors for Virgin Orbit from November 2021 to August 2023. Ms. McFarland brings substantial experience in defense acquisition, program management, logistics and technology. In particular, her experience with the U.S. Department of Defense, Department of the Army, and Intelligence Community procurement provides valuable insight to the Board. | | Committees: Nominating (Chair); Risk Oversight | | |
Katharina G. McFarland
| Science Applications International Corporation | | 2024 Proxy Statement | 12 |
Milford W. McGuirt
Milford W. McGuirt
Milford W. McGuirt
| | Age: 67 Director since: 2021 Independent | Select Qualifications and Skills: Leadership and Executive Management Experience: Served as Managing Partner of the Atlanta office and Mid-South Area of KPMG from January 2015 until his retirement in September 2019. During a 33-year career at KPMG, Mr. McGuirt held a number of leadership positions, including as a senior partner and the National Audit Sector Leader and National Industry Leader for the firm’s higher education practice. Prior to joining KPMG, Mr. McGuirt served as an audit manager with Coopers & Lybrand. Financial Expertise: Over 41 years of financial experience in the areas of public accounting and auditing with Big 4 international and consulting firms, including 29 years as a Partner at KPMG. Director Experience: Mr. McGuirt served on the board of HD Supply as an independent director and member of the audit and nominating and corporate governance committee from July to December of 2020, and currently serves on the board of Oxford Industries, Inc. since July of 2020, and private company Chick-fil-A, Inc. since October 2021. In addition, Mr. McGuirt also previously served on KPMG’s Nominating Committee of the Board of Directors as well as the KPMG Diversity Advisory Board and KPMG Foundation. Mr. McGuirt’s decades of extensive experience in the financial industry, specifically in the accounting and auditing fields, as well as over 30 years of leadership roles, make him a great asset to the Board and his financial insight will be greatly beneficial to our company. | | Committees: Audit (Chair); Nominating | | |
Donna S. Morea
Donna S. Morea
Donna S. Morea
| | Age: 69 Director since: 2013 Independent Chair of the Board | Select Qualifications and Skills: Leadership and Executive Management Experience: Served as President of CGI Technology and Solutions, Inc. ("CGI"), a wholly-owned U.S. subsidiary of CGI Group, one of the largest independent information technology firms in North America, from May 2004 until her retirement at the end of 2011. Ms. Morea also served as a Director for CGI from February 2012 to May 2013. Ms. Morea is an Operating Executive of The Carlyle Group, where she focuses on technology and business services. Industry Knowledge and Experience: Information and Technology Expertise: Over 30 years of experience; nationally recognized executive in IT professional services management; and led CGI’s IT and business process services in the U.S., EMEA and Asia Pacific for large enterprises in financial services, healthcare, telecommunications and government. Director Experience: Ms. Morea served as a member of the Board of Directors of SunTrust Banks, Inc. from 2012 until December 2019 and Truist Financial Corp. since December 2019. She also served on the Board of KLDiscovery Inc. from April 2016 until June 2023. Ms. Morea also serves on the boards of Carlyle portfolio companies. The Board believes that Ms. Morea’s executive management experience and information technology expertise provide valuable leadership experience and market knowledge of a significant segment of our business. | | Committees: Compensation; Nominating | | |
Donna S. Morea
| | Age: 65 Director since: 2023 Independent | Select Qualifications and Skills: Leadership and Executive Management Experience: Served as Executive Vice President & Chief Financial Officer for Leidos Holdings, Inc. ("Leidos") from July 2015 until his retirement in June 2021. Prior to joining Leidos, Mr. Reagan served as Chief Financial Officer for several organizations including Vencore, Inc., a defense contractor serving the Intelligence Community and Department of Defense, and at PAE, Inc. Mr. Reagan was also the CFO of Aspect Communications until 2005 and held several senior roles at MCI Telecommunications. Industry Knowledge and Experience: Over 18 years of experience in the government services industry across a vast set of areas including cybersecurity and intelligence, information technology and healthcare, and national security. Mr. Reagan also possesses expertise in software, telecommunications, and real estate. Financial Expertise: Over 40 years of experience as a financial leader across a diverse set of industries with extensive experience in transactional mergers and acquisitions and business process optimization to drive shareholder growth. He has been a licensed CPA in the Commonwealth of Virginia since 1982. The Board believes that Mr. Reagan’s financial expertise and his deep knowledge and experience in the government services market gained through decades of serving major companies in our industry provide important contributions to the Board. | | Committees: Audit; Compensation | | |
Steven R. Shane
Steven R. Shane
Steven R. Shane
| | Age: 66 Director since: 2013 Independent | Select Qualifications and Skills: Leadership: Served as a Partner of Accenture plc ("Accenture"), a management consulting, technology and outsourcing services firm, until his retirement in 2011 after a 30-year career. Financial Expertise and Industry Experience: Consulting and Technology Systems: While at Accenture, Mr. Shane was the Managing Partner of the North America Public Service business responsible for Accenture’s U.S. federal, state and local and Canadian federal and provincial business. He also held several other senior management positions, including those where he led consulting engagements for many of the largest banking institutions in the United States. Following his retirement from Accenture in 2011, Mr. Shane joined LH&P, LLC ("LH&P"), a boutique consulting company, where he currently serves as a consultant and provides strategic, organizational and business advice to senior executives in some of the largest U.S. financial services companies. Director Experience: Mr. Shane previously served on the Board of Directors for ZPower, LLC, a battery technology company, from 2003 until his voluntary retirement in 2019. Mr. Shane has served, since 2013, as an advisor on the Maximus Federal Services Board, an outsourcing company that provides business process services to government health and human services agencies until his voluntary retirement in the fall of 2022. He also served as a Director for Dispersive Networks, LLC, a virtual network solutions provider, from 2014 until his voluntary retirement in January 2020. The Board believes that Mr. Shane’s expertise in financial matters and the implementation of significant, mission-critical technology systems for the U.S. government as well as state and local governments offer perspectives that our Board considers valuable to us as a leading provider of technical, engineering and enterprise information technology services to government customers. | | Committees: Compensation (Chair); Risk Oversight | | |
Steven R. Shane
| Science Applications International Corporation | | 2024 Proxy Statement | 14 |
Toni Townes-Whitley
Toni Townes-Whitley
Toni Townes-Whitley
| | Age: 60 Director since: 2023 Chief Executive Officer | Select Qualifications and Skills: Leadership and Executive Management Experience: Serves as our Chief Executive Officer and a Director since 2023. Previously served as President, U.S. Regulated Industries for the Microsoft Corporation, an international technology company, from July 2018 until September 2021, and as Industry Corporate Vice President from 2015 until July 2018. Prior to joining Microsoft, Ms. Townes-Whitley was the President for CGI Federal, part of CGI Group, Inc. (CGI), an international information technology and business consulting services firm, from 2011 until 2015, and Vice President, Core Agencies from 2010 until 2011. Prior to her leadership at CGI, Ms. Townes-Whitley served in various leadership roles with Unisys Corporation, a global technology solutions company, from 2002 until 2009, leading global and commercial-sector system integration and the Federal Civilian group, as well as with Arthur Andersen LLP, a former accounting firm, from 1991 until 2002. Director Experience: Since 2021, Ms. Townes-Whitley has served as a member of the Board of Directors for Nasdaq, Inc. (Nasdaq: NDAQ). From January 2019 until June 2023, she served on the Board of Directors for PNC Financial Services Group, Inc. (NYSE: PNC), and from March until June 2023 and March until May 2023 for Marathon Petroleum Corporation (NYSE: MPC) and Granicus, respectively. Ms. Townes-Whitley serves as a Director/Trustee for Thurgood Marshall College Fund, Partnership for Public Service, and the Princeton Faith & Work Initiative. She is a guest lecturer on technology ethics and entrepreneurism in the public sector at Stanford and Princeton Universities. Industry Knowledge and Experience: Over 30 years of experience in the information systems and commercial services industry, with 20 years in executive and senior management positions. Ms. Townes-Whitley has a distinguished and proven track record of driving strong enterprise financial results and fostering an inclusive culture focused on entrepreneurship and high performance. In her past role at Microsoft, she led the company’s public sector and regulated commercial industries including education, financial services, government, and healthcare, managing $16 billion of annual revenue. While with CGI Federal, she was responsible for a portfolio of more than $1 billion, leading 6,600 employees to deliver greater value to US Government civilian, defense, and intelligence sectors. She earned her bachelor's degree in Public Policy and Economics from Princeton University’s School of Public & International Affairs and has received certifications from Wharton Executive Education, New York University, and the Performance Management Institute. The Board believes that Ms. Townes-Whitley extensive market knowledge, leadership skills and management ability proven throughout her executive roles make her highly qualified to serve on our Board. In addition, our Board believes that the company’s Chief Executive Officer should serve on the Board of Directors to help communicate the Board’s priorities to management as well as bring management’s perspective on matters considered by the Board. | | Committee: Risk Oversight | | |
Toni Townes-Whitley
Director Skills and Qualifications The table below summarizes some of the key skills and expertise of our director nominees. This summary is not intended to be an exhaustive list of each of our director nominee’s skills or contributions to the Board. The absence of a mark does not mean that a particular director does not possess that qualification or skill.
