UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
Light & Wonder, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)14a-6(i)(1) and 0-110-11.
![[MISSING IMAGE: lg_lightwonder-bwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-053553/lg_lightwonder-bwlr.jpg){kind=small}
![[MISSING IMAGE: lg_lighterwondertm-bwlr.jpg]](/files/DEF 14A/0001104659-23-053352/lg_lighterwondertm-bwlr.jpg)
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of Light & Wonder, Inc. to be held at 2:303:00 p.m. PDT, with access beginning at 2:0045 p.m., on Wednesday, June 8, 2022.7, 2023. This year’s annual meeting will be a virtual meeting of stockholders. We have designed the format of the virtual annual meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation. In order to attend the meeting, you must pre-register at http://viewproxy.com/LightWonderInc/2022/ by June 7, 2022 at 11:59 p.m. EDT. You will be able to attend the annual meeting and vote during the annual meeting via a live webcast by visiting http:https://viewproxy.com/LightWonderInc/2022/vm.www.virtualshareholdermeeting.com/LNW2023. You will need your 16-digit control number included on your proxy card in order to submit questions and vote during the Annual Meeting.
At the meeting, we will be electing nineten members of our Board of Directors andDirectors. We will also be conducting an advisory vote to approve the compensation of our named executive officer compensation. Weofficers and an advisory vote on the frequency of future votes to approve the compensation of our named executive officers. Finally, we will also be asking our stockholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. These matters are described in detail in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you plan to attend the annual meeting, we encourage you to vote and submit your proxy in advance of the meeting using one of the advance voting methods described in the accompanying materials.
We look forward to hosting you at the annual meeting.
![[MISSING IMAGE: sg_barrylcottle-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-053553/sg_barrylcottle-bw.jpg) Sincerely, ![[MISSING IMAGE: sg_matthewrwilson-bw.jpg]](/files/DEF 14A/0001104659-23-053352/sg_matthewrwilson-bw.jpg) Matthew R. Wilson President and Chief Executive Officer | |||||
The accompanying Proxy Statement is dated April 29, 2022,May 1, 2023, and is first being made available to our stockholders on or about April 29, 2022.May 1, 2023.
LIGHT & WONDER, INC.
6601 Bermuda Road
Las Vegas, NV 89119
6601 Bermuda Road
Las Vegas, NV 89119
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
OF STOCKHOLDERS
Notice is hereby given that the annual meeting of stockholders of Light & Wonder, Inc. (the “Company”) will be held at 2:303:00 p.m. PDT on Wednesday, June 8, 2022,7, 2023, solely online via the Internet via a live webcast, for the following purposes:
1.
To elect nineten members of the Company’s Board of Directors to serve for the ensuing year and until their respective successors are duly elected and qualified.
2.
To approve, on an advisory basis, the compensation of the Company’s named executive officers.
3.
To indicate, on an advisory basis, whether the advisory vote on the compensation of the Company’s named executive officers should take place every year, every two years or every three years.
4.
To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.2023.
5.
To consider and act upon any other matter that may properly come before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 11, 2022May 1, 2023 (the “record date”) are entitled to receive notice of and to vote at the meeting and any adjournment thereof.
Access to the Virtual Meeting. The virtual meeting will begin promptly at 2:303:00 p.m. PDT. Online access to the virtual meeting will open 3015 minutes prior to the start of the annual meeting to allow time for attendees to log in and test their device’s audio system.
Log-in Instructions. In orderYou will be able to attend the annual meeting you must pre-register at and vote during the annual meeting via a live webcast by visiting http://viewproxy.com/LightWonderInc/2022/ by June 7, 2022 at 11:www.virtualshareholdermeeting.com/LNW2023. You will need your 16-digit control number included on your proxy card in order to submit questions and vote during the Annual Meeting.
Submitting Questions in Advance. You may also submit questions in advance of the meeting until 8:59 p.m. EDT.PDT on June 6, 2023 by going to www.proxyvote.com and logging in with your control number.
Voting Prior to or at the Annual Meeting. An online portal is available to stockholders at www.proxyvote.com where stockholders of record as of the record date can view and download our proxy materials and 20212022 Annual Report and vote their shares in advance of the annual meeting. Stockholders of record as of the record date may vote their shares during the annual meeting (up until the closing of the polls) by following the instructions provided during the meeting.
Technical Assistance. Technical assistance is available by e-mailing virtualmeeting@viewproxy.com or dialing the toll-free number 1-866-612-8937.that will be provided on the log-in page of the meeting.
Whether or not you plan to attend the annual meeting, the Company urges stockholders of record as of the record date to vote and submit their proxy in advance of the meeting using one of the advance voting methods (see page 1 of the accompanying Proxy Statement for additional details).
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be held on June8, 2022:7, 2023:
Annual Meeting of Stockholders to be held on June
The Proxy Statement and 20212022 Annual Report will be available on or
about April 29, 2022
May 1, 2023 through the Investors link on our website at
www.lnw.com or through www.proxyvote.com.
about
May 1, 2023 through the Investors link on our website at
www.lnw.com or through www.proxyvote.com.
| | Dated: | | | By Order of the Board of Directors | |
| | | | | ![[MISSING IMAGE: sg_constancepjames-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-053553/sg_constancepjames-bw.jpg) ![[MISSING IMAGE: sg_pjames-bw.jpg]](/files/DEF 14A/0001104659-23-053352/sg_pjames-bw.jpg) | |
| | | | | Constance P. James Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary | |
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i
LIGHT & WONDER, INC.
6601 Bermuda Road
Las Vegas, NV 89119
6601 Bermuda Road
Las Vegas, NV 89119
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Light & Wonder, Inc. (“Light & Wonder,” the “Company,” “we” or “us”) of proxies to be voted at the annual meeting of stockholders to be held at 2:303:00 p.m. PDT on Wednesday, June 8, 2022,7, 2023, solely online via the Internet via a live webcast, and any adjournment or postponement of the meeting, for the purposes set forth in the Notice of Annual Meeting of Stockholders.
We expect our proxy materials, including this Proxy Statement and our 20212022 Annual Report, to first be made available to stockholders on or about April 29, 2022May 1, 2023 through the Investors link on our website at www.lnw.com/investors/ or through www.proxyvote.com. In accordance with the rules of the Securities and Exchange Commission (“SEC”), most stockholders will not receive printed copies of these proxy materials unless they request them. Instead, most stockholders will receive by mail a “Notice of Internet Availability of Proxy Materials” that contains instructions as to how they can view our materials online, how they can request copies be sent to them by mail or electronically by email and how they can vote online (the “Notice”).
Stockholders Entitled to Vote
All stockholders of record at the close of business on April 11, 202210, 2023 are entitled to vote at the meeting. At the close of business on April 11, 2022, 97,737,78410, 2023, 91,180,804 shares of common stock were outstanding. Each share is entitled to one vote on all matters that properly come before the meeting.
Voting Procedures
You may vote your shares by proxy without attending the meeting. You may vote your shares by proxy over the Internet by following the instructions provided in the Notice, or, if you receive printed proxy materials, you can also vote by mail or telephone pursuant to instructions provided on the proxy card. If you are voting over the Internet or by telephone, you will need to provide the control number that is printed on the Notice or proxy card that you receive.
