UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
Preliminary Proxy Statement | ||
☐ | Confidential, for Use of the Commission Only (as | |
Definitive Proxy Statement | ||
☐ | Definitive Additional Materials | |
☐ | Soliciting Material |
CORELOGIC, INC.
(Name of Registrant as Specified Inin Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if Otherother than the Registrant)
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DATED SEPTEMBER 14, 2020
March 19,[●], 2020
Dear Fellow Stockholders,Stockholder:
You are cordially invited to attend our annualA special meeting of stockholders (the “Special Meeting”) of CoreLogic, Inc. (the “Company” or “CoreLogic”) will be held at 2:00 [●] [a.m.]/[p.m. Pacific Time], local time, on Tuesday, April 28,November 17, 2020, at the executive offices of CoreLogic, Inc., located at 40 Pacifica, Irvine, California 92618. We have included a map and directions to our executive offices on the inside back cover of this proxy statement for your convenience.
[●]. Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying notice of annualspecial meeting to stockholders (the “Notice of Special Meeting”) and proxy statement. We have also made available a copy of our 2019 Annual Report to Stockholdersstatement on Schedule 14A (the “Annual Report”) with this proxy statement. We encourage you to read the Annual Report, which includes our audited financial statements and provides information about our business.
As in prior years, we have elected to provide access to our proxy materials over the Internet by mailing our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”“Proxy Statement”). The Proxy Statement and accompanying WHITE proxy card (the “WHITE Proxy Card”) are first being mailed to stockholders on or about [●], 2020.
We have called the Special Meeting to give our stockholders the opportunity to vote and express their views on a series of proposals described in the accompanying Notice providesof Special Meeting and Proxy Statement, each of which are opposed by the Company’s board of directors (the “Board”). The Board unanimously recommends that you vote today AGAINST all of the proposals on the enclosed WHITE Proxy Card, for the reasons discussed below and detailed in the Proxy Statement.
On June 26, 2020, the Board received an unsolicited, non-binding proposal from Senator Investment Group LP (together with its affiliates, “Senator”) and Cannae Holdings, Inc. (together with its affiliates, “Cannae”) to acquire all of the outstanding shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), at a price of $65.00 per share in cash (the “Acquisition Proposal”). On July 6, 2020, the Board unanimously concluded, after consultation with its independent financial and legal advisors, that the Acquisition Proposal significantly undervalues CoreLogic, raises serious regulatory concerns and is not in the best interests of CoreLogic’s stockholders. On July 7, 2020, the Company informed Senator and Cannae of the Board’s decision to reject the Acquisition Proposal.
In connection with the Acquisition Proposal, Senator and Cannae have requested that certain proposals be presented to stockholders for them to consider and vote upon at a special meeting. Although the Board does not believe that approving these proposals is in the best interests of all of the Company’s stockholders, the Board determined to call the Special Meeting to provide our stockholders the opportunity to vote and express their views on the proposals set forth in the Proxy Statement.
CoreLogic has achieved great success under your Board. Fiscal year 2020 is on track to be a record year in profitability with strong growth. For the second quarter of fiscal year 2020 the Company outperformed its updated guidance and, based on its strong results, the Company also increased its guidance for fiscal year 2020. The Company also recently increased its share repurchase authority to $1 billion and expects to make share repurchases of $500 million in fiscal year 2020, $300 million in fiscal year 2021 and $200 million in fiscal year 2022. Additionally, in July 2020, the Company further increased its quarterly dividend by 50%, from $0.22 to $0.33 per share.
The proposals to be considered and voted upon at the Special Meeting, all of which your Board opposes, seek to (i) remove J. David Chatham, Douglas C. Curling, John C. Dorman, Paul F. Folino, Thomas C. O’Brien, Pamela H. Patenaude, Vikrant Raina, J. Michael Shepherd and David F. Walker from your Board, despite such directors (other than Pamela Patenaude, who joined the Board in June 2020) having been duly elected by our stockholders at our last annual meeting of stockholders less than five months ago, (ii) nominate nine nominees hand-picked by Senator and Cannae for appointment to your Board and (iii) amend certain provisions of the Company’s Amended and Restated Bylaws (the “Bylaws”). If appointed, Senator and Cannae’s hand-picked nominees would have control of your Board and would be positioned to consider and negotiate an acquisition proposal with Senator and Cannae, the very same entities that nominated and are soliciting votes for them. This would allow these nominees hand-picked by Senator and Cannae to, subject to their fiduciary duties, facilitate the acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal that your duly elected, highly-qualified and independent Board has determined (i) significantly
undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders.
The Board believes that Senator and Cannae’s intent is to circumvent the Board’s business judgment and prevent the Company from executing on its current strategy—which the Board believes will generate value for the Company’s stockholders—and seize for Senator and Cannae value that rightly belongs to the Company’s stockholders.
The Board strongly believes that Senator and Cannae’s actions are not in the best interests of the Company and its stockholders, and unanimously recommends that you vote today AGAINST all of the proposals on the enclosed WHITE Proxy Card. You should read the Proxy Statement carefully, including the section of the Proxy Statement entitled “Reasons to Reject the Stockholder Proposals,” because it contains important information about why you should reject Senator and Cannae’s efforts to remove and replace nine of the Company’s directors and to amend the Bylaws. We ask stockholders to carefully consider the impact that the proposals could have on howthe value of your shares.
Your vote is important. Whether or not you plan to attend the Special Meeting, we hope you will submit your proxy as soon as possible. You may submit a proxy over the internet, by telephone or by signing, dating and returning the enclosed WHITE Proxy Card in the envelope provided. Information about each of these proxy submission methods is set forth in the accompanying Notice of Special Meeting and Proxy Statement.
As stockholders of the Company, Senator and Cannae do not have a fiduciary duty to act in the best interests of the Company’s stockholders (including when selecting nominees to serve on your Board, who also do not, and will not, have any such duty unless elected to the Board). We strongly urge you NOT to sign or return any [●] proxy card sent to you by Senator or Cannae. If you have previously signed a [●] proxy card sent to you by Senator or Cannae, you can obtain paper copiesrevoke that earlier proxy and vote by proxy AGAINST all of the proposals by signing, dating and returning the enclosed WHITE Proxy Card in the postage-paid envelope provided, by voting over the internet using the internet address on the WHITE Proxy Card or by voting by telephone using the toll-free number on the WHITE Proxy Card.
REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK THAT YOU OWN, YOUR VOTE IS EXTREMELY IMPORTANT. PLEASE ACT TODAY AND MAKE YOUR VOICE HEARD REGARDING THE FUTURE OF YOUR COMPANY. Thank you for your consideration and your continuing support of our proxy materials if they so choose. This method expedites the receipt of your proxy materials, lowers the costs of our annual meeting and supports conservation of natural resources. If you would like more information, please see the Questions and Answers section of this proxy statement.
Thank you very much for your continued interest in CoreLogic.Company.
Paul F. Folino
| Frank D. Martell
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Chairman of the Board | President and Chief Executive Officer |
PRELIMINARY PROXY STATEMENT SUBJECT TO COMPLETION
DATED SEPTEMBER 14, 2020
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
[●], 2020
TO OUR STOCKHOLDERS:
A special meeting of the stockholders of CoreLogic, Inc., a Delaware corporation (the “Company” or “CoreLogic”), will be held on Tuesday, November 17, 2020, at [●] [a.m.]/[p.m.], local time, at [●] (the “Special Meeting”), to consider and vote upon the following proposals, each of which is opposed by the Company’s board of directors (the “Board”):
1. | the repeal of each provision of, or amendment to, the Company’s Amended and Restated Bylaws (the “Bylaws”) adopted by the Board without the approval of the Company’s stockholders subsequent to July 6, 2020; |
2. | the removal from office as directors of the Company of J. David Chatham, Douglas C. Curling, John C. Dorman, Paul F. Folino, Thomas C. O’Brien, Pamela H. Patenaude, Vikrant Raina, J. Michael Shepherd and David F. Walker, as well as any other person or persons elected or appointed to the Board without stockholder approval after June 18, 2020 and up to and including the date of the Special Meeting (other than the Senator and Cannae Nominees listed in the Nomination Proposal (as each is defined below)) (such directors, the “Incumbent Directors” and such proposal, the “Director Removal Proposal”); |
3. | the nomination of W. Steve Albrecht, Martina Lewis Bradford, Gail Landis, Wendy Lane, Ryan McKendrick, Katherine “KT” Rabin, Sreekanth Ravi, Lisa Wardell and Henry W. “Jay” Winship (the “Senator and Cannae Nominees”) for appointment to the Board by the directors then in office, if and to the extent one or more of the Incumbent Directors is removed from the Board pursuant to the valid adoption of the Director Removal Proposal (the “Nomination Proposal”); and |
4. | the amendment to Section 2.2 of Article II of the Bylaws, as set forth below, to add a new clause to Section 2.2 of Article II of the Bylaws (which shall be designated clause (b)) to provide mechanics for calling a special meeting of stockholders if no directors or less than a majority of directors are in office following the passing of the Director Removal Proposal: |
“(b) Notwithstanding anything to the contrary set forth herein, unless otherwise specified by the Court of Chancery, the Chief Executive Officer or Secretary shall, within five (5) business days after the date on which the Court of Chancery issues an order requiring the Corporation to hold an election pursuant to Section 223 of the DGCL, call a special meeting of stockholders of the Corporation for the election of directors and deliver notice of such meeting as provided in Section 2.3 of this Article II. Any special meeting of stockholders of the Corporation so called shall be held at the place, date and time specified in the notice of such meeting and in accordance with applicable law (or, at such other place, date and time as may be specified by the Court of Chancery).”
These proposals are referred to herein collectively as the “Stockholder Proposals.”
In the event of the valid adoption of the Nomination Proposal, pursuant to Section 5.2 of CoreLogic’s Amended and Restated Certificate of Incorporation and Section 3.3 of the Bylaws, the directors remaining in office will, subject to applicable law, fill any vacancies on the Board resulting from removals from among the Senator and Cannae Nominees, if any, who have received the affirmative vote of the holders of a majority in voting power of the Company’s stock entitled to vote thereon, present in person or represented by proxy at the Special Meeting (the “Eligible Nominees”). If the number of Eligible Nominees exceeds the number of vacancies on the Board resulting from removals, the Board will fill such vacancies with the Eligible Nominees receiving
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERSthe highest number of affirmative votes, subject to applicable law, or, in the event of a tie, the Board shall determine which of the Eligible Nominees receiving the highest number of affirmative votes will fill such vacancies. The Board is not currently aware of any facts that would prevent any of the Senator and Cannae Nominees from being appointed under applicable law.
The Company’s proxy statement accompanying this Notice of Special Meeting describes each of these proposals in more detail. Your Board unanimously recommends that you vote today AGAINST all of the Stockholder Proposals on the enclosed WHITE proxy card (the “WHITE Proxy Card”).
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The Stockholder Proposals are the only proposals to be acted upon at the Special Meeting. In accordance with Section 2.10(b) of Article II of the Bylaws, no other business will be conducted. Stockholders
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Record Date Only stockholders of record at the close of business on March 4,September 18, 2020 (the “Record Date”) are entitled to notice of, and to vote at, the AnnualSpecial Meeting and any adjournments or postponements thereof.
All stockholders as of the close of business on the Record Date are cordially invited to attend the Special Meeting in person. If you are a stockholder of record you must bring proof of identification in order to be admitted to the Special Meeting.
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If you hold your shares through a broker, bank or other nominee, you will need to provide proof of ownership as of the Record Date – for example a copy of a brokerage statement showing your share ownership – and proof of identification in order to be admitted to the Special Meeting. We currently plan to hold the Special Meeting in person. However, as part of our contingency planning regarding the novel coronavirus (COVID-19), we are preparing for the possibility that the Special Meeting may be held by means of remote communication (sometimes referred to as a “virtual” meeting). If we take this step, we will announce the decision to do so as soon as practicable before the Special Meeting through a press release and public filing with the Securities and Exchange Commission (the “SEC”), and details will be available for viewing under the “Investor Relations” section of our website at https://investor.corelogic.com. We recommend that you monitor this website for updated information and registration details in the event we determine to convert to a virtual meeting and you elect to participate remotely. Your Vote is Very Important Even ifWhether or not you plan to attend the AnnualSpecial Meeting, we encourageurge you to review these materials carefully and to vote via the Internet, by proxy by internet, telephone, or by mailsubmitting your WHITE Proxy Card as soonpromptly as possiblepossible.
YOUR BOARD STRONGLY URGES YOU NOT TO SIGN OR RETURN ANY [●] PROXY CARD SENT TO YOU BY SENATOR OR CANNAE.
If you have previously signed a [●] proxy card sent to ensureyou by Senator or Cannae, you can revoke that earlier proxy and vote by proxy AGAINSTall ofthe Stockholder Proposals by voting over the internet using the website indicated on the WHITE Proxy Card, by voting by telephone using the toll-free number on the WHITE Proxy Card, or by signing, dating and returning the WHITE Proxy Card in the postage-paid envelope provided. Only your shares are representedlast-dated proxy will be counted, and any proxy may be revoked at any time prior to its exercise at the AnnualSpecial Meeting. We look forward to seeing you atPlease act today and make your voice heard regarding the Annual Meeting.future of your Company.
By Order of the Board of Directors,
Francis Henry Aaron Henry
Chief Legal Officer and
Corporate Secretary
Irvine, California
March 19,[●], 2020
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IMPORTANT
Your vote is extremely important. Whether or not you plan to attend the Special Meeting and regardless of the number of shares you own, we urge you to vote promptly by proxy AGAINST all of the Stockholder Proposals.
If you have any questions about submitting your WHITE Proxy Card or otherwise require assistance, please contact:
501 Madison Avenue, 20th Floor
New York, New York 10022
TOLL-FREE at (877) 750-9498 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
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PRELIMINARY PROXY STATEMENT SUBJECT TO COMPLETION
DATED SEPTEMBER 14, 2020
CORELOGIC, INC.
40 Pacifica
Irvine, California 92618
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 17, 2020
PROXY STATEMENT
This proxy statement filed on Schedule 14A (this “Proxy Statement”) and the enclosed WHITE proxy card (the “WHITE Proxy Card”) are furnished by the Board of Directors (the “Board” or “Board of Directors”) of CoreLogic, Inc., a Delaware corporation (the “Company,” “CoreLogic,” “we,” “us,” or “our”), to the holders of outstanding shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), for use at the special meeting of stockholders (the “Special Meeting”) to be held at [●] [a.m.]/[p.m.], local time, on Tuesday, November 17, 2020, at [●], and at any adjournments or postponements thereof.
This Proxy Statement and the enclosed WHITE Proxy Card are first being mailed to stockholders on or about [●], 2020.
On June 26, 2020, the Board received an unsolicited, non-binding proposal from Senator Investment Group LP (together with its affiliates, “Senator”) and Cannae Holdings, Inc. (together with its affiliates, “Cannae”), to acquire all of the outstanding shares of Common Stock at a price of $65.00 per share in cash (the “Acquisition Proposal”). On July 6, 2020, the Board unanimously concluded, after consultation with its independent financial and legal advisors, that the Acquisition Proposal significantly undervalues CoreLogic, raises serious regulatory concerns and is not in the best interests of CoreLogic’s stockholders. On July 7, 2020, the Company informed Senator and Cannae of the Board’s decision to reject the Acquisition Proposal.
In connection with the Acquisition Proposal, Senator and Cannae have requested that certain proposals be presented to stockholders for them to consider and vote upon at a special meeting. Although the Board does not believe that approving these proposals is in the best interests of all of the Company’s stockholders, the Board determined to call the Special Meeting to provide our stockholders the opportunity to vote and express their views on the proposals set forth in the Proxy Statement.
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINSTALL OF THE PROPOSALS SET FORTH IN THIS PROXY STATEMENT ON THE ENCLOSED WHITE PROXY CARD AND URGES YOU NOT TO SIGN OR RETURN ANY [●] PROXY CARD SENT TO YOU BY SENATOR OR CANNAE. YOUR BOARD, WHICH IS COMPOSED ENTIRELY OF INDEPENDENT DIRECTORS (OTHER THAN THE COMPANY’S CHIEF EXECUTIVE OFFICER), IS COMMITTED TO ACTING IN THE BEST INTERESTS OF ALL OF THE COMPANY’S STOCKHOLDERS.
If you have previously signed a [●] proxy card sent to you by Senator or Cannae, you can revoke that earlier proxy and vote by proxyAGAINST all of the matters to be voted on at the Special Meeting by signing, dating and returning the enclosed WHITE Proxy Card in the enclosed postage-paid envelope, by voting over the internet using the internet address on the WHITE Proxy Card or by voting by telephone using the toll-free number on the WHITE Proxy Card. Only your last-dated proxy will be counted, and any proxy may be revoked at any time prior to its exercise at the Special Meeting.
If your shares are held in street name through a broker, bank or other nominee, you are considered the beneficial owner of those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares. Without your voting instructions, because of the non-routine nature of the proposals, your broker, bank or other nominee may not vote your shares with respect to any of the proposals. We encourage you to instruct your broker, bank or other nominee to vote your shares AGAINST all of the proposals set forth in this Proxy Statement by following the directions on the enclosed WHITE voting instruction form to provide your instructions over the internet, by telephone or by signing, dating and returning the WHITE voting instruction form in the postage-paid envelope provided.
In accordance with Delaware law and the Company’s Amended and Restated Bylaws (the “Bylaws”), the Board has set the close of business on September 18, 2020 as the record date (the “Record Date”) for the determination of the Company’s stockholders who are entitled to notice of, and to vote at, the Special Meeting. Stockholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Special Meeting and any adjournments or postponements thereof. At the close of business on the Record Date, [●] shares of our Common Stock were outstanding and entitled to vote. Stockholders are entitled to one vote for each share of Common Stock held.
If you have any questions about submitting your WHITE Proxy Card or otherwise require assistance, please contact:
501 Madison Avenue, 20th Floor
New York, New York 10022
TOLL-FREE at (877) 750-9498 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
Safe Harbor / Forward Looking StatementsFORWARD-LOOKING STATEMENTS
Certain statements made in this proxy statementProxy Statement are forward-looking statements within the meaning of the federal securities laws.laws, including but not limited to those statements related to expected financial results, including in the second half of fiscal year 2020 and fiscal years 2021 and 2022, overall mortgage market volumes, market opportunities, stockholder value creation, repurchases of our shares, our strategic plans or growth strategy, and the near and long term consequences of the Acquisition Proposal we received from Senator and Cannae. Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form10-K.10-K and Part II, Item 1A of our most recent Quarterly Report on Form 10-Q, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”). These risks and uncertainties include but are not limited to: any potential developments related to the Acquisition Proposal; any impact resulting from COVID-19; our ability to protect our information systems against data corruption, cyber-based attacks or network security breaches; limitations on our ability to repurchase our shares; changes in prices at which we are able to repurchase our shares; limitations on access to or increase in prices for data from external sources, including government and public record sources; systems interruptions that may impair the delivery of our products and services; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data; systems interruptions that may impair the delivery of our products and services; difficult conditions in the mortgage and consumer lending industries and the economy generally; risks related to the outsourcing of services and international operations; our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof; and impairments in our goodwill or other intangible assets.assets; and our ability to generate sufficient cash to service our debt. The forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
PROXY STATEMENT SUMMARYDESCRIPTION OF THE STOCKHOLDER PROPOSALS
This summary highlightsThe Special Meeting is being held to consider and vote upon the proposals below, all of which are opposed by the Board. While the Board opposes the proposals, it has called the Special Meeting in order to allow stockholders to consider and vote upon the following proposals:
1. | the repeal of each provision of, or amendment to, the Bylaws adopted by the Board without the approval of the Company’s stockholders subsequent to July 6, 2020 (“Proposal 1” or the “Repeal Proposal”); |
2. | the removal from office as directors of the Company of J. David Chatham, Douglas C. Curling, John C. Dorman, Paul F. Folino, Thomas C. O’Brien, Pamela H. Patenaude, Vikrant Raina, J. Michael Shepherd and David F. Walker, as well as any other person or persons elected or appointed to the Board without stockholder approval after June 18, 2020 and up to and including the date of the Special Meeting (other than the Senator and Cannae Nominees in the Nomination Proposal (each, as defined below)) (such directors, the “Incumbent Directors” and such proposal, “Proposal 2” or the “Director Removal Proposal”); |
3. | the nomination of W. Steve Albrecht, Martina Lewis Bradford, Gail Landis, Wendy Lane, Ryan McKendrick, Katherine “KT” Rabin, Sreekanth Ravi, Lisa Wardell and Henry W. “Jay” Winship (the “Senator and Cannae Nominees”) for appointment to the Board by the directors then in office, if and to the extent one or more of the Incumbent Directors is removed from the Board pursuant to the valid adoption of the Director Removal Proposal (“Proposal 3” or the “Nomination Proposal”); and |
4. | the amendment to Section 2.2 of Article II of the Bylaws, as set forth below, to add a new clause to Section 2.2 of Article II of the Bylaws (which shall be designated clause (b)) to provide mechanics for calling a special meeting of stockholders if no directors or less than a majority of directors are in office following the passing of the Director Removal Proposal: |
“(b) Notwithstanding anything to the contrary set forth herein, unless otherwise specified by the Court of Chancery, the Chief Executive Officer or Secretary shall, within five (5) business days after the date on which the Court of Chancery issues an order requiring the Corporation to hold an election pursuant to Section 223 of the DGCL, call a special meeting of stockholders of the Corporation for the election of directors and deliver notice of such meeting as provided in Section 2.3 of this Article II. Any special meeting of stockholders of the Corporation so called shall be held at the place, date and time specified in the notice of such meeting and in accordance with applicable law (or, at such other place, date and time as may be specified by the Court of Chancery)” (“Proposal 4” or the “Bylaw Amendment Proposal”).
The Repeal Proposal, the Director Removal Proposal, the Nomination Proposal and the Bylaw Amendment Proposal are referred to herein collectively as the “Stockholder Proposals.”
In the event of the valid adoption of the Nomination Proposal, pursuant to Section 5.2 of CoreLogic’s Amended and Restated Certificate of Incorporation (the “Charter”) and Section 3.3 of the Bylaws, the directors remaining in office will, subject to applicable law, fill any vacancies on the Board resulting from removals from among the Senator and Cannae Nominees, if any, who have received the affirmative vote of the holders of a majority in voting power of the Company’s stock entitled to vote thereon, present in person or represented by proxy at the Special Meeting (the “Eligible Nominees”). If the number of Eligible Nominees exceeds the number of vacancies on the Board resulting from removals, the Board will fill such vacancies with the Eligible Nominees receiving the highest number of affirmative votes, subject to applicable law, or, in the event of a tie, the Board shall determine which of the Eligible Nominees receiving the highest number of affirmative votes will fill such vacancies. The Board is not currently aware of any facts that would prevent any of the Senator and Cannae Nominees from being appointed under applicable law.
For additional information regarding the Senator and Cannae Nominees, please refer to Appendix B to this Proxy Statement. The information set forth in Appendix B regarding the Senator and Cannae Nominees is based
on information contained elsewhere in the definitive solicitation statement filed by Senator and Cannae with the SEC on August 19, 2020, as amended (the “Senator and Cannae Solicitation Statement”), and information provided to the Company by Senator and Cannae. The incorporation of this proxy statement. Itinformation in Appendix B to this Proxy Statement should not be construed as an admission by the Company that such information is accurate, and the Company does not contain undertake any obligation to update such information.
A vote in favor of the Stockholder Proposals would be a vote to remove your duly elected, highly-qualified and independent Incumbent Directors and replace them with the Senator and Cannae Nominees, who would then compose a majority of and control your Board. The Senator and Cannae Nominees would be positioned to consider and negotiate an acquisition proposal with Senator and Cannae, the very same entities that nominated and are soliciting votes for them. This would allow these hand-picked Senator and Cannae Nominees to, subject to their fiduciary duties, facilitate the acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal, which your duly elected, highly-qualified and independent Board has determined (i) significantly undervalues the Company, (ii) raises significant regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. Senator and Cannae have no duty to act in the best interests of the Company’s stockholders (including in selecting the Senator and Cannae Nominees that Senator and Cannae are proposing be appointed to your Board).
