| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to §240.14a-12 | |
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Notice of 2018 Annual Meeting and Proxy Statement
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Stockholder,
On behalf of the Board of Directors and the management team, we want to thank you for your investment in Visa and encourage you to vote your shares by proxy at this year’s Annual Meeting. Stockholder engagement remains a key input into Board discussions and decisions, and we greatly value the opportunity to maintain extensive year-round dialogue with our stockholders beyond the Annual Meeting. During 2023, we continued to capitalize on exciting opportunities in the industry and make great strides across our three growth levers: consumer payments, new flows, and value added services. Visa has achieved strong results while operating with purpose, driving towards our goal of uplifting everyone, everywhere by being the best way to pay and be paid. We are immensely proud of the progress Visa has made in the past year and are pleased to provide you with key updates on how the Board and management team continue to create value for our stockholders. Smooth leadership transition promotes continued innovation and growth A cornerstone of 2023 for Visa was the successful execution of our important leadership succession at the Board and management level, in which we effected a smooth CEO transition. After almost a year as Executive Chairman supporting the leadership transition, Al decided to retire from the Board as of the Annual Meeting. John Lundgren, currently our Lead Independent Director, will take on the Independent Board Chair role following our Annual Meeting. The Board is pleased with how its leadership structure has enabled collaboration with management and facilitated a successful leadership transition over the last year. During this time, we also welcomed Chris Suh to Visa as our new CFO. He assumed the role fully in August 2023 and has already contributed meaningfully to our team. We are excited about Visa’s future and the leadership in place to drive and oversee success, growth, and innovation. New independent director brings important experience in technology and cybersecurity In addition to our leadership transitions over the past year, the Board appointed Pam Murphy as an independent director, whose operational knowledge of global software and technology companies and direct experience leading a cybersecurity software and services company are additive to the Board’s active assessment and oversight of risk, particularly in the area of cybersecurity risk. Pam’s perspective has already been a valuable addition to Visa’s Board. Proposed amendments to certificate of incorporation beneficial to all Visa common stockholders Finally, we are pleased with the significant progress Visa has made resolving claims under the U.S. Covered Litigation, and after careful consideration of this progress and input from our common stockholders across all three classes, the Board has decided to propose amendments to our Certificate of Incorporation, which, if approved at this Annual Meeting, would authorize a Class B Exchange Offer Program. As detailed in Proposal 4, the Class B Exchange Offer Program certificate amendments would allow for a programmatic and measured release of portions of Class B shares. The Board believes the Certificate of Incorporation amendments will provide benefit to all of our Class A, Class B, and Class C common stockholders. Thank you for your continued support and engagement during 2023 as we, along with the rest of the Board, work to power sustainable commerce and economic growth around the world. | |||
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Al Kelly Executive Chairman | Ryan McInerney Director and Chief Executive Officer | |||
| 2024 Proxy Statement |
| Notice of Annual Meeting |
Notice of 2024 Annual Meeting of Stockholders
Items of Business
| 1. | To elect the |
| 2. |
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| 3. |
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| 4. | To approve and adopt amendments to our Seventh Restated Certificate of Incorporation (the Certificate) to authorize Visa to enable Class B stockholders to exchange and transfer portions of their Class B common stock, subject to certain conditions (such amendments, the Class B Exchange Offer Program Certificate Amendments); |
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| 6. | To vote on a stockholder proposal requesting that the Board adopt a policy to seek shareholder ratification of certain termination pay arrangements, if properly presented; and |
| 7. | To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
The proxy statement more fully describes these proposals.
Record Date
Holders of our Class A common stock at the close of business on December 1, 2017 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Holders of our Class A common stock will be entitled to vote on all proposals.
Proxy Voting
Your vote is very important. Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail. You may revoke your proxy at any time before it is voted. Please refer to the “Voting and Meeting Information” section of the proxy statement for additional information.
On or about December 7, 2017, we expect to release the proxy materials to the stockholders of our Class A common stock and to send to these stockholders (other than those Class A stockholders who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our fiscal year 2017 Annual Report, and to vote through the Internet or by telephone.
Record Date
Holders of our Class A, Class B, and Class C common stock at the close of business on November 24, 2023, are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Holders of our Class A common stock will be entitled to vote on all proposals, and holders of our Class B and Class C common stock will be entitled to vote only on Proposal 4.
Attending the Annual Meeting
The meeting will be held on Tuesday, January 23, 2024, at 8:30 a.m. Pacific Time. Log-in begins at 8:15 a.m. Eligible holders of our Class A, Class B, and Class C common stock will be able to attend the meeting online, vote their shares electronically, and submit questions during the meeting by visiting virtualshareholdermeeting.com/V2024. To participate in the virtual meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form. Please refer to the “Attending the Meeting” section of the proxy statement for more details about attending the Annual Meeting online. The meeting will be held exclusively online; we are not holding an in-person meeting.
Proxy Voting
Your vote is very important. Whether or not you plan to attend the Annual Meeting online, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail. You may revoke your proxy at any time before it is voted. Please refer to the “Voting and Meeting Information” section of the proxy statement for additional information.
On or about December 7, 2023, we released the proxy materials to the holders of our Class A, Class B, and Class C common stock. On that day we sent to our Class A stockholders (other than those Class A stockholders who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our fiscal year 2023 Annual Report, and how to vote through the Internet or by telephone. On that date we sent printed copies of the proxy materials to holders of our Class B and Class C common stock.
By Order of the Board of Directors
Kelly Mahon Tullier
Vice Chair, Chief People and Corporate Affairs Officer,
and Corporate Secretary
San Francisco, California
December 7, 2023
Kelly Mahon Tullier
Executive Vice President, General
Counsel and Corporate Secretary
Foster City, California
December 7, 2017
Important Notice Regarding the Availability of Proxy Materials
for the 20182024 Annual Meeting of Stockholders to be held on January 30, 2018. 23, 2024.
The proxy statement and Visa’s Annual Report for fiscal year 20172023 are available athttp://investor.visa.com.
| investor.visa.com |
| Table of Contents |
Table of Contents
Proxy Summary This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. Information About Our 2024 Annual Meeting of Stockholders
Voting Matters
Corporate Governance and Board Highlights We are committed to corporate governance practices that promote long-term value and strengthen Board and management accountability to our stockholders, customers, and other stakeholders. Information regarding our corporate governance framework is described in Corporate Governance and includes the following highlights:
Snapshot of 2024 Director Nominees Our director nominees exhibit an effective mix of diversity, experience, and perspectives
Our Compensation Philosophy, Principles, and Key Elements The compensation program for our named executive officers (NEOs) helps us attract and retain key talent and promote performance that enhances stockholder value and drives long-term strategic outcomes, including the Company’s broader corporate responsibility and sustainability efforts. There are three primary principles that guide our compensation program design and administration: (1) pay for performance; (2) promote alignment with stakeholders’ interests; and (3) attract, motivate, and retain key talent. We tie a substantial portion of our NEOs’ target annual compensation to the achievement of pre-established financial and non-financial objectives that support our business strategy, with a mix that balances short- and long-term performance goals. Further, our annual incentive plan incorporates corporate responsibility and sustainability metrics that are tied to the Company’s strategic objectives. Our long-term equity awards align the interests of our NEOs with our stakeholders’ interests and link a substantial portion of compensation to the achievement of earnings per share (EPS) results that drive total shareholder return (TSR). For fiscal year 2023, 93% of the target total direct compensation of the annual compensation components for our Chief Executive Officer was variable and at-risk, and an average of 91% was variable and at-risk for our other NEOs.
Principles of our Compensation Program
Key Elements of our Fiscal Year 2023 Compensation Program
Fiscal Year 2023 Company Highlights
Board’s Role In Long-Term Strategic Planning The Board takes an active role with management to formulate and review Visa’s long-term corporate strategy. Each quarter, the Board and management confer on the execution of our long-term strategic plans, and the status of key initiatives, opportunities, and risks facing Visa. In addition, the Board regularly conducts in-depth long-term strategic reviews with our senior management team. During these reviews, the Board and management discuss the payments landscape, emerging technological and competitive opportunities and threats, and short- and long-term plans and priorities within our strategy. Additionally, the Board annually discusses and approves budget and capital requests, which are firmly linked to Visa’s long-term strategic plans and priorities. Through these processes, the Board brings its collective, independent judgment to bear on the most critical long-term strategic issues facing Visa. For more information on our long-term strategy and the progress we made against our strategic goals in fiscal year 2023, please see our 2023 Annual Report, including the letter from our Chief Executive Officer, Ryan McInerney, to our stockholders.
Talent and Human Capital Management Attracting, developing, and advancing the best people globally is crucial to all aspects of Visa’s activities and long-term success, and is central to our long-term strategy. Best-in-class, diverse teams and an inclusive culture inspire leadership, encourage innovative thinking, and support the development and advancement of all employees. Since September 2020, we have strategically grown our employee workforce by 41%. We have focused on hiring talent in key areas such as Value Added Services (VAS), New Flows, Product, and Technology, and we have made good progress to meet our underrepresented goals in the U.S. and to increase the percentage of women employees globally. To continue this momentum, we are evolving how we attract, hire, develop, and retain top talent. At Visa, all employees are encouraged and empowered to be leaders through embracing the Visa Leadership Principles. These Leadership Principles are integrated into core talent processes, and since their introduction six years ago they have enhanced how we evaluate performance and drive the company’s success. In fiscal year 2023, as we look ahead to the next chapter of Visa’s growth, we introduced evolved Leadership Principles, with the aim to drive clarity and specificity around the behaviors that will contribute to Visa’s future success, while building on our strengths:
The tone and culture of Visa is set at the Board level. The full Board has oversight of human capital management and performs regular reviews, including annual reviews of succession planning for our Chief Executive Officer. Our Board committees have responsibility for specific areas of human capital management. The Nominating and Corporate Governance Committee is responsible for director succession and refreshment, as well as management succession and development planning. Our Compensation Committee is responsible for reviewing Visa’s programs and practices related to executive workforce inclusion and diversity as well as the administration of compensation programs in a non-discriminatory manner. Management is responsible for developing policies and processes that reflect and reinforce our desired corporate culture, including policies and processes related to strategy, risk management, and ethics and compliance. Employee Development and Engagement Visa understands that being an employer of choice requires best-in-class career and skills development along with innovative programs. Given Visa’s ambitious growth agenda and efforts to achieve our purpose, we have focused on enhancing our employees’ expertise across our business. This includes building a new Technology Apprenticeships program to help us broaden and strengthen our talent channels and pipelines. In fiscal year 2023, we developed the Visa Payments Learning Program to diversify entry paths into the workforce, with an initial focus on payments and cybersecurity. We also committed to providing employees with the tools they need to do their work more quickly and easily, including an artificial intelligence-driven portal with a searchable knowledge base to create customized results and bespoke solutions. We support employees in their development through our award-winning Visa University. Our global learning platform, Learning Hub, houses nearly 200,000 learning resources on a number of topics, including sales, technology, product, and leadership development. Visa’s annual Learning Festival includes courses taught and facilitated by Visa leaders and external speakers who bring real-world context and ideas for practical application that are aligned with our goals. In 2023, we created our new employee value proposition, Powering payments, uplifting people, which is closely linked to our purpose. Our employee value proposition has been embedded throughout numerous key organizational programs and processes, and has been used to help attract, develop, and advance top-notch talent. We recognize that building an inclusive and high-performing culture requires an engaged workforce, where employees are motivated to do their best work every day. Our engagement approach centers on communication and recognition. We communicate with our employees in a variety of ways, including quarterly town hall meetings, our company intranet, digital signage, email newsletters, and live events in regional offices. We also are dedicated to ensuring that employees feel valued in their day-to-day work. To provide employees with more opportunities to recognize and be recognized, we introduced UPLIFT, Visa’s new recognition platform, which enables peer-to-peer recognition and reinforces our employee value proposition and the Visa Leadership Principles. Employee engagement in peer recognition has significantly increased since the launch, with monthly active users reaching 78% in September 2023. With this enhanced platform, employees are encouraged to recognize each other in uplifting everyone, everywhere. We assess employee engagement through a variety of channels, including employee engagement surveys and periodic pulse surveys, which provide feedback on a variety of topics, such as company direction and strategy, wellbeing, inclusion and diversity, individual growth and development, collaboration, and confidence and pride. In Visa’s fiscal year 2023 employee engagement survey, 95% of employees reported that they feel proud to work for Visa, 92% of employees understand the link between their work and our company’s strategic objectives, and 91% of employees are proud to work for a purpose-driven company and would recommend Visa as a great place to work.
Employee Benefits We believe our employees are critical to the success of our business, and we structure our total rewards and benefits package to attract and retain a talented and engaged workforce. We continue to evolve our programs to meet our employees’ needs, providing comprehensive wellbeing, financial, and quality of life coverage. Our programs vary by location, but may include the following:
Inclusion and Diversity Visa believes in an inclusive and diverse workplace where everyone is accepted, everywhere. We are driven to create a culture in which individual differences, experiences, and capabilities are valued and contribute to our business success. By leveraging the diverse backgrounds and perspectives of our global teams, we are able to achieve better solutions for our clients and create a connected workplace to attract and advance top talent. Visa’s approach to inclusion and diversity involves the following:
We are committed to doing our part to improve our inclusion and increase our diversity. In fiscal year 2023, Visa continued to drive important change through specific actions, including making progress toward our goals to increase the number of U.S. employees from underrepresented groups and hosting an “Inclusion & Diversity Talks” series to promote internal education and conversation. We are also providing professional development and mentorship programs, equipping our employees with training and tools to be active allies, and continuing our supplier diversity efforts.
Workforce Demographics Visa tracks, measures, and evaluates our workforce representation and impact as part of our strategic business imperative to build a diverse and inclusive organization. We are committed to reporting our workforce demographics annually.
Corporate Governance
Members of our Board oversee our business through discussions with our Executive Chairman; Chief Executive Officer; Chief Financial Officer; Vice Chair, Chief People and Corporate Affairs Officer, and Corporate Secretary; General Counsel; Chief Risk Officer; President, Technology; Chief Information Security Officer; and other officers and employees, and by reviewing materials provided to them and participating in regular meetings of the Board and its committees. The Board regularly monitors our corporate governance policies and profile to confirm we meet or exceed the requirements of applicable laws, regulations and rules, and the listing standards of the New York Stock Exchange (NYSE). We have instituted a variety of practices to foster and maintain responsible corporate governance, which are described in this section. To learn more about Visa’s corporate governance and to view our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and the charters of each of the Board’s committees, please visit the Investor Relations page of our website at investor.visa.com under “Corporate Governance.” Our Environmental, Social & Governance Report is located on our website at visa.com/esg. You may request a printed copy of any of these documents free of charge by contacting our Corporate Secretary at Visa Inc., P.O. Box 193243, San Francisco, CA 94119 or corporatesecretary@visa.com. Board Leadership Structure | The Company’s Corporate Governance Guidelines provide the Board with the flexibility to determine the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders. The Board’s thoughtful consideration of its leadership structure given evolving needs of the Company and our operative environment is demonstrated by its recent decision to appoint an independent Board Chair following Al Kelly’s planned retirement from the Executive Chairman role, as detailed in the below sections. Current Leadership Structure As a part of the Chief Executive Officer succession process that culminated in February 2023, the Board made the determination to split the role of Chief Executive Officer and Chairperson at that time. The Board believes that this leadership structure is appropriate given Mr. Kelly’s and Mr. McInerney’s respective tenures and because it separates the leadership of the Board from the duties of day-to-day leadership of the Company. This structure has allowed our Chief Executive Officer, Mr. McInerney, to focus on the day-to-day management of the business and on executing our strategic priorities, while Mr. Kelly as Executive Chairman focused on leading the Board and providing advice and counsel to Mr. McInerney. In addition, the independent directors reaffirmed the Board’s commitment to strong independent board leadership by unanimously re-electing Mr. Lundgren as Lead Independent Director. Mr. Lundgren has significant experience as a former Chief Executive Officer of a
publicly-traded company, and in building strong relationships with various constituencies. The Board believes that this leadership structure is effective, supports independent oversight, and currently serves the business and stockholders well. To further promote independent leadership, the Board developed a robust set of responsibilities for the Lead Independent Director role, including:
In addition, independent directors chair each of the Board’s four standing committees: the Audit and Risk Committee, chaired by Lloyd A. Carney; the Compensation Committee, chaired by Denise M. Morrison; the Finance Committee, chaired by Maynard G. Webb, Jr.; and the Nominating and Corporate Governance Committee, chaired by John F. Lundgren. In their capacities as independent committee chairs, Mr. Carney, Mr. Lundgren, Ms. Morrison, and Mr. Webb each have responsibilities that contribute to the Board’s independent oversight of management, as well as facilitating communication among the Board and management. Board Appoints Independent Board Chair The Nominating and Corporate Governance Committee and the Board continue to periodically review the Board’s leadership structure and to exercise their discretion in recommending an appropriate and effective Board leadership framework on a case-by-case basis, taking into consideration the needs of the Board and the Company at such time. In October 2023, Mr. Kelly announced that he would not stand for re-election at the Annual Meeting and would resign as Executive Chairman at that time. As a result, the Board considered the Board’s leadership structure and upon the recommendation of the Nominating and Corporate Governance Committee, determined to elect Mr. Lundgren, the current Lead Independent Director, as Board Chair effective upon the election of directors at the Annual Meeting, subject to his re-election. The independent Board Chair will chair meetings of the Board and will also have the duties of the Lead Independent Director to the extent applicable.
Board of Directors and Committee Evaluations | Our Board recognizes that a robust and constructive Board and committee evaluation process is an essential component of Board effectiveness. As such, our Board and each of its committees conduct an annual evaluation facilitated by an independent third party, which includes a qualitative assessment by each director of the performance of the Board and the committee or committees on which the director sits. The Board also conducts an annual peer review, which is designed to assess individual director performance. The Nominating and Corporate Governance Committee, in conjunction with the Lead Independent Director, oversees the evaluation process.
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– Criteria for Nomination to the Board of Directors and Diversity. Individuals identified by the Nominating and Corporate Governance Committee as qualified to become directors are then recommended to the Board for nomination or election. |
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Independence of Directors The NYSE’s listing standards and our Corporate Governance Guidelines provide that a majority of our In October 2023, with the assistance of legal counsel, our Board conducted its annual review of director independence taking into account the NYSE listing standards and our independence guidelines set forth in our Corporate Governance Guidelines. As a result of its review, the Board (upon recommendation of the Nominating and Corporate Governance Committee) affirmatively determined that each of our non-employee directors (Lloyd A. Carney, Kermit R. Crawford, Francisco Javier Fernández-Carbajal, Ramon Laguarta, Teri L. List, John F. Lundgren, Denise M. Morrison, Pamela Murphy, Linda J. Rendle, and Maynard G. Webb, Jr.) is “independent” as that term is defined in the NYSE’s listing standards, our independence guidelines, and our Certificate of Incorporation. In addition, the Board previously determined that Mary B. Cranston and Robert W. Matschullat, who retired from the Board at our 2023 Annual Meeting of Stockholders, were “independent” while they served on the Board during fiscal year 2023. In addition, the Board determined that each member of the Audit and Risk Committee and the Compensation Committee meets the additional, heightened independence criteria applicable to such committee members under the NYSE rules. Executive Sessions of the Board of Directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
executive session without management present during their Board and committee meetings. John F. Lundgren, our Lead Independent Director, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Limitation on Other Board and Audit Committee Service Through the Nominating and Corporate Governance Committee, the Board annually reviews the corporate governance guidelines which include limitations on directors’ ability to serve on the boards of other publicly-traded companies. In order to inform these limitations, the Nominating and Corporate Governance Committee considers many factors, including:
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Our Corporate Governance Guidelines establish the following limits on our directors serving on publicly-traded company boards and audit committees:
The Nominating and Corporate Governance Committee may grant exceptions to the limits on a case-by-case basis after taking into consideration the facts and circumstances of the request. Our Corporate Governance Guidelines provide that prior to accepting an invitation to serve on the board or audit committee of another publicly-traded company, a director should advise our Corporate Secretary of the invitation. The Corporate Secretary will review the matter with the Lead Independent Director or the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee, and the Chief Executive | The Nominating and Corporate Governance Committee conducted a review of director commitments for our 2024 director nominees and affirms that all nominees are compliant with our board limit policy, with the exception of Ms. List as described in greater detail below, and believes that all directors currently have sufficient capacity to effectively serve as members of the Visa Board. Ms. List serves on three public company audit committees in addition to being a member of our Audit and Risk Committee. The Nominating and Corporate Governance Committee and the Board considered Ms. List’s service on four public company audit committees, including her professional qualifications, former experience as a public company chief financial officer, and the nature of and time involved in her service on other boards. Following such review, the Board determined that such simultaneous service would not impair the ability of Ms. List to effectively serve on the Company’s Audit and Risk Committee and waived the limit for service on the Audit and Risk Committee for Ms. List.
| Management Development and Succession Planning Our Board believes that one of its primary responsibilities is to oversee the development and retention of executive talent so that an appropriate succession plan is in place for our Chief Executive Officer and other members of senior management. Each quarter, the Nominating and Corporate Governance Committee meets with our Vice Chair, Chief People and Corporate Affairs Officer and other executives to discuss management succession and development planning and to address potential vacancies in senior leadership. In addition, the Board annually reviews succession planning for our Chief Executive Officer. Following a robust succession planning process which included both internal and external candidates, on February 1, 2023, the Board appointed Ryan McInerney as Chief Executive Officer. Ryan is a seasoned leader in the payments and consumer banking industries with 20 years of experience delivering solutions to clients. He previously served as President of Visa, a role he held since 2013. In his role as President, Mr. McInerney was responsible for Visa’s global businesses, delivering value to Visa’s financial institutions, acquirers, merchants, and partners in more than 200 countries and territories around the world. He has overseen the company’s market teams, business units, product team, merchant team, and client services. The Board of Directors’ Role in Risk Oversight Our Board recognizes the importance of effective risk oversight in running a successful business and in fulfilling its fiduciary responsibilities to Visa and its stockholders. While the Chief Executive Officer; Chief Risk Officer; General Counsel; Chief Financial Officer; Vice Chair, Chief People and Corporate Affairs Officer; President, Technology; Chief Information Security Officer; and other members of our senior leadership team are responsible for the day-to-day management of risk, our Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile, and monitoring how the Company addresses specific risks, such as strategic and competitive risks, financial risks, brand and reputation risks, cybersecurity and technology risks, ecosystem risks, legal and compliance risks, regulatory risks, and operational risks.
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Board of Directors
We are one of the world’s leaders in digital payments, and |
We approach cybersecurity with a layered defense-in-depth strategy, which is supported by robust governance processes that involve regular oversight by and reporting to the Board and management. Specifically, the full Board receives updates on Visa’s cybersecurity program twice per year from our President of | Stockholder Engagement
Topics covered during our discussions with investors included:
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2023 Stockholder Engagement Regarding Class B Exchange Offer Program Amendments In addition to our robust year-round stockholder engagement, during the Fall of 2023 Visa undertook an extensive engagement process with stockholders of each class of Visa common stock specifically related to the potential Class B Exchange Offer Program Certificate Amendments. Stockholder feedback received during this engagement effort was considered by management and the Board and helped inform the Class B Exchange Offer Program Certificate Amendments that are presented for stockholder approval at this Annual Meeting. For additional information regarding this engagement process and the Class B Exchange Offer Program, please see Proposal 4 – Approval and Adoption of the Class B Exchange Offer Program Certificate Amendments. Communicating with the Board of Directors Our Board has adopted a process by which stockholders or other interested persons may communicate with the Board or any of its members. Stockholders and other interested parties may send communications in writing to any or all directors (including the Chair or the non-employee directors as a group) electronically to board@visa.com or by mail c/o our Corporate Secretary, Visa Inc., P.O. Box 193243, San Francisco, CA 94119. Communications that meet the procedural and substantive requirements of the process approved by the Board will be delivered to the specified member of the Board, non-employee directors as a group, or all members of the Board, as applicable, on a periodic basis, which generally will be in advance of or at each regularly scheduled meeting of the Board. Communications of a more urgent nature will be referred to the Corporate Secretary, who will determine whether it should be delivered more promptly. Additional information regarding the procedural and substantive requirements for communicating with our Board may be found on our website at investor.visa.com, under “Corporate Governance – Contact the Board.” All communications involving accounting, internal accounting controls, and auditing matters, possible violations of, or non-compliance with, applicable legal and regulatory requirements or the Code of Business Conduct and Ethics, or retaliatory acts against anyone who makes such a complaint or assists in the investigation of such a complaint, may be made via email to businessconduct@visa.com; through our Confidential Compliance Hotline at (888) 289-9322 or our Confidential Online Compliance Hotline at visa.alertline.com; or by mail to Visa Inc., Business Conduct Office, P.O. Box 193243, San Francisco, CA 94119. All such communications will be handled in accordance with our Whistleblower Policy, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Board and its committees meet throughout the year on a set schedule, hold special meetings as needed, and act by written consent from time to time. The Board met eight times during fiscal year 2023. Each director attended at least 91% or more of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Codes of Conduct and Ethics Our Board has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers, employees, and contingent staff of the | Political Engagement and Disclosure Public sector decisions significantly affect our business and industry, as well as the communities in which we operate. For this reason, we participate in the political process through regular engagement with government officials and policy-makers, by encouraging the civic involvement of our employees, and by contributing to candidates and political organizations where permitted by applicable law. We are committed to conducting these activities in a transparent manner that reflects responsible corporate citizenship and best serves the interests of our stockholders, employees, and other stakeholders. Additional information regarding our political activities and oversight may be found at usa.visa.com/about-visa/esg/operating-responsibly.html. Visa has a Political Participation, Lobbying and Contributions Policy (PPLC Policy) that prohibits our directors, officers, and employees from using Company resources to promote their personal political views, causes, or candidates, and specifies that the Company will not directly or indirectly reimburse any personal political contributions or expenses. Directors, officers, and employees also may not lobby government officials on the Company’s behalf absent the pre-approval of the Company’s Global Government Engagement department. As such, our lobbying and political spending seek to promote the interests of the Company and its stockholders, and not the personal political preferences of our directors or executives. Under the PPLC Policy, the Nominating and Corporate Governance Committee must pre-approve the use of corporate funds for political contributions, including contributions made to trade associations to support targeted political campaigns and contributions to organizations registered under Section 527 of the U.S. Internal Revenue Code to support political activities. The PPLC Policy further requires the Company to make reasonable efforts to obtain from U.S. trade associations whose annual membership dues exceed $25,000 the portion of such dues that are used for political contributions. This information must then be included in the semiannual contribution reports that are posted on our website. We endeavor to maintain a healthy and transparent relationship with governments around the world by communicating our views and concerns to elected officials and policy-makers. As an industry leader, we encounter challenges and opportunities on a wide range of policy matters. These issues may include regulations and policies on interchange fees, cybersecurity, data security, privacy, intellectual property, surcharging, payroll and prepaid cards, mobile payments, tax, international trade and market access, and financial inclusion, among others. The Nominating and Corporate Governance Committee reviews our political contributions and lobbying expenditures on a semiannual basis, which includes information regarding memberships in, or payments to, tax-exempt organizations that write and endorse model legislation. Additional information on our political contributions and lobbying expenditures can be found on our website, including our semiannual contribution reports and links to our quarterly U.S. federal lobbying activities and expenditures reports. In 2023, the Center for Political Accountability assessed our disclosures for its annual Center for Political Accountability CPA-Zicklin Index of Corporate Political Disclosure and Accountability, and designated Visa a “Trendsetter” (the highest designation in the CPA-Zicklin Index) with a perfect score of 100 for the eighth consecutive year.
Corporate Responsibility and Sustainability We believe that as a trusted brand in payments, Visa has an opportunity and responsibility to contribute to a more inclusive, ethical, and sustainable world. As we work toward this goal, we are committed to managing the risks and opportunities that arise from environmental, social, and governance (ESG) issues, providing transparency of our ESG performance, and enabling strong executive and Board oversight of our overall ESG strategy. In fiscal year 2023, the Board, in full and in individual committees, discussed a range of corporate responsibility and sustainability topics, including but not limited to human capital management, inclusion and diversity, environmental sustainability, political engagement and contributions, technology, cybersecurity, and data privacy. Integrated Approach Visa strives to be an industry leader in addressing ESG issues and overall management. To do so, we continue to take an integrated approach to our ESG performance and transparency.
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These responsibilities are incorporated into the charter for the Nominating and Corporate Governance Committee, which is available on the Investor Relations page of our website at investor.visa.com under “Corporate Governance – Committee Composition.”
