(Amendment No. )
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| Definitive Proxy Statement |
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| Soliciting Material under §240.14a-12 |
FLEETCOR TECHNOLOGIES, 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 computed on table in exhibit required by Item 25 (b) per Exchange Act Rules 14a-6 (i) (1) and D-11. |
A LETTER FROM OUR CHIEF EXECUTIVE OFFICER
 | Ronald F. Clarke Chairman & Chief Executive Officer |
My Fellow Shareholders,
Thank you for your investment in FLEETCOR.
Performance & Positioning
Our full year 2022 financial performance was outstanding, with revenue of $3.4 billion, up 21% and adjusted earnings per share of $16.10, up 22%. Both were way ahead of our expectations heading into the year. We also closed five capability acquisitions (inclusive of the cross border deal closed on January 3), and made three minority investments to strengthen our position in our Corporate Payments and EV lines of business.
Additionally, we meaningfully advanced our “beyond strategy” in 2022, extending both the product set and served customer segments in each of our major businesses. These beyond extensions increase our TAM, and better position our LOB for long term growth. Some highlights from 2022 include:
 | In Global Fleet, we significantly advanced our EV capabilities, and the concept of “defensive” and “offensive” EV initiatives |
| In Brazil, we expanded our tag fueling solution to more accepting sites and more users and we launched a new vehicle insurance offering, which enjoyed rapid acceptance |
| In Corporate Payments, we added AP automation workflow software to our full AP payment platform, and further scaled our cross-border footprint in Europe |
| In Lodging, we further expanded our two new verticals, airlines and insurance, with each reaching almost $100M in revenue |
Ultimately, we believe that excellent financial performance, combined with our strategic progress will enable us to increase shareholder returns. Our mid-term objectives are to grow revenue and adjusted net income per diluted share 10% and 15-20% annually, respectively. We expect the market to reward our performance as we deliver results.
Governance & Board Oversight
We have a very experienced Board of Directors with a diverse set of skills and experience, including leading large, global public companies within our industry. Our directors provide valuable oversight regarding audit, compensation, governance and company strategy.
We’ve made meaningful progress in refreshing and diversifying our Board over the last year, having appointed Annabelle Bexiga and Rahul Gupta to the Board in 2023. The experience in technology and fintech that they bring, will be quite additive to the company as we continue to navigate the changing landscape of the industry, and build a bigger and stronger company. We’re pleased to report that women and minorities now represent 36% of the Board.
Our Board of Directors have been deeply involved in our shareholder engagement efforts, and have helped drive responsive enhancements to our practices.
2023 Notice of Annual Meeting & Proxy Statement | 1 |
A LETTER FROM OUR CHIEF EXECUTIVE OFFICER
Environmental & Social Endeavors
Our comprehensive employee development and training programs, offer the tools and resources to attract and retain the best talent. Our benefits further strengthen our competitive packages. We are proud of the journey we provide our employees at all levels, and we will continue to monitor the current environment for talent, and adjust our offerings to maintain our position as an employer of choice in the payments industry.
Our values foster an inclusive culture, and we are proud of the environment that we’ve created where women represent more than one-half of our global workforce, and less than two-thirds of our domestic employees identify as White/Caucasian. We believe this diversity enhances our personal work experiences and boosts our company’s performance.
Your Support
On behalf of our Board of Directors, we sincerely ask that you vote with our recommendations. We appreciate our shareholders’ support and feedback, and we will continue to reach out on a regular basis to gain further insights and perspectives.
Sincerely,
Ronald F. Clarke
Chairman & Chief Executive Officer
Annual Meeting of The Company’s Annual Meeting of | ||
| Shareholders will be held at 3280 Peachtree Road, Suite 2400 Atlanta, Georgia 30305 on June 9, 2023 at 10:00 a.m. |
| 2023 Notice of Annual Meeting & Proxy Statement |
 |
NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS
Agenda
 |
 | To ratify the reappointment of Ernst & Young LLP as the Company’s independent public accounting firm |
 | To approve, on an advisory basis, named executive officer compensation |
 | To approve, on an advisory basis, the frequency of shareholder voting on compensation of named executive officers |
 | To vote on a shareholder proposal to amend the shareholders’ right to call a special meeting of shareholders, if properly presented |
We may transact other business that properly comes before the meeting.
Mailing Date and is first being mailed to stockholders onAvailability of Proxy Materials
On or about December 29, 2017.
YOUR VOTE IS IMPORTANT
Please vote as soon as possible by orderone of the Board of Directors.
www.proxyvote.com Use the internet to transmit your |
1-800-690-6903 Use any touch tone telephone to |
Mark, sign and date your proxy card |
Sincerely,
FLEETCOR Board of Directors
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 9, 2023: Our Proxy Statement and Annual Report to Shareholders are available at https://investor.FLEETCOR.com.
| 2023 Notice of Annual Meeting & Proxy Statement | 3 |
TABLE OF CONTENTS
| 4 | 2023 Notice of Annual Meeting & Proxy Statement |
01. SUMMARY
| Information About Our 2023 Annual Meeting |
| Date and Time: Friday, June 9, 2023, at 10:00 a.m. Eastern Daylight Time |
| Place: Our offices at 3280 Peachtree Road, Suite 2400, Atlanta, Georgia 30305 |
| Record Date: April 17, 2023 (73,828,110 common shares and 276,222 unvested restricted shares entitled to vote as of the record date). |
| Voting: Holders of common shares as of the close of business on April 17, 2023 may vote at the Annual Meeting. One vote per share for each director nominee and each of the other proposals described below. |
| Proposals and Board Recommendations | |||
| Proposal | Board Recommendation | For More Information | |
 | To elect the eleven directors | FOR each nominee | Page 61 |
 | To ratify the reappointment of Ernst & Young LLP as our independent public accounting firm for 2023 | FOR | Page 61 |
 | To approve, on an advisory basis, named executive officer compensation | FOR | Page 62 |
 | To approve, on an advisory basis, the frequency of shareholder voting on compensation of named executive officers | ONE YEAR | Page 62 |
 | To vote on a shareholder proposal to amend the shareholders’ right to call a special meeting of shareholders, if properly presented | AGAINST | Page 63 |
For complete information regarding our 2023 annual meeting of shareholders, the proposals to be voted on and our performance, please review the entire proxy statement and our 2022 annual report, available at https://investor.FLEETCOR.com and proxyvote.com. | |||
2023 Notice of Annual Meeting & Proxy Statement | 5 |
02. FLEETCOR AT A GLANCE
$3.4B ANNUAL REVENUE
100+ COUNTRIES
1.7B+ TRANSACTIONS PER YEAR
~10,000 EMPLOYEES |
FLEETCOR Technologies, Inc. (“FLEETCOR”) is a leading global provider of digital payment solutions that enables businesses to control purchases and make payments in a smarter, simpler and better way. We serve businesses, partners, merchants, consumers and payment networks in North America, Latin America, Europe, and Asia Pacific.
Businesses spend an estimated $135 trillion each year with other businesses. In many instances, they lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their purchases. This often results in wasted time and money due to unnecessary or unauthorized spending, fraud, receipt collection, data input and consolidation, report generation, reimbursement processing, account reconciliations, employee disciplinary actions, and more.
Our wide range of modern, digitized solutions generally provides control, reporting, and automation benefits superior to many of the payment methods businesses often used such as cash, paper checks, general purpose credit cards, as well as employee pay and reclaim processes. In addition to delivering meaningful value to our customers, our solutions also share several important and attractive business model characteristics such as:
| Customers are primarily businesses, which tend to have relatively predictable, consistent volumes; |
| Recurring revenue models driven by recurring volume and higher retention, resulting in predictable revenue; |
| Similar business-to-business (B2B) selling systems with common sales approaches, management and reporting; |
| Specialized technology platforms and proprietary payment acceptance networks, which create competitive advantages and barriers to entry; and |
| High EBITDA margins and cash flow translation and limited capital investment requirements. |
Our Vision
FLEETCOR’s vision is that every payment is digital, every purchase is controlled, and every related decision is informed. Digital payments are faster and more secure than paper-based methods such as checks, and provide timely and detailed data which can be utilized to effectively reduce unauthorized purchases and fraud, automate data entry and reporting, and eliminate reimbursement processes. Combining this payment data with analytical tools delivers powerful insights, which managers can use to better run their businesses.
Our Mission
FLEETCOR’s mission is to provide businesses with a smarter way to pay. Through the digitalization of payments, we create and support robust ecosystems which benefit all participating constituents: payment-making customers, payment-accepting merchants, tax-collecting governments, and FLEETCOR.
As of December 31, 2022
| 6 | 2023 Notice of Annual Meeting & Proxy Statement |
02. FLEETCOR AT A GLANCE
Our Strategy
We are executing on a strategy of optimizing assets, leveraging similar selling methods, and bundling and cross-selling value-added solutions. We continue to enhance our solutions to displace inferior payment methods, improve customers’ mobile and digital experiences, and extend utility. We actively market and sell to current and prospective customers leveraging a multi-channel go-to-market approach, which includes comprehensive digital channels, direct sales forces and strategic partner relationships. We supplement our organic growth strategy and sales efforts by pursuing attractive acquisition opportunities, which serve to strengthen and extend our
market positions and create value even faster. With a long, proven operating history, FLEETCOR now serves hundreds of thousands of business customers with millions of cardholders making payments to millions of vendors around the world.
Our Performance
FLEETCOR has become a global leader in business payments by delivering a superior track record of growth, generating compound annual growth rates of 18% in revenue and 20% in adjusted net income per diluted share (or “Adjusted EPS”) since going public in 2010.
(1) Revenues before 2018 are presented pre-adoption of ASC 606.
(2) Non-GAAP financial measures. See appendix for reconciliation of non-GAAP measures to GAAP.
2023 Notice of Annual Meeting & Proxy Statement | 7 |
02. FLEETCOR AT A GLANCE
Our Board of Directors
In order to oversee our complex, global business, our Board is comprised of experienced individuals who are engaged in their duties and invested in our Company’s success. Our Board recognizes the importance of independence from management and ensures its responsiveness to shareholders by directly connecting directors’ interests with those of our shareholders. Our Board and management have taken a long-term view toward shareholder engagement and recognize that continuous solicitation and consideration of shareholder feedback is critical to driving growth and creating shareholder value.
As a result, we regularly engage with our shareholders throughout the year by multiple means to encourage ongoing, meaningful dialogue.
We encourage you to visit the “Corporate Governance” area of the “Investor Relations” section of our website (https://investor. FLEETCOR.com) where you will find detailed information about our corporate governance practices, including our key governance documents listed below:
| Code of Business Conduct and Ethics |
| Policy Regarding Interested Party Communications with the Board of Directors |
| Corporate Governance Guidelines |
| Insider Trading Policy |
| Board Committee Charters |
The reports and other information contained on websites referred to in this proxy statement (other than to the extent specifically referred to herein as required by the rules of the NYSE or the SEC) are not part of this proxy solicitation and are not incorporated by reference into this proxy statement or any other proxy materials.
Forward-Leaning Corporate Governance
In response to our shareholder engagement efforts and recent shareholder votes at our annual meetings, we have taken significant steps to adopt many corporate governance best practices:
| Broader Director diversity search criteria |
| Declassified Board of Directors |
| Lead Independent Director |
| Majority voting in Director elections |
| Expanded shareholder engagement |
| Proxy access |
| Shareholder right to call special meetings |
| Shareholder right to act by written consent |
| No supermajority shareholder voting |
| Regular review of governance practices |
| Continued the expansion of our environmental, social and governance (ESG) initiatives, including the continued publication of annual Corporate Responsibility and Sustainability report |
Forward-Leaning Compensation Practices
FLEETCOR has also embraced best practices in our compensation programs, which strongly support our pay-for-performance philosophy and culture:
| NEO compensation aligned with Company and, as applicable, division performance |
| Base salary levels generally at or below peer median |
| Target annual cash incentives generally at or below peer median |
| Significant portion of NEO compensation generally delivered in the form of equity-based awards |
| Different performance metrics for different compensation components |
| Incentive payouts tied closely to achieving published guidance where applicable |
| Significant stock ownership requirements |
| No repricing or cashing out of underwater stock options or stock appreciation rights |
| No hedging or pledging of common shares |
| No excise tax gross-ups |
| No excessive perquisites |
| Maintain a compensation clawback policy |
| Double-trigger change of control provisions |
| Below-market severance coverage |
| Shareholder engagement includes governance committee Chair, additional Board members and management |
| Regular review of compensation programs |
| Utilize an independent compensation consultant |
Shareholder Engagement Results
Our 2022 shareholder outreach regarding executive compensation was a continuation of our annual comprehensive shareholder engagement plan. We have taken decisive action in recent years in response to our shareholder outreach initiatives and we believe that our compensation practices address the feedback we received. Our stockholder engagement ensured that we heard the feedback of our shareholders — in addition to generous access to the management team, after we mailed the 2022 Proxy, but before the 2022 stockholder meeting, we offered the opportunity to discuss our Proxy with our top 10 stockholders as of December 31, 2021.
| 8 | 2023 Notice of Annual Meeting & Proxy Statement |
02. FLEETCOR AT A GLANCE
Our Commitment to Culture, Diversity Inclusion, Belonging and Sustainability
Corporate responsibility promotes the long-term interests of our shareholders and strengthens Board and management accountability. Our corporate strategy includes a focus on how environmental and social issues may impact the long-term interests of our shareholders and other stakeholders. We believe that environmentally and socially responsible operating practices are important considerations while generating value for our shareholders, being good partners with our customers by providing efficient payment solutions, and being a good employer to our employees.
We created a sustainability working group in 2020, consisting of dedicated internal resources and external advisors to address environmental, social, and governance (ESG) factors that are important to our business. During 2021 and 2022, our sustainability working group continued to evaluate potential ESG risks and opportunities relevant to our Company based on the views held by our shareholders, leading ESG frameworks, and ESG rating agencies. We utilized aspects of the Sustainability Accounting Standard Board and the Task Force on Climate-related Financial Disclosures to evaluate our practices.
Human Capital
As of December 31, 2022, FLEETCOR employed approximately 10,000 associates located in over 18 countries around the world, with approximately 4,100 of those associates based in the United States. At FLEETCOR, we strongly believe that talent is a strong determinant of the Company’s performance and success. Our values-driven people programs, practices and policies have been developed to ensure we are able to attract, retain and develop the quality of talent necessary to advance our key initiatives and achieve our strategic objectives. We are firmly committed to delivering a strong employee value proposition and unique employment experience to our associates which, in turn, should lead to better customer experiences and business outcomes.
Culture
Our culture has evolved through time, as the Company has grown considerably both organically and through acquisitions. Despite FLEETCOR’s expansive size and geographic scope, we retain a strong entrepreneurial spirit, and share a common vision, mission and set of values, which together serve as cornerstones to our “One FLEETCOR” culture. Our core values, listed below, are infused in all aspects of FLEETCOR, and guide our employee selection, behavior and interactions with both internal and external stakeholders.
Diversity, Inclusion & Belonging
Our focus on diversity, inclusion and belonging (DIB) is important to our successful “One FLEETCOR” culture. As of December 31, 2022, females represented approximately 53% of our global workforce and approximately 24% of our senior leadership team, while minorities comprised approximately 34% of our domestic workforce and approximately 12% of our senior leadership team.
Fostering a culturally diverse and inclusive environment and creating a true sense of belonging are among our top priorities. Our global diversity council, three regional councils and nine employee resource groups (each, an ERG) are dedicated to building diversity, inclusion and belonging into all aspects of our global operations. Sponsored by the Chairman of the Board and CEO, the councils and ERGs are vital to creating an environment where all employees are able to prosper. Our ERGs allow a safe space for traditionally underrepresented employees to connect and discuss experiences. The ERGs also provide FLEETCOR with perspectives on the unique needs and lived experiences of those who are traditionally underrepresented.
|  |
2023 Notice of Annual Meeting & Proxy Statement | 9 |
02.FLEETCOR AT A GLANCE
Core Values
INNOVATION Figure out
COLLABORATION Accomplish
EXECUTION Get it done
INTEGRITY Do the
PEOPLE We make |
Employee Wellness
FLEETCOR’s benefits programs are designed to meet the evolving needs of a diverse workforce across the globe. Because we want our employees and their families to thrive, in additional to our regular benefit offerings, we focused on physical and mental well-being in 2022. During the year, we offered free, online fitness classes, sponsored the FLEETCOR Wellbeing Challenge, provided access to employee assistance programs in all regions, and celebrated Mental Health Awareness programs globally.