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST ALL OF THE STOCKHOLDER PROPOSALS ON THE ENCLOSED WHITE PROXY CARD AND URGES YOU NOT TO SIGN OR RETURN ANY [●] PROXY CARD SENT TO YOU BY SENATOR OR CANNAE. YOUR BOARD, WHICH IS COMPOSED ENTIRELY OF INDEPENDENT DIRECTORS (OTHER THAN THE COMPANY’S CHIEF EXECUTIVE OFFICER), IS COMMITTED TO ACTING IN THE BEST INTERESTS OF ALL OF THE COMPANY’S STOCKHOLDERS.
If you have previously signed a [●] proxy card sent to you by Senator or Cannae, you can revoke that earlier proxy and vote by proxy AGAINSTall of the information that you should considerStockholder Proposals by voting over the internet using the website indicated on the WHITE Proxy Card, by voting by telephone using the toll-free number on the WHITE Proxy Card, or by signing, dating and returning the enclosed WHITE Proxy Card in the postage-paid envelope provided. Only your last-dated proxy will be counted, and any proxy may be revoked at any time prior to castingits exercise at the Special Meeting. Please act today and make your voice heard regarding the future of your Company.
If your shares are held in street name through a broker, bank or other nominee, you are considered the beneficial owner of those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares. Without your voting instructions, because of the non-routine nature of the Stockholder Proposals, your broker, bank or other nominee may not vote your shares with respect to any of the Stockholder Proposals. We encourage you to instruct your broker, bank or other nominee to vote your sharesAGAINSTall ofthe Stockholder Proposals by following the directions on the enclosed WHITE voting instruction form to provide your instructions over the internet, by telephone or by signing, dating and returning the WHITE voting instruction form in the postage-paid envelope provided.
In accordance with Delaware law and the Bylaws, the Board has set the close of business on September 18, 2020 as the Record Date for the determination of the Company’s stockholders who are entitled to notice of, and to vote at, the Special Meeting. Stockholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Special Meeting and any adjournments or postponements thereof. At the close of business on the Record Date, [●] shares of our Common Stock were outstanding and entitled to vote. Stockholders are entitled to one vote for each share of Common Stock held.
All stockholders as of the close of business on the Record Date are cordially invited to attend the Special Meeting in person. If you are a stockholder of record you must bring proof of identification in order to be admitted to the Special Meeting. If you hold your shares through a broker, bank or other nominee, you will need
to provide proof of ownership as of the Record Date – for example a copy of a brokerage statement showing your share ownership – and proof of identification in order to be admitted to the Special Meeting. Please note that participants in our 401(k) Savings Plan (the “401(k) Plan”) may not vote their plan shares by ballot at the Special Meeting, but may provide voting instructions to Fidelity Management Trust Company by [●], 2020 at [●] [a.m./p.m.] [Eastern Time]. See “How are my shares in the Company’s 401(k) Plan voted?” in the section of this Proxy Statement entitled “Questions and Answers About the Special Meeting” for more information.
We currently plan to hold the Special Meeting in person. However, as part of our contingency planning regarding the novel coronavirus (COVID-19), we are preparing for the possibility that the Special Meeting may be held by means of remote communication (sometimes referred to as a “virtual” meeting). If we take this step, we will announce the decision to do so as soon as practicable before the Special Meeting through a press release and public filing with the SEC, and details will be available for viewing under the “Investor Relations” section of our website at https://investor.corelogic.com. We recommend that you monitor this website for updated information, and please check the website in advance of the Special Meeting to confirm the status of the Special Meeting and registration details in the event we determine to convert to a virtual meeting and you elect to participate remotely. Whether or not you plan to attend the Special Meeting, we urge you to review these materials carefully and to vote by proxy by internet, telephone or by submitting your WHITE Proxy Card as promptly as possible.
If you have any questions about submitting your WHITE Proxy Card or otherwise require assistance, please contact:
501 Madison Avenue, 20th Floor
New York, New York 10022
TOLL-FREE at (877) 750-9498 (from the U.S. and Canada)
or +1 (412) 232-3651 (from other locations)
REASONS TO REJECT THE STOCKHOLDER PROPOSALS
The reasons your Board recommends that you reject the Stockholder Proposals are set forth below.
Senator and Cannae Seek to Seize Control of the Board to Facilitate Their Opportunistic Acquisition Proposal to Cash Out the Company’s Stockholders at a Price Your Duly Elected, Highly-Qualified and Independent Board Has Determined Significantly Undervalues the Company.
• | Your duly elected, highly-qualified and independent Board thoroughly evaluated the Acquisition Proposal and unanimously concluded that it (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of CoreLogic stockholders. The Board is comprised of independent directors with track records of successfully evaluating and executing public mergers and acquisitions (“M&A”) transactions. Eight of our 12 directors have previous M&A experience at public companies, including at Pinnacle Entertainment, Microsemi, LifeLock and aQuantive and, collectively, the Board has over $20 billion of prior public M&A experience. Following Senator and Cannae’s public announcement of the Acquisition Proposal, the Board conducted a careful review with the assistance of experienced financial and legal advisors and concluded that the Acquisition Proposal (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. |
• | Senator and Cannae themselves appear to recognize that CoreLogic shares are worth more than $65.00 per share since they acquired additional shares at prices above the Acquisition Proposal offer price. In the press release they issued pre-market on June 26, 2020 announcing the Acquisition Proposal (the “Acquisition Proposal Press Release”), Senator and Cannae stated they had economic exposure to shares representing 15% of the outstanding Common Stock; however, as evidenced by Senator and Cannae’s Schedule 13D, filed with the SEC four days later on June 30, 2020, as amended (the “Senator and Cannae 13D”), Senator and Cannae acquired 2,436,190 shares of Common Stock and entered into forward purchase contracts (representing approximately 3% of the outstanding shares of Common Stock) after issuing the Acquisition Proposal Press Release, at prices as high as $68.27 (which is $3.27 higher than the price they have offered pursuant to the Acquisition Proposal). |
• | Your Board believes the timing of the Acquisition Proposal is highly opportunistic. Your Board believes that the Acquisition Proposal is opportunistically timed to acquire CoreLogic at a low valuation and then take all the upside that is rightfully yours. The Acquisition Proposal, which was announced on June 26, 2020, does not take into account that the Company increased its second quarter guidance for fiscal year 2020 on June 25, 2020 or that, on July 7, 2020, building off multiple quarters of strong results, the Company issued increased full year guidance for fiscal year 2020. In addition, the Acquisition Proposal does not take into consideration that on July 7, 2020, the Company issued guidance for fiscal year 2021 and fiscal year 2022, reflecting market share gains, major new business wins and the latest estimates of housing market activity, or that on July 23, 2020, the Company announced that it beat its updated second quarter guidance for fiscal year 2020 and further increased its full year guidance for fiscal year 2020. We believe that Cannae, through its affiliated and/or associated companies in the housing finance space, understands the rapidly improving dynamics underlying CoreLogic’s business and timed its unsolicited approach to get ahead of this inflection point. |
• | Senator and Cannae’s claims about a premium are misleading. Senator and Cannae have consistently referenced the Company’s share price on June 15, 2020 when calculating the premium offered by their $65.00 per share Acquisition Proposal, instead of acknowledging that the Company’s share price traded up 9% to $57.80 after the market closed on June 25, 2020, following the release of increased guidance for the second quarter of fiscal year 2020 and before Senator and Cannae publicly announced the Acquisition Proposal the next morning. Moreover, given the guidance we have provided following June 26, 2020, the Acquisition Proposal effectively provides no takeover premium—at our forward multiple of approximately 11.3x just before Senator and Cannae publicly announced the Acquisition Proposal, the Acquisition Proposal effectively reflects no premium to the implied stock price based on |
our current guidance. The Acquisition Proposal valued the Company at 13x our previous adjusted EBITDA guidance for fiscal year 2020 at the time the Acquisition Proposal was made. If you apply that same 13x adjusted EBITDA multiple to our updated fiscal year 2020 guidance, the implied per share price would be in the upper $70s, far above the $65.00 per share Acquisition Proposal. The Acquisition Proposal also fails to reflect any multiple expansion or uplift from the Company’s new $1 billion capital return commitment – even though the Company’s revenue trajectory and margin profile are consistent with publicly traded information service provides that trade at 13x or higher. |
• | Recent transactions in the sector have occurred at much higher multiples than the multiple implied by the Acquisition Proposal. On July 27, 2020, Black Knight, Inc. (a Company that, like Cannae, is in the William Foley network of companies) announced an acquisition of mortgage data provider Optimal Blue for approximately 30x its estimated EBITDA for fiscal year 2020, despite Senator and Cannae’s purported concerns about the mortgage sector.1 On August 6, 2020, Intercontinental Exchange Inc. announced the acquisition of Ellie Mae Inc. at an implied multiple of approximately 23x estimated EBITDA for fiscal year 2020.2 |
We Believe that CoreLogic, Under Your Board of Directors, is Delivering Exceptional Operating and Financial Results, Has a Strong Foundation Underpinning its Outlook, and Has Rewarded Stockholders With Strong Returns.
• | Your Board believes that recent performance demonstrates that CoreLogic is delivering exceptional operating and financial results. Fiscal year 2020 is on track to be a record year in profitability with 11% year-over-year revenue growth fueled by an accelerating revenue growth trend. For the second quarter of fiscal year 2020 the Company outperformed its updated guidance and, based on its strong results, the Company also increased its guidance for fiscal year 2020. Further, CoreLogic has met or exceeded its adjusted EBITDA guidance range in all 12 quarters since it began issuing such guidance. |
• | Your Board believes that CoreLogic has a strong foundation underpinning its outlook. The Company expects revenue growth of 11% for fiscal year 20203, fueled by (i) four “mega” wins (which the Company defines as contracts in excess of one year in duration and generating greater than $10 million in revenue), (ii) the adoption of our next-generation integrated insurance solutions and (iii) national expansion of our OneHome and HomeVisit solutions. In addition, CoreLogic maintains long-term client relationships with renewal rates underpinning its recurring revenue, with 95% of CoreLogic’s revenue being recurring in nature. Further, approximately 60% of the Company’s 2021 assumed organic revenue growth target of 5%, or $95 million, is already secured by contract wins. |
• | CoreLogic has increased its non-mortgage growth. The Company has transformed its business to decrease its dependency on the mortgage markets. Exhibit 1 below shows the breakdown of mortgage and non-mortgage revenue in 2018 and today, as well as the targeted breakdown for fiscal year 2022. The Company currently has divestiture processes underway for tenant screening and credit solution businesses, which would increase its revenue mix to approximately 50% non-mortgage by fiscal year 2022. |
1 | https://www.prnewswire.com/news-releases/gtcr-announces-sale-of-optimal-blue-to-black-knight-301100193.html; https://www.bamsec.com/transcripts/13282060?hl_id=vk1ehkemt |
2 | https://s2.q4cdn.com/154085107/files/doc_presentations/2020/ICE_Ellie-Mae_Transaction_vF2.pdf |
3 | Normalizing for COVID-19 impacts and the AMC transformation and exit of noncore technology units. |
Exhibit 1
~35% ~40% ~50% 2018 Today 2022 Target Non-Mortgage Revenue Mortgage Revenue
• | Your Board believes that CoreLogic is positioned for multiple expansion. The Company has transformed to become a higher-growth, higher-margin, less mortgage-dependent business. We believe that CoreLogic’s revenue growth, significant recurring revenue and margin profile is consistent with other publicly-traded information services providers which trade at considerably higher multiples.1 We believe our leadership position in a large and growing market, resilient business model and long-term customer relationships with exceptionally high renewal rates further align our business with that of higher multiple public companies. Each 1x of multiple expansion adds approximately $7.00 per share to the Company’s value. As shown in Exhibit 2 below, at $66.40 (the closing stock price on September 4, 2020), CoreLogic has a total enterprise value (“TEV”) of approximately $6.9 billion, which represents an 11.7x TEV / fiscal year 2020 estimated adjusted EBITDA multiple. Increasing CoreLogic’s TEV / fiscal year 2020 estimated adjusted EBITDA multiple to 12.7x implies a share price of $73.62 – an increase of $7.22 – holding all other assumptions constant.” |
Exhibit 2
Illustrative TEV / Estimated Adjusted EBITDA Multiple for Fiscal Year 2020 | 11.7x | 12.7x | ||||||
(x) Estimated Adjusted EBITDA for Fiscal Year 20201 | $ | 590 | $ | 590 | ||||
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TEV | $ | 6,878 | $ | 7,468 | ||||
(-) Net Debt2 | (1,451 | ) | (1,451 | ) | ||||
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Equity Value | $ | 5,427 | $ | 6,017 | ||||
(/) Fully Diluted Shares Outstanding | 82 | 82 | ||||||
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Implied Share Price | $ | 66.40 | $ | 73.62 | ||||
$ Increase | $ | 7.22 |
Source: FactSet (9/4/20); CoreLogic public filings
Note: $ in millions, except per-share values
1 | The other publicly-traded information services providers referenced are CoStar, Dun & Bradstreet, Equifax, Experian, Fair Isaac, IHS Markit, RELX, Thomson Reuters, TransUnion, Verisk and Wolters Kluwer. |
1. | Estimated adjusted EBITDA based on midpoint of fiscal year 2020 guidance issued on July 23, 2020 |
2. | Net Debt calculated as total debt + pension liabilities - cash - investment in affiliates |
• | CoreLogic’s stockholders have been rewarded with a substantial return of capital. |
CoreLogic has returned more than $1.5 billion to stockholders through share repurchases and dividends since the Company’s spin-off from First American Financial Corporation in 2010.
The Company recently increased its share repurchase authorization to $1 billion and expects to make share repurchases of $500 million in fiscal year 2020, $300 million in fiscal year 2021 and $200 million in fiscal year 2022. Overall, including the recently increased quarterly dividend, CoreLogic expects to return over $1.2 billion of capital to stockholders in total from fiscal year 2020 through fiscal year 2022, as reflected in Exhibit 3 below.
In the fourth quarter of fiscal year 2019, the Company initiated a quarterly dividend of $0.22 per share of Common Stock. In July 2020, the Company increased its quarterly dividend by 50% from $0.22 to $0.33 per share.
Exhibit 2
Total Capital Returned ($ in millions) Prior Cumulative Periodic Projected 207 433 674 766 863 1,058 1,265 1,274 1,461 ~595(1) ~2,056 ~393(2) ~2,449 ~289(3) ~2,738 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022ETotal Capital Returned ($ in millions) Prior Cumulative Periodic Projected 207 433 674 766 863 1,058 1,265 1,374 1,461 ~595(1) ~2,056 ~393(2) ~2,449 ~289(3) ~2,738 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E
• | Your Board is focused on executing its strategic plan, which has already delivered positive results. Your Board has provided significant transparency to the Company’s stockholders including multi-year projections, margin targets, planned divestitures, and capital allocation plans. As described above, the Company outperformed its updated guidance for the second quarter of fiscal year 2020, and fiscal year 2020 is on track to be a record year in profitability. Based on those results and notwithstanding Senator and Cannae’s stated belief that the Company should carry out a sale process, your Board believes that continuing to execute on the Company’s current strategic plan is the best approach to further increase value for all stockholders. Nonetheless, the Board remains open to all viable paths to increase stockholder value. |
The Stockholder Proposals Are an Attempt to Remove and Replace Nine Incumbent Directors Who Have a Track Record of, and Commitment to, Acting in the Best Interests of the Company and Its Stockholders.
• | Your current Board has an outstanding track record of driving efficiency. In the past three years, the Company, under the guidance of the Board, continued its strategy of portfolio rationalization, cost savings initiatives and returning capital to stockholders. For example, from fiscal year 2016 to fiscal |
year 2019, the Company expanded its non-mortgage business from approximately 30% of its overall business to 40%, exited legacy non-core business units generating approximately $100 million in revenue, reduced costs by $25 million per year, repurchased 14 million shares of Common Stock and initiated a quarterly dividend. |
• | Your current directors have the experience and skill sets necessary to oversee the Company’s business. Each of the Company’s current highly-qualified directors, all of whom (other than Pamela Patenaude, who joined the Board in June 2020) were duly elected by the Company’s stockholders less than five months ago at the Company’s 2020 annual meeting of stockholders (the “2020 Annual Meeting”), has first-hand working knowledge of the Company, its business, its operations, its employees and its customers. Furthermore, all nine of the Incumbent Directors that Senator and Cannae are attempting to remove have experience in real estate, insurance or technology, which are crucial areas of expertise for understanding and overseeing the Company’s business. More information about the qualifications and experience of each of the Company’s directors is included in the section of this Proxy Statement entitled “Directors of the Company.” |
The Board Believes That the Senator and Cannae Nominees—Through Whom Senator and Cannae Seek to Seize Control of CoreLogic—Are Not in the Best Position to Serve the Interests of the Company’s Stockholders.
• | Your Board believes that all of the Senator and Cannae Nominees have been hand-picked by Senator and Cannae with the goal of implementing Senator and Cannae’s undervalued proposal to acquire the Company, although subject to fiduciary duties. It would be in Senator and Cannae’s interest (but not in the interest of other CoreLogic stockholders) to buy the Company at the lowest possible price. The Senator and Cannae Nominees, if appointed to the Board, would have control of your Board and would be positioned to consider and negotiate an acquisition proposal with Senator and Cannae, the very same entities that nominated and are soliciting votes for them. This would allow Senator and Cannae’s hand-picked nominees to, subject to their fiduciary duties, facilitate the acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal that your duly elected, highly-qualified and independent Board has determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. In considering the Acquisition Proposal and the Stockholder Proposals, your Board believes that it is important for the Company’s stockholders to recognize that Senator and Cannae have no duty to act in the best interests of the Company’s stockholders (including in selecting the Senator and Cannae Nominees that Senator and Cannae are proposing be appointed to your Board). |
• | The Senator and Cannae Nominees lack familiarity with the Company and lack the qualifications and experience necessary to oversee the Company’s business or to evaluate the Company’s strategic alternatives. The Senator and Cannae Nominees have limited or no familiarity with the Company. In order to act on behalf of the Company’s stockholders, and appropriately evaluate the Company’s strategic alternatives, the Senator and Cannae Nominees would need to spend considerable time to obtain the knowledge necessary to understand the Company’s operations and its prospects, as they would not have the benefit of the decades of cumulative experience of the Incumbent Directors. |
The Acquisition Proposal Presents Serious Concerns Over the Likelihood of its Completion, Creating Significant Uncertainty and Risk.
• | The Acquisition Proposal presents serious regulatory concerns. Given overlaps between CoreLogic and the network of numerous companies associated with Cannae’s Chairman, William P. Foley, including Black Knight, Inc. and Fidelity National Financial, Inc., the Acquisition Proposal presents serious regulatory concerns and any potential transaction may be difficult or impossible to consummate. On July 1, 2020, the Company received a notice from the Federal Trade Commission’s (the “FTC”) Premerger Notification Office, Bureau of Competition, indicating that on June 29, 2020, |
Senator Focused Strategies LP, an affiliate of Senator, submitted a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) to acquire certain voting securities of CoreLogic. The 30-day HSR waiting period for Senator Focused Strategies LP to acquire additional shares of the Company’s stock would have expired already, absent an extension of the waiting period by the FTC, and the Company is not aware of Senator Focused Strategies LP receiving HSR approval. Further, on July 14, 2020, the FTC notified the Company that it was investigating the Acquisition Proposal and requested that the Company produce certain information in connection with the FTC’s investigation. On August 7, 2020, the Company received a Civil Investigative Demand and subpoena from the FTC as part of the FTC’s investigation into Senator and Cannae, requiring that the Company produce information in connection with such investigation. The facts above raise significant concern about Senator and Cannae’s ability to complete an acquisition of the Company as there appears to be substantial ongoing regulatory scrutiny which creates uncertainty and risk that any potential transaction could be consummated and, even if possible, how long it would take to do so. |
• | Senator and Cannae have not provided any assurance that they can obtain financing for the Acquisition Proposal. Senator and Cannae have not provided any debt or equity commitments to finance any potential acquisition. They have only provided a highly conditioned “highly confident letter” (the “Highly Confident Letter”) that provides no obligations by potential financing sources and, when and if it results in a consummated debt financing, would only finance approximately half of the funds required to complete the Acquisition Proposal. The Highly Confident Letter states that obtaining financing for the proposed acquisition is inherently subject to uncertainties and contingencies beyond BofA Securities, Inc.’s (“BofA Securities”) control and that, accordingly, there can be no assurance that the arrangement of the proposed credit facilities can in fact be accomplished. Senator and Cannae have not disclosed any other financing sources, including any equity financing sources, whether any equity financing has been committed and the amount of funding that would be provided by such equity financing sources. |
The Board believes that Senator and Cannae’s opportunistic Acquisition Proposal—which significantly undervalues the Company and its current growth trajectory—is designed to benefit Senator and Cannae at the expense of all of the Company’s other stockholders. In contrast, your Board, which is composed entirely of independent directors, other than the Company’s Chief Executive Officer, is committed to enhancing value for all stockholders and has overseen the successful execution of key initiatives, including growth in share and market leadership in key operating units, scaling of core mortgage operations, successful cost productivity initiatives and a shift in revenue mix towards platform and higher profit solutions. The Board is confident that the Company will, consistent with its outstanding track record, deliver greater value to its stockholders by executing its strategic plan than through pursuing the Acquisition Proposal, which your Board has determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders.
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE TODAY AGAINST ALL OF THE STOCKHOLDER PROPOSALS ON THE ENCLOSED WHITE PROXY CARD.
In addition to the reasons provided above, the Board believes you should vote AGAINST each of the Stockholder Proposals for the following reasons:
REPEAL PROPOSAL
Proposal 1 is a proposal to repeal any provision of, or amendment to, the Bylaws adopted without stockholder approval subsequent to July 6, 2020. The text of the proposed resolution to be voted upon at the Special Meeting is below.
RESOLVED, to repeal each provision of, or amendment to, the Bylaws adopted by the Board without the approval of the Company’s stockholders subsequent to July 6, 2020.
THE BOARD’S RESPONSE TO STOCKHOLDER PROPOSAL 1
Your Board unanimously recommends that you vote AGAINST Proposal 1 for the following reasons.
Under our Charter, our Bylaws and Delaware law, our Board is charged with the responsibility of managing and conducting the business and affairs of the Company. In order to permit our Board to carry out its responsibilities and correspondingly fulfill its fiduciary duties to the Company and its stockholders, both our Charter and Bylaws provide that our Board has the power to adopt, amend or repeal the Bylaws. Your Board is committed to good corporate governance and periodically considers ways to enhance the Bylaws.
Proposal 1 (the Repeal Proposal) seeks to repeal all amendments to our Bylaws adopted by our Board without stockholder approval after July 6, 2020 and prior to the effectiveness of such proposal without regard to the subject matter of any Bylaw amendment in question. This proposal is speculative and is designed to nullify unspecified provisions of the Bylaws that may be adopted by the Board in its efforts to act in the best interests of, and protect, the Company and its stockholders. No such amendments to the Bylaws have been made or are currently being contemplated. Furthermore, the Board’s fiduciary duties require that it retain flexibility to adopt, at any time, any amendment to the Bylaws that it believes is proper and in the best interests of the Company’s stockholders. The automatic repeal of any duly adopted Bylaw amendment, irrespective of its content, could have the unfortunate effect of repealing one or more properly adopted Bylaw amendments determined by the Board to be in the best interests of the Company and its stockholders.
The approval of Proposal 1 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against Proposal 1. Stockholders may vote “AGAINST,” “ABSTAIN” from voting or vote “FOR” with respect to Proposal 1.
For the foregoing reasons, the Board unanimously recommends that you vote AGAINST Proposal 1.
DIRECTOR REMOVAL PROPOSAL
Proposal 2 is a proposal to remove, without cause, nine independent Incumbent Directors from the Board. The text of the proposed resolution to be voted upon at the Special Meeting is below.
