Clawback Provisions. Under
We have adopted a comprehensive clawback policy providing for the 2020 Omnibus Incentive Plan, 2015 Omnibus Incentive Plan and 2010 Omnibus Incentive Plan, if our financial statements are required to be restated due to errors, omissions, fraud or misconduct, therecoupment of certain executive compensation committee may direct the company to recover all or a portion of any award or any past or future compensation from any participant or former participant with respect to any fiscal year of the company for which financial results are negatively affected by such restatement. Such recoveries will be limited to those participants or former participants who had knowledge or reasonably should have had knowledge of such errors, omissions, fraud or misconduct and failed to take reasonable steps to bring it to the attention of the appropriate individuals, or who personally and knowingly engaged in practices that materially contributed to the restatement. Further, under the 2020 Omnibus Incentive Plan, 2015 Omnibus Incentive Plan and 2010 Omnibus Incentive Plan, the compensation committee has the authority to cancel or require repayment of an award in the event a participant or former participant breaches any non-solicitation, non-competition or confidentiality agreement entered intoof an accounting restatement resulting from material noncompliance with us.financial reporting requirements under U.S.
federal securities laws, which policy is compliant with the requirements of Section 10D of the Exchange Act and Section 303A.14 of the NYSE Listed Company Manual.
Alignment with Stockholders.
Stock Ownership Guidelines and Holdings Requirements
We believe that our executive officers should maintain at least a minimumsignificant position in our common stock so that their interests are aligned with those of our stockholders. Our stock 
vested but unexercised stock options and 70% of unvested time-based restricted stock units.TBRSUs. Further, until compliance is achieved, executive officers must hold at least 50% of net shares acquired at vesting and are restricted from selling below the compliance threshold thereafter. While no burn-in period is provided prior to measuring compliance, the boardBoard of directorsDirectors expects executives to reach the prescribed thresholds within five years.
As of February 26, 2021,March 31, 2024, (i) all current NEOs have holdings that meet or exceed the guidelines, except for Mr. Horn, who had notified the company of his intention to retire from his position as executive vice president and chief financial officerare in 2019, but has continued his service in an advisory role at the request of the board of directors and has not received a stock award as part of his compensation since 2018.
2020 “Say-on-Pay” Advisory Vote on Executive Compensation. At our 2020 annual meeting of stockholders, stockholders expressed substantial support at 94% approval for the “say-on-pay” advisory vote on the compensation of our NEOs. We believe these results represent strong investor support for our overall compensation philosophy and decisions. The compensation committee evaluated the results of the 2020 “say-on-pay” vote togethercompliance with the
other factors discussed in this Compensation Discussionholding requirements outlined above and
Analysis. These factors included the committee’s assessment of retention of executives, alignment of performance targets with growth and profitability objectives and the analysis of pay practices of our proxy peer group, each of which is evaluated in the context of the committee’s fiduciary duty to act as such directors determine is in the best interests of our stockholders. Based on its analysis, the compensation committee did not make any changes to the executive compensation program or policies as a direct result of the 2020 “say-on-pay” advisory vote. However, in light of the efforts of executive management and associates across the enterprise to respond to the unprecedented challenges presented by the pandemic, the compensation committee undertook a comprehensive review of market conditions following the completion of the 2020 annual meeting of stockholders and seating of the new board chair and chair of the compensation committee. Based on the unique conditions experienced in 2020 and the continuing uncertainties in macroeconomic conditions and forecasts, in mid-August 2020, the compensation committee took the unique step of establishing a new annual performance-based non-equity incentive compensation plan in the form of balanced scorecards. These balanced scorecards encompassed a range of both
financial and non-financial metrics keyed to three categories, stockholders, customers and associates. Further, in response to feedback from proxy advisors and in consultation with its external executive compensation consultant, for 2021, the compensation committee both (1) selected a new financial metric for long-term equity incentive compensation to differentiate from, and not overlap with, those financial metrics utilized in annual performance-based non-equity incentive compensation; and (2) established a three-year performance metric with cliff-vesting at the end of the full three-year performance period only. See “Looking Forward: Fiscal Year 2021 Long-Term Incentive Compensation” on page 38.
