candidates. Our corporate governance guidelines also require that our Compensation Committee ensure that we have appropriate succession planning for the remainder of our senior executive management team, including our NEOs. Each year, our Board and Compensation Committee discuss succession planning for our senior executive management team and their respective direct reports.
2020 marks a year of transition and change for our senior
Two significant leadership teamtransitions occurred in 2020 with the transitionretirements of responsibilitiesStephen B. Burke, CEO of Mr.NBCUniversal, and David L. Cohen, and the retirement of Mr. Burke.Senior Executive Vice President. While Messrs. Burke and Cohen have been instrumental in shapinghad shaped and guidingguided our company for many years, we are excited about our next generation of leaders who will continuehave seamlessly stepped in and continued to help us navigate evolving consumer, technological and regulatory trends and address competitive challenges. Our succession planning has facilitated a seamlessthis smooth transition, process to date, including with respect to our senior management team’s leadership and response to theCOVID-19 pandemic.
Human Capital and Talent Management
Recruiting, developing, promoting and retaining top talent is a key priority for our company. Throughout the year, our executive management team, as well as a broader array of executives throughout our businesses, make presentations to the Board and its committees and also interact with our directors during Board dinners before our fiveinformally outside of regularly scheduled Board meetings.
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| In 2020, over 45 employees, ranging from Vice Presidents to Executive Vice Presidents to heads of business units, attended meetings of our Board and its committees. | |
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This engagement between directors and our current and future leaders gives our directors meaningful insight into our current pool of talent, what attracts and retains our executives and our company culture.
Board and Committee Evaluations
Each year, our Board and each of its committees perform a self-assessment to evaluate their effectiveness. As part of these assessments, each director completes a detailed questionnaire for the Board and any committees on which he or she serves, addressing topics such as Board structure and composition, Board responsibilities, Board meetings and materials, Board and management interactions and ethics and compliance. The questionnaire seeks responses based on numerical ratings and also seeks qualitative comments on each question and any other general comments. The Governance and Directors Nominating Committee reviews and approves the process and the questionnaires to be used, with outside counsel also reviewing the questionnaires. The results of the assessments are compiled anonymously with the average numerical response and any qualitative responses to each question, as well as a general summary of the results, beingare reviewed and discussed atwith the Board and the Governance and Directors Nominating Committee (as it relates to both the Board and all committees), each committee (as it relates to such committee) and, as appropriate, with any individual director. The Governance and Directors Nominating Committee develops action plans for items that may require follow up.follow-up, and it also coordinates recommendations for key business and director educational topics for the following year’s Board and committee meeting agendas.
Corporate Governance Guidelines and Code of Conduct
Our Board has adopted corporate governance guidelines that address items such as the standards, qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. We also have a code of conduct that applies to all of our employees, including our executive officers, and our directors. Both the guidelines and the code of conduct applicable to our executive officers and directors are posted under “Corporate Governance” in the Investors section of our website at www.comcastcorporation.com. We will disclose under “Corporate Governance” in the Investors section of our website any amendments to, or any waivers under, the code of conduct that are required to be disclosed by the rules of the SEC.
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Shareholder Engagement
We have an active, broad-based and year-round investor relations outreach program to solicit input and to communicate with shareholders on a variety of topics. In addition to our regular investor relations program that reviews our business and strategy with buy-side investors and securities analysts, we engage with investors on various corporate governance, compensation and other environmental and social (“E&S”) topics. This dialogue provides an opportunity to discuss governance matters generally, including our directors’ skills and tenure, Board oversight roles and responsibilities, E&S initiatives and executive compensation.
The key elements of our investor relations outreach program are below:
COMCAST SHAREHOLDER OUTREACH Governance and E&S Engagements Annual Meeting Outcomes from Investor Feedback Investor Relations Year-Round Engagement Focused, one-on-one meetings with investors, senior management and, at times, directors, on range of governance, compensation and E&S matters, as well as general business and strategy updates Meetings with primary proxy advisory firms Live webcasts of quarterly earnings presentations Live webcasts of CEO, CFO and other business leaders speaking at investor conferences Met with over 400 investors on strategy and business results through combination of roadshows, group meetings and one-on-one meetings Discussions with most proponents of shareholder proposals before proxy statement filed Meetings with investors to discuss annual meeting proposals Shareholder vote on director nominees, auditors, executive compensation and other company and shareholder proposals Board and/or its committees review annual meeting voting results and investor feedback received from engagements As a result of these over the past year; Made a number of changes to our executive compensation program (see pages 31-32) Committed to make various other E&S disclosures later in 2021, in each case beginning with respect to 2020 data, including: supplementing our current DE&I reporting with information from EEO-1 reports providing increased information on lobbying done by our trade associations reporting for the first time under the Sustainability Accounting Standards Board (“SASB”)framework in 2021
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| Over past year, met with over 55 investors owning over 50% of Class A common stock on governance, compensation and E&S matters. | |
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Our Board has established a process for shareholders and other interested parties to communicate with its members. Correspondence may be addressed to the Board, the Lead Independent Director, any other particular director, any committee of the Board or any other group of directors, in care of Thomas J. Reid, Secretary, Comcast Corporation, at the mailing address provided on page 68 or the following e-mail address: audit_committee_chair@comcast.com. The Secretary, or his designee, promptly reviews all such correspondence and, as appropriate, forwards it to the Board or other addressee based on the subject matter of the correspondence. Any such correspondence relating to accounting, internal accounting controls or auditing matters is handled in accordance with procedures established by the Audit Committee.
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Executive Compensation
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| Proposal 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | |
| The following proposal gives our shareholders the opportunity to cast a non-binding, advisory vote to approve the compensation of our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and our compensation philosophy, policies and practices, as disclosed below. We encourage shareholders to review detailed information on our executive compensation program and the 2020 compensation of our NEOs as set forth in “Executive Compensation — Compensation Discussion and Analysis,” starting below. Shareholders are being asked to vote “FOR” the adoption of the following resolution: “RESOLVED, that the compensation paid to Comcast Corporation’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.” While we intend to carefully consider the voting results of this proposal, this vote is advisory in nature, and, therefore, is not binding on us or our Board. Our Board and Compensation Committee value the opinions of all of our shareholders and will consider the outcome of this vote when making future compensation decisions for our NEOs. | |
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|  | Our Board unanimously recommends that shareholders vote “FOR” approval of the compensation ofour named executive officers. | |
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Letter from the Compensation Committee
Dear Shareholders,
2020 marked a year of unprecedented challenges with the COVID-19 pandemic, yet the Company’s senior leadership team – led by our named executive officers (“NEOs”): Brian L. Roberts (Chairman, President and CEO), Michael J. Cavanagh (CFO), Jeff Shell (CEO of NBCUniversal), David N. Watson (CEO of Comcast Cable) and Thomas J. Reid (Chief Legal Officer and Secretary) – worked seamlessly and tirelessly together. With their management teams, they successfully executed on our strategy and adapted to find safe and creative solutions to navigate the pandemic to benefit employees, customers, communities, suppliers and shareholders now and for the long term. Our company’s solid operational and financial results underscore the overall resiliency of our business, and we believe we will emerge from this challenging environment in a strong position due to our ability to execute on our strategic focus on broadband, aggregation and streaming.