Talent Development
FLEETCOR offers a variety of high-quality learning opportunities, designed to support employee development and organizational effectiveness. Learning opportunities are available in all geographies at all levels, and incorporate personal, business and leadership skills development with the goal of empowering our organization, creating avenues for closing skill gaps, and enhancing the capabilities of our workforce. Leadership, teamwork, communication, and many other soft skills are vital to our success. We offer a wide variety of career opportunities and paths to advancement through on-the-job coaching, training, and education. We are proud to be a company where an associate can start as an intern and turn that experience into a successful career.
Voice of the Employee
We continue to develop and refine our people programs based on feedback we receive directly from our workforce, which we gather through a survey of all employees globally. The participation rate for our 2021 survey was approximately 75%. We believe our employee proposition remains strong and we continue to attract and retain top talent. We continue to share the detailed engagement scores across the organization, and analyze the results to understand differences by geography, demographics, job level, and leader, and to identify opportunities for further improvement. Throughout 2022, we conducted several additional pulse surveys to assess the ongoing engagement of our workforce. We are preparing to launch our 2023 survey in the coming weeks.
In October 2020, FLEETCOR published its inaugural Corporate Responsibility & Sustainability Report (CRS Report), in which we provided detailed information about the Company’s views and approaches regarding environmental, social and governance issues. We published a 2021 CRS Report in January 2022, which contains information incremental to our inaugural report and is therefore intended to be read in conjunction with that report. Our 2021 CRS Report includes further details related to our global talent strategy, DIB metrics, employee wellness and talent development. We are currently preparing our third CRS Report for publication later this year. Our CRS Reports may be accessed electronically at https://investor.fleetcor.com, in the governance section.
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02.FLEETCOR AT A GLANCE
Sustainability
We believe we should do our part to ensure environmental sustainability. To that end, we:
| In the UK, are registered with the Energy Savings Opportunity Scheme (ESOS) that assesses energy use and energy efficiency opportunities, including with respect to facilities, transportation and energy usage, at least once every four years |
| In the UK, comply with the Streamlined Energy and Carbon Reporting (SECR) regulations with respect to energy consumption and carbon emissions |
| Intend to continue strengthening our sustainability recording and reporting processes |
| Offer eco-friendly programs, including Clean Advantage® and EcoPoint, that provide our fleet card customers the opportunity to offset their fleets’ CO2 emissions through the purchase of carbon credits or the planting of new woodlands |
| Enable fuel cards to pay for alternative energy, such as electricity and hydrogen, for vehicles which require such to operate |
| Encourage customers to reduce paper consumption through electronic means, such as delivery of invoices, reports and other communications, payment of invoices, and document management |
| Continue our multi-year initiative to consolidate data centers |
| Support workplace initiatives designed to reduce our impact on the environment, whether through reduced energy use or effective waste management, including the following: |
 | Motion sensor-controlled lighting |
 | LED lighting |
 | Time-controlled air conditioning |
 | Video & telephone conferencing to reduce meeting-related travel |
 | Printing defaulted to double-sided |
 | Recycling |
 | Reusable cups and water bottles |
 | Disposal of hazardous waste, such as ink cartridges, batteries and light bulbs |
2023 Notice of Annual Meeting & Proxy Statement | 11 |
03.CORPORATE GOVERNANCE AND BOARD MATTERS
Our Board of Directors
Our Board currently consists of eleven highly experienced and engaged members. Except for our CEO, all of our directors are independent under the NYSE rules. We continually focus on Board composition to ensure an appropriate mix of tenure and expertise that provides fresh perspectives and significant industry and subject matter experience.
The complexity of our global business requires oversight by experienced, informed individuals that understand the industry and challenges, and our Company on a deep level. Our directors’ diverse backgrounds contribute to an effective and well-balanced Board that is able to provide valuable insight to, and effective oversight of, our senior management team.
| DIRECTOR EXPERIENCE | ||
 | Payments, financial services and fintech Informed about industry | 10 of 11 |
 | Finance & accounting Understands the financial complexities of our business | 9 of 11 |
 | Marketing & advertising Participates in expanding our business and brand awareness | 3 of 11 |
 | Technology & innovation Equipped to respond to rapidly changing technology | 10 of 11 |
 | Global business Able to navigate the global opportunities of our business | 8 of 11 |
 | Cyber & information security Committed to maintaining customers’ trust | 5 of 11 |
 | Business development & strategy Able to respond to fast-moving changes | 9 of 11 |
 | Other public company leadership or board service Experienced in large-scale strategy and operations | 9 of 11 |
Tenure*:
8 Years Average
*Since Company IPO in 2010
and through 2023
Age: 65 Average
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03.CORPORATE GOVERNANCE AND BOARD MATTERS
Director Nominees
The Nomination and Governance committee evaluates the Board’s composition at least annually to determine whether directors’ backgrounds and experiences align with our long-term strategy. The committee also takes into consideration the results of the Board’s self-evaluation. Based on its review, the committee determines whether Board refreshment is needed in the near future. Then the committee searches for potential candidates, utilizing a variety of sources to help identify nominees who would be valuable assets to our Board and to FLEETCOR. To meet the needs of our Board, the committee seeks to identify candidates possessing the desired qualities, skills and background.
All directors’ terms expire at this year’s annual meeting, and they will stand for election for a one-year term, expiring at the following annual meeting. At and after the annual meeting, all directors will be elected annually and we will have no classified director terms.
In February and March 2023 the Board was considering feedback it received in light of its continued shareholder engagement, including shareholder views expressed to us on our strategy, performance and Board composition. In March 2023, the Company, following an extensive and deliberative engagement process, entered into a Cooperation Agreement (the “Cooperation Agreement”) with D.E. Shaw Oculus Portfolios, L.L.C. and D.E. Shaw Valence Portfolios, L.L.C. (collectively, “D.E. Shaw”). Under the terms of the Cooperation Agreement, among other things, we appointed Rahul Gupta to the Board. We also formed a Strategic Review Committee of the Board focused on consideration of the possible separation or disposition of one or more businesses of the Company. In addition, we agreed to add a second new director. Upon appointment of the second new director, it is expected that one of the Company’s longer tenured directors will retire. The appointment of Mr. Gupta and the Company’s agreement to add a second new director advances the Company’s Board refreshment process, which is intended to deepen the Board’s skill set in financial oversight. These new appointments follow the January appointment of Annabelle Bexiga, a technology executive.
Based on the needs of the Board and FLEETCOR, the Board has selected Messrs. Buckman, Clarke, Farrelly, Gupta, Hagerty, Jones, Macchia, Sloan and Stull and Mses. Bexiga and Moddelmog as nominees to be voted upon at the annual meeting by the shareholders.
Age: 61 Director Since: 2023 | Annabelle Bexiga |  | |
Featured experience, qualifications and attributes: Prior Chief Information Officer positions at AIG (NYSE: AIG), a multinational finance and insurance corporation, from 2015 to 2017, TIAA, a Fortune 100 financial services organization, from 2010 to 2015, Bain Capital, and JP Morgan Chase. Other board experience (current): Triton International Limited, StoneX Group Inc., DWS Group GmbH & Co. KGaA, and Quantexa Ltd. Provides: Substantial expertise in technology, security, and financial services. | |||
2023 Notice of Annual Meeting & Proxy Statement | 13 |
03.CORPORATE GOVERNANCE AND BOARD MATTERS
Age: 75 Director Since: 2013 | Michael Buckman |  | |
Featured experience, qualifications and attributes: former Managing Partner and Founder of Buckman Consulting LLC, a travel, logistics and payment systems consulting firm, since founding in 2009; prior President of the Asia/Pacific division of BCD Travel, and Chief Executive Officer of BCD from 2001 to 2007; Senior executive positions with Homestore.com, American Express, Sabre Travel Services, American Airlines and Worldspan Provides: Extensive experience as a senior executive of various technology, travel and payment systems companies | |||
Age: 67 Director Since: 2000 | Ronald F. Clarke |  | |
Featured experience, qualifications and attributes: Company CEO since August 2000; prior President & COO of AHL Services, Inc. a staffing firm; Chief Marketing Officer of Automatic Data Processing, a computer services company; Principal with Booz Allen Hamilton, a global management firm; Marketing Manager of General Electric Company, a diversified technology, media and financial services company Other board experience (current): Ceridian HCM Holding Inc. (NYSE: CDAY) Provides: Deep knowledge of our Company and industry through his service as our chief executive officer | |||
Age: 79 Director Since: 2014 | Joseph W. Farrelly |  | |
Featured experience, qualifications and attributes: Senior Vice President, Chief Information Officer of Interpublic Group of Companies, Inc. (NYSE:IPG), a global provider of advertising and marketing services, from 2006 through March 2015; prior Executive Vice President and Chief Information Officer at Aventis, Vivendi Universal, Joseph E. Seagrams and Nabisco Other board experience (current): NetNumber Inc. Other board experience (prior): Helium, GridApps and Aperture Technologies, Inc., all of which were acquired by larger companies in their respective industries Provides: Substantial experience and knowledge regarding information technology and security; experience in advertising and marketing | |||
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03.CORPORATE GOVERNANCE AND BOARD MATTERS
Age: 64 Director Since: 2023 | Rahul Gupta |  | |
Featured experience, qualifications and attributes: Prior executive positions as CEO of RevSpring, a healthcare billing and payments company from 2017 to 2019; as Group President for Fiserv (NASDAQ: FISV) from 2006 to 2017 and as President for eFunds (NYSE: EFD) from 2002 to 2006. In addition, Mr. Gupta has launched several startup companies in the payments and marketing spaces, built technology businesses for Fidelity Investments, and served numerous consulting clients for PricewaterhouseCoopers (PwC). Other board experience (current): Mitek (NASDAQ: MITK), SavvyMoney, Amount. Inc., Exact Payments and Capital Good Fund Other board experience (prior): Cardtronics plc (formerly NASDAQ: CATM) from 2020 to 2021; Paylease, LLC from 2019 to 2021 and Ncontracts from 2018 to 2020. Provides: Over 37 years of experience in the financial services and payments industries and significant experience in fintech venture and private equity | |||
Age: 60 Director Since: 2014 | Thomas M. Hagerty |  | |
Featured experience, qualifications and attributes: Managing Director of Thomas H. Lee Partners, L.P., a leading private equity firm, since 1994 Other board experience (current): Black Knight, Inc. (NYSE: BKI) (not standing for re-election), Ceridian HCM Holding Inc. (NYSE: CDAY), Fidelity National Financial, Inc. (NYSE: FNF), and Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Provides: Managerial and strategic expertise developed by working with and enhancing value at large, growth-oriented companies; expertise in corporate finance; substantial public company board experience | |||
Age: 52 Director Since: 2020 | Archie L. Jones, Jr. |  | |
Featured experience, qualifications and attributes: Managing Director of Six Pillars Partners, a private equity firm investing in high-growth companies, and a Professor at Harvard Business School; prior executive positions at private equity, public and private companies including NOWaccount Network Corporation, IBM, Kenexa (NYSE: KNXA) and Parthenon Capital; Certified Public Accountant and graduate of Morehouse College and Harvard Business School Other board experience (current): Project Evident Provides: Managerial expertise in the financial institutions industry; expertise in mergers and acquisitions | |||
2023 Notice of Annual Meeting & Proxy Statement | 15 |
03.CORPORATE GOVERNANCE AND BOARD MATTERS
Age: 71 Director Since: 2010 | Richard Macchia |  | |
Featured experience, qualifications and attributes: Chief Financial Officer and Senior Vice President of Administration for Internet Security Systems, Inc., an information security provider, from 1997 through October 2006, when it was acquired by International Business Machines Corporation; senior executive roles, including as principal financial officer and accounting officer, with several public companies, including with MicroBilt Corporation, a financial information services company, and First Financial Management Corporation, a company providing credit card authorization, processing and settlement services and other enterprise solutions; Partner in the audit and assurance practice of KPMG Provides: Over 20 years of experience in the financial and information services industry and significant audit and accounting background | |||
Age: 67 Director Since: 2017 | Hala G. Moddelmog |  | |
Featured experience, qualifications and attributes: President & CEO of the Woodruff Arts Center, which enriches the lives of more than 800,000 patrons annually, including more than 170,000 students and teachers, making the Woodruff Arts Center the largest arts educator in the state of Georgia; prior President & CEO of the Metro Atlanta Chamber of Commerce; prior President of Arby’s Restaurant Group, Inc., a division of Wendy’s/Arby’s Group, Inc. (NYSE: WEN); President & CEO of Susan G. Komen for the Cure, the world’s largest breast cancer organization; CEO of Catalytic Ventures, LLC, a business that evaluated investment opportunities in foodservice, franchising and multi-unit retail; and President of Church’s Chicken Other board experience (current): Lamb Weston Holdings, Inc. (NYSE: LW) Other board experience (prior): Amerigroup Corporation (NYSE: AGP) from 2009 to 2012; AMN Healthcare Services, Inc. (NYSE: AHS) from 2008 to 2010 and a number of non-profit boards of directors Provides: Over 20 years leading and enhancing value at high-growth companies including through M&A; expertise in marketing; experience as an executive of large public companies; community ties and extensive board experience | |||
Age: 55 Director Since: 2013 | Jeffrey S. Sloan |  | |
Featured experience, qualifications and attributes: CEO of Global Payments Inc., a leading international payments technology company since 2013; prior Executive positions with Goldman Sachs Group, Inc., including Partner and the worldwide head of Goldman’s financial technology group Other board experience (current): Global Payments Inc. (NYSE: GPN); Metro Atlanta Chamber of Commerce; Atlanta Committee for Progress Provides: 28 years of experience in the financial services and payments industries; financial acumen and experience as a public company executive | |||
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03.CORPORATE GOVERNANCE AND BOARD MATTERS
Lead Independent Director Director Since: 2000 | Steven T. Stull |  | |
Featured experience, qualifications and attributes: CEO and Co-Founder of Advantage Capital Partners, a private equity firm, overseeing investments in the technology, financial and information services industries, since 1992; prior Investment executive with a large insurance company; Chief financial officer of an information services company and other career experience in financial institutions Provides: Deep experience in investments and the financial services business | |||
Evaluation and Evolution of Our Board
As part of our focus on shareholder value, we regularly evaluate the performance of our Board and its committees and engage in self-evaluation process. We also evaluate the mix of experience, expertise and tenure of our individual directors. Our corporate governance guidelines reflect this approach. We believe our directors’ diverse backgrounds help us to make the most of opportunities and to effectively manage risk. We believe that our efforts have and will continue to result in a board and management focused on delivering exceptional value to our shareholders.
Board Meetings and Committees
The Board held five meetings in 2022 and each director attended at least 75% of all Board and applicable committee meetings during the year. Our independent directors meet regularly in executive session at each scheduled in-person
Board meeting. These sessions are led by independent directors selected on a rotating basis, who report the results of the independent sessions to the CEO and, if appropriate to other members of senior management.
Through 2022, our Board had five standing committees: an audit committee; a compensation committee, a nominating and corporate governance committee referred to as our governance committee; an executive and acquisitions committee; an information technology and security committee. As described above, we entered into the Cooperation Agreement in March 2023, pursuant to which we formed an ad hoc strategic review committee. The table below provides current membership for each of the Board committees.
Each committee meets at least quarterly, except the executive and acquisitions committee and strategic review committee, which meets as needed when matters within its charter arise. Our Board has adopted charters for the committees, which are available on our website at https://investor.FLEETCOR.com.
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
Board Committee Membership
Audit | Compensation | Nomination & Governance | Executive & | Information | Strategic | |
| Annabelle Bexiga | — | — | — | — | M | M |
| Michael Buckman | M | — | — | — | M | — |
| Ronald F. Clarke | — | — | — | C | — | C |
| Joseph W. Farrelly | — | M | — | — | C | — |
| Rahul Gupta | — | — | M | — | — | M |
| Thomas M. Hagerty | — | C | — | M | — | M |
| Archie L. Jones, Jr. | M | — | M | M | — | — |
| Richard Macchia | C, F | — | — | — | M | — |
| Hala G. Moddelmog | — | M | C | — | — | — |
| Jeffrey S. Sloan | — | — | — | M | M | M |
| Steven T. Stull | — | M | M | — | — | — |
C = Chair M = Member F = Financial Expert
Audit Committee
The audit committee currently consists of Messrs. Buckman, Jones and Macchia and is chaired by Mr. Macchia. The audit committee held five meetings in 2022. The Board determined that each member of the audit committee is independent under the NYSE rules and Rule 10A-3 of the Exchange Act, and has determined that Mr. Macchia qualifies as an “audit committee financial expert” under SEC rules.