We currently provide stockholders an annual “say-on-pay” advisory vote on the compensation of our NEOs and will continue to do so through our next stockholder advisory vote regarding the frequency of holding advisory votes on executive compensation, which will be no later than our annual meeting of stockholders in 2023.
Determining Compensation
Role of the Compensation Committee. The compensation committee reviews and approves the compensation for our non-CEO executive officers from the time of their hire or promotion to such roles, and, together with the other independent directors, approves the compensation of our CEO. The compensation committee typically sets the total direct compensation for our executive officers near the beginning of each year. This timing allows us to consider the performance of the company and each potential recipient in the prior year, as well as expectations for the upcoming year. Performance-based short-term non-equity incentive compensation and long-term equity incentive compensation targets and scales are established and grants are awarded as early as practicable in the year, contingent upon the availability of the prior year’s financial results, to maximize the time period over which the applicable performance incentives apply. Consistent with our practice of granting equity-based awards for new hires, promotions and associates that have joined the company as a result of a merger or acquisition on a date certain each month (currently the 15th of each month or the next business day), long-term equity incentive compensation awards for executive officers are made on February 15 (or the next business day) of each year, or such other pre-determined date following release of the company’s earnings for the prior fiscal year as is appropriate. In the event there exists material information that we have not yet disclosed, the compensation committee may delay or defer the grant of any equity-based awards until(ii) all disclosures are current. Material changes to pay levels for individuals are typically made only upon a significant change in job responsibilities.
With the appointment of a new CEO in early 2020 and continuation of the leadership transition, the compensation committee, or with respect to the CEO, the board of directors, approved compensation levels in early 2021 for those executive officers previously identified and for each newly designated executive officer at the time of their promotion or shortly thereafter. For our new executive officers named in this leadership transition, their compensation, prior to consideration by the compensation committee or the board, remains consistent with our philosophy of compensating all associates on a competitive basis with a mid-market target for all skilled positions in all geographic locations based on relevant peer or industry group data. Some amounts may be higher or lower based on factors such as skill levels, performance, seniority, workload, span of control, retention considerations and institutional knowledge. For additional information on the process for establishing compensation, see “Elements of Executive Compensation” on page 31 and “Competitive Considerations” below. In addition, aligned with the aforementioned compensation objectives and our industry peers, the compensation committee considered the strategic direction of new executive leadership in addition to the impact of the COVID-19 pandemic on our operations and, in mid-August 2020, determined that it was in our and our stockholders’ best interests to adopt a new balanced scorecard design for 2020 annual performance-based non-equity incentive compensation where financial and non-financial metrics were set. Please see “Annual Performance-Based Non-Equity Incentive Compensation” on page 31 for additional information.
Role of the Chief Executive Officer. Typically, our CEO makes compensation recommendations to the compensation committee with respect to our non-CEO executive officers. The compensation committee may accept or adjust the CEO’s recommendations in its sole discretion and also makes a recommendation regarding the CEO’s compensation to the full board of directors. The CEO does not make any recommendations to the compensation committee or to the board of directors relating to performance measures, targets or similar items that affect CEO compensation. Moreover, the CEO is recused from discussions of CEO compensation during board of directors and compensation committee meetings.
Role of the Compensation Consultant. In 2020, the compensation committee directly engaged the assistance of an external executive compensation consultant, Meridian Compensation Partners, LLC, or Meridian, for its industry knowledge and experience in advising on executive compensation matters. The compensation committee has considered and assessed all relevant factors, including, but not limited to, those set forth in Rule 10C-1(b)(4)(i) through
(vi) under the Securities Exchange Act of 1934, as amended, that could give rise to a potential conflict of interest with respect to Meridian. Based on this review, we are not aware of any conflict of interest that has been raised by the work performed by Meridian. In particular, Meridian assisted the compensation committee in 2020 with competitive market analysis, peer assessment, consultation and review of compensation policies and practices.
