| • | | Our executive compensation program is designed to incent and reward our leadership team for delivering sustained financial performance and long-term shareholder value. A significant portion of each named executive officer’s compensation is at risk, dependent on the achievement of challenging annual and long-term performance goals and/or the performance of our share price. 2018 was a challenging year for Nielsen. We were disappointed in our 2018 financial results, which fell short of the objectives set at the beginning of the year. Our variable performance-based compensation plans operated as intended. Payouts to NEOs under Nielsen’s Annual Incentive Plan for 2018 were zero. Payouts to NEOs and other participants in Nielsen’s PRSU award program for the 2016 – 2018 cycle that matured on December 31, 2018 were zero. The interim performance evaluation for Nielsen’s 2017 – 2019 PRSU cycle is tracking to pay out at zero. PRSUs represent the single largest component by value of NEO compensation. For further information, see “Executive Compensation – Compensation Discussion and Analysis – Summary of Other NEO Pay Decisions – 2016 LTPP Payouts” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Annual Incentive Plan – 2018 Results”. There was significant turnover at the executive level in 2018: Mr. Barns, our former Chief Executive Officer, retired from the Company at the end of 2018 and was replaced by Mr. Kenny. Mr. Jackson, our former Chief Financial Officer, resigned in September 2018 and was replaced by Mr. Anderson. Mr. Dale, our former Chief Legal Officer, resigned in early 2019 and was replaced by Mr. Callard. Certain of the compensation actions described in this Compensation Discussion and Analysis reflectone-time new hire or separation arrangements. For more information, see “Executive Compensation – Compensation Discussion and Analysis – New CEO and CFO Compensation Arrangements”. Mr. Barns’ separation constituted a termination without cause under Nielsen’s severance policy, and Mr. Barns therefore received severance compensation which is reflected in the Summary Compensation Table but will be delivered as pay continuation through 2020. See “– Severance Payments and Benefits – Terms of Mr. Barns’ separation from the Company,” for more detail. | | |
| | 2019 PROXY STATEMENT 28 |
| NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION |
| • | | A substantial portion of compensation for our senior executives is “at risk” by being subject to performance. The “at risk” component consists of annual cash incentives and long-term equity incentives, which play a significant role in aligning management’s interests with those of our shareholders.
Without his severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from 2017 reported pay. Given business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. As described further under “Executive Compensation – Compensation Discussion and Analysis – Summary of Other NEO Pay Decisions”, select senior leaders, including certain of the NEOs, receivedone-time equity-based retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each participant, half of the award value is denominated in performance stock options (“PSOs”) subject to a challenging stock price growth hurdle of 25% increase from the date of grant. The remaining award value is denominated in service-based restricted stock units (“RSUs”) for their retention value, as well as, alignment with stock price performance. Both components vest ratably over 3 years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three year period. We increased the proportion of the long-term incentive awards that are subject to quantitative performance measures from 50% to 60% and, to bring added emphasis on growth we added revenue metrics to our annual incentive plan and long-term performance plan. For further information, see “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Annual Incentive Plan – 2019 Changes” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Long Term Incentives (LTI)” and “Executive Compensation – Compensation Discussion and Analysis – How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP) – 2019 Changes”. | | | | | The Board of Directors recommends that shareholders vote “FOR” approval of the compensation of the Company’s named executive officers. |
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| | 2019 PROXY STATEMENT 29 |
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| | 2019 PROXY STATEMENT 30 |
| • | | COMPENSATION DISCUSSION AND ANALYSISAnnual cash incentives for our senior executives are determined by a formula which provides initial payouts on the basis of our EBITDA growth over the prior year relative to plan objectives (as described under “Executive Compensation”), with consideration given to our cash flow performance. Final awards may then be adjusted based on individual performance against objectives and defined qualitative factors such as degree of difficulty and leadership impact. Executive Summary Business Highlights 2018 was a challenging year for Nielsen. We set revised objectives for the second half of the year based on updated business conditions and revised guidance for revenue, EBITDA margin and free cash flow. The Board also initiated a comprehensive strategic review of the entire Company and its businesses. We finished the year by either meeting or exceeding our revised operating expectations. Implications for Compensation Nielsen’s executive compensation philosophy includes a stated emphasis on variable,at-risk compensation. Nielsen’s performance in 2018 was reflected in executive pay outcomes in the following ways: Without his severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from 2017 reported pay. Payouts to NEOs under Nielsen’s Annual Incentive Plan (“AIP”) for 2018 were zero. Payouts to NEOs and other participants in Nielsen’s performance restricted share unit (“PRSU”) award program for the 2016 – 2018 cycle that matured on December 31, 2018 were zero. The interim performance evaluation for Nielsen’s 2017 – 2019 PRSU cycle is tracking to pay out at zero. PRSUs represent the single largest component by value of NEO compensation. Below is a table of recent and projected future payouts under our LTPP Plan. Our variable pay programs continue to operate as intended. | | | | | | | | | | | | | | | 2015 | | | 2016 | | | Projected 2017 | | Payout Percentage | | | 59.15 | % | | | 0 | % | | | 0 | %1 |
| 1 | | Current projection of all performance metrics under the plan is below threshold |
Leadership Transitions There was significant turnover at the executive level in 2018: Mr. Barns, our former Chief Executive Officer, retired from the Company at the end of 2018 and was replaced by Mr. Kenny. Mr. Jackson, our former Chief Financial Officer, resigned in September 2018 and was replaced by Mr. Anderson. Mr. Dale, our former Chief Legal Officer, resigned in early 2019 and was replaced by Mr. Callard. Certain of the compensation actions described in this CD&A reflectone-time new hire or separation arrangements. Mr. Barns’ separation constituted a termination without cause under Nielsen’s severance policy, and Mr. Barns therefore received severance compensation, which will be delivered as pay continuation through 2020. See “– Severance Payments and Benefits – Terms of Mr. Barns’ separation from the Company“. Compensation Highlights for 2018 Given 2018’s business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. As described further under “– Summary of Other NEO Pay Decisions” below, select senior leaders, including certain of the NEOs, receivedone-time equity-based retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each NEO participant, half of the award value is denominated in performance stock options (“PSOs”) subject to a challenging stock price growth hurdle of 25%. The remaining award value is denominated in service-based restricted stock units (“RSUs”) for their retention value, as well as, alignment with stock price performance. Both components vest ratably over three years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three-year period. | | |
| | 2019 PROXY STATEMENT 31 |
| • | | Our long-term performance plan significantly increases the proportion of total long-term incentives that are subject to long-term quantitative performance targets.Messrs. Kenny and Anderson were hired in 2018. Their respective compensation packages are described in detail under “– New CEO and CFO Compensation Arrangements”below. In each case, their annual compensation arrangements were designed to be competitive with the median of the external market benchmarks selected, taking each executive’s seniority and strong track record of success into account. Each executive received certainone-time “inducement” or “make-whole” awards in connection with his hiring. In 2018, the Compensation Committee decided to increase the proportion of Long-Term Incentives (“LTI”) subject to quantifiable performance from 50% to 60% which became effective with the February 2018 PRSU award. In addition, three-year revenue compounded annual growth rate (“CAGR”) was added as a performance metric, weighted at 25%. Free cash flow, weighted at 50%, and total shareholder return, weighted at 25% were the other performance metrics for 2018.
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| • | | Other long-term equity incentives for our senior executives consisted of time-based options which provide a powerful incentive for executives to focus on long-term performance and time-based restricted stock units for their retention value.
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| | | | | The Board of Directors recommends that shareholders vote “FOR” approval of the compensation of our named executive officers. |
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| | 2016 PROXY STATEMENT 26
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| | 2016 PROXY STATEMENT 27
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COMPENSATION DISCUSSION & ANALYSIS
Executive Summary
Executive Changes
Effective January 1, 2016, Mr. Hasker was appointed Global President and Chief Operating Officer with responsibility for global client service and product leadership across our Watch and Buy businesses.
Mr. West, our former Chief Operating Officer, left the Company effective December 31, 2015. Mr. West had served in this role since March 10, 2014 and was with the Company since February 23, 2007. During this time, Mr. West achieved his primary goal of restructuring Global Business Services to focus resources globally on digital innovation in our technology platforms and on efficiency in our client delivery operations. He recruited a Chief Technology Officer and developed an internal candidate to lead the newly-created Technology and Operations functions, respectively. Both candidates became direct reports to Mr. Barns following Mr. West’s departure.
Mr. West did not receive severance payments in connection with his departure. Details of the treatment of his annual incentive compensation for 2015 and his unvested equity compensation upon his departure are discussed under “– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2015 Table – Summary Compensation Table.”
On December 30, 2015, Mr. Lewis announced he would leave the Company effective June 30, 2016. The separation arrangements for Mr. Lewis are generally in accordance with the terms of the form of severance agreement previously filed with the SEC.
Mr. Lewis ceased to be an executive officer on December 30, 2015, but otherwise would have been an NEO for 2015. He is therefore considered an NEO for 2015 because he is an individual who was as highly compensated as at least one of the other NEOs, but was no longer serving as an executive officer as of December 31, 2015.
Business Overview With a presence in 100+ countries, Nielsen’s mission is to collect, create, inform and activate data for clients across the media and fast moving consumer goods industries. Our purpose is to make the markets we serve smarter and more efficient, helping clients make more informed business decisions. Nielsen’s services are organized into two renamed business segments: Nielsen is a global performance management company that provides a comprehensive understandingGlobal Media and Nielsen Global Connect. Nielsen Global Media brings together all of our most powerful assets across Discovery, Measurement, Planning, Activation and Optimization both in the US and internationally. Our broad range of services give media companies, advertising agencies and advertisers the most complete view available of what consumers watch, listen to, share, post, and buy. Nielsen’s Watchengage with across many different platforms and devices. Built on our data of record, our analytics solutions enable media companies to segment provides mediatheir audiences with depth, precision and efficiency, so they can highlight the right audience for advertisers’ goals. Our analytics also help advertising clients with Total Audienceagencies design, implement and evaluate campaigns that deliver on clients’ business goals. Our vision is to be the trusted single source of truth – helping buyers and sellers of consumer influence transact in a trusted and scalable way. Nielsen Global Connect is focused on building a comprehensive view of the entire shopper journey acrossin-store and eCommerce purchases. We offer thebest-in-class measurement, services for all devicespredictive tools, and activation through differentiated products that connect manufacturers and retailers. Our business is independent, third-party measurement. We don’t create content and we don’t buy or sell ad placements. What we care about is producing rigorous, independent, accurate data on which content – video, audioour clients can depend. In both the Media and text – is consumed. The Buy segment offers consumer packaged goods manufacturersConnect segments, we employ data scientists, economists, engineers, technologists, psychologists, neuroscientists, field auditors and retailers the industry’s only global viewmore, all of retail performance measurement. By integrating information from its Watchwhom have a passion for collecting comprehensive, accurate data and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population.turning it into positive business results for clients. | | |
| | 20162019 PROXY STATEMENT 28 32
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Business Performance Nielsen is dedicated to driving consistent performance through the cycles and has proven this commitment by posting solid operating performance for nearly 10 years and by reliably returning value to shareholders. The company’s long-term business performance and progress against strategic initiatives form the context in which pay decisions are made. We have delivered resilient business performance with sustained growth over the last three years, and notably sustained solid growth in 2015, Mitch Barns’ second year as CEO, as presented below:
For 2015:2018: | • | | Revenues up 5.0%down 0.9% over prior year(-0.7% on a constant currency1 basis (down 1.8% on a reported basis as shown below) basis) |
| • | | Adjusted EBITDA1, 2 up 7.2% down 8.6% over prior year(-7.9% on a constant currency1 basis (up 1.1% on a reported basis as shown below) basis) |
| • | | Normalized free cash flow31 up 18.1% down 37.2% over prior year |
The reconciliation of normalized
1 | | Please see Annex C for additional information and a reconciliation of Adjusted EBITDA, free cash flow, to net cash provided by operating activities in the last three years is provided below: | | | | | | | | | | | | | Normalized Free Cash Flow3($ in millions – as reported) | | 2013 | | | 2014 | | | 2015 | | Net cash provided by operating activities | | | $901 | | | | $1,093 | | | | $1,179 | | Capital expenditures | | | (374 | ) | | | (412 | ) | | | (401 | ) | Free Cash Flow | | | $527 | | | | $681 | | | | $778 | | Excess tax benefit on stock-based compensation (2015) | | | — | | | | — | | | | 26 | | One-time Arbitron costs | | | 46 | | | | — | | | | — | | Normalized Free Cash Flow | | | $573 | | | | $681 | | | | $804 | |
3 | | We define normalized free cash flow asand measures on a constant currency basis to financial measures derived in accordance with United States generally accepted accounting principles (“GAAP”). |
2 | | The Company adopted FASB ASU2017-07 effective January 1, 2018 and reclassified $11 million and $13 million from selling, general and administrative expenses to other income / (expense), net cash provided by operating activities, plusin its consolidated statement of operations for the excess tax benefit on stock-based compensation in 2015twelve months ended December 31, 2017 and one-time Arbitron transaction costs in 2013 less net capital expenditures.2016, respectively. |
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| | 20162019 PROXY STATEMENT 29 33
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TOTAL SHAREHOLDER RETURNTotal Shareholder Return1
The chart below shows the value of a $100 investment in Nielsen stock over a 3-yearthree-year period beginning January 1, 2013December 31, 2015 and ending December 31, 2015. This period aligns with the introduction of our dividend policy and share repurchase program in 2013.2018. We have compared our performance to the S&P 500 and to a marketcap-weighted composite of the peer group we use to measure relative total shareholder return inunder our Long-Term Performance Plan (“LTPP”) as described under “– How Pay Decisions are Made – Long-Term Incentives (LTI) – Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP).” Over the 3-year period we have delivered more value for investors than a comparable investment in either of these benchmarks. NIELSEN HOLDINGS plc—3-YEARTHREE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN(as of December 31 of each year)
1 | | We define total shareholder return as the change in stock price over the 3-yearthree-year period ended December 31, 2015,2018, assuming monthly reinvestment of dividends. |
Strategic Overview
Nielsen’s strategy is centered on our measurement and our data, our diligent focus on the consumer and our global presence. Our measurement and data allow our clients to understand their market performance and improve that performance. While consumption habits may fragment and change, Nielsen measures consumers, and we have the tools to follow them wherever they go. This strategy provides us degrees of flexibility and allows us to understand changes in consumption habits following them in-step as they evolve. And we do all of this in 106 countries that cover 90% of the world’s population and GDP.
Our independent, third-party measurement has never been more valuable to our clients. In Watch, we successfully rolled out independent, representative ratings that comparably measure video viewing across all screens, devices, and platforms, within our Nielsen Total Audience framework. In Buy, our sales and market share data provide both granular local viewsand consistent global views. Our analytics focus helps our clients increase the return on investment of their advertising, maximize the impact of their promotions, and boost the success rates of their new product innovations.
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| | 20162019 PROXY STATEMENT 30 34
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Business Performance Highlights for 2015:2018: | • | | Strategic Review:We made outstanding progress onannounced a broad review of strategic alternatives for the NielsenTotal Audience Measurement framework, especially our coverage of viewing via rapidly evolving digital platforms. While the work will continue well into 2016, our teams executed extraordinarily well,Company and we are steadily gaining client adoption. Our Digital Ad Ratings product is in 17 markets that represent 85% of global digital advertising spend. An independent survey of media agency professionals found that 72% of those professionals chose Nielsen’s Digital Ad Rating for their video ad guarantees.its businesses. | |
| • | | Updated Guidance: Given first half of fiscal year 2018 performance, we updated second half guidance. We announcedmet or exceeded our newConnected Buy System that will allow our clients to seamlessly connect vast amounts of datarevised operating expectations and analytics to help them understand what happened, why it happened, and what to do about it – faster than ever. This will be a unique and powerful data integration, analytics, and activation system.positioned ourselves for 2019. | |
| • | | OurEmerging MarketsGrowth: Through our internal R&D, acquisitions, and our incubator in Israel, we continue to invest in new growth opportunities. To expand oure-commerce offerings we signed an exclusive agreement with Rakuten, allowing us to have performed well, led by Latin America, China,the most comprehensive, multi-sourcede-commerce measurement solution for the U.S. market. Our acquisition of Ebiquity’s ad intelligence business will allow us to combine our Global Ad Intel solution and Southeast Asia. Our teamscreate a more powerful offering.
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Media Segment Highlights for 2018: | • | | We are focused on building oneend-to-end platform that brings together all of our most powerful assets across Discovery, Measurement, Planning, Activation and Optimization in the Middle EastU.S. and sub-Sahara Africa have also turned in solid years in very challenging markets.more than 60 other markets around the world. | |
| • | | We continue to build a solid foundation using standard, comparable,Our recentde-duplicated, cross-platform measurement through ouracquisitionsTotal Audience Measurement are contributing positively toframework. In 2018, we signed new contracts with two of our strategy and revenue growthlargest, most strategic media clients, securing our position as described below.their trusted partner. | |
| • | | Brandbank is already converting into solid margin growth forWe advanced our Total Ad Ratings solution to provide comprehensive cross-platform coverage with the company;inclusion ofOver-the-Top and mobile audiences, and offering the industry its first and only persons-level andde-duplicated measurement of ads across devices.
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| • | | Affinnova has been a key factorWe worked towards becoming the currency for digital viewing by expanding Digital Ad Ratings to our recent successes in our Innovations business;32 global markets. Furthermore, Digital Ad Ratings is used by the top 7 agency holding companies and accepted by the top 25 advertisers.
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| • | | Our Digital Content Ratings have seen momentum among both TV and digital publishers. Our ability to include video viewing from Hulu, Facebook, and YouTube has been positively received by the industry. | |
Connect Segment Highlights for 2018: | • | | We are executing oneXelateTotal Consumer Measurement, focusing on expanding coverage and granularity across all channels that matter to clients. | |
| • | | We continue to grow the number of clients using at least one component of Nielsen Connect. has successfully integrated thousandsWe ended the year with 306 clients using at least one component of Nielsen data streamsConnect, including apps through our Connect Partner Network. Tyson recently became the first client to switch to Nielsen Connect as their “system of record.” | |
| • | | Ourretailer initiativeshad good traction, especially the Walmart and has become oneSam’s Club supplier collaboration programs with 850 manufacturing clients signed up, many of which are small andmid-tier manufacturers. | |
| • | | Clients continue to prioritize investments inEmerging Markets given strong tailwinds such as population growth, a rising middle class, and urbanization and we continue to focus on enhancing our measurement offerings in Emerging Markets, including greater coverage of the largest third-party cross-deviceimportant traditional trade channel. | |
| • | | We’ve been successful in adding new retail cooperators inDeveloped Markets. | |
| • | | Our U.S. Connect business continues to focus on building stronger, differentiated offerings that can serve large multinational clients as well as small andmid-tier clients and ourgo-forward strategy is focused on helping clients drive growth by leveraging data sets in the world. The acquisition has allowed Nielsen to launch its ownas an enterprise marketing platform that enables marketers to migrate from marketing to many potential customers to marketing to their exact customer.asset. | |
Executive Compensation Overview Nielsen’s executive compensation program is designed to incentmotivate and reward our leadership team to deliver sustainedsustainable growth and financial performance andwhile delivering long-term shareholder value. | | |
| | 2019 PROXY STATEMENT 35 |
Key considerations in 20152018 were: Say-on-Pay2018 Advisory Vote on Executive Compensation
Each year, our shareholders vote on an advisory resolution to approve the pay of our NEOs. In 2015, more than 98%2018, approximately 84% of the votes cast at our shareholderannual general meeting were for the approval of shareholders affirmed our executive compensation program. The Company engages in a comprehensive outreach program on an advisory basis. During the year, we consulted withto our shareholders who provided valuableto discuss and solicit feedback on topics including Company performance, executive compensation and how we disclose information in our programs and disclosure. One of our directors (eitherproxy statement. These meetings are led by the Executive Chairman of the Compensation Committee,Board and result in valuable feedback from shareholders. Following our annual general meeting of shareholders in May 2018, we conducted additional outreach to shareholders to obtain specific feedback on the Lead Independent Director or the Chairmansay on pay voting results. In consideration of the Nomination and Corporate Governance Committee) participated in each discussion. As a result of thisshareholder feedback we have continuedadjusted the percent of long-term incentives subject to strengthenperformance conditions from 50% to 60% for our disclosureCEO and other NEOs. In 2018, the incentive plans were strongly aligned with performance outcomes and operated as intended. The 2016 LTPP grants which matured on December 31, 2018 paid out at zero percent due to relative total shareholder return and Free Cash Flow metrics not meeting the required threshold performance levels as described under “-Summary of Other NEO Pay Decisions – PSRU Payouts Under the 2016 LTPP”. The 2018 AIP also paid out at zero as the Company did not meet the required performance basis of annual incentive paymentsthresholds for Adjusted EBITDA and the rigor with which we define targets in our annual and long-term performance plans.Revenue. MeritocracyPay for Performance
OurNielsen has a strong culture ofpay for performance philosophy differentiates rewards based onwhich serves to align Company goals and performance with pay outcomes for the Company’s executives. Nielsen conducts quantitative assessments of business financial performance and also evaluates individual contributions towards key objectives.business objectives in order to differentiate rewards. NEOs participate in the same performance assessment process applicable to all managerial employees, including an annual performance appraisal and semi-annual individual peer rankings of performance and leadership impact.
Total Company Performance We strive to create a culture that reflects our core values of Open, Simple, and Integrated. Our compensation programs reinforce these values by focusing all employees on simple, unifying objectives. To that end, NEOs participate in the same annual cash incentive plan applicable to all managerial employees, which isin 2018 was funded based on companyCompany AIP Adjusted EBITDA performance (which funding level is referred to as the “Bonus Funding EBITDA”) and annual revenue growth as described under “– How Pay DecisionDecisions are Made – Annual Incentive Plan.” Additionally, NEOs’ performance assessments
Pay Competitively Providing competitive pay opportunities is a hallmark of Nielsen’s compensation programs. The Compensation Committee reviews each NEO’s compensation annually and considers several factors when making pay decisions are influenced by our total company performance versus financial objectives (see “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”) and specific individual business financial objectives.decisions: | 1. | Total direct compensation, which consists of base salary, annual cash incentives and long-term incentives, is benchmarked against executives serving in similar roles within a peer group of companies selected for their business relevance and size appropriateness to Nielsen; |
| 2. | Total direct compensation is targeted around the median of our peer group, but sustained strong individual performance and leadership impact may result in above median pay opportunities; |
| 3. | The mix of base salary, annual incentive and long-term incentives is reviewed to ensure a significant portion of NEO pay is at risk based on the achievement of performance objectives or the performance of our share price and to ensure the right focus on short-term and long-term performance, with an emphasis on the latter; and |
| 4. | Other factors reviewed include changes in role or responsibilities, Company financial performance, and individual performance. |
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| | 20162019 PROXY STATEMENT 31 36
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Variable Pay atis At Risk ANielsen’s compensation programs are designed so that a significant portion of each NEO’s compensation isat risk; meaning that the compensation is dependent on the achievement of challenging annual and long-term performance targetsgoals and/or the performance of our share price as laid out in the charts and tables below. At risk compensation is composed of annual cash incentive awards and equity-based awards and does not include fixed pay such as base salary. Long-term pay ishas historically been delivered exclusively in the form of equity to align the interests of the NEOs with the creation of shareholder value. For 2015, short-termvalue for our shareholders. In 2018, long-term pay was delivered mostlyconsisted solely of equity-based awards.
The chart below illustrates the elements of annual total direct compensation at target for Mr. Kenny, our CEO since December 2018. The next chart shows the elements of annual total direct compensation at target for Mr. Barns, our CEO through December 2, 2018. The final chart below illustrates the target elements of total direct compensation for other NEOs in cash, but 25%2018. See “– Summary Compensation Table” for actual amounts earned by all NEOs in 2018. In all cases, the design of the annual incentive payment was delivered in RSUs that vest over two years. The Compensation Committee noted that the proportion of equity provided by long-term incentive grants in the NEOs’ total annual pay mix had reached the targeted range. Therefore, for the 2016 plan year, the Compensation Committee decided that annual incentive payouts would revert to being paid 100% in cash (versus 75% in cash and 25% in RSUs that had beenNielsen’s compensation programs aligns closely with our practice since 2013).peer group. CEO – Kenny COMPENSATION STRUCTURE 201520181
| | | | | | | | | | | | Elements of Total Direct Compensation | | 20152018 | | CEO | | | | | Proportion of pay subject to specific quantitativequantitive performance criteria | | | 55%60% | | | | | | | Proportion of pay at risk | | | 89%87% | | | | | | | Proportion of pay delivered in the form of equity | | | 72%68% | | | | Proportion of pay delivered in long-term equity (vesting periods of three years or more) | | | 67% | |
OTHER NEOs COMPENSATION STRUCTURE 20151,2
| | | | | | | | | Elements of Total Direct Compensation | | | | NEOs | | Proportion of pay subject to specific quantitative performance criteria | | | 51% | | | | Proportion of pay at risk | | | 77% | | | | Proportion of pay delivered in the form of equity | | | 59% | | | | Proportion of pay delivered in long-term equity (vesting periods of three years or more) | | | 53% | |
1 | | Reflects 2018 annual total direct compensation at target for Mr. Kenny had he worked a full year. Excludes the $325,000 payment made tomake-whole and new hire inducement awards granted or paid in connection with Mr. JacksonKenny’s hiring, which are included in February 2015 pursuant to the terms of his offer letter dated February 20, 2014 to compensate him for the loss of his unvested SERP benefit from his previous employer. (see below under – “SummarySummary Compensation Table, Footnote 1”) |
2 | | Mr. West was excluded from the chart above because he did not receive a full equity grant due to his departure from the company.Table. See “– New CEO and CFO Compensation Arrangements” below. |
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| | 20162019 PROXY STATEMENT 32 37
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CEO – Barns COMPENSATION STRUCTURE 20181 | | | | | | | | | | | | Elements of Total Direct Compensation | | 2018 | | | | | | | Proportion of pay subject to specific quantitive performance criteria | | | 62% | | | | | | | Proportion of pay at risk | | | 91% | | | | | | | Proportion of pay delivered in the form of equity | | | 73% | |
1 | | Reflects 2018 annual total direct compensation at target for Mr. Barns |
OTHER NEOs COMPENSATION STRUCTURE 20181 | | | | | | | | | | | | Elements of Total Direct Compensation | | 2018 | | | | | | | Proportion of pay subject to specific quantitive performance criteria | | | 56% | | | | | | | Proportion of pay at risk | | | 78% | | | | | | | Proportion of pay delivered in the form of equity | | | 56% | |
1 | | Reflects 2018 annual total direct compensation at target for Messrs. Anderson, Jackson, Tavolieri and Dale and Ms. Phillips. |
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| | 2019 PROXY STATEMENT 38 |
Executive Compensation Elements | | | | | | | Element | | Purpose | Element | | How Component OperatesPurpose
| | Key Characteristics | Annual | | | Base Salary | | Attract and retain top talent | | • Reviewed in intervals of 24-36+ months • When reviewing base salary levels, theThe Compensation Committee considers a variety of factors including: (1) our pay for performance philosophy, (2) peer group market benchmark compensation data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, and (6) role changes
| Annual Incentive (“AIP”) | | | AIP | | Motivate NEOs to accomplish short-term business performance goals that contribute to long-term business objectives | | • Annual incentive target opportunitiesAIP award values are establisheddetermined each year withby reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market benchmark compensationsurvey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, (6) role changes, and (7) prior year targetaward • The Compensation Committee determines individual payout usingAdjusted EBITDA and revenue were the annual incentive plan design applicable to all managerial employeesperformance metrics weighted 75% and 25% respectively. • The EBITDA performance formula determines incentive plan funding and the initial payout percentage for all participants • 100% EBITDA performance to target = 100% incentive pool funding and 100% initial individual payout (see “– How Pay Decisions are Made – Annual Incentive Plan” for the annual incentive plan performance-payout matrix)
• The initial payout percentage may be adjusted up or down based on a quantitative assessment of individual performance vs objectives
• Maximum payout opportunity is capped at 200% of individual target
• Threshold EBITDA performance will result in an initial payout/funding of 70%
• Zero funding and zero initial payout if EBITDA performance is below threshold
• The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives
• In order to satisfy the performance-based pay exception of Section 162(m) of the Internal Revenue Code (the “Code”), which is explained in greater detail under “– How Pay Decision are Made – Annual Incentive Plan”, NEO payouts are determined initially using the following formula:
• Actual EBITDA performance x 2% x executive allocation percentage
• Annual incentive plan payouts are then made according to the underlying EBITDA performance formula and individual payout percentage, subject to the maximum 200% of target cap on payouts
• The calculation of EBITDA performance for annual incentive plan purposes (which we refer to as “Bonus Funding EBITDA”) differs from reportedAIP Adjusted EBITDA because it is calculated using a standard foreign currency exchange rate established at the beginning of the year in order to eliminate the impact of currency exchange volatility on the performance assessmentand revenue metrics operate independently; however revenue only funds if AIP Adjusted EBITDA meets threshold performance.
• Payout will be delivered 100% in cash (from 2013 – 2015, we delivered payouts 75% in cash and 25% in restricted stock units that vest in two equal annual installments)
• Payouts are subject to recoupment under the terms of Nielsen’s clawback policy (see below under “– Other Policies and Guidelines – Clawback Policy”)
| | | | Long-Term Incentive (“LTI”) | | Deliver long-term sustainable performance and align executive rewards with long-term returns delivered to shareholders | | • LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) peer group benchmarking and general market benchmark compensationsurvey data, (3) the NEO’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, (6) role changes, and (7) prior year award | | | | | | | Long-Term Performance Plan (“LTPP”) PRSUs under LTPP
| | Alignment with long-term shareholder return | | • Subject to performance against two 3-yearthree-year cumulative performance metrics, free cash flow, revenue compounded annual growth rate (“revenue CAGR”) and relative total shareholder return, with assigned weighting of 60%50%, 25% and 40%25%, respectively • Represents 60% of the annual grant-date LTI value | | | Performance Restricted Stock Units (“Performance RSUs”)
| | | | • Specific threshold, target and maximum performance metrics for 3-year cumulative free cash flow performance will not be disclosed for competitive reasons but targets are designed to be aggressive and achievable and are fully aligned with our approved 3-year strategic plan and long-term guidance issued to investors at the beginning of the performance period
• The performance payout matrix is shown under “– How Pay Decisions are Made – Long-Term Performance Plan (LTPP)”
• Subject to recoupment under the terms of Nielsen’s clawback policy (see below under “– Other Policies and Guidelines – Clawback Policy”)
• Relative total shareholder return is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve
• Performance metrics for the relative total shareholder return portion are described in more detail under “—How Pay Decisions are Made—Long-Term Performance Plan (LTPP)”
• Represents approximately 50% of the annual LTI value
• Zero payout for performance below threshold
• Maximum payout opportunity is capped at 200% of target
• Payouts capped at target if absolute total shareholder return is negative
• No dividend equivalents on unearned performance RSUs
| | | Stock Options
| | Alignment with shareholder return and retention | | • Service-based equity is delivered in RSUs • Four-year time-vestedThree or four-year service-vesting • Represents approximately 25%40% of LTI value | | | | | | | Restricted Stock Units (“RSUs”) PSOs
| | Alignment with long-term shareholder return and retention | | • Four-year time-vestedSpecial awards subject to the achievement of a Nielsen stock price appreciation goal of 25% for a period of 21 consecutive trading days at any time in the three-year period. • Represents approximately 25% of LTI valuePremium PSOs have a $40 per share exercise price • Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs
| | | | Health and Welfare Plans, Perquisites | | Promote overall wellbeing and avoid distractions caused by unforeseen health/financial issues | | • Health and Welfare plans generally available to other employees • De minimis financial planning and wellness services allowances |
New CEO and CFO Compensation Arrangements CEO Mr. Kenny was appointed CEO effective December 3, 2018. In 2018, the Compensation Committee approved Mr. Kenny’s compensation package. The package was constructed to attract a candidate of Mr. Kenny’s leadership caliber and proven entrepreneurial and digital technology experience in a highly competitive recruitment market. His target compensation of $10,225,000 was positioned at the median of our market benchmarks and is comprised of: | | | | | | | Compensation Element | | 2019 | | | | Base Salary | | $ | 1,300,000 | | | | Annual Incentive | | $ | 1,925,000 | | | | Long-Term Incentives1 | | $ | 7,000,000 | |
1 | | Mr. Kenny’s regular annual long-term incentive is comprised of 60% ($4,200,000) PRSUs and 40% ($2,800,000) service-based RSUs. PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Kenny is an active employee on the vesting date. RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Kenny is an active employee on the vesting date. |
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| | 20162019 PROXY STATEMENT 33 39
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Mr. Kenny received the following compensation awards connected with his hiring: | | | | | | | | | | | Compensation Element | | $ Value | | Form | | Description | | | | | Make Whole Compensation | | $1,500,000 | | Lump Sum Cash | | Payable promptly following Mr. Kenny’s start date to compensate Mr. Kenny for the loss of the 2018 annual incentive payout from prior employer. If Mr. Kenny resigns voluntarily without Good Reason or is terminated for Cause within one year of receiving the payment, Mr. Kenny must repay the amount in full. | | | | | | | $2,500,000 | | Lump Sum Cash | | Payable in February 2019 to compensate Mr. Kenny for the loss of a cash retention award from prior employer, subject to continued employment through the applicable payment date. | | | | | | | $13,742,766 | | 487,505 RSUs | | To replace approximately 84% of the outstanding PRSUs and RSUs from prior employer; this award will vest in three equal annual installments on December 31, 2019, 2020, and 2021, subject to continued employment through the applicable vesting date. | | | | | Total Make Whole Compensation | | $17,742,766 | | 77% Equity-based and 23% Cash | | | | | | | New Hire Inducement | | $1,466,901 | | 367,031 Performance Stock Options | | Option to purchase shares of Company common stock (“Performance Options”), with a seven-year term and an exercise price equal to the closing price of Company common stock on the first day of Mr. Kenny’s employment with the Company, vesting ratably on December 3, 2019, 2020 and 2021, subject to (1) continued employment through the applicable vesting date, and (2) the shares of Company common stock having a closing market price of at least $32.24, a 25% performance improvement over the price at the time of his offer, for at least 21 consecutive trading days prior to December 31, 2021. | | | | | | | $1,400,010 | | 54,285 RSUs | | Cliff vesting on December 3, 2021, subject to continued employment through the vesting date. | | | | | | | $1,620,000 | | 750,000 Premium Priced Stock Options | | Option to purchase shares of Company common stock, with a seven-year term and a $40 per share exercise price, representing a share price appreciation of over 41% over the price on his first day, vesting ratably on December 3, 2019, 2020 and 2021, subject to continued employment through the applicable vesting date. | | | | | Total New Hire Inducement | | $4,486,911 | | 100% Equity-based | | | | | | | Regular Annual Long-Term Incentive | | $4,200,000 | | PRSUs | | PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Kenny is an active employee on the vesting date. | | | | | (first award made in February 2019) | | $2,800,000 | | RSUs | | RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Kenny is an active employee on the vesting date. | | | | | Total Long-Term Incentive | | $7,000,000 | | 100% Equity-based | | |
SummaryIn addition, Mr. Kenny’s offer included the reimbursement of NEO Pay Decisionslegal fees incurred in accepting the position up to $40,000 and the reimbursement of expenses incurred in financial planning of up to $15,000 and a health examination reimbursement of up to $2,500.
CEOCFO
Mr. Barns has served as Chief Executive Officer since January 1, 2014. In 2015, the Compensation Committee reviewed Mr. Barns’Anderson was appointed CFO effective September 10, 2018. His target annual compensation and increased his annual incentive target from $1,800,000 to $2,000,000 and his long-term incentive target from $4,000,000 to $6,000,000, which increased his target compensation toof $3,850,000 was positioned at the median of our executive compensation peer group. Details of Mr. Barns’ compensation can be found below.market benchmarks and was comprised of: | | | | | | | | | | | | | | | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | | % Change from 2014 | Base Salary | | $ | 1,000,000 | | | | N/A | | | $ | 1,000,000 | | | 0% | Annual Incentive | | $ | 1,820,000 | | | $ | 2,000,000 | | | $ | 2,060,000 | 1,2 | | 13.2% | Long-Term Incentive | | $ | 4,000,000 | | | $ | 6,000,000 | | | $ | 6,000,000 | | | 50% |
| | | | | | | Compensation Element | | 2019 | | | | Base Salary | | $ | 800,000 | | | | Annual Incentive | | $ | 800,000 | | | | Long-Term Incentives1 | | $ | 2,250,000 | |
1 | | Actual payout wasMr. Anderson’s long-term incentive is comprised of 60% ($1,350,000) Performance RSUs and 40% ($900,000) service-based RSUs. PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the Compensation Committee’s full year performance assessment. |
2 | | 75% paid in cash and 25% paid inthree-year period commencing January 1, 2019 provided Mr. Anderson is an active employee on the vesting date. RSUs which will vest in four equal annual installments over two years. |
In 2015, Mr. Barns was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:
| | | | | | | | | | | Date | | Grant Type | | # RSUs/Options | | Value1 | | | Performance Period | February 19, 2015 | | Performance RSUs | | 65,860 | | $ | 3,000,000 | | | 2015 - 2017 | October 29, 2015 | | RSUs | | 31,283 | | $ | 1,500,000 | | | N/A | October 29, 2015 | | Stock Options | | 177,515 | | $ | 1,500,000 | | | N/A |
1 | | This iscommencing on the first anniversary of the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly. |
Other NEOs
Jamere Jackson
Mr. Jackson has served as Chief Financial Officer since March 10, 2014. Details of Mr. Jackson’s compensation can be found below.
| | | | | | | | | | | | | | | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | | % Change from 2014 | Base Salary | | $ | 700,000 | | | | N/A | | | $ | 700,000 | | | 0% | Annual Incentive | | $ | 750,000 | | | $ | 800,000 | | | $ | 875,000 | 1,2 | | 6.7% | Long-Term Incentive | | $ | 1,850,000 | | | $ | 1,900,000 | | | $ | 1,900,000 | | | 2.7% |
1 | | Actual payout was basedprovided Mr. Anderson is an active employee on the Compensation Committee’s full year performance assessment. |
2 | | 75% paid in cash and 25% paid in RSUs, which will vest in equal annual installments over two years. |
In 2015, Mr. Jackson was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:
| | | | | | | | | | | Date | | Grant Type | | # RSUs/Options | | Value1 | | | Performance Period | February 19, 2015 | | Performance RSUs | | 20,860 | | $ | 950,000 | | | 2015 - 2017 | October 28, 2015 | | RSUs | | 9,824 | | $ | 475,000 | | | N/A | October 28, 2015 | | Stock Options | | 58,498 | | $ | 475,000 | | | N/A |
1 | | This is the grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly. |
Brian West
Mr. West served as Chief Operating Officer from March 10, 2014 through December 31, 2015. Details of Mr. West’s compensation can be found below.
| | | | | | | | | | | | | | | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | | % Change from 2014 | Base Salary | | $ | 950,000 | | | | N/A | | | $ | 950,000 | | | 0% | Annual Incentive | | $ | 1,800,000 | | | $ | 1,750,000 | | | $ | 1,825,000 | 1,2 | | 1.4% | Long-Term Incentive | | $ | 3,500,000 | | | $ | 3,500,000 | | | $ | 1,700,000 | | | (50%) |
1 | | Actual payout was based on the Compensation Committee’s full year performance assessment. |
2 | | 100% paid in cash in accordance with the terms of his departure from the Company effective December 31, 2015.vesting date. |
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| | 20162019 PROXY STATEMENT 34 40
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Mr. Anderson received the following compensation awards connected with his hiring: | | | | | | | | | | | Compensation Element | | $ Value | | Form | | Description | | | | | New Hire Inducement | | $1,125,000 | | 321,429 Performance Stock Options | | Option to purchase shares of Company common stock (“Performance Options”), with a seven-year term and an exercise price equal to the closing price of Company common stock on the first day of Mr. Anderson’s employment with the Company, vesting ratably on October 26, 2019, 2020 and 2021, subject to (1) continued employment through the applicable vesting date, and (2) the shares of Company common stock having a closing market price of at least $30.75 for at least 21 consecutive trading days prior to October 26, 2021. | | | | | | | $1,125,000 | | 45,732 RSUs | | Vesting in three equal annual installments on October 26, 2019, 2020, and 2021, subject to continued employment through the applicable vesting date. | | | | | | | $400,000 | | Lump Sum Cash | | Payable in March 2019. | | | | | Total New Hire Inducement | | $2,650,000 | | 85% Equity-based and 15% Cash | | | | | | | Regular Annual Long-Term Incentive | | $1,350,000 | | PRSUs | | PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Anderson is an active employee on the vesting date. | | | | | (first award made in February 2019) | | $900,000 | | RSUs | | RSUs will vest in four equal annual installments commencing on the first anniversary of the grant date provided Mr. Anderson is an active employee on the vesting date. | | | | | Total Long-Term Incentive | | $2,250,000 | | 100% Equity-based | | |
In 2015,addition, Mr. WestAnderson’s offer included the reimbursement of expenses incurred in financial planning of up to $15,000 and a health examination reimbursement of up to $2,500. Summary of Other NEO Pay Decisions Nielsen has a strong pay for performance culture which serves to align Company goals and performance with pay outcomes for executives. Below are the highlights of NEO pay for 2018: Mr. Tavolieri was the only NEO to receive a base salary and AIP target adjustment due to a significant expansion of his role. No other NEOs received pay adjustments as part of their regular compensation package in 2018. AIP financial performance targets were not met resulting in a zero percent payout for all eligible NEOs. PRSU threshold performance was not met resulting in zero payouts for awards that matured on December 31, 2018. In light of the business difficulties and turnover at the executive level, in September, the Compensation Committee determined that it was important to stabilize the organization during this volatile period by ensuring the retention of critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. As a result, the Compensation Committee made specialone-time equity based retention awards to three NEOs (Messrs. Dale and Tavolieri and Ms. Phillips). Mitch Barns Mr. Barns served as our CEO from January 1, 2014 through December 2, 2018 and separated from the Company on December 31, 2018. Following its annual review of Mr. Barns’ 2018 compensation at the end of 2017, the Compensation Committee made no changes to his base salary and annual incentive target, but increased his long-term incentive target from $7,500,000 to $8,000,000 in order to further enhance pay for performance and better align Mr. Barns’ total direct compensation with the median compensation level for CEOs in our executive | | |
| | 2019 PROXY STATEMENT 41 |
compensation peer group described under “– Compensation Practices and Governance – Benchmarking.” Details of Mr. Barns’ compensation are set out in the tables below. | | | | | | | | | | | | | | | | | | | | | | 2017 Actual | | | 2018 Target1 | | | 2018 Actual1 | | | % Change from 2017 | | | | | | Base Salary | | $ | 1,000,000 | | | | N/A | | | $ | 1,000,000 | | | 0% | | | | | | Annual Incentive | | $ | 1,700,000 | | | $ | 2,000,000 | | | $ | — | 2 | | -100% | | | | | | Long-Term Incentive | | $ | 7,500,000 | | | $ | 8,000,000 | | | $ | 4,800,000 | | | -36% | | | | | | One-Time Retention Long-Term Incentive | | | N/A | | | | N/A | | | | N/A | | | N/A |
In 2018, Mr. Barns was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:awards: | | | | | | | | | | | Date | | Grant Type | | # RSUs/Options1 | | Value2 | | | Performance Period | February 19, 2015 | | Performance RSUs | | 38,420 | | $ | 1,700,000 | | | 2015 - 2017 | October 28, 2015 | | RSUs | | — | | $ | 0 | | | N/A | October 28, 2015 | | Stock Options | | — | | $ | 0 | | | N/A |
| | | | | | | | | | | | | | | | | | | | Grant Date | | Grant Type1 | | | # Units | | | Value2 | | | Performance Period | | | | | | February 21, 2018 | | | PRSUs | | | | 147,601 | | | | $4,800,000 | | | 2018 - 2020 |
1 | | No RSU/Option award40% of Mr. Barns’ annual LTI target, typically granted in 2015October, was not granted due to hisMr. Barns’ pending departure from the Company. |
2 | | This is the grant date fair value intended to be granted by the Compensation Committee. Actual accounting values reported in tables of the Narrative Disclosure will differ slightly. |
Steve Hasker
In 2015, Mr. Hasker served as Global President with responsibility for the US Media Business and Global product leadership. Effective January 1, 2016, Mr. Hasker was appointed Global President and Chief Operating Officer, with expanded global leadership responsibility for global client service and product leadership across our Watch and Buy businesses. Details of Mr. Hasker’s compensation can be found below.
| | | | | | | | | | | | | | | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | | % Change from 2014 | Base Salary | | $ | 900,000 | | | | N/A | | | $ | 900,000 | | | 0% | Annual Incentive | | $ | 950,000 | | | $ | 950,000 | | | $ | 1,000,000 | 1,2 | | 5.3% | Long-Term Incentive | | $ | 1,850,000 | | | $ | 1,900,000 | | | $ | 1,900,000 | | | 2.7% |
1 | | Actual payout wasCommittee based on the Compensation Committee’s full year performance assessment. |
2 | | 75% paid in cash and 25% paid in RSUs, which will vest in equal annual installments over two years. |
In 2015, Mr. Hasker was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:
| | | | | | | | | | | Date | | Grant Type | | # RSUs/Options | | Value1 | | | Performance Period | February 19, 2015 | | Performance RSUs | | 20,310 | | $ | 900,000 | | | 2015 - 2017 | October 28, 2015 | | RSUs | | 10,083 | | $ | 500,000 | | | N/A | October 28, 2015 | | Stock Options | | 60,037 | | $ | 500,000 | | | N/A |
1 | | This isclosing price of our common stock on the grant date. Actual accounting grant date fair value intended by the Compensation Committee. Actual accounting values reported in “Tables and Narrative Disclosure” will differ slightly. For the PRSUs, the amount reflected above assumes target level achievement. Per the terms of Mr. Barns’ exit agreement,one-third of the awarded units were forfeited. |
John LewisJamere Jackson
In 2015, Mr. LewisJackson served as Global President with global leadership responsibility for our Client Service function and our Consumer Packaged Goods vertical.Chief Financial Officer from March 10, 2014 to September 10, 2018. Following its annual review of Mr. Lewis ceased to be an executive officer on December 30, 2015.Jackson’s compensation, the Compensation Committee made no changes in 2018. Details of Mr. Lewis’Jackson’s compensation can be foundare set out in the tables below.
| | | | | | | | | | | | 2017 Actual | | | 2018 Target1 | | | 2018 Actual1 | | % Change from 2017 | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | % Change from 2014 | | | Base Salary | | $ | 770,000 | | | | N/A | | | $ | 770,000 | | | 0% | | $ | 750,000 | | | | N/A | | | $ | 533,654 | | | -29% | | Annual Incentive | | $ | 750,000 | | | $ | 800,000 | | | $ | 800,000 | 1,2 | | 6.7% | | $ | 680,000 | | | $ | 800,000 | | | $ | — | 2 | | -100% | | Long-Term Incentive | | $ | 1,900,000 | | | $ | 1,900,000 | | | $ | 1,900,000 | | | 0% | | $ | 2,550,000 | | | $ | 2,550,000 | | | $ | 1,530,000 | 2 | | -40% | | One-Time Retention Long-Term Incentive | | | | N/A | | | | N/A | | | | N/A | | | N/A |
1 | | Actual payout wasThe amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on NYSE on the grant date. The value reported in the Summary Compensation Committee’s full year performance assessment.Table may differ slightly, as that represents the accounting grant date fair value. Mr. Jackson forfeited his 2018 long-term incentive award due to his voluntary resignation. As to the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | | 100% paidNo annual incentive award was made to Mr. Jackson for 2018 due to his voluntary resignation. In addition, Mr. Jackson was not awarded the $1,020,000 RSU LTI grant otherwise due in cash in connection withOctober, due to his exitdeparture from the Company. |
In 2015,2018, Mr. LewisJackson was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:awards (which were subsequently forfeited due to his voluntary resignation): | | | | | | | | | Date | | Grant Type | | # RSUs/Options | | Value1 | | Performance Period | February 19, 2015 | | Performance RSUs | | 20,860 | | $950,000 | | 2015 - 2017 | October 28, 2015 | | RSUs | | 9,824 | | $475,000 | | N/A | October 28, 2015 | | Stock Options | | 58,498 | | $475,000 | | N/A |
| | | | | | | | | | | | | | | | | | | | | | Grant Date | | Grant Type | | | # RSUs/Options | | | Value1 | | | Performance Period | | | | | | | February 21, 20182 | | | PRSUs | | | | 47,048 | | | | $1,530,000 | | | | 2018 - 2020 | |
1 | | This is the grant date fair value intended to be granted by the Compensation Committee.Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | | Mr. Jackson forfeited this award due to his voluntary resignation. |
Giovanni Tavolieri Mr. Tavolieri has served as Chief Technology and Operations Officer since August 1, 2017. In 2018, Mr. Tavolieri’s responsibilities increased significantly when he assumed leadership for our US Buy business. Following its annual review of Mr. Tavolieri’s compensation and in light of his increased responsibilities, the Compensation Committee increased his base salary and annual incentive target by $50,000 each. In addition, Mr. Tavolieri was awarded aone-time special retention award of $2,600,000 as part of the targeted special pay program approved by the | | |
| | 2019 PROXY STATEMENT 42 |
Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the coming three years. Details of Mr. Tavolieri’s’ compensation are set out in the tables below. | | | | | | | | | | | | | | | | | | | | | | 2017 Actual | | | 2018 Target1 | | | 2018 Actual1 | | | % Change from 2017 | | | | | | Base Salary | | $ | 466,827 | | | | N/A | | | $ | 582,500 | | | 25% | | | | | | Annual Incentive | | $ | 545,000 | | | $ | 600,000 | | | $ | — | 2 | | -100% | | | | | | Long-Term Incentive | | | 1,300,020 | | | | 1,300,000 | | | | 1,300,000 | | | 0% | | | | | | One-Time Long-Term Retention Incentive | | | N/A | | | | N/A | | | $ | 2,600,000 | 3 | | |
1 | | The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. For the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | | Based on the Company’s performance no annual incentive award was made to Mr. Tavolieri in 2018. |
3 | | One-time long-term retention equity award was 50% RSUs and 50% PSOs with total value of $2,600,000. |
In 2018, Mr. Tavolieri was granted the following long-term incentive equity awards: | | | | | | | | | | | | | | | | | | | | Grant Date | | Grant Type | | | # RSUs/Options | | | Value1 | | | Performance Period | | | | | | February 21, 2018 | | | PRSUs | | | | 23,985 | | | $ | 780,000 | | | 2018 - 2020 | | | | | | October 26, 20182 | | | RSUs | | | | 21,138 | | | $ | 520,000 | | | N/A | | | | | | October 26, 20183 | | | RSUs | | | | 52,846 | | | $ | 1,300,000 | 5 | | N/A | | | | | | October 26, 20184 | | | PSO | | | | 371,429 | | | $ | 1,300,000 | 5 | | ends 10/26/2021 |
1 | | This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the NYSE on the grant date. Actual accounting grant date values reported in “Tables and Narrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | | Vesting of these awards will occur in four equal annual installments beginning on October 26, 2019 and ending October 26, 2022. |
3 | | Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021. |
4 | | Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021, subject to achieving the stock performance target of $30.75 for 21 consecutive days on the NYSE. |
5 | | One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders. |
Eric J. Dale Mr. Dale served as Chief Legal Officer from August 1, 2015 to January 22, 2019. Following its annual review of Mr. Dale’s compensation, the Compensation Committee made no changes in 2018. Mr. Dale was awarded aone-time special retention award of $2,400,000 as part of the targeted special pay program approved by the Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and continuing the transformation of the Company over the next three years. The full value of this award was forfeited upon Mr. Dale’s voluntary resignation from the Company. Details of Mr. Dale’s compensation are set forth in the tables below. | | | | | | | | | | | | | | | | | | | | | | 2017 Actual | | | 2018 Target1 | | | 2018 Actual1 | | | % Change from 2017 | | | | | | Base Salary | | $ | 750,000 | | | | N/A | | | $ | 750,000 | | | 0% | | | | | | Annual Incentive | | $ | 675,000 | | | $ | 750,000 | | | $ | — | 2 | | -100% | | | | | | Long-Term Incentive | | $ | 1,200,000 | | | $ | 1,200,000 | | | $ | 2,399,983 | 3 | | 100% | | | | | | One-Time Long-Term Retention Incentive | | | N/A | | | | N/A | | | $ | 2,400,000 | 3,4 | | |
1 | | The amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2018 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the value of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported in the Summary Compensation Table may differ slightly, as that represents the accounting grant date fair value. For the PRSU portion of the “Long-Term Incentive,” the amount included above assumes target level achievement. |
2 | | Based on the Company’s financial performance no annual incentive award was made to Mr. Dale in 2018. |
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Mary Liz Finn
In 2015, Ms. Finn served as Chief Human Resources Officer leading Nielsen’s Human Resources function globally. Details of Ms. Finn’s compensation can be found below:
| | | | | | | | | | | | | | | | | 2014 Actual | | | 2015 Target | | | 2015 Actual | | | % Change from 2014 | Base Salary | | $ | 550,000 | | | | N/A | | | $ | 550,000 | | | 0% | Annual Incentive | | $ | 425,000 | | | $ | 425,000 | | | $ | 430,000 | 1,2 | | 1.2% | Long-Term Incentive | | $ | 1,200,000 | | | $ | 1,200,000 | | | $ | 1,200,000 | | | 0% |
13 | | Actual payout was based on the Compensation Committee’s full year performance assessment.Awards were forfeited upon Mr. Dale’s voluntary resignation. |
24 | | 75% paid in cashOne-time long-term retention equity award was 50% RSUs and 25% paid in RSUs, which will vest in equal annual installments over two years.50% PSOs with a total value $2,400,000. This was forfeited upon his voluntary resignation. |
In 2015, Ms. Finn2018, Mr. Dale was granted the following long-term incentive equity in line with the target value approved by the Compensation Committee:equity. Due to his voluntary resignation, he will forfeit all grants: | | | | | | | | | | | Date | | Grant Type | | # RSUs/Options | | Value1 | | | Performance Period | February 19, 2015 | | Performance RSUs | | 13,170 | | $ | 600,000 | | | 2015 - 2017 | October 28, 2015 | | RSUs | | 6,205 | | $ | 300,000 | | | N/A | October 28, 2015 | | Stock Options | | 36,946 | | $ | 300,000 | | | N/A |
| | | | | | | | | | | | | | | | | | | | Grant Date | | Grant Type | | | # RSUs/Options | | | Value1 | | | Performance Period | | | | | | February 21, 2018 | | | PRSUs | | | | 22,140 | | | $ | 720,000 | | | 2018 - 2020 | | | | | | October 26, 20182 | | | RSUs | | | | 19,512 | | | $ | 480,000 | | | N/A | | | | | | October 26, 20182 | | | RSUs | | | | 48,780 | | | $ | 1,200,000 | 3 | | N/A | | | | | | October 26, 20182 | | | PSO | | | | 342,857 | | | $ | 1,200,000 | 3 | | ends 10/26/2021 |
1 | | This is the grant date fair value intended to be granted by the Compensation Committee.Committee based on the closing price of our common stock on the grant date. Actual accounting grant date values reported in “Tables of theand Narrative Disclosure” will differ slightly. For the PRSUs, the amount reflected above assumes target level achievement. |
2013 LTPP Performance Payouts
2 | | Due to Mr. Dale’s resignation on February 1, 2019, he forfeited all PRSUs, RSUs and PSOs subject to these grants. |
3 | | One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders. |
Nancy Phillips The performance period for our 2013 LTPP ended on December 31, 2015. Long-term incentive grants under this plan were made in February 2013 and their grant date value was disclosed in our 2014 Proxy. In February 2016,Ms. Phillips has served as Chief Human Resources Officer since January 9, 2017. Following its annual review of Ms. Phillips’ compensation, the Compensation Committee made no changes in 2018. Ms. Phillips was awarded aone-time special retention award of $2,600,000 as part of the targeted special pay program approved performanceby the Compensation Committee aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial targets and payouts under this plan as outlined below.