The audit committee’s primary responsibilities include:
| appointing and overseeing independence of and all other aspects of our relationship with our independent registered accountants |
| reviewing and monitoring our accounting principles and policies, and our financial and accounting controls and compliance with regulatory requirements |
| overseeing the financial reporting process and reviewing our interim and annual financial statements |
| establishing procedures for the confidential, anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters |
| approving all audit and permissible non-audit services to be performed by our independent accountants |
| reviewing and approving related-party transactions |
Compensation Committee
The compensation committee currently consists of Messrs. Farrelly, Hagerty and Stull and Ms. Moddelmog and is chaired by Mr. Hagerty. The compensation committee held six meetings in 2022. The Board has determined that each compensation committee member is independent under the NYSE rules for compensation committee members.
The compensation committee’s primary responsibilities include:
| annually reviewing and approving the goals, objectives and specific levels of our executive compensation programs |
| reviewing and approving employment, severance and change in control arrangements |
| administering our executive incentive plans |
| reviewing and approving policies related to executive compensation, including stock ownership guidelines, clawback policy and hedging/pledging policy |
| selecting our independent compensation consultant |
The compensation committee may from time to time delegate all or a portion of its duties and responsibilities to a subcommittee of the compensation committee.
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
See “Compensation Discussion and Analysis” for a description of the processes and procedures of the compensation committee, the committee’s role, and the role of our executive officers and the compensation committee’s independent compensation consultant, in determining or recommending the amount or form of compensation for executive officers and directors.
Nomination and Governance Committee
The governance committee currently consists of Messrs. Jones, Gupta and Stull and Ms. Moddelmog and is chaired by Ms. Moddelmog. The governance committee held four meetings in 2022.
The governance committee’s primary responsibilities include:
| overseeing succession planning |
| developing and recommending criteria for selecting new directors |
| evaluating individuals and qualifications to become directors |
| recommending nominees for committees of the Board |
| assisting the Board with matters concerning corporate governance practices |
| overseeing ESG initiatives and considerations |
The governance committee may from time to time delegate all or a portion of its duties and responsibilities to a subcommittee.
Executive and Acquisitions Committee
Our executive and acquisitions committee currently consists of Messrs. Clarke, Hagerty, Jones and Sloan and is chaired by Mr. Clarke. The executive and acquisitions committee held no meetings in 2022, as all acquisitions were discussed with the full Board. The executive and acquisitions committee is responsible for addressing important Company matters, including capital expenditures, investments, acquisitions, dispositions and financing activities, that the Chairman of the Board determines should be addressed before the next scheduled meeting of the Board.
Information Technology and Security Committee
Our information technology and security committee consists of Messrs. Farrelly, Buckman, Macchia and Sloan and Ms. Bexiga, and is chaired by Mr. Farrelly. The information technology and security committee held four meetings in 2022. The information technology and security committee is responsible for providing oversight and leadership for our information
technology security and cybersecurity, planning processes, policies and objectives. In furtherance of this role, the primary purpose of the committee is to review, assess and make recommendations regarding the long-term strategy for global information security and the evolution of our technology in a competitive environment.
To accomplish this purpose, the information technology and security committee has five primary responsibilities:
| understanding the security controls and assessments conducted on our major payment platforms and comparing same to industry best practices |
| evaluating strategies to protect our intellectual property |
| assessing opportunities to update our processing platform strategies to ensure the long term effective and efficient use of our resources |
| reviewing progress on significant IT security and cybersecurity projects and evaluating effectiveness of projects |
| overseeing our disaster recovery and business continuity plans |
Strategic Review Committee
As described above, we entered into the Cooperation Agreement in March 2023, pursuant to which we formed an ad hoc strategic review committee. Our strategic review committee currently consists of Messrs. Clarke, Hagerty, Gupta and Sloan and Ms. Bexiga, and is chaired by Mr. Clarke. The strategic review committee is responsible for the consideration of a possible separation of one or more businesses of the Company, whether by sale, spin-off or split-off or other transaction.
Board Leadership
Our corporate governance guidelines provide that our Board will include a majority of independent directors. Our CEO serves as the Chairman of the Board and has served as such since 2003. While we believe this leadership structure has been effective, since 2020 a Lead Independent Director has served as a representative of the independent, non-employee directors of the Board and exercise additional powers and responsibilities in connection with Board meetings. The Lead Independent Director will serve a one-year term, which expires at each annual meeting of shareholders. Mr. Stull has served as Lead Independent Director since 2020, with his term ending at the annual meeting. The Board expects that, if elected at the annual meeting, Mr. Stull will be appointed to serve another term as Lead Independent Director until the 2024 annual meeting.
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
The Lead Independent Director has the following powers and responsibilities:
| preside at all meetings of the Board at which the Chairman of the Board is not present |
| preside over executive sessions of the non-employee directors |
| serve as liaison between the non-employee directors and the Chairman and the CEO |
| call meetings of non-employee directors, with appropriate notice |
| coordinate with the Chairman and CEO on meeting schedules, agendas and information provided to the Board |
| be available for consultation with significant shareholder if so requested and |
| exercise and perform such other powers and duties as may be assigned to the Lead Independent Director by the Board from time to time |
Our corporate governance guidelines provide that our non-management directors will meet in executive session, without management present, as frequently as they deem appropriate, and they typically meet in executive session at the time of each regular Board meeting. The Lead Independent Director presides during the meeting of independent directors, and acts as a liaison between the non-management directors and the chairman and CEO in connection with each regular meeting.
We believe that having a combined chairman and CEO, balanced with a Lead Independent Director, as well as a Board otherwise comprised solely of independent directors who meet regularly in executive session and independent chairs for the Board’s audit committee, compensation committee and governance committee and information technology and security committee provides an effective form of Board leadership and an appropriate balance between strategy development and independent oversight. The Board believes that having our CEO serve as Chairman of the Board facilitates the Board’s decision-making processes because Mr. Clarke possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company and its business. Accordingly, he is best positioned to develop agendas that ensure the Board’s time and attention is focused on the most critical matters. The combined role enables decisive leadership, ensures accountability and enhances our ability to communicate our message and strategy clearly and consistently to our shareholders, employees and customers.
Risk Oversight
Our Board, together with its committees, is responsible for overseeing our risk management. The chair of each committee reports to the full Board the significant risks facing the Company, as identified by management, and the measures undertaken by management for controlling and mitigating those risks.
| The audit committee is responsible for reviewing and approving the annual internal audit plan, our major financial and compliance risk exposures, steps taken to monitor and control such exposures, risk management and risk assessment policies, significant findings and recommendations and management’s responses. In addition, our internal audit function routinely performs audits on various aspects of operational risks and reports the results quarterly. |
| The compensation committee considers risks associated with our compensation policies and practices, with respect to both executive compensation and compensation generally. |
| The nomination and governance committee is responsible for succession planning, governance structure and processes, ESG initiatives and considerations, legal and policy matters with potential significant reputational impact and shareholder concerns. |
| The information technology and security committee focuses on risks associated with information technology and security, such as cybersecurity, security controls, technology initiatives and intellectual property protection. The information technology and security committee conducts reviews at least quarterly to oversee the efficacy of cybersecurity risk initiatives and related controls, policies, procedures, training, preparedness and governance structure. The Board and the information technology and security committee directed the formation of a cross-functional cybersecurity council at the Company, and receive regular cybersecurity reports from the global CIO, the corporate CIO and the chief information security officer, among others. |
Our Board, with input from the various committees and senior management, regularly engages in discussing the most significant risks and how the risks are being managed. Our management team is responsible for identifying and working with the Board to manage business risk and design a risk framework, including setting boundaries and monitoring risk appetite. We believe that our leadership structure, as described above, supports the risk oversight function of the Board.
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
Director Independence
Our corporate governance guidelines provide that a majority of our directors will be independent. Our Board has adopted director independence guidelines to assist in determining each director’s independence. These guidelines are included in our corporate governance guidelines available on our website at https://investor.FLEETCOR.com. The guidelines exceed the independence requirements of the NYSE. Under the director independence guidelines and NYSE rules, the Board must annually review each director’s independence and affirmatively determine a director has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The Board has analyzed the independence of each director and determined that, except for our CEO, they each meet the standards of independence under our director independence standards, and applicable NYSE listing rules, including that each member is free of any relationship that would interfere with their individual exercise of independent judgment.
2022 Director Compensation
The non-employee members of our Board receive compensation for serving as directors. Our Board believes restricted stock awards are an appropriate form of compensation for our directors because the value of the grants increases as the value of our stock price increases, aligning the interests of these directors with those of our shareholders.
Annual grants for director service for 2022 had a target value at grant of approximately $300,000. The amount of these grants was determined based on our Board’s general experience with market levels of director compensation. In addition, the Board approved a cash payment in the amount of $75,000 for each independent committee Chair serving in such capacity in January 2022 (Messrs. Farrelly, Hagerty, Macchia and Stull and Ms. Moddelmog). The decision to provide cash compensation is reviewed on an annual basis. All members of our Board are reimbursed for actual expenses incurred in connection with attendance at Board meetings. Mr. Clarke does not receive any compensation for service on our Board.
Our corporate governance guidelines set forth an expectation that all non-employee directors will hold at least a specified dollar amount of common shares or equity interests within five years of becoming a director. In 2019, our Board increased the stock ownership guideline from $150,000 to $1,250,000. Based on the closing stock price on December 31, 2022, eight of our non-employee directors are currently in compliance with this guideline and we expect that our three newest directors will meet the guideline within five years, as required by our Corporate Governance Guidelines.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Total ($) |
| Michael Buckman | — | $300,074 | $300,074 |
| Joseph W. Farrelly | $75,000 | $300,074 | $375,074 |
| Thomas M. Hagerty | $75,000 | $300,074 | $375,074 |
| Mark A. Johnson (1) | — | $300,074 | $300,074 |
| Archie L. Jones, Jr. | — | $300,074 | $300,074 |
| Richard Macchia | $75,000 | $300,074 | $375,074 |
| Hala G. Moddelmog | $75,000 | $300,074 | $375,074 |
| Jeffrey S. Sloan | — | $300,074 | $300,074 |
| Steven T. Stull | $75,000 | $300,074 | $375,074 |
(1) Ms. Bexiga was appointed to the Board effective January 27, 2023, replacing Mr. Johnson; and Mr. Gupta was appointed to the Board effective March 15, 2023.
(2) Consisted of shares of restricted stock, which vested on January 24, 2023. The value for stock awards in this column represents the grant date fair value, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. On December 31, 2022, each non-employee director had 1,331 shares of restricted stock outstanding.
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
Director Qualifications
The qualifications for directors are described in our corporate governance guidelines, which is available on our website.
The Boarddoes notcurrently apply any minimum qualifications or require that a director have specified qualities or skills in order to be considered for a position as a director. The Board recognizes the value of diversity among its members and the impact it can have on the performance of the Board. In addition to a director’s professional experience that will benefit our business, we seek to have a Board which represents diversity in professional experiences, viewpoints, gender, age, race, ethnicity, sexual orientation, nationality and cultural background.
Our corporate governance guidelines provide that no director should serve on more than four other public company boards, unless the governance committee determines otherwise.
Directors are expected to advise the Chairman of the Board and the governance committee Chair in advance of accepting an invitation to serve on another public company board.
The Board has not limited the number of years for which a person may serve as a director or require a mandatory retirement age, because such limits could deprive us of the valuable contributions made by a director who develops, over time, significant insights into us and our operations.
The re-nomination of existing directors is not viewed as automatic, but is based on continuing qualification under the criteria stated above. In addition, the committee considers the existing directors’ performance on the Board and any committee.
Director Nomination Process
Selection of Director Nominees: Our governance committee is responsible for evaluating candidates for election or appointment to our Board based on the criteria discussed above. The governance committee considers candidates identified by it, other directors, executive officers and shareholders, and, if desired, a third-party search firm. The committee selects nominees to recommend to the Board, which considers and makes the final selection of director nominees and directors to serve on its committees.
In addition, as outlined above, pursuant to the terms of the Cooperation Agreement, in March 2023 we agreed to nominate Mr. Gupta and agreed to add a second new director.
Shareholder Recommendations of Nominees:
The governance committee of the Board considers recommendations for candidates for nomination to the Board by shareholders. The governance committee will consider and evaluate candidates recommended by shareholders in the same manner as candidates recommended from other sources. If the Board determines to nominate a shareholder-recommended candidate and recommends his or her election, then that nominee will be named in the proxy statement for the next annual meeting.
Shareholder recommendations must be addressed to:
FLEETCOR Technologies, Inc.
Attention: Corporate Secretary
DIRECTOR CANDIDATE RECOMMENDATION
3280 Peachtree Road, Suite 2400
Atlanta, Georgia 30305
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03. CORPORATE GOVERNANCE AND BOARD MATTERS
Proxy Access Nominations:Our Bylaws establish procedures for nominations by eligible shareholders of candidates for election as directors at an annual meeting and to have those nominees included in our proxy materials. To be timely for consideration at our 2024 annual meeting, a shareholder’s proxy access notice to the corporate secretary regarding a proxy access director nomination must be received no earlier than November 28, 2023, and no later than December 28, 2023. However, in the event that the 2024 annual meeting is called for a date that is not within thirty days of June 9, 2024, notice by the shareholder must be received by no later than the tenth day following the date of the public announcement.
Shareholder proxy access nominations must be addressed to:
FLEETCOR Technologies, Inc.
Attention: Corporate Secretary
PROXY ACCESS DIRECTOR NOMINEE
3280 Peachtree Road, Suite 2400
Atlanta, Georgia 30305
Contacting the Board:Shareholders and other interested parties can contact the Board as a group or the non-management directors as a group as follows:
For the Board as a whole: FLEETCORBoard@FLEETCOR.com
For the non-management directors: FLEETCORNonManagementDirectors@FLEETCOR.com
The Corporate Secretary reviews all written and emailed correspondence received from shareholders and other interested parties and forwards such correspondence periodically to the directors if and as appropriate. Shareholders can submit communications anonymously or by identifying themselves.
Governance Policies
Complete copies of our corporate governance guidelines, committee charters and code of conduct are available on the Corporate Governance section of our website, at https://investor.FLEETCOR.com. In accordance with NYSE rules, we may also make disclosure of the following on our website:
| the method for interested parties to communicate directly with the presiding director or with the independent directors as a group |
| the identity of any member of our audit committee who also serves on the audit committees of more than three public companies and a determination by our Board that such simultaneous service will not impair the ability of such member to effectively serve on our audit committee |
| contributions by us to a tax exempt organization in which any independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year exceeded the greater of $1 million or 2% of such tax exempt organization’s consolidated gross revenues |
We will provide copies of any of the foregoing information without charge upon written request to:
FLEETCOR Technologies, Inc.
Attention: Corporate Secretary
3280 Peachtree Road, Suite 2400
Atlanta, Georgia 30305
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| 04. | INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL |
The following table sets forth the common shares beneficially owned by our directors, our chief executive officer, our chief financial officer and our next three most highly compensated executive officers, whom we refer to as our “named executive officers” or NEOS, and all persons known to us to own more than 5% of our outstanding common shares, as of February 17, 2023. Percentages are based on 73,491,592 shares outstanding as of February 17, 2023.