Competitive Considerations
In determining appropriate levels of compensation, the compensation committee considers the competitive market for talent and compensation levels provided by comparable companies to minimize significant differences that could negatively impact our ability to attract and retain skilled executive officers. As mentioned above, the compensation committee engaged Meridian to, among other things, assist with competitive market analysis and peer assessment. For conducting market review, Meridian formed and surveyed two data sets: a general industry group and a proxy peer group. The general industry group encompasses companies of similar size based on revenue. The proxy peer group consists of public companies that are currently monitored as competitors or are in similar industries and have similar revenue or market capitalization.
Proxy Peer Group. Meridian reviewed the compensation practices for the proxy peer group set forth below with whom we compete for business and talent. This approach provides us with a balanced perspective, reflecting industry, performance and company size considerations as they affect executive pay. Meridian collected, analyzed and presented comprehensive market data, including base salary and target short- and long-term incentive amounts, for each of our executive officers, including our then current NEOs, from both published proxy data and proprietary data sources.
For 2020, the companies comprising the proxy peer group included:
| Company Name | | Symbol | | Market Cap ($B) as of 2/26/2021 | | Relative to ADS | | Fiscal 2020 Revenue ($M) |
| Market Cap | Revenue |
| Alliance Data Systems Corporation | | ADS | | 4.8 | | – | – | | 4,521 |
| Ally Financial Inc. | | ALLY | | 15.5 | | 3.2x | 1.5x | | 6,686 |
| Citizens Financial Group, Inc. | | CFG | | 18.5 | | 3.9x | 1.5x | | 6,905 |
| Comerica Incorporated | | CMA | | 9.5 | | 2.0x | 0.6x | | 2,912 |
| Discover Financial Services | | DFS | | 28.9 | | 6.0x | 2.5x | | 11,088 |
| Fifth Third Bancorp | | FITB | | 24.6 | | 5.1x | 1.7x | | 7,625 |
| Huntington Bancshares Incorporated | | HBAN | | 15.6 | | 3.3x | 1.1x | | 4,836 |
| KeyCorp | | KEY | | 19.5 | | 4.1x | 1.5x | | 6,715 |
| M&T Bank Corporation | | MTB | | 19.4 | | 4.0x | 1.3x | | 5,972 |
| Mastercard Incorporated | | MA | | 351.5 | | 73.3x | 3.4x | | 15,301 |
| PayPal Holdings, Inc. | | PYPL | | 304.3 | | 63.5x | 4.7x | | 21,454 |
| Popular, Inc. | | BPOP | | 5.6 | | 1.2x | 0.5x | | 2,369 |
| Regions Financial Corporation | | RF | | 19.8 | | 4.1x | 1.4x | | 6,335 |
| Santander Consumer USA Holdings Inc. | | SC | | 7.7 | | 1.6x | 1.0x | | 4,706 |
| SVB Financial Group | | SIVB | | 26.2 | | 5.5x | 0.9x | | 3,996 |
| Synchrony Financial | | SYF | | 22.6 | | 4.7x | 2.5x | | 11,162 |
Proxy Peer Group Assessment and Changes for Fiscal Year 2021. In November 2020, the compensation committee, with the assistance of Meridian, reviewed the companies comprising the proxy peer group. At that time, in preparation for determining executive compensation packages for fiscal year 2021, the compensation committee selected the same 15 proxy peer companies listed above, with the only change being the addition of Capital One Financial Corporation and the removal of Popular, Inc. for 2021.
Market Review. Market data provides an important benchmark by indicating what an executive officer could expect to earn at a comparable company and what we might expect to pay if we should have to recruit and compete for outside executive talent. Market data, however, is only one factor that the compensation committee considers in assessing the reasonableness of compensation provided to our NEOs. The compensation committee also considers other relevant factors, including an NEO’s experience, breadth of knowledge, talent supply and demand that may be industry or application specific, cost constraints, internal compensation equity considerations, company performance, individual performance, expected future contributions, prior compensation and retention risk for each NEO.