If you are the record holder of your shares, you may also vote your shares during the annual meeting (up until the closing of the polls) by following the instructions provided during the annual meeting. If you are not the record holder of your shares (i.e., they are held in “street” name by a broker, bank or other nominee), you must first obtain a proxy issued in your name from the record holder giving you the right to vote the shares at the meeting.
Meeting Format
The 20222023 annual meeting of stockholders will be a virtual meeting format as holding an in-person meeting may present an unacceptable risk to health and safety.meeting. Stockholders will only be able to access the annual meeting virtually. The Company has designed the format of the virtual annual meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation. More information about the virtual annual meeting, including how to participate, is provided here in this Proxy Statement and on www.lnw.com.
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Voting Matters
Stockholders are being asked to vote on the following matters at the annual meeting:
| Proposal | | | Board’s Recommendation | |
Proposal 1: Election of Directors (page 4) | | | FOR each Nominee | |
| The Board and the Nominating and Corporate Governance Committee believe that the | | | | |
Proposal 2: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers (page 59) | | | FOR | |
| The Company has designed its executive compensation program to attract and retain executive talent, foster excellent business performance and align compensation with the long-term interests of our stockholders. The Board and the Compensation Committee value stockholders’ opinions and will take into account the outcome of the advisory vote when considering future executive compensation decisions. | | | | |
Proposal 3: Indication, on an advisory basis, whether the advisory vote on the compensation of the Company’s named executive officers should take place every year, every two years or every three years (page 61) | | | 1 Year | |
| The Company wishes to offer our stockholders the opportunity to provide the Company’s Compensation Committee with annual feedback about the appropriateness of the compensation of our named executive officers. | | | | |
Proposal 4: Ratification of the Appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s Independent Registered Public Accounting Firm (page | | | FOR | |
| The Audit Committee has appointed Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, | | | | |
All valid proxies received prior to the meeting will be voted in accordance with the instructions specified by the stockholder. If a proxy card is returned without instructions, the persons named as proxy holders on your proxy card will vote in accordance with the above recommendations of the Board.
With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
Changing Your Vote
A stockholder may revoke a proxy at any time prior to its being voted by delivering written notice to the Corporate Secretary of the Company, by delivering a properly executed later-dated proxy (including over the Internet or by telephone), or by voting at the meeting.
Quorum
The presence, including by proxy (regardless of whether the proxy has authority to vote on all matters), of the holders of a majority of the shares entitled to vote at the meeting constitutes a quorum for the transaction of business.
Vote Required
Assuming a quorum is present, directors will be elected (Proposal 1) by a plurality of the votes cast in person or by proxy at the meeting. The outcome of the vote, on an advisory basis, on the frequency of future
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advisory votes on the compensation of the Company’s named executive officers (Proposal 3) will be the frequency receiving the highest number of affirmative votes cast.
Each of the other proposals requires the affirmative vote of a majority of the shares entitled to vote represented at the meeting.
Effect of Withheld Votes or Abstentions
If you “WITHHOLD” your vote in the election of directors, or “ABSTAIN” from voting (rather than vote “FOR” one of the three choices) on the frequency of future advisory votes on compensation of executive officers, or “ABSTAIN” (rather than vote “FOR” or “AGAINST”) with respect to any other proposal, your shares will count as present for purposes of determining
whether a quorum is present. WithholdingWitholding your vote with respect to any of the director nominees will have no effect on the outcome of the election of directors (Proposal 1), and abstaining. Abstaining will have no effect on the outcome of the vote, on an advisory basis, on the frequency of future advisory votes on the compensation of the Company’s named executive officers (Proposal 3). Abstaining will have the effect of a vote against the other proposals (Proposals 2 and 3)4).
Effect of Broker Non-Votes
A broker “non-vote” occurs when a broker or nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power on that item and has not received specific instructions from the beneficial owner. If any broker “non-votes” occur at the meeting, the broker “non-votes” will count for purposes of determining whether a quorum is present, will have no effect on the outcome of the election of directors (Proposal 1) and will have the effect of a vote against the advisory vote on approval of named executive officer compensation (Proposal 2). A broker or other nominee holding shares for a beneficial owner may not vote these shares with respect to the election of directors (Proposal 1) or, the advisory vote on approval of named executive officer compensation (Proposal 2). or indication, on an advisory basis, of the frequency of future advisory approvals of named executive officer compensation (Proposal 3) without specific instructions from the beneficial owner as to how to vote with respect to such proposals. Brokers and other nominees will have discretionary voting power to vote without instructions from the beneficial owner on the ratification of the appointment of our independent registered public accounting firm (Proposal 3)4) and, accordingly, your shares may be voted by your broker or nominee on Proposal 34 without your instructions.
Our Relationship with SciPlay Corporation
On May 7, 2019, SciPlay Corporation (“SciPlay”) completed an initial public offering (the “IPO”) of an 18.0% minority interest in our Social gaming business, after giving effect to the underwriters’ partial exercise of their over-allotment option on June 4, 2019. SciPlay has two classes of common stock: Class A common stock, which is traded on The NASDAQ Stock Market (“NASDAQ”) under the symbol “SCPL”, and Class B common stock. As of December 31, 2021,2022, we owned all of the outstanding Class B common stock, which represents approximately 80.8%82.4% of SciPlay’s total outstanding shares of common stock and approximately 97.7%97.9% of the combined voting power of both classes of SciPlay’s outstanding common stock. Accordingly, we continue to control shares representing a majority of the combined voting power in SciPlay and continue to have a controlling financial interest in SciPlay subsequent to the IPO.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Board is elected by our stockholders to oversee the management of the business and affairs of the Company. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved for or shared with stockholders. The Board appoints our executives, who are charged with conducting the business and affairs of the Company, subject to oversight by the Board.
Nominees for Election
The Board has nominated for election as a director to the Board the nineten persons named below to serve for a one-year term until the next annual meeting of stockholders of the Company and until their successors have been duly elected and qualified or until their earlier death, resignation or removal. Each of the director nominees served as a director during 20212022 and is presently serving as a director.
The reconstituted Board currently consists of all directors elected at the Company’s 20212022 annual meeting, other than Jack Markell,Barry L. Cottle, who resigned from the Board on December 31, 2021 in connection with his appointment asAugust 30, 2022, Matthew R. Wilson, who joined the U.S. Representative toBoard on October 10, 2022, and Stephen Morro, who joined the Organisation for Economic Co-operation and Development, with the rank of Ambassador.Board on August 9, 2022.
The Board recommends that you vote in favor of the election of each of the nominees named below as directors of the Company for the ensuing year, and the persons named as proxies on the enclosed proxy card will vote the proxies received by them for the election of each of the nominees unless otherwise specified on those proxy cards. All of the nominees have indicated a willingness to serve as directors. However, if any nominee becomes unavailable to serve before the election, proxies may be voted for a substitute nominee selected by the Board, or the Board may decide to reduce the number of directors.