Toni Townes-Whitley
| Science Applications International Corporation | | 2024 Proxy Statement | 16 |
Toni Townes-Whitley
CORPORATE GOVERNANCE Corporate Governance Guidelines Our Board recognizes the importance of strong corporate governance as a means of addressing the various needs of our stockholders, employees, customers and other stakeholders. As a result, our Board has adopted Corporate Governance Guidelines which, together with our certificate of incorporation, bylaws, committee charters and other key governance practices and policies, provide the framework for our corporate governance. Our Corporate Governance Guidelines cover a wide range of subjects, including criteria for determining the independence and qualification of our directors. These guidelines are available on our Investor Relations website at investors.saic.com by clicking on the link entitled “Corporate Governance.” The Board recognizes that observing good corporate governance practices is an ongoing responsibility. The Nominating and Corporate Governance Committee regularly reviews corporate governance developments and recommends revisions to these Corporate Governance Guidelines and other corporate governance documents as necessary to promote our and our stockholders’ best interests and to help ensure that we comply with all applicable laws, regulations and stock exchange requirements relating to corporate governance. Proxy Access Our bylaws include a “proxy access” provision for director nominations under which eligible stockholders may nominate candidates for election to our Board and inclusion in our Proxy Statement for our annual meeting of stockholders. The “proxy access” provision provides that: •an eligible stockholder, or an eligible group of up to 20 stockholders, representing at least 3% of our outstanding shares of common stock, •owning those shares continuously for at least three years, •can nominate and include in our Proxy Statement director nominees constituting up to 25% of the Board or, if that percentage is not a whole number, the closest whole number below 25%, but not less than two individuals, for election at our annual meeting of stockholders. These “proxy access” director nominees are subject to certain eligibility, procedural and disclosure requirements as further set forth in Section 3.17 of our bylaws. Code of Conduct All of our employees, including our executive officers and our directors, are required to comply with our Code of Conduct, which describes our standards for protecting company and customer assets, fostering a safe and healthy work environment, dealing fairly with customers and others, conducting international business properly, reporting misconduct and protecting employees from retaliation. Our Code of Conduct forms the foundation of our corporate policies and procedures designed to promote ethical behavior in all aspects of our business. Our Code of Conduct is available on our Investor Relations website at investors.saic.com by clicking on the link entitled “Corporate Governance.” Director Independence The Board annually determines the independence of each of our directors and nominees in accordance with our Corporate Governance Guidelines. These guidelines provide that “independent” directors are those who are independent of management and free from any relationship that, in the judgment of the Board, would interfere with their exercise of independent judgment. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization with which we have a relationship). The Board has established independence standards set forth in our Corporate Governance Guidelines that include all elements of independence required by the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”). Effective as of March 5, 2024, we voluntarily transferred our stock exchange listing to Nasdaq from the New York Stock Exchange (the "NYSE"). All members of the Audit, Human Resources and Compensation, and Nominating and Corporate Governance Committees must be independent directors as defined under our Corporate Governance Guidelines. Members of the Audit Committee must also satisfy a separate independence requirement pursuant to applicable Nasdaq listing standards and the Securities Exchange Act of 1934, as amended (the "Exchange Act”), which requires that they not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than their directors’ compensation or be an affiliated person of us or any of our subsidiaries. Each year, our directors complete a questionnaire which requires them to disclose any transactions with us in which the director or any member of his or her immediate family might have a direct or potential conflict of interest. Based on an analysis of the responses, the Board determined that all directors, except for Ms. Townes-Whitley, because of her role as our Chief Executive Officer, are independent under our Corporate Governance Guidelines and free from any relationship that would interfere with the exercise of their independent judgment. The Board considered the following relationships involving Hon. Deasy in reaching the conclusion that such relationship did not interfere with the exercise of Hon. Deasy's independent judgment in his capacity as a member of the Board: • Hon. Deasy is an advisory board member to the Director for the National Security Agency for technology improvements and has no role in acquisition issues. • Hon. Deasy previously served on our Advisory Board and as a consultant to the company, pursuant to a consulting agreement entered into in May 2021. Prior to Hon. Deasy’s appointment to the Board effective as of September 8, 2023, Hon. Deasy resigned from his position on the Advisory Board and his consulting agreement was terminated. Hon. Deasey did not receive more than $120,000 in compensation from the company during any 12-month period within the three years preceding our determination of his independence. Criteria for Board Membership To fulfill its responsibility to identify and recommend to the full Board nominees for election as directors, the Nominating and Corporate Governance Committee reviews the composition of the Board to determine the qualifications and areas of expertise needed to further enhance the composition of the Board. In evaluating potential nominees, the Nominating and Corporate Governance Committee and the Board consider each individual in the context of the Board as a whole, with the objective of recommending to stockholders a slate of individual director nominees that can best continue the success of our business and advance stockholders’ interests. In evaluating the suitability of individual nominees, the Nominating and Corporate Governance Committee and the Board consider many factors, including:
Toni Townes-Whitley
| ✓ expertise and involvement in areas relevant to our business such as defense, intelligence, science, finance, government or commercial and international business; ✓ interpersonal skills, substantial personal accomplishments and diversity as to gender, age, race, ethnic background and experience; ✓ commitment to business ethics, professional reputation, independence and understanding of the responsibilities of a director and the governance processes of a public company; ✓ demonstrated leadership, with the ability to exercise sound judgment informed by diversity of experience and perspectives; and ✓ benefits from the continuing service of qualified incumbent directors in promoting stability and continuity, contributing to the Board’s ability to work together as a collective body and giving the company the benefit of experience and insight that its directors have accumulated during their tenure. |
Toni Townes-Whitley
The Nominating and Corporate Governance Committee reviews the director selection process annually and the Committee and the Board collectively assess its effectiveness through an annual written evaluation process. In addition, the Nominating and Corporate Governance Committee has been directed by the Board to observe the following principles contained in our Corporate Governance Guidelines:
Toni Townes-Whitley
| ✓ a majority of directors must meet the independence criteria established by the Board; ✓ based upon the range of 7 to 14 directors currently specified in our bylaws, no more than three directors may be an employee of SAIC; ✓ only a full-time employee who serves as either the Chief Executive Officer or one of his or her direct reports will be considered as a candidate for an employee director position; and ✓ no director nominee may be a consultant to the company. |
Toni Townes-Whitley
The Board expects a high level of commitment from its members and will review a candidate’s other commitments and service on other boards to ensure that the candidate has sufficient time to devote to the company. In addition, non-employee directors
Toni Townes-Whitley
| Science Applications International Corporation | | 2024 Proxy Statement | 18 |
Toni Townes-Whitley
may not serve on the board of directors of more than four other publicly-traded companies. Moreover, directors are expected to act ethically at all times and adhere to our Code of Conduct. Board Leadership Structure The Board is currently led by a non-executive Chair, Ms. Morea, who is an independent director. Our Board believes that it is in the best interests of stockholders for the Board to have the flexibility to determine the most qualified and appropriate individual to serve as Chair of the Board, whether that person is an independent director or the Chief Executive Officer. The Board selects the Chair annually and may decide to separate or combine the roles of Chair of the Board and Chief Executive Officer, if appropriate, at any time in the future. In cases where the Board determines it is in the best interests of our stockholders to combine the positions of Chair and Chief Executive Officer, the independent directors will, upon nomination and recommendation by the Nominating and Corporate Governance Committee, elect a lead independent director with the responsibilities described in our Corporate Governance Guidelines. The functions of the non-executive Chair of the Board include:
Toni Townes-Whitley
| •planning the Board’s annual schedule of meetings and agendas, in consultation with the Chief Executive Officer and Corporate Secretary and other directors as appropriate; •coordinating with the Chief Executive Officer and the Corporate Secretary to ensure that the Board receives the appropriate quantity and quality of information in a timely manner to enable it to make informed decisions; •chairing all meetings of the Board and of the independent directors in executive session and ensure that meetings are conducted efficiently and effectively; •facilitating full and candid Board discussions, ensuring all directors express their views on key Board matters and assist the Board in achieving a consensus; •working with committee chairs to ensure that each committee functions effectively and keeps the Board apprised of actions taken; •building consensus, developing teamwork and a cohesive Board culture and facilitating formal and informal communication with and among directors; and •serving as the liaison between the Board and company management. |
Toni Townes-Whitley
The Board’s Role in Risk Oversight As part of its oversight function, the Board and its committees monitor risk as part of their regular deliberations throughout the year. When granting authority to management, approving strategies, making decisions and receiving management reports, the Board considers, among other things, the risks facing the company. The Board also oversees risk in particular areas through its committee structure. The Board has the following principal standing committees: Audit, Risk Oversight, Human Resources and Compensation, and Nominating and Corporate Governance. The charters of these committees are available in print to any stockholder who requests them and are also available on our Investor Relations website at investors.saic.com by clicking on the link entitled “Corporate Governance.”
Toni Townes-Whitley
| | | Board of Directors | | | | Audit Committee | Risk Oversight Committee | | Human Resources and Compensation Committee | Nominating and Corporate Governance Committee | | The Audit Committee evaluates the company’s guidelines and policies regarding risk assessment and risk management, including risks related to internal control over financial reporting, the company’s major financial risk exposures and the steps management has taken to monitor and control those exposures. | The Risk Oversight Committee reviews and provides oversight of the company's regulatory, enterprise and strategic risk; ethics, compliance, and corporate responsibilities; and its classified and business operations. | | The Human Resources and Compensation Committee assesses risks potentially arising from the company’s human resources and compensation policies and practices. | The Nominating and Corporate Governance Committee identifies and recommends individuals for selection to the Board, develops and recommends corporate governance guidelines to the Board, makes recommendations regarding the size, composition and charters of the Board and oversees the evaluation of the Board and Board committees. |
Toni Townes-Whitley
The company also utilizes an internal Enterprise Risk Management Committee comprised of senior management that, among other things, works with the Chief Executive Officer, the committees of the Board and the full Board to establish the overall corporate risk strategy and oversight of policies, systems, processes and training relating to risk matters within the company. This committee reports quarterly to the Audit and Risk Oversight Committees and annually to the full Board on its activities and findings, highlighting the key risks we face and management’s actions for managing those risks. Corporate Responsibility Our corporate responsibility efforts begin with strong governance that ensures ethical behavior and acting with integrity and accountability, which are non-negotiables in our company. We work to position SAIC as the industry leader in these efforts to better our business, our customers’ endeavors and employees’ lives and the communities in which we live and operate. ESG Governance To execute effectively on our corporate responsibility and sustainability priorities, we have an established approach to ESG governance where the Nominating and Corporate Governance Committee of SAIC’s Board of Directors has oversight of the company’s ESG strategy. To facilitate the strategy, SAIC established the ESG Council to delineate clear governance around the company’s related efforts. Consisting of leaders from across the enterprise, the ESG Council serves as an advisory body to our Executive Leadership Team and the ESG team on matters related to corporate responsibility, ESG and sustainability. Through a formal stakeholder assessment, our material areas of impact are Ethics and Compliance; Cybersecurity, Data Security and Privacy; Corporate Culture; Employee Well-being and Talent Management; Corporate Governance; and Diversity, Equity and Inclusion. For more information, please see the ESG Governance section in our 2023 Corporate Responsibility Report. Business Value from Diversity, Equity and Inclusion At SAIC, we believe diverse and inclusive companies are more likely to be innovative and deliver stronger business results. We also believe that every human being deserves to be treated equitably. Our diversity starts with our Board, which consists of 11 members, 10 of whom are independent. Donna Morea, a non-executive director who is a woman, chairs the Board. As a leader in board diversity, members voluntarily disclose that 45.5% identify as women and 54.5% identify as men. Additionally, four Board members self-identify as from underrepresented races or ethnicities with three identifying as African American or Black, one as Hispanic or Latinx, one as two or more races or ethnicities; eight Board members identify as white.