2013 LTPP Performancecontinuing the transformation of the Company over the coming three years. Details of Ms. Phillips’ compensation are summarized in the tables below:
| | | | | | | | | | | | | | | | | | | PLAN METRICS JAN 1, 2013 – DEC 31, 2015 | | | | | FINAL RESULTS BASED ON PERFORMANCE JAN 1, 2013 – DEC 31, 2015 | | Elements | | Performance Target for 100% Payout | | | | | Result | | | Weight | | | Payout Percentage | | Free Cash Flow1 | | | 2.30B | | | | | | 2.34B | | | | 60% | | | | 102% | | Relative Total Shareholder Return | | | 50th Percentile | | | | | | 65th Percentile | | | | 40% | | | | 160% | | Total Shares | | | N/A | | | | | | N/A | | | | 100% | | | | 125.2% | |
| | | | | | | | | | | | | | | | | | | | | | 2017 Actual | | | 2018 Target1 | | | 2018 Actual1 | | | % Change from 2017 | | | | | | Base Salary | | $ | 480,769 | | | | N/A | | | $ | 500,000 | | | 4% | | | | | | Annual Incentive | | $ | 450,000 | | | $ | 500,000 | | | $ | — | 2 | | -100% | | | | | | Long-Term Incentive | | | 1,300,000 | | | | 1,300,000 | | | | 1,300,000 | | | 0% | | | | | | One-Time Long-Term Retention Incentive | | | N/A | | | | N/A | | | $ | 2,600,000 | 3 | | |
1 | | Free cash flow performanceThe amount under “2018 Target” represents the amount intended to be granted to, earned by and paid to the executive. The amount under “2017 Actual” represents the amount actually granted to, earned by and paid to the executive. The amount for “Long-Term Incentive” is the sumvalue of the grant based on the closing price of our common stock on the NYSE on the grant date. The value reported free cash flow in each calendar year 2013-2015. In May 2014, the Summary Compensation Committee approved $325 million in adjustments to offsetTable may differ slightly, as that represents the impact on free cash flow associated withaccounting grant date fair value. For the acquisition of Arbitron and the divestiturePRSU portion of the Nielsen Expositions business.Long-Term Incentive, the amount included above assumes target level achievement. |
2013 LTPP Payouts1
2 | | Based on the Company’s financial performance no annual incentive award was made to Ms. Phillips in 2018. |
3 | | One-time long-term retention equity award was 50% RSUs and 50% PSOs with a total value of $2,600,000. |
In 2018, Ms. Phillips was granted the following long-term incentive equity awards: | | | | | | | | | | | | | | | Target Performance RSUs Awarded | | | Payout Percentage | | | Awarded Shares | | Mitch Barns | | | 25,000 | | | | 125.2% | | | | 31,300 | | Brian West | | | 30,000 | | | | 125.2% | | | | 37,560 | | Steve Hasker | | | 22,000 | | | | 125.2% | | | | 27,544 | | John Lewis | | | 22,000 | | | | 125.2% | | | | 27,544 | | Mary Liz Finn | | | 16,000 | | | | 125.2% | | | | 20,032 | |
| | | | | | | | | | | | | | | | | | Grant Date | | Grant Type | | # RSUs/Options | | | Value1 | | | Performance Period | | | | | | February 21, 2018 | | PRSUs | | | 23,985 | | | $ | 780,000 | | | 2018 - 2020 | | | | | | October 26, 20182 | | RSUs | | | 21,138 | | | $ | 520,000 | | | N/A | | | | | | October 26, 20183 | | RSUs | | | 52,846 | | | $ | 1,300,000 | 5 | | N/A | | | | | | October 26, 20184 | | PSO | | | 371,429 | | | $ | 1,300,000 | 5 | | ends 10/21/2021 |
1 | | Mr. Jackson was not hired until March 2014This is the value intended to be granted by the Compensation Committee based on the closing price of our common stock on the grant date. Actual accounting grant date fair values reported in “Tables and therefore was not a participantNarrative Disclosure” will differ slightly. As to the PRSUs, the amount reflected above assumes target level achievement. |
2 | | Vesting of these awards will occur in four equal annual installments beginning on October 26, 2019 and ending October 26, 2022. |
3 | | Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021. |
4 | | Vesting of these awards will occur in three equal annual installments beginning on October 26, 2019 and ending October 26, 2021, subject to achieving the 2013 LTPP.stock performance target of $30.75 for 21 consecutive days on the NYSE. |
5 | | One-time long-term retention incentive awards that were part of the special pay program aimed at retaining critical leaders. |
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| | 20162019 PROXY STATEMENT 36 44
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PRSU Payouts Under the 2016 LTPP The performance period for our 2016 LTPP ended on December 31, 2018. PRSU grants under this plan were made in February 2016 and their grant date fair value was disclosed in our 2017 proxy statement. In February 2019, the Compensation Committee determined that the PRSUs granted under this plan did not meet threshold performance levels and approved the vesting of zero shares for all participants as outlined in the table below. 2016 LTPP Performance | | | | | | | | | | | | | | | | Plan Metrics Jan 1, 2016 – Dec 31, 2018 | | | | | Final Results Based on Performance from Jan 1, 2016 – Dec 31, 2018 | | | | | | | Elements | | Performance Target for 100% Payout | | | | | Result | | Weight | | Payout Percentage | | | | | | | Free Cash Flow1 | | $2.85 billion | | | | | | $2.734 billion | | 60% | | 0% | | | | | | | Relative Total Shareholder Return2 | | 50th Percentile | | | | | | 5th Percentile | | 40% | | 0% | | | | | | | Total Shares | | N/A | | | | | | N/A | | 100% | | 0% |
1 | | The free cash flow LTPP performance measure is the sum of free cash flow as reported in our Annual Report on Form10-K for each of the fiscal years in the performance period, adjusted to eliminate foreign currency exchange translation impacts. The elimination of foreign currency exchange translation impacts for the 2016-2018 performance period reduced LTPP free cash flow performance results by $5 million. Please see Annex C for additional information on free cash flow in accordance with United States GAAP. |
2 | | The relative total shareholder return LTPP performance measure is the change in our stock price over the three-year performance period, assuming monthly reinvestment of dividends, compared to that of a peer group of companies. |
2016 LTPP Payouts | | | | | | | | | | | | | | | Name1 | | Target PRSUs Awarded | | | Payout Percentage | | Vested and Delivered in Shares | | | | | | Mitch Barns | | | 73,146 | | | 0% | | | — | | | | | | Jamere Jackson | | | 26,646 | | | 0% | | | — | | | | | | Giovanni Tavolieri | | | 6,270 | | | 0% | | | — | | | | | | Eric Dale | | | 12,540 | | | 0% | | | — | |
1 | | Mr. Kenny was hired on December 3, 2018, Mr. Anderson was hired on September 10, 2018 and Ms. Phillips was hired on January 9 2017, and therefore were not participants in the 2016 LTPP. |
Below is a table of recent and projected future payouts under our LTPP Plan. Our variable pay programs continue to operate as intended. | | | | | | | | | | | | | | | | | 2015 | | | 2016 | | Projected 2017 | | | | | | Payout Percentage | | | 59.15 | % | | 0% | | | 0%1 | |
1 | | Current projection of all performance metrics under the plan is below threshold |
Realizable Pay A significant portion of executive pay is at risk depending“at risk” and depends on business performance and market conditions. The actual pay earned during the year either as cash or made available via thethrough vesting of stockpreviously granted equity awards during the year is referred to as “realizable pay.” Realizable pay is different from the amounts reported in the Summary Compensation Table, (as shown under “– Tables and Narrative Disclosure – Summary Compensation Table”), which uses the accounting grant date fair value offor equity awards. We define realizable pay as:for any given year as the sum of: cash earned as base salary in that year; cash annual incentives and other bonuses earned in that year; intrinsic value (share price minus exercise price) of stock option awards vesting in that year using the closing price of our common stock as reported on the NYSE on the last trading day of that year; | • | |
| | 2019 PROXY STATEMENTcash received as base salary in each year; 45 |
| • | | cash annual incentives and other bonuses earned in each year;
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| • | | intrinsic value (share price minus exercise price) of stock option awards vesting in each year using the share price on December 31, of the respective year;
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market value of equity awards vesting in that year using the closing price of our common stock as reported on the NYSE on the last trading day of that year; and | • | | market value of restricted stock units vesting in each year using the share price on December 31 of the respective year; and
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value of financial planning reimbursements and executive wellness reimbursements as outlined under the “All Other Compensation” column of the Summary Compensation Table. | • | | value of financial planning reimbursements and executive wellness reimbursements as outlined under “– Summary Compensation Table – Other Compensation.”
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The table below presents the realizable pay for each of our NEOs infor 2017 and 2018 and shows the period stated compared to thetotal amount of compensation reported for each of our NEOs in the Summary Compensation Table.Table for 2018. | | | | | | | | | | | | | | | | | | | | | | | | | Realizable Pay1 | | | | | Total Compensation in Summary Compensation Table1 | | | | 2014 | | | 2015 | | | Percentage Increase/ (Decrease) | | | | | 2015 | | | Percent Variance to 2015 Realizable Pay | | Mitch Barns | | $ | 3,813,777 | | | $ | 4,698,766 | | | | 23% | | | | | | $9,102,785 | | | | 94% | | Jamere Jackson2 | | | 2,427,885 | | | | 2,848,486 | | | | 17% | | | | | | 3,795,533 | | | | 33% | | Brian West | | | 4,258,139 | | | | 6,393,850 | | | | 50% | | | | | | 4,996,784 | | | | (22% | ) | Steve Hasker | | | 3,753,249 | | | | 3,557,985 | | | | (5% | ) | | | | | 3,833,814 | | | | 8% | | John Lewis | | | 2,736,003 | | | | 3,487,378 | | | | 27% | | | | | | 3,704,431 | | | | 6% | | Mary Liz Finn | | | 1,928,116 | | | | 2,255,671 | | | | 17% | | | | | | 2,216,066 | | | | (2% | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Realizable Pay | | | | | | Total Compensation in Summary Compensation Table | | | | | | | | | | | 2017 | | | 2018 | | | Percentage Increase/(Decrease) | | | | | | 20181 | | | Percent Variance to 2018 Realizable Pay2 | | | | | | | | | David Kenny | | | N/A | | | $ | 75,000 | | | | N/A | | | | | | | $ | 19,804,677 | | | | 26,306% | | | | | | | | | Mitch Barns | | $ | 5,509,179 | | | $ | 3,224,215 | 3 | | | (41%) | | | | | | | $ | 10,785,368 | 4 | | | 235% | | | | | | | | | David Anderson | | | N/A | | | | 640,000 | | | | N/A | | | | | | | $ | 2,896,470 | | | | 1,107% | | | | | | | | | Jamere Jackson5 | | $ | 3,431,015 | | | | 2,147,572 | | | | (37%) | | | | | | | $ | 2,181,543 | | | | 2% | | | | | | | | | Giovanni Tavolieri | | | N/A | | | $ | 857,187 | | | | N/A | | | | | | | $ | 4,375,478 | | | | 410% | | | | | | | | | Eric J. Dale | | $ | 1,602,817 | | | $ | 1,147,635 | | | | (28%) | | | | | | | $ | 4,271,880 | | | | 272% | | | | | | | | | Nancy Phillips | | $ | 943,591 | | | $ | 624,488 | | | | (34%) | | | | | | | $ | 4,318,093 | | | | 591% | |
1 | | Excludes 25%Portion of the 2015 plan year annual incentive award, which was deliveredamount in RSUs in February 2016 toSummary Compensation Table represented byone-time new hire awards for Messrs. Barns, JacksonKenny (99.6%) and HaskerAnderson (91.5%) andone-time special retention awards for Messrs. Tavolieri (56.2%) and Dale (59.4%) and Ms. Finn. Messrs. West and Lewis received 100% in cash.Phillips (60.2%). Mr. Dale forfeited the special retention award upon his voluntary resignation from the Company. |
2 | | In all cases, the realized pay in 2018 is significantly lower than the values disclosed in the Summary Compensation Table. |
3 | | Excludes severance accruals for Mr. Barns. |
4 | | Includes the full value of severance accruals for Mr. Barns. |
5 | | The Realizable PaySummary Compensation Table value for Mr. Jackson includes a special payment heMr. Jackson received to cover the loss of his unvested SERP benefit at his prior employer as does the Summary Compensation Table (seeemployer. See “– Tables and Narrative Disclosure – Summary Compensation Table”, footnote 1).1. Mr. Jackson repaid this sum upon his resignation from the Company. |
NEO Compensation Practices What we do:
| | | | | What We Do | • | | What We Don’t Do | | | ✓Emphasize long-term equity in prospective pay increases.increases ✓ Use share ownership guidelines to require all executive officers andnon-employee directors to hold a significant amount of Nielsen stock. See “– Compensation Practices and Governance – Share Ownership Guidelines”. ✓ Specify maximum payout thresholds on all individual awards granted under our AIP ✓ Recoup both short-term and long-term incentive awards in the event of financial restatement as a result of intentional misconduct on the part of the executive, and where the award would have been lower as a result of the restatement. This Clawback Policy is shown under “– Compensation Practices and Governance – Other Policies and Guidelines – Clawback Policy.” ✓ Include double trigger provisions for all plans that contemplate a change in control | | Use excise tax gross-up agreements Permit hedging of shares Permit pledging of share-based awards and shares subject to share ownership guidelines Provide tax gross-ups on perquisites Provide dividend equivalents on unearned PRSUs granted under the LTPP Re-price options without shareholder approval |
Require all executive officers to hold a significant amount of Nielsen stock (as outlined under “– Compensation Practices and Governance – Shareowner Guidelines”).
Prohibit hedging of shares and pledging of share-based awards and shares subject to stock ownership guidelines.
Recoup incentive awards in the event of financial restatement as a result of intentional misconduct on the part of the executive, and where the award would have been lower as a result of the restatement). The policy is shown under “– Other Policies and Guidelines – Clawback Policy.”
Offer de-minimis perquisites.
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| | 20162019 PROXY STATEMENT 37 46
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What we don’t do:
No excise tax gross-up agreements.
No single trigger accelerated vesting of equity in the event of a change-in-control.
No dividend equivalents paid on unearned performance restricted stock units granted under the LTPP.
20152018 Pay Decisions and Performance
Total Company Financial Performance – Financial The 2015 Bonus Funding EBITDA achieved 7% growth over the prior year. Consequently, the plan funded at 100% and the initial payout was set at 100% of each NEO’s target bonus opportunity.
| Metric | | Target | | Result | | Target | | Result | Bonus Funding EBITDA growth % over prior year | | 7% | | 7% | | | Adjusted EBITDA growth % over prior year at constant currency1 | | | 1% | | -7.9% | | Revenue growth at constant currency1 | | 4% - 5% | | 5% | | 3.0% | | -0.7% | Free Cash Flow growth as reported | | 18% - 25% | | 18% | | | Free Cash Flow | | | $800MM | | $542MM |
1 | | We calculate constant currency percentages by converting our prior-period local currency financial results using the current period foreign currency exchange rates and comparing these adjusted amounts to our current period reported results. |
CEO Performance Assessment for Mitch Barns
The Compensation Committee considered Bonus Funding EBITDA, total company revenue, and free cash flow performance as presented above, as well as Mr. Barns’ performance against objectives as presented below to arrive at his final performance assessment.
Objectives
| | | | | | | | | | COMMERCIAL GROWTH | | | | | | | | Commercial growth met operating plan objectives as follows:
Total company growth
Reported revenues for the full year decreased 1.8% to $6,172 million mainly due to the impact of foreign currency exchange, but increased 5.0% on a constant currency basis compared to 2014. The Company’s practice is to focus primarily on constant currency results which are a better reflection on the underlying operating performance of the business.
Business segment growth
Revenues within the Buy segment decreased 5.1% on a reported basis, or increased 5.0% on a constant currency basis, to $3,345 million in line with expectations. On a constant currency basis our Buy segment showed strong resilience in emerging markets with revenues increasing 8.5% and continued solid growth of 3.5% in developed markets. The segment growth was driven by our investments in coverage, new client wins and success in new verticals, such as Retail.
Revenues within the Watch segment increased 2.2% on a reported basis, or 4.9% on a constant currency basis, to $2,827 million in line with expectations. Growth was driven by strong performance in Audience Measurement of Video and Text and Marketing Effectiveness.
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| | 2016 PROXY STATEMENT 38
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| | | | | | | | | | STRATEGY & INITIATIVES | | | | | | | | Total audience measurement
The total audience measurement platform went live in the market and is poised for a broader global roll-out. Digital Ad Ratings was rolled out in 17 countries. Digital Content Ratings, the industry’s first comprehensive, cross-platform system for measuring online TV, video, and other digital content across the web and apps, went live in the US. In addition, video-on-demand measurement launched and is now measuring over 6,000 TV episodes.
Acquisitions
Several acquisitions that closed in 2015 enhanced our Total Audience Measurement and Marketing Effectiveness product offerings. In addition, we divested our movie tracking business, National Research Group.
Productivity
Productivity gains were above operating plan expectations.
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| | | | | | | | | | TALENT DEVELOPMENT | | | | | | | | Leadership
Mr. Barns continued to invest in the development of our internal leadership pipeline as evidenced by internal appointments to senior leadership roles including appointments to President – Global Operations, Chief Data Science Officer and Chief Diversity Officer. External hires were made for the roles of Chief Technology Officer and Chief Legal Officer.
Talent pipeline
Mr. Barns continued to make substantial investments in our global top talent leadership programs. These programs continue to attract strong and diverse leadership talent building the foundation for Nielsen’s next generation of leadership. In early 2015, Nielsen debuted at number 22 on the annual list ofBest Public Companies for Leaders in Chief Executive Magazine.
Diversity
Nielsen was named to the “Diversity Top 50” in Diversity Inc. for the second year in a row moving up eight slots to number 42.
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| | | | | | | | | | CAPITAL ALLOCATION | | | | | | | | Balanced capital allocation plan
We increased the quarterly dividend by 12%, executed $667 million of stock buy backs (up 43% from 2014) and increased the go-forward stock repurchase authorization by an incremental $500 million.
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| | 2016 PROXY STATEMENT 39
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| | | | | | | | | | | | | | | | | | | | | | | | | | PERFORMANCE ASSESSMENT | | | | | | | | The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Barns an initial payout of 100% of his target opportunity.
The Compensation Committee assessed that the company’s commercial growth had met objectives and considered the go-live introduction of the Total Audience Measurement capability and integration of Exelate as the foundation of Nielsen’s Enterprise Marketing Platform as exceeding expectations. The Compensation Committee considered Mr. Barns’ leadership impact noting the seamless transition to a new organization structure and steady evolution of his leadership team.
| | | | | Based on its full performance assessment, the Compensation Committee awarded Mr. Barns’ an annual incentive payment of $2,060,000, or 103% of his target opportunity.
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Performance Assessments for Other NEOs
Based on the annual incentive plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) the initial incentive payout for each NEO was 100%.
NEOs were measured against the company financial objectives as disclosed above (under “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”). Additionally, Messrs. Hasker and Lewis were measured against the financial performance of their respective business units.
Mr. Barns makes pay recommendations for his direct reports after quantifying their contributions to Nielsen’s financial performance and assessing performance against objectives set at the beginning of the year. He also considers the quality of the results delivered using a framework that quantifies the performance of each individual relative to his/her peers on factors such as leadership, Nielsen values, and degree of challenge. This qualitative assessment helps manage risk and better differentiates rewards for exceptional leaders.
Performance Assessment for Jamere Jackson
Financial
Mr. Jackson was assessed on total company financial metrics (as described above under “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”) and on his performance against objectives presented below.
Objectives
Strategic Planning
In 2015, Mr. Jackson assumed leadership of the Company’s strategic planning process with the Board. His role included leading the development of an updated capital allocation strategy. In addition, Mr. Jackson’s tax team led the re-domiciling of the company from the Netherlands to England and Wales to increase flexibility to expand our shareholder base globally.
Business Performance
Mr. Jackson’s leadership of the Company’s financial planning and control processes helped Nielsen achieve record financial results in 2015 as outlined in “ – 2015 Pay Decisions and Performance – Total Company Performance – Financial.” Key results included (all growth rates, except free cash flow, are presented on a constant currency basis):
annual revenue growth of 5.0%,
Adjusted EBITDA growth of 7.2%, and
Normalized free cash flow growth of 18.1%.
Mr. Jackson played a key role in identifying and structuring the sale of Nielsen’s National Research Group, our movie tracking business, and reinvesting the proceeds into faster growing businesses such as the Nielsen Catalina Solutions joint venture.
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| | 2016 PROXY STATEMENT 40
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Organizational Capability
In 2015, Mr. Jackson facilitated several global leadership changes within the finance organization. Additionally, our investor relations team was recognized by Institutional Investors as one of the top teams in our industry sector, including #1 rankings in three categories. Mr. Jackson also had significant engagement with Nielsen employee resource groups and our Chief Diversity Officer to grow diversity and inclusion internally.
Capital Allocation
In 2015, Mr. Jackson led the execution of the Company’s balanced capital allocation approach by investing nearly $800 million in growth initiatives in the form of capital expenditures, acquisitions and new product programs, while also leading the execution of the return of nearly $1.1 billion to shareholders in the form of dividends and share repurchases.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Jackson an initial payout of 100% of his target opportunity.
The Compensation Committee considered Mr. Jackson’s stewardship of the Company’s financial results and his contribution in devising and executing the Company’s capital allocation plan. The Compensation Committee noted his contribution to the Company’s strategic plan, and his leadership in divesting non-core assets and re-investing in higher growth segments. Based on its full performance assessment, the Compensation Committee assessed Mr. Jackson’s performance as above expectations and approved a payout of $875,000 or 109% of Mr. Jackson’s target opportunity.
Performance Assessment for Brian West
Financial
Mr. West was assessed on total company financial metrics (as described above under “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”) and on his performance against objectives presented below.
Objectives
Productivity
Mr. West delivered strong cost management with productivity savings well above expectations.
Quality
Mr. West’s team delivered quality performance in large scale syndicated products (TV Ratings and core Buy). Defects and quality escape metrics were at or better than plan.
Acquisitions
Technology and Operations teams were instrumental in the on-plan integration of acquisitions including eXelate, BrandBank, and Affinnova.
Product Delivery
Mr. West’s team seamlessly executed on new product delivery and met 100% of Total Audience product delivery milestones enabling the successful launch of our Total Audience measurement platform in the US.
Organization
In 2015, Mr. West led the external hiring of a new Chief Technology Officer and drove the internal leadership appointment of EVP, Global Operations. In addition, Mr. West restructured his global organization into two distinct organizations, Technology and Global Operations, and seamlessly transitioned responsibilities to the new leaders.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. West an initial payout of 100% of his target opportunity.
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| | 2016 PROXY STATEMENT 41
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The Compensation Committee considered Mr. West’s contribution to the Company’s commercial growth that included the restructuring of his function, productivity savings above operating plan expectations and continuing improvements to quality. Based on its full performance assessment, the Compensation Committee approved a payout of $1,825,000, or 104% of Mr. West’s target opportunity.
Performance Assessment for Steve Hasker
Financial
Mr. Hasker was assessed on total company financial metrics (as described above under “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”), business specific financial metrics, and his performance against the objectives presented below.
Objectives
Watch business growth
Under Mr. Hasker’s leadership, the Watch segment achieved strong results including, on a constant currency basis, revenue growth of 4.9% and Adjusted EBITDA growth of 6.6%. Total Audience Measurement of Video and Text and Marketing Effectiveness, both key elements to our growth strategy, saw 6.4% and 21.0% revenue growth, respectively. In addition, Mr. Hasker drove key international TV and digital measurement contract renewals accelerating global growth. For the reconciliation to the most directly comparable GAAP measure, see page 43 of our annual report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 19, 2016.
Total Audience
A critical objective for Mr. Hasker in 2015 was to launch Total Audience measurement in the US and establish a strategy for global roll-out, which was accomplished. Our Total Audience platform provides complete measurement of audience viewing behavior across all platforms and devices. Mr. Hasker’s team launched Digital Ad Ratings in 17 countries and Digital Content Ratings in the US, our cross platform system for measuring online TV, video, and other digital content across the web and apps. In addition, Mr. Hasker’s team also executed on the expansion of its national TV ratings panels, including making several improvements to the methodology used.
Strategy
Mr. Hasker led the formulation of our strategy and investment program to create an integrated Connected Buy System platform and also played a key role in the identification and acquisition of eXelate whose technology provides the core of our Enterprise Marketing Platform initiative.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Hasker an initial payout of 100% of his target opportunity.
The Compensation Committee considered the company’s commercial growth and the revenue performance of the global Watch business, which was in line with expectations. The Compensation Committee considered Mr. Hasker’s execution of the launch of Total Audience Measurement to be above-expectations. In light of Mr. Hasker’s achievements, effective January 1, 2016, he was promoted to Global President and Chief Operating Officer with responsibility for the commercial performance and product development of our Global Watch and Buy businesses. Based on its full performance assessment, the Compensation Committee approved a payout of $1,000,000, or 105% of Mr. Hasker’s target opportunity.
As a result of his promotion to the position of Global President and Chief Operating Officer, Mr. Hasker’s annual incentive opportunity was increased 16% to $1,100,000 and his annual equity target was increased to $3,000,000. No adjustments were made to his base salary of $900,000.
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Performance Assessment for John Lewis
Financial
Mr. Lewis was assessed on total company financial metrics (as described above under “– CEO performance assessment – Financial”), business specific financial metrics, and on his performance against objectives presented below.
Objectives
Buy Business Growth
Mr. Lewis was responsible for global client service and the commercial performance of the global Buy business. In the Buy business, on a constant currency basis, global revenues increased by 5.0% while Adjusted EBITDA grew at 7.8%. (For the reconciliation to the most directly comparable GAAP measure, see page 43 of our annual report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 19, 2016.) Mr. Lewis successfully integrated our acquisition of Brandbank to support longer-term revenue and EBITDA growth throughout Europe.
Organization
Mr. Lewis made important adjustments to our region structure and delivered financial results in line with expectations. In addition, he appointed a new internal leader for our Latin America region who delivered double-digit revenue growth, exceeding plan. Under Mr. Lewis’ leadership we also created a global Retailer vertical which posted low double-digit growth.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Mr. Lewis an initial payout of 100% of his target opportunity.
The Compensation Committee considered the company’s commercial growth and the performance of the Global Buy business. It also noted his creation of the global retailer vertical and its initial performance that was on target. Based on its full performance assessment, the Compensation Committee approved a payout of $800,000 or 100% of Mr. Lewis’ target opportunity.
Performance Assessment for Mary Liz Finn
Financial
Ms. Finn was assessed on total company financial metrics (as described above under “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”) and on her performance against objectives presented below.
Objectives
Nielsen Employee Experience
Ms. Finn created and rolled out the “Nielsen Employee Experience” – an important initiative to foster a motivational and inclusive working environment where you can “Be Yourself, Make a Difference and Grow with Us.” The Compensation Committee noted that we accomplished a 98% response rate in our bi-annual employee survey and the Company scored above the highest performing companies on 14 out of 19 key attributes measured.
Talent and Leadership Development
Ms. Finn led the hiring of the Chief Technology Officer and Chief Legal Officer, and the promotion of the Chief Diversity Officer. In conjunction with Mr. Barns, she led the company’s organization and succession planning review process which facilitated eight senior leadership role changes. Ms. Finn sponsored substantial investments in our global leadership development programs and continued to grow and improve our entry level rotational leadership programs. In early 2015, Nielsen debuted at number 22 on the annual list ofBest Public Companies for Leaders in Chief Executive Magazine.
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Diversity
Ensuring that our associates are representative of the markets we serve and communities we live in is a fundamental tenet of our business. We believe that diversity and inclusion provide us with growth, strength, and innovation. In 2015, Ms. Finn continued to advance Nielsen’s efforts to promote diversity and inclusion as integral to our strategy. Several leadership moves strengthened the diversity within our senior leadership team, including the roles of President, Expanded Verticals, Chief Data Science Officer and Chief Diversity Officer. In addition, Ms. Finn continued to make substantial investments in our Diverse Leadership Network and our entry level rotational leadership programs. Nielsen was named to the “Diversity Top 50” by Diversity Inc. for the second year in a row, moving up eight slots to number 42.
Data Analytics
A key 2015 objective for Ms. Finn and her team was to enhance our people analytics capabilities. Ms. Finn completed phase 1 and began delivering meaningful people analytics that allowed for enhanced business performance across the Company.
Performance Assessment
The plan formula (see under “– How Pay Decisions are Made – Annual Incentive Plan”) provided Ms. Finn an initial payout of 100% of her target opportunity.
The Compensation Committee considered the company’s commercial growth and additionally noted Ms. Finn’s contribution to the advancement of our talent strategy, leadership development programs and diversity initiatives. In addition, the Compensation Committee considered the implementation and adoption of the Nielsen Employee Experience and the enhanced people analytics capabilities as above expectations. Based on its full performance assessment, the Compensation Committee approved a payout of $430,000 or 101% of her target opportunity.
How Pay Decisions are Made Annual Base Salaries Base salary is the only fixed component of our executive officers’ compensation. The Compensation Committee considers benchmark compensation information for executives serving in similar positions at peer companies and general market benchmarkssurvey data supplied by its compensation consultant, Meridian Compensation Partners, LLC – (“Meridian”), to help ensure that base salaries of the Company’s NEOs are competitive in the marketplace and are serving their purpose to attract and retain top talent. The Compensation Committee considers salary increases for the Company’s executive officers for salary increases generally in24-36+ month intervals unless there is a change in role.role or circumstances that warrant consideration. Executive officers are not involved in determining their own compensation. Annual Incentive Plan The purpose of the annual incentive planAIP is to motivate executives to accomplish short-term business performance goals that contribute to long-term business objectives. The Compensation Committee approves the applicable performance measures and performance targets under the plan at the beginning of each year. At the beginning of the fiscal year following the end of the performance period the Company’s and the executives’ actual achievement under the performance measures and performance targets is reviewed and assessed, and the Compensation Committee approves the cash amounts payable to such executives. The NEOs participate in the same incentive plan as the Company’s senior managers (approximately 900 associates). Approximately 9% of the incentive fund was paid to NEOs in 2015.managers. In determining the target opportunity for each NEO, the Compensation Committee considered benchmark compensation information for executives serving in similar positions at peer companies and general industry market benchmarks and peer groupsurvey data provided by Meridian; executives’ total direct compensation mix; changes in role and job responsibilities; and companyCompany financial performance and individual performance. In 2015 we discontinued our practice of setting individual incentive targets atUnder the level of prior year payouts. WhileAIP, the prior year payout method had served its initial purpose well – particularly in establishing our culture of meritocracy – its effect over time tended to restrict our ability to provide market competitive and motivating targets for segments of our employee population. We decided, therefore, to revert to the approach of setting a target opportunity each year as described in “Executive Compensation Overview – Executive Compensation Elements.”
In connection with this change we simplified the description of the formula by which the incentive pool is funded such that 100% Bonus Funding EBITDA performance to target equates to 100% pool funding.
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162(m) Plan
Under Section 162(m) of the Code, expenses from compensation tocovered employees in excess of $1 million (per employee) during a taxable year are only tax-deductible to the extent that the compensation is “performance-based” or otherwise qualifies as exempt from the deductible limit. Ourmaximum potential annual incentive payments qualify as “performance-based compensation” under the Code. Our covered employees are our chief executive officer and the three other most highly-paid named executive officers, other than our chief financial officer. A maximum annual incentive payout fund for the NEOs is determined by a formula which calculates 2%200% of Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 18% of the fund. This yields a maximum fund and the Committee exercises negative discretion to determine final payouts using the Annual Incentive Plan Payout Formula described below. This qualifies payouts under the plan as tax deductible under Section 162(m).their annual incentive target.
Annual Incentive Plan Payout Formula A total payout fundThe amount at which the AIP funds and that is available for payouts is derived formulaically based on our achievementAIP Adjusted EBITDA and revenue growth against oura target growth of “Bonus Funding EBITDA”and is expressed as a “funding percentage”; see – 100% achievement of the Bonus Funding EBITDA target yields a 100% funding percentage.“Performance – Payout Formula” table below.
Bonus Funding EBITDA differs from the calculation ofTo assess Adjusted EBITDA because it is calculated using a standard 2015 budget rateperformance for annual incentive funding, we recalculate Adjusted EBITDA as defined in our Annual Report on Form10-K for the corresponding performance period to eliminate the impact of foreign currency exchange. The Bonus Funding EBITDA growth targets for 2015 were calculated from 2014on the year’s result by using a standard exchange rate established at the beginning of the performance period. We refer to this performance measure under the AIP as “AIP Adjusted EBITDA performance restated at 2015 budget rates.EBITDA”.
Initial individual payouts are determined by applying the “funding percentage” to the individual’s target award opportunity. | | |
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Final individual payouts are determined after a full assessment of each individual’s performance versus quantitative objectives combined with a qualitative assessment.of: IndividualEach individual’s contribution to overall Company performance; see “– 2018 Pay Decisions and Performance – Total Company Financial Performance”;
Other quantitative objectives; and A qualitative assessment to take into account, as appropriate, degree of difficulty, extraordinary market circumstances, and leadership impact. Based on the full assessment, individual payouts may be adjusted up or down from the initial payout to ensure that total performance is reflected in the final payouts. Aggregate individual payouts may notunder the AIP cannot exceed the total payout fund.amount of the funded plan pool.
Both AIP Adjusted EBITDA and revenue metrics operate independently; however revenue only funds if AIP Adjusted EBITDA meets threshold performance. Performance targets are aggressive and achievable The Compensation Committee believes that Bonus FundingAIP Adjusted EBITDA and revenue growth isare highly correlated to the creation of shareholder value for our shareholders and isare an effective measure of NEO’sthe NEOs’ contributions to short-term companyCompany performance. The AIP Adjusted EBITDA and revenue performance targets are the Board-approved operating plan targets In establishing the plan’s Bonus FundingAIP Adjusted EBITDA and revenue growth target,targets, the Compensation Committee considered the Company’s historical performance against prior year targets and concluded that the process had been effective in establishing targets that were both aggressive and achievable. It noted that, over the prior five years, both AIP Adjusted EBITDA and revenue had grown at a challenging annual growth raterates and, in each year, had been assessed as either on target or closely approaching target. The 2015 Bonus Funding EBITDA growth target was fully aligned with our 2015 operating plan.
Funding formula and individual payouts | | The formula correlates levels of AIP Adjusted EBITDA and revenue performance, as defined above, to funding/initial payout percentages. This formula was weighted 75% to AIP Adjusted EBITDA, and 25% to revenue performance. A 100% funding percentage is achieved if performance for both metrics meets the performance targets as approved by the Compensation Committee at the beginning of the plan year.If performance falls below the Minimum threshold, no payouts are awarded. Funding and payouts are capped at 200%. |
The funding/initial payout formula shown below correlates Bonus Funding EBITDA growth from prior year with payout percentages indexed to target opportunities. For 2015, a funding/initial payout of 100% is achieved when Bonus Funding EBITDA performance meets the target threshold of 7% growth. If performance falls between the benchmark performance targets, the payout amount is calculated using interpolation between those benchmarks. If performance falls below the minimum threshold, no payouts are funded.Performance – Payout Formula
| | | | | | | | | | | | | | | | | | | AIP Adjusted EBITDA | | | Revenue | | Performance Milestones | | Growth vs Prior Year (Index %) | | | Funding/ Initial Payout %1 | | | Growth vs Prior Year (Index %) | | | Funding/ Initial Payout %1 | | | | | | | Maximum | | | 109% | | | | 200% | | | | 106% | | | | 200% | | | | | | | Exceptional | | | 105% | | | | 150% | | | | 105% | | | | 167% | | | | | | | Target | | | 101% | | | | 100% | | | | 103% | | | | 100% | | | | | | | Minimum | | | 94% | | | | 50% | | | | 100% | | | | 50% | | | | | | | < Minimum | | | <94% | | | | 0% | | | | <100% | | | | 0% | |
1 | | The AIP funding percentage and initial payout percentage are determined using linear interpolation if actual performance falls between any two performance levels. |
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Performance – Payout Formula
| | | | | | | | | Performance Milestones | | Growth vs Prior Year (index %) | | | Funding/Initial Payout % | | Maximum | | | 167% | | | | 200% | | Exceptional | | | 114% | | | | 114% | | Target | | | 107% | | | | 100% | | Actual Performance | | | 107% | | | | 100% | | Minimum | | | 97% | | | | 70% | | < Minimum | | | <97% | | | | Zero | |
Additionally, the Compensation Committee considers total company financial performance (see “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”) and each NEO’s contribution to that performance. Performance against other objectives is assessed and consideration given to qualitative factors such as degree of difficulty, extraordinary market circumstances, and leadership impact. As a result, initial payouts for each individual may be adjusted up or down to ensure that total performance is reflected in the final payout. NEOs who are assessed as performing above expectations receive higher payouts than they would have received if their bonus were calculated based only on the initial payout.
Individual payouts are capped at 200% of the target bonus opportunity
2015 Results
The 2015 Bonus Funding EBITDA achieved 7% growth over prior year. Consequently, the plan funded at 100% and the initial payout was set at 100% of each NEO’s target bonus opportunity.
Before approving the incentive plan funding, the Compensation Committee assessed the Company’s free cash flow performance against annual plan objectives. The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives. There is no discretion to increase the fund in the event that free cash flow performance exceeds objectives.
We define free cash flow as net cash provided by operating activities less capital expenditure. For a reconciliation of free cash flow to net cash provided by operating activities, see “– Executive Summary.”
The Compensation Committee reviewed the Company’s free cash flow performance, which was within our target range at 18% growth over prior year (as shown under “– Executive Summary” and “– 2015 Pay Decisions and Performance – Total Company Performance – Financial”). Therefore, no reduction was made to the incentive funding.
2016 Changes
The Compensation Committee noted that the proportion of equity in executives’ total annual pay mix had reached the targeted range. Therefore, for the 2016 plan year, annual incentive payouts will revert to being paid 100% in cash (versus 75% cash and 25% in RSUs that had been our practice since 2013).
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2018 Results In February 2019, the Compensation Committee evaluated performance under the 2018 AIP. The Compensation Committee determined that the Company’s AIP Adjusted EBITDA growth index and revenue growth achieved in 2018 under the AIP did not meet threshold performance yielding an AIP funding percentage of zero percent for all eligible NEOs. 2019 Changes The Compensation Committee regularly reviews incentive pay metrics to make sure those are aligned with the company’s strategies and financial goals as well as relevant metrics to drive management performance around those goals. As a result of the most recent updated analysis, the Compensation Committee made the following changes to performance metrics and weightings for 2019. Revenue and Adjusted EBITDA margin performance will each represent 35% of the pool. Both Adjusted EBITDA margin and revenue must meet threshold performance for either metric to fund. Free cash flow performance will fund 30% of the pool. Each of the performance targets are the Board-approved operating plan targets for 2019. These changes are meant to better align the annual performance targets with variables that are tied to the company’s growth, profitability, and cash generation. Long-termLong-Term Incentives (LTI)
The purposespurpose of long-term incentive awards areis to focus executives on long-term sustainable performance and to align executive rewards with long-term returns delivered to shareholders. Currently, all long-term incentives are delivered as equity-based awards. LTI MIX – 50%60% IS SUBJECT TO QUANTIFIABLE LONG-TERM PERFORMANCE
Equity-based awards are made to executives, other employees and directors pursuant to the Amended and Restated Nielsen 2010 Stock Incentive Plan (the(as amended, the “2010 Plan”). Our goal is to provide at least 50% of the NEONEOs’ total direct compensation pay mix in long-term equity, progressing to 60% over time, and to have approximately 50%60% of the LTI subject to quantifiable long-term performance metrics. metrics, which are granted as PRSUs. Our practice is to grant the service-based portion of LTI as RSUs to align with market practice in the digital marketplace in which we compete for top talent and in recognition of its belief that RSUs incent executives to improve performance through share price appreciation, as well as, provide a powerful retention effect. Prior to finalizing award sizes, the Compensation Committee considers considers: current Company financial performance and individual performance; general industry market benchmarks and peer group data provided by its compensation consultant, Meridian; executives’ total direct compensation mix and prior year award values; and changes in role and job responsibilities; current companyresponsibilities. | | |
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Given 2018’s business difficulties and in light of the turnover at the executive level, in September the Compensation Committee decided to launch a targeted special pay program aimed at retaining critical leaders responsible for strategy development, delivering the revised 2018 financial performancetargets and individualcontinuing the transformation of the Company over the coming three years. As described further under “– Summary of Other NEO Pay Decisions” above, select senior leaders, including certain of the NEOs, received equity-based specialone-time retention awards. The awards were designed to provide meaningful retention value and reward superior stock price performance. For each participant, half of the award value is denominated in PSOs subject to a challenging stock price growth hurdle of 25%. The remaining award value is denominated in service-based RSUs for their retention value as well as alignment with stock price performance. Both components vest ratably over 3 years except that PSOs will only become exercisable if the stock price goal is achieved for 21 or more consecutive days within the three-year period. Performance Restricted Stock Units Awarded Under the Long-Term Performance Plan (LTPP) 2015 Plan
2018 Plan LTPP participants are awarded a target number of performance RSUsPRSUs that are earned subject to the Company’s performance against twothree cumulative 3-yearthree-year performance metrics,metrics. In addition to free cash flow and relative total shareholder return with assigned weightings of 60% and 40%(“TSR”), respectively. Thethe Compensation Committee decidedadded three-year revenue CAGR as a performance metric for the 2018 LTPP to assign more weight toreinforce the importance of driving long-term revenue growth. For the 2018 plan, 50% of the total LTI award opportunity will be based on free cash flow metric over which executives have relatively more direct control. performance against target, 25% will be based on relative total shareholder return and 25% will be based on three-year revenue CAGR. The performance period for the 2018 grant commenced on January 1, 20152018 and ends on December 31, 2017.2020. Grants are denominated in share unitsRSUs and settled in Nielsen shares. Based on the performance at the end of the 3-yearthree-year period, executives may earn less or more than the target performance RSUsPRSUs granted. Relative total shareholder return below the 30th30th percentile of our performance peer group, revenue CAGR below 3% or free cash flow performance below 85% of the free cash flow target will result in 0%zero percent payout for eachthat metric. Payouts for each metric are calculated independently of each other. The maximum payout for each metric is 200%. In the case of absolute negative total shareholder return of the Company over the performance period, payments under the relative total shareholder return component of the plan are capped at 100% of target. The table below summarizes the planLTPP performance-payout matrix which is unchanged from 2014. The Compensation Committee re-affirmed its belief that this design provides appropriate rigor infor the ratio of performance to reward, as well as, the right balance between individual risk and motivation. The free cash flow targets are intended to be aggressive and achievable and are fully aligned with our 3-year strategic plan objectives and long-term guidance issued to investors.2018 cycle. | | | | | | | | | | | | | | | | | PLAN DESIGN1 | | | | | | | | | | | | | Milestones | | Free Cash Flow (% to target) | | | Free Cash Flow Payout (60% weight) | | | Relative Total Shareholder Return (percentile rank) (40% weight) | | | Relative Total Shareholder Return Payout | | Maximum | | | 120% | | | | 200% | | | | 75th | | | | 200% | | Target | | | 100% | | | | 100% | | | | 50th | | | | 100% | | Minimum | | | 85% | | | | 50% | | | | 30th | | | | 50% | | Below Minimum | | | <85% | | | | 0% | | | | <30th | | | | 0% | |
| | | | | | | | | | | | | | | | | | | Plan Design1 | | | | | | | | | | | | | | | | | | Metric | | Weight | | | | | Threshold | | Target | | Maximum | | | | | | | Free Cash Flow | | | 50% | | | Performance | | 85% | | 100% | | 120% | | | | | | | | | | | | | Payout | | 50% | | 100% | | 200% | | | | | | | Relative TSR | | | 25% | | | Performance | | 30th Percentile | | 50th Percentile | | 75th Percentile | | | | | | | | | | | | | Payout | | 50% | | 100% | | 200% | | | | | | | Revenue | | | 25% | | | Performance | | 3% CAGR | | 4% CAGR | | 4.5% CAGR | | | | | | | | | | | | | Payout | | 50% | | 100% | | 200% |
1 | | The performance metrics operate independentlyindependently. |
Relative Total Shareholder Return Peer Group Each year, the Compensation Committee reviews the peer group in order to determine the appropriate peer companies used to measure our relative total shareholder return for grants made that year under the LTPP. The peer group for determining achievement under relative total shareholder return is distinct from the peer group used to evaluate grants made that year and set compensation levels discussed under “— Compensation Practices and Governance — Benchmarking.” In their review of the peer group used to measure relative total shareholder return, the Compensation Committee considers the following: companies in businesses similar to Nielsen and/or representative of the markets it serves; | | |
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After a comprehensivecompanies with similar economic profiles to Nielsen; and
companies with historical stock price correlation to Nielsen’s stock price. Based on this review, of reports from Meridian, other advisors, and Nielsen’s management team in 2013, the Compensation Committee approved a performance peer group solely formade no changes to the purposes of measuring our2017 relative total shareholder return under the LTPP. The peer group includes companies in comparable businesses to Nielsen, as well as companies representing the markets we serve. Four companies were added to the peer group in 2015.for 2018 (except GfK SE was removed because that company was no longer publicly traded). | | | | | 2018 LTPP PEER GROUPPeer Group | | | | | Accenture plc | | Moody’s Corporation (new in 2015)MSCI Inc. | Coca-Cola Company | | Dun & Bradstreet Corporation | | MSCIOmnicom Group, Inc. | Colgate-Palmolive Company | | Equifax Inc. | | Omnicom Group, Inc.Publicis Groupe (ADR) | Dun and Bradstreet Corporation | | Experian plc | | The Procter & Gamble CompanyRELX (NV) | Equifax Inc. | | RELX plc (formerly Reed-Elsevier) | Experian plc | | Thomson Reuters Corporation | FactSet Research Systems Inc. | | Time WarnerS&P Global, Inc. | GfK SE | | Gartner Inc | | Twenty-First Century Fox, Inc.Thomson Reuters Corporation | | | IHS Inc.Markit Ltd. | | Unilever N.V. (ADR)Verisk Analytics, Inc. | IMS Health Holdings, Inc. (new in 2015) | | Viacom Inc. (new in 2015) | The Interpublic Group of Companies, Inc. | | Wolters Kluwer NV/ADR/(NV/ADR) | McGraw Hill Financial, | | IQVIA Holdings Inc. (formerly Quintiles IMS Holdings Inc.) | | WPP plc (new in 2015) (ADR) | | | Moody’s Corporation | | |
Stock Options and Restricted Stock Units2019 Changes
The stock optionCompensation Committee made the following changes to the 2019 performance plan. The performance metrics will include three-year revenue compound annual growth (no change versus 2018) and RSU awards are intended to enhance the retention valueadjusted earnings per share (“EPS”) (new in 2019 and as defined in Annex C). The weightings of the equity programmetrics will be 50% on revenue growth and align with50% on adjusted EPS. Relative TSR performance, which had been a metric in the creation of shareholder value. Both stock optionspast, will become a modifier to the initial payout factor established through revenue growth and RSUs vest over four years in equal annual installments.EPS performance. In 2015,making these changes, the Compensation Committee provided approximately 25%considered various inputs, including key measures that will drive long-term value and consideration of relative shareholder value. The Relative TSR peer group will remain the NEO LTI values in stock options and 25% in RSUs.same for the 2019 PRSU plan except that Dun & Bradstreet Corporation has been removed from the peer group because that company is no longer publicly traded. | | |
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Compensation Practices and Governance Compensation Committee The Compensation Committee regularly reviews the philosophy and goals of the executive compensation program and assesses the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee considers the recommendations, the peer group benchmark compensation information and general market survey data provided by its independent consultant as well as the judgment of the CEO on the performance of his direct reports. The CEO does not participate in the Compensation Committee discussion regarding his own compensation. The Compensation Committee makes its decisions based on its assessment of both Nielsen and individual performance against goals, as well as on its judgment as to what is in the best interests of Nielsen and its shareholders. The responsibilities of the Compensation Committee are described more fully in its charter, which is available inon the Corporate Governance page of our website atwww.nielsen.com/investorsunder Corporate Governance: Governance Documents: Compensation Committee Charter. In fulfilling its responsibilities, the Compensation Committee is entitled to delegate any or all of its responsibilities to subcommittees of the Compensation Committee. The Compensation Committee may delegate to one or more officers of the Company the authority to make grants and awards of cash or options or other equity securities to anynon-Section 16 officer of the Company under the Company’s incentive-compensation or other equity-based plans as the Compensation Committee deems appropriate and in accordance with the terms of such plan; so long as such delegation is in compliance with the relevant plan and subject to the laws of England and Wales and the Company’s articles of association. Independent Compensation Consultant The Compensation Committee retains Meridian as its compensation consultant. Meridian has provided peer group benchmark compensation information, general market survey data and perspective on executive and independent director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 20152018 other than executive and director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those discussions necessary to complete work on behalf of the Compensation Committee. The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 20152018 did not raise any conflict of interest. | | |
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Benchmarking The Compensation Committee uses the executive compensation of a peer group of companies, selected for their business relevance and size appropriateness to Nielsen, as one of many considerations when making executive compensation pay decisions. To account for differences in theNielsen’s size of our peer group companies,compared to market benchmarks, the market data are statistically adjusted as necessary to allow for valid comparisons tosimilarly-sized companies. The peer group information may also be supplemented by general industry survey data selected by Meridian to provide reasonable benchmarks for a companyCompany of Nielsen’s size and business type. After a review by the Compensation Committee, in December 2014, Adobe Systems Incorporated was addedno changes were made to the peer group and Dun & Bradstreet, Inc. and Teradata Corp were removed.for 2018. | | | 2015 PEER GROUP | | 2018 Peer Group | | | | | Adobe Systems Incorporated (new in 2015) | | IHS Inc. | Alliance Data Systems Corporation | | The Interpublic Group of Companies, Inc. | | | Alliance Data Systems Corporation | | IQVIA Holdings Inc. | | | Automatic Data Processing, Inc. | | McGraw-Hill Financial, Inc.Moody’s Corporation | | | Cognizant Technology Solutions Corporation | | Moody’s CorporationOmnicom Group, Inc | DirecTV Group Holdings, LLC | | Equifax Inc. | | Omnicom Group,S&P Global, Inc. | Equifax Inc. | | Experian plc | | salesforce.com inc.Inc. | Experian plc | | Thomson Reuters Corporation | Fiserv, Inc. | | Thomson Reuters Corporation | | | IHS Markit Ltd. | | Verisk Analytics, Inc. |
Consideration of Risk The Compensation Committee conducted a risk assessment of Nielsen’s 20152018 pay practices, which included the review of a report from Meridian. TheAs a result of this assessment, the Compensation Committee concluded that it believes that Nielsen’s pay programs are not reasonably likely to have a material adverse effect on Nielsen, its business and its value. Specifically, the Compensation Committee noted the following: Good balance of fixed andat-risk compensation, andincluding a good balance of performance in LTI plans plus share ownership requirementsplans. Overlapping vesting periods that expose management, including the CEO, to consequences of their decision-making for the period during which the business risks are likely to materialize. Adjusted EBITDA and revenue performance, Company-wide financial metrics, funds annual incentives and the Compensation Committee has discretion to reduce payouts if free cash flow targets are not met which results in shared value with shareholdersincentives. Annual incentive plan payout curve is reasonable, including steeper slope inPayouts under the payout curve for zero or negative EBITDA growth over prior year. PayoutsAIP and LTPP are capped at 200% of a recipient’s target award opportunity.
A small number of associates receive commission and sales incentive payments. Nielsen management completed an annual review of their commission and sales incentives to ensure that they do not provide employees with an incentive to take unexpected or higher levels of risk. Nielsen introduced a share purchase plan in 2016, which provides employees with the opportunity to purchase shares through payroll deduction. The purchase of shares aligns the interests of employees with the interests of shareholders and increases employee focus on longer-term performance. As of December 2018, the program has been rolled out to ~55% of global associates. Nielsen has continued to expand the equity eligible population. Increasing ownership creates better alignment with investors and helps to discourage employees from taking risky decisions that could be detrimental to Nielsen over the long run. Executive compensation is benchmarked annuallyannually. Compensation Committee retains an independent consultantconsultant. Significant share ownership requirements for executives and independent directors. Nielsen has a compensation clawback policy and anti-hedging policypolicy. Pledging of shares subject to share ownership requirements is prohibitedprohibited. RobustNielsen has a robust code of conduct and whistleblower policypolicy.
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Share Ownership Guidelines To ensure strong alignment of executive interests with the long-term interests of shareholders, executives are required to accumulate and maintain a meaningful level of stockshare ownership in the Company. The share ownership guideline policy was adopted in June 2011. Messrs. Barns and Hasker first became subject to our share ownership guidelines in 2013. Mr. Barns’ guideline was subsequently changed from three times to six times salary on January 1, 2014 when he became the Company’s Chief Executive Officer. | | |
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The table below presents the guidelines and actual share ownership as of March 1, 2016December 31, 2018 for each of our NEOs. Messrs. West and Lewis who had both met their share ownership guidelines have been excluded from the table because Mr. West has departed from the company and Mr. Lewis is no longer an executive officer. | | | | | | | | | | | | | Name | | Guideline | | | Guideline Shares1 | | | Share Ownership2 | | Mr. Barns | | | 6 x salary | | | | 128,800 | | | | 88,682 | | Mr. Jackson | | | 3 x salary | | | | 45,100 | | | | 13,818 | | Mr. Hasker | | | 3 x salary | | | | 57,900 | | | | 36,644 | | Ms. Finn | | | 1 x salary | | | | 14,000 | | | | 32,363 | |
| | | | | | | | | | | | | | | | | Name | | Guideline | | | Guideline Shares1 | | | Share Ownership2 | | | | | | Mr. Kenny | | | 6 x salary | | | | 334,300 | | | | 541,790 | | | | | | Mr. Anderson3 | | | 3 x salary | | | | 102,900 | | | | 46,323 | | | | | | Mr. Tavolieri | | | 3 x salary | | | | 77,200 | | | | 118,971 | | | | | | Mr. Dale | | | 3 x salary | | | | 96,400 | | | | 101,403 | | | | | | Ms. Phillips | | | 1 x salary | | | | 21,400 | | | | 92,428 | |
1 | | The guideline shares were reset using $46.60 share$23.33, the closing price at close of marketour common stock on the NYSE on December 31, 2015. The guideline shares were not reset for Ms. Finn because she previously met her guideline.2018. |
2 | | Eligible shares include beneficially-owned shares held directly or indirectly, jointly-owned shares and jointly-owned shares.unvested RSUs. |
3 | | Mr. Anderson is expected to meet his ownership guidelines by 2020; he may not sell or dispose of shares for cash unless the share ownership guidelines are satisfied. |
Other Policies and Guidelines Perquisites We provide our NEOs with limited perquisites, reflected in the “All Other Compensation” column of the Summary Compensation Table and described in the footnotes. NEOs may claim financial planning and executive wellness expenses capped each year at $15,000 and $2,500, respectively. In very limited circumstances, we may permit NEOs and their family members to access our contractual arrangement for private aircraft for their personal use. We were reimbursedNone of the NEOs used the aircraft for the cost of suchpersonal use in 2015.2018. In certain circumstances, where necessary for business purposes, we also provide reimbursement for relocation expenses. Severance We believe that severance protections play a valuable role in attracting and retaining key executive officers. Between 2007 and 2010, we offered severance protections to executives pursuant to substantially identical severance agreements connected to awards granted under our 2006 Stock Acquisition and Option Plan for Key Employees, which required executives to make substantial personal investments in the Company. EachThe terms of our NEOs, except for Mr. Jackson, has entered into one of these individual severance agreements. These agreements only vary in the severance multiple provided depending on the position of the individual at the time the agreement was executed. Pursuant to the terms of his offer letter, Mr. Jackson is entitled to receive severance upon certain terminations of employment. The relevant severance triggering events and amounts payablepolicy are described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change-in-Control – Severance Benefits)Change in Control”.”
