DEF 14A of Acadian Asset Management Inc.
Filed Apr 25, 2024 · FY20230001748824-24-000016
Householding of annual disclosure documents
John A. Paulson has been a member of our Board since November 2018 and Chairman of our Board since April 2020. Mr. Paulson currently serves as President of Paulson & Co. Inc. and has served in this role since the firm was founded in 1994. Prior to founding Paulson & Co., Mr. Paulson was a general partner of Gruss Partners and a managing director in mergers and acquisitions at Bear Stearns. Mr. Paulson received his Masters of Business Administration from Harvard Business School and his undergraduate degree from New York University. Mr. Paulson’s qualifications to serve on the Board include his deep knowledge of financial transactions and investments as well as his leadership abilities in founding and leading Paulson & Co. This knowledge and these qualifications will allow Mr. Paulson to provide valuable insight to the Board, especially in the area of Company strategy. Robert J. Chersi has been a member of our Board since March 2016 and our Lead Independent Director since November 2018. Mr. Chersi has been with Pace University since 2013, currently serving as the Executive Director for its Center for Global Governance, Reporting & Regulation, as well as an adjunct professor in its Department of Finance & Economics. In addition,Mr. Chersi has acted in an advisory capacity to financial services industry clients as an individual as well as through Chersi Services LLC, which he founded in 2014. Prior to joining Pace, Mr. Chersi was a member of the Executive Committee and Chief Financial Officer of Financial Services at Fidelity Investments in Boston, from 2008 to 2012. While at Fidelity, as CFO, Mr. Chersi led the finance, compliance, risk management, business consulting and strategic new business development functional organizations. From 1988 to 2008, Mr. Chersi served in numerous positions at UBS AG, including CFO of U.S. Wealth Management and Deputy CFO of Global Wealth Management and Business Banking. Mr. Chersi had several executive leadership positions while at UBS, including service on the UBS AG Group Managing Board from 2004 to 2008, which played an important role in developing and implementing the firm’s direction, values and principles and in promoting its global culture. He began his career as an audit manager in the Financial Service Practice of KPMG LLP in 1983. Mr. Chersi currently serves as a member of the Advisory Board of the Pace University Lubin School of Business, and has previously been a member of the board, Audit Committee and Risk Committee of UBS Bank USA, a member of the board of PW Partners R&D III, Chairman of the Board of Trustees of the UBS USA Foundation, a member of the board of Bon Secours New Jersey/St. Mary’s Hospital Foundation and a Trustee of Fidelity Investments’ Political Action Committee. Mr. Chersi also currently serves as a member of the Board of Trustees of Thrivent Funds. Previously, Mr. Chersi was also a Director of E*TRADE Financial Corporation, as well as member of the E*TRADE Bank board, the E*TRADE Audit Committee and the E*TRADE Risk Oversight Committee until the completion of E*TRADE’s merger with Morgan Stanley on October 2, 2020. He has held the Certified Public Accountant designation, and is a 1983 graduate of Pace University, where he earned a BBA in Accounting, summa cum laude. Mr. Chersi’s qualifications to serve on our Board include his extensive experience in the financial services industry and deep knowledge of corporate governance, financial reporting and regulatory compliance. In addition, his background in risk management, business consulting and strategic business development will be valuable to our Board. Andrew Kim has been a member of our Board since July 2019. Mr. Kim is currently a Partner at Paulson & Co. Inc., which he joined in July 2009. Prior to working at Paulson & Co., Mr. Kim was an analyst at Perry Capital from September 2005 to July 2007 and at Goldman Sachs from July 2004 to September 2005. Mr. Kim received his Masters of Business Administration from Harvard Business School and his undergraduate degree from the University of Michigan. Mr. Kim’s qualifications to serve on our Board include his deep knowledge of financial transactions and investments gained through his career in the financial services industry. This knowledge will allow Mr. Kim to provide valuable insight to the Board. Barbara Trebbi has been a member of our Board since January 2018. Ms. Trebbi was a General Partner and co-managing partner at Mercator Asset Management, L.P. (“Mercator”) until October 2017. At Mercator, which she joined in 2000, she was a senior member of the investment team, with a focus on international equities, in particular, continental European investments, as well as Asia and other emerging markets. Her clients included a wide range of institutional investors and sub-advisory accounts. Ms. Trebbi started her career in 1988 as an international equity research analyst at Mackenzie Investment Management Inc. and progressed over 12 years to become head of international equities. She has over 30 years of international investment experience. Ms. Trebbi is a Chartered Financial Analyst, a member of the CFA Institute and also is a member of the CFA Society of South Florida, where she served as President from 1994 to 1995. She also serves on a number of non-profit boards related to primary, secondary and higher education. Ms. Trebbi received a Graduate Diploma from the London School of Economics and Political Science and a B.S. degree in Finance from the University of Florida. Ms. Trebbi’s qualifications to serve on our Board include her deep investment experience, with a particular emphasis on international investments. This experience, combined with extensive knowledge of the institutional and sub-advisory markets, will allow her to provide valuable insight to our Board. Suren Rana has been our President and Chief Executive Officer and a member of our Board since April 2020. Before being appointed as the Company’s President, Chief Executive Officer and a Director of the Company, Mr. Rana was the Company’s Chief Financial Officer, a position he had held since January 2019. Prior to joining the Company, Mr. Rana was a partner at H Plus Capital, a private market investment management firm, from August 2018 to January 2019. Mr. Rana has been involved in the financial services sector for more than twenty years. Mr. Rana was a member of the Company's Board from November 2017 to August 2018. He served as the Chief Investment Officer at HNA Capital International from September 2016 to August 2018. He served as an investment banker at UBS from November 2015 to August 2016, Royal Bank of Canada from September 2011 to November 2014 and Merrill Lynch from 2005 to 2008 where he advised clients on M&A, IPOs, financings and other strategic matters. He also served as a Principal at Equifin Capital Partners from September 2008 to September 2011, where he led control investments in the financial services sector. Mr. Rana began his career at GE Capital with responsibilities in credit risk management and audit. Mr. Rana received an MBA from Harvard Business School, a graduate degree from the Indian Institute of Management Ahmedabad and a bachelor’s degree from the University of Delhi. Mr. Rana’s qualifications to serve on our Board include his extensive investment and financial knowledge, particularly relating to financial services companies. His experience with regard to M&A, financing and other strategic matters provides valuable insight to the Board.