Name and Address(1) | Common Shares Beneficially Owned(2) | Right to | Total(4) | Percent(4) of Outstanding Shares(5) |
The Vanguard Group (6) Malvern, PA 19355 | 8,188,881 | — | 8,188,881 | 11.14% |
Blackrock, Inc.(7) 55 East 52nd Street | 5,357,207 | — | 5,357,207 | 7.29% |
Orbis Investments (8) Orbis House, 25 Front Street, | 4,821,926 | — | 4,821,926 | 6.56% |
Wellington Management Company LLP (9) Boston, MA 02210 | 4,641,692 | — | 4,641,692 | 6.32% |
Directors and NEOs: | ||||
| Ronald F. Clarke (10) | 1,973,950 | 2,125,000 | 4,098,950 | 5.4% |
| Alissa B. Vickery (11) | 1,848 | 25,741 | 27,589 | * |
| Charles Freund (12) | 24,585 | 29,559 | 54,144 | * |
| John S. Coughlin (13) | 4,717 | 131,547 | 136,264 | * |
| Alexey Gavrilenya (14) | 4,959 | 161,647 | 166,606 | * |
| Alan King(15) | 19,230 | 67,572 | 86,802 | * |
| Armando L. Netto (16) | 32,892 | 154,705 | 187,597 | * |
| Annabelle Bexiga (17) | 2,495 | — | 2,495 | * |
| Michael Buckman (18) | 22,136 | — | 22,136 | * |
| Joseph W. Farrelly (19) | 15,628 | — | 15,628 | * |
| Rahul Gupta (20) | — | — | — | * |
| Thomas M. Hagerty (21) | 8,812 | — | 8,812 | * |
| Mark A. Johnson (22) | 85,966 | — | 85,966 | * |
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| 04. | INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS, AND MANAGEMENT |
Name and Address(1) | Common Shares Beneficially Owned(2) | Right to | Total(4) | Percent(4) of Outstanding Shares(5) |
| Archie L. Jones Jr. (23) | 2,969 | — | 2,969 | * |
| Richard Macchia (24) | 14,247 | — | 14,247 | * |
| Hala G. Moddelmog (25) | 6,639 | — | 6,639 | * |
| Jeffrey S. Sloan (26) | 14,176 | — | 14,176 | * |
| Steven T. Stull (27) | 26,386 | — | 26,386 | * |
Directors and executive (17 Persons) | 2,261,635
| 2,695,771
| 4,957,406
| 6.5%
|
(1) The Special Meeting of Stockholders will be held at 10:00 a.m. on February 7, 2018 at our corporate offices at 5445 Triangle Parkway, Peachtree Corners, Georgia 30092.
(2) Unless otherwise noted, includes shares of common stock outstanding.
(3) This column includes shares that is subject to stockholder approval. That is, the A&R Plan does not include an automatic share replenishment provision (also known as an “evergreen” provision).
(4) This column includes common shares, outstanding, or our overhang percentage. Total overhang asrestricted shares, and shares that can be acquired through stock option exercises through April 18, 2023.
(5) *Less than 1%
(6) This information was reported on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 9, 2023 on behalf of nine affiliated Vanguard entities.
(7) This was reported on a Schedule 13G/A filed by Blackrock, Inc. with the endSEC on February 3, 2023 on behalf of 19 affiliated Blackrock entities.
(8) This information was reported on a Schedule 13G/A filed by Orbis Investment Management Limited (“OIML”); Orbis Investment Management (U.S.), L.P. (“OIMUS”) and Allan Gray Australia Pty Limited (“AGAPL”), with the third quarter in fiscal 2017 is approximately 10.0%, which is within customary levels for our peer group. If our stockholders approveSEC on February 14, 2023, on behalf of 3 affiliated Orbis entities.
(9) This information was reported on a Schedule 13G/A filed by Wellington Management Group LLP with the A&R Plan, the additional 3,500,000 shares proposed to be added to the share reserve would increase our overhang percentage to approximately 13.6% total. The Company has no warrants or convertibles.
(10) Includes 1,973,950 common shares outstanding, the Company’s three-year average equity grant share usage or burn rate for 2014 through 2016 was equaland vested options to 1.77% and for 2015 through December 28, 2017 was equal to 2.12%, which is below customary levels for the software and services industry. Actual grants and weighted averagepurchase 2,125,000 shares.
(11) Includes 956 common shares, outstanding used to calculate the basic burn rate are provided in the table below:
| Fiscal Year | Options Granted | Restricted Stock Granted | Weighted Average Common Shares Outstanding | Basic Burn Rate | 3 Year Average Basic Burn Rate | |||||||||
| 2017 | 2,884,838 | 238,365 | 91,136,467 | 3.43 | % | 2015 - 2017 = 2.12% | ||||||||
| 2016 | 1,779,949 | 152,206 | 92,597,286 | 2.09 | % | |||||||||
| 2015 | 654,166 | 126,015 | 92,023,168 | 0.85 | % | 2014 - 2016 = 1.77% | ||||||||
| 2014 | 1,544,084 | 466,633 | 84,317,473 | 2.38 | % | |||||||||
(12) Includes 24,585 common shares and upon the exercise of a related option, the rightvested options to exercise the SAR shall be cancelled,purchase 29,559 shares.
(13) Includes 4,717 common shares and (iv) a SAR granted as a part of an option shall be exercisable only while the related option is exercisable. Subjectvested options to the minimumpurchase 131,547 shares.
(14) Includes 4,959 common shares and vested options to purchase 161,647 shares.
(15) Includes 17,594 common shares, vested options to purchase 59,951 shares, options to purchase 7,621 shares vesting period discussed above, the Compensation Committee, in its discretion, may require completion of a period of service as an eligible employee or outside director and/or satisfaction of a performance requirement before a SAR may be exercised. At the discretion of the Compensation Committee, any payment due upon the exercise of a SAR can be made in cash or in the form of common stock. The Compensation Committee will not (except for adjustments as permitted by the A&R Plan in connection with a corporate transaction or change in control) take any action without stockholder approval to directly or indirectly reduce the SAR Value of any outstanding SAR or to make a tender offer for any SAR if the SAR Value exceeds the then fair market value of our common stock.
(16) Includes 29,821 common shares, vested options to the eligible employee or director. A “performance share” will have an initial value equalpurchase 108,439 shares, options to the fair market value of a share of stock on the date of grant. A “performance unit” will have an initial value that is established by the Compensation Committee at the time of grant. The Compensation Committee will set performance goals which, depending on the extent to which they are met during the performance period, and the satisfaction of applicable service-basedpurchase 46,266 shares vesting conditions, will determine the number or value of the performance shares or performance units that will vest (which number or value may be greater than the target number of performance shares or performance units granted to an eligible employee or director) and be paid to the eligible employee or director. At the close of the performance period, any earned performance shares will be paid in stock, and any earned performance units will be paid in the form of cash, stock, or a combination, unless otherwise specified in the stock grant certificate.
(17) Appointed director on the employee or director first signing an irrevocable stock power in favor of the Company in order for the Company to effect any forfeiture called for under the related stock grant certificate. If a dividend is paid in cash with respect to a share issued under a stock grant but before the first date that the employee’s or director’s interest in such share is vested, the Company shall delay the payment of such cash dividend until his or her interest in such share is vested. An employee or director shall have the right to voteJanuary 27, 2023. Includes 2,495 restricted shares of stock issued under his or her stock grant prior to the date the employee’s or director’s interest in such share becomes vested.
(18) Includes 20,639 common shares and other non-cash items or the growth in such earnings, (7) our earnings before interest and taxes or the growth in such earnings, (8) our consolidated net income or the growth in such income, (9) the value of our stock or the growth in such value, (10) our stock price or the growth in such price, (11) our return on assets or the growth in such return, (12) our cash flow or the growth in our cash flow, (13) our total stockholder return or the growth in such return, (14) our expenses or the reduction in such expenses, (15) our sales growth, (16) our overhead ratios or changes in such ratios, (17) our expense-to-sales ratios or changes in such ratios, (18) our economic value added or changes in such value added, (19) our gross margin or growth in such gross margin, or (20) our bad debt expense or the reduction in such bad debt expense. A performance goal may be set in any manner determined by the Compensation Committee, including looking to achievement on an absolute or relative basis in relation to peer groups or indexes, and the Compensation Committee may set more than one goal. No change may be made to a performance goal after the goal has been set. However, the Committee may express any goal in terms of alternatives, or a range of alternatives, as the Compensation Committee deems appropriate under the circumstances, such as including or excluding (1) any acquisitions or dispositions, restructuring, discontinued operations, extraordinary items and other unusual or non-recurring charges, (2) any event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management or (3) the effects of tax or accounting changes.
(19) Includes 14,131 common shares and stock grants are continued in full force and effect or there is an assumption or substitution of the options, SARs and stock grants in connection with a change in control, then, except as expressly provided in any option certificate, SAR certificate or stock grant certificate granted prior to the Effective Date of the A&R Plan, any conditions to the exercise of an eligible employee’s or director’s outstanding options and SARs and any issuance and forfeiture conditions of outstanding stock grants will automatically expire and have no further force or effect on or after the date that the employee’s or director’s service terminates, if:
(20) Appointed director on March 15, 2023.
(21) Includes 7,315 common shares and the option price of the options and the SAR Value of the SARs, as well as the number, kind or class of1,497 restricted shares of common stock granted pursuant to stock grants under the A&R Plan, in order to preserve the aggregate intrinsic value of each such outstanding option, SAR and stock grant immediately before such restructuring or recapitalization or other transaction.
(22) Includes 85,966 common shares.
(23) Includes 1,472 common shares and directors who hold1,497 restricted shares issued under a stock grant will have the right to vote such shares prior to the date such shares vest, but any dividends paid with respect such shares shall not be paid until such shares are vested.
(24) Includes 12,750 common shares and applications, which may vary in individual circumstances. Therefore, the following discussion is designed1,497 restricted shares subject to provide only a brief, general summary description of the U.S. federal income tax consequences associated with such grants, based on a good faith interpretation of the current U.S. federal income tax laws, regulations (including certain proposed regulations)vesting requirements.
(25) Includes 5,142 common shares and judicial1,497 restricted shares subject to vesting requirements.
(26) Includes 12,679 common shares and administrative interpretations. The following discussion does not set forth (1) any U.S. federal tax consequences other than income tax consequences or (2) any state, local or non-U.S. tax consequences that may apply.
(27) Represents 6,247 common stock on the date of exercise over the exercise price as an item of adjustment in computing the eligible employee’s alternative minimum taxable income. If the eligible employee does not dispose of ourshares held by Advantage Capital Financial Company, LLC (“Advantage Capital”) and related entities, and 20,139 common stock received pursuant to the exercise of the ISO within either (1) two years after the date of the grant of the ISO or (2) one year after the date of exercise of the ISO, a disposition of our common stock generally will result in long-term capital gain or loss to the individualshares held by Mr. Stull. Mr. Stull has shared voting power with respect to the difference between the selling priceshares held by Advantage Capital and the exercise price. We will not be entitled to any federal income tax deduction as a result ofmay be deemed to beneficially own such disposition. In addition, we normally will not be entitled to a federal income tax deduction at either the grant or the exercise of an ISO.
| Stock Grants (shares) | Option Awards | ||||||||||
| Name and Position | Shares | Weighted Average Exercise Price | |||||||||
Ronald F. Clarke Chief Executive Officer and Chairman of the Board of Directors | | 1,675,334 | 2,941,665 | $ | 76.60 | ||||||
Eric R. Dey Chief Financial Officer | 111,508 | 416,524 | $ | 81.66 | |||||||
John S. Coughlin Executive Vice President-Global Corporate Development | | 61,500 | 310,750 | $ | 134.01 | ||||||
Charles Freund Executive Vice President-Global Sales | 23,500 | 416,524 | $ | 81.66 | |||||||
Todd W. House (1) President-North America Direct Issuing, U.S. Telematics and Efectivale | 32,500 | 348,762 | $ | 90.10 | |||||||
| All Executive Officers, as a group (13 persons) | 2,044,400 | 6,019,529 | $ | 99.68 | |||||||
| All Non-Employee Directors, as a Group | | 108,591 | — | $ | — | ||||||
| All Non-Executive Officer Employees, as a Group | 564,701 | 6,004,312 | $ | 85.83 | |||||||
| 2023 Notice of Annual Meeting & Proxy Statement | 25 |
| Period Ending | FleetCor Technologies, Inc. | Russell 2000 | S&P Data Processing and Outsourced Services | S&P 500 | Dow Jones Industrial Average | |||||||||||||||
| 12/15/2010 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | ||||||||||
| 12/31/2010 | $ | 113.03 | $ | 102.78 | $ | 95.88 | $ | 101.83 | $ | 100.98 | ||||||||||
| 12/31/2011 | $ | 109.61 | $ | 96.43 | $ | 117.85 | $ | 101.81 | $ | 106.63 | ||||||||||
| 12/31/2012 | $ | 196.88 | $ | 110.54 | $ | 150.85 | $ | 115.46 | $ | 114.37 | ||||||||||
| 12/31/2013 | $ | 429.98 | $ | 151.44 | $ | 228.94 | $ | 149.64 | $ | 144.68 | ||||||||||
| 12/31/2014 | $ | 545.72 | $ | 156.79 | $ | 256.74 | $ | 166.68 | $ | 155.56 | ||||||||||
| 12/31/2015 | $ | 524.51 | $ | 147.83 | $ | 283.80 | $ | 165.47 | $ | 152.08 | ||||||||||
| 12/31/2016 | $ | 519.34 | $ | 176.63 | $ | 300.42 | $ | 181.25 | $ | 172.49 | ||||||||||
| 12/15/2017 | $ | 697.65 | $ | 199.18 | $ | 426.96 | $ | 216.62 | $ | 215.16 | ||||||||||
Our compensation policies and programs, the material compensation decisions we have made under those programspolicies and policiesprograms, and the material factors that we have considered in making those decisions. decisions are described in this section. Following this section is a series of tables containing specific information about the compensation earned or paid in 20162022 to the following individuals. We individuals we refer to these individuals as our “named executive officers” or “NEOs” “NEOs” for purposes of this proxy statement. statement, who are our Chief Executive Officer (“CEO”), each individual who served as our Chief Financial Officer (“CFO”) during 2022, and certain other highly paid current and former executive officers, in accordance with SEC rules. The discussion below is intended to explain the detailed information provided in the executive compensation tables contained in this section and to put that information into context within our overall compensation program.
Our named executive officersNEOs for 20162022 were:
Name | Position |
| Ronald F. Clarke | Chief Executive Officer and Chairman of the Board |
| Alissa B. Vickery | Interim Chief Financial Officer and Chief Accounting Officer(1) |
| Charles R. Freund | Former Chief Financial Officer and Secretary |
| Armando L. Netto | Group President, Brazil |
| Alan King | Group President, Global Fleet |
| Alexey Gavrilenya | Former Group President, North America Fuel |
| John S. Coughlin | Former Group President, Corporate Payments |
(1) As previously disclosed, we appointed Tom Panther as our Chief Financial Officer, effective May 12, 2023. We expect that Ms. Vickery will continue to serve as interim Chief Financial Officer until such date, at which point she will continue in her role as Chief Accounting Officer.
Leadership Transitions in 2022
On March 1, 2022, we announced the departure of Mr. Coughlin to pursue other opportunities. Mr. Coughlin remained with FLEETCOR as a senior advisor to help ensure a smooth transition of his responsibilities. On May 23, 2022, we announced the establishment of a new “global fleet organization,” combining our North America and International Fleet organizations into one. In connection with such change, Mr. King was promoted to lead the new combined global fleet organization, and Mr. Gavrilenya, former Group President North America fleet, ceased serving in that role. Mr. Gavrilenya remained with FLEETCOR as a senior advisor until December 31, 2022, to help ensure a smooth transition of his responsibilities.
On September 22, 2022, Mr. Freund notified FLEETCOR of his decision to resign as Chief Financial Officer effective October 3, 2022. Mr. Freund remained with FLEETCOR in a consulting capacity until December 31, 2022 to help ensure a smooth transition of his responsibilities. In connection with Mr. Freund’s departure, Ms. Vickery, our Chief Accounting Officer, was appointed to serve as our interim Chief Financial Officer.
Ms. Vickery’s compensation for 2022 was established prior to her appointment as our interim Chief Financial Officer. Therefore, certain elements of her 2022 compensation differ in design and magnitude from the compensation of our other NEOs.
| 26 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Navigating the Opportunities of 2022
2022 Performance
FLEETCOR is a leading global business payments company that helps businesses spend less by enabling them to better manage their expense-related purchasing and vendor payments processes. FLEETCOR’s smarter payment and spend management solutions are delivered in a variety of ways depending on the needs of the Board of Directors
Our unique positioning and focus on performance drove our results in our Management Discussion and Analysis contained in our annual report on Form 10-K for 2016, we accomplished2022. We realized impressive performance the following:
| Revenue of $3.4 billion, which was up 21% and Adjusted $16.10, also up 22%. |
Both of $4.75, an increase of 23% over 2015.
|
|
|
We meaningfully advanced our “beyond strategy” in 2022, extending both the product set and served customer segments in each of our major businesses. These beyond extensions increase our TAM, and better position our LOB for $1.3 billion, the second largest business acquisition in the Company’s history, a significant success that furthers the Company’s position in the Brazil tolls market, as well as three smaller acquisitions for approximately $75 million.
| In Global Fleet, we significantly advanced our Electric Vehicle (EV) capabilities, and the concept of “defensive” and “offensive” EV initiatives |
| In Brazil, we expanded our tag fueling solution to more accepting sites and |
| In Corporate Payments, we added AP automation workflow software to our |
|
We are squarely focused on the future, as net incomewe’ve captured more of the corporate payments value stream, and adjusted net income per diluted share at a compounded annual growth rate of 27% and 30%, respectively, sincepotential with our initial public offering. This financial performance has resulted in significant increase in value to our stockholders and the overall valuerecent acquisitions. Today, Corporate Payments revenue represents 25% of the Company since our initial public offering, resultingand is growing 20% year-over-year. We expect to capture much more business as the transition to newer, improved AP Automation processes gains steam.