Change-in-ControlChange in Control
For equityEquity awards made in 2011 or later, under the 2010 Plan as amended, unvested options and RSUs do not vest automatically solely in the event of a change-in-control. These benefits arechange in control. The treatment of unvested equity awards upon a change in control is described in further detail under “– Tables and Narrative Disclosure – Potential Payments Upon Termination or Change-in-Control.Change in Control.”
Clawback Policy Our clawback policy requires the Chief Executive OfficerCEO and his executive direct reports, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the executive, and anynon-vested equity-based awards previously granted to the executive if: | | | | | The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; and | | | The executive engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error; and | | | The amount of the incentive compensation that would have been awarded to the executive, had the financial results been properly reported, would have been lower than the amount actually awarded. |
The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; The executive engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error; and The amount of the incentive compensation that would have been awarded to the executive, had the financial results been properly reported, would have been lower than the amount actually awarded. | | |
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Hedging Prohibition As part of our securities trading policy, all employees, including our NEOs, andnon-employee directors are prohibited from engaging in short-selling of our securities, trading activity designed to profit from fluctuations in the price of our securities or in hedging transactions involving our securities (including forward contracts, swaps, exchange funds, puts, calls, options). Other Benefits The CEO and each other NEONEOs are eligible to participate in the health and welfare, defined contribution 401(k), and deferred compensation plans made available, per eligibility requirements, to all employees. Tax Implications Section 162(m) of the Code (as interpreted by IRS Notice 2007-49) denies a federal income tax deduction for certain compensation in excess of $1 million per year paid to the chief executive officer and the three other most highly-paid executive officers (other than the company’s chief financial officer) of a publicly-traded corporation. Certain types of compensation, including compensation based on performance criteria that are approved in advance by stockholders, are excluded from the deduction limit. In addition, “grandfather” provisions may apply to certain compensation arrangements that were entered into by a corporation before it was publicly held. The Compensation Committee’s policy isCommittee takes into account the various tax and accounting implications of compensation. When determining amounts of equity grants to qualify compensation paid to our executive officers for deductibility for federal income tax purposes to the extent permitted. However, to retain highly skilled executives and remain competitive with other employers,employees, the Compensation Committee will havealso examines the right to authorizeaccounting cost associated with the grants.
Certain of the Company’s incentive compensation that would not otherwise be deductible under Section 162(m) and to pay bonuses in any amount, including discretionary bonuses or bonuses with performance goals that are different from those under our annual incentive plan. The annual incentive plan has been designed to permit the Compensation Committee to grant awards thereunder whichprograms are intended to qualify as “qualified performance-based compensation”allow the Company to make awards to executive officers that are deductible under Section 162(m) of the Internal Revenue Code as qualifyingperformance-based compensation, which provision otherwise sets limits on the tax deductibility of compensation paid to a company’s most highly compensated executive officers. Commencing with the Company’s 2018 fiscal year, the performance-based compensation exception to the deductibility limitations under Section 162(m) no longer applies (other than with respect to certain “grandfathered” performance-based awards granted prior to November 2, 2017), and the deduction limitation under Section 162(m) generally applies to compensation paid to any of our then current or former named executive officers. The Compensation Committee may continue to seek ways to limit the impact of Section 162(m) of the Internal Revenue Code. However, the Compensation Committee believes that the tax deduction limitation should not compromise the Company’s ability to establish and implement compensation and incentive programs that support the compensation objectives discussed above. Accordingly, achieving these objectives and maintaining required flexibility in this regard is expected to result in compensation that is not deductible for federal income tax purposes.
COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statementproxy statement and incorporated by reference into the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 20152018 (or any amendment thereto). Submitted by the Compensation Committee of the Company’s Board of Directors: April 28, 2016. Javier G. Teruel (Chairman)
Harish Manwani (Chairperson) Kathryn MarinelloGuerrino De Luca
Vivek RanadiveRobert C. Pozen
Lauren Zalaznick | | |
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TABLES AND NARRATIVE DISCLOSURE Summary Compensation Table The following table presents information regarding compensation to our NEOs for the periods indicated. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($) | | | Bonus1 ($) | | | Stock Awards2 ($) | | | Option Awards3 ($) | | | Non-Equity Incentive Plan Compensation4 ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings5 ($) | | | All Other Compensation6 ($) | | | Total ($) | | (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | | Mitch Barns Chief Executive Officer | | | 2015 | | | | 1,000,000 | | | | — | | | | 4,937,630 | | | | 1,500,002 | | | | 1,545,000 | | | | 3,316 | | | | 116,837 | | | | 9,102,785 | | | | 2014 | | | | 998,462 | | | | — | | | | 3,407,277 | | | | 1,054,680 | | | | 1,365,000 | | | | 7,897 | | | | 124,576 | | | | 6,957,892 | | | | 2013 | | | | 779,231 | | | | — | | | | 2,840,040 | | | | 359,550 | | | | 637,500 | | | | 4,553 | | | | 22,650 | | | | 4,643,524 | | Jamere Jackson Chief Financial Officer | | | 2015 | | | | 700,000 | | | | 325,000 | | | | 1,607,214 | | | | 496,644 | | | | 656,250 | | | | — | | | | 10,425 | | | | 3,795,533 | | | | 2014 | | | | 565,385 | | | | 1,300,000 | | | | 5,217,861 | | | | 486,200 | | | | 562,500 | | | | — | | | | 118,179 | | | | 8,250,125 | | Brian West Former Chief Operating Officer | | | 2015 | | | | 950,000 | | | | — | | | | 2,189,965 | | | | — | | | | 1,825,000 | | | | — | | | | 31,820 | | | | 4,996,785 | | | | 2014 | | | | 930,769 | | | | — | | | | 3,162,049 | | | | 916,300 | | | | 1,350,000 | | | | — | | | | 33,313 | | | | 6,392,431 | | | | 2013 | | | | 850,000 | | | | — | | | | 3,119,420 | | | | 420,750 | | | | 1,125,000 | | | | — | | | | 24,185 | | | | 5,539,355 | | Steve Hasker Global President and Chief Operating Officer (Global President through December 31, 2015) | | | 2015 | | | | 900,000 | | | | — | | | | 1,644,781 | | | | 509,714 | | | | 750,000 | | | | — | | | | 29,320 | | | | 3,833,815 | | | | 2014 | | | | 882,692 | | | | — | | | | 1,695,105 | | | | 486,200 | | | | 712,500 | | | | — | | | | 22,493 | | | | 3,798,990 | | | | 2013 | | | | 800,000 | | | | — | | | | 2,738,220 | | | | 336,600 | | | | 656,250 | | | | — | | | | 7,650 | | | | 4,538,720 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John Lewis7 Global President | | | 2015 | | | | 770,000 | | | | — | | | | 1,607,214 | | | | 496,644 | | | | 800,000 | | | | 141 | | | | 30,432 | | | | 3,704,431 | | | | 2014 | | | | 728,538 | | | | — | | | | 1,689,623 | | | | 523,600 | | | | 562,500 | | | | 12,843 | | | | 32,469 | | | | 3,549,573 | | Mary Liz Finn Chief Human Resources Officer | | | 2015 | | | | 550,000 | | | | — | | | | 1,002,698 | | | | 313,670 | | | | 322,500 | | | | — | | | | 27,197 | | | | 2,216,066 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($) | | | Bonus1 ($) | | | Stock Awards2 ($) | | | Option Awards3 ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings4 ($) | | | All Other Compensation5 ($) | | | Total ($) | | (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | | David Kenny Chief Executive Officer | | | 2018 | | | | 75,000 | | | | 1,500,000 | | | | 15,142,776 | | | | 3,086,901 | | | | — | | | | — | | | | — | | | | 19,804,677 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mitch Barns Chief Executive Officer | | | 2018 | | | | 1,000,000 | | | | — | | | | 4,124,341 | | | | — | | | | — | | | | (5,923 | ) | | | 5,666,950 | | | | 10,785,368 | | | | 2017 | | | | 1,000,000 | | | | — | | | | 7,467,431 | | | | — | | | | 1,700,000 | | | | 11,553 | | | | 23,210 | | | | 10,202,194 | | | | 2016 | | | | 1,000,000 | | | | — | | | | 5,737,698 | | | | 1,657,089 | | | | 1,700,000 | | | | 3,186 | | | | 24,516 | | | | 10,122,489 | | David Anderson Chief Financial Officer and Chief Operating Officer | | | 2018 | | | | 240,000 | | | | 400,000 | | | | 1,125,007 | | | | 1,125,002 | | | | — | | | | — | | | | 6,462 | | | | 2,896,470 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jamere Jackson Chief Financial Officer | | | 2018 | | | | 533,654 | | | | 325,000 | | | | 1,314,639 | | | | — | | | | — | | | | — | | | | 8,250 | | | | 2,181,543 | | | | 2017 | | | | 750,000 | | | | 325,000 | | | | 2,538,946 | | | | — | | | | 680,000 | | | | — | | | | 8,100 | | | | 4,302,046 | | | | 2016 | | | | 741,154 | | | | 325,000 | | | | 2,124,905 | | | | 607,602 | | | | 680,000 | | | | — | | | | 7,950 | | | | 4,486,610 | | Giovanni Tavolieri Chief Product and Technology Officer for Nielsen Global Connect | | | 2018 | | | | 582,500 | | | | — | | | | 2,490,207 | | | | 1,300,002 | | | | — | | | | — | | | | 2,769 | | | | 4,375,478 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Eric J. Dale Chief Legal Officer | | | 2018 | | | | 750,000 | | | | — | | | | 2,298,630 | | | | 1,200,000 | | | | — | | | | — | | | | 23,250 | | | | 4,271,880 | | | | 2017 | | | | 750,000 | | | | — | | | | 1,194,774 | | | | — | | | | 675,000 | | | | — | | | | 23,100 | | | | 2,642,874 | | | | 2016 | | | | 750,000 | | | | — | | | | 1,069,441 | | | | 331,416 | | | | 675,000 | | | | — | | | | 22,950 | | | | 2,848,807 | | Nancy Phillips Chief HR Officer | | | 2018 | | | | 500,000 | | | | — | | | | 2,490,207 | | | | 1,300,002 | | | | — | | | | — | | | | 27,885 | | | | 4,318,093 | | | | 2017 | | | | 480,769 | | | | — | | | | 1,294,370 | | | | — | | | | 450,000 | | | | — | | | | 285,091 | | | | 2,510,230 | |
For Mr. Jackson, the $1,300,000 amount shown in 2014 is the initial portion (paid in connection with his hire date of March 10, 2014) of the $2,600,000 payment meant to compensate him for the loss of his unvested SERP benefit from his previous employer, and the $325,000 amount shown in 2015 is the first of four equal annual installments of the remaining $1,300,000 payment. Mr. Jackson is required to repay each payment in full if his employment terminates within one year following its receipt unless such termination is not for “cause” or is for “good reason.”
| | For Mr. Kenny, the $1,500,000 amount shown was paid in December 2018 to compensate for the loss of the 2018 annual incentive payout from his former employer. If Mr. Kenny resigns voluntarily without Good Reason or is terminated for Cause withinone-year of receiving the payment, Mr. Kenny must repay the amount in full. See “New CEO and CFO Compensation Arrangements” above. |
| | For Mr. Anderson, the $400,000 amount shown in 2018 is a guaranteed bonus that was paid on March 8, 2019. |
| | For Mr. Jackson, the $325,000 amount shown in years 2016, 2017 and 2018 is the amount of the annual installments he received of a $1,300,000 payment (over 4 years) which is paid in connection with his hire date of March 10, 2014 and meant to compensate him for the loss of his unvested SERP benefit from his previous employer. Mr. Jackson is required to repay each payment in full if his employment terminates within one year following its receipt unless such termination is by the Company without “cause” or is by Mr. Jackson for “good reason.” The 2018 payment was repaid upon Mr. Jackson’s voluntary termination without good reason in September 2018. |
Represents the aggregate grant date fair value of RSUs, annual incentive RSUs and performance RSUs awarded to each NEOs calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (the “FASB ASC Topic 718”). For a discussion of the assumptions and methodologies used to value the awards reported in column (e), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2015 previously filed with the SEC. All numbers exclude estimates of forfeitures. No awards were subject to re-pricing or material modifications.
Values for awards made in 2015:
Performance Restricted Stock Units– Target amounts granted on February 19, 2015 under the LTPP – Messrs. Barns ($2,982,609), Jackson ($944,689), West ($1,739,931), Hasker ($919,781), Lewis ($944,689), and Ms. Finn ($596,431). The maximum awards at the date of grant are as follows: Messrs. Barns ($4,667,571), Jackson ($1,478,371), West ($2,722,868), Hasker ($1,439,392), Lewis ($1,478,371), and Ms. Finn ($933,372).
Restricted Stock Units – RSUs were granted to the NEOs as follows: On October 29, 2015 to Mr. Barns ($1,500,020) on October 28, 2015 to Messrs. Jackson ($475,000), Hasker ($487,500), Lewis ($475,000), and Ms. Finn ($300,000).
Annual Incentive RSUs– Values represent 25% of the 2014 plan year annual incentive awards granted on February 12, 2015:Messrs. Barns ($455,002), Jackson ($187,525), West ($450,035), Hasker ($237,500), Lewis ($187,525), and Ms. Finn ($106,267).
| | Represents the aggregate grant date fair value of the equity-based awards granted to each NEO calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (the “FASB ASC Topic 718”). For a discussion of the assumptions and methodologies used to value the awards reported in column (e), please see Note 12 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form10-K for the year ended December 31, 2018. All numbers exclude estimates of forfeitures. No awards were subject tore-pricing or material modifications. Further, in accordance with the SEC’s rules, dividend equivalents that accrued on the executives’ RSUs and PRSUs granted in 2018 are not reported above because dividends were factored into the grant date fair value of these awards. |
3 | | Option AwardsValues for awards made in 2018: |
Represents the aggregate grant date fair value of stock options awarded to each NEO calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in column (f), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 19, 2016. All numbers exclude estimates of forfeitures. No awards were subject to repricing or material modifications and no awards were subject to performance conditions.
| | PRSUs – Target amounts granted on February 21, 2018 under the LTPP, based on the probable outcome of the relevant performance conditions — Messrs. Barns — $4,124,341, Jackson — $1,314,639, Tavolieri — $670,201, Dale — $618,647 and Ms. Phillips — $670,201. The maximum awards at the date of grant are as follows: Messrs. Barns — $7,302,559, Jackson — $2,327,700, Tavolieri — $1,186,658, Dale — $1,095,377 and Ms. Phillips — $1,186,658. Upon termination, Mr. Barns forfeitedone-third of the potential value of the 2018 PRSU award. |
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| | Regular Annual RSUs – Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $519,995 and Dale — $479,995 and Ms. Phillips — $519,995. |
| | Retention RSUs – Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $1,300,012 and Dale — $1,199,988 and Ms. Phillips — $1,300,012. Mr. Dale forfeited this award upon his voluntary termination from the Company. |
| | Make-whole RSUs –RSUs were granted to Mr. Kenny on December 3, 2018 — $13,742,766. |
| | New hire inducement RSUs –RSUs were granted to Mr. Anderson on October 26, 2018 — $ 1,125,007 and to Mr. Kenny on December 3, 2018 — $1,400,010. |
| | Of the PRSUs granted in 2018 that vest according to free cash flow, the grant date fair value was computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs that vest according to free cash flow would have been: Mr. Barns — $4,237,625; Mr. Jackson — $1,350,748; Mr. Tavolieri — $688,609; Mr. Dale — $635,639; and Ms. Phillips — $688,609. Of the PRSUs granted in 2018 that vest according to CAGR, the grant date fair value was computed in accordance with FASB ASC Topic 718 based upon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs that vest according to CAGR would have been: Mr. Barns — $2,118,812; Mr. Jackson — $675,374; Mr. Tavolieri — $344,305; Mr. Dale — $317,820; and Ms. Phillips — $344,305. As the PRSUs granted in 2018 that vest according to relative shareholder return are subject to market conditions as defined under FASB ASC Topic 718 and were not subject to performance conditions as defined under FASB ASC Topic 718, they had no maximum grant date fair values that differed from the grant date fair values presented in the table. |
| | Represents the aggregate grant date fair value of stock options awarded to each NEO calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in column (f), please see Note 13 “Stock-Based Compensation” to our audited consolidated financial statements, included in our Annual Report on Form10-K for the year ended December 31, 2018. All numbers exclude estimates of forfeitures. No awards were subject to repricing or material modifications. |
| | Retention Performance Stock Options: Amounts were awarded to the NEOs on October 26, 2018 as follows: Messrs. Tavolieri — $1,300,002 and Dale — $1,200,000 and Ms. Phillips — $1,300,002. Mr. Dale forfeited this award upon his voluntary termination from the Company. |
| | New Hire Performance Stock Options: PSOs were granted to Mr. Anderson on October 26, 2018 — $ 1,125,002 and to Mr. Kenny on December 3, 2018 — $1,466,901. |
| | Premium Performance Stock Options: Awards were granted on December 3, 2018 to Mr. Kenny — $1,620,000. |
4 | | Non-Equity Incentive Plan Compensation |
Represents 75% of the annual incentive value for the 2015 plan year paid in February of 2016; the remaining 25% of the annual incentive was delivered in RSUs granted in February 2016 (and is not included in the 2015 amounts above but will be disclosed in the Summary Compensation Table next year as 2016 compensation). Due to the departure of Messrs. West and Lewis, their 2015 annual incentive was paid 100% in cash in February 2016, which amount is reflected in the table above.
5 | | Change in Pension Value and Nonqualified Deferred Compensation Earnings |
The amounts indicated for Messrs. Barns and Lewis represent the actuarial change in pension value during 2015, relating to the Nielsen qualified plan and non-qualified excess plan. See “– Pension Benefits for 2015.”
| | The amount indicated for Mr. Barns represents the actuarial change in pension value during 2018 relating to the Nielsen qualified plan andnon-qualified excess plan. See “– Pension Benefits for 2018.” |
65 | | All Other Compensation (2015(2018 values) |
Mr. Barns: financial planning expenses: $15,000; retirement plan contributions: $7,950; company paid relocation expenses: $87,518; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $6,370
Mr. Jackson: retirement plan contributions: $7,950; and company paid relocation expenses: $2,475
Mr. West: financial planning expenses: $15,000; retirement plan contributions: $7,950; executive wellness expenses: $2,500; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $6,370
Mr. Hasker: financial planning expenses: $15,000; retirement plan contributions: $7,950; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $6,370
Mr. Lewis: financial planning expenses: $15,000; retirement plan contributions: $7,745; executive wellness expenses: $1,317; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $6,370
Ms. Finn: financial planning expenses: $15,000; retirement plan contributions: $7,950; and value of dividend equivalents accrued on unvested RSUs arising from the equity award granted on July 26, 2012 prior to the introduction of our dividend policy in 2013: $4,247
7 | | Mr. Lewis ceased to be anBarns: financial planning expenses: $15,000; executive officer on December 30, 2015.wellness expenses: $2,500; retirement plan contributions: $8,250; Health Savings Account Plan contributions: $1,200; and severance accruals: $5,640,000. |
| | Mr. Anderson: retirement plan contributions: $6,462. |
| | Mr. Jackson: retirement plan contributions: $8,250. |
| | Mr. Tavolieri: retirement plan contributions: $2,769. |
| | Mr. Dale: financial planning expenses: $15,000 and retirement plan contributions: $8,250. |
| | Ms. Phillips: financial planning expenses: $15,000; relocation expenses: $4,635; and retirement plan contributions: $8,250. |
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Grants of Plan-Based Awards in 20152018 The following table presents information regarding grants to our NEOs during the fiscal year ended December 31, 2015.2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | | | | | Name | | Grant Date | | | Threshold ($) | | | Target1 ($) | | | Maximum ($) | | | | | Threshold (#) | | | Target2 (#) | | | Maximum (#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/Sh) | | | Grant Date Fair Value of Stock and Option Awards3 ($) | | (a) | | (b) | | | (c) | | | (d) | | | (e) | | | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | | | (k) | | | (l) | | Mitch Barns | | | | | | | 1,400,000 | | | | 2,000,000 | | | | 4,000,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 10,443 | | | | — | | | | — | | | | 455,002 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 32,930 | | | | 65,860 | | | | 131,720 | | | | — | | | | — | | | | — | | | | 2,982,609 | | | | | 10/29/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 31,283 | | | | 177,515 | | | | 47.95 | | | | 3,000,022 | | Jamere Jackson | | | | | | | 560,000 | | | | 800,000 | | | | 1,600,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 4,304 | | | | — | | | | — | | | | 187,525 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 10,430 | | | | 20,860 | | | | 41,720 | | | | — | | | | — | | | | — | | | | 944,689 | | | | | 10/28/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 9,824 | | | | 58,498 | | | | 48.35 | | | | 971,644 | | Brian West | | | | | | | 1,225,000 | | | | 1,750,000 | | | | 3,500,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 10,329 | | | | — | | | | — | | | | 450,035 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 19,210 | | | | 38,420 | | | | 76,840 | | | | — | | | | — | | | | — | | | | 1,739,931 | | Steve Hasker | | | | | | | 665,000 | | | | 950,000 | | | | 1,900,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 5,451 | | | | — | | | | — | | | | 237,500 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 10,155 | | | | 20,310 | | | | 40,620 | | | | — | | | | — | | | | — | | | | 919,781 | | | | | 10/28/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 10,083 | | | | 60,037 | | | | 48.35 | | | | 997,214 | | John Lewis | | | | | | | 560,000 | | | | 800,000 | | | | 1,600,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 4,304 | | | | — | | | | — | | | | 187,525 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 10,430 | | | | 20,860 | | | | 41,720 | | | | — | | | | — | | | | — | | | | 944,689 | | | | | 10/28/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 9,824 | | | | 58,498 | | | | 48.35 | | | | 971,644 | | Mary Liz Finn | | | | | | | 297,500 | | | | 425,000 | | | | 850,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 2,439 | | | | — | | | | — | | | | 106,267 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | | | 6,585 | | | | 13,170 | | | | 26,340 | | | | — | | | | — | | | | — | | | | 596,431 | | | | | 10/28/2015 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | 6,205 | | | | 36,946 | | | | 48.35 | | | | 613,670 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | | | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | | | | | Name (a) | | Grant Date (b) | | | Threshold ($) (c) | | | Target ($) (d) | | | Maximum ($) (e) | | | | | | Threshold3 (#) (c) | | | Target4 (#) (d) | | | Maximum5 (#) (e) | | | All Other Stock Awards: Number of Shares of Stocks or Units (#) (i) | | | All Other Options Awards: Number of Securities Underlying Options (#) (j) | | | Exercise or Base Price of Option Awards ($/Sh) (k) | | | Grant Date Fair Value of Stock and Option Awards6 ($) (l) | | | | | | | | | | | | | | | David Kenny | | | | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 487,505 | 7 | | | — | | | $ | — | | | | 13,742,766 | | | | | | | | | | | | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 54,285 | 7 | | | — | | | $ | — | | | | 1,400,010 | | | | | | | | | | | | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | 367,031 | 7 | | | — | | | | — | | | | — | | | $ | 32.24 | | | | 1,466,901 | | | | | | | | | | | | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | 750,000 | 7 | | $ | 40.00 | | | | 1,620,000 | | | | | | | | | | | | | | | Mitch Barns | | | | | | | 1,400,000 | | | | 2,000,000 | | | | 4,000,000 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | | | | | 73,801 | | | | 147,601 | | | | 295,202 | | | | — | | | | — | | | $ | — | | | | 4,124,341 | | | | | | | | | | | | | | | David Anderson | | | | | | | 280,000 | | | | 400,000 | | | | 800,000 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 45,732 | 7 | | | — | | | $ | — | | | | 1,125,007 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | 321,429 | 7 | | | — | | | | — | | | | — | | | $ | 30.75 | | | | 1,125,002 | | | | | | | | | | | | | | | Jamere Jackson | | | | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | | | | | 23,524 | 2 | | | 47,048 | 2 | | | 94,096 | 2 | | | — | | | | — | | | $ | — | | | | 1,314,639 | | | | | | | | | | | | | | | Giovanni Tavolieri | | | | | | | 420,000 | | | | 600,000 | | | | 1,200,000 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | | | | | 11,993 | | | | 23,985 | | | | 47,970 | | | | — | | | | — | | | $ | — | | | | 670,201 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 21,138 | | | | — | | | $ | — | | | | 519,995 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 52,846 | 7 | | | — | | | $ | — | | | | 1,300,012 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | 371,429 | 7 | | | — | | | | — | | | | — | | | $ | 30.75 | | | | 1,300,002 | | | | | | | | | | | | | | | Eric J. Dale | | | | | | | 525,000 | | | | 750,000 | | | | 1,500,000 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | | | | | 11,070 | 2 | | | 22,140 | 2 | | | 44,280 | 2 | | | — | | | | — | | | $ | — | | | | 618,647 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 19,512 | 2 | | | — | | | $ | — | | | | 479,995 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 48,780 | 2,7 | | | — | | | $ | — | | | | 1,199,988 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | 342,857 | 2,7 | | | — | | | | — | | | | — | | | $ | 30.75 | | | | 1,200,000 | | | | | | | | | | | | | | | Nancy Phillips | | | | | | | 350,000 | | | | 500,000 | | | | 1,000,000 | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | — | | | | — | | | | | | | | | | | | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | | | | | 11,993 | | | | 23,985 | | | | 47,970 | | | | — | | | | — | | | $ | — | | | | 670,201 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 21,138 | | | | — | | | $ | — | | | | 519,995 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | — | | | | — | | | | 52,846 | 7 | | | — | | | $ | — | | | | 1,300,012 | | | | | | | | | | | | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | | | | | — | | | | 371,429 | 7 | | | — | | | | — | | | | — | | | $ | 30.75 | | | | 1,300,002 | |
1 | | RepresentsReflects the cash incentive opportunities under the AIP for 2018, assuming a 70% (threshold), 100% (target) and 200% (maximum) achievement level, as described under “— Compensation Discussion and Analysis — How Pay Decisions Are Made — Annual Incentive Plan.” Cash incentive amounts actually earned by the NEOs in 2018 are reflected in the“Non-Equity Incentive Plan Compensation” column of the 2015 target award under the annual incentive plan.Summary Compensation Table. |
2 | | This equity was forfeited in connection with the departures from the Company by Mr. Jackson and Mr. Dale. |
3 | | Represents 50% of the number of performance restricted stock unitsPRSUs awarded under the LTPP. |
34 | | Represents the number of PRSUs awarded under the LTPP for February awards. All other awards are the PSOs which are subject to achieving stock performance target of 25% increase for 21 consecutive days. |
5 | | Represents 200% of the number of PRSUs awarded under the LTPP. |
6 | | Represents the grant date fair values computed in accordance with FASB ASC Topic 718 of the following awards:RSUs and PRSUs. See footnote 2 to the Summary Compensation Table for additional information. |
| •7 | | RepresentsRSUs granted to Messrs. Barns, Jackson, West, Hasker, Lewis, and Ms. Finn on February 12, 2015 with a value of 25% of their 2014 annual incentive plan cash payoutone-time |
| • | | The target number of performance RSUs granted under the LTPP to Messrs. Barns, Jackson, West, Hasker, Lewis, and Ms. Finn on February 19, 2015
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| • | | Stock option awards granted to all NEOS on October 28, 2015 and to Mr. Barns on October 29, 2015
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| • | | RSUs granted to all NEOS on October 28, 2015 and to Mr. Barns on October 29, 2015 award. |
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Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2015 Table
Summary Compensation Table
Mr. Barns’ base salary was unchanged at $1,000,000. His annual incentive target for 2015 was set at $2,000,000. Based on the Compensation Committee’s full year performance assessment, Mr. Barns was awarded an annual incentive payment of $2,060,000.
Mr. Jackson’s base salary was unchanged at $700,000. His annual incentive target for 2015 was set at $800,000. Based on the Compensation Committee’s full year performance assessment, Mr. Jackson was awarded an annual incentive payment of $875,000. Additionally, Mr. Jackson received the second of five installments of the payment authorized by the Compensation Committee upon hire to compensate him for the loss of unvested SERP at his prior employer. Mr. Jackson is required to reimburse each installment in full if his employment terminated within one year of receipt of each installment unless such termination is not for “cause” or is for “good reason.”
Mr. West’s base salary was unchanged at $950,000. His annual incentive target for 2015 was set at $1,750,000. Based on the Compensation Committee’s full year performance assessment, Mr. West was awarded an annual incentive payment of $1,825,000.
In recognition of his delivery of a seamless transition to the new technology and operations structure, the Compensation Committee approved provisions in accordance with our 2010 Plan policy whereby Mr. West forfeited all of his outstanding unvested equity except that:
RSUs awarded in 2014 and 2015 in respect of the annual incentive plan performance in 2013 and 2014, respectively, will continue to vest according to the normal two-year ratable schedule;
2014 and 2015 LTPP awards will be earned following approvals at the end of the performance periods and paid pro-rata to service from the beginning of the performance period through December 31, 2015; and
stock option and RSU tranches, due to vest in 2016, will vest on a pro-rata basis based on service from the most recent vesting date through December, 31, 2015.
Mr. Hasker’s base salary was unchanged at $900,000. His annual incentive target for 2015 was set at $950,000. Based on the Compensation Committee’s full year performance assessment, Mr. Hasker was awarded an annual incentive payment of $1,000,000.
Mr. Lewis’ base salary was unchanged at $770,000. His annual incentive target for 2015 was set at $800,000. Based on the Compensation Committee’s full year performance assessment, Mr. Lewis was awarded an annual incentive payment of $800,000.
Ms. Finn’s base salary was unchanged at $550,000. Her annual incentive target for 2015 was set at $425,000. Based on the Compensation Committee’s full year performance assessment, Ms. Finn was awarded an annual incentive payment of $430,000.
For each NEO, approximately 50% of long-term incentive value is delivered in performance RSUs and 50% is split equally between time-based stock options and RSUs. In addition, 75% of the annual incentive award is paid in cash and disclosed in the Summary Compensation Table as compensation in the performance year, while the remaining 25% is paid in RSUs that will vest in equal annual installments over two years and whose value is disclosed in the Summary Compensation Table as compensation in the year of grant. Due to the departure of Messrs. West and Lewis, their 2015 annual incentive was paid 100% in cash in February 2016, as opposed to 75% in cash and 25% in RSUs.
Grants of Plan Based Awards in 2015
Each year, the Compensation Committee reviews target LTI opportunities considering general industry market benchmarks and peer group data provided by Meridian, executives’ total direct compensation mix and prior year award values, individual role and responsibilities, company financial performance and an assessment of each NEO’s individual performance.
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On February 12, 2015, each NEO was granted RSUs having a value equal to 25% of their 2014 annual incentive cash payout. The awards vest in two equal installments commencing on the anniversary of the grant date.
Each NEO was awarded performance RSUs under the LTPP on February 19, 2015.
The performance RSUs will be earned at the end of the 3-year period (January 1, 2015 –December 31, 2017) based on the Company’s performance against the plan metrics (as described under “– Long-Term Incentives (LTI) – Long-Term Performance Plan (LTPP)”).
On October 28, 2015 (October 29 in the case of Mr. Barns), each NEO, with the exception of Mr. West, was granted awards of RSUs and stock options. Both RSUs and stock options time-vest ratably over four years on each anniversary of the grant date.
Outstanding Equity Awards at 20152018 FiscalYear-End The following table presents information regarding the outstanding equity awards held by each of our NEOs as of December 31, 2015.2018. Mr. Jackson did not have any outstanding equity awards as of December 31, 2018. | | | | | | Option Awards | | | | Stock Awards | | | | | | Option Awards5 | | | | | | Stock Awards | | Name | | | | | Number of Securities Underlying Unexercised Options Exercisable1 (#) | | | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options1 (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested2 (#) | | | Market Value of Shares or Units of Stock That Have Not Vested2 ($) | | | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable1 | | Number of Securities Underlying Unexercised Options Unexercisable1 | | Option Exercise Price | | Option Expiration Date | | | | Number of Shares or Units of Stock That Have Not Vested2 | | Market Value of Shares or Units of Stock That Have Not Vested4 | | | | Equity Incentive Plan awards: Number of unearned shares, units or other rights that have not vested3 | | Equity Incentive Plan awards: market or payout value of unearned shares, units or other rights that have not vested4 | | | | (a) | | Grant Date | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | | | (#) | | (#) | | ($) | | | | | | (#) | | ($) | | | | (#) | | ($) | | | | | David Kenny | | | 12/3/2018 | | | | — | | | 750,000 | | | 40.00 | | | 12/3/2025 | | | | — | | | | — | | | | — | | | | — | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | 0 | | | 54,285 | | | 1,266,469 | | | | — | | | | — | | | | | | | 12/3/2018 | | | | — | | | | — | | | | — | | | 0 | | | 487,505 | | | 11,373,492 | | | | — | | | | — | | | | | | | 12/3/2018 | | | | — | | | 367,031 | | | 28.19 | | | 12/3/2025 | | | | — | | | | — | | | | — | | | | — | | | | Mitch Barns | | | 3/5/2007 | | | | — | | | | — | | | | 6,235 | | | | 16.00 | | | | 3/5/2017 | | | | | — | | | | — | | | 7/26/2012 | | | 80,000 | | | | — | | | 27.98 | | | 7/26/2019 | | | | — | | | | — | | | | — | | | | — | | | | | | 3/5/2007 | | | | — | | | | — | | | | 1,039 | | | | 32.00 | | | | 3/5/2017 | | | | | — | | | | — | | | | | | 3/18/2010 | | | | 62,500 | | | | — | | | | — | | | | 18.40 | | | | 3/18/2020 | | | | | — | | | | — | | | 9/25/2013 | | | 47,000 | | | | — | | | 36.56 | | | 9/25/2020 | | | | — | | | | — | | | | — | | | | — | | | | | | 5/11/2011 | | | | 75,000 | | | | — | | | | — | | | | 30.19 | | | | 5/11/2018 | | | | | — | | | | — | | | | | | 7/26/2012 | | | | 60,000 | | | | 20,000 | | | | — | | | | 27.98 | | | | 7/26/2019 | | | | | 3,999 | | | | 186,353 | | | 10/29/2014 | | | 141,000 | | | | — | | | 41.92 | | | 10/29/2021 | | | | — | | | | — | | | | — | | | | — | | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 25,000 | | | | 1,165,000 | | | | | | 7/25/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 31,697 | | | | 1,477,080 | | | 10/29/2015 | | | 133,136 | | | 44,379 | | | 47.95 | | | 10/29/2022 | | | 8,746 | | | 240,037 | | | | — | | | | — | | | | | | 9/25/2013 | | | | 23,500 | | | | 23,500 | | | | — | | | | 36.56 | | | | 9/25/2020 | | | | | 4,728 | | | | 220,325 | | | | | | 2/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 2,463 | | | | 114,776 | | | 10/20/2016 | | | 95,785 | | | 95,786 | | | 54.05 | | | 10/20/2023 | | | 15,162 | | | 353,737 | | | | — | | | | — | | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 43,500 | | | | 2,027,100 | | | | | | 10/29/2014 | | | | 35,250 | | | | 105,750 | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | 18,385 | | | | 856,741 | | | 2/16/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 10,697 | | | | 498,480 | | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 65,860 | | | | 3,069,076 | | | 11/13/2017 | | | | — | | | | — | | | | — | | | | — | | | 82,297 | | | 1,919,984 | | | | — | | | | — | | | | | | 10/29/2015 | | | | — | | | | 177,515 | | | | — | | | | 47.95 | | | | 10/29/2022 | | | | | 31,475 | | | | 1,466,735 | | | Jamere Jackson | | | 3/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 63,310 | | | | 2,950,246 | | | | | | 3/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 20,000 | | | | 932,000 | | | 2/21/2018 | | | | — | | | | — | | | | — | | | 0 | | | | — | | | | — | | | 98,401 | | | 2,295,695 | | | | | | 10/29/2014 | | | | 16,250 | | | | 48,750 | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | 8,498 | | | | 396,007 | | | David Anderson | | | 10/26/2018 | | | | — | | | 321,429 | | | 24.60 | | | 10/26/2025 | | | 46,323 | | | 1,080,717 | | | | — | | | | — | | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 4,409 | | | | 205,459 | | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 20,860 | | | | 972,076 | | | | | | 10/28/2015 | | | | — | | | | 58,498 | | | | — | | | | 48.35 | | | | 10/28/2022 | | | | | 9,884 | | | | 460,594 | | | Brian West | | | 3/18/2010 | | | | 57,587 | | | | — | | | | — | | | | 18.40 | | | | 3/18/2020 | | | | | — | | | | — | | | Giovanni Tavolieri | | | 9/25/2013 | | | 5,000 | | | | — | | | 36.56 | | | 9/25/2020 | | | | — | | | | — | | | | — | | | | — | | | | | | 5/11/2011 | | | | 62,500 | | | | — | | | | — | | | | 30.19 | | | | 5/11/2018 | | | | | — | | | | — | | | | | | 7/26/2012 | | | | 91,233 | | | | — | | | | — | | | | 27.98 | | | | 7/26/2019 | | | | | — | | | | — | | | 10/29/2014 | | | 9,000 | | | | — | | | 41.92 | | | 10/29/2021 | | | | — | | | | — | | | | — | | | | — | | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 30,000 | | | | 1,398,000 | | | | | | 9/25/2013 | | | | 31,154 | | | | — | | | | — | | | | 36.56 | | | | 9/25/2020 | | | | | — | | | | — | | | 10/28/2015 | | | 11,545 | | | 3,849 | | | 48.35 | | | 10/28/2022 | | | 724 | | | 16,894 | | | | — | | | | — | | | | | | 2/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 4,345 | | | | 202,477 | | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 25,299 | | | | 1,178,933 | | | 10/20/2016 | | | 9,578 | | | 9,579 | | | 54.05 | | | 10/20/2023 | | | 1,517 | | | 35,387 | | | | — | | | | — | | | | | | 10/29/2014 | | | | 35,911 | | | | — | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | — | | | | — | | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 10,580 | | | | 493,028 | | | 2/16/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | 12,772 | | | | 595,175 | | | | | | 11/13/2017 | | | | — | | | | — | | | | — | | | | — | | | 18,654 | | | 435,202 | | | | — | | | | — | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,985 | | | 559,570 | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | — | | | 21,411 | | | 499,523 | | | | — | | | | — | | | | | | | 10/26/2018 | | | | — | | | 371,429 | | | 24.60 | | | 10/26/2025 | | | 53,529 | | | 1,248,832 | | | | — | | | | — | | | | Eric J. Dale | | | 10/28/2015 | | | 27,709 | | | 9,237 | | | 48.35 | | | 10/28/2022 | | | 1,736 | | | 40,508 | | | | — | | | | — | | | | | | | 10/20/2016 | | | 19,157 | | | 19,157 | | | 54.05 | | | 10/20/2023 | | | 3,032 | | | 70,748 | | | | — | | | | — | | | | | | | 2/16/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | | | | 11/13/2017 | | | | — | | | | — | | | | — | | | | — | | | 13,167 | | | 307,189 | | | | — | | | | — | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 22,140 | | | 516,526 | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | — | | | 19,764 | | | 461,099 | | | | — | | | | — | | | | | | | 10/26/2018 | | | | — | | | 342,857 | | | 24.60 | | | 10/26/2025 | | | 49,410 | | | 1,152,746 | | | | — | | | | — | | | | Nancy Phillips | | | 2/16/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | | | | 11/13/2017 | | | | — | | | | — | | | | — | | | | — | | | 14,266 | | | 332,830 | | | | — | | | | — | | | | | | | 2/21/2018 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,985 | | | 559,570 | | | | | | | 10/26/2018 | | | | — | | | | — | | | | — | | | | — | | | 21,411 | | | 499,523 | | | | — | | | | — | | | | | | | 10/26/2018 | | | | — | | | 371,429 | | | 24.60 | | | 10/26/2025 | | | 53,529 | | | 1,248,832 | | | | — | | | | — | | |
1 | | The option awards prior to 2017 vest ratably on each of the four anniversaries of the grant date. The PSOs that were granted in 2018 vest ratably on each of the three anniversaries of the grant date and are only exercisable if the stock price growth target is achieved for 21 or more consecutive days within the three-year period. |
| | |
| | 20162019 PROXY STATEMENT 56 59
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | | | Stock Awards | | Name | | | | | Number of Securities Underlying Unexercised Options Exercisable1 (#) | | | Number of Securities Underlying Unexercised Options Unexercisable1 (#) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options1 (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | | | Number of Shares or Units of Stock That Have Not Vested2 (#) | | | Market Value of Shares or Units of Stock That Have Not Vested2 ($) | | (a) | | Grant Date | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | | | (g) | | | (h) | | Steve Hasker | | | 12/21/2009 | | | | 23,437 | | | | — | | | | — | | | | 16.00 | | | | 12/21/2019 | | | | | | — | | | | — | | | | | 12/21/2009 | | | | 19,531 | | | | — | | | | — | | | | 32.00 | | | | 12/21/2019 | | | | | | — | | | | — | | | | | 5/11/2011 | | | | 18,750 | | | | — | | | | — | | | | 30.19 | | | | 5/11/2018 | | | | | | — | | | | — | | | | | 7/26/2012 | | | | 20,000 | | | | 20,000 | | | | — | | | | 27.98 | | | | 7/26/2019 | | | | | | 3,999 | | | | 186,353 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 22,000 | | | | 1,025,200 | | | | | 7/25/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 31,697 | | | | 1,477,080 | | | | | 9/25/2013 | | | | 22,000 | | | | 22,000 | | | | — | | | | 36.56 | | | | 9/25/2020 | | | | | | 4,728 | | | | 220,325 | | | | | 2/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 2,535 | | | | 118,131 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 20,100 | | | | 936,660 | | | | | 10/29/2014 | | | | 16,250 | | | | 48,750 | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | | 8,498 | | | | 396,007 | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 5,584 | | | | 260,214 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 20,310 | | | | 946,446 | | | | | 10/28/2015 | | | | — | | | | 60,037 | | | | — | | | | 48.35 | | | | 10/28/2022 | | | | | | 10,145 | | | | 472,757 | | John Lewis | | | 2/2/2007 | | | | — | | | | — | | | | 17,813 | | | | 16.00 | | | | 2/2/2017 | | | | | | — | | | | — | | | | | 2/2/2007 | | | | — | | | | — | | | | 2,968 | | | | 32.00 | | | | 2/2/2017 | | | | | | — | | | | — | | | | | 5/11/2011 | | | | 75,000 | | | | — | | | | — | | | | 30.19 | | | | 5/11/2018 | | | | | | — | | | | — | | | | | 7/26/2012 | | | | 60,000 | | | | 20,000 | | | | — | | | | 27.98 | | | | 7/26/2019 | | | | | | 3,999 | | | | 186,353 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 22,000 | | | | 1,025,200 | | | | | 7/25/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 31,697 | | | | 1,477,080 | | | | | 9/25/2013 | | | | — | | | | 22,000 | | | | — | | | | 36.56 | | | | 9/25/2020 | | | | | | 4,728 | | | | 220,325 | | | | | 2/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 2,376 | | | | 110,722 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 19,600 | | | | 913,360 | | | | | 10/29/2014 | | | | — | | | | 52,500 | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | | 9,116 | | | | 424,806 | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 4,409 | | | | 205,459 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 20,860 | | | | 972,076 | | | | | 10/28/2015 | | | | — | | | | 58,498 | | | | — | | | | 48.35 | | | | 10/28/2022 | | | | | | 9,884 | | | | 460,594 | | Mary Liz Finn | | | 11/15/2007 | | | | 3,562 | | | | — | | | | 3,563 | | | | 16.00 | | | | 3/21/2017 | | | | | | — | | | | — | | | | | 11/15/2007 | | | | 5,657 | | | | — | | | | 593 | | | | 32.00 | | | | 3/21/2017 | | | | | | — | | | | — | | | | | 5/11/2011 | | | | 75,000 | | | | — | | | | — | | | | 30.19 | | | | 5/11/2018 | | | | | | — | | | | — | | | | | 7/26/2012 | | | | 71,250 | | | | 23,750 | | | | — | | | | 27.98 | | | | 7/26/2019 | | | | | | 2,666 | | | | 124,236 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 16,000 | | | | 745,600 | | | | | 9/25/2013 | | | | 20,000 | | | | 20,000 | | | | — | | | | 36.56 | | | | 9/25/2020 | | | | | | 4,466 | | | | 208,116 | | | | | 2/10/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 1,217 | | | | 56,712 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 13,000 | | | | 605,800 | | | | | 10/29/2014 | | | | 10,500 | | | | 31,500 | | | | — | | | | 41.92 | | | | 10/29/2021 | | | | | | 5,485 | | | | 255,601 | | | | | 2/12/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 2,498 | | | | 116,407 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | 13,170 | | | | 613,722 | | | | | 10/28/2015 | | | | — | | | | 36,946 | | | | — | | | | 48.35 | | | | 10/28/2022 | | | | | | 6,243 | | | | 290,924 | |
1 | | The option awards are subject to vesting schedules as follows: |
Option awards with exercise prices of $16 and $32
For Messrs. Barns, Lewis, and Ms. Finn: 5% vested on their grant date with the remainder scheduled to vest ratably on December 31, 2007, 2008, 2009, 2010 and 2011. 50% of the award was subject to performance vesting based on the achievement of pre-established EBITDA targets. 2008 performance did not meet the pre-established target and will not vest. Performance in 2010 and 2011 did not meet the pre-established targets. Performance-based options for these years converted to time-based options and vested on December 31, 2012 and 2013, respectively.
| | |
| | 2016 PROXY STATEMENT 57
|
For Mr. Hasker: 25% was scheduled to vest ratably on each of December 31, 2009, 2010, 2011 and 2012. 50% of the award was subject to performance vesting based on the achievement of pre-established EBITDA targets. Performance in 2010, 2011 and 2012 did not meet the pre-established targets. Performance-based options for these years converted to time-based options and vested on December 31, 2012, 2013 and 2014, respectively.
Option awards with an exercise price of $18.40:
For Messrs. Barns and West: vested one-third on each of March 18, 2011, 2012 and 2013.
Option awards with exercise prices of $30.19, $27.98, $36.56, $41.92, $48.35 and $47.95:
Vest ratably on each of the four anniversaries of the grant date.
2 | | The RSU awards are subject to vesting schedules as follows: |
The July 26, 2012, September 25, 2013, March 10, 2014 (Mr. Jackson only), October 29, 2014, October 28, 2015 and October 29, 2015 (Mr. Barns only) awards time-vest
| | | • | | October 28, 2015 (Messrs. Dale and Tavolieri), October 29, 2015 (Mr. Barns) and October 20, 2016 (Messrs. Barns, Jackson and Dale) awards service-vest ratably on each of the four anniversaries of the grant date. The November 13, 2017 awards (Messrs. Barns, Dale and Tavolieri and Ms. Phillips) service-vest ratably on each of the four anniversaries of October 18, 2017. Some October 26, 2018 (Messrs. Dale and Tavolieri and Ms. Phillips) awards will service-vest ratably on each of the four anniversaries of the grant date. For Mr. West, the July 26, 2012, September 25, 2013 and October 29, 2014 awards vested on a pro-rata basis on his departure date of December 31, 2015. The February 20, 2013 awards are performance restricted shares which were earned in accordance with the terms of the 2013 LTPP in February 2016.
The July 25, 2013 awards are special one-time RSU grants made to Messrs. Barns, West, Hasker, and Lewis that time-vest 20% on each of the anniversaries of the grant date in 2014 and 2015; and 30% on each subsequent grant date anniversary in 2016 and 2017. This award vested and was distributed to Mr. West on a pro-rata basis based on service from July 25, 2015 to his departure date of December 31, 2015.
The February 10, 2014 awards made to Messrs. Barns, West, Hasker, Lewis, and Ms. Finn are restricted shares awarded under the 2013 annual incentive plan that will time-vest 50% on each of the two anniversaries of the grant date in 2015 and 2016.
The February 20, 2014 awards made to Messrs. Barns, West, Hasker, Lewis, and Ms. Finn are performance RSUs, which will vest, if earned in accordance with the terms of the 2014 LTPP, in February 2017. For Mr. West, the performance RSUs disclosed are pro-rata from January 1, 2014 to December 31, 2015.
The March 10, 2014 award of 20,000 performance RSUs made to Mr. Jackson upon his hire date will vest if earned in accordance with the terms of the 2014 LTPP, in February 2017.
The February 12, 2015 awards made to Messrs. Barns, Jackson, West, Hasker, Lewis, and Ms. Finn are RSUs awarded under the 2014 annual incentive plan that will time-vest 50% on each of the two anniversaries of the grant date in 2016 and 2017.
The February 19, 2015 awards made to Messrs. Barns, Jackson, West, Hasker, Lewis, and Ms. Finn are performance RSUs, which will vest, if earned in accordance with the terms of the 2015 LTPP, in February 2018. For Mr. West the performance RSUs disclosed are pro-rata from January 1, 2015 to December 31, 2015.
| • | | Other October 26, 2018 awards to Messrs. Anderson, Dale and Tavolieri and to Ms. Phillips will vest ratably on each of the three anniversaries of the grant date. | • | | The Make Whole December 3, 2018 award to Mr. Kenny will vest ratably on each of the four anniversaries of the grant date. The New Hire December 3, 2018 award to Mr. Kenny will vest on the third anniversary of the award. |
3 | | The PRSUs are subject to vesting schedules as follows: |
| | | • | | The February 16, 2017 awards are scheduled to vest on December 31, 2019 based on the achievement of free cash flow and relative total shareholder return over a three-year performance period (January 1, 2017 – December 31, 2019). | • | | The February 21, 2018 awards are scheduled to vest on December 31, 2020 based on the achievement of free cash flow, CAGR and relative total shareholder return over a three-year performance period (January 1, 2018 – December 31, 2020). |
| | Provided that the NEO remains employed through the end of the applicable performance period, the PRSUs become vested, earned andnon-forfeitable in respect of a number of shares of our common stock based on the Compensation Committee’s determination following the end of the applicable performance period of the level of achievement. |
| | In the table above for 2018, the number and market value of PRSUs that vest based on relative total shareholder return, CAGR and free cash flow reflect target performance through December 31, 2018. The actual numbers of shares that will be distributed in respect of the PRSUs are not yet determinable. The 2017 awards are projected to pay zero. |
4 | | Market value is based on $23.33 per share, the closing price of $46.60 per shareour common stock on the NYSE on December 31, 2015.2018. |
5 | | For information on vesting upon specified termination events or a change in control, see “– Potential Payments Upon Termination or Change in Control.” |
| | |
| | 2019 PROXY STATEMENT 60 |
Option Exercises and Stock Vested in 20152018 The following table presents information regarding the value realized by each of our NEOs upon the exercise of option awards or the vesting of stock awards during the fiscal year ended December 31, 2015.2018. | | | | | | | | | | | | | | | | | | | | | Option Awards | | | | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | (a) | | (b) | | | (c) | | | | | (d) | | | (e) | | Mitch Barns | | | 33,288 | | | | 846,123 | | | | | | 25,230 | | | | 1,157,178 | | Jamere Jackson | | | — | | | | — | | | | | | 23,416 | | | | 1,024,736 | | Brian West | | | 217,412 | | | | 6,936,192 | | | | | | 37,451 | | | | 1,720,695 | | Steve Hasker | | | — | | | | — | | | | | | 22,026 | | | | 1,003,230 | | John Lewis | | | 55,125 | | | | 560,970 | | | | | | 22,074 | | | | 1,006,158 | | Mary Liz Finn | | | — | | | | — | | | | | | 7,857 | | | | 361,934 | |
| | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | | | Number of Shares Acquired on Exercise | | | Value Realized on Exercise | | | Number of Shares Acquired on Vesting1 | | | Value Realized on Vesting2 | | Name | | (#) | | | ($) | | | (#) | | | ($) | | | | | | | David Kenny | | | — | | | | — | | | | — | | | | — | | | | | | | Mitch Barns | | | — | | | | — | | | | 200,793 | | | | 5,250,468 | | | | | | | David Anderson | | | — | | | | — | | | | — | | | | — | | | | | | | Jamere Jackson | | | — | | | | — | | | | 37,476 | | | | 1,241,516 | | | | | | | Giovanni Tavolieri | | | — | | | | — | | | | 11,774 | | | | 336,159 | | | | | | | Eric Dale | | | — | | | | — | | | | 16,401 | | | | 489,054 | | | | | | | Nancy Phillips | | | — | | | | — | | | | 4,693 | | | | 126,523 | |
| | | 1 | | 2016 PROXY STATEMENT 58 Includes shares of Nielsen stock received from the vesting of previously granted RSUs. |
2 | EXECUTIVE COMPENSATION | Reflects the fair market value on the vesting date multiplied by the number of shares vested. |
Pension Benefits for 20152018 The following table presents information regarding the pension arrangements with each of our NEOs during the fiscal year ended December 31, 2015.2018. | Name | | Plan Name | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | | Plan Name | | | Number of Years Credited Service | | | Present Value of Accumulated Benefit | | | Payments During Last Fiscal Year | | (a) | | (b) | | (c) | | | (d) | | | (e) | | | Name | | | Plan Name | | (a) | (#) | | | ($) | | | ($) | | | David Kenny | | | | — | | | | — | | | | — | | | | — | | | Mitch Barns | | Qualified Plan | | | 4.42 | | | | 39,194 | | | | — | | | | Qualified Plan | | | | 4.42 | | | | 44,651 | | | | — | | | | Excess Plan | | | 4.42 | | | | 29,752 | | | | — | | | | | | | Excess Plan | | | | 4.42 | | | | 33,111 | | | | — | | | David Anderson | | | | — | | | | — | | | | — | | | | — | | | Jamere Jackson | | — | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Brian West | | — | | | — | | | | — | | | | — | | | Steve Hasker | | — | | | — | | | | — | | | | — | | | John Lewis | | Qualified Plan | | | 3.92 | | | | 19,972 | | | | — | | | | | Excess Plan | | | 3.92 | | | | 36,028 | | | | | Mary Liz Finn | | — | | | — | | | | — | | | | — | | | Giovanni Tavolieri | | | | — | | | | — | | | | — | | | | — | | | Eric Dale | | | | — | | | | — | | | | — | | | | — | | | Nancy Phillips | | | | — | | | | — | | | | — | | | | — | |
Assumptions for Present Value of Accumulated Benefit Present values at December 31, 2015 are2018 were the present value of accumulated benefits as used under ASC960FASB Topic ASC 960 and were calculated using an interest rate of 4.63%4.41% for the Qualified Plan (as defined below) benefits and 4.46%4.34% for the Excess Plan (as defined below) benefits, an interest credit rate of 3.38%3.16% and the white collar retiree RP 2014 table backed off to 2007 mortality tables projected with mortality improvements based on the MMP2007 Scale.SOA scale MP2018. These assumptions are consistent with those used for the financial statements of the Company’s retirement plans. United States RetirementPension Plans Effective August 31, 2006, the Company froze its United States qualified andnon-qualified defined benefit retirement plans. No participants may be added and no further basic credits (described below) may accrue after this date. The retirement plans, as in existence immediately prior to the freeze, are described below. We maintain atax-qualified retirement plan (the “Qualified Plan”), a cash-balance pension plan that covers eligible United States employees who have completed at least one year of service. Prior to the freeze, we added monthly | | |
| | 2019 PROXY STATEMENT 61 |
basic and investment credits to each participant’s account. The basic credit equaled 3% of a participant’s eligible monthly compensation. At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits. Participants became fully vested in their accrued benefits after the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan). Unmarried participants receive retirement benefits as a single-life annuity, and married participants receive retirement benefits as a qualifiedjoint-and-survivor annuity. Participants can elect an alternate form of payment such as a straight-life annuity, ajoint-and-survivor annuity, yearscertain-and-life income annuity or a level income annuity option. Lump sum payment of accrued benefits is only available if the benefits do not exceed $5,000. Payment of benefits begins at the later of the participant’s termination of employment or reaching age 40. The definition of compensation includesW-2 earnings plus deferrals minus unusual payments (e.g., stock awards, relocation and tuition reimbursement). We also maintain anon-qualified retirement plan (the “Excess Plan”) for certain of our management and highly compensated employees. Prior to the freeze, the Excess Plan provided supplemental benefits to individuals whose benefits under the Qualified Plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the Code. The benefit payable to a participant under the Excess Plan is equal to the difference between the benefit actually paid under the Qualified Plan and the amount that would have been payable had the applicable Code limitations not applied. Although the Excess Plan is considered an unfunded plan and there is no current trust agreement for the Excess Plan, assets have been set aside in a “rabbi trust” fund. It is intended that benefits due under the Excess Plan will be paid from this rabbi trust or from the general assets of the Nielsen entity that employs the participants. | | |
| | 2016 PROXY STATEMENT 59
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Messrs.Mr. Barns and Lewis areis the only NEOsNEO who participateparticipates in the Qualified Plan and the Excess Plan.