Key Focus Areas of ESG Strategy and Recent Progress Our ESG strategy focuses on priority issues in five areas, each of which is informed by our ESG materiality assessment and stakeholder engagement.
Third-Party Recognition of our ESG Leadership We continued to receive recognition of our ESG leadership by third-party organizations:
We encourage you to read more about how we are working to build a more inclusive, ethical, and sustainable world for everyone, everywhere at visa.com/esg and in our 2022 Environmental, Social and Governance Report. Our website and our 2022 Environmental, Social & Governance Report are not part of or incorporated by reference into this proxy statement. Our ESG goals are aspirational and may change. Statements regarding our goals are not guarantees or promises that they will be met.
Committees of the Board of Directors The current standing committees of the Board are the Audit and Risk Committee, the Compensation Committee, the Finance Committee, and the Nominating and Corporate Governance Committee. Each of the standing committees operates pursuant to a written charter, which is available on the Investor Relations page of our website at investor.visa.com under “Corporate Governance – Committee Composition.” Audit and Risk Committee
Key Activities in 2023
Certain Relationships and Related Person Transactions The Audit and Risk Committee has adopted a written Statement of Policy with respect to Related Person Transactions (Statement of Policy), governing any transaction, arrangement, or relationship between the Company and any related person where the related person had, has, or will have a direct or indirect material interest. Under the Statement of Policy, the Audit and Risk Committee reviews related person transactions and may approve or ratify them only if it is determined that they are in, or not inconsistent with, the best interests of the Company and its stockholders. When reviewing a related person transaction, the Audit and Risk Committee may take into consideration all of the relevant facts and circumstances available to it, including: (i) the material terms and conditions of the transaction or transactions; (ii) the related person’s relationship to Visa; (iii) the related person’s interest in the transaction, including their position or relationship with, or ownership of, any entity that is a party to or has an interest in the transaction; (iv) the approximate dollar value of the transaction; (v) the availability from other sources of comparable products or services; and (vi) an assessment of whether the transaction is on terms that are comparable to the terms available to us from an unrelated third party. In the event we become aware of a related person transaction that was not previously approved or ratified under the Statement of Policy, the Audit and Risk Committee will evaluate all options available, including ratification, revision, or termination of the related person transaction. The Statement of Policy is intended to augment and work in conjunction with our other policies that include code of conduct or conflict of interest provisions, including our Code of Business Conduct and Ethics. We engage in transactions, arrangements, and relationships with many other entities, including financial institutions and professional organizations, in the ordinary course of our business. Some of our directors, executive officers, greater than five percent stockholders, and their immediate family members, each a related person under the Statement of Policy, may be directors, officers, partners, employees, or stockholders of these entities. We carry out transactions with these entities on customary terms, and, in many instances, our directors and executive officers may not be aware of them. To our knowledge, since the beginning of fiscal year 2023, no related person has had a direct or indirect material interest in any of our business transactions or relationships.
Report of the Audit and Risk Committee
Compensation Committee
Key Activities in 2023
Compensation Committee Interlocks and Insider Participation None of the members who served on the Compensation Committee was or had ever been one of our officers or employees. In addition, during the last fiscal year, none of our executive officers served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on our Board or Compensation Committee.
Risk Assessment of Compensation Programs The Compensation Committee annually considers potential risks to the Company when reviewing and approving our compensation program. We have designed our compensation program, including our incentive compensation plans, with specific features to address potential risks while rewarding employees for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk-taking. The following elements have been incorporated in our compensation program for executive officers:
Additionally, the Compensation Committee annually considers an assessment of compensation-related risks. Based on this assessment, the Compensation Committee concluded that our compensation program does not create risks that are reasonably likely to have a material adverse effect on Visa. In making this determination, the Compensation Committee reviewed the key design elements of our compensation program in relation to industry “best practices” as presented by the Compensation Committee’s independent compensation consultant, as well as the means of mitigating potential risks, such as through our internal controls and oversight by management and the Board.
Finance Committee
Key Activities in 2023
Nominating and Corporate Governance Committee
Key Activities in 2023
Process for Nomination of Director Candidates The Nominating and Corporate Governance Committee regularly reviews the composition of the Board, including the qualifications, expertise, and characteristics that are represented in the current Board as well as the criteria it considers needed to support Visa’s long-term strategy. As part of its assessment, the Nominating and Corporate Governance Committee considers members’ independence, as well members’ other time commitments and experience in the context of the needs of the Company and the Board. After an in-depth review of the candidates, the Nominating and Corporate Governance Committee recommends candidates to the Board in accordance with its charter, our Certificate of Incorporation and Bylaws, our Corporate Governance Guidelines, and the criteria adopted by the Board regarding director candidate qualifications. After careful review and consideration, the Board nominates candidates for election, or re-election, at our annual meeting of stockholders. The Board may appoint a director to the Board during the year to serve until the next meeting of stockholders.
Stockholder Recommended Candidates Stockholders may recommend a director candidate to be considered for nomination by the Nominating and Corporate Governance Committee by providing the information specified in our Corporate Governance Guidelines to our Corporate Secretary within the timeframe specified for stockholder nominations of directors in our Bylaws. For additional information regarding the process for proposing director candidates to the Nominating and Corporate Governance Committee for consideration, please see our Corporate Governance Guidelines. Stockholders who wish to nominate a person for election as a director at an annual meeting of stockholders must follow the procedure described under Other Information – Stockholder Nomination of Director Candidates and Other Stockholder Proposals for |
Criteria for Nomination to the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
INFORMATION ABOUT OUR 2018 ANNUAL MEETING OF STOCKHOLDERS
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VOTING MATTERS
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CORPORATE GOVERNANCE AND BOARD HIGHLIGHTS
We are committed to corporate governance practices that promote long-term value and strengthen board and management accountability to our stockholders, customers and other stakeholders. Information regarding our corporate governance framework begins on page 7, which includes the following highlights:
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Snapshot of 2018 Director Nominees
Our director nominees exhibit an effective mix of diversity, experience and perspective
| Director | Committee | Other Current Public | ||||||||||||||||
| Name | Age | Since | Principal Occupation | Independent | ARC | CC | NGC | Boards | ||||||||||
Lloyd A. Carney |
55 |
2015 |
Director |
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Mary B. Cranston |
69 |
2007 |
Director |
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Francisco Javier | 62 | 2007 | Director General, Servicios Administrativos Contry SA de CV | |
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Gary A. Hoffman |
57 |
2016 |
CEO, Hastings Insurance Group |
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Alfred F. Kelly, Jr. | 59 | 2014 | CEO, Visa |
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John F. Lundgren |
66 |
2017 |
Director |
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Robert W. Matschullat | 70 | 2007 | Independent Chairman, Visa | | 2 | |||||||||||||
Suzanne Nora Johnson |
60 |
2007 |
Director |
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John A. C. Swainson | 63 | 2007 | Director | |
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Maynard G. Webb, Jr.
| 62 | 2014 | Founder, Webb Investment Network |
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ARC = Audit and Risk Committee CC = Compensation Committee NGC = Nominating & Corporate Governance Committee
= Member 
= Chair
EXECUTIVE COMPENSATION HIGHLIGHTS
Highlights of Our Compensation Programs
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In addition to the above qualities, the Board, through the Nominating and Corporate Governance Committee, strives to be a board that reflects the diversity of our key stakeholders around the world (clients, customers, employees, business partners, and stockholders). While the Board does not have a formal policy on diversity, the Board’s practice in assembling the Board is to have wide diversity in terms of business experiences, functional skills, gender, race, ethnicity, and cultural backgrounds. To support this objective, the Nominating and Corporate Governance Committee instructs any search firm that is engaged to identify director candidates to include women and candidates from underrepresented groups in the pool from which the Nominating and Corporate Governance Committee considers director candidates.
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| Committees of the Board of Directors |
Compensation of Non-Employee Directors
We compensate non-employee directors for their service on the Board with a combination of cash and equity awards, the amounts of which are commensurate with their role and involvement, and consistent with peer company practices. In setting non-employee director compensation, we consider the significant amount of time our directors expend in fulfilling their duties as well as the skill level required of members of our Board. Mr. Kelly, our Executive Chairman, and Mr. McInerney, our Chief Executive Officer, do not receive additional compensation for their service as directors.
The Compensation Committee, which is composed solely of independent directors, has the primary responsibility for reviewing and considering any revisions to our non-employee director compensation program. In July 2022, the Compensation Committee undertook its annual review of non-employee director compensation for fiscal year 2023, which included an analysis completed by its independent compensation consultant. As part of this analysis, the independent compensation consultant reviewed trends and data from the same peer companies used by the Compensation Committee in connection with its review of executive compensation. Pursuant to the review, and after considering the independent compensation consultant’s advice based on peer group data, the Compensation Committee recommended that the Board approve an increase in the grant date value of the annual equity award for non-employee directors from $225,000 to $235,000 for grants made on or after the date of the 2023 Annual Meeting of Stockholders. This increase to the equity grant date value improved the overall positioning within the peer group and balanced the mix between cash and equity compensation. The Compensation Committee also recommended that the Board approve an increase in the annual cash retainer for the Lead Independent Director from $75,000 to $90,000, for the chair of the Audit and Risk Committee from $25,000 to $30,000, for the chair of the Finance Committee from $20,000 to $30,000, for the chair of the Compensation Committee from $20,000 to $25,000, and for members of the Finance Committee from $15,000 to $20,000, each effective October 1, 2022. The increase in the annual cash retainers was determined in consultation with the independent compensation consultant based on peer group data and to reflect the time commitment and contributions expected of the positions.
Highlights of our Non-Employee Director Compensation Program
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Annual Retainers Paid in Cash
Non-employee directors receive an annual cash retainer for their service on the Board, as well as additional cash retainers if they serve as the Lead Independent Director, on a committee, or as the chair of a committee. The following table lists the annual cash retainer amounts in effect during fiscal year 2023.
Type of Retainer | Amount of Retainer | |
Annual Board Membership | $110,000 | |
Lead Independent Director | $90,000 | |
Audit and Risk Committee Membership | $20,000 | |
Compensation Committee Membership | $15,000 | |
Finance Committee Membership | $20,000 | |
Nominating and Corporate Governance Committee Membership | $15,000 | |
Audit and Risk Committee Chair | $30,000 (in addition to member retainer) | |
Compensation Committee Chair | $25,000 (in addition to member retainer) | |
Finance Committee Chair | $30,000 (in addition to member retainer) | |
Nominating and Corporate Governance Committee Chair | $20,000 (in addition to member retainer) | |
U.S.-based directors may defer the payment of all or a portion of the cash retainer payments, as described below under Executive Compensation – Non-qualified Deferred Compensation for Fiscal Year 2023 – Visa Directors Deferred Compensation Plan. All cash retainers are paid in quarterly installments unless a director elected to defer the payment. Directors are also reimbursed for customary expenses incurred while attending meetings of the Board and its committees.
Equity Compensation
Each non-employee director receives an annual equity grant under the Visa Inc. 2007 Equity Incentive Compensation Plan, as amended and restated (2007 Equity Incentive Compensation Plan), which limits the total grant date value of equity grants that may be made to our non-employee directors to $500,000 in a single fiscal year. On January 24, 2023, the date of our 2023 Annual Meeting of Stockholders, each non-employee director received a restricted stock unit grant determined by dividing $235,000 by the per share closing price of our Class A common stock on that date, rounded to the nearest whole share. Following the date of a non-employee director’s election or appointment to the Board on a date other than at an Annual Meeting of Stockholders, the director receives a prorated initial grant based on the partial year of Board service; similarly, departing non-employee directors who joined the Board prior to November 2017 receive a grant for the year of departure, which is prorated for any partial year of service, as applicable. Accordingly, Mr. Crawford, who was appointed to the Board on October 7, 2022, received a restricted stock unit grant determined by dividing $75,000 by the per share closing price of our Class A common stock on October 15, 2022, rounded to the nearest whole share, and Ms. Murphy, who was appointed to the Board on April 10, 2023, received a restricted stock unit grant determined by dividing $195,833 by the per share closing price of our Class A common stock on May 15, 2023, rounded to the nearest whole share. Ms. Cranston and Mr. Matschullat, who did not stand for re-election at the 2023 Annual Meeting of Stockholders and both joined the Board prior to November 2017, each received a restricted stock unit grant determined by dividing $235,000 (representing the entire grant date value applicable to a full year of service for the year of departure) by the per share closing price of our Class A common stock on January 24, 2023, rounded to the nearest whole share. Restricted stock unit grants to all non-employee directors vest immediately upon grant. Directors may elect to defer settlement of all or a portion of their equity grants.
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Stock Ownership Guidelines
Mitigate Inappropriate Risk Taking
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Our Compensation Philosophy
We provide our named executive officers with short- and long-term compensation opportunities that encourage increasing performance to enhance stockholder value while avoiding excessive risk-taking.
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Charitable Matching Gift Program Our non-employee directors may participate in the Board Charitable Matching Gift Program. Under this program, contributions to eligible non-profit organizations are matched by the Visa Foundation, up to a maximum of $15,000 per director per calendar year. Our U.S. non-employee directors may also participate in our Political Action Committee (PAC) Charitable Matching Program. Under this program, when non-employee directors contribute to the Visa PAC, Visa matches their contribution to a qualifying charity or charities the non-employee director selects, up to a maximum of $5,000 per director per calendar year. Director Compensation Table for Fiscal Year 2023 The following tables provide information on the total compensation earned by each of our non-employee directors who served during fiscal year 2023.
Fees Earned or Paid in Cash The following table sets forth additional information with respect to the amounts reported in the “Fees Earned or Paid in Cash” column in the Compensation of Non-Employee Directors – Director Compensation Table for Fiscal Year 2023 above. Certain directors rotated committee assignments during the fiscal year. Fees have been pro-rated to reflect the portion of the fiscal year that the directors served on each committee.
Fiscal Year 2024 Director Compensation Pursuant to the annual compensation review process described above, in July 2023 the Compensation Committee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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We maintain compensation plans that tie a substantial portion of our named executive officers’ overall target annual compensation to the achievement of our corporate performance goals. The Compensation Committee employs multiple performance measures and strives to award an appropriate mix of annual and long-term equity incentives to avoid overweighting short-term objectives.
Key Elements of our Compensation Programs CEO Other NEOs Compensation Mix Annual Cash Incentive Long Term Equity Incentive Salary 8% Target Annual Incentive 20% Target Long-term Incentive 72% 92% at risk Salary 11% Target Annual Incentive 20% Target Long-term Incentive 69% 89% at risk Individual Performance 20% Corporate Performance 80% (Net Income Growth and Net Revenue Growth) Individual Performance 30% Corporate Performance 70% (Net Income Growth and Net Revenue Growth) Performance Shares 50% Restricted Stock Units 25% Stock Options 25%
COMPANY PERFORMANCE HIGHLIGHTS
During the fiscal year ended September 30, 2017, Visa delivered strong financial results following our acquisition of Visa Europe and continued growth in our core operations. Net operating revenue increased 22% to $18.4 billion. GAAP net income increased 12% to $6.7 billion, while adjusted net income increased 21% to $8.3 billion.(1) Payments volume increased 41% to $7.3 trillion, while processed transactions grew 34% to 111 billion. Our class A common stock price increased 27%, and we returned $8.5 billion to stockholders in the form of share repurchases and dividends.
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BOARD’S ROLE IN LONG-TERM STRATEGIC PLANNING
The Board takes an active role with management to formulate and review Visa’s long-term corporate strategy. In 2017, under the leadership of our new CEO, Alfred F. Kelly, Jr., Visa made several changes to the existing strategic framework. The strategic pillars were reframed as ‘foundational pillars’ – fundamental to maintaining Visa’s operational excellence and reputation as a trusted leader in the industry – and ‘growth pillars’ – critical for driving long-term sustained growth in a rapidly evolving landscape. A new strategic pillar, Leverage World-Class Brand, was added to highlight the importance of maximizing Visa’s brand to drive measurable outcomes for Visa and our partners. Our commitment to develop the best talent was placed at the center of the strategic framework, to reinforce how attracting, developing and retaining the best people globally is crucial to all aspects of Visa’s activities and long-term success.
The Board and management routinely confer on our Company’s execution of its long-term strategic plans, the status of key strategic initiatives and the key strategic opportunities and risks facing Visa. In addition, the Board periodically devotes meetings to conduct anin-depth long-term strategic review with our Company’s senior management team. During these reviews, the Board and management discuss the payments landscape, emerging technological and competitive threats, and short and long-term plans and priorities within each strategic pillar.
Additionally, the Board annually discusses and approves the Company’s budget and capital requests, which are firmly linked to Visa’s long-term strategic plans and priorities. Through these processes, the Board brings its collective, independent judgment to bear on the most critical long-term strategic issues facing Visa. For more information on our long-term strategy and the progress we made against our strategic goals in fiscal 2017, please see our 2017 Annual Report, including the letter from our CEO, Alfred F. Kelly, Jr., to our stockholders.
Strategic Framework
Our Board oversees the business of the Company to serve the long-term interests of our stockholders. Members of our Board oversee our business through discussions with our Chief Executive Officer, President, Chief Financial Officer, General Counsel, Vice Chairman and Chief Risk Officer and other officers and employees, and by reviewing materials provided to them and participating in regular meetings of the Board and its committees.
The Board regularly monitors our corporate governance policies and profile to ensure we meet or exceed the requirements of applicable laws, regulations and rules, and the listing standards of the New York Stock Exchange (NYSE). We have instituted a variety of practices to foster and maintain responsible corporate governance, which are described in this section. To learn more about Visa’s corporate governance and to view our Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers, and the charters of each of the Board’s committees, please visit the Investor Relations page of our website athttp://investor.visa.com under “Corporate Governance.” Copies of these documents also are available in print free of charge by writing to our Corporate Secretary at Visa Inc., P.O. Box 193243, San Francisco, CA 94119.
In October 2016, the Board appointed Alfred F. Kelly, Jr. as Chief Executive Officer, effective December 1, 2016, replacing Charles W. Scharf, who resigned as Chief Executive Officer effective December 1, 2016. The Nominating and Corporate Governance Committee and the Board believe having the Chair and Chief Executive Officer in separate roles is the most appropriate leadership structure for the Company at this time, by allowing Mr. Kelly to focus on theday-to-day management of the business and on executing our strategic priorities, while allowing our independent Chair, Robert W. Matschullat, to focus on leading the Board, providing advice and counsel to Mr. Kelly and facilitating the Board’s independent oversight of management. The Nominating and Corporate Governance Committee will continue to periodically review the Board’s leadership structure and to exercise its discretion in recommending an appropriate and effective framework on acase-by-case basis, taking into consideration the needs of the Board and the Company at such time.
As our independent Chair, Mr. Matschullat’s duties and responsibilities include: presiding at meetings of the Board and calling, setting the agenda for and chairing periodic executive sessions of the independent directors; providing feedback to the Chief Executive Officer on corporate policies and strategies; acting as a liaison between the Board and the Chief Executive Officer; and facilitatingone-on-one communication between directors, committee chairs, the Chief Executive Officer and other senior managers to keep abreast of their perspectives.
In addition to our independent Chair, the Board has three standing committees: the Audit and Risk Committee, chaired by Mary B. Cranston; the Compensation Committee, chaired by Suzanne Nora Johnson; and the Nominating and Corporate Governance Committee, chaired by John A.C. Swainson. In their capacities as independent committee chairs, Ms. Cranston, Ms. Nora Johnson and Mr. Swainson each have responsibilities that contribute to the Board’s oversight of management, as well as facilitating communication among the Board and management.
Board of Directors and Committee Evaluations
Our Board and each of our committees conduct an annual evaluation, which includes a qualitative assessment by each director of the performance of the Board and the committee or committees on which the director sits. The Board also conducts an annual peer review, which is designed to assess individual director performance. The evaluations and peer review are conducted via oral interviews by an independent, third party legal advisor selected by the Board, using as the basis for discussion a list of questions that are provided to each director in advance. The results of the evaluation and any recommendations for improvement are discussed with the Nominating and Corporate Governance Committee and the Board. The Nominating and Corporate Governance Committee oversees the evaluation process.
Over the past few years, the evaluation process has led to a broader scope of topics covered in the board meetings and improvements in board process. These improvements include changes relating to the preparation and distribution of board materials, as well as adjustments to the timing and location of board and committee meetings. The process has also informed board and committee composition, which includes changes to the director candidate skills and qualifications criteria.
Director Succession Planning and Board Refreshment
In addition to executive and management succession, the Nominating and Corporate Governance Committee regularly oversees and plans for director succession and refreshment of the Board to ensure a mix of skills, experience, tenure, and diversity that promote and support the Company’s long-term strategy. In doing so, the Nominating and Corporate Governance Committee takes into consideration the overall needs, composition and size of the Board, as well as the criteria adopted by the Board regarding director candidate qualifications, which are described in the section entitledCorporate Governance – Nomination of Directors. Individuals identified by the Nominating and Corporate Governance Committee as qualified to become directors are then recommended to the Board for nomination or election.
The NYSE’s listing standards and our Corporate Governance Guidelines provide that a majority of our Board and every member of the Audit and Risk, Compensation and Nominating and Corporate Governance committees must be “independent.” Our Certificate of Incorporation further requires that at least fifty-eight percent (58%) of our Board be independent. Under the NYSE’s listing standards, our Corporate Governance Guidelines and our Certificate of Incorporation, no director will be considered to be independent unless our Board affirmatively determines that such director has no direct or indirect material relationship with Visa or our management. Our Board reviews the independence of its members annually and has adopted guidelines to assist it in making its independence determinations. For details, see our Corporate Governance Guidelines, which can be found on the Investor Relations page of our website athttp://investor.visa.com under “Corporate Governance.”
In October 2017, with the assistance of legal counsel, our Board conducted its annual review of director independence and affirmatively determined that each of ournon-employee directors (Lloyd A. Carney, Mary B. Cranston, Francisco Javier Fernández-Carbajal, Gary A. Hoffman, Suzanne Nora Johnson, John F. Lundgren, Robert W. Matschullat, John A. C. Swainson and Maynard G. Webb, Jr.) is “independent” as that term is defined in the NYSE’s listing standards, our independence guidelines and our Certificate of Incorporation. In addition, the Board previously determined that Cathy E. Minehan and David J. Pang were “independent” while they served on the Board during fiscal 2017.
In making the determination that the directors listed above are independent, the Board considered relevant transactions, relationships and arrangements, including those specified in the NYSE listing standards and our independence guidelines, and determined that these relationships were not material relationships that would impair the director’s independence. In this regard, the Board considered that certain directors serve as directors of other companies with which the Company engages inordinary-course-of-business transactions, and that, in accordance with our director independence guidelines, none of these relationships constitute material relationships that would impair the independence of these individuals. Discretionary contributions to certain charitable organizations with which some of our directors are affiliated also were considered, and the Board determined that the amounts contributed to each of these charitable organizations in the past fiscal year were less than $120,000 and that these contributions otherwise created no material relationships that would impair the independence of those individuals.
In addition, each member of the Audit and Risk Committee and the Compensation Committee meets the additional, heightened independence criteria applicable to such committee members under the applicable NYSE rules.
Executive Sessions of the Board of Directors
Thenon-employee, independent members of our Board and all committees of the Board generally meet in executive session without management present during their regularly scheduledin-person board and committee meetings, and on anas-needed basis during telephonic and special meetings. Robert W. Matschullat, our independent Chair, presides over executive sessions of the Board and the committee chairs, each of whom is independent, preside over executive sessions of the committees.
Limitation on Other Board and Audit Committee Service
Our Corporate Governance Guidelines establish the following limits on our directors serving on outside publicly-traded company boards and audit committees:
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The Nominating and Corporate Governance Committee may grant exceptions to the limits on acase-by-case basis after taking into consideration the facts and circumstances of the request. The Guidelines provide that prior to accepting an invitation to serve on the board or audit committee of another publicly-traded company, a director should advise the Chair of the Board and the Nominating and Corporate Governance Committee of the invitation so that the Board, through the Nominating and Corporate Governance Committee, has the opportunity to review the director’s ability to continue to fulfill his or her responsibilities as a member of the Company’s Board or Audit and Risk Committee. When reviewing such a request, the Nominating and Corporate Governance Committee may consider a number of factors, including the director’s other time commitments, record of attendance at board and committee meetings, potential conflicts of interest and other legal considerations, and the impact of the proposed directorship or audit committee service on the director’s availability.
Management Development and Succession Planning
Our Board believes that one of its primary responsibilities is to oversee the development and retention of executive talent and to ensure that an appropriate succession plan is in place for our Chief Executive Officer and other members of management. Each quarter, the Nominating and Corporate Governance Committee meets with our Executive Vice President, Human Resources and other executives to discuss management succession and development planning and to address potential vacancies in senior leadership. The Nominating and Corporate Governance Committee also annually reviews with the Board succession planning for our Chief Executive Officer.
The Board of Directors’ Role in Risk Oversight
Our Board recognizes the importance of effective risk oversight in running a successful business and in fulfilling its fiduciary responsibilities to Visa and its stockholders. While the Chief Executive Officer, Vice Chairman and Chief Risk Officer and other members of our senior leadership team are responsible for theday-to-day management of risk, our Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile and monitoring how the Company addresses specific risks, such as strategic and competitive risks, financial risks, brand and reputation risks, cybersecurity and technology risks, legal and compliance risks, regulatory risks and operational risks.
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In addition, each of the Committees meet in executive session with management to discuss our risk profile and risk exposures. For example, the Audit and Risk Committee meets regularly with our Chief Financial Officer, General Counsel, Vice Chairman and Chief Risk Officer, Chief Auditor, Chief Compliance Officer and other members of senior management to discuss our major risk exposures and other programs.
Stockholder Engagement on Corporate Governance, Corporate Responsibility and Executive Compensation Matters
Our Board and management team greatly value the opinions and feedback of our stockholders, which is why we have proactive, ongoing engagement with our stockholders throughout the year focused on corporate governance, corporate responsibility and executive compensation, in addition to the ongoing dialogue among our stockholders and our Chief Executive Officer, Chief Financial Officer and Investor Relations team on Visa’s financial and strategic performance.
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Some of the topics discussed during this year’s stockholder engagement included board composition and refreshment, the board evaluation process, our executive compensation program and philosophy, and corporate responsibility. A summary of the feedback we received was provided to the Board for review and consideration, and enhancements have been made to our proxy statement disclosures to improve transparency in these areas. In addition, we held our 2017 Investor Day in June of this year, which provided an opportunity for our stockholders to hear directly from management on Visa’s long-term corporate strategy and ask questions of the management team.
Stockholders and other interested parties who wish to communicate with us on these or other matters may contact our Corporate Secretary electronically atcorporatesecretary@visa.com or by mail at Visa Inc., P.O. Box 193243, San Francisco, CA 94119.
Communicating with the Board of Directors
Our Board has adopted a process by which stockholders or other interested persons may communicate with the Board or any of its members. Stockholders and other interested parties may send communications in writing to any or all directors (including the Chair or thenon-employee directors as a group) electronically toboard@visa.com or by mail c/o our Corporate Secretary, Visa Inc., P.O. Box 193243, San Francisco, CA 94119. Communications that meet the procedural and substantive requirements of the process approved by the Board will be delivered to the specified member of the Board,non-employee directors as a group or all members of the Board, as applicable, on a periodic basis, which generally will be in advance of or at each regularly scheduled meeting of the Board. Communications of a more urgent nature will be referred to the General Counsel, who will determine whether it should be delivered more promptly. Additional information regarding the procedural and substantive requirements for communicating with our Board may be found on our website athttp://investor.visa.com, under “Corporate Governance – Contact the Board.”
All communications involving accounting, internal accounting controls, and auditing matters, possible violations of, ornon-compliance with, applicable legal and regulatory requirements or the Codes, or retaliatory acts against
anyone who makes such a complaint or assists in the investigation of such a complaint, may be made via email tobusinessconduct@visa.com, through our Confidential Compliance Hotline at(888) 289-9322 within the United States or the AT&T International Toll-Free Dial codes available online athttp://www.usa.att.com/traveler/access numbers/index.jsp outside of the United States, through our Confidential Online Compliance Hotline athttps://visa.alertline.com, or by mail to Visa Inc., Business Conduct Office, P.O. Box 193243, San Francisco, CA 94119. All such communications will be handled in accordance with our Whistleblower Policy, a copy of which may be obtained by contacting our Corporate Secretary.