As you will see described in the following “Compensation Discussion and Analysis,” our Committee decided not to apply discretion to adjust any financial performance goals in the short- and long-term incentive programs designed for NEOs, believing that the long-term nature of our overall compensation structure would continue to incent and reward the NEOs for managing our company for the long term.
While we believe that our executive compensation program aligns the long-term interests of our NEOs and shareholders, we are committed to continually reviewing our compensation program. Underscoring this commitment, our company is highly engaged with shareholders, meeting with over 55 shareholders owning over 50% of the Company’s Class A common stock over the past year to discuss governance, compensation and E&S matters. We received feedback on our compensation program structure and have taken significant steps in response to this feedback, further aligning our overall pay-for-performance structure.
The enhancements made to our compensation program are discussed in more detail below under “Shareholder Feedback on Executive Compensation and Compensation-Related Changes,” and include the following:
| • | Eliminated above-market interest earnings on deferred compensation (beginning in August 2020 for directors and March 2021 for NEOs) |
| • | Redesigned the structure of performance-based restricted stock units (“PSUs”) granted in 2021 to include a three-year performance period, with new equally-weighted performance goals of absolute return on invested capital (“ROIC”) and adjusted earnings per share (“EPS”) relative to the S&P 100, and a total shareholder return (“TSR”) modifier (which will not be applied positively if TSR is negative) |
| • | Increased the weighting of the financial metrics portion of the annual cash bonus program from 50% to 70% for 2021 |
| • | Our annual cash bonus program has incentivized NEOs for our continuing focus on critical DE&I initiatives for over 10 years now and will continue to do so in 2021 – with a new dedicated portion to be based solely on stakeholder and sustainability initiatives such as further progress on our DE&I initiatives and continued leadership in addressing the “digital divide” |
We believe that these improvements build on our efforts to thoughtfully align the interests of our NEOs with the interests of our shareholders over the long term. We welcome your feedback on our compensation program reflected in the following pages.
Sincerely,
The Compensation Committee
Edward D. Breen (Chair)
Gerald L. Hassell
David C. Novak
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Compensation ConsultantDiscussion and Analysis
This discussion and analysis describes our executive compensation philosophy, process, plans and practices and gives the context for understanding and evaluating more specific compensation information in the tables and related disclosures that follow.
Executive Overview
Overall Performance
Mr. Roberts and our senior leadership team successfully navigated our organization through the severe challenges of 2020, executing on our strategy where it remained viable, adapting our strategy where it needed to adapt and finding safe and creative solutions to navigate the COVID-19 pandemic to benefit our employees, customers, communities, suppliers and shareholders now and for the long term. Our solid operational and financial results, and the resiliency of our business, were driven by our strategic focus on broadband, aggregation and streaming, which we believe delivers better experiences for our customers and value for our shareholders, positions our company to outperform and puts us on a trajectory to emerge from this challenging environment in an even stronger position. Mr. Roberts and our senior leadership team executed at the highest level, working together across our complementary, high-performing businesses at Comcast Cable, NBCUniversal and Sky to continue to accelerate convergence in media and technology.
Comcast Cable continued its strong financial and operating performance in 2020, driven by our differentiated broadband experience. The significant investments we have made in our technology and network over the years to stay ahead of demand and to maintain speed and reliability enabled us to successfully manage the largest sustained traffic surge in history during the peak of COVID-19. This achievement, combined with further enhancing our broadband offering by making Flex and Peacock available for free to customers, helped lead to 2 million net new broadband customers and 1.6 million total net new relationships this year – the best results on record.
The impact of the global pandemic placed significant financial pressure on NBCUniversal and Sky given the nature of their businesses, yet their leadership teams transformed the difficulties into opportunities. NBCUniversal, leveraging Sky’s technology infrastructure and Comcast Cable’s customer base, launched Peacock, its new streaming service. Even without the benefit of the Olympics, Peacock quickly surpassed our internal expectations, signing up more than 33 million customers in the United States in just over its first six months. With movie theaters closed, NBCUniversal also introduced a new “premium video on demand” strategy to make our firms available in the home and enable our Filmed Entertainment business to profitably release new titles. Our theme parks business found creative solutions to open safely in Orlando, Florida and Osaka, Japan. Meanwhile, Sky successfully increased its penetration of customers in Europe with Sky Q, launched Sky broadband in Italy, leveraging Comcast Cable’s xFi platform, and maintained strong customer loyalty throughout the pandemic. At the end of 2020, Sky returned to 99% of pre-COVID customer levels.
Our Board credits Mr. Roberts and our other NEOs for successfully leading the company during this unprecedented period. Their steadfast integrity and intense focus on protecting our employees, promoting collaboration and innovation across our company and realigning our business to better compete in the long term underscores the resiliency of our business, enabling us to deliver strong results in 2020 and positioning us well for 2021 and beyond.
COVID-19 Response
In response to the global pandemic, Mr. Roberts and our senior leadership team moved quickly to help our employees, customers and communities.
| • | We committed over $500 million to support our employees where operations were closed or impacted due to the pandemic, made work from home options as broadly available as possible, including to most of our call center employees, and enhanced safety measures for customer-facing employees. |
| • | Our teams worked tirelessly to ensure that our broadband network and services delivered the broadband capacity needed to keep our customers productive, informed and entertained throughout the year. |
| • | We helped our customers facing economic hardship maintain their broadband service and offered our network of out-of-home, public WiFi hotspots for free to everyone. |
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| • | We increased speeds for all Internet Essentials customers, with current speeds at 50/5 Mbps, offered new Internet Essentials customers two free months of service, kicked off our initiative to launch 1,000 WiFi-connected Lift Zones in community centers nationwide and introduced our Internet Essentials Partnership Program to connect large numbers of low-income students to the internet to support distance learning. |
| • | Our NBC and Sky news teams worked hard to keep the world informed, while our Xfinity team curated news and education resources to provide quick access to tools and information while expanding free access to traditional subscription-only content. |
Beyond our own company initiatives, Messrs. Roberts, Cavanagh, Watson and Shell personally donated six months of their salaries to charities to support COVID-19 relief efforts.