Reduced early retirement benefits are available once the participant has reached age 40 and completed 5five years of service. Messrs.Mr. Barns and Lewis are bothis eligible for early retirement. The early retirement benefits payable under both plans are actuarially reduced to be equivalent to the benefit payable at normal retirement age for Mr. Barns. For Mr. Lewis, the early retirement benefits payable are the greater of the benefits under the cash-balance pension plan actuarially reduced to be equivalent to the benefit payable at normal retirement age and the frozen Dun & Bradstreet benefit reduced 3% per year from normal retirement age to age at commencement. The early retirement benefit for the non-qualified plan is the same, except that the frozen Dun & Bradstreet benefit is not reduced for early commencement when performing the comparison outlined above.age. Nonqualified Deferred Compensation for 20152018 The Company offers a voluntary nonqualified deferred compensation plan in the United States, which allows selected executives the opportunity to defer a significant portion of their base salary and incentive payments to a future date. Earnings on deferred amounts are determined with reference to designated mutual funds. Mr. Lewis and Ms. Finn are the only NEOs with a balance under this plan. Eligible employees may contribute up to 75% of their base salary and up to 90%80% of their annual incentive award. The following table presents information regardingnon-qualified deferred compensation arrangements with each of our NEOs during the fiscal year ended December 31, 2015.2018. No NEOs participated in the nonqualified deferred compensation plan in 2018. | | | | | | | | | | | | | | | | | | | | | Name | | Executive Contributions in Last FY1 ($) | | | Registrant Contributions in Last FY ($) | | | Aggregate Earnings in Last FY2 ($) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE ($) | | (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | Mitch Barns | | | — | | | | — | | | | — | | | | — | | | | — | | Jamere Jackson | | | — | | | | — | | | | — | | | | — | | | | — | | Brian West | | | — | | | | — | | | | — | | | | — | | | | — | | Steve Hasker | | | — | | | | — | | | | — | | | | — | | | | — | | John Lewis | | | 500,000 | | | | — | | | | 84,014 | | | | — | | | | 2,541,176 | | Mary Liz Finn | | | 86,875 | | | | — | | | | 33,391 | | | | — | | | | 985,446 | |
| | | | | | | | | | | | | | | | | | | | | | | Executive Contributions in Last FY | | | Registrant Contributions in Last FY | | | Aggregate Earnings in Last FY1 | | | Aggregate Withdrawals/ Distributions | | | Aggregate Balance at Last FYE2 | | Name | | ($) | | | ($) | | | ($) | | | ($) | | | ($) | | | | | | | | David Kenny | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Mitch Barns | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | David Anderson | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Jamere Jackson | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Giovanni Tavolieri | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Eric J. Dale | | | — | | | | — | | | $ | 505 | | | | — | | | $ | 61,300 | | | | | | | | Nancy Phillips | | | — | | | | — | | | | — | | | | — | | | | — | |
1 | | Amounts in this column are not reported as compensation for fiscal year 2018 in the “Summary Compensation Table,” since they do not reflect above-market or preferential earnings. Deferrals may be allocated among investment options that generally mirror the investment options available under our qualified 401(k) plan. Of the available investment options, the rate of return during 2018 was a range from-14.91% to 0.03%. |
2 | | Mr. Lewis’ 2015Dale’s 2017 contribution of $500,000 and Ms. Finn’s 2015$50,018 was included in the“Non-Equity Incentive Plan Compensation” column for 2017 in the Summary Compensation Table. Mr. Dale’s 2016 contribution of $86,875 were$6,500 was made from salary and annual cash incentive and areis included in the Salary andNon-Equity Incentive Plan Compensation columns in the Summary Compensation Table. |
2 | | |
| | Interest payments have not been reported in the Summary Compensation Table. Therefore, no contributions are reflected in the Summary Compensation Table.2019 PROXY STATEMENT 62 |
Potential Payments Upon Termination or Change-in-ControlChange in Control ExceptThe information in this section describes the potential payments and benefits that our NEOs would have received under the Nielsen Holdings plc Severance Policy for Mr. Jackson, if an NEO is terminated bySection 16 Officers and United States-Based Senior Executives (the “Severance Policy”), the Company without cause2010 Plan and the applicable award agreements thereunder, assuming the specified triggering events occurred on the last business day of fiscal 2018 (December 31, 2018).
The information below does not include: (1) payments and benefits to the extent they are provided generally to all salaried employees and do not discriminate in scope, terms or operation in favor of the NEO resignsNEOs; (2) distributions under our pension plans; and (3) distributions under ournon-qualified deferred compensation plan. Summary of Potential Payments Upon Termination or Change in Control | | | | | | | | | | | Compensation Element | | Change in Control | | Termination without Cause or for Good Reason Outside of Change in Control1 Protection Period2 | | Termination without Cause or for Good Reason During the 24 Months Following a Change in Control | | Termination due to Death or Disability | | Retirement3 | | | | | | | Severance, | | N/A | | CEO – Pay continuation during the severance period4 consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years Other NEOs – Pay continuation during the severance period consisting of one times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years | | CEO – Pay continuation during the severance period consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years Other NEOs – Pay continuation during the severance period consisting of two times the sum of base salary and the average of the annual incentive payment paid for the prior 3 years | | N/A | | N/A | | | | | | | Annual Incentive Award | | N/A | | Apro-rata portion of the annual incentive award payable in a lump sum for the year in which the termination takes place (based on actual performance). | | Apro-rata portion of the annual incentive award payable in a lump sum for the year in which the termination takes place (based on actual performance). | | N/A | | N/A | | | | | | | Health & Welfare Benefits | | N/A | | Continued health and welfare benefits for the NEO and his or her covered family members for the duration of the severance period. | | Continued health and welfare benefits for the NEO and his or her covered family members for the duration of the severance period. | | N/A | | N/A | | | | | | | Stock Options | | All unvested options will vest upon a change in control if the acquiring entity does not agree to assume such options.5 | | Apro-rata portion of the options that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | | If, during thetwo-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, the assumed options will fully vest. | | Apro-rata portion of the options that were granted before 2015 and that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | | Unvested options are forfeited |
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| | 2019 PROXY STATEMENT 63 |
| | | | | | | | | | | Compensation Element | | Change in Control | | Termination without Cause or for Good Reason Outside of Change in Control1 Protection Period2 | | Termination without Cause or for Good Reason During the 24 Months Following a Change in Control | | Termination due to Death or Disability | | Retirement3 | | | | | | | | | All unvested options that were granted in 2015 or after vest on the date of termination. | | | | | | | | | Performance Stock Options | | All unvested options will vest immediately, for both service and performance conditions, upon a change in control if the acquiring entity does not agree to assume such options. If the options are assumed, the performance criteria will be considered satisfied and service vesting of the options will continue to vest in accordance with their terms. | | Apro-rata portion of the PSOs that are scheduled to vest on the next vesting date following the NEO’s termination will service vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days, provided the performance vesting condition has been met prior to the Share Price Goal End Date. | | If, prior to the final Service Vesting Date and following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, assumed options will fully vest. | | All unvested options will become immediately fully vested and exercisable on the date of termination without regard to either the service or performance vesting criteria. | | Unvested options are forfeited | | | | | | | Premium Stock Options | | All unvested options will vest immediately upon a change in control if the acquiring entity does not agree to assume such options. If the options are assumed, they will continue to vest in accordance with their terms. | | Apro-rata portion of the options that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | | If, during thetwo-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, assumed options will fully vest. | | All unvested options vest on the date of termination. | | Unvested options are forfeited | | | | | | | RSUs | | All unvested RSUs will vest upon a change in control if the acquiring entity does not agree to assume such RSUs. If the RSUs are assumed, they will continue to vest in accordance with their terms. | | Apro-rata portion of the RSUs that are scheduled to vest on the next vesting date following the NEO’s termination will vest upon the date of termination, with suchpro-rata portion determined based on the number of days the NEO was employed from the immediately preceding vesting date through the date of termination, relative to 365 days. | | If, during thetwo-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, assumed RSUs will fully vest. | | All unvested RSUs vest on the date of termination. | | Unvested RSUs are forfeited |
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| | 2019 PROXY STATEMENT 64 |
| | | | | | | | | | | Compensation Element | | Change in Control | | Termination without Cause or for Good Reason Outside of Change in Control1 Protection Period2 | | Termination without Cause or for Good Reason During the 24 Months Following a Change in Control | | Termination due to Death or Disability | | Retirement3 | | | | | | | PRSUs | | All unvested PRSUs will vest upon a change in control (based on the target number of PRSUs subject to each outstanding award) if the acquiring entity does not agree to assume such PRSUs. If the PRSUs are assumed, then they will become vested at the target level of performance (without regard to the achievement of the applicable performance criteria) on the last day of the applicable three-year performance period, if the NEO remains employed by the Company or its successor on such date. | | The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of the three-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095. | | If, during thetwo-year period following a change in control, the NEO is terminated under circumstances that would give rise to his or her right to severance under any severance policy or agreement, assumed PRSUs will vest at the target level of performance (without regard to the achievement of the applicable performance criteria). | | All unvested PRSUs vest on the date of termination (based on the target number of PRSUs subject to each outstanding award). | | The NEO remains eligible to earn a number of PRSUs equal to the product of (i) the total number of PRSUs that would have become vested based on the level of attainment of the applicable performance goals if the NEO had remained employed through the end of the three-year performance period, and (ii) a fraction, the numerator of which is the number of days in the performance period that have elapsed through the date of termination, and the denominator of which is 1095. As described in the immediately preceding column, if the termination occurs following a change in control, then all PRSUs subject to the award will vest at the target level upon such termination. |
1 | | Change in control is defined in the Severance Policy and includes the acquisition of shares of the Company representing more than 40% of the Company’s capital stock; merger, consolidation or reorganization wherepre-transaction shareholders do not continue to hold at least 50% of the Company’s voting power; change in majority of the Board within a12-month period; and liquidation, dissolution or a material asset sale. |
2 | | The change in control protection period is defined as the 24 month period following a change in control event. |
3 | | “Retirement” means (i) any statutorily mandated retirement date required under applicable law or (ii) such other retirement date as may be approved by the Company. On a case by case basis, the Compensation Committee may approve the continuation of vesting of unvested equity awards upon an NEO’s retirement. |
4 | | “Severance period” means (x) for the CEO, the24-month period immediately following the termination date and (y) for the other NEOs, if the termination date falls outside of the change in control protection period, the12-month period immediately following the date of termination and, if the termination date falls within the change in control protection period, the24-month period immediately following the termination date. |
5 | | Mr. Kenny’s awards can only be substituted for awards of stock publicly traded in the U.S. or UK. |
The severance payments and benefits consisting of salary continuation,pro-rata annual incentive award and health and welfare benefits continuation are provided pursuant to the terms of the U.S. Severance Policy for good reason (as those termsSection 16 Officers and Senior Executives, which applies to the CEO, CFO and other NEOs. Such payments and benefits are defined in the form of Severance Agreement), subject to their compliance with certain restrictive covenants (asas described under “–Restrictive Covenants”) and their execution (without revocation) of a general waiver and release of claims, they will be entitled to severance pay that includes:claims. base salary continuation for one year for Messrs. Barns and Hasker and Ms. Finn;
a pro-rata portion of their annual incentive award for the year of termination (based on actual performance); and
continued health and welfare benefits for the NEO and their covered family members for the duration of the severance period, with the cost of such health benefit premiums, at the active employee rate, deducted from the salary continuation payments on an after-tax basis.
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| | 20162019 PROXY STATEMENT 60 65
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If Mr. Jackson’s employment is terminated by the Company without cause or he resigns for good reason (as those terms are defined in his offer letter), Mr. Jackson is entitled to continue to receive his base salary and health benefits for himself and covered family members for a period of 12 months (with the cost of such health benefit premiums at the active employee rate deducted from his salary continuation payments on an after-tax basis).
Mr. West did not receive severance payments in connection with his departure. In recognition of his delivery of a seamless transition to the new technology and operations structure, the Compensation Committee approved provisions in accordance with our 2010 Plan policy whereby Mr. West forfeited all of his outstanding unvested equity, except that:
RSUs awarded in 2014 and 2015 in respect of the annual incentive plan performance in 2013 and 2014, respectively, will continue to vest according to the normal two-year ratable schedule;
2014 and 2015 LTPP awards will be earned following approvals at the end of the performance periods and paid pro-rata to service from the beginning of the performance period through December 31, 2015; and
stock option and RSU tranches, due to vest in 2016, will vest on a pro-rata basis based on service from the most recent vesting date through December 31, 2015.
On December 30, 2015, Mr. Lewis announced that he would leave the Company effective June 30, 2016. The separation arrangements for Mr. Lewis are in accordance with the terms of the form of severance agreement previously filed with the SEC.
If, on December 31, 2015,2018, an NEO’s employment had been terminated without cause by the Company, or anthe NEO had resigned for good reason, each would have received total payments and benefits as shown in the following table: | | | | | | | | | | | | | | | Multiple of Base Salary | | Base Salary x Multiple $ | | Annual Incentive Award $ | | | Health & Welfare Benefits $ | | Total $ | Mitch Barns | | 1x | | 1,000,000 | | $ | 2,060,000 | | | 7,200 | | 3,067,200 | Jamere Jackson | | 1x | | 700,000 | | $ | 875,000 | | | 7,200 | | 1,582,200 | Brian West | | N/A | | N/A | | | N/A | | | N/A | | N/A | Steve Hasker | | 1x | | 900,000 | | $ | 1,000,000 | | | 7,200 | | 1,907,200 | John Lewis | | 2x | | 1,540,000 | | $ | 800,000 | | | 14,400 | | 2,354,400 | Mary Liz Finn | | 1x | | 550,000 | | $ | 430,000 | | | 7,200 | | 987,200 |
In addition, on a change-in-control if the acquiring entity does not assume the awards or provide for the issuance of substitute awards on an equitable basis, any unvested options, or RSUs, granted in 2012, 2013, 2014Severance Payments and 2015 under the 2010 Plan, as amended, would become vested and exercisable in full, and any unearned, unvested performance RSUs under the LTPP would become vested at 100% of the target award.Benefits
| | | | | | | | | | | | | | | | | Multiple of Base Salary and Average of Prior Three-Year Bonus paid2 | | Base Salary x Multiple $ | | Average of Prior Three-Year Bonus paid x Multiple $ | | Annual Incentive Award $ | | | Health & Welfare Benefits $ | | Total $ | | | | | | | | David Kenny | | 2x | | 2,600,000 | | 3,850,000 | | | — | | | 7,650 | | 6,457,650 | | | | | | | | David Anderson | | 1x | | 800,000 | | 800,000 | | | 400,000 | | | 7,650 | | 2,007,650 | | | | | | | | Giovanni Tavolieri | | 1x | | 600,000 | | 476,936 | | | — | | | 7,650 | | 1,084,586 | | | | | | | | Eric Dale | | 1x | | 750,000 | | 700,000 | | | — | | | 7,650 | | 1,457,650 | | | | | | | | Nancy Phillips | | 1x | | 500,000 | | 450,000 | | | — | | | 7,650 | | 957,650 |
1 | | Mr. Jackson was not entitled to severance payments and benefits in connection with his departure from the Company. |
2 | | In the event of a termination by the Company without cause or by the NEO for good reason during the change in control protection period, the multiple of base salary and average of prior three-year bonus paid is 2x for all NEOs. |
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AsIn addition, under the applicable form of award agreement under the 2010 Plan if, on December 31, 2015,2018, the valueNEO’s employment had been terminated for one of any accelerated vesting of options and RSUs would be asthe reasons set forth in the following table. This includestable below, the value of optionsNEO would have been entitled to receive accelerated vesting and/or post-termination continued vesting with respect to the long-term incentive awards granted to such NEO prior to such date as described in the table below and RSUs awarded in 2012, 2013, 2014 and 2015 which would vest if not assumed by the acquiring entity.corresponding footnotes:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | | Unvested Options | | | Exercise Price | | | Unvested RSUs | | | LTPP | | | Fair Market Value as of 12/31/2015 | | | Value of Accelerated Unvested Options & RSUs & LTPP | | Mitch Barns | | | 3/5/2007 | | | | 6,235 | | | | 16.00 | | | | — | | | | — | | | $ | 46.60 | | | $ | 190,791 | | | | | 3/5/2007 | | | | 1,039 | | | | 32.00 | | | | — | | | | — | | | | 46.60 | | | | 15,169 | | | | | 7/26/2012 | | | | 20,000 | | | | 27.98 | | | | — | | | | — | | | | 46.60 | | | | 372,400 | | | | | 7/26/2012 | | | | — | | | | — | | | | 3,999 | | | | — | | | | 46.60 | | | | 186,353 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | 25,000 | | | | 46.60 | | | | 1,165,000 | | | | | 7/25/2013 | | | | — | | | | — | | | | 31,697 | | | | — | | | | 46.60 | | | | 1,477,080 | | | | | 9/25/2013 | | | | 23,500 | | | | 36.56 | | | | — | | | | — | | | | 46.60 | | | | 235,940 | | | | | 9/25/2013 | | | | — | | | | — | | | | 4,728 | | | | — | | | | 46.60 | | | | 220,325 | | | | | 2/10/2014 | | | | — | | | | — | | | | 2,463 | | | | — | | | | 46.60 | | | | 114,776 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | 43,500 | | | | 46.60 | | | | 2,027,100 | | | | | 10/29/2014 | | | | 105,750 | | | | 41.92 | | | | — | | | | — | | | | 46.60 | | | | 494,910 | | | | | 10/29/2014 | | | | — | | | | — | | | | 18,385 | | | | — | | | | 46.60 | | | | 856,741 | | | | | 2/12/2015 | | | | — | | | | — | | | | 10,697 | | | | — | | | | 46.60 | | | | 498,480 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 65,860 | | | | 46.60 | | | | 3,069,076 | | | | | 10/29/2015 | | | | 177,515 | | | | 47.95 | | | | — | | | | — | | | | 46.60 | | | | 0 | | | | | 10/29/2015 | | | | — | | | | — | | | | 31,475 | | | | — | | | | 46.60 | | | | 1,466,735 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 12,390,877 | | Jamere Jackson | | | 3/10/2014 | | | | — | | | | — | | | | 63,310 | | | | — | | | $ | 46.60 | | | $ | 2,950,246 | | | | | 3/10/2014 | | | | — | | | | — | | | | — | | | | 20,000 | | | | 46.60 | | | | 932,000 | | | | | 10/29/2014 | | | | 48,750 | | | | 41.92 | | | | — | | | | — | | | | 46.60 | | | | 228,150 | | | | | 10/29/2014 | | | | — | | | | — | | | | 8,498 | | | | — | | | | 46.60 | | | | 396,007 | | | | | 2/12/2015 | | | | — | | | | — | | | | 4,409 | | | | — | | | | 46.60 | | | | 205,459 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 20,860 | | | | 46.60 | | | | 972,076 | | | | | 10/28/2015 | | | | 58,498 | | | | 48.35 | | | | — | | | | — | | | | 46.60 | | | | 0 | | | | | 10/28/2015 | | | | — | | | | — | | | | 9,884 | | | | — | | | | 46.60 | | | | 460,594 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 6,144,533 | | Brian West | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | 30,000 | | | $ | 46.60 | | | $ | 1,398,000 | | | | | 2/10/2014 | | | | — | | | | — | | | | 4,345 | | | | — | | | | 46.60 | | | | 202,477 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | 25,299 | | | | 46.60 | | | | 1,178,933 | | | | | 2/12/2015 | | | | — | | | | — | | | | 10,580 | | | | — | | | | 46.60 | | | | 493,028 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 12,772 | | | | 46.60 | | | | 595,175 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,867,614 | | Steve Hasker | | | 7/26/2012 | | | | 20,000 | | | | 27.98 | | | | — | | | | — | | | $ | 46.60 | | | $ | 372,400 | | | | | 7/26/2012 | | | | — | | | | — | | | | 3,999 | | | | — | | | | 46.60 | | | | 186,353 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | 22,000 | | | | 46.60 | | | | 1,025,200 | | | | | 7/25/2013 | | | | — | | | | — | | | | 31,697 | | | | — | | | | 46.60 | | | | 1,477,080 | | | | | 9/25/2013 | | | | 22,000 | | | | 36.56 | | | | — | | | | — | | | | 46.60 | | | | 220,880 | | | | | 9/25/2013 | | | | — | | | | — | | | | 4,728 | | | | — | | | | 46.60 | | | | 220,325 | | | | | 2/10/2014 | | | | — | | | | — | | | | 2,535 | | | | — | | | | 46.60 | | | | 118,131 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | 20,100 | | | | 46.60 | | | | 936,660 | | | | | 10/29/2014 | | | | 48,750 | | | | 41.92 | | | | — | | | | — | | | | 46.60 | | | | 228,150 | | | | | 10/29/2014 | | | | — | | | | — | | | | 8,498 | | | | — | | | | 46.60 | | | | 396,007 | | | | | 2/12/2015 | | | | — | | | | — | | | | 5,584 | | | | — | | | | 46.60 | | | | 260,214 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 20,310 | | | | 46.60 | | | | 946,446 | | | | | 10/28/2015 | | | | 60,037 | | | | 48.35 | | | | — | | | | — | | | | 46.60 | | | | 0 | | | | | 10/28/2015 | | | | — | | | | — | | | | 10,145 | | | | — | | | | 46.60 | | | | 472,757 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 6,860,604 | |
| | | | | | | | | | | | | | | | | NEO4,5 | | Termination Due to Death or Disability $ | | | Termination by the Company without Cause or the NEO for Good Reason $ | | | Retirement $ | | | | | | David Kenny | | | | | | | | | | | | | | | | | Stock Options | | | 8,562,833 | (1) | | | — | | | | — | | | | | | RSUs | | | 12,639,961 | (2) | | | 11,405,876 | (2) | | | — | | | | | | PRSUs | | | — | | | | — | | | | — | | | | | | Total | | | 21,202,794 | | | | 11,405,876 | | | | — | | | | | | David Anderson | | | | | | | | | | | | | | | | | Stock Options | | | — | | | | — | | | | — | | | | | | RSUs | | | 1,080,717 | (2) | | | 360,239 | (2) | | | — | | | | | | PRSUs | | | — | | | | — | | | | — | | | | | | Total | | | 1,080,717 | | | | 360,239 | | | | — | | | | | | Giovanni Tavolieri | | | | | | | | | | | | | | | | | Stock Options | | | 8,665,439 | (1) | | | — | | | | — | | | | | | RSUs | | | 2,235,838 | (2) | | | 66,853 | (2) | | | — | | | | | | PRSUs | | | 939,942 | (3) | | | — | | | | — | | | | | | Total | | | 11,841,219 | | | | 66,853 | | | | — | | | | | | Eric J. Dale | | | | | | | | | | | | | | | | | Stock Options | | | 7,998,854 | (1) | | | — | | | | — | | | | | | RSUs | | | 2,032,290 | (2) | | | 62,585 | (2) | | | — | | | | | | PRSUs | | | 1,121,193 | (3) | | | — | | | | — | | | | | | Total | | | 11,152,337 | | | | 62,585 | | | | — | | | | | | Nancy Phillips | | | | | | | | | | | | | | | | | Stock Options | | | 8,665,439 | (1) | | | — | | | | — | | | | | | RSUs | | | 2,081,185 | (2) | | | 60,171 | (2) | | | — | | | | | | PRSUs | | | 897,692 | (3) | | | — | | | | — | | | | | | Total | | | 11,644,316 | | | | 60,171 | | | | — | |
1 | | The amount shown is calculated by multiplying (a) the total number of unvested options held by the NEO on December 31, 2018 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) the difference between (i) $23.33, which was the closing price of a common share of the Company on the NYSE on December 31, 2018 and (ii) the applicable exercise price of the unvested options. Options that had an exercise price above the December 31, 2018 closing price are not reflected in the table. |
2 | | The amount shown is calculated by multiplying (a) the total number of unvested RSUs held by the NEO on December 31, 2018 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $23.33, which was the closing price of a common share of the Company on the NYSE on December 31, 2018. |
3 | | The amount shown is calculated by multiplying (a) the total target number of unvested PRSUs that were granted in 2015 or after, held by the NEO on December 31, 2018 that would have been accelerated on that date, as described in the “Summary of Potential Payments Upon Termination or Change in Control” table by (b) $23.33, which was the closing price of a common share of the Company on the NYSE on December 31, 2018. |
4 | | No amount has been included for thepro-rata portion of the PRSUs that continue to be eligible to vest because, as of the date hereof, it is not known if, or at what level, the applicable performance metrics will be achieved. If such termination had occurred following a change in control the PRSUs would have vested at target. For these amounts, see table below “Accelerated Vesting of Equity Awards if Not Assumed in Change in Control”. |
5 | | Mr. Jackson was not entitled to severance benefits in connection with his departure from the Company. In addition, on a change in control, if the acquiring entity does not assume the awards or provide for the issuance of substitute awards on an equitable basis, any unvested options or RSUs granted in 2014, 2015, 2016 and 2017 under the 2010 Plan, would become vested and exercisable in full, and any unearned, unvested PRSUs under the LTPP would become vested at 100% of the target award. As of December 31, 2018, the value of any accelerated vesting of options and RSUs would be as set forth in the table below. |
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| | 20152019 PROXY STATEMENT 62 67
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Accelerated Vesting of Equity Awards if Not Assumed in Change in Control1, 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | | Unvested Options | | | Exercise Price | | | Unvested RSUs | | | LTPP | | | Fair Market Value as of 12/31/2015 | | | Value of Accelerated Unvested Options & RSUs & LTPP | | John Lewis | | | 2/2/2007 | | | | 17,813 | | | | 16.00 | | | | — | | | | — | | | $ | 46.60 | | | $ | 545,078 | | | | | 2/2/2007 | | | | 2,968 | | | | 32.00 | | | | — | | | | — | | | | 46.60 | | | | 43,333 | | | | | 7/26/2012 | | | | 20,000 | | | | 27.98 | | | | — | | | | — | | | | 46.60 | | | | 372,400 | | | | | 7/26/2012 | | | | — | | | | — | | | | 3,999 | | | | — | | | | 46.60 | | | | 186,353 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | 22,000 | | | | 46.60 | | | | 1,025,200 | | | | | 7/25/2013 | | | | — | | | | — | | | | 31,697 | | | | — | | | | 46.60 | | | | 1,477,080 | | | | | 9/25/2013 | | | | 22,000 | | | | 36.56 | | | | — | | | | — | | | | 46.60 | | | | 220,880 | | | | | 9/25/2013 | | | | — | | | | — | | | | 4,728 | | | | — | | | | 46.60 | | | | 220,325 | | | | | 2/10/2014 | | | | — | | | | — | | | | 2,376 | | | | — | | | | 46.60 | | | | 110,722 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | 19,600 | | | | 46.60 | | | | 913,360 | | | | | 10/29/2014 | | | | 52,500 | | | | 41.92 | | | | — | | | | — | | | | 46.60 | | | | 245,700 | | | | | 10/29/2014 | | | | — | | | | — | | | | 9,116 | | | | — | | | | 46.60 | | | | 424,806 | | | | | 2/12/2015 | | | | — | | | | — | | | | 4,409 | | | | — | | | | 46.60 | | | | 205,459 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 20,860 | | | | 46.60 | | | | 972,076 | | | | | 10/28/2015 | | | | 58,498 | | | | 48.35 | | | | — | | | | — | | | | 46.60 | | | | 0 | | | | | 10/28/2015 | | | | — | | | | — | | | | 9,884 | | | | — | | | | 46.60 | | | | 460,594 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 7,423,366 | | Mary Liz Finn | | | 11/15/2007 | | | | 3,563 | | | | 16.00 | | | | — | | | | — | | | $ | 46.60 | | | $ | 109,028 | | | | | 11/15/2007 | | | | 593 | | | | 32.00 | | | | — | | | | — | | | | 46.60 | | | | 8,658 | | | | | 7/26/2012 | | | | 23,750 | | | | 27.98 | | | | — | | | | — | | | | 46.60 | | | | 442,225 | | | | | 7/26/2012 | | | | — | | | | — | | | | 2,666 | | | | — | | | | 46.60 | | | | 124,236 | | | | | 2/20/2013 | | | | — | | | | — | | | | — | | | | 16,000 | | | | 46.60 | | | | 745,600 | | | | | 9/25/2013 | | | | 20,000 | | | | 36.56 | | | | — | | | | — | | | | 46.60 | | | | 200,800 | | | | | 9/25/2013 | | | | — | | | | — | | | | 4,466 | | | | — | | | | 46.60 | | | | 208,116 | | | | | 2/10/2014 | | | | — | | | | — | | | | 1,217 | | | | — | | | | 46.60 | | | | 56,712 | | | | | 2/20/2014 | | | | — | | | | — | | | | — | | | | 13,000 | | | | 46.60 | | | | 605,800 | | | | | 10/29/2014 | | | | 31,500 | | | | 41.92 | | | | — | | | | — | | | | 46.60 | | | | 147,420 | | | | | 10/29/2014 | | | | — | | | | — | | | | 5,485 | | | | — | | | | 46.60 | | | | 255,601 | | | | | 2/12/2015 | | | | — | | | | — | | | | 2,498 | | | | — | | | | 46.60 | | | | 116,407 | | | | | 2/19/2015 | | | | — | | | | — | | | | — | | | | 13,170 | | | | 46.60 | | | | 613,722 | | | | | 10/28/2015 | | | | 36,946 | | | | 48.35 | | | | — | | | | — | | | | 46.60 | | | | 0 | | | | | 10/28/2015 | | | | — | | | | — | | | | 6,243 | | | | — | | | | 46.60 | | | | 290,924 | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,925,248 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | | Unvested Options | | | Exercise Price | | | Unvested RSUs | | | Unvested PRSUs | | | Fair Market Value as of 12/31/2018 | | | Value of Accelerated Unvested Options & RSUs & PRSUs | | | | | | | | | | David Kenny | | | 12/3/2018 | | | | 750,000 | | | $ | 40.00 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 12/3/2018 | | | | — | | | $ | — | | | | 54,285 | | | | — | | | $ | 23.33 | | | $ | 1,266,469 | | | | | | | | | | | | | 12/3/2018 | | | | — | | | $ | — | | | | 487,505 | | | | — | | | $ | 23.33 | | | $ | 11,373,492 | | | | | | | | | | | | | 12/3/2018 | | | | 367,031 | | | $ | 28.19 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 12,639,961 | | | | | | | | | | David Anderson | | | 10/26/2018 | | | | 321,429 | | | $ | 24.60 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 46,323 | | | | — | | | $ | 23.33 | | | $ | 1,080,717 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,080,717 | | | | | | | | | | Giovanni Tavolieri | | | 10/28/2015 | | | | 3,849 | | | $ | 48.35 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/28/2015 | | | | — | | | $ | — | | | | 724 | | | | — | | | $ | 23.33 | | | $ | 16,894 | | | | | | | | | | | | | 2/18/2016 | | | | — | | | $ | — | | | | — | | | | 6,270 | | | $ | 23.33 | | | $ | 146,279 | | | | | | | | | | | | | 10/20/2016 | | | | 9,579 | | | $ | 54.05 | | | | | | | | | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/20/2016 | | | | — | | | $ | — | | | | 1,517 | | | | — | | | $ | 23.33 | | | $ | 35,387 | | | | | | | | | | | | | 2/16/2017 | | | | — | | | $ | — | | | | — | | | | 10,034 | | | $ | 23.33 | | | $ | 234,093 | | | | | | | | | | | | | 11/13/2017 | | | | — | | | $ | — | | | | 18,654 | | | | — | | | $ | 23.33 | | | $ | 435,202 | | | | | | | | | | | | | 2/21/2018 | | | | — | | | $ | — | | | | — | | | | 23,985 | | | $ | 23.33 | | | $ | 559,570 | | | | | | | | | | | | | 10/26/2018 | | | | 371,429 | | | $ | 24.60 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 21,411 | | | | — | | | $ | 23.33 | | | $ | 499,523 | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 53,529 | | | | — | | | $ | 23.33 | | | $ | 1,248,832 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,175,780 | | | | | | | | | | Eric Dale | | | 10/28/2015 �� | | | | 9,237 | | | $ | 48.35 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/28/2015 | | | | — | | | $ | — | | | | 1,736 | | | | — | | | $ | 23.33 | | | $ | 40,508 | | | | | | | | | | | | | 2/18/2016 | | | | — | | | $ | — | | | | — | | | | 12,540 | | | $ | 23.33 | | | $ | 292,558 | | | | | | | | | | | | | 10/20/2016 | | | | 19,157 | | | $ | 54.05 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/20/2016 | | | | — | | | $ | — | | | | 3,032 | | | | — | | | $ | 23.33 | | | $ | 70,748 | | | | | | | | | | | | | 2/16/2017 | | | | — | | | $ | — | | | | — | | | | 13,378 | | | $ | 23.33 | | | $ | 312,109 | | | | | | | | | | | | | 11/13/2017 | | | | — | | | $ | — | | | | 13,167 | | | | — | | | $ | 23.33 | | | $ | 307,189 | | | | | | | | | | | | | 2/21/2018 | | | | — | | | $ | — | | | | — | | | | 22,140 | | | $ | 23.33 | | | $ | 516,526 | | | | | | | | | | | | | 10/26/2018 | | | | 342,857 | | | $ | 24.60 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 19,764 | | | | — | | | $ | 23.33 | | | $ | 461,099 | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 49,410 | | | | — | | | $ | 23.33 | | | $ | 1,152,746 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,153,483 | | | | | | | | | | Nancy Phillips | | | 2/16/2017 | | | | — | | | $ | — | | | | — | | | | 14,493 | | | $ | 23.33 | | | $ | 338,121.69 | | | | | | | | | | | | | 11/13/2017 | | | | — | | | $ | — | | | | 14,266 | | | | — | | | $ | 23.33 | | | $ | 332,829.98 | | | | | | | | | | | | | 2/21/2018 | | | | — | | | $ | — | | | | — | | | | 23,985 | | | $ | 23.33 | | | $ | 559,570.05 | | | | | | | | | | | | | 10/26/2018 | | | | 371,429 | | | $ | 24.60 | | | | — | | | | — | | | $ | 23.33 | | | $ | — | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 21,411 | | | | — | | | $ | 23.33 | | | $ | 499,523.30 | | | | | | | | | | | | | 10/26/2018 | | | | — | | | $ | — | | | | 53,529 | | | | — | | | $ | 23.33 | | | $ | 1,248,832.04 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 2,978,877 | |
1 | | If the awards were assumed and the NEO was terminated under circumstances entitling him or her to severance immediately following the change in control, the executive’s equity awards would receive the same accelerated vesting treatment as shown in the table above. |
2 | | Mr. Jackson was not entitled to severance benefits in connection with his departure from the Company. |
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| | 2019 PROXY STATEMENT 68 |
Terms of Mr. Barns’ separation from the Company Effective December 3, 2018, Mitch Barns stepped down from the Board and as Chief Executive Officer. Mr. Barns remained with the Company in an advisory role until his retirement on December 31, 2018. Mr. Barns’ retirement constituted a termination without cause under the Company’s Severance Policy for Section 16 Officers and United States Based Senior Executives (“Severance Policy”) and entitled Mr. Barns to the rights and benefits due to the Chief Executive Officer upon a termination without cause including the following: Cash severance of $5,640,000, which is equal to two times the sum of Mr. Barns’ (1) annual base salary and (2) the average of the annual incentive payments paid to Mr. Barns in the three years preceding the year in which Mr. Barns’ employment termination occurs, with such amount payable in equal biweekly installments during the 24 months following Mr. Barns employment termination date. Without this severance pay, Mr. Barns’ reported total compensation in the Summary Compensation Table would have decreased nearly 50% from 2017 reported pay as outlined in the table below. | | | | | | | 2017 | | 2018 | | v% | Summary Compensation Table Total | | Summary Compensation Table Total | | Summary Compensation Table Total excluding severance | | | $10,202,194 | | $10,785,368 | | $5,145,368 | | (49.6%) |
A bonus in respect to the fiscal year 2018 for the portion of the year that Mr. Barns is employed by the company based on actual performance and payable at the time that the Company pays bonuses to other executives of the Company. Actual bonus amount paid is $0. Continued participation in the Company’s medical, dental and vision plans at the same rate as other similarly situated active employees. The value of this is estimated to be approximately $26,000 during the twenty-four months following Mr. Barns’ employment termination for the portion of COBRA premiums in excess of the amounts that Mr. Barns was paid while employed by the Company; and Outplacement assistance and support ($100,000 maximum) for one year. In developing Mr. Barns’ exit package, the Board considered Mr. Barns’ 21 years of service, significant leadership and operational contributions to Nielsen. Throughout his tenure, Mr. Barns served in several roles across both Nielsen’s Connect and Media businesses, including an expatriate assignment leading our China business and serving as President of Global Client Service. Based on his age (55) and years of service (21), Mr. Barns was retirement eligible. The Board approved the following modified retirement treatment for the unvested equity awards held by Mr. Barns which included a reduction in 2018 PRSU awards: Unvested stock options will continue to vest during the twenty-four months following the employment termination, subject to Mr. Barns’ compliance with the restrictive covenants during such period; In order to comply with applicable tax regulations, 106,205 unvested restricted stock units vested upon Mr. Barns’ termination of employment, however, Mr. Barns will be required to hold the Company shares underlying the RSUs, net of any shares required to satisfy applicable tax withholding for the twenty-four months following the employment termination date; and Unvested PRSUs will remain outstanding and eligible to vest based on the actual performance as determined by the compensation committee of the Board, with the actual number of shares earned for the 2018 PRSU award reduced by one third. Restrictive Covenants Pursuant to the severance agreements of the NEOs (except in Mr. Jackson’s case, pursuant to the terms of a restrictive covenant agreementagreements executed in conjunction with histheir offer letter), theyletters, the NEOs have agreed not to disclose any Company confidential information at any time during or after their employment with Nielsen. In addition, they have agreed that, for the duration of their severance period following a termination of their employment with Nielsen, they will not solicit Nielsen’s employees or customers or materially interfere with any of Nielsen’s business relationships. They have also agreed not to act as an employee, investor or in another significant function in any business that directly or indirectly competes with any business of the Company. | | |
| | 20152019 PROXY STATEMENT 63 69
|
CEO Pay Compared to Median Employee | | | | | | | | | 2018 Compensation | | | | CEO, Mitch Barns1 | | $ | 10,785,368 | | | | Median Employee | | $ | 29,055 | | | | Compensation Ratio | | | 371:1 | |
1 | | Mr. Barns was our CEO until December 3, 2018 |
Methodology In 2017, we identified our median employee using our global employee population as of October 1, 2017. We determined that, as of October 1, 2017, our employee population consisted of 47,614 individuals working across the globe. Our employee population, after excluding ournon-U.S. employees (2,371) and an estimated number of employees from our recent acquisitions (2,100), as permitted by the SEC’s rules, as described below, consisted of 43,143 individuals. Under the SEC’s rules, we are permitted to exclude from our employee population used to determine the median employee up to 5% of ournon-US associates provided that all associates from those jurisdictions are excluded. We excluded the following jurisdictions and corresponding number of associates. | | | | | | | Country | | Employee Count | | | | Algeria | | | 126 | | | | Belarus | | | 68 | | | | Kazakhstan | | | 220 | | | | Montenegro | | | 16 | | | | Nepal | | | 42 | | | | Nicaragua | | | 39 | | | | Sri Lanka | | | 187 | | | | Tanzania | | | 33 | | | | Tunisia | | | 25 | | | | Uganda | | | 34 | | | | Venezuela | | | 158 | | | | Vietnam | | | 1,423 | |
We excluded from our employee population those who became employees as a result of our acquisitions of Gracenote, Rhiza, vBrand and Visual IQ and estimate that we excluded approximately 2,100 individuals. After applying the permitted adjustments to our employee population, we consistently applied a compensation measure of base salary for the annual period from October 1, 2016 through September 30, 2017 and determined that our median employee is located in Latin America. We have determined that there has been no change in our overall employee population or employee compensation arrangements during the last completed fiscal year that would significantly impact the ratio of the total annual compensation for our CEO to the median of the annual total compensation of all our employees (other than our CEO) (the “CEO Pay Ratio”). Accordingly, we have used the same median employee we identified in 2017 for purposes of calculating our CEO pay ratio for 2018. In order to calculate the ratio, we used the CEO’s 2018 total compensation reported in the Summary Compensation Table and determined the median employee’s 2018 total compensation assuming that employee’s compensation would have been reportable in the Summary Compensation Table. Such median employee’s total compensation for 2018 included base salary, annual incentive payments, the fair value of equity grants made in 2018, allowances received and Company contributions towards retirement plans. | | |
| | 2019 PROXY STATEMENT 70 |
Approximately 9% of our global employees are part-time and/or temporary/seasonal workers. As of October 1st, 2017 Nielsen employed approximately 22,000 employees in data operations including those who are engaged in field acquisition of data in areas where data cannot be electronically obtained and in panel administration (field and call centers). These field auditors visit smaller retail stores to measure and record inventory movement and perform price checks. Approximately 80% of these data operations employees work outside of the U.S., throughout the world. No exemptions from our calculation were taken based on data privacy or cost of living. If we were to calculate the CEO pay compared to the median employee of our global workforce excluding the field workers the ratio would be 218:1. The ratio of our CEO’s compensation to the median employee located in the United States is 154:1. This CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the CEO pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. | | |
| | 2019 PROXY STATEMENT 71 |
In accordance with the requirements of the UK Companies Act 2006, the UK Annual Report and Accounts contains: 1. | a statement by the Chairperson of the Compensation Committee of the Board of Directors (the “Chairman’s“Chairperson’s Statement”); |
2. | a directors’ compensation policy (the “Directors’ Compensation Policy”); and |
3. | the annual report on directors’ compensation (the “Annual Report on Directors’ Compensation”), setting out directors’ compensation for the year ended December 31, 2015.2018. |
The Chairman’sChairperson’s Statement and the Annual Report on Directors’ Compensation (collectively the “Directors’ Compensation Report”) is reproduced in Annex BA to this proxy statement.statement and the Directors’ Compensation Policy is reproduced in Annex B. An annualnon-binding advisory shareholder vote is required on the Directors’ Compensation Report. While the results of this vote arenon-binding and advisory in nature (which means the Directors’ entitlements to compensation are not conditional upon the resolution being passed), the Board intends to carefully consider the results of this vote. The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve this proposal. The Directors’ Compensation Policy (referredwas approved by shareholders at our 2018 Annual Meeting on May 22, 2018 for a period of up to in item 2 above)three years and is, subjecttherefore, not required to a separate binding shareholder vote as set forth in Proposal 8be put to shareholders for approval at this year’s Annual Meeting. It is intended that, unless required earlier, the Company’s shareholders will next be asked to approve the Directors’ Compensation Policy at the 2021 annual general meeting of this proxy statement.shareholders. | | | | | The Board of Directors recommends that the shareholders vote “FOR” the approval of the Directors’ Compensation Report (items 1 and 3 above). |
| | |
| | 20162019 PROXY STATEMENT 64 72
|
Introduction The Company requests that shareholders vote to approve the Nielsen 2019 Stock Incentive Plan (the “2019 Plan”). The 2019 Plan was adopted by the Board of Directors on February 21, 2019 upon the recommendation of the Compensation Committee, subject to shareholder approval. The 2019 Plan will replace the Amended and Restated Nielsen 2010 Stock Incentive Plan (the “Prior Plan”) under which the Company currently makes equity compensation awards to officers, employees andnon-employee directors. The 2019 Plan is substantially similar to the Prior Plan with some updates based on changes in law and current practices. If approved by shareholders at the Annual Meeting, the 2019 Plan will become effective on the date of such approval and thereafter no new awards will be granted under the Prior Plan. The 2019 Plan is an important part of the Company’s overall compensation program. It allows the Company to make annual and long-term incentive awards to the Company’s officers and employees and to provide reasonable compensation to the Company’snon-employee directors. The purpose of the 2019 Plan is to give the Company a competitive advantage in attracting, retaining and motivating officers, employees and/or directors and to provide them with incentives that are directly linked to the future growth and profitability of the Company’s business. At current projections, we expect to grant 1,700,000 shares from March 31, 2019 to December 31, 2019. Therefore, we will require the shares authorized under the 2019 Plan to meet these needs as well as the needs for estimated annual equity grants in 2020 and 2021. PROMOTION OF GOOD COMPENSATION PRACTICES The 2019 Plan is designed to reinforce the alignment between equity compensation arrangements for officers, employees and directors and shareholders’ interests and, as highlighted below, includes a number of provisions that the Company believes represent best practices, most of which were also included in the Prior Plan. No Discounted Stock Options. Stock options may not be granted with exercise prices lower than the fair market value of the underlying shares on the date of grant. No “Repricing” without Shareholder Approval. The Company may not, without the approval of shareholders, (i) reduce the exercise price of an outstanding stock option or the grant price of an outstanding stock appreciation right (“SAR”) or (ii) cancel andre-grant an outstanding option or SAR or exchange such option or SAR for either cash or a new award with a lower (or no) exercise price when the exercise price of such option or the grant price of such SAR is above the fair market value of a share of Common Stock. No “Evergreen” Provision. There is no “evergreen” feature pursuant to which the shares available for issuance under the 2019 Plan can be automatically replenished. “Double Trigger” Vesting. Awards issued under the 2019 Plan will not vest solely upon a change in control (as defined in the 2019 Plan) unless an acquirer does not assume the awards. No Dividends on Unearned Performance Awards. The 2019 Plan prohibits the payment of dividends or dividend equivalents on performance-based awards until the performance conditions have been satisfied, although dividends and dividend equivalents may accrue subject to satisfaction of such performance conditions. No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, unless approved by the Compensation Committee and in no event may an award be transferred for value or consideration. Individual Award Limits.The 2019 Plan includes annual limits on awards that may be granted under the Plan. | | |
| | 2019 PROXY STATEMENT 73 |
| | | | | APPROVAL OF THE NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
DESCRIPTION OF THE NIELSEN 2019 STOCK INCENTIVE PLAN The following is a description of the purpose and the main features of the 2019 Plan. This description is not complete and is qualified by reference to the full text of the 2019 Plan, which is attached as Annex D to the proxy statement. Plan Maximums.The 2019 Plan specifies the maximum number of shares that may be issued under the plan and imposes limits on certain individual awards to employees and officers as follows: Maximum number of shares that may be delivered pursuant to awards under the 2019 Plan: 7,200,000 shares plus the number of shares reserved for issuance under the Prior Plan on May 21, 2019 that exceeds the number of shares then subject to outstanding awards under the Prior Plan. In addition, any unissued shares underlying awards outstanding under the Prior Plan that, on or after May 21, 2019, expire or are canceled, forfeited or terminated will also become available for grant under the 2019 Plan; No participant (other than nonemployee directors, whose annual award limitations are set forth below) may be granted during any calendar year: Stock options and SARs covering in excess of 2,000,000 shares; or Share-based awards (other than stock options and SARs) covering in excess of 1,000,000 shares. Under the 2019 Plan, total nonemployee director compensation is capped at no more than $800,000 per individual per year. The share maximums and share limits described above are subject to adjustment for any changes in the Company’s equity structure, such as a stock split, or in the event of a corporate transaction. Shares related to awards or portions of awards outstanding under the 2019 Plan at any time that are forfeited, terminated, canceled, or expire unexercised, withheld or tendered to satisfy tax withholding obligations, the aggregate exercise price on the exercise of Options or the purchase price for any other Award, or repurchased by the Company, in each case, shall become available for new awards. Rationale for 2019 Plan Maximums. The following table provides the number of shares outstanding, the number of shares available for future grant under the Prior Plan and the total number of shares of Common Stock outstanding as of March 31, 2019: | | | | | | | Number of Stock Options Outstanding | | | 4,495,842 | | | | Weighted Average Exercise Price | | | $43.05 | | | | Weighted Average Term (in years) | | | 3.33 | | | | Number of Full Value Shares Outstanding* | | | 4,858,195 | | | | Number of Performance Stock Options Outstanding | | | 2,039,245 | | | | Weighted Average Exercise Price | | | $25.25 | | | | Weighted Average Term (in years) | | | 6.55 | | | | Number of Shares Available for Future Grant under the Prior Plan | | | 3,220,826 | | | | Shares of Common Stock Outstanding | | | 354,494,045 | |
* | | Full Value Shares are comprised of RSUs: 3,807,289, PRSUs: 1,039,962 and DSUs: 10,944 |
Eligibility.Our employees, directors and other service providers are eligible to receive awards under the 2019 Plan. The Compensation Committee determines, in its discretion, the participants who will be granted awards under the 2019 Plan. Historically, we have granted awards to approximately 700 (in 2016), 1,000 (in 2017) and 1,200 (in 2018) employees (including our executive officers), out of a total employee pool of approximately 45,000 employees as of December 31, 2018. Many of these grants are made to the same individuals each year. We typically grant awards to employees (including executive officers) based on recommendations from management each year that reflect performance and retention objectives, in addition to any other objectives that our Compensation Committee may determine to be relevant. With respect to ournon-employee directors, our grants will be made in accordance with a grant program established pursuant to the Board’s director compensation policy. | | |
| | 2019 PROXY STATEMENT 74 |
| | | | | APPROVAL OF THE NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
Administration.The 2019 Plan will be administered by our Board’s Compensation Committee or a subcommittee consisting solely of at least two individuals thereof. Subject to the terms of the 2019 Plan, the Compensation Committee has the sole discretion, among other things, to: Interpret the provisions of the 2019 Plan; Establish, amend and rescind any rules and regulations relating to the 2019 Plan; Select the individuals who will receive awards; Determine the terms and conditions of awards (for example, performance criteria and other goals, if any, and vesting schedule); Determine the degree of satisfaction of the vesting conditions of awards; Amend the features and conditions of awards; Correct any defect, supply any omission, or reconcile any inconsistency in the 2019 Plan; and Accelerate or waive the vesting conditions of awards as it deems appropriate. Types of Awards.Similar to the Prior Plan, the 2019 Plan will permit the award of nonstatutory stock options (“NSOs”), incentive stock options (“ISOs”), stock appreciation rights (“SARs”) and other stock-based awards. Such awards may be granted beginning on the date of shareholder approval of the 2019 Plan and continuing through May 20, 2029, or the earlier termination of the 2019 Plan, subject to the number of available shares remaining in the 2019 Plan. The vesting of equity awards can be based on continuous service and/or performance goals. Stock Options. A stock option is the right to acquire shares at a fixed exercise price over a fixed period of time. The Compensation Committee determines the terms of options, including the exercise price (provided that such per share exercise price cannot be less than the fair market value of a share on the date of grant), the vesting and the term of the option. As of March 31, 2019, the fair market value (as that term is defined under the 2019 Plan) of a share of Common Stock was $23.67. The maximum term for options granted under the 2019 Plan may not exceed ten years from the date of grant subject to the discretion of the Compensation Committee to establish a shorter period. Stock options granted under the 2019 Plan may be either ISOs or NSOs. As required by the Code and applicable regulations, ISOs are subject to various limitations not imposed on NSOs. For example, the exercise price for any ISO granted to any employee owning more than 10% of our common stock may not be less than 110% of the fair market value of the common stock on the date of grant and such ISO must expire not later than five years after the grant date. ISOs may not be transferred other than upon death, or to a revocable trust where the participant is considered the sole beneficiary of the stock option while it is held in trust. The maximum number of shares for which incentive stock options may be granted is 7,200,000. Stock Appreciation Rights. A SAR is the right to receive, upon exercise, an amount equal to the difference between the fair market value of the shares on the date of the SAR’s exercise and the fair market value of the shares covered by the exercised portion of the SAR on the date of grant. The Compensation Committee determines the terms of SARs, including the exercise price (provided that such per share exercise price cannot be less than the fair market value of a share on the date of grant), the vesting and the term of the SAR. The maximum term for SARs granted under the 2019 Plan may not exceed ten years from the date of grant subject to the discretion of the Compensation Committee to establish a shorter period. Other Stock-Based Awards. The 2019 Plan also provides that other equity awards which derive their value from the value of our shares or from increases in the value of our shares, including awards of restricted shares, restricted stock units, and dividend equivalent rights may be granted. Other stock-based awards may be granted alone or in addition to any other awards granted under the 2019 Plan. Dividend equivalents granted in connection with other stock-based awards shall be subject to the same vesting conditions that apply to such other stock-based awards. Performance Criteria. The 2019 Plan allows for the specification of performance criteria for any awards thereunder. These performance criteria may be, but need not be, based on one or more of the following target levels of performance of the Company (and/or one or more of the Company’s Affiliates, divisions or operational and/or | | |
| | 2019 PROXY STATEMENT 75 |
| | | | | APPROVAL OF THE NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
business units, business segments, administrative departments, or any combination of the foregoing) used to measure the performance of our executives and business lines: Terms relative to a peer group or index; Basic, diluted, or adjusted earnings per share; Earnings before interest, taxes, and other adjustments (in total or on a per share basis); Cash available for distribution; Returns on equity, assets, capital, revenue or similar measure; Level and growth of dividends; The price or increase in price of Common Stock; Total shareholder return; Growth in assets, new originations of assets, or financing of assets; Equity market capitalization; Reduction or other quantifiable goal with respect to general and/or specific expenses; Mergers, acquisitions, increase in enterprise value of Affiliates, Subsidiaries, divisions or business units or sales of assets of Affiliates, Subsidiaries, divisions or business units or sales of assets; and Any combination of the foregoing. Limited Transferability of Awards. Unless otherwise determined by the Compensation Committee, an award under the 2019 Plan is not transferable or assignable by a participant other than by will or by the laws of descent and distribution and in no event may an award be transferred for value or consideration. An award exercisable after the death of a participant may be exercised by the legatees, personal representatives or distributees of the participant. Forfeiture/Clawback. The Compensation Committee may specify in an award or a policy that will be incorporated into an award agreement by reference that the participant’s rights, payments, and benefits with respect to an award are subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance criteria. Such events may include termination of employment for cause, termination of the participant’s provision of services to the Company or any of its Subsidiaries, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the participant, or restatement of the Company’s financial statements to reflect adverse results from those previously released financial statements, as a consequence of errors, omissions, fraud, or misconduct. Adjustments upon Certain Events. In the event of share dividend or split, reorganization, recapitalization, merger, consolidation, spin off, combination, or transaction or exchange of shares or other corporate exchange, any equity restructuring (as defined under Financial Accounting Standards Board (FASB) Accounting Standards Codification 718), the number or kind of shares or other securities issued or reserved for issuance pursuant to the 2019 Plan or pursuant to outstanding Awards, the maximum number of shares for which options or SARs may be granted during a fiscal year to any participant, the option price or exercise or purchase price of any award, any applicable performance measures (including, without limitation, performance criteria) and/or any other affected terms of such awards, shall each be equitably and proportionately adjusted by the Compensation Committee. Change in Control. Under the 2019 Plan, there is no automatic vesting upon a change in control,unless the successor or acquiring entity in thechange in control does not agree to provide for the issuance of substitute awards on an | | |
| | 2019 PROXY STATEMENT 76 |
| | | | | APPROVAL OF THE NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
equitable basis in a manner consistent with the 2019 Plan. For the purposes qualifying as substitute awards under the 2019 Plan, the shares underlying any such substitute award must be denominated in shares of publicly traded stock on an established U.S. or U.K. securities exchange. If at any time during thetwo-year period following a change in control the successor or acquiring entity terminates a participant’s employment with the Company and its Subsidiaries under a circumstance that would give rise to the participant’s right to payment of severance compensation pursuant to an applicable severance plan, policy, arrangement or agreement, then any unvested awards issued under the 2019 Plan will automatically be deemed exercisable or otherwise vested. Governing Law. The 2019 Plan shall be governed by the laws of the State of New York without regard to conflicts of laws, except to the extent that the matter in question is mandatorily required to be governed by the laws of England and Wales, in which case it will be governed by the applicable provision of the laws of England and Wales. Amendment and Termination of the 2019 Plan. The Board generally may amend or terminate the 2019 Plan at any time and for any reason, except that it must obtain shareholder approval of material amendments, including any addition of shares or repricing of stock options or SARs after the date of their grant as required by NYSE Listing Rules. Certain Federal Income Tax Information The following is a general summary, as of February 28, 2019, of the federal income tax consequences to us and to U.S. participants for awards granted under the 2019 Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. Tax consequences for any particular individual may be different. This summary is not intended to be exhaustive and does not discuss the tax consequences of a participant’s death or provisions of income tax laws of any municipality, state or other country. We advise participants to consult with a tax advisor regarding the tax implications of their awards under the 2019 Plan. Incentive Stock Options. For federal income tax purposes, the holder of an ISO has no taxable income at the time of the grant or exercise of the ISO. If such person retains the common stock acquired under the ISO for a period of at least two years after the stock option is granted and one year after the stock option is exercised, any gain upon the subsequent sale of the common stock will be taxed as a long-term capital gain. A participant who disposes of shares acquired by exercise of an ISO prior to the expiration of two years after the stock option is granted or before one year after the stock option is exercised will realize ordinary income as of the date of exercise equal to the difference between the exercise price and fair market value of the stock. Any additional gain or loss recognized upon any later disposition of the shares would be a short- or long-term capital gain or loss, depending on whether the shares have been held by the participant for more than one year. The difference between the option exercise price and the fair market value of the shares on the exercise date of an ISO is an adjustment in computing the holder’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the participant’s regular income tax for the year. Nonstatutory Stock Options. A participant who receives an NSO generally will not realize taxable income on the grant of such option, but will realize ordinary income at the time of exercise of the stock option equal to the difference between the option exercise price and the fair market value of the stock on the date of exercise. Any additional gain or loss recognized upon any later disposition of the shares would be a short- or long-term capital gain or loss, depending on whether the shares had been held by the participant for more than one year. Stock Appreciation Rights. No taxable income is generally reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received plus the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of any shares received would be a short- or long-term capital gain or loss, depending on whether the shares had been held by the participant for one year or more. Restricted Stock. A participant will generally not have taxable income upon grant of unvested restricted shares unless he or she elects to be taxed at that time pursuant to an election under Code Section 83(b). Instead, he or she will recognize ordinary income at the time(s) of vesting equal to the fair market value (on each vesting date) of the shares or cash received minus any amount paid for the shares. | | |
| | 2019 PROXY STATEMENT 77 |
| | | | | APPROVAL OF THE NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
Restricted Stock Units. No taxable income is generally reportable when unvested restricted stock units are granted to a participant. Upon settlement of the vested restricted stock units, the participant will recognize ordinary income in an amount equal to the value of the payment received pursuant to the vested restricted stock units. Income Tax Effects for the Company. The Company will generally be entitled to a tax deduction in connection with an award under the 2019 Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income (for example, upon the exercise of an NSO), subject to the limitation on deductibility under Code Section 162(m). Internal Revenue Code Section 409A. Code Section 409A governs the federal income taxation of certain types of nonqualified deferred compensation arrangements. A violation of Code Section 409A generally results in an acceleration of the recognition of income of amounts intended to be deferred and the imposition of a federal excise tax of 20% on the employee over and above the income tax owed, plus possible penalties and interest. Code Section 409A covers a broad field of compensation arrangements and may apply to certain awards available under the 2019 Plan (such as restricted stock units). The intent is for the 2019 Plan, including any awards available thereunder, to comply with the requirements of Code Section 409A to the UK Companies Act 2006, companies incorporated inextent applicable. As required by Code Section 409A, certain nonqualified deferred compensation payments to specified employees may be delayed to the UK whose shares are publicly listed (whether in or outside of the UK) must submit their Directors’ Compensation Policy to a binding shareholders’ vote at least once every three years. The Company’s Directors’ Compensation Policy is set out in the UK Annual Report and Accounts and is reproduced in Annex C to this proxy statement.seventh month after such employee’s separation from service. The Directors’ Compensation Policy sets out the Company’s forward-looking policy on directors’ compensation and all compensation must be paid in accordance with the Directors’ Compensation Policy. If the Directors’ Compensation Policy is approved, itNew Plan Benefits
All 2019 Plan awards will be valid without requiring additional shareholder approval until December 31, 2019. It is intended that, unless required earlier, the Company’s shareholders will next be asked to approve the Directors’ Compensation Policygranted at the 2019 annual meetingPlan Committee’s discretion, subject to the limitations described in the 2019 Plan. Therefore, the benefits and amounts that will be received or allocated under the 2019 Plan are not presently determinable. Board Approval As noted above, the 2019 Plan was approved by the Board on February 21, 2019, conditioned on and subject to obtaining shareholder approval of shareholders.the 2019 Plan at the 2019 Annual Meeting of Shareholders. We believe that the 2019 Plan is necessary to promote our long-term success and the creation of shareholder value. The 2019 Plan provides corporate governance enhancements which were not part of the Prior Plan, such as specific limits on total director compensation. In addition, the 2019 Plan continues what we believe are good corporate governance practices from the Prior Plan, such as requiring shareholder approval for any repricing of options or SARs, administration by a committee generally composed of independent directors, no automatic single-trigger vesting upon a change in control and “clawback” or recoupment of compensation provisions. Registration with the SEC If the Directors’ Compensation Policy2019 Plan is not approved by shareholders, we expect to file as soon as reasonably practicable after the Annual Meeting a Registration Statement on FormS-8 with the SEC to register the additional shares of our common stock that will be issuable under the 2019 Plan. Required Vote Approval of this Proposal 7 requires the affirmative vote of a majority of shareholdersthe votes cast at thisthe Annual Meeting in person or by proxy. In determining whether this proposal receives the Companyrequisite number of affirmative votes, abstentions are considered “votes cast” under current NYSE rules and therefore will if and tohave the extent permitted by the UK Companies Act of 2006, continue to make payments to directors in accordance with existing obligations and will seek shareholder approval forsame effect as a revised policy as soon as practicable aftervote “against” this Annual Meeting.proposal. | | | | | The Board of Directors recommends that the shareholders vote “FOR” the approval of the Directors’ Compensation Policy.Nielsen 2019 Stock Incentive Plan. |
| | |
| | 20162019 PROXY STATEMENT 65 78
|
The following table sets forth information as of December 31, 2018, regarding the Company’s equity compensation plans and shares underlying outstanding equity awards. | | | | | | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options and rights | | | Weighted-average exercise price of outstanding options and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | (a) | | | (b) | | | (c) | | | | | | Equity compensation plans approved by security holders1 | | | 11,995,712 | 2 | | | 43.20 | | | | 3,027,726 | | | | | | Equity compensation plans not approved by security holders | | | 0 | | | | 0 | | | | 0 | | | | | | Total | | | 11,995,712 | 2 | | | 43.20 | | | | 3,027,726 | |
1 | | These shares may be issued pursuant to the 2010 Plan, as it may be amended from time to time. |
2 | | Includes 3,865,684 RSUs, 198,421 DSUs and 775,595 PRSUs (assuming achievement at target), and, as applicable, dividend equivalents accrued thereon. |
| | |
| | 2019 PROXY STATEMENT 79 |
This section is provided in accordance with applicable SEC rules. Commencing January 1, 2015, each The Compensation Committee reviews director compensation. The Compensation Committee’s objectives are to compensate our directors in a manner that attracts and retains highly qualified directors and aligns their interests with those of our independent directors were entitled to receive an annual cash retainer of $80,000. Independent directors who are chairpersons of the Audit Committee,long-term shareholders.