And in significantly greater returns than any other Company in our sector, as well as compared to Russell 2000 index, S&P 500
| 2023 Notice of Annual Meeting & Proxy Statement | 27 |
05. COMPENSATION DISCUSSION AND ANALYSIS
Responsiveness to 2022 Say-On-Pay Vote
Our say-on-pay proposal at our 2022 Annual Meeting of stockholder returns, FleetCor’s performance has also been outstanding. The following graph assumes $100 invested on December 30, 2011, at the closing priceShareholders received approximately 35% approval. During 2022, we undertook engagement efforts to receive shareholder feedback regarding matters of importance to shareholders. Our engagement process included not only representatives of our common stock onexecutive team, but also our compensation committee Chair and additional Board members.
After we mailed our Proxy Statement for the 2022 Annual Meeting of Shareholders, we contacted our largest 10 shareholders as of December 31, 2021 (excluding our CEO) who at that day ($29.87), and compares (a) the percentage changetime held approximately 50.3% of our cumulative total stockholder returnoutstanding common shares in the aggregate. Based on the common stock (as measured by dividing (i) the difference between our share price at the endoutreach efforts and the beginningour review of the period presented by (ii) the share price at the beginningrecommendations of the periods presented) with (b) (i) the Russell 2000 index and (ii) the S&P 500® Data Processing & Outsourced Services index, (iii) the S&P 500® and (iv) the Dow Jones Industrial average.
| Period Ending | FleetCor Technologies, Inc. | Russell 2000 | S&P Data Processing and Outsourced Services | S&P 500 | Dow Jones Industrial Average | |||||||||||||||
| 12/31/2011 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | ||||||||||
| 12/31/2012 | $ | 179.61 | $ | 114.63 | $ | 128.00 | $ | 113.41 | $ | 107.26 | ||||||||||
| 12/31/2013 | $ | 392.27 | $ | 157.05 | $ | 194.26 | $ | 146.97 | $ | 135.68 | ||||||||||
| 12/31/2014 | $ | 497.86 | $ | 162.59 | $ | 217.85 | $ | 163.72 | $ | 145.88 | ||||||||||
| 12/31/2015 | $ | 478.51 | $ | 153.31 | $ | 240.81 | $ | 162.53 | $ | 142.62 | ||||||||||
| 12/31/2016 | $ | 473.79 | $ | 183.17 | $ | 254.91 | $ | 178.02 | $ | 161.76 | ||||||||||
2019-2023 CEO Equity Compensation. During the chairmanfive-year period of 2019-2023, Mr. Clarke has been granted two long-term equity awards:
| In 2019, 25,000 restricted stock performance shares with a grant date fair value of $9,473,750; and |
| In 2021, 850,000 performance-based stock options with stock price hurdles of $350 and $400, with a grant date fair value of $55,556,000. |
| Mr. Clarke has received no equity grants in 2020 and 2022, and has agreed to receive no long-term equity compensation in 2023. |
As of April 17, 2023, Mr. Clarke has not realized any compensation from his 2019 and 2021 equity awards (see table below):
| The 25,000 performance stock award from 2019 has been forfeited; and |
| The 850,000 performance stock option award from 2021 is “out-of-the-money”. |
Meanwhile, the compensation committee engaged in investor outreach on behalf of the committee. During 2014, the committee chairman spoke with investors representing more than 25% of our outstanding shares to better understand investor perspectives.
CEO Long-Term Equity Awards – 2019 through 2023
Fiscal Year | Award Type | Target | Grant Date Fair Compensation Table | Realized | Adjusted |
| 2019 | Performance Shares | 25,000 | $9,473,750 | $0 | $11.79 |
| 2020 | NONE | — | — | — | $11.09 |
| 2021 | Performance Stock Options | 850,000 | $55,556,000 | $0 | $13.21 |
| 2022 | NONE | — | — | — | $16.10 |
| 2023 | NONE | — | — | — | TBD |
| Total for Five-Year Period (2019-2023) as of April 17, 2023: | $65,029,750 | $0 | ||
| 28 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Performance Period for Non-CEO Equity Awards. We continue to grant performance-based equity compensation awards to our NEOs other than Mr. Clarke that are scored based on performance achievement over certainone-year performance goals andmeasurement periods. Our performance-based restricted stock unit awards, to the potential misperceptionextent earned, are subject to ratable vesting over a three-year service period, which we believe enhances our ability to retain talented executives.
Disclosure of Performance Targets. We continue to believe that the performance measures were not challenging enough, likely due to delays between the date the committee initially considered the performance goals and the date the performance goals were actually approved.
Shareholder Outreach Generally
Our Board and management have taken a long-term incentives. We endeavor to align a significant portion of our named executive officers’ compensation to our ongoing success and with the returns provided to our stockholders.
| Sales | Market Cap | EBIT | EBIT Margin | ||||||||||
| PVH Corp. | $ | 8,203 | $ | 7,927 | $ | 794 | 10% | ||||||
| Affiliated Managers Group Inc. | $ | 2,215 | $ | 9,204 | $ | 705 | 32% | ||||||
| B/E Aerospace Inc. | $ | 2,933 | $ | 6,586 | $ | 529 | 18% | ||||||
| Equinix Inc. | $ | 3,612 | $ | 30,979 | $ | 619 | 17% | ||||||
| United Rentals Inc. | $ | 5,762 | $ | 10,617 | $ | 1,608 | 28% | ||||||
| Hollyfrontier Corp. | $ | 10,556 | $ | 4,961 | $ | 550 | 5% | ||||||
| Sunoco Logistics Partners LP. | $ | 9,216 | $ | 7,712 | $ | 815 | 9% | ||||||
| Colfax Corp. | $ | 3,647 | $ | 4,921 | $ | 323 | 9% | ||||||
| Under Armour Inc. | $ | 4,825 | $ | 7,527 | $ | 420 | 9% | ||||||
| Polaris Industries Inc. | $ | 4,517 | $ | 5,165 | $ | 350 | 8% | ||||||
| Ulta Salon Cosmetics and Fragrances | $ | 4,855 | $ | 17,810 | $ | 655 | 13% | ||||||
| Ocwen Financial Corp. | $ | 1,388 | $ | 678 | $ | 164 | 12% | ||||||
| Median | $ | 4,671 | $ | 7,619 | $ | 584 | 11% | ||||||
| FleetCor Technologies Inc. | $ | 1,832 | $ | 13,368 | $ | 754 | 41% | ||||||
| Sales | Market Cap | EBIT | EBIT Margin | |||||||||||
| Intuit Inc. | $ | 4,694 | $ | 30,357 | $ | 1555 | 33 | % | ||||||
| Fidelity National Information Services | $ | 9,241 | $ | 26,329 | $ | 2,361 | 26 | % | ||||||
| Fiserv Inc. | $ | 5,505 | $ | 24,945 | $ | 1,445 | 26 | % | ||||||
| Alliance Data Systems Corp. | $ | 7,138 | $ | 13,329 | $ | 1,266 | 18 | % | ||||||
| Western Union Co. | $ | 5,419 | $ | 9,296 | $ | 1,105 | 20 | % | ||||||
| Total System Services Inc. | $ | 4,170 | $ | 9,580 | $ | 573 | 14 | % | ||||||
| Global Payments Inc. | $ | 6,474 | $ | 11,847 | $ | 816 | 13 | % | ||||||
| Henry (Jack) & Associates | $ | 1,355 | $ | 7,264 | $ | 342 | 25 | % | ||||||
| Vantiv Inc. | $ | 3,579 | $ | 10,163 | $ | 833 | 23 | % | ||||||
| Wex Inc. | $ | 1018 | $ | 4,448 | $ | 195 | 19 | % | ||||||
| Verifone Systems Inc. | $ | 1,992 | $ | 1,999 | $ | 258 | 13 | % | ||||||
| Median | $ | 4,694 | $ | 10,163 | $ | 833 | 20 | % | ||||||
| FleetCor Technologies Inc. | $ | 1,832 | $ | 13,368 | $ | 754 | 41 | % | ||||||
| Period Ending | FleetCor Technologies, Inc. | Russell 2000 | S&P Data Processing and Outsourced Services | Performance Peer Group Average | Industry Peer Group Average | |||||
| 12/31/2011 | $100.00 | $100.00 | $100.00 | $100.00 | $100.00 | |||||
| 12/31/2012 | $175.56 | $112.90 | $127.24 | $162.21 | $114.27 | |||||
| 12/31/2013 | $383.41 | $154.68 | $193.11 | $209.93 | $171.69 | |||||
| 12/31/2014 | $486.62 | $160.14 | $216.56 | $219.59 | $190.65 | |||||
| 12/31/2015 | $467.70 | $150.99 | $239.38 | $197.73 | $205.12 | |||||
| 12/31/2016 | $463.09 | $180.40 | $253.40 | $226.15 | $215.08 | |||||
Forward-Leaning Compensation Practices
FLEETCOR has embraced best practices in our compensation consultant’s studies revealed two important findings:
|
| Base salary levels generally at or below peer median |
| Target annual cash incentives generally at or below peer median |
| Significant portion of NEO compensation generally delivered in the form of equity-based awards |
| Different performance metrics for different compensation components |
| Incentive payouts tied closely to achieving published guidance where applicable |
| Significant stock ownership requirements |
| No repricing or cashing out of underwater stock options or stock appreciation rights |
| No hedging or pledging of common shares |
| No excise tax gross-ups |
| No excessive perquisites |
| Maintain a compensation clawback policy |
| Double-trigger change of control provisions |
| Below-market severance coverage |
| Shareholder engagement includes governance committee Chair, additional Board members and management |
| Regular review of compensation programs |
| Utilize an independent compensation consultant |
| 2023 Notice of Annual Meeting & Proxy Statement | 29 |
05. COMPENSATION DISCUSSION AND ANALYSIS
We structure our executive compensation program to incorporate, on an ongoing basis, sound practices that are favored by shareholders, while avoiding practices that we do not believe are in shareholders’ best interests. The table below highlights the compensation practices we embrace and those that we do not follow:
| Things We Do | Things We Do Not Do |
√ NEO incentive pay is tied to multiple financial performance conditions, and equity-based incentives are denominated in common shares √ Significant portion of NEO pay is tied to performance objectives that align with our business strategy √ Annual equity run rate and overhang are consistent with typical practices among similarly situated companies √ All change in control protections are “double-trigger” √ NEO incentives are tied to Company-wide initiatives and/or division objectives within such NEOs’ control √ Severance benefit levels for executives are well below general market practices √ We monitor and build risk-mitigation features into our compensation programs | X Directors and X No repricing or cashing-out of underwater stock options or stock appreciation rights X No excise tax gross-ups X No current payment of dividends on unvested equity awards X No excessive perquisites X No “single trigger” change in control provisions |
Components of Compensation and Target Direct Compensation Mix
The following table sets forth the key elements of our 2022 NEO compensation programs:
What We Pay | Why We Pay It | Key Features |
Base Salary | Attract and retain high-performing executives by providing a secure and appropriate level of base pay | Established after consideration of peer practices and internal parity; reviewed annually and subject to adjustment |
Annual Cash Incentive | Encourage and reward accomplishment of annual operating plan and individual objectives | Generally only earned if we meet performance goals tied to our operating budget and strategic initiatives |
| 30 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
What We Pay | Why We Pay It | Key Features |
Equity-Based Awards | Motivate performance and align a significant portion of NEO compensation with our ongoing success and with shareholder returns |
|
Employee Benefits and Perquisites | Attract and retain executive talent |
|
Our mix of compensation better aligns the employeeelements is designed to reinforce business and strategic objectives, recognize and reward performance, motivate long-term value creation, and align our NEOs’ interests with those of our stockholdersshareholders. We generally achieve this through a combination of cash and helps ensure goals remain aligned to continueequity awards.
The Company is responsible for allocating capital in a manner that is in the significantbest interest of its shareholders in line with the stated objective of growing Adjusted EPS between 15%-20% per year over the mid-term. Some portion of this growth thatis contingent on effective capital allocation in the form of acquisitions and/or share buybacks as a use for our free cash flow.
As part of our existing stock repurchase program, the Company has experienced sinceregularly repurchased shares that it viewed as undervalued, and thus would provide a better return to shareholders
compared with other alternatives at the time. Also, repurchases are used to offset the dilutive effect of the issuance of shares to executives under equity compensation plans, including the exercise price of options, and the use of shares in acquisitions.
The Company aligns its executive compensation arrangements with its overall capital allocation strategy that maximizes shareholders’ interests, and share repurchases are accordingly not excluded from our initial public offering.
| 2023 Notice of Annual Meeting & Proxy Statement | 31 |
05. COMPENSATION DISCUSSION AND ANALYSIS
The compensation committee strives to achieve an appropriate mix between fixed versus variable pay and cash payments and equity incentiveversus equity- based compensation awards in order to meet our compensation objectives. Our compensation committee does not have any formala rigid policy for allocating compensation between short-term andshort-and long-term compensation and cash and non-cash compensation. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivate our executive officersNEOs to deliver superior performanceshareholder return and retain them to continue their careers with us on a cost-effective basis.
The ultimate compensation levels earned byreflect the named executive officers reflect the
Our chief executive officerCEO has the greatest responsibility in managing and driving the performance of our Company. He joined our companyCompany in 2000, and has managed our significant growth through a combination of organic initiatives, product and service innovation and over 70 acquisitions of businesses and commercial account portfolios, growingand has overseen the growth of our revenue from $33.0 million in 2000 to over $1.8approximately $3.4 billion in 2016.2022.
The charts below illustrate the 2022 total target direct compensation mix for our CEO and our continuing NEOs other than the CEO (on average), consisting of base salary, target annual cash incentives, and target equity-based incentives. As discussed in more detail below, in 2022 our CEO was not granted any equity compensation awards, because the 2021 CEO Performance Option was intended to serve as the long-term equity incentive portion of his total compensation for the period from 2020 through 2023. Therefore, the compensation mix for our CEO in the applicable chart below includes a resultquarter of ourthe total target value of the performance-based stock option award we granted to Mr. Clarke in 2021 (the “2021 CEO Performance Option”), even though such award was granted in 2021. The compensation committee’s assessment of our chief executive officer’s roleMessrs. Freund, Gavrilenya and responsibilities within ourCoughlin is not factored into the “Non-CEO NEOs” chart below because such individuals ceased serving in their officer positions during 2022.
| 32 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Equity Compensation in Prior Fiscal Years
As previously disclosed, we granted the 2021 CEO Performance Option to Mr. Clarke in September 2021. In connection with the grant of the 2021 CEO Performance Option, Mr. Clarke agreed not to receive any other long-term equity grants in 2021, 2022 or 2023.
The 2021 CEO Performance Option is intended to further align Mr. Clarke’s compensation interests with the Company his nearly 17 yearsstock price performance interests of the Company’s shareholders, and to help retain Mr. Clarke’s service to our Companyduring the period of time covered by the award. In considering and approving the competitive market for chief executive officer compensation, there is a significant compensation differential between his compensation levels and those of our other named executive officers.
The 2021 CEO Performance Option covers 850,000 shares of our common stock at an exercise price of $261.27 per share, which was the fair market value of our common stock on the grant date. However, the option will vest only if we achieve specific stock price hurdles. Achievement of each stock price hurdle requires that our stock price exceed the hurdle for ten consecutive trading days not later than December 31, 2024 (in other words, only 3.25 years after the date of grant). The
stock price hurdle for 550,000 shares subject to the award is $350, and the stock price hurdle for the remainder of the award is $400.
The compensation committee considers achievement of each of the stock price hurdles to represent a significant challenge. The hurdles reflect stock price appreciation of 34% and 53%, respectively, from the closing price of our common stock on the grant date. As of April 17, 2023, the closing price per share of our common shares was $222.09, neither of the stock price hurdles for the 2021 CEO Performance Option had been met, and the 2021 CEO Performance Option was significantly “underwater.” However, notwithstanding these rigorous goals, due to the accounting standards that apply to stock option awards, the 2021 CEO Performance Option had significant “grant date fair value” (as determined pursuant to SEC rules) for purposes of the compensation tables included in last year’s proxy statement.
