TABLE OF CONTENTS
Our Board is committed to corporate governance that serves the best interests of our company and shareholders, and to active engagement with our shareholders throughout the year. The following summarizes certain highlights of our Board’s expertise, guiding principles, corporate governance practices and policies.
| | |
Breadth of Skills
and Expertise | | | From the inception of our firm, we have sought to ensure that each of our directors brought a level of experience and expertise that was outsized relative to an early stage firm to ensure immediate and effective implementation of our firm’s long-term strategic goals and to provide oversight of our firm’s risk profile and strategic goals. Our Board is committed to the ongoing evaluation of its composition, including the skills and expertise of each director as well as the diversity of our directors and how their collective skills align with our evolving business strategy. In July 2020, Grace R. Skaugen was appointed to our Board, further deepening the depth and breadth of experience and expertise of our Board specifically as it relates to our international business activities in Europe. | |
| Commitment to Diversity | | | The Board believes that fostering an inclusive culture—which welcomes differing perspectives, backgrounds and beliefs—enables us to provide the best advice and insights to our clients. As such, diversity is an important consideration in the composition of our Board.Board, which has two female directors and one LGBTQ+ director. | |
| Independent & Engaged Board | | Six
| Five of our sevensix current directors (86%(83%) are independent, with all Board committees comprised entirely of independent directors. During 2020,2021, each director attended at least 75% of all Board meetings and meetings of each Board committee on which he or she served. | |
| Strong Lead Independent Director | | | The Board’s Lead Independent Director facilitates independent oversight of management. Our Lead Independent Director is responsible for coordinating the efforts of the independent directors to ensure that objective judgment is brought to bear on important issues involving the management of the company, including the performance of senior management. See “Corporate Governance Matters—Board Leadership Structure and Lead Independent Director Role” below. | |
| Shareholder Engagement and Responsiveness | | | As part of our annual shareholder engagement program, we contact and hold meetings with many of our largest shareholders to offer meetings to discuss a range of topics related to the company’s strategy, governance profile, executive compensation practices, corporate sustainability, human capital management and other matters. A thematic summary of recent investor conversations is included under the section “Corporate Governance Matters—Shareholder Engagement and Responsiveness” below. | |
Annual
Evaluations | Annual Evaluations | | | Board and committee self-evaluations are conducted annually to review and consider board structure, leadership, oversight needs and requisite skills to best guide the company in executing its long-term strategic objectives. Our Board annually reviews its size and composition and assesses its ability to function effectively and with appropriate expertise and diversity. | |
TABLE OF CONTENTS
| Open Channels of Communication Between the Board and Our Firm | | | The Board maintains open channels of communication across our firm. Members of the Board engage and spend time with our executives, partners and other colleagues throughout the year in a variety of forums. |
| | |
| Minimum Equity Ownership Guidelines | | | We have minimum equity ownership guidelines for our Named Executive Officers and Directorsdirectors that require significant ownership of our common stock. Our CEO is required to hold equity in our company with a market value equal to or greater than ten times base salary and our other Named Executive Officers are required to hold equity in our company with a market value equal to or greater than five times base salary. Our directors are required to hold equity in our company with a market value equal to or greater than three times their annual retainer. All of our Named Executive Officers and directors are, or will be within the time ascribed in our ownership guidelines, in compliance with our Minimum Equity Ownership Guidelines. | |
We have policies, procedures and processes in place to identify, assess, monitor and manage the risks inherent in our business activities. Our risk management framework consists of Board- and management-based committees in order to instill a culture of openness and transparency. This helps to reasonably ensure that important risks are identified and communicated to senior management and, where appropriate, to the Board.
The Board of Directors’ Role in Risk Oversight
Our Board recognizes the importance of effective risk oversight in running a successful business and in fulfilling its fiduciary responsibilities to the company and its shareholders. While our management is responsible for the
day-to-day management of risk, our Board, along with executive management, is responsible for promoting an appropriate culture of risk management within the company and for
setting the right “tone at the top,” overseeing our aggregate risk profile and monitoring how we address specific risks.