In 2018, the Compensation Committee engaged its independent compensation advisory firm, Meridian, to assist the Compensation Committee in its review of the competitiveness and structure of the Nomination and Corporate GovernanceCompany’s compensation to independent directors. This review included a benchmark of our director compensation against 16 companies, including the companies that our Compensation Committee were entitled to additional annualexamines as a source of benchmarking data when examining the competitiveness of our executive compensation practices. After completing its review, the Compensation Committee recommended no change in director compensation for 2019. DIRECTOR COMPENSATION FOR THE 2018 FISCAL YEAR The following table provides information on the 2018 compensation of $20,000, $15,000 and $15,000, respectively, and the Company’s Lead Independent Director was entitlednon-management directors who served for all or a part of 2018. We also reimburse directors for reasonableout-of-pocket expenses attendant to an additional annual fee of $30,000. All fees are payable quarterly unless deferred as described below.their Board service. Also in 2015,
| | | | | | | | | | | | | | | | | Name | |
| Fees Earned
or Paid in Cash1 ($) |
| |
| Stock Awards2
($) |
| |
| Total
($) |
| | | | | James A. Attwood Jr. | | | — | | | | 390,000 | | | | 390,000 | | | | | | Guerrino De Luca | | | 80,000 | | | | 160,000 | | | | 240,000 | | | | | | Karen M. Hoguet | | | 105,000 | | | | 160,000 | | | | 265,000 | | | | | | Harish Manwani | | | 100,000 | | | | 160,000 | | | | 260,000 | | | | | | Robert C. Pozen | | | — | | | | 255,000 | | | | 255,000 | | | | | | David Rawlinson | | | 80,000 | | | | 160,000 | | | | 240,000 | | | | | | Javier G. Teruel | | | — | | | | 240,000 | | | | 240,000 | | | | | | Lauren Zalaznick | | | 80,000 | | | | 160,000 | | | | 240,000 | |
1 | | In 2018, each of our independent directors was entitled to receive an annual cash retainer of $80,000. In addition to this annual cash retainer, the Board Chairperson/Executive Chairman was also entitled to receive annual compensation in the amount of $150,000, with either (a) half payable in quarterly cash installments and the other half payable in quarterly installments in the form of Deferred Stock Units (“DSUs”) or (b) the entire amount payable in DSUs. Chairpersons of the Audit Committee, the Compensation Committee and the Nomination and Corporate Governance Committee were also entitled to receive an additional annual cash retainer of $25,000, $20,000 and $15,000, respectively. All cash fees are payable quarterly. |
Under | | the Directors Deferred Compensation Plan (the “DCP”), a director is eligible to defer any or all of the amount of his or her cash retainer in the form of DSUs. The number of DSUs credited to the director’s DSU account in lieu of his or her deferred fees is based on the closing trading price of a Nielsen share on the date the cash fees would otherwise be payable. |
In | | 2018, Messrs. Attwood, Pozen and Teruel elected to defer 100% of their cash retainers under the DCP. Messrs. Attwood, Pozen and Teruel deferred cash fees in the amount of $230,000, $95,000 and $80,000, respectively, and were credited in respect of such fees 8,211, 3,392 and 2,856 DSUs, respectively. Pursuant to the SEC’s disclosure rules, these DSUs are reflected in the Stock Awards column. |
2 | | In 2018, independent directors were entitled to annual equity grants in the form of DSUs with a fair market value of $160,000. The amount in this column reflects the aggregate grant date fair value of the award calculated in accordance with FASB ASC Topic 718. The awards reported in this column include (a) the annual DSU grants made to each independent director in May 2018 for services to be performed from May 2018 through April 2019 and (b) DSUs credited to the director’s deferred compensation account in 2018 for fees the director deferred under the DCP. In accordance with the SEC’s rules, dividend equivalents that accrued on the director’s DSUs are not reported above because dividends were factored into the grant date fair value of these awards. The equity awards in the form of DSUs are granted at fair market value on the grant date and vest over one year in four substantially equal quarterly installments. In the event of a director’s departure, he or she is entitled to receive a prorated portion of the next installment of his or her equity award. |
| | |
| | 2019 PROXY STATEMENT 80 |
All | | DSUs, whether received in respect of deferred cash fees or in respect of the director’s annual equity award, represent an unfunded and unsecured right to receive one Nielsen share following the director’s termination of service with Nielsen. DSUs accrue dividend equivalents in the form of additional DSUs when dividends are paid on Nielsen shares and with the same vesting schedule as the DSUs to which these are attributed. Shares to be issued in respect of DSUs will be distributed 60 days following a director’s termination of service from the Board. A director’s right to a deferred amount of compensation may not be forfeited at any time. |
Each of Ms. Hoguet and Messrs. Pozen and Teruel had an aggregate of 12,500, 28,125 and 12,500 options to acquire our shares, respectively, outstanding on December 31, 2018. As of December 31, 2018, each of Mses. Hoguet and Zalaznick and Messrs. Attwood, De Luca, Manwani, Pozen, Rawlinson and Teruel had an aggregate of 36,175, 13,831, 53,967, 6,546, 14,682, 236,964, 7,870 and 40,154 DSUs, respectively, which include DSUs received in lieu of cash Board fees, DSUs awarded annually under the equity plan and dividend equivalents accrued in the form of Deferred Stock Units (“DSUs”) with a fair market value of $135,000. ADSUs (as described above). Of these DSU represents an unfunded and unsecured right to receive one Nielsen share following the termination of the director’s services with Nielsen. The DSUs vest in four substantially equal quarterly installments. The Board of Directors previously adopted a deferred compensation planamounts, 1,351 for directors under which they may defer the receipt of their cash payments into DSUs. DSUs accrue dividend equivalents (in the form of additional DSUs). All independent directors received the foregoing compensation commencing January 1, 2015, except Mr. Attwood, who declined to receive compensation through June 30, 2015. He commenced receiving fees, including the Lead Independent Director fee,each were not vested as of July 1, 2015.December 31, 2018.
Commencing January 1, 2016, the annual fees for the Audit and Compensation Committee chairpersons have been increased to $25,000 and $20,000, respectively, and the annual DSU grant has been increased to a fair market value of $160,000. A Board Chairperson fee has also been implemented in the amount of $150,000, with half that amount to be paid in quarterly installments in cash (unless the Chairperson elects to defer such amount into DSUs) and the other half to be paid in quarterly installments in the form of DSUs.Share Ownership Guidelines
In June 2011, our Board of Directors adopted share ownership guidelines pursuant to which directors who receive fees for their servicesservice are required to maintain equity ownership in our Company equivalent to at least five times their annual cash fees. Shares beneficially owned by these directors, including vested and unvested DSUs and jointly-owned shares, are included in the calculation. These directorsDirectors are expected to meet thethese guidelines within five years from the later of the adoption of the guidelines, their appointment as a director or the commencement of the receipt of director fees. Effective January 1, 2015,February 16, 2017, the Compensation Committee setapproved changes tore-set the share ownership guidelines for Ms. Marinello (whoseall members of the Board membership began on October 31, 2014),an annual basis to reflect current compensation and Mr. Kilts (who began receiving Board fees on January 1, 2015) usingstock price levels. Using a share price of $44.73,$23.33, the price at close of market on December 31, 2014. It also reset2018, the guidelines for Mr. Teruel on that date to reflect his additional fees for 2015 as chairman of the Compensation Committee. Mr. Attwood began receiving Board fees on July 1, 2015 and his share ownership guideline was set using the share price at close of market on that date of $45.12. Effective January 1, 2016, the Compensation Committee reset the share ownership guideline for Mr. Attwood based on additional fees for 2016 as Chairman of the Board of Directors and set guidelines for Mr. Calhoun (who began receiving Board fees on January 1, 2016) and Mr. Manwani (whose Board membership began on January 22, 2015) using a share price of $46.60, the price at close of market on December 31, 2015. The guidelines and share ownership for this purpose as of February 29, 2016March 1, 2019 are set forth below (excluding Mr. Navab, who resigned from the Board effective January 11, 2016, and Ms. Zalaznick, who became a director on April 28, 2016).below. | | | | | | | | | | | Guideline Shares | | | Share Ownership | | Mr. Attwood | | | 12,000 | | | | 22,999 | | Mr. Calhoun | | | 9,000 | | | | 848,175 | | Ms. Hoguet | | | 11,000 | | | | 20,809 | | Mr. Kilts | | | 9,000 | | | | 3,340 | | Mr. Manwani | | | 9,000 | | | | 3,156 | | Ms. Marinello | | | 9,000 | | | | 6,036 | | Mr. Pozen | | | 13,000 | | | | 215,829 | | Mr. Ranadivé | | | 9,000 | | | | 16,372 | | Mr. Teruel | | | 11,000 | | | | 17,501 | |
| | | | | | | | | | | | | | Guideline Shares | | | Share Ownership | | | | | Mr. Attwood | | | 49,000 | | | | 54,204 | | | | | Mr. De Luca1 | | | 17,000 | | | | 9,248 | | | | | Ms. Hoguet | | | 23,000 | | | | 38,877 | | | | | Mr. Manwani2 | | | 21,000 | | | | 17,383 | | | | | Mr. Pozen | | | 20,000 | | | | 220,048 | | | | | Mr. Rawlinson3 | | | 17,000 | | | | 10,571 | | | | | Mr. Teruel | | | 17,000 | | | | 41,998 | | | | | Ms. Zalaznick4 | | | 17,000 | | | | 16,533 | |
| | | 1. | | 2016 PROXY STATEMENT 66
|
DIRECTOR COMPENSATION FOR THE 2015 FISCAL YEAR
The 2015 compensation of the directors who served on the Board in 2015 is displayed in the table below:
| | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash1 ($) | | | Stock Awards1 ($) | | | Total ($) | | James A. Attwood Jr. | | | — | | | | 167,500 | | | | 167,500 | | David L. Calhoun2 | | | — | | | | — | | | | — | | Karen M. Hoguet | | | — | | | | 235,000 | | | | 235,000 | | James M. Kilts | | | 80,000 | | | | 179,384 | | | | 259,384 | | Harish Manwani | | | 80,000 | | | | 171,616 | | | | 251,616 | | Kathryn Marinello | | | — | | | | 215,000 | | | | 215,000 | | Alexander Navab3 | | | — | | | | 259,384 | | | | 259,384 | | Robert C. Pozen | | | — | | | | 230,000 | | | | 230,000 | | Vivek Ranadivé | | | — | | | | 215.000 | | | | 215,000 | | Javier G. Teruel | | | 95,000 | | | | 135,000 | | | | 230,000 | |
1 | | Pursuant to the directors’ deferred compensation plan, Messrs. Attwood, Navab, Pozen and Ranadivé and Mses. Hoguet and Marinello elected to defer 100% of their cash board and committee fees in 2015 into DSUs (as described above). The number of DSUs credited to the director’s DSU account in lieu of his or her quarterly fees is based on the closing trading price of a Nielsen share on the date the cash fees would otherwise be payable. The dollar value of fees deferred into DSUs in 2015 for Mses. Hoguet and Marinello and Messrs. Pozen, Navab, Ranadivé and Attwood was $100,000, $80,000, $95,000, $80,000, $80,000 and $55,000, respectively. These amounts include regular board and committee chairmanship fees for each such director. Amounts in this column also include the dollar value of the annual DSU grant made to each executive in May 2015 (as described above) of $135,000 for servicesMr. De Luca has until 10/19/2022 to be performed from May 2015 through April 2016. DSUs were granted at fair market value on date of grant and vest in four substantially equal quarterly installments from the grant date. The dollar amount shown represents the aggregate grant date fair value of DSUs calculated in accordancecompliance with Financial Accounting Standards Codification Topic 718, Compensation – Stock Compensation. Mr. Attwood commenced receiving fees on July 1, 2015. Each of Messrs. Attwood, Kilts, Manwani and Navab also received a prorated DSU grant reflecting service from the day they began receiving board fees through April 2015.our stock ownership guidelines. |
22. | | In connectionMr. Manwani has until 1/22/2020 to be in compliance with his departure as the Company’s Chief Executive Officer and his appointment as the Executive Chairman of the Company’s Board of Directors effective January 1, 2014, the Company entered into a Transition Agreement with Mr. Calhoun, described below under “– Transition Agreement.” Other than as set forth in the Transition Agreement (which provides for the continued right of Mr. Calhoun to earn certain compensation granted to him in his position as Chief Executive Officer, as described below), Mr. Calhoun did not receive any compensation for serving as the Executive Chairman of the Board in 2015.our stock ownership guidelines. |
33. | | Resigned from the board effective January 11, 2016. |
Each of Ms. Hoguet and Messrs. Pozen, Ranadivé and Teruel had an aggregate of 31,120, 40,335, 4,941 and 34,172 optionsMr. Rawlinson has until 2/8/2022 to acquire our shares, respectively, outstanding on December 31, 2015. Also on that date, each of Mses. Hoguet and Marinello and Messrs. Attwood, Kilts, Manwani, Navab, Pozen, Ranadivé and Teruel had an aggregate of 17,576, 6,803, 3,594, 4,106, 3,923, 5,897, 17,332, 17,139 and 14,413 DSUs, respectively, which comprise DSUs received in lieu of cash board fees, DSUs awarded annually under the equity plan and dividend equivalents accrued in the form of DSUs (as described above). Of these DSU amounts, 1,533, 1,533, 1,786, 1,793, 1,747, 1,793, 1,533, 1,533 and 1,533, respectively, were not vested as of December 31, 2015. Each of Ms. Hoguet and Messrs. Pozen and Teruel had on December 31, 2015 an aggregate of 4,000, 10,364 and 3,855 of our shares, respectively, received in lieu of cash board fees or otherwise granted to them by the Company during their tenure as director. As of December 31, 2015, Mr. Calhoun held 1,643,750 options to acquire our shares all of which were vested as of that date and 11,535 shares of restricted stock which were not vested as of that date.
Transition Agreement
In connection with his departure as the Company’s Chief Executive Officer and his appointment as the Executive Chairman of the Company’s Board of Directors effective January 1, 2014, the Company entered into a Transition Agreement with Mr. Calhoun, dated as of November 5, 2013, reflecting Mr. Calhoun’s change in status.
Pursuant to the Transition Agreement, Mr. Calhoun had agreed to devote between 15% and 20% of his business time (determined on a quarterly basis) from January 1, 2014 through December 31, 2015 (or such earlier date as the Board decided to end his service) to provide guidance and advice to Mr. Barns with respect to all aspects of his duties and responsibilities as the new Chief Executive Officer of the Company (the “Additional Services”).
| | |
| | 2016 PROXY STATEMENT 67
|
Other than as set forth in the Transition Agreement (which provided for the continued right of Mr. Calhoun to earn certain compensation granted to him in his position as Chief Executive Officer, as described below), Mr. Calhoun did not receive any compensation for serving as the Executive Chairman of the Board.
Mr. Calhoun received his annual bonus with respect to the 2013 fiscal year. 25% of the award was denominated in restricted shares which vested equally on the first and second anniversaries of the date of grant based on his continued service as a non-employee member of the Board.
The LTPP performance shares granted to Mr. Calhoun on February 20, 2013 and stock options that remain outstanding and unvested as of January 1, 2014 were eligible to vest for so long as Mr. Calhoun continued to serve as the Executive Chairman of the Board (which reflects an amendment to the terms of these stock awards pursuant to the Transition Agreement, as they would otherwise have continued to be eligible to vest so long as Mr. Calhoun served as a non-employee member of the Board). The vesting of the performance shares was conditional on the Company’s achievement of the performance metrics established in the 2010 Plan and on Mr. Calhoun’s provision of the Additional Services. In accordance with the terms of the 2010 Plan, the post-termination exercise period for the stock options held by Mr. Calhoun that were granted under such plan will not commence until he ceases to serve as a non-employee member of the Board. In order to encourage Mr. Calhoun to continue to hold such options and to maintain his significant ownership stake in the Company, the stock options held by Mr. Calhoun that were granted under the Company’s 2006 Stock Acquisition and Option Plan were amended to provide that the post-termination exercise period for such options will not commence until he ceases to serve as a non-employee member of the Board.
Mr. Calhoun stepped down as Chairman effective December 31, 2015, but he continues to serve as a director. He commenced receiving director fees effective January 1, 2016.
| | |
| | 2016 PROXY STATEMENT 68
|
The following table sets forth equity compensation plan information regarding options to acquire the Company’s shares, restricted stock units, deferred stock units and performance restricted shares at December 31, 2015.
| | | | | | | | | | | | | Plan category | | Number of securities to be issued upon exercise of outstanding options and rights | | | Weighted-average exercise price of outstanding options and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | | (a) | | | (b) | | | (c) | | Equity compensation plans approved by security holders1 | | | 13,339,245 | 2 | | $ | 33.86 | | | | 10,494,263 | | Equity compensation plans not approved by security holders | | | 0 | | | | 0 | | | | 0 | | Total | | | 13,339,245 | 2 | | $ | 33.86 | | | | 10,494,263 | |
1 | | These shares may be issued pursuant to the Amended and Restated Nielsen 2010 Stock Incentive Plan, as it may be amended from time to time.in compliance with our stock ownership guidelines. |
24. | | Includes 2,209,655 restrictedMs. Zalaznick has until 4/28/2021 to be in compliance with our stock units, 87,857 deferred stock units and 433,180 performance restricted shares.ownership guidelines. |
| | |
| | 20162019 PROXY STATEMENT 69 81
|
The following table sets forth certain information regarding beneficial ownership of Nielsen’s shares as of March 15, 20161, 2019 (except as indicated in the footnotes) with respect to: | • | | each person or group of affiliated persons known by Nielsen to own beneficially more than 5% of our outstanding shares of any class, together with their addresses;
|
each person or group of affiliated persons known by Nielsen to own beneficially more than 5% of our outstanding shares of any class, together with their addresses; | • | | each of Nielsen’s directors;
|
each of Nielsen’s directors; | • | | each of Nielsen’s Named Executive Officers; and
|
each of Nielsen’s NEOs; and | • | | all directors and nominees and executive officers as a group.
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all directors and executive officers as a group. Percentage computations are based on 361,773,677355,489,127 of our shares outstanding as of March 15, 2016.1, 2019. | | | | | | | | | | | Nielsen Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | | Percentage | | Capital Research Global Investors1 | | | 36,514,968 | | | | 10.1% | | The Vanguard Group, Inc.2 | | | 28,774,411 | | | | 8.0% | | BlackRock, Inc.3 | | | 27,451,373 | | | | 7.6% | | GIC Private Limited4 | | | 21,138,887 | | | | 5.8% | | Wellington Management Group LLP5 | | | 21,070,039 | | | | 5.8% | | James A. Attwood, Jr.6 | | | 22,999 | | | | * | | David L. Calhoun7 | | | 2,575,213 | | | | * | | Karen M. Hoguet8 | | | 52,696 | | | | * | | James M. Kilts9 | | | 4,106 | | | | * | | Harish Manwani10 | | | 3,923 | | | | * | | Kathryn V. Marinello11 | | | 6,803 | | | | * | | Robert Pozen12 | | | 256,931 | | | | * | | Vivek Ranadivé13 | | | 22,080 | | | | * | | Javier G. Teruel14 | | | 52,440 | | | | * | | Lauren Zalaznick15 | | | — | | | | * | | Mitch Barns16 | | | 344,932 | | | | * | | Jamere Jackson17 | | | 40,843 | | | | * | | Steve Hasker18 | | | 156,612 | | | | * | | John Lewis19 | | | 145,092 | | | | * | | Brian West20 | | | 188,949 | | | | * | | Mary Liz Finn21 | | | 209,113 | | | | * | | All Directors and Executive Officers as a group (19 persons)22 | | | 4,350,762 | | | | 1.2% | |
| | | | | | | | | | | | | Nielsen Shares Beneficially Owned | | | | | Name of Beneficial Owner | | Number | | | Percentage | | | | | The Vanguard Group, Inc.1 | | | 38,433,819 | | | | 10.81 | % | | | | T. Rowe Price Associates, Inc. 2 | | | 31,369,132 | | | | 8.80 | % | | | | FMR LLC3 | | | 23,330,032 | | | | 6.56 | % | | | | Blackrock, Inc. 4 | | | 22,671,906 | | | | 6.40 | % | | | | Elliott Associates, L.P, Elliott International, L.P., Elliott International Capital Advisors, Inc. 5 | | | 18,000,000 | | | | 5.10 | % | | | | James A. Attwood, Jr. 6 | | | 55,318 | | | | * | | | | | Guerrino De Luca7 | | | 7,897 | | | | * | | | | | Karen M. Hoguet8 | | | 50,026 | | | | * | | | | | Harish Manwani9 | | | 16,033 | | | | * | | | | | Robert C. Pozen10 | | | 266,440 | | | | * | | | | | David Rawlinson11 | | | 9,220 | | | | * | | | | | Javier G. Teruel12 | | | 54,004 | | | | * | | | | | Lauren Zalaznick13 | | | 15,182 | | | | * | | | | | David Kenny | | | — | | | | * | | | | | Mitch Barns14 | | | 496,921 | | | | * | | | | | David J. Anderson | | | — | | | | * | | | | | Jamere Jackson | | | — | | | | * | | | | | Giovanni Tavolieri15 | | | 58,259 | | | | * | | | | | George D. Callard | | | — | | | | * | | | | | Eric J. Dale16 | | | 46,866 | | | | * | | | | | Nancy Phillips | | | 3,222 | | | | * | | | | | All Directors and Executive Officers as a group (12 persons)17 | | | 1,099,108 | | | | * | |
1 | | Based on the Schedule 13G filed by Capital Research Global Investors on February 16, 2016, Capital Research Global Investors has sole voting power and sole investment power with respect to the shares it holds in Nielsen. The address of Capital Research Global Investors is 333 South Hope Street, Los Angeles, CA 90071. |
2 | | Based on the Schedule 13G filed by The Vanguard Group, Inc. on February 11, 2016,2019, The Vanguard Group, Inc. has sole voting power with respect to 670,967411,611 of our shares, shared voting power with respect to 35,10072,503 of our shares, sole investment power with respect to 28,075,89137,956,364 of our shares and shared investment power with respect to 698,520477,455 of our shares, including 568,720299,955 shares which are also beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of collective trust accounts, and 232,047284,453 shares beneficially owned by Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of Australian investment offerings. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvem,Malvern, PA 19355. |
2 | | Based on the Schedule 13G filed by T. Rowe Price Associates, Inc. on February 14, 2019, T. Rowe Price Associates, Inc. has sole voting power with respect to 13,018,801 of our shares, sole investment power with respect to 31,314,042 of our shares and shared voting power with respect to none of our shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. |
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| | 2019 PROXY STATEMENT 82 |
3 | | Based on the Schedule 13G filed by FMR LLC on February 13, 2019, FMR LLC has sole voting power with respect to 1,751,423 of our shares, sole investment power with respect to 23,330,032 shares and shared voting and investment power with respect to none of our shares. The address of FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. |
4 | | Based on the Schedule 13G filed by BlackRock, Inc. on January 28, 2016,February 6, 2019, BlackRock, Inc. has sole voting power with respect to 24,696,44019,276,434 of our shares, and sole investment power with respect to 27,451,373all the shares it holds in Nielsen and shared voting power with respect to none of our shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
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| | 2016 PROXY STATEMENT 70
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4 | | Based on the Schedule 13G filed by GIC Private Limited on February 10, 2016, GIC Private Limited has sole voting power and sole investment power with respect to 16,448,409 of our shares and shared voting power and shared investment power with respect to 4,690,478 of our shares. The address of GIC Private Limited is 168, Robinson Road #37-01, Capital Tower, Singapore 068912. |
5 | | Based on the Schedule 13G13D filed on August 13, 2018 by Wellington Management Group LLPElliott Associates, L.P., or Elliott, Elliott International, L.P., or Elliott International, and certain related entities (collectively,Elliott International Capital Advisors Inc., or EICA, and collectively with Elliott and Elliott International, the “Wellington Entities”) on February 11, 2016, the Wellington EntitiesElliott Reporting Entities. Elliott has sole voting power and sole dispositive power with regard to 6,304,000 shares, and Elliott International and EICA each have shared voting power and shared dispositive power with regard to 11,696,000 shares. Elliott Advisors GP LLC, or Elliott Advisors, which is controlled by Paul E. Singer, or Singer, Elliott Capital Advisors, L.P., or Capital Advisors, which is controlled by Singer, and Elliott Special GP, LLC, which is controlled by Singer, or Special GP, are the general partners of Elliott. Hambledon, Inc., or Hambledon, which is also controlled by Singer, is the sole general partner of Elliott International. EICA is the investment manager for Elliott International. EICA expressly disclaims equitable ownership of and pecuniary interest in any such shares. |
The | | 6,304,000 shares owned by Elliott include (i) 2,880,000 shares underlying notional principal amount derivative agreements in the form of physically settled swaps, or Physical Derivative Agreements, through The Liverpool Limited Partnership, a Bermuda limited partnership that is a wholly-owned subsidiary of Elliott, or Liverpool, that Elliott may be deemed to beneficially own upon satisfaction of certain conditions and (ii) stock call options exercisable into 1,824,000 shares, including stock call options exercisable into 768,000 shares through Liverpool. The 11,696,000 shares beneficially owned by Elliott International and EICA include (i) 6,120,000 shares underlying Physical Derivative Agreements that Elliott International may be deemed to beneficially own upon satisfaction of certain conditions and (ii) stock call options exercisable into 2,176,000 shares. Additionally, Elliott, through Liverpool, and Elliott International have entered into notional principal amount derivative agreements in the form of cash settled swaps, or Cash Derivative Agreements, with respect to 15,519,8723,520,000 and 7,480,000 shares, respectively. The Cash Derivative Agreements provide Elliott and Elliott International with economic results that are comparable to the economic results of ourownership but do not provide them with the power to vote or direct the voting or dispose of or direct the disposition of the shares and shared investment power with respect to 21,070,039 of our shares. Thesethat are referenced in the Cash Derivative Agreements. The Elliott Reporting Entities disclaimed beneficial ownership in the shares are owned of record by clients of one or more investment advisers directly or indirectly owned by Wellington Management Group LLP.referenced in the Cash Derivative Agreements. The address of eachElliott, Singer, Elliott Advisors, Capital Advisors, Special GP and EICA is 40 West 57th Street, New York, New York 10019. The address of the Wellington EntitiesElliott International and Hambledon is 280 Congress St., Boston, MA 02210.c/o Maples & Calder, P.O. Box 309, Ugland House, South Church Street, George Town, Cayman Islands, British West Indies. |
6 | | Of the shares shown as beneficially owned, 2,99935,318 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
7 | | Of the shares shown as beneficially owned, 1,643,750 represent rights to acquire shares through the exercise of options and 2336,528 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
8 | | Of the shares shown as beneficially owned, 31,12012,500 represent rights to acquire shares through the exercise of options and 17,57633,526 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
9 | | Of the shares shown as beneficially owned, 4,10716,033 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
10 | | Of the shares shown as beneficially owned, 3,923 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
11 | | Of the shares shown as beneficially owned, 6,803 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
12 | | Of the shares shown as beneficially owned, (a) 40,33528,125 represent rights to acquire shares through the exercise of options, (b) 17,33239,051 represent rights to receive shares upon the payout of vested deferred stock units and (c) 18,600 shares are owned by a charitable foundation for which Mr. Pozen and his spouse are trustees with investment power. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
11 | | Of the shares shown as beneficially owned, 9,220 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2019 and amounts that vest within 60 days thereafter. |
12 | | Of the shares shown as beneficially owned, 12,500 represent rights to acquire shares through the exercise of options and 32,757 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 1, 2018 and amounts that vest within 60 days thereafter. |
13 | | Of the shares shown as beneficially owned, 4,941 represent rights to acquire shares through the exercise of options and 17,13915,182 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
14 | | Of the shares shown as beneficially owned, 34,172 represent rights to acquire shares through the exercise of options and 14,413 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
15 | | Ms. Zalaznick became a director on April 28, 2016. |
16 | | Of the shares shown as beneficially owned, 256,250496,921 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 1, 2019. |
15 2016 and amounts that vest within 60 days thereafter. | | Of the shares shown as beneficially owned, 35,123 represent rights to acquire shares through the exercise of options. |
16 | | Of the shares shown as beneficially owned, 46,866 represent rights to acquire shares through the exercise of options. |
17 | | Of the shares shown as beneficially owned, 16,25053,125 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
18 | | Of the shares shown as beneficially owned, 119,968 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
19 | | Of the shares shown as beneficially owned, 75,000 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
20 | | Mr. West departed the Company as of December 31, 2015. The amount shown in the table above is based on the Forms 3 and 4 filed on his behalf, the latest of which was filed on December 10, 2015. |
21 | | Of the shares shown as beneficially owned, 176,750 represent rights to acquire shares through the exercise of options. Includes amounts vested as of March 15, 2016 and amounts that vest within 60 days thereafter. |
22 | | Of the shares shown as beneficially owned, 2,566,083 represent rights to acquire shares through the exercise of options and 84,525 represent rights to receive shares upon the payout of vested deferred stock units. Includes amounts vested as of March 15, 20161, 2019 and amounts that vest within 60 days thereafter. |
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| | 20162019 PROXY STATEMENT 71 83
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Section 16(a) of the Exchange Act requires our executive officers, directors, persons who own more than 10% of a registered class of our equity securities and certain entities associated with the foregoing (the “Reporting Persons”) to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Reporting Persons are required by SEC rules to furnish us with copies of all Forms 3, 4 and 5, and amendments thereto, that they file with the SEC. Based solely on our review of copies of such reports and written representations from the Reporting Persons, we believe that the Reporting Persons complied with all Section 16(a) filing requirements during 2015.2018.
ROBINSON & COLE LLP
Our Chief Legal Officer, Eric J. Dale, was a partner at Robinson & Cole LLP before he joined Nielsen on August 1, 2015. Robinson & Cole LLP has provided in the past, and continues to provide, legal services to us in the ordinary course. Nielsen incurred approximately $1,539,076 in legal fees and related expenses in connection with its engagement of Robinson & Cole LLP in 2015. Mr. Dale has not received (and will not receive) compensation in connection with the Company’s engagement of Robinson & Cole LLP from and after his date of employment by Nielsen on August 1, 2015.
REVIEW, APPROVAL OR RATIFICATION OF CERTAIN TRANSACTIONS WITH RELATED PERSONS
We have adopted a written Related Person Transaction Policy which requires that all Related Person Transactions (defined as all transactions that would be required to be disclosed pursuant to Item 404(a) of RegulationS-K in which the Company was or is to be a participant and the amount involved exceeds $120,000 and in which any Related Person (defined as any person described in paragraph (a) of Item 404 of RegulationS-K) will have a direct or indirect material interest) be approved or ratified by a committee of the Board composed solely of independent directors who are disinterested or by the disinterested members of the Board. | | |
| | 20162019 PROXY STATEMENT 72 84
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If any shareholder wishes to propose a matter for consideration at our 20172020 annual general meeting of shareholders under the SEC’s shareholder proposal rule (Rule14a-8(e) of the Exchange Act), the proposal should be mailed by certified mail return receipt requested, to the CorporateCompany Secretary, Nielsen Holdings plc, 40 Danbury Road, Wilton, Connecticut 06897. To be eligible under the SEC’s shareholder proposal rule for inclusion in our 20172020 annual general meeting proxy statement and form of proxy, the proposal must be received by the CorporateCompany Secretary on or before December 30, 2016.11, 2019. Shareholder(s) meeting the requirements of the UK Companies Act 2006 and our articles of association are able to propose a resolution to be considered at the 20172020 annual general meeting.meeting of shareholders. In order to do so, the qualifying shareholder(s) must adhere to certain procedural requirements set out in the UK Companies Act 2006 and our articles of association, including notifying us in writing of such proposed resolution at least six weeks prior to the 20172020 annual general meeting of shareholders or, if later, the time the notice of the 20172020 annual general meeting of shareholders is given. Such written notification must identify the proposed resolution and must be authorized by the person(s) making it. The notification may be delivered in hard copy form to the CorporateCompany Secretary at 40 Danbury Road, Wilton, Connecticut 06897 or in hard copy or electronically to our Investor Relations department, whose contact information is available on our website,www.nielsen.com/investors, under Contact Us.Company Secretary at companysecretary@nielsen.com. We may decide to include such proposed resolution in the proxy statement or circulate it separately. In addition, we may decide not to circulate a resolution proposed by shareholder(s) at the meeting that would be ineffective (whether by reason of inconsistency with any enactment or our articles of association) or is otherwise defamatory, frivolous or vexatious.
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more shareholders sharing the same address by delivering a single proxy statement or a single notice addressed to those shareholders. This process, which is commonly referred to as “householding,” provides cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request, and the Company will promptly deliver, a separate copy of the notice or the proxy materials by contacting the CorporateCompany Secretary Nielsen Holdings plc, 40 Danbury Road, Wilton, Connecticut 06897; telephoneat companysecretary@nielsen.com or by calling(203) 563-3500.
Available atwww.proxyvote.com (use the16-digit control number (203) 563-3500.included on your Notice or proxy card) and atwww.nielsen.com/investors. | | |
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We filed our Annual Report on Form10-K for the year ended December 31, 20152018 with the SEC on February 19, 2016.28, 2019. All of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q10-K,10-Q and8-K, are available free of charge on our website,www.nielsen.com/investors under SEC Filings.Copies of our Annual Report on Form10-K for the year ended December 31, 2015,2018, including financial statements and schedules thereto, filed with the SEC, are also available without charge to shareholders upon written request addressed to: CorporateCompanysecretary@nielsen.com or
Company Secretary 40 Danbury Road, Wilton, Connecticut 06897
The Board of Directors does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment. By Order of the Board of Directors, Emily Epstein
Harris Black
CorporateCompany Secretary
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| | 20162019 PROXY STATEMENT 74 86
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Section 1. PURPOSE OF THE PLAN.
The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Shares from the Company on favorable terms. Section 2. MANAGEMENT AND ADMINISTRATION OF THE PLAN.
(a)Committee Composition. The Committee shall consist exclusively of one or more members of the Board, who shall be appointed by the Board.
(b)Committee Responsibilities. The Committee shall carry out the Company’s prerogatives as plan settlor,following questions and the Committee shall have the powers reserved to it in Section 14(b).
(c)U.S. Administrative Committee Composition. The U.S. Administrative Committee shall be an individual or a committee who shall be appointed by the Committee.
(d)U.S. Administrative Committee Responsibilities. The U.S. Administrative Committee shall interpret the Plan and shall be responsible for the operation and administration of the Plan, as set forth in greater detail in Section 14. The U.S. Administrative Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. The U.S. Administrative Committee’s determinations under the Plan shall be final and binding on all persons.
Section 3. SECURITIES OFFERED UNDER THE PLAN.
(a)Authorized Shares. The number of Shares available for purchase under the Plan shall be 2,000,000 Ordinary Shares (subject to adjustment pursuant to Subsection (b) below). Shares issued pursuant to the Plan may be authorized but unissued shares.
(b)Anti-Dilution Adjustments. In the event of (i) any dividend (other than regular cash dividends) or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, or other similar corporate transaction or event that affects the Shares (including a Corporate Reorganization); or (ii) unusual or nonrecurring events affecting the Company, including changes in applicable rules, rulings, regulations or other requirements, that the U.S. Administrative Committee determines, in its sole discretion, could result in substantial dilution or enlargement of the rightsanswers are intended to be granted to, or available for, Participants (any event in (i) or (ii), an “Adjustment Event”), the U.S. Administrative Committee shall, in respect of any such Adjustment Event, make such proportionate substitution or adjustment, if any, as it deems equitable, to any oraddress briefly some commonly asked questions regarding our Annual Meeting. They may not address all of (A) the number of Shares available under Section 3(a), or any other limit applicable under the Plan with respect to the number of Shares which may be purchased hereunder; (B) the number and class of Shares or other securities of the Companyquestions that may be delivered underimportant to you. Please refer to the Plan; and (C) the Purchase Price per Sharemore detailed information contained elsewhere in this proxy statement, its annexes and the documents referred to in this proxy statement for more information.
Q: | WHY AM I BEING PROVIDED WITH THESE PROXY MATERIALS? |
A: | We are providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at our Annual Meeting, and at any postponements or adjournments of the Annual Meeting. A Notice of Annual General Meeting of Shareholders required under the UK Companies Act 2006 is also included in this proxy statement. We have either (1) delivered to you a Notice and made these proxy materials available to you on the Internet or (2) delivered printed versions of these materials, including a proxy card, to you by mail. We encourage you to read the proxy statement carefully. |
Q: | WHY DID I RECEIVE AONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS? |
A: | Pursuant to SEC rules, we have elected to provide shareholders access to our proxy materials over the Internet. We believe that thise-proxy process will expedite our shareholders’ receipt of proxy materials, lower the costs, and reduce the environmental impact of our Annual Meeting. Accordingly, we sent a Notice on or about April 9, 2019 to shareholders of record entitled to vote at the Annual Meeting. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice and to download printable versions of the proxy materials or to request and receive a printed set of the proxy materials from us. Instructions on how to access the proxy materials over the Internet or to request a printed copy from us may be found in the Notice. We encourage you to read the proxy statement carefully. |
Q: | WHAT WILL I NEED IN ORDER TO ATTEND THE ANNUAL MEETING? |
A: | We will be hosting the Annual Meeting live via the Internet and in person. Any shareholder who owns shares as of the Record Date can attend the Annual Meeting live via the Internet atnielsen.onlineshareholdermeeting.com or in person at 50 Danbury Road, Wilton, CT 06897. The Annual Meeting will start at 9:00 a.m. (Eastern Time) on May 21, 2019. |
You will need your16-digit control number of Shares covered by each option underincluded on your Notice or proxy card. Instructions on how to attend and participate via the Plan which has not yet been exercised,Internet are posted atwww.proxyvote.com (before the meeting) and (D)nielsen.onlineshareholdermeeting.com (during the numerical limit of Section 9(c); provided,meeting). | The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting. |
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| | 2019 PROXY STATEMENT 87 |
| | | | | GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING | | | | |
| You must have a government-issued photo identification along with either your admission ticket (which is included in your Notice or proxy card) or proof of ownership of Nielsen shares as of the Record Date. Proof of ownership may be any of the following: |
A brokerage statement or letter from a bank or broker indicating ownership on the case of any “equity restructuring” (within the meaningRecord Date; A printout of the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (orproxy distribution email (if you received your materials electronically); or A voting instruction form. | For directions to attend the Annual Meeting in person, go to:http://ir.nielsen.com/investor-relations/shareholder-information/annual-meeting/default.aspx or contact our Company Secretary at companysecretary@nielsen.com. |
| We will be unable to admit anyone who does not present valid identification or refuses to comply with our security procedures. Cameras, videotaping equipment and other recording devices and large packages, banners, placards and signs will not be permitted at the Annual Meeting. |
Q: | WHAT IF DURING THECHECK-IN TIME OR DURING THE MEETING I HAVE TECHNICAL DIFFICULTIES OR TROUBLE ACCESSING THE VIRTUAL MEETING WEBSITE? |
A: | If you encounter any difficulties accessing the virtual meeting during thecheck-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page. |
A: | You are being asked to vote on the following proposals scheduled to be voted on at the Annual Meeting: |
| | To elect orre-elect the directors of the Board as listed herein; |
| | To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019; |
| | To reappoint Ernst & Young LLP as the Company’s UK statutory auditor to audit the Company’s UK statutory annual accounts for the year ending December 31, 2019 and to hold office from the completion of this Annual Meeting until the completion of the next annual general meeting of the shareholders at which the UK statutory accounts are presented; |
| | To authorize the Audit Committee to determine the compensation of Ernst & Young LLP in its capacity as the Company’s UK statutory auditor; |
| | To approve on anon-binding, advisory basis the compensation of the Company’s named executive officers as disclosed in the proxy statement pursuant to the SEC rules; |
| | To approve on anon-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2018, which is set out in the UK Annual Report and Accounts of the Company and this proxy statement; and |
| | To approve the Nielsen 2019 Stock Incentive Plan. |
Shareholders may also be asked to consider such other business as may properly come before the Annual Meeting or any successor pronouncement thereto)), the U.S. Administrative Committee shall make an equitableadjournments or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustment under this Section 3(b) shall be conclusive and binding for all purposes.postponement thereof. | | |
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| | | | | NIELSEN HOLDINGS PLC 2016 EMPLOYEE SHARE PURCHASE PLANGENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING | | | | |
(c)Reorganizations. Any other provision
Q: | WHO IS ENTITLED TO VOTE? |
A: | Holders of shares in the Company as of the close of business on March 22, 2019, the Record Date, may vote at the Annual Meeting. |
Q: | WHAT CONSTITUTES A QUORUM? |
A: | Generally, two shareholders present at the meeting and entitled to vote are a quorum. |
Q: | HOW MANY VOTES DO I HAVE? |
A: | You are entitled to one vote at our Annual Meeting for each share held by you at the close of business on March 22, 2019. As of March 22, 2019, the Company had 355,493,916 shares outstanding. |
Q: | HOW MANY VOTES ARE REQUIRED TO APPROVE EACH PROPOSAL? |
A: | Each proposal scheduled to be voted on at the Annual Meeting will be proposed as an ordinary resolution and requires the affirmative vote of a simple majority of the votes cast at the Annual Meeting in person or by proxy. It is important to note that votes on Proposal nos. 2, 5 and 6 arenon-binding and advisory. Therefore, the Company and/or the Board may determine to act in a manner inconsistent with the outcomes of such votes. However, the Board values the opinions of the Company’s shareholders as expressed through their advisory votes and, accordingly, the Board intends to review and consider the voting results on such resolutions. |
Q: | HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE? |
A: | Our Board recommends that you vote “For” the election of each of the nominees in Proposal 1 and “For” Proposal Nos. 2 through 7. |
Q: | HOW DO I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING? |
A: | If you are a shareholder of record on March 22, 2019, you may vote by granting a proxy: |
| • | | By Internet: You may submit your proxy by going towww.proxyvote.com (before the meeting) or atnielsen.onlineshareholdermeeting.com (during the meeting) and by following the instructions on how to complete an electronic proxy card. You will need the16-digit control number included in your Notice or proxy card in order to vote by Internet. |
| • | | By Telephone: You may submit your proxy by dialing1-800-690-6903 and by following the recorded instructions. You will need the16-digit control number included in your Notice or proxy card in order to vote by telephone. |
| • | | By Mail: You may submit your proxy by completing, signing and dating your proxy card (if you received one) where indicated and sending it back in the envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), indicate your name and title or capacity. |
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| | 2019 PROXY STATEMENT 89 |
| | | | | GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING | | | | |
For shares held in “street name,” you may vote by submitting voting instructions to your bank, broker or nominee. Internet and telephone voting facilities will close at 11:59 p.m. (Eastern Time) on May 20, 2019 for the voting of shares held by shareholders of record or held in “street name” and 11:59 p.m. (Eastern Time) on May 16, 2019 for the Plan notwithstanding, in the eventvoting of a Corporate Reorganization, the Plan may be continued or assumed by the surviving corporation or its parent corporation. If such acquirer refuses to continue or assume the Plan, then,shares held through Nielsen’s 401(k) plan. Mailed proxy cards with respect to each Purchase Period thenshares held by shareholders of record or in progress for which the Purchase Date (A) would occur after the effective time of such Corporate Reorganization, the U.S. Administrative Committee shall set a new Purchase Date, which Purchase Date shall“street name” must be on a date selected by the U.S. Administrative Committee in its discretion that occurs prior to the effective time of the Corporate Reorganization, and the applicable Purchase Period(s) shall terminate on such new Purchase Date, and (B)received no later than 9:00 a.m. (Eastern Time) May 17, 2019. Mailed proxy cards with respect to each Purchase Period thenshares held through Nielsen’s 401(k) plan must be received no later than 11:59 p.m. (Eastern Time) May 16, 2019. Q: | MAY I VOTE AT THE ANNUAL MEETING RATHER THAN BY PROXY? |
A: | Although we encourage you to vote through the Internet or the telephone or to complete and return a proxy card (if you received one) by mail prior to the Annual Meeting to ensure that your vote is counted, you can attend the Annual Meeting online or in person and vote your shares during the meeting, unless you hold your shares through Nielsen’s 401(k) plan, which cannot be voted at the Annual Meeting. |
If you plan to vote in progress for whichperson, bring your printed proxy card if you received one by mail. Otherwise, the Purchase Date would occur priorCompany will give shareholders of record a ballot at the Annual Meeting. If you are a beneficial owner, you must obtain a legal proxy from the organization that holds your shares if you wish to attend the effectiveAnnual Meeting and vote in person. Q: | WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE OR MORE THAN ONE SET OF PROXY MATERIALS ON OR ABOUT THE SAME TIME? |
A: | It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each proxy card (if you received one) or, if you vote by Internet or telephone, vote once for each Notice or proxy card you receive. |
Q: | MAY I CHANGE MY VOTE OR REVOKE MY PROXY? |
A: | Yes. Whether you have voted by Internet, telephone or mail, if you are a shareholder of record, you may change your vote and revoke your proxy by: |
Voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m. (Eastern Time) on May 20, 2019; Submitting a properly signed proxy card (if you received one) with a later date that is received no later than 9:00 a.m. (Eastern Time) on May 17, 2019; Sending a written statement to that effect to our Company Secretary, provided such Corporate Reorganization,statement is received no later than 9:00 a.m. (Eastern Time) on May 17, 2019; or Attending the U.S. Administrative CommitteeAnnual Meeting, revoking your proxy and voting in person or online. If you hold shares through the Nielsen 401(k) plan, you may set a new Purchase Date if the U.S. Administrative Committee, in its discretion, deems it administratively appropriate in order to facilitate the consummation of such Corporate Reorganization, which Purchase Date shall be on a date selectedchange your vote and revoke your proxy by the U.S. Administrative Committee that occurs prior to the effective timeany of the Corporate Reorganization, and any the applicable Purchase Period(s) shall terminatefirst three methods listed above if you do so no later than 11:59 p.m. (Eastern Time) on such Purchase Date; provided, that, in all events any Offering Period(s) then in progress shall terminate on the last Purchase Date that occurs prior to the effective time of the Corporate Reorganization. Section 4. ENROLLMENT AND PARTICIPATION.
