4955 Technology Way
Boca Raton, Florida 33431
Telephone: (561)893-0101
April 9, 2020March 17, 2023
Dear Shareholder:
You are cordially invited to attend the 20202023 annual meeting of the shareholders of The GEO Group, Inc. We will hold the meeting virtually, conducted via live audio webcast on Tuesday, May 19, 2020,Friday, April 28, 2023, at 10:00 A.M. (EDT).
This year we are furnishing proxy materials to our shareholders primarily on the Internet rather than mailing paper copies of the materials to each shareholder. As a result, most of you will receive a Notice of Internet Availability of Proxy Materials instead of paper copies of this proxy statement and our annual report. The notice contains instructions on how to access the proxy statement and the annual report over the Internet, as well as instructions on how to request a paper copy of our proxy materials. This process significantly lowers the costs of printing and distributing our proxy materials. On or about April 9, 2020,March 17, 2023, we mailed to shareholders a Notice of Internet Availability of Proxy Materials.
Your vote is very important to us. Whether or not you plan to attend the meeting virtually, your shares should be represented and voted. After reading the enclosed proxy statement, please vote your shares as soon as possible. Shareholders may vote via the Internet at www.virtualshareholdermeeting.com/GEO2020,GEO2023, by telephone, or by completing and returning a proxy card. Submitting a vote before the annual meeting will not preclude you from voting virtually at the meeting should you decide to attend. If you wish to participate in the meeting, please refer to pages 52-5365-66 for additional guidelines.
Sincerely,
George C. Zoley
Chairman of the Board,
Chief Executive Officer and FounderChairman
THE GEO GROUP, INC.
4955 Technology Way
Boca Raton, Florida 33431
Telephone: (561)893-0101
Notice of Annual Meeting of Shareholders on May 19, 2020April 28, 2023
April 9, 2020March 17, 2023
The annual meeting of the shareholders of The GEO Group, Inc. will be held on Tuesday, May 19, 2020,Friday, April 28, 2023, at 10:00 A.M. (EDT). The meeting will be held virtually, conducted via live audio webcast for the purpose of considering and acting on the following proposals:
| (1) | To elect |
| (2) | To ratify the appointment of Grant Thornton LLP as our independent registered public accountants for the fiscal year |
| (3) | To hold an advisory vote to approve named executive officer compensation; |
| (4) | To hold an advisory vote on the frequency of the advisory vote on executive compensation; and |
To vote on the shareholder proposal set forth in the proxy statement, if properly presented before the meeting. |
Only shareholders of GEO’s common stock of record at the close of business on March 11, 2020,7, 2023, the record date and time fixed by the board of directors, are entitled to notice of and to vote at the annual meeting. Additional information regarding the proposals to be acted upon at the annual meeting can be found in the accompanying proxy statement.proxy.
The Securities and Exchange Commission (“SEC”) has adopted a “Notice and Access” rule that allows companies to deliver a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) to shareholders in lieu of a paper copy of the proxy statement and related materials and the Company’s Annual Report to Shareholders (the “Proxy Materials”). The Notice of Internet Availability provides instructions as to how shareholders can access the Proxy Materials online, contains a listing of matters to be considered at the meeting, and sets forth instructions as to how shares can be voted. Shares must be voted either by telephone, online or by completing and returning a proxy card. Shares cannot be voted by marking, writing on and/or returning the Notice of Internet Availability. Any Notices of Internet Availability that are returned will not be counted as votes. Instructions for requesting a paper copy of the Proxy Materials are also set forth on the Notice of Internet Availability.
By Order of the Board of Directors,
Joe Negron
Senior Vice President, Legal Services, General Counsel
and Corporate Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING TO BE HELD ON TUESDAY, MAY 19, 2020.FRIDAY, APRIL 28, 2023.
GEO’s proxy statement and annual report are available online at: www.proxyvote.com
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THE GEO GROUP, INC.
4955 Technology Way
Boca Raton, Florida 33431
Telephone: (561)893-0101
April 9, 2020March 17, 2023
The GEO Group, Inc. (“GEO,” the “Company,” “we” or “us”) is furnishing this proxy statement in connection with the solicitation of proxies by our board of directors (the “Board of Directors” or “Board”) for use at the annual meeting of shareholders on May 19, 2020,April 28, 2023, at 10:00 A.M., Eastern Daylight Time. This year’s annual meeting will be a virtual meeting of shareholders, conducted via live audio webcast. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting via a live audio webcast by visiting www.virtualshareholdermeeting.com/GEO2020.GEO2023. Please note that the proxy card provides a means to withhold authority to vote for any individual director nominee. Also note that the format of the proxy card provides an opportunity to specify your choice between approval, disapproval or abstention with respect to any individual director nominee and the proposals indicated on the proxy card. A proxy card which is properly executed, returned and not revoked will be voted in accordance with the instructions indicated. A proxy voted by telephone or the Internet and not revoked will be voted in accordance with the shareholder’s instructions. If no instructions are given, proxies that are signed and returned or voted by telephone or the Internet will be voted as follows:
“FOR” the election of the nominated directors for the ensuing year;
“FOR” the proposal to ratify the appointment of Grant Thornton LLP as the independent registered public accountants of GEO for the fiscal year 2020;2023;
“FOR” the advisory approval of the resolution on named executive officer compensation;
“FOR” the option of one year as the preferred frequency for future advisory votes on executive compensation; and
“AGAINST”AGAINST” the shareholder proposal regarding an annual Lobbying Report,a third-party racial equity audit and report, if properly presented before the meeting.
Under New York Stock Exchange rules, brokerage firms have authority to vote shares on routine matters for which their customers do not provide voting instructions. The ratification of the appointment of Grant Thornton LLP as our independent registered public accountants for 20202023 is considered a routine matter. As a result, if you hold your shares through a broker and do not direct the broker how to vote your shares on this routine matter, your broker may vote the shares on your behalf.
Under New York Stock Exchange rules, the election of directors, the advisory vote to approve named executive officer compensation, the advisory vote on the frequency for the advisory vote on executive compensation and the shareholder proposal are not considered a routine matter.matters. As a result, if a brokerage firm does not receive voting instructions from the beneficial owner of shares held by the firm, those shares will not be voted and will be considered brokernon-votes with respect to those matters. A brokernon-vote will have no effect on the election of directors, the advisory vote to approve named executive officer compensation, the advisory vote on the frequency of the advisory vote on executive compensation and the shareholder proposal.
This proxy statement, the notice of annual meeting, the proxy card and our 20192022 annual report will be mailed or made accessible via the Internet on or about April 9, 2020.March 17, 2023.
Management is not aware of any other matters to be presented for action by shareholders at the annual meeting.
Holders of GEO common stock at the close of business on March 11, 2020,7, 2023, the record date, will be entitled to one vote for each share of common stock outstanding in their name on the books of GEO at that date. On March 11, 2020,7, 2023, GEO had 122,375,277124,568,023 shares of common stock outstanding.
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The presence, in person or by proxy, of at least a majority of the total number of shares of common stock outstanding on the record date will constitute a quorum for purposes of the annual meeting. The election of
directors requires a majority of the votes cast. The appointment of Grant Thornton LLP will be ratified if the number of votes cast in favor of ratification exceeds the number of votes cast against ratification. The advisory vote to approve named executive officer compensation will be approved if the number of votes cast in favor of approval exceeds the number of votes cast against approval. The alternative receiving the greatest number of votes with respect to the advisory vote on the frequency of the advisory vote on executive compensation will be considered the frequency that shareholders approve. The shareholder proposal will be approved if the number of votes cast in favor of approval exceeds the number cast against approval. Shares of common stock represented by proxies that reflect abstentions or “brokernon-votes” (i.e., shares held by a broker or nominee which are represented at the annual meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum for the proposal but will not be counted as “votes cast” with respect to the election of directors, the advisory vote to approve named executive officer compensation, the advisory vote on the frequency of the advisory vote on executive compensation and the shareholder proposal. If less than the majority of the outstanding shares of common stock are represented at the annual meeting, a majority of the shares so represented may adjourn the annual meeting to another date and time.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder
Meeting to be held on Tuesday, May 19, 2020.Friday, April 28, 2023 at 10:00 a.m. The Proxy Statement and
2019and 2022 Annual Report to Shareholders are available atwww.proxyvote.com. www.proxyvote.com.
| 1. | This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. |
| 2. | The proxy statement and annual report to security holders is available at www.proxyvote.com. |
| 3. | If you want to receive a paper ore-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Instructions on how to request a paper ore-mail copy can be found on the “Important Notice Regarding the Availability of Proxy Materials” (“Notice”). To request the documents by email, send a blank email with the |
Any person giving a proxy has the power to revoke it any time before it is voted by providing written notice to GEO addressed to the Corporate Secretary, by executing and delivering a later dated proxy, or by participating in the meeting and voting the shares electronically.
The costs of preparation, assembly and mailing this proxy statement and the accompanying materials will be borne by GEO. GEO will also pay the cost of soliciting your proxy and reimbursing brokerage firms and others for forwarding proxy materials to you. Certain of GEO’s officers, directors and employees may participate in the solicitation of proxies by mail, personal interview, letter, fax and telephone without additional consideration.
ELECTION OF DIRECTORS
Director Nominees
GEO’s boardBoard of directorsDirectors is currently comprised of eight (8)ten (10) members. Nine directors are nominated for election at our annual meeting, including seven independent directors, our Executive Chairman and our Chief Executive Officer. All of the nominees are presently directors of GEO. Except for Mr. GordoMs. Koren, who was appointed to GEO’s board of directors subsequent to GEO’s 20192022 annual meeting, all nominees were elected by the shareholders at GEO’s 20192022 annual meeting. Mr. Zoley suggested Mr. GordoEach director is elected to serve a one-year term, with all directors subject to annual election. Anne N. Foreman, who has served on the Board since 2002 is not standing for re-election. Accordingly, she is not included as a prospectivenominee for election at the annual meeting. The Board candidatethanks Ms. Foreman for her years of service to The GEO Group, Inc. and substantial contributions to the NominatingBoard and Corporate Governance Committees for their consideration and evaluation.our shareholders. Effective as of the annual meeting, our authorized number of directors will be reduced to nine.
If instructed, the persons named on the accompanying proxy card will vote for the election of the nominees named below to serve for the ensuing year and until their successors are duly elected and qualified. If any nominee for director shall become unavailable (which management has no reason to believe will be the case), it is intended that the shares represented by the enclosed proxy card will be voted for any such replacement or substitute nominee as may be nominated by the board of directors.
| Director Nominees | Age | Since | Current Positions | |||
Anne N. Foreman | 72 | 2002 | Director | |||
Richard H. Glanton | 73 | 1998 | Director | |||
Jose Gordo | 47 | 2019 | Director | |||
Scott Kernan | 59 | 2018 | Director | |||
Guido Van Hauwermeiren | 58 | 2018 | Director | |||
Christopher C. Wheeler | 73 | 2010 | Director | |||
Julie Myers Wood | 50 | 2014 | Director | |||
George C. Zoley | 70 | 1988 | Chairman and Chief Executive Officer |
| Director Nominees | Age | Since | Current Positions | |||
Thomas C. Bartzokis | 65 | 2022 | Director | |||
Jack Brewer | 44 | 2021 | Director | |||
Jose Gordo | 50 | 2019 | Chief Executive Officer and Director | |||
Scott M. Kernan | 62 | 2018 | Director | |||
Lindsay L. Koren | 45 | 2022 | Director | |||
Terry Mayotte | 63 | 2021 | Director | |||
Andrew N. Shapiro | 63 | 2022 | Director | |||
Julie Myers Wood | 53 | 2014 | Director | |||
George C. Zoley | 73 | 1988 | Executive Chairman |
The following is a brief biographical statement for each director nominee:
Director Nominees
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Mr. | |
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| Jose Gordo — Mr. Gordo was appointed by the Board as the successor Chief Executive Officer of The GEO Group, Inc. effective as of July 1, 2021. Mr. Gordo has served as a director of GEO since October 2019. Mr. Gordo has over 20 years of experience in business management, private equity, corporate finance and business law.
Mr. Gordo brings extensive experience in business management, finance, corporate strategy, operations and business law to the |
| Scott M. Kernan — Mr. Kernan has served as a director of GEO since September 2018. Mr. Kernan served as the Agency Secretary of the California Department of Corrections and Rehabilitation (“CDCR”) from January 2016 until August 2018. Prior to that time, Mr. Kernan was appointed the Undersecretary of Operations of CDCR beginning in September 2008 and served in that position until retiring in October 2011. In March of 2015, Mr. Kernan returned to the Undersecretary position from his retirement at the request of California Governor Jerry Brown and worked in that capacity until January 2016. From October 2011 until March 2015, Mr. Kernan owned his own independent consulting firm that specialized in corrections and criminal justice. From March 2007 to September 2008, Mr. Kernan served as the Chief Deputy Secretary of Adult Operations of CDCR. Prior to that time, Mr. Kernan served as the Deputy Director of the Division of Adult Institutions of CDCR from May 2006 to March 2007. From November 2004 to May 2006, Mr. Kernan served as the Warden of the California State Prison, Sacramento, a |
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Level IV maximum-security institution. From October 2003 to November 2004, Mr. Kernan served as the Warden of the Mule Creek State Prison, a Level III/IV institution. From March 1983 to October 2003, Mr. Kernan held various correctional positions with CDCR.
Mr. | ||
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| Terry Mayotte — Mr. Mayotte has served as a director of GEO since July 2021. Since December 2018, Mr. Mayotte has served as Strategic Advisor for PEO and Acquisitions, as well as President of Paychex Insurance Agency for Paychex, Inc. Prior to this role, Mr. Mayotte held the position of Executive Vice President and Chief Financial Officer at Oasis Outsourcing, where he founded the organization in 1996 and was a principal architect of the company’s business model and strategic direction overseeing its growth to become the largest privately held professional employer organization with over 225,000 co-employees prior to being sold in 2018 to Paychex, Inc. Prior to that, Mr. Mayotte held the role of Treasurer of The Wackenhut Corporation, where he supervised the company’s banking and cash operations, mergers and acquisitions and risk management. Mr. Mayotte also serves as a director on the board of Trean Insurance Group, Inc. Mr. Mayotte received a Bachelor of Arts degree in Business Administration from Emory University. Mr. Mayotte brings invaluable expertise creating insurance strategies and building financial systems and controls, technology platforms and negotiating key supplier relationships. His banking, cash operations, mergers and acquisitions and risk management experience will strengthen the board of directors’ collective knowledge, capabilities and experience. | |
| Andrew N. Shapiro — Mr. Shapiro has served as a director of GEO since February 2022. Mr. Shapiro has over thirty years of experience in the banking industry. Mr. Shapiro is the founder and Chief Executive Officer of Applied Risk Capital LLC, a company he launched in October of 2019 that is dedicated to indemnifying banks against the non-payment of loans and derivatives in the B to BB rating categories. Mr. Shapiro served in a variety of capacities at BNP Paribas from 1995 through August 2018, including as Head of Loan Capital Markets for the Americas from 2004 to 2011, Head of the Value Preservation Group (the bank’s loan and derivative restructuring group) for the Americas from 2009 to 2011, Global Head of Loan Syndications from 2011 to 2015, and Head of Corporate Debt Origination for the Americas from 2015 to August 2018. Mr. Shapiro received a Bachelor of Arts degree from the University of Rochester and a Master of Business Administration degree from New York University School of Business. Mr. Shapiro brings extensive banking and capital markets experience to the board of directors. His banking and capital markets experience will strengthen the board of directors’ collective knowledge, capabilities and experience. |
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| Julie Myers Wood — Ms. Wood has served as a director of GEO since 2014. She is currently the Chief Executive Officer of Guidepost Solutions LLC (“Guidepost”), a company specializing in monitoring, compliance, international investigations and risk management solutions, after joining the organization in 2012 as president of its Compliance, Federal Practice and Software Solutions division. Prior to joining Guidepost,
Ms. Wood brings extensive federal government, legal and management experience to the board of directors. Her experience in the private sector, including in compliance and risk assessments, and her former government positions, including as Head of Immigration and Customs Enforcement, strengthens the board of directors’ collective knowledge, capabilities and experience. |
| George C. Zoley —
As GEO’s founder, his knowledge, experience, and leadership are invaluable to the operation and development of the company. His more than |
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Recommendation of the Board of Directors
The board of directors unanimously recommends a vote “FOR”“FOR” each of the eightnine nominees for director.
Director Emeritus
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The executive officers of GEO as of March 16, 20207, 2023 are as follows:
| Name | Age | Position | ||
George C. Zoley, Ph.D. | Executive Chairman | |||
Jose Gordo | 50 | Chief Executive Officer | ||
Brian R. Evans | Senior Vice President and Chief Financial Officer | |||
| Senior Vice President, Chief Operating Officer | |||
James H. Black | 59 | Senior Vice President and President, | ||
| ||||
Joe Negron | Senior Vice President, Legal Services, General Counsel and Corporate Secretary | |||
| 53 | Senior Vice President, | ||
Richard K. Long | Senior Vice President, Project Development | |||
Christopher D. Ryan | 60 | Senior Vice President, Human Resources | ||
Ronald A. Brack | Executive Vice President, Chief Accounting Officer and Controller | |||
Shayn P. March | Executive Vice President, Finance and Treasurer |
George C. Zoley — Please refer to the biographical information listed above in the “Director Nominees” section.
Jose Gordo — Please refer to the biographical information listed above in the “Director Nominees” section.
Brian R. Evans— Brian R. Evans joined GEO in 2000 and has over 20 years of business management experience. Since joining the company, Mr. Evans has served in increasingly senior business management positions including as Vice President of Finance, Chief Accounting Officer, and Controller and was named GEO’s Senior Vice President and Chief Financial Officer in 2009.
As Chief Financial Officer, Mr. Evans is responsible for the overall financial management of GEO and its subsidiaries and the Company’s acquisition, disposition and growth initiatives. Since joining the Company, Mr. Evans has overseen significant financial growth and shareholder value creation.
During his tenure at GEO, Mr. Evans has been instrumental in successfully executing the Company’s strategy for three secondary public offerings of equity; the execution of multiple financing transactions; and the successful completion of major business transactions including the acquisitions of Correctional Services Corporation in 2005, CentraCore Properties Trust in 2007, Cornell Companies in 2010, BI Incorporated in 2011, LCS Corrections in 2014 and Community Education Centers in 2017. Mr. Evans was also instrumental in GEO’s highly successful conversion to a Real Estate Investment Trust in 2013.
Prior to joining GEO, Mr. Evans worked for Arthur Andersen LLP as a Manager in the Audit and Business Advisory Services Group from 1994 until joining GEO. During his tenure at Arthur Andersen, Mr. Evans supervised the financial statement audits of both public and private companies and city and county governments. From 1990 until 1994, Mr. Evans served as an Officer in the Supply Corps of the United States Navy and was assigned to the USS Monterey in Jacksonville, Florida.
Mr. Evans graduated in 1990 from the University of Notre Dame with a Bachelor’s Degree in Accounting. Mr. Evans is a member of the American Institute of Certified Public Accountants.
J. David DonahueWayne Calabrese — J. David DonahueMr. Calabrese was appointed GEO’s Senior Vice President, Chief Operating Officer in December 2022 and previously served as GEO’s Senior Vice President of Legal Services from September 2021 through December 2022. Mr. Calabrese brings extensive knowledge and experience to GEO’s management team. His legal training and experience, together with his prior service in various GEO leadership positions, makes him
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uniquely qualified to serve as GEO’s Chief Operating Officer. Mr. Calabrese had previously served as Vice Chairman of the Board, President and Chief Operating Officer of GEO until his retirement in December 2010. Mr. Calabrese originally joined GEO as the Eastern Region Vice President of Business Development in 2009 after1989 and served in a distinguishedrange of increasingly senior positions. Prior to joining GEO, Mr. Calabrese was a partner in the Akron, Ohio law firm of Calabrese, Dobbins and Kepple. He also served as an Assistant City Law Director in Akron, Ohio; an Assistant County Prosecutor and Chief of the County Bureau of Support for Summit County, Ohio; and Legal Counsel and Director of Development for the Akron Metropolitan Housing Authority.
Mr. Calabrese received his bachelor’s degree in Secondary Education from the University of Akron and his Juris Doctor from the University of Akron Law School.
James H. Black — Mr. Black joined GEO in June 1998 as Senior Warden of a GEO correctional facility. Mr. Black has more than 37 years of experience in corrections and currently serves as the Senior Vice President and President of Secure Services. In this role, Mr. Black oversees approximately 79,000 beds and over 17,000 employees at 68 diverse facilities across the U.S., Australia, South Africa, and the United Kingdom. Mr. Black began his career in corrections in 1985 as a Correctional Officer with the StatesTexas Department of IndianaCriminal Justice (TDCJ). Over the next eight years, he rose through the ranks to the position of Senior Warden. After joining GEO, he served as Warden at several GEO-operated facilities in Texas and Kentucky as well asFlorida before accepting the Federal Bureauposition of Prisons.Assistant Director of Operations in GEO’s Central Region Office. In his previous role as2005, Mr. Black was promoted to Director of Compliance for the Eastern RegionalWestern Region. He later transferred to the position of Director of Operations before being named Vice President of the Western Region Office in 2009, where he was responsible for the operational oversight of 25 facilities and over 24 correctional facilities encompassing over 31,00015,000 beds. Mr. Donahue was promoted to Senior Vice President and President, GEO Corrections and Detention in January 2016.
Prior to joining GEO, Mr. Donahue served as Commissioner of the Indiana Department of Correction. As Commissioner, he led a workforce of over 9,000 employees, supervising nearly 39,000 offenders in addition to 3,000 Juvenile Offenders and those individuals placed on community supervision. During his tenure with
Indiana, Mr. Donahue worked diligently to instill best correctional practices. He employed his leadership skills to provide better protection to the public through an improvedsex-offender registry system, enhanced facility security with the addition ofstate-of-the-art equipment and protocols, consolidated services to increase departmental efficiency and effectiveness, and prepared offenders for reentry using model case management practices.
Prior to leading the Indiana Department of Correction, Mr. Donahue served as Deputy Commissioner for the Kentucky Department of Corrections. In this position, he provided administrative policy direction to all departmental divisions. He was responsible for the planning and supervision of duties for the Directors of the Division of Administrative Services, the Division of the Corrections Training, the Division of Correctional Industries, and the Branch Managers of Offender Information and Information and Technology.
Mr. Donahue began his corrections career as a Correctional Officer. During his correctional career he moved up the ranks serving in various positions including Case Worker, Unit Manager, Executive Assistant and Warden of several facilities in the country. Mr. Donahue now serves aslater named Vice President of GEO’s Central Region.
Mr. Black graduated from the American Correctional Association (“ACA”) andPalestine Independent School District in 1981. Mr. Black is anACA-Certified Corrections Executive. In addition, he is an active membercurrently pursuing his Bachelor of the ACA and serves on the Restrictive HousingSub-Committee. Mr. Donahue is also a member of the Association of State Correctional Administrators. He attended Eastern Kentucky University, where he earned his Bachelors ofApplied Science in Police Administration. He later attended Spalding University, where he completed coursework in the Masters of Arts in Teaching Graduate Program.Business Management at California Southern University.
Ann M. Schlarb — Dr. Schlarb joined GEO in 2011 as Vice President of Intensive Supervision and Appearance Program (“ISAP”) Services as a result of GEO’s acquisition of B.I. Incorporated, (“B.I.”). Dr. Schlarb joined BI Incorporated in 1995 and was involved in the development, implementation, and operations of two different national programs, one providing supervision and treatment services to offenders in the Criminal Justice System, and the other overseeing field operations for the immigration services division of BI. Dr. Schlarb left BI briefly to complete her doctoral degree in 2009 in Organizational Psychology, during which she remained a consultant. Dr. Schlarb was named Divisional Vice President in May 2012 and managed the BI location monitoring and immigration services division within GEO Care. Promoted to Senior Vice President and President of GEO Care in July 2014, Dr. Schlarb is now responsible for the GEO Care division of The GEO Group, which encompasses the ‘GEO Continuum of Care’ organization, intensive residential andnon-residential programming, youth services, electronic monitoring equipment and services, and community-based immigration services.
Dr. Schlarb began her Criminal Justice career in 1986 working as a detention and probation officer, and later as Assistant Director of Operations and Treatment for a Probation Violators facility in San Antonio, Texas. She earned her Master’s degree in Organizational Management and holds several criminal justice certifications.
Joe Negron — Mr. Negron joined GEO in December 2018, and became the GEO’s Senior Vice President, General Counsel and Corporate Secretary effective January 2019 and became GEO’s Senior Vice President, Legal Services, General Counsel January 1, 2019.and Secretary effective December 2022. Prior to joining GEO, Mr. Negron has had 30 years of experience in business law and complex corporate and commercial litigation. Mr. Negron has worked for several prestigious Florida law firms throughout his career, most recently in the litigation practice at Akerman LLP. Mr. Negron also served in the Florida Legislature for fifteen years, including service as both House and Senate Appropriations Chair, as well as President of the Florida Senate in his final term.
Mr. Negron received his undergraduate degree from Stetson University, his Juris Doctor degree from Emory University School of Law and a Masters in Public Administration from HarvardUniversity.Harvard University.
David J. VenturellaMatthew T. Albence — Mr. VenturellaAlbence joined GEO in 20122022 as Executive Vice President, Corporate Development. In 2014, he was promoted to Senior Vice President Business Development.of Client Relations. Since September 2020, Mr. Venturella isAlbence has served as a Principal at GrindStone Strategic Consulting, LLC, a boutique consulting firm providing services in the area of national security, law enforcement, business development, and management and leadership consulting. Prior to that, Mr. Albence had a 26-year career in federal law enforcement. From May 2012 to August 2020, Mr. Albence served in a variety of roles for U.S. Immigration and Customs Enforcement, culminating as the Acting Director, where he led an organization of 20,000 professionals in over 400 domestic and international offices, responsible for leading GEO’s business and proposal development efforts. Prior to joining GEO, Mr. Venturellathe enforcement of hundreds of federal statutes. He also served in various leadership positions including as theDeputy Director, Executive Associate Director for the Office of Enforcement and Removal Operations, for ICE from February 2011 to June 2012.
In addition to his22-year career with ICE, Mr. Venturella has worked in the private sector in business development and strategic planning. From May 2004 to September 2007, he served as Vice President of the Homeland Security Business Unit for USIS in Falls Church, Virginia, where he was credited with increasing annual revenues by an average of 15 percent during his tenure. He also servedasAssistant Director of Business Development for USIS in the company’s Professional Services Division and served as Director of Business Development for the Global SecurityEnforcement and Engineering Services Unit withL-3 CommunicationsRemoval Operations Enforcement Division. Mr. Albence holds a B.S. in Chantilly, VirginiaJustice from September 2007 to May 2008. David Venturella has more than 26 years experienceAmerican University and a M.S. in federal law enforcement operations and business development. His expertise includes strategic planning, organizational management, project development and program execution.Administration of Justice from Southern Illinois University.
Mr. Venturella has a Bachelor of Science degree in Political Science from Bradley University in Peoria, Illinois. He has also completed the Harvard/MIT Executive Leadership Course at Harvard University’s Kennedy School of Government.
Richard K. Long — Mr. Long joined GEO in 2017 after a distinguished career working for Balfour Beatty Construction for the last 30 years. Mr. Long has developed extensive expertise with commercial and federal government construction as well as engineering projects using design-build and construction management at risk delivery methods for both public and private sector clients, with a combined construction value in excess of $5.0 billion.