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Toni Townes-Whitley
The following table summarizes certain self-identified characteristics of our directors, utilizing the categories and terms set forth in applicable Nasdaq rules and related guidance: Please note: Table reflects each category for which individuals self-identified; directors may self-identify in multiple categories. To ensure our leadership reflects the diversity of the workforce, we established goals in fiscal 2022 to achieve parity in the representation of women and people of color between our leader and non-leadership roles by the end of fiscal 2026. We achieved our parity goal for women in leadership in fiscal 2023 and, in fiscal 2024, we sustained that parity at 28%. In fiscal 2024, we made steady progress improving parity for POC in leadership by 2% to 25%. As we invest in developing diverse leaders from our workforce, we offer programs that include our AcceleratHER Women’s Leadership Academy, Leadership 365 and Developing Frontline Leaders programs. Across our leadership development courses that prepare entry and mid-level managers for higher-level roles, nearly two-thirds of participants were women or people of color in fiscal 2024. To strengthen our diversity, equity and inclusion in our hiring efforts, we endorse a diverse slate of candidates for leadership roles, and ensure all our job descriptions, recruiting tools and processes help eliminate the potential for bias. For the first time, we publicly reported on our gender pay equity as a gender pay gap. As of October 1, 2023, based on our population of full-time, non-executive employees, we found the pay gap was less than 1% and that the rounded salary ratio was on par at 99% for the compensation of women relative to men. To cultivate inclusion, SAIC has seven active Employee Resource Groups (ERG). We know that, especially in a large company, when employees feel they are included, belong and are connected to other employees, they are better able to bring their authentic selves to work. We encourage our employees to actively participate in these employee resource groups, and as a result in fiscal 2024, our ERGs experienced a 14% year-over-year increase in engagement, which ultimately strengthens employee retention. Third parties acknowledge achievements in the areas of diversity and creating inclusive workforce: The company was once again on Forbes 2023 list of 500 Best Employers for Diversity; LATINA Style’s Top 50 Best Companies for Latinas; Newsweek America’s Greatest Workplaces for Diversity; and DiversityInc’s (now Fair360) 2023 Top Companies for Veterans. Giving Back to Our Workforce and Communities To be a strong corporate citizen, we believe it is important to build on our tradition of community engagement and philanthropy. Core to this effort is the SAIC Foundation, a public 501(c)(3) organization to address unforeseen financial impacts on employees and their families, providing emergency funds when financial hardships or natural disasters arise. We invest in longer-term philanthropic support, targeting programs that address our three pillars of focus: military heroes, community wellness and STEM. Over the years these efforts include building 16 homes for military heroes, providing close to 25 million meals to people in need and supporting hundreds of unique STEM engagements to youth organizations nationwide. For fiscal 2024, our employees volunteered more than 29,000 hours in support of the communities where we live and work. Being Good Stewards of the Environment Our goal is to be a good steward of the environment by reducing and mitigating any adverse impacts on the environment. We are exposed to limited environmental risks due to the nature of our business yet continue to be focused on the reduction of greenhouse gas emissions, energy conservation and responsible disposal of and reduction of non-hazardous waste. As importantly, we regularly look for additional opportunities for environmental stewardship while balancing them with our business priorities. We implement ISO 14001 environmental management standards, promote initiatives to reduce our direct environmental impacts and track and report key performance metrics. For additional details, see our ISO 14001 Standards Fact Sheet. We report our environmental performance through our annual Corporate Responsibility Report, the Global Reporting Initiative Standards 2021, the Task Force on Climate-Related Financial Disclosures and the CDP global disclosure system. Calendar year 2022 is our most recently disclosed environmental data; see the aforementioned materials for details. (For more information, please see the Environmental section in our 2023 Corporate Responsibility Report.) Board of Directors Meetings and Committees The Board held eight meetings of the entire Board during our fiscal year ended February 2, 2024 ("fiscal 2024"). During fiscal 2024, the independent directors met eight times for regular board meetings, and eight times for executive sessions. Ms. Morea presided as the non-executive Chair of the Board at all Board meetings held during fiscal 2024 and at all executive sessions of our independent directors as provided by our Corporate Governance Guidelines. During fiscal 2024, the directors attended at least 90% of the Board and committee meetings. All directors are expected to attend our 2024 annual meeting of stockholders and all of the directors who were both serving at the time of and standing for re-election at last year’s annual meeting of stockholders attended such meeting.
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| | AUDIT COMMITTEE The specific responsibilities of the Audit Committee are further set forth in its charter and include: | | | Members(1)(2)(3)(4) | Roles and Responsibilities | Meetings held in Fiscal 2024 | | •Milford W. McGuirt (Chair)(5) •Carolyn B. Handlon •Yvette M. Kanouff •Timothy J. Mayopoulos •James C. Reagan | • Internal Controls and Disclosure Controls—Review and provide feedback on management’s assessment of, and the report on, the effectiveness of the company’s internal control over financial reporting, and the independent, registered public accounting firm’s related report. • Independent Audit—Appoint, retain, oversee, evaluate, and if necessary, replace the company's independent registered public accounting firm, including the lead audit partner, for the purpose of preparing or issuing an audit report on our annual consolidated financial statements and performing other audit, review or attest services; pre-approve all audit and non-audit services and related fees; and evaluate the independent registered public accounting firm’s qualifications, performance and independence, in light of among other things, non-audit services and fees. • Internal Audit—Review the qualifications, structure and performance of the internal audit function; review and approve the company’s internal audit plan; and periodically review findings from completed audits, status of major audits in process, and any significant difficulties, disagreements with management or restrictions encountered in the scope of the company's internal audit department’s work. • Financial Reporting—Review and discuss with management, the independent registered public accounting firm and the internal auditor the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; and discuss with the independent registered public accounting firm the auditor’s judgments and recommendations about the accounting principles used to prepare our consolidated financial statements. • Ethical and Legal Compliance—Review the effectiveness of our system for monitoring compliance with laws and regulations; establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (including procedures for receiving and handling complaints on a confidential and anonymous basis); and evaluate and handle any complaints submitted to or reported to the Audit Committee. • Other Responsibilities—Discuss and evaluate our guidelines and policies regarding risk assessment and risk management; discuss our major financial risk exposures and the steps management has taken to monitor and control those exposures; and review our litigation, government investigation and legal compliance matters that could have a significant impact on our financial statements. | 4 |
Toni Townes-Whitley
(1) The Board has determined that each member of the Audit Committee is independent for purposes of our Corporate Governance Guidelines, as well as for purposes of the requirements of the Exchange Act and the applicable Nasdaq listing standards. (2) The Board has determined that each member of the Audit Committee qualifies as an Audit Committee “financial expert” as defined by the rules under the Exchange Act. The backgrounds and experience of the Audit Committee financial experts are set forth above in “Proposal 1—Election of Directors.” (3) Robert A. Bedingfield served on the Audit Committee as Chair for fiscal 2024 until June 7, 2023. He did not stand for re-election at the 2023 annual meeting of stockholders. (4) Mr. Shane served as a member of the Audit Committee for fiscal 2024 until June 7, 2023. (5) Mr. McGuirt served as a member of the Audit Committee for fiscal 2024 and was appointed Chair of the Audit Committee effective June 7, 2023.
Toni Townes-Whitley
| | RISK OVERSIGHT COMMITTEE The responsibilities of the Risk Oversight Committee are further set forth in its charter and include: | | | Members(1)(2) | Roles and Responsibilities | Meetings held in Fiscal 2024 | | •Yvette M. Kanouff (Chair) •Dana S. Deasy(3) •Garth N. Graham •Katharina G. McFarland •Steven R. Shane(4) •Toni Townes-Whitley(5) | • Monitoring and Overseeing Regulatory, Enterprise and Strategic Risk Areas, including reviewing the following—operational, compliance and reputation risk management activities; and enterprise legal and strategic risk management activities, material regulatory matters, technology oversight and cyber risk. • Monitoring and Overseeing Policies and Practices Relating to Ethics, Compliance, and Corporate Responsibility, including reviewing the following—our Code of Conduct; third-party risk; safety; environmental, sustainability and governance matters; contributions to charitable and other tax-exempt organizations; and political contributions and government relations. • Overseeing Case Management and Personal Conflict of Interest Review Process for Executive Officers and Independent Directors, including—the receipt, retention and treatment of complaints involving alleged misconduct, unethical behavior, violation of the company’s policies or potential conflict of interest involving an executive officer or any other person or matter of concern presented to the Committee by the Board. • Overseeing the Company's Classified Business, including—the general oversight of the company's classified business activities and making recommendations to the Board and management concerning the review of the strategic, operational and financial aspects of the company’s classified business; and the review of policies, processes, procedures, training, risk assessment and management activities applicable to the company’s classified business activities to the extent that they deviate from those applicable to the company’s non-classified business activities. | 4 |
Toni Townes-Whitley
(1) John J. Hamre served on the Risk Oversight Committee for fiscal 2024 until June 7, 2023. He did not stand for re-election at the 2023 annual meeting of stockholders. (2) Nazzic S. Keene served as a member of the Risk Oversight Committee for fiscal 2024 until October 2, 2023. (3) Hon. Deasy was appointed to the Risk Oversight Committee effective December 6, 2023. (4) Mr. Shane was appointed to the Risk Oversight Committee effective December 6, 2023. (5) Ms. Townes-Whitley was appointed to the Risk Oversight Committee effective December 6, 2023.