Attendance at Board, Committee and Annual Stockholder Meetings
Our Board and its committees meet throughout the year on a set schedule, hold special meetings as needed, and act by written consent from time to time. The Board met 10 times during fiscal year 2017. Each director attended at least 75% or more of the aggregate of: (i) the total number of meetings of the Board held during the period in fiscal year 2017 for which he or she served as a director, and (ii) the total number of meetings held by all committees of the Board on which such director served as a member during the period in fiscal year 2017. The total number of meetings held by each committee is listed below, under the headingCommittees of the Board of Directors. It is our policy that all members of the Board should endeavor to attend the annual meeting of stockholders. All nine of our then-directors attended the 2017 Annual Meeting of Stockholders. Mr. Lundgren joined the Board in April 2017 and, therefore, did not attend the 2017 Annual Meeting.
Our Board has adopted a Code of Business Conduct and Ethics, which applies to all directors, officers, employees and contingent staff of the Company. Additionally, the Board has adopted a supplemental Code of Ethics for Senior Financial Officers, which applies to our Chief Executive Officer, Chief Financial Officer, Controller, General Counsel and other senior financial officers, whom we refer to collectively as senior officers. These Codes require the senior officers to engage in honest and ethical conduct in performing their duties, provide guidelines for the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and provide mechanisms to report unethical conduct. Our senior officers are held accountable for their adherence to the Codes. If we amend or grant any waiver from a provision of our Codes, we will publicly disclose such amendment or waiver in accordance with and if required by applicable law, including by posting such amendment or waiver on our website athttp://investor.visa.com or by filing a current report on Form8-K with the Securities and Exchange Commission (SEC).
Political Engagement and Disclosure
Public sector decisions significantly affect our business and industry, as well as the communities in which we operate. For this reason, we participate in the political process through regular and constructive engagement with government officials and policy-makers, by encouraging the civic involvement of our employees, and by contributing to candidates and political organizations where permitted by applicable law. We are committed to conducting these activities in a transparent manner that reflects responsible corporate citizenship and best serves the interests of our shareholders, employees, and other stakeholders. Additional information regarding our political activities and oversight may be found athttps://usa.visa.com/about-visa/operating-responsibly.html.
Visa has a Political Participation, Lobbying and Contributions Policy that prohibits our directors, officers and employees from using Company resources to promote their personal political views, causes or candidates, and specifies that the Company will not directly or indirectly reimburse any personal political contributions or expenses. Directors, officers and employees also may not lobby government officials on the Company’s behalf absent thepre-approval of the Company’s Government Relations department. As such, our lobbying and political spending seek to promote the interests of the Company and its stockholders, and not the personal political preferences of our directors or executives.
Under the Policy, the Nominating and Corporate Governance Committee mustpre-approve the use of corporate funds for political contributions, including contributions made to trade associations to support targeted political campaigns and contributions to organizations registered under Section 527 of the U.S. Internal Revenue Code to support political activities. The Policy further requires the Company to make reasonable efforts to obtain from U.S. trade associations whose annual membership dues exceed $25,000 the portion of such dues that are used for political contributions. This information must then be included in the annual contributions report that is posted on our website.
We endeavor to maintain a healthy and transparent relationship with governments around the world by communicating our views and concerns to elected officials and policy-makers. As an industry leader, we encounter challenges and opportunities on a wide range of policy matters. These issues may include regulations and policies on interchange fees, cyber security, data security, privacy, intellectual property, surcharging, payroll and prepaid cards, mobile payments, tax, international trade and market access, and financial inclusion, among others.
The Nominating and Corporate Governance Committee annually reviews our political contributions and lobbying expenditures, which includes information regarding memberships in, or payments to,tax-exempt organizations that write and endorse model legislation. Additional information on our political contributions and lobbying expenditures can be found on our website, including our annual contributions report and links to our quarterly U.S. federal lobbying activities and expenditures reports.
In 2017, the Center for Political Accountability assessed our disclosures for its annualCPA-Zicklin Index of Corporate Political Disclosure and Accountability, known as theCPA-Zicklin Index. TheCPA-Zicklin Index measures the transparency, policies and practices of the S&P 500 with respect to political disclosures. Visa was designated a “trendsetter” (the highest designation in theCPA-Zicklin Index) with a score of 94.3 out of 100.
Corporate Responsibility and Sustainability
The Nominating and Corporate Governance Committee of our Board oversees Visa’s corporate responsibility initiatives. We believe that as a trusted brand in payments, Visa has a tremendous opportunity and responsibility to use our business to connect the world – enabling economic growth and strengthening economies while also helping improve lives and create a better world. We are committed to managing the risks and opportunities that arise from environmental, social and governance (ESG) issues.
As detailed below, Visa takes an integrated approach to managing ESG performance and transparency, which consists of governance, engagement and reporting on our initiatives.
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| 2024 Proxy Statement | 35 |
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Informed by a formal process to understand the ESG issues that are at the intersection of importance to our stakeholders as well as our long-term success, our approach focuses on topics in five areas:
In 2017, Visa was recognized for our corporate responsibility progress, including through the following:
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Our Board currently consists of twelve directors. Eleven directors are nominated for election at our Annual Meeting, including ten independent directors and our Chief Executive Officer. The size of the Board is being decreased to eleven directors as of the election of directors at the Annual Meeting. Each director is elected to serve a |
We encourage you to read more about how we are working to build a connected world and better future for everyone, everywhere in our2016 Corporate Responsibility Report.
Areas
At the recommendation of Focus Informed by periodic materiality assessments and ongoing stakeholder engagement, our corporate responsibility strategy focuses on five priority areas, each with several topics of interest Transforming Commerce Innovation & Technology Payments Security Expanding Access Financial lnclusion Partnerships Solutions Investing in our people Employee Development & Engagement Diversity & Inclusion Employee Benefits Operating Responsibly Corporate Governance Ethics & Compliance Engaging with Governments Consumer Privacy Environmental Sustainability Responsible Sourcing Strengthening Communities Financial Literacy Employee Involvement Community Giving
COMMITTEES OF THE BOARD OF DIRECTORS
The current standing committees of the Board are the Audit and Risk Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each of the standing committees operates pursuant to a written charter, which are available on the Investor Relations page of our website athttp://investor.visa.com under “Corporate Governance – Committee Composition.”
the Board has nominated the following eleven persons to serve as directors for the term beginning at the Annual Meeting on January 23, 2024: Lloyd A. Carney,
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Key Activities in 2017
Certain Relationships and Related Person Transactions
The Audit and Risk Committee has adopted a written Statement of Policy with Respect to Related Person Transactions, governing any transaction, arrangement or relationship between the Company and any related person where the aggregate amount involved will or may be expected to exceed $120,000 and any related person had, has or will have a direct or indirect material interest. Under the Policy, the Audit and Risk Committee reviews related person transactions and may approve or ratify them only if it is determined that they are in, or not inconsistent with, the best interests of the Company and its stockholders. When reviewing a related person transaction, the Audit and Risk Committee may take into consideration all of the relevant facts and circumstances available to it, including: (i) the material terms and conditions of the transaction or transactions; (ii) the related person’s relationship to Visa; (iii) the related person’s interest in the transaction, including their position or relationship with, or ownership of, any entity that is a party to or has an interest in the transaction; (iv) the approximate dollar value of the transaction; (v) the availability from other sources of comparable products or services; and (vi) an assessment of whether the transaction is on terms that are comparable to the terms available to us from an unrelated third party.
In the event we become aware of a related person transaction that was not previously approved or ratified under the Policy, the Audit and Risk Committee will evaluate all options available, including ratification, revision or termination of the related person transaction. The Policy is intended to augment and work in conjunction with our other policies that include code of conduct or conflict of interest provisions, including our Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers.
We engage in transactions, arrangements and relationships with many other entities, including financial institutions and professional organizations, in the ordinary course of our business. Some of our directors, executive officers, greater than five percent stockholders and their immediate family members, each a related person under the Policy, may be directors, officers, partners, employees or stockholders of these entities. We carry out transactions with these entities on customary terms, and, in many instances, our directors and executive officers may not be aware of them. To our knowledge, since the beginning of fiscal year 2017, no related person has had a material interest in any of our business transactions or relationships.
Report of the Audit and Risk Committee
The Committee, comprised of independent directors, is responsible for monitoring and overseeing Visa’s financial reporting process on behalf of the Board. The functions of the Committee are described in greater detail in the Audit and Risk Committee Charter, adopted by the Board, which may be found on the Company’s website at www.visa.com under “Corporate Governance – Committee Composition.” Visa’s management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements, and for the public reporting process. KPMG LLP, Visa’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States of America, and on the Company’s internal control over financial reporting.
In this context, the Committee has reviewed and discussed with management the Company’s audited consolidated financial statements for the fiscal year ended September 30, 2017. In addition, the Committee has discussed with KPMG the matters required to be discussed by Auditing Standard No. 1301, as adopted by the Public Company Accounting Oversight Board (PCAOB).
The Committee also has received the written disclosures and the letter from KPMG required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the audit committee concerning independence, and the Committee has discussed the independence of KPMG with that firm. The Committee also has considered whether KPMG’s provision ofnon-audit services to the Company impairs the auditor’s independence, and concluded that KPMG is independent from the Committee and the Company’s management.
Based on the Committee’s review and discussions noted above, the Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended September 30, 2017, for filing with the Securities and Exchange Commission.
Audit and Risk Committee of the Board of Directors
Mary B. Cranston (Chair)
Lloyd A. Carney
Gary A. Hoffman
John F. Lundgren
Kermit R. Crawford, Francisco Javier Fernández-Carbajal,
Ramon Laguarta, Teri L. List, John F. Lundgren, Ryan McInerney, Denise M. Morrison, Pamela Murphy, Linda J. Rendle, and Maynard G. Webb, Jr.
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Key Activities in 2017
Compensation Committee Interlocks and Insider Participation
During the last fiscal year, none of the members who served on the Compensation Committee (Suzanne Nora Johnson, Francisco Javier Fernández-Carbajal, Alfred F. Kelly, Jr., before his employment with Visa, David J. Pang, before leaving the Board during fiscal 2017, John A. C. Swainson, and Maynard G. Webb, Jr.) was or had ever been one of our officers or employees. In addition, during the last fiscal year, none of our executive officers served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on our Board or Compensation Committee. Effective as of October 17, 2016, Alfred F. Kelly, Jr., who became our Chief Executive Officer Designate as of October 31, 2016 and our Chief Executive Officer on December 1, 2016, ceased to serve on the Compensation Committee when he was named as our Chief Executive Officer Designate. David J. Pang ceased to serve on the Compensation Committee effective as of January 31, 2017.
Risk Assessment of Compensation Programs
The Compensation Committee annually considers potential risks when reviewing and approving our compensation programs. We have designed our compensation programs, including our incentive compensation plans, with specific features to address potential risks while rewarding employees for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk taking. The following elements have been incorporated in our compensation programs for executive officers:
A Balanced Mix of Compensation Components – The target compensation mix for our executive officers is composed of salary, annual cash incentives and long-term equity incentives, representing a mix that is not overly weighted toward short-term cash incentives.
Multiple Performance Factors – Our incentive compensation plans use Company-wide metrics and individual performance goals, which encourage the achievement of objectives for the overall benefit of the Company. Annual cash incentive awards are dependent on multiple performance metrics including Net Income Growth and Net Revenue Growth, both as adjusted for unusual ornon-recurring items, as well as individual goals related to specific strategic or operational objectives.
Long-term Incentives – Our long-term incentives are equity-based and generally have a three-year vesting schedule to complement our annual cash-based incentives.
Capped Incentive Awards – Annual incentive awards and performance share awards are capped at 200% of target for executive officers.
Stock Ownership Guidelines – Our guidelines call for significant share ownership, which aligns the interests of our executive officers with the long-term interests of our stockholders.
Clawback Policy – Our Clawback Policy authorizes the Board to recoup past incentive compensation in the event of a material restatement of the Company’s financial results due to fraud, intentional misconduct or gross negligence of the executive officer.
Additionally, the Compensation Committee annually considers an assessment of compensation-related risks for all of our employees. Based on this assessment, the Compensation Committee concluded that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on Visa. In making this determination, the Compensation Committee reviewed the key design elements of our compensation programs in relation to industry “best practices” as presented by Frederic W. Cook & Co. (FW Cook), the Compensation Committee’s independent compensation consultant, as well as the means of mitigating potential risks, such as through our internal controls and oversight by management and the Board. In addition, management completed an inventory of incentive programs below the executive level and reviewed the design of these incentives both internally and with FW Cook to conclude that such programs do not encourage excessive risk taking.
The Compensation Committee has:
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COMPENSATION COMMITTEE
Suzanne Nora Johnson (Chair)
Francisco Javier Fernández-Carbajal
John A. C. Swainson
Maynard G. Webb, Jr.
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Key Activities in 2017
Nomination Process and Stockholder Proposed Candidates
The Nominating and Corporate Governance Committee considers and recommends candidates to the Board in accordance with its charter, our Certificate of Incorporation and Bylaws, our Corporate Governance Guidelines and the criteria adopted by the Board regarding director candidate qualifications. Candidates may come to the attention of the Nominating and Corporate Governance Committee from current directors, members of management, a professional search firm or a stockholder.
Stockholders may propose a director candidate to be considered for nomination by the Nominating and Corporate Governance Committee by providing the information specified in our Corporate Governance Guidelines to our Corporate Secretary within the timeframe specified for stockholder nominations of directors in our Bylaws. For additional information regarding the process for proposing director candidates to the Nominating and Corporate
Governance Committee for consideration, please see our Corporate Governance Guidelines. Stockholders who wish to nominate a person for election as a director at an annual meeting of stockholders must follow the procedure described under the headingOther Information – Stockholder Nomination of Director Candidates and Other Stockholder Proposals for 2018 Annual Meeting on page 86 of this proxy statement. For additional information regarding this process, please see our Bylaws.
Criteria for Nomination to the Board of Directors and Diversity
The Nominating and Corporate Governance Committee applies the same standards in considering director candidates submitted by stockholders as it does in evaluating other candidates, including incumbent directors. The identification and selection of qualified directors is a complex and subjective process that requires consideration of many intangible factors, and will be significantly influenced by the particular needs of the Board from time to time. As a result, there is no specific set of minimum qualifications, qualities or skills that are necessary for a nominee to possess, other than those that are necessary to meet U.S. legal, regulatory and NYSE listing requirements and the provisions of our Certificate of Incorporation, Bylaws, Corporate Governance Guidelines and charters of the Board’s committees. However, the Nominating and Corporate Governance Committee and the Board have identified the ten skills and qualifications listed below as important criteria for membership on the Visa Board.
In addition to the above qualities, the Board, through the Nominating and Corporate Governance Committee, strives to have a board which reflects the diversity of our key constituencies around the world (clients, customers, employees, business partners and stockholders). While the Board does not have a formal policy on diversity, in assembling our Board, our objective is to have wide diversity in terms of business experiences, functional skills, gender, race, ethnicity, and cultural backgrounds.
COMPENSATION OFNON-EMPLOYEE DIRECTORS
We compensatenon-employee directors for their service on the Board with a combination of cash and equity awards, the amounts of which are commensurate with their role and involvement, and consistent with peer company practices. In setting director compensation, we consider the significant amount of time our directors expend in fulfilling their duties as well as the skill level required of members of our Board. We intend to compensate ournon-employee directors in a way that is competitive, attracts and retains a high caliber of directors, and aligns their interests with those of our stockholders. Neither Mr. Scharf, who was our Chief Executive Officer until December 1, 2016, nor Mr. Kelly who was our Chief Executive Officer for the remainder of fiscal year 2017, received additional compensation for their service as directors. However, Mr. Kelly received one quarterly installment in fiscal year 2017 prior to his becoming an employee for his service as anon-employee director. All amounts received by Mr. Kelly, whether in his capacity as a director or an executive officer, are set forth in the Summary Compensation Table.
The Compensation Committee, which is comprised solely of independent directors, has the primary responsibility for reviewing and considering any revisions to our director compensation program. The Compensation Committee undertook its annual review of the type and form of compensation paid to ournon-employee directors in connection with their service on the Board and its committees for fiscal year 2017. The Compensation Committee considered the results of an independent analysis completed by FW Cook. As part of this analysis, FW Cook reviewednon-employee director compensation trends and data from companies comprising the same executive compensation peer group used by the Compensation Committee in connection with its review of executive compensation. Pursuant to this compensation review process, and after considering FW Cook’s advice that the changes are consistent with our peer group, the Compensation Committee made the following changes to thenon-employee director compensation for fiscal year 2017: the annual equity grant value was increased to $185,000; the additional cash retainer for our independent Chair was increased to $185,000; and the additional cash retainer for the Chair of our Nominating and Corporate Governance Committee was increased to $20,000. In addition, effective for fiscal year 2018, the annual equity award vests immediately upon grant. There have been no other changes to ournon-employee director compensation program for fiscal year 2017.
Highlights of ourNon-Employee Directors Compensation Program
AMONG THE HIGHLIGHTS OF OUR PROGRAM ARE:
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Eachnon-employee director receives an annual cash retainer for his or her service on the Board, as well as additional cash retainers if he or she serves as the independent Chair, on a committee or as the chair of a committee. The following table lists the cash retainer amounts in effect during fiscal year 2017.
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Nominating and Corporate Governance Committee Unless proxy cards are otherwise marked, the persons named as proxies will vote all executed proxies FOR the election of each nominee named in this section. Proxies submitted to Visa cannot be voted at the Annual Meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board. Alternatively, the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve if elected as a director. Each director will hold office until the next annual meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES TO SERVE AS DIRECTORS.
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The following is additional information about each of the director nominees as of the date of this proxy statement, including professional background, director positions held currently or at any time during the last five years, and the specific qualifications, experience, attributes, or skills that caused the Nominating and Corporate Governance Committee |
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U.S.-based directors may defer the payment of all or a portion of the cash retainer payments. All cash retainers are paid in quarterly installments throughout the year unless a director elected to defer the payment. Directors are also reimbursed for customary expenses incurred while attending meetings of the Board and its committees.
Eachnon-employee director also receives an annual equity grant. In fiscal year 2017, a grant with a grant date value of $185,000 was awarded to eachnon-employee director other than Gary Hoffman on November 19, 2016. In the November following the date of a director’s election or appointment to the Board, the director receives a prorated initial grant based on the partial year of board service. Accordingly, Gary Hoffman received a grant with a grant date value of $123,333 on November 19, 2016. Grants to allnon-employee directors were made in the form of restricted stock units, which vest on the first anniversary of the grant dates, but may be accelerated upon completion of service on the Board or in other limited circumstances. Effective for fiscal year 2018, the annual equity award vests immediately upon grant. Directors may elect to defer settlement of all or a portion of their equity grants.
The stock ownership guidelines for ournon-employee directors specify that each director should own shares of our common stock equal to five times the annual board membership retainer. Equity interests that count toward the satisfaction of the ownership guidelines include shares owned outright by the director, shares jointly owned and restricted stock units payable in shares. Directors have five years from the date they become a member of the Board to attain these ownership levels. Eachnon-employee director with at least five years of service on our Board currently meets or exceeds the ownership guidelines. We also have an insider trading policy which, among other things, prohibits directors from hedging the economic risk of their stock ownership or pledging their shares.
Charitable Matching Gift Program
Ournon-employee directors may participate in our Board Charitable Matching Gift Program. Under this program, Visa will match contributions to eligiblenon-profit organizations, up to a maximum of $15,000 per director per calendar year. Ournon-employee directors may also participate in our PAC Charitable Matching Program. Under this program, whennon-employee directors make a contribution to a Visa PAC, Visa will match their contribution to a qualifying charity or charities thenon-employee director selects, up to a maximum of $5,000 per director per calendar year.
Director Compensation Table for Fiscal Year 2017
The following tables provide information on the total compensation earned by each of ournon-employee directors who served during fiscal year 2017.
| Name* | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||
Lloyd A. Carney
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| 125,000
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| 184,997
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| 5,000
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314,997
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Mary B. Cranston
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| 150,000
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| 184,997
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| 20,000
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| 354,997
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Francisco Javier Fernández-Carbajal
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| 125,000
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| 184,997
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| 15,000
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| 324,997
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Gary A. Hoffman
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| 125,000
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| 123,331
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| 233,613
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| 481,944
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John F. Lundgren(6)
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| 31,250
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| 31,250
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Robert W. Matschullat
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| 290,000
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| 184,997
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| 22,500
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| 497,497
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Cathy E. Minehan(7)
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| 62,500
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| 184,997
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| -
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| 247,497
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Suzanne Nora Johnson
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| 145,000
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| 184,997
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| 20,000
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| 349,997
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David J. Pang(7)
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| 62,500
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| 184,997
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| -
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| 247,497
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John A. C. Swainson
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| 140,000
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| 184,997
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| 10,000
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| 334,997
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Maynard G. Webb, Jr.
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| 130,000
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| 184,997
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| 20,000
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| 334,997
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The following table sets forth additional information with respect to the amounts reported in the “Fees Earned or Paid in Cash” column in the Director Compensation Table above for fiscal year 2017.
| Name | Board Retainer | Independent Retainer ($) | Audit and Risk ($) | Compensation ($) | Nominating and Corporate Member ($) | |||||||||||||
Lloyd A. Carney
|
| 105,000
|
| -
|
| 20,000
|
|
| -
|
|
| -
|
| |||||
Mary B. Cranston
|
| 105,000
|
| -
|
| 45,000
|
|
| -
|
|
| -
|
| |||||
Francisco Javier Fernández-Carbajal
|
| 105,000
|
| -
|
| 20,000
|
|
| -
|
|
| -
|
| |||||
Gary A. Hoffman
|
| 105,000
|
| -
|
| 20,000
|
|
| -
|
|
| -
|
| |||||
John F. Lundgren(1)
|
| 26,250
|
| -
|
| 5,000
|
|
| -
|
|
| -
|
| |||||
Robert W. Matschullat
|
| 105,000
|
| 185,000
|
| -
|
|
| -
|
|
| -
|
| |||||
Cathy E. Minehan(2)
|
| 52,500
|
| -
|
| 10,000
|
|
| -
|
|
| -
|
| |||||
Suzanne Nora Johnson
|
| 105,000
|
| -
|
| -
|
|
| 30,000
|
|
| 10,000
|
| |||||
David J. Pang(2)
|
| 52,500
|
| -
|
| -
|
|
| 5,000
|
|
| 5,000
|
| |||||
John A. C. Swainson
|
| 105,000
|
| -
|
| -
|
|
| 10,000
|
|
| 25,000
|
| |||||
Maynard G. Webb, Jr.
|
| 105,000
|
| -
|
| 10,000
|
|
| 5,000
|
|
| 10,000
|
| |||||
|
|
Note: The above amounts may vary from the retainers listed under theDirector Compensation Table for Fiscal Year 2017 above due to changes in Committee memberships in the course of fiscal year 2017.
PROPOSAL 1 – ELECTION OF DIRECTORS
Our Board currently consists of ten directors, each of whom is nominated for election at our Annual Meeting, including nine independent directors and our Chief Executive Officer. Each director is elected to serve aone-year term, with all directors subject to annual election.
At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following ten persons to serve as directors for the term beginning at the Annual Meeting on January 30, 2018: Lloyd A. Carney, Mary B. Cranston, Francisco Javier Fernández-Carbajal, Gary A. Hoffman, Alfred F. Kelly, Jr., John F. Lundgren, Robert W. Matschullat, Suzanne Nora Johnson, John A.C. Swainson and Maynard G. Webb, Jr. Mr. Lundgren was recommended by a global search firm. He was nominated by the Nominating and Corporate Governance Committee after an extensive and careful search was conducted by this search firm, and numerous candidates were considered. The primary functions served by the search firm included identifying potential candidates who meet the key attributes, experience and skills described under “Criteria for Nomination to the Board of Directors and Diversity” above, as well as compiling information regarding each candidate’s attributes, experience, skills and independence and conveying the information to the Nominating and Corporate Governance Committee.
Unless proxy cards are otherwise marked, the persons named as proxies will vote all proxiesFORthe election of each nominee named in this section. Proxies submitted to Visa cannot be voted at the Annual Meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board. Alternatively, the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve if elected as a director. Each director will hold office until the next annual meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES TO SERVE AS DIRECTORS.
The following is additional information about each of the director nominees as of the date of this proxy statement, including their professional background, director positions held currently or at any time during the last five years, and the specific qualifications, experience, attributes or skills that caused the Nominating and Corporate Governance Committee and our Board to determine that the nominee should serve as one of our directors.
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Kermit R. Crawford Age: 64 Independent Director Since: October 2022 Board Committees: Audit and Risk Committee;
Except where otherwise indicated, we believe that the stockholders named in the tables below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The following tables are based on Directors and Executive Officers The following table sets forth information known to the Company as of December 1,
None of the directors or named executive officers individually, or directors and current executive officers as a group, beneficially owned more than 1% of the total number of shares of our Class A common stock outstanding as of December 1,
Principal Stockholders Class A Common Stock The following table shows those persons known to the Company to be the beneficial owners of more than 5% of the Company’s Class A common stock based on the information disclosed in the SEC filings identified below and the number of the Company’s Class A common stock outstanding as of
Class B and Class C Common Stock The following tables show those persons known to the Company as of November 24, 2023, to be the beneficial owners of more than 5% of the Company’s Class B and Class C common stock. Principal Holders of Class B Common Stock
Principal Holders of Class C Common Stock
Delinquent Section 16(a) Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act) requires our directors, executive officers, and persons who beneficially own more than
Executive Officers Biographical data for each of our current executive officers is set forth below, excluding the biography of Mr.