RESOLVED, to remove from office as directors of the Company J. David Chatham, Douglas C. Curling, John C. Dorman, Paul F. Folino, Thomas C. O’Brien, Pamela H. Patenaude, Vikrant Raina, J. Michael Shepherd and David F. Walker, as well as any other person or persons elected or appointed to the Board without stockholder approval after June 18, 2020 and up to and including the date of the Special Meeting (other than any of the Senator and Cannae Nominees).
THE BOARD’S RESPONSE TO STOCKHOLDER PROPOSAL 2
Your Board unanimously recommends that you vote AGAINST removal of all the Incumbent Directors named in Proposal 2 for the following reasons.
Proposal 2 (the Director Removal Proposal) seeks to remove, without cause, nine of your Incumbent Directors. The Board believes that the removal of the nine duly elected, highly-qualified and independent Incumbent Directors, all of whom (other than Pamela Patenaude, who joined the Board in June 2020) were duly elected by the Company’s stockholders less than five months ago at the Company’s 2020 Annual Meeting, would disrupt the implementation of the Company’s strategic plan, could adversely impact the value of your investment and is not in the best interests of stockholders other than Senator and Cannae. Eleven of the 12 directors on your current Board are independent (including each of the nine Incumbent Directors that Senator and Cannae are attempting to remove). Your current directors are committed to enhancing value for all of the Company’s stockholders and have overseen the successful execution of key initiatives including growth in share and market leadership in key operating units, scaling of core mortgage operations, successful cost productivity initiatives and a shift in revenue mix towards platform and higher profit solutions. The Board is confident that the Company will, consistent with its outstanding track record, deliver greater value to its stockholders by executing its strategic plan rather than through pursuing the Acquisition Proposal, which (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders.
In the past three years, the Company, under the guidance of the Board, continued its strategy of portfolio rationalization, cost savings initiatives and returning capital to stockholders. For example, from fiscal year 2016 to fiscal year 2019, the Company expanded its non-mortgage business from approximately 30% of its overall business to 40%, exited additional legacy non-core units generating approximately $100 million in revenue, reduced costs by $25 million per year, repurchased 14 million shares of Common Stock and began paying a quarterly dividend. In addition, because of the success of your current Board, stockholders have been rewarded with strong returns. Recently, the Company increased its share repurchase authorization to $1 billion, implemented a quarterly dividend of $0.22 per share and then increased the quarterly dividend by 50%, from $0.22 per share to $0.33 per share. Further, the Company plans to return over $1.2 billion of capital to stockholders from fiscal year 2020 through fiscal year 2022. We ask you to review the section of this Proxy Statement entitled “Reasons to Reject the Stockholder Proposals” and our public filings for more information about our historical performance and your Board’s leadership.
Further, each of the Company’s current directors has first-hand working knowledge of the Company, its business, its operations, its employees and its customers, and all nine of the Incumbent Directors that Senator and Cannae are attempting to remove have experience in real estate, insurance or technology, which are crucial areas of expertise for understanding and overseeing the Company’s business. More information about the qualifications and experience of each of the Company’s directors is included in the section of this Proxy Statement entitled “Directors of the Company.”
We believe that our Board is best suited to fully capitalize on the Company’s key initiatives and the value of our current long-term business plan. We further believe that the current directors’ relevant expertise and proven track record of delivering and creating value for its stockholders demonstrates that each of the nine Incumbent Directors should remain in office. As a result, the Board believes that the interests of the Company’s stockholders will be best served if the Incumbent Directors remain on the Board and the Company’s current directors, acting independently from, and without any connection to, Senator and Cannae, are given the opportunity to continue to oversee the execution of the Company’s plan and initiatives to enhance value for all of the Company’s stockholders.
The approval of Proposal 2 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against Proposal 2. Stockholders may vote “AGAINST,” “ABSTAIN” from voting or vote “FOR” the removal of each of the Incumbent Directors named in Proposal 2.
No person has been elected or appointed to the Board after June 18, 2020, and the Board does not intend to appoint any person to the Board prior to the Special Meeting. Should any person be elected or appointed to the Board prior to the Special Meeting, the Company will provide a means for stockholders to vote “AGAINST,” “ABSTAIN” from voting or vote “FOR” the removal from the Board of any such person. If a WHITE Proxy Card is delivered prior to such means being provided and not revoked, the proxies named on the WHITE Proxy Card will ABSTAIN from voting with respect to the removal from the Board of any such person.
For the foregoing reasons, the Board unanimously recommends that you vote AGAINST removal of all the Incumbent Directors named in Proposal 2.
NOMINATION PROPOSAL
Proposal 3 is a proposal to nominate the nine nominees selected by Senator and Cannae for appointment to the Board, by the directors then in office, to the extent there are vacancies on the Board pursuant to the adoption of Proposal 2. The text of the proposed resolution to be voted upon at the Special Meeting is below.
RESOLVED, to nominate the Senator and Cannae Nominees—W. Steve Albrecht, Martina Lewis Bradford, Gail Landis, Wendy Lane, Ryan McKendrick, Katherine “KT” Rabin, Sreekanth Ravi, Lisa Wardell andHenry W. “Jay” Winship—for appointment to the Board by the directors then in office, if and to the extent one or more of the Incumbent Directors is removed from the Board pursuant to the valid adoption of the Director Removal Proposal.
THE BOARD’S RESPONSE TO STOCKHOLDER PROPOSAL 3
Your Board unanimously recommends that you vote AGAINST the nomination for appointment of all of the Senator and Cannae Nominees named in Proposal 3 for the following reasons.
Proposal 3 (the Nomination Proposal) seeks to replace nine of your duly elected, highly-qualified and independent Incumbent Directors, with nine nominees hand-picked by Senator and Cannae. The Board believes that Senator and Cannae’s hand-picked nominees have been chosen not to protect the interests of CoreLogic’s stockholders, but rather to facilitate an acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal that your duly elected, highly-qualified and independent Board has determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. Further, the Board believes that Senator and Cannae’s opportunistic Acquisition Proposal—which significantly undervalues the Company and its current growth trajectory—is designed to benefit Senator and Cannae at the expense of all of the Company’s other stockholders.
The Senator and Cannae Nominees, unlike the Incumbent Directors, have limited or no familiarity with the Company. None of the Senator and Cannae Nominees have disclosed management, operating or M&A experience in CoreLogic’s industry. In order to act on behalf of the Company’s stockholders, and appropriately evaluate the Company’s strategic alternatives, the Senator and Cannae Nominees would need to spend considerable time to obtain the knowledge necessary to understand the Company’s operations and its prospects, as they would not have the benefit of the decades of cumulative experience of the Incumbent Directors.
It would be in Senator and Cannae’s interest (but not in the interest of other CoreLogic stockholders) to buy the Company at the lowest possible price. The Senator and Cannae Nominees, if appointed to the Board, would have control of your Board and would be positioned to consider and negotiate an acquisition proposal with Senator and Cannae, the very same entities that nominated and are soliciting votes for them. This would allow the hand-picked Senator and Cannae Nominees to, subject to fiduciary duties, facilitate an acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal that your duly elected, highly-qualified and independent Board has determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. In
considering the Acquisition Proposal and the Stockholder Proposals, your Board believes that it is important for the Company’s stockholders to recognize that Senator and Cannae have no duty to act in the best interests of the Company’s stockholders (including in selecting the Senator and Cannae Nominees that Senator and Cannae are proposing to be appointed to your Board).
Pursuant to our Charter and Bylaws, vacancies on the Board shall, unless provided by law or resolution of the Board, be filled solely by the affirmative vote of a majority of the remaining directors in office, even though less than a quorum.
In the event of the valid adoption of Proposal 3, pursuant to Section 5.2 of the Charter and Section 3.3 of the Bylaws, the directors remaining in office will, subject to applicable law, fill any vacancies on the Board resulting from removals with the Eligible Nominees, if any. If the number of Eligible Nominees approved by stockholders exceeds the number of vacancies on the Board resulting from the removal of Incumbent Directors, the Board will fill such vacancies with the Eligible Nominees receiving the highest number of affirmative votes, subject to applicable law or, in the event of a tie, the Board shall determine which of the Eligible Nominees receiving the highest number of affirmative votes will fill such vacancies. The Board is not currently aware of any facts that would prevent any of the Senator and Cannae Nominees from being appointed under applicable law.
The approval of Proposal 3 requires the affirmative vote of the holders of a majority in voting power of the Company’s stock entitled to vote thereon, present in person or represented by proxy at the Special Meeting. Abstentions will have the same effect as votes against Proposal 3. Broker non-votes, if any, will have no effect on Proposal 3 as brokers are not entitled to vote on such proposal in the absence of voting instructions from the beneficial owner. Stockholders may vote “AGAINST,” “ABSTAIN” from voting or vote “FOR” the nomination for appointment of each of the Senator and Cannae Nominees named in Proposal 3.
For the foregoing reasons, the Board unanimously recommends a vote AGAINST the nomination for appointment of all the Senator and Cannae Nominees named in Proposal 3.
BYLAW AMENDMENT PROPOSAL
Proposal 4 is a proposal to amend the Bylaws to provide mechanics for calling a special meeting of stockholders if no directors or less than a majority of directors are in office following the passing of the Director Removal Proposal. The text of the proposed resolution to be voted upon at the Special Meeting is below.
RESOLVED, that Section 2.2 of Article II of the Bylaws be, and hereby is, amended, as set forth below, to add a new clause to Section 2.2 of Article II of the Bylaws (which shall be designated clause (b)) to provide mechanics for calling a special meeting of stockholders if no directors or less than a majority of directors are in office following the passing of the Director Removal Proposal:
“(b) Notwithstanding anything to the contrary set forth herein, unless otherwise specified by the Court of Chancery, the Chief Executive Officer or Secretary shall, within five (5) business days after the date on which the Court of Chancery issues an order requiring the Corporation to hold an election pursuant to Section 223 of the DGCL, call a special meeting of stockholders of the Corporation for the election of directors and deliver notice of such meeting as provided in Section 2.3 of this Article II. Any special meeting of stockholders of the Corporation so called shall be held at the place, date and time specified in the notice of such meeting and in accordance with applicable law (or, at such other place, date and time as may be specified by the Court of Chancery).”
THE BOARD’S RESPONSE TO STOCKHOLDER PROPOSAL 4
Your Board unanimously recommends that you vote AGAINST Proposal 4 for the following reasons.
Proposal 4 (the “Annual Meeting”Bylaw Amendment Proposal) seeks to provide mechanics for calling a special meeting of stockholders if no directors or less than a majority of directors are in office following the passing of the Director Removal Proposal. Your Board believes that Proposal 4 is an obvious attempt by Senator and Cannae to amend the Bylaws to circumvent the views of stockholders and to make it easier for Senator and Cannae to gain control of the Board.
In the event of the valid adoption of Proposal 3, pursuant to Section 5.2 of the Charter and Section 3.3 of the Bylaws, the directors remaining in office will, subject to applicable law, fill any vacancies on the Board, resulting from removals with the Eligible Nominees, if any, and if the number of Eligible Nominees exceeds the number of vacancies on the Board resulting from removals, the Board will fill such vacancies with such nominees receiving the highest number of affirmative votes, subject to applicable law or, in the event of a tie, the Board shall determine which of the Eligible Nominees receiving the highest number of affirmative votes will fill such vacancies. As a result, in the context of the Special Meeting, the proposed Bylaw amendment becomes potentially applicable only when the Senator and Cannae Nominees do not receive the requisite stockholder approval to be nominated to fill available vacancies. In such a situation, notwithstanding that the Senator and Cannae Nominees did not obtain the requisite stockholder approval at the Special Meeting, Senator and Cannae, after having lost the vote, seek to facilitate through the Bylaw amendment the calling of another special meeting to try again to put their hand-picked nominees on the Board.
The approval of Proposal 4 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against Proposal 4. Stockholders may vote “AGAINST,” “ABSTAIN” from voting or vote “FOR” with respect to Proposal 4.
For the foregoing reasons, the Board unanimously recommends that you vote AGAINST Proposal 4.
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE TODAY AGAINST ALL OF THE STOCKHOLDER Proposals on the enclosed WHITE proxy card.
Please do not delay. In order to ensure that the Board is able to continue to act in your best interests, please vote AGAINST all of the Stockholder Proposals as promptly as possible—over the internet, using the website indicated on the enclosed WHITE Proxy Card; by telephone, using the toll-free number on the WHITE Proxy Card; or by signing, dating and returning the WHITE Proxy Card in the postage-paid envelope provided.
BACKGROUND OF THE SOLICITATION
The Company regularly meets with its stockholders to discuss the Company and its business, operations and financial results to provide transparency into the direction and strength of the Company’s business. On March 24 and 31, 2020, following release of the Company’s annual results, an investor relations executive of the Company had ordinary course meetings at the request of a representative of Senator to discuss business results from the fourth quarter and full year 2019. At no time during that meeting did the representative of Senator raise the prospect of a potential acquisition of the Company, Senator seeking control of the Company or any similar proposal. However, the Company has subsequently learned, following June 26, 2020, based on public filings, that Senator and Cannae had begun discussing an investment partnership to opportunistically trade in marketable securities as early as October 2019 and that from at least as early as February into late June of 2020, Senator and Cannae were acquiring shares of Common Stock as well as total return swaps, over-the-counter forward purchase contracts and cash-settled swaps with respect to the Common Stock in a manner seemingly intended to avoid disclosure and detection.
On June 10 2020, Cannae announced the pricing of an underwritten public offering of approximately $455 million of common stock. The June 10, 2020 prospectus supplement with respect to the offering (the “Prospectus”) stated that the use of proceeds was “to fund future acquisitions or investments, including potential investments in existing portfolio companies, and for general corporate purposes.” The Prospectus did not mention that such funds could be utilized for the acquisition of CoreLogic then being pursued secretly by Senator and Cannae.
On June 25, 2020, with no knowledge of Senator and Cannae’s actions or plans, the Company issued a press release increasing its guidance for the second quarter of fiscal year 2020 to reflect the Company’s expectations for strong second quarter financial performance. Following the issuance of the press release after the market closed, the Company’s stock price increased approximately 9% to $57.80 in after-hours trading.
Early on the morning of June 26, 2020, Senator and Cannae, without contacting the Company in advance, publicly issued the Acquisition Proposal Press Release, announcing the Acquisition Proposal to acquire the Company at a price of $65.00 in cash per share of Common Stock. In the Acquisition Proposal Press Release, Senator and Cannae disclosed for the first time that they had jointly accumulated an aggregate economic interest in the Company equivalent to approximately 15% of the outstanding Common Stock, which they later disclosed in the Senator and Cannae 13D to consist of 8.2% of the Company’s outstanding Common Stock, shares of Common Stock underlying total return swaps or over-the-counter forward contracts equal to 1.8% of the outstanding Common Stock and cash-settled swaps referencing 5% of the outstanding Common Stock. Senator and Cannae failed to note that when they announced their ownership position in the Acquisition Proposal Press Release, they did not own the percentage claimed, which only became discernible when in the Senator and Cannae 13D, filed on June 30, 2020, Senator and Cannae were required to disclose recent trades which showed that approximately 3% (consisting of shares of Common Stock and over-the-counter forward contracts to acquire shares of Common Stock) of the 15% economic interest that they claimed to own was actually acquired after they issued the Acquisition Proposal Press Release at prices as high as $68.27 per share.
Later in the day on June 26, 2020, the Company received a letter from Senator and Cannae containing the Acquisition Proposal, and the Company issued a statement that the Board would carefully review the Acquisition Proposal to determine the course of action it believed was in the best interests of the Company and its stockholders.
On June 27, 2020 and July 3, 2020, the Board held meetings to discuss, with the assistance of the Company’s independent financial advisor, Evercore Inc. (“Evercore”), and youits outside legal counsel, Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), the Acquisition Proposal and potential next steps.
On July 1, 2020, the Company received notice that Senator Focused Strategies LP, an affiliate of Senator, filed, on June 29, 2020, for HSR approval to acquire additional shares of Common Stock with a value, together
with shares already owned, of up to $940.1 million, representing less than a majority of our Common Stock. The HSR waiting period for such Senator fund to acquire additional shares of Common Stock would have expired on July 29, 2020, unless the FTC issued a request for additional information, commonly referred to as a second request. The Company is not aware of such HSR waiting period having expired or been terminated. In addition, the Company is not aware of Cannae making a similar HSR filing.
On July 6, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to receive an update on the Company’s business and results and to discuss, among other things, (i) updating the Company’s fiscal year 2020 guidance and providing guidance for fiscal year 2021 and fiscal year 2022, (ii) increasing the Company’s share repurchase authorization, (iii) the Acquisition Proposal and (iv) the adoption of a short-term stockholder rights plan. At the meeting, the Board unanimously (A) determined to update the Company’s guidance for fiscal year 2020 and to provide guidance for fiscal year 2021 and fiscal year 2022 to give additional transparency to stockholders regarding the strength and direction of the Company’s business and (B) approved an increase in the Company’s share repurchase authorization to $1 billion reflecting the strength of the Company’s business and intention to return a significant portion of free cash flow to stockholders. At the meeting the Board, following consultation with Evercore and Skadden, unanimously determined that the Acquisition Proposal (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. The Board did, however, authorize management to meet with Senator and Cannae to learn more about the Acquisition Proposal. The Board also adopted a short-term stockholder rights plan.
On the morning of July 7, 2020, the Company issued a press release announcing (i) the Board’s determination that the Acquisition Proposal (A) significantly undervalues the Company, (B) raises serious regulatory concerns and (C) is not in the best interests of the Company’s stockholders, (ii) the increase in the Company’s share repurchase authorization to $1 billion, and (iii) the adoption of a short-term stockholder rights plan. The Company separately issued a press release on July 7, 2020 updating the Company’s guidance for fiscal year 2020 and providing guidance for fiscal year 2021 and fiscal year 2022.
On July 7, 2020, Senator and Cannae issued a press release announcing, among other things, that they were prepared, if the Company did not engage with Senator and Cannae regarding the Acquisition Proposal, to call a special meeting of Company stockholders to replace the Board as early as July 28, 2020.
On July 14, 2020, members of the Board and senior management of the Company met by video conference with representatives of Senator and Cannae to learn more about the Acquisition Proposal and to seek additional information regarding (i) Senator and Cannae’s views on value and willingness to raise its offer price, (ii) Senator and Cannae’s financing and (iii) potential regulatory concerns raised by the Acquisition Proposal. The parties discussed, among other things, the Company’s value drivers, why the Board believed the Acquisition Proposal significantly undervalues the Company, regulatory concerns raised by the Acquisition Proposal and financing of a transaction. Senator and Cannae did not increase the value of the Acquisition Proposal notwithstanding the Company’s public disclosure of multi-year financial projections and increased guidance since the date the Acquisition Proposal was made public. Senator and Cannae also declined to disclose the sources or status of their equity financing, and provided no additional information regarding their debt financing other than that the non-binding and highly conditional Highly Confident Letter had been provided by BofA Securities. Nonetheless, Senator and Cannae requested access to confidential and competitively sensitive non-public due diligence information. The Company noted that it had already publicly disclosed a significant amount of new information in its updated guidance for fiscal year 2020 and its forecasts for fiscal year 2021 and fiscal year 2022 to support Senator and Cannae raising the price offered in the Acquisition Proposal and responded that it would raise the request to conduct non-public due diligence with the Board.
On July 14, 2020, the Company received written notification from the FTC that the FTC was conducting an investigation of the Acquisition Proposal, and requesting that the Company produce information in connection with that investigation.
On July 15, 2020, representatives of Skadden and representatives of Cannae’s legal counsel at Weil, Gotshal & Manges LLP (“Weil”) and Senator’s legal counsel at Cadwalader, Wickersham & Taft LLP (“Cadwalader”) spoke via conference call regarding the regulatory considerations raised by the Acquisition Proposal.
Also on July 15, 2020, representatives of Weil sent to representatives of Skadden and Evercore a non-binding and highly conditional Highly Confident Letter from BofA Securities to Cannae, dated June 28, 2020. The Highly Confident Letter relates to, but undertakes no commitment or obligation to provide, credit facilities in an amount of up to $3.6 billion, or approximately half of the funds required to complete the Acquisition Proposal. The Highly Confident Letter stated that it is not intended to be and should readnot be construed as (or relied upon as) an offer or commitment by BofA Securities or any of its affiliates to provide, extend or arrange any financing, and creates no obligations or liability on BofA Securities in connection therewith, and that any offer or commitment would in any event be subject to BofA Securities’ internal committee approval process in addition to numerous conditions, including (i) that the entirestructure, terms and conditions, and documentation, including the principal economic terms and structure for the proposed acquisition, are consistent with what has been described to BofA Securities, and the documentation for the proposed financing is satisfactory to BofA Securities; (ii) the receipt of all consents required to consummate the proposed acquisition; (iii) the receipt of customary syndication documents, including audited, unaudited and pro forma financial statements, and other customary marketing materials and a customary marketing period for the proposed financing; (iv) Cannae’s full cooperation with respect to the syndication of the proposed financing and BofA Securities having a customary time to syndicate the proposed financing; (v) absence of any material adverse change affecting the Company, Cannae or their respective businesses, or in the business, operations, assets, liabilities, results of operations, condition (financial or otherwise) of the Company and its subsidiaries and Cannae and its subsidiaries, in each case, since the date of the audited financial information delivered to BofA Securities; and (vi) satisfactory customary due diligence. The letter stated that obtaining financing for the proposed acquisition is inherently subject to uncertainties and contingencies beyond BofA Securities’ control and that, accordingly, there can be no assurance that the arrangement of the proposed financing will in fact be accomplished.
On July 17, 2020, Senator and Cannae sent a letter to the Company indicating that it would only increase the price of the Acquisition Proposal after conducting due diligence that demonstrates a higher price was justified.
On July 17, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to discuss, among other things, the Acquisition Proposal and Senator and Cannae’s request to conduct non-public due diligence. The Board reviewed the request in light of the value and other terms proposed by Senator and Cannae, which the Board had previously unanimously determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders. The Board noted that since the Acquisition Proposal was initially announced the Company had provided Senator and Cannae significant additional transparency into the strength and direction of the Company’s business when it publicly issued increased guidance for fiscal year 2020 and publicly provided financial projections for fiscal year 2021 and fiscal year 2022, and that Senator and Cannae had insight into the Company’s business through Cannae’s and its associated companies’, including Black Knight, Inc. and Fidelity National Financial, Inc., knowledge of the industry, and had sufficient information to increase the price of the Acquisition Proposal but had not done so. At the meeting, the Board determined not to provide non-public information to Senator and Cannae unless they first raised their offer to a level that provided appropriate value to the Company’s stockholders reflecting CoreLogic’s strong multi-year outlook. Thereafter, the Company communicated the Board’s decision to Senator and Cannae and, on July 20, 2020, issued a press release disclosing the Board’s decision.
On July 22, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to discuss the release of earnings for the second quarter of fiscal year 2020, the provision of third quarter guidance and updated full year guidance for fiscal year 2020, the Company’s quarterly dividend, timing of potential share repurchases, and the planned divestiture of the Company’s tenant screening and credit solution businesses.
On July 23, 2020, the Company issued its earnings for the second quarter of fiscal year 2020 reflecting strong financial results for the quarter and announced, among other things, guidance for the third quarter of fiscal year 2020, further increased full-year guidance for fiscal year 2020 and a 50% increase in its quarterly dividend to $0.33 per share.
On July 24, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to receive an update on the second quarter of fiscal year 2020 earnings call and matters relating to the Acquisition Proposal.
On July 29, 2020, Senator and Cannae issued a press release stating that it had initiated a process to request that the Board call a special meeting of stockholders to elect the Senator and Cannae Nominees to the Board.
On July 29, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, at which they discussed, among other things, the announcement that Senator and Cannae had initiated a process to request that the Board call a special meeting of stockholders and other matters relating to the Acquisition Proposal.
On July 30, 2020, Senator delivered a letter (the “Record Date Request Letter”) to CoreLogic’s Secretary to request that a record date be set by the Board for the purpose of determining the Company’s stockholders entitled to deliver to Senator the requisite stockholder request cards necessary to request that the Board call a special meeting of the Company’s stockholders for the purposes described in the Record Date Request Letter (the “Request Solicitation”).