2023 Executive Compensation Program Structure
2023 Executive Compensation Program Structure Our compensation program for 2023 continues to be based on clear and consistent objectives and alignment with our stockholders. Our compensation program intends to: •Align our NEOs’ compensation with long-term increases in value for stockholders •Reward individual efforts and our Company’s overall financial and strategic performance •Reflect our culture and values •Be competitive with our peers, helping us to attract, motivate and retain top-caliber executive talent The specific elements of our compensation program include: Base Salary: Each of our NEOs earns a fixed base salary, with base salaries intended to provide a degree of financial certainty and stability in our executive pay program. After review of comparator group data and taking into account the annual incentive compensation paid to our NEOs, the Compensation Committee did not adjust the base salaries of our NEOs in 2023. Incentive Awards: Our NEOs are provided with various forms of incentive compensation that are intended to recognize overall Company performance, as well as the performance of the individual NEO. Depending on the year and the individual NEO, these forms of incentive compensation have been delivered in cash incentives, premium-priced stock options and time-base RSUs. Actual awards earned for a given performance year are subject to the Compensation Committee’s discretionary assessment of the Company’s overall performance, the NEO’s individual performance, competitive market data and other related factors. The Committee’s assessment of these factors includes consideration of the following: •Overall Company Performance: When considering the Company’s overall performance the Committee considers financial (including ENI4 and ENI EPS5) and non-financial metrics on an absolute basis as well as compared to the Company’s business plan and industry peers. The Committee also considers the success of achieved strategic initiatives in its determination of overall performance. •Individual Performance: The Committee considers each NEO’s individual performance as evaluated against performance related to assigned goals and objectives, new and emerging business priorities identified during the year, and ongoing job-specific roles and responsibilities. •Competitive Market Pay Trends: The Committee considers the employee’s role at the Company and the compensation level for similar positions in the competitive market. 2023 Annual Incentive Compensation: Suren Rana, President and Chief Executive Officer: In 2019 when Mr. Rana joined the Company as CFO, and in 2020 when Mr. Rana became CEO, he received grants of premium-priced stock options with four to five year vesting schedules that align his compensation with our stock price performance and stockholder returns. Since the structure of those awards requires an increase in stock price in order to result in value to him, we consider these awards to be performance-based. Also, because of the magnitude of these awards, Mr. Rana was not eligible to participate in our annual equity or cash incentive compensation plans during the five-year period beginning January 20, 2019, but he may receive a cash bonus award for exceptional performance at the discretion of the Compensation Committee. A cash bonus award was not granted for 2023 and Mr. Rana continued to vest in his premium-priced stock options which provide strong and continued alignment with our stockholders. Christina Wiater, Principal Financial and Accounting Officer: Ms. Wiater has a target annual incentive of $700,000 with her actual incentive awards earned subject to the Compensation Committee’s discretionary assessment of the Company’s overall performance, Ms. Wiater’s individual performance, competitive market data and other related factors. Following the Compensation Committee’s holistic and rigorous assessment of Company and individual performance, competitive market data and other factors, Ms. Wiater was awarded 2023 total annual incentive compensation in February 2024 of $700,000, with this amount split between a cash award of $455,000 and time-based RSUs granted on February 15, 2024 with an approximate grant date value of $245,000. Ms. Wiater’s total incentive was awarded at target due to her strong performance, including, but not limited to, her oversight for all aspects of our Company’s financial reporting and corporate tax functions. The split between the cash payment and the time-based RSUs was based on the deferral schedule determined by the Compensation Committee as described below. The amount included in the Stock Awards column of the 2023 Summary Compensation Table for Ms. Wiater reflects the RSUs granted to Ms. Wiater in February 2023 for the 2022 performance year. Richard Hart, Chief Legal Officer: Mr. Hart is eligible to receive annual incentive compensation in an amount and form that is determined based on the Compensation Committee’s