Social Justice Response
Mr. Roberts and our senior leadership team mobilized our company to accelerate our work in DE&I and pledge an additional $100 million over three years to fight injustice and inequality through a coordinated cross-company effort. Our key focus areas include partnering with, and providing significant grants to, organizations working to eradicate injustice and inequity; accelerating our internal efforts in all areas of DE&I; leveraging our company’s media resources to highlight Black voices and Black stories; deepening our long-standing commitment to addressing digital inequities; and committing funds to small businesses that have been affected by extended closures in the wake of COVID-19, with a substantial portion of those funds allocated to businesses owned by people of color.
Compensation Decisions for Achievement of 2020 Performance Metrics
In making compensation decisions for achievement of performance goals in our short- and long-term incentive programs, which goals were established in February 2020 before the COVID-19 pandemic was declared, the Compensation Committee, among other things, considered the exceptional performance of our NEOs in managing the long-term sustainability of our company through the pandemic for the benefit of our stakeholders – including our employees, customers, suppliers, shareholders and the communities where we operate – and the overall resiliency of our business. At the same time, it was mindful of negative COVID-19 impacts on some of our businesses such as our theme parks, our employees and our customers. The impacts of COVID-19 upon our business negatively affected in particular the achievement of financial performance goals relating to revenue and adjusted EBITDA for our annual cash bonus program and relating to adjusted EBITDA for PSUs granted in 2020. See “Financial Performance” on page 7 for information on our 2020 financial and operational performance.
Taking these factors into consideration, the Compensation Committee decided not to apply discretion to adjust any financial performance goals in our short- and long-term incentive programs designed for NEOs, believing that the long-term nature of our overall compensation structure would continue to incent and reward our NEOs for managing our company for the long-term. As a result, the first tranche of PSUs granted in 2020 did not vest and were forfeited. In addition, while no portion of the revenue or adjusted EBITDA components of our annual cash bonus program were achieved, metrics relating to free cash flow and key strategic operational priorities were achieved, resulting in the Compensation Committee awarding Messrs. Roberts, Cavanagh and Shell 75% of their target annual cash bonus for 2020. Given Comcast Cable’s exceptional financial and operating performance in 2020, its relative contribution to Comcast’s overall financial performance in 2020 and its expansion of Internet Essentials and other programs to provide assistance for customers facing economic hardship, Mr. Watson was awarded 100% of his annual cash bonus. See “Compensation Decisions” below for additional information.
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Shareholder Feedback on Executive Compensation and Compensation-Related Changes
At our 2020 annual meeting, our shareholders approved by 77% of the votes cast, on an advisory basis, the 2020 compensation of our NEOs. The Compensation Committee has carefully considered the results of this advisory vote and has discussed our executive compensation program and our voting results with Korn Ferry, its independent compensation consultant. The Compensation Committee also considered feedback on our compensation program received through our corporate governance roadshows, where we have met with over 55 shareholders owning over 50% of our Class A common stock over the past year, as well as two proxy advisory firms. (See “Shareholder Engagement” on page 26 for additional details on our shareholder engagement program.) Informed by these meetings, we have taken significant steps to address the feedback received about our compensation program and have significantly enhanced our overall pay-for-performance compensation structure. As a result of these steps, total performance-based compensation of our NEOs (excluding Mr. Roberts) increased from an average of 76% in 2019 to 86% in 2020, with Mr. Roberts’ increasing from 71% to 89%.
2019 CEO COMPENSATION MIX 2020 CEO COMPENSATION MIX 17% Other 11% Salary 19% PSUs 34%Annual Cash Bonus 19% Stock Options 71% Total performance based 1% Other 11% Salary 34% Annual Cash Bonus 32% PSUs 24% Annual Cash Bonus 32% Stock Options 89% TOtal performance based 18 percentage points YoY increase in total performance-based target compansation
| WHAT WE HAVE HEARD | | | WHAT WE HAVE DONE |
| DEFERRED COMPENSATION | | | |
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| Concerns relating to “above-market” interest in deferred compensation program | | | Made significant changes to our deferred compensation plans over the past two years to eliminate above-market interest earnings for NEOs and directors: • NEOs and directors may only invest deferred compensation in third-party mutual or exchange funds or a Comcast stock fund, resulting in the elimination of all above-market interest earnings (effective as of March 2021 for NEOs and August 2020 for directors) • NEOs surrendered contractual entitlement to company contributions to their deferred compensation accounts beginning in 2020 |
| LONG-TERM INCENTIVE COMPENSATION DESIGN |
| Consider having a multi-year performance period for PSUs | | | PSUs granted in 2021 will have a 3-year cumulative performance period, with performance goals determined at the beginning of the 3-year period and measured at the end of the three-year period; previously PSUs had five individual 1-year performance periods |
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| WHAT WE HAVE HEARD | | | WHAT WE HAVE DONE |
| LONG-TERM INCENTIVE COMPENSATION DESIGN (CONT’D) |
Consider using a relative performance metric Consider incenting NEOs with a capital allocation performance metric Consider a PSU performance metric not also used in the annual cash bonus program | | | PSUs granted in 2021 will have two relative performance metrics relating to adjusted EPS growth and TSR and will include an ROIC performance metric; none of these metrics are used in our annual cash bonus program Specifically: • PSUs will be earned based on achievement of two primary performance metrics, each weighted 50%: (1) an absolute ROIC metric (calculated for each year during the three-year period and averaged to yield an average ROIC for the cumulative three-year period) and (2) relative adjusted EPS growth to the S&P 100 over the three-year period • Attainment of primary performance metrics is subject to a relative TSR modifier, interpolated for performance between the bottom and top quartiles (25th – 75th percentile), with no positive modifier applied if TSR is negative over the performance period |
| ANNUAL CASH BONUS | | | |
| Consider aligning relative weighting of quantitative financial performance metrics closer to market | | | Quantitative financial metrics will increase from 50% (in 2020) to 70% (in 2021) of the target bonus; revenue, adjusted EBITDA and free cash flow will remain as the metrics used Strategic operational performance goals such as success in the continuing development of Peacock will be reduced from 30% (in 2020) to 15% (in 2021) of the target bonus |
| Consider improving the transparency and objectivity of non-financial performance metrics | | | In 2020, the discretionary portion of the bonus was 20% and was determined based on each NEO’s role in creating a strong workplace culture that emphasizes integrity, respect and our continuing focus on critical DE&I initiatives (in addition to overall management of the company and financial results) |
| | | In 2021, 15% of the target bonus will be discretionary based solely on stakeholder and sustainability initiatives such as further progress on our DE&I initiatives and continued efforts to address the “digital divide” |
| | | We have provided more detailed disclosure about factors the Compensation Committee considered in determining attainment of strategic operational priorities and discretionary performance below in “Compensation Decisions – Annual Cash Bonus” |
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The Compensation Committee considered our executive compensation program holistically as it evaluated how to further enhance our program design while ensuring that the resulting structure will attract, retain and motivate our senior executives and align them with shareholders over the long term. With this view in mind, it determined that, in addition to the changes described above, the vesting terms of our PSUs and options should be reduced to align with broader market practice, with PSUs vesting 100% in 3 years and options vesting over 5 years, and that the potential payout of PSUs should be increased to up to 250% of target to reward senior executives for outperformance against rigorous goals.