Based on publicly available data in December 2019 when the compensation determinations for 2020 were made, our market capitalization was below the 25th percentile and our annual revenue was below the 50th percentile for this proxy peer group; our one-year total stockholder return was below the 25th percentile relative to the proxy peer group.
When conducting the market review, the compensation committee reviews each component of compensation in relation to certain percentiles of both the proxy peer group and the general industry group surveyed. Generally, the compensation committee targets at the 50th percentile each component of our NEOs total direct compensation (base salary plus target performance-based non-equity incentive compensation plus target long-term equity incentive compensation). However, the compensation committee may set any element of an NEO’s total direct compensation above or below the 50th percentile based on factors such as an NEO’s skill level, performance, seniority, workload, span of control, retention considerations and institutional knowledge. We believe compensation provided to our NEOs, vis-à-vis the proxy peer group and the general industry group companies surveyed, is appropriate given our performance record and the tenure of our executive officers. Actual performance above or below each of the established targets for our performance-based non-equity incentive compensation and long-term equity incentive compensation results in actual compensation that may be higher or lower than the target percentiles. See discussion for results of non-equity incentive compensation and long-term equity compensation under “Annual Performance-Based Non-Equity Incentive Compensation” on page 31 and “Long-Term Equity Incentive Compensation” on page 35.
ELEMENTS OF EXECUTIVE COMPENSATION:
The main elements of our executive compensation program are base salary, an annual performance-based non-equity incentive and a long-term equity incentive, the majority of which is performance-based.
Base Salary
While a meaningful portion of our NEOs and other executive officers’ compensation is contingent upon meeting specified performance targets, we pay our executive officers a base salary as fixed compensation for their time, efforts and commitments throughout the year. To aid in attracting and retaining qualified executive officers, the compensation committee seeks to keep base salary competitive by considering, among other factors, the nature and responsibility of the position and, to the extent available, salary norms for persons in comparable positions at our proxy peer group; the expertise of the individual; and the competitiveness in the market for the executive officer’s services.
Annual Performance-Based Non-Equity Incentive CompensationThe purpose of performance-based non-equity incentive compensation is to provide an incentive to our NEOs and other executive officers to contribute to our annual growth and profitability objectives and to retain such executive officers. The compensation committee focuses on matching rewards with results and encourages executive officers to make significant contributions toward our financial results by providing a basic reward for reaching threshold expectations, plus an upside for reaching our aspirational goals.
Overview. At the beginning of 2020, consistent with its precedent approach, the compensation committee set performance targets for consolidated and segment revenue and EBT related to payout of our annual performance-based non-equity incentive compensation. With the onset of the global pandemic in the first quarter of 2020, these performance targets quickly became unattainable as every facet of our business from consumer lending to coalition and short-term loyalty programs were impacted by the sudden and complete global shutdown of travel and commercial activity. By contrast, efforts of executive officers and associates across the enterprise ramped up—responding immediately to shift 95% of the workforce to work-from-home while simultaneously implementing forbearance programs to meet the needs of consumer accountholders stressed by widespread furloughs and layoffs; expanding hours of customer care operations; working with customers to shift marketing and program timing; and adding reward options for collectors. As pandemic restrictions endured and supply chains were strained, efforts ensued to create targeted programs and strategies with our clients to drive both in-store and ecommerce sales. Quick adaptation to pandemic-related challenges resulted in successful achievement of significant sequential improvement in our financial results from the low point experienced in the second quarter of 2020 through the fourth quarter of 2020.
In addition, 2020 represented a year where Alliance Data planned to undertake significant change through strategic investments in innovation and additional capabilities to improve our competitive positioning and consumer accountholder experience. Those initiatives continued and through the perseverance of both the executive
management team and associates, were achieved, including launch of the Enhanced Digital Suite℠, the selection of Fiserv for a core processing platform and launch of the two-year transition process, the acquisition of Bread® and the offering of new Comenity-branded financial products such as the cash-back Comenity Card℠.