discretionary assessment of the Company’s overall financial performance, Mr. Hart’s individual performance, competitive market data and other related factors. Following the Compensation Committee’s holistic and rigorous assessment of Company and individual performance, competitive market data and in consideration of Mr. Hart’s strong performance related to oversight and management of all aspects of our Company’s governance and legal function. Mr. Hart was awarded 2023 total annual incentive compensation in February 2024 of $900,000. This total annual incentive award was split between a cash award of $565,000 and time-based RSUs granted on February 15, 2024 with an approximate grant date value of $335,000. The split between the cash payment and the time-based RSUs was based on the deferral schedule determined by the Compensation Committee as described below. The amount included in the Stock Awards column of the 2023 Summary Compensation Table for Mr. Hart reflects the RSUs granted to Mr. Hart in February 2023 for the 2022 performance year. 4 See Appendix for 2023 GAAP Net Income to ENI reconciliation and discussion of why such non-GAAP financial measure may be useful to investors. 5 See Appendix for 2023 GAAP EPS to ENI EPS reconciliation and discussion of why such non-GAAP financial measure may be useful to investors. The Compensation Committee considered the executive compensation program objectives when determining the deferral schedule for annual incentive compensation, including alignment our shareholders and competitiveness with our peers for the attraction and retention of high caliber talent. The deferral schedule for annual incentive compensation is as follows: •The first $100,000 of the total incentive paid in cash, •the next tier of incentive from $100,001 to $200,000 is paid 65% in cash and 35% in RSUs, •the next tier of the total incentive from $200,001 to $500,000 is paid 60% in cash and 40% in RSUs, •for incentives over $500,000, the tier from $500,001 to $1,000,000 is split 55% cash and 45% RSUs, and •the tier for incentives in excess of $1,000,000 is split evenly between cash and RSUs. The number of RSUs granted was determined by dividing the dollar value of the RSU portion of annual incentive compensation by the closing price of a share of our Common Stock on the date immediately prior to the date of grant, with RSUs vesting ratably over three years, generally subject to continued employment with us. Any dividends payable with respect to Common Stock underlying the RSUs will be subject to the same vesting conditions as the RSUs to which the dividends relate.
2023 Executive Compensation Program Structure
Severance Benefits: Pursuant to employment agreements we have with our NEOs, our NEOs are entitled to certain benefits in the event of the termination of their employment under specified circumstances. Please refer to “Employment Contracts - Termination Provisions” for a more detailed discussion of these benefits. We have provided estimates of the value of the severance payments and other benefits that would have been made or provided to our NEOs under various termination circumstances under the caption “Payments Upon Termination of Employment” below. We believe that providing these benefits helps us compete for executive talent and that our severance benefits are generally in line with competitive market practice. Employee Benefit Programs: Our NEOs are eligible to participate in the Company’s Profit Sharing and 401(k) Plan as well as receive the same health and welfare benefits as our other employees. We provide a Profit Sharing and 401(k) Plan for all employees and contribute a percentage of compensation to this plan on a discretionary basis, subject to regulatory limits (for 2023 the contribution was 10% of eligible compensation as defined by the terms of the plan). In addition, we maintain two non-qualified deferred compensation plans, the Deferred Compensation Plan and the Voluntary Deferral Plan, for select employees including our NEOs to provide additional retirement planning flexibility. The Deferred Compensation Plan allows the Company to make contributions to eligible employees’ accounts above statutory limits up to a maximum contribution among the qualified Profit Sharing and 401(k) Plan and the Deferred Compensation Plan of $50,000 per person annually (regardless of whether the eligible employee himself or herself contributes to the plan). Company contributions to the Profit Sharing and 401(k) Plan and the Deferred Compensation Plan vest over five years. Upon termination of a participant’s employment without cause or for good reason, any unvested Company contributions vest in full. The Voluntary Deferral Plan allows eligible employees to defer a portion of their compensation on a tax-deferred basis and does not include any employer contributions. Our NEOs are eligible for limited perquisites, including executive parking, which represent a de minimis portion of total compensation.