Our Board has been and continues to be engaged with management in the oversight of the impact of
COVID-19 on the company and the company’s actions in response. The Board continues to identify and monitor potential risks and reasonably ensure effective oversight.
| |
| • | | | The Board exercises its oversight responsibility for risk both directly and through its standing committees. | |
| • | | | Throughout the year, the Board and each of its committees dedicate a portion of their time reviewingto review and discussingdiscuss specific risk topics. | |
| • | | | On a periodic basis, members of senior management report on our top enterprise risks and the steps management has taken or will take to mitigate these risks. | |
| • | | | Our Chief Technology Officer provides updates to the Board on technology and cybersecurity, which includes an annual in-depth review. | |
TABLE OF CONTENTS
| • | | | Our Chief Compliance Officer provides updates to the Board on regulatory and compliance matters, which includes an annual in-depth review. In addition, our General Counsel updates the Board regularly on material legal and regulatory matters. | |
| • | | | Our Global Head ofChief Human Resources Officer provides updates to the Board on Human Capital matters, including hiring investment, talent, and diversity and inclusion. | |
| • | | | Regular reports are also provided to and discussed by the Board regarding recent business, legal, regulatory, competitive and other developments impacting our company. | |
Audit Committee | | Compensation Committee
| | Nominating/Corporate
Governance Committee |
• Focuses on oversight of financial risks relating to the company, including: Ø
➢ Financial statements, financial reporting and internal controls; Ø
➢ Performance and independence ofof independent registered public accounting firm; Ø
➢ Performance of internal audit; Ø Tax strategy;
Ø
➢ Legal and regulatory; and Ø
| | | • Focuses on risks relating to executive compensation plans and arrangements, including: Ø
➢ Our compensation policies and practices for our Named Executive Officers and other employees; andØ
➢ Our incentive and equity- based compensation plans.plans; and
➢ Our human capital management efforts and our focus on diversity, equity and inclusion. | | | • Focuses on risks related to our overall corporate governance, including: Ø
➢ Board and committee composition; Ø
➢ Board size and structure; Ø
➢ Director independence; Ø
➢ Our corporate responsibility. responsibility; and
➢ Shareholder engagement. | |
Management-Based Risk Committees
We have committees that meet regularly with the mission of identifying risks inherent in our business activities and the financial services industry generally. These committees are responsible for incorporating risk management into the firm’s daily business activities. These committees include, but are not limited to, the Executive Committee, Management Committee, Operational Risk
Management Committee, Compliance Risk
Committee, Disclosure Committee and various committees at each business unit level.
As a financial services company, our business is subject to extensive rules and regulations in the United States and around the globe. Adherence to these various rules and regulations is paramount to the reputation and success of our company. As such, all of our partners and employees are required to participate in various mandatory regulatory and compliance training programs designed to educate our partners and employees on the many laws, rules and regulations that impact our firm as well as reinforce the gravity of adherence to such laws, rules and regulations. Such programs include, without limitation, regular compliance training sessions on the firm’s Global Compliance Policies Manual and Written Supervisory Procedures, including training sessions on our Anti-Money Laundering/Know Your Customer rules and procedures. In addition, all partners and employees receive training on PJT Partners’ Code of Business Conduct and Ethics and our
TABLE OF CONTENTS
policies and procedures for reporting wrongdoing (see “Corporate Governance Matters—Communications with the Board—Whistleblower Program” below).
Cybersecurity and Data Protection
Our clients typically provide us with sensitive and confidential information.
Breaches of our network security systems could involve attemptsattacks that are intended to obtain unauthorized access to, or to destroy, sensitive or proprietary information, or to destroy data or disable, degrade or sabotage our systems. These attempts may involve the attempted introduction of computer viruses or malware, phishing or email spoofing, denial-of-service, or cyber-attacks andof other means that originate from a broad array of sources, including unknown third parties. We take various measures to ensure the confidentiality, availability, and integrity of our systems, including implementation of security controls and regular training of our partners and employees with respect to measures we can take to try to thwart cybersecurity attacks. Further, all of our employees are trained at least annually on our Information Security Polices and Written Supervisory Procedures.