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| Science Applications International Corporation | | 2024 Proxy Statement | 24 |
Toni Townes-Whitley
| | HUMAN RESOURCES AND COMPENSATION COMMITTEE The responsibilities of the Human Resources and Compensation Committee are further set forth in its charter and include: | | | Members(1)(2) | Roles and Responsibilities | Meetings held in Fiscal 2024 | | •Steven R. Shane (Chair) •Garth N. Graham •Timothy J. Mayopoulos •Donna S. Morea •James C. Reagan | • Determining the compensation of our Chief Executive Officer and reviewing and approving the compensation of our other executive officers; • Reviewing and evaluating, with the Chief Executive Officer, the long-range plans for management succession; • Exercising all rights, authority and functions reserved to such committee under all of our equity, retirement and other compensation plans; • Approving and making recommendations to the Board regarding non-employee director compensation; • Preparing an annual report on executive compensation for inclusion in our proxy statement or Annual Report on Form 10-K in accordance with the rules and regulations of the SEC; and • Periodically reviewing our human resources strategy, policies and programs. | 6 |
Toni Townes-Whitley
(1) The Board has determined that each member of the Human Resources and Compensation Committee is independent for purposes of our Corporate Governance Guidelines as well as for purposes of the applicable Nasdaq listing standards. (2) Carol A. Goode served on the Human Resources and Compensation Committee for fiscal 2024 until June 7, 2023. She did not stand for re-election at the 2023 annual meeting of stockholders. The Committee’s processes and procedures for the consideration and determination of executive compensation are discussed in further detail under “Compensation Discussion and Analysis” below. Role of Independent Compensation Consultant The Human Resources and Compensation Committee has retained Frederic W. Cook & Co., Inc. ("FW Cook") as its independent compensation consultant to assist the Committee in evaluating executive compensation programs and in setting executive officer compensation. The consultant only serves the Human Resources and Compensation Committee in an advisory role and does not decide or approve any compensation actions. The consultant reports directly to the Human Resources and Compensation Committee and does not perform any services for management. The consultant’s duties include the following: • reviewing our total compensation philosophy, peer group and target competitive positioning for reasonableness and appropriateness; • reviewing our overall executive compensation program and advising the Committee on evolving trends and best practices; • providing independent analyses and recommendations to the Committee on directors' and executive officers’ compensation and new compensation and benefits programs that management submits to the Committee for approval; and • reviewing the Compensation Discussion and Analysis section of our Proxy Statement. The consultant interacts directly with members of management only on matters under the Human Resources and Compensation Committee’s oversight and with the knowledge and permission of the Committee. The Human Resources and Compensation Committee has assessed the independence of FW Cook pursuant to SEC and Nasdaq rules and concluded that the firm’s work for the Committee does not raise any conflict of interest. Compensation Committee Interlocks and Insider Participation None of the members of our Human Resources and Compensation Committee have, at any time, been an officer or employee of ours. None of our executive officers currently serve, or in the past fiscal year have served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Human Resources and Compensation Committee.
Toni Townes-Whitley
| | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE The responsibilities of the Nominating and Corporate Governance Committee are further set forth in its charter and include: | | | Members(1)(2)(3)(4) | Roles and Responsibilities | Meetings held in Fiscal 2024 | | •Katharina G. McFarland (Chair)(5) •Carolyn B. Handlon •Timothy J. Mayopoulos(6) •Milford W. McGuirt •Donna S. Morea | • Evaluating, identifying and recommending director nominees, including nominees proposed by stockholders; • Reviewing and making recommendations regarding the composition and procedures of the Board; • Making recommendations regarding the size, composition and charters of the Board’s committees; • Developing and recommending to the Board a set of corporate governance principles, including recommending an independent director to serve as non-executive Chair of the Board or as Lead Director (as applicable); Overseeing the company's environmental, social and governance requirements, programs, goals and risks; and • Developing and overseeing an annual self-evaluation process of the Board and its committees. | 3 |
Toni Townes-Whitley
(1) The Board has determined that each member of the Nominating and Corporate Governance Committee is independent for purposes of our Corporate Governance Guidelines as well as for purposes of the applicable Nasdaq listing standards. (2) Dr. Hamre served as the Nominating and Corporate Governance Committee Chair for fiscal 2024 until June 7, 2023. He did not stand for re-election at the 2023 annual meeting of stockholders. (3) Mr. Bedingfield served on the Nominating and Corporate Governance Committee for fiscal 2024 until June 7, 2023. He did not stand for re-election at the 2023 annual meeting of stockholders. (4) Ms. Goode served on the Nominating and Corporate Governance Committee for fiscal 2024 until June 7, 2023. She did not stand for re-election at the 2023 annual meeting of stockholders. (5) Ms. McFarland served as a member of the Nominating and Corporate Governance Committee for fiscal 2024 and was appointed Chair of the Nominating and Corporate Governance Committee effective June 7, 2023. (6) Mr. Mayopoulos was appointed to the Nominating and Corporate Governance Committee effective June 7, 2023. Director Nominations Process The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for directors. The Committee regularly assesses the Board’s current and projected strengths and needs by, among other things, reviewing the Board’s current profile, the criteria for Board membership described on page 18 of this Proxy Statement and our current and future needs. To the extent that vacancies on the Board are anticipated or otherwise arise, the Nominating and Corporate Governance Committee prepares a target candidate profile and develops an initial list of director candidates identified by the current members of the Board, business contacts, community leaders and members of management. The Committee may also retain a professional search firm to assist it in developing a list of qualified candidates. The Nominating and Corporate Governance Committee also considers any stockholder recommendations for director nominees that are properly received.
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| Science Applications International Corporation | | 2024 Proxy Statement | 26 |
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The Committee then screens and evaluates the resulting slate of director candidates to identify those individuals who best fit the target candidate profile and Board membership criteria and provides the Board with its recommendations. The Board then considers the recommendations and votes on whether to nominate the director candidate for election by the stockholders at the annual meeting or to appoint the director candidate to fill a vacancy on the Board. Stockholder Nominations Any stockholder may nominate a person for election as a director by complying with the procedures set forth in our bylaws. Under Section 3.03 of our bylaws, in order for a stockholder to nominate a person for election as a director, the stockholder must give timely notice to our Corporate Secretary prior to the meeting at which directors are to be elected. To be timely, notice must be delivered to the Corporate Secretary not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. If the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, however, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to that annual meeting and not later than the close of business on the 90th day prior to that annual meeting or the 10th day following the day on which we first publicly announce the date of that annual meeting, whichever occurs later. The stockholder’s notice must include certain information as further provided in Section 3.03 of our bylaws about the nominee, the stockholder and the underlying beneficial owner, if any, including his or her respective name, age, address, occupation, shares, rights to acquire shares, information about derivatives, hedges, short positions, understandings or agreements regarding the economic and voting interests of the nominee, the stockholder and related persons with respect to our stock, if any, and any other information as would be required to be disclosed in a Proxy Statement soliciting proxies for the election of the proposed nominee. In addition, the notice must contain certain information about the stockholder proposing to nominate that person. We may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of the proposed nominee to serve as a director. A stockholder’s notice must be updated, if necessary, so that the information submitted is true and correct as of the record date for determining stockholders entitled to receive notice of the meeting. In addition to the requirements set forth above, stockholders who intend to solicit proxies in support of director nominees other than the company’s nominees must comply with the additional requirements of Rule 14a-19(b) under the Exchange Act. Mandatory Retirement Policy The Board has adopted a mandatory retirement age of 75 for independent directors and 65 for employee directors. It is the general policy of the Nominating and Corporate Governance Committee not to nominate candidates for re-election at any annual stockholder meeting to be held after he or she has attained the applicable retirement age. Board of Directors Compensation Our director compensation program is designed to attract and fairly compensate non-employee board members for the work required to oversee a company of SAIC's size, industry, and complexity and to align their interests with the long-term interests of our stockholders. The Human Resources and Compensation Committee periodically reviews the director compensation program with the assistance of FW Cook, our independent compensation consultant and recommends to the Board the form and amount of compensation to be provided. The director compensation described below represents the total compensation received by our non-employee directors for their service. Our director compensation program consists primarily of a cash component and an equity component with compensation levels informed by peer comparator group data and in recognition of the significant amount of time required of our directors in fulfilling their duties, as well as the skill and expertise of our directors. Cash Compensation Our directors receive a cash retainer for their service on the Board. For fiscal 2024, the annual retainer was $120,000 and the annual retainer for the Chair of each committee of the Board was an additional $15,000, except for the Chair of the Audit and Human Resources and Compensation Committees where the annual retainer was an additional $20,000. The annual retainer for the Independent Chair of the Board was an additional $175,000. These retainers are paid quarterly in advance. In addition to the cash retainers, non-employee directors also receive $2,000 for each meeting of the Board and each committee of the Board that they attend beginning with the second meeting above the standard number of meetings over the course of a given year. We also reimburse our directors for expenses incurred while attending meetings or otherwise performing services as a director. Based on the Human Resources and Compensation Committee review of the director compensation program with our independent compensation consultant, the Board approved an increase to the annual retainers for non-employee directors from $120,000 to $125,000 effective January 1, 2024. The Board also approved an increase to the annual retainer for the Independent Chair of the Board from $175,000 to $200,000 and an increase to the Risk Oversight Committee Chair from $15,000 to $20,000, each effective as of January 1, 2024. No other cash compensation changes were proposed for 2024. Equity Compensation Directors are eligible to receive equity awards under our equity incentive plan. For fiscal 2024, each director, other than Hon. Deasy, was granted equity awards consisting of $165,000 in value of restricted stock units ("RSUs"). In connection with his appointment to the Board, Hon. Deasy was granted a prorated equity award of $123,750 in value of RSUs. In addition to his appointment to the Board, Mr. Reagan received his prorated award in connect with his appointment to the Board in January 2023. These equity awards vest on the earlier of one year from the date of grant or on the date of the next annual meeting of stockholders following the date of grant. If a director retires due to our mandatory retirement policy, the director’s equity awards continue to vest as scheduled. Based on the Human Resources and Compensation Committee review of the director compensation program with our independent compensation consultant, the Board approved increasing the value of RSUs granted to each director from $165,000 to $170,000 effective January 1, 2024, which will take effect for the fiscal 2025 awards. Deferral Plans Directors are eligible to defer all or any portion of their cash retainers and fees into our Deferred Compensation Plan. This plan is described in further detail in the “Executive Compensation — Nonqualified Deferred Compensation” section of this Proxy Statement. Director Compensation Table The following table sets forth information regarding the compensation earned or paid to our directors for their service in fiscal 2024.