Comparator Group
Comparator Group We believe that ensuring that our compensation levels are competitive with the market for high-caliber talent in our industry is an important tool for attracting and retaining executives. The compensation levels of companies in our peer group are an input in assessing our total compensation levels. The Compensation Committee uses our comparator group as a reference and guide in making total compensation decisions. In selecting the companies in our comparator group the Compensation Committee considered, with input from McLagan, part of the Human Capital Practice at Aon plc (“Aon”), the Compensation Committee’s independent compensation consultant, the following factors: business structure, assets under management, revenue, and public company status. The comparator group is evaluated by the Compensation Committee on an annual basis and may change over time based upon the availability of peer data and the future characteristics of our business compared to peer companies, which includes both publicly traded and privately held asset management companies. For 2023, the comparator group included the following 14 public and private companies (for publicly traded companies the stock exchange symbol is provided):
Comparator Group
| American Century Investments | Loomis, Sayles & Company | | Artisan Partners (Symbol: APAM) | Putnam Investments | | Barings | Resolute Investment Management | | Cohen & Steers | Victory Capital Management (Symbol: VCTR) | | Conning Holdings Limited | Virtus Investment Partners (Symbol: VRTS) | | First Eagle Investment Management | William Blair & Company | | Lazard Asset Management | WisdomTree Investments (Symbol: WT) |
Compensation Consultant
Compensation Consultant Aon served as the independent compensation consultant to the Compensation Committee in 2023. Aon advised the Compensation Committee on a number of compensation matters, including market data and analysis, comparator group review, and governance. A representative from Aon attended Compensation Committee meetings, including executive sessions, as well as informal meetings, in each case as requested by the Compensation Committee, and communicated with the Chair between meetings to prepare for Compensation Committee meetings. The Compensation Committee assesses the independence of Aon annually and in 2023 concluded that Aon did not have any conflicts of interest with respect to its engagement by the Compensation Committee. In assessing Aon’s independence, the Compensation Committee considered the following factors: •Other services provided by Aon to the Company; •Aggregate fees paid by the Company to Aon and fees as a percentage of the total revenue of the consultant providing the services; •Aon’s policies and procedures designed to prevent conflicts of interest; •Any business or personal relationship between the consultant and any member of the Compensation Committee or any executive officer of the Company; and •Whether the consultant holds any shares of the Company’s stock.
Risk Mitigators
Risk Mitigators BrightSphere has the following policies designed to promote good corporate governance and to mitigate risk: •Clawback policies •Stock ownership guidelines •Prohibitions on hedging and pledging Clawback Policies Our NEOs are subject to two clawback policies to provide broader discretionary incentive compensation recoupment. The initial policy was instituted by the Compensation Committee for all NEOs for incentives awarded beginning in 2017 (“2017 Clawback Policy”) and the second policy was instituted in 2023 in compliance with SEC Rule 10D-1 and NYSE listing standards (“Rule 10D-1 Clawback Policy”). The Compensation Committee maintains both policies to provide robust clawback protection over incentive compensation awarded to our NEOs. The 2017 Clawback Policy has four prongs pursuant to which the Compensation Committee can consider a clawback of executive officer compensation that was paid, granted or vested in the three years prior to the applicable triggering event. The four prongs include: •Financial statement restatement due to material noncompliance with financial reporting requirements of the SEC; •Improper conduct resulting in significant adverse reputational or economic impact to the Company; •Conduct constituting cause under the Company’s equity plan; or •Violation of risk policies that result in a material impact to the Company. The Rule 10D-1 Clawback Policy, effective October 2, 2023, was adopted pursuant to NYSE listing standards and the SEC rules implementing the applicable provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Rule 10D-1 Clawback Policy provides for the recovery of erroneously awarded incentive compensation received by a current or former executive officer in the event of an accounting restatement due to material noncompliance with any financial reporting requirement under applicable securities laws. Stock Ownership Guidelines Our CEO and other NEOs are subject to shareholding requirements of at least 500% of base salary and 300% of base salary, respectively. Unvested RSUs and option awards are excluded for purposes of this calculation. Until this shareholding requirement is met, each NEO is required to retain 50% of his or her net gain shares (i.e., shares remaining after shares sold to pay taxes) received upon vesting or exercise of equity awards. Each of our NEOs is currently in compliance with these guidelines. Prohibitions on Hedging and Pledging Our policies prohibit all our officers, including our NEOs, from (i) entering into any hedging arrangements involving our stock, (ii) engaging in short sales or any other transaction which would result in short exposure to our stock, and (iii) pledging our stock as collateral.