On July 31, 2020, Senator and Cannae filed a preliminary version of the Senator and Cannae Solicitation Statement with the SEC, with respect to the Request Solicitation.
Also on July 31, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to discuss the Record Date Request Letter, the Senator and Cannae Solicitation Statement, a potential special meeting of stockholders and the Acquisition Proposal.
On August 4, 2020, Skadden sent a letter to Cadwalader, seeking clarification regarding Senator’s director removal proposal set forth in the Record Date Request Letter and the Senator and Cannae Solicitation Statement.
On August 5, 2020, Cadwalader responded to Skadden that Senator would amend its director removal proposal to propose the removal of nine current directors and any director appointed after June 18, 2020 and until the date of the Special Meeting (other than the Senator and Cannae Nominees) without stockholder approval.
On August 6, 2020, Senator and Cannae filed with the SEC (i) an amendment to the Senator and Cannae Solicitation Statement and (ii) an amendment to the Senator and Cannae Schedule 13D.
On August 7, 2020, the Board held a meeting, with representatives of Evercore and Skadden present, to discuss the Record Date Request Letter, including certain deficiencies with respect to the proposals set forth in such letter, timing considerations relating to a potential special meeting of stockholders and potential responses by the Board to the Record Date Request Letter.
Also on August 7, 2020, the Company received a Civil Investigative Demand and subpoena from the FTC in connection with the FTC’s investigation into Senator and Cannae, requiring that the Company produce information in connection with that investigation.
On August 9, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to discuss the Record Date Request Letter and determined to call the Special Meeting, without requiring Senator to deliver requests from the holders of 10% of the outstanding Common Stock, in order to allow the Company’s
stockholders to consider and vote upon the Stockholder Proposals. The Board also determined to hold the Special Meeting on November 17, 2020, to set August 19, 2020 as the record date for the Request Solicitation and to engage First Coast Results, Inc. to serve as the Inspector of Elections at the Special Meeting. Later that day, the Company issued a press release announcing the Board’s decision to call the Special Meeting and sent a letter to Senator regarding the Board’s decision to call the Special Meeting as well as detailing certain deficiencies in the Record Date Request Letter.
On August 10, 2020, representatives of Cadwalader and Skadden spoke via conference call, during which, among other things, representatives of Cadwalader proposed that Senator and the Company enter into a letter agreement pursuant to which Senator would withdraw the Request Solicitation in exchange for imposing various obligations on the Company with respect to the Special Meeting, including that the Company hold the Special Meeting on November 17, 2020 (the “Proposed Letter Agreement”).
On August 12, 2020, Cadwalader sent Skadden a draft of the Proposed Letter Agreement.
On August 13, 2020, Senator and Cannae filed an amendment to the Senator and Cannae Solicitation Statement with the SEC.
On August 14, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to receive an update on developments relating to the Acquisition Proposal and the Request Solicitation and to discuss Senator’s Proposed Letter Agreement. After careful consideration, the Board concluded that entering into the Proposed Letter Agreement was unnecessary in light of the Board having called the Special Meeting for stockholders to consider and vote upon the Stockholder Proposals.
On August 14, 2020, Skadden notified Cadwalader that the Board had carefully considered the Proposed Letter Agreement and had concluded that the Proposed Letter Agreement and the Request Solicitation were not necessary in light of the Board having called the Special Meeting in order for stockholders to consider and vote upon the Stockholder Proposals. On the same day, the Company also issued a press release announcing the Board’s determination that the Proposed Letter Agreement was unnecessary and additional details regarding the Stockholder Proposals and the Special Meeting.
On August 18, 2020, Senator and Cannae filed an amendment to the Senator and Cannae Solicitation Statement with the SEC.
On August 19, 2020, Senator and Cannae filed a definitive version of the Senator and Cannae Solicitation Statement with the SEC.
On August 21, 2020 and August 28, 2020, the Board held meetings, with representatives from Evercore and Skadden present, to receive an update on developments relating to the Acquisition Proposal and the Request Solicitation.
On August 31, 2020, notwithstanding that on August 9, 2020 the Company had already called the Special Meeting, Senator delivered a letter (the “Special Meeting Request Letter”) to CoreLogic’s Secretary to request that the Board call a special meeting of the Company’s stockholders in order for stockholders to consider and vote upon certain proposals set forth in the Special Meeting Request Letter. Concurrently with the Special Meeting Request Letter, Senator also delivered a notice of its intent to nominate the Senator and Cannae Nominees for appointment to the Board at the Special Meeting.
Also on August 31, 2020, Senator and Cannae filed an amendment to the Senator and Cannae Schedule 13D with the SEC.
On September 4, 2020, the Board held a meeting, with representatives from Evercore and Skadden present, to receive an update on developments relating to the Acquisition Proposal, the Request Solicitation and the
Special Meeting Request Letter and to consider certain matters relating to the Special Meeting. At the meeting, the Board unanimously determined (i) to set September 18, 2020 as the Record Date for the Special Meeting, (ii) to approve the filing of a preliminary proxy statement carefullywith respect to the Special Meeting, and (iii) that the Stockholder Proposals include the business set forth by Senator in the Special Meeting Request Letter, other than a proposal set forth therein which is not a proper subject for stockholder action and a precatory proposal which was not properly made pursuant to the Bylaws. As a result, the Board determined, in accordance with the Bylaws, not to call the additional special meeting requested by Senator as the business requested by Senator that was properly requested was already included in the business of the Special Meeting.
Later that day, the Company sent a letter to Senator advising it of the Board’s determinations with respect to the Special Meeting Request Letter and offering to Senator, even though not properly made by Senator, to call a special meeting solely to consider and vote on Senator’s precatory proposal requesting that the Board appoint the Senator and Cannae Nominees when stockholders have already voted not to remove the Incumbent Directors or when there are not vacancies on the Board to be filled.
Also on September 4, 2020, the Company filed a preliminary proxy statement with respect to the Special Meeting.
On September 8, 2020, Senator and Cannae filed a preliminary proxy statement with respect to the Special Meeting.
On September 11, 2020, the Board held a meeting, with representatives of Evercore and Skadden present, to receive an update on developments relating to the Acquisition Proposal and the Special Meeting.
On September 14, 2020, the Company filed an amendment to its preliminary proxy statement with respect to the Special Meeting.
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
Q: | Why am I receiving this Proxy Statement? |
A: | The Company is calling the Special Meeting voluntarily for the purpose of considering and voting on the Stockholder Proposals. |
You are receiving this Proxy Statement as a stockholder of CoreLogic as of the close of business on the Record Date. As further described below, we request that you promptly use the enclosed WHITE Proxy Card to vote, by internet, by telephone, or by mail, in the event you desire to:
1. | express your opposition to, and vote AGAINST, all of the Stockholder Proposals, even if you have not already submitted a proxy to Senator or Cannae (or have no intention to do so); or |
2. | revoke any proxy that you may have delivered to Senator or Cannae to vote on the Stockholder Proposals. |
The Board unanimously recommends that you vote today AGAINST all of the Stockholder Proposals on the enclosed WHITE Proxy Card.
Q: | When and where will the Special Meeting be held? |
A: | The Special Meeting is scheduled to be held on Tuesday, November 17, 2020 at [●] [a.m.]/[p.m.], local time, at [●]. |
Q: | Will the Special Meeting be held in person? |
A: | We currently plan to hold the Special Meeting in person. However, as part of our contingency planning regarding the novel coronavirus (COVID-19), we are preparing for the possibility that the Special Meeting may be held by means of remote communication (sometimes referred to as a “virtual” meeting). If we take this step, we will announce the decision to do so as soon as practicable before the Special Meeting through a press release and public filing with the SEC, and details will be available for viewing under the “Investor Relations” section of our website at https://investor.corelogic.com. We recommend that you monitor this website for updated information and registration details in the event we determine to convert to a virtual meeting and you elect to participate remotely. |
Q: | Who is soliciting my vote? |
A: | In this Proxy Statement, the CoreLogic Board of Directors is soliciting your vote. |
Giving us your proxy means that you authorize the proxy holders identified on the WHITE Proxy Card to vote your shares at the Special Meeting in the manner you direct. You may also abstain from voting. If you sign and return the enclosed WHITE Proxy Card but do not specify how your shares are to be voted, your shares will be voted in accordance with the recommendations of the Board.
ANNUAL MEETING INFORMATION AND STOCKHOLDER VOTING MATTERS
Q: | What does the Board recommend? |
Your Board has unanimously determined that the Stockholder Proposals are not in the best interests of the Company and its stockholders and that stockholders should vote AGAINST all of the Stockholder Proposals.
CoreLogic held its 2020 Annual Meeting on April 28, 2020, less than five months ago, where our stockholders elected each member of the current Board, with the exception of Pamela Patenaude who joined the Board in June 2020. Each of the nine Incumbent Directors that Senator and Cannae are proposing to
remove brings valuable experience and expertise to your Board. The unique qualifications of each director, including his or her experience, expertise, attributes and skills, led to our Board’s recommendation that each should serve as a member of the Board. For more information on each director’s background, please see the section of this Proxy Statement entitled “Directors of the Company.”
While the Company’s existing corporate governance policies provide multiple avenues for stockholders to express their views, the Board does not believe that removing a majority of the Board’s recently elected directors and replacing them with directors hand-picked by Senator and Cannae is in the best interests of the Company or its stockholders. Rather, the Board believes that stockholder interests would be best served by allowing your duly elected directors to continue implementing the Company’s strategic priorities and working to enhance stockholder value.
The Stockholder Proposals seek to remove nine Incumbent Directors serving on CoreLogic’s experienced independent Board (with only one management director, our Chief Executive Officer, on the Board) and replace them with the nine hand-picked Senator and Cannae Nominees. If appointed, the Senator and Cannae Nominees would be positioned to consider and negotiate an acquisition proposal with Senator and Cannae, the same entities that nominated and are soliciting votes for them. This would allow these hand-picked Senator and Cannae Nominees to, subject to their fiduciary duties, facilitate the acquisition of the Company by Senator and Cannae at a price and on terms comparable to the Acquisition Proposal that your duly elected, highly-qualified and independent Board has determined (i) significantly undervalues the Company, (ii) raises serious regulatory concerns and (iii) is not in the best interests of the Company’s stockholders.
As a result, your Board unanimously recommends that you use the enclosed WHITE Proxy Card to vote via the internet or by telephone in accordance with the instructions on the WHITE Proxy Card or by signing, dating and returning the WHITE Proxy Card in the postage-paid envelope provided, as follows:
1. | AGAINST the Repeal Proposal (see pages [●]-[●]); |
2. | AGAINST the removal of all of the Incumbent Directors named in the Director Removal Proposal (see pages [●]-[●]); |
3. | AGAINST the nomination for appointment of all of the Senator and Cannae Nominees named in the Nomination Proposal (see pages [●]-[●]); and |
4. | AGAINST the Bylaw Amendment Proposal (see pages [●]-[●]). |
Q: | What vote is necessary to approve each matter to be voted on at the Special Meeting? |
A: | The following table provides a summary of the voting criteria for the Board’s voting recommendations for the matters on the agenda for the Special Meeting: |
| Proposal |
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| Board’s Voting
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1. The Repeal Proposal | ||||||||||
“AGAINST” or “ABSTAIN” from voting or “FOR” |
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| AGAINST |
Mailing Date:This proxy statement and form of proxy are first being sent or made available to our stockholders on or about March 19, 2020.
CORELOGIC AT A GLANCE
We delivered strong operating and financial results in 2019. Significant strategic and operational highlights included:
Enhancing business mix by increasing contributions from higher margin platform and recurring revenue streams and exit/wind down of non-core mortgage technology and default services units.
Increasing non-US mortgage volume sensitive solutions to almost 40% of total revenues, reflecting strong progress toward long-term goals.
Acquiring and/or integrating important business streams to augment and grow our insurance and spatial solutions, tax services and real estate marketing services operations.
Completing the transformation of our appraisal management company (“AMC”) operation to enhance future growth and profitability.
Investing in new technology and data-related capabilities with a focus on data structures, visualization, technology platforms and advanced automation techniques.
Progressing the migration of our technology stack to the Google Cloud.
Exceeding our cost reduction targets through a reduction in organizational complexity, refining and automating work processes, and shrinking our real estate footprint, all of which contributed to expanded operating margins.
Notable 2019 financial accomplishments include:
Revenues of $1.762 billion, an increase of 3% before the impact of foreign currency translation, our AMC transformation and the exit/wind down of non-core mortgage technology and default services units.
Adjusted EBITDA increased to $498 million, an increase of $5 million above 2018 levels.
Adjusted earnings per share (“EPS”) of $2.83 grew by 4% compared to the prior year.
Adjusted EBITDA margins up 70 basis points to 28%; adjusted EBITDA margin exceeded 30% for the second half of 2019, including margin expansion of approximately 500 basis points in the fourth quarter.
Cost management and productivity benefits of more than $20 million.
Including heightened reinvestment in growth generating initiatives and productivity programs, free cash flow (“FCF”) of $257 million was generated for the twelve months ended December 31, 2019.
Repurchased approximately 3% of our common shares and reduced debt levels by $110 million.
Initiated and declared our first quarterly dividend in December 2019 and paid in January 2020.
Company share price increased more than 30%.
Please seeAppendix A for a detailed reconciliation of adjusted EBITDA, adjusted EPS and FCF to the most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”).
BOARD OF DIRECTOR NOMINEES
The following table provides summary information about each director nominee as of the date of this proxy statement. All of the directors possess strength of character, inquiring and independent minds, mature judgment and a deep commitment to our success.
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2. The Director Removal Proposal | Affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company | COUNTED as votes AGAINST | NO | |||||||||||||||||||
3. The Nomination Proposal | ||||||||||||||||||||||
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4. The Bylaw Amendment Proposal | AGAINST |
Q: | If I have already voted by proxy in favor of the Stockholder Proposals, is it too late for me to change my mind? |
A: | No. To change your vote, simply vote via the internet or by telephone in accordance with the instructions on the enclosed WHITE Proxy Card, or sign, date and return the WHITE Proxy Card in the postage-paid envelope provided. We strongly urge you to revoke any [●] proxy card you may have returned to Senator or Cannae and to vote AGAINST all of the Stockholder Proposals. Only your latest dated proxy will count at the Special Meeting. |
Q: | How can I revoke my previously submitted proxy? |
A: | You may change or revoke your previously submitted proxy at any time before the Special Meeting or, if you attend the Special Meeting, by voting by ballot at the Special Meeting. |
If you hold your shares as a record holder, you may change or revoke your proxy in any one of the following ways:
by re-voting at a subsequent time by internet or by telephone following the instructions on the enclosed WHITE Proxy Card; |
2. | by signing a new proxy card with a date later than your previously delivered proxy and submitting it following the instructions on the enclosed WHITE Proxy Card; |
3. | by delivering a signed revocation letter to Francis Aaron Henry, the Company’s Corporate Secretary, at the Company’s mailing address on the first page of this Proxy Statement before the Special Meeting, which states that you have revoked your proxy; or |
| 4. | by attending the Special Meeting and voting by ballot. Attending the Special Meeting in person will not in and of itself revoke a previously submitted proxy. You must specifically vote by ballot at the Special Meeting in order for your previous proxy to be revoked.
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Please note that participants in our 401(k) Plan may not vote their plan shares by ballot at the Special Meeting and in order to vote their shares, must provide voting instructions to Fidelity Management Trust Company (“Fidelity”) by [●], 2020 at [●] [a.m.]/[p.m.], [Eastern time]. See “How are my shares in the Company’s 401(k) Plan voted?” in this section of the Proxy Statement for more information.
If you have previously voted using a [●] proxy card sent to you by Senator or Cannae, you may change your vote and revoke your prior proxy by voting via the internet or by telephone following the instructions on the enclosed WHITE Proxy Card, or by signing, dating and returning the WHITE Proxy Card in the postage-paid envelope provided.
Your latest dated proxy card, internet or telephone vote is the one that is counted.
If your shares are held in street name by a broker, bank or other nominee, you may change your voting instructions by following the instructions of your broker, bank or other nominee.
| Q: | Will my shares be voted if I do nothing?
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* Denotes the year that director joined our board of directors (“Board”) pursuant to the separation from our predecessor, The First American Corporation (“FAC”), in 2010. Messrs. Chatham and O’Brien joined the predecessor FAC board in 1989 and 2008, respectively, and Ms. Widener joined the predecessor FAC board in 2006.
A: | If your shares of our Common Stock are held in registered name, you must sign and return a proxy card (or vote by telephone or via the internet by following the instructions on your proxy card) in order for your shares to be voted, unless you attend the Special Meeting and vote by ballot. If your shares of our Common Stock are held in street name and you do not instruct your broker, bank or other nominee how to vote your shares, then, because all of the Stockholder Proposals are “non-routine matters,” your broker or other nominee would not have discretionary authority to vote your shares on the Stockholder Proposals. If your shares of our Common Stock are held in street name, your broker, bank or other nominee has enclosed a WHITE voting instruction form with this Proxy Statement. We strongly encourage you to authorize your broker, bank or other nominee to vote your shares AGAINST all of the Stockholder Proposals by following the instructions provided on the WHITE voting instruction form. |
Q: | How are my shares in the Company’s 401(k) Plan voted? |
A: | For those stockholders who hold shares pursuant to the 401(k) Plan, Fidelity acts as trustee for shares held in the 401(k) Plan. The governing documents of the 401(k) Plan require Fidelity, as trustee, to vote the shares as directed by the plan participants for whose benefit the shares are held. Fidelity will use an independent third party to tabulate the voting directions of all participants who provide such directions to Fidelity. Neither the tabulator nor Fidelity will provide the individual participant voting directions to the Company, unless otherwise required by law. Shares of Common Stock for which no direction is received by Fidelity from the participants by [●], 2020 at [●] [a.m.]/[p.m.], [Eastern time], and any unallocated shares of Common Stock, will be voted in the same proportion as are the shares for which directions are received by that time. |
Q: | Who should I call if I have questions about the Special Meeting? |
A: | If you have any questions or need assistance in voting your shares, please contact: |
AC Audit Committee
SC501 Madison Avenue, 20th Floor Strategic Planning
New York, New York 10022
TOLL-FREE at (877) 750-9498 (from the U.S. and Acquisition Committee
CCCanada) Compensation Committee
NCor +1 (412) 232-3651 (from other locations) Nominating & Corporate Governance Committee
Audit Committee Financial Expert
CORPORATE GOVERNANCE HIGHLIGHTSSPECIAL MEETING PROCEDURES
Special Meeting Admission
Only the Company’s stockholders as of the close of business on the Record Date may attend the Special Meeting. If you are a stockholder of record you must bring proof of identification in order to be admitted to the Special Meeting. If you hold your shares through a broker, bank or other nominee, you will need to provide proof of ownership as of the close of business on the Record Date—for example, a copy of a brokerage statement showing your share ownership—and proof of identification in order to be admitted to the Special Meeting. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Special Meeting.
We are committedcurrently plan to sound and effective corporate governance practices that servehold the long-term interestsSpecial Meeting in person. However, as part of our stockholders. contingency planning regarding the novel coronavirus (COVID-19), we are preparing for the possibility that the Special Meeting may be held by means of remote communication (sometimes referred to as a “virtual” meeting). If we take this step, we will announce the decision to do so as soon as practicable before the Special Meeting through a press release and public filing with the SEC, and details will be available for viewing under the “Investor Relations” section of our website at https://investor.corelogic.com. We recommend that you monitor this website for updated information and registration details in the event we determine to convert to a virtual meeting and you elect to participate remotely.
Who Can Vote, Outstanding Shares
Record holders of our Common Stock as of the close of business on September 18, 2020, the Record Date, may vote at the Special Meeting. As of the Record Date, there were [●] shares of our Common Stock outstanding, each entitled to one vote.
How You Can Vote
You can vote by proxy in one of three ways:
1. | by voting over the internet using the website indicated on the WHITE Proxy Card; |
2. | by telephone using the toll-free number on the WHITE Proxy Card; or |
3. | by signing, dating and returning the enclosed WHITE Proxy Card in the postage-paid envelope provided. |
You may also vote by attending the Special Meeting and voting by ballot.
Please note that participants in our 401(k) Plan may not vote their plan shares by ballot at the Special Meeting and in order to vote their shares, must provide voting instructions to Fidelity by [●], 2020 at [●] [a.m.]/[p.m.], [Eastern time]. See “How are my shares in the Company’s 401(k) Plan voted?” in the section of this Proxy Statement entitled “Questions and Answers About the Special Meeting” for more information.
If your shares of our Common Stock are held in street name and you do not instruct your broker, bank or other nominee how to vote your shares, then, because all of the Stockholder Proposals are “non-routine matters,” your broker or other nominee would not have discretionary authority to vote your shares on the Stockholder Proposals. If your shares of our Common Stock are held in street name, your broker, bank or other nominee has enclosed a WHITE voting instruction form with this Proxy Statement. We strongly encourage you to authorize your broker or other nominee to vote your shares AGAINST all of the Stockholder Proposals by following the instructions provided on the WHITE voting instruction form.
YOUR VOTE IS VERY IMPORTANT. You should submit your proxy via the internet or by telephone by following the instructions on the WHITE Proxy Card, or by signing, dating and returning the WHITE Proxy Card
in the postage-paid envelope provided—even if you plan to attend the Special Meeting. If you properly and timely submit your proxy, the individuals named as your proxy holders will vote your shares as you have directed.
All shares entitled to vote and represented by properly submitted proxies (including those submitted via the internet, by telephone and by mail) received before the polls are closed at the Special Meeting, and not revoked or superseded, will be voted at the Special Meeting in accordance with the instructions indicated on those proxies. If no direction is indicated on a WHITE Proxy Card, such shares will be voted by the proxy holders named on the enclosed WHITE Proxy Card according to the recommendation of our Board AGAINST all of the Stockholder Proposals.
Voting by Ballot
If you plan to attend and desire to vote at the Special Meeting, you will be provided with a ballot at the Special Meeting. Please note that if your shares of Common Stock are held of record by a broker, bank or other nominee, and you decide to attend and vote at the Special Meeting, your vote by ballot at the Special Meeting will not be effective unless you present a legal proxy, issued in your name from your broker, bank or other nominee. Please also note that as mentioned above, participants in our 401(k) Plan may not vote their plan shares by ballot at the Special Meeting and in order to vote their shares, must provide voting instructions to Fidelity by [●], 2020 at [●] [a.m.]/[p.m.], [Eastern time]. See “How are my shares in the Company’s 401(k) Plan voted?” in the section of this Proxy Statement entitled “Questions and Answers About the Special Meeting” for more information. Even if you plan to attend the Special Meeting, we encourage you to submit your proxy to vote your shares in advance of the Special Meeting.
If you are a stockholder of record you must bring proof of identification in order to be admitted to the Special Meeting. If you hold your shares through a broker, bank or other nominee, you will need to provide proof of ownership as of the close of business on the Record Date—for example, a copy of a brokerage statement showing your share ownership—and proof of identification in order to be admitted to the Special Meeting.
No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Special Meeting. There will be security present at the Special Meeting.
How You May Revoke or Change Your Vote
You may change or revoke your previously submitted proxy at any time before the Special Meeting or, if you attend the Special Meeting, by voting by ballot at the Special Meeting. If you hold your shares as a record holder, you may change or revoke your proxy in any one of the following ways:
1. | by re-voting at a subsequent time by internet or by telephone following the instructions on the enclosed WHITE Proxy Card; |
2. | by signing a new proxy card with a date later than your previously delivered proxy and submitting it following the instructions on the enclosed WHITE Proxy Card; |
3. | by delivering a signed revocation letter to Francis Aaron Henry, the Company’s Corporate Secretary, at the Company’s address above before the Special Meeting, which states that you have revoked your proxy; or |
4. | by attending the Special Meeting and voting by ballot. Attending the Special Meeting will not in and of itself revoke a previously submitted proxy. You must specifically vote by ballot at the Special Meeting for your previous proxy to be revoked. |
If you have previously signed a [●] proxy card sent to you by Senator or Cannae, you may change your vote and revoke your prior proxy by voting via the internet or by telephone following the instructions on the enclosed WHITE Proxy Card, or by signing and dating the WHITE Proxy Card and returning it in the postage-paid envelope provided. Your latest dated proxy card, internet or telephone vote is the one that is counted.