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During his30-year career at Balfour Beatty Construction, Mr. Long has held positions of Civil Engineer, Project Engineer, Chief Estimator, Assistant Project Manager, Vice President of Preconstruction, Senior Vice President of Business Acquisition, and Senior Vice President & South Florida Business Unit Leader responsible for leading Balfour BeattyBeatty’s $600 million annual South Florida business.
With 32over 30 years of construction experience, Mr. Long also finds time for industry service. He is a long-time member and past-chairman of Florida’s largest chapter of the Associated Builders and Contractors (“ABC”). Additionally, as founding member and past-president of the Society of American Military Engineers (“SAME”) South Florida chapter, Mr. Long accepted multiple accolades at the association’s 2012 National Joint Engineer Training Conference.
Mr. Long received his Bachelor of Science in Civil Engineering from the University of Missouri and a Bachelor of Science in Construction Management from the University of Louisiana-Monroe.
Christopher D. Ryan — Mr. Ryan joined GEO in 2011 and has over 30 years of human resources experience. Since joining the company, Mr. Ryan has served in increasingly senior human resources positions, including the Director of Employee and Labor Relations, Vice President of Employee and Labor Relations, Executive Vice President of Human Resources, and was subsequently promoted to Senior Vice President of Human Resources in 2023. Mr. Ryan also leads the company’s diversity, equity, and inclusion (DEI) efforts. DEI remains a top business priority, given the fact that more diverse and inclusive companies tend to outperform other employers. Prior to joining The GEO Group, Mr. Ryan held numerous human resources leadership roles at American Airlines, Florida Power & Light and Southern Wine & Spirits of America. Mr. Ryan is also actively involved in the community and sits on the Board of Directors of several 501(c)(3) non-profit organizations serving youth and other residents of Palm Beach County, Florida.
Mr. Ryan holds a Bachelor’s of Science degree in Community Health Services from the State University of New York, Plattsburgh.
Ronald A. Brack — Mr. Brack assumed the role of Vice President, Chief Accounting Officer and Controller for the Company in August 2009. Mr. Brack was GEO’s Vice President and Controller from January 2008 to August 2009 and Controller from April 2007 to January 2008. Mr. Brack joined GEO in May 2005 as Assistant Controller. From 2000 until joining GEO, Mr. Brack was with Fort Lauderdale, Florida based NationsRent, Inc. where his most recent position was Assistant Controller. From 1997 to 2000, Mr. Brack was with the Fort Lauderdale office of Arthur Andersen, LLP where his most recent position was Senior Auditor in the Audit and Business Advisory Services Group. Prior to that time, Mr. Brack spent over ten years in the fleet management business with World Omni Leasing, Inc. and GE Capital Fleet Services. Mr. Brack attended Florida Atlantic University and has a bachelor’s degree in Economics from Vanderbilt University. He is a member of the American Institute of Certified Public Accountants.
Shayn P. March — Mr. March joined GEO as Vice President of Finance and Treasurer in March 2009. Prior to joining GEO, Mr. March served as a Managing Director for the Corporate Investment Banking group at BNP Paribas, where he worked for eleven years in increasing capacities. From 1995 to 1997, Mr. March was employed at Sanwa Bank in the Corporate Finance Department. From 1988 to 1994, Mr. March was employed at UJB Financial in the Finance and Credit Audit Departments. Mr. March earned his Masters in Business Administration in Financial Management from the Lubin School of Business at Pace University and his Bachelor of Arts in Economics at Rutgers University.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the number of shares of GEO’s common stock that were beneficially owned at March 16, 202013, 2023 (unless stated otherwise) by (i) each director and each nominee for election as director at the 20202023 annual meeting of shareholders, (ii) each named executive officer (“NEOs”) (as defined below), that is not a director, (iii) all directors, director nominees and executive officers as a group, and (iv) each person or group who was known by GEO to beneficially own more than 5% of GEO’s outstanding common stock.
| Name and Address of Beneficial Owner(1) | Amount & Nature of Beneficial Ownership(2) | Percent of Class(3) | ||||||
DIRECTOR NOMINEES(4) | ||||||||
Anne N. Foreman | 31,336 | * | ||||||
Richard H. Glanton | 19,951 | * | ||||||
Jose Gordo | 5,900 | * | ||||||
Scott Kernan | 14,400 | * | ||||||
Guido Van Hauwermeiren | 14,400 | * | ||||||
Christopher C. Wheeler | 41,368 | * | ||||||
Julie Myers Wood | 32,026 | * | ||||||
George C. Zoley | 3,000,002 | (4) | 2.5 | % | ||||
NAMED EXECUTIVE OFFICERS(5) | ||||||||
Brian R. Evans | 262,197 | * | ||||||
J. David Donahue | 172,474 | * | ||||||
Ann M. Schlarb | 153,371 | * | ||||||
David Venturella | 140,606 | * | ||||||
ALL DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (16 Persons)(5) | 4,169,837 | 3.4 | % | |||||
OTHER | ||||||||
The Vanguard Group, Inc.(6) | 19,926,421 | 16.4 | % | |||||
Blackrock, Inc.(7) | 14,690,071 | 12.1 | % | |||||
| Name and Address of Beneficial Owner(1) | Amount & Nature of Beneficial Ownership(2) | Percent of Class(3) | ||||||
DIRECTOR AND DIRECTOR NOMINEES | ||||||||
Thomas C. Bartzokis | 32,246 | * | ||||||
Jack Brewer | 32,246 | * | ||||||
Anne N. Foreman | 73,194 | * | ||||||
Jose Gordo+ | 426,703 | * | ||||||
Scott M. Kernan | 59,758 | * | ||||||
Lindsay L. Koren | 14,884 | * | ||||||
Terry Mayotte | 32,246 | * | ||||||
Andrew Shapiro | 32,246 | * | ||||||
Julie Myers Wood | 77,384 | * | ||||||
George C. Zoley+ | 3,797,544 | 3.0 | % | |||||
NAMED EXECUTIVE OFFICERS | ||||||||
Brian R. Evans | 645,003 | * | ||||||
Ann M. Schlarb | 281,386 | * | ||||||
James Black | 168,802 | * | ||||||
ALL DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (20 Persons)(4) | 6,756,022 | 5.3 | % | |||||
OTHER | ||||||||
Blackrock, Inc.(5) | 18,270,735 | 14.7 | % | |||||
The Vanguard Group, Inc.(6) | 13,701,354 | 11.0 | % | |||||
FMR LLC(7) | 7,813,308 | 6.3 | % | |||||
| * | Less than 1% |
| + | Director and Named Executive Officer |
| (1) | Unless stated otherwise, the address of the beneficial owners is c/o The GEO Group, Inc., 4955 Technology Way, Boca Raton, FL 33431. |
| (2) | Information concerning beneficial ownership was furnished by the persons named in the table or derived from filings made with the Securities and Exchange Commission, which we refer to as the SEC. Unless stated otherwise, each person named in the table has sole voting and investment power with respect to the shares beneficially owned. These figures include shares of common stock underlying stock options held by directors and the named executive officers that are immediately exercisable, or are scheduled to become exercisable within 60 days of March |
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| — |
| (3) | As of March |
| (4) |
|
Includes |
| (5) | The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. Based on Amendment No. 1 to Schedule 13G filed January 26, 2023, BlackRock reported that, as of December 31, 2022, it beneficially owned 18,270,735 shares with sole voting power over 18,102,230 shares and sole dispositive power over 18,270,735 shares. |
| (6) | The principal business address of The Vanguard Group, Inc. (“Vanguard”) is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Based on Amendment No. |
| (7) | The principal business address of |
THE BOARD OF DIRECTORS, ITS COMMITTEES AND OTHER CORPORATE GOVERNANCE INFORMATION
GEO’s board of directors held foureight meetings during fiscal year 2019.2022. Each director attended at least 75% of the total number of meetings of the board of directors and of the meetings held by all board committees on which such director served.
Director Independence
Pursuant to the corporate governance standards applicable to companies listed on the New York Stock Exchange (“NYSE”), the board of directors must be comprised of a majority of directors who qualify as independent directors. In determining independence, each year the board of directors affirmatively determines whether directors have a “material relationship” with GEO. When assessing the “materiality” of a director’s relationship with GEO, the board of directors considers all relevant facts and circumstances, not merely from the director’s standpoint, but also from that of the persons or organizations with which the director has an affiliation. An independent director is free from any relationship with GEO that may impair the director’s ability to make independent judgments. Particular attention is paid to whether the director is independent from management and, with respect to organizations affiliated with a director with which GEO does business, the frequency and regularity of the business conducted, and whether the business is carried out at arm’s length on substantially the same terms to GEO as those prevailing at the time from unrelated third parties for comparable business transactions. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships.
Applying the NYSE’s independence standards, the board of directors has determined that, Thomas C. Bartzokis, Jack Brewer, Anne N. Foreman, Richard H. Glanton, Guido Van Hauwermeiren, Christopher C. WheelerScott M. Kernan, Lindsay L. Koren, Terry Mayotte, Andrew N. Shapiro and Julie Myers Wood qualify as independent under the NYSE’s corporate governance standards, and thatstandards. Ms. Foreman is not standing for re-election at the 2023 Annual Meeting of Shareholders. As a result, the board of directors is
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therefore currently comprised and will continue to be comprised subsequent to the annual meeting of a majority of independent directors. The board of directors’ determination that each of these directors is independent was based on the fact that none of the directors had a material relationship with GEO outside of such person’s position as a director, including a relationship that would disqualify such director from being considered independent under the NYSE’s listing standards.
Committees
Under our corporate governance guidelines, the board of directors has established eighteleven standing committees. The members of the board of directors serving on these committees and the functions of those committees are set forth below. Upon the conclusion of the 2023 Annual Meeting of Shareholders, the board of directors will meet and update the composition of the committees in light of Ms. Foreman not standing for re-election at the 2023 Annual Meeting of Shareholders in accordance with the requirements of NYSE rules and the committee charters of the Audit and Finance Committee, Nominating and Corporate Governance Committee and Compensation Committee.
AUDIT AND FINANCE
Terry Mayotte, Chairman
|
COMMITTEE Terry Mayotte, Chairman Anne N. Andrew Shapiro | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE Terry Mayotte, Chairman Anne N. Foreman* Andrew Shapiro | ||
CRIMINAL JUSTICE AND REHABILITATION COMMITTEE Jack Brewer, Chairman Dr. Thomas C. Bartzokis Scott
Julie Myers Wood | CYBER SECURITY AND ENVIRONMENTAL OVERSIGHT COMMITTEE Julie Myers Wood, Chairwoman Jose Gordo Terry Mayotte Andrew Shapiro | EXECUTIVE COMMITTEE George C. Zoley, Chairman Jose Gordo Terry Mayotte | ||
Lindsay L. Koren, Chairwoman Jack Brewer Scott Kernan | INDEPENDENT COMMITTEE Terry Mayotte, Chairman Dr. Thomas C. Bartzokis Jack Brewer Anne N. Foreman* Lindsay L. Koren Andrew Shapiro Julie Myers Wood | LEGAL STEERING COMMITTEE Jose Gordo, Chairman Anne N.
Julie Myers Wood | ||
CORPORATE PLANNING COMMITTEE Andrew Shapiro, Chairman Dr. Thomas C. Jack Brewer Anne N. Foreman* Jose Gordo Lindsay L. Koren Julie Myers Wood | OPERATIONS AND OVERSIGHT COMMITTEE Scott M. Kernan, Chairman
Jose Gordo | |||
|
| |||
|
Julie Myers Wood | |||
| * | Ms. Foreman is not standing for re-election at the 2023 annual meeting of shareholders. |
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Audit and Finance Committee
The Audit and Finance Committee met sixten times during fiscal year 2019.2022. The Report of the Audit and Finance Committee is included in this proxy statement.
All of the members of the Audit and Finance Committee established in accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934 are independent (as independence is defined under Exchange Act Rule10A-3, as well as under Section 303A.02 of the NYSE’s listing standards). In addition, the board of directors has determined that Mr. Glanton is theMayotte and Mr. Shapiro qualify as an “audit committee financial expert” as that term is defined under Item 407(d)(5) of RegulationS-K of the SEC’s rules.
The Audit and Finance Committee has a written charter adopted by the board of directors. It can be found on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the links “Governance with Integrity-Corporate Governance.” In addition, the charter is available in print to any shareholder who requests it by contacting our Executive Vice President of Corporate Relations at561-893-0101. Pursuant to the charter, the main functions and responsibilities of the Audit and Finance Committee include the following:
select, in its sole discretion, our independent auditor and review and oversee its performance;
review and approve in advance the terms of our independent auditor’s annual engagement, including the proposed fees, as well as the scope of auditing services to be provided;
oversee the independence of the Company’s independent auditor;
| • | review and approve in advance any non-audit services to be provided by the independent auditor, including the proposed fees; |
review and approve in advance anynon-audit services to be provided by the independent auditor, including the proposed fees;
review with management, our internal auditor and our independent auditor, our significant financial risks or exposures and assess the steps management has taken to monitor and mitigate such risks or exposures;
review and discuss with management and our independent auditor the audit of our annual financial statements and our internal controls over financial reporting, and our disclosure and the independent auditor’s reports thereon;
meet privately with our independent auditor on any matters deemed significant by the independent auditor;
establish procedures for the submission, receipt, retention and treatment, on an anonymous basis, of complaints and concerns regarding our accounting, internal accounting controls or auditing matters;
establish, review periodically and update as necessary a Code of Business Conduct and Ethics (the “Code of Conduct”), ensure that management has established a system to enforce the Code of Conduct, and review management’s monitoring of the Company’s compliance with the Code of Conduct;
review with our counsel legal matters that may have a material impact on our financial statements, our compliance policies and any material reports or inquiries from regulators or government agencies; and
address or take action with respect to any other matter specifically delegated to it from time to time by the board of directors.
Compensation Committee
The Compensation Committee met sixseven times during fiscal year 2019.2022. The Report of the Compensation Committee is included in this proxy statement.
All of the members of the Compensation Committee are independent (as independence is defined under Section 303A.02 of the NYSE’s listing standards).
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The Compensation Committee has a written charter adopted by the board of directors. It can be found on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the links “Governance with Integrity-Corporate Governance.” In addition, the charter is available in print to any shareholder who requests it by contacting our Executive Vice President of Corporate Relations at561-893-0101. Pursuant to the charter, the main functions and responsibilities of the Compensation Committee include the following:
review on a periodic basis and, if appropriate, make recommendations with respect to director compensation;
establish our executive compensation philosophy, and review and approve the compensation of all of our corporate officers, including salaries, bonuses, stock option grants and other forms of compensation;
review the general compensation structure for our corporate and key field employees;
establish annual and long-term performance goals for the compensation of our Chief Executive Officer (“CEO”) and other senior executive officers, evaluate the CEO’s and such other senior executive officers’ performance in light of those goals, and, either as a committee or together with the other independent members of the board of directors, determine and approve the CEO’s and such other senior executives’ compensation level based on this evaluation;
review our program for succession and management development;
review our incentive-based compensation and equity-based plans and make recommendations to the board of directors with respect thereto;
review and discuss with management our disclosures under “Compensation Discussion and& Analysis”, or CD&A, and based on such review and discussion make a recommendation to the Board as to whether the CD&A should be included in our proxy statement; and
address or take action with respect to any other matter specifically delegated to it from time to time by the board of directors.
For further information on the Compensation Committee’s processes and procedures for consideration and determination of executive compensation, see “Compensation Discussion and& Analysis” elsewhere in this proxy statement.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee met fiveeight times during fiscal year 2019.2022.
All of the members of the Nominating and Corporate Governance Committee are independent (as independence is defined under Section 303A.02 of the NYSE’s listing standards).
The Nominating and Corporate Governance Committee has a written charter adopted by the board of directors. It can be found on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the links “Governance with Integrity-Corporate Governance.” In addition, the charter is available in print to any shareholder who requests it by contacting our Executive Vice President of Corporate Relations at561-893-0101. Pursuant to the charter, the main functions and responsibilities of the Nominating and Corporate Governance Committee include the following:
identify candidates qualified to become members of the board of directors and select or recommend that the full board of directors select such candidates for nomination and/or appointment to the board of directors;
review candidates for the board of directors recommended by shareholders;
assist the Board in determining and monitoring whether or not each director and prospective director is an “independent director” within the meaning of any rules and laws applicable to GEO;
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after consultation with the Executive Chairman and CEO, recommend to the board of directors for approval all assignments of committee members, including designations of the chairs of the committees;
establish the evaluation criteria for the annual self-evaluation by the board of directors, including the criteria for determining whether the board of directors and its committees are functioning effectively, and implement the process for annual evaluations;
develop, adopt, review annually and, if appropriate, update, corporate governance guidelines for GEO and evaluate compliance with such guidelines;
periodically review our Code of Conduct for directors, officers and employees, and approve amendments to the Code of Conduct to the extent deemed appropriate by the committee;
advise the board of directors with regard to our policies and procedures for the review, approval or ratification of any transaction presenting a potential conflict of interest between us and any member of our board of directors or any executive officers;
consider other corporate governance issues that arise from time to time, and advise the board of directors with respect to such issues; and
address or take action with respect to any other matter specifically delegated to it from time to time by the board of directors.
In fulfilling the committee’s duties to identify and recommend candidates for election to our board of directors, the Nominating and Corporate Governance Committee considers the mix of skills, experience, character, commitment, and diversity — diversity being broadly construed to mean a variety of opinions, perspectives and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics, all in the context of the requirements of our board of directors at the time of election.
Executive Committee
Periodically during fiscal year 2019,2022, members of the Executive Committee informally discussed various matters relating to GEO’s business. The Executive Committee has full authority to exercise all the powers of the board of directors between meetings of the board of directors, except as reserved by the board of directors. All actions taken by the Executive Committee in 20192022 were ratified by the board of directors at their next quarterly meeting.
Corporate Planning Committee
The Corporate Planning Committee periodically reviews with management various corporate strategic initiatives, including potential merger and acquisition activities, business expansion issues and corporate finance matters.
Criminal Justice and Rehabilitation Committee
The Criminal Justice and Rehabilitation Committee guides and oversees the Company’s efforts regarding rehabilitation and anti-recidivism.
Human Rights Committee
The Human Rights Committee guides and oversees the Company’s efforts regarding the protection of human rights.
Cyber Security and Environmental Oversight Committee
The Cyber Security and Environmental Oversight Committee guides and oversees the Company’s efforts regarding cybersecurity, privacy and environmental sustainability concerns.
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Operations and Oversight Committee
The Operations and Oversight Committee reviews with management various issues relating to our operations that may arise from time to time.
Legal Steering Committee
The Legal Steering Committee reviews with management strategic issues with respect to material litigation and other discrete legal issues.
Independent Committee
The Independent Committee considers matters that may arise from time to time that the board of directors designates for independent director review.
Director Identification and Selection
The processes for director selection and director qualifications are set forth in Section 3 of our Corporate Governance Guidelines. The board of directors, acting on the recommendation of the Nominating and Corporate Governance Committee, will nominate a slate of director candidates for election at each annual meeting of shareholders and will elect directors to fill vacancies, including vacancies created as a result of any increase in the size of the board, between annual meetings. Nominees for director are selected on the basis of outstanding achievement in their personal careers, broad experience, wisdom, integrity, ability to make independent, analytical inquiries, understanding of the business environment, and willingness to devote adequate time to the duties of the board of directors. The board believes that each director should have a basic understanding of (i) the principal operational and financial objectives and plans and strategies of GEO, (ii) the results of operations and financial condition of GEO and of any significant subsidiaries or business segments, and (iii) the relative standing of GEO and its business segments in relation to its competitors. The board is committed to diversified membership and it does not and will not discriminate on the basis of race, color, national origin, gender, religion or disability in selecting nominees. The Nominating and Corporate Governance Committee may, to the extent it deems appropriate, engage a third party professional search firm to identify and review new director candidates and their credentials.
The Nominating and Corporate Governance Committee will consider proposed nominees whose names are submitted to it by shareholders. We adopted proxy access in advance of our 2017 annual meeting of shareholders.
Our proxy access provisions are set forth in Article II, Section 6 of our SecondThird Amended and Restated Bylaws (“Bylaws”). The proxy access provisions permit a shareholder, or a group of up to twenty (20) shareholders, owning three percent (3%) or more of the Company’s outstanding common stock continuously for at least three (3) years, to nominate twenty percent (20%) of the number of directors then in office (rounding down to the nearest whole number) provided that the shareholder or group and each nominee satisfy the eligibility, procedural and disclosure requirements for proxy access as specified in the Bylaws, including that the Company receive notice of such nominations between 90 and 120 days prior to the anniversary date of the previous year’s annual meeting of shareholders. Since our annual meeting for 20202023 is scheduled for May 19, 2020,April 28, 2023, any nomination pursuant to our proxy access process to be considered at the 20212024 annual meeting must be properly submitted to us not earlier than January 19, 2021December 30, 2023 or later than February 18, 2021.January 29, 2024.
In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules, a person who intends to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company that sets forth the information required by Rule 14a-19(b) under the Exchange Act, including a statement that such person intends to solicit the holders of shares representing at least 67% of the voting power of the Company’s shares entitled to vote in the election of directors in support of director nominees other than the Company’s nominees.
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There are no other differences between the considerations and qualifications for director nominees that are recommended by shareholders and director nominees recommended by the Nominating and Corporate Governance Committee. Other than adopting proxy access, the Nominating and Corporate Governance Committee has not adopted a formal process because it believes that the informal consideration process has been adequate to date. The Nominating and Corporate Governance Committee intends to review periodically whether a more formal policy should be adopted. If a shareholder wishes to suggest a proposed name of a nominee for consideration by the Nominating and Corporate Governance Committee outside of the proxy access process, the name of that nominee and related personal information should be forwarded to the Nominating and Corporate Governance Committee, in care of the Corporate Secretary, at least six months before the next annual meeting to assure time for meaningful consideration by the committee.
Board Leadership Structure
Our CEOAlthough the GEO Corporate Governance Guidelines provide that the Board believes it is appropriate and efficient for the Company’s Chief Executive Officer to also servesserve as the Chairman of the board of directors. Richard H. Glanton has served as Lead Independent DirectorBoard, the Board retains the authority to separate those functions if it deems such action appropriate.
As a result of the Company since January 1, 2011.
Mr. Glanton has been a director of GEO since 1998 and is currently the Chairman of the Audit and Finance Committee,CEO succession discussed below in the Compensation CommitteeDiscussion & Analysis section of this proxy statement, the roles of Chief Executive Officer and the Independent CommitteeChairman are now held by two separate individuals. George C. Zoley serves as our Executive Chairman and a member of theJose Gordo serves as our Chief Executive Committee, the Nominating and Corporate Governance Committee, the Operations and Oversight Committee and the Legal Steering Committee. As the Lead Independent Director, Mr. Glanton has input to the Chairman of the board on preparation of agendas for board and committee meetings. Mr. Glanton chairs board meetings when the Chairman of the board is not in attendance and provides input to the independent directors and ensures that the effectiveness of the board is assessed on a regular basis. The Lead Independent Director reports to the board regarding deliberations of the independent directors and may recommend special meetings of the independent directors as necessary. Because of Mr. Glanton’s long history as a board member and his service as the Chairman of the Audit and Finance Committee, the Compensation Committee and the Independent Committee, the board believes that Mr. Glanton is uniquely qualified to serve as the Lead Independent Director of the Company. In 2012, in connection with our conversion to a REIT, Mr. Glanton was the chairman of a special committee created to review and manage the divestiture of GEO Care, Inc.Officer.
As a company that is focused on its core business, we believe the CEOExecutive Chairman is in the best position to direct the independent directors’ attention on the issues of greatest importance to the Company and its shareholders. Since our CEOExecutive Chairman knows the Company’s business, is a pioneer in the industry and has over thirtyforty years of experience, we believe that our CEOExecutive Chairman is the appropriate person to lead the board of directors. Our overall corporate governance policies and practices combined with the strength of our independent directors, including our Lead Independent Director, and our internal controls minimize any potential conflicts that may result from combining the roles of Chairman and CEO.
We believe the current leadership structure of the board of directors supports the risk oversight functions described below by providing independent leadership at the boardBoard and committee level through the Lead Independent Director with ultimate oversight by the full board of directors led by our Chairman and CEO.Executive Chairman. The board of directors periodically reviews and considers whether the current boardBoard leadership structure continues to be appropriate for our Company.
Board Risk Oversight
Our board of directors has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. Throughout the year, the board of directors and the committees to which it has delegated responsibility dedicate a portion of their meetings to review and discuss specific risk topics in greater detail. The board of directors has delegated responsibility for the oversight of specific risks to the following committees:
The Audit and Finance Committee oversees GEO’s risk policies and processes relating to the financial statements, financial reporting processes and credit risks.
The Operations and Oversight Committee oversees GEO’s operating risks. The Operations and Oversight Committee meets regularly during the year and on occasions when an operations incident occurs. The Operations and Oversight Committee may travel to the appropriate site to audit the operating practices and procedures if an incident has occurred.
The Compensation Committee oversees risks related to the Company’s compensation policies and practices.
The Legal Steering Committee oversees risks related to major litigation.
The Cyber Security and Environmental Oversight Committee guides and oversees the Company’s efforts regarding cybersecurity, privacy and environmental sustainability concerns.
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The Human Rights Committee guides and oversees the Company’s efforts regarding the protection of human rights.
Code of Business Conduct and Ethics
The board of directors has adopted a code of business conduct and ethics applicable to GEO’s directors, officers, employees, agents and representatives, including its consultants, which we refer to as the Code of Conduct. The Code of Conduct strives to deter wrongdoing and promote honest and ethical conduct, the avoidance of conflicts of interest, full, fair, accurate, timely and transparent disclosure, compliance with the applicable government and self-regulatory organization laws, rules and regulations, prompt internal reporting of violations of the Code of Conduct, and accountability for compliance with the Code of Conduct. The Code of Conduct can be found on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the link “Governance with Integrity-Business Conduct & Ethics.” In addition, the Code of Conduct is available in print to any shareholder who requests it by contacting our Executive Vice President of Corporate Relations at561-893-0101.
Code of Ethics for CEO, Senior Financial Officers and Other Employees
Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, the board of directors has also adopted a code of ethics for the CEO, its senior financial officers and all other employees, which we refer to as the Code of Ethics for Senior Financial Officers. The text of this Code of Ethics for Senior Financial Officers is located in Section 19 of GEO’s Code of Conduct. The Code of Ethics for Senior Financial Officers can be found on our website at http:// www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the link “Governance with Integrity-Business Conduct & Ethics.” In addition, the Code of Ethics for Senior Financial Officers is available in print to any shareholder who requests it by contacting our Executive Vice President of Corporate Relations at561-893-0101.
Corporate Governance Guidelines
The board of directors has adopted corporate governance guidelines to promote the effective functioning of the board of directors and its committees, and the continued implementation of good corporate governance practices. The corporate governance guidelines address matters such as the role and structure of the board of directors, the selection, qualifications and continuing education of members of the board of directors, board meetings,non-employee director executive sessions, board self-evaluation, board committees, CEO performance review, succession planning,non-employee director compensation, certain shareholder matters and certain shareholder rights.
The corporate governance guidelines can be found on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the link “Governance with Integrity-Corporate Governance.” In addition, the corporate governance guidelines are available in print to any shareholder who requests them by contacting our Executive Vice President of Corporate Relations at561-893-0101.
Annual Board and Committee Self-Assessments andNon-Employee Director Executive Sessions
The board of directors conducts a self-assessment annually, which is reported by the Nominating and Corporate Governance Committee to the board of directors. In addition, the Audit and Finance Committee, the Compensation Committee and the Nominating and Corporate Governance Committee also undergo annual self-assessments of their performance. Thenon-employee directors of the board of directors meet in executive session at least twice per year and such meetings are presided over by a presiding director who is typically the chairman of the Nominating and Corporate Governance Committee, who is currently Mr. Wheeler.Committee.