Our Compensation Committee retainedand management team are committed to continued engagement with shareholders to understand their viewpoints and to discuss and demonstrate the important connection between our compensation program, on the one hand, and our business strategy, goals and financial and operating performance, on the other hand. Our Compensation Committee, with the assistance of Korn Ferry, continues to evaluate our compensation program design. The Compensation Committee believes that its policies and decisions are consistent with our compensation philosophy and objectives and align the interests of our NEOs with our long-term goals and the interests of our shareholders without incenting inappropriate risk taking.
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Our Approach to 2020 Compensation
In designing the compensation program for 2020, we evaluated both our business objectives and the need to attract and retain uniquely talented and experienced individuals who think strategically for the long term and perform for our highly competitive businesses, particularly in light of the challenging and evolving competitive, technological and regulatory environments in which we operate. We employ a variety of elements that further our shareholders’ interests by securing our executives’ services in an exceedingly competitive talent market and aligning the long-term interests of our executives to create shareholder value.
| • | To motivate and retain our executives, we provide pay opportunity levels that are highly competitive. |
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| • | Our compensation program is designed in a straightforward manner to achieve an appropriate balance of elements to reward our NEOs for their performance and create long-term shareholder value. In addition to fixed compensation, we provide short-term and long-term performance-based compensation, which when viewed holistically – understanding the rigor and relevance of our performance conditions and the vesting periods for NEOs to ultimately realize any value from their long-term incentive awards – strongly align the interests of our NEOs with those of our shareholders over the long term. |
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| • | Our short-term annual bonus program includes quantitative financial performance goals that are based on a rigorous and in-depth enterprise-wide consolidated budget that is prepared annually and takes into consideration the cyclicality of working capital in our business, capital spending plans for the upcoming year, target product rollout numbers and other relevant factors. |
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| • | Our annual long-term incentive program is composed of grants of PSUs and stock options. PSUs awarded in 2020 have a meaningful performance condition for vesting based on an annual increase in adjusted EBITDA (excluding Peacock) – one of the most important financial metrics in creating shareholder value. Stock options are inherently performance-based in that our stock price must appreciate for the options to deliver any value. |
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| • | The primary financial quantitative metrics used in our incentive compensation program reflected those used both internally to measure our performance and externally to report to investors. These measures are tied to cash generation, which is critical not only to maintain our existing businesses, but to make growth and strategic capital investments as we seek to proactively anticipate technological and consumer behavior changes in a rapidly changing competitive environment. Cash generation is also critical to our financial resiliency as we address the financial challenges of the COVID-19 pandemic and seek to reduce indebtedness. As a result, the financial metrics used in our 2020 executive compensation program were: |
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| • | Revenue – Serves as the top line component to cash generation. |
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| • | Adjusted EBITDA – Reflects the operational performance of our businesses, taking into account the costs of operating these businesses. |
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| • | Free cash flow – Measures, among other things, cash remaining after capital investments that allows us to repay indebtedness, make strategic investments and return capital to shareholders. |
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| • | Consistent with this view, free cash flow and adjusted EBITDA were the top two metrics used for valuing our company, according to an investor perception study of 47 buy-side investors and 10 sell-side analysts conducted by an unaffiliated third party on our behalf in 2019. We believe that our performance on these financial metrics is strongly correlated to shareholder returns in both the short and long term. |
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| • | We set company-specific performance goals that are directly linked with the NEOs’ management of our businesses to motivate them. |
Taken together, the interplay of these elements provided a pay program in respect of 2020 that is strongly aligned with shareholder interests and long-term value creation, retains a high-quality executive team and compensates the executive team when it does the right things to help our businesses succeed. We believe that the significant changes to our compensation program for 2021, as discussed above in “Shareholder Feedback on Executive Compensation and Compensation-Related Changes,” further enhance the performance-based nature of our executive compensation program.
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Executive Compensation Best Practices
| What We Do | | |
 Employ rigorous PSU performance conditions.
Maintain robust stock ownership guidelines. A person not in compliance cannot sell or otherwise dispose of stock until the applicable ownership requirement is met. All of our NEOs’ and directors’ beneficial shareholdings exceed these thresholds significantly. • CEO = 10x base salary • NEOs = 3x base salary • Nonemployee directors = 5x annual cash retainer Prohibit our executive officers and directors from (i) pledging Comcast stock as collateral or holding it in margin accounts and (ii) using any strategies or products to hedge against potential changes in the value of our stock. Have an incentive compensation recoupment (or “clawback”) policy applicable to our executive officers. Require our NEOs to reimburse us for any benefits that would be considered perquisites. Compensation Committee directly engages Korn Ferry as its own independent compensation consultant. Use net-settled options, which results in fewer shares issued and less dilution to our shareholders than stock options exercised with a cash payment. | | What We Don’t Do  Do not permit the repricing of options of any kind.