In light of the efforts of executive management and associates across the enterprise to respond to the unprecedented challenges presented by the pandemic, the compensation committee undertook a comprehensive review of market conditions following the completion of the 2020 annual meeting of stockholders and seating of the new board chair and chair of the compensation committee. Further, our new CEO introduced the balanced scorecard approach to annual incentive compensation utilized at peer financial industry companies. To achieve equitable compensation for the extensive effort by associates across the enterprise to respond to the COVID-19 business environment, the compensation committee, together with executive management and relevant business leaders, designed a set of five balanced scorecards to provide greater ownership across a range of metrics and clarity in a time of significant disruption. The five sets of balanced scorecards encompass a selection of both financial and non-financial metrics keyed to up to three categories, including stockholders, customers and associates, as appropriate, for each of the corporate, Card Services, banking, AIR MILES® and BrandLoyalty portions of the business. The inclusion of non-financial targets allows us to equally prioritize initiatives of significance in value-creation, for example, risk, control and regulatory matters, customer and client relationships and human capital management. Only two of these balanced scorecards apply to our NEOs as discussed below.
Based on the unique conditions experienced in 2020 and the continuing uncertainties in macroeconomic conditions and forecasts, in mid-August 2020, the compensation committee, in consultation with its external executive compensation consultant, took the unique step of establishing a new annual performance-based non-equity incentive compensation plan in the form of balanced scorecards, setting threshold and/or target goals at levels it considered appropriately rigorous. At the time of establishing these new plans, the compensation committee was aware that the performance-based long-term equity incentive compensation measured on EBT would be forfeited for failure to achieve the targets established in early 2020 that were identical to those originally established in the annual performance-based non-equity incentive compensation plan being replaced. As discussed above, the compensation committee does not believe that the targets set for each of these metrics promote unnecessary or excessive risk-taking that is reasonably likely to have a material adverse effect on Alliance Data.
Balanced Scorecards. The tables below set forth the various metrics established for the corporate and Card Services balanced scorecards on which Messrs. King and Motes and Ms. McConnaughey were compensated. Messrs. Andretta and Horn and Ms. Greer are discussed in “Other Non-equity Incentive Plan Arrangements for 2020” below.
For each balanced scorecard performance metric, measurement was either pass/fail or based on threshold and target levels of achievement. Payout for the balanced scorecards provides for equal weighting of each metric within the scorecard categories of stockholder, customer and associate, as applicable, with the results for the categories weighted as shown in the tables. For those metrics that were not simply pass/fail, the compensation committee established threshold and target levels with the target equating to the 100% payout level and no payout exceeding 100% even in the case of significant overperformance. Threshold refers to the minimum acceptable level of performance and target is the desired level of performance. For performance that exceeds the threshold but does not meet the target, payout increases ratably until the target is reached. For each scorecard metric, payout is determined by assigning scores, either a 0, 0.75 or 1, assigned for performance, multiplied by the category weighting and added together for total payout percentage. Performance below the established threshold and ratings of “fail” received a score of 0; performance that met or exceeded the threshold, but did not meet the target, received a score along the range from 0.75 to 0.99; and performance that met or exceeded the target and ratings of “pass” received a score of 1. Establishing a maximum payout amount under our non-equity incentive plan deters excessive risk-taking, while having an equitable payout amount that can be earned at a defined performance threshold encourages goal attainment. No payout is made for performance below the minimum threshold.
2020 CORPORATE BALANCED SCORECARD |
|
Metric | Achievement | Description |
STOCKHOLDER | EBT (Consolidated) |  | 80% | $394.5mm; positive result exceeded target by approximately 20%.