The name, age (as of April 1, 2022)10, 2023), business experience and certain other information regarding each of the nominees for director are set forth below.
| Name | | Age | | Position with the Company | | Director Since | | | Age | | Position with the Company | | Director Since | | ||||||
| Jamie R. Odell | | 63 | | Director (Executive Chair) | | 2020 | | | 64 | | Director (Executive Chair) | | 2020 | | ||||||
| Barry L. Cottle | | 60 | | Director; President and Chief Executive Officer | | 2018 | | |||||||||||||
| Matthew R. Wilson | | 41 | | Director; President and Chief Executive Officer | | 2022 | | |||||||||||||
| Antonia Korsanos | | 52 | | Director (Executive Vice Chair) | | 2020 | | | 53 | | Director (Executive Vice Chair) | | 2020 | | ||||||
| Hamish R. McLennan | | 55 | | Director | | 2020 | | | 56 | | Director | | 2020 | | ||||||
| Stephen Morro | | 64 | | Director | | 2022 | | |||||||||||||
| Michael J. Regan | | 79 | | Director | | 2006 | | | 80 | | Director | | 2006 | | ||||||
| Virginia E. Shanks | | 61 | | Director | | 2021 | | | 62 | | Director | | 2021 | | ||||||
| Timothy Throsby | | 55 | | Director | | 2020 | | | 56 | | Director | | 2020 | | ||||||
| Maria T. Vullo | | 58 | | Director | | 2019 | | | 59 | | Director | | 2019 | | ||||||
| Kneeland C. Youngblood | | 66 | | Director | | 2018 | | | 67 | | Director | | 2018 | | ||||||
Jamie R. Odell has served as Executive Chair of the Board since September 2020 and has served as a consultant to the Company with the title of Special Advisor to the Chairman and CEO since May 2019. He previously served as Chief Executive Officer and Managing Director of Aristocrat Leisure Limited (“Aristocrat”), a global gaming content and technology company and mobile games publisher, from May 2009 to February 2017. Prior to joining Aristocrat, Mr. Odell held senior executive roles in the global beverage industry.
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Antonia Korsanos has served as Executive Vice Chair of the Board since September 2020 and has served as a consultant to the Company with the title of Advisor to the CEO since July 2019. Ms. Korsanos has also served as Chair of the Board of SciPlay Corporation since August 2022. Previously, Ms. Korsanos served as the Chief Financial Officer of Aristocrat from 2009 to 2018 and Company Secretary from 2011 to 2018. Prior to joining Aristocrat, Ms. Korsanos held senior leadership roles in the consumer goods industry, including at Goodman Fielder and Kellogg’s. Ms. Korsanos has served as a director of Treasury Wine Estates Limited since April 2020. Ms. Korsanos previously served as a director of Ardent Leisure Group Limited from September 2018 to June 2020, Crown Resorts Limited since from May 2018 to October 2021, and Webjet Limited from June 2018 to March 2021.
Hamish R. McLennan has served as Chairman of REA Group Limited, a $20 billion global digital advertising company, since April 2012, Chairman of HT&E Limited, a media and entertainment company operating radio, digital and outdoor businesses, since October 2018, and Chairman of Rugby Australia Limited, the governing body of rugby union in Australia, since May 2020. He has also served as Deputy Chairman of Magellan Financial Group, a globally-focused equity fund, since June 2019, where he has served as a non-executive director since March 2016, and as a director of Claim Central Consolidated, a global digital claims solutions business, since September 2020. Mr. McLennan is an experienced media and marketing executive, previously serving as Executive Chairman and Chief Executive Officer at Network Ten Holdings, an Australian entertainment and news content company, from 2013 to 2015, Executive Vice President for News Corporation, a global diversified media and information services company, in Sydney and New York from 2012 to 2013, and Global Chairman and Chief Executive Officer of Young & Rubicam, a division of WPP, the world’s largest communications services group, from 2006 to 2011.
Stephen Morro has served as a director of Dreamscape Entertainment Integrated Resorts since March 2023 and Ocean Resort Casino from June 2018 to January 2023. He served as an advisor to the Chief Executive Officer and North America management team of Aristocrat from March 2020 to January 2022 and as a non-executive director of Aristocrat from December 2010 to February 2020, including as Lead U.S. Director. From 1988 to 2010, Mr. Morro held various roles at International Game Technology PLC, including as President, North American Gaming Division, and Chief Operating Officer, from 2005 to 2007 and 2007 to 2008, respectively. Mr. Morro has over thirty years of experience in the highly regulated gaming industry as a supplier, operator and regulator.
Michael J. Regan is a former Vice Chairman and Chief Administrative Officer of KPMG LLP (“KPMG”) and was the lead audit partner for many Fortune 500 companies during his 40-year tenure with KPMG. Mr. Regan has been a member of the board of directors of Lifetime Brands, Inc., a global provider of kitchenware, tableware and other home products, since 2012.
Virginia E. Shanks most recently served as the Strategic Advisor for Penn National Gaming, Inc., a casino entertainment company, until December 2019, following its acquisition of Pinnacle Entertainment Inc. (“Pinnacle”). Previously, Ms. Shanks served as the Executive Vice President and Chief Administrative Officer of Pinnacle, a casino entertainment company from July 2013 to October 2018, and as Executive Vice President and Chief Marketing Officer from October 2010 to June 2013. At Pinnacle, Ms. Shanks was responsible for all company-wide marketing strategies and had oversight of food and beverage, hotel operations, guest service, information technology, and gaming operations. Prior to joining Pinnacle in 2010, Ms. Shanks was the Chief Marketing Officer for Multimedia Games, from 2008 to 2010, where she led product strategy, project management and investor relations. Before joining Multimedia Games, Ms. Shanks held senior executive positions for more than 25 years at Caesars Entertainment Corporation (predecessor to Caesars Entertainment, Inc.), where she was responsible for setting overall corporate brand strategy and overseeing sports and entertainment marketing, strategic alliances, consumer insights, retail, public relations and nationwide casino promotions. Ms. Shanks also serves on the board of directors for Altria Group, Inc. since 2017 and the board of trustees for EPR Properties since 2019. She has previously served on the board
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of directors for Global Gaming Women, an independent non-profit organization whose mission is to support, inspire and influence the development of women in the gaming industry, and Make-A-Wish Southern Nevada.
Timothy Throsby previously served as President of Barclays Corporate & International and Chief Executive of Barclays Corporate and Investment Bank from 2017 to 2019. Prior to joining Barclays, Mr. Throsby held senior executive roles with JPMorgan Chase Bank. He has had an extensive career in banking and private equity, working for Credit Suisse and Macquarie before joining Goldman Sachs in 1995 as a Managing Director and Co-Head of Equity Derivatives Asia and Japan. In 2002, he moved to Lehman
Brothers to head the Asia and Japan Equities Division, before relocating to New York in 2004 to run the global equity derivatives business, convertibles and risk arbitrage. In 2005, he became President of Citadel Asia and Japan an investment fund, where he ran their Asian business, located in Hong Kong.