We published our first Corporate Sustainability Report in 2021, which is available on the Investor Relations page of our website at www.pjtpartners.com. Over the past several years, we have witnessed the increased importance of good corporate citizenship and the continued integration of sustainability considerations into our business model. We believe addressing environmental, social and governance (“ESG”) matters is fundamental to running a successful business. Our integrated approach to sustainability has become an important part of the fabric of our culture and work environment. As a human capital-intensive business, our impact can most readily be seen in our commitment to our people, especially with regard to diversity, equity and inclusion (“DE&I”). We are deeply committed to being one of the top places to work for the most talented professionals in the industry, and while we are proud of our inclusive organizational culture, as described in more detail in this Proxy Statement, we recognize there is still important work to do.
Human Capital Management Philosophy
We believe that our culture is critical to all aspects of how we do business and to our long-term success.
Since inception,From day one of our firm, we
were committed to our culture being a commercial differentiator. We have prioritized attracting
and retaining top talent from a diverse range of backgrounds and experiences, focusing on those who
are both
alignedalign with and
can enhance our culture in positive ways.
Our human capital successes are evident
inthrough the number and quality of hires we have made, our low levels of
voluntary attrition and the feedback we receive through our employee surveys. Reinforcement of the culture we are building comes through engagement with our employees, the reward principles we apply to compensation and promotion decisions and
through our various talent development initiatives, which continue to evolve as we grow.
As of December 31,
2020,2021, we employed
749833 individuals globally, including
8897 partners.
Board Oversight of Human Capital Management
Our Board is actively engaged in human capital management. Our Board periodically reviews a management succession plan that includes, among other things, an assessment of the experience, performance and skills of potential successors to our Chairman and CEO and our Managing Partner. CEO succession planning discussions are ledheld in executive session by the Lead Independent Director. our Board.
TABLE OF CONTENTS
More broadly, the Board, including the Compensation Committee, is regularly updated and consulted on key talent hires as well as key aspects of the company’s human capital strategy. Human capital priorities are continuously refined based on business drivers, employee feedback and the overall environment for talent.
The Nominating/Corporate Governance and Compensation Committees conduct a review of our human capital management practices and disclosures. Members of the Board also actively engage and spend time with our
executives, partners and
other employees
at various forums throughout the year,
atincluding Board meetings
and partner
meetings and a variety of other forums.meetings. Board members are also kept abreast of human capital management matters through participation in firm-wide town hall meetings and are included on employee communications, including announcements of transactions on which the
companyCompany has advised.
Employee Feedback and Engagement
We view active dialogue with our employees as essential to maintaining our unique culture. Since 2017, we have conducted
various employee surveys to
provide a formal channel through which weformally gather systematic feedback. Participation is high, with consistent feedback on a multi-year basis. The key positive themes include a strong belief in our commitment to doing the right thing for both our clients and our firm, a belief that
PJT Partners haswe have a differentiated culture, a commitment to excellence and a strong sense of respect among colleagues.
In addition, we host regular firm-wide town halls to connect employees with our management team and business leaders.
We use feedback from the survey,
town halls and other employee
connectivity forums to inform our ongoing efforts
towardstoward continuous improvement, including as it relates to broad human capital themes as well as more specific issues,
like employeesuch as support during the
COVID-19 pandemic. pandemic and how to improve various annual processes.
We have numerous other channels through which we engage with our employees on human capital topics, including our recruiting committee, talent development committee, women’s development series, individual performance reviews and other less formal forums, such as regularly scheduled meetings by business and level. We use these various channels to solicit input on issues, such as resourcing and training priorities. More recently, we established regular forums for engagement during COVID-19, to ensure our employees remain connected at all levels and feel supported in areas of wellness, including as it relates to mental health, and ways in which the company can give back to the communities in which we operate. We have also established forums for engagement around how we broaden our diversity lens, including through regular discussion with our bankers who identifyemployee resource groups, such as Black.PJT Pride and the PJT Black Professional Network.