|
Corporate Operating Expenses | | Reduce corporate operating expenses, excluding strategic transaction costs, to $90 million. |
Corporate Liquidity | | Maintain access to capital markets and availability of lending facilities to effectively operate the business in difficult macroeconomic conditions. |
Performance Against Lender Covenant Requirements | | Manage corporate debt levels in line with financial covenant requirements in difficult macroeconomic conditions. |
Maintain ABS Funding | | Manage funding requirements and maintenance of financial covenant thresholds for asset-backed securities (ABS) facilities. |
ASSOCIATE | Associate Culture (Enterprise) | | 20% | Improve aggregate % favorable rating for 18 metrics measured in annual associate survey over 2019 regarding communication, recognition, career development, enablement, work/life balance and strategy. |
Turnover (Enterprise) | | Improve proportion of associates electing to leave the company both voluntarily and involuntarily over 2019, with maximum threshold of 27%. |
Hiring Efficiency (Enterprise) | | Improve proportion of open positions filled by internal hires over 2019, excluding certain volume hiring positions, with minimum threshold of 33%. |
Diversity, Equity & Inclusion (DE&I) (Enterprise) | | Complete initial discovery phase and develop multi-stage plan for DE&I efforts while advancing existing initiatives. |
2020 CARD SERVICES BALANCED SCORECARD |
|
Metric | Achievement | Description |
STOCKHOLDER | EBT (Card Services) | | 50% | $501.5mm; positive result exceeded target by approximately 20%. |
Revenue (Card Services) | | $3,756.5mm; positive result exceeded threshold by approximately 5%. |
Fraud Loss Management | | $140.8mm; reduction in fraud losses from 2019 of greater than 25%, exceeding target by approximately 15%. |
Issue Identification and Remediation | | Deficiencies identified through self-assessment, internal audit, regulatory review, accountholder complaints or otherwise to be a minimum 70% via self-assessment and 85% resolved within policy timelines. |
Net Charge-Offs | | $1,083.3mm; lower result exceeded target by approximately 13%. |
Audit Performance | | Number of internal audits resulting in a major or elevated finding, with threshold and target levels approximating 10% and 5%, respectively, annually. |
Operating Expense Ratio | | 9.3% result exceeded target of 9.4%. |
CUSTOMER | SLA Achievement | | 35% | Meet or exceed certain customer care center response-time service levels at least 85% of the time. |
Complaint Management | | Operate at or below 750 complaints per million active consumer credit accounts at least 85% of the time. |
ASSOCIATE | Associate Culture (Card Services) | | 15% | For Card Services segment, improve aggregate % favorable rating for 18 metrics measured in annual associate survey over 2019 regarding communication, recognition, career development, enablement, work/life balance and strategy. |
Turnover (Card Services) | | For Card Services segment, improve proportion of associates electing to leave the company both voluntarily and involuntarily over 2019, with maximum threshold of 27%. |
Hiring Efficiency (Card Services) | | For Card Services segment, improve proportion of open positions filled by internal hires over 2019, excluding certain volume hiring positions, with minimum threshold of 33%. |
Diversity, Equity & Inclusion (DE&I) (Enterprise) | | Complete initial discovery phase and develop multi-stage plan for DE&I efforts while advancing existing initiatives. |
2020 Balanced Scorecard Results. Metrics in the corporate balanced scorecard were met or exceeded in each case, resulting in 100% achievement as shown above. The corporate balanced scorecard applied to each of Messrs. King and Motes. Metrics in the Card Services balanced scorecard were met or exceeded in each case other than revenue, which fell between the established threshold and target, calculating to greater than 98% achievement to which the compensation committee applied its discretion to increase payout to 100% for this population based on its view that revenue was negatively impacted by certain regulatory changes to promotional interest plans as well as continuing macroeconomic factors affecting late fee revenue and waivers. The Card Services balanced scorecard applied to Ms. McConnaughey.