Communications with Directors
The board of directors has adopted a process to facilitate written communications by shareholders or other interested parties to the entire board, the independent members of the board as a group or any individual member
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of the board, including the presiding director fornon-employee director executive sessions. Persons wishing to write to the board of directors of GEO, or to a specified director (including the presiding director fornon-employee director executive sessions) or a committee of the board, should send correspondence to the Corporate Secretary at 4955 Technology Way, Boca Raton, Florida 33431.
The Corporate Secretary will forward to the directors all communications that, in his or her judgment, are appropriate for consideration by the directors. Examples of communications that would not be appropriate for consideration by the directors include commercial solicitations and matters not relevant to the shareholders, to the functioning of the board, or to the affairs of GEO.
Board Member Attendance at Annual Meetings
GEO encourages all of its directors to attend the annual meeting of shareholders. All of our directors except for Mr. Gordo who was not a director at the time attended the 20192022 annual meeting of shareholders.
Publication of the First Annual Human Rights and ESG Report
On September 26, 2019, GEO published its first annual Human Rights and Environmental, Social & Governance (ESG) Report. The 2018 Human Rights and ESG Report, iswhich was based on 2018 data. The Report was developed referencing the Global Reporting Initiative Standards and the UN Guiding Principles on Business and Human Rights.
GEO is committed to publishing an annual Human Rights and ESG Report. In 2020, GEO published its second annual Human Rights and ESG Report updating disclosures and metrics for the 2019 calendar year based on recognized ESG reporting standards, related to the development of our employees; our adherence to ethical governance practice throughout our company; and our efforts to advance environmental sustainability in the custodian and operation of our facilities.
In September 2021, GEO issued its third Human Rights and ESG report.
In October 2022, GEO issued its fourth Human Rights and ESG report. The 2018Human Rights and ESG report builds on the important milestone the Company achieved in 2013 when GEO’s Board adopted a Global Human Rights Policy by providing disclosures related to how the Company informs its employees of its commitment to respecting human rights; the criteria GEO uses to assess human rights performance; and GEO’s contract compliance program, remedies to shortcomings in human rights performance, and independent verification of GEO’s performance by third party organizations. The Human Rights and ESG report also addresses criteria, based on recognized ESG reporting standards, related to the development of GEO’s employees; its efforts to advance environmental sustainability in the construction and operation of the Company’s facilities; and the Company’s adherence to ethical governance practices throughout the Company. The report covers the year ended December 31, 2021 with supporting data from 2019-2021 where possible. The report showcases, among other items, the company-wide awareness and training programs, GEO’s commitment to a safe and humane environment for everyone in the Company’s care, employee diversity, addressing recidivism through the GEO Continuum of Care, the Company’s engagement efforts with its stakeholders, oversight and contract compliance, conservation measures and enhanced environmental sustainability efforts.
The ESG report was prepared with reference to the GRI Standards related to General Disclosures, Economic Topics, Environmental Topics and Social Topics based on the Global Reporting Initiative, or GRI, issued by the Global Sustainability Standards Board and the UN Guiding Principles on Business and Human Rights. GRI is an international independent standards organization created to help business, government and other organizations understand and communicate how their operations affect issues of global importance, such as human rights, corruption and climate change. GEO has referenced the GRI Standards and the UN Guiding Principles on Business and Human Rights as the Company has recognized the need for a transparent and disciplined enterprise-wide approach. In GEO’s pursuit of this approach, it has begun with the following set of ongoing objectives:
Provide greater transparency for GEO’s stakeholders and the general public with respect to the Company’s various efforts in all its facilities aimed at respecting human rights.
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Enhance the Company’s ability to flag potential issues in all areas of its operations and compress the time it takes to respond with corrective measures.
Use widely accepted methodologies for evaluating performance and setting objectives for improvements in corporate governance, corporate social policy, environmental impact and energy conservation.
The 2021 Human Rights and ESG Report can be found at http:https://www.geogroup.com/Portals/0/HumanRightsESG2018.pdfESG.
Human Rights Risk Assessment/Due Diligence
In December 2021, GEO created a new Board committee focused on criminal justice rehabilitation and human rights. In an effort to continue building upon GEO’s commitment to human rights, the Company is continuing to work with various stakeholders to take steps to improve disclosures addressing the Company’s commitment to human rights and its performance related to salient human rights risks.
Over the last 10 years, GEO has engaged with several shareholders and other stakeholders on matters related to human rights and environmental, social, and governance (ESG) best practices, and as a result of this engagement, GEO’s Board of Directors adopted a Global Human Rights Policy, and corresponding human rights training program for its employees, in 2013.
In September 2019, in response to a shareholder proposal that was approved during the 2019 annual meeting of shareholders, GEO published its first annual Human Rights and ESG report. GEO subsequently issued its second and third annual Human Rights and ESG reports in 2020 and 2021, with additional, enhanced disclosures.
GEO has continued to engage with shareholders and other stakeholders to address the important topic of human rights. GEO is currently evaluating several initiatives to continue to enhance its ESG and human rights disclosures.
One of the initiatives GEO recently undertook during 2022 was conducting a Human Rights Risk Assessment and Due Diligence process. The process focused on identifying salient human rights and included interviews with and feedback from a diverse group of internal and external GEO stakeholders. The results of this due diligence process were incorporated into the fourth Human Rights and ESG report. Moving forward, GEO expects to evaluate additional human rights initiatives, including a future review of GEO’s Global Human Rights Policy and its implementation.
Enhanced Political and Lobbying Disclosure
In February 2023, GEO published its enhanced Political Activity and Lobbying Report disclosure for 2022. In light of a shareholder proposal approved during the 2021 annual meeting of shareholders regarding lobbying disclosures, GEO undertook a review of its previous disclosure.
Based on this review and taking into consideration the shareholder feedback as presented in the shareholder proposal, as well as feedback provided by shareholders regarding political contributions disclosures, GEO enhanced its report to provide additional, more detailed information with respect to GEO’s lobbying activities and political contributions made at the corporate level and through its political action committee.
The enhanced Political Activity and Lobbying Report provides new and more detailed disclosures on GEO’s policies on lobbying activities and political contributions; the oversight of these policies and activities by the Nominating and Corporate Governance Committee of the Board of Directors; the employee-funded, non-partisan GEO Political Action Committee; breakdowns of political contributions made during 2022; breakdowns and disclosures of both direct and indirect lobbying expenditures during 2022, including expenditures on government relations consultants for direct lobbying, as well as payments made to trade and membership associations and chambers of commerce, inclusive of the estimated portion of those payments that was used for lobbying purposes; and disclosures of the fact that GEO did not make any payments during 2022 that were used for grassroots lobbying communications and that GEO is not a member of, and did not make any payments during 2022 to, any tax-exempt organizations that write or endorse model legislation.
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The enhanced Political Activity and Lobbying Report for 2022 was reviewed and approved by the Nominating and Corporate Governance Committee of the Board of Directors in February 2023. The enhanced Political Activity and Lobbying Report for 2022 can be found at https://www.geogroup.com/Political_Engagement.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Grant Thornton LLP (“Grant Thornton”) served as GEO’s independent registered public accountants in fiscal years 20192022 and 2018.2021. The Audit and Finance Committee of GEO has appointed Grant Thornton LLP as GEO’s independent registered public accountants for the 2023 fiscal year. A member of Grant Thornton will be present at the annual meeting to make a statement if so desired and will be available to respond to appropriate questions. The following sets forth the aggregate fees billed to GEO by Grant Thornton in fiscal years 20192022 and 2018.2021.
| 2019 | 2018 | |||||||
Audit Fees(1) | $ | 2,796,350 | $ | 2,832,101 | ||||
Audit Related Fees(2) | $ | 33,850 | $ | 95,527 | ||||
Tax Fees(3) | $ | — | $ | 8,914 | ||||
All Other Fees | $ | — | $ | — | ||||
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Total | $ | 2,830,200 | $ | 2,936,542 | ||||
| 2022 | 2021 | |||||||
Audit Fees(1) | $ | 3,013,931 | $ | 2,707,053 | ||||
Audit Related Fees(2) | $ | 55,000 | $ | 762,598 | ||||
Tax Fees | $ | 290,834 | $ | — | ||||
All Other Fees | $ | — | $ | — | ||||
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Total | $ | 3,359,765 | $ | 3,469,651 | ||||
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The Audit and Finance Committee of the board of directors has implemented procedures to ensure that all audit and permittednon-audit services provided to GEO arepre-approved by the Audit and Finance Committee. All of the audit, audit-related tax and all other services provided by Grant Thornton to GEO in 20192022 and 20182021 were approved by the Audit and Finance Committee pursuant to these procedures. Allnon-audit services provided in 20192022 and 20182021 were reviewed with the Audit and Finance Committee, which concluded that the provision of such services by Grant Thornton was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.
Audit and Finance CommitteePre-Approvals of Audit, Audit-Related, Tax and PermissibleNon-Audit Services
The Audit and Finance Committee periodically approves the provision of various audit, audit-related, tax and other services by Grant Thornton. The Audit and Finance Committee plans to continue to review andpre-approve such services as appropriate. In addition, the Audit and Finance Committee has delegated to its Chairman Richard H. Glanton, the authority to grant, on behalf of the Audit and Finance Committee, thepre-approvals required under the Sarbanes-Oxley Act for the provision by Grant Thornton to GEO of auditing and permissiblenon-audit services; provided, however, that any decision made by Mr. Glantonthe Chairman with respect to any suchpre-approvals must be presented at the next regularly scheduled full Audit and Finance Committee meeting that is held after such decision is made.
All of the services provided by Grant Thornton to GEO in 20192022 and 20182021 were approved by the Audit and Finance Committee pursuant to these procedures. The Audit and Finance Committee will continue to review andpre-approve such services as appropriate.
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COMPENSATION DISCUSSION & ANALYSIS
Role of the Compensation Committee
The Compensation Committee of our board of directors establishes and regularly reviews our compensation philosophy and programs, exercises authority with respect to the determination and payment of base and incentive compensation to executive officers and administers the 2011 employee stock purchase plan and our amended and restated 2018 stock incentive plan. Our Compensation Committee consists of three members, each of whom is independent as that term is defined in the Sarbanes-Oxley Act of 2002 and the rules and regulations that have been promulgated under thatthe Securities Exchange Act of 1934 or Exchange Act, and in the listing standards of the New York Stock Exchange. The Compensation Committee operates under a written charter that was first adopted by our board of directors in February 2004 and has been amended periodically. The charter more fully describes the role, responsibilities and functioning of the Compensation Committee. A current copy of this charter can be viewed on our website at www.geogroup.com by clicking the link “Social Responsibility” on our homepage and then clicking the links “Governance with Integrity — Corporate Governance”.
Say-on-Pay Results
At our 20192022 Annual Meeting of Shareholders, over 98.5%55% of the votes cast voted to approve the advisory resolution on our executive compensation referred to as the“say-on-pay” vote. The Compensation Committee recognizes the 2022 say-on-pay vote was significantly lower than our historical voting results for the say on pay proposal and significantly lower than the shareholder support that we strive for when designing and evaluating our compensation program. For the eight annual meetings of shareholders prior to the 2022 Annual Meeting of Shareholders, over 90% of the votes cast voted to approve the advisory resolution on our executive compensation.
The Company engages in shareholder outreach and engagement on a variety of topics that are of interest to our shareholders, including executive compensation. In 2022, prior to our 2022 Annual Meeting of Shareholders, the Company engaged extensively with the four institutional investors holding the largest positions in our common stock representing approximately 43% of the Company’s issued and outstanding common stock as of the most recently available Schedule 13F and Schedule 13G reports filed with the Securities and Exchange Commission prior to the record date of February 18, 2022 for the 2022 Annual Meeting of Shareholders. Our shareholder outreach efforts involved members of management and our Board of Directors, specifically, our Chief Executive Officer, Chief Financial Officer, Executive Vice President of Corporate Relations and the Chair of the Compensation Committee at that time. Shareholders welcomed the opportunity to discuss compensation-related matters directly with the Company and the Company welcomed the helpful and insightful responses and feedback. Through conversations with our shareholders, we were able to articulate the Company’s rationale for executive compensation and Dr. Zoley’s succession plan. We gained valuable perspectives, and look forward to continued dialogue with our shareholders.
The Compensation Committee understands the concerns raised by select shareholders but on balance believed at the time of approving the CEO succession plan and still believes today that it made the right decision in totality to ensure a smooth and successful CEO succession given the unique nature of the Company’s business and the institutional knowledge and experience Dr. Zoley has which was critical to retain as part of the CEO succession. Additionally, the elements and structure of the CEO succession plan as set forth in the most recent employment agreements entered into by Dr. Zoley and Mr. Gordo had already been negotiated, approved and executed prior to the time of our shareholder outreach and engagement and the “say-on-pay” vote. The Compensation Committee views the CEO succession plan as a unique and non-recurring event.
Under Dr. Zoley’s leadership as Executive Chairman, in the first full year of the CEO succession plan, the financial results in 2022 were the best in the Company’s history. There are other notable accomplishments, as well. Dr. Zoley oversaw a comprehensive refinancing of the Company’s $2 billion of debt, lifting that overhang item of concern to
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many shareholders. Dr. Zoley completed the restructuring of the Legal Department through additional staffing enabling the Company to be more self-sufficient and cost effective in handling complex litigation. Additionally, Dr. Zoley initiated a re-negotiation of vendor contracts and management responsibilities in the BI Division overseeing the fastest growing portion of company growth under ICE Alternatives to Detention (ATD) contract.
The Compensation Committee believes that the historically positive outcome of thesay-on-pay vote supports the compensation arrangements established by the Compensation Committee. The Compensation Committee considered the results of the shareholder vote on the 20192022 “say-on-pay” proposal as one of the many factors relevant in connection with the discharge of its responsibilities along with the advice of its independent compensation consultant and shareholder feedback. The Compensation Committee and the Board of Directors will continue to consider shareholder feedback and the outcomes of the future say-on-pay votes when evaluating our executive compensation programs and policies and making compensation decisions for our named executive officers. During 2019,2022, the Compensation Committee continued the compensation program in place during 20182021 with the changes noted below under the section titled, “Why Each Element of Compensation is Paid and How the Amount of Each Element is Determined”.
Role and Independence of Compensation Consultant
The Compensation Committee assessed the independence of Pay Governance LLC (“Pay Governance”), a nationally recognized executive compensation consultant, taking into account the following factors:
Other services provided by Pay Governance;
The amount of fees paid by GEO to the consultant as a percentage of its total revenues;
Any business or personal relationships between the consultant (including its representatives) and GEO’s directors or senior officers; and
The policies and procedures the consultant has in place to prevent conflicts of interest, which includes a prohibition against stock ownership in GEO.
Pay Governance has attested to its independence and does not provide any services to GEO other than those related to executive and director compensation consulting. Based on its assessment, the Compensation Committee agreed that the compensation consultant is independent and that the compensation consultant’s work has not raised any conflict of interest.
During 2019,2022, the Compensation Committee engaged Pay Governance to perform the following services: (i) a peer group analysis and review of the compensation levels of the executive officers; (ii) review the proxy statement for the 2019 annual shareholders meeting2022 Annual Meeting of Shareholders including consultation related to the Compensation Discussion and& Analysis section of the proxy statement; (iii) calculation of the Total Shareholder Return (“TSR”) Performance to determine the performance-based restricted stock payout levels; (iv) calculation of the
Accounting Fair Value for performance-based restricted stock awards; (v) a peer group analysis and review ofnon-employee director compensation: andcompensation; (vi) a review of executive compensation trends and developments.developments; and (vii) recommendations for an updated, non-REIT peer group to be used in the performance-based equity compensation. Other than as described above, Pay Governance was not asked to perform any other services for us in 2019.2022. GEO paid Pay Governance a total of $88,089$118,076 related to its work for the Compensation Committee in 2019.2022.
Under its charter, the Compensation Committee has the ability to retain any advisors it deems necessary or desirable in order for it to discharge its duties. The Compensation Committee also has sole authority to terminate the retention of any advisor it has retained.
Process for Determining Compensation
When making decisions regarding the compensation of named executive officers, including the position of Chief Executive Officer, the Compensation Committee considers competitive market data and analyses prepared by Pay Governance, historical pay to the named executive officers and the appropriateness of such compensation,
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including by comparing it to a peer group of companies periodically. Annually, the Compensation Committee will use peer group and broader general industry data to obtain a general understanding of compensation practices and therefore ensure that it is acting in an informed and responsible manner to make sure our executive compensation program is competitive. The Compensation Committee views peer group data as one factor in assisting its compensation decisions. Due to the transition from REIT status in late 2021, the Compensation Committee continued to review compensation data from the REIT peer group while also referencing market data from a broad survey of general industry companies with revenues between $1 and $3 billion.
The REIT peer group (the same peer group used in 2021) consisted of the following companies:
Alexandria Real Estate Equities, Inc. | Iron Mountain Incorporated | |
AvalonBay Communities, Inc. | Lamar Advertising Company | |
Boston Properties, Inc. | Mid-America Apartment Communities, Inc. | |
CoreCivic, Inc. | Outfront Media Inc. | |
Digital Realty Trust, Inc. | Realty Income Corporation | |
Equity Residential | SBA Communications Corporation | |
Essex Property Trust, Inc. | Veritas, Inc. | |
Extra Space Storage Inc. | Vornado Realty Trust | |
Healthpeak Properties, Inc. | Welltower Inc. |
In 2019,2022, the Compensation Committee asked Pay Governance to conduct a peer group analysis to evaluate our compensation programs and practices as a whole, and the compensation levels of our named executive officers.
In July 2022, the Compensation Committee approved the use of the following companies in its future peer group analyses which reflect GEO’s decision to terminate its REIT election and the resulting reclassification of GEO’s Global Industry Classification Standard. When evaluating pay levels and practices of peer companies, within the REIT industry, the Compensation Committee focused on data from the group ofsimilarly-sized, equity REITs listed below. GGP Inc. was excluded from the historical peer group as a resultbelow of its acquisition by Brookfield Property Partnerscompanies in August 2018. After making this exclusionthe security and determining thatalarm services, the historical peer group continued to be appropriate oncommercial services and supplies and the basis of revenue sizehealthcare facilities categories with similar revenues and with all companies generally focused on the specialty REIT industry, the Compensation Committee did not make any additional changes to the following peer group for 2019:market cap:
| Interface, Inc. | |
Brady Corporation | KAR Auction Services, Inc. | |
Bright View Holdings, Inc. |
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CoreCivic, Inc. |
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Deluxe Corporation | Pitney Bowes Inc. | |
Driven Brands Holdings Inc. | Steelcase Inc. | |
Harsco Corporation | Stericycle, Inc. | |
Healthcare Services Group, Inc. | Surgery Partners, Inc. | |
HNI Corporation | The Brinks Company | |
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The Compensation Committee also considers the compensation recommendations set forth by the Chief Executive Officer for named executive officers other than himself. Under the Compensation Committee’s charter, the Chief Executive Officer cannot provide the Compensation Committee with a compensation recommendation for himself. When considering compensation matters generally, and the compensation packages of the named executive officers in particular, the Compensation Committee meets in executive session outside the presence of the named executive officers. The Compensation Committee uses its experience and judgment and considers performance of the Company and the executive officer in making final compensation decisions.
Important Factors Given Particular Consideration by the Compensation Committee in Setting Compensation for the Named Executive Officers
In setting executive compensation for our named executive officers, the Compensation Committee gives particular attention and focus to the following factors over a several year-period:
Our financial performance;
Our stock price performance;reduction of net recourse debt;
Achievement of strategic operating objectives;
Our growth and prospects for continued future growth in both revenues and profitability; and
The performance of our senior management team.team;
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Our prospects for future growth in revenues and profitability; and
Our stock price performance.
Applying these factors to our Company during the previous several years in setting CEO and other named executive officer compensation, the Compensation Committee considered the following:
During the past several years, we have experienced strong growth in revenue and profitability and believe we have become the most diversified service provider in our peer group, which will continue to yield growth opportunities in excess of typical industry levels;
| • | On August 19, 2022, we completed a series of transactions to exchange certain of our outstanding 5.125% Senior Notes due 2023, 5.875% Senior Notes due 2024, 6.00% Senior Notes due 2026 and certain revolving credit loans and term loans under our senior secured credit facility into newly issued Senior Second Lien Secured Notes and a new Exchange Credit Agreement. These transactions staggered our outstanding debt maturities over a longer period of time and significantly reduced our near-term debt maturities. We reduced our net debt to approximately $1.977 billion and our net leverage to approximately 3.7 times Adjusted EBITDA by year-end 2022, marking substantial progress towards our goal of reducing our net leverage to below 3.5 times Adjusted EBITDA by the end of 2023 and to below 3 times Adjusted EBITDA by the end of 2024. Since the beginning of 2020, we have reduced our overall net recourse debt by more than $450 million. |
During 2019, GEO’s total revenues2022, our stock price increased from $7.85 on the first trading day in January 2022 to $10.95 on the last trading day in December 2022, an increase of approximately 6% to $2.48 billion and Adjusted EBITDAre increased approximately 9% to $483.3 million. Since 2014, GEO has grown Adjusted EBITDAre at a compounded annual growth rate of 6.7%;40%.
| • | For the full year 2022, we reported total revenues of $2.4 billion, Net Income Attributable to GEO of $171.8 million, Adjusted EBITDA of $539.2 million and Adjusted Funds from Operations of $2.52 per diluted share. Since 2017, GEO has grown Adjusted EBITDA at a compounded annual growth rate of 5.13% (for a reconciliation of GAAP measures to the Non-GAAP measures referenced in this bullet, please see our Current Report on Form 8-K filed on February 21, 2023). |
Throughout the year, our GEO Secure Services business unit served over 300,000 individuals, while managing an average daily population of close to 60,000 in our facilities in the United States. Our GEO Care business unit served more than 700,000 individuals during the year, while managing an average daily census of over 200,000 participants in our community reentry, youth services treatment, and electronic monitoring programs. Our GEO Transport, Inc. division safely transported more than one million passengers while driving more than 21 million miles in the U.S. and internationally;
| • | In 2022, we signed a five-year contract renewal for the 780-bed Florence West Correctional and Rehabilitation Facility in Arizona as well as a two-year contract renewal for the 3,400-bed Kingman Correctional and Rehabilitation Facility in Arizona. In addition, we were notified by the United States Marshals Service of the agency’s intent to exercise the five-year contract option period for our 768-bed Robert Deyton Facility in Georgia. Additionally, during 2022 the United States Marshals Service exercised the contract option period to continue to utilize the 770-bed Western Region Detention Facility in San Diego, California through September 30, 2023. We also renewed five residential reentry contracts, including four contracts with the Federal Bureau of Prisons. |
| • | During 2022, we sold our equity investment interest in the government-owned Ravenhall Correctional Centre project in Australia for approximately $84 million in gross proceeds, pre-tax to an unrelated third party. |
| • | Ensuring the health and safety of all those entrusted to our care and of our employees has always been our number one priority. Throughout the COVID-19 pandemic, we have implemented a number of COVID-19 mitigation initiatives. We have issued guidance to all our facilities, consistent with the guidance issued for correctional and detention facilities by the Centers for Disease Control and Prevention. We increased testing capabilities at our secure services facilities and entered into contracts with multiple commercial labs to provide adequate testing supplies and services. We administered COVID-19 vaccines and boosters. |
| • | Although we faced a challenging financial and operational environment in 2022 associated with the global COVID-19 pandemic and the impact of the executive order directing the United States Attorney General not to renew Department of Justice contracts with privately operated criminal detention facilities, we generated a strong level of revenue and profitability and believe we have become the most diversified service provider amongst our competitors. |
| • | Throughout the year, our GEO Secure Services facilities successfully underwent over 150 audits, including internal audits, government reviews, third-party accreditations, and certifications. Our GEO Reentry Services renewed 31 residential reentry contracts, including 15 contracts with the Federal Bureau of Prisons. We also renewed 33 contracts for our non-residential and day reporting centers. Our Electronic Monitoring and |
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Supervision Services segment also continued to grow in 2022 with annual revenues increasing by 78%. Our GEO Transport, Inc. division safely completed approximately more than 17 million miles in the U.S. and internationally. |
| • | Despite facing the continued challenges associated with the COVID-19 pandemic, during 2022, the GEO Continuum of Care programs achieved the following important milestones: (i) completed approximately 3.5 million hours of rehabilitation programming; (ii) achieved approximately 40,000 behavioral program completions; (iii) awarded approximately 2,400 GEDs and high school equivalency degrees; (iv) achieved more than 34,000 individual cognitive behavioral sessions; (v) awarded approximately 8,100 vocational training certifications; (vi) provided post-release support services to more than 2,500 individuals returning to their communities, with over 700 post-release participants attaining employment; and (vii) awarded more than 7,300 substance abuse treatment program completions. |
In 2022, we engaged a leading ESG and sustainability consulting and research firm to facilitate and assist us with conducting a Human Rights Risk Assessment/Due Diligence focused on identifying human rights risks that are salient to the Company’s stakeholders and operations. During 2019,2022, we completed theramp-up of approximately 3,000 previously idle beds and entered into several new contracts at the federal level, which are expected to drive future earnings and cash flow growth. For example, during 2019, we entered into new contracts with U.S. Immigration and Customs Enforcement for five company-owned facilities in California. Three of these facilities were previously subject to contracts with the California Department of Corrections and Rehabilitation that were discontinued as a result of a recently enacted California legislation aimed at phasing out public-private partnership contracts for the operation of secure facilities within California and facilities outside of the state of California housing state of California inmates;
During 2019, the GEO Continuum of Care programs achieved the following important milestones: (i) completed more than 6.8 million hours of rehabilitation programming; (ii) averaged more than 13,000 daily participants in academic programs; (iii) awarded 2,882 GEDs and high school equivalency degrees; (iv) averaged more than 33,000 daily participants in vocational training programs; (v) awarded 9,413 vocational training certifications; (vi) averaged more than 18,000 daily participants in substance abuse treatment programs; and (vii) awarded 8,767 substance abuse treatment program completions;
During 2019, we hosted our second ever GEO Continuum of Care Conference;
During 2019, wealso published our firstfourth annual Human Rights and ESG Report. The comprehensive report built on our first three Human Rights and ESG Reports published in 2019, 2020 and 2021 and the Global Human Rights Policy adopted by our Board of Directors in 2013 and provided disclosures related to how we inform our Commitmentemployees of our long-standing commitment to respecting human rights, the criteria relatedwe use to the developmentassess human rights performance, our contract compliance program and independent verification of our employees, our efforts to enhance environmental sustainabilityperformance by third party organizations, and the salient inmate/detainee/resident rights and salient employee rights that ranked very high, high and moderate as a result of the Human Rights Risk Assessment/Due Diligence process we undertook in our facilities and our adherence to ethical governance practices.2022.
During 2019, we extended the maturity of our $900 million revolving credit facility to May 2024 without any change to its size or pricing grid. As of December 31, 2019, we had approximately $340 million in available capacity under our revolving credit facility;
During 2019, we repurchased approximately $56 million of our senior unsecured notes due 2022, which is our nearest term debt security;
During the past several years, we have successfully completed and integrated several significant strategic acquisitions, including, most recently, the acquisition of Community Education Centers whose operations encompass over 12,000 beds nationwide, the acquisition of eight correctional and detention facilities from LCS Correctional Services, Inc. and its affiliates, the acquisition by our subsidiary, Protocol Criminal Justice,
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We believe the efforts undertaken by our senior management team over the past several years to maintain and expand our company´s business, both in our core corrections business and into new diversified services, have positioned us to have what we believe are strongerstrong prospects for stable and strong revenue and profit growth than any peer company in our industry;industry.