2023 Summary Compensation Table
2023 Summary Compensation Table
2023 Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | All Other Compensation (3) | Total | | Suren Rana | 2023 | $650,000 | $— | $— | $50,000 | $700,000 | | President and Chief | 2022 | $650,000 | $— | $— | $50,000 | $700,000 | | Executive Officer | 2021 | $650,000 | $12,000,000 | $— | $50,000 | $12,700,000 | | Christina Wiater | 2023 | $425,000 | $455,000 | $105,006 | $50,000 | $1,035,006 | | Senior Vice President and Principal Financial and Accounting Officer | 2022 | $425,000 | $270,000 | $350,001 | $50,000 | $1,095,001 | | | 2021 | $425,000 | $850,000 | $— | $50,000 | $1,325,000 | | Richard Hart | 2023 | $500,000 | $565,000 | $335,017 | $50,000 | $1,450,017 | | Executive Vice President and Chief Legal Officer | 2022 | $500,000 | $565,000 | $480,009 | $50,000 | $1,595,009 | | | 2021 | $500,000 | $720,000 | $55,016 | $50,000 | $1,325,016 |
2023 Summary Compensation Table
(1)The amount reported in the 2021 Bonus column for Mr. Rana, represents a cash bonus awarded by the Compensation Committee under the terms of the Rana Employment Agreement (as defined in narrative below) in recognition of extraordinary performance in 2021. The amount reported in the 2021 Bonus column for Ms. Wiater was paid in accordance with the terms of her prior employment agreement. The amount reported in the 2022 and 2023 Bonus column for Ms. Wiater and Mr. Hart reflects the cash portion of the amount of the executive officer’s discretionary award under the Company’s annual incentive plan for 2022 or 2023, as applicable. The equity portion of Ms. Wiater and Mr. Hart’s 2022 award is reflected in the 2023 Stock Awards column and the equity portion of the 2023 awards for Ms. Wiater and Mr. Hart will will be reflected in next year’s summary compensation table. (2)The amounts in the Stock Awards column reflect the grant date fair value of awards of RSUs determined pursuant to FASB ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), disregarding the impact of estimated forfeitures. The assumptions used to value the RSUs for this purpose are set forth in Note 19 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year-ended December 31, 2023. The grant date fair value of time-based RSUs is calculated using the closing market price of our Common Stock on the day immediately prior to the date of grant. All of the awards of shares reported in the Stock Awards column were granted as RSUs under the Company’s Equity Incentive Plan. The RSU grants reflected in the 2023 Stock Awards column for Ms. Wiater and Mr. Hart were made on February 15, 2023 in respect to awards earned pursuant to our incentive plan for the 2022 performance year. RSUs granted pursuant to our annual incentive plan vest ratably over three-years, one-third on the first anniversary of the grant, one-third on the second anniversary of the grant and one-third on the third anniversary of the grant, generally subject to the executive officer’s continued employment through the applicable vesting date. (3)The amount reported in the All Other Compensation column, for each of Mr. Rana, Ms. Wiater and Mr. Hart in 2023 represents the sum of contributions by the Company under its Profit Sharing & 401(k) Plan of $33,000 and its non-qualified deferred compensation plan of $17,000.
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table sets forth information regarding plan-based awards made to each NEO during 2023 fiscal year.
2023 Grants of Plan-Based Awards
| Name | Grant Date | Approval or Action Date, if different | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) | | Suren Rana | — | — | — | $— | | Christina Wiater(1) | 2/15/2023 | 1/11/2023 | 4,059 | $105,006 | | Richard Hart(1) | 2/15/2023 | 1/11/2023 | 12,950 | $335,017 |
2023 Grants of Plan-Based Awards
(1)The amount represents the time-based RSUs granted under the Company’s Equity Incentive Plan related to performance in 2022. The grant date fair value of the RSUs was determined pursuant to ASC 718 by multiplying the number of shares by $25.87, the closing price of a share of Common Stock on February 14, 2023, the day prior to the date of grant.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The compensation reported in the Summary Compensation Table and the Grants of Plan-Based Awards table are pursuant the following employment agreements: a) Suren Rana. On January 22, 2019, the Company entered into an employment agreement with Suren Rana in connection with the appointment of Mr. Rana as the Company’s Chief Financial Officer. Mr. Rana’s employment agreement was amended and restated effective April 15, 2020 in connection with his appointment as President and Chief Executive Officer (Rana Employment Agreement). In connection with his promotion to Chief Executive Officer, the Rana Employment Agreement provided for a one-time grant of an option to purchase 1,500,000 shares of our common stock at an exercise price of $10.00 per share, which vests in four equal annual installments beginning on December 31, 2020 and expires on the fourth anniversary of the first vesting date. Pursuant to the terms of the Rana Employment Agreement, Mr. Rana receives a fixed base salary, which is subject to annual review and adjustment by the Compensation Committee, and is not eligible to participate in our annual equity or cash incentive compensation plans during the five-year period beginning January 20, 2019, but may receive a cash bonus award for extraordinary performance at the discretion of the Compensation Committee. Following the expiration of the initial term of Mr. Rana’s employment agreement in January of 2024, Mr. Rana’s employment continues as CEO at the same base salary, without contractual commitment to additional incentive compensation. b) Christina Wiater. On May 4, 2023, the Company entered into the Wiater Employment Agreement that provides for a fixed base salary and participation in the Company’s annual incentive plan. Under the terms of the Wiater Employment Agreement, Ms. Wiater will continue to receive an annual base salary of $425,000 and will be eligible to receive a target annual bonus of $700,000 payable in cash and equity pursuant to the Company’s standard pay practice, subject to individual and Company performance. c) Richard Hart. On April 15, 2020, the Company entered into an employment agreement with Mr. Hart that provides for a fixed base salary and participation in the Company’s annual bonus plan with no set target value, payable in cash and equity pursuant to the Company’s standard pay practice, subject to individual and Company performance.