(a)Offering Periods.
(i)Base Offering Periods. The U.S. Administrative Committee may establish Offering Periods of such frequency and duration as it may from time to time determine as appropriate (the “Base Offering Periods”);provided, that a Base Offering Period shall in no event be longer than 27 months (or such other period as may be imposed under applicable tax law). The Base Offering Periods are intended to qualify under Code Section 423. Unless changed by the U.S. Administrative Committee, each Offering Period shall contain one single Purchase Period, which shall run concurrently with the Offering Period. The U.S. Administrative Committee may determine that the first Base Offering Period applicable to the Eligible Employees of a new Participating Company shall commence on any date specified by the U.S. Administrative Committee. The U.S. Administrative Committee shall determine when the first Base Offering Period will commence.
(ii)Additional Offering Periods. At the discretion of the U.S. Administrative Committee, additional Offering Periods may be conducted under the Plan (the “Additional Offering Periods”). Such Additional Offering Periods may, but need not, qualify under Code Section 423. The U.S. Administrative Committee shall determine the commencement and duration of each Additional Offering Period, and Additional Offering Periods may be consecutiveMay 16, 2019. You cannot, however, revoke or overlapping. The other terms and conditions of each Additional Offering Period shall be those set forth in this Plan, with such changes or additional features as the U.S. Administrative Committee determines necessary to comply with applicable local law.
(iii)Separate Offerings. Each Base Offering Period and Additional Offering Period conducted under the Plan is intended to constitute a separate “offering” for purposes of Code Section 423.
(iv)Equal Rights and Privileges. To the extent an Offering Period is intended to qualify under Code Section 423, all participants in such Offering Period shall have the same rights and privilegeschange your proxy with respect to their participationshares held through the Nielsen 401(k) plan after that date, and you cannot vote those shares at the Annual Meeting.
If you hold shares in such Offering Period“street name,” you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy by attending the Annual Meeting online or in accordance with Code Section 423 and the regulations thereunder except for differences that may be mandated by local law and are consistent with the requirements of Code Section 423(b)(5). Notwithstanding the foregoing, Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering Period if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering Period to violate Section 423 of the Code. In the case of an Offering Period not intended to qualify under Code Section 423, an Eligible Employee may be excluded from participation in the Plan or an Offering if the U.S. Administrative Committee has determined that participation of such Eligible Employee is not advisable or practicable. (b)Purchase Periods. Unless changed by the U.S. Administrative Committee, the Plan shall operate such that Purchase Periods shall last three calendar months and shall run concurrently and continuously with the Offering Periods in which they occur. The U.S. Administrative Committee may determine that the first Purchase Period applicable to the Eligible Employees of a new Participating Company shall commence on any date specified by the U.S. Administrative Committee.person.
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| | | | | NIELSEN HOLDINGS PLC 2016 EMPLOYEE SHARE PURCHASE PLANGENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING | | | | |
We will honor the proxy with the latest date. However, no revocation will be effective unless we receive notice of such revocation at or prior to the deadlines mentioned above. For those shareholders who submit a proxy electronically or by telephone, the date on which the proxy is submitted in accordance with the instructions listed on the Notice or the proxy card is the date of the proxy. A: | Abstentions: Votes may be cast in favor of or against or you may abstain from voting. If you intend to abstain from voting for any director nominee or any other proposal, you will need to check the abstention box for such director nominee or proposal, in which case your vote will not have any effect on the outcome of the election of such director nominee or on the outcome of Proposals Nos.2-6. In determining whether Proposal No. 7 receives the requisite number of affirmative votes, abstentions are considered “votes cast” under current NYSE rules and therefore will have the same effect as a vote “against” this proposal. |
BrokerNon-Votes: Brokernon-votes occur when shares held by a bank, broker or other nominee are not voted with respect to a proposal because (1) the bank, broker or other nominee has not received voting instructions from the shareholder who beneficially owns the shares and (2) the bank, broker or other nominee lacks the authority to vote the shares at its/his/her discretion. Proposals Nos. 1, 5, 6 and 7 are considered to benon-routine matters under NYSE rules. Accordingly, any bank, broker or other nominee holding your shares will not be permitted to vote on those proposals at the meeting without receiving voting instructions from you. If you sign and submit your proxy card (if you received one) without giving specific voting instructions, this will be construed as an instruction to vote the shares as recommended by the Board, so your shares will be voted “FOR” each director nominee listed herein (Proposal No. 1), “FOR” Proposal Nos. 2 through 7, and in accordance with the discretion of the holders of the proxy with respect to any other matters that may be voted on. Brokernon-votes will not affect the voting results. Abstentions will not affect the voting results of Proposals Nos.1-6, but will have the same effect as a vote “against” Proposal No. 7. Q: | WHO WILL COUNT THE VOTES? |
A: | Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election. |
Q: | COULD OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING? |
A: | At the date this proxy statement went to press, we did not know of any matters to be raised at the Annual Meeting other than those referred to in this proxy statement. |
If other matters are properly presented to be considered and voted on at the Annual Meeting for consideration and if you are a shareholder of record and have submitted a proxy card (if you received one), the persons named in your proxy card will have the discretion to vote on those matters for you. Q: | WHO IS SOLICITING MY PROXY? |
A: | Proxies are being solicited by and on behalf of our Board. Proxies may be solicited by directors, officers or employees (for no additional compensation) in person or by telephone, internet and facsimile transmission. In addition, we have hired Morrow Sodali LLC to assist in soliciting proxies. |
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| | 2019 PROXY STATEMENT 91 |
| | | | | GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING | | | | |
Q: | WHO WILL PAY FOR THE COST OF THIS PROXY SOLICITATION? |
A: | We will pay the cost of soliciting proxies. We expect to pay approximately $10,000 plus reasonableout-of-pocket expenses for Morrow Sodali LLC to assist in soliciting proxies. |
(c)EnrollmentCOMPANY INFORMATION AND MAILING ADDRESS
Nielsen Holdings plc is a public limited company incorporated under the laws of England and Wales. Our shares trade in U.S. dollars on the NYSE under the symbol “NLSN.” Our principal executive offices in the United States are located at 85 Broad Street, New York, NY 10004. Our telephone number is 1(646) 654-5000. Our website address iswww.nielsen.com. Information on our website is not incorporated into this proxy statement. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2019 This proxy statement, our annual report for the year ended December 31, 2018 (the Annual Report onForm 10-K for the year ended December 31, 2018), our UK Annual Report and Accounts for the year ended December 31, 2018, which consists of the UK statutory accounts, the UK statutory directors’ report, the UK statutory directors’ compensation report, the UK statutory strategic report and the UK statutory auditor’s report and related information prepared in connection with the Annual Meeting are available atwww.proxyvote.com andwww.nielsen.com/investors. You will need the16-digit control number included on your Notice or proxy card in order to access the proxy materials onwww.proxyvote.com. In the caseaddition, if you have not received a copy of any individual who qualifies asour proxy materials and would like one, you may download an Eligible Employee on the first dayelectronic copy of any Offering Period, heour proxy materials or she may electrequest a paper copy atwww.proxyvote.com, or by telephone at1-800-579-1639 or by email to becomesendmaterial@proxyvote.com. If requesting materials by email, please send a Participant on such day by filing the prescribed enrollment formblank email with the Company. The enrollment form shall be filed at16-digit control number included on your Notice. You will also have the prescribed location at least 10 business days (or such other period as the U.S. Administrative Committeeopportunity to request paper or its designee may designate) prior to such day or during such enrollment period prescribed by the U.S. Administrative Committee in its discretion. (d)Durationemail copies of Participation. Once enrolled in the Plan, a Participant shall continue to participate in the Plan and will automatically participate in successive Offering Periods without action or election until he or she:
(i) Reaches the end of the Offering Period or Purchase Period, as applicable, in which his or her employee contributions were discontinued under Section 5(c) or Section 9(b);
(ii) Withdraws from the Plan under Section 6(a); or
(iii) Ceases to be an Eligible Employee.
A Participant whose employee contributions were discontinued automatically under Section 9(b) shall automatically resume participation at the beginning of the earliest Purchase Period ending in the next calendar year, if he or she then is an Eligible Employee. Inour proxy materials for all other cases, a former Participant may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in Section 4(c) above.
(e)Applicable Offering Period. For purposes of calculating the Purchase Price under Section 8(b), the applicable Offering Period shall be determined as follows:
(i) Once a Participant is enrolled in the Plan for an Offering Period, such Offering Period shall continue to apply to him or her until the earliest of (A) the end of such Offering Period, (B) the end of his or her participation under Subsection (d) above or (C) re-enrollment for a subsequent Offering Period under Paragraph (ii) or (iii) below.
(ii) Solely in the event that a Participant is enrolled in an Offering Period in which the Purchase Price may be determined based upon the Fair Market Value of a Share on the first day of such Offering Period, if the Fair Market Value of a Share on the first trading day of such Offering Period is higher than the Fair Market Value of a Share on the first trading day of the immediately subsequent Offering Period and the Purchase Price in such immediately subsequent Offering Period may also be determined based upon the Fair Market Value of a Share on the first day of such immediately subsequent Offering Period, the Participant shall automatically be re-enrolled for such subsequent Offering Period and the amount in the Participant’s Plan Account at the time of such re-enrollment in the immediately subsequent Offering Period will instead be used to purchase Shares on the first Purchase Date in such immediately subsequent Offering Period.
(iii) When a Participant reaches the end of an Offering Period but his or her participation is to continue, then such Participant shall automatically be re-enrolled for the Offering Period that commences immediately after the end of the prior Offering Period.
Section 5. EMPLOYEE CONTRIBUTIONS.
(a)Commencement of Payroll Deductions. A Participant may purchase Shares under the Plan solely by means of payroll deductions. Payroll deductions shall commence on the first pay day identified by the U.S. Administrative Committee for such purpose, after the Company has received the prescribed enrollment form.
(b)Amount of Payroll Deductions. An Eligible Employee shall designate on the prescribed enrollment form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Shares. Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 10%.
(c)Discontinuing Payroll Deductions. If a Participant wishes to discontinue his or her payroll withholding deductions, such Participant may do so by filing a new enrollment form with the Company at the prescribed location at any time. The withholding shall be suspended effective as soon as reasonably practicable after the Company has received such form but the amount then credited to the Participant’s Plan Account with respect to such Offering Period shall be used to purchase Shares on the next Purchase Date in accordance with Section 8 below. (In addition, employee contributions may be discontinued automatically pursuant to Section 9(b).)future shareholder meetings.
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(d)Increasing Withholding Rate. If a Participant wishesThis report sets out the relevant disclosures in relation to increase his or her rate of payroll withholding, such Participant may do so by filing a new enrollment form with the Company during periods of time or windows authorized by the U.S. Administrative Committee for such purpose. The new withholding rate may be effective on the first day of the next-upcoming Purchase Period, provided that the Participant has filed the enrollment form with the Company at the prescribed location at least 10 business days (or such other period as the U.S. Administrative Committee or its designee may designate) prior to such day. The new withholding rate may be any whole percentage of the Participant’s Compensation, but not less than 1% nor more than 10%. For the avoidance of doubt, an increase in a Participant’s rate of payroll withholding may not take effect during a Purchase Period that is already in progress.
Section 6. WITHDRAWAL FROM THE PLAN.
(a)Withdrawal. A Participant may elect to withdraw from the Plan (or, if applicable, from an Offering Period) by filing the prescribed form with the Company at the prescribed location at any time before the deadline set by the U.S. Administrative Committee before a Purchase Date. As soon as reasonably practicable thereafter, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account with respect to such Offering Period shall be refunded to him or her in cash, without interest. No partial withdrawals from an Offering Period shall be permitted.
(b)Re-Enrollment After Withdrawal. A former Participant who has withdrawn from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 4(c). Re-enrollment may be effective only at the commencement of an Offering Period.
Section 7. CHANGE IN EMPLOYMENT STATUS.
(a)Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under Section 6(a). (A transfer from one Participating Company to another shall not be treated as a termination of employment, provided that each Participating Company is then participating in the same Offering Period.)
(b)Leave of Absence. For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on a military leave, a sick leave or anotherbona fide leave of absence, if the leave was approved in writing by the Company or the Participating Company that employs such participant. Employment, however, shall be deemed to terminate on the first day following three months after the Participant goes on a leave, unless a contract or statute guarantees his or her right to return to work. Employment shall be deemed to terminate in any event when the approved leave ends, unless the Participant immediately returns to work.
(c)Death. In the event of the Participant’s death during an Offering Period, the amount credited to his or her Plan Account shall be paid to a beneficiary designated by him or her for this purpose on the prescribed form or, if none, to the Participant’s estate. Such form shall be valid only if it was filed with the Company at the prescribed location before the Participant’s death.
Section 8. PLAN ACCOUNTS AND PURCHASE OF SHARES.
(a)Plan Accounts. The Company shall maintain a Plan Account on its books in the name of each Participant. Whenever an amount is deducted from the Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust funds and may be commingled with the Company’s general assets and applied to general corporate purposes. No interest shall be credited to Plan Accounts.
(b)Purchase Price. Except to the extent provided otherwise by the U.S. Administrative Committee for a specific Offering Period or Periods, the Purchase Price for each Share purchased on a Purchase Date shall be 95% of the Fair Market Value of such Share on the Purchase Date. Notwithstanding the foregoing, the U.S. Administrative Committee shall have the authority and discretion to set different Purchase Price methodologies for individual Offering Periods;provided, that in all events the Purchase Price shall not be less than the lesser of:
(i) 85% of the Fair Market Value of such Share on the first day of the applicable Offering Period (as determined under Section 4(e)); or
(ii) 85% of the Fair Market Value of such Share on the Purchase Date.
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(c)Number of Shares Purchased. On each Purchase Date, each Participant shall be deemed to have elected to purchase the number of Shares calculated in accordance with this Section 8(c), unless the Participant has previously elected to withdraw from the Offering Period in accordance with Section 6(a). The amount then in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of Shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The foregoing number of Shares purchasable by a Participant are subject to the limitations set forth in Section 9. The U.S. Administrative Committee may determine with respect to all Participants that any fractional Share, as calculated under this Section 8(c), shall be rounded down to the next lower whole Share.
(d)Available Shares Insufficient. In the event that the aggregate number of Shares that all Participants elect to purchase with respect to a particular Purchase Period exceeds (i) the number of Shares that were available under Section 3 above for sale under the Plan on the first day of the applicable Offering Period, or (ii) the number of Shares that were available under Section 3 above for sale under the Plan on the applicable Purchase Date, then the number of Shares to which each Participant is entitled shall be determined by multiplying the number of Shares available for issuance by a fraction. The numerator of such fraction is the number of Shares that such Participant has elected to purchase, and the denominator of such fraction is the number of Shares that all Participants have elected to purchase. The Company may make a pro rata allocation of the Shares available on the first day of an applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s shareholders subsequent to such date. In the event of a pro-rata allocation under this Section 8(d), the U.S. Administrative Committee may determine in its discretion to continue all Offering Periods then in effect or terminate all Offering Periods then in effect pursuant to Section 14.
(e)Issuance of Shares. The Shares purchased by a Participant under the Plan may be registered in the name of such Participant. The Company may permit or require that Shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that Shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such Shares. (The two preceding sentences shall apply whether or not the Participant is required to pay income tax in the United States.) Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will only have the rights of an unsecured creditor with respect to such Shares, and no right to vote or receive dividends or any other rights as a shareholder will exist with respect to such Shares.
(f)Tax Withholding. To the extent required by applicable federal, state, local or foreign law, a Participant shall make arrangements satisfactory to the Companydirectors’ remuneration for the satisfaction of any withholding tax obligations that arise in connection with the Plan.year ended December 31, 2018. The Company shall not be required to issue any Shares under the Plan until such obligations, if any, are satisfied. In addition, the Company may, but will not be obligated to, withhold from the proceeds of the sale of Shares or any other method of withholding the Company deems appropriate to the extent permitted by U.S. Treasury RegulationSection 1.423-2(f).
(g)Unused Cash Balances. Subject to the final sentence of Section 8(c), an amount remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional Share shall be carried over in the Participant’s Plan Account to the next Purchase Period. Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole Shares that could not be purchased by reason of Section 8(c) or Section 8(d) above or Section 9(b) shall be refunded to the Participant in cash, without interest.
(h)Shareholder Approval. Any other provision of the Plan notwithstanding, no Shares shall be purchased under the Plan unless and until the Company’s shareholders have approved the adoption of the Plan.
Section 9. PLAN LIMITATIONS.
(a)Five Percent Limit. Any other provision of the Plan notwithstanding, no Participant shall be granted a right to purchase Shares under the Plan if such Participant, immediately after his or her election to purchase such Shares, would own Shares and would hold outstanding options to purchase Shares possessing more than 5% of the total combined voting power or value of all classes of the capital shares of the Company or any Parent or Subsidiary of the Company, determined in accordance with applicable tax law.
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(b)Dollar Limit. Any other provision of the Plan notwithstanding, no Participant shall purchase Shares with a Fair Market Value in excess of the following limit:
(i) In the case of Shares purchased during an Offering Period that commenced in the current calendar year, the limit shall be equal to (A) $25,000 minus (B) the Fair Market Value of the Shares that the Participant previously purchased under the Plan in the current calendar year.
(ii) In the case of Shares purchased during an Offering Period that commenced in the immediately preceding calendar year, the limit shall be equal to (A) $50,000 minus (B) the Fair Market Value of the Shares that the Participant previously purchased under the Plan in the current calendar year and in the immediately preceding calendar year.
(iii) In the case of Shares purchased during an Offering Period that commenced in the second calendar year before the current calendar year, the limit shall be equal to (A) $75,000 minus (B) the Fair Market Value of the Shares that the Participant previously purchased under the Plan in the current calendar year and in the immediately preceding two calendar years.
For all purposes under this Section 9(b), (A) the Fair Market Value of Shares shall be determined as of the beginning of the Offering Period in which such Shares are purchased; and (B) this Plan shall be aggregated with any other employee share purchase plans of the Company (or any Parent or Subsidiary of the Company) described in Code Section 423. If a Participant is precluded by this Section 9(b) from purchasing additional Shares under the Plan, then his or her employee contributions shall automatically be discontinued and shall automatically resume at the beginning of the earliest Purchase Period ending in the next calendar year (if he or she then is an Eligible Employee).
(c)Purchase Period Share Purchase Limit. Any other provision of the Plan notwithstanding, no Participant shall purchase more than 850 Shares with respect to any Purchase Period;provided, that the U.S. Administrative Committee may, for future Offering Periods, increase or decrease in its absolute discretion, the maximum number of Shares that a Participant may purchase during each Purchase Period.
Section 10. RIGHTS NOT TRANSFERABLE.
The rights of any Participant under the Plan, or any Participant’s interest in any Shares or cash to which he or she may be entitled under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of law, or in any other manner other than by beneficiary designation or the laws of descent and distribution. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interest under the Plan, other than by beneficiary designation or the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 6(a).
If permitted by the U.S. Administrative Committee, a Participant may file a designation of a beneficiary who is to receive any Shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to a Purchase Date on which the option is exercised but prior to delivery to such Participant of such Shares and cash. In addition, if permitted by the U.S. Administrative Committee, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
Section 11. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of any Participant, which rights are hereby expressly reserved by each, to terminate the employment of such Participant at any time and for any reason, with or without cause, in each case subject to the requirements of applicable law.
Section 12. NO RIGHTS AS A SHAREHOLDER.
A Participant shall have no rights as a shareholder with respect to any Shares that he or she may have a right to purchase under the Plan until such Shares have been purchased on the applicable Purchase Date and until the Participantreport has been registered as the holder of such Shares on the books and records of the Company.
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Section 13. SECURITIES LAW REQUIREMENTS.
Shares shall not be issued, and the Company shall have no liability for failure to issue Shares, under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.
Section 14. ADMINISTRATION, AMENDMENT OR DISCONTINUANCE.
(a)Administrative Prerogatives. Subject to the provisions of Section 2(a), the Plan will be administered by the U.S. Administrative Committee, and the U.S. Administrative Committee will be constituted to comply with all applicable laws. The U.S. Administrative Committee will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan, to designate separate Offering Periods, to designate Subsidiaries as Participating Companies, to determine eligibility, to adjudicate all disputed claims filed under the Plan, to establish, amend, suspend, or waive any rules and regulations and appoint such agents as the U.S. Administrative Committee shall deem appropriate for the proper administration of the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and separate Offering Periods as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which separate Offering Periods may take precedence over other provisions of this Plan, with the exception of Section 3(a) hereof, but unless otherwise superseded by the terms of such separate Offering Periods, the provisions of this Plan shall govern the operation of each such separate Offering Period). Without limiting the generality of the foregoing, the U.S. Administrative Committee is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of contributions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold payroll contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share certificates that vary with applicable local requirements. The U.S. Administrative Committee also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering Period to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering Period to employees resident solely in the U.S. Every finding, decision and determination made by the U.S. Administrative Committee will, to the full extent permitted by law, be final and binding upon all parties.
(b)General Rule on Amendments and Termination. The Committee, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated, the Committee, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of Shares on the next Purchase Date, or may elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 3(b) or Section 3(c)). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts which have not been used to purchase Shares will be returned to the Participants (without interest thereon, except as otherwise required under local laws) as soon as administratively practicable.
(c)U.S. Administrative Committee’s Discretion. Without shareholder consent and without limiting Section 14(b), the U.S. Administrative Committee will be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as it determines in its sole discretion to be advisable and which are consistent with the Plan.
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(d)Accounting Consideration. In the event the Committee determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Committee may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
(i) Amending the Plan to conform with the safe harbor definition under Financial Accounting Standards Board Accounting Standards Codification Topic 718, including with respect to an Offering Period underway at the time;
(ii) Altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;provided,however, that the per-Share Purchase Price shall never be less than the par value of a Share;
(iii) Shortening any Offering Period by setting a new Purchase Date, including an Offering Period underway at the time of the Committee’s action;
(iv) Reducing the maximum percentage of Compensation a Participant may elect to set aside as payroll deductions; and
(v) Reducing the maximum number of Shares a Participant may purchase during any Purchase Period.
Such modifications or amendments will not require shareholder approval or the consent of any Participants.
(e)Shareholder Approval. Except as provided in Section 3, any increase in the aggregate number of Shares that may be issued under the Plan shall be subject to the approval of the Company’s shareholders. In addition, any other amendment of the Plan shall be subject to the approval of the Company’s shareholders to the extent required under Section 14(e) or by any applicable law or regulation.
(f)Plan Termination. The Plan shall terminate automatically 10 years after its adoption by the Board, unless (i) the Plan is extended by the Board and (ii) the extension is approved within 12 months by a vote of the shareholders of the Company.
(g)Governing Law. The Plan shall be governed by, and construedprepared in accordance with the lawsrequirements of the State of New York without regard to conflicts of laws, exceptU.K. Large and Medium sized Companies and Groups (Accounts & Reports) (Amendment) Regulations 2013 (the “Regulations”) which apply to the extent that the matter in question is mandatorily required to be governed by the laws of England and Wales, in which case it will be governed by the applicable provisionCompany. The relevant sections of the laws of England and Wales.report have been audited by Ernst & Young LLP.
(h)Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
(i)Designation of Participating Companies and Alternative Offering Periods. Without limiting the generality of Section 14(a), the U.S. Administrative Committee shall have the power and authority to designate additional Subsidiaries as Participating Companies from time to time without additional shareholder approval so long as any such entity so designated satisfies the definition of Subsidiary before such designation is made.
(i) Without limiting the generality of Section 4(a), the U.S. Administrative Committee shall have the power and authority to promulgate distinct supplements or appendices to the Plan for each different foreign jurisdiction in which a Participating Company is located as are needed to comply with local law or to satisfy any applicable data privacy requirements. Furthermore, the U.S. Administrative Committee may establish separate Offering Periods for specific Participating Subsidiaries which shall not be intended to qualify under Section 423 of the Code.
(ii) The U.S. Administrative Committee shall have the power and authority either to exclude from participation in any given Offering Period Eligible Employees who are subject to Section 16(b) of the Securities Act of 1933, as amended, or to establish separate Offering Periods from which Eligible Employees who are subject to Section 16(b) of the Securities Act of 1933, as amended, shall be excluded from participation.
Section 15. DATA PRIVACY.
The Company holds information about each Participant relating to his employment, the nature and amount of his compensation, bank details, and other personal details and the fact and conditions of each Participant’s participation in the Plan. The Company is the controller of each Participant’s personal data and is the only person authorized to process that data and is responsible for maintaining adequate security with regard to it. As the Company is part of a group of companies
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operating internationally, it may be necessary for the Company to make the details referred to above available to: (a) other companies within the Company that may be located outside the European Economic Area (“EEA”) or such other geographical location in which a Participant is employed where there may be no legislation concerning an individual’s rights concerning personal data including other countries which may not have data protection rules equivalent to those prevailing in the EEA; (b) third party advisers, agents and administrators of the Plan; (c) potential purchasers of the Company and/or (d) the regulatory authorities. Any personal data made available by the Company to the parties referred to above in (a), (b), (c) or (d) in relation to the Plan will only be for the purpose of administration and management of the plan by the Company, on behalf of the Company. each Participant’s information will not, under any circumstances, be made available to any party other the parties listed above under (a), (b), (c) or (d). By enrolling in the Plan, each Participant confirms that he or she hereby authorizes and directs the Company to disclose to the parties as described above under (a), (b), (c) or (d) any of the above data that is deemed necessary to facilitate the administration of the Plan, understands and authorizes the Company to store and transmit such data in electronic form and confirms that the Company has notified the Participant of his entitlement to reasonable access to the personal data held about the Participant and of his rights to rectify any inaccuracies in that data.
Section 16. DEFINITIONS.
(a) “Board” means the Board of Directors of the Company, as constituted from time to time.
(b) “Code” means the Internal Revenue Code of 1986, as amended.
(c) “Committee” means a committee of the Board, as described in Section 2.
(d) “Company” means Nielsen Holdings plc, a public limited company of England and Wales.
(e) “Compensation” means the total base salary paid in cash to a Participant by a Participating Company.
(f) “Corporate Reorganization” means:
(i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization; or
(ii) The sale, transfer or other disposition of all or substantially all of the Company’s shares or assets or the complete liquidation or dissolution of the Company.
(g) “Eligible Employee” means a common law employee of a Participating Company. The foregoing notwithstanding, an individual shall not be considered an Eligible Employee if his or her participation in the Plan is prohibited by the law of any country that has jurisdiction over him or her. Notwithstanding any provision to the contrary, a Participating Company’s classification of an individual’s status as a common-law employee of the Participating Company for purposes of inclusion or exclusion from participation in the Plan shall be conclusive and binding, without regard to the classification or reclassification of an individual for any reason, whether initiated by a court, governmental agency or otherwise.
(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(i) “Fair Market Value” means, on a given date, the closing sales price of the Shares reported on the primary exchange on which the Shares are listed and traded on such date, or, if the applicable date was not a trading day, on the last trading day prior to the applicable date. If the Shares are no longer traded on a public U.S. securities market, the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. The Committee’s determination shall be conclusive and binding on all persons.
(j) “Ordinary Shares” means ordinary shares of the Company,€0.07 par value.
(k) “Offering Period” means any period, including Base Offering Periods and Additional Offering Periods, with respect to which the right to purchase Shares may be granted under the Plan, as determined pursuant to Section 4(a).
(l) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(m) “Participant” means an Eligible Employee who participates in the Plan, as provided in Section 4.
(n) “Participating Company” means (i) the Company and (ii) each present or future Subsidiary designated by the U.S. Administrative Committee as a Participating Company.
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(o) “Plan” means this Nielsen Holdings plc 2016 Employee Share Purchase Plan, as it may be amended from time to time.
(p) “Plan Account” means the account established for each Participant pursuant to Section 8(a).
(q) “Purchase Date” means the last trading day of a Purchase Period.
(r) “Purchase Period” means a period within an Offering Period (which for an Offering Period with only a single Purchase Period would be coterminous with the Offering Period) during which contributions may be made toward the purchase of Shares under the Plan, as determined pursuant to Section 4(b).
(s) “Purchase Price” means the price at which Participants may purchase Shares under the Plan, as determined pursuant to Section 8(b), which, for theFor avoidance of doubt shall never be less than the par value of a Share on a per-Share basis.
(t) “Shares” means the Ordinary Shares of the Company.
(u) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporationplease note that in the unbroken chain owns shares possessing 50% or moreU.S. the term “compensation” is used instead of “remuneration”.
The Annual Report on Directors’ Compensation is divided into the total combined voting power of all classes of shares in one of the other corporations in such chain. (v) “U.S. Administrative Committee” means the committee appointed by the Committee, as described in Section 2, which shall be responsible for the operation and administration of the Plan.following sections:
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| | 2016 PROXY STATEMENT A-10
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This Directors’ Compensation Report contains theThe Statement from the Compensation Committee Chairperson(“Committee”) Chairperson; and the
The Annual Report on Directors’ Compensation.Compensation which sets out Director compensation for 2018. The Annual Report on Directors’ Compensation together with the statement from the Committee Chairperson is subject to an advisory vote at the Annual Meeting. STATEMENT FROM THE COMPENSATION COMMITTEE CHAIRPERSON Compensation Philosophy Executive Directors Nielsen’s executive compensation program which applies to our Executive Director, MitchDirectors, (Mitch Barns as Chief Executive Officer (“CEO”), until December 2, 2018 and David Kenny as CEO from December 3, 2018) is designed to incentincentivise and reward the executive team to deliver sustained financial performance and long-term value to shareholders. The primary objectives of Nielsen’s executive compensation program are to: attract and retain top executive talenttalent; motivate executives to accomplish short-term business performance goals that drive planned long-term business objectives and deliver long-term sustainable value to shareholdersshareholders; align executive interests and rewards with long-term shareholder valuevalue; and differentiate rewards based on quantitative assessments of business financial performance and individual contributions towards core objectivesobjectives. Non-Executive Directors Our compensation program forNon-Executive Directors is designed to attract and retain Directors who possess the requisite knowledge, skills, and experience to support and oversee the Company. Our policy is to deliver a substantial portion of Directors’ compensation in the form of Deferred Stock Units (“DSUs”) in order to align rewards to Nielsen’s long-term performance and create shareholder value. A DSU represents an unfunded and unsecured right to receive one Nielsen share following the termination of the Director’s services. Each Director is required to acquire and maintain a threshold level of share ownership. Our share ownership guidelines for Directors are described in our 2016 Proxy Statement under “Director Compensation.”more detail on pageA-9 of this report. 20152018 Compensation Program Changes and Highlights
Executive Director Program Our Directors’ Compensation Policy applies to our Executive Director,Directors, as CEO. In 2015 we consulted extensively with shareholders. The outreach discussions were wide-ranging, constructive, and yielded useful feedback on our compensation programs and their disclosure. We received 98% shareholder approval of our Executive Director compensation programs in 2015, up from 77% in the prior year. A Nielsen Board Director (either the Chairman of the Compensation Committee, the Board’s Lead Independent Director, or the Chairman of the Nomination and Corporate Governance Committee) participated in each meeting. | | |
| | 20162019 PROXY STATEMENT B-1 A-1
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| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
In 2018, our shareholders continued to show confidence in Nielsen’s executive compensation program with 85% of the votes cast at our shareholder meeting affirming our executive compensation program on an advisory basis and, 87% approved our Directors’ Compensation Policy. Following our annual general meeting of shareholders in May 2018, we conducted additional outreach to shareholders to obtain specific feedback on the say on pay voting results. Some concerns were noted regarding alignment of our Executive Director’s pay to stock price performance. In 2018, the incentive plans were strongly aligned with performance outcomes and operated as intended. The 2016 Long Term Performance Plan (“LTPP”) grants which matured on December 31, 2018 paid out at zero percent due to relative total shareholder return and Free Cash Flow metrics not meeting the required threshold performance levels (see “-Summary of NEO Pay Decisions – PSRU Payouts Under the 2016 LTPP”). 2018 Annual Incentive plans paid out at zero due to our not meeting the required performance thresholds for Adjusted EBITDA and Revenue. The Compensation Committee took actions consistent with the Company’s philosophy and commitment to align with shareholder value, promote meritocracy and ensure good corporate governance. TheNotable highlights and/or changes made by the Committee are set out in the following table. | | | | | Modifications to peer groups | | The Company uses 2 peer groups each of whose composition is reviewed annually by the Committee
The Executive Compensation Peer Group is used as one of the factors in determining pay for Executive and Non-Executive Directors. The peer group companies are selected based on business relevance and size as measured by revenue and market capitalization. In 2015 we removed Teradata Corp and Dun & Bradstreet, Inc. from the list and added Adobe Systems. The full peer group is disclosed in our 2016 Proxy Statement under “Compensation Practices and Governance – Benchmarking.”
The Long Term Performance Plan (“LTPP”) Peer Group is used to benchmark our relative Total Shareholder Return performance pursuant to this plan. Companies in the peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses or being representative of the markets we serve. To better align the peer group with this purpose, in 2015 the Committee added four companies to the group: IMS Health Holdings, Inc., Moodys, Viacom, and WPP. The full peer group is disclosed in our 2016 Proxy Statement under “How Pay Decision are Made – Long-Term Performance Plan (“LTPP”).”
| | | Adjustments to Long-term Performance Plan (LTPP) payout formula | | After reviewing shareholder feedback, the Committee adjusted the formula for LTPP plan payouts for the 2015 and future awards, so that payments under the relative TSR component of the plan will be capped at target in the event that absolute TSR over the performance period is negative. | | | Adjustments to Annual Incentive Plan payout policy | | The Committee approved two modifications to the annual incentive plan:
1. We discontinued our practice of setting individual incentive targets at the level of prior year payouts (“PYPO”). While the PYPO method had served its initial purpose well – particularly in establishing our culture of meritocracy – its effect over time tended to restrict our ability to provide market competitive and motivating targets for segments of our employee population. We decided therefore to revert to the more traditional approach of setting a target opportunity each year with reference to market benchmark and pay mix guidelines among other factors.
In tandem with this change we simplified the description of the formula by which the incentive pool is funded such that 100% EBITDA performance to target equates to 100% pool funding.
2. Additionally, the Committee noted that the proportion of equity in executives’ total annual pay mix had reached the targeted range. Therefore for the 2016 plan year we decided that annual incentive payouts would revert to being paid 100% in cash (versus 75% cash and 25% in Restricted Stock Units that had been our practice since 2013).
| | | Base Salary | | The Committee re-affirmed its policy to review salaries in intervals of 24-36 months (except in the event of a role change or other special circumstances). Increases in compensation will be more heavily weighted to equity in order to further emphasize long-term equity in the executive pay mix. | | |
| | | | | | | | | | | | | Performance Restricted Stock Unit Awards (“PRSUs”) in the Long- Term Performance Plan (“LTPP”) | | As set out in the 2018 Compensation Report, for 2018,3-year revenue compounded annual growth rate (“CAGR”) was introduced (25% weighting) as a performance metric. Weighting of the free cash flow (“FCF”) metric was reduced from 60% in 2017 to 50% in 2018 and weighting of the relative total shareholder return (“RTSR”) metric was reduced from 40% in 2017 to 25% in 2018. The 2018 metrics and weightings as compared to 2017 are outlined below. | | | | | Metric | | 2017 | | 2018 | | | | | | | FCF | | 60% | | 50% | | | | | | | RTSR | | 40% | | 25% | | | | | | | Revenue CAGR | | N/A | | 25% | | | | | | | | | | | | | | Restricted Stock Units (“RSUs”) | | In December 2018, the Compensation Committee approved moving the grant of service-based RSUs from October/November to February in line with the timing of the grant of PRSUs. This will be implemented with the February 2019 grant. | Annual Incentive Plan (“AIP”) | | Revenue growth was introduced as a new performance metric in 2018 with a 25% weighting. The 2018 metrics and weightings as compared to 2017 are outlined below: | | | | | | | | Metric | | 2017 | | 2018 | | | | | | | EBITDA | | 100% | | 75% | | | | | | | Revenue | | N/A | | 25% | | | | | | | FCF | | Modifier | | N/A | | | | | | | | | | | | | |
We believe that the individual components and levels of compensation paid to Nielsen’s Executive Director are consistent with our philosophy and are serving their purposes well – motivate accomplishment of annual performance goals that drive long-term business objectives and deliver sustainable long-term value to our shareholders. We will continue to monitor the design and effectiveness of our executive compensation programsprogram as they applyit applies to our Executive Director annually and make modifications as appropriate. Non-Executive Director Program
In December 2014, following its annual review of Non-Executive Director compensation2018, the BoardCompensation Committee approved the addition of a Lead Independent Director fee in the amount of $30,000 and appointed Mr. Attwood to the role of Lead Independent Director, to be effective January 1, 2015. Mr. Calhoun stepped down as Chairmancompensation package of the Board effective December 31, 2015 but continuesnew CEO David Kenny. The package was constructed to serve asattract a Non-Executive Director.candidate of Mr. AttwoodKenny’s leadership caliber and proven entrepreneurial and digital technology experience in a highly competitive recruitment market. His target compensation of $10,225,000 was appointed Chairman ofpositioned at the Board effective January 1, 2016 having previously served as the Company’s Lead Independent Director during 2015. The Board approved fees and an annual DSU Grant for Mr. Attwood within the termsmedian of our policy.market benchmarks and was comprised of:
/s/ Javier Teruel
Chairman of the Compensation Committee
| | | | | Compensation Element | | 2019 | | Base Salary | | $ | 1,300,000 | | Annual Incentive | | $ | 1,925,000 | | Long Term Incentives1 | | $ | 7,000,000 | |
1 | | Mr. Kenny’s long term incentive is comprised of 60% ($4,200,000) performance RSUs and 40% ($2,800,000) service-based RSUs. |
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| | 20162019 PROXY STATEMENT B-2 A-2
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| DIRECTORS’ COMPENSATION REPORT |
Mr. Kenny received the following specialone-time compensation awards connected with his hiring: “Make-Whole” Awards The value of the awards was calculated carefully and followed a typical methodology for determining value: Partial buyout of unvested equity subject to performance conditions and full buyout of unvested equity that is not subject to performance conditions. Mr. Kenny was awarded 487,505 RSUs on his hire date with3-year ratable vesting. Grant Date Fair Value was $13,742,766. Full buyout of cash awards that Mr. Kenny would have received within several months of his departure from his former employer. Mr. Kenny received a $1,500,000 cash payment on December 7, 2018 to reimburse the loss of his 2018 annual incentive. Mr. Kenny is required to repay the cash award in full if he resigns voluntarily within one year of receiving the payment. Mr. Kenny also received a cash award of $2,500,000 on February 15, 2019 to reimburse the loss of a cash retention award at his former employer. This payment will be reported in the 2019 Summary Compensation Table. New Hire Inducement Awards The Board approved the following hiring inducement awards: New Hire Equity award granted on December 3, 2018. The grant aligns Mr. Kenny with similar goals to those contained in the special grants awarded to other NEOs in 2018. Half of the award was denominated in performance stock options (“PSOs”) subject to a challenging stock price growth hurdle of 25% from the offer. The remaining portion was delivered in service-based RSUs. Both components vest ratably over 3 years, except that PSOs are only exercisable if the stock price growth target is achieved for 21 or more consecutive days within the3-year period. The Grant Date Fair Value of $2.8M is 40% of the annual LTI target compensation - the value he would have been awarded in October, 2018 had he been employed at that time. Premium Stock Option Grant to reward and motivate truly exceptional stock price growth. The award of 750,000 premium stock options granted on December 3, 2018 vest ratably over 3 years and carry an exercise price of $40 - requiring growth of 42%+ over the stock price on the date of grant before they become exercisable. In addition, Mr. Kenny’s offer included the reimbursement of legal fees incurred in accepting the position up to $40,000 and the reimbursement of expenses incurred in financial planning of up to $15,000 and health examination up to $2,500. The Compensation Committee negotiated the severance package for Mr. Barns which was set in accordance with the Company’s Severance Policy for Section 16 Officers and United States-Based Senior Executives (“Severance Policy”). Mr. Barns is entitled to: cash severance of $5,640,000, which is equal to two times the sum of Mr. Barns’ (1) annual base salary and (2) the average of the annual incentive payments paid to Mr. Barns in the three years preceding 2018, with such amount payable in equal bi-weekly installments during the twenty-four months following January 1, 2019; a bonus in respect of 2018 for the portion of the year that Mr. Barns was employed by the Company, based on actual performance and payable at the same time that the Company pays bonuses to other executives of the Company. Actual bonus amount paid is $0; continued participation in the Company’s medical, dental and vision plans at the same rate as other similarly situated active employees. The value of this is estimated to be approximately $26,000 during the twenty-four months following Mr. Barns’ employment termination for the portion of COBRA premiums in excess of the amounts that Mr. Barns paid while employed by the Company; and outplacement assistance and support ($100,000 maximum) for one year. | | |
| | 2019 PROXY STATEMENT A-3 |
| DIRECTORS’ COMPENSATION REPORT |
Based on his age (55) and years of service (21), Mr. Barns was retirement eligible. Consistent with past practice, and subject to satisfaction of certain conditions, the Board has approved the following retirement treatment for the unvested equity awards held by Mr. Barns: unvested stock options will continue to vest during the twenty-four months following the employment termination date, subject to Mr. Barns’ compliance with restrictive covenants during such period in order to comply with applicable tax regulations, unvested RSUs vested on December 31, 2018: however, Mr. Barns is required to hold the Company shares underlying the RSUs, net of any shares required to satisfy applicable tax withholdings, for the twenty-four months following December 31, 2018; and unvested PRSUs will remain outstanding and eligible to vest based on actual performance as determined by the Compensation Committee, with the actual number of shares earned for the 2018 PRSU award reduced by one-third. Non-Executive Director Program No changes were made toNon-Executive Director compensation. /s/ Harish Manwani Compensation Committee Chairperson ANNUAL REPORT ON DIRECTORS’ COMPENSATION Nielsen Holdings plc became a UK company under the UK Companies Act 2006 on February 4, 2015 and a quoted UK company on August 31, 2015; however, for purposes of this disclosure we are presenting full year 2015 compensation data based on compensation paid to Directors by both Nielsen N.V. (a Dutch company and predecessor to Nielsen Holdings plc) and Nielsen Holdings plc.
The following is provided on an audited basis. Compensation of Executive Director The following table sets forth the compensation of Mitch Barns, our CEO who isduring 2017 and through December 2, 2018 and David Kenny, our Executive Director, during 2014 and 2015:CEO from December 3, 2018 through December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | Annual Bonus1 | | | Long Term Incentives2 | | | Pensions3 | | | Benefits and Other4 | | | Total | | 2015 | | | 1,000,000 | | | | 1,545,000 | | | | 2,109,268 | | | | 11,266 | | | | 111,902 | | | | 4,777,437 | | 2014 | | | 998,462 | | | | 1,365,000 | | | | 1,581,807 | | | | 15,697 | | | | 117,027 | | | | 4,077,993 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | | | Benefits and Other1 | | | Annual Bonus | | | Long Term Incentives2 | | | Pensions3 | | | Total | | | | | | | | | Mr. Kenny 20184 | | | 103,288 | 4 | | | 1,500,954 | 5 | | | — | 6 | | | — | 7 | | | — | | | | 1,604,242 | | | | | | | | | Mr. Barns 2018 2017 | | | 920,548 | | | | 5,668,547 | 8 | | | — | | | | 2,772,682 | | | | 7,595 | | | | 9,369,372 | | | | 1,000,000 | | | | 26,041 | | | | 1,700,000 | | | | 3,269,725 | | | | 8,100 | | | | 6,003,866 | |
1 | | The 2015 Annual Bonus payment attributableTaxable benefits paid to 2015 performance isthe CEO include but are not limited to financial planning, healthcare benefits and Company paid in February 2016 and represents 75% of the total Annual Bonus that was paid in cash. The remaining 25% of the Annual Bonus ($515,000) was paid in incentive RSUs, and included in the Long-Term Incentive column. Payments are subject to Nielsen’s Clawback Policy.life insurance benefits. |
2 | | The amounts disclosed in this column represent the vesting date fair market value of awards and includesinclude any dividend equivalents paid. |
Values | | Values for awards vested in 20152018 were due to the CEO’s ongoing employment with the Company:
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Stock | | Stock Options: 5/11/201510/20/2018 ($276,000)0), 7/26/201510/29/2018 ($343,800), 9/25/2015 ($119,733)0) and 10/29/20152018 ($212,558) 0) |
RSUs: | | RSUs: 7/26/20152/18/2018 ($178,422)192,111), 7/25/201510/18/2018 ($471,439)730,104), 9/25/201510/20/2018 ($109,816)201,721), 2/10/201529/2018 ($105,438)214,616) and 10/29/20152018 ($292,063)167,184)
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Performance | | Restricted Shares: 2/21/2018 ($1,266,947) |
Values | | for awards vested in 2018 that were due to the CEO’s terminated employment with the Company: |
RSUs: | | 12/31/2018 ($2,477,757.52) |
3 | | The amounts indicated for Mr. Barns represent the actuarial change in pension value during 2014 and 2015, relating to the Nielsen qualified plan and non-qualified excess plan, and 401(k) employer matching contributions.contributions in 2017 and 2018. |
4 | | TaxableThis reflects the salary paid for December3-31, 2018. |
5 | | This includes benefits and the AIP Make Whole payment paid to Mr. Kenny in December 2018. |
6 | | No bonus was paid to Mr. Kenny in 2018. |
7 | | No Long-Term incentives vested for Mr. Kenny in 2018. |
8 | | Includes cash severance of $5,640,000 which will be payable to Mr. Barns include but are not limited to financial planning, healthcare benefits, relocation assistance and Company paid life insurance benefits.in equal bi-weekly installments during the twenty-four months following January 1, 2019. |
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| | 20162019 PROXY STATEMENT B-3 A-4
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| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
Compensation ofNon-Executive Directors The following table sets forth the compensation of ourNon-Executive Directors during 20142017 and 2015:2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Board Fees | | | Board Chair or Lead Director Fees | | | Committee Chair Fees | | | Equity Vesting | | | Bonus5 | | | Pension6 | | | Total | | James Attwood1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 40,000 | | | | 15,000 | | | | — | | | | 28,112 | | | | | | | | | | | | 83,112 | | 2014 | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | — | | David Calhoun | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | — | | | | — | | | | — | | | | 7,534,051 | | | | — | | | | | | | | 7,534,051 | | 2014 | | | — | | | | — | | | | — | | | | 7,623,688 | | | | 3,000,000 | | | | 2,000,000 | | | | 12,623,688 | | Karen Hoguet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | 20,000 | | | | 137,418 | | | | | | | | | | | | 237,418 | | 2014 | | | 80,000 | | | | — | | | | 20,000 | | | | 141,541 | | | | | | | | | | | | 241,541 | | James Kilts2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | — | | | | 109,063 | | | | | | | | | | | | 189,063 | | 2014 | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | — | | Harish Manwani3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | — | | | | 102,691 | | | | | | | | | | | | 182,691 | | 2014 | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | — | | Kathryn Marinello4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | — | | | | 74,478 | | | | | | | | | | | | 154,478 | | 2014 | | | 13,333 | | | | — | | | | — | | | | — | | | | | | | | | | | | 13,333 | | Alex Navab2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | — | | | | 109,063 | | | | | | | | | | | | 189,063 | | 2014 | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | — | | Robert Pozen | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | 15,000 | | | | 137,418 | | | | | | | | | | | | 232,418 | | 2014 | | | 80,000 | | | | — | | | | 15,000 | | | | 141,541 | | | | | | | | | | | | 236,541 | | Vivek Ranadive | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | — | | | | 137,418 | | | | | | | | | | | | 217,418 | | 2014 | | | 80,000 | | | | — | | | | — | | | | 141,541 | | | | | | | | | | | | 221,541 | | Javier Teruel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 80,000 | | | | — | | | | 15,000 | | | | 137,418 | | | | | | | | | | | | 232,418 | | 2014 | | | 80,000 | | | | — | | | | — | | | | 141,541 | | | | | | | | | | | | 221,541 | |
1 | | Mr. Attwood’s annual board fee in the amount of $80,000 and lead independent Director fee in the amount of $30,000 were prorated effective July 1, 2015 (when he began receiving board fees). He also received a prorata equity grant for the period beginning July 1, 2015 to May 1, 2016. |
2 | | Messrs. Kilts and Navab received a prorata equity grant for the period beginning January 1, 2015 to May 1, 2015. |
3 | | Mr. Manwani received a prorata equity grant for the period beginning January 22, 2015 to May 1, 2015. |
4 | | In 2014, Ms. Marinello’s annual board fee in the amount of $80,000 was prorated effective October 31, 2014. She also received a prorata equity grant for the period beginning November 3, 2014 to May 1, 2015. |
5 | | Mr. Calhoun served as the Company’s Chief Executive Officer through December 31, 2013. He received 75% of his 2013 annual bonus in cash in February 2014. 25% of his annual incentive was denominated in restricted shares which vest equally on the first and second anniversaries of the date of grant. |
6 | | Mr. Calhoun was paid his accrued benefit of $2,000,000 under his additional supplemental executive retirement plan on July 2, 2014 in a cash lump sum. |
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| | 2016 PROXY STATEMENT B-4
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| | | DIRECTORS’ COMPENSATION REPORT
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| | | | | | | | | | | | | | | | | | | | | | | Board Fees | | | Board Chairperson Fee | | | Committee Chairperson Fees | | | Equity Vesting | | | Total | | | | | | | | James A. Attwood | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | 150,000 | | | | — | | | | 137,057 | | | | 367,057 | | | | | | | | 2017 | | | 80,000 | | | | 150,000 | | | | — | | | | 142,858 | | | | 372,858 | | | | | | | | Guerrino De Luca | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | — | | | | 138,077 | | | | 218,077 | | | | | | | | 2017 | | | 16,044 | | | | — | | | | — | | | | — | | | | 16,044 | | | | | | | | Karen M. Hoguet | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | 25,000 | | | | 137,057 | | | | 242,057 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | 25,000 | | | | 142,858 | | | | 247,858 | | | | | | | | Harish Manwani | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | 20,000 | | | | 137,057 | | | | 237,057 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | 20,000 | | | | 142,858 | | | | 242,858 | | | | | | | | Robert C. Pozen | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | 15,000 | | | | 137,057 | | | | 232,057 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | 15,000 | | | | 142,858 | | | | 237,858 | | | | | | | | David Rawlinson | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | — | | | | 145,461 | | | | 225,461 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | — | | | | — | | | | 80,000 | | | | | | | | Javier G. Teruel | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | — | | | | 137,057 | | | | 217,057 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | — | | | | 142,858 | | | | 222,858 | | | | | | | | Lauren Zalaznick | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 80,000 | | | | — | | | | — | | | | 137,057 | | | | 217,057 | | | | | | | | 2017 | | | 80,000 | | | | — | | | | — | | | | 142,858 | | | | 222,858 | |
Following its annual review ofNon-Executive Director compensation the Board approved the followingagreed that no changes in Director compensation within the terms of our policy and which are expectedwere to be in force for the next three years.made toNon-Executive Director compensation. | | Compensation Component (Annual) | | 2015 | | Future | | 2018 | | | Future | | | Board Fees1 | | $ 80,000 | | $ 80,000 | | | $ 80,000 | | | | $ 80,000 | | Lead Independent Director | | $ 30,000 | | $ 30,000 | | Board Chair Fee2 | | None | | $150,000 | | Committee Chair Fee | | Governance: $15,000
Compensation: $15,000 Audit: $20,000 | | Governance: $15,000
Compensation: $20,000 Audit: $25,000 | | | Board Chairperson Fee2 | | | | $150,000 | | | | $150,000 | | | Committee Chairperson Fee | | |
| Governance: $ 15,000
Compensation: $ 20,000 Audit: $ 25,000 |
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| Governance: $ 15,000
Compensation: $ 20,000 Audit: $ 25,000 |
| | Equity Grant3 | | $135,000 | | $160,000 | | | $160,000 | | | | $160,000 | |
1 | | Directors may elect to receive Board fees in cash or in DSUs. |
2 | | Board Chair fees areChairperson Fees may be paid 50% in cashDSUs and 50% in DSUs.cash. The Board ChairChairperson may elect to receive the cash portion in DSUs. |
3 | | The annual equity grant is delivered in DSUs and vests in equal installments each quarter over 1 year. |
The Board believes these changes were necessary to maintain a competitive compensation package and to continue to attract and retain talented members of our Board who possess the requisite knowledge, skills, and experience to support and oversee the Company.
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| | 2019 PROXY STATEMENT A-5 |
On December 31, 2015 Mr. Calhoun resigned his position as Chairman of the Board but will continue to serve as a Board Director. The terms of Mr. Calhoun’s Transition Agreement governing his transition from CEO to Chairman effective January 1, 2014 (disclosed below) expired on December 31, 2015. As a consequence the Board approved Director fees and an annual equity grant for Mr. Calhoun within the terms of our policy and equivalent to the compensation paid to other similarly situated Directors.
| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
Mr. Attwood was appointed Chairman of the Board effective January 1, 2016 having previously served as the Company’s Lead Independent Director during 2015.
Effective January 11, 2016, Mr. Navab resigned his position as a Non-Executive Director.
Performance Against Performance Targets for Annual Incentive for our Executive Director A maximum annual incentive payout fund for the CEO is determined by a formula which calculates 2% of Adjusted EBITDA performance and allocates it to each executive officer in proportions ranging between 10% and 18% of the fund. This yielded a maximum fund of $6,689,000 for the CEO. The Committee exercises negative discretion to determine final payouts using the Annual Incentive Plan Formula (described below). This qualifies payouts under the plan as tax deductible under US tax code Section 162(m).