Our senior management team has consistently demonstrated the ability, over a long period of time, to manage through and capably address and mitigate the key risks that face our business on an ongoing basis;basis.
Our senior management team has consistently made delivering shareholder value a priority. Notwithstanding, theWe have experienced volatility and downward pressure on our stock price during 2019the past few years as a result of a number of factors, including the announcement by several financial institutionspolitical opposition to not renew existing agreements or enter into new agreements with companies that operatethe use of public-private partnerships for secure facilities, processing centers and community reentry centers pursuantand concerns regarding our future access to public-private partnerships and the recently enacted California law discussed above, we have had solid long-term stock price performance. The following graph compares the total shareholder return of our common stock compared to the total shareholder return of several indexes, including the MSCI U.S. Equity REITs index over the five-year period ended December 31, 2019. (GEO TSR 92.99% vs MSCI 114.4%); and
Total Shareholder Return for Five-Year Period Ended December 31, 2019financing.
During 2019, we enjoyed stable and predictable cash flows from our diversified business units that allowed us to pay total annual dividends of $1.92 per share, an increase of +2% from $1.88 per share the prior year.
The factors above are among the most critical we consider in setting our named executive officer compensation.
Elements of Compensation
Our compensation program for named executive officers consists of the following components:
Annual base salaries
Annual cash incentive compensation
Performance-based equity compensation
Time-based equity compensation
Other benefits and perquisites
Each of these components is reflected in the Summary Compensation Table and is also discussed in further detail below.
Why Each Element of Compensation is Paid and How the Amount of Each Element is Determined
The following is a brief discussion of each element of our named executive officer compensation. The Compensation Committee considers each of these elements in order to ensure that a desirable overall mix is
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established between base compensation and incentive compensation, cash andnon-cash compensation and annual and long-term compensation. The Compensation Committee also evaluates on a periodic basis the overall competitiveness of our executive compensation packages as compared to packages offered in the marketplace for which we compete for executive talent. Overall, our Compensation Committee believes that our executive compensation packages are currently appropriately balanced and structured to retain and motivate our named executive officers, who we believe constitute the most experienced senior management team in our industry. The Compensation Committee evaluates GEO’s executive compensation policies and practices on an ongoing basis.
CEO Succession Plan
As we discussed in our proxy statement for the 2022 annual meeting of shareholders, we implemented a CEO succession plan in 2021 (the “Succession Plan”). In connection with the Succession Plan, the Compensation Committee made determinations regarding compensation in connection with the CEO transition for Messrs. Zoley and Gordo and entered into executive employment agreements with each of Messrs. Zoley and Gordo, and the terms of such executive employment agreements govern the various elements of compensation paid to Messrs. Zoley and Gordo, as may be modified by the Compensation Committee.
Upon the termination of Dr. Zoley’s employment under the Executive Chairman Agreement by GEO without Cause, by Dr. Zoley for Good Reason, or as a result of the death or Disability of Dr. Zoley (the “Involuntary Termination Date”), GEO shall pay Dr. Zoley a termination payment (the “Termination Payment”) equal to two (2) times the sum of (a) Dr. Zoley’s Base Salary and (b) the target Bonus. For purposes of the Executive Chairman Agreement, “Good Reason” shall exist if (i) there is a material reduction in Dr. Zoley’s authority, duties or responsibilities thereunder, including any requirement that Dr. Zoley is required to report to any person or entity other than the Board; (ii) any material reduction to Dr. Zoley’s Base Salary, Bonus, Equity Award or Retirement Credit; (iii) GEO requires Dr. Zoley to change the geographic location at which he must perform services under this Agreement more than 50 miles from the location at which he was principally employed; or (iv) any material breach of this Agreement by GEO; provided, however, Good Reason will only exist if Dr. Zoley gives GEO written notice of the existence of the above referenced event within ninety (90) days of the initial existence of such event and GEO fails to remedy such event within 90 days of such notice.
The Board recognizes that under normal circumstances, it is less common for the Executive Chairman of a company to be the highest paid named executive officer. In implementing the Succession Plan, the Board considered that Mr. Gordo has a unique and diverse executive and managerial skillset and brings to GEO extensive and valuable experience in business operations, organizational management and leadership, finance, corporate law, private equity, capital markets transactions, and mergers and acquisitions. However, he does not possess the extensive correctional and government services industry experience that Dr. Zoley has. Dr. Zoley founded GEO approximately 40 years ago, has been GEO’s only prior Chief Executive Officer and is considered one of the founders of the industry GEO operates in. His institutional knowledge and experience are unmatched and would be nearly impossible to replace over the course of the next five years in the judgment of GEO’s Board of Directors. Dr. Zoley has been instrumental in developing GEO into a leading worldwide company in a highly complex, heavily regulated, and often politically impacted industry, involving the provision of support services for secure correctional facilities, immigration processing centers, community reentry centers and programs, and electronic monitoring services.
Considering these factors, the Board believed it was imperative to retain Dr. Zoley’s services to ensure a successful CEO succession and determined it was appropriate to initially set Dr. Zoley’s compensation at a higher level than Mr. Gordo’s with a plan to transition this pay relationship over time. It is the Board’s expectation that as Mr. Gordo gains further experience in the role of CEO under Dr. Zoley’s guidance and tutelage, over time, his compensation will increase accordingly, and he will become GEO’s highest paid named executive officer. For 2022, excluding the impact of the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” for Dr. Zoley as reported in the Summary Compensation Table, Mr. Gordo was the highest paid named executive officer.
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Base Salaries. The cash salaries paid to the named executive officers are incorporated into the terms of existing executive employment agreements with our named executive officers. Any increases in salaries have been made either pursuant to the terms of the employment agreements or at the discretion of the Compensation Committee.
Mr. Zoley, who also serves as our Chairman, receives no additional compensation for his board service, so his annual base salary reflects the workload, responsibilities and contributions made by Mr. Zoley as our Chief Executive Officer and our Chairman.
For 2019,2022, our Compensation Committee determined it was appropriate to increase the annual base salaries of Messrs. Zoley, Evans, Donahue, and VenturellaBlack by approximately 3%5%, increase the annual base salary of Mr. Gordo by approximately 8% and increase the annual base salary of Ms. Schlarb by approximately 9% as compared to their 20182021 annual base salaries following their individual performance assessments reflecting their individual contributions to the strong financial and operational performance of the Company discussed above and a review of projected executive salary increases in the market. For 2019, our Compensation Committee determined it was appropriate to increase the annual base salary of Ms. Schlarb by approximately 1% as compared to her 2018 annual base salary following her individual performance assessment and a review of projected executive salary increases in the market. Additionally, Ms. Schlarb’s annual base salary had been increased in 2018 by approximately 4% as compared to her 2017 annual base salary as compared to the other named executive officers whose compensation had been increased in 2018 by approximately 2%.
Annual Cash Incentive Compensation. Annual cash incentive compensation for each of our named executive officers is governed by our Senior Management Performance Award Plan, as Amended and Restated on April 27, 2016 (the “plan”), which was approved by our shareholders at the Company’s 2016 annual meeting of shareholders in accordance with the performance-based compensation exception (“Performance-Based Exception”) under Section 162(m) of the Internal Revenue Code (“Code”) that such a plan be approved by shareholders at least once every five years. Although the Performance-Based Exception has been repealed, payments to the Chief Executive Officer made in accordance with this plan are intended to still be tax deductible under Section 162(m) of the Code because such payments to the Chief Executive Officer should be grandfathered from the repeal of the Performance-Based Exception for the Company’s 2019 fiscal year.. The plan is administered by our Compensation Committee, which has the authority to make all discretionary determinations necessary or
appropriate under the plan. The plan is governed by the Compensation Committee and is administered on a day to day basis by the Chief Executive Officer and the Vice President of Human Resources.
Under the plan, each of our named executive officers is eligible to receive annual cash incentive compensation based on our relative achievement of budgeted revenue and net income for the fiscal year. We believe revenue and net income are meaningful metrics to assess our performance. The metrics are used by our management team when it develops its annual operating plan and budget and are used by our investors in evaluating our performance against the annual financial guidance we give on revenue and net income. For purposes of the plan, net income means our net income after all federal, state and local taxes. Extraordinary items and changes in accounting principles, as defined by U.S. generally accepted accounting principles, may be disregarded in determining our net income.Non-recurring and unusual items not included or planned for in our annual budget may also be excluded from net income in the sole and absolute discretion of the Compensation Committee. In determining the amount of annual incentive cash compensation awarded, our net income is weighted 65% and our revenue is weighted 35% (collectively, the “Target Weighting of Revenue andNet-Income-After-Tax”).
Awards under the plan are made as follows: (i) targets for budgeted revenue and net income are set at the beginning of each fiscal year; (ii) the plan includes for each named executive officer an annual incentive target amount as a percentage of the officer’s salary which forms the basis for computing the officer’s award under the plan; and (iii) at the end of the fiscal year, a multiplier set forth in the plan that is based on our relative achievement of budgeted revenue and net income for the fiscal year is applied to each officer’s annual incentive target amount referenced in (ii) above. The multiplier is the same for all named executive officers.
The following table shows, for each named executive officer, the annual incentive target amount as a percentage of salary that the respective officer is eligible to receive under the Amended and Restated Senior Management Performance Award Plan. For 2022, the Compensation Committee determined that based on market changes in executive compensation, it was appropriate to make adjustments to the annual incentive target amount as a percentage of salary for the Chief Executive Officer adjusting the target to 100% from 85%, for the Chief Financial Officer adjusting the target to 80% from 75% and for the Senior Vice Presidents adjusting the target to 75% from 70%. There were no changes to the annual incentive target amount as a percentage of salary for the Executive Chairman which remained at 100% pursuant to the terms of the Executive Chairman Agreement.
| Named Executive Officer | Annual Incentive Target Amount (As a Percentage of Salary) | |
Executive Chairman | 100% | |
Chief Executive Officer | ||
Chief Financial Officer | ||
Senior Vice Presidents |
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The following table shows how each named executive officer’s annual incentive cash compensation award is calculated by applying a percentage adjustment methodology, or multiplier, separately to the respective Target Weighting of Revenue andNet-Income-After-Tax results on a straight-line basis:
| Performance and Payout Relationship (as % of Target) | ||||||||||
| Component | Threshold | Target | Maximum | |||||||
Performance | 80% | 100 | % | 120% | ||||||
Payout | 50% | 100 | % | 150% | ||||||
In addition to the calculations described above, if the budgeted goals for revenue and net income are exceeded, the annual incentive amounts for the Chief Financial Officer and the other Senior Vice Presidents may be adjusted up to an additional 50% upon the recommendation of the Chief Executive Officer subject to the approval of the Compensation Committee based on the results of an individual performance assessment. The Chief Executive Officer is not eligible for positive individual performance adjustments. The Compensation Committee and the Chief Executive Officer consider the contribution of the particular officer during the fiscal year when determining whether to make an individual performance adjustment.
| Performance and Payout Relationship (as % of Target) | ||||||||||
| Component | Threshold | Target | Maximum | |||||||
Performance | 90% | 100 | % | 110% | ||||||
Payout | 50% | 100 | % | 200% | ||||||
Under the terms of the plan, no amendment to the plan may alter the performance goals, increase the maximum amount which can be awarded to any participant, or change the class of eligible employeesemployees.
2022 Cash Incentive Outcomes
The net income target for 2022 was set at $93.0 million, a decrease of $86 million or make any other48% compared to adjusted net income achieved during 2021. The 2021 performance metric used was based on adjusted net income which reflected adjustments for the change that would require shareholder approval underin tax structure from a REIT to a C Corporation.
The revenue target for 2022 was set at $2.17 billion, a decrease of $87.0 million or 4% compared to revenue achieved during 2021. The Compensation Committee determined it was appropriate to set the exemptionnet income targets and revenue targets for performance-based compensation under Section 162(m)2022 at a reduced level compared to net income and revenue achieved for 2021 due to the challenging financial and operational environment in 2022 associated with the continuation of the Code, in each case, withoutimpacts from the prior approval of our shareholders (toglobal COVID-19 pandemic and the extent required under the performance-based compensation exception of Section 162(m)impact of the Code).
2019 Cash Incentive Outcomesexecutive order directing the U.S. Attorney General not to renew Department of Justice contracts with privately operated criminal detention facilities.
In 2019,2022, the Company achieved Netnet income performance above the target performance objective and Revenueachieved revenue performance above the target performance objective. The table below providesCompany believes its strong performance for 2022 is the 2019 cash incentive outcomes based onresult of the Net incomeCompany’s multiyear diversification strategy, which has allowed the Company to establish industry-leading positions across the whole spectrum of correctional, detention and Revenue performance levels actually achieved.community-based services.
| FY 2019 Performance Results | ||||||||||||||||||
| Metrics ($Millions) | Weighting | Target | Actual | Actual as a % of Target | Payout as a % of Target | |||||||||||||
Net income(1) | 65% | $ | 158.2 | $ | 166.6 | 105% | 113% | |||||||||||
Revenue | 35% | $ | 2,424.0 | $ | 2,478.0 | 102% | 106% | |||||||||||
| Weighted Payout as % of Target | 110.6% | |||||||||||||||||
|
| FY 2022 Performance Results | ||||||||||||||||||
| Metrics ($Millions) | Weighting | Target | Actual | Actual as a % of Target | Payout as a % of Target | |||||||||||||
Net income | 65% | $ | 93.0 | $ | 171.7 | 168.8% | 200% | |||||||||||
Revenue | 35% | $ | 2,170.0 | $ | 2,377.0 | 109.5% | 195% | |||||||||||
| Weighted Payout as % of Target | 198.4% | |||||||||||||||||
Based on these results, the following annual incentive amounts were awarded to the Named Executive Officersnamed executive officers for fiscal year 20192022 performance:
| Executive | FY ‘19 Target Incentive ($) | Corporate Financial Performance Factor | Target x Financial Performance Factor ($) | Individual Performance Modifier(1) | Actual Incentive Earned ($) | Actual as a % of Target | FY ‘22 Target Incentive ($) | Corporate Financial Performance Factor | Target x Financial Performance Factor ($) | Actual Incentive Earned ($) | ||||||||||||||||||||||||||
George C. Zoley | 1,704,336 | 110.6% | 1,884,666 | N/A | 1,884,666 | 110.6% | 1,050,000 | 198.39 | % | 2,083,065 | 2,083,065 | |||||||||||||||||||||||||
Jose Gordo | 975,000 | 198.39 | % | 1,934,274 | 1,934,274 | |||||||||||||||||||||||||||||||
Brian R. Evans | 465,594 | 110.6% | 514,857 | — | 514,857 | 110.6% | 540,000 | 198.39 | % | 1,071,290 | 1,071,290 | |||||||||||||||||||||||||
J. David Donahue | 386,096 | 110.6% | 426,947 | — | 426,947 | 110.6% | ||||||||||||||||||||||||||||||
Ann M. Schlarb | 312,554 | 110.6% | 345,624 | — | 345,624 | 110.6% | 412,500 | 198.39 | % | 818,347 | 818,347 | |||||||||||||||||||||||||
David Venturella | 286,726 | 110.6% | 317,064 | — | 317,064 | 110.6% | ||||||||||||||||||||||||||||||
James H. Black | 393,750 | 198.39 | % | 781,149 | 781,149 | |||||||||||||||||||||||||||||||
|
20192022 Equity Incentive Awards
Our Compensation Committee has historically granted awards under our equity compensation plans to our key employees and members of our board of directors to support a performance-oriented culture and to further align the interests of management and our shareholders.
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The amounts of awards granted under our equity compensation plans are determined by the Compensation Committee after taking into account the following factors: the recommendations of the Chief Executive Officer (other than for his awards), the availability of awards for issuance companywide,share usage rates and potential dilution to shareholders, competitive market practices, the overall performance of the Company and the individual performances of the grantees.
On March 1, 2019,2022, GEO grantedmade its annual grants of performance-based restricted stock to our named executive officers, other than Dr. Zoley, that vest, if earned, on March 15, 20222025 using the same performance criteria as the grants made in 2018.2021.
Pursuant to the terms of the Executive Chairman Agreement, Dr. Zoley receives shares of restricted stock with a grant date fair value equal to 100% of his base salary that vest on the one-year anniversary of the grant date.
For 2019,2022, 100% of our equity incentive awards provided to the NEOs, except for Dr. Zoley, were in the form of performance-based restricted stock awards which was much more performance oriented than the mix of performance and time vested equity awards observed across the peer group. On average, the peers deliver approximately 50%54% of their long-term incentive to NEOs in performance-based equity awards and 46% in time-vested equity.
The following table lists the number of time-based shares of restricted stock and performance-based shares of restricted stock granted to each named executive officer in 2019:2022:
| Executive | Number of Performance Shares Granted in 2019 | Approved Value on Date of Grant (1) | ||
George C. Zoley | 100,000 | $2,268,000 | ||
Brian R. Evans | 40,000 | $ 907,200 | ||
J. David Donahue | 30,000 | $ 680,400 | ||
Ann M. Schlarb | 20,000 | $ 453,600 | ||
David Venturella | 20,000 | $ 453,600 |
| Executive | Number of Time-Based Restricted Shares Granted in 2022 | Number of Granted in 2022 | Approved Value on Date of Grant(1) | |||||||||
George C. Zoley | 173,612 | — | $ | 1,000,005 | ||||||||
Jose Gordo | — | 250,000 | $1,440,000 | |||||||||
Brian R. Evans | — | 125,000 | $ 720,000 | |||||||||
Ann M. Schlarb | — | 100,000 | $ 576,000 | |||||||||
James H. Black | — | 100,000 | $ 576,000 | |||||||||
| (1) | The approved value on the date of grant reflects the number of shares granted multiplied by the closing share price on the date of grant. The closing share price for each grant was |
Specifically, the performance targets for the 20192022 performance-based restricted stock grants are:
| Performance Metric | Metric Weighting | Threshold | Target | Maximum | Metric Weighting | Threshold | Target | Maximum | ||||||||
Relative TSR | 50% | P30 | P50 | P90 | 50% | P30 | P50 | P90 | ||||||||
Return on Capital Employed | 50% | +1% of WACC | 9% | 12% | 50% | +1% of WACC | 9% | 12% | ||||||||
Payouts (% of Target) | 30% | 100% | 200% | Payouts (% of Target) | 30% | 100% | 200% |
The threshold required for payment under the return on capital employed (“ROCE”) metric is set at +1% of our weighted average cost of capital (“WACC”) over the three-year measurement period to ensure that payments only occur during periods of positive returns. The WACC is a product of the cost of our capital over the performance period and will not be known until the performance period has concluded. Additionally, if the current trend of higher interest rates continues, it is likely to require higher levels of net income to achieve the same historical level of ROCE due to increases in the cost of capital.
Additionally, there is a performance “governor” that caps payouts under the Relative TSR metric at 100% of target if GEO’s absolute TSR is negative over the3-year period. Performance below threshold results in 0% payout on that specific metric. The relative TSR metric uses S&P 600 companies in the Commercial & Professional Services GICS code.
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Equity Incentive Outcomes for 20172020 to 20192022 Performance Cycle
On March 1, 2017,2020, the Compensation Committee granted target awards of performance-based restricted stock vesting over a three-year period beginning January 1, 20172020 provided that certain TSR performance goals and ROCE goals were met as of December 31, 2019.2022. This was prior to Mr. Gordo’s appointment as Chief Executive Officer and Mr. Black’s appointment to Senior Vice President, President GEO Secure Services and as a result they were not eligible and did not receive a grant of performance-based restricted stock. Specifically, the performance targets were:
| Performance Metric | Metric Weighting | Threshold | Target | Maximum | Metric Weighting | Threshold | Target | Maximum | ||||||||
Relative TSR | 50% | P30 | P50 | P90 | 50% | P30 | P50 | P90 | ||||||||
Return on Capital Employed | 50% | +1% of WACC | 9% | 12% | 50% | +1% of WACC | 9% | 12% | ||||||||
Payouts (% of Target) | 30% | 100% | 200% | Payouts (% of Target) | 30% | 100% | 200% |
The Compensation Committee engaged Pay Governance to calculate the final TSR rank and payout calculations for the TSR component of these awards. Pay Governance determined that based upon their calculations for the Company and the FTSE NAREIT Equity REITs Index, the Company’s 2017-20192020-2022 TSR of-15.69%-14.5% places the Company in the 13th44th percentile of the peer group which results in a TSR component payout of 0%79.0%. Management of the Company calculated the return on capital employed component of the performance-based restricted stock
to be 11.4%12% which results in a ROCE component payout of 180%200% of the target award. Based on the calculations of the TSR component and the ROCE component, management of the Company certified to the Compensation Committee that when the TSR component is combined with the ROCE component, the combined award payout is approximately 90%140% of the target award. After reviewing the information provided to the Compensation Committee by Pay Governance and management, the Compensation Committee approved the vesting of the performance-based restricted stock in the amounts provided below:
| Performance-Based Restricted Stock: 2017-2019 Cycle | ||||||||||||||||||||||||
| Performance-Based Restricted Stock: 2020-2022 Cycle | Performance-Based Restricted Stock: 2020-2022 Cycle | |||||||||||||||||||||||
| Executive | Shares at Target | Performance Factor | Shares Earned | Shares at Target | Performance Factor | Shares Earned | ||||||||||||||||||
George C. Zoley | 150,000 | 90% | 134,940 | 150,000 | 140% | 209,250 | ||||||||||||||||||
Jose Gordo | — | — | — | |||||||||||||||||||||
Brian R. Evans | 45,000 | 90% | 40,482 | 116,666 | 140% | 162,750 | ||||||||||||||||||
J. David Donahue | 37,500 | 90% | 33,735 | |||||||||||||||||||||
Ann M. Schlarb | 30,000 | 90% | 26,988 | 32,500 | 140% | 45,338 | ||||||||||||||||||
David Venturella | 30,000 | 90% | 26,988 | |||||||||||||||||||||
James H. Black | — | — | — | |||||||||||||||||||||
20202023 Compensation Actions
Base Salary
For 2020,2023, our Compensation Committee determined it was appropriate to increase the annual base salaries of Messrs. Zoley, Gordo, Evans, Donahue, and Venturella and Ms. SchlarbBlack by approximately 3% as compared to their 20192022 annual base salaries.salaries following their individual performance assessments reflecting their contributions to the strong financial and operational performance of the Company and a review of projected salary increases in the market. Ms. Schlarb retired effective January 31, 2023. This level of base salary increase is consistent with increases and the salary budget for the broad-based, non-union employee population.
Annual Cash Incentive Opportunities
The annual cash incentive compensation for fiscal year 20202023 performance will be determined under the Senior Management Performance Award Plan consistent with the methodology used in 20192022 based on the budgeted Netnet income and Budgeted Revenue 2020budgeted revenue 2023 performance goals set by the Compensation Committee. In 2019, the Compensation Committee reviewed peer group practice information, GEO’s historical performance outcomes and broader market best practices for incentive designs presented by the independent compensation consultant. In March 2020, the Compensation Committee and Board of Directors approved certain amendmentsThere were no changes to the Senior Management Performance Award Plan for fiscal year 2020 to better align with market practices. The changes are only toindividual target percentages of any of the performance and payout relationship (performance range) for the Net Income and Revenue goals. For fiscal year 2020, the performance and payout relationship range for both metrics are presented in the table below:NEOs.
| Performance and Payout Relationship (as % of Target) | ||||||||||
| Component | Threshold | Target | Maximum | |||||||
Performance | 90% | 100 | % | 110% | ||||||
Payout | 50% | 100 | % | 200% | ||||||
Additionally, all senior officers will be eligible to achieve a maximum award of 200% of target for meeting or exceeding the maximum performance level under the plan. Previously, the CEO’s award was capped at 150% of target and other senior officers could realize an additional 50% (up to a maximum of 200%) based on the results of an individual performance assessment. The individual performance adjustment factor will not be part of the Senior Management Performance Award Plan beginning with fiscal year 2020.31
Equity Awards
Equity Incentive Awards
The Compensation Committee granted performance-based restricted stock awards on March 1, 20202023 to our named executive officers, other than Dr. Zoley, that will vest on March 15, 20232026 based on two performance metrics measured from January 1, 20202023 to December 31, 20222025 as follows: (i) 50% of the shares of restricted stock in each award vest if GEO meets certain relative TSR performance targets for the3-year period; and (ii) 50% of the shares of restricted stock in each award can vest if GEO meets certain ROCE performance targets for the3-year period. For 2020,
Pursuant to the Executive Chairman Agreement, Dr. Zoley received a grant of restricted stock on March 1, 2023 with a grant date fair value equal to 100% of his base salary that vest on the equity grants authorized forone-year anniversary of the named executive officers were performance based.grant date.
The following lists the number of time-based shares of restricted stock and performance-based shares of restricted stock granted to each of the 2019 named executive officers:officers on March 1, 2023:
| Executive | Number of Performance Based Restricted Stock Granted in 2020 | Value on Date of $17.32/share(1) | ||
George C. Zoley | 150,000 | $2,598,000 | ||
Brian R. Evans | 50,000 | $ 866,000 | ||
J. David Donahue | 37,500 | $ 649,500 | ||
Ann M. Schlarb | 32,500 | $ 562,900 | ||
David Venturella | 30,000 | $ 519,600 |
| Executive | Number of Time-Based Restricted Shares Granted in 2023 | Number of Performance Based Restricted Stock Granted in 2023 | Value on Date of Grant $9.07/share(1) | |||
George C. Zoley | 119,239 | — | $1,081,498 | |||
Jose Gordo | — | 110,722 | $1,004,250 | |||
Brian R. Evans | — | 61,323 | $556,200 | |||
Ann M. Schlarb(2) | — | — | — | |||
James Black | — | 44,715 | $405,563 |
| (1) | The |
| (2) | Ms. Schlarb retired from her executive officer role effective January 31, 2023. |
Other Benefits and Perquisites. Our executive compensation program includes other benefits and perquisites as more fully reflected in the table set forth below titled “All Other Compensation.” These benefits and perquisites are reviewed annually by the Compensation Committee with respect to amounts and appropriateness. Currently, the benefits and perquisites which the named executive officers are eligible to receive fall into four general categories: (i) retirement benefits pursuant to our executive retirement agreement in the case of Mr.Dr. Zoley and pursuant to our senior officer retirement plan in the case of the other named executive officers; (ii) benefits under certain otherthe deferred compensation plans;plan; (iii) value attributable to life insurance we afford our named executive officers beyond that which is offered to our other employees generally; and (iv) travel and entertainment perquisites, such as an automobile allowance, club dues and personal use of the corporate aircraft. For 2019, Mr.2022, Dr. Zoley was allotted thirty (30) hours of personal use of the corporate aircraft. For 2019,aircraft, Mr. Gordo was allotted ten (10) hours of personal use of the Board authorized the allotment ofcorporate aircraft and Mr. Evans was allotted five (5) hours of personal use of the corporate aircraft for Mr. Evans.aircraft.
Mr. Zoley’s Executive Retirement Agreement in Place for 2019
Through 2019, Mr. Zoley had an executive retirement agreement that required us to pay him a lump sum amount upon his retirement. Such amount was determined by his age at the time of retirement with the amount increasing by approximately 4% per year up to age 71. Mr. Zoley’s benefits under the executive retirement agreement were fully vested and he was entitled to receive the amount called for by the agreement whenever his employment with GEO was terminated for any reason, whether by GEO or by him. If Mr. Zoley had retired at December 31, 2019, we would have had to pay him a total of $8.6 million. This amount would have been delivered in alump-sum amount and equates to $245,404 annually when divided by his 35 years of service with the Company.