Mr. Clarke generally must continue to provide services to the Company over an 18-month vesting period to be eligible to vest in the full award (which vests over time in ratable installments every six months), regardless of our performance-basedstock price performance. Although the 2021 CEO Performance Option allows for vesting in the event of certain terminations of employment and industry-based peer groups,in connection with a change in control (on a “double trigger” basis), in all events the applicable stock price hurdles must be achieved in order for Mr. Clarke to vest in the award.
The table below outlines the performance metrics that were used in the CEO’s 2022 pay program, which metrics were selected to drive a focus on corporate objectives that are expected to produce an increase in shareholder value:
Pay Element | Performance Metric(s) | Rationale and Key Features |
Annual Cash | GAAP Revenue, as Adjusted (25% weight) | Revenue growth is critically important to our success given the operating leverage in our business |
Adjusted EPS, as Adjusted (1) (25% weight) | Earnings per share performance aligns with shareholder objectives | |
M&A and Other Transactions (25% weight) | We expect M&A and other transactions to continue to contribute to growth | |
| Growth and Other Initiatives (25% weight) | Drive initiatives to improve financial results |
(1) For purposes of the incentive compensation awards described in this Compensation Discussion and Analysis, “Adjusted EPS, as well asadjusted” is Adjusted EPS, further adjusted to exclude the general industry as a whole.impact of fuel prices, fuel price spreads, foreign exchange rates, acquisitions, and dispositions.
| 2023 Notice of Annual Meeting & Proxy Statement | 33 |
05. COMPENSATION DISCUSSION AND ANALYSIS
Key Elements of 2022 Named Executive Officer Compensation
Base salaries are reviewed annually, and adjusted from time to time, taking into account individual responsibilities, individual performance, for the year, the experience of the individual, current salary, retention incentives, internal equity and the compensation committee’s evaluation of the competitive market, based on its general market experience.market. No particular weight is assigned to each factor.
these factors. Based on its consideration of these factors, the compensation committee approved increases to the base salary rates of Mr. Clarke and Mr. Netto for 2022. In setting Mr. Clarke’s base salary rate for 2022, the compensation committee specifically considered the need to properly incentivize Mr. Clarke. The table below illustrates the 2022 base salaries for our NEOs:
| Named Executive Officer | 2021 Base Salary Rate | 2022 Base Salary Rate | % Increase |
| Ronald F. Clarke | $1,000,000 | $1,200,000 | 20% |
| Alissa B. Vickery | $225,000 | $250,000 | 11.1% |
| Charles R. Freund | $450,000 | $450,000 | 0% |
| Armando L. Netto (1) | $445,371 | $487,272 | 9.4% |
| Alan King (1) | $372,563 | $372,563 | 0% |
| Alexey Gavrilenya | $400,000 | $400,000 | 0% |
| John S. Coughlin | $450,000 | $450,000 | 0% |
(1) Mr. Netto’s cash compensation is denominated in Brazilian Real, and, at the time 2022 base salary determinations were made, Mr. King’s cash compensation was denominated in British Pounds Sterling. For purposes of this table and to normalize for fluctuations in the currency exchange rate, cash amounts for Mr. Netto have been converted to U.S. dollars at an average exchange rate of $1 to R$5.1535 for 2022, and cash amounts for Mr. King have been converted to U.S. dollars at an average exchange rate of $1 to £0.8080 for 2022. The 2021 base salary rate for Mr. Netto may not be comparable to the 2021 base salary rate reported for him in our 2022 proxy statement, as we used a 2021 exchange rate calculation for purposes of such disclosure in the prior filing.
| Annual Salaries | |||||||||||
| Executive | 2015 Salary | 2016 Salary | Increase | ||||||||
| Ronald F. Clarke | $ | 1,000,000 | $ | 1,000,000 | — | ||||||
| Eric R. Dey(1) | $ | 344,231 | $ | 373,077 | 7 | % | |||||
| John S. Coughlin(2) | $ | 372,116 | $ | 398,077 | 7 | % | |||||
| Charles Freund(3) | $ | 315,384 | $ | 343,077 | 8 | % | |||||
| Todd W. House(4) | $ | 372,116 | $ | 398,077 | 7 | % | |||||
The primary objectives of our annual cash incentive compensation program are to provide an incentive for superior work, to motivate our employeesNEOs toward even higher achievement and business results and to tie our employees’NEOs’ goals to Company performancethe Company’s performance. We use Company-wide, individual and to enable us to attract and retain highly qualified individuals. The annual cash incentive program is intended to compensate our executive officers for achieving company-wide or individual or business unit performance goals that are important toin our success during the fiscal year. Certain goals, which tie directly to our operating budget, we believe, are attainable with good performance. Other goals, which we refer to as “stretch targets”, are considered far more difficult to achieve and in general require extraordinary performance to attain.
In January 2022, the compensation committee determined the target annual cash incentive payout levels for the NEOs based on a combination of factors, including each NEO’s role and responsibilities, experience and skills, expected contribution to the Company and potential impact of the NEO’s performance on revenue and net income growth. Based on such factors, and after considering the need to properly incentivize Mr. Clarke, the compensation committee approved an increase of Mr. Clarke’s target annual cash incentive award from 100% of base salary to 150% of base salary. Due to the timing of Mr. Gavrilenya’s and Mr. Coughlin’s cessation of service in their individual or business unitprior officer roles, they were not eligible for 2022 annual cash incentive awards. Target amounts below are shown as a percent of each participating NEO’s base salary:
| Named Executive Officer | Annual Cash Incentive Target (as % of Base Salary) |
| Ronald F. Clarke | 150% |
| Alissa B. Vickery | 30% |
| Charles R. Freund | 75% |
| Armando L. Netto | 75% |
| Alan King | 75% |
| 34 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
2022 Performance Goals and Results
The compensation committee and the CEO work together to establish meaningful performance goals whichfor the CEO’s annual cash incentive award at the beginning of the performance period. These goals are reviewed by our chief executive officer and approved byintended to align CEO rewards with company performance. Based on achievement of the compensation committee. Certainapplicable performance goals, couldthe CEO’s annual cash incentive was designed to be paid out in amounts up to 200% of target.
Our CEO makes recommendations regarding individual and/or business unit performance goals, which are reviewed and approved by the individual targetcompensation committee, for our other NEOs.
Based on achievement of the applicable performance goals, all other NEOs’ annual cash incentives were designed to be paid out in amounts for performance exceeding objectives. Other goalsranging up to 150%.
Annual cash incentive awards could be paid out in amounts as low as 50% ofbelow the individual target amounts if actual performance achieved minimum thresholds.
The tables below illustrate, for each participating NEO, (1) the performance goals are based on achieving an earnings per share target based on adjusted net income. Adjusted net income is GAAP net income as reflected in our statement of income, adjusted to eliminate (a) non-cash stock based compensation expense related share-based compensation awards, (b) amortization of deferred financing costs and intangible assets (c) amortization of the premium recognized on the purchase of receivables, (d) our proportionate share of amortization of intangible assets at our equity method investment and (e) impairment of our equity method investment. The reconciliation of adjusted net income per diluted share to our GAAP numbers is provided on page 71 of our Form 10-Kapproved for the fiscal year ended December 31, 2016 and in Appendix A2022 annual incentive awards, (2) actual performance with respect to the proxy statement.goals (where applicable), and (3) the final 2022 annual cash incentive payout earned by the NEO (if any).
Ronald F. Clarke: Mr. Clarke’s award2022 annual cash incentive was determined as follows:
| GOALS | 2022 | ||||||||
Performance | Weighting | Target ($ values in | Threshold | Below | Target | Above | Maximum (200%) | Achievement | % of Target |
GAAP Revenue, as adjusted(1) | 25% | $3,220 | ≥98% | ≥99% | ≥100% | ≥101% | ≥102% | $3,331.4 | 200% |
| Adjusted EPS, as adjusted | 25% | Budget | ≥98% | ≥99% | ≥100% | ≥101% | ≥102% | 102% | 200% |
M&A (2) | 25% | $750 | Pays at 0.06% of total transaction value, up to a maximum payout of $900,000 | $474.2 | 67% | ||||
| Growth and Other Initiatives(3) | 25% | Achieve 2 goals | Achieve 1 goal | N/A | Achieve 2 goals | Achieve 3 goals | Achieve 4 or more goals | Achieved 3 goals | 150% |
| Target Payout | $1,800,000 |
| 154% | |
(1) Adjusted to be consistent with the macro-economic environment assumed in the 2022 budget, but excludes the impact of acquisitions.
(2) Based upon the aggregate transaction value of material mergers and acquisitions, divestitures or joint ventures for which the Company signs definitive documentation during the year.
(3) (a) Capture synergies from certain acquisitions (achieved); (b) Achieve global sales growth of specified amount (achieved); (c) Design, recruit and successfully test a new platform salesforce (not achieved); (d) Extend at least two big partner contracts (achieved); (e) Add 3 new large investors in 2022 (not achieved) and (f) Substantial growth of Sem Parar consumer fueling transactions (not achieved).
| 2023 Notice of Annual Meeting & Proxy Statement | 35 |
05. COMPENSATION DISCUSSION AND ANALYSIS
Alissa B. Vickery: Ms. Vickery’s 2022 annual cash incentive was determined as follows:
| GOALS | |||||||
Performance | Weighting | Target | Threshold | Target | Maximum | 2022 Achievement | % of Target Earned |
| Growth Initiatives (1) | 100% | Achieve 3 goals | Achieve 2 goals | Achieve 3 goals | Achieve 4 or more goals | Achieved 4 goals | 125% |
| Target Payout | $75,000 |
| Total Payout % Earned | 125% |
| Formulaic Payout | $93,750 |
| Discretionary Amount(2) | $56,250 |
| Total Payout | $150,000 |
(1) (a) Fill open staff positions (achieved), (b) resolution of certain accounting matters (not achieved), (c) implement certain software package (achieved), (d) remediate certain audit recommendations (achieved), and (e) prepare operational contingency plan (achieved).
(2) Reflects a discretionary increase in recognition of Ms. Vickery’s individual contributions during 2022, including as Interim Chief Financial Officer.
Charles R. Freund: Mr. Freund’s 2022 annual cash incentive was designed to be paid in accordance with the objectives set forth in the table below. However, due to Mr. Freund’s resignation from FLEETCOR, he was not eligible to receive any payout with respect to his 2022 annual cash incentive award, and the achievement results with respect to his performance objectives were not evaluated by the compensation committee.
GOALS | |||||
Performance Metric | Weighting | Threshold (50%) | Target (100%) | Maximum (150%) | |
Stock Price Growth vs. S&P 500 (1) | 30% | ≥2.5% | ≥5.0% | ≥7.5% | |
| Growth Initiatives(2) | 70% | Achieve 1 goal | Achieve 2 goals | Achieve 3 or more goals | |
| $337,500 |
(1) Based on extent to which percentage growth in the Company’s stock price exceeds that of the S&P 500 Index.
(2) (a) Achieve the operating expenses and capital expenditure budget, (b) new holders of company stock, (c) fill certain open roles, (d) negotiate certain new credit facilities, and (e) resolution of certain legal matters.
| 36 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Armando L. Netto:Mr. Dey attained 50% of his award, or $28,125, with the implementation of the new general ledger system in two European lines of business and remaining Shell markets in which the Company operates.
Performance |
Weighing |
Target |
Threshold |
Below |
Below |
Target |
Above | Below | Maximum | 2022 Achievement | % of Target |
Brazil Sales (1) | 60% | Budget | ≥91% | ≥93% | ≥99% | ≥100% | ≥103% | ≥106% | ≥109% | 96% | 70% |
Growth Initiatives (2) | 40% | Achieve 2 goals | Achieve 1 goal | N/A | N/A | Achieve 2 goals | N/A | N/A | Achieve 3 goals | Achieved 1 goal | 50% |
| Target Payout | $365,455 |
| Formulaic Payout | $226,582 |
| Discretionary Amount(3) | $64,482 |
| Total Payout | $291,064 |
(1) Targets are also subject to sales expense remaining in budget.
(2) (a) Add specified target of incremental fueling sites (achieved) and Increase Sem Parar consumer transactions by specified target (not acheived); (b) Achieve target Caixa revenue (not achieved); and (c) Move to ifood network (achieved).
(3) Reflects a discretionary increase in recognition of the year-over-year growth in our Brazil business.
Alan King: Mr. Freund’s awardKing’s 2022 annual cash incentive was determined as follows:
Performance | Weighing | Target | Threshold | Below | Below | Target | Above | Below | Maximum | 2022 Achievement | % of Target
|
Fuel Sales(1) | 60% | Budget | ≥91% | ≥93% | ≥99% | ≥100% | ≥103% | ≥106% | ≥109% | 106% | 135% |
Growth Initiatives (2) | 40% | Achieve 2 goals | Achieve 1 goal | N/A | N/A | Achieve 2 goals | N/A | N/A | Achieve 3 or more goals | Achieved 4 goals | 150% |
| Target Payout | $279,422(3) |
| 141% | |
(1) Targets are also subject to sales expense remaining in budget.
(2) (a) Achieve EV goal of greater than 20 live active EV clients within revenue requirements (achieved); (b) design, agree and staff global fleet organization (achieved);
(c) complete a particular acquisition (achieved); (d) re-sign specified partners by year-end (achieved).
(3) Mr. House's award was determined as follows:
| 2023 Notice of Annual Meeting & Proxy Statement | 37 |
05.COMPENSATION DISCUSSION AND ANALYSIS
Equity Awards
We believe that stock options are an effective tool for meeting our compensation goals because executives are able to profit from stock options only if our stock price increases relative to the stock
Our chief executive officerCEO makes equity award grant recommendations for each executive officer, including our named executive officersNEOs (other than himself). Grant recommendations are presented to the compensation committee for its review and approval.
2021 Performance Stock Option Award for CEO
In September 2021, as discussed above, the FleetCor Technologies, Inc. Amended and Restated Stock Incentive Plan, which we refer to as our “2002 Plan.” Since our initial public offering, we have granted time-based stock options, performance-based stock options, time-based restricted stock, market-based restricted stock and performance-based restricted stock to our employees, including our executive officers, under the FleetCor Technologies, Inc. 2010 Equity Compensation Plan, which we refer to as our “2010 Plan.”
Other NEOs’ 2022 Equity awards. During 2016,Awards
In January 2022, we granted the following equityequity-based incentive awards set forth in the table below to our NEOs other than the CEO:
Named | Performance $ Value) | Total | Performance- | Total Target | Stock | Stock | Special Retention Stock Options (Target $ Value) | Special |
| Alissa B. Vickery | $250,000 | 1,109 | — | — | $300,000 | 4,588 | — | — |
| Charles R. Freund | $335,000 | 1,486 | $1,200,000 | 5,323 | $1,200,000 | 18,352 | $1,200,000 | 18,352 |
| Armando L. Netto | $335,000 | 1,486 | $1,200,000 | 5,323 | $1,200,000 | 18,352 | $1,200,000 | 18,352 |
| Alan King | $335,000 | 1,486 | $1,200,000 | 5,323 | $1,200,000 | 18,352 | $1,200,000 | 18,352 |
| Alexey Gavrilenya | $335,000 | 1,486 | $1,200,000 | 5,323 | $1,200,000 | 18,352 | $1,200,000 | 18,352 |
| John S. Coughlin | $335,000 | 1,486 | $1,200,000 | 5,323 | $1,200,000 | 18,352 | $1,200,000 | 18,352 |
Performance Share Grants
The NEOs, other than Mr. Clarke, received 2022 Performance Share awards tied to Adjusted EPS, as adjusted, achievement. The Performance Shares could be earned if we achieved budgeted Adjusted EPS, as adjusted. Our Adjusted EPS for 2022 was $16.10, and the compensation committee determined that the Adjusted EPS, as adjusted, objective was achieved. As a result, the 2022 Performance Share awards were earned at 100%, and were paid in full in the form of common shares, except that Ms. Vickery’s earned Performance Shares are subject to service-based vesting over a two-year period.
Performance-Based Restricted Stock Unit (RSU) Grants
In addition to the Performance Shares, in 2022, we granted Performance-Based RSU awards to our named executive officers (excluding award modifications):each of the NEOs other than Mr. Clarke and Ms. Vickery tied to achievement with
| Name | Performance-based restricted stock | Time-based stock options | ||
| Ronald F. Clarke | 50,000 | 425,000 | ||
| Eric R. Dey | 1,460 | 44,000 | ||
| John S. Coughlin | 1,460 | 64,250 | ||
| Charles Freund | 1,460 | 44,000 | ||
| Todd W. House | 1,460 | 44,000 | ||
respect to corporate or business unit revenue goals. The Performance-Based RSUs earned by each of the NEOs in 2022 (based on the achievement of the applicable performance conditions. Such shares typically dogoals) are subject to a three-year ratable vesting schedule, pursuant to which the earned Performance-Based RSUs will generally vest in substantially equal installments on each of the first three anniversaries of the grant date.