If your shares are held in the name of a broker, bank or other nominee, you may change your voting instructions by following the instructions of your broker, bank or other nominee.
Quorum and Required Vote
The Board diligently exercises its oversight responsibilities withinspector of elections appointed for the Special Meeting will tabulate votes cast by proxy or by ballot at the Special Meeting. The inspector of elections will also determine whether a quorum is present. In order to constitute a quorum for the conduct of business at the Special Meeting, a majority of the outstanding shares of Common Stock entitled to vote at the Special Meeting must be present or represented by proxy at the Special Meeting. Shares that abstain from voting on any proposal will be treated as shares that are present and entitled to vote at the Special Meeting for purposes of determining whether a quorum is present.
With respect to shares held in street name, your broker, bank or other nominee generally has the discretionary authority to vote uninstructed shares on “routine” matters, but cannot vote such uninstructed shares on “non-routine” matters. A “broker non-vote” will occur if your broker, bank or other nominee cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter or because your broker, bank or other nominee chooses not to vote on a matter for which it does have discretionary voting authority. We do not believe that there will be any broker non-votes at the Special Meeting because we do not believe that any of the Stockholder Proposals will qualify for discretionary voting treatment by a broker. As a result, broker non-votes will not be counted for purposes of determining whether a quorum is present.
Proposal 1: (Repeal Proposal). The approval of Proposal 1 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against this proposal.
Proposal 2: (Director Removal Proposal). The approval of Proposal 2 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against this proposal.
Proposal 3: (Nomination Proposal). The approval of Proposal 3 requires the affirmative vote of a majority of shares entitled to vote thereon, present in person or represented by proxy at the Special Meeting. Abstentions will have the same effect as votes against the proposal. Broker non-votes, if any, will have no effect on this proposal as brokers are not entitled to vote on such proposal in the absence of voting instructions from the beneficial owner.
Proposal 4: (Bylaw Amendment Proposal). The approval of Proposal 4 requires the affirmative vote of the holders of a majority in voting power of all issued and outstanding shares entitled to vote at an election of directors of the Company. Abstentions and broker non-votes, if any, will have the same effect as votes against this proposal.
Results of Special Meeting
The Company has retained First Coast Results, Inc. to serve as independent inspector of elections in connection with the Special Meeting. The Company intends to notify stockholders of the results of the Special Meeting by issuing a press release, which it will also file with the SEC as an exhibit to a Current Report on Form 8-K.
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the SEC, each of the Company’s businessdirectors and affairs consistentcertain of the Company’s officers and employees are deemed to be “participants” in this proxy solicitation. For certain required information about the Company’s directors, officers and employees who are deemed to be participants in the solicitation, please see Appendix A to this Proxy Statement, entitled “Additional Information Regarding Participants in this Solicitation.”
Cost and Method of this Solicitation
The cost of this proxy solicitation will be borne by the Company. The Company estimates that the total expenditures relating to this solicitation (other than salaries and wages of our officers and regular employees), but excluding costs of litigation related to the solicitation (if any), will be approximately $[●], of which $[●] has been incurred as of the date of this Proxy Statement. Our directors, officers and employees may solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. We will pay these directors, officers and employees no additional compensation for these services. We will reimburse banks, brokers and other nominees for their reasonable, out-of-pocket expenses incurred in forwarding this Proxy Statement and related materials to, and obtaining instructions relating to such materials from, beneficial owners of Common Stock.
The Company has retained Innisfree M&A Incorporated (“Innisfree”) as its proxy solicitor. Innisfree has advised the Company that approximately [●] of its employees will be involved in the solicitation of proxies by Innisfree on behalf of the Company. Innisfree will solicit proxies in person, by mail, telephone, facsimile and email, or by other electronic means. Under our agreement with Innisfree, Innisfree will receive an estimated fee of $[●] plus reimbursement of its reasonable, out-of-pocket expenses for its services. In addition, Innisfree and certain related persons will be indemnified against certain liabilities arising out of or in connection with the highest principlesengagement.
The following are the names and ages of business ethicsour directors, the year they became directors, their principal occupations or employment for at least the past five years and corporate governance.certain of their other directorships.
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STOCKHOLDER ENGAGEMENT PROGRAM
The Board and executive management are committed to engaging with our stockholders. Throughout the year, executive management proactively and periodically meets with current and prospective stockholders to discuss our strategic priorities, operational performance, and financial results. Also, through these discussions or separate outreach efforts, we seek to engage our top stockholders to solicit feedback on corporate governance, our compensation program, and related matters. In 2019, we conducted such outreach to our top stockholders representing a majority of our outstanding shares; these stockholders did not express concerns over our corporate governance practices or compensation program design.
EXECUTIVE COMPENSATION
We Pay for Performance. Our philosophy is designed to:
attract, motivate and retain highly-qualified executive officers critical to our long-term success;
align the interests of our executive officers with the interests of our stockholders;
reward executive officers for achievingpre-defined rigorous financial goals and strategic objectives that may not yield current-period financial results but are expected to position us for enhanced results in future periods;
encourage strategic long-term development and profitable investment in the business;
motivate and reward appropriate risk-taking to grow the business; and
support pay practices with strong corporate governance and independent Board oversight.
We aligned annual incentives to strong financial results. The Company’s underlyingpay-for-performance approach is intended to reward management appropriately for results relative to targeted performance through use of a weighted combination of three performance metrics: revenue, adjusted EBITDA, and FCF.
We assessed and rewarded our most significant strategic accomplishments. 25% of annual incentive awards for our executive officers is tied to performance on pre-determined strategic objectives as well as specific goals tied to employee satisfaction and information security across our three strategic areas of focus: growth and innovation, operational excellence, and high performing organization.
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GeneralOur Bylaws require that directors be elected annually, and our Amended and Restated Certificate of Incorporation provides that the Board shall consist of such number of directors, as is determined from time to time, exclusively by resolution adopted by the affirmative vote of a majority of the directors then in office. Pursuant to resolutions adopted by the Board, our Board consists of 12 directors, each of whom, other than Frank D. Martell, our President and Chief Executive Officer, is “independent” pursuant to the applicable rules of the New York Stock Exchange (“NYSE”) and the categorical independence standards contained in our Corporate Governance Guidelines. Our Corporate Governance Guidelines are available on the Investor Relations section of our website under “Leadership & Governance — Highlights” at www.corelogic.com.
The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated the 12 individuals set forth under “Nominees” below for election at the Annual Meeting, to serve until the 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified.
Voting StandardUnder our Bylaws, in an uncontested election, each director nominee will be elected to the Board to serve until the next annual meeting and until his or her successor is duly elected and qualified, if the nominee receives a majority of votes cast (meaning the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee) with respect to such director nominee’s election. Under our Corporate Governance Guidelines, each director nominee who was in office prior to the election (each, an “incumbent director”) is required to submit, and has submitted, to the Board an irrevocable letter of resignation from the Board and all committees thereof, which will become effective if the director does not receive a majority of votes cast and the Board determines to accept the resignation. The Nominating and Corporate Governance Committee will make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. The Board will act on the recommendation of the Nominating and Corporate Governance Committee within 90 days from the date the election results are certified and thereafter promptly disclose its decision in a Current Report onForm 8-K.
The majority voting standard does not apply, however, in a contested election, where the number of nominees for director exceeds the number of directors to be elected. In a contested election, directors are instead elected by a plurality of shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors (meaning that the number of director nominees who receive the highest number of shares voted “for” their election are elected). The election of directors at the Annual Meeting will not be contested. Abstentions and brokernon-votes are not considered votes cast for the foregoing purpose and, therefore, will not be counted in determining the outcome of the election of the director nominees.
NomineesSet forth below is information concerning each person nominated and recommended to be elected as a director by our Board. The information set forth below is as of the date of this proxy statement. All of the nominees currently serve as our directors and, other than J. Michael Shepherd, were previously elected to the present term of office at our 2019 annual meeting of stockholders. Mr. Shepherd was initially recommended as a potential director candidate by our President and CEO. His candidacy was then considered by the Nominating and Corporate Governance Committee, and he was interviewed by various members of the Nominating and Corporate Governance Committee and the Board.
All of the director nominees listed below have consented to being named in this proxy statement and to serve as directors if elected. If any nominee should become unable or unwilling for good cause to serve as a director, the proxies will be voted for such substitute nominee(s) as shall be designated by our Board or our Board may reduce the number of directors on our Board. Our Board currently has no knowledge that any of the nominees will be unable or unwilling to serve.
See the section entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information pertaining to stock ownership of the nominees. There are no family relationships among any of the nominees or any of our executive officers. In addition, there were and are no arrangements or understandings between any director and any other person pursuant to which any director was or is to be selected as a director.
J. David Chatham Age 70 | Independent Director | |
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Board Committees | Audit, Compensation (Chair) | ||
Expertise • Real Estate • Financial/Mergers and
• Private Equity/Investing |
Biographical Information Mr. Chatham has served as President and Chief Executive Officer of Chatham Holdings Corporation and the Chatham family of real estate businesses, specializing in real estate development, building, brokerage, asset management, mortgage lending, and valuation/independent appraisal since 1991.
Mr. Chatham joined our Board in June 2010. From 2003 to 2009, he served on the Board of Directors of First Advantage Corporation, a former Nasdaq-listed company and former subsidiary of ours, which provided screening analytics and identity solutions.
Mr. Chatham received a gubernatorial appointment to both the Georgia Growth Strategies Commission and the Department of Community Affairs Board of Directors. In addition, he received the Free Enterprise Award from the Georgia Society of CPAs and serves as an Emeritus Trustee of the University of Georgia, as well as on numerous industry boards of directors.
Qualifications and ExperienceThrough his significant experience in the real estate arena, Mr. Chatham enhances our Board’s understanding of the mortgage, valuation and appraisal businesses, as well as the residential and commercial real estate markets. His broad executive and board experience provides particularly useful background for his service as Chair of the Compensation Committee and as a member of our Audit Committee.
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Douglas C. Curling Age 66 | Independent Director | |
Principal Occupation| Principal and Managing Director of New Kent Capital LLC Board Committees |Nominating and Corporate Governance, Strategic Planning and Acquisition Other Public Company Board |Aaron’s, Inc. | ||
Expertise • Public Company Chief Financial Officer and Chief Operating Officer • Technology • Insurance Services • Financial/Mergers and Acquisitions • Private Equity/Investing |
Biographical InformationSince 2010, Mr. Curling has been a principal and managing director of New Kent Capital LLC, afamily-run investment business, and a principal at New Kent Consulting LLC, a consulting business that he founded. From 1997 until 2008, Mr. Curling held various executive positions at ChoicePoint Inc., a provider of identification and credential verification services that was sold to Reed Elsevier, including serving as President from 2002 to 2008, Mr. Curling also served as a director of ChoicePoint Inc. from 2000 to 2008. Prior to joining ChoicePoint Inc., Mr. Curling served in various financial roles at Equifax, Inc., a credit bureau, from 1989 to 1997. Mr. Curling currently serves as a director of Aaron’s, Inc., a specialty retailer of furniture, consumer electronics, computers, appliances and home accessories.
Qualifications and ExperienceMr. Curling brings his experience operating a Mr. Curling’s relevant mergers and acquisitions and valuation experience includes ChoicePoint Inc.’s $4.0 billion sale to Reed Elsevier. |
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John C. Dorman Age 70 | Independent Director | |
Principal Occupation| Private Investor Board Committees |Audit, Strategic Planning and Acquisition (Chair) | ||
Expertise • Public Company Chief Executive Officer • Technology • Financial/Mergers and Acquisitions • Private Equity/Investing | ||
Biographical InformationMr. Dorman is a private investor. He previously served From 1998 to 2003, he served as Chief Executive Officer of Digital Insight Corporation, a provider of software as a service for online banking and bill payment for financial institutions that was acquired by Intuit, Inc., and as Senior Vice President of the Global Financial Services Division of Oracle Corporation from 1997 to 1998. From 1983 to 1997, Mr. Dorman was the Chief Executive Officer of Treasury Services Corporation, a provider of modeling and analysis software for financial institutions, which was acquired by Oracle Corporation in 1997. Mr. Dorman currently serves as a director of loanDepot, LLC, a nationalnon-bank lender serving consumers, and DeepDyve, Inc., an online rental service for scientific and scholarly research. Mr. Dorman currently serves as a Board Leadership Fellow for the National Association of Corporate Directors (NACD). He has been certified as a cybersecurity oversight director by the NACD. |
Qualifications and ExperienceMr. Dorman’s prior experience as Mr. Dorman has extensive mergers and acquisitions and valuation experience, having overseen more than $2.6 billion of mergers and acquisitions transactions, including Online Resources’ sale to ACI Worldwide, Digital Insight Corp’s $1.3 billion sale to Intuit, Digital Insight Corp’s acquisition of nFront and the sale of Zantaz, Inc. to Autonomy PLC. |
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Paul F. Folino, Chairman of the Board Age 75 | Independent Director | |
Principal Occupation| Chairman of the CoreLogic Board Board Committees |Audit, Compensation, Nominating and Corporate Governance, Strategic Planning and Acquisition Other Public Company Board |Lantronix, Inc. | ||
Expertise • Public Company Chief Executive Officer • Technology • Financial/Mergers and Acquisitions | ||
Biographical InformationMr. Folino was Executive Chairman of the Mr. Folino serves on the Mr.
Qualifications and ExperienceMr. Folino brings significant expertise regarding information technology and intellectual property. With his strong executive background, Mr. Folino provides valued input on a variety of leadership, Mr. Folino has extensive mergers and acquisitions and valuation experience, having overseen over $11 billion of transformative transactions—including Lantronix’s acquisition of Intrinsyc technologies, Emulex’s acquisition of Vixel, and Microsemi’s acquisitions of Vitesse Semiconductor, Microsemi RFIS and ACTEL, as well as Microsemi’s $9.9 billion sale to Microchip Technology. |
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Frank D. Martell Age 60 | Director Since 2017 | |
Board Committee | Strategic Planning and Acquisition | ||
• Public Company Chief Executive Officer, Chief Financial Officer and
• Data and Analytics • Technology • Real Estate/Insurance • Financial/Mergers and Acquisitions • Private Equity/Investing | ||
Biographical InformationMr. Martell has served as our President and Chief Executive Officer since March 2017. Prior to that, he served as our Chief Financial Officer from August 2011 to April 2016 and Chief Operating Officer from July 2014 to March 2017. Before joining the Company, Mr. Martell served as From 1996 to 2006, Mr. Martell held various leadership positions at ACNielsen Corporation, including President of Asia Pacific and Emerging Markets, Executive Vice President of the Marketing Information Group, and Chief Operating Officer of ACNielsen and Mr. Martell currently serves on the
Qualifications and ExperienceMr. Martell has worked with us in various executive leadership capacities for over Mr. Martell has lead more than 30 acquisitions and divestitures since joining CoreLogic, including most recently the acquisition of Symbility Solutions, Inc. |
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Claudia Fan Munce Age 61 | Independent Director | |
Principal Occupation| Venture Advisor at New Enterprise Associates Board Committees |Compensation, Strategic Planning and Acquisition Other Public Company Board |Best Buy Co., Inc. | ||
Experience • Technology • Financial/Mergers and Acquisitions • Private Equity/Investing | ||
Biographical InformationMs. Munce has served as a Venture Advisor at New Enterprise Associates, one of the world’s largest and most active venture capital firms, since January 2016. Previously, she served as a Managing Director of IBM Venture Capital Group and Vice President of Corporate Strategy at IBM Corp. from 2004 to 2015; Director of Strategy, IBM Venture Capital Group from Ms. Munce serves on the
Qualifications and ExperienceMs. Munce has been certified as a cybersecurity oversight director by the NACD, |
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Thomas C. O’Brien Age 66 | Independent Director | |
Principal Occupation| Chairman, PartsTrader Markets Limited Board Committees |Compensation, Nominating and Corporate Governance (Chair) | ||
Experience • Public Company Chief Executive Officer • Insurance Services • Private Equity/Investing | ||
Biographical InformationMr. O’Brien served as the Chief Executive Officer and President of Insurance Auto Auctions Inc., a provider of specialized services for automobile insurance, from 2000 to Mr. O’Brien joined the Mr. O’Brien is the
Qualifications and ExperienceAs a result of his experience as a Chief Executive Officer, Mr. O’Brien provides valued insight into our management practices. His leadership skills, board experience and background in corporate governance are particularly useful for his service as Chair of our Nominating and Corporate Governance Committee and as a member of our Compensation Committee. |
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Age 59 | Independent Director Since 2020 | |
Board Committee | Audit | ||
Experience • Real Estate/Housing Finance • Regulatory Compliance | ||
Biographical Information Ms. Patenaude currently serves as Principal of Granite Housing Strategies, LLC, a strategic advisory firm focused on real estate development and disaster recovery management, and has worked there since May 2019, where she oversaw $37 billion in disaster funding to support the long-term recovery efforts following Hurricanes Harvey, Maria and Irma. Ms. Patenaude served as the Deputy Secretary of the U.S. Department of Housing and Urban Development (HUD) from 2017 to 2019 and previously served in other positions at HUD, including Assistant Secretary for Community Planning and Development and Assistant Deputy Secretary for Field Policy and Management. From 2014 to 2017, Ms. Patenaude served as President of the J. Ronald Terwilliger Foundation for Housing America’s Families. Ms. Patenaude has also served in several leadership positions at institutions focused on housing policy and community development including the Director of Housing Policy for the Bipartisan Policy Center, Executive Vice President of the Urban Land Institute (ULI) and Founding Executive Director of the ULI Terwilliger Center for Workforce Housing. Ms. Patenaude currently serves on the Board of Directors of Habitat for Humanity International, the Bipartisan Policy Center and is a Trustee of the Homebuilders Institute (HBI). In addition, she serves as a member of the Board of Directors of the FDIC Advisory Committee on Economic Inclusion. Qualifications and Experience Ms. Patenaude’s successful and distinguished career focused on housing policy and community development adds unique and relevant insight and expertise to our Board which is invaluable to CoreLogic’s role as a leading global property information, analytics and data-enabled solutions provider. Ms. Patenaude’s background is particularly useful for her service on our Audit Committee. |
Vikrant Raina Age 53 | Independent Director Since 2017 | |
Principal Occupation| Chief Executive Officer and Managing Partner of BV Investment Partners Board Committees |Nominating and Corporate Governance, Strategic Planning and Acquisition | ||
Expertise • Technology • Financial/Mergers and Acquisitions • Private Equity/Investing | ||
Biographical InformationMr. Raina currently serves as Prior to that, he was an Executive Director in the communications, media and technology group at Goldman Sachs (Asia) and a project leader at The Boston Consulting Group. Through his role at BV Investment Partners, Mr. Raina
Qualifications and ExperienceMr. Raina brings extensive experience in identifying emerging technologies and helping firms advance growth, and contributes deep experience in technology and data services, business services, risk management and investment strategies. This experience is particularly useful as a member of our Strategic Planning and Acquisition Committee. |
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J. Michael Shepherd Age 65 | Independent Director Since 2019 | |
Board Committee | Nominating and Corporate Governance | ||
• Chief Executive Officer of Significant Regional Bank • Real Estate/Insurance • Regulatory Compliance | ||
Biographical InformationMr. Shepherd currently serves as Chairman of Bank of the West, a position he has held since June 2008. He Prior to joining Bank of the West, Mr. Shepherd served as General Counsel of The Bank of New York Company, Inc. and Shawmut National Corporation. Mr. Shepherd also served in various public sector appointments, including Senior Deputy Comptroller of the Currency, Associate Counsel to the President of the United States, and Deputy Assistant Attorney General. |
In addition to his role as Chairman of Bank of the West, Mr. Shepherd currently serves as a director of
Qualifications and ExperienceMr. Shepherd is a banking, housing finance and public policy leader and previously served as a member and President of the Federal Advisory Council of the Federal Reserve Board. The powerful combination of his public service, regulatory and financial housing policy experience as well as top-tier commercial and retail banking leadership, and his perspectives gained through his diverse experience, are an important contribution to the Board’s oversight of CoreLogic. |
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Jaynie Miller Studenmund Age 66 | Independent Director | |
Principal Occupation| Public board director; Retired Chief Operating Officer, Overture Services Inc. Board Committees |Compensation, Nominating and Corporate Governance Other Public Company Boards |ExlService Holdings, Inc., Pacific Premier Bancorp Inc., and funds for Western Asset Management | ||
Expertise • Public Company Chief Operating Officer • Marketing, Product Management, Strategy, and Team Building • Financial/Mergers and Acquisitions | ||
Biographical InformationMs. From 2001 to 2004, Ms. Studenmund was From 1982 to Today Ms. Studenmund |
Qualifications and ExperienceMs. Studenmund Ms. Studenmund’s |
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David Walker Age 66 | Independent Director | |
Principal Occupation| Retired; Former Director of the Program of Accountancy at the University of South Florida (USF), and former global accounting firm partner Board Committees |Audit (Chair), Strategic Planning and Acquisition Other Public Company Boards |Chicos FAS, Inc., | ||
Expertise • Risk Oversight, Accounting and Financial Reporting • Technology, including Financial/Mergers and Acquisitions | ||
Biographical InformationMr. Walker Mr. Walker joined
Qualifications and ExperienceMr. Walker is a certified public accountant and certified fraud examiner. His extensive experience in public accounting and on corporate boards of directors, including as past Chairman of the Board of Directors of Chico’s and Mr. Walker’s background is particularly useful for his service as Chair of our Audit Committee and member of our Strategic Planning and Acquisition Committee. |
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We are providing our stockholders with the opportunity to cast anon-binding vote to approve, on an advisory basis, the compensation of our named executive officers (“NEOs”). We urge stockholders to read the “Compensation Discussion and Analysis” section below, which describes in more detail how our executive compensation policies and practices are designed and operate to achieve our pay for performance compensation philosophy, as well as the “Summary Compensation Table” and other related compensation tables and narratives.
Our compensation program is heavily weighted toward performance-based compensation that provides a direct link between rigorous goals for corporate performance and pay outcomes for our executive officers. Our annual incentive plan also ties pay outcomes to the achievement of key strategic objectives that we believe will drive longer-term value to stockholders. We believe that our compensation program provides effective incentives for strong operating results by appropriately aligning pay and performance.
In the advisory vote at our 2019 annual meeting, nearly 96% of the votes cast by our stockholders supported our executive compensation policies and practices. While we have regularly received strong support for our executive pay practices, the Compensation Committee, with advice from independent third-party advisors, continues to engage in periodic reviews of our executive compensation and benefits programs and makes changes as appropriate to reflect our compensation philosophy and objectives, with consideration given to evolving trends and stockholder feedback.
Accordingly, the Board requests your advisory vote to approve the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 ofRegulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby APPROVED.”
This proposal to approve the compensation paid to our NEOs is advisory only and will not be binding upon us or the Board, and will not be construed as overruling a decision by us or the Board or creating or implying any additional fiduciary duty for us or our Board. The Board and the Compensation Committee value the opinions of our stockholders. The Compensation Committee will consider the outcome of the vote when considering future executive compensation arrangements.
Our policy is to provide stockholders with an annual opportunity to approve the compensation of the NEOs. The next advisory vote on the compensation of our NEOs will occur at the 2021 annual meeting of stockholders.
Voting StandardApproval, on an advisory basis, of the compensation of our NEOs requires the affirmative vote of the holders of a majority of shares of common stock present in person or represented by proxy and entitled to vote on the matter (meaning that of the shares represented at the meeting and entitled to vote on the proposal, a majority of them must be voted “for” the proposal for it to be approved). Abstentions will have the same effect as a vote “against” this proposal, andbroker-non votes will not be counted in determining the outcome of this proposal.
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The Audit Committeeaddress of the Board is responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit Committee conducts an annual evaluation of the independent registered public accounting firm’s qualifications, performance, and independence. The Audit Committee exercises sole authority to approve all audit engagement fees. In addition to ensuring the regular rotation of the lead audit engagement partner at least every five years as required by law, the Audit Committee is involved in the selection of, and reviews and evaluates, the lead audit engagement partner.