Proposal 2 – Approval, on an Advisory Basis, of the Compensation Paid to Our Named Executive Officers We are asking our Class A common stockholders to approve, on an advisory basis, the compensation of our NEOs as described in this proxy statement, including the section entitled Compensation Discussion and Analysis, the compensation tables, pay versus performance disclosure, and the related narrative discussion. This proposal, commonly known as a “Say-on-Pay” proposal, gives our Class A common stockholders the opportunity to express their views on our NEOs’ compensation. As described in detail under Compensation Discussion and Analysis, our executive compensation programs are designed to attract, motivate, and retain our NEOs, who are critical to our success. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term, and strategic performance goals and the realization of increased value to stakeholders. Please read the Compensation Discussion and Analysis section of this proxy statement for additional details about our executive compensation programs, including information about the fiscal year 2023 compensation of our NEOs. The Say-on-Pay vote is advisory and therefore not binding on the Company, the Compensation Committee, or our Board. However, our Board and the Compensation Committee value the views of our stockholders and will carefully review and consider the voting results for this proposal when evaluating our executive compensation programs. We currently conduct annual advisory votes to approve the compensation of our NEOs, and we expect to conduct the next advisory Say-on-Pay vote at our 2025 annual meeting of stockholders. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION
Compensation Discussion and Analysis Executive Summary This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, and compensation decisions made under those programs for our
The Board appointed Mr. McInerney as the Company’s Chief Executive Officer effective February 1, 2023, succeeding Mr. Kelly, who is expected to continue to serve the Company as Executive Chairman until he retires as Executive Chairman on January 23, 2024. At that time, Mr. Kelly is expected to remain an employee in a non-executive officer capacity in the position of Senior Advisor until February 15, 2024, when he will retire from the Company. Mr. Suh joined the Company on July 10, 2023, and assumed the Chief Financial Officer position effective August 1, 2023. Mr. Prabhu served as the Company’s Chief Financial Officer until August 1, 2023, and terminated employment with the Company effective September 30, 2023. For a description of payments made to Mr. Prabhu in connection with his termination of employment, see the section below under Employment Arrangements and Potential Payments upon Termination or Change of Control. Except as stated otherwise, references to the Chief Executive Officer and the Chief Financial Officer in this Compensation Discussion and Analysis and related tables refer to Mr. McInerney and Mr. Suh, respectively. Philosophy of our Compensation Program We tie a substantial portion of our NEOs’ overall target annual compensation to the achievement of pre-established financial and non-financial performance goals, which include ESG metrics. The Compensation Committee’s objectives are to balance short- and long-term performance criteria, as well as to recognize corporate, business, and individual achievements that impact all stakeholders. The primary principles that guide the compensation program design and administration are summarized below. Principles of our Compensation Program
Key Elements of our Fiscal Year 2023 Compensation Program
The pay mix charts above represent the components of the annual compensation program for our Chief Executive Officer and other NEOs, including the base salary used for annual incentive determinations after the end of fiscal year 2023. The CEO chart includes Mr. McInerney’s equity award granted in connection with his appointment to CEO because it is reflective of his overall compensation package as Chief Executive Officer. The Other NEOs chart does not include Mr. Suh, who joined in July 2023, or components of pay to other NEOs during fiscal year 2023 that are not considered a part of their typical annual compensation. For purposes of these charts, Mr. McInerney’s annual compensation is included under CEO and Mr. Kelly’s compensation is included under Other NEOs. Components of Executive Compensation
Fiscal Year Visa delivered another year of strong financial results in fiscal year
A significant portion of our fiscal year
Focus on Pre-Established Performance Metrics
Highlights of our Compensation
At the Setting Executive Compensation Compensation Committee and Management Our Compensation Committee, which consists solely of independent directors, is responsible for establishing and reviewing the overall compensation philosophy and program for our As discussed in detail under Committees of the
Setting Performance Goals and Making Compensation Determinations
Role of Independent Consultant Our Compensation Committee has the sole authority to retain and replace compensation consultants to provide it with independent advice. The Compensation Committee has engaged
Compensation
Peer Group As part of its annual compensation review process, the Compensation Committee discussed with To best inform their pay decisions based on where the Company competes for talent, the Compensation Committee has established
A list of
In July 2023, using the methodology described above, the Compensation Committee reviewed the peer companies and added Intuit Inc. and removed Capital One Financial Corporation, The PNC Financial Services Group, Inc., and U.S. Bancorp from the list of peer companies for fiscal year 2024 and for compensation decisions at the end of fiscal year 2023. Use of Market Data
Internal Equity and Tally Sheets As part of its annual compensation review, the Compensation Committee compares our
Base Salary
When setting our During its annual review of the base salaries of our considered market data an internal review of each the individual performance of each Based on this review, and in consultation with its independent consultant, the Compensation Committee decided to increase certain NEOs’ base salaries, as follows: Mr. McInerney’s base salary from $1,100,000 to $1,300,000; Mr. Fabara’s base salary from $750,000 to $800,000; Mr. Taneja’s base salary from $1,100,000 to $1,200,000; and Ms. Mahon Tullier’s base salary from $850,000 to $900,000. These changes were made Subsequent to the ordinary course annual salary increases described in the preceding paragraph, the Compensation Committee increased Mr. McInerney’s base salary from $1,300,000 to $1,400,000 effective February 1, 2023, in connection with his appointment to the role of Chief Executive Officer, and decreased Mr. Kelly’s base salary from $1,550,000 to $1,250,000, effective February 1, 2023, in connection with his appointment to the role of Executive Chairman and the transition of the Chief Executive Officer role and responsibilities to Mr. McInerney. The Compensation Committee also set Mr. Suh’s base salary at $900,000 effective upon his start date. Similar to the annual review of base salaries for Annual Incentive Plan
Incentive Plan Target During fiscal year
Selected Corporate Performance The Compensation Committee approved an annual incentive scorecard for fiscal year 2023, similar to the approach it has used since fiscal year 2021. The scorecard balances annual incentive determinations across financial and non-financial strategic priorities, with rigorous, pre-established quantitative and qualitative corporate performance goals in four categories. The Compensation Committee established the goals early in the fiscal year, reviewed progress against each goal quarterly, and evaluated achievement of the goals at year-end. The Compensation Committee determined a payout percentage based on its evaluation of results against the scorecard and then reviewed each NEO’s individual performance against his or her annual goals to determine whether any further adjustments should be made based on individual performance. These scorecard performance goals were established by reference to our corporate strategy, which is designed to position the Company competitively and thereby deliver superior performance, and which should in turn create value for our stockholders and benefit our employees, clients, and the communities in which we operate. The Compensation Committee expects our NEOs to be focused on a wide range of performance goals that are critical to our corporate strategy, by promoting financial goals along with other priorities that are vital to the Company’s long-term success, such as ESG initiatives. This approach is aligned with our corporate strategy, enhances stockholder value, and reduces the likelihood of excessive risk taking with respect to a particular financial performance goal. Accordingly, the scorecard design takes a holistic approach to the goal-setting process and does not apply specific weighting to the corporate performance Each of the performance goals for the annual incentive plan scorecard was established on November 2, 2022, except that certain preliminary goals were finalized on January 23, 2023. The performance goals were established based on the best available information at the time, designed to be challenging, and expected to incentivize the NEOs to advance Visa’s strategic and operational priorities during the fiscal year. The following table lists selected metrics from the annual incentive scorecard for fiscal year
Following the end of fiscal year 2023, the Compensation Committee evaluated the Company’s performance relative to each goal in the
For purposes of the annual incentive plan,
Individual Performance
Annual Incentive Plan Awards for Fiscal Year
The fiscal year
Long-Term Incentive Compensation The The Compensation Committee administers the equity incentive plan with respect to our Annual Long-Term Incentive Awards Granted in Fiscal Year In determining the types and amounts of annual equity awards to be granted to our The target value of
The following table displays the total combined target value of annual equity awards approved by the Compensation Committee for our
Stock Options and Restricted Stock Units The dollar value of the annual equity awards in the table above were converted to a specific number of stock options or restricted stock units on the November 19, Performance Shares
of the annual award. The target number of performance shares is determined at the beginning of a three-year performance period and the number of shares earned
Vesting of the performance shares is generally subject to each NEO’s continued employment through the entire three-year performance period, except upon death, disability, retirement, involuntary terminations without cause, and certain qualifying (double-trigger) terminations in connection with a change in control, as described in the section titled Executive Compensation – Potential Payments upon Termination or Change of Control. We set EPS goals annually and average the results over three fiscal years to ensure that the goals are meaningful and the EPS results relative to the goals are not disproportionately impacted by unforeseeable market factors outside the NEOs’ control over a multi-year period. This approach provides a performance and retention incentive over the long term with three-year cliff vesting, while also including a modifier based on FY2023-FY2025 Performance Share Design
Impact of Stock Repurchases on EPS The amount of stock repurchases is budgeted at the beginning of the year. If Visa repurchased stock significantly above or below this level, the EPS result would be adjusted accordingly. Relative TSR Modifier The relative
EPS Goals One-third of the target performance shares awarded on November 19, At the end of fiscal year At the completion of the entire three-year performance period in November
The EPS goal for fiscal year
Consistent with Determination of Shares Earned for Performance Shares Previously Awarded on November 19, The performance shares previously awarded to
Based on this Final Payout Result of Long-Term Incentive Awards in Connection with Role Expansions In connection with the Board’s appointment of Mr. McInerney as Chief Executive Officer effective February 1, 2023, the Compensation Committee approved an equity award to Mr. McInerney with a grant date value of $3,000,000. The components and The Compensation Committee also approved one-time performance share awards to Mr. Fabara valued at $3,000,000 on the grant date and to Mr. Taneja and Ms. Mahon Tullier, each valued at $5,000,000 on the grant date.
For each of the one-time equity awards described in this section, the Compensation Committee considered the NEO’s expanded roles and responsibilities effective February 1, 2023, the performance of the applicable NEO, and the desire to promote stability during the Chief Executive Officer transition. In particular, Mr. Fabara assumed the responsibility of leading Client Services; Mr. Taneja’s responsibilities were expanded to accelerate the integration of engineering and product teams to deliver our product roadmap and overall strategy; and Ms. Mahon Tullier assumed the responsibility of leading the Inclusive Impact and Sustainability, Government Engagement, and Transformation teams and was appointed to the role of Vice Chair, Chief People and Corporate Affairs Officer. The Compensation Committee also received advice from its independent compensation consultant and market data for our compensation peer group when determining the terms of the one-time equity incentive awards. These one-time awards are not routine, are not part of the NEOs’ annual compensation, and are only offered under extraordinary circumstances. Each of the performance shares to Mr. McInerney, Mr. Fabara, Mr. Taneja, and Ms. Mahon Tullier described above is scheduled to vest on February 15, 2026, subject to Visa’s performance in fiscal years 2023 through 2025. The vesting conditions for the performance shares are consistent with the performance shares granted to NEOs during the annual review process in November
One-Time Compensation Arrangement for Mr. Suh Upon Joining Visa The Compensation Committee may
In connection with Mr. Suh’s hiring, the Compensation Committee approved a one-time equity award with a grant date fair value of $11,000,000, granted on August 15, 2023. $10,200,000 of the award was to compensate Mr. Suh for unvested equity and other incentives he forfeited when he departed his prior employer, and $800,000 of the award was an additional incentive to join Visa. This one-time equity award consisted of restricted stock units vesting on each of the first, second, and third anniversaries of the date of grant, assuming Mr. Suh’s continued employment by Visa through each vesting date. In addition, to compensate Mr. Suh for forfeited bonus payments and other incentives from his prior employer, Mr. Suh received a one-time cash award of $3,000,000 paid upon joining Visa. $1,300,000 of this one-time cash award was in recognition of Mr. Suh’s obligation to reimburse a portion of the sign-on bonus he received from his prior employer. Mr. Suh is required to repay a pro-rata portion of this one-time cash award if he terminates his employment other than for Good Reason (as defined in Mr. Suh’s One-Time Cash Award Agreement attached to his offer letter) or if his employment is terminated for Cause (as defined in Visa’s Executive Severance Plan) within 12 months of his start date with Visa. In addition, Mr. Suh received a $500,000 cash payment corresponding to the amount he was required to reimburse his prior employer for relocation and related expenses. Modification of Outstanding Stock Options and Performance Shares in Fiscal Year 2023 For All Participants In January 2023, the Compensation Committee reviewed the treatment of stock options and performance shares upon an employee’s termination of employment due to the employee’s death, Disability, or Retirement (“Disability” and “Retirement” as defined in the applicable equity award agreement). The Compensation Committee considered issues such as the intended benefit to employees and their families in these situations, consistency between the treatment of award types, the long-term focus of equity awards and alignment with stockholder interests, and the practices of peer companies and overall market competitiveness, in consultation with its independent compensation consultant. The Compensation Committee considered the treatment of equity awards held by all active employees, not simply the NEOs, in the event of termination of employment due to death, Disability, and Retirement.
Following this review, the Compensation Committee amended all outstanding stock options held by active employees as of the date of the amendment (including the NEOs other than Mr. Suh) to remove the three-year exercise deadline following a termination of employment due to the employee’s death, Disability, or Retirement. As amended, vested stock options in these situations may now be exercised until the option expiration date set forth in the individual’s stock option award agreement. The Compensation Committee also amended all outstanding performance shares held by active employees as of the date of the amendment (including the NEOs other than Mr. Suh) to provide that upon termination of employment due to the employee’s death or Disability prior to the end of the performance period, the performance shares will now vest in the full number of shares on the vesting date, rather than a pro-rata portion of the shares, as if the individual had remained employed throughout the entire performance period. The number of shares that vest is based on actual company performance. Except as described in this section, there were no other amendments to outstanding equity awards. In accordance with applicable SEC rules, the Summary Compensation Table includes as compensation for each applicable NEO the incremental fair value of this modification, as determined under generally accepted accounting principles, for each of the outstanding stock option awards held by the NEOs as of the date of the amendment. A corresponding amount for each award is also included in the Grants of Plan-Based Awards in Fiscal Year 2023 table. The modification of the performance share awards resulted in no incremental fair value and therefore no values are included in the Summary Compensation Table or Grants of Plan-Based Awards in Fiscal Year 2023 table representing the modifications to the performance share awards. Retirement and Other Benefits Our benefits program is designed to be competitive and cost-effective. It is our objective to provide core benefits, including medical, retirement, life insurance, paid time off, and leaves of absence, to all employees and to allow for supplementarynon-core benefits to accommodate regulatory, cultural, and practical differences in the various geographies in which we have operations. We sponsor a frozentax-qualified defined benefit pension plan, which we refer to as the retirement plan. We also sponsor atax-qualified defined contribution 401(k) plan, which we refer to as the 401k plan, to provide market driven retirement benefits to all eligible employees in the United States. We maintained anon-qualified excess retirement benefit plan and anon-qualified excess 401k plan to make up for the limitations imposed on ourtax-qualified plans by the Internal Revenue Code. New contributions to thesenon-qualified plans ceased to be effective February 1, 2014. We also sponsor an unfunded,non-qualified deferred compensation plan, which we refer to as the deferred compensation plan, which allows executive officers and certain other highly compensated employees to defer a portion of their annual incentive awards Perquisites and Other Personal Benefits We provide limited perquisites and other personal benefits to facilitate the performance of our In addition, we have a policy that allows for companion travel on
Executive Chairman, or under extraordinary circumstances with the advance approval of the Chief Executive Officer. The Compensation Committee requires that Mr. McInerney and Mr. Kelly use company-provided aircraft for all business and personal travel, based on an independent third-party finding of a bona fide security concern, which recommended that Mr. McInerney and Mr. Kelly use the aircraft for all travel. Related to this requirement, Mr. McInerney and Mr. Kelly are each required under the terms of the applicable aircraft time-sharing agreement to reimburse Visa for personal use of company-provided aircraft for amounts in excess of $250,000 per fiscal year. Any personal use of the company-provided aircraft in excess of this limit by our Chief Executive Officer or our Executive Chairman pursuant to the aircraft Severance In order to
Fiscal Year
On November on the annual EPS goal established for each of the three fiscal years in the performance an overall modifier based on our TSR Rank over the three-year performance period. For continued service provided to the Company through each date, the Compensation Committee approved an annual equity award to Mr. Kelly consisting of restricted stock units vesting in three equal installments on December 1, 2023, January 1, 2024, and February 1, 2024. Mr. Prabhu terminated employment with the Company effective September 30, 2023, and did not receive a fiscal year 2024 equity award. Vesting of the equity awards is generally subject to each NEO’s continued employment through the entire period, except upon certain terminations of employment due to death, disability, retirement, and certain qualifying (double-trigger) terminations in connection with a change in control. A portion of the equity awards is subject to pro-rata payment in the event of a termination by Visa without cause.
Consistent with prior fiscal years, the total combined value of each equity award was approved by the Compensation Committee after considering, in consultation with its independent consultant, the practices of companies in our compensation peer group, the actual compensation levels of similarly situated executive officers of companies in our compensation peer group, corporate and individual performance during fiscal year
Other Equity Grant Practices and Policies Stock Grant Practices The Compensation Committee In addition to the annual grants, stock awards may be granted at other times during the year to new hires, employees receiving promotions, and in other special circumstances. The For all
Stock Ownership Guidelines The Compensation Committee maintains stock ownership guidelines for our
Mr. Prabhu had a stock ownership guideline of 4x, which applied until his departure from Visa on September 30, 2023. Equity interests that count toward the satisfaction of the ownership guidelines include shares owned outright by the Hedging and Pledging Prohibition As part of our insider trading policy, all employees, including our
In addition to the terms required (fault-based restatement). The Clawback Policy permits the Board to determine
We believe our Clawback Policy,
Tax Implications – Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code of 1986, as amended, limits our ability to deduct for tax purposes compensation in excess of
For information regarding the Compensation Committee’s review of compensation-related risk, please see the section entitledCommittees of the Board of Directors – Risk Assessment of Compensation Programs.
Summary Compensation Table for Fiscal Year The following table and related footnotes describe the total compensation earned for services rendered during fiscal years
Stock Awards
Option Awards
Non-Equity Incentive Plan Compensation
Change in Pension Value and Non-qualified Deferred Compensation Earnings
All Other Compensation
All Other Compensation in Fiscal Year The following table sets forth additional information with respect to the amounts reported in the “All Other Compensation” column of theExecutive Compensation – Summary Compensation Table for Fiscal Year
Grants of Plan-Based Awards in Fiscal Year The following table provides information aboutnon-equity incentive awards and long-term equity-based incentive awards granted during fiscal year
Outstanding Equity Awards at The following table presents information with respect to equity awards made to each of our
Option Exercises and Stock Vested Table for Fiscal Year The following table provides additional information about the value realized by our
Pension Benefits Table for Fiscal Year The following table shows the present value of accumulated benefits payable to our
Employer credits Visa Retirement Plan and Visa Excess Retirement Benefit Plan Under the Visa Retirement Plan,
Prior to January 1, 2011, retirement benefits were calculated as the product of 1.25% times the employee’s years of service multiplied by the employee’s monthly final average earnings for the last 60 consecutive months before retirement (or, for employees hired prior to October 1, 2002, the product of 46.25% times the employee’s years of service divided by 25 years, multiplied by the employee’s monthly final average earnings for the 36 highest consecutive months in the last 60 months before retirement). Eligible earnings include salary, overtime, shift differentials, special and merit awards, and short-term cash incentive awards.
If an employee retires early, that is, between the ages of 55 and 64 (or between the ages of 50 and 61 if hired prior to October 1, 2002), and has completed at least ten years of service with the Company, the amount of that employee’s benefits is reduced for each complete year that the employee begins receiving early retirement benefits before the age of 65 (or before the age of 62 if hired prior to October 1, 2002). If an employee retires prior to becoming eligible for early or normal retirement, the amount of his or her benefits is actuarially reduced and is generally not as large as if the employee had continued employment until his or her early or normal retirement date. The Visa Retirement Plan began transitioning to cash balance benefits effective January 1, 2008 and completed the transition effective January 1, 2011. The change to a cash balance benefit formula took effect immediately for employees hired or rehired after December 31, 2007. However, for employees hired before January 1, 2008 (and not rehired thereafter), the applicable Visa Retirement Plan benefit formula described above was grandfathered for a three-year period, and grandfathered employees continued to accrue benefits under that benefit formula. Their accrued benefits at December 31, 2010 (the last day of the grandfathered period) or the date they terminated employment, if earlier, were preserved. Because we completed the conversion to a cash balance plan formula beginning on January 1, 2011, all benefit accruals from that date until December 31, 2015 were under the cash balance benefit formula. Prior to January 1, 2016, under the cash balance plan formula, 6% of an employee’s eligible monthly pay was credited each month to the employee’s notional cash balance account, along with interest each month on the account balance at an annualized rate equal to the30-year U.S. Treasury Bond average annual interest rate for November of the previous calendar year. The
Prior to February 1, 2014, we also provided for benefit accruals under an excess retirement benefit plan. To the extent that an employee’s annual retirement income benefit under the Visa Retirement Plan exceeds the limitations imposed by the Internal Revenue Code, such excess benefit is paid from ournon-qualified, unfunded, noncontributory Visa Excess Retirement Benefit Plan. The vesting provisions of, and formula used to calculate the benefit payable pursuant to, the Visa Excess Retirement Benefit Plan are generally the same as those of the Visa Retirement Plan described above, except that benefits are calculated without regard to the Internal Revenue Codetax-qualified plan limits and then offset for benefits paid under the qualified plan. Effective February 1, 2014, we discontinued benefit accruals under the Visa Excess Retirement Benefit Plan.
Non-qualified Deferred Compensation for Fiscal Year Visa Deferred Compensation Plan Under the terms of the Visa Deferred Compensation Plan, eligible participants are able to defer up to 100% of their cash incentive awards Visa Directors Deferred Compensation Under the terms of the Visa Directors Deferred Compensation Plan, non-employee directors are able to defer up to 100% of their fees payable in cash if they submit a qualified deferral election. Unless a participant’s separation from service constitutes his or her “retirement,” the participant’s benefits under the Visa Directors Deferred Compensation Plan will be paid in a lump sum in cash, as previously elected by the participant, either (i) within 90 days following the date of the separation from service, or (ii) on the next January 1 following the separation from service. Participants are always fully vested in their deferrals under the Visa Directors Deferred Compensation Plan. Upon termination of the Visa Director Deferred Compensation Plan within 12 months of a “change of control,” participants’ benefits under the Visa Director Deferred Compensation Plan will be paid immediately in a lump sum. Further, under the terms of the restricted stock unit award agreements applicable to directors, provided they submit a qualified deferral election, directors are eligible to defer settlement of the restricted stock units they receive for service on the Board until the later of (i) the first anniversary of the grant date or (ii) a date or dates during their service or following their separation from service, subject to earlier settlement upon the participant’s death or following a change in control. Visa 401k Plan and Visa Excess 401k Plan The Visa 401k Plan is atax-qualified 401(k) retirement savings plan pursuant to which all of our U.S.-based employees, including our During fiscal year Prior to February 1, 2014, we also provided for a contribution in an excess 401k plan. Because the Internal Revenue Code limits the maximum amount a company and an employee can contribute to an employee’s 401(k) plan account each year, we continued to provide the matching contribution, after the applicable Internal Revenue Code limits are reached, to the Visa Excess 401k Plan, which is anon-qualified noncontributory retirement savings plan. Employees are eligible to participate in the Visa Excess 401k Plan if their salaries are greater than the Internal Revenue Code pay cap or if the total of their contributions and our matching contributions to the Visa 401k Plan exceed the Internal Revenue Code benefit limit. The features of the Visa Excess 401k Plan are generally the same as under the Visa 401k Plan, except that benefits cannot be rolled over to an IRA or another employer’s qualified plan. Effective February 1, 2014, we discontinued any future contributions to the Visa Excess 401k Plan.
The following table provides information about each of our
The following table shows the funds available under the Visa Deferred Compensation Plan, the Visa Director Deferred Compensation Plan, and the Excess 401k Plan and their annual rate of return for fiscal year
Employment Arrangements and Potential Payments upon Termination or Change of Control The following discussion relates only to the offer letters with our Offer On June 16, 2023, we entered into an offer letter agreement with Chris Suh under which he joined Visa as Executive Vice President, Chief Financial Officer Designate on July 10, 2023, and
Visa. On
In addition, as required under the
related expenses. Pursuant to the terms of Pursuant to the terms of the offer letter, the recommended award value was $9,000,000 for Mr. Suh’s annual equity award granted November 19, 2023. As described under the heading Compensation Discussion and Analysis – Fiscal Year 2024 Compensation, this award consisted of the typical mix for annual equity awards to our NEOs, with 25% of the total value in stock options, 25% in restricted stock units, and 50% in performance shares at the target value. Executive Severance Plan We believe Our incentive award, Mr. Prabhu’s departure on September 30, 2023, was a termination without cause for purposes of the Executive Severance Plan. Accordingly, subject to Mr. Prabhu’s execution and non-revocation of a waiver and release of claims and compliance with applicable restrictive covenants, Mr. Prabhu is entitled to the Executive Severance Plan payments described in the preceding paragraph. Such payments are quantified in the “Involuntary Not for Cause” column of the table below entitled “Termination Payments and Benefits for Vasant Prabhu.” Cash Severance Policy for Section 16 Officers In November 2023, we adopted a cash severance policy (Severance Policy), which provides that we will not enter into any new employment agreement, severance agreement, or separation agreement with any Section 16 officer, or establish any new severance plan or policy covering any Section 16 officer, in each case that provides for “cash severance benefits” (as defined in the Severance Policy) exceeding 2.99 times the sum of the Section 16 officer’s base salary plus target bonus, unless we seek stockholder ratification of such agreement, plan, or policy.
Equity Incentive Awards Pursuant to the terms of certain award agreements under the Quantification of Termination Payments and Benefits The following tables reflect the amount of compensation that would be paid to each of our Termination Payments and Benefits for
Termination Payments and Benefits for
Termination Payments and Benefits for Chris Suh
Termination Payments and Benefits for Vasant Prabhu
Termination Payments and Benefits for
Termination Payments and Benefits for
Termination Payments and Benefits for Kelly Mahon Tullier
For our To identify the median of the annual total compensation of all our employees, as Median Employee We identified our median employee from our worldwide employee population, including both part-time and full-time employees other than our CEO, as of September 30, 2023. Given the worldwide geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees. A significant number of our employees around the world participate in our annual cash bonus and equity incentive award plans. Consequently, to identify the median employee, we selected base salary or wages plus overtime pay, annual cash bonus plan payments, and equity award grant date values as the most appropriate measure of compensation. We measured compensation for our employees using the 12-month fiscal period ending September 30, 2023. We selected September 30, 2023 as our measurement date, which was the last day of our 2023 fiscal year, because it provided the most accurate information regarding compensation for such fiscal year. In making this determination, we did not make any cost-of-living adjustments. Annual Total Compensation To determine the annual total compensation of the median employee, we identified and calculated the elements of the employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Mr. McInerney began serving as the Company’s Chief Executive Officer effective February 1, 2023. As permitted by Instruction 10 to Item 402(u) of Regulation S-K, for pay ratio purposes, Mr. McInerney’s compensation was annualized to represent his compensation as if he were CEO for the entire 2023 fiscal year. The calculation included the amounts reported in the Executive Compensation – Summary Compensation Table for Fiscal Year 2023, except that the salary was adjusted to assume Mr. McInerney received his year-end base salary rate for the entire fiscal year, and applicable elements of “All Other Compensation” were adjusted to assume he was CEO for the entire fiscal year. Consequently, the annual total compensation reported for CEO pay ratio purposes does not reflect the “Total” column of our Executive Compensation – Summary Compensation Table for Fiscal Year 2023 included in this proxy statement,
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item S-K, we are providing the Compensation Discussion and Analysis
section of this proxy statement and does not represent amounts actually earned or realized by our NEOs. For purposes of the “compensation actually paid” calculations presented in footnotes 2 and 3, any unvested awards that are eligible for Compensation Discussion and Analysis section of this proxy statement. Pay Versus Performance Table
Relationship Between Pay and Performance The graphs presented below describe the relationship between compensation actually paid (calculated in accordance with Item 402(v) of Regulation S-K) and our net income, EPS – PS adjusted, and cumulative total shareholder return over the three-year period from fiscal year 2021 to fiscal year 2023.
  Financial Performance Measures Performance share awards represent the largest component of our annual executive compensation program, with vesting determined based on EPS and relative TSR performance. In addition, as described under Compensation Discussion and Analysis – Annual Incentive Plan Below, in an unranked order, are the most important financial performance measures used to link executive compensation actually paid to the NEOs to company performance for the fiscal year EPS – PS adjusted Relative TSR Net Revenues Growth – VIP adjusted Net Income Growth – VIP adjusted EPS Growth – VIP adjusted
Equity Compensation Plan Information The table below presents information as of
Proposal 3 – Ratification of the Appointment of KPMG LLP The Audit and Risk Committee
Company’s financial statements. The Audit and Risk Committee has appointed KPMG LLP as our independent registered public accounting firm to audit the financial statements of Visa Inc. and its subsidiaries for the fiscal year ending September 30,
The Audit and Risk Committee believes that the continued retention of KPMG as our independent registered public accounting firm is in the best interest of the Company and our stockholders, and we are asking our stockholders to ratify the selection of KPMG as our independent registered public accounting firm for fiscal year A representative of KPMG will be present at the Annual Meeting and will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR
Independent Registered Public Accounting Firm Fees The following table sets forth the aggregate fees billed to the Company by KPMG for fiscal years
Consistent with SEC and PCAOB requirements regarding auditor independence, the Audit and Risk Committee has responsibility for appointing, setting the compensation for, and overseeing the work of our independent registered public accounting firm. In accordance with its charter and the Audit and Risk Committee’sPre-Approval Policy, the Audit and Risk Committee is required topre-approve all audit and internal control-related services, audit-related services, and To further help
**** After consideration, and informed by engagement with holders representing a significant percentage of the outstanding shares of each class of common stock, the Board has unanimously approved, adopted and declared advisable, and recommends that our stockholders approve and adopt, the Class B Exchange Offer Program Certificate Amendments, which would authorize Visa to conduct one or more exchange offers that would effectively enable the Class B stockholders to exchange and sell portions of their Class B common stock, subject to certain conditions. As discussed herein, the Board has determined that the Exchange Offer Program (as defined below) is in the best interests of all of our stockholders because the program:
Below is an overview of the Class B Exchange Offer Program Certificate Amendments, which are discussed in detail herein: Overview of the Class B Exchange Offer Program Certificate Amendments
Transactions Contemplated by the Class B Exchange Offer Program Amendments The Exchange Offer Program The Exchange Offer Program is intended to provide Class B stockholders with additional liquidity, while continuing to maintain economically equivalent protection to holders of Class A and Class C common stock from monetary liability related to the U.S. Covered Litigation. In addition, the Class B Exchange Offer Program is designed to address potential overhang risk by mitigating the downward pressure on our Class A common stock price that could occur if transfer restrictions on all Class B common stock were to be released simultaneously upon final resolution of the U.S. Covered Litigation, as is currently structured in our Certificate. The Class B common stock has been subject to transfer restrictions for over 15 years, substantially longer than Visa and its stockholders expected at the time of the 2008 IPO. The Exchange Offer Program allows for a programmatic and measured release of Class B common stock Illustrative(1)
The Class B Exchange Offer Program Certificate Amendments would redenominate Visa’s Class B common stock as Class B-1 common stock (which would otherwise remain identical to the previous Class B common stock). In addition, subject to certain conditions, the amendments would authorize Visa to conduct a series of exchange offers that would comprise an initial exchange offer (Initial Exchange Offer) and up to three successive exchange offers (each, a Successive Exchange Offer), that would allow Class B stockholders to exchange portions of their Class B shares into freely tradeable shares under certain conditions, while providing economically equivalent protection to Class A and Class C stockholders from the U.S. Covered Litigation through a combination of the remaining Class B shares and makewhole agreements (collectively, the Exchange Offer Program).