2023 Outstanding Equity Awards at Fiscal Year-End
2023 Outstanding Equity Awards at Fiscal Year-End
2023 Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options: Exercisable (#) | Number of Securities Underlying Unexercised Option: Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) (7) | | Suren Rana | 4/21/2020(1) | 750,000 | — | $10.00 | 12/31/2024 | --- | --- | | | 1/22/2019(2) | 414,000 | — | $12.00 | 1/22/2024 | --- | --- | | Christina Wiater | 2/15/2023(3) | --- | --- | --- | --- | 4,059 | $77,770 | | Richard Hart | 2/15/2023(3) | --- | — | --- | --- | 12,950 | $248,122 | | | 2/15/2022(4) | --- | — | --- | --- | 13,147 | $251,897 | | | 2/15/2021(5) | --- | — | --- | --- | 925 | $17,723 | | | 4/21/2020(1) | 375,000 | — | $10.00 | 12/31/2024 | --- | --- | | | 2/14/2020(6) | 90,000 | — | $12.00 | 2/15/2025 | --- | --- |
2023 Outstanding Equity Awards at Fiscal Year-End
(1)The option vested as to 25% of the shares on each of December 31, 2020, December 31, 2021, December 31, 2022, and December 31, 2023. (2)The option vested as to 20% of the shares on each of January 22, 2019, January 22, 2020, January 22, 2021, January 20, 2022 and January 22, 2023. (3)The RSUs vest in one-third increments over a three-year period on each of February 15, 2024, February 15, 2025 and February 15, 2026, generally subject to continued employment. (4)The RSUs vest in one-third increments over a three-year period on each of February 15, 2023, February 15, 2024 and February 15, 2025, generally subject to continued employment. (5)The RSUs vest in one-third increments over a three-year period on each of February 15, 2022, February 15, 2023 and February 15, 2024, generally subject to continued employment. (6)The option vested as to 20% of the shares underlying the option on each of February 14, 2020, December 31, 2020, December 31, 2021, December 31, 2022, and December 31, 2023. (7)Market value was determined by multiplying the number of shares of Common Stock by $19.16, the closing price of a share of Common Stock on December 29, 2023, the last trading day of 2023.
2023 Options Exercised and Stock Vested
2023 Options Exercised and Stock Vested The following table shows the stock awards held by our NEOs that were exercised or vested during 2023 fiscal year.
2023 Options Exercised and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting (1) ($) | | Suren Rana | — | $— | — | $— | | Christina Wiater | — | $— | 17,964 | $425,148 | | Richard Hart | — | $— | 12,514 | $328,310 |
2023 Options Exercised and Stock Vested
(1)The value realized upon vesting of RSUs is calculated by multiplying the fair market value of a share of Common Stock on the vesting date (the closing price on the business day prior to the vesting date) by the number of shares vested.
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The following table provides information on the NEOs’ participation in the Voluntary Deferral Plan (“VDP”) and the Deferred Compensation Plan (“DCP”). The VDP allows eligible employees to elect to defer a portion of their salary and annual incentive on a voluntary basis. Eligible employees elect the time and form of distribution from the VDP at the time of enrollment. Distributions may be made during employment or at the time of termination or retirement as defined by the terms of the VDP, subject to applicable tax law. Under the DCP, the Company may provide additional pre-tax contributions to employees whose profit sharing contributions were limited under the Company’s tax-qualified plan. DCP accounts are distributed at the time termination of employment, subject to applicable tax law. Earnings on VDP and DCP balances are calculated based on the employee-directed investment vehicles, which do not provide for above-market interest. For 2023, the Company contribution under the DCP is at the same rate of contribution as the contribution to the Profit Sharing & 401(k) Plan (10% of eligible compensation for 2023), subject to an aggregate contribution limit of $50,000.
2023 Nonqualified Deferred Compensation
| Name | Plan | Executive Contributions in Last FY ($) | Registrant Contribution in Last FY ($)(1) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions in Last FY ($) | Aggregate Balance at end of Last FYE ($) | | Suren Rana | Voluntary Deferral Plan | $— | $— | $— | $— | $— | | | Deferred Compensation Plan | $— | $17,000 | $4,213 | $— | $89,269 | | Christina Wiater | Voluntary Deferral Plan | $— | $— | $— | $— | $— | | | Deferred Compensation Plan | $— | $17,000 | $9,183 | $— | $69,739 | | Richard Hart | Voluntary Deferral Plan | $— | $— | $— | $— | $— | | | Deferred Compensation Plan | $— | $17,000 | $27,379 | $— | $249,405 |
2023 Nonqualified Deferred Compensation
(1)All Company contributions are included in the “All Other Compensation” column of the 2023 Summary Compensation Tables.
Payments Upon Termination of Employment, Death and Disability
Payments Upon Termination of Employment, Death and Disability The following tables detail payments upon termination by the Company without cause, for good reason by the employee, or due to death or disability as of December 31, 2023 for each of the NEOs:
Payments Upon Termination of Employment, Death and Disability
| | Termination Without Cause or for Good Reason | | | | | | | Salary | COBRA Benefits | Bonus | Accelerated Vesting | Total | | Suren Rana | $650,000 | $27,289 | $— | $— | $677,289 | | Christina Wiater (1) | $425,000 | $28,287 | $700,000 | $77,770 | $1,231,057 | | Richard Hart (2) | $500,000 | $28,287 | $900,000 | $517,742 | $1,946,029 |
Payments Upon Termination of Employment, Death and Disability
(1) Accelerated vesting for Ms. Wiater of 4,059 unvested RSUs. Ms. Wiater’s bonus represents her bonus target as set forth in the Wiater Employment Agreement. Ms. Wiater would also receive a cash bonus for the year in which the termination occurs equal to the greater of (a) her most recently paid annual bonus and (b) $700,000, in each case pro-rated to reflect the number of days worked during the year. All equity awards have been valued based on the closing price of a share of Common Stock and December 29, 2023 ($19.16), the last trading day of 2023. (2) Accelerated vesting for Mr. Hart includes acceleration of 27,022 unvested RSUs. Mr. Hart did not hold any unvested stock options subject to accelerated vesting as of December 31, 2023. Mr. Hart’s bonus represents his prior year bonus. Mr. Hart would also receive a cash bonus for the year in which the termination occurs equal to his most recently paid annual bonus pro-rated to reflect the number of days worked during the year. All equity awards have been valued based on the closing price of a share of Common Stock and December 29, 2023 ($19.16), the last trading day of 2023.