We believe our firm culture is reinforced through our reward mechanisms. Since the inception of our firm, our compensation structures have been designed to encourage a focus on sustainable franchise growth and collaboration, and do not include individual revenue
pay-outs. For a broad group of employees, discretionary bonuses also typically include a
companyCompany stock component to ensure long-term focus and alignment with the interests of our
company.Company. All compensation and promotion decisions are informed by the following Reward Principles, which are communicated to managers and employees alike:
character;
collaboration;
commercial impact/client relationships; and
content.
|
Character
|
|
• Always acting with integrity and doing the right thing
• Being an effective and inspirational team manager
• Adhering to and promoting a culture of compliance and good conduct
• Having a mindset that focuses on safeguarding our reputation
• Protecting the client’s and the company’s interests
• Prioritizing long-term sustainable return over near-term gain
|
Collaboration
|
|
• Recruiting, mentoring and developing talent
• Respecting colleagues and different points of view
• Building collaborative relationships across businesses and regions
• Bringing the appropriate capabilities to bear in advancing our clients’ objectives
|
Commercial Impact/Client Relationships
|
|
• Evidence of deepening relationships and an enhanced quality of client dialogues
• Effectively communicating the value proposition of our company to our clients
• Ensuring the company is appropriately rewarded for what we bring to the table
|
Content
|
|
• Bringing new and innovative approaches to problems
• Drawing on a broad range of information, relationships and support to provide unique content and solutions
• Amplifying the company’s impact and brand through differentiated domain expertise
8
|
TABLE OF CONTENTS
Employer of Choice Initiatives
From the beginning of our firm, we have strived to provide pay, benefits and other ancillary support mechanisms that help meet the varying needs of our partners and employees. Our total rewards package is based on competitive pay and is often structured to include discretionary bonuses that employ long-term incentives. Such incentives are designed to ensure alignment with our shareholders and the overall success of our firm. Other benefits we provide employees include health care, 401(k) plan and pension matching, gender neutral primary and secondary caregiver leave, generous paid timepaid-time off, discounted gym memberships, weekly wellness sessions, access to walk-in health care, emergency child care and an employee assistance program. TheseOur benefits were continuously reviewed and adapted during the COVID-19 pandemic, withand we recently enhanced many of our employer of choice initiatives, including global alignment of primary caregiver leave to 26 weeks, increase of our secondary caregiver leave to 12 weeks, leave for military personnel and the additionexpansion of our vacation stipend program and emergency child care offering. We have also added new benefits including mental health and resilience training, expansionthe piloting of emergency child care benefit, virtualan onsite therapist in our London office, online workout classes and a
disruption stipend for all employees below a certain level.online guided meditation. Furthermore, we acknowledge work-life balance issues for our employees including through a paid-time off policy that is consistent irrespectivefor all regardless of level, and a vacation stipend for Associates and Vice Presidents.
level.
It is our practice to review and benchmark our compensation and benefit practices annually and consider feedback from our employee surveys to ensure we remain an employer of choice.
Diversity,
Equity and Inclusion
We believe that fostering
Our success as a firm is centered on recruiting, developing and retaining top talent from a diverse range of backgrounds and experiences. Fostering an inclusive culture, which welcomes differing perspectives and beliefs, enables us to provide the best advice and insights to our
clients. As such, we seekclients and to
recruit, develop and retain top talent with diverse backgrounds and experiences.be an industry leader. Our efforts in this regard include
early insight campus recruiting programs focused on
increasing the numberensuring greater race and gender diversity of
female applicants, recently launched campus recruiting programs focused on improving our
ability to recruit diverse candidates,applicant pool and a diversity fellowship for business school
applicants and a development and inclusion series focused on existing diverse employees at the firm.applicants. We also continue to challenge ourselves to broaden the candidate profiles we review, ensuring we are looking beyond traditional finance programs. These efforts are supplemented by our use of an artificial intelligence recruiting tool specifically designed to identify talent from a broader range of backgrounds than may be identified purely from
more traditional methods.In 2020, we recommittedrésumé reviews.