Changes to Mr. Zoley’s Executive Retirement Agreement for 2020
Per a mutual agreement between the Chief Executive Officer and the Board of Directors signed February 26, 2020 (the “Effective Date”), Mr. Zoley entered into an amended and restated executive retirement agreement (the “2020 Amended and Restated Agreement”). In doing so, he elected to forgo his age 71 annuity funding deposit of $347,975 guaranteed under the prior executive retirement agreement. This results in a frozen annuity funding
amount at the age 70 amount of $8,925,065 under the prior executive retirement agreement as reflected in the table below.
RETIREMENT PAYMENT TABLE
RETIREMENT AGE | ANNUITY FUNDING AMOUNT | |||
62 | 6,570,198 | |||
63 | 6,826,873 | |||
64 | 7,092,162 | |||
65 | 7,369,509 | |||
66 | 7,657,192 | |||
67 | 7,956,934 | |||
68 | 8,267,011 | |||
69 | 8,589,147 | |||
70 | 8,925,065 | |||
71 or order | 9,273,040 | |||
The frozen annuity funding amount of $8,925,065 (known as the “Grandfathered Payment” under the plan) served as the starting balance under the 2020 Amended and Restated Agreement. This amount was then converted into 553,665 shares of GEO’s common stock using the closing price on the effective date of $16.12 per share.
Going forward, the value of the account will track the total shareholder return (share price + dividend distributions) of GEO’s shares of common stock over the period in which the agreement remains in place. No value will be guaranteed under the 2020 Amended and Restated Agreement like it was under the prior agreement. As such, Mr. Zoley has effectively exchanged a “fixed” retirement amount for an “at risk” retirement amount that is fully aligned with shareholders over the remainder of his career with GEO. For example, the 553,665 shares of GEO common stock constituting the Grandfathered Payment was worth $6.7 million on March 31, 2020 based on the closing price of $12.16 per share on that day. That is equivalent to a decrease of $2.2 million, or approximately 25%, as compared to the guaranteed payment under his prior executive retirement agreement.
The 2020 Amended and Restated Agreement does not provide for additional guaranteed Company deposits. Dividend distributions will be credited to the account on the date dividends are paid to other GEO shareholders as if they were reinvested in additional shares of common stock on that date. The Company will not make any further cash or share-based deposits into the account beyond these credited dividends.
The final balance will be equal to the number of shares of common stock times the share price per share on the date of his retirement and will be paid in shares of GEO common stock in compliance with Section 409A of the Internal Revenue Code.
The Company has established grantor trusts for the purpose of paying the retirement benefit pursuant to the 2020 Amended and Restated Agreement. The trusts are revocable “rabbi trusts” and the assets of the trusts shall be subject to the claims of the Company’s creditors in the event of the Company’s insolvency. Mr. Zoley will be solely responsible for the taxes due upon the distribution of the GEO shares of common stock to him upon his retirement and upon his election the Company can withhold GEO shares of common stock that would have otherwise been distributed to him in order to pay the taxes due. The Company will not subsidize or “gross-up” amounts to cover any taxes. Mr. Zoley has been vested in his executive retirement agreement since he reached age 55 under the prior executive retirement agreement and as a result he will be eligible to receive the shares of GEO common stock held by the rabbi trusts upon retiring from the Company.
For a full description and a copy of the 2020 Amended and Restated Agreement, please see the Form 8-K the Company filed on February 28, 2020.
Senior Officer Retirement Plan. Messrs. Gordo, Evans Donahue, Venturellaand Black and Ms. Schlarb currently participateparticipated during 2022 in our senior officer retirement plan, which is offered to all of our Senior Vice Presidents.senior officers. Ms. Schlarb retired effective January 31, 2023. The senior officer retirement plan is a defined benefit plan and, subject to certain maximum and minimum provisions, provides for the payment to the officer of a monthly retirement benefit based on a percentage of the officer’s final average annual salary earned during the employee’s last five years of credited service (excluding bonus) multiplied by the employee’s years of credited service. A participant will vest in his or her benefits under the senior officer retirement plan upon the completion of ten (10) years of service. The amount of benefit increases for each full year beyond ten (10) years of service except that there are no further increases
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after twenty-five (25) years of service. The maximum target benefit under the senior officer retirement plan is 45% of final average salary. Reduced benefits are payable for lesser service and early retirement. Benefits under the senior officer retirement plan are offset 100% by social security benefits received by the officer and are computed on the basis of a straight-life annuity. The plan also provides forpre-retirement death and disability benefits. Amounts owing under the plan are payable from the general assets of the Company.
Dr. Zoley’s Executive Retirement Agreement
Pursuant to the terms of the 2021 Amended and Restated Retirement Agreement, dated as of May 27, 2021, entered into between the Company and Dr. Zoley (the “2021 Amended and Restated Retirement Agreement”), upon the date that Dr. Zoley ceases to provide services to the Company, the Company will pay to Dr. Zoley an amount equal to $3,600,000 which shall be paid in cash (the “2021 Grandfathered Payment”). The value of $3,600,000 was determined based on the approximate value of the retirement payment due to Dr. Zoley under the prior retirement agreement that was payable in shares of GEO common stock based on the closing price per share prior to entering into the 2021 Amended and Restated Retirement Agreement. The payment shall be credited with interest at a rate of 5% compounded quarterly (the “Grandfathered Earnings Account”). Additionally, at the end of each calendar year the Company will credit an amount equal to $1,000,000 provided that Dr. Zoley is still providing services to the Company pursuant to the Executive Chairman Agreement (the “Employment Contributions Account”). The Employment Contributions Account will be credited with interest at the rate of 5% compounded quarterly (approximately 22% annually). Upon the date that Dr. Zoley ceases to provide services to the Company, the Company will pay Dr. Zoley in one lump sum cash payment each of the 2021 Grandfathered Payment, the Grandfathered Earnings Account and the Employment Contributions Account subject to the six-month delay provided in the 2021 Amended and Restated Retirement Agreement. The balance of the 2021 Grandfathered Payment and the Employment Contributions Account was $7.0 million at December 31, 2022.
Deferred Compensation PlansPlan. Our named executive officers are currently excluded from participating in our 401(k) plan by virtue of their compensation level. Accordingly, we have established a deferred compensation plan for certain employees, including the named executive officers, which permits them to defer up to 100% of their compensation to provide for their retirement. Under the deferred compensation plan, the Company may make matching contributions on a discretionary basis. Messrs. Evans Donahue, Venturella and Ms. Schlarb currentlyBlack participate in the deferred compensation plan. Ms. Schlarb participated in the deferred compensation plan prior to her retirement.
Excess Group Life Insurance. We pay rates for the life insurance policies of our named executive officers above the level that is excludable under applicable tax rules. Payments in connection with the resulting excess coverage are treated as imputed income to the officers and are not deductible by the Company.
How Each Compensation Element Fits into the Overall Compensation Objectives and Affects Decisions Regarding Other Elements
In establishing compensation packages for executive officers, numerous factors are considered, including the particular executive’s experience, expertise and performance, the Company’s overall performance and compensation packages available in the marketplace for similar positions. In arriving at amounts for each component of compensation, our Compensation Committee strives to strike an appropriate balance between base compensation and incentive compensation, including equity based compensation and cash awards under the Senior Management Performance Award Plan. The Compensation Committee also endeavors to properly allocate between cash andnon-cash compensation (subject to the availability of equity compensation awards under our then current equity compensation plans), and between annual and long-term compensation.
When considering the marketplace, particular emphasis is placed upon compensation packages available at a comparable group of peer companies.
In 2012, Pay Governance completed a report on behalf of the Compensation Committee to evaluate its executive compensation program in light of the marketplace to make sure the program is competitive. In 2015, Pay Governance completed an assessment of Mr. Zoley’s total compensation in light of the marketplace and the ISS peer group specifically. In 2018, Pay Governance completed a peer group analysis to evaluate the compensation levels of our named executive officers. In 2019,2022, the Compensation Committee requested that Pay Governance provide the Compensation Committee with a report of its review and analysis of executive and director compensation levels, policies,
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practices, and procedures with a comparison to a set of peer companies selected by the Compensation Committee with input from Pay Governance. In 2021, the Compensation Committee requested that Pay Governance provide the Compensation Committee with a report of its review and analysis of the proposed compensation relating to the CEO succession for Dr. Zoley in his new role as Executive Chairman and Mr. Gordo as Chief Executive Officer. In 2022, the Compensation Committee requested that Pay Governance provide the Compensation Committee with a report on executive compensation trends and developments. Pay Governance prepared and submitted the annual report on this comparative studyvarious reports and presentations to the Compensation Committee.Committee and, on occasion, discussed the content with the Chairman of the Compensation Committee prior to Compensation Committee meetings.
Executive and Director Stock Ownership Guidelines
The Company adopted stock ownership guidelines in 2012 applicable to our senior executive officers, including our named executive officers, and our boardBoard members. The guidelines, as most recently amended in 2018, require
our CEO to maintain equity holdings in GEO equal in value to at least 6 times his annual base salary, our other executive officers to maintain equity holdings in GEO equal in value to at least 3 times their annual base salaries, and ournon-employee directors to maintain equity holdings in GEO equal in value to at least 3 times their annual cash retainers. The guidelines as most recently amended also specify that shares which will count toward the total share ownership requirement are actual shares owned, options and restricted shares, vested and unvested, and unvested performance share awards at the threshold level. Performance share awards at the target and maximum level will not be counted until the performance metrics have been met and the performance shares have vested. All senior executive officers and directors must satisfy the stock ownership guidelines five years from their appointment as a director or a senior executive officer. Each of our senior executive officers and directors has satisfied such guidelines or has time remaining to do so under the guidelines. The Compensation Committee oversees the stock ownership guidelines and any amendments to the stock ownership guidelines.
Clawback/Recoupment Policy
The Company maintains a clawback policy providing that any incentive payment awarded by GEO to an executive officer (including a named executive officer) under any GEO incentive compensation plan may be recouped by GEO in the event of material fraud or misconduct by the recipient and in the event of a required accounting restatement of GEO’s financial statements (whether or not based on misconduct) due to the material noncompliance of GEO with any financial reporting requirement under U.S. federal securities laws.
Prohibition of Hedging and Pledging of Company Shares
The Company prohibits certain transactions in the Company’s securities under the terms of its insider trading policy, including engaging in hedging transactions to hedge against losses on the Company’s securities, including but not limited to collars, forward sale contracts, trading in publicly traded options, puts, calls or other derivative instruments, and engaging in short sales of the Company’s securities. Additionally, directors, officers and employees may not hold Company securities in margin accounts or otherwise pledge Company securities as collateral for a loan unless a waiver from this restriction is granted by the Chief Executive Officer or the Chairman of the Compensation Committee.
CONCLUSIONConclusion
We believe that our compensation programs appropriately reward executive performance and closely align the interests of our named executive officers and key employees with the interests of our shareholders, while also enabling the Company to attract, retain, and motivate talented executives. The Compensation Committee will continue to evolve and administer our compensation program in a manner that the Compensation Committee believes will be in the best interests of our shareholders. The Compensation Committee monitors the results of the advisory vote on our executive compensation (referred to as the“say-on-pay” vote) and incorporates such results as one of many factors considered in connection with the discharge of its responsibilities.
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SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Richard H. Glanton,Terry Mayotte, Chairman
Anne N. Foreman
Christopher C. WheelerAndrew Shapiro
Compensation Policies and Practices as They Relate to Risk Management
Our executive compensation program is designed to attract and retain our officers and to motivate them to increase shareholder value on both an annual and longer term basis primarily by generating increasing levels of revenue and net income. To that end, compensation packages include significant forms of incentive compensation to ensure that an executive officer’s interest is aligned with the interests of our shareholders in generating revenue and net income. Based upon the Compensation Committee’s regular review of the Company’s compensation policies and practices, the Compensation Committee determined that the risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company.
The following table shows compensation earned by each of the named executive officers of GEO during 2019, 20182022, 2021 and 2017,2020, for services in all capacities while they were employees of GEO, and the capacities in which the services were rendered. For purposes of this proxy statement, GEO’s named executive officers are (i) the Chief Executive Officer of GEO, (ii) the Chief Financial Officer of GEO, and (iii) each of the three most highly compensated executive officers as of December 31, 20192022 of GEO other than the executive officers that served as Chief Executive Officer and theor Chief Financial Officer.Officer during the fiscal year ended December 31, 2022. For fiscal year ended 2021, Dr. Zoley served as Chairman of the Board and Chief Executive Officer until July 1, 2021, when he was appointed Executive Chairman. Mr. Gordo was appointed Chief Executive Officer effective July 1, 2021.
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||
George C. Zoley Chairman of the Board, CEO & Founder | 2019 | 1,136,224 | 2,565,000 | 1,884,666 | 364,580 | 95,642 | 6,046,112 | |||||||||||||||||||||
| 2018 | 1,103,130 | 3,703,500 | 1,730,811 | 302,646 | 123,373 | 6,963,460 | ||||||||||||||||||||||
| 2017 | 1,081,500 | 6,120,250 | 1,959,678 | 307,173 | 195,832 | 9,664,433 | ||||||||||||||||||||||
Brian R. Evans Senior Vice President & CFO | 2019 | 620,792 | 1,026,000 | 514,857 | 508,394 | 16,652 | 2,686,695 | |||||||||||||||||||||
| 2018 | 602,711 | 1,111,050 | 472,827 | (19,308 | ) | 49,161 | 2,216,441 | |||||||||||||||||||||
| 2017 | 590,893 | 1,833,213 | 535,349 | 302,360 | 20,156 | 3,281,971 | ||||||||||||||||||||||
J. David Donahue (6) Senior Vice President & President, GEO Secure Services | 2019 | 551,565 | 769,500 | 426,947 | 287,070 | 40,803 | 2,075,885 | |||||||||||||||||||||
| 2018 | 535,500 | 925,875 | 392,093 | 137,575 | 34,995 | 2,026,038 | ||||||||||||||||||||||
| 2017 | 525,000 | 1,530,063 | 443,940 | 149,557 | 23,395 | 2,671,955 | ||||||||||||||||||||||
Ann M. Schlarb Senior Vice President & President; GEO Care | 2019 | 446,505 | 513,000 | 345,624 | 136,979 | 15,709 | 1,457,817 | |||||||||||||||||||||
| 2018 | 443,500 | 740,700 | 317,409 | 88,064 | 37,156 | 1,626,829 | ||||||||||||||||||||||
| 2017 | 425,000 | 1,224,050 | 359,380 | 49,702 | 8,845 | 2,066,977 | ||||||||||||||||||||||
David Venturella Senior Vice President Business Development | 2019 | 409,609 | 513,000 | 317,064 | 92,551 | 19,215 | 1,351,439 | |||||||||||||||||||||
| 2018 | 397,679 | 740,700 | 291,181 | 49,028 | 9,996 | 1,488,584 | ||||||||||||||||||||||
| 2017 | 389,881 | 1,224,050 | 329,683 | — | 17,758 | 1,961,372 | ||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||||||||||
George C. Zoley(6) Executive Chairman, Former CEO & Founder | 2022 | 1,050,000 | — | 1,000,005 | 2,083,065 | 2,070,851 | 112,596 | 6,316,517 | ||||||||||||||||||||||||
| 2021 | 1,085,156 | — | 1,978,000 | 2,292,565 | (566,232 | ) | 6,480,759 | 11,270,248 | ||||||||||||||||||||||||
| 2020 | 1,170,311 | — | 2,452,500 | 1,755,467 | (3,389,833 | ) | 53,449 | 2,041,894 | ||||||||||||||||||||||||
Jose Gordo(6) Chief Executive Officer | 2022 | 975,000 | — | 1,560,000 | 1,934,274 | — | 61,998 | 4,531,272 | ||||||||||||||||||||||||
| 2021 | 450,000 | 391,253 | 636,485 | — | 123,469 | 1,601,207 | ||||||||||||||||||||||||||
| 2020 | — | 86,376 | — | — | 117,500 | 203,876 | ||||||||||||||||||||||||||
Brian R. Evans Senior Vice President & CFO | 2022 | 675,000 | — | 780,000 | 1,071,290 | — | 20,904 | 2,547,194 | ||||||||||||||||||||||||
| 2021 | 639,416 | — | 1,408,699 | 797,997 | 129,915 | 17,676 | 2,993,703 | |||||||||||||||||||||||||
| 2020 | 639,416 | — | 817,500 | 479,562 | 458,169 | 22,606 | 2,394,647 | |||||||||||||||||||||||||
Ann M. Schlarb Former Senior Vice President & President; GEO Care | 2022 | 550,000 | — | 624,000 | 818,347 | — | 15,993 | 2,008,340 | ||||||||||||||||||||||||
| 2021 | 459,900 | — | 426,880 | 535,696 | 118,449 | 15,993 | 1,556,918 | |||||||||||||||||||||||||
| 2020 | 459,900 | — | 531,375 | 321,930 | 164,260 | 17,805 | 1,495,270 | |||||||||||||||||||||||||
James Black Senior Vice President, President Secure Services | 2022 | 525,000 | — | 624,000 | 781,149 | — | 22,664 | 1,952,813 | ||||||||||||||||||||||||
| 2021 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| 2020 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| (1) | This column reflects the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 (“FASB 718”) with respect to stock awards granted during |
| (2) | The |
| (3) | We regard our Senior Management Performance Award Plan as our annual bonus plan. The column of this table titled“Non-Equity Incentive Plan Compensation” consists solely of amounts accrued in |
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| 2021 and |
| (4) | Figures in this column consist of amounts accrued in |
| (5) | The following sets forth for each named executive officer the description and amount of each item comprising each officer’s total compensation appearing in the “All Other Compensation” column for |
| All Other Compensation | All Other Compensation | All Other Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Executive | Year | Auto Allowance ($)(a) | Club Dues ($) | Excess Group Life Insurance ($)(b) | Aircraft Usage ($)(c) | Total All Other Compensation ($) | Year | Auto Allowance ($)(a) | Club Dues ($) | Excess Group Life Insurance ($)(b) | Aircraft Usage ($)(c) | Home Security ($) | Board Fees ($)(d) | Severance Payments ($) | Total All Other Compensation ($)(d) | |||||||||||||||||||||||||||||||||||||||||||||
George C. Zoley | 2019 | 9,312 | 25,097 | 4,191 | 57,042 | 95,642 | 2022 | — | 31,500 | 4,191 | 74,300 | 2,605 | — | — | 112,596 | |||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 53,137 | 16,050 | 4,191 | 49,995 | 123,373 | 2021 | (5,628 | ) | 33,170 | 4,191 | 17,971 | — | — | 6,431,055 | 6,480,759 | |||||||||||||||||||||||||||||||||||||||||||||
| 2017 | — | 39,124 | 4,191 | 152,517 | 195,832 | 2020 | 8,729 | 25,097 | 4,352 | 15,271 | — | — | — | 53,449 | ||||||||||||||||||||||||||||||||||||||||||||||
Brian R. Evans | 2019 | 7,947 | — | 1,242 | 7,463 | 16,652 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jose Gordo | 2022 | 11,384 | 11,235 | — | 39,379 | — | — | — | 61,998 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 32,920 | — | 1,242 | 14,999 | 49,161 | 2021 | 2,807 | 10,037 | — | — | — | 110,625 | — | 123,469 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 12,734 | — | 810 | 6,612 | 20,156 | 2020 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
J. David Donahue | 2019 | 12,100 | 26,381 | 2,322 | — | 40,803 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brian R. Evans | 2022 | 8,948 | — | 1,242 | 8,916 | 1,798 | — | — | 20,904 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 15,981 | 16,692 | 2,322 | — | 34,995 | 2021 | 8,831 | — | 1,242 | 7,603 | — | — | — | 17,676 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 12,839 | 8,234 | 2,322 | — | 23,395 | 2020 | 8,831 | — | 1,290 | — | 12,485 | — | — | 22,606 | ||||||||||||||||||||||||||||||||||||||||||||||
Ann M. Schlarb | 2019 | 5,627 | 9,047 | 1,035 | — | 15,709 | 2022 | 11,226 | 3,732 | 1,035 | — | — | — | — | 15,993 | |||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 36,121 | — | 1,035 | — | 37,156 | 2021 | 9,492 | 13,375 | 1,035 | — | — | — | — | 23,902 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 7,956 | — | 889 | — | 8,845 | 2020 | 7,683 | 9,047 | 1,075 | — | — | — | — | 17,805 | ||||||||||||||||||||||||||||||||||||||||||||||
David Venturella | 2019 | 9,230 | 9,047 | 938 | — | 19,215 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
James Black | 2022 | 7,138 | 14,927 | 599 | — | — | — | — | 22,664 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 9,058 | — | 938 | — | 9,996 | 2021 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 8,635 | 8,234 | 889 | — | 17,758 | 2020 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| (a) | Under our executive automobile policy, the executive is required to make contributions to GEO in circumstances where the cost of the executive automobile exceeds the overall cost allowance as determined under the policy. |
| (b) | We pay rates for the life insurance policies of our named executive officers above the level that is excludable under applicable tax rules. The resulting excess coverage represented in this column is treated as imputed income to the officers. |
| (c) | We provided certain perquisites to the named executive officers for personal use of the Company’s leased aircraft. For |
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| (d) | For Mr. Gordo, the column “Board Fees” includes $110,625 in compensation he earned as a director of the Company in 2021 prior to being appointed as Chief Executive Officer effective July 1, 2021. |
| (6) |
|
CERTAIN MATERIAL EXECUTIVE COMPENSATION AGREEMENTS AND ARRANGEMENTS
The following executive compensation agreements and arrangements are material to an understanding of the amounts paid and/or payable to our named executive officers disclosed in the table above.
Executive Employment Agreements
Effective August 22, 2012, we entered into a Third Amended and Restated Executive Employment Agreement with Mr.for George C. Zoley which was amended by the First Amendment, dated April 29, 2013, the Second Amendment, dated
The Company and Dr. Zoley entered into on May 29, 2013, and the Third Amendment, dated June27, 2021 an Executive Chairman Employment Agreement effective as of July 1, 2015 (collectively, the “Employment2021 (the “Executive Chairman Agreement”). The EmploymentPursuant to the terms of the Executive Chairman Agreement, hasDr. Zoley serves as Executive Chairman assisting the new Chief Executive Officer in his transition, among other duties and responsibilities, and reports directly to the Board of Directors for a continuously rolling three-yearterm of five years ending on June 30, 2026 and subject to automatic renewals for one-year periods unless either the Company or Dr. Zoley gives written notice at least 1 year prior to the expiration of the term. Under the terms of the Executive Chairman Agreement, Dr. Zoley will be paid an annual base salary of $1.0 million and will be eligible to receive target annual performance awards equal to 100% of base salary in accordance with the terms of any plan governing senior management performance awards. Dr. Zoley will also be entitled to receive an annual equity incentive award with a grant date fair value equal to 100% of base salary and subject to a time-based vesting schedule of one (1) year from the date of grant. Lastly, Dr. Zoley is entitled to participate in all benefits and perquisites available to executive officers of GEO.
The EmploymentExecutive Chairman Agreement provides that Mr.upon the termination of the Executive Chairman Agreement by the Company without cause, by Dr. Zoley for good reason or upon Dr. Zoley’s death or disability, Dr. Zoley will be entitled to receive a termination payment equal to two times the sum of his annual base salary and the target bonus. In addition, the unvested portion of any equity award will fully vest and the Company will provide Dr. Zoley and any of his covered dependents with the executive benefits beginning on the date that they are no longer entitled to the fringe benefits under the separation agreement until the ten (10) year anniversary of the date of termination of the Executive Chairman Agreement. For purposes of the Executive Chairman Agreement, “Good Reason” shall exist if (i) there is a material reduction in Dr. Zoley’s authority, duties or responsibilities thereunder, including any requirement that Dr. Zoley is required to report to any person or entity other than the Board; (ii) any material reduction to Dr. Zoley’s Base Salary, Bonus, Equity Award or Retirement Credit; (iii) GEO requires Dr. Zoley to change the geographic location at which he must perform services under this Agreement more than 50 miles from the location at which he was principally employed; or (iv) any material breach of this Agreement by GEO; provided, however, Good Reason will only exist if Dr. Zoley gives GEO written notice of the existence of the above referenced event within ninety (90) days of the initial existence of such event and GEO fails to remedy such event within 90 days of such notice.
Upon the termination of the Executive Chairman Agreement by GEO for cause or by Dr. Zoley without good reason, Dr. Zoley will be entitled to only the amount of compensation that is due through the effective date of the termination, including the retirement benefit due to him under his executive retirement agreement. The Executive Chairman Agreement contains restrictive covenants, including a non-competition covenant that runs through the three (3) year period following the termination of the executive’s employment, and customary confidentiality and work product provisions.
Executive Employment Agreement for Jose Gordo
Mr. Gordo and the Company entered into an Executive Employment Agreement (the “CEO Employment Agreement”) on May 27, 2021 to provide that Mr. Gordo will be employed by the Company for a three-year term beginning July 1, 2021 (the “Effective Date”). Unless the CEO Employment Agreement is sooner terminated, or not renewed, it will automatically extend upon the end of its initial term for a rolling three-year term. Pursuant to the terms of the CEO Employment Agreement, Mr. Gordo will serve as Chief Executive Officer and report directly to the Executive Chairman. Either Mr. Gordo or the Company may terminate Mr. Gordo’s employment under the CEO Employment Agreement for any reason upon not less than thirty (30) days written notice.
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Under the terms of the CEO Employment Agreement, Mr. Gordo will be paid an annual base salary of $900,000, subject to the review and potential increase within the sole discretion of the Compensation Committee. Mr. Gordo will also be entitled to receive a target annual performance award of up to a maximum85% of 150% of his annualMr. Gordo’s base salary and will also be entitled to participate in accordance with the Senior Management Performance Award Plan.Company’s stock incentive plan and upon the Effective Date, the Company granted Mr. Gordo an award of 50,000 performance-shares that will vest ratably over a three-year period.
The CEO Employment Agreement provides that upon the termination of the agreement for any reason other than by GEO for cause (as defined in the Employment Agreement) or by Mr. Zoley withoutGordo for good reason, (as defined inby the Employment Agreement),Company without cause or upon the death or disability of Mr. Gordo, he will be entitled to receive a termination payment equal to 2 (two)two (2) times the sum of his annual base salary plus target bonus for the fiscal year in which his employment is terminated or, if greater, the target bonus for the fiscal year immediately prior to such termination. The Company will also continue to provide Mr. Gordo and any covered dependents with the Executive Benefits as defined in the CEO Employment Agreement for a period of five (5) years after the date of termination. In the event of Mr. Gordo’s death within such five (5) year period, the Company will continue to provide the Executive Benefits to Mr. Gordo’s covered dependents, and, if applicable to Mr. Gordo’s estate. In addition, the CEO Employment Agreement provides that upon such termination, GEO will transfer all of its interest in any automobile used by the executive pursuant to its employee automobile policy and pay the balance of any outstanding loans or leases on such automobile so that the executive owns the automobile outright. In the event such automobile is leased, the CEO Employment Agreement provides that GEO will pay the residual cost of the lease. In the event the Company does not pay the termination payment by the due date, then any unpaid amount shall bear interest at the rate of eighteen percent (18%) per annum, compounded monthly, until paid. Lastly, all of the outstanding and unvested stock options and restricted stock granted to Mr. Gordo prior to termination will fully vest immediately upon termination; provided, however that any restricted stock that is subject to performance-based vesting shall only vest when and to the extent the Compensation Committee certifies that the performance goals are actually met.