Payments Upon Termination of Employment, Death and Disability
| | Termination upon Death or Disability | | | | | | | Death | | Disability | | | | | Accelerated Vesting | Total | Accelerated Vesting | COBRA Benefits | Total | | Suren Rana | $— | $— | $— | $27,289 | $27,289 | | Christina Wiater (1) | $77,770 | $77,770 | $77,770 | $28,287 | $106,057 | | Richard Hart (2) | $517,742 | $517,742 | $517,742 | $28,287 | $546,029 |
Payments Upon Termination of Employment, Death and Disability
(1) Accelerated vesting for Ms. Wiater of 4,059 unvested RSUs. (2) Accelerated vesting for Mr. Hart of 27,022 shares of unvested RSUs.
CEO Pay Ratio
CEO Pay Ratio We are providing the following information about the relationship of the median annual total compensation of our employees and the annualized total compensation of Mr. Rana: For 2023, our last completed fiscal year: •the median of the annual total compensation of all employees of our Company (other than our CEO) was $251,426; and •the total compensation of our CEO was $700,000. Based on this information for 2023, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was approximately 3:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below. To identify our median employee, we first determined our employee population as of December 31, 2023 (the “Determination Date”). We had 387 employees full-time, part-time, seasonal and temporary employees (including employees of our remaining affiliate) as of the Determination Date. This number does not include any independent contractors or “leased” workers, as permitted by the applicable SEC rules. We ranked total annual compensation of the employee population using W-2 taxable income, inclusive of pre-tax deferrals, for the period beginning January 1, 2023 and ending December 31, 2023. An equivalent annual income amount was used for employees outside the United States. Once we identified our median employee, we then determined that employee’s total compensation, including any perquisites and other benefits, in the same manner that we determine total compensation of our CEO for the purposes of the Summary Compensation Table disclosed above.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officers (“PEOs”) and Non-PEO NEOs and Company performance for the fiscal years listed below.
Pay Versus Performance Disclosure
| Year | Summary Compensation Table (SCT) Total for First PEO(1) | Compensation actually paid to First PEO(1)(2)(3) | Summary Compensation Table (SCT) Total for Second PEO(1) | Compensation actually paid to Second PEO(1)(2)(3) | Average SCT Total for non-PEO NEOs1 | Average Compensation actually paid to non-PEO NEOs(1)(2)(3) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ millions) | Stock Price(5) | | | | | | | | | TSR | Peer Group TSR | | | | 2023 | | | $700,000 | $809,897 | $1,242,512 | $1,091,027 | $191 | $133 | $67.1 | $19.16 | | 2022 | $— | $— | $700,000 | $(6,979,464) | $1,345,000 | $197,014 | $205 | $119 | $100.6 | $20.58 | | 2021 | $— | $— | $12,700,000 | $24,330,911 | $1,325,008 | $2,407,172 | $254 | $133 | $896.4 | $25.60 | | 2020 | $1,401,151 | $(3,902,435) | $1,395,830 | $27,539,095 | $925,254 | $4,020,015 | $191 | $98 | $315.5 | $19.28 |
Pay Versus Performance Disclosure
(1)Guang Yang was our first PEO until April 15, 2020. Suren Rana has been our Second PEO since April 15, 2020.The individuals comprising the non-PEO NEOs for each year presented are listed below.
Pay Versus Performance Disclosure
| 2020 - 2023 | | Richard Hart | | Christina Wiater |
Pay Versus Performance Disclosure
(2)The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. (3)Compensation Actually Paid reflects the exclusions and inclusions for the PEOs and the Non-PEO NEOs set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table.
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for Suren Rana | Exclusion of Equity Awards for Suren Rana | Inclusion of Equity Values for Suren Rana | Compensation Actually Paid to Suren Rana | | 2023 | $700,000 | $— | $109,897 | $809,897 |
Pay Versus Performance Disclosure
| Year | Average Summary Compensation Table Total for Non-PEO NEOs | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs | Average Inclusion of Equity Values for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $1,242,512 | $(220,000) | $68,515 | $1,091,027 |
Pay Versus Performance Disclosure
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Pay Versus Performance Disclosure
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Suren Rana ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Suren Rana ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Suren Rana ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Suren Rana ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Suren Rana ($) | Total - Inclusion of Equity Values for Suren Rana ($) | | 2023 | $— | $— | $— | $109,897 | $— | $109,897 |
Pay Versus Performance Disclosure
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO NEOs | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | $163,287 | $(9,781) | $— | $(84,991) | $— | $— | $68,515 |
Pay Versus Performance Disclosure
(4)The Peer Group TSR shown in this table utilizes the S&P 500 Financial Index Sector (the “Index”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report, for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. (5)Net income is as reported in the Company’s Form 10-K for the relevant year. (6)Stock price is shown as of the December 31st of each year. We determined Stock Price to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and other NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial performance measure to be the most important measure in future years.