The Initial Exchange Offer The mechanics of the Initial Exchange Offer
As shown above under the Initial Exchange Offer, Class B-1 stockholders (formerly Class B stockholders) would be offered the opportunity to tender some or all of their Class B-1 common stock in exchange for a combination of:
By participating in the Initial Exchange Offer, each holder of Class B-1 common stock would effectively have the ability to sell up to half of its Class B-1 common stock into the public market in the form of Class C common stock, which upon sale is convertible into Class A common stock at the then-applicable conversion rate. Successive Exchange Offers Once the Initial Exchange Offer is completed, Visa would be authorized, at its discretion and subject to the conditions below, to conduct up to three Successive Exchange Offers that would have the effect of releasing the transfer restrictions on up to half of the applicable Class B common stock issued in a previous exchange offer. In exchange for the tendered Class B common stock (the applicable Class B-X common stock), Visa would issue (x) shares of a successive class of Class B common stock (the applicable Class B-Y common stock) (for example, in the first Successive Exchange Offer, Class B-3 common stock would be issued in exchange for Class B-2 common stock) in an amount equivalent to half of the Class B-X common stock tendered in exchange and (y) shares of Class C common stock in an amount equivalent to half of the value of the Class B-X common stock tendered in the Exchange Offer.
Each successive class of Class B common stock issued in a Successive Exchange Offer would be subject to the same transfer and convertibility restrictions as the Class B common stock that is currently outstanding. However, in order to maintain equivalent exposure to the U.S. Covered Litigation liability, future downward conversion rate adjustments to each new class of Class B-Y common stock (the applicable Class B-Y Conversion Rate) would be accelerated to occur at twice the rate as that applicable to the Class B-X common stock tendered in exchange (the applicable Class B-X Conversion Rate). For example, in the first Successive Exchange Offer, future downward adjustments to the conversion rate for Class B-3 common stock would occur at the twice the rate as applicable to Class B-2 common stock (or four times the rate as applicable to Class B-1 common stock).
For example, after Visa conducts the initial Successive Exchange Offer directed to holders of Class B-1 common stock in which these holders are offered the opportunity to receive Class B-2 common stock, Visa could not offer the holders of Class B-2 common stock the opportunity to exchange the Class B-2 Common Stock for Class B-3 common stock until (i) at least one year had elapsed from the initial Successive Exchange Offer that resulted in the initial issuance of the Class B-2 common stock and (ii) the estimated interchange reimbursement fees at issue in unresolved claims for damages in the U.S. Covered Litigation had been reduced by 50% or more. With respect to the first condition for Successive Exchange Offers, Visa will use estimates of the interchange reimbursement fees at issue in respect of any unresolved claims seeking damages in any of the U.S. Covered Litigation as of October 1, 2023 for the purpose of determining whether Visa is authorized to conduct a Successive Exchange Offer. Visa’s current estimate of such interchange reimbursement fees as of October 1, 2023 is approximately $49.6 billion. This estimate does not include claims in certain purported indirect purchaser class actions or any claims of merchants serviced by opt outs that are payment processors and facilitators. The First Successive Exchange Offer The mechanics of the first Successive Exchange Offer
If not all Class B common stock was tendered in the Initial Exchange Offer or a previous Successive Exchange Offer, Visa would also be authorized to conduct additional Exchange Offers for the untendered Class B common stock remaining. Any additional Exchange Offer for untendered Class B common stock would occur on the same terms as the Initial Exchange Offer or previous Successive Exchange Offer, as applicable, and is subject to Visa’s discretion.
Conditions to Participate in the Exchange Offer Program As a condition to participation in the Initial Exchange Offer and any Successive Exchange Offer, each participating Class B stockholder would be required to enter into a separate agreement with Visa, substantially in the form attached as Annex B to this proxy statement (a Makewhole Agreement) to reimburse Visa in cash for the portion of any future deposit into the U.S. Covered Litigation escrow account that, but for the holder’s participation in the applicable Exchange Offer, would have been absorbed by such holder through downward adjustments to the applicable Class B-X Conversion Rate of the Class B-X common stock tendered in the Exchange Offer if, as a result of the deposit, the as-converted value of the Class B-Y common stock it received in the Exchange Offer becomes or is already less than zero, but the applicable Class B-X Conversion Rate remains greater than or equal to zero. For example, following the Initial Exchange Offer and prior to any Successive Exchange Offer, a payment obligation would arise under the Makewhole Agreements for the Class B-2 common stock if a deposit to the U.S. Covered Litigation escrow account causes the as-converted value of the Class B-2 common stock to fall below zero and if, following such deposit, the as-converted value of the Class B-1 common stock remains equal to or greater than zero. In addition, certain parent entities of the participating Class B stockholder (each, a Parent Guarantor) would be obligated to execute the Makewhole Agreement and agree to unconditionally guarantee the participating holder’s payment obligations. Subject to certain exceptions that apply to certain holders to facilitate compliance with applicable federal banking regulations, each beneficial owner of 50% or more of a participating holder’s or Parent Guarantor’s equity interests must execute the Makewhole Agreement. Due to the varying applicability of federal banking regulations among Visa’s Class B stockholders, the extent of eligible Parent Guarantors will differ for participating holders. However, each participating holder would receive, and must execute, the same form of Makewhole Agreement. In addition, pursuant to the Makewhole Agreement, each participating Class B stockholder would agree to temporary transfer restrictions with respect to any Class C common stock received in the applicable Exchange Offer. Additional Detail on the Exchange Offer Program History of Visa’s Common Stock Visa’s authorized common stock currently consists of three classes:
Our Class B common stock was created as part of our IPO to provide protection to the Class A and Class C common stock from the monetary liability for the U.S. Covered Litigation, which it has successfully done since 2008. At the time of our IPO, Visa established the U.S. retrospective responsibility plan (Responsibility Plan) to implement such protections with respect to the U.S. Covered Litigation, which consists, collectively, of a number of matters that have been settled or otherwise fully or substantially resolved, and the ongoing Interchange Multidistrict Litigation (MDL), In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The MDL is composed primarily of a damages class, claims brought by merchants that opted out of the damages class, and an injunctive relief class. The MDL cases challenge Visa’s purported setting of interchange reimbursement fees, “no surcharge” and honor-all-card rules, alleged tying and bundling of transaction fees, and the reorganization and IPO, and were brought under federal antitrust laws and, in some cases, certain state unfair competition laws. As part of the Responsibility Plan, Visa established a U.S. Covered Litigation escrow account from which any settlements or judgments relating to the U.S. Covered Litigation would be payable. When Visa funds the U.S. Covered Litigation escrow account, any outstanding Class B common stock is subject to dilution through downward adjustments to the Class B Conversion Rate, making each share of Class B common stock convertible into fewer shares of Class A common stock. This mechanic allows Visa to fund the U.S. Covered Litigation escrow account through the equivalent of a contribution of Class A common stock from the Class B stockholders to Visa. Since 2008, the Class B common stock has been subject to transfer restrictions that were implemented in light of the Responsibility Plan that prohibit the conversion of the Class B common stock into Class A common stock. Specifically, the transfer restrictions applicable to Class B common stock disallow its conversion and public sale until the final resolution of the U.S. Covered Litigation. Accordingly, under the current Certificate, all shares of Class B common stock will become convertible into and able to be publicly sold as shares of Class A common stock upon the final resolution of the U.S. Covered Litigation (Escrow Termination Date), based on the Class B Conversion Rate in effect at such time. As part of the Responsibility Plan, Visa also entered into a Loss Sharing Agreement between Visa International Service Association, Visa U.S.A., Inc. and certain Visa member banks. The Loss Sharing Agreement provides for the indemnification of the Visa parties with respect to certain matters. Under the Loss Sharing Agreement, if all available funds in the U.S. Covered Litigation escrow account are insufficient to satisfy a Visa litigation obligation, and the as-converted value of the Class B common stock has reached zero each member bank party to the Loss Sharing Agreement is required to contribute an amount equal to the unsatisfied Visa litigation obligation multiplied by the party’s then-current membership proportion. The Class B Conversion Rate adjustment mechanism and transfer restrictions described above were designed to cause monetary liability for the U.S. Covered Litigation to be borne by Class B stockholders, who, prior to the IPO, were the U.S.-based owners of the Visa enterprise. Visa has settled claims representing approximately 90% of the payments volume and interchange at issue in the MDL1, the only remaining matter in the U.S. Covered Litigation, and to date Visa has paid through the Responsibility Plan approximately $6.6 billion for settlements in that remaining matter. However, during that same time, the as-converted pre-tax value of the Class B common stock has appreciated from approximately $8 billion to over $99 billion as of November 24, 2023, an increase of 1,185%. Because the final resolution of all U.S. Covered Litigation has not yet occurred, the transfer restrictions on our Class B common stock have now been in place for over 15 years, substantially longer than Visa and the Class B stockholders contemplated at the time of our IPO. In light of these developments, Visa’s Board and management have undertaken an evaluation of the appropriate steps to chart a programmatic and measured course of action that will benefit all of Visa’s stockholders while maintaining economically
equivalent protection for Class A and Class C stockholders against monetary liability for the remaining U.S. Covered Litigation in accordance with the Responsibility Plan. The Class B Exchange Offer Program Certificate Amendments The relevant sections of the Certificate to be amended are set forth in Annex A. This summary of the Class B Exchange Offer Program Amendments is qualified in its entirety by reference to Annex A. Implementation of the Exchange Offer Program will require several amendments to our Certificate, including:
Purpose and Effect of the Class B Exchange Offer Program Certificate Amendments Under the Class B Exchange Offer Program Certificate Amendments, the Class B common stock will be redenominated as Class B-1 common stock, and Visa will be authorized to conduct the Initial Exchange Offer, in which each Class B-1 stockholder will have the opportunity to exchange some or all of its Class B-1 common stock, and up to three Successive Exchange Offers, in which Class B stockholders would have the opportunity to exchange some or all of the class of Class B common stock it received in the applicable Exchange Offer for the next preceding class of Class B common stock. Under each Exchange Offer, for every two shares of Class B-X common stock tendered, a participating holder would receive (i) one newly issued share of Class B-Y common stock (the successive class of Class B common stock) and (ii) newly issued Class C common stock in an amount equivalent to one share of Class B-X common stock (based on the respective amounts of Class A common stock into which the applicable Class B-X common stock and Class C common stock would be convertible as of the completion of the Exchange Offer). In order to participate in any Exchange Offer, a participating Class B stockholder, together
with any applicable Parent Guarantor thereof, will be required to execute and deliver to Visa a separate Makewhole Agreement, substantially in the form attached as Annex B to this proxy statement, as described herein. Collectively, the Class B Exchange Offer Program Certificate Amendments, the consummation of the Initial Exchange Offer and any Successive Exchange Offer, and the execution of the Makewhole Agreements described below are designed to benefit all Visa stockholders by: (i) providing economically equivalent protection to Class A and Class C stockholders from the remaining U.S. Covered Litigation, (ii) providing a programmatic and measured structure for releasing portions of Class B common stock thereby mitigating potential overhang risk, and (iii) providing our Class B stockholders—large and small financial institution clients—with the opportunity for partial liquidity after having been restricted from making public sales for over 15 years. As shown in the following table, after the completion of the Exchange Offer Program, the value of the protection provided to our Class A and Class C stockholders from U.S. Covered Litigation would remain equivalent to the value of the Class B common stock prior to the Exchange Offer, while the potential overhang risk could lessen as compared to the amount of overhang risk under our current Certificate provisions. As noted above, each Successive Exchange Offer is also predicated on the necessary reduction in litigation exposure as measured by “interchange at issue” in the U.S. Covered Litigation.
Visa Common Stock Received in each Exchange Offer The Class B-Y common stock received by participating holders in the Initial Exchange Offer and each Successive Exchange Offer will be a new class of stock that is subject to the same transfer and convertibility restrictions that currently apply to the Class B common stock. As an illustrative example of what each holder would receive in the Initial Exchange Offer, let us assume there are three stockholders that each hold 100,000 Class B shares, the Class B Conversion Rate is 1.5875, Class C Conversion Rate is 4.000, and the Class A share price on the date of exchange is $254.30. Their holdings after the Initial Exchange Offer, based on their participation level, would be as follows:
Figures may not recalculate exactly due to rounding.
Immediately following completion of the Initial Exchange Offer and each Successive Exchange Offer, the Class B-Y Conversion Rate for the class of Class B-Y common stock issued in the Exchange Offer will equal the Class B-X Conversion Rate for the Class B-X common stock tendered in the Exchange Offer in effect immediately prior to the Exchange Offer’s completion. However, following any future deposits made to the U.S. Covered Litigation escrow account, future downward adjustments to the applicable Class B-Y Conversion Rate will be accelerated to occur at twice the rate as that applicable to the class of Class B-X common stock tendered in exchange. As of November 24, 2023, there were 245,513,385 shares of Class B common stock outstanding, which had a market value of more than $99 billion on an as-converted basis based on Visa’s Class A closing share price and the Class B Conversion Rate on November 24, 2023. Assuming full participation, upon completion of the Initial Exchange Offer, we would have an aggregate of approximately 123 million shares of Class B-2 common stock outstanding, which, based on the same Class A share price and conversion rate, would have a market value of more than $49.5 billion on an as-converted basis. This as-converted market value would remain available to absorb liability for the U.S. Covered Litigation through the Class B-2 Conversion Rate adjustment mechanism applicable to the Class B-2 common stock. Class C common stock is not currently subject to transfer restrictions under the Certificate and automatically converts to four shares of Class A common stock upon a sale into the public market. However, to mitigate the potential market disruption that could occur upon the immediate sale of the Class C common stock issued in an Exchange Offer, the Makewhole Agreements
will contain transfer restrictions that will only allow a participating holder to sell up to one-third of the Class C common stock it receives in the applicable Exchange Offer within the first 45 days following the applicable Exchange Offer, up to two-thirds within the first 90 days following the applicable Exchange Offer, and the balance after 90 days following the applicable Exchange Offer. Assuming full participation in the Initial Exchange Offer, based on the current Class B Conversion Rate, Visa would issue approximately 48.7 million shares of Class C common stock in the Exchange Offer, which would be convertible, following the expiration of the Makewhole Agreement’s transfer restrictions into approximately 194.9 million shares of Class A common stock that may be sold publicly prior to the Escrow Termination Date. Makewhole Agreements Class B stockholders who elect to participate in any Exchange Offer will be required to execute and deliver a Makewhole Agreement with respect to the Class B-Y common stock issued to it in an Exchange Offer. Under each Makewhole Agreement, the participating holder will agree to reimburse Visa for the portion of any future deposit into the U.S. Covered Litigation escrow account that, but for the holder’s participation in the applicable Exchange Offer, would have been absorbed by such holder through downward adjustments to the conversion rate of the class of Class B-X common stock tendered in the applicable Exchange Offer if, as a result of the deposit, the as-converted value of the Class B-Y common stock it received in the applicable Exchange Offer becomes or is already less than zero but the as-converted value of the applicable Class B-X common stock remains greater than or equal to zero. A Class B stockholder who participates in more than one Exchange Offer would be party to multiple Makewhole Agreements, one for each Exchange Offer in which the stockholder participates. However, a holder who is party to Makewhole Agreements for more than one class of Class B-Y common stock would only be obligated to reimburse Visa under the Makewhole Agreement that corresponds to a single class of Class B-Y common stock at any given time. So long as the Class B-X Conversion Rate with respect to any Class B-X and Class B-Y common stock pair remains greater than or equal to zero, payment obligations would only arise under the Makewhole Agreements for the corresponding Class B-Y common stock. If the Class B-X Conversion Rate in such Class B-X and Class B-Y common stock pair falls to zero, payment obligations under the Makewhole Agreements relating to such Class B-Y common stock would terminate, and potential payment obligations would arise under the Makewhole Agreements relating to the Class B-X common stock. In this scenario, the Class B-X common stock would effectively become the Class B-Y common stock with respect to the preceding Class B-X and Class B-Y common stock pair. The obligation to reimburse Visa under successive Makewhole Agreements would continue in this manner until the Class B-1 Conversion Rate reaches zero. At such time, the Class B-1 common stock would have lost all value and, following the exhaustion of the U.S. Covered Litigation escrow account, the parties to the Loss Sharing Agreement would be obligated to indemnify Visa under the Loss Sharing Agreement. Using the Makewhole Agreement corresponding to the Class B-2 common stock issued in the Initial Exchange Offer as an example, for each share of Class B-2 common stock issued to a Class B-1 stockholder in the Initial Exchange Offer, the makewhole payment obligation would equal two times the reduction in value that a single share of Class B-1 common stock would have experienced following a deposit into the U.S. Covered Litigation escrow account. The loss absorption capacity attributable to the Class B common stock fluctuates with changes in the price of Class A common stock. Assuming a constant Class B Conversion Rate, changes in the price of Class A common stock will cause proportional changes in the total loss absorption capacity of Class B common stock. Upon the effectiveness of the Class B Exchange Offer Program Certificate Amendments and completion of the Initial Exchange Offer and any Successive Exchange Offer, the total loss absorption capacity of any outstanding class of Class B-Y common stock, and the total potential makewhole payment obligations under the Makewhole Agreements, will similarly fluctuate with changes in the market price of our Class A common stock. Because there is no cap on the Class A common stock price, as long as the Class B-1 Conversion Rate is greater than zero, there is no cap on the value of Class B-1 common stock. Therefore, until all U.S. Covered Litigation has been resolved, there is no dollar cap on the amount of payments that a participating holder and its Parent Guarantors may be obligated to make under its Makewhole Agreement. Authority to Repurchase Class B Common Stock Visa is authorized under the Certificate, and will remain authorized following the effectiveness of the Class B Exchange Offer Program Certificate Amendments, to repurchase outstanding shares of our common stock, including Class B common stock, Class B-1 common stock and any new class of Class B-Y common stock issued in an Exchange Offer. We may in the future
conduct repurchases of such stock, including through one or more tender offers, as we deem appropriate based on, among other things, the status of the U.S. Covered Litigation, our estimates of remaining monetary liability with respect thereto and Visa’s assessment at the time of the potential loss-absorption capacity of the remaining Class B common stock. Any such repurchases, which would reduce the aggregate loss-absorption capacity of the Class B common stock, would occur upon the terms and at the prices as we may determine in our discretion. Background and Reasons for the Class B Exchange Offer Program Amendments In the ordinary course of business, Visa’s Board and management regularly review our governing documents and oversee risk management, including risks related to legal matters. In connection with such reviews, the Board and management have discussed whether it would be in the best interests of Visa and its stockholders to release portions of the Class B common stock from the transfer restrictions to which they are currently subject. The Class B common stock has been subject to transfer restrictions for over 15 years, substantially longer than Visa and the Class B stockholders expected at the time of the 2008 IPO, and with significant progress towards resolving the remaining U.S. Covered Litigation, including the finalization of the settlement with the damages class, we believe now is an appropriate time to adopt the Class B Exchange Offer Program Certificate Amendments. After consideration of information and analysis prepared by Visa management (with input from outside advisors) regarding the remaining U.S. Covered Litigation, the current as-converted market value of Class B common stock, and the impact that a one-time conversion of up to all outstanding shares of Class B common stock may have on our Class A and Class C stockholders, the Board has determined that adoption of the Class B Exchange Offer Program Certificate Amendments is in the best interest of all of our stockholders. Stockholder Engagement In consultation with the Board, management initiated a dedicated process of engagement with stockholders related to the Exchange Offer Program, and thereafter finalized the terms of the Class B Exchange Offer Program Certificate Amendments, including the terms and conditions of the Makewhole Agreement. This evaluation included engagement with holders of each class of our common stock, as well as other Visa stakeholders, to discuss the Class B Exchange Offer Program Certificate Amendments and the proposed Exchange Offer Program and solicit feedback for consideration by management and the Board. Visa conducted outreach to Class A stockholders representing approximately 58% of outstanding Class A common stock, Class B stockholders representing approximately 75% of outstanding Class B common stock and Class C stockholders representing approximately 57% of outstanding Class C common stock. Discussions were held with all stockholders across the three classes who expressed interest to engage with Visa on this matter, totaling Class A stockholders representing approximately 41% of outstanding Class A common stock, Class B stockholders representing approximately 75% of outstanding Class B common stock, and Class C stockholders representing approximately 57% of outstanding Class C common stock. Engagement with stockholders informed the Board’s decision made to recommend the approval and adoption of the Class B Exchange Offer Program Certificate Amendments. During our engagement discussions with stockholders regarding the Exchange Offer Program, stockholders provided feedback that supporting Visa’s stock price through share repurchases would be viewed favorably. The Board took that feedback into consideration and consistent with prior practices, has authorized a new $25 billion Class A common stock share repurchase program, providing multi-year flexibility, that was announced on October 24, 2023. Following the evaluation process, the Board declared advisable and approved the Class B Exchange Offer Program Certificate Amendments and resolved to (i) submit the approval and the adoption of the Class B Exchange Offer Program Certificate Amendments to stockholders of Visa at the Annual Meeting, and (ii) recommend that Visa stockholders approve and adopt the Class B Exchange Offer Program Certificate Amendments at the Annual Meeting.
Key Board Considerations In reaching its determinations, the Board consulted with Visa’s independent advisors, and considered various information and factors described below. Among the key information and factors considered by the Board were:
As described above, Class B stockholders who elect to participate in any Exchange Offer will be required to execute and deliver a Makewhole Agreement with respect to the Class B-Y common stock issued in such Exchange Offer, pursuant to which the participating Class B stockholder will agree to reimburse Visa for the portion of any future deposit into the U.S. Covered Litigation escrow account that, but for the holder’s participation in the applicable Exchange Offer, would have been absorbed by such holder through downward adjustments to the conversion rate of the class of Class B-X common stock tendered in the applicable Exchange Offer. When evaluating the protections provided under the Exchange Offer Program and determining that the protections are in the best interests of our Class A and Class C stockholders, the Board considered the credit and collection risk associated with the Makewhole Agreements, that the Class B stockholders are predominantly U.S. financial institutions that are generally considered creditworthy, obligations under the Makewhole Agreements would be guaranteed by such holders’ respective Parent Guarantors, and that payments under each Makewhole Agreement will only be required if the as-converted value of the Class B-Y common stock received in the applicable Exchange Offer is first reduced to zero. The Board additionally considered the viability of alternative options, such as repurchasing Class B common stock, which is and will remain permitted under the Certificate (regardless of whether the Class B Exchange Offer Program Certificate Amendments are adopted), but which would reduce the aggregate loss-absorption capacity of the Class B common stock. See Purpose and Effect of the Class B Exchange Offer Program Certificate Amendments. In light of the foregoing considerations, the Board and Visa management believe that the Makewhole Agreements, when combined with the conversion rate adjustment mechanism applicable to each class of Class B-Y common stock received in an Exchange Offer, together with the market value of and conversion rate adjustment mechanism applicable to any Class B-X common stock not exchanged in any Exchange Offer (which will remain available to absorb liability for the U.S. Covered Litigation), maintain a level of protection to the Class A and Class C stockholders that is economically equivalent to the protection that exists today.
Accordingly, the Board and Visa management have developed the Exchange Offer Program with an eye toward reducing such market-based risks for our Class A and Class C stockholders. The Exchange Offer Program reduces potential overhang risk in two respects. First, depending on the number of Class B common stock tendered in the Initial Exchange Offer and any Successive Exchange Offer, the Exchange Offer Program would reduce the amount of outstanding Class B common stock eligible for conversion and sale upon the Escrow Termination Date. Second, the transfer restrictions in the Makewhole Agreements would manage the conversion and transferability of the Class C common stock issued in the Initial Exchange Offer and any Successive Exchange Offer. We believe these protections will mitigate the potential overhang risk and market impact associated with the simultaneous release of all outstanding Class B common stock upon the Escrow Termination Date, as currently contemplated under our Certificate.
As announced on March 15, 2023, the U.S. Court of Appeals for the Second Circuit affirmed the 2018 settlement agreement with the damages class, as previously approved by the U.S. District Court for the Eastern District of New York in 2019. Because no settlement objector sought review of the Court of Appeals’ decision, the 2018 damages class settlement is now final. In addition, Visa has continued to make significant progress in settling the claims of plaintiffs that opted out of the damages class. Inclusive of individual settlements prior to the 2018 damages class settlement, the 2018 damages class settlement, and the settled opt-outs from 2004 to 2018, Visa has settled claims representing approximately 90% of the payments volume and interchange at issue in the MDL, and to date Visa has paid through the Responsibility Plan approximately $6.6 billion as part of those settlements. With the final approval of the damages class settlement, our remaining potential monetary liability under the U.S. Covered Litigation is primarily related to unsettled merchant claims brought by plaintiffs that opted out of the damages class. Recent settlements have ranged from approximately 3-8% of a merchant’s applicable interchange from 2004 to 2018. If there is no settlement with these merchants, the range of remaining damages exposure based upon merchant claims is approximately $25-$35 billion through calendar year 2022, prior to any trebling, undiscounted, and before any challenge to the claim is addressed by a court. In the future, this amount could exceed the as-converted value of the outstanding Class B common stock. For illustrative purposes only, if we applied the approximate 3-8% settlement range to the unresolved and outstanding interchange from 2004 through calendar year 2022, our approximation of the remaining settlement value would be between $1.4-4 billion, and the escrow balance available for settlements and judgments was $1.8 billion as of September 30, 2023.
In reaching its determinations and recommendations with respect to the Class B Exchange Offer Program Certificate Amendments, the Board also considered the following potential adverse consequences, risks and countervailing factors:
As a result of these deliberations, the Board concluded that the potential beneficial impacts of the Class B Exchange Offer Program Certificate Amendments, including the proposed Exchange Offer Program, outweigh the potential adverse consequences, risks and negative factors described above. The discussion of the information and factors that the Board considered, as noted above, in making its determination and recommendation regarding the Class B Exchange Offer Program Certificate Amendments is not intended to be exhaustive but includes the material factors considered. In view of the wide variety of factors considered and the complexity of these matters, the Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weight to these factors. In addition, individual members of the Board may have assigned different weights to different factors. The Board considered this information as a whole and overall considered the information and factors to be favorable to, and in support of, its determinations and recommendations.
Regulatory Matters; Additional Information We are not aware of any material regulatory requirements that must be complied with or regulatory approvals that must be obtained in connection with the Class B Exchange Offer Program Certificate Amendments, other than compliance with applicable federal and state securities laws and the filing of the Class B Exchange Offer Program Certificate Amendments with the Secretary of State of the State of Delaware. Visa expects to file with the SEC a Registration Statement on Form S-4 in connection with the Initial Exchange Offer if the Class B Exchange Offer Program Certificate Amendments are approved. The registration statement will contain important information about Visa, the Initial Exchange Offer, and related matters, including, without limitation, the expected U.S. federal tax treatment for holders participating in the Initial Exchange Offer. The registration statement can be viewed at sec.gov and our investor relations website at investor.visa.com as soon as reasonably practicable after it is electronically filed with the SEC. Legal Effectiveness of the Class B Exchange Offer Program Certificate Amendments Under our Certificate, this proposal requires the affirmative vote of (i) the holders of at least a majority of the voting power of the outstanding shares of Class A common stock, voting as a separate class, (ii) the holders of at least a majority of the voting power of the outstanding shares of Class B common stock, voting as a separate class, and (iii) the holders of at least a majority of the voting power of the outstanding shares of Class C common stock, voting as a separate class. In addition, the proposal requires the affirmative vote of at least a majority of the Class A, Class B and Class C common stock in the aggregate, which will be achieved if at least a majority of the voting power of the outstanding shares of each of the Class A, Class B and Class C common stock, voting together as a single class (with Class B common stock and Class C common stock voting on an as-converted to Class A common stock basis), are voted in favor of the proposal. In each case, abstentions and broker non-votes will have the same effect as votes AGAINST the proposal. If this proposal is approved by each of the classes of common stock individually, as well the classes in the aggregate, as described above, the Class B Exchange Offer Program Certificate Amendments will become effective upon the filing of a certificate of amendment setting forth the Class B Exchange Offer Program Certificate Amendments with the Secretary of State of the State of Delaware, which is currently expected to occur promptly after receiving the requisite approvals. The Board reserves the right to elect to abandon the Class B Exchange Offer Program Certificate Amendments at any time before they become effective, even if they are approved by the stockholders. If this proposal does not receive the requisite approvals, the Class B Exchange Offer Program Certificate Amendments will not be implemented, our Certificate will not be amended, and Class B stockholders will remain subject to the existing transfer restrictions set forth in our Certificate. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL AND ADOPTION OF THE CLASS B EXCHANGE OFFER PROGRAM CERTIFICATE AMENDMENTS.