Toni Townes-Whitley
| Name(1) | Fees earned or paid in cash ($)(2) | Stock awards ($) (3) | Total ($) | | Dana S. Deasy(4) | 70,917 | 123,750 | 194,667 | | Garth N. Graham | 125,250 | 165,000 | 290,250 | | Carolyn B. Handlon | 125,250 | 165,000 | 290,250 | | Yvette M. Kanouff | 141,500 | 165,000 | 306,500 | | Timothy J. Mayopoulos | 138,250 | 165,000 | 303,250 | | Katharina G. McFarland | 146,500 | 165,000 | 311,500 | | Milford W. McGuirt | 140,250 | 165,000 | 305,250 | | Donna S. Morea | 330,500 | 165,000 | 495,500 | | James C. Reagan(5) | 135,250 | 233,750 | 369,000 | | Steven R. Shane | 153,250 | 165,000 | 318,250 |
Toni Townes-Whitley
(1) Ms. Townes-Whitley, our Chief Executive Officer, is not included in this table because she received no additional compensation for her service as a director. (2) Amounts in this column represent the aggregate dollar amount of all fees earned or paid in cash for services as a director, including annual retainer fees, committee and chair fees and meeting fees. Directors are eligible to defer all or any portion of their cash retainers and fees into our Deferred Compensation Plan. (3) Amounts in this column reflect the grant date fair value computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). For fiscal 2024, each director received 1,600 RSUs, other than Hon. Deasy, who received 960 RSUs, and Mr. Reagan, who received 2,266. For more information regarding our application of FASB ASC Topic 718, including the assumptions used in the calculations of these amounts, please refer to Note 8 of Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal 2024 filed with the SEC on March 20, 2024. (4) Hon. Deasy's award was prorated to reflect the portion of the year that he served on the Board since his appointment on September 6, 2023. (5) Mr. Reagan's award includes an additional $68,750 prorated amount to reflect the period between his appointment to the Board on January 9, 2023 and June 7, 2023, the grant date.
Toni Townes-Whitley
(1) The Board discontinued stock option grants for non-employee directors effective as of January 1, 2020; therefore, Dr. Graham, Ms. Handlon, Hon. Deasy and Messrs. McGuirt and Reagan do not hold any outstanding options. (2) Mr. Mayopoulos exercised remaining options as of March 30, 2022. (3) Ms. McFarland exercised remaining options as April 12, 2023. Stock Ownership Guidelines and Policies The Board believes that directors should acquire and hold shares of our stock in an amount that is meaningful and appropriate. To encourage directors to have a material investment in our stock, the Board has adopted stock ownership guidelines that call for directors to hold shares of our stock with a value of at least five times the amount of each director's annual cash retainer. Board members are required to hold all shares of stock acquired under our equity programs until this target value is achieved. The sum of all shares owned outright, shares held in a trust for the benefit of the director or his/her immediate family members, and one-half (50%) of unvested time-based RSUs count toward the required ownership. No other equity holdings count toward meeting the ownership requirement including any unvested, unexercised stock options. In addition to these ownership guidelines, our directors are also subject to policies that prohibit certain short-term or speculative transactions in our securities that we believe carry a greater risk of liability for insider trading violations or may create an appearance of impropriety. Our guidelines require directors to obtain pre-clearance from our General Counsel for all transactions in our securities. During fiscal 2024, all members of the Board were in compliance with these stock policies and have either met or are making adequate progress toward the stock ownership guidelines. Related Party Transactions The Board has adopted written policies and procedures for the review and approval of transactions between us and certain “related parties,” which are generally considered to be our directors and executive officers, nominees for director, holders of five percent or more of our outstanding capital stock and members of their immediate families. The Board has delegated to the Risk Oversight Committee the authority to review and approve the material terms of any proposed related party transaction. If a proposed related party transaction involves a non-employee director or nominee for election as a director and may be material to a consideration of that person’s independence, the matter is also considered by the Chair of the Board and the Chair of the Nominating and Corporate Governance Committee. In determining whether to approve or ratify a related party transaction, the Risk Oversight Committee considers, among other factors it deems appropriate, the following factors: • potential benefits to us; • the impact on a director’s or nominee’s independence or an executive officer’s relationship with or service to us; and • whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. In deciding to approve a transaction, the Risk Oversight Committee may, in its sole discretion, impose any conditions it deems appropriate on us or the related party. Any transactions involving the compensation of executive officers, however, are to be reviewed and approved by the Human Resources and Compensation Committee. If a related party transaction will be ongoing, the Risk Oversight Committee may establish guidelines to be followed in our ongoing dealings with the related party. Thereafter, the Risk Oversight Committee will review and assess ongoing relationships with the related party on at least an annual basis to determine whether they are in compliance with the Committee’s guidelines and that the related party transaction remains appropriate. We engage in transactions and have relationships with many entities, including educational and professional organizations, in the ordinary course of our business. Some of our directors, executive officers or their immediate family members may be directors, officers, partners, employees or stockholders of these entities. We carry out transactions with these firms on customary terms. There were no transactions during fiscal 2024 in which any related party had a direct or indirect material interest. Communication with the Board of Directors Any interested party may communicate with the Chair of the Board and the Chairs of our Audit, Human Resources and Compensation, Risk Oversight, and Nominating and Corporate Governance Committees on Board and committee related issues by sending an e-mail to the following (as applicable): • boardchair@saic.com; • auditchair@saic.com; • compensationchair@saic.com; • riskoversightchair@saic.com; or • nomgovchair@saic.com. You may also write to them or to any other director, the independent directors as a group or the Board generally at the following address: SAIC Attention: Corporate Secretary 12010 Sunset Hills Road Reston, Virginia 20190 Relevant communications will be forwarded to the recipients noted in the communication. Communications sent to the Board or the independent directors as a group will be forwarded to the Chair of the Board.
Toni Townes-Whitley
(1) Non-GAAP financial measure; see the Appendix to Proxy Statement for a reconciliation of such measure against the most directly comparable GAAP financial measure. (2) Excludes the impact from sale of receivables ($45 million) under the Master Accounts Receivable Purchase Agreement. We stand committed to profitable growth and long-term value creation. Full year adjusted EBITDA increased to 9.0% of revenues, compared to 8.8% in the prior fiscal year. The increase was primarily due to improved profitability across our contract portfolio, partially offset by higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition. Full year operating cash flow was $441 million after excluding sale of receivables. Cash flow generation is key to our shareholder value proposition and allowed us to deliver $79 million in annual dividend payments and to repurchase $357 million in shares of our common stock during fiscal 2024. Total Shareholder Return ("TSR") as of February 2, 2024 TSR for fiscal 2024 was 25%, outperforming a broader market index and performing consistently with a comparable technology index fund. Over a prior three-year period, the Company's TSR outperformed the same broader market index and comparable technology index. Compensation Philosophy and Pay Mix The Company maintains a strong “pay-for-performance” compensation philosophy aimed at attracting and retaining high quality executive talent and rewarding our executive officers primarily through variable compensation. Fixed compensation (i.e., base salary) is set at appropriate levels to avoid competitive disadvantage and comprises the smallest portion of overall compensation. We believe that this philosophy serves to both encourage and recognize performance excellence and helps drive stockholder value while facilitating a sustainable fixed-cost structure. The charts below depict approximate percentages for each element of target total direct compensation and demonstrate how compensation is significantly weighted towards variable compensation (short-term cash incentives, performance stock units ("PSUs"), and restricted stock units ("RSUs")). The details of all executive officer compensation are provided in the "Executive Compensation" section of this Proxy Statement.
Toni Townes-Whitley
(1) Reflects the target compensation for Ms. Townes-Whitley. Total direct compensation for NEOs is benchmarked against median levels of compensation of comparable positions in publicly traded companies of our size and in our industry. Consistent with our pay-for-performance philosophy, actual earned compensation varies above or below the median level based on the degree to which specific performance goals are achieved, changes in our stock value over time and the individual performance of each NEO. As indicated above, base salary represents a significantly smaller portion of overall compensation than variable compensation while a more meaningful portion is allocated to annual cash incentive awards that focus executives on annual objectives supporting our long-term strategy. The largest portion of overall compensation for our executive officers is allocated to long-term incentives, supporting long-term value creation and aligning the interests of our executive officers with those of our stockholders. Program Design Overview For fiscal 2024, we maintained the short-term and long-term performance metrics used over the past several fiscal years. The short-term plan combines revenue, adjusted EBITDA, and adjusted operating cash flow performance with modifiers for organic growth and leadership performance. The PSUs, which are performance-based RSUs vesting and issued at the end of a three-year performance period, granted to our executive officers in fiscal 2024 are directly related to the achievement of adjusted EBITDA, adjusted annual operating cash flow, and relative total shareholder return ("rTSR") over a three-year period commencing in fiscal 2024. The combination of PSUs and time-based RSUs (vesting over 3 years) provide an appropriate balance of medium-term and long-term incentives. By aligning significant portions of NEOs’ compensation with profitable growth and operating cash flow, a substantial portion of total compensation for our NEOs is directly linked to long-term sustained stockholder returns. Based on Company performance in fiscal 2024, the calculated payout of the short-term financial portion of annual incentives was 192.4% of target, as discussed in greater detail beginning on page 39. The Committee applied a leadership score ranging from 0.9 to 1.2 to the calculated cash incentive awards of the Chief Executive Officer and each other NEOs, based upon an assessment of each executive's relative performance during the year. PSUs granted for the fiscal 2022 through 2024 performance period were earned at 118.3% of target.