Other Non-equity Incentive Plan Arrangements for 2020. For Mr. Andretta, who was appointed president and CEO effective February 3, 2020, annual non-equity incentive plan compensation for 2020 remains as set forth in his offer letter, with a target payout percentage at 150% of annualized base salary with 20% linked to strategic and operational objectives established by the board and 80% at the board’s discretion in early 2021. For Ms. Greer, who joined us in June 2020, annual non-equity incentive plan compensation for 2020 was guaranteed by her offer letter discussed in more detail below under the heading “Other Plans or Agreements Governing Executive Compensation – Offer Letter to Valerie E. Greer,” with a target payout percentage at 150% of annualized base salary. Mr. Horn, who in 2018 first announced his intention to retire from the company in 2019 and served as acting CEO beginning in November 2019 and through Mr. Andretta’s appointment, continues to serve as executive vice president and senior advisor with a focus on international operations, operating efficiencies and strategic initiatives. In 2020, the compensation committee provided a separate annual non-equity incentive plan for Mr. Horn with a payout of up to a maximum of 200% of his base salary at the compensation committee’s discretion in light of the fact that Mr. Horn received no long-term equity incentive compensation in 2019 or 2020.
The compensation committee approved payout of $1,300,000 in annual performance-based incentive compensation for Mr. Horn based on his contributions leading the LoyaltyOne® segment in re-positioning their programs to respond to the pandemic, including efforts to streamline current and future reward inventory sourcing at BrandLoyalty as well as adapting rewards available through the AIR MILES Reward Program to items focused on home fitness and entertainment in lieu of travel. Further, the compensation committee recognized Mr. Horn’s valuable contributions to strategic initiatives, including the acquisition of Bread.
For Mr. Andretta, the board of directors approved a 100% payout with respect to both of his annual performance-based non-equity incentive compensation plan components based on his performance guiding the company through continuing pandemic constraints while building the framework for future success through the addition and recognition of future leadership, protection of the balance sheet, maintenance of appropriate liquidity and capital ratios and expansion of capabilities and product offerings.
Performance Measurement and Awards Granted for Fiscal Year Ended 2020. The compensation committee, and the board of directors with respect to the CEO, approves the performance goals and incentive levels for each of our NEOs and assigns a relative weighting to each performance measure under our non-equity incentive compensation plan. The following tables set forth the individual calculations for the non-equity incentive plan compensation payouts for the 2020 performance year. NEOs typically have a target payout amount that approximates a percentage of his or her annualized base salary. As described above, payout of annual performance-based non-equity incentive plan compensation for our NEOs is generally contingent upon meeting segment-specific and/or consolidated targets, which this year are linked to the applicable balanced scorecard. Target amounts for non-equity incentive plan compensation subject to the applicable balanced scorecard for each of Mr. King, Ms. McConnaughey and Mr. Motes are set at 100% of their respective base salaries.
The target non-equity incentive plan compensation for each of Ralph J. Andretta, Valerie E. Greer, Charles L. Horn, Timothy P. King, Tammy M. McConnaughey and Joseph L. Motes III is set forth in the first column of the following table. The actual non-equity incentive plan payout percentage, prior to the adjustments to such payouts discussed below, are set forth in the middle column of the following table.
| | Target Non-Equity Incentive Plan Compensation | Weighted Payout | Achieved Non-Equity Incentive Plan Compensation |
| Ralph J. Andretta | $ | 1,485,000 | Not Applicable | $ | 1,485,000 |
| Valerie E. Greer | $ | 900,000 | Not Applicable | $ | 900,000 |
| Charles L. Horn | | Not Applicable | Not Applicable | $ | 1,300,000 |
| Timothy P. King | $ | 525,000 | 100% | $ | 525,000 |
| Tammy M. McConnaughey | $ | 439,430 | 100% | $ | 439,430 |
| Joseph L. Motes III | $ | 500,000 | 100% | $ | 500,000 |
Discretionary Adjustments. Our CEO may recommend to the compensation committee adjustments with respect to each payout of performance-based non-equity incentive compensation (other than with respect to CEO’s own payment amount). The compensation committee may adjust the payout of performance-based non-equity incentive compensation of the executive officers other than the CEO, and the board of directors may adjust the CEO's payout
of performance-based non-equity incentive compensation, as well as that of any other executive officer. In determining whether and to what extent any such discretionary adjustments will be made, the compensation committee or board of directors, as applicable, typically considers the value provided by the relevant executive officer, as demonstrated by the challenges addressed and particular expertise required of such executive officer during the fiscal year. For 2020, both the compensation committee and the board of directors, as applicable, made adjustments to the performance-based non-equity incentive compensation for certain of our current named executive officers. For each of Ms. McConnaughey and Mr. Motes, the compensation committee elected for certain discretionary increases of approximately 10-15% to their balanced scorecard payouts. For Ms. McConnaughey, the compensation committee recognized her results in the areas of fraud reduction and management of credit losses. For Mr. Motes, the compensation committee recognized his leadership, strategy and advisory roles during the executive transitions, particularly with regard to guidance for new executives in leadership roles in a public company, in addition to the assumption of new responsibilities as chief administrative officer. For Mr. Andretta, the board of directors elected for a 50% increase to his annual performance-based non-equity incentive compensation payout based on his performance discussed above in guiding the company through continuing pandemic constraints while building the framework for future success through the addition and recognition of future leadership, protection of the balance sheet, maintenance of appropriate liquidity and capital ratios and expansion of capabilities and product offerings.