Annual Incentive Plan Formula The funding/initial payout formula (shown below) correlates “Bonus Funding EBITDA”is based on Adjusted EBITDA and revenue growth (as defined on page C-2B-2 of the Directors’ Compensation Policy) growth from the prior year with payout percentages indexed. The formula correlates levels of AIP Adjusted EBITDA and Revenue performance, as defined above, to target opportunities. For 2015, a funding/initial payout ofpercentages. This formula was weighted 75% to AIP Adjusted EBITDA, and 25% to Revenue performance. A 100% funding percentage is achieved when Bonus Funding EBITDAif performance for both metrics meets the targetperformance targets as approved by the Compensation Committee at the beginning of 7% growth. Maximum fundingthe plan year.1 If performance falls below the ‘Minimum’ threshold, no payouts are awarded. Funding and individual payouts are capped at 200% of target. Threshold performance yields a payout/initial funding of 70%. If performance falls between the benchmark performance targets, the payout amount is calculated using interpolation between those benchmarks. If performance falls below the threshold – no payouts are funded 2018 Performance-Payout Formula | | | | | | | | | | | | | | | | | | | EBITDA | | | Revenue | | | | | | | Performance Milestones | | Growth vs Prior Year (Index %) | | | Funding/ Initial Payout %1 | | | Growth vs Prior Year (Index %) | | | Funding/ Initial Payout %1 | | | | | | | Maximum | | | 109% | | | | 200% | | | | 106% | | | | 200% | | | | | | | Exceptional | | | 105% | | | | 150% | | | | 105% | | | | 167% | | | | | | | Target | | | 101% | | | | 100% | | | | 103% | | | | 100% | | | | | | | Minimum | | | 94% | | | | 50% | | | | 100% | | | | 50% | | | | | | | < Minimum | | | <94% | | | | Zero | | | | <100% | | | | Zero | |
| | | 1 | | 2016 PROXY STATEMENT B-5 The AIP funding percentage and initial payout percentage are determined using linear interpolation if actual performance falls between any two performance levels |
| | | DIRECTORS’ COMPENSATION REPORT | | |
2015 Performance -Payout Formula
| | | | | | | | | Performance Milestones | | Growth v Prior Year (index %) | | | Funding/ Initial Payout % | | Maximum | | | 167% | | | | 200% | | Exceptional | | | 114% | | | | 114% | | Target | | | 107% | | | | 100% | | Actual Performance | | | 107% | | | | 100% | | Minimum | | | 97% | | | | 70% | | < Minimum | | | <97% | | | | Zero | |
Additionally, the Compensation Committee considers total companyCompany financial performance and the Executive Director’s contribution to that performance.performance, prior to determining final awards. Performance against objectives is assessed and consideration given to qualitative factors such as degree of difficulty, extraordinary market circumstances and leadership impact. As a result, the initial payout may be adjusted up or down to ensure that total performance is reflected in the final payout. 20152018 Results
In February 2019, the Compensation Committee evaluated performance under the 2019 AIP. The 2015 Bonus Funding EBITDA achievement was 7% growth over prior year. Consequently the plan funded at 100% and the initial payout was set at 100% of the Executive Director’s target bonus opportunity. Before approving the incentive plan funding, theCompensation Committee assesseddetermined that the Company’s FCFAIP Adjusted EBITDA growth index and revenue growth achieved in 2018 under the AIP did not meet threshold performance against annual plan objectives. The Committee has discretion to reduce the fund by up to 30% if FCF falls shortyielding an AIP funding percentage of objectives. There is no discretion to increase the fund in the event that FCF performance exceeds objectives.0% for our executive director.
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| | 2019 PROXY STATEMENT A-6 |
We define FCF as net cash provided by operating activities less capital expenditure.
| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
The Committee reviewed the Company’s FCF performance, which represented 18% growth over prior year and decided that the performance was within the target range expected. The Committee made no reduction to the incentive funding.
Performance Against Performance Targets for Long Term Incentive Vesting for our Executive Director 20152018 Awards
The following representstable shows the aggregate grant date fair value (based on the share price and Black-Scholes values on the grant date) and the number of the restricted stock unitsRSUs and stock options granted in 20152018 to our Executive DirectorMr. Barns and Mr. Kenny under the Nielsen 2010 Stock Incentive Plan. No vestings occurred nor payouts were made in 2015 under the LTPP. The first LTPP payout was made for the 2013 LTPP in February 2016. Details will be disclosed in our 2017 UK Director report. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | | | | | Time Vested RSUs | | | Performance Vested RSUs | | | Options | | | | | | Vesting Date1 | | | Total Value | | | | Share price on grant date | | | Grant Date Fair Value | | | # of RSUs | | | Grant Date Fair Value | | | # of RSUs | | | % receiveable if threshold performance achieved | | | Grant Date Fair Value | | | # of Options | | | Exercise price | | | | | | | | 2015 | | $ | 47.95 | | | | 1,500,000 | | | | 31,283 | | | | 3,000,000 | | | | 65,860 | | | | 50 | % | | | 1,500,000 | | | | 177,515 | | | $ | 47.95 | | | | 10/29/2019 | | | | 6,000,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Time Vested RSUs | | | Performance Vested RSUs | | | Options | | | | | | Total Value | | | | | | | | | | | | | | | Share price | | | Grant Date Fair Value | | | # of RSUs | | | Grant Date Fair Value | | | # of PRSUs | | | % Receivable if minimum performance achieved | | | Grant Date Fair Value | | | # of Options | | | Exercise price | | | | | | | | | | | | | | | | Mr. Kenny | | $ | 28.19 | 1 | | | 13,742,766 | | | | 487,505 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 13,742,766 | | | | | | | | | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,620,000 | | | | 750,000 | 3 | | $ | 40.00 | 4 | | | 1,620,000 | | | | | | | | | | | | | | | $ | 25.79 | 5 | | | 1,400,010 | | | | 54,285 | 6 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,400,010 | | | | | | | | | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 367,031 | 7 | | $ | 28.19 | | | | 2,866,911 | | | | | | | | | | | | | Mr. Barns | | | — | | | | — | | | | — | | | | 4,124,341 | | | | 147,601 | 8 | | | 50% | | | | — | | | | — | | | | — | | | | 4,124,341 | |
1 | | RSU and Stock option awards vest over four years in equal annual installmentsGrant Date was December 3, 2018. Closing price on the anniversary of the grant date.December 3, 2018 was $28.19. |
| | | 2 | | 2016 PROXY STATEMENT B-6 Vesting of these awards will occur in three equal annual installments beginning on December 31, 2019 and ending December 31, 2021. |
3 | DIRECTORS’ COMPENSATION REPORT | Vesting of these awards will occur in three equal annual installments beginning on December 3, 2019 and ending December 3, 2021. |
4 | | The difference between the share price at grant and the exercise price reflects a share price hurdle to incentivize Mr. Kenny. |
5 | | Grant Date was December 3, 2018. Share price was set using closing price on November 15, 2018. |
6 | | Vesting of these awards will occur on December 3, 2021. |
7 | | Vesting of these awards will occur in three equal annual installments beginning on December 3, 2019 and ending December 3, 2021, subject to achieving stock performance target of $32.24 for 21 consecutive days. |
8 | | 49,200 PRSUs were forfeited with severance. |
Time-Vested Restricted Stock Unit Awards The following table provides information regarding the time-vested restricted stock unitsRSUs outstanding at the beginning and end of the year ended December 31, 20152018 for our Executive Director:Mr. Kenny and Mr. Barns: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Date | | End of Vesting Period | | | Unvested RSUs Outstanding at 1/1/2015 | | | RSUs Granted | | | RSUs Vested | | | Unvested RSUs Outstanding at 12/31/2015 | | | Market Price Per Share on Award Date | | | Market Price Per Share on Vesting Date | | 7/26/2012 | | | 7/26/2016 | | | | 7,808 | | | | — | | | | 3,950 | | | | 3,999 | | | $ | 27.98 | | | $ | 45.17 | | 7/25/2013 | | | 7/25/2017 | | | | 41,259 | | | | — | | | | 10,437 | | | | 31,697 | | | $ | 33.25 | | | $ | 45.17 | | 9/25/2013 | | | 9/25/2017 | | | | 6,923 | | | | — | | | | 2,349 | | | | 4,728 | | | $ | 36.56 | | | $ | 46.75 | | 2/10/2014 | | | 2/10/2016 | | | | 4,808 | | | | — | | | | 2,403 | | | | 2,463 | | | $ | 45.13 | | | $ | 43.87 | | 10/29/2014 | | | 10/29/2018 | | | | 23,932 | | | | — | | | | 6,091 | | | | 18,385 | | | $ | 41.92 | | | $ | 47.95 | | 2/12/2015 | | | 2/12/2017 | | | | — | | | | — | | | | — | | | | 10,697 | | | $ | 43.57 | | | | N/A | | 10/29/2015 | | | 10/29/2019 | | | | — | | | | 31,283 | | | | — | | | | 31,475 | | | $ | 47.95 | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Date | | | End of Vesting Period | | | Unvested RSUs Outstanding at 1/1/20181 | | | RSUs Granted | | | RSUs Vested1 | | | Unvested RSUs Outstanding at 12/31/20181,2 | | | Market Price Per Share on Award Date | | | Market Price Per Share on Vesting Date | | | | | | | | | | | Mr. Kenny | | | 12/3/2018 | | | | 12/3/2021 | | | | — | | | | 54,285 | | | | — | | | | 54,285 | | | $ | 28.19 | | | | N/A | | | | 12/3/2018 | | | | 12/31/2021 | | | | — | | | | 487,505 | | | | — | | | | 487,505 | | | $ | 28.19 | | | | N/A | | | | | | | | | | | Mr. Barns | | | 10/29/2014 | | | | 10/29/2018 | | | | 6,493 | | | | — | | | | 6,725 | | | | — | | | $ | 41.92 | | | $ | 24.86 | | | | 10/29/2015 | | | | 10/29/2019 | | | | 16,674 | | | | — | | | | 8,633 | | | | — | | | $ | 47.95 | | | $ | 24.86 | | | | 2/18/2016 | | | | 2/18/2018 | | | | 5,703 | | | | — | | | | 5,704 | | | | — | | | $ | 47.85 | | | $ | 33.68 | | | | 10/20/2016 | | | | 10/20/2020 | | | | 21,683 | | | | — | | | | 7,485 | | | | — | | | $ | 54.05 | | | $ | 26.95 | | | | 11/13/2017 | | | | 10/18/2021 | | | | 104,609 | | | | — | | | | 27,081 | | | | — | | | $ | 36.17 | | | $ | 26.96 | |
1 | | Amounts include additional shares acquired from dividend equivalents. |
2 | | For Mr. Barns, 106,205 unvested RSUs vested on December 31, 2018 per the terms of his termination agreement. |
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| | 2019 PROXY STATEMENT A-7 |
| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
Performance-Vested Restricted Stock Unit Awards The following provides information regarding the performance-vested restricted stock unitsPRSUs outstanding at the beginning and end of the year ended December 31, 20152018 for our Executive Director:Mr. Barns: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Date | | Vest Date | | | Measurement Period | | | Unvested RSUs Outstanding at 1/1/2015 | | | RSUs Granted | | | RSUs Vested | | | RSUs Forfeited | | | Unvested RSUs Outstanding at 12/31/2015 | | | Fair Value Per Share on Grant Date | | | Market Price Per Share on Vesting Date | | | Value on Vesting Date | | 2/20/2013 | | | February 2016 | | | | 2013-2015 | | | | 50,000 | 1 | | | 50,000 | 1 | | | — | | | | — | | | | 50,000 | 1 | | $ | 32.25 | | | | N/A | | | | N/A | | 2/20/2014 | | | February 2017 | | | | 2014-2016 | | | | 43,500 | | | | 43,500 | | | | — | | | | — | | | | 43,500 | | | $ | 46.40 | | | | N/A | | | | N/A | | 2/19/2015 | | | February 2018 | | | | 2015-2017 | | | | — | | | | 65,860 | | | | — | | | | — | | | | 65,860 | | | $ | 45.55 | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Date | | Vest Date | | | Measurement Period | | | Unvested RSUs Outstanding at 1/1/2018 | | | RSUs Granted | | | RSUs Vested | | | RSUs Forfeited | | | Unvested RSUs Outstanding at 12/31/2018 | | | Fair Value Per Share on Grant Date | | | Market Price Per Share on Vesting Date | | | Value on Vesting Date | | | | | | | | | | | | | 2/19/2015 | | | February 2018 | | | | 2015-2017 | | | | 65,860 | | | | — | | | | 38,959 | | | | — | | | | — | | | $ | 45.55 | | | $ | 32.52 | | | $ | 1,266,947 | | | | | | | | | | | | | 2/18/2016 | | | February 2019 | | | | 2016-2018 | | | | 73,146 | | | | — | | | | — | | | | — | | | | 73,146 | | | $ | 47.85 | | | | N/A | | | | N/A | | | | | | | | | | | | | 2/16/2017 | | | February 2020 | | | | 2017-2019 | | | | 83,613 | | | | — | | | | — | | | | — | | | | 83,613 | | | $ | 44.85 | | | | N/A | | | | N/A | | | | | | | | | | | | | 2/21/2018 | | | February 2021 | | | | 2018-2020 | | | | — | | | | 147,601 | | | | — | | | | 49,200 | | | | 98,401 | | | $ | 32.52 | | | | N/A | | | | N/A | |
Mr. Kenny has not yet received any PRSU awards made under the long term performance plan. 1 | | The 2013 award was made in the form of restricted shares. We were required to issue the maximum number of shares that may become payable under the plan. The target number of shares granted was 25,000. Actual payout is subject to the Company’s performance against the performance metrics of the plan as disclosed in “Summary of NEO Pay Decisions – 2013 LTPP Performance Payouts” contained in the 2016 Proxy Statement. |
LTPP participants are awarded a target number of performance RSUs (“PRSUs”)PRSUs that are earned subject to the Company’s performance against, twofor 2018 awards, three cumulative three-year performance metrics, RTSRmetrics: Relative TSR, FCF and FCF,revenue CAGR with assigned ratings of 40%25%, 50% and 60%25% respectively. The Committee decided to assign more weight to the FCF metric over which executives have relatively more direct control. Our Compensation Committee has decided not to disclose the actual FCF targetstarget because it is commercially sensitive information. The following sets forth the LTPP weighting, target and performance thresholds for LTPPPRSU grants made in 2013, 2014 and 2015 through 2018. | | | | | | | | | | | | | | | | | | | | | Relative TSR | | Weighting | | | Performance | | | 30th Percentile Relative to Peers (Threshold) | | | 50th Percentile Relative to Peers (Target) | | | 75th Percentile Relative to Peers (Maximum) | | | | 40% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | | | | | | | | | | | | | | | | | | | | Free Cash Flow | | Weighting | | | Performance | | | 85% of target | | | 100% of target | | | 120% of target | | | | 60% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | |
No vestings or payouts were made in 2015 under the LTPP. The first LTPP payout was made for the 2013 LTPP in February 2016. Details will be disclosed in our 2017 UK Director report.
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| | 2016 PROXY STATEMENT B-7
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| DIRECTORS’ COMPENSATION REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Relative TSR 2018 LTPP Awards 2015—2017 LTPP Awards | | Weighting | | | Performance | | | 30th Percentile Relative to Peers (Threshold) | | | 50th Percentile Relative to Peers (Target) | | | 75th Percentile Relative to Peers (Maximum) | | | | 25% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | 40% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Free Cash Flow 2018 LTPP Awards 2015—2017 LTPP Awards | | Weighting | | | Performance | | | 85% of target | | | 100% of target | | | 120% of target | | | | 50% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | 60% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenue 2018 LTPP Awards 2015—2017 LTPP Awards | | Weighting | | | Performance | | | 3% CAGR | | | 4% CAGR | | | 4.5% CAGR | | | | 25% | | | | Payout | | | | 50% | | | | 100% | | | | 200% | | | | 0% | | | | N/A | | | | 0% | | | | 0% | | | | 0% | |
Time vested Stock Option Awards The following provides information regarding the time-vested stock options outstanding at the beginning and end of the year ended December 31, 20152018 for our Executive Director:Mr. Kenny and Mr. Barns: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Date | | Outstanding at 1/1/15 | | | Granted During 2015 | | | Exercised During 2015 | | | Outstanding at 12/31/2015 | | | # of Securities Underlying Unexercised Options (#) Exercisable | | | # of Securities Underlying Unexercised Options (#) Un-exercisable | | | Exercise price | | | Expiration Date | | 3/5/2007 | | | 29,625 | | | | — | | | | 23,390 | | | | 6,235 | | | | — | | | | 6,235 | | | $ | 16.00 | | | | 3/5/2017 | | 3/5/2007 | | | 10,937 | | | | — | | | | 9,898 | | | | 1,039 | | | | — | | | | 1,039 | | | $ | 32.00 | | | | 3/5/2017 | | 3/18/2010 | | | 62,500 | | | | — | | | | — | | | | 62,500 | | | | 62,500 | | | | — | | | $ | 18.40 | | | | 3/18/2020 | | 5/11/2011 | | | 75,000 | | | | — | | | | — | | | | 75,000 | | | | 75,000 | | | | — | | | $ | 30.19 | | | | 5/11/2018 | | 7/26/2012 | | | 80,000 | | | | — | | | | — | | | | 80,000 | | | | 60,000 | | | | 20,000 | | | $ | 27.98 | | | | 7/26/2019 | | 9/25/2013 | | | 47,000 | | | | — | | | | — | | | | 47,000 | | | | 23,500 | | | | 23,500 | | | $ | 36.56 | | | | 9/25/2020 | | 10/29/2014 | | | 141,000 | | | | — | | | | — | | | | 141,000 | | | | 35,250 | | | | 105,750 | | | $ | 41.92 | | | | 10/29/2021 | | 10/29/2015 | | | N/A | | | | 177,515 | | | | — | | | | 177,515 | | | | — | | | | 177,515 | | | $ | 47.95 | | | | 10/29/2022 | |
| | | | | | | | | | | | | | | | | | | | | Award Date | | Outstanding at 1/1/18 | | Granted During 2018 | | Exercised During 2018 | | Outstanding at 12/31/2018 | | # of Shares Underlying Unexercised Options (#) Exercisable | | # of Shares Underlying Unexercised Options (#) Unexercisable | | Exercise price | | Expiration Date | Mr. Kenny | | 12/3/2018 | | — | | 750,000 | | — | | 750,000 | | — | | 750,000 | | $40.00 | | 12/3/2025 | | | 12/3/2018 | | — | | 367,031 | | — | | 367,031 | | — | | 367,031 | | $28.19 | | 12/3/2025 | Mr. Barns | | 7/26/2012 | | 80,000 | | — | | — | | 80,000 | | 80,000 | | — | | $27.98 | | 7/26/2019 | | | 9/25/2013 | | 47,000 | | — | | — | | 47,000 | | 47,000 | | — | | $36.56 | | 9/25/2020 | | | 10/29/2014 | | 141,000 | | — | | — | | 141,000 | | 141,000 | | — | | $41.92 | | 10/29/2021 | | | 10/29/2015 | | 177,515 | | — | | — | | 177,515 | | 133,136 | | 44,379 | | $47.95 | | 10/29/2022 | | | 10/20/2016 | | 191,571 | | | | | | 191,571 | | 95,785 | | 95,786 | | $54.05 | | 10/20/2023 |
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| | 2019 PROXY STATEMENT A-8 |
| | | | | DIRECTORS’ COMPENSATION REPORT | | | | |
Pensions Pension Benefits for 20152018 The following table presents information regarding the pension benefits for our Executive Director during the fiscal year ended December 31, 2015.2018: | | Name | | Plan Name | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | | Plan Name | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | | Mitch Barns | | | Qualified Plan | | | | 4.42 | | | | 39,194 | | | | — | | | | Qualified Plan | | | | 4.42 | | | | 44,651 | | | | — | | | | | Excess Plan | | | | 4.42 | | | | 29,752 | | | | — | | | | | | | Excess Plan | | | | 4.42 | | | | 33,111 | | | | — | |
For details on the assumptions used to determine the present value of the accumulated benefit and on our US Retirement Plans, please refer to the 20162019 Proxy Statement under “Pension Benefits for 2015.”2018”. Participants in the Qualified Plan become fully vested in their accrued benefits after the earlier of five years of service or when the participant reaches normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan). Reduced early retirement benefits are available to Mr. Barns under the Excess Plan once he reached age 40 and completed 5 years of service. Mr. Barns is eligible for early retirement. The early retirement benefits payable are actuarially reduced to be equivalent to the benefit payable at normal retirement age for Mr. Barns. Non-Executive Directors do not receive pension benefits. Effective August 31, 2006, the Company froze its United States qualified andnon-qualified defined benefit retirement plans. Mr. Kenny is not eligible for pension benefits. Payments to Past/Former Directors There were no payments to past/former Directors for the year ended December 31, 2015.2018. Mr. Barns’ severance (detailed below) was agreed but not paid in the year ended December 31, 2018. Payments for Loss of Office There were no payments for lossAs part of office for the year endedMr. Barns’ severance, 106,205 RSUs vested on December 31, 2015.2018 (for more detail, please see pageA-7).
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| | 2016 PROXY STATEMENTMr. Barns’ severance payment of $5,640,000 was agreed on the basis set out in the Chairperson’s statement atpage A-3. B-8
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| DIRECTORS’ COMPENSATION REPORT |
Statement of the Directors ShareholdingDirectors’ Shareholdings and Share Interests In 2011, our Board of Directors adopted share ownership guidelines, pursuant to which our Directors who receive fees for their services are required to maintain equity ownership in our Company. The share ownership guidelineguidelines for our Executive Director isare six times his base salary and for ourNon-Executive Directors is five times their annual fees (including Board Retainer, Board Chair, Lead Independent DirectorChairperson, and Committee ChairChairperson Fees). Shares beneficially owned by these Directors, including vested DSUs and jointly-owned shares, unvested DSUs, and unvested RSUs in the case of our Executive Director, are included in the calculation. These Directors are expected to meet the guidelines within five years from the later of the adoption of the guidelines or their appointmentsappointment as a Director or the commencement of the receipt of Director fees. A Director may not sell or dispose of shares for cash unless the share ownership policy isguidelines are satisfied. The share ownership guidelines are reviewed annually in January at which time the guideline is re-calculated for any Directors who have not yet met the guidelines using the prevailing annual salary and the closing share price of a Nielsen common share on the last daygenerally in the prior tradingfirst Compensation Committee meeting of the year. No re-calculation is performed for Directors who have met their guideline. As of December 31, 2015,2018, six of the Directors have met the guidelines and fivethree of | | |
| | 2019 PROXY STATEMENT A-9 |
| DIRECTORS’ COMPENSATION REPORT |
the Directors were still working toward meeting their guideline.the guidelines. The following table provides details on the Directors’ shareholdings as at December 31, 2015:2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | | Beneficially Owned Shares | | | % Shareholding Guidelines Achieved | | | Vested but Unexercised Options | | | Exercised Options | | | RSU Awards Subject to Performance | | | RSU Awards Not Subject to Performance | | | Weighted Average Exercise Price of Vested Options | | James Attwood | | | 22,999 | | | | 100% | | | | — | | | | — | | | | — | | | | 1,786 | | | | — | | Mitch Barns | | | 67,500 | | | | 52% | | | | 256,250 | | | | 33,288 | | | | 134,360 | | | | 103,444 | | | | 33.83 | | Dave Calhoun | | | 848,175 | | | | 100% | | | | 1,643,750 | | | | 1,600,239 | | | | 116,000 | | | | 11,535 | | | | 28.28 | | Karen Hoguet | | | 20,809 | | | | 100% | | | | 31,120 | | | | — | | | | — | | | | 1,533 | | | | 27.13 | | James Kilts | | | 3,340 | | | | 37% | | | | — | | | | — | | | | — | | | | 1,793 | | | | — | | Harish Manwani | | | 3,156 | | | | 35% | | | | — | | | | — | | | | — | | | | 1,747 | | | | — | | Kathryn Marinello | | | 6,036 | | | | 67% | | | | — | | | | — | | | | — | | | | 1,533 | | | | — | | Alex Navab | | | 5,130 | | | | 57% | | | | — | | | | — | | | | — | | | | 1,793 | | | | — | | Robert Pozen | | | 215,829 | | | | 100% | | | | 40,335 | | | | — | | | | — | | | | 1,533 | | | | 25.87 | | Vivek Ranadive | | | 16,372 | | | | 100% | | | | 4,941 | | | | — | | | | — | | | | 1,533 | | | | 28.53 | | Javier Teruel | | | 17,501 | | | | 100% | | | | 34,172 | | | | — | | | | — | | | | 1,533 | | | | 27.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | | Beneficially Owned Shares | | | % Shareholding Guidelines Achieved | | | Vested but Unexercised options | | | Exercised Options | | | RSU Awards Subject to Performance | | | RSU Awards Not Subject to Performance | | | Weighted Average Exercise Price of Vested Options | | James A. Attwood | | | 53,967 | | | | 100% | | | | — | | | | — | | | | — | | | | — | | | | — | | David Kenny | | | — | | | | 0% | | | | — | | | | — | | | | — | | | | 541,790 | | | | | | Mitch Barns1 | | | 333,214 | | | | N/A | | | | 496,921 | | | | — | | | | 255,160 | | | | — | | | | 43.12 | | Guerrino De Luca | | | 6,546 | | | | 60% | | | | — | | | | — | | | | — | | | | — | | | | — | | Karen M. Hoguet | | | 36,175 | | | | 100% | | | | 12,500 | | | | — | | | | — | | | | — | | | | 28.57 | | Harish Manwani | | | 14,682 | | | | 100% | | | | — | | | | — | | | | — | | | | — | | | | — | | Robert C. Pozen | | | 236,964 | | | | 100% | | | | 28,125 | | | | 12,210 | | | | — | | | | — | | | | 23.36 | | David Rawlinson | | | 7,870 | | | | 100% | | | | — | | | | — | | | | — | | | | — | | | | — | | Javier G. Teruel | | | 40,154 | | | | 72% | | | | 12,500 | | | | 21,672 | | | | — | | | | — | | | | 28.57 | | Lauren Zalaznick | | | 13,831 | | | | 100% | | | | — | | | | — | | | | — | | | | — | | | | — | |
1 | | Beneficially owned shares includes 260,068 of shares owned at December 31, 2018 and 73,146 unvested RSUs as of December 31, 2018. |
The following information is unaudited. | | |
| | 2016 PROXY STATEMENT B-9
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| DIRECTORS’ COMPENSATION REPORT |
provided on an unaudited basis. Performance Graph The chart below shows the cumulative TSR of Nielsen stock assuming an initial $100 investment over the period beginning on January 26, 2011 and ending December 31, 2015. This period represents the entire period that Nielsen stock has been publicly traded. In 2013, we introduced our dividend policy and share repurchase program.2018. We have compared our performance to the S&P 500 and to a marketcap-weighted composite of the peer group we use to measure total shareholder return in our LTPP. We believe these two indices are key to measuring our performance in our industry.
NIELSEN HOLDINGS PLC—CUMULATIVE TOTAL SHAREHOLDER RETURN SINCE IPO(as of 12/31/2015)
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| | 2019 PROXY STATEMENT A-10 |
| DIRECTORS’ COMPENSATION REPORT |
Chief Executive Officer’s Compensation in the Past FiveEight Years | | | | | | | | | | | | | | | | | | | | | | | 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | CEO Single Figure1,2 | | $ | 14,215,080 | | | $ | 14,857,591 | | | $ | 21,990,031 | | | $ | 5,746,807 | | | $ | 6,654,268 | | Bonus (% of Maximum Awarded)3 | | | 56 | % | | | 49 | % | | | 53 | % | | | 51 | % | | | 52 | % | Performance Based LTI (% of Maximum Vesting) | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % | | | 0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2011 | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | CEO Single Figure1,2 | | $ | 10,871,106 | | | $ | 11,139,245 | | | $ | 18,270,945 | | | $ | 4,071,634 | | | $ | 4,774,121 | | | $ | 7,280,519 | | | $ | 6,003,866 | | | $ | 10,973,614 | | Bonus (% of maximum awarded)3 | | | 56% | | | | 49% | | | | 53% | | | | 51% | | | | 52% | | | | 43% | | | | 43% | | | | 0% | | Performance based LTI (% of maximum vesting) | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | 125% | | | | 57% | | | | 59% | |
1 | | Includes data for former CEO David Calhoun for 2011, 2012 and 2013, and Mitch Barns for 2014, 2015, 2016, 2017 and 2015.through December 2, 2018, and David Kenny for December 3 through 31, 2018. |
2 | | Includes the value of all stock and option awards that vested in the respective year. |
3 | | Annual incentive maximum payout is 200% of opportunity. In 2013, 2014 and 2015, 75% was paid in cash and 25% was paid in incentive restricted stock units.RSUs. The calculation of the Bonus (% of maximum award), used the combined value of the cash and restricted unitRSU awards. |
Percentage Change in the Chief Executive Officer’s Compensation Compared to Employees The table below shows the percentage year-on-yearyear on year change inon salary and bonus earned by the CEO between the year ended December 31, 20152018 and the year ended December 31, 20142017 compared to the average compensationsalary and bonus for US-based associates that participatedsenior participants in our Annual Incentive Plan during each year. This comparative employeeglobal annual incentive plan. The comparator group was chosen as the make-upmakeup and calculation of their compensation for the categories in the table below most closely resemblesresemble that of our CEO. As the majority of our CEO’s taxable benefits are related to expatriate/relocation benefits that are not applicable to the comparable employee group, this compensation category has been excluded from the below table. | | | | | | | | | % Change | | Base Salary | | | Bonus | | CEO | | | 0 | % | | | 13 | % | Employee Comparator | | | 1 | % | | | 5 | % |
After reviewing peer group benchmark data in late 2014, the Committee and the Board made the determination to increase Mr. Barns annual incentive opportunity by 10% to better align his compensation with the median of the peer group.
| | | | | | | | | | | | | % change | | Base Salary | | | Bonus | | | Total Cash
Compensation | | CEO | | | 2% | | | | -100% | | | | -62% | | Employee Comparator | | | -2% | | | | -37% | | | | -15% | |
| | | 1 | | 2016 PROXY STATEMENT B-10 Includes salary and bonus for Mr. Barns through December 2, 2018 and Mr. Kenny from December 3, 2018 for the period that they were undertaking the role of CEO. |
| DIRECTORS’ COMPENSATION REPORT |
Relative Importance of Spend on Pay The table below shows the total pay for all employees compared to other key financial metrics and indicators: | | | | | | | | | | | | | ($ in million1) | | Year Ended: | | | | December 31, 2014 | | | December 31, 2015 | | | % Change2 | | Personnel Cost | | $ | 2,622 | | | $ | 2,513 | | | | 3.4% | | Dividends Paid | | $ | 356 | | | $ | 408 | | | | 14.6% | | Share Buyback | | $ | 466 | | | $ | 667 | | | | 43.1% | | Average number of employees | | | 40,884 | | | | 41,914 | | | | 2.5% | | Revenues | | $ | 6,288 | | | $ | 6,172 | | | | 5.0% | | EBITDA | | $ | 1,830 | | | $ | 1,853 | | | | 7.3% | |
| | | | | | | | | | | | | ($ in millions1) | | Year Ended: | | | | December 31, 2017 | | | December 31, 2018 | | | % Change2 | | Personnel Costs | | $ | 2,685 | | | $ | 2,651 | | | | -1.1% | | Dividends paid | | $ | 474 | | | $ | 494 | | | | 4.2% | | Share Buybacks | | $ | 140 | | | $ | 70 | | | | -50.0% | | Average number of employees | | | 44,594 | | | | 45,894 | | | | 2.9% | | Revenues | | $ | 6,572 | | | $ | 6,515 | | | | -0.7% | | EBITDA | | $ | 2,011 | | | $ | 1,831 | | | | -8.2% | |
1 | | Average number of employees is not provided in millions. |
2 | | % change is provided on a constant currency basis. We calculate constant currency by converting 20142017 local currency values to 20152018 period foreign currency exchange rates.rates (only for personnel costs, revenue & EBITDA). |
The numbers presented above were selected to provide a broad but reasonable context against which to compare the growth of value provided to the CEO, all employees and shareholders. The figures are reported in Note 22 of our 20152018 UK Annual Report. | | |
| | 2019 PROXY STATEMENT A-11 |
| DIRECTORS’ COMPENSATION REPORT |
Consideration by the Directors of Matters Relating to Directors’ Compensation In 2015,2018, the Compensation Committee consisted of the following members: Harish Manwani (Chairperson) Alex NavabRobert C. Pozen
Vivek RanadiveLauren Zalaznick
Javier Teruel (Chair)Guerrino De Luca
The Committee and the Board are responsible for determining the compensation of our Directors and regularly reviewsreview the philosophy and goals of the Director compensation program and assessesassess the effectiveness of compensation practices and processes. The Compensation Committee sets performance goals and assesses performance against these goals. The Compensation Committee and the Board operate independently of management and consider the recommendations and market data provided by itsthe Compensation Committee’s independent consultant when reviewing and making compensation decisions. The CEO does not participate in the Committee and Board discussions regarding his own compensation. The Compensation Committee and the Board make their decisions based on their assessment of both Nielsen and individual performance against goals, market data provided by theirthe Compensation Committee’s independent compensation consultant, and on their judgment as to what is in the best interests of Nielsen and its shareholders. The Compensation Committee is empowered to study or investigate any matter of interest or concern that the Compensation Committee deems appropriate and shall have the sole authority to retain, oversee the work of, obtain advice from and terminate any compensation consultant, independent legal counsel or other adviser. The Company shall provide appropriate funding, as determined by the Compensation Committee, for payment of reasonable compensation to any compensation consultant, independent legal counsel or other advisers retained by the Compensation Committee, as well as funding for the payment of ordinary administration expenses of the Compensation Committee that are necessary or appropriate in carrying out its duties. The Compensation Committee undertakes an independence assessment prior to selecting any compensation consultant, legal counsel or other advisors that will provide advice to the Compensation Committee (other thanin-house legal counsel) taking into account such factors as may be required by the New York Stock Exchange, the UK Companies Act 2006 and any other relevant legislation or regulation from time to time. Any compensation consultant retained by the Compensation Committee to assist it in connection with setting the amount or form of Director compensation (other than any role limited to consulting on any broad-based plan that does not discriminate in | | |
| | 2016 PROXY STATEMENT B-11
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| DIRECTORS’ COMPENSATION REPORT |
scope, terms, or operation, in favor of executive officers or Directors of the Company, and that is available generally to all salaried employees; or providing information that either is not customized for the Company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation consultant does not provide advice) shall not provide any other services to the Company or its subsidiaries, unless such services arepre-approved by the Compensation Committee. The Compensation Committee shall evaluate, on at least an annual basis, whether any work provided by the Compensation Committee’s compensation consultant raised any conflict of interest. The Compensation Committee retains Meridian Compensation Partners, LLC (Meridian)(“Meridian”) as its compensation consultant. Meridian has provided market data and perspective on Executive andNon-Executive Director compensation and related governance. Meridian and its affiliates did not provide any services to Nielsen or its affiliates in 20152018 other than executive and Director compensation consulting to the Compensation Committee. Discussions between Meridian and Nielsen management are limited to those necessary to complete work on behalf of the Committee. The Compensation Committee determined that Meridian and its lead consultant for Nielsen satisfy the independence factors described in the NYSE listing rules. The Compensation Committee also determined that the work performed by Meridian in 20152018 did not raise any conflict of interest issues. In 2015,2018, Nielsen paid $264,325$380,763 to Meridian for services rendered. | | |
| | 2019 PROXY STATEMENT A-12 |
| DIRECTORS’ COMPENSATION REPORT |
Implementation of Policy in 20162019 Our 2016 Directors CompensationThe key changes as to how the Policy has been implemented. All Executive and Non-Executive compensation complies with our Policy.will be operated in 2019 are as follows:
1. | The core 2019 performance metrics will include three-year revenue CAGR (same as 2018) and adjusted earnings per share (“EPS”) (new for 2019). Relative TSR which has been a core metric in the past will become a modifier in which a multiplier is applied to the overall results of the plan based on our TSR performance relative to our peer group. The weightings of the core metrics will be based 60% on revenue CAGR and 40% on adjusted EPS. |
| | | Metric | | Weighting | FCF | | N/A | RTSR | | Modified | Revenue | | 60% | Adjusted EPS | | 40% |
2. | The peer group will no longer contain Dun & Bradstreet as they became a private company. |
3. | Following the hiring of our new CEO and assessment of the Company’s financial goals for 2019, the Compensation Committee made the determination to alter the 2019 performance metrics and weightings for our Annual Incentive Plan. For 2019, 70% will be based on the combined performance of revenue and EBITDA margin against a target and 30% will be based on free cash flow against a target. Each of these targets are the Board-approved operating plan targets for 2019. |
Statement of Voting at General Meeting At the Annual General Meeting of Shareholders on June 26, 2015,May 22, 2018, the shareholder advisory vote on executive compensationthe Directors’ Compensation Report received the following votes: | | | Votes | | | % of Total Votes | | | Votes | | | % of Total Votes | | Votes Cast in Favor | | | 313,610,473 | | | | 98.3% | | | | 252,057,276 | | | | 85% | | Votes Cast Against | | | 5,348,994 | | | | 1.7% | | | | 43,448,928 | | | | 15% | | Total Votes Cast | | | 318,959,467 | | | | 100% | | | | 295,506,204 | | | | 100% | | Votes Withheld1 | | | 13,349,104 | | | | N/A | | | | 15,504,804 | | | | N/A | |
The shareholder binding vote on the Directors’ Compensation Policy received the following votes. | | | | | | | | | | | Votes | | | % of Total Votes | | Votes Cast in Favor | | | 260,439,789 | | | | 87% | | Votes Cast Against | | | 40,044,229 | | | | 13% | | Total Votes Cast | | | 300,484,018 | | | | 100% | | Votes Withheld1 | | | 10,526,990 | | | | N/A | |
1 | | Votes withheld include 2,807,620 abstentions and 10,541,484 broker non-votes. For purposes of calculating our overall voter approval, we have excluded votes withheld. |
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| | 20162019 PROXY STATEMENT B-12 A-13
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Our Directors’ Compensation Policy applies to our Executive Director, as CEO (as well as any individual who may become an Executive Director while this policy is in effect) and ourNon-Executive Directors. This was approved by shareholders at the 2018 AGM and is produced here for information only. COMPENSATION POLICY FOR EXECUTIVE DIRECTORS Purpose
attract and retain top executive talent
motivate executives to accomplish or exceed short-term business performance goals that drive long-term business objectives and deliver sustainable value to shareholders
align executive interests and rewards with the long-term returns delivered to shareholders
differentiate rewards based on quantitative assessments of business financial performance and individual contributions towards core objectives
Philosophy Foster meritocracy Ourpay-for-performance philosophy differentiates rewards based on business performance and individual contributions toward core objectives. Pay competitively The Compensation Committee reviews compensation annually and considers peer group and general industry benchmarks among several factors when making decisions on pay. Other factors include the mix of pay components in total direct compensation, prior year awards, changes in role or responsibilities, companyCompany financial performance, and individual performance. Emphasize variable, at risk pay subject to performance – the executive compensation framework As outlined below in the Executive Compensation Framework, a significant portion of our Executive Director’s compensation is at risk; dependent on the achievement of challenging annual and long-term performance targets and/or the performance of our share price. | | | | | TARGET COMPENSATION FRAMEWORK | | | | PAY COMPONENTTarget Compensation Framework | | Pay Component | | TARGET RANGETarget Range
(TOTAL PAY)Total Pay) | | GUARANTEED/AT RISK | Guaranteed/At Risk | | Base Salary | | | Up to 20% | | | | Guaranteed | | Target Annual Incentive | | | Up to 30% | | At Risk | Total Cash | | At Risk | | Total Cash | | | Not to exceed 50% | | | | | | Target LTI Performance Awards | | 25 - 40% | 30 – 50% | | | | At Risk | | Target LTI Time-Vested Awards | | | 20 -– 35% | | | | At Risk | | Total Equity | | | No less than 50% | | | | | |
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| | 20162019 PROXY STATEMENT C-1 B-1
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| | | DIRECTORS’ COMPENSATION POLICY | | |
Compensation Policy for Executive Directors | | | | | | | | Element | | Purpose | | How Component Operates | | | | Annual Base Salary | | Attract and retain top talent | | • Reviewed in intervals of24-36+ months • When reviewing base salary levels and determining increases, the Compensation Committee and the Board consider a variety of factors including: (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, and (6) role changes | | | | Annual Incentive Plan (“AIP”) | | Motivate Executive Directors to accomplish short-term business performance goals that contribute to long-term business objectives | | • Annual incentive target opportunities are established each year with reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, (6) role changes, and (7) prior year target • The Compensation Committee determines individual payout using the annual incentive plan design applicable to all managerial employees • TheA combination of Adjusted EBITDA performance formulaand revenue performance, weighted 75% and 25% respectively, formulaically determines incentive plan funding and the initial payout percentage for all participantsparticipants. The metrics and their contribution to the plan funding operate independently of one another • 100% Adjusted EBITDA performance to target = 100% contribution to the incentive pool funding and 100% initial individual payout for the Adjusted EBITDA metric • 100% revenue performance to target = 100% contribution to the incentive pool and 100% initial individual payout for the revenue metric • The initial payout percentage may be adjusted up or down based on a quantitative and qualitative assessment of individual performance vs objectives | | | | | • Maximum payout opportunity is capped at 200% of individual target • Threshold EBITDA performance will result in an initial payout/funding of 70%50% for the Adjusted EBITDA and revenue metrics with zero funding for below threshold performance
• Zero funding and zero initial payout ifAdditionally, Adjusted EBITDA performance is belowmust meet the minimum threshold for the revenue segment to fund • The Compensation Committee has discretion to reduce the fund by up to 30% if free cash flow falls short of objectives • In order to satisfy the performance-based pay exception of Section 162(m) of the U.S. Internal Revenue Code (the “Code”), Director payouts are determined initially using the following formula:
• Actual EBITDA performance x 2% x executive allocation percentage
• Annual incentive plan funding and payouts are then made according to the underlying EBITDA performance formula and individual payout percentage, subject to thea maximum limit of 200% of target cap on payouts
• Actual payouts and the performance metrics used to determine them will be disclosed in the Directors’ Compensation Report in the year payouts are made • The calculation of EBITDA and revenue performance for annual incentive plan purposes (which we refer to as “Bonus Funding EBITDA”) differs from reported Adjusted EBITDA and reported revenue because it is calculated using a standard foreign currency exchange rate established at the beginning of the year in order to eliminate the impact of currency exchange volatility on the performance assessment • Payout is intended to be delivered 100% in cash but may be delivered in a mixture of cash and restricted stock units at the Compensation Committee’s discretion • Payouts are subject to recoupment under the terms of Nielsen’s Clawback policyPolicy | | | | Long-Term Incentive (“LTI”) | | Deliver long-term sustainable performance and align Executive Director rewards with long-term returns delivered to shareholders | | • LTI award values are determined each year by reference to (1) our pay for performance philosophy, (2) market benchmark compensation data, (3) the Director’s individual performance and contributions to the success of the business in the prior year, (4) companyCompany performance, (5) current pay mix, (6) role changes, and (7) prior year award | | | | Performance Restricted Stock Units (“PRSUs”) | | Alignment with long-term shareholder return | | Long-Term Performance Plan (“LTPP”)
| | Alignment with long-term shareholder return | | • Subject to performance against twothree three-year cumulative performance metrics, free cash flow, and relative total shareholder return and revenue CAGR with assigned weighting of 60%50%, 25% and 40%25%, respectively | | | | | Performance Restricted Stock Units (“Performance RSUs”)
| | | | • Specific threshold, target and maximum performance metrics for three-year cumulative free cash flow performance will not be disclosed for competitive reasons but targets are designed to be aggressive and achievable and are fully aligned with our approved three-year strategic plan and long-term guidance issued to investors at the beginning of the performance period |
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| | 2019 PROXY STATEMENT B-2 |
| | | | | DIRECTORS’ COMPENSATION POLICY | | | | |
| | | | | | | | Element | | Purpose | | How Component Operates | | | | | • Targets and actual results used to determine payouts will be disclosed in the Director’s Compensation Report in the year that payouts are approved • Subject to recoupment under the terms of Nielsen’s Clawback Policy • Relative total shareholder return (TSR) is measured against a peer group used solely for this purpose. Companies in this peer group are selected to represent a comparable investment profile to Nielsen by virtue of their being in comparable businesses, or being representativeand having a similar financial profile and stock price correlation.
• Revenue is measured based on compounded annual growth rate (CAGR) over the three year period. Revenue targets are designed to be aggressive and achievable and are fully aligned with our approved three-year strategic plan and long-term guidance issued to investors at the beginning of the markets we serveperiod. • Represents approximately 50%60% of the annual LTI value |
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| | 2016 PROXY STATEMENT C-2
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| DIRECTORS’ COMPENSATION POLICY |
| | | | | | | Element | | Purpose | | How Component Operates | | | | | | | • Zero payout for performance below threshold • For performance at threshold, the payout opportunity is 50% and 100% for performance at target, 100% • Maximum payout opportunity is capped at 200% of target • PayoutsFor the relative TSR component, payouts capped at target if absolute total shareholder return is negative • No dividend equivalents on unearned performance RSUs • Subject to recoupment under the terms of Nielsen’s Clawback Policy | | | | Restricted Stock Units (“RSUs”) | | Stock Options
| | Alignment with shareholder return and retention | | • Four-year time-vested • Represents approximately 25%40% of LTI value • Maximum payout not to exceed 100% of the options at the end of the vesting period | | | Restricted Stock Units (“RSUs”)
| | Alignment with shareholder return and retention | | • Four-year time-vested
• Represents approximately 25% of LTI value
• Dividend-equivalents on RSU awards are accrued and delivered as additional RSUs upon vesting
• Maximum payout not to exceed 100% of shares at the end of the vesting period, plus any earned dividends equivalents (if applicable, whether on vested or unvested) | | | | Health And Welfare Plans, Perquisites Perquisites
| | Promote overall well-being and avoid distractions caused by unforeseen health/financial issues | | • Health and Welfare plans generally available to other employees, including medical insurance and savings accounts • De minimis financial planning and wellness allowances • Other benefits may include provision of transport •The cost of the Health and Welfare plans and perquisites provided changes in accordance with market conditions and will, therefore, determine the maximum amount that would be paid in the form of benefits during the period of this policy | | | | Pension | | Provide additional income in retirement and promote overall financial wellbeing | | Qualified Cash Balance Pension Plan (the “Qualified Plan”) • Plan frozen on August 31, 2006 • Prior to the freeze we added monthly basic and investment credits to each participants account • The basic credit equaled 3% of a participants eligible monthly compensation • At the point of freeze, all basic credits were stopped, but participants continue to receive investment credits • Participants became vested in the accrued benefits on the earlier of five years of service or when the participant reached normal retirement age (which is the later of age 65 or the fifth anniversary of the date the participant first became eligible to participate in the plan) Non-qualified Retirement Plan (the “Excess Plan”) • Plan frozen on August 31, 2006 • Available to certain management and highly compensated individuals • Prior to the freeze, the plan provided supplemental benefits to individuals whose benefits under the qualified plan are limited by the provisions of Section 415 and/or Section 401(a)(17) of the US tax code • The amount payable under the Excess Plan is equal to the difference between the benefit actually paid under the qualified plan and the amount that would have been payable had the applicable US tax code limitations not applied | | | | Other Retirement | | Attract and retain top talent | | 401(k) Savings Plan • Qualified plan available to all eligible employees, enables participants to save for retirement throughtax-advantaged combination of employee contributions and a company matching contribution • The company matching contribution matches $.50 per $1.00 of employee contribution up to 6% of pay and subject to IRS annual limits. Full vesting occurs after 2 years of service |
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| | 2019 PROXY STATEMENT B-3 |
| | | | | DIRECTORS’ COMPENSATION POLICY | | | | |
| | | | | | | | Element | | Purpose | | How Component Operates | | | | Relocation/Expat Assistance | | Attract top talent and provide career enhancing and personal development opportunities | | • Expatriate and relocation benefits are regularly benchmarked against other companies. Current benefits offered include, but are not limited to: • Shipment of goods and services • Home sale/lease termination • House hunting trips • Temporary housing • Housing allowance • Automobile disposition • Goods and services differential allowance • Car/driver allowance • Education fees and expenses for dependent children to age 19 • Home leave • Tax equalization • Tax preparation • Language and cultural training • Destination acclimation services |
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| | 2016 PROXY STATEMENT C-3
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| DIRECTORS’ COMPENSATION POLICY |
Performance Measure Selection The measures used under the AIP and the LTPP are reviewed and approved by the Compensation Committee annually. The other elements in the table above are not subject to the accomplishment of specific performance targets. We strive to create aNielsen’s culture that reflects our core values of Open, Simple,Connected, Useful, and Integrated.Personal. Our incentive compensation programs reinforce the values by focusingconnecting all of our employees on simple unifyingto core business objectives. To that end, the CEO and other executives participate in the same annual incentive plan applicable to managerial employees. TheBeginning in 2018, the plan is currentlywill be funded based on companythe achievement of Company EBITDA performance and Company revenue performance. The Adjusted EBITDA target for incentive plan funding purposes is the equivalent of the EBITDA target approved in our annual operating plan. The target is intended to deliver aggressive EBITDA growth over the prior year and offer a challenging yet achievable goal for participants. The revenue target is designed to be aggressive and achievable and is fully aligned with our annual operating plan and guidance issued to investors. Nielsen’s business EBITDA and revenue growth isare highly correlated to the creation of shareholder value and is anare effective measuremeasures of the Executive Director’s contributions to short-term companyCompany performance. Before approving the incentive funding the Committee reviews the Company’s annual free cash flow (“FCF”) performance and has the discretion to reduce the fund by up to 30% if performance falls short of objectives. There is no discretion to increase the incentive fund in the event that FCF exceeds objectives.
TwoThree cumulative three-year performance metrics measure performance under the LTPP. FCFFree Cash Flow (“FCF”), relative TSR and relative total shareholder return (“RTSR”)revenue CAGR were chosen due to their strong alignment with the long-term returns experienced by our shareholders. FCF is assigned a weighting of 60% to reflect the fact that executives have relatively more direct control over this metric.50% and both TSR and revenue CAGR are assigned a weighting of 25% each. Specific FCF targets cannot be disclosed for competitive reasons butreasons. Both FCF and revenue CAGR targets are aligned with the aggressive targets approved in the 3-yearthree-year strategic plan and with our long-term guidance issued to investors. RTSR was assigned a weighting of 40%.
Under the rules governing the design and operation of the AIP and LTPP, the Compensation Committee has the discretion to select other performance metrics and alter their weighting as business conditions may dictate in the future. Remuneration Policy for Other Employees The remuneration policy for other employees is based on the same philosophy and principles that govern the remuneration policy for Executive Directors. Annual salary reviews take into account companyCompany and individual performance, local pay and market conditions, and salary levels for similar roles in the relevant geographies. Senior executives are eligible to participate in the AIP and in LTI programs on similar terms as the Executive Directors. Managerial and professional employees are eligible to participate in the AIP provided for executives; opportunities vary by organizational level and an individual’s role. Some employees below the executive level are eligible to participate in the Stock Optionstock option and RSU components of the LTI program; opportunity levels are commensurate with organizational level. | | |
| | 2019 PROXY STATEMENT B-4 |
| | | | | DIRECTORS’ COMPENSATION POLICY | | | | |
Loss of Office and Service Agreements In general we do not provide employment agreements for Executive Directors. The principal terms of employment for Executive Directors are as provided to other eligible employees with the exception of certain de minimis benefits (described within) and certain payments provided in the event the Executive Director is terminated not for cause or resigns for good reason (as defined in the documents referenced below under “Potential Payments Upon Termination or Change-In-Control”Change In Control”). In certain circumstances the Compensation Committee may provide employment agreements for Executive Directors where it is essential for continued sound governance. Potential Payments Upon Termination or Change-In-ControlChange In Control Severance terms for Executive Directors are defined dependingin the U.S. Severance policy for Section 16 Officers and Senior Executives (the “Severance Policy”) approved by the Committee on the Executive Director’s prior service and eligibility, in either July 20, 2017. The Management Stockholder’s agreement connected with our former 2006 Stock Incentive Plan or the Executive Director’s offer of employment letter or where applicable, the Executive Director’s employment agreement. In the event of terminationfollowing is a summary of the Executive Director not for cause or his/her resignation for “good reason” asmaterial terms of the Severance Policy:
A) | Qualifying Termination Outside of the Change in Control Protection Period: If the Executive Director subject to the Severance Policy is terminated by the Company without Cause or resigns for Good Reason (as such terms are defined in the Severance Policy) at any time other than during the24-month period following a change in control (the “Change in Control Protection Period”), such individual has the right to payments equal to, with respect to the CEO, two times, or with respect to other Executive Directors, one times the sum of the Executive Director’s annual base salary and the average of the annual incentive payments paid to the Executive Director in the prior three years. |
B) | Qualifying Termination During the Change in Control Protection Period: If the Executive Director subject to the Severance Policy is terminated by the Company without Cause or resigns for Good Reason during the Change in Control Protection Period, the Executive Director has the right to payments equal to two times the sum of the Executive Director’s annual base salary and the average of the annual incentive payments paid to the Executive Director in the prior three years. |
Change in control is defined in the above documents, our severance policySeverance Policy and includes the acquisition of shares of the Company representing more than 40% of the Company’s capital stock, merger, consolidation or reorganization wherepre-transaction shareholders do not continue to hold at least 50% of the Company’s voting power, change in majority of the Board within a12-month period, and liquidation, dissolution or a material asset sale. The Severance Policy provides for: Base salary continuationfor a 280Gbest-after-tax cutback, which applies to any payments or benefits that individuals subject to the Severance Policy are entitled to receive that are “excess parachute payments” under the “golden parachute” excise tax rules of up to 24 months
Continuation of health benefits at active employee rates for the same period as salary continuationInternal Revenue Code.
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| | 2016 PROXY STATEMENT C-4
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| DIRECTORS’ COMPENSATION POLICY |
Annual incentive payment for the year of termination in accordance with the plan rules paid pro-rata based on service performed in the year of termination.
Executive outplacement services
Additionally, under the terms of the 2010 Nielsen Holdings Stock Incentive Plan (“2010 Plan”) if the Executive Director is terminated by the Company without “cause”“Cause” or the Executive Director resigns for “good reason”“Good Reason” (as thosesuch terms are defined in the plan document) they will forfeit all unvested equity as of the date of termination with the following exceptions: LTPP:PRSUs: Executive Directors will receive a payout on the regularly scheduled payout date reducedpro-rata to their service through the performance period, calculated as the number of days between the beginning of the performance period and the termination date divided by 1095.