We continue to commit ourselves to diversity and inclusion, with a particular emphasis on broadening the lens from gender equity to include a
bettermore directed focus on race and the recruitment and retention of LGBTQ+ professionals.
We commenced a series of open forum discussions about race,More recently, we hosted
byawareness sessions focused on diversity, equity and inclusion with our senior
executivesemployees and
guest speakers with perspectives onestablished employee resource groups, including PJT Pride and the
topic, as well as firm-wide recognition of Juneteenth as a holiday. For the upcoming campus recruitment cycles, we have expanded our existing diversity fellowship to include LGBTQ+ applicants.PJT Black Professional Network. Furthermore, we elevate the importance of diversity and inclusion as
day-to-day workplace considerations through our annual training programs that include: Working with
Respect;Respect, Your Influence and Impact at PJT
Partners;Partners, and Fostering a Positive Work Environment.
To further emphasize the importance of diversity and inclusion as a critical part of our culture, every employee wascontinues to be required to state an individual objective related to diversity and inclusion as part of their 2020 year-end review. Progress towards these objectives will beis discussed as part of mid-year and year-end reviews in 2021. performance and development reviews.
TABLE OF CONTENTS
We understand that
to retain retaining best-in-class talent
and building a firm for the long term requires providing the opportunity for career growth. With this in mind, we invest in a range of
traininggrowth and development opportunities including the
developmentimprovement of technical skills,
client communication and
managementleadership capabilities. We also recognize that our long-term success requires not only the recruitment of
best-in-class senior talent, but
also in providing positive career trajectory and upward mobility for our
other employees. To that end, we continue to make significant improvements to our promotion process,
such as strengthening our Managing Director promotion process and
in our commitment to mentoring our rising talent, including through partnering with external
executive coaches.
These development efforts need to be consistently reinforced. Our review process and reward principles are designed to facilitate high-quality, honest feedback that supports the development of our people, enriches our culture and ensures we review, reward and develop people based on our values.
Engagement with the Broader Community
Our firm and our employees are actively engaged in supporting the needs of the underserved in the communities where we operate. To aid in the support of the communities we serve, the company our partners and our broader employee baseemployees have donated almost $4 million over $2 millionthe last two years to nearly one hundredmore than 180 global organizations across our communities to COVID-19 related causes and organizations dedicated to COVID-19 relief, mental health related causes or the advancement of racial equity. Our employees, including our summer interns, have also made significant contributions of their time, volunteering overmore than 500 hours of service to the communities in which we
operate. In the case ofWe have continued to require our 2020 summer interns, the company required that all program participants to complete a community volunteering project as a condition of a full-time offer for 2021.
the following year.
Responding to the
COVID-19 Pandemic
Our foremost priority throughout
As has been the
COVID-19 pandemic hascase since the beginning, our return-to-office goals have been
driven by a desire to reconnect with colleagues and clients, build our business and further develop our culture, while continuing to prioritize the health and safety of our employees, clients, vendors and
the communities where we live and conduct business.
There is no doubt that having our employees back in the office and spending time with clients helps facilitate these goals. Our employees have appreciated the flexibility inherent in a remote environment, and we are incorporating that desire for flexibility into our overall return-to-office plan. We
have been carefulcontinue to follow safety protocols informed by guidance from the United States Centers for Disease Control and
deliberate in allPrevention and local equivalent bodies for our
decisions with these stakeholders in mind.international offices. Our Board has been, and continues to be, actively engaged with management in the oversight of the impact of
COVID-19 on the company and
the company’sour actions in response.