Maria T. Vullo is the Chief Executive Officer of Vullo Advisory Services, PLLC, an advisory firm specializing in financial services regulatory consulting. Ms. Vullo also serves as Regulator-in-Residence at the Fintech Innovation Lab NYC and is an Adjunct Professor of Law at Fordham Law School. Ms. Vullo’s professional experience also includes serving as Vice Chairman and Chief Legal Officer of Emigrant Bank and Emigrant BanCorp, Inc., the largest privately held bank in the U.S., from September 2020 to June 2021, and as a Director from July 2019 to June 2021. In addition, Ms. Vullo previously served as the Superintendent of the New York State Department of Financial Services (the “DFS”) from 2016 to 2019 where she was responsible for the regulation of New York’s financial services industry. Ms. Vullo managed an agency staff of 1,400 employees with a budget in excess of $250 million. Prior to assuming the role of DFS Superintendent, Ms. Vullo was a litigation partner for 20 years with Paul, Weiss, Rifkind, Wharton & Garrison LLP. She is an experienced trial and appellate litigator in civil, criminal and regulatory matters. In addition, Ms. Vullo served as Executive Deputy Attorney General for Economic Justice in the New York State Attorney General’s Office. In that role, Ms. Vullo supervised the Bureaus of Investor Protection, Real Estate Finance, Antitrust, Consumer Protection, and Internet. Ms. Vullo was twice nominated by the New York State Commission on Judicial Nomination to be an Associate Judge of the New York Court of Appeals. Ms. Vullo has also served as a Director of DayForward Life Insurance Company sincefrom 2020 through March 2023, and as a member of numerous nonprofit boards where she has assumed leadership positions.
Kneeland C. Youngblood has served as a Founding Partner/ Chairman and CEO of Pharos Capital Group, LLC, a private equity firm that invests in the healthcare service sector since 1998. Mr. Youngblood serves on the board of Core Scientific (listed 2022). He has served on the board of six TPG Pace SPACs since 2015. Mr. Youngblood has previously served on the boards of Starwood Hotels & Resorts Worldwide, Inc. (from 2001 to 2012), The Gap, Inc. (from 2006 to 2012), and Burger King Holdings, Inc. (from 2004 to 2010) and Mallinckrodt Pharmaceuticals (2013-2022)(from 2013 to 2022). He also previously served as a trustee of Texas Teachers Retirement System, the Dallas Employee Retirement System and the Dallas Police and Fire Pension Fund. He is a Trustee of Caltech and a member of the Council on Foreign Relations.
Qualifications of Directors
Our directors are responsible for overseeing the management of the Company’s business and affairs, which requires highly skilled and experienced individuals. The Nominating and Corporate Governance Committee is responsible for evaluating and making recommendations to the Board concerning the appropriate size and needs of the Board with the objective of maintaining the necessary experience, skills and independence on the Board. Other than the minimum age requirement specified in the Nevada Revised Statutes, the Nominating and Corporate Governance Committee and the Board do not have specific qualifications that must be met by a candidate for director. However, the Nominating and Corporate Governance Committee and the Board believe that there are general qualifications that are applicable to all directors and other skills and experience that should be represented on the Board as a whole, but not necessarily by each director. The Nominating and Corporate Governance Committee and the Board consider the experience and qualifications of prospective directors individually and in the context of the Board’s overall composition, and make no distinction in the evaluation of nominees recommended by our directors or executive officers, third parties or our stockholders in accordance with the provisions contained in our Second Amended and Restated Bylaws.
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In its assessment of prospective directors, the Nominating and Corporate Governance Committee and the Board generally consider, among other factors, the individual’s character and integrity, experience, judgment, independence and ability to work collegially, as well as the ability of a potential nominee to devote the time and effort necessary to fulfill his or her responsibilities as a director. The Nominating and Corporate Governance Committee and the Board also assess particular qualifications, attributes, skills and experience that they believe are important to be represented on the Board as a whole, in light of the Company’s business. These include a high level of financial literacy, relevant chief executive officer or similar leadership experience, gaming, social and digital gaming industry experience, experience with global operations, exposure to the development and marketing of technology and consumer products and legal and regulatory experience.
As a matter of practice, the Nominating and Corporate Governance Committee and the Board also consider the diversity of the backgrounds and experience of prospective directors as well as their personal characteristics (e.g., gender, ethnicity, age) in evaluating, and making decisions regarding, Board composition, in order to facilitate Board deliberations that reflect a broad range of perspectives. The Nominating and Corporate Governance Committee and the Board believe that the Board is comprised of a diverse group of individuals.
The Nominating and Corporate Governance Committee and the Board believe that each nominee has valuable individual skills and experiences that, taken together, provide the variety and depth of knowledge, judgment and vision necessary for the effective oversight of the Company. As indicated in the foregoing biographies, the nominees have extensive experience in a variety of fields, including gaming, lottery, social and digital gaming (Messrs. Odell, Wilson and Cottle,Morro and Mses. Korsanos and Shanks), global operations (all directors), technology (Messrs. Odell, Wilson and CottleMorro and Mses. Korsanos and Shanks), consumer products and marketing (Messrs. Odell, CottleWilson, McLennan and McLennanMorro and Mses. Korsanos and Shanks), legal and regulatory (Mses.(Mr. Morro and Mses. Shanks and Vullo), investment and financial services (Messrs. Throsby and Youngblood and Mses. Korsanos and Vullo) and public accounting (Mr. Regan), each of which the Board believes provides valuable knowledge about important elements of our business. Most of our nominees have leadership experience at major companies or organizations that operate inside and outside the United States and/or experience on other companies’ boards, which provides an understanding of ways other companies address various business matters, strategies, corporate governance and other issues. As indicated in the foregoing biographies, the nominees have each demonstrated significant leadership skills, including as a chief executive officer (Messrs. Odell, Cottle,Wilson, McLennan and Throsby), chief operating officer (Mr. Morro), as a chief administrative officer of a major accounting firm (Mr. Regan), as a chief administrative officer of a casino entertainment company (Ms. Shanks), as chief financial officer (Ms. Korsanos) and as the Superintendent of the New York State Department of Financial Services (Ms. Vullo). Mr. Youngblood and Ms. Vullo have extensive public policy, government or regulatory experience, which can provide valuable insight into issues faced by companies in regulated industries such as the Company. Mr. CottleWilson has served as a senior executive and director of other gaming and entertainment companies, which service has given him deep knowledge of the Company and its businesses and directly relevant management experience. Mr. Youngblood has experience managing and advising a number of public and private companies. The Nominating and Corporate Governance Committee and the Board believe that these skills and experiences, together with their other qualities, qualify each nominee to serve as a director of the Company.
THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE NINETEN NOMINEES
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Corporate Governance
Overview. The Company is committed to good corporate governance, which we believe promotes the long-term interests of our stockholders and strengthens Board and management accountability. Highlights of our corporate governance structure and policies include:
| | Corporate Governance Highlights | | |||
| | • Annual election of all directors | | | • | |
| | • Seven independent director nominees | | | • Director and officer stock ownership guidelines | |
| | • Entirely independent Board committees (other than Compliance Committee) | | | • Executive compensation based on pay-for-performance philosophy | |
| | • Regular executive sessions of independent directors | | | • Cash and equity compensation clawback policy | |
| | • Separate Executive Chair and Chief Executive Officer roles | | | • Anti-hedging and anti-pledging policies | |
| | • Lead Independent Director | | | • Stockholder right to call special meetings | |
| | • Regular Board and committee self-evaluations | | | • Stockholder right to act by written consent | |
| | • Risk management oversight by the Board and committees | | | • Absence of an “anti-takeover” rights plan and other “anti-takeover” provisions | |
| | • Consideration of diversity in decisions regarding Board composition | | | • Board oversight of diversity, equity and inclusion initiatives | |
Director Independence. The Board has adopted Director Independence Guidelines as a basis for determining that individual directors are independent under the standards of the NASDAQ Stock Market.NASDAQ. This determination, which is made annually, helps assure the quality of the Board’s oversight of management and reduces the possibility of damaging conflicts of interest. Under these standards, a director will not qualify as independent if:
(1)
the director has been employed by the Company (or any subsidiary) at any time within the past three years, other than service as an interim executive officer for a period of less than one year;
(2)
the director has an immediate family member who has been employed as an executive officer of the Company (or any subsidiary) at any time within the past three years;
(3)
the director or an immediate family member of the director has accepted any compensation (including any political contribution to a director or family member) from the Company (or any subsidiary) in excess of $120,000 during any period of 12 consecutive months within the past three years other than (a) for Board or Board committee service, (b) in the case of the family member, as compensation for employment other than as an executive officer, (c) benefits under a tax-qualified retirement plan or non-discretionary compensation or (d) compensation for service as an interim executive officer for a period of less than one year;
(4)
the director or an immediate family member of the director is a partner, controlling shareholder or executive officer of an organization (including a charitable organization) that made payments to, or received payments from, the Company for property or services in the current year or in any of the past three years that exceed the greater of 5% of the recipient’s consolidated gross revenues or $200,000, other than (a) payments arising solely from investments in the Company’s securities or (b) payments under non-discretionary charitable contribution matching programs;
(5)
the director or an immediate family member of the director is employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the Company served on the compensation committee of such other entity; or
(6)
the director or an immediate family member of the director is a current partner of the Company’s
outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.
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In applying these standards, the Board determined that each of Messrs. McLennan, Morro, Regan, Throsby and Youngblood, and Mses. Shanks and Vullo, qualify as independent directors, and none has a business or other relationship that would interfere with the director’s exercise of independent judgment. Messrs. Odell and CottleWilson and Ms. Korsanos do not qualify as independent directors.
The full text of the Board’s Director Independence Guidelines, including information on the additional independence requirements applicable to Board committee members, can be accessed through the Investors — Corporate Governance link on our website at www.lnw.com.
Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines that outline the structure, role and functioning of the Board and address various governance matters including director independence, the Board selection process, length of Board service, Board meetings and executive sessions of independent directors, Board and committee performance evaluations and management succession planning. The full text of these guidelines can be accessed through the Investors Corporate Governance link on our website at www.lnw.com.
Board Leadership Structure. As described above, all of the director nominees qualify as independent directors, other than Mr. Odell, our Executive Chair, Mr. Cottle,Wilson, our President and Chief Executive Officer, and Ms. Korsanos, our Executive Vice Chair. The Audit, Compensation and Nominating and Corporate Governance Committees are comprised entirely of independent directors. The Compliance Committee is comprised of independent directors a non-independent director and an industry consultant. The Board has the flexibility to select the leadership structure that is most appropriate for the Company and its stockholders and has determined that the Company and its stockholders are best served by not having a formal policy regarding whether the same individual should serve as both Executive Chair of the Board and Chief Executive Officer. This approach allows the Board to elect the most qualified director as Executive Chair of the Board, while maintaining the ability to separate the Executive Chair of the Board and Chief Executive Officer roles when deemed appropriate. The Executive Chair of the Board and Chief Executive Officer roles are currently held by two different individuals.
Ms. Korsanos serves as the Executive Vice Chair of the Board. In 2021, the Board designated Mr. Youngblood as the lead independent director. The lead independent director responsibilities include presiding over regularly held executive sessions of independent directors, facilitating communication between the independent directors and the Chief Executive Officer and coordinating the activities of the independent directors. The lead independent director also provides assistance to the Board and the committees of the Board in their evaluations of management’s performance, and carries out other duties assigned by the Board from time to time in areas of governance and oversight.
The Board believes its current leadership structure is appropriate because it effectively allocates authority, responsibility and oversight between management and the independent members of the Board.
Board’s Role in Risk Oversight. The Board is responsible for overseeing management in the execution of its responsibilities and for assessing the Company’s approach to risk management, including ensuring that sufficiently robust risk and compliance policies and procedures are in place and are functioning properly to bring key risk and compliance matters to the Board’s attention. The Board exercises these responsibilities on an ongoing basis as part of its meetings and through the Board’s committees, each of which examines various components of enterprise risk as part of its responsibilities. An overall review of risk is inherent in the Board’s consideration of the Company’s strategies, such as product and market concentration, competition, acquisitions and divestitures and business transformation and other matters presented to the Board, including operational risks, such as information technology, cybersecurity, personnel and supply chain; financial risks, such as financial reporting, valuation, market and liquidity risks, as described below; and environmental, social and governance risks, such as sustainability, social responsibility, diversity, equity and inclusion, management structure and employee compensation. The Board’s role in risk oversight is consistent with the Company’s leadership structure, with the Chief Executive Officer and other members of senior management having responsibility for managing the Company’s risk exposure, and the Board and its committees providing oversight of those efforts.
The Company has implemented internal processes and controls to identify and manage risks and to communicate with the Board regarding risk management. These include an enterprise risk management
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program, regular internal management meetings that identify risks and discuss risk management, a Code of Business Conduct (the “Code”) (and related training), a strong ethics and compliance function that includes suitability reviews of customers, partners, vendors and other persons/entities with which the Company does business, regular cybersecurity, data flow and data privacy assessments, such as evaluation of network security measures and data protection safeguards, an internal and external audit process, such as testing controls, and internal approval and signature authority processes and legal department review of contracts. In connection with these processes and controls, management regularly communicates with the Board, Board committees and individual directors regarding identified risks and the management of these risks. Individual directors often communicate directly with senior management on matters relating to risk management. In particular, the Board committee chairs regularly communicate with members of senior management, including the Chief Executive Officer, to discuss potential risks in connection with accounting and audit matters, compensation matters, compliance matters and financing-related matters.
The Board committees, which meet regularly and report to the full Board, play significant roles in carrying out the Board’s risk oversight function. In particular, the Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process and accounting. The Audit Committee also oversees the internal audit function and regularly meets in private with both the Vice President of Internal Audit (who reports functionally to the Audit Committee and administratively to the Chief Financial Officer) and representatives of the Company’s independent auditing firm. The Compensation Committee evaluates risks associated with the Company’s compensation programs and succession planning for executive officers and other senior management and discusses with management procedures to identify and mitigate such risks. See “Executive Compensation — Compensation Discussion and Analysis — Compensation Program as it Relates to Risk” below. The Compliance Committee is active in overseeing the Company’s program with respect to compliance with the laws applicable to the Company’s business, including gaming laws, as well as compliance with the Code and related policies by employees, officers, directors and other representatives of the Company. In addition, the Compliance Committee oversees a compliance review process, which is designed to ensure that the vendors, consultants, customers and business partners of the Company are “suitable” or “qualified” as those terms are used by applicable gaming and lottery authorities, and regularly meets separately with the Senior Vice President, Chief Compliance Officer who(who reports functionally to the Chief Legal Officer and has a direct reporting line to the Compliance Committee.Committee). The Nominating and Corporate Governance Committee oversees risks related to composition, succession and structure of the Board.