Proposal 5 — Approval of One or More Adjournments of the Annual Meeting to a Later Date or Time, if Necessary or Appropriate, to Solicit Additional Proxies in Favor of Proposal 4 Visa is seeking stockholder approval of one or more adjournments of the Annual Meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in favor of Proposal 4 in the event that there are not sufficient votes at the time of the Annual Meeting to approve the Class B Exchange Offer Program Certificate Amendments. This proposal will be approved and adopted if a majority of the shares of Class A common stock entitled to vote thereon and present in person or represented by proxy at the Annual Meeting are voted in favor of such proposal, with abstentions having the same effect as votes AGAINST the proposal. Broker nonvotes, if any, will have no impact on the approval of the proposal. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF ONE OR MORE ADJOURNMENTS OF THE ANNUAL MEETING
Proposal 6 — Stockholder Proposal Requesting that the Board Adopt a Policy to Seek Shareholder Ratification of Certain Termination Pay Arrangements John Chevedden, whose address is 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, has requested that the following proposal be included in this proxy statement and has indicated that he intends to bring such proposal before the Annual Meeting. Mr. Chevedden has submitted documentation indicating that he is the beneficial owner of at least 30 shares of our Class A common stock and has advised Visa that he intends to continue to hold the requisite amount of shares through the date of the Annual Meeting. Mr. Chevedden’s proposal and its related supporting statement are followed by a recommendation from the Board of Directors. The Board of Directors disclaims any responsibility for the content of the proposal and the statement in support of the proposal, which are presented in the form received from the stockholder. Proposal 6 – Shareholder Ratification of Excessive Termination Pay
Shareholders request that the Board adopt a policy to seek shareholder approval of the top 10 senior managers’ new or renewed pay package that provides for termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus. The Board shall retain the option to seek shareholder approval at an annual meeting after material terms are agreed upon. Generous performance-based pay can sometimes be justified but shareholder ratification of “golden parachute” severance packages with a total cost exceeding 2.99 times base salary plus target short-term bonus better aligns management pay with shareholder interests. This proposal is relevant even if there are current golden parachute limits. A limit on golden parachutes is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded. Like this proposal the rules associated with a speed limit provide consequences if the limit is exceeded. With this proposal the consequences are a non-binding shareholder vote is required for unreasonably high golden parachutes. This proposal places no limit on long-term equity pay or any other type pay. This proposal thus has no impact on the ability to attract executive talent or discourage the use of long-term equity pay because it places no limit on golden parachutes. It simply requires that extra large golden parachutes be subject to a non binding shareholder vote at a shareholder meeting already scheduled for other matters. This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting golden parachutes. The topic of this proposal received between 51% and 65% support at: FedEx Spirt AeroSystems Alaska Air Fiserv Please vote yes: Shareholder Ratification of Excessive Termination Pay – Proposal 6
Statement of the Board of Directors in Opposition to Proposal 6 The Board of Directors recommends that stockholders vote AGAINST this proposal, for the following reasons:
We already have an effective policy in place that requires us to seek stockholder approval for any future arrangement with any executive officer that provides for cash severance benefits exceeding 2.99 times the sum of the base salary plus target bonus. We believe that our tailored policy is the appropriate approach in aligning our executive compensation program with stockholder value creation, rather than the overly broad policy requested by the proposal, which would be impractical to implement and limit our ability to attract and retain qualified executive talent. Our current policy provides a balanced and reasonable limit on executive severance benefits, and our annual “Say-on-Pay” vote provides another mechanism for stockholders to provide feedback regarding our executive compensation program. We believe that the overly broad policy requested by the proposal would severely diminish Visa’s competitiveness as an employer and limit our ability to attract and retain highly qualified executive talent. Implementing the proposal would require certain aspects of employment offers to be contingent on stockholder approval. Such a requirement would put us at a competitive disadvantage in the labor market because the types of termination payments and benefits implicated by the proposal may be raised by candidates when negotiating employment offers for senior leadership positions. As a result, this proposal would interfere with our ability to make timely competitive offers of employment for highly qualified executive talent, which would negatively impact our efforts to enhance stockholder value and drive long-term strategic outcomes. None of our primary competitors have a policy requiring stockholder approval of cash, equity, and all other forms of termination payments. Moreover, the vast majority of companies in our compensation peer group have not adopted any type of policy requiring stockholder approval of all forms of termination payments. As a result, our top candidates may seek employment from a direct competitor or elsewhere once they learn that key aspects of their employment offer would require stockholder approval. These same issues would arise in developing employment packages to retain key employees. The resulting recruiting disadvantages and potential loss of talent in senior leadership could harm our stockholders. The uncertainty from seeking stockholder approval in such circumstances demonstrates the impracticality and negative impacts of this proposal. Our approach to executive termination arrangements is disciplined, responsible, and reasonable, making this proposal unnecessary. Our compensation program is designed to promote retention and reward performance that enhances stockholder value and drives long-term strategic outcomes. Accordingly, a significant portion of our executives’ compensation consists of equity awards in the form of stock options, restricted stock units, and performance shares. For example, to align senior leadership and stockholder incentives, our Executive Severance Plan and equity award agreements do not provide for any gross-ups and require a qualifying termination following a change in control before any change of control payments or benefits become available. There are no “single-trigger” payments upon a change of control. Equity awards granted since November 2021 provide pro-rated value for involuntary terminations without Cause to recognize our executives’ performance and contributions during the vesting period. In addition, the benefits available under the Executive Severance Plan are in line
with the plans offered by our peers and primary competitors. Specifically, any such benefits are capped at two times base salary and target annual incentive, a pro-rated annual incentive for the year of termination, and a lump sum payment to provide continued health benefits for two years. Therefore, this proposal is unnecessary. Visa’s current compensation practices already align the incentives of senior leadership and stockholders. Our long-term equity incentive awards are a fundamental component of our compensation program and align senior leadership interests with stockholders’ interest by linking a substantial portion of compensation to the achievement of long-term corporate performance and operational efficiency. By requiring stockholder approval for executives to realize the full value of their equity awards upon a qualifying termination, the policy requested by this proposal effectively reduces the recruitment and retention value of long-term equity incentive awards in the executive compensation program. As a result, the proposal directly conflicts with one of the primary principles of our compensation program—namely, the alignment of senior leadership and stockholders’ interests. In addition, implementing the proposal would likely lead to elimination of change of control provisions, which risks potential misalignment between executives and stockholders during a potential change of control transaction with respect to executive retention and deal certainty. Furthermore, implementing this proposal would create additional risk of misalignment between Visa’s executives subject to our current policy and those subject to the policy requested by the proposal. Stockholders already have opportunities to provide feedback on executive compensation and post-termination compensation policies. Our annual Say-on-Pay vote provides opportunities for our stockholders to examine and provide their feedback on our executive compensation program. Our Board and management team greatly value the feedback of our stockholders, and we proactively engage with, and solicit feedback from, our stockholders regarding our executive compensation programs and philosophy. Our Board and management team routinely discuss our stockholders’ feedback on our executive compensation program. Furthermore, in calendar year 2023 we contacted our top 75 stockholders representing approximately 65% of the outstanding Class A common stock to discuss, among other things, executive compensation matters and held, or are scheduled to hold, videoconference meetings with 43 stockholders representing approximately 25% of our outstanding Class A common stock. A summary of all feedback is provided to our executive leadership and Board for discussion. This ongoing engagement with stockholders on our compensation program make the overly burdensome stockholder approval requirements set forth in the proposal unnecessary. Stockholders have overwhelmingly endorsed Visa’s executive compensation practices. We describe the details of our executive termination arrangements in the Compensation Discussion & Analysis and Potential Payments upon Termination or Change of Control sections of our proxy statement, and over the last five annual meetings of stockholders we have received an average of approximately 92% support for our advisory vote to approve executive compensation. These vote results demonstrate continued investor support for our executive compensation program design, including our termination arrangements. Similarly, in 2021 we received over 95% support for the amended and restated Visa Inc. 2007 Equity Incentive Compensation Plan, which authorizes equity awards to be accelerated upon various types of termination. As a result, the Board believes that the policy requested by this stockholder proposal is not necessary and not in the best interest of our stockholders. FOR THE REASONS STATED ABOVE, THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THIS STOCKHOLDER PROPOSAL.
Voting and Meeting Information Information About Solicitation and Voting This proxy is solicited on behalf of the Board for use at the Annual Meeting to be held online via a live webcast at Visa’s Class A common stockholders of record at the close of business on Visa’s Class A, Class B, and Class C stockholders of record at the close of business on November 24, 2023 will each be entitled to vote on Proposal 4 at the On Stockholder of Record: Shares Registered in Your Name All Class B and Class C holders are stockholders of record. If on For questions regarding your stock ownership, you may contact our transfer agent, Beneficial Owner: Shares Registered in the Name of a Broker or Nominee If on
If you are a stockholder of record, including Class B and Class C stockholders, there are several ways for you to vote your
If you are a beneficial owner of shares of Class A common stock, you should receive a Notice of Internet Availability of Proxy Materials or voting instructions from the broker or other nominee holding your shares. You should follow the instructions in the Notice or the voting instructions provided by your broker or nominee in order to instruct your broker or nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker or nominee. Shares held beneficially may be voted If the Annual Meeting is adjourned or postponed, your proxy will still be effective and will be voted at the rescheduled or adjourned Annual Meeting. You will still be able to change or revoke your proxy until the rescheduled or adjourned Annual Meeting. Change or Revoke a Proxy or Vote If you are a stockholder of record, you may change your vote or revoke your
If you are a beneficial owner of Class A common stock, you must follow the instructions provided by the broker or other nominee holding your shares If you are a Class A stockholder of record and you submit a signed proxy card, but you do not provide voting instructions on the card, your shares will be voted:
If you are a beneficial owner of Class A common stock and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or nominee will determine if it has the discretionary authority to vote on your behalf. If you are a Class B or Class C stockholder and you submit a signed proxy card, but you do not provide voting instructions on the Proposal 4 and Proposal 5 are expected to be “non-routine” proposals. If either Proposal 4 or Proposal 5 is determined to be “non-routine” by the NYSE or Broadridge Financial Solutions, as described below, any broker non-votes with respect to the applicable proposal will have the The determination of whether a proposal is “routine” or “non-routine” will be made by the NYSE or by Broadridge Financial Solutions, our independent agent to receive and tabulate stockholder votes, based on NYSE rules that regulate member brokerage firms. If a proposal is deemed “routine” and you do not give instructions to your broker or nominee, they may, but are not required to, vote Therefore, if you do not provide voting instructions to your broker or nominee, your broker or nominee may only vote your shares on Brokers or other nominees who hold shares of our Class A common stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A brokernon-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. A quorum is required with respect to
The vote required to approve each proposal is set forth below.
We will bear the expense of soliciting proxies. We have retained D.F. King & Co. to solicit proxies for a fee of We have also retained Innisfree to assist in soliciting proxies and in communicating with Visa stockholders in connection with the Class B Exchange Offer Program Certificate Amendments, and estimate that we will pay Innisfree a fee of approximately $150,000, plus reimbursement for certain out-of-pocket fees and expenses. We have also agreed to indemnify Innisfree against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).
Voting Results Broadridge Financial Solutions, Inc. has been engaged as our independent agent to receive and tabulate stockholder votes. Broadridge will separately tabulate FOR, AGAINST, and ABSTAIN votes and brokernon-votes. We also have retained an independent inspector of election, who will certify the election results and perform any other acts required by the General Corporation Law of the State of Delaware. Preliminary results will be announced at the Annual Meeting. Final results will be published in a current report on Form8-K to be filed with the SEC within four business days of the Annual Meeting. Viewing the List of Stockholders Stockholders at the close of business on the Record Date may examine a list of all stockholders as of the Record Date for any purpose germane to the Annual Meeting for ten days preceding the Annual Meeting, at our offices in Foster City,
Attending the Meeting This year’s Annual Meeting will be
Submitting Questions for Our Virtual Annual Meeting
Only stockholders with a
Stockholder Nomination of Director Candidates and Other Stockholder Proposals for The submission deadline for stockholder proposals to be included in our proxy materials for the Under our Bylaws, director nominations and other business may be brought before an annual meeting of stockholders only by or at the direction of the Board or by a stockholder entitled to vote who has submitted a proposal in accordance with the requirements of our Bylaws. To In addition, the Company’s Bylaws permit up to 20 stockholders owning 3% or more of our Class A common stock for a period of at least The nomination Stockholders Sharing the Same Address The SEC has adopted rules that allow a company to deliver a single proxy statement or annual report to an address shared by two or more of its stockholders. This method of delivery, known as “householding,” permits us to realize significant cost savings, reduces the amount of duplicate information stockholders receive, and reduces the environmental impact of printing and mailing documents to our stockholders. Under this process, certain stockholders will receive only one copy of our proxy materials and any additional proxy materials that are delivered until such time as one or more of these stockholders notifies us that they want to receive separate copies. Any stockholders who object to or wish to begin householding may contact our Investor Relations Department at(650) 432-7644, InvestorRelations@visa.com, or Investor Relations, Visa Inc., P.O. Box 8999, San Francisco, CA 94128-8999. We will send an individual copy of the proxy statement to any stockholder who revokes their consent to householding within 30 days of our receipt of such revocation.
Fiscal Year Our financial statements for the fiscal year ended September 30,
ANNEX A Class B Exchange Offer Program Certificate Amendments Set forth below is the text of the provisions of our Seventh Restated Certificate of Incorpporation proposed to be amended by Proposal 4. Additions are indicated by underlining and bolded text and deletions are indicated by strike-through. Section 4.1 Authorized Capital Stock. (a) The total number of shares of all classes of stock that the Corporation is authorized to issue is 2,003,366,656,0202,003,474,068,128 shares, consisting of: (i) 25,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”), (ii) 2,001,622,245,209 shares of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), (iii) 622,245,209499,488,516 shares of Class B-1 Common Stock, par value $0.0001 per share (“Class B-1 Common Stock”), (iv) 122,756,693 shares of Class B-2 Common Stock, par value $0.0001 per share (“Class B-2 Common Stock”), (v) 61,378,347 shares of Class B-3 Common Stock, par value $0.0001 per share (“Class B-3 Common Stock”), (vi) 30,689,174 shares of Class B-4 Common Stock, par value $0.0001 per share (“Class B-4 Common Stock”), (vii) 15,344,587 shares of Class B-5 Common Stock, par value $0.0001 per share (“Class B-5 Common Stock”) and (ivviii) 1,097,165,602 shares of Class C Common Stock, par value $0.0001 per share (“Class C Common Stock,” and collectively with Class A Common Stock, Class B-1 Common Stock, Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock and Class B-5 Common Stock, “Common Stock”). There being shares of only a single series of Class C Common Stock (Class C (Series I) Common Stock) issued and outstanding as of immediately prior to the adoption of this Amended and Restated Certificate of Incorporation, such shares are hereafter designated Class C Common Stock with no series designation. (b) All shares of Class B Common Stock of the Corporation issued and outstanding as of the effectiveness of the Certificate of Amendment shall be redenominated as Class B-1 Common Stock and shall hereinafter be Class B-1 Common Stock, after which all references to “Class B Common Stock” in this Certificate of Incorporation (including any Preferred Stock Designation (as defined below)) shall be deemed to refer to and for purposes of this Restated Certificate of Incorporation shall be deemed to constitute and include all Class B-1 Common Stock, Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock and Class B-5 Common Stock. Where in this Certificate of Incorporation there appear the terms “Class B-X Common Stock” and “Class B-Y Common Stock,” these terms together refer to any given pair of consecutively numbered classes of Class B Common Stock (with the Class B-X Common Stock referring to the class of Class B Common Stock with the lower number of the pair and the Class B-Y Common Stock referring to the class of the Class B Common Stock with the higher number of the pair), as the context requires, consisting of Class B-1 Common Stock and Class B-2 Common Stock, respectively; Class B-2 Common Stock and Class B-3 Common Stock, respectively; Class B-3 Common Stock and Class B-4 Common Stock, respectively; and Class B-4 Common Stock and Class B-5 Common Stock, respectively. Section 4.7 Voting Rights. Subject to other provisions of this Certificate of Incorporation: (a) each holder of Class A Common Stock shall be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; and (b) except as otherwise expressly provided herein or as required by applicable law, each holder of Class B Common Stock and each holder of Class C Common Stock shall have no voting power in respect of and shall not be entitled to any votes with respect to the shares of Class B Common Stock or Class C Common Stock (as applicable) held of record by such holder on any matters on which stockholders generally are entitled to vote; provided, however, that, in addition to any other vote required by law, for so long as any shares of Class B Common Stock or Class C Common Stock remain issued and outstanding: (i) the affirmative vote of the holders of a majority of the voting power of the Class B Common Stock and Class C Common Stock, voting together as a single class (in which vote the Class A Common Stock shall not participate) separate from all other classes or series of capital stock of the Corporation, on an “as converted basis” as described in Section 4.8 hereof, shall be required for the approval of any consolidation, merger, combination or other transaction in which shares of Class A Common Stock are exchanged for, converted into or changed into other stock or securities, or the right to receive cash or other property, unless the shares of Class B Common Stock and Class C Common Stock shall be exchanged for or changed into the same per share amount of stock, securities, cash or any other property, as the case may be, for which or in
which each share of Class A Common Stock is exchanged, converted or changed; and (ii) the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the Common Stock of all classes and series, voting together as a single class separate from all other classes or series of capital stock of the Corporation, shall be required to authorize the Corporation to exit its core payments business (i.e., to no longer operate a consumer debit/credit payments business). (c) With respect to each matter upon which holders of any class of Class B Common Stock are entitled to vote pursuant to this Certificate of Incorporation, holders of each such class of Class B Common Stock shall vote together as a single class as provided herein; provided, however, that the holders of Class B-1 Common Stock, Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock and Class B-5 Common Stock shall each vote as a separate class in connection with any amendment to this Section 4.7(c), Section 4.14(d), Section 4.26(a), the definition of “Applicable Conversion Rate” (including terms used therein) or as otherwise required by applicable law. Section 4.14 Adjustments to the Applicable Conversion Rate, Class B Number, Loss Funds Cost Per Share and Price Per Share. (a) If the Corporation (i) subdivides, reclassifies or splits the outstanding shares of Class A Common Stock into a greater number of shares without also subdividing, reclassifying or splitting the outstanding shares of the Class B Common Stock and/or the Class C Common Stock on an equivalent per share basis; (ii) combines or reclassifies the outstanding shares of Class A Common Stock into a smaller number of shares without also combining or reclassifying the outstanding shares of Class B Common Stock and/or Class C Common Stock on an equivalent per share basis; (iii) issues by reclassification of any class of its Common Stock any shares of Class A Common Stock without also issuing shares of Class B Common Stock and/or Class C Common Stock on an equivalent per share basis, or (iv) dividends or distributes shares of Class A Common Stock on the Class A Common Stock without also paying a corresponding equivalent dividend or distribution on each other class or series of Common Stock, then the Applicable Conversion Rate in effect immediately prior to such action for each share of Class B Common Stock (not subdivided, reclassified, split, combined or issued in accordance with clauses (i),(ii) or (iii) above or which does not receive a corresponding equivalent dividend or distribution in accordance with clause (iv) above) or Class C Common Stock (not subdivided, reclassified, split, combined or issued in accordance with clauses (i), (ii) or (iii) above or which does not receive a corresponding equivalent dividend or distribution in accordance with clause (iv) above) then outstanding shall be adjusted by multiplying the Applicable Conversion Rate in effect immediately prior to such action by a fraction (A) the numerator of which shall be the number of shares of Class A Common Stock outstanding immediately after such action (giving pro forma effect to the exercise of all then outstanding convertible securities, other than shares of Class B Common Stock or Class C Common Stock) and (B) the denominator of which shall be the number of shares of all Class A Common Stock outstanding immediately prior to such action on the record date applicable to such action, if any (giving pro forma effect to the exercise of all then outstanding convertible securities, other than shares of Class B Common Stock or Class C Common Stock) (such fraction, the “Adjustment Factor”); provided, that for purposes of calculating the Applicable Conversion Rate with respect to each share of Class B Common Stock (not subdivided, reclassified, split, combined or issued in accordance with clauses (i), (ii) and (iii) above or which does not receive a corresponding equivalent dividend or distribution in accordance with clause (iv) above), prior to multiplying the Applicable Conversion Rate by the Adjustment Factor (x) the Class B Number in effect immediately prior to such subdivision, reclassification, split, combination, dividend or distribution shall be adjusted by multiplying the Class B Number by the Adjustment Factor, (y) the Loss Funds Cost Per Share with respect to all Loss Funds that have been deposited into the Escrow Account prior to such subdivision, reclassification, split, combination, dividend or distribution shall be adjusted by dividing the Loss Funds Cost Per Share by the Adjustment Factor, and (z) the Price Per Share immediately prior to such subdivision, reclassification, split, combination, dividend or distribution shall be adjusted by dividing the Price Per Share by the Adjustment Factor. Such adjustments shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, split, combination or reclassification. In the event that such dividend or distribution is not so paid or made or such subdivision, split, combination or reclassification is not effected, the Applicable Conversion Rate, the Class B Number, the Loss Funds Cost Per Share and the Price Per Share, as applicable, shall again be adjusted to be the Applicable Conversion Rate, the Class B Number, the Loss Funds Cost Per Share and the Price Per Share, as applicable, which would then be in effect if such record date or effective date had not been so fixed. (b) Whenever the Applicable Conversion Rate, the Class B Number, the Loss Funds Cost Per Share or the Price Per Share are adjusted as described in clause (a) of this Section 4.14, or in connection with the sale of any Loss Shares or the deposit of Loss Funds into the Escrow Account, the Corporation shall (i) promptly make a public announcement to notify holders of record of the Class B Common Stock or Class C Common Stock (as the case may be) of such adjustment(s) or of
the then Applicable Conversion Rate after giving effect to the sale of such Loss Shares or the deposit of such Loss Funds, and (ii) take reasonable efforts to provide notice by mail to such holders at the addresses appearing on the Corporation’s stock register of such adjustment or of the then Applicable Conversion Rate after giving effect to the sale of such Loss Shares or the deposit of such Loss Funds. The Corporation shall keep with its records such notice and a certificate from the Corporation’s Chief Financial Officer briefly stating the facts requiring the adjustment(s), and setting forth in reasonable detail the calculation by which the adjustment(s) have been made. The Corporation shall either include such calculation(s) in the notification provided pursuant to clause (i) or (ii) above, or if it does not so include them, the Corporation shall promptly furnish them without charge upon written request of a holder of record of Class B Common Stock or Class C Common Stock. The certificate shall be conclusive evidence that the adjustment(s) are correct, absent manifest error. (c) After an adjustment to the Applicable Conversion Rate, the Class B Number, the Loss Funds Cost Per Share or the Price Per Share, as applicable, for outstanding shares of Class B Common Stock or Class C Common Stock pursuant to this Section 4.14, any subsequent event requiring an adjustment pursuant this Section 4.14 shall cause an adjustment to the Applicable Conversion Rate, the Class B Number, the Loss Funds Cost Per Share or the Price Per Share, as applicable, for outstanding shares of Class B Common Stock and Class C Common Stock as so adjusted. (d) The Corporation shall not take any action described in paragraph (a) of this Section 4.14 with respect to any class of Class B-X Common Stock without taking equivalent action with respect to the corresponding class of Class B-Y Common Stock, or vice versa, that ensures, among other things, that following the initial corresponding Class B-X Exchange Offer Acceptance Date (as defined in Section 4.23(c)), downward adjustments to the Applicable Conversion Rate for such Class B-Y Common Stock occur at double the rate of those applicable to such Class B-X Common Stock. Section 4.23. No Preemptive Rights; Limitation on Issuances of Capital Stock; Class B-X Exchange Offers. (a) The holders of Class A Common Stock, Class B Common Stock, Class C Common Stock or any series of Preferred Stock shall have no preemptive rights, as such, to subscribe for any shares of any class or series of capital stock of the Corporation whether now or hereafter authorized, except as expressly set forth in this Certificate of Incorporation, any Preferred Stock Designation, any resolution or resolutions providing for the issuance of a series of stock adopted by the Board, or any agreement between the Corporation and its stockholders. (b) Until the Escrow Termination Date, except as expressly contemplated by the Global Restructuring Agreement, neither the Corporation nor any of its Subsidiaries shall issue any shares of the Corporation’s capital stock to any Person without the prior written consent of a majority of the members of the Litigation Committee (acting pursuant to their contractual rights and obligations pursuant to the Litigation Management Agreement), other than any issuance of: (i) shares of Common Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) on or prior to the date hereof; (ii) shares of Common Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) after the date hereof pursuant to the terms of the Global Restructuring Agreement or any other Transaction Document, including any Loss Shares and any securities issued upon the conversion or exchange of any shares of Common Stock issued pursuant to the terms of this Agreement that are convertible into or exchangeable for shares of Common Stock (including, for the avoidance of doubt, any shares of Class A Common Stock issuable upon the conversion of any shares of Class B Common Stock or Class C Common Stock); (iii) shares of Common Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) issued pursuant to any option plan or other employee incentive plan approved by the Board, including issued upon the direct or indirect conversion of any options or convertible securities; (iv) shares of Common Stock issued to the Stockholders’ Representative in full or partial payment of the Option Exercise Price following an exercise of the Put Option or the Call Option (as such capitalized terms are defined in the Visa Europe Put-Call Option Agreement); (v) shares of Class A Common Stock in connection with any public offering of Class A Common Stock that the Board shall have determined in good faith is desirable in order to reduce the percentage ownership of Common Stock represented by the holders of Class B Common Stock and Class C Common Stock, in the aggregate, to less than fifty percent (50%), including, without limitation, the IPO; (vi) shares of Class A Common Stock (whether or not such shares constitute Loss Shares hereunder) sold in a public offering the proceeds of which are to be used, as determined in good faith by the Board, to fund operating losses or other extraordinary losses or liabilities, including, without limitation, losses in connection with any litigation or settlement thereof, or in other exigent circumstances as determined by the Board in good faith; (vii) shares of Common Stock or Preferred Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) issued as consideration in any merger or recapitalization of the Corporation or issued as consideration for the acquisition of another