Toni Townes-Whitley
| At SAIC, we ... | | PBelieve in pay for performance—simply put, we reward the NEOs when the company performs. PConduct an annual review by the Committee to establish a group of comparable companies to be used in compensation decisions. PReview and consider feedback provided by our stockholders related to executive compensation matters. PMitigate against imprudent risk-taking through balancing features in the design of our compensation programs. PSubject cash and equity-based incentive compensation to “clawback” policies if there is a restatement of our financial results for any reason or if the employee was involved in misconduct. PRequire significant stock ownership of our Executive Officers. PUse an independent compensation consultant who reports directly to the Committee. PProvide “double-trigger” provisions for certain change in control benefits. | | At SAIC, we do not ... | | XPermit cash buyout or re-pricing of underwater stock options. XGuarantee any bonus payouts to executive officers. XProvide employment agreements for executive officers. XProvide golden parachute excise tax gross-ups on change in control benefits. XPermit hedging or pledging of company stock or purchasing company stock on margin by our executive officers. XOffer defined benefit pension benefits to our executive officers or other employees. XProvide excessive perquisites for executive officers. |
Toni Townes-Whitley
In determining the amounts of compensation to be awarded to our NEOs, the Committee considers the Company’s overall performance and competitive market data for our compensation peer group. Company performance is the primary factor in determining variable compensation. The amount of any cash or performance-based equity incentive awards to be paid upon completion of the applicable performance period is determined based upon our achievement of short- and long-term financial goals set at the beginning of the fiscal year or performance period, as the case may be. However, the final cash incentive award payout also reflects an individual leadership component multiplier. The Committee retains the ability to use negative discretion to reduce payouts when appropriate. Individual performance is a factor in setting base salaries. In determining base salaries for our NEOs, the Committee reviews a performance assessment for each of our executive officers, as well as compensation recommendations provided by the Chief Executive Officer and the Chief Human Resources Officer. The Committee also considers market data, analysis and recommendations regarding executive officer compensation provided by FW Cook, its independent compensation consultant. The NEOs do not propose their own compensation. The Committee assesses our Chief Executive Officer's performance. In determining compensation for our Chief Executive Officer, the Committee meets in executive session and evaluates her performance based on her achievement of performance objectives that are established at the beginning of the fiscal year. Formal input is received from the independent directors and the executive leadership team. The Committee also considers the Chief Executive Officer’s leadership contributions towards the Company’s performance, including financial results, development and achievement of strategic objectives, progress in building capability among the executive leadership team, development of a succession plan for executive leadership and corporate governance leadership, as well as market data and analysis and recommendations provided by the Committee’s independent compensation consultant. The Committee determines the Chief Executive Officer’s compensation and then reviews her evaluation and compensation with the Board’s independent directors. The Chief Executive Officer does not propose her own compensation and is not present for discussions of her performance and compensation. The Independent Chair of the Board and the Chair of the Committee then present the Committee’s evaluation and compensation determination to the Chief Executive Officer. The Committee reviews our compensation peer group annually. The Committee uses peer group information as a reference point for assessing compensation levels and practices. The Committee, with the assistance of FW Cook, annually reviews and approves the list of companies to ensure its appropriateness. In evaluating and selecting companies for inclusion in the peer group, the Committee targets comparably sized publicly traded engineering, information technology, consulting and defense companies, as well as companies with whom we compete for executive talent with similar roles and responsibilities, which we refer to as our “compensation peer group.” For fiscal 2024, the compensation peer group used to determine target compensation consisted of the following 13 companies, which remained unchanged from our fiscal 2023 compensation peer group:
Toni Townes-Whitley
The compensation peer group generally reflects companies with annual revenues between one-third to three times our estimated revenues for the fiscal year in which the peer group is reviewed. Compensation data from two nationally-recognized, broad-based third-party surveys provides the Committee with additional context regarding the competitive landscape for executive talent. The Committee considers this survey data and analysis along with the compensation peer group data when evaluating appropriate levels of direct compensation. To be competitive in the market for our executive-level talent, we benchmark overall compensation for our NEOs at approximately the market median. Actual cash incentive awards paid and performance stock units earned vary, consistent with our pay-for-performance philosophy, based on operating performance and may therefore generate realized compensation that is higher or lower than the market median. Components of Fiscal 2024 Compensation Programs
Base Salary
Base Salary In reviewing and approving the fiscal 2024 base salaries for our NEOs, the Committee considered its independent compensation consultant’s analysis of pay levels among the compensation peer group and survey data, which indicated that base salaries for our NEOs were generally competitive relative to the peer group median and to survey data median for all executive officers. Actual individual base salary amounts also reflect the Committee’s judgment with respect to each NEO’s responsibility, performance, experience and other factors, the individual’s historical compensation and any retention concerns. The Committee reviews NEOs’ base salaries annually or at the time of a promotion or a substantial change in responsibilities based on the above-described criteria. In fiscal 2024, base salaries for the NEOs were increased to better align with the peer group levels and to maintain competitiveness of our compensation program and are summarized below.
Annual Cash Incentive Awards
Annual Cash Incentive Awards Our short-term incentive (“STI”) plan is the primary compensation element used to reward NEO accomplishments against established business goals approved by our Committee within a given year. Our annual cash incentive awards are based upon performance against predetermined goals for the fiscal year to encourage and reward contributions to our annual financial, operating and strategic objectives. Performance goals for cash incentive awards. At the beginning of each fiscal year, the Committee sets and approves threshold, target and maximum performance goals for the upcoming year based on objective financial goals. Further, the Committee reviews and approves the corresponding target cash incentive awards based upon the achievement of those goals. No amount is payable for below-threshold performance. When threshold performance is met, payouts are determined on a straight-line basis between threshold and target performance and between target and maximum performance up to a maximum payout of 200%. The diagram below illustrates how we determined fiscal 2024 cash incentive awards to our NEOs under our STI plan. Below the diagram, we discuss the award factors. (1) EBITDA is a non-GAAP financial measure and should be read in conjunction with net income, a GAAP financial measure; see the Management’s Discussion and Analysis of Financial Conditions and Results of Operations section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended February 2, 2024, for further information.
Annual Cash Incentive Awards
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Annual Cash Incentive Awards
Performance measures for fiscal 2024. The financial performance measures for fiscal 2024 were closely aligned with the Company’s strategy for sustained profitable growth and long-term value creation. For fiscal 2024, we maintained the core financial measures that we used in fiscal 2023: revenue, adjusted EBITDA, and adjusted operating cash flow, which directly align to our overall strategy and support increases in stockholder value with equal weightings of 33.3% each. These metrics focus on profitable growth along with strong cash generation. We continued to use an organic growth modifier that increases or decreases the weighted average for financial goals by 10% depending on the achievement of revenue or adjusted EBITDA modifier targets. The modifier targets for these metrics were established based on peer group consensus or guidance, where available, to drive differentiation relative to peers. The financial performance measures, their relative weightings, the targeted and maximum achievement levels and actual performance for our short-term incentive program for fiscal 2024, as approved by the Committee, is reflected in the table below. These metrics are adjusted for divestiture of the logistics and supply chain management business and deconsolidation of FSA joint venture. For fiscal 2024, the results reflect our strong performance with revenue growth of 7%, improvement in adjusted EBITDA margins of 50 basis points and double digit increase in transaction adjusted cash flow per share.
Fiscal 2024 Short-Term Incentive Awards
Fiscal 2024 Short-Term Incentive Awards
Fiscal 2024 Short-Term Incentive Awards
| Financial Measures(1) | Weight | Threshold | Target | Maximum | Actual(1) | % of Target Achieved | Payout % | | Revenue | 33.3% | $6.922B | $7.204B | $7.389B | $7.444B | 103.3% | 200.0% | | Adjusted EBITDA | 33.3% | $644M | $668M | $690M | $681M | 101.9% | 147.1% | | Adjusted Operating Cash Flow | 33.3% | $431M | $459M | $497M | $508M | 110.7% | 200.0% | | Weighted Average for Financial Goals | | | | | | | 182.4% | | Organic Growth Modifier (+/- 10%) | | | | | | | 10.0% | | STI Award Payout Percentage | | | | | | | 192.4% |
Fiscal 2024 Short-Term Incentive Awards
(1) See the Appendix to this Proxy Statement for a reconciliation as to how each adjusted non-GAAP performance measure is calculated as compared to the most closely comparable GAAP measure. Fiscal 2022 results included certain non-recurring margin benefits. Determination of organic growth modifier. For fiscal 2024, the Committee set an organic growth modifier of +/- 10% for adjusted EBITDA and revenue to align with our strategic objectives relative to our peer group performance. adjusted EBITDA and revenue parameters were established that would trigger the downside modifier as well as the upside modifier. Our actual result of 7.4% organic revenue growth rate exceeded the upside performance modifier thus triggering a 10% increase to the weighted average of the final financial performance. Determination of leadership score. In fiscal 2024, we continued to progress toward our goals related to increasing the representation of women and people of color in our leadership in order to achieve parity of diverse representation between our leader and non-leader roles within 5 years (introduced in fiscal 2022) as well as emphasized our strategic talent and culture objectives through our employee culture survey scores. The leadership scores for the NEOs can range between 0.8 and 1.2 (meaning that a multiplier of +/-20% may apply) based upon an assessment of each executive's relative performance in leading the business and our employees, determined by the Committee for the Chief Executive Officer, and with input from the Chief Executive Officer for the other NEOs. We fully achieved our annual goal to increase female and people of color representation to 28% and 25% of our leaders respectively and also exceeded our culture goal by achieving an employee culture survey score of 84, 6 points over the National benchmark. Determination of cash incentive award amounts. For fiscal 2024, the Committee set the target amount of the cash incentive award at 140% of base salary for the Chief Executive Officer and 100% of base salary for the other NEOs based on applicable market data. In determining the payout level amount, the Committee applied the STI award payout percentage (192.4% in fiscal 2024 as calculated in the table above) to the target cash incentive amount and further applied leadership factors ranging from 0.9 to 1.2 based upon assessment of each executive's relative performance during the year up to the maximum payout of 200% of target. For our NEOs, the target cash incentive award amounts as a percentage of base salary and award amounts earned in fiscal 2024 were as follows:
Fiscal 2024 Short-Term Incentive Awards
| Name | Base Salary | STI Target as % of Base Salary | Financial Score | Cash Incentive Amount Paid | | Toni Y. Townes-Whitley | $1,200,000 | 140% | 192.4% | $3,232,320 | | Nazzic S. Keene(1) | $1,250,000 | 140% | 192.4% | $3,030,300 | | Prabu Natarajan | $700,000 | 100% | 192.4% | $1,400,000 | | Robert S. Genter(1) | $700,000 | 100% | 192.4% | $1,212,120 | | Michael W. LaRouche(1) | $675,000 | 100% | 192.4% | $1,168,830 | | Michelle A. O'Hara | $600,000 | 100% | 192.4% | $1,200,000 |
Fiscal 2024 Short-Term Incentive Awards
(1) The Board approved short-term cash incentive payments for Ms. Keene, Mr. Genter, and Mr. LaRouche, per the applicable terms of the Company's Executive Severance, Change in Control and Retirement Policy.