Environmental, Social and Governance. The Company is committed to serving as a responsible corporate steward, purpose driven in actions, while operating with the best interest of employees, partners, players and communities. Building a diverse and inclusive workplace for all employees through equity and belonging is the foundation of the Company’s sustainable and thriving culture. Environmental, Social and Governance (“ESG”) priorities are an integral part of shaping the culture and underscores the Company’s commitment to be an employer of choice and a positive influence in the industry and the communities in which we operate. In 2021, the Company established aThe Company’s Corporate Social Responsibility program, and definedknown as Game Changers by Light & Wonder, has four main pillars that have been developed and integrated across the organization to include: Philanthropy; Diversity, Equity,Community (philanthropy & volunteerism), People (diversity, equity, inclusion and Inclusion; Environmental Sustainability;belonging), Planet (environmental sustainability) and Responsible Gaming. The full text of these guidelines can be accessed through the Investors Corporate Governance link on our website at www.lnw.comPlayer (responsible gaming).
Diversity, Equity and Inclusion. Diversity, equity and inclusion (“DEI”) are embedded in the Company’s five core values which are focused on fostering a highly inclusive culture and celebrating our unique and diverse global perspectives. The Company collaborates as one diverse and inclusive team with a passion for building new worlds of play that produce the extraordinary. The Company formulated a diversity, equity and inclusion strategic plan and established a DEI Council and a DEI Task Force.Force in 2020. The DEI Council oversees efforts by upholding accountability measures, ensuring continued commitment and momentum, and actively advocates for inclusive practices. The DEI Task Force manages and executes the workstreams with the intention to embed diversity, equity and inclusion into all human capital functions of the organization. The DEI Task Force consists of four workstreams which include: Culture, Retention & Belonging; Talent Acquisition;Acquisition & Recruiting; Learning & Development; and Pay Equity.Equitable Policies, Benefits and Rewards. In support of the Company’s core values, the Board asserts oversight and assumes responsibility to review the Company’s diversity, equity and inclusion policies and practices and compliance with its responsibilities as an equal opportunity employer. As the DEI Board
representative, Mr. Youngblood is part of the DEI Council and reports to the Board at each Board meeting on the Company’s progress and performance compared to
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diversity, equity and inclusion strategic plan, culture and other matters related to diversity, equity and inclusion for the Company. Light & Wonder ranked in the top 4 of 40 for the All-In-Diversity Data Survey, an annual benchmark for diversity, equality and inclusion across the global betting and gaming sectors. The Company is also committed to creating an inclusive global gaming industry as a founding member of the All-In Diversity Project, a non-profit organization creating tools to advance the industry’s diversity, inclusion and workplace equality. As a founding member, the Company will work collaboratively with additional partners to determine diversity, equity and inclusion expectations and standards for the gaming industry, while driving a conversation to establish global standards.
| Board Diversity Matrix (as of April 29, 2022) | | |||||||||||||||||||||||||||||||||||||||||||||||||
| Board Diversity Matrix (as of April 28, 2022) | Board Diversity Matrix (as of April 28, 2022) | | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total Number of Directors | | 9 | | | 10 | | ||||||||||||||||||||||||||||||||||||||||||||
| | | Female | | Male | | Non-Binary | | Not Disclosed | | | Female | | Male | | Non-Binary | | Not Disclosed | | ||||||||||||||||||||||||||||||||
| Part I: Gender Identity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
| Directors | | | | 3 | | | | | 6 | | | | | — | | | | | — | | | | | | 3 | | | | | 7 | | | | | — | | | | | — | | | ||||||||
| Part II: Demographic Background | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
| African American or Black | | | | — | | | | | 1 | | | | | — | | | | | — | | | | | | — | | | | | 1 | | | | | — | | | | | — | | | ||||||||
| Alaskan Native or Native American | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||
| Asian | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||
| Hispanic or Latinx | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||
| Native Hawaiian or Pacific Islander | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||
| White | | | | 2 | | | | | 3 | | | | | — | | | | | — | | | | | | 2 | | | | | 5 | | | | | — | | | | | — | | | ||||||||
| Two or More Races or Ethnicities | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | ||||||||
| LGBTQ+ | | — | | | — | | ||||||||||||||||||||||||||||||||||||||||||||
| Demographic background not disclosed | | 3 | | | 2 | | ||||||||||||||||||||||||||||||||||||||||||||
Board Meetings. The Board held a total of nineeight meetings during 2021,2022, including four at which executive sessions were held with no members of management present. During 2021,2022, all incumbent directors attended at least 75% of the total number of meetings of the Board and committees of the Board on which they served.
Board Committees. The Board has four standing committees: the Audit Committee; the Compensation Committee; the Compliance Committee; and the Nominating and Corporate Governance Committee. All committees are comprised solely of independent directors with the exception of the Compliance Committee, which is comprised of threefour independent directors as well as Mr. Cottle and Patricia Becker, a gaming industry consultant.
The Board has approved charters for each Board committee, which can be accessed through the Investors — Corporate Governance link on our website at www.lnw.com. The current membership of each committee is as shown in the table below.
| Audit Committee | | | Compensation Committee | | | Compliance Committee | | | Nominating and Corporate Governance Committee | | |
| Michael J. Regan (Chair) | | | Hamish R. McLennan (Chair) | | | Stephen Morro (Chair) | | | Kneeland C. Youngblood (Chair) | | |
| Timothy Throsby | | | Stephen Morro | | | Virginia Shanks | | | Hamish R. McLennan | | |
| Maria T. Vullo | | | Virginia Shanks | | | Timothy Throsby | | | Michael J. Regan | | |
| | | Kneeland C. Youngblood | | | Kneeland C. Youngblood | | | | |||
| | | | | | Patricia Becker | | | | |
Audit Committee. The Audit Committee is responsible for hiring the Company’s independent registered public accounting firm and for overseeing the accounting, auditing and financial reporting processes of the Company. In the course of performing its functions, the Audit Committee reviews, with management and our
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independent registered public accounting firm, the Company’s internal accounting controls, the financial statements, the report and recommendations of our independent registered public accounting firm, the scope of the audit and the qualifications and independence of the auditor. The Audit Committee also oversees the Company’s internal audit function. The Board has determined that each member of the Audit Committee is independent under the listing standards of the NASDAQ, Stock Market, the independence standards under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Company’s Director
Independence Guidelines, and that Mr. Regan qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K of the rules of the SEC. The Audit Committee held five meetings during 2021.2022.
Compensation Committee. The Compensation Committee sets the compensation of the President and Chief Executive Officer and other senior executives of the Company, administers the equity incentive plans and executive compensation programs of the Company, determines eligibility for, and awards under, such plans and programs and makes recommendations to the Board with regard to the adoption of new employee benefit plans and equity incentive plans and with respect to the compensation program for non-employee directors. The Board has determined that each member of the Compensation Committee is independent under the listing standards of the NASDAQ Stock Market and the Company’s Director Independence Guidelines and qualifies as a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act. The Compensation Committee held fivefour meetings during 2021.2022.
Compliance Committee. The Compliance Committee is responsible for providing oversight of the Company’s program with respect to compliance with laws and regulations applicable to the business of the Company, including gaming and anticorruption laws, and with respect to compliance with the Code by employees, officers, directors and other representatives of the Company. The Compliance Committee held four meetings during 2021.2022.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for identifying individuals who are qualified to become directors, recommending nominees for membership on the Board and on committees of the Board, reviewing and recommending corporate governance principles, procedures and practices and overseeing the annual self-assessments of the Board and its committees. The Board has determined that each member of the Nominating and Corporate Governance Committee is independent under the listing standards of the NASDAQ Stock Market and the Company’s Director Independence Guidelines. The Nominating and Corporate Governance Committee held four meetings during 2021.2022.