Upon the termination of the CEO Employment Agreement by GEO for cause or by Mr. ZoleyGordo without good reason, Mr. ZoleyGordo will be entitled to only the amount of compensation that is due through the effective date of the termination, including the retirement benefit due to him under his executive retirement agreement.termination. The CEO Employment Agreement includes anon-competition covenant that runs through the three-year period following the termination of the executive’s employment, and customary confidentiality and work product provisions.
The Employment Agreement for Mr. Zoley reflected an annual base salary of $1,000,000 for 2015 and provides that the annual base salary is subject to increases in the future as determined by the Compensation Committee in its sole discretion. Additionally, the Employment Agreement provides that all outstanding unvested stock options and restricted stock granted to Mr. Zoley fully vest immediately upon a “termination without cause” as such term is defined in his employment agreements, as approved by the Compensation Committee. However, any restricted stock that is still subject to performance based vesting at the time of such termination shall only vest when, and to the extent, the Compensation Committee of the board of directors certifies that the performance goals have been met.
Senior Officer Employment Agreements
We have senior officer employment agreements with Messrs. Evans and Venturella,Black and we had a senior officer employment agreement with Ms. Schlarb.Schlarb prior to her retirement. The employment agreements have rollingtwo-year terms which continue until each executive reaches age 67 absent their earlier termination. We also have a senior officer employment agreement in place with Mr. Donahue through July 11, 2020, his retirement date.
The amounts of base salaries that were paid to each of these executives during fiscal years 2019, 20182022, 2021 and 20172020 are set forth in the Summary Compensation Table above. The executives are also entitled to receive a target annual incentive bonus in accordance with the terms of our Senior Management Performance Award Plan which is further described below.above in the Compensation Discussion & Analysis section.
The senior officer employment agreements provide that upon the termination of the agreement for any reason other than by GEO for cause (as defined in the employment agreement) or by the voluntary resignation of the executive, the executive will be entitled to receive a termination payment equal to the following: (1) two years of the executive’s then current annual base salary; plus (2) the continuation of the executive’s employee benefits (as defined in the employment agreement) for a period of two years, plus (3) the dollar value of the sum of paid vacation time that the executive was entitled to take immediately prior to the termination which was not in fact taken by the executive. In addition, the employment agreements provide that upon such termination of the executive, weGEO will transfer all of ourits interest in any automobile used by the executive pursuant to ourits employee automobile policy and pay the balance of any outstanding loans or leases on such automobile so that the executive owns the automobile outright. In the event such automobile is leased, the employment agreements
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provide that weGEO will pay the residual cost of the lease. Also, upon such termination, all of the executive’s unvested stock options and restricted stock will fully vest immediately, provided however, that any restricted stock that is still subject to performance based vesting at the time of such termination shall only vest when and to the extent the Compensation Committee of the Board certifies that the performance goals were actually met.
Upon the termination of the employment agreements by usGEO for cause or by the voluntary resignation of the executive, the executive will be entitled to only the amount of salary, bonus, and employee benefits that is due through the effective date of the termination. Each employment agreement includes anon-competition covenant that runs through thetwo-year period following the termination of the executive’s employment, and customary confidentiality provisions.
Under the terms of the employment agreements, annual base salaries for 20192022 approved by the Compensation Committee for Messrs. Evans, Donahue and VenturellaBlack and Ms. Schlarb were $620,792, $551,565, $409,609$675,000, $525,000, and $446,505,$550,000, respectively. Additionally, all outstanding unvested stock options and restricted stock granted to each of Messrs. Evans, Donahue and VenturellaBlack and Ms. Schlarb fully vest immediately upon a “termination without cause” as such term is defined in each of their employment agreements, as approved by the Compensation Committee. Performance based awards will only vest upon the determination by the Compensation Committee that the established performance goals have been met.
Executive Retirement Agreement
During 2019, we had in place an executive retirement agreement with Mr. Zoley. The retirement agreement provided that uponPlease see the later of (i) the date he actually retires from employment with GEO, or (ii) his 55th birthday, GEO would make a lump sum payment to Mr. Zoley. See “Potential Payments Upon Termination or Change in Control” for the amount we would have had to pay Mr. Zoley as of December 31, 2019 pursuant to his executive retirement agreement had he retired at his current age as of that date. The retirement agreement provided that if the executive should die after his 55th birthday but before he retires from GEO, GEO shall immediately pay to the executive’s beneficiary(ies) or estate the amount GEO would have paid to the executive had he retired immediately prior to his death. The retirement agreement includednon-competition provisions that run“Compensation Discussion & Analysis” section above for atwo-year period after the termination discussion of the executive’s employment. Mr. Zoley has reached the age of 55. On February 26, 2020, we entered into the 2020 Amended and Restated Retirement Agreement the Company has in place with Mr.Dr. Zoley. Please see the discussion of the 2020 Amended and Restated Agreement in the Compensation Discussion & Analysis section above.
Senior Officer Retirement Plan
GEO maintains a senior officer retirement plan for all of its Senior Vice Presidents,senior officers, including Mr.Messrs. Gordo, Evans, Mr. Donahue, Mr. Venturellaand Black and Ms. Schlarb. The senior officer retirement plan is anon-qualified defined benefit plan and, subject to certain maximum and minimum provisions, provides for the payment to the officer of a monthly retirement benefit based on a percentage of the officer’s final average annual salary earned during the employee’s last five years of credited service (excluding bonus) multiplied by the employee’s years of credited service. A participant will vest in his or her benefits under the senior officer retirement plan upon the completion of ten (10) years of service, provided such participant remains continuously employed by the Company until at
least age fifty-five (55). The amount of benefit increases for each full year beyond ten (10) years of service except that there are no further increases after twenty-five (25) years of service. The maximum target benefit under the senior officer retirement plan is 45% of final average annual salary. Reduced benefits are payable for lesser service and early retirement. Benefits under the senior officer retirement plan are offset one hundred percent (100%) by social security benefits received (or estimated social security benefits to be received, if applicable) by the officer and are computed on the basis of a straight-life annuity. The plan also provides forpre-retirement death and disability benefits. Amounts owing under the plan are payable from the general assets of the Company. Mr. Donahue is a participant under the Senior Officer Retirement Plan. At the time of his retirement on July 11, 2020, Mr. Donahue will have completed in excess of ten (10) years of service. As a result, Mr. Donahue will be entitled to receive a retirement payment of approximately $0.5 million under the terms of the Senior Officer Retirement Plan.
Equity Compensation Plan Information
The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our equity compensation plans as of December 31, 2019, including our 2006 Stock Incentive Plan, our 2014 Stock Incentive Plan and our 2018 Stock Incentive Plan. Our shareholders have approved all of these plans.
| Plan category | (a) Number of securities to | (b) Weighted-average | (c) Number of securities | |||||||||
Equity compensation plans approved by security holders | 1,589,192 | $ | 24.29 | 2,686,562 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
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Total | 1,589,192 | $ | 24.29 | 2,686,562 | ||||||||
GRANTS OF PLAN-BASED AWARDS
The following sets forth information regarding the grants of plan-based awards to the named executive officers for the year ended December 31, 2019.2022.
All Number | ||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Estimated Future Payouts Under Incentive Plan Awards(1) | Estimated Future | All Other Number of (#) | Exercise ($/Sh) | Grant Date Fair Value of Stock Awards ($)(2) | ||||||||||||||||||||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||||||||||||||||||||
George C. Zoley | 852,168 | 1,704,336 | 2,556,504 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| 3/1/2019 | — | — | — | — | — | — | 100,000 | — | — | 2,565,000 | ||||||||||||||||||||||||||||||||||
Brian R. Evans | 232,797 | 465,594 | 1,047,587 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| 3/1/2019 | — | — | — | — | — | — | 40,000 | — | — | 1,026,000 | ||||||||||||||||||||||||||||||||||
J. David Donahue | 193,048 | 386,096 | 868,715 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| 3/1/2019 | — | — | — | — | — | — | 30,000 | — | — | 769,500 | ||||||||||||||||||||||||||||||||||
Ann M. Schlarb | 156,277 | 312,554 | 703,245 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| 3/1/2019 | — | — | — | — | — | — | 20,000 | — | — | 513,000 | ||||||||||||||||||||||||||||||||||
David Venturella | 143,363 | 286,726 | 645,134 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| 3/1/2019 | — | — | — | — | — | — | 20,000 | — | — | 513,000 | ||||||||||||||||||||||||||||||||||
All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | ||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock Awards ($)(3) | ||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
George C. Zoley | — | 1,041,533 | 2,083,065 | 4,166,130 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3/1/2022 | — | — | — | — | — | — | 173,612 | — | — | 1,000,005 | ||||||||||||||||||||||||||||||||||
Jose Gordo | — | 967,137 | 1,934,274 | 3,868,548 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3/1/2022 | — | — | — | 75,000 | 250,000 | 500,000 | — | — | — | 1,560,000 | ||||||||||||||||||||||||||||||||||
Brian R. Evans | — | 535,645 | 1,071,290 | 2,142,580 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3/1/2022 | — | — | — | 37,500 | 125,000 | 250,000 | — | — | — | 780,000 | ||||||||||||||||||||||||||||||||||
Ann M. Schlarb | — | 390,575 | 781,149 | 1,562,298 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3/1/2022 | — | — | — | 30,000 | 100,000 | 200,000 | — | — | — | 624,000 | ||||||||||||||||||||||||||||||||||
James Black | — | 390,575 | 781,149 | 1,562,298 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3/1/2022 | — | — | — | 30,000 | 100,000 | 200,000 | — | — | — | 624,000 | ||||||||||||||||||||||||||||||||||
| (1) | These columns reflects the threshold, target and maximum amounts that our named executive officers were eligible to receive under our Senior Management Performance Award Plan with respect to year |
| (2) | The awards reported under the “Estimated Future Payouts Under Equity Incentive Plan Awards” and the “All Other Stock Awards: Number of Shares of Stock or Units” columns were granted pursuant to our amended and restated 2018 stock incentive plan. The columns under the “Estimated Future Payouts Under Equity Incentive Plan Awards” reflect the threshold, target and maximum number of shares of common stock that our named executive officers are eligible to receive pursuant to the performance-based restricted stock granted in 2022, other than Dr. Zoley who received a grant of time-based restricted stock pursuant to his appointment as Executive Chairman. For a description of how these amounts of shares have been calculated, please see “Compensation Discussion & Analysis – Why Each Element of Compensation is Paid and How the Amount of Each Element is Determined—2022 Equity Incentive Awards.” |
| (3) | The percentage of the shares related to the return on capital employed metric was valued on our closing stock price on March 1, |
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|
OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END
The following table sets forth certain information regarding equity-based awards held by our named executive officers as of December 31, 2019.2022.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of (#)(1) | Market ($)(2) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | ||||||||||||||||||||||||||||||||||||||
George C. Zoley | — | — | — | — | — | 400,002 | 6,644,033 | — | — | — | — | — | 592,362 | 6,486,364 | ||||||||||||||||||||||||||||||||||||||
Jose Gordo | — | — | — | — | — | 312,784 | 3,424,985 | |||||||||||||||||||||||||||||||||||||||||||||
Brian R. Evans | — | — | — | — | — | 130,000 | 2,159,300 | — | — | — | — | — | 397,334 | 4,350,807 | ||||||||||||||||||||||||||||||||||||||
| 10,404 | — | — | 14.19 | 3/1/2021 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
J. David Donahue | — | — | — | — | — | 105,000 | 1,744,050 | |||||||||||||||||||||||||||||||||||||||||||||
| — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Ann M. Schlarb | 8,670 | — | — | 14.87 | 8/15/2022 | 80,001 | 1,328,817 | — | — | — | — | — | 190,500 | 2,085,975 | ||||||||||||||||||||||||||||||||||||||
David Venturella | — | — | — | — | — | 80,000 | 1,328,800 | |||||||||||||||||||||||||||||||||||||||||||||
James H. Black | — | — | — | — | — | 121,250 | 1,327,688 | |||||||||||||||||||||||||||||||||||||||||||||
| (1) | All shares in this column consist of restricted stock awards. The awards granted on March 1, |
| (2) | Amounts in this column have been calculated using an assumed stock price of |
OPTION EXERCISES AND STOCK VESTED
The following table sets forth certain information regarding stock option exercises by, and the vesting of stock-based awards of, each of the named executive officers of GEO during 2019.2022.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||
| Name | Number of (#) | Value on | Number of Shares Acquired on Vesting (#) | Value ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||||||
George C. Zoley | — | — | 126,221 | 2,583,744 | — | — | 96,620 | 544,937 | ||||||||||||||||||||
Jose Gordo | — | — | 4,753 | 27,377 | ||||||||||||||||||||||||
Brian R. Evans | 3,468 | 18,393 | 31,555 | 645,931 | — | — | 103,061 | 581,264 | ||||||||||||||||||||
J. David Donahue | — | — | 33,805 | 697,523 | ||||||||||||||||||||||||
Ann M. Schlarb | — | — | 25,244 | 516,745 | — | — | 19,324 | 108,987 | ||||||||||||||||||||
David Venturella | — | — | 25,244 | 516,745 | ||||||||||||||||||||||||
James H. Black | — | — | 14,500 | 83,295 | ||||||||||||||||||||||||
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PENSION BENEFITS
The following table sets forth certain information with respect to each plan that provides for payments to each of the named executive officers of GEO at, following, or in connection with retirement from GEO.
| Name | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year | ||||||||||
George C. Zoley | Executive Retirement Agreement | n/a | 8,631,591 | — | ||||||||||
Brian R. Evans | Senior Officer Retirement Plan | 19 | 1,607,473 | — | ||||||||||
J. David Donahue | Senior Officer Retirement Plan | 10 | 667,504 | — | ||||||||||
Ann M. Schlarb | Senior Officer Retirement Plan | 8 | — | — | ||||||||||
David Venturella | Senior Officer Retirement Plan | 7 | — | — | ||||||||||
| Name | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year | ||||||||
George C. Zoley | Executive Retirement Agreement | n/a | 7,039,851 | — | ||||||||
Jose Gordo | Senior Officer Retirement Plan | — | — | — | ||||||||
Brian R. Evans | Senior Officer Retirement Plan | 22 | 1,635,318 | — | ||||||||
Ann M. Schlarb | Senior Officer Retirement Plan | 11 | 518,803 | — | ||||||||
James H. Black | Senior Officer Retirement Plan | — | — | — | ||||||||
| (1) | The benefit of |
| (2) | This column reflects amounts relating to each named executive officer’s retirement agreement or retirement plan. The assumptions used in GEO’s actuarial calculation of pension costs are based on payments in the form of a life annuity using market information and GEO’s historical rates for employment compensation. Such actuarial assumptions are based using mortality tables for healthy participants and include a discount rate of |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table sets forth for each named executive officer the payments that weGEO would have been required to make as of December 31, 2019,2022, (i) pursuant to the officer’s employment agreement, in connection with the termination of the officer’s employment as of that date by GEO without cause or by the officer for good reason (as such terms are defined in each officer’s employment agreement), (ii) pursuant to the officer’s employment agreement, in connection with the termination of the officer’s employment as of that date by GEO for cause (as defined in each officer’s employment agreement) or by the officer upon the officer’s resignation, and (iii) pursuant to the officer’s retirement agreement or arrangement, in connection with the termination of the officer’s employment as of that date for any reason (including due to the retirement, death or disability of the officer). All of the payments in the table would have been payable pursuant to the employment and retirement agreements and arrangements described more fully above under “Certain Material Executive Compensation
Agreements and Arrangements.” All amounts in the table would have been payable in lump sums from the general assets of GEO.
| Name | Payment Due Pursuant to Officer’s Employment Agreement upon Termination either by Company Without Cause or by Officer for Good Reason ($)(1)(2)(3)(4) | Payment Due Pursuant to Officer’s Employment Agreement upon a Termination by Company With Cause or Resignation by Officer ($)(2)(4) | Payment Due Pursuant to Officer’s Retirement Agreement or Arrangement upon a Termination for Any Reason ($)(2)(4)(5) | |||||||||
George C. Zoley | 6,339,093 | — | 8,631,591 | |||||||||
Brian R. Evans | 1,329,345 | — | — | |||||||||
J. David Donahue | 1,165,288 | — | 667,504 | |||||||||
Ann M. Schlarb | 966,036 | — | — | |||||||||
David Venturella | 881,428 | — | — | |||||||||
| Name | Payment Due Pursuant to Officer’s Employment Agreement upon Termination either by Company Without Cause or by Officer for Good Reason ($)(1)(2)(3)(4) | Payment Due Pursuant to Officer’s Employment Agreement upon a Termination by Company With Cause or Resignation by Officer ($)(2)(4) | Payment Due Pursuant to Officer’s Retirement Agreement or Arrangement upon a Termination for Any Reason ($)(2)(4)(5) | |||||||
George C. Zoley | 4,455,562 | — | 7,039,851 | |||||||
Jose Gordo(6) | 4,184,784 | — | — | |||||||
Brian R. Evans | 1,481,913 | — | 1,635,318 | |||||||
Ann M. Schlarb | 1,110,072 | — | 518,803 | |||||||
James Black(7) | 1,373,084 | — | — | |||||||
| (1) | Our current employment agreements with our named executive officers do not provide for any payments in connection with a change in control. Each officer would only have received the amount set |
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| forth in this column in connection with a change in control on December 31, |
| (2) | In the event of a termination for any reason of any named executive officer on December 31, |
| (3) | All amounts are calculated using each named executive officer’s annual base salary on December 31, |
| (4) | Although no named executive officer is eligible to receive a payment in connection with a termination for cause or a resignation pursuant to the officer’s employment agreement, each officer is entitled to receive all accrued and unpaid amounts under the officer’s employment agreement through the date of termination. |
| (5) | The benefits |
| (6) | Includes 12,784 unvested shares of restricted stock which were not performance based and were valued at $10.95 which was the closing price of our common stock on December 30, 2022. |
| (7) | Includes 21,250 unvested shares of restricted stock which were not performance based and were valued at $10.95 which was the closing price of our common stock on December 30, 2022. |
PAY RATIO
Under rules adopted pursuant to the Dodd-Frank Act of 2010, we are required to calculate and disclose the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our CEO. The paragraphs that follow describe our methodology and the resulting CEO pay ratio.
We identified the median employee using our employee population on December 31, 2019.2022. At December 31, 2019,2022, we had approximately 22,00016,000 employees located in the United States, Australia and South Africa and the United Kingdom.Africa. Approximately 88% of our total employees are located in the United States. Our diverse employee population varies significantly in experience, education and specialized training. Regardless of the employee’s role in the organization or their location, the process for determining salaries is the same. Local market competitive data is reviewed to set base pay rates. Individual salaries are then adjusted from these base pay rates to reflect the individual’s role and responsibilities as well as his or her experience, education and specialized training.
Pursuant to thede minimis exception, in identifying the median employee, we excluded 509497 employees in South Africa and 94 employees in the United Kingdom which together representrepresents approximately 3% of our workforce. We used the relevant average currency exchange rate to convert the compensation of our Australian employees to U.S. dollars. We did not make cost of living adjustments.
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To identify the median employee from our employee population, we compared the amount of base salary, as reflected in our payroll records for 2019,2022, excluding our CEO. We identified our median employee using this compensation measure, which was consistently applied to all of our employees included in the calculation. We do not grant equity to a large percentage of our employee population, so using base salary, is considered to be representative. As a result, the total annual compensation for the year ended December 31, 20192022 was $37,981$47,840 for our median employee and $6,046,112$4,531,272 for our CEO as reflected in the “Total” column of the Summary Compensation Table. The ratio of our CEO’s pay to that of our median employee for 20192022 was approximately 15995 times.
Because the SEC rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employee’s annual total compensation allows companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio for our Company, as other companies have headquarters and offices in different states and countries, have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
This information is being provided for compliance purposes. Neither the Compensation Committee nor management used the pay ratio measure in making compensation decisions.
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Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||||||||||||||||||||
Year | Summary Compensation Table Total for Mr. Gordo (1) | Summary Compensation Table Total for Dr. Zoley (1) | Compensation Actually Paid to Mr. Gordo (2) | Compensation Actually Paid to Dr. Zoley (2) | Average Summary Compensation Total for Non-PEO Named Executive Officers (“NEO’s) (3) | Average Compensation Actually Paid to Non-PEO NEO’s(4) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (6) | Net Income Attributable to GEO (7) | Adjusted Net Income (8) | ||||||||||||||||||||||||||||
(a) | (a) | (b) | (b) | (c) | (d) | (in thousands) | ||||||||||||||||||||||||||||||||
| 2022 | $4,531,272 | $ | — | $ | 7,028,722 | $ | — | $ | 3,206,216 | $ | 5,585,203 | $ | 56 | $ | 99 | $ | 171,813 | $ | 171,196 | |||||||||||||||||||
| 2021 | 1,601,207 | 11,270,248 | 1,652,434 | 10,844,304 | 1,826,765 | 1,906,352 | 41 | 137 | 77,418 | 159,203 | ||||||||||||||||||||||||||||
| 2020 | — | 2,041,894 | — | (250,121 | ) | 1,596,221 | 889,175 | 63 | 103 | 113,032 | 155,581 | |||||||||||||||||||||||||||
| (1) | The dollar amounts reflected in the columns labeled “(a)” are the amounts of total compensation reported for Mr. Gordo and Dr. Zoley for each corresponding year in the “Total” column of the applicable “Summary Compensation Table.” |
| (2) | The dollar amounts reported in the columns labeled “(b)” represent the amount of “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K and referred to as “CAP”) to Mr. Gordo and Dr. Zoley. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gordo or Dr. Zoley during the applicable year. In accordance with the requirements of Item 402(v) ofRegulation S-K, the following adjustments were made to Mr. Gordo’s and Dr. Zoley’s total compensation for each year to determine their respective CAP: |
Summary of Equity Adjustments - PEO | ||||||||||||||||||||||||||
Year | Prinicpal Executive Officer | Year End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year over Year Change in Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of the Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Total Equity Award Adjustments | |||||||||||||||||||
| 2022 | Jose Gordo | $ | 3,720,000 | $ | 346,909 | $ | — | $ | (9,458 | ) | $ | — | $ | 4,057,451 | ||||||||||||
| 2021 | Jose Gordo | 449,368 | (4,912 | ) | — | (1,977 | ) | — | 442,479 | |||||||||||||||||
| 2021 | George C. Zoley | 1,869,156 | (166,125 | ) | — | (150,975 | ) | — | 1,552,056 | |||||||||||||||||
| 2020 | George C. Zoley | 1,186,500 | (1,048,965 | ) | — | 22,950 | — | 160,485 | ||||||||||||||||||
| (3) | The dollar amounts reported in column (c) represent the average of the amounts reported for the Company’s named executive officers (“NEOs”) as a group (excluding any person who served as our principal executive officer, or “PEO”) in the “Total” column of the applicable “Summary Compensation Table.” The names of each of the non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, George C. Zoley, Brian R. |
| Evans, Ann M. Schlarb and James Black; (ii) for 2021, Brian R. Evans, Ann M. Schlarb, David Venturella and Joe Negron; and (iii) for 2020, Brian R. Evans, J. David Donahue, Ann M. Schlarb, Blake Davis, and David Venturella. |
| (4) | The dollar amounts reported in column (d) represent the average CAP for the non-PEO NEOs as a group, as computed in accordance with Item 402(v) of RegulationS-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to thenon-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to the average total compensation for thenon-PEO NEOs as a group for each year to determine the average CAP for such group: |
Summary Compensation Table Total to Compensation Actually Paid Reconciliation for Non-PEO NEO’s | ||||||||||||||||||||||||||
Year | Reported Summary Compensation Table for Non-PEO NEO’s | Reported Value of Equity Awards | Equity Award Adjustments | Defined Benefit Plan Service Cost Additions | Defined Benefit Plan Actuarial Value Deductions | Compensation Actually Paid to Non-PEO NEO’s | ||||||||||||||||||||
| 2022 | $ | 3,206,216 | $ | (757,001 | ) | $ | 3,070,663 | $ | 65,325 | $ | — | $ | 5,585,203 | |||||||||||||
| 2021 | 1,826,765 | (656,695 | ) | 705,982 | 112,964 | (82,664 | ) | 1,906,352 | ||||||||||||||||||
| 2020 | 1,596,221 | (534,420 | ) | (54,034 | ) | 91,840 | (210,432 | ) | 889,175 | |||||||||||||||||
Summary of Equity Adjustments - Non-PEO NEO’s | ||||||||||||||||||||||||||||
Year | Year End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year over Year Change in Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of the Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Total Equity Award Adjustments | ||||||||||||||||||||||
| 2022 | $ | 1,684,263 | $ | 1,507,130 | $ | — | $ | (120,730 | ) | $ | — | $ | 3,070,663 | |||||||||||||||
| 2021 | 768,741 | (36,338 | ) | — | (26,421 | ) | — | 705,982 | ||||||||||||||||||||
| 2020 | 197,430 | (252,868 | ) | — | 1,404 | — | (54,034 | ) | ||||||||||||||||||||
| (5) | Cumulative Total Shareholder Return (“TSR”) is calculated in accordance with the requirements of Item 402(v) of Regulation S-K. |
| (6) | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. Our peer group consisted of similarly sized equity REIT’s. In 2022, due to the transition from REIT status in late 2021, the Compensation Committee continued to review compensation data from the REIT peer group while also referencing market data from a broad survey of general industry companies with revenues between $1 and $3 billion. |
| (7) | The dollar amounts reported represent the amount of net income attributable to The GEO Group, Inc. reflected in the Company’s audited consolidated financial statements for the applicable year. |
| (8) | Adjusted Net Income is calculated as net income/(loss) attributable to GEO adjusted for, if applicable in a given year, gain/loss on asset divestitures, pre-tax, gain/loss on extinguishment of debt, goodwill impairment charge,pre-tax, legal related expenses,pre-tax, pre-tax, start-up expenses,pre-tax, close-out expenses,pre-tax, COVID-19 expenses,pre-tax, transaction related expenses,pre-tax, one-time employee restructuring expenses,pre-tax, close-out expenses,pre-tax, change in tax structure to C Corp, and the tax effect of adjustments to net income attributable to The GEO Group, Inc. Please refer to our current reports on Form 8-K filed on February 21, 2023 and February 24, 2022 for additional information and a reconciliation of Adjusted Net Income to our results as reported under GAAP. |
DIRECTOR COMPENSATION
Process and Philosophy
The Compensation Committee sets the compensation of ournon-employee directors on an annual basis. The Compensation Committee’s philosophy with respect to the Company’s director compensation program is to provide a compensation structure and amount that will attract and retain highly competent, skilled and engaged individuals for Board service. We compete with many companies to attract and retain experienced and highly capable individuals to serve as our directors, some of which are private and many of which are much larger than we are. In determining the appropriate components and level of compensation for our directors, the Compensation Committee considers the time commitment, unique skillsets, industry pay levels and the size of the Company’s Board relative to the size of other boards in the industry. Additionally, the Compensation Committee believes that it is consistent with its philosophy to use a mix of cash and equity compensation to align director compensation with long term shareholder value, while at the same time providing directors with an appropriate level of compensation for their service.
20192022 Compensation
In 2019, thenon-employee directors received the following compensation for serving on our Board of Directors and committees of our Board of Directors:
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The Company is efficiently governed by a group of directors with deep knowledge of the industry and significant experience working in partnership with federal, state and local governments to meet their needs. In 2019, the Company had sixnon-employee directors on the Board for the full fiscal year and added a seventhnon-employee director to the Board in October of 2019. Based on a study provided by our independent compensation consultant, this is below the median number of 9non-employee directors for companies within our peer group. As a result, many of our directors are asked to be a member of and chair multiple committees of our Board of Directors resulting in a greater time commitment and span of Board responsibilities than the typical director in our industry. Specifically, for 2019, director committee assignments fornon-employee directors were as follows, with C indicating the Chairperson of such committee, X indicating that a director is a member of such committee and LD indicating the Lead Independent Director:
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DIRECTORS’ COMPENSATION
The following table shows the compensation earned by each director who was not an officer during fiscal year 2019.