Person or any assets of another Person; (viii) shares of Common Stock or Preferred Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) issued to any Person (in an aggregate number of shares, with respect to each such Person, not to exceed (immediately after giving effect to such issuance) ten percent (10%) of the issued and outstanding capital stock of the Corporation of all classes and series, in each case if such issuance is to a Person as to which the Board has determined that a relationship with such Person would result in a material strategic benefit to the Corporation; (ix) shares of Common Stock or Preferred Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation), in an aggregate number of shares, not to exceed (immediately after giving effect to such issuance) three percent (3%) of the issued and outstanding capital stock of the Corporation of all classes and series, issued as part of any financing transaction approved by the Board, so long as such securities are not a material component of such financing transaction; and (x) shares of Common Stock (or other applicable equity interests in the case of any Subsidiary of the Corporation) issued in connection with any subdivision, reclassification, split or combination of the securities of the Corporation to all holders of such securities on a pro rata basis or shares of Class A Common Stock issued in connection with any subdivision, reclassification, split, combination, dividend or distribution to all holders of Class A Common Stock on a per share basis consistent with the provisions of Section 4.9(a), so long as each of the Applicable Conversion Rate, the Class B Number, Loss Funds Cost Per Share and Price Per Share for each share of Class B Common Stock and the Applicable Conversion Rate for each share of Class C Common Stock shall be adjusted as provided in Section 4.14(a). (c) This paragraph (c) authorizes the Corporation, on the terms and conditions set forth herein, to conduct one or a series of exchange offers (each, a “Class B-X Exchange Offer”) directed to holders of Class B Common Stock in which the holders of a particular numbered class of Class B Common Stock (other than Class B-5 Common Stock) would be offered the opportunity to exchange all or a portion of their shares of that numbered class for a combination of shares of the next highest numbered class of Class B Common Stock, Class C Common Stock and cash in lieu of fractional shares. (i) Notwithstanding any other provision of this Certificate of Incorporation, including, without limitation, paragraph (b) of this Section 4.23, the Corporation shall have authority, subject to applicable law and to satisfaction of the applicable condition set forth in clause (ii) below, (A) to conduct one or more Class B-X Exchange Offers for the class of Class B-X Common Stock designated by the Corporation, in each case giving each holder of the applicable class of Class B-X Common Stock as of a record date established by the Board (with respect to each applicable Class B-X Exchange Offer, the “Class B-X Exchange Offer Record Date”) the option to exchange up to all of such holder’s shares of Class B-X Common Stock for, on a per-share basis, (x) one half of a newly issued share of Class B-Y Common Stock and (y) newly issued shares of Class C Common Stock in an amount equivalent to one half of a share of Class B-X Common Stock, with such equivalence based on the respective numbers of shares of Class A Common Stock into which a share of Class B-X Common Stock and a share of Class C Common Stock would be converted assuming conversion on the date (with respect to each applicable Class B-X Exchange Offer, the “Class B-X Exchange Offer Acceptance Date”) that shares of Class B-X Common Stock tendered pursuant to such Class B-X Exchange Offer are accepted for exchange by the Corporation and (B) to issue such shares of Class B-Y Common Stock and Class C Common Stock; provided that the Corporation shall adjust the number of shares of Class B-Y Common Stock and Class C Common Stock deliverable to any exchanging holder downward in order to avoid the issuance of fractional shares, and shall deliver cash in lieu of fractional shares, with any such fraction calculated to four decimal places and otherwise calculated in the manner set forth in Section 4.12. As a condition to participation in the applicable Class B-X Exchange Offer, and in addition to any other conditions the Corporation may in its discretion impose, each holder of Class B-X Common Stock shall be required to execute and deliver to the Corporation a Makewhole Agreement substantially in the form included within the Corporation’s definitive proxy statement filed with the Securities and Exchange Commission on December 7, 2023, with such changes to such form of agreement as the Corporation may approve in its discretion. (ii) (A) A Class B-X Exchange Offer directed to holders of Class B-1 Common Stock in which the holders thereof are given the option to exchange shares of Class B-1 Common Stock for Class B-2 Common Stock, Class C Common Stock and cash in lieu of fractional shares may, but shall not be required to, take place at any time after December 7, 2023. (B) A Class B-X Exchange Offer directed to holders of Class B-2 Common Stock in which the holders thereof are given the option to exchange shares of Class B-2 Common Stock for Class B-3 Common Stock,
Class C Common Stock and cash in lieu of fractional shares may, but shall not be required to, take place at any time after the date, if any, on which the Corporation determines in its sole discretion that as of such date the Estimated Remaining Unsettled Interchange Liabilities (as defined below) are equal to or less thanone-half of the Estimated RemainingUnsettled Interchange Liabilities as of October 1, 2023; provided that the initial Class B-XExchange Offer under this clause (B) may not be launched until at least one year has elapsed since launch of the initial Class B-X Exchange Offer described in clause (A). (C) A Class B-X Exchange Offer directed to holders of Class B-3 Common Stock in which the holders thereof are given the option to exchange shares of Class B-3 Common Stock for Class B-4 Common Stock, Class C Common Stock and cash in lieu of fractional shares may, but shall not be required to, take place at any time after the date, if any, on which the Corporation determines in its sole discretion that as of such date the Estimated Remaining Unsettled Interchange Liabilities are equal to or less than one-half of the Estimated Remaining Unsettled Interchange Liabilities immediately following the Class B-X Exchange Offer Acceptance Date for the initial Class B-X Exchange Offer described in clause (B); provided that the initial Class B-X Exchange Offer under this clause (C) may not be launched until at least one year has elapsed since launch of the initial Class B-X Exchange Offer described in clause (B). (D) A Class B-X Exchange Offer directed to holders of Class B-4 Common Stock in which the holders thereof are given the option to exchange shares of Class B-4 Common Stock for Class B-5 Common Stock, Class C Common Stock and cash in lieu of fractional shares may, but shall not be required to, take place at any time after the date, if any, on which the Corporation determines in its sole discretion that as of such date the Estimated Remaining Unsettled Interchange Liabilities are equal to or less than one-half of the Estimated Remaining Unsettled Interchange Liabilities immediately following the Class B-X Exchange Offer Acceptance Date for the initial Class B-X Exchange Offer described in clause (C); provided that the initial Class B-X Exchange Offer under this clause (D) may not be launched until at least one year has elapsed since launch of the initial Class B-X Exchange Offer described in clause (C). “Estimated Remaining Unsettled Interchange Liabilities,” as of any determination date, means the Corporation’s estimate, in its sole discretion, of interchange reimbursement fees at issue in respect of any unresolved claims seeking damages in any of the Covered Litigation, without giving effect to any discount on the basis of the Corporation’s estimate of the potential settlement value of the Covered Litigation. Section 4.26. Sale of Loss Shares. (a) Sale at Election of the Corporation. Except as the Corporation may otherwise agree pursuant to contract, the Corporation shall be entitled to sell Loss Shares at any time and for any reason, and on such terms as the Board may determine in its sole discretion; provided that the proceeds of any such sale, net of any underwriting discounts and commissions, shall be deposited in the Escrow Account in accordance with the provisions of the Escrow Agreement. Notwithstanding the foregoing, the Corporation shall not sell Loss Shares or designate Loss Funds, in each case, in an amount which, taken cumulatively with all other Loss Shares issued and Loss Funds designated, will reduce the Applicable Conversion Rate for the Class B-1 Common Stock to a number that is less than zero (0).(assuming at least one such share outstanding), but the Corporation may, until such time as the Applicable Conversion Rate for the Class B-1 Common Stock equals zero (0), sell Loss Shares or designate Loss Funds that will reduce the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common Stock to a number that is equal to or less than zero (0). If a sale of Loss Shares or a designation of Loss Funds, taken cumulatively with all other Loss Shares issued and Loss Funds designated, would result in the Applicable Conversion Rate for the Class B-1 Common Stock being greater than zero (0) and the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common being equal to or less than zero (0) (where the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common, as applicable, was not previously equal to or less than zero (0)), then such sale or designation, as the case may be, shall be deemed to have taken place in two separate transactions, the first of which resulted in the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common Stock, as applicable, becoming equal to zero (0) and the second of which resulted in the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common Stock, as applicable, becoming less than
zero (0). If any event would result in the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common being equal to or greater than zero (0) (where the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common, as applicable, was previously less than zero (0)), then such event shall be deemed to have takenplace in separate transactions, the sequence of which results in the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common Stock, as applicable and in such order, becoming equal to zero (0) before any remaining transaction that results in the Applicable Conversion Rate for the Class B-2 Common Stock, Class B-3 Common Stock, Class B-4 Common Stock or Class B-5 Common Stock, as applicable, becoming greater than zero (0). Section 11.2. Defined Terms. “Applicable Conversion Rate” shall mean: (i) with respect to each share of Class C Common Stock, 1.00 share of Class A Common Stock, as adjusted from time to time after March 25, 2008 as provided herein; and (ii) with respect to each share of Class B-1 Common Stock, (x) during the period from March 25, 2008 to the Escrow Termination Date, a number of shares of Class A Common Stock equal to 1.00 x (A – B – D), and (y) during the period after the Escrow Termination Date and March 25, 2008, a number of shares of Class A Common Stock equal to 1.00 x (A – B – D + C), in each case, as applicable, where: (A) = 0.7142888829; (B) = a fraction, the numerator of which is the number of any Loss Shares issued from time to time and the denominator of which is the Class B Number; (C) = a fraction, the numerator of which shall beis the quotient obtained by dividing (I) the aggregate portion of any funds disbursed to the Corporation from the Escrow Account pursuant to Section 4.9 of the Global Restructuring Agreement or to the Escrow Agreement other than any Disregarded Escrow Distribution amount by (II) the Price Per Share and the denominator of which shall beis the Class B Number; and (D) = a fraction, the numerator of which is (x) the Loss Funds Share Equivalent for all Loss Funds deposited into the Escrow Account from time to time, and the denominator of which is the Class B Number.; (iii) with respect to each share of Class B-2 Common Stock, (x) during the period from the first Class B-X Exchange Offer Acceptance Date with respect to a Class B-X Exchange Offer described in Section 4.23(c)(ii)(A) to but excluding the first date thereafter (if any) prior to the Escrow Termination Date on which an adjustment pursuant to clause (ii)(x) of this definition takes place (the “Class B-2 Divergence Date”), or, if the Class B-2 Divergence Date shall not have occurred, the period from such Class B-X Exchange Offer Acceptance Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-1 Common Stock is then convertible (assuming at least one such share outstanding), (y) during the period (if any) from the Class B-2 Divergence Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-1 Common Stock is then convertible (assuming at least one such share outstanding), but adjusted downward so that each adjustment pursuant to clause (ii)(x) of this definition that takes place on or after the Class B-2 Divergence Date has double the impact on each share of Class B-2 Common Stock compared to the impact on each share of Class B-1 Common Stock (for the avoidance of doubt, measured by the decrease in the number of shares of Class A Common Stock into which each such share of Class B-1 or Class B-2 Common Stock is convertible), and (z) during the period after the Escrow Termination Date, (A) if the Class B-2 Divergence Date shall have occurred, a number of shares of Class A Common Stock equal to that specified in clause (iii)(y) of this definition, but adjusted upward so that the adjustment pursuant to clause (ii)(y)(C) of this definition resulting from the application of any amount (the “Overfunded Amount”) referred to in clause (ii)(y)(C)(I) of this definition has double the positive impact on each share of Class B-2 Common Stock compared to the positive impact such adjustment has on each share of Class B-1 Common Stock; and
(B) if the Class B-2 Divergence Date shall not have occurred, a number of shares of Class A Common Stock equal to the number into which one share of Class B-1 Common Stock is then convertible (assuming at least one such share outstanding); (iv) with respect to each share of Class B-3 Common Stock, (x) during the period from the first Class B-X Exchange Offer Acceptance Date with respect to a Class B-X Exchange Offer described in Section 4.23(c)(ii)(B) to but excluding the first date thereafter (if any) prior to the Escrow Termination Date on which an adjustment pursuant to clause (ii)(x) of this definition takes place (the “Class B-3 Divergence Date”), or, if the Class B-3 Divergence Date shall not have occurred, the period from such Class B-X Exchange Offer Acceptance Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-2 Common Stock is then convertible (assuming at least one such share outstanding), (y) during the period (if any) from the Class B-3 Divergence Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-2 Common Stock is then convertible (assuming at least one such share outstanding), but adjusted downward so that each adjustment pursuant to clause (ii)(x) of this definition that takes place on or after the Class B-3 Divergence Date has double the impact on each share of Class B-3 Common Stock compared to the impact on each share of Class B-2 Common Stock (for the avoidance of doubt, measured by the decrease in the number of shares of Class A Common Stock into which each such share of Class B-2 or Class B-3 Common Stock is convertible), and (z) during the period after the Escrow Termination Date, (A) if the Class B-3 Divergence Date shall have occurred, a number of shares of Class A Common Stock equal to that specified in clause (iv)(y) of this definition, but adjusted upward so that the adjustment pursuant to clause (ii)(y)(C) of this definition resulting from the application of any Overfunded Amount referred to in clause (ii)(y)(C)(I) of this definition has double the positive impact on each share of Class B-3 Common Stock compared to the positive impact such adjustment has on each share of Class B-2 Common Stock; and (B) if the Class B-3 Divergence Date shall not have occurred, a number of shares of Class A Common Stock equal to the number into which one share of Class B-2 Common Stock is then convertible (assuming at least one such share outstanding); (v) with respect to each share of Class B-4 Common Stock, (x) during the period from the first Class B-X Exchange Offer Acceptance Date with respect to a Class B-X Exchange Offer described in Section 4.23(c)(ii)(C) to but excluding the first date thereafter (if any) prior to the Escrow Termination Date on which an adjustment pursuant to clause (ii)(x) of this definition takes place (the “Class B-4 Divergence Date”), or, if the Class B-4 Divergence Date shall not have occurred, the period from such Class B-X Exchange Offer Acceptance Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-3 Common Stock is then convertible (assuming at least one such share outstanding), (y) during the period (if any) from the Class B-4 Divergence Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-3 Common Stock is then convertible (assuming at least one such share outstanding), but adjusted downward so that each adjustment pursuant to clause (ii)(x) of this definition that takes place on or after the Class B-4 Divergence Date has double the impact on each share of Class B-4 Common Stock compared to the impact on each share of Class B-3 Common Stock (for the avoidance of doubt, measured by the decrease in the number of shares of Class A Common Stock into which each such share of Class B-3 or Class B-4 Common Stock is convertible), and (z) during the period after the Escrow Termination Date, (A) if the Class B-4 Divergence Date shall have occurred, a number of shares of Class A Common Stock equal to that specified in clause (v)(y) of this definition, but adjusted upward so that the adjustment pursuant to clause (ii)(y)(C) of this definition resulting from the application of any Overfunded Amount referred to in clause (ii)(y)(C)(I) of this definition has double the positive impact on each share of Class B-4 Common Stock compared to the positive impact such adjustment has on each share of Class B-3 Common Stock; and (B) if the Class B-4 Divergence Date shall not have occurred, a number of shares of Class A Common Stock equal to the number into which one share of Class B-3 Common Stock is then convertible (assuming at least one such share outstanding); and (vi) with respect to each share of Class B-5 Common Stock, (x) during the period from the first Class B-X Exchange Offer Acceptance Date with respect to a Class B-X Exchange Offer described in Section 4.23(c)(ii)(D) to but
excluding the first date thereafter (if any) prior to the Escrow Termination Date on which an adjustment pursuant to clause (ii)(x) of this definition takes place (the “Class B-5 Divergence Date”), or, if the Class B-5 Divergence Date shall not have occurred, the period from such Class B-X Exchange Offer Acceptance Date to the Escrow Termination Date,a number of shares of Class A Common Stock equal to the number into which one share of Class B-4 Common Stock is then convertible (assuming at least one such share outstanding), (y) during the period (if any) from the Class B-5 Divergence Date to the Escrow Termination Date, a number of shares of Class A Common Stock equal to the number into which one share of Class B-4 Common Stock is then convertible (assuming at least one such share outstanding), but adjusted downward so that each adjustment pursuant to clause (ii)(x) of this definition that takes place on or after the Class B-5 Divergence Date has double the impact on each share of Class B-5 Common Stock compared to the impact on each share of Class B-4 Common Stock (for the avoidance of doubt, measured by the decrease in the number of shares of Class A Common Stock into which each such share of Class B-4 or Class B-5 Common Stock is convertible), and (z) during the period after the Escrow Termination Date, (A) if the Class B-5 Divergence Date shall have occurred, a number of shares of Class A Common Stock equal to that specified in clause (vi)(y) of this definition, but adjusted upward so that the adjustment pursuant to clause (ii)(y)(C) of this definition resulting from the application of any Overfunded Amount referred to in clause (ii)(y)(C)(I) of this definition has double the positive impact on each share of Class B-5 Common Stock compared to the positive impact such adjustment has on each share of Class B-4 Common Stock; and (B) if the Class B-5 Divergence Date shall not have occurred, a number of shares of Class A Common Stock equal to the number into which one share of Class B-4 Common Stock is then convertible (assuming at least one such share outstanding).
ANNEX B FORM OF MAKEWHOLE AGREEMENT This MAKEWHOLE AGREEMENT (this “Agreement”) is entered into by and between VISA INC., a Delaware corporation (the “Corporation”), THE HOLDER OF VISA COMMON STOCK IDENTIFIED ON THE SIGNATURE PAGE HEREOF (the “Holder”) and each PARENT GUARANTOR IDENTIFIED ON THE SIGNATURE PAGE HEREOF (each, a “Parent Guarantor,” and together with the Corporation and the Holder, each a “Party,” and collectively the “Parties”) as of the date set forth on the Corporation’s signature page hereof (the “Effective Date”). The terms “Class B-X Common Stock” and “Class B-Y Common Stock” are defined in Section 13 hereof. Capitalized terms not defined herein are defined in or by reference to the Corporation’s Eighth Restated Certificate of Incorporation (the “Certificate of Incorporation”) as in effect on the date hereof. WITNESSETH: WHEREAS, the Holder has elected to participate in the type of Class B-X Exchange Offer indicated on the Corporation’s signature page hereof, a condition of which is that it agree on the terms hereinafter set forth (such Class B-X Exchange Offer giving rise to the Holder’s obligation to enter into this Agreement hereinafter being referred to as the “Class B-X Exchange Offer”): (i) to pay each applicable Makewhole Amount (as defined below) to the Corporation; (ii) that to the extent it or any (iii) to stage any sale of Class C Common Stock as set forth herein; WHEREAS, the Class C Common Stock received by the Holder in the Class B-X Exchange Offer is not encumbered by the same conversion ratio adjustments associated with the Class B-X Common Stock held by the Holder prior to the Class B-X Exchange Offer, and in consideration for such additional value the Holder agrees hereunder to contribute additional amounts to the Corporation as set forth herein; and WHEREAS, the Parties intend that for U.S. federal income tax purposes (1) the exchange of any shares of Class B-X Common Stock for Class B-Y Common Stock and Class C Common Stock pursuant to the Class B-X Exchange Offer shall constitute an exchange of such Class B-X Common Stock for Class B-Y Common Stock and Class C Common Stock and as a “reorganization” within the meaning of Section 368(a)(1)(E) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and/or as an exchange to which Section 1036(a) of the Code applies and (2) any payment of Makewhole Amounts, any payments to the Corporation pursuant to the Visa USA By-Laws and Loss Sharing Agreement and any amounts paid by the Corporation to the Holder under Section 1(c) hereof shall be treated, for U.S. federal income tax purposes, as adjustments to the purchase price of the shares of Class B-Y Common Stock received by the Holder in connection with the exchange undertaken in clause (1) hereof, and shall be included in such Holder’s tax basis in the Class B-Y Common Stock so exchanged, and by the Corporation as capital adjustments with respect to such exchange under Section 1032 of the Code (collectively, with clause (1), the “Intended Tax Treatment”); NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereto hereby agree as follows: SECTION 1. Payment of Makewhole Amounts; Refund of Overpayments. (a) At any time and from time to time when (x) the Applicable Conversion Rate for the Class B-X Common Stock is greater than zero (0) and (y) the Applicable Conversion Rate for the Class B-Y Common Stock is equal to or less than zero (0), if the Applicable Conversion Rate for the Class B-X Common Stock (assuming at least one such share outstanding) is adjusted in connection with the sale of any Loss Shares or the deposit or designation of Loss Funds into the Escrow Account (or any deemed sale, deposit or designation pursuant to Section 4.26(a) of the Certificate of
Incorporation) to make one share of Class B-X Common Stock convertible into fewer shares (or fractions of a share) of Class A Common Stock, the Holder agrees to pay to the Corporation, in cash, an amount (the “Makewhole Amount”) in respect of each share of Class B-Y Common Stock originally issued by the Corporation to the Holder in the Class B-X Exchange Offer (the aggregate number of such shares, the Holder’s “Class B-Y Allocation”) equal to the product of two multiplied by the amount of such decrease in the number of shares (or fractions of a share) of Class A Common Stock resulting from such adjustment to the Applicable Conversion Rate for the Class B-X Common Stock (for the avoidance of doubt, taking into account as appropriate any subdivision, reclassification, split, combination, dividend or distribution with respect to the Class A Common Stock following the Class B-X Exchange Offer Acceptance Date corresponding to the Class B-X Exchange Offer (such Class B-X Exchange Offer Acceptance Date, as indicated on the Corporation’s signature page hereof, hereinafter being referred to as the “Class B-X Exchange Offer Acceptance Date”) in a manner consistent with the provisions of Section 4.14(a) of the Certificate of Incorporation) multiplied by: (i) to the extent such adjustment was the result of a deposit or designation of Loss Funds into the Escrow Account, the corresponding Loss Funds Cost Per Share; and (ii) to the extent such adjustment was the result of a sale of Loss Shares, an amount equal to (x) the net proceeds from such sale deposited into the Escrow Account divided by (y) the number of such Loss Shares issued and sold. For the avoidance of doubt, no further Makewhole Amounts shall be payable following the payment of any Makewhole Amounts made in connection with a decrease of the Applicable Conversion Rate for the Class B-X Common Stock to zero (0), although it is understood that Makewhole Amounts may continue to be payable hereunder with respect to the Holder’s Class B-Y Allocation regardless of whether the Holder continues to own shares of Class B-Y Common Stock. (b) The Holder shall tender payment of any Makewhole Amounts due and owing as promptly as practicable, and in any event within 30 days after delivery of a written demand for payment from the Corporation. The Parties agree that no Makewhole Amount shall be deposited into the Escrow Account but shall become the Corporation’s unrestricted property. (c) If the Holder has previously paid a Makewhole Amount hereunder, and at or following the Escrow Termination Date, (x) the Applicable Conversion Rate for the Class B-X Common Stock is greater than or equal to zero (0) and (y) the Applicable Conversion Rate for the Class B-Y Common Stock is less than zero (0), then, to the extent the Applicable Conversion Rate is adjusted pursuant to clause (ii)(y) of the definition thereof to make one share of Class B-X Common Stock (assuming at least one such share outstanding) convertible into more shares (or fractions of a share) of Class A Common Stock, the Corporation agrees to pay to the Holder in cash, no later than 120 days after the Escrow Termination Date, an amount equal to the product of two multiplied by the Holder’s Class B-Y Allocation multiplied by the amount of such increase in the number of shares (or fractions of a share) of Class A Common Stock resulting from such adjustment to the Applicable Conversion Rate for the Class B-X Common Stock (adjusted, as appropriate, to account for any subdivision, reclassification, split, combination, dividend or distribution with respect to the Class A Common Stock following the Class B-X Exchange Offer Acceptance Date) multiplied by the Price Per Share used in the calculation made pursuant to clause (ii)(y)(C) of the definition of the Applicable Conversion Rate for the Class B-X Common Stock. (d) All calculations made by the Corporation pursuant to this Section 1 shall be conclusive and binding for all purposes, absent manifest error. SECTION 2. Applicability of Visa USA By-Laws and Loss Sharing Agreement. (a) To the extent that it or any of its Affiliates is or was a member of Visa USA immediately prior to October 3, 2007, or at any time thereafter, the Holder and each Parent Guarantor: (i) hereby confirms (1) that it and any such Affiliate, as applicable, is bound by Section 2.05(j) of the Visa USA By-Laws, and (2) that such Section 2.05(j) constitutes its and such Affiliate’s, as applicable, valid and binding agreement, enforceable against it and such Affiliate, as applicable, in accordance with its terms, subject to (x) applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and (y) Section 11(h) of the Loss Sharing Agreement (to the extent the Holder, Parent Guarantor or Affiliate is a party thereto); and
(ii) hereby agrees that in any action or proceeding brought against it or any such Affiliate pursuant to such Section 2.05(j), it and any such Affiliate will not contest the legality, validity, binding nature or enforceability against it or such Affiliate of such Section 2.05(j), subject to (x) applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and (y) Section 11(h) of the Loss Sharing Agreement (to the extent the Holder, Parent Guarantor or Affiliate is a party thereto). (b) Notwithstanding anything to the contrary in the Loss Sharing Agreement, to the extent that a Holder, Parent Guarantor or Affiliate is party to the Loss Sharing Agreement, the Holder and each Parent Guarantor acknowledges and agrees that Section 11(h) of the Loss Sharing Agreement shall not supersede any obligation of such Party arising under Section 1 hereof. (c) To the extent that a Holder, Parent Guarantor or Affiliate is party to the Loss Sharing Agreement, the Holder and each Parent Guarantor acknowledges and agrees that payments under the Loss Sharing Agreement become payable upon the Applicable Conversion Rate for the Class B-1 Common Stock becoming equal to zero (0) in accordance with Section 3(b)(iii) thereof. SECTION 3. Missing Parent Guarantors or Successors; Overdue Amounts. Without limiting any other right or remedy available to the Corporation at law or in equity, and in addition to each such right or remedy, if (x) any Person that is required to be a Parent Guarantor hereunder (including without limitation any Person that the Holder or a Parent Guarantor is required to cause to become a Parent Guarantor hereunder) has not executed and delivered a counterpart hereof and become a Parent Guarantor hereunder, (y) any Successor (as defined in Section 12(a) hereof) shall not have executed and delivered to the Corporation the written agreement contemplated by such Section 12(a) or (z) any Makewhole Amount, or any other amount payable to the Corporation or any of its Affiliates by the Holder, any Parent Guarantor or any Affiliate thereof pursuant to the Loss Sharing Agreement or the Visa USA By-Laws, is not paid within 30 days after the Corporation’s written demand therefor (any such unpaid amount, an “Overdue Amount”): (a) the Corporation shall have the right to instruct the transfer agent for the Common Stock (the “Transfer Agent”) not to honor, process or effectuate any further Transfer of the Holder’s Common Stock until, as applicable, any such Person shall have become a Parent Guarantor hereunder, any such Successor shall have executed and delivered such written agreement, and any such Overdue Amount shall have been duly paid in full, together with interest on the unpaid amount calculated at the highest U.S. prime rate published in the Wall Street Journal during the period beginning 30 days after receipt of such written demand and ending on the date of payment; and the Holder, each Parent Guarantor and each Successor, on its own behalf and on behalf of each Affiliate thereof to the fullest extent permitted by law (which, if the Holder is described in Section 7(a)(ii) hereof, shall not include any Affiliate that is, or is a direct or indirect subsidiary of, a Bank (as defined therein)), hereby waives any and all claims against the Corporation or the Transfer Agent as well as any losses or damages arising out of or in respect thereof (it being agreed that the Transfer Agent is an express third-party beneficiary of such waiver of claims and damages); and (b) The Holder and each Parent Guarantor hereby agrees that the Corporation is authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply against such Overdue Amount any and all cash at any time held and any and all indebtedness at any time owing by the Corporation or any of its Affiliates to or for the credit or the account of the Holder, any Parent Guarantor, or any Successor, and in addition, (x) if the Holder is described in Section 7(a)(i) hereof, to or for the credit or the account of any Person that is a direct or indirect subsidiary of the Holder, any Parent Guarantor, or any Successor, and (y) if the Holder is described in Section 7(a)(iii) hereof, to or for the credit or the account of any direct or indirect subsidiary of any Parent Guarantor. Notwithstanding anything to the contrary herein, (x) for any Parent Guarantor that is identified as a “global systemically important BHC” pursuant to 12 C.F.R. § 217.402 (a “GSIB Guarantor”), no obligations of the Corporation or any of its Affiliates to a subsidiary of a GSIB Guarantor may be set off and applied against an Overdue Amount if such setoff rights would be prohibited pursuant to 12 C.F.R. § 217.64(a)(2), and (y) no obligations of the Corporation or any of its Affiliates to a Bank or a direct or indirect subsidiary of a Bank may be set off and applied against an Overdue Amount owed by (i) a Holding Company (as defined in Section 7 hereof) or any direct or indirect subsidiary of a Holding Company that is not a Bank or a direct or indirect subsidiary of a Bank or (ii) an Excluded Bank Subsidiary (as defined in Section 7 hereof) if, in either case, such setoff rights would constitute a “covered transaction” for purposes of Section 23A of the Federal Reserve Act and the Board of Governors of the Federal Reserve System’s Regulation W. The Corporation agrees to notify the Holder after any such set-off and application made by the Corporation, provided that the failure to give such notice shall not affect the validity of such set-off and application.
SECTION 4. Staged Sales of Class C Common Stock. (a) The Holder agrees that it will not Transfer any shares of Class C Common Stock in a transaction (a “Conversion-to-A Transaction”) in which such shares are converted into shares of Class A Common Stock pursuant to Section 4.10 of the Certificate of Incorporation: (i) in excess of one third of the aggregate number of shares of Class C Common Stock originally issued by the Corporation to the Holder in the Class B- X Exchange Offer (the aggregate number of such shares, the Holder’s “Class C Allocation”), prior to 45 days after the Class B-X Exchange Offer Acceptance Date; or (ii) in excess of two thirds of such Class C Allocation, prior to 90 days after the Class B-X Exchange Offer Acceptance Date. (b) With respect to the shares of Common Stock it Beneficially Owns, the Holder agrees that during the period of 90 days beginning on the Class B-X Exchange Offer Acceptance Date, and except for: (i) Transfers in Conversion-to-A Transactions permitted by paragraph (a) of this Section, any Transfer of Class A Common Stock issued upon such Conversion-to-A Transaction, and the unwinding of any derivative arrangement that corresponds to such permitted Conversion-to-A Transaction, or (ii) Transfers pursuant to Section 4.25(a)(iii), (iv), (v), (vi), (ix) or (x) of the Certificate of Incorporation, or (iii) Transfers of Class A Common Stock that, pursuant to Section 4.11 of the Certificate of Incorporation, is not subject to automatic conversion into Class C Common Stock upon acquisition by such Holder, such Holder will not (A) sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise directly or indirectly transfer or dispose of any such shares of Common Stock, or any securities convertible into or exercisable or exchangeable for such shares of Common Stock, or (B) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of such shares Common Stock or any such other securities, whether any such transaction described in clause (A) or (B) is to be settled by delivery of such Common Stock or such other securities, in cash or otherwise. (c) The Holder agrees and consents to the entry of stop transfer instructions with the Transfer Agent against the Transfer of the Holder’s Common Stock except in compliance with the restrictions of this Section. SECTION 5. Certification. Until the period beginning 90 days after the Class B-X Exchange Offer Acceptance Date, the Corporation may require that prior to any Transfer of shares of Common Stock, the Holder shall certify to the Corporation and the Transfer Agent that such Transfer complies with Section 4 hereof. SECTION 6. Limitation on Remedies. (a) No Party hereto shall have any liability under any provision of this Agreement for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, or loss of business reputation or opportunity, relating to any misrepresentation, any breach of warranty or any breach or alleged breach of this Agreement; provided that, for purposes of this Section, any obligation that constitutes or arises from an Overdue Amount shall not be deemed a claim for punitive, incidental, consequential, special or indirect damages. (b) To the fullest extent permitted by applicable Law, each Party hereby irrevocably waives, and covenants and agrees for the benefit of each other Party not to assert before any Governmental Authority at any time, any and all causes of action or claims of any kind, regardless of legal theory, seeking to invalidate, enjoin, restrain, set aside, modify, reform or otherwise prevent or limit the enforcement of, any provision of this Agreement or the Certificate of Incorporation; provided, however, that the foregoing shall not be construed as a limitation on the right of any Party to seek enforcement of any provision of this Agreement or to assert a cause of action for breach thereof.