Long-Term Incentive Awards
Long-Term Incentive Awards We provide equity incentive awards to our NEOs to motivate them to stay with us and build long-term stockholder value through their future performance. We benchmark our NEOs’ long-term incentive award opportunities at the median of the competitive market. The following forms of long-term incentive compensation were provided to our NEOs:
Long-Term Incentive Awards
| | Performance Stock Units—Incentivize our NEOs to achieve specific measurable financial goals over a three-year performance cycle. Earned shares vest and are issued at the end of the performance cycle and range from 0% for below threshold performance to 200% of target number of shares for maximum performance. PSUs are granted annually in overlapping performance cycles and serve as a tool to align pay and company performance and to retain our NEOs. Dividend equivalents are accumulated in cash and are paid at the end of the three-year performance cycle to the extent that the underlying share awards are earned. | | | Restricted Stock Units—Align pay and company performance as reflected in our stock price, encourage retention of our NEOs’ services and promote continued investment by our executives in company stock. RSUs awarded in fiscal 2024 vest over a three-year period in 33% installments at each anniversary of the grant date. Dividend equivalents on unvested RSUs accumulate in cash and are paid when and if the underlying RSUs vest. |
Fiscal 2024-2026 Performance Stock Units
Fiscal 2024-2026 Performance Stock Units For fiscal 2024, 60% of the long-term incentives awarded to our NEOs were provided in the form of performance stock units (valued at target payout). The performance measures and corresponding weightings for these awards are as follows:
Fiscal 2024-2026 Performance Stock Units
| Performance Measures | Weight | Description | | Cumulative Adjusted EBITDA | 33.3% | A three-year cumulative goal set at the beginning of the performance period | | Cumulative Adjusted Operating Cash Flow | 33.3% | A three-year cumulative goal set at the beginning of the performance period | | Relative Total Shareholder Return (rTSR) | 33.3% | Three-year TSR performance compared to our compensation peer group. TSR calculated based on 30 trading day average at the beginning and end of the performance period, with dividends assumed to be reinvested as of ex-dividend date. |
Fiscal 2024-2026 Performance Stock Units
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Fiscal 2024-2026 Performance Stock Units
At the beginning of each three-year performance period, the Committee establishes the performance measures to be used for that performance period, their weightings and the levels of performance on those measures for the entire three-year performance period that will generate threshold, target, and maximum payouts. The number of PSUs delivered at the end of the three-year performance cycle may range from 0% for below threshold performance to 50% for threshold performance and up to 200% for maximum performance. When the performance threshold is met, payouts are determined on a linear interpolation basis for performance levels between threshold and target and between target and maximum. The final PSU payout is delivered at the end of the three-year performance cycle. The financial targets are closely aligned with the Company’s long-term financial strategy and internal budgets, and not publicly disclosed at the time of the award issuance due to the proprietary and competitive nature of this information. For rTSR, we measure our ranking as compared to our compensation peer group. Threshold is set at the 25th percentile, target at the 50th percentile and maximum at the 75th percentile. For TSR, the range for payout is 0% for threshold performance to 200% for maximum performance with payouts determined on a linear interpolation. Final achievement and payouts for each of the above goals will be determined and disclosed by the Committee at the conclusion of fiscal 2026. Certification of fiscal 2022-2024 PSUs. The Compensation Committee reviewed and approved performance against pre-established targets for the fiscal 2022-2024 plan. Payout amounts for fiscal 2022-2024 performance stock units were as follows:
Fiscal 2022-2024 Performance Stock Units Payout
Fiscal 2022-2024 Performance Stock Units Payout
Fiscal 2022-2024 Performance Stock Units Payout
| Performance Measures | Performance Period | Weight | Threshold 50% | Target 100% | Maximum 200% | Actual(1) | % of Target Achieved | Payout % | | Cumulative Adjusted EBITDA | FY22-24 | 50% | $1.774B | $2.087B | $2.400B | $2.036B | 97.6% | 91.9% | | Adjusted Annual Operating Cash Flow | FY22 | | $416M | $520M | $624M | $522M | 100.4% | 101.9% | | | FY23 | 50% | $419M | $524M | $629M | $584M | 111.5% | 157.1% | | | FY24 | | $438M | $547M | $656M | $602M | 110.1% | 150.5% | | Weighted Average for Financial Goals | | | | | | | | 114.2% | | rTSR Modifier (2) | | | | | | | | 3.6% | | Share Payout Percentage | | | | | | | | 118.3% |
Fiscal 2022-2024 Performance Stock Units Payout
(1) See the Appendix to this Proxy Statement for a reconciliation as to how each adjusted non-GAAP performance measure is calculated as compared to the most closely comparable GAAP measure. (2) We achieved a relative rank of 54.5% in FY22-24 TSR (absolute ranking of 6 of 12), which equates to a modifier of 3.6%. The final payout percentage was increased by multiplying the weighted average by the modifier and adding the result. Other Benefits Provided in Fiscal 2024 In addition to the elements of direct compensation described above, we also provide our NEOs with the following benefits: Health and welfare benefits. Our NEOs are entitled to participate in the health and welfare plans that we generally offer to all of our eligible employees, which provide medical, dental, health, group term life insurance and disability benefits. We believe that these health and welfare benefits are reasonable in scope and amount and are of the kind typically offered by other companies against which we compete for executive talent. Additionally, our NEOs are eligible to participate in a physical health program. The program provides the NEOs with a comprehensive medical assessment and personalized preventive strategies to maintain and improve personal health. Retirement benefits. Our NEOs are entitled to participate in the same defined contribution retirement plan that is generally available to all of our eligible employees. Currently, we provide matching contributions to eligible participants’ retirement plan accounts based on a percentage of their eligible compensation under applicable rules. The amount of contributions we made to the retirement plan accounts of each of our participating NEOs in fiscal 2024 was $13,200 per person. The Committee believes that these contributions to this retirement program permit our NEOs to save for their retirement in a tax-effective manner, are reasonable in scope and amount and are of the kind typically offered by other companies against which we compete for executive talent. Deferred compensation plan. To provide other tax-deferred means to save for retirement, we maintain a deferred compensation plan that allows our NEOs and other eligible participants to elect to defer a portion of any cash incentive awards granted to them under our incentive plans and a portion of their eligible salary. Though the Company may make discretionary contributions to participating NEOs, we made no contributions to NEOs’ accounts for fiscal 2024. Vested deferred balances under the plan will generally be paid upon retirement or termination. We also have an additional frozen deferred compensation plan. These plans are described in more detail under “Executive Compensation, Nonqualified Deferred Compensation” below in this Proxy Statement. Perquisites and personal benefits. We do not provide excessive perquisites or personal benefits to our NEOs. Given the nature of our business, we believe security is necessary and generally provided to other executives within our industry. As the safety and security of our NEOs is of utmost importance, certain security measures are provided, including residential security, network security and dark web monitoring in response to escalating cybersecurity threats. Other Policies and Considerations Assessment of Risks in our Compensation Programs In the design and oversight of our compensation programs for NEOs and all employees, each year the Committee, with assistance from FW Cook, the Committee’s independent compensation consultant and management, assesses risks related to our pay practices and incentive programs. The risk assessment is focused on identifying risks associated with our compensation programs and the mix of each type of compensation element we provide to our NEOs and all employees, as well as the measures that the Company may employ to mitigate those risks. The Committee believes that the following features of our compensation programs effectively mitigate excessive risk-taking that could harm our value or reward poor judgment by our NEOs or other employees: • short-term incentive measures are balanced among different financial measures, with goals that are intended to be achievable upon realistic levels of performance; • significant weighting towards long-term incentive compensation promotes long-term decision making and discourages short-term risk-taking; • goals are based on Company performance measures, which mitigates excessive risk-taking within any particular business operation; • maximum payouts are capped at levels that do not reward excessive risk-taking; •our compensation recoupment policies allow us to recover compensation based on financial results that are subsequently restated or if fraud or intentional misconduct is involved; and • our stock ownership guidelines encourage a long-term perspective. For fiscal 2024, the Human Resources and Compensation Committee discussed and analyzed risks associated with the Company’s compensation policies and practices for executive officers and all employees generally. The Committee did not
Fiscal 2022-2024 Performance Stock Units Payout
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Fiscal 2022-2024 Performance Stock Units Payout