Looking Forward: Fiscal Year 2021 Annual Non-Equity Incentive Compensation. The compensation committee plans to continue the utilization of balanced scorecards in 2021, with all NEOs, other than Mr. Horn, for whomPerry Beberman (who joined the opportunity to earn up to a maximum of 200% of his base salary at the discretion of the compensation committee continues.
Long-Term Equity Incentive CompensationWe grant long-term equity incentive awards to encourage retention and foster a focus on long-term results, as well as to align the interests of our NEOs and other executive officers with those of our stockholders. In granting these awards, the compensation committee may establish such restrictions, performance measures and targets as it deems appropriate. Awards of long-term equity incentive compensation pay out only upon attainment of a threshold level of pre-determined performance targets, which for 2020 included EBT and a performance-based award with market conditions, rTSR, as well as continued employment of the executive officer.
In determining the size of long-term equity incentive awards, the compensation committee generally also considers, among other factors, the value of total direct compensation for comparable positions at our proxy peer group, company and individual performance against strategic plans, the number and value of long-term equity incentive awards previously granted, the allocation of overall equity awards attributed to our executive officers relative to all equity awards and the relative proportion of long-term incentives within the total direct compensation mix.
In 2020, we granted long-term equity incentive compensation to our senior management and executive officers, including our NEOs, pursuant to our 2015 Omnibus Incentive Plan and 2020 Omnibus Incentive Plan. As permitted by each plan, the board of directors has delegated its authority under the plan to the compensation committee, except for purposes of awards to the CEO.
Terms of Awards. After taking into consideration the long-term incentive practicesCompany in the marketplace, we believe that an equity mix of performance-based restricted stock units and time-based restricted stock units provides a conservative and balanced approach. The portion grantedJuly 2021), are in time-based restricted stock units is intended to provide not only some stability in our equity program and increase retention, but also to promote direct alignment with stockholders through our executives’ stock holdings. The portion granted in performance-based restricted stock units, whose vesting criteria are tied to selected components of our financial performance, is intended to focus and incentivize our executives to deliver exceptional performance. Performance-based restricted stock unit grants may be subject to both achievement of performance criteria as well as time-based restrictions to vest. For all grants, the recipient must be employed by us at the time of vesting to receive the stock.
The 45-day average fair market value of the company’s common stock as quoted on the NYSE as of the date of grant is utilized as the basis for determining the specific number of either time-based or performance-based restricted stock unit awards to be granted.
Awards Granted During 2020. In 2020, consistentcompliance with the objective of placing a significant portion ofstock ownership guidelines outlined above. For information regarding the overall target compensationapplicable guidelines and requirements for our executive officers “at risk” as discussed above, our board ofnon-employee directors, see “Director Compensation—Director Stock Ownership Guidelines and compensation committee approved equity grants for Messrs. Andretta, King and Motes, which were awarded on February 18, 2020. For Mr. Andretta, who joined us in February 2020, performance-based restricted stock units were based on multipleHolding Requirements” below.
Perquisites
$513M)