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards (2)(4) | Option Awards (3)(4) | All Other Compensation ($) | Total ($) | |||||||||||||||
Anne N. Foreman | 167,000 | 90,720 | — | — | 257,720 | |||||||||||||||
Richard H. Glanton | 283,000 | 90,720 | — | — | 373,720 | |||||||||||||||
Jose Gordo(5) | 26,750 | — | — | — | 26,750 | |||||||||||||||
Scott M. Kernan | 158,000 | 90,720 | — | — | 248,720 | |||||||||||||||
Guido Van Hauwermeiren | 165,000 | 90,720 | — | — | 255,720 | |||||||||||||||
Christopher C. Wheeler | 179,000 | 90,720 | — | — | 269,720 | |||||||||||||||
Julie Myers Wood | 156,000 | 90,720 | — | — | 246,720 | |||||||||||||||
Norman A. Carlson(6) | 50,000 | — | — | — | 50,000 | |||||||||||||||
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| Name | Stock Awards | Option Awards | ||||||
Anne N. Foreman | 11,874 | — | ||||||
Richard H. Glanton | 11,874 | — | ||||||
Jose Gordo | — | — | ||||||
Scott M. Kernan | 7,375 | — | ||||||
Guido Van Hauwermeiren | 7,375 | — | ||||||
Christopher C. Wheeler | 11,874 | 1,734 | ||||||
Julie Myers Wood | 11,874 | — | ||||||
Norman A. Carlson | — | — | ||||||
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In October of 2019, the Compensation Committee reviewed the independent compensation consultant’s analysis and findings of Pay Governance, the independent compensation consultant to the Compensation Committee, detailing compensation trends and practices for Board of Director pay among our compensation peer group. The study found that the Company’s number of directors and aggregate Board pay were below the median of the peer group. On a per director basis, the study found that the Company’s pay levels were generally above the median of the peers largely due to the higher frequency of Board and Board committee meetings attended by the Company’s directors and a greater number of Board committees than the Company’s peers.
2020In November of 2021, the Compensation Committee reviewed the independent compensation consultant’s latest analysis and findings. The study found that the Company’s retainer structure was in line with peer group practices. The study also found that the Company’s total director pay, on a per director basis, was generally below the median of the peer group. Although the Company’s cash pay was near the highest in the peer group, the total direct compensation was below the median and total equity pay was near the lowest in the peer group.
Following this review and further consultation with the independent compensation consultant, the Compensation Committee adoptedmaintained the following pay program for 2020:2022:
| Pay Element | Fiscal Year | |
Board Cash Retainer | $85,000 | |
Board Meeting Fees | No Meeting Fees | |
Board Equity Retainer | $100,000 in restricted stock | |
Committee Chair Retainer | Audit: $25,000 All Others: $15,000 | |
Committee Member Retainer | Audit: $15,000 All Others: $7,500 | |
Committee Meeting Fees | No Meeting Fees | |
Lead Director Retainer | $30,000 | |
Annual Per Diem | No for specific business-related expenses. |
Additionally, effective
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Effective for fiscal year 2020 and going forward, we adopted the following maximum compensation levels for directors:
Lead Director: $300,000
All Other Directors: $270,000
We believe these maximums are appropriate to ensure that individual pay levels continue to align with market practices among REITpeer company industry directors. The Compensation Committee will reviewreviews non-employee director pay on an annual basis and adjust payadjusts compensation levels accordingly, including the individual maximums, as appropriate and consistent with the Compensation Committee’s philosophy fornon-employee director compensation. As part of the Compensation Committee’s annual review, the Compensation Committee requests that its independent compensation consultant compare director compensation levels, policies, practices and procedures to a set of peer companies selected by the Compensation Committee (which is the same peer group it uses to evaluate executive officer compensation) and provide the Compensation Committee with its annual report as well as an annual report on best practices concerning director compensation.
Additionally, we maintain a share ownership requirement for ournon-employee directors requiring them to hold three times their annual cash retainers in Company equity within five years of their appointment to the Board.
The Company is efficiently governed by a group of directors with deep knowledge of the industry and significant experience working in partnership with federal, state and local governments to meet their needs. On December 27, 2022, the Board, having received the recommendation of the Nominating and Corporate Governance Committee, approved the expansion of the size of the Board from nine to ten members until the end of Ms. Anne Foreman’s term as a director. Ms. Foreman will not be seeking reelection to the Board at the end of her current term at the 2023 Annual Meeting of Shareholders. Upon the expiration of Ms. Foreman’s current term, the number of directors will decrease from ten to nine. Also effective December 27, 2022, the Board appointed Ms. Lindsay Koren to serve as a director on the Board of GEO for a term expiring at the 2023 Annual Meeting, at which time her continued service on the Board is subject to shareholder approval. Many of our directors are asked to be a member of and chair multiple committees of our Board of Directors resulting in a greater time commitment and span of Board responsibilities than the typical director in our peer companies.
Specifically, for 2023, director committee assignments for non-employee directors after December 2022 were as follows, with C indicating the Chairperson of such committee, X indicating that a director is a member of such committee and LD indicating the Lead Independent Director:
| Director | Audit and Finance Committee | Compensation Committee | Nominating and Corporate Governance Committee | Executive Committee | Corporate Planning Committee (2) | Criminal Justice and Rehabilitation Committee | Cyber Security and Environmental Oversight Committee (3) | Human Rights Committee | Independent Committee | Legal Steering Committee (4) | Operations and Oversight Committee (5) | |||||||||||
Thomas C. Bartzokis | X | X | X | X | ||||||||||||||||||
Jack Brewer | X | C | X | X | X | |||||||||||||||||
Anne N. Foreman | X | X | X | X | X | |||||||||||||||||
Scott M. Kernan | X | X | X | C | ||||||||||||||||||
Lindsay L. Koren | X | X | C | X | X | |||||||||||||||||
Terry Mayotte (LD) | C | C | C | X | X | C |
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| Director | Audit and Finance Committee | Compensation Committee | Nominating and Corporate Governance Committee | Executive Committee | Corporate Planning Committee (2) | Criminal Justice and Rehabilitation Committee | Cyber Security and Environmental Oversight Committee (3) | Human Rights Committee | Independent Committee | Legal Steering Committee (4) | Operations and Oversight Committee (5) | |||||||||||
Andrew Shapiro | X | X | X | C | X | X | ||||||||||||||||
Julie Myers Wood | X | X | C | X | X | X |
| (1) | Dr. Zoley and Mr. Gordo also serve on the Executive Committee. Dr. Zoley is the Chairman of the Executive Committee. Dr. Zoley and Mr. Gordo do not receive any separate or additional compensation for their service as a director or their service on the Executive Committee. |
| (2) | Mr. Gordo also serves on the Corporate Planning Committee. Mr. Gordo does not receive any separate or additional compensation for his service as a director or his service on the Corporate Planning Committee. |
| (3) | Mr. Gordo also serves on the Cyber Security and Environmental Oversight Committee. Mr. Gordo does not receive any separate or additional compensation for his service as a director or his service on the Cyber Security and Environmental Oversight Committee. |
| (4) | Mr. Gordo also serves as the Chairman of the Legal Steering Committee. Mr. Gordo does not receive any separate or additional compensation for his service as a director or his service on the Legal Steering Committee. |
| (5) | Mr. Gordo also serves on the Operations and Oversight Committee. Mr. Gordo does not receive any separate or additional compensation for his service as a director or his service on the Operations and Oversight Committee. |
DIRECTORS’ COMPENSATION
The following table shows the compensation earned by each director who was not an officer during fiscal year 2022.
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(4) | Option Awards ($)(3)(4) | All Other Compensation ($) | Total ($) | |||||||||||
Thomas C. Bartzokis | 106,474 | 100,005 | 206,479 | |||||||||||||
Jack Brewer | 122,500 | 100,005 | — | — | 222,505 | |||||||||||
Anne N. Foreman | 122,500 | 100,005 | — | — | 222,505 | |||||||||||
Richard H. Glanton | 136,250 | 100,005 | — | — | 236,255 | |||||||||||
Scott M. Kernan | 115,000 | 100,005 | — | — | 215,005 | |||||||||||
Lindsay L. Koren (5) | — | — | — | — | — | |||||||||||
Terry Mayotte (6) | 166,875 | 100,005 | — | — | 266,880 | |||||||||||
Andrew Shapiro | 127,099 | 100,005 | — | — | 227,104 | |||||||||||
Christopher C. Wheeler | 57,500 | 100,005 | — | — | 157,505 | |||||||||||
Julie Myers Wood | 130,000 | 100,005 | — | — | 230,005 | |||||||||||
| (1) | These amounts consist of: (i) an annual retainer fee which was paid at a rate of $85,000 per year; (ii) a payment of $25,000 to the chairperson of the Audit and Finance Committee; (iii) a payment of $15,000 to each member of the Audit and Finance Committee; (iv) a payment of $15,000 for other Board committee chairs; and (v) a payment of $7,500 for other Board committee members. The lead independent director received an additional annual retainer of $30,000. |
| (2) | This column reflects the aggregate grant date fair value with respect to stock awards during 2022 for each director who was not a named executive officer. The grant date fair value of the restricted stock |
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| award granted on March 1, 2022 as calculated in accordance with FASB 718 was $5.76 per share, which was the closing price of our common stock on the last business day immediately preceding the grant date. |
| (3) | There were no stock options awarded to directors during 2022. |
| (4) | The table below sets forth the aggregate number of shares of common stock subject to stock awards and option awards held by each director who is not a named executive officer outstanding as of the end of 2022. |
| Name | Stock Awards | Option Awards | ||||||
Thomas C. Bartzokis | 17,362 | |||||||
Jack Brewer | 17,362 | — | ||||||
Anne N. Foreman | 31,146 | — | ||||||
Scott M. Kernan | 31,146 | — | ||||||
Lindsay L. Koren (5) | — | — | ||||||
Terry Mayotte | 17,362 | — | ||||||
Andrew Shapiro | 17,362 | — | ||||||
Julie Myers Wood | 31,146 | — | ||||||
| (5) | Ms. Koren was appointed to the board of directors on December 27, 2022. |
| (6) | Pursuant to Company policy, the maximum compensation level for lead directors is $300,000. For 2022, Mr. Mayotte received $166,875 in fees for his service as a Board member, the lead independent director and his service as Chairman of the Audit and Finance Committee, Compensation Committee and Nominating and Corporate Governance Committee and he received a stock award valued at $100,005. |
2023 Compensation
In February of 2023, the Compensation Committee reviewed the independent compensation consultant’s analysis and findings detailing compensation trends and practices for compensation of directors among our peer group. The study found that the Company’s Board compensation structure was in line with majority peer practices and the Company provides a greater portion of Board compensation in cash versus equity compared to the peer group. Following this review, the Compensation Committee determined it was in the Company’s best interests to approve and the Board approved an increase to the target value of the annual equity compensation award for non-employee members of the Board from $100,000 to approximately $135,000.
COMPENSATION COMMITTEE REPORT
In accordance with the powers and duties of the Compensation Committee as set forth in its charter, the committee hereby reports the following:
| 1. | The Compensation Committee has reviewed and discussed with management the Compensation Discussion |
| 2. | Based on the review and discussion referred to in the preceding paragraph, the Compensation Committee recommended to the board of directors that the Compensation Discussion |
By the Compensation Committee:
Richard H. GlantonTerry Mayotte (Chairman)
Anne N. Foreman
Christopher C. WheelerAndrew Shapiro
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AUDIT AND FINANCE COMMITTEE REPORT
In accordance with the powers and duties of the Audit and Finance Committee as set forth in its charter, the committee hereby reports the following:
| 1. | The Audit and Finance Committee has reviewed and discussed the audited financial statements for the fiscal year with management; |
| 2. | The Audit and Finance Committee has discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the Commission; |
| 3. | The Audit and Finance Committee has received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the |
| 4. | Based on the review and discussions referred to in paragraphs 1. |
| 5. | The Audit and Finance Committee has reviewed all fees, both audit related andnon-audit related, of the independent accountant and considers the provision ofnon-audit services to be compatible with the maintenance of the independent accountant’s independence; and |
| 6. | All members of the Audit and Finance Committee are independent as independence is defined in Sections 303 of the NYSE’s current listing standards. |
By the Audit and Finance Committee:
Richard H. GlantonTerry Mayotte (Chairman)
Guido Van HauwermeirenScott Kernan
Christopher C. WheelerAndrew Shapiro
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In 2019,2022, David Meehan, Divisional Vice President of Business Development for GEO Care, received compensation of $595,180.$576,173. Mr. Meehan is theson-in-law of George Zoley, our Executive Chairman CEO and Founder. In 2019, Larry Zoley, Director of Network Services & Integration, received compensation of $166,669. Mr. Zoley is the brother of George Zoley, our Chairman, CEO and Founder. Also in 2019,2022, Chris Zoley, Director of Business Development, received compensation of $166,081.$164,851. Mr. Zoley is the son of George Zoley, our Executive Chairman CEO and Founder. Guidepost, Ms. Wood’s current employer, has a consulting agreement with B.I. Incorporated, one of the Company’s subsidiaries. Ms. Wood is a member of the Board of Directors of GEO. For the year ended December 31, 2019,2022, $180,000was paid in the aggregate pursuant to the consulting agreement which is less than 2% of Guidepost’s annual gross revenues. The consulting agreement was extended through December 31, 2020.2023. The current monthly retainer payment is $15,000 per month. In 2022, Rachel Ann Kienzler, Director of Partnership Development for GEO Care, received compensation of $165,112. Ms. Kienzler is the spouse of James Black, our Senior Vice President and President, Secure Services. In 2022, Shawn Henry, an employee of GEO’s information technology department, received compensation of $182,889. Mr. Kernan’s wife, Kathryn Prizmich Kernan, works forHenry is the son-in-law of Wayne Calabrese, our Senior Vice President, Chief Operating Officer. In 2022, GrindStone Strategic Consulting, LLC received $137,531 in connection with consulting services it provided to the Company. Mr. Albence, our Senior Vice President, Client Relations, serves as Principal at GrindStone Strategic Consulting, LLC. GrindStone Strategic Consulting, LLC provided these consulting services prior to Mr. Albence joining the Company as a Vice President of Business Development and has been employed bynot provided any consulting services since Mr. Albence joined the Company for eight (8) years. Ms. Kernan is not an executive officer of the Company. Ms. Kernan’s compensation in fiscal 2019 totaled $314,407 and she is eligible to receive benefits that are provided to all of the Company’s employees generally. Except for these
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relationships, there were no material relationships or related party transactions during fiscal year 20192022 requiring disclosure pursuant to Item 404 ofRegulation S-K. Under its charter, our Audit and Finance Committee has the authority to review and approve certain transactions involving more than $100,000
between GEO and any director, officer or employee of GEO. Our Audit and Finance Committee has reviewed and approved the related party transactions described above. The Compensation Committee did not determine, review or approve any of the compensation paid pursuant to the above related party transactions as they were not paid to executive officers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2019, Richard H. Glanton, Anne N. Foreman and Christopher C. Wheeler served on our Compensation Committee. None of the members of the Compensation Committee served as an officer or employee of GEO or any of GEO’s subsidiaries during fiscal year 2019 or any prior year. There were no material transactions between GEO and any of the members of the Compensation Committee during fiscal year 2019. None of our executive officers has served on the Compensation Committee or the board of directors of any company, one of whose executive officers served on our board or our Compensation Committee.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires that GEO’s directors, executive officers and persons who beneficially own 10% or more of GEO’s common stock file with the SEC initial reports of ownership and reports of changes in ownership of our stock and our other equity securities. To GEO’s knowledge, based solely on a review of the copies of such reports furnished to GEO and written representations that no other reports were required, during the year ended December 31, 2019,2022, all such filing requirements applicable to GEO’s directors, executive officers and greater than 10% beneficial owners were complied with except for Mr. Negron,March, who inadvertently filed one late report reporting one transaction and Messrs. Bartzokis and Calabrese who each filed one late report regarding histheir initial statement of beneficial ownership.ownership due to a delay in obtaining their SEC filing codes.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit and Finance Committee of our board of directors has appointed Grant Thornton LLP as our independent registered public accountants for the 20202023 fiscal year. The Audit and Finance Committee is responsible for the appointment, oversight and termination of our independent registered public accountants. We are seeking the ratification of our shareholders of this appointment, although our Audit and Finance Committee is not bound by any shareholder action on this matter.
If the appointment of Grant Thornton LLP as our independent registered public accountants is not ratified by our shareholders, the Audit and Finance Committee will reconsider its appointment, but may nevertheless retain Grant Thornton LLP. Also, even if the appointment of Grant Thornton LLP as our independent registered public accountants is ratified by our shareholders, the Audit and Finance Committee may direct the appointment of a different independent auditor at any time during the year if the Audit and Finance Committee determines, in its discretion, that such a change would be in our best interests. Grant Thornton LLP has advised GEO that no partner or employee of Grant Thornton LLP has any direct financial interest or any material indirect interest in GEO other than receiving payment for its services as independent certified public accountants.
Recommendation of the Board of Directors
The board of directors unanimously recommends a vote “FOR”“FOR” the ratification of Grant Thornton LLP as our independent registered public accountants for the 20202023 fiscal year.
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our shareholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.
As described above in detail under the heading “Compensation Discussion and& Analysis,” we seek to closely align the interests of our named executive officers with the interests of our shareholders. Our compensation programs are designed to attract, retain and motivate our named executive officers to increase shareholder value on both an
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annual and a longer term basis primarily by generating increasing levels of revenue, net income, net operating income, adjusted funds from operations, total shareholder return and return on capital employed, while at the same time avoiding the encouragement of unnecessary or excessive risk taking. Our Compensation Committee continues to closely link executive compensation with the achievement of performance goals.
The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the overall compensation of our named executive officers and the executive compensation philosophy, policies and practices, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission. The vote is advisory, which means that the vote is not binding on the Company, our board of directors or the Compensation Committee. Althoughnon-binding, our board of directors and Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
Accordingly, we ask our shareholders to vote on the following resolution at the annual meeting:
“RESOLVED, that the compensation paid to the company’sCompany’s named executive officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and& Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Recommendation of the Board of Directors
The boardBoard of directorsDirectors unanimously recommends a vote “FOR”“FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement.
ADVISORY VOTE ON THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
The Dodd-Frank Act also states that company shareholders may cast an advisory vote on how frequently they would like an advisory vote on the compensation of our named executive officers to be held. This non-binding, advisory vote provides shareholders the opportunity to indicate whether they prefer an advisory vote on named executive officer compensation once every one, two, or three years (or to abstain from voting). We are required under the Dodd-Frank Act to solicit shareholder preferences regarding the frequency of future advisory votes on executive compensation at least once every six years.
At the 2017 annual meeting of shareholders, the Board of Directors recommended holding the non-binding advisory vote on executive compensation (“say-on-pay”) every year. The company shareholders voted in favor of holding the “say-on-pay” vote every year. The Board accepted our shareholders’ recommendation and currently, shareholders are provided with the opportunity to cast an advisory (non-binding) vote to approve the compensation of our named executive officers every year.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote for “one year” for the frequency of holding future advisor votes on executive compensation.
PROPOSAL 5:
SHAREHOLDER PROPOSAL REGARDING ANNUAL LOBBYINGA THIRD-PARTY RACIAL EQUITY AUDIT AND REPORT, IF PROPERLY PRESENTED BEFORE THE MEETING
Service Employees International Union Pension Plans Master Trust (the “Proponent”“Fund”), located at 1800 Massachusetts Ave NW, Suite 301, Washington DC 20036-1202, is has advised us that it intends to submit the beneficial owner of 4,058 shares of GEO common stock and submitted the shareholder proposal set forth below.below for consideration at our Annual Meeting. The address and stockholdings of the Fund will be provided by us upon request. The Fund is also referred to herein as the Proponent. We are not responsible for the content of the shareholder proposal and the Proponent’s supporting statement, which are set forth below as it was submitted to us.
Whereas, we believe in full disclosureRESOLVED that shareholders of The GEO Group’sGroup Inc. (“GEO”) urge the Board of Directors to oversee an independent third-party racial equity audit analyzing GEO’s adverse impacts on nonwhite stakeholders and
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communities of color and GEO’s plans to mitigate any such impacts. Input from civil rights organizations, criminal justice experts, and employees should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential and proprietary information, should be publicly disclosed on GEO’s website.
SUPPORTING STATEMENT
High-profile police killings of black people have galvanized the movement for racial justice. That movement, and the disproportionate impacts of the pandemic, have focused public attention on systemic racism, environmental racism, racialized violence and racial inequities.
Several aspects of GEO’s business and operations suggest that a racial equity audit would be useful. People of color are disproportionately represented in private low and medium security facilities at least in part because contracts tend to exclude elderly and ill inmates who are more likely to be white.1
Immigration enforcement, which has been called “racial discrimination by proxy,”2 has played an increasingly important role in GEO’s business model, with the proportion of revenues derived from contracts with Immigration and Customs Enforcement reaching 33% in 2021.3 In April 2022, immigrant rights groups filed a complaint with the Department of Homeland Security alleging that guards at a GEO immigration detention facility made racially derogatory remarks and used excessive force against two black detainees.4
A racial equity audit could also examine whether GEO’s political activities have a negative racial impact. According to Open Secrets, in the 2022 election cycle GEO’s political action committee contributed to Members of Congress who objected to certifying the 2020 election results,5 an action some viewed as “a direct attack on the voting rights of people of color.”6 Although disclosure requirements do not permit identification of the lobbying positions GEO has taken, data show that the company has lobbied at the federal level7and indirect lobbying activitiespaid lobbyists in 20 states in 2021.8
In 2019, the GEO Group Foundation gave money to over 30 law enforcement-related organizations, including Alhambra Police Foundation and expendituresthe Houston Metro Fraternal Order of Police (“FOP”) Lodge 98, a police union. Police foundations bypass normal procurement processes to buy equipment for police departments, including surveillance technology that has been used to target communities of color and nonviolent protestors. Police unions, including the FOP, have opposed reforms aimed at curbing mistreatment of people of color.9
| 1 | journal.radicalcriminology.org/index.php/rc/article/view/44/html |
| 2 | scholarship.law.uci.edu/cgi/viewcontent.cgi?article=1044&context=ucilr, n.5. |
| 3 | www.sec.gov/ix?doc=/Archives/edgar/data/923796/000156459022007652/geo-10k_20211231.htm, at 33. |
| 4 | coloradosun.com/2022/04/14/aurora-detention-center/ |
| 5 | Seewww.opensecrets.org/orgs/geo-group/recipients?id=D000022003 (listing contributions); www.vox.com/2021/1/6/22218058/republicans-objections-election-results (listing election objectors). |
| 6 | See www.nytimes.com/2021/01/15/us/politics/lankford-apology-election-biden.html; www.marketwatch.com/story/business-leaders-call-for-action-on-trump-after-mob-siege-at-capitol-11609976655 |
| 7 | www.opensecrets.org/news/2018/06/zero-tolerance-immigration-is-big-money-for-contractors-nonprofits/ |
| 8 | www.followthemoney.org/entity-details?eid=1096 |
| 9 | E.g.,www.npr.org/2020/06/08/872470076/the-fraternal-order-of-police-a-union-that-stands-in-the-way-of-police- reforms; www.injusticewatch.org/news/2021/analysis-heres-how-chicagos-most-powerful-police-union-maintains-tradition-of-problematic-leadership/ |
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Finally, an independent audit would provide objectivity, assurance and specialized expertise beyond what would be possible with an internal analysis. We urge GEO to assess its behavior through a racial equity lens to identify how it contributes to systemic racism, and how it could begin to help dismantle it.
COMPANY RESPONSE TO SHAREHOLDER PROPOSAL
We have a long-standing commitment to advancing racial equality and diversity, equity and inclusion (“DE&I”) among our stakeholders, including employees, inmates, detainees, residents and the communities where we operate. Our Board of Directors has carefully considered the shareholder proposal and, while we share the Proponent’s goal to advance racial equity, we do not believe the Proponent’s proposal is the best way to accomplish this shared goal and our Board recommends a vote “AGAINST” this proposal.
We strongly believe that the external audit called for in this proposal is overly prescriptive in its scope and would not be meaningfully additive to our existing extensive processes, commitments, actions, investments and transparent disclosures in DE&I and racial equity. Additionally, we believe that the lack of details and any real consensus as to what specifically the audit would seek to review, evaluate or accomplish for this purpose could significantly distract us from executing toward our core DE&I and racial equity actions, investments and disclosures. As a result, we believe our shareholders would be better served with our resources being used to further deepen our extensive DE&I and racial equity efforts outlined in more detail below, rather than diverting management attention and significant resources to an external audit.
Commitment to Our Workforce and Management, Contractors and Vendors
Anti-Discrimination
In each of our operations throughout the U.S., we comply with all federal, state, and local labor and employment laws and regulations. We have zero tolerance anti-discrimination policies that are covered as part of the training conducted for all our U.S. employees and include detailed instructions for multiple ways for employees to report incidents.
Our Code of Business Conduct and Ethics expressly provides that “[e]mployment decisions must be based only on an employee’s or applicant’s qualifications, demonstrated skills and achievements without regard to race, color, sex, national origin, religion, age, disability, veteran status, citizenship, sexual orientation, gender identity or marital status.”
Diversity
We are an equal opportunity employer focused on the rich diversity of our workforce. Across our organization, under-represented minorities of the United States — including African American, Hispanic and Latino, Asian, Pacific Islander, Native Hawaiian and Native American/Alaskan — accounted for 68% of our U.S. employees in 2022. In 2022, minorities comprise 43% of our corporate workforce in the U.S., 73% of our facility security staff, and 32% of those serving in management positions as directors or above. Of the nine members of our Board of Directors up for re-election at this Annual Meeting, two are members of minority communities.
As of 2022, women account for 56% of our corporate employees, 42% of our facility security staff, and 32% of those serving in management positions as directors and above. We also continue to recruit women to our workforce, with women comprising 56% of our new hires in 2022. Women are also involved at the highest levels of our organization. Of the nine members of our Board of Directors up for re-election at this Annual Meeting, two are women.
Our employee population is also diverse by age. Of new hires in 2022, 41% were under age 30, 42% were between ages 30 and 50, and 17% were ages 50 and older.
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Our efforts to promote a diverse and inclusive environment have been recognized and we have been honored to receive various awards and distinctions. We have been recognized by Latino Leaders Magazine as one of the Best Companies for Latinos to Work for. We have also repeatedly been named by U.S. Veterans Magazine among its “Top Veteran Friendly Companies” and we were recognized in the Fall 2022 issue as one of the “Best of the Best 2022” Top Veteran Friendly Companies.
We are also committed to working with minority owned, small disadvantaged and veteran owned businesses as vendors and suppliers of services and goods. In 2022, we paid $51.4 million to women owned businesses, $23.9 million to small disadvantaged businesses, $11.1 million to veteran owned businesses and $6.2 million to service disabled veteran owned businesses for services and goods provided to GEO.