Do not maintain any defined benefit pension plans or supplemental executive retirement plans for our NEOs. None of our equity plans has automatic (“single-trigger”) accelerated vesting provisions in connection with a change in control. Mr. Roberts’ employment agreement has a “double-trigger” change in control provision. No other NEO has any change in control provisions in his employment agreement. Do not pay dividends or dividend equivalents in respect of any unearned PSUs, RSUs or on any stock options. Do not provide premium payments or reimbursements, or tax payments, to our NEOs under any life or any other insurance policies. Do not provide for any excise tax gross-ups for our executive officers. |
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Design and Structure of 2020 Executive Compensation
Elements of Our 2020 Compensation Program
We view the executive compensation program on a “portfolio” basis to achieve an appropriate balance of compensation elements to motivate and reward our NEOs for their performance and create long-term shareholder value. The following chart illustrates our view of the significant aspects of the portfolio used for 2020. (See “Shareholder Feedback on Executive Compensation and Compensation-Related Changes” for information about enhancements to our compensation program design for 2021.)
| TYPE | | ELEMENT | WHY WE USED IT | COMPENSATION HIGHLIGHTS |
 FIXED | | Base Salary | • Necessary to attract and retain our NEOs. • Serves as a baseline measure of an NEO’s value. • Guaranteed compensation in exchange for investing in a career with us. | • Salary level is based on individual performance, position within the organization and any increase in duties and responsibilities. |
 VARIABLE, SHORT-TERM, PERFORMANCE-BASED | | Annual Cash
Bonus | • Provides a competitive annual cash bonus opportunity and completes our competitive total annual cash compensation package. • Target bonus is based on the Compensation Committee’s assessment of the optimal mix of base salary and annual cash bonus compensation. • Supports our objective that NEOs must balance achieving satisfactory or better current year (short-term) results with long-term value creation. | • Based on objective quantitative financial performance metrics and quantitative and qualitative goals relating to key operational initiatives. • Includes a qualitative portion based on overall management and role in creating a strong workplace culture that emphasizes integrity, respect and our continuing focus on critical DE&I initiatives. |
 VARIABLE, LONG-TERM, PERFORMANCE-BASED | | Annual
Stock Option
Grants | • Fosters a long-term commitment, motivates executives to improve the long-term market performance of our stock and focuses them on the long-term creation of shareholder value. • Links the NEOs’ decision-making with the long-term outcomes of those decisions. • Long vesting period creates a significant retention tool and ties value ultimately realized to our long-term performance. | • Vest over a 9.5-year period: 30% on the 2nd anniversary of the date of grant, 15% on each of the 3rd through 5th anniversaries, 5% on each of the 6th through 9th anniversaries and 5% on the 9.5-year anniversary. • Stock price must appreciate for stock options to deliver value. • Options are net settled, resulting in fewer shares issued upon exercise. |
| Annual PSU
Grants | • Fosters a long-term commitment, motivates executives to improve the long-term market performance of our stock and focuses them on the long-term creation of shareholder value. • Links the NEOs’ decision-making with the long-term outcomes of those decisions. • Back-end weighted vesting term used for most PSU grants creates a meaningful retention tool. • Uses one of the longest vesting periods among our peers for most grants to create a significant retention tool and tie value ultimately realized to our long-term performance. | • Vest over a 5-year period and are back-end weighted: 15% vest after 13 months, 15% on each of the 2nd through 4th anniversaries and 40% on the 5th anniversary. • Vesting is dependent upon achievement of one or more robust performance goals that are tied to value creation. • Ultimate value of shares acquired upon vesting depends on stock price. |
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Emphasis on Performance
Total performance-based compensation in 2020 (using the grant date value of stock options and PSUs) increased significantly as a percentage of the NEOs’ total compensation.
2019 CEO COMPENSATION MIX 17% Other 11% Salary 19% PSUs 34% Annual Cash Grant 19% Stock Options 71% Total performance based 2020 CEO COMPENSATION MIX 1% Other 11% Salary 32% PSUs 24%Annual Cash Bonus 32% Stock Options 89% Total performance based 18 percentage points YoY increase in total performance-based target compensation 2019 AVERAGE NEO COMPENSATION MIX (EXCLUDING CEO) 13% Other 11% Salary 24% PSUs 31% Annual Cash Bonus 21% Stock Options 76% Total performance based 2020 AVERAGE NEO COMPENSATION MIX (EXCLUDING CEO) ‹<1% Other 14% Salary 26% PSUs 33% Annual Cash Bonus 26% Stock Options 86% Total performance based 10 percentage points YoY increase in total performance-based target comapensation
| • | Our equity-based compensation program aligns the NEOs’ compensation with our shareholders’ interests in that both the achievement of our operating, investing and capital goals and the level at which the awards ultimately pay out would be expected to be reflected to some extent in the market price of our stock. Because a significant portion of compensation for each NEO is in the form of equity, a significant portion of each NEO’s compensation is inherently tied to stock price movement and the achievement of long-term shareholder value creation. |
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| • | While our 2020 performance measures were “absolute” in nature, the Compensation Committee also reviewed (i) our performance measures on a “relative” basis compared to our peers over time and (ii) the amount of compensation paid to the NEOs relative to our adjusted EBITDA and free cash flow, as compared to our peers. |
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| • | The Compensation Committee reviews the nature and mix of compensation elements, as well as compensation plan design and award terms, to ensure that our compensation program does not include inadvertent incentives for our NEOs to take inappropriate business risks by making decisions that may be in their best interests but not in the best interests of our shareholders. In conducting this review, the Compensation Committee also considers specific business risks identified through our ERM process. |
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| • | Based on these reviews, we believe the design of the compensation program for 2020 is appropriate. |
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| • | See also “Shareholder Feedback on Executive Compensation and Compensation-Related Changes” for information about changes to our executive compensation program for 2021 that further enhance its performance-based nature, including the use of relative performance metrics. |
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Compensation Decisions
Base Salary
In March 2020, the Compensation Committee did not increase the base salaries of NEOs other than those of Messrs. Watson and Reid.
In response to the COVID-19 crisis in 2020, Messrs. Roberts, Cavanagh, Watson and Shell donated 100% of their salaries for six months to charities that support COVID-19 relief efforts.
Annual Cash Bonus
Our short-term incentive program includes meaningful performance-based elements tied to financial and operational goals.
| • | The target bonus opportunity in 2020 was 300% of salary for Messrs. Roberts, Cavanagh and Shell, was 200% of salary for Mr. Reid and increased from 250% to 300% of salary for Mr. Watson in April 2020. |
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| • | NEO target bonuses were designed for the NEOs other than Mr. Reid based 80% on quantitative financial goals and a blend of quantitative and qualitative performance relative to strategic operational priorities. The maximum bonus achievable was 175%. |
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| • | Below are the target weightings for each element of the NEO cash bonus plan: |
Financial (50%) Strategic Operational Priorities (30%) Discretionary (20%) Adjusted EBITDA (25%) Free Cash Flow (20%) Revenue (5%) Customer Experience (15%) Investment Initiatives (10%) Product Churn (5%) Management, Culture and Diversity, Equity, & Inclusion (20%)
Financial and operational goals are based on a rigorous and in-depth enterprise-wide consolidated budget that is prepared annually and takes into consideration economic factors, the projected operating environment for our businesses in generating profits, working capital and capital expenditure needs for the upcoming year, target product rollout numbers and other relevant incentive factors.