identify any risks arising from the Company’s compensation programs or practices that are reasonably likely to have a material adverse effect on the Company. Equity Award Grant Practices The Committee is responsible for the administration of our equity incentive plans. Generally, in advance of each fiscal year, the Committee will select predetermined dates on which equity awards will be granted to our employees, including our NEOs, during the following fiscal year. These grant dates are selected to occur after the dates we anticipate releasing our annual or quarterly financial results. We generally grant equity incentive awards to our directors, executive officers and all other eligible employees on an annual basis shortly after we announce our financial results for the recently completed fiscal year. In addition to these annual grants, the Committee predetermines four quarterly dates on which any additional equity incentive awards may be made to eligible NEOs or other employees in connection with an offer of employment, for retention purposes or to recognize performance. The Committee approves all equity awards made to our NEOs. Stock Ownership Guidelines and Stock Holding Requirements We encourage our employees to own our stock so that they are motivated to maximize our long-term performance and stock value. We have adopted stock ownership guidelines for our executive officers that require them to accumulate and maintain stock holdings calculated as a multiple of their base salary, depending on their role. The sum of all shares owned outright, shares held in a trust for the benefit of the employee or his/her immediate family members, vested stock held in the KESDP and MSCP compensation plans, stock held in a retirement plan and one-half (50%) of unvested time-based RSUs count toward the required ownership. No other equity holdings count toward meeting the ownership requirement including any unvested PSUs or unvested, unexercised stock options. In addition to stock ownership guidelines, we also maintain a stock holding requirements policy, which mandates that officers must hold 100% of the net shares acquired under our equity incentive programs until the applicable multiple of base salary is achieved. Mr. Natarajan, Mr. Genter, Mr. LaRouche and Ms. O'Hara have all satisfied their ownership goals. As Ms. Townes-Whitley was hired during the fiscal year, she has begun making progress toward her ownership goal. Prohibition on Hedging or Pledging Company Stock or Purchasing “On Margin” We have established policies that prohibit all executive officers, directors and employees from engaging in any short selling and hedging transactions in our securities that may carry a greater risk of liability for insider trading violations and also create an appearance of impropriety. For example, with respect to our securities, our executive officers, directors and employees are not permitted to engage in any short sales or any trading in puts, calls or other derivatives on an exchange or other organized market. In addition, we prohibit our executive officers, directors and employees from pledging company stock as collateral for a loan or purchasing company stock “on margin.” Further, our executive officers, directors and senior managers are required to obtain pre-clearance from our General Counsel for all transactions in our securities. “Clawback” or Compensation Recoupment Policies In 2023, we adopted a mandatory compensation recovery policy for our Section 16 officers and other officers as designated by the Human Resources and Compensation Committee to require recovery of certain incentive-based compensation pursuant to Rule 10D-1 of the Exchange Act and the applicable stock exchange rules. This mandatory compensation recovery policy was filed as an exhibit to our annual report on Form 10-K for the fiscal year ended February 2, 2024. In addition (and not in lieu of the mandatory compensation recovery policy), we continue to maintain a discretionary compensation recovery policy pursuant to which we may require executive officers and other employees who receive incentive compensation to return cash and equity incentives if there is a required accounting restatement to correct an error in previously issued financial statements (upon which the incentive compensation was based). If we determine that recovery is appropriate, we will seek repayment of the difference between the incentive compensation paid and the incentive compensation that would have been paid, if any, based on the restated financial results. This policy also gives us discretion to recover cash and equity incentive compensation from any employee involved in fraud or intentional misconduct whether or not such conduct results in a restatement of our financial results. In cases of fraud or misconduct, we may seek recovery of short-term cash incentives and/or any equity compensation paid (and/or any subsequent gains realized from the sale of any underlying SAIC shares). We may seek to recover the applicable amount of compensation from incentive compensation paid or awarded, as a reduction from future payments of incentive compensation, or by cancellation of outstanding equity awards. Post-Employment Benefits We do not maintain a defined benefit or other supplemental retirement plan that would entitle our executive officers to receive company-funded payments if they leave the Company. Upon certain terminations of employment, including death, disability, retirement or a change in control, our employees, including our NEOs, may be eligible for continued vesting of equity awards on the normal schedule or accelerated vesting in full or on a pro rata basis, depending on the nature of the event and the type of award. The purpose of these provisions is to protect previously earned or granted awards by making them available following the specified event. Because these termination provisions are contained in our standard award agreements for all recipients and relate to previously granted or earned awards, we do not consider these potential termination benefits as a separate item in compensation decisions for our NEOs. Our long-term incentive plans do not provide for additional benefits or tax gross-ups. For more information about potential post-employment benefits, see “Executive Compensation—Potential Payments upon Termination or a Change in Control” in this Proxy Statement. Executive Severance and Change in Control Policy We maintain an executive severance, change in control and retirement policy which specifies the compensation and benefits payable in connection with certain termination events for our executive officers in change in control, non-change in control, and retirement events as further described in this Proxy Statement under “Executive Compensation—Potential Payments upon Termination or a Change in Control.” We believe that this policy provides an important benefit to us by helping alleviate any concern the executive officers might have during a potential change in control of our Company and permitting them to focus their attention on our business. In addition, we believe that this policy is an important recruiting and retention tool, as many of the companies with which we compete for talent have similar arrangements in place for their senior management.
Fiscal 2022-2024 Performance Stock Units Payout
There are no excise tax gross-up provisions authorized by the policy. This policy renews for successive one-year terms each year, unless the Company provides notice to the eligible executive officers of either amendments to the policy or termination of the policy or has provided notice to an individual eligible executive officer that he or she is no longer eligible for the policy no later than November 1 of the term year. This annual term permits the Committee to review regularly the amount of benefits that would be provided to our executive officers in connection with certain termination events and to consider whether to continue providing those benefits. Executive Transitions Ms. Keene served as Chief Executive Officer and a member of the Board until October 2, 2023. She continued to provide transition services until her retirement effective February 2, 2024 (the "Effective Date"). Ms. Keene received the benefits as described in the "Executive Compensation—Potential Payments upon Termination or a Change in Control" section pursuant to the Severance Policy. Ms. Townes-Whitley was appointed as CEO-elect, effective as of June 12, 2023, and was appointed to succeed Ms. Keene as Chief Executive Officer and as a member of the Board for an initial term beginning on the Effective Date. In connection with her appointment as Chief Executive Officer, Ms. Townes-Whitley received annual compensation for fiscal 2024 as described in the "Executive Compensation" section. As an employee director, Ms. Townes-Whitley did not serve on any standing committees of the Board and did not receive any additional compensation for her service as a member the Board. Mr. Genter served as President, Defense and Civilian Sector and Mr. LaRouche served as President, National Security and Space Sector until February 2, 2024. They received benefits as described in the "Executive Compensation—Potential Payments upon Termination or a Change in Control" section pursuant to the Severance Policy.
Fiscal 2022-2024 Performance Stock Units Payout
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Fiscal 2022-2024 Performance Stock Units Payout
Human Resources and Compensation Committee Report The Human Resources and Compensation Committee has reviewed and discussed with our management the Compensation Discussion and Analysis included in this Proxy Statement. Based upon this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. Steven R. Shane (Chair) Garth N. Graham Timothy J. Mayopoulos Donna S. Morea James C. Reagan EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth information regarding compensation earned by our NEOs. None of the NEOs have employment agreements with the Company. The compensation set forth below was earned for service to SAIC during fiscal 2024, and, if applicable, during fiscal 2023 and fiscal 2022. All compensation is disclosed, whether or not such amounts were paid in such year:
Fiscal 2022-2024 Performance Stock Units Payout
| Name and principal position | Fiscal Year(1) | Salary ($) | Bonus ($) | Stock awards ($)(2) | Option awards ($)(2) | Non-equity incentive plan compensation ($)(3) | All other compensation ($)(4) | Total ($) | | Toni Y. Townes-Whitley Chief Executive Officer | 2024 | 578,077 | — | 7,175,963 | — | 3,232,320 | 3,958 | 10,990,318 | | Nazzic S. Keene Former Chief Executive Officer | 2024 | 1,258,224 | — | 7,254,762 | — | 3,030,300 | 1,352,631 | 12,895,917 | | | 2023 | 1,193,846 | — | 5,840,076 | — | 1,566,240 | 64,218 | 8,664,380 | | | 2022 | 1,146,923 | — | 5,333,701 | — | 1,845,792 | 16,740 | 8,343,156 | | Prabu Natarajan Chief Financial Officer | 2024 | 696,154 | — | 1,784,097 | — | 1,400,000 | 27,538 | 3,907,789 | | | 2023 | 663,462 | — | 4,500,148 | — | 677,700 | 12,450 | 5,853,760 | | | 2022 | 600,000 | — | 1,234,707 | — | 734,400 | 11,600 | 2,580,707 | | Robert S. Genter Former President, Defense and Civilian Sector | 2024 | 705,224 | — | 1,784,097 | — | 1,212,120 | 2,134,050 | 5,835,491 | | | 2023 | 671,154 | — | 4,500,148 | — | 677,700 | 32,710 | 5,881,712 | | | 2022 | 642,308 | — | 1,234,707 | — | 795,600 | 17,688 | 2,690,303 | | Michael W. LaRouche Former President, National Security and Space Sector | 2024 | 679,050 | — | 1,308,436 | — | 1,168,830 | 2,010,081 | 5,166,397 | | | 2023 | 646,154 | — | 4,100,130 | — | 652,600 | 15,185 | 5,414,069 | | | 2022 | 601,923 | — | 1,086,549 | — | 765,000 | 13,700 | 2,467,172 | | Michelle O'Hara Executive Vice President, Chief Human Resources Officer | 2024 | 611,683 | — | 1,427,343 | — | 1,200,000 | 16,631 | 3,255,657 | | | 2023 | 542,308 | — | 1,000,045 | — | 552,200 | 27,623 | 2,122,176 |
Fiscal 2022-2024 Performance Stock Units Payout
| Year(1) | Summary Compensation Table Total for First PEO (Keene) ($) | Compensation Actually Paid to First PEO (Keene)(2)(3)(4) ($) | Summary Compensation Table Total for Second PEO (Townes-Whitley) ($) | Compensation Actually Paid to Second PEO (Townes-Whitley)(2)(3)(4) ($) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs(2)(3)(4) ($) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(5) | Net Income ($ in millions)(6) | Revenue ($ in millions)(7) | | 2024 | 12,895,917 | 18,951,966 | 10,990,318 | 13,473,423 | 4,541,334 | 6,387,422 | 156.53 | 153.18 | 477 | 7,444 | | 2023 | 8,664,380 | 13,290,774 | — | — | 4,681,658 | 5,523,501 | 124.66 | 119.29 | 303 | 7,704 | | 2022 | 8,343,156 | 6,384,092 | — | — | 2,563,133 | 2,239,947 | 95.92 | 121.59 | 279 | 7,394 | | 2021 | 6,936,702 | 9,060,542 | — | — | 1,945,432 | 2,322,465 | 111.36 | 106.52 | 211 | 7,056 |