Relationship Between PEO and Non-PEO Compensation Actually Paid, Company Total Shareholder Return (“TSR”), and Peer Group TSR
Relationship Between PEO and Non-PEO Compensation Actually Paid, Company Total Shareholder Return (“TSR”), and Peer Group TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company’s cumulative TSR over the four most recently completed fiscal years assuming $100 was invested on December 31, 2019, and the Peer Group’s TSR over the four most recently completed fiscal years.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the four most recently completed fiscal years.
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Stock Price
Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Stock Price The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Stock Price during the four most recently completed fiscal years.
2023 Director Compensation
2023 Director Compensation Director compensation includes both cash payments and equity granted in the form of RSUs. RSUs granted to our non-employee directors vest on the earlier of the one-year anniversary of grant or the date of the next year’s annual meeting of stockholders, subject to the director’s continued service through the vesting date. The following table details the fees paid to our non-employee directors for their service during fiscal 2023 with equity compensation expressed as the grant date fair value of the award determined in accordance with FASB ASC Topic 718:
2023 Director Compensation
| | 2023 | | | Role(1) | Cash | Equity | | Board Chair (paid only if Board Chair is not an employee of the Company) | $175,000 | $175,000 | | Board Fee (2) | $90,000 | $100,000 | | Chair of the Audit Committee | $25,000 | $— | | Member of the Audit Committee | $10,000 | $— | | Chair of the Compensation Committee | $15,000 | $— | | Member of the Compensation Committee | $5,000 | $— | | Chair of the Nominating and Corporate Governance Committee | $10,000 | $— | | Member of the Nominating and Corporate Governance Committee | $5,000 | $— |
2023 Director Compensation
(1) Non-Employee Directors that are appointed and compensated by a stockholder receive no separate compensation for their roles as on the Board. In addition, the Company does not pay any director compensation to individuals who are also employees of the Company for their service as directors. (2) The Lead Independent Director receives an additional fee of $13,500. The following table sets forth information concerning the compensation awarded to, earned by, or paid to our non-employee directors during the fiscal year ended December 31, 2023. Compensation paid to Mr. Rana for 2023 is included with that of our other NEOs above.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash (2) $ | Stock Awards (3) (4) $ | Total $ | | John Paulson | $185,000 | $175,000 | $360,000 | | Andrew Kim (1) | — | — | — | | Robert J. Chersi | $138,500 | $100,016 | $238,516 | | Barbara Trebbi | $120,000 | $100,016 | $220,016 |
2023 Director Compensation
(1) Mr. Kim, who is appointed and compensated by a stockholder receives no separate compensation for his role as a director of the Company. (2) Fees for non-employee directors are recommended by the Nominating and Corporate Governance Committee and approved by the Board pursuant to the Non-Employee Director Compensation Policy as described above. (3) The amount in the Stock Awards column is the grant date fair value of RSUs granted to our non-employee directors, determined pursuant to ASC 718, disregarding the effects of estimated forfeitures. The assumptions used to value the RSUs for this purpose are set forth in Note 19 to our audited financials filed with our Annual Report on Form 10-K for the year-ended December 31, 2023. All of the RSUs reported in the Stock Awards column were granted under the Company’s Non-Employee Director Equity Incentive Plan. (4) The aggregate number of RSUs outstanding at fiscal year-end for each of the non-employee directors is detailed in the table below. All awards are scheduled to vest the earlier of the 2023 Annual Meeting or June 8, 2024.
2023 Director Compensation
| Name | Number of RSUs Held at Year End | | John Paulson | 7,662 | | Robert J. Chersi | 4,379 | | Barbara Trebbi | 4,379 |
2023 Director Compensation
Stock Ownership Guidelines for our Directors Our non-employee directors, who are not employed by a stockholder, are subject to a shareholding requirement of at least 500% of the cash board fee. Unvested share awards are excluded for the purposes of this calculation. There is no time period for attaining this shareholding requirement but, until it is met, non-employee directors are required to retain 100% of their net gain shares (i.e., shares remaining after shares sold to pay taxes) at vesting. Each non-employee director to whom these guidelines apply is currently in compliance with these guidelines. Anti-Hedging and Anti-Pledging Policy for our Directors Our policies prohibit our non-employee directors from i) entering into any hedging arrangements involving our stock, ii) engaging in short sales or any other transaction which would result in short exposure to our stock, and iii) pledging our stock as collateral.
2023 Director Compensation
| PROPOSAL 3—ADVISORY VOTE ON EXECUTIVE COMPENSATION |