The tables below illustrate, for each participating NEO, (1) the applicable performance goals for each NEO, (2) actual performance with respect to the performance metrics, and (3) the number of Performance-Based RSUs earned in 2022 that are eligible to vest on a ratable basis. The number of Performance-Based RSUs earned for performance falling between the “threshold” and “maximum” performance levels set forth in the table below was determined without interpolation between performance levels (subject to rounding). Because Ms. Vickery’s compensation for 2022 was established prior to her appointment as our interim Chief Financial Officer, she was not vest until these performance conditions have been satisfied. For 2016, approximately 80%eligible for a Performance-Based RSU award.
| 38 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Charles R. Freund: Mr. Freund’s 2022 Performance-Based RSU award was based on achievement against a target goal of stretch targets related to performance-based restricted stock grants were attained. The earning of these performance based restricted stock awards is indicativeCompany revenue (as adjusted). Because Mr. Freund ceased employment with the Company before the end of the performance of the Company during the same period.
Below
| Threshold
| Above
| Below Target
| Target
| Above Target
| Below Maximum (125%)
| Maximum (150%)
|
| <97% | 97% | 98% | 99% | 100% | 101% | 102% | ≥103% |
Armando L. Netto :Mr. Netto’s 2022 Performance-Based RSU award was based on Company-wideachievement against a target goal of net revenue, as adjusted, in the Brazil business.(1)
Below
| Threshold
| Above
| Below
| Target
| Above
| Below
| Maximum
| % of Target
| Payout %
| # of Performance Based RSUs Earned |
| <97% | 97% | 98% | 99% | 100% | 101% | 102% | ≥103% | 103% | 150% | 7,985 |
(1) Brazil net revenue was adjusted to be consistent with the macro-economic environment assumed in the 2022 budget, but excludes the impact of foreign exchange rates.
Alan King:Mr. King’s 2022 Performance-Based RSU award was based on achievement against a target goal of net revenue, as adjusted, in the International Fuel business.(1)
Below
| Threshold
| Above
| Below
| Target
| Above
| Below
| Maximum
| % of
| Payout %
| # of Performance
|
| <97% | 97% | 98% | 99% | 100% | 101% | 102% | ≥103% | 104% | 150% | 7,985 |
(1) International Fuel net revenue was adjusted to be consistent with the macro-economic environment assumed in the 2022 budget, but excludes the impact of foreign exchange rates, fuel prices and fuel price spreads.
Alexey Gavrilenya:Mr. Gavrilenya’s 2022 Performance-Based RSU award was based on achievement against a target goal of net revenue (as adjusted) in the North American Fuel business. Because Mr. Gavrilenya ceased employment with the Company before the end of the performance conditions. These awards are typically designed as stretchperiod, he was not eligible to receive a payout with respect to this award, and the compensation committee did not evaluate performance against the goals.
Below
| Threshold
| Above
| Below
| Target
| Above
| Below
| Maximum
|
| <97% | 97% | 98% | 99% | 100% | 101% | 102% | ≥103% |
John Coughlin :Mr. Coughlin’s 2022 Performance-Based RSU award was based on achievement against a target awards atgoal of net revenue (as adjusted) in the timeCorporate Payments business. Because Mr. Coughlin ceased employment with the Company before the end of grant. the performance period, he was not eligible to receive a payout with respect to this award, and the compensation committee did not evaluate performance against the goals.
Below
| Threshold
| Above
| Below
| Target
| Above
| Below
| Maximum
|
| <97% | 97% | 98% | 99% | 100% | 101% | 102% | ≥103% |
| 2023 Notice of Annual Meeting & Proxy Statement | 39 |
05. COMPENSATION DISCUSSION AND ANALYSIS
Stock Option Grants
The exercise price of each stock option grant is the fair market value of our common stock on the grant date (closing stock price) and typically vests over a
| Named Executive Officer | # of Options | # of Special Retention Stock Options | Total # of Options |
| Alissa B. Vickery | 4,588 | -- | 4,588 |
| Charles R. Freund | 18,352 | 18,352 | 36,704 |
| Armando L. Netto | 18,352 | 18,352 | 36,704 |
| Alan King | 18,352 | 18,352 | 36,704 |
| Alexey Gavrilenya | 18,352 | 18,352 | 36,704 |
| John S. Coughlin | 18,352 | 18,352 | 36,704 |
Prior-Year Equity Awards
In 2020, Mr. Netto was granted a retention equity award in the form of 35,000 performance-based stock options with an exercise price equal to the fair market value forof our stockholders.
| PERFORMANCE LEVEL | ||||||
Goal |
Weighting |
Threshold |
Target (100% earned)
|
Maximum
| Achievement | # of Stock
|
| Active Urban Plan Users (1) | 75% | N/A | Achieve 750,000 active Urban Plan Users by the first quarter of 2023 | N/A | 103% | 26,250 |
| Consumer Fueling Transactions (dollars in millions) | 25% | $2.25 | $3.0 | $3.75 | 80% | 4,375 |
(1) For purposes of this award, “Active Urban Plan Users” is the number of users of our Brazil toll product that are urban. If the “Target” level for this metric was achieved, then 100% of the impactportion of the macro-economic environment onoptions subject to this metric would vest. No options would be earned for this metric if performance was below the evaluation“Target” level, and the earned portion of executivethe options would not increase for performance above the “Target” level.
| 40 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Omission of Certain Goal Levels
We believe that disclosure of certain goal levels for our NEOs’ annual cash incentive and equity goal achievement. After several years of relatively steady diesel prices and foreign exchange rates, recent volatility in macro-economic factors made it difficult to measure executive performance in 2015 and 2016 in a manner consistent withawards described above would cause us competitive harm. However, we have provided information regarding the Company’s historic practices. As shown in the graphs below, diesel fuel prices remained relatively steady in 2012 through 2014 but took a sharp turn downward in 2015 and 2016. Similarly, exchange rates were relatively steady in 2012 through 2014 but also took an unfavorable turn in 2015 and 2016. As a result, the compensation committee shifted its methodology in 2016 to evaluate equity target achievementpayout levels that would be applied based on a steady macro-economic environment - i.e., holding fuel prices and foreign exchange rates steady to be consistent with 2014. This resulted in a modification to some awards in accordance with accounting guidance in ASC 718.
Other Compensation and equity target achievement consistent with the Company’s past practices, and implemented a neutral macro-economic methodology. This change to a neutral macro-economic methodology was applied uniformly to employee stretch targets for allBenefits
Employee Benefits. All U.S.-based salaried employees with stretch target equity goals, and resulted in the modification of and recognition of some awards in accordance with accounting guidance in ASC 718, including the vesting of a 2014 grant to Mr. Coughlin of 3,313 performance-based restricted shares.
Employment Agreements and Offer Letters; Severance and ChangeChange-in-Control Benefits. We entered into an employment agreement with our CEO in 2010. We have also entered into offer letter agreements with each of Control Benefits
After their cessation of employment in 2022, each of Messrs. Coughlin, Gavrilenya and Freund continued to serve FLEETCOR in a further discussionconsulting capacity to help ensure a smooth transition of these benefits, see “Employment agreementstheir responsibilities. Messrs. Gavrilenya and offer letters”Freund ceased such service on December 31, 2022, and “Potential payments on terminationMr. Coughlin is expect to continue such service until May 1, 2023. During such consulting service, each such officer is or change in control.”
Certain Perquisites. In 2022, we provided relocation benefits to Mr. King, in connection with his relocation from the United Kingdom to the United States. Also during 2022, we provided vehicle allowances to Mr. Netto and restricted stock award agreementsMr. King. For more information, see the “2022 Summary Compensation Table” below.
Process to Review, Revise, and Set Compensation
The compensation committee is responsible for administering our executive compensation program and making decisions with respect to the compensation paid to our NEOs. In making such decisions, the compensation committee considers a variety of factors, including:
| The compensation committee’s evaluation of the competitive market, including referencing peer group data |
| The feedback received from our shareholders and proxy advisory firms |
| The roles and responsibilities of our executives, including each executive’s impact on creating shareholder value |
| The individual experience and skills of, and expected contributions from, our executives |
| Pay relative to other NEOs at the Company |
| The individual performance of our executives during the year and the historical performance levels of our executives |
| Our overall financial performance |
Role of Independent Compensation Consultant: All services performed by Exequity were conducted under the direction or authority of the compensation committee. The compensation committee has considered the required independence factors outlined by the SEC and NYSE rules in assessing the independence of Exequity. Consideration was also given by the compensation committee under those required independence factors, plus all other relevant factors, to whether the work performed by Exequity could give rise to a potential conflict of interest. Based on this review, the compensation committee did not identify any conflict of interest raised by the work performed by Exequity.
| 2023 Notice of Annual Meeting & Proxy Statement | 41 |
05. COMPENSATION DISCUSSION AND ANALYSIS
Role of Management: Our CEO provides substantial input to the compensation committee in reviewing the performance of the other executive officers and making compensation recommendations for executive officers who report directly to him.
The CEO does not participate in determining the amount of his own compensation. Decisions regarding the compensation of our 2002 Plan do not provideCEO are made by the compensation committee.
Compensation Peer Group
We considered the compensation levels, programs and practices of industry peer companies to assist us in setting compensation for accelerated vesting under any circumstances.
The compensation committee last modified the peer group for purposes of 2021 compensation decisions, as disclosed in our 2022 proxy statement. The compensation committee evaluates multiple criteria in determining the appropriate peer group, including industry, revenue, market capitalization, competitors to our various lines of business, business models and profitability. The compensation committee determined that it was appropriate to continue to use the same peer group for purposes of 2022 compensation decisions for our NEOs.
The compensation committee referred to the exercise2022 Industry Peer Group (as defined below) in setting compensation for 2022 for our NEOs. Generally, the compensation committee references cash-based compensation at or below market levels and equity-based compensation (based on target levels) at or above market levels, resulting in total target compensation at or above the peer median for our CEO and generally below the peer median for our other NEOs. Although the compensation committee includes this market data and its general understanding of outstanding options and issuancecurrent compensation practices in the market in the overall mix of factors it considers in assessing NEO compensation, it does not target a mathematically precise market position for total compensation or forfeitureany individual element of outstanding stock grants will be deemed satisfied as
compensation. Comparisons to the peer group for purposes of this Proxy Statement are based on an adjustment of the effective datepeer group compensation data by the Company to account for the passage of time.
The peer group used for purposes of 2022 compensation decisions (the “2022 Industry Peer Group”) is illustrated in the following table:
| 2022 Industry Peer Group | |
| Alliance Data Systems Corporation | √ |
| Automatic Data Processing, Inc. | √ |
| Black Knight, Inc. | √ |
| Broadridge Financial Solutions, Inc. | √ |
| Ceridian HCM Holding Inc. | √ |
| Equifax Inc. | √ |
| Euronet Worldwide, Inc. | √ |
| Fair Isaac Corporation | √ |
| Fidelity National Information Services, Inc. | √ |
| Fiserv, Inc. | √ |
| Global Payments Inc. | √ |
| Intuit Inc. | √ |
| Jack Henry & Associates, Inc. | √ |
| Mastercard Incorporated | √ |
| Paychex, Inc. | √ |
| Paycom Software, Inc. | √ |
| SS&C Technologies Holdings, Inc. | √ |
| Wex, Inc. | √ |
| 42 | 2023 Notice of Annual Meeting & Proxy Statement |
05. COMPENSATION DISCUSSION AND ANALYSIS
Information on Other Compensation-Related Topics
Stock Ownership Policy. Our continuing executive officers (other than Ms. Vickery) are subject to stock ownership requirements (expressed as a changemultiple of base salary). In response to input in control, only ifour shareholder outreach process, we increased the stock ownership guideline requirements in 2019 to the following levels (which must be obtained within five years):
| Chief Executive Officer 6x |
| Chief Financial Officer 4x |
| All Other Executive Officers 3x |
Ms. Vickery, who is currently serving as our interim Chief Financial Officer and was not previously an executive officer, is not subject to the stock ownership requirements. Currently, all of our other continuing NEOs are in compliance with this policy or (in our view) are on track to meet the required ownership level within the applicable time period.
Insider Trading Policy. The Company maintains an insider trading policy applicable to all directors and employees. The policy provides that Company personnel may not buy, sell or engage in other transactions in the Company’s stock while in possession of material non-public information, buy or sell securities of other companies while in possession of material non-public information about those companies they become aware of as a result of a change in control allbusiness dealings between the Company and those companies, or disclose material non-public information to any unauthorized persons outside of the outstanding optionsCompany. The policy also restricts trading for a limited group of Company employees (including all directors and stock grants granted under the 2010 Plan are not continued in full forceNEOs) to defined window periods which align with our quarterly earnings releases.
Anti-Hedging and effect or there is no assumption or substitution of the options and stock grants (with their terms and conditions unchanged) in connection with such change in control. In addition, if outstanding options or stock grants are continued in full force and effect or there is an assumption or substitution of the options and stock grants in connection with a change in control, then any conditions to the exercise of an employee’s outstanding options and any issuance and forfeiture conditions of outstanding stock grants will automatically expire and have no further force or effect on or after the date that the employee’s service terminates, if the employee’s employment with FleetCor is terminated at our initiative for reasons other than “cause” (as defined in the 2010 Plan) or is terminated at the employee’s initiative for “good reason” (as defined in the 2010 Plan) within the two-year period starting on the date of the change in control (often called a “double trigger” change in control vesting).
Our employees, officers and directors are prohibited by our insider trading compliance policy from purchasing or selling derivative securities, entering into derivatives contracts relating to our stock or otherwise engaging in hedging transactions. The prohibition on hedging transactions does not apply to stock options and other interests issuedawards under our employee benefit plans. Furthermore, our insider trading compliance policy prohibits executive officers and directors from pledging or otherwise using as collateral shares of our common stock.
Equity Grant Practices. We generally grant equity-based incentives annually during the first calendar quarter. To date there has been no set program for the award of incremental periodic grants, and our compensation committee retains discretion to make equity awards at any time, including in connection with the promotion of an executive, to reward an executive for extraordinary performance or the assumption of additional responsibilities or for retention purposes.
Clawback Policy. In 2019, in response to shareholder input received during our outreach process, as well as the results of a shareholder proposal submitted to shareholders in 2019, we adopted a new clawback policy applicable to our executive officers, including our NEOs, which applies to all incentive-based compensation earned by our executive officers. The clawback policy provides that if our compensation committee determines that an executive officer engaged in misconduct that contributed to the Company being required to make a restatement of its financial statements, the Company will promptly recover from such executive officer all incentive-based compensation received that was in excess of the Code limits a public company’s deductionincentive-based compensation such executive officer would have received under the restated financial results of the Company.
No Excise Tax Gross-Ups. The Company does not provide excise tax gross-ups for federal income tax purposes to not more than $1 millionany of its NEOs.
Risk Assessment in Compensation Programs. We believe our compensation paid to certain executive officers in a calendar year. Compensation above $1 million may be deducted if it is “performance-based compensation.” Ourprograms encourage and reward prudent business judgment without encouraging undue risk. The compensation committee evaluates the effects ofreviews our compensation limits of Section 162(m)programs for features that might encourage inappropriate risk-taking. We believe our compensation policies and provides compensation inpractices do not create undue risks that are reasonably likely to have a manner consistent with FleetCor’s best interests and those of our stockholders.material adverse effect on us.
| 2023 Notice of Annual Meeting & Proxy Statement | 43 |
06. 2022 NAMED EXECUTIVE OFFICER COMPENSATION
The following table shows the compensation for each of the named executive officers calculated in accordance with SEC rules and regulations.