The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2020. PwC has audited the historical consolidated financial statements of our Company since June 2010, and of our predecessor, FAC, for all annual periods since 1954. To help ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm.
Representatives of PwC will be present at the Annual Meeting, will have an opportunity to make a statement if they wish and will be available to respond to appropriate questions.
Selection of our independent registered public accounting firm is not required to be submitted for stockholder approval by our Bylaws, but the Audit Committee is seeking ratification of its selection of PwC from our stockholders as a matter of good corporate governance. If the stockholders do not ratify this selection, the Audit Committee may, in its discretion, reconsider its selection of PwC and will either continue to retain PwC or appoint a new independent registered public accounting firm. Even if the selection is ratified, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our and our stockholders’ best interests.
Voting StandardRatification of the selection of PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 requires the affirmative vote of the holders of a majority of shares of common stock present in person or represented by proxy and entitled to vote on the matter (meaning that of the shares represented at the meeting and entitled to vote on the proposal, a majority of them must be voted “for” the proposal for it to be approved). Abstentions will have the same effect as a vote “against” this proposal. We do not expect any brokernon-votes on this matter.
Report of the Audit Committee
The following report of the Audit Committee is not soliciting material, is not deemed filed with the U.S. Securities and Exchange Commission (the “SEC”) and is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether made before or after the date of this proxy statement and irrespective of any general incorporation language in such filing.
The Audit Committee consists of fivenon-management directors: Messrs. Walker, Chatham, Dorman and Folino and Ms. Widener. All of the members meet the independence criteria and financial literacy requirements of the SEC and NYSE. The Audit Committee has certain duties and powers as described in its written charter adopted by the Board. A copy of the charter can be found on the Investors section of our website under Leadership & Governance-Highlights atwww.corelogic.com.
The Audit Committee reviews the Company’s accounting policies and financial reporting and disclosure practices, system of internal controls, internal audit process and the process for monitoring compliance with laws, regulations and corporate policies on behalf of the Board. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, for preparing the financial statements and for the public reporting process. The Audit Committee has reviewed the Company’s audited consolidated financial statements and discussed them with management, although the Audit Committee members are not the auditors or certifiers of the Company’s financial statements.
PwC, the Company’s independent registered public accounting firm for 2019, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the Company’s internal control over financial reporting. The Audit Committee has discussed with PwC the matters required to be discussed by applicable auditing standards, including Auditing Standard 1301,Communications with Audit Committees. The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee, and has discussed with PwC its independence.
Based on the reviews and discussions noted above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2019 and be filed with the SEC.
Audit Committee
David F. Walker (Chairman)
J. David Chatham
John C. Dorman
Paul F. Folino
Mary Lee Widener
Independent Auditor Information
Principal Accounting Fees and Services
The Audit Committee oversees the audit andnon-audit services provided by PwC and receives periodic reports on the fees paid. The aggregate fees billed for each of the last two fiscal years for professional services rendered by PwC in the four categories of service set forth in the table below are as follows:
Aggregate fees billed in year | 2019 | 2018 | ||||||||
Audit Fees | $ | 3,091,436 | $ | 3,084,333 | ||||||
Audit-Related Fees (1) |
| 77,276 |
| 1,430,496 | ||||||
Tax Fees (2) |
| 76,868 |
| 70,387 | ||||||
All Other Fees (3) |
| 22,613 |
| 15,901 | ||||||
Total Fees | $ | 3,268,193 | $ | 4,601,117 |
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Policy on Audit CommitteePre-Approval of Audit andNon-Audit Services of Independent Auditor
The Audit Committee retained PwC (along with other accounting firms) to providenon-audit services in 2019. We understand the need for PwC to maintain objectivity and independence as the auditor of our financial statements and our internal control over financial reporting. Accordingly, the Audit Committee has established the following policies and processes related to audit andnon-audit services.
The Audit Committee’s policy is topre-approve all engagements of our independent registered public accounting firm for audit andnon-audit services. The Audit Committee’spre-approval policy identifies specific services and assignspre-approved spending thresholds for each group ofnon-audit services. This policy works in conjunction with our independent registered public accounting firm’s annual audit services fee schedule, which is also approved by the Audit Committee. Any services notpre-approved or not covered by the policy or the audit services fee schedule are submitted to the Audit Committee’s chairman, as the Audit Committee’s designee, for review and approval and are subsequently ratified by the Audit Committee at its next meeting, as appropriate.
All services provided by PwC during the fiscal years ended December 31, 2019 and 2018 werepre-approved by the Audit Committee or its chairman.
The Audit Committee has concluded that PwC’s provision of audit andnon-audit services to the Company is compatible with PwC’s independence.directors listed above is: c/o CoreLogic, Inc., 40 Pacifica, Irvine, California 92618.
SECURITY OWNERSHIPNAMED EXECUTIVE OFFICERS OF CERTAIN BENEFICIAL OWNERS ANDTHE COMPANY
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the ownership of our common stock as of December 31, 2019 by the persons or groups of stockholders who are known to us to be the beneficial owners of more than 5% of our shares of common stock as of March 4, 2020 (using the number of shares outstanding on this date for calculating the percentage). The information regarding beneficial owners of more than 5% of our shares of common stock is based solely on public filings made by such owners with the SEC.
Name of Beneficial Owner
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Amount and Nature of Beneficial Ownership
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T. Rowe Price Associates, Inc. (1)
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14,166,179
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17.9
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%
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The Vanguard Group (2)
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7,628,197
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9.7
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%
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BlackRock, Inc. (3)
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7,068,840
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8.9
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%
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Harris Associates L.P. and affiliates (4)
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4,583,142
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5.8
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%
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the total number of shares of our common stock beneficially owned and the percentage of the shares so owned as of March 4, 2020 by:
each director;
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all directors and current executive officers as a group.
Unless otherwise indicated in the notes following the table, the persons listed in the table below are the beneficial owners of the listed shares with sole voting and investment power (or, where applicable, shared power with such individual’s spouse and subject to community property laws) over the shares listed. Shares vesting or subject to rights exercisable within 60 days after March 4, 2020 are treated as outstanding in determining the amount and percentage beneficially owned by a person or entity.
Stockholders
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Number of shares of common stock
| Percent if greater than 1%
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Directors
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J. David Chatham
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38,181
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—
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Douglas C. Curling
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35,871
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—
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John C. Dorman
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17,148
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—
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Paul F. Folino
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10,110
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—
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Frank D. Martell
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638,006
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—
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Claudia Fan Munce
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8,903
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—
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Thomas C. O’Brien
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32,016
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—
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Vikrant Raina
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11,403
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—
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J. Michael Shepherd
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3,458
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—
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Jaynie Miller Studenmund
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31,021
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—
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David F. Walker
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43,238
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—
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Mary Lee Widener
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8,576
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—
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Current NEOs who are not directors
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James L. Balas
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| 115,888
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—
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Barry M. Sando
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| 242,922
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—
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Francis Aaron Henry
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—
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—
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Arnold A. Pinkston
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—
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All directors and current executive officers as a group (16 persons)
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| 1,236,741
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| 1.6
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The shares set forth in the table above include shares that the following directors and NEOs, as well as directors and current executive officers as a group, have the right to acquire within 60 days of March 4, 2020 pursuant to the vesting of RSUs or the exercise of stock options in the amounts set forth below:
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Securities Authorized for Issuance under Equity Compensation Plans
We currently maintain two equity compensation plans: the CoreLogic, Inc. 2018 Performance Incentive Plan (the “2018 Plan”) and the 2012 Employee Stock Purchase Plan (“2012 ESPP”). We currently have outstanding awards under The CoreLogic, Inc. Amended and Restated 2011 Performance Incentive Plan, as amended (“2011 Plan”) and the 2006 Incentive Compensation Plan (the “2006 Plan”); however, we are no longer authorized to grant new awards under these plans. Each of the 2018 Plan, the 2011 Plan, the 2012 ESPP and the 2006 Plan was approved by our stockholders.
The following table sets forth, for each of our equity compensation plans, the number of shares of common stock subject to outstanding awards, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of December 31, 2019.
Plan category
| Number of securities to be issued upon exercise of outstanding options, warrants and rights) (a)
| Weighted-average exercise price of outstanding options, warrants and rights (b)
| Number of securities remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) (c)
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Equity compensation plans approved by stockholders
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| 2,515,022
| (1)
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| 19.59
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| 10,609,877
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CORPORATE GOVERNANCE AND BOARD MATTERS
Committees of the Board; Committee Charters
There are currently four standing committees of the Board: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Strategic Planning and Acquisition Committee. In addition to the four standing committees, the Board may approve, and has from time to time approved, the creation of special committees or subcommittees to act on behalf of the Board.
Each of the standing committees operates under a written charter adopted by the Board. The charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on the Investors section of our website under Leadership & Governance-Highlights atwww.corelogic.com. Each committee reviews and reassesses the adequacy of its charter annually, conducts annual evaluations of its performance with respect to its duties and responsibilities as laid out in the charter, and reports regularly to the Board with respect to the committee’s activities.
| Age 60 | |
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James L. Balas | Age 50 | ||
Officer | Mr. Balas has served as the Company’s Chief Financial Officer since April 2016. Mr. Balas joined CoreLogic in March 2011, as Senior Vice President, Controller and principal accounting officer. In 2012, his role expanded to include oversight of finance in addition to his other responsibilities. Prior to joining the Company, Mr. Balas held a variety of senior finance leadership positions at several publicly-traded companies after a successful 10-year career at Ernst & Young and Capgemini. | ||
Barry M. Sando | Age 61 | ||
Underwriting and Workflow Solutions |
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Francis Aaron Henry | Age 54 | ||
Chief Legal Officer
Secretary |
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Committee Advisors.Pay Governance LLC (“Pay Governance”) was initially retained as the Compensation Committee’s independent compensation consultant in 2015 and continues to be engaged by the Compensation Committee. The Compensation Committee also seeks input from our Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer and Chief Legal Officer when making decisions regarding compensation matters. During 2019, Pay Governance attended six of the seven Compensation Committee meetings.
Pay Governance providedCompany held its 2020 Annual Meeting on April 28, 2020. Stockholders should refer to the Compensation Committee, among other things, guidance as to our peer groupproxy statement filed in connection with the 2020 Annual Meeting for 2019 compensation for executive compensation comparison purposes; director compensation for 2019; and determining 2019 totalinformation regarding the compensation of each of our executivedirectors and officers and certain other information related to the material elements of total compensation, including (1) annual base salaries, (2) target cash bonus amounts and (3) the structure and target amount of long-term incentive awards.
Pay Governance did not perform any services for the Company and the Compensation Committee does not believe that the services performed by Pay Governance raised any conflict of interest. The Compensation Committee regularly reviews the services provided by its independent compensation consultant.2020 Annual Meeting.
Committee Independence.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSOur Board has determined that each member of our Compensation Committee is “independent” under applicable listing standards of the NYSE. In making its independence determination for each member of the Compensation Committee, our Board considered whether the director has a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. In addition, our Board has determined that each of Messrs. Chatham, Folino, O’Brien and Mses. Studenmund and Munce is a“non-employee director” for purposes ofRule 16b-3 under the Exchange Act and satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Code.
Equity Awards Committee.The Equity Awards Committee was created by the Board in 2016 and has been delegated limited authority to approve and establish the terms of equity awards granted to eligible participants under our equity incentive plans. Mr. Martell is the sole committee member.
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Board Diversity.We do not have a formal policy for the consideration of diversity in identifying nominees for director. However, the Nominating and Corporate Governance Committee recognizes the benefits associated with a diverse Board and, as indicated above, considers diversity as a factor when identifying and evaluating candidates for membership on our Board. The Nominating and Corporate Governance Committee utilizes a broad conception of diversity, including professional and educational background, prior experience on other boards of directors (both public and private), political and social perspectives as well as race, gender and national origin. Utilizing these factors, and the factors described below under “Evaluation of Director Nominees”, the Nominating and Corporate Governance Committee makes recommendations, as it deems appropriate, regarding the composition and size of the Board. The priorities and emphasis of the Nominating and Corporate Governance Committee and of the Board may change from time to time to take into account changes in business and other trends and the portfolio of skills and experience of current and prospective Board members.
Stockholder Recommendations for Director Nominees.The Nominating and Corporate Governance Committee has adopted procedures by which certain of our stockholders may recommend director nominees to the Board. In particular, the Nominating and Corporate Governance Committee has established a policy whereby it will accept and consider, in its discretion, director recommendations from any stockholder holding in excess of 5% of our outstanding common stock. Such recommendations must include the name and credentials of the recommended nominee and should be submitted to our Secretary at our address included in this proxy statement. The Nominating and Corporate Governance Committee will evaluate director candidates recommended by stockholders for election to our Board in the same manner and using the same criteria as used for any other director candidate (as described below). If the Nominating and Corporate Governance Committee determines that a stockholder-recommended candidate is suitable for membership on our Board, it will include the candidate in the pool of candidates to be considered for nomination upon the occurrence of the next vacancy on our Board or in connection with the next annual meeting of stockholders.
Evaluation of Director Nominees.While the Nominating and Corporate Governance Committee has no specific minimum qualifications in evaluating a director candidate, it takes into account all factors it considers appropriate in identifying and evaluating candidates for membership on our Board, including some or all of the following: strength of character, an inquiring and independent mind, practical wisdom, mature judgment, career specialization, relevant industry experience, relevant technical skills, reputation in the community, diversity and the extent to which the candidate would fill a present need on the Board. The Nominating and Corporate Governance Committee makes recommendations to the full Board as to whether or not incumbent directors should stand forre-election. However, if we are legally required by contract or otherwise to provide third parties with the ability to nominate directors, the Nominating and Corporate Governance Committee may adjust its evaluation process for the designated candidates to reflect our contractual obligations with respect to their nomination. The Nominating and Corporate Governance Committee conducts all necessary and appropriate inquiries into the background and qualifications of possible candidates and may engage a search firm to assist in identifying potential candidates for nomination.
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Independence of Directors
Pursuant to the listing rules of the NYSE, a majority of the Board must be independent. A director will not qualify as independent unless the Board affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). To assist in its determination of director independence, the Board has adopted categorical director independence standards, which are contained in our Corporate Governance Guidelines. The Corporate Governance Guidelines are available to stockholders on the Investors section of our website under Leadership & Governance-Highlights atwww.corelogic.com.
In accordance with applicable NYSE listing rules and our categorical director independence standards, the Board has affirmatively determined that each of Messrs. Chatham, Curling, Dorman, Folino, O’Brien, Raina, Shepherd and Walker, and Mses. Munce, Studenmund and Widener is “independent”. Mr. Martell is not considered independent because he serves as our President and Chief Executive Officer.
Board Leadership Structure
The offices of Chief Executive Officer and Chairman are separate. Mr. Folino has served as Chairman of our Board since July 2014. Our Board believes that the separation of the offices of Chairman and Chief Executive Officer continues to be appropriate as it allows our Chief Executive Officer to focus primarily on his management responsibilities and the Chairman to oversee and manage the Board and its functions. Having an independent Chairman promotes the independence of our Board and provides appropriate oversight of
management and ensures free and open discussion and communication among thenon-management members of our Board. The Chairman also chairs and coordinates the agenda for executive sessions of thenon-management directors.
Our Corporate Governance Guidelines provide that the Board shall annually elect a lead director by a majority vote of the independent directors unless the Chairperson of the Board is an independent director, in which case the Chairperson of the Board will perform the functions of a lead director and no lead director shall be elected. Mr. Folino, an independent director, is the Chairman and, as a result, we do not currently have a lead director.
Director Education
Directors are strongly encouraged to attend educational seminars regarding the Company’s business, corporate governance and other issues pertaining to their directorship. We also provide the Board with educational training fromtime-to-time on subjects applicable to the Board and the Company, including with regard to industry and regulatory developments, accounting, financial reporting, and corporate governance, using both internal and external resources.
Succession Planning
Among the Compensation Committee’s responsibilities described in its charter is to oversee development and succession planning for executive officers, and the Compensation Committee also oversees this for other key members of senior management. The Board plans for succession of the CEO and periodically reviews senior management selection and succession planning that is undertaken by the Compensation Committee. As part of this process, thenon-management directors annually review the Compensation Committee’s recommended candidates for senior management positions to see that qualified candidates are available for all positions and that development plans are being utilized to strengthen the skills and qualifications of the candidates. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational excellence, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.
Risk Oversight
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Board Meetings and Attendance
Our Board held six meetings during 2019 and ournon-management directors also met six times in executive session without management present. Each director attended 75% or more of the total number of meetings of the Board and meetings of the committees (if any) on which the director served during his or her respective tenure on the Board during 2019. From time to time, our Board and committees also act by unanimous written consent as permitted by our Bylaws and the Delaware General Corporation Law.
Director Attendance at Annual Meetings
We encourage our directors to attend the annual meetings of our stockholders, either in person or telephonically. All directors attended the 2019 annual meeting (with the exception of Mr. Shepherd, who was appointed to the Board in June 2019).
Retention of Outside Advisors
The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent accountants are retained by, and report directly to, the Audit Committee. In addition, the Audit Committee is responsible for the selection, assessment, and termination of the internal auditors to which we have outsourced our internal audit function. Similarly, the consultant retained by the Compensation Committee to assist in the evaluation of senior executive compensation reports directly to that committee.
Code of Conduct
The Board has adopted a Code of Conduct (the “Code”) that applies to all employees, including our directors, Chief Executive Officer, Chief Financial Officer, Controller, and persons performing similar functions, which has been posted under “Investors-Leadership & Governance-Highlights” on our websitewww.corelogic.com. If we waive or amend any provisions of the Code that apply to our directors and executive officers, including our Chief Executive Officer, Chief Financial Officer, Controller and persons performing similar functions, we will disclose such waivers or amendments on our website, at the address and location specified above, to the extent required by applicable SEC and NYSE rules.
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines which have been posted under “Investors-Leadership & Governance-Highlights” on our websitewww.corelogic.com. In addition to stating the standards that the Board applies in determining whether or not its members are independent, these guidelines address, among other items, the qualifications and responsibilities of our directors and describe fundamental aspects of our Board and certain of its committees.
Director Overboarding Policy
Our Corporate Governance Guidelines provide that our directors may not serve on more than five public company boards (including our Board), and our Audit Committee members may not serve on more than three public company audit committees (including our Audit Committee), in each case, without prior Board approval. In each case, in determining whether to grant such approval, the Board will consider the director’s ability to devote sufficient time to the activities of the Board and/or Audit Committee and the director’s qualifications and contribution, or potential contribution, to the Board and/or Audit Committee. As of the date of this proxy statement, all of our directors are in compliance with the overboarding policy.
Board and Committee Evaluations
To increase their effectiveness, the Board and each of its committees perform an annual self-evaluation under the direction of the Nominating and Corporate Governance Committee. The evaluation addresses, among other items, attendance, preparedness, participation, candor and other measures of performance selected by the Board.
Communicating with Directors
Stockholders and other interested parties may communicate directly with members of the Board, including the Chairman of the Board or any of the othernon-management directors of our Company (individually or as a group), by writing to such director(s) at:
CoreLogic, Inc.
c/o Chief Legal Officer and Secretary
40 Pacifica, Suite 900
Irvine, CA 92618
Our Corporate Secretary reviews and promptly forwards communications to the directors, as appropriate. Communications involving substantive accounting or auditing matters are forwarded to the Chair of the Audit Committee. Certain items that are unrelated to the duties and responsibilities of the Board will not be forwarded such as: business solicitation or advertisements; product- or service-related inquires; junk mail or mass mailings; resumes or otherjob-related inquires; and spam and inappropriately hostile, threatening, potentially illegal or similarly unsuitable communications. Directors receiving communications will respond as such directors deem appropriate, including the possibility of referring the matter to management of our Company, to the full Board or to an appropriate committee of the Board.
Transactions with Management and Others
The Board has adopted a written policy regarding transactions with related persons that requires the approval or ratification by the Board or the Nominating and Corporate Governance Committee of any transaction exceeding $120,000 in which we are a participant and any related person has a direct or indirect material interest. A related person includes a director, nominee for election as a director, executive officer, person controlling over 5% of our common stockCommon Stock and the immediate family members of each of these individuals. Once a transaction has been determined to require approval, the transaction will be reviewed and approved by either the Board or the Nominating and Corporate Governance Committee. The Board or the Nominating and Corporate Governance Committee will review and consider the terms, business purpose and benefits of the transaction to the Company and the related person.
If a related party transaction is notpre-approved, then it must be brought to the Board or the Nominating and Corporate Governance Committee for ratification as promptly as possible. No member of the Board or the Nominating and Corporate Governance Committee may participate in the review or approval of a related party transaction in which he or she has a direct or indirect interest, unless the Chairman of the Board or the chairperson of the Nominating and Corporate Governance Committee requests such individual to participate.
The following types of transactions do not requirepre-approval:
compensatory arrangements for service as an officer or director of ours, provided such compensation is approved by the Compensation Committee;
transactions between us and our affiliates (other than directors and officers);
transactions involving a related person with only an indirect interest resulting solely from ownership of less than 10% of, or being a director of, the entity entering into a transaction with us;
ordinary course transactions involving annual payments of $100,000 or less; or
transactions involving indebtedness between us and a beneficial owner of more than 5% of our common stockCommon Stock or an immediate family member of such beneficial owner, provided that the beneficial owner or family member is not an executive officer, director or director nominee of ours or an immediate family member thereof.
In fiscal year 2019, there were no related party transactions required to be disclosed pursuant to Item 404 of RegulationS-K.
Anti-Hedging and Pledging Policy
We maintain a policy that restricts our directors, executive officers and other employees from engaging in hedging or monetization transactions, including prepaid variable forwards, equity swaps, collars and exchange funds, that may permit continued ownership of Company securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. Pursuant to our policy, we also prohibit our directors, executive officers and other employees from engaging in transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, as well as holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan (except in limited circumstances if the person pledging the securities is able to demonstrate that he or she has the financial capacity to repay the loan without resort to the pledged securities). No such exception is currently in place.
The following table sets forth certain information concerning the compensation of our directors other than Mr. Martell for the fiscal year ended December 31, 2019.
Name
| Fees Earned or Paid in Cash ($)
| Stock Awards (1)(2) ($)
| Total ($)
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J. David Chatham | $ | 133,803 | $ | 159,963 | $ | 293,766 | ||||||
Douglas C. Curling | $ | 92,500 | $ | 159,963 | $ | 252,463 | ||||||
John C. Dorman | $ | 112,500 | $ | 159,963 | $ | 272,463 | ||||||
Paul F. Folino | $ | 217,500 | $ | 159,963 | $ | 377,463 | ||||||
Claudia Fan Munce | $ | 103,406 | $ | 159,963 | $ | 263,369 | ||||||
Thomas C. O’Brien | $ | 121,303 | $ | 159,963 | $ | 281,266 | ||||||
Vikrant Raina | $ | 92,500 | $ | 159,963 | $ | 252,463 | ||||||
J. Michael Shepherd | $ | 54,227 | $ | 149,629 | $ | 203,856 | ||||||
Jaynie Miller Studenmund | $ | 97,500 | $ | 159,963 | $ | 257,463 | ||||||
David F. Walker | $ | 125,000 | $ | 159,963 | $ | 284,963 | ||||||
Mary Lee Widener | $ | 95,000 | $ | 159,963 | $ | 254,963 |
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As described in the Compensation Discussion and Analysis, Pay Governance served as independent compensation consultant for the Compensation Committee for 2019 and will continue to advise on the compensation of our directors for 2020. During 2019, as part of its engagement with the Committee, Pay Governance:
provided advice on the selection of a peer group of companies for director compensation comparison purposes;
provided guidance on industry best practices and emerging trends and developments in director compensation;
reviewed director compensation; and
provided advice on determining the structure and amounts payable under our director compensation program.
The Compensation Committee reviews and recommends to the Board the form and level of director compensation. In December 2019, the Compensation Committee reviewed the Directors’ Compensation Policy and recommended one change for 2020 with respect to the annual cash retainer for ournon-management Chairman of the Board (increase to $120,000 from $100,000); the Board affirmed the recommendation of the Compensation Committee.