Option and RSU Awards:Pro-rata vesting of the equity tranche that would have vested, but for the termination, in the 12 months following the termination date calculated by the number of days between the most recent vesting and the termination date divided by 365. The Committee has the discretion to adjust the above payments in the event of extraordinary circumstances including but not limited to approved retirements, death, and permanent disability. Change-In-ControlChange In Control Policy
For equity awards made in 2011 or later, underUnder the 2010 Plan, as amended, unvested options and RSUs do not vest automatically in the event of a change-in-control.change in control.
| | |
| | 2019 PROXY STATEMENT B-5 |
| | | | | DIRECTORS’ COMPENSATION POLICY | | | | |
Clawback Policy Our clawback policy requires the Executive Director, in all appropriate cases, to repay or forfeit any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the Executive Director, and anynon-vested equity-based awards previously granted to the Executive Director if: | | | | | The amount of the incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement or the correction of a material error; and | | | | | The Executive Director engaged in intentional misconduct that caused or partially caused the need for the restatement or caused or partially caused the material error,error; and | | | | | The amount of the incentive compensation that would have been awarded to the Executive Director, had the financial results been properly reported, would have been lower than the amount actually awarded. |
Recruitment of Executive Directors The compensation package for a new Executive Director will be set in accordance with the terms of the Directors’ Compensation Policy as set forth above or in force at the time of appointment or hiring. In determining the appropriate remuneration structure and levels, the Compensation Committee will take into consideration all relevant factors to ensure that arrangements are in the best interests of the Company and its shareholders. In addition, to facilitate the recruitment of an individual to an Executive Director position, the Compensation Committee can use cash and/or LTI awards tobuy-out previously-granted incentive awards and no limits will apply under this policy. For external hires and internal appointments wethe Company may provide certain relocation reimbursements or allowances including expatriate benefits within limits set by the Compensation Committee that fairly reimburse Executive Directors for expenses incurred and provide for a smooth transition free of unnecessary distractions. Consideration of Conditions Elsewhere in the Company The Compensation Committee does not consult with employees specifically on its Executive Director compensation policy and framework however, when determining pay for Executive Directors, the Committee takes into account several data elements including but not limited to: company and individual performanceperformance; | | |
| | 2016 PROXY STATEMENT C-5
|
| DIRECTORS’ COMPENSATION POLICY |
salary increase budgets provided for other employeesemployees; annual incentive plan funding levelslevels; local pay and market conditionsconditions; and market data provided by independent compensation consultantconsultant. Consideration of Shareholder Views On a regular basis, the Compensation Committee engages with shareholders to solicit direct input regarding its Executive Director compensation programs. Input provided during these meetings and from shareholder advisory firms is used to shape our compensation programs. The majority of shareholders continue to express support for our compensation programs. Illustration of Application of Compensation Policy for Executive Directors The estimated compensation amounts received by the Executive Directors which group currently includes only our CEO are shown in the following graph, for the first full year (2016) in which the policy applies.graph. The amounts show payments at three levels of performance – threshold,performance-threshold, target and maximum | | |
| | 2019 PROXY STATEMENT B-6 |
| DIRECTORS’ COMPENSATION POLICY |
For the purpose of this illustration the following components’ values are constant at each level of performance: Salary: reflects annualized rate for 20162018 | • | | Restricted stock units: planned grant date fair value in 201620181 |
| • | | Stock options: planned grant date fair value in 20161
|
Benefits: Estimated based on 20152017 figures and 20162018 premium or reimbursement rates including 401k401(k) savings match, health saving account plan match, relocation benefits, health and welfare perquisite and tax planning perquisite, and dividend equivalents accrued on unvested restricted stock units arising from the equity award granted on July, 26 2012 before the introduction of our dividend policyperquisite. Pension: reflects estimated aggregate change in the actuarial present value of accumulated benefits under the plan The following components’ values vary by each level of performance: AIP:Annual Incentive: reflects potential cash payouts based solely on the plan’s incentive funding formula
| • | | LTPP: reflects the fair value1 of PRSUs at grant date at target and percentage payouts of target in accordance with the plan design at threshold and maximum levels of performance. |
Both of the above values will differ from the actual payments earned by Mr. Barns under the 20152017 AIP and 20132015 LTPP and paid to him in February, 2016.2018. Payment details are disclosed in our 20162018 Proxy Statement under “Summary Compensation Table.” ($,000) 1 | Calculated in accordance with IFRS 2, Share-based Payments. For a discussion of the assumptions and methodologies used to value the awards granted in 20152017 please see Note 16 “Stock based“Share-Based compensation” to our audited consolidated financial statements, included in our Annual Report for the year ended December 31, 2015.2017. In all cases the values reported assume no share price change relative to closing price of a Nielsen share on the date of grant. |
| | |
| | 20162019 PROXY STATEMENT C-6 B-7
|
| DIRECTORS’ COMPENSATION POLICY |
($,000)
The Pension/Benefits category includes the following: Financial planning, relocation, dividend equivalents prior to the introduction of our dividend policy in 2013, and pension.
The Pension/Benefits category includes the following: Financial planning, relocation, dividend equivalents prior to the introduction of our dividend policy in 2013, and pension.
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| | 2016 PROXY STATEMENT C-7
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| DIRECTORS’ COMPENSATION POLICY | | | | |
Compensation Policy forNon-Executive Directors As of the effective date of this Policy, all of our Directors, with the exception of Mitch Barns, our CEO, areNon-Executive Directors. Purpose Nielsen’s Compensation Policy for ourNon-Executive Directors is designed to: attract and retain talented individuals to help oversee the Company as members of the Board of DirectorsBoard; align with the market value of the rolerole; and align with long-term shareholder returns. | | |
| | 2019 PROXY STATEMENT B-8 |
| | | | | DIRECTORS’ COMPENSATION POLICY | | | | |
Practice The Compensation Committee reviews theNon-Executive Director compensation program annually buttaking account of market benchmarking data to establish compensation levels that are competitive and serve the stated purpose. Market adjustments may be made toNon-Executive Director compensation following these reviews. Otherwise, the Compensation Committee generally intends to make adjustments every three years unless special circumstances such as market changes, require otherwise. The Committee last reviewed the program in December, 2015. The values quoted in each category are fixed, (i.e., do not vary subject to a performance condition)condition and therefore represent the current maximum payout opportunity. The Committee reviews market benchmarking data provided by its independent compensation consultant including information from the Company’s Executive Compensation Peer Group, as well as from general industry benchmarks to establish compensation levels that are competitive and serve the stated purpose.
| | | | | | | | Compensation Element | | How Component Operates | | Current Fee Structure (per annum) | | | | Board Fees | | • Annual retainer paid on a quarterly basis • Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | | $80,000 | | | | Board Chair Fee | | • Annual retainer payable on a quarterly basis; 50% in DSUs and 50% in cash • Director may elect to receive cash fees in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | | $150,000 | | | | Committee Chair Fees | | • Annual retainer payable on a quarterly basis • Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | | $80,000• Audit Committee: $25,000
• Compensation Committee: $20,000 • Nomination and Corporate Governance Committee: $15,000 | Board Chair | | | Lead Independent Director Fee | | • Annual retainer payable on a quarterly basis 50% in DSUs and 50% in cash • Director may elect to receive cash fees in DSUs
• DSUs accrue dividend equivalents in the form of additional DSUs
| | $150,000
| Committee Chair Fees | | • Annual retainer payable on a quarterly basis
• Director may elect to receive fees in cash or in DSUs1 • DSUs accrue dividend equivalents in the form of additional DSUs | | • Audit Committee: $25,000
• Compensation Committee: $20,000
• Nomination and Corporate Governance Committee: $15,000$30,000
| Lead Independent Director Fee | | | •Annual retainer payable on a quarterly basis
• Director may elect to receive fees in cash or in DSUs
• DSUs accrue dividend equivalents in the form of additional DSUsEquity Grant
| | $30,000
| Annual Equity Grant | | • Offered to allNon-Executive Directors • Executive compensation peer group plus general industry benchmark provided by Meridian are used as benchmarks • Annual equity grant delivered in DSUs vests in four equal quarterly installments • DSUs accrue dividend equivalents in the form of additional DSUs | | $160,000$160,000
|
1 | | The Company can, but does not have to offer this choice to theNon-Executive Directors. |
Non-Executive Directors will only receive compensation for those services outlined in this Policy. There are no contracts or agreements that provide guaranteed amounts payable for service as aNon-Executive Director of Nielsen, and there are no similar arrangements that provide for any guaranteed compensation (other than for any accrued or deferred amounts, if applicable, for services rendered as aNon-Executive Director) upon aNon-Executive Director’s termination of service from our Board of Directors. The Compensation Committee may in exceptional circumstances provide compensation that exceeds or is different from that payable toNon-Executive Directors but is aligned with the policy for Executive Directors. An example may include when an Executive Director transitions from companyCompany employee toNon-Executive Director . Director. In these cases, the Committee | | |
| | 2016 PROXY STATEMENT C-8
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| DIRECTORS’ COMPENSATION POLICY |
may find it appropriate to elect to continue offering components of the Executive Director compensation program for the former employee as it did for Mr. Calhoun (disclosed in the Directors’ Compensation Report).employee. When recruiting for a new externalNon-Executive Director, the Committee or Board will structure pay in line with the existing policy forNon-Executive Directors set out above. | | |
| | 2019 PROXY STATEMENT B-9 |
Constant Currency Presentation We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is anon-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitatingperiod-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results. This calculation may differ from similarly-titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP nor should such amounts be considered in isolation. No adjustment has been made to foreign currency exchange transaction gains or losses in the calculation of constant currency net income. The below table presents a reconciliation from revenue on a reported basis to revenue on a constant currency basis for the year December 31, 2018. | | | | | | | | | | | | | | | | | | | | | (IN MILLIONS) (UNAUDITED) | | Year Ended December 31, 2018 Reported | | | Year Ended December 31, 2017 Reported | | | % Variance 2018 vs. 2017 Reported | | | Year Ended December 31, 2017 Constant Currency | | | % Variance 2018 vs. 2017 Constant Currency | | Revenues by segment | | | | | | | | | | | | | | | | | | | | | Developed Markets | | $ | 1,922 | | | $ | 1,999 | | | | (3.9)% | | | $ | 2,025 | | | | (5.1)% | | Emerging Markets | | | 1,145 | | | | 1,164 | | | | (1.6)% | | | | 1,123 | | | | 2.0% | | Core Buy | | $ | 3,067 | | | $ | 3,163 | | | | (3.0)% | | | $ | 3,148 | | | | (2.6)% | | Corporate | | $ | 30 | | | $ | 68 | | | | (55.9)% | | | $ | 68 | | | | (55.9)% | | Buy | | $ | 3,097 | | | $ | 3,231 | | | | (4.1)% | | | $ | 3,216 | | | | (3.7)% | | Audience Measurement (Video and Text) | | $ | 2,446 | | | $ | 2,308 | | | | 6.0% | | | $ | 2,311 | | | | 5.8% | | Audio | | | 497 | | | | 501 | | | | (0.8)% | | | | 500 | | | | (0.6)% | | Marketing Effectiveness | | | 337 | | | | 350 | | | | (3.7)% | | | | 351 | | | | (4.0)% | | Core Watch | | $ | 3,280 | | | $ | 3,159 | | | | 3.8% | | | $ | 3,162 | | | | 3.7% | | Corporate/Other Watch | | | 138 | | | | 182 | | | | (24.2)% | | | | 181 | | | | (23.8)% | | Watch | | $ | 3,418 | | | $ | 3,341 | | | | 2.3% | | | $ | 3,343 | | | | 2.2% | | Total Core Buy and Watch | | $ | 6,347 | | | $ | 6,322 | | | | 0.4% | | | $ | 6,310 | | | | 0.6% | | Total | | $ | 6,515 | | | $ | 6,572 | | | | (0.9)% | | | $ | 6,559 | | | | (0.7)% | |
Net Income to Adjusted EBITDA Reconciliation We define Adjusted EBITDA as net income or loss from our consolidated statements of operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, impairment of goodwill and other long-lived assets, share-based compensation expense and othernon-operating items from our consolidated statements of operations as well as certain other items that arise outside the ordinary course of our continuing operations specifically described below. Restructuring charges: We exclude restructuring expenses, which primarily include employee severance, office consolidation and contract termination charges. | | |
| | 2019 PROXY STATEMENT C-1 |
| | | | | INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES | | | | |
Impairment of goodwill and other long-lived assets: We exclude the impact of charges related to the impairment of goodwill and other long-lived assets. Given the significance of the impairment of goodwill and other long-lived assets, we reported it separately in the consolidated statements of operations. Share-based compensation expense: We exclude the impact of costs relating to share-based compensation. Othernon-operating expenses, net: We exclude foreign currency exchange transaction gains and losses primarily related to intercompany financing arrangements as well as othernon-operating income and expense items, such as, gains and losses recorded on business combinations or dispositions, sales of investments, net income attributable to noncontrolling interests and early redemption payments made in connection with debt refinancing. Other items: To measure operating performance, we exclude certain expenses and gains that arise outside the ordinary course of our continuing operations. Such costs primarily include legal settlements, acquisition related expenses, business optimization costs and other transaction costs. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments, to evaluate and fund incentive compensation programs and to compare our results to those of our competitors. In addition to Adjusted EBITDA being a significant measure of performance for management purposes, we also believe that this presentation provides useful information to investors regarding financial and business trends related to our results of operations and that whennon-GAAP financial information is viewed with GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance. Adjusted EBITDA should not be considered as an alternative to net income or loss, operating income, cash flows from operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance or cash flows as measures of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. | | |
| | 2019 PROXY STATEMENT C-2 |
| | | | | INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES | | | | |
The below table presents a reconciliation of net income and Adjusted EBITDA for the years ended December 31, 2018, 2017 and 2016: | | | | | | | | | | | | | | | Year Ended December 31, | | (IN MILLIONS) | | 2018 | | | 2017 | | | 2016 | | Net income/(loss) | | $ | (712 | ) | | $ | 429 | | | $ | 502 | | Interest expense, net | | | 386 | | | | 370 | | | | 329 | | (Benefit)/provision for income taxes | | | (182 | ) | | | 388 | | | | 309 | | Depreciation and amortization | | | 675 | | | | 640 | | | | 603 | | EBITDA | | | 167 | | | | 1,827 | | | | 1,743 | | Othernon-operating (income)/expense, net | | | 33 | | | | 27 | | | | (10 | ) | Restructuring charges | | | 139 | | | | 80 | | | | 105 | | Impairment of goodwill and other long-lived assets | | | 1,413 | | | | — | | | | — | | Share-based compensation expense | | | 35 | | | | 45 | | | | 51 | | Other items1 | | | 63 | | | | 45 | | | | 36 | | Adjusted EBITDA | | $ | 1,850 | | | $ | 2,024 | | | | $1,925 | |
1 | | For the year ended December 31, 2018 other items primarily consist of business optimization costs, including strategic review costs, and transaction related costs. For the year ended December 31, 2017, other items primarily consist of transaction related costs and business optimization costs. For the year ended December 31, 2016, other items primarily consist of business optimization costs. |
Net Income and Adjusted EBITDA on constant currency basis The table below presents a reconciliation of Net income and Adjusted EBITDA on a reported basis to a constant currency basis for the year ended December 31, 2018. | | | | | | | | | | | | | | | | | | | | | (IN MILLIONS) (UNAUDITED) | | Year Ended December 31, 2018 Reported | | | Year Ended December 31, 2017 Reported | | | % Variance 2018 vs. 2017 Reported | | | Year Ended December 31, 2017 Constant Currency | | | % Variance 2018 vs. 2017 Constant Currency | | Net Income/(Loss) attributable to Nielsen Shareholders | | | $ (712) | | | | $ 429 | | | | NM% | | | | $ 418 | | | | NM% | | Adjusted EBITDA | | | $1,850 | | | | $2,024 | | | | (8.6)% | | | | $2,008 | | | | (7.9)% | |
Free cash flow We define free cash flow as net cash provided by operating activities, plus contributions to the Nielsen Foundation, less capital expenditures, net. We believe providing free cash flow information provides valuable supplemental liquidity information regarding the cash flow that may be available for discretionary use by us in areas such as the distributions of dividends, repurchase of common stock, voluntary repayment of debt obligations or to fund our strategic initiatives, including acquisitions, if any. However, free cash flow does not represent residual cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from free cash flow. Key limitations of the free cash flow measure include the assumptions that we will be able to refinance our existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free cash flow is not a presentation made in accordance with GAAP. | | |
| | 2019 PROXY STATEMENT C-3 |
| | | | | INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES | | | | |
Normalized Cash Flow The reconciliation of normalized free cash flow to net cash provided by operating activities in the last three years is provided below: | | | | | | | | | | | | | Free Cash Flow1 ($ in millions – as reported) | | 2018 | | | 2017 | | | 2016 | | Net cash provided by operating activities | | $ | 1,058 | | | $ | 1,310 | | | $ | 1,296 | | Capital expenditures, net | | | (516 | ) | | | (447 | ) | | | (391 | ) | Free Cash Flow | | $ | 542 | | | $ | 863 | | | $ | 905 | | Non-recurring contribution to the Nielsen Foundation | | | — | | | | — | | | | 36 | | Normalized Free Cash Flow | | $ | 542 | | | $ | 863 | | | $ | 941 | |
1 | | We define normalized free cash flow as net cash provided by operating activities, plus contributions to the Nielsen Foundation less capital expenditures, net. |
Adjusted Earnings per Share We define adjusted earnings per share as net income attributable to Nielsen shareholders per share (diluted) from continuing operations from our consolidated statements of operations, excluding depreciation and amortization associated with acquired tangible and intangible assets, restructuring charges, impairment of goodwill and other long-lived assets, share-based compensation expense, othernon-operating items from our consolidated statements of operations and certain other items considered unusual ornon-recurring in nature, adjusted for income taxes related to these items. Management believes that thisnon-GAAP measure is useful in providingperiod-to-period comparisons of the results of the Company’s ongoing operating performance. | | |
| | 2019 PROXY STATEMENT C-4 |
NIELSEN 2019 STOCK INCENTIVE PLAN The purpose of the Plan is to aid the Company and its Subsidiaries in recruiting and retaining key employees, directors or other service providers and to motivate such employees, directors or other service providers to exert their best efforts on behalf of the Company and its Subsidiaries by providing incentives through the granting of Awards. The Company expects that it will benefit from the added interest which such key employees, directors or other service providers will have in the welfare of the Company as a result of their proprietary interest in the Company’s success. The following capitalized terms used in the Plan have the respective meanings set forth in this Section 2: (a) Affiliate: With respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with such Person or any other Person designated by the Committee in which any Person has an interest. (b) Award: An Option, Stock Appreciation Right or OtherStock-Based Award granted pursuant to the Plan. (c) Board: The Board of Directors of the Company. (d) Change in Control: the occurrence of any of the following events: (i) the sale or disposition, in one or a series of related transactions, of all or substantially all, of the assets of the Company to any Person or Group other than the Permitted Holders; (ii) any Person or Group, other than the Permitted Holders, is or becomes the Beneficial Owner (except that a Person shall be a “Beneficial Owner” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 40% of the total voting power of the voting stock of the Company (or any entity which controls the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; (iii) a reorganization, recapitalization, merger or consolidation (a “Corporate Transaction”) involving the Company, unless securities representing 50% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company or the corporation resulting from such Corporate Transaction (or the parent of such corporation) are held subsequent to such transaction by the Person or Persons who were the Beneficial Owners of the outstanding voting securities entitled to vote generally in the election of directors of the Company immediately prior to such Corporate Transaction; or (iv) during any rolling twelve (12) month period looking back from any given date, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority | | |
| | 2019 PROXY STATEMENT C-9D-1 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
of the directors of the Company, then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved (any such director, an “Incumbent Director”)) cease for any reason to constitute a majority of the Board, then in office;provided, that, no individual shall be an Incumbent Director who is elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any Person other than the Board.(e) Code: The Internal Revenue Code of 1986, as amended, or any successor thereto, and the regulations and guidance promulgated thereunder. (f) Committee: (i) The Compensation Committee of the Board, or (ii) any subcommittee consisting solely of at least two individuals who are intended to qualify as“Non-Employee Directors” within the meaning ofRule 16b-3 under the Exchange Act (or any successor rule thereto) and “independent directors” within the meaning of the NYSE listed company rules, to which the Compensation Committee of the Board has delegated any of its duties, or such other committee of the Board (including, without limitation, the full Board), in any such case to which the Compensation Committee of the Board has delegated power to act under or pursuant to the provisions of the Plan, as applicable. (g) Company: Nielsen Holdings plc, a company incorporated in England and Wales. (h) Effective Date: May 21, 2019, if this is the date on which the Plan was approved by the Company’s shareholders. (i) Employment: The term “Employment” as used herein shall be deemed to refer to (i) a Participant’s employment if the Participant is an employee of the Company or any of its Subsidiaries, (ii) a Participant’s services, if the Participant is another form of service provider to the Company or any of its Subsidiaries, and (iii) a Participant’s services as anon-employee director, if the Participant is anon-employee member of the Board. (j) Exchange Act: The Securities Exchange Act of 1934, as amended, or any successor thereto. (k) Fair Market Value: Fair Market Value means, on a given date, (i) if the Shares are listed on a national securities exchange, the closing sales price of a Share reported on the primary exchange on which the Shares are listed and traded on such date, or, if there are no such sales on that date, then on the last preceding date on which such sales were reported; (ii) if the Shares are not listed on any national securities exchange but are quoted in an inter-dealer quotation system on a last sale basis, the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; or (iii) if the Shares are not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last sale basis, the amount determined by the Committee in good faith to be the fair market value of a Share using a reasonable valuation method that is consistent with the requirements of Section 409A of the Code and the regulations thereunder. (l) Group: means “group,” as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act. (m) ISO: An Option that is also an incentive stock option granted pursuant to Section 6(d) of the Plan. (n) Option: A stock option granted pursuant to Section 6 of the Plan. (o) Option Price: The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan. (p) Other Stock-Based Awards: Awards granted pursuant to Section 8 of the Plan. | | |
| | 2019 PROXY STATEMENT D-2 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
(q) Participant: An employee, director or other service provider of the Company or any of its Subsidiaries who is selected by the Committee to participate in the Plan. (r) Performance Criteria: means specific levels of performance of the Company (and/or one or more of the Company’s Affiliates, divisions or operational and/or business units, business segments, administrative departments, or any combination of the foregoing) or any Participant, which may be determined in accordance with GAAP or on anon-GAAP basis including, but not limited to, one or more of the following measures: (i) terms relative to a peer group or index; (ii) basic, diluted, or adjusted earnings per share; (iii) sales or revenue; (iv) earnings before interest, taxes, and other adjustments (in total or on a per share basis); (v) cash available for distribution; (vi) basic or adjusted net income; (vii) returns on equity, assets, capital, revenue or similar measure; (viii) level and growth of dividends; (ix) the price or increase in price of Common Stock; (x) total shareholder return; (xi) total assets; (xii) growth in assets, new originations of assets, or financing of assets; (xiii) equity market capitalization; (xiv) reduction or other quantifiable goal with respect to general and/or specific expenses; (xv) equity capital raised; (xvi) mergers, acquisitions, increase in enterprise value of Affiliates, Subsidiaries, divisions or business units or sales of assets of Affiliates, Subsidiaries, divisions or business units or sales of assets; or (xvii) any combination of the foregoing. Any one or more of the Performance Criteria may be stated as a percentage of another Performance Criteria, or used on an absolute or relative basis to measure the performance of the Company and/or one or more Affiliates as a whole or any divisions or operational and/or business units, business segments, administrative departments of the Company and/or one or more Affiliates or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Criteria may be compared to the performance of a selected group of comparison companies, or a published or special index that the Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices. (s) Permitted Holder: Any and all of an employee benefit plan (or trust forming a part thereof) maintained by (i) the Company or (ii) any corporation or other Person of which a majority of its voting power of its voting equity securities or equity interest is owned, directly or indirectly, by the Company. (t) Person: “Person” as defined in Section 3(a)(9) of the Exchange Act;provided, that references to “Person” within the defined term “Change in Control” shall mean a “person” as defined in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the Exchange Act. (u) Plan: The Nielsen 2019 Stock Incentive Plan, as it may be amended from time to time. (v) Prior Plan: The Amended and Restated Nielsen 2010 Stock Incentive Plan. (w) Shares: Shares of common stock of the Company. (x) Stock Appreciation Right: A stock appreciation right granted pursuant to Section 7 of the Plan. (y) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the Code (or any successor section thereto), or any Subsidiary of the Company, or any Affiliate of the Company that satisfies the definition of “service recipient” within the meaning of TreasuryRegulation Section 1.409A-1 (or any successor regulation), with respect to which the Person is a “service provider” (within the meaning of TreasuryRegulation Section 1.409A-1(or any successor regulation)). 3. | Shares Subject to the Plan |
(a) Subject to Section 9, the total number of Shares which may be available for Awards under the Plan is the sum of (i) 7,200,000 Shares plus (ii) the number of Shares reserved for purposes of the Prior Plan on the Effective Date that is in excess of the number of Shares then subject to outstanding awards granted under the Prior Plan plus (iii) any Shares underlying awards outstanding under the Prior Plan that, on or after the Effective Date, expire or are canceled, forfeited or terminated without issuance to the holder thereof of the full number of shares | | |
| | 2019 PROXY STATEMENT D-3 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
of Common Stock to which the award related and thereupon become available for grant under the Plan pursuant to Section 5 and the maximum number of Shares for which ISOs may be granted is 7,200,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares shall reduce the total number of Shares available under the Plan. (b) Shares related to Awards or portions of Awards outstanding under the Plan at any time, or awards or portions of awards outstanding under the Prior Plan on the Effective Date, that are (i) forfeited, terminated, canceled, or expire unexercised, (ii) withheld or tendered to satisfy tax withholding obligations, the aggregate Option Price on the exercise of Options or the purchase price for any other Award (or the aggregate exercise price purchase price for an award under the Prior Plan), or (iii) repurchased by the Company, in each case, shall immediately become available for new Awards. If an Award or award granted under the Prior Plan that is outstanding on the Effective Date is settled for cash (in whole or in part) or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award or Prior Plan award (including in connection with payment in Shares on exercise of a Stock Appreciation Right or the equivalent thereof under the Prior Plan) such Shares shall, to the extent of such cash settlement ornon-issuance, immediately become available for new Awards. (c) Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or any of its Subsidiaries or a company acquired by the Company or with which the Company combines, subject to the limitations of Sections 6(f) and 7(d) below. The number of Shares underlying awards made in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or any of its Subsidiaries or with which the Company or any of its Subsidiaries combines shall not be counted against the aggregate number of Shares available for Awards under the Plan, nor shall the Shares subject to such substitute awards become available for new Awards under the circumstances described in Section 3(b). In addition, in the event that a company acquired by the Company or any of its Subsidiaries or with which the Company or any of its Subsidiaries combines has shares available under apre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of suchpre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for issuance;provided, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of thepre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any of its Subsidiaries prior to such acquisition or combination. (a) The Plan shall be administered by the Committee;provided, that the Board may, in its sole discretion, take any action delegated to the Committee under this Plan as it may deem necessary. The Committee (or the Board, as applicable) may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are intended to qualify as“Non-Employee Directors” within the meaning ofRule 16b-3 under the Exchange Act (or any successor rule thereto) and “independent directors” within the meaning of the NYSE listed company rules, and such other committee of the Board (including, without limitation, the full Board), in any such case to which the Compensation Committee of the Board has delegated power to act under or pursuant to the provisions of the Plan, as applicable. (b) In each case subject to Section 15 of the Plan, the Committee is authorized to (i) interpret the Plan, (ii) establish, amend and rescind any rules and regulations relating to the Plan, (iii) make any other determinations that it deems necessary or desirable for the administration of the Plan, including, without limitation, determining the type, number, vesting requirements, Performance Criteria (or other objective/subjective goals (if any)) and their degree of satisfaction, and other features and conditions of such Awards and amending such Awards. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner | | |
| | 2019 PROXY STATEMENT D-4 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
and to the extent the Committee deems necessary or desirable. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors). The Committee shall have the full power and authority to establish the terms and conditions of any Award consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions). The Committee may make Awards to Participants who are subject to the laws of nations other than the United States, which Awards may have terms and conditions that differ from the terms of Awards granted to Participants in the United States as provided elsewhere in the Plan for the purpose of complying with foreign laws. (c) The Committee shall require payment of any amount it may determine to be necessary to withhold for federal, state, local or other taxes as a result of the exercise, grant or vesting of an Award and the Company or any of its Subsidiaries shall have the right and is authorized to withhold any applicable withholding taxes in respect to the Award, its exercise or any payment or transfer under or with respect to the Award and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes, in each case up to the maximum statutory rates. To the extent permitted by the Committee, a Participant may elect to pay a portion or all of such withholding taxes by (i) delivery of Shares, provided that such Shares have been held by the Participant for such period of time as the Company’s accountants may require or (ii) having Shares with a Fair Market Value equal to the amount withheld by the Company from any Shares that would have otherwise been received by the Participant (i.e., through a “net settlement” of such tax withholding due). No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date. The maximum number of Shares in respect of which Options or Stock Appreciation Rights may be granted during a fiscal year of the Company to any Participant, other than anon-employee member of the Board, shall be 2,000,000. The maximum number of Shares in respect of which Other Stock-Based Awards may be granted during a fiscal year of the Company to any Participant, other than anon-employee member of the Board, shall be 1,000,000. The maximum number of Shares subject to Awards granted during a single fiscal year to anynon-employee member of the Board, taken together with any cash fees paid to suchnon-employee member of the Board during the fiscal year, shall not exceed $800,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes). 6. | Terms and Conditions of Options |
Options granted under the Plan shall benon-qualified stock options unless specifically identified as ISOs for federal income tax purposes, as determined by the Committee and evidenced by the related Award agreements, and shall be subject to such other terms and conditions not inconsistent therewith. In addition to the foregoing, except as otherwise determined by the Committee and evidenced by the related Award agreements, the Options shall also be subject to the following terms and conditions: (a) Option Price. The Option Price per Share shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of a Share on the date an Option is granted (other than in the case of Options granted in substitution of previously granted awards, as described in Section 3). For the avoidance of doubt, to the extent required by the laws of England and Wales, the Option Price shall not be less than the nominal value per Share in respect of which the Option is being exercised. (b) Exercisability. Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more | | |
| | 2019 PROXY STATEMENT D-5 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
than ten years after the date it is granted;provided, that, in the event that any portion of an exercisable Option is scheduled to expire on such tenth anniversary date or otherwise scheduled to expire pursuant to the applicable Award agreement and both (x) the date on which such portion of the Option is scheduled to expire falls during a Company blackout trading period applicable to a Participant (whether such period is imposed at the election of the Company or is required by applicable law to be imposed) and (y) the exercise price per Share of such portion of the Option is less than the Fair Market Value, then on the date that such portion of the Option is scheduled to expire, such portion of the Option (to the extent not previously exercised by such Participant) shall be automatically exercised on behalf of such Participant through a net settlement of both the exercise price and the minimum withholding taxes due (if any) upon such automatic exercise (as described in Section 6(c)(ii)(D), below), and the net number of Shares resulting from such automatic exercise shall be delivered to such Participant as soon as practicable thereafter. (c) Exercise of Options. Except as otherwise provided in the Plan or in an Award agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of Section 6 of the Plan, the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received by the Company pursuant to clauses (i) or (ii) in the immediately following sentence. The aggregate Option Price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise at the election of a Participant: (i) in cash or its equivalent (e.g., by check); (ii) by such other method as the Committee may permit, in its sole discretion, including, without limitation (A) in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee,provided, that such Shares have been held by such Participant for such period of time as the Company’s accountants may require to avoid adverse accounting treatment; (B) partly in cash and partly in such Shares; (C) if there is a public market for the Shares at such time, and subject to such rules as may be established by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased in all events in accordance with applicable law; or (D) through a “net settlement” feature (i.e., having Shares with a Fair Market Value equal to the aggregate Option Price in respect of the portion of the Option to be exercised withheld by the Company from any Shares that would have otherwise been received by the Participant). No Participant shall have any rights to dividends or other rights of a shareholder with respect to Shares subject to an Option until such Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan. (d) ISOs. The Committee may grant Options under the Plan that are intended to be “incentive stock options” (within the meaning of Section 422 of the Code) (“ISOs”). Such ISOs shall comply with the requirements of Section 422 of the Code (or any successor section thereto). No ISO may be granted to any Participant who at the time of such grant, owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Subsidiaries, unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who disposes of Shares acquired upon the exercise of an ISO either (x) within two years after the date of grant of such ISO or (y) within one year after the transfer of such Shares to the Participant, shall notify the Company of such disposition and of the amount realized upon such disposition. All Options granted under the Plan are intended to be nonqualified stock options, unless the applicable Award agreement expressly states that the Option is intended to be an ISO. If an Option is intended to be an ISO, and, if for any reason such Option (or portion thereof) shall not qualify as an ISO, then, to the extent of suchnon-qualification, such Option (or portion thereof) shall be regarded as a nonqualified stock option granted under the Plan;provided that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to nonqualified stock options. In no event shall any member of the Committee, the Company or any of its Subsidiaries (or their respective employees, officers or directors) have any liability to any Participant (or any other Person) due to the failure of an Option to qualify for any reason as an ISO. | | |
| | 2019 PROXY STATEMENT D-6 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
(e) Attestation. Wherever in this Plan or any Award agreement a Participant is permitted to pay the Option Price or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option. (f) Repricing of Options; No Dividend Equivalent Rights. (i) Notwithstanding any provision herein to the contrary, the repricing of an Option, once granted hereunder, is prohibited without prior approval of the Company’s shareholders. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of an Option to lower the Option Price; (ii) any other action that is treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing for cash or canceling an Option in exchange for another Award at a time when the Option Price is greater than the Fair Market Value of the underlying Shares, unless the cancellation and exchange occurs in connection with a change in capitalization or similar change permitted under Section 9(a) below. Such cancellation and exchange would be considered a “repricing” regardless of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant. (ii) Except as may otherwise be permitted under Section 9(a), there shall be no dividend equivalent rights granted in respect of any Option. 7. | Terms and Conditions of Stock Appreciation Rights |
(a) Grants. The Committee also may grant (i) a Stock Appreciation Right independent of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a portion thereof. A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be granted at the time the related Option is granted or at any time prior to the exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option (or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the same terms and conditions as such Option except for such additional limitations as are contemplated by this Section 7 (or such additional limitations as may be included in an Award agreement). (b) Terms. The exercise price per Share of a Stock Appreciation Right shall be an amount determined by the Committee but in no event shall such amount be less than 100% of the Fair Market Value of a Share on the date the Stock Appreciation Right is granted (other than in the case of Stock Appreciation Rights granted in substitution of previously granted awards, as described in Section 3);provided, that in the case of a Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, the exercise price may not be less than the Option Price of the related Option; andprovided,further, that the exercise price of a Stock Appreciation Right that is granted in exchange for an Option may be less than the Fair Market Value on the grant date if such exercise price is equal to the Option Price of the exchanged Option. For the avoidance of doubt, to the extent required by the laws of England and Wales, the exercise price per Share of a Stock Appreciation Right shall not be less than the nominal value per Share in respect of which the Stock Appreciation Right is being exercised. Each Stock Appreciation Right granted independent of an Option shall entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by the Stock Appreciation Right. Each Stock Appreciation Right granted in conjunction with an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any portion thereof, and to receive from the Company in exchange therefor an amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the Option Price per Share, times (ii) the number of Shares covered by the Option, or portion thereof, which is surrendered. The date a notice of exercise is received by the Company shall be the exercise date. Payment to the Participant shall be made in Shares or in cash, or partly in Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined by the Committee. Stock Appreciation Rights may be exercised from time to time upon actual receipt by the Company of | | |
| | 2019 PROXY STATEMENT D-7 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
written notice of exercise stating the number of Shares with respect to which the Stock Appreciation Right is being exercised. No fractional Shares will be issued in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should so determine, the number of Shares will be rounded downward to the next whole Share. (c) Limitations. The Committee may impose, in its discretion, such conditions upon the exercisability of Stock Appreciation Rights as it may deem fit, but in no event shall a Stock Appreciation Right be exercisable more than ten years after the date it is granted. (d) Repricing of Stock Appreciation Rights; No Dividend Equivalent Rights. (i) Notwithstanding any provision herein to the contrary, the repricing of a Stock Appreciation Right, once granted hereunder, is prohibited without prior approval of the Company’s shareholders. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of a Stock Appreciation Right to lower its exercise price; (ii) any other action that is treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing for cash or canceling a Stock Appreciation Right in exchange for another Award at a time when its exercise price is greater than the Fair Market Value of the underlying Shares, unless the cancellation and exchange occurs in connection with a change in capitalization or similar change permitted under Section 9(a) of the Plan. Such cancellation and exchange would be considered a “repricing” regardless of whether it is treated as a “repricing” under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant. (ii) Except as may otherwise be permitted under Section 9(a), there shall be no dividend equivalent rights granted in respect of any Stock Appreciation Right. 8. | Other Stock-Based Awards |
The Committee, in its sole discretion, may grant or sell Awards of Shares, Awards of restricted Shares, Awards of restricted stock units, and Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of Shares (including dividend equivalent rights) (such Awards, “Other Stock-Based Awards”). Such OtherStock-Based Awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive, or vest with respect to, one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of Performance Criteria or other objectives. OtherStock-Based Awards may be granted alone or in addition to any other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee shall determine to whom and when OtherStock-Based Awards will be made, the number of Shares to be awarded under (or otherwise related to) such OtherStock-Based Awards, whether such OtherStock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares, and all other terms and conditions of such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid andnon-assessable). For the avoidance of doubt, to the extent required by the laws of England and Wales, the price paid per Share for Shares awarded in respect of OtherStock-Based Awards shall not be less than the nominal value of the underlying Share. Dividend equivalents granted in connection with OtherStock-Based Awards shall be subject to the same vesting conditions that apply to such OtherStock-Based Awards. 9. | Adjustments Upon Certain Events |
Notwithstanding any other provisions in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan: (a) Generally. In the event of any Share dividend or split, reorganization, recapitalization, merger, consolidation,spin-off, combination, or transaction or exchange of Shares or other corporate exchange, any equity | | |
| | 2019 PROXY STATEMENT D-8 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
restructuring (as defined under Financial Accounting Standards Board (FASB) Accounting Standards Codification 718), or any distribution to shareholders other than regular cash dividends or any transaction similar to the foregoing, the Committee shall make such substitution or adjustment as it deems reasonably necessary to address, on an equitable basis, the effect of such event (subject to Section 19), as to (i) the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares for which Options or Stock Appreciation Rights may be granted during a fiscal year to any Participant, (iii) the maximum number of Other Stock-Based Awards that may be granted during a fiscal year to any Participant, (iv) the Option Price or exercise or purchase price of any Award, (v) any applicable performance measures (including, without limitation, Performance Criteria) and/or (vi) any other affected terms of such Awards. (b) Change in Control. In the event of a Change in Control that occurs after the Effective Date, unless the Committee otherwise provides in any applicable Award agreement at the time of the initial grant or in connection with the Change in Control: (i) If the successor or acquiring entity in the Change in Control does not agree to provide for the issuance of substitute Awards on an equitable basis in a manner consistent with Section 9(a) of the Plan (such Awards, “Substitute Awards”), as determined by the Committee in its sole discretion;provided, that an Award will only constitute a Substitute Award under this Plan if it is denominated in shares of publicly traded stock which are traded on an established U.S. or U.K. securities exchange, then (x) any outstanding Awards held by a Participant at the effective time of such Change of Control that are unexercisable or otherwise unvested or subject to lapse restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions and (y) the Committee shall (subject to Section 19 of the Plan), (A) cancel Awards for fair value (as determined in the sole discretion of the Committee), to the extent permitted under Section 409A of the Code, which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of value of the consideration to be paid in the Change in Control transaction to holders of the same number of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights) over the aggregate Option Price or exercise price of such Options or Stock Appreciation Rights, or (B) provide that for a period of at least ten (10) days prior to the Change in Control, such Awards shall be exercisable, to the extent applicable, as to all Shares subject thereto and the Committee may further provide that upon the occurrence of the Change in Control, such Awards shall terminate and be of no further force and effect. For the avoidance of doubt, pursuant to clause (A) above, the Committee may cancel Options and Stock Appreciation Rights for no consideration if the aggregate Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights is less than or equal to the aggregate Option Price of such Options or exercise price of such Stock Appreciation Rights. (ii) If the successor or acquiring entity in the Change in Control does agree to provide for the issuance of Substitute Awards, then any outstanding Awards held by a Participant at the effective time of such Change of Control that are unexercisable or otherwise unvested or subject to lapse restrictions shallnot automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions, as the case may be, as of the date of the Change in Control;provided, that if, at any time during thetwo-year period following a Change in Control the Participant’s Employment with the Company and its Subsidiaries is terminated under a circumstance that would give rise to the Participant’s right to the payment of severance compensation pursuant to any Company or Subsidiary severance plan, policy, arrangement or agreement applicable to such Participant as of the date of Participant’s termination of Employment, anythen-unvested Awards outstanding hereunder shall automatically be deemed exercisable or otherwise vested or no longer subject to lapse restrictions as of the date of such termination. (iii) If the Committee establishes terms for the vesting or exercisability of any Award in connection with a Change in Control that vary from the provisions set forth above in this Section 9(b) (i.e., the Committee provides for the vesting of an unvested Award at the time of a Change in Control where the acquiring or successor entity has agreed to provide for the issuance of Substitute Awards), then the same such terms must apply to all other Awards having substantially similar vesting or exercisability terms that are held by all other Participants | | |
| | 2019 PROXY STATEMENT D-9 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
as of such time. For the avoidance of doubt, at the time of a Change in Control, the Committee shall not be required to provide for similar treatment of Awards that are subject to vesting and exercisability terms that are dissimilar. (iv) Prior to any payment with respect to an assumption, substitution or continuation of any Awards contemplated under this Section 9, the Committee may require each Participant to (i) represent and warrant as to the unencumbered title to the Participant’s Awards; (ii) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Shares, subject to any limitations or reductions as may be necessary to comply with Code Section 409A; and (iii) deliver customary transfer documentation as reasonably determined by the Committee. The Committee may, in its sole discretion, specify in an Award or a policy that will be incorporated into an Award agreement by reference, that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or Performance Criteria of an Award. Such events may include, but shall not be limited to, termination of Employment for cause, termination of the Participant’s provision of services to the Company or any of its Subsidiaries, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or restatement of the Company’s financial statements to reflect adverse results from those previously released financial statements, as a consequence of errors, omissions, fraud, or misconduct. 11. | No Right to Employment or Awards |
The granting of an Award under the Plan shall impose no obligation on the Company or any of its Subsidiaries to continue the Employment of a Participant and shall not lessen or affect the Company’s or any Subsidiary’s right to terminate the Employment of such Participant. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated). The Board may refuse to instruct the Company to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of applicable securities laws, including, without limitation, laws of the United States (and any state thereof), and England and Wales. 13. | Successors and Assigns |
The Plan shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors. | | |
| | 2019 PROXY STATEMENT D-10 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
14. | Nontransferability of Awards |
Unless otherwise determined by the Committee, an award shall not be transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution; provided, that in no event shall any Award be transferred for value or consideration. An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant. 15. | Amendments or Termination |
Subject to the limitations imposed under Sections 6(f) and 7(d) of this Plan, the Board may amend, alter or discontinue the Plan, and the Board or the Committee may amend, alter or discontinue any outstanding Award, but no amendment, alteration or discontinuation shall be made, (a) without the approval of the shareholders of the Company to the extent such approval is (i) required by, or (ii) desirable to satisfy the requirements of, in each case, any applicable law, regulation or other rule, including the listing standards of the securities exchange, which is, at the applicable time, the principal market for the Shares, (b) without the consent of a Participant, if such action would materially and adversely affect any of the rights of the Participant under any Award theretofore granted to such Participant under the Plan;provided, that (to the extent not prohibited under clause (a)(i) above) the Committee may amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws (including, without limitation, to avoid adverse tax or accounting consequences to the Company or to Participants). 16. | International Participants |
With respect to Participants who reside or work outside the United States of America, the Committee may, in its sole discretion, amend the terms of the Plan or Awards with respect to such Participants in order to conform such terms with the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or a Subsidiary. The Plan shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws, except to the extent that the matter in question is mandatorily required to be governed by the laws of England and Wales, in which case it will be governed by the applicable provision of the laws of England and Wales. 18. | Effectiveness of the Plan |
The Plan is effective as set forth in the definition of Effective Date contained in Section 2(h) hereof. No new awards may be granted under the Prior Plan as of the Effective Date. 19. | Section 409A of the Code |
To the extent applicable, this Plan and all Awards granted hereunder are intended to comply with or be exempt from Section 409A of the Code and will be interpreted in a manner intended to comply with Section 409A of the Code. For Awards subject to Section 409A of the Code, references under the Plan or an Award to the Participant’s termination of Employment shall be deemed to refer to the date upon which the Participant has experienced a “separation from service” within the meaning of Section 409A of the Code. Notwithstanding anything herein to the contrary, (a) if at the time of the Participant’s separation from service with any Service Recipient the Participant is a “specified employee” as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such separation from service is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant) to the minimum extent necessary to satisfy Section 409A of the Code until the date that is six months and one day following the Participant’s separation | | |
| | 2019 PROXY STATEMENT D-11 |
| | | | | NIELSEN 2019 STOCK INCENTIVE PLAN | | | | |
from service with all Service Recipients (or the earliest date as is permitted under Section 409A of the Code), if such payment or benefit is payable upon a termination of Employment and (b) if any other payments of money or other benefits due to the Participant hereunder would cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred, if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the minimum extent necessary, in a manner, reasonably determined by the Committee, that does not cause such an accelerated or additional tax or result in an additional cost to the Company (without any reduction in such payments or benefits ultimately paid or provided to the Participant). The Company shall use commercially reasonable efforts to implement the provisions of this Section 19 in good faith;provided, that neither the Company, the Board, the Committee nor any of the Company’s employees, directors or representatives shall have any liability to Participants with respect to this Section 19. 20. | Awards Subject to the Plan |
In the event of a conflict between any term or provision contained in the Plan and a term contained in any Award agreement, the applicable terms and provisions of the Plan will govern and prevail. Notwithstanding other provisions of the Plan or any Award agreements thereunder, the Company shall not be obligated to issue or deliver fractional Shares pursuant to the Plan or any Award and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be cancelled, terminated or otherwise eliminated with, or without, consideration. If any provision of the Plan or any Award is, or becomes or is deemed to be invalid, illegal, unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. | | |
| | 2019 PROXY STATEMENT D-12 |
NIELSEN HOLDINGS PLC
40 DANBURY ROAD
WILTON, CT 06897-4445
| | | | | NIELSEN HOLDINGS PLC 40 DANBURY ROAD WILTON, CT 06897-4445 | | VOTE BY INTERNET | | | | Before The Meeting- Go towww.proxyvote.com or from a mobile phone scan the QR code above. | | | | Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time(Eastern Time) on JuneMay 20, 2016 (June2019 (May 16, 20162019 for 401(k) plan shareholders). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | | | | During The Meeting- Go tonielsen.onlineshareholdermeeting.com | | | | You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. | | | | VOTE BY PHONE - 1-800-690-6903 | | | | Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time(Eastern Time) on JuneMay 20, 2016 (June2019 (May 16, 20162019 for 401(k) plan shareholders). Have your proxy card in hand when you call and follow the instructions. | | | | VOTE BY MAIL | | | | Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 1171711717. Your vote must be received by June 20, 2016 (June9:00 a.m. (Eastern Time) on May 17, 2019 (May 16, 20162019 for 401(k) plan shareholders). | | | | | ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS | | | | | If you would like to reduce the costs incurred by the Company in mailing proxy materials, you can consent to receive all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. | | |
| | | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E66959-P16952 KEEP THIS PORTION FOR YOUR RECORDS —————————————————————————————————————————————————————————— | DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | DETACH AND RETURN THIS PORTION ONLY | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | NIELSEN HOLDINGS PLC
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Our Board of Directors recommends that you vote “FOR” each director nominee listed in Proposal 1 in the proxy statement and “FOR” Proposals 2 through 8 described in the proxy statement, summaries of which are set out below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1.
| | To elect the Directors listed below:
| | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1a.
| | James A. Attwood, Jr.
| | ¨ | | ¨ | | ¨ | | | | | | | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | 1b.
| | Mitch Barns
| | ¨ | | ¨ | | ¨ | | | | 2.
| | To ratify the appointment of Ernst & Young LLP as
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | our independent registered public accounting firm
for the year ending December 31, 2016.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1c.
| | David L. Calhoun
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1d.
| | Karen M. Hoguet
| | ¨ | | ¨ | | ¨ | | | | 3.
| | To reappoint Ernst & Young LLP as our UK statutory
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | auditor to audit our UK statutory annual accounts
for the year ending December 31, 2016.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1e.
| | James M. Kilts
| | ¨ | | ¨ | | ¨ | | | | 4.
| | To authorize the Board of Directors to determine
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | the compensation of our UK statutory auditor.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1f.
| | Harish Manwani
| | ¨ | | ¨ | | ¨ | | | | 5.
| | To approve the Nielsen Holdings plc 2016
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | Employee Share Purchase Plan.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1g.
| | Kathryn V. Marinello
| | ¨ | | ¨ | | ¨ | | | | 6.
| | To approve on a non-binding, advisory basis the
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | compensation of our named executive officers as
disclosed in the proxy statement pursuant to the
rules of the U.S. Securities and Exchange Commission.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1h.
| | Robert Pozen
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1i.
| | Vivek Ranadivé
| | ¨ | | ¨ | | ¨ | | | | 7.
| | To approve on a non-binding, advisory basis the
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | Directors’ Compensation Report for the year ended
December 31, 2015.
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1j.
| | Javier G. Teruel
| | ¨ | | ¨ | | ¨ | | | | 8.
| | To approve the Directors’ Compensation Policy.
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | 1k.
| | Lauren Zalaznick
| | ¨ | | ¨ | | ¨ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX]
| | Date
| | | | Signature (Joint Owners)
| | Date
| | |
NIELSEN HOLDINGS PLC
Annual Meeting of Shareholders
June 21, 2016
9:00 a.m. (Eastern Time)
nielsen.onlineshareholdermeeting.com
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement, the US Annual Report and the UK Annual Report are available atwww.proxyvote.com. You will need the 16-digit control number included on this proxy card in order to access the proxy materials onwww.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
M98993-P77448
NIELSEN HOLDINGS PLC Annual Meeting of Shareholders
| | | | | | | June 21, 2016 9:00 AM (Eastern Time)
This proxy is solicited on behalf of theOur Board of Directors
The undersigned shareholder(s) of Nielsen Holdings plc hereby revoke(s) all proxies heretofore given by the signer(s) to recommends that you vote at the Annual Meeting of Shareholders“FOR”each director nominee listed below and any adjournments or postponements thereof, acknowledges receipt of the Proxy Statement, dated April 29, 2016, and appoint(s) Mitch Barns, Jamere Jackson, Eric J. Dale and Harris Black, and“FOR” each of them,Proposals 2 through 7 listed below.
| | | | | | | | | | | | 1. | | Election of directors: | | For | | Against | | Abstain | | | | | | | | | 1a. | | James A. Attwood, Jr. | | ☐ | | ☐ | | ☐ | | | | | | | | | 1b. | | Guerrino De Luca | | ☐ | | ☐ | | ☐ | | | | | | | | | 1c. | | Karen M. Hoguet | | ☐ | | ☐ | | ☐ | | | | | | | | | 1d. | | David Kenny | | ☐ | | ☐ | | ☐ | | | | | | | | | 1e. | | Harish Manwani | | ☐ | | ☐ | | ☐ | | | | | | | | | 1f. | | Robert C. Pozen | | ☐ | | ☐ | | ☐ | | | | | | | | | 1g. | | David Rawlinson | | ☐ | | ☐ | | ☐ | | | | | | | | | 1h. | | Javier G. Teruel | | ☐ | | ☐ | | ☐ | | | | | | | | | 1i. | | Lauren Zalaznick | | ☐ | | ☐ | | ☐ | | | | | Please indicate if you plan to attend the meeting. | | ☐ | | ☐ | | | | | | | | | Yes | | No | | |
| | | | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | 2. | | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the undersigned’s true and lawful proxies, each withyear ending December 31, 2019. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | 3. | | To reappoint Ernst & Young LLP as our UK statutory auditor to audit our UK statutory annual accounts for the poweryear ending December 31, 2019. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | 4. | | To authorize the Audit Committee to appoint his substitute(s), and hereby authorize(s) them to represent and to vote alldetermine the compensation of our UK statutory auditor. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | 5. | | To approve on a non-binding, advisory basis the sharescompensation of our named executive officers as disclosed in the proxy statement. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | 6. | | To approve on a non-binding, advisory basis the Directors’ Compensation Report for the year ended December 31, 2018. | | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | 7. | | To approve the Nielsen Holdings plc that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 a.m. (Eastern Time) on June 21, 2016, and at any adjournment or postponement thereof, upon all subjects that2019 Stock Incentive Plan. | | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | NOTE: Such other business as may properly come before the annual meeting including, the matters describedor any adjournment or postponement thereof. | | | | | | | | | | | | |
| | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in the proxy statement furnished withfull corporate or partnership name by authorized officer. | | |
| | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | |
| | | | | Signature (Joint Owners) | | Date | | |
NIELSEN HOLDINGS PLC 2019 Annual General Meeting of Shareholders May 21, 2019 9:00 a.m. (Eastern Time) at 50 Danbury Road, Wilton, CT 06897 or to attend the meeting live via the Internet, please visit nielsen.onlineshareholdermeeting.com ADMISSION TICKET | | | | | | | You should present this proxy card, subjectadmission ticket in order to gain admittance to the directions indicatedmeeting. This ticket admits only the shareholder(s) listed on the reverse side of this card, with alland is not transferable. Each shareholder may be asked to present valid picture identification, such as a driver’s license. Cameras, videotaping equipment and other recording devices and large packages, banners, placards and signs will not be permitted at the power the undersigned would possess if personally present.meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S) ON THE REVERSE SIDE OF THIS PROXY CARD. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES IN PROPOSAL 1 AND “FOR” THE APPROVAL OF PROPOSALS 2 THROUGH 8, WHICH PROPOSALS ARE LISTED ON THE REVERSE SIDE OF THIS PROXY CARD, AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE
| | |
If you submit your proxy by telephone or Internet, do not return your proxy card. Thank you for your proxy submission. | | | | | | | Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting: The Notice and Proxy Statement, the US Annual Report and the UK Annual Report are available atwww.proxyvote.com. You will need the16-digit control number included on this proxy card in order to access the proxy materials onwww.proxyvote.com. | | |
—————————————————————————————————————————————————————————————— E66960-P16952 NIELSEN HOLDINGS PLC Annual General Meeting of Shareholders May 21, 2019 9:00 a.m. (Eastern Time) This proxy is solicited on behalf of the Board of Directors The undersigned shareholder(s) of Nielsen Holdings plc hereby: revoke(s) all proxies heretofore given by the signer(s) to vote at the Annual General Meeting of Shareholders and any adjournments or postponements thereof; acknowledges receipt of the Notice of the Annual General Meeting of Shareholders of Nielsen Holdings plc and related Proxy Statement, dated April 9, 2019; and appoint(s) David Kenny, David J. Anderson, George D. Callard and Emily Epstein, and each of them, as the undersigned’s true and lawful proxies, each with the power to appoint his or her substitute(s), and hereby authorize(s) them to represent and to vote all of the shares of Nielsen Holdings plc that the shareholder(s) is/are entitled to vote at the Annual General Meeting of Shareholders to be held at 9:00 a.m. (Eastern Time) on May 21, 2019, and at any adjournment or postponement thereof, upon all subjects that may properly come before such meeting, including the matters described in the proxy statement furnished with this proxy card, subject to the directions indicated on the reverse side of this card, with all the power the undersigned would possess if personally present. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S) ON THE REVERSE SIDE OF THIS PROXY CARD. IF THE PROXY CARD IS SIGNED BUT NO DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES IN PROPOSAL 1, “FOR” PROPOSALS 2 THROUGH 7 AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE |
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