Financial Results
We delivered solid financial and operational results on a consolidated basis in 2020, demonstrating the resilience and strength of our company through the global COVID-19 pandemic. However, due to the negative impacts of COVID-19 on our financial performance in 2020, adjusted EBITDA and revenue financial goals were not achieved, primarily due to closures and/or limited capacity operations of our theme parks, movie theater closures worldwide and the postponement or cancellation of certain sporting events that negatively impacted both our advertising revenues globally and Sky’s revenue from sports package customers, as well as the overall negative economic impacts of the pandemic. The free cash flow performance goal was achieved above target in part due to effective expense and capital spending management in response to the pandemic.
No discretionary adjustments were made to the financial metrics below on account of the impacts from the pandemic.
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2020 FINANCIAL METRICS AND RESULTS(1)
($ in billions)
| | | | | | | | | | | % OF |
| | | | | | | | | ACTUAL | | TARGET |
| | | THRESHOLD | | TARGET | | MAXIMUM | | ACHIEVEMENT | | ACHIEVED |
| Adjusted EBITDA | | $34.55 | | $35.261 – $35.461 | | $35.95 | | | | |
| (excluding Peacock(2)) | | 10% – <25% | | 25% | | >25% – 37.5% | | $31.64 | | 0% |
| Revenue | | $113.30 | | $114.907 – $115.207 | | $116.25 | | | | |
| | 4% – <10% | | 10% | | >10% – 15% | | $102.70 | | 0% |
| Free Cash Flow(3) | | $11.45 | | $12.25 – $12.45 | | $13.00 | | | | |
| (excluding Peacock(2)) | | 8% – <20% | | 20% | | >20% – 30% | | $14.76 | | 30% |
| (1) | Amounts reflected have been adjusted to reflect Sky results on a constant currency basis. |
| (2) | Amounts reflected for the threshold, target, maximum and actual achievement exclude the impact of Peacock, which was launched in 2020 and is a component of the strategic operational portion of the annual cash bonus. |
| (3) | Threshold, target and maximum amounts were established based on a consolidated budget for 2020 that included incremental NBCUniversal and Sky investments, such as launching broadband in Italy and investing in our theme parks, which had significant negative impacts on free cash flow in 2020. |
Operating Results
Our operating performance in 2020 was strong, even with the COVID-19 pandemic headwinds. The factors below were evaluated in determining the achievement of strategic operational priorities in the table below:
| • | Comcast Cable, while keeping employees safe, kept millions of internet customers connected to work and learn from home while maintaining speed and reliability and enabling us to successfully manage the largest sustained traffic surge in history during the peak of COVID-19 in 2020. As described in further detail in “NEO Performance in 2020,” Comcast Cable also helped customers facing economic hardship and expanded our Internet Essentials program. As a result of these efforts, it attained record high residential customer satisfaction scores. |
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| • | Comcast Cable’s customer relationships increased by a record 1.6 million and Comcast Cable added a record 2 million net new internet customers. |
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| • | Comcast Cable rolled out over 2.6 million Flex boxes, one of its key strategic investment priorities. |
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| • | NBCUniversal launched Peacock in 2020 without the anticipated benefit of the Olympics, with 33 million sign-ups in the United States in just over its first six months, ahead of internal goals. |
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| • | NBCUniversal reorganized its television and streaming businesses with a centralized structure designed to optimize content creation, distribution and monetization and introduced a new “premium video on demand” strategy to bring movies directly to consumers given movie theater shutdowns. |
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| • | NBCUniversal found creative solutions to open its theme parks safely in Orlando, Florida and Osaka, Japan, while attaining strong customer satisfaction scores. |
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| • | Sky customer relationships at the end of 2020 returned to 99% of pre-COVID levels. |
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| • | Sky successfully executed key initiatives, including expanding Sky Q penetration to over 60% in the United Kingdom, launching Sky broadband in Italy, leveraging Comcast Cable’s xFi platform, and repositioning content investments in Germany. |
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2020 STRATEGIC OPERATIONAL PRIORITIES(1)
| | | THRESHOLD | | TARGET | | MAXIMUM | | % OF TARGET
ACHIEVED
(ROBERTS,
CAVANAGH) | | % OF TARGET
ACHIEVED
(WATSON(2)) | | % OF TARGET
ACHIEVED
(SHELL(3)) |
| Customer Experience | | 0% | | 15% | | 30% | | 16% | | 30% | | 11% |
| Product Churn | | 0% | | 5% | | 10% | | 5% | | 10% | | 5% |
Investment Initiatives
(Peacock, Flex, Sky initiatives) | | 0% | | 10% | | 20% | | 15% | | 15% | | 25% |
| Total | | 0% | | 30% | | 60% | | 36% | | 55% | | 41% |
| (1) | Based in part on whether we have met or exceeded expectations of achievement of quantifiable strategic operational priorities. Customer experience includes our relational net promoter score, unique contact rate and other customer experience metrics. Product churn relates to the stability of our cable customer base and customer net additions. Investment initiatives relate to the success of several company initiatives, including the launch of Peacock, the rollout of Flex and the launch of broadband services in Italy. Further details are not disclosed due to competitive concerns. |
| (2) | 5% of the 10% target for investment initiatives for Mr. Watson was allocated solely to the rollout of Flex. |
| (3) | Mr. Shell’s target for customer experience was lower at 10% (with a maximum of 20%) given his role at NBCUniversal, and his target for investment initiatives was higher at 15% (with a maximum of 30%), with 10% of the target being allocated solely to the launch of Peacock. |
NEO Performance in 2020
In evaluating the NEOs for the discretionary, qualitative portion of the annual cash bonus, the Compensation Committee considered the contribution of each NEO to the overall management and financial results of our company and to creating a strong workplace culture that emphasizes integrity, respect and our continuing focus on critical DE&I initiatives.