Investment in our Workforce
Our employees and their family members (parent, spouse, and child) are eligible to further pursue their educational goals by receiving reduced tuition rates on a variety of accredited online degree programs in business, education, healthcare, and other disciplines provided at 11 different higher education institutions. A tuition reimbursement program is also available for our employees pursuing their education as they work to develop their skills and enhance their job performance. Tuition reimbursement is provided to eligible employees for courses offered by accredited colleges, universities, and secretarial and trade schools. In 2022, we provided approximately $138,000 in tuition reimbursement to more than 128 employees.
Participation and Partnership with Labor Unions
We welcome the participation of labor unions in our facilities and respect the rights of individual employees to choose whether GEO’s lobbyingor not to join labor organizations. In the U.S., employees in 41 of our facilities are represented by unions including: International Association of Machinist & Aerospace Workers (IAMAW); The International Union, Security, Police and Fire Professionals of America (SPFPA); National Federation of Federal Employees (NFFE); International Brotherhood of Teamsters (IBT); National Union of Hospital and Health Care Employees, American Federation of State, County and Municipal Employees (NUHHCE/ AFSCME) (1199J); American Federation of State, County and Municipal Employees (AFSCME in Illinois); Communications Workers of America (CWA); and United Government Security Officers of America (UGSOA). We also welcome partnerships between labor unions that our employees are members of and organizations dedicated to improvements in criminal justice. For example, the NFFE and the National Association of Blacks in Criminal Justice (NABCJ) have been working together at the Western Regional Detention Facility in San Diego, a facility managed by GEO under the oversight of the United States Marshall’s Service, to support the employees of the facility in the work they perform with honor and purpose and support the inmates of the facility in furtherance of the care and treatment they receive.
Commitment to Inmates, Detainees and Residents in Our Care
Human Rights Oversight
Over the last 10 years, we have engaged with shareholders and other stakeholders on matters related to human rights and environmental, social, and governance (“ESG”) best practices, and as a result of this engagement, our Board adopted a Global Human Rights Policy, which is consistent with GEO’s expressed goalsinformed by reference to the United Nation’s Universal Declaration of Human Rights and the International Labor Organization’s 1998 Declaration on Fundamental Principles and Rights at Work. The policy is reviewed regularly and incorporates protections for civil liberties and freedom of speech.
In December 2021, we created a new Board committee, the Criminal Justice Rehabilitation and Human Rights Committee, to oversee and guide our efforts regarding rehabilitation, recidivism reduction and respect of human rights. In February 2022, the Board determined it was in the best interests of shareholders.
Resolved,the shareholders of GEO requestCompany to divide the preparation of a report, updated annually, disclosing:committee’s work into two committees, the Human Rights Committee and the Criminal Justice Rehabilitation Committee.
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For purposesWe have published four annual Human Rights and ESG reports highlighting our continued commitment to respecting the human rights and improving the lives of this proposal, a “grassroots lobbying communication” is a communication directedthose entrusted to our care and our commitment to providing transparent disclosures relating to the general publicCompany’s commitment to human rights and our performance related to salient human rights risks.
Human Rights Risk Assessment/Due Diligence and Reporting
In 2022, we engaged a leading ESG and sustainability consulting and research firm to facilitate and assist us with conducting a Human Rights Risk Assessment/Due Diligence focused on identifying human rights risks that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respectare salient to the legislation or regulation. “Indirect lobbying” is lobbying engaged inCompany’s stakeholders and operations. The Human Rights Risk Assessment/Due Diligence involved: reviewing our documents, policies, procedures and trainings; preparing a list of human rights by stakeholders (inmates/detainees/residents and employees) followed by a trade association or other organizationseries of which GEO is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on GEO’s website.
Supporting Statement
As shareholders, we encourage transparency and accountability in our company’s use of corporate funds to influence legislation and regulation. GEO has spent $7.13 million from 2010 — 2018 on federal lobbying,interviews with key stakeholders, including $1.7 million in 2017, which reportedly was the highest amount in a year for a private prison.1 These figures do not include lobbying expenditures to influence legislation in states, where GEO also lobbies but disclosure is uneven or absent. For example, GEO had at least 67 lobbyists in 16 states in 2018 (followthemoney.org). GEO spent $1,500,000 on lobbying in Alabama for 20182 and $3,995,000 on lobbying in Florida from 2012 — 2017.3 And GEO’s lobbying over how long immigrant children in Texas can be detained has attracted negative scrutiny.4
GEO is a member of the National Association of Real Estate Investment Trusts, which spent over $7.8 million on lobbying in 2017 and 2018. GEO is also listed as a member of the Florida Chamber of Commerce, which had at least 25 lobbyists in Florida in 2017.5 GEO does not comprehensively disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying. Absent a system of accountability, company assets could be used for objectives contrary to GEO’s long-term interests.
We are concerned that GEO’s lack of lobbying disclosure presents reputational risks, and thus we urge the Board to institute comprehensive lobbying disclosure.
Recommendationmembers of the Board, executive leadership, division heads and other senior leaders, subject matter experts, frontline employees, GEO Continuum of DirectorsCare alumni, community stakeholders, and shareholder representatives, including institutional investors and members of the Interfaith Center on Corporate Responsibility; assessing and scoring each human right based on a variety of factors (scale, reach, probability, remediability and attribution to GEO) and finally reporting in our most recent Human Rights and ESG Report the salient inmate/detainee/resident rights and salient employee rights that ranked very high, high and moderate. Among the salient human rights identified by the due diligence process, for both inmate/detainee/resident and employee stakeholder groups, was the Right to Equality and Freedom from Discrimination. Building on this important process, we expect to evaluate additional human rights initiatives, including a future review of our Global Human Rights Policy and its implementation.
GEO’s boardEach annual Human Rights and ESG Report builds upon the previous report and incorporates updated disclosures and metrics for each calendar year based on recognized ESG reporting standards, related to the development of directors recommends a vote “AGAINST”our employees; our adherence to ethical governance practices throughout our company; and our commitment to upholding the adoptionhuman rights of this proposal forour inmates, detainees and residents. The annual Human Rights and ESG Report also highlights our continued commitment to improving the following reasons:lives of those entrusted to our care by providing enhanced rehabilitation and post-release support services through our award-winning GEO Continuum of Care (“CoC”) program, as discussed further below.
Trainings
We have carefully considered this shareholder proposal and we believe we have substantially implementedthere is a fundamental connection between the shareholder proposal. The proposal’s stated objective and underlying concern is to encourage transparency and accountabilityhuman rights aspirations set forth in our use of corporate funds to influence legislationCompany policies and regulation. We are already addressing this essential objective and underlying concern by annually publishing our lobbying and political activity report. Our most recent lobbying and political activity report is available on our website at http://www.geogroup.com by clicking on the link “Social Responsibility” on our homepage and then clicking on the links “Governance with Integrity-Political Engagement.”
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Our annual report explains the approval process for lobbying expenditures and political contributions. Our annual report discloses the total annual dollar amount paid to consultant government relations professionals for direct lobbying and discloses any trade and membership associations to which we pay dues, fees or contributions of more than $25,000 annually. Our annual report also discloses the total annual dollar amounts paid in political contributions divided by source of funds (i.e., GEO Corporate and GEO PAC) and by recipient category (i.e., federal candidates, parties and committees; and state/local candidates, parties and committees). The shareholder proposal also requests information regarding grassroots lobbying and we note that GEO does not engage in grassroots lobbying. Our annual report provides substantially all material information requested by disclosure items (1)-(4) of the shareholder proposal.
Prior to finalizing and publishing our annual report, our Board of Directors reviews the annual report.
In addition to our annual report, we comply with applicable federal and state laws relating to our lobbying activities and expenditures and our political activities and contributions. For example, GEO is subject to the Lobbying Disclosure Act (“LDA”) and its registration and reporting provisions, which among other things require disclosure of (i) the organizations employing persons lobbying on GEO’s behalf, (ii) the issues being lobbied, (iii) the congressional offices and/or federal agencies contacted, (iv) the specific legislative or executive issues addressed, and (v) estimated lobbying expenses. 2 U.S.C. §§ 1603(b) & 1604(b). State lobbying laws demand similar information. The information disclosed in these federal and state filings is readily available online. Additionally, our annual report discloses that all of the PAC’s filings with the Federal Election Commission (FEC) are publicly available on the FEC’s website atwww.fec.gov and provides that information on political contributions can be found in state agency websites, such as the respective Department of State, Ethics Commissions and/or State Divisions of Election, including sos.ca.gov,www.ethics.state.tx.us and dos.myflorida.com.
To address one of the statements in the shareholder’s supporting statement above, we would like to clarify that we donot lobby for or against immigration enforcement policies or any policies or legislation that would determine the basis for an individual’s incarceration or detention, the length of sentences or the criminalization of behavior. This is also clearly stated in our annual report. We are aware that, unfortunately, there has been information that has been publicly disseminated by others that mischaracterizes or provides false or inaccurate information regarding what we do as a company and what we don’t do as a company.their realization. To that end, we encouragestrive to make our shareholdersstaff, contractors, and third-parties to visitwww.wearegeo.com for content relatingour facilities and programs aware of the commitments we have made in those policies, and to who we are, recidivism solutions, improving lives, and dispelling myths.incorporate them into our training protocols.
We reinforce, promote, and support our commitment to respect human rights through company-wide awareness and training programs. All new GEO employees — including our facility and program staff who work directly with the individuals in our care — are required to complete our human rights training. In addition, we have a robust training program for staff at all levels of the organization. Our training of managerial, administrative, and security staff is based on independent standards set by the American Correctional Association (ACA). The training encompasses a minimum of 120 hours within the staff member’s first year of employment and 40 hours of recurring training during each consecutive year of employment.
We work with numerous vendors and suppliers of services and goods and require compliance with appliable laws. We monitor our suppliers for anti-corruption practices. We expect suppliers to maintain the same standards that we have laid out in our Code of Business Conduct and Ethics. We take our responsibilities seriously and have formal due diligence processes to screen and monitor third parties, suppliers, and agents. We have also developed a training program designed to introduce all contractors and third parties to our facilities and programs through a self-paced course that must be completed by all contractors and third parties prior to beginning their services. The course includes GEO’s commitment to human rights, facility rules and regulations, inmate/detainee/resident rights and responsibilities, and entry and exit procedures.
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Continuum of Care® Program
The CoC program is an innovative and award-winning initiative we began in 2015 to provide enhanced in-custody rehabilitation programming, including cognitive behavioral treatment, integrated with post-release support services. This evidence-based treatment model begins with individualized risks and needs assessments and offers programs designed to address the specific needs of each participant based on their assessments. At the Corporate Office level, the CoC Program is administered by the GEO Continuum of Care® Division with subject matter experts in education, cognitive behavioral treatment, substance abuse treatment, post-release services, CoC training, and quality assurance.
On any typical day, there are approximately 31,500 individuals participating in enhanced in-custody rehabilitation programming and post-release support services, which resulted in 3.5 million programming hours completed during 2022 despite COVID-19 pandemic restrictions and over 15 million programming hours completed from 2019-2022. Program completions in 2022 included: 39,603 behavioral program completions, 7,302 substance abuse treatment program completions, 8,119 vocational education program completions, and 2,365 high school equivalencies issued. With respect to program completions by CoC participants in 2022, minorities constituted 56% of total participants and over 55% of the participants in individual cognitive behavioral treatment services, life skills programming, behavioral treatment and substance abuse treatment. Our 2022 annual funding commitment in support of the CoC program was approximately $7 million, of which we allocated approximately $1.1 million in annual funding to assist those released from custody in obtaining such necessities as housing, clothing, food, transportation, employment/education and treatment services. Since 2016, we have allocated approximately $8 million in post-release support grants to released individuals to fund these essential community needs. GEO’s Post-Release Case Managers coordinate and facilitate the delivery of resources through 254 preferred providers. Weekly calls are scheduled with post-release participants to assess progress, provide support for up to 12 months, and motivate participants to continue in the behavioral change process. We are proud that 50% of our Post-Release Case Manager positions have been filled with returning citizens who were previously incarcerated.
The GEO CoC Training Institute trains all staff from the time of hire and on a regular basis throughout their employment. The training institute creates and implements staff and facility development needs through a needs analysis. GEO incorporates feedback from staff and participant surveys as well as research trends to develop training curricula and lesson plans. Our staff development plans include basic training, refresher training, advanced training, skillset certifications, and new managers training. In 2022, 223,475 hours were spent on CoC staff training.
In May of 2022, three GEO CoC Alumni participated in a TEDx talk in New York City focused on criminal justice reform and on reducing recidivism. The GEO CoC Alumni shared their experiences as returning citizens and discussed the challenges they were able to overcome with the support provided by the GEO CoC and post-release support programs. We look forward to hearing about the continued and future successes of these GEO CoC alumni and others just like them.
Faith-Based Partnerships
As part of our collaboration with key stakeholders, we partner with approximately 47 faith-based organizations around the country, including national organizations and local community churches. These organizations offer a wide range of religious and educational services, as well as guidance and mentorship, to those in our care. For example, through our partnership with Prison Fellowship, 5,000 bibles in English and Spanish were provided to those in our care along with over 11,000 faith-based study guides to address issues confronting incarcerated individuals such as worry, depression and boredom, and through our partnership with Deep Heart Musical Theatre Troupe of Nevada, they performed seven live concerts for those in our care at our Phoenix West and Kingman, Arizona facilities.
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Commitment to the Communities We Operate In
We are committed to be a contributing member of the communities in which we operate, and we seek out ways to engage our communities directly as a partner and a citizen.
The GEO Group Foundation
We are committed to making a difference in the communities in which we operate. Every year, through The GEO Group Foundation, we support charities, schools, community organizations, and higher education scholarships for students across the country. Since 2011, The GEO Group Foundation has donated approximately $19.7 million to scholarships, children’s organizations, health and disability organizations, youth sports and development, veterans’ organizations, and various other charitable organizations in the communities where we operate. We are proud that more than $8.5 million of those donations have been allocated to higher education scholarships in local communities and non-profit organizations that provide services and programs for at-risk youth.
Recruitment and GEO Alumni
We are proud to support our local communities, and we recruit more than 90% of our workforce from these communities. Additionally, we understand the value of providing second chances to those impacted by the Criminal Justice System and continue to demonstrate this through our hiring practices. The GEO Continuum of Care® Post Release Call Center is over 50% staffed with returning citizens who have previously been incarcerated. We have also hired a number of employees who were previously detainees or residents in our secure facilities or reentry programs, including employees who have gone on to serve in such capacities as Recovery Coordinator, Program Counselor, Recreation Specialist, Employment Specialist, Post-Release Case Manager, National Director of GEO Alumni Services and Assistant Facility Director. In fact, one of these employees established GEO Alumni Services, where members voluntarily join to mentor current detainees and residents and provide support and guidance.
GEO alumni members now leading a positive lifestyle in their communities often assist those in transition, acting as mentors and assisting others with helpful information and resources for reentry. GEO alumni participate in a number of activities, in person and virtually, to mentor and assist others. Each year, GEO alumni from across the country participate in a national picnic where among other things outstanding alumni and staff are recognized for their hard work and successes.
Conclusion
We are proud of the progress we have made and the transparency we provide with respect to racial equity and DE&I, and we believe that our annual report provides meaningful information, transparencyprocesses and accountabilityactions fully respond to the spirit of the proposal. We also believe shareholders would be better served with our resources being used to further deepen our extensive racial equity and DE&I efforts, rather than diverting management attention and significant resources to an external audit. As a result, our Board believes that the proponent’s requested external audit is not in the best interests of our shareholders and others relating to our lobbying and political activities and we are committed to publishing this report on an annual basis. We believe that GEO has already addressed the shareholder proposal’s key objectives and disclosure requested. As a result, we believe the proposal has been substantially implemented.
Conclusion
For these reasons, the Board recommends that youshareholders vote “AGAINST”“AGAINST” this proposal. Proxies solicited by the Board of Directors will be voted against the proposal unless instructed otherwise.
SHAREHOLDER PROPOSAL AND NOMINATIONS DEADLINE
As more specifically provided in our Amended and Restated Bylaws, no business may be brought before an annual meeting by a shareholder unless the shareholder has provided proper notice to us not less than 6090 days nor more than 90120 days prior to the first anniversary of the preceding year’s annual meeting. Accordingly, since our annual meeting for 20202023 is scheduled for May 19, 2020,April 28, 2023, any shareholder proposal to be considered at the 20212024 annual meeting must be properly submitted to us not earlier than January 19, 2021December 30, 2023 nor later than February 18, 2021.January 29, 2024. These requirements are separate from the Securities and Exchange Commission’s requirements that a
stockholder shareholder must meet in order to have a proposal included in our proxy statement. For the 20202024 annual meeting, under the Securities and Exchange Commission’s requirements, any stockholdershareholder proposals and recommendations for director nominees must be received by GEO no later than December 10, 2020,November 18, 2023 in order to be included in our 20212024 proxy statement.
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In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules, a person who intends to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company that sets forth the information required by Rule 14a-19(b) under the Exchange Act, including a statement that such person intends to solicit the holders of shares representing at least 67% of the voting power of the Company’s shares entitled to vote in the election of directors in support of director nominees other than the Company’s nominees.
VIRTUAL ANNUAL SHAREHOLDERS MEETING GUIDELINES
The Board of Directors believes that the virtual meeting format provides the opportunity for participation by a broader group of our shareholders, while reducing the costs associated with planning, holding and arranging logistics for anin-person meeting. The virtual meeting format enables shareholders to participate fully, and equally, from any location around the world, at no cost. It also reduces the environmental impact of our Annual Meeting. We designed the format of our Annual Meeting to ensure that our shareholders who attend our Annual Meeting will be afforded the same rights and opportunities to participate as they would at anin-person meeting and to enhance shareholder access, participation and communication through online tools. Members of senior management and our directors will also attend the Annual Meeting.
Date and Time. The Annual Meeting will be held “virtually” through a live audio webcast on Tuesday, May 19, 2020,Friday, April 28, 2023, at 10:00 a.m. Eastern Daylight Time. There will be no physical meeting location. The Annual Meeting will only be conducted via an audio webcast.
Access to the Audio Webcast of the Annual Meeting. The live audio webcast of the Annual Meeting will begin promptly at 10:00 a.m. Eastern Daylight Time. Online access to the audio webcast will open approximately thirty minutes prior to the start of the Annual Meeting to allow time for you to log in and test the computer audio system. We encourage our shareholders to access the Annual Meeting prior to the start time.
Log in Instructions. To attend the virtual Annual Meeting, log in at www.virtualshareholdermeeting.com/GEO2020.GEO2023. Shareholders will need their unique16-digit control number which appears on the Notice Regarding the Availability of Proxy Materials or the proxy card (printed in the box and marked by the arrow). In the event that you do not have a control number, please contact your broker, bank, or other nominee as soon as possible and no later than Tuesday, May 12, 2020,Friday, April 14, 2023, so that you can be provided with a control number and gain access to the Annual Meeting.
Submitting Questions to the virtual Annual Meeting. An onlinepre-meeting forum will be available to our shareholders at www.proxyvote.com prior to the day of the Annual Meeting. By accessing this online forum, our shareholders will be able to submit questions in writing in advance of the day of the Annual Meeting, vote, view the Annual Meeting’s Rules of Conduct, and obtain copies of proxy materials and our annual report. Shareholders may also submit questions in writing on the day of or during the Annual Meeting on www.virtualshareholdermeeting.com/GEO2020.GEO2023. Shareholders will need their unique16-digit control number which appears on their Notice Regarding the Availability of Proxy Materials or the proxy card (printed in the box and marked by the arrow).
As part of the Annual Meeting, we will hold a Q&A session, during which we intend to answer all questions submitted before or during the Annual Meeting in accordance with the Annual Meeting’s Rules of Conduct and Procedures which are pertinent to the Company and the Annual Meeting matters, as time permits. In order to ensure that as many shareholders as possible are able to ask questions or make a comment during the Q&A period, each shareholder will be permitted no more than two questions or comments. In order to ensure questions are compiled in a timely manner for the Q&A session, we ask that any shareholder wishing to ask a question during the Annual Meeting do so as soon as possible and prior to the conclusion of the presentation of the proposals. Additionally, we value and welcome the views, questions and constructive comments of our shareholders, but the purpose of the Annual Meeting will be observed and questions or comments will not be addressed that are determined to be irrelevant or inappropriate, including those that are: irrelevant to the business of the Annual Meeting or GEO’s business, derogatory references that are not in good taste, unduly prolonged, substantially repetitious of questions or comments made by other persons, or related to personal grievances.
Questions and answers to any such questions that were addressed during the Annual Meeting and the questions and answers that were not addressed during the Annual Meeting due to time constraints will be published
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following the Annual Meeting on the Company’s website at www.geogroup.com under the links “Investor Relations”—“Resources” —“Corporate “Resources” — “Corporate Governance.” Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. The questions and answers will remain available until the 20212024 Proxy Statement is filed.
Participation by Shareholder Proponent.During the Annual Meeting, the proponent of the shareholder proposal included in this proxy statement will have a dedicatedcall-in line to facilitate its ability to present its shareholder proposal.
Technical Assistance. Beginning 30 minutes prior to the start of and during the virtual Annual Meeting, Broadridge will have a support team ready to assist shareholders with any technical difficulties they may have accessing or hearing the virtual meeting.
If you encounter any difficulties accessing the virtual meeting during thecheck-in or Annual Meeting time, please reach out to Broadridge’s technical support team using the contact information available on the virtual meeting website at www.virtualshareholdermeeting.com/GEO2020.GEO2023.
Voting shares prior to and at the virtual Annual Meeting. Shareholders may vote their shares at www.proxyvote.com prior to the day of the virtual Annual Meeting or at www.virtualshareholdermeeting.com/GEO2020GEO2023 on the day of and during the virtual Annual Meeting.
Availability of live webcast to officers, directors, employees and other constituents;constituents; Replay. The live audio webcast will be available to not only our shareholders, but also our officers, directors, employees and other constituents. A replay of the Annual Meeting will be made publicly available 24 hours after the Annual Meeting atwww.virtualshareholdermeeting.com/GEO2020.GEO2023.
As permitted by rules adopted by the Securities and Exchange Commission, we are delivering a single Notice of Internet Availability of Proxy Materials, annual report and proxy statement, as applicable, to any household at which two or more shareholders reside if we believe the shareholders are members of the same family, unless otherwise instructed by one or more of the shareholders. We will promptly deliver separate copies of these documents upon the written or oral request of any shareholders at a shared address to which a single copy of the documents were delivered.
If your household received a single set of any of these documents, but you would prefer to receive your own copy, or if you share an address with another stockholdershareholder and together both of you would like to receive only a single set of these documents, please follow these instructions:
If your shares are registered in your own name, please contact our transfer agent, Computershare, and inform them of your request by calling them at (800)522-6645 or writing them at PO BOX 505000, Louisville, KY 40233-5000.
| • | If your shares are registered in your own name, please contact our transfer agent, Computershare, and inform them of your request by calling them at (800) 522-6645 or writing them at PO BOX 505000, Louisville, KY 40233-5000. |
| • | If your household received a single Notice of Annual Meeting of Stockholders or, if applicable, a single set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge Householding Department, by calling their toll free number, 1-866-540-7095, or by writing to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. You will be removed from the householding program within 30 days of receipt of your instructions at which time you will then be sent separate copies of the documents. |
If your household received a single Notice of Annual Meeting of Stockholders or, if applicable, a single set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge Householding Department, by calling their toll free number,1-866-540-7095 or by writing to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. You will be removed from the householding program within 30 days of receipt of your instructions at which time you will then be sent separate copies of the documents.
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The board of directors knows of no other matters to come before the shareholders’ meeting.
By Order of the Board of Directors,
Joe Negron
Senior Vice President, Legal Services, General Counsel
and Corporate Secretary
April 9, 2020March 17, 2023
A copy of GEO’s 2022 annual report, proxy statement or Annual Report on Form10-K for the fiscal year ended December 31, 2019,2022, including the financial statements and the schedules thereto, but excluding exhibits thereto, which has been filed with the SEC, will be made available without charge to interested shareholders upon written request to Director, Corporate Relations, The GEO Group, Inc., 4955 Technology Way, Boca Raton, Florida 33431.
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THE GEO GROUP, INC. 4955 TECHNOLOGY WAY BOCA RATON, FLORIDA 33431 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M.p.m. Eastern Daylight Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Meeting—Go to www.virtualshareholdermeeting.com/GEO2020GEO2023 You may attend the Meetingmeeting via the Internet and vote during the Meeting.meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.p.m. Eastern Daylight Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D02527-P35946D97090-P88221 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY THE GEO GROUP, INC. The Board of Directors recommends you vote “FOR” the following: 1. Election of Directors Nominees: For All Withhold All Except For All To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. Anne N. Foreman 05) Guido Van Hauwermeiren Richard H. Glanton 06) ChristopherAgainst Abstain 1a. Thomas C. WheelerBartzokis 1b. Jack Brewer 1c. Jose Gordo 07)1d. Scott M. Kernan 1e. Lindsay L. Koren 1f. Terry Mayotte 1g. Andrew N. Shapiro 1h. Julie Myers Wood Scott M. Kernan 08)1i. George C. Zoley For Against Abstain The Board of Directors recommends you vote “FOR”FOR proposals 2 and 3: 2. To ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accountants for the 2020 scal2023 fiscal year. 3. To hold an advisory vote to approve named executive ofcerofficer compensation. 1 Year 2 Years 3 Years Abstain The Board of Directors recommends you vote “AGAINST”“1 YEAR” for proposal 4: 4. To hold an advisory vote on the frequency of the advisory vote on executive compensation. For Against Abstain The Board of Directors recommends you vote AGAINST proposal 5: 5. To vote on a shareholder proposal regarding a lobbyingthird-party racial equity audit and report, if properly presented before the meeting. For Against Abstain For Against Abstain For address change/comments, mark here. (see reverse for instructions) Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other duciary,fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized of cer.officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D02528-P35946D97091-P88221 THE GEO GROUP, INC. Annual Meeting of Shareholders May 19, 2020,April 28, 2023 10:00 AM This Proxyproxy is solicited by the Board of Directors The undersigned hereby appoints George C. Zoley and Joe Negron as Proxies, each with the power to appoint his substitute, and hereby authorizes each to represent and to vote, as designated on the reverse side, all the shares of Common Stock of The GEO Group, Inc. held of record by the undersigned at the close of business on March 11, 2020,7, 2023, at the Annual Meeting of Shareholders to be held virtually at www.virtualshareholdermeeting.com/GEO2020,GEO2023 at 10:00 A.M. (EDT), May 19, 2020April 28, 2023 or at any adjournment thereof. This Voting Instruction Form also instructs MassMutual Financial Group as Trustee of The GEO Group, Inc. 401(k) Plan, to vote by Proxy at the virtual Annual Meeting of Shareholders, all the shares of Common Stock of The GEO Group, Inc. for which the undersigned shall be entitled to instruct in the manner appointed on the other side hereof. MassMutual FienancialFinancial Group will vote the shares represented by this Voting Instruction Form that is properly completed, signed, and received by MassMutual Financial Group before 12:00 P.M. (EDT) on May 18, 2020.April 27, 2023. Please note that if this Voting Instruction Form is not properly completed and signed, or if it is not received by Thethe Trustee as indicated above, shares allocated to a participant’s account will not be voted. MassMutual Financial Group will hold your voting instructions in complete confidence except as may be necessary to meet legal requirements. MassMutual Financial Group makes no recommendation regarding any voting instruction. This Proxy is solicited by the Board of Directors and will be voted in accordance with the instructions speciedspecified on the reverse side. If no instructions are specied,specified, this Proxy will be voted FOR the election of the nominees, FOR Proposals 2 and 3, “1 Year” on Proposal 4 and AGAINST Proposal 4. Address Changes/Comments: (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)5. Continued and to be signed on reverse side