The amounts presented below in the “Stock Awards” and “Option Awards” columns represent the grant date fair value of awards granted to the named executive officersNEOs and may not reflect the actual value to be realized by each executive officer. Variables that can affect the actual value realized by the named executive officer include achievement levels of performance targets, economic and market risks associated with stock and option awards and performance unit valuation based on the market price of FleetCor’s stock.NEO. The actual value realized by the named executive officer will not be determined until the time of vesting in the case of restricted stock,Performance Shares and performance-based restricted stock,Performance-Based RSUs, or until option exercise in the case of option awards.
| Named Executive Officer | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | ||||||||||||||||||||||
| Ronald F. Clarke | 2016 | $ | 1,000,000 | $ | — | $ | 13,387,500 | $ | 13,340,451 | $ | 1,625,000 | $ | 25,112 | $ | 29,378,063 | |||||||||||||||
| Chief Executive Officer and Chairman of the Board of Directors | 2015 | $ | 1,000,000 | $ | — | $ | 7,782,500 | $ | — | $ | 1,375,000 | $ | 24,398 | $ | 10,181,898 | |||||||||||||||
| 2014 | $ | 1,000,002 | $ | 175,000 | $ | 14,766,000 | $ | — | $ | 1,425,000 | $ | 21,069 | $ | 17,387,071 | ||||||||||||||||
| Eric R. Dey | 2016 | $ | 373,077 | $ | — | $ | 167,754 | $ | 799,164 | $ | 159,375 | $ | 26,517 | $ | 1,525,887 | |||||||||||||||
| Chief Financial Officer | 2015 | $ | 344,231 | $ | — | $ | 197,676 | $ | 1,280,845 | $ | 232,750 | $ | 25,803 | $ | 2,081,305 | |||||||||||||||
| 2014 | $ | 325,000 | $ | 28,125 | $ | 170,928 | $ | — | $ | 121,875 | $ | 22,474 | $ | 668,402 | ||||||||||||||||
| John S. Coughlin | 2016 | $ | 398,077 | $ | — | $ | 674,146 | $ | 1,166,960 | $ | 300,000 | $ | 26,821 | $ | 2,566,004 | |||||||||||||||
| Executive Vice President—Global Corporate Development | 2015 | $ | 372,116 | $ | — | $ | 197,676 | $ | — | $ | — | $ | 25,987 | $ | 595,779 | |||||||||||||||
| 2014 | $ | 348,077 | $ | 37,500 | $ | 7,018,513 | $ | 4,935,685 | $ | 262,500 | $ | 22,978 | $ | 12,625,253 | ||||||||||||||||
| Charles Freund | 2016 | $ | 343,077 | $ | 56,875 | $ | 167,754 | $ | 799,164 | $ | 43,125 | $ | 24,975 | $ | 1,434,970 | |||||||||||||||
| Executive Vice President—Global Sales | ||||||||||||||||||||||||||||||
| Todd W. House | 2016 | $ | 398,077 | $ | 70,000 | $ | 1,888,104 | $ | 799,164 | $ | 80,000 | $ | 28,269 | $ | 3,263,614 | |||||||||||||||
| President—North America, Direct Issuing, U.S. Telematics and Efectivale | 2015 | $ | 372,116 | $ | — | $ | 197,676 | $ | — | $ | 131,250 | $ | 27,236 | $ | 728,278 | |||||||||||||||
| 2014 | $ | 348,077 | $ | 35,000 | $ | 3,714,768 | $ | 1,690,040 | $ | 140,000 | $ | 24,226 | $ | 5,952,111 | ||||||||||||||||
Name and Principal | Year | Salary | Bonus | Stock | Option | Non-Equity Incentive Plan Compensation ($)(5) | All Other | Total ($) |
| Ronald F. Clarke | 2022 | $1,176,923 | — | — | — | $2,776,500 | $33,575 | $3,986,998 |
Chief Executive Officer and Chairman of the
| 2021 | $1,000,000 | — | — | $55,556,000 | $1,335,000 | $32,473 | $57,923,473 |
| 2020 | $692,308 | — | — | — | $587,500 | $31,418 | $1,311,225 | |
Alissa B. Vickery Interim Chief Financial Accounting Officer
| 2022 | $247,115 | $56,250 | $250,024 | $300,009 | $93,750 | $3,086 | $950,235
|
| Charles R. Freund | 2022 | $388,774 | — | $1,535,089 | $2,400,075 | — | $27,473 | $4,351,410 |
Former Chief Financial Officer
| 2021 | $450,000 | — | $1,535,353 | $1,183,576 | $135,000 | $34,205 | $3,338,134 |
| 2020 | $361,635 | $50,000 | $844,897 | $1,000,022 | $80,156 | $32,368 | $2,369,077 | |
| Armando L. Netto (7) | 2022 | $483,780 | $64,482 | $1,535,089 | $2,400,075 | $226,582 | $32,779 | $4,742,787 |
Group President, Brazil
| 2021 | $425,945 | — | $1,535,353 | $5,310,426 | $460,021 | $31,069 | $7,762,813 |
| 2020 | $347,036 | — | $971,520 | $1,200,016 | $227,698 | $31,413 | $2,777,684 | |
| Alan King (7) | 2022 | $399,089 | — | $1,535,089 | $2,400,075 | $393,986 | $253,271 | $4,981,510 |
Group President, Global Fleet
| 2021 | $409,287 | — | $1,335,373 | $986,337 | $385,161 | $22,601 | $3,138,759 |
| 2020 | $423,077 | — | $844,897 | $1,000,022 | $143,455 | $20,553 | $2,432,003 | |
| Alexey Gavrilenya | 2022 | $180,000 | — | $1,535,089 | $2,400,075 | — | $34,439 | $4,149,603 |
Former Group President, North America Fuel
| 2021 | $400,000 | — | $1,535,353 | $1,183,576 | $360,000 | $36,625 | $3,515,554 |
| 2020 | $316,154 | — | $971,520 | $1,200,016 | $93,600 | $31,756 | $2,613,046 | |
| John S. Coughlin | 2022 | $155,769 | — | $1,535,089 | $2,400,075 | — | $33,916 | $4,124,849 |
Former Group President, Corporate Payments
| 2021 | $450,000 | — | $1,535,353 | $1,183,576 | $280,125 | $33,766 | $3,482,820 |
| 2020 | $372,404 | — | $971,520 | $1,200,016 | $121,078 | $30,341 | $2,695,358 |
(1) Represents the salary earned for the applicable year.
(2) For Mr. Netto and Ms. Vickery in 2022, represents the portion of such officer’s annual cash incentive award that was paid as a result of the compensation committee’s exercise of discretion to increase the payout of the award.
(3) Includes the aggregate grant date fair value for stock awards, computed in accordance with FASB ASC Topic 718. The assumptions used to value these awards can be found in Note 6 to the financial statements included in our 2022 Annual Report on Form 10-K. For an overview of the features of the 2022 awards, see “Compensation Discussion and Analysis — Key Elements of 2022 Named Executive Officer Compensation — Equity Awards.” Grant date fair values for Performance Shares and Performance-Based RSUs are computed based on the probable outcome of the performance conditions as of the grant date for the award. The grant date fair value of the Performance Share awards, assuming maximum performance with respect to the applicable performance goals, would be as follows: $250,024 for Ms. Vickery; $335,019 for Mr. Freund; $335,019 for Mr. Netto; $335,019 for Mr. King; $335,019 for Mr. Gavrilenya; and $335,019 for Mr. Coughlin. The grant date fair value of the Performance-Based RSU awards, assuming maximum performance with respect to the applicable performance goals, would be as follows: $1,800,106 for Mr. Freund; $1,800,106 for Mr. Netto; $1,800,106 for Mr. King; $1,800,106 for Mr. Gavrilenya; and $1,800,106 for Mr. Coughlin.
(4) Represents the aggregate grant date fair value for the stock option awards, computed in accordance with FASB ASC Topic 718. The assumptions used to value these awards can be found in Note 6 to the financial statements included in our 2022 Annual Report on Form 10-K. For an overview of the features of the 2022 awards, see “Compensation Discussion and Analysis — Key Elements of 2022 Named Executive Officer Compensation — Equity Awards.”
(5) Represents the amounts earned under the annual cash incentive award programs based on achievement of performance goals under the program. For a description of the program, including the 2022 performance goals, see “Compensation Discussion and Analysis — Key Elements of 2022 Named Executive Officer Compensation — Annual Cash Incentive.”
| 44 | |
06. 2022 NAMED EXECUTIVE OFFICER COMPENSATION
(6) The following table breaks down the amounts included in the “All Other Compensation” column for 2022:
All Other Compensation
All other
| Health Benefit Premiums | Long-Term Care Premiums | Retirement Plan Contributions | Vehicle | Life
| Other
| Total
|
| Ronald F. Clarke | $30,474 | $2,441 | — | — | $660 | — | $33,575 |
| Alissa B. Vickery | — | $340 | $2,086 | — | $660 | — | $3,086 |
| Charles R. Freund | $25,395 | $1,008 | $519 | — | $550 | — | $27,473 |
| Armando L. Netto (7) | $5,289 | — | — | $25,123(8) | $779 | $1,587(9) | $32,779 |
| Alan King (7) | $15,455 | — | $1,977 | $12,524(8) | $275 | $223,040(10) | $253,271 |
| Alexey Gavrilenya | $30,474 | $1,505 | $1,800 | — | $660 | — | $34,439 |
| John S. Coughlin | $30,474 | $1,397 | $1,385 | — | $660 | — | $33,916 |
(7) As Mr. Netto is based in Brazil, his compensation is denominated in Brazilian Real. All amounts for Mr. Netto have been converted to U.S. dollars at an average exchange rate of $1 to R$5.1535 for 2022, $1 to R$5.3885 for 2021, and $1 to R$5.1030 for 2020. Prior to his relocation to the United States, Mr. King was based in the United Kingdom. For compensation earned by Mr. King on or prior to October 31, 2022, amounts were denominated in British Pounds Sterling and have been converted to U.S. dollars at an average exchange rate of $1 to £0.8080 for 2022, 1 to £ 0.7269 for 2021, and 1 to £ 0.7791 for 2020. Compensation earned by Mr. King after October 31, 2022 was paid in
U.S. dollars.
(8) Amount in the “Vehicle Allowance” column for Mr. Netto and Mr. King represents the aggregate of monthly cash vehicle allowances paid to each officer during 2022.
(9) Amount in the “Other” column for Mr. Netto reflects the cost to the Company of a government mandated food benefit.
(10) Amount in the “Other” column for Mr. King reflects housing allowance and relocation amounts.
| 2023 Notice of Annual Meeting & Proxy Statement | 45 |
| Name | Company 401(k) Match | Health Benefit Premiums | Long-Term Care Premiums | Life Insurance Premiums | Total | |||||||||||||||
| Ronald F. Clarke | $ | — | $ | 23,771 | $ | 1,037 | $ | 305 | $ | 25,112 | ||||||||||
| Eric R. Dey | $ | — | $ | 25,471 | $ | 742 | $ | 305 | $ | 26,517 | ||||||||||
| John S. Coughlin | $ | — | $ | 25,271 | $ | 1,246 | $ | 305 | $ | 26,821 | ||||||||||
| Charles Freund | $ | — | $ | 23,771 | $ | 900 | $ | 305 | $ | 24,975 | ||||||||||
| Todd W. House | $ | 1,500 | $ | 25,471 | $ | 994 | $ | 305 | $ | 28,269 | ||||||||||
2022 Grants of Plan-Based Awards
The following table provides information about awards granted in 20162022 to each of the NEOs:
|
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
| Estimated Future Payouts Under Equity Incentive Plan Awards
| All Other Option Awards: Number of Securities Underlying Options (2) | Exercise or Base Price of Option Awards
| Grant Date Fair Value of Stock and Option Awards (3)
| ||||
| Name | Grant Date
| Threshold ($)
| Target ($)
| Maximum ($)
| Threshold (#)
| Target (#)
| Maximum (#)
|
(#) |
($/Sh) |
($) |
| Ronald F. | ||||||||||
| Clarke | $675,000 | $1,800,000 | $3,600,000 | — | — | — | — | — | — | |
| Alissa B. | $37,500 | $75,000 | $93,750 | — | — | — | — | — | — | |
| Vickery | 1/24/22 | — | — | — | — | 1,109 (5) | — | — | — | $250,024 |
| 1/24/22 | — | — | — | — | — | — | 4,588 | $225.45 | $300,009 | |
| Charles R. | $168,750 | $337,500 | $506,250 | — | — | — | — | — | — | |
| Freund | ||||||||||
| 1/24/22 | — | — | — | 2,662 | 5,323 (4) | 7,985 | — | — | $1,200,070 | |
| 1/24/22 | — | — | — | — | 1,486 (5) | — | — | — | $335,019 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| $182,727 | $365,455 | $548,182 | — | — | — | — | — | — | ||
| Armando L. | ||||||||||
| Netto (6) | 1/24/22 | — | — | — | 2,662 | 5,323(4) | 7,985 | — | — | $1,200,070 |
| 1/24/22 | — | — | — | — | 1,486(5) | — | — | — | $335,019 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| $139,711 | $279,422 | $419,134 | — | — | — | — | — | — | ||
| Alan King (6) | ||||||||||
| 1/24/22 | — | — | — | 2,662 | 5,323 (4) | 7,985 | — | — | $1,200,070 | |
| 1/24/22 | — | — | — | — | 1,486 (5) | — | — | — | $335,019 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| Alexey | 1/24/22 | — | — | — | 2,662 | 5,323 (4) | 7,985 | — | — | $1,200,070 |
| Gavrilenya | 1/24/22 | — | — | — | — | 1,486 (5) | — | — | — | $335,019 |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| John S. | 1/24/22 | — | — | — | 2,662 | 5,323 (4) | 7,985 | — | — | $1,200,070 |
| Coughlin | 1/24/22 | — | — | — | — | 1,486 (5) | — | — | — | $335,019 |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
| 1/24/22 | — | — | — | — | — | — | 18,352 | $225.45 | $1,200,037 | |
(1) Reflects the threshold, target and maximum amounts that could be earned under our 2022 annual cash incentive program for each NEO. For information concerning this program, see “Compensation Discussion and Analysis—Key Elements of 2022 Named Executive Officer Compensation—Annual Cash Incentive.” See the 2022 Summary Compensation Table for actual amounts earned for 2022 performance.
(2) Reflects the number of time-based stock options granted in 2022. For information concerning these grants and the vesting terms, see “Compensation Discussion and Analysis — Key Elements of 2022 Named Executive Officer Compensation — Equity Awards.”
| 46 | 2023 Notice of Annual Meeting & Proxy Statement |
06. 2022 NAMED EXECUTIVE OFFICER COMPENSATION
(3) Reflects the grant date fair value of Performance Share, Performance-Based RSU, and stock option awards granted to each of the named executive officers.
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under the Equity Incentive Plan Awards (2) | All Other Options Awards: Number of Securities Underlying Options (3) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Award(4) | |||||||||||||||||||||
| Name | Grant/Modification Date | Target ($) | Maximum ($) | Target (#) | (#) | ($/Share) | ($) | ||||||||||||||||||
| Ronald F. Clarke | $ | 1,000,000 | $ | 1,875,000 | |||||||||||||||||||||
| 1/20/2016 | 50,000 | $ | 5,745,000 | ||||||||||||||||||||||
| 1/20/2016 | 425,000 | $ | 114.90 | $ | 13,340,451 | ||||||||||||||||||||
| 6/7/2016 | 50,000 | $ | 7,642,500 | ||||||||||||||||||||||
| Eric R. Dey | $ | 187,500 | $ | 243,750 | |||||||||||||||||||||
| 1/20/2016 | 1,460 | $ | 167,754 | ||||||||||||||||||||||
| 1/20/2016 | 44,000 | $ | 114.90 | $ | 799,164 | ||||||||||||||||||||
| John S. Coughlin | $ | 200,000 | $ | 300,000 | |||||||||||||||||||||
| 1/20/2016 | 1,460 | $ | 167,754 | ||||||||||||||||||||||
| 1/20/2016 | 64,250 | $ | 114.90 | $ | 1,166,960 | ||||||||||||||||||||
| 6/7/2016 | 3,313 | $ | 506,392 | ||||||||||||||||||||||
| Charles Freund | $ | 172,500 | $ | 241,500 | |||||||||||||||||||||
| 1/20/2016 | 1,460 | $ | 167,754 | ||||||||||||||||||||||
| 1/20/2016 | 44,000 | $ | 114.90 | $ | 799,164 | ||||||||||||||||||||
| Todd W. House | $ | 200,000 | $ | 310,000 | |||||||||||||||||||||
| 1/20/2016 | 1,460 | $ | 167,754 | ||||||||||||||||||||||
| 1/20/2016 | 3,000 | $ | 344,700 | ||||||||||||||||||||||
| 1/20/2016 | 44,000 | $ | 114.90 | $ | 799,164 | ||||||||||||||||||||
| 6/7/2016 | 3,000 | $ | 458,550 | ||||||||||||||||||||||
| 6/7/2016 | 6,000 | $ | 917,100 | ||||||||||||||||||||||