Each of the NEOs successfully led our company during this unprecedented period and managed our company with a view towards the long-term sustainability of our business. In addition to the operational accomplishments described above:
| • | Mr. Roberts led our company’s strategic focus on broadband, aggregation and streaming, which we believe will position our company to outperform and put us on a trajectory to emerge from this challenging environment in an even stronger position. Mr. Roberts set the tone for our businesses to execute at the highest level, to work together across our complementary, high-performing businesses at Comcast Cable, NBCUniversal and Sky and to continue to accelerate convergence in media and technology. At the same time, he guided our company’s overall response to the pandemic, as well personally leading our social justice commitments, with a focus on doing the right thing for all of our stakeholders and society at large during this unprecedented time. |
| • | Mr. Cavanagh led our businesses to quickly mobilize and analyze how to mitigate key strategic, operational and financial impacts from the pandemic. As well as ensuring our general business continuity, Mr. Cavanagh protected our company by maintaining our current credit ratings, balance sheet strength and liquidity so that we could commit funds to help our customers, employees and other stakeholders during this unprecedented time. He framed key determinations on critical strategic opportunities and operational challenges. He led important decisions about capital spending projects, such as our decision to pause construction on a fourth theme park in Orlando, and the lowering of the weighted average interest cost of our borrowings by 0.18% in 2020 through opportunistic refinancings to take advantage of record low interest rates. In 2020, our company generated consolidated adjusted EBITDA of $30.8 billion and free cash flow of $13.3 billion. Finally, he played a leading role in shaping changes to our compensation programs. |
| • | Mr. Watson successfully led our company’s pledge to keep America connected throughout the pandemic, from mobilizing most employees to work from home virtually overnight, to keeping employees safe, to helping with the challenges faced by our customers and communities working and learning from home. This pledge was made possible in part due to the flexible and reliable broadband network that we have invested significantly in over the years under Mr. Watson’s leadership. These investments have allowed us to proactively manage our network, increase broadband speeds, expand our Internet Essentials program for low-income households and offer new innovative products like Flex and Peacock for free to high-speed internet services customers. Comcast Cable’s financial and operational performance in 2020 outperformed many of our own expectations set before the pandemic, setting record numbers of customer relationships and net high-speed customer additions, while delivering an unparalleled customer experience throughout the pandemic. For these reasons, Mr. Watson was awarded the maximum amount of the customer experience and product churn portions of his cash bonus. Comcast Cable served as a strong anchor for our company overall in 2020, with its revenue increasing by 3.4% to $60 billion and its adjusted EBITDA increasing by 8.6% to $25.3 billion. |
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| • | Mr. Shell, in his first year as CEO of NBCUniversal, effectively led, realigned and mitigated negative COVID-19 impacts on NBCUniversal. He successfully launched Peacock, which had over 33 million sign-ups in the United States in just over its first six months without the anticipated benefit of leveraging the Olympics. He also introduced a new “premium video on demand” strategy to bring movies directly to consumers given movie theater shutdowns and realigned how the television, streaming and production businesses should operate to more effectively compete as more consumers shift to viewing streaming content. He encouraged the theme parks in Orlando and Osaka to find innovative and safe solutions for reopening and oversaw the development of Universal Beijing, which is on schedule to open in 2021. |
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| • | Mr. Reid led our company’s legal functions to several successes in 2020 including in the face of the difficulties arising from COVID-19 and, having assumed responsibility in January 2020 for overseeing our Government, Political and External Affairs functions at the federal, state and local levels, he counseled the businesses on successful navigation of unique challenges in the face of the pandemic and the 2020 electoral season. Mr. Reid has led our thinking as a new administration takes shape in Washington, D.C. and as the company prepares to act as a constructive partner with government on issues of broadband deployment and affordability. He leads with, and continuously reinforces, his commitment to integrity, and he champions our legal DE&I and pro bono initiatives. |
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| Each of the NEOs worked together to find safe and creative solutions to navigate the COVID-19 pandemic to benefit our employees, customers, communities, suppliers and shareholders now and for the long term. Among other initiatives and accomplishments described above in 2020: |
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| • | We committed over $500 million to support our employees where operations were closed or impacted due to the pandemic, made work from home options as broadly available as possible and enhanced safety measures for customer-facing employees and their customers. |
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| • | We helped our customers facing economic hardship maintain their broadband service, increased speeds for all Internet Essentials customers, expanded the Internet Essentials program by offering two free months of broadband service and made 1.5 million out-of-home, public WiFi hotspots available for free across the United States. |
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| • | Beyond our longstanding commitment to DE&I initiatives, we pledged an additional $100 million over three years to fight injustice and inequality through a coordinated cross-company effort. To date, we have made meaningful progress on this pledge, including by hosting a companywide DE&I day where over 70,000 employees participated; committing funds to BIPOC-owned small businesses that have been affected by extended closures in the wake of COVID-19; leveraging our media resources to highlight Black voices and Black stories; and deepening our longstanding commitment to address digital inequities, including by announcing plans to launch 1,000 WiFi-connected Lift Zones in community centers nationwide and by launching the Internet Essentials Partnership Program to connect large numbers of low-income students to the internet to support distance learning. |
NEO Annual Cash Bonus Achievement
As a result of the metrics and performance achievement described above, below is a summary of actual achievement for the 2020 annual cash bonus. Despite the strong individual performance of Messrs. Roberts, Cavanagh, Watson and Shell, the Compensation Committee negatively adjusted their achievement of the discretionary portion of their bonuses given overall company financial performance; Mr. Watson earned more of his discretionary portion relative to the other executives given the relative contribution of Comcast Cable to Comcast’s overall financial performance in 2020 and the exceptional operating performance of Comcast Cable.
| | | ROBERTS | | CAVANAGH | | WATSON | | SHELL |
| Financial Results | | 30% | | 30% | | 30% | | 30% |
| Strategic Operational Priorities | | 36% | | 36% | | 55% | | 41% |
| Discretionary | | 9% | | 9% | | 15% | | 4% |
| Total (% of Target) | | 75% | | 75% | | 100% | | 75% |
| Total Cash Bonus | | $7,738,301 | | $5,374,040 | | $5,943,951 | | $5,882,702 |
Mr. Reid’s bonus was not based on the above bonus structure for NEOs and instead was achieved at 100% based on company and his overall individual performance.
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Equity-Based Incentive Compensation
Equity-based incentive compensation granted through 2020 extended vesting periods for options and PSUs over a longer time period than most other large public companies – with options having 10-year terms and vesting over 9.5 years, and PSUs vesting over 5 years and being back-end weighted.
| YEAR | | 1 | | 2 | | 3 | | 4 | | 5 | | 6 | | 7 | | 8 | | 9 | | 9.5 |
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| PSU Vesting | | 15% | | 15% | | 15% | | 15% | | 40% | | | | | | | | | | |
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| Option Vesting | | 0% | | 30% | | 15% | | 15% | | 15% | | 5% | | 5% | | 5% | | 5% | | 5% |
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In determining the total value of equity-based compensation, the Compensation Committee considers, among other things, the overall performance mix of an NEO’s total direct compensation and the value of awards made to other executives, as well as the value of equity-based compensation awarded to comparable NEOs at our peer companies. While the grant date value of equity-based compensation in our annual award program may fluctuate somewhat from year to year, the target value of PSUs the Compensation Committee awards to NEOs is at least equal to or higher than the target value of stock options.
Before the COVID-19 pandemic was declared, the Compensation Committee increased the value of PSUs and stock options, which were granted to the NEOs on March 2, 2020, to place more emphasis on performance-based awards as an overall component of their total compensation.