The financial services industry is intensely competitive, and we expect it to remain so. Our
employees began working remotely in mid-March 2020, transformingcompetitors are other investment banking and financial advisory firms. These entities include brokers and dealers, investment banking firms and commercial banks. We compete on both a global and a regional basis, and on the
way we typically do business in order to keep our employees, their families and our communities safe. We undertook steps to allowbasis of a
limited number of
employees to return to certainfactors, including the strength and depth of
client relationships, industry knowledge, transaction execution skills, our
office locations on a voluntary basis, following our rigorous established safety protocols, which are based on guidance from the United States Centers for Disease Controlrange of products and
Preventionservices, innovation, reputation and
local governments in the geographic locations in which we operate.Throughout the pandemic, we have provided our employees with a variety of resources to support them while they worked in these changed and challenging circumstances. We expanded our wellness resources to include sessions on mental health and resilience, virtual workout and meditation sessions, and workshops for parents on how to navigate child care while schools are operating remotely. price.
We also
provided disruption stipendscompete to
attract and retain qualified employees. Our ability to continue to compete effectively in our
more junior employees at the onset of the remote transitionbusiness will depend upon our ability to
assist them financially with setting up their at-home offices.We have maintained a high level of employee engagement during this time through firm-wide meetings led by our senior leadership, frequent communications to our employee base keeping them informed of our COVID-19 efforts and the benefits available to them through the company, and published a work from home guide. We have continued to ensure our employees are well-positioned to be successful in their remote working environments through surveys seeking feedback on remote working environments and how the firm can best support them. In addition, we have employed strategies and established internal initiatives to stay connected with one another and preserve our culture in this virtual/remote environment. These efforts also included evolving our onboarding program forattract new employees hired during this time. Our internal survey feedback reflectsand retain and motivate our existing employees. As a result, we remain focused on ensuring that our employees have appreciated the level of our commitment to thememployment proposition includes an attractive culture, development opportunities and are satisfied with the communications from management on our COVID-19 response.
Our employees have remained engaged, highly productive and committed to driving business results, which we believe is a testament to the strength of our culture. We are also proud of the ways in which our employees have given back, in both time and money, during a pandemic that has created huge challenges in the communities in which we live and work.
competitive rewards.
Environmental PracticesTABLE OF CONTENTS
We are committed to bringing greater efficiency and environmental sustainability to the operations of our leased office spaces that reflect industry best practices.
Our corporate headquarters in New York, NY is LEED® (Leadership in Energy and Environmental Design) certified gold-rated and all of our leased office spaces in the U.S. are LEED® certified as well. Our corporate headquarters is also a BOMA (Building Owners and Managers Association) 360 program design.
Executive Compensation Philosophy
Our executive compensation program considers firm-wide financial measures to ensure alignment with shareholders and a collaborative working environment among senior executives, in addition to goals targeted to each of the Named Executive Officers. We seek to ensure that each Named Executive Officer has goals that are tied to tangible measures of business success as well as those that are focused on leadership and talent development. We recognize the importance of leadership and talent development in building a sustainable franchise. In 2021,
talent goals will includeemployee evaluations included an even greater commitment to
DE&I, where employees were also evaluated on the strength of their contributions to diversity and
inclusion.inclusion within PJT Partners.
To ensure that we are able to attract and retain executives and other professionals that will contribute to the long-term success of the company, our compensation program for the firm overall aims to be market-competitive versus our peers, in both quantum and structure.
In order to meet these objectives, our compensation program includes:
annual incentive compensation that places a strong emphasis on firm-wide financial performance, with the flexibility to assess company and individual performance;
an appropriate link between compensation and the creation of shareholder value through long-term focusedequity awards and, retention-driven incentive awards;where appropriate, other awards that consider reward for cumulative long-term incentive awards granted in relation to 2020 performance the vesting schedule for partners was increased from three years to four years (with vesting in equal installments on the second, third and fourth anniversaries of the grant date);
or have a retention focus via claw back mechanisms;a focus on sustainable franchise growth and collaboration, and therefore does not include individual revenue pay-outs;
recognition of the contribution to the firm’s goals of employee development (including a focus on leadership, diversity and inclusion);
adherence to the firm’s culture of compliance with the many rules and regulations pertinent to the financial services industry;
long-term incentives that do not promote excessive risk-taking; and
benchmarking analysis to help us understand compensation practices of our competitors.