SECTION 7. Parent Guarantors. (a) The Holder and each Parent Guarantor represents and warrants to the Corporation that: (i) if the Holder is, or is a direct or indirect subsidiary of, a Bank (as defined below) (other than an Excluded Subsidiary Bank (as defined below)), each Beneficial Owner of more than fifty percent (50%) of the Holder’s or any Parent Guarantor’s equity interest, other than any Beneficial Owner that is a Holding Company (as defined below) or a direct or indirect subsidiary of such Holding Company that itself is not a Bank or a direct or indirect subsidiary of a Bank, (ii) if the Holder is, or is a direct or indirect subsidiary of, a Holding Company but is not a Bank or a direct or indirect subsidiary of a Bank (other than an Excluded Bank Subsidiary, which is included in this clause (ii)), the ultimate Holding Company parent of the Holder, and (iii) if the Holder is not described in either clause (i) or (ii) above, each Beneficial Owner of more than fifty percent (50%) of the Holder’s or any Parent Guarantor’s equity interest, has executed and delivered to the Corporation a counterpart of this Agreement as a Parent Guarantor hereunder. If after the Effective Date any additional Person shall become a Beneficial Owner of more than fifty percent (50%) of the Holder’s or any Parent Guarantor’s equity interest and, per the preceding sentence, such Person would have executed and delivered to the Corporation a counterpart of this Agreement as a Parent Guarantor hereunder, the Holder and each Parent Guarantor shall promptly cause such Person to execute and deliver a counterpart hereof to the Corporation as a Parent Guarantor hereunder. “Bank” means, collectively, a “member bank” (as defined in, and interpreted in accordance with, 12 C.F.R. § 223.3(w)), a “nonmember insured bank” (as interpreted under 12 U.S.C. § 1828(j)) and a “savings association” (as interpreted under 12 U.S.C. § 1468(a)). “Excluded Bank Subsidiary” means the entities excluded from the definition of “Subsidiary” at 12 C.F.R. § 223.2(b)(1)(ii)-(v). “Holding Company” means any company other than a Bank or a subsidiary of a Bank that “controls” (as defined in, and interpreted in accordance with, 12 C.F.R. § 223.3(g)) a Bank. (b) Each Parent Guarantor hereby agrees as follows: (i) Such Parent Guarantor unconditionally guarantees on a joint and several basis with each other Parent Guarantor hereunder (the “Guarantee”) (and, for the avoidance of doubt, not on a joint and several basis with any parent guarantor under any other makewhole agreement to which the Corporation may be party) the full and punctual payment of each payment obligation of the Holder under this Agreement (each, a “Guaranteed Obligation”) when due. If the Holder fails to pay any Guaranteed Obligation punctually when due, such Parent Guarantor agrees that it will forthwith on demand pay the amount not so paid at the place and in the manner specified in this Agreement. (ii) The obligations of such Parent Guarantor under its Guarantee shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (A) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Holder, any other Parent Guarantor or any other Person under this Agreement, by operation of law or otherwise; (B) any modification or amendment of or supplement to this Agreement (except pursuant to and in accordance with Section 12(f) hereof to the extent of a modification, amendment or supplement that expressly releases, discharges or otherwise affects such obligations); (C) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of the Holder, any other Parent Guarantor or any other Person under this Agreement; (D) any change in the corporate existence, structure or ownership of the Holder, any other Parent Guarantor or any other Person or any of their respective subsidiaries (including without limitation the sale or other disposition by
such Parent Guarantor of any of the equity interest in the Holder or any other Parent Guarantor), or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Holder, any other Parent Guarantor or any other Person or any of their respective subsidiaries or assets or any resulting release or discharge of any obligation of the Holder, any other Parent Guarantor or any other Person under this Agreement; (E) the existence of any claim, set-off or other right that such Parent Guarantor may have at any time against the Holder, any other Parent Guarantor, the Corporation or any other Person, whether in connection with this Agreement or any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (F) any invalidity or unenforceability relating to or against the Holder, any other Parent Guarantor or any other Person for any reason of this Agreement, or any provision of applicable law or regulation purporting to prohibit the payment of any Guaranteed Obligation by the Holder, any other Parent Guarantor or any other Person; or (G) any other act or omission to act or delay of any kind by the Holder, any other Parent Guarantor, any other party to this Agreement, the Corporation or any other Person, or any other circumstance whatsoever that might, but for the provisions of this clause (G), constitute a legal or equitable discharge of or defense to any obligation of any Parent Guarantor hereunder. (iii) Such Parent Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Holder, any other Parent Guarantor or any other Person. (iv) If payment of any Guaranteed Obligation by the Holder is stayed by reason of the insolvency or receivership of the Holder or otherwise, all such Guaranteed Obligations shall nonetheless be payable by such Parent Guarantor hereunder forthwith on demand by the Corporation. (v) If any Guaranteed Obligation is not paid promptly when due, the Corporation is authorized, to the fullest extent permitted by law, to set off and apply any and all obligations at any time owing by the Corporation or its Affiliates to or for the credit or the account of any Parent Guarantor against the obligations of such Parent Guarantor under its Guarantee, irrespective of whether or not the Corporation shall have made any demand thereunder and although such obligations may be unmatured. The rights of the Corporation under this paragraph are in addition to all other rights and remedies (including other rights of set-off) that the Corporation may have. (vi) Such Parent Guarantor’s Guarantee is a continuing guarantee, shall be binding on such Parent Guarantor and its successors and assigns, and shall be enforceable by the Corporation. If all or part of the Corporation’s interest in any Guaranteed Obligation is assigned or otherwise transferred, the transferor’s rights under each Guarantee, to the extent applicable to the obligation so transferred, shall automatically be transferred with such obligation. SECTION 8. Representations and Warranties. Each Party represents and warrants to each other Party hereto that: (a) It has all necessary power, authority and capacity to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement has been duly authorized by all necessary corporate or other action on its part. This Agreement has been duly executed and delivered by such Party and constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms. (b) Such Party is not a party to, bound by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, require any consent or payment under, give any third party the right to terminate or accelerate any obligation under, or under which any default would occur, as a result of the execution and delivery by such Party of this Agreement or the performance by such Party of any of the terms hereof. (c) No governmental or other authorizations, and no other registration, declaration or filing by such Party is required in order for such Party: (i) to consummate the transactions contemplated by this Agreement; (ii) to execute and deliver any documents and instruments to be delivered by such Party under this Agreement; and (iii) to duly perform and observe the terms and provisions of this Agreement.
(d) If such Party is the Holder or a Parent Guarantor: (i) The statements contained in the officer’s certificate accompanying such Party’s signature page hereof are true and correct. (ii) On and as of the Effective Date, after giving effect to the entering into of this Agreement and the transactions contemplated hereby and assuming that aggregate Makewhole Amounts payable by the Holder hereunder will not exceed the fair market value of the Holder’s Class B-Y Allocation as of such date, (A) the fair market value of the assets of such Party is greater than the total amount of liabilities (including contingent liabilities) of such Party, (B) the present fair salable value of the assets of such Party is greater than the amount that will be required to pay the probable liabilities of such Party on its debts as they become absolute and matured, (C) such Party is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (D) such Party does not have unreasonably small capital. SECTION 9. U.S. Special Resolution Regime. (a) For purposes of this Section: “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “QFC Stay Rules” means the regulations codified at 12 C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited exceptions, require an express recognition of the stay-and-transfer powers of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and the override of default rights related directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any restrictions on the transfer of any covered affiliate credit enhancements. (b) U.S. QFC Resolution Stay. The Parties agree that if the Holder and/or any Parent Guarantor is a Covered Entity, then (i) to the extent that prior to the date hereof each of the Parties has adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the “Protocol”), the terms of the Protocol are incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a Protocol Covered Agreement and each Party shall be deemed to have the same status as “Regulated Entity” and/or “Adhering Party” as applicable to it under the Protocol; (ii) to the extent that prior to the date hereof the Parties have executed a separate agreement the effect of which is to amend the qualified financial contracts among them to conform with the requirements of the QFC Stay Rules (the “Bilateral Agreement”), the terms of the Bilateral Agreement are incorporated into and form a part of this Agreement and each such Party shall be deemed to have the status of “Covered Entity” or “Counterparty Entity” (or other similar term) as applicable to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms of Section 1 and Section 2 and the related defined terms (together, the “Bilateral Terms”) of the form of bilateral template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)” or the form of bilateral template entitled “Full-Length Omnibus (for use between Non-U.S. G-SIBs and Corporate Groups)”, as applicable, published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request), the effect of which is to amend the qualified financial contracts between the parties thereto to conform with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a “Covered Agreement,” the Holder and any Parent Guarantor (as applicable) shall be deemed a “Covered Entity” and the Corporation shall be deemed a “Counterparty Entity.” In the event that, after the date of this Agreement, all Parties become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this paragraph. In the event of any inconsistencies between this Agreement and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each, the “QFC Stay Terms”), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph without
SECTION 10. Certain U.S. Federal Income Tax Matters. (a) The Parties intend that for U.S. federal income tax purposes: (i) the exchange of any shares of the Holder’s Class B-X Common Stock for Class B-Y Common Stock and Class C Common Stock pursuant to the terms of the Class B-X Exchange Offer shall constitute an exchange of such Class B-X Common Stock for Class B-Y Common Stock and Class C Common Stock and shall qualify as a “reorganization” within the meaning of Section 368(a)(1)(E) of the Code and/or as an exchange to which Section 1036(a) of the Code applies, (ii) the Class B-X Exchange Offer and this Agreement, together with the other documents effectuating and the authorizing resolutions approving the Class B-X Exchange Offer and this Agreement, constitute a “plan of reorganization” with respect to such exchange within the meaning of Treasury Regulations Section 1.368-2(g) for the purposes of Section 368(a)(1)(E) of the Code; and (iii) the receipt by the Corporation of any payment of Makewhole Amounts, any payments to the Corporation pursuant to the Visa USA By-Laws and Loss Sharing Agreement and any amounts paid by the Corporation to such holder under Section 1(c) hereof shall be treated (x) by the Holder as adjustments to such Holder’s purchase price of the Class B-Y Common Stock received in the Class B-X Exchange Offer (and such payments shall be included in such Holder’s tax basis in the Class B-Y Common Stock so received) and (y) by the Corporation as capital adjustments with respect to such exchange pursuant to applicable law, includingunder Section 1032 of the Code and Arrowsmith v. Commissioner, 344 U.S. 6 (1952). (b) No Party shall take any action or position inconsistent with the Intended Tax Treatment or the intended treatment described in this Section on any tax returns or otherwise unless pursuant to (i) a final decision, judgment, decree or other order by any court of competent jurisdiction, (ii) a final settlement with the Internal Revenue Service, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of other jurisdictions, which resolves the entire tax liability for any taxable period or (iii) any other final resolution, including by reason of the expiration of the applicable statute of limitations; provided that if the Holder, Parent Guarantor or any other person related to the foregoing, intends to take a position inconsistent with the Intended Tax Treatment pursuant to clauses (i), (ii) or (iii) of this paragraph, such person shall (x) promptly notify the Corporation of such intention prior to taking such position, (y) cooperate with the Corporation in respect of such position and (z) not take such position without the consent of the Corporation (such consent not to be unreasonably withheld, conditioned or delayed). SECTION 11. Notices. (a) All notices, requests, demands, waivers and other communications required or permitted to be delivered under this Agreement shall be in writing and may be given by any of the following methods: (i) personal delivery; (ii) registered or certified mail, postage prepaid, return receipt requested; (iii) overnight reputable delivery service; or (iv) electronic mail in .pdf format. Except as expressly provided in Section 11(b) hereof, all notices, requests, demands, waivers and other communications required or permitted to (b) The Holder agrees that any notice, request, demand, waiver or other communication by the Corporation may be delivered by the Corporation’s Transfer Agent (i) via the Transfer Agent’s EQ Shareowner Online Portal (or equivalent online portal in use by the Transfer Agent at the relevant time) or (ii) to the address on file with the Transfer Agent as of the date of such communication. The Holder agrees to promptly notify the Corporation and the Transfer Agent of any change to its address set forth on the signature page hereof. Notifications to the Transfer Agent of a change in address shall be submitted through EQ’s Shareowner Online Portal or sent to EQ Shareowner Services, P.O. Box (c) All notices, requests, demands, waivers or other communications shall be deemed received upon (a) actual receipt by the addressee, or (b) actual delivery to the appropriate address.
SECTION 12. Miscellaneous. (a) Assignability; No Third Party Benefit; Successors. This Agreement is made and shall be binding on and inure solely to the benefit of the Parties and their successors or permitted assigns, but, except as expressly provided in Section 3(a) hereof with respect to the Transfer Agent, otherwise confers no rights or defenses upon any non-Party. The Holder and each Parent Guarantor shall require each entity (each, a “Successor”) that, as a result of any merger, purchase of assets, reorganization or other transaction, acquires or succeeds to all or substantially all of the business or assets of such Party to assume on a joint and several basis with such Party the obligations of such Party under this Agreement pursuant to a written agreement in form and substance reasonably satisfactory to the Corporation. (b) Governing Law; Effect of Certain Future Certificate of Incorporation Amendments. (i) This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York. The Parties hereby agree that this Agreement is consistent with public policy and hereby covenant and agree not to make any assertion to the contrary. (ii) Any amendment to the Certificate of Incorporation voted on and approved by stockholders at a time when the Applicable Conversion Rate for the Class B-Y Common Stock is equal to or less than zero (0) shall be disregarded for purposes of calculating (A) any payment by the Holder to the Corporation pursuant to Section 1(a) hereof to the extent such amendment would otherwise increase or accelerate the aggregate such payments thereafter payable hereunder, and (B) any payment by the Corporation to the Holder pursuant to Section 1(c) hereof to the extent such amendment would otherwise decrease or delay the aggregate such payments thereafter payable hereunder. (c) Arbitration. Any dispute arising out of or relating to this Agreement, including but not limited to a dispute relating to the breach, enforceability, interpretation, application, or scope of any aspect of this Agreement (including, without limitation, this paragraph (c)) or a dispute relating to the amount of any payment obligation created by this Agreement or that constitutes an Overdue Amount hereunder shall be finally resolved by arbitration in accordance with the Center for Public Resources (“CPR”) Rules for Non-Administered Arbitration in effect on the date of this Agreement, by one (1) independent and impartial arbitrator (the “Arbitrator”) to be agreed upon by the disputants or, in the absence of such an agreement, appointed by the CPR; provided that John Gleeson, Esq., a former United States District Judge in the Eastern District of New York, is hereby agreed by the Parties (each on its own behalf and on behalf of its Affiliates) to be acceptable as the Arbitrator and shall, provided he so consents, so act. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1–16, and any award rendered by the Arbitrator shall be final and binding and judgment upon the award may be entered by any court having jurisdiction thereof. The place of arbitration shall be New York, New York, unless otherwise agreed by the parties to the arbitration. In the event of a dispute about the existence or amount of a payment obligation created under this Agreement, the Arbitrator shall award the prevailing party its reasonable attorneys’ fees unless the Arbitrator finds that the position of the opposing party was substantially justified. In addition, if the Arbitrator finds that a Party underpaid or declined to pay a sum that it was obliged to pay under the terms of this Agreement, the Arbitrator shall award that other Party pre-Award interest at the U.S. prime rate as published in the Wall Street Journal on the date that the unpaid or underpaid payment was due (or, if the actual cost of replacement funds was greater than the prime rate, the prevailing party’s actual cost of replacement funds), running from the date that the unpaid amount was required to be paid under this Agreement. The provisions of this paragraph (c) shall control any dispute between or among one or more Parties to this Agreement arising out of or relating to this Agreement. (d) Joint Authorship; Opportunity to Review. This Agreement shall be treated as though it were jointly drafted by all Parties, and any ambiguities shall not be construed for or against any Party on the basis of authorship. Each Party represents and warrants that it has had an opportunity to seek and has sought independent legal advice from attorneys of its choice and other advice from such accountants and other professionals as it deems appropriate, in each case with respect to the advisability of executing this Agreement, and such Party has carefully read this Agreement and has made such investigation of the facts pertaining to this Agreement as it deems necessary. (e) No Admission. Nothing in this Agreement is intended to be, nor shall be deemed to be, an admission of any liability to anyone or an admission of the existence of facts upon which liability could be based other than to the Parties hereto pursuant to this Agreement.
(f) Entire Agreement. This Agreement constitutes the entire and only agreement among the Parties with respect to the subject matter hereof, and any representation, promise, or condition in connection therewith shall not be binding upon any of the Parties, except to the extent set forth therein. This Agreement shall not be amended or modified except by a written amendment executed by an authorized representative of each of the Parties. (g) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute but one instrument. (h) No Waiver. Failure to insist on compliance with any term or provision contained in this Agreement shall not be deemed a waiver of that term or provision, nor shall any waiver or relinquishment of any right or power contained in this Agreement at any one time or more times be deemed a waiver or relinquishment of any right or power at any other time or times. (i) Severability. The provisions of this Agreement are severable, and if any provision of this Agreement is determined by a court of competent jurisdiction or agreed by the Parties to be invalid, void or unenforceable, this shall not affect the validity or enforceability of the remainder of this Agreement or any other provision, and this Agreement may be enforced as if any such invalid, void or unenforceable provision were stricken. (j) Headings. Headings are for convenience only and shall not affect the interpretation of any provision hereof. SECTION 13. Definitions of Class B-X and Class B-Y Common Stock. “Class B-X Common Stock” and “Class B-Y Common Stock” mean: (a) if the type of Class B-X Exchange Offer indicated on the Corporation’s signature page hereof is “Class B-1 Common Stock for Class B-2 Common Stock described in Section 4.23(c)(ii)(A) of the Certificate of Incorporation,” Class B-1 Common Stock and Class B-2 Common Stock, respectively; (b) if the type of Class B-X Exchange Offer indicated on the Corporation’s signature page hereof is “Class B-2 Common Stock for Class B-3 Common Stock described in Section 4.23(c)(ii)(B) of the Certificate of Incorporation,” Class B-2 Common Stock and Class B-3 Common Stock, respectively; (c) if the type of Class B-X Exchange Offer indicated on the Corporation’s signature page hereof is “Class B-3 Common Stock for Class B-4 Common Stock described in Section 4.23(c)(ii)(C) of the Certificate of Incorporation,” Class B-3 Common Stock and Class B-4 Common Stock, respectively; and (d) if the type of Class B-X Exchange Offer indicated on the Corporation’s signature page hereof is “Class B-4 Common Stock for Class B-5 Common Stock described in Section 4.23(c)(ii)(D) of the Certificate of Incorporation,” Class B-4 Common Stock and Class B-5 Common Stock, respectively. [signature pages follow]
IN WITNESS WHEREOF, each of the undersigned Parties has executed and delivered this Makewhole Agreement as of the Effective Date.
Type of Class B-X Exchange Offer:
IN WITNESS WHEREOF, each of the undersigned Parties has executed and delivered this Makewhole Agreement as of the Effective Date. (IN BOX BELOW, TYPE LEGAL NAME OF HOLDER. PLEASE FOLLOW INSTRUCTIONS BELOW; A DISCREPANCY MAY RESULT IN REJECTION OF TENDERED CLASS B-X COMMON STOCK.)*
IN WITNESS WHEREOF, each of the undersigned Parties has executed and delivered this Makewhole Agreement as of the Effective Date. (IN BOX BELOW, TYPE LEGAL NAME OF PARENT GUARANTOR. PLEASE FOLLOW INSTRUCTIONS BELOW; A DISCREPANCY MAY RESULT IN REJECTION OF TENDERED CLASS B-X COMMON STOCK.)*
OFFICER’S CERTIFICATE Accompanying Holder’s or Parent Guarantor’s Signature Page of Makewhole Agreement* This Certificate is being delivered in connection with the Makewhole Agreement with Visa Inc. to be entered into by (check one box below and then complete applicable box; attach constitutive instrument referred to in paragraph 2):
The undersigned hereby certifies to Visa Inc. that: 1. The undersigned is a duly authorized officer of the “Holder” or “Parent Guarantor,” as applicable, named above (the “Company”). 2. Attached to this Officer’s Certificate is a true, correct and complete copy of the certificate of incorporation, certificate of formation, certificate of limited partnership or equivalent constitutive instrument of the Company in effect as of the Effective Date of the Makewhole Agreement. The name of the Company as set forth in the attached document matches the name of the Company as set forth above and on the signature page of the Makewhole Agreement. 3. Each person who as an authorized officer of the Company signed the Makewhole Agreement was duly elected or appointed, qualified and acting as such at the respective times of the signing and delivery thereof and was duly authorized to sign the Makewhole Agreement on behalf of the Company, and the signature of such person appearing on the signature page of the Makewhole Agreement is the genuine signature of such officer. IN WITNESS WHEREOF, I have signed this Officer’s Certificate.
Attachment to Officer’s Certificate (attach copy of constitutive instrument referred to in paragraph 2 of Officer’s Certificate)
VISA VISA INC. P.O. BOX 193243 SAN FRANCISCO, CA
94119-3243 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59
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 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 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V25762-P00773 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. VISA INC. The Board of Directors recommends you vote FOR each of the following nominees listed in Proposal 1. 1. To elect the eleven director nominees named in the proxy statement. Nominees: For Against Abstain 1a. Lloyd A. Carney [ ] [ ] [ ] 1b. Kermit R. Crawford [ ] [ ] [ ] 1c. Francisco Javier Fernández-Carbajal [ ] [ ] [ ] 1d. Ramon Laguarta [ ] [ ] [ ] 1e. Teri L. List [ ] [ ] [ ] 1f. John F. Lundgren [ ] [ ] [ ] 1g. Ryan McInerney [ ] [ ] [ ] 1h. Denise M. Morrison [ ] [ ] [ ] 1i. Pamela Murphy [ ] [ ] [ ] 1j. Linda J. Rendle [ ] [ ] [ ] 1k. Maynard G. Webb, Jr. The Board of Directors recommends you vote FOR the following proposals: For Against Abstain 2. To approve, on an advisory basis, the compensation paid to our named executive officers. [ ] [ ] [ ] 3. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2024. [ ] [ ] [ ] 4. To approve and adopt the Class B Exchange Offer Certificate Amendments. [ ] [ ] [ ] 5. To approve one or more adjournments of the Annual Meeting to a later date or time, if necessary or appropriate, to solicit additional proxies in favor of Proposal 4 if there are insufficient votes at the time of the Annual Meeting to approve such proposal. [ ] [ ] [ ] The Board of Directors recommends you vote AGAINST the following proposals: For Against Abstain 6. To vote on a stockholder proposal requesting that the Board adopt a policy to seek shareholder ratification of certain termination pay arrangements. To transact such other business as may properly come before the Annual Meeting and 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 full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on January 23, 2024: The Notice and Proxy Statement and our Annual Report to Stockholders can be accessed electronically at http://investor.visa.com or www.proxyvote.com. V25763-P00773 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISA INC. 2024 ANNUAL MEETING OF STOCKHOLDERS CLASS A The undersigned stockholder(s) appoint(s) Kelly Mahon Tullier, Julie Rottenberg, and Daniel Gordon, and each of them, with full power of substitution in each, as attorneys and proxies for and in the name and place of the undersigned, and hereby authorize(s) each of them to represent and to vote all of the shares of Class A common stock of Visa Inc. (“Visa”) that are held by the undersigned as of November 24, 2023, which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Visa to be held virtually via a live audio webcast at www.virtualshareholdermeeting.com/V2024 on January 23, 2024 at 8:30 a.m. (Pacific time), and at any adjournments or postponements thereof. THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER, WILL BE VOTED AT THE ANNUAL MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF AS DIRECTED BY THE STOCKHOLDER(S) HEREIN. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE ELEVEN NOMINEES IDENTIFIED HEREIN TO THE BOARD OF DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5, AND AGAINST PROPOSAL 6. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting and at any adjournments or postponements thereof. Continued and to be signed on reverse side
VISA VISA INC. P.O. BOX 193243 SAN FRANCISCO, CA 94119-3243 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on January 22, 2024. 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 to www.virtualshareholdermeeting.com/V2024 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 on January 22, 2024. Have your proxy card in hand when you call and then 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 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V25764-P00773 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY VISA INC. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 4. To approve and adopt the Class B Exchange Offer Certificate Amendments. [ ] [ ] [ ] NOTE: To transact such other business as may properly come before the Annual Meeting and 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 full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on January 23, 2024: The Notice and Proxy Statement and our Annual Report to Stockholders can be accessed electronically at http://investor.visa.com or www.proxyvote.com. V25765-P00773 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISA INC. 2024 ANNUAL MEETING OF STOCKHOLDERS CLASS B The undersigned stockholder(s) appoint(s) Kelly Mahon Tullier, Julie Rottenberg, and Daniel Gordon, and each of them, with full power of substitution in each, as attorneys and proxies for and in the name and place of the undersigned, and hereby authorize(s) each of them to represent and to vote all of the shares of Class B common stock of Visa Inc. (“Visa”) that are held of record by the undersigned as of November 24, 2023, which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Visa to be held virtually via a live audio webcast at www.virtualshareholdermeeting.com/V2024 on January 23, 2024 at 8:30 a.m. (Pacific time), and at any adjournments or postponements thereof. THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER, WILL BE VOTED AT THE ANNUAL MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF AS DIRECTED BY THE STOCKHOLDER(S) HEREIN. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSAL 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting and at any adjournments or postponements thereof. Continued and to be signed on reverse side
VISA VISA INC. P.O. BOX 193243 SAN FRANCISCO, CA 94119-3243 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on January 22, 2024. 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 to www.virtualshareholdermeeting.com/V2024 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 on January 22, 2024. Have your proxy card in hand when you call and then 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 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V25766-P00773 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. VISA INC. The Board of Directors recommends you vote FOR the following proposal: 4. To approve and adopt the Class B Exchange Offer Certificate Amendments. NOTE: To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. For [ ] Against [ ] Abstain [ ] 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 full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on January 23, 2024: The Notice and Proxy Statement and our Annual Report to Stockholders can be accessed electronically at http://investor.visa.com or www.proxyvote.com. V25767-P00773 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISA INC. 2024 ANNUAL MEETING OF STOCKHOLDERS CLASS C The undersigned stockholder(s) appoint(s) Kelly Mahon Tullier, Julie Rottenberg, and Daniel Gordon, and each of them, with full power of substitution in each, as attorneys and proxies for and in the name and place of the undersigned, and hereby authorize(s) each of them to represent and to vote all of the shares of Class C common stock of Visa Inc. (“Visa”) that are held of record by the undersigned as of November 24, 2023, which the undersigned is entitled to vote at the Annual Meeting of Stockholders of Visa to be held virtually via a live audio webcast at www.virtualshareholdermeeting.com/V2024 on January 23, 2024 at 8:30 a.m. (Pacific time), and at any adjournments or postponements thereof. THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER, WILL BE VOTED AT THE ANNUAL MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF AS DIRECTED BY THE STOCKHOLDER(S) HEREIN. IF NO CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSAL 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting and at any adjournments or postponements thereof. Continued and to be signed on reverse side
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