The performance condition for PSUs granted in 2020 was not achieved, and therefore the first tranche, representing 15% of such PSUs, did not vest and was forfeited. The performance condition for 2020 was based on growth in year-over-year adjusted EBITDA (excluding Peacock), with 25% to 125% of the number of PSUs subject to vesting if growth had been within specified ranges.
Vesting for each subsequent tranche of PSUs is based on the highest vesting percentage of any prior vesting tranche, or such higher vesting percentage as may be attained for such subsequent tranche based on the same performance condition and achievement ranges provided for in the applicable PSU award. Any portion of PSUs that fails to vest in a year is permanently forfeited. For PSUs that were granted in 2017 through 2019, the fourth, third and second tranches, respectively, vested at the same percentage level as their respective first tranche.
As described above in “Shareholder Feedback on Executive Compensation and Compensation-Related Changes,” the Compensation Committee significantly enhanced the overall equity compensation design for our NEOs in 2021 by moving to a cumulative three-year performance period and incorporating performance metrics into our PSU awards. It believes this new overall design, including changes that will align the NEOs’ equity vesting terms with broader market practice, with PSUs 100% cliff vesting based on payout levels three years following grant date and options vesting over a two- to five-year period, will continue to achieve a long-term focus, strong retention benefits, serve as a valuable tool to attract talent and align our NEOs’ and shareholders’ incentives.
Deferred Compensation
Beginning in March 2021, amounts that our NEOs have deferred under our deferred compensation plans must be notionally invested in either a company stock fund, which tracks the value of our Class A common stock, or several third-party mutual and exchange funds, which will eliminate above-market interest earnings that had previously been earned through investments in an income fund with a fixed rate of return. Our deferred compensation plan is described in more detail below in the “Nonqualified Deferred Compensation in and as of Fiscal Year-End” table.
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Procedures for Determining Compensation
Compensation Committee’s Role, Process and Validation
The Compensation Committee approves the nature and amount of compensation paid to, and the employment and related agreements entered into with, our executive officers, and oversees broad-based cash bonus and equity-based plans, approving guidelines for grants of awards under these plans and determining and overseeing our compensation and benefits policies generally.
In 2020, the Compensation Committee reviewed for our NEOs:
| • | The nature and amounts of all elements of our NEOs’ compensation, both separately and in the aggregate, using comprehensive tally sheets that include the current value of PSU and stock option awards (as compared to their grant date value). |
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| • | Each element of our NEOs’ compensation for internal consistency. |
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| • | Various analyses provided by its independent compensation consultant, including: |
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| • | an assessment of the composition of our peer groups; |
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| • | a competitive pay assessment (comparing NEO compensation to that of executives holding comparable positions at our peer group companies as disclosed in proxy statements and to broad groups of companies in published surveys, and analyzing components of pay compared to those of our peer group companies (e.g., fixed vs. variable, components of long-term equity)); |
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| • | a financial performance review (comparing our performance relative to our peer group companies with respect to growth in adjusted EBITDA, free cash flow, revenue and total shareholder return, based on financial data from a third-party source); |
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| • | a compensation sharing analysis (analyzing the actual pay delivered to our NEOs as a percentage of our adjusted EBITDA and free cash flow as compared to our peer group companies); |
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| • | an incentive compensation design analysis (analyzing various annual bonus and long-term incentive design elements); and |
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| • | an analysis of equity dilution resulting from, and annual usage rates in, our equity-based compensation plans as compared to our peer group companies (i.e., overhang and burn rates). |
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| • | After taking into account the analyses above, the Compensation Committee evaluated our financial performance, as compared to our peers over time, as it related to our strongly competitive compensation philosophy. |
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| • | The Compensation Committee also reviews, but does not give significant weight to, aggregate amounts realized or realizable from prior years’ compensation when making decisions regarding current compensation. It believes that value realized on prior years’ compensation from stock appreciation is the reward for the NEOs’ work over that period and reflects the achievement of our long-term goals and, conversely, that lesser amounts realized on prior years’ compensation reflect a lack of achievement of our long-term goals. As such, the Compensation Committee believes that realized or realizable equity compensation is inherently aligned with our long-term performance and shareholders’ interests. |
Following these reviews and assessments, and with these goals in mind, the Compensation Committee determines what it believes to be an appropriate current year compensation package for each NEO. This process includes subjective criteria and involves the exercise of discretion and judgment.
Role of Compensation Consultants
The Compensation Committee has directly engaged Korn Ferry as its own independent compensation consultantconsultant. In determining 2020 compensation, the Compensation Committee directed Korn Ferry to provide it with various compensation analyses as described above; Korn Ferry did not recommend or determine compensation levels or elements, performance targets or compensation plan design.
The Compensation Committee assessed Korn Ferry’s work as required under SEC rules and concluded that its work for 2019. the Compensation Committee in 2020 did not raise any conflicts of interest. Our Compensation Committee reached this determination by reviewing fees paid to Korn Ferry and evaluating its work under applicable SEC and Nasdaq rules on conflicts of interest.
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Compensation Consultant Services
Korn Ferry provides research, analysis and input as to the form and amount of executive and director compensation, which generally includes market research utilizing information derived from proxy statements, surveys and its own consulting experience and insight, as well as the provision of other methodological standards and policies in accordance with its established procedures. This research, analysis and input has been provided to both our Compensation Committee and to management. The Compensation Committee collaborated with Korn Ferry to determine and approve the parameters used to conduct the assessment work, including items such as the composition of peer groups, the relevant market statistical reference points within the data (e.g., median) and the elements of compensation. Korn Ferry did not determine2019.2020.
In 2019,2020, we paid Korn Ferry approximately $536,000$524,000 for services related to executive and director compensation and paid Korn Ferry approximately $1,146,000$831,000 for leadership and talent consulting and executive search services.
Our Compensation Committee has determined that Korn Ferry’s work for us does not raise any conflicts of interest. Our Compensation Committee reached this determination by reviewing the fees paid to Korn Ferry and evaluating its work under applicable SEC and NASDAQ Global Select Market rules on conflicts of interest. This evaluation included considering all of the services provided to us, the amount of fees received as a percentage of Korn Ferry’s annual revenue, its policies and procedures designed to prevent conflicts of interest, any business or personal relationships between Korn Ferry and the members of our Compensation Committee or executive officers and any ownership of our stock by Korn Ferry’s team that provided our executive and director compensation services.
As part of their job responsibilities, certain of our executive officers participate both in gathering and presenting facts related to compensation and benefits matters as requested by the Compensation Committee and in formulating and
available and follow the 