The table below describes the components of thenon-management director compensation program in effect during 2019:
Compensation Element | 2019 | |||
Annual Retainer —Non-Management Director (1) | $ | 80,000 |
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Annual Equity Compensation — RSUs (2) | $ | 160,000 |
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Annual Retainer —Non-Management Board Chairman | $ | 100,000 |
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Annual Retainer — Committee Chairs (1) | ||||
Audit Committee | $ | 25,000 |
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Compensation Committee | $ | 20,000 |
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Nominating and Corporate Governance Committee | $ | 15,000 |
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Strategic Planning and Acquisition Committee | $ | 12,500 |
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Annual Retainer — Committee Members (1) | ||||
Audit Committee | $ | 15,000 |
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Compensation Committee | $ | 10,000 |
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Nominating and Corporate Governance Committee | $ | 7,500 |
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Strategic Planning and Acquisition Committee | $ | 5,000 |
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Fee for attendance of Board and Committee Meetings in Excess of Designated Number (3) | $ | 2,000 |
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Director Share Ownership Guidelines
We require ournon-management directors to own a fixed amount of Company stock. The guidelines are based on a multiple of the annual retainer and require a value of at least $400,000 be held by each director. Directors have five years from their date of election to the Board to reach the ownership requirement. All Company securities owned outright or earned and subject only to time-based vesting restrictions, including deferred awards, are credited toward the requirement. All directors have met these requirements within five years of joining.
Set forth below is information regarding our current executive officers. Our executive officers are appointed annually by the Board.
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COMPENSATION DISCUSSION & ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) describes our compensation program, including our compensation strategy, philosophy, polices, programs and practices for our NEOs and the positions they held in 2019. For purposes of this CD&A, the Committee refers to the Compensation Committee of our Board of Directors.
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2019 BUSINESS HIGHLIGHTS
Our compensation program is designed to align the interests of our executive officers with those of our stockholders through use of a balance of financial results and strategic objectives in three areas of focus that are intended to drive our long-term performance: growth and innovation, operational excellence, and high performing organization. In 2019, a majority of our NEOs’ compensation continued to be based upon our financial performance and execution against these strategic objectives.
In setting our 2019 performance goals, we considered various factors including strategic initiatives associated with the implementation of our long-term plans, programs required to ensure robust cyber and information security and technology platforms and hiring and retaining the best available human capital, and the Company’s environmental, social and governance (ESG) initiatives. We also considered factors such as anticipated volatility and unpredictability in our domestic and international markets.
We delivered strong operating and financial results in 2019. Significant strategic and operational highlights included:
Enhancing business mix by increasing contributions from higher margin platform and recurring revenue streams and exit/wind down of non-core mortgage technology and default services units.
Increasing non-US mortgage volume sensitive solutions to almost 40% of total revenues, reflecting strong progress toward long-term goals.
Acquiring and/or integrating important business streams to augment and grow our insurance and spatial solutions, tax services and real estate marketing services operations.
Completing the transformation of our AMC operation to enhance future growth and profitability.
Investing in new technology and data-related capabilities with a focus on data structures, visualization, technology platforms and advanced automation techniques.
Progressing the migration of our technology stack to the Google Cloud.
Exceeding our cost reduction targets through a reduction in organizational complexity, refining and automating work processes, and shrinking our real estate footprint, all of which contributed to expanded operating margins.
Long-term Financial Highlights Through 2019
Operating Performance – 2011 (first full year as a public company) – 2019 Growth
Adjusted EBITDA to Free Cash Flow (FCF) Conversion Percentage
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∎ Periodic ∎ Prior Cumulative
∎ Cumulative # of Shares Purchased
2019 FINANCIAL HIGHLIGHTS
Revenues of $1.762 billion, an increase of 3% before the impact of foreign currency translation, our AMC transformation and the exit/wind down ofnon-core mortgage technology and default services units.
Adjusted EBITDA increased to $498 million, an increase of $5 million above 2018 levels.
Adjusted EPS of $2.83 grew by 4% compared to the prior year.
Adjusted EBITDA margins up 70 basis points to 28%. Adjusted EBITDA exceeded 30% for the second half of 2019, including margin expansion of approximately 500 basis points in the fourth quarter.
Cost management and productivity benefits of more than $20 million.
Including heightened reinvestment in growth generating initiatives and productivity programs, FCF of $257 million was generated for the twelve months ended December 31, 2019.
Repurchased approximately 3% of our common shares and reduced debt levels by $110 million.
Initiated and declared our first quarterly dividend in December 2019 and paid in January 2020.
Company share price increased more than 30%.
We attribute these results to management’s ability to successfully implement our long-term strategic initiatives and tactical business plans and navigate a large and complex market undergoing heightened levels of volatility while maintaining focus in a challenging business environment, with strong leadership from Mr. Martell.
Please seeAppendix A for a detailed reconciliation of adjusted EBITDA and FCF to the most directly comparable GAAP financial measures.
EXECUTIVE COMPENSATION HIGHLIGHTS
We aligned annual incentives to strong financial results. Our underlyingpay-for-performance approach is intended to reward management appropriately for results relative to targeted performance through use of a
weighted combination of three performance metrics: revenue, adjusted EBITDA, and FCF. Annual incentive performance goals were set at the beginning of 2019 based on best available market forecasts at the time, which called for a modest decline relative to actual 2018 for US mortgage market unit volumes. In addition, our financial targets were set based on our assessment of the impact of key strategic initiatives as well as known or anticipated macro-economic environment and operating conditions in the global markets we serve. We delivered a strong performance in 2019 – both operationally and financially – exceeding our revenue target by 10%, our adjusted EBITDA target by 11%, and our FCF target by 4%. Combined results for revenue, adjusted EBITDA, and FCF generated annual incentive funding at 141% of target. The overachievement against our targets was driven principally by a combination of effective and aggressive management, improved market conditions for US mortgage as well as changes in the timing related to our AMC transformation program and the wind down of certainnon-core platforms. After considering the impact of changes in the timing and other assumptions related to our AMC transformation program as well as the wind down ofnon-core platforms on actual financial results against targeted performance levels, the Committee exercised its discretion to reduce final funding of the financial results to 128.7% of target.
We assessed and rewarded our most significant strategic accomplishments. For our NEOs, 25% of annual incentive awards is tied to performance on predetermined strategic objectives as well as specific goals tied to employee satisfaction and information security.Based on overall strong strategic accomplishments in a challenging revenue environment as well as achievement of employee satisfaction and information security related targets, and individual contributions to those accomplishments, the Committee awarded our three eligible NEOs that were with us at the end of 2019 from 129% to 170% of target for strategic objectives.
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Strong Stockholder Support on Say on Pay
Our Board and management are committed to maintaining sound and effective compensation and governance policies and programs designed to build value for our stockholders. At our 2019 Annual Meeting, nearly 96% of the votes cast were in favor of the advisory vote to approve our executive compensation paid in 2018. With this support in favor of our existing compensation program, absence of negative feedback from our stockholder outreach effort, and following its regular review of our practices, the Committee determined to continue our 2018 compensation program in 2019 with only minor adjustments.
Active Engagement with Our Stockholders
The Board and executive management are committed to engaging with our stockholders. Throughout the year, executive management proactively and periodically meets with current and prospective stockholders to discuss our strategic priorities, operational performance, and financial results. Also, through these discussions or separate outreach efforts, we seek to engage our top stockholders to solicit feedback on corporate governance, our compensation program, and related matters. In 2019, we conducted such outreach to our top stockholders representing a majority of our outstanding shares; these stockholders did not express concerns over our corporate governance practices or compensation program design.
GOOD PAY GOVERNANCE PRACTICES
The Committee oversees the design and administration of our compensation program and evaluates it against competitive practices, legal and regulatory developments and corporate governance trends. The Committee has incorporated the following governance features into our compensation program:
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PAY PHILOSOPHY
We pay for performance.Our compensation program is heavily weighted toward performance-based annual and long-term compensation that provides a direct link between rigorous goals for corporate performance and pay outcomes for our executive officers. Our annual ICP also ties pay outcomes to the achievement of key strategic objectives that we believe will drive longer-term value to stockholders. We believe that our compensation program provides effective incentives for strong operating results by appropriately aligning pay and performance.
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Our compensation program emphasizes performance-based incentives.86% of our CEO’s compensation and 75% of the compensation for the other NEOs (including Mr. Henry and excluding Mr. Pinkston) is performance-based. The chart below illustrates our pay mix. (For these purposes we have determined compensation by using the grant date fair value of our equity awards and by valuing our performance-based restricted stock units (“PBRSUs”) at target level of performance.)
We focus on long-term stockholder value. As illustrated above, nearly 70% of the total compensation opportunity for our CEO is based on achievement of stockholder-aligned performance and the value of our shares. For other NEOs, half of their total target compensation opportunities are tied to these stockholder results.
We increase base salaries primarily for performance or promotion.Our practice is to benchmark compensation annually but to increase an NEO’s base salary only when warranted by sustained performance, an increase in the scope of responsibilities or significant gaps to competitive pay levels. Of our currently employed NEOs, only Messrs. Martell and Balas received base salary increases in 2019 to recognize performance and move their respective salaries to more competitive levels.
We set rigorous goals in our incentive plans. We set challenging goals for both our annual incentive and long-term equity plan, with recognition of the broader macro-economic environment factored into performance goals. We outperformed US mortgage market trends and delivered single-digit top line growth in our core operations, resulting in year-over-year growth in adjusted EBITDA and FCF despite very challenging market conditions as we entered the year. For 2019, we also considered the impact of the timing of significant planned investments on our results.
We use strategic goals in our ICP.Results on strategic goals represent 25% of the annual ICP opportunity for our executive officers. We believe this approach rewards the accomplishment of key objectives that will drive future performance. The Committee separately determines the portion of the funded amount that should be paid as a result of achievement of the assigned objectives. The Committee carefully evaluates management’s accomplishments relative to the goals, as further described below.
Our equity grants are tied to performance.In 2019, 50% of the target value of our long-term incentive awards for our CEO and other NEOs was granted in the form of PBRSUs that vest based on achievement of adjusted EPS results relative to target and TSR relative to the companies in our Peer Group (as described and defined later in this section). We set rigorous goals in our PBRSU awards, where strong operating and shareholder performance, such as a 31% shareholder return in 2019, has allowed us to achieve above-target payouts in the last three award cycles. The remaining 50% of the target value of our long-term incentive awards was granted in the form of RSUs that require us to achieve a threshold adjusted net income level in order to be eligible to vest.
3-Year PBRSU Payouts
2019 COMPENSATION PROGRAM OVERVIEW
The following table describes each aspect of our pay program for executive officers.
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Determining Pay
Generally, in determining base salary, target annual ICP and guidelines for long-term equity awards, the Committee considers several factors including, but not limited to, the executive officer’s:
role, including the scope and complexity of responsibilities
experience and capabilities, including institutional knowledge
contributions or responsibilities beyond the typical scope of the role
individual performance
positioning relative to our other executive officers
difficulty in recruiting a replacement, and
competitive compensation opportunities provided by our peers and other competitors for similar executive talent
Our philosophy is to incentivize and reward executive officers for future performance. While the Committee regularly reviews executive officer equity grants and vesting, it does not consider prior stock compensation in setting future compensation levels.
Peer Group and Benchmarking
To monitor competitive compensation practices, the Committee relies primarily upon data compiled from public filings of selected companies (our “Peer Group”) that it considers to be competitors or appropriate comparators for executive talent. The Committee reviews and approves the Peer Group annually. Criteria for Peer Group selection include firms that operate in data, information and analytics as well as those that have a high degree of sensitivity to mortgage origination volumes. Our 2019 Peer Group is presented in the table below.
Historically, our peer group has been challenging to construct as there are few firms that operate with highly comparable business mixes. Peers have generally been information and service providers, with some financial technology firms also included. For 2019, the Company refreshed its peer group to provide greater alignment with businesses that are sensitive to mortgage origination volumes and interest rates.
The following organizations were added to the 2019 Peer Group:
Fidelity National Information Services, Inc.
Realogy Holdings Corporation
Mr. Cooper Group, Inc. (formerly Nationstar Mortgage Holdings)
Radian Group, Inc.
PennyMac Financial Services, Inc.
Zillow Group, Inc.
MGIC Investment Corporation
Altisource Portfolio Solutions
Three peers in the 2018 Peer Group were removed due to the Committee’s determination of industry or size misalignment:
Broadridge Financial Solutions
Paychex Inc.
Teradata Corporation
CORELOGIC 2019 PEER GROUP | ||||||||||||||||||||||
Comparator Group Rationale | ||||||||||||||||||||||
Company Name | Revenue1 | Market Value (12/31/2019) | EBITDA Margin1 | Comparable Revenue Size2 | Comparable Market Value2 | Data Analytics | Mortgage Origination | Direct Competitor | ||||||||||||||
($MM) | ($MM) | (%) | ||||||||||||||||||||
Fidelity National Information Services, Inc. | $ | 10,333 | $ | 85,485 | 33 | % | ✓ | |||||||||||||||
Fidelity National Financial, Inc. | $ | 8,477 | $ | 12,472 | 19 | % | ✓ | |||||||||||||||
First American Financial Corporation | $ | 6,202 | $ | 6,551 | 17 | % | ✓ | ✓ | ✓ | |||||||||||||
Realogy Holdings Corp. | $ | 5,598 | $ | 1,107 | 10 | % | ✓ | |||||||||||||||
Global Payments Inc. | $ | 4,912 | $ | 54,868 | 39 | % | ✓ | ✓ | ||||||||||||||
Gartner, Inc. | $ | 4,245 | $ | 13,785 | 13 | % | ||||||||||||||||
Equifax Inc. | $ | 3,508 | $ | 16,966 | 23 | % | ✓ | ✓ | ||||||||||||||
Euronet Worldwide, Inc. | $ | 2,750 | $ | 8,513 | 21 | % | ✓ | ✓ | ||||||||||||||
Zillow Group, Inc. | $ | 2,743 | $ | 9,517 | -6 | % | ✓ | ✓ | ||||||||||||||
FleetCor Technologies, Inc. | $ | 2,649 | $ | 24,969 | 57 | % | ✓ | ✓ | ✓ | |||||||||||||
Verisk Analytics, Inc. | $ | 2,607 | $ | 24,472 | 40 | % | ✓ | ✓ | ||||||||||||||
PennyMac Financial Services, Inc. | $ | 2,060 | $ | 2,670 | — | ✓ | ✓ | ✓ | ||||||||||||||
Mr. Cooper Group Inc. | $ | 2,007 | $ | 1,140 | 28 | % | ✓ | ✓ | ||||||||||||||
Jack Henry & Associates, Inc. | $ | 1,631 | $ | 11,207 | 28 | % | ✓ | ✓ | ||||||||||||||
Radian Group Inc. | $ | 1,527 | $ | 5,061 | 64 | % | ✓ | ✓ | ✓ | |||||||||||||
MGIC Investment Corporation | $ | 1,214 | $ | 4,941 | 78 | % | ✓ | ✓ | ✓ | |||||||||||||
Fair Isaac Corporation | $ | 1,196 | $ | 10,851 | 24 | % | ✓ | ✓ | ✓ | |||||||||||||
Black Knight, Inc. | $ | 1,177 | $ | 9,522 | 34 | % | ✓ | ✓ | ✓ | ✓ | ||||||||||||
CSG Systems International, Inc. | $ | 997 | $ | 1,647 | 16 | % | ✓ | ✓ | ||||||||||||||
Altisource Portfolio Solutions S.A. | $ | 726 | $ | 303 | 10 | % | ✓ | |||||||||||||||
Peer Group Summary Statistics | ||||||||||||||||||||||
75th %ile | $ | 4,745 | $ | 16,171 | 39 | % | — | — | — | — | — | |||||||||||
Median | $ | 2,628 | $ | 9,520 | 24 | % | — | — | — | — | — | |||||||||||
25th %ile | $ | 1,292 | $ | 3,238 | 16 | % | — | — | — | — | — | |||||||||||
CoreLogic | $ | 1,762 | $ | 3,476 | 21 | % | — | — | — | — | — | |||||||||||
Percent Rank | 34 | % | 26 | % | 40 | % |
Notes:
Data above reflects most recent fiscal year (2019) results when available; if FY19 financial results not yet released at the time of this report, revenue and EBITDA data reflect12-month trailing results for Q4 of 2018 and Q1 - Q3 of 2019. The Committee reviews executive officer pay relative to the median pay of comparable positions in Peer Group companies and, as appropriate, relevant survey data from nationally-recognized consulting and data firms such as Willis Towers Watson, Mercer and Equilar, scoped to a comparable revenue size for us, from both general industry and the high technology sector.
Base Salary
The Committee reviews base salaries annually and adjusts them, if appropriate, to recognize performance, promotions, expansion in scope of responsibilities, and gaps relative to base salaries of similar individuals in the Peer Group and survey data described above. To increase the weighting of variable, performance-based pay in the compensation mix, in recent years the Committee primarily increased salaries for executive officers, only in recognition of a promotion, an expansion of role and responsibilities, or sustained performance, as well as to progressively address significant gaps with competitive market rates.
In 2019, the Committee increased the base salaries for Mr. Martell and Mr. Balas to partially address significant gaps in their compensation levels compared to competitive market rates. Both Messrs. Martell and Balas made major contributions to the successful execution of the Company’s strategic plan in 2019. No other currently-employed NEO received a base salary increase in 2019 (although Mr. Pinkston did receive a base salary increase in 2019 prior to his separation).
Annualized base salaries of the executive officers for 2018 and 2019 are set forth in the table below:
Named Executive Officer | 2018 | 2019 | ||||||
Frank D. Martell | $ | 780,000 | $ | 825,000 | ||||
James L. Balas | $ | 450,000 | $ | 475,000 | ||||
Barry M. Sando | $ | 550,000 | $ | 550,000 | ||||
Francis Aaron Henry (1) | — | $ | 475,000 | |||||
Arnold Pinkston (2) | $ | 425,000 | $ | 450,000 |
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Annual Incentives (ICP)
The ICP rewards executive officers for financial and operating performance relative to rigorous, predetermined financial goals and strategic objectives. As part of our business planning process, management considers a range of value drivers based on anticipated market demand including estimated mortgage origination volumes, prior year performance, business strategy and risk factors. The Committee then evaluates management’s recommendations on performance measures and goals in the context of stockholder expectations and establishes final ICP financial and strategic goals, including performance and payout ranges.
2019 Target Incentives.The Committee established the following 2019 target bonus opportunities for our NEOs:
ICP Bonus | ||||||||||||||||||||||||
Name | Title | Base Salary ($000s) | % of Salary | Target ($000s) | Maximum ($000s) | |||||||||||||||||||
Frank D. Martell | President and CEO | $ | 825 | 150 | % | $ | 1,238 | $ | 2,475 | |||||||||||||||
James L. Balas | Chief Financial Officer | $ | 475 | 100 | % | $ | 475 | $ | 950 | |||||||||||||||
Barry M. Sando | Managing Director, Underwriting and Workflow Solutions | $ | 550 | 100 | % | $ | 550 | $ | 1,100 | |||||||||||||||
Francis Aaron Henry (1) | Chief Legal Officer and Corporate Secretary | $ | 475 | — | — | — | ||||||||||||||||||
Arnold Pinkston | Former Chief Legal Officer | $ | 450 | 80 | % | $ | 360 | $ | 720 |
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ICP Performance Metrics.For 2019, the Committee approved the following three performance measures for the ICP:
Revenue (GAAP)
Adjusted EBITDA — anon-GAAP metric calculated as net income from continuing operations adjusted for interest, taxes, depreciation and amortization, stock compensation,non-operating gains/losses and other adjustments.
Free Cash Flow (FCF) — anon-GAAP metric calculated as net cash from continuing operating activities, less capital expenditures for purchases of property and equipment, capitalized data and other intangible assets.
The Committee approved these measures in order to reflect a balanced perspective on performance reflecting growth, profitability and cash management. The Committee believes these measures drive the valuation of our stock. Please seeAppendix A for a detailed reconciliation of adjusted EBITDA and FCF to the most directly comparable GAAP financial measures.
For 2019, 75% of the ICP opportunity was based on our financial performance goals and 25% on established strategic objectives for each executive officer. Results for achievement of revenue, adjusted EBITDA, and FCF goals were weighted as follows in determining ICP funding:
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Threshold Performance Requirement.For 2019, no award was payable unless our 2019 adjusted net income exceeded $62.5 million.
Funding Formula for Financial Results.At least 80% of targeted performance (threshold) must be achieved to generate any funding for that metric. The funding formula is set out in the table below. For performance levels between threshold and target or between target and maximum, the funding is determined by linear interpolation. Notwithstanding the actual ICP funding results, the Committee retains the discretion to decrease the actual payment for an ICP participant.
Performance Level | Less than Threshold | Threshold | Target | Maximum and Above | ||||||||||||
Performance as % of Target | < 80% | 80% | 100% | 120% | ||||||||||||
Payout as a % of Target | 0% | 34% | 100% | 200% |
The sum of the weighted results of the three financial metrics funds the ICP awards. For 2019, NEOs received 75% of their ICP payout based on financial results. Awards for the remaining 25% of the funded amount were based on an evaluation of performance on strategic goals. For outstanding performance on strategic objectives, the ICP structure permits the strategic goal payment percentage of up to 200% of target.
Financial results were measured at the corporate level for NEOs except for Mr. Sando, whose financial results were weighted 33.3% on the corporate metrics previously outlined and 66.7% on revenue and adjusted EBITDA results for the business segment he manages. Funding for his strategic objectives component was determined by corporate results as for the other NEOs.
Determining Awards for Strategic Goal Achievement.The Committee determined that three major areas of our business strategy should continue to be used for ICP strategic goals: (1) growth and innovation, (2) operational excellence, and (3) high performing organization. The Committee believed that these were the critical strategic focal areas for accelerating achievement of our long-strategy performance which are not otherwise measurable through annual financial performance metrics. Each executive officer was assigned specific objectives within each category.
The CEO provided the Committee with his assessment of individual results on strategic goals for the other executive officers and the Committee assessed the achievement level of the CEO. Based on these assessments, the Committee determined strategic goal achievement awards for each of the NEOs.
2019 Financial Results and Funding. Due to a delay in the timing of the AMC reset and the wind down ofnon-core platforms, management recommended, and the Committee exercised its discretion to approve, an increase in the 2019 revenue target from $1,605 billion to $1,715 billion, which is reflected in the table below. The increased revenue target reduced the overall ICP funding for financial results from 140.7% to 128.7% of target. The funding calculation is presented in the table below.
Financial Performance Metric | Weight | Target ($000) | Actual 2019 Results ($000) | Percentage Achieved | Funding Percentage | |||||||||||||||
2019 Revenue | 34% | $ | 1,715 | $ | 1,762.2 | 102.8% | 113.8% | |||||||||||||
2019 Adjusted EBITDA | 33% | $ | 450 | $ | 497.6 | 110.6% | 152.9% | |||||||||||||
2019 Free Cash Flow | 33% | $ | 247.5 | $ | 257.4 | 104.0% | 120.0% | |||||||||||||
Total | 100% | 105.7% | 128.7% |
Strategic Goal Results and Awards.Following a detailed review of individual performance objectives,the Committee assigned a percentage of target for each executive officer as indicated in the table below. In addition to the objectives that were set at the beginning of the year, the Committee took into consideration strategic actions undertaken by the executives that were identified by management during the year in response to the challenging economic environment. Mr. Henry was not eligible for an ICP award for the 2019 performance year given that he joined the Company in November 2019, but as noted above will receive a bonus payment of $385,000 for 2019. Mr. Pinkston did not receive an annual incentive payout given his departure in June 2019.