Other than the minimum age requirement specified in the Nevada Revised Statutes, the Nominating and Corporate Governance Committee does not have specific qualifications that must be met by a candidate for director and will consider individuals suggested as candidates by our stockholders in accordance with the provisions contained in our Second Amended and Restated Bylaws. Each notice of nomination submitted in this manner must contain the information specified in our Second Amended and Restated Bylaws, including, but not limited to, information with respect to the beneficial ownership of our common stock held by the proposing stockholder and any voting or similar agreement the proposing stockholder has entered into with respect to our common stock. To be timely, the notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of the prior year’s annual meeting of stockholders. If the annual meeting of stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the anniversary of the preceding year’s annual meeting of stockholders, notice by the stockholder, to be timely, must be received no earlier than the 120th day prior to the annual meeting of stockholders and no later than the later of (i) the 90th day prior to the annual meeting of stockholders and (ii) the tenth day following the day on which we publicly announce the date of the annual meeting of stockholders if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting.
Each notice of nomination should include the nominee’s qualifications and other relevant biographical information and provide confirmation of the nominee’s consent to serve as a director. The Nominating and Corporate Governance Committee will review the candidate’s background, experience and abilities, and the contributions the candidate can be expected to make to the collective functioning of the Board and the needs of the Board at the time. In prior years, candidates have been identified through recommendations made by directors, the President and Chief Executive Officer and third parties. The Nominating and Corporate
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Governance Committee anticipates that it would use these sources as well as stockholder recommendations to identify candidates in the future.
Stockholder Communications with Directors. Stockholders may communicate with the Board or an individual director by sending a letter to the Board or to a director’s attention care of the Corporate Secretary of the Company at Light & Wonder, Inc., 6601 Bermuda Road, Las Vegas, NV 89119. The Corporate Secretary
will open, log and deliver all such correspondence (other than advertisements, solicitations or communications that contain offensive or abusive content) to directors on a periodic basis, generally in advance of each Board meeting.
Attendance at Stockholders’ Meetings. The Company encourages directors to attend the annual stockholders’ meeting. Last year, eightseven of the nineten directors standing for election attended the annual meeting.
Compensation Committee Interlocks and Insider Participation. None of the Compensation Committee members (i) has ever been an officer or employee of the Company or (ii) was a participant in a Related Person Transaction (as defined in “Certain Relationships and Related Person Transactions”) in 2021.2022. None of the Company’s executive officers other than Mr. Cottle, serves, or in 20212022 served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving, or who in 20212022 served, as a member of the Board or the Compensation Committee. Mr. Cottle serves, and in 2021 served, as an executive officer and member of the Board of Directors of both our Company and SciPlay.
Code of Business Conduct. The Board has adopted the Code, which applies to all of our officers, directors and employees. The Code sets forth fundamental principles of integrity and business ethics and is intended to ensure ethical decision making in the conduct of professional responsibilities. Among the areas addressed by the Code are standards concerning conflicts of interest, confidential information and compliance with laws, regulations and policies, including DEI and human rights. The full text of the Code can be accessed through the Investors — Corporate Governance link on our website at www.lnw.com.
Director Compensation
The following describes the compensation paid to each of our directors in 2021,2022, excluding the compensation of Mr. Cottle,Matthew Wilson, our current President and Chief Executive Officer, and Mr. Cottle, our former President and Chief Executive Officer, who each also served on the Board during 2021,2022, and whose compensation is disclosed in the section entitled “Executive Compensation”.
Non-Employee Director Compensation. The compensation program for Eligible Directors (as defined below) consists of annual retainers and equity awards (the “Eligible Director compensation program”). In 2021,2022, under the Eligible Director compensation program, Eligible Directors were entitled to receive:
(1)
an annual retainer for service on the Board of $90,000;
(2)
an annual retainer (in lieu of fees per committee meeting) of $10,000 ($15,000, in the case of the Audit Committee) for service on a committee;
(3)
an annual retainer for the chairs of the Compensation Committee, the Compliance Committee and the Nominating and Corporate Governance Committee of $20,000 (and an annual retainer for the chair of the Audit Committee of $35,000);
(4)
an annual retainer of $35,000 for the Lead Independent Director; and
(5)
an annual grant of restricted stock units (“RSUs”) with a grant date value of $210,000, vesting on the first anniversary of the grant date, provided suchthe Eligible Director satisfied the Board’s attendance requirement for the prior calendar year, as discussed below.
An Eligible DirectorsDirector may elect to receive all or a portion of his or her cash retainers in the form of additional equity awardsshares instead of cash. In 2021,2022, none of the Eligible Directors elected to receive additional shares in lieu of their cash retainers.
New Eligible Directors generally receive stock options for 10,000 shares of our common stock (with a four-year vesting schedule), in lieu of the annual grant of RSUs, upon joining the Board. Such award is intended to provide additional compensation over the course of the first four years a director serves in recognition of the additional effort required for a new director to familiarize himself or herself with the
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Company and its businesses. In addition, prior to their electionsin connection with Mr. Morro’s election to the Board, the Company and Messrs. McLennan and Throsby had preliminary discussions regarding potentialagreed to provide Mr. Morro a sign-on awardsaward as an inducement for themhim to join the Board in light of the business opportunities and associated compensation that eachhe would have to forgo. These awardsThis award consisted of 10,0006,936 RSUs each, with immediate vesting, and werewas granted to Messrs. McLennan and ThrosbyMr. Morro on February 10, 2021.August 17, 2022. For 2021,2022, “Eligible Directors” consisted of all directors other than Messrs. CottleWilson, Odell and OdellCottle and Ms. Korsanos, who were instead compensated based on their employment (in the case of Mr.Messrs. Wilson and, prior to his resignation, Cottle) or consulting (in the case of Mr.Messrs. Odell and, following his resignation, Cottle, and Ms. Korsanos) agreement with the Company, as applicable. The
compensation for Mr.Messrs. Wilson and Cottle is discussed in the section entitled “Executive Compensation”, and the compensation for each of Mr. Odell and Ms. Korsanos is described below.
The elements of the Eligible Director compensation program are periodically evaluated and determined by the Compensation Committee, which takes into account competitive director compensation data provided by its independent compensation consultant, Compensation Advisory Partners LLC, or CAP, for companies in a peer group of comparably sized companies in related industries as well as a general industry group of comparably sized companies. The Compensation Committee uses the comparative data provided by CAP as a general indicator of relevant market conditions, but does not set specific benchmark targets for total director compensation or for individual elements of the Eligible Director compensation program. In early 2021, following its periodic evaluation of the Eligible Director compensation program, including a review of the competitive director compensation data provided by CAP, the Compensation Committee modified the Eligible Director compensation program for the first time since 2014 by: (1) increasing the annual cash retainer and annual equity grant to the values described above; (2) providing that annual equity grants, beginning with the 2021 grant, would vest in full after one year; (3) providing for an annual cash retainer for the Lead Independent Director, as described above; and (4) allowing each Eligible Director to elect to receive all or a portion of his or her cash retains in the form of additional equity awards instead.