ICP Target | Financial Results | Individual Strategic Results | ICP Award | |||||||||||||||||||||||||||||||||
Name | ($000) | % of Target | 75% Weight | % of Target | 25% Weight | % of Target | Award ($000) | |||||||||||||||||||||||||||||
Frank D. Martell | $ | 1,238 | 128.7 | % | 96.6 | % | 169.8 | % | 42.4 | % | 139 | % | $ | 1,720 | ||||||||||||||||||||||
James L. Balas | $ | 475 | 128.7 | % | 96.6 | % | 169.6 | % | 42.4 | % | 139 | % | $ | 660 | ||||||||||||||||||||||
Barry M. Sando (1) | $ | 550 | 142.6 | % | 107.0 | % | 128.8 | % | 32.2 | % | 139 | % | $ | 765.5 | ||||||||||||||||||||||
Arnold A. Pinkston (2) | $ | 360 |
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Long-Term Incentives (LTI)
Our LTI program is designed to motivate and reward profitable growth and stockholder value creation through awards of performance-based and time-vested equity. The Committee believes that using performance-based and time-vesting equity vehicles reinforces both performance and retention of key executives while aligning their interests with those of our stockholders and encouraging an appropriate level of risk-taking.
Long-term incentives represent the largest component of executive officer compensation. In 2019, we granted 50% of total LTI value in PBRSUs and 50% in RSUs.
The Committee may modify the target awards in consideration of any factor it considers relevant including competencies, skills, prior experiences, scope of responsibility and accountability within the organization, and the LTI awards made by Peer Group companies to similarly-situated executive officers.
LTI Targets.For 2019, the Committee approved awards at target for our NEOs:
Base Salary | Target LTI | |||||||||||||
Name | Title | ($000s) | % of Salary | ($000s) | ||||||||||
Frank D. Martell | President and CEO | $ | 825 | 480 | % | $ | 3,960 | |||||||
James L. Balas | Chief Financial Officer | $ | 475 | 200 | % | $ | 950 | |||||||
Barry M. Sando | MD, Underwriting and Workflow Solutions | $ | 550 | 200 | % | $ | 1,100 | |||||||
Francis Aaron Henry (1) | Chief Legal Officer | $ | 475 | 200 | % | $ | 950 | |||||||
Arnold A. Pinkston (2) | Former Chief Legal Officer | $ | 450 | 200 | % | $ | 900 |
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LTI Components. The following chart summarizes our LTI components for 2019:
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PBRSUs Granted in 2019.The 2019 PBRSUs are earned based on adjusted EPS achieved relative to annual targets for each of the three years of the performance period 2019 through 2021.
Shares earned are calculated as described below. Participants earn the greater number of PBRSUs resulting from Step 1 or Step 2 (described in Step 3).
Step 1: Calculate PBRSUs Earned Annually
As illustrated in the graphic below, adjusted EPS and relative TSR results determine the portion of the PBRSUs that are earned each year.
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(A) PBRSUs Eligible to be Earned Based on Annual Adjusted EPS Results (% of Total PBRSUs Granted) | ||||
2019 | 2020 | 2021 | ||
30% | 50% | 20% |
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(B) PBRSUs Earned Based on Adjusted EPS Results | ||||||||
Performance Level | Adjusted Annual EPS Results (% of Target) | Accrued PBRSUs Earned (% of Target) | ||||||
Less than Threshold | < 80% | 0% | ||||||
Threshold | 80% | 50% | ||||||
Target | 100% | 100% | ||||||
Maximum+ | 120% | 200% |
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Step 2: Calculate PBRSUs Earned at End of3-Year Performance Period
Calculations of PBRSUs earned at the end of the3-year performance period use the same schedules as for annual calculations described in Step 1 above, but over a3-year period.
Step 3: PBRSUs earned equals the greater of cumulative PBRSUs earned in the 3 annual calculations during the grant cycle (from Step 1) or the3-year calculation (from Step 2)
2019 Performance for 2019 PBRSU Grant.We achieved strong financial and operating results in the first year of the 2019 PBRSU performance period despite the macro-economic headwinds, as evidenced by adjusted EPS outcomes at above-target performance levels.
PBRSUs | % of Award Subject to Crediting in 2019 | Adjusted EPS Target | Adjusted EPS Results | Adjusted EPS Performance | % of Award Credited for Adjusted EPS Results | % of Award Credited Adjusted for TSR Modifier | ||||||||||||||||||
2019 | 30 | % | $ | 2.64 | $ | 2.83 | 126 | % | 60 | % | 45 | % |
Restricted Stock Units Granted in 2019.Vesting of RSUs granted in 2019 was subject to the achievement of $62.5 million in adjusted net income for 2019. Adjusted net income results exceeded this threshold.
RSUs vest in three equal installments on the first, second, and third anniversaries of the grant date. These awards encourage executive officer retention and align the interests of executive officers with those of stockholders.
2019 LTI Awards.2019 long-term incentive awards were made at targeted grant value for each of the NEOs, other than Mr. Henry who did not receive an LTI award in 2019. 2019 grant awards are presented in the table below (with award amounts rounded to the nearest hundred).
2019 Grant Values | ||||||||
Named Executive Officer | RSUs | PBRSUs (1) | ||||||
Frank D. Martell | $ | 1,980,000 | $ | 1,980,000 | ||||
James L. Balas | $ | 475,000 | $ | 475,000 | ||||
Barry M. Sando | $ | 550,000 | $ | 550,000 | ||||
Arnold A. Pinkston | $ | 450,000 | $ | 450,000 |
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PBRSUs Settled After 2019.PBRSUs granted in 2017 were paid out after the end of the 2017-2019 performance period. The calculation of the payout is presented in the table below. Actual adjusted EPS resulted in above-target performance on both an annual and3-year calculation basis with the sum of the annual results at 131.44% slightly above the3-year results of 129%. As performance did not trigger a payout above 150% of target, there was no modification from the TSR Modifier and the payout was set at 131.44%.
2017-2019 PBRSU Performance Period | % of Award Subject to Crediting for Annual Performance | Adjusted EPS Target | Adjusted EPS Results | % of Budget | % of Target | % of Award Subject to Credit for Adjusted EPS Results | % Vesting- Adjusted for TSR Modifier | |||||||||||||||||||||
2017 | 30 | % | $ | 2.35 | $ | 2.37 | 101 | % | 104 | % | 31 | % | N/A | |||||||||||||||
2018 | 50 | % | $ | 2.49 | $ | 2.72 | 109 | % | 146 | % | 73 | % | N/A | |||||||||||||||
2019 | 20 | % | $ | 2.64 | $ | 2.83 | 107 | % | 136 | % | 27 | % | N/A | |||||||||||||||
Cumulative | 100 | % | $ | 7.48 | $ | 7.92 | 106 | % | 129 | % | 129 | % | N/A | |||||||||||||||
Sum of Each Year | 131.44 | % |
The number of shares earned from the 2017 PBRSU award is presented in the table below.
2017 PBRSU Grant — 2019 Vesting | ||||||||
Name | Target | Earned | ||||||
Frank D. Martell | 41,421 | 54,442 | ||||||
James L. Balas | 10,844 | 14,252 | ||||||
Barry M. Sando | 14,034 | 18,445 |
Timing of Equity Awards.After Committee approval, we generally issue annual equity awards to executive officers on the second day on which the NYSE is open for trading following the filing of our Annual Report onForm 10-K, using the last sale price reported for a share of our common stock on the NYSE on that date. Grants to new hires or other grants outside the annual grant cycle follow the same methodology, except that awards are generally issued on the 20th day (or the next succeeding business day if the market is closed on the 20th day) of the third month of the calendar quarter that follows the date on which the Committee approved the awards.
SpecialOne-Time A30 Award. In 2018, the Compensation Committee approved a specialone-time award (the “A30 Award”) to senior leaders to provide a focused incentive for achievement of an aggressive adjusted EBITDA margin expansion between 2018 and 2020. The award is also intended to enhance executive retention and promote the achievement of major strategic initiatives (e.g., workflow automation and adoption of related
technologies) that improve EBITDA margins. In 2019, Mr. Henry received an A30 PBRSU of $475,000. No other NEO received an A30 award or any time of incremental awards beyond their regular 2019 grants (see FY2018 proxy for additional information on grant performance ranges and payout).
Employment Inducement Award
Mr. Henry joined CoreLogic as its Chief Legal Officer and Corporate Secretary in November 2019. In order to provide an inducement for Mr. Henry to join CoreLogic, the Committee approved a total payment of $500,000 in cash which will be paid in two installments in March and December of 2020. As such, the value of such award will be disclosed in the Summary Compensation Table next year as part of the 2021 proxy.
Retirement and Employee Benefit Plans
Executive officers are entitled to the same benefits generally available to all full-time employees (subject to fulfilling any minimum service requirement) including the 401(k) plan, healthcare, life insurance and other welfare benefit programs. In designing these benefits, we seek to provide an overall level of benefits that is competitive with those offered by similar companies in the markets in which we operate. We believe that these employee benefits provide a valuable recruiting and retention mechanism for our executive officers and enable us to compete more successfully for qualified executive talent.
Executive Supplemental Benefit Plan and the Pension Restoration Plan.Mr. Sando became a participant in our Executive Supplemental Benefit Plan (the “Executive Supplemental Benefit Plan”) prior to its closure to new participants in 2010. On November 18, 2010, we amended the Executive Supplemental Benefit Plan to freeze benefits effective as of December 31, 2010. As a result, compensation earned after 2010 is not considered in determining covered compensation and final average compensation; service after 2010 is not recognized, except for vesting purposes. Mr. Sando is also a participant in the Pension Restoration Plan, which is limited to individuals who became participants before 1995. Explanation of these plans can be found in the Pension Benefits table below.
Deferred Compensation Plan.The Deferred Compensation Plan is anon-qualified retirement plan that allows eligible participants to defer up to 80% of their salary and annual incentive bonus. Participation is limited to executive officers and certain other key employees. In 2010, we amended the Deferred Compensation Plan to provide additional Company contributions in the form of 401(k) restoration.
Other Benefits.We also maintain an executive life insurance program for executive officers and other key employees. This program provides the participant with up to two times their annualized base salary (up to a maximum of $1 million) in group universal life insurance.
Further details regarding perquisites are found in the 2019 Summary Compensation Table and accompanying footnotes.
Role of the Committee and the Chief Executive Officer
The Committee is composed solely of independent members of our Board. The Committee reviews and approves executive officer base salaries, annual incentive bonus programs, long-term incentive compensation and other incentive and executive benefit plans. The Committee, in consultation with its independent compensation consultant, analyzes the reasonableness of executive officer compensation, in part by reviewing compensation data from comparable companies and from relevant other industry sources.
Decisions regarding compensation of the CEO are made solely by the Committee based on its deliberations with input from its independent compensation consultant. Decisions regarding other executive officers are made by the Committee after considering recommendations from the CEO as appropriate, as well as input from the Committee’s independent compensation consultant. Our CEO and, as appropriate, Chief Legal Officer, Chief Financial Officer and Chief Human Resources Officer, may attend the portion of the Committee’s meetings where individual executive officer performance is discussed. Only Committee members may vote on executive officer compensation decisions.
The Committee regularly meets in executive session with its independent compensation consultant.
Role of Independent Compensation Consultant
The Committee retained Pay Governance LLC as its independent compensation consultant to advise on executive officer compensation for 2019. The consultant generally advises the Committee on all aspects of the executive compensation program design and governance process. During 2019, as part of its engagement with the Committee, the independent compensation consultant:
advised on the selection of a peer group of companies for executive officer compensation comparison purposes
provided guidance on industry best practices, emerging trends and developments in executive officer compensation, and investor views of compensation design and practices
consulted on incentive design
advised on determining the total compensation of each of our executive officers and the material elements of total compensation, including (1) annual base salaries, (2) target cash bonus amounts, and (3) the structure and target amount of long-term incentive awards
Consulted onnon-employee director compensation, and
Assisted on a compensation risk assessment
The Committee retained its independent compensation consultant directly, although in carrying out assignments, the consultant also interacted with Company management on behalf of the Committee. Pay Governance performed no services for the Company, and the Committee does not believe the independent compensation consultant’s work has raised any conflict of interest. The Committee has the sole authority to select, retain, and terminate the independent compensation consultants.
Adjustment or Recovery of Awards (Claw-backs)
The Company maintains a recoupment policy that enables recovery of performance-based compensation to the extent that it is later determined that applicable performance goals were not actually achieved taking into account a financial restatement or ethical misconduct. We also added claw-backs in employment agreements for all executive officers. This policy applies to all performance-based incentive plans including but not limited to the annual incentive cash bonus and performance-based equity awards described above.
Anti-Hedging and Pledging Policy
The Company maintainsWe maintain a policy that prohibitsrestricts our directors, executive officers and other employees from engaging in hedging or monetization transactions, including prepaid variable forwards, equity swaps, collars and exchange funds, that may permit continued ownership of Company securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. Pursuant to our policy, we also prohibit our directors, executive officers and other employees from engaging in transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, as well as holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.loan (except in limited circumstances if the person pledging the securities is able to demonstrate that he or she has the financial capacity to repay the loan without resort to the pledged securities). No such exception is currently in place.
Executive Stock Ownership
Board and Board Committee Matters
The Board currently consists of 12 directors. Pursuant to the listing rules of the NYSE, a majority of the Board must be independent. A director will not qualify as independent unless the Board affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). To assist in its determination of director independence, the Board has adopted categorical director independence standards, which are contained in our Corporate Governance Guidelines. The Corporate Governance Guidelines and Retention Requirements
We require our executive officersare available to own a fixed amountstockholders on the Investors section of our stock.website under Leadership & Governance-Highlights at www.corelogic.com.
In accordance with applicable NYSE listing rules and our categorical director independence standards, the Board has affirmatively determined that each of Messrs. Chatham, Curling, Dorman, Folino, O’Brien, Raina, Shepherd and Walker, and Mses. Munce, Patenaude and Studenmund is “independent”. Mr. Martell is not considered independent because he serves as our President and Chief Executive Officer. In addition, Mary Lee Widener, who served on our Board from 2010 through the 2020 Annual Meeting, was also considered “independent” under the NYSE listing standards.
Committees of the Board; Committee Charters
There are currently four standing committees of the Board: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Strategic Planning and Acquisition Committee. In addition to the four standing committees, the Board may approve, and has from time to time approved, the creation of special committees or subcommittees to act on behalf of the Board.
Each of the standing committees operates under a written charter adopted by the Board. The rigorous guidelinescharters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are basedavailable on a multiplethe Investors section of base salaryour website under Leadership & Governance-Highlights at www.corelogic.com. Each committee reviews and reassesses the adequacy of its charter annually, conducts annual evaluations of its performance with respect to its duties and responsibilities as outlinedlaid out in the charter, and reports regularly to the Board with respect to the committee’s activities.
The current members of the Committees are identified below:
Audit Committee
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Covered officers have five years from their date of hire or promotion to the covered position to reach the ownership requirement. All Company securities owned outright or earned and subject only to time-based
vesting restrictions count toward the requirement; stock options do not count toward the ownership requirement. Furthermore, we have adopted a share retention requirement which provides that all covered executives must hold at least 50% of net (after tax) shares until the stock ownership guidelines described above are achieved. All current NEOs have met their ownership requirements or still have time remaining to reach the ownership requirement.
Actual Share Ownership vs. Minimum Share Ownership Requirement
(As multiple of base salary)
Employment Agreements and Severance Arrangements
Each currently employed executive officer is party to an employment agreement with us. The Committee believes that offering employment agreements to key executive officers is consistent with peer practices and serves as an effective retention tool. Each agreement is individually negotiated and terms may vary. For additional information regarding the terms of the employment agreements, including severance arrangements that we have entered into with our executive officers see “Employment Agreements” below.
Change in Control Agreements
Equity awards are currently issued under the 2018 Plan, which was approved by our stockholders at our annual meeting held in May 2018. Prior to the approval of the 2018 Plan, we issued share-based awards under the 2011 Plan, as amended. The 2011 Plan and 2018 Plan do not include an automatic “single trigger” change in control vesting provision. Instead, both plans include a change in control provision where automatic accelerated vesting of an award in connection with a change in control will only occur if an acquirer or successor to us fails to assume or continue the awards or the awards otherwise do not survive the transaction. Additionally, award agreements include “double-trigger” severance protections and provide for accelerated vesting of awards that remain outstanding following a change in control transaction in the event of a termination without cause following a change in control.
The Deferred Compensation Plan generally provides for accelerated vesting of awards or benefits, as the case may be, in the event of a change in control of the Company. In addition, the Executive Supplemental Benefit Plan provides that when a participant incurs an involuntary separation from service without good cause subsequent to a change in control, payment of benefits will commence in the same manner and in the same amount as if the participant had attained his or her normal retirement age on the date of termination.
In addition to the plan and award agreement provisions described above, we have entered into a change in control agreement (a “Change in Control Agreement”) with each of our NEOs. Under the Change in Control Agreement, a “change in control” means the consummation of any one of the following:
a merger or consolidation of the Company in which our stockholders end up owning less than 50% of the voting securities of the surviving entity
the sale, transfer or other disposition of all or substantially all of our assets or the complete liquidation or dissolution of the Company
a change in the composition of our Board of Directors over atwo-year period as a result of which fewer than a majority of the directors are incumbent directors, as defined in the agreement, or
the acquisition or accumulation by any person or group, subject to certain limited exceptions, of at least 30% of our voting securities
If the termination of our executive officer’s employment occurs without cause or if the executive officer terminates his employment for good reason within the twenty-four-month period following a change in control, we will pay the following benefits in one lump sum in the month following the month in which the date of the termination occurs:
the executive officer’s base salary through and including the date of termination and any accrued but unpaid annual incentive bonus
between two and three times the executive officer’s target annual cash bonus amount established for the fiscal year in which the termination occurs, and
between two and three times the executive officer’s annual base salary in effect immediately prior to the date of termination
Furthermore, under the Change in Control Agreement, for a period ranging from twenty-four tothirty-six months and subject to the covered executive officer’s continued payment of the same percentage of the applicable premiums as the executive officer was paying immediately prior to the date of termination or, if more favorable to the executive officer, at the time at which the change in control occurred, we will provide medical and dental coverage pursuant to COBRA for the executive officer (and if applicable, the executive officer’s dependents). To the extent that the executive officer cannot participate in the plans previously available, we will provide such benefits on the sameafter-tax basis as if they had been available. These obligations are reduced by any welfare benefits made available to the executive officer from subsequent employers.
The Change in Control Agreement provides that if any excise tax imposed by Section 4999 of the Code (or any similar tax), applies to the payments, benefits or other amounts payable under the agreement or otherwise, including without limitation, any acceleration of the vesting of outstanding stock options, restricted stock or performance shares (collectively, the “Total Payments”), then the Total Payments will be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) will be $1.00 less than the amount which would cause the Total Payments to be subject to the excise tax; provided that such reduction to the Total Payments will be made only if theafter-tax benefit to the executive officer is greater after giving effect to such reduction than if no such reduction had been made. This type of provision is often referred to as a “modifiedcut-back,” and is included because the Change in Control Agreement does not provide for any type of “gross up” or similar benefit.
The Change in Control Agreement had an initial term through December 31, 2011 and is automatically extended for additionalone-year periods unless either party notifies the other not later than the preceding January 1 that it does not wish to extend the term for an additional year. All agreements with current executive officers have since been extended through December 31, 2020. For a description of the calculations and further explanation of the payments due to the executive officers upon termination of employment and/or a change in control, see Potential Payments upon Termination or Change in Control tables below.
Impact of Tax and Accounting
As a general matter, the Committee considers the various tax and accounting implications of the compensation vehicles we employ. When determining amounts of long-term incentive grants to executive officers and employees, the Committee examines the accounting cost associated with the grants. Under accounting guidance, grants of stock options, RSUs and PBRSUs result in an accounting charge for the Company over their vesting period. The accounting charge is equal to the fair value of the instruments being issued. For RSUs, the cost is generally equal to the fair value of the stock on the date of grant times the number of shares granted. This expense is amortized over the requisite service period. With respect to stock options, we calculate the fair value of the option and take that value into account as an expense over the vesting period, after adjusting for forfeitures. For PBRSUs, we calculate the fair value of the award upon grant and adjust the
value to be expensed on a quarterly basis over the performance period based on expected award payouts, after adjusting for forfeitures.
Section 162(m) of the Code generally prohibits a publicly-held company from deducting compensation paid to a current or former NEO that exceeds $1.0 million during the tax year. Certain awards granted before November 2, 2017 that were based upon attainingpre-established performance measures that were set by the Committee under a plan approved by the Company’s stockholders, as well as amounts payable to former executive officers pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1.0 million deductibility limit.
As one of the factors in its consideration of compensation matters, the Committee noted this deductibility limitation. However, the Committee has the flexibility to take any compensation-related actions that it determines are in the best interests of the Company and our stockholders, including awarding compensation that may not be deductible for tax purposes. There can be no assurance that any compensation will in fact be deductible.
The Compensation Committee has reviewed and discussed the foregoing CD&A with management. Based on its review and discussions, the Compensation Committee has recommended to the Board that the CD&A be included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2019 and in the Company’s proxy statement for its 2020 Annual Meeting of stockholders.
Members of the Compensation Committee
J. David Chatham, ChairJohn C. Dorman*
Paul F. Folino
Pamela H. Patenaude
Meetings in 2019: six
* Our Board has determined that each of Messrs. Walker and Dorman is an “audit committee financial expert” within the meaning of the SEC’s rules and regulations and that each member of our Audit Committee is “independent” under applicable SEC rules and the listing standards of the NYSE and is
• overseeing the integrity of our financial reporting processes in consultation with the independent auditor, management and our internal audit function;
• reviewing internal auditing procedures and results;
• appointing, compensating, retaining, evaluating and overseeing our independent registered public accounting firm;
• engaging with our compliance and risk management executives to review the state of enterprise risk management and compliance programs with a view to understanding the steps management has taken to monitor and control our major risk exposures;
• reviewing with internal counsel the state of litigation, claims and regulatory matters and overseeing our compliance with legal and regulatory matters;
“financially literate” under the listing standards of the NYSE. | • discussing with management, internal audit and external advisors the state of internal controls and our practices with respect to financial disclosure; • directing and supervising investigations into matters within the scope of its duties; and • reviewing with the independent registered public accounting firm the plan and results of its audit and determining the nature of other services to be performed by, and fees to be paid to, such firm. The Audit Committee has established procedures to receive, retain and address complaints regarding accounting, internal accounting controls or auditing matters, and for the submission by our employees or third parties of concerns regarding questionable accounting or auditing matters or other ethics and compliance-related matters. Our 24-hour, toll-free hotline is available for the submission of such concerns or complaints at 1-888-632-5395 or concerns or complaints may also be reported online at https://corelogic.alertline.com. To the extent required by applicable law, individuals wishing to remain anonymous or to otherwise express their concerns or complaints confidentially are permitted to do so. |
Compensation Committee
• reviewing and recommending to the Board the form and level of non-management director compensation. The Compensation Committee may delegate specific responsibilities to a |
Committee Advisors
Pay Governance LLC (“Pay Governance”) was initially retained as the Compensation Committee’s independent compensation consultant in 2015 and continues to be engaged by the Compensation Committee. The Compensation Committee also seeks input from our Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer and Chief Legal Officer when making decisions regarding compensation matters. During 2019, Pay Governance attended six of the seven Compensation Committee meetings.
Pay Governance provided to the Compensation Committee, among other things, guidance as to our peer group for 2019 compensation for executive compensation comparison purposes; director compensation for 2019; and determining 2019 total compensation of each of our executive officers and the material elements of total compensation, including (1) annual base salaries, (2) target cash bonus amounts and (3) the structure and target amount of long-term incentive awards.
Pay Governance did not perform any services for the Company and the Compensation Committee does not believe that the services performed by Pay Governance raised any conflict of interest. The Compensation Committee regularly reviews the services provided by its independent compensation consultant.
Committee Independence
Our Board has determined that each member of our Compensation Committee is “independent” under applicable listing standards of the NYSE. In making its independence determination for each member of the Compensation Committee, our Board considered whether the director has a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. In addition, our Board has determined that each of Messrs. Chatham, Folino, O’Brien and Mses. Studenmund and Munce is a “non-employee director” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code (the “Tax Code”).
Equity Awards Committee
The Equity Awards Committee was created by the Board in 2016 and has been delegated limited authority to approve and establish the terms of equity awards granted to eligible participants under our equity incentive plans. Mr. Martell is the sole committee member.
Nominating and Corporate Governance Committee