Awards of stock options and RSUs are subject to forfeiture if an Eligible Director leaves the Board prior to the scheduled vesting date for any reason, except that the vesting of such awards would accelerate in full upon an Eligible Director ceasing to serve on the Board due to death or disability.
The number of RSUs awarded to each Eligible Director in respect of his or her annual grant for 20212022 was determined by dividing the grant date value of $210,000 by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date and rounding down to the nearest whole number. As a result, 2,7633,840 RSUs were awarded to each Eligible Director in 20212022 (other than Ms. Shanks,Mr. Morro, who joined the Board after the annual grant date for 2021)2022, but who received a grant of 6,936 immediately vested RSUs as described above).
Eligible Directors with unexcused absences exceeding 25% of the meetings held by the Board and committees on which they served in the prior year are not eligible to receive an annual award of RSUs except that Eligible Directors with less than six months of service in the prior year are not subject to such threshold with respect to the first grant made after becoming a director. All Eligible Directors serving at the time of grant (June 2021)2022) satisfied the attendance requirements applicable for the 20212022 annual awards.
Compensation Arrangements with Mr. Odell and Ms. Korsanos. Prior to being elected to the Board, Mr. Odell and Ms. Korsanos served as consultants to the Company and were compensated for such services pursuant to their consultant agreements with the Company. Since Mr. Odell and Ms. Korsanos were expected to continue to provide such services following their election to the Board, and such services were expected to increase, it was determined that Mr. Odell and Ms. Korsanos should continue to be compensated for their consulting services to the Company, and should not participate in the Eligible Director compensation program. Mr. Odell and Ms. Korsanos therefore receive annual consulting fees of $900,000 and $600,000, respectively, and do not receive any cash retainers or annual equity grants under the Eligible Director compensation program. In addition, in recognition of the value of the consulting services provided by Mr. Odell and Ms. Korsanos and the value unlocked by the acquisition in October 2020 by a group of long-term institutional investors of a 34.9% stake in the Company from MacAndrews & Forbes Incorporated, (the “MafCo Transaction”), in which Mr. Odell and Ms. Korsanos played critical roles, and to further align their interests with stockholders and drive stock price growth, each of Mr. Odell and Ms. Korsanos received a one-time grant of 662,933 stock options. TheseVesting of these stock options werewas subject to achieving one or more stock price hurdles or continued services through a three-year vesting schedule, with half ofspecified date. Since the then-unvested stock options vesting earlier if the volume-weighted average price of our common stock was at least $50.00 for 25 out of 30 consecutive trading days, and all of the then-unvested such stock options vesting earlier if the volume-weighted average price of our common stock was at least $75.00 for 25 out of 30 consecutive trading days. These stock price hurdles were achieved, on May 28, 2021 and October 21, 2021, respectively, and therefore all of the stock options granted to Mr. Odell and Ms. Korsanos are now vested.
Director Compensation for 20212022. The table below shows the compensation earned by each of our directors for 2021;2022; other than Mr.Messrs. Wilson and Cottle, whose compensation is reflected in the Summary Compensation Table below.
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| Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Total ($) | | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Total ($) | | ||||||||||||||||||||||||||||||||
Jamie R. Odell(5) | | | | 900,000(3) | | | | | — | | | | | — | | | | | 900,000 | | | | | | 900,000(3) | | | | | — | | | | | — | | | | | 900,000 | | | ||||||||
Antonia Korsanos(5) | | | | 600,000(3) | | | | | — | | | | | — | | | | | 600,000 | | | | | | 600,000(3) | | | | | — | | | | | — | | | | | 600,000 | | | ||||||||
| Kneeland C. Youngblood | | | | 159,542(4) | | | | | 209,961 | | | | | — | | | | | 369,503 | | | | | | 175,000(4) | | | | | 209,952 | | | | | — | | | | | 384,952 | | | ||||||||
Peter A. Cohen(6) | | | | 70,667(4) | | | | | — | | | | | — | | | | | 70,667 | | | |||||||||||||||||||||||||||||
Jack A. Markell(7) | | | | 105,576(4) | | | | | 209,961 | | | | | — | | | | | 315,537 | | | |||||||||||||||||||||||||||||
Hamish R. McLennan(8) | | | | 110,000(4) | | | | | 678,411 | | | | | — | | | | | 788,411 | | | |||||||||||||||||||||||||||||
| Hamish R. McLennan | | | | 114,594(4) | | | | | 209,952 | | | | | — | | | | | 324,546 | | | |||||||||||||||||||||||||||||
Stephen Morro(6) | | | | 47,562(4) | | | | | 399,999 | | | | | 375,131 | | | | | 822,692 | | | |||||||||||||||||||||||||||||
| Michael J. Regan | | | | 145,000(4) | | | | | 209,961 | | | | | — | | | | | 354,961 | | | | | | 142,769(4) | | | | | 209,952 | | | | | — | | | | | 352,721 | | | ||||||||
Virginia Shanks(9) | | | | 56,112(4) | | | | | — | | | | | 480,043 | | | | | 536,155 | | | |||||||||||||||||||||||||||||
Timothy Throsby(8) | | | | 115,000(4) | | | | | 678,411 | | | | | — | | | | | 793,411 | | | |||||||||||||||||||||||||||||
| Virginia Shanks | | | | 103,333(4) | | | | | 209,952 | | | | | — | | | | | 313,285 | | | |||||||||||||||||||||||||||||
| Timothy Throsby | | | | 115,000(4) | | | | | 209,952 | | | | | — | | | | | 324,952 | | | |||||||||||||||||||||||||||||
| Maria T. Vullo | | | | 115,000(4) | | | | | 209,961 | | | | | — | | | | | 324,961 | | | | | | 115,000(4) | | | | | 209,952 | | | | | — | | | | | 324,952 | | | ||||||||
(1)
Reflects the grant date fair value of RSUs awarded during 20212022 to all Eligible Directors (other than Ms. Shanks, who joined(including the sign-on RSUs awarded to Mr. Morro in connection with his election to the Board after the annual grant date for 2021)on August 9, 2022). The grant date fair values are computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”) and were determined by multiplying the number of shares subject to the award by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date. For additional information, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.
(2)
Reflects the grant date fair value of stock options awarded to Ms. ShanksMr. Morro in connection with herhis election to the Board on JuneAugust 9, 2021,2022, computed in accordance with FASB ASC Topic 718. The fair value of the stock options is estimated on the date of grant using the Black-Scholes option pricing model. For a discussion of valuation assumptions, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.
(3)
Reflects the consulting fees for Mr. Odell and Ms. Korsanos as described above.
(4)
Reflects annual retainers earned by Eligible Directors for 2021,2022, except that in the case of Mr. Cohen and Ms. Shanks,Morro, the amounts are pro-rated to reflect the portion of the year the individualhe spent on the Board. In the case of any Eligible Director who changes committee assignments during the year, the applicable retainers are subject to a pro-rata adjustment to reflect the amount of time spent on the applicable committee during the year.
(5)
As described above, during 2021,2022, Mr. Odell and Ms. Korsanos did not receive any additional compensation in respect of his or her services as a director.
(6)
Mr. Cohen decided not to stand for reelection at the 2021 annual meeting of stockholders and his directorship expired on June